Interview with James Hickey, Managing Director Sterling BackCheck
Episode 2, James Hickey provides us a description of his journey working as senior management at one of Canada’s largest telecommunications company to his decision to leave to create his own business. He stresses the importance of selected good partners and how complimentary skills allowed him to be successful.
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| Intro: Welcome to the Mad Profit Podcast where we interview active investors, entrepreneurs, and experts who left corporate jobs to buy or start successful ventures and live life on their own terms. Listen to their stories, learn from their experiences and heed their advice so you too can create mad profits and the life you’ve always wanted and now here’s your host Laurent Truc. Laurent: Hi, everyone my name is Laurent and welcome to the Mad Profit Podcast where we interview investors entrepreneurs and experts who have bought, started or invested in successful businesses and are living life on their terms. I’m really excited today to have a good friend of mine and mentor as our guest, Jim Hickey. Jim welcome to the show. Jim: Thanks. Laurent: Glad you could make it and I am really looking forward to this interview. You’ve had a very interesting background. You and I have talked about this a few times and you’ve got so much to share. So I’m looking forward to picking your brain and learning a lot more from you (as I’m sure the audience does as well). Jim: Let’s have fun doing it. Laurent: Perfect. Why don’t you kick us off? Can you give me a little bit of background about yourself and a little bit of the work that you’ve done? Then we can dive into each one of these individual topics. Jim: Sure, one of the things that I tell people anytime I get into a situation where people are trying to understanding who I am, I tell them that I started life as number eight of eight but ultimately, I became eight of 11 children. I have seven brothers and three sisters and that informs just about everything I do. I grew up on a farm, father died when I was a young teenager, and my mother carried the load still having eight kids in public school as a single parent; she would have been 51 at the time. That kind of determines how you approach life. When you have 10 siblings around and a parent to tell you when you’re wrong (I don’t recall being told I was right about too many things but silence I took for being correct behavior), it drives you to look at the world in a certain way and think about things differently than what many others do. I got through public school, went on to university, really for sport-related reasons (I played soccer and junior hockey) and had a competitive streak to win. I was never worried about losing. I know lots of competitive people and really highly competitive people that fight like hell not to lose. I was on the other side of that and there is a difference. My approach to life is really about doing what I can to win and the consequences of losing I never worry about. Once I walk away from a game, it doesn’t matter what it is, if I’ve lost and I did what I needed to do to win, then I don’t think too much about it. I move on to the next thing. Through University I left the east coast of Canada moved to the west coast and got involved in a couple of interesting things that weren’t in the business world because I still had no idea what I was going to do. I had a basic science degree that was focused on the kinesiology world and ended up heading back east in Toronto. I started and landed in sales. I was probably in my early 20s and knew nothing about the business world. I had no mentors in it; not a single family member went into that space. I didn’t have uncles or cousins or any family members in the space. The older women in my life would have all been stay-at-home moms so I didn’t have that influence. I didn’t really know what to expect in the world. I thought people would be a whole lot smarter than what they are quite frankly and I was surprised that I could walk into that world and compete. There’s a lot of smart people out there with the big gap being that they don’t know what to do with it. They don’t know how to be smart about it. They’re far too cautious. And then there’s the other side of it where a lot of people out there suffer greatly from thinking that they know a lot more than what they do. They’ve lived privileged lives and are really ill-informed about how the world works. That’s my start in the business world. And I ultimately ended up at Bell Canada, a great company. I know there are lots of problems over there and people will complain about customer service and all kinds of stuff but I enjoyed the education that I got at Bell. It helps me inform decisions that I still make today based on the privilege of working with some pretty damn smart people. And not just smart but very capable. Laurent: Did you go in through the sales door at Bell? Is that your first avenue in? Jim: I did. I absolutely did. Sales gives you the privilege of being able to work with every aspect of a business, if you’re doing it right. You get the interface with techs, marketing, and finance people. There’s no boundary if you’re a really good dedicated salesperson. You get access wherever you want access because you’re dealing with the most precious commodity: customers. Laurent: yes, even on the customer side, you get to play with every different level whether it’s up the chain at C-level, all the way down. If you’re providing value across those multitudes of different individuals, they give you access. It allows you to understand a business from start to finish which is great. So, at Bell, you moved up pretty rapidly. You came in through the Sales side but in a relatively short period of time. What was the last role you ended up having? Jim: I was a General Manager inside Bell that served what was called Gateways. We delivered the hardware, software and professional services, even cabling and things like that, to customers. We weren’t in the core of the business but we served as a network provider to all the network salespeople selling various types of connectivity. We delivered the product that plugged in and used the internet and phone lines and whatnot. I was the general manager of that division. Laurent: Oh, so you made it work, all those promises from the other salespeople? Jim: Very good yeah. There is some truth to that. We all took on some heartache every once in a while, when the stuff didn’t work and of course, we blamed the network. Laurent: And then you decided to move on and start your own thing, is that right? Jim: That is right. It was an interesting transition. When it came time because the hardware space wasn’t a highly profitable space to Bell a decision was made by the new CEO that came in that if you weren’t hitting certain margins then the focus would come off. I didn’t agree with the position because I thought to control the end device whether it was a phone, a switch leading to a computer or when you controlled that edge that you had a much firmer grip on access to the most precious item: the internet and network. That is where all the money is and yeah our margins weren’t great as we were operating under 30% (in any given year between 25 and 30). Most of Bell would have been over 90 percent. Laurent: Really, that high? Jim: Margins on the network, because it had been there for such a long time, were that high. So when that decision came, it was just a good time for me to go. I had been there for 12 years. It was a good time for me to reach and I left on extraordinarily good terms. I worked with some people who were able to line up some things so that as I did leave and went to do work with Bell as our customer. Laurent: So Net6. Tell me a little bit about its setup and why you chose to go into that field. I mean it sounds like it was obviously a natural extension to what you had been doing and had experienced. Can you share a little bit more background on that? Jim: Sure, as I was leaving Bell they were doing some offshore work and completed some offshore setup in a far-flung region of India. They hadn’t gotten into North Africa or the Philippines yet. But predominantly in India and there were some good things that were happening there. We came back with a thought to say that near-shore work would be a better methodology and this was an idea not of mine but somebody at Bell. His pitch was to go to the Caribbean; same time zone, good education structure, good retention numbers and we could really affect and have a positive turn on GDP in some of these smaller Caribbean islands. He saw an opportunity to launch it. We were sitting there with the ability to build out the technology in Canada and to be able to float a contact center in the Caribbean. We went down, helped them build it out and got the network established between the island and back into Canada. We built redundancy in the voice switch and delivered a call center and we also handled the data, computers at the desktop and the connectivity back. That was our first step. Serving as a technology provider inside of Bell to deliver their own outsourced business processing. Laurent: Got it. So I talk to a lot of entrepreneurs and it’s always how do I take that first leap, how do I make that jump and set myself up so I’m not running out of cash. I’m not failing too quickly on the wrong things. What was your mindset at the time? Were you completely confident and convinced that you were jumping into something on your own, and that you had the ability to make it work? What did you do to prepare? Jim: Yeah so this structure was something that we kind of walked into on the technical side. So I had two partners, one was a guy that operated as an entrepreneur his entire career and he was in the telecom space, the other guy was tech at Bell. This guy left Italy when he was 17 to see the world. He didn’t speak English, moved from Italy to Belgium and then ultimately to Canada. He spoke French, landed in Montreal (at the time would have been the mid-70s and there was no work) so he moved to Toronto without being able to speak English. Ultimately, ended up at Bell and did 30 years plus as a really solid high-end technician while always dabbling on the outside doing some other stuff in his spare time. He was just a pretty natural entrepreneur. If you leave home when you’re that young it’s a pretty good indication that you’re going to press forward. So the three of us came at it from that. I was never concerned. All three of us had our own funding, I had just left Bell and was operating on a package that was very generous and of course, we were sitting there with a contract already in hand to deliver. So that part was easy, quite frankly, but you still only have a limited amount of time if you want to grow. Laurent: Sure sure. okay. Did it take longer than you thought to get to that point where your run rate could cover your expenses and you felt you were secure? Jim: No, it didn’t take that long to get to a spot where the three of us were profitable. Where it got more complicated was how do you turn this into a 24-hour, seven-day-a-week and not be the one holding it together. Me being the not-technical one had the least amount of worry about it because I could take a call at 2:00 a.m. but I couldn’t do anything about it. The other two had to deal with the brunt of that. We had to go from there to putting a network of people in place that could respond. We had the good fortune of having a network of people that we knew from Bell and from other telecom places, some retired, that could be leveraged to work for us as consultants and different forms of contracting work. We were able to pull in those resources even though they weren’t full-time employees, so we didn’t have to worry about paying benefits or any of that. We establish a network of these individuals to be able to serve our customers which then also allowed us to add additional customers along the way. The simple thing that we were doing was outsourcing technology mostly attached to the call center. And we were able to add more services to get more customers inexpensively through other products like phone system that plugged in over an ethernet environment. You could add Internet services to it and build from there and so we became a wholesale partner with Bell and at the same with Atria and Rogers. We even had dark fiber connectivity to a satellite provider. Laurent: Wow so it was truly your first customer’s funding that really allowed you to get all your follow-up customers. Was there an initial investment that you all put in? Jim: No it was that first customer that was the impetus. I mean we did put money in because we had to buy some technology to support but it wasn’t any heavy funding that came from us personally. It was all based on landing that customer and then be able to leverage that to add many other customers. We entered into the wholesale world which drove our pricing down across the board but increased our profitability. The answer to the question on “how did it happen as quickly as that” and “why did you feel so comfortable” is networking. All three of us had a network that was there to be leveraged and people that had confidence in us; they knew that we weren’t going to hurt them in the market and that we were all capable of delivering that service. Laurent: That’s excellent. Anything you would have done differently from that first year. Jim: Oh not in the first year, no. The first year was really good and really clean. We were head down getting the work done so yeah we could make sure that we were wrinkle-free heading into year 2. And that’s really where it became more complicated. You start looking and saying okay so we’ve got this and we’re fine but now we need to start paying ourselves a little bit. And you just start taking money out of that core to pay yourselves and that starts to hurt. It stops your ability to grow and so then you start getting into some much more difficult decisions. What’s next? Where do you spend your money? Laurent: How long did you guys wait before you took your first money out. A year? Jim: A year, yeah we were probably, this from memory, I’d say 14 months. Laurent: You’ve had such a great background between going up the ranks at the telco, starting Net6, and then going back to some relatively large brands afterward as GM of those businesses. What would be some advice that you would give to entrepreneurs or even business leaders? What are some of the things that have formed you as a leader that you are today who’s managed, I don’t even know how many people at this point. Obviously, there is very different advice to an entrepreneur that’s just starting out versus a seasoned executive but any words of wisdom that you would want to share? Jim: So okay let me tell you that I left that entrepreneurial world for a particular reason and it was due to some health issues (not mine) and some concerns that I had done well financially and so I had a fair bit to protect. So I decided that it was the prudent thing to do. I had gotten out of that three and a half years at Net6 what I really wanted. I wanted to see if it was a good way to do it so I did and then I sold out of it. The company ultimately sold all together but I sold my shares to my partners and they were very generous and gracious. Have good partners. If you’re going to have partners boy make sure you know them and make sure you know… like a good lawyer will say don’t ask questions that they don’t know the answer to… you better know the answer that your partners will give at any given time. You’d better know their character, you’d better know their quality and if you don’t, you’d better have the authority to make the ultimate decision based on the value of shares that you have. Or have very specific mechanics to ensure you can have the ultimate decision. That would be probably my big advice, know your partners and know that you can trust them. Laurent: Very good. Jim you and I always have a lot of fun conversations. You’re one of the most well-informed people that I know. I’m hoping this is an easy question for you but what resources can you suggest that people can go to for business knowledge? Are their books, websites or podcast that you use to stay up to speed and continue your learning? Jim: Sure so that is an easy one for me to answer because I don’t read any business books. I’ve never read any and I find them boring. I don’t find that they’re prescriptive at best and they provide antidotes to stuff that isn’t a problem that I have or I perceive to have. And I get that I don’t come at this from a typical business background. I don’t even know what that actually is. So I typically stay very up to speed on news. I always know what’s going on and I stay well informed. I know what’s happening in the world. I understand that different people have different views based on different experience and perceived things very differently. Whether it’s political or in business. I try to always understand why others perceive things the way they do and why do I perceive things the way I did. That informs me and that’s why I spend a fair bit of time knowing who I am and being self-reflective. I ask myself questions all the time…okay why did I ask that question… why did I answer a question that certain way. I try to be self-reflective. I consider probably the best business book that wasn’t a business book that I’ve read was Michael Lewis Moneyball. Actually, the name of the book is the Art of Winning an Unfair Game, I think it’s “Moneyball – Art of Winning an Unfair Game”, is the name of it wholly and completely. It teaches us that just because history says so or just because that’s the way people presented it doesn’t mean that’s right. In fact, it’s probably been sitting that way for such a long period of time it’s wrong. And it wasn’t so much that it was an unfair game, it is just people didn’t understand the rules that were being played. The game that was being played based on the rules and the rules weren’t really informing it. People had imposed these rhythms and rules to a game that didn’t even apply. And that sits out there in the business world. People make instinctual decisions on what they believe are our instinctual decisions. They look at data to the point where it satisfies them to say that I know what I’m talking about because I can see it here. And either they didn’t read the rest of it or found a statistical point that proves what they were looking for. Look for the contrary stuff than what you know: what your background and experiences are. It’s pretty simple stuff but you know I can guarantee 50% of the world look at things differently. I know for sure I’m one of eight people that grew up with a similar experience to me because they’re my brothers but my sisters certainly had a different upbringing. One flaw of business decisioning is people making assumptions that others think like them across the board. Just because you have political alignment with somebody doesn’t mean you have alignment on anything else. It’s just you came to the same conclusion but perhaps for completely different reasons and so you really have to consider how others are perceiving and how you’re looking at the game. So it wasn’t really an unfair game when you’re talking about Moneyball – the game was fair it’s just the way that everybody was looking at it. It was unfair to that person that wasn’t being looked at because they were 25 pounds overweight or they threw the ball in an odd manner or that they couldn’t hit for average but they were getting on base. The game was rigged against them because of the lack of leadership. And it almost always comes down to lack of leadership and middle-aged white men perceiving the world in a very particular way and forgetting about huge parts of the population that don’t look or sound like them. I have a pretty broad spectrum of people that I pay particular attention to and I watch their behaviors and understand the things that they do for their successful approach. I love good podcasts and just generally good information. I find it in lots of different ways. Laurent: Perfect that’s fantastic. I’ll talk to you after the fact we’ll put some speakers notes together on other podcasts that you that you’ve listened to or that you would follow. I think that’d be a great resource for everybody. Jim, I can’t thank you enough for your time today. This was hugely valuable. I’m looking forward to putting this all together and posting it in the near future. If somebody wants to reach out to you or do you want to do a shout out about your current engagement right now? What you’re working on. Jim: Sure but let me give you one more thing before we do that. One other resource and I had the privilege of having is a father-in-law who was the Deputy Minister of Education in New Brunswick. He achieved the highest level of education and leadership in that world, in that province and he was also voted the top influential educator in the world and got to travel to do that. His first message to me as I stepped into a leadership position, and this was of over a year so I shouldn’t say the first message, but the first thing that I really understood was that he said “what comes onto your desk should go off your desk quickly. Don’t hold it.” What he was saying was, in a meeting, as a leader if you’re this smartest guy in the room you probably should find some other people to come into the room (or the most knowledgeable is probably the better way to look at it based on what the topic is) and really I’ve never found myself to be that. I’ve always known that there are people in the room when I’m meeting about something who are more knowledgeable than me about the topic and that’s what you absolutely want. The idea of “what comes onto your desk should go off your desk” and it should go onto the desk of that more knowledgeable person that can execute on it. And if there isn’t a person that you can put it on their desk then it’s bloody important so deal with it. Don’t leave things on your desk. And he was thinking of that literally because he’s older so he wasn’t thinking about email. He wasn’t thinking about other messaging platforms; he was thinking about literally things that came into his in-basket and then went to his out-basket. He did at the end of his career, of course, start dealing with email. That was really important. If you accept something into your world, deal with it. Either deal with it by putting it with the right person or sending it back to the person that sent it to you in the first place. What’s left is plenty well important so you really better deal with it. So, what I’m doing now is that I’m the managing director and have the privilege of leading a team here in Canada at Sterling Backcheck. We have our own brand. We roll up into head office in New York but we have full autonomy here in the Canadian market to make decisions and care for our customers in our own very particular Canadian way. We have a team of around 600 that service our customers. We’re in the identity, employment verification, and pre-employment verification world. Not just pre-employment but we also do verifications for existing customers that have sensitive employment subjects and identity verification needs. We use high-tech solutions in some areas and low tech in others to deliver our services. So if you’re looking for us you can find us at sterlingcheck.ca. Laurent: Perfect. Very good. We’ll put that in the show notes as well. Jim thank you again. I really appreciate the time you took oday and I can’t wait to get this posted and get some feedback. Hopefully, we can connect again in a few months or years to see how things are going, see if maybe you started some other entrepreneurial engagements between now and then. I look forward to continue to connect and thank you very much for taking the time today. Jim: Thanks a ton. Bye for now. Outro: Thank you for joining us on this episode of the Mad Profit Podcast. We hope you enjoyed the show. Don’t forget to subscribe on iTunes, Google Play or the listening platform of your choice. Also check us out at MadXCapital.com for more useful information and resources to help you achieve your investing, entrepreneurial and business goals. See you next week on the Mad Profit Podcast |