Talking Points: Fred Brown, Founder/CEO, Next IT

March 14, 2011

Leslie D. Helm


Fred Brown, CEO, Next IT

Growing Up: I had a wonderful father who would keep me thinking. He taught calculus at the community college in Alberta. It was cold there. Me and my mother had to take care of the cows. We did all the feeding by hand. Once, as a freshman in high school, I tripped over a frozen turd and fell on a fresh one. By the time I got up, it was froze to my face.

The Rodeo: When I was 19, I entered a match-roping tournament in Texas. I got whipped. On the drive back, I told my friend, Im going to beat the best guy in the world. My friend started laughing. I bet every dime I had and I won. I realized I would never have to do something so hard again in my life. There are a lot of similarities between rodeoing and building your own company. You rely on your own internal abilities, the power of the mind. You learn to be self-sufficient, set goals and make things happen.

Career: Dad said to me, You have to be a doctor, a lawyer or an engineer. I started on computers to solve engineering problems. Humans are basically lazy, and Im probably the laziest of all. When I started using computers, it was really hard. Some idiot designed these things. I spelled badly and didnt like to follow rules. As computers evolved, finding a better way to interface with them was something Id been thinking about all my life. The easiest way to interact with a computer is to talk to it.

Virtual Employees: Our business is creating human emulation software [used by many phone centers to respond to customer queries]. We built a complex math model that allows us to understand human inputs [questions by voice or e-mail] based on context and a persons intent and then determine [how to answer the question].

Marketing: People dont understand what we do. They say, What the hell is that? If somebody is going to buy our product, the most important thing is that they trust us. We say, Well do it for free and you can pay us if we deliver. We have gotten some big customers that way. They figure you must really believe in your product.

Values: We are grounded in the central part of the country, where you do things on a handshake. Part of our brand is integrity. Software companies tend to overpromise and underdeliver. We are pretty conservative. When we say we can deliver, it usually means we already have customers that can testify to that.

Source of Next ITs technological edge: You mean how can a dumb ass in Spokane do this? The best technology is taking something complex and making it simple. Some guy at [the University of California] Berkeley says I trivialized his technology. But I want to take everything I can from all those wonderful minds that publish their theories. Im trying to solve real problems. You take an algorithm from here and an algorithm from there and hook them up to solve a real problem.

Market: Our market is the universe. As knowledge grows at an astronomical pace, how do I interact with that knowledge? We think we are going to change how humans and computers interact. Anything the human mind can conceive, it can build. Batman talks to his car and waves his hands to make things happen. We are building that as a reality right now with motion and voice sensing. We have a model that helps us understand human intent by context.

Economy: Corporate America is sitting on their wallets. They are scared. They want instantaneous returns on what they do. We are coming up with a way to get a return on your investment in three months. What they pay in year one is less than what they will save in year one.

Customers: Aetna is a great example. When a company changes insurance companies, employees have a lot of questions. They have to get new health cards and sign on to the plan on the web. There is typically lots of call volume at the insurance company and lots of user frustration. We attacked that problem and solved it. [Aetnas virtual assistant, Ann, now provides 24-hour support, answering questions in text or voice, which reduced call volume by 30 percent.]

Growth: We added 30 employees [last] year and were now at 150. Ill be disappointed if we dont grow at 100 percent a year for the next five years. There is no reason we cant be a 3,000-employee company.

How to maintain your competitive advantage: Be the first, be the best and be innovative. Another way to say it is wake up scared, stay scared and go to bed scared.

Startups in Spokane: We are seeing a lot more software companies. Its a tough world now, but there are a lot of people in garages. Spokane is looking for seed funding for these guys. I think the venture capital model is broken. They dont want to take risks any more. I started an angel investing company in town thats doing quite well. There are a lot of people who want to be entrepreneurs. Exuberance of youth and wisdom of age is a great combination. Success breeds success. We are making an impact.

Creating jobs: The thing that America has is the ability to innovate. Its about the only thing we are the best at. When we can do that, we can create lots of jobs. Most companies outsource their call centers overseas. Why not have higher-paid employees here train virtual employees? We can create jobs right here. If I create 3,000 jobs at Next IT, I would probably support 50,000 families in Spokane.