My wife Debbie and I caught the premiere of NBC’s The Biggest Loser the other night. For those that follow the show, Jillian Michaels returns as the senior screamer on the show. I like watching the show because of its use of embedded product placements and am always curious what they’re going to do next.

This year, The Biggest Loser has a totally redesigned fitness center, with all of the equipment provided by Planet Fitness, a low cost, neighborhood gym model, available as a franchise. They appear to be out lifting 24 Hour Fitness, the previous equipment sponsor on the show.

As the premier was airing with Bob, Jillian and Dolvett beaming over the new gym equipment by Planet Fitness, I decided to visit http://www.planetfitness.com/ to see if anyone had purchased the rights for Central Oregon, where I live. I’ve been a gym goer since I was 14 and have thought about owning a neighborhood gym for the past 20 years. But that is another blog post, I digress.

When I attempted to go to Planet Fitness, their site crashed. The premier had over 1 million viewers; I suspect this was a spike the Planet Fitness IT team may have not expected. I'm sure the sales and marketing team were happy their product placement created demand, yet immediately went into shock when their web site crashed.  I want to suggest a better way. If Planet Fitness would have moved their website to Microsoft Windows Azure Cloud Platform, they could have easily adjusted the amount of computing resources around their original air dates on both east and west coast premiers. Once their website and member portal is converted to take advantage of Windows Azure elasticity, it’s really as easy as logging onto the Azure management portal and moving a slider up and down to allocate more or fewer server instances.  You have the advantage of extra computing resources when you need them without paying for a maximum build out of a datacenter only to be fully utilized when the Biggest Loser airs.

If your business is a B2C (Business to Consumer), and you’re approaching the tipping point, your IT staff should be moving your customer facing web properties into the cloud. IT staff are always resistant to change, especially outside their comfort zone.  This is when you need a team of skills-based consultants who have been there and done that, successfully.

Nimble Development - Windows Azure Experts

Bend, Oregon, based Nimble Development (www.NimbleDev.com) is a team you can trust. They have deployed websites, web applications, tablet applications and mobile applications on Windows Azure. In fact, they were one of the first Microsoft Gold Certified Partners for Windows Azure, working through very early and ever changing Azure SDKs (Software Developer Kits). Nimble Development is competent at Window’s Azure and also has friendships and strong ties to the Windows Azure development team.

Add the fact they’re an Agile development shop, skilled in short SCRUM sprints with results, they move quicker and bill less time. In a word, they’re Nimble. If you’re a growing B2C company, there is no reason you should be hosting your website in a traditional hosting environment that can’t add computing resources when you need them and shrink back down during non-peak periods. This is what Microsoft Azure was designed to do and Nimble Development is the team to help you. I know this sounds like a commercial, it isn’t. I hate to not offer real solutions to my web visitors. If any of you have worked with other teams to move your site to a true cloud platform, please use the comment field below to share your details.

As for Planet Fitness, congratulations on opening your 600th franchise. Now make sure your IT strategy will support it.

…Jim

You could say I’m an old dog in terms of technology. I started my first business in 1986, back when a Hayes 2400 baud modem was the hot ticket. Fast forward 25 years later, president of two public companies (Mustang and Starbase), a couple corporate turnarounds (Web Associates, Starbase and Alchemy) and two startups (Mustang and EventMingle), you could say I’ve earned my battle scars.

For those of you who have been following my blog know, I have recently been working with 7 startups though our VentureBox business accelerator here in Bend, Oregon. Startups live in the constant state of thinking of ways to disrupt competitors and pivot business plans to grow rapidly in order to increase cash or traction. This week, I had a lot of time to think a lot about the differences between startups and well established businesses. One of the questions that came to mind was: “When is it ok for an older company to stop focusing on cash and traction?" I tried to pick my words carefully. Note, I didn’t say stop altogether, I said stop focusing.

Businesses, as they mature, develop large customer bases they have to support. They have infrastructure in place. They have made decisions about their back office systems such as accounting, CRM, work flow, servers, operating systems, technology partners, etc. Next thing you know, years have gone by, you have tens of thousands of customers and 1,000 employees. Cash and traction may no longer be a focus. Every decision needs to take into account, how will it affect my customers? How does the change impact my back office? Next thing you know, your company is not as agile as before and you ask yourself, "How did we get here?"

Each of the turnarounds I led had major back-office issues. Web Associates built web content for HP, Apple and other companies, yet didn’t build the internal controls to track the cost of producing those pages. They assumed we made money because it was a six-figure sale. You can't improve margins if you don't know - to the dollar - what the margin is. Just like in a startup, find metrics you can easily track in a graph.

Starbase’s accounting system didn’t talk with the customer support ticket system, which resulted in customers getting support even if they never actually paid for the software, which resulted in longer DSOs then we had to have.  We couldn't easily inform customers when the defect was fixed by engineering because the CRM app didn't talk to the defect tracking system and version control. These disconnects cost us margin and didn't help us build raving fan customers.

As your business grows, your IT strategy and vision MUST keep up. If it doesn't, your IT costs will erode into your margins resulting in making you less competitive. This can have disastrous effects when you’re challenged by a low cost competitor. Let me put it this way, if a competitor has established a price ceiling and your product or service is similar, then the main weapon you have against that competitor is better customer service and a lower cost basis – through technology innovation. This will allow you to maintain margins if prices move lower. Each time a customer calls or emails support, your profit margin is hit with a cost. Look for ways to eliminate the call or email all together.

When I arrived at Alchemy we were using two different CRM packages because one system couldn't do everything. This resulted in placing orders and registration keys in multiple systems, with a lot of cut and paste. It was awful. It would take 20-30 minutes to enter an order and errors would occur if during the order entry process the rep got a phone call and disrupted them. The previous leadership thought this was acceptable. No one tracked the total average cost per order. No one tracked how many orders went in the system wrong, resulting in unhappy customers and terrible first impressions. These are all costs that need to be faced. If we had a system to enter an order in say 10 minutes, without cutting and pasting, we could process more orders per day, with fewer errors and have more profit per order. Also, consider the cost of training. The more duplicate entry you perform the harder it is to train people to do it, which leads to higher costs and, you guessed it, lower profits.

Which brings me back to the main topic. When you’re in startup mode you’re focused on efficiency. You have to be, you don’t have a large staff. So you look at every single touch point to make sure your UX and work flow is nice and tidy. You look for cloud solutions versus on-premise servers you need to constantly maintain. You look at package software solutions for accounting, CRM and work flow instead of spending time to code it yourself. As your business grows, I urge you to think like an entrepreneur when it comes to your Information Technology and Back-Office needs. Each time a customer calls or emails, ask, “How could this have been avoided?” Conduct annual IT audits and track things like order entry to see how many they enter per day, per person. This is similar to knowing revenue and or cost per employee and tracking it over time, but you're doing it by department or task.

Look at your customer's experience across all functions and see how you stack up with your competitor. For example, if your competitor allows their customers to go online, change their profile, order products or contact support, and you don't, then they're likely doing a better job managing the overall customer experience and business efficiency. 

In my experience, you’re usually competing on more than just price alone. When you’re a startup you spend a great deal of time ripping apart the competition. If it’s been awhile since you’ve done a deep dive, put on your startup hat and give it a go.

…Jim