Social media blurb:
The CEO of TriNet talks about the importance of sticking to a vision, providing unique solutions, and prioritizing diversity.
This is Part 1 of a two-part article featuring a conversation with Burton M. Goldfield, CEO of TriNet (NYSE: TNET).
Here at Founders First, we conduct regular fireside chats with business leaders to provide small business owners with access to experts that they otherwise would not have. We’re always learning, and the more we can learn from experienced leaders who have “been there, done that,” the better off we’ll be. The insights we get for starting and growing businesses is invaluable.
Recently, I had the pleasure of speaking with Burton M. Goldfield, the President, CEO, and a board member of TriNet, a publicly traded company on the New York Stock Exchange with a market cap of $6 billion. TriNet offers HR solutions for over 17,000 small and medium businesses throughout the U.S. Burton has transformed TriNet into the leading cloud-based HR provider and professional employer organization. TriNet’s net revenue has more than quadrupled under his tenure and the company has gone from 300 to 3000 employees.
Mr. Goldfield is also chairman of the board of FinancialForce, a member of the board of trustees for the National Parks Conservation Association, a former board member of DHI Group, the former CEO of Ketera Technologies, and a former SVP of worldwide field operations at Hyperion Solutions Corporation.
Our discussion focused on developing winning strategies for building and growing innovative organizations, the journey taking TriNet public, focusing on the ideal customer, building strategic relationships, and the importance of prioritizing diversity and inclusion as part of a successful business strategy.
Developing a vision for success
TriNet provides HR services, benefits, and payroll for small and medium businesses across the U.S. “My vision was to take on a large addressable market and be able to build products and services that were highly verticalized in a market that had been very horizontal,” said Burton.
TriNet works with businesses that have up to 500 employees, so the addressable market is estimated to be over 20 million. Burton wanted to look for niches in the market where TriNet could add unique value and do something a little different than everybody else.
“There’s a lot of great payroll solutions,” he said. “There’s a lot of great benefits out there. But delivering the total value was a challenge that I looked at.”
The key has been using scale to service customers. With TriNet, a small company could leverage large-scale benefits, medical, and workers comp.
“It was all about every line of code that we were writing,” Burton said. “I wanted to use technology in service of the small businesses, and that was a different approach than many of the companies at that time. By leveraging the technology, we could actually give more personalized service. By leveraging the technology, we could deliver even more value at a cost that the customers could afford.”
Secondly, he had to find great people to help on this mission. “Technology is great, but having a team that is looking at these problems and has the same passion around the customers as you do is equally important,” he said, “particularly as you grow, because you have less and less influence as the company gets bigger.”
The other thing he said is that his vision has always been focused on delivering value to the client, “not what role I would have, not the title I would achieve. I never in my life said, I want to be a CEO. Never. I never in my life said I want to be a VP by the time I’m a certain age. And I do think people get hung up with that.”
Defining your market
There’s fierce competition in Burton’s business, and with that comes commoditization. There’s a lot of players in the same space that can offer the same base solution. So the key thing for Burton was finding a specific niche that was defensible against larger competitors.
“I’ve always believed that when there’s commoditization, you don’t chase the commoditization down to lower pricing and basic capabilities,” he said. “You add more value and you get paid for that incremental value. That was a lesson I learned at Hyperion. That was a lesson I learned at Rational. There were all types of other solutions for software development. But we had… products that really differentiated themselves in the marketplace, and the gold standard, if you will, and companies were willing to pay more for that.”
So, Burton’s propensity was to go for specialization around a set of verticals or markets and let the rest of it go. “If there is a $0.99 check payroll offering, and people believe that they can run their company with it, I think it’s great,” he said. “I think it’s wonderful. Do I want to offer a $0.99 payroll offering? No, I don’t.”
So, you have to define your market. And, as a leader, you have to be very steady with the vision and mission of the company. Play the long game. Don’t change it, unless there’s a cataclysmic change in the market, or the assumptions that you made to build the company change.
Succeeding with partnerships
Partnerships can be critical to any business. Burton said he looks at them in a few different ways.
One is partnering with your customers, getting to know them and what they need. And having a clear product vision. “I believe product-driven companies are very successful,” he said. “Why? Because to me, the product is the complete, delivered value to that customer.”
Two is partnering with other companies. So, it’s combining your solutions, whether it’s through APIs, bundling from a pricing standpoint, joint marketing, joint selling so that you get a bigger reach, and so on and so forth.
“What I find with a lot of small companies is that they highly underestimate the cost of going to market,” Burton said. “They highly underestimate how both timely and expensive it is to take your product and get it into the market. So, the partnerships where you can team up with other companies that are noncompetitive to get into a particular segment is really, really important. And it helps to reduce the go-to-market costs.”
The third way of partnering is being part of associations and groups that give you additional credibility. This is important for TriNet because they’re not as much making an economic sale as they are a trust sale. With HR services, companies want to know how their team will be treated, what kind of benefits their employees will have, and who they call if they have a problem. When you’re part of associations and attending events where customers get to know you, it becomes much easier to start to discuss the overall features and benefits.
Next up: Burton talks about mentorship, leveraging innovation to differentiate your offering, when and how to take funding, and integrating diversity and inclusion for business success. Read Part 2.
Kim Folsom is the founder and CEO of Founders First Capital Partners, which has helped accelerate the success of hundreds of small, service-based, business-to-business companies since 2015. Visit our website to learn more.