Guest: Adrian Blanco
Company / Business name: Think Smart Incorporated
Business website URL: https://ThinkSmartInc.com
Rob Ross is the President of Think Smart Incorporated, an application hosting company in the cloud catering to Optometrists and dentists. Rob started his first company building personal computers from computer parts imported from abroad. After selling his first company before his 20s, Rob started his second company to manage infrastructure and networking for medium sized companies and rode the internet growth. Rob identified Cloud computing as the next big thing and started his current company in the early 2000.
Rob talks about starting his company when he was still in his teenage years and how he moved out of his house and lived in the office to get the company going. His company was assembling personal computers from imported parts just when the personal computer was revolution was picking up steam.
After selling his first company, Rob identified the trends towards outsourcing of computer infrastructure and networking and started his second company. In late 1990s, just when the internet craze was at the peak, Rob was able to sell his company and was sitting on multiple millions of $ on paper. As the internet bubble burst, Rob saw all his ‘millions’ vanish but still was sitting on decent profit.
Just when Cloud computing was taking off in early 200s, Rob started his 3rd startup, Think Smart Inc. hosting applications in the cloud for optometrists and dentists and other small businesses.
Rob shares his experience building businesses from scratch and the ups and downs of hiring people, firing people, and dealing with tough customers. Rob also shares his views on the next technology trends (extreme personalization of services) and how to ride the next wave.
Episode Transcript (Click to expand)
Ramesh: Hello everyone. Welcome to the agile entrepreneur podcast. This is your host, Ramesh Dontha. This podcast and of course the video cast here is for all entrepreneurs, aspiring entrepreneurs to start their own business with purpose, passion, perseverance, and possibilities. Today I'm very excited to introduce you to a guest, a serial entrepreneur who started very, very young and a very good friend of mine, Rob Ross.
Rob: Thanks for having me Ramesh.
Ramesh: Rob Ross is the president of things smart incorporated. Rob. So, think smart and incorporated. What does it do?
Rob: Well, think Smart is a is a cloud hosting company, which just simply means that we take a software application, we put it into a remote location and we host that and allow people to use the application remotely from all over the world without having to have their own equipment and infrastructure in their office where they're not experienced enough to do so.
Ramesh: I see. So, if for somebody who doesn't know this stuff, is it like Amazon web services? A very specialized web service.
Rob: Yeah. It's very similar to that. It's essentially just a, we take an application, in our case, we predominantly work in the optometry industry and dentistry as well. And so, and the optometry industry, we take an application that specifically runs a small optometry office, we move it into the cloud and then we allow that optometry office to have access to that application from anywhere on any device.
Ramesh: Okay. So, and then having known you, this think smart incorporated is not your first business. So how many businesses did you have?
Rob: So, I’ve had several, three really businesses that really define who I am and where my journey's begun. And those started back when I was 13 to 15 years old. Really long time ago.
Ramesh: I can’t imagine. Okay. So, I want to start from there. Okay. So, at 13 to 15-year-old kid, right? Anybody that I know, nobody started a business. So why did you start a business when you are between 13 and 15 years old?
Rob: I think it had a lot to do with our education system. And the fact that I learned quickly and our education system in schools aren't just set up for, to allow someone who learns quickly. We sort of learn and then we do six weeks of homework. And I learned quickly and then was like, okay, what's the next thing? And I wasn't able to do that. And so, I took my time and chose to not go to school much. And I would end up at usually a local mall or somewhere where they had computer stores. And I started to hang out in there and really got acclimated to technology.
Ramesh: So, what was your first business?
Rob: So, my first company was a company called RLR systems plus, and I met a gentleman who later became good friends with me, and he imported computers and computer parts directly from a manufacturer in Taiwan. And so, I started working with him and then eventually bought that business at 15 years old and started doing my own imports from there and started building custom machines. And that really made a big difference.
Ramesh: So, did you one con of your home or did you have actual office where you're working out of?
Rob: So, he worked out of his home, which is interesting. And then so when I took over the business, I immediately wanted to take it bigger and wanting to do more things. And so, I leased a space.
Ramesh: When you were 15 years old?
Rob: 15 years old, so I leased a space. I found a space in my local city, commercial building where the owner of the building was didn't live in the city. And so, we did it all by the transaction was... He had no idea that I was 15 years old. So not only did I lease that space, but then eventually I decided that I knew more than my parents at the time. And I decided to move into that space as well. So, I slept on a couch and it was a great experience and something I don't regret at all. And then eventually sold that business to someone else.
Ramesh: So how long did you have the business?
Rob: I had that business for about two years and then sold it to someone else and then they ran it for a while.
Ramesh: So, what did you do afterwards?
Rob: So, my next company was a company called integral networking corporation.
Ramesh: In between, did you go to college or do you start the company?
Rob: You know I did a lot of different things. I actually went and tried different industries to see what I wanted to do, and I kept coming back to technology. So, technology has always been my play and the thing that I wanted to do most, but I did take some time out. I went to work for bill Graham presents. I went and I was a lighting director for concerts and traveled all over the US doing that. And just tried various different things, but it always seemed that home was back where Technology was.
Ramesh: So, your second company how, like, how did you start and how did you get your first paying customers?
Rob: So, the second company was integral networking corporation, which eventually became the largest systems integrator in my city, which is in, I'm in Northern California. And so, it became one largest integrator there. And we started me, and a partner started the company. We were working for someone else and networking which is so common today was new at that time. And we figured it out. So, we had a good handle on it, and we figured out how to do it. And later we determined that we could do a better job than the company that we were working for. So, we started that company and that company was run for 12 years.
Ramesh: So, this was the second company even before you were like 20 or something?
Rob: Yeah, I think I started an interval networking in well it was 1988. So that would have made me about 20, about 19 or 20. Yeah.
Ramesh: Okay. So then how tough or how easy was it to establish the company and then keep it growing?
Rob: You know, I think starting a company is not that difficult. But the interesting part about it is that it's just, it's mysterious and there's so many different things that you don't know, and you get worried and caught up in all those mysterious things. Regulations regarding licensing and businesses and type of company you are starting, is it going to be a sole proprietorship or a corporation or general partnership or all the different things and taxes and everything. And I think people lose the fact that they're starting their company and they're starting their passion and they get caught up in the, Oh, it's just too difficult. Or it's just too this, it's not too difficult. It's just another skill that you've got to learn. You know, I don't know how to bake a souffle, but if I learn how to bake a souffle, I can bake a souffle and I'm okay with that.
Ramesh: So how long did it take for you on your partner to have your feet on the ground and said, we are comfortable, with the second company.
Rob: I think it took a couple of months. Mostly because we didn't have. Yeah. Just a couple of months. We relied on anyone we could that would listen to us. So, I had done some work for a company at one point when I was previously with the other place that we were at. And that person said, wow, you're really good at what you do, and you should go into business. And so, I called him out of the blue and I just said, Hey, you said you'd helped me. And he gave me a card table, you know, just a small table and a phone and said, you guys can work here. And so, within a couple of weeks of deciding we were going to start, we had a pseudo business plan that we didn't know how to write, but we chose to write it. And we had a commercial location. And so, we opened business and started working really hard to find customers.
Ramesh: So then initially, so you relied on your network and you call somebody and that's how you got your first paying customers.
Rob: Yeah. And I called someone that I had met one time.
Ramesh: Actually, that's what I hear all the time that your network is your strength and then if you rely on it, you'll get it.
Rob: Absolutely. And to even, you know, go farther into that, you really need to rely on your network and your network can be, you'll be amazed at what your network really is. Most people think their network is their friends and family and business associates, but it's more than that. It's your friends and family and business associates. It can be a neighbor, it can be someone that you meet at the grocery store. It can be anyone who's willing to listen to your passion and then maybe willing to step up and help you in some, even the smallest way.
Ramesh: So, you had this gig for 12 years.
Rob: 12 years. Yeah.
Ramesh: Was it a smooth ride all along?
Rob: It was a Rocky ride all along.
Ramesh: So, we talk about those.
Rob: it was an interesting journey. We started as two young kids in a space that was lent to us, you know, a small table and a phone. So, we were actually the company that lends us the space. It was a heating and air conditioning company. So, we literally started in that. And we worked really hard. We did everything we could to promote our company. So, we went to every local event. We showed up, we went to everything that we could, any way we could promote it. We probably handed out more business cards that year than anything else and we weren't shy about going in and talking to people and telling people that we were the best.
And we went in and told them that. And eventually people started listening. And I would say we started having real paying customers probably within about 90 days. So it was, it would have been better to have them in 60 days, but we had them in 90 to 120 days.
Ramesh: So then 12 years, but there'll be lots of ups and downs with, so the employee hiring. And so, any things that come to your mind as the, some of the, you know, some of the downsides?
Rob: Yeah. Well I think a lot of the downsides were a lack of preparation. Lack of having the, having someone tell me, Hey, you really need to plan in this way, or you really need to, here's how a business plan is written, and this is why it's important. Here's type of marketing that would help you out. These are the types of things that you need to do today. And I think that you end up falling in pitfalls or pit holes that you don't really need to fall into, but you don't know where they are. And so, I think that's the amazing part about, about your book is that it gives you the step-by-step of, of exactly what you need to do today. And that's something I wish I would have had because that would've made a big difference.
Ramesh: So, did you have any mentors during this 12-year period or somebody that you [ 10:38 inaudible].
Rob: Yeah, I think if you don't have mentors, I think you go insane. You have to have someone you can bounce things off of. My mentor is varied, and they varied because they, each one had different skillsets that I relied on. So, I had a mentor that was like a mother to me. But she was a person, a big executive at AT and T. And really didn't have any entrepreneurial experience but had a tremendous amount of organizational.
Ramesh: How did you meet her?
Rob: I’ve known, she's like a mother to me, so I’ve known her forever. So, it's someone that we've known for a long time within my network. And then I met a gentleman who turned out to be a venture capitalist and a serial entrepreneur himself and started talking to him and we became friends. And so, jeez, that was, you know, 30 years ago and we're still friends today and we still talk today, and I still rely on him and he relies on me for certain things as well. And then I think the other thing is, is that I reached out to score, which is the a service Corps of retired executives through the small business administration and reached out to them and you'll find that you know, some of the guys that are just trying give back that they're, they're a gem when they're trying to find things and they're free. So, it's a great resource to go to and talk to people. But really your mentors and the people that you rely on probably are people you don't think would be good in business, but they really will help you. It can be a parent or a friend or anyone.
Ramesh: I keep hearing the score actually, I think score seems like a very good resource actually for a lot of them.
Rob: It's a great resource and it's a service that's provided. It's a set of, of executives that have run, sometimes very large companies that don't, you don't even think might apply to you. And they just want to give back. And so that's what they're doing.
Ramesh: So, Rob so this book he talked about the 60 minutes startup. Yeah, something that I started, I'm very passionate about it. I'm very honored that you are included as one of the 30 entrepreneurs in the book. So, it's a 30-day step-by-step to launch your business and get your first paying customers in 30 days. Okay. So that's out of the way. So, I mean out of the 750 entrepreneurs that we shortlisted, so very honored to be there and that your chapter, it starts with how passionate are you, right? So, and the reason, the way I title that book, how passionate are you is that my belief is that passion is important, but at times passion can carry you in different directions to this type of business. People are so passionate about their business, they forget about the profitability of the business path. So, can you talk about your passion for technology? How did it help or hurt the building the business in a profitable way?
Rob: So, I think how it hurts is when you have a passion for something, you tend to want to be the best at what you're doing in that world. And you don't realize that when you start a business you suddenly become a multiple, you wear so many different hats and you suddenly become different persons in different roles that you have to play, that you probably never dreamed of. And I think that's highlighted. I don't talk a lot about books, but there's one book that I talk about that is, it was a book written in 1953 called the E myth and it was by Michael Gerber and one of the things that is talked about there is it profiles a Baker. And that's a gentleman that's an amazing Baker. And he opens a bakery and he realizes very quickly that he's no longer a Baker. He is now the salesperson and the accountant and the business owner and the inventory specialist. And on and on and on and on. And those are things that they didn't count on. And I think that his passion as a Baker and my passion in technology that's where it hurts you. In the early days in technology we used to, we used to love to be the first person to touch the latest technology was out there. Well, the problem is we often in order to have that that gift, if you will, we would sell those products at near cost just so we can be first. And you realize that although it made us first, that wasn't a really good business choice. It was a good choice for us as technology people because we really love the gadgets and technology and all the different things that help people. And we learned a lot, but it didn't help us in business. And I think that's because we didn't realize that at that point, we were wearing the hat in the business as an engineer or as a technology specialist that didn't really produce income. And so, we need to be focused on those things. And so, what I’ve learned about passion is you've got to be passionate and not just what you started the company as, or what your passion to get you opening it as. But as all aspects of business. I think that with me specifically, it took me a long time to change the title of my business card from systems engineer to president to a business person and I think it's because I felt it was pretentious or it wasn't me. And no, I'm an engineer. This is what I do. And I realized that if I'm going to do things successfully, I have to embrace all of the hats that I have to wear. And ultimately that's been a good journey for me. And it was a great life lesson.
Ramesh: Actually, that is fantastic Rob, because many engineers, technologies, I know they pride themselves being such a technologist, when they start a business, they forget about the business aspects of it. And that's a huge mistake.
Rob: It's a massive mistake, but it's a massive mistake for any business, right? It doesn't, whether you're a Baker or whether you're a technologist or whether you're a consultant or whether you're a hairdresser, I think that your passion for what you do as your craft needs to stay your passion, but you need to make sure that you get passionate about the other aspects of your business journey. And those are things that are really, really important. For me, one of the things that keeps me passionate about the business journey I am not a sales guy. I just, it's not my passion. So, what I learned a long time ago is that I work with the best sales people. I hire the best people to surround me. But I learned to saying a long time ago, and I’ll never forget it as long as I live, the saying is, there's margin in mystery. And so, finding something that's mysterious that other people don't do or don't know how to do, that you can then do well helps you to stay focused on your core passion, but still do things in business. So, it's an interesting way to think about things. For example, I don't know anything about repairing cars, but I know that if I ever was going to start an auto repair business, I would probably do automatic transmissions because nobody knows anything about them. They're the most complex thing in the world. And so, it's mysterious. And so, there's margin in that. There's money to be made in doing something that's specialty. And I think that with me, that's where my passion focuses on. So, I changed my passion to look at the hardest thing to do in technology, the most valuable thing to do. And I don't just go and offer a service that 50 other people are offering. No, I offer something that's very unique and that's what helps me in business.
Ramesh: Yeah. Actually, that's interesting because you said you started in 1988 and 12 years. That brings us to 2000, the year 2000. So sold your company in the year 2000.
Rob: Yeah. So, I sold, so I sold my company in 1999 to another company that liked our mix of products and services. And had the ability and the money to finance that. It was right at the time when all the dot com boom was happening. And it was in the middle of all of that. And so, we ended up going through an IPO, a public offering and overnight, it's a, it's a great story and I’ll shorten it. But overnight I went from you know, a pretty young kid to a multi multimillionaire overnight and on paper and on paper. And then about eight months later, the bubble burst of the dot com business and we actually weren't in the dot com that was interesting. But because we were in technology and we got lumped into that and so I watched my stock certificates, which were just, you know, pieces of paper that I laminated. And I watched those go from a value of $24 million to be the value of a place mat.
Ramesh: I am so honored to talk to a multi-millionaire right in front of me.
Rob: Used to be a multi-millionaire. But it's been a great journey and it's given me the ability to meet a lot of people. And I really used that to parlay my last business, which is been very successful.
Ramesh: So, it looks like, so you started a networking company solely, now you have a cloud hosting. So, you seem to have a knack of identifying the trends just when they take off because the cloud, if I remember it was taking off in early two thousand kind of stuff. Right. So how did you get into this, the cloud hosting business with think smart?
Rob: You know, we started off really think smart, started off being a, an extension of our last company. And so, we took what we knew, and we started off doing the networking piece and we started to see that space get crowded. And when we used to go into a company and talk to them, and there was maybe two people that we would competing against, we were now competing against 20. And we felt that that the space was getting commoditized and so we started looking for different ways. And I think that's one of the things that's really important when you're in businesses. The ability to morph, the ability to see trends and the ability to be able to change the business and not be scared about those changes, those changes can be scary, but they're really important. And I think that this again transcends back to what you said about passion. Take that passion of knowing your industry, whether you're a Baker or a hairdresser or whatever the passion is and, that's where you really focus your passion is you have the ability to identify what's going on in your industry as a whole because of your passion. And then use that on how I make sure and ride these trends or move to these trends and be nimble enough to do so. And I think really be accepting enough to know when to change. And that's a tough thing.
Ramesh: Yeah. I want to get some tips from you. So, what are the trends you're seeing now? So maybe I wanted to go and start that business.
Rob: Wow. I think the trends now are moving in a lot of different industries to customization and personalization on the individual. So, we're seeing this in the medical industry. For example, one of the things that's happening now is that instead of taking, say if you have a disease like cancer, instead of taking a generic cancer drug that's made for everyone to treat symptoms, they're literally going and saying, what type of cancer do you have? You as an individual and let's go and design a drug or some sort of treatment that is specific to Ramesh. And that's happening and we're seeing that in all different industries. So, we're seeing this hyper customization, if you will. It used to be in the printing industry. If you wanted to print posters, you had to order 5,000 posters because they had to do it. I can now order a poster, I can order a single poster and I can get it in two days. And it doesn't cost, you know, it used to be that they would set up these huge machines and everything to print that poster. And so, if you wanted one, sure you could get one, but it's going to cost you $1,000 and now I can get one for $3 or whatever it is. And the same thing's happening in our industry as well. We're starting to see the customization trend. So, we're starting to see things where we can identify a trend and make custom software or custom services that are detailed specifically to an individual company. Quick example is we have a product that allows one of our clients to enter in service tickets into our, into our system so that they can get help when they need it. We're now doing things where we're custom branding it to their company. So, we're adding their logos and their color schemes, and it feels like they're more connected and it feels to them like they've got something special that they can now be a part of. And so that customization is happening in our industry and we're seeing in the medical industry and we're seeing in other industries as well. And so incredibly custom and hyper focus to an individual or even an individual office.
Ramesh: Is it because of the barrier to customization personalization has come down.
Rob: Yes. Yeah. I think technology, when you are in my industry, I think technology has changed so much that in the old days we'll use the printing industry. If you wanted that one poster printed, you know, they would have these huge presses that would be different colors and they would have to run it multiple times. And that's all been consolidated into a digital press or a digital printer where they can literally send a print job and it just comes out. And so, I think that you're starting to see those things and people are starting to ride those trends. And I think the successful companies of the future are going to really go into this hyper customization and being able to tailor things specifically. So, the days of me offering a service, for example, and saying I'm going to offer a cloud hosting service to all of the optometry offices and they're all going to fit into this one box. I don't know if it's gone, but I know that it's limited and I know that it's going in that direction. And to where we're going to have to have a menu of services and let people pick and choose between those menus of services and then further hyper customize that to that individual. And I think those are really where the trends are going. And I think we're seeing that across broad scopes. I mean, we're seeing it in drug companies, which is fantastic because in 10 years you're going to start taking the cancer drug for Ramesh and that's a huge thing and I don't, it's an amazing place that we're going in that world.
Ramesh: Excellent. So, Rob, just switching gears, looking back at your journey for multiple businesses over there, things that you think you could have done differently through the different areas.
Rob: I don't think we have the hours that it's going to take to talk about that. I think everyone will have things they could do differently. I think it's one of the things that I could talk about is really to say, surround yourself with people that are better than you. That's a big one. I see so many people that sort of try to hire people or or surround themselves with people that they can control or that they can put into a shoe box, if you will. And I did that. That was a huge mistake that I did. And, and I’ll never forget the day that my three most important people in my company sat down in the conference room and all at the exact same time push their resignations over to me and they didn't want to resign, but I was too controlling. And I was micromanaging every move. And what I found is that if I just let those people go, if I let them do their thing, they were amazing. And that their heart was focused on the business. So, having controls is very important, but letting people explore their own skills and their own passions. And working with you. Ultimately the people that are surrounding me make me look better because they're better and ultimately, they're probably better than I am in a lot of cases and they really help out. So, I think that's one of the things, I think the other thing is stay focused on the numbers but don't sleep with the numbers, you know, stay focused on what needs to be accomplished. I need to get revenue, I need to do this. And make sure that you keep those things in mind so you're not overspending.
Ramesh: What are the downside of like, why you are saying that don't sleep with the numbers.
Rob: Don't sleep with the numbers because you don't want to take things home with you. And I did for many years. Business is a passion. It is a lifestyle in a lot of different ways. But it shouldn't be your life.
Ramesh: As an entrepreneur. You're consumed by the business so much. That is one of the things that you are saying that be careful about that.
Rob: Yeah. I think you need to be careful of those things. And then I think finally a thing that we talk about around here often is we have two sayings in our business and both of those are absolute core values of our business. One is always do the right thing even if you lose money. And just meaning that the customer's not always right. I know that's the saying that ever says the customer is always right and that doesn't mean the customer is always right. I think what the saying is talking about is you should always do the right thing for the customer, do the best thing for them. There are times when customers are unreasonable. There are times when customers say the wrong things. There's just all kinds of issues with that saying, but it means that you as a company need to take the higher road and always do the right thing for the customer. That has always worked out to us financially to put us in a better position. When I have gone overboard for a customer, I end up making more money even though something happened that caused me to go overboard and the customer because they talk about it. And it's really important for them to do that. And then the other thing that we have here that really, I would encourage everybody to understand is we have a saying called something given for nothing has no value. And essentially what that means is that if I do something for you that's special, but I don't tell you it's special or I don't give you an idea of what you're getting to you, it has no value because to you it was just what I did. So, if I normally charge someone $100 to do a service, and I say to you yeah, so that'll be $50. You don't know that I'm giving you a $50 value. You're not excited about it and you're not charged up about what, wow, this guy is doing some really great stuff for me. And so then maybe later down the road if I double your price, you see it as a doubling of price. But really, I may have tripled other people's prices. So, it just, it's a, it's something that we always say, tell your customers. It doesn't mean to be boastful. It doesn't mean to go in and say, Hey, I'm doing this for you. It's just to say, you know what? We normally do this, but I want to do this special thing for you and make it special. Because once it's special, then people feel connected to you and they feel loyal to you. And those are things that that give your customers and build longevity with your customers.
Ramesh: So, it basically goes from a sale to a relationship.
Rob: Yeah, absolutely. And that's exactly what the goal is because relationships don't go away. Exactly. Those numbers are really important, especially if you're in a business that doesn't do things like recurring revenue or doesn't have revenue streams. If you're in a business where a customer ends and another customer begins, just remember that and I don't know, depending on industry, this numbers will change. But traditionally it is, it's two thirds less costs to keep an existing customer than it is to go track a new one. And so, you want to, and you know, I always say, what is it? 74% of statistics are made up on the spot, which just means that, so it could be wrong, but the point is, is that the point is that it costs far less to keep that existing customer. So, figure out how to get recurring business from them. If you're a Baker, find a way to make sure that that person comes in every Tuesday. You know, you need to make sure that you're selling enough jelly donuts to make the payroll and everything else.
Ramesh: Excellent Rob. So, the final question. So, I'm an aspiring entrepreneur, right? I want to start a business. So, what are the few things that you can tell me, piece of advice based on what you have done?