This story was written for WRAL TechWire Innovator partner Device Magic.

Business partners Dusan Babich and Mike Welham first crossed paths in high school in their hometown of Johannesburg, South Africa. Fast forward years later and they’ve made a new home for themselves and their company, Device Magic, a mobile forms solutions business, in the Triangle.

Raleigh is a long ways away from Johannesburg — more than 8,000 miles in fact — but just like every journey, Babich and Welham’s story begins with a first step.

“We had been at high school together, but separated by a couple of years,” Babich explained. “We both studied engineering.”

That first step was noticing their common interests, and Babich and Welham began working on their first startup together in 2005 after months of exchanging correspondences via email.

“During that time, Dusan and I connected, and we started working on our first startup, Red Five Labs. The market for smartphones changed unexpectedly and abruptly [left] the company with no practical options to pivot. We learned a lot from the experience,” Welham recounted.

It’s well known that 90 percent of startups fail, and both Babich and Welham are grateful they decided to run with their idea for Device Magic instead of pursuing ones they had for Google Glass (which was unable to take off) or Blackberry (nearly extinct).

After noticing a pattern of data collection for businesses and the requirement for field personnel to submit data and synchronize it to a server, both men realized the potential to help businesses automate and digitize traditional paper processes — which is precisely what Device Magic does.

It may seem serendipitous that the initials of Babich and Welham’s first names coincide with Device Magic, but that’s purely what it is — coincidence. It’s the name they came up with, and the domain was available; a practical plan for two practical, but very proactive business partners.

Babich and Welham officially launched Device Magic in late 2011, ultimately knowing that the market in the United States was better suited for their product.

“It’s very difficult, I think, to build a software business outside of the U.S. or to at least build it in South Africa,” Welham said. “We thought that there was a big market for the product we were building in the U.S. and that it would be a great place to find the right talent to scale an organization.”

As Babich put it, “Building a startup is hard. Building a startup in South Africa is extra hard.”

They applied for several incubator programs and chose Dallas as an incubator site in 2011 based on its emerging startup culture and large number of corporate headquarters there. They agreed Dallas was a great place to get their feet wet with Device Magic in the U.S., but ultimately decided to move to the Triangle and set up headquarters.

“We definitely considered, briefly, the traditional [tech] cities like the Bay Area [and] New York,” Babich explained. “I think what happened was, after that incubation program, we attended a small business web summit. I met a couple of entrepreneurs there that were from Raleigh. A company there said that I should come and check [Raleigh] out.”

Babich and Welham both preferred an east coast location since the time zone difference with South Africa isn’t as drastic. They also wanted to grow their business organically, rather than rely on venture capitalist money. Knowing other tech companies had done this successfully, paired with the lower cost of living in the Triangle compared to larger cities, sealed the deal for them.

“We opened up our first U.S. office in 2014, and then Mike and I relocated in 2015,” Babich said.

Device Magic started out at the American Underground in Durham before moving to the Raleigh American Underground campus and then to other locations in downtown Raleigh. As of January, it’s now officially headquartered in a brand new space of the 227 Fayetteville building.

“We wanted to keep our downtown headquarters. It’s a very fun place to be, and I think people enjoy being in an urban environment. It was a lot of fun getting the right space that would meet our growth requirements,” Welham explained. “We were just running out of space where we were. And it was starting to become a frustrating factor on our ability to hire.”

While Babich and Welham’s journey seems like relatively smooth sailing, every startup has its challenges, and the business partners have faced them head-on.

It’s also important to note both men are focused on the future of Device Magic and don’t spend too much time dwelling on the past. Device Magic wasn’t their first idea or even their second, and they attribute much of their growth and success thus far to putting their people and the customer first.

“This business has always been about seeing what was resonating with customers,” Babich said.

Added Welham, “The path we’ve taken has almost always been driven by what our customers tell us they need. Listening to what people want and the problems they struggle to solve pretty much informs the road map and how we move.”

With a brand new space and room to grow, Babich and Welham are leading Device Magic to its next phase, together.

This story was written for WRAL TechWire Innovator partner Device Magic.





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