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Vodafone xone Innovators Series: SLI System’s Shaun Ryan on innovation, search and mentorship

You’re co-founder and chief innovation officer of SLI Systems. What does SLI do and where did that idea come from?

The idea originally came from an idea my brother had back in 1998 when he was hungover on the couch one Sunday morning. It was an idea on how to improve internet searching. With that idea we started up a company called Global Brain to help with internet searching. We ended up licensing the technology and eventually selling that company to an American company called NBCI, which at its peak was about the 6th most popular site in the US during the dot-com boom days. It was backed by NBC the TV network. That company ended up closing down in the dot-com crash and SLI was formed from the ashes of that company. We bought the technology back and started SLI. At the original company, Global Brain, I was the chief technical officer and my brother went on to do something else after that and he’s been a bit of a serial entrepreneur. Me and a few others started SLI Systems off the back of that back in 2001.

What was the search problem you were trying to solve?

Relevancy basically. ’98 was pre-Google and AltaVista was the dominant search engine and it was wonderful. You’d type in keywords and you’d get results, but there was a lot of spam in there. So, your typical behavior was to skip over the spam and just click on the results that looked like they were good. The basic idea was: why don’t we watch what people click on and bring those results that they click on most up to the top to improve the relevancy? That was the core technology that we developed, this ability to learn from people’s interaction with search results. That core learning technology is still the core of the technology that we have. SLI now improves the search for e-commerce websites, so if you go to somewhere like Harrods in the UK, do a search, then we power that search on the Harrods website so you can find the products that you’re looking for on their website.

Bad, irrelevant search is really common on e-commerce sites. Well, it’s really common everywhere, but for an e-commerce site, if you show people bad search results, if they don’t see what they expect to see, then the retailer sells a lot less. So when we put our technology onto a retail site, that increases the sales because people can find what they’re looking for.

So you were part of a group that bought back that technology from NBC. Did you see potential for the technology that NBC didn’t?

While NBC ended up owning the technology, it’s not their core business. They’re a media company so they had no desire to do anything with the technology. Whereas, because we’d developed it and because the NBC Internet company, NBCI, had closed down, we’d all lost our jobs so it was as much out of necessity, as well as we saw an opportunity to use the technology. We solved a business problem that most sites either didn’t have a search on their site or if they did it was a really poor experience. So, NBC was happy to sell us the technology, we added some shares in the company for them to get some value out of the IP that they ended up owning as a result of this internet experiment that they did in the dot-com boom days.

Last year you moved from being SLI’s CEO to its chief innovation officer. Did you want to step away from the business side and back to the technology side or what led to that transition?

Not particularly. That was very much a board decision and a lot of discussions with me about that. But the decision was made partly to bring in an experienced in the US. CEO because most of the business that we do is in the U.S. and all of our sales, marketing customer success is led over there. It’s really an interesting challenge to decide when you should step away from being the CEO of a company that you start because what you need to do as an entrepreneur is continuously change. As your company gets bigger, what you need to do changes and you have to learn on the job. It gets to a point where you and everyone that’s running the company needs to make the decision, should it be the original founder running the company or should we bring in someone that’s got experience that doesn’t have to learn on the job.

So, we as a company made that decision and for me it’s been a really increasing experience about to learn from a new US-based CEO who’s run a whole lot of different companies and to see how he runs things differently than I would have.

What’s next for you and SLI?

With the new CEO we’ve made a lot of changes and so we’re very focused on restoring growth to the company. He’s made a lot of changes to the sales and marketing side of the company, which has caused a reasonable amount of destruction but most of that change is behind us now so we’re focused on getting growth back into the company. We’re currently selling in the US, UK, Australia, New Zealand, Brazil, Japan and so we want to keep growth back into all those markets and then we’ll look to go into other markets as well.

You’re not only co-founder and chief innovation officer of SLI Systems, you’re also a mentor at the Vodafone xone. What led you to becoming involved in the Vodafone xone?

I got approached by Kevin Park who’s running this for Vodafone and SLI Systems is located in the innovation precinct in Christchurch, just across the road from where Vodafone’s new building is. So I think part of that is my experience, plus my proximity to where the Vodafone xone is located, was part of that decision. We’re in the EPIC building which was the first building that was put under the innovation precinct and probably the building that prompted the innovation precinct to be created and there’s like 18 tech companies in one building and now there’s a whole bunch of other tech companies coming around us, including Vodafone. So, it’s great to see them there.

So did you mean to a particular company or did all mentors work with all xonees?

It’s a really fairly casual relationship. I end up working with a range of them. I gave a presentation to them talking about my experience and they approached me for those that could see that my experience could be useful for them and we’ll talk about their own problems. So I ended up working with a range of the companies.

Were there any common themes or trends that you saw across the companies?

They’re all individuals, so there’s a wide variety of different ideas and the companies are at different stages. I mean, there’s common things for any sort of startup: they need to get customers and a bunch of them do have customers, some are pre-customers, some almost where some have good revenue streams, almost self-sustaining. One of the core things is if you can get people to pay for your technology and you can generate that revenue then that’s a really important proof point for any entrepreneur.

Part of the goal of the Vodafone xone is to advise and encourage local innovative companies with global ambitions, giving them the opportunity to overcome the disadvantage of being at a distance from major markets. But, there are good things about distance. What are the advantages of starting a global company from New Zealand?

Particularly when compared to American companies or companies that were started in bigger markets, one of the advantages we have is we have a global mindset from the start for the most part. I’ll talk to a lot of American companies, peers of ours that are selling in the same market, that are based in the US. Because there’s such a big market in their backyard, they focus on that, understandably, to start with, but they become very, very American-focused and when they decide to go into another country it’s a big, big cultural shift for them. They assume that the way they sell and market in the U.S. is going to be the same if they decide to go to any other foreign country and inevitably it’s not. I think the fact that in order to get any scale in New Zealand you’ve got to be able to sell overseas, you start with this global mindset of thinking about how to sell into other cultures initially as one of the advantages that we have.

One of the things I’ve learned in working with US companies is that the engineers that we’re able to find and have work for us here are as good as any engineers we see anywhere else in the world. We can produce quality people. The market for engineering talent, although it’s competitive, it’s not as competitive as, say, Silicon Valley, so we find that our people tend to stay longer, they’re more loyal to the company. Whereas often, and particularly in the startups, you’ll see people moving around quite a lot between companies, which if you have someone leave your company it can cost you a whole lot in terms of intellectual property and the effort you’ve put into getting that person up to speed.

So you’re there to teach and impart wisdom on the xonees, but what have you learned from mentoring them?

One of the things I’ve found really interesting is just looking at how a company like Vodafone is trying to learn from these companies to improve innovation within the Vodafone company itself. Part of what they’re doing is they’re bringing in all of these little startups into this Vodafone xone and they’re helping them, but it’s really difficult for a large company to keep that innovation going as you get larger and larger. It tends to happen better in startups because I think it’s out of necessity, right? You’ve to to innovate, you’ve got to make it work in order to get some money to survive. So it’s just a different mindset from where you’re part of a corporate.

For me, it’s been interesting watching that approach that Vodafone’s taken to have these innovative companies come in, particularly as I’m thinking about innovation within the SLI Systems and we’re nowhere near the size of Vodafone, but we’re a medium size company and we want to continue to innovate as we continue to grow. So, for me, it’s been interesting to think about that role of innovation within a larger company and to see how Vodafone are tackling that.

The innovator’s dilemma?

Yeah, exactly. That happens all the time.

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