Russ: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. It's guest time on the show, and I'm very pleased to have with me cofounder and executive vice president of iOffice, Elizabeth Dukes. Elizabeth, welcome to the BusinessMakers Show.

Elizabeth: Thank you, Russ. Glad to be here.

Russ: You bet. Well, let's start by you telling us about iOffice.

Elizabeth: iOffice is a company that is focused on providing smarter solutions for managing facilities. Basically, we have three offerings. One is an integrated workplace management service application. It's in simplest terms, a Web-based tool that allows you to manage corporate services inside of an organization.

Russ: Such as what?

Elizabeth: Like the mailroom or space utilization, how people move, add, and change, and move around your environment, how you take care of the facility. It's hot. It's cold. So anything that you as an employee of the company may need in order to conduct business. So it helps manage all those services that support an employee in their office space.

Russ: Okay, cool.

Elizabeth: We also provide relocation management services. We help companies manage large project moves when they're moving either from Building A to Building B, or doing a large restack where they're moving a lot of equipment and people around in their organization. Usually companies are doing this to be more efficient and there's a strategic reason for doing it. We also focus heavily in specified industries like health care, moving labs or a university moving physics labs, et cetera.

The last component of our business, not the least, but the third - or the newest, would be our sustainability group. We provide consulting on LEED certification for existing buildings and new buildings.

Russ: That's at L-E-E-D, right?

Elizabeth: E-E-D. It's leadership and energy and environmental design. And we are also providing a component to our software application to allow companies to be able to track and maintain certification on an ongoing basis. One of the biggest obstacles for companies is they'll achieve platinum, gold, or silver certification, but they have to recertify in five years, so they have to be able to maintain all this information about how they're doing. So our application, a new component we'll be able to track that so it's gonna be as easy as just submitting the report.

Russ: My goodness. You make it sound complicating to own and operate your own facility. I guess that's just the way it is, right?

Elizabeth: Well, it is a lot more complicated than most people think. My husband always laughs. He's like, "I still don't understand what you do." But there's a lot goes on to making an employee sitting at their desk useful and productive. So they have to be sitting in the right space and somebody's gotta be able to find you, mailroom, or the switchboard, and service you when you have a problem. Your lights are out or your furniture's broken, things like that.

Russ: Okay, wow. So how old is the company?

Elizabeth: We're ten years old.

Russ: My goodness. And I gotta tell you when I walked into this place, I was impressed with the workstations, the number of those, and the activity. So ten years. So I assume that means everything's going quite well?

Elizabeth: It's going very well. We've grown very rapidly. We have about 900 customers in the United States, the UK, Canada, and a smattering across the globe. We're continuing to increase that. One of our largest customers is Ricoh, out of Japan. They use our software platform as a platform for providing on-site managed services in the more copy/mail area. And we're -

Russ: Are they the only customer you have in Japan?

Elizabeth: Currently, they're the only customer in Japan.

Russ: Were they affected at all by the earthquakes and tsunami?

Elizabeth: Actually, the week that it occurred, we had a gentleman in from Japan visiting us doing a training class with us. It was during the rodeo. His favorite thing was when we took him to the rodeo. But he was personally not - well, he was. Everybody in Japan was affected. But he personally, was not. And all of our contacts in Tokyo seem to be doing okay.

Russ: Okay.

Elizabeth: Yeah.

Russ: And from what I understand, you head up marketing, sort of sales and marketing. Is that right?

Elizabeth: Well, it's kind of a team effort here. Everybody does everything a little bit, just 'cause we're a small company. My background is sales, so I sold office and facility and services on an outsource basis. So I do that, but I also do a lot of implementations. I work with customers on what their processes are, help them get the software configured to meet their needs, that type of thing.

Russ: Well, I mean, I'm curious about the sales and marketing 'cause it sounds like you've been very successful at capturing customers. Do you have a direct sales force?

Elizabeth: Well, no. We have channel partners, and that was - because we're a small company, we needed people on the streets and we needed people that had names that were industry-friendly, that were recognizable. So one of our first customers was IKON who is now owned by Ricoh. So we established a relationship with them and they helped distribute our product for us on a national basis. We have increased our business in our local marketplace a great deal, also, because now we have name recognition and now we have a lot of experience and there's word of mouth and things like that.

We're heavily working right now on our own marketing. It was sort of our strategy not to spend a lot of time marketing until we really had something to offer people and could demonstrate experience and knowledge. So in the past year, we've really focused on that by enhancing our website. We're working on a pretty intensive social media campaign working with Pierpont Communications on that, as well as PR.

Russ: Really cool. Well, I'm real curious. I mean, this is - to me, it's a unique business. I'm sure you have competitors. But what brought it together? What was the idea trigger to, "Hey, let's build a company offering these services"?

Elizabeth: Actually, it was my other partner - there's three of us. He's the more technical of the three. And he was -

Russ: What's his name?

Elizabeth: Don Traweek. Yeah, I guess I can share his name. It's not a secret. We were working and doing some consulting work for a company and some of the ideas that we had related to our former business. There was no technology in the marketplace that addressed specifically office and facility services in a single portal, and specifically nothing that was on the Web. We introduced our technology right when the Web became an accept - well, it was becoming is a better word, acceptable business platform. So the idea was it's easier to manage multiple facilities and get real-time data when you can manipulate the information over the Web.

So it was really our customers and our experience delivering services to them. So we came up with a prototype and actually implemented it at a couple of our former customers that we had shared in the past. And then we had this great idea, but we really weren't sure - I mean, how do you make a business. I don't know? I mean, we can talk about the product. So we made a presentation at our local incubator for technology. It was a mentor breakfast, and so we made a presentation about what we did and what we were trying to accomplish, and met our third partner, Dan Sudduth, who was the first person that when we made a presentation, immediately came up and said, "I understand what you do, and I think I can help you." So we were like, "Well, we've done one thing right. We've explained it to somebody who can understand what we do." Yeah.

Russ: And so and Dan is the third of the cofounder group.

Elizabeth: Third partner, correct.

Russ: Right. Well, we're gonna talk to Dan after this. Well, I really appreciate you sharing this perspective. That's Elizabeth Dukes, cofounder and executive vice president of iOffice. And we'll be back with more with iOffice after this. You're listening the BusinessMakers Show, heard here and see online at thebussinessmakers.com.

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Russ: This is the BusinessMakers Show, heard here and seen online at theBusinessMakers.com. And continuing on with iOffice, where now I'm with cofounder and CFO, Dan Sudduth. Dan, welcome to the BusinessMakers Show.

Dan: It's good to be here, Russ.

Russ: You bet. So you are one of the cofounders as well. I think you were the person that Elizabeth was talking about that was in the audience when she and Don told about their business and you said, "I get it." Is that right?

Dan: Yeah. I'm a little surprised that they thought I got it, but they sounded very nice and knew what they were talking about. So it was a nice story.

Russ: Well, and apparently you did get it, and the three of you've been together now for ten years, right?

Dan: Ten years.

Russ: Those of you watching on video have noticed we've moved out into the work area. And my goodness, you have very sophisticated, cool workstations with three distinct groups. Is that right?

Dan: Three distinct groups. Yes, the programming group, then the customer service group, and then the LEED, L-E-E-D, and relocation management group.

Russ: Okay. Do you have people that can play in all those positions, or is it so specialized they always stay there?

Dan: Only the CEO plays in all those positions.

Russ: All right. And we are gonna meet him in a second as well, too.

Dan: Right, right.

Russ: But what's the programming group do? What are they doing?

Dan: Well, I mean, we build process software for managing large facilities, basically Fortune 2000. It's everything that goes, as I say, on inside the box. When you think about going to work and you have to do your work, all the things that you need. And with the Fortune 2000, they're continuously moving people around. And the technology enables them to do that, plus also gives them real-time information about their occupancy, their utilization, their files, and on and on. And -

Russ: Well, let's say for second - I'll dream a second. I'm a CEO of a Fortune 200 company, and I've got 1,500 employees in a facility. How specifically would it benefit me? I mean, where do the hard dollars come in or what happens?

Dan: Well, several things. We load CAD drawings to set up the site to be able to manage the space and know what they have. Every time we load drawings, we find that the client has at least 10 to 15 percent of their space available that's vacant that they didn't know they had. And when you look at a P&L, the two largest items on any P&L are your people and your space. And when you think about 10 or 15 percent on just a 300,000-foot customer and what the rents are today, that's a substantial savings for them.

Also, it enables them to do chargeback of their space. And so you have the marketing department how much space are they using, how much engineering's using, what your vendors - I mean, subcontractors in there, they don't know where they are and how many they are. So it's all about dollars. And when you're looking at a certain amount of square feet - our largest client is 2.8 million square feet with offices all over the world. And this enables them to pull all this together in one location because it's over the Internet. And it just - it gives that executive a way to know that. One of my frustrations of being a CFO of public companies is prior to meeting Don and Elizabeth was not having good data on a real-time basis to make good decisions. And this absolutely does that.

Russ: Okay. And just to set the record straight, iOffice is not public yet, right?

Dan: Yes. Hopefully, it will never be. And certainly I hope I never have to look Sarbanes-Oxley in the face again.

Russ: Okay. Great, great. Well, your position, CFO, is pretty important here. I mean, it's always important in every company, but the interesting thing, my question on, "Imagine I was the CEO of this company and had all this space," is it's just real hard to see the economic advantage, but it must be huge for these companies for you guys to be able to capture 'em and keep 'em and service 'em.

Dan: One of our largest customers is Home Depot in Atlanta, their corporate headquarters, and it's 1.8 million feet. And they've gone record is at the first year, it saved them $1.5 million, which is serious money in today's time.

Russ: Right. Now speaking of Home Depot, you don't think about venturing into actual retail space.

Dan: We've not had the opportunity to do it yet. We certainly could. But the retailers tend to have their own processes and so to run their business rather than office services. Our software is build by facilities people, because you'd heard Elizabeth and Don's background to help corporate facilities manage their facility. And as you know, building any kinda company, if you're not focused on what you do and try to be all things to all people, you probably won't be successful.

Russ: That's right. That's right. Okay. So how many employees do you have today at iOffice?

Dan: We have 30-35 employees.

Russ: Okay. That's pretty cool. I look around in here and I wonder if you use your software. I see some room for improvement - I'm kidding. [Laughs]

Dan: Well, being an older fellow, or more mature fellow, I do get harassed from time to time for not using our software more often. But we call it thinking or whatever it is, it's just we do what we do.

Russ: All right. Great. Well, we're gonna be back with the CEO of this sort of trio of founders after this. And, Dan Sudduth, CFO, I really appreciate you sharing some time with us.

Dan: Well, it's a pleasure. And we look forward to a bright future.

Russ: You bet. All right. And this is the BusinessMakers Show, heard here and seen online at theBusinessMakers.com.

[Commercial]

Russ: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. And continuing on in iOffice, this real cool business that's really sorta capturing it seems like quite a bit of the globe in office and facilities management, I'm now with the third cofounder, Don Traweek, CEO. Don, you got quite a company going here, man.

Don: Well, thank you very much. We like it here.

Russ: All right. Well, I bet so. I think it's kinda unique that the three cofounders are still together, still playing leadership roles ten years later. Is that luck or was this some sort of master plan?

Don: Well, I'd like to say it was a master plan. Elizabeth and I have known each other for a long, long time. And so when we got the bright idea to start this venture up, we realized we needed one piece of ingredient that was missing, and we were looking for that very special person, and then we ran across Dan. Dan seems to get it, and not too many people we had visited with earlier really had gotten it. And -

Russ: Not only did he get it, but he's a finance guy, so that worked out very well for you to -

Don: He was one key ingredient that we literally were missing. We had the ideas. We had the technology, but we really needed that special business side of it, and Dan brought that to us. And ten years later, here we are still today.

Russ: All right. And it just feels like it's been continuous growth, but that might not be accurate. We've been in a pretty tough economic time. Did you guys feel anything during this tough time?

Don: No. I think actually we probably we grew more during the economic time. I think a lot of these companies had to tighten up, and our technology offering really was something that they need to be able to manage their operations a lot more efficient than what they currently do. And so during the down times, we really were seeing a spurt in growth. And so it's been very nice.

Russ: That's quite impressive. Now when I'm around companies like this and I see this kind of success and growth, I start thinking, "Wow. What's the exit strategy?" So is there also a master plan that maybe includes an IPO, maybe includes getting bought, or maybe even making an acquisition and growing?

Don: Well, I don't know about any of those. I know we're focused on growing this company. We have an awful lot of fun. I come to work every day, everybody's sitting on the edge of our seats. We're growing and having a good time, and I think that's gonna be our focus for the time being.

Russ: Well, sounds like a good plan to me. As you were telling me that, I thought of one more question, though. Facilities can be troublesome, and I'm just wondering have you ever had anybody, you manage a facility that caught on fire or that flooded or that got demolished in a hurricane? Anything like that ever happen?

Don: Living here in Houston, you'd think that. Fortunately, we have not. And the good news about it if something disastrous like that was to happen, we are an ASP model and so we house all their information. We have everything located off site and so they're able to pick up and can manage their business remotely if they need to.

Russ: Right. Wow. Maybe that's just an added advantage of being an iOffice - you never get injured or burned or hit by a hurricane.

Don: That's right, yeah.

Russ: All right. Well, I really appreciate you and your cofounders sharing this cool story about iOffice with us today.

Don: All right. Thank you very much.

Russ: All right, you bet. And that's Don Traweek, CEO of iOffice. And you're listening to the BusinessMakers Show, heard here and seen online at theBusinessMakers.com.