Executive Q&A: Jerry Chase, CEO, Bsquare

Former marine who has served as chief executive of several companies in the world of video and software, Jerry Chase was appointed interim CEO of Bsquare last October and then CEO in February. He has been hard at work turning around the money-losing software and engineering services company as well as focusing efforts on the rapidly growing Internet of Things market.

YOUTH: My dad was in the Marine Corps, so we moved every few years. I also served in the Marines and was based in North Carolina, Japan and northern Europe. It was peacetime and it was a wonderful experience. I was a pilot and aircraft commander on KC-130 refuelers. The crew included a copilot, engineer, navigator and two loadmasters. While you cant blindly trust people, I learned that you have to rely on everyone knowing their roles. You cant do it all yourself. You have to be open and direct in communication and expect a lot.

CAREER: After leaving the Marine Corps, I went to Harvard Business School and went to work for tech companies, including Scientific Atlanta, in video delivery. [From 2004 to 2007] I did a turnaround of Terayon [Communication Systems], a publicly traded company in Santa Clara, but I dont see myself as a turnaround guy. Turnarounds are about restoring profitability and positive cash flow. Sometimes you have to go through a difficult restructuring that is painful and tumultuous, but through that process, I like to find what you can grow about a company.

EXECUTION: There are so many different ways to get things done. I have worked in heavily unionized environments in France, Germany and Switzerland, and in non-unionized workplaces in San Francisco and Seattle. I learned to be a student of body language and whats being said or not being said. One size doesnt fit all. You have to be culturally aware.

BSQUARE: When I became interim CEO at Bsquare, the challenges were obvious. We had let the cost structure get too heavy. Our engineering services business opened an office in Beijing even though we didnt have the business to support it. We shut that office in October [2013] and trimmed our workforce by 20 percent. But what surprised me was everything that was right about the company, such as our world-class engineers and our relationships with Google, Microsoft and Coca-Cola.

OPPORTUNITIES: We are a company with $95 million in sales and $20 million in cash, yet we are capitalized at only $35 million. We needed do a better job of leveraging our strengths. Employees working in licensing, for example, should get credit for business referrals to engineering services. You want to come across as one company.

INTERNET OF THINGS: We see big opportunities in what people call the Internet of Things. All these devices in your life whether its your car, the Coca-Cola machine, a slot machine or one of those wearable biometric devices can be connected to the Internet of Things to generate lots of data. We have developed vending machines for Coca-Cola and Costa Coffee that are capable of reporting inventory, usage patterns and maintenance status. [IT research firm] Gartner says that by 2020, there will be 200 to 500 billion points connected, picking up trillions of pieces of raw data. If you collect all the data from all these devices, you can learn a lot about patterns that affect health or buying behavior.

A PLATFORM: We are looking for commonality across our work for different clients to develop intellectual property that will drive shareholder value. With the announcement of Data V [in January], we have an offering that is a repeatable, replicable solution that we can wrap engineering solutions around. Its an intelligent gateway [for the Internet of Things.] Our applications will receive raw data, apply analytics to filter out data that are useless and take the additional steps necessary to help customers turn it into useful, meaningful, actionable data. We will pump all the features and functionality into Data V, but if a customer only wants six of 10 features, then we just activate those features. Its a platform, so the key to our success is providing the tools that allow people to develop additional applications on our platform. A company might develop an application that collects data from sensors in a vending machine, for example, so that if a compressor overheats, the app can determine whether the problem is related to hot weather and simply stores that information, or requires repair and sends a message that temporarily reduces the rate of refrigeration until a mechanic can repair or replace the device.

COMPARATIVE ADVANTAGE: Cisco, Oracle and many others are all targeting the Internet of Things, but its a nascent market with a lot of opportunity and we feel we belong here. We will work with any kind of device at the periphery of the network, whether its medical equipment, slot machines or cars. We will work very closely with partners like Microsoft. Everybody recognizes that the market is too big to go it alone. You have to partner and build ecosystems.

RELATIONSHIPS: We are working on generation two of the [Ford] Sync [in-vehicle information and entertainment] program [with Microsoft]. We will continue to work closely with Microsoft at least for a couple of years. [Chase declined to comment on reports that Ford may work with BlackBerry instead of Microsoft for its next-generation system.] At
Bsquare, we need to work on deepening and expanding our relationships with customers like Coca-Cola, Microsoft and Google. [Bsquare is part of Googles Project Tango effort to build a smartphone that uses 3D sensors to create visual maps of building interiors.] In the past, we chased projects as opposed to nurturing relationships. We probably got a little diluted.

GROWTH: Our commitment to the investment community is to execute on our existing business of licensing and engineering services. Weve taken strong and positive steps to ensure positive cash flow. Thats table stakes. The next step is to grow. We are being careful.

FAMILY: I have four daughters and a son. One daughter just told me Ill be a granddad in July. My youngest daughter is 15. I will do the weekend commute from Pleasanton [California] until she graduates from high school. Ive been living in the Red Lion for five months but my wife recently came up to help me look for an apartment in downtown Bellevue. I love this area.