How easy do you think to transform a service company into an award-winning software business? Our next guest, Eric Simone, CEO and founder of ClearBlade, an enterprise IoT platform, and Edge AI software company from Austin, Texas, United States, knows everything about it. We at Relevant Founders Podcast had a great conversation with Eric about his meandering path to success with a 35-people team.

From client-server software and services to IoT software development

Eric Simone has worn many hats throughout his career – programmer, systems engineer, software architect, and business founder. But his finest hours began when he and his CTO Aaron Allsbrook decided to venture into edge computing and build software for the Internet of Things.

In 2013, no one was talking about edge computing. It was a time when the cloud began to roll in, and smart mobile devices started to dominate everywhere. Eric and Aaron instinctively understood that AI, IoT, and edge-native computing would be the next Big Things. 

They wanted their future solution to be able to deploy and manage IoT systems on the edge, allowing seamless communication with on-premise devices and cloud parent systems. 

But before, they had to transform the service business into a software development business. It turned out to be much more difficult than Eric had imagined.

“We needed to change our personnel completely and took a 35-person company down to five. But for me, they were not just employees; they’ve ended up being family and friends. So it was very gut-wrenching to make that transformation. I worked hard to find the right jobs for all of these because they were really smart people. They just didn’t fit the new paradigm for what we’re going to be. Besides Aaron and me, one person was left in the business from that era, and the rest had to be hired from scratch.”

First MVP: When content is better than form

ClearBlade released its IoT platform in 2014 and its Edge platform in 2016. It was the very first Edge software product launched in the industry.

Today ClearBlade is helping enterprises engineer and run secure, real-time, scalable IoT applications. The company builds software from the ground up and provides the only proven, repeatable IoT Enterprise Core for Edge and cloud on the market. ClearBlade’s patented communications-agnostic AutoSync technology maintains the client’s software environment and their updates.  

However, we, like you, are very interested in what the original MVP looked like and how it all began.

“It looked like warmed-over dog food. From a UI perspective, it was not very impressive. But some decisions were incredibly smart and prescient, like serverless, API-based computing. The challenges were that there was no roadmap for what we were building. There were examples of what other people were doing. But we didn’t follow necessarily.” 

“We forged our path and engineered it in a completely different way. And even today, when you look at our competitors, there is a marketplace ecosystem. All those folks who have built the software and what I would call the traditional way use other cloud companies’ components to create them.” 

“We took an approach that’s more like the 1980s: we built everything ourselves from the ground up, which is a very long engineering path. We use some open source, but we try to innovate internally and make it as open and usable as possible.”

“I have to give my CTO a lot of credit here. When I said, ‘Build me a box that can run on any cloud, integrate with enterprise and legacy systems, scale to millions of devices, provide security from the ground up, and be extremely cost-effective,’ he asked sarcastically, ‘Is that all you want?’ It wasn’t just one discussion – it was three months of debate. Then, a few months later, Aaron called me and said, ‘I think we can do this.’” 

Old school and still no outsourcing

“Over the years, I’ve learned that good software is typically built by very small, dedicated teams. We’re adding people to the team, but we’ve stayed very true to our engineering. And That allows us to maintain quality control and maintain security. I’m not saying we won’t outsource some stuff. As we move forward, we can change our perspective on some things.”

“I like to stick to the old-school way of building a team. We stayed small and didn’t outsource during the pandemic, which helped.”

“And so, we squatted and worked on products throughout 2020 and 2021. They were able to do something amazing, like building the Intelligent Assets.”

“And one of the reasons we don’t outsource is that we’d have to bring that group up to speed and bring them into the inner circle. When you do that, it makes more sense to hire them full-time.”

Core challenges to a small brave team

A small company has difficulties that it must overcome. We asked Eric to list the most important ones.

“First –  we’re roughly 35 people. But we punch way above our weight because we’ve got big clients globally. We have great partners; we know what we don’t want to get back into services; so we let our partners handle all of that.”

“Number two is burnout risk. My job is to ensure quality is high and people aren’t burning out. You’ve got engineers that are working at an extremely high level. We implemented the no vacation policy way back, meaning you don’t have to request a vacation; you have to take it and let us know. Take as much as you want during the year.”

“The positive of that is people have that flexibility and the freedom to ensure they don’t burn out. The negative is that I have such a hard-working team that everyone looks around. And when no one’s taking a vacation, you almost have to push people out the door and say, ‘It’s time.’” 

“And we treat everyone like a pro when they walk in the door, straight out, whether it’s straight out of school, even as interns. People will stay if they believe in the mission. It’s the glue that holds everything together.”

“Number three is marketing. That’s one of our weaknesses; we’re not an extremely loud marketing company. But when 700 other companies suddenly jumped into IoT, Amazon bought one of our peers and said we would make IoT and free it; that’s a bit of a challenge.”

“The name ClearBlade means Cut through the ‘BS,’ and I, a software person from the 90s, got frustrated by the promises that marketing and sales made versus the reality of what the software did. And so we vowed to ensure that we always live up to what we say our software does is what it will do.”

Struggle as the gift

One of Eric’s biggest business challenges so far was in March 2020 – at the beginning of the Covid pandemic. They lost $8 million in contracts right before closing them.

“Then I told my team: “We are a great company if we can survive this. I know companies that raised too much money and didn’t generate enough revenue. But if you’re not growing, it’s time to sell. So we decided to stay small, be efficient with our capital, and wait for our time.”

“The pandemic had a little bit of a delayed our coming-out party. I mean, it was added delay for everyone. Then I realized that it’s a blessing that I was terrible at fundraising a few years ago because we could get into trouble. Lots of others have come and gone. But we’re still here.”

Today ClearBlade has 43 investors, including Purdue Ventures and Purdue Research Foundation. ClearBlade’s IoT Core has been reviewed and approved by Google as the perfect Google IoT Core replacement offering. Therefore, Eric does not exclude the company’s growth, for example, up to 100 employees. 

“We’ve been successful because we’ve been working so hard. I want a few years of victory laps, but I realize it will never be easy. I saw a speech by a Duke women’s basketball coach a couple of weeks ago, saying, “Don’t believe that sometime in the future, this is going to get easier.”

Steady movement in an innovative environment

ClearBlade has greatly contributed to disseminating advanced technologies and has received many awards. One of them is “Artificial Intelligence: Enterprise Solution” from Compass Intelligence Software for ClearBlade’s Intelligent Assets, used by Fortune 500 companies to track, monitor, and control their assets.

The company was also named “Edge Computing Company of the Year” in 2021 by Compass Intelligence and won the CompassIntel IoT Innovation 2020 Smart Transportation award. But how do they manage to be at the forefront of innovation?

“We looked at it all very differently. We made key engineering decisions early and defended them, not straying from this principle.”

“It’s proven out over time. You don’t always have to jump on the latest trend bandwagon. Take containers, for example. We use them, but we don’t need them for a product. We do it because we are educated on containers, and our partners deploy their software with these containers.”  

“Discipline between me, the idea guy, jumping on the latest trend, and Aaron, the researcher, keeps our vision in control and the team from getting too big. We don’t go in 18 different directions; we stick to our core, but delivering cross-industry is also a huge challenge.”

“For example, we’re not oil and gas experts, but we work with one of the world’s largest oil and gas services companies. And they’re selling to the top 25 oil and gas companies using our product. The analogy I use: we’re the Intel inside.”

“We work with the largest rail providers. And it only happened because one of our first clients needed edge computing. So, the rail industry is 150 years old. This is not the fastest-growing industry. There’s a lot of outdated equipment out there. They are methodical and security conscious, as they should be. But from an engineering standpoint, it’s a very limited, rough environment.” 

“So it was a challenge. But it also worked because our engineering had to be so good that you could run it across a railroad crossing in the middle of nowhere without a connection.”

Little snail, slowly climb Mount Fuji

Finally, we asked Eric what advice he would give those just starting their journey. And here’s what we found out:

“Now I know everything that can go wrong. But this is one of the problems of wisdom and experience, as you can lose a younger, fearless version of yourself. So keep the mentality, like you’re 27.”

“Another thing I’ve learned over the years is that it’s important to be a better listener. Listen to the people around you who think differently, don’t have the same risk profile, and are more thoughtful and research-driven.”

“Because not every startup is going to be an overnight success. Most are not. And some of the best stories are the ones that take the longest. Enjoy the journey while you’re doing it. Eventually, if you have a great team, if they’re building a product that matters and is superior to others, you’ll succeed.”