with Eirik Renli, CEO, Fishbones
Working in a company like Baker Hughes provides a certain sense of job security, did you feel any risk in taking this job at a small company?
There was indeed a lot of risk involved. A large and solid company like Baker Hughes offers a good safety net, and the change from BH to here was monumental. When I joined Fishbones started nine months ago, we had no contracts, no revenue earning, customers and our technology had not yet been pilot tested in an oil or gas well.
Having invested some of my savings in Fishbones, if one does the math, I might be out of a job in six months with no money. If I had selected to stay with BH, the situation would have been much more predictable.
Having worked in an oilfield services company for many years, when you joined Fishbones, what were your expectations like, and has the past year lived up to your expectations?
One of the main reasons I joined the company was because I wanted to get closer to the sharp end of the stick. I was driven by a motivation to use my experience in helping the owner and inventor, Rune Freyer, building a service company. Our clear target is to have a large and complete organization with branches worldwide in place by 2014. Based on our initial plan, I would say that so far the job has met my expectations. The only disappointment I would like to mention is that the transition from research and development phase to commercial has taken longer time than I had anticipated.
Mr. Kyllingstad of IKM has said that Norway is strong in producing innovators, but not so much with entrepreneurs. To what extent do you agree with this, and did you feel that you were needed in your capacity?
I certainly hope that I am needed, but I am probably not the right person to ask that question.
There is probably some truth in your statement about entrepreneurs, but I do not necessarily agree. In our industry, we have seen many new companies start up to be successful during the past few years. Go to Houston, and you will find that there are dozens of small and large Norwegian companies established.
Perhaps the over-focus on innovation and lack of entrepreneurship somewhat hinders a company from reaching its full potential.
In many cases that is probably correct. In Fishbones we are aware of the risk and it is my responsibility to maintain customer focus so that we minimize the time to commercialisation. We have already been recognized by clients on several continents so we are confident that we will reach our full potential.
Many of the big businesses are very open to new technologies. How do you see the receptiveness of the market to continue develop new products?
The majority of companies openly admit that they are not first-time users. They do not want to run our technology before it is proven. Conceptually, if everyone did that, new technology would never reach the market. Fortunately, there are a handful companies who are willing to put their head forward and test new technologies. I certainly appreciate this group of risk taking operators, but there are far too few. More than 90% of companies I work with say that our technology looks great, and that it can add value for their company, but they are not willing to test our technology until it is field proven.
What do you see as the full potential for Fishbones technology domestically and internationally?
Fishbones completions stimulation technology is an alternative to hydraulic fracturing. If you look at the global market, we reckon there are more than 50,000 wells a year being fracked/stimulated. Fishbones will never replace fracking, but rather offer an alternative in certain applications. What we can offer to the industry is a system which will reduce the cost for the operator, increase oil recovery and at the same time provide a safer and more environmentally friendly operation.
Those are the qualities we think we can provide to the customer.
Smaller companies tend to be a better breeding ground for innovation because there are a small number of employees with more free thinking. The challenge however, is facing global competition in a market with big players. What do you see as the main challenge in terms of competing with these big names that might be developing similar technology, and how do you overcome the challenge?
It is indeed a big challenge. The big companies like BH, Schlumberger or Halliburton have a customer network; they have contracts and infrastructure in place. For these companies to implement one new piece of technology, they have an entire system for it, from R&D to a sales force ready to add new technology to existing contracts.
We have to start from scratch. We have to establish a contact net at different levels; we have to be very selective in where we go which means our statistical chances of success are lower. We have a big disadvantage in that sense, which is part of why the process takes a long time.
With limited resources, our challenge is to find the time to meet with all relevant operators at different levels within each company: influencers, decision makers, specialists, supporters, naysayers, you have to convince everyone.
The rising cost of human resources has also affected costs. Small companies often look abroad for expanding business, often times because labor is cheaper in other positions. What is your current outreach in terms of sales overseas and are there plans to increase this?
Like I have mentioned already, we have a global ambition. Our vision is to set up local manufacturing bases as well as a local office in each location, with sales and operations. We are currently recruiting leaders for our first international establishments in US and Far East.
With that global network, you are opening yourself up to many more opportunities for potential investors. Many small companies are interested in doing this; do you see this as a potential option in the future, and what advantages would it bring?
We see it as an opportunity. One advantage it would bring is that the local company has the infrastructure in place so that we can bring our technology and knowledge while the local company brings manpower and infrastructure. If you can combine those two, you will have good results.
On a more personal note, having worked in BH for so long and a variety of locations, how have you had to change your management style and what strategies have you been able to bring in?
I really enjoyed my time at Baker Hughes and I only have positive words for them.
Professionally, I saw the need for a change and new challenge. In big companies, there is a tendency to become very bureaucratic and new ideas coming from the employees are not always listened to. You may have a lot of innovative people in the company but they tend to give up because nothing happens. What I can bring to the table in this company was to inform that every individual, all eight of us, is equally important, everybody is free to speak up at any time, and everyone is involved with everything we do. Involvement is the key word here; at an innovative company there is no limit, you can say anything as long as you stay within our ethical guidelines.
I have seen some interesting changes since I have been here; for example, we have a consultant technician, who, when he started we were not sure if we needed him. Today he constantly comes up with new ideas; he invents new technology on the weekends and is generally really involved. Involvement and letting people know what is going on are our two priorities.
In a large organisation, it might take a year for an idea to come to fruition, here we can start and stop at any given moment, and in that sense we are much more efficient. All in all, I am using my good and bad experiences from my previous employer.
If we were to come back in five years and the technology has been approved, with customers, where can we see Fishbones at that time?
You will see a global supplier of completion stimulation systems helping clients to reduce the costs and increase recovery. This is what we want to be known for – a simple system that reduces costs and increases recovery. That is what we are selling as our brand and what I would like to be known for. We aim to be a solution-oriented company with offices on all continents.
What is your personal motivation for coming to work here every day?
I like to build and create. In my previous life, there was more emphasis on maintaining business. My mission is to assist the owners building up the company. When my job is done, I will probably move on to new projewould hope for the future that more oil companies consider being first-time users, which would help the industry as a whole. The challenges we have over the next fifty years require the development of new technology. Without opportunities to field test, new technology will never make it to the market.