Business Brains

Disruptor | Russ Hawkins, Agilence

Posting in Education

With two successful high-tech startups behind him, the former Bell executive is bringing critical focus to his third - a big data software company focused squarely on transforming retail.

One big mistake many startups make is spreading themselves too thin for the sake of early revenue.

Russ Hawkins, 57, learned that lesson first-hand at a mammoth company - as a bag-carrying salesman and branch manager for the pre-breakup Ma Bell organization.

Since then, finding focus has been foremost in his decisions as CEO of two successful technology startups. And it is something he embraces closely at his third and most recent venture, a "big data" software developer called Agilence Inc.

"The one thing that I've learned about running small companies or, for that matter, about running a big company is that when you have a functional responsibility or you have a business, you've got to be laser-focused on your customers," Hawkins said during a recent interview at Agilence's sparsely decorated new office in Mount Laurel, N.J. "To me, the first three words are focus."

Dressed casually in a green PGA Championship vest, the silver-haired Hawkins regularly consults the answers he has prepared to questions sent over prior to our interview late on a drizzly autumn afternoon.

His appearance belies his button-downed experience as an operations executive for Bell and then Lucent Technologies, reaching farther back to his Irish-Catholic upbringing in Boston. His smile comes often and easily reaches his eyes, especially when we discuss a common interest, English literature.

It's easy to see why Hawkins is the sort of CEO who puts start-up backers at ease. You can think of him as the adult supervision that keeps visionary egos in line. Or as a translator who can lofty dreams of innovation into a marketable, practical corporate vision.

"The most important thing I do is try to sort through all the ideas that we have and craft out of that a strategy that makes logical sense that also stands the challenge of review by my investors," he said.

Asked by a venture capitalist colleague to assess Agilence's potential in mid-2007,  Hawkins came away impressed by the company's core software but far less inspired by its haphazard way of prospecting and signing customers. While the books featured high-profile accounts such as the New Jersey Turnpike Authority, they had very little in common. That not only made for a very high cost of sales, it was a customer service nightmare.

"What I saw a company with really great technology that wasn't executing very well. That's exactly the kind of situation I like," he said.

That's exactly what the VC was hoping. Six short months later, Hawkins was at the helm, with one of the company's three founders, Robert Klemme, assuming the role of chairman. He moved decisively: doubling-down on the company's retail focus despite extremely unfavorable market conditions.

Agilence's value proposition for retailers is simple: its solution sorts through receipts and video data gathered at the point of sale to provide sharper insight into sales trends, especially about weekly or daily promotions.

While most stores have to wait weeks for this sort of information, Agilence can provide it in near real time. That enables store managers to change things on the fly, which might help increase sales or, at the very least, reduce the costs associated with poorly executed promotions. One 130-store chain on the west coast reduced its costs by 60 basis points using the Agilence technology, sending $18 million right to the bottom line, Hawkins said.

There are almost 1 million retail locations across the United States that could benefit. The developer has signed more than 50 customers – including big-name chains like Bloomingdales and ShopRite. Another 12 accounts could be on board by the end of next year, based on the pipeline of pilot projects Agilence is running.

The company doesn't share sales figures, but public filings show it has raised at least $6.2 million in venture capital in the past three years. The so-called "retail shrink" its technology addresses is valued at $119 billion. In short, there are plenty of retailers looking for opportunities to recoup those losses, offering plenty of upside for Agilence's solution.

One of Hawkins' more controversial practices with both his backers and his senior managers is his insistence on structuring incentives and goals according to a tight six-month plan.

"I set an overall annual plan, but only firm up six months at a time. The reason is that when you are a small company, and you are growing very fast … the reality is that your opportunities are so significant that it is virtually impossible for me to tell you what is going to happen four quarters from now," he explained.

Hawkins also insists on regular high-level weekly meetings, where the team focuses on "projects and problems" from the customer's point of view. You'd better have a really good reason for missing one.

Although Hawkins officially graduated from Boston College with a Bachelors degree in English, he started out as a chemistry major, so he understands enough about engineering and science to keep his technical staff on their toes. He invested in MBA classes at Northeastern University but learned most of what he knows about management in the real world. One cardinal rule: know when you are wrong.

"There have been many instances where I have yielded to either more experienced or better argued points of view," he said. "Sometimes it has worked out, sometimes it hasn't. I know that I am not always right. I can start with that premise for sure."

Given that Hawkins has already negotiated the sale of two networking equipment start-ups – SilverStorm Technologies and Paragon Networks – one might wonder what motivates him to commute more than an hour each way to Agilence from his home in rural New Jersey. Why not spend more time walking his two rescue dogs, as he does every evening to unwind? Or digging deeper into the Russian literature that dominates his current reading list?

It's pretty simple: Hawkins wants his four children to get the best education possible without drowning in debt. Three are already attending college, walking the halls at Boston College, Skidmore and Northeastern.

Son and grandson of firemen, Hawkins was the one of the first in his family to attend college after his K-12 education at the storied Boston Latin School. He believes strongly in educating the next generation to be self-sufficient and accountable. At the very least, he figures that foundation will help them understand what they know, and what they don't know.

That same advice could easily extend to entrepreneurs or CEOs trying to grow their company to the next level.

"Don't think you know everything about everything," Hawkins advised, without bothering to consult his talking points. "Try to be clear about what you don't know, and don't be threatened by the people who can fill the gaps."

Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure