Burkhart Talks of Product Development, Due Diligence, and the Art of Questioning

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“Going forward we want to keep Slash/Web doing what we are really good at, but I would also like to continue building product. From a personal standpoint I really enjoy building something that serves the end user, it’s a throwback to my time in architecture,” observed Brett Burkhart, CEO of Slash/Web studios of his dual role in leading both a service firm and a software as a service firm.

Multiple roles would seem to be a career paradigm for this ISU liberal arts graduate who was the featured guest of Mike Colwell at the October Business Innovation Zone Start-Up Stories session. Colwell, Director of Entrepreneurial Initiatives for the Greater Des Moines Partnership, led Burkhart through a recitation of the winding path that led this one time Architecture student to a leadership position in dual entities, one of which serves the HVAC industry.

“With the abundance of free time studying architecture provided me,” he said with tongue firmly in cheek, “I found a number of additional interests that I wanted to pursue, such as videography, photography, 3-D animation and web design, and along the way, found some projects that would allow me to utilize them.”

Working in a series of architecture firms Burkhart cultivated yet another skill that would serve him well going forward; asking insightful questions and listening to the answers. “We were designing high-end residential, so you started with a clean sheet and asked a lot of questions,” he explained. The idea was to craft a product that was tailored to the precise needs and lifestyle of the future residents. This ability to ask the right questions and listen to the answers would become a cornerstone of all future successes.

By the 2008 downturn in housing demand, Burkhart and an associate were working for what had become an Architecture/Web Design studio and opted to break away, creating Slash/Web Studio. Opportunities had become plentiful in the field and the move proved to be a wise one. Little did they know it was, in some ways, just another step in the path.

“As we continued to grow our web design business, we transitioned to much larger projects and moved much more towards development rather than design,” he reflected on what was more of an evolution than a pivot. As a result Burkhart and company found themselves meeting an increasing number of contacts with product development needs and ideas. Here again insightful questioning allowed them to separate the wheat from the chaff, often declining projects when they felt the client could be better served by existing products, or that the idea put forward as a solution was less than well formed.

With their foray into product development on a small scale to serve the needs of specific clients, the next logical step on the path was towards product development on a large scale to serve the needs of a specific industry. For this step, the insightful questioning became the due diligence of an investor. “We look at it from an investor viewpoint, we are investing development time that could otherwise be generating billable hours,” he argued, further noting that you have to ask all the same questions an investor would ask before committing resources. As a company whose expertise is in development, due diligence requires that you have knowledge of the industry the product will serve as well as access to the market and credibility within that industry.

All of those issues came together when Slash/Web met an experienced consultant in the HVAC industry who saw a growing, almost unanimous, problem among small to midsized HVAC firms; the exodus of knowledgeable sales people. The consultant was commanding a successful salary filling the vacuum and utilizing an enormous excel spreadsheet to model pricing and generate bids, but as Burkhart observed, “he was not scalable.”

“In essence that spreadsheet was our MVP, from there we knew the direction we needed to go,” he recalled. Fourteen months later was born ThermoGRID, the HVAC Profitability Platform. This software as a service, which Burkhart spun off as an independent business, allows the user to do on-site estimating and bid submission utilizing industry design standards and current vendor pricing. This levels the playing field, for the smaller shops, and dramatically reduces the need for the sales people to have decades of experience at pricing.

“Our research showed us that 70% of heating and cooling companies fail in the first year, not from a lack of clients, but because they price poorly and have the wrong skill sets,” Burkhart elucidated, harkening images of Michael Gerber’s E-Myth where talented tradesman start their own business and fail for a lack of business process knowledge, in this case often setting prices at a level that gave them a net negative for a bottom line.

Now in the hands of 30 initial users, and headed into the intense season for heating and cooling contractors, Burkhardt expects to make adjustments based upon user feedback before moving into an aggressive sales cycle next year.

Asked about the future, Burkhardt took a measured look at the path thus far traveled. “We’ll continue to look at opportunities from an investor standpoint,” he conjectured, “do we meet all the criteria for a good investment. If so I want to really understand how we can build something that can truly serve them.” Whether a designing home, a web-site, or a software solution, Burkhart will be asking questions with the end-user’s needs as his guiding principal.

Miller and TelePharm Ride the Wave of a Perfect Storm to Entrepreneurial Success

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“I had no idea what I was doing then,” says Roby Miller with an unassuming smile, of the first time he met Mike Colwell in 2012. Miller, Founder of TelePharm Technologies, made his admission to Colwell, Executive Director of Entrepreneurial Initiatives for the Greater Des Moines Partnership, at the September edition of the Business Innovation Zone Start-up Stories. Miller’s timely appearance before a group of entrepreneurs and investors as well as interested parties comes on the heels of the announcement of TelePharm closing a Series A round of funding for $2.5 million from two prominent Iowa businessmen, John Pappajohn and Bruce Rastetter. Miller would recount the path from the business plan Colwell and he sketched out to a company which will soon employ upwards of 15 people with sizable funding and a significant number of clients in the pipeline awaiting the opportunity to purchase its software as a service product, during an hour long Q & A fielding questions from both Colwell and the attendees.

A Confluence and a Perfect Storm

Holding a degree in Entrepreneurial Studies from the University of Iowa and a Certification in Advanced Project Management from Stanford University, Miller was a solution in need of a problem when he found that problem in his own back yard, or rather that of his family. Miller’s family, in the pharmacy business in rural Iowa, was being forced to close several small town pharmacies as they were no longer profitable. While a few tele pharmacy solutions were on the market, they were cost prohibitive, and/or cumbersome in their delivery of service. To help the family forestall the closing of even more locations, Miller agreed to research options but found no viable solutions. “So, I sort of took it on as a weekend project,” recalls Miller, ultimately developing a prototype which became the first tele pharmacy implementation in Iowa. While the software was not scalable and far from what it would become, Miller’s search for a mission, and his families search for a solution had come together to found TelePharm Technologies. d come together to found TelePharm Technologies.

“There is a lot of churn in the pharmacy market right now with the average owner being 63 years old,” explained Miller, noting that 47 rural pharmacies closed in Iowa in just the past year as they could no longer remain viable or recruit pharmacists to small towns. “Somehow we managed to arrive during a perfect storm for tele pharmacies.”

TelePharm offers a remote verification and workflow application with a video conferencing solution for rural pharmacies to operate multiple locations with one pharmacist. The application enables a remote pharmacist to inspect and verify prescriptions at each pharmacy to ensure accurate dispensing filled by the local technicians.

“It’s a total game changer for pharmacies,” relates Miller, allowing them to stay open in sparsely populated rural communities as well as expand into the many locations which currently may have a clinic, but not a pharmacy.

Financing

Originally bootstrapped and a recipient of 2012 Demonstration Fund dollars, Miller commented on the differences between seed funding and Series A investors. “In the seed rounds the investors were a little more hands on, they had a greater personal interest in the product. In series A discussions however it was much more intense and official. They are very serious meetings,” he observed, adding that he was helped immensely by J.D. Geneser of LWBJ Financial and a mainstay of the Central Iowa entrepreneurial investing community. “It helped to have a gray hair in the room on your side,” remarked Miller to the delight of Colwell and the other elder statesman in attendance. Miller hopes that any future funding needs can be secured through the banking process.

Sales Process and Cycle

“I wouldn’t say I developed everything,” said Miller responding to a question about his sales process. “It’s more like I made up everything.” Pointing to trade shows and emerging partnerships with both pharmaceutical suppliers and the makers of pharmacy management systems as well as social media, Miller admits that the sales process is evolving and that the solution they offer is at this point so unique more sales calls are inbound rather than outbound. “The cycle is all over the place ranging from a few weeks to a year and a half. As we get further down the implementation it will grow shorter,” he expects, noting that they have 40 clients awaiting implementation at the moment.

Scalability, Economic Growth and Opportunities

Unlike the prototype, the TelePharm software of today is highly scalable meaning not only can existing pharmacies on the verge of failure be saved by linkage to a partner business in a larger community, but new businesses can be added. While some early naysayers saw the software as eliminating jobs, the truth is that by saving pharmacies that were destined to close and making possible new pharmacies the software is likely to become a job creator.

“The cost of opening a pharmacy is really not that great,” related Miller, explaining that pharma suppliers will front the initial inventory, leaving the cost of space and the less expensive technicians. TelePharm makes possible the establishment of pharmacies in locations which were previously considered cost prohibitive, for instance clinics currently without pharmacies. Additionally clinics can utilize the counseling component to offer a consultation with a pharmacist at the clinic as a value add to the clinic services.

“It seems like there are so many different things that we can do from this platform,” says Miller of several future opportunities made possible by the data being collected. Keeping his developers focused on the tasks at hand is his immediate challenge, but he knows there is a richness of opportunity in the near future. 

Exit Strategy

Asked if he had an exit strategy, it became clear that Miller enjoyed the team he had put together and the work they were doing far too much for exit to be on his mind. “I have no idea,” he replied. “I’m doing what I want to do.”

And after all, isn’t that one of the enticements of entrepreneurism.

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