Speakeasy: Born to Run Q&A With Stephen Young, Square 9

We thought it was time to catch up with the folks at Square 9 and talk a little ECM, capture and vertical commitment. Of course, when the time came to sit down with Stephen Young, the president and CEO of the New Haven, Conn.-based firm, the conversation took a lot of other turns as well — from the history and future of the industry to Bruce Springsteen and blues guitar. Join me in the SpeakEasy.

Where is Square 9 seeing traction right now in the channel?

Our company and our products have both grown tremendously. We started off as an entry level ECM product that could be easily bundled into the copier — that was the legacy of our company 10 years ago. But over time, we built on that product — we added workflow, we added web forms, we’ve recently added capture. Now we have a full span of ECM solutions, and we can cover organizations from the SMB all the way up to large enterprises.

What we’ve seen is that as our products have gotten more powerful, they also become increasingly complex. As you swim upstream, people want much broader functionality which is what we’ve worked to deliver in recent years. We’re trying to reel the complexity back in right now — our current big focus is on repeatable solutions and getting deeper market penetration. At this point, people who want to invest in ECM for their businesses are looking to increase productivity. We are not seeing a lot of wage increases in the current market; real wages are only rising about 2 percent annually. So, how do you increase real wages? You do it through increased productivity which is what we’ve been tasked to deliver.

In the past we built a lot of custom systems for clients, but many businesses have the same core operation. So, this year we’ve provided dealers with the ability to easily create common business applications, and then export and repeat them. Our dealers are increasingly relying on us to do the professional services as use cases get more and more complex. We’re trying to find ways to put that part of the business back in their hands.

Right now, there’s a lot of rip and replace that’s going on out there. We go into places and they’ve already got a solution, but maybe it’s not doing the job that they want it to do – so  we’re replacing it. Our biggest vendors right now are conversion bureaus. We have three of them, and we keep them as busy as they can be.

There’s a lot of next-generation BPM materializing, where the client started with a document management system but doesn’t have the workflow capabilities or the capture capabilities, and so they’re converting to another platform like ours. This is the reason why we’re doing so many  conversions month in and month out. We’re taking a horizontal market application, like an accounts payable solution, and packaging it up so dealers can walk into a customer location and show them a beginning to end piece with very little customization – and deliver it much more effectively – all while addressing their clients’ needs at a much lower cost.

How are you training dealers to be able to do that?

Well, there are a couple of things. First, we’re taking away the complexity of the installation by putting it in the cloud. Secondly, we’ve built a library into our product, so there’s a repository of business applications that can now be easily accessed. We have 20 years of experience building out these applications so each one is built out using industry best practices.

As an example, in the office equipment industry, two high demand areas are K-12 education and small government — municipal government and county government. So, we’ve created a library of expertise in these areas that dealers can now access, which allows them to walk into these environments and show the client exactly what they will get. This is a concept that we borrowed from Salesforce.com. We bought just a few licenses of Salesforce.com when we were a very small company – we had a three-user system. But when we  purchased the licenses and began to set it up, there was already a company shaped in the system. It didn’t fit our business exactly, but it got us started immediately. And then, after we used the system for a while, we figured out what we needed and what we didn’t, and could take out pieces and add other custom items in. Before too long, we were building workflows that would automatically send out notifications to customers and adding different touches — we grew with the product over time.

Once you build something out like that, you can’t imagine doing without it, and we’d like to see people doing that more with their document management system. If we can give you something that works out of the box, it may not be exactly what you want, but you can customize your needs and grow with the product.

Do you feel that the vertical approach that a lot of the OEMs are now advocating is one of the ways to get deeper and wider into the client base?

I do. Initially, we came in horizontally, so it was AP, AR, contracts management and human resources. We’ve always centered around these key areas as a company that is “vertically non-committed” and horizontally focused on repeatable business applications. But I think there’s a lot more out there right now, and so much more emerging.

I think that we’re all looking for the next big thing. You know how in the legal industry the lawyers found the class action lawsuit against tobacco? That was the holy grail. Well, I think in our industry it was AP. Everybody latched on to AP because it was the way to improve metrics. There’s value there — you can show real ROI. You make an investment, it’s going to give you a return. And people were very satisfied with it. The lawyers are still looking for the next big class action lawsuit, whether it’s mesothelioma or whatever the case might be. My biggest fear was in many ways that a lot of the traditional applications like AP and AR were running their course. We have to find that next generation, and I think that we have started to see that already, but it’s more vertically specific.

We’ve now made it easy for the dealer to deliver the solutions and give that extra level of service — put the “value add” back in value added reseller, and be able to support those customers as well. We’re trying to figure out multiple ways to put that value back in and help the dealer to sell more. The hardest part of a solutions sale is being able to interpret the needs of the clients and the deliverables. Dealers need a good statement of work.  Training someone to write a statement of work and to really understand what those needs are is difficult. So, for each one of these vertical applications, we’ve written a statement of work, outlining specifically what the client is going to receive.

You definitely need experience to be able to write a solid statement of work for something as critical as ECM — it’s a risk management tool.

It is a risk management tool, there’s no doubt about it. We’ve learned, our noses have been bloodied over the years, and we can spare our dealers that experience. We like the fact that we can play upstream, that we can deliver the solutions and compete effectively, but at the same time I don’t want to sacrifice usability. I don’t want to be viewed as a product that is too cumbersome for dealers to work with, or too expensive for them to handle. I want our channel partners to start a conversation with our products and finish the conversation with our products. They can offer the simple solution to their clients. But if that is not what the client needs, we have the specialists who can jump in and assist.

The average dealer probably has 70 different products in their portfolio. There’s just no way the solutions salesperson who works for the dealership can be an expert on them all. Technology is changing all the time and it’s hard to keep up with. If this conversation starts with us and then they engage us, we can help them to win more opportunities.

But they have to bring you in.

We want to help and we encourage that they engage us. Every company that I’ve ever worked for before failed to have a strong pre-sales team. There was that RSM who you would call, and he was kind of your go-to point for everything. What we’ve tried to do is allow the RSM to manage the relationship, he’s out in the field, he’s working with the dealers, he’s doing trainings and strategies and launches with different dealers, and our subject matter experts are always here in the office. They are always by the phone, so when you call and you need that quote or you need that demonstration they are there to take your call and be able to help you quickly. It’s a distinct difference that we’ve created here to try to support the dealers at a higher level.

You mentioned that you now have capture. What has that changed for you? 

There are a couple things. If you look at what we created originally, our first product was a capture piece. When we were Infinet Business Systems, before Square 9 ever existed, we wrote some software called Image Accelerator, which took images coming off the copier and it could enhance them and provide some light OCR and other functionality that a scanner has. That was our first product, and then we built a content management piece onto it.

Over time, capture became more and more essential. We’re feeding data to other business applications all the time, and that data has got to be good. It’s got to be accurate, and we’ve got to be able to rely on it.  It isn’t about the image as much now as it is about the data, and that’s what it comes down to. If you look at where people are cost-justifying a lot of their ECM projects, it’s in extracting information off paper and feeding it automatically to the ERP system, the financial system, the CRM.

We were seeing the capture side of our business grow and grow … but we were relying on third party for our advanced capture. So, we thought, why don’t we build on that platform? We took a couple of years to really understand what we wanted to do and then built what we needed. It’s seen huge growth. It solves a lot of problems — the rubber really hits the road with capture.

So, the advanced capture piece is opening new doors for you?

Absolutely. We wouldn’t be playing in a lot of the projects that we’re working right now, to be honest with you. Now we can have the entire conversation with a customer, and we don’t have to talk about third-party products — our teams are well-educated on everything that we can do from start to finish. We’ve hired specialists for capture that can come in and sit down and talk with clients about solving specific problems. Last year, we added a web forms piece. That’s another piece of the puzzle. Not every business process starts with paper. It does start, though, with people entering data. What we’re trying to do is make sure that regardless of the way the information’s coming in, that we can manage it effectively and distribute the information accordingly.

What are you most excited about right now from a technology standpoint? 

I’m probably most intrigued by AI. I think everybody is. Look at the cloud, for example. Ten years ago, the cloud was the buzzword. And so, for 10 years we talked about the cloud. We’re only now seeing the adoption rates in our industry that are rivaling everything else, and it’s because we had some challenges to overcome. Technological challenges and business challenges. Aside from the previous privacy and security concerns, there are now, with GDPR, enormous challenges and responsibilities that are coming to the person who’s hosting that information. Big businesses are trying to shift that responsibility over to the service providers. They are looking for indemnification. It’s creating enormous risk and even higher insurance demands on us, the sand under our feet is shifting daily.

What excites me about AI is the opportunity to simplify. Right now, what we do is we deliver a solution, and in many cases we’re creating tools that are allowing people to train the software more easily. Many times when you buy advanced capture, it becomes untuned over time. When you first get the system, it’s working great, but then over the course of the next year, you take on 15 or 20 new customers, and now it’s no longer working with the same level of efficiency. You have to bring your vendor back in, and they’ve got to retune the system for you. AI is going to eliminate that. AI is going to not only make it easier for dealers to deliver, it’s going to learn and it’s going to automatically be able to extract the needed information and do the self tuning at the same time.

If your team were to describe you in three words or phrases, what do you think they’d say about you?

I think if you talked to my team, they’d say I’m positive. I’m always enthusiastic and I’m passionate. I like to come in and start every day excited about what we do. I’m passionate about the industry. My wife laughs at me because I’ll say, “That’s a sexy piece of software,” and she’ll say, “Now that’s just weird.”

If you were stranded on an island and you could only take one album, which one would it be?

That’s a tough question. It depends on what point in my life. At one point it was “Born to Run” by Bruce Springsteen, because that was the soundtrack of my youth. That was played in my car constantly for a long time. I think I’ve probably been through five or six copies of the album, a couple of cassette tapes, and a DVD or two.

I play a lot of blues guitar and I listen to BB King, Stevie Ray Vaughn, Eric Clapton, Muddy Waters. I have a passion for Delta Blues, but it ranges — I’m very eclectic. I’ll go from the older stuff, from back in the 40s and 50s — even the 70s — to present day. I love Albert King, BB King of course, and Freddie King is one of my favorites — all of them, the three kings.

Square 9

This article originally appeared in the July 2018 issue of The Imaging Channel.

Patricia Ames is president and senior analyst for BPO Media, which publishes The Imaging Channel and Workflow magazines. As a market analyst and industry consultant, Ames has worked for prominent consulting firms including KPMG and has more than 15 years experience in the imaging industry covering technology and business sectors. Ames has lived and worked in the United States, Southeast Asia and Europe and enjoys being a part of a global industry and community.