The Entrepreneur Way Podcast: Adam Stern & Neil Ball
PULL HIGHLIGHTS
Neil Ball: Hello, it’s Neil Ball here. Thank you so much for joining me today on The Entrepreneur Way.
The Entrepreneur Way is about the entrepreneur’s journey: the vision, the mindset, the commitment, the sacrifice, failures, and successes. I am so excited to bring to bring you our special guest today, Adam Stern.
But before I introduce you to Adam, I have you a quote for you by Jack LaLanne. “We don’t know all the answers. If we knew all the answers, we’d be bored, wouldn’t we? We keep looking, searching, trying to get more knowledge.” The Entrepreneur Way asks the questions so we all get the insight, inspiration, and ideas to apply in our businesses.
Adam, welcome to the show. Are you ready to share your version of The Entrepreneur Way with us?
Adam Stern: Yes, I am.
Neil: Thank you very much for coming on the show today, Adam.
Adam: My absolute pleasure.
Neil: Adam Stern is an entrepreneur who saw the value of virtualization and cloud computing nearly a decade ago. Adam’s company helps businesses move from obsolete hardware investments to an Infrastructure-as-a-Service cloud platform, providing them the flexibility and scalability to transition select data operations from in-house to the cloud.
Adam, can you provide us with some more insight into your business and personal life to allow us to get to know more about who you are and what you do?
Adam: Sure. So, I started Infinitely Virtual after having run a professional services company called the Altay Corporation for about six years. The jump into virtual server hosting was a very big leap because, at the time, no one had ever done it before.
When I went to my CFO and said, we’re going to do business in a completely different way, we’re going to pull our engineers out of the field, we’re going to build an infrastructure, we’re going to take millions of our dollars that we’d earned in professional services and invest it in equipment, she looked at me and she said, “Okay.” The kind of trust that we’d built over the decade of working together had been instrumental in making this very large pivot toward virtual server computing.
Similarly, the rapport, the loyalty I’d built with my engineering staff enabled me to sit down with each one of them and ask them were they willing to step into this very new reality, this very new world — no one knew what it looked like at the time. And, again, it was a resounding, yes, let’s run directly into the future and see what will happen.
At the time, there was no Amazon Web Services, there was no [Microsoft] Azure, and no one knew what Infrastructure-as-a-Service was. At the time, we even had different terminology for it.
We started talking to customers and learned that most of them had no idea what we were trying to sell them. It took a little while before people caught on, but when it took off, it just went like wildfire. I spend a lot of my effort developing relationships with my stakeholders, with my staff, with owners and customers to help them understand what they can do with this technology and what the future’s going to look like.
Neil: So why did you decide to do that at that point in time?
Adam: You know, I’m not 100 percent certain. We were building virtualized infrastructures for businesses and it seemed to be the thing that was bringing everyone together in terms of new technology. Instead of taking physical servers and filling racks with them, we were starting to get much larger systems and breaking them up into virtual machines. And it gave our largest customers the kind of flexibility and the kind of power that they needed to run their businesses, and at the same time, it lowered their costs.
Very quickly, I began to think about it in a completely different way, a way that people now think is very commonplace, but at the time hadn’t really occurred to anyone. And I thought, well, couldn’t we build a system like a Fortune 500 virtualized environment and just rent pieces of it to customers that were much, much smaller than that?
At first, it was just my way of addressing the needs of those in the small and medium business sector who couldn’t afford to be in an environment that had 100 percent uptime and security and data backup in the way we would build it for a large customer. The paradigm I envisioned was just to give the small and medium business the same feature set to which the largest enterprises had become accustomed.
Here’s what ended up happening: not only did we serve the small and medium enterprise very well, but even large businesses decided they could avoid the same capital investments they’d been making over the years and instead divert some of their infrastructure to organizations like ours. And maybe reduce their headcount as well.
It became a question of efficiencies for larger companies; for smaller companies, it was an innovative, entirely experimental way of doing their infrastructure.
Neil: Who is your typical client or customer?
Adam: We are fairly well siloed off. We do have a very strong medium-size business practice, where the typical client has somewhere between 50 and 200 computers.
We do have a large enterprise footprint as well, with a number of 1,000-plus user environments. These bigger companies don’t necessarily use us for their entire infrastructure, but they’ll deploy an application for us with us for one of their divisions or one of their groups, and that enables them to do so rapidly and without buying equipment. Large enterprises do come to us for specific needs.
We also offer a product that’s aimed at the accounting industry and there, we have companies with one and two users. So while it’s difficult to pick a typical user, we do serve a very large group of vertical markets with different size companies.
Neil: What do you enjoy most about what you do?
Adam: I enjoy the leadership role the most. I’m also an engineer at heart, so I do like sitting down with my lead engineers and deciding what the future of computing is going to look like for our customers. That’s fun. Above all, my day in and day out pleasure comes from the relationships that I have with my staff and our ability to look into the future and build something wonderful together. That’s the best part of doing this.
Neil: What drives you to do what you do?
Adam: That’s a tougher question. I didn’t see myself here when I graduated university. I didn’t look into the future and say I was going to lead a compute company. I wasn’t even sure what industry I’d end up in.
I’ve spent a lot of time in the computer business — that’s where I earned my money while getting through university — and I built relationships with some folks back then that later became instrumental in my moves forward. That said, I actually thought that when I finished university I would go into something completely different.
One night when I couldn’t sleep, a business plan began to unfold in my mind, and when I did finally wake up, I put pen to paper and it’s almost like the business plan took over. This was the original business I started, the professional services company, and that’s what led me to build my staff and get my CFO and determine what the organization would look like, fundamentally. The switch into Infrastructure-as-a-Service really was more of a process of looking at the technology and the business problems that it could solve.
In terms of how I ended up here: my grandfather was an entrepreneur, my aunt was an entrepreneur, so it may have just been in the blood.
Neil: How do you relax when you’re not working in your business?
Adam: Very recently my wife and I decided to buy a new home. One of the reasons we bought this specific home was that it has a lot of outside space. What gives me the ability to relax most is just to sit, just to be outside, away from the technology, on a couch, in the yard, with my daughter. That, to me, is the best way to let go. I don’t need to go out of town, and no hobby is necessary. If I can just get outside and breathe some fresh air, it definitely gives me the ability to recharge.
Neil: Do you have any entrepreneurial role models?
Adam: Yes, there are actually several.
They first serious job I had in the technology business was with a gentleman named Jay Stapleton. Jay was an interesting guy, essentially the best salesperson you’d ever want to meet. You couldn’t sit down with him and not want to buy whatever it was that he had to sell. The way he did that came down to listening to what you had to say and finding out what it was that you needed.
If there was a way for him to provide what you needed, he did it. And if there was a problem with price, he’d fix it. It was his goal to attract customers through relationships and to build those relationships over time.
It got to the point where you’d sit down in a sales meeting with him and watch him bring in people just by sheer power of personality. And while that’s not my capability, that’s certainly not who I am, I learned a lot from him. He gave me a sense of how to treat customers, how important they were.
In today’s business world the central role of the customer has been lost. Customers are essentially herd animals that businesses force into corrals. They take the product they have and, if the customer doesn’t like it, he or she can go find another corral. Unfortunately, this is how many people are treated, depending on whether you’re talking about IT or retail.
Instead, my philosophy was infused with this: the customer’s role is the most important role. Customers should set the tempo. They should decide what’s most important to them. Businesses should be trying to address those things that pain them most. I think that’s really been lost today.
But back to Jay, who was probably my first role model.
There’s another gentleman who came into my business life in those early years — Ed Quiroz. Ed played a role in my evolving outlook on the world; he told me, “I don’t do business with you guys because you’ve got the best price. And I don’t do business with you because you offer the best service. I do business with you because I like you.”
I think it’s true that people often make purchasing decisions not solely based on a statistic, but whether or not they like working with you. But that’s a legitimate business reason. You make an executive’s life easier because you do things for them that they don’t have time to do for themselves, or other vendors don’t think is important, or they just prefer doing business with you because you’re a good person and they feel an affinity toward you.
I’ve looked at business as a way to find those people who are looking for a great product, but who also want to work with me and my team. There are a lot of companies that can do what we do. If our main selling point is we’re cheaper or slightly faster, at the end of the day, those are things that anyone can do, but they can’t necessarily be as good at addressing our customers’ needs and listening to them.
Neil: Adam, you’ve taught us a little bit about your business and your personal life. What we’re going to do now is go back to the time before you were an entrepreneur and just talk about that a little bit. What difficulties did you have to overcome when you started your business?
Adam: The hardest part about founding a business is that you really are starting from scratch; you have an idea about something that people might want, but you have to get them to purchase it. You have to get them to do what you’re asking them to do.
Startups are on every corner right now. It’s actually quite popular to launch businesses that have absolutely no value, in the hope someone will give you money to get it off the ground. This is an interesting time to be in business. The sexiest things people talk about are things that, to me, have no value.
The real issue here — and what’s lost in all that — is that whether you attract VC money or not, or whether or not you have a fantastic product, someone has to understand you and your product. Someone has to want you and your product. It has to do something for them that they can’t do for themselves or that something else in the industry doesn’t do for them.
What’s difficult about starting a business is that you’re 100 percent guessing at what people want. I really do enjoy MBA graduates who say, well, why don’t you survey your customers?
Ultimately, surveys tell you only a bit of the information you need to know to be successful. The real test is what works in the marketplace. What will people actually put their money down on?
The biggest challenge for any entrepreneur lies in those early days when you don’t know if your product’s going to work. You’re trying very hard to get people to see the value that you see. Some of it’s about learning how to create your marketing and some of it’s about how to communicate with customers. And some of it’s just being able to adjust to the market because your initial ideas may not be the right ideas.
Early entrepreneurship is about being fluid, being open to new things, and knowing you’re not always right. Those are difficult things for everyone to do.
Neil: If you think back to the time when you started your Infrastructure-as-a-Service model, if you’d taken those MBA students’ advice and surveyed your customers at that time, do you think you would have got a good response to it when people didn’t yet grasp the market?
Adam: No. That’s a perfect point you’re making; there would be no Infinitely Virtual and no AWS and no Azure if everyone had sent out a survey and asked, “do you want this?” Customers would have said, “want what? I have no idea what you’re talking about.”
No typical business owner understood what the terms SaaS and IaaS meant when you tried to explain it to them. So how do you create a survey to gauge people’s interest in a product or service that they don’t understand?
Which is why, after you start a business like ours, a lot of people tell you that, well, “there’s already a business like yours. Why would you start that business?” As in, if you want to start a restaurant, why would you start this restaurant? There’s already a McDonald’s.
A lot of the things you hear as an entrepreneur don’t make sense, and it can be quite discouraging. You have to ignore those things. You have to follow your gut about what people actually want and how you can make them happy.
Neil: This shift in the computer industry has affected companies like Dell, hasn’t it? They were hoping to sell lots more service to smaller companies. All of a sudden, they’re using all the types of services you’re offering and they’ve not been in that market. I think they’ve made a move to do that now.
It reminds me of what Henry Ford said: if he’d asked people what they wanted back when the Model-T came out, they would’ve said “faster horses.”
Adam: That’s exactly right. People would have said cheaper servers or easier servers to implement. What they didn’t think about was getting rid of their servers all together.
That’s definitely true of Dell. The server business is going to change dramatically, as players like Google and Amazon build their own servers out of commodity equipment. And not just servers, but likewise switches and routers, which are now becoming commodity equipment with open source operating systems running.
It changes the landscape quite a bit for everybody– Dell, HP, Lenovo, IBM, etc. They’re going to have to cater to the largest infrastructures, and they’re going to have to do it so that people still want to buy their equipment instead of building their own.
Neil: Did you have any doubts that delayed you starting your business?
Adam: Not really. We had a pilot system, so we didn’t spend all of our infrastructure money in the first year. We sold that small pilot system to existing customers.
Any delay probably had more to do with industry acceptance. It took a little while to get people to understand what we were trying to do, and the early Infrastructure-as-a-Service talk didn’t hurt. Whatever slowed us down was more about getting customers to accept the value than anything else.
Neil: What mistakes did you make that slowed your journey?
Adam: We overemphasized the compute aspect of our offering and underemphasized the hands-on support, the stuff that makes the transition easier. We built infrastructures and sold them; the idea was that customers would install their own software or they’d have their IT guy install their software. Conceptually, that’s still a model today.
But the sweet spot today, for us, is tying a big ribbon around it — handling the entire process, from building servers and selling software and helping customers get on-boarded and making them feel like they could really use the system. That was a difficult pill to swallow.
No one really wanted to do that work. That’s much harder than building virtual servers and reselling them. But once we fully understood that that was the market we were in, even if we didn’t know it, everything changed.
Neil: What are some of the things you did before you started your business that would be helpful to listeners who haven’t yet taken the first step on the entrepreneur way?
Adam: There are a couple of different types of entrepreneurs: those who jump without looking, and those who embrace risk and when they fail, they pick themselves up and leap in again. While their road is just as hard, they don’t have the fear that can prevent someone from being successful.
Of course, everyone has to have a good idea and something salable that customers need, but sometimes having the product or the service is just a matter of perseverance. If you want to be an entrepreneur and fulfill customer needs, but you’re afraid — if your fear that you can’t put food on the table for your family and it prevents you from starting — then it’s much harder to be successful. That fear keeps you from taking the leaps and the risks that are required to be an entrepreneur.
So while I would never advocate taking risks with your family’s financial future, I would say, find a way to try and, if you fail, find a way to try again. There are ways to start businesses that don’t require you to give up your income or put your financial future in jeopardy, but you do need to take a risk. The entrepreneurial way, as far as I’m concerned, is the risk-taking way.
Neil: Let’s move the timeframe forward and talk about the time when you created your business. Do you think culture is important from the very beginning?
Adam: Absolutely. It was one of the first conversations I had with my now CFO. We talked early on about what our business would be like, how we would treat our employees, and how we would treat customers. We’ve never deviated from those ideals.
If you intend to have honest employees, you need honest owners. If you intend to have hard-working employees, you need hard-working owners. If you want good communications, you have to communicate effectively yourself. To build a strong culture, you have to have strong ideals and execute on those ideals every day.
Nobody is perfect. If you can’t demonstrate to your employees how you want your business to be run, you won’t have the business you wanted to create if you don’t do that.
Neil: How do you make sure that you hire the right people so that they fit with the culture in your business?
Adam: [Laughter.]
Neil: I thought you might have figured this out.
Adam: That is the absolute hardest thing there is to do. Everything else seems easy compared to that.
Finding good people, finding people who see the world in the way you want them to see it or can see it that way with some exposure to other staff, is probably the most challenging part of running a business. And hiring the wrong person can be disastrous, because you can poison the well very easily with wrongheaded folks.
There’s a standard process that people follow: it’s resumes and interviews and talking to people. And for small businesses, it might be hiring people’s family or friends. But it really boils down to having the ability, through direct contact, to determine if this is going to be the kind of person who is going to make your company better.
There are a lot day-to-day things that we and our employees all have to do, and being able to just simply do them isn’t enough. For instance, I have systems engineers and technical support people, inside sales people and outside sales people. Everyone can be filling these roles and doing these jobs in a technically correct way and still have a terribly difficult company to run. Or, you can have people who bring a sense of duty and loyalty to work and try very hard to make customers happy, because that’s what’s most important to the business owner and to the culture, and now everyone has a much easier time.
I don’t think I’ve answered your question effectively because it’s more of an art form than something you can lay out and understand how to do.
Neil: Well, you made it even more difficult when you started talking about not just finding people who can do the job, but who can actually do the job and bring this sense of duty and loyalty to work with them. That just adds another layer of difficulty to it, doesn’t it?
Adam: Yeah, it’s incredibly difficult. Part of what a good business owner has to do is use their limited interactions with every employee to maximum effect. You interact with people at the top of the chain a lot more than you do than at the bottom. You have to use every interaction as an opportunity to demonstrate what’s important to you and what should be important to the company.
I do love the mission statement process that every MBA student goes through; it’s a wonderful exercise, but mission statements are a one-time thing you stick on a wall. If you can illustrate your mission to your employees daily by behavior, with good communication that explains to them why we do what we do, I think you do a much better job of getting people to understand their role in the business and what’s important to the business itself.
Is it closing a support ticket or is it leaving the customer at the end of the support ticket feeling supported? There’s a huge distinction there, one that I think is lost in this business.
Neil: Often the employees don’t even know what the mission statement is or they don’t understand it. It should embody the types of things that you talked about — about looking after the customer and making them happy. Because that’s what it’s all about, isn’t it?
Adam: It is. Truly.
Neil: Knowing what you know now, is there anything that would have helped you to shortcut the learning curve?
Adam: In life, as in business, you have to make mistakes. I don’t know that there is a real way to jump over the mistake part.
The things I did poorly in my ‘20s as a manager and the things that I did poorly in my ‘30s as an owner led me to where I am today. If you want to run a business, you have to do your part in learning from your own mistakes.
There’s a huge pit, a crevasse that people can fall into when running a business. That’s the one where the owner says, “I’m the owner, I’m right and you’re wrong. Do what I say. I don’t want to hear about it, just do what I’m telling you.” This is a huge mistake.
I’m not saying that every owner does it, but I do know that there are a large number of folks who do. Those businesses may or may not be successful, and I’m not saying that you can’t be successful if you go that route, but you lose out on the wonderful creativity of your staff if you don’t allow them to help you do a better job running your business.
It’s sometimes difficult to have an open-door policy. At times, it can be frustrating to listen to every suggestion your employees bring to you, but it’s better to hear them out and not dismiss them out of hand. Encourage employees to bring them.
By the way, very often the first thing that comes out of an owner’s mouth when an employee makes a suggestion is “no” or “we can’t do it that way.” And if you do that, your employees will never help you make your business better.
I would say that, as an owner, if you can remain open to new ways of doing things – not necessarily with a suggestion you implement but one that might lead you somewhere that makes your business far more successful – you will have built a learning business. That’s something that’s very difficult to do — to build a company that can learn from the contact with stakeholders, from customers and vendors and employees and owners. It’s actually essential if you want to be successful for a longer period of time.
Neil: How much does gut feeling influence your decisions in your business?
Adam: Quite a lot, although I don’t want that to come out wrong. We all build decision paradigms, and those decision paradigms enable us to make very rapid decisions with limited information. When we say it’s a gut call or based on a gut impression of something, it’s not so much that it’s a snap decision with little thought. Often, it’s because you’ve built a paradigm of how you like to respond to certain things; the paradigm enables you to make quicker decisions that, one hopes, will have a strong percentage of being correct.
As an owner, you have to be prepared for making poor decisions occasionally and having to learn from them and build on what you learned. What I do find is that folks who don’t run businesses want to analyze things to a degree that makes them ineffectual.
There’s an in-between that you need to find; you can’t analyze everything to death or you’ll never make a decision. And if you’re going to make decisions quickly based on limited information, you have to build that very strong decision-making paradigm. Because you never have 100 percent of the information you need. If you do, it’s too late. You’ve already missed the opportunity.
Neil: What makes you uncomfortable as an entrepreneur?
Adam: Uncomfortable? No one likes it when there are large changes in the environment you’re serving. Nothing makes it more difficult to run a business than having the landscape shift rapidly. What makes me uncomfortable is when I see large changes in the compute business and then needing to determine where we are going to go next.
Infrastructure-as-a-Service is a wonderful technology, but it isn’t the be-all/end-all of computing. There’s going to be something beyond that and knowing what it is, well, that’s difficult. It’s uncomfortable not knowing what’s coming. We’re going to have to make decisions without knowing what the future looks like, and each decision is going to have to be an educated guess. And it’s all going to happen fast.
Neil: What are some of the secrets to success?
Adam: People I know who have been successful have been capable of steering a course by themselves with little help when necessary, yet when given an opportunity to get information from their employees or vendors, they can bring that together — it’s a unique thing to be able to, when you’re charting your course by yourself, to chart it no matter what anyone says is wrong with what you’re doing. As we discussed, you can’t imagine how many people said that starting my infrastructure business wasn’t a good idea. But moving forward didn’t mean shutting out input about how to make things better.
Those are completely opposite things, but to be successful you have to be able to do both: to jump out on a limb, and once out there, you have to let people tell you how to get back off the limb. It’s challenging, but it’s what makes this so rewarding, too. Because when you take a big risk and it works out, you get to feel like you accomplished something great.
Neil: Life is made of constant change, whether we like it or not, and many people say that the only constant in life is change. Adam, how do you try to keep up with change?
Adam: It is very difficult, yes. You have to have your eyes and ears open and you have to let your staff help you remain open.
As I noted earlier, businesses that become stale and don’t grow and change from the stimulus they receive from outside eventually fail. The real challenge here is building an organization where your engineers or your salespeople or your buying folks or even your accounting people can get information from the outside and then somehow take actions to make the business better. For at least some level of the business, you have to have local control over certain things. If you don’t, it’s difficult to have your business evolve with the marketplace.
Neil: What is your favorite book on entrepreneurialism, business, personal development, leadership, or motivation, and can you tell us why you have chosen it?
Adam: In the ‘90s, I was given my first opportunity to lead people. I was made VP of operations at a small VAR and didn’t feel 100 percent equal to the challenge. I found a book called The Leadership Challenge by Kouzes and Posner. I read it and read it and read it. And I used it, to some extent, to try to navigate the most difficult challenge I had undertaken at that point — running a 14-person team in the value-added reseller business, a business that doesn’t really exist today.
I liked the book a lot and would occasionally go back to it to refresh ideas about how to be an effective leader. When the tech crash took place in 2000, I tried to get some work with other types of technology businesses. It was clear that there were just too many people out of work chasing the same very small number of jobs, so I decided to obtain my business degree. It seemed like the right time to finish my education.
One of my final classes dealt with leadership — leadership and negotiation, as I recall. The only text in the course turned out to be Kouzes’s and Posner’s Leadership Challenge.
How interesting that the very book I chose to try to learn effective leadership was a textbook for that part of the curriculum. To this day, it’s the one book I turn to when I’m lost as to how to work with this person or with a team or if I don’t feel I’m being as effective as I could be. It’s an incredible way to learn how to lead people.
Neil: That’s the true test of a great book, isn’t it? If you can keep picking it up and rereading it and getting more out of it over a long period of time. Adam, are you ready to speculate about the future?
Adam: Sure.
Neil: What one thing would you do with your business if you knew that you could not fail?
Adam: If I knew I couldn’t fail, I would probably go out and purchase a bunch of additional businesses.
It’s a very risky move to grow by purchase, but if I knew I couldn’t fail, it would be a fantastic way to ensure we could deliver our way of servicing customers to a much larger group of people. There are a lot of other small Infrastructure-as-a-Service companies out there who are not delivering on the promise, and I think we could do a lot of good with it.
Neil: What skill, if you were excellent at it, would help you the most to double your business?
Adam: If I knew how to sell better… Marketing and sales is, I think, the biggest challenge. I’m an engineer at heart. I built my business and we create our products based on this engineering mentality, but as good as our salespeople are, if I was a better sales manager, I’m sure that would help us grow.
Neil: In five years from now, if a well-known business publication was publishing an article on your business after talking to your customers and suppliers, what would you like it to say?
Adam: Most importantly, I’d like them to say that we demonstrated our interest in solving their problems. That our focus wasn’t on selling things or on building things, but on listening to our customers’ needs and then building things around those needs and solving their business problems.
Neil: It’s now time for three golden nuggets. What is your favorite quote and how have you applied it?
Adam: Winston Churchill said, “Success is not final, failure is not fatal; it is the courage to continue that counts,” and as a business owner and entrepreneur, this is one of the most important quotes to understand. Because if you fail, which you will, you will fail, and you may fail over and over and over again, that doesn’t mean you’re a failure. It means you just haven’t picked the right idea yet. You haven’t executed it in the best way possible yet. And so long as you learn from your failures, you can be successful.
At the same time, just because you’ve started a successful business doesn’t mean you’ll remain successful for the rest of your career. You have to be willing to chart and change your course based on the currents you encounter on your journey.
Neil: Do you have any favorite online resources you can share with us that’d be useful for other entrepreneurs?
Adam: While I don’t think it’s a very special resource to mention, when I’m looking for something, I just Google it. Truly. There are lots of resources out there; I think picking one is difficult, so it may not sound very inspired, but I use Google.
Neil: What is your best advice to other entrepreneurs?
Adam: Take your risk. Don’t be afraid to take a risk.
Neil: Adam, is there anything else that you would like to add about your business?
Adam: I hope people understand that Infinitely Virtual is about delivering services to customers based on what their needs are, and I’m hopeful that they recognize that our goal is to make other people’s lives better through technology.
Neil: Adam, it really has been an honor having you on the show today. Thank you for coming on and talking about your entrepreneurial journey. One of the things that stood out in my mind was this concept of building a learning business, which is really what everyone should strive for, because then your business will continue to grow, hopefully. Thank you again. We really do appreciate it.
Adam: It’s been my pleasure.
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