Jason Blessing (00:00):

Unless you are again Mark Zuckerberg and found the next Facebook, your career is going to be an ultra-marathon. It's not a sprint, it's not a marathon. It is an ultra-marathon. And in my own experience as a CEO now, and just knowing a lot of CEOs and knowing a lot of software executives, the most successful ones have a balanced life.

Kate Atkins, host (00:22):

That was Jason Blessing during a 2015 talk at UMSI focused on entrepreneurial success. And this is Information Changes Everything, where we put the spotlight on news and research from the world of information science. You're going to hear from experts, students, researchers, and other people making a real difference. As always, we're presented by the University of Michigan School of Information, UMSI for short. Learn more about us at si.umich.edu. I'm your host, Kate Atkins. Today we'll hear more from Jason Blessing, who at the time of this talk was CEO of Plex Systems. He's also a member of the UMSI Advisory Board. Blessing will share his tips for success in entrepreneurship and what he learned building a startup from the ground up. 

Before we jump in, a few other people and projects that you should know about. First, congratulations to David Gamba, a PhD student at UMSI who published his first paper titled “Exit Ripple Effects: Understanding the Disruption of Socialization Networks Following Employee Departures.”

(01:32):

The study examines what happens when employees leave the workplace. Gamba explores how individual actions can influence group behavior. Finding that an employee's departure can increase organizational stress and create breakdowns in communication in the short run. 

Next, researchers at UMSI have developed a tool to measure hateful speech, offensiveness and toxicity in social media. Comments about news stories created by UMSI's Center for Social Media Responsibility. The tool led by professor Paul Resnick and his team allows users to compare toxicity levels on Reddit acts and YouTube. Despite varying reactions to news events, they've surprisingly found that individual platform toxicity has remained largely stable over the past two years.

(02:25):

Finally, over 25 years, the US National Longitudinal Survey tracked thousands of people starting in their teenage years to determine how social, environmental and economic factors impacted the course of their lives. The Pudding has created a data visualization that brings this study to life, starting with a high risk teenager named Alex. One cool feature, click on any individual in any year to see their backstory and where they are in their lives. For good or for ill. For more on all of these stories, check out si.umich.edu or click the link in our show notes. Now back to Jason Blessing.

Jason Blessing (03:06):

So my background as I reflected on this, I've actually been an entrepreneur since the ripe old age of 10 years old. And I remember one summer wanting to have a little walking around money as a 10-year-old. And as I said, I grew up in a small resort town in the west side of Michigan, a little town called Spring Lake, if any of you're familiar with that side of the state. And I convinced my mom to take me down to the local marinas and she drove me around and dropped me off and I'd made up this nice collateral back in the day. It was just paper, nothing too fancy, and walked up and down the docks as a 10-year-old pitching my services and I looked back on it and it was just a great experience to sell yourself and your services and actually think about how to put together services and frankly sell 'em to a guy who's now in my age, my shoes.

(03:54):

And I have to say, I think probably a lot of them just felt pity for this little 10-year-old who was probably figured the parents had sent 'em out on hard labor. And I ended up, that was what I did. I ran a boat cleaning business up until I actually, until graduated from University of Michigan, ended up having people working for me and it was kind of a big business, but at the end of the day, it was a lot of manual labor and not a lot of upside in the boat cleaning business. It's about a three month season in Michigan and I needed to find some other things. So as I said, ended up at Ann Arbor. I told you my story of how I got here, one of the best decisions of my life. When I graduated, I remember having conversations with my counselors and I had no freaking idea what I wanted to do.

(04:39):

I had no idea. And so I share that with you because if you feel that way, if you're still an undergrad freshman, upperclassmen, it's okay. It is absolutely okay. I had no idea what I wanted to do and my counselor said, just start interviewing. Just start meeting some of these companies that are coming in and you'll figure it out. So I ended up going to Pricewaterhouse back when it was called Pricewaterhouse. It's changed a little bit over the years. And I did consulting and it was awesome. It was an awesome place to start my career because again, they train you really well. Real-life experiences about how to manage teams, train you in new technology, you get to travel all over the world, sell your services, work with exciting companies. So it was a great experience, but a lot of people eventually, like gosh, getting on a plane every week isn't quite the rockstar lifestyle that it sounds like.

(05:29):

And they eventually get to the point where they want to make a career change. And so I was at Pricewaterhouse, I was doing PeopleSoft work, which at the time was an ERP company, an enterprise resource planning company that was brand-new, cutting-edge. It was client server software and it was the wave of the future. And I was doing those implementations again, first project out of college at Pricewaterhouse, and I got recruited away to go to PeopleSoft. And this was once again where I just loved the entrepreneurial lifestyle. When I joined the company, we were super small, I was brought on board to help get our western region started up and I got to do everything. I mean, I literally mean everything, from stocking the coffee machine to helping sell services, helping some of our largest customers implement PeopleSoft software. Again, a high dose of travel, but I absolutely loved it.

(06:19):

It was just awesome as a young kid getting this exposure and just seeing all these different businesses and learning from them. So it was a phenomenal experience for me. It was almost like getting an MBA, but in the real world, just a different flavor of it. Loved working there. And for those of you who maybe are a little older or followed the enterprise software industry, we were acquired by a company called Oracle, which I'm sure almost everyone in here has heard of. And still to this day, the acquisition of PeopleSoft by Oracle is the only hostile takeover in the history of software. And the reason why hostile takeovers don't happen is they're hostile and the people leave. And at the end of the day, a software company, its biggest asset are its people. And so Larry Ellison though he had his way with us, and lo and behold, at the end of the day, he got a lot of revenue and a lot of customers, but a lot of us left.

(07:12):

And so I ended up leaving, and again, you can kind of see some of the pattern here. I wanted to go back to a smaller company and really be involved in a company where I could both build, but also every one of my career changes I've made, I've also wanted to really learn something. I wanted there to be something that really pushed me out of my comfort zone, something I didn't know how to do in that job. And as I said, we were at PeopleSoft and then Oracle, we were a client server, so very old technology now, but I had a chance to go work with some of my former Taleo, PeopleSoft colleagues at a company called Taleo, which was one of the very first companies to pioneer the software as a service model in running software in the cloud for customers, which today seems like, I mean, how else would you do it, right?

(07:57):

The other thing that was interesting, and this is I would describe it probably as my CEO with training wheels opportunity, I was brought into actually incubate and start a business inside of Taleo. So as Tom said in the intro, I had full responsibility. We had a product, we had three or four people, we had about a million dollars worth of revenue, and my goal was to grow that business as quickly as I could. And I had the benefit of it was almost like we were inside of an incubator because we were inside of Taleo, which at the time was a bigger company, but it was a unique opportunity. There's a pattern here. Once again, Oracle came knocking, this time, it was friendly, and Oracle bought Taleo as one of the three or four companies that they put together through an acquisition strategy to really start to move their business to the cloud.

(08:46):

I didn't last as long this time. I guess once you go through the door at Oracle and pass out, you kind of go through a little quicker the next time around. So I'll never forget it. I was sitting there in my office one day with a flat spot on my head from just beating against the wall and the phone rings and I didn't recognize the number, but it was like Chat Roulette. I was like, all right, I'm going to pick up and see who this is. That was a recruiter. And he said, Hey, Jason, we're recruiting for a CEO of Plex Systems. This is this great company that's doing super innovative manufacturing software in the cloud. It's got some scale, it's got huge growth, potential new investors from Silicon Valley, and they're looking for a CEO. And I said, this is awesome. This is exactly the next deal I want to do.

(09:35):

He's like, one thing I got to tell you though, it's in Michigan. I was like, oh, well, I don't really have any bias towards Michigan, but I happen to live in California. And they said, no, no, you don't have to relocate. They want a CEO, who's actually based in Silicon Valley, who's been at some other companies that have been successful to come in and run this company. And I engage with the company, and here I am now almost three years later as the CEO, but a little bit more about our company. So we are, in terms of our architecture and our business model, we are as pure as it gets when it comes to software as a service-based business model. All of our customers run in the same instance of our application. All of it is run in the cloud in terms of what we do

(10:17):

It's a full enterprise resource planning product. I mean, that sounds probably to you guys like software that's used to absolutely torture people, but essentially it's manufacturing software including financial supply chain, HR, human resources software and customer management software. The business has some nice scale. We have 450-ish customers. I think we're actually up to 480 now since I put this together. And those customers run our products. It's now up to 1400 manufacturing facilities in 20 countries around the world. We are almost done with 2015. We're going to be at about $90 million in revenue this year. And in Q4 we hit the 25 million run rate, which is pretty significant. There have not been a lot of cloud companies that have gotten over a hundred million in revenue in enterprise software. In fact, I think there's like a dozen. So a lot of these companies, they get bought or they fail to scale, they have hit issues.

(11:14):

So we're proud of the fact that we're one of those companies that's having a breakout. And then as I mentioned, I'm going to talk about this a little bit later. Our investors are two tier one investment groups out of Silicon Valley called Francisco Partners and Excel Partners. And then we raised a B round of funding about a year and a half ago with T. Rowe Price. In terms of a little bit more about our opportunity, if you take a look at our market that we play in, the largest amount of software spend out there is in financial services. The second largest is in manufacturing. And so our global market that we're playing in is a 30 billion market. And that's pretty significant. I mean, it is arguably one of, if not the largest software markets out there, aside from financial services. And it is also a market that is dominated by what we affectionately refer to as zombie companies.

(12:09):

There's kind of a joke in software that is impossible to kill a software company. Someone's always going to take the code and milk it for a little more money or try and innovate or try and do something with it. So there's a lot of legacy companies in our space that have not made the move to the cloud. And so we like our market size, we like our favorable competitive positioning. The other thing that's interesting about our company is we were founded by five software engineers and they built a fantastic product, great product, and frankly managed to succeed in spite of themselves. They never really hired any salespeople, but they still, the product was that good. It actually did kind of sell itself. So it was a company that achieved some nice scale, but as I said, we're now owned by two investment firms out of San Francisco Bay Area.

(12:53):

And their thesis, their investment thesis in the company was we have this great product that works that people love. We have this huge market, and it's one of the last markets to move to the cloud. Manufacturers tend to adopt tech, newer technology architectures at a slower rate because they cannot afford to have their technology not work or be down. And that was why I joined, and it's why a lot of people since I've joined, I think we were about 200 people when I started. And as I said, we're 450 plus now coming up on 500. That's why people have joined. One of the biggest reasons a lot of people say, and this came out in this book interview, you're a CEO, what the hell do you guys do all day? When you get up, what do you think about? For me, the first thing is my team and the talent in the company.

(13:38):

When you are asked to be a CEO, the most important part of the mission that's being handed to you is picking your team. And I have been successful in my career at an early age because I always had a good eye for talent and felt I was always good at connecting with people and finding the right chemistry in a team. And chemistry is important as well. I've been in a lot of companies where hiring managers just go out and try and hire the most pedigreed or perceived smartest person in the room, and you get a bunch of smartest people in the room. If you guys have ever encountered that, it can sometimes be a little caustic. And so I have been successful over my career, not just being able to find smart people, but also hiring people that have good chemistry in working together. And I grew up, you're never supposed to use sports analogies in a presentation, so I'm about to break a rule, but I grew up here in the Midwest when the Bulls first got Michael Jordan out of North Carolina, best player in the NBA, worst team.

(14:31):

And it was only after Phil Jackson, the coach, surrounded Michael Jordan with the right chemistry in the right complementary roles, did they go on to start beating up on the pistons and win many NBA titles. So again, budding entrepreneurs thinking of starting a company: Smart people is part of it, but the chemistry and the culture of how your teams work together, equally as important. One other thing I would also mention as a CEO, I spend probably 20% of my time, it actually might be a little higher right now, recruiting. I mean, I am always meeting people in my network, people who are suggesting that you should meet this person, they're super smart. Building my network for that day when I need to replace someone or I have some turnover, someone leaves for another opportunity. So I actually spend a good portion of my time. It's probably a little higher than 20% right now because I’m hiring a couple board members and two executive team members.

(15:21):

Second part is setting corporate strategy or your business strategy. I mean, this sounds pretty obvious, but it's one of the things that I didn't realize even after going to the Great University of Michigan and even working at PeopleSoft and Pricewaterhouse, I didn't know how to drive a data-driven plan about what's our market? Who are the customers we're targeting? What is that customer's issue that we're going to solve? Why are we different than the 80 other software companies out there that are trying to solve this exact same problem? I had to go through it a couple of times. It's like anything in life where there is a process and there is somewhat of a science to it, and you just have to learn it. And going back to my first couple slides, I didn't know how to do this. And I have hired my last two roles, last two companies, the CEO in training wheels role.

(16:10):

And now here at Plex, I actually have a really smart guy who is a former McKinsey consultant and does this stuff in his sleep. And again, the market analysis, figuring out what's important to the customer, the competitive landscape, how you're going to position, how you're going to sell. A lot of entrepreneurs aren't good at this, and I see this all the time when I meet with entrepreneurs and a couple companies that I've been mentoring in California. And you ask 'em for these basic questions. I mean, it's like a house of cards. They kind of crumble and the answers are more emotional and anecdotal than they are really rooted in data and well thought out. So you got a great team, you got a great business plan, now you need some money to pay the people and fund the plan. I was having a conversation the other day with a friend of mine who runs a payment processing company and they were raising a round of money and he said, Jason, I got a meeting with Andreessen Horowitz, which is right now probably one of the hottest venture capital firms in the valley right now.

(17:06):

He was so psyched. He's like, I got a meeting with Andreessen Horowitz. I'm going down there tomorrow. The pitch is rock solid. We're going to kill it. Saw him like two or three weeks later. And I said, so how did it go? He said, it was a disaster. I said, what do you mean? He said, it wasn't a disaster, it's a waste of time. I said, what do you mean? And he said, they took the meeting more to learn about the payments processing industry, and at the end of the meeting they said, Hey, great pitch, but we just don't know enough about the payment processing industry to invest in your business. And so they were almost using him as their way to get educated. And this is common. If you look at a lot of the different top tier venture firms, they usually have three or four themes that they're investing in.

(17:50):

It could be payment processing, it could be iot, it could be enterprise software, it could be cloud, it could be mobile, it could be social. Doing a little diligence and really understanding what those firms are interested in will save you as an entrepreneur, the time and challenge of educating these guys on what the market really is. So save yourself a little time. Do some diligence on the investors. The other thing that I have seen very common in Silicon Valley is, or just in the tech community, is forget about Silicon Valley for a minute. There is definitely a pecking order in the investment community. And you might say, well, what does it matter? Isn't a dollar the same whether it's from Battery ventures or Benchmark? They both begin with the B, the dollar's green. And this is one thing I have learned at Plex. So we're fortunate enough to have Excel partners as one of our investors, and having a top-tier investor plays dividends down the road.

(18:48):

As I've gone out and tried to hire a very experienced executive team, one of the first things they ask me is, who are your investors? Oh, Excel. Wow, okay. If Excel thought this company was interested, I'm interested. That was a common experience I had. The other one that was fascinating to me is when we went out to raise our second round of funding with t Rowe Price, the $50 million round B, I was expecting this to just be a gauntlet of trying to get someone probably $50 million out of someone's hands. It took us two hours. My CFO and I flew to Baltimore, went into this enormous conference room. There were probably a hundred people in this long conference room. I did our pitch. It was about an hour. They asked questions for an hour. I walked out and I said to the guy who led the meeting from the T. Rowe side, so what's next?

(19:35):

And he's like, oh, no, we're good. We're good. We just need to see some contracts and do some legal due diligence. And I said, anyone look too over anxious? Said, that's it. And he said, yeah. He said, if Excel has done their diligence and Francisco Partners has done their diligence, that's good enough for them. So some of these top tier venture firms, they're wedges, and a lot of the money that comes in in the later rounds will follow that wedge and talent will follow the wedge. So I've seen investors, excuse me, I've seen entrepreneurs that have taken less favorable term sheets to get a better VC in and said down the line, I'm glad I gave up a little more on my company because it made it easier to raise money at a better valuation down the road. I've hired better talent, et cetera, et cetera.

(20:17):

Leverage your network, especially the University of Michigan. The great thing about Michigan alums, one, there's a lot of 'em, and two, they're super passionate about helping entrepreneurs that are coming out of the university. I literally probably field three or four calls a day of people who found me on LinkedIn, saw what companies I've been involved with and have reached out and said, Hey, we'd love an introduction to someone. We'd love to run our idea by you. So your journey to being a part of the University of Michigan alumni network is actually the most important decision you've made so far in your career. So don't forget that. There are tons of great entrepreneur organizations out there. I mean, there's a very robust community here obviously at the University of Michigan. You guys are all engaged with it. Don't let that stop when you leave school. I'm a member of Young President's organization, essentially a group of CEOs that are under 45 that run all kinds of different companies.

(21:12):

It's a birds of a feather group. And I'll look back on all the things I've done in my career, more from a networking and support kind of infrastructure. This for me has been one of the best decisions I've made. So don't leave these kind of organizations behind or think they were only a college phenomenon. I think this is my last thing here, unless you are again, Mark Zuckerberg and found the next Facebook, your career is going to be an ultra marathon. It's not a sprint, it's not a marathon. It is an ultra marathon. And in my own experience as a CEO now, and just knowing a lot of CEOs and knowing a lot of software executives, the most successful ones have a balanced life. They are into their families or whatever family is for you. They give back to their communities. They're into their business, and they have some stress outlet.

(22:02):

For me, it's CrossFit, but some fitness outlet or some outlet that allows you to blow off steam. And I'll give you an anecdote on this one. This weekend, I had a friend of mine who's on a board call me, and he was considering a friend of mine to be a CEO at one of his companies, and I knew this as answered the call, and I was thinking he was going to ask me all these questions about interview-type questions. He asked me two questions. He said, is this guy the kind of guy that you would want to get stuck with in an airport overnight and have to spend the night with? The second question he asked me is he said, what's this guy's relationship with his family? And so he was just looking for balance in this guy to make sure he wasn't just going to come into this company and just be this maniacal slave driver that drives his entire management team and company crazy. So balance is important in life. Doesn't mean don't work hard, but again, it's a series of sprints that I guess make up the ultra marathon.

Kate Atkins, host (23:00):

You can watch the full talk by clicking the link in our show notes. To learn more about upcoming events like this, visit us at umi.info/events and tune in next time to hear from Drew Gronewold during his 2023 talk focused on UMSI’s inaugural theme year, water conservation and access. Gronewold is a water subject matter expert and associate professor at the University of Michigan School of Environment and Sustainability. He shares key water conservation problems and looks at how information and technological opportunities can address these issues.

Drew Gronewold (23:38):

One thing that might be useful to know is I'll say, to take a positive, I'll take a step back and sort of make a positive statement here, which is, despite some of these problems we have with water scarcity and water abundance when it comes to water quality and an attempt at affordability, even though we have problems with metered water use and horrible environmental justice problems, globally, this country has done an amazing job of providing infrastructure that improves water quality. Truly, I mean, the wastewater treatment plans along this country, particularly with a revolution in the 1970s, really changed the game through the Clean Water Act.

Kate Atkins, host (24:22):

That's in our next episode. Before we go, your email inbox will thank you for requesting our free email newsletter. It's a monthly digest featuring tiny delicious news tidbits about information science and library topics. Sign up for free today by clicking the link in our show notes. The University of Michigan School of Information creates and shares knowledge so that people like you will use information with technology to build a better world. Don't forget to subscribe to Information Changes Everything on your favorite podcast platform, and if you've got questions, comments, or your episode ideas, send us an email at [email protected]. From all of us at the University of Michigan School of Information, thanks for listening.