Entrepreneurs and Innovators
Mike Neal ’83, Economics
CEO and co-founder of DecisionNext, a San Francisco–based company that builds prescriptive analytics solutions for commodities-driven industries, discusses building a business.
You have a wide range of clients from agribusiness to mining. How does your analytics platform serve all of them?
Our software tools are being used in some of the largest food processors, mining companies, and chemical companies in the world right now to help them simulate what commodity markets are going to do in the future, specifically around supply and price. We then use these simulations to help them optimize important decisions they make, such as the price they charge or how much of future capacity they sell today. We have consistently found that when decisions involve a rigorous market-price forecast, significant margin dollars can be found.
You majored in economics with a concentration in statistics at UF. How did your education help you?
I learned a lot in my statistics classes about approaching quantitative questions from first principles and about being fundamentally skeptical about conclusions drawn from quantitative analyses. Professor Jim McClave had a big impact on me, both in the introductory statistics class he taught and in working for his company, InfoTech, during my summers. He taught me the real-world practical value of rigorous analysis, which has been a thread running through my whole career. It’s very cool that back in the early 1980s, InfoTech was breaking new ground by driving huge bid-rigging court decisions with their analytics, and then over the last 35 years, industry after industry has gotten this religion. It was airlines in the mid-80s, then hotels, rental cars, and then in the ’90s, financial services, consumer goods, and supply chains. In the early 2000s, it was retail — we played a role in that. Now it’s commodities, and we’re working hard to raise the game there.
What advice do you have for young entrepreneurs?
The one piece of advice I think is most important for first-time entrepreneurs is to make sure that they’re starting a business for the right reasons. They need to be passionate and driven to develop their idea, or the likelihood of success approaches zero. Building a new company is hard — really hard — and it takes obsessive dedication to get you through the really bad days, or really bad months, to make the company a success.
Many of our innovative alumni have used their degrees from the College of Liberal Arts and Sciences as a launching pad for beginning their own business. In each issue, we will focus on self-starting alumni. Our first two issues feature Gators from Gainesville. If you have suggestions for future inclusions, email us.