We’re hanging out this week with two of the founders of Thermavance, climate-controlled technology that revolutionizes heated and cooling wearables and fabrics. You’ll have to listen to the episode to hear how this innovative product heats and cools according to YOUR temperature -for maximum comfort at all times, no matter your location or activity- but we also dig into the startup culture in Traverse City, including the incubators, angels, and investors that make it possible and growth-oriented.
Tim Hi there, Tim Gillen here at Terrapin Networks, Traverse City, Michigan. Thanks for joining us for this week’s edition of Michigan Small Biz Stories.
You know, I’ve been involved in small business my whole working life, even going back to my parents and grandparents.
And I’ve always been fascinated with those who start and succeed in running a small company. Small companies are special and, I’d say, largely overlooked. It takes a special person, a special team and a certain kind of grit to make it all work. And that’s what we’re going to talk about here each week on Michigan Small Biz Stories.
Together with my cohost, Ruthy Kirwan, we’ll have conversations with other small biz owners in Northern Michigan. And we’ll talk about the particular challenges and joys that come from running a business up here. Why did you start your business? What customers do you serve? How has your business changed since you started? What changes do you foresee? All that kind of thing, as well as the nitty-gritty, how policymakers might be affecting how you run your business and local ordinances, all that kind of thing, and do your customers and even competitors really understand what you actually do. That’s a good conversation to have.
It’ll be interesting people and interesting companies. We’re going to have a new one each week and Ruthy is going to introduce them. So let me turn it over to my cohost, speaking to us from Queens, New York, most weeks. Ruthy Kirwan. Hi, Ruthy, who we got this week?
Ruthy Hey Tim. How are you this week?
Tim Very good, thank you.
Ruthy Good. I’m very excited this week. Uh, it’s our first episode of this brand new season doing Michigan Small Biz Stories and I’m pumped. So our first guest on this brand new season, this is somebody is a native, someone who is originally from downstate, grew up in East Lansing, moved up north at the age of 13, where they were involved in small business from a young age.
And then eventually in 1990 started a computer repair company in this small den in their house, on Front Street in Traverse City. This person, at the time, realized that computers were a game-changer for small businesses and that getting into the computer industry was a smart way to help small businesses succeed, especially up in here in Northern Michigan.
And over the last 30 years, they positioned themselves as a leader in the tech services industry in this area, has been a frequent guest on many, many years of WTCM NewsTalk 580, which is our parent station for this show, and has hosted a morning tech segment on TV7&4.
They’ve mentored students from the career tech center and computer studies programs at NMC as well as countless employees. This is just my little pitch here because – surprise!- our first guest is….you!
Tim Well you know, I thought that story sounded familiar. Didn’t hear all that before.
Ruthy So let’s get into kind of the backstory of Terrapin Networks, which we’ve touched on now a couple of times already. Start from the very beginning, you had mentioned that you’ve got grandparents and parents and that small business has really been present in your entire life. So can you go back and tell me a little bit more about that?
Tim Yeah, actually. Growing up as a youngster, we were down in East Lansing and Lansing. My father was in professional services did not have a small business, but my grandparents did on my mom’s side. Growing up then my grandfather had a company down in Niles, Michigan.
Who did TV and appliances, back when t was common to have a particular store that did that. He had actually started a store in the late forties, Gimbel’s Department Store. They sold a lot of people into the fifties there, in that neck of the woods, their first TV, because that was when TV was just coming out.
He was right in there at the forefront of moving from radio to television, which was kind of a big deal. And he had a long history in retail prior to that.
Then we moved up North here. My father bought a marina out on Glen Lake. And we moved our 6 kids, I’m right in the middle of all those siblings, up to Glen Lake.
I went to high school at Glen Lake and we had a marina, a small business, and I worked there from the time I was 13 until one of my older brothers and I ended up being in the process of purchasing it from my father. And then we all sold it in 1982 and I got another small company.
I was a Snap-On Tools dealer.
Many of those listening who know me, know that I drove around one of those trucks and sold tools to mechanics. This was largely in the automotive field, but also in that marine field, and engineers and factories and that kind of thing. And this is part of the origin story for Terrapin Networks because I got a computer system in the mid-eighties in order to run Snap-On.
Ruthy In order to run your business
Tim Yes, exactly. I was one of those early adopters. They had had a couple of companies that had come out with a system, in the mid-eighties, for those of us who were Snap-On dealers, to computerize. And so I got involved in it with a system that was so quaint by today’s standards.
It was basically what’s what was referred to then as a ‘Turbo X T’. It wasn’t even an ‘A T’, it was an old ‘88 processor. Which is, for those nerds out there, we’re talking early PC days. And it had a handheld unit not unlike what UPS and FedEx use now, very similar, that kept all your inventory.
And then at night, you sync that with your computer back in your office, though an old school modem connection through a DB9 connection, just really old stuff, that would transfer all their transactions you’d made during the day. And everyone’s updated inventory and then transferred over to the main thing.
Then when you receive stock and they put on your truck, you put it into the inventory and it was a process actually worked quite well. And it became really obvious to me, that that was going to be a big deal in small businesses. I just saw it as what was, to me, just a really obvious next step.
Ruthy What led to the transition of moving from Snap-On into Terrapin? Was there a moment where you thought, you know what, this is where I want to take the direction, or was it kinda more gradual? How did that happen, moving from a retail-style business into the little baby that Terrapin Networks was when you started?
Tim Well, that’s a really good question. I started to do more and more on the computer. I started to add a bunch of programming to the system. I started working with these guys down in Memphis who sold that system, helping them make some tweaks in the software, and I just realized that I really liked it.
All my friends who were other Snap-On dealers would spend the weekend working on their dune buggies and their race cars, which is what most of us gear head types are doing, because I’m absolutely that too, but I just found myself every night and every weekend screwing around with my computer. I saw I hadn’t had a knack for it and really liked it, and seemed to pick it up pretty quickly.
Even the programming, the electronics part. I had been interested in that type of thing going back to high school and at our marina. I just really came to the conclusion over a couple of years that my future was probably going to be in this.
And then part of the origin story, a lot of people know this, they’ve heard me talk about it over the years as usually happens, especially happened a lot back then, my computer broke. My hard drive broke.
Ruthy On the computer that you used for your business.
Tim Exactly. And so I had a backup, I was fine there, but I was otherwise out of business. My handheld will only store so much info. Don’t forget, this as the old days. So I could go for a few days with it without transferring it, but that was it.
After just a few days got really clunky and the balances would be out of whack, and the inventory would be out of whack. That was the whole point of syncing every night. So I had taken the computer over to a local computer shop.
There were only a couple of them in town back then. You took your stuff over to them.
Ruthy Just physically took it in there.
Tim That’s how it worked, carried it all over and say, okay, this is broken. You fix it. And for several days, I just couldn’t get an answer out of these guys. It was just really obvious to me that they didn’t get that this was really crippling my company. They were just tech guys.
They were like, we’ll fix it. Yeah. And the thing that stuck in my head, if you asked what was the thing that really keyed it in for me at that time. I remember standing at a payphone booth. Again, this is in the late eighties. And I call them and ask, Hey, any progress?
He goes, No, we haven’t gotten to it yet, man, we will, don’t worry about it.
I said, Oh man, I’m really stuck here. I’m on, you know, this is day four or whatever it was. I‘m completely getting to the point where I won’t be able to even run my business here, man. I mean, can you give me any better updating?
He said, Buddy, we all got problems. I’ll get to it. I told you that.
And I just hung up like, Okay. These guys just don’t get it.
Ruthy So it was like a crystallized moment for you. They didn’t understand the importance of this computer to your business. And whether they understand it or not, they don’t care. It’s not important to them.
Tim I don’t know if they didn’t care. I would think it’s more like what you said the first time. They really didn’t get it. As so often is the case in business, so many successful companies, someone figured out here’s this one thing – we’ll say it’s A, and here’s this other thing B, and if I can make these two things work together better, I could probably have a company.
And sometimes people are really good at the A, or they’re really good at the B, but they don’t get the way the two might connect. But that’s what I saw. I was dealing with small companies every day. I could see people who really understood how to run a small company. These guys on the tech side were probably really good at fixing computers.
They were probably really good at running a computer company as far as to the degree that what their job was to do was fix computers, but there was a particular need here. That was pretty obvious. That someone to bring those two things together might be kind of a big deal because these guys didn’t get it.
It was just obvious to me. It just occurred to me, man, if you can make sense of both ends of this. Wow. And I knew right away to me, what was interesting about it would be on the business side. I wasn’t even interested at the beginning of doing consumer stuff. Now we did some of that over the years in the early days. Cause we were many things in the early days.
But it’s very different when you can’t run your business, there’s a whole different feel to what that technology actually does and what you might use at home. When things don’t work at home for a few days, it usually doesn’t stop everything. When things don’t work in the business and payday’s Wednesday, or you have to get those checks out to your vendors by Thursday or they don’t ship on Friday, that’s kind of a big thing.
With anyone who runs a small business, there are all these deadlines that you’re very used to working with, all these timelines you’re used to working with.
Again, the payday payroll has to be sent to the payroll service people by Wednesday, if they want to get paychecks on Monday, all those kinds of things have to stack up. And so you get really used to those kinds of deadlines and timelines. They might be seasonally based. They might be just a regular week.
You get used to that. And so your surface vendors have to be willing and able to dial into that for you. So if you’re running your business, you don’t care about the other guy’s deadlines. I mean, you’re thinking of your own deadlines. Hey, listen. My, my pay time has to be in by Wednesdays, if I want to get people, their paychecks for Monday. That becomes a big deal.
Ruthy What did you have then that you don’t have now? How has the business changed in the last 30 years?
Tim Well, the business has changed of course so much because technology has changed. The kind of stuff that we needed to do is drastically different. Well, it’s the same thing. Only different, I guess I’d say it that way.
Ruthy What do you think that people, your customers, people who are looking at your business from the outside, what do you think that they might not realize about what Terrapinn Networks does as a company? How do you think that their perception of the business is, compared to the way that you run your business really internally? How do you think that people perceive your company?
Tim To be fair to our customers, especially our longterm ones, they actually really understand this. Because what we do, we do a lot of stuff behind the scenes. We really push that. You don’t want a relationship with your tech guy where you just say, I’ll call you if something breaks.
That’s a disastrous thing to do. If you’re interested in that, I don’t do it. And what’s more, if that’s what you do, you really need to get some education. I get really blunt about it. If you’re a small company and you’re doing that, you better be really good at technology. That’s a really silly thing to do. I just really believe it because I’ve seen it blow all sorts of companies up.
All tech people will complain about this, everybody thinks that what we do is just what any knucklehead can do it. I’ve loaded software. How hard could it be? And you know, any profession, thinks that. Any accountant thinks Yeah, you knuckleheads with TurboTax. You think you know what I know. Any doctor thinks that Great, you went out to web MD and now you’re telling me how to do your knee replacement surgery. Any professional deals with this, especially now with information out there, like it is. But that’s true for us too.
There’s a whole lot that we do that actually matters that may not affect the end-user experience. And it really matters. And so we keep an eye, we do server updates manually. We do them every month, we monitor firewalls and antivirus and stuff daily. I have people who put eyeballs on all this. Every day. We send out this elaborate system for alerts of things, with all our different companies that are all set up differently. And by companies, I mean, our customers, that are all set up differently because each company has their own gig and their own corporate culture and we fit into that. We do a lot of things behind the scenes with backups with things that nobody cares about until they really need to care about them. And that’s a big part of what anyone who does what we do does. If they’re any good at it, they will put the time into it and put the resources into it.
We tech types are famous for, if something breaks, where we’re good at fixing things. I like to say when there’s smoke coming out of the back of it, we’re great. But some of that grunt work that has to be done to monitor and make sure that the backups and do a restore test on the backup on a regular basis.
In our line of work, it’s functionally the equivalent of mopping the floor.
Ruthy It’s unsexy stuff.
Tim It’s kind of unsexy. It’s kind of grunt work, but boy, if you don’t do it, you’ll pay a price, you know. We make a mistake sometimes as a business owner, when we think of technology, that if I can not write the check, that’s a win.
“If I could spend $0 million this year, that’d be awesome. This stuff has always cost me money, it’s driving me nuts. I just want six months where I have to pay anything.:” It just doesn’t work that way.
I like to say, you would never hire your staff that way: “Okay. Here’s a check for 40,000. I’ll talk to you in a year, stay out of my way.” That doesn’t work well. You pay monthly, you pay them twice a month, you’re involved in reviews. You’re involved in what they do. You want to help them get better. You want to make sure that they’ve got the tools they need to get their job done.
And technology is part of that. It’s kind of a living breathing thing that needs a lot of care and feeding, even in a small company, especially so in a small company, as well as a large company. Large companies, however, as a whole, will have a tech department. If you’re in an accounting firm with seven or eight accountants, you’ve got some CPAs, you’ve got some junior accountants, you’ve got some support staff, they all have different roles.
Ruthy And that’s really the concern. Isn’t it? Because you know, a shop like that is clearly not the size of, say, Haggerty, where they would have their own chief technology officer and people working underneath them. They might not be big enough to be considered by large tech system service companies who are looking for a bigger account, like an MSP, but they’re also too big to have the 18-year-old down the street be doing their technology. So Terrapin slots into that opening there.
Tim Yeah, absolutely. That’s that really is what we do because, and we were this for a number of years, too, I mean, to be fair. An MSP, as a managed services provider, it’s a thing in my line of work, it means you basically support device. You have sales team sales staff, often called an account manager, whatever it might be. And your whole thing is to get seats.
Ruthy Butts in seats.
Tim Yeah, as often referred to as “seats” in the tech industry. And for those kinds of companies, anyone would rather have 40 seats than four.
Tim And they’d rather have 40 seats of a single 40 seat, then 10 of four or four of 10. And what ends up happening is if you have 4, you have 10, and they’re really not interested. They’ll take you. But man, you’re an afterthought. They are geared towards getting 40, 60, 80, 120 seats.
Those are where they try to supplant the internal IT department. And it really becomes difficult if you’ve got eight or 10 or 12 employees, I’ll say, computer users, you might have more employees than that if you have a shop floor, delivery staff and that kind of thing.
So it’s not necessarily headcount completely, but it’s certainly, we’ll call it computer users. I mentioned a factory might have seven or eight employees, but there’s 12 or 15 that are using computers in the office and maybe a couple out on the factory floor. And that’s it. It’s really difficult to find someone who will actually pay attention to you at that size.
Or, you can find the person working out of the back of their car, which is fine, a one-person show as we call them. That’s fine. But those people tend to be kind of overwhelmed, and they don’t have the time to actually chat with you about that new software that you might want to look into.
They tend to be much better at putting out fires. And as I say for the small business owner, that’s not a good way to go. So what’s on the other end? You’ve got a large outfit that wants 40, and you’ve only got 8. So they’re not really interested. They’ll take care of you, but you can tell when you call that you have a different person every time, because that’s all those companies are built. The “manage” really comes from that same phrasing we use in healthcare, which used to be called “managed care”. Isn’t used as much anymore. But it essentially means, let’s keep all the costs down by treating everybody the same. And so what I used to say about managed care when it comes to, you know, the same with managed services provider, the whole point is to keep the cost per device down to a bare minimum.
Well, with Terrapin, we support your staff, the devices are really secondary to us. You may have, depending on the staff member, 3 or 4 devices, depending on iPads and laptops they take when they’re out in the field, any number of things, but we’re supporting users, not devices. Devices are part of it. We protect the devices.
We have utilities that protect the devices, but what we’re really looking after is the people. Because that’s what makes your company go. It’s your staff. And so if you’re keeping all the pricing down by doing this managed stuff, it becomes like that lousy managed care.
Now managed care is great for the insurance people. If I’m the person writing the check for grandma’s care, that’s great that it’s managed care and I’ll keep the cost down. But if it’s my grandma who needs some health care, I’m going to want individualized. It’s really great if you’re in the insurance company, it’s not so great if that’s your grandma.
So this concept of the managed services where I was starting from is very common now, that’s historically how you grow a company that does tech services. That’s how you grow. It is by getting seats. And man, you’re not going to get very far if you’re taking on a company that has 8 people. So we found this middle ground. In the last five, six years here, especially, we have decided, you know what, we’re going to forgo those 40 and 80 seat factories. I turn them away. We get the requests but I don’t even talk to them. We used to do a lot of municipal governments, for years, they continue to reach out to us and we just don’t do it. We do only small companies, because man, that is a forgotten chunk there. Again,, if you’ve got eight, 10, 12 computer users, you don’t have many options. You’re largely overlooked by the big guys. And the small guys are hard to even get ahold of, so you end up being the dispatcher because you have to call them so often to get ahold of them. So we sit in this middle spot where we bring a pretty high level of sophistication, but all designed and built for a small company, and priced for a small company. And the neat thing about now in 2020, as we record, this is a lot of stuff that wasn’t even remotely available to us even five years ago, for small companies, is all this that’s available with the industry that you’re in now, cloud-based, etc.
Ruthy You can work on companies all over the country, all over the world, if you wanted to, but really focus your attention locally. What do you think are the particular challenges, joys about staying up here to run your business? Why do you continue to focus largely on Northern Michigan? Is there a particular reason that you stay? When your business could expand anywhere, you choose to stay close to home.
Tim Yeah, that’s true. And, and, you know, I’m like a lot of us up here, I live up here cause I like to live up here. And I could have moved my company or expanded on to Grand Rapids or Southeast Michigan, and we’ve had several opportunities to, and I’ve never actually done it. Because we love Northern Michigan and there’s a particular type of person up here and there’s a particular type of small business person up here.
It takes a particular kind of grit, particular kind of persistence, to run a business up north. We have seasonal issues here that can be kind of crushing. We have long cold winters sometimes. We have years like this one we’re in now, where the seasonal people are really getting hurt because of the coronavirus pandemic, what challenges are they going to have?
There are very particular things to northern Michigan. And then how that affects the rest of the economy, even whether it’s tourism adjacent or within the tourism instance. A lot of our customers up here, a lot of the companies we support up here, have their own customers downstate. So we have a lot of very particular set of circumstances because of that.
And the type of people who are up here tends to really like the outdoors. That’s one of the reasons we’re up here also. A lot of hunting, fishing, outdoor boating, activities that people are involved in, hiking, skiing that is a consistent thing we found with our customers.
Not everybody takes part in it, but most seem to. So I find there’s a particular set of circumstances that we have. Our cost of living is such that some places are crazily expensive and some places aren’t. We’ve got rural issues with internet connectivity. That’s become a challenge that we have to deal with a lot.
And so a lot of our Northern Michigan has particular challenges that make that just a little more difficult to work with. And yeah, the winters get a little long sometimes, into April, that gets a little tiresome. I’ll be the first to admit that. But my goodness, we love the winter generally. We’re skiers from a long way back, used to do that professionally before we started this business.
So I don’t have a negative feel for it, It’s a net positive thing for the winters. There’s nothing more beautiful than driving across Northern Michigan on a site visit after a big winter storm. It’s just, it’s gorgeous. You gotta have a vehicle that’ll do it. So we have a little higher expenses there for all of us to deal with.
I like the resiliency of the people up here. We tend to have a very high resiliency. And don’t get quite as shook up about things like some folks might in certain parts of the state or the country. We get our share of challenges just living up here because we’re off the beaten path.
And it’s beautiful and all that, but, but we don’t all have the economic opportunity up here. Any of us can make more money working downstate. We all know this. Even people who have done quite well know that they could probably do better if they want to put themselves in the middle of Southeast Michigan or Grand Rapids any of the larger population areas. But we live up here for a reason because we will make some of those trade-offs. And I like that. The people that we work with, I like that. It fits well with my own personality. And always has.
Ruthy If there’s one main takeaway that you want people to take away from our conversation today, about how you run your company, what do you hope that they would take away from that?
Tim My work in life, even back in the eighties, was revolved around my having a business that was working with other people who were in business. Even when I was selling tools to mechanics, they were free agents in a way that’s they were buying their own tools.
I just found that that collaboration is huge. You can really do a lot in a small company when you collaborate with the right vendors. When you treat them like a vendor, like just some mule, who’s supposed to do their job and you’ll give them a check and they’ll get out of your hair, that doesn’t work. I have just found the people I’ve had the most success with on both sides.
Even the people who work with my company too. I have vendors too. I have accounting firms. I have all sorts of things that we have to work with. That collaboration means everything and that when you can connect with a person and let them in a little bit. And so that the two of you can get better because people who want to work with you want to work with you.
We’re afraid we’ll spend too much if we let them in. And I think that’s a mistake. And the takeaway I have found is the people who don’t do that, who are willing to collaborate, get a lot more done.
Ruthy Well, I think that’s all the time that we have to talk today, Tim, we’ve covered a lot of grounds. Thank you so much for being our first guest on our brand new show! If you’re interested in learning more about what Tim and his team can do for you over at Terrapin Networks, you can head to terrapin.tech on the web, or give them a call at231-941-2100.
We’ll be back with a new guest next week. If you were interested in being a guest on our new show here and having a chat with us about your business up in Northern Michigan, send us an email at small biz that’s firstname.lastname@example.org. Yeah, thanks again, Tim, and have a great week. Okay. Thank you so much.
Tim I appreciate it. Bye-bye.