Mark Johnson still carries his old Blockbuster Video card. The co-founder and managing partner of Ada-based Michigan Software Labs uses it as an illustration for how disruption in the technology sphere can either make or break companies.
Johnson said he was always interested in technology. When he was in fifth grade, he ran his own company, building clocks out of plywood and selling them door to door.
“They were handmade in the shape of Michigan or whatever,” Johnson said. “I was always kind of entrepreneurial.”
As a teenager, he and his friends wrote articles for a website he built from HTML and CSS about topics relevant to them, like snowboarding or wakeboarding. The site later got the attention of a digital media company, which later rebranded as About.com and is now known as Dotdash.
“We would do tricks, and we’d take pictures of them,” Johnson said. “(Dotdash) didn’t know we were kids, and they wanted to buy the content we were writing. … It was well written, and we put a lot of time into the photography and the lighting of it.”
Reflecting on his entrepreneurial spirit, he went on to study business at Hope College. He originally went to Hope for dentistry but quickly realized it wasn’t a career he wanted.
“I went to Hope (College) to be a dentist, and my friends that I lived with at Hope were like, ‘Why do you want to be a dentist?’” Johnson said. “’Because I want to golf three days a week.’ That’s a really dumb reason to be in a profession your whole life.”
After college, Johnson found a friend and business partner in Joshua Hulst. Together with his business skills and Hulst’s technical background, the two started Michigan Software Labs in 2010.
“(Hulst) was a professional programmer at GE and had graduated from (Grand Valley State University) with a computer science (degree), then went to Michigan State and got his masters in computer science,” Johnson said. “I was more of the business side, and he was more of the computer science side.”
Johnson did however develop the company’s first app before Michigan Labs was even founded. In 2009, he developed a radio station app on request from his wife who wanted to listen to 91.3 WCSG while she was out running.
“My wife was a runner, and she wanted to listen to this station,” Johnson said, “so she was like, ‘Uh, honey, I want you to build me an app.’ Of course I don’t know how to build apps, but I learned how to do it as part of my ‘honey do’ list and donated it to the station in the fall.”
Johnson then ran into Hulst, who, with his computer background, was able to rewrite the code for the app in a single day. Very quickly, the two started getting interest from businesses wanting their own special apps.
Within the first year of business, Johnson and Hulst were being contacted by medium-sized businesses and Fortune 500 companies, mainly automotive, who wanted them to build localization apps for Apple products.
At the time, the only employees on staff were Johnson, Hulst and one other developer.
Before Michigan Software Labs moved to its current building in Ada, it grew organically by focusing on its core industries: automotive, manufacturing and logistics. Through discussing and developing solutions for his clients, Johnson noticed a growing trend of companies resisting disruption through innovation.
Johnson points to the failure of Blockbuster Video as a proverb for why companies can’t afford to resist innovation.
“I want to get my Blockbuster card out when I bring them up, but they really thought they were invincible,” Johnson said. “Netflix said, ‘Hey you should buy us for $50 million.’ It wasn’t even that much, but Blockbuster said, ‘No, go take a hike.’”
Blockbuster could have done everything Netflix does now, Johnson said. But the company failed to recognize online streaming as a disruption factor and instead went bankrupt in 2010.
Using the failed video rental company as a parable, Johnson’s work philosophy is about making companies “undisruptable” by challenging them to disrupt their practices early on and adopt technology innovations before its too late.
“There are a lot of things you can do in mobility, with a smartphone, that can really improve your business,” he said. “It can make you more money or improve productivity, things like that.”
On the business side of the operation, Johnson said he understands the importance of making the financial case for adopting innovations. When talking to clients, the case he and his company have to make is how the client is going to get a return on investment.
Becoming “undisruptable” is about three things, Johnson said: people, product and process, and a lot of technology can be applied to one of those three areas.
“On a people side, it’s getting your employees to be more efficient, to collect ideas in order to take steps they are doing manually and make them more automatic,” Johnson said.
The product side is presenting one’s self to clients in a better way, which involves listening to the customer’s demands. Johnson drew on Pizza Hut as an example.
“Pizza Hut, one of their core values is easy parking,” he said. “It doesn’t have anything to do with pizza, but they want to make it easy, and offering technology for your customers to make it easier to do business with you is really important.”
On the process side, Johnson advised stripping away redundancy in processes if the same end can be achieved with fewer steps.
There’s not much Johnson can say specifically about Michigan Software Labs’ work, however, to preserve trade secrets, but the main differentiator between his company and others, he said, is his firm doesn’t outsource its work.
“It’s all done in Ada, which is why we wanted to expand and add on to the second floor,” Johnson said.
The Business Journal previously reported Michigan Software Labs moved from Grand Rapids to the burgeoning Ada Village, leasing the third floor of 452 Ada Drive SE in December 2017. The company quickly grew to occupy the second floor in October 2018.
Johnson said the move was valuable for the company’s work culture. Employees can bike to work, and once the river is open, they can even come in by kayak.
“I’ve kayaked. My first job, I kayaked to work every day,” Johnson said. “It was across Lake Macatawa, and it was awesome.”
For the future, the firm’s big focus is internet of things, Johnson said. Some new projects involve connected devices like “smart offices.”
“We’re working on a project right now where you can walk up to an office building, it unlocks the doors, it sets the lights to your setting, you can pick your tabletop setting, it knows all that just by you walking up to your door with your device,” Johnson said.
Even with his broad-brush approach to innovation, Johnson said he was grateful for Hulst’s technical abilities that helped propel the company to where it is.
“Obviously, if I hadn’t met Josh, we wouldn’t be here,” Johnson said. “Because we were kind of that match … that’s been all the difference. … We’ve been a good partnership there.”