By guest author Tony Scott
History of Freeborders
Earlier this year I interviewed Jean Cholka, president and CEO of Freeborders, an outsourcing company with most of its delivery team based in China. Jean joined Freeboarders in 2007 after seven years at Kanbay, where she held various executive positions including president – North America, executive vice president – global client relationships, and chief people officer. Her accomplishments at Kanbay included helping the company achieve a 200% increase in revenue within four years, while increasing profitability by 15%. Kanbay was named among the top 100 (55th) information technology employers in 2004 and top 10 IPOs in 2004. Prior to Kanbay, Jean held a variety of executive positions at Sears, Roebuck and Company and Ameritech (now part of AT&T).
Tony: Jean, can you start by give me a bit of your background in the outsourcing world? How did you come to Kanbay, and what made you decide to join them – and then how did you get to Freeborders?
Jean: One of Kanbay’s first two clients was my husband, so that’s how I met them. I would talk to them periodically and finally they said, “Why don’t you come and join us?” I ended up staying with them all the way through. We did an initial public offering in 2004, we grew to 3,500 people and $250 million in revenue and eventually got sold. So I was retired. At that point, the last thing in the world I ever wanted to do again was outsourcing because it just burned me out. At Kanbay we had opened offices in Hong Kong, Tokyo, Australia, Singapore, and London, and it was very tiring; I did not want to do it any more. Freeborders called one day and said, “This an is opportunity to be the CEO of the small company that’s trying to figure out how to do U.S.–China. Nobody is able to do U.S.–China and it’s just a perfect opportunity for you.” Of course, how often you get asked to be a first-time CEO? So I decided to give it a chance.
Tony: So, that was in 2007?
Jean: Yes, 2007. Prior to that Freeborders was a product company – it had been a product company since 1999.
Tony: What was its product?
Jean: Product life cycle management in the garment manufacturing industry. I had many clients who used that software, but the company could never get it to be of the scale it needed to be and profitable, so it took another round of investment. The new investors decided they wanted to turn it into a services business. The guys who started it understood how to run a product company but not how to run a service business, so they looked for a new executive team. That’s when they called me, and we built out the new executive team.
Tony: So, you shifted from being a product company to having no product at all – did you just shut down the product completely?
Jean: No, we sold it to Larsen Software. It’s still going very well and now it’s able to be profitable because it’s got the larger company wraparound.
Tony: Did you change the name of the company as well?
Tony: So you kept everything under the same name, but the business was going to be something completely different?
Jean: Yes, we were going to transform it totally, so we started from scratch with no services or clients, and built it from there.
Tony: Between 2007 and now, you’ve grown substantially.
Jean: This past year has been really tough, but prior to that we did pretty well. We were growing 50 percent year over year for a couple of years, and we grew 10 percent this past year. That’s okay, I will take it.
Tony: For the past eighteen months or so, even flat is not bad.
Jean: Yes, and we made it profitable. We’re very focused on the financial services industry, and we have strong domain expertise in capital markets. We have also focused on something that really wasn’t a sector but that we kind of make a sector – business technique exchanges. Companies such as Ticketmaster, those kinds of exchanges. Their business is just being an exchange service.
Tony: There is a transaction, and the business exchange is facilitating it.
Jean: Yes. So, we know how to make those transactions work really well and how to get to a point where it is very customer friendly. When customers go back in to the system, it’s easier for them to shop because the third party retains information on them. Those are our two areas of focus, and they are not really connected. Our ability in the exchange area comes out of our product life cycle management history. The financial services piece started with the acquisition of a higher end capital market consulting firm.
Tony: So you are also providing services for capital markets, for example, IT for trading operations?
Jean: Yes, IT associated with trading and settlements.
Tony: So, not on the commercial banking or retail customer side?
Jean: No. We do some, and we are now moving into those areas. We have two core banking clients are supporting for banking operations, and that’s been interesting for us. We also are not into credit card services yet. That will be our next thing, but we would like to make sure that we are investing in a way that we really understand the domain we are getting into. We want to make sure that we are not just low-end IT, that we are not just a commodity.