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September 25, 2017 Issue

CEOCFO MAGAZINE

 

Q&A with Richard Chang, CEO of NewFoundry with Strategists, Designers and Engineers providing Software-based Product Development taking an Idea to a Marketable Product

 

 

Richard Chang

Chief Executive Officer

 

NewFoundry

www.thenewfoundry.com

 

Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – September 25, 2017

 

CEOCFO: The tagline on the NewFoundry site is “Forging big ideas.” How so?

Mr. Chang: Our wheelhouse is around product development (primarily software-based) and, as a small company, we are careful about who we work with and what we work on using our finite resources. We create the biggest impact by focusing on the big ideas, whether they are based around a social mission, consumer products big or small (sometimes serving a niche market but solving a big problem), or business-to-business solutions that help a company gain massive competitive edge. For us it is about focusing on the projects that make a difference.

 

CEOCFO: What are some examples of when someone would turn to you, what they would present to you and how you would take it from there?

Mr. Chang: We work with startups all the way up to large corporations, but it always boils down to an interesting challenge or idea the client is trying to bring to fruition, but is just not sure how to go about it. Some of these companies come to us with an idea on a napkin that they think can be marketable and successful, but they are not entirely sure it can be done. They also want to know how to bring it to market. Therefore, we split the process into three phases. We have a strategy phase, a design phase, and an engineering phase.

 

Our strategy phase is one of our key differentiators because we don’t need the client to have everything figured out and drop a specification document on our lap for us to be able to deliver. Most of our clients bring us the kernel of an idea or a challenge they need to solve and we figure out exactly what it needs to be, then we design and build it for them. Another differentiator for us is that we are always thinking about ideas beyond the client’s short-term needs – we take our partnership role seriously and help our clients build competitive edge. They are able to come to us as a one-stop shop to create a long-term product roadmap and get everything they need at a very high level of quality.

 

Here is an example. We have a client in the embedded chip industry and they’ve stayed a bit under the radar, especially compared to their competitors. They wanted to make themselves more prominent and be a bigger player so we looked at the industry, ideated a great solution, and brought it to them. Instead of them coming to us with the idea off the bat, we had a bunch of different discussions with them that eventually led to the product that we have been developing with them for a couple of years and are aiming to launch in the near future. We hope it will shake up the industry, but in a good way. It will not just affect their own business but also the partners that they work with. The concept empowers their partners to monetize their IP and yield tangible results out of their association with our client. That is huge. Many times, the partners do not have a voice or a way for people to find them or utilize their skill set. This is big!

 

CEOCFO: How do you assess whether the idea is worth working on for a potential engagement?

Mr. Chang: Some of it comes down to intuition, but we have had so many projects come through our door that it is a lot easier for us now than it was five years ago to know pretty quickly if it is a good project or not. We will do market research and other data gathering to determine whether the concept has a chance of success. However, even if our research causes us to conclude that it will be a challenge to succeed, we try to approach it in a different way by saying, “Maybe the original idea as-is won't be the most successful, but is there a different approach we can take?” We call it "finding open water." Extremely unique ideas are very rare, thus it is our mission to determine the differentiator that will connect in the marketplace and how our clients can be competitive and have a higher chance of success.

 

CEOCFO: How do you reach out to potential clients and how do people find out about NewFoundry?

Mr. Chang: That has evolved over time and we now rely on various methods. In the first three years we were fortunate to rely on word of mouth among the network of my two business partners and I along with that of our team. The fact that we are industry agnostic helped us build a very diverse portfolio early on. As we finish and launch projects over time, we gets leads from companies who see our work and call us to see if we can help them out.

 

A lot of our business is also repeat business. We try to avoid the one-and-done client services model. We provide way more value when we can be a true business partner and help ideate and deliver ways for a client to grow/maintain competitive edge.

 

We also partner with some local organizations such as SPARK here in Ann Arbor and also some investment firms/VCs. The investment firms/VCs like to work with us because we can help companies they are interested in get version 1.0 of their product launched without needing to worry about trying to hire an engineering team at that point in time. What we're hearing is that the reality for some of these startups is that: (1) there isn’t a very deep bench of engineers available to hire; (2) they pay the engineers they do manage to find with equity since there isn’t enough cash flow for payroll; and (3) they may not get what they need out of their development team but they now have a group of folks who are tied up in the company due to the equity-for-pay arrangement. It can be a real headache. So the VCs use us for fulfillment to help those companies get version 1.0 developed and launched, and if the product does well in the market, then they fund them and they can bring the future work in-house.

 

The final way that we find new clients is that in the last year we established a business development team that goes out and actively chats with potential clients.

 

CEOCFO: On your site, I see names that are well known. Do they come to you repeatedly as they are working on new ideas?

Mr. Chang: Coming back to one of your prior questions about what kind of projects we choose and how we vet whether we think a project or a product is going to be successful or not, one of the underlying ways we approach it is our gauge of the client. Our preference is to work with a client with whom we see the potential for a long-term relationship, one that we can invest ourselves in to help them achieve a range of business objectives. Everyone has projects and products, so it comes down to the relationship that we have with our clients. Our main goal is to continually provide them with value. We want them to view us as a partner versus seeing us as just an expense. With our clients, we love to proactively observe challenges and suggest solutions even if those solutions may not involve us – we think they are something worthwhile for them to look into to grow their business.

 

CEOCFO: Would you tell us about your recognition on the Inc. 5000 list?

Mr. Chang: It was a great honor to be named one of the 5000 fastest-growing private companies in America this year. We ended up ranking at 1347, which was a lot higher than we thought we were going to be. Being ranked on the Inc. 5000 list in our fifth year of business is a real testament to my business partners, our awesome team and the dedication to their craft, and all of our wonderful clients. We cannot succeed without any of them.

 

CEOCFO: What if anything has changed in your approach over time? What have you learned from the business side along the way?

Mr. Chang: We have been fortunate to have a diverse set of clients and as a result, we have learned an immense amount about running a client-focused business catering to any industry. One of the main lessons learned is being flexible plus being willing and able to adjust as time goes on. When we first started out, one of the things we had to do was build a project portfolio so we took on pretty much everything that came through the door. We have to be more selective now due to resource-availability and opportunity-cost constraints.

 

An example is that early on in our company’s history, when we were making sure to keep the doors open and lights on, we had to turn away some quick-cash projects because they would have prevented us from taking on the work from some other long-term leads that were under discussion. We had to keep ourselves available in case those leads gave the thumbs-up to the engagement. It was a risk to turn away that guaranteed work (and cash) since the long-term project was not confirmed, but we knew we had to go this route even though financially it was extremely stressful.

 

CEOCFO: How do you continue the trajectory? What is next for NewFoundry?

Mr. Chang: It is staying ahead of the trends. We are definitely enjoying working in the autonomous vehicle space across different technologies for that industry, but we are also involved in other technologies such as AI. We are keeping our eye on other technologies such as renewable energy and robotics.

 

Overall, if there is software that can be written, we can do it. We are a solutions-oriented company that uses software to deliver results. We discovered that it is not the actual platform or the product technology that we use (the client typically isn’t as focused on that piece); it comes down to providing a solution and sometimes those solutions may be based on a web browser or mobile device, or even run in a car dashboard.

 

There will always be new platforms to discover and use to our advantage! As long as we continue to keep ourselves flexible – using and learning the technology available and coming soon – we will be in a good place. This allows us to provide the best solution for what is needed to bring that product to market.


 

“Being ranked on the Inc. 5000 list in our fifth year of business is a real testament to my business partners, our awesome team and the dedication to their craft, and all of our wonderful clients. We cannot succeed without any of them.”- Richard Chang


 

NewFoundry

www.thenewfoundry.com

 

Contact:

Richard Chang

734-348-3828

rich@thenewfoundry.com



 


 

 



 

 


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