Eddie Habibi | Crain's Houston

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Eddie Habibi

Background:  

Eddie Habibi is the founder and CEO of PAS Global, a Houston-area provider of software solutions for safety, cybersecurity and asset reliability to the energy, process and power industries. PAS claims its software is installed in more than 1,380 industrial sites in 70 countries. Its 520-plus customers include chemical companies such as BASF, Dow and DuPont, refiners like LyondellBasell and power generators such as Exelon, Dominion and Duke. Last year CRN magazine cited PAS as one of the 15 “coolest” industrial "internet of things" companies. It also named Habibi — who started the company out of his 1,375 square-foot home in 1993 — as one of the 30 executives to know in the field.

The Mistake:

Losing sight of our core competencies. It was circa 2003 and we became enamored of a sexy technology adjacent to the ones we were providing and we ended up acquiring the company. It was dedicated to profitability improvement, or advanced process control and optimization. It was like industrial "internet of things" on steroids. It was way ahead of its time.

The technology would take in sensor data throughout a processing plant and simulate a series of cases to move pumps and compressors to maximize throughput and provide the best quality gasoline and jet fuel. It contributed billions of dollars to profit improvement to oil and gas and process industry.

We bought the technology because we thought it would help prevent accidents from happening. But it was too complex to do that. It also would require chemical engineers to install and maintain it. It wasn’t a good fit for the rest of our technology. About two and a half years after we acquired it (and considerable self-reflection), we sold it to Honeywell at a loss.

It was a multimillion-dollar lesson learned, but it brought laser focus to the company.

The Lesson:

You have to stay focused and stick to what you know. It was a multimillion-dollar lesson learned, but it brought laser focus to the company. We realized we were the product leader in our area and we had to stay the course.

We continue to grow. We are currently looking at expanding our cybersecurity solution to help our customers stay safe and looking at acquisitions particularly for management control systems.

We raised capital for the first time last year, $40 million from Tinicum, after receiving about 12 offers. The industry we serve takes their time in selecting software for operations and then run it for decades, so we didn’t want venture capital money or Silicon Valley fast money. We wanted someone who had a sense of longevity and was interested in long-term growth. They’ve been a phenomenal partner.

Photo courtesy of Eddie Habibi

Follow PAS Global on Twitter at @PASGlobal and Eddie Habibi at @EddieHabibi.

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