Creative Destruction

Roger Hutchison is exactly the kind of entrepreneur Fort Myers is hoping to attract — and the city didn't have to offer him any incentives to move here.

Hutchison recently acquired an 18,000-square-foot building on the banks of the Caloosahatchee River for $1 million, a fraction of the $3.5 million the owner was asking for five years ago.

Although owners of commercial real estate might bemoan the crash in prices, it spells opportunity for entrepreneurs such as Hutchison. He's turning what used to be a crab-processing warehouse into high-tech offices for two companies he owns: D3 Services and eTriage.

CD Rom Inc., another company Hutchison formed in 1988 in Iron River, Wisc., invented technology for the government to permanently destroy digital records on CD-ROMs and DVD disks. “Everybody thought it was like collecting garbage,” Hutchison recalls when he first started that company. “We thought it was a great opportunity.”

For competitive and security reasons, Hutchison won't reveal many financial and customer details of CD Rom Inc., though he says his company processes “truckloads” of disks in the 30,000-square-foot Wisconsin facility. That's not surprising considering manufacturers produced billions of CD-ROMs and DVD disks last year.

In 2004, Hutchison formed D3 Services to help companies destroy sensitive data from CD-ROMs, DVD disks and computer hard drives. A sister company, eTriage, helps companies retrieve data from these electronic storage devices. “We took products we invented for the government and we're using it for commercial purposes,” says Hutchison, who has a Ph.D. in engineering.

Hutchison picked Fort Myers because of the affordability of real estate and central location between the markets of Tampa, Orlando and Miami. What's more, Hutchison, 50, has always liked the area because he vacationed here.

The Fort Myers waterfront building used to house Jack's Place, a popular bar long ago, and is zoned for a 14-story condo tower. As offices, it provides a creative environment for employees Hutchison plans to hire. “I have found a significant talent base in this region,” he says.

Hutchison says D3 and eTriage already generate $1 million in revenues, and he expects the Fort Myers facility to boost the bottom line. “We think it's going to be very profitable,” he says.

If Fort Myers is as successful as he believes, Hutchison says he may open other offices elsewhere, perhaps with the help of outside investors. “We're self-funded and have no debt,” Hutchison says. He quips: “That's why I still own the companies.”

But Hutchison is contemplating a franchise model that would provide data-destruction services in 20 to 30 of the country's largest cities, much like the paper-shredding franchisors now in the market. With many companies moving to electronic records, this idea could potentially be greater than the paper-shredding business, he notes.

Hutchison cites two advantages over his competitors: CD Rom holds patents on the data-destruction technology and holds the highest government security clearances. “The barriers to entry are fairly high,” he says. “It takes expertise.”