[This interview first appeared on NoJitter on July 16, 2015]
Dr. Don Brown, CEO of Interactive Intelligence, is a serial entrepreneur with a history of success. His first software company caught the attention of EDS four years after its launch, and his second company, Software Artistry, grabbed IBM’s notice in just seven years. Next came Interactive, which he founded in 1994 and took public in 1999. Today Interactive’s contact center and UC products are in use at more than 6,000 companies.
Like his previous companies, Interactive is based in Indiana, where Don has lived since the ’60s. The company has more than 2,000 employees today.
He balances his workday between his corporate and student roles, then presumably enjoys a quiet time at home… with his eight kids, ages 17 to 30. That’s a full load, but I don’t think Don sees it that way. He tends to look at things differently. That might explain why he enjoys rock climbing and is an instrumented-rated pilot even though he’s afraid of heights.
Tell me, how does a doctor of medicine end up founding and running several technology companies?
I actually enrolled in med school as part of an M.D./Ph.D. program intended to churn out medical researchers. I thought I’d end up in a lab someplace. I started off working on a doctorate in biochemistry but really didn’t enjoy the laboratory part of it. So I switched to the then-new field of computer science where I fell in love with programming. After earning my master’s in CS, I started a little software company with a buddy while finishing up my last two years of med school. After graduation, I started working full time in software and never looked back.
Looking back to when you founded Interactive, which part of your plans did you get right and what did you get totally wrong?
Interactive was my third company, so I applied what I had learned from my many previous mistakes. The first thing we did right was to set out a clear goal — develop a software-based communications system. I personally was able to fund the company until its IPO in 1999, which meant that we never had to take venture capital. As a result, I’m still the largest shareholder 20 years later, and we have an unusual concentration of internal ownership, which gives us a great deal of freedom despite being a public company.
Our biggest mistake was growing too rapidly before the dot.com crash and then having to work through a couple of painful rounds of layoffs.
In terms of our business plan, we were pretty much spot on. You can always do things better though. In hindsight, I wish we had designed for large organizations from the beginning. We originally intended our product as an all-in-one communications device for small and mid-sized organizations. However, we were quickly pulled into large opportunities and had to grow our way up, which was somewhat painful.
Interactive has gone through several phases, from VoIP to UC to cloud. What’s next?
One trend we’re excited about is the use of collaboration technologies in customer service. Customers increasingly expect to be able to use video, screen sharing, document sharing, and other collaborative tools when they receive service from a vendor.
Beyond that, I think the next big period is going to involve harnessing [artificial intelligence] (AI) to both become a more intelligent organization as well as to offer more powerful products and services. AI is like a freight train barreling down the tracks. I first worked in AI back in grad school in the ’80s. There was initial disillusionment as it failed to yield the grandiose benefits predicted. But steady advances in both hardware and software have brought us to the precipice of amazing capabilities that will also play important roles in internal collaboration as well as in interactions with customers.
Can you expand on that? How and when might AI begin to affect customer service, UC, and/or your portfolio?
It already has. A few years ago we introduced real-time speech analytics, which I first studied back in grad school. However, machine learning (ML) has evolved to the point that it’s ripe for incorporation into all sorts of business applications. It’s particularly easy to use AI for correlation and regression in cases where you can quantify an outcome.
For example, we’re looking at ways to utilize machine learning to affect routing decisions for service interactions. You feed the ML engine all the attributes you have regarding the customer (e.g., ZIP code, product type, length of relationship, age, gender) and those you have regarding your agents (e.g., level of schooling, hometown, birthdate). Finally, you quantify the outcome of each interaction using whatever metric you like — customer satisfaction, up-sale amount, etc. From there it’s pretty simple to have the engine “learn” what combination of customers and agents yields the best outcome. You can do the same thing for outbound customer interactions.
Over time, we’ll use AI to spot patterns and automatically generate alerts about outliers — think of an agent who interrupts too much.
Interactive recently began describing its “C3 vision,” with the Cs referring to collaboration, communications, and customer engagement. Does this represent a shift or change in strategy?
To some extent, it’s getting back to our roots. As I mentioned, we started off with the goal of creating an all-in-one communications platform. We had to narrow our focus to customer service along the way, partly because the underlying technologies weren’t ready and partly as a result of our own success in corporate contact centers. When we set out to do it all over again from scratch with the design of our PureCloud platform, we decided the time was right to swing for the fences and create a unified vision for all of collaboration, communications, and customer engagement.
As a premises-based vendor, Interactive was early to adapt to the cloud, introducing your contact center communications as a service, CaaS, back in 2007. How confident were you that the market was going to shift that way?
It was obvious to me even back in 2007 that software was going to move to the cloud. Salesforce had proven the model, and other companies were starting to be successful. Some people felt that business communications and customer service were somehow different and would remain on premises, but I didn’t buy that. The only questions for us were how long the shift would take and what the ultimate ratio of cloud-to-prem would be.
Even today there are lots of organizations that won’t entrust their core communications or their customer service operations to the cloud. Not too long ago I remember Gartner saying that only 20% of organizations would move customer service to the cloud. Now it’s looking like more than 50%. However, many large companies prefer owning and operating a premises-based solution for customer service, which is why we continue to invest in that part of our product line.
A major component of the high-end contact center promise is customer satisfaction. Do you think your own company provides exemplary customer service or is it more of a cobbler’s children situation?
We’re definitely in the transition from the cobbler’s children situation to more of a focus on world-class customer service. This is partly due to the fact that for years we mostly sold through resellers. So our focus was on helping them offer exemplary service through training, diagnostics, and other means. Doing more business through the cloud has shifted our model toward more direct sales, so we’ve been making a far greater investment in using our own technology to lead by example in terms of the service we provide. We’ve made good progress, but have a long ways to go.
So you have a premises-based solution, a cloud-based solution, strong financials, and recognition by Gartner as being in the “Leaders” quadrant in contact center infrastructure — why did you feel it was necessary to start over again with PureCloud?
To paraphrase [hockey legend] Wayne Gretzky, we try to skate to where the puck will be, not where it is. Three years ago we forced ourselves to take a hard look at the future at a time when our initial foray into the cloud was going like gangbusters. We saw that we would be at risk of being outflanked by newer, smaller companies that were leveraging modern distributed cloud technologies like [Amazon Web Services] (AWS). So we swallowed hard and decided to fund a separate development team to start over from scratch, taking what we had learned over the last 20 years but redoing it on the latest architectures using the latest tools. It was a huge gamble, but the result is PureCloud.
Is PureCloud intended to be primarily a collaboration play or a contact center play?
The way we see the world, there’s going to be a blending of the two. Within a couple of years, any contact center offering that doesn’t offer deep collaboration capabilities will have a hard road. As I mentioned previously, we believe customer service is going to become customer collaboration in many settings. So we decided to build those collaboration capabilities — video, screen sharing, co-browsing, document sharing — right into the foundation of PureCloud. If we end up just using those capabilities in the contact center, we hit a solo home run. If they bleed out into the broader enterprise, it’s a grand slam.
Have you rolled out PureCloud Collaborate companywide at Interactive? How do you know if it is useful?
Yes, we’ve been using Collaborate and its predecessors for well over a year. As a fast-growing, 2,200-person technology company with offices around the world, we think we’re a great test bed for collaboration technologies. We badly needed a way to keep track of our people, their skills, their locations, and their places within the organization. We also needed to make it easy for them to interact across devices by voice, video, instant messaging, chat rooms — you name it. And we didn’t want to have to assemble a patchwork quilt of technology in order to make that happen. We find Collaborate to be a lifesaver, and are rapidly iterating to make it better.
For us, there’s a double win in adding useful new features to Collaborate — we become a more effective organization, and we end up with an even stronger product offering. It becomes a triple win if those features apply in the contact center as well.
Today the PureCloud portfolio comprises Collaborate, Communicate, and Engage. Will more PureCloud services emerge?
Absolutely. The next one in the pipeline is a workflow service, called Automate, that ties them all together. Automate allows an organization to automate key business processes that combine telephony, messaging, documents, and customer interactions. We hope to release it early next year. Beyond that, there are several more in the hopper.
How does PureCloud fit into your current channel strategy, and do you expect most PureCloud sales to be direct with touch, direct via self-service, or through indirect channels?
We may be delusional, but we think we can handle all three. I was very impressed in talking to the CEO of Zendesk a few years ago; I thought he took the right approach at Zendesk in crafting a cloud service that was so easy to deploy that customers could sign up and do it themselves. With PureCloud, we’ve been fanatical about making it possible for customers with relatively modest needs to sign up and deploy the service themselves within a matter of hours.
However, we also understand the needs of large, complex organizations. So we also built in various pathways for structured customization and deep integration with other systems and applications. In this way, we hope to make it attractive for channel partners to sell differentiated services and to apply their own skills in integrating PureCloud into customer environments.
Your decision to build PureCloud on AWS is intriguing. I get that speed to market and low capital investment is attractive, but do the costs and performance of AWS make this economically viable over time?
We think so. We’ve come to realize that running a data center is hard work. Amazon is better at it than we could possibly ever be — perhaps better than just about any company could ever be. So we decided to let it do what it is good at and focus on what we’re good at — building great business applications. The price/performance of AWS is amazing and getting better all the time. I was worried initially about the cost, but it has turned out to be much less than building and running our own data center infrastructure (see related post, Why Amazon Web Services for PureCloud?).
It’s an exciting time for Interactive as its founder launches the company on a whole new chapter that expands its portfolio with a born-for-the-cloud new architecture. There’s much more to PureCloud than just another hosted service. I would like to thank Don for his time and frank responses.