I had the pleasure of interviewing Mr. Scott Warzecha, the founder and president of Netgain Hosting. Mr. Warzecha founded Netgain in 2000 to deliver proactive IT services that would increase organizational productivity and decrease IT cost.
“Purchasing new servers every four years, replacing faulty switches and firewalls, investing in and running tape backups every day, hiring, training, and losing IT staff, installing software on individual workstations, troubleshooting user issues. These are the pains that organizations face every day with traditional in-house IT networks. Looking to improve IT operations in organizations of all sizes, Warzecha, together with the technical expertise of Netgain CTO Scott Baynes and the operational ability of COO Matt Riley began providing IT outsourcing services that eliminated virtually all of these pains for their clients.
“Netgain’s IT outsourcing eliminates the need for expensive in-house hardware like servers, tape backups, firewalls, and standard workstations. Instead, Netgain provides this hardware through its highly secure and private data center.
MDWebPro: Tell us about yourself and about Netgain:
Warzecha: “I am the founder and current President of Netgain. My responsibility is to create the vision of what Netgain is and what we are going to become. I spend much of my time doing research and keeping my finger on the pulse of the industry. From that, I also do a lot of work developing the strategy of Netgain and figuring out things like what we will invest in, what we will not invest in, how we will pursue strategic initiatives. This all points us toward what types of employees we need to hire.
“I spend most of my time guiding Netgain, coaching and encouraging our employees. For a long time I was the person doing the tasks, but now I have found that I really enjoy being the leader instead of the ‘worker bee.’ I thought it was all about myself and all about me service the clients, but I found that I could serve so many more people when I hired qualified people to do the work. And my role now is to learn how to serve my employees.
“I believe that hiring the right person to do the right job is a key function of our growth. I see myself more as a businessman and less as a technician or salesperson.”
MDWebPro: What would you say is the vision that is cast to your employees and the objectives that Netgain strives to accomplish?
Warzecha: “First off I will start and tell you that we are a Cloud service provider. That means that we operate data centers so that our clients don’t have to go out and buy the digital storage themselves.
“Before Netgain I was in the technology field. I put together the technology packages that a client needed and then delivered it to their physical site. I found that it took a lot of dollars to keep this technology maintained, or it took a lot of money to hire the people to service this technology in house. So hosting, which became cloud services became the way to solve that problem while still providing the service. And that seemed to work!
“Around five or six years ago we decided to work specifically in healthcare. We found that healthcare was a great market to be involved with because our hardened security techniques perfectly matched the needs of the healthcare market. The government also started requiring the meaningful use of electronic medical records, which then accelerated our growth. We do work with clients in other industries outside of healthcare, usually those with regulated data, but we work mostly with healthcare.
“We tell our employees that we want to keep a cool hand at the rudder. We think we nailed it when we took cloud services and combined that with healthcare, so we want to continue to do what we have been doing well. What did change about 3 years ago is that we wanted to start building a national brand. At that time about 80% of our business was coming from inside the state of MN and we wanted to be doing about 80% of our business outside of the state of MN. So we started to do advertising, going to trade shows, and telemarketing.
“2012 was the first year where a majority of our new business was from outside the state of MN, and we recently purchased a company in Chicago that is going continue to help build our national brand.
“Our plan is to stay in healthcare and to stay in cloud services. The future is bright because there is not any upcoming earth-shattering technology that will replace cloud services, and we know that the market that we are working with is substantial enough to accomplish our goals as a company. This level of stability is a very important message to tell our employees.”
MDWebPro: How many people does Netgain employ now, and do you have major goals for growth?
Warzecha: “We have 92 employees. Our operations and support centers in st. cloud, we have about 6 employees at our office in Minneapolis, and then we have 16 employees in our new office in Chicago.
“Our goal is to become a company with 225 employees in the next four years. Growth is a very important part of what we do, and we have built a strong brand in the healthcare market, both nationally and locally.
“When we are working with administrators they are often very thankful to have found a cloud provider dedicated to healthcare because the software that they are using is fairly new, which means that there are often kinks to work out.”
MDWebPro: How did the idea of starting Netgain come about?
Warzecha: “I was working very closely with our clients to solve problems that required a lot of work and so I realized that there was a better way to accomplish the goal without having to move so much equipment into the field, and then have a tech come out whenever there was a problem. Because what clients found was that often the problem would be solved when the technician was on site, but after they left problems would come up again.
“One day I was reading about ASP, which later became Cloud servicing. Part of my role was to be the eyes and ears of the company to help decide which services we sold and which ones we didn’t sell, so I came to my boss and said, ‘We need to get into this cloud servicing. We should start providing a service instead of selling a product.’ After explaining it all to them they turned the idea down, and so at that point I decided to step away and do my own thing.
“I believe that this was the better way of doing computing, instead of buying and doing all of this work yourself. And as I founded Netgain, I got to be the president.
“One of biggest things I realized was that in becoming president I had to put down the screw driver and I had to hire other people to do the work that I had been doing for so many years. Had I not moved from being the technician to becoming the president, Netgain would much smaller than it is today.
“I had to retool myself from being a technician to business person. I had to refocus myself and understand about mission, vision, values, and strategy and that was part of my success.
“When I first started as president, my vision for the company went up to about 25 employees and then stopped. And as it happened I had to keep sharpening myself, learn about developing employees, and having fun while doing it.”
MDWebPro: What brought you from being a technician to becoming the president of Netgain?
Warzecha: “I founded the company, but before that I worked for another technology company as a technician for a number of years, then I worked as a salesman for 9 years, then I moved into advanced technology solutions developer.
MDWebPro: How would you describe the foundational characteristics of Netgain? What are some of the pillars that you have built Netgain on?
Warzecha: “It starts with having the right employees. I once heard a very wise businessman say, ‘Just hire the best people and get out of their way.’ I oversee all of the hiring at Netgain because I want to know that we are hiring the right people for the job.
“What we look for in our people is a passion for what they do a passion for technology, humility, and customer service. That idea of customer service and humility is very important because many tech people often make the mistake of conducting themselves as too proud to serve.
“Our culture and climate is all about autonomy and investing into our employees. Each person is on a very structured professional development plan so we set them on a path that will:
1) develop your personal skills
2) develop your team skills such as communication and art of persuasion
3) develop your strategic goals
“We are not developing any new technology, but it all comes down to execution. We believe that if you are not managing your development, you are deteriorating.”
Scott Warzecha – Founder & President In 2000, Scott Warzecha set out to build a business that would relieve the frustration of owning technology and give small and medium sized organizations a trusted IT advisor. Today, as the president and CEO of Netgain, he still holds true to that same vision of simplicity and service.