– Brand X, brand Y, brand Z. Not one sticks. Watch it again in slow motion.
– Welcome to the Sticky Branding Podcast. In this show, we are unpacking how companies grow sticky brands.
– My name is Jeremy Miller. I am the founder of Sticky Branding and host of the Sticky Branding podcast. In today’s episode, I’m very excited to introduce you to the CEO of project Line, Derin Hildebrandt, Derin welcome to the show.
– Thanks Jeremy. Appreciate it.
– Well, where I always love to start these conversations is not by me telling your story, but reversing and allowing you to give your own elevator pitch. So give me the short and sweet of it. Tell me about Project Line, who is Project Line and what do you guys do?
– So, we are a company that is headquartered in Saskatoon, but we sell all over Canada. And we sell and implement ERP software. Software to run a business to small and mid-sized businesses. So when our, our mission in that whole thing is to transition our customers to ERP with the highest level of empathy, consideration and fit.
– Okay. So that’s a lot to unpack there. Why are you leading to those last three points? So it was empathy, consideration and fit were those the three, right?
– Absolutely, yeah.
– Why, what does that mean?
– Well, you know, in our industry, if you were to go in as often business owners, do they go and search, I need something better than accounting and they start searching for software. You just get hammered with features and functions. Oh, we do, we’ve got the best inventory. Oh, we’ve got the best manufacturing. And by far the majority of our competitors talk about product, and what they miss is that ERP is incredibly complex. It’s kind of scary and there’s a human side to it. And so we believe there’s a human side to ERP, which we embody as a company. But also we recognize with each of our customers that there’s a, there is a human side, it’s going to impact everyone in the business. So it requires empathy, requires people that understand what they’re going through. I need to have people that have lived what they’re living, right. That can actually empathize, not just sympathize, give careful consideration. There’s reasons, reasons that those businesses are unique. There’s reasons that these companies have been successful, and we need to be successful. And we need to protect that. While, also showing the best process, and then fit is, if there’s not a good fit, we shouldn’t be there. This is not a square peg, round hole kind of thing, because you’re gonna live with the results for decades. So we need to choose carefully.
– So a lot of this really speaks to me now, just to clarify for our listeners too, is Project Line is an ERP implementation firm versus the software manufacturer, correct?
– Correct. That’s right. We sell software by other publishers.
– And so which brands do you represent?
– The two biggest brands in ERP, SAP and NetSuite.
– Got it. Now, what I get really intrigued by is I started my career out in the software industry. I worked originally at, well, back in the early 2000’s, 21 years ago, I started out in CRMs and that was a hot potato back then being the, the.com years. So I sold the same product for five different companies in that period of time. But when I look at what I know, the ERP space, and just CRM is so, such a small piece to what ERP is, it’s complex software, as you said, and originally started with accounting and business operations, but now it’s that much more. So when you look at the, this empathy and fit and the, just the human side of it, where’s this coming from? Is it because that software is so complex that, that everybody’s needs are that much different?
– You know what, there’s a lot of common needs in any industry. You know, every customer says, oh, we’re unique and special. And yet their processes, if you’re a distribution company could be the same. Or if you’re a services business, you’ll have the same issues and the same challenges. There’s always some unique nuggets, to be sure, but really it comes down to customers know that it is complicated. They get easily overwhelmed. You know, they’ve got a variety of different companies talking about, about a solution and they get confused. They’re embarrassed by what they don’t know. They think they should understand it, right. They feel like they should be an expert in everything. That’s the problem with, with us as business owners is we, we often guilt ourselves in thinking that we should understand everything when the reality is we don’t, you understand your business about marketing. That doesn’t mean you understand ERP, right? But you might feel that you should. And so, you know, we, when we look at, we say that, you know, often selecting ERP and implementing ERP is kind of like laser eye surgery, we all want better eyesight, but what if something goes wrong, we’ll be worse off than we were before. And so we’re always working to help customers get beyond that about a lot of this is embodied in just trust, understanding that, you know, the things we’ve talked about in our mission and helping them understand that this is more than accounting. This is, this can completely transform your business right from the sales organization, right through to receiving the cash and service follow up, you know, the follow along with the customer, the complete business process.
– But ERP is scary. It’s very, it can be very expensive. It can be very overwhelming. It touches all your business processes. How do you market that? How do you educate customers so that they have that confidence that this is the right decision and it’s not going to cost them millions of dollars and not give them the return on investment they expect.
– Yeah, well, that’s a fair question. I think it’s one of the challenges with some of the big brands is that we work with big brands we do, often our customers have their own customers that are large enterprise and they hear the horror stories, right? There’s always horror stories. And the problem is people hear the horror stories. They don’t hear the success stories. And so, you know, we worked very hard to, you know, have our own set of that, but bigger, we can’t just tell a story. I mean, we have, we have lots of good stories of what we can tell about our customers, but part of it is helping them wrap their head around how this is going to impact them, what the process is like, you know, showing that we truly understand their business. And that’s something that commonly we hear in the sales process, frankly, even times we don’t win the deal. We’re like, you guys, you understand our business, you know? And so, but you know, the first thing is to have options. We give our customers options and that’s why we choose these two leading brands. They both have different strengths and weaknesses. There is some overlap between the two, but not as much as people would think. And so when we go to fit, we’re looking to make sure that we’re choosing the right solution based on what they need. And the second part is putting the right people to that. I, you know, I have someone who’s worked with services companies, I’m going to put them in front of you as opposed to someone that has, you know, deep distribution manufacturing experience. So that’s an, that’s another element of it. But I think also when you talk about the cost and you mentioned it can cost millions of dollars, well in large enterprise, it does. But in your average projects, you know, there are, for the first year, that are in the range of a hundred grand. A hundred to 200 grand for a company that could be anywhere between 5 million and even 20, 30, or even 50 million. So it’s, it’s a little shocking sometimes to people, but still they look at that capital costs, they have no issue going buying a new truck for their fleet. They have no issue buying a piece of equipment for the, for the plant, but they see a number and they can’t understand why software services costs a hundred, $200,000. Right?
– And so the way I often describe it to people is if you look at your annual revenue, your, your typical first year shouldn’t cost on a, on an ERP project, shouldn’t, with software and everything, shouldn’t cost more than one to two percent, of your annual revenue. So do the math, you’ve got a $20 million company. You can figure out the math on what that project should be. And the smaller the company is, of course, that percentage is going to go up a bit. But the point of that is, if you can’t save one to two percent by improving efficiency, or if you can’t improve revenue by improving your sales by one to two percent, then A, you shouldn’t do an ERP project and B you must have a heck of a business and I’d love, and you’d probably like to do it too, Jeremy is to do a case study on them because, who can’t save, I can tell you that in COVID. Well, I’m sure we’ll get to that. We saved way more than that because we were forced to figure it out. The reality is if we can show someone that we can save them money or increase, reduce leakage, increase their revenue, we can do one to two percent, come on and we’ll pay for the project. Now it’s return on investment.
– Yeah. And I think that framing, that practicality, is what people need to hear, because this is mission critical software. We need, it starts with accounting and it rolls out from there. And what I’ve seen, and we’ll talk about this in a moment with the pandemic, as you said, is what I’ve in the last year and a half is more conversations about ERP because of the shift to e-commerce and direct to consumer. When we look at many organizations that we work with at Sticky Branding, they are all working very hard to evolve and reach new markets and new customers, and the pandemic forced their hand, but they look at their old ERP systems put together with duct tape and shoestring. And, oftentimes they don’t have the capability to put inventory to an e-commerce website. And it’s bringing their head up to the water to say, what are the capabilities right now?
– That’s right.
– So I’m curious, what has the pandemic’s impact been on Project Line?
– It was an interesting experience I guess, for everyone, and we’ve been fortunate, but you know what it’s certainly those first couple of weeks last year were pretty scary. You know, we had, we had a strong growth curve. We were just in the midst of celebrating our fifth year on the growth 500 list in Canada and you know, things were looking great, we had big plans. And then that hits, you know, and, you know, various regions of the country are different, you know, in Ontario, of course, you know, it just closed right down. In the case of Western Canada, they were already hard hit. And so we have customers across a variety of industries. I have customers that went from 40 people, 50 people down to two or three, you know, and we had others that were figuring how to pivot, and so on, but it was, it was crazy. And so we, we had a couple of weeks where we were right away doing the, you know, the stress tests on our P and L, understanding what was going to happen, if, you know, some of these projects were put on hold, which many were, and, you know, and then within a month or two, some of those started to come back. But initially we had some sober thought and we had to really think carefully about, you know, how are we gonna protect our team? Could we protect our entire team when the federal government came across, you know, come along some of their subsidy programs, did we want to participate in that because we’re not a handout company. And so, you know, we had to kind of balance that in the end. You know, we did take advantage of some of that, but the bigger thing that happens, we were forced to look at what do you really need? You know, you, as you run a business and we’re in 20, we’re 20 years in business this year, and there’s some things you assume you think you need and you learn what you can really live with, and then what is really bringing you value. And so we, we certainly tightened up our bottom line. You know, our top-line was pretty flat, frankly, for 2020 compared to the previous year. And we’ve been on some pretty steady growth this year. We’re stretching again, which is good. It’s, it’s starting to come back. But the bottom line, we actually celebrated our best EBITDA in the history of the company last year, which is ironic because we, we had to, you know, we had to work really tight like everyone else. So we had to make some, you know, you do some things, you make some sacrifices for some customers, you put some projects on hold. We realized our install base, you know, our customers were, you know, responsive, there’s things that they needed to, as they adapted and pivoted, not everyone, others had to really fight, you know? And I mentioned the one example of going to two employees, had another example of a customer in Ontario that went, 95% of the revenue disappeared. They’re, they were, you know, providing food products to the restaurant business. Well, they pivoted and went e-commerce. And so then we had an e-commerce project. Right. So we’re fortunate, but it’s been quite a ride. Yeah.
– How did, what was going through your mind or what did you tell and communicate to your staff when you were going through the throes of all of this? What was the, how did you get them on board to do it? Cause the uncertainty and the fear was palpable.
– Yeah, there was a lot of, well, not sleepless nights but short nights, when you’re thinking about what are you going to do? And, and some of the measures we thought we’d have to take, you know, we of course like everyone, we had to do the everyone go home, work from home first and you know, we’re going to figure this out. And we were, you know, trying to keep it positive while we were digging hard and figuring it out. But I think it was within a week or two. It was probably within that first two weeks, we did an all hands call, you know, and it was weird cause we’re used to doing all hands calls where there’s a few people joined remotely from other offices, but, you know, we had everyone in the office at our headquarters and you know, we’re doing this massive zoom call and that was just, you know, communicating that way is different, but we pulled everyone together and just had a frank conversation where it was looking at, of course we didn’t give them every gory detail, you know, assured them, we’re gonna figure it out. But at that point, you know, we had some [censored] with some people, some people we had to move to, you know, reduced hours, some people we had to make, you know, make sure they took some vacation and get creative in that. The interesting thing is we, people pulled together. We were fortunately a very tight team with very low turnover and there was people offering stuff up. Well, I can do this, I can take some time off or, I’m willing to reduce putting people in the head-ups I’m able to reduce my hours for, you know, for a few months or I’m willing to not take commission and defer my commission until, you know, another time. So that was really cool. And I think we knew we had a great team, but that affirmed it for us. And the, and the fortunate thing is within two weeks after that, you know, we had the things like the wage subsidy that helped us through for a month or two until things came back. Yeah.
– Got it. Isn’t that the remarkable, just how people participate. You really got to see where, where your team was and all of that investment that goes into them, that they were willing to invest back. I think that’s truly remarkable. When you look back, So we’re recording this in July of 2021, we’re a year and a half out of this now, what did your team accomplish? What are you most proud of from that moment in time?
– Hmm. Well, we, we didn’t shrink, you know, we didn’t, we didn’t end up having to remove anyone from, you know, due to COVID, you know, like from a, you know, from a cost cutting measure, we didn’t, we didn’t actually have any COVID cases, which is amazing, but you know, at least that I know of. Right? But I’m pretty certain we didn’t, but I think, you know, what am I most proud of? Well, first off, the team here, I mean like, like you said, everyone pulled together. I was, I’m still floored by the way, people are stepping up and offering things up, right. You know, and, realizing that every little bit helps and we kept the company, not just together, but we came out of it and grew. And at the end of it, you know, we were still in the middle of it in November, we were through this whole time, I was evaluating new solutions and in November we entered this whole new NetSuite practice that we started, we were selling SAP and we just started NetSuite. And we did that in motion, came out of COVID, you know, this year I’m saying out of, because for me, 2021 was a fresh new leaf, starting a new line of business. And I, you know, had we not finished that last year strong, I don’t believe we could have done that.
– And did COVID accelerate that.
– Yeah. Yeah. It, it slowed down our, our sales of course, because you know, our customers that are struggling and people are, are worried. Right? You know, but at the same time, it actually accelerated because we were forced to take a really, really hard look at our P and L. And what do we really need? What are we really getting value from? And every line item, we didn’t have travel. That was huge,
– That’s a huge one.
– next to payroll, that’s our second biggest expense item. Right? So that’s certainly helped, you know, for a period of time, but it accelerated because it just, it just changed our thinking completely. Right? We had just gone through, you know, kind of looking at this new brand a year before and all of a sudden we’re like, okay, how do we protect this and remain true to our brand and come through this, together and strong. And we did it, and kept our team together.
– Which is remarkable. And, and we’ve been pushed through that. But as you said, you’ve done that with everybody. So I think that’s assessed with everybody, the, I’m curious though, on the customer side of things, as I mentioned earlier, I’ve seen this spike in e-commerce demand. Like never before, you’ll just look at Shopify stock, it’s on fire. It’s been on fire every single month for the last little while. Where do you see the ERP space growing and evolving from, from this now? Where, where are you taking it?
– Being because of COVID?
– Well, because of COVID or just because it’s 2021 and we’re in a brave new world now, where are the, let me ask in a different way. Where are the green chutes of opportunity?
– Yeah, well, I think there’s, there’s been a mind shift, you know, in Canada, I think, because in the ERP world, and I would talk with my counterparts in the U.S. and they’ve been selling and pushing cloud ERP for years. And while we certainly had the option here, you know, it’s amazing how many companies want to stay, you know, on-premise or what we call a private cloud where they feel they just have more control. Right. But the reality is that, you know, the whole work from home thing has changed people’s thinking, and it’s one thing to work on a spreadsheet at home, right? It’s one thing to work, you know, on your email, it’s entirely another thing to run an ERP and run a business and look at what’s going on on the shop floor and what’s going on in ARAP, you know, from home. Right? So that, that changed things and accelerated along with the e-commerce thing. And people are, there’s companies that I never would’ve thought would have done e-commerce for a variety of reasons that are, are looking at it, but it’s also changed. I think it actually forced the software publishers to reevaluate what they’re doing. Right? You know, both NetSuite and SAP have been reporting strong growth, but there’s been a big shift, particularly SAP, that’s had more of a blended model. I mean, NetSuite is pure cloud really. And so they’ve just been growing and SAP’s growth has been shifting dramatically towards cloud, which is really interesting, but I think people are also understanding they can, well ERP is as important as an entire business. They can take packaged components that they don’t have in their business and start implementing that, what they hadn’t before. E-commerce is one example, CRM. Well, my sales guys are working from home now, how do I keep my arms around what they’re doing without being a micromanager? How do I understand? I really need to understand what my pipeline is like, because I can maybe understand my work in hand, if I’m a services business, but I can’t see beyond that. What’s, you know, what’s coming right? And people starting out, reevaluate that lookout case, CRM is not important just because salespeople need it, but because there’s a management team at our company, I can see the runway. I can see the, you know, the book of business that’s coming and have a reasonable degree of certainty in that, or you know, trust in that number. So I think it’s changed the way people look at an integrated business. So I think ERP is really just going to keep growing like crazy. I really, do.
– Yeah, I agree. I think it’s, it’s this hybrid and work from home and distributed workforces where data, communication, and collaboration are so key. And doesn’t that kind of pull back to your brand, which is the human side of ERP that, how do we connect humans to actually work together
– That’s absolutely right.
– You’ve been, this is not your first rodeo as a CEO. You’ve had a long career before this. I’m curious when you’ve gone through this experience and even looking over your shoulder, when speaking with other leaders and CEOs, what’s the best advice or that, that nugget that you tend to share to other leaders?
– Huh, this is always the worst question, Jeremy,
– I know, that’s why I saved it for last.
– I was thinking of an answer too, before, and then you go, huh, well, you know what, at the risk of sounding negative, and I don’t mean this in a negative way, but assume your worst, when you assume your worst case and then multiply it when you think you’ve, you’ve come up with your worst case scenario, when you’re looking at your business case, you know what you’re looking at, your pessimistic plan, or your optimistic plan, you know, you’d lean to look at the optimistic plan because that’s our job as CEO is to, right, push hard and you know, kind of imagine, see the potential and then, you know, push the organization to imagine the potential. Right. But part of that is you also have to look at realistically and look at, you know, in that worst case, what is the things that can go wrong? Right. And I think COVID has certainly taught us this. And there’s lots of other things that go on day to day, year by year. You know, that if I look back, even on my career where you couldn’t have predicted those things that impact it. And the point of that is not to be negative. The point is if you’ve made that assumption and said, okay, well here, I think it was my worst case. So I’m going to, I’m going to downgrade that even further because of what I don’t know, I can’t predict a pandemic as an example that forces you then to start looking at, okay, what else do I have to do? Cause I can’t, I don’t want to plan on that. Right? So if my worst case is worse than what I can think of, then I need to look at what are my opportunities. What are the, and that forces you as a leader to look at, okay, what are the other things we can do with the business? How else am I going to grow? Is it new lines of businesses, is it geography? Is it, you know, is it other strategic, you know, initial, what are we doing to grow this place and protect it right? While keeping the place together. I think it actually forces you to look at the what’s possible by looking at the worst case too. We look at the positive right, we try to be positive, we got to, kind of, get off that sometimes.
– I fully agree with what you’re saying too. Cause I believe scenario planning is very powerful, but to frame it in a negative, it actually allows you to be creative. As you said, to look at what are alternative revenue streams, what are additional markets? Where can we play? How can we win? And, and so that is just, that’s brilliant. I really appreciate you sharing that because I think we can all put that into our management meetings and strategic planning to be asking if this happened, what could we do? And the pandemic, I think, gives that lens that we can now go, well, we just went through this. What would we do differently on the same thing?
– Yeah. Absolutely.
– Very cool. That’s a really great place for us to, to pull it together. Derin, thank you so much. So final question. Where can people find Project Line?
– Oh, well you can find us on the web @projectline.ca. quick search of Project Line on LinkedIn you’ll find us. There is a Project Line Services in the U.S. it’s not us, we’re Project Lines Solutions, but you’ll find us, but you know, online at projectline.ca is the easiest way. And you can go from there.
– Yeah. And you’re up on LinkedIn as well.
– Oh, you bet.
– I will put some links to the show notes, in the show notes to Project Line and your social and yourself but Derin, thank you so much for coming on today’s show. It was fantastic. You have such a great story and, and insights and there’s so many nuggets I can take away from this. For everybody listening today, Thank you for tuning into the Sticky Branding Podcast. Be sure to subscribe wherever you get your favorite podcasts we’re available on YouTube so you can watch these videos and again, visit us at stickybranding.com for the best ideas, resources, books, services on how to grow your business into a sticky brand.