Trends And Opportunities In Cloud Computing: Jim Burleigh, CEO Of Cloud9 (Part 4)

Sramana: What aspects of supply chain did Navis build products for?

Jim Burleigh: It was software that runs marine container terminals. It was very complex software, and it was very heavy on operational activities and optimization. It must run 24×7 otherwise you will get a call from the minister of commerce of any given company complaining that your company is hampering their GDP. It is one thing to have the CEO of a Fortune 500 call you but when the minister of commerce from South Africa calls you and tells you that their ports are down because of your software and they want it fixed now, it is an entirely different issue. Transportation is one of these things that nobody notices, but it touches everybody in their daily lives.

Sramana: How long did you spend at Navis?

Jim Burleigh: I spent five years there. We sold that to Zebra Technologies, which makes the label printers. Most boxes that are shipped have 8.5 by 11 labels on them which are made by Zebra. It was a very strange acquisition for them, and they have since sold Navis. They were trying to build a business around the RFID world and we grew a number of areas that involved GPS and RFID tags.

Sramana: The Navis story is essentially a turnaround story for you. What are some of the key nuggets from your time there?

Jim Burleigh: Not an entire turnaround but it definitely was something that went from languishing to expansion. Any business has the same issues around core value to the customer. We had some definite work to do there. That company was largely an execution issue. There we had two founders. They only job they ever had was working at Navis. They had built a company that was generating nice cash for them but they needed to expand in order to generate money for their shareholders.

They sold half of the company to a private equity firm, so our job was to grow the company for the private equity firm. The company was doing about 18 million dollars a year and we grew it to the 75  million to 80 million dollar range before selling the company for a nice premium. We had internal structural issues and personnel issues as well as core product issues.

What was interesting there was determining where we should invest in development in order to get future return. That is an interesting bet to make. We had to balance availability of capital, cost of capital, and the tough part was knowing what the return would be. If you knew you would get a 10 point return then it was a no-brainer, but you didn’t know that. We learned how to make our best judgment.

If you really look at the way that software application features and functions are built, then you realize you would have to build a portfolio of features and expect some to fail and some to perform admirably. We took our best ideas, invested across them, and then tried to identify which ones were failing as quickly as possible. Failing quickly is critical. Yes, you might lose a million dollars and some time, but you have to be comfortable with that because no software company picks the right thing to do and does it perfect every single time.

This segment is part 4 in the series : Trends And Opportunities In Cloud Computing: Jim Burleigh, CEO Of Cloud9
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