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Creativity drives the founder and his company

Rochester Business Journal
November 29, 2013

He is an idea man.
 
David Chauncey and his forward thinking have propelled his company, Vnomics Corp., to become one of the fastest-growing companies in Rochester after five years in business-with 400 percent growth this year alone.
 
His idea to focus on the driver in monitoring vehicle performance has brought major change to the commercial trucking industry.
 
"If the driver is driving aggressively, it means that he or she is not very fuel-efficient and probably not very safe, causing a lot of wear and tear on the vehicle," said Chauncey, Vnomics' president. "We found that the driver can change the fuel economy by 30 to 40 percent just by the way they drive."
 
What started in 2008 as a one-man company, Chauncey alone, has grown to an additional 57 people. The firm ranked No. 99 on the 2013 Rochester Top 100 list of fastest-growing private companies.
 
Chauncey, 50, a native of Alden in Erie County, has always generated ideas easily. He has built his career by finding solutions to problems that might defeat others.
 
"He has a way of looking at things differently," said his wife, Susan Chauncey. "He's always wanted to come up with a solution for something, and he's always thinking of a better way of doing something-but yet in a practical way. To see how he comes up with an idea and then follows through on it is exciting. ... (It is) living with an inventor."
 
She added: "I'm really proud of him. He worked so hard, and it's nice that he is seeing a little bit of success. There (are) not very many problems in his life; there (are) opportunities."
 
Growing up in Alden, Chauncey saw his father's success as an entrepreneur and approached life like an engineer early on.
 
"There was no doubt I was going to be an electrical engineer," he said. "I was just fascinated by stuff. My mother-she was always so mad at me because I'd always take stuff apart and I never really put it back together. I just wanted to see how it (worked)."
 
After graduating from Rochester Institute of Technology in 1986, Chauncey worked for Buffalo-based Sierra Technologies Inc. as a microwave technical specialist and senior radio frequency engineer. He helped to design systems for domestic and foreign military customers.

An entrepreneur
He also did technology research and development work at Sierra, and that became the foundation for his next venture, co-creating Clearwire Technologies Inc.
 
In 1997, he became a founder, chief technical officer and vice president of engineering for the startup, now Clearwire Equipment LLC. Providing high-speed mobile broadband was the Buffalo firm's main focus.
 
"I had this idea that everybody would want to have high-speed Internet access on their phone, and this was when Internet was just starting. We didn't really have Internet, but I could see kind of where it was going to go," Chauncey said. "We were a little ahead of our time."
 
His friend of 43 years, Brad Foster, worked with him at Clearwire.
 
"To work with Dave is (to have) a very straightforward approach (to) business," Foster said. "He creates an environment of freedom and growth, but he's very ready to address risk and any challenges. He really took some of our challenges that we had and turned them into fun. I would lose sleep at night, but the next morning he would come up with some logical path forward."
 
He added: "Dave doesn't see levels much. So he's president (of Vnomics, but) he just has a role to fill. He drives a pickup truck to work every day, and he parks way out in the back side of the lot. He doesn't have that front (parking) space. ... He walks in from the back lot just so he can get a little more exercise every day, and if I know him, he's still bringing a bagged lunch."
 
After seven years with Clearwire, Chauncey decided to move on in 2004 to a new company in a new place. He and his wife, a Fairport native, moved to Rochester, which gave him new career opportunities.
 
He began working as a senior systems engineering manager for Harris Corp.'s RF Communications division, which brought some of his ideas to market. He developed a product to help troops overseas gain access to the Internet-a high-capacity, line-of-sight radio.
 
"It allowed the people at the lowest levels in the Army structure, down the squads, to have high- speed Internet," Chauncey said. "Especially during the Iraq war, where it was really bad-if they had information they had to get back and forth, they had to drive it across town, and driving was (dangerous)-now they could just transmit it."
 
Harris offered employees an opportunity for advancing their education, and in 2005 Chauncey enrolled in the Simon School of Business at the University of Rochester as a part-time student, still working for RF Communications full time.
 
"One of the things that happened during the Clearwire startup was that I learned that you can't just be like the technology geek in the back room," Chauncey said. "You have to know about business."
 
During that time, RIT reached out to him to help commercialize a technology that a team of researchers had been working on for the Department of Defense. The researchers at RIT licensed technology in which the Defense Department had invested $30 million, looking for commercial applications.
 
The 10 years of research for the military had focused on part failure prediction.
 
"We actually had some opportunities in the DOD space," Chauncey said, "and it's really hard to found a company in DOD land just because it takes so long for their sales. They have to get contracts and get them awarded and put out requests for proposals, and it goes on forever."
 
Chauncey realized the commercial trucking industry would be the right market for the technology.
 
Richard Kaplan, a Chauncey friend, an investor of Vnomics and the CEO of Torvec Inc., observed: "Breakdowns are one of the banes of existence for trucking companies, because, No. 1, if it happens 1,000 miles out or something, they're at the mercy of some small garage. And the price for the biggest thing is they don't get their product to their client. It's just a total mess."
 
Chauncey also hit upon a key differentiator that would make his company more valuable to customers than any possible competitors. Vnomics would not only adapt the technology to commercial fleets but would focus its use on the driver's influence on the lifespan of a commercial vehicle.
 
"It turns out that that the largest expense for a fleet is the (salaries of the) drivers and the second-largest is fuel, so we were looking at information and data from a maintenance perspective," Chauncey said. "Most of the people don't own their trucks. The company owns the truck, so it's like a rental car. You don't drive your car the same as (a rental car)."
 
He added: "I can give the driver a report the next day or something, and you can sit there and say, 'Oh, you didn't do this very well; you didn't do that very well,' but it's all too late. The only time that you can really change what is going to happen is at that instant in time when it's happening."

Launching Vnomics
Chauncey formed Vnomics with the support of RIT researchers in October 2008. He left RF Communications at the same time and received his MBA in March 2009.
 
"Most of the success of this company is the fuel savings, and that really was David's brainchild," Kaplan said of Vnomics. "That was quite a creative leap. David deserves an incredible amount of credit (for) the creativity of coming up with that idea. When he first started thinking about it, we were going over all the problems, and he just solved them."
 
The company's aim is to predict a vehicular problem and take preventive action before it occurs.
 
"You can't go in there (to the market) as just a 'Me too,'" Chauncey said. "You have to have something that makes you really different. For me it has to be a technology and it has to be patentable. It has to be unique so that other people can't duplicate it easily."
 
Taking advantage of the RIT researchers' experience in creating the technology and his own idea for driver accountability, Chauncey gradually built a team for the vehicular performance management company. Signing up clients proved difficult for the first few years.
 
"When we got out in the world and we started talking to people, it was really hard to sell," Chauncey said. "It's like I'm going to tell you that I can keep your car from breaking down, and (customers were) like 'Well, I don't know whether it will really break down or not.'"
 
The company allowed new customers to test the technology before they bought it. The system alerts a driver when he or she is driving inefficiently, producing a series of audio tones in the cab to signal problems with acceleration, shifting for uphill climbs, speed or some other factor in performance.
 
If the driver fails to stay within limits set by the system, a text message can alert supervisors. The system also scores each driver on a scale of 100 after a trip, allowing supervisors to compare their drivers weekly.
 
Throughout a trip, supervisors can track the truck along its route and get a clear picture of the operator's driving habits, how much more time that person may work and how many miles he or she has logged. With the greater accountability, drivers have a better sense of their job performance.
 
"Most of the drivers, when you first talk to them, are leery of it, I would say. But after they work with it a little bit, they find out that it's really their friend," Chauncey said. "As long as they listen to us, they're going to improve, and what we've found is we can save significant money on fuel."
 
He added: "Most people want to be the best at what they do if they're really passionate about what they do. The way we create our score, it normalizes out all the different variations of everything that's going on, so you actually can compare the scores directly."
 
The drivers see the fuel savings right away.
 
"This guy calls us and says, 'You know, for the last two years I've been driving, I get in my truck in Dallas, I drive to Tulsa, I fill up the tank (and) it takes me 83 gallons of fuel," Chauncey said. "And now that I'm listening to your system, I'm paying attention and I'm watching what I'm doing ... it's 71 gallons."
 
Competitors offer systems with GPS or other tracking mechanisms, but none incorporates the same technology as Vnomics.

Growth potential
The beauty of the commercial trucking industry as a market for Vnomics is its sales potential. A small trucking company has 25 to 100 vehicles, and a large company may have thousands of trucks. With one sale, Vnomics' profit is multiplied by the size of the entire fleet.
 
The company's technology generally saves $250 a month per vehicle, and the customer's cost per vehicle for the technology is $50 to $60 a month.
 
"If it's a really big market, you can go in and get market share and nobody else notices that you're even there," Chauncey said. "That's the good thing about the commercial trucking industry: They're in fleets, so you get one sale and you've sold more than one at a time. ... It might be 100, might be 200, might be 1,000 or 8,000."
 
One customer saved $12 million in fuel last year by using Vnomics' system. Another customer, a local company, expanded from 36 to 62 vehicles after using the technology over an 18-month period.
 
Before this technology, trucking companies, competing in an estimated $3 billion industry with more than 9 million heavy trucks on the road, would have to trust that drivers were transporting a customer's goods safely.
 
"When they leave this loading dock, to the time they arrive at that loading dock, you have no idea what they did," Chauncey said. "You don't know where they are. You don't know how they're driving your truck; you don't know if they're being safe. All this time, your name is printed in big letters across the side of it, so if they do something bad, that's your reputation.
 
He added: "You can't ride with them, so that's part of what we do-we actually ride with them, and we coach them like you would coach them. If something is going wrong, you get a notice so that you can intervene and you can tell exactly where the person is all along the way. That's why it's like a game changer for the industry."
 
Having established itself in the United States and Canada, the company expects more growth.
 
"We'll grow out of commercial fleets," Chauncey said. "There's a lot of applications for what we do. It's generally gone pretty much as planned.
 
"We have very high expectations for what we can do because when we get on a fleet it's so obvious; it's a no-brainer to buy this thing. But it's not that way for the customer. We expect that we're going to grow even faster than we (have)."
 
During Vnomics' first five years, Chauncey has not often had a lot of free time. The absence of technology is important for him when he does get time off.
 
"My parents have a camp up in the Adirondacks, so we do a lot of activities up there: hiking, boating, snowmobiling, very much living out in the wilderness," he said. "It's so nice up there because you're so busy, but when you get up there there's no cellphones, there's no Internet and you can just turn it off for the time and just kind of unwind and relax."
 
Chauncey's leadership has impressed colleagues.
 
"In my opinion, the company wouldn't be anywhere near where it is without David, and going forward he's probably the most important person in the company," Kaplan said.
 
"It is very well-deserved for David to have achieved this level of success," Foster said. "He's worked very hard. He's put in those long hours, but he's put in the right hours with the right focus, and he's helped a lot of people along the way."
 
He added: "He's innovative with more than just product. He understands the product, but he's really innovative in its application, in its marketing and in how it gets delivered to the marketplace. He's an inventor all around."
 
Though only 10 percent of the company's clients are in the Rochester area, it has been important for success.
 
"What I think is unique to Rochester is there's a lot of really good talent here and everybody is sort of pulling for Rochester," Chauncey said. "I'm pretty confident that if you pick up the phone and you call somebody and say, 'Hey, look, I'm looking for some advice. Can I buy you a cup of coffee?' They'll do it. They want to see Rochester succeed. People just willing to help each other out makes a really big difference."
 
Chauncey is motivated by seeing personal ideas develop and bear fruit.
 
"Somebody paying you for something is great validation," he said. "It's like you have this idea, and you think that you're making the right choices, and not just one person will pay you for it but multiple people will pay you for it. (It's knowing that) you picked the right one and that people agree."

David Chauncey
Position: President, Vnomics Corp.
Age: 50
Education: BSEE, Rochester Institute of Technology, 1986; MBA, Simon School of Business, University of Rochester, 2009
Family: Wife Susan; daughter Emily, 23; son Matthew, 20
Home: Fairport
Hobbies: Boating, hiking, skiing, snowmobiling
Quote: "Somebody paying you for something is great validation. It's like you have this idea, and you think that you're making the right choices, and not just one person will pay you for it but multiple people will pay you for it. (It's knowing that) you picked the right one and that people agree."

11/29/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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