After his father was murdered in 1981, computer database expert David Wheeler developed a program that could pinpoint perpetrators with startling accuracy by sifting through crime reports, tips and other investigative data. The first time he tried it, the program linked several seemingly unrelated crimes and fingered a suspect. "I've got something here," he thought.
In 1991, Wheeler, 39, founded InfoGlide, Inc. of Austin, Texas, to sell the software program to law-enforcement agencies. Local and national police departments utilized it to investigate everything from serial rapists to international terrorists. But other, cash-strapped public agencies lacked the financial means to support Wheeler's start-up. Says InfoGlide CEO Jay Valentine, 50, "If the client loves the product but can't afford to buy it, there's no market."
In 1996, InfoGlide discovered a new market. Fraud rings were costing the insurance industry hundreds of millions of dollars in spurious claims each year. Insurance investigators' efforts were stymied by the same problems police faced. There were huge files of accident reports, names, addresses, driver's license numbers and the like, many intentionally garbled by criminals to avoid detection. The first time Wheeler ran a file of insurance claims through his program, "it lit up like a Christmas tree," he says.
InfoGlide immediately re-targeted its efforts toward insurance firms. Soon, orders were practically pouring in. In 1998, Wheeler raised $5 million in venture capital. Today, his company has 38 employees and is worth $100 million.
InfoGlide's experience is a prime example of shapeshifting. Also called transmigration, it's the practice of morphing a company so it can enter a peripheral or related industry. "We're seeing an enormous amount of transmigration going on right now," says Barry Sheehy, president of management consulting firm CPC Econometrics Inc. in Savannah, Georgia. Examples include Greyhound Corp.'s change from a bus company into consumer-products maker Dial Corp. and Westinghouse's transmigration from industrial manufacturer into broadcaster CBS Corp.
Transmigration is also occurring in such industries as financial services and health care. The reason, Sheehy says, is that transmigration is a key to long-term success in a changing environment. "If a company lasts more than a generation," he says, "they've transmigrated once if not more."
Mark Henricks is an Austin, Texas, writer who specializes in business topics and has written for Entrepreneur for 10 years.