 Good afternoon. It's May 24th, 2018. My name is Ray Tsuchiyama, guest hosting for Reg Baker, to show that it is his, actually, business in Hawaii. And I'm continuing his series, really promoting great entrepreneurs in the state, trying to really grow business using all kinds of tools. And today we have Ricky Zhang, who is the president of ZR Systems in the business category called IT. And Ricky, welcome to the show. Hi, Ray. Thank you very much for having me here. Appreciate the time and air. All right. And so, Ricky, you're like an entrepreneur. You started out, like, by yourself, and then now you've grown the company's ZR Systems to, like, 20, 21 employees over 12 years, from 2006 to now, 2018. But where were you raised? Where were you and your education background? Tell me some of the steps for the audience, how you got here. Okay. Well, my family and I, we immigrated here from China when I was three, grew up pretty much in the Honolulu area. McKinley Tigers, classes of 97, from there went to UH from undergrad, went to California for a bit to study tech, decided to come back for my grad degree at UH at night. And did you ever feel as a child or later in college that you wanted to start your own business? You know, people always told me when I was young, I always had an enterprising mind because I was always trying to figure things out. But I think it was, you know, half innovation, half just being lazy and trying to figure out how to cut corners. And I guess that's, you know, the key to being an entrepreneur. But you did work in other jobs before starting your company? Yes, yes. My first job was actually at a major local restaurant chain when I was 15, where I started from humble beginnings as utility, a.k.a. janitorial services. Since then, you know, I've told myself that's kind of not where I want to be. And so how did you get into starting your business? And tell me, first off, for the audience, and they want to know, what is your product and who's your customer? Okay. I guess we can start off with how my business started. Okay. So at the time I was working at the university, I was about to graduate. They had some side jobs here and there helping other people out. And when I graduated, I decided, you know what I want to do? I want to quit my job. Of course, most people, like my parents, weren't totally excited. We just spent eight years in school. But from there, it just, from the network I built, from previous projects, I started getting phone calls, and it just kind of started from there. So you have an MIS background, right, that just studied at the UA. So you were interested in computers anyway, way back. And did you play around with games or computers with your family back when you were a child? That was your start in all this? So my brother, he's six years older than me. Back when I was about six or seven, that's when IBM Clones came out. It was the next big thing. I thought it was pretty cool to play video games. So when he wasn't around, I kind of tampered with his computer, ended up breaking the floppy disk. From there, it was like, I got to fix this. And when I got it working, it was like, wow, this is pretty cool stuff. So that kind of started me in the whole troubleshooting phase. But then growing up, bulletin boards, you were familiar with those. Right, way back. Yeah, yeah. So you would call it a dial-up modem. That was the beginning, I think. And then when I started making friends with older people, the university started offering free internet service. When I got a hold of a dial-up account and I got on the internet, it was like, wow, look at these things I could do. Yeah, yeah, yeah. It was an interesting kind of way of getting into the business. But you really started out just excited about putting things together and so forth. Troubleshooting, computers and bulletin boards. I used to work very well, in fact, early, how to internet, how to get people together, communities, bulletin boards and so forth. And then when you quit the job and started your own company, your own job, what did you do? So I helped a lot of businesses, a lot of smaller ones in the beginning, put in new systems, just like a server or application. And at the time, it was just fun for me. So I never thought about the business side. It was pretty much, hey, pay me what you thought was right. And it got me pretty far, but eventually you get to the point where, hey, I want to have two hands. So it wasn't until a few years into where you got to really figure out what's my business model and how do I expand from here. So you started out like a normal hobby, helping your friends, right? Troubleshooting and kind of fixing their computers and so forth. And so how many years passed before you hired your first employee or got people together? I'd say about three years into it. I hired my first employee. That was a game changer. That's when you realized that it's not about managing technology anymore. It's about growing people and managing people. And that in itself was a whole new learning experience. And you have to meet Payroll. That too, right? So many of your accounts or companies, your customers in the beginning, are they different from what they are today? Well, I can tell you most of the people I started off with, a lot of them are actually still our clients today. So it's been exciting watching them grow. And the ones that aren't, you know, we still talk and help each other out. You know, otherwise it's only a small community. But I guess your question about helping them grow, yeah, I mean, our business model has always been learn the business and become a partner with you and grow with you. And so far, I think we've been doing pretty good in that. Now, let's go back to what you just spoke of. And we were talking before on sitting down with the customer. You know, even before they become a customer, you're really communicating and having a conversation about their business and to understand their business. Why is this so important? Well, Ray, we're not the best fit for everybody. And they might not be the best fit for us. For me, it's very important that we sit down, get to know each other, learn about your business and see how IT can help you. It could be that we're a good match, but maybe you're not ready yet. So the more we talk, the more we engage before we start. I think it's a great way to setting the expectations and making sure that we're successful in the long run. So when you have these conversations and you're learning about the company, does it matter if the company is in hospitality or retail or restaurants or other IT, does it matter at all? Or you have a niche that you would like to focus on? So when I first started, when I was working at the EWH, a lot of the work we did was with the healthcare industry. So I started helping some doctors. And from there, we kind of just grew and we became almost an 80% healthcare shop. But to answer your question, no, I mean, it doesn't really matter. If you use IT, if you even touch technology, then we can probably find a way to help you out. And when you say IT and technology in healthcare, which is different than retail or restaurants, but there are applications that kind of organize their business, their records or organize their accounts receivable and so forth. So what you're offering is it only the software side of the applications or do you help them out in ordering the hardware configuration? Good question. So a lot of IT shops or people that claim to be IT shops basically they repair or they sell your equipment. What we try to do is we try to look at IT as a tool to help improve your business. So unless I understand your business, I won't be able to help you. I'll just be selling you things that you may not need. So once again, it's very important that we sit down and discuss and really understand what we're trying to do here. So it doesn't matter if a company is huge or very tiny. What is your sweet spot of a company that really can leverage what you have to offer and to really get IT as a tool to help them? Is there a 10 to 20 million or under 10 million? What is the number of employees? Is there any kind of profile that you say, oh, wow, you're the right profile for my company? Right, right. That's a very tough question to answer because in the past we tried to see which would be the best fit, but what I've noticed from my experience is it's not really how big you are, it's your reliance on IT and how much we can help you with that. So I mean, there's a lot of small companies that totally rely on IT. We can make a big impact. There might be a big company, you might have average employees, but maybe you never use a computer. In that respect, there's only so much we can do for you. So it depends, like you said before, that you go in and really talk to them about are they using IT at all or did they think of using IT? But what is their standard operating processes or procedures? And if it's so old and old fashioned, maybe they can't use IT. Right, right. Now, in your work and you've been dealing with many, many customers now, can you tell me of a story that you can tell me? Ray, this is a case story that I want to talk about. You don't have to say the name, but that was very successful that you see it was a win-win. Ooh, okay. Where should I start from here? So I would say let's talk about the small businesses. I think Hawaii was built on the backbone of small businesses. Of course, yes. We stepped into an organization where they weren't exactly getting the service they got from their provider, antiquated equipment, had a lot of weird ways of doing things. Like the simple print job took many clicks and typical Hawaii, you know, people don't like the government will complain. They like their IT guy and everything was fine and dandy. But what I really saw was they weren't able to do their function. You know, I mean, things weren't getting done on time. Their business, their daily business, right. Okay, it wasn't efficient. It wasn't efficient, okay. And there was a lot of holes where things could go wrong. Unfortunately, it wasn't until something actually went wrong until they contacted us. And when we came in there, we basically took a look at everything they did and said, hey, you know, a lot of things you're doing right now we can fix by simply changing something here or tweaking something. Or a lot of times it's removing IT. Oh, just like, yeah, yeah. Technology's an interesting thing, you know. When it's helpful, it's helpful. Other times it's just there to be cool. But it's an obstacle to really being efficient. That's what you're saying. Correct. Okay. Now, when you went in, like you say, how do, do you have a, when you say Hawaii organizations, some kinds of, I would say, worst case kind of things that Hawaii people or CEOs or CTOs should be doing and they're not. Overall. Right. So is there anything that you see in the future that it really is something that you say, wow, if more companies are using it, it could really transform their business. What is that? Well, I mean, right now the bus term in industry is cloud and clouding itself is a very mystifying concept. But I like it because I think it really gets people to start thinking about the future and what can it do. And the wording is cloud computing, right? Cloud computing. The total term. Correct. And I've heard about it a lot and I think many of the big companies is that only just for big companies, I would think? Well, cloud's actually evolved quite a bit these days from a single user to a large company. I think anyone can leverage the cloud. Now, when you say the cloud, what are two or three advantages for organization to move into a cloud computing model for their organization? What are they? Okay, maybe, let me kind of talk a bit about cloud. So just to clarify a bit because I think there's a lot of definitions that we talk to. When I hear cloud and a lot of people, they just think cloud means an application on the web. Right, right. But it actually means a little bit more than that. But to simplify things, you know, just a cloud means you're running your services and your servers in somebody else's data center. Let them take care of it, right? Now, we're going to come back to that and think about, let's think about this some more because I think this is a innovation that will impact everybody in the future. And I think you're on the leading edge of this. This is Think Tech Business and I Why and we'll be right back. I'm Ethan Allen, your host on Think Tech's likeable science show. Every Friday at 2 p.m., we delve in the magical, magical, fascinating world of science. How science applies to your life. Why you should care about science. What impact science has on you and on those around you. Why you need to know some science. It's a fun, interesting, painless way to learn some good science that you can use. See you there. Hi, I'm Yukari Kunisue. I'm your host of New Japanese Language Show on Think Tech Hawaii called Konnichiwa Hawaii, broadcasting live every other Monday at 2 p.m. Please join us where we discuss important and useful information for the Japanese language community in Hawaii. The show will be all in Japanese. Hope you can join us every other Monday at 2 p.m. Aloha. Good afternoon. And we're back talking about cloud computing. And as Ricky Zheng, the president of ZR Systems has been talking about, there's a lot of misconceptions, various notions and terminology flung about cloud computing. But I think business really has to focus in. What does cloud computing mean for their organization and how can it bring benefits in security, flexibility, accessibility for multiple devices? And this is where we're going to begin our second half with Ricky, who is our expert in how to leverage IT, but at the same time really bring productivity to small to medium sized businesses throughout the state of Hawaii. Ricky, we were just talking about you're talking about cloud computing, trying to define it in a way that really makes sense for the CEO or CTO of a small to medium sized business in Hawaii. What are they? Okay, so to recap and simplify this whole cloud concept, it basically means let somebody else run the backend and let us just run the applications. That in itself, it's depending where you talk to, it's a really good thing or it's a really bad thing because you have no idea what's running on the background. So instead of drilling down all different cloud options, let's talk about the benefits. As you mentioned, the three benefits. First one is flexibility. Second one is accessibility. And the third one is security. So accessibility, actually let me go back to flexibility. What does that mean? So cloud in my mind means you should be able to scale up or scale down whenever you need to. So you're a CPA firm, tax season, I want to hire three people, scale up your compute power, bring in some PCs. When they're done, scale back down. Instead of buying everything, you're stuck with it for years. Exactly, exactly. And along with flexibility means that you should be able to pay according to what you consume. Second one is accessibility, meaning that you should be able to access it from anywhere. And this means mobile or tablet or laptop or PC, right? Correct, correct. And the internet and speed increases and everything really made this possible. So I think that's why a lot of times people think cloud, they just think it's an online app. But it actually goes beyond just that, right? So your cloud could be your email services, could be your web, could be applications. But some people when they talk about security don't want their data to be in somebody else's hands. How do you kind of deal with that perception? So as I mentioned at the beginning, right? Running cloud means having someone else manage the backend. So it's a big scary thing for a lot of people, right? You don't know what's going on there. So number one, you always want to find a reputable vendor. That's why there's public and private clouds. Also with the cloud, you got to make sure that you secure not just your cloud apps but also your endpoints, right? Things that were benefits before could not be weaknesses, right? The fact that you're accessible from any device, anywhere in the world means you got to make sure you know who's on your system. So you not only have to think about security, you have to think about security in a broader sense, about the multiple devices also. But at the same time, you get out of that, you're not going to be worrying every day about the things in your shop. There's somebody else managing that for you. Am I correct? Correct, correct, yeah. So I think a lot of companies out there, especially IT companies, they might feel threatened by the cloud because they think my customer is gonna go cloud, they won't need me anymore. What am I gonna do? I see it as the opposite, right? Now that we can't forget about the infrastructure, let's help the customer manage their end points, their applications, their workflows. How do we make their business better with cloud? So they can really focus on what makes a business productive or more efficient, and they can really take a look at is IT really helping them? Do what they can do much more efficiently. And I think that's a key point because when I worked for MIT, one of the great mysteries in a great study during the 90s was that, why with so much IT coming into organizations, productivity did not rise. And one of the reasons why was that managerial kind of reporting and organization had to change in order to use or leverage IT. And I think you're correct that they have to do really a great bigger audit of how they use IT, and then that will sharpen everybody's skills. Right, right. So what I always tell people is, when you want water, you turn the tap, you get water, you're good to go. You don't care about the plumbing, you don't care about infrastructure. So with IT, why do you want to be concerned with everything in between? I mean, that's not your job, right? Let us help you figure out what kind of water you want, when the temperature, which rooms you want it in. Well, that's very efficient. Now, you talk to a lot of IT managers, CTOs. Tell me what the three mistakes that people that you encounter really should not be making or should not be, should be avoiding when you talk to them. I think the first one would be the tendency to either over plan or under plan. When I say over plan, I mean, okay, you have a five year plan in IT, that's 50 years. Okay. So at some point, if something doesn't make sense, you switch gears, right? On opposite side, here's the under planning. I don't have a budget, there's only so much I can do, I'm gonna wait. You can't do that either, right? You gotta keep staying on the foreground, what's coming out next. The second one would be focus on the business. I mean, at the end of the day, IT is there for the business. If you don't focus on the business, you're nothing but overhead, right? And the last one is, and it's a very important one is get buy-in. Where do you get, who's the buy-in? Where do you get that? Buy-in from employees, from team members, from shareholders, from customers, everybody, right? You know, a lot of times the CTO, maybe the smartest guy I think he's the smartest guy in the company, and he says, this is what we gotta do. But if the guys don't buy into it, it's not gonna happen. No, nobody uses it. I have been in many organizations where they introduce the latest ingredients and sales force or all kinds of productivity tools, nobody uses it. And you're correct that IT has to be launched with everybody's buy-in. And you're absolutely right. Why is it coming in? Because it will add to my bottom line kind of thing, employees, employees, employees. Now, you're getting back to the beginning of the show where we're talking about your entrepreneurial vision and so forth. Where do you want the company to go in three to five years? What's your vision? You have 20, 21 people now, and I can see you're very innovative, you're scaling up. Where do you see yourself and the company? Well, first and foremost, if you notice the story of me raising up, I always ended up back in Hawaii when I were another. So I would really like to see a company that could deliver an IT service, an actual product out of Hawaii. So for me, that's a big thing. And you mean going to the mainland with the product or globally, right? Exactly, exactly. I would love a building and it could be a real building or it could be a virtual building where we had people from all different specialties getting deep in things that people need for business. I feel like in Hawaii we outsource a lot of things. IT doesn't need to be one of those things. Now, do you have a philosophy? When you're scaling up, like you say, one of the things that you encountered when you hired your first employee, you had to manage them, you had to mentor them, you had to really get them going in the right direction and do the right thing. For yourself, what have you brought into yourself, into your mind that has helped you a lot? I mean, growing up and just doing business, you run into a lot of different mentors that give you different pieces of advice. One day, a guy told me, Rick, there's only so much you can do with a pair of hands. And that's when I realized that's absolutely true. Oh, that's good, yeah. So how do I expand my reach, right? Thing number one is you have to be a good coach. You gotta be able to take people. You don't have to be a smartest, but you need to find a way to make those guys smarter and better than you. Because the better they get, the less you have to work, right? So you have to get over that ego part. Second one is you always have to listen. Listen and learn, right? And listening and learning comes from the most unexpected areas. It could be the new employee, it could be the old timer, it could be another entrepreneur, but always listen. I think there's always something to be learned from every piece of advice. Good and bad. Right. Have you sought any professional consulting coaching in your business? So I've been always receptive to different types of coaching and mentors. So going through my business, I was part of a Vistage Group, which is a peer group of CEOs. I felt that was very helpful. I also work with Guild Growth Partners. They've been able to kind of mentor me and kind of help me see things I don't quite see on my hindsight. Now a lot of times you're in a daily grind and when people stop and talk to you and tell you things, it's nothing new. All they're doing is reframing in a way that you go, oh, that's right. I forgot about that. It kind of sets you back, right? Right. But you feel that a company like Guild with seasoned professionals are pointing the future for you based on a lot of things that worked in the past, I guess. And you're absolutely right. I think for many CEOs in Hawaii of SMEs, they need to know larger ideas and invasions that may be somewhere in the world. And the solution may exist elsewhere, but unfortunately we are in a small market of 1.2 million people and we're just talking to each other sometimes. And we don't see the larger possible product lines or services or solutions to their issues that they have in organizations. I think that's a very clear kind of area for a lot more Hawaii CEOs to get into, which is growing their companies with consultants like Guild. Now finally, we're going to focus on, we see changes in the future in IT. Aside from cloud, well, what would you say that if, what would make cloud much more receptive or one of the things that you have to do in talking to people that will make people believe in it and start talking about it? What would these factors be? I think education is always the first one. There's no one single solution that's going to fix everything. Cloud is just one piece, right? All your traditional IT is still going to stick around. You still have to practice good business practices. All of that needs to be taken into consideration as one whole piece. So don't worry, it's not just cloud, it's everything. And we all need to realize that, right? So cloud is one of the tools that you have in your quiver here that you can bring out with people. But going back is this continuous conversations. That's the key to kind of making you aware of what is the best fit of IT to organization. So when you ask questions to CEOs or CTOs and others in organizations, sometimes you get a feeling that you're moving ahead with some people faster than others. What makes people say, Ricky, you've really shined a light on a problem, a dark problem that I had. What are things that you bring that make people aware of those things? I think the first step is always to try and understand what the problems are before you start fixing them. A lot of times you jump in, you fix a problem and you find out that wasn't really a problem. So they teach you in school, ask the customer what the pain points are. But you ask the customer, they're not gonna know. If they knew, they wouldn't need you. So part of the discovery really is let's have a conversation, let's talk to each other and let's figure out together what the pain points are. Now in Hawaii business though, you talk to a wide range of businesses. Are there any threads or similarities that you see in IT usage or IT applications in many organizations? What are they? I think there is a misconception that IT is a zero sum game. If I want to fund IT, where am I taking it from? Well, the fact is you don't really have to. If it's done properly, you can make things better, lower costing, faster, whatever the case is, as long as you do it properly. And that's fundamentally the change, I guess, in mentality of people. If they get that, then things got smoother in conversations with you. Right, right. So it is going, getting over that fear. Once you embrace it, it's easy and it blends right into the rest of your business. And talking about Hawaii, you have some, like you mentioned before, a way to grow and possibly move up and expand elsewhere. Where does it come within you? A lot of people see Hawaii and that's all they see. Is there anything that in the past that made you want to do that or anything that you read or saw models of people that you say, wow, I want to be like them? Any, Amy, any? Well, so growing up in Hawaii, it's a small community. When you go out to school in the mainland, you're thinking, wow, big IT, Silicon Valley, right? So as you meet more people, you meet more businesses, you realize that people are people. You know what I mean? There's nothing special about it. Hawaii is a little more laid-back, but we're totally capable. So once you understand that, I mean, the sky's the limit, I feel. Well, we're gonna close on that, Ricky. What a great conversation we had, a very fast clip. And I think many CEOs and CTOs and IT managers will look at these conversations as, wow, there's a lot to digest. But I think what you say will really help their business and using IT tools. But again, it's the conversation and how they do their business is the key. Thank you, Ricky. Thank you. Okay. And this is the end of Business in Hawaii with Rayse Chiama and Ricky Zhang. Thank you very much.