Russ: This is a BusinessMakers WebXtra. A continuation of the interview with Doug Erwin, Chairman and CEO of The Planet. Well, the Hurricane Ike performance. You must have been proud of that. In fact, it brings back up again this whole culture, this Dallas/Houston thing. It seemed like it worked flawlessly during Hurricane Ike, but it makes me wonder a bit more. Was there a specific moment, a specific incident, that occurred that you felt like, "Hey, we're over that problem, and we're all one family. We're all one big team"?
Doug: You know, that's a great question, Russ. Being a father of four boys and raising children and running a business, there is a lot of similarity. You work hard and you don't know whether or not you're getting through, and then, all of a sudden, one day, you see all of the work that you and your wife put towards the boys. All of a sudden, you see that it was, "Ah. They got it. They got the message, and everything's okay." It's very similar with a business. I tell you, I struggled for a year. I tried every tool, every trick that I had in the last 35 years of learning in the business world to try to figure out how to bring together two cities, two companies. And there was a defining moment, and the defining moment-You never really know until it happens. Unfortunately, it was the highlight of my career so far with the company and the lowlight.
Russ: Okay. This sounds interesting.
Doug: And it was Saturday afternoon at 4:55, I think it was. As I was walking out the backdoor with my wife to go to a movie, my phone rings, and I get a call from my wife's president of data centers, and he says, "Doug, there's been an explosion at one of our data centers." Those are two words-explosion and data center-you don't want in the same sentence.
Russ: Right. Right.
Doug: So, I said to my wife, "Well, you go on to the movie, and I'll catch up with you later." And I guess it was four days later that I saw her, but what happened was we had an electrical shortage that caused a massive amount of damage to our electrical room in one of our data centers. Luckily, nobody was hurt and no customer material was destroyed. It was purely mechanical, but what happened Russ is that this was at 5:00 on a Saturday afternoon, and by 6:30 that same day, I was in the office, and the place was packed.
Russ: Wow!
Doug: Everybody was at work, and by 7:00 Sunday morning, I couldn't tell whether this was Dallas or Houston. People got in their car and drove down from Dallas, and they were all over. We had HR and Marketing in the Call Center taking all the floods of calls that were coming in, and they couldn't help them from a technical standpoint, but their purpose of being there was just to inform them what was happening on a minute-by-minute basis as we were trying to rebuild and get our customers back online. We had 9000 servers go down, representing 7000 customers, that were offline were twenty-two hours. Now, that might not sound like a long time, but it was twenty-two hours of pure terror as we're trying to figure out how do we get these people back up. And I'll tell you, this is where you come with great people that you just thank the Lord that we have those kind of people, but in twenty-two hours, my facilities organization rebuilt this electrical room in the parking lot of our building with begged, borrowed, and, probably, not borrowed equipment.
Russ: Okay.
Doug: Showed up and we had our customers back up and running.
Russ: Wow!
Doug: That, to me, was just the highlight of seeing the culture that we've tried to build where we talk about customer-driven and passion and own a problem. I mean, my God, here-We had Sales guys backing their cars up to the data center with the trunks open as they loaded servers and drove them down to across the street to another data center so we could get customers back up and running. We had Accounting guys, who used to be DBAs, working with servers in the data center, rebooting servers to get them back up. I mean, it was a team. It was 550 people who were focused on getting our customers back up and running. I couldn't have been prouder.
Russ: Wow! You must have had customers contacting or calling you or-
Doug: Oh my gosh! Yes. The boards lit up for phones. The Internet lit up, but what we did to try to alleviate some of that was every thirty minutes, I put a voice message out on the Internet or a written document out on the Internet as to what had happened in the last twenty-nine minutes. And we did that through the first almost forty-eight hours. We formed a war room upstairs where we had people manning that, taking calls, and our customers responded unbelievably positive. We had a few crackpots that it was a conspiracy and that aliens were coming down and-You know, it was bizarre.
Russ: Yeah.
Doug: But you know you're going to get that.
Russ: Sure.
Doug: But we had to pay a penalty because we-
Russ: Right.
Doug: -promised certain levels of service, and we had a number of customers send the checks back saying, "Keep it. You need it."
Russ: Wow!
Doug: We expected to lose quite a few customers from that, and there were some that left, but the number was not nearly as large as we had anticipated. It was to making lemonade out of lemons.
Russ: Yeah.
Doug: It was unbelievable. I was so proud of my folks.
Russ: And so that was when you felt like you had crossed this culture division. It was over after that.
Doug: We had crossed the chasm. Yes.
Russ: Wow!
Doug: If you walk out of here and talk to people and ask them what they feel and how they feel about it, you will hear the word "passion." You will hear the word "customer-driven." I guarantee you, and you'll see a smile on their face. What more could you want?
Russ: Cool! Well, I have walked around here quite a bit, and I will say that that is true. I've also noticed this flintstone keeps popping up a little bit here and there. What's that all about, Doug?
Doug: Fred Flintstone was a cartoon character who drove a car and had no engine, and the way he made the car go was with his feet.
Russ: Right.
Doug: And he would say "Yabba dabba doo" and his car would take off. You know, it was something I just adopted in talking to the management team one day in trying to tell them what I was looking for. And this was one of my first days here. I told them the story that I want people running to work. I want to create an environment where people feel empowered to make decisions to move this ball forward. I am not the brightest light bulb in the bunch or the sharpest knife in the drawer. I can make ten to fifteen decisions a day. The reason we have come as far as we have in two and a half years is not because of me, but because of the people who took it upon themselves to make ten or fifteen decisions a day. Now, I'm not preaching anarchy in the streets and power to the people and go do whatever you want.
Doug: What I'm talking about, though, is empowering people to take a look at a business problem and say, "This is an issue. Here's how I'm going to solve it." And either get their manager on board with it or go do it and pray for forgiveness after. When you do that, you create an environment. You need to know that nine or ten decisions are going to be great. Then, there's going to be one or two that are bad, and you're going to have to deal with this. But the Fred Flintstone theory was this. When my managers or employees get out of bed in the morning, and they swing their feet over and their feet hit the floor, I told them that I want their feet to start going in a fast pattern like Fred Flintstone. I told them they didn't have to say "Yabba dabba doo," but they had to think it, and so, as a joke, as a Christmas gift, I gave everybody a carving of the Fred Flintstone car. But it's part of the culture here is that "Let's get it done. Let's make a decision and move forward."
Russ: Cool. Great story. Well, tell us. What's the long-term vision for The Planet? I mean, this is a humming, large company that seems to have an appetite to get bigger. Is there some sort of preferred exit strategy in mind?
Doug: Yeah. Well, that's a great question. You know, when my investors recruited me to come run the company, I asked them two questions. Really one question, and that was "Do they want me to clean this think up and prepare to sell it or do you want me to really build a business that can do an IPO?" And their response was the latter.
Russ: Okay.
Doug: And I told them, "Right answer," because that is the right answer. If you want to build value in a company, you need to build a long-term strategy in value. And that means you are building to go public. So, whether we go public or not, it will be seen. The market, you know, needs to, of course, clean up, but we are planning for the long-term. Our international expansion. Our new data center. Our whole concept of filling out our product line from being just a hosting company to one that now can now offer anything that people want in IT infrastructure. All of that is part of the strategy of building a long-term vision of where this company could go. And so, to answer your question shortly, we are preparing to go public. Whether we end up getting there, whether we end up being bought by somebody, I really don't care. We're building a strategy to add value to our stockholders.
Russ: Okay. Speaking of market conditions, are you seeing an impact from sales from the tough, tough economy that we're in. Are you losing any customers?
Doug: I don't think we're seeing as big an impact as a lot of other people in different industries and some of our smaller competitors. But, yes, it's slowing down. But what we are seeing, Russ, is we're seeing that we're getting more business customers coming to us and less hobbyists. You know, in the web business, hosting websites, there's lots of guys who are hobbyists who are gamers at night and who might not want to spend the money in these tough times.
Russ: Right.
Doug: But what we are seeing is an incredible amount of more small-medium-sized businesses who are looking to cut costs and cut their IT operations because I can save them 75% of what they spend internally by coming and doing it with me, and at the same time, I'm giving them N+1 redundancy, SAS 70 compliant data centers, redundant networks. Much better than they can build themselves. So, I don't to want to say I'm glad to see the market the way it is, but in the long run, this is going to be good for our business.
Russ: Well, before I let you go, I've got to ask you this question. You mentioned lots of small-medium-sized businesses that see the value here. Obviously, your customers include lots of those types of businesses and startup innovators. So, let's say there's an aspiring entrepreneur that's been listening to what you have to say. What advise would you give this person?
Doug: I think I would say four things to them. The first is I see so many young entrepreneurs trying to build a better mousetrap. We've got mousetraps. What they need to build is some thing that is of value, not because it's pretty to them and it's their baby, but that adds true value to their customer. There needs to be a market need for it. The second thing I would tell you is you must surround yourself with people who are going to have the same drive, the same work ethic, and people that you want to be around because you're going to spend more time with them then you are your family. So, hiring people is absolutely critical. The third thing I would tell them is, just like I told my sons when they went off to run their own household and get married, is the last thing you want to worry about is money problems. There are so many challenges in a young man's life, a young woman's life, you don't want to worry about money. There are so many challenges in a new startup business, you don't want to worry about money. So, understanding how their going to be capitalized, understanding when they need to go out and get money, understanding how much they need to go get, because they don't need to worry about money. That is one thing you should not be worried about. And the last thing that I would recommend to, and plead to, entrepreneurs is businesses go through cycles. It's a shame to see a great company go to a point where, because the founder and entrepreneur refuses to let go, the business dies, and there are very few guys who are true entrepreneurs that can take it all the way through the growth stage. You look at some of the big, great successes. Michael Dell did that. You know, Bill Gates did that. You know-
Russ: Fred Smith did that.
Doug: Fred Smith did that, but take a look at the Google.
Russ: Right.
Doug: They got it to a point, and they brought in a professional, and it is a sad thing to see a great company. And sometimes, because of ego, they hold on too long, and the business loses value.
Russ: So, be ready to hand over the reins. Right?
Doug: Just don't let your arrogance and your ego get in your way.
Russ: Cool. Great advice. Doug, I really appreciate you sharing your story with us.
Doug: It's been a pleasure, Russ. I love talking about The Planet, and as you probably can tell, I can talk forever. It is something I'm very passionate about, and it is something that is exciting to see grow and to see the people grow.
Russ: Well, yabba dabba doo.
Doug: Yeah.
Russ: We've been talking with Doug Erwin, Chairman and CEO of The Planet, and that wraps up this BusinessMakers WebXtra. You've been listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com.
