Follow The Friction

Robert Stephens is the founder of Geek Squad, the innovative IT services company that began as a one-man-on-a-bicycle shop before he sold it off to Best Buy, where the iconic brand became the cornerstone of the mega-retailer’s $3 billion+ services business and where Stephens eventually became CTO. We sat down with Stephens — who’s since left Best Buy and launched a voice and text chatbot platform called Assist — at the SolarWinds Empower conference this fall. Among other things, we talked about leading growth in the IT services space. Here’s a snapshot of our conversation.

CHANNEL EXECUTIVE: Let’s say the Best Buy acquisition of Geek Squad hadn’t been in the stars. How might you have scaled your IT service business had you held onto it?

STEPHENS: I see two kinds of scale: You can scale your price, or you can scale your size. Not everyone wants to lead thousands of people. Some people want to be Geppetto. To those small businesses, I suggest raising your rates and specializing, which will scale the number of customers you have in a very defined niche.

If you want to scale the size of your business, pay attention to where the growth is. This is something I didn’t know when I was younger, but it’s the path I’m taking with my current company, Assist. There’s growth in the transition away from the voice call center to texting, and chatbots are the key technology driving it. I see growth opportunities in drones, because there are thousands of use cases for flying sensors. In retail, I see growth potential in digital payments thanks to the omni-channel movement. Across the board, I see growth in blockchain, because trust as a business has legs. Fast growth won’t come at the hands of creating a trend, but following one. NASA slingshots probes around the sun by using its natural gravity. It’s organic and natural. Don’t try to reinvent gravity. Follow the momentum that’s already there.

CHEX: As it relates to core IT services right now, where do you see the most immediate momentum?

STEPHENS: Wherever there’s friction for your customers. I was having coffee with an MSP this morning, and I asked him if he was taking care of his clients’ phones. He said he didn’t want to touch that. Likewise, traditional retail IT services providers have had trouble transitioning to or embracing digital and e-commerce solutions. The problem with these scenarios is that customers don’t like friction. If they could have one company take care of everything with a network connection or everything related to a transaction, they’d be happier. That holistic view is another way to look at the business of IT service provision.

I identify customer friction in terms of time, money, and effort. How long does it take a customer or employee to do something, measured in minutes or seconds? What’s the cost to do it? And how hard is it to do—how much effort or how many clicks does it take? If you look at those points of friction in the industries you serve, you can relatively quickly identify five new solutions or services your customers would benefit from, solutions or services that they didn’t even know they could get from you.

What’s great about this is that if you’re paying attention, you’re offering a service that nobody offers yet. You’ll have no competition until it becomes commoditized, at which point you give it away and find the next points of friction to address. If you look at successful businesses in Silicon Valley, they’re all trying to do one thing: eliminate friction. Sometimes, to do this, you have to look outside of your existing braintrust. You have to hire a college kid who has no preconceived notions about your business and just doesn’t care, and let that kid ask you why you’re doing certain things certain ways and why you’re not doing other things you could be doing. Follow the friction, and solve for it.

ROBERT STEPHENS is best known as the founder of Geek Squad and former CTO at Best Buy and is founder of Assist, a chatbot platform aimed at retail and service businesses.