Jon Bach Founder and CTO of Puget Systems

(Joel Beasley at 00:00:00) Today, we are talking to Jon Bach, the founder and CTO of Puget Systems, and we discuss crafting company culture, why they are a computer company with no computers on their homepage, and Jon gives some advice to young entrepreneurs looking to break through in the startup world. All of this right here, right now on the Modern CTO podcast. Here we go. This is the Modern CTO podcast.

(Joel Beasley at 00:00:35) So I'm curious to know if your search for a Kevin, how that's been going.

(Jon Bach at 00:00:42) My search for Kevin hasn't started. It's only been one week, hasn't it? No, it was a busy week last week. I had some travel, and then, of course, after travel, you come back to just a disaster of an inbox. So no, I haven't made a lot of progress since I talked to you last.

(Joel Beasley at 00:00:57) Where were you headed? Were you out at conferences or client meetings?

(Jon Bach at 00:01:01) Yeah, I do a fair amount of industry conferences. So this particular one was for AMD, which is particularly exciting these days. I don't know if you follow that technology sector much, but AMD has been not quite as competitive for almost a decade now. And the last year, they've answered back with some competitive offerings. So it's exciting as ever to be at an event like that.

(Joel Beasley at 00:01:23) What do they do? Are they doing AI sector? Where are they really knocking it out of the park?

(Jon Bach at 00:01:28) I mean, right now they're making a comeback on just consumer processors. They had, you know, especially with the type of workstations that we make where it's time—we're selling time. We're the fastest technology wins. And up until this point, AMD wasn't able to offer an answer to Intel's top offering. They were always like a value backup. You know, if you want to pay half the price for less than half the speed, you could do that. But finally, for the first time in over a decade, they have a solution that's within just a couple percentage points of Intel in many areas. I think one more generation, they're going to be some serious competition to Intel.

(Joel Beasley at 00:02:07) What do you think happened there? You think they got better leadership or innovation?

(Jon Bach at 00:02:11) Oh, man. You know, I think no matter the size of the company, oftentimes breakthroughs come down to a small team of people, and AMD just has some really high-class people on their team right now. So I think that's a piece of it. The other piece has been as transistors get smaller and smaller—so you go back, you know, five years ago we were at like 100 nanometers and now we have Intel making chips at 14 nanometers. And Intel's having a really hard time getting it down to 10 or getting it down to 7 because just the laws of the limits of physics are starting to hit for how small they can make transistors. And so as Intel hits that limit, AMD, who's usually a few years behind them, is catching up as Intel hits that wall. So at this point, they're both making processors on a 14-nanometer transistor size. So, you know, that brings them back in the game. And, you know, the way that AMD puts it is, you know, AMD had to compete for so many years on an inferior transistor size. And so now that they're on an equal playing field, they feel like they have a pretty strong shot here.

(Joel Beasley at 00:03:11) So do you use AMD processors in your computers that you build?

(Jon Bach at 00:03:15) We do some. Yeah. I mean, boy, back when I started Puget Systems in 2000, AMD was like the majority of what we built because at that point, that was the last time they had performance leadership. We dropped AMD for a number of years just because they were too far behind, but actually picked them back up last year. We're not selling a lot of them, but there's definitely some niche cases in like rendering and simulation work for engineering where it makes sense again, and they do have a performance lead. So yeah, we're starting to sell them again. And it's exciting to have choice again back in our product.

(Joel Beasley at 00:03:47) So it's a configuration option when you're building the custom machine?

(Jon Bach at 00:03:51) Exactly. Yep. Yep. We offer a—you know, it goes the Intel route or goes the AMD route. Team Blue or Team Red.

(Joel Beasley at 00:03:58) That is awesome. So one of the most interesting things from our last conversation was the fact that you have family involved with your business. Right? That's really interesting. I'm curious for anyone else that's out there that is thinking of involving family—like, what is your take on it? What has your experience been?

(Jon Bach at 00:04:16) Well, I mean, it's really easy to get into because family—you know what they can do, and you trust them. So, you know, it was a pretty natural thing to me. I started the business and it was just me. And, you know, it's easy to turn to family for help. I think, you know, just keep open dialogue. I think where we've gotten the most hot water over time has been when things weren't said. So, you know, make sure to communicate, make sure to ask people how they're doing. We end up with family rules. We had a delayed Easter celebration yesterday because my parents were actually traveling in Australia. So we had a whole bunch of family together at Easter, and I actually broke the rule this time. I brought up a work topic, and boy, everyone jumped all over me like, you can't talk about work. This is a family event. And that's been a good rule. It's kind of like the same rule as don't look at your phone at dinner. It's don't talk about business at a family event.

(Joel Beasley at 00:05:06) So how quickly did you get family involved with the business? Was it like right away, or did it come later?

(Jon Bach at 00:05:12) It was staggered over time. My brother was the first to come on and join. He was just in high school when I started Puget Systems and was looking for some work, and I needed somebody to help put together computers. At this point, Puget Systems was just me. And so it was a lot to take orders, do support calls, build the website, and build the computers. And so he came in and helped build computers. After that, as the business got larger, my dad came in. His background is in finance and accounting. And, you know, as your business grows, you have to do finance and accounting work. So he was a great resource, you know, just starting with like taxes and that type of thing, but then it turned into all the daily bookkeeping and financial reporting type of thing. And then a lot of other family in the mix as we went along, mostly as people graduated college and entered the workforce. We snatched them up before someone else could.

(Joel Beasley at 00:06:05) Nice. It also gives like a great culture too because people like a work family. So if you have family at your work, there you go.

(Jon Bach at 00:06:12) It's funny. It's, you know, we have a lot of internal feedback and, you know, kind of health checks across our employees, and family is a really interesting word. It means a very different thing to different people, and sometimes it literally means family.

(Joel Beasley at 00:06:26) Yeah. Well, that's the environment that—that's also one of the big things that's been associated with the hype of calling your business a startup is the culture and then having more of a family. Like, we're realizing that we're humans and we're designing an environment that allows us to be the most productive, not just what we think it should be based off the past. Like, how is the culture at your company? Can you get up and go for a walk? Like, what's it like there?

(Jon Bach at 00:06:54) Yeah. Yeah. Yeah. You can go for a walk.

(Joel Beasley at 00:06:57) You're not chained to the desk?

(Jon Bach at 00:06:59) Yeah. No. I mean, the word family does come up a lot in our business when we kind of describe ourselves. But I think to most people, you know, it's not literal family. It's the fact that we're at a size and that we all know each other, that, you know, we know each other's kids' names, and we see each other outside work and kind of have that empathy for each other that if somebody calls in and says, you know, my daughter is sick and had to stay home from school, we're like, cool. You know, you stay home, take care of that. We will take care of what needs to be done here. I think that's what we enjoy as a company. That's what we're starting to bump a little bit of the limits on. We're at 42 employees now, which, you know, that's not huge by any means, but it's at a size where we have to start being a little more deliberate about that. You know, when we were 10 people, we were just like a bunch of guys in a room, and we knew everything about each other because we were locked up in a room together all day. And now, you know, now that we're a little bit bigger, you actually have to spend some deliberate time to go down and talk to people in another department that you might not see very often. We got to have a company barbecue—we finally had like a somewhat sunny day last week, and so we took the chance. We had a company barbecue. And those are always great because you get to sit down and spend, you know, even just if it's even just for an hour, get to spend it with people you don't normally spend your day with.

(Joel Beasley at 00:08:14) Yeah. So where is the company at? Why don't you have many sunny days?

(Jon Bach at 00:08:17) We're in Seattle.

(Joel Beasley at 00:08:18) Oh, yeah.

(Jon Bach at 00:08:19) Yeah. Yeah. Yeah. We had our summer now. So now it's back to rain.

(Joel Beasley at 00:08:23) Yeah. So you get one sunny day as your summer.

(Jon Bach at 00:08:26) Yeah. Well, at least so far.

(Joel Beasley at 00:08:28) This is summer day.

(Jon Bach at 00:08:29) We tend to get a summer in like July or August. But in the springtime, you have to take it when you can get it.

(Joel Beasley at 00:08:35) Now, did you move your company out there, or is that where it started?

(Jon Bach at 00:08:38) No. I was born and raised here in Seattle. The company's kind of moved around the region in like a 30-mile radius. But, no, we've always been here. Right now, we're in Auburn, which is about 10, 15 minutes south of the airport in Seattle.

(Joel Beasley at 00:08:55) And you said that you started this—you were doing everything from accounting to building the computers, every single thing involved. So what made you want to go and do this venture? Like, what sparked the interest?

(Jon Bach at 00:09:09) Well, I mean, I started it during college. It was intended originally to be like, hey, let's just build a few computers to get myself so I can make rent and then pay tuition and all of that. As I got into it though, I think I kind of quickly found my passion. And one of the things that makes me tick is when I see something happening in an industry or in any area that can be done better, I have a drive to go and do that better. And that's what I saw with computers. And boy, you know, it's even more true today than it was back in 2000 when I started Puget Systems that so many computer providers are just looking to unload hardware on you and then run. And then that's their whole idea of what the customer relationship is. It's like a transaction, a one-time transaction, and then their next mission is like, well, how can I get you to buy the next thing as quickly as possible? So the way I approached the business was that, you know, this is a tool that gets a job done for you, and it has to do that job. And it's been fun over the, you know, the last 18 years now we've been in business to really hone in on, you know, what was it—you know, sometimes when you start a new venture, you're not even quite sure, not so much like where it's going, but you haven't self-realized all of your motivations until you get into it. And over the last 18 years, I think that's kind of been our story. And so here we are in 2018, and we have up on our wall our mission statement, which is: Computers should be a pleasure to purchase and own. They should get your job done and not be a hindrance. And I think that encapsulates everything that we are. Our computers are here to get a job done. And if we don't understand your job, our computers can't get your job done. So we have to know the workflow of content creation, engineering, scientific computing. We have to understand those workflows just as much as we understand technology so that we can actually make the right technology and provide the right customer experience to back all that up.

(Joel Beasley at 00:11:11) Yeah. It was incredibly smart. So one of the things that originally attracted me to your company and to reach out and speak with you was because when I landed on your home page, right? You're a computer company, you're a custom computer company, but I don't see computers. Like, there's—

(Jon Bach at 00:11:23) No computers on the home page.

(Joel Beasley at 00:11:24) Right? Yeah. I see use cases, like, alright. If you're Photoshop content creation, you need a DAW, you need visual effects. If you're engineering, you need CAD modeling, simulations, AI machine learning, scientific computing. And then you got Twitch and gaming and streaming. I'm like, what? You buy by the use? Like, what a novel idea. Like, Best Buy, none of those sites, none of the computer stores—they all, like you said, you shop by the box, by the hardware. And this is like, I'm going to shop by the use, and then you educate what we need based on the use, and that's just—that's brilliant.

(Jon Bach at 00:11:57) Yeah. I mean, I think so much of the industry—well, you know, so there's a lot of other integrators our size in the industry, and a lot of them focus on gaming. And I think the reason for that is that in the gaming sector, a lot of the gaming guys are also tech enthusiasts that really enjoy—I mean, these are like the guys that build hot rods in their garage. Like, they want to know all those details of the engine and the transmissions and all that. And I think a lot of the hardcore gamers are like that. And so that's where you see those kinds of synergies happening. But beyond that, what we found as we ventured off into workstations in 2010, we found that actually that's not true for a lot of people that are getting a job done with a computer. Like, their passion is rendering and codecs and lighting and framing a shot and all these things. And that's where they geek out. They don't geek out with frequency and cores and gigahertz and gigabytes and those things. So why are we talking to people in our language? We want to learn their language and then go talk to them in something that matters to them.

(Joel Beasley at 00:13:01) Yeah. Like, they want to be able to say, look, my render is taking forever. How do we make it not take forever?

(Jon Bach at 00:13:05) Exactly.

(Joel Beasley at 00:13:06) Yeah. And there's frame rate lag. Why is that happening? Do I need what? And they go to search for graphics cards, and it's just like you get overwhelmed with the amount of technical specs. And you're like, just show me the one that makes it not do this.

(Jon Bach at 00:13:18) Yeah. And you shouldn't have to be a tech expert in order to do that. And frankly, who cares? I mean, whatever the solution is to get you to that faster render time, that's our job. So why are we putting it on you to have to speak our language?

(Joel Beasley at 00:13:31) Right. And it's—I love it because for me, I'm super geek. Right? But one thing I haven't gotten into ever is hardware. As far as understanding all the different components, I've always been into the code part of it.

(Joel Beasley at 00:13:47) So when it comes to things like, you know, how do I get my test to run faster? What's an optimal environment when I'm running a thousand tests? Right? Or why is my computer slow when I have my entire development suite going? So for me, it's like I'm a big geek, and I spend all my time in the area of code and writing code and business logic, but I don't have the time to go over and live in that world and understand all the hardware stuff too.

(John Bach at 00:14:18) Yeah. No. I did it. And even if you wanted to, I mean, the industry moves so quickly. You know? It takes so much time to keep up on those things. So many things are changing. And even if you were to put in all that time, your sample size—like, we have the opportunity as a system builder that we're building five, six thousand boxes a year. That's an experience that we can bring to it that an individual is just never going to get.

(Joel Beasley at 00:14:43) Have you had any issues with getting NVIDIA graphics cards? I've got some friends over there. They were talking about it.

(John Bach at 00:14:48) Yeah. Yeah. Yeah. It's been a rough time. Yeah. I mean, with the crypto mining, a few things happened at the same time. The worst of it was in February where we had crypto mining going on that was eating up all the supply of video cards. There is a memory shortage that was affecting a lot of things in industry, but especially video cards. And then Chinese New Year hit, which makes a hit on the manufacturing cycle overseas. And so all those things converge, and I've never—in eighteen years, I've never seen a shortage like that. We had to really do a lot of purchasing ahead of time to ride out that storm, and thankfully, we did. We still actually have a fair amount of video cards on our shelf from when we saw that tsunami coming. We stocked up our cellar.

(Joel Beasley at 00:15:36) Yeah. I was talking to their PR person about it right before their conferences. We were going out to their big conference that they just had. But yeah, she was telling me she's like, "Yeah. It's hilarious because we have—we've put out like tons of internal content to the company about not using company computers for mining and things like that."

(John Bach at 00:15:56) Oh, right. Yes.

(Joel Beasley at 00:15:57) I'm like, "Oh, man. I didn't even think about that." And I told her—and she said, "Oh, there's a shortage." And I'm like, "You know what? If I was NVIDIA..." Right? And they're in a lot—they're in many more businesses than I knew. I had no idea. They have these giant warehouses that like Amazon will license processing power from them, and they do stuff with all types of machine learning and car vehicle automation. And they just have these big processing warehouses I didn't even know about. But I was thinking I was like, "You know, if I'm that company, I understand business." Right? They're making them at a significantly lower cost than it is to take them to the market. Like, they might just hold on to their supply and start booting up their own mining machines.

(John Bach at 00:16:38) Yeah. Yeah. Boy, there's a time in there where that looked like that would be a smart move. I mean, who knows what happened? You know, the mining market goes up and down. It's been amazing, though. So we've been selling—you know, we sell a fair amount of rendering and simulation machines, which are basically like mining machines. A lot of these things look like the same thing from a hardware standpoint. It's just, you know, a box with a bunch of GPUs inside. And we're starting to see some of our rendering customers that they'll have a series of servers in the server room that during the day they're doing rendering. And at night, hey, might as well mine.

(Joel Beasley at 00:17:09) Yeah. There was an awesome blog post I saw. One of the video editors at like a major film studio like Lucas Films or something, some huge film studio where they have insane video rendering equipments—he was showing his mining rig. He was in after hours and showed like how much that they could mine in an hour with all of their enormous infrastructure and setup. And I was just like, "Dude, I would not make a blog post about that. You're gonna get someone very upset about that." So you started it in college. Right?

(John Bach at 00:17:47) Yep.

(Joel Beasley at 00:17:48) But what was your first interaction with technology? How did you fall in love with technology?

(John Bach at 00:17:52) Oh, yeah. Well, oh, boy. I mean, I remember getting our first family computer. It was a 286 in whatever year that would have been. I was probably in grade school. I mean, I got my first kind of hands on professional, I guess, hands on time through—it was another family company. It was my uncle's company. Here in Seattle was a company named Sudden Printing, and they had a set of, I think it was about 15 stores around the region. And it was just around the time where the printing business was going from analog into digital. And when they did that, they needed to for the first time outfit their entire fleet with computers. And I think maybe, like, a lot of IT people get their start—I was just a kid nearby who happened to know some things about computers. And so it got a little bit shoved into the role. I was like, "Great. You can do it. Go do this." And, boy, I mean, what an opportunity for me to move from tinkering with my home computer to now being in charge of 15 stores' professional computers. So it was absolutely trial by fire. I was learning as I go, and there was a lot of working through the night figuring things out, and it was actually a lot of fun. So that's where I started with hardware. At the same time, of course, they're moving to be a digital printing company. They needed a website. So they asked me, "Well, hey, you're handling our computers. Can you handle our website as well?" So I said, like a lot of IT people who even though I didn't know how to do it, I said yes. And then it quickly got into, "Okay, let's learn HTML and get that figured out." So I launched their website and ended up tying things together where you could, you know, during Christmas time, the custom calendars was a big thing for them. So I built the application to upload your photos, to upload your photo to January and February and March, and then it would push out to the store and print it out. So with those ingredients—I worked there for early four or five years doing that. And with those ingredients, then now I knew how to build a website, and I knew how to build computers. That was all the foundation I needed to start Puget Systems as a company.

(Joel Beasley at 00:19:58) That's awesome. Were there a lot of cat pictures back then?

(John Bach at 00:20:02) I don't think that was a thing yet.

(Joel Beasley at 00:20:05) So I'm curious. I see that you, Intel, board of advisors. Yep. Yeah. What is that like?

(John Bach at 00:20:11) So, I mean, that's been actually really rewarding. So what Intel does—they I think they recognize that their shirts and ties and kind of as an executive level, they're not so much in touch with what's going on at the street level, in the real world. And so they've built out these panel of companies. It's about 20 companies. We get together twice a year in person. We have a phone call, sync up every month. And the whole mission is like, what's going on at the street level and feeding that back into Intel executives. And it's actually been really rewarding. I've been amazed how seriously Intel takes that and how much that feedback matters and ends up steering things that happens within Intel. So, you know, our job is basically to be a voice for the whole system builder community. And that's been going pretty well. I've been doing that, I think, five years now, actually.

(Joel Beasley at 00:21:08) Wow. Yeah. That's really smart for them. And then that's really great. You've met some great people in that community?

(John Bach at 00:21:14) Yeah. Yeah. No. It's a tremendous networking opportunity and an opportunity to meet people within the organization of Intel as well. So that's definitely made us a stronger provider as a part of that experience. And, you know, we've taken what we've learned there and applied that to our own business as well. We've come to understand that in order to be a proper system builder of post production workstations, we need post production customers we can turn to and say, "Hey. We're thinking about doing this. Is this a good idea or a bad idea?" And they do a great job. Our customer panels do a great job feeding us insights as well.

(Joel Beasley at 00:21:52) Have they let you play with the drone swarms at all?

(John Bach at 00:21:55) No. Not the swarm. No. No. Well, they have some good exhibits where you can see the drones. And I don't know if you've seen these at CES. They're always in a big net so they can't get into too much trouble.

(Joel Beasley at 00:22:08) Oh, they'll have the swarm at the show?

(John Bach at 00:22:12) Well, they'll have some drones. You know? There's only so much of a swarm you can build at a show like that, but they'll have a 100 by 100 foot area that they've cordoned off with a net, and then they'll fly around the drones inside.

(Joel Beasley at 00:22:24) Oh, that's awesome. Are they all lit up with LEDs and stuff?

(John Bach at 00:22:27) Oh, man. It's been too long. I haven't seen the drones that you've seen at the Olympics. Those are pretty cool, and I haven't seen those in person.

(Joel Beasley at 00:22:34) No. I mean, when I saw those at the Olympics and when I saw the video footage of them, I was just blown away. There's a couple small companies around that will actually design custom drone shows to bring to different events, conferences, and stuff like that. It's really neat.

(John Bach at 00:22:50) Yeah. And it's such a good showcase of what Intel is, how they're pivoting as a company. Because right now, some of the things that are so big to them are IoT, Internet of Things, like smart devices, and 5G for connectivity. And so the drone is kind of the intersect of both of those things. Like, you're using a 5G cell network to coordinate thousands of these smart devices.

(Joel Beasley at 00:23:12) The 5G, I think that's just gonna change everything for us.

(John Bach at 00:23:15) It's looking pretty good.

(Joel Beasley at 00:23:16) Yeah. And then also, what, you got Elon Musk with his cluster? What, a constellation?

(John Bach at 00:23:22) Mhmm. Mhmm.

(Joel Beasley at 00:23:23) Oh, I can't wait till we have Internet at a rate where like it's just instant and then anywhere in the world.

(John Bach at 00:23:29) Yeah. You know, it seems crazy, but you look back 10 years ago, and what we have today is already crazy by those standards. So it's just progress continuing.

(Joel Beasley at 00:23:39) Yeah. I think that's crazy. Let's go back a 100 and 10 years, and we have electricity. It's like, wow, has the world changed. There's people alive today that didn't have AC growing up because there wasn't electricity readily available. Now that's great. So what are you really excited about right now with the growth of your company? Like, what's on the horizon for you? What's getting you up out of bed every morning?

(John Bach at 00:24:05) Oh, well, so we're entering a new phase of our company. So, you know, like I said, we make workstations for content creators, engineers, and scientists. And back when we were doing kind of general purpose computers and gaming PCs, it was less deliberate, I think, because we were just making the computers that we would be excited about and then pushing them to people that get excited in the same way that we get excited. And so I think, you know, like I said, I think you see fewer providers doing what we do because it isn't as natural to us. Like, we have to speak somebody else's language, immerse into somebody else's culture. It's just not as easy. And as we've grown as a company, we've kind of, I think, found the limits of how far we can take this with just trying harder or, you know, just devoting more time or putting in more hours. And so we're pivoting as a company to be building more processes and training processes and operating procedures and things. We're building a structure around the way that we approach going to market with these workstations. So I'm excited about that. You know, we go back two years—you have to have trainings in order to understand content creation. And if you haven't done content creation, you have to have trainings. But we started with, like, "Well, let's sit down and have somebody give us a lecture on content creation." But then we find that, "Okay. But now we've onboarded a new guy, and he wasn't here when we did that." And so everyone is kind of at their own level. So we're building out an internal, like learning system for making sure that new people that come on or people that change roles here in the company—like, we're always elevating people. We're always building up people, and we're always building up process so that we can kind of break through that ceiling and keep going to the next level instead of reinventing the wheel all the time. You know?

(Joel Beasley at 00:25:58) No. That's really smart. You're building an internal learning system for content creations and different tasks at your company so you will make the educational material and then people can consume it as they come onto the business.

(John Bach at 00:26:10) Exactly. Exactly. Because when you're building for tech enthusiasts and you're hiring tech enthusiasts, then there's just the knowledge is already there. There's no work to be done. But when you're bringing people outside of their initial comfort zone, then you have to have all this in place. In order to really nail this as a company, we have to have all this in place to make sure we've covered all of our bases.

(Joel Beasley at 00:26:32) So you're gonna have different courses, like content creation and just different topics? Or...

(John Bach at 00:26:39) Yeah. Yeah. So the way we're—well, you know, this is probably early for me to be talking about because we're still getting to nailing out the last details here, but we're hoping to launch in May. I think the phrase we're gonna use is "workflow experts." So we're gonna be training people up and being a workflow expert for simulation work or a workflow expert for machine learning. And we're using that phrase very deliberately because this isn't like we're teaching you about a product and then your job is go sell a product. It's we're teaching you about a whole community and then your job is to go exist in that community and help them. And we're gonna help them with our product. It's just we're trying to really keep that mission of our company that our computers are here as a tool to get a job done. And that job is the number one priority, not the tool.

(Joel Beasley at 00:27:29) That's so smart, man. I love that. See, that's the type of innovation that really grows companies.

(John Bach at 00:27:36) Yeah.

(Joel Beasley at 00:27:36) Yeah. No. That's smart. Yeah.

(John Bach at 00:27:38) Yeah. Thanks. Thanks. I hope so.

(Joel Beasley at 00:27:39) I wanna celebrate more. No. So you'll put the workflow in. It's gonna teach them about the culture and—it'll teach the base about the culture. It'll teach about how to engage with the community. It'll teach about where the community hangs out. And it basically just grooms them to be a member of that community. So it's not like a fake thing. It's like they're legitimately becoming—immersing themselves and becoming a part of that community.

(John Bach at 00:28:03) Yeah. And we have different levels of expectations. We expect everyone to be at a familiar level with all the different verticals we service. So everyone has to know what rendering is and what training a dataset is for machine learning, and all of those. You need to be able to have a conversation and at least understand the vocabulary.

(John Bach at 00:28:23) And so that's something we're expecting of everyone. But then we're offering these expert level courses as a way for somebody to deep dive, and most people will probably only deep dive into one place. Some maybe into two. But we also want to make sure that every department in our company—sales, service, and production—has at least one expert in each of those verticals so that we can provide that customer experience to everyone.

(Joel Beasley at 00:28:48) Now, who created the content for this?

(John Bach at 00:28:52) So, I mean, right now the primary content comes out of our labs department. We have three people in the labs. And what Puget Labs does—I mean, that's basically their whole job—is to go out into the user groups and meet these people, go out into the trade shows at our booth and have those conversations. We work directly with Adobe and Autodesk and all those other companies. We talk to their engineering teams, and boy, this is getting actually pretty exciting because now we're actually talking to their engineering teams, getting access to software before it hits public. So we can actually have a dialogue back and forth about, you know, maybe any bugs we found or inefficiencies we found.

(John Bach at 00:29:30) But that's great for us because then we can design a product before a software release even hits the public. So they do all that work, all the benchmarking, all the hardware recommendations. And all of that work that they do, we actually publish on our website. So if you go to pugetsystems.com, go to the publications menu, you'll see just—I mean, article after article after article—of all the testing that they do. But their job now is being expanded into also providing training content for the rest of the company.

(John Bach at 00:30:02) So one of the things, if we're going to launch a computer for Adobe Photoshop, let's say, we have to have all these articles publicly about hardware optimizations for Photoshop, but they have to build a training course internally for our employees as well.

(Joel Beasley at 00:30:16) Oh, man. You're designing repeatable business processes to scale your organization. I love to geek out over that stuff, man.

(John Bach at 00:30:23) Right. But that's only the first piece. I mean, because there's only so far that book smarts can take you. So it's also important to us that we participate in user groups and events like NAB or SIGGRAPH, where we go where the people are. And so we make sure we always send representatives from around the company to those events, and their job is just immerse yourself.

(Joel Beasley at 00:30:46) Oh, it's so smart. Now I actually—my friend, Bruno, his company got acquihired. That's a—that I guess we all kind of made up. I think it's real.

(Joel Beasley at 00:30:58) But they got their whole team acquihired by Adobe last week. The video team. Adobe has this project, and it's basically machine learning on top of video.

(John Bach at 00:31:08) Okay. Okay.

(Joel Beasley at 00:31:09) And he—well, he's a really cool guy. Forbes 30 Under 30, really smart developer, engineer, and CTO. And he and, I think, five other people started this company called Uhuru, and they did this intelligent video processing where they created their own stuff from the ground up. And what it could do, it could do object replacement in real time. So if you're watching a video, the billboard for you will say Nike, but I'm watching that same video and the billboard for me says Adidas.

(John Bach at 00:31:38) Nice.

(Joel Beasley at 00:31:39) But and then it also tells you about what the content is that's happening—the themes of the content—that are playing before and after video ad spots. So you could say, I want to run this video ad, but I don't want it playing before adult-themed content or something like that. And I don't want this content to be before or after the video. Because right now, when you're pushing your video out and it's just injecting in between stuff, you have no idea as an advertiser what people are seeing directly before and directly after.

(John Bach at 00:32:07) Yeah. Yeah. Oh, cool.

(Joel Beasley at 00:32:08) Yeah. So those are the things that his company did, and they were in New York City. And I've been following them because, man, they're—you know when you find smart people that are legitimately real intelligent innovators and doers, like you? Like, you know when you found yourself? No.

(Joel Beasley at 00:32:23) No. But when you find smart people like that, I always check up on them regularly. What's going on in Bruno's life? I want to see.

(John Bach at 00:32:31) Yeah. Yeah. No, I do the same. You know, make sure to follow him on Twitter, first of all. But yeah, there's people I've met a decade ago that I don't think they even know that I'm really kind of still checking them out. But it's interesting to see them grow, and you learn a lot from them too.

(Joel Beasley at 00:32:46) Yeah. It's definitely a big part of life, being able to watch your peers and other people grow and learn and experience. It's like we're all little machine learning algorithms.

(John Bach at 00:32:54) Is that product that he's developing, is that based on machine learning?

(Joel Beasley at 00:33:00) Yeah. So because it learns different objects in the video, it'll actually give you the context of a scene. So, like, you know, people are in an argument in the scene or whatever it is.

(John Bach at 00:33:12) Got it.

(Joel Beasley at 00:33:12) Yeah, I did a—yeah. But the way it was different is the current technology couldn't process it in real time. It was post-processing. But what—I don't remember exactly what it was, but it was good enough to get acquihired by Adobe.

(John Bach at 00:33:28) Yeah. It's cool to see, you know, machine learning started a few years ago as purely an academic endeavor. You know, let's see if we can actually make a machine—you know, the first one was recognize cat videos. And now, you know, we're at NAB in Vegas a few weeks ago, and we're seeing machine learning applied to live sports broadcasting.

(John Bach at 00:33:51) And it's just cool to see that this is actually—you know, machine learning is not a tool in and of itself. It's a building block that then tools are built on, and you can see that almost anywhere. You know, machine learning can be applied to probably almost any project in some way these days.

(Joel Beasley at 00:34:07) Yeah. Did you see—or I recently saw that—I just don't know how to say his name. Maybe Sundar, the CEO of Google. But he had a keynote that he gave, an update on where Google is going for 2018. And one of the things he showed was how advanced the machine learning has gotten for image recognition, and that they're actually releasing this thing where if you took a picture of your child swinging a baseball bat, you know, at home plate, and there was a mesh fence in front of it, it could actually just automatically remove the mesh fence—

(John Bach at 00:34:40) Wow.

(Joel Beasley at 00:34:41) And replace it. Because it had enough pictures of that scene in life to actually replace it.

(John Bach at 00:34:46) Yeah.

(Joel Beasley at 00:34:47) That blew my mind.

(John Bach at 00:34:48) Yeah. Yeah. Me too.

(Joel Beasley at 00:34:51) Oh, the future, man. I am so pumped. And you know what? And then I was having another talk with this awesome guy, Nir. He's called—oh, I have a great book recommendation for you too because of what you do.

(Joel Beasley at 00:35:01) His book is called "Hooked: How to Build Habit-Forming Products."

(John Bach at 00:35:05) Okay.

(Joel Beasley at 00:35:06) And basically he goes around and talks to the Facebooks, the Instagrams, the Snapchats. I mean, it's one of the best sellers. It's the number one best seller on Amazon for the designing systems or one of the categories. But he talks about the different steps that are involved in creating products or technologies that are addictive, essentially. Ones that get inside of your habits, how do they hack your habits, and how do they hack the culture around it. And it's a quick read. It's a very smart book. But, man, the insights I took away from that—it's basically him studying all the different large companies that have the most users and figuring out why the users keep coming back. And it's not the best technology. Right? It's not the most innovative, but they all have this common trend that they follow. And it's the systems of how they interact with their users—how the technology interacts with them, with giving them rewards and incentives and things like that. And it's, man, I'll tell you what, as a business owner reading that book, it's just very valuable.

(John Bach at 00:36:06) That's funny. That's actually super opportune. I'll have to check that out. My—the town I live in just got Chick-fil-A. Do you have a Chick-fil-A where you are?

(Joel Beasley at 00:36:16) Oh, yeah.

(John Bach at 00:36:16) Okay. So this was our first experience with it. And so it goes in and there's lines around the block and, you know, parking lot chaos and things going on. So we go in to check it out. It's okay, but, you know, it's fast food chicken.

(John Bach at 00:36:32) And so my wife and I were asking each other, like, so what makes, you know, what makes Chick-fil-A do this? You know, there it's—it's more than the chicken, you know, because the chicken's not that good. It's not that good to make people go around the block for. And so, you know, what cultural phenomenon? At some point, there's this tipping point where it becomes a cultural phenomenon that drives that type of behavior.

(John Bach at 00:36:55) So this is opportune. I think it's probably kind of hooking into the same topics.

(Joel Beasley at 00:37:00) Oh, yeah. And, man, they're—ever—have you seen their—well, see, I grew up—Chick-fil-A is native to where I am.

(John Bach at 00:37:06) Okay. Okay.

(Joel Beasley at 00:37:07) So I think their headquarters is in Atlanta.

(John Bach at 00:37:10) It's like—

(Joel Beasley at 00:37:11) It's—you know, I'm in—I'm down in the middle of Florida, but there's Chick-fil-A's everywhere.

(John Bach at 00:37:16) That's where I am. No. This is our first. So this is all new here.

(Joel Beasley at 00:37:20) They have this amazing advertising campaign where it's cows that are constantly holding signs that say "Eat More Chicken."

(John Bach at 00:37:27) Nice. Yeah. That's awesome.

(Joel Beasley at 00:37:29) And they do different things with the cows, and everybody loves the cows. That's one of the big culture things. It's like you always are excited to see what—

(John Bach at 00:37:38) Save the cows.

(Joel Beasley at 00:37:39) What the cow is doing. Yeah. There's the billboard on our major highway—most recently that I can remember—is they're cows, but they're hanging off the billboard. So they're three-dimensional, you know, manufactured cows.

(Joel Beasley at 00:37:53) And they're holding a paint bucket that says "Eat More Chicken," as if they defaced the billboard.

(John Bach at 00:37:58) Right. Right. That's awesome.

(Joel Beasley at 00:38:00) Yeah. It's just really creative. And then they're hyper-involved with the community. So you'll notice that they bring free Chick-fil-A to all the community events. They'll always—you know, they're very involved in philanthropy, and they're just everywhere.

(John Bach at 00:38:18) Yeah. Yeah. So you end up with people rooting for you as a company then.

(Joel Beasley at 00:38:23) That's what it is. It's like—I don't eat fast food anymore personally because my wife and I just decided to kind of not do that anymore about a year or two ago. But when we did, that was the—here, that's the classy fast food.

(John Bach at 00:38:39) Right. Right. That's the socially acceptable fast food.

(Joel Beasley at 00:38:42) That is the socially acceptable fast food. Yeah.

(John Bach at 00:38:44) Chick-fil-A. Got it. Yeah.

(Joel Beasley at 00:38:46) Awesome. Man, so I've got two more questions here to wrap up.

(John Bach at 00:38:51) Okay. Yeah.

(Joel Beasley at 00:38:52) So young entrepreneurs will look up to you, right, because of what you've been able to do. You said earlier 40 people isn't a lot. I think it's tremendous. I think you've built an unbelievable business. But for the entrepreneurs who are just getting started, and they have an idea, and they're building, and they're hacking away like you did early on in your career, what advice would you give them?

(John Bach at 00:39:12) Oh, man. I mean, it's hard to say. It's hard not to be cliche because I've actually heard—I've heard some cliche. Yeah. Okay.

(John Bach at 00:39:19) So I mean, the cliche I'll say is follow your passion. You know, that's what a lot of people say. But I've actually heard a lot of backlash to this lately too of, like, "What do you mean follow your passion? You actually have to pay the bills. Don't send people down this road."

(John Bach at 00:39:30) But I think if you see a problem that needs to be solved and that's something that you could get out of bed every morning and see yourself attacking that problem, then go do it. And you don't have to—I see so many startups—they're more concerned about designing their T-shirts and their hats than they are writing their code. You know, solve the problem first.

(John Bach at 00:39:55) And, you know, if that means that you need to go get a job at Chick-fil-A for a while to have that time to write your code, then do it. I really appreciate the way that we've grown our company where I started—I started the company while I was still working at the printing company. So I had the time to take a breath and, you know, take one step after the other and solve one problem, then move on and solve another problem. And, yeah, I think I just really appreciate that approach of—I think if you try to, you know, you take on investors and you try to grow things overnight and you go really fast, I think you just have that much stronger chance of the business needs outweighing the business mission. You know what I mean?

(John Bach at 00:40:42) Where you kind of lose touch with, like, what was it I was trying to do in the first place? And so don't lose that. Make sure that's what you build your business around, and then make sure that you stay within the confines that you're able to get out of bed every morning and that's your first thought.

(Joel Beasley at 00:41:00) Bringing that value to the market and solving that problem. Yeah. Yeah. Not your investor report update. No.

(Joel Beasley at 00:41:07) No. I agree with you though with the follow your passion stuff. I think things tend to be a cliche because they're very true, and people say them over and over because they're true. But they also get misinterpreted, and then there's also people who, you know, they just—they see the world through their current state and they're unhappy. Right?

(Joel Beasley at 00:41:23) I was reading the other day, like, 85% of people aren't working towards a specific goal. So it's like, you probably don't want to take advice from those people. But for every person that says, you know, "Oh, don't tell people follow your passion because they've got bills to pay," then you look at the person who has a blog about honey, their favorite, and they're making six figures a year.

(Joel Beasley at 00:41:44) Or a person who's got a blog about the favorite places to eat, and all they do is go around—eat places for free. It's just—anything you want to do in life, you just apply a little creativity, a little persistence, and make sure that you have some passion around it, and you can find a way to make money.

(John Bach at 00:42:00) Well, and I think too, maybe it's two pieces. So follow your passion, but have a plan. Because I think a lot of people don't, you know, maybe they're not honest with themselves or maybe they don't take the time to even look, but you have to make sure that there is actually a need to be solved here. And you have to be careful to not get so far into the weeds that you can't really see reality anymore. So, you know, have those people that'll hold you accountable, whether it's your customers themselves or people that are kind of outside your normal circles that can look at you and tell you, like, actually, what you're doing right now is kind of crazy.

(John Bach at 00:42:33) Because I think some people will follow their passion, but it's not grounded in any sort of reality of what actual needs there are out there.

(Joel Beasley at 00:42:44) Yeah. Because at the end of the day, a business exists. The reason why we hand money, you know, Puget Systems is because you're bringing me a value. You understand the way I think and my needs for whether it's rendering or whatever it may be. And so because I don't have to think and you have the product, you solve the need, and you have value, then I exchange money.

(Joel Beasley at 00:43:03) And that's how all business works. You bring value to the market. You know? Right, John? You bring the value.

(Joel Beasley at 00:43:08) And then I give you money in exchange for your value. And then if enough people do that, you have a business, and then the market says, yes, we like what you're doing. It's really democratized.

(Joel Beasley at 00:43:18) We're all raising our hand and saying, yep, we want that to exist.

(John Bach at 00:43:21) Voting with our dollars.

(Joel Beasley at 00:43:23) We are voting with our dollars. And based on your growth, people, the market loves what you're doing, John.

(John Bach at 00:43:29) Oh, thanks.

(Joel Beasley at 00:43:30) So if people want to find out more about you, how would they do that?

(John Bach at 00:43:33) Our website is where everything is. So pugetsystems.com. Boy, there's a video on our homepage that gives you the quick rundown of what we're all about. But like you said, it's very much about the use case. So if you need to do visual effects work for a short film you're doing, you just go right into our content creation, post-production, visual effects section and immerse yourself.

(John Bach at 00:43:58) You could go straight to, you know, the products that we recommend. Or if you want to get into the weeds, boy, we have article after article you could read to kind of serve as a proof point for the work that we do.

(Joel Beasley at 00:44:10) I love it, man. I love what you're doing. Anything we can do here to support you, you just let me know.

(John Bach at 00:44:15) Oh, thanks. I appreciate that.

(Joel Beasley at 00:44:21) Thank you so much for listening to the Modern CTO Podcast. Share this. Get the word out. Thank you guys so much. I couldn't do it without you.

(Joel Beasley at 00:44:27) I appreciate it. You guys are the absolute best.