Can resource-strapped small and medium-sized businesses take full advantage of data analytics, or is its power reserved only for large, commercial enterprises? Eric Huang, the founder of the Toronto-based Advanced Analytics and Research Lab (AAARL), made it his mission to level the playing field by making analytics accessible and affordable to SMEs, nonprofits, public sector organizations, and enterprises.
His passion for bringing analytics to the often-overlooked SME and public social sector stems from a lifetime of volunteerism with nonprofit organizations and a value system that emphasizes bringing good to those in need. The desire to help organizations leverage data analytics in a meaningful way led to the creation of his services, solutions, and education company. Despite the challenges and demands of a busy entrepreneur, Huang, a 2021 Volunteer Toronto Legacy Award Winner, continues to volunteer once a week.
IT Chronicles sat down with the CEO to learn more about his motivation for starting AAARL, his entrepreneurial experiences during the company’s first years, thoughts on data analytics for SMEs, and what he sees as exciting trends in data analytics for the future.
In part I of this two-part series, Eric shares his experiences taking the company from a one-person dream to a 13-person analytics technology company working with organizations of all shapes and sizes, from nonprofits to large companies.
Q: Can you share a little bit about your background and how it led you to the idea for AAARL?
Eric Huang: Actually, I created the company while I was still in my master’s program. For my undergraduate, I did business and economics, focusing on econometrics. I also hold a Master of Science in Analytics. But, ironically, when I was younger, I was more of a creative person and never thought of pursuing math as a career, even though I was good at it. But analytics was the direction I fell into when I ended up working at PWC’s analytics consulting by accident.
Coming out of school, I debated what to do, like all students. I hoped to find a boutique analytics firm specializing in small-medium enterprises and nonprofits. During the school year, I worked with a manufacturing think tank where I interviewed CEOs in the sector. When I questioned them about their analytics, most said they didn’t really do too much. Those responses didn’t add up. From my experiences and education, I understood that analytics and data were the future. There is clearly a demand, but just not enough people to help small-medium enterprises and nonprofits leverage analytics. So, I decided to start the firm and did the cliche thing. I was living with my parents for the summer, and I told them, “Hey, let me try this for a couple of months, and if it doesn’t work out, I’ll get a ‘real job.'” And that was six years ago.
I started AAARL in 2017 as a consulting education company. Then, my team and I eventually switched to more of a services-based company running many processes and jobs for our clients. In the past two years, we’ve been changing over into more of a technology company, which was always the progression I thought the company would take.
Q: How did you find the experience in those early days of building the company?
Eric Huang: It was tough. When I think back to those days, the word that comes to mind is ‘emotional resiliency’ because there was a lot of rejection and a lot of no.
The funny thing is I knew exactly what I needed to do. Founding a consulting company itself was not hard. You build a website and tell people what you’re doing. Starting a company is easy, but sustaining it is hard. Making it successful is almost impossible. I knew the stats⏤90% of companies in the first year fail. And I think the mantra I had in those first two years was “trust the process.” You learn to do things in school and read books. And you say to yourself, “Okay, I’ve got to do A, B, C. I’ve got to build my sales funnel.” Then, you do that, but the sales don’t come. Then, you build a website and make it better, but still, the sales don’t come. And you have to keep telling yourself that something will happen eventually. You have to trust the process.
But then I got my first client, a small project. For $1,000, I created a 20-page report. But it was one of the happiest moments of my life when I landed that first customer.
Q: How do you keep and maintain clients? Are there any tricks of the trade, any secrets?
Eric Huang: Unfortunately, I don’t think there are secrets. We don’t do anything groundbreaking to get our clients. It’s being disciplined in building out your sales funnels, getting leads, and going through the process. I think it’s essential to be diligent in product marketing and targeting your audiences. But it hasn’t gotten easier. If anything, it’s harder because I was talking to small clients in the beginning, and it was just me. The economics of the business model was easy, but now I have a team. I’m not just selling my skills; I’m selling the company. Also, the projects we’re doing our 100 times bigger than in our early days. So it’s a lot more complex, and it definitely doesn’t get easier. But I am more used to how it works and the rejection, so it’s easier on my soul than before.
Q: How are the challenges you faced as an entrepreneur back then different than what they are today?
Eric Huang: Today, the company is more complex structurally. I have to think a lot more about the team versus just myself. I spend much of my day thinking about my team members, making sure they are doing what they’re doing and that they’re happy doing what they’re doing.
The first two years it was mostly about survival. But today, it’s different. There are more options, you’re not as tired, and you may have a little more capital. It’s more about scaling than in the initial stages. It’s not about finding where you are in the market but picking niches to grow into. It is also more about the challenges of putting a structure in place for an entire team so everybody follows the vision and can work productively.
Q: Is there one particular failure challenge you’ve overcome in business, and what lesson did it teach you?
Eric Huang: I think the biggest lesson was financial planning. In addition to analytics, I had a solid financial background. I’ve worked for a few financial planning and brokerage firms and knew how to do accounting and finances. But when you’re starting out, finance is really different. It’s about preservation and understanding your risk-reward.
So I think one of the significant failures was overcommitting too much capital when I started. I had a little money saved up, and I thought I’d have maybe a year to burn through it. But I went through it in six months. So the lesson was to be cautious and not to waste money. There are always reasons to spend money somewhere. You think,” Oh, I’ve got to build a new website. I want to spend more money on marketing. I want to get this tool to automate things.” There are always reasons to spend money. But you need to think about what your runway is. And I think that’s a lesson many entrepreneurs learned the hard way too.
Q: Was there a piece of advice that helped you as an entrepreneur?
Eric Huang: I think the biggest piece of advice is don’t listen to all the advice. Everyone gives you advice– your friends, your family, professional colleagues. While you have to listen to it, you also have to decide whether it makes sense for you. You know your business best and whether something fits you and your team. You just can’t take all the advice that is given to you.
I think another bit of advice I got was the suggestion to put together an advisory board. One thing I missed being an entrepreneur was having a boss. I know that sounds contradictory. But when working in a corporate environment, you always have someone to tell you what to do and who will advise and mentor you. But when you’re an entrepreneur, you don’t have it. And even though you can read books and get advice, you own all your decisions at the end of the day. There’s no one else to blame. I think, for me, putting together a board was beneficial. I use them to bounce ideas off and get general feedback.
We want to thank Eric Huang for sharing his thoughts and experiences as a founder of a data analytics company. In part II of our interview, he will share his insights on what data analytics is and is not, how everyone can benefit from it, and what SMEs should consider when embarking on data analytics for their businesses.
Eric will be sharing even more insights on digital transformation during a panel discussion with small and medium-sized enterprises during the CanadianSME Small Business Expo 2022 in association with Caary Capital on Wednesday, June 29th, at 3:00 pm. He will discuss how SMEs can more quickly adapt to the changing social and economic ecosystem today and in the future. Now in its third year, the expo has been attended by thousands of business owners and entrepreneurs throughout Canada. For more information about the free event, visit the event website www.smeexpo.ca.