Russ talks with Adam Stern, CEO of Infinitely Virtual about the cloud, the next BIG thing in the cloud and Adam's take on entrepreneurship. Infinitely Virtual offers the widest array of products and services based on revolutionary hosted virtual dedicated server and cloud computing technologies.
SYNC Interview with dinCloud's Mike L. Chase
Executive Vice President & Chief Technology Officer (CTO)
As co-founder, EVP and CTO of dinCloud, Mike established one of the first Cloud Service providers to offer hosted virtual desktops, servers, storage, and other cloud services worldwide. dinCloud has been rated #1 by Network World Magazine in their desktop-as-a-service ("DaaS") shootout article of May 21, 2012, Voted VDI Solution of 2012 by the UP Cloud Computing Conference and named 1 of 10 Hot Cloud Startups 2013 by CIO Magazine, Voted Best VDI Solution (beat our VMware, Citrix, Oracle & others) at the UP Cloud Computing Conference 2012 etc. Mike gained his experience with numerous service providers, multi-national corporations, and cloud companies such as Airespring, Equant, Broadcom, Wells Fargo, Experian, tamCloud and others. He is also an advisor to www.drivenbi.com which is a pioneer in cloud based business analytics.
Russ Fordyce: Good afternoon, everyone. This is Russ Fordyce with the Business Intelligence Group. Today, I've got Mike Chase who is the CTO of dinCloud on with us today. Appreciate Mike you joining us.
Mike Chase: Thank you. Glad to be here, Russ.
Russ Fordyce: dinCloud is an interesting player in the cloud. You guys are ... You specialize in hosted desktops. Why don't you give us just the elevator pitch of kind of what dinCloud does and who you're going after in the marketplace?
Mike Chase: Sure. Absolutely. Different cloud providers had different starting points. Some started with servers, some started with cloud storage. We started off with virtual desktops then kind of grew to have all of those products. The reason why we went after the virtual desktop was that we found that the software and the hardware, the whole infrastructure that you had to build for the virtual desktop was completely different than anything that was being recommended or being used at the time to virtualize servers.
It took a lot of R&D to get where we are, I'm glad that we did that because adding the other products later was actually much easier.
Russ Fordyce: You kind of go and top down, it sounds like.
Mike Chase: Yeah.
Russ Fordyce: Did you see that those initials trends of kind of a high end enterprise market to start with and now as you get into different types of products a little bit broader based?
Mike Chase: We have and it's interesting because people have asked us all the time, what is your market and really the market is anyone in the world particularly who's using the Windows. Because at the end of the day everybody kind of had to converge on the middle on the cloud no matter where you started.
Meaning that if you were a cloud storage solution, the day came when your customer called you and said "hey, I can't restore all that. Took two or three weeks to get into the cloud. I need it restored now. I don't have that kind of bandwidth. Can you turn it into a virtual server for me and get me connected."
Customers started with servers and then realized that the desktops have always been symbiotic, you need to live next to them. Whether you're one of the competitors that started with servers, you were us that started with desktops, eventually you hosted both and eventually all three products.
Russ Fordyce: You guys have been at this for a while, what ... Desktops are almost I would think the hardest to get somebody to kind of convert over to the cloud or to virtualize in general. What are some of the barriers that you guys have overcome in the market trying to pitch that out to your customers?
Mike Chase: Well, the first barrier was something that every VDI customer could sympathize with. Doing virtual desktops was a whole different adventure than virtualizing services. It was a tremendous amount of hype around it. It took a long time. We originally tried using VMware and Citrix like so many of our customers before we built our own solution.
We sold 65 major problems to get there. Everything from storage to the amount of bandwidth, to the type of network platform that it required. We use a lot of [inaudible 00:03:02] Infiniband, there's just different components. It was 100% opposite of what we would build to do servers.
We got really lucky in that sense because after years of R&D, we've been voted number one in the space by Network World Magazine, and users at conference when they vote on what solution they like best. That infrastructure allowed us to host servers and cloud storage as well. The desktops are very unique.
It was not just having the right software, it's also having the right hardware infrastructure and then for years, Gardner was predicting and mis-predicting, this is the year of the virtual desktop. Of course, VMware and Citrix were very much hoping that that would be the next wave for them.
Say this is year, this is the year. I can officially say that 2014 is the year because we're seeing the sales, we're seeing the adoption. I think part of that is just the marketing and getting the word out. I remember when we first started hosting servers and everybody has done this with virtual servers, people would ask that corny question, well, is it going to run in a virtual server?
Of course they would laugh at you. To this day, I get asked, will it run in a virtual desktop and we're finally at the point where that's now a laughable question too. This year, it's really taken off.
Russ Fordyce: What do you think is driving that? Is it ... Has it gotten that easy or people just think it's comfortable or the need really precipitated the demand?
Mike Chase: It really ... It really was this hype somewhat from VMware about have your own private cloud. A lot of people were led to believe that cloud was just mere virtualization. That being the case, why wouldn't you do it on site. They didn't realize was the technologies that cloud and only cloud were bind, things like object storage with Razor coding and the types of high density servers.
Ultra [inaudible 00:04:50] other things that some of these products aren't even available for purchase in the enterprise. They kept banging their head, banging their head trying to do VMware view or Citrix XenDesktop. Running into a lot of barriers. Now you kind of had to wait for a couple of things to happen and it happened this year where they finally exasperated their efforts.
Then large companies jumped in like Amazon which certainly helped legitimize the market and get the word out. Once that happens, where now the cloud providers in general are marching toward desktop. Being the leader in that space, we just need a tremendous surge of business.
Russ Fordyce: Yeah. It seems like there are two leading markets in terms of people that were using desktops specifically. I know that the health care industry really went after that virtualized desktop. I know the busy executives moving from desk to desk and office to office, moving around the country or the world.
It's a great benefit to them. How are you guys seeing now kind of take advantage of those solutions. What are the overall trends in the marketplace that you're seeing of where you're getting penetration?
Mike Chase: Sure. Well, cost was always a good reason to move to the cloud but the security was the reason that people stayed out. From the beginning, our logo had a lock in it for that reason. Having recognized that. We have a lot of things where everything in our cloud is encrypted. What you're seeing more in clouds now is a focus on security.
Because in the past without having private connections like MPLS, if all you have was Internet, the regulators kind of went a little nuts. If you’re doing multi-tenant, you couldn't do dedicated infrastructure, sometimes that was a barrier. The cost structures had to be right but the security had to be in place as far as encrypting.
We encrypt everything in our cloud for example. Because of that and the other controls that we put in place now we have very large financials. I have an army of attorneys in our cloud which is great because if it didn't work, I guess I'd be getting sued like crazy. They love the cloud.
A lot of these guys, it's true story, they'll leave on a Friday from a big firm, 20 of them will bug out. Then they realized that nobody drag the IT guy with him, literally call us, we had a couple of friends who did this, called us on a Friday night, we had them up by Monday. As I realized, okay, guys, it's great we just started on law firm but we have no infrastructure.
We've got credit unions now that are in there and technology companies, some of them are $800 million a year and larger. It's everybody. Because of that we also launched to consumer play. Having watched Apple crawl back into the enterprise through things like iPad and so forth, we created a virtual desktop just for consumer.
I think you'll see us this year come out with some very exciting what we call the personal cloud pack with sponsors and partnerships with Google and Microsoft around some of their licensing and our virtual desktops.
Russ Fordyce: Very cool. Well outside of desktops. What are you guys seeing in terms of other trends in the cloud services space. We're seeing ... We're running ... We're in the midst of nominations for our Stratus Award. We're seeing a lot of unique applications and a lot of unique services. What are you guys seeing as other trends that you're in or that you might be looking at?
Mike Chase: Right now, just for a revenue split. Virtual desktops is about 40% of our revenue, servers is 40%, and cloud services is about 20%. They all play in symbiotic ways. One of the questions I get asked all the time too, how come you guys never created an offline desktop, what do you do when you're disconnected?
What we've actually seen is one of the trends is that people are using virtual desktop just like they use any desktop to create the content but they'll consume it on a mobile device. Thing like Google Drive or even dropbox which by the way is built completely on S3 storage. A lot of people don't know that.
Amazon has success with S3 and we've now gone to compete with them. Those are the trends that we're seeing. People are just and it's why I changed our logo this yeah. We changed it to What’s Your Cloud Story? Because when you start asking customers how the they use the cloud, it really shocks and amaze you.
We've got guys who will do a pool of desktops because they've got a $12,000 tool. There's a telco here in California that does about four billion phone calls through the network. Actually quality control listening to phone calls. When customers calling to say hey, this sounds terrible, to void phone call, what's going on.
The quality control using a virtual desktop, with his very expensive tool on it. With engineers that are in India and Los Angeles, all over the world. You alos run into some funny things. Funny [inaudible 00:09:25] it was like well, it's been running for five months without a reboot.
When's the last time you ever ran windows. Normally you're starting, you're shutting down. I guess what I call the Microsoft questions. Why can't you make a better, I'm like I'm not Bill Gates, I'm just hosting this stuff. I can't avoid the blue stream just because it's in the cloud. A lot faster provision, it's a lot faster recover.
The good thing is we snapshot everything, every four hours. Who backs up their desktop. In the cloud, you can gauarantee that if you screw it up, you can put it back together really quick.
Russ Fordyce: Yeah. That's definitely one advantages of snapshot in time. You've got, you had reeled off a bunch of players that are in the market. You're talking about some huge players. You've got Amazon. You've got Citrix. You've got all these guys that are out there competing with you in one layer or another. How do you really, you bought built your own kind of special sauce.
How do you go out and differentiate in the market? It seems like cloud is really getting hyper commoditized?
Mike Chase: It really is and it's interesting too because it's different as the services are. There are a lot of differentiators where everybody is carved down a niche. There's still a lot of commonalities in the background. A lot of us buy and design servers with the same manufacturer, we use object storage and there's a lot of other commonalities.
From there it gets very very different. For us we're kind of lucky because even in the cloud and the enterprise as well. It's all been about Vmware and Citrix. We don't use either one of those products, particularly in our virtual desktop.
Originally we had some collaboration around our first gem, our latest generation is actually a collaboration with Google. The reason we're doing that writing our desktop produces Windows to an app on a Chrome Book. It's written through HTML5. Getting to a virtual desktop using a browser is nothing new but doing it in pure HTML5 code as a plugin to Chrome and it's in the Chrome web store.
If you type webhpd, you see our app is different. The reason for that is what we see happening the cloud trend that kind of get back to your earlier question is web rtc, if you've heard of that. Where you have voice, and you have video and chat and presence and all this in a web browser, of course Chrome is all about the web browser.
People don't realize the depth of programming that's going into that. If you combine our virtual desktop plus web RTC and then you can skin how it appears and how it's laid out on your monitors and your screen. You can get to it from any end point including the really cheap Chrome books and Chrome boxes and things.
It really changes how you look at Windows, how you look at files, how you look at voice phone calls and everything that you do. You start to realize there's no limitations anymore. You don't have to carry a laptop. I was in a data center the other day, in fact where they have this kiosk that were really locked down.
All they had was Chrome and the had Windows Internet Explorer. Because they had Chrome, I was in my virtual desktop. The next thing I know these guys are walking by the kiosk. I thought we locked that down. This guy is over in using Office 2013, he surf in YouTube and it's like, woah, security violation.
I said calm down I'm in a virtual desktop. You still have a kiosk, it hasn't been violated and they're kind of chuckling, you really had me. There's some neat stuff coming.
Russ Fordyce: Yeah. That ... It does tend to blow people's mind. You start getting in virtualization. What's one area where you kind of, you didn't expect it to take off but it did, and it kind of shocked you.
Mike Chase: It's interesting because we started with virtual desktops. Amazon and other started with servers. I didn't really think about cloud storage a whole lot until we last year or so and we launched our S3 offering. It's funny because hindsight it really is 20/20. When you look back, everybody should have started with cloud storage.
I tell you because the easiest thing to get a customer to do is DR. They know that the data shouldn't just belong in their building. When you look at VMware and hype advisors, what is a virtual desktop or a server. What's a file on a disk. That's what's it's been virtualized too.
If you could get them to move all those files plus their loose fileshares and other stuff, you can spin up a server, you can spin up a desktop, that would have been the easiest way to do that. Once we had realized that, that's why right now we're number one in virtual desktops. We're number one in cloud migrations.
The other clouds were kind of we host this but the deal is you spin it up new and we don't really care how you move your data. We've made that kind of our niche market.
Russ Fordyce: On the flip side of that question what's one thing that you really thought was going to take off, like the Citrix and VMware talking about hosted desktop that didn't?
Mike Chase: Well for a while actually the desktops didn't. You thought that was going to take off and it was like year after year. Fortunately for us, our kind of claim to fame is we really were the first virtual desktop that could do YouTube in 1080p at full screen and people are blown away by that. Because they were so tied up and all of VDI and its latency and you can't do this, and you can't do that.
We're now the only virtual desktop in the world that can do NetFlix. For example, NetFlix is funny, they'll kick you out if you're on these other products because they want you thinking that the movie quality is bad when it's not, it's the virtual desktop. We do it just fine. For a while, I though this is going to take off. It's going to take off, now, not yet.
People are still screwing out with VDI. Finally this year, mostly because the marketing hype. I don't have the marketing dollars, Amazon does but once they jump in and people started doing their homework. Fortunately we've already been rated by Network World Magazine that came out number one. We beat [inaudible 00:15:08] in other companies.
People start digging around on Google and through Bing and other search engines and figured out that we're there and sales skyrocketed. I really thought it was going to skyrocket years ago.
I had hoped, I had prayed. Finally it's happening, you got to, your servers and your desktops are so symbiotic that you really have to have both in the cloud. If you have one, you have the other.
Russ Fordyce: I bet that you're ... all of your investors are pleased to hear you say that it's taken off.
Mike Chase: They are, they are, because it's cloud is not for the feinted heart. A lot of guys came out there. I remember when wireless came out, to make an analogy. Everybody thought they were going to be their own ISP. You found out that these products were not made to be multi-tenant.
Cloud was the same way, everbody went in and jumped in, so I might be a cloud provider. I'm going to use all the enterprise gear from emc and Vmware and netapp and all these guys. It went broke really fast. They're scratching their head like my god, how do these cloud guys sell storage. Once cent, a gig per month and $0.03. We do that, it's in the herd.
I got to admit, I chuckle with it, it's intentional. When you see south of $0.03, just know it's subsidized by the way. At the end of the day, there's some really exciting staff coming in the cloud and we're just happy to be here.
Russ Fordyce: That's a great segue into, what are you seeing that's next, what's leading edge, what's going to be the next big trend, after hosted desktops?
Mike Chase: I see five. I see five things. I see virtual desktop and the web RTC stuff coming together on really cheap platforms like the Chrome box which are $349, only down to $199.
Russ Fordyce: I'm on one now.
Mike Chase: There you go. I see a lot of that happening where everything really does come in to the browser. I think people laughed a little bit when Google was ... They opened up Chrome book. They thought oh, that's all it is. If you actually read like the Wikipedia articles and web rtc and HTML5. You're blown away by how much is being hit from a code standpoint in there.
I also see some interesting things happening. Some technologies coming together like objective oriented storage and any cast networking. What this means is it basically you'll store something locally in Los Angeles in a cloud. That data will be protected and it will be available on London, Hong Kong, and Sidney.
You'll always have the most local copy of the data, that also gives you two things. It gives you a geographic QoS, meaning that you're getting really good quality and access to it no matter where you are. The other thing is that you've now become totally impervious to denial-of-service attacks, hackers, natural disasters, come what may.
Other things that I see happening in the cloud is I kind of made that list here. Where did I put it. I think that security will increase, it kind of has to, people are very irritated about governments looking into their data. We get request for S3 storage that will only be in the United States.
Where I get the Europeans are like anywhere but the United States. Asians are like I don't want it anywhere over there. I want it in Asia. We're able to accommodate that. I also see that analytics engines are going to become increasingly important. If you remember Star Trek back in the day, Kirk was always talking to the computer, and it was giving him answers.
All the data that's being kept in the cloud now, that's already being done, simple things like when you go surf for music. It's recommending things to you. Even with red box and NetFlix the same thing. I see that continuing. We actually partnered with the company called [inaudible 00:18:41] to do business analytics in the cloud.
It will replace spreadsheets as my prediction because what it's able to do is go get the data from different data sources, crunch it and actually report back to you, just as if you're Captain Kirk asking that computer, what this all lose data mean. It'll tell you or it might give you the Monty Phython computer answer. I don't know.
That's where we see it going at least. Then last but not least, the comments about HTML5. I think there's a lot there. That's where cloud is going. Anytime, anywhere, 365 days a year with some more smart intelligence to it.
Russ Fordyce: Yeah. Let's just, let's hope that the access providers can keep up with demand, with the bandwidth demand.
Mike Chase: Yeah. Actually that's something that we conquered this year with 15 carriers. We do offer one gig circuits now throughout North America and Europe for as little as $1500 a month. The largest customer data move that we did was with the one gig circuit like that and it was 500 terabytes, it was half of the petabyte it took six weeks.
Russ Fordyce: Wow.
Mike Chase: Previously that was one of the problems with S3 storage. People wanted it, encrypted, the regulator wouldn't let them use it, they didn't want data transfer fees. They needed bigger pipes. They needed software support from companies like [inaudible 00:19:58] Symantec and others.
All those barriers are gone at least with our offering and you can put big data in the cloud. That's pretty exciting.
Russ Fordyce: Mike, you obviously spent a few hours there at dinCloud, what do you, when you get the hour free ... What are you doing?
Mike Chase: I try to get as far away from technologies. I can up and go to forest but unfortunately, I have a satellite phones on. I'm still connected. If I fall off the tree, I do want to be rescued. I think me and the cloud always be tethered, here at dinCloud we have a slogan for the last three or four years that we've been running the company.
Cloud never sleeps and it's quite true. I get emails from our CEO and Ali and other guys three or four in the morning, there's somebody always awake and we've got staff around the world so it's pretty exciting.
Russ Fordyce: Yeah. Well, I appreciate you guys taking the time to chat with us today. I really do appreciate kind of the insights on the cloud and hopefully we'll see you in the Stratus rewards as well.
Mike Chase: Thank you. I appreciate the opportunity and hopefully I'll see all the rest of you guys in the cloud soon.
Russ Fordyce: Yes. This has been Russ Fordyce with the Business Intelligence Group talking to Mike Chase, who's the CTO of dinCloud, you can look them up at dincloud.com. Thanks a lot Mike.
Mike Chase: Thank you, Russ, appreciate it.
The old cliché about tomorrow being the first day of the rest of your life is actually irrefutable. Think about it! The question is really what will you do with the rest of your life? Will you continue the same routine, stick with the relative comfort of the status quo, or stick your neck out and finally go for your dreams?
If that dream is; owning your own business, why not go for it? Your dream may be a business to business enterprise such as CBAC Funding or a business to consumer one like Nixon … regardless, these 10 steps to will get you to the place you’ve been dreaming of; they are a roadmap, if not a stairway, to your goal.
Step # 1 – Draft Your Business Plan
The very thought of writing a business plan has stopped many a budding business person dead in their tracks. This is usually caused by fear of the unknown, procrastination or a lack of confidence.
Understanding what a business plan is will eradicate the fear of the unknown. A business plan is simply a written description of your business’s future. It describes your plans and how those plans will be implemented.
Stop procrastinating! It isn’t that difficult to do and there are countless sites on the Internet that can help you organize your thoughts making the task almost painless.
If you are lacking self-confidence, toss in the towel. Self-confidence is the key characteristic every entrepreneur and business person on the planet has in common with one another.
Step # 2 – Define Your Market
This is not so difficult. Unless you are selling food or water, only a defined subset of the consuming public will have a need for your product or service. Defining your market is nothing more than determining the size and demographics of that subset.
For example, you plan to sell pet supplies. You need to determine how many pet owners are in your market because pet owners are the subset of the overall market. Additionally, you need to know your competition and what share of the market they may have. Knowing your competition, the level of service they provide and their pricing can shine a bright light on the things you need to do to compete successfully.
Step # 3 – Establish Your Brand Identity
Branding is not so different a concept from the “old West” practice of branding cattle. Once that bull or cow carries a brand, it will be instantly identified as belonging to a particular ranch and/or rancher. The “Circle K” and the “Diamond B” are two examples of cattle brands. The same concept applies to creating a brand identity for your business. Develop a logo or “brand” that is immediately and uniquely associated with your business. This is very important. There is an excellent piece on the topic here at Entrepreneur.
Step # 4 – File Your Articles of Incorporation
The scope and nature of your business dictates the need for incorporation, an attorney to draw up a partnership agreement, trademark ideas and so forth. Not every enterprise needs to be incorporated, although in most instances is prudent to do so for tax and personal liability reasons. If there are no complexities that demand the services of an attorney, there are many sites on the Internet for do-it-yourself incorporation. These can save you some money.
Step # 5 – Build Your Team
If you think you are going it alone … think again. Even sole proprietorships have employees. Technology can play a major role in the success of your enterprise, but don’t fall for all the hype. When you are starting up, you don’t want to buy into technology that you will later find inappropriate for your needs, overpriced or useless in the day to day conduct of your business.
Step # 6 – Sell, Sell and Sell
There is no substitute for aggressively marketing your product or service. Networking is a key component of any successful business. Let people in your personal network know what you are doing. Enlist them as cheerleaders for the business. Join the Kiwanis, Rotary, Junior Chamber of Commerce and other local organizations. A direct personal network is just as important as a virtual network.
Step # 7 – Use the Media
Issue a press release. Invite the local paper, radio and television station to do an interview with you and feature a story about your business. If you generate “buzz” you generate revenue.
Step # 8 – Fake As Needed
Regardless of your track record, your humble beginnings, your anemic bank account, you must always think big and act as though you belong. Assume the attitude of a bigger company. Never think small or feel like the underdog. Some companies, just starting out, go so far as to create email addresses to various departments that do not yet exist in order to give the appearance of being larger and more established than they actually are.
Step # 9 – Work In and On Your Business
No one wants your business to succeed more than you. Don’t hand it off to a caretaker. Work in your business. Learn its strengths and weaknesses so that you can work on your business. There is no better way to improve and grow your business than through your intimate knowledge of its operations.
Step # 10 – Celebrate & Network
You are up and running, well … maybe jogging, but you are on your way! Celebrate a little … keeping the business in mind of course! Invite your network, vendors, clients and would-be clients to celebrate your grand opening. You will generate buzz and goodwill in your market and demonstrate that you are open for business and a serious player. Use the occasion to solicit feedback from your guests. Let’s be honest; some of the best ideas are not our own.
These are the ten steps almost every business follows. It’s not that complicated and there is no reason you can’t start now.
Dipti Parmar, a digital marketing wiz is associated with E2M Solutions. She’s been journeying through the world of digital marketing for 6 years and is a blogger and networker. She’s also a movie buff and loves taking long walks by the seashore. She is @dipTparmar on Twitter.
Lawsuits are costly, inconvenient, and overall unpleasant. However, when you’re running a business--especially a successful one--you’d know that lawsuits are inevitable. From discrimination, injury, intellectual property infringement, to contract disputes, the possible charges are endless.
While there’s no solid guarantee your business won’t ever get sued, here are the ways to reduce the risk, protect your business, and stay out of the courtroom.
1. Document everything
This is quite basic, but is seldom done in everyday life. Documenting a well-drafted contract or memorandum that records an agreement is one of the best ways to avoid misunderstanding and prevent lawsuits. Emails, invoices, policies, contracts, should be kept safe to resolve future problems. Even telephone messages from clients, albeit how close you are, should be recorded to protect your business.
2. Understand intellectual property laws
As a business owner, it is your responsibility to make sure that your business name, logo, and other designs are not violating any intellectual property laws. Some business move forward, only to find out that someone else already owns the trademark to their business name. Before investing in time and resources, do your research. Visit the U.S. Patent and Trademark Office website to make sure that you’re registering your own trademark and not someone else’s.
3. Protect your files
Now that most businesses rely on computers, it is important to ensure safety for your computer system. Viruses can infect your business files, and put you at risk of not being able to perform a certain task. In addition, the infected files may be stolen or lost and can lead to legal action from clients. One way to protect your files is to always have a set of updated backed up files to refer to. Keep them offline to help keep them safe.
4. Create an employee handbook
To avoid misunderstandings with present and former employees, it is best to have an employee handbook that contains all important employment issues. These topics include termination, maternity leaves, sick leaves, compensation and benefits, sexual harassment, etc. The handbook should be given and oriented to the employee upon employment, and should be dated and signed by the business owner and employee. This handbook should also be updated consistently.
5. Think and act safe
Accidents do happen, but you can help prevent it by maintaining your physical business property. One way to avoid personal injury lawsuits is to keep safe the area where your employees work, where customers walk and can potentially slip. You can also consider securing alternative work sites in case of hurricanes and storms.
6. Hire a competent attorney
Aside from giving advice when your business gets sued, lawyers are needed during the entire business operation. They are there to oversee contract reviews, debt collection, and other legal matters, ensuring that your documents are valid and secure. That’s why hiring a good one is imperative. Fortunately, not all of them are as costly as many think. There are legal plan providers such as LegalShield that give small businesses access to qualified attorneys for a low monthly fee.
One surprising way to avoid a lawsuit is to sit and chat. Try to clear the misunderstanding you have with your customer, employee, or other company who filed against you. Who knows, this simple step can lead you to the road with less heartache and inconvenience.
With these seven tips, your business will be on its way to a hassle-free tomorrow.
About the author A writer and entrepreneur, Melissa Page is based in San Diego, California. She writes just about anything that tickles her fancy and dreams to help and entertain readers with the her writing.
Starting a company is hard. There are so many factors to consider, so many people to hire. Sit back, take a breath and work to prepare your organization for growth based on your own priorities. Staff.com – Connecting Great Companies with Global Talent
Making room for improvement is perhaps the chief motto that seems to captivate each and every entrepreneur in this world, especially the ones that seem to be in their startup phase. Success is the ultimate result that we all seek though our earnest endeavors. Success and growth happen to be desired by all but attained by a chosen few only. In this world success comes to you only when you are too busy looking for it with a set of balanced strategies, measured steps and a contingency plan at the back of your mind (in case your plan A does not appear to make it to your final destination). If you take your time in order to venture into a virtual tour of the small business establishments around the world that made their voyage to the ‘golden handshake ‘of fame and fortune in a supersonic pace you would be able to figure it out that it is basically some mind-boggling ideas that worked as the driving forces in the organizations and eventually helped them obtain worldwide fame and flourish. If you would like to do the same to your organization then here is an interesting peep at 5 worthwhile ideas you would like to take a look at.
Focus on productivity and skills sets
As the owner of a small business entity the most important job for you is to ensure that you are going to focus on the proper enhancement of the productivity level and the respective skill sets of your organization. The productivity level of your organization and the respective skill sets happens to be integrally associated with the reputation of your organization. Therefore, you cannot compromise with these two quintessential issues. Take care of them and they will take care of the growth of your organization.
Smart delegation of tasks
Smart delegation of tasks is an asset in you and with proper deployment of this vital skill you can make it a point that you are going to get the best engagement as well as best participation at work from employees or coworkers. If you are able to delegate tasks in a smart way then you can rest assured that you are going to engage the workforce, encourage cooperation among them and invite more output.
Install enterprise management software
Installation of enterprise management software is going to streamline the commercial functionalities of your organization to a great extent. You can consider SAP, SaaS as well as other options in this regard. Resorting to these high-octane software solutions you can make the management, access functions and back up facilities a walk in the park.
Use the power of the Internet to your advantage
We are living in an era which is dominated by the omniscient presence of the internet. If you really wish to take your small business venture to the zenith of flourish and success then you cannot possibly ignore this powerful medium. You can actually use this platform of gigantic proportions in a number of ways. You can create the business blogs, choose affiliate marketing techniques, adopt pay-per-click advertising, resort to online copy writing etc.
Give value to customer feedbacks
Last but not the least; do give value to customer feedbacks. You should remember that a satisfied customer is the biggest advertiser for you. So, do get feedback from them and use them in a productive way.
The 5 ideas are the proven approaches that can take your small business organization towards security as well as consistent growth. When it comes to the issue of success and consistent growth you must be able to follow what most visionary leaders tend to prioritize. In order to win their spur in their respective fields they focus on four golden principles. They choose to reinvent strategies, restructure stereotypes, reorganize things and break precedents. If you merge these four crucial aspects with the 5 brainstormed ideas you can resolve difficulties unprecedentedly and hit the high notes unmistakably.
Adriana Sopi is a renowned blogger, author and speaker. He mainly writes and speaks on the benefits of 8a certification programs. The author helps small-scale business organizations identify their true potentials and achieve their objectives. His write-ups showcase the rich benefits that small business obtains for 8a certification programs.
Steve Hershberger hopes to solve the terrifying problem of running out of beer. A global problem, SteadyServ measures and monitors kegs of beer for restaurants and bars. Sounds trivial, but when you think what that means to an average restaurant, running out is not an option. And with most bars and restaurants, space is at a premium so storing more kegs isn't a great option either.
According to Bloomberg Businessweek, most restaurants try to make alcohol sales account for around 30 percent of their revenue. Restaurant, bar and grocery store owners often use that estimated percentage of revenue as one factor in pricing their drinks. The more a business hopes to make from alcohol sales, the more expensive its alcohol. HOUSTON CHRONICLE
Join us for a Big Awards SYNC with CEO Steve Hershberger as he explains the challenges growing a small business and how his technology can help your local bars and restaurants.
Live interview here Friday, June 28th at 9 a.m. eastern.
Russ: Good morning everyone. This is Russ Fordyce with the Business Intelligence Group. Today we’re here with Steve Hershberger from SteadyServ out of Indianapolis. SteadyServ is a beverage management company. I don’t know any other better way to say it, but Steve’s going to give us an insight into his company and how he got started. Steve, thanks for joining us and welcome to the Big Awards Sync.
Steve: Thank you, Russ. I appreciate the opportunity to be with you today.
Russ: Yes, so tell us just briefly, kind of in that elevator pitch, what SteadyServ is and what market you're going after?
Steve: Yes, absolutely Russ. SteadyServ technology was formed to solve a very specific problem in the industry. What we do is we do inventory and supply chain management for the beer industry. Now the beer industry is broken into really two sections, two groups that were mandated by law by the Federal government. You have on-premise, and if you think of on-premises, “I'm going to drink my beer here.” When you go off-premise, which is, “I'm going to take my beer after I buy it and drink it somewhere else.”
What we do is we help on-premise retailers and then the distributors that support and supply them, and ensure that their supply chain of beer is flowing smoothly.
Russ: I think you guys developed a proprietary technology, I think a patent tending technology to do this. I guess in the old world, the manager would go round and lift kegs. I remember that from my fraternity days. It wasn’t very effective. Now your technology is basically monitoring the kegs; is that right?
Steve: Well yes, Russ. In a general sense that’s exactly what happens. What you did at your fraternity back in the days still occurs. The beer industry, if you think of draught beer, it really hasn’t evolved since essentially 1933 or 1934. The only difference is today are that we use either diesel or propane powered trucks to deliver it and the kegs are no longer wood. They're aluminum. Outside of that it's pretty much the same.
If you think of an industry, for instance the automotive industry, and it operates on the just-in-time basis, right. Ford, as an example, when they need bumpers they don’t send an email and say, “Hey, send us over 2,000 or so bumpers and we need them in a couple of hours.” It doesn’t operate like that. But that’s exactly how the beer industry operates. In essence, for the on-premise, the places, the bars and restaurants and taverns that we support, they buy almost $22 billion worth of beer a year. All of that beer is just-in-time delivery.
The problem is that when they order their beer they do exactly what you did when you were in college, and they take a legal pad and then they walk into a cooler and then they shake those kegs and go, “Well, gee, this one feels a third full or this one feels mostly empty,” and, “Gosh I get my delivery day after tomorrow,” and, “Boy I think we bought this last week and maybe this the week before so that sounds good to me and I'm only going to check 10% of the kegs because those are the ones I can reach.” Then I put an email or a voice mail or a text message into my brewer and I hope for the best.
That’s the solution that’s just untenable to us. You can't really operate with any degree of efficiency in an environment like that. Because of the explosion in craft beer today and the level of competition, and frankly the money that’s at stake, brewers, distributors and retailers are saying, “We really wish that there was a better way to do this,” but up until now there really wasn’t.
We went in and developed a hardware and software solution that essentially makes all of those problems evaporate.
Russ: Tell us a little bit about the technology. What goes into iKeg?
Steve: Well it's actually a fairly sophisticated hardware and software synthesis. But be that as it may, from the user standpoint, it's got to be incredibly simple and easy to operate; they really don’t care what happens. But for the purpose of today’s interview, essentially we have a hardware device that sits underneath their keg. And think of it like a very sophisticated scale. It measures pressure and it takes that pressure and translates that into weight and the velocity of change of that rate over a specified period of time. That uses RFID technology to determine what’s actually in that keg because every time a keg empties it goes away to be refilled and it gets filled with something else, whether it's the same brand, Miller, Coors, or it may go to one of any hundred different craft breweries to be filled with a different brand and a different style every time.
The RFID technology understands and says, okay I now know what's in the keg and it pairs that information with the information that the sensor is telling us, “Hey, here's how much is in this keg.” Then it uses a very specific wireless frequency that’s different than the standard Wi-Fi that everybody is familiar with. It uses that singular set of band width to send information from the sensor in the cooler to an uplink that is near that cooler that we created. And then it uses one of two cellular channels to deliver that information to the Cloud. Once it's in the Cloud it goes through our enterprise software and then it's delivered back to either a portal similar to the … it's access to their computer like you are and I are talking on, or maybe delivered to a tablet or an iPhone or an android phone or a kindle fire that a manager is using as they walk around their facility, or that a distributor sales person is using as they're making their way to and from the hundred different accounts they have to serve every single week.
Russ: I read on line, I think Bloomberg had that it was 30% of a restaurant’s revenue comes from the bar. Is that what you guys are seeing?
Steve: Oh, absolutely Russ. The draught beer category is the single largest revenue driver as well as margin driver that any restaurant is going to enjoy. Let me give you a little bit of an anecdotal story to sort of drive that home. We are working with one very successful retailer that everybody probably in the country has been in it at least once. The gentleman who leased that used to run operations for a large publicly traded franchise of companies that most of us have either seen on television or have been in. He says to us they’re very good operators, “We know exactly what our costs are for labor, for food, for spirits, alcohol, for disposables, the napkins, plates and what not.” He said, “But beer is a black hole. We’re just constantly guessing. It drives us more revenue and more profit than anything else by a long shot, but we have no idea what's happening in it. And so we just sort of fumble around.” For the first time now iKeg gives them the ability to understand their largest profit contributor on their P&L and make better decisions about what they need to carry, when they need to carry it and how much they should be spending on that line item.
Russ: Alright. Now you're obviously very passionate about beer, but I get the sense that you’ve got more than a beer background in your history there. How did you get here? Steve: Well that’s a long strange tale, Russ. Yes, I came to beer actually by accident. I'm a software and services guy by trade. I've spent 20 years developing either software or services that support software throughout my career. About four years ago I entered an opportunity to have lunch with a friend of mine. At the time he worked for a large consumer electronics firm and he wanted to retire … he was a tremendous operator, but he wanted to retire from that to become an entrepreneur. I took him out to explain the entrepreneurial lie to him which is it's going to get better in six months, and I'll be home in 20 minutes.
Steve: He said, “Man you’ve really bummed me out. The best you can do is buy me a beer.” We went to a craft brewery that’s here in Midwest and we got a tour by one of the owners. We walked around and I looked at my friend and I said, “You know what, I think this is a good business model and I think this is something that we could do.” Three years ago we started planning to open a brewery and we did and we scaled it to where it was one of the fastest growing craft breweries in the Midwest.
During that period of time one of the things, Russ, that I was most concerned with was what are the drivers that cause retailers and distributors to either want to keep a brewery on tap because that’s life-blood revenue for a brewery, or what are the drivers that cause them to make the decision to remove them from being on tap. For me, understanding of that allowed me to … us to do some, what I thought would be good for predictive analysis on making sure that we always took two steps forward rather than one step forward and one back.
During that process, Russ, I learned that this problem of just-in-time inventory with no system tools or processes existed and that the market was very chaotic and a mess. We said, “Well, wow, why can't we solve that problem? If it's not going to be us it's going to be somebody else. It may as well be us.” And therefore it was.
Russ: Well that’s great. The concept is really great. It does seem like a black hole. Just, again from my days, you’d grab it, you pull it and you didn’t know. Then you’d just grab one from the back.
Steve: Let me drive a soft home for your audience. Imagine that you sell widget to a very large customer segment, and every year 20 to 25% of those widget orders are raw, and that every year you have to bring back a million dollars or more of those widgets and you’ve got to buy them back from your customer and then you’ve got to throw them in the trash. That’s what goes on in the beer industry. As we all know, we see on TV, there's a freshness state for beer. Well in reality, is that marketing? No that’s not marketing because beer will actually [inaudible 0:12:07]. It will turn skunky or it’ll go bad if it sits around long enough. It's not like wine, it doesn’t age. There are some instances if you do it … from a brewing standpoint, but that’s not the case. But if it's in a keg and it's in a retailer’s cooler it needs to be sold. If a beer is at or near it's freshness state that distributor’s got to bring that product back. They've got to buy it back and they’ve got to poor it out. Those distributors ever year sometimes on the low end they poor down the drain 200 or a quarter million dollars worth of beer. On the high end sometimes its two to three million dollars a year that they just pour down the drain.
iKeg allows them to track the age of every beer before it goes to market, when it's in market so that they can move to an industry standard. Let me ask you, have you ever heard of the term LIFO or FIFO, last-in-first-out, first-in-first-out?
Russ: Yes. Steve: It's pretty standard, not only accounting practice, but as inventory management practice, right. Well in the beer industry they don’t use either. They use nifo, nearest-in-first-out because they don’t know what they’ve got available to them.
Russ: Are you out there selling to individual retailers or are you out solving this problem for the distributors and it's trickling down to the retailers as a benefit?
Steve: Well that’s a great question, Russ. By law, the Federal government years go established what is called a new … it's a three tier system. At the top of the system are the LEMs, the suppliers, the brewers. The middle are the distributors and the wholesalers and the bottom are the on-premise and off-premise retailers. What we do is we literally, quite literally, support all three tiers of the process. Our customer is the distributor and our user is the retailer. The indirect user is also the brewer. The brewer benefits from the information that we make available to them by knowing how to better allocate their brewing schedule. “What do I brew, when do I brew it? Then I also have as a brewer an infield sales team that I spent a lot of money to support. Where do I deploy those people so that they're actually effectively helping the distributor sales team?”
iKeg, a lot like Mattel, selling to the mob but the kid plays with the car, so the kid’s the user, the mum is the one with the checkbook. We operate much the same way.
Russ: Okay. Now what are your challenges right now in scaling the business? I imagine you’ve got to go out and talk to every beer distributor in the world which is a hefty task? What's the challenge to scale and grow the business?
Steve: Good question and the challenge of scale is operational excellence. Our technology we've been working on, Russ, for quite some time. This is not a small endeavor and we have been … we have a team of dedicated engineers on both the hardware and software side that are built here in Indiana, that are in Dallas, Texas, that are in India, that are in Italy as well as a facility in Singin China that is where we manufacture and do a lot of our [inaudible 0:15:31]. We've got all of those people tightly coordinated on building a solution that integrates the hardware and the software seamlessly. Right now we’re in a closed beta which we will come out of due this summer. Then our job in terms of scale is to share iKeg with other distributors. Really it's to tell the return on effort, return on time, return on the investment story that they're able to deliver; more market share, more revenue, lower costs at lower effort.
Russ: I would imagine that there are others in the market trying to do similar things. Is there anybody breathing down your neck in this space?
Steve: Well you know right now we, like everybody, have worthy competition. Our competition has really been focused on using flow meters. Flow meters do an admirable job in tracking how much beer flows through a tap. But that’s what it tells you on an aggregate, how much beer flows through that tap? It's really focused on the people that manage their systems or still the systems, focus on shrinkage. How much beer am I wasting or how much beer is being stolen from me by a fruit pint to somebody? While that’s important we think that that’s the tail lagging the dog. We've taken a very different path.
The other competitive choices that are available or taking an actual scale into the cooler, taking that keg, dragging it across, putting it on the scale and reading the number to somebody else that writes it on a legal pad. That’s the second competitive choice that you’ve got. And the third competitive choice is do nothing.
Really what we’re focused on, Russ, is creating for the first time a repeatable defined standard within the industry for order and inventory management to take this spikiness and the black box out of it and make it predictable and essentially to create a new normal that makes it easier for everybody in that channel to operate and do their job effectively. If we do a good job at that,
Russ, nobody’s going to want to go back and do it the way that they wanted to before or did do before.
Russ No, I can't imagine they would. It seems like a black pit, a big hole in a lot of bars and restaurants and when that’s your life blood, that just simply can't be the case. I applaud your efforts. Now when you're not … when you do have that 20 minutes off and you are … you're not tweaking code or finding another distributor or looking for your next partner, what do you do in the off time?
Steve: Well I do a couple of things. The first thing is that I spend a lot of time on my road bike. I've been a cyclist of years. I try to get out either with my friends or by myself and either just take in the rural countryside that I'll disappear into. Or I'll be thinking about solving problems. I'm here doing that or I'm playing golf with my 13 year old, and believe it or not already getting lashed by him because 13 you can drive it almost 300 yards and I just look at him and I go, “Really?” It's not fair. Then I've got a seven year old daughter and they both swim as well so I am … I try to be half as good a parent as my wife is. She does an amazing job with our kids so we just try to be … I try to live up to her standard and enjoy them. Between my kids and my wife and spending time on the bike, that’s where I spend my off time, Russ.
Russ: Now is the brewery still around?
Steve: It sure is. As one of the founders I'm very proud of the success that they’ve had. I sold my interest in the brewery a while back because it was necessary for me to focus intently on scaling SteadyServ. But the brewery, I love to promote it. It's called Flat 12 Bierwerks and its named after a car engine and a really interesting story that included some industrial espionage at the turn of the century. But you can find them at flat12.me. They make some of the best beers on the planet.
Russ: Oh, that's great. Well, Steve, I really appreciate you joining us today on Big Awards Sync and we wish you the best of luck in your coming out into general availability on the iKeg product. Steve: Well Russ, I really appreciate the opportunity to share what we’re doing and it's been a pleasure to spend the morning here with you.
Russ: This has been Russ Fordyce with Steve Hershberger from SteadyServ and we’ll see you next time. Thanks everyone.
A Diamond May Not Be Forever
Anne Johnson is part social worker, part diamond broker and part blogger. As the Managing Director of MJ Gabel she is responsible for growing the business and writes about the diamond industry, trends, and inside secrets. At just 26 she handles clients looking to part with precious diamonds and works to find buyers across the globe. We say down with Anne to talk about her business, the challenges she faces and her tactics to find new customers.
Russ: We are here with Ann Johnson. Ann is part of the MJ Gabel Company, which are diamond specialists out of the upstate New York area. We are going to talk to her a little bit about the diamond buying business and working as a small business and talk to her about the economy and how things are going.
Ann thank you for joining us and welcome to Big Awards Sync.
Ann: Thank you Russ for having me.
Russ: Absolutely! Tell me a little bit about MJ Gabel and your role there.
Ann: Sure. At MJ Gabel, I am one of the Managing Directors here. Our company specializes in purchasing diamonds in a variety of forms: old engagement rings, old jewelry. There aren’t that many outlets for people to sell these pieces in the industry. We started this business in order to help those people who are looking for an outlet. Just really can't find a good price or have been unsatisfied elsewhere.
Russ: It's an interesting market you've got, especially during kind of the economic down turn. I imagine this is a similar explosive growth as the gold movement. Has the economy driven for your business? Has it actually been helping your business?
Ann: I think it has a little bit. I think the other thing that's helping our business, in kind of an unfortunate manner, is the divorce rate in this country and the amount of breakups that we tend to see, broken engagements, divorces like I said.
A diamond symbolizes that connection and that love and when that's broken, people have this pieces and their not sure what to do with them. Sometimes, people have held onto them for many years. Now, in this economic climate, people are finding well it's just sitting here, I might as well see what I can get for it. I think most people sometimes are surprised at the value that you can pull back out of the piece.
Russ: How did MJ Gabel get started? I mean, what was the evolution? How do you guys decided to go out and build this new company?
Ann: Absolutely! My partner used to work in the Mergers and Acquisitions Business and he used to trade large parcels of diamonds. He then, kind of, switched gears in working in single stones, which are just obviously the single diamonds in up of themselves. We both happen to be products of broken relationships and had diamonds that we didn't know what to do with it. We work any fair prices. We ended up selling them each for very little. We realizes that there is a place in this market for people to sell diamonds and that place needed to be filled by a company. That's how we came to be.
Russ: What are the other or traditional outlets that companies or people might go to? How are you guys different?
Ann: Sure. Most times, people go to a jeweler first. Thinking this is where I bought the piece. It would be logical that the jeweler then would purchase it back. Then we also see them going to traditional private sale groups such as Craigslist or Ebay. The main problem when going back to a jeweler is jewelers tend to not purchase diamonds back because they don't want to disclose the markup that was made on the original sell.
Let's use round numbers. If you purchase the diamond engagement ring for $10,000 and you walk back into their store and said, "I want you to purchase this back. How much do you give me?" They give you a number, say 4,000. You would look at them like they were nuts because of that increase mark up. They don't like to disclose those numbers, so most tend to not purchase stones back.
Then people tend to go to the private route, Craigslist, Ebay. Craigslist is bombarded with spam these days. Send your ring to a, my cousin in Nigeria. Give you my PayPal account, I mean lots and lots of scams. Then you also have to find someone who loves the ring as much as you do and has the cash liquidity to spend on it. Again, when you purchase a ring, retail originally you can finance it, you can almost get a mortgage on it If you needed to.
There are some boundaries that people have to overcome and get through to sell the piece. It can be a tough journey and that's where we like to come in and offer our services to people to make it an easy transaction.
Russ: You're getting this rings at a fair rate and then what are you doing in return? Are you back out selling those rings? Are you selling them wholesale? How are you guys doing on the sales side?
Ann: Yup! What we do is we actually recirculate the diamonds back into the industry. It's not like, a person would sell us their ring and then two weeks later they'd see it in our showcase, for example. We don't do that.
The pieces are reused, circulated back into the trade. If it's unpurchased, an outright purchase from a client that's what we do. We use our resources, lot of them are outside of this country. There's some big diamond markets in Israel, in Belgium, we utilize those. As an alternative, we also offer brokering service for clients because sometimes it's not a situation where I just purchase it from you. I may guide you to a different source and just broker that transaction to make it smooth for you.
Russ: It seems like you guys are heavy online, what sort of marketing outreach are you doing and what did you found to be successful?
Ann: A lot of it is word of mouth. We strive for very high customer satisfaction. In return, most of our customers kind of pass that word on. If they have a girlfriends that may be just got divorced or knows that they have a ring that they aren't using. But we have to keep in mind that the timing for this is different for everybody. While most people have gold that they can sell, not everybody has a diamond ring for example. It's a life changing event typically. Everybody's timing is different. That's why word of mouth helps us the most. We reach out to some people locally and say, "Hey we're here! If you need us." A lot of its organic searches. People are just finding us organically through the internet. Submitting a form to us and we got on the phone and have a real conversation with them about what they have.
Russ: You're bridging that kind of digital gap and personal gap with the actual human interaction which is..
Ann: We're trying to! Yes, I believe you're not to know is the hardest thing to get somebody on the phone but once you get them on the phone, I think it brings it back into a personal level that we are people. We're a serious company and we strive for that satisfaction.
Russ: It's interesting. I once heard a statistic that, I think it's, you lose, was it, after five minutes of submitting something online, the ability to connect with that prospect goes down like a 100% or something. It's something crazy.
Ann: Yes and that's why, the minute someone submits a form, it gets forwarded to inform our customer service department to one of our representatives. We can at least try and get them on the phone within that same day. If not within a short amount of time, hopefully within an hour. It's usually our goal.
Russ: What are your obstacles of growth? Is it finding new prospects? Is it selling diamonds? What are your barriers right now?
Ann: What are our barriers right now? I think that one of our barriers right now is just finding people at the right time that they're ready to sell their ring. I think that's the hardest thing. I mean, we could blank it in advertising but it wouldn't necessarily make a difference to a lot of people because, again, it is a life changing event. It happens specifically at a time per person and they may not be ready to sell their ring right when they had their breakup. It may be years down the road. That's our biggest obstacle is reaching out to people at the time that they need us. Not necessarily just reaching everybody. However, everybody could be a potential client. It's kind of a balance for us, I think.
That's one of the barriers that we're facing is how to reach people at the right time but then it's also a kind of put a bug in their ear it in a couple of years they’re in that kind of a situation. Not that we want them to be. The reality of this country is, we do have a very high breakup rate and divorce rate unfortunately.
Russ: It sounds like Israel and Denmark have a lower breakup rate.
Ann: I don't know if that's true or maybe they. I don't know what the situation is over there but maybe we do need to mimic some of their styles.
Russ: That's great! When you're not pouring over the diamond trade and looking for new prospects and talking to customers, how do you wind down?
Ann: I have two dogs. I have a boxer and I have a black lab. They keep me busy for now until I have once I'm two feet running around. We love the outdoors, spending time outside. I really take time away. It's coming up memorial day weekend, we're going to the Thousand Islands but I guarantee you, it will still be work. It's mixing work and play for us right now while we're building our business. We try and pull away when we can but you really never pull away fully from it.
Russ: Yes! I know the feeling. Ann I really appreciate you joining us today on the Big Awards Sync. We wish you all the success in the world and really do appreciate you joining us this morning for brief discussion.
Ann: Yes! Thank you Russ very much for having us. I really appreciate it.
Russ: This is been Russ Fordyce and Ann Johnson from MJ Gabel. Ann is a diamond specialist and I guess a recovery specialist, we might say so.
Thanks Ann for joining us and we'll see you next time!
SYNC Interview with Cream.hr Cofounder and CEO Caitlin MacGregor
UPDATE: Since our interview, Cream.hr has rebrabnded as Plum.
When the world went paperless, somehow it didn't stop people from continuing to create resumes that were meant to be printed. And without a real standard, recruiters and managers looking to hire still have to digitally sift through endless reams of files, page after page, down arrow after down arrow, searching for that one special person who is "just right" for the position. Cream.hr looks to change all of that with their science-based filters that comb through resumes for you, looking for that needle in the haystack.
We recently featured Cream.hr as one of the 4 must have tools for a start-ups and we'll talk live with CEO and Co-founder Caitlin MacGregor to get her insights on the marketplace and hear how they are managing the explosive growth from the cloud.
Russ: Today we’re with Caitlin MacGregor from Cream.hr and that is a software as a service platform designed to help you hire and recruit talent better. Caitlin, thank you for joining us and welcome to the Big Awards SYNC.
Caitlin: Thank you very much for having me.
Russ: Your Company’s got a very interesting model. Why don’t you tell us a little bit about kind of what you guys are offering and then I’ll ask you kind of about how you founded the company and how you guys started it up.
Caitlin: We help companies hire better quality people in less time for less cost. We’re able to that because we actually assess all the job applicants as they apply online and we can predict which ones are going to be the most productive as well as provide a really important intelligence as to what the applicants’ priorities, strengths and weaknesses are.
Employers are no longer fooled by the contents of a resume and when they actually bring somebody in for an interview they really know who those candidates are-their priorities, strengths, weaknesses and ultimately they’re armed with the critical data necessary to hire the cream of the crop.
Russ: You’ve got some secret sauce in there I’m sure it sounds like the marketing wizards who write resumes often are going to be you know left by the wayside there. Tell us a little bit about the secret sauce and how you guys kind of you know came up with it.
Caitlin: There’s a good decade or two of research in psychology that has been able to identify what top performers have in common and our co-founder is Dr. Jordan B. Peterson-he’s a tenured professor at the University of Toronto in [inaudible 0:01:46] Harbor and so his research has been published in leading scientific journals under peer review and he has developed a fake-proof assessment that can particularly identify top performers that have those traits that are in common with top performers and deliver results that are six times more accurate than resumes and interviews combined.
What we do is focus on measuring those qualities in the applicants and then also because it’s fake-proof we’re able to really ask the candidates to prioritize their strengths and weaknesses-they can’t say that they’re good at everything so it’s ideal for a competitive hiring environment. We’re able to provide the employers with that critical data but basically this is commercializing academic research-proven scientific research and bringing that to the mass market.
Russ: Tell us a little bit about how you guys got started and how you all found each other.
Caitlin: This is my third start-up. I was running a company in Toronto and I was running this entire company at a pretty young age so I started seeing an executive coach who was this professor of psychology, Dr. Peterson and then I moved to the United States to New Hampshire to start up and run an educational software company and Dr. Peterson informed me that if I was to mess up my first hire it would be a loss of $300,000 on our company so he let us use his assessment to assess all 80 applicants that applied for this position and two candidates really stood out for different reasons so we hired both of them.
Joel, he was amazing on paper. He had a Master’s in Education, five year’s work experience, had previously worked at a software company; his scores showed that he was going to be just an average worker though but you know he was just too good on paper so we decided to hire him and then there was another applicant Christine and she scored ten points above everybody else.
She ranked in the top 3% of the workforce in terms of her productivity and so we hired her and within three months we fired Joel-he was sitting around playing fantasy football and clocking out early and only doing 10% of the work, whereas Christine was doing 90% of the work and we kept her and after five months she was running the entire operations of the company.
Within a year and a half I had groomed her to replace me when I went on maternity leave and the punch line is Christine had a BA in Fine Arts and seven years waitressing experience. She actually didn’t even know how to use excel when we hired her and yet you know if we had gone by the resume you know no president in their right mind would have ever short-listed her to interview her let alone put the time in to groom her to run the company.
We could have missed a huge opportunity if it wasn’t for the assessment. We used this for two years to hire the rest of our staff. The next hire was a 17 year-old high school student who saved our company a quarter of a million dollars. Literally he would go on to YouTube and teach himself how to do something in half the time it would take us to get a quote back from an outsourced company.
After using this and seeing all these amazing people we decided that we needed to bring this to mass market so just over a year ago, Christine, myself and my VP we started commercializing this full-time. We’ve been working with customers over the last year who has constantly been validating that. They’re hiring people that are three times more productive than their average worker; constantly finding these diamonds in the rough that they normally wouldn’t have found and that they’re saving a lot of time and a lot of costs and ultimately consistently getting top performers by using our assessment in their recruitment process.
Russ: Out of all those customers do you see any trends among them? Are you finding that small customers, large customers, US, Canadian-otherwise? What do you see and who’s latching on to this?
Caitlin: Early adopters-what’s been interesting is that there’s early adopters in all fields. We have helped hire for mechanical engineers that are planning the daily operations of the Mars Land rover on Planet Mars so robotics companies out of California that are looking for not just mechanical engineers but ones that are incredibly entrepreneurial and very out-of-the-box thinkers and so we were able to identify three in a pool of 180 applicants. All the way to publishing companies that are hiring for analysts and sponsorship positions and editor-in-chief positions.
There seems to be you know we’re also helping chain restaurants hire front of staff and bartenders because they’re looking for a particular personality for that and they want to reduce their turnover to large other software service companies that are growing rapidly; that are doubling and tripling in size and you need to hire 400 people within nine months so we tend to find that the thing that these companies have in common is that they’re absolutely committed to best practices when it comes to hiring.
They’re really interested in using science. One of our companies who are full of engineers say they really like the idea that they can engineer their recruitment process. They can use actual data to improve their outcomes. These are companies that are committed to using big data, committed to using science and committed to using technology and aren’t scared about going away from the status quo.
We still use resumes but only on the short-listed candidates. After you’ve seen a short list of top performers that’s when you check resumes to double check for skill sets. You still bring them in to interview but you’re armed with more intelligence than ever before in that interview process so you have to be committed to moving away from the status quo and adapting into something new. The resistance in the industry is that there’s a lot of conservative behavior when it comes to Human Resources but there are across the field a bunch of industries that are trying to be more competitive by adopting innovations like ours.
Russ: I think it’s interesting that you put a number on it which is its going to cost you; it’s a $300,000 mistake. People don’t often think about that about what are all the costs involved in making a mistake. It’s not only that you’ve paid this person over a period time but it’s also the replacement costs of going out and finding that individual-the replacement as well as any other kind of software costs on your business. Did the doctor study that number before he knew that obviously?
Caitlin: There’s a lot of research. The great thing about academia is that they don’t try to reinvent the wheel at every single step. What they do is they go out and find really credible research and build off of that. The assessment is using the big five personality model which is already really well respected and supported by the community-the psychological community but keeps adding innovative twists in terms of how you get the results.
Same thing with the data on the costs of bad hire; there’s a lot of data out there that shows the cost of bad hire. SHRM which is probably the most respected body when it comes to HR has come out with statistics saying that the one bad hire is the equivalent to 90-200% of that person’s base salary. There’s lots of statistics out there and it’s whether or not you want to do it based on that or if you want to talk about the recruitment costs alone-the latest studies are saying that companies spend on average $3,000 per position.
Then you can get into soft costs-if you’re actually talking about the manager’s time of being in those interviews and then the loss opportunity of any damages they could have done or lose of sales. You have to then go through the recruitment process again. I mean there’s a lot of ways to calculate. Whatever you come up with-it’s really, really big.
One of our return-on-investment calculator will calculate for 50 hires in a year using Cream.hr can save a company $1.1 million dollars so that works out to about $22,000 a week. If a company was to use Cream.hr to help them with their hiring of 50 people for the entire year it would cost $25,000 to use Cream.hr for the entire year; unlimited testing. A company would have the return-on-investment in just a little over a week and that’s a 50 times return-on-investment for the entire year. The costs of bad hires and the time wasting and the loss of competing with competitors is just astronomical.
Russ: Tell us about your business model on about how you guys have grown. You’ve got this per hire model right?
Caitlin: Basically psycho-metric testing over the last 20 years has been used on a per test basis and typically at the very end of the hiring process. Often they’ll use it on high level managers, they’ll spend the time going through all the resumes, even maybe do a round or two of interviews and then they would test maybe three candidates and those tests can be very, very costly.
What we’ve done is taken that same level of research but made it so that it’s fake-proof so that lots of applicants take it and we’ve moved it to the beginning of the hiring process. As an applicant applies online they’re actually taking the assessment and employers are seeing the data before they even read a resume. The more people that take the test the more likely they are to find some top performers with the skill sets and the strengths and weaknesses that you’re looking for. We want to encourage as many people taking the assessment as possible so we needed a pricing model that wasn’t per test basis to encourage best practices. The outcome-what the employers benefiting from is that hire. We moved to an unlimited testing, you pay per hire-it ends up being about $500 per hire but it drops based on volume. If a company is hiring 100 people actually works out to be more about $400 per hire.
We create an annual license so sometimes people will start with a few hires at the beginning. Ideally because they’re such a small investment, committing to an annual contract when they pay monthly seems to be what’s working best for our clients.
Russ: Very interesting, what are some of the lessons you’ve learned kind of going into this? What are some of the mistakes and kind of early steps that you took to kind of correct yourself? It sounds like there’s got to be a few things in kind of the initial launch of this where you were like oh I didn’t expect that. What sort of issues did you guys run into and how did you solve them?
Caitlin: I think that the thing that surprised us the most because we were our own customers for two years because we used it ourselves and we used it with a lot of other clients that had consistently given the same feedback that yes the science is accurate that this is actually providing them with better quality hires. I think what surprised us was how difficult it was to get more clients onboard and HR is a very, very conservative mind space and brining something in to the market that disrupts the status quo-the resistance to it and the fear of adopting something new and realizing that even with medium-sized companies it’s a complex sales cycle so you have to get the buy in from HR but they often don’t have the decision making power or the budgets. They’re not necessarily willing to put their neck out there for something they feel is unproven.
The social proof component of making sure that we had the resources available to show look our customers really do believe in this and I want you to hear from them directly so we’ve made sure that we have just under a dozen testimonial videos from our clients talking about the real savings and the real benefits that they’ve received through this. That’s realizing that we needed to put that front and center and so those materials are being launched in the next week on our new website that will be launching.
Really making sure that our customers, our current customers are speaking to our future customers. Realizing that there’s a lot of misinformation out there; a lot of people don’t recognize how ineffective resumes are that whether or not you went to Harvard or you went to the University of Waterloo-it’s not going to tell you if somebody’s going to be more productive than the other. If somebody worked for a competing company that doesn’t mean that they’re actually going to be successful for you. If somebody was great in Sales that doesn’t necessarily mean they’re going to be a good Sales Manager so the information on a resume is incredibly ineffective and so having to educate people and change their minds that the materials that they’re using to base their decisions are flawed, I didn’t expect as much resistance in the market and as much fear of science and fear of innovation that we’ve experienced and so just understanding that we have to really try to-instead of disrupt the market but speak to what people already know and try to show how we fit that seamlessly into their existing process and also making sure that when we do talk to companies we get to a Senior level of decision maker as possible.
Sometimes that’s not even HR, sometimes that’s a Chief Operating Officer, sometimes that’s directly a CEO, sometimes that’s even a CFO and realizing that they often don’t want to start the conversation if they think it’s HR so it’s more a bit of marketing. The biggest lesson we’ve learned is that it’s not the product we have to focus on because it works–it’s the marketing and figuring out that code of how do we crack through and get people to listen and be like I need to have this and understand how valuable it is.
Russ: In a lot of spaces you’re talking about that kind of consultative sale and going up into the upper chains of management to kind of get that executive sponsorship and get pushed down into the HR team so that they’re using it. Are you going after that in a direct sales model or strictly through marketing or with partners? How are you looking to get into that kind of C suite?
Caitlin: There’s been-we’ve kind of been trying a lot of different things. One we do direct sales, two we have a big inbound marketing contact creation push so our blog is syndicated by Business Insider. About once a week-sometimes twice a week so that brings us quite a bit of readership and traffic. We’ve been trying to do the inbound marketing, social media and things like that. We’ve also been doing the direct sales.
A lot of businesses come in through referrals, but then we also started to engage with some partnerships of other software in the HR space as complimentary as well as resellers. Recruiting firms-some recruiting firms don’t want to use this unless it’s coming directly from their clients. Other recruiting firms are recognizing that we can save them time and increase the quality of the people that they’re delivering.
We’re talking about kind of a reseller model through that and then there’s very large companies that already service the enterprise clients and so building our technology into their suite of offerings is something that we’ll be focusing on over the summer is building into an existing suite of products being offered through a company that already deals with the fortune 2000.
Russ: You’re obviously a busy CEO and my guess is your productivity levels are pretty high-in the hour that you get off a week or a month, what are you doing for fun and how do you kind of wind down?
Caitlin: We’re starting our family-so first of all my husband is my co-founder. We already worked together three years before starting this company and we function better working together so we can cheat a little bit in that we see each other all the time but when we started this company I had just given birth to our now two year-old.
When we started working full-time on this our son was seven months old and he just turned two 2 weeks ago so when we’re not working it’s about trying to give some family time to our two year-old and now he’s just hit the terrible twos so realizing that it’s going to take even more time and attention but we’re really lucky that we’ve had the support of our families so he hasn’t had to suffer too much.
If he doesn’t see us as much as I’d like he at least is surrounded by a great support system. That’s pretty much what we do when we have some down time. If he’s asleep, I love TV and movies. There’s something about the alternative reality of being able to escape into cinema and theater and movies and things like that so that’s my personal and we’re also big foodies. We love going out and trying new food or cooking new food at home. On a personal level I think that’s how we recharge and then on a family level it’s about making sure that we’re doing things on the weekend with our son and that he’s getting the interaction with us and the community.
Russ: That’s great; I really appreciate your time Caitlin. This has been Caitlin MacGregor from Cream.hr. You should definitely go out and check out their offering-it’s Cream, C-r-e-a-m.hr-sounds like an interesting tool, sounds like the ROI is there, it’s definitely something that could help our business audience recruit better, get the right people on your bus and make you go faster. Caitlin thank-you very much for joining us and I really appreciate your time.
Caitlin: Thank-you very much. It was great talking to you.