A Switch That Works

By: Mark Harbeke
Submitted: 2007-01-17 11:49:58
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As the saying goes, if at first you don’t succeed, try, try again. In the case of serial entrepreneur Alex Zoghlin, it seems that each venture gets a little better. His fifth and latest technology venture, Chicago-based G2 SwitchWorks, specializes in low-cost distribution services for the travel industry. The software G2 produces is a boon to travel suppliers and sellers, enabling a savings of up to $11 per ticket in customer servicing and support costs.

“We wanted to make better ticket-processing systems for airlines,” says Ellen Lee, G2’s vice president of business development and a founding member of the company along with Zoghlin. Both Zoghlin and Lee came to G2 from leading online travel portal Orbitz in April 2004. While at Orbitz, Zoghlin, then the company’s chief technology officer, defined himself as an unabashed leader in the eyes of his fellow employees when it came time to divvy up offices in an expansion space Orbitz had purchased. Contrary to other Orbitz executives, Zoghlin opted not for a cushy office, but for a cubicle that was closer to his team.

He’s carried the same notion of togetherness to G2, which is located on the 39th floor of the Sears Tower. “The first thing we did when we moved into our office space here was to knock down the top level of all the cubicles, which makes for a constant dialogue,” says Larry Freedman, G2’s general counsel. “There are no secrets or closed doors here.” As a result, G2 employees have formed a special, Three Musketeers-like bond in their quest to produce the best product, despite the occasional confines of the industry. Lee even goes so far as to call the company “scrappy.”

The word could also be used to describe Zoghlin, a high school dropout who founded his first company, a computer software business, in 1988. That company started off well enough, but soon ran into legal problems after a system he designed for one law firm became a point of contention when he attempted to sell it to a second law firm. “As an 18-year-old dropout who was up to his gills in loans,” Zoghlin told Business Week recently, “there wasn’t a lot of recourse for me.”

After spending four years of active duty in the U.S. Navy, where he was an encryption specialist, he enrolled at the University of Illinois at Urbana-Champaign and was part of the team at the National Center for Supercomputing Applications (NCSA) that developed the first Internet web server. Around this time Zoghlin received an offer from Marc Andreessen, who was then at the NCSA working on the first Internet web browser, Mosaic, to join him at an upstart venture called Netscape, but passed. (Zoghlin jokingly told Crain’s Chicago Business, “Don’t come to me for career advice,” when asked about this decision in hindsight.)

The dropout-turned-in-demand computer consultant founded two other companies, Sportsgear and Neoglyphics Media Corp., before being hired by Orbitz as its CTO. Although Orbitz was founded by major carriers United, American, Continental, Delta, and Northwest, Zoghlin’s team was charged with developing an all-new technology strategy that would save money and increase customer choice. The problem, Zoghlin noted in 2002, was that established travel technology systems were based on mainframe technology. The solution he found was to build a cheaper system using Linux-based servers.

That technological leap forms the basis of what G2 SwitchWorks does today. The company’s work in developing highly automated, customer-centric travel reservation and management solutions allows travel suppliers and sellers to more efficiently reach and serve their customers. The company claims its technologies save travel suppliers up to 81 percent versus current third-party distribution channels.

G2 seems to have found a rare, profitable niche in an otherwise lackluster industry. Lee credits Zoghlin and his foresight to see a need and fill it using his pioneering tech skills. “He has a gift for spotting opportunities in the marketplace,” she says. “He’s really a role model for personal leadership because nothing freaks him out. The travel industry is a crazy business and he’s able to roll with the changes.”

Yet, as cutting edge as G2 is in its software technology and even its people practices, its greatest hindrance may be the very entities that made Orbitz possible – namely, the airlines. “They have many departments and stakeholders, and each airline is set up differently, so a lot of [our work involves] drilling until you get to the right person, or pushing that person to get a decision made,” Lee says.

That’s where being small and close knit comes in handy, notes Lee. “We’ve held tight to the number of employees, at about 60,” she says. “This gives us a nimbleness, flexibility and functionality that doesn’t always exist at larger companies.” Freedman agrees. “G2 is a looser, less bureaucratic environment than other companies,” he says, “and this breeds a greater sense of team. And Alex needs his team to meet the fast-paced deadlines of our industry.”

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