Awards are nice, but your customers are what really matter

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I was recently named to the MSPmentor top 250 Influencers list.   I am very humbled by this honor, and am truly appreciative to MSPMentor for recognizing me for this distinct honor.   This morning I started thinking about what this award means.   Like I mentioned before, it’s really nice to be recognized amongst your peers, and it definitely is another badge of honor that one can wear.  You can definitely use these awards to build credibility with new clients, and just as a general marketing campaign. But that’s really all it is.  What we truly aim for at Simplegrid is striving to be the best at what we do, to deliver the highest quality of service to our clients, to create a challenging yet welcoming atmosphere for our employees, where they can learn and grow, and continue to be thought leaders in the technology industry.   So, while an award can recognize those qualities, the true recognition comes when a client turns around and says “Thank you, you’re doing a great job for us.”

We got a call like that today.   And I wouldn’t trade that call for any award in the world.

Key Takeaways:

  • Aim to be the best at what you do, and the recognition will come
  • Awards are nice, but they are no more than a badge of honor that you can use to grow your brand.
  • Your customer is your highest priority, and having satisfied/grateful customers is the best reward of all.

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Firing employees is never easy, but at times necessary

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Ultimately, as a CEO, your job is to find the best solution to problems that are not easily solvable.  If the problem was easy, it would’ve never made it to your desk.

One of the biggest lessons I’ve learned as CEO is the responsibility of managing employees cannot be taken lightly, and that responsibility has to be taken in context with the responsibility I have to all of our clients, employees and to the wellbeing of the organization.  Recently, we had to terminate a sales employee, who wasn’t performing up to our expectations.   We had recognized early on that he wasn’t going to work out.    He was, however, well liked within the company and gave the impression that he was putting in a lot of effort.   Unfortunately, the results weren’t reflective of his performance.   We were also aware of some difficulty he was having in his personal life.

I deliberated about this for quite some time.  It wasn’t a question of money for me, but more about the impact (both positive and negative) he was having in the organization.  I knew that he represented Simplegrid every time he visited a client, or spoke on the phone with someone, and he was not representing the company positively.   I knew this was having an affect on our reputation, and reputation in an IT consultancy is paramount to it’s success.  At the same time, I was worried about his personal life and how losing a job would further add to his woes.  Lastly, I was worried about how the rest of the team would react to his termination, as he had formed some strong relationships, and people in the company were aware of his predicament. 

Ultimately we decided to terminate the employee.   We considered investing more into him, training him more, or at least waiting until his personal issues subsided.  But none of those solutions were ideal.  We had already invested heavily in his training and were constantly doing whatever we can to help him succeed.  And we don’t know when (or if) his personal issues would subside.  With that said, we didn’t want to just let him go and fend for himself on top of everything that was going on in his life.  We  offered him a generous severance package, and assistance with finding another job. 

We also met with some of this employee’s closest colleagues in the organization to answer any questions they may have.  Surprisingly, most of them agreed with the termination as they also were aware of his poor performance.  Some consultants even were getting upset that this person was working for the firm, as they felt that they were working more effectively than this person and having him continue working for the firm would’ve affected their morale.   Lastly, many of the consultants were appreciative of the assistance we offered this employee after termination and increase their confidence in the management team that we would do the right thing.

 

Key Takeaways

  • Firing people is never fun, but at times necessary.
  • Firing employees is more than just about dollars and cents and being aware of that is notices by those around you.
  • As a CEO, you have responsibility to both your employees on an individual basis, but also to the employees as an organization, and must factor in both when making personnel decisions.
  • Your staff is very aware of the performance (or lack thereof) of their peers, and how those employees are treated affect the morale of your other employees.

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Lessons from my first failed startup

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Before I started Simplegrid, I had actually started another IT consulting firm, which completely failed. This firm was started with 7 friends who were all interested in working together. We realized very quickly that this model wasn’t going to work. All of us had overlapping skills sets, and didn’t have the complimentary skillsets that are needed for a business to succeed. For example, we were all technologists, but no one had sales or administrative experience.

Beyond that, we were suffering from too many cooks in the kitchen syndrome, so all seven of us had to agree in order to make a decision to be finalized. It would take us weeks to come to a decision on something as simple as to where to open our bank account. Lastly, since we were all friends, no one wanted to step on each other’s toes, and no one wanted to do the more mundane work that is needed in the beginning stages of a business.

I was very serious about starting a IT consulting firm, and saw it as a big part of my career, so I had to make a tough decision and let my friends know that I wouldn’t be working with them, but rather starting my own firm.  It was a tough time as many feelings were hurt.  I learned a lot of lessons from this one failure, that I think can be applied to all businesses:

  • Never start a company with more than 2 or 3 (max) co-founders.   If you do have co-founders, make sure that each of you have complementary skill sets.  For example, if one of you is the technical one, the other should have a strong skill set in sales.
  • Try not to go into business with your friends.   Unless you can separate out the business aspect of your lives, from the pleasure aspect of your lives (and believe me, not many people can), you’re looking for trouble as issues in your business will spill over into your personal lives.  Do you really want to involve your other friends, or even your families in your business issues?  Do you want to go to a party and be upset because your partner isn’t pulling his weight, but you can’t tell him that cause he’s your friend?  It’s a really bad idea.
  • Fail fast.  You’ll know when the writing’s on the wall.  In my situation, it was obvious that this firm wasn’t going anywhere.  It’s always better to cut your losses and try again.

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Entrepreneurship and MBA programs

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I’ve been fortunate enough to attend two world class educational institutions – first as part of the Executive Masters in Technology Management program in the University Of Pennsylvania’s Engineering School, which was co-sponsored by the Wharton School, and now as a MBA candidate with the Kellogg School of Management.   I’m also very fortunate to be one of the few people in both of my cohorts to be an active entrepreneur.   While I found my time in both programs to be very valuable – something I wouldn’t trade for anything, I do have one piece of advice to everyone who wants to be an entrepreneur:

Don’t go to business school to become an entrepreneur.

Don’t get me wrong.  As I said before, I loved my time in both those programs,  especially the time I spent at Kellogg.  I’ll will remember the time spent and education received at Kellogg as a major turning point in my life.   My time at Kellogg and Wharton really showed me how to manage a business.  It changed the way I think.  I know look at business problems from a much more strategic point of view, and the thought of shareholder value constantly permeates my thinking.  I’ve been well equipped to understand how the major functions of a business – finance/accounting, economics, operations, marketing, leadership, all intertwine in a symphony that must be perfectly balanced for true success.  I have a new found respect for (most) of the Fortune 500 CEO’s who have to make critical decisions based on imperfect data.   And the global of network of alumni that I now have access to through both schools is top notch.

But I didn’t learn how to raise a seed round.  No one taught us how to build a top notch product, or how to disrupt stagnant markets with innovative solutions.  There were no mentors there that help guide me through the growing pains that every startup endures.  No one to teach me how to recruit, or when to recruit or when to not hire people because I really don’t need them.  I wouldn’t find a CTO at business school – everyone is like minded – they’re all business folk!  While there were many people who wanted to be entrepreneurs, no one was willing to take the risk of being one.  And no one told me that all the time I would spend studying for my MBA would be time lost in building a kick ass product.

The reality is that all the topics that you need learn to manage a business – finance/accounting, marketing – and things you need to learn when starting a technology based business – UX design,  Product Management and Back End development can be found online such as Khan Academy or in a more formal in person class like those taught at General Assembly.    You don’t need to spend $150,000+ and countless hours to gain that knowledge.  Hell, that $150,000 and those countless hours could be used to build your first prototype without having to raise a seed round instead!

Sure, both Kellogg and Wharton are trying to tap into the new era of entrepreneurs we’re experiencing now.   Wharton even has a business plan competition, startup clubs, and an incubator.  Kellogg unfortunately is a bit behind in this, but are trying to catch up.  Regardless, like I mentioned before, you’ll be around like minded people – essentially forming an echo chamber, and echo chambers lead to failure.

If you want to build a strong network of contacts, really understand business principles, and eventually manage larger organizations, then an MBA may be the right thing for you to do.  But if you want to become an entrepreneur, trust me.  Build your company first.  The MBA can come later when you need to scale your company into that multi-billion dollar business.  It’s not going to help you launch it.

Key Takeaways

  • An MBA program is not well suited for those trying to become Entrepreneurs
  • An MBA program can help you scale a business, it won’t help you launch one.
  • The knowledge that you need to start a business is easily available in other mediums, use the saved MBA tuition money and time not studying to build your product.

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Technology: Outsourcing vs. Keeping it“in house”

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Deciding between outsourcing your IT organization vs. keeping it in house is not as straightforward as deciding which method will save a company the most money.  It is a very unique decision to each organization that revolves around the the culture of the organization itself.   I recently performed a technology audit for a firm to help them determine whether they should outsource their IT organization (infrastructure and support personnel), or continue supporting it “in house”.     Here are some things to consider when deciding whether to outsource or insource:

  • Size of Firm – We always believe with starting with a hypothesis and then gathering data to either support or refute our hypothesis.  In this case, we looked at what our client’s peer firms of similar size were doing.  Some questions we asked to help us form our hypothesis:
    • Were this company’s peers outsourcing?
    • If so, were they successful? 
    • Did these companies outsource their entire technology organization or just a portion of it?

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Based on this data, we formed a hypothesis that our client should outsource their entire technology organization.

Next we moved to the data gathering stage of our engagement.  Our goal here was speak to various stakeholders of the organization to get their views on the business and the role IT plays within the enterprise.  We also reviewed the current state of the technology infrastructure to determine how proprietary the data and applications were, and how current the state of the technology infrastructure was:

  • Feedback from key stakeholders in the business  – We conducted interviews with both business executives, IT executives and end users.  These interviews focused on the following areas:
    • Business executives – our interviews focused on the current strategy of the business.  Some questions that were asked:
      • Is the firm planning to expand?    Is the expansion going to be national or international?  
      • Are there any major initiatives the firm is undertaking that will require heavy involved from the technology organization?
      • Is the firm trying to cut costs?  
    • IT executives  – The interview with the IT executives focused on how the business used technology.   Some questions that were asked:
      •   Is IT in the organization highly specialized? 
      • Are there many home grown apps that are critical to the organization that cannot be supported outside of the organization?  
      • How complex is the IT environment?  
      • How large is the IT budget and how efficiently is the budget used?  
    • End Users  – The interviews with the end users focused on how they leverage IT.  Some questions that were asked:
      • Are users very demanding and require personal attention?  
      • Are their IT systems stable?  
      • What are their opinions of the current state of IT and the support they receive?

We then performed the technical audit of their current technology infrastructure.  Some key areas we focused on were:

  • IT infrastructure 
    • Is the technology infrastructure up to date?   
    • How well documented are the processes surrounding  mission critical applications?  How often are they updated and by whom?
    • When are hardware warranties expiring?  
    • How often are software upgrades performed?

 

Summary of Results – Here is a summary of our findings from this audit:

  • Our client was not planning on expanding – in fact they had a strong directive to cut costs as much as possible.
  • Although there were some applications that were home grown, the vast majority of their infrastructure was running on well known systems (i.e. Microsoft, Oracle, etc.)
  • The end user was pretty self sufficient when it came to their IT needs and most were able to work without the assistance from the technology organization.
  • The technology infrastructure was a bit outdated.  The firm typically does not upgrade their infrastructure unless the hardware is out of warranty or of software has reached end of support and/or end of life.

Based on those findings, we recommended that the firm outsource their entire technology organization (infrastructure and personnel).

The information that I’ve listed here is just a small subset of the data gathering and analysis we performed.   My point for providing this information is to discourage companies from making this type of decision based solely on financials.  In fact, a common  misconception of outsourcing is that it ultimately saves the firm money.   We have found this to not be completely accurate.   Instead, we have found that firms who only outsource to save money, ultimately bring their IT support back in house. This is because they did not consider other factors that we mentioned above, which led to the transition being quite disastrous.    So, while the firm may have saved money in the interim the cost of transitioning to an outsourced environment and transitioning back to in-house usually wipe out those cost savings.  In these scenarios, the saying “you get what you pay for” holds very true.

 

Key Takeaways:

  • IT outsourcing is a decision that is unique to every firm.
  • Areas besides cost should be considered when determining if a firm should outsource.
  • Firms that outsource solely because of cost savings usually wind up bringing IT back in house.

Hybrid Computing and it’s impact on Enterprises

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I believe the most impactful technology for all industries is cloud computing – specifically hybrid computing. There has been a general trend to hosting data and infrastructure in Co-Location facilities for quite some time. This trend began out of concern of separating a business’s two most critical assets – its data and its people. Today, cloud computing, along with Software as a Service (SaaS) and Platform as a Service (PaaS) will ultimately drive business growth.

Cloud computing is a bit of a misnomer – the Internet can be considered one gigantic cloud of computers. For the purposes of businesses however, I define cloud computing in the private sense – the ability of businesses to store their IT systems and their data in a 3rd party location that is still managed by firm personnel. These systems, for the most part are still under the control of the IT departments, notwithstanding any issues that may occur in the Co-Location facility itself. There is also the public cloud where data is being stored in a 3rd party location, and the business does not own or directly manage the infrastructure. An example of a public cloud application would be Google Mail for Business, or Office 365. A hybrid cloud is a system in which a business utilizes both a private and a public cloud and shares data between the two. Software as a Service and Platform as a Service are service delivery models that allow businesses to scale up (or down) certain software or platforms on a demand basis.

The major industry issue this will solve is that it will allow businesses to grow quickly. Today, companies have to predict growth rates of their firm, and usage rates of their mission critical applications. Poor planning of these rates can lead to either underestimating the amount IT resources need to support this growth, in which case the business either has to scramble to catch up, or it leads to wasted resources if the business overestimates its growth and usage rates. By introducing SaaS/PaaS into their existing infrastructure, the firm can scale up or down, on demand, and also share their data within the hybrid cloud. This will allow for greater efficiency for the business and ultimately drive growth for the business as they will no longer have to worry about having too much or too little IT resources available to them.

It’s not all positive when it comes to cloud computing, especially with the public cloud.   Once you outsource some part of your infrastructure to a 3rd party, you essentially lose control over how those services are managed.  For example, you cannot control when Microsoft or Google performs maintenance on their systems.  Your firm may have a major proposal due via email at a certain time, and you cannot ask to have that time changed.  With that said. these companies do give plenty of warning when they are performing maintenance and do tell you which services will be unavailable during that downtime.

Of bigger concern are security breaches that may occur on these systems.  Since these services are more public, they is a greater likelihood they they will suffer from a cyber attach, which may either cause downtime, or worse stolen data.   There have been plenty of stories recently of data breaches and downtime due to DoS attacks.   These firms do take great measures to protect their clients data, but it always seems that hackers are one step ahead of them.

Overall, I think the benefit and cost efficiency of using cloud computing systems far outweigh the cons.  We will see firms shift more to cloud based systems, and I expect there to be greater innovation in this area.

 

Key Takeaways:

  • There are two types of “clouds” – the public cloud and the private cloud.
  • Cloud computing allows businesses to scale quickly.
  • Cloud computing systems are more prone to security attacks and stolen data.
  • The pros of cloud computing outweighs the cons.

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Getting Started

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They say the hardest part is starting.   “They” are definitely right about that.  I’ve been thinking about starting a blog for quite some time now, but always found a good excuse to not start.  I always told myself that I wouldn’t have a good topic to write about, or that no one will really want to hear what I have to say.  These may be true, but I finally came to the realization that I won’t know that for sure until I actually start.

A little about me – I’m currently a partner at a Technology Consulting firm called Simplegrid Technology, Inc..   I’m also pursuing my Executive Master’s in Technology Management at the Penn School of Engineering, Co-Sponsored by the Wharton School.  I also have a 2 yr. old son, and are expecting our second child very soon.

I hope to share with you my thoughts/experiences on running my business, pursuing an advanced degree, and other projects that I may be working on.  Now, I realize that there are folks out there have much more valuable insight that I can offer, but I hope to reach those of you out there that may be in a similar situation, that may be learning as they go and may be able to put yourselves in my shoes to see what I did right… and what I did wrong.

I’ll also put some lessons as a summary at the bottom of my posts, to help condense what the major take away is from each post.

It’ll be interesting to look back in a few years to see how this plays out.  I think it’s a good experiment.

Lessons

  • The first step is the always the hardest.
  • You’ll never know what your capable of until you try.
  • Be concise.  You don’t have to write a book for every blog post… a few paragraphs will do.
  • Don’t be afraid of failure – instead take every situation you’re in as a learning exercise and improve on it.

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