Editor’s note: iasset.com, a startup launched in 2009, is a cloud-based partner relationship management platform that provides channel control among all four players in the supply chain: manufacturers, resellers, distributors and end customers. iasset.com helps organizations automate up to 90% of their transactional processes via Software as a Service (SaaS). We interviewed Scott Frew, president and CEO, about the unique nature of the online platform and his advice for first-time entrepreneurs.
SandHill.com: As a serial entrepreneur, you’ve launched other companies before iasset.com. What gave you the vision to launch a SaaS Global Channel System (GCS) platform?
Scott Frew: I came out of retirement and built Distribution Central, which is now a $280 million distributor in Australia, New Zealand and Singapore. When I started building that company, resellers would call us wanting a quote on a firewall, or whatever the case may be. If you’re a customer and you’re buying a firewall, you won’t get updates if you don’t buy the maintenance with it. Therefore, it won’t protect you from whatever the new threats are on the Internet. The idea for iasset.com came from this problem as well as following up customers to make sure they renew these critical maintenance contracts.
To solve the first problem, I built a generic configurator and released it to the general reseller community. That now configures over 38 manufacturers very quickly, 24 hours a day. I believe we are the only distributor in the world that has a 100 percent attach rate for maintenance on every manufacturer. It also pushes things like advanced replacement contracts, carbon credits and cables, etc.
SandHill: How do you differentiate iasset.com from competitors?
Scott Frew: No one else has a true SaaS delivery platform, where you actually run it from the cloud, joining all of the parties together. Historically, there has not been a tool to connect everybody together.
Also, all of the parties in the channel are potential customers. Manufacturers have a view of their data, and distributors have a different view of the dataflow, as do resellers and, ultimately, the end users. None of my competitors do that. They are all chasing the manufacturers, whereas our biggest customer is a $23 billion distributor.
SandHill.com: Is the dataflow tracking also a differentiator?
Scott Frew: From a dataflow point of view, resellers are obliged to provide point-of-sale information to distributors, who then provide it back up to the manufacturer, and most of the manufacturers store this information. It’s really about complying with auditors.
We track that piece of information all the way through. We also track manufacturer information. We make it one view of the whole transaction. We track who the contacts are, the invoice and purchase order numbers flowing between the channel partners, the legal owner of the appliance or software, as well as where it is actually installed.
If they are licensed users of iasset.com, they can manipulate parts of a data set; for instance, the end user can change their own information, the site information, anything that is related to them. Because it’s SaaS, and because it’s one record, that updates to everybody in the supply chain instantaneously. This single source of truth is where we are completely different from any other player in the market.
SandHill.com: How long was the software under development before you launched the company in Sydney?
Scott Frew: It has been under development for the last six years.
SandHill.com: How did the configurator lead to the platform?
Scott Frew: I had a problem about a year later. I had collected all of this initial maintenance with the product, but we needed to manage renewals. I started building the platform to drive reseller behavior to make sure that they were notified in plenty of time and they got a quote in whatever currency we were quoting. We send the currency-adjusted quote to whoever we are supposed to send it to inside the organization.
The cloud joins all four players in this supply chain — the manufacturer, distributor, reseller and end customer. If I didn’t hear anything from the reseller at say, 30 days to go before the maintenance ran out, I could send an email to the end user, saying, “Your product is coming up for maintenance; we haven’t heard from your reseller,” and we tell them the reseller they brought it from. Joining all those parties back together in the whole supply chain solves a lot of problems.
SandHill.com: The second module deals with end of life, or end of support on a product. What problem does that solve?
Scott Frew: Most resellers don’t get adequate information about that stage. If a product goes out of service from the manufacturer, and the customer has a problem from that point, they can’t get any support.
The manufacturers tell their distributors globally, and the distributors delete the product out of their systems and put the new products in, but they don’t tell the reseller, and the reseller doesn’t communicate to the end user. So the next part of the platform was the product life cycle. Right now it is cradle to grave, but we are trying to get to cradle to cradle. We keep that customer attached to the manufacturer and the reseller.
SandHill.com: You acquired A.S.K. Learning in 2008. How did you integrate it with the platform for your knowledge management module, iassetLearning?
Scott Frew: A.S.K. had a learning management system (LMS) and eLearning development and instructor-led training for customers like HP, Dell, and other companies like that. Lots of companies run an LMS inside their organization to get people appropriately trained and track their skills, but I bought it with a view of rewriting the LMS in cloud form so that it faces out of the organization and understands a channel.
The eLearning modules could be on a new product, the end-of-life notification piece, or training the rep on how to sell a new product or upsell the customer. Then you can start to do analysis where you lack trained resources in a particular country, state or region. It changes the whole channel dynamic and makes them a lot more efficient. The manufacturers historically haven’t had the ability to track that information and now actually have it up to date 24/7.
SandHill: What has been your biggest challenge in going to market?
Scott Frew: We are not existing technology; we’re not a CRM or ERP type system. I can’t walk into an end user and say, “Well, it’s an ERP system, but it’s better than your current one,” or whatever. I have to go in and describe the problem set. When you explain what the system does to a manufacturer, distributor, reseller, they understand it immediately.
Even so, they recognize there is risk associated with something that is completely different. A lot of large-scale U.S. organizations don’t have an individual who will take some of those risks. Some do, because we have lots of customers; but some don’t, and that’s where my biggest frustration lies.
For example, a U.S. software manufacturer is losing about $2 million a month, because they are not licensing the right way. I’ve built them a platform; we showed them the $2 million they are missing out on every month, and they see the value. But I still can’t get them to buy the software.
That’s because instead of a decision-maker with a vision going ahead and doing it, they have to get so many parties involved in the business to come together to make a decision. And none of those people want to risk their job. They know they have a problem, but actually getting them to change is frustrating.
SandHill: Change management can be a serious challenge. How do your customers deal with that?
Scott Frew: U.S. companies are a bit slower to change than perhaps we are used to in Australia, New Zealand and Asia. There is certainly a will to move to a system that can track this information, but typically you have to drag a massive IT department along with you to write their side of the code so that you can talk to their existing systems. The problem is usually because they have Oracle or SAP as their ERP system.
Those businesses are not built to track the rich level of detail that we need to get. The challenge often is how do we get a little bit of information from their ERP system, because that’s all they have, and then marry it up with the manufacturers and the reseller’s information.
SandHill.com: How do resellers usually track their install base?
Scott Frew: Most resellers put in an ERP system and they are getting paid because they know how to integrate the components for an end customer, but they don’t think of the trailing install base that they could mine more efficiently if they had a way of doing it. They don’t typically understand how much money or opportunity is sitting in that install base that they don’t get access to.
If they are doing it at all, most resellers are tracking their install base through Excel spreadsheets, and Excel is not designed to manage an install base. iasset.com gives them the ability to mine that install base and find opportunities that they can’t currently see.
SandHill.com: Because of the desire to acquire or please customers, did you do anything in the earlier days that you might change if you were to start over from the beginning?
Scott Frew: When you’re a startup, you’re responding to customer demands. For instance, we manage about 80 percent of one of the leading software companies’ corporate licensing market for New Zealand on behalf of one of our customers. It’s all done in an automated fashion. We had to retrofit some specific features, which took us off in a different direction for that particular piece. But when the customer’s saying, “Here’s lots of money,” it’s hard for a startup to hold the line and say, “No, we are not going to change.”
Also, we got a lot of pressure in the early days from very big users that wanted their own version of the cloud, resulting in three branches of code base. It was the right thing to do at the time to keep the customers happy and make sure everything deployed properly. But at the end of the day, customer A was missing out on the features that customer B helped us build because they were running a different branch. However, by the end of February those branches will be combined.
SandHill.com: What is your advice to a first-time entrepreneur to help them avoid these pitfalls?
Scott Frew: My advice, especially if it’s a first timer who doesn’t have the financial backing like I have personally, is to do exactly the same thing I did — make the customer happy and then deal with the back end.
SandHill.com: Where do you have operations besides your headquarters in Australia?
Scott Frew: We already had Singapore and Beijing by virtue of the learning piece that we are licensing. I have a major U.S. operation in San Jose, Calif., covering the Americas. And Europe is opening up at the end of January.
SandHill: What are your biggest priorities for the next 12 months?
Scott Frew: Getting Europe up and customer acquisition in the United States. I have to employ 15 people quickly for Europe because we are going to roll out a project that covers 15 different countries and eight languages.
SandHill.com: Have you had any challenges establishing in the United States?
Scott Frew: Yes. I’ve built a number of distribution companies over the years, dealing mostly exclusively with U.S. manufacturers. The problem wasn’t a matter of doing business in the United States but, rather, with compliance. Some of the state laws could trip you up, but we had some great advice. It took a little while, and it was a little more expensive than incorporating somewhere else.
SandHill: Have you encountered any challenges in recruiting and retaining the right talent?
Scott Frew: Because of supply and demand, unless you’re someone cool like Google, you have to work hard to attract top class software developers. We have a great team of developers, though, and our staff turnover is low. Our development base is in Sydney, and we are using mostly Australian developers. I will say that it’s difficult trying to pull resources in a global context for developers in a market that hasn’t been created yet.
SandHill: Is there anybody in the business world that inspires you?
Scott Frew: Probably Richard Branson. He brings personality to the business. I don’t do things the way everyone else does, and being Australian I’m different culturally from the U.S. market. I’m not the boring sort of CEO that doesn’t upset the apple cart.
SandHill.com: Are there any books you would recommend to new entrepreneurs or serial entrepreneurs like yourself?
Scott: For new entrepreneurs I always recommend “The E Myth: Why Most Small Businesses Don’t Work and What to Do about It,” by Michael E. Gerber. For guys like me that are trying to motivate staff, my favorite book is “Drive,” by Daniel Pink.
SandHill: What is your top piece of advice for first-time entrepreneurs or CEOs of startups?
Scott Frew: There is a famous quote by Winston Churchill: “When you’re going through hell, just keep going.” If an entrepreneur doesn’t have persistence, they are never going to win.
Scott Frew, president and CEO of iasset.com, is a serial entrepreneur with more than 25 years in the IT industry, and was a pioneer in the ANZ distribution channel. He has launched and sold several successful companies (including MarketEntry, Distribution Central, LAN Systems acquired by Datatec, and Micro Networks Australia acquired by NetComm Australia,). He acquired A.S.K. Learning in 2008 and merged it with the newly established iasset.com in 2009.
Di Freeze is editor at SandHill.com.