Eric Carter shares how he started a $2 million dollar recurring revenue business by over-delivering for one of his customers.

Eric Carter shares how he started a $2 million dollar recurring revenue business by over-delivering for one of his customers.
Eric Carter shares how he started a $2 million dollar recurring revenue business by over-delivering for one of his customers.

Eric Carter breaks down how he founded Approach Technology as the IT leader in the construction and architecture niche. His story is awesome. He provides details on how he began this company by over-serving one of his customers.

His servers are some of the fastest we’ve ever seen.

Listen close as he explains why you have to take risks when starting your business. Valuable insight into the startup world.

Transcription

Matt: Here we are live again, Game of Marketing and today’s guest is the one and only Eric Carter from Approach Technology. How you doing Eric?

Eric: Hey, I’m doing really well. Thanks Matt, how are you?

Matt: Doing fantastic bud, good to see you.

Eric: Good to see you too man. Thanks for putting this together this morning.

Matt: Yes, no problem. Eric is a co-founder of a company called Approach Technology and Approach is based out of Seattle, Washington and they do custom private cloud solutions and don’t worry, he’s going to explain what that is in a little bit.

What we’re going to go through today is how he founded that company and how he’s grown it to a multi-million dollar annual business and hopefully you’ll learn something about the way data is hosted and the way websites are hosted and then be able to apply this into your business.

Let’s start at the beginning. Why don’t first of all you tell us what custom private cloud solutions are.

Eric: Yes, thanks Matt. Custom private cloud solutions are … The cloud is the big buzz word and we started this business up about seven years ago with the intent of helping people manage and do their own IT better out of the data center. Back then we just called it a data center strategy.

We weren’t calling it the cloud, but nowadays everybody calls it cloud computing and so what we’ve done, our focus has really been on the architecture, engineering and construction verticals. We help them move to a cloud based model of IT operations that gets them out of owning their own hardware, managing their own software, drowning in help desk issues.

The idea is that by working with a partner like Approach Technology we can present them with a holistic strategy that tackles their applications, their data, their backups, their desktops, disaster recovery, all of it in a cloud model that allows them to scale up, scale down seamlessly and delivers them into an OPEX model instead of a CAPEX model.

Matt: Whoa, whoa, so let’s slow down just a little bit. What you’re saying and I know a little bit about your business so I’m going to interject a little.

Eric: Please.

Matt: Let’s say that I’m a construction company and I’m putting up a building in downtown Austin here or in downtown Seattle. You would essentially contact these companies or from what I’m understanding now a lot of these companies contact you directly.

Eric: That’s right.

Matt: What kind of solution will you provide for them? Where does that effect them in their day to day?

Eric: When you look at traditional IT, in the past these sort of construction companies all try to operate out of their corporate office for the most part. They’re building data centers in their basement.

One example is a company I work for had a data center in their basement and it had double sump pumps because every time it rained here in Seattle, which as everybody knows pretty commonly, they’d have to fire up the sump pump to keep their own data center from flooding.

Then they had other challenges, there’s a lot of construction going on so occasionally corporate office would lose power or would lose internet feed.

When this happens at a construction company most construction companies have about 80% of their people in the field. If they’re subscribers to that main corporate headquarters for their email, for their files and things like that, any sort of outage like that really effects the entire operations. When you look at construction, the amount of cost for everyday of overrun on a construction site is enormous and it far, far exceeds the cost of doing IT well.

That’s been our approach, we’ve tried to change the paradigm in construction, get people out of trying to manage their own IT and build their own data centers and instead subscribe to a cloud based model where they can lean on myself, lean on my team and we can provide them those desktops, those applications, that data, job site turnover services and things like that and really complement the construction industry in that respect.

Matt: Essentially, let them operate out of their local area?

Eric: Yes, ideally we want to move everything to a data center so that we can deliver via 10 gig internet access and not only do we move all of their IT services, their email server, their file server, we move all of that to the data center but we also move the individual user desktops up to the data center.

When we do that, the end user device whether it’s a Mac, whether it’s a PC, whether it’s an iPad, it becomes simply a dump terminal, a thin terminal to be able to access that desktop up in the cloud. They can jump in, access their desktop up in the cloud and because it lives in the same data center with all of their other IT applications, the data can be transferred very quickly and all I’m doing on the end user device is updating the pixels on the screen.

If you work it with very large data sets, instead of trying to pull that data out of the data center every time you need something, instead the data never leaves the data center and I’m just updating the pixels on your end user device. As long as you have internet access you have quick access to all your data, all your applications on any device.

Matt: This seems like pretty advanced stuff. How did you get involved in this? Let’s go back a little bit here. You went to school for computer science or I believe you went to school for something else.

Eric: Yes, actually I think I did enroll in college with a computer science degree, but I quickly discovered that it wasn’t real inspiring to me to be learning program languages that were all out of data and 10 years dead.

Matt: Like Colbalt.

Eric: Yes right, and then I also looked around my class and looked at the study groups and there were no girls in any of the classes and there were a lot of incentives to reconsider a future in computer science degree. Instead I turned to history and political science and I got a BA in both history and political science.

I feel like it really has well served me for the technology business strangely enough. A lot of what we do is trying to communicate and communicate well to our clients. Whether that’s written in a email form or whether that’s communicated verbally in a face to face conversation, I think you cannot underestimate the importance of communication skills in business today.

Being able to write well, being able to write grammatically correctly and present yourself well and communicate well, oftentimes is more important or as important as dialing in the right technical solution. You can dial in the right technical solution but if you don’t communicate it well and you can’t bridge that communication gap with your client or your end user or whoever you’re supporting then you’re going to continue to have confrontation and head to head conflict.

I feel really well served to have studied history and political science. It’s not going out of data, that’s one thing you can say about history versus maybe a computer science management degree or something like that. That’s where I started. Once I got out of college-

Matt: Also you played water polo correct?

Eric: I did, college was a lot of fun and I was fortunate to with a history and political science degree I had some free time and I was able to devote it to socializing and also pursuing my love which was water polo.

In college I showed up at WSU in 1992 and the water polo team was defunct but we rebuilt it, we got it going again. I started off my first semester I had a $50 budget from the club sports department there and I had to pay for lifeguards but they only gave me a $50 budget and it was fun.

Matt: That’s one ball, one water polo ball.

Eric: It was one practice, so initially we had to charge people dues, we had to do all the fund raising events and things like that. I got pretty smart about the process.

There was called a Club Sports Federation Counsel and that counsel decided how much money to allot to each one of the clubs. First thing I did is I got myself elected to that counsel and then I worked to get one of my teammates also elected to the counsel. Then they made a rule that you could only have two people from a team or one person from a team on the counsel at a time.

What I did is I had a third person on my team go start up the Judo Club and then he got elected as a Judo Club representative even though he still played on the water polo team.

Within a couple of years I had about three of the seven votes on the counsel were all water polo votes and I needed to cajole or do some log rolling with one other person and we were able to get our budget increased. We went from a $50 budget from when I got there, to the time I graduated we had $5,000 a semester rolling in, we’re riding around in private buses.

Matt: You took over the condo board.

Eric: We did some … Thank God for that political science degree man, it served me well. We were able to do a little back scratching and get that budget pushed up.

Matt: That’s fantastic, and then did you guys hold a record in water polo or something if I remember correctly?

Eric: No, we did turn out to be a really competitive team in the northwest. I remember my junior year we beat UW for the first time in school history at least while I’d been there and that was a big turning point for our program and then getting the more money, being able to travel around more, it really helped things gel. By the time we left, I was there fully five years and summer school, by the time I left-

Matt: A few degrees, not too much right?

Eric: That’s right, that’s right, but I still try and stay active swimming, doing some water polo every now and then and I really enjoyed the collegiate college sports, it was a great club, Water Polo Club was a great experience for us. We also did some DJing, so I was a college DJ and just tried to stay active. College is such a great opportunity for people.

Matt: I didn’t know that, what kind of music would you DJ?

Eric: Back then it was KZUU 90.7 Pullman’s only alternative. It was a college music back then in the 90s it was a lot of guitar rock and stuff like that.

Matt: Like KZOK in Seattle or is that even around anymore?

Eric: Boy, I think KZOK is still around, I don’t know but that was hard school, hard core rock. This was more college rock, up and coming bands and things like that.

Matt: Kind of a sign of the times with Spotify and Pandora and stuff now where we wouldn’t even know if a radio station went out of business.

Eric: That’s true I’m a Spotify fan, I love it, can’t do without it, they get my $10 a month regularly, no questions asked.

Matt: Let’s talk about Approach a little bit. From what I know about you, you have applied some of those same tactics like you did on water polo to building Approach. You’ve been able to really leverage yourself well into the company, why don’t you talk a little bit about how you built that company that you now … Now are you a co-founder or founder?

Eric: I was the founder, I was able to invest with a construction company. The way it started is I’d been a Mary Poppins of IT where I would roll into an organization, help them address their IT problems but once things were fixed it wasn’t compelling for me to stick around there.

Matt: You [inaudible 00:11:34] each other at some point right?

Eric: Yes, so 10 or 11 years ago I got the opportunity to come work for a large general contractor here in Seattle that’s been around 100 years and they were having some serious IT challenges and I got to be honest, I didn’t know much about construction when I got into this business. I thought they dug holes and pounded stuff together and didn’t really associate construction and technology to the extent I did.

It was a real learning experience for me to get in and just see how important technology was to the construction process, getting the plans, getting updated plans, making sure people were working off current data and things like that.

It was an eye opener for me and when I got there the organization that I’d been hired by they had some serious IT challenges, the voicemail had been down a week, their other IT person had been gone a few weeks, so there was quite a backlog of addressable tickets. They were having struggles, they were having struggles with the corporate IT running out of their corporation office and maintaining job sites.

At the time they had three job sites in the field and all of them were having trouble communicating back to the main corporate headquarters, the VPM links would go up and down. I got there and we rolled up our sleeves, we put ourselves to work and we made a pretty big impact.

First of all we rebuilt everything so I started rebuilding system by system and make sure I could start clean. If I’m going to take ownership of it and have responsibility of it I want to build it myself and know that it was well implemented.

Pretty quickly we’re able to make a big impact and that construction company went from three job sites up to 25 job sites. They were able to really explode their revenue to the extent that it was a no brainer for them. They realized they’d been under-spending on IT and it’d been costing them a lot of money because they had not been able to scale up their operations.

Matt: I gave them a 40% increase in business.

Eric: At least, at least, and we were working with them and I had them in this model and things were working better but I never, ever felt like the model that I had them in was perfect for construction. About seven years ago, I’d been working for the company about two years at this point, I took them to 100% cloud based model, we didn’t call it the cloud back then, we just called it this is our new strategy.

The idea is that we took them all out of their basement, out of that sump pump protected environment and we moved them to the cloud where everything was delivered out of the data center under one managed service provider, that was me. It worked really well for them, it worked well to the extent that they asked me to take their sister company, which was in the L&I business and take that to the cloud.

We took the sister company to the cloud, we’d helped some other construction companies in the area with email rebuild projects and things like that.

Matt: What’s L&I?

Eric: L&I is labor and industries, insurance basically. By that point they knew that Eric was ready for his next challenge and we decided to take this strategy that we cooked up together, in conjunction together and go extend it, extend it to other general contractors, extend it to other specialty contractors. Now we’re really starting to break into architecture firms, the strategy we have really applies well to architecture.

That’s how we got started, the company I worked for became my partner in this business and here we are now seven years later, we have over 100 organizations that host part of their IT operations with us here in Seattle and we have about 20 organizations that host every single component of their IT with us.

I’m getting a little thing on my screen here, I’ll just shut that off. It’s really grown and it’s really encouraging to see the IT strategy pay off for these organizations. When they make the move to this model suddenly people are empowered to work anywhere.

Especially you talk about an architecture firm where they have very high requirements for their competing power, for their graphics acceleration. In the past these people have been chained to a work station at the corporate office. Sleet, snow, whatever, you had to drive into work or you didn’t work at all and for the first time in these people’s careers they can work anywhere.

Matt: I would imagine having the most current set of plans and drawings is a really big factor.

Eric: Absolutely it is, in fact that’s one of the big paradigm shifts we’ve seen in construction over the last decade. It used to be considered project management and now it’s really considered project collaboration. The things that I see people working on more are not so much project management but how do I share, how do I share where this schedule is with all of my sub-contractors and everybody that’s part of this project.

Some people I want read only access to some people maybe they can make changes to the project schedule, but that had become a real big piece of it.

You’ve seen there’s been some pretty high profile construction projects where they’re not, they’ve gotten in trouble. They’re building off ramps that go off into nowhere because they’re working off old sets of the plans.

Matt: Missed it by 12 feet.

Eric: Yes, we see that.

Matt: [crosstalk 00:16:41].

Eric: That’s one example of how not having everybody on the same page can be much more costly then actually paying for a platform that allows everybody to be in sync from day one.

Matt: Where do you see the future of custom private clouds going?

Eric: It’s got a really strong future. Every trend I’ve seen points to more and more and broader adoption across organizations and their move to the cloud. For us we focus on the custom private cloud. The idea is that you can take your email to a mail host over here, in the internet over here and you can take your file serving over here to drop box and you can have your IT operations spread across eight different cloud providers but none of them talk to teach other.

None of them upgrade in conjunction with one another and that’s where really the custom private cloud model can be a panacea for organizations because you’re pulling all your data into one cohesively managed subset where a single professional like myself can manage all the IT operations. I’m not pointing the fingers at a bunch of different other organizations, I’m not working with other parties who I can’t control. I can take control of it and because I can take control of it I can take ownership of it and with ownership comes accountability.

The idea is you begin paying for a platform that’s going to be up, that’s going to be online, that’s going to be fast and that’s going to provide a very high user experience. Once you do that, organizations don’t look back so the retention rate we have amongst our customers over the last seven years is phenomenal.

In fact I have not lost a general contracting client. Once they’ve made the adoption of our cloud model they’re still with us. I’ve had clients that are now on their second, third year contract with Approach Technology because our solution has worked well for them and the concept of trying to go back and own their IT again is not even palatable to these organizations.

Matt: Now I think it was two years ago there was a helicopter crash right outside your office right?

Eric: There was.

Matt: Tell us about why you chose the location that you’re in and how that all plays into this.

Eric: Well I didn’t have a helicopter at the time. The concept of taking a helicopter to work was appealing, but I think they closed the helipad since that accident. It was a tragic accident, I feel bad. I don’t know that they ever resolved exactly what happened but they did have a helicopter that was taking off from the roof of the building and for those of you who don’t know where we’re at we’re in the Como Plaza building here in Seattle, Washington. It’s the same building as the hospital in Grey’s Anatomy. I don’t watch Grey’s Anatomy but if you do that’s the building I work in.

The helicopter was taking off and I think it snagged a cable or something and unfortunately the pilot lost control, crashed into the street, crashed into a pickup truck, killed two people. Most of our staff was out of the area and away at the time it happened and so we were fortunate.

I myself I was on vacation in Puerto Vallarta I believe when it happened. I was nowhere near it but still scary, we had a lot of our clients reach out to us and ask us if we were okay and fortunately our staff all missed it but what a horrifying experience.

Having said that I think they’ve closed the helipad here. I’ve never ever seen another helicopter land or take off from Como Plaza.

Matt: That’ll cut the noise down around there for you. Where’s Superman when you need him? That sounds like a 1977 Superman all the way, catches the cable.

Eric: You never think of something like that happening right in front of your office.

Matt: That’s awesome, so you are Christian correct?

Eric: That’s correct.

Matt: I know that’s a big part of your life. How do you see that fitting into your life in Seattle there? You live in probably one of the cities with the lowest church attendance rate and I’m a Christian as well and I used to live in Seattle. Talk on that a little bit.

Eric: Thank you, faith is a big part of my life. I have a relationship with God going back to when I was a child, he’s always been there, so he’s been someone for me to talk to. For myself it’s easy to embrace the concept of being a servant. If you’re a Christian you understand the importance of service, being a servant to the people around you, being a servant to the clients and being a servant to your employees, your teammates who work with you.

For me there’s a humbling component of being a Christian that keeps me really down to Earth, makes it easy for me to be cognizant of my own flaws and faults and it helps keep me from getting a big head and if I do get a big head praise the Lord he’s always there to humble me.

Matt: [inaudible 00:21:35] right?

Eric: Yes, but he’s constant companion for me and there’s been many nights as an entrepreneur when I’ve lied in bed praying to God. When you’re trying to start a business there’s so many challenges and I have to give thanks to God for where I’m at today because he’s been a big part of my journey.

Matt: That’s awesome man. You’ve also done some weddings and married some people along the way as a hobby. How did you get started doing that?

Eric: I got started in it when I got married. I’d asked a friend to marry me and he had to go through the internet ordination process, the onerous process of ordering your ordination for $25 or whatever it is through the internet. He provided us a beautiful service and then shortly afterwards he got married and he reciprocated the favor and asked me to marry him.

That’s where I got my start, that was my first wedding with him and then since then I’ve done probably eight different weddings all for friends who have asked me to help them as an officiant in getting them signed, sealed and delivered as a married couple. It’s been a tremendous privilege when my friends have asked me do that and I’ve always enjoyed it.

I take it real seriously, I give a lot of thought to it. I usually lock myself into my hotel room the night before and really try and customize a ceremony that’s specific to those two people. It’s always been a lot of fun in that way and I spend a lot of time with a couple trying to get to know them, trying to personalize the stories about them and things like that.

It’s got a dual reward for me, not only am I honored by them to be a part of their ceremony but I learn so much more about the couple about how they met, how they came together. Sharing some of these stories during the ceremony is often as fun, I always try and making it entertaining to a certain extent and then I always try … I’m not a pastor, I’m not a religious ordained minister to any extent. I don’t want to pretend to be something I’m not but I do always try and bring at least a little bit of my faith into it and share with them the powerful message of Christianity with respect and love and how to care for each other.

That’s one of the ways I try and serve my faith and it’s been a really positive experience for me. I’ve been really proud and privileged, I’ve done nine weddings for people.

Matt: That’s awesome.

Eric: Thanks man.

Matt: A lot of people listening to this are people that are just getting started in business. What would you say, I know you talk at colleges a lot, what would you say to the person that is getting started in business? What kind of advice would you give somebody other then study hard and eat your Wheaties?

Eric: There’s a couple things. One you have to be a risk taker to some extent. If you want to play it safe then you can play it safe your whole life but you’re not going to really break out of the mold, you’re going to work for somebody and you’re going to make them rich.

Ultimately, for myself I have to work for myself anymore. I don’t know that I would want to work for another person again. The reward of being an entrepreneur is it’s wonderful, you’re empowered to invest where you feel like you’re going to get the biggest reward in terms of the return on your business and return on your effort and equity and things like that.

By the same token it’s also a tremendous responsibility, especially once you have people working for you. These people are trusting you, they’re trusting you with their families, with their healthcare, with their retirement, with their futures.

Matt: Mortgage payments, etc., etc.

Eric: Exactly, exactly and so you got to be cognizant when you hire somebody. You understand this person is trusting you. The other thing I would say is personal relationships, you can’t do it alone. You have to treat people well and you have to be a servant to them, you have to give to them so they understand that you’re not just in it for yourself.

When I think about success at Approach Technology if Eric Carter rides off rich into the sunset that’s not a success story. If everybody in the organization feels that it’s been a culmination of their effort and they all walk away feeling rewarded then and only then would I consider Approach Technology a success.

Matt: In order to have your dreams fulfilled you have to fulfill other people’s dreams.

Eric: That’s absolutely right.

Matt: Your dream needs to encompass that of your employees and shareholders.

Eric: Happy dreams that’s right because you never know what you can accomplish. Sometimes you set goals and you’ll blow through them. You’re like wow, I never ever thought I could be here.

Matt: Been there, done that.

Eric: Don’t be afraid, be willing to take chances, take intelligent risks but all of life is the measurement of risk, not the elimination of risk. You cannot eliminate risk so use risk to your advantage and invest in it intelligently, take your chance and make the most of it.

Matt: Fast hosting versus slow hosting?

Eric: That’s right, only fast hosting here. We’ll leave slow hosting to the public cloud.

Matt: Anything last you want to say before we sign off?

Eric: No, thanks Matt for having me. It’s always great to catch up with you, I love what you’re doing at Niche Builder and enjoy all the advice you’ve been able to give to me in terms of business and personal coaching and being a mentor and I’ve learned a lot about marketing from you. Thanks for circling up with me today.

For other’s who are out there who are interesting in Approach Technology please feel free to find our website www.approachtechology.com. I’ve made marketing videos there, you can see my approach to marketing, it’s personal, it’s video and it’s worked out really well for us. If you look at the SEO results and things like that we’re right up there.

That’s all I have to say, I want to thank everybody who was able to take a moment and enjoy this interview and feel free to reach out to me via LinkedIn. Eric J. Carter, I’m easy to find.

Matt: Awesome man, thanks so much for your time.

Eric: Thanks a lot Matt, have a great day.

If anyone wants to get in touch with Eric Carter you can through http://www.approachtechnology.com

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