In Parts 1 and 2 of the interview, Allen and Mary recounted the history of Beck Consulting. The conversation now turns to the development of the company’s software solution, finding the right people to continue their legacy, and why the food industry presents such a great vertical focus.
Beck Consulting: The bc products, bcFood, bcERP, etc. When did you actually have a formal product that you were offering? “This is our food product or our ERP product.”
Allen Beck: We built a lot of pieces, and we utilized them in our marketing and sales because we knew that they were unique. I shouldn’t say 100% unique, but they were relatively unique to the food industry, and so we thought it would be easier to market to that and call it a food product. Well, it really wasn’t a product in the truest sense of the word. It was really a bunch of pieces. But of course that’s what NAV has always been in many ways. But when we started with SunWest Foods, and the scope of their project was big enough and they had enough new things that they wanted us to do, like the pack-outs on the trucks, and they said, “Well, gee, now we want to take a picture of what the packed truck looks like before we ship it. Can we integrate our camera with it?” and that sort of thing.
Mary Beck: And there were different things in the lot traceability, with the quality characteristics-
AB: Right, which we had done in other engagements, but really, it was not a cohesive-
MB: It was like we started pulling together other pieces. And the other thing that I wanted to really move into was how to handle warehouse stuff because, I said to [Allen], like the Lanham product, “I’ve heard too many complaints with that, but we need a product we can integrate with.” And dealing with having the handhelds was a big thing. I said, “That’s what we need, something in that direction. We either need to develop our own or we need to find a partner. We have to go one way or the other.”
AB: And we basically showed it to the Microsoft people, and they went, “You can do all this stuff?” We said, “Yeah, we can do all this stuff. We’ve been doing it for years actually, but this is in one code base.” They said, “Oh, you need to get that in the product catalog,” and we did, slowly. Yeah so, that was the whole thing with that. Then we started doing a whole bunch of things. The whole EDI area. We had been involved in EDI for years, actually from the Macola days, with SPS. SPS used to be called something else. I can’t remember what it was. It was their predecessor that we actually used years ago with Ghirardelli. EDI then was one of these mumbo-jumbo mystical things that evolved from the mainframe environment. It was so kludgy, but we had to deal with it because more and more people started using EDI for all sorts of things. Originally, it was Lanham that had the EDI product. We competed with them because we had used their code on a couple of implementations and [our developer] Anthony was trying to support their NAV code. One day, he came to me and he said, “This is just a mess,” or words to that effect. That’s really what got us started down the EDI trail. It was the same thing with the shipping stuff, too; our frustration with shipping applications.
MB: We finally just got fed up with trying to deal with other third-party partners. It’s like, “We need to be able to check that box, and if we can’t check that box, we’re not going to get those deals. We might as well deal with it ourselves to get this accomplished and know that it will work.” It just very gradually evolved.
AB: Yeah, it evolved. It was not an a-ha moment.
BC: So it was not a conscious decision to say, “We’re going to create a food vertical or a food product or an EDI product?”
MB: Well, we always said we were in that market, and I think because we just kept doing things for that market, it evolved. But I think it was with Bruno and Dirk that we finally said, “Okay, even though we’re known for being in this market, we need to have it be more of a product that people see it as.”
AB: Well, the whole NAV business, the whole software business, in many ways, changed because going back over what we had said earlier in terms of the evolution of not just Beck Consulting but the whole PC-based computing model, was that it was very general to start out with, and then it expanded into other areas. But any early developers of vertical applications, they were all glue-ons. They all sat on top of something else. They were all very distinct. BatchMaster, classic point. Classic application, from the standpoint of a glue-on, BatchMaster ran on Great Plains.
MB: That’s how my Magic Software order entry worked, too.
AB: Yeah, GL, AP, AR systems. While it addressed certain industry requirements, it was no stronger than the foundation that it was built on. All those applications had relatively mundane inventory, they didn’t have real robust inventory systems. They didn’t have a lot of the key data fields that you needed as part of your item master, for example. They didn’t handle a lot of things. These applications would say, “Okay, I’ve got item number and item name, and my unit of measure and all this standard stuff.” Oh, but in the food industry, we need this sort of thing. Well, so that got built out here in a database that was glued on, so their application bridged these two pieces, which was fine. It addressed a problem, but it created a problem, too, because now in reality, I have two databases, and I have, really, two applications. So what classically happened then is, we need to upgrade this, or they made a code change. Well, something over here doesn’t work anymore.
MB: Like when I did Hilmar Cheese, I used basically the same order entry front end that I’d done at Ghirardelli and at Fantastic Foods. Hilmar Cheese wanted to talk, so I showed them that part. They really liked that, but they needed two things that were different from the other ones. One, they had customer preferences. It was that, say, a certain lot number’s salt had to be at a certain level because that customer used that ingredient in something and needed it to be a certain spec. So I added customer preferences to sit on top of that, but in addition, I had to add lot numbers, because Macola didn’t have lot numbers. So yeah, it’s all in this other table that’s not part of Macola. It was a separate table, but it worked quite well. Then we got into the Navision world and I knew we could start adding that, so I started teaching the guys about customer preferences. At some point we needed to be able to have a handheld and scan, “I want to pull that pallet,” and it will automatically assign those lots and blah, blah, blah. It was experiences I’d had already that I could then say, “This is what we need. We need this.” I looked to see if there were third-party warehouse applications I could tie into Navision and other than Lanham, which I wasn’t happy with, there just wasn’t a good fit. That’s when we all started talking and said, “There’s really only one way to go.” We didn’t call it “bcFood” at that point. It was, like, “We need this if we want to get into these kinds of deals.”
AB: Yeah. It was the same thing I think even before we started doing that. We were actually selling our EDI add-on through other partners. We kept refining it and kept refining it. That was when Bruno said that he wanted to start doing sales. He literally came in to my office one day and said, “I want to learn to do sales.” You could have knocked me over with a feather. It’s like, here’s this guy that’s just-
MB: As technical as he can be.
AB: Mr. Hardcore Technical, and at that time, his social skills in terms of dealing with clients were limited to very technical topics. Our attitude was always if you want to try something here, this is the place to try it. You fail, that’s okay. You can do that. It’s a learning experience. Bruno got a little bit more in tune with what marketing was and what it wasn’t and what it was designed to do and what it wasn’t designed to do. That’s when we started thinking, “Well, we’ve got to differentiate this stuff.” That’s when we came up with the bcEDI thing, and then of course the bcFood fell into place after that, because we were trying to come up with a name that really wasn’t long or anything else and because we were using “bc” as part of the logo on things, it’s like, “Okay, well, that’s natural. Why didn’t we think of that?”
MB: In the meantime, back at the office, Dirk was taking over all the operations stuff for me, and that was just going beautifully. I mean it was so much less stressful for me, and he was doing a fabulous job of it. Of course, because he was looking at the change orders, with his depth of knowledge, I think that whole process got much more accurate and with better delivery. Between Bruno taking over in sales and Dirk taking over in operations, I mean that made it where we had the confidence to say, “Yeah, this is going to work.”
BC: Did you at that point have a plan in mind for retirement?
MB: At some point we did want to ride off into the sunset, and my ideal would be to have some of the employees buy us out. That would be my first choice.
AB: In the meantime, we’d had a lot of other people make a run at us.
BC: Outside organizations?
AB: Yeah. SCS had. Aston Group had. Who was the group from Iceland?
MB: Oh, I totally forgot about them.
AB: Those are the ones that were actually the most serious. We’d been offered a lot of money. Yet, it was sort of like, “Oh, this isn’t a good fit.” We didn’t have a real exit strategy. Then one day, Bruno came in to us and said he and Dirk had kept in constant contact. He came in to both of us and said, “Dirk and I want to buy the company.” We said, “But he’s not here.” He said, “Well, that’s the snag. We’ve got to get him back.” That took us, what, a year and a half? A year and a half, two years.
MB: Maybe more. But anyway, Dirk got back, and we were like, “Okay, then we’ve got to start doing this. You take over operations.” Bruno wanted to get into sales, and had been doing some of that, I think.
AB: A little bit, yeah.
MB: But that was the idea. Bruno would take over Allen’s side from what we did day in and day out, and Dirk would take over mine. And I would teach Kristin and Sara the accounting. We all agreed that would be the last thing. “Dirk does the operations, Bruno does the sales and marketing, and once we see that that’s in place and we know you can do it, then great, we’ll start the next thing with the transition of accounting.” They did a fabulous job.
BC: Do you think that when the time comes, they’ll follow your lead?
AB: One of the things that we tried to tell them was that the mistakes that we made, in terms of planning for succession and that sort of thing, had a lot to do with the talent pool that we had, or didn’t have at various times, and their relative strengths and weaknesses. You can’t, honestly and ethically, sell the business to a group of employees that don’t have the skill set to continue to maintain the business because you set them up for failure and you have to live with that.
MB: And not everybody wants to lead. Not everybody wants that level of responsibility. So at the time that Bruno and Dirk are thinking, “Okay, in five years, we want to retire,” if there is not a group of employees that want to be entrepreneurs, they’re going to have to let it go to another company. Because if Bruno and Dirk hadn’t stepped up and said, “Yeah, we want to do this,” we wouldn’t have really had a lot of choice.
AB: We were entirely candid about where we always were financially, and there weren’t a lot of secrets. Everybody knew what was going on, and everybody knew what there was from a work standpoint.
MB: We used to, quarterly, whenever, when we did the business meetings, we presented from the gross margin up how we were doing. Good, bad, and ugly. I mean I’d explain each line. It’s like, “Recent sales are down.”
BC: They still do that to this day.
MB: And I think it’s really important because if people see it’s going down or, conversely, going up, you need to be able to explain the why’s, what’s going on. People need to really understand because it’s not just us. It’s our industry. It can be Microsoft. It can be food processing. I mean I was concerned a ways back, like what’s going to happen if there’s a drought in California? What’s going to happen to food processing?
BC: I remember back in, was it 2008, 2009, the recession?
MB: Oh yeah. That was huge. We were lucky that it didn’t hit us harder because we were well-positioned.
AB: Especially from the food standpoint. We realized fairly early on that even back from the Macola days that food, especially the primary levels of food processing, was good because everybody needs to eat.
MB: As opposed to one of the other verticals. For instance, we had a good opportunity in the Macola days to get into construction, because there was a lot of need for good job costing, construction-oriented software. I looked it up and said, “You know, the problem is that industry goes [in cycles].”
AB: Huge cycles.
MB: There’s big money in that, but it’s up and it’s down, and I don’t want to be on the down side of that because, then all of a sudden, we’ll be out of business. Whenever we looked at a vertical, we looked at it from, “Hmm, what’s going to happen when a recession hits? What’s going to happen to that one?”
BC: What other verticals did you look at?
MB: Well, let’s see, besides construction, we did do a lot of nonprofit things. We had the California Chamber of Commerce as a client. KQED, that was the radio station or TV station. We had a variety of those kind of things. I know we had opportunity to think about retail stuff but I kind of didn’t want to do that. Again, that’s a real up and down kind of thing.
AB: There was somebody that approached us with a jewelry vertical.
MB: I wasn’t interested in that. It had to be somewhat interesting, too.
AB: And we screwed around with that forklift, the heavy equipment.
MB: A heavy equipment vertical that was in Navision.
AB: Equipment rental, that was one. That was a big market, trade show stuff. Trade show management software.
MB: Like at conferences where people would ship in all kinds of equipment for conferences and conventions. A lot of that went away after 9/11 because all of a sudden, people didn’t want to fly so much. There was a real fear for that. It was going great guns for quite a long time until 9/11 happened. Do you remember all the lead up to the Y2K with the “dot-bombs?” Oh my God. Some of these people we’d go talk to, they didn’t have a clue how they were ever going to make money ever, but they “had an idea.” Like pets.com, they were big. I was out doing the CDI stuff, getting them live on their system, but Allen, you guys did a huge project.
AB: In six months, they probably paid us over half a million dollars. It was a big project for 1999 or whatever that was.
MB: Yeah. It’s like they just would give the money away. Some of these others that, well, we never had them as clients because I think they thought we were crazy and we thought they were, they didn’t really believe in accounting processes and procedures. “That’s really old school.”
AB: They didn’t like the questions I would usually ask. “How do you expect to make a profit?”
MB: They were not fun to talk to. I just wanted to go back to the cows, the dairy, and to the food and the chocolate. It’s like, “Get me away from these people. They don’t have a clue.” It just seemed like my background was way back from this, and let’s just stay with food. I like food people.
AB: They’re all good people. They were all happy to operate on the handshake. It’s what we grew up with. “My word is my bond,” sort of thing. Like I said, we figured out that, “Hey, it may look like food processing to you, but it’s our bread and butter,” pun intended.
MB: We enjoyed it. That’s the thing; I really did enjoy what we did for a long, long time. I think CDI burned me out, and that was a problem. And we didn’t take enough time off. Allen and I worked, I think, too many hours, so we didn’t take the time to do vacation. For instance, well, I had billing and then I turned around and in X amount of time I had to have payroll done. I could take a week off at a time, but I could never get away for more than a week. Billing first then right after that, payroll. I could get away for maybe 10 days. But I think, literally, in that whole timeframe, until Dirk took over operations from me, we took one two-week vacation in that 25 years. That’s the one, I think, kind of regret, that I didn’t really take the time to-
AB: We didn’t have any time.
MB: Yeah. I think my regular day was at least 10 hours. I got to the point by the time that the guys were done, I was just damn tired. It wasn’t that I didn’t want to do it so much as I felt like, “If we don’t stop working, we’re never going to go do some of the fun things we wanted to do, and we’ll never get to do any volunteer work and all these other things in life.” It just seemed like it was time for us to do more stuff. And parents were adding more and more and more to the days. So it was just time.
AB: You’d think that the standard 24-hour definition of a day was, that was it, it’s an absolute, but those days seemed to get longer.
MB: But that’s why I kind of did a bit more lecturing with everybody else. It’s like, “Don’t do this.”
AB: “Don’t fall into this trap.”
MB: Yeah. But for a long time, it wasn’t like that. It got to be like that later. But I still, I really enjoyed it. It was a great profession. It was a great run, but I was ready for it to be done. But now, the thing that I miss, I still miss the camaraderie that I had, and I miss going out to those new prospects and walking through manufacturing plants and learning about businesses and what they’re doing and what their problems are and thinking about how we could fix it. I do miss that. I thought that was a lot of fun.
AB: Yeah, it was. That’s what I told Mary when we first started doing food processing. I said, “This is kind of interesting.” The first time I remember going to a manufacturing plant of any sort was probably when I was about seven years old. My father was a veterinarian. He took me out to a rendering plant with all these dead animals, but it was fascinating. (Laughs) It smelled like Hell, but it was fascinating. Then literally across the street and down the block from his veterinary office was a turkey processing plant. One day, he said, “Would you like to go see how they do turkey processing?” and I mean literally walked down across the street and went into the president’s office and said, “Can you show my son through the plant?” That made a huge impression on me. I was, like, “Wow, this is really cool to see how they do all this stuff.” Then later on, when I was a little bit older, I got involved, because I was in 4-H, in a…it was like a class put on by one of the local dairy processors that taught you how to identify and judge milk and milk products. This was in the processing plant, so the first thing we started out with was a tour of this milk processing plant. I look back on it, and those experiences made a huge impression on me. To me, that sort of thing, seeing food being converted from the field, if you will, into something else, to me, it was just fascinating as a kid. It has always stuck with me. I always wanted to go through manufacturing plants, always.
MB: And we’d always ask to go through.
AB: Anytime, the first thing we’d say is, “We want a tour.” I guess it was like even if they’re a crappy prospect we still want to see.
MB: It was interesting for us.
AB: It’s not quite as fun as Disneyland, but in other ways, it’s better.
MB: Oh, I’ll never forget Ghirardelli! It was just fascinating watching the chocolate chips being made because this depositor would go down and drop the chocolate into place and then do this little thing to make that little twirl at the top. Then something else would slide and more chocolate doing this little twirl and I think I just sat there mesmerized by it for a minute or two. They’re, like, “Come on, Mary! Let’s get going.” I used to love watching the manufacturing stuff. I like watching all the milk processing and cheese and that was always interesting too, but chocolate was the most fun. Who could not like that?
BC: So it sounds like you want to go back…
MB: No, I’m still enjoying retirement. Like I said, I miss that, but there’s still good things we’re enjoying. We’re enjoying our volunteer work. I do enjoy having very nice long mornings with my coffee and puttering around on my computer. Then when I get around to it, I get my exercise. Most of the days are, be busy in the mornings and then learn something in the afternoons. I’m doing good. I’m not bored. Maybe if someday I get bored, I might approach Bruno and Dirk and say, “Hey, you want me to go back and do this?” I might, but by that time, my God, I’d have to re-learn the software.
In Part 4, Allen and Mary talk about what is needed to successfully manage a “lifestyle company” such as Beck Consulting.