Distributed Teams, Singular Focus | Ray Hein from Propel

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Ray Hein 0:00
frankly, it’s there’s been a lack of innovation even though was focused on engineering, there’s been a lack of innovation for 20 plus years in the space.

Alexander Ferguson 0:14
Welcome to UpTech Report, our apply tech series UpTech Report is sponsored by TeraLeap. Learn how to leverage the power of video at teraleap.io. Today, my guest very excited is joined by Ray Hein, who’s from California, and San Jose, and he’s the CEO of propel welcome Ray.

Ray Hein 0:30
Thanks for having me, Alex, or Alexander

Alexander Ferguson 0:33
Now your platform is a cloud based PLM project, a product lifecycle management tool built on Salesforce, aim to help create commercialize and correct products getting from concept to customer. So for those who are effectively involved in on the product development side and developing that from lead and sales and marketing to even after market service. And they’re wanting to manage effectively, that that product to consumer, this could be a tool that they’ll be interested in knowing more about, can you share re how you originally discovered the this problem that it existed? And how has that problem evolved over time?

Ray Hein 1:11
Sure. I mean, the problem in the category of PLM, has been around for 20 plus years, so much like you’ve got CRM for the customer record, and you’ve got HRM for that people record and you’ve got an ERP for finance. PLM is the fourth largest software category, it’s been around for a long time. The problems though, that it solved 20 plus years ago, was really engineering, manufacturing, collaboration and trying to get products better handled by people that were moving from paper based systems, to computer aided design, where there was a lot of files that needed to be shared, and so forth. So the problem existed 20 plus years ago, and that was the problem that got solved. And, you know, frankly, it’s there’s been a lack of innovation, even though it was focused on engineering, there’s been a lack of innovation for 20 plus years in the space. So about five, six years ago, I looked at the space again, after being at agile Oracle for 10 plus years and building the category, you know, from, say, 1995 to 2007. The problems were different. And so the problem was that the whole notion of getting sales and marketing and the customer involved was a gap. So we formed the company to solve that problem of really going and putting what I call the Big L in the lifecycle to bring, you know, engineering and manufacturing, sales and marketing, aftermarket service and the customer all together in a kind of a collaborative hub, if you will, kind of a hub and spoke network.

Alexander Ferguson 2:43
You definitely as you stay there, you’re not new to understanding this market or the needs of it. For those that are intrigued to hear more about Ray story and how this whole developed Stay tuned for part two of our interview. But to give a taste of it is about five years ago, right 2015 started propel if you could know one thing back five years ago, what what would you wish you had known back then?

Ray Hein 3:06
i Great, great question. You know, that the that the analysts, while they look at, you know, market shifts, and you know, we talk a lot about digital transformation as being a hot buzzword, that there really was a gap and a need, and we were really driving digital transformation to move this category forward. You know, and, and that, you know, while categories exist, and there’s a big definition of it, when you’re actually trying to, you know, disrupt as people say, which I get overused buzzword. Breaking people’s notion and having them expand their thinking just takes longer than you think. And, you know, my marketing team and other folks, as we go out there, you know, people have to understand and gravitate towards that. And then there’s this big aha, and then you get this upswell. So I think we’re there now. But it just takes longer to change people’s thinking than you would think when you’re really trying to disrupt something.

Alexander Ferguson 4:05
I’m excited to hear more of that story when we get into that and part two of our conversation, but to understand the platform where it is is now propelling you stay on your site, streamline product development with company wide collaboration, let’s dive a little bit more maybe you can give it a use case of one of your clients have what does it look like throughout the entire lifecycle of a product?

Ray Hein 4:25
No, we so we sell into like three different industry sectors, primary industry segments, so I’ll take I’ll take one that I think is kind of interesting. It’s a company that is a joint venture between ABN Bev you know, which is the old Anheuser Busch AB part, and Keurig which is obviously the coffee makers that we all use. And they’re a customer of ours, where they were doing a joint venture to come up with an adult beverage maker. So if you want a Mohito or Cosmopolitan that you could get a pod and you know create that You know, instead of coffee for breakfast, you can have your adult beverage. All kidding aside, but, but they had a go to market problem that they were trying to assess. So when we talked to them, they said, typically a consumer product takes three to five years to bring to market. And they wanted to accelerate that. And so by bringing everybody the design and engineering, the supply chain that they were building and ramping up in China for manufacturing, the ABN Bev side for the alcohol pods, and then thinking about boy, they have to launch this and then every state with a, you know, ABC, the alcohol, Beverage Control Boards have to approve that this can be put out there. And now you’re gonna have basically a subscription service, a recurring revenue model for these pods, they had to think about all of that at the same time, and design and launch, the teams, the products, the process of launch, and then compress that all down. And I’m happy to say that, you know, they were very small team, like 1520 people, kind of a skunkworks team. And we’ve, you know, written with them to now being you know, well over 100 and 150 200 people now. And their whole teams, that whole network of all those people all collaborate using propel, and alas beats, obviously, within COVID. Everybody working from home, you know, when I talked to the senior senior leader, that champion that was excited about is like, we could not be doing running our business without propel because it’s 100% in the cloud. And it allows us to have business continuity and resilience. Because we actually built our systems and processes with this in mind.

Alexander Ferguson 6:37
Having that conversation and collaboration across departments, I mentioned, both can speed up and make it more efficient, but is essential in an era where we’re all working remotely right now. Curious, can you dive in a bit deeper on the technology? How is it different? How is it work efficiently? If someone’s a login and use that type of dashboard? And what’s behind that?

Ray Hein 7:03
Another great question. So as you mentioned, at the top of the conversation, you know, there are technology platforms that every software company has choices to make, whether it’s Amazon, or Microsoft, or Google Cloud platforms. And we chose the Salesforce technology platform, which is a full development platform, because we really wanted to change the notion of PLM to be both customer and product centric. And so it was just a natural choice from that aspect. But we did get the full technology stack and I had prior experience in a configure price quote company called Aptus. And it just seen how much faster we could develop if we only had to build the business domain and the application. And I didn’t have to build the plumbing and the technology side. So we get database, we get the DevOps Services, we get the security, side, the controls the dashboarding, and reporting all underneath, but we get to expose it all up into business use cases for you know, key users that that love our product.

Alexander Ferguson 8:06
This is fits so nicely in our apply tech series, because it’s one thing to come up with a new technology, it’s theoretical, or just testing but another to provide a complete solution, it’s actually helpful when you base it off of other you said plumbing, that you can provide that that last mile, that’s what people really need to solve the problem. And especially for this type of situation where product development through entire lifecycle for consumers, you care able to provide that that last mile and for them describing that effectively. Now you

Ray Hein 8:35
are in, you know, at the end of the day, like you know, a lot of our competitors have, you know, old legacy technologies still on prem trying to move over to SAS, and their proprietary. And what we’re seeing is that the CTO CIO level, it’s a platform or you know, the large folks are winning at the platform level. And so if the platform is standard, but like Salesforce is becoming standard in businesses, many places or SAP, or maybe Oracle, you know, trying to drive it from their side, so the big box business systems, if you will, so there’s platform or so us gravitating and grabbing on to that Salesforce side just makes it that plumbing side it technology so easy for us to you know, check the box on that side and not have to worry about security and the other side. And the last piece, Alexander, is it, because there’s this platform or there’s also this consolidation and reduction where the CIOs and CTOs, they don’t want 20 3050 With the proliferation of SAS, there’s just way too many applications that aren’t connected now they’re trying to reconnect. So if you can gravitate towards a big platform, and then have a common UI common experience, reduced the cost of the IT ownership, you know, the the the value is very high, it’s very easy for people to to get user adoption Because of that common user interface and that common UI with this new common platform,

Alexander Ferguson 10:04
they definitely the trend is going where SAS is exploding. And the the number of services people are using now that are cloud based is only growing. And it’s always a question after CTOs and other folks are like, alright, to how much more complexity we’re really adding to our system? And that’s a question when they decide do I want to choose this new software in this new platform? And does it integrate well, with other tools that we’re using? And I suppose, since you are based on Salesforce, you integrate them with any other type of application that has that same ability? Is that correct?

Ray Hein 10:36
Absolutely. So you know, if it’s a Salesforce business application, or other application that runs on the Salesforce platform through AppExchange, partners, that’s pretty seamless, and really easy to do. But there are technologies that, you know, Salesforce has been out for so long, that the API’s and the integration layer is just already pre built and pre wired. So it makes it very easy for us to integrate into front office or back office systems, you know, whether it’s ERP, or or design tools or other other legacy, you know, systems. Yeah, that’s core, when when a product is central, it needs to integrate well into other business systems.

Alexander Ferguson 11:20
What’s your business models have by seat per month, per year? How does that work?

Ray Hein 11:24
Yes. So we’ve, it is by seat per month, per user per month. And then we have bands of different types of users as well. So you know, there are folks that are more casual users, or, you know, in our medical device area, as a case in point, everybody in the company has to be trained and certified, you know, to make sure that they’re compliant for the FDA needs, and so forth. So we have customers that have 1000s of users that use our training module that, you know, they’re trained on the right product and services, or they are trained to know how to test it and launch it. So, you know, we have lower cost seats to make it, you know, less expensive and less friction, you know, from that side. So,

Alexander Ferguson 12:06
yeah, what’s the tip? What’s the best size of a company that obviously, almost any size could join, but what’s the the best utilize size of a company that say, Yeah, this is a good solution for us.

Ray Hein 12:16
You know, we have like small startup companies that they know, you know, especially in the medical device side, they have to capture all of their information and their design decisions early on. And as they go through, you know, animal trials and human trials, and they need to document every aspect of that. So we, you know, done startup companies of 20, to 50 people to, you know, companies where it’s 200. And just say 5000 is kind of the sweet spot right now, but we are also seeing large global enterprises, most of the large global enterprises had older systems. And now those are the ones that are coming back to us. And saying, you know, through digital transformation, they’ve already moved off of old legacy, Siebel, to Salesforce, or from PeopleSoft to workday. Now, they’re looking at their next gen PLM systems. And so we’re now seeing a lot of interest from the largest companies in the world coming our way as well.

Alexander Ferguson 13:17
Before someone decides to choose a platform like yours, what’s common challenges that they’re facing and problems that are arising and they’re, they’re feeling this on a regular basis?

Ray Hein 13:29
Great, great point. I think it’s, you know, increased competition and compression of innovation, it’s always a cycle of getting more products out faster, in certain making, ensuring that you’ve got the right quality in the, in the products. So, you know, I, I look at like the Samsung Galaxy seven, as, as a great example, you know, we all watch that inside boy, if you charge it, you know, at home that might catch on fire, if you’re putting on an airplane, you know, it’s gonna catch on fire. Well, there was a late design problem in there that the battery wasn’t designed correctly for the application. So, you know, people are worried about making sure that they design and deliver safe products, that the quality’s there, and that they can stay up in innovate as fast as they can with the compression of innovation. And then now probably more than ever, we’re seeing people that used to be able to sell like direct to retail and brick and mortar having to sell in through E commerce channels and the like. So our commercialization aspect of our lifecycle is helping companies sell you know, either through E commerce or through configure price quote in and maybe markets of one where they’re selling you know, really more custom engineered products. So the market dynamics are shifting in the last piece to that too is more and more companies are shifting business models to subscription revenue models or outcomes. And so designing products and go to market initiatives has to be well thought all the way in the engineering manufacturing as well as the go to market aspects to it. Take advantage of a subscription model. So like a peloton bike model, it’s the aftermarket subscription that is paying for the business or even, you know, one of our one of our customers, desktop metal, who just went public super cool company, they’ve been with us from the beginning. You know, they do 3d printing on demand or print print as a service. So there’s subscription revenue, they’re not just selling their 3d printers, but they’re also doing print as a service as new revenue models. So those are the things that people solve when they think about holistically bringing products and customers together.

Alexander Ferguson 15:35
What’s the most exciting feature that you guys have released lately? Or about to release that you’d want to share?

Ray Hein 15:42
Oh, well, cool. I think the biggest one is we just launched some industry based solutions. So we sell into high tech CPG type companies like the ABN Bev that I described are simply safe, that’s making security, you know, systems and the like, we also sell into medical device customers. And, you know, we’ve got about a third of our customers are medical device companies, you know, helping in many, many different ways. So we just launched what we call propel for medical device. And we added some new capabilities of simplifying the whole problem reporting for what’s called MedWatch. When there’s an issue with a medical device, how do you report it to the FDA quickly? And how do you quickly resolve those problems? Excuse me resolve those problems. So it’s part of our propel for medical device? And then as people try to take these medical devices into different markets in Korea or other, you know, geographies, global product registration is key. And then how do you use it? So those that those are the cool things, so we’re helping medical device companies be more compliant and get their products to market faster?

Alexander Ferguson 16:54
Say, even industry specific that that’s powerful than utilizing those those tools? Where do you see the company in five years from now?

Ray Hein 17:03
You know, we’re growing, you know, anywhere between 75 to 150%. Year over year, we’ve had, you know, just really good growth rate. Gartner and Forrester, the analysts said that this movement of moving the old legacy system to SAS is going to happen in the next five years. And we were actually seeing that I think COVID In business resiliency is accelerating our business. But from a product side, you know, we’ve got the foundations of kind of systems of collaboration systems of insights, that I think we’ll see some things where we’re going to be able to do predictive, or take market insights back in and help people think about outcomes, and managing outcomes of products and then monetize those outcomes as well. Through through new models, because the customer product sides are working together and and people are more willing to pay for outcomes than they are willing to pay for, you know, some physical product.

Alexander Ferguson 18:08
Well, thank you so much for giving us a quick deep dive into propel AI for those who want to learn more go to propelplm.com And you can check out what they have there. Thanks again for your time.

Ray Hein 18:19
Right. My pleasure. Appreciate it.

Alexander Ferguson 18:21
Everyone. Stay tuned for part two of our discussion interview to hear more around raise background and a story. I’m excited for that. So we’ll see you guys next time. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you subscribe to this series on Apple podcasts, Spotify or your favorite podcasting app.