PROFILE: JERRY KLINE

Running a business is like running a marathon

John Murphy profiles the founder and CEO of the library IT provider, Innovative Interfaces

Research Information: May/ June 2004

The secret of running a marathon, according to Jerry Kline, is to pace yourself so that you can still be going many miles down the line, or else you burn yourself out.

He has taken the same approach in business. He is the founder and CEO of Innovative Interfaces, which has stayed in the race to supply business systems to libraries around the world for more than 25 years. While many rival companies have come and gone, Innovative has grown steadily and profitably to a company of 280 employees in the shadow of University of California, Berkeley, where Kline learned about how libraries work. Part of his success has been down to not having Wall Street investors breathing down his neck, and being able to re-invest profits in future development. Another reason he is still going is that he has worked hard to understand how libraries work and what librarians want from their systems - by listening to them and delivering what they want, rather than what is convenient or fashionable.

He has built up an astounding relationship with Innovative's customers to the extent that 1,500 people, from more than 20 countries, attended a recent user-group meeting. The legend is that Innovative has never lost a customer to a rival system. While that is not quite true, defections are so rare that they are an event, far outweighed by traffic in the other direction. Kline admits that some customers could have made short-term savings by going with other suppliers trying to get into the market. But he believes the majority sees value in dealing with a company that is profitable and has no other way to make money than by pleasing its library customers, and which is in the race for the long term.

'It has never been the most affordable system, but having a system that is really there is well worth whatever extra dollars it ever cost,' agreed Clifford Haka, director of libraries at Michigan State University. 'I think very well of Jerry and his organisation,' he added. 'We have been using the Innovative system since about 1982 and they are really the only library system vendor which has been around that long. The others seem to come and go and get sold, gain steam, and then disappear. What we like about Innovative, and also about Jerry, is the consistency of leadership, and a consistent business model that you can respect. Innovative has continued to grow, and transform its product as the world has changed. Also, its systems are always really there. Some companies try to sell vapourware that sometimes never comes into being at all.'

Haka has had personal experience of Kline spending time to listen to what he really wants from the system, and has seen the results in future products. He has also seen Kline admit when he got it wrong, and then put all his energy into catching up until it is right.

'I and others have been invited to lunches with him, and he has asked us what we think the challenges are and where we think the company should be putting its efforts. There are lots of companies at big library meetings who hold lunches where they tell you about what they are going to do, which is basically a sales pitch. Jerry is really interested in what people have to say; he really listens. There have been a number of times when I or other people have said something to Jerry and a year later you hear him say it back,' he commented.

'When Jerry sits down with you, he knows the details of what you are about and where the company is headed. If he says something, I am very comfortable that it will happen. He is very candid and if he does not want to do something, then he will tell you. He is almost unerringly correct about where the market is going. But there have been times when he has said 'we didn't pay enough attention to this' or 'we didn't think this was going to take off and be so important' and then said he is going to do whatever it takes to get it right. On the rare occasions that he misses the mark, he recognises it.'

These personal qualities are important, according to Haka: 'Jerry is very business-like and when you speak to him it is business first, but he is an engaging fellow. He is fun; he is one of the brightest people you will ever be around; he understands subtle implications and he has a great memory. He pays a lot of attention to academics, and is well aware of what is going on in the library world generally. The main thing about Jerry is that he is honest, and it is clear that the people who work for the company know the way he likes things to be done.'

Kline was born in the working-class suburbs of Los Angeles and his early life was far from the classic California dream, although he does remember living in Santa Monica once and body surfing in the ocean. He was good at mathematics at school, but otherwise admits he was not an exceptional student. He did well enough to get into college though, and headed off to Berkeley in the early 1970s.

It was a very exciting time to be at Berkeley and, in addition to a few dalliances with political affairs, he was able to discover the emerging subject of computer science. He immediately decided he liked it, and eventually graduated in electrical engineering and computer science. Although few people knew anything about computers, it was still difficult for him to find work after graduating, and he found himself working in the university library at UC Berkeley. Like most libraries, it was beginning to develop its own 'home brew' indexing systems on computers - this at the time meant very expensive mainframes, although minicomputers were the burgeoning technology.

In 1978, after five years at Berkeley, Kline decided to break out on his own and founded Innovative Interfaces with two partners, Steve Silberstein and Lachmann Sippy. Their first product was called the 'Black Box' and was a hardware and software system that allowed libraries to download OCLC bibliographic records into the CLSI circulation system without re-keying. This was revolutionary at the time.

Kline describes this work as 'more like a hobby'. They operated out of Kline's spare bedroom and had no idea what they were eventually to create. The system sold to about 100 libraries and Innovative had to move to proper offices when Kline and his wife needed the spare bedroom for a new baby.

Sippy left the company early on, but Silberstein continued as Kline's partner until Kline bought him out in 2001 when he retired.

In the early 1980s, the hottest technology around was 'multi-user micros'. Kline saw this as the chance to build much cheaper systems for small libraries that could not afford mainframes. There were few standards around at the time, and he built a combined hardware and software system for library ordering and acquisitions. By the mid 1980s, the company had decided to standardise on Unix, although at the time there were so many versions of Unix around that this was something of an oxymoron. But it was standard enough for Kline to realise that it was more economic to buy-in hardware and just concentrate on the software.

Kline said that, in the early days, it was hard to persuade libraries to buy from a small company. He said: 'People gave us the benefit of the doubt. At the time, people said that nobody ever lost their job for buying IBM.' However, some people did give them the benefit of the doubt. 'We did not target the largest mainstream libraries, but there were thousands of others. At first we sold to university libraries, then we started to pick up a few public libraries.'

By the early 1990s, Innovative was starting to offer more modules to libraries and was gaining credibility. It believed in working closely with libraries as development partners, making sure they got the systems they wanted rather than trying to sell a standard package, and this approach paid dividends.

Innovative was always profitable, and relied on those profits to re-invest in the company to develop new systems and to grow. Given how competitive the whole IT industry has become, it is surprising that another company has not spotted the opportunity and eaten Kline's lunch. Kline says that many have tried, but few survived.

He said: 'Many large companies have tried to come into the niche. It is an interesting market, but it is not as large a market as it is billed and the decision-making process is slow. At first, a library looks like an inventory-control problem, but libraries are unique institutions. You have to understand what it is that makes a library a library, not a bookstore. Start-ups in this industry have numbered in the hundreds. But they have found that the software is very complex and needs to be updated frequently. 'In two years, parts of [your system] could be obsolete, so you have to keep moving.'

Kline believes the company has continued to thrive for more than 25 years because it has continued to develop its products, and because it has always taken librarians with it. Being a private company is also a significant factor.

He said: 'Here the decisions are being made from within the company because we are independent, rather than being part of a large company with its own agenda and driven by short-term profits. We have been able to stay profitable but that does not mean that we make great profits every year. We can take dips in the short term because we are in for the long term.'

In the mid 1990s, Innovative made a key strategic decision to develop its systems using Java, turning its back on Microsoft hegemony. The decision has proved to be popular with its library clients, many of which have adopted Linux as their operating system of choice. Kline has seen plenty of competitors come in with Windows-based solutions, but he is not worried. And Clifford Haka at Michigan State University confirmed that he has no problems interfacing his Innovative products with Microsoft products used elsewhere in the organisation.

Kline sees the future of library systems as being in developing 'self-service' for its patrons. Recent versions of its software have included e-commerce systems and wireless interfaces. Kline's own children's experience has persuaded him that the next generation of library users will expect more use of wireless technology.

Kline may take it easy at some point in the next 25 years, but not any time soon. He frequently ran marathons in his 30s, recording a best time of 3 hours 13 minutes, and is in training for another attempt at the 26-mile race. Like his business, Kline sees marathon running as a long-term proposition. 'When you are running mile one, you have to think about where you are going to be in eight miles or ten miles. You have to focus on that to stay in there in the long term.'


CURRICULUM VITAE

EDUCATION
1974 University of California, Berkeley, graduate in electrical engineering and computer science.

EMPLOYMENT
1973-78 University of California, Berkeley, university library, systems development
1978-date Founder, chairman and CEO of Innovative Interfaces