On the last Friday in January, Los Angeles Mayor Eric Garcetti gathered in front of a group of reporters and government officials to unveil his city’s latest tech initiative: GeoHub, a digital mapping portal aimed at reinventing how LA delivers services. Maps, of course, are vital tools of municipal business everywhere, be it in planning, transportation, public safety, public works, economic development and more. But for the first time a major city had built a real-time digital dashboard that would allow anyone—city workers, the public, NGOs, startups, the media—to access and mash up those maps. Garcetti described how after an earthquake a firefighter equipped with an iPad might immediately be able to find fire hydrants, sewer lines, electrical equipment, building infrastructure and the location of other emergency responders. Similarly, an NGO providing homeless services might see how encampment locations are affected by police activity or liquor store openings. GeoHub, Garcetti said, would help to “improve the quality of life” in Los Angeles. He then moved aside to make way for the man who built GeoHub: Jack Dangermond, a lanky white-haired 70-year-old billionaire who is the unlikeliest of tech moguls.
These days Google Maps has become part of modern life, getting you from here to there efficiently, pinpointing the location of your Uber. But long before Google was born—even before its founders were born—it was Dangermond who essentially invented the digital map. Esri, the company he founded with his wife, Laura, in 1969, has toiled in relative obscurity to become one of the more improbable powerhouses in tech, having survived wrenching shifts in computing that destroyed scores of its fellow tech pioneers. Dangermond deftly adapted Esri software over the years, from minicomputers to workstations and then to PCs, the internet, the cloud and mobile devices. Esri, which is still privately held by the Dangermonds, had $1.1 billion in sales in 2014, and Forbes estimates its value at $3 billion. “He kind of created the industry,” says John Hanke, who for six years led Google’s mapping efforts. Products like Google Earth, Google Maps and Google Street View, Hanke says, “were built on the shoulders of what he created.”
Hanke would know. As he cemented Google dominance in maps, he helped to create what many thought was the biggest existential threat Esri ever faced. But as Google aimed its maps mostly at consumers, Esri was able to hold on to its revenue base among power users in business, government and other organisations. Google is great for directions or locating your home on Zillow. But if you are, say, the Bavarian police charged with securing the G7 Summit near Munich and need a detailed real-time dashboard that can pinpoint every delegation, police officer, emergency vehicle, first responder, protest site, road closure, mountain trail and access point to the summit’s venue, you’ll use Esri. Last year Google pulled the plug on a half-hearted push into enterprise maps and began moving its customers to Esri.
Esri owns more than half of the market for so-called GIS (short for “geographic information systems”) software, and its technology is used around the world by some 350,000 businesses, government agencies and NGOs, which collectively create 150 million new maps every day. Customers include the White House, FEMA and the US Geological Survey; virtually every city and county in the US and scores of them overseas; oil and gas firms; retailers and utilities; and environmental groups. UPS used Esri’s maps as part of an initiative to make its routing more efficient, which is helping to save more than $300 million annually. Walgreens is using Esri technology to choose locations for new stores, track the flu and decide where its beauty products should expand next. And NGOs, including the Bill and Melinda Gates Foundation, have used Esri to help lead campaigns against malaria and ebola in Africa. “One of the areas of technology that has gone further than I ever expected is mapping,” Microsoft co-founder Bill Gates told Forbes in an email. “And we have Jack Dangermond to thank, in large part, for his pioneering efforts of almost 50 years.” Gates added: “He’s one of a kind.”
In many ways Esri is the original tech “unicorn”, but its ascent to the billion-dollar club is virtually unrecognisable by today’s norms. Dangermond never took outside financing, and other than a $5,000 loan from his mother in the early days, Esri never borrowed money. It has been profitable since day one. “Venture capital can be attractive, but it comes at an enormous cost,” Dangermond says during an interview in his office. “You have to buy into someone else’s vision.” Over the years Dangermond has rebuffed acquisition offers and believes the choice to remain private has paid off handsomely and allowed him to avoid the short-term pressures of the stock market. While the company has let go of employees, it never had cost-cutting layoffs.
Dangermond was raised in Redlands, California, a town of roughly 25,000 at the time, about 60 miles east of Los Angeles. His father was a gardener who had emigrated from Holland, and his mother was a maid. They started a plant nursery, partly to earn enough to send their five kids to college. Dangermond met his future wife, Laura, in high school, and the two went together to Cal Poly, where Dangermond studied environmental science and landscape architecture. After they married, Dangermond went to the University of Minnesota to study urban design and in 1968 to Harvard, in part for the opportunity to work in a lab that combined computer graphics and spatial analysis and whose members had developed some of the first mapping software. “I had some notion of applying computer mapping to my profession,” he says, “but frankly I was just very excited by the technology and curious how it could be made useful.”
The Dangermonds moved back to Redlands and started what was then called the Environmental Systems Research Institute. It began as a consulting firm inspired by the Harvard lab, and comprised the Dangermonds, a part-time programmer, a data specialist and a secretary. As the sizes of his contracts grew, Dangermond started building generic tools with capabilities to allow his clients to do their own mapping and analytics. Esri shipped its first product in 1982. “Our whole business changed,” Dangermond says. That product, ArcGIS, is still Esri’s flagship.
Today 2,300 of its 3,500 employees work at the Redlands campus, much of it landscaped by the Dangermonds. With no other significant tech company in the area, its culture is definitely quirky. Employees are paid hourly, which Dangermond says most employees like, as it gives them flexibility. Some employees, who spoke on condition of anonymity, bristled at that notion. Many employees have been there for decades, but some say workers who don’t fit in get spit out quickly. There are few of the perks of Silicon Valley: Even Dangermond pays for his own meals at the cafeteria.
The best place to understand Esri’s global impact is not in Redlands but in San Diego, where it holds its customer conference every summer. Last year’s gathering was in July, and as Dangermond took the stage at a packed San Diego Convention Center, it was clear this was his event: He was keynote speaker, host and emcee. The audience of 16,000—roughly triple the crowd that assembles for Apple’s World Wide Developer Conference or Google’s I/O event—hailed from Sweden, South Korea, Idaho, Indiana, Botswana and Brazil, all of them there to hear a man they uniformly consider a legend. Dangermond invited guests onstage to evangelise about the power of Esri’s software to fight disease, streamline decision making and respond to natural disasters. The year’s theme was “applying geography everywhere”, and time and again Dangermond told his rapt audience some version of “We are entering a period of geographic enlightenment.”
Heady stuff, to be sure, but its meaning is more prosaic. Maps, once the domain of specialists, are being democratised in the cloud-connected era, and Esri’s software is starting to spread far more widely inside organisations. Walgreens has been using Esri since 2000 to decide where to open new stores but in the past few years has released its custom-built WalMap to employees so they can check on store-by-store sales, market share and competitor locations. Walgreens increased the number of internal users of its mapping apps tenfold in the past few years, says Jillian Elder, director of enterprise location intelligence. At Stanford University, researchers in virtually every field are increasingly using Esri tools to, for example, predict the impact of global warming on butterflies in Madagascar or study the incidence of certain cancers near Superfund sites. “There’s been an explosion of people who think of their research in geospatial terms,” says Julie Sweetkind-Singer, Stanford’s assistant director of Geospatial, Cartographic and Scientific Data & Services. Examples like that have Dangermond bullish that a lot more people are seeing things his way. He describes the opportunity succinctly: “Over the next five to 10 years we can grow this an order of magnitude.”
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(This story appears in the 15 April, 2016 issue of Forbes India. To visit our Archives, click here.)