Episode  123 – How a Pioneer from the SaaS Era is Jumping on the AI Wave to Re-invent his Firm – Member Case by Jeff Pedowitz

Jeff Pedowitz, CEO of The Pedowitz Group, was one of the pioneers of the SaaS era by driving adoption of marketing automation technology from Eloqua, Marketo and others. This allowed his firm, The Pedowitz Group, to dominate his niche for almost two decades. Now, Jeff sees the next big wave, AI, and he shares with Collective 54 how to ride it all the way to the bank.


Greg Alexander [00:00:10] Welcome to the ProServe Podcast, a podcast with leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community focused entirely on the unique needs of ProServe firms. My name is Greg Alexander. I’m the Founder and I’ll be your host today. On this episode, we’re going to talk about A.I. artificial intelligence and its impact, in particular around B2B sales and marketing and overall revenue generation. And we have a fantastic role model today, and his name is Jeff Pedowitz and he’s fantastic for a reason, and are many reasons, I should say. But the one that is relevant to today’s topic is the last time we had a major tech wave was the SaaS wave, and Jeff was a pioneer in that space. He and a very small number of people I believe, can claim attribution for the mass adoption of marketing automation. And having gone through that entire journey all the way from a nascent industry to maturity, which it is today, his perspective is profound, and I think he can take those lessons and apply them to AI because it’s early, early days there, and he maybe more than most, can probably share with us where this might be headed. And what we hope to accomplish today is by listening to that story and applying past lessons to new tech, maybe we can get ahead of the curve, learn to learn a few things, and maybe profit from them. So, Jeff, it’s great to see you. Would you mind introducing yourself and your firm to the broader audience, please?

Jeff Pedowitz [00:01:59] Sure thing. Greg, good to see you too and thank you for having me back. So I own the Pedowitz Group and we are a sales and marketing consulting company. We work with sales and marketing leaders who want to drive more revenue and we specialize in digital channels. And of course, AI is probably the best emerging digital channel we’ve seen in quite some time.

Greg Alexander [00:02:21] Yeah. And I understand that you just did a bunch of homework on a new book that you got coming out in just a couple of weeks. What’s the title of the book?

Jeff Pedowitz [00:02:27] It’s called The AI Revenue Architect. Great.

Greg Alexander [00:02:33] So why don’t you kind of give us the outline of what’s in the book and maybe we can use that as a framework for our talk today?

Jeff Pedowitz [00:02:39] Yeah, absolutely. So. Well, my job, my company’s job is to follow technology because that’s what our customers want us to do, is to implement technology so they can scale their sales and marketing engine. So AI and various components of AI have been around for several years now. It’s just this whole emergence now generated by AI and what that Open AI platform are doing are bringing it into the mainstream and really starting to help a lot more people visualize the tremendous possibilities. As I start to think about this and the problems that my company and I have been solving for the last 16 years. There are still systems are still siloed. There’s data that’s everywhere. And people spend more and more and more on technology and data, but they still can’t run sales and marketing any more effectively than they could 15 years ago. They just have a lot more tech now to deal with it. So as I started thinking about the potential of AI, the first thing I wanted to do was really just help companies solve their problems better. And so the book introduces a concept called Rain, and that name was chosen intentionally because in sales, of course, we’re always trying to make it rain. But in this case I took Matt and it really stands for a Revenue Artificial Intelligence Network. And what it does is it connects all your systems and processes both inside and outside through AI. So you can actually, through one single interface, actually start to direct and manage your revenue engine. So it controls scale.

Greg Alexander [00:04:15] Mm hmm. I love the acronym. So let me make sure I understand that. So Revenue Artificial Intelligence Network.

Jeff Pedowitz [00:04:23] Yes.

Greg Alexander [00:04:24] Okay. And the way that you just described it to me, I find myself wanting to apply past frameworks to it. So is it is it middleware in your perspective or is that an incorrect analogy?

Jeff Pedowitz [00:04:39] Well, in some ways, yes. Right. So it’s it could be taken into something like a Boomi or Mule Sox or automatic or any of these integration in all areas. But combining it with AI so that you can train the systems that you have. So even some of the routine, mundane tasks can be done quickly. But as that starts to supplant, you can actually be a lot more productive. So just some typical use cases we scoring, which is something that we had Eloqua pioneer back in 2004 for the first time, largely has not changed dramatically. Most of the input for sales marketing is made, scoring is manually derived. Well, I think we should get ten points for a website, visit it five points about an email or 17 points of view or a demo. And then the models are relatively rigid, and then we send over what I suppose to be qualified ways to scale sales based on this framework, grade spec and prioritize. But with A.I., you don’t actually need an artificial or an arbitrary model. It can actually analyze the real activities, the demographic data that customers really did to come up with a scientific data, factual-based model that will continue to sell, learn, and even more importantly, become more predictive. Wow. So that’s just one example of where AI can play a major role. There isn’t a sales and marketing person I know that loves cleaning up data. We love getting more data, but we don’t actually like going in and cleaning out fields and systems and building new segments and doing all that well. That’s another way that AI can actually do that, because once you train it on what data standards you want for your company, you can start doing that automatically. Content creation and response. No matter what sales methodology is in today’s modern B2B selling environment, our customers are 90% and 95% of the way through the sales cycle. This is not like what, Greg, when you and I are personally, I wish we could control everything. So that inherently puts us at a disadvantage. So if you can use AI to do more informed research on your prospect customer, write better correspondence, look at their content, come up with unique differentiators, anticipate possible objections your buyer might have, and be ready with response to be more proactive. You’re now starting to get ahead of the game.

Greg Alexander [00:07:09] Those are fantastic use cases. It’s causing me to creatively think about how to get them implemented. What I want I would like to do speak to you about a question I have here in my notepad is, you know, selfishly, I’m trying to help the members of collective 54. I know what you’re doing is much bigger than that. But in this particular case, about 85% of a proserve income statement. The expenses are labor. And so if you can replace labor with tech in theory anyways, you can significantly increase profit margins. Now, some people view that as a negative, you know, and a lot of the stuff you read about AI right now is all these scare tactics. But as a capitalist, I view that as a huge plus. I mean, if my members could take their workforce from 110 and keep the revenue the same, I mean they’re going to make a lot more money and scale a lot faster. So is that hype? Is that real? I mean, do you see the tech replacing humans?

Jeff Pedowitz [00:08:05] Well, it’s a little bit of both. I mean, it doesn’t outright replace humans. And it should be noted that we talk about AI as a general category. AI in its truest sense, means artificial intelligence, sentience, self-awareness, emotional awareness, what we’re all talking about, this general of AI, ChatGPT. It’s not that, it’s machine learning. Now it can take large amounts of data and it can learn quickly in a process to make decisions. But it’s not self-aware and has no emotional understanding. It doesn’t understand context. It doesn’t understand nuance. It is still just a tool in the hands of a skilled practitioner. So I view this as the third major generational change since I’ve been in the workforce. The first, of course, being the rise of the Internet. The second, the introduction of the smartphone. And now this. Now, when the Internet first came out and I got my first marketing job in college, I did catalog marketing the bank. There was no email. There was no Internet. There was no nothing. Did catalog marketing go away? No. Did two new digital channels come into play? Yes. Some people that were very skilled in direct mail moved over into email, digital channels and developed new skill sets. When the smartphone came out, it also introduced the whole new apps and mobile advertising and all new ways of doing things. So I think if you’re just doing simple, repetitive tasks and you’re not willing to adapt like any other moment in human history, if you don’t evolve, sure you will get left behind by an unknown space. AI doesn’t replace the human. It can’t because it’s not a human. It can make us a lot more productive. It can make us a lot smarter. And it can process things faster. So sure, it will introduce new margin providing that professional service owners can really think about how to apply it in the best way for their business. So let’s talk about some immediate practicalities. Almost all of us in professional services are doing research with our clients. We’re doing interviews, we have transcripts, We provide some kind of report or presentation that, well, today that takes a lot of manual activity. It requires our senior and junior people to crunch data and do that. Those tasks can be replaced by AI and done in seconds, which will free up more value added time for those professional people to add more quality insights based upon that data back to the client. Mm hmm. And you use AI. to automate the data gathering. So if you’re doing a subjective in-person interview today with your client and you have them, just go to a site, they fill out a survey,  AI processes all that information in real-time, speeds up that discovery period, adds more value. Yes. So there are a lot of different ways that AI can enhance it, but I think it gets a little overhyped to say that it will replace.

Greg Alexander [00:10:55] Okay. So if I’m listening to this, my first thought is I need an AI strategy for my firm. I’m intimidated by that because it’s evolving. I mean, just just in the last 10 minutes, you’ve dropped more things on me that I knew were possible and that I’m imagining that pace of change is going to continue. So what do I do? I mean, how do I develop a strategy for myself and how do I keep it up to date?

Jeff Pedowitz [00:11:24] Well. Try not to make it bigger than it is. Right, because it’s going to keep evolving and changing. So if you can appreciate that this is a way of streamlining and take improving analytical capability processing. Make a list of your business today. Look at your operational things that you do, your sales things, your marketing, and then look at whatever your professional service on or whether you’re on an architecture firm or a law firm or you are on a consulting firm. What are the things that you’re delivering to your clients? Go back and look at your recipes, your statements of work, and say, okay, if I was going to just add AI to my things, what would that look like? How can I just improve my offering? If I was just to AI enable. Many of us have some type of maturity level, some type of tiered offering with our clients, could you take your top tier and introduce AI to it bigger and more advanced? Or conversely, could you introduce AI to your basic tier and make it more palatable for your prospects and clients and thereby lowering your cost of delivery and acquisition? And I would just start there. So build a simple spreadsheet and go through and that’s how you start to frame out a strategy. Don’t sweat about whether or not you got the right tools or not. Start off with something simple like ChatGPT or Bard, which are conversational and generational. Don’t get some. I mean, there are literally since the time you and I talked about doing this podcast, there’s been 500 applications that have hit the market, but only in the last month or so. But a lot of them are crap, you know, and a lot of them are just small little widgets. Don’t get to fall into that trap of getting consumed. Like you’ve got to go out and buy all this stuff. That’s not necessary. Use the free stuff.

Greg Alexander [00:13:15] If you think back to the two previous key changes of your career, the Internet, the smartphone, and now this. What did you with retrospection now, what did you learn from those two previous major moments that you think you can apply to this moment and allow you therefore to take advantage of this moment, maybe more than you did the previous two?

Jeff Pedowitz [00:13:36] Well, as an investor, I definitely wish I would have added that on some of those .coms, not the ones that last, but the ones that I really I, you know I think that I would have gotten involved sooner and incorporated it even much faster in the business. Well, the benefit of hindsight, I think, always makes us all more prescient. But in light of that. I reflect back on the earliest part of my career, I did not understand truly what the Internet was going to become. I had no. I mean, again, this is we’re talking early nineties, mid nineties here. There was no Google, no SEO. We had dialing with AOL and.

Greg Alexander [00:14:18] No one had any.

Jeff Pedowitz [00:14:19] I decided to hear that we got mail. So I’m certainly not going to claim I mean, certainly with the revision I could be a futurist, but at the time, no, I didn’t know. But I think I would have embraced it more and seen seeing where it’s gone. Same thing with a smartphone. I mean, when I first came out, I was I love my BlackBerry like everybody else. I was just like I was reluctant to switch over and what actually got me to do it is a good friend of mine, Dave Lewis, owned a rival firm. We were at some conference up in Toronto and he was showing me all the stock prices of his clients, his public clients that he was helping since he got involved on his smartphone. And I thought that was just the coolest thing, you know what I mean? Basically saying, Hey, what’s going on? Since we got involved this is what my clients are doing. So I went out and got the phone the next day, haven’t looked back. Yeah, but even then, you know, this first couple of years, you think about us here in the States, we would not even think about using it for banking. I know. And working out. I’m not going to have my information out there. I still got to go to the bank like everybody else and deposit my checks. But today, do any of us think twice about just aiming our phone somewhere? Those of you that are listening, I’m like aiming my virtual phone here. Now. I mean, so it’s changed, you know, we get it and it’s proven over and over again that as consumers, we will trade privacy for convenience. Yeah. So at first, what we’re reluctant to until we realize what we’re ever afraid of. So, yes, I mean, the concerns out there right now are real. And I don’t mean and I don’t want to minimize it in any way. I mean, there are definitely ethical concerns. There’s definitely a built in bias to some of these systems and tools. But that doesn’t mean that they still can’t be highly productive. And you just you know, you exercise with some common sense and some caution but today’s fears will be abated by tomorrow’s gains and productivity and the things that we’re going to be able to do because of AI are going to be mind-blowing. In fact, just like I mean, even though I’ve thought about a lot of things, there are so many things that we haven’t even possibly contemplated yet that are going to happen in the next 2 to 5 years because of this change in technology. And that’s the great thing about the human race, is our endless ability to create and to innovate.

Greg Alexander [00:16:33] Yeah, I agree. I mean, if you just think about the health implications of what we’re going to be able to do medically because of these tools, I mean, it’s amazing. And I’m with you. I think the the pros outweigh the cons tremendously. Okay. Well, we’re out of time here. So, Jeff, thanks for being here. Give us the name of the book again, because by the time this airs, we should be able to buy it. And I’m assuming you’re going to sell it on Amazon.

Jeff Pedowitz [00:16:55] You got it. The AI Revenue Architect.

Greg Alexander [00:16:58] Okay, very good. So I encourage everybody that’s listening to this to pick up a copy of that. Jeff is a qualified author, to say the least, so I’m sure it’s well-researched and well-written. Couple other things for you. Obviously, members, you should make sure you attend the Q&A session we’ll have with Jeff when that gets scheduled. You can ask your AI-specific questions to him at that point. If you’re not a member, of course I encourage you to do so. Go to Collective 54.com and apply and one of our reps will get in contact with you. If you want some more content, check out our newsletter Collected 54 Insights. You can find that on the website. And of course our book is called The Boutique: How to Start Scale and Sell a Professional Services Firm. You can find that on Amazon. But until next time, I wish you the best of luck as you try to grow, scale and exit your firm. Take care.

Episode  122 – How to Discover Why You Are Losing Deals, and What to Do About It – Member Case by Brady Jensen 

Win/Loss reviews are a powerful way to improve your sales results. Yet, most members are not doing them because they incorrectly think they are hard to do and require lots of time.

On this episode, Brady Jensen, Chief Executive Officer at Aggregate Insights, an expert in win/loss reviews will give members the method, tools, and templates to allow them to do this correctly, quickly, and cheaply.


Greg Alexander [00:00:15] Welcome to the Pro Serv podcast, a podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community dedicated entirely to serving the needs, the unique needs of boutique pro serv firms. My name’s Greg Alexander. I’m the founder and I’ll be your host today. And on today’s episode, we’re going to talk about win-loss reviews, what they are, why you should do them, how to do them, how to systematize them, etc. And we’ve got a great guest with us today. His name is Brady Jensen. And Brady really is an expert. And that’s, in fact, this is what his firm does for a living. And he’s going to share a bit of his wisdom with us. So, Brady, welcome to the show. It’s good to see you. Would you please introduce yourself to the audience? 

Brady Jensen [00:01:10] Sure. And thanks for having me, Greg. Yeah. So my name is Brady Jensen. I’m the founder of a company called Aggregate Insights. The way that we think about what we do for companies is we help them look before they leap. Folks oftentimes make decisions about how they’re going to operate, their strategies, their tactics, without considering what they don’t know about their market. So we help companies get a window into their market by helping them understand what their buyers want, what folks who have decided to either purchase or not purchase their solution. I think as well as generally understanding the market, the players, the positions, and messages taken by others in the market as well. 

Greg Alexander [00:02:03] Okay, fantastic. So we’ll talk about win-loss reviews, a subject I know is near and dear to your heart. So let’s start with the basics. So what is a win-loss review? 

Brady Jensen [00:02:14] A win-loss review, from my perspective, is all about taking count on what has actually transpired in your sales processes. So you may be a singular person selling at a firm. Maybe you’ve got a sales team no matter how small or large you are. There’s information that prospects want you to know, and there’s information that they don’t want you to know. And that really perpetuates all the way up to the decision that’s being made. And in many cases, also any sort of postmortem calls you may have with these folks that you’ve built or you build a relationship and reputation with them over time. And people also just don’t like to deliver bad news. So this is all about. Thinking about why you win. Why you lose. What the decisions that go your way look like. What the decisions that don’t go your way look like. To help you understand everything from what’s happening competitively in your market to “Is my message landing with my ICP?”.

Greg Alexander [00:03:19] Okay. And since you’re a member of Collective 54, you know about our membership. So why should a member of Collective 54 care about win-loss reviews and invest the time and effort in conducting them? 

Brady Jensen [00:03:35] I think it’s one of those things where. You can fool yourself into thinking that you’re really busy because you’re taking actions in ways that you think will move the business forward. And it’s often very hard in a fast-growth environment to take stock of what’s happening. Are you actually investing the resources, energy, time into putting yourself out there in the market in the right way? Or are you encountering all these headwinds when they when they’re completely unnecessary? If you do make the conscious decision to look back and understand why you’re either winning or losing and the direct result of that should be if you’re doing it right, is a direct lift in your overall win rate as well as shortening sales cycles. 

Greg Alexander [00:04:32] Yeah. Okay. Very good. And let’s talk about the how, how do you do them? So one thing you’ve educated me on is there’s a certain way to ask questions that make these things productive. Tell us a little bit about, you know, how win-loss interviews take place. 

Brady Jensen [00:04:49] Yeah. So there are a number of theories on how to conduct these best from my perspective after a lot of. Attempts at-bat to do these. We’ve landed on a process that looks somewhat like a jobs to be done. Interview. Clayton Christiansen Harvard, I believe, came up with this way to really think about what the jobs are that an individual or an organization are trying to do that they’ve hired any product to do for them. So we actually use that a modified version of that to talk to our customer because we think it’s just as important to understand what is that first thought that made you think we need to solve some problem? How did you go about evaluating when you were actively looking and considering options? The purchase decision? Obviously you get down to the brass tacks of everything from – Why did you decide to look now? Was there a point that it was clear to you that this solution was either for you or not for you? Understanding everything from outside parties like like references that may also play a part in whether a decision happens or not. So the front part of our guides on this really focus on that type of information. Then we start to understand more around product perception, the competition, and ending with some open-ended questions that allow folks to sharea advice or feedback to the team on items that we didn’t even ask a question about. 

Greg Alexander [00:06:45] And when is it best to conduct a win-loss interview or interviews, and how often should they be done? 

Brady Jensen [00:06:53] Yeah. So from my perspective, you’ve the, the, the sooner the better. Right. People’s memories tend to fail them over time. And even the way they remember certain events may shift over time. I tell clients all the time that what we are seeking is not the truth, but the perception of the truth from your buyer. 

Greg Alexander [00:07:19] Yeah. 

Brady Jensen [00:07:20] It’s very hard to one man’s truth isn’t all that helpful, especially when you’re using your internal truth to decide what it means and the perception of your buyer. Perception is what buyers have to go off of when they make decisions that they make. So how often we tend to do them from a client perspective, we have clients who are doing them every, every quarter. That’s what our recommended recommendation is as far as cadence is concerned. If you have the deal flow to be able to do it ten, 15, 20 interviews a quarter if you can, if you don’t have that deal flow, I think a good number to shoot for is a best case. If you go after three losses, you’ll probably get one out of every three that’s willing to have that conversation with you. So sometimes you’re restricted just by the number of overall deals that you’re going through in a given quarter. But that’s normally what we recommend is a quarterly cadence where each quarter we do an analysis on what we’ve seen as well. Combine that with the information that we have learned over time about them to be able to create some historical context as well. So yeah, every quarter up to, you know, we have even larger clients that are probably up 15 to 20 a quarter. There’s some time or cost constraints to doing these, but that tends to give you a pretty good view. 

Greg Alexander [00:09:02] Yeah, okay. Sometimes our members, when I advise this and I think it’s a best practice, I’m not sure how somebody can run the firm without it, to be honest. They say, well, we have a really hard time getting people to talk to us because we haven’t lost a deal per se. It’s just been delayed. It’s the project that went away. But the reality is a project never happens many, many times. So. So what’s your response to that? Maybe not a loss, but something that just kind of is in perpetual delay? 

Brady Jensen [00:09:34] Yeah, I mean, it’s interesting. We actually catch oftentimes catch prospects in this environment where all of a sudden a conversation with us actually causes them to reengage. Right. It’s delayed. There’s not a whole lot of clarity as to what the next step is. Recognizing that a deal that is near zero at the moment is not going to automatically spring back to life. A lot of times, having that conversation with them may modify it slightly to be a little less direct about the ultimate decision versus where their head is at. But it is surprising how many folks who will tell us, yeah, we’re still considering it’s still a great opportunity to engage with those folks. And surprisingly, they’re there. They’re quite willing to have those conversations, even if you think, “Oh, well, they think we’re still in the sales cycle”. First off, they probably don’t think you’re still on the sales cycle. They’ve pushed you off for six months or whatever. But even if they have, we’ve had real success getting those folks to engage with us. 

Greg Alexander [00:10:45] You know, and sometimes I hear from members that they don’t do this because they tried and they couldn’t get anybody on the phone. And normally that’s because that’s not what they do for a living and they don’t know how to get somebody on the phone. But the people that are attempting to do this and they’re getting stuck around responses. What recommendations do you have for them? 

Brady Jensen [00:11:06] Well, I would say treat it like a continuation of your sale. Right. Like when we reach out to folks, you’re probably not going to get a great response from that first message or response rate from that first message. It’s all about having some consistency. Continuing to follow up with them. I will say first, we spent a lot of time trying to get these done for no cost at all. You will spend more time and effort trying to get these folks on the on the line for a free call as it would cost you to give them some sort of minor compensation. In many cases, that’s a donation to their favorite charity. In some cases, their favorite charity might be themselves. That’s fine. But as far as that goes, we’ve found that some especially for the losses, the wins, the wins in most cases don’t require any. Right. They have a relationship with you now, but the other folks have decided not to have the relationship. And in most cases, you’ll burn through a lot of time and effort trying to do it the cheap way versus saying, you know what, let’s find an opportunity to provide them some sort of honorarium or donation to charity. Yeah. 

Greg Alexander [00:12:29] And let’s say somebody is going to do it and they get to these, you know, five, ten, 15, whatever it is, a quarter, what do they do with the output? 

Brady Jensen [00:12:38] I think it’s all about what can you actually bring to life. So there are different schools of thought when it comes to win-loss. I think a lot of programs that I’ve seen sort of end at the here’s the data stage. From my perspective, whether your internal external to the organization, your goal is to connect the dots across these different experiences and find the combinations of data that start to tell a clear story. That is true. All right. We’re not trying to come up with things out of thin air, but it is about connecting those dots and formulating a clear point of view of. Here are the things that are spiking that we’ve never really heard before. Here’s the things that we continue to hear. What does all of this mean? Right. Establish a point of view and then it clear why it matters or those sorts of things. And then it becomes pretty clear at that point, just understanding from a strategic level to then assign out work to responsible parties and win lost. In many cases, it’s going to touch product leaders. It’s going to touch sales leaders, can touch marketing leaders, and making sure that you have all of those folks on your side and playing ball with you is important because ultimately getting anything done in this stuff, I don’t think it’s all that helpful to say, okay, here’s the sales reps, here’s all we learned about why you won or lost last quarter. Right? They’re not at the, they’re not at the pay grade to make the types of sweeping changes that would really move the needle in any significant way. So it’s all about sort of that buy-in as well. 

Greg Alexander [00:14:30] Awesome. All right. Well, listen, we’re at a time window here, but I’m really looking forward to the private Q&A session We’ll have with the members one of our upcoming member sessions on Friday. And I’m sure they’re going to have a million questions for you, because I think this is something that people need to do. There’s a perception that it’s a ton of work. You’re going to share some templates and tools and things like that to make it easier. So really grateful for you sharing your wisdom with us today. Thank you so much. 

Brady Jensen [00:14:59] Sure thing. Thanks for having me. 

Greg Alexander [00:15:01] All right. So for those that are listening here, let me give you a few calls to action. Some members attend this session with Brady. Will get those invites out to you. If you’re not a member and you’re listening right now and you want to meet cool people like Brady, think about joining. You can fill out a contact us form on the website and one of our reps will get in contact with you if you want some more information, more content. I should say two things I pointed to. First is our book, The Boutique How to Start Scale and Sell a Pro Search firm can find that on Amazon. Or if you’re if reading isn’t your thing and you like videos and podcasts and charts and things like that, consider subscribing to Collective 54 Insights. And that is our weekly newsletter. And we push out three pieces of fresh content every week. Okay, Thanks for listening. And until next time, we wish you the best of luck as you try to grow a scale and someday exit your professional services firm. 

Episode  121 – Data Strategy: How Boutiques Can Get a 360 Degree View of Their Business  – Member Case by Aron Clymer

The average boutique pro-serv firm is using 10-15 SaaS applications yet none of them talk to each other. This makes it hard to get a true 360-degree view of your firm.

On this episode, data warehousing expert and member Aron Clymer, Founder & CEO at Data Clymer, will show members how to solve this problem easily, and cost effectively.


Greg Alexander [00:00:15] Welcome to the Pro Serv podcast, a podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, we are collective 54 and which is the first mastermind community focused entirely on the unique needs of scaling professional services firms. My name is Greg Alexander. I’m the founder and I’ll be your host today. And on this episode we’re going to talk about running your firm on data and the importance of having a 360 degree view of your business. Many of our members are struggling with this. We’re creating more and more data because we’re all using a ton of SAS tools, but unfortunately sometimes they’re not well connected and we wind up one day with a mess. So we’ll try to talk about that a little bit. And we have a great role model with us, Aaron Clymer. And in my opinion, Aaron is a unique individual in that his background has solved this problem problem for many, many years. And he is a kind of data warehousing expert, if you will. So we’re lucky to have him. So, Aaron, it’s good to see you. Thanks for being here. And would you introduce yourself in your firm, please? 

Aron Clymer [00:01:30] Yeah. Thanks, Greg. It’s great to be here, too, with you. Thanks for inviting me to the podcast. So, yeah, I’m Aaron Clymer, founder and CEO of Data Climber. We are a company that helps and helps our clients, mid-sized clients, usually some small size as well. Solve that problem of not being able to make decisions quickly based on data. So just being able to have all our data at their fingertips to answer all of their questions quickly. We do that by implementing modern cloud data systems, which entails a series of vendor solutions that we put together to work in concert to enable this this capability. And the idea is to have self-service analytics at everybody’s fingertips in the organization. 

Greg Alexander [00:02:13] Okay. So let’s talk about the realities of our community. So I’ll describe a use case and then you can kind of take us through data warehousing one on one, if you will. So it’s very common for our members to be running a lot of their business office spreadsheets. The financials is typically QuickBooks. They usually don’t have a PSA tool installed. Some might have some type of CRM tool, HubSpot, Salesforce or something along those lines. They all have kind of a, I don’t know, advanced use of Microsoft tools, you know, some shared drives, things of that nature. And they’re very frustrated by this. I mean, like I’ll ask the question, what’s your most profitable clients? And their answer is a guess. Or if they answer it definitively, I double click on the answer. And the underlying process upon which they calculated profitability probably wasn’t accurate. And when I say, you know, why are you running your firm this way, they say, well, you know, I’m just overwhelmed by this. I don’t know what to do. And I can’t truly get a 360 degree view of my business. One additional wrinkle that I’ll throw into the mix is many of them often use fractional resources. So a fractional CFO or fractional technology MSP, something along those lines. And those firms have their own systems that they need to get access to data to. So if that’s the starting point and I hate to be so grim, but let’s start there if that is the starting point, you know, how do I get myself out of this mess? 

Aron Clymer [00:03:51] Yeah, yeah. And believe me, I’ve been there as I’ve grown the company myself. Of course, you know, it it just takes a little bit of education on, you know, some of the solutions that are out there and ways to do it. The good news, it’s night and day, much, much easier relative to ten years ago, I would say even five years ago. The other thing I like is that most of the the tooling out there that we use is, you know, the pricing is based on usage to a large extent. So if you’re not if you’re a small company, you’re not using much, you know, your bill isn’t isn’t so big. And as you grow, you you scale and your costs follow you as you grow. So that’s kind of a nice model even for a small business. But at a really high level, there’s three components to getting this done. You know, you’re running your company, all of us are running our companies, like you said, on multiple SAS tools. I’m probably running on at least 15. And you you can’t analyze data from one system to another system. Very rapidly right now if you don’t have a data warehouse. So you need to get a data warehouse, and that’s a central place where you’re going to put all this data and be able to then get answers quickly and join it together in in ways that make sense for your business. So you get a data warehouse to do that, you have to build some data pipes that pipe data into that data warehouse, and then you’ll need some sort of data visualization exploration tool that allows you to easily interface with this data, ask questions. You don’t have to be technical at all to use these tools. That’s the beauty of it. And any business user with just a little bit of training should be able to ask at least some of the simple questions, like you said, like profitability of of clients. So those are the three pieces a data warehouse, some piping in and then a visualization tool to be able to to ask questions. 

Greg Alexander [00:05:36] Okay. So Professional Services has had a long history of owners asking their employees to enter data. It could be timesheets, it could be forecasting sales opportunities, any number of things. And the employees absolutely hate doing it because non billable administrative time. So they either don’t do it or they pencil whip it, so to speak. And it’s garbage in garbage out issue. So I guess what are your thoughts on that and how do you get employees motivated and compliant with entering data into a centralized data warehouse? 

Aron Clymer [00:06:13] Are you referring to data that can’t be gotten from any other means, or is this a sort of duplication effort of data that already exists? 

Greg Alexander [00:06:22] Well, I mean, the most obvious one is timesheets. So in professional services, people build for their time, so they have to issue timesheets internally. And that’s the way that many firms are run and they don’t want to track their times. That’s just one example of many. But so either don’t do it, so therefore there’s no pipe, there’s no data to go to the data warehouse or they do it and it’s sporadic or inaccurate. And then this data warehouse is populated with junk. 

Aron Clymer [00:06:47] Got it. Yeah. Well, first of all, in that case, I highly recommend going ahead and buying some technology just to solve that problem if you can. You know, they’re not they’re affordable and they’re accurate. And then you have all of this wonderful data to then calculate in the case of time tracking that’s critical or calculating some KPIs that we all want to look at, like utilization, for instance. Right? So to get that right and to get it to be able to look at utilization every day, if you’d like to trend it over any timeframe, you want to, you know, sliced by any number of employees you want to or, you know, there’s lots of ways to look at utilization. And if you have all that in a time tracking tool and you get that in your data warehouse, you know, it’s just effortless almost to then start analyzing your utilization and seeing trends. 

Greg Alexander [00:07:34] Okay. And this data warehouse that sits, I guess, in between all of these disconnected SAS tools and my understanding that correctly. 

Aron Clymer [00:07:41] Yeah, that’s exactly right. And let me extend the example just to make it clear why why you need a data warehouse versus the SAS tool itself. So first of all, you could calculate utilization in your SAS time tracking tool, right? And all these tools come with some sort of analytics. But 99% of the time, those analytic capabilities are actually not great. They’re really hard to understand and they’re not intuitive, they’re very limited. You can’t just calculate any KPI you want often, or you might not be able to calculate it in the way you want to calculate it using your formula. So that’s one thing, getting it into the data warehouse and then having a tool where you can calculate anything and do anything with your data is one thing. But even more importantly is that let’s say you want to create a customer or a client dashboard for all of your clients and just look at, you know, everything you want to see in a nutshell with the client. Well, utilization will be obviously one KPI you probably want to put on there and maybe some more information. Maybe average hourly rate might come out of your time cards as well. But as soon as you need information from your CRM system about what industry is that client and you know, other firms, graphics, other, how many statements work have you had with that client? What’s the history of that that’s in your CRM, right? So that’s somewhere else. And so it’s, you know, having it all together and showing it on a single dashboard, which you can do once you have the data from both those systems and your data warehouse, that’s where you get the real power. You can start just adding, you know, all of your data and that’s how you get that, quote, 360 degree view of your client in this case. 

Greg Alexander [00:09:10] That is a good visual for us to think about that. When you mentioned these affordable, easy to use data warehousing solutions, any particular applications you recommend our community to check out? 

Aron Clymer [00:09:22] Yeah. Yeah. So that’s another thing I love about being in services is I feel like we can just pick and choose the best technology out there and go with those, those vendors and we can enlist. Honestly, come to our clients and say, Look, we’re going to choose the best in class technology for you and your circumstance, for your, you know, for your use cases. We have chosen to partner with Snowflake and Databricks or to to nice one snowflake really leading the pack. They’ve really just exploded in the last five years across the market. And pretty much any any company looking at a data warehouse these days will know of Snowflake because they’ve become so popular and that’s because they’ve really solved I mean it was a it was a huge leap forward in innovation when they came on the scene when I was doing data warehousing ten years ago at Salesforce on an antiquated Oracle data warehouse that frankly was kind of a nightmare to maintain. And there’s all sorts of limitations. I mean, that wasn’t that long ago, right? But five, five, four, three years ago, all of sudden, Snowflake came along and they solved all of the technical headaches with doing data warehousing. So now you just focus on your business, like scaling is indefinite computers and you know, you don’t run out of resources, so you can throw as little or as many people on top of the system and you know, it’ll run fine. And so you can just focus on, okay, what they you want, what are your KPIs, you know, what sort of stuff do you need to analyze? What kind of questions are you asking? And it just moves forward. So Snowflake Databricks and then there are a lot of popular BI tools that a lot of the listeners probably aren’t using today to some extent, like maybe Tableau Power BI is extremely cost effective at first, so Microsoft can really get you with their BI tool, that’s their their analytics tool. But there’s some really nice modern, very cutting edge for cloud, which we would always recommend tools like Sigma computing. They have a spreadsheet interface BI tool. So if you know how to use a spreadsheet, you know the interface is familiar, but yet you can be querying, you know, billion or multi million road tables under the covers and it just works just fine. And actually and I’m not, not, we’re not promoting them in all necessarily but just last week they came out with this amazing feature I’ve never seen in any BI tool in my entire career and that is get back to your original question entering data. You know, all these tools for decades have been read only they’re just to consume your data and visualize it. And, you know, look for look for interesting information that you can then action on. Well, there’s always use cases where you want to enter data. I mean, sales forecasting is a very typical one, right? You may want to see your sales trends for the past two years monthly, and then you want to enter your forecast for the next two quarters, you know, next six, six months maybe. Well, you can never do that in one tool with by a tool. But but Sigma computing, it just recently made that available as a feature. You can literally be looking at your spreadsheet with your report and then just type in your predictions and it’ll save that back in your data warehouse and then you can analyze all that together. So I think that’s actually revolutionary and it just shows how this is space is becoming more and more something that drives your company and you operate your company on top of this data rather than just internal reporting. 

Greg Alexander [00:12:36] And what would you say to a member that’s listening to this right now saying, I get it, you know, I wish I was there, I’m growing at 30% a year. I’ve got bigger problems than I can just limp by on my kind of bootstrapped approach to data. What would you say to that person? 

Aron Clymer [00:12:56] Now I’d start with just to try to add up the cost of all the time you spend doing that and start to get into essentially an idea of how much this is costing you. I think that you’ll find that it’s worth the effort to try to migrate, if not now, soon, because it just adds up quickly. And as you get to a certain size, you then you realize you have a pretty big problem on your hands and it’s even more costly to get off of these manual processes down the road. So it’s it’s easy to get started. These tools are up. You can install it in a day and get going. You know, not saying it takes a day because it takes months to do it to it, to really do it right. The technology is simple. It’s more just the methodology and they approach that most of most founders will need help with. 

Greg Alexander [00:13:43] You know, and at the time of this recording, which is April 20, 23, you know, we’re all kind of awestruck by the power of artificial intelligence, in particular chat. Maybe share with us where you think the future of all this is going and how I might play a role for us. 

Aron Clymer [00:14:02] Yeah, that’s that’s a super fascinating. I’ve been thinking a lot about that. I’m actually going to speak at a couple of conferences this year with the title of How A.I. is Impacting Data in My World, and it’ll probably change dramatically between now and three months when I’m giving the talk. Right. But but what I what I’ve seen is that, you know, things like chatbots are, of course, super helpful and impactful right now. They can do a lot to help us. Our data engineer is actually just check some check some code, actually figure out how to do some complicated things with code if they don’t know how to do it right away. The probably the biggest challenge though, with AI in general and data is that data just like maybe it’s analogies to human language, but data needs to be very specific. And so often these models, these element models like chatbots won’t get it right. And if they can’t get it right, even, I mean, 100% of the time, you don’t want to rely on that for your business necessarily, Right? So there’s going to be it’s going to be a while before all of this stuff can be fully automated with A.I., But A.I. now is doing some really helpful things. It’s dramatically speeding up the time to implement some of these systems because it can give you a first cut. Yeah, what I would suggest for like a data model or how you’d want to organize all this stuff, and then you go through there and you make sure it’s, you know, it’s got your I’s and cross your TS and make sure it’s all correct. Then you deploy it business. Yeah. So it’s expediting some things. Yeah. 

Greg Alexander [00:15:33] It might take years. It’s just going to continue to get better and better. So some of the things we talked about today, which would be the building blocks for something like that, I mean, that should be creating urgency in all of us to get going on having, you know, better data running our business on data because the advancements that are coming are going to be exponential. All right. Well, listen, I’m really looking forward to our upcoming Friday Q&A session with the members. You know, I’ve got like 100 more questions I want to ask you, but we try to keep these things tight to 15 minutes or so. So for those that are listening to this members in particular, I encourage you to register for that event. When you get scheduled with Aaron, then you can ask your questions directly. But until then, Aaron, I just wanted to thank you for being here on behalf of the members. We learned a lot today. We’re very lucky to have you in the community. This is an important thing for all of us to get correct. So thank you for giving us your wisdom today. 

Aron Clymer [00:16:26] Well, thank you. Appreciate it. Great to talk to you. 

Greg Alexander [00:16:28] Okay. All right. And a couple of calls to action for listeners. If you are interested in meeting great people like Aron, consider joining Collective 54. You can find that on our website. Fill out a contact us form and a rep will get in contact with you if you want more content. Maybe not ready to join, consider subscribing to collective 54 insights. There you’ll get three things every week. A blog on Monday, a podcast I’m sorry, a video on Wednesday and a chart of the week. Speaking of data on Fridays. And if you want to get more longform content, check out our book, The Boutique. How to Start Scaling Sell a Professional services Firm. You can find that on Amazon. But thanks for listening today. And until next time, we wish you the best of luck to you. Try to grow, scale and someday exit your boutique pro serve firm.

Episode 120 – How a Consulting Firm Embraced Trial and Error When Building a Sales Team – Member Case by Scott Arias

Building a sales team inside of a consulting firm is hard. However, it is a requirement if a firm is going to scale beyond a Founder-led lifestyle business. Adding to the difficulty, is the need to go through an expensive and time-consuming trial and error period. It takes patience and many experiments before a firm figures out what works for them.


Greg Alexander [00:00:15] Welcome to the Pro Serv podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. If you’re not familiar with Collective 54, with the first mastermind community dedicated entirely to the unique needs of leaders of boutique pro firms. My name is Greg Alexander. I’m the founder and I’m going to be your host today. On this episode, we’re going to talk about redefining business development. A lot of us are in the process of re-engineering how we go to market, so to speak, and this is going to be a timely topic. We’ve got a great role model with as someone who’s just recently done this successfully with some outstanding results. His name is Scott Arias. Scott, great to see you. Welcome to the show. And please introduce yourself. 

Scott Arias [00:01:04] Yeah. Great guy. Great meeting you. And. My name is Scott Arias. I am the founder and the CEO of a consulting company, and we’re a boutique Professional services. It basically provides services company that works for the government. 

Greg Alexander [00:01:27] Okay. And tell me a little bit more about the types of services that you provide. 

Scott Arias [00:01:33] We have four main services. The first one is pre-construction services. That’s plan schedules, that type of thing. The second one is security services. We provide field staff for embassies and actually they’re kind of interesting. We got into Amazon nationally, companies like that. And then the the third section is skilled staffing. We we don’t only do the pre-construction plans, but we staff the management positions on a job. And the fourth sector is training. And it kind of goes back to my history because I was a college professor once in my past life. 

Greg Alexander [00:02:13] Okay, very good. So we’re going to talk about redefining business development. And the team gave me some numbers today about your business. And I’m going to go over them with you because they’re absolutely mind blowing. And I want to hear how you did this. So I understand that you added almost 100 new clients in 2022. Is that correct? 

Scott Arias [00:02:31] That’s correct. 99. 

Greg Alexander [00:02:32] Wow. My gosh. That’s amazing. You’re up over 5000 clients now and you’re getting about 80% of your business from repeat purchases. Is that also correct? 

Scott Arias [00:02:43] That is correct. Yeah. 

Greg Alexander [00:02:44] I mean, so those numbers would suggest, you know, what you’re doing in the business development space. So I understand that you recently kind of redefined it. So maybe we can do a little before and after. Let’s start with the way you used to do it. Tell me about the changes that you’ve implemented and tell me about the way you’re doing it now. 

Scott Arias [00:03:03] Well, you know, when I started the company, I you know, it was just me. So I decided, you know what? I’m going to start, you know, emailing people directly. You know, so I, I found a government website that publishes all the solicitations for the U.S. government on federal construction projects. So I just started emailing about 50 people a day. And then so I did that. I say 50. But then after the first month, I didn’t get anything, so I doubled that. And then I went to next month, didn’t get anything, so I doubled that. And then it took me nine months to get my very first client and I was actually on the verge of quitting. Wow. And and so I got my first client and it was just email campaigns, essentially, you know, to find work. And that evolved over time in the first five years, you know, And it’s not you know, people ask me all the time, well, how did you come up with, like your core values that kind of lead to the success of your company? And I say, well, I didn’t just sit down and write them. It was just kind of who we were at that point. So after about six years in the company, I just, you know, I asked myself what after I visited iOS presentation Entrepreneur Operating Systems, and I thought, what are what are we really do that bring clients to us? And then we keep clients. And so we developed these three core values. We call them RUG. It stands for Do the right thing, have urgency and be the gold standard, because that’s what we were, you know, we did things in urgency. We’d get it done overnight. We stay up all night long. We always did excellent work to help the contractor and we always did the right thing. If we felt like we made a mistake, we owned up to it. And then with that kind of formula, we not only just, you know, got new clients, we kept the existing clientele. And when I say 80, it’s probably close to probably over 90 because many of our services are repeat services, because they get done with the job and then they get another project. Yep. 

Greg Alexander [00:05:21] Okay. And then this this redefining of business development in particular, meaning sales and marketing. The team explained to me that you experimented with different approaches and you recently went through some kind of redesign. Could you share a little bit of that with us? 

Scott Arias [00:05:37] Well, you know, I got we got to a point where our organization grew from me to probably about 120 people. 

Greg Alexander [00:05:44] Wow. 

Scott Arias [00:05:45] And and so, you know, we had played obviously, I was the business development. My background was I was a Navy recruiter. So I was used to being an aggressive salesperson, you know, And then that kind of transition away from me because I had to develop bigger relationships. So I had a somebody manage that process. So we thought at first, well, you know what? Maybe we don’t know what we’re doing and we should go out and get help. So we went and got, you know, we searched around for a company that would help with the business development and the marketing piece. We landed on a marketing company that actually does a pretty good job for us. Took a lot of headache off my shoulders. But the business development sector, after we went through it, we spent about six months. We realized that if we were better at it than they were and we knew what we were doing, we went through trial and error. We went through the school of hard knocks, so we knew what worked and we knew it did work. We knew where the target audience is, where we knew we knew our customer profile. So through that experience we realized, man, we look, we know a lot more than we give ourselves credit for. So we took that information and we separate marketing and sales. We outsource a portion of marketing. We do a combination of email campaigns, phones. You know, a lot of people think phone is dead, you know, but in the construction space, it’s not. So we we contact people. We have a person dedicated it all, all day long, every day to get us pre-qualified with different contractors via phone. And then we have two salespeople that are kind of going back to the other piece of marketing. My son is actually in charge of that sector. And he does the, you know, the filter and the thoughts and and sees who’s was awarded the jobs and gives hot leads and warm leads to our sales team and then they follow up and we have a couple of people who do do sales and I don’t really like to call sales because it has a bad connotation. But you know, the business development sector because we know once we get them in the door, our staff is going to knock it out of the park. And, you know, you can’t you can’t have a good business development and you can’t sell something unless your unless you’re really selling something of value. And that’s really what spring brings more work to us. 

Greg Alexander [00:08:21] You know, for those that are listening out there, something about Scotts business that’s a little different but makes business development more challenging, in my opinion, is that, you know, the government awards contracts and this is information that’s available for anybody to go find. So his process is to see, you know, who got the contracts and then reach out to those people and try to, you know, sell his services into those existing contracts. The problem with that is, a what makes it so hard is that everybody can see it. So it’s super competitive. I mean, there’s all kinds of companies sending emails and telephone calls because, you know, once you tell somebody, hey, there’s this $100 million project that just got funded and they need a company that can do X, Y, Z, and everybody that’s in that space is all over that and they flood them. So the level of difficulty is higher, in my view, in that setting. Now it is nice that, you know, there’s existing business to go after. You don’t have to kind of manufacture your own business, but it does take, you know, quite a ability to execute, to win. In other words, beat the bad guys. Scott Did I describe that correctly? And is there anything more to that process that’s that’s worth discussing? 

Scott Arias [00:09:30] Well, you know, you’re you’re right about our field portion of a reconstruction portion. And but for security services and training, it’s a lot more like we’re developing that. We’re work responsible. Well, our our business developing process is not creating a need. It’s the need exists. It’s just fulfilling that need. Well, in the training space, the security space, we have to go out there and get it. And that’s a that’s a little more difficult. And honestly, we struggled with that because it was out of what we were used to. But I think we’ve got a good process in place now. 

Greg Alexander [00:10:06] Okay. You mentioned you went through this trial and error period. How long did that last? And and when did you know you really hit on the winning formula? 

Scott Arias [00:10:18] Well, I believe that process equals success. So you can’t. And so we constantly go through an evolution. We get a process in place. We execute. We come back and look at the process. And I’m talking about every quarter, you know, we’re giving now our decision may be, hey, it doesn’t make sense to change anything. We have enough time or maybe we know this doesn’t work and we go see. And so it’s a constant evolution of making your process bigger, better every time. And then when you’re companies growing like me or my company went from me and I made $7,000 my first year. So we’re going to be about 22 million this year. Wow. I mean, that’s that. And it went from me to 180 some other people now. So if we’re going to sustain that kind of growth, we I always tell people last year was a bad year for us. We made we only grew 27%. And and the truth is that we’re just hitting that every every year. We just continue to just just expand our services and do more and get more clientele and. Definitely can’t just sit back and wait for people to come to you. Yeah. 

Greg Alexander [00:11:36] You know, your your business story going from 7000 to 22 million, one person to 180 people is an amazing and inspirational business story. But you and I had a chance to chat and I learned a little bit about your personal story, particularly your military story. And that was equally, if not more so, inspiring. Would you mind sharing with our community a little bit more about your personal story and and how you how you went from this military career to this business career and the things that you deployed in your business career that you may have learned in your military career that has resulted in all of this success. 

Scott Arias [00:12:14] Well, I’m going to make a very long story very short. Okay. So unlike you do, Greg. No, I’m just joking. But I. I’ll play it back. Yeah, I, I so I, I grew up in Albuquerque, New Mexico, and my brother was in the Navy, so I joined the Navy. And the Navy fit me well. You know, I’m a little bit OCD, and so the military fit me well. The way they make amends, the way they fill their clothes. Anyhow, so I did multiple tours, went to then did a recruiting tour, did a tour at Camp David, did a tour in the Middle East during Operation Iraqi Freedom. Operation Enduring Freedom. So about my eight year mark. After I was promoted Chief Petty Officer, I got hit by a car head on. I was riding a motorcycle. My foot was was wasn’t severed, but it was a bag of bones. Not to be graphic or anything, but so they they basically took my leg that night. And then they I had went through another of what, four surgeries, ah, spent three months recovering and went back for another two surgeries, and I spent 11 months recovering. Ultimately, what Rig-i returned, returned me back to active duty service, was Carl Brashear, which is the guy from Man of Honor. If you’ve ever seen a movie with De Niro, he was the guy they made the story about. Very, very inspirational man. And then also Senator Trent Lott, which I was a senator from Mississippi. So they they interceded because the Navy told me no. And I and then after talking with Karl, I decided, you know, there’s another avenue, and that’s what I took. And so that taught me a very valuable lesson. Number one, persistence pay pays off. So when I was going through nine months of trying to find a client, I also remember the 11 months I recovered from losing my leg and go through prescription drug addiction. So, you know, that’s you know, so that was a very, very good lesson for me. Ultimately, I returned Baghdad to duty and went to the Middle East. Then, after being there for three years, I fell through an Iraqi oil platform, a bust up my leg pretty good, and then medevacked back to Walter Reed. And that ended my career. And then I went through multiple different I went through three different companies after I got out and seeking for purpose, seeking to do something greater than to make money, although money’s good, you know. So so I ultimately landed on opening my own company, and. And the rest is history. 

Greg Alexander [00:14:59] Yeah. Well, thank you for sharing that. God bless you for everything that you’ve done. It’s a great, great, great story. We’re so lucky to have someone like you in our community. I can’t wait for the member Q&A session. I’m sure they’re going to have lots of questions. But, you know, starting these firms is hard. It’s not nearly as hard as what you’ve been through personally. And but it’s great to see somebody like yourself being able to transition to a business career and not just go to work with somebody else, but start their own company and knock it out of the park. I mean, from 0 to 22 million in a short time period is pretty amazing. So again, on behalf of all the members, thanks for being here today. Thanks for sharing your story and thanks for being part of our tribe. 

Scott Arias [00:15:38] Sounds great. Great. Have a good day. 

Greg Alexander [00:15:40] Okay. All right. Couple of calls to action for those that are listening. If you’re a member, be sure to attend the Friday Q&A session with Scott. You can ask your questions directly to him. I think you’re going to get some value out of that. For those that are also running their business on EOS, like Scott is. We wrote an EOC Collective 54 integration plan. It helps you customize EOC to the unique challenges of running a boutique process firms to check that out. And then also, you know, if you’re interested in redefining your business development process, as Scott has done, a couple of templates in the resource center and in the companion courses, look for the marketing strategy template, the sales strategy template, and the account plan template. So hopefully that’s helpful. If you’re not a member and you want to meet really interesting people like Scott, consider joining. Go to collective 54 com fill out the contact us form and somebody will get in contact with you. We’re not quite ready to join, but you want to consume some great content. Subscribe to collect 54 insights and you’ll get three things every week. Monday you get a blog, Wednesday you get a podcast, and Friday you get a chart. Okay, So thanks for tuning in and listening. And until next time, good luck as you try to grow, scale and exit your firm.

Episode 119 – How a Brave Founder of a 20-year-old HR Firm is Reinventing Himself – Member Case by Tad McIntosh

Running a lifestyle business can lull a Founder to sleep. The days, weeks, months, and years pass by as you are “doing just fine”. Then, one day, you are in your mid-50s, and realize you cannot retire, and after all these years, you don’t have much to show for your life’s work. What then? On this episode, Tad McIntosh, President at HumCap, shares how after 20+ years he is trying to convert a lifestyle business into something he can scale, and sell, someday.


Greg Alexander [00:00:15] Welcome to the Pro Surf podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community focused entirely on the needs of leaders of thriving boutique serve firms. My name is Greg Alexander. I’m the founder and I’ll be your host today. And on this episode, I’m going to talk to you about becoming self-aware enough to realize that you’re running a lifestyle business and more importantly, mustering up the courage to attempt to convert it into something more than a lifestyle business. And we’ve got a great collective 54 role model with us today. His name is Ted McIntosh, and he runs a very successful firm called Hubcap. He’s been at it for 20 years, which is rather remarkable because most lifestyle businesses start and end in five years. So he’s lasted four times longer than typical, but recently he’s decided to try to make it more than a lifestyle business. So he’s a fantastic example of what it is that we’re going to talk about today. So, Ted, it’s great to see you. Thanks for being here. And please introduce yourself. 

Tad McIntosh [00:01:32] Thanks, Greg. My name is Tad McIntosh and I’m the founder of Humm. Our mission is to solve companies human capital problems in recruiting and human resources with excellence. And I’m a glad to be a member of Collective 54. And I’ve been learning. Learning a lot. 

Greg Alexander [00:01:53] Okay. And as I mentioned, you’ve been around, I think it was 22 years. 

Tad McIntosh [00:01:58] It’s I. Yeah. So we started that’s about right at 22. We started in the fall of 2001. Yeah. 

Greg Alexander [00:02:06] That’s almost 22 years. Yeah. 

Tad McIntosh [00:02:08] It seems like yesterday, but Yeah. 

Greg Alexander [00:02:12] So I’d love for you. Maybe just to start at 30,000 feet. And as you explained to me, you realized that you were running a lifestyle business a little while back and you’ve developed ambition and aspirations to do more than that. So what caused you, after all these years of running a successful business, to want to make a change? 

Tad McIntosh [00:02:31] Well, part of it. We are determined to deliver excellence and value to our customers for a long time, and that’s a good thing. So the customers and the community derives value, but in some ways I just forget about the pain that it is to give them that value for a long time. And some say a glutton for punishment and maybe a little bit of upbringing and then going to West Point for what? What should have been college. And then being an Army officer, you kind of you’re taught to be tough. Be tough, be tough. And finally, I’m like, well, maybe I maybe I shouldn’t be this tough and maybe this maybe this should be easier than what I’ve made it or allowed it to become. Might be the best way to put it. I have a lot of become difficult through some level of behaviors and some levels of lack of knowledge. 

Greg Alexander [00:03:28] When you say lack of knowledge, what do you mean? So this was your first entrepreneurial journey and you were learning as you go? 

Tad McIntosh [00:03:34] Absolutely. So I am a first time entrepreneur and and I’ve learned a lot about how to run a better company. But until I have been a part of collectivity for some of those things we lack, I have been what have been holding us behind for scale. So sometimes it’s like seeing it. Yeah, finally seeing it through a different lens. Is there certain attributes of what we’ve done that has helped us keep in business and deliver value, but have also kept us from scaling? Because in some ways we’re doing too much and to wider? Yeah, you know, wider markets and others not too much. Maybe not a niche enough. As you said, the riches are in the niches. Maybe I’m in too many niches or too wide a niche. Yeah. 

Greg Alexander [00:04:19] Okay. So Ted is graciously allowed to participate in an exercise with me today, and we’re going to use a tool that we have a collective 54 called the Tolerance Level Checklist. And this checklist is meant to gauge your level of tolerance and settling for a lifestyle business or maybe an intolerance for that and wanting to scale and remove the bottlenecks and, you know, develop a much larger business. It’s ten questions we’re not going to ask all ten. We don’t have time for that. You write each question on a scale of 1 to 4, one is acceptable. Two is somewhat acceptable. Three is somewhat unacceptable and four is unacceptable. And I’m going to ask Ted some questions. I’m going to ask him to rate it and then tell us a little bit more about why he rated it, what he did. So the first question I’m going to ask and this is one that’s going to be near and dear to everybody’s heart, is the question or the statement is I, I spend time on things I do not enjoy doing. So, Ted, how would you rate yourself on that? 

Tad McIntosh [00:05:31] I would rate it somewhat unacceptable because there are things that are, you know, second nature to me now that can be more easily done by other people. And in some ways it’s unacceptable because either the lack of having those people or enough team around me to do those things and it just gets boring. You’re doing the same something you learned 12 years ago type of thing. Yep. 

Greg Alexander [00:06:00] And this is very typical. So, you know, when you start your firm, you’re in those early years and basically you do everything and it’s not. It’s not. Intolerable at that point because it’s still new then. And then you wake up and this example 12 years later and you say Jesus is boring because you’ve been doing the same thing over and over again. And one of the things that’s required to move out of a lifestyle business into a scale firm is to build a team, delegate those things to the team, and then elevate yourself yourself up the value stack and keep your own intellectual stimulation alive by taking on new kind of pioneering work. Okay, so that was number two. Let me move to question number three, which is I rarely feel a sense of making meaningful progress on scaling my boutique. How would you rate yourself on that one? 

Tad McIntosh [00:06:46] And I’d say I’m somewhat acceptable there because the beginning of scaling our boutique is having a team around me, and I feel, you know better than I have in a long time about the team around me. And I’m finally knowledgeable that I have a big enough team in the different parts of our businesses, and I have a better viewpoint on investing back in the business on sales and marketing, which happened to be one of my strengths and in what entrepreneurial it feels like I’m overinvesting, but I’m actually based on what I’ve learned through the collective. I’m not overinvesting. I might still be under-investing. Yeah. 

Greg Alexander [00:07:25] So and that’s a great example for you because sales and marketing comes naturally to you’re really good at it. So you keep doing it, doing it, doing it, and you’re the sole right rainmaker in the organization, but there’s only one of you. So until you hire other rainmakers and build a rainmaking department, a sales and marketing department, the firm’s only going to get so big because as one salesperson, as opposed to five salespeople. And that takes a tremendous amount of self-awareness and courage to delegate something you enjoy doing and staying out of it, teaching others to do it and letting them do it. So that’s a great example. So I’m glad you make a progress on that. Congratulations. 

Tad McIntosh [00:08:00] And so it’s a work in progress, but we’re we’re on the road to success. 

Greg Alexander [00:08:04] That’s right. Yeah. I mean, this one’s one step at a time, right? And let’s go to question four. So I do not make enough money relative to my personal workload. How would you rate yourself on that one? 

Tad McIntosh [00:08:18] I think it’s unacceptable. 

Greg Alexander [00:08:19] Okay. 

Tad McIntosh [00:08:20] It’s partially because of how long I’ve been in the business and partially based on. It’s you know, you didn’t ask question one, but I was definitely unacceptably overscheduled. Right. And so that’s kind of part of the things I’ve got to help other people do those things that can be done by other people. 

Greg Alexander [00:08:42] And yeah. 

Tad McIntosh [00:08:45] Then I’ll make more money. Honestly, because other people are doing things they can do and I’m not doing things that other people can do without me. 

Greg Alexander [00:08:55] So for the listeners, there’s a concept called opportunity costs. I’m sure you’re probably aware of that, but in the context of what we do. Being an entrepreneur is hard. Being a founder of a boutique processor firm is hard, scaling. It is even harder, and you have to measure your effort and reward in relation to what your alternative path may been. So, for example, it probably would have been easier for Ted to stay in the military and he could have had a career for years and years and years and rose up the ranks. And that would have had a certain profile, a certain level of effort, you know, typically measured in hours per week and a certain financial reward, which would have been, you know, an annual salary benefits and a retirement plan. And you measure that effort slash compensation package of that journey versus the journey that he’s on. And if there’s a gap there, that’s the opportunity cost. And the problem with opportunity cost, the delta between what you’re doing today and what the alternative path would have been is that it compounds over a number of years. So as we suggested, you know, Ted’s been at this 20 years plus. So if there is an opportunity gap and opportunity cost excuse me, it’s whatever that gap is times 20 and the numbers add up. So you constantly have to make sure that. You know, the juice is worth the squeeze. They say the squeeze is worth the juice. I think I got it the other way around. Is that your workload, your personal workload is proportional to the reward, the compensation that you’re making. And there’s really only two levers to pull there. One is work less and make the same amount, and you can have a hell of a lifestyle doing that or work more. But if you work more, you’ve got to make a lot more to justify the level of effort. Those two things need to be in proportion, and when they’re not is when you know somebody who’s happily running a lifestyle business wakes up one day wanting to retire again and they say, What happened? And then they realize they can’t work into the graveyard. You know, they don’t want to work 60 hours a week when they’re 70. And and the problem is, if you wait too long to get to that point, you just can’t flick a switch. It takes a while to build teams, delegate work, build repeatable processes, etc. So that’s a really important question. I’m glad we had a chance to to discuss that, which is a logical lead into question number six or statement. Statement number six, forgive me, I’m not able to retire at this time if I wanted to. Now, Ted, I know you’re not looking to retire tomorrow, but if you wanted to retire tomorrow, could you? 

Tad McIntosh [00:11:25] That’s not comfortable, you know? Yeah. And it’s not that I can’t retire in the next, you know, if you will, about five, seven years based on a combination of age and savings. I’ve done well on investing. But the difference is, if you said to me, okay, you’re. And I’m 56. Yeah, I’m all set, this will mess with you. I’m a 56. I’m still 56. All right. So. But he said, oh, at 56, 61, do early retirement. Could you live comfortably today on what I’ve built up? And the answer? No. I still need income from the business. Yeah. 

Greg Alexander [00:12:01] So now the good news is, as 56 is, you know. Not retirement age. So you still have time to do that And based on your plans that you share with me, I’m confident you’re going to get there. But, you know, we all want the option. So, I mean, 56 is not 26. So, God forbid. You know, I don’t know, ten at health scare or something like that. If you wanted to be able to retire or if he had to retire, he could. And you want to build your firm in such a way that that’s the case. You know, when you’re a founder of a services business, of people driven business and it’s a small one, you have a tremendous amount of risk. You have all of your net worth tied up in an illiquid, small firm. A couple of things don’t go your way and you really feel it. So the reason or one of the reasons to scale beyond a lifestyle businesses to de-risk your life, you know, a bigger firm can withstand more. I don’t know. You lose a key employee. Okay. It stinks for a period of time, but you’re not in big trouble. You lose a couple of clients. Yeah, it’s not pleasant, but, you know, you can still pay the rent, that kind of thing. When you’re a smaller. The lifestyle business is way too risky. So that’s one of the reasons why we make the statement and we ask members like Ted to rate themselves. Okay, let me hit you with maybe one more and then we can summarize what we’ve learned today. So step number eight. I have not built a firm that could be sold today. How would you rate yourself on that? 

Tad McIntosh [00:13:29] It’s unacceptable as well. You know, and partially, again, to the markets we serve and how we sell them. Not having enough concentration. What I’d call in deeper, deeper, more repeatable niches of service offerings. And partially due to senior employee in my concentration of knowledge of the firm. So a lot of that succession and I would even phrase it differently. It’s unacceptable that I don’t think there’s a succession not far enough in place that if something really bad happen tomorrow, it wouldn’t be a big deal. Yeah, right. And I’d say that. So it’s about being sold as really being able to say how how much am I needed? Yeah, exactly. How much of my top 10% of leadership needed. If, if something happened, God forbid, then it’d be. It will be good. And that’s my what I’m really resolved to is build a firm that can have succession, successful succession, you know, without without me. And then that is a firm that it’s almost like you build a firm ready for succession and then it can be sold. Yeah, but if you don’t, it’s, you know, top heavy is the way I would tend to phrase it. 

Greg Alexander [00:14:52] Yeah. Listen, small, small services firms are risky. And the reason why they’re risky for investors or potential acquirers, which is what we’re talking about here with this statement, is the founder in the firm are one and the same. If the founder goes away, there’s no firm that’s called key employee risk. And what that is talking about is succession. In other words, being able to get other people in the firm to do what he does as well as he does it so the firm can run without him. If he was if he chose not to be part of it in the future. And when you’re able to do that, then if you wanted to sell the firm someday again, it would be your option. You actually have an asset that’s sellable because you in the firm are two separate entities. A purchaser of your business would do so because the business would not be dependent on you. And that’s what that question in the tolerance level checklist is meant to surface. So, listen, you know, they say that 50% of solving a problem is recognizing that you have one. I think, boy, I would be bold enough to say the majority, greater than 50% of our members in collective 54 is struggling with this. And the reason why I wanted to come on the call today is because he’s confident enough and comfortable enough in his own skin to be vulnerable and go through this exercise and and, you know, demonstrate that he’s working on some of these things, but he doesn’t have the code cracked, so to speak, because others don’t as well. So, Ted, a great example of leading from the front of being a real role model. I’m really looking forward to the Friday member Q&A session and I’m hoping that others will open up as well as you did here today. So on behalf of all the members, thank you so much for being on the show. 

Tad McIntosh [00:16:34] Now. Happy to do it. Happy. Thanks for what you’re doing, Greg. 

Greg Alexander [00:16:38] Okay, great. All right. So let me give everybody a couple of calls to action. So if you’re a member, make sure you attend today’s Friday Q&A session and we get in a meeting and vote on that. If you want to put yourself through the tolerance level checklist, that’s all can be located on page 51 of the new book, The Founder Bottleneck How to Sell Yourself If You’re Not a Member. And after listening to this, you might want to become one. Go to collective 54 dot com and fill out the contact contact us form and one of our representatives will reach out to you and talk to you about it. If you’re not quite ready to be a member, but you want to educate yourself some more, subscribe to Collective 50 for insights and again, you can find that on the website. You’ll get three things every week Monday, a blog, Wednesday, a podcast, and Friday a chart. And hopefully that will be valuable to you. So for all out there in the world of podcasting, thanks for listening and we’ll see you on the next show.

Episode 118 – How Canada’s Fastest Growing eCommerce Agency Scaled Quickly Through Acquisitions – Member Case by Colton Hathaway

Previous sessions often revolve on how to exit a professional service firm. What if we flip the script and discuss how to scale by purchasing professional service firms? On this episode, Colton Hathaway, VP of Technology at Northern Commerce, shares how their firm was created through a merger, and how they have grown by acquiring other firms.


Greg Alexander [00:00:15] Welcome to the Pro Serv Podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. For those who are not familiar with us, Collective 54 is the first mastermind community focused entirely on the needs of the boutique professional services industry. My name is Greg Alexander. I’m the founder and I’ll be your host today. On this episode, we’re going to talk about growing your firm inorganically. In other words, doing some acquisitions, buying some firms. And the reason why we’re doing this today is because the world has changed. As we were recording this at the beginning of 2023. And, you know, interest rates are up. Maybe there’s a recession upon us. And what that means is that multiples have come down in the professional services space, more so in some sectors than others. And it may be an opportunity to to buy some firms. Many of our members don’t know how to do that. They’ve never done it before. And our objective of today’s call to put that issue on the table, at least get it in their consideration set. And we’ve got a great role model with us, someone who’s done quite a bit of this. His name is Colton Hathaway. Colton is a collective 54 member, and he’s going to walk us through kind of his approach and share some of his story. So, Colton, it’s good to see you. Please introduce yourself to the audience. 

Colton Hathaway [00:01:42] Thanks so much for having me, Greg. So I’m Colton, VP of Technology at Northern Commerce. We are a platform agnostic ACI, meaning that we can introduce solutions that make sense for the business, that can be retailers, B2B manufacturing, being a B2C firms. There really is a wide breadth of solutions that we’re able to provide into the market. And, and yeah, excited to talk about today’s topic. 

Greg Alexander [00:02:06] Okay. And VP of Technology, what does that mean in your firm? Is your firm a co-founders founder, CEO? How does all that work? 

Colton Hathaway [00:02:17] Sure. Yeah. I mean, my role is kind of unique given that we are a technology firm. I do a lot of different things, whether that is in sales to key accounts, leading partnership strategy with different platforms. We work with nurturing the different teams that that engage with our client base through delivery solutions, things like that. I kind of see myself as a bit of a servant leader, support to different parts of the business where I can create value. 

Greg Alexander [00:02:42] Okay, sounds great. All right. So from what I understand, part of the growth story that your firm is, is that you’ve grown through acquisitions. So maybe at 30,000 feet. Kind of walk us through your strategy there. How many deals have you done? Why have you decided to do it that way? Etc., etc.? 

Colton Hathaway [00:03:02] Sure. So I’ll take you way, way back to kind of, I guess, the founding of Northern. So Northern originally was the product of two different solution providers. There was a marketing firm and then there was a technology e-commerce firm. The the merger of those two firms created Northern backing in 2015. Those two firms independently were obviously existing before that. And so the merger and then acquisition really was kind of like the foundation of Northern that practice. Fast forward to right at the start of the pandemic, I believe it’s 2020. We ended up acquiring another firm based in the same city. So similar story, similar size. And really at that point, it doubled the capacity to the size of our team. So we ended up acquiring another firm that was essentially the same size as us. And a lot of I hate using this word, but a lot of synergies between the two teams. It made a lot of sense at the time and and that’s been part of our strategy ever since. Right. So yeah, I think it’s it’s not it’s the easiest thing to do in doubling your size through an acquisition. It worked out really well for us and a lot of the same talent that came over as part of that acquisition are still here today and really excellent team we put together. 

Greg Alexander [00:04:12] Okay, fantastic. So I’ve done some deals myself and the way that I always look at it and maybe I’ll throw this out there as a way to as an outline for our call is it’s a buy versus build conversation. Buy means can I buy a company that gives me some strategic advantage that I don’t have already, something that I need or do I build it? And if I build it, that means I’m not going to buy it. It means I want to build it internally, which is hiring people and kind of growing organically that way. And I always look at these things through the lens of three kind of criteria. First is how much is it going to cost me to buy it versus build it? How long is it going to take to buy it versus build it? And what’s the probability of success? You know, that I’m actually going to accomplish the goal goal if against those who use cases, buy it and build it. And there’s a general rule of thumb, I would buy a firm if it was cheaper, if it was faster. And if the probability of success was greater, or at least I could contain the risk is doing acquisitions is never risk free. And those synergies you talk about sometimes don’t materialize. And merging disparate cultures can be a challenge. As you know, long lost their list is long as to how things can go wrong. So how do you think through and let’s just maybe take these one at a time. First off, do you consider buy versus build when you’re looking at this, or is it or do you some other framework to think about it? 

Colton Hathaway [00:05:42] Yeah, no, I think that’s an excellent framework to consider really for us, that kind of acquisition strategy, the first year post acquisition is stabilization mode, right? Merging the two teams, making sure there’s a culture fair, seeing if anybody is not a fit, how do you accept them gracefully. And really the the year post acquisition is stabilization mode. If you can wrap it up in a year and it doesn’t drag out for three or four or five years, then I would say be the appetite to buy instead of build is there. And just if the acquisition takes longer than two years, that’s kind of the point in which maybe you could build that over that two year period, right? So that’s one way to think about it is like, how likely is this to succeed in in fewer than two years? The other thing that sometimes comes in, and this is part of the acquisition valuation and things like that, is are you buying customers that are aligned with your existing service offering? How can we cross-sell and upsell into that new client base? Right. So that’s another part of it. If if there are opportunities where you can better serve their existing client base, if we can buy those customers instead of create them on our own, that’s another part of the equation. 

Greg Alexander [00:06:44] Yep. So let’s talk about a little bit around the the those two points to stabilization. So one year, can you get things stable in one year? Part of the challenge of buying services businesses as they say all your assets you know walk out the front door every day and there’s a lot of kind of turnover when acquisitions can happen. Now, there are some things you can do to mitigate that employee contracts, etc.. But you know, what advice would you give our members to stabilize as quickly as possible? 

Colton Hathaway [00:07:15] Yeah, this is an interesting one because, I mean, the the acquisition that we’re we’re still kind of towards the tail end of the two years. We’re over two years now on the acquisition. But we, we signed the deal or close the deal right as the pandemic hit. So we’re merging two cultures which historically have been very familiar with in-office work, the relationships that you’re building in office and things like that. And now we are through the pandemic into that or tackling that stabilization period, right? So there were some additional challenges, which I’m sure are going to be different moving forward now. Now we’ve got the macroeconomic climate and things like that and a difference, especially in the technology ecosystem, a different the talent pool has a different perspective than what it did over the past two years. The big thing that I would say and that we focused on was key relationships, right? So it’s like who is critical on both these firms who are vocal? I come from a change management background, and so I’m trying to figure out who are going to be change sponsors, who are going to be change resistors. How do we include both of those groups as part of this acquisition? And that’s a big part. It’s all about the people that are in the service based business, right? How do we make them comfortable and included with that change? 

Greg Alexander [00:08:23] And is that done during diligence? Is that done after the deal closes? 

Colton Hathaway [00:08:29] I think most of it has to happen after, right? Like if there’s going to be a small group, it’s going to be aware of the acquisition and part of that deal due diligence. But I mean, in our case, I mean, we’re dealing with hundreds of people and you can’t involve that entire stakeholder group as part of that due diligence. I mean, there’s a subset of us that knew what was happening, key, key people in that decision. But most of those people are going to have to bring on board after the deal closes and as announced. 

Greg Alexander [00:08:55] Right. So you take it a little bit of a leap of faith there that you’re going to be able to hold onto all those people. 

Colton Hathaway [00:09:02] Yeah, exactly. And that’s part of the calculation equation is it’s wrong to lose some good people and that’s part of the process. I think it’s important to identify who is very critical to this deal, who holds those relationships both internally and externally, and how do we incentivize them to be part of the new core. Yeah. 

Greg Alexander [00:09:17] Let’s talk about the next synergy you mentioned, which is the client list and the opportunity for cross-sell. We’ve got a group inside of collective 54 called the Post Exit Group, and it’s a very interesting leadership board. I think there’s about 12 people on it now. We’ve had in three years we’ve been around. It’s been, I think, 21 companies that were in the collective that have sold either entirely or part of their firm. So now there’s this group. That’s because we talk about grow, scale and exit. There’s this fourth group, the post exit group, and most of them are still there at the new entity. A lot of them were bought by private equity. And, you know, the theory is, is that they took some chips on the table, but the next part of the apple is going to be a lot bigger and it’s going to be bigger because they’re able to cross-sell services to each others client list. That has been more challenging than many had realized. Have you seen it to be challenging or has it been easy? And what have you done to facilitate the cross-selling of each other’s client lists? 

Colton Hathaway [00:10:24] Sure. I think there’s there’s two parts to that. One is is obviously just the health of the relationship. How much do they trust you? Like, how much are you an expert advisor versus hands on keyboard? You’re just doing what the client asked for, right? So, I mean, there’s two very different types of professional services firm and there’s multiple, but those are the two that I typically try to make sure that Northern is not seen as an order taker. Rather, we are the strategic advisory role and what we what solutions we bring to the table are in their best interest and it’s a mutually beneficial relationship, right? So, I mean, if if the firm that you’re acquiring is order takers, their client base is less likely to look at the new organization as that strategic partner. They want to continue business as usual. We know what we’re doing. You are here to to execute our vision. So that’s one thing, is like how strategic or advisory was the firm you’re acquiring? And is there the propensity for that client base to see an app or have an appetite for that new service offering? The other side of the equation is around like the breadth of services, right? So in our business, we work again a lot in retail, for example. Right? And so there’s two parts of our business, one being on on e-comm or digital experiences, the other on on marketing performance and things like that. And so it’s a very natural fit when a client comes to us for either development or marketing, we can cross or upsell the other side of that equation to give them a more holistic view of it that doesn’t exist in certain types of professional services. So I think it’s the kind of the service that you’re offering as well. Yeah. 

Greg Alexander [00:11:55] And when you’re thinking about what the pay for a firm are you factoring in some dollar amount that you think you’re going to get in cross-sell or is that just all gravy deal if it happens? 

Colton Hathaway [00:12:07] It really depends on on the valuation, whether you’re buying. I really like leaders agreeing for if you’re buying the clientele. If you’re buying like a leadership group and the team is going to continue to perform. There’s certain ways to structure that deal for like a buy out period or if they continue to perform versus certain times firms that they’re just wanting an exit and they’re done with the business and they want out, in which case you’re kind of it’s a hope and a prayer a little bit around that client base if they’re going to stick around with that new firm. So I think is probably case by case basis on on the relationship, on the structure of the team. 

Greg Alexander [00:12:40] Okay. And my last question is, I would imagine, given that you’ve done this successfully before, that you have access to the capital to pull these things off. And as I mentioned in the opening, you know, the price you got to pay for these things is come down a bit. Are you planning on doing more of these deals? Are you aggressive at the moment? Are you is it a wait and see approach? 

Colton Hathaway [00:13:01] Yeah, I think and again, in this macroeconomic climate, everybody is focused on on cash and surviving the storm, so to speak. I mean, speaking in terms of like what we’re seeing on our different partners, like their pipelines are a little weak. I think in hearing with other like a 54 members, that’s pretty typical kind of heading into this type of economic climate. That said, if a deal presents itself, there’s always money to be made during this type of climate, right? This macroeconomic climate, there there will be a lot of money made and those that execute successfully against us, we’ll see that at the other end. Right. So there’s always deals on the table. We’re always watching whether or not we’re going to take action on some of those. That’s to be seen. But there’s always deals. 

Greg Alexander [00:13:42] Yeah. Awesome. Well, listen, Colton, we talk an awful lot here in Collective about selling your firm. I don’t think we talk enough about buying firms. So this was a real contribution, a net new incremental knowledge for us. So on behalf of the membership, appreciate you being here and and contributing. 

Colton Hathaway [00:13:59] Thanks so much for having me. 

Greg Alexander [00:14:00] All right. All right. So let me give a couple of calls. Action here in closing. So if you’re a member, be sure to attend the private Q&A session with Colton, which will happen on the Friday. We’ll get the boutique session meeting invite out to you, and you’ll have an opportunity to spend an hour with him and directly ask your questions. Also, if this is something that you want to do, I’ll direct you to collect the 54 as new companion courses for both the boutique and the founder bottleneck. These are online online learning programs that give you real kind of detailed how to a couple of templates in there. In particular the buy versus build template, which I mentioned earlier. And we also have a basic post acquisition implementation plan template that might help you so directly to those things. If you’re not a member and you think you might want to become one, go to collect collective 54 Adcom fill out a contact us form a representative will get in contact with you and discuss, you know whether you qualify for membership and you know how you might benefit by meeting people like Colton and getting access to these tools. If you’re not quite ready to join, but you want to educate yourself, subscribe to collect 54 insights. You get three things every week on Monday, a blog on Wednesday a podcast, and on Friday a chart. And that’ll be a way to keep track of us and educate yourself on the types of things we talk about. All right. Well, that was a lot in 15 minutes. Appreciate your attention. Thanks for listening to our podcast. And until next time, I wish you the best of luck.

Episode 117 – How a Staffing Firm Productized a Service and Is Changing Lives – Member Case by Nish Parikh

Productizing a service seems scary and many Founders of service firms do not know where to start. As soon as you have decided to capitalize on it, productizing your service can lead to fast growth and large scale. On this episode, Nish Parikh, CEO at Rangam Consultants, funneled cash from his staffing firm into the development of a product called Talent Arbor. As a result of this innovation, Nish is helping those on the Autism spectrum build rewarding careers. Join Nish and hear how leading with empathy drives innovation and impact.


Greg Alexander [00:00:15] Welcome to the Pro Serv Podcast with Collective 54, a podcast from leaders of thriving boutique professional services firms. For those that might not be familiar with us, Collective 54 is the first mastermind community dedicated to the specific and unique needs of leaders of boutique professional services firms. My name is Greg Alexander. I’m the founder and I’m going to be your host today. On this episode, we’re going to talk about productizing a service and how by doing so, you can accelerate your growth rate and accelerate the pace of scale. And we have a great role model with us who is someone who just did this. His name is Nish Parikh. And Nish, welcome to the show and would you please introduce yourself to everybody? 

Nish Parikh [00:01:04] Sure. Thanks, Greg! Nish Parikh, I’m co-founder and CEO of Rangam Consultants. We are a workforce solution company with the expertise in the DEI space where we are helping companies build, scale up, and manage their disability hiring programs and neurodiversity programs. 

Greg Alexander [00:01:28] Okay, very good. So today we’re going to talk about how you just productize a service and you created this thing called Talent Arbor. And let’s start with just briefly. What is it? Please. 

Nish Parikh [00:01:45] So Talent Arbor is a tech-enabled workforce solution for companies with interest in bringing in holistic talent. Talent with all abilities. And this platform is helping companies identify the jobs for this type and job in different roles to manage the complete end-to-end program when it comes to hiring people with a disability or people of neurodiversity talent. 

Greg Alexander [00:02:21] Okay, now you ran your company for many years successfully without this product or a product, I might say. So why now? Why did you decide to productize your service now? 

Nish Parikh [00:02:39] What we have experienced. There are two two components or there are two needs. We saw about two years ago. One is managing our services. When we are serving our customers with neuro-typical candidates and neuro-diverse candidate, we were managing in two different platforms, two different applications, two different processes. So I saw it first-hand and we said, How do we manage this? The back end of our services, utilizing a product, one platform. And then our customers started asking if they can do certain things, which was part of our platform. And that’s when this whole idea of productization started. And then in recent, during COVID time, we saw another opportunity where self-service model in this particular space is becoming more and more, you know, adaptable, are, you know, successful. So that’s another reason we said how do we take what we have built and build a cookie cutter kind of a model where we can replicate this and offer this services as a cost effective solution to our customers? 

Greg Alexander [00:04:04] Fantastic. So for listeners out there, this is a very typical journey towards productization. It starts with you’re performing a service for a client. You want to do it more efficiently. So you tech-automate your service delivery, deliverable delivery, excuse me, tech-automate your service delivery. And that’s a tool that you use internally to perform the work. And that alone can significantly improve scalability and, quite frankly, profitability. Then very often you then make that platform after it’s built available to clients and they start using it either in exactly the same way or slightly different ways, and then it opens up new revenue streams. In this case, the self-service revenue stream. And then that is almost another multiplier of scalability. So this is why it’s it’s such an effective way to scale a professional services firm whenever you can automate. Now, a lot of people that may be listening to this are going to say, Yeah, I get it, but I don’t know how to do this. So I’m assuming at one point in your journey you didn’t know how to do it. So how did you get started and how did you pull it off? 

Nish Parikh [00:05:12] Yeah, So we started we, we brought this whole process of cost productization into two parts. One is our team facing functionality. How do we first build that base so that we can we can serve our customers in a cost-effective way. So once we solved that problem, then the real process of productization started. So in that process, what we consider we created a one-year roadmap. And our first launching pad was something where customers were asking us for this particular type of activity every single day when they start the program. And so we identify those couple of activities and we we created the model for that. And now we have started chatting and offering these services as an add-on to existing services. So we have taken this multi-phased approach. So as we are building, we are going to go to the market and enhancing our existing services with our existing customers. But with the goal to offer these services as a brand new services to new customer. Once the complete platform is ready. 

Greg Alexander [00:06:36] Okay. Now productizing the service is expensive. And it’s risky. So therefore, especially if you haven’t done it before, it’s. It takes courage to do that. So how did you muster up the courage to go down this path? 

Nish Parikh [00:06:58] So in my. Entrepreneurial life I how I’ve been. Pretty unsuccessful. Couple of times in. So the courage was always doing that. And no matter what, because I’m going to fail, I’m going to take it. But the difference between all my earlier ventures where I have failed. I went a little bit out of the scope, out of my core business. So my first product was e-commerce product, which is completely different than staffing. Then my second product was on the education side, special education, which is kind of related to staffing and employment. But the benefit that this particular product, I see that what we are selling to our customers, our core customers, sixty customers, they are looking for this solution. So this particular fit is or this particular productization projects as compared to my previous. So that’s that’s how I see it, that there is the higher possibility of success. 

Greg Alexander [00:08:09] Just a great reminder, you know, stick to your knitting, you know, stick inside your circle of competence, you know, and if your customers are asking you for something, listen to them. Build them what they want and they’ll probably buy it. You know, it’s just just great advice. You know, I think some of our members don’t understand the term neurodiversity, which I know is how you’re building your firm and it’s your passion and your mission. Would you mind explaining what that means? 

Nish Parikh [00:08:35] You know, we all have way to do things. This is very simple. This is how I have a learning experience. Neurodiversity is when we bring in the workforce who has the building ability to think out of the box. We are all influenced by so many things, but neurodiverse is like considered individuals on the autism spectrum or ADHD. ADHD is also. And then there are a lot of other mental I would not call it disorders, but you know, we call mental conditions where these individuals, they think differently, they see the world differently. And that’s the beauty of neurodiversity. 

Greg Alexander [00:09:26] Okay. And you’re helping companies place neurodiverse people into jobs in their company said, I understand that correctly. 

Nish Parikh [00:09:37] Yeah, that’s like blitzing is only one piece because this is where a lot of people they. Because hiring people with disability or autism or neurodiverse is not new sustaining. That’s what I always say. We help companies sustain this talent and so that they are successful. That’s what we really do. 

Greg Alexander [00:09:56] Okay. And this Talent Arbor system along with your other services, is is managing the lifecycle of that employee. So it’s not just placing it, but making sure they’re successful, you know, throughout their career. 

Nish Parikh [00:10:11] That’s right. That’s right. It starts with identifying the right job. Okay. Using AI and machine learning, to setting up those trainings, capturing those checkpoints, onboarding the candidates, and then most importantly, sustaining them in one-connected as the one-connected community. 

Greg Alexander [00:10:32] Okay, very good. So that was helpful to understand the context of our story of prioritization today. Just a couple more questions for you. The other obstacle that founders run into is they say, Yes, I understand I need to do this, but I’m already too busy. And productization is a big project. I don’t have time for this. And when I look internal to my team, you know, maybe everybody else is just as busy as me. Or maybe, you know, if there is extra capacity, you know, they’re not skilled in, you know, turning a service into a product. So how did you find the time to do this? 

Nish Parikh [00:11:10] Yeah. So in our case, we were we were fortunate that one part of the team was already serving. Our internal tech team was already working on building this innovative thing, which was helping us compete with other competitors. So that was already there and that development expertise was there. So I would say we were fortunate to have that one core competency built in in the organization. 

Greg Alexander [00:11:42] Okay. 

Nish Parikh [00:11:43] And then then second is the second step is then allocate some additional resources to take that product to the next level. And one of the other very important thing, which we we did was we kind of mandated or kind of everyone contributed there 5 to 10% of their time in building this solution. So we created a dedicated innovation team and who met on a weekly basis to all the subject matter experts within the organization. They come to this call, they look at what we are building, and they provided their feedback. So it was a collaborative effort and that’s how we’re kind of building this the next towards the end of this platform. 

Greg Alexander [00:12:34] Okay. So I understand how you’re investing kind of non billable hours is 5 to 10% into the building of the product. I’m also assuming that you were probably taking profits generated from the service business and funneling that into this prioritization. Is that correct? 

Nish Parikh [00:12:51] Absolutely. So we are using our free cash flow and we are reinvesting into additional resources to take the product to. Yeah. Okay. 

Greg Alexander [00:13:01] So were you able to fund the entire the entire development effort from the free cash flow from the service business? 

Nish Parikh [00:13:08] Yes, that’s what we have done so far. But we are out in the market kind of looking for external. It’s not enough to to expedite because time is, as you know, great. And we want to go to the market as quick as possible. So. 

Greg Alexander [00:13:25] Well, good luck with that. I know it’s not a friendly funding fundraising environment at the moment, but hopefully things will get better here. So, listeners, this is an important thing. So, you know, he had a choice to make. You know, the service business was thrown off free cash flow and he could either stick in his bank account and take some trips and buy some cars and things like that, or he could reinvest it back into the business to try to, you know, accelerate scale and grow. And that’s what he did. And you’re able to do this at least a version of it, by using your existing free cash flow. And there’s lots of advantages. Topic for another day to do that. My point in saying this is that it’s not impossible. It’s very doable. It’s not like you don’t have to go raise $100 million to go do this. I mean, you’re not a software company that needs venture capital money. You’re trying to tech automate, which is a different scope altogether. So the money and the time is there. And I want you to encourage you to try to make it happen. All right. Well, listen, we’re at our time window here, but I want to. For all the members, on behalf of all the members, I want to thank you for being with us today and tell us a little bit about your story. It’s a great, tangible example of how a service company has productized and the journey that you went on, and I wish you the best of luck with Talent Arbor. 

Nish Parikh [00:14:44] Thank you so much. Thank you, Greg. 

Greg Alexander [00:14:47] Okay. A couple of call, two actions for the group. So if you’re a member and you’re listening to this, be sure to attend the Friday Q&A session that we’ll have with Nish to talk more about this. That’s an hour long session. You’ll be able to ask questions directly of him and they’ll be a wonderful learning opportunity. Also, if you’re participating in the new e-learning products that we’ve come up with that support, the two books, The Boutique in the Front, A Bottleneck within the Boutique Companion course is a couple of tools I might direct your attention to. So the first one is a vision templates. So clearly Niche had a vision for what he wanted to do. So you need a vision to figure out where you want to go with your prioritization efforts. And then you double click on that. And there’s another template called the Service Roadmap template. So those two things might help you get your thoughts organized. And I wanted to direct you to those. If you’re not a member and you’re listening to this podcast in the public domain. You want to consider joining, go to Collective54.com. That’s obvious. Fill out a contact us form and somebody will get in contact with you. However, if you’re not ready to join but you want some more contact, you can subscribe to Collective 54 Insights and you’ll get three things on Monday. You’ll get a blog, on Wednesday you’ll get a podcast, and on Friday you get a chart. And it’s a good way to educate yourself further on these topics. And maybe that’s a way to get started in the pathway towards membership. Okay, So thanks for listening. This was a great episode and until next time, I wish you the best of luck as you try to grow, scale and exit your service for.

Episode 116 – How to Increase a Founder’s Income by Increasing Yield – Member Case by Ehsan Mirdamadi

The yield of a boutique is the ultimate measure of productivity. Yield is simply the average fee per hour times the average utilization rate. For example, $400/hour x 75% utilization rate = a yield of $300/hour. Increase yield and make more money. But, how? One effective technique is to tech automate service delivery.  On this episode, Ehsan Mirdamadi, Partner & CEO at NuBinary, explains that small service firms can now afford to tech automate service delivery by leveraging a fractional CTO (Chief Technology Officer).

Listen to this episode and learn how the fractional executive model has entered the technology office. Many Collective 54 members use fractional finance, HR, IT, and Legal executives. Now, they have the opportunity to leverage fraction technology executives. And those that do will see an increase in yield.


Greg Alexander [00:00:15] Welcome to the Pro Serv podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. For those who don’t know who we are, Collective 54 is a mastermind community dedicated entirely on the needs of leaders of thriving boutique pro serv firms. My name is Greg Alexander. I’m the founder and I’ll be your host. And on this episode I’m going to talk to you about tech automating the service delivery that you offer your clients and how that could help you expand margins. And we’re going to discuss a cost effective way and a less risky way of doing that by leveraging a fractional CTO. And we’ve got a great role model with us to help me with this. His name is, and I’m going to do my best here. Ehsan Mirdamadi. Was I close? Okay. Fantastic. Yeah. And. And this is what his firm does. His firm provides many things, one of which is fractional CTO services. So, Ehsan, thank you for being here. It’s good to see you. Would you please introduce yourself?

Ehsan Mirdamadi [00:01:29] Thank you. And this is Ehsan Mirdamadi, and I am the co-founder and the CEO of fractional CTO service company called NuBinary.

Greg Alexander [00:01:42] Okay. And say a first name for me one more time.

Ehsan Mirdamadi [00:01:46] Ehsan

Greg Alexander [00:01:47] Ehsan. Okay. Got it. I was saying Ahsan, Ehsan. I will do my best here to stick with that. I tell you what, for the rest of the show, you can call me Bob. All right, So. So the big idea here today is a lot of our members understand that automating service delivery through technology as a way to accelerate, scale, and expand margins. But many of them are not technologists, and they’ve wasted a bunch of money trying to do this, and now they’re fearful of trying it again. And usually when they waste a bunch of money is they go hire an expensive chief technology officer and they miss hire that person because they don’t know what good looks like because they’ve never hired one before and now they’ve retreated. So when I met Ehsan and he told me about his fractional CTO model, I was really excited about it because our members have leveraged fractional executives in other disciplines. CFO, head of H.R., Head of sales, etc. and the huge advantage of doing that is that Ehsan knows what good looks like. So if you are hiring a fractional cto from him, there’s a good chance that that person has been through a thorough screening process, and it’s the right person for you. So we’re going to try to take this concept of a fractional CTO and apply it to this unique use case, which is to leverage that person’s expertise to help you tech automate service delivery as a way to accelerate scale. So that’s what we’re talking about today. So let’s start with the very basics. So what is a fractional CTO?

Ehsan Mirdamadi [00:03:18] So fractional CTO offering is obviously a part-time engagement that allows us to bring in a senior chief technology officer into into the into our engagement with the clients. And and these CTOs that we are hand-selecting are the type of CTOs that have gone through their own journey and process of starting with an idea and understand the business objectives and really trying to marry the business objectives with of their technology development objectives, which in a sense means this is a obviously a senior role and that that essentially allows companies to think strategically about how they want to adopt or build technologies for their practice.

Greg Alexander [00:04:12] Okay. And how did you come up with this idea? Because this is fairly unique.

Ehsan Mirdamadi [00:04:19] So myself and my co-founders, we all consider ourselves CEO entrepreneurs. We have done our own a fair bit of experimentation with other ideas and also been able to begin to to engage ourselves and really. Be out there, try to bring ideas to life in other initiatives and other endeavors that we have had in our previous businesses or as consultants helping other businesses to do so. In our first encounter. And as we started coming up with ideas on how we can position better for what we do in the market, we essentially started gathering ideas from, you know, the ecosystem that we were part of the innovation ecosystem down here in southern Ontario. And also we started going through our journeys or personal journeys as we were doing the fractional sport and the CTO offerings or helping others. And so one of the key elements, a few of the key elements that we encountered was that for the most part, companies go through a multitude of iterations in what they build. They and that’s usually on average about three times before they figure it out how to do it properly. And that good around 50% of those projects actually fail. And also that, you know, they spend a lot of their capital into really building a tech component to their businesses. And so we realized knowing all of these facts essentially is pointing out towards this this conclusion that obviously we need to do something that increases the chance of success in these type of projects and also help the founders, the owners of the companies to essentially reduce their ultimate cost doing so. So we we started just experimenting with youth with a few different types of messaging to go out there and essentially talk about our work. And we realized that the CTO word is actually a good encapsulation of what we were trying to do is to talk to to our audiences about okay.

Greg Alexander [00:06:57] And for our audience, as you know, these are non tech companies, These are small services firms. But these days, technology is touching everything. And in order for them to scale, they have to figure out a way to automate through technology, or they’re going to have ballooning labor costs and never really get to substantial profitability. The surprisingly to you, I would imagine many people don’t know what a CTO does. I think this job to the to the folks that don’t come from the tech world is a little confusing and they’re not 100% sure of what it is that they do. For example, I was on the phone with a member last week and they hired a software development firm to write some code. But the spec they gave the software development firm, you know, what they told them to build just wasn’t well thought out. So they to your point, they tried it three times. They wasted a bunch of money and they never really got anything. And what I advise them on is, is they put the cart before the horse. They really needed a CTO to tell them what they should be building in the first place based on the needs of the business. So that’s my kind of layman’s explanation as to what a CTO does. Would you provide greater clarity, you know, if you were to describe to our audience members what a CTO does, what would you say?

Ehsan Mirdamadi [00:08:18] Again. I wanted to put our attention back on this warning that we think makes a lot of sense and resonates with a lot of our audience and in this case as well, is that CTOs are the CTOs main job is to make sure that they marry the business objectives, what are the technical objectives? So as you pointed out, if you go to any software development company, that’s their job to essentially learn from from the owners on what they’re trying to build. And they essentially go back and come back with a scope. And they they obviously and the bigger the scope, the better for them. Whereas a CTO would love to understand first that what what is it that they’re trying to achieve as a business objective for their for the institution, for the corporation? And so the whole conversation of really trying to understand what needs to be built starts with that. Otherwise, we technologists to try to be fancy with our I guess technology builds and we try to make it as as complex as it can be and start, adding more features and bells and whistles into it. But a CTO obviously would like to know if any of those features and components that they’re anticipating and imagine imagining for the ultimate solution actually makes sense and delivers on a very specific basis. So to just drill down a little bit more on this topic, on this idea. The CTO needs to understand who the who the users are for those platforms and what are they trying to achieve. Is it on the matter of, for example, storing information or presenting the information in a certain way and how they are used to going about, you know, doing certain things like, for example? If you are dealing with a institution that deals with their health data, with the patient data. It is important to really understand that from the from the day first you want to have some level of security and compliance, consider or not initiate an event. So obviously one and you want to make sure that the data is anonymous and so on and so on. And also that over time you want to make sure that the company understands that the software is simply like a living mechanism, which requires maintenance, which requires which requires, you know, we’re going through an evolutionary process every now and then, getting the feedback from the clients and really try to make it better as time passes by. And so as a CTO, you also be you should be looking out into the future to see what kind of challenges it may pose for that institution, for that company to essentially continue adopting new business practices and processes.

Greg Alexander [00:11:33] Okay, very good. Yeah, that was a great example of, for example, security and compliance around health care data and understanding who the users are. And that’s the big point that Ehsan is trying to make right now, which is this chief technology officer is a hybrid business person slash technologist. And as a result of that, and that’s the key element here, they really can help our members and founders of boutique process firms. Why shouldn’t a small services firm? Just go out and hire a full time CTO. Why rent a fractional CTO?

Ehsan Mirdamadi [00:12:14] There are many reasons for that. One of them is that you obviously don’t know what you don’t know as as a leader of your company. You may think that certain skill sets is just simply what you need for for your type of business. And so when it comes to the CTO world, there is a vast range of different types of technologies that people are exposed to, and maybe their experience, as it may seem relevant. It may not be as you may think. The other reason that we are seeing it more and more and often these things is that technology deals are becoming more and more complex these days. So the time and the era of when you could actually build and build an app and conquer the world with that what the Uber of the world did is over. The technology has become a lot more complex and has many different components to it, and so you probably won’t be able to find the CTO that has that bad range of expertise to be able to to achieve the goals and objectives, because what they are designed for, for that individual. So when it comes to fractional CTO often because our CTOs are exposed to a whole range of different things, not only through their own direct engagement with the clients but also being part of the cloud, and other CTOs that can essentially reach out to another individual from the team and say, I think I need a security expert or cybersecurity expert to take a look at this and say we are in the right. They need to be able to reach out to another person that understands the cloud architecture, for example, to understand if they are concerned about their scalability considerations. And so the list goes on and on. But it’s actually quite a big list starts with the business continuity again, compliance and high visibility considerations and audit things that it can provide us as a few examples. Yeah.

Greg Alexander [00:14:25] You know, I’ll share a real example with our members because they know Collective 54 and this might highlighted for it. You know, there used to be a time when we had a smaller membership and a member had a problem and wanted to speak to another member and it was this manual process they would call their customer service rep and say, Hey, do you know anybody that can do this has done X, Y, Z, and then would have to manually go through all of our members and and make connection for that person. So we obviously said, well, you know, when we get to a few hundred members, which we’re at now, that doesn’t work. It doesn’t scale. So we need to create a member directory in the member directory needs to be made public to our members and they should be able to connect with one another and have a robust search feature. So we engage with a CTO and and you know, I as the owner of the firm and all these assumptions as to what it should do and all this and and he said, Greg, you’re getting ready to make a bunch of mistakes If you keep going down, the path is going on, you know, you’re going to have to rebuild this thing several times. And he caused me to pump the brakes. He spent some time with the members actually understood from the member’s perspective, you know, what the typical use cases were and what they would want in the future functionality. So when we did it, we got it right the first time, which was hugely impactful for us because it was a better experience for members, it was a way better experience for our employees. It reduced my labor component and it was just a win for everybody. So it’s just a great example of how you can use technology as a service company to deliver service for your members or in your case, your clients. That improves the client experience and improves your P&L because now the tech is doing the service instead of a person, which means, you know, the tech works 24 hours a day with no bathroom breaks. Right? It’s just less costly and it will be forever. So I want to encourage everybody that’s listening to this. Here’s your call-to-action readers and listeners, is that you need to engage tech automation. I mean, it’s no longer optional. So if you’re a services firm and you don’t have a tech component, you’re falling behind. And if you think you can’t afford it, you’re wrong. You can because there’s this new concept called the fractional CTO. And if you engage with firms like this, you, you shift some of the risk to them. I mean, it’s their job to build the right community of fractional CTOs and understand what your needs are and give you the right resource. So it’s a lot more doable now than it ever has been and it’s a big win for you. So listen, thanks for being on the show today. It was wonderful to listen to you and hear about your company. I know you’re a relatively new member, but your presence means a lot because I don’t think our members are tapping this resources resource as often as they could. And the way we all get better is, you know, every time a bright person like yourself joins the community, collective wisdom goes up for everybody. So on behalf of everyone that’s listening to this, thank you so much, Ehsan, for being on the show today and for being part of Collective 54.

Ehsan Mirdamadi [00:17:32] Thank you so much for having me. And what I wanted to leave you off with this statement that we have, this thesis that every company on this planet is now becoming a type of technology company. And the same way that they required lawyers and accountants as a baseline, we think that they also require a CTO.

Greg Alexander [00:17:52] Yeah, I agree with you. I really do. And I think we’re going to agree with you more and more as time goes on. For sure. I mean, that old phrase, I forget who said it, but software is eating. The world is accurate and we have to develop this core competency in order to do well. So. Okay. So that’s the end of this show. Thanks for listening. And a couple of things for you. So members, be sure to attend the Friday Q&A session with Ehsan. I’m sure you’ve got a lot of questions. The devil’s always in the details, like how much does this cost, etc., etc. And we’ll address all that on the Friday Q&A. And if you’re not a member, but you think you might want to be and meet really smart people like Ehsan, consider joining Collective 54 and you can do so at collective54.com. Just fill out the contact us form and somebody will get in contact with you. And then lastly, if you’re not ready to join but you want access to content like this, consider subscribing to collective 54 insights. If you do so, you get three things every week a blog, a podcast and a chart, and you can find that also a collective54.com. Okay, Thanks for listening and look forward to the next the next episode. Take care.

Episode 115 – How a Software Consulting Firm Succeeded by Planting a Flag in Middle America – Member Case by Ashok Sivanand

In a post-Covid world, does geography still matter? Should you pursue clients, and employees, based on where they reside? It used to signal to clients that you were legit when your name was on a building downtown. Is this still true?  On this episode, Ashok Sivanand, CEO at Integral, shares how he thinks geography is still a mission critical element of strategy, but not for the reasons you might think. He moved to Detroit and is building a firm based on mid-western values. And it is these values, concentrated in this geography, which is contributing to his success. Hear from Ashok his remarkable story which started with him driving a forklift in a factory during the graveyard shift. 


Greg Alexander [00:00:15] Welcome to the Pro Surf Podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community dedicated exclusively to the needs of leaders of thriving boutique producer firms. My name’s Greg Alexander. I’m the founder and I’ll be your host. Today on in this episode, we’re going to talk about geography. I know that’s a weird subject. Probably weren’t anticipating that. However, strategy and a boutique processor firm is where to play and how to win. And since our community is made up of boutiques, many of them choose geographies that they can dominate. And it’s a very effective strategy. And we’ve got a great example of that today. Middle America, if you will. And we’ve got a great role model to discuss with us how he is factoring geography into his strategy and how he is trying to dominate middle America, if you will. His name is and I’m going to do my best here. My man. A shook, son of honored. How do I do? 

Ashok Sivanand [00:01:28] Cos that’s probably a six out of ten. 

Greg Alexander [00:01:30] Oh, sorry about that. 

Ashok Sivanand [00:01:32] It’s a showcase debate and a shock. Savannah. 

Greg Alexander [00:01:37] Savannah. Okay. Sorry about that. I tell you what, I gave you permission to call me Joe Smith for the rest of the call. We can. We can get even that way. So please introduce yourself to the audience and tell us a little bit about your firm. 

Ashok Sivanand [00:01:51] Yeah, sure thing. So I started in a girl about five years ago, and what we do is help companies with transforming into technology companies. And we do that by building software products with them and using techniques like pair programing, where it’s very much like an apprentice style of teaching, learning almost like a pilot and copilot. Where are the companies that are looking to really transition their operations to being more tech enabled? Can do it at a very grassroots level in service of a strategy that most companies have today of wanting to become more like technology companies. The Fords of the world trying to go after the Teslas of the world, if you will. 

Greg Alexander [00:02:34] Yep. Okay, very good. So I was drawn to your story because to simplify strategy, which I’m dramatically oversimplifying where to play and how to win, where to play can be many things market segments, industry verticals, etc.. But one of the components is geography. And you have an interesting story on your take and geography and and how your focus on the automobile industry and as I understand it, middle America. And we’ll talk about what that means and in particular smaller cities. So just by way of introduction, would you mind explaining that part of your strategic approach? 

Ashok Sivanand [00:03:14] Yeah, sure thing. So we’re based out of Detroit, Michigan, and that’s where I founded the company. A little short history here. I moved to Detroit for what was meant to be a six month engagement with my last employer, and I was supposed to start their local practice here and go back to my hometown of Toronto. There was some reading between the lines about a promotion and everything that was waiting for me at a company that was going public. One thing that I did not factor into my spreadsheet was that I would really like living here. And I remember moving into this apartment in downtown Detroit, opening the windows all the way and looking out at the street and realizing this was never part of the spreadsheet. And we’re going to have to go back and address that. And this was in 2016, and Detroit is in you hear this in the news a lot about the revival story. And I think it’s true of not just Detroit and the auto industry, but can be said about a lot about middle America in many ways. It’s folks that you don’t see a lot in the news when it comes to up and coming technologies or up and coming services and a butt of jokes in some cases. And moving here, I realize that there’s a lot of myth busting for myself and a lot of invalidation of assumptions that I had coming in here and that there’s a lot of smart people here trying to do a lot of cool things with much more of a strong sense of community compared to a sense of competitiveness. But I was used to in the big cities and that’s something that stood out to me and I’ve got a little bit more of a history in the auto industry as well that made these really strong personal reasons for me to jump in and try doing this. 

Greg Alexander [00:04:56] If you wouldn’t mind, I’d love to hear of those personal reasons and your history in the automobile industry. 

Ashok Sivanand [00:05:01] Yeah, sure. I think so. One of my first real jobs was as a forklift driver in a manufacturing plant, and it was nightshift in East Hamilton in Canada. And Hamilton is a manufacturing town. Not too dissimilar from Detroit, was growing faster than Toronto was at a time when Detroit was growing faster than New York. And as manufacturing got outsourced and offshored, the city is kind of gone. The different towns that we know about now. And so the east side of the city is like many cities, the rougher part. And I was an international student. And so let’s just say I learned a lot that summer. And one of the things when it comes to that sort of my professional career was just getting to apply the systems, thinking that most electrical engineers have to do kind of watching electrons move through a circuit. I was able to see kind of how production was happening here and got to learn things like lean principles in terms of I was a forklift driver where I could really bring the most customer value by making sure that all the different parts of the lines were not blocked or starved and so forth, and then went on to work at GM at a plants in southern Ontario where they make the Chevrolet Equinox and now the GMC terrain. I believe it was actually a half Japanese half American plant. So Suzuki owned half the plant from General Motors, the other half. And we had like the movie Mr. Mom, we had like white shirts, blue pants. I had my name embroidered, and it was very different from most car factories that you’d see. And there was definitely a very strong Japanese influence to do how the production was done. I have in fact just this, but I’ve been told by a few people that it was the most efficient GM plant and a lot of folks kind of chalk that up or rationalize it to the the kind of Japanese influence. I, I shut the line down for 8 minutes one time. And at the time, gas prices are really high and these activities are selling like hotcakes. And I thought that I was going to lose my job the next day. And I called in. The general manager kind of conducted what I now know is a five rise exercise, and they made the process improvement right there. And then with all the right people in the room, understood the root cause of how this was allowed to happen. Where we’re burning turned to shut the line on for 8 minutes. And he, instead of firing me and thanked me for my transparency and I got much more confidence and got to learn a lot more about the mean. And so a couple of things that have happened since then. Number one, this was led to thousands. I was really bummed that all the software engineering talent was put on the building and manufacturing the cars more efficiently, and I couldn’t work on the vehicle itself and make it a more compelling vehicle to the consumer. And then flash forward, about ten years, I was working at a company called Pivotal Labs, and number one, they had taken a lot of these leading principles that had originated for building factories more efficiently and to running software teams with more humanity and ultimately getting more value for their customers. So a lot of it clicked for me. I didn’t understand a lot of the jargon, but the first principles were very obvious because it was all borrowed directly from from the Toyota production system and Lean. And the second thing is around 2015 was when that thing changed, where Consumer Reports said that more people were buying cars based on the technology in their compared to horsepower and torque, which were the the traditional selling factors. Right. And that was also the time that I was doing this little thing in Detroit. So the third part of the story was that I had I had I had, you know, be careful what you wish for type of thing, where I wanted to really be part of a compelling value proposition of the vehicle versus being hidden in the back room. And that was a time when when Detroit was really investing and becoming more of a technology town, companies like Ford were making big investments. And and I was at the you know, you could call it right place, right time for something that I’d hoped for ten years prior, understanding a lot of those first principles that somewhat ironically, the auto industry wanted to move their technology teams to working more like their manufacturing teams, believe it or not, in terms of getting the most efficiency and the best customer value out. But looking to Silicon Valley to teach them, even though a lot of it had originated in middle America the first place. 

Greg Alexander [00:09:23] Man, I tell you what, that is an incredible story From driving a forklift on the midnight shift to founding a software company and embracing a new small city, hats off to you mad. Respect for your courage and enjoying it journey. And thanks for sharing it. All right. Well, let’s talk about this concept of geography. So you just laid out what you’re focused on and why does the opportunity exist and how have you been able to, I guess, walk away from the temptation of being the next hot shot in Silicon Valley? 

Ashok Sivanand [00:10:00] Yeah, I think some of it is really values driven. And I know that you talk about iOS. I was lucky to have found iOS multiple years ago and we always knew we had what we had read the Netflix Culture Deck and said, Hey, we got it. We got to build one of our own decks this way. And I’d show up to the office on a Sunday and say, Okay, today we’re going to do culture and I’m going to write the culture down today. And I’d go home with an empty whiteboard. And just having ordered a lot of Uber eats iOS really helped us. Yeah, use a framework to arrive at the values and I think the values that are really important here, how we build software, our values work and melody, accountability and kindness and kindness is the one that stands out a lot to both our talent base as well as our customer base, because they both talk about, Hey, this is something that’s often forgotten. It’s something that’s often overlooked because we need to make a quarterly deadline where we need to hit a milestone, and that’s the first one to get out the door. Accountability is oftentimes kind of front and center. And I think the values that what kept me here in Detroit very much aligned with how I think software should be built. We’re building these code bases not to get one big launch out, but a long term iterative process. And we’ve got to think of the long term and we got to think of the team that we’re building it in the long term, the people that we’re building it for. And so taking the humanness out of it, taking the kindness out of it, really makes it a very short term prerogatives. And I think I haven’t fully understood the causation around it, but there’s definitely a huge correlation between finding folks who can act with those kind of values at the same time, deliver, show up, hold each other accountable. Kindness isn’t the same thing as niceness. Doesn’t mean we’re we’re not. We’re not we’re shying away from having difficult conversations. It means we’re really understanding that the other person I’m trying to problem solve with here is a human, too. And whether it’s a customer or whether it’s an end user that we’re trying to build for and have that rooted back in. And for some reason it’s been a lot easier to find. To find that kind of talent in middle America compared to the cities on the coasts or big cities like Toronto. And I think the customers also start to see that. Where when they engage with us, they see that come through in the engagement and every interaction in the meetings and the weekly cadence where as much as we want to be service oriented, that we do show up and we push back and we do point out some potential flaws in the way they’re thinking and offer them better opportunities as opposed to falling in line just because they’re the customer and the customer’s always right. And and I think that’s that’s something that, you know, exists both on the supply and demand side around here. And and interestingly, there’s folks, especially since the pandemic, is that us folks have kind of moved all over the place and we’ve become more of a hybrid company hybrid in the sense that we hire folks across the country and we come together or very specific in-person engagements or in-person workshops or conferences and folks on the coast to tend to want to come and work in this kind of Midwestern vibe, as you call it. And, you know, more objectively, the values that are that are listed on their careers page despite being based out of California or New York City, because they find that the employment opportunities that they have available to them there don’t necessarily align with who they have. And I think, as you know, I’m not the first one to say it on here. I’m sure that if you can find a value alignment with your colleagues and with your clients, a lot of the other stuff, like salaries and stuff, no longer are top of mind. You just have to pay market, make sure you’re not ripping anyone off. And folks feel like a stronger sense of purpose and community and working together and building is building these products together, solving these problems together. So I think that’s something that I haven’t fully been able to get into a spreadsheet, but it’s it’s a hypothesis that seems to keep paying off. Yeah. 

Greg Alexander [00:14:08] So you answer one of my questions, which was, you know, COVID now makes everybody remote or hybrid. So is geography still as relevant as it once was? It seems like it still is being applied slightly differently. The other side of the geography question and back to strategy, where to play, how to win in geography is part of where to play is. Back in the day, not too long ago, the clients at times would prefer local providers for a whole variety of reasons. You know, and I have read about what Ford Motor Company and the other great companies in Detroit are trying to do to revitalize Detroit. And I admire them for doing that. But now it’s post-COVID, you know, is that does it do the clients still want to do business with local providers or is it now geographically agnostic? 

Ashok Sivanand [00:14:53] I think geographically you still have to be willing to show up. Okay. And we’re seeing different companies come back to the office in different ways. GM is doing it a slightly different way than maybe I would where they’re saying, hey, twice a week, three times a week, we’ve got to come into the office. And that’s one way to go about it. I’ve noticed at Ford they seem to be a little bit more specific about what type of interactions they prescribe for in-person interactions. So they’re like, Hey, we do quarterly plannings, we do workshops. I’d like for you to come in so we can do that on a whiteboard versus trying to figure out how to do it over Zoom. But once you know what the work is and when it’s due and who your stakeholders are and why we’re doing it and everything else, the strategy part is all understand we’re lying and we feel like there’s trust between the team. Then go do it wherever you need to do it. When you put your heads down and get the execution done. And so we were always huge proponents of in-person. The the fact that we were one of the catch 22 is about being in a city like Detroit, is that we there’s a lot of opportunity, but there isn’t necessarily the talent base that you move to meet the demands of that opportunity. And so going hybrid allowed us to expand to a larger power base. At the same time, we set expectations pretty early with our folks that, hey, you’re going to be commuting way less than your last job or you’re going to be traveling a little bit more. And we make sure that every time we start a new engagement that we we go out of our way and make sure that the client’s willing to come in person and do it as well. And we fly in from wherever. So I think in terms of your question, I notice that there are some other firms who are still maybe stuck in that convenient space of just after the pandemic hit where no one had to travel. Travel costs were lower. There was a lot more convenience to it. And I don’t necessarily think that convenience outweighs the community that you can build with those in-person interactions, especially when you try to build trust with a new to meet or with a new client where that trust goes a long way six weeks later, and inevitably you’re going to have some friction. Do you earn the benefit of doubt with the client where they will get into problem solving mode versus people solving mode? Those are all things that we’ve noticed. Go right away when when we spend that time to show up in person. And again, I don’t want to speak for Midwesterner as being somewhat of an impact here, but I do sense that there’s a little bit more of a midwestern value of showing up to someone’s house, breaking bread with someone and building those trusted relationships before really getting down to our own and the bottom line. And so it’s maybe a little bit more metaphorical in terms of does the geography still matter? I think the the Midwest, the Midwestern values are still very much valid, whether you’re local or not. Yeah. 

Greg Alexander [00:17:42] Well said. Well, listen, we’re at our time window here. I could talk to you about this forever. But, you know, just to put an exclamation point on that last statement, we’re in the service business, so relationships matter. And relationships happen when they get face to face. It maybe it’s happening differently now. Maybe it’s not every day, but it does matter. So I think for the folks that are listening to this boutique service rooms, you have an opportunity to differentiate there, you know, and because sometimes big companies like the big auto companies, they do business with smaller firms because of that relationship factor. I mean, who wants to be just another client of Accenture, whereas they can be, you know, your most important client kind of concept. So try to take advantage of geography when you can. Well, listen, on behalf of the membership, just wanted to thank you publicly for being here. I’m really looking forward to the Friday Q&A session with the members. I know they’re going to have a ton of questions on how you learned learned the Toyota production system and the five whys off of a forklift and how that made its way to Detroit. You often don’t hear people say, I live in Detroit and love it, and that’s contrarian by itself. But and we’d love to hear all about that. And, you know, we’re now that it’s post-COVID, we collectively are starting to do some event events. So when the weather gets warmer, I’m going to call you and say, hey, I’m going to get 1012 collective 54 is going to come see you in Detroit. Want to show us around the city. So like fun. 

Ashok Sivanand [00:19:08] Okay, that sounds great. I look forward to it. 

Greg Alexander [00:19:10] Awesome. All right. All right, listeners, let me give you a couple of calls to action. So if you’re a member, be sure to attend the Friday Q&A session regarding geography here and with The Shook. Couple of tools I want to draw your attention to. So in the Boutique companion course, that’s the e-learning modules built around the boutique framework, There’s a strategy template that you can download and it talks a little bit more about geography. We also just wrote an EO slash collective 54 integration plan, got a lot of members that run the U.S. We run our firm in the U.S. We love it. We think it does need to be customized to be relevant to professional service. So if you’re in your iOS shop and want to learn more about that, go to the resource center and download that. If you’re not a member and you want to be because you want to meet really cool people like you did today, go to collective 54 dot com, fill out the contact us form and somebody will get in contact with you. If you’re not ready to be a member but you want you want some more outstanding content like this podcast. Subscribe to collective 54 insights and you’ll get three things. Monday, a blog, Wednesday, a podcast, and Friday a chart. Okay with that. Thanks for listening. And until next time. Best of luck.

Episode 114 – How the Founder of a Marketing Agency Dealt with Key Employee Risk – Member Case by Kimberly Kraemer

Key employee risk is a very real threat to founders of boutique professional services firms. Small, people driven businesses are overly dependent on key employees. If a key employee resigns, the pain inflicted on the owner is intense, and the financial impact on the income statement is large.  On this episode, Kimberly Kraemer, CEO at Waterhouse Brands, shares how she suffered the loss of a key employee and how she survived it. In addition, hear how Kim re-engineered her firm to prevent this from ever happening again.  


Greg Alexander [00:00:15] Welcome to the Preserve podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. For those that might not be familiar with us, Collective 54 is the first mastermind community dedicated entirely to the needs of this unique group. Folks at a leading boutique processor firms. My name is Greg Alexander. I’m the founder and I will be your host today on this episode. I hope to make you aware of a really big risk. And that risk is called key employee risk. And simply stated, what that means is, as a small service firm, we only have X number of employees, so each employee’s contribution is very important. However, we also probably have the 8020 rule, which would which means 80% of the value, so to speak, is generated by 20% of the people. And sometimes one of those great people walks right out the front door. And when that happens, it can have a disproportional effect on a small firm just because the law of numbers would say so. Now, there’s lots of things we can do to mitigate key employee risk, and that’s what we to talk about today. We’ve got a fantastic role model, someone who lived through this and is thriving as a result of it, which is somewhat counterintuitive, but that’s why she was chosen for the show. Her name is Kim Cramer. Kim, it’s great to see you. Thanks for being here. And please introduce yourself. 

Kimberly Kraemer [00:01:45] Hi, Greg. Thank you. And thanks, everyone in the collective 54 community. I certainly have learned a lot from watching everyone else describe the journey they’ve been on. And fortunately for me, Collective 54 helped me navigate my key man risk journey. So a little bit about myself. I’m Kim Cramer, founder and CEO of a boutique firm called Waterhouse Brands. We were formed in 2017 and our focus is on helping life sciences companies build, define and build their corporate and their employer brands. We launched based on what I saw as a key gap in the market, which was for a brand communications firm that could really do more than just come up with a logo and an identity and a website. It was really about telling a company scientific story in a way that put their most valuable asset, which is their employees at the center. Science is complicated. We’ve spent a lot of time and helped these companies really translate that science into English that Wall Street can understand. And what we found is that so many companies just really focus on investors and they focus on partners and they focus on patients, right. All the players in the health ecosystem. But the last in the bottom on their list was employees. And so we wanted to come up with a solution based on a methodology that we had created called ALIGN, that help these companies feature their employees and build a culture that enabled them to go not just from great science and innovation and smart team, but have a culture that helped them become a successful well executing business. And so that was the genesis of Waterhouse Brands and really put my close to 30 years of experience on the corporate and agency side in communications and brand marketing in an industry that I’ve basically grown up with love, biotechnology, put it all together and put it to work. 

Greg Alexander [00:04:01] Well, very good. That was an outstanding description, I can tell you. Very good at your craft. I have a clear definition of of who you serve and what you do and how you do it and how you do it differently. So that was really, really good. All right. So I’m going to ask you to tell us a story. I understand that you suffered from key employee risk, and I’d love to hear, you know, what happened. You know, to the extent that you’re willing to share it and and how you dealt with it and the lessons learned along the way. 

Kimberly Kraemer [00:04:33] Sure. Well, like many start up boutique consulting firms are really growth strategy and build the team strategy was based on tapping our network. It was about who did we know, who had skills and experiences that could help us take our services and bring it into defined categories. In terms of employer brand, having a competency there in terms of digital brand and activation. And so we put together this team based on our network and. One of those people was more of an operations person. So we if you follow the EOS methodology like we’ve been trying to, you know, there’s a visionary and that was kind of the role I serve, you know, that there’s an integrator and my co-founder who is more of a linear thinker and kind of get stuff done. She really served that role in helping us build out our client services competencies. And we had more of an h.r. Person who was really helping to spin up employer brand. And then we had the manager of operations who was more of a jack of all trades person, but she was so competent and so efficient that I just let her do everything from financials to our h.r. operations. So onboarding off porting manuals, benefits comp, all of the different aspects of a business that in the earliest of stages you’re trying to fill those boxes. So that worked well for a while. We went from 2017 where we were consultants to 2019, making the decision to scale smart. So every year I have a theme and scale Smart was converting from independent contractors to FTE eyes, and she took care of all of that. 2020 Just as we coincided with the pandemic, we had a theme of play bigger, and that was really about owning and amplifying what made us unique in our industry and in our as a service provider. And we were fortunate that we were able to really expand our our client base. And with everyone working from home, you know, we were very well utilized. We were building we had not much else to do but work and drink in our off hours. And there weren’t many of. That’s right. So. Fast forward, we we had a banner year in 2020. We grew our revenue by something crazy like 38% top line growth. Wow. And profitability was strong, too. And then we got out a little over our skis. I would say that the the there were tensions in the system in all levels of our organization. Our ops person felt like she should be the ceo. Our h.r. Person didn’t feel like she really wanted to work on the business and in the business, but we didn’t need a full time h.r. Person. So we were starting to just kind of I think we were all going crazy from the pandemic, frankly. Yeah. But i’ll get to this key man risk and what happened in just a moment. In 2021. Our year of going from play bigger. Hey, we did it. We added all these clients to Now let’s level up, let’s go to scale. Let’s figure out how to hire some more people to help increase our capacity and service clients. Well, we made some really dumb mistakes in 2021. We hired, I’d say, four people, five people that were experienced, but they weren’t right for the role. We didn’t know what the roles should be. And as a result, as the wheels were falling off the boss at a leadership team level and we were hiring more mid-level manager people and people that do the work. It wasn’t working. There was culture. There were the wrong people for the wrong for the roles. And so we had to take a giant step back. We let go of three key people, including the head of h.r. Who was also working on the business, and that had a devastating ripple effect. And then things really came to a head with the ups person and we parted ways and we let another senior person go who just wasn’t able to hunt. They were great at doing one thing and one thing well, and that was it. But that wasn’t the role that we needed. So long story short, as this was going on at a leadership level, culturally, the the more the worker level, there was a lot of negativity, toxicity and drama. So we had to really press the reset button hard. And 2022 became all about the theme of right sizing. And so I’m happy to report that although we had common risk in these two several departures, but the h.r. And ops person departed. What happened to me was that i ended up picking up the slack, me and my co-founder, so i would have given myself a b at best on a good day of how I can do operations. It’s just wasn’t really what I was born to do. So I’d say that going through this transition, we decided we needed to diversify. We hired an outsourced finance firm which also had a bookkeeping arm. We professionalized our h.r. Capabilities by hiring a outsourced h.r. Business partner, and we got a great employment law firm to help us structure things correctly from the get go. And so now we’re in the mode of coming off of a year of we’re not going to focus on growth, although i’m happy to report that even with not focusing on growth and while bumbling along through the year doing h.r. And ops on my own with my co-founder, we had achieved 20% topline revenue growth. We were pretty good ability by 3%, an additional 3%. And we had made the decision by the end of the year to hire in-house a director of finance and operations. And lo and behold, today is his first day. And I think he is an example of the purposeful process that we put in place to make sure we knew exactly what the role would be, exactly what the qualifications and the phenotype and experience should be, and had worked with a recruiter to help us. Scour the universe of who’s good and get the right fit. Not just from a skills and capability standpoint, but from a culture standpoint. So the jury’s out. But in this key man risk, how do I mitigate this in the future? I’m going to keep our outsource resources. And so I have that strategic advisor. But he will now be the point person for H.R. operations, because he also, in addition to being a financing accounting person, has a advanced degree in organizational development, and he comes from a digital agency. So I don’t have to teach him the agency business, which is great. 

Greg Alexander [00:12:39] He’s a keeper. That’s a rare combination of skills. 

Kimberly Kraemer [00:12:43] So I don’t know. I think that may have been too long of a story. No, no. 

Greg Alexander [00:12:46] No, no. You kidding me? That was absolutely fantastic. So many things that you said in the journey. They’re going to resonate with our members. They’re going to have all kinds of questions on the Friday Q&A that they’ll be able to have with you. The main thing that I wanted to highlight and underline and Ken story is that this is what happens, right? I mean, rapid growth. And Kim, who is obviously a fantastic practitioner at her craft. And when you when it when key people leave the firm, next thing you know, you’re not practicing your craft. You’re working on all kinds of other stuff, finance, H.R. ops. And guess what? She was giving herself a B if I asked you. Kim, we having a good time while that was happening, you probably would have said, I want to jump out the window. Right. It’s just not fun. Not only is it is it painful in terms of the business and the drama and, you know, the toxicity that you talked about personally, you just not having a good time and you scratching your head saying, hey, why am I doing this? I mean, he had a 30 year career. You probably don’t need to do that. So you’re doing this for reasons beyond money, etc.. And that’s what happened. So the the solution that you talked about, which is strategic outsourcing, you know, certain functions, I think is a great solution. And there’s all kinds of high quality providers out there, many of which are in the collective that you can rent, if you will. And because you now hiring a vendor as opposed to employee, the vendor has multiple employees, so you’ve diversified your risk right there. It’s a firm, not a person. The other thing that I would I would mention and Kim, I want to talk to you about this, is that, you know, I just wrote an entire book on this very subject. It’s called The Founder Bottleneck How to Scale Yourself. And it talks about how key men risk in the role of founder. I mean, if something, God forbid, happened to Kim, what would happen in water house brands probably wouldn’t be good. And you have to build a succession plan for yourself, not only to protect the business in the event of some tragic outcome, but also eventually. There’s other things you’re going to want to do with your life. Let’s say you want to sell the firm someday. Well, if the firm is completely dependent on Kim, she can’t sell it. Let’s say she wants to become chairperson instead of CEO or managing partner and work on visionary items as opposed to growing the day to day. Then someone’s going to be able to do what she can do and what a co-founder can do as well as she can do it so she can delegate and elevate to use the U.S. terminology. So succession planning is so mission critical for the boutique service firm. And it’s one of those things, unfortunately, that you can kind of kick the can down the road because it’s you know, it’s not a 90 day rock. You know, it’s it’s actually a multi-year journey to pull off a real succession plan. So it’s easy to just say, I’ll get to it someday, and then all of a sudden one of your key employee quits and you’re like, Oh my gosh, like, I need to get to that now. Or not Only is the business going to suffer, although in Kim’s case, it actually performed quite well during that environment. But you’re going to be miserable in your job. You’re going to have to start doing things in the weeds that you don’t want to do. So, Kim, have you thought about succession planning? I know that’s a big subject and probably out of scope for today’s call and we’ll talk about it more on Friday. But has this torch anything regarding succession planning 100%? 

Kimberly Kraemer [00:16:07] I do think that. I mean, you talk a lot, Greg, about the here being the hero and the ego, right, that comes with as a founder or a leader, that nobody can do things as good as I can. So I’m just going to do that. Right. So I’m past that. I would love to have great people that can do the things that I do and do them better. Like everything you talk about on your Friday calls, Greg, and that you’ve written about in the boutique and in the Founders Bottleneck, so resonates with me. So I am in the process right now working with our HBP on succession planning and really thinking about. So this year, our whole theme is about synergy rising, synergy rising our teams capabilities. We have a diverse mix of people with marketing and communications and digital and design expertise, but it’s how can we work together smarter and better and how can we as a group look at the kind of work we’re doing, the kind of client engagements we take on and think about where the gaps in the organization are and not only how can we fill the gaps, but how can we strengthen the the areas where we as individuals all perform well so that we have some relief and some redundancy. Otherwise, we’ll never be able to scale. And we know. 

Greg Alexander [00:17:34] Yeah, exactly. Well said. Okay. We’re at our a time window here and I want to save, you know, this rich conversation for the Friday Q&A session. But, Kim, you’re a joy to talk to. I’m not surprised that your firm is doing so well. Your generous spirit. That story was absolutely fantastic. On behalf of all the members, thank you for contributing and giving back and being here today. 

Kimberly Kraemer [00:17:55] Thank you, Greg, for doing the work that you do. You have helped so many entrepreneurs and founders, and I’m really blessed to be part of this community. So thank you. 

Greg Alexander [00:18:03] Okay, great. All right. Let me give the audience members some calls to action here. Okay. So if you’re a member and you’re running on EOC, which we fully endorse, we run off collective ITV4 in the U.S. We just wrote a U.S. collective 54 integration plan that might be helpful. For example, you know, EOC advocates are running your business off a scorecard, but what should the metrics be? You know, professional services metrics are very different. What should the benchmarks be? We have the benchmarking database, etc.. So go to the resource center and download the EOC Collective 54 integration plan. That’s one thing. Secondly, if you want to, you know, start implementing some of the concepts and the final bottleneck and succession planning, there’s a companion course tied to the book that should be out by the time this recording gets released. There’s a tool in there called Roles and Responsibilities. I highly recommend you download that and get familiar with it. So those are a couple of things that you can do as a member. If you’re not a member, your calls to action are to become a member. Go to collective 54 dot com and fill out the contact us form and a representative will get in contact with you. If you’re not quite ready to join, you can subscribe to collect the 54 insights. You get three things every week on Monday, a blog on Wednesday a podcast an on Friday, a a chart that talks about some of this benchmarking data. All right. Boy, that was a lot in 20 minutes. I’m exhausted. I need a break. But for those listening, thanks for tuning in every week. And thanks for being here. Until next time, we wish you the best of luck as you try to grow, scale and sell your firm someday.