James Walker, then an independent consultant to pharmaceutical companies, and Kirk Gallion, a consultant employed by Accenture, were redoing an electronic application to the FDA for a new drug from a pharmaceutical company. After spending half the night on it, they came up with an idea to use technology to help speed up the approval process for new drugs. The FDA was pressuring companies to send applications electronically, and the life-sciences field was booming, so they figured they were on to something. The two also enlisted the help of Mr. Walker's brother, who was a dermatologist.

The company got its first client one month after starting. After that other deals followed. They found that the product filled a niche with no competition. By handling applications electronically, the completion time can be cut in half.

The owners of the business had an edge because they understood not just technology, but also what the FDA looks for.

Octagon now has 70 employees and projects revenue this year of more than $5 million.