Aron Ain, CEO of Kronos

Want to build a billion dollar business? Go overseas

In 35 years Aron Ain, CEO of US software company Kronos, has created a global software firm which operates in 100 countries. He shares his tips to overseas success.

by Elizabeth Anderson
Last Updated: 14 Jun 2013

Kronos shook up the workplace when it launched the automated timeclock in the 1970s, leaving the noisy and time-consuming punch clock, so beloved of old movies, all but obsolete.

Having expanded into management software and services, US-based Kronos is now worth more than $1bn and its products are used in more than 100 countries. The Border Agency, the NHS and Asda are some of its customers in the UK and its workforce management tools are used by more than half of the Fortune 1000 companies in the US.

At the head of the empire is CEO Aron Ain, who joined Kronos three months after it was launched by his brother and two co-founders in 1977.

He explains how a heavy sales push and an aggressive expansion plan created one of the world’s largest software companies.


 

Q: How did you persuade large companies to give your product a try?

 

The biggest challenge in the early stages was building distribution and getting people to buy the product when you have no customers and are untested. I went to a library in Boston, where Kronos is based, picked up a copy of the Yellow Pages and made a note of all the companies selling time clocks across 100 cities in America. I sent a letter to everyone telling them about our product. They became re-sellers, and our next hurdle was to persuade firms to use them.

At first we let companies try our timeclocks for free to get some feedback and build up a client base. After we’d perfected it, we quickly moved to sell to the rest of the US. Aged 23, I moved from Boston and opened our first office in Chicago. There were only a few employees at Kronos in the first couple of years and we worked seven days a week - but it didn’t feel like hard work. Every time we got a new customer, we jumped up and down. We got our first big customer in 1980, which was the Marriott Hotels - and shortly after ShopKo, a large retailer, followed.

Q: How did you take the company global and what’s the secret to a successful overseas expansion?

 

We started in places that were English speaking – Canada and the UK from the mid-1980s, then later Australia and South Africa. We thought it would be easy because we picked countries which spoke the same language. But we mis-underestimated how hard it would be because work rules are different in every country.

To launch successfully in a new market, you have to hire local people because they will understand the country’s rules and regulations, they’ll have the connections and they’re often more trusted among local customers. And you have to be prepared to make the investment over time. Anyone expanding overseas should expect that they’ll lose money for the first few years. You just need to stick it out.

We started to expand even more aggressively in the late 1990s and in the last eight years we’ve also gone into emerging markets including China and India. We started in China from scratch in 2006 and we now have 150 companies as customers.

Q: What was your original goal?

 

Our aim was to be a $100m company and to go public one day. Thirty five years later we’re a $1bn company and we have over 20,000 customers. We went public in 1992, but went private again in 2007 because we didn’t feel we were getting a fair valuation from the markets.

The turning point for Kronos came in the early 1980s, when IBM introduced its PC. It meant we could transfer all the intelligence learned from our timeclocks onto the computer, and we could bring down the price for our customers.

Q: What has been your best decision?

 

Our best decision was deciding to sell the product directly to the customers ourselves, rather than through third parties. It meant we didn’t have to depend on anyone else. I’m convinced that’s why car dealers are struggling. If a sales person decides he prefers one to the other, they don’t try as hard and car companies suffer.

Q: …And your worst?

 

Sometimes we were slow to adapt to changes in technology. To be honest, we missed the whole Microsoft/Windows revolution. Even by the mid-1990s we were convinced IBM’s DOS was the product of the future. We finally caught up when Windows 95 came out. Before then, Kronos had never worked on Windows. Looking back, I’m surprised we managed to stay in business.

- Find out more about Kronos

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