How Phil Libin is building a 100-year start-up at Evernote Corp.

Having employees who tolerate stupidity is literally Phil Libin’s worst nightmare.

“I’ll wake up from a dream in which somewhere, someone at Evernote is working on something right now and they don’t understand why they are doing it — they think it’s stupid. ‘It doesn’t make any sense. It’s dumb. I’m just doing it because somebody told me,’” says Libin, CEO of Evernote Corp., the company responsible for popular Evernote and Skitch applications.

“As soon as you have someone who is doing some work and they don’t understand why they are doing it, then you’re not a start-up anymore. You’re something worse.”

Considering the noteworthy changes that Evernote has gone through over the last two years, it’s no surprise that culture is ingrained in Libin’s mind. Since launching the Evernote product public in 2008, Evernote’s apps have gained fast traction with users who rely on them to organize personal data and information on mobile devices and platforms.

Since 2010, the company has tripled revenue annually while increasing head count from 30 to 250 employees. It also plans to reach a level of 500 employees by the end of 2013.

Taking notes yet?

While Evernote’s success is undeniable, Libin’s permanent challenge is creating what he calls a “100-year start-up” — i.e., maintaining the entrepreneurial culture that makes Evernote great while continuing to grow.

“I want everyone at Evernote, no matter how big we get, to understand why it is that they’re doing something and to see the impact of their work,” Libin says. “If we can maintain that, then we have a good shot of scaling the company in the future.”

Here’s how Libin keeps the entrepreneurial spirit alive at Evernote.

Eliminate obstacles

Like many Silicon Valley companies, Evernote offers employees a number of unique perks, including unlimited vacation time and catered lunches. Yet Libin knows enhancing employee productivity isn’t just about add-ons; it’s about removing the obstacles that inhibit people’s success.

“All of our benefits and our office life are structured around this idea that people who are here want to do excellent work, and it’s our job to eliminate any obstacles that get in the way of that,” Libin says. “Whenever we find things that impede people’s natural desire to be productive, we ask if we can eliminate that.”

Libin and his leadership team actively look for ways to make people’s jobs easier on a day-to-day basis, especially when it involves enhancing productivity. It’s why Libin played an active role in designing the company’s new 90,000-square-foot Redwood City, Calif. headquarters, which employees moved into last summer to incorporate features that improve workflow, such as an open work plan to facilitate open communication.

“It’s the first time that we’ve been in a space that we’ve actually designed,” Libin says. “Our previous two offices have been little start-up things — whatever we could afford at the time. This is the first time we’ve had a chance to think about our surroundings a little bit.

“There are a lot of small things. A lot of times you need something from IT. You need a power cord or an adapter or a keyboard or a mouse or a network cable … so you have to track down an IT person and ask them for it, and then they go into the supply closet and get it. Now you’ve tied up two people: the person who wants it and the IT person. It’s a small waste of time, but it’s a waste of time.”

Evernote solved this problem by stocking a vending machine in the cafeteria full of equipment such as headsets, power cords, mics and keyboards, which employees can freely access by swiping a card.

“You decide when you want something, you can go down and get it, but now it takes one person two minutes to do what two people took 20 minutes to do,” Libin says. “So there’s a lot of stuff like that, where it’s something that’s not a huge thing in itself, but it adds up.”

Ideas to improve a culture don’t need to be radical to make an impact on productivity. Removing a small obstacle can actually have huge benefits, especially if it affects a lot of people.

For example, Evernote’s open work plan makes talking on the phone the biggest source of noise for employees throughout the office. So instead of having everyone work around that, Libin and his team decided to do away with desk phones entirely. If someone needs to make a call, they are encouraged to use one of the company’s numerous conference rooms or meeting spaces.

“We find an obstacle and we try to get rid of it,” Libin says. “You can find 100 things like this and it adds up to a culture where people feel like they are trusted and respected. We don’t have to explain to people that you’re only allowed to take one mouse every six months. We don’t have a policy. Take as many as you want.”

Bring on the best

Evernote isn’t Libin’s first time leading a start-up business. Before founding the company in 2007, his career as a successful engineer led him to serve as president and CEO of the software companies Corestreet Ltd. and Engine 5, respectively. In both cases, Libin found that his programming background played a direct role in his leadership style — and not in a good way.

“At my first company, I had this weird idea about people who work for me,” he says. “I thought, well, I can do their job better than they can, but I’m too important. I don’t have enough time.

“So I’d walk around and look at some programmer writing database code, and I would think to myself, I’m a programmer, too. I could write that better than he could, but I don’t have time so we can let him do it. And I’d look at a sales guy working and I’d think, well I could sell the product better, but I don’t have time so let him do it. I’d listen to the receptionist and I would think my phone voice is so much nicer than hers. But I don’t have time to answer the phone so let her do it.”

What Libin realized is that this superior mentality is self-fulfilling, breeding a culture where leaders are always second-guessing and micromanaging their people and where talented people don’t want to work. But if you’re trying to build a 100-year company, this kind of thinking just won’t fly.

“A lot of people instinctively are afraid of hiring people better than them,” Libin says. “So they tend to surround themselves with people who are mediocre. That’s the thing that kills a lot of companies.”

Finding and keeping the right is critical in fulfilling the vision of a 100-year start-up, which is why Libin encourages his direct reports and managers to follow the “hire better than you” philosophy for any position,

“I have to hire people who are so good that they can wind up running the company, and that’s true all the way down the ranks,” Libin says.

“Really embracing that philosophy is the only way I think you can scale and manage and really reduce stress, because anything I’m worried about, I know that there’s a person who’s much smarter than I am in that function, who’s also worried about it but actually in charge of dealing with it.”

Stay connected

Evernote may have a start-up culture, but the company has also come a long way from its start-up roots. In addition to its employees on five floors of its Redwood City office, Libin now leads an organization with offices in Austin, Texas, to Tokyo, Zurich, Moscow and Beijing.

“As we grow to be a bigger company, we’re not 10 nerds anymore,” Libin says. “We have designers. We have marketing people. We have people from all sorts of demographics. We are really broadened, and that broadens the products that we want to work on.”

It also broadens the scope of any given project, which can create a disconnect between a company’s departments, offices or teams.

“Very often in companies, and especially a big company, if you ask an average employee at the company, they kind of feel, ‘Well, I’m doing a job, the five or 10 people that I’m working with and I understand what they’re doing — they’re doing a good job,’” Libin says. “‘But those other guys two floors above me, I have no idea what they do. They’re probably just dumb.’”

One way that Evernote avoids communication and innovation breakdown is through cross-training. Taking a lesson from a friend who is a submarine officer, Libin implemented Evernote’s Officer Training Program, which mimics the idea of officers who must be trained in many different roles.

Each week, employees who sign up for the program are assigned to several random meetings outside of their department where they are encouraged to act as full participants. While the company is currently tweaking the program for simpler execution, the idea is that both the trainee and the group will benefit from the exchange.

“So if you are in IT and you sit in a marketing meeting, you see that the marketing guys do a lot of work, and they have difficult questions and problems,” he says. “It also works the other way, having a person in the room who hasn’t mastered the jargon. You wind up having to speak differently. You wind up having to think about things that you may not have thought about if you’ve been doing this job for 10 years.”

Other ways that Evernote promotes connectivity are using remote-controlled Anybots for telecommunication and video walls and “windows” to connect Evernote’s domestic and international offices. Set up near the coffee machines, the video walls are synced up to mirror Evernote’s different offices at the same time of day.

“When it’s 9 a.m. here and you’re getting coffee, you’re going to see 9 a.m. in Tokyo as somebody is getting coffee,” Libin says. “The point is you can connect with people. You can see who is there. You can see what they are wearing. You can have this ambient feeling because you know that you’re not the only person there. There are people all over the world working at Evernote that are also getting coffee.”

Experimenting with cultural perks, programs and policies should be an ongoing process, and leaders need to be willing to try and fail.

“The basic idea is we want people to be able to connect in as many different ways as possible,” he says. “When I’m traveling out of the office, and I connect to the Anybots, and I drive it around, and point the laser pointer at people, and yell at them to get back to work, everyone loves it.

“There’s no silver bullet. You say the core value is communication, and then you just find ways to make it a really magical experience.” ●

How to reach: Evernote Corp.,


The Libin file

Phil Libin

Born: St. Petersburg, Russia
Education: Boston University

Why there’s never been a better time to be in business: I don’t think it’s ever been a better time to have a company, to be in business. This is the best time in the history of the world actually to be trying to build something because it’s much of a meritocracy than it’s ever been. If you build something great and you really focus on building something great then you get massive leverage in everything else because of app stores, smartphones and social media. If you make something great, then everyone is going to know about it. And everyone is going to be able to get it. … All I really want is to make great stuff. And that’s what all the people who work for me want, and it’s enough. It’s enough now to just make great stuff.

Why stress helps: As a CEO, it’s good to have a balanced diet of stress. You stress out about the product. You stress out about the finances. You stress out about improving about the office space. It’s good to have multiple completely different things to worry about and sort of balance those things.

Libin’s best business mantra: I think the most important phrase is ‘simple is hard.’ That says a lot of stuff. In all ways it’s better to be simple than complicated, in terms of your product, your benefits, everything you do. You’re much better off being simple; and it’s the hardest thing to do. Always strive for simplicity, but also realize that it’s far harder to make something simple than to make something complicated.


How to use technology trends to foster business growth

Jerry Justice, MCSA, MCSE, director of internal technology, SS&G

“We all know technology changes very rapidly. We also know that keeping your organization in step with these changes is directly tied to your business’ success,” says Jerry Justice, MCSA, MCSE, director of internal technology at SS&G.

For example, U.S. online shoppers are projected to spend $327 billion in 2016, up 45 percent from 2012, according to Forrester Research Inc. At the same time, enterprise tablet adoption is expected to grow almost 50 percent per year, according to Digital Ad Agency Vertic.

Smart Business spoke with Justice about the top technology trends — and how to maintain your sanity while working at technology’s pace — as your company heads into 2013.

What are some top trends for businesses?

Consumerization takes success of technology in the consumer world — i.e., iPad, Google Apps, Facebook — and applies that model, or perhaps product, in business. There is real value in understanding how consumerization affects your business and clients, as people want to be provided information seamlessly. Two examples are leveraging YouTube to deliver business and training content, which has roots in the consumer world, and providing seamless mobile access to your website from a client’s smartphone. Keep in mind, consumer success doesn’t always guarantee success in the business environment due to additional variables such as scope, scale, compliance, security, costs, benefits, etc.

Cloud computing has become a transitioning force, driving new value points like scalability, elasticity and on-demand resourcing. This paradigm shift takes time and vendor/consumer adaptations. Not all cloud services are created equal or deliver the same value/features. You still must analyze costs, benefits and how it fits your targets. Technology delivery continues to transition to a more cloud-centric model, allowing technology to shift from ‘keeping the lights on’ to innovation targets, for instance, from simply accessing your checking account and storing personal files on Dropbox to fully hosted email and file-sharing services.

With mobile/social convergence, there is a demand for real-time access to information across a variety of devices and platforms. This continues to blur the lines between social, personal, business and technology, as technology evolves to allow you to do more with your time. For example, the Windows Surface device is a blend of a tablet and PC that converges all contacts in one place — LinkedIn, Twitter, Facebook, email, etc. In business, this provides timely, relevant information about the business ecosystem.

So, how can your business model address technology’s rapid change?

There are number of steps to follow when implementing new technology:

• Create an atmosphere of change; set an expectation that things should evolve over time, so change becomes the norm.

• Keep open, ongoing communication, the key to success, or failure awareness. Leaders should work together, meet often, be honest,and discuss challenges or roadblocks.

• Make projects change-oriented by focusing on successful steps and being prepared to change course several times.

• Leverage area IT experts who can enhance your technology delivery.

• Train adaptively, contextually in smaller groups, based on job function. This allows focus on specific product features.

• Consider trends/hype as barometers and inquiry points, not as targets.

• Context is everything. Learn why something didn’t work, who actually did the work, what happens ‘behind the scenes’ or when the process was last reviewed.

• Process change, communication gaps or cultural shifts could be challenging the technology implementation. Often, the technology delivery is the easy part.

• Technology delivery is about evolution. Look at paths for six months, 12 months, 18 months and 24 months for products/services and then review how they intersect with each other and emerging trends. Many technologies cannot stand on their own, i.e., SAN storage, but provide huge cost/benefits when combined. You cannot just look at this product costs X dollars.

• Have patience, as technology is complex and change takes time. When things appear challenging, it’s probably a good sign.

Jerry Justice, MCSA, MCSE, is director of internal technology at SS&G. Reach him at (330) 668-9696 or [email protected]

Insights Accounting & Consulting is brought to you by SS&G

How to use SIP to change your phone service quickly and cost-effectively

Anton Loon, Director of Enterprise Sales, PowerNet Global

If your business is looking for a better way to communicate, Session Initiation Protocol (SIP) may be the answer. SIP, a signaling protocol, can improve voice and video over Internet Protocol, video conferencing and file transfers. And best of all, it can spell substantial savings for a business compared to traditional phone lines, says Anton Loon, director of enterprise sales at PowerNet Global.

“When a company uses SIP technology instead of traditional phone lines, it can move much more quickly and at a lower cost,” Loon says. “SIP solutions are available for businesses of all sizes, from a small company that needs only one line with local and long distance for about $20 per month, all the way to corporations that have large call centers that operate 24/7.”

Smart Business spoke with Loon about how companies might benefit from implementing a SIP solution.

What is the primary difference between a SIP solution and traditional call routing?

A traditional time-division multiplexing (TDM) system uses physical switches to route calls. SIP uses IP routing, which provides a company’s employees with a much easier way to connect with each other, as well as the outside world.

SIP is not a new technology, so why have companies only recently begun to adopt it? 

In 1994, IT managers knew that ‘AT&T worked’ in the telecom industry. If a business switched to another company and there were mistakes as a result, that IT manager’s head was on the line.

It’s been the same with SIP over the last few years. IT directors and managers have been leery about making the switch to this technology because, as with most things in life, change is scary. However, the technology has now progressed to the point that the cost savings are just too good for a business to pass up.

How can SIP improve a corporation’s flexibility and efficiency?

In terms of flexibility, a business can have the service up and running within 24 hours of requesting it. For example, a construction company can add trailers to various job sites and have phone service at those sites within a day.

The same holds true if a business moves to a new location. With a traditional system, you would typically have to wait 30 to 45 days for the new phone lines to be operational.

With a SIP solution, you can move around and operate anywhere in the world. SIP also provides flexibility for call center operations, because you can launch a new operation within days. For businesses like telemarketing centers, this means you can start selling more quickly.

In terms of efficiency, choosing a SIP solution will eliminate the 30- to 45-day waiting period required to implement a TDM system, as well as all the time that is required to coordinate the effort between all parties.

What are the three most important things that companies need to know about SIP technology?

First, that it works. There is no reason to fear this technology.

Second, it’s scalable. This is important because it allows you to start small to test the waters in order to get comfortable with the technology. It also allows you to ramp up for a larger call volume at any given time without having to add equipment to handle the increase. For example, if you want to launch a new outbound calling campaign tomorrow, you can do that. It also goes the other way, in that you can cut back on the number of phone lines servicing your company if business slows down. There’s a misperception that SIP is fraught with quality issues, but that is not the case. In our experience, there are no more service tickets with SIP than there are with traditional TDM systems.

Finally, the technology is here to stay, and it will only get better and more robust as time goes on. Another common misconception about SIP is that it’s the future, but it’s not. It’s here now, and it’s not going anywhere.

How is SIP being used practically in businesses?

A good example is a company in the health care industry. Their patients have to call in to confirm appointments and get verification of their medications. Obviously, this is a critical operation. One company had a TDM system and was dealing with high costs and quality issues. Then it switched to a more cost-effective SIP solution with a redundant platform. Now if it has problems with one of its carriers, it can signal to another platform. In total, it can toggle back and forth among three platforms to avoid outages.

How can a SIP solution help companies better manage remote employees?

Remote employees have become more commonplace today — not just salespeople, but call center employees, as well. SIP solutions improve productivity by enabling remote workers to quickly and easily access the company network.

In addition, sophisticated reporting tools such as hosted PBX solutions are available that can help managers monitor the number of sales calls being made, to whom they are being made, when and at what cost per call.

Anton Loon is director of enterprise sales at PowerNet Global. Reach him at (866) 764-7329.

Insights Technology is brought to you by PowerNet Global

How remote data security can benefit your business

Steve Carter, President and CEO, ii2P

As technology continues to move forward exponentially, end users are flocking to the latest versions of notebooks, tablets, smartphones and other mobile devices.

Against this backdrop, remote data security (RDS) is becoming increasingly important for businesses. Having an appropriate data protection strategy across the board in any organization can help ensure that the company protects its end users, shields its intellectual property and protects its rights.

However, many businesses fail to do so, as convenience tends to trump security, says Steve Carter, president and CEO of ii2P.

“We try to make small and medium-sized businesses aware that it’s a mistake to only focus on convenience,” he says. “Security should never be a subordinate element when transitioning toward remote data platforms.”

Smart Business spoke with Carter about what businesses need to know about RDS to keep their data safe.

What are the challenges associated with RDS?

First, it’s important to understand how the concern of RDS came to be: We, the users, created it. The introduction and proliferation of mobile computing devices put business-centric technology in the hands of an increasingly mobile work force.

In recent years, laptops, notebooks, tablet PCs, iPads, smartphones and other devices have become instruments of the business enterprise. In other words, they became information interchange enablers.

One thing that has remained constant is that data is still the end user’s primary concern. As such, access to and exchange of corporate data — now through remote devices — has surfaced as one of the most pressing needs of businesses.

Safeguarding the transfer of corporate data across remote devices requires controls. However, to an end user, controls mean inconvenience. And inconvenience often translates to, ‘I won’t take the necessary precautions to protecting my data.’

As a result, data is now being transmitted across more open or mobile platforms by users who are sidestepping security in favor of convenience.

Hasn’t technology adapted to address the needs of exchanging corporate data?

Absolutely. In fact, every generation of new mobile technology devices is amazingly more capable of delivering and exchanging data remotely. But that’s not the problem. The problem is that the ability to exchange information is much more effective than our ability to control data security remotely.

Having data secured in a mobile environment is the essential ingredient. It’s not enough just to have it delivered. We are all in support of making data convenient, but it has to be secure, as well. There has to be a balanced strategy.

What is the weakest link with RDS?

In some regards, this is a real paradox.  Remote data access was designed for the end user, but the end user is, without a doubt, the weakest link. Something as simple as password management provides a great example of how end users tend to overlook security measures. Users will write down their passwords, tape them underneath the keyboard, use the same one for everything, or store them in the cloud.

The increase in the loss of information, malware intrusion and identity theft is due to the nature of the end user who is unaware of the importance of secure protection in their environment, and has difficulty seeing the value when technology serves as an inhibitor of their convenience. The bottom line is that end users will always default to convenience over security. It will take a behavior change at the end user level to correct this.

Bring your own device, or BYOD, is becoming more commonplace at businesses. How will this affect RDS?

It’s important to keep a close eye on this development. The market initially said, ‘Mobile devices are opening up the dynamics of enabling global business. There is no need to stay confined in the office any longer. This is more convenient for the user.’

Next, the market said, ‘It’s more effective and efficient to allow end users to pick their own technology platform. So let them bring their own device to work. Just make sure they can access their data. This is more convenient for the user.’ Then the market said, ‘Store your data in the cloud, where it’s easier and faster to access and stockpile. This is more convenient for the user.’

Put this all together and there is an accelerating adoption of every mobile computing technology — each calling for faster remote access to business-critical corporate data — residing in virtual data repositories. And if you ask end users which is more important to them, convenience or security, the answer you’re most likely to receive is convenience.

How should small to medium-sized businesses approach the RDS challenge?

The market is calling for a robust solution that secures the end user from a variety of different functionality levels, from remote identity and access management to a secure, portable computing environment on managed and unmanaged workstations or devices. However, because convenience is trumping security at the end user level, businesses should investigate those products that make it easy for the end user to embrace RDS.

Steve Carter is president and CEO of ii2P. Reach him at (817) 442-9292 or [email protected]

Insights Technology is brought to you by ii2P

How to consider whether a managed print service program will work for you

Bill Nelson, Vice President, Cleveland Sales, Blue Technologies

The average company spends a lot of money on printing, and often it doesn’t realize where those resources are going. By some estimates, approximately 17 percent of all documents printed out are left sitting on printers. The average employee spends about $1,000 per year on document output. And many organizations spend 1 to 3 percent of their annual revenue on imaging technology but don’t even know how many printers they actually own.

By failing to manage print output, companies are unable to identify what they are spending and where they could be saving on costs. Additionally, if IT departments are spending too much time on tasks such as replacing cartridges or fixing printers, it is not an efficient use of their time.

A managed print service (MPS) program can help businesses save money they don’t even know they are spending, while increasing flexibility and reducing stress, says Bill Nelson, vice president of Cleveland Sales at Blue Technologies.

“Everyone talks about the cost of an MPS program,” Nelson says. “However, the biggest concern for a company that manages its own printers internally should be the time it takes and the resources required to have all printers running at 100 percent efficiency. That’s time that could be used to run the daily business and focus on company initiatives.”

Smart Business spoke with Nelson about managed print service programs and how they could benefit your company.

What is a managed print service program?

A managed print service program is an end-to-end solution that provides everything a company needs to control output costs. That includes an initial volume and usage assessment, hardware redeployment and/or acquisition, paper use output that includes supplies and service through an ongoing assessment of the contract, and, as needed, optimization. Basically, it manages all of the printing done by your company. With numerous printers, employers may have no idea how many printouts they are printing each month and who has which printer.

What advantages does such a program bring?

If purchasing or the IT department is responsible for monitoring printers, that is time spent away from focusing on core competencies. A managed print service program can reduce IT support requirements by taking over the management of supplying toner and servicing printers.

A managed print service program identifies all costs so expense management is possible and allows for ongoing proactive management to ensure proper utilization of printing devices. For example, if one employee has a top-notch printer but only makes 100 prints per month, it may be worth swapping printers with someone who prints 100 pages per day. A managed print service program also alerts the program provider when supplies are low. When the toner cartridge gets to 10 percent, the print management company is automatically notified and can ship a new one.

What can companies do to prevent employees from printing so much?

With certain software, you can control how employees print. When employees press ‘print,’ the computer will let them know that a document sent to that printer will cost the company X amount, or it could automatically send the document to a lower-cost printer. Just thinking twice might keep an employee from wasteful printing, which helps your company be greener. Some companies automatically default to two-sided copies when possible.

How can businesses evaluate whether a managed print service program is right for them?

A managed print provider will conduct an initial meeting to determine if such a program would be beneficial. It will look at, for example, quantity of the printer fleet, whether your IT staff is getting calls to service printers all the time and if your inventory has toner cartridges for printers the company no longer owns.

A managed print provider will conduct an assessment where data is collected for a trial period. This assessment provides vital information about how your business is currently managing printer output and what is not being managed efficiently, similar to a managed service program for computers. The program provider manages how the ink gets on the paper in terms of cost, service and flexibility.

It’s important to remember that although the program reduces costs over time, for many business owners, it’s more about the convenience of someone else managing the printers. Companies pay their IT staff to improve their ability to meet their core business objectives. A managed print service program frees them up to do just that.

Once you’ve decided to go with a managed print service program, how does the relationship work? 

After the contract is implemented, the provider conducts a walkthrough. All devices are labeled, inventory of current supplies is completed, main users are identified and the account is closely monitored. Then quarterly business reviews are conducted to continually monitor and adjust the contract as needed. Companies must be flexible to change, just as their clients’ business needs change.

By considering a managed print service program, you might find a better way to allocate resources that will help increase efficiency and decrease cost.

Bill Nelson is vice president of Cleveland Sales at Blue Technologies. Reach him at (216) 271-4800, ext. 2242 or [email protected]

Insights Technology is brought to you by Blue Technologies

How Krish Ramakrishnan creates successful companies as an industry “underdog”

Krish Ramakrishnan, co-founder and CEO, Blue Jeans Network Inc.

Krish Ramakrishnan isn’t a clairvoyant. He can’t actually predict the future. Yet as a serial entrepreneur, Ramakrishnan repeatedly succeeds at a feat that eludes some of the largest and well-funded businesses in the world: coming up with business ideas that transform industries.

Ramakrishnan’s most recent company, for example, provides a service that makes videoconferencing interoperable for businesses. So if you’re a Skype user, you can call somebody on Google or Cisco, and so on.

“It’s all about universal connectivity,” says Ramakrishnan, co-founder and CEO of Blue Jeans Network Inc. “If you have an iPhone and you’re only able to call other people on the iPhone, that’s not much use. And that’s what the state of videoconferencing was prior to Blue Jeans.

“All these business models said they wanted people to be attracted to their island without ever having the opportunity to be voted off the island. We made everybody get off the island.”

Seeing islands where others see market share is one of the ways Ramakrishnan creates such in-demand businesses. His previous start-up, Topspin Communications, was acquired by Cisco for $250 million in 2005. Cisco also acquired his first company, Internet Junction.

With nearly $50 million in venture funding, 100 employees and an impressive customer list —including Facebook, Groupon and Foursquare — Blue Jeans is now also on the fast track for growth.

But if Ramakrishnan isn’t a psychic, how has he been right so many times? The answer is, by looking at the obvious. One of chief reasons Blue Jeans is successful is the fact that the concept is actually, quite simple — so simple actually, that when it came out, many companies couldn’t believe there wasn’t already a business like it in the marketplace. So the question then becomes, ‘Why didn’t anyone else see it? And if they didn’t, why did he?’

Smart Business spoke with Ramakrishnan about how he identifies and pursues innovative business opportunities and why you don’t need to be an industry leader to transform an industry.

Q: How did you identify the market opportunity for Blue Jeans?

KR: I always look for trend lines in technology rather than headlines in technology. The headlines in technology are cloud computing, all of those things. But if you start a company based on the headlines, you’re shooting behind because everything is already designed. What you want to do is look at where all of these technology trends are going, and at the conversion of a couple of these trends, there might be an opportunity, a pain point, two or three years down the road that you need to solve for a customer.

Three years ago, video was in the headlines all the time because HDTV had come in. So I looked at one trend line as video was getting huge adoption. The second trend line I looked at was homes are getting broadband adoption, and in a big way. And independent of this, I was looking at demographics. There were lots of young people coming into the workforce.

So when you think about these things and say: If these trend lines intersect — they are not currently connected in any way — you’ve got the young workforce, broadband adoption and high-definition TV. If they intersect, what kinds of things could you design in the marketplace that could take advantage of these trend lines?

And I said, ‘Younger people are used to being on video. They probably want to use videoconferencing. If there’s more broadband available, they can do video from their home. And they want to be able to experience HD.’

Q: So you tapped into the idea of videoconferencing. But how did you approach it differently than companies already in the market?

KR: Videoconferencing is not used well in the workforce today, even though it’s been around. It’s very hard to use. And I said, ‘How can we make it pervasive?’ That was the question based on the trend lines. But that in and of itself doesn’t give you an opportunity. That just gives you a target to shoot at.

Then you have to figure out OK, videoconferencing. What are we going to do that’s something unique? When we looked at why everybody isn’t using videoconferencing, we found out people aren’t using it because it lacked ease of use, it lacked interoperability, and it was expensive. We said, ‘If we can solve these three things, we would have a big hit in our hands.’ And therein lies the hard work. … You can’t really solve one, because it may not be a big deal. It may be a ‘me too’ product. You need to solve all three issues to transform the industry.

Q: Once you solved those problems, how did you know your service would resonate with the marketplace?

KR: You need to get your potential customers to give you some help. It also helps — and this is true of Blue Jeans — to think like an outsider. The reason we’re successful, and this is something unique, is that we have no experience in videoconferencing.

In fact, that is the hallmark of our success. Intentionally, we did not hire anybody from the videoconferencing space at first. The first 10 employees were not from that space because we wanted to bring an outsider’s perspective.

What actually surprised us was the number one question that people asked us is, ‘What took you so long?’ And the flip side of the question was, ‘What you guys are doing is so obvious; why hasn’t anybody else done this?’ This directly relates to another one of our favorite axioms we use in our company. Einstein said you cannot solve problems with the same thinking that created it. The videoconferencing industry always saw the problem one way. That thinking is not going to help them break out of it.

So lesson No. 2 for me — and this is a piece of advice I give everybody — is don’t be afraid to go into new industries where you don’t have the actual expertise in the industry. If you have the drive and knowledge, you can get the expertise at the relevant time. But as an outsider, you actually bring a lot to the table to solving an industry’s problem.

Q: What are the keys to succeeding as an industry outsider?

KR: You need to understand from a business perspective what some of the pitfalls are in that industry. For instance, in the videoconferencing space, most of the buying was done by IT departments. Most of the scheduling and the conferencing were done by IT departments. So you need to understand how the dynamic of that particular industry works in order to design something that can be used by everybody. You need to talk to enough people, and of course, talk to industry incumbents and get their thoughts — not necessarily their advice. When you talk to them, they’re going to validate your thought process.

Q: How has your previous business experience helped you to grow Blue Jeans?

KR: When you start a company, you are a nobody, and you have to evolve into a somebody by building credibility. So the first rule of thumb is in order to build that larger-than-life image of yourself, of your company; you have to associate with successful people that are backing you.

This could be your advisory board. It could be other entrepreneurs that have been successful — so that when people come to your website and say, ‘Oh, Blue Jeans. Who is that?’ they look at the people who are backing you and the advisers who are advising you. Then they get that perception that this company must be doing something very interesting. … That goes a long way in building an image of the company.

The second half that’s always helped me is the fact that you only know about half of the problem. You don’t know exactly whether once you finish this product whether it’s going to take off in the market.

You need to have a very flexible attitude, even in the implementation in terms of the technology and architecture, so that you can change as you develop the product. You should be willing to change based on your business plan, your product idea, the final product and how you go to market.

The third thing is to be able to make decisions with imperfect data. If you wait for all the data to make a decision, your decision will be stale, and it will be too late. You need to be comfortable making decisions with imperfect data, and then have the flexibility to modify once you go.

Q: How did you build flexibility into the Blue Jeans model?

KR: The entire Blue Jeans business model was built on the idea that we build this product, we put it on the Web, and people buy it based on credit card transactions. If you like Blue Jeans’ service, you get your credit out and you buy Blue Jeans. Lo and behold, we found out that with videoconferencing, at the end of the day, customers liked the service, but they didn’t want to spend $5,000 on a credit card.

So we had to modify and hire sales teams — which was not in the business plan — to actually go and do that, and move us away from online transactions. That’s a huge change in the business plan, but we were willing to make that decision right then and there and say, ‘We have to do it,’ rather than say, ‘This is our plan; we ought to try it.’

Remember there is a fine line between perseverance and stupidity, and you only know after the fact. You can keep trying the same thing, and if you break through, people say you are a genius. But if you keep doing the same thing and you can’t break though the wall, people say, ‘That guy is a moron.’

Q: The name ‘Blue Jeans’ is rather ambiguous. What made you choose it?

KR: People who do not think differently will always say, ‘Why did you call it Blue Jeans? It has nothing do with videoconferencing.’ But customers actually love the name. And one of the traits is once you hear the name Blue Jeans, you do not forget it. It also differentiates us from all of the videoconferencing players, because everybody starts with a V — video this, video that.

When you pick a company name, it doesn’t have to be closely tied to the technology that you’re solving today because as the company grows, you may have to pivot. You may have to go into a new market and so on. So you want a name that can be yours forever, rather than having to change it. … You want to come up with a name that can accommodate all future directions of your company. <<

How to reach: Blue Jeans Network Inc., (800) 403-9256 or

The Ramakrishnan File

Krish Ramakrishnan
Co-founder and CEO
Blue Jeans Network

Born: Myanmar
Education: Monmouth University — M.S., Computer Science

Why consensus decision-making can work, with the right team: Once you have your team, decision-making becomes easy. My style as much as possible is to have a consensus. Try to have consensus-oriented management team, where everybody has an opinion and then we sort of come to a consensus on a particular decision that we make. But one of the things I also encourage in the company is dissent. You need to have dissent in the company. People who disagree need to feel comfortable disagreeing with their management team, with their CEO publicly, and not be chastised for it. If a company is full of people who just follow your word all the time, that’s not going to be successful company. You need people who are confident voicing their opinion. And you as a leader need to encourage that . . . That fosters a great company.

On winning over investors as an industry outsider: For the investors, it’s always going to be a challenge because they’re thinking, ‘You don’t have any experience in this industry. Why should I believe in you?’ If you have a track record of building successful business, that goes a long way. So they can see patterns of what you’ve done and they can believe in that. But beyond that, when you present a compelling business plan — this is the problem of the industry and this is how I’m going to solve it — for an average person, it should make sense. If it doesn’t make sense, you’re not on the right path. If it does make sense, the investors get excited because they see an opportunity; and more importantly, there is an emotional connection because you’re coming in as an underdog, an outsider to the industry. Everybody wants to help an underdog win.





How to keep your younger workers engaged and on the job longer

Sherri Elliott-Yeary, CEO, Optimance Workforce Strategies and Gen InsYght

The average American worker today stays at his or her job for less than four years, while millennials, also known as Generation Y’ers (those born between 1977 and 1997), are leaving in a fraction of that time. Ninety-one percent of millennials expect to stay in a job fewer than three years, and the average is eight to 12 months.

New data reveals that a lack of longevity with one company has no effect on length of stay at the next, so the old stereotype of “Once a job-hopper, always a job-hopper” is becoming less relevant to employers, possibly debunking workers’ fears of not being offered new work just because their lengthy resumes are littered with short-stint positions.

As an employer, you obviously want to keep turnover among workers low. Losing workers after a mere year means wasted time and resources invested on recruiting, training and development. Millennials with high expected potential to perform are especially precious to keep around, even more so than workers with proven achievements in key positions such as engineering.

So how do you prevent millennials and other workers from leaving your company quickly? Try the following:

  • Hire well initially. The economy has made every open position look tempting to a wide array of job seekers. Even if your company’s applicant tracking system successfully weeds out over- or underqualified candidates efficiently, some workers who aren’t the right fit inevitably make it through.

To keep high-potential millennials and other workers at your company, ensure you’re hiring the right people first. Use video interviews to broaden your search efforts geographically and to better establish an accurate feel for potential workers, all while saving time and money.

  • Embody values. A 2012 survey by Net Impact found that 58 percent of respondents said they’d be willing to take a 15 percent pay cut in order to work for a company that has values similar to their own.

To keep high-potential millennials at your company, do more than just hand employees a list of the company’s values on day one; actually embody the values day in and day out and reward employees who do the same.

  • Encourage communication. If today’s social marketing campaigns illustrate one thing, it’s that consumers enjoy engaging in open conversation.

Likewise, employees, especially millennials, appreciate the opportunity to share ideas and opinions openly in the workplace. To keep high-potential millennials at your company, encourage open two-way communication among all employees through various channels.

  • Integrate technology. Millennials are stereotypically the most tech- and digital-savvy generation in history. In fact, Gen Y’ers are prioritizing acquiring the latest smartphone or tablet above purchasing a car.

To keep Gen Y’ers at your company, demonstrate your company’s desire to be a technology leader by implementing the latest technology, beginning with video interviews in the hiring process.

  • Offer flexibility. More young workers in industries that don’t demand in-office face time prefer to do their work outside the office, according to a recent Detroit News article. And for Gen Y’ers in industries where face time is required, flexible hours can be more important than high salaries.

To keep your high-potential Gen Y’ers around, try to offer more workplace flexibility. If more schedule and telecommuting flexibility isn’t possible at your company, see the next tip.

  • Ask for input. Assuming that Gen Y’ers at your company want holiday gift baskets or other outdated employee perks that won’t inspire gratitude will have them running out the door before their first year is up. To keep Gen Y’ers at your company, ask what benefits they want to receive or take inspiration for employee benefits from other companies with cool perks.
  • Offer training. Information today is doubling every 18 months. By some estimations, that means workers need to recover a quarter of their college education every five years just to keep up with industry standards.

To retain Gen Y’ers value and keep them at your company, offer training opportunities for workers to learn new and refreshed information and knowledge. Your company can even offer education benefits for Gen Y’ers itching to return to the classroom.

Sherri Elliott-Yeary is the CEO of human resources consulting companies Optimance Workforce Strategies and Gen InsYght, as well as the author of “Ties to Tattoos: Turning Generational Differences into a Competitive Advantage.” She has more than 15 years of experience as a trusted adviser and human resources consultant to companies ranging from small start-ups to large international corporations. Contact her at [email protected]

How Jim Geiger piloted Cbeyond into the cloud computing era

Jim Geiger, Chairman, President and CEO, Cbeyond Inc.

For most of its first decade of its existence, Cbeyond Inc. was a growth machine, achieving double-digit revenue advancements year after year. But four years ago, the IT telecommunications firm’s growth engine was stalled by a double dose of bad news: the onset of the recession and an incursion by cable companies at the low end of Cbeyond’s market. This malignant combination began to smother Cbeyond’s year-over-year growth rate, which gradually fell into low single digits.

“Our customers are small businesses, and the recession was tough on them,” CEO Jim Geiger says. “Many of them went out of business. The incidence of financial default and bankruptcy was significant over the past several years.

“Also, a lot of these folks are Subchapter S corporations. Their income flows to them personally, so they’re very concerned about all the uncertainty and the issues surrounding their tax liabilities. All of these things that have become political fodder of late are very real around the kitchen tables of our customers.”

The emergence of cable companies as players in the market has exacerbated Cbeyond’s recession-fed slowdown.

“That’s the other aspect that has been difficult for us: the emergence of cable as a competitor,” Geiger says. “I hesitate to say ‘competitor’ because cable only competes with us at the lowest end of our market. But at that end of our market, they have been very effective and have caused us to react.”

Gradually, the twin challenge of the recession and the cable companies’ encroachment started sending trouble signals to Geiger and his leadership team.

“Our incidence of business failure in our base started increasing, and the cancellations due to financial duress in that time frame literally doubled,” Geiger says. “Our bad debt expense has increased. And while we still have a very small churn rate — in the neighborhood of 1.5 percent of our customers per month — it used to be only 1 percent. And just about all of that increase in churn has been because of increased business failures and business contractions.”

Alarmed by the slowdown in growth, Geiger and his leadership team started looking for ways to turn the trend around. And throughout the last two years, as a new technological opportunity began to materialize, they shifted their company’s business strategy to capitalize on it.

Adjust and adapt

Geiger and his team realized that Cbeyond would need to change and adapt in order to get the company’s growth rate back on track. Some of the changes they made were small and incremental: running Cbeyond in a more lean, cautious fashion; competing more on price; and introducing greater flexibility in the company’s product and service offerings.

“Those are some adjustments we made to our core business, adjusting as any business would, and we continue to focus on them,” Geiger says. “We’re conservatively capitalized, and we don’t have any debt, so this slowdown never threatened our future. It just threatened the fairly gaudy growth rates that we had experienced for most of our history.”

One other change Cbeyond made was more substantial, however: It started offering cloud-based telecommunications and computing services.

“In that same time frame, about 2010, technology took a leap forward and virtualization became economical,” Geiger says. “Along with greater bandwidth and access rates, this allowed us to start focusing on a different piece of the marketplace. This was exciting to us. Of course you’ve heard the overused phrases ‘cloud computing’ and ‘cloud services.’ Everybody wants to be offering cloud services today. But, indeed, we are.”

Geiger explains Cbeyond’s move into the realm of cloud-based technology in terms of “boxes.”

“It’s as simple as this,” he says. “There are boxes that companies — small businesses as well as large ones — used to have on their premises. When I say boxes, it may have been a firewall, it may have been a PBX [private branch exchange] or a key phone system, it may have been a server that ran some piece of their company’s automation.

“But now these boxes can be housed in a data center out on the Internet, if you will — out in the cloud. And we recognized this as a very natural strategic extension for us.”

One benefit of extending its business into the cloud is that Cbeyond is now attracting a different breed of customer: businesses that are slightly more, as Geiger terms them, “upmarket.”

“With companies that have a real technology dependence, if they don’t have access to their systems, they’re basically out of business,” Geiger says. “Professional service firms, doctors and dentists — who happen to be two of our biggest verticals — as well as attorneys, accountants, small manufacturing — these are companies that really depend on technology. They have knowledge workers. In many cases, they have multiple locations or at least remote workers. And they are willing to outsource. So we’re able to come in now with our new products and channels and offer a much broader package of capabilities to our customers.”

Cbeyond’s new set of offerings is also attracting larger companies with greater revenue and more employees as prospective customers.

“We’re now able to access a larger wallet of spending capacity of these slightly larger customers,” Geiger says. “Whereas our average customer used to have 12 employees, our new customer has somewhere in the 20s. And these newer customers have been growing, so I would say probably that average will end up being about 30 employees.”

Shift strategies

The result of these changes is a redefined, repositioned Cbeyond. The company, which was launched in 1999 as a small group of entrepreneurs to solve technology problems for other entrepreneurs by providing them with basic IT and communications packages, is now a cloud-based, broadband Internet, Web-hosting telecommunications firm with 2,000 employees and projected 2012 revenue of $485 million.

Additionally, Cbeyond now has offices in 14 markets across the United States and four data centers in Atlanta, Louisville, Dallas and Las Vegas.

“The positioning of the company is really a lot different now than it had been,” Geiger says. “In the past, we had really good, broad solutions for a rather simple bundle of communication services. Now we’re a much more rich service provider in technology services.

“Our positioning now is to be a technology ally for small businesses. We’ll do the hard stuff, the heavy lifting: make sure that your data is always available to you, that it’s accessible over an adequate piece of bandwidth, that it’s up and running 24/7, that it’s protected, that there aren’t any viruses, that the operating systems of the servers and devices are all up-to-date and patched. We’re really acting almost as an outsourced CIO to our small-business customers.”

To get itself moving toward that goal, Cbeyond did a great deal of research to determine what types of cloud-based products and services it should offer its customers.

“While we knew that this was the direction we were going in, we weren’t so certain about which specific product offerings our small businesses would be interested in buying,” Geiger says. “So we did a ton of primary research. We talked to about 7,500 small businesses, both existing and prospective customers. We gathered a bunch of data, and then we went to work developing products to satisfy what we understood the market to be.”

Two of the primary results of all that research are Cbeyond’s new TotalCloud Phone System and TotalCloud Data Center. Both products are aimed at giving small-business customers greater flexibility in concentrating on their core business operations and not having to directly concern themselves with the operation of their communications and IT systems.

“The TotalCloud Phone System gives our customers the ability to have remote workers anywhere, with many different types of phones, and it gives them all of the same types of phone capabilities they would have if they were on a phone system in the same building — four-digit dialing to co-workers, transfer, etc., etc.,” Geiger says. “And it takes the job of taking care of the system’s uptime and performance and makes it our problem instead of our customer’s technical person’s problem. You can wash your hands of it once it’s in our care.

“Our TotalCloud Data Center is a similar offering for servers — for computing power. It enables our customers to outsource their servers. We’ll take their servers and house them in the cloud, and we’ll connect them securely and be responsible for their operation systems. Also, many of our customers have certain compliance regulations for their data today, which aren’t easy for them to figure out, and we can do that for them.”

Cbeyond’s leaders project that these new services will represent a quarter of the company’s revenue by the end of 2013, and that Cbeyond will be back to double-digit revenue growth by that time.

“These are very popular services, and they’re growing fast in popularity,” Geiger says. “They represent a material amount of our growth opportunity.”

Take quick action

Once Geiger had a clear picture that an economic downturn was deeply impacting the company, along with a new group of competitors nipping away at his company’s market share — it was crucial to be decisive and act quickly.

“If your gut tells you to make a change, do it sooner rather than later,” he says. “Follow your instincts and make the changes you need to make right away. Don’t waste a lot of time trying to improve the status quo. When you start to feel things shifting in a major way, don’t wait. React and respond.”

Trusting one’s intuition is a theme that Geiger keeps circling back to.

“It’s a mistake to fall into the trap of always listening to the experts,” he says. “One of the things you have to constantly remind yourself of is that no one knows more about your business than you do. If that isn’t true, then you need to find a new line of work. But assuming it is true, you absolutely have to trust yourself and your own instincts — and don’t listen to the experts.”

Lastly, Geiger says, a leader faced with the type of challenge that Cbeyond faced has to keep an eye out for opportunities and always be poised to act, to move forward quickly and forcefully.

“You have to have a high level of aggressiveness,” he says. “I think the level of aggression with which we embarked upon the change wasn’t enough at first. We were a little more hesitant than we could have been. And we’d necessarily be further along today had we had acted sooner.

“Of course, a lot of people could say that about many different aspects of their business. But if you see changes starting to happen and you feel it and you believe it, it’s probably true. As the often-said quote goes, the only constant is change. So you have to embrace it and act decisively and rapidly.” <<

How to reach: Cbeyond Inc., (866) 424-2600 or



Jim Geiger

Chairman, president and CEO

Cbeyond Inc.

Born: Syracuse, N.Y.

Education: Bachelor’s degree in accounting and pre-law, Clarkson University, 1981

What was your first job, and what business leadership lessons did you learn from it?

In my midteens, I had a mentor who lived down the street from me. He ran a successful produce business. His name was Frank Mento. I worked at a farmer’s market unloading produce from rail cars and tractor-trailers. Frank started out with a single truck and would get up at some ungodly hour like 2 o’clock in the morning and go down to the farmer’s market, pick the best produce and deliver it to his customers personally. He was an advocate for his customers. The quality was all that mattered. He didn’t think in terms of short-term profit; he thought in terms of long-term relationships.

Do you have a central business philosophy that you use to guide you?

We’re very metric-driven at our company, and I’m personally very focused on creating systems that give us the best chance to meet those metrics: management systems, talent identification and development systems, incentive systems. I find that when all of those things are consistently defined, communicated, understood and implemented, that’s the fastest route toward the success of the business. Also, I have a coach: I’ve used the same consultant for the past 16 years, and he has helped me design those systems and be true to them.

What trait do you think is the most important one for an executive to have in order to be a successful leader?

Trust, which flows from integrity. We have a lot of long-tenured employees, and I’m very proud of their continued support and commitment to the company. We’ve gotten to where we are because there’s a tremendous amount of shared values and cross-commitment and trust.

What’s the best advice anyone ever gave you?

Listen to your customers, listen to your employees and do what they tell you. Frank Mento taught me that.

Chris Sutton took the bits and bytes route so Clover Global Solutions could rebound from the recession

Chris Sutton, partner, Clover Global Solutions LP

Chris Sutton was willing to take a chance to revitalize Clover Global Solutions LP to be in an optimum position for a comeback of the oil and gas industry after the 2007-09 recession.

He and his wife, Carolyn, were partners in Clover, the 11th company they had owned throughout the years, so taking action to secure a company’s future wasn’t a new experience.

“Business had really flat-lined,” Sutton says. “There were no new job orders coming in and we didn’t want to lay anybody off. So we huddled down and had a survival meeting for a couple of days and turned inward. We made two commitments that year. One was that we were going to try to reinvent how sourcing up occurs. The second was that we were going to understand and exploit social media.”

For the first goal, Sutton had a good handle on the problem. He and his wife had owned Clover since 2000 after coming out of early retirement to help out at the company. He quickly discovered where the bottleneck was in hiring after reading thousands of resumes and trying various technologies to match them to opportunities in the industry. He knew he needed a tool that would optimize the process. Second, he wanted the company to get on board with social media — a vehicle he didn’t understand at the time but one that he could see had great potential.

Here’s how he put it all together and grew the company’s revenue from $1 million in 2000 to $60 million largely since 2009.

Invest in the heart

When business goes soft because of an economic downturn, it’s time to put on the thinking cap. Clover had established a niche as a staffing company for the oil and gas industry, so why not exploit that niche and find a better way to serve clients?

The heart of Clover was its process to match job seekers with job opportunities. If that process were faster, the company would have an advantage in the highly competitive staffing market.

“The first to market is oftentimes the first to win,” Sutton says. “Second place goes home. Either you hire them or you don’t. How fast can you do that and do it accurately is really the race to the client’s door with the right person.”

Sutton decided to divert the company’s entire $200,000 marketing budget, plus an additional $50,000, into developing a technology tool that would accurately match job seekers with the oil exploration and production companies that had openings.

The result was a program called Clover One World that houses data and searches for matches among thousands of alumni from a number of companies. A company with an employment opening can go in and find retired previous employees who may come back as a mentor or team leader.

A key feature of the technology is that it profiles alumni with a type of intelligence that involves several factors. Software developers in Mumbai, India, and in Texas created Clover One World after about 14 months of work.

“While most people search through resumes with a tool such as a Boolean search, much like you search the Internet with words, our program matches just the exact skills with what the job needs, one to one,” Sutton says. “Much like you search on the Internet for a plane ticket and you continue to refine it with selected questions like when you are going to depart and one-way or round-trip, our system is combing the candidates to profile exactly their skills, competencies and current experiences to what our industry looks for in that position.”

Any new venture requires significant research, Sutton learned new approaches by studying the experiences of similar fields.

“We studied the medical industry, the IT industry and people buying on the Internet,” he says. “We just put how people buy on the Internet, their user experience, and applied that to how our clients and candidates meet each other for job opportunities. We coined a vision of meets the website for You have company alumni who have a unique competency and a common theme, and you need to put them together in a Web-enabled process.”

Having computers do the searching has added a whole new dimension to the task.

“It’s no longer reading prose and coming up with a bunch of matched words,” Sutton says. “It is what I would call ‘hiring science.’ We rarely look at the resume itself until it is ready to present to the client.”

Once you remove the chore of reading resumes to find a match and instead have a computer system do the work, the speed of the task increases phenomenally.

“We now are able to submit a candidate in about an hour instead of two days because we are not drowning in reading resumes all day long,” Sutton says.

Think thought leadership

With the search/match tool in place, Sutton next wanted to use social media to drive the brand. However, although he knew it was an important strategy, Sutton says he had no idea going in to this project how to exploit social media.

“We didn’t even know what that meant,” he says. “Really. We didn’t. LinkedIn was just starting out, and there was a trend warming up to Facebook.”

Once you have decided that you want to head into an unknown territory, you need to find a guide. To that end, Clover turned to a husband-and-wife start-up company in New York City for help with social media.

“We were maybe one of their first customers; they helped us brand through social media,” Sutton says. “We got a lot of attention from them. We still are very close. I give them a lot of credit for bringing us along in the hike. We didn’t know what we wanted. They were fairly new to the industry, but they had the expertise.”

Sutton had questions about what he was getting, but had no doubts it was the right move.

“How do you qualify somebody to do business with them when you don’t know exactly what you are buying? You shake hands and hope it works,” he says. “We had to learn what that meant. And we do every day, if you can recognize that it is such a dynamic thing that’s developing in the business landscape. You are trying to figure out how it works every day.”

While many may think of social media as tweeting on Twitter and posting on Facebook, it may offer greater opportunities to a business. Clover utilizes it in two key ways, the first of which is to find qualified people as candidates. Sutton says that today, more than 60 percent of those coming to the company to be considered for a job are coming from a form of social media.

Profiles on LinkedIn and Facebook are a gold mine for locating the right people.

“There is a tremendous reliance today on the seasoned, professional, technical person who has the knowledge and experience but who may have retired,” Sutton says.

Social media can also provide thought leadership. Clover offers several blogs on its website that pertain to the oil and gas industry. Contributors include those in the Clover database.

Sutton says that contributors blog in their areas of interest, researching and writing information and facilitating that information to groups of a similar kind. Bloggers present the information in a way that is as forward thinking and contemporary as possible, covering topics such as, “Where is oil today, and what does that mean to the people in North Dakota?

“You try to present the contemporary areas in the particular skill sets that we support,” he says. “So we support a lot of geologists. There is a lot of information about the new geology of drilling. We have 300 people in our company that, in one way or another, are a resource. Thought leadership comes from all parts of the company. We have subject matter experts in several of the areas of the oil and gas industry. Sharing their opinions and views on topics is good for the brand.”

Get the mindset

It takes some personal fortitude to plow a field that has never been touched before. Sutton says it also takes one other significant factor.

“It takes a lot of confidence,” he says. “Our team has passion, commitment, so really, I am not needed here. I like to think I am, but when you look at everything we do, I look at whether they are committed, and that they have the passion and the idea. If I check those two blocks off, what am I going to do? Applaud them on the sidelines?

“I just ask them if the revenue is predictable, and we talk about that. I think having the capability to respond to these opportunities and the quality of the people you have is a critical success factor.”

Maintaining enthusiasm and not getting overwhelmed by trying to stay with the latest and greatest presented by the competition requires a particular mindset.

“Some of it is, ‘Don’t strike the windmill,’” Sutton says. “You just can’t compete. Know that and acknowledge that and move on. The other part of it is to be as good as you can be in the space that you are in. The space is so big in the people business. Globally, if you carved out a particular niche, it would just be to be as good as you can be in the niche.” <<


How to reach: Clover Global Solutions LP, (281) 994-5900 or

The Sutton File

Chris Sutton
Clover Global Solutions LP

Born: Burbank, Calif. I took a lot of heat in college about that. … ‘Beautiful downtown Burbank,’ as TV’s ‘Laugh-In’ show commented.

Education: Arizona State University, with a major in political science and a minor in psychology

What was your first job?

I started working at 9 years old with a paper route in Burbank. It was The Los Angeles Times, a morning daily. That meant delivering the papers before school started. All my brothers had paper routes. I really enjoyed working and that was my first business.

Paperboys got what was left of the revenue — if everybody pays you.

My first job was as a buyer and project support person for a global engineering and construction company called Ralph Parsons. It was right out of school.

I had several jobs and businesses with my wife. I probably could retire but I don’t know what I would do with myself.

Whom do you admire in business and why?

Michael Dell. He’s a comeback kid. He started with very little and built up a huge organization, brought it back into its market share, and it’s poised for good comeback. And it’s Michael Dell, that’s why.

What is the best business advice you ever received?

Maybe the best way to answer that is we try to create success through integrity, philosophy and our agility in our performance. I heard that from somebody else when I first came to Texas. I wrote it down in and live by it, as well. It’s plastered all over the walls of our company.

What is your definition of business success?

To have a team that has a passionate commitment so I am not needed, to have revenue for the company that is predictable and that we can respond to opportunities with the money and the people that we have.


How Andres Ruzo turned Link America around by switching from products to services

Andres Ruzo, CEO, Link America Inc.

Five years ago, Andres Ruzo was on the verge of pulling the plug on Link America Inc. The company, whose operations revolved around manufacturing and refurbishing telecommunications switching equipment, had fallen on hard times.

After riding the wave of the telecom boom in the late 1990s, Link America had been slammed by the dot-com crash in 2001 and had been on the decline since. Its revenue, which peaked at $12 million in 2001, had plunged to $3 million by 2007. Many manufacturers, unable to compete with China’s dirt-cheap wages, were moving their operations to the Far East.

Ruzo detected that trend gathering momentum and consequently was trying to transform Link America from a telecommunications equipment manufacturer to a provider of related services. But the plan wasn’t working well and time was running out.

“We were losing money, cutting costs, racking up debt,” says Ruzo, who started Link America as a one-man operation working out of his son’s bedroom in 1994. “The demand kept getting smaller because people were learning to dispose of equipment and replace it as opposed to repairing it or refurbishing it. Up until then, I had always thought repair was a recession-proof business. It turned out to be the opposite.”

Link America kept sinking, and Ruzo wondered how much further down rock bottom might be.

“It was painful,” he says. “I saw that we could no longer manufacture four lines of products and be successful. We couldn’t compete with companies in China paying workers $2 an hour when we have to pay $14 bucks an hour here. It’s impossible.

“So we went from four buildings down to one, and from 100 employees down to five. I even cut myself for six months without salary to keep the other four people working. I was just trying to stay in the game. That was 2007. I think we touched bottom there. I almost bankrupted the company.”

Turn the tide

At about that time, Link America won a contract to build five communications towers at a military base in El Paso. That tided the company over for a while as Ruzo looked for strategic partners to help him convert Link America from manufacturing to services.

Eventually he concluded that his plan to gradually convert the company’s operations from manufacturing to services wouldn’t work. Link America had to bite the bullet and plunge all the way into services, head-first.

“I started looking for an opportunity to sell all of our manufacturing and repair assets,” he says. “We had to jump all the way into the pool and swim — swim into services. After a while, we found a buyer. We sold our assets to a company called CTDI, and that company became our partner.”

CTDI not only bought all of Link America’s manufacturing assets, it also permitted Link America to leverage its balance sheet to obtain lines of credit to help it pursue its plan to become purely a service provider.

“CTDI came to the table and bought a piece of our company and bought in to our vision,” Ruzo says. “They gave us the funding necessary to do the turnaround, and they gave us the financial wherewithal and lines of credit so we could start doing large transactions and grow quickly.

“In reality, they saved us. It’s like building a 15-story building: We knew we had the footprint. We knew we had the design. But we needed someone to help us build the foundation, someone to say, ‘OK, I will fund the construction of the first floor. You do the rest.’ If we hadn’t found that, I wouldn’t be here.”

Ruzo’s vision included converting Link America into a service provider in two market segments related to its already-established expertise in manufacturing telecom equipment: No. 1, offering warehouse management solutions for large telecom carriers such as AT&T and Verizon, and No. 2, building wireless communication networks for public and private emergency service providers.

“The warehouse management solutions part of our business is basically logistics,” Ruzo says. “We support logistically the deployment of hundreds of networks nationwide for optical gear, and we also provide heating, rack and stack, and many other things. That’s one of the two main types of service we provide.

“The other type of service we provide is we build networks for first responders — police, fire, EMS. We build their networks, we provide their radio, we do the installations, we do the engineering, we do the provisioning of all the radios, and we do the support and maintenance.”

Leverage technology

The conversion of Link America from a product-based company to a service-based one has worked remarkably well. Once the new model was in place, Link America started growing again immediately. Revenue bounced back from $3 million in 2007 to $12 million in 2008, then leaped forward to $40 million in 2009, $136 million in 2010 and $214 million last year.

“How do you know you’re doing well?” Ruzo says. “Well, I’ve always followed the money. You know you’re doing well when the money starts coming in. And that started for us in 2008. We started landing some contracts — some serious, sizable contracts.”

Among the earliest of those sizable contracts was a pact with a router company called Redback Networks, which has since been acquired by Ericsson. Other large clients quickly came on board, including Fujitsu, Ciena, Dallas Area Rapid Transit and Dallas County Community College. All along, keeping abreast of the latest technological trends has been a key element in Link America’s success.

“We were able to invest in a lot of technology to enable us to be profitable,” Ruzo says. “A large portion of our business is big-volume, low-margin, and what you have to do to be successful in that type of environment is you have to leverage technology in a big way.

“Technology is your enabler. We do thousands and thousands of shipments, and with those types of volumes, everything has to be digital. All of our invoicing, our receivables, our payables, our notifications — everything is electronic. We don’t do anything on paper. If we did, we would need 10 people just in accounts receivable to do invoicing. We have two.”

Link America is committed to keeping its operation lean and scaling up with as few newly hired employees as it can manage.

“We have systems such that, if we scale up on the back-office side, we don’t have to add much,” Ruzo says. “At one point, we added $10 million a month in sales, and we only added one person in accounting. Of course, we had to add a few more people to move the physical product, but we only added one in accounting. That’s crazy. That’s unheard of. And that’s exactly what I mean by leveraging technology.”

Partner strategically

Ruzo attributes Link America’s success to its approach of forming strategic partnerships with its clients by showing them how to use cutting-edge technology to manage their inventories more efficiently and, in so doing, to become more profitable by increasing their sales, cutting their costs or both.

“A big part of it has to do with moving a lot of product using just-in-time inventory systems,” Ruzo says. “You have to move the stuff very quickly so that the carriers can order hundreds of thousands of products and you can drive costs out of their supply chain.

“The other part of that is showing them how to increase their sales incrementally. It’s about increasing incremental sales on the top line, and then driving costs of their operations by doing everything cheaper, faster and better. If we do one or both of those things, we increase their profit. And when you do that, you become not only a vendor, you become a strategic partner, because you’re bringing constant innovation to their processes.”

Faith — in the spiritual sense — has also played a major role in Link America’s turnaround, Ruzo says.

“My spiritual life has helped me,” he says. “If you want my secret recipe, it’s human effort and the grace of God working together. I try to be a spiritual person and to always strive to do the greater good — to help our community, to help other people, to treat the world good.

“Paul Coelho has a book called “The Alchemist.” In it, he says that if you always try to do good and to do the right things, the universe will conspire to help you, because the universe is always looking for those kinds of people and for the type of positive energy they’re putting out. When you do the right things, other things will start to flow for you. I believe that. I’ve seen it happen.”

Perseverance has been another key driver in Link America’s success.

“You have to persist to see things through,” Ruzo says. “There have been times when it has come to the point that if the door was shut, I would open a window. If the window was shut, I would go through the roof. If the roof was shut, I would dig a hole. That’s what it takes. You can’t give up. You have to be extremely persistent.”

Be decisive

Recognizing future trends and being willing to cut ties with one type of technology and move on to the next is essential, not just in the telecom business but in many other markets driven by technology.

“It’s good to be in love with your business, but don’t fall in love with the technology,” Ruzo says. “You have to constantly morph yourself and keep up with innovation and collaboration and value co-creation, and you have to always be ready to jump onto the next wave.

“Business comes in waves. You catch one and you ride it for a while, and then that wave starts going down and a new technology starts coming in. You have to constantly be on the lookout for what’s coming next so you can decide where to put your time and resources and when to staff up with the right people to stay successful.”

Courage and decisiveness are other key traits that have helped Ruzo shift Link America and drive it back into growth mode.

“Business changes constantly,” he says. “If you see that writing on the wall and you don’t act, you’re doomed to failure. You’re going to be a dinosaur. You have to keep a close eye on the situation, and when you see it’s time for change, act immediately. Make the decision, formulate a new strategy and implement it — now.

“The other thing is do not be afraid. Sometimes leaders are afraid to call it like it is and make hard decisions. You have to be decisive and make the right decisions ahead of time. Don’t assume things are going to get better. If you have to cut, cut. Don’t wait until the last minute. Don’t keep saying, ‘It’s going to get better,’ and then another month passes and another, and before you know it, you’ve racked up millions of dollars in debt. Take the pulse of your business monthly, weekly, daily. Be smart, be shrewd, be fast. Make strong decisions from the get-go.” <<

How to reach: Link America Inc., (972) 463-0050 or



Andres Ruzo


Link America Inc.

Born: Lima, Peru

Education: Bachelor’s degree in engineering, Texas A&M University

Looking back over your years in school, what important business leadership lessons did you learn?

The main thing I learned was that when you don’t have the answer to question, you have to have the discipline and the know-how to go find the right answer. That’s the key thing the university gave me: If you don’t have the answer, here’s how you go find it.

Do you have a central business philosophy that you use to guide you?

Basically, our tagline says that we are in the business of powering sustainable solutions through innovation, collaboration and value co-creation. Those are the three things that are very dear to us.

What trait do you think is the most important one for an executive to have in order to be a successful leader?

Laser focus and persistence. If you can be laser-focused and persistent, you’ll get there. Another important one, especially for entrepreneurs, is you have to be careful not to drink too much of your own Kool-Aid. I’ve had partners and have known people with companies that have grown incredibly, and they start thinking that they can do everything and be everything, and they don’t watch the ball, and eventually they lose their company. Entrepreneurs in particular have to watch out for this. You have to find people to challenge you, in terms of your beliefs and your vision. People that ground you. People that don’t think like you. It’s important to always have somebody who can help you keep your feet on the ground.

What’s the best advice anyone ever gave you?

Live in the present and do your best. Also, invest in yourself and invest in the things that you can control. Believe in yourself. That advice was given to me by a guy I knew when I was working in the real estate business many years ago.