John's Blog

Anthony is a founder of a company named Helpstream and it's former CEO.  I have been impressed with the company as one of the early leaders in the Social CRM space and was excited when Anthony agreed to do this interview.
 
Anthony, first off, thank you for taking the time to do this interview.
 
It’s my pleasure John.  I’m very pleased to be part of the larger Social CRM community, and I believe that what you’re doing is an important part of that.  These are exciting times.
 
Q.  Many of my readers are small business owners or those who are interested in starting their own business.  Could you share some insights about what motivated you to create Helpstream?
 
A.  I spent most of my early career in large businesses—IBM, Peoplesoft, and Adobe to name a few.  But the more time I spent in the IT industry the more I realized that this industry was built and is sustained by entrepreneurs and small teams of people with a shared vision to fundamentally change the way the world works.  That’s powerful, I wanted to experience that.   

With Helpstream, my team and I saw that the Web had fundamentally changed the way companies interact with their customers, but customer service was still being driven by the old model of avoidance and deflection.  Our big idea was that the social constructs and technologies made possible by the Web could radically change how customer service works – for the benefit of customer and company alike.   Together with three amazingly talented engineers and a great support staff, we built the core system and functionality for Helpstream, acquired an initial set of customers, raised capital from the venture community, and started showing Helpstream to a bunch of analysts and reporters who cover this space.  The reaction from the small but growing Social CRM community was incredibly positive.  It’s hard to explain the feeling you get from positive feedback like that--it’s a total rush.  When Gartner Group put is in a great position on their Contact Center Magic Quadrant just two months after we finished building the product, we were floored. We knew we had built something that was going to fundamentally change the way the world works.  You just can’t experience something like that in a large company.  It’s what being an entrepreneur is all about.  

Q.  What were the early days at Helpstream like?
 
A.  Three months in a high tech startup is like a year in a larger company, maybe more. So much has to be done, and there are so many moving parts. In any given day I was product visionary, product manager, sales rep, systems engineer, contracts lawyer, financial controller, marketing dude, recruiter, website designer, product evangelist, board member, fundraiser, HR manager, coffee machine repairman, dishwasher, and CEO.  Early on I decided to drive most decisions around our strengths and assets—leveraging what we knew and what we had rather than try to do things that required that we acquire some new skill or resource.  That’s a great way to stay focused and productive, and that’s pure Peter Drucker.  The team had a strong CRM, help desk, enterprise software, and business processes re-engineering heritage, so nearly everything we did was focused on leveraging that experience base.   We made a few bets, such as a totally relying on an open source technology stack and running the application on the Amazon cloud, but because we religiously focused on our strengths we were able to turn big bets into relatively small bets.
 
One-by-one, skill-by-skill, we added key members of the team. Team building is so critically important. But it’s a stair-step process, each hire incrementally improving your ability to hire an even better resource.  Everyone wants to hire “A” players, but that’s a chicken and egg dilemma.  You often need to increment your way there—doing so as quickly as possible.  One of the best hires I made was bringing on Bob Warfield to run the products team about a year ago. Bob is now CEO, and his success rate with startups is astounding.  Bob really helped us internalize the startup success model: develop “the goods”, create buzz, turn that buzz into prospects, and turn those prospects into customers.  Too many companies try to create buzz before having the goods, so we worked really hard to make sure we had the goods before beating our chest about it--not letting the buzz get ahead of our ability to deliver.     
 
Q.  All companies have their ups and downs.  Was there a moment when you asked yourself if it was worth it?
 
A.  There were so many moments I stopped counting. It’s in those situations that you get to know yourself very well--your true character and value system. Loyalty is very important to me personally.  Loyalty to the team I work with, the customers I serve, the business partnerships I develop, and the investors and bankers whose funds I solicit are all very important to me. That probably puts me at odds with a lot of people in this industry, but so be it.  I have always placed more value on authentic personal relationships than short-term financial outcome.  
 
There was a point in early 2008, before the financial markets meltdown, when it became clear to me that the SaaS business model was going to make it nearly impossible to really increment up the value of the company for at least 2-3 years. A lot of people in my position would have probably bolted at that point. Subscription revenue businesses like SaaS require a lot of up-front investment in sales and marketing before renewals kick in and margins improve. But the venture capital investment model in Silicon Valley is optimized for investments in intellectual property, not sales and marketing expense.  That’s a reality that is just now being widely recognized and is a huge, growing problem for the SaaS industry.  I saw it coming way ahead of time, and I saw that there was going to be a lot of investor angst and almost no financial upside for me for quite some time. That was my “big gulp” moment. But I decided to push ahead because I believed in what we were doing and wanted to be loyal to the people who I brought along for the ride. Keep in mind that my “big gulp” moment came before the financial markets meltdown and the deep recession that has followed.  Throughout that time Helpstream’s business has grown and prospered and is transforming the way companies engage with their customers.  That has made everything else worth it.         
 
Q.  There is constant discussion about Social CRM, how do you see it evolving in the near future?
 
A.  I had the opportunity to live in Japan for several years and that experience forever changed the way I view customer relationships. I was running Peoplesoft Japan at the time and we had just acquired Vantive—the call center company. Vantive was the CRM market share leader in Japan, dwarfing Siebel in that market. It turns out that Japanese businesses were more interested in investing in customer service than in salesforce automation. It wasn’t that they weren’t interested in growing revenue like their US counterparts, they simply believed that more revenue would flow by engaging with customers in the service process than in the sales process.  That was a real eye opener for me, particularly as the Web began to dramatically amplify the voice of the customer.  So living in Japan and running Peoplesoft Japan completely changed things for me and gave me a lot of confidence in what I was trying to do with Helpstream. 
 
I truly believe the equilibrium point we’re headed for is customer deflection being completely replaced by customer engagement.  This will be enabled by applying new social constructs and technologies made possible by the Web. Social CRM will show companies how they can build and leverage customer relationships like never before. Helpstream refers to it as the elimination of customer waste. The fact is that customers are the most under-utilized asset companies have, and Social CRM provides the means to flip that on its head.  Near term, companies are going to start re-evaluating their business policies and processes in light of the benefits they can gain by leveraging their customers in ways they never thought possible.          
 
Some members of our SCRM community have been using the word co-creation to describe the longer term value of SCRM, but I’m not a big fan of that word. It doesn’t reflect what I experienced in Japan. The Japanese approach is beyond co-creation. When I was at Peoplesoft I had an enlightening conversation with the CIO of Toyota. I told him that we could build anything they needed for ERP. He told me that if he knew what they needed then he wouldn’t need Peoplesoft. Our job, he said, was to anticipate what he needed and deliver it at the very moment he needed it. If he had to think about it then we had failed him. You can bet I never asked that question again! 
 
There’s an All Nippon Airlines advertisement that depicts the same concept.  It shows a flight attendant with an origami swan concealed behind her back while she attends to the needs of a child passenger.  The caption above the picture says “anticipate”.  That’s exactly what the CIO of Toyota was talking about. Delight follows anticipation. In the longer term, Social CRM will enable us to move toward this “sushi culture” of providing customer what they want without them ever having to think about it. The companies that figure out how to do that first will rule the world.  Some, like Apple, already do.             
 
Q.  I know you are no longer the CEO at Helpstream.  How are you spending some of your newly found free time?
 
A.  I guess I’m still looking for that elusive free time!  I’ve definitely shifted from reading a lot of email to reading a lot of books and from meeting with the same 7 people everyday to meeting with many more friends and former colleagues a lot more often. I can’t tell you how many industry friends I’ve run into at Starbucks and In-N-Out Burger. I think the In-N-Out Burger at Rengstorff and 101 in Mountain View has become the new Bucks! (Bucks is a café in Woodside known as a frequent meeting place for IT industry insiders).     
 
Q.  When you're not working, what do you like to do to relax?
 
A.  Having grown up in Orange County (in Southern California), I’m pretty much a beach bum.  Give me a board and some waves and I’m in heaven.  Absent that, I’ve been roughing it around the pool with my Kindle and a bottle of largely unused tanning lotion. 

Q.  I gave Paul Greenberg a hard time in his interview about being a New York Yankees fan (I follow the Red Sox.)  What's your favorite team?
 
A.  I’ll answer by saying that one of my favorite childhood memories was watching Bob Welch strike out Reggie Jackson in Game 2 of the ’78 World Series. I guess you could say I’m from Brooklyn via Los Angeles. You may also be interested to know that I wore a Lakers cap to a Red Sox game at Fenway during Game 1 of the ’85 NBA Championships.  Good thing the Celtics won by 34 or I may have never made it out of Fenway alive.  I think you east coast sports fanatics need to grab a board, head to the beach, and relax a little! :-)    
 
Q.  What's next for you?  Will we see you founding another market changing company in the near future?
 
A.  When I graduated from college I received job offers from IBM, Exxon, and GTE. I chose IBM because I wanted to be part of an industry that was constantly changing. That was the most important career decision I ever made. It has been an amazing ride, but I believe the journey has just started. I love to innovate and I love technology, so you can expect to see me driving technology innovation for many years to come. That said, 3 mega-trends have really grabbed my attention lately: a) continued economic, social, and physical mobility, b) the increasing dominance of Chinese culture, and d) the strong human desire to live forever while looking and acting like we’re 25 year olds. Somewhere in the intersection of those three trends lies an opportunity to improve the way the world works, and I can’t help but think that the work I’ve been doing to leverage the Web and social communities will have a place there. In the meantime, I hope to remain a charter member of the Social CRM community and contribute to everything our community is doing to make life better for customers and the companies that serve them.        

If you have any questions for Tony let me know as I know he'll be happy to follow up.

John