He's no dummy: interview with Patrick Sweeney
An early failed RFID experiment wasn't enough to shake Patrick Sweeney's faith in the technology. In fact, he made RFID the focus of his second venture as well as his first book, RFID for Dummies.
A more conventional business executive might have written RFID off altogether after his early experiments with the technology fizzled. But Patrick Sweeney wasn't so easily dissuaded. As he saw it, the failure had less to do with the technology's capability than with its maturity. "It turned out that the technology wasn't ready—it was too expensive for what we wanted to do," he says. "Still, I felt convinced that would change. The RFID concept seemed sound. It just needed further time in development." Sweeney decided to bide his time.
Then fate intervened in the form of a fortuitous meeting on the links with a Wal-Mart executive who happened to be an early champion of radio-frequency identification. Sweeney came away convinced that there was a future in the technology. He decided to take a chance and invested his own money in a startup based on, you guessed it, RFID.
Today, Sweeney is president and CEO of ODIN Technologies, the company he founded in 2002 after recruiting Dr. Daniel Engels, the creator of the electronic product code (EPC) protocol and director of the Massachusetts Institute of Technology's (MIT) Auto-ID lab. In just five years, ODIN, which specializes in the development and implementation of RFID systems for logistics applications, has become the dominant player in the physics of RFID deployment, research, and installation optimization software. Its clients range from Fortune 500 leaders to the U.S. Department of Defense's Defense Logistics Agency, which in May 2006 awarded ODIN a contract to deploy the largest RFID network ever opened to public bidding.
Sweeney isn't just an entrepreneur, however. He has also proved to be something of a technology visionary. He recently had two patents approved and has several other patents in various stages of the approval process. In addition, Sweeney is the author of two RFID-related publications, RFID for Dummies and The CompTIA RFID+ Study Guide.
Sweeney spoke recently with DC VELOCITY Group Editorial Director Mitch Mac Donald about how he came to be a leading voice in the RFID field.
Q: Tell us a little bit about your background and your career to date.
A: I was born and raised in Massachusetts, and while in high school, I went to work part-time for a group of entrepreneurs up in Manchester, N.H. Then about a year and a half out of school, I had a tryout with the U.S. National Team for rowing. I spent a good five years training for the Olympics, and in 1996, I ended up finishing second in the Olympic trials. As a result, I got offered the alternate spot but didn't take it.
Q: Why not?
A: Because the alternate is the guy who sort of hopes that someone else gets hurt, gets all the gear, and then never gets to compete. I actually ended up spending that summer rowing for Ireland because I've got dual citizenship. I rowed in the World Cup with that team. After that, I wound up traveling through about 50 different countries competing in a bunch of national championships and international races. It was a great experience and it got me the "jock entry" into the top business schools around the country—or the East Coast, to be precise. I ended up going to the University of Virginia and at the same time, went to work for an IT company. I actually started my first year there as an intern and kept working through my second year.
Q: What was your first move after finishing grad school?
A: I took a full-time position with the same company.My dad was involved in the computer field starting with the technology services specialist EDS way back in 1970. I also had a lot of buddies who were starting Web site-hosting companies and making a lot of money doing it. I figured I could do that, so in 1999, I started a venture capital-backed firm offering server space for hosting. Toward the end of that year, I saw an article in MIT's Technology Review about these little chips that could track things.
Q: A report on what was then the new Auto-ID Center at MIT?
A: That's exactly right. The Auto-ID Center had just started up, so they ran an article in the magazine. As it happened, these new chips, called radio-frequency identification (RFID) tags, caught my eye because they sounded like they could be used to solve a problem we were having at our managed hosting company, ServerVault.
What we were looking for at the time was a quick means of identifying the various servers in our data center. Although the servers—which were stacked in what we called a "server farm"—all looked the same, some demanded more attention than others because of their service requirements. Some of our service agreements with clients stipulated that if the server went down, we had to get a replacement server up and running within two minutes or pay a penalty. In other cases, like the server we hosted for a recipe Web site, the server could be down for 24 hours and the client didn't particularly care. Problem was, we couldn't tell them apart by simply looking at them, so I thought RFID might be an interesting application for that.
Q: Makes sense.
A: I realized we could tag every one of our servers and use the technology to quickly determine which server was which.We started using the tags to locate specific servers that needed attention. It replaced a fairly unsophisticated approach in which, essentially, whenever a problem arose, we had to go and physically touch each server and put a keyboard on it and find out what was where.
Q: So you attached RFID tags to actual server hardware and programmed the system to let you know when there was a problem with a particular server box?
A: Exactly right.
Q: How did it work out?
A: It turned out that the technology wasn't ready—it was too expensive for what we were doing. I think a lot of people have had that experience over the past four or five years.
Still, I felt convinced that would change. The RFID concept seemed sound. It just needed some further time in development. I was so convinced that in 2002, I decided to start my own RFID company.
Q: That's a fairly bold move for a guy who had tried the technology and found it still had a ways to go.
A: Actually, part of my decision stemmed from a golf trip over in Ireland, where I spent a day with Tom Coughlin, who at the time, was the president and CEO of Wal-Mart's Stores division.
Q: Sounds like this story is about to get very interesting!
A: Oh, it is. I didn't need anyone to hit me over the head with a two-by-four after I heard Tom explain why he thought RFID was a very good idea. It seemed that an opportunity had presented itself, so we got started with the formation of ODIN in 2002.
Q: What did you see your fledgling RFID company doing?
A: One of the opportunities that we saw very early on was in what we call the physics of RFID.
Q: What do you mean by the "physics"?
A: Five years ago, a lot of what we heard about RFID in logistics applications was where and how it didn't work. People would complain, for instance, that RFID had trouble working in or near water and metal. The fact was, RFID didn't have trouble with anything. The challenge was making people understand that fact. We saw an opportunity for a company that would help people understand exactly how RF waves behave around certain materials and why. We had to help the market understand the issues of physics that related to how RFID works in various environments.
Because nobody had a really good understanding of the physics around RFID, people were struggling to make the readers work and struggling to get consistently high read rates. So that physics approach helped educate the market about the fact that RFID did work well— you just had to take various factors into consideration.
Q: What is the focus of ODIN with RFID today?
A: We design, install, and then support the actual RFID system infrastructure: the tags, the readers, the light switches, all those components. We do the design and the installation. We choose the hardware because it's very important to pick the right hardware for a particular application. We advise on the middleware, or software integrated into the system, based on the specific system's architecture.
When it comes to whose equipment or systems to use, however, we are like Switzerland. Other than making sure it is the right choice for the customer's application, we really don't care whose reader is used.We don't care whose middleware is used.We have used it all. The tools that we have are software tools that automatically configure and set up the readers once they are on site.
Q: You wrote the book RFID for Dummies about three years ago. What was it like to write a book in the "Dummies" series?
A: It was interesting on a couple of different levels. Writing the book was actually easy. The publisher of the Dummies books has really got it down to a science, and that made the work fairly simple. It was also interesting that when the book first came out, one of the things that people said was that I was giving away all the company secrets. We even had clients of ours send us proposals from other vendors that took stuff right out of the book and put it in their pitch, which is always flattering.
Essentially, I guess, we gave away all the secrets, but we also came away with the idea that we were going to continue to innovate.
It seems to be working. We focus our company on four core ideologies. Number one is to hire only the best, so we have a really extensive hiring process. Number two is to constantly innovate. Number three is to act with integrity. Number four is to create supremely satisfied clients. If you look at our list of clients, there is nobody in the RFID space that has had more success with big global clients.
Q: What do you say to the RFID naysayers who contend that the technology's capability is being oversold?
A: I'd tell them that I completely agreed for my first three and a half years in this business, but in the past year, we have very clearly seen a transition or evolution. The industry that we are leading right now is dramatically different from the one we were in just 10 months ago. As recently as July and August of 2006, there were still people over-hyping the capabilities. There were venture capitalists trying to make a quick buck. Now what we see, particularly from the beginning of this year, is that RFID has its own successful industry. The big value and the big benefit is really starting to come into clear view as we move through 2007.
Q: Does that make RFID similar to emerging technologies of the past? There's no shortage of stories about new technologies being unveiled to great fanfare before falling victim to the "over-promised and under-delivered" syndrome. And then, when the hype died down and people adjusted their expectations, the technology evolved substantively in the second round, if you will.
A: That's a very good description, and I think it is right where we are today with RFID. We are sort of in the calm after the storm, if you will. There was previously so much hype and so much noise that it created a promise for the technology that I'm not sure anyone will ever be able to deliver on.
Right now, I think we are just moving out of the evaluation process for the technology for many companies. Wal-Mart made a big push. The DOD made a big push, and others are following. For most companies, though, things move a little more deliberately. They have a little money in this year's budget. There is a little extra in next year's budget, and then in three years, there is the money to take the big step, but first they want to see if RFID proves itself in the initial small steps. If you look back, it's the same logical progression of business investment in new technologies that we've seen in the past. It happened with enterprise resource planning systems. It happened with warehouse management software(WMS). Now it's happening with RFID.
Q: What's the risk for companies that sit back and take a wait-and-see attitude toward using RFID in their supply chain operations?
A: It's the same risk folks took when they waited to see how bar coding might change the game, or how WMS might impact their business. Essentially, you run the very real risk of losing your competitive edge.Your cost of doing business is going to be substantially higher than your competitor's. The big problem is going to come in not having the same level of actual intelligence that your competitors have. With RFID, you'll have real-time actual intelligence on product demand from the store backroom all the way up to the manufacturing line and then back to your suppliers. Your inventory will be much closer to where it needs to be when it needs to be there, and you will have a much more robust view of what is going on.
Q: Of course, you'll also be flooded with information. What advice do you have for folks trying to walk that razor-thin line between information availability and information overload?
A: That is a great question, Mitch.We get a lot of people wondering about how they can take action with all this data. If you don't decide that before you set the system up, all hell can break loose. You've got to get ahead of the data. If you aren't ready to handle the data to take action on it, then it is just more bad data.
With RFID, you've got something that is highly accurate. It is both a data-finding tool and a business intelligence tool. Before you install a system, you need to first answer the question "What will I do with all this data?" If you answer that question well on the front end, you can really harness the technology's capabilities.
About the Author
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
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