Bootstrapping Using Services to $12 Million: Square Root CEO Chris Taylor (Part 2)

Sramana Mitra: What year was this when you were the only employee?

Chris Taylor: 2006. That’s how it started. For the first couple of years, I did a lot of different projects around the auto industry and also for a lot of startups out in the West Coast.

Sramana Mitra: You were consulting at that point?

Chris Taylor: Yes, I was consulting services and looking to develop products out of that. One of our values today is being customer-inspired. That comes from those early days where we would get in and learn our customer’s problems by being in the trenches with them and trying to extract a horizontal value proposition out of those. We had a couple of different products.

We also did a lot of work around the electric vehicle space and had a product there that was starting to get fairly good traction. That takes us up to about 2009. We never really hit it out of the park with any of those for various reasons. We still looked and felt much like a consulting company. In 2009, we hit the big idea. We realized quickly that it was a big idea and we wanted to refocus the company.

Sramana Mitra: What was the big idea? How did it emerge out of this bootstrapping using services process.

Chris Taylor: We had a customer come to us and they had a problem with identifying what a store was good and bad at and getting accountability to fix it. Automotive and retail companies manage their stores by building these organizations distributed throughout the US. There will be a national headquarters for the US and there will be a Regional Vice President that runs the northeast. Then there’s a guy called District Manager that manages 15 stores.

That communication problem down through that  geographically dispersed set of stores is a really interesting problem to solve because you have these stores that have local influences and each of them is good and bad at different things. Keeping them accountable and keeping them aligned is a really hard problem. We were solving a very small piece of the automotive industry around service. As we got traction on that, the customer experience side also wanted to jump onto it. Before we knew it, it was the majority of the business within less than a year. So we decided to completely focus on that and start to turn the ship from a consulting organization to a product organization.

Sramana Mitra: Explain to me what the product is.

Chris Taylor: There isn’t really a space for this. When we talk to the big analysts, there is no Gartner Magic Quadrant for this stuff. We’re calling it as store relationship management. There’s a couple of big pieces. The first is prescriptive analytics. For a given store, what would it take to make them perform like our best stores? Are they really bad at customer experience or are we just comparing them to the wrong stores?

It really is about identifying where the opportunity is at a given store. There’s a lot of analytics and collaboration around shared understanding of what success looks like at the field level, store level, and the corporate level. Once you identify that, you can apply accountability to it. Once you have a store that has a problem in customer satisfaction, we can review their process and come up with a very specific action plan and attach dates and accountability to it. For huge organizations, all that lives in Excel and Word. We bring transparency into that and also bring accountability and measurability into that so that they can start to improve the performance and processes of the stores.

This segment is part 2 in the series : Bootstrapping Using Services to $12 Million: Square Root CEO Chris Taylor
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