Full Transcript

George Kamide:

This is the Zero Hour brought to you by SafeGuard Cyber I'm George Kamide.

 

Ashley Stone:

I'm Ashley Stone.

 

George Kamide:

Today's guest is Sam Schutte, CEO of Unstoppable Software, which specializes in custom software for some of the world's biggest companies. Really fascinating conversation, around digital transformation. He's had a seat on the front lines of that conversation with many of his customers.

 

Ashley Stone:

Yeah. It gives us some insight into how his customers are responding to the current environment that we're in. We're still living in a pandemic, but also talks about when's the right time to take action. Take the leap and kickstart your digital transformation journey.

 

George Kamide:

Yes. And also of note, we do end our conversation with a very serious turn on what can technology companies do in this moment to address racial inequities both in the current environment and also further upstream as regards to education and their representation, but without further ado, let's get into it with Sam Schutte.

 

Ashley Stone:

Unstoppable Software inc. Has been in existence for over a decade now, which is an incredible feat. You've also been a software developer right out of college. Can you tell us what led you into this industry and to stay so long?

 

Sam Schutte:

Yeah, no good question. So I first kind of got into computers you know, way back in my, in my youth junior-high type era. You know, I had a friend who was sort of just an absolute computer whiz, right? This is a guy who he's much better, much smarter than I am. He actually works for Google now and some of their like cutting edge UI stuff that they won't even talk about. Right. and he really introduced me to a lot of stuff that he had just figured out. And so this was the days of, you know, the BBS days and all of those bolts and board systems, bolts and board software. And I was just really fascinated by how things connect you know, with modems and, and the data and, and, and all this. And just sort of how I could go into a chat room at the time.

 

Sam Schutte:

It was, you know, these text-based chat rooms and talk to people on the other side of the country and see each letter as they type it. Right. you know, this was just groundbreaking stuff. And this is before the internet, even this was when it was all more like kind of what you called packet based systems and stuff or whatever. And so that's kinda how I got into it. And I mean, we used to, you know, this was back when, like we wanted to make a sound card. So we got out the soldering iron and put together resistors on it on a breadboard. And you could just do that, just plug it into your parallel port. I mean, good luck doing that nowadays. So I was really, I was really into it and those, but I didn't really think that I would go into it as a profession instrument, interestingly enough, I think I've always been interested in systems.

 

Sam Schutte:

And so when I went to college, I thought, well, I want to go into medicine because I'm interested in like, you know, the human body and the, and the in biological systems. Right. but when I found out, so I took, you know, I remember I went to like, one of my first classes in college was the honors neuroscience. Right. So I'm sitting there and I'm like, well, how does the brain work? And they're like, Oh, we don't know. We're not really sure. Well, but what happens if you do this to the brain? And they're like, Oh, that's a good question. You know, like they, I mean, they know some things, but not to the degree. And it was very frustrating to me, like, well, you don't even know what happens. Like you don't know. Right. We know. So little really though granted more than more now than we did 20 years ago when I was in college.

 

Sam Schutte:

And so I actually kind of switched from thinking, I would go into neuroscience, biology, medicine, something into a computer engineering and later computer science, because I really liked that everything could be understood. Everything, you know, there's really no nothing that ever happens. In a piece of software or an internet network or, or laptop that it's like, science doesn't have an answer for that. No, we do yes.

 

George Kamide:

Much, much easier to understand when you're in the process of building those systems. Yeah. Even from scratch.

 

Sam Schutte:

Yeah. And it's still challenge to figure out, but I guess I like that, you know, short term reward of like, when you solve something and you're like, Oh, awesome I solved it. And I can't imagine these folks who study the brain for instance, spending a 35 year career getting to the end of it and saying, I'm almost there. I almost know the answer like right.

 

George Kamide:

Or it's more like, I think I know the answer given the current research, but that could change next year.

 

Sam Schutte:

So, and I mean, no, certainly no knock on those folks, but I just, I did not have the patience to do that kind of research. Right. And so anyway, so that's, that's how I got into computers and software and stuff. And then, you know, did so I got my computer science degree worked for a bunch of software companies, startups, you know, internal IT shops kind of across the board for about 10 years. And then started you know, I had done kind of a little consulting through other companies and, you know, kind of thought like, geez, everybody I've worked for in the startup world or consulting world. They don't know anything. I don't know. They don't have some secret powers. Right. So I felt like, you know, I could do this.

 

Sam Schutte:

And so yes got an opportunity to do a consulting contract really was just, you know, myself at the time when I started Unstoppable in '08 , the January of '08 yeah.

 

George Kamide:

Good time to start a business.

 

Sam Schutte:

Yeah. I think I was telling folks my wife was pregnant. We had our house on the market trying to sell it. I was going to night school for my MBA. And I said, Hey, I think I want to start a business. And she's kind of like, timing is everything. Yeah. Well, let me think , it's funny. Like I think it's kind of like, there's never a, there's never a good time to do the right thing. Right. You know, you, you have to do it when you're ready to do it. And cause I could have said, well, I'm not gonna wait until I finish night school, but that would have been such a mistake because I mean that customer, that I got that initial contract with they're a very large company, like $40 billion company, I mean, and I mean, I'm negotiating a new contract with them right now for, we've been working together for 12 years. And if I had said, let me wait two years till I get my MBA. Maybe they'd never come back. You know? So it's like, you gotta act, you know, when the, when the it's right to do so, you know,

 

George Kamide:

For sure we are going to, we're going to come back to that idea of when to take the leap. So first of all, I remember those bullets and board days. So I appreciate that we've sort of come full circle in a way that the beginnings of the internet were just chat and then it went into, but essentially now when we're talking about new business communications with these Fortune 500 companies or Global 100, whatever, it comes down to, it still comes down to the efficiency of new chat channels, right? Some companies that we had never expected coming to us about WhatsApp or WeChat or any other. So I, I appreciate that that full circle nature of communication, but I want to step back into the larger topic of digital transformation, which is always squishy, but it strikes me when you were talking about systems that we kind of went through this growth curve as a society when the internet was first starting.

 

George Kamide:

I remember, you know, the battle between Word Perfect and Microsoft word. And like these were just viewed as software that could help you do things. So suddenly PCs could help you replace the cost of typewriters and you know, all the maintenance that came with it. And it felt like each piece of software was a solution unto itself, email this, that. And I think we've finally come to this point where a digital transformation is hard because people are still viewing it through the lens of what is the software that's going to get me over that hurdle, but we have not addressed the human systems that interface with those. So I was just curious in your experience with your clients, a $40 billion company, for example, what has been, what have you learned about that interface between yeah, sure. We can build you this software or you can adopt this new software, but like what about the people that are going to use it and how are you going to integrate that into your daily operations?

 

Sam Schutte:

Well, well I guess, I mean, certainly I've learned that it's key and, and that's, and I think that's what is really key about the term and the, and the, the mindset of digital transformation, right. Is, is how do you overlap and weave tools and, you know, and software and hardware and devices into your, your process. Really. So it's about all about process, right? And like the example I often give is so we do it, we do a decent amount of work around like document management and electronic records and stuff is just, it seems like that's a lot, that's something that a lot of our customers need and we even actually selling off the shelf product now that we're a partner with a vendor for, in additional to customization and custom software. And if you think about for a long time, people were like, we're going to scan all our documents.

 

Sam Schutte:

Right. We're going to digitize it, all of our paper and okay. So then they get all their documents as PDFs in a folder on the network, let's say, okay. But you know, that's more convenient and it's better than like a filing cabinet, but is it really any different, I mean, if you just have a bunch of PDFs in a drive somewhere on the network, like, okay, yeah, you don't have to walk to the cabinet. Congratulations. Right. That's not digital transformation. Right. And neither is using Microsoft Word. Right. But if you use Microsoft Word on Office 365, that's running through a SharePoint workflow that is feeding into a machine learning algorithm. Well, you know, and people are interacted and being assigned tasks through that somehow when now you're getting to a system right. To your, to your point. So I think it is looking at that system.

 

Sam Schutte:

And basically, you know, the key thing that I always kind of say is like, figuring out, right? What is the, the rote low hanging, you know, kind of a low value work. I always call it that we want the computer to do, we want to train or teach the computer or use tools to do this low value work that we are using our most valuable assets, you know, flesh and blood. Right. Yeah. And we want to free them up and take that off their plate. Cause nobody wants to do that kind of work. Number one. But also the just, it's not, it's not cost effective to pay them to do it. So we want to free them up to do the creative, you know, the, the high-touch, the customer service, the engine, you know, the, the creative, the engineering whatever it is that you're having them do.

 

Sam Schutte:

That's what we want to try to make sure part of our plan of like, you know, this is something people are doing. And so I think that's a little different that's piece of it, right. Is like, you're saying, this is the stuff we're not going to digitize. Right. So maybe that's the key. And maybe that's the key question of like, you know, when you're doing digital transformation, you don't just sit down and say, what software can I buy off the shelf? It's what, what is important work that I want people to still do?

 

What can we enable? Or what can we automate? 

 

Sam Schutte:

So an example, I'll give you a quick example. So like one of our customers, they had an engineering department of say 200 people and they worked on, maybe let's say 10 different types of projects. Okay. But probably about 80%, 60%-80% of their time was three of those ten types of projects that were really just kind of copy paste over.

 

Sam Schutte:

And I mean, really didn't take any, I mean, they didn't even have to be engineers to do the work. They would take people who maybe had, I knew a guy that was like a math teacher and they just sit here. So here's how you do it. You go through this list of steps, boom. Right. You have your, you have your drawing. So we came in and built a system that automated that, those three out of 10 types of projects and just made that 60% of work disappear. Right. Well, did they lay off 30% of people then, or 60% of people know, you know, they, they said, let's take all those people and put them on the real beefy stuff that we need. Like we need help on because it's the stuff that takes months. And it's totally custom. And it's like, you know, we're doing prototypes and all this stuff on the road stuff, it's just like the simplest parts of our product, but happens to be the largest sold items. You know, we, we basically taught a computer to do. Right. So that's just, I don't know. That's one approach to, I think,

 

George Kamide:

And I think that, that points out a common block is this idea that automation across the board will deplete jobs when it's really just a reallocation of that human effort into things that would materially matter to your business or actually accelerate your business. So right. You, in that case, it seems like you're automating the part of the software set that yes, it's going to, you know, they sell the most, or it's just the easiest to sort of get off the shelf. But if you were to dedicate all your human power in that instance, it, you can't see around the corner to the next thing you can't develop the ne- you get slowed down on your product development. So that's, you know, a reallocation of talent is, is maybe a better way of looking at it. Yeah.

 

Sam Schutte:

And I mean, I think there probably are times when you certainly, when you invest technology that it does mean you need less people. You know, however, we also see perhaps that the people you do need might end up being higher, skilled labor that you have to pay more. So it doesn't necessarily mean you, you know, you say, let me, for instance, you think about like an automobile factory okay. We had a hundred people welding. Now we have 10 robots and we have a 10, you know, high end, like robot programmer guys, but those 10 programmer guys are probably making pretty good money. Right, right. But if you can output 10 times as many cars, then it's, it's obviously still a win. Right. So, I mean, there's a lot of, you really gotta look at the dollars and cents and the math of that, I think, you know, and, and that's what we do, you know, sit down with our, with our clients and say, okay, let's talk about your, let's say it's your, your contract manager.

 

Sam Schutte:

Okay. Let's say, that's the title of the role? What does he do in an average week? Let's, let's write up for an average a month. Let's write up every single type of task they do. How many hours they spend a week on that, what that costs you in terms of dollars in which of those we think that we can take care of in another, in another way. And usually, I mean, in almost all cases, you know, that contract manager is like, please, yes, please. If we can get rid of this thing, cause I, I don't want to be the one that has to like track down emails, you know, or that by hand has to like populate a, a word document. Right. so yeah,

 

Ashley Stone:

Yeah, those are, those are really great examples to help understand there are processes that can be automated, but if we are an organization or business and they want to take a, take the first step in head in the direction of digital transformation, where do they start?

 

Sam Schutte:

Yeah. So, I mean, I think you know, like I was saying, it really has to look at their process, you know, I mean, it almost starts out like an operations consulting or operational assessment piece. Right. And I mean, I think just about anybody well sometimes at the highest level of a company, people know where are we inefficient? Right. But most of the time I think they, they often will miss like some of the most obvious things that are, they won't know about them unless they ask the people sort of down the line doing the work. Right. So if they were to call in their actual end users and say, you know, what do you do that you think is a waste of your time? I mean, that's when they'll get the real answers. And it's like, you always think of undercover boss.

 

Sam Schutte:

Right. What happens every single episode that coming, like, I had no idea that we are paying people to do this. Like we are forcing people to do this, or we are, you know what I mean? Like if it's at McDonald's like, why are we paying somebody to, you know do whatever we could just get a faster microwave right? So it's that same kind of thing. It was really look at that overall process. And most of the time, you know, I think most of our customers are at least 50% of them sort of know what they want or at least have some general concepts. Like our problem is we're spending too much money on, you know, shipping or mailing contracts or something. Right. And it's like, all right, well, let's like, let's talk about digital signatures. Right. and they kind of think that's what they want.

 

Sam Schutte:

Anyway. They have an idea. Other times they just, they're not sure what's happening and they're like, I don't know what's wrong. We just, I feel like we're paying tons of money. We're not getting anything for it. So, but I think they've, they gotta really start by doing that, you know, time box assessment or whatever to figure out. And don't, sometimes people put, put the cart before the horse, you know, and they start looking at off the shelf software, like, let me get, let's go do an analysis of every ERP system on the market and then figure out if it's a fit for us. No. Right. Like you can't figure out if it's a fit for you.

 

George Kamide:

Right. You can, you can just jam that square peg round hole.

 

Sam Schutte:

And is that even what you should be solving? You know, I mean that's, that's like, it's too easy to think that you can just go buy something off the shelf like that, and that it's even really what you need. Because maybe that's not where you're wasting money, you know?

 

George Kamide:

Yeah. That's interesting. Right. Right. Or even stepping back and looking at the whole process. Yeah.

 

Sam Schutte:

Well, and I think, I mean, there's a bunch of angles to take on it. Right. Like, do you, because, you know, do you want to improve your internal efficiency? Let's say, you know, if you're a law firm and you've got a ton of high-paid lawyers, there's a lot of things you could do, any law firm in the country. There's a lot of things you could do to pay, you know, to have those people spend less time. But, or are you looking out in the marketplace and saying, what can I build? Can I build something that my customers use or interact with to out compete? You know, can I build some kind of like information dashboard that nobody else has that becomes like a core part of our product. Right. So we do that kind of stuff too. And that's a different, it's kind of a different angle on digital transformation.

 

Sam Schutte:

Because it's more about your customers, your customers use right. Of your products and how it becomes digital. And, and sometimes it can get a little silly, right? Like to be honest, like, like I was talking to somebody recently that this particular company is to remain, remain nameless. They have like some kind of air freshener and they were making it Bluetooth enabled and all this so that, you know, you could hook up to your air freshener and control how many times it does, what it does I suppose. Right. And it's, it's a digital transformation project.

 

Sam Schutte:

It's like hmm... Maybe kind of, I mean, it kind of is more just like a product feature.

 

George Kamide:

Right. There you go. That's a good distinction that the feature versus the transformative effect. Right. Because it's like, well, one end user experience, do I really want to install the air freshener app on my phone among the many dozens of other apps? Yeah. And then two, is it actually transformational? I think this is interesting. I was talking with an analyst the other day and he was saying like, when you think about transformation, you actually have to think about not only transforming your process, but actually transforming even sources of revenue. So in an IOT environment, are you ordering the air freshener or does like your refrigerator order, you know, like you could have entirely new customers, literally appliances are your customers rather than end users, but that requires thinking way outside your existing process.

 

Sam Schutte:

Yeah. And if you say, well, this Bluetooth air freshener is going to order automatic refills for itself. Well, maybe that does save me time and money. And I get a discount if I do a subscription. So I think, you know, what you, to what you said, it's almost like reinventing the value chain a little bit as part of that. Right. you know, it's not enough just to say Hey, you can, you can like we said, we added this feature to something it's more just by using whatever apps or websites or whatever you've got, does it improve my life, my experience, something like that. Or, and it's all about people, right? It's it, you know, your customers are people and your employees are people, which one are you trying to improve? You gotta pick one and that, and if you do that, that's digital transformation basically.

 

George Kamide:

That's interesting. We haven't heard that take before the people centered approach. So I want to, I go on and go back. So you started your business at the cusp of the financial meltdown. Good timing. We now find ourselves in a similarly trying economic time. We have 40 million people out of work you know, 20% in the UK. So let's just acknowledge the present moment. And how has this affected your personal work routine? I see we are on Zoom so I can see that you're in an office environment, but just want to understand how it might've impacted your relationships, sort of the priorities with your customers and just get a sense of how it affected Unstoppable.

 

Sam Schutte:

Yeah, it's interesting. So we have always been a remote shop. You know, I, my I've had developers in Canada and Idaho and Connecticut, Florida, Ohio, Colorado, all kind of all over the place new Orleans. And I have done that because one of the real challenges in my industry is finding talent. If you talk to, most of my competitors here in Cincinnati who have a brick and mortar and they have, you know, 10, 20, 30 guys in an office, they all say, I mean, they spend most of their advertising dollars recruiting, right? Yeah. and I've never had that problem because, you know, I will if I put out a job ad I'll get posts from all over the US and then I'll draw from any of whatever it is, four time zones or something. Right. and so that, you know, we already had all those tools in place that I think on the operations side, for the most part, it hasn't affected us too much.

 

Sam Schutte:

It has hurt us that a number of my guys that and myself that have small kids, it's been definitely hard to, you know, get enough billable hours in because we are having to deal with childcare and there was no daycare and stuff. Right. And so it's kinda like you can't escape that even if you're working from home, like what, where do your kids go for some, for some of the guys that don't have kids, I think it's almost like no change to them. Right. Other than they haven't gotten their hair cut in months or so. We've, and it's funny, cause we have been using Zoom for about, I don't know, two, three years now, something like that. Yeah. Yeah. And so it's like, yeah, I've heard of it. Yes. Everybody's like, Oh, there's this new thing. And it's funny, they've gone from like 3 million users to 300 million or whatever it is in the last, like four months.

 

George Kamide:

I am enjoying watching the features race between Google, Microsoft and Zoom. Like how long did it take Microsoft to figure out how to put more than like four people on the screen? Like you just think about like the hours that were put into like, no, we've got to get multiple people on the screen now, like we're losing to Zoom.

 

Sam Schutte:

And it's funny because it definitely has meant that, you know, us longstanding users are getting more new features more quickly. It's like, Oh, there's a new version. You know, normally it's like three months between, right. So now it's like every other day there's new version. So, so I think in some ways operationally, it hasn't affected us as much as other companies. A lot of my clients are manufacturers and obviously it's been a big hit to them because they've had to operate with like 25% staff. Some of them I think basically have just stopped all production and they're just feeding out of inventory that they, they have others, their customers all stopped production. So they're like, well, no, we don't even need to make anything. So that's been a big challenge and, and I've heard you know, for a lot of them, it's like initially I thought they were struggling.

 

Sam Schutte:

Cause I heard a lot of folks in IT talking about how they're just, it's just killing them, that all these people need to work from home. And I thought it was, well, maybe they didn't have the VPN hardware and enough count set up and stuff. And that may have been part of it. But I think it was more that not everybody had a work laptop. Right. And so then they get 350 people at home trying to work from their Mac, their desktop, their, their iPhone, their PC you know, all this. So it's almost like that bring your own device just exploded on steroids. And they're like 60% of my people, we can't get the DPN to work because they're on an old version of windows. I mean, it's just, you can imagine the chaos and how many weeks does it take you to fix that?

 

George Kamide:

Right? Yes. And the, in the distributed attack environment also. So I am on home wifi and off hours, I open something on the same computer that I'm using for work. And it's like a malicious link or malware. And then, Oh, Monday morning comes around on my VPN and like this transit straight into the corporate network. Yeah. Yeah. It's a tricky system.

 

Sam Schutte:

Yeah. And I, and I, you know, it's like good luck ordering 300 laptops from, from HP or something right at the start of this. I mean, what's, what's the lead time on that. Right. If you said, all right, we're just going to get everybody on there in laptop or a work laptop. I mean, it's going to be hard, right?

 

George Kamide:

Yes. Because there was a run on webcams and hotspots also. Oh yeah.

 

Sam Schutte:

Yeah. And so, so I think operationally it's hurt us less, but I think something that is a challenge, you know, for me, and I think for just about any business or all businesses is how do you sell and have meaningful prospecting calls and relationships completely virtually you know, I do all of the sales. I have some help in the marketing department and our business, but I'm really the sales department. And that's a whole other story of, of why that is. But you know, certainly I'm used to initial conversations taking place on the phone. But there's usually some kind of more in-person or at least often there's a more of an in-person sort of meetup as a next, you know, sort of follow up, just start to really create a relationship and some trust. And, you know, I think that's tricky and people are maybe still getting used to that over a zoom meeting. I think it's possible. But that's a little bit of uncharted territory. I think for anybody and everybody, I mean just imagine any kind of salesperson that typically wants to meet in person, how do they do that right now? And how do they, how do they create that relationship and make that sale? And granted, hopefully it's a little easier now that things have started to reopen. But even most of my customers, they're still not back in the office, so I can't go visit them.

 

George Kamide:

Right. Or even if it's different stages of reopening, we're not holding mass trade shows or even corporate dinners events, you know? So yeah, we, we are on the road quite a bit usually. And we, I think we miss some of that travel, not least of which cause we're tired of the four walls of our house by now. But yeah, that, that is tricky and that's actually one of the things that we're seeing a lot of is the need to embrace things like WhatsApp because these sellers can't go shake hands, face to face. So they have to pick the channel that is being dictated by the market. If you are working in Brazil, no one does email, right? So like the same sales methodology you would use in, in region in the US just to straight up doesn't work in some countries.

 

George Kamide:

So it's really the market forcing a lot of this change. So this is a great segway into the next question, which is since we're very much still in the pandemic and, you know, fingers crossed don't face a second wave in the fall. It seems we'll be here for some time. I think we're very well past the adaptation phase. You've either adapted or you haven't. But I guess my question is in the, in the calls or conversations you have had with your customers, what are they looking to now? We get the sense that people are looking not only at Q3 Q4, they're trying to think what is the technology I'm investing in now, because I'm not going to tear it out three months later. What can I invest in now that gives me a competitive advantage 2021. So just, it's interesting that you have a manufacturing customer set, but just trying to get a sense of where is that conversation in terms of how they're investing or, or looking ahead.

 

Sam Schutte:

Yeah. So I think really just about everybody is pretty optimistic. Definitely there have been some that have had furloughs perhaps even layoffs and the really, I think for the most part more furloughs with some particular customers. But I think, you know, they're looking ahead and saying, okay, we're going to come out of this. Like, and how do we, how do we get what we expect to maybe be a boom of work done later? And so there's almost like, how do we survive and how do we still kind of keep going right now and then, but, but also ramp back up. So that's typically, you know, I think the way people are looking I think from a sort of technology investment side it's interesting, some of them are saying, okay - and I saw this before in 2008, incidentally I had a number of customers that said, look, we are very well capitalized compared to the rest of our competitors in the market. We're sitting on, you know, X, million, X billion in cash or something. And so what we want to do is innovate right now and build like what we think are the future of tools and products. So that we come out of this will be three or four years ahead or whatever, the number of our customers that basically panicked and, and tighten everything down and did nothing. Right. And so that's kind of interesting. I mean, it's a luxury that, of course, if they're well capitalized, they can, they can do. And I think it's smart.

 

Sam Schutte:

Of course the risk is what I've seen. What happened back then is, is some of them innovated in the wrong direction and built products and services that work wasn't ready for, or you bet on the wrong, wrong tech. Yeah. And even if it's not tech, even if it's like, you know, we're making a new kind of soap or we're making a new kind of candy or something, we're going to build a whole new candy factory. And because we think people are going to be really into this, whatever, you know does it really come to pass? You know? And so, so it's, it's an interesting strategic decision. I think for the most part, like I said, people are either, you know, looking to build new systems or the other thing that's been really effective for us. That really is probably like the biggest lesson I've learned in the last three months is you know, packaging and developing products or services that are sort of the right fit for the right time. And, and really kind of honed in on that.

 

Sam Schutte:

So, so what I mean is, for instance, we've been offering, we, I created probably, it was probably about like October, November last year, I started building up this concept of a sort of like maintenance packages and service packages that were more like retainer based and more sort of all inclusive and all this sort of stuff that it was like one fixed cost they could look at and just say, okay, I can take care of my, IT problems, my software problems or whatever it is, and I can give it to this company. And I know it will not cost more than X per year. Right. and so what I've found is, as we went into March here and we had people getting laid off or furloughed or restricting, and then I'm, I'm, you know, sending out some of these offers, they've been jumping at them because they can look at it and say, all right, you know, this is not something where I'm paying an hourly rate.

 

Sam Schutte:

And I don't know what my cost is going to be. In some cases they've been told, like, no consultants, you gotta get rid of all consultants. Right. Well, this isn't consulting, right. This is a package. Right. You know? And so we've been able to position it. And I mean, we've sold three of those in the last three months, I think, to different customers that it's been a real rapid sort of turnover. And I mean, you know, it'll probably be 60, 70% of our, of last year's revenue. We already did this year in those maintenance plans. I bet. And I mean, they're a great deal for the customer. Cause then there's no risk to them. They know what it's going to cost. Right. and in most cases yeah.

 

George Kamide:

And not getting left behind there, at least maintaining.

 

Sam Schutte:

Yeah. Because the question it answers is like, well, how am I going to keep the lights on? If I have to, if I got to scale my team down from say 10 developers to 2 what you know, how, how do I do that? Cause we, can't just, we can just stop, you know? So I feel like it's a solution that really fit the right time. So that's, so that's been really interesting to me cause I think that's what I've seen in my customers too. And other just peer businesses, you know, everybody is, you know, maybe they used to make I have a friend that owns like a printing business. Right? Well now he's making the floor stickers, you know, the six foot distance stickers he's making the plastic dividers that are in front of restaurants and all that. Cause you know, he's not, he's not able to sell you know, restaurants, aren't like doing new menus maybe.

 

George Kamide:

Yes, I did. Well in terms of printing, I definitely joke with my wife that it's like the sign companies, because like everyone has to have a now open or like yes, we are open, or take out available or even the high school graduation lawn sign ceremonies. Yeah. That's a, that's a unique market adaptation. Yeah.

 

Sam Schutte:

How do you celebrate a graduate when they come? There's no graduation? Well, I mean, I don't know where the numbers are, but I bet those sort of graduation type signs letters, they do whatever they call that is just, you know, quintupled. Yes. So I think that's, that's, it's a sort of a, like a neat case study on whether you're a tech business or manufacturer or whatever your business is, you know, like what can you find right now that people are buying? And, and some industries have not changed much at all. You know? I think some particular industries like construction and utilities that are just kind of keep on rolling. I mean, they're delayed, but they're not, they can't stop. These are five, six year projects. They're not, they're not giving up on. So yeah, that's interesting. Okay.

 

Ashley Stone:

I like that you're highlighting, people are getting creative and they're they're resigning or adjusting to what's put in front of them. And I'm curious for w we've been talking a lot about digital transformation, but for companies or customers that you talk to that are hesitant or still cautious about taking action and actually jumping into digital transformation efforts, what would you say to them? What advice would you give?

 

Sam Schutte:

I mean, I think, you know, it's just vital. I mean, you can't, you can't wait till it's a problem because it might not be something that you can fix at that point. Like maybe it's too late. And I, you know, I don't mean to be a fearmonger, but if you, I have come into customers or clients that literally have just been left in the dust by every other single competitor in the market. And you're like, wow, you're still doing this all on paper. You know, you're still doing this you know, whatever in 1980s sort of mindset way. And, and then you say, cause what cause what happens is they say, well, all right, now I know, I know what's the cost to fix it. And you say a very big number and they can't really see what we can't do, that they can't do that.

 

Sam Schutte:

Well, why can't they do that? They can't do it because they've had to, their margins have been crushed already because they're doing stuff by hand. So like, if you look at them and let's say you've got a company making widgets, and I dunno, let's say they're doing 5% margin because everything is by hand and they're, they're boxing by hand and all this stuff, every one of their competitors using robots and all kinds of stuff, and they've got, maybe they've got 15% margins, right? So you go and you say, Oh, you know, we're going to need, you need to go buy $5 million of robots or something and 5 million or, you know, a million dollars in software or something. They can't it's too late. Right. You can't do that without what they're going to take out a massive loan cause nobody will give them the money.

 

Sam Schutte:

I mean, I've seen some very bad situations like this. Right. I had a, I had a prospect once I was talking to that, you know, they, they were doing and it kinda like really complex packaging design, right? For like, you know, products that you would go out and make a million, a million items and ship them all over - Walmart type thing. Right. And everything was on paper. And so they'd have this stack like literally a foot tall on their desk of the work items they did. And somebody had to go through and look at those pieces of paper and figure out what to bill for them for every single step. Like I touched this piece and that costs 20 bucks and I touched this piece, duh, duh, duh. Right. So because of that, they were 10 months, 10 or 9 or 10 months behind from the point when they shipped the product to when they sent the invoice out.

 

Sam Schutte:

Right. So they're sitting on all these folders sitting on money. And so you guys are sitting on money and he's, he's like, I have maxed out all of our lines of credit. All of our, we have, we are. So in debt, I'm running the business on debt because all our revenue is sitting in these folders. Right. How can we fix it? Well, I mean, we need, we need to do like three or $400,000 worth of software. Well, I can't do that, but yeah, no, you can't, where's the money going to come from? I mean, what are you going to do? Say, give me 20% of your business. I mean, you know, it's too late and

George Kamide:

Software loansharking. Yeah.

 

Sam Schutte:

And I think in the end, they basically, I think more or less sold themselves for pennies on the dollar, you know, that business.

 

George Kamide:

That's interesting. Yeah. I think yes, we try to tread a careful line. We don't try to be fear mongers either, but I mean, it is a very real risk that you will simply be out maneuvered. And by the time you decide, you need to make the change, the investment you're making is not getting you past your competitors. It's just getting you to where they were when they started. Right. You're going to play catch up for a long time. Yeah.

 

Sam Schutte:

Well, and I think we see that in, like, I'm trying to think of an example of a, you know, some bigger company coming out with an app that's trying to compete with you know some other real innovative app out there. Like, I don't know if you look, it's like some of the FinTech apps for instance, that the big banks are trying to come up with like, Oh, you can go to citi.com now and, and hook in all of your finances. And we'll tell you, your cashflows is like, yeah and guess what Mint is better meant is going to be better because by the time they really roll that out, it's out of date. Right. That's the universal law. And you know, and the thing is that, you know, at some point probably somebody at Mint might've went and pitched that to citi and they said not interested or something. Right. So it's like, yeah. I mean, those, those folks will never catch up.

 

George Kamide:

Yeah, that's interesting. Well we're almost at, at time, but I do want to acknowledge the present situation. So the, as you know, as we all know the murder of George Floyd has precipitated some very important discussions across nearly every industry. Ashley and I come from a marketing background. We've seen a lot there about ad spend and representation in creative to say nothing of representation in the actual room that is building ad campaigns and, and stuff like that. And we we've, when we crossed over to cyber and SaaS, we encountered very much, a lot of the same diversity and inclusion issues in this industry. But so I want to give you space as a technology leader, as a CEO, just to talk about what do you, what do you think is the role that technology leaders can play in this moment? Obviously we all have a different part to play. We're not policy makers, but what are some things that we can do as, as an industry as a whole?

 

Sam Schutte:

Yeah, that's a good question. You know, and it's a difficult one in technology because it's, there's a little bit of a, I mean, there is definitely a, like a representation problem, right? I mean, there's, there's, I think you know, if you try to have a real diverse technology business that's just, I think that's just really hard to do sometimes, you know, I mean, if you look at it in college in my computer science program, I think there was one female in our, in our in our major, at the time. And probably three or four folks that were from Asian countries or something like this, maybe one African American out of, out of maybe 80. Right. and of course you see those numbers play out throughout our field. But I think, I mean, it's, it's certainly something that I think I'm very passionate about personally, but that the question is always like, well, how do you, what's appropriate to let that sort of bleed over into your marketing? You know, you see a lot of these big companies, of course, you know, putting making it a major part of, part of their branding, Nike and others and stuff. Is that something that a small company or a small consulting company can do or should do? That's a good question. It's a good choice. You know, I mean, it's going to be polarizing if you put it out there.

 

George Kamide:

We've opted to have some very frank and difficult and important conversations internally. We're very much of a mind that lip service doesn't really, it doesn't really get you very far, doesn't solve any of the major problems. I think looking at sources of recruiting, looking at ways we can start to affect change further upstream. You know, we have some programs here where we're headquartered in Virginia that help give access to coding curricula into, into schools and stuff like that. But I think we're still having those conversations about, for the, what are the near term things and what are the very longterm things that we can do to, to invest in that.

 

Sam Schutte:

Yeah. And I, and I think for me, you know, where, when it comes to supporting diversity or supporting minority communities, let's say, or, or whatever you want to call that, that term, you know, there's sort of like things that I know I can do. Right. So like supporting or hiring vendors, doing more work from vendors that are, that are black owned for instance. Right. that's something that, I mean, there's no legal employment law type reason where you might get into trouble if you, if you do that or whatever. Right. and, and I have for, for certain services we're going for, because, you know, like for whatever reason, it's probably easier to find you know, like a graphic artist, graphic art design company, for instance, that's minority owned or is more diverse than say, like, you know, software developers or, or other things.

 

Sam Schutte:

Right. there's just more representation in some of those fields, I think. And then also just supporting like I'm very active, I'm doing a lot of like public service through my local rotary club. And in our key thing is working with disadvantaged children. And so, you know, like we did a thing it was in December, we went to the local boys and girls club and, and basically I, I said, all right, I want to buy a bunch of laptops for the kids here. Right. and got together. I think we ended up getting like 17 laptops that we, we gave to graduating seniors there. Right. and maybe just like trying to tell those stories, like, you know what I did on social media. Cause I mean, obviously I want to promote that we were doing this in the community, but then I talked about how like, look, you know, these kids are amazing, right. Like went down there and you know, you just, you walk any place you walk into like that, that you might have certain expectations. Right. and you're talking to these kids and, and one of the, one of the kids was like, well, I really want, this is going to be great to have a laptop because I'm actually designing a fashion line.

 

George Kamide:

Right. Yes. See close these gaps, technology gaps, internet gaps, whatever, the connectivity gap. Yeah.

 

Sam Schutte:

And the other. Yeah. And then the other, the other child, or the kid, he was probably 17, 16. And he says, well, this is me great, because I'm actually working on editing my novel. Right. Yeah. And it's funny because you know, our expectations and our stereotypes, we carry them with us. Right. And here's this kid he's wearing, like,m camo pants. He has a long dreadlocks. Right. And you think, and I said, well, what is your novel about right? Vampires. And it's like, Oh, that's not what I would expect. Right. So it just, it's interesting. It's, it's, it's educational and it's like, we gotta, you gotta put ourselves and have those conversations to all is sort of like very intentionally try to break down those preconceptions you have. Cause you wouldn't think that this you know, cause some folks were telling me like these kids, basically they come here to avoid the drug dealing scene in their neighborhood.

 

George Kamide:

Yes, yes. Yeah. We're a big fan of the boys and girls club. But I also, yes, I, I think that what you're highlighting is very important in terms of, you know, it's one thing, if you had written a check for 17 laptops and walked away being there and having that personal interaction, it is only in that meeting face to face and having those conversations that you're going to learn, those things you need sort of a long reach of the charity or the nonprofit can also create more alienation and more of a gap than, than needs to needs to happen. Yes.

 

Sam Schutte:

I think it's just trying to, it's just trying to be a good citizen and, and perhaps focus more on that. And in the type of things you're getting involved in you know, focus more on those issues. And you know, I think if you're a really big company, you can, you can really take strong stands and stuff on it and, and maybe influence culture, whatever around that. Whereas I think for a smaller guys, it's sort of like the little things that we can do, you know, I, I can't, I can't fund an endowed scholarship at Harvard.

 

George Kamide:

Not yet. Yeah.

 

Sam Schutte:

And if you get to the point, if I get to the point that I can, then I should. Right. So, yeah. It's interesting question. Awesome.

 

George Kamide:

Well, Sam, that is the time that we have, thank you very much for taking the time out of your day to have this conversation. It was very illuminating. I appreciate it.

 

Sam Schutte:

Yeah, no, absolutely. Thanks for having me. And it's been a good conversation.