In Episode 142 of “The Trusted Advisor,” RSPA CEO Jim Roddy sits down with John Giles, President of ISV Round 2 POS, to discuss the retail IT VAR of the future. Giles begins with a tour of his VAR company, Butler Business Systems in Butler, PA, and then provides his thoughts on designing a “VAR for our kids’ generation,” why he continues to bet on the channel, expected business model changes for VARs and ISVs, and actions resellers should take so they are a VAR of the Future. 

 “The Trusted Advisor,” powered by the Retail Solutions Providers Association (RSPA), is an award-winning content series designed specifically for retail IT VARs and software providers. Our goal is to educate you on the topics of leadership, management, hiring, sales, and other small business best practices. For more insights, visit the RSPA blog at www.GoRSPA.org.  

 Watch Episode 142 now: 

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Full episode transcript via Apple Podcasts:

00:00:06.697 –> 00:00:13.857
Roddy: Welcome to another episode of the Trusted Advisor Podcast and Video Series, powered by the Retail Solutions Providers Association.

00:00:13.857 –> 00:00:19.217
Roddy: Our goal on the pod is to accelerate the success of today’s and tomorrow’s leaders in the retail IT industry.

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Roddy: I’m Jim Roddy, back with you again.

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Roddy: Thank you so much for joining us for a very special episode, where we’re going to talk about the retail IT bar of the future.

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Roddy: So leading us in this conversation is going to be John Giles.

00:00:31.157 –> 00:00:34.977
Roddy: He’s the president and owner of Round 2 POS, they’re a point of sale ISV.

00:00:35.617 –> 00:00:42.677
Roddy: John’s been active in the RSPA for many years, including being on stage at RetailNow and the RSPA Inspire Leadership Conference.

00:00:42.677 –> 00:00:54.317
Roddy: Prior to launching Round 2, John was a creator of point of sale software, future POS, building his ISV into a top five restaurant software before selling the company in 2017.

00:00:54.457 –> 00:00:56.037
Roddy: So John, welcome.

00:00:56.197 –> 00:01:11.817
Roddy: So the folks who are watching on our YouTube channel, they can see you are not sitting at a desk, you are standing outside of your building, and that ties in with you have Round 2, which is your ISV, but you also have your own VAR reseller that you created primarily to test your software in the field.

00:01:11.817 –> 00:01:17.417
Roddy: So tell us a little bit about that VAR organization and give us a tour, please.

00:01:17.417 –> 00:01:31.817
Giles: Well, yeah, the thinking behind Butler Business Systems is, and we did this with future too, we want to eat our own cooking, so we test everything here before it goes out into the field, and that’s a philosophy I’ve had probably for 30 years.

00:01:32.237 –> 00:01:36.937
Giles: But we’ll take you inside where there’s less road noise, but this is our office.

00:01:36.937 –> 00:01:42.437
Giles: It’s about 4,000 square feet, and we just finished a renovation to make it more purpose built for a VAR.

00:01:42.437 –> 00:01:43.917
Giles: So come on inside.

00:01:43.917 –> 00:01:47.797
Giles: As you can see above the door, we have our motto, make it better.

00:01:47.797 –> 00:01:50.957
Giles: That’s what we come here to do every single day.

00:01:50.957 –> 00:01:56.037
Roddy: For those who don’t know, Butler PA is in Western PA, just north of Pittsburgh.

00:01:57.417 –> 00:02:02.297
Giles: As you’d expect, we’ve got like 12 cubicles for all of our technicians and salespeople when they’re not on the road.

00:02:02.297 –> 00:02:05.137
Giles: But this is something that’s an innovation that I came up with.

00:02:05.137 –> 00:02:06.757
Giles: This is our staging area.

00:02:09.157 –> 00:02:14.977
Giles: Unbeknownst to most people, I had a very brief and not very illustrious career at McDonald’s when I was a teenager.

00:02:14.977 –> 00:02:22.557
Giles: But one thing I took away from that time was that I appreciated how much thought went into everything and how much they valued efficiency.

00:02:22.997 –> 00:02:26.677
Giles: And one of the things that I remembered was I would work the grill.

00:02:26.677 –> 00:02:30.477
Giles: I’m making burgers here and the buns are here, the condiments are here.

00:02:30.477 –> 00:02:33.797
Giles: So I literally never went more than that to do my job.

00:02:33.797 –> 00:02:37.097
Giles: So we applied that to the staging area concept.

00:02:37.097 –> 00:02:39.357
Giles: So we made them kind of horseshoe shaped.

00:02:39.357 –> 00:02:42.977
Giles: So the thinking is now I can work on this.

00:02:42.977 –> 00:02:49.637
Giles: There’s room underneath the boxes, but I can be on this computer, this computer and this computer and never have to get up and walk an inch.

00:02:49.637 –> 00:02:56.997
Giles: So it’s all about these little operational efficiencies that we’re trying to get because I always say McDonald’s didn’t do anything brilliant, but they did a lot of little things smart.

00:02:56.997 –> 00:02:58.597
Giles: So this is our staging area.

00:02:58.597 –> 00:03:00.517
Giles: I’m very proud of this.

00:03:00.517 –> 00:03:05.697
Giles: Moving on, one of the things that I wanted to put a lot of emphasis on here is training.

00:03:05.697 –> 00:03:07.617
Giles: So this is our training room.

00:03:07.617 –> 00:03:08.797
Giles: It’s purpose-built.

00:03:08.797 –> 00:03:10.297
Giles: It can convert to a conference room.

00:03:10.297 –> 00:03:11.277
Giles: These tables push together.

00:03:11.277 –> 00:03:19.057
Giles: I’m not going to try and be too intrusive here, but this is Coach Nick explaining how the statement analysis works.

00:03:20.677 –> 00:03:25.177
Giles: And then out here, let those people alone.

00:03:25.177 –> 00:03:32.037
Giles: So, you know, one of the things that I feel has really fallen off is training of employees in the VAR.

00:03:32.037 –> 00:03:39.937
Giles: I know MCR took a lot of pride in it and really want to get back to that level of training so that we’re giving our people the best chance of success.

00:03:39.937 –> 00:03:44.277
Giles: I know for too many places, sales training involves, this guy knows how to do it.

00:03:44.277 –> 00:03:46.137
Giles: Watch him do it and try and do what he does.

00:03:46.137 –> 00:03:52.437
Giles: We really want to put more time and effort into that to invest in the VAR model like nobody else is.

00:03:53.757 –> 00:03:57.977
Giles: We also have a coffee bar because I like my people fully caffeinated.

00:03:59.257 –> 00:04:00.417
Giles: Back here is the warehouse.

00:04:00.417 –> 00:04:05.017
Giles: It’s just a bunch of stacked up locks, if nothing too photogenic.

00:04:05.017 –> 00:04:12.977
Giles: Then this meeting room is affectionately called the fish bowl because it’s got a big window and everybody walking by looks at you like you’re a fish in a fish bowl.

00:04:15.457 –> 00:04:18.357
Giles: I’m sure I’ve probably created a lot of questions there.

00:04:19.517 –> 00:04:19.857
Roddy: Yeah.

00:04:19.857 –> 00:04:22.197
Roddy: No, John, I appreciate that.

00:04:22.397 –> 00:04:26.717
Roddy: Can you talk a little bit more about the why behind launching the company?

00:04:26.717 –> 00:04:34.017
Roddy: Because there’s one thing about testing your software and putting it through, but you don’t have to go to this extent in order to do it.

00:04:34.017 –> 00:04:41.417
Roddy: Why did you go all the way in order to have this built out business and then really put the depth into it where it’s not just scratching the surface?

00:04:41.917 –> 00:04:42.117
Giles: Yeah.

00:04:42.117 –> 00:04:44.937
Giles: Well, I mean, it’s really about investing in the VAR model.

00:04:44.937 –> 00:04:49.837
Giles: I mean, I have fully committed with Round 2 to being a VAR centric product.

00:04:49.837 –> 00:04:56.097
Giles: And if I’m going to live and die by the VARs, then I should probably invest in their success and starts right here.

00:04:56.297 –> 00:04:57.837
Giles: Let’s see if we got it right.

00:04:58.057 –> 00:05:01.477
Giles: Let’s eat our own cooking and see if it tastes good.

00:05:01.597 –> 00:05:05.557
Giles: I think you may have seen what we’ve invested in with our Round 2 CRM.

00:05:05.597 –> 00:05:13.477
Giles: It’s a product like nobody else has anything like it’s, I’m super proud of what we put into it, but there was a lot of missteps with that too.

00:05:14.477 –> 00:05:15.857
Giles: We tried this, it didn’t work.

00:05:15.857 –> 00:05:17.477
Giles: So we tried it a different way.

00:05:17.477 –> 00:05:19.717
Giles: Android threw us a curve ball on the one piece of it.

00:05:19.717 –> 00:05:21.897
Giles: So we rewrote it to work a different way.

00:05:21.897 –> 00:05:23.017
Giles: We’re always evolving it.

00:05:23.017 –> 00:05:24.997
Giles: We’re always trying to improve what we do.

00:05:24.997 –> 00:05:37.737
Giles: And I know that saying that the VAR of the future is a tall order, but we’re really just looking to find every way we can streamline the VAR model because, quite frankly, the VAR is getting squeezed from every direction.

00:05:37.737 –> 00:05:40.277
Giles: And we just want to be the one thing that goes right in their life.

00:05:40.277 –> 00:05:47.257
Giles: So that’s why we put such an emphasis on giving them all the tools they need to succeed and grow.

00:05:47.257 –> 00:05:55.317
Roddy: And you and I talked before, I remember a few weeks ago when we were planning this episode, you used the phrase of VAR for our kids’ generation.

00:05:55.317 –> 00:05:59.717
Roddy: So I guess talk a little bit more about that because people usually do it in the reverse, right?

00:05:59.717 –> 00:06:04.237
Roddy: Like it’s not your grandfather’s VAR or something like that, but talk about how you built something.

00:06:04.237 –> 00:06:07.117
Roddy: And what is the VAR for the current kids’ generation?

00:06:07.117 –> 00:06:10.597
Roddy: Again, you’ve got a couple of kids in their 20s, so it’s applicable.

00:06:10.597 –> 00:06:12.277
Giles: Well, I mean, it’s evolving.

00:06:12.277 –> 00:06:18.957
Giles: I mean, everybody knows that we’ve gone from a break-fix model where somebody would give you a check for 30 grand for a point of sale system.

00:06:18.957 –> 00:06:20.817
Giles: Now it’s you’re competing with free.

00:06:20.817 –> 00:06:22.657
Giles: OK, well, all right, we got to compete with free.

00:06:22.657 –> 00:06:25.237
Giles: And that’s just the playing field that we’ve been handed.

00:06:25.237 –> 00:06:26.417
Giles: How do we make the most of that?

00:06:26.417 –> 00:06:33.097
Giles: So the obvious thing is we find every operational efficiency that we can, like we’ve got to put minutes back in the day.

00:06:33.097 –> 00:06:35.557
Giles: We’ve got to make people more effective in their jobs.

00:06:35.677 –> 00:06:37.057
Giles: And that was a big piece of it.

00:06:37.057 –> 00:06:43.617
Giles: In the future, you look 20 years ago how things were done on pen and paper, Excel spreadsheets.

00:06:43.617 –> 00:06:48.637
Giles: That’s not going to compete with an Amazon or somebody that’s big that comes in and puts money into it.

00:06:48.637 –> 00:06:52.417
Giles: So this is almost like a preemptive thing.

00:06:52.417 –> 00:06:57.457
Giles: Like, hey, I’m going to invest in the VAR model before somebody comes and wrecks it permanently.

00:06:57.797 –> 00:07:01.517
Giles: So it’s a self-preservation thing as well.

00:07:01.517 –> 00:07:01.877
Roddy: Got it.

00:07:01.877 –> 00:07:07.497
Roddy: And I know you also shared with me, this isn’t something like you just remodeled the office, put a sign up and go forward.

00:07:07.497 –> 00:07:10.877
Roddy: This has been a project that’s taken about half a decade.

00:07:10.877 –> 00:07:13.117
Roddy: And like you said, it’s always in the works.

00:07:13.117 –> 00:07:23.397
Roddy: Can you get a little bit more detail behind that in terms of how you built it and some of the things that have gone into besides the physical structure in the past half decade?

00:07:23.397 –> 00:07:26.577
Giles: Well, the physical changes that we made to this building came last.

00:07:26.937 –> 00:07:33.517
Giles: In the beginning, it was Round 2 and Butler Biz in this same office, kind of working together as a team.

00:07:33.517 –> 00:07:40.997
Giles: And I think some of it was funny when we’ve split offices, we moved Round 2 to Cranberry, so they’d have more space and an easier time recruiting talent.

00:07:40.997 –> 00:07:44.737
Giles: But some of them were like, well, wait, Gavin’s not my co-worker.

00:07:44.737 –> 00:07:47.677
Giles: We’re not going to be like they thought they were all part of the same company.

00:07:47.677 –> 00:07:49.237
Giles: It’s like, no, not really.

00:07:49.237 –> 00:07:53.657
Giles: The intention was that you would feel Butler Business Systems paying firsthand.

00:07:53.657 –> 00:07:55.497
Giles: You would see their challenges firsthand.

00:07:56.297 –> 00:08:01.477
Giles: So you don’t have that ivory tower mentality that, oh, that’s good enough, they can fix it next week.

00:08:01.477 –> 00:08:02.997
Giles: I’ll get to it when I do.

00:08:03.377 –> 00:08:04.237
Giles: You feel the pain.

00:08:04.237 –> 00:08:09.057
Giles: You know what Avar is going through because you’ve been in the trenches with them.

00:08:09.057 –> 00:08:12.437
Giles: So the first step of that was the CRM.

00:08:12.437 –> 00:08:19.437
Giles: We built lots and lots and lots of functionality in the CRM around things like the payment processing stuff.

00:08:19.437 –> 00:08:22.537
Giles: It’s not an option for Avar not to be in the payment processing piece.

00:08:22.537 –> 00:08:24.317
Giles: Now, it’s just suicide.

00:08:24.437 –> 00:08:26.617
Giles: I mean, that’s the only place you can make money.

00:08:26.617 –> 00:08:40.997
Giles: So we started with that and we built on things like a payroll integration so that my sales commissions, my technician’s mileage and on-call allowance, it can all be sent through Gusto to the payroll company.

00:08:41.217 –> 00:08:45.197
Giles: I don’t have to have an accountant sitting with an Excel spreadsheet every paid period to do this.

00:08:45.237 –> 00:08:51.597
Giles: So we built the software and obviously we built the point of sale once we had our feet under us with the CRM.

00:08:51.597 –> 00:08:55.017
Giles: But this office remodel is really kind of just a culmination of all of that.

00:08:55.017 –> 00:09:01.237
Giles: Like, okay, everybody’s willing to go to where they need to be and do what they need to do.

00:09:01.237 –> 00:09:04.817
Giles: Round 2 is down in Cranberry writing the software all day, every day.

00:09:04.817 –> 00:09:09.797
Giles: But Butler Business Systems is here selling it, installing it and servicing it every day.

00:09:09.937 –> 00:09:11.857
Giles: And they still have a very close relationship.

00:09:12.617 –> 00:09:17.557
Giles: So, you know, if one guy’s painting Butler is felting Cranberry and they take good care of each other.

00:09:17.557 –> 00:09:23.677
Giles: But yeah, this has been an evolutionary process to get it to where it’s at and it’s never going to stop evolving.

00:09:23.677 –> 00:09:32.857
Giles: I have plans for how we want to reorganize the warehouse and make sure that inventory is rotated correctly and we have the right levels of inventory, you know, down the road.

00:09:32.957 –> 00:09:34.477
Giles: We’ve got other things we’ve got to get done.

00:09:34.477 –> 00:09:38.177
Giles: And then obviously plenty of point of sale bells and whistles will happen along the way too.

00:09:38.717 –> 00:09:47.077
Giles: But the VAR model, I think we need to just, you know, give it the attention it deserves because it’s been so haphazard in the past.

00:09:47.077 –> 00:09:56.657
Giles: I think to say the VAR of the future is to say a far more organized VAR with much better tools to manage their business and much better insights into their business.

00:09:56.657 –> 00:09:56.937
Roddy: Got it.

00:09:56.937 –> 00:10:02.617
Roddy: And so folks who don’t know Western Pennsylvania, again, I’m from Erie, Pennsylvania, so that’s two hours north of Pittsburgh.

00:10:02.617 –> 00:10:05.897
Roddy: Butler is how far north of Pittsburgh, the city?

00:10:05.897 –> 00:10:07.097
Roddy: Is it 45 minutes an hour?

00:10:08.077 –> 00:10:08.837
Roddy: An hour.

00:10:08.837 –> 00:10:12.797
Roddy: And then Cranberry is essentially considered suburban Pittsburgh.

00:10:12.797 –> 00:10:12.957
Giles: Yeah.

00:10:12.957 –> 00:10:14.977
Giles: It’s about halfway in between.

00:10:14.977 –> 00:10:21.457
Giles: So one of the problems we had for 20 years in Butler is getting developers to drive to Butler.

00:10:21.457 –> 00:10:23.157
Giles: Most of them are based in Pittsburgh.

00:10:23.157 –> 00:10:24.637
Giles: It’s an hour drive.

00:10:24.637 –> 00:10:32.377
Giles: Anybody that’s ever done an hour commute to and from work knows it just sucks a life out of you, especially in Western Pennsylvania, where it’s in the winter is-

00:10:32.377 –> 00:10:35.177
Roddy: When you get some snow squalls coming.

00:10:35.177 –> 00:10:35.917
Giles: Yeah.

00:10:35.917 –> 00:10:38.617
Giles: So we just moved it to Cranberry to split the difference.

00:10:38.617 –> 00:10:41.717
Giles: So now it’s a half an hour drive if you’re coming from Pittsburgh.

00:10:42.297 –> 00:10:43.017
Giles: You know the area.

00:10:43.017 –> 00:10:47.537
Giles: Of course, we moved to Cranberry and the first program where we hire is in Grove City.

00:10:47.537 –> 00:10:49.197
Roddy: Okay.

00:10:49.237 –> 00:10:50.857
Roddy: All right.

00:10:50.857 –> 00:10:52.257
Giles: So much for that, but yeah.

00:10:52.257 –> 00:10:56.137
Roddy: They almost have an hour drive then, or 45 minutes or something in order to get to Cranberry.

00:10:56.197 –> 00:10:57.237
Roddy: So go figure.

00:10:57.237 –> 00:10:58.317
Giles: He was a good sport about it.

00:10:58.317 –> 00:10:59.697
Giles: But yeah.

00:10:59.697 –> 00:11:00.057
Roddy: Good.

00:11:00.057 –> 00:11:02.677
Roddy: I have several questions how you find a developer in Grove City.

00:11:02.677 –> 00:11:10.937
Roddy: Grove City is not big at all outside of the shopping outlet, but you also have in there a hardware stress lab.

00:11:11.737 –> 00:11:15.677
Roddy: That’s where we shot when you and I did the podcast last year.

00:11:15.677 –> 00:11:24.677
Roddy: I guess, can you talk about the importance of that from our perspective, from an ISV perspective, and what has gone into that stress lab for folks who don’t know about it?

00:11:24.677 –> 00:11:24.977
Roddy: Sure.

00:11:24.977 –> 00:11:30.737
Giles: Well, I guess that the whole genesis of it was during COVID and the fact that we went Linux.

00:11:30.737 –> 00:11:38.117
Giles: We weren’t sure what the hardware situation was going to look like after COVID, and we needed to know that our Linux solution would run on all the popular hardware platforms.

00:11:38.117 –> 00:11:43.497
Giles: So we had bought one of every all-in-one that’s out there for compatibility testing.

00:11:43.497 –> 00:11:46.277
Giles: But the thinking was, okay, we’re going to have all these all-in-ones laying around.

00:11:47.237 –> 00:11:50.417
Giles: Let’s hook them all up and beat the crap out of our point of sales software.

00:11:50.417 –> 00:11:58.417
Giles: Let’s see how much we can stress it, and knock on wood, no crashes, no freezes, ringing sales for 24 hours straight.

00:11:58.517 –> 00:12:00.297
Giles: I don’t think there’s too many products can do that.

00:12:00.657 –> 00:12:05.657
Giles: The last stress lab, I’m sure you’re probably aware, but we rang over a million sales in one day.

00:12:05.657 –> 00:12:07.997
Giles: No crashes, no freezes, it just works.

00:12:07.997 –> 00:12:16.997
Giles: So again, eating my own cooking, I’m testing it, I’m making sure that I’m not having a customer say, hey, my customer with 10 terminals says it’s crashing all the time.

00:12:16.997 –> 00:12:19.337
Giles: Well, that’s because we never did one that big.

00:12:19.337 –> 00:12:27.757
Giles: So we really have put a lot of emphasis on testing what we’re putting out there, making sure that the product we put out there is a quality product.

00:12:27.877 –> 00:12:33.917
Roddy: It seems like something that was really evident here is the depth that you’re putting together.

00:12:33.917 –> 00:12:41.357
Roddy: This ties in with the software and the thing that you’ve done for it is, you want to provide more than just POS for merchant to run their business.

00:12:41.497 –> 00:12:55.437
Roddy: So can you talk about the complimentary, I think you call it a tool belt, that you’ve developed to help a VAR run their own company and also sell value versus just competing on price through that tool belt that you’ve worked into your software?

00:12:55.437 –> 00:12:56.057
Giles: Sure.

00:12:56.057 –> 00:13:05.077
Giles: Well, I mean, as far as the VAR is concerned, we tried to tackle a lot of the challenges that I saw VARs facing in the future POS days.

00:13:05.717 –> 00:13:08.077
Giles: The biggest one was around payment processing.

00:13:09.377 –> 00:13:12.677
Giles: I always say it’s an intentionally confusing industry.

00:13:13.177 –> 00:13:18.337
Giles: They want you to get so confused, you say, I don’t know, that’s what I’m getting paid and walk away and go worry about something else.

00:13:18.537 –> 00:13:19.917
Giles: And that was a horrible approach.

00:13:19.917 –> 00:13:28.057
Giles: And I saw a lot of my future POS resellers, I mean, really get victimized, shortchanged in ridiculous ways.

00:13:28.057 –> 00:13:38.417
Giles: So one of the very first things we said is, we’re gonna make sure that we get paid fairly first, and then we’re going to get full transparency to the VAR so they know they get paid fairly.

00:13:38.557 –> 00:13:47.617
Giles: That was, I think, one of the existential threats to the VAR community is, yeah, you’re just gonna be my payments guy, and sure, I’ll give you what I tell you is fair.

00:13:47.617 –> 00:13:53.297
Giles: So we built on that, and then we looked at, beyond that, what are the other challenges that a VAR is going to face?

00:13:53.297 –> 00:13:55.617
Giles: Making sure that their salesmen get out of bed in the morning.

00:13:56.197 –> 00:14:01.377
Giles: That’s a primary one because if your salesman’s not selling, that’s kind of the lifeblood of the company.

00:14:01.857 –> 00:14:09.297
Giles: And I had one reseller that he was always trying to get a salesman, and the story ended the same every time.

00:14:09.297 –> 00:14:16.497
Giles: I would call him up, oh, I got a salesman, he’s going to go out and kick a bunch of butt, and we’re going to light up a lot of sales this year.

00:14:16.497 –> 00:14:18.077
Giles: Okay, cool, man.

00:14:18.077 –> 00:14:21.957
Giles: I’d call back in three months, he has that new salesman going for you.

00:14:21.957 –> 00:14:23.777
Giles: I defy him, he wasn’t working.

00:14:23.777 –> 00:14:31.757
Giles: And it’s like, well, you’ve done this how many times now, but you don’t have any metrics to know if he’s getting out of bed and going to work in the morning.

00:14:31.757 –> 00:14:32.777
Giles: The CRM gives you that.

00:14:32.777 –> 00:14:36.837
Giles: You get an hour by hour graph of how many leads they’ve touched.

00:14:36.837 –> 00:14:41.697
Giles: And I can tell you, if they’re working, they’re touching leads because you’ve got to update your notes.

00:14:41.697 –> 00:14:45.457
Giles: So it gives us transparency on that side of it.

00:14:45.457 –> 00:14:46.697
Giles: Same with the service end of it.

00:14:46.697 –> 00:14:48.517
Giles: I know how many service tickets are open.

00:14:48.517 –> 00:14:54.177
Giles: I know how long they’ve been open and any major problems they’re having, all pending installs.

00:14:54.177 –> 00:15:17.497
Giles: So it’s really, like I said, like Batman’s tool belt, it’s all these little widgets that help you run a VAR more efficiently because my good friend Alan Hayman, he had a quote like probably 20 years ago and he said, for a one and two man VAR to grow into a big successful business, so many things have to go right that it’ll probably never happen.

00:15:17.497 –> 00:15:21.657
Giles: I like to joke that I spent like 15 years trying to prove them wrong and I didn’t.

00:15:23.017 –> 00:15:33.797
Giles: It’s always stuck with me like, okay, well, I guess with the current set of challenges that they have, running a business, managing people, all these things, it is a lot.

00:15:33.797 –> 00:15:38.617
Giles: It is a lot to expect that to just all end in success without some help.

00:15:39.397 –> 00:15:44.717
Giles: When we sold Future, I had a big war chest to go really pure R&D.

00:15:44.817 –> 00:15:51.257
Giles: I used to joke with the developers like, you have no idea how blessed you are that we have no customers, because we could just work on stuff all day.

00:15:52.617 –> 00:15:56.317
Giles: Phone doesn’t ring, we don’t get interrupted, and for several years, that’s what we did.

00:15:57.117 –> 00:15:59.657
Giles: We had a skeleton crew of sales here.

00:16:00.217 –> 00:16:12.697
Giles: We couldn’t go to restaurants because I had a five-year non-compete, but we were just selling terminal deals because we created an onboarding process through the CRM that incorporated a bunch of different APIs and we had to test them all.

00:16:13.197 –> 00:16:16.957
Giles: Every so often, this wasn’t filled out, so first day to kicked it back.

00:16:17.137 –> 00:16:19.057
Giles: Okay, well, we’ll have to deal with that.

00:16:20.617 –> 00:16:27.937
Giles: We just pounded the pavement and took every crappy deal we could just to run more traffic through the CRM and make sure that it was working.

00:16:27.937 –> 00:16:33.057
Giles: There was just a whole lot of legwork done behind the scenes that most people would never appreciate.

00:16:34.257 –> 00:16:38.297
Giles: When we turned the corner to point of sale, everybody said, wait, we’re going to have computers.

00:16:38.297 –> 00:16:40.717
Giles: Yeah, I didn’t build this to sell terminal deals, guys.

00:16:40.717 –> 00:16:42.617
Giles: We really need to go back to where we were.

00:16:44.377 –> 00:16:56.117
Giles: It was a great evolution, but it gave us a chance and the time to test things along the way, to make sure things worked along the way, and to create this set of tools for VARs to grow their businesses, because that’s what I’m invested in.

00:16:56.597 –> 00:17:05.257
Giles: I know when we came up with the VAR of the future title, there’s probably a lot of larger VARs out there, many of whom I’ve worked with that are like, well, that’s nothing special.

00:17:05.257 –> 00:17:12.497
Giles: Maybe to you it’s not, but to a VAR that’s a couple of guys and maybe they want to hire a salesman, and maybe they want to grow.

00:17:12.497 –> 00:17:22.177
Giles: Man, I’m here to tell you everything I’ve done wrong and why we do it the way we do it, because there’s always a story behind why we’re doing it that way.

00:17:23.537 –> 00:17:27.557
Giles: I want to help these guys that want to grow their business and live the American dream.

00:17:27.557 –> 00:17:33.397
Giles: I want to give them the tools that they need to succeed, because at the end of the day, their success is my success.

00:17:33.397 –> 00:17:37.917
Giles: My investment in them is an investment in my own success in the long run.

00:17:38.597 –> 00:17:46.037
Roddy: It seems like on paper, if you have a two or three person company, and then it becomes a six or seven person company, you think, well, it’s not that big of a deal, right?

00:17:46.037 –> 00:17:53.917
Roddy: It’s only three or four more people, but the way that you run that kind of operation and manage it is exponentially different, right?

00:17:53.917 –> 00:17:58.517
Roddy: It’s not just that you can talk to one or two people, you can see what they’re doing with your own eyes.

00:17:58.517 –> 00:18:08.637
Roddy: I’m curious, how do you, because I can imagine we have some folks listening to this that are more resistant to change than you are, John, right?

00:18:08.937 –> 00:18:14.597
Roddy: You are definitely open to try, test, measure, adapt and keep doing that over and over and over.

00:18:14.597 –> 00:18:20.297
Roddy: What would you say to a VAR who’s like, I think I’m okay where I am, right?

00:18:20.297 –> 00:18:22.117
Roddy: It’s VAR of the future thing.

00:18:22.117 –> 00:18:26.197
Roddy: I think I could keep doing what I’m doing for another 15 or 20 years.

00:18:26.197 –> 00:18:35.417
Roddy: What would be your pitch to them to say, yeah, you can’t be on the same track that you’ve been, even if you’ve been on that track for 15 or 20 years, right?

00:18:35.417 –> 00:18:41.457
Roddy: What would you say to somebody who needs to adapt to be VAR of the future from your perspective?

00:18:41.457 –> 00:18:46.677
Giles: Well, I think that everybody’s seen that the break-fix model has gone away.

00:18:47.657 –> 00:18:51.377
Giles: It’s sass and has, so you’ve got to adapt your business for that.

00:18:51.377 –> 00:18:54.657
Giles: Nobody’s going to stroke you that $30,000 check anymore.

00:18:54.657 –> 00:19:01.657
Giles: I would say to the VAR that thinks they can keep doing it the way they have been doing it for 15 more years, you might have three to five.

00:19:02.337 –> 00:19:14.717
Giles: Because what we’re building, we’re going to roll it out and we’re going to roll it out nationwide and if your ISV is not giving you these sorts of tools, well, then you’re going to be at a competitive disadvantage when we come to your town.

00:19:14.717 –> 00:19:17.217
Giles: We would love to work with you, but we’ll work with the other guy too.

00:19:18.357 –> 00:19:21.657
Giles: We’re signing up VARs that want to succeed and want to grow their business.

00:19:21.957 –> 00:19:28.417
Giles: It is really about that alignment that you want to grow your business, you want to be bigger than you are today.

00:19:29.677 –> 00:19:37.617
Giles: A lot of VARs, and this is a saying that I think came from Michael Gerber, working in your business, instead of on your business.

00:19:37.617 –> 00:19:39.637
Giles: There’s a lot of VARs stuck in that rut.

00:19:39.637 –> 00:19:45.577
Giles: It’s like they want to come in, they want to change things, and they want to do things, but oh crap, the phone blows up.

00:19:45.577 –> 00:19:53.217
Giles: Managing people is that same challenge, because like you said, I’ve got three people, we all know our jobs, we’re all going about our jobs, we hire three more.

00:19:53.217 –> 00:19:55.517
Giles: Well, they don’t know their jobs.

00:19:55.517 –> 00:19:59.437
Giles: Really, the only thing they can do is follow you and mimic what you do.

00:20:01.357 –> 00:20:20.197
Giles: We wanted to create a set of tools, obviously for training, that helps to streamline that, but also give you tools to manage those people, so you can work on your business instead of in your business, so that we can automate some of the tasks that are manual, time sucks now, that we can make that so, oh, press approve payroll, you’re done.

00:20:20.197 –> 00:20:27.077
Giles: Yeah, so we really want to give these guys what they need to be here in 15 years, instead of just three to five.

00:20:27.937 –> 00:20:31.477
Roddy: Got it, and they need to streamline those back-end operations in order to do it, right?

00:20:31.477 –> 00:20:37.577
Roddy: Like you said, you can’t be so much busy, material quote Michael Gerber, busy, busy, busy, doing it, doing it, doing it.

00:20:37.577 –> 00:20:42.517
Roddy: You might think you’re building your business, but actually things are moving faster on the outside.

00:20:42.517 –> 00:20:48.537
Roddy: So when we talked, so again, I alluded to the last episode we recorded, it’s episode 123.

00:20:48.537 –> 00:20:55.097
Roddy: We talked about why you came back to the industry when you and your wife Kelly, you could have sailed into the sunset after you sold Future.

00:20:55.697 –> 00:21:06.657
Roddy: Can you talk in a little bit broader terms why you’re betting again on the channel, even though, like you said, it is an uphill climb for many of these small businesses, like it is a huge challenge.

00:21:06.657 –> 00:21:17.517
Roddy: And so you said that you think VARs actually can have the upper hand against what we call the RSPA, the VC backed 800 number guys who don’t have a channel.

00:21:17.517 –> 00:21:19.037
Roddy: Like why are you betting on the channel?

00:21:19.037 –> 00:21:22.737
Roddy: Why do you think they actually have an advantage versus those 800 number guys?

00:21:23.377 –> 00:21:25.397
Giles: Well, I mean, it’s the local presence.

00:21:25.397 –> 00:21:29.377
Giles: And I’ve always said that that’s what makes the VAR model viable.

00:21:29.377 –> 00:21:30.817
Giles: People want to buy from people.

00:21:30.817 –> 00:21:32.557
Giles: They don’t want to buy from a website.

00:21:32.557 –> 00:21:40.597
Giles: And when it breaks, they want to know that people are going to come fix it, not a call center outside the country and we’ll mail you a new one on Monday.

00:21:40.597 –> 00:21:43.957
Giles: Those people with the call center, they get to go home at the end of their shift.

00:21:43.957 –> 00:21:45.937
Giles: They don’t really care if your problems were solved.

00:21:45.937 –> 00:21:50.917
Giles: So it’s that disconnect that I think people are starting to appreciate it.

00:21:51.337 –> 00:21:57.097
Giles: We’re out pounding the pavement in Hitsburg, just talking to people, having conversations.

00:21:57.097 –> 00:22:14.237
Giles: And a lot of them are saying that they don’t like the PE stuff, that they have had a lousy experience, that they’ve been overcharged and they feel like they were sold a bunch of stuff they didn’t even need because the person selling it to them is just trying to sell them every single product that they have to offer, rather than finding solutions for them.

00:22:14.237 –> 00:22:21.517
Giles: So I think that the lifeblood of being a VAR is, you are the Trusted Advisor.

00:22:21.657 –> 00:22:29.697
Giles: You can explain the pros and cons of whatever it is, restaurant technology, server banking versus cashier banking.

00:22:29.697 –> 00:22:38.117
Giles: I mean, you’re there to be their liaison to get them the technology they need and set their system up so that they can grow their business.

00:22:38.117 –> 00:22:41.657
Giles: So it’s all kind of paid forward, you know what I mean?

00:22:41.657 –> 00:22:48.697
Giles: But yeah, I mean, I think that the local VAR’s big thing is that they’re local, you know, I’m going to come eat in your restaurant.

00:22:48.697 –> 00:22:50.697
Giles: I’m going to bring my family here.

00:22:50.857 –> 00:22:53.657
Giles: And if it breaks, I’m going to get my car and drive there on a Friday night.

00:22:53.797 –> 00:23:02.597
Giles: And like I said, we’ve had a lot of success locally with people that are just, you know, I don’t want to throw out names and get cease and desist.

00:23:03.577 –> 00:23:08.637
Giles: Some of the people that you thought were the boogie man that were just this private equity juggernaut.

00:23:08.637 –> 00:23:13.977
Giles: And when you peel back a couple of layers of that onion, it’s not as pretty as they would like everybody to believe.

00:23:14.457 –> 00:23:18.637
Giles: And a lot of people are ready to go back to how it used to be.

00:23:18.637 –> 00:23:21.677
Giles: But, you know, it’s got to be next generation.

00:23:21.897 –> 00:23:23.617
Giles: We’re not going back to 1990.

00:23:23.617 –> 00:23:25.197
Giles: Nobody’s writing that big check.

00:23:25.197 –> 00:23:28.137
Giles: So how do we adapt to that SaaS and Haas model?

00:23:28.137 –> 00:23:30.237
Giles: And it’s all about the operational efficiencies.

00:23:30.917 –> 00:23:47.617
Giles: Now that you’re worried about every minute, every dime, all right, well, then let’s focus on how we don’t, you know, squander opportunities, squander money, you know, how we make everybody’s day more efficient, you know, how we give you better visibility into your business so that you know what’s going on in your business.

00:23:47.617 –> 00:23:52.997
Giles: And you can work on addressing the things that need your attention versus the phone rang, you know?

00:23:52.997 –> 00:24:03.337
Giles: So yeah, I think that the VAR model has a ton of potential, but it’s got to evolve, you know, we can’t be dinosaurs, we can’t be polyester tide guys from 1970.

00:24:04.197 –> 00:24:07.437
Giles: We’ve got to, okay, technology is changing around us.

00:24:07.437 –> 00:24:10.517
Giles: How do we use that technology to augment our daily work?

00:24:10.757 –> 00:24:12.457
Giles: You know, and that’s what we’re doing here.

00:24:12.457 –> 00:24:15.117
Giles: We’ve invested literally millions in it.

00:24:15.117 –> 00:24:20.017
Giles: And we’re, yeah, we’re not trying to show anybody up.

00:24:20.017 –> 00:24:22.017
Giles: We’re just trying to figure things out here.

00:24:22.017 –> 00:24:26.937
Giles: And any VAR that sells Round 2 is welcome to come, see everything, we’re an open book.

00:24:26.937 –> 00:24:28.417
Giles: How can we make your business better?

00:24:28.417 –> 00:24:29.717
Giles: Well, this is what we did.

00:24:29.717 –> 00:24:30.957
Giles: Here’s what we found when we did this.

00:24:30.957 –> 00:24:33.017
Giles: Here’s what we found when we did that.

00:24:33.017 –> 00:24:41.977
Giles: You know, we really just want to invest in the VAR community and grow our VARs to as big and successful businesses as possible like we did in the future days.

00:24:42.017 –> 00:24:49.157
Giles: The landscape is a little bit different, but a lot of people retired very rich in the future days, and I’m looking to do it again.

00:24:49.157 –> 00:24:49.737
Roddy: Good.

00:24:49.737 –> 00:24:53.097
Roddy: I want to get your take before we do a quick commercial break.

00:24:53.097 –> 00:25:00.937
Roddy: There’s a thing about VARs being local, but then there’s also Jeff Reilly, who just was the RSPA board chair.

00:25:00.937 –> 00:25:12.037
Roddy: I don’t know if you heard him during the general session at Retail Now, but he described our industry, really the RSPA community, as an independent mesh network of entrepreneurs.

00:25:12.037 –> 00:25:22.317
Roddy: He was saying, if you’re a restaurant or a retailer, a grocer, or anybody under that umbrella from merchant standpoint, do you want to rely on just one company to have all the solutions for you?

00:25:22.317 –> 00:25:33.117
Roddy: Or are you going to get the more tailored solution, the solution that moves and adapts better for the future, moves more like a speedboat than it does a big cruise ship?

00:25:33.117 –> 00:25:36.297
Roddy: You’re going to get that from the independent mesh network of entrepreneurs.

00:25:36.657 –> 00:25:40.577
Roddy: And that’s what he was saying is, the VAR can say, hey, Mr.

00:25:40.577 –> 00:25:49.617
Roddy: Miss Merchant, I am your connection to that network, and I will go and put together whatever bundle or solution, whatever it is, to meet your exact needs.

00:25:49.617 –> 00:25:52.937
Roddy: Where the 100 number guys basically say, well, here’s what we got.

00:25:52.937 –> 00:25:59.037
Roddy: We can operate within whatever our company does, but we don’t have that wide variety.

00:25:59.037 –> 00:26:09.517
Roddy: Is that something that you see, John, as another advantage beyond just local, but also I can put together a way more tailored solution to fit your needs, the customization of that?

00:26:09.517 –> 00:26:14.617
Roddy: What is your take on the independent mesh network of entrepreneurs being the VAR channel community?

00:26:14.617 –> 00:26:24.557
Giles: Well, I mean, I’ve said for a while that I’m not ever gonna get into the hardware business because the hardware ecosystem is just fine the way it is.

00:26:24.557 –> 00:26:31.277
Giles: If I don’t like partner tech, I can go to Touch Dynamics, I can go to CRS, I can go to HANASIS.

00:26:32.757 –> 00:26:38.757
Giles: Wherever I’m getting taken care of, wherever I’m getting the products that my customers are happy with, I can go.

00:26:38.757 –> 00:26:43.977
Giles: So we’re the software and we do the software, but we also kind of stay in our lane.

00:26:43.977 –> 00:26:49.417
Giles: We don’t say, you’ve got to buy my hardware that I just got on a container ship from China, and I hope that it works.

00:26:49.417 –> 00:27:07.237
Giles: So I feel like that it allows them to create a best of breed solution for their customers, and we’re just one component of that, and I’m not trying to break it by saying, oh, there’s a couple of dollars to be made here, here by my cheap all-in-one that I just got off the boat from China.

00:27:07.237 –> 00:27:17.837
Giles: No, you can get your hardware where you’re comfortable getting your hardware, and like you said, create that best of breed solution for your customer.

00:27:17.837 –> 00:27:22.837
Giles: What we’re really just trying to do here is supercharge the mesh network part of it.

00:27:23.617 –> 00:27:30.797
Giles: We want to make those VARs, the people that you seek out to get your system from rather than the guy that pulls your door handle.

00:27:30.917 –> 00:27:36.877
Giles: We want to make them that, like I said, Trusted Advisor that is going to tell you, well, here’s the pros and cons of this.

00:27:36.877 –> 00:27:38.817
Giles: This one’s cheaper, this one’s better made.

00:27:38.817 –> 00:27:48.677
Giles: Whatever the case may be, we want to just be one component in their success, but we want to definitely take good care of our under the erosion.

00:27:48.677 –> 00:27:54.577
Roddy: Yeah, at the VAR is somebody knows them as local, and they also know them as they can actually provide a better solution.

00:27:54.777 –> 00:27:58.597
Roddy: They’re more competent and capable than somebody else.

00:27:58.597 –> 00:28:04.077
Roddy: So, okay, let’s pause here to let our listeners and viewers know about the Retail Solutions Providers Association.

00:28:04.077 –> 00:28:10.397
Roddy: RSPA is North America’s largest community of retail technology VARs, software providers, vendors, and distributors.

00:28:10.397 –> 00:28:15.717
Roddy: To accelerate your success through an RSPA membership, email membership at gorspa.org.

00:28:16.917 –> 00:28:23.237
Roddy: Also, we want to say thanks to these companies who support the RSPA community and make this podcast and video series possible.

00:28:23.597 –> 00:28:25.437
Roddy: Our Platinum sponsor is Bluestar.

00:28:25.437 –> 00:28:29.817
Roddy: Our gold sponsors are Cocard, Epson, Heartland, and ScanSource.

00:28:29.877 –> 00:28:36.737
Roddy: Then finally, save the date for Inspire 2026, the Retail IT Channel’s Premier Leadership Conference.

00:28:36.737 –> 00:28:41.957
Roddy: RSPA Inspire is set for February 1st through 4th on the island of Kauai, Hawaii.

00:28:41.957 –> 00:28:49.777
Roddy: For more information, visit gorspa.org/inspire so you can experience Networking Nirvana.

00:28:49.777 –> 00:28:54.277
Roddy: John and I have both experienced Networking Nirvana at Inspire many, many times.

00:28:54.277 –> 00:28:58.577
Roddy: It was funny, you Kelly and I would meet more often in Hawaii or St.

00:28:58.577 –> 00:29:02.737
Roddy: Thomas or Puerto Rico than we would in Western Pennsylvania.

00:29:02.737 –> 00:29:06.697
Roddy: But I’m glad our paths could cross at some point there.

00:29:06.697 –> 00:29:07.477
Roddy: All right.

00:29:07.477 –> 00:29:09.217
Roddy: Last few questions for you.

00:29:09.217 –> 00:29:13.917
Roddy: Talk about the future business model that you see for VARS and ISV.

00:29:14.257 –> 00:29:17.917
Roddy: We’ve touched on that a little bit, but let’s talk about the software providers first.

00:29:17.917 –> 00:29:24.837
Roddy: Because the way that ISVs make money has changed, licenses versus SaaS over the years.

00:29:24.837 –> 00:29:29.917
Roddy: How do you see the ISV business model changing in the near-term and long-term future?

00:29:29.917 –> 00:29:31.657
Roddy: What’s your perspective?

00:29:33.137 –> 00:29:44.497
Giles: I hate to harp on the payments thing, but honestly, when I left the industry and came back, I was surprised at how many people are still like, I got a guy down the street that does it.

00:29:44.497 –> 00:29:49.657
Giles: You really need to understand this business, at least at a rudimentary level because that’s where you’re making your money.

00:29:49.657 –> 00:29:58.697
Giles: One of the struggles we had with some of the new VARs is, I just want to, it’s a competitive landscape and I’ve got to get my rate as low as I can or I won’t win the deal.

00:29:58.697 –> 00:30:09.497
Giles: Well, at some point, you got to sell on yourself and your technology, and you have people that are going to give them a two-terminal system, but I got to be competitive on the rate.

00:30:09.597 –> 00:30:17.977
Giles: Well, you’re not making money on any of the other stuff, so you really need to focus on like, is this enough to justify having this person as a customer?

00:30:17.977 –> 00:30:33.197
Giles: If you sign them up and your residual is 100 bucks a month, you’re probably better off without that customer, and that has been probably the biggest obstacle, is getting these people to want to engage in the pricing and how all the tricks work out there.

00:30:33.197 –> 00:30:35.697
Giles: Now, we have an awesome staff for that.

00:30:35.697 –> 00:30:44.417
Giles: Nick Kalich here is a payments expert, and he is able to break it down and explain, okay, here’s where they’re getting hit now.

00:30:44.417 –> 00:30:50.737
Giles: But, I mean, educating themselves on that piece is existential.

00:30:50.737 –> 00:30:53.857
Giles: You’re not going to be around, because there’s no other place to make money at this point.

00:30:53.857 –> 00:30:57.857
Giles: So you need to take that piece serious and get educated on it.

00:30:57.857 –> 00:31:08.097
Giles: We’ve really done a whole lot of work to chew that up for you and make it something that is understandable, that you can explain to your customer.

00:31:08.197 –> 00:31:13.297
Giles: We actually give you a whole presentation piece to say, here’s what you’re paying now, and here’s what we’re going to charge you.

00:31:13.297 –> 00:31:19.437
Giles: And you can go through all the fees and how you got to that, but you can show them the savings that you’re going to give them right then.

00:31:19.577 –> 00:31:22.297
Giles: And it’s a pretty compelling sales pitch.

00:31:22.297 –> 00:31:26.397
Giles: But you can’t give away everything, and some bars still want to do that.

00:31:26.397 –> 00:31:29.517
Giles: It’s like, this is the one place you kind of got to dig your heels in.

00:31:29.517 –> 00:31:32.717
Giles: If you can’t make money on the payments, you’re not going to make money, period.

00:31:33.817 –> 00:31:36.237
Giles: You know, the break fix model will eat you alive.

00:31:36.237 –> 00:31:45.877
Giles: You know, when you’re Hass and Sass and you’re not getting a service contract anymore, you know, you got to focus on the one place that you can still make your money, and that’s the payments piece.

00:31:45.877 –> 00:31:50.937
Giles: And, you know, I think that those have given that a very bad reputation.

00:31:50.937 –> 00:31:55.737
Giles: And one of my goals is to bring some transparency and integrity to that side of it.

00:31:55.737 –> 00:32:02.117
Giles: But yeah, if there’s any advice I can give to Avar out there, you know, don’t keep your head in the sand on the payment stuff.

00:32:03.497 –> 00:32:09.577
Giles: It’s intentionally confusing, but we can break it down for you and make it make a little more sense.

00:32:09.577 –> 00:32:14.597
Roddy: Yeah, and can you talk about how you approach payments from an ISV perspective?

00:32:14.597 –> 00:32:25.797
Roddy: Because if memory serves me right, well, first, we just recently had a niche and startup ISV community meeting, and we had some folks on there who were very much, I’m an ISV and I’m payments agnostic, right?

00:32:25.797 –> 00:32:29.697
Roddy: Like whatever you want to do as a reseller, whoever you want to bring it.

00:32:29.697 –> 00:32:33.017
Roddy: My understanding is, John, you were not payments agnostic, is that correct?

00:32:33.017 –> 00:32:36.457
Giles: No, that is 100 percent correct.

00:32:36.717 –> 00:32:43.177
Giles: I know that there are people out there that feel that that’s some noble thing that they’re doing, and it’s really a fool’s errand.

00:32:43.177 –> 00:32:52.077
Giles: The payments piece is so central to this that for you not to take it serious on the behalf of your VARs is corporate malfeasance.

00:32:52.397 –> 00:33:05.297
Giles: I’ve seen some people beating their chest and it’s like, I’ll talk to them offline and say, that’s cool that you made how many hundreds or how many thousands of dollars this month selling your software, one license at a time.

00:33:05.297 –> 00:33:08.157
Giles: Okay, where are you going to get the money to come up with your new version?

00:33:08.157 –> 00:33:10.437
Giles: You’re selling a 20 year old product.

00:33:10.437 –> 00:33:14.257
Giles: You’re selling a database that was obsolete in the 90s.

00:33:14.257 –> 00:33:20.797
Giles: Where are you going to get the money to invest in the next generation of your software so that your VARs have something to sell in 10 years?

00:33:20.797 –> 00:33:25.557
Giles: Because you won’t be able to sell Windows POS from the 1990s in another 10 years.

00:33:25.557 –> 00:33:26.757
Giles: And none of them have an answer to that.

00:33:28.817 –> 00:33:29.517
Roddy: So, how do you do it?

00:33:29.517 –> 00:33:33.957
Roddy: Because we were talking about the independent mesh network of entrepreneurs.

00:33:33.957 –> 00:33:42.157
Roddy: One thing that I know from being the CEO of a company, of a non-profit that serves a bunch of entrepreneurs, they want to do things their way, right?

00:33:42.157 –> 00:33:43.237
Roddy: You can’t do too much.

00:33:43.237 –> 00:33:46.117
Roddy: Here’s exactly how you’re going to behave, right?

00:33:46.117 –> 00:33:49.817
Roddy: Because the entrepreneur is going to be like, hey, I’m steering my own ship here.

00:33:49.817 –> 00:33:59.197
Roddy: So when a VAR comes to you, I guess what do you say to them if they say, hey, I want to bring all these different processors, but you’re saying, no, this is the path that we’re going to go down from a payments standpoint.

00:33:59.197 –> 00:34:00.837
Roddy: How does that conversation go?

00:34:00.837 –> 00:34:02.077
Roddy: What do you show them?

00:34:02.077 –> 00:34:03.817
Roddy: What do you share with them?

00:34:03.817 –> 00:34:07.097
Roddy: I’m curious to get into the nuts and bolts of the payments on the back end.

00:34:07.097 –> 00:34:18.117
Giles: I mean, I think just to pull it all together, look, a VAR could go out and he could broker his own payments deal with the ISO down the road.

00:34:18.117 –> 00:34:22.337
Giles: As some of these payments, agnostic POSs would have them do.

00:34:22.337 –> 00:34:28.137
Giles: I would put the question back, how many of those VARs do you think are qualified to negotiate that deal?

00:34:28.137 –> 00:34:43.417
Giles: 10 percent, maybe on a good day, so the other 90 percent are getting screwed, and they are basically subsidizing the local ISOs, vacation home and on a boat and whatever the heck else, and where does that come back to?

00:34:43.417 –> 00:34:44.177
Giles: It doesn’t.

00:34:44.177 –> 00:34:47.277
Giles: If you work with us, we can negotiate that deal.

00:34:47.477 –> 00:34:52.657
Giles: We’ve negotiated a very hard-nosed deal, and we have a complete audit of that deal every month.

00:34:52.757 –> 00:34:57.597
Giles: We go through it, make sure the numbers are right, and every bar gets paid fairly.

00:34:57.597 –> 00:35:05.117
Giles: But that money that would have gone to boats and vacation homes for an ISO now goes right into the product that you sell every day.

00:35:05.337 –> 00:35:07.717
Giles: It’s that money goes right back into the product.

00:35:07.717 –> 00:35:12.937
Giles: So in my mind, it’s foolish to do it any other way.

00:35:12.937 –> 00:35:16.717
Giles: Do we want to pay some third party that is going to stick it to your dealer?

00:35:18.437 –> 00:35:25.017
Giles: We had one that we came across recently, I won’t name names, but he had a payments guy.

00:35:25.017 –> 00:35:37.517
Giles: He had his payments guy from down the way, and we pulled apart one of his deals, and I think he was making $100 a month on it, and his payments guy was making $1,700 a month on it.

00:35:37.517 –> 00:35:38.097
Giles: Yeah.

00:35:38.477 –> 00:35:43.977
Giles: That’s the kind of stuff you see when your payment is agnostic, and you don’t keep an eye on things.

00:35:44.397 –> 00:35:56.077
Giles: It’s letting the inmates run the asylum, and your bars are going to get shortchanged, and you can’t sell software at $300, $500 a license for the rest of time.

00:35:56.517 –> 00:36:05.697
Giles: I don’t see where they think there’s a future in that, and I don’t see what they think is noble about letting 90 percent of their resellers get the short end of the stick.

00:36:05.697 –> 00:36:06.037
Roddy: Got it.

00:36:06.037 –> 00:36:07.937
Roddy: No, thanks for sharing your opinion on that.

00:36:07.937 –> 00:36:10.237
Roddy: That’s the interesting thing about the RSPA community, right?

00:36:10.237 –> 00:36:16.477
Roddy: We can have folks say, hey, here’s the way I think to go to business, and others say, here’s how I think the way to go to business.

00:36:16.497 –> 00:36:20.717
Roddy: We all roll up our sleeves, and everybody can pick and choose what works for them.

00:36:20.717 –> 00:36:22.297
Roddy: Last couple of questions, John.

00:36:22.297 –> 00:36:24.197
Roddy: We’re talking about the ISV business model.

00:36:24.197 –> 00:36:28.417
Roddy: How do you see the VAR business model changing in the future?

00:36:28.417 –> 00:36:31.737
Roddy: You’ve talked about how it’s very much dependent on payments.

00:36:31.737 –> 00:36:35.837
Roddy: Where do you see the VAR business model, three to five years or longer beyond that?

00:36:35.837 –> 00:36:38.597
Roddy: How’s that business model going to continue to change?

00:36:38.597 –> 00:36:43.337
Giles: Well, I think that obviously the payments landscape will change over time.

00:36:43.337 –> 00:36:44.777
Giles: People’s buying habits change.

00:36:45.437 –> 00:36:48.577
Giles: Obviously, you have EECOM versus brick and mortar.

00:36:48.757 –> 00:36:57.917
Giles: I think where the VAR has value, and we will continue to carve out value for them, is as things change, as things evolve, we’re the gatekeeper.

00:36:57.917 –> 00:37:06.757
Giles: So I’m not going to do something like a payments agnostic guy would do, where I say, oh, hey, everybody can use Venmo now, and it’s free.

00:37:06.757 –> 00:37:09.977
Giles: Well, okay, well, you just took the air out of your VAR’s balloon.

00:37:09.977 –> 00:37:12.197
Giles: So how does that make sense?

00:37:12.577 –> 00:37:18.857
Giles: So like if we were to do Venmo, say, there’d be a convenience fee for it, and we would split that with the VAR.

00:37:18.857 –> 00:37:25.877
Giles: We are going to be that gatekeeper because once you have that brick and mortar relationship, now you can control who can come and who can’t.

00:37:27.237 –> 00:37:33.317
Giles: To be just haphazardly going about this, like, oh, look, I added a fifth weight, avoid an item.

00:37:33.317 –> 00:37:47.037
Giles: We’re focusing on what is going to keep that VAR relevant, and if being the point of sale, the point of commerce is key to your survival, then we’re going to guard it with our life.

00:37:48.797 –> 00:37:54.077
Giles: It could be Venmo, could be Bitcoin, could be whatever, but we’re going to make sure that nobody gets it.

00:37:54.077 –> 00:37:59.437
Giles: We don’t get a fox in the hen house that totally destroys that VAR’s revenue stream overnight.

00:38:00.677 –> 00:38:09.417
Giles: As we see opportunities to monetize, we will obviously pursue those, but we will share them with the VAR.

00:38:09.417 –> 00:38:13.037
Giles: He’s the guy that’s out on the street servicing it, fixing it, answering questions.

00:38:13.037 –> 00:38:14.777
Giles: He gets a cut of that too.

00:38:14.777 –> 00:38:19.097
Giles: But I often say, we’re not a point of sale company.

00:38:19.097 –> 00:38:24.697
Giles: We are a technology company that facilitates payments.

00:38:24.837 –> 00:38:26.657
Giles: We facilitate commerce.

00:38:26.797 –> 00:38:29.317
Giles: We allow people to buy things.

00:38:30.077 –> 00:38:43.697
Giles: By being at that point where the money changes hands, knowing that that’s where we make our money, then we have to safeguard that and make sure we don’t get a fox in the hen house, but also safeguard the revenue streams for our VARs for years to come.

00:38:43.697 –> 00:38:47.597
Giles: And I don’t think a payments agnostic guy, that’s just not in his lane.

00:38:47.597 –> 00:38:49.717
Giles: He’s like, eh, you can work with your buddies.

00:38:49.717 –> 00:38:52.097
Giles: Well, what if your buddies run you bankrupt?

00:38:52.097 –> 00:39:00.277
Giles: So we’re kind of being not just a trusted advisor, but a guardian of our VARs and making sure that they don’t get shorted by anybody.

00:39:00.277 –> 00:39:12.037
Roddy: Yeah, so it sounds like your guidance is, the good news is for VARs, there’s a ton of options and technology options, services options, technology opportunities for them.

00:39:12.037 –> 00:39:18.837
Roddy: But they’ve got to make sure that they don’t just dive into them head first without doing the old measure twice, cut once kind of thing.

00:39:18.837 –> 00:39:31.397
Roddy: Because I can say, I’ve fielded the most consistent call that I fielded over the years, is a VAR coming to me and saying, I’m being jerked around, I’d like the RSPA to take a stand against this vendor.

00:39:31.857 –> 00:39:35.437
Roddy: And then we’re able to say to them, like, what does it say in the contract?

00:39:35.437 –> 00:39:37.177
Roddy: Well, it says in the contract, right?

00:39:37.177 –> 00:39:41.277
Roddy: That they can do this, but I don’t like that they’re doing this, it’s not a good business practice.

00:39:41.277 –> 00:39:45.957
Roddy: And we’re like, yeah, like the RSPA, again, we’re an independent nonprofit, so we don’t take sides.

00:39:45.957 –> 00:39:48.237
Roddy: But also, that’s a contract thing, right?

00:39:48.237 –> 00:39:52.997
Roddy: And so it’s like, beware upfront when you’re signing that contract, right?

00:39:52.997 –> 00:40:05.077
Roddy: And that’s kind of what it sounds like you’re saying, a lot of opportunities to make sure you just don’t go in full bore, make sure you’re certain that it’s going to be something that benefits you financially, and isn’t just a shiny new tool.

00:40:05.077 –> 00:40:06.757
Roddy: If I’m understanding what you’re saying, John.

00:40:06.757 –> 00:40:06.997
Roddy: Yeah.

00:40:07.117 –> 00:40:11.117
Giles: And I mean, like to those contracts, don’t sign without a lawyer looking at them, things like that.

00:40:11.117 –> 00:40:15.477
Giles: But I know you guys had Bob Goldberg for many years, that was a great resource.

00:40:15.477 –> 00:40:17.437
Giles: And I’m drawing a blank on who they were.

00:40:17.437 –> 00:40:17.957
Roddy: Jill Miller.

00:40:17.957 –> 00:40:18.137
Roddy: Yeah.

00:40:18.137 –> 00:40:20.397
Roddy: And Jill Miller has payments specialty.

00:40:20.397 –> 00:40:21.177
Roddy: She won’t review.

00:40:21.177 –> 00:40:33.237
Roddy: Well, I mean, somebody could pay her to review contracts, but that is her big guideline for folks is, make sure you read all those details and get a, if there’s anything that you’re not sure of, make sure an attorney looks at it.

00:40:33.237 –> 00:40:36.397
Roddy: I know it’s expensive to get an attorney.

00:40:36.397 –> 00:40:39.037
Roddy: Oftentimes you’re like, I’m not going to pay him that much per hour.

00:40:39.037 –> 00:40:45.317
Roddy: But you know, John, you’ve seen the other end of it where people are like, man, I wish I’d have spent that 500 or $1,000 or whatever it is.

00:40:45.317 –> 00:40:45.517
Giles: Yeah.

00:40:45.857 –> 00:40:49.037
Giles: I’ve been that guy in my career.

00:40:49.037 –> 00:40:53.557
Giles: Discount or no legal counsel will always cost you more.

00:40:53.557 –> 00:40:53.777
Roddy: Yes.

00:40:53.777 –> 00:40:58.357
Roddy: I would say the things you don’t want to use coupons for, one is legal advice, another one is surgery.

00:40:58.357 –> 00:41:02.057
Roddy: You don’t want to be like, why did you choose that surgeon?

00:41:02.057 –> 00:41:03.217
Roddy: He was the cheapest.

00:41:03.517 –> 00:41:06.857
Roddy: You’re like, you’re going to pay for that in the long run.

00:41:06.857 –> 00:41:07.617
Roddy: All right.

00:41:07.617 –> 00:41:09.897
Roddy: We’ve only got a couple minutes left and we’ve covered a lot.

00:41:09.897 –> 00:41:16.097
Roddy: I’m curious, John, what would be your final advice for our audience related to just leadership in general?

00:41:16.097 –> 00:41:24.917
Roddy: Let’s say like you have a three-minute ride share with a small business leader and they say to you, what’s your advice for adapting and staying relevant in the future?

00:41:25.997 –> 00:41:29.237
Giles: I think you just always have to have an eye for what’s coming next.

00:41:29.997 –> 00:41:35.097
Giles: I remember Jack Welsh saying like your best business leaders can almost see around the corner.

00:41:35.097 –> 00:41:40.037
Giles: I think that that’s overstating the fact that they’re always looking around the corner.

00:41:40.037 –> 00:41:40.977
Giles: What’s coming next?

00:41:40.977 –> 00:41:44.937
Giles: What innovation is coming that I don’t want to miss out on?

00:41:44.937 –> 00:41:47.397
Giles: I think that obviously we’re one of those.

00:41:48.057 –> 00:41:58.757
Giles: I’m hoping people will look me up after this because we’re innovating like nobody else every day and we’re fully invested in the VAR model like nobody else.

00:41:58.757 –> 00:42:03.477
Giles: There’s a lot of me too POS like, hey, here’s our shiny POS, go sell it.

00:42:03.477 –> 00:42:05.437
Giles: We’re fully invested in your success.

00:42:05.657 –> 00:42:10.217
Giles: Yes, we’ve got a rock solid point of sale, but that’s just the tip of the iceberg.

00:42:10.617 –> 00:42:15.477
Giles: We are looking for that technology that the VAR will need to be successful in 10 years, 20 years.

00:42:15.877 –> 00:42:25.537
Giles: And a different business leader said, when a better solution comes out, we’ll be the ones developing it.

00:42:25.537 –> 00:42:28.957
Giles: That’s the kind of the technology leadership we want to be.

00:42:28.957 –> 00:42:34.937
Giles: We really want to take, and I always go back to NCR and micros.

00:42:34.937 –> 00:42:41.557
Giles: I want to take what NCR and micros did when they became great and learn from the cautionary tales of what happened after that.

00:42:43.997 –> 00:42:46.517
Giles: Obviously, NCR was big on training.

00:42:46.517 –> 00:42:52.097
Giles: Micro is very big on organization and putting together quality, durable products.

00:42:52.097 –> 00:43:03.257
Giles: We really want to just take that, build on that, and then look at what’s coming next and find how we can pull new innovations in things like AI, potentially cryptocurrency, stuff like that.

00:43:03.697 –> 00:43:05.817
Giles: We’ve got our eye to the future for that.

00:43:06.317 –> 00:43:13.457
Giles: As a VAR, I think you’ve got to do the same thing, but also have a partner that has an eye for the future, and isn’t just riding it out to retirement.

00:43:13.457 –> 00:43:18.577
Roddy: Yeah, and like how you said, in order to see around the corner, you actually have to be looking around the corner, right?

00:43:18.577 –> 00:43:21.357
Roddy: You’ve got to put your eyes in that direction.

00:43:21.357 –> 00:43:24.517
Roddy: I framed up that final question about three minutes in a ride share.

00:43:24.517 –> 00:43:26.597
Roddy: You and I were in a vehicle together at one point.

00:43:26.677 –> 00:43:34.497
Roddy: If you remember the first time I visited your office down there in Butler, hopped into your pickup and we’re going down, trying to think, was it Route 19 or something?

00:43:34.497 –> 00:43:38.097
Roddy: You just took a right into some land that you would bought there.

00:43:38.277 –> 00:43:44.137
Roddy: I’m glad to see from a Western Pennsylvania standpoint, I’m glad to see you investing in Western Pennsylvania.

00:43:44.137 –> 00:43:54.337
Roddy: Too many people, maybe this is talking to myself because I live in Raleigh, North Carolina, but a lot of companies picked up and moved out as opposed to investing in there.

00:43:54.337 –> 00:43:56.017
Roddy: I appreciate you doing that.

00:43:56.017 –> 00:44:01.097
Roddy: I appreciate you providing guidance to VARS and everybody in our industry, John.

00:44:01.097 –> 00:44:02.137
Giles: Thank you.

00:44:02.137 –> 00:44:02.617
Roddy: Yeah.

00:44:02.617 –> 00:44:03.797
Roddy: Thanks for the tour.

00:44:03.797 –> 00:44:06.257
Roddy: Well, that does it for this episode of The Trusted Advisor.

00:44:06.257 –> 00:44:13.177
Roddy: If you enjoyed our discussion, be sure to subscribe to the RSPA YouTube channel and The Trusted Advisor podcast so you never miss an episode.

00:44:13.177 –> 00:44:17.617
Roddy: Before we go, big thanks again to John Giles for sharing his wisdom with us today.

00:44:17.617 –> 00:44:25.697
Roddy: Thanks also to RSPA Marketing Director, Chris Arnold for his production work, Joseph McDade for our music, and last but not least, thanks so much to you for listening.

00:44:25.697 –> 00:44:32.697
Roddy: Our goal at the RSPA is to accelerate the success of our members in the retail technology ecosystem by providing knowledge and connections.

00:44:32.697 –> 00:44:36.077
Roddy: For more information, please visit our website at gorspa.org.

00:44:36.697 –> 00:44:39.997
Roddy: Thanks for listening and goodbye, everybody.