Bringing the advantages of new technologies to traditional business models is a hallmark of Kinetic, founded by Harbert alumnus Jay Brandrup. In this podcast, he discusses the value of flexibility in business and the importance of balance in work and life.
When he began his business in the mid-1990s, he said, a lot of business people thought the internet was a fad. That was a lot to overcome, but he learned that even if you’re starting out in tough times, that’s not a bad thing because it forces you to build a business model that works in tough times.
Brandrup, an honors graduate in Finance, serves on the Harbert College of Business Advisory Board.
Bringing the advantages of new technologies to traditional business models is a hallmark of Kinetic, founded by Harbert alumnus Jay Brandrup. In this podcast, he discusses the value of flexibility in business and the importance of balance in work and life.
When he began his business in the mid-1990s, he said, a lot of business people thought the internet was a fad. That was a lot to overcome, but he learned that even if you’re starting out in tough times, that’s not a bad thing because it forces you to build a business model that works in tough times.
Brandrup, an honors graduate in Finance, serves on the Harbert College of Business Advisory Board.
Narrator:
Welcome to the Harbert College of Business podcast.
Currie Dyess:
War Eagle. I'm Currie Dyess.
Sarah Gascon:
And I'm Dr. Sarah Gascon. Welcome to another episode of the Harbert College of Business Podcast. Today's guest is Mr. Jay Brandrup. Jay is a founder and principal of Kinetic. Under his guided hand, Kinetic has been molded into a company that focuses on bringing the energy of new technologies to traditional business models. Jay is an honors graduate of Auburn University, where he earned his Bachelor's of Science in finance. He currently serves on the Harbert College of Business Advisory Board and served on the board for the Greater Birmingham Auburn Club.
Currie:
In today's episode, we will discuss the value of long-term strategic and competitive advantages, why recruitment is key, and the counterintuitive approach to growth. Jay, welcome and War Eagle.
Jay Brandrup:
War Eagle. Thanks for that intro, and for having me on.
Currie:
Let's jump right in. How did you get to Auburn University?
Jay:
Man, it is definitely not sure your traditional route. I am a Wisconsin native. South Dakota born, if you can believe that. Even lived in Iowa as a young boy, and truth be told in high school, I thought Auburn was the private school in Georgia. That's how dumb I was. I went my freshman to the University of Wisconsin Oshkosh and loved it there. My friends went there, and played division three golf, decent amateur golfer, this guy.
And in the middle of my mid-season form an early snow storm sidelined me. Frustrated by that, faced with the prospect of putting indoors all winter, having to relearn my swing in the spring, I trudged to the Oshkosh library. True story, y'all. I've photocopied from the encyclopedia, 1991 after all, an average US climate map, and I drew a line across it, mason Dixon-y. And I said to myself, not so humbly, but just to myself, I said, "If I transfer below this line, play year round, I'm going to be incredible." Bring on the tour. Right?
I didn't know a soul in Alabama, and I kind of ruled out schools and states, Texas and Arizona. Arizona State, 40,000 people plus. Florida, no thanks. Still snows in Chapel Hill. And I came down spring break to visit Alabama and I actually visited first at that school across the state in Tuscaloosa. Did not, with respect did not love it there, and kind of on a whim I road tripped over to Auburn, no appointment, and just walked onto campus, met the student recruiter.
And boy meets Auburn. Just truly fell in love with Auburn that day. I'm sure the Byron's Smokehouse barbecue didn't hurt. I'd never had sweet tea before that moment as a matter of fact, in my non-air conditioned Honda CRX car. But I just knew that was the place I wanted to be. So I transferred immediately.
One of the best decisions I ever made. Although I should note a footnote to the golf story. It turns out that I am not that good at that sport. I tried to walk on to Coach Griffin's '91 team, didn't have the scores. Never played a stroke for my now beloved Tigers. Pretty funny.
But it got me to Auburn and it let me be involved in other things that division one athletes, they're almost semi-pro, right? It's hard to join fraternities and get involved in student government and all the activities I was fortunate to be involved in. And it was in that student government treasurer's office as an assistant treasurer that I discovered the web in 1994, and it captivated me. As much as it does now, it captivated me then.
Sarah:
So you started your business in 1995 and you have navigated through several recessions and bubbles. How were you able to survive? And what were some of your key factors that kept you afloat?
Jay:
Sure, sure. First of all, we started in my apartment, Wood Springs, green roofs next to Target here in the Inverness area of Birmingham. And we did so to keep our costs down and be smart. So many businesses get in over their head with general rent and overhead. So that was a strategic decision we made early on.
We stayed diversified among clients. A lot of people in our industry, it's easy to just keep saying yes to a client that has a lot of work, and we've always wanted to stay very diversified industry-wise, geographically. So no one client dominates our business. Some of our peers have 50, 60, 70% or more of their clientele concentrated in really one or two clients. We're real lucky to have a very diversified client base. I think that's helped protect us in recessionary times.
And 1995 wasn't a great time to start the business either. I've often counseled startups that starting in bad times might be one of the best things you can do. So many people start in good times, right? They see the market potential and they have the extra dollars to do so. But when you start in bad times, it forces you to build a business model that works in bad times. As you can imagine, if you've only started your business in good times and the bad times inevitably come around, you can get in trouble pretty fast.
We also not trying to be the biggest at what we do. We're a boutique firm by design, staying very nimble, agile. We also built a great team, a very diverse team that can multitask and do a lot of different things as well.
We also invested and knew the importance of investing in building our systems and our processes in order to not drop balls. You can mess up pretty easily. There's a lot of things to do, a lot of minutiae to make a world-class website happen. And we still make our mistakes. Make mistakes faster is actually one of our mantras. But we learn each time and try not to do it again.
We also, I would attribute, I mean, I've been a daily Wall Street Journal reader, gosh, since late high school. Not for the hardcore finance, or even the editorial pages, but there's a lot of great daily business lessons in there that as a voracious reader, I think it's important to learn from others to not make those mistakes ourselves. I would say that would be some of the key factors that helped us over these 20, now 26 years. Pretty crazy.
Currie:
We think it's fascinating that when so many businesses close their doors within the first five years and virtually almost all of them either sell or close up shop within 10 years, and here you are working on three decades. Can you explain some of your strategies and perspectives on what gives you your competitive advantages?
Jay:
Sure. We also knew that smart cousel, we tried to associate ourselves with people that had been there and done that. We hired some gray-haired consultants. We want to learn from those that have done it before us. And we spent a lot of time and money on our strategic thinking, our planning, and pulling that out of my, and our team's heads to make sure we built the right kind of business that would have that lasting power.
Kinetic's driving force, perhaps no surprise is technology. Really one of only 10 driving forces a business can have. It's been the heartbeat of Kinetic and frankly influences everything we do. But our sustainable competitive advantage is flexibility. We feel that being flexible, nimble, agile, all the things that means to our clients has really been what sustained us. It's embedded in our organizational DNA.
Really in my opinion, I've come to believe there are really only five sustainable competitive advantages that a business can draw from. They are cost, quality, timeliness, innovation, and flexibility. We debated heavily between quality and flexibility, but flexibility won the day and it's shaped our hiring, our systems, our processes, our team ever since. Who we choose as partners and, of course, clients that want, appreciate, and need that flexibility.
And here's the neat thing about that list of five. You don't have to get lucky and pick the right one, no matter what business you're in, right? The key is just to pick one and stick to it. For example, take, gosh, I don't know, take a dry cleaning business. They could be driven by cost, right? Dollar shirts. It could be driven by quality. Perfect pressing, never pop a button off, right? It could be driven by timeliness. Same day delivery, right? It could be driven by innovation. What would innovation be for a dry cleaner? Oh, perhaps environmentally friendly machines. It could be driven by flexibility, which might mean that for some clients, they can rush it and deliver it to their house or work from time to time.
But if that dry cleaner tries to do all five of those things, well, I don't think they're going to last very long. They're going to be in trouble. And that was one of the things we learned early. The best things we ever did was start to say no to projects that weren't a good fit for us. It's so easy in the startup phase. And that first year we did it too. We tried to say yes to everybody. And I think looking back, that was one of the best things we ever did back in '95 and '96.
In some ways the good news there is that Birmingham businesses thought the web was a fad at that time. So in some ways we had time to make our mistakes and learn our lessons.
Sarah:
Can you define for our listeners what flexibility means for you your business and how that has helped you with your competitive advantage? Because as we opened up, there have been recessions and bubbles and then craziness each decade. So what does that actually mean, if you could define it for our listeners?
Jay:
Sure. First off it requires you build a team and hire people that are innately and inherently flexible. Sounds easy to say. Who doesn't want to answer yes to the "Are you flexible?" Question? But doing surveys and studies and putting them through some tests, if you will, to make sure that they're truly at their core flexible has been pretty important.
You will not love this industry if you're not innately flexible, let alone this company. Our clients surprise us every day with fires that need to be put out or just, it might be, "Hey, can you travel across town for a meeting this afternoon?" You know, keeping flexibility in your schedule to be able to say yes to that is important. It might be on the, hopefully not, but on the financial side, "Can we spread this project up into this many payments versus the usual number of payments?" Right?
And if you haven't built systems that accommodate that flexibility, you can't do it. If the dry cleaner can't put you on account or skip a payment, if your credit card's not working, you're not going to be able to check out. So building tools, systems, driven by people who are flexible from the get-go is absolutely core, I believe, to our past and then hopefully future success.
Currie:
Jay, you have so much energy and so much experience. It's easy to tell through just this very simple interaction with you. What is it that keeps you motivated?
Jay:
Well, first of all, thanks. That's not caffeine by the way. I truly am. This is my default state of general passion and excitement for better or worse. What keeps me motivated? Man, of course my family near and far, my team and our team's families for that matter. All the people around me keep me motivated, but I really do love what I do. And I'm so lucky to have found that at an early age.
People are always so complimentary, you know. "You started your business out of Auburn." But the truth is that was the time to start it, right? A couple of small family loans, luckily, and fully paid back. Doing what you love. It hasn't even felt like work all these years. I remember going to the Auburn mall, y'all. I think it was Books-A-Million, the old magazine rack. And I remember being motivated more by the high-tech, the Wired magazines of the world. Even though I was a finance major, not the Fortune and Forbes, right? And I'm still enthralled with this medium 26 years later.
Additionally, I would say, what motivates me is that I've done the math on how much time you have in a business career. Not to get too philosophical, but if you extrapolate out the average 40 hours a week, times 50 weeks a year... Why the freest country in the world only takes two weeks off on average is a whole nother story... Times 50 years, y'all. If you're even lucky enough to live that long and be healthy enough to work 50 years in your chosen career or careers. That's only a hundred thousand hours.
Again, maybe it's just the old finance major in me, but I thought that's just crazy small. I must not have done the math right. I must not have carried a zero. There's no way. But 40 times 50 times 50 is only a hundred thousand hours. And to me, anyway, that sounds very small.
And to get a little more philosophical, you've got another a hundred thousand for personal, family, friends time. And as a human, you've got to sleep about a hundred thousand hours, which is crazy that we're literally unconscious, horizontal for a third of our lives. But taking that back, half your waking life is at your work. If you are lucky enough to be born in this country, or be able to come to this country, and to be able to choose your vocation at a school of your choice, man, pick something you love. Surround yourself with the people, the team members, the clients, the partners that you want to be around, that you trust and respect being around. Get some fun office space, because again, it's half your waking life. That's what motivates me.
Sarah:
So what would you say, what role has Auburn University played in your success or the success of Kinetic?
Jay:
Auburn has given me so much. It really has. As discussed earlier, I found the web through Auburn organizations that I probably would not have done. I was the guy that used to sign up fraternity brothers for an email address back in '93, right? You used to have to apply and wait weeks, three or four weeks, for a university computing to give you an email. And all my friends would say, "Why would I need an email? You're the only person I know that has it."
But as we all know, it happened pretty fast, '93 and '94. Downloading Mosaic, and then later Netscape in those student government halls absolutely was a pretty big epiphany, and changed my whole direction from managing a bond fund in Manhattan to the realization that I wanted to help our clients understand and apply this ever-changing web of world.
Also, at Auburn, I learned a lot of lessons as a fraternity treasurer. Of course, my studies in the Harbert College of Business taught me so much. Some have suggested that my and our grounding in finance has led us to be from day one with clients focused on ROI, right, on return on investment. Whereas some of our peers in our industry past and present are either right-brained or left-brained. They're either talking about, "Oh, the logo spins. Look how cool it looks." Or the other side, the technical side, the "Man, that database query sure is robust," right?
Our world really is a lot of art and science, the left and right brain stuff. And being able to have beyond me, a bunch of smart business majors around me, again, talking ROI from day one with our clients. I think that has definitely played a role in our success as well. My student rates subscription to the wall Street Journal didn't hurt either. Thanks guys.
The Auburn creed. I should quote some of that too, as a Midwesterner. I mean, what did Petrie write? "I believe in work, hard work." I mean, this is a hard business. It is not a sit back and easy recurring monthly revenues. We got to be smart, smart, smart all the time. Estimate well, and try to execute throughout the peaks and valleys of our client's needs. You wouldn't start this business for the money, or for the ease of doing it. You have to love it. And we've seen that play out through other companies that have done it for various reasons. It's hard to have longevity if the team is not truly passionate about what we're able to create and help our clients do every single day,
Currie:
Jay, we're interested in finding out a little bit why you were so fascinated with technology and creating a web based business when in the early nineties that was kind of an obscure career path.
Jay:
Yeah, I guess it was. I don't know. I guess I was the classic. I was a son of a parents who had their own insurance business. So seeing what hard work led to growing up perhaps was a factor. I think it's good to be exposed to entrepreneurship when you're young. I was the classic child entrepreneur from selling lemonade, mowing lawns. I mean, I remember hand cutting straw, y'all, to weave mats for duck hunters in Wisconsin. The DECA business clubs in high school. I had my own video production business in high school, shooting weddings, stuff like that.
So I've always gravitated towards that. But I really do think it kind of chooses you and it's not for everybody. I mean, it's a responsibility, and not suited for all people. I mean, the highs and lows of entrepreneurship. You can go from, "This is amazing. This is so fun," to "Man, I was wrong, this is hard," in the same hour sometimes. That's pressure, and again, responsibility for our team, our clients, and families.
Sarah:
So based off of your experience as a child and your family, your parents, would you say that's an important pursuit, the pursuit of entrepreneurship at a young age?
Jay:
I definitely think it's good again to expose kids. I mean, just the show Shark Tank, as we all know, has exposed entrepreneurship to so many young people. So yes, I do think that should continue to be something that is allowed to be. Not forced upon kids, but certainly exposure to the pros and cons.
And internships. Gosh, we've seen interns at Kinetic who come to us thinking they're suited for one thing, and then they totally switch around being exposed to other areas of our company, and find out that they not only love a different path, they're great at another path. And that's been a rewarding thing to see, is to see students that totally changed their whole career path from an internship or an apprenticeship at our company.
Currie:
Jay, to back it up just a little bit. You talked about, whenever you discussed the flexibility and the sustainable competitive advantage, you did mention that it's important to be good at all of those, but really focus on one heavily, right? So can you give your perspective on the importance of being well-rounded in all business areas?
Jay:
Sure. And I was lucky since I loved it so much. I'm not saying I was great at all of it, but when we started, I mean, in the apartment days, I was the one doing the design, the coding, the project management, the testing, almost all of it. And that was, again, a fortuitous benefit in a startup time because you can't hire everybody you need in the startup days.
Now we have some amazing folks. Our team is truly stellar. They're multi-skilled and able to do so many things. I mean, three of our fellows are so left and right brained, probably the most spectrum of left and right brain skills I've seen in my 26 years of doing this. They are great designers and they're great coders. Usually you're not great at both. And even if you're not great at it, being able to be part of a team and appreciating what other people on the team bring to the collaboration. That's half the work.
I mean, our secret sauce might be that our left and right brains actually get along, actually like each other because normally they don't mix very well. And that absolutely is the key to our success. I recently read Range if you'd read that book, Range by David Epstein, Why Generalists Triumph in a Specialized World. In one chapter, he talks about Roger Federer and Tiger Woods, and of course, everybody knows Tiger's story, right? His unwavering specialization, his obsession with golf his whole life. But what most folks don't know is that Roger Federer, he played all kinds of sports. It was only later that he actually chose tennis and selected tennis to focus on. And his path is much more common. So I definitely think it's good to expose yourself to a wide range of ideas path.
That's what we liked the internship program so much. I recommend it to all students. Find out in a few months whether or not you like that industry, the size company or business unit you're a part of, the kind of team you're working on. I have so many friends, smart friends, genius level IQs, who they did their analytical math, right? They forecasted the demand for accountants in 1995, right? And they were good at it. They got their degree. They got their job and they've made partner in the firm now, right? But over a beverage, they will tell you that they don't really love their work, and they're watching the clock. And that's not a good place to be. It's kind of sad to me given the opportunity they had to do, as mentioned before, to do anything and not pick something you love.
And it's hard to change. When you've got families and kids and mortgages, it is hard to change. I'll take that compliment from people who are surprised I started at a school. But the truth is that's the time to do it, when you're young. There's more risk to me later. And I was lucky to forge ahead with all the pain. And of course we all know about the 10,000 hours to get to the level of expertise. And I do think there's some truth in that. We definitely made a lot of mistakes. We still do. We learn from them, again, and try not to repeat them.
Sarah:
So you've given a lot of great advice, but what's the best piece of advice you've received along your journey?
Jay:
Wow. Best piece of advice. Perhaps cliche, but in our strategic thinking, is Carpe Diem, seize the day. Life is short. As mentioned before a hundred thousand hours in a business career, make it count. Perhaps less cliche though, on our walls in our office, we've got a big sign, "Stay hungry, stay foolish." It is emblazoned on a wall. Every time you pass by it, we think about it. It was made popular by a Stanford commencement speech by the late Steve Jobs. But people don't often realize it actually came from the last page of the last issue of the Whole Earth Catalog. Way back in 1974, Stuart Brand was the publisher of this catalog, kind of a hard to describe, kind of a hippie counterculture movement thing. It would be kind of like a Google meets Whole Foods today, right? Pushing tools and skills. And "Stay hungry, stay foolish," I interpret it to mean stay eager. Keep pushing yourself. Always keep learning new things. Don't be afraid to go against the grain. Keep an open state of mind, right? Never, never consider yourself an expert. Grab opportunities, that sort of thing. "Stay hungry, stay foolish."
Currie:
Jay, that's really great advice. The Harbert College of Business is synonymous with business excellence and it's folks like you that have created that for the university, for the Harbert College of Business. And we cannot thank you enough for your time. We can't thank you enough for your advice and all of the wisdom that you have shared with our listeners. So once again, thank you from the bottom of our hearts.
Sarah:
War Eagle
Jay:
War Eagle. Thanks.
Currie:
Last thing.
Jay:
Sure.
Currie:
How can our listeners keep up with you and your work, or maybe reach out to you if they have any questions, or they want an internship with Kinetic?
Jay:
Absolutely. Head on over to kinetic.com. K I N E T I C, kinetic.com. We'll tell you what's going on in our world. But I'm direct via email at jay@kinetic.com. Also welcome to come see us. We're on a crazy street here in Birmingham called Morris Avenue. Birminghamians probably know it. We literally have our entrance is a red vintage train car, a caboose that is hard to describe. As I mentioned before, we played our real estate cards really well and lucked out in some neat, neat, eclectic space. Love to host anybody that wants to come hear more about our world.
Sarah:
Well, thank you for your time, Jay. We appreciate it.
Jay:
War Eagle.
Narrator:
Harbert, Inspiring Business.