In this episode Josh talks with Giridhar Akkineni, CEO of AkkenCloud. They talk about a vertical software business in a unique market.
In an attempt to control the losses of his IT staffing company in 2002, Giridhar Akkineni started looking for a platform to centralize information, enhance efficiency and boost profitability by automating the “fill-to-bill-to-pay” process. Surprised and disappointed, in 2005, he set off to build an infinitely flexible, remarkably intuitive, and astonishingly powerful AkkenCloud platform for the staffing & Recruiting Industry.
Now, hundreds of staffing and Recruitment companies, with thousands of users, successfully are running their businesses on AkkenCloud’s SaaS Platform.
In today’s episode you will learn:
- What are the problems in the staffing industry?
- How they can be solved through technology?
- What are the trends in the recruitment industry?
- Why continue to invest in your product for your customer success?
- How does it look like to grow vertical software business in a unique market?
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick. You’re at The Sustainable Business and my guest today and I hope I could just name sorter right is Girdhar Akkieneni. Did I get it close?
Girdhar: Yes, thank you.
Josh: He is the owner and CEO of AkkenCloud which is a staff recruiting platform for people who provide temporary employees. And we’ll probably get a little bit into what temporary employees are and how to use them appropriately. But I want to start today’s podcast with a little bit of a curiosity on my part is your [inaudible 00:01:20] was talk to me when you first started—that he started out with 50 employees went down to three and then grew his business again. So what happened?
Girdhar: Well, first of all, thanks for having me on this podcast, Josh. I think you’ve been doing a great job. I actually watched a few of those in the past. It’s been a while. Is it four plus years now you’ve been doing it the podcast and I think that the content that you put out is very, very helpful for people like me, especially to answer your question, the hard times when we have to shrink back to three employees as well as in 2009 June, and we are at the peak of biggest recession that the man has to go through. And that was because when we launched our platform in 2006, November, at the staffing one in Vegas, I remember was a great place to be. We had a great response on the concept of how we can have an all in one platform rather than these staffing companies or temporary staffing companies you might call. You’re using different bits and pieces of different various software’s having all of that together in one suite. And having all web based and stuff client’s server and various other means.
So it was well received and we had many staffing companies seeing the value [inaudible 00:02:43] and after our platform very well and we grew up to over 50 employees here in Nashville. We actually had the entire floor of this building back then which we have taken over again now recently, but staffing industry what we have seen has been the last industry that was affected by the recession because once these corporations start lying off people and they need temporary staff, but when those shrink, the staffing industry shrinks as well.
So we have lost many, many customers that resigned because they just went out of business. And we could not do anything because of the economy. So we just have to go through it. And we know we have a great technology at hand that we build. And we’ve been confident, of course, even though it took longer than ours to come out of the recession, we actually focused same time continue to invest into our platform. And honestly, we learned so many lessons that we joke around, but there’s nothing that we can experience that we are not so that was as coming out of the recession, growing back to close to 80 employees now.
Josh: So what was the biggest lesson you learned?
Girdhar: The biggest lesson is, first of all, how to sustain, how to quickly respond to the circumstances, especially that are not in your control, but also how to pay attention and listen to things that your customers say, your customers want and the industry moves where when you set up, sign up to provide them something that is going to make them more efficient, be on top of the changes in the market. So those are the two critical things that we have learned through these years.
Josh: You know, just seems so obvious that of course we listened to our customers, but the truth is, most of us design a product from what we think they need and we never bothered to ask whether there is something they think they need.
Girdhar: Right. So my background is technology. I’m from a business family. This is my seventh venture, of course, the longest [inaudible 00:04:55] right. But I have experience in technology I have Undergrad in computer hardware, Masters in computer software. I’m also the Chief Architect of our platform. So what I do is I’m constantly in touch with our customers. Along with being on top of trends that happen in the industry. We work very closely with American Staffing Association. We work very closely with the staffing industry analysts. We work very closely with various staffing associations in the US. But also I work very closely with our customers, and all of them have at direct access to me.
So when I talked to them, I listened to their problem. And I gained experience through these years like I have when I’m talking to them, when I’m listening to their problem. I can actually design a solution on the fly, and I can relate to them talking back in a way of course, we go through the process of designing it. Going through the testing process, we go through the beta and see how we measure the results of is this what it is even before we built and try to force our customers to use it. We work with them from step one, to all the way where we measure it to be efficient and is providing the results for them. That’s the main difference. That is what we have learned.
Josh: So what do you think is the biggest change in the last five years in the staffing business that you guys have helped your customers deal with?
Girdhar: Well, honestly, everything because the generation has changed to millennials. Now gig economy is getting more popular people. The young generation has their own preferences. They are more tech savvy when we started in 2006. And when we launched the platform and we matured it through 2010 and 2011. We learned that the market conditions completely changed.
For example, simple example, for recruiting and sales people, back then they were being paid commissions on placements [inaudible 00:06:59] where you send an invoice or replacement or whatever it is, but now, things change that they get paid on cash received.
So if you have to track all that where you have to track a performance of a recruiter or a salesperson and hundreds of candidates that they’re dealing with, and then you have to track all the way from short listing to submissions to coordinating with the hundreds of customers to make those placements. And once you make those placement coordinate with thousands of times on a weekly basis for you to be able to gather the time sheets and expenses and then create templates in hundreds and thousands of formats that your customers would request on a mandate, but also to be able to pay these thousands of times on a weekly basis accurately on time, being able to comply with all the state and federal compliance and all.
So having all of this prior to the recession, and after the recession, things have changed completely hundred percent. So we realize it’s not just something as I said, we build a product future and try to help our customers use it. We kind of rebuild the entire platform starting in 2011. Again, to be more dynamic, to be able to adapt these market changes. But also, our platform is going to be the core of the staffing businesses. But there are many trendy tools that come and go all the time. If you remember, it used to be these job fairs that are very popular back long ago, decades ago. Then we have this outcome and job boards online. And then we have social media. Now we have tools like texting, videoconferencing video interviewing, various other tools that came in, they have automatic background. There are companies that use AI looking at your profile socially and can and can predict [inaudible 00:09:00].
So it was very important for us to make our platform to be dynamic, not just work within, but also with all these other changes. All of the put together, if you take— trying to map what has changed, everything changed, but also all of these together.
Josh: Now, you know what the biggest changes I think that happened to you? At least this is from where I’m sitting in, by the way the staffing industry are the temps that work in businesses, for folks who may not know what we’re talking about when we’re talking about the industry we’re talking about.
Josh: But the biggest change that I think has happened in the world of what you’re providing, which is an all in one solution, essentially, is that when you started in 2007, 2008, the cloud was just sort of starting to appear. And the term SaaS if you said SaaS in 2006, nobody would know what you’re talking about which by the way Software as a Service. Now I think my suspicion is the big CRM company probably was just starting around that time—Salesforce.
Josh: I tried using Salesforce back then and it was horrible. I mean, it wasn’t nearly as good as Act was, which was the CRM at that time, but have at Act and you had to have a Facebook client, you had to have all these different programs. That’s going away because what you’ve done is you’ve integrated all the tools that you need, if you’re in the staffing business, on one platform, and probably all those tools talk to each other. Am I correct about that?
Girdhar: It’s not talk to each other. They are in one piece together.
Josh: Well, from a non-techie like me, it appears they talk to each other.
Girdhar: Right? So what you said is exactly right back when we launched in 2006 and 2007. Of course, it was called SaaS Software as a Service back then, but before then it was called On-Demand. And before then it was called .com. And now it’s called Cloud. But it’s the basic thing where you have everything to be accessible in a simple browser from anywhere in the world that you can just log in. And Salesforce has been a very successful, early adopter of that technology and a pioneer in that business.
Yes, you’re right. So what we provide is Salesforce provide CRM. There are other companies that provide applicant tracking system, even Capital Management, accounting, timesheets, invoices, many other big companies that provide bits and pieces of it. What we provide is all of that together in one simple application where you just log in, and it’s all there either you are a salesperson in a staffing company, you’re a recruiter in a staffing company, or you are a person on boarding HR manager in a staffing company, or you are responsible to accounts payable, accounts receivable being able to create invoices, or you are responsible for a payroll. All of that are everybody in a staffing company that’s sitting in the staffing office are able to use one single application and they logging into the same and that helps in a lot because you have one Silas of data now, instead of all of your data, that kind of helps to for reporting prediction, and various other thing.
And all of this makes it very easy and very attractive for the temps as well, because these people are looking for a job sometimes like industrial on the day to day basis. They show up at the staffing company office in this corner or the corner of the stage every day and you need to be able to match them with jobs. So there are people out there depending on the staffing companies, but you also need to have savvy technology and latest tools to be able to attract this talent to come to your staffing and work for your staffing. So you might be able to make more business than your competition down the corner. So that’s all together has big help. I can share one example to relate what you said before and after in the early adoption of.com and now cloud is when we launched initially, I think about 2013, or 2014.
We used to have questions from our prospects and our sales people have to answer them is people who are curious, “Okay, where is my data? How secure is it? Where are you keeping it? Okay, what’s your data center?” You know, they’re not technical, but they have those concerns. And I don’t believe we have heard any such questions in the last three, four years at all because the infrastructure of the cloud and the advancement of it and people have realized how they are living on the cloud either backup from their smart phone or from their PC or anything. It’s all in cloud now. So yes, definitely things has turned around and changed for the better and option.
Josh: Well, people certainly are more trustful of it now than they were before. And in my opinion, you still need to ask the questions about where are the data centers and how are they mirrored? And what sort of security is here because depending on what you’re using for a cloud, it might be a really good one or might not be such a good one. So it’s a question I would always encourage people if you’re going to go to a cloud based service, know where it is.
Girdhar: Yeah, in fact, we make that information public like if people go to Akkencloud.com, which is our website, it not only has all the features and all that stuff, but it also discloses where our data center is, how security is, what we do to keep it secure and why is hundreds of our customers doesn’t even bother about the security and all they rely on how we monitor it 24/7, how we have people that catch things. We had several of our other competition systems going down. But we build this infrastructure from ground up. Yeah, it’s very critical. But also we make it very open. So when we talk to prospects and all they already know, in fact, they have some certain expectations these days in regards to security available, the service and all that you need to be able to meeting that on a daily basis.
Josh: That makes actually great sense to me. So what do you consider your biggest challenge today in your business?
Girdhar: For us the biggest challenge today in our business is to be in the known I would say, even though we’ve been in business for so long, we bootstrapped and we are growing fast. Our customers has definitely helped to spread the word around what we do and all but last couple of years has been good that the market is hearing more of us, I would say the marketing that we have done, it definitely help for inbound leads, and then as calling up so we literally have been growing hundred percent just on inbound leads at least last 12 to 18 months.
So there’s a lot to do. We are not the biggest in this space. We help companies that are over 200 million in revenue— annual revenue that we compete with on a daily basis that we win because of not only for the technology we provide, but also for the service that we’ve been providing to thousands and hundreds of our customers.
Josh: So are you a venture funded company or are you privately funded?
Girdhar: We are privately funded at this point. And we’ve been having fun growing it the way we like and we have enough growth for us to be able to continue to have this fund, but also I enjoy because as part of the customers I talked to them. I actually— my background is before I can cloud, I had my own IT staffing company. So I’m from the industry.
Girdhar: And that is how I have known the problem that existed because y2k and.com was the golden era where I had my IT staffing company and I grew it fast. But because of the.com crash, I have several .com companies—customers disappear overnight, and we had this hundred millions of bill in [inaudible 00:17:40] out there and I remember we showed up at one of their offices in New York in this tall building and the only thing you can see coming out of the elevator is a huge iron door. That’s it nothing things like that. And the reason why I lost money in the business is because at that time, there was no solution to coordinate between my teams. My sales and recruiting teams have been placing people for commissions. And as soon as the place and people start working on it, they used to make commissions, but they were not connected with people were these invoices were piling up, and people who were not being paid on time. And we will not receive all that. So those kind of made me go out and look for a solution. And this was in 2002 and even today, I could not find a solution comparable to Apples to Apples like our platform. Yeah, there are solutions out there, the biggest of the companies that kind of offer some pieces of what we do, but not in A to Z.
Josh: Something I find very interesting. You’re in what I call a vertical market, which means you built a solution for one industry. And that’s my very favorite type of software company, by the way, they’re rarely venture funded because they really are going to grow big enough to attract the interest of a venture company. But boy, the profitability of a well run vertical software company is quite, quite, quite good. And the other side, the ballpark is the best vertical software companies I’ve ever seen. And this is almost across every industry I look at is that the owner of those companies comes from the industry and they used to have operating companies.
Girdhar: Right. So that experience definitely helps to understand the customer based and what their requirements and where the industry is, but you’re right. Typically, the software companies have technology companies focused on what goes out in the biggest in the world. But just to share the size of the staffing industry in the US. It’s almost 130 billion in revenue. I think in 2018.
Josh: It’s a huge industry.
Josh: But at the end of the day, a company – your biggest software suppliers in your industry do $200 million a year in the world that’s Trump change. If you’re not in the billions, they have no interest in you whatsoever. So—
Girdhar: That’s true. For some—
Josh: Private equity will have an interest in you, but VCs won’t. It’s different worlds between the two.
Girdhar: The biggest one that our market average in the US to sell to the staffing industry is close to $2 billion dollars.
Josh: Right. But that’s the whole industry.
Girdhar: Right. There’s a lot of leeway here for us to grow. You’re right, if you want to be public— I mean not every company could be Salesforce or [inaudible 00:20:48] worker. Because after Google—
Josh: Don’t they need to be I’m going to tell you I know last week or so vertical companies—
Josh: And they’re worth $50 million, $60million $70 million. They’re making a figure out how to spend the money they’ve got already. So, what’s the purpose?
Josh: Unfortunately, Girdhar we are out of time.
Josh: You did mention your company before and how to find them. Could you tell us again, how to find you, how to find your company in case somebody might be interested?
Girdhar: Yeah so if you go to online and type in www.akkencloud.com. That’s akkencloud.com. That’s our website. And you can submit the form if you want to contact us or you can always connect with me on LinkedIn. We have a good marketing team that keeps us active on all the social media, LinkedIn, Facebook, Twitter, Instagram, I think these days with the pictures, so that’s where you can find us easily and we are located in Nashua, New Hampshire just outside 40 minutes Boston. So we are here and happy to have anybody, connect with me, continue the conversation. I’ll share my experience that I think can help.
Josh: Cool. And I also have an offer for you. Well, it’s not a new discovery. It’s actually a discovery I made when I was 24 years old, which is cash is king and all businesses, especially privately held business if you don’t have enough cash, you can’t play the game anymore. So I developed a program I call Cracking The Cash Flow Code which talks about what you need to do as a private business owner to go from not having enough cash to how to have an excess amount of cash. And with that in mind, I developed an info graphic which talks about the five steps to creating cash flow freedom in your business and your life. It’s really easy to get all you have to do is go to my website which is www.sustainablebusiness.co. That’s .co not.com/cash flow. www.sustainablebusiness.co/cashflow. You can get the free infographic download it, take a look at it, give me a call and talk to me about I love talking about that stuff. So thanks a lot for being with us today. We’re with Girdhar Akkieneni. I’m Josh Patrick. You’re at the Sustainable Business. Thanks a lot for stopping by. I hope to see you back here really soon.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around a hundred years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at firstname.lastname@example.org.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.