Interview with Robert Rouse of DAT Solutions on Technology Startups

This is Ian Peterman. I'm CEO and founder of Peterman Design Firm, and I'm sitting here with Robert. He's a product owner at DAT and well-versed in the digital world and programming. And so first, welcome to the show. Welcome to being on the podcast. It's really great to have you here.

Yeah, thanks for having me. I'm really excited to talk about all the cool things that are happening in technology these days.

Yeah, so just before we started actually recording, we were talking about how a lot of startups in technology are failing, but they're kind of shifting their strategy to be a little bit more partner-based. And I know that's been a— I think we talked about that a couple weeks ago as well. So maybe let's start there and, and talk about what you're seeing and, you know, the change that might, that might be happening with that.

Yeah, absolutely. I mean, in 2020, it kind of shifted how people were working, definitely. And a lot of people were at home a lot, and so they broke out their laptop, threw some code down, and started creating a lot of small startup companies that were solving small niche problems. And that's really creating this influx of new technology companies because the barrier to entry is continuing to diminish. And so there's lots of companies that are just flooding the marketplace. But one of the things that they're kind of struggling with is they're solving one unique problem for a user, right? So they're really good at one thing, but a user may not actually just go to them to solve that one problem. They want to go to—

Right.

to somewhere to solve a whole slew of problems for them. And so that's where these technology companies are starting to think like, okay, well, how can I plug myself into other companies' solutions and just solve that one problem and help that company provide that entire end-to-end workflow? And that's where I think we're going to start seeing a lot of companies just focus on a core competency instead of trying to be good at a lot of things. be good at one or two things and do it amazingly. And I think that's going to be a huge piece in the next 5 years or so.

And so in the physical product world, there's definitely this blend of highly specialized to general. And on the technology side, it seems like there's been more generalist, like You know, most, most program companies I've ever worked with, worked with or talked to, they're like, oh, we can do pretty much everything. And it seems to be that maybe that, maybe that's ending and that everybody's not trying to be a jack of all trades. And now there's, there's enough niches that you can really focus down into that sound like maybe wasn't there before.

Well, I think everybody kind of saw like there's a lot of revenue opportunities to be the jack of all trades, right? So if you can, if you can solve every problem, then you keep all the revenue for yourself and it's like great, right?

Right.

But the problem is, is being great at everything is very expensive because you could be really great at like really know mobile, for example, right? And you could have a great team of mobile developers, but you may not be good at some of the other backend services pieces Your company just might not be equipped to handle those types of things. And so that's where you would have to go partner with one of these other companies to do that. Because in order to be good at all of the things across to deliver a product, you would have to have just a ton of developers in different specialties in order to deliver. And so that's where we're seeing all these little companies that are spinning up to solve different problems. So like in the data engineering world, right? So just looking at how do we— there's a ton of data out there. How do we do that? You see companies that are spinning up, they're like, hey, we can run, manage all of your data for you. Companies like Snowflake that are getting really, really huge that are just spinning up these cloud-based solutions just for that one area that is gonna solve a problem for a user base. Versus in the old days, a company might go, oh, I need to create databases, I'm going to go build all that myself. But in order to do that, you have to have developers that actually know how to build those databases and run through all that code versus just farming it out.

Right. And does it, from your experience, does it seem that companies that are looking for that service Are they wanting— they're wanting specialty, but they're not wanting to manage 50 vendors themselves? Or are they— or do you see it as companies more wanting to take on, you know, the project management side, so to speak, and go hire 15 different highly specialized companies to bring on? Because I know there's that— that's a back and forth on a lot of companies for sure.

Yeah, I think it's in product management, it's a delicate balancing act, right? Where there's a lot of trade-offs, right? There's benefits to building yourself and benefits to partnering. And I think to me, where I'm seeing a lot of companies is if they focus on that core competency, right? That thing that they know better than anybody else, that's where they see they can have the most success versus Trying to do all this other stuff. So I think it's going away that it's like we can have 20 different partners to deliver a product, right? So you may be going to somebody like Snowflake to do data management and all of that kind of stuff. You may be going to someplace like AWS to manage all of your cloud services to deliver your products. And so I think from that aspect, companies are willing to take on a lot of different partners in order to deliver because even though they may be paying a little bit more, the actual long-term costs are pretty similar.

Right. Yeah. And it seems that there's— it doesn't seem—

there's more and more companies, even physical product companies, are so focused on Appifying or adding, even just adding a companion app. And so there's this— it seems like there's a huge growth and that it seems that maybe— I mean, is that part of these little startups? Is it because there's so many more products that are requiring applications that now niches— you can actually niche down, you don't have to? Do you think that's part of it?

Or—

What do you think that plays together, the whole physical, those companies joining the game now of technology in a huge way?

Yeah, I think the thing is that creating a software product is not as hard as it used to be, right? Is that even I'm not a super, like, I'm not a developer, right? Like, I couldn't go on and really code really well. But companies like Apple created a solution called SwiftUI where I can drag and drop simple components and I could create an app within a couple of days. Now, it's not going to rival any of the other really well-built applications out there, but I could create a pretty rudimentary application to deliver a product with very little knowledge of code, right? And so that is really changing the game in a lot. There's a lot of other platforms that are doing similar things with, you know, hey, we're gonna— you just kind of drag and drop components and you can create an application. We'll help you spin up all the databases, we'll help you do all this kind of stuff. And then that makes the barrier to entry very, very little for them to deliver something pretty simple to their customers.

Right.

And that's why we're seeing a lot of these companies pop up.

Right. Well, it's incentivized. If Apple's launching their own toolkit, so to speak, then it's— they're starting to incentivize everybody to actually do more apps because it benefits them. I'm sure Google and anybody else probably has similar platforms for it. Yeah.

I mean, Google has something similar, but Apple, it's not 100% there yet, but their SwiftUI platform, if they ever get that completely locked in, that'll completely make it a game changer. Because like I said, anybody that just wants to build something could easily build something pretty cool with very little knowledge of how to develop. So I think that you'll see more of that. And that's really what Apple has said they want to do, is that they want to reduce that barrier.

Yeah, well, that sounds very much like the 3D— and we talked about this a little bit— the 3D printing world, where the barrier to entry of even making something is reducing quickly.

Right.

You can buy a 3D printer, you can use some free 3D modeling software, and you can very cheaply, very easily make a prototype of something. And that's spawned a huge amount of— there's product startups all the time in the physical product space too. And this seems like it's kind of evening out because, yeah, a couple of years ago, it was definitely, well, you have to be a coder.

Right.

Yeah, you'll get the kit, and unless you understand CSS and any other languages involved in it, you are going to be lost. And it will not look good. You won't even get 80% of what you get. You're going to get like 10%. And it's like somebody with crayon trying to draw a painting. So it doesn't really work. Yeah.

The 3D printing, it's pretty wild how that's just kind of taking it— like we're talking about, the barrier to entry in all these areas are continuing to move down. Right. You know, just last month, um, there was a video posted on a social media platform of somebody with Parkinson's that was really struggling to get pills out of a pill bottle. And there was a group of people that went through a couple cycles sharing designs for a 3D printer bottle where the, the person could just turn the bottom and it would dispense just one pill, even if they were shaking or anything like that. Help them out. And so just that one simple product that's never been on the market before was designed within a couple of days by just a group of random people with their 3D printers that, you know, said, hey, I want to do something to help out the greater good and create this really cool thing. And, you know, we're seeing that more and more where people are just, you know, group thinking and going, oh, let's go solve this problem. And, you know, it's gonna, it's gonna have an impact on physical products You know, maybe even more than the impact of new startup companies in the technology space.

Yeah, well, it's— I mean, it is a huge impact. And the more as both barriers drop, then people are able to think of, you know, how do you create a smart product? Like, eventually the barrier— right now the barrier to entry for a smart product is still Hundreds of thousands of dollars, custom development. You know, there's, there's a lot that goes into it, but it sounds like it's something that can be, you know, it's both of these.

There might—

there's going to be a tipping point maybe, maybe in the next few years where you'll be able to off-shelf almost a smart product and 3D print it, make, make the app using Apple's kit.

Yeah.

And, you know, have a functioning prototype that, you know, it may not be the most beautiful thing in the world, but it'll prove an idea, which is amazing because it's so many people have ideas. It's a seemingly limitless amount.

So the barrier to entry is a huge—

anything that can be done to lower it is pretty great.

Yeah.

And I mean, even in the smart area, there's companies that are popping up that are saying, hey, you just kind of give us some things that you wanted to do and it will quickly help you create some really easy, very basic, but some machine learning and some things like that that you can also deliver. So it's like, that's another area where it's like there's a lot of startups that are like, all right, here's another problem. So that, you know, there's 20, 30 startups that just pop up that said, hey, you give us some basic criteria of what you want us to learn. We've already built the backend machine learning piece. Just you plug in what you want and go. And so even that, those are growing at a rapid pace as well. It's crazy how many areas you're seeing lots of startup companies just really deliver some really cool stuff in a short period of time.

Yeah, it feels almost like, you know, not by necessarily intention, but just by how technology is progressing and barrier entry, where it's almost a modular build-it-yourself system where if enough of these companies are really optimizing in this super core area, you can take, you know, a little piece of technology from them and kind of just cobble together your own modularly built system and be able to launch a smart app-enabled physical product kind of all together.

Yeah, one of the things I found really interesting as I've looked at different companies to partner with and stuff like that is that there are a lot of technology companies that are decent size that you can get some of these services for almost free, right? Or even some of them are free with a small user base, right? So that, just that little thing, it's like, great, if you have a great idea, you can use all these different services for next to nothing, right? Just to get you launched. And then as you ramp up your user base, then they start charging you a little bit more. But it's, it's very easy to just go launch all this stuff because it's like, if you're under 250,000 transactions, right? It's like Right. Or if you go over that, then it's a fee, but that helps at least these companies get off the ground pretty quickly.

Right.

Which is an amazing— if you think about it, what other point in time have we had companies able to even offer free? Like, there's a little bit, but the mass scale that it's available now, the free— you can start for free. And then because they've, they've built their system in a way that they make enough money once you're, you're making money, basically, that you can launch. And it's crazy the amount of stuff that you can, you can do for free if you're willing to work with it.

Right.

And do, which is crazy. And, and like you said, it's a big, probably a big part of startups launching right now too, is that they're just You can actually do it. That barrier to entry is free in some cases now, which is, yeah, new. It's a whole new market space to be thinking about.

Absolutely. And I think, you know, a lot of these tech startup companies, so like, even though there's a lot coming that are being spun up every single day, it's, it's, there's a natural attrition within technology where a lot of these companies will go by the wayside.

Right.

But one of the key pieces of like, why do these companies fail within the first year or 2, right? And when you look at it, it is product fit or marketing problems. And so when companies are starting up as a unicorn and just kind of going, okay, I want to really grow this pretty quickly and I want to make sure I'm doing it, like if I want to deliver my product and have a good market fit. And I'm just, I'm a niche person, right? I'm just delivering one slice of a workflow. If I partner, I kind of solve both of those problems, right? Because if I partner with a company that's got the entire workflow, right? And I'm like, hey, I'm just gonna plug into you guys and give you guys some value because that company that's gonna have that entire workflow, they're gonna help me with my marketing problem. Because we're gonna do a lot of press together. We're gonna say, hey, we're, you know, I got this new feature. They're gonna bring their user base to me. And then the product and market fit is like, all right, cool. I'm, instead of me just being off by myself in no man's land hoping somebody finds me, right?

Right.

Now it's in a part of a larger workflow and people find me all the time because I'm solving a problem when the customer needs me to solve that problem.

And do you think that platforms like Zapier, and I know there's a bunch of other, other ones that have started up, there's one I think called Panda.io that has some really specific, they're, they're kind of what you're saying there, they can become a master workflow and they plug in, there's, you know, whatever, thousands, I think thousands of applications at this point for Zapier. And like, is that, is that kind of, do you think that's helping to feed this where, oh, there's an actual, there's now a framework that people can actually start plugging into and they don't have to worry as much about, you know, am I marketing? Can I market? There's already this really cool hub basically in that framework.

Yeah, I think that that's a huge piece of it is that you got to find what, you know, there's different in each market. There's going to be somebody that is trying to act as a hub, right? You know, when you're looking around at the different spaces within technology, there's almost always you're going to find one company that is partnering with a ton of other smaller companies and kind of delivering an end-to-end workflow. And so it's, I think you see that quite a bit.

It's just, The people want—

have in the past maybe been a little bit more apprehensive because in order to partner with that group, you're gonna have to give up a little bit of your profits, right? You're gonna have to, you know, have some sort of rev share or some sort of agreement between you. But, you know, I think companies are gonna start seeing that's really my path to success and to long-term success. Because very rarely do you see a technology company come out of nowhere that started from scratch and, you know, becomes a unicorn and, you know, starts making billion-dollar revenue and all that kind of stuff. That's pretty rare for that to happen in the technology space, right?

We have like Facebook and Google and maybe, and maybe a few, few others that are, that are up there. Um, yeah, I think we talked about this a little bit before too, but just that, yeah, like the, the— it's almost like the day of the Unicorn, one person launch a billion dollar company in 10 years is kind of dead in a way. And that these— this partnership-based mentality is where you can, you can, like you're saying, bring that— you can bring your absolute value because you actually specialize and you're not trying, you know, you're not trying to be a one-man everything and launching your You're— no, I, I know this exact, you know, niche. This is my niche. I know this completely, and I know how to solve this very specific pain point. And now it's more about, yes, all that, that's cool, and then go partner, go build, build these partnerships. Exactly. Yep. So, which is great. I mean, it's far more I think it's an apt time when everybody's wanting more inclusivity and more openness is that now it's very partnership-based is, I feel like, kind of guides people in that direction. You have to work together in general and just the kind of do it all myself, which isn't a bad way, but 2 heads are better than one. When you're thinking through things. So I think it's a very beneficial path that we're on. So, um, yeah, before we wrap up here, do you have anything else along the same vein that has come in your head while we've been talking that you're like, I need to want to say this?

Yeah, I think so. Just on, on another segment, it's in the technology space that is just really interesting. I think a lot of people are thinking about is what's going to happen with streaming services over the next 3 or 4 years, right? Most people have been sitting around watching cable and you go to your big cable provider and they provide all the channels for you and you pay them a fee for getting all those channels. And we're seeing Hulu and Netflix and Paramount is now coming out with theirs. Apple TV has their own streaming service. Disney has their own streaming service. So all these streaming services are coming out there, but in order for them to deliver all those, they're still going to be partnering with people. It's just a different type of partnership, right? So instead of partnering with larger cable companies, These companies are going, okay, I'm not gonna deal with the cable company. Well, like, we're still working with them, but that's kind of— we're looking at that as that's gonna be a rearview mirror. Instead, they're looking to TVs, right? So they're looking at the physical product and they're saying, all right, I'm just gonna deliver all of my products and partner with a Vizio or Philips or those to deliver on these services and to provide these services to users. So it's a really interesting shift and it'll be interesting to see how that changes because when you buy cable service, you may not watch certain channels, right? So you may not watch ESPN, but other people do. But now that's going to change the revenue structure of how some of these streaming services get their revenue because it's like, do I really want to go pay, you know, $12.99 for the Disney+ bundle, or, you know, do I just go to Hulu, right? So it's going to be very interesting to see how that plays out, um, because it's the new hot trend right now. Um, so, you know, I, I don't have the answers for sure on that one, but, uh, I think that's something I'm gonna be watching pretty closely over the next couple years.

Well, that's, that's an interesting thing you bring up of Because we think of, you know, Netflix and all these digital streaming companies as purely digital, but at the same time, like you said there, you know, you still need a physical medium to view, right? You still need a TV. So, you know, and Amazon's done this, you know, they've created their tablets and they've created, you know, Kindle e-reader, right? Because they really sell digital products, but they want you to be able to access Their products. And so that is such an interesting part because it is— without a TV, yeah, you can watch Netflix on your phone and on your iPad, but where do most people really want to see TV? Like, TVs keep getting bigger and thinner and nicer, right? So that's definitely a market need. So that's a really interesting point that they're looking at physical partner, physical product partnerships to be launching. I definitely have seen that. I've walked through Costco and you see a thing is TCL and has Netflix logo. It has who? Like, they're definitely starting that marketing. So I would be interested to see if at some point, you know, one of them starts launching their own systems, if they are right. I mean, even, even, uh, Steam For, for gamers, right? They've launched their own physical controller, their own physical gaming tablet. They're actually— I think they're working on building their own computer line right now. So these, what we think of as typical, you know, cloud-based software only, or not even software but just a hub where you then access content where it's pure digital, is are really looking at this physical part and trying to, you know, be, be a little bit of, you know, Apple and say, oh, well, we give you content and a device, as our device did. And it— so it's, it is interesting to see. And yeah, I'd be curious to see how that pans out with TVs and see if there's a Netflix TV that comes out at some point.

Yeah, it'll be interesting because, I mean, You know, even so, I think what we're going to see is, is the— is how many users are going to each one of those. Because if you, if you get every streaming service, you could be paying hundreds of dollars, right?

Oh, easily. Yeah.

And so you got to pick and choose. And so these companies are going to have to— they've kind of just enjoyed getting a, a, a set fee, right, from the cable companies as far as however many viewers they have, things like that. And this new model, they're gonna— they, they have to continue to be creative as to how do they deliver their product, which is a streaming service, to the user in the, in the most ways possible, right? Because they're not getting it from a cable company, right?

Right.

So that it's, it's gonna be wild. And, you know, it'll, it'll be interesting to see which ones succeed and which ones don't. You know, uh, that's gonna be Uh, well, I guarantee there'll be a couple that, that drop, you know, their, their services in the next couple years just because it's gonna be very hard to compete in that space.

Yeah, yeah, it's definitely a hot competition space. So yeah, it'll be, it'll be curious. I'll, I'll be curious who makes it and who, who quits or, or merges. I mean, I guess that's the other option, they just merge in with someone else.

Yeah, that's what Warner Brothers did, is that they said, you know, we're not going to create our own streaming service, we just don't have the appetite for it. So they went with HBO and said, hey, HBO Max, we're going to deliver all of our movies, our new movies directly to you and the theaters at the same time, which is an interesting concept. And so that way, you know, they don't have to build a streaming service versus somebody like Paramount, which they just— they're kind of late to the game, but they just released their release. They're gonna drop sometime March, April, I believe, their streaming service. So it's like, you know, that's where you're gonna see the interesting conversations at those companies being like, hmm, do I just go to Netflix and be like, all right, you can have all my movies, pay me money? Or, you know, do they build their own?

Yeah, yeah, it's been interesting to watch the— we could talk about this forever, but the last thought is that like the theaters and how Amazon had now, you know, used to be able to pay, right? Basically super rich people could have movies really good on their screen because you paid, you know, whatever, $1,000, some exorbitant amount to have access to Right. And there was like one service that provided day-of-theater release in private homes. And now, like, 2020 doing what it did, we have Amazon has, you know, same-day release. You can pay $15 and your whole family watches it from home.

So it's cheaper.

And now it's cheaper and access, like, it's not the theater. It'll be interesting to see how theaters work through this because there's now more competition with streaming services being able to offer it. And HBO Max, they are definitely releasing new movies and theaters aren't necessarily open at all. So, yeah, I think it'll be a very interesting space to keep watching.

Yep. Theaters might go the way of the drive-in movies.

Yeah, there'll be like one in each town and that's it. And they're nostalgic and take kids to them and say, remember, this is what we did when we were kids.

Exactly.

Oh, awesome.

Well, this has been really great talking about, you know, technology and all this. I definitely could keep going longer. Um, but yeah, thanks for your time. Really appreciate you being on here.

And, you know, if there's any way that you want people to—

if you want to talk to people about it, how would somebody get a hold of you?

Yeah, I mean, I think the easiest way to get a hold of me would be via my LinkedIn. Just search for Robert Rouse, and I'm on LinkedIn. So just shoot me a message. I love talking to anybody that wants to talk technology. Like I said, I could probably talk technology for hours and hours all day. every day. So, um, I'm always open to talk to people about that kind of stuff.

Perfect.

Well, thanks again and have a good one.

You too.