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The simple cat graphic on Daft Labs' website gives it an air of mystery. To the uninitiated, the page offers no hint of what the Burlington company does. But Vermont is nonetheless discovering this fast-growing tech startup that is writing complex code for a range of local companies, from Green Mountain Power to Localvore Today, the Vermont-centric e-commerce platform that offers daily deals at local businesses.
Located above a women's clothing boutique on College Street, Daft Labs looks like a typical tech startup: A group of men in traditional hoodie-jeans-sneakers attire sat silently typing purple and green characters on large black screens. Among them were Daft's two young Vermont founders: James Thompson, 31, and Tom Woodward, 25.
A framed portrait of Iron Man hangs in the entryway — the superhero is one of their idols, according to Thompson, who goes by his internet handle, JT. (Elon Musk of Tesla Motors is another.) Cubbies hold complimentary black furry slippers.
More importantly, the kegerator in the company kitchen now serves a lot more employees than it once did. In the past year and a half, Daft Labs' staff has ballooned from two to nearly 20, including contractors. Although most of the company's clients are based in Boston, New York or San Francisco, local businesses are starting to seek it out.
Daft Labs connected with Green Mountain Power after a software architect at the utility company had lunch with JT and then mentioned him to software development manager Todd LaMothe. "I was like, 'What the heck is Daft Labs?'" LaMothe recalled. Now the company is building a website for GMP, as well as an app that will help dispatchers communicate with field crews.
"We're pretty picky about who we work with," LaMothe said. In Vermont, he noted, "The dearth of software development and software consulting shops is striking."
Richard Morin agreed. The Burlington-based founder of divvi, an app that allows people to make product recommendations, predicted, "JT and his crew are going to be very significant players in moving the state forward." Morin acknowledged that there's been a "Vermont diaspora of tech people," but suggested that some of those who've left the state may be encouraged when they see that JT and Woodward "could come back and could make it work."
Thompson and Woodward met in Burlington at a social networking startup called Kohort. When it moved to Brooklyn, so did they. After the company got "pulverized" by Facebook, as JT put it, the duo started Daft. Their return to Burlington, two years ago, stemmed from a personal decision: JT's wife wanted to move back to Vermont. So he and Woodward, who grew up in South Burlington, complied.
The return to a smaller market, with less capital and programming talent, fits the company's contrarian philosophy. "Tom and I tend to look at the things that piss us off about either startups or big companies and do the opposite," JT said.
"The idea behind Daft Labs," he explained, "is to help startups not make mistakes early on, especially when it comes to technology." Daft Labs builds software — apps, websites and application program interfaces (APIs), which JT described as the "underlying data layers." It also consults with companies on how to market and monetize their products.
The company offers the types of perks for which competitive tech enterprises are renowned. Employees get great health care and free house cleaning. Once a week, the conference room becomes a massage parlor where they receive professional full-body rubdowns. Daft Labs keeps an apartment in New York City, where staff can stay whenever they want.
But after 120-hour weeks at Kohort, Thompson and Woodward developed different expectations for production.
At Daft Labs, they encourage employees to work 32 hours a week. On Wednesdays, the entire staff leaves at 11 a.m. to get burgers and beers at The Scuffer Steak & Ale House. They spend the next several hours playing video games — what JT calls "team building."
Which isn't to say that games are limited to Wednesdays. Last Tuesday, a programmer named Sam broke the silence to ask Woodward a question: "Tom, in the last two hours I delivered 10 points. Can I play StarCraft now?" Woodward stopped working to play against his employee.
Described by several people as a "genius" programmer who is "elusive," the quiet partner lets Thompson handle external communications. Woodward acknowledged a reporter in the office with a quick wave, but his eyes never left his screen.
The "points" Sam referenced are how Daft Labs charges clients. Rather than bill by the hour, the company assigns software projects a number of points based on the complexity of the task. It also breaks down each project into smaller components rolled out incrementally — that is, Daft Labs programmers develop and test features one at a time, rather than unveiling the finished product all at once. As an example of the latter strategy, JT cited the disastrous rollout of Vermont Health Connect. He noted that Daft Labs doesn't charge for fixing bugs, regardless of when clients discover them, keeping its client relationships open-ended.
JT explained that software engineers are expected to complete at least 25 points a month; if they exceed 32, each additional point earns them $100. Woodward, who regularly logs 60 per month, is an anomaly.
How does a company that employs a bunch of guys who wear furry slippers and play video games mid-workday land customers like Green Mountain Power?
"It's mostly me," said JT, grinning. But, he adds, "I put, like, zero effort into getting customers." He admitted that many of his programmers are better coders than he is; his strength is as a salesman.
Though he sometimes sounds like one, JT isn't a stereotypical Silicon Valley tech bro. A self-described "geeky goth kid," he spent his teenage years in the Northeast Kingdom. "It was rough, man," he recalled. His father was a logger in those days; now he's deputy commissioner at the Vermont Department of Information and Innovation.
JT ran several informal businesses — some legal, others less so — while attending high school in Hardwick, then college. A T-shirt-selling operation took off when he started printing images of the iconic mid-performance kiss between Madonna and Britney Spears at the 2003 MTV Video Music Awards. He bought items on eBay in Canada and resold them on eBay in the United States, profiting from the difference in exchange rates.
JT majored in business at Johnson State College, but neither of the two programming courses he took there challenged him, he recalled, so he did an independent study. After graduating, he went from working the night shift at a gas station to working on the assembly line at Manufacturing Solutions, a Morrisville company that produces and distributes machines for the rowing company Concept2. JT, who claims to have started programming at age 4, quickly made himself useful, inventing a software program to coordinate workers' schedules and keep track of inventory.
Daft Labs is Thompson's sixth company — before that, he started a climbing magazine, a real estate company and several other technology ventures. In 2008, then-governor Jim Douglas gave him an entrepreneur award for founding an IT company called Acute Technology, which provided tech support to companies including PetSmart and Turtle Fur. JT later shut down the company to work for Kohort.
There he met Woodward, who had taken programming courses at South Burlington High School — an early opportunity he described in an email as "rare and pretty awesome." Along with friends, the young Woodward built an instant messaging system program and a whole lot of games. He attended Vermont Technical College in Randolph but left before graduation to take the Kohort job.
Clients testify to Daft Labs' programming acumen. "Their whole team is really smart and really collaborative," said Michael Nedell, cofounder and president of Localvore Today, located just a few blocks away. Daft Labs built the API that powers its new website and app.
"It's really great to be able to walk to their office and draw on their whiteboard," added Meg Randall, Localvore Today's cofounder and director of operations.
And Daft is helping fill a gap. While entrepreneurs and investors say Burlington's tech scene is maturing, the city still has only a few companies capable of doing the serious kind of coding that many startups rely on.
Adam Bouchard started Agilion, one of the better-known shops, in 2010. "I'm actually kind of surprised there aren't more companies doing what we do," he said. Daft Labs could be viewed as a competitor, but Bouchard said he welcomes the company's arrival as a sign that the tech scene is expanding. When it comes to business, he said, "there's plenty to go around."
Divvi has certainly benefited from Daft's return. The company helped build divvi's back end and leases a portion of its office space to the startup. Twice Daft has taken equity from divvi in lieu of rent. That tactic presents a different kind of opportunity for Daft, positioning it to benefit when its clients succeed.
While JT may take a laissez-faire approach to publicity, there is one group he's always reaching out to: high-level engineers. Finding them has been one of the challenges of returning to Vermont, he said: "We tried to hire six people this summer and ended up with three." Recruiting female engineers has been even harder; currently, the staff is all male. Daft has had the most success convincing Champlain College graduates to stick around, JT said.
The company's oblique website is designed to entice engineers — that cat is the logo for GitHub, a "social network for geeks," as JT put it. Clicking on it leads people to a showcase of code written by Daft Labs programmers.
As he left the office for a meeting last week, JT, who is significantly more gregarious than Daft's other staffers, told a reporter, "I'll be impressed if they say a single word to you."
Not one of them did.
James Thompson speaks about his career path at a panel discussion called "Oh, the Places You'll Go!" at the Vermont Tech Jam, Friday, October 23, at 10:30 and 11:30 a.m. techjamvt.com.
The original print version of this article was headlined "Up to Code"