Four Winds Interactive is one of the largest and most well-known pure play digital signage companies in the industry.
But the Denver-based company went a little quiet about 18 months ago, when a venture capital company based in Austin, Texas took on a majority stake.
That perceived quiet spell changed recently when word circulated that Four Winds had itself completed an acquisition - a UK company focused on workplace communications and operations.
News of that deal presented a good reason to get back together on a podcast with David Levin, who started the company and has long been its CEO.
We chatted about several things, including where the company is at, how fully half of its business is now with screens that are employee-facing, and why he and his clients call the work visual communications.
We also get into how the company is weathering the pandemic, with maybe 15% of staff going into the company's two Denver offices, while the rest work from home. Levin goes in, by the way.
So David, good to catch up. It's been a long time since we've seen each other.
David Levin: Thanks, Dave. It's been way too long.
It's been my impression and you can correct me, that about a year and a half ago, you weren't acquired, but you got a major investment from a private equity firm. And, since then, you’ve been kind of quiet. I don't see Four Winds Interactive around as much as I used to, but tell me I'm wrong and that you guys are noisy as hell and I'm just missing it.
David Levin: We might've been quiet, from a press standpoint, but we've been very busy. We did do a majority investment from Vista Equity Partners about 18 months ago. And we've been hard at work. I think when we talked maybe three years ago, we were at the early part of our FWI Cloud Initiative, that we are now into end to end on cloud and have had, I don't know how many releases, but a lot. We're extraordinarily proud of where that's turned out and with Vista, we've made a lot of changes operationally that are great. We've changed a lot of things in our go-to-market operation. And, building the foundation for the company for the next phase.
Now, what drove those changes? Was it because the PE guys or VC guys said you need to make these changes or the cash infusion and support enabled you to make changes that you already had in the works or wanted to do?
David Levin: So one of the things we liked about Vista and the reason we partnered with them is that they invest exclusively in software companies and they are known for studying best practices and figuring out what works best. And that's an evolving process because, as companies try new things that go back into the best practice creation, companies evolve together, but you get the benefit of being able to be a member company of 60 plus software companies and figure out what works best. And for the 14 years prior to that, we had essentially figured everything out on our own. And, I was excited to have those resources available to us.
So, long story short, we jumped full-on and implemented a lot of the best practices.
What does it mean culturally? As you said, you had 14 years of, pretty much bootstrapping with some angel level private investors, building the company up to where it was at, to then go to having majority owners outside of the company. And now, you're still in charge, but you have masters.
David Levin: Yeah, well, it doesn't feel like that. You know, they are a majority owner, but we still retained a significant stake and we have a meaningful ownership piece in this business. I started and have been the CEO since the start, it will always feel like our organization, regardless of the equity structure and they're very collaborative. So it has felt like a partnership.
Yeah. One of the things when the announcement happened that you guys had done this deal, I looked at the company and I looked at the portfolio of companies that Vista already had under its wings and thought, this is interesting. There's a whole bunch of companies in there who I could see doing integrations with and getting you into lines of business or opening doors that would be very hard to otherwise open it. Has that played out or was I just imagining things?
David Levin: The investment thesis wasn't about integration with other portfolio companies. We are what's considered a platform investment for them, which is, they're picking leaders in software industries to go win a category.
And the platform investment is the first company investment in a space. And then, in almost all of their investments, there add on acquisitions to that platform company to help when the market broadens the offering to customers, and the Spark Space acquisition was our first acquisition. That's part of that. So no, it was a platform investment versus something related to integration with the portfolio.
But when you have kind of sister companies, so to speak, who are doing work, let's say, in the restaurant or hospitality industry, and they have a platform that does whatever it does, it struck me as so many technologies are starting to blend and blur together that there were complimentary technology opportunities here that you could add capabilities to another platform and vice versa and enable integrations.
David Levin: It's super helpful from an integration standpoint.
So where customers want to, in a simple case, pull data from a US system and that system is part of the Vista portfolio, then it's obviously easy to make a call and get the product teams working together, but that wasn't core to the investment strategy. That's just a helpful benefit.
Right, and what has it meant for the company in terms of how you operate? You said you made a lot of structural changes and things like that. How has that played out?
David Levin: Yeah, so we've changed our sales territories. We have increased investments, and in marketing, I think, we had launched just prior to the investment, but we've made a significant investment in our customer success organization and our support for customers overall and their renewals and their growth and countless others, but those are the first ones that come to mind.
One thing that always struck me about Four Winds was that you had a lot of people and you opened a hell of a lot of new accounts, very strong in terms of email marketing and customer acquisition. But then, what comes with opening a lot of accounts is you've got to manage all of those people, and manage all of those accounts, and very small accounts can be needier than whale accounts. Has that changed or have you streamlined and focused more on corporate and enterprise?
David Levin: Yeah, enterprise across multiple use cases, but definitely enterprise, after adding to the software platform for 14 years and having the luxury of being able to work on some of the more advanced use cases out there, the product was positioned for enterprise and as a larger organization, you need big customers generally to keep growing. So yeah, that's where we're focused.
So if you have a small account, let's say a, a tribal casino in Missouri that needs 10 screens, would you push them off to a reseller or would you say it's not really what we do anymore?
David Levin: So, the interesting thing in the casino market is that even smaller casinos are great digital signage customers because they've got far more than 10 screens. We do have some phenomenal partners, ConnectedSign is one of those and we'll work with partners to make sure that they're taken care of. The most important thing is that they're on our platform. so generally, yes.
Historically you've put a lot of emphasis on vertical markets, and from my perspective at least, you’ve been very smart in terms of not putting all of your eggs in the generalized “trade show” basket, by going to vertical market-specific trade shows that nobody else, who you would consider a competitor was at, like Airport trade shows and Hotel trade shows, and the Hospital trade shows, and so on.
Have you thinned out the number of verticals that you're after? Cause it seemed to me, when I was looking last week on your website, it seemed to be about corporate and guest experience.
David Levin: We've definitely put more focus there, with an overriding theme of enterprise visual communications. Some of our larger customers are retailers and have customer-facing applications. probably go to market perspective, yes, with the caveat that if you've got a lot of screens, you need enterprise-grade visual communication software, where you've got more advanced use cases, we target those.
You said visual communication software. Is digital signage, the term you even use with your customers, are they asking for digital signage or are they asking for visual communications or something else?
David Levin: They ask for both.
I think cust customers that have been working with us for a long time,tend to use visual communications. And I think the industry is still digital signage and both are great.
Don't really care, just by, please! (Laughter)
David Levin: Yeah.
I'm curious about workplace and enterprise-level workplace, and what's now happening and what's going to happen longed term with, big damn offices that maybe won't be as big as they used to, or at least not as heavily populated as they used to. Is that for some of your clients, as well as yourself to rethink and pivot around the new way that workplaces are gonna operate?
David Levin: Yeah. I think all organizations are going through this question of “what does life looked like post-COVID in the workplace?” It has fundamentally changed and customers are at different levels of bringing people back to work. And, technology is a key part of enabling that and I think there's just this fundamental shift where most organizations have proven you can be very effective at home, so then what's the role of the office? And how many people are coming into the office on any given day, what's a safe number of people to come into the office while we're still in COVID and then how do you use technology to manage that?
Does it matter to the typical client whether there are 500 people in the office now, or trimmed down to 200 because you still have 200 people who you need to communicate with?
David Levin: Yeah, I think it makes a difference because you've got to communicate, across multiple platforms. So first of all, in workplaces, generally breaking down into three categories, employee communications, which we talk about a lot in the industry, digital workplace, which tends to be more meeting or a management desk management, visitor management, interactive directories, wayfinding, emergency messaging, and then, performance-related, you know KPI boards, manufacturing floors, call centers, Salesforce, etc.
So in the employee communications realm, you've gotta be multichannel. So for people that aren't in the office, obviously digital signs are very important, but if you're at home, you've got to get communication with people on their personal device. So we've got viewer channels that enable people to do that and other tools to make sure that the communication objectives are met.
So the viewer channels are effectively desktop screensaver kinds of things, and alerts that'll pop on a screen?
David Levin: Yeah, digital signage content that you can view on your personal device primarily using the browser.
Now, how do you get workers to use that? Because I'm thinking if I worked at a company, and maybe I'm just a cranky old guy, but I don't think I would want that if I could avoid it.
I don't know that I would use it if there was a way not to use it.
David Levin: It's funny. A lot of us, when we were working at home, had digital signs running in the background, but you don't have to have a dedicated device for that.
So for example, if you've got your laptop connected to multiple screens, then you can take one screen and make that your sign, or resize a window in the corner. And it's a way to get content throughout the day. And some of our customers who are using the product for sales KPIs, they're used to looking at those boards when they're on the office floor. You know, you want to be able to see how you're performing throughout the day, meet with your peers, and you're just running it in a different format.
One of the things I've talked a lot about is the whole idea of KPIs on manufacturing floors and elsewhere. And I've wondered how many end-user companies are actually using it yet, and while I've seen no end of chatter about workplace comms and showing KPIs for showing Salesforce, opportunity pipeline, reports, and everything on a screen. They make sense in a white-collar environment, but are you seeing many companies adopting KPI dashboards for production blue-collar areas?
David Levin: We are at the evolution of visual management as part of lean manufacturing and the more screens people end up getting in a venue, then this question of “okay, how do you control the devices and Is there a better way to present the information?” The number of screens that are out there in manufacturing floors on rolling carts may be running an app, a dashboard that wasn't designed to be a digital sign, it's intended for desktop use, but you're running it on a public screen, and you're trying to view it from a long way away. that still exists quite a bit out there.
So as customers evolve their needs, they find themselves looking for digital signage or edge of visual communications products and have really good visual applications and good device management and everything else that comes along with the solution.
So tell me about the Smart Space acquisition. Was that an acquisition led by Four Winds or by Vista and it's a paper announcement that this was an acquisition by Four Winds? Or is you guys?
David Levin: No, it was led by Four Winds, but it's a close partnership. We work with the Vista team on the business. So when we started 18 months ago, we mapped out the market, you know, things like where are our largest segments, where the biggest population of our customer base, what are our natural product extensions, where can we bring the most value back to customers and, what does the universe look like?
And that helped create our Corp Dev strategy. And with Smart Space, we were talking to them for a while and I really wanted our first acquisition to be able to bring something more back to our base. Now our base really breaks down pretty evenly between 50% of our customers are using the product for customer-facing applications, and 50% of our customers are using the product for internal and employee communication
You know, it's hard to do one acquisition to cover everybody from the start, so we're looking across the board. You know, workplace is important to us, and then in the workplace, again, those three kinds of segments between employee comms, performance management, and digital workplace.
And then in the digital workplace, If you find yourself with a meeting room signage product, which we have, and customers have been adopting, you're really quickly into meeting room management and desk management. And if you're in meeting room management and desk management, then you really need analysts about the usage of those spaces, you need sensory integration, you need a mobile app for the employee experience, and so that’s why we just felt like it was a good product extension to buy.
So it was one of those cases of, “Our customers looking for this, we know that we're going to have it. We can either build it or the faster track is to buy it and get a pretty significant number of customers with it?”
David Levin: Yeah, exactly. And you know, if you're involved in real estate or digital workplace for a large enterprise, then usually you're involved with both digital signage and desk and reading room management. So it's a great fit.
And with the Smart Space deal, will they be rebranded as Four Winds or will it continue to be its own entity?
David Levin: So Smart Space is becoming part of Four Winds. We're still figuring out the naming of the product. We really like what they've done with the product, but right now, Smart Space is an FWI company and will become part of our overall platform.
You had European people before, EMEA people before, but this gives you an office, right?
David Levin: It gives us an office and 40 great people, most of who are based in the UK and a really nice center for our operation in Europe.
Does it play out the way I've heard from other companies in terms of you start with very simple applications with a corporate enterprise, like a meeting room sign and it just cascades out from there because if they're happy that the client asks for more capability, directories analytics, KPI dashboards, and so on?
David Levin: For sure. In general, the more applications a customer can run on a single platform, the better. And that's where a lot of our growth has come from over the years, as a customer will start in an area that is the most important need at that particular time and then they'll expand and expansion is pretty easy because it's an endpoint on the platform and it's an application that's built on the platform and content that gets managed by the platform and feeds that application, so it's pretty easy to expand and we love the fact that there's so much you can do on the product.
We’d love all these different use cases to get rolled out. And even at a workplace customer, it's interesting, even in a workplace customer, there are these different parts of a workplace which ends up being customers facing, like your lobby experience, your executive briefing centers, your trade show. So, it even finds its way over there, even if it started internally.
I know this answer, but I'm curious anyway, you've gone into a few verticals as a company and kind of backed off of them because it was just too hard. Is part of the drive around just being corporate and guest experience by and large a way of kind of simplifying things and realizing, “Hey, verticals like retail are really difficult and verticals like hotels”, what you were doing on your own to some degree, let's say five, six, seven years ago.
There's a whole bunch of companies who now say, we do hotels and we're after that market.
David Levin: Yeah. we haven't limited to workplace and guest experience, and again, some of our larger customers are customer-facing applications in retail environments, and they're extraordinarily successful.
I think where you get into nuances is if you're going to sub-sectors of retail, let's say like a QSR, if you consider that retail and then you're looking at again, the solution overall, and then you're adding self-service kiosks and other parts of the application. If the customer wants all of that and you don't have that, or don't have the experience on that, then you're not going to be as competitive there. And so, it just depends on how much of the solution is more pure visual communications or digital signage in retail, and how much is broadening into other areas of retail, and I think sub-sectors of retail, QSR, grocery, or specialty retail, sometimes it broadens a bit.
Right. You're having real-world experience, well like everybody, with the pandemic in terms of having a pretty significant office. I think the last time I got a count, you guys were up around 350 people, and most of those going into an office in Denver, where are you at now in terms of the number of people coming into the office?
David Levin: Yeah. We've got about 350 people in Denver. There are about 20 people in the office. Well, we have two offices in Denver, so maybe 40 people on any given day in the office and it's purely voluntary. We've got plenty of space, so people that are coming in are well socially distant.
And, we were shut down completely for several months and you know, your work from home experience differs based on what you have going on at home. And so we wanted for people that wanted to get out of the house for whatever reason, to have the ability to come back to the office in a safe way, so we opened it up, but it's a small percentage. I think we all have about 3000 square feet year at the office.
And coming out of this, do you anticipate that, based on the experience of so many people doing their work from home, when you have the opportunity with your lease, that you'll trim back and this homework will be permanent for some of your staff?
David Levin: I don't know if we'll trim back, but I don't see us acquiring a lot more space because we're going to implement our own desk and room booking system and make everything bookable across the office, so people will use the office, as they need, for activity-based working. They'll book what they need when they need it, and I think there'll be this hybrid model of people working from home and working from the office. And, we'll enable that through the software, and put more investment in collaboration.
We're seeing our customers do this too. They're just putting more into teams’ rooms and Zoom’s rooms, so when part of your team's in the office and part of the teams out of the office, it's still really easy to get the resources you need to have effective collaboration.
Are you challenged at all by the Zoom(s) of the world and the big consulting companies like Deloitte(s) and Accenture(s) and ones like that who seem to be getting into this space?
You have Zoom that has a very elemental digital signage system, but you know, so much of what's being done these days is done over Zoom, that they could start to offer the capabilities that you guys are presenting.
David Levin: Yeah, so Zoom is very simple, and as you described, it's good and bad. And, to me, the good part about it is that if people start digital signage and do visual communications and they put screens out, and even if they start on zoom, at least they're getting screens out and chances are the more screens that are out the more their sophistication evolves for applications and management, etc. and they will come back to the market most likely and look for an enterprise provider. The bad is, of course, it is free and they get a little bit of the market, but, I think there's probably more good than bad. And with the large consulting companies, I think they're more partners than competitors and we've done some really great projects with most of them. And it's generally part of a big digital transformation scope. And there are some digital signage applications that are part of that scope, and then they're often using a product like ours to execute on that part of the scope.
Okay. So, they're happy to sell you guys into it as long as they're getting their consulting hours out of it?
David Levin: Definitely. Nobody wants to build all these applications from scratch, you want to use a platform.
Oh, I don't know about that. (Laughter)
I get those phone calls and emails almost daily from people saying, “Hey, I'm doing a digital signage startup. Can we get on the phone and talk?” And I'll get on the phone with them and they’ll talk with me, “You would be software platform #487, doing what you just described to me. Please stop now.” It makes them sad, but too bad, I’m saving them a lot of money in the long run.
You are more a technical CEO than a number of CEOs who I speak with, who come more on the sales side or marketing side, where do you see things going in terms of the way all of this stuff is done?
We've had some shifts through the years. There's a hell of a lot more adaptation of systems on chip displays, then maybe, some early observers sought there might be, are we getting to a point where devices are nothing more than little edge devices and visual communications, as you call it, is very much a software-driven initiative, and we don't get fixated on the hardware?
David Levin: Yeah, I think so. From a software perspective, Cloud and IoT have been huge. If you look at a lot of what went into our R&D investment in the last four or five years, it was transforming our own software platforms to take advantage of native clouds and all the technologies around IoT that enable you to manage these remote devices. That just didn't exist when we started 15 years ago and it probably didn't exist five or seven years ago, but we get to take advantage of what the big cloud providers offer and how remote devices are managed in general, for consumers and businesses.
Related to edge devices, it's getting a heck of a lot better. To be able to use edge devices effectively and still have pretty sophisticated applications that run on those, when we went live with cloud, we supported BrightSign, Samsung, and LG, we support those three in addition to our Windows platform. And it's a matter of picking the right device or the right use case.
Are enterprise customers, the IT teams, less antsy than they used to be about cloud and unfamiliar devices that aren't HP boxes or Dell boxes that they buy by the hundreds or thousands?
David Levin: Yeah, they're embracing with really high-security standards. That was another big part of the investment because it's hard to sell cloud if the security is not there and end-user customers have a really sophisticated way to assess security. So yes, cloud with the security and as far as devices go, there is a movement, of course, to move away from Windows devices and the management that comes along with Windows devices but it also depends on the organization overall. There are some people where they are still heavy Window shops and it's easier for them. And then, there are a lot where if it's more of a, if there's less going on at the endpoint device, it's easier for them to manage overall.
Do you get a sense from end-users, when they're canvassing the potential vendors/service providers who can help them with their visual communications, that most of the people they have coming in really have their act together in terms of security, or is it a breath of fresh air for guys like you to come in and have sales engineers who can talk about serious security?
David Levin: Yeah, it's a breath of fresh air, but also for us, we got the security department now, led by Maurice, he’s our Chief Security Officer. So the sales team often at a certain part of the sales cycle, or if customers are upgrading their security standards, which happens quite often, then we'll bring in the team members from our security group and they'll take over from there, cause it really is a specialized discipline.
How long have you had that role in place?
David Levin: Gosh, I think I want to say Maurice joined us four years ago to head up the org, and now there are probably five people in the org, and they work closely with our cloud operations and our legal and compliance team and sales engineering. And, it's been a big part of maturing the organization.
Yeah, I would imagine that there are end-user customers who are somewhat comforted by the fact that you have full-time people just in that case and not saying, “Oh yeah, we pay attention to security.”
David Levin: Well, they have made it a requirement. When you see some of the security addendums that are attached to contracts, if you don't have a team handling those, there’s just basically no way to comply.
So, looking ahead, I know this is a weird year. and it's hard to forecast anything, but work goes on, so what will we see out of Four Winds in the next 6 to 12 months?
David Levin: Yeah. I think in general, what I'm most excited about is that this world is getting more digital and I think, COVID is pushing that even faster because everybody has had to rethink everything they do.
If it's customer-facing, what's the new customer engagement model? In venues, how do we interact with customers in these venues in a safe way? And how does technology enable that? And digital signage fits in. And if you're in the workplace, it's the same thing related to that to return to work.
I think that's good for our industry overall. I think we play a key role in that. And, for us, we've got a great roadmap where we've got a couple of big releases coming out before the end of the year on Cloud, we’re excited about the integration with Smart Space. Look for more integrations with that on our platform and also us to take key elements of that, like their mobile and wayfinding and some of the other sensory integration, some of the other attributes, and do other use cases for key markets and, just keep, building the company. We're still got a lot of energy.
That's good. All right, David. Great to catch up with you.
David Levin: Thanks, Dave. Appreciate you having me on. Thanks for all you're doing.