CEO of software company Minnesota uses background information for her ‘AgVantage’ – InForum

ROCHESTER, Minn. – Michelle Blomberg never intended to become CEO of a computer software company, but that’s where she ended up 24 years ago, responsible for ushering a company into the 21st century.

Blomberg, CEO of Rochester-based AgVantage Software Inc., now oversees a much larger company with customers across the country and a product line that covers every inch of the agricultural supply chain.

There is AgVantage software for grain, feed, agronomy and seeds, accounting, retail, energy, eBusiness, CRM business intelligence and more. In recent years, the company has adopted a process called customer-driven development, in which AgVantage develops new software based on customer requests and feedback.

Michelle was one of ten children growing up in the small farming community of Albert City, Iowa. Her father, Rich, worked as an accountant for a pork refinery in town, until one day at work an IBM representative came by to recruit someone who worked in the agricultural industry and had a love for math.

“IBM sent him to Chicago for three weeks, where he took some computer programming classes, and then he came home for a week, and then they sent him to Minneapolis for three weeks, and once he completed those six weeks, he was a computer programmer for IBM,” Blomberg said of her father.

After spending time writing computer software at the local co-op in the late 1970s, Rich Blomberg and his wife Betty started their own computer software company for agricultural businesses, called Be-Rich.

Michelle listened to her father when he suggested she major in computer science at Wayne State, where she would major in math and receive scholarships to play basketball and softball.

Her first job out of college was as a computer programmer in the Twin Cities, which made her realize she would rather teach math. So she did, until her parents started talking about retirement and their interest in taking over the family business. She went for it and moved back to her hometown to learn directly from them, eventually buying them out.

“They had about 15 co-ops that ran my father’s system that he wrote, and my mother was his bookkeeper,” Blomberg said of Be-Rich. “They had two programmers.”

It was 1999 and the company was hers, but the fear of the coming millennium was in full effect, and according to her father, for good reason.

In the 80s and 90s he wrote the greatest computer programs using a two-digit code for that year. However, there was a solution: pay about $500,000 to have the entire system rebuilt. Blomberg said she had about $60,000 to her name at the time.

“It has to be four figures, otherwise things will go wrong,” Blomberg said of her father’s words.

A similarly sized family-owned computer software company – Udenberg & Associates – had been operating in the city of Rochester since 1976, where IBM’s manufacturing, engineering, and education facilities occupied a 397-acre site on the outskirts of the city.

The company, which would eventually partner with IBM to offer software and hardware, was founded by Don Udenberg, who wrote a software system to make business more efficient at grain elevators and other agricultural operations. Udenberg also noted increasing consolidation in the agriculture industry in the 1990s, and the firm focused on handling complex mergers between multiple companies.

When Udenberg contacted Blomberg to discuss a merger, it felt good for both parties and she got her parents’ blessing.

“It was basically the same story as my mom and dad’s company, just a little bigger,” Blomberg said of Udenberg’s company, which at the time had about 30 cooperatives using their systems.

Udenberg died in 2000 and Blomberg became CEO of the new AgVantage, which had about forty customers who would soon become part of a major pivot.

“We changed everything then. Even though the company was about 25 years old at the time, we still had to start over a bit and reinvent everything,” Blomberg said of the early 2000s. “We had a lot of things that we had to get out of the old ways and adopt new technologies, and grow the employees, and grow the customer base, and just really everything we needed to get a fresh start and move forward.”

The cost-saving process now known as cloud technology was introduced in the early 2000s by AgVantage, which allowed companies to host on the IBM backend instead of companies having to do the purchasing and maintenance themselves.

“They might have to invest $50,000 in a machine that would only be there for three years,” she said. “So we worked with IBM and created a space that could be protected for them, with security.”

Today, Blomberg says the company’s hosting business has gone “gangbusters” and nearly 80% of their customers are running on the machine hosted by AgVantage. She said that unlike most major cloud services or shared cloud spaces, they offer an actual marketable space where customers get peace of mind.

Noah Fish / Agweek

“Our customers really like that. They can know where their data is, then come in here and touch the machine,” she said.

At 48 years old, the company has grown to 53 employees and has tens of thousands of users who rely on AgVantage software every day. The company remains a benchmark for handling mergers in the agricultural sector, including with Ohio-based Sunrise Cooperative, which has undergone three mergers in the past decade.

George Secor, president and CEO of Sunrise Cooperative, says the company uses AgVantage Software for all of its services, not just for onboarding new employees and systems.

“It’s the real backbone of our business when it comes to software. If software can’t communicate with AgVantage, we won’t use it,” Secor said.

As a computer software company that specializes in handling complex mergers, Blomberg said the company will never change hands while she remains at the helm. It will be a private, employee-owned company “forever,” she said, so customers can trust that owners and employees are one and the same.

There are share restrictions to maintain 100% employee ownership, and when an employee leaves the company or retires, he/she is required to sell the shares to current employees or return them to the company.

Blomberg said there used to be several employee-owned computer software companies, but in recent years they have been singled out by financial institutions.

“This happens to me about 10 times a month,” she said of offers from investment firms. “‘We found your company. We looked at you. We are interested in purchasing you.’ And I just say we’re not for sale. And people always challenge me. They say, ‘Everyone has a price tag.’ I don’t actually have a price tag.”

When asked what the company is worth today, Blomberg steers the question in a different direction.

Noah Fish / Agweek

“The last five years have simply been very good for the company. We have weathered the COVID-19 crisis very well, our customers and our employees have been extremely satisfied. We literally have no revenue,” she said. “We have such a strong employee base, and that’s what drives us financially to do well, make money, acquire new customers, win mergers like we’re winning most of the time.”

Both of Blomberg’s parents are deceased, but before her father died, she often visited him and his friends in Arizona.

“That’s the other reason why I always say we’re not for sale, at least when I’m sitting in this chair, because when my mother was already dead and my father was still alive, I used to go there every year for a week and just go hanging out with him and his buddies in Arizona,” Blomberg said. “These old guys were having coffee and said, Michelle, don’t ever sell your company. They said that every time a company sells, everything changes. I’ve taken that so much to heart that I can’t let it go.”