Interview with William Haynes, Founder, President and CEO of Sabai Technology

June 2011

DOUG BARRY: Hello, William?

WILLIAM HAYNES: Hey, how are you doing?

MR. BARRY: Very well, sir. Thank you very much for your time today.

MR. HAYNES: You’re welcome.

MR. BARRY: How are things?

MR. HAYNES: Things are going well.

MR. BARRY: And where are you calling from, or where are we calling you?

MR. HAYNES: In Simpsonville, South Carolina, which is right outside Greenville, South Carolina.

MR. BARRY: Simpsonville, all right. Simpsonville. And then you pronounce the company Sabai?

MR. HAYNES: Yes.

MR. BARRY: Oh good, all right. Okey-doke. So any concerns before we get started, or –

MR. HAYNES: No, I’m excited about talking with you about it. I actually have a meeting with my FedEx rep and international rep right after this meeting, so –

MR. BARRY: Oh good, they’re dropping by or are they calling you, or how are they doing it?

MR. HAYNES: We’re actually – we’re working on creating a new pricing structure. There’s a couple of things we’re working on. One is, the international rep is working with us on the possibility of going to flat pricing for different regions of the world which will make quoting a whole lot easier and should really help our customers in terms of lowering the cost.

MR. BARRY: Yeah, that’s excellent.

MR. HAYNES: And then the second thing is, we’re trying to figure out how to transition as much of the USPS current shipping we’re doing over to maybe FedEx Ground. It’s mainly the U.S. – we’ve pretty much stopped USPS internationally as much as possible.

MR. BARRY: Understood. Well, why don’t you just –

MR. HAYNES: Just because of the customer experience.

MR. BARRY: Right, exactly. There’s definitely a difference there, especially when you’re dealing with foreign postal services. Once it leaves the hands of the U.S. Postal Service, which is almost immediately after it gets on an airplane –

MR. HAYNES: It goes into a black hole.

MR. BARRY: It does, you’re right.

MR. HAYNES: And the challenge is it just takes 1percent, 2 percent of packages with an issue before it throws your shipping department into –

MR. BARRY: Complete turmoil.

MR. HAYNES: – kind of chaos. Burns unbelievable hours; in the same time they could be shipping 50 packages, they’re dealing with one.

MR. BARRY: Exactly, one complaint. Well, why don’t you hold all of that good stuff and –

(Audio break.)

MR. BARRY: Hello, and welcome to the U.S. Commercial Service Market Brief. I’m Doug Barry in Washington. In today’s program, we’re featuring Sabai Technology, which is a maker of wireless routers in Simpsonville, South Carolina. And with us on the telephone is William Haynes. Hello, William.

MR. HAYNES: Hello, Doug. Great to be here.

MR. BARRY: Thanks so much, I really appreciate you giving us your time today. And we wanted to talk to you a little bit about how your company got started in exporting.

MR. HAYNES: Well, it actually started when I got laid off. After looking for work for a couple of months, I decided to put some of my knowledge to use and started developing specialized routers. There’s always been a big users group of alternative firmware called DD-WRT or Tomato and what I found was there were people who wanted to use this technology – this firmware – on their routers but maybe didn’t have the same technical background that I did. So I started developing these for shipping and then the next step is – so that was all domestic – but then the next step was looking for companies that use these types of routers, but that’s not their business, that’s not what they’re selling.

And in looking for that, I found – the first company I found is a company called HotSpot Systems that does those hotspot routers that are in airports and travel places. And I started shipping routers for them, configured for their services. The next partner company we found was a company called StrongVPN. They provide VPN services – virtual private network services – so that – say you’re an executive who’s been assigned to China for two years, you still want access and you want secure access to the U.S. StrongVPN provides those VPN services so that you can connect to the U.S. and all your Internet traffic is encrypted from China to the U.S. and then once it hits the U.S., it goes out to the open Internet and goes to its target. There were a lot of people who wanted routers to do that for their whole household rather than just one computer and we contacted that company, asked them if we could develop routers for their customers. They agreed and next thing you know, we were shipping internationally.

MR. BARRY: And how many countries are you now selling product to?

MR. HAYNES: We sell product to every company except the ones that the Department of Commerce has told us not to and then there’s a list that they’ve asked us to check with them before we ship. But we have currently shipped to I’m sure over – I don’t want to exaggerate, but I’d say 60 to 80 countries.

MR. BARRY: Wow, that’s amazing, especially since the average U.S. exporter is shipping to maybe two or three or four. That’s extraordinary.

MR. HAYNES: Yeah, one of my favorites – we’ve shipped some incredibly interesting places. We did a lot of business in the Middle East during the spring because of the spring uprising. All these –

MR. BARRY: The Arab Spring, yes.

MR. HAYNES: The Arab Spring – a lot of people wanted unfettered access to news and information and our router helped make that possible. So we were shipping a lot to a lot of those countries this spring. One of my favorites is we shipped to the Faroe Islands. FedEx handled that and it was crazy. It was there, I think, in three or four days. And if you’re not familiar with where the Faroe Islands are, it’s halfway between Iceland and Scotland out in the middle of nowhere.

MR. BARRY: Now, without getting into the technical aspects of your device, when you shipped these routers to the Middle East during the Arab Spring, your device helps private citizens, for example, get around whatever governmental blackouts there might be in that area?

MR. HAYNES: Yeah, it basically encrypts – say an executive or someone who’s bought our router has it in their home or business. Everything from their network – all their computers and devices that connect to our router – it’s unencrypted within the home, but as soon as it hits the router, the router encrypts it and there’s two different levels – a low level of encryption or a high level, depending on the security and speed that the person needs. And it takes it encrypted from that home all the way to the endpoint that the user has chosen where their server is – so either the U.S., or if someone’s a U.K. citizen they might have a server in the U.K. or – through StrongVPN.

So it stays encrypted until it hits that endpoint server, at which point it’s decrypted and goes out to the Internet. So it allows people – like during the Arab Spring – to go to CNN and get the news and information; to send emails knowing that from the time it leaves their home to the time it hits the U.S. or the country they’re connected to, it’s totally encrypted so that they can send an email asking for information. Now, once it hits the U.S. server or whatever it’s connecting to, at that point it’s decrypted and just regular Internet traffic like you would send over your ISP.

MR. BARRY: OK, understood. Now, being in 80-plus countries, how would you describe the importance of exporting to your company? What percentage of sales does it comprise now?

MR. HAYNES: Oh my goodness. I would say, at this point, 85 percent of our routers are going overseas.

MR. BARRY: Wow, so it’s crucial.

MR. HAYNES: Yeah, one of my biggest pushes is – I just find that the FedEx experience – when people pay for the FedEx shipping on their international package, it’s just – the experience for the end customer is excellent. So a couple of examples of this are – we had a customer who ordered at 2:34 in the afternoon on a Monday afternoon to Sao Paulo, Brazil. Well, 10 a.m. on Wednesday morning – less than 48 hours later, they’re contacting us letting us know they’ve gotten the router, it’s installed, it’s up – thank you so much, how wonderful this is. We couldn’t do that with anyone but FedEx.

MR. BARRY: Yes, and let me explain to listeners who may or may not know that the U.S. Commercial Service and FedEx are partners. We have other partners as well, but FedEx is an important one. And FedEx and the Commercial Service have teamed up to offer a sort of joint solution – export solution – to FedEx customers who then become clients of the Commercial Service and you’re one of them. How does that work in practice?

MR. HAYNES: For me, it’s a dream come true in many ways. I was honored beyond measure when the U.S. Department of Commerce is interested in speaking to this – we’re not even a year-and-a-half old – you know, this young company that’s just starting up, doing exports. And literally, FedEx made that introduction. And it’s one of those things where we could have just continued as is for probably several years without really realizing the full extent of the resources that were available. But because FedEx is our partner and because they saw us succeeding and they saw the exports we were doing, they knew that we’d get – benefit from meetings and information and resources from the Department of Commerce. And already, that’s paying dividends.

MR. BARRY: And William, of course the U.S. Commercial Service is part of the Department of Commerce and we’re very much involved in the president’s National Export Initiative. We have an office in South Carolina near where you are.

MR. HAYNES: Exactly.

MR. BARRY: You’ve used them – what kinds of help have we provided and how have you used it?

MR. HAYNES: For me – for a new business – and from someone who isn’t that knowledgeable – you know, I’m gaining knowledge every day in exports – the biggest thing was they came and sat with me; we went through my company specifically. So it wasn’t a generalized conversation about exporting in general; it was our exporting at Sabai Technology – what we’re doing, where we’re sending to. And we discussed basically the resources that were available. One of the things that we did was – the U.S. Commercial Services, through the Department of Commerce, does a – I don’t know what you call it – a magazine?

MR. BARRY: Yes, Commercial News USA.

MR. HAYNES: Yeah, that goes out monthly with opportunities for people in other countries to become distributors or partners with companies. So we have advertised in that and we’ve gotten back our first several responses and we’ve got organizations, companies in countries like Zambia wanting to buy and distribute our product.

MR. BARRY: That really sounds like – so the bottom line, then, is that the magazine and the other services available are growing your business and sound like they’ll continue to do so.

MR. HAYNES: Yeah, and a lot of it is also – it’s just information I wouldn’t have even known, you know? He discussed with me how you can insure your product when it’s being shipped and you’re ensuring that you’re going to receive the funds from the other party, how letters of credit work, how – I’m just a babe in this stuff, and to have someone hold my hand a bit and walk me through it – it’s going to really accelerate the rate at which we can grow our international business.

MR. BARRY: Well, then let me just ask me about your website, which I looked at a little while ago. And what struck me as impressive is that you say proudly and right up front that we ship worldwide and you’ve got the FedEx logo there. What has been your experience in e-commerce? Give us some suggestions if we were to have our website open for business to the globe. How do you approach it?

MR. HAYNES: I tell you what, I just don’t think there’s a better opportunity available to people. I literally – from the time I was a kid, I knew if you could a product or service – something on a local scale, that’s great. But if you can get it to a national scale, now you’re able to really hit some big numbers. But if you’re able to take a product, a service, an idea and implement it on a worldwide, global scale, now the sky is the limit.

MR. BARRY: And how do you present the site so that it does reach these international customers?

MR. HAYNES: Biggest thing on that, honestly, is networking. So you want to use your social media to expand. So for example, one of our core markets for our product is U.S. diplomatic staff that are stationed overseas. So we’ve got a ton of U.S. diplomatic staff, security personnel, military, that kind of stuff. Well, the Foreign Service people have a forum on Yahoo! where they tell each other – oh man, I found this StrongVPN service, it’s wonderful – I’m able to surf, now, in the U.S. and know that my traffic is secure. And then someone else writes and says, boy, but I found this company, Sabai Technology, they can take that and give it to your whole home instead of just one computer.

Apparently, by developing social media and by encouraging customers to talk about their experience with you and if you use FedEx and services where you can provide an excellence in experience, then people are going to talk about you. So in providing links, in providing good email support so that they have their tracking number, things like that, you create a customer experience where people want to talk about you. And they’re going to talk about you on Facebook, they’re going to talk about you on LinkedIn, they’re going to talk about you in Yahoo! Groups.

The other – (audio break) – is finding websites – probably a third of our traffic right now comes from StrongVPN. So by partnering with a company who’s already strong – excuse the pun – and already has a large amount of web traffic, when they put our company on their site, all of a sudden your traffic just kind of goes through the roof.

MR. BARRY: Well, you’re giving us some very, very good marketing ideas here and we appreciate it. And in closing, as we’re sort of running out of time, what have you learned – maybe the most important lesson in exporting that you can share with our listeners?

MR. HAYNES: I would say the number one lesson I’ve learned is just how critical and crucial customer contact, customer communication and customer service is. With all the customers that we’ve had in the Middle East, for example, it’s amazing how many times we’ve heard that this was the best service that they’ve ever gotten. And that’s what creates word of mouth. That’s what creates loyalty, that’s what creates raving fans. And honestly, that will be marketing – that is marketing. That will beat traditional print marketing kind of stuff all day long.

And what you’ve got to do is make sure that front to back, from the time they place an order to the time they get it in their hands and even after for technical support, that it’s seamless; that it’s well communicated; that they have a certainty that when they’ve given you their money, they’re going to get their product; that they’re able to track it through the process. To me, that’s the most important thing on international – on exports.

MR. BARRY: And of course, these aren’t new ideas, but the execution is critical. And it sounds like you’re doing it very well thanks to –

MR. HAYNES: The execution –

MR. BARRY: – the Department of Commerce, FedEx – yes.

MR. HAYNES: Yeah, absolutely – the execution and the integration.

MR. BARRY: Right. And thanks to you, because without you being the detail person that you are and looking after all of these things to make sure the execution is top-notch, then you would not be in the 80-plus countries you’re in today.

MR. HAYNES: That’s right, that’s right.

MR. BARRY: Well, William, we really appreciate you being with us today. And good luck on your future ventures. I think there are close to 200 countries in the world so you have a little further to go.

MR. HAYNES: That’s right, that’s right.

MR. BARRY: But something tells me you’ll get there.

MR. HAYNES: Thank you, thank you. I have no doubt that with the partnership with FedEx, with the Department of Commerce, the U.S. Commercial Services – between the two of those, it just makes a great partnership. I have no doubt we’ll get there.

MR. BARRY: William Haynes, thank you so much. That was William Haynes, the owner of Sabai Technology, South Carolina, maker of wireless routers talking to us about his experiences in exporting. Thanks for listening today and we hope to see you soon on another Commercial Service Market Brief. I’m Doug Barry in Washington. Thanks.

(Audio break.)

MR. BARRY: William, that was great.

MR. HAYNES: Good, good, good.

MR. BARRY: Really appreciate it. So we’re going to make a transcript of this, we’re going to – we need a photograph of you, if you’ve got one around somewhere – with a router, without a router – whatever you generally use. And if you could send that to me – I’ll send you a little reminder email this afternoon.

MR. HAYNES: That’s great.

MR. BARRY: And we’re going to put it on our website. It’ll probably go on FedEx’s and it will probably be – it will certainly go into a newsletter that we do that goes to 10(,000) or 15,000 people –

MR. HAYNES: Wow.

MR. BARRY: That will be maybe August or September and we’ll make sure you get copies of everything.

MR. HAYNES: That’s wonderful, that’s wonderful – thank you.

MR. BARRY: Word of mouth.

MR. HAYNES: I tell you what, it’s huge. Here’s what’s crazy – and I didn’t really want to say this live, but – because it almost sounds braggy – but our sales are generated off – our most expensive marketing – this is also another reason I didn’t want to say it – was spending the 500 bucks for the U.S. Commercial Services magazine. I mean, we spend two (hundred dollars), $300 a month on marketing because I just honestly believe that growing it organically by word of mouth is the most powerful, so –

MR. BARRY: Yes, how many employees do you have?

MR. HAYNES: We have – full and part-time, we’ve got nine.

MR. BARRY: Nine, okay. And do you see that growing in the future as sales increase further outside the U.S.?

MR. HAYNES: Oh, definitely. One of the things that’s been interesting is that literally, when I started last year, it was just me – employee number one. I don’t know what your politics are, but I just honestly believe that in this time, I couldn’t have picked a better time – I couldn’t have picked a time – it’s a tough time economically for people. But when I started, I had unemployment that helped bridge the gap while I got things up and going, I get tax incentives for the new people I hire. The Department of Commerce is interested in coming in and holding my hand and working with me on this thing. There’s just resource after resource after resource that I couldn’t have imagined.

And I’m honored beyond words to be able to have those employees that I’m providing an income and a career and it’s just neat. Our biggest thing is – remember when I said in the beginning, when we started we saw this market of people using these alternative firmwares and we started addressing that market. The thing I’m really excited about now, that we’re doing – and we’re close to beginning the first rollout – is that we’re taking those operating systems and we’re modifying them even more so that the new build of the operating system is ours. It’s got our logo in it, when you reset it, it goes back to our settings. It is optimized – for example, for StrongVPN or optimized for HotSpot – so some optimized for our applications that we’re doing it for. In a more granular way on our side, but from a customer experience, it’s far more foolproof. And it’s more simplified and they’re able to just log in and put in their information even more simply.

MR. BARRY: Right. Now, are you the engineer or who does the engineering stuff?

MR. HAYNES: I’ve worn every hat here, as any entrepreneur will tell you. But we have – at this point, I’ve just hired people smarter than me in those areas that can do the software programming and things like that. I’m more the bigger picture guy. I can get into the details, but I have to be highly focused, the door’s got to be shut, people have got to leave me alone kind of stuff. But in terms of knowing what I want the customer experience to be or knowing what I want the operating system to look like or knowing how I want it to work to meet what the needs of the customer are, that’s more my role as we grow.

MR. BARRY: Right, you need that kind of person and as you say, you’re smart to hire the smarter people to do the technical stuff and you’re the visionary and you’re the guy who created things and you’ve got a lot of competition. And you’ve found your niche and you’re pursuing it.

MR. HAYNES: And I tell you what’s funny in terms of competition, you know, you’re always going to have competition, you’re always going to have people nipping at your heels, but the one place where you can generally compete best is in customer service and in quality of execution. And that’s where – not to just keep jumping on the FedEx wagon – but to me, that’s part of what’s been just great with them is that if you’ve got someone who comes in and competes and they start – they’re trying to cut costs so they’re using USPS or they’re trying to make a bigger margin so their technical support isn’t as good, they’re not spending the money they need to there – that kind of stuff – generally, if someone’s going to try to take your business and snag your ideas and compete with you kind of stuff, a lot of times they’re going to be looking for the easy money.

And customer support ain’t easy. Shipping something in three days to Dubai ain’t easy, you know. You’ve got to pay for it; you’ve got to provide that level. I’m really excited about the meeting I’ve got with the FedEx guys here in the next few minutes because I think we’re going to be able to make it an even better customer experience and we’re going to be able to start expanding to do more of the U.S. shipping as well on –

MR. BARRY: That’s great. (Audio break.) How many boxes do you ship in a typical business day?

MR. HAYNES: Right now, we’re shipping 10 to 12 boxes and eight of those probably are FedEx.

MR. BARRY: And half are international or –

MR. HAYNES: Probably three-quarters.

MR. BARRY: Three-quarters – that’s great.

MR. HAYNES: Yeah, I looked the other day – the FedEx people have it – I looked the other day at what we’re spending with FedEx and it’s – I forget. It was some number that just was mindboggling to me because – for example – in fact, I was going to tell you, I thought this was funny –

(Audio break.)

MR. HAYNES: One minute, two minutes before your phone call, we got an order from Guangzhou in Guangdong, China. Well, for FedEx International Priority shipping, 118 bucks. And that’s just a typical order.

MR. BARRY: And was it a Chinese person who bought it or was it an American living over there?

MR. HAYNES: His name – hold on – Zhen Zeng Liao (ph).

MR. BARRY: Yep, a Chinese person.

MR. HAYNES: Looks like a Chinese person to me.

MR. BARRY: Yeah, that’s good.

MR. HAYNES: And he’s with the Yuexiu District on Dongfeng Road in Guangzhou.

MR. BARRY: So it could be a government office, right?

MR. HAYNES: It could be. And it’s really interesting – here’s one of the funny things, it’s hilarious – and again, I wouldn’t have put this on the tape, but –

(Audio break.)

MR. BARRY: Now, going back to one of the things that you said, is it possible, then, for someone in Egypt who may or may not have been involved in the efforts to overthrow the Mubarak regime to use your product to get Internet access and to send messages even though the government was attempting to block and unplug all of that?

MR. HAYNES: Yes.

MR. BARRY: It was. OK. Yeah, so –

MR. HAYNES: Yeah, and like any other technology, it could be used for good; it could be used for bad. I generally – because – you know, and I’ve never had an official conversation on this, but I’ve had several unofficial conversations that kind of lead me to this line of thinking – StrongVPN, as far as I understand, has been vetted and has a very good working relationship with government people. You know, no diplomat in Russia is going to sign up for some VPN service unless someone approved it and said it was okay.

(END)

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