Danny Gorog, co-founder of leading app ﬁrm Outwear, says the key to their success is the talent and enthusiasm of Generation Y, writes Leon Gettler.
As the co-founder of Outwear, one of Australia’s biggest and certainly most successful app companies, Danny Gorog knows all about how to manage Gen Ys. Just about all 65 people on his staff are 20-somethings.
“I feel old,’’ says Gorog, 38. “But then, it’s all relative.” Gorog believes, certainly, the Gen Ys need a special approach at Outwear. They need constant feedback and conversation and thrive on teamwork, much more than the baby boomers or Xers.
“There is a lot about ensuring they know where they stand in the company,’’ Gorog says. “They know where the company is going. We have a team meeting every week where we talk about things that are happening. We go around and all the team leaders talk about what they are doing in the business.”
On top of that, the company has OKRs every quarter. OKRs, or objectives and key results, are from a system Outwear borrowed from Google and Intel. Here’s how it works: set up an objective and then set up a number of “key results” that are quantifiable that will help you hit your objective. The objectives should be definitive and measurable (as 20 per cent more output).
“Every three months we sit down with every person in the company and we say what are your objectives for the next three months, what was good, what was bad and what can we improve. In fact, we’re probably going to change it to every month.
“We also do performance appraisals on an annual basis.” He says constant feedback and letting people know what they can get out of it is particularly important to Gen Ys. If that’s not done, they will find work somewhere else.
“It’s very important for Gen Ys to have a lot of that. It’s about, ‘What’s in it for me?’. These guys are highly skilled and there are huge opportunities for them in the market so it’s very important for us to keep challenging them.”
In addition to that, the company has sessions every week where a team gets up and talks about an app they have developed or about a particular technology. There’s a barbecue every month and every now and then there are special sessions, like learning origami, mixed in with Pilates and yoga. Walk through Outwear’s office in Richmond, in inner-city Melbourne, at lunch time and there are so many food smells in the air. Full of different cultures, it’s like a market.
“It’s not just paying people the right amount, it’s about providing them with a place they’re happy to come to every day because sometimes the work is tough,’’ Gorog says. “We work to tough deadlines and we have reasonably demanding clients and we expect a very high level.”
Gorog set up Outwear in September 2009. The story of how he did it sums up one of his key features as an entrepreneur: he has a keen eye for the big opportunity. When he was studying his bachelor of science (computing and communications) at the University of Melbourne in the 1990s, he was running a small business building web sites.
In 2002, he launched Simply Sold, an eBay “drop shop” or consignment store, in Melbourne to take the sweat and worry out of selling something on eBay, which had then emerged as the world’s largest auction house. That business didn’t work so he went to work in a company called Emperor’s Mind, selling Mac solutions to big corporates.
When that closed down in the wake of the financial crisis, Gorog hit on his next idea: Apple had just brought out the iPhone and app store. Gorog sensed it could be the beginning of something big. He talked about setting up an app building business with his business partner Eytan Lenko and they brought in another developer, Gideon Kowadlo. The three got to work and soon landed their first job, building a Super Racing app for the Herald Sun newspaper.
“We didn’t have a designer and we outsourced the design to someone in Canada. Somehow we managed to pull it together. We were close to the first. I think there were other people making apps but we were very serious about it. We were very serious about the process and how to scale it up so that we could have a big team of people making apps.”
And scale was a critical part of his management plan. Starting out five years ago with just three people, Outwear today employs 65 and is looking at a turnover of $8.5 million this year.
“There are a lot of people who started app development around the same time as us and they are still five, 10 or 15 people in studios. What’s different about what we do is we manage to scale it,” he says.
Outwear’s apps are all high-profile and popular. They include apps for the NRL, AFL, Racing Network, Cricket Australia, White Pages, SEEK, Foxtel, Melbourne Symphony Orchestra and Melbourne Recital Centre, Australian Wine Companion and Margaret Fulton’s Favourites.
The beauty with apps is that they need regular updating, providing a constant revenue stream. Outwear is now moving into financial services. It has an app for VISA SmartPass and Gorog says there’s more to come.
“We are working on some banking products that will be revolutionary in the market,’’ he says. An example of Gorog’s eye for opportunity is the app Snap Send Solve, which allows people to report potholes and other items that need cleaning up to their councils.
Potentially, it will open up a new market in local governments around the country. Gorog says the high-profile apps attract staff, something that’s critical in the IT industry where there is an acute skills shortage. “We are pretty good at recruiting developers,’’ he says. “We have done a lot of that, we have hired more mobile developers than anyone in Australia, we have the biggest team in Australia of mobile developers.
“We look for smart developers, not necessarily smart mobile developers. We have got the capacity to train them up and get them good at mobile. When they come on board, they get a choice: iOS or Android. They are then trained up.
“We would rather take someone who has a good theoretical understanding of software development rather than someone who knows how to tinker with iOS and knows how to build an app,’’ he says. “We would much rather have software developers and scientists. There are a lot of hackers out there who know how to build apps and they probably build great apps but they’re not necessarily the people we want. We are quite technical in our approach.
“We give them great experience and great exposure and the projects we work on are the best in Australia. It’s very likely that if you work at Outwear, you will work on an app that your friends will use. The beauty of it is you can sit next to someone on the train and they are using a piece of software you developed.
“That’s pretty wonderful for a developer because most developers are in the back office.” In three years, he believes the business will be turning over $20 million with offices around Australia and possibly Asia. Watch this space.
This article appeared in the May 2014 edition of Management Today, AIM’s national monthly magazine.