Only 9% of all MQ’s (marketing qualified leads) every result in a conversation. Worse than that, you have now stimulated your target audience to explore and investigate your competition. 91% of all marketing dollars are a waste. This is because Sales only contacts a prospect two times, rather than the 6 times requested or required.  That leaves 91% for your competitors to speak to. But the good news is, everyone else is doing the same thing. It may all work out.

—-more—-

Sales says the lack of reach means low-quality leads. Marketing says good targeting means good quality leads, but without feedback, they’ll never know. Marketing says, “You know, those salespeople, they won’t talk to our leads!” Sales says, “Your leads suck!” which is translated to “we can’t reach them. The best leads are those who are busy and important. The easy ones to reach aren’t the best leads, yet sales is asking for precisely that – leads that are easy to reach.

What you really want are the ones that are most likely to need, value, pay fair prices for what you have and work with you and your team to solve their problems.

Don’t mistake the dog who comes up and licks your hand with the one who will defend your house. Tune in to this episode to hear a story about single malt whiskey, the mother liquor, and leakage to the distillery across the road.

Market Dominance Guys is brought to you by:

ConnectAndSell. ConnectAndSell allows your sales reps to talk to more decision-makers in 90 minutes than they would in a week or more of conventional dialing. Your reps can finally be 100% focused on selling, even when working 100% from home since all of their CRM data entry and follow-up scheduling is fully automated within ConnectAndSell’s powerful platform. Your team’s effectiveness will skyrocket by using ConnectAndSell’s teleprompter capability as they’ll know exactly what to say during critical conversations. Visit, ConnectAndSell.com where conversations matter.

 

Uncommon Pro – Selling a big idea to a skeptical customer, investor, or partner is one of the hardest jobs in business, so when it’s time to really Go Big, you need to use an Uncommon methodology to gain attention, frame your thoughts, and employ a sequencing that is familiar to convince others that your ideas will truly change their world. Through Uncommon Pro’s modern and innovative sales, scripting, and coaching toolset, we offer a guiding hand to ambitious Sales Leaders and their determined teams in their quest to reach market dominance. Today is the day things change. It’s time to get “uncommon” with uncommonpro.com.

The complete transcript of this episode is below:

 

Corey Frank (00:35):

Welcome to another episode of the Market Dominance Guys with Corey Frank and the Sage of sales, Chris Beall with all things market dominant-oriented. So today, Chris, we were chatting a little bit yesterday after your appearance on Sales 3.0, with our friend Gerhard. So we can certainly talk about that, but I think a little piece of peanut butter that was stuck to the roof of our mouth that you and I kind of riffed on before this was this topic of sales and marketing alignment. You’re very kind and you let me wax philosophical for a while, a few minutes. You’re an excellent listener. And then you very respectfully and gracefully said, “You know, Corey, sales and marketing alignment is a myth.” And I said, “Well, that’s a topic for our podcast.” What do you mean by that, Chris, sales and marketing is a myth? I thought sales and marketing alignment is the goal as the reality companies like serious decisions make a living off of that type of data. So let’s start there.

Chris Beall (01:38):

Yeah, it’s, it’s kind of funny. I mean, sales and marketing alignment as an issue has an assumption. And the assumption is actually the inverse assumption. That is, if sales and marketing were aligned, and by sales and marketing alignment people mean, do they share the same goals, do they have the same metrics, do the metrics interlock? So if marketing does their thing and they do as much of their thing is they have committed to the company to do, and if sales does their thing and they do enough with marketing’s leads that they generate, their marketing qualified leads, as they’ve committed to do, then all good things happen. But there’s one good thing that doesn’t happen. And that is information flow coming back from sales attempts to turn marketing qualified leads into actual sales opportunities and marketing’s attempts to go out and get more marketing qualified leads. That is it’s an open loop process. And the reason it’s an open loop process is twofold. One is just raw and that is only about 9% at maximum of marketing qualified leads if I’m QL has ever spoken with ever have an actual human conversation.

Corey Frank (02:50):

Wait, wait, wait, I just want to make sure my mic is on properly. Did you say 9%? How’d you get to 9%? It sounds like a very specific number. You didn’t say the crispy align now doesn’t say around something, he says specifically 9%. So I’m sure there’s a mathematical formula behind that.

Chris Beall (03:07):

There is, and there’s also a set of observations. I want us to ask John Neeson, this question. I called him up. John Neeson’s one of the founders of Sirius Decisions. I was a customer/client, I suppose what you’d call us. And we were having fun talking about a bunch of things with the Sirius Decision folks, Jason Heckel in particular christening the connect and sell weapon as the Iron Man suit of business, which I really liked. And I think we continue to riff on that through the years that I think Jerry Hill talks about this a lot of the Avengers, there’s only one who actually just human, like the rest of us and that’s that’s Tony Stark. And what does he do? He puts on the Iron Man suit. And yet he is the one most likely to save your planet when it’s in trouble or whatever it is Avengers do for a living.

Chris Beall (03:53):

I’ve been enjoying the relationship with Sirius Decisions, but I really felt like I wasn’t getting a lot of fresh information during this one period. This was a long time ago. And so I called up John Neeson and I said, “Hey, John, I got a question. I’ve done this kind of work in my head.” And I had, it had been from 1:00 in the morning until about 2:30 in the morning, lying there in bed, calculating in my little pea brain. And I have a number in mind. And I’m wondering if the number has anything to do with what you’re observing. And the number I’m curious about is what is the conversation coverage of MQL? So of marketing’s output in terms of lead in particular? What is the maximum conversation coverage you’ve ever seen as a firm among your clients? And he said 9%. And I said, “That’s interesting because my theoretical maximum is 9%.”

Chris Beall (04:43):

And he said, “Well, how do you calculate your way to 9%?” I said, “Oh, it’s easy.” The policy for most sales groups that are doing anything with inbound leads is they’re going to call them to try to get a conversation. And they’re going to call them six times. The fact is they call them two times and each one of those calls has a one in 22 chance of generating a conversation. So 2 in 22 is 1 in 11, right? And 1 in 11 is well, 9%. It’s actually a slightly different number, but close enough, if you start throwing all them decimal points out there, people get [inaudible 00:05:24]. 9% it is. And I asked him, “Is this for real? You don’t ever see anybody with 36% or 21% or whatever.” He says, “No, no.” And I asked him, “Does that mean what I think it means?”

Chris Beall (05:37):

And he said, “What do you mean?” I said, “Well, does that mean that 91% of all marketing budgets are pure waste?” And there was a long pause and he said, “I would prefer not to answer that question.” So, that was where the conversation ended. And I agreed with him answering that question wouldn’t be good for anybody. But I thought about it, and I came up with this analogy and I had just been with the family to Scotland. And we’d been over to the Isle of Skye and you know, Corey, I do not despise a good single malt whiskey that comes my way.

Corey Frank (06:12):

At least three fingers, four fingers. Yes.

Chris Beall (06:15):

I don’t turn up my nose at it. In fact, I tend to put my nose fairly close to it as part of the process of enjoying it. And we’d been over to the Isle of Skye and visited the Talisker Distillery. And, a nice family event, both of my boys were old enough to visit the Talisker Distillery at that point, just barely. Had they been in the U.S. this wouldn’t have worked out so great, but we were in Scotland. So it was just fine. So we drove down one of those little, one lane roads, the kind where you have to pull off to let somebody go by and they have the big poles that are showing you in the distance, the distance being about two or 300 yards away where the next pull-off is. We went down to the Bay, came back, went to the Talisker Distillery and watched them making the Talisker.

Chris Beall (06:59):

And they make it in two buildings. So in one building, they have, what is really beer, I suppose they call it the mother liquor. And, mind you, I’m no expert on this stuff. I know how to drink it, but I don’t know how to make it, right? So they have this little machine that’s grinding up the the grain in question and they’re malting it and they’re doing whatever they do. And then they’re taking that product in pipe, the pipe goes up and across the ceiling and through a hole and it goes into another building. I asked why. And they said, “Well, the mother liquor doesn’t explode, but the still sometimes do.” Well, that’s good. So you keep that in another building, so you minimize your losses, right?

Chris Beall (07:38):

And I thought about it and this 9% thing. And I thought, okay, so here’s the mother liquor. It goes up, it’s pumped up across this pipe. And it goes over there to the stills. And it’s turned into this really, really valuable product by the pound. A good single malt whiskey is pretty valuable product for something that is mostly water. Well, actually at that point, it’s not mostly water. The 57 degree North is actually mostly alcohol, but regardless it goes up and goes across. And I was thinking about it and thinking, so if I had looked up there and instead of seeing that pristine pipe without a single drip coming off, then going over there, and instead of 91% of the mother liquor was pouring out on the floor, do you think, I’d say we have an alignment problem. Of course I wouldn’t. I’d say we have a leakage problem for us. [crosstalk 00:08:21]

Chris Beall (08:21):

And do we know how good the mother liquor is, if only 9% of it’s getting over there. What if the leakage is not at random? Or even what if it is at random? So, how do we know how good the product is unless we can actually use the product. And so here we have a wonderful product for all we know, which is marketing’s contribution in terms of MQLs and sales does turn their nose up at it by and large. And they do it because people are hard to reach.

Chris Beall (09:51):

They actually do it for the same reason. It’s as though, when the mother liquor got over there, you wouldn’t even put it in the still because it’s liquid. And you don’t want to put a liquid in there. But that’s the nature of it. It’s the nature of interesting people who are worth talking with that they’re hard to reach. In fact, the more interesting and valuable they are, the harder they are to reach because [crosstalk 00:10:10] people are busy. It’s so simple that the mother liquor is liquid, important people are busy, and this is not accepted by the individual sales rep who says the following, “I tried to call them. They didn’t answer. They must not like us. They must be disqualified.” So you think of the idea of disqualifying an inbound because they didn’t answer the phone is very popular and applied to 91% of all inbounds at random. But it’s worse than random.

Chris Beall (10:46):

It’s actually selectively applied to those that are the best. So the best leads are the ones least spoken to because they’re the most important people, and they’re the most busy people. So the way I came up with that 9% was, as I said, that the policy is always calling six times. The policy is in the hands of the reps and the reps call them twice, if they call them twice. If they’re not busy taking a call somewhere else in order to make some sort of a ridiculous activity number. Guess what, by the way? When you do call somebody and you do get ahold of them, they tend to also still be busy. So there is a problem though, and the problem is not any efficiency problem or any of those kinds of problems. The problem is that it makes an open loop process. So your entire marketing budget’s purpose is to generate MQLs that might be of value. And to convert them, you have to talk to them. You can’t not talk to them. And B2B, nobody does business with you without talking to somebody. So without talking to them, they go away. They leave.

Corey Frank (11:49):

So the purpose of marketing is to do what again?

Chris Beall (11:52):

Is to generate leads, which are contacts with people who are potentially worth talking with.

Corey Frank (11:58):

So when I thought you said. For who, for you? Or for your competitors, because you had an interesting riff the other day when we talked about this, that the majority of the marketing expense. 91% not only are pure waste, but that 91% of the marketing budget for your team is likely contributing to the success of your competitor. I think you were riffing about.

Chris Beall (12:26):

Oh yeah,

Corey Frank (12:26):

Because it was very compelling.

Chris Beall (12:27):

Well, think about it. You’ve stimulated somebody at this moment to take action. You’re out of your mind if you think the only action they took was to come to your website. That doesn’t happen. Anybody who is interested in addition to being interested in whatever brilliant piece of content you put out there, your white paper, your this, your that the other thing, right? If they’re interested, if they’re worthwhile in the question of whether somebody can help them solve a problem. Now, you might have zero competitors and no other way to help solve the problem. None whatsoever. That’s possible. That’s probably not a very interesting business. I mean, even we have competitors here at ConnectAndSell for what they’re worth. So, what happens when you stimulate action? When somebody starts to take action, they’re more inclined to continue to take action. Until they take action, they’re pretty inclined to do nothing.

Chris Beall (13:19):

I just was asked by some piece of software to take action that involved getting my phone and seeing some digits that were on it so I could do a two factor authentication. But I didn’t do that because I was here about to start talking with you. Now, the chances of me taking that action have gone to zero, right? Had I done that, that action would have been followed by other actions because once you start taking action there’s action momentum. You do one thing after another. So here you’ve stimulated somebody to take the action of checking out you and your competitors. [crosstalk 00:13:53] And now you chose to not speak with them other than working for your competitor at that point.

Corey Frank (14:00):

So to further your analogy of going to Scotland, it’s as if that leakage that you saw overhead was somehow being directed to the Macallan factory that the frog or the, the NSC or wherever else that extra mother liquor is going to some other competitor. They’re generated it, they put the facility in place. They have the people who are putting in the raw materials, but it’s just going right downstream to fill in somebody else’s coffers.

Chris Beall (14:34):

Yeah. And not only that, it’s going downstream, probably in a pipe that somebody put together and there’s a tour bus out there waiting me to the other distillery to buy their stuff. Yeah, it’s really pretty appalling. And the only good news is everybody’s doing it. And so, you know, you get lucky, right? You get lucky because if my 9% is fighting everybody else’s 9%, then maybe we’re all going to do okay. So maybe I’ll, [crosstalk 00:14:59] maybe all I’m doing is wasting 91% of all the dollars. Now, if you’re a venture finance company, then that means that you’re giving up that additional part of your company to the venture finance folks. So you’re actually, you’re giving away the company. The multiple of revenue you would’ve gotten as valuation that you’re giving up by having that 9% be 9%, instead of say 60%. 60% is actually achievable.

Chris Beall (15:25):

Very straightforward. So let’s say you had 60%. What does that times nine that’s, roughly speaking, [inaudible 00:15:33] so here I got the 60%, right? It’s not quite seven. And so I got, I would have seven times more revenue, assuming everything’s linear. Assuming that there’s no special thing about the 91% you’re not talking to. Turns out there is, they are better than the 9% you’re talking to. But say there weren’t a special thing. Say they worked better. So they’re just the same. So now the just the same times six you could have had, but you chose not to have that, right? So that means the valuation impact of your marketing budget, which is often 20, 25, 30% of your company’s entire budget to what you were hoping for, which is maybe, I don’t know if you’re a SAS company, there’d be four or five, six, seven times revenue, right?

Chris Beall (16:19):

So now you’re giving that up. So say it’s six times and you’re giving it up at six times revenue, right? So you’re giving up $36 for every dollar you fail to talk to, so to speak. You spend a dollar on marketing, you fail to talk to them, and you give up 36 bucks evaluation and you do it in the name of increasing valuation by spending money on marketing. So the response is to keep spending on marketing and keep spending on sales at the top of the funnel where you’re overspending also probably by a factor of six, because you’re not talking to enough people. And then when that doesn’t work, you go and you talk to the experts and say, “How can I get sales and marketing on the same page?” It doesn’t matter…

Corey Frank (16:58):

Or worse. Let’s keep hiring sales reps because we have an abundance of marketing leads, or so they think. But they’re really only being attempted once or twice.

Chris Beall (17:09):

Yes. Yeah. And remember always it’s the conversation flow rate, the flow rate of relevant conversations that drives the value of a business and drives its move into a marketplace that it wants to dominate. It is never anything else other than the flow rate of relevant conversations. And what do you have to do with them? You have to make them quality conversations. How do you do that? You focus on psychology, not on product. How do you do that? You build trust. We’ve we’ve been through all of that kind of stuff, right? Build trust in the first seven seconds, don’t blow it over the rest of the relationship. There’s a bunch of things you can do, but until you speak with them, can’t do any of those things. So you’re either going to waste money, spin your wheels. Literally it’s like spinning your wheels, smell the smoke, join the squealing and then put up with grief because your marketing people are going to say the following, “You know those salespeople, I think, we’ll talk to our leads.” And the sales people are going to say, “Well, the leads suck.” By suck, the salespeople mean I can’t get ahold of them, right? And, by great, the marketing people mean they’re about as relevant as we can make them, given the information that we have.

Chris Beall (18:15):

So they’re talking about two completely different things. The misalignment actually isn’t the definition of something completely different. Sales says lack of reach. I can’t get ahold of them is low quality. Marketing says good targeting. As far as we can tell, it was high quality. Without the feedback flew from coming from conversations, marketing, we’ll never know if they’re telling the truth. And without talking to those prospects, those leads, sales will never know if they were any good.

Corey Frank (18:46):

So how do you fix it?

Chris Beall (18:50):

Talk to them, [crosstalk 00:18:50] talk to them. I mean, it’s pretty simple: talk to him. And you’re not going to talk to all of them. But talk to the ones that will talk with you.

Chris Beall (18:57):

So sure enough, you, you want to send them emails and do all that good stuff and you’re going to harvest whatever you’re going to harvest. By the way, your competitor’s doing exactly that. You want to win where your competitor is not winning. You want to take what they got, fight them over there, right? Take the freebies. The free part of the market for you to dominate are all those folks your competitors are not talking to. So the ones that answer the phone generally, the first time they’re called, maybe everybody gets those. The ones where it takes two calls, maybe a 50% of everybody gets those. Now we’re down to the ones that takes three or four. Now we’re down to the busy people. The more navigated phone calls it takes to get ahold of somebody, the more valuable they are as a takeaway from your competitor, because your competitor is not going to go down there.

Chris Beall (19:44):

My climbing partner, Jim Hagar, I used to used to go hiking and climbing a lot in your neck of the woods, except up North. Up in grand Canyon. So we’d go down in there and wander around, go down one of those trails, like the hermit trail. And I go over and see whether we could climb something ridiculous like this thing called the Monument. Don’t ever go climb the Monument, by the way. It’s rotten at the base and scariest all get out, but we’d go around looking for opportunities to stand on the summit of things, pointlessly and look around and say how beautiful it was. And then make ourselves shake in our little climbing shoes as we were felled off some crappy anchor that we managed to put together up there. And we noticed something really obvious, but it’s the same phenomenon. As you’re coming back up out of Grand Canyon, you run into a line and we called it the flip-flop line.

Chris Beall (20:34):

And the flip-flop line is the farthest the tourists will go down into Grand Canyon. And it’s comically close to the rim. Now, thank God for the tourists. It’s close to the rim because that is a dangerous place down there, especially when it’s hot. You are on the rim, you’re at whatever that is, 6,000 feet, 7,000 feet. Everything’s great. You start down, it gets hotter and hotter and hotter and a lot of tourists tend to show up. And some times a year that are pretty hot and they’re galled into it and I would go down. But fortunately, most of them turn around by what we call the flip-flop line. All the beautiful places, all the cool places are way past the flip-flop line. So we had those to ourselves. We had market dominance when it came to the most beautiful parts of Grand Canyon and as consumers of that beauty and of the fear that came with it, we wanted that dominance.

Chris Beall (21:29):

So we were very happy that our competition, which was the tourists who’d come out of the tour buses would only go down to the flip-flop line, which by the way, it was just past a half a mile down into the Canyon. And so you’ve got to go about 11 miles down the Bright Angel Trail to get down to the bottom or 6.2 if I remember correctly off the top of my head. This is going back a few years here, of course. [crosstalk 00:21:52] Going down the South Kaibab Trail. That’s the rule. Now of course, if you went out to one of the least frequent of trail heads, that is, you’ve got a great marketing department that goes where the other people don’t go, flip-flop lines, right at the top. Nobody even goes down those, right? So the more valuable the resource. In that case, the beauty of the Canyon, in this case, those really good prospects, those leads that are hard to get ahold of. The more valuable they are, the less likely you are to talk to them.

Chris Beall (22:22):

And now you get a skewed marketing signal back from sales. Sales will accidentally tell marketing the following, “Go get more of the ones that are easy to reach.” That’s what they’ll say.

Corey Frank (22:34):

That’s right.

Chris Beall (22:35):

But that’s not what you want. What you want are the ones that are worth the most, that are most likely to need what you have to offer, value it, as it should be valued, pay a fair price for it, and, best of all, work with you and your team to get the maximum value out of it, so they’ll become a great reference. And they will work with you and for you to help you dominate the market. So it’s all perverse. Where ‘is it easy’ as being mistaken for ‘is an important’, which I believe a lot of people do in almost every area of their life. But in this one, that’s particularly devastating. When applied to [inaudible 00:23:13]

Corey Frank (23:14):

It is common nature, human nature to say, listen, I confuse sometimes activity with kicking butts. And if I’m a sales rep and I’m getting a lot of low margin, high volume, one bagger, easy type of leads that are closed and converted, I get a pat on the head from my sales manager. My sales manager gets a pat on the head from the director and so on up the food chain. And we somehow think probably from a false positive perspective that we’re actually dominating our market, we’re well on our way, we’re beating our numbers. But what I hear you saying is that, listen, clearly there are different flavors of customers based off of margin or ideal customer profile, which is a misnomer as, as it is, which is a conversation we can have too, one of these days.

Corey Frank (24:04):

And so the more rich the nectar, the flavor is deeper and those tough to reach prospects are worth it. That’s where the gushers are. Those are the market makers. Those are the clients that are the influencers that have the reciprocal effect to tissue and the direction of market dominance. So don’t necessarily be fooled at the early stage when you can convert a lot of the quote-unquote easier. In other words, your sales conversion rates may be too high early on, and that may not necessarily be a positive.

Chris Beall (24:42):

Yeah, there’s a problem with low hanging fruit. Everybody else can pick it too. [crosstalk 00:24:48] It’s hard to compete based on being the best, low hanging fruit kicker in the world. Sure. You got to go get it. No reason not to, but you make market dominance happen a little farther up the tree. Now we have a situation just like you referred to where one of our very, very best customers in some ways, our very, very, very best customer I connected to. And if I look back and I have looked back over the amount of time it took to get the first conversation, to have that conversation, and to have the followup conversation of the followup, to the followup, the followup to the followup, and then finally the meeting and then it got harder. And I will never forget until I forget everything. I have it strongly in my memory, a five-hour conversation that I had with two people at that company that went through Thanksgiving dinner. Three hours on one side and two hours on the other side.

Chris Beall (25:47):

And I was talking to him the whole time and I finally finished and came down and said, “I’m glad that Turkey’s just as good, cold as warm cause that’s how I’m going to be eating it.” But it was worthwhile. And maybe somebody else wouldn’t have had that conversation. Maybe they would have been more sane than me, but the best customers tend to be the ones who asked the most questions, who are most interested in exploring most deeply. And they also tend to be the ones who are most busy.

Chris Beall (26:17):

There’s actually a correlation. It’s a soft correlation, but it’s a legit correlation between hard to reach and important and between good customer and not so easy. And so there’s a lot of let’s go the easy way in sales. There’s also the flip, which we’ve talked about, which is the dog trying to get through the chain link fence to get to the meat and sort of backing up and seeing that there’s a gate. So I’m not advocating being stupid and just mulling your way through every situation. So be circumspect. Think about it. Stand back every once in a while, look at your situation. But don’t mistake the dog that comes up and licks your hand for the one that’s going to defend your house.

 

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Part 2 of the interview with SADA CEO, Tony Safoian. Questions answered include How is Google going to support my enterprise business better than its competitors. Needs have changed, demand for “bat phone” support is now part of any proposal. Every customer is different in their behavior than they were four months ago. If you’re an organization that doesn’t know how to meet your customer where they are now, your organization is dead. 

—-more—-

Market Dominance Guys is brought to you by ConnectAndSell.

ConnectAndSell allows your sales reps to talk to more decision-makers in 90 minutes than they would in a week or more of conventional dialing. Your reps can finally be 100% focused on selling, even when working 100% from home since all of their CRM data entry and follow-up scheduling is fully automated within ConnectAndSell’s powerful platform. Your team’s effectiveness will skyrocket by using ConnectAndSell’s teleprompter capability as they’ll know exactly what to say during critical conversations. Visit, ConnectAndSell.com where conversations matter.

 

and

  

Uncommon Pro – Selling a big idea to a skeptical customer, investor, or partner is one of the hardest jobs in business, so when it’s time to really Go Big, you need to use an Uncommon methodology to gain attention, frame your thoughts, and employ a sequencing that is familiar to convince others that your ideas will truly change their world. Through Uncommon Pro’s modern and innovative sales, scripting, and coaching toolset, we offer a guiding hand to ambitious Sales Leaders and their determined teams in their quest to reach market dominance. Today is the day things change. It’s time to get “uncommon” with uncommonpro.com.

The complete transcript of this episode is below:

 

Chris Beall (00:34):

Welcome everybody to another episode of The Market Dominance Guys with your host, Corey Frank, and with me, as always, is the sage of sales, Chris Beall. Today we have the CEO of SADA, Tony Safoian.

Tony Safoian (00:47):

It’s not even about, like, is this point solution from this vendor better than that vendor, is the cloud thing real. It’s, what is the transformational impact and outcome to my business. If I choose Google versus somebody else, how is Google, as an enterprise, going to support me versus somebody else? And I think that’s never been truer or more compressed in the context of digital transformation, as we’re facing right now, because every customer is different in their behavior than they were four months ago. So if you’re an organization that does not know how to meet your customer where they are, which is online, or in their, home or whatever, then your business model is dead.

Chris Beall (01:32):

We don’t have many guests, but when we do, we have the best.

Corey Frank (01:36):

Of course, the name of this podcast is The Market Dominance Guys. We have to talk some market dominance, but Chris, I think you’d agree that what Tony… And Tony, certainly, you’re in a business and in a market that you’re not just competing with the other non-Google-Cloud providers, you’re competing with other Google Cloud providers.

How do you square that circle, as you see, because clearly Sada is it can bud here from a market dominance perspective. And maybe, what thoughts would you have, Chris, for Tony, on market dominance when you kind of have that split sector, if you will, where he doesn’t have just one guy with a mask, you got a couple of different folks from different areas, all gunning for Assata here.

Chris Beall (02:15):

Well, my advice is always the same, which is manufacture trust to pace and scale, harvest the market at your leisure, stay sincere. That’s kind of it. I mean, if you have the goods and you have the will, you really don’t have to add a lot of ingredients. If you’re the most trusted, which always starts with the human conversation and then it moves forward by doing what you said you were going to do. And then it moves forward further by how you handle the first crisis together with that customer, because that’s the eye of the needle in every relationship, is when it goes through the crisis, whatever that crisis is.

You know, if you do those things, you create a god-awful problem for your competitors. And it’s a simple problem. It has to at the asymmetry of trust, once somebody trusts you, they automatically distrust anybody who tries to displace that trust they have in you. So the cycle time to go from stranger to trusted friend, from invisible, scary stranger to trusted stranger, the quicker you can make that cycle time, and the more often you can apply it, the more insurance you buy at the lowest conceivable price.

You want to insure any company against the vagaries of time, so to speak, where things happen that we don’t expect, like the occasional pandemic, and there’ll be another thing we don’t expect. There’s scandals, there’s everything else in the world that happens, right? Bad stuff is always out there waiting to happen. How do you ensure yourself against that? Well, the currency of insurance for a business is trust. It’s not true in the consumer world. This is the asymmetry consumers buy based on what’s going to work for them, and the risk is generally their money.

So I buy that Tesla and I take it off the lot. And I discover one day in that I hate it. Unlikely, by the way, because all my friends who own Teslas have the opposite experience, but I’m going along, I bring that thing home and I just go, oh, I didn’t even know, I live in a house without electricity. I can’t even charge this thing, right, to own this vehicle. What am I going to do? I have to buy one of those Peloton things and generate electricity for it? I’m here in the Pacific Northwest. We don’t have sunshine. I can’t even do solar. I guess I got to dump the Tesla, right? So I go to dump the Tesla. What am I out? Five grand, 10 grand. It’s just money.

I do the same thing for my company. It doesn’t matter what my job is. I buy the company Tesla and it turned out to be a disaster. It doesn’t matter if I’m a CEO, I’m toasted. My reputation has hurt and I’ve put my retirement in risk. I’ve put my future work in other companies that might want to hire me after this one blows me out for making that idiot decision. I might go into the doghouse somewhere and not be allowed to make any more decisions. Worse than being fired, in the penalty box and a company that is one of the worst place in the world to live.

I got put in there in 1996 in August. I quit three days later. You don’t want to live in the penalty box, trust me. To me, it always comes down to this. It is so scary to buy a B2B. And what Tony’s company sells, what SADA sells, is the single scariest thing you can buy in the current world, which is a decision to go or not go to the Cloud. It’s not really who you go with. It’s a decision to grow or not go. It is so scary.

When you’ve asked your IT people any question over the last 10 years to do anything of interest to anybody in the business, their answer has always been no. They have 157 different ways of saying no. You could build the matrix. It will take you a long time to go through it, but they’re all no. That’s what they’re going to say, right? So now, you’re trying to get a yes all the way around because anything can break.

So it’s the scariest decision. So they have to trust you, Tony, really it’s you, more than they trust themselves. How did they get to that point of trusting you more than they trust themselves? Well, a whole bunch of them trust your people. Your engineers, that’s tied to them, that they’ve met, that they’ve had a conversation with. That salesperson introduced them to and they were nervous about it, and they thought it was going to be crap, and you thought you were going to be insincere, and that you had another agenda, and blah, blah, blah. Right? All that stuff had to be overcome. Engineers are the most skeptical people on earth, and Missouri is so taxed so high with engineers I’m amazed there are anywhere else. It’s just the show me, you’ve shown me, show me, show me, right?

Tony Safoian (06:32):

You’re right on. And the and the factor of trust, which is, again, the last two years, especially, is what Thomas Kurian and Company has really worked on building with customers, existing and prospective customers. Because you’re right, these decision-makers and their entire teams, they’re betting their career on this dice roll. And needs to not feel like a dice roll. It needs to be clearly the best decision.

And it also happens to be… What we’re discovering is we’re being pulled up market. And there was one article that mentions a particular dollar amount for Manheim in New York. Not only are they betting their career, they are betting their company, a lot of these digital natives, right? And a lot of the enterprise. I mean, Manheim’s $50 million commitment to Google Cloud? There’s not going to be a bigger economic commitment that this company will make ever than it’s bet financial bet and strategic bet on Google Cloud. That is a tremendous amount of responsibility if you’re SADA and you’re signing your contract.

Chris Beall (07:32):

Now, I did it, by the way. I bet my company on Google Cloud and on SADA. We move 14 production systems. You know how many production systems we have? 14. We moved them all. That means certain large companies that depend on us… We had one the other day, they called us up at 6:29 in the evening on a Sunday and said, “PPP loans are going to be released by Congress on Tuesday. We’d like to put 335 new people on Connect and sell tomorrow, and have 75,000 conversations next week. Can we do it?”

If one of my Cloud instantiations of ConnectAndSell can’t handle that, I’ve just said yes to the CEO of one the most powerful companies in the world about something he really cares about. They ended up talking to 98,000 people that week out of the 75,000. They had 98,000 conversations.

Tony Safoian (08:28):

Wow.

Chris Beall (08:28):

It was a successful week. I didn’t worry a bit. Okay, so maybe I had a half an ounce of blends that evening stared out the window for a moment, and contemplated the world. But I didn’t worry any more than that, that the trust that I’ve put in Tony and his team in a Google cloud was going to result in a good outcome. I know what it feels like to bet a company on you. I’ve done it. And it’s not the company like my internal infrastructure. It’s a company like this-

Tony Safoian (08:59):

It’s a whole company.

Chris Beall (09:00):

…what we deliver on. It’s the whole company. When that’s gone, we have literally nothing.

Chris Beall (10:01):

We don’t exist anymore.

Corey Frank (10:03):

So Chris, it’s not just all pragmatism, and cold cognition, and facts, and data sheets, and speeds, and feeds. There’s an element. And Tony, you had mentioned this in your VP of sales, right? There has to be an element in the culture to create this certainty, to create this trust. So how do you instill that? What have you done to teach that? How does that work? Because Chris, I’ve known Chris for almost 20 years, he’s not exactly an easy sell. And if there’s more than one choice, I am sure there was a matrix that Chris has had. So in order to cross that chasm and get him from the cold cognition to the feeling of trust and competency is no easy task. How did you do that? And how do you do that at scale?

Tony Safoian (10:45):

The scale is the tough part, right, because as any business grows, you hire many, many more people. And now, I mean, everybody’s distributed, but imagine you’re in a traditional cadence, you’re growing up markets, you’re paying people thousands of miles away from headquarters, and you’re trying to export that culture, and methodology, and way of thinking, and allow people to have their market idiosyncrasies. And they need to. Yes, Quebec is very different than Chicago, and they should have a little bit of their own culture. But I think it’s first and foremost, having a culture and a proven track record that is recognizable and credible.

You can point to SADA turns 20 years old on August 16th. We’ve been growing at 65% KGR, or whatever, for the last 15 years. And the people you have leading the charge are themselves credible and trustworthy. So when they hire, enable people, and put them through the school of Joe Kosco, or the school of Dana Berg, or the school of Miles Berg, or the school of Rokita or [inaudible 00:11:40], they are going to create an amplification effect of what is their essence, of what has made them successful to date, right?

Getting the credibility with customers at scale… And here’s another beautiful part about cloud, and you could argue ConnectAndSell itself is a Cloud service, and it is. The ability for customers to put vendors in a position that they have to prove and earn credibility over time is a relatively new construct in the world of enterprise software. Because back in the day, customers could do a proof of concept of some kind. It was almost never production grade. It was almost always full of smoke and mirrors. And that ended up in a massive, multi-year, very expensive commitment that you were stuck with for three to five years, and that you paid for upfront.

And I think, 90% of the time, the plethora of what you bought and never got implemented. I think what’s beautiful about ConnectAndSell as a SAS platform, or Google Cloud in general, is that we can actually engage with customers with very heavy pre-sales engineering effort, and resources, and enterprise class methodology.

Sometimes we charge for that, sometimes we don’t, sometimes Google funds it, whatever. You’re not trying to minimize effort at that stage. We’re actually trying to maximize effort. You can do a POC where you have to validate what you’re proposing in a small, low-risk environment. It happens in almost every sell cycle, especially with customers that have a distinct desired outcome. They’re like “Oh, Google Cloud can do this and your engineers can deliver that? Show me in the small sandbox.”

And you actually go and do it, Corey. The beauty that when you do it, and then you win the hearts and minds of moving one workload or one system, you have to keep proving it. But the beauty of the business model in cloud, and in SAS… And as Chris’s customer called and said, I want to put this many more agents on and make this many more calls… Our expectations with every one of our customers, if we continue to prove value over their lifetime, their consumption, and therefore our revenues related to that customer will continue to grow at a pace that gives us the investment capacity to give the customer more and more attention over time, but also just clearly aligns incentives.

Meaning we have to be there. What if something happened on that weekend, or on that Monday, and ConnectAndSell did have a problem. GCP did have a hiccup and Chris had to call me or my head of support. How responsive are we going to be? Are we going to use the bad phone with Google to fix Chris’s problem because he has his credibility on the line. We get tested over and over again for the lifetime of that customer relationship, which was very much not like how enterprise software was delivered before.

Chris Beall (14:10):

I agree. I mean, enterprise software and shelfware have been synonymous forever. It always would have been cheaper to go ahead and just pay the license fee and not even try to implement because you were going to fail anyway. You were never going to get to the finish line. And now that’s no longer the paradigm. And I think folks are shifting to, and have to shift competitively, to a do it together and then make the decision as whether you’re going to partner together.

Cory’s doing this in his business. He’s got the first ever what you might think of as an outsource sales business, cold calling as a service or whatever, that’s ever existed on the face of the earth, where a fully transparent, full production experience, much like your team experienced with ConnectAndSell but he’s doing it, coming up with the message, putting the people in.

He had guys in an RV last week parked outside the building so that they could come in at 5:00 AM on a… I kind of think of it as a competitive test drive with four similar companies to him and the end customer, all seeing how many meetings they could set-

Tony Safoian (15:12):

Wow.

Chris Beall (15:12):

…in a day. And Corey wanted to make sure that this team had a little psychological advantage. So they started at 5:00 AM. and by the time the next team came on, these guys had already settled up in meetings. They said 41 out of 40, which when you’re playing against four other competitors, you get 31 of the points that are available on the board. It’s actually kind of a done deal, right? Think about that, an old business like appointment setting, the transformation in that business that has now taken place with Youngblood Works is this. They will actually do a full production test drive up, but with results as the idea, and they’ll do it with you watching with full transparency.

So it does keep rolling into older and older parts of the business world that it turns out doing is much more important than saying, and giving PowerPoint presentations, and making claims, and having testimonials that may or may not be completely valid, and all that kind of stuff. All those things still happen, but I think we’ve entered a doing as part of selling… And not part of, that is the essential part, doing together before we partner together. I think that’s kind of like do together before we partnered together and make something measurable happen that we can all look at, feel like this makes sense. Now let’s go a little bigger.

Tony Safoian (16:37):

And to your earlier point around trust, it might actually end up that it’s not the right thing to move forward. That you shouldn’t buy this from me, and that’s okay.

Chris Beall (16:45):

It is okay. We only convert 37% of our test drives. That’s about the right number, as far as I’m concerned. That’s something I learned a long time ago in the math world, when you’re sampling, if you’re not getting into false positives, your samples aren’t very good. When you think you’re perfect… People try to build sales funnels and at the very top of funnel they go, “I only want ideal customers coming in.” Well, you can’t discover their ideal customers until you have a conversation with them. So we had a chicken and egg problem here. I better have more conversations than there are ideal customers, or I’m leaving the very best one.

Corey Frank (17:19):

The one that we use, and I’ve used for a long time… And again, I’m at the floor of Grand Canyon University right now, which is the largest Christian University in the country, so I think this is an appropriate aphorism here, is that Jesus Christ was the best sales person that ever lived. And he didn’t close everybody. And he had a better product, arguably, than any software, or ERP, or Cloud-based system. And so the Son of Man himself will not have a hundred percent close rates. So because of that, Chris, you’re absolutely right. 37% of your conversions on your test drive, that’s admirable. Maybe JC himself would probably have 38 or 40% and that’s exactly how it should be in nature.

Chris Beall (18:00):

Many are called, but few are chosen. Well, I guess we’ve come to the end of what looks like an hour. Tony, this has just been exactly better than I even thought and I thought it was going to be tremendous. Thank you so much for coming onto Market Dominance Guys. We don’t have many guests, but when we do, we have the best.

Tony Safoian (18:19):

Wow. Thank you. I don’t know if I deserve that, but it was a pleasure. It was fun to be on this side. Let me tell you, we try to put out podcasts weekly and it’s nice. It’s a relief. It’s fun to be on this side, where you get to be the guests. And Corey, it was a pleasure to get interviewed by you. Loved your questions. And I can’t wait to listen to your episode.

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The rate of growth SADA has experienced gives them credibility when their CEO, Tony Safoian explains that in order to scale you have to manufacture trust at pace. 

SADA does one thing exceptionally well, they transform companies into a cloud solution partnering with Google. Yes, that’s paraphrasing, but as a Google Cloud Premier Partner, SADA Systems has gained global accolades as an exceptional service provider with proven expertise in enterprise consulting, cloud platform migration, custom application development, managed services, user adoption, and change management. They do what they do REALLY well. They do it so well that ConnectAndSell turned to them to move from AWS to a better solution on the Google platform.

 

Learn from Tony in this episode of Market Dominance Guys, then join us for the next episode where Corey and Chris continue the conversation.

 

—-more—-

 

The complete transcript of this episode is below:

 

Corey Frank (00:34):

So welcome everybody to another episode of the Market Dominance Guys with your host, Corey Frank, and with me, as always is the Sage of Sales, Chris Beall. And Chris, you know that we don’t do this often, but when we do, it’s usually because we run out of things to talk about. No, it’s usually because we have a interesting, compelling, face melting guests that usually has something to offer to the community, which is growing every day. And today we have the CEO of SADA, Tony Safoian. Tony, did I pronounced that correctly.

Tony Safoian (01:09):

Perfectly, Corey.

Corey Frank (01:11):

Great. Tony, as the CEO of SADA is able to lasso all the mystery and complexity and value of the Cloud, where all the bags of money and blood live in a world without… and we’re all laughing, we’ll talk about the key word that we use there in a minute. But Tony runs one of the top Cloud consultancy service providers in the world. In fact, I think, Tony, wasn’t it a year or two ago that you were Google’s Top Cloud Partner of the Year. I think it was, so as modest as I’m sure you are, Chris and I, like to get the accolades out of the way at the top. So I think Chris, turn it over to you, how did you meet Tony and why, because we talk about a lot of folks we come in contact with in our world, that Tony should be in the hot seat for the Market Dominance Guys today?

Chris Beall (02:06):

Well, I just got lucky. I’m a customer of SADAs, made a big decision to move from AWS to Google Cloud, based on the fact that the Google Cloud folks will actually join in with us and help with the marketing, and ultimately, maybe, even the co-selling of our product, which is something we didn’t see out of the other guys. And it provided another bunch of wonderful things, too, cost savings and superior technologies, superior speed. You know how speed centric we are, we’re really speed centric. So we had a great experience working with SADA, effectively, as the folks who brought us into Google Cloud. So they were our vehicles, so to speak, to get there and get there successfully, and very quickly. We moved 14 production systems over there in a matter of a few weeks. And then the great-great insane, good fortune of getting to go down to Austin and participate in a test drive of ConnectAndSell with Tony’s team.

And I can only report, it was a riot. It was really fun. They killed it. There were dead bodies everywhere. Talk about blood. There was blood on the floor, it was flowing. They actually, unlike test drives, they didn’t just do it, but they made money to do it, I believe.

Corey Frank (02:06):

Really.

Chris Beall (03:22):

I’ll have to leave it to Tony to say if they really made money doing it. And so now we’re each other’s customers. And then he kindly invited me onto his podcast, Cloud N Clear, and we had a lot of fun there. And so I got to tell all my stories there, but Tony didn’t-

Corey Frank (03:35):

Oh, love it [crosstalk 00:03:35]-

Chris Beall (03:35):

… get to tell all his story. So now it’s your turn, Tony, how did we get into this craziness? Tell us [crosstalk 00:03:42]-

Tony Safoian (03:43):

I don’t know. I love the hot seat, that’s all I got to say. Thank you for inviting me.

Chris Beall (03:47):

We’re lucky. We’re lucky to have you.

Corey Frank (03:49):

And I’m curious, Tony, when you saw a weapon like ConnectAndSell in the test drive, I always like to get into the blood and guts and of the dials and the epiphany and the exponential amazement that happens as it creeps across the floor, as people realize you can talk to more than one person an hour or so. So that was kind of where the test drive was, and what are seeing thus far? And in a business perspective, I’m just always curious to see a little bit of Inside Baseball of how you’ve been able to adapt to this new type of a weapon that you have on board?

Tony Safoian (04:23):

So to be able to independently source pipeline in the Google cloud ecosystem is not a trivial task. We’ve been partnering with Google for 14 years, now, for many of those years, us and the rest of the Google ecosystem was completely dependent on the Google sales organization to introduce them to customers. And we knew this was a risk. We knew that it was, maybe us not being the best possible partner in the world, meaning delivering value at that part of the value chain at the pipeline side. So a few years ago, we started doing marketing pretty well and developed some inside sales capacity capability, but 12 months ago or so, we had the desire, 10X that impact. We went out on this journey to build the most prolific, active, successful, most active inside sales dedicated organization, really, for the first time.

And we found this gentlemen, Billy France, who is well known by Chris, to say the least, he has this incredible team has built from scratch 15, 20 folks. And they use a lot of traditional tools and methodologies, and they were very, very good at it. And some of it is a wide net and other part of their approach is very, very targeted. And in a short amount of time, we started breaking all sorts of records. Nobody at Google in the ecosystem had sourced the amount of pipeline, the number of opportunities. And these are very well vetted, they have to be submitted into a platform that Google has to approve and the field has to okay, and validate that, yes, this is a new opportunity. Yes, it’s qualified.

So there’s a lot of rigor behind it. So the pressure I was putting on Billy was immense, and of course he was delivering, and Matthew on his team, just a great add to his leadership structure and all of that. But they were seeking the best tools in the business, period, because these days it’s important to be multichannel. It’s important to build great content and awareness, but nothing is as powerful as the phone call. And there just has never been a very efficient way to do this, especially now when people don’t pick up the phone. I don’t think I have a phone. Do you pick up the phone? I generally don’t pick up the phone.

So when this concept of this platform, which on the surface is like, well, this is not inexpensive, in nominal terms, this is an enterprise class investment. When the premise behind the technology was revealed and Billy was so gung-ho, I mean, he was so gung-ho, he was like, “We have to do this.” Matthew’s like, “We have to do this. It’s game-changing.” I was like, “Really? It’s 2020, what do you mean game-changing? You mean there’s something that hasn’t been done? How’s it possible? Enterprise sales have been around forever.”

And then, of course, I got to know Chris better, and he explained even farther, the genesis of the platform. I know that at that test drive that we did, and by the way, it was in Austin, near the Google offices, we had Google folks come in from the Cloud organization, field sales managers, and sellers kind of joined in, like, what is this spectacle that is about to happen? I mean, it was an unbelievable experience for that team. They felt super human. They felt emboldened. They felt powerful, productive, and they just could not believe the efficiency behind it. And Chris and I talked about this on my podcast, but the adrenaline rush, man, the adrenaline rush, somebody picking up that phone, and you have a few seconds to ensure that they stay right?

Corey Frank (07:54):

Mm-hmm (affirmative).

Tony Safoian (07:55):

It’s almost like the ROS form of sales, execution ability, which so many of us have forgotten, but actually, that’s how I cut my teeth at a dotcom in the late ’90s, early 2000s. I went from being extremely fearful of the phone to loving it in the early days, and a platform like ConnectAndSell, that took a lot of that efficiency out, the ROI is just… it was unbelievable. So of course, we’re a big customer ConnectAndSell, ConnectAndSell is a big customer of ours and Google Cloud. And I look at people like you, Corey and Chris, and I’m grateful that this level of thought leadership exists and is happening, and it’s in the ether and we’re talking about it. Because I think without pipeline, none of us could be in business, that’s where it all starts.

Corey Frank (08:41):

Without pipeline and without trust-based conversations. Chris, I think it’s worth repeating, I know Tony, you’re a believer just like I am, but Chris, the number of bits in a phone call versus everybody talks about cold calling is dead. How many episodes have we dedicated to that? How many LinkedIn posts, Tony, do you see, cold calling is dead? I think there was another rash of them this particular week of this insanity. But when it comes to trust-based conversations, Chris, I always try to poke the bear and get you to riff and wax loquacious here about the value of a phone call versus a simple email, just from a scientific, from a bits per second perspective. So, maybe that would be helpful for the audience, setting the stage, and since you already have two believers in me and Tony, here on the line, too.

Chris Beall (09:24):

They got to access all of their company’s information, which has a bunch of bits, and they have to do it with a bunch of computer programs, which has another bunch of bits, and they got to do it without having a breakdown in all that happening. Well, if all the bits are behind a wall, isn’t it funny that we call those firewalls? Like, what’s trying to get at my bits is a fire that’s going to burn down the house. It kind of is though, if you just let anybody, in bad things happen. But when you keep everybody out, bad things happen. And you get the bits outside in a safe place, where they’re accessible by everybody, including folks working from home, the bits can participate in saving the economy.

And by the way, this is something I truly believe has happened. I think it’s happening right now. I think it’s not recognized widely that it’s happening, and companies that Tony’s team is working with, are kind of getting it. Tony told me the other day, those who didn’t move to the Cloud are kind of wishing that they had, right?

Tony Safoian (09:24):

Mm-hmm (affirmative).

Chris Beall (10:20):

So it’s always about [crosstalk 00:10:22]-

Tony Safoian (10:22):

Big time.

Chris Beall (10:23):

… here’s the simple info, an email fully read email, carefully, read, somebody’s thinking about it while they’re reading it, has about 5,000 bits of information on it. That is one quarter of one second of a live human conversation on the phone, quarter of a second is 5,000 bits, and it takes a lot of bits, not to get somebody to know what you know, but to believe that you care enough about them, that they’re going to trust you with their secrets. And that’s what sales is all about, is getting somebody to trust you with their secrets, because their secrets are pain, and nobody wants to share their pain with the world.

So it’s the same thing as the Cloud. The Cloud itself, I believe, has saved the economy. I think it should get the Nobel Peace Prize, the Nobel Prize for Economics. The Cloud should be Man of the Year on Time Magazine, if the had magazines, but [crosstalk 00:11:20]-

Tony Safoian (10:23):

Yeah.

Chris Beall (11:19):

… now. The Cloud should be all those things. And the fact is the human voice is the one thing that carries enough information, I’ll call it, in the other Cloud, because the long distance phone calling was the original Cloud. It was the Cloud that made the latter part of the 20th century work, where we could actually talk to people far away and do business with them, because they could trust us. So the long distance phone call was the second Cloud. The first Cloud was the telegraph, and then came along to the phone, which wasn’t a Cloud, because you were always behind the firewall of being just local phone calls.

And then it got released, and became the Cloud. And then that Cloud contracted inside of voicemail, 2003, ’04, ’04, and has had a hard time getting out, that’s our job. But then Google, and there are other folks that they’re similar to, provided sort of the next generation, except it was the long distance phone call for every application, every system, every archive who worked together with the human beings all over the earth, in an unlimited way. And it’s saved the economy, it literally has. And I think we should like do this.

Tony Safoian (12:30):

Cannot disagree. Cannot disagree. I think it’s quite remarkable.

Chris Beall (12:36):

I mean, to me, Tony, you guys are on a mission that is interesting, because at one level is so nuts and bolts, it’s so… I mean talk about workloads, a workload is a workload is a workload is not a workload. It’s not trivial stuff. Everything in the world of software and everything in the world of hardware as a result, is tangled up together. They don’t call it spaghetti code for nothing.

Tony Safoian (13:01):

That’s right.

Chris Beall (13:02):

It’s all tangled up and you have to help folks get that stuff up from where it is, where it’s all stuck and glued into all these different systems, and nobody even remembers how they’re tangled up, and help that come out and move to a place where it’s all accessible by people like me, working from home. What was the key? Why are you guys so good at it? Because it’s one of the hardest things in the world. Selling it is one thing, but you guys have to actually do it. Why did you embark on such a crazy adventure?

Tony Safoian (14:30):

Part of it is, I think, just being on the right side of history for a long period of time. As you both know, selling and delivering something you don’t believe in is a very hard endeavor. So when the Cloud started to become a thing in the mid-2000s, and we had a very on-premise related view of the world, like everyone else did, when a thought started to come together, it wasn’t a debate for us, whether or not that’s where it’s all going to end up eventually.

So just creating a culture around that journey started with email, it was the first thing we worked on. 2006, ’07, ’08, ’09, then went to maps and geolocation services, then enterprise search, and then voice link to the Cloud. It was like, “Look, this is going to the Cloud.” And then on-premise, custom applications and the data center was next, and there’s four trillion dollars worth of this stuff out there, in the old paradigm, and I think, if you get the general methodology of what the journey to the Cloud looks like, yes, it’s in part technical, but a lot of it is cultural.

So if you get the cultural piece, right, like, yes, this is a difficult decision for customers to make. It is something that engineers that work at our customers are either afraid of or unaccustomed to. And so, that’s part of the work streams. It’s not just convincing the CIO or the CTO or VP of Engineering that this is a good idea, but we need these engineers to come along.

In the early days, when we used to migrate email, the biggest barrier was, the team that ran the email backup exchange administrators were like, “We don’t want to move to the Cloud. Our whole job is defined by this box that’s sitting here.” So just 100X that, and that’s sort of the modern data center migration conversation. Engineers are an interesting bunch to recruit, to nurture, to retain, to motivate. They want to do cool stuff and they want to work with other exceptional engineers. So bringing in, just over a year ago, now, the best CT on the planet we could find, which is the gentleman who ran the global solutions architect team at Google for five years, and he did that also at AWS, four years prior to that, was a huge step forward for us, in terms of engineering culture within SADA.

And of course, now, other top engineers that are interested in this space, just want to work in that orbit, so recruiting engineers actually has never been easier for SADA. But even prior to that, we understood that engineers are generally not like salespeople at all, and they’re not like a lot of other folks within any companies, they’re not coin operated. You can’t say, “I’ll pay you more, if you move faster.” Or, “I’ll pay more, if you stay.” That’s actually almost irrelevant to most engineers, it’s, there’s a hygiene factor of comp and benefits and all that stuff, but they want to work around other engineers they admire for their engineering ability and acumen and experience and contribution to open source and other things that engineers kind of measure each other by, but they also want to do meaningful work at the edge of technology innovation.

So that’s why, when we go into a typical customer who has engineers, and let’s say this customer is not very tech forward, those engineers are bored. They’ve gone in to maintenance mode. Maybe, they’re building some cool things. But our approach is, well, our engineers are on the outside, we see hundreds of environments, tackle the most complex challenges, so we come in with a different perspective of experience. But where the SADA approach in the market is different is that we compete in the enterprise at a space that’s been traditionally dominated by the global systems integrators and the outsourcers. And the way they like to engage with customers is they want to come in and replace those people. They want you to outsource this thing to them.

And we come in with an orientation of, I don’t have a 100 people I can put on staff there for three years, I have four ninjas, who are the or the best in what they do, with project management and program management, and then all these other folks, they’re going to come in, help you get started on this journey, lay the critical foundation of security and architecture and make sure it’s all done right, and then spend a lot of time on the enablement piece, so that your engineers, which they will surprise you, are going to get enabled to take you most of the rest of the way.

And I think customers really resonates to that. Engineers that we’ve ended up having to work with at our customer sites, love the opportunity to go get certified and learn big query or Kubernetes or whatever it is, Anthos. And then our engineers go in and they see the direct impact on those people’s lives, and also the company that we just helped transform, and it just fills them with tons of fulfillment and meaning in the work. And I think that’s where we have to continue to win as an organization. We have to have a tremendous amount of exceptional engineers.

Because the selling side, I love how you always frame it, which is value at every interaction. And if your intent is pure, and it is, you’re there to help. In aggregate, there’s actually unlimited demand for the work that the Cloud providers do, and then the partners do. In fact, globally, the demand greatly exceeds the supply of all the engineers in the world and all the partners like SADA that could do this work. So having that meaningful conversation after you get good at it, that’s not going to be, ultimately, the limiting factor in a customer’s journey. It’s going to be other things like their trust, do they trust you? Can you really save them money? Are you on their side? Are you going to be there for the next five to 10 years to support them in this path? And that trust really starts with that first phone call.

Chris Beall (20:22):

That’s fascinating. This whole question of culture is something that’s discussed a lot. The culture and its role in digital transformation of all kinds as much discussed here at the dinner table. This is what we talk about. Now, my fiance’s talk that she gives publicly is about how, in her journey of trying to figure out what digital transformation is really about, what are the constraints, what she discovered the constraint is always culture. I mean, enabling technology, so to speak, is always culture and cultural change.

It’s fascinating to me that you’ve delved into engineering culture, both as a supplier of engineering culture and a consumer of it in a funny way. That is, you consume your customer’s engineering culture as an input to your process. It’s fascinating. I’ve never heard it described like that before. As an old, I don’t know if I’m an engineer, I’m one of those guys who’s written more than a million lines of code, and I still don’t think I ever became an engineer. I don’t know how that happens, but it does sometimes happen in the world. I don’t think I ever had that mindset completely. But that one piece that you talk about, which is what Deming used to talk about, people work for pride of workmanship, not for cash compensation or anything else. And even sales people do. Believe it or not, sales… I mean, we all have to know this right, really, sales people who say they’re coin-operated, I’m sure, never are. They just never are. They’re just trying to hide behind that shield, so that they don’t have to be accountable for what they would prefer not to be accountable.

Tony Safoian (22:00):

So they don’t have to update the CRM system.

Chris Beall (22:00):

Exactly.

Corey Frank (22:00):

That’s true. Yep, that’s right.

Chris Beall (22:06):

Which would keep them from having to do anyway, so that’s all right. That’s quite something. So where in that process, you described where you got to, and the big draw of the Cloud is out there. I had the same experience, I think, in 1983, when I knew that Unix was going to take over the commercial computing world. And I quit my job, and I did my first startup, which was a Unix-based ERP system written from scratch.

Tony Safoian (22:31):

Wow.

Chris Beall (22:31):

So that was like, it was [crosstalk 00:22:32]-

Tony Safoian (22:33):

That not ambition at all Chris. That’s not ambition.

Chris Beall (22:35):

I had an orange crate to put on, so it was quite comfortable. At little terminals banging away, we built our own relational database management system from scratch, from the ground up, from bits. And went after that, but why? Because you didn’t have to be a genius to figure out that that glow in the East that you can’t read by yet is eventually going to bake the landscape. Whatever that thing is, it’s got to be really bright to be glowing that much before it gets up over the horizon. And the Cloud must have felt like that to you, way back in the early 2000s. As long as you don’t go out of business and you agree to operate internally by principles that are sufficiently deep, that you’re not going to end up having no keel and being blown every which way, you sort of can’t lose. Now, you guys have gone way beyond can’t lose, sort of gone into the magic place. Is that how you felt? Or were there moments along the journey when it’s like, yeah, I get that we can’t lose, but we could lose.

Tony Safoian (23:40):

I think it’s healthy to operate in this infinite game mindset, which Simon Sinek talks about, and I’m a huge fan of his. We’re just sort of visitors into this time and place of enterprise software sales or sales or technology, whatever you call this space. And we’re players in the game, and if you think in infinite terms, it’s not a game that has a finite end or some kind of scoreboard that you can point to at the end of a quarter or a half or the season, and say we won or lost, per se. So I think with this mindset, that, look, we’re blessed and we know we’re blessed, and we’re so fortunate to be in an environment that’s growing, in a market is growing 50, 60%, anyway, that has unlimited demand, essentially. We’re on the right side of history and we have a little bit of a headstart, that we really just only have to focus on getting incrementally better every day.

If we get incrementally better every day in the areas that become clear to us by virtue of enough customer conversations or internal debates or feedback and input from Google, et cetera, we shouldn’t really ever have to exit the game. And that’s actually, when you lose an infinite game, the closest definition to losing a game like this is exiting the game. Simon Sinek makes a lot of references to, I don’t love war analogies, but he calls it like the Vietnam War, or let’s say the Cold War. The biggest mistake that the United States made, when the Berlin Wall fell down, is thinking that they won the Cold War. It never stopped. So as Corey said, it’s almost like, so what that we want the Global Seller of the Year award two years in a row, it’s not like game over. It’s actually so early in this transformation journey that I don’t know if we can win because it’s an infinite game, but we certainly can mess up.

And if we do, shame on us, because I feel like most of the destiny is clearly in our hands. And I think a lot of that has to do with a lot of humility and self-awareness, but certainly a focus on just customer obsession, a focus on incremental improvement, reinvestment, which a lot of business founders, especially bootstrap business founders or others, forget. I think the part that we’re well beyond, as you’re defining it, is we’re well beyond the lifestyle business. It’s no longer about, what’s in it for me. This is like, we have this amazing opportunity to make something big in a way that’s never been done before, and, boy, can we impact thousands of lives and hundreds of companies, if we do it right.

Corey Frank (26:19):

Well, I think if you look at where the Cloud is, is that it’s maybe started out where it’s not, like you say, “I don’t believe in gravity.” Well, because gravity believes in you, right?

Tony Safoian (26:31):

Right.

Corey Frank (26:31):

You could say, “Well, I don’t believe in taking my servers and moving them out into the Cloud, because of extra security or why, et cetera.” Well, the Cloud believes in you and it’s going to zap you up. So how much, Tony, would you say now versus early on versus today, you were probably doing a lot of educational advocacy, educational missionary work, and they were maybe crying and screaming to move versus today, you may have more of, “Hey, here’s my specs I need in order to move”? and you’ve probably seen that on an X and Y axis, probably, move a little bit less, but nevertheless, I know a lot of the fun and the culture, especially what you’re seeing in the engineers, is still in the educational advocacy, the thought leadership that a company like SADA plays.

So how do you kind of balance that, where you have kind of the laggards who are coming, but you still have the cool kids who are the early adopters, who are your core clients, and constituency at SADA that want you to say, “Okay, what’s next, Tony? What’s next? What’s next?” And to balance those two on the curve from the late adopters to the visionaries has got to be a challenge.

Tony Safoian (27:35):

It’s a challenge, and the work there is changing, but Corey, we’re very accustomed to working in a environment where we knew and had complete conviction on what the right destination was going to be. But we’ve operated in a period of some level of doubt for at least 15 years. So in the beginning, to your point, mid to late 2000s, it was, you were selling the customer on the premise of Cloud. You were trying to convince them that cloud was not a fad, that it was here to stay. And back then with email, in higher education, if you believed in Cloud, the answer was Google, because they were the only ones doing it. So it wasn’t like… We weren’t so much selling Gmail to universities, we were just convincing them this it’s not a fad. And then, Microsoft got their acts together in the Cloud, then we have these two disparate businesses, and there was still a lot of like, “Well, which one’s better than that?” Or, “When do I make this migration?”

But in the early days of partnering with Google, you can imagine, that that was not, that Cloud was real, because, okay, fine. Amazon proved Cloud was real. Salesforce proved Cloud is real. And now, even we believe in Cloud now, but is Google really cloud? Are they serious about the enterprise, because they’re really an ads business? We’ve dealt with that for many, many, many years, and in the last, certainly two years with Thomas Kurian coming on board, and Rob Enslins, Kirsten Kliphouse, and Janet Kennedy here in North America. I don’t think… Really, since Diane Greene arrived and consolidated things and built this great 13,000 employee organization within Google, that was the Cloud, we haven’t gotten that objection so much anymore. But now the conversation is, okay, we know the Cloud is real and Google is serious, but Google is number three.

And we’re like, yes, that’s true, but it’s so early. And they have the best technology. And as engineers, it seems obvious to us that customers should always just pick the best technology. And probably if you’re Google, which has consumer roots, you’re accustomed to a market dynamic that always shakes out such that the best technology wins. Google Maps won, because it was better than MapQuest, simple. Gmail was better than Hotmail. There’s no selling, there’s no training or there’s no migration, it just happens. Now, Instagram. Consumer technology is always defined by, look, just make the best stuff, you’ll get the most users. And I was talking to Janet Kennedy yesterday, who runs US and Canada, and she’s been through like the IBM enterprise days and the Microsoft enterprise days.

And she was at IBM, early days, when it was like, OS/2 versus a Windows NT, and IBM had this big campaign of like, NT stands for not there. IBM arguably had… OS/2 was way better than windows, technically, and that’s just one story. There’s been story after story, and Chris has been in the industry for a long time. It’s very often the case that the best technology has not won. So what is the conversation with the customer today, and what TK and all these sort of enterprise experts who are coming into the space are realizing and are helping partners execute the same way, which is, it’s really about risk. That’s how the enterprise buys. Yes, they want transformation, but nobody wants to lose their job for picking Google. They don’t care if it’s the best technology. They’ll take the third best technology, if it means that their decision will not be questioned. So how do you have those transformational conversations?

It has to do… Yes, you have to be at least as… pretty much every time. But what about your commercial contracting ability? What about your enterprise support? What about professional services? What about product roadmap? What about my direct access to Google executives or SADA executives? That’s what the enterprise engagement today looks like. And Google’s also gotten smarter and more capable, since TK has arrived, to have a much broader strategic conversation with the largest customers. If you look at Activision going Google, that was not about, oh, you can run Call of Duty in our data centers versus yours, and that’s better. It might be better, yes. This is about, we’re going to transform gaming, with Stadia and everything else, and YouTube, and we are going to have a comprehensive strategy to transform Activision’s business. Saber, Deutsche Bank, these 10 year, multi-billion dollar deals, that’s about completely revolutionizing the banking experience for customers at Deutsche Bank.

And them being able to do with the data, things that they just could not do for the last a 100 years, running on mainframes. Sabre was like, transforming the travel experience from the moment you’re searching for your flight on google.com. Not about, oh, you should move out of this data center and go to that data center. So I think more and more that’s what customers are looking for, at least in the enterprise, or it’s not even about, is this point solution from this vendor better than that vendor? Is the Cloud thing real? It’s like, what is the transformational impact and outcome to my business, if I choose Google versus somebody else? How is Google as an enterprise going to support me versus somebody else?

And I think that’s never been truer or more compressed in the context of digital transformation as we’re facing right now, because every customer is different in their behavior than they were four months ago. So, if you’re an organization that does not know how to meet your customer where they are, which is online or in their home or whatever, then your business model is dead.

Chris Beall (33:14):

We don’t have many guests, but when we do, we have the best.

 

Podcast: Play in new window | Download

This episode of Market Dominance Guys starts with Chris recapping the numbers from the previous episode on the tremendous infusion of savings Work From Home creates as knowledge workers are no longer required to go into an office to be productive. Quite the opposite. The data supports they are as much as 47% more productive working from home – ending the commute economy.

—-more—-

After the recap, Corey and Chris talk about the other aspects and concerns of potentially returning to the office, why it’s a bad and wasteful idea and how we can all benefit by allowing knowledge workers to continue to work from home.

Join us for this episode of Market Dominance Guys – All Mitigation is Untested – Work from home or return to the office?

 

Market Dominance Guys is Produced by:

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The complete transcript of this episode is below:

Chris Beall (01:24):

So 48 million knowledge workers commuting for a little less than an hour a day each, that’s 210 hours a year. It is a lot of labor hours. It’s about 10 billion labor hours, and a 50 bucks an hour that’s about $500 billion of waste time. And then you add on top of that at the standard government reimbursement rate of 57.5 cents a mile, how much they drive and that driving per year is about 7,000 miles. Again, multiply that by those 48 million people, and you get an additional $194 billion approximately. So it’s really quite a bit that’s being wasted entirely on commuting. And you add those numbers together and then throwing something like childcare. Say 40% have childcare costs and at $8 an hour for that commute time, that adds another 32 billion plus dollars. And you get about $731 billion of waste right there, just on the knowledge workers commuting. That’s their labor hours. That’s the cost of the commute itself and I threw in one childcare thing for 40% of them.

And then look at the rest of the workforce. There’s 62 million people, approximately commuting in the rest of the workforce. They’re going to be kind of $35-an-hour labor. And that’s it an awful lot of commute hours per day. That’s 53 million, almost 54 million commute hours. And so say they got a 25% improvement from all those knowledge workers being off the freeways and off the streets and out of the parking. Now you’re down to a pretty big number again, $114 billion of additional savings in total. It comes up to about $846 billion. That’s already being saved directly by commuters in the form of labor and in the form of expenses.

Corey Frank (03:38):

For a company who is struggling thinking about moving their team to a work-from-home model. Oftentimes the gate is open, the spreadsheet I think that you walked us through here is just walk around the gate, “Come on in the water’s fine.” The downside that a lot of the hesitancy that a lot of companies would push back on Chris is the culture and the continuity and the three-pound brain. There is some benefit from being next to another three-pound brain. And that’s my feeling of involvement by feeling of social status and things of that nature. And I think we had a lot of those could probably get addressed if they listened to last week’s episode with Sushi Paremo and the wonderful culture that he’s building with his organizations. But what do you say to that just briefly when you know, “Okay, I can go around the gate. I see the hard costs. It makes sense from a P&L from an EBITDA perspective but man, there is real atomic weight from that three-pound brain being next to another three-pound brain.”

Chris Beall (04:50):

Well, we’re going to have to try it for a while because going back to the office is expensive and dangerous. In fact, dangerous in a funny way. And the plaintiff’s bar is itching to go after an employer who forces people to come to the office and watch these people get sick. I mean, they’re armed and ready to go. And anybody who’s familiar with how the plaintiff’s bar works and how class action works knows what is about to happen. So folks voluntarily coming back in, still there’s some legal risks just is, because who knows what assurances you may have inadvertently provided. What warning labels you might’ve had to have, what mitigations you could have done that you failed to do and not knowing about them by the way, might not be a defense. So you’re about to learn something auto manufacturers have known for a long time, which is that you’re responsible for safety if you offer something where there are safety issues that are different from what was expected. And since no one knows what to expect, this could be problematic for anybody who’s bringing folks back.

Secondly, every mitigation is untested. There are no tested mitigations. I saw a beautiful article in the Puget Sound Business Journal that showed a picture, an infographic, and it showed the 11 mitigations that you should consider before you bring people back to the office. And they were things like coming in with the new HPAC system that had different kinds of filtering and it circulated air differently. Really? For a year and a half or two years of benefit. I mean, if you’re going to bring them back, okay, but really new HPAC so that the three-pound brains can sit next to each other, but not infect each other. Do you think anybody’s ever tested that? I don’t think anybody’s ever tested that, right?

Not one of these mitigations has been tested. Coffee machines that you operate with your smartphone. I don’t think anybody’s ever done laboratory testing or in real-life testing of the impact of that on respiratory virus transmission, right? So this is just stuff people are going on and they’re kind of waving their hands and saying bup, bup, bup, bup. I remember there was a finger on the scale, which is the other side of those big leases. So you should expect to see a lot of stories about how essential it is and possible it is to bring people back into the office. But I tell you from a scientific perspective, again, all 11 of those mitigations have got to be done and all 11 have got to work and then you have to not get a little bad luck. Well, it turns out they stood next to somebody in the Starbucks downstairs. And so it’s unlikely, you’re going to have to learn to live with it anyway. Culturally, what do you do? I know in sales, what you do, it’s simple. For your sales team, nothing is more energizing than talking to people.

Corey Frank (07:52):

That’s correct.

Chris Beall (07:53):

This is our team today. And here’s an SDR that’s talked to 25 decision makers. So at one meeting, so they had a moment of excitement at 14 followups, it’s Friday. People tend to be a little busy on Friday. I got two referrals and had five minutes and 24 seconds after pushing the button on average, before he talked to somebody. Josh Philemon did. And I’m sure during that time he was doing something else that’s useful. So it’s kind of funny. We talk about culture. Culture is about ping pong tables or it’s about, I don’t know, drinking beer in the conference room or whatever it happens to be, which I think people gave up a while ago too, for safety reasons.

So the fact of matter is people, as Damon told us, they worked for pride and workmanship and if they have good work to do, and they’re having fun doing it, and they’re being managed in a way that’s fair and reasonable and encouraging, then the core of culture is there. And that’s the number one thing, is work culture actually can be about work and it can be about what somebody loves to do. If you’re in sales, you hopefully love to talk with people. And so if you’re with my team today, they’ve talked to 168 people as you see down here.

Corey Frank (09:13):

Wow.

Chris Beall (09:13):

That’s a lot of conversations, right? Here’s is what also is culturally kind of good about this. They didn’t have to make those 5,655 frustrating dials and navigate those phone systems, that was done for them. So that’s kind of pleasant. And then another thing is people like to be able to help. And they like to be helped. If you need help, you’re stuck. You need to learn if somebody notices you need help and there’s a lot of ways to do that. So say your boss or your coach could come in and say, “You know what? This guy, Sean McLaren, he’s our chairman. Man, he’s got a lot of busy callbacks today.”

By the way Sean McLaren really is our executive chairman who really does talk to people. “So today he had six conversations inside one meeting. That’s pretty good, but he’s having a hard time keeping people on the phone. I wonder if Sean’s got issues today? Is it a little slow or is his voice bad? This one can’t be corrected? It’s a minute-long conversation. So maybe he just coded it wrong. These are short. I have a feeling if I listened to one and we’re not going to do that right now, respect for Sean’s awesomeness. But hey, if Sean needed a little help, just thinking about his state of mind today, his mood or whatever, then you we can help him.”

And then here’s another thing is it’s fun to do work that counts. It’s not much fun to do work. That doesn’t count. So today this team it’s $5,655. And now it’s gone out by a couple, it’s only three in the afternoon after all. Would that have been culturally marvelous for them to just go under voicemail 1,825 times today or navigated to voicemail 1,567 times? Or been told by a gatekeeper, “I’m sorry Corey is not in today.” I am not available. None of that looks like fun. So culturally that’s part of it.

Now the rest of it is this, human beings actually don’t have a sense of smell like the other animals and they have the other mammals. So your dog can smell you across town and I’m speaking literally here. I had a dog once that freaked out, and ran off in a thunderstorm and she went all the way back up to our mountain home, which was 17 miles away of complex navigation involving roads and trails and God knows what. And she went to every neighbor’s house and sort of knocked on the door to check, to see if we were there because we were out of town. Imagine that.

Corey Frank (11:53):

Well, she knows that there’s a bunch of Milk-Bones on the other side of the fence. That’s probably why that she could get to.

Chris Beall (11:59):

Exactly. Well, what was she really doing? She was following a scent trail and that she had mapped a scent map, not a trail. She had mapped the scent. She’d only been up and down that road one time in her life. And the one time up one time down. That was it. This is a dog never been to town before, before we moved to town. So she remembered how to get back to that complex mountain home by knowing the smell of everything along the way. So dogs are really, really good at this. And you go to the airport, they don’t have a trained human who’s going up and down in the security line, sniffing everybody that have a dog, right?

Corey Frank (12:34):

Right.

Chris Beall (12:35):

Humans are not the most brilliant in the world at smell on each other and figuring out if they’re sincere or to be trusted but we are geniuses like dogs will never be at hearing each other’s voices and seeing each other’s faces. And the voice and the face are the two ways that we express ourselves in terms of what really counts, which is do I care about? And if you want to have a great culture, let your people know you care about them and let them tell you, they care about you and about the mission. And then you just do it natural ways, in the normal course of business, like getting on these Zooms, by just talking on the phone, everybody in your company who is physically capable of hearing and seeing, and that’s not everybody I get it, that’s really tough for folks who have vision problems and hearing problems.

But of the rest, of the mass of folks at your company who don’t, they’re so good at interpreting sincerity and good intentions and meaningful direction from tone of voice. For the same reasons, cold calling works, it’s possible and easy to project fantastic culture to a remote workforce. And in fact, you have more time to do it during the two hours you would have had commuting. Let’s break it down, I have a team in North America personally of 28 people. So in two hours, how many, five-minute conversations are there? There’s 24, that’s pretty cool. Think about that. That’s 24 times that I can spend having five-minute conversations. And in those five minutes, each one of those minutes, here each second is carrying 20,000 bits of emotional information. Terabytes of emotionally-important information can be transmitted. Having meetings where everybody gets to participate. This is one of the beauties of Zoom.

In a standard conference call, the standard of conference room participation is dominated by the physically most dominant person. They stand, they take over the room, they interrupt, they talk, they go to the whiteboard, they dominate. In a hybrid where there’s a speakerphone in the desk or the table in the conference room, you get a two-tier economy, a two-tier culture, people in the room and the people in the mushroom. People in the mushroom don’t have a shot. They don’t exist. They will never have the floor in any significant way.

On a regular conference call, just voice only. It’s tricky. You need a good moderator, but in a Zoom call, it’s so natural. Everybody sees each other’s face. And normally the contribution level for person goes way up and people feel more included. So I think making an inclusive culture is actually easier. And some of the biases that we have about people are a little, shall we say, muted in this environment and biases are not the greatest thing in the world. So I actually-

Corey Frank (15:42):

… happened 10 years ago, then you could argue that the urgency to go back to the commuter economy would have been so much more urgent, but because the tech stack is so much more in place and plumbed and accepted that there really isn’t many excuses to go back to the way were.

Chris Beall (16:03):

When you work the numbers, it says, “Don’t do it.” When you work the culture it’s says, “Don’t do it.” If your work productivity it says, “Don’t do it.” We solved this problem a long time ago. We would never have designed it like we had it. Clogged cities with roads you can’t get through on. People frustrated, not seeing their children, not getting enough exercise, not eating well, stopping at the bar on the way home, sucking down the lattes because they’re bored. Let’s face it. That was not healthy. It wasn’t economically healthy and it wasn’t otherwise healthy. Then it’s tragic what’s going on with all the cases of people getting sick people dying. But I do believe that a bunch of people worked hard to create a situation where we can work from anywhere and we can contribute to society no matter who we are.

I believe there’ll be a next wave that we haven’t even touched yet, which is inclusiveness across society. There are so many smart people who don’t contribute, don’t get to contribute because they don’t live where the rich businesses are. And I’ve done some experiments around that about back in 1991 and ’92, that proved to me for sure that there is no difference in talent among all of our different communities that we have in this country or anywhere in the world. And I think one of the side effects of work-from-home and work-from-anywhere is going to be that more people are going to find great careers as knowledge workers who are currently being left out. And I think that’s another wave that’s coming and nobody’s seeing it coming.

Corey Frank (17:44):

That’s great. Okay. Well, we have a topic to discuss for next time. In the meantime, I’m going go search for my share of the $7.5 trillion that you say is buried somewhere in the Ether and the virtual couch cushions of America. So until next time [inaudible 00:18:01].

Chris Beall (18:03):

… talk to you later.

Corey Frank (18:05):

Beautiful. Thanks, Chris.

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There’s a whole bunch of commuters that are used to driving to cities. And I think it would be good and very timely talk a little bit about some of the things that we’ve learned and this massive economy that is forming from the non-commuter economy, the non-commuter economic forces. Chris will perhaps give us a little bit of hope, as far as what the trends are with this new stay at home economy.

—-more—-

In downtown Seattle, there are office buildings and those office buildings right now are pretty much empty as of today, July 14, 2020. And a lot of people thought this whole COVID thing would be over by now. I think with a record number of cases per day coming in or individual states like Florida are now number four in the world is where the country is. There’s a kind of sobering up going on with regard to what’s happening. One of the interesting things is that we talked about it a little before is that the big companies always lead the way on this sort of thing for a bunch of reasons.

One is they’ve got the best information.

Two, they’ve got the best lawyers and their lawyers advise them as to what’s why somewhat safe to do.

Three, they can often work the numbers better than the rest of us. And so what to us might be a small saving to them can be quite material.

Here’s what we have today, roughly 48 million knowledge workers in America and they used to commute by car about 26 minutes each way.

So that’s .87 hours of car time commuting. Anybody who’s lived near a big city and commutes knows that is an understatement. That’s just over 200 hours spent commuting by car which adds up to about 10 billion hours for those 48 million knowledge workers.

This has been time boldly wasted.

Commuting and that multiplied by the $50 an hour that most knowledge workers are paid, which clearly is less than they’re worth and nobody ever gets paid what they’re worth. That’s $505 billion of labor that’s being wasted commuting. And then if you throw in the car and just take the federal government’s mileage reimbursement rate of 57 and a half cents per mile which accounts for gas, maintenance, wear and tear, tires.

And you take the number of miles committed 29 per day. It’s about 6670 miles a year. That’s $193 billion of commute costs and that’s just raw costs again in the economy that’s considered to be positive. Well, then it must have been worth it to them. But you know, it’s not worth it to anymore.

Let’s throw in a little something here for knowledge workers with children. This is really an illustration. It’s not a huge number, but it’s a big enough number. Knowledge workers with children are at about 40% and you’ve got to have some childcare costs averaged at $8 per hour. That alone is $33 billion.

The direct commute costs, just for the knowledge workers, which I will call pure waste is $731 billion.

That’s a big number. And then if you look at the rest of the commuting workforce –  62,000,000 other people and they commute about the same amount of time each way. But what if we could actually improve their commute by 25% and what if they’re being paid an average or they’re worth an average of $35 an hour and you multiply those numbers together with those 53,940,000 commute hours.

Times $35 an hour and you take 25% of that you get yourself another $114 billion.

And so if you had $114 billion for the non-knowledge workers up with the $731 plus billion for the knowledge workers, the direct savings, we’re getting pretty close to a trillion dollars – $845 billion dollars of direct costs. It’s a big, big number. And it was considered to be essential, but we just have to do this right, and it’s not considering everything else is not considering the environmental impact. It’s not considering the geopolitical impact and what it means to have an economy that generates such a dependency on oil which doesn’t always come from exactly where you would want it to come from, neither is the money always used exactly like you would want it to be used.

Ignoring all that it’s $846 billion roughly that could be saved and is being saved. Today, this isn’t a suggestion or something we do in the future. This is just saying, look what happened, look what’s happening right now that 813 billion dollars is effectively being put in the pockets of consumers, one way or another, mostly as their own time. But we know that people figure out a good things to do with their time – the gig economy is about that. But people they value their time and we should consider them when their time is saved. They’re getting value.

 

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The complete transcript of this episode is below:

 

Corey Frank (00:37):

Somewhere in the Northwest is Chris Beall. Chris, how are you? Good afternoon.

Chris Beall (00:42):

I’m doing great. Yes. My undisclosed location is here in Port Townsend in Washington, where one more time, I’ll look up the sky there and tell you that they say the blue hole lingers longer here. And apparently it does. It’s pretty sunny.

Corey Frank (00:58):

Well, that background does not look like Port Townsend. So, that is false advertising at its finest. And I have a feeling we’re going to get a bait-and-switch here. Pretty soon when you get around with all of your spare time to putting up a new virtual background, but today, maybe the point of that virtual background is to talk a little bit about all those people. Because if you look over your left and your right shoulder, I can see all those little commuters and I can see all those little commuters taking the ferry and maybe driving in, maybe trying to find some parking and maybe, trying to fuddle with their face masks as they go up to the third floor and try to put their face masks back on as they go to the Starbucks.

So there’s a whole bunch of commuters that are used to driving to cities much like the one over your shoulder there. And I think it would be good and very timely talk a little bit about some of the things that we’ve learned and this massive economy that is forming from the non-commuter economy, the non-commuter economic forces. And I think we were talking a little bit about that before we hit record here. Let’s just dive right into that Chris, and see if we can maybe give them a little bit of hope as far as what the trends are with this new stay at home economy.

Chris Beall (02:13):

Coalino downtown Seattle, pretty much office buildings and those office buildings right now are pretty much empty. Today is the 14th of July 2020. A lot of people thought this whole COVID thing would be over by now. I think with record number of cases per day, coming in where individual States like Florida are now number four in the world where there’re countries sobering up going on with regard to what’s happening. One of the interesting things is that, we talked about it a little bit, for the big companies always lead the way on this thing for a bunch of reasons. One is they’ve got the best information. Two is they’ve got the best lawyers and their lawyers advise them as to what’s wise and what’s safe to do. And three, they can often work the numbers better than the rest of us. And so what to us might be a small savings to them can be quite material.

So, the big companies in the Seattle area, I’m thinking of Microsoft and Amazon in particular, but there’s a lot of others have pretty much declared that work from home is going to be an option. And maybe even permanently, I know at least one of them, their official principle is number one safety and number two choice. And there was no time limit put on that. And in fact, that’s one of the reasons I’m here in Port Townsend that it freed us up as a couple to move to where we would want to be together, having no concern whatsoever for the commute just having a concern for the quality of life and having to have good internet, right? That’s our new highway that we commute on, but you can drive through Seattle right now at what would have been rush hour and there’s no rush hour anymore.

And I think it’s going to stay that way for a while. And I decided, why don’t I just go ahead and I’m going to share my screen here. And Susan Finch gave us some… She did a great job on this, and it was really quite something. I had an orange spreadsheet that I put up on LinkedIn, and it actually had a pretty good sized error in it. But even when you correct the error, you still get numbers that are so big they’re mind blowing. So, Hey Corey, so let’s take a look here at what it really costs to commute or what it used to cost to commute for everybody, and then how much we’re saving. So there’s 48 million knowledge workers roughly in America and they commute by car about 26 minutes each way. So that’s 0.87 hours of car time commuting. Anybody who’s lived near a big city and commutes and knows that this is an understatement, but let’s just take it as the number.

And so it’s a little bit low, but we’ll accept that’s almost 200 hours. It’s almost 10 billion hours of commuting, 9.568 billion hours spent. And I will say boldly wasted commuting. And that multiplied by the $50 an hour, that most knowledge workers are paid, which clearly is less than their worth, right? Nobody ever gets paid at their worth. That’s $505 billion of labor that’s being wasted commuting. And then if you throw in the car and just take the government’s number, the federal government’s mileage reimbursement rate of 57 and a half cents per mile, and you take the number of miles committed 29 per day. It’s about 7,000 miles a year. That’s $194 billion of commute costs, which I would call pure waste, totally not 731 billion. In the economy, that’s considered to be a positive, right? Somebody spent all that money for gas, they spent all that money for wear and tear on their car and for tires and this and that.

Well, then it must have been worth it to them, but it’s not worth it to you anymore or if you don’t have to commute. And then I thought I’d throw in a little something here for knowledge with children. This is really an illustration. It’s not a huge number, but it’s a big enough number and knowledge workers with children and can say 40% have them and you’ve got to have some childcare costs at eight bucks an hour. That alone is $33 billion. So the direct commute costs just for the knowledge workers, which I will call pure waste, that adds another 32 billion plus dollars and you get about $731 billion of waste.

And then look at the rest of the workforce. There’s 62 million people, approximately commuting and the rest of the workforce, they’re going to be kind of $35 an hour labor and that’s it an awful lot of commute hours per day, that’s 53 million almost 54 million commute hours. And so say they got a 25% improvement from all those knowledge workers being off the freeways and off the streets and out of the parking. Now you’re down to a pretty big number again, $114 billion of additional savings in total. It comes up to about $846 billion.

Corey Frank (07:03):

So if COVID has been going on, one of the bright aspects of COVID from an economic perspective is certainly that it has forced these numbers to the top and the only people that perhaps are a little bit better are the parking lots and parking attendant, parking meter and oil change workers of America here. But these are real dollars that can go back into the economy, go back into the environment, go back into industry, go back into better tool sets, better technologies to enable workers to perform probably at a higher rate at a higher productivity rate than they did even before they jumped into the steel coffin every day.

Chris Beall (07:49):

Yes, exactly. You know, getting in that 3000 pounds of steel to move your three pound brain to get it closer to somebody else’s three pound brain after there are 3000 pounds of steel move that somewhere is a little bit weird when you think about it, right, as a way of getting things done, you and I didn’t have to move any steel at all. And we had this conversation here today, and nobody who’s listening to us had to do it either. It shows that you can exchange information and get work done. It also shows something else. That’s interesting that predict something else, I’ll predict that anyway. I don’t know if it does, but I’ll just go ahead and predict it. And that’s this, that money is primarily going to end up flowing into local communities into neighborhoods, because if you’re not committing to a distant place, well, by definition, you’re staying in a nearby place and you’ll still be buying stuff.

So the notion that you’re buying more good stuff, that’s of value because a big chunk of it involves your car and 26 minutes each direction really doesn’t make any sense, it doesn’t hold water. If you’ve got extra time, you’re to be using that time locally, if you don’t have to commute. And that means we’ll have a flourishing of local businesses. And I think this whole question of what’s happening with restaurants and bars and all that stuff and hair salons and so forth is you’re going to see just more of them doing better in local neighborhoods and more people walking to dinner. Maybe not always eating at home like we do here, but walking to dinner or walking over to have a drink or walking over to get their hair or their claws done or whatever it is that they want to have done. Maybe even walking to get groceries like I used to do in Reno. So I think it really ends up being a flowering of neighborhoods that comes out of this.

Corey Frank (09:38):

So getting those three pound brains more collectively, more localized, it’s big money, it’s big business?

Chris Beall (09:44):

It is. And it’s big economy. Yesterday, we’ve been here in port Townsend, living out in Cape George for two weeks and three days and yesterday our neighbor brought over, we just met our neighbor day before, brought over to big wonderful Dungeness crabs all cooked up and ready to eat. Now there’s economic value in that. And the fact is if we were commuting, if either when my fiance or myself or commuting or on a plane right now or doing any of those things, there’d be nobody to bring those crabs to and that economic value of those two big Dungeness crabs, which by the way, were just, they’re pretty delicious when they came out of the water above, I don’t know 45 minutes ago, and somebody cooked them up and brought them over to your house.

That’s real economy too. And I think we have forgotten a lot of the facts of economy. It’s about what are called satisfied services. It’s about what works for people, not just about how much money to spend for it. So there’s an assumption that it’s all about transacting, but sometimes it’s just about doing things for each other. And people do that more when they’re around each other, as neighbors than they’re likely to do with the more or less strangers that are at the other end of their commute.

Corey Frank (10:54):

So I’d imagine that there’s another reciprocal effect in temperament, if not blood pressure alone?

Chris Beall (11:00):

Yes. Last time I was in San Francisco, this was pre COVID. It was an hour and 42 minutes to get from Downtown out to a freeway. After that, fortunately, I only had an hour and 16 minutes home, so it wasn’t too bad in a three hour commute. And that mental health thing I think is really important too, and it does come down to dollars and cents at the end. I know somebody’s a member of the family works as a clinical psychologist with kids with behavior problems. And he says his caseload has dropped by more than half because kids are home with their parents and what the parents learn to do with the kids to help them out, to help their behavior can actually be a plot because the parents are there. Now think of what we spend overall on mental health and what helping kids with behavioral issues earlier in their life could do 50% maybe of an overly large number. This is just one therapist’s experience, but 10% would be a pretty big number in terms of economic impact and improved mental health for the nation’s children.

Chris Beall (12:57):

There is a contrarian view to all this, which is folks like to be in the office because they like to talk to people in the office. And I think that’s true of some people. My guess is those are the people that are actually not there anymore when you’re working from home, so that you can have this productivity gain of 47% as measured by Prodoscore. So Prodoscore is an amazing company offering an amazing product that actually measures productivity at the desktop level. And some people would say, well, clicks and sending emails and doing this and doing that. That’s not a real measure of productivity. And they’re thinking in the micro sense, but if you have a measurement of everybody on your team before and after the day, they want to work from home and you knew how much they did, how much did they read?

How many emails did they send? How many spreadsheets did they work on and how much did they do with and all that stuff before and after is always meaningful when it comes to productivity. While you can quibble over an individual and say, “Oh, that’s just busy work.” That tends to be by the way, people like me who don’t work very hard and go “oh yes, I’m so brilliant that I can just sit around and produce value by getting on podcasts or something like that.” In reality, before and after means a lot and Prodoscore measured before and after work from home to the day and found this surprising number of productivity gain, obviously for knowledge workers of 47%. Primarily this is speculative because those people are not dealing with what I call social Sam. Sam is a nice gender neutral name for that person who comes over to your desk four or five or six times a day.

And just has one little question or one little tidbit to share with you. So they turn your desk into their water cooler. And 47% is a big number. And when you do the numbers here, they get really big, really fast. So yes, social Sam hates it when they don’t get to go to the office, they prefer a shorter commute, they sure want to have all people there to chat with, now they don’t. So say those people that they want to chat with, knowledge workers generate or are associated with average revenue of $200,000 per year per employee. Again, we got the same 48 million of them. And that means that there is increased revenue potential just from that 47% increase in productivity of $4.5 trillion. Those are trillions there. I didn’t get that wrong. And someday I’ll tell you what a trillion dollars is in hundred dollar bills stacked up.

I guarantee you, it goes well past the orbit of the moon. It’s a big number. And so, if you consider that the average gross margin of companies that employ knowledge workers is about 47% itself, that’s kind of funny, isn’t it? But productivity gain, average gross margins rate is about the same, so you’re multiply 4.512 trillion times 47% and you get $2.12 trillion of profit dropping into those companies from the productivity gains from these workers. Now, how are they going to harvest that profit? The way you always harvest profit, that you harvest it in the form of growth, you do more, you do better or in the form of cost savings. And if there are cost savings, we know that always produces dislocations and dislocations produce economic pain for individuals that have got to be managed by something. Governments tend to manage them by pumping money into the economy.

But at the end of the day, productivity is a good thing for the economy and it’s a good thing for the companies that execute in it. So now I add up the commute savings to that $2.12 plus trillion of productivity gains, and you have yourself just under $3 trillion of total impact from work from home. And if you compare it to various other things, it’s a lot bigger than the stimulus of 2008 by a big margin, it’s almost as much as the total outstanding debt of US companies. It’s more than the college loan debt. It’s some pretty big numbers here, but we come right down to it. This is the big surprising number is we stopped commuting and we’re more productive on a per hour basis by the way. Now, some people will say, “well, we’re working longer hours, wearing ourselves out.”

That’s not what this is. This is productivity gain on a per hour basis. That’s what Prodoscore is actually measured. And I know anecdotally, a lot of people I talk to say, “yes, it is weird. I’m getting more done.” And I think they’re getting more done because we all know it takes 26 minutes to go back to doing what you were doing when you get interrupted. Well 10% of the workforce goes around interrupting people and they do it several times a day. That’s a lot of interruption. That’s a lot of 26 minutes to get back online, get back on track. So anyway, I just thought I’d share that with everybody. And you can quibble with the individual numbers, but I think directionally and magnitude was we’re talking about the biggest injection of value into the economy.

Yes. In some interesting ways, cost savings on one side productivity and another with the profits driven productivity. But the biggest one you and I have seen in our lifetime and fast is already happening, that’s what I want to emphasize. This is not a tomorrow only thing. And one more thing is interesting as people are saying, “yes, but…” Yes, we’re stuck at home and it’s terrible. Well, that’s the COVID related disease management, a form a risk management. I guess I’ll call it diseases not what’s happening at that point. It’s a risk. It’s the management or mitigation of risk of disease. That’s gone someday, we don’t know when, but it’s gone someday. When it’s gone this commute economy, the lack of commuting and the work from home will still be around because the big companies have spoken and everybody has to compete with the big companies for talent and now talent can work from anywhere. And I’ll make one final prediction.

There is a lot of concern about social and economic justice nowadays. There’s been a lot of concern for quite a while about wage disparities. How much do people make doing different things in different places. The fact of the matter is it’s got to be good for all of those issues with talent anywhere can work anywhere because that kind of liquidity simply makes more opportunity for people who are talented and hardworking and want to get the job done, whatever the job happens to be. They don’t only have to be limited to the jobs that are right in their area. Now mind you, there has to be improvements in many places in terms of infrastructure, access to internet, so forth, but it’s a lot easier to improve access to internet than pick families up and move them across the country to places that they’re not familiar with, that maybe they won’t feel very comfortable at.

Corey Frank (19:59):

That’s great point. I’m sure we’re going to hear over the coming months of who does this, we’ve had the man-cave people would put up man-cave, porn about the beautiful flat screen and the jerseys in the fridge. And imagine we’re going to have the same type of thing with a the office cave, the ideal office scenario, social collaboration amongst what’s the best chair and the best height and raised desk let alone productivity tools. Because yes, I can imagine especially those that are in deeply collaborative positions where they’re on Zoom calls or conference calls much to the day where previously they had conference room sessions or whiteboard sessions. Those are the ones that are going to maybe struggle the most from a collaborative type of work environment. And it’s going to be clear that there’s going to have to be some new breakthroughs and some sharing of best practices when it comes to making those as comfortable and as creative as possible.

Chris Beall (20:55):

You know what’s funny about work from home having done it for a long time is, I’m not a fan of regular meetings, right? Holding weekly meetings, they tend to proliferate. They tend to attract parasites. And so I don’t think they’re great. It’s easy to get away or to dispose of some of those regular meetings when they don’t have the ritual of the office around them. And to let people pull information when they need it. It’s one of the principles that our company runs on us. If you need to know something and you don’t have that information, you need to know it from somebody else in the company, they don’t owe it to you, you owe it to yourself to go get it from them. And so there are short interactions that are easily scheduled when you send a request to somebody for something, and they’re working from home and they’re in say a Zoom meeting.

Well, they finish that meeting. They can take a minute or so and satisfy your request for information. And they may do that with the phone call. Don’t underestimate the power of the human voice, not just with those invisible strangers, but with your invisible or visible, that’s what we do with Zoom, friends. The people you work with, it’s amazing how much information you can get to move around with voice. And if you don’t pack the day with meetings, people have time to get some of those interactions to happen. Think of it as like the oil in an engine. A little bit of room around the meetings, lets this cooling and friction reducing oil in the form of conversations flow and people will figure out how to talk to each other. And you want to get de-siloed, I’ll tell you when everybody is working remotely, the silos go away and people start talking to each other more which is a wonderful thing in a physical office, it’s very hard to avoid physical sorrow.

Corey Frank (22:41):

Right, I love it. This is fantastic stuff Chris, even with these numbers am going to check myself on the number of zeros here, because this is massive. And even if I’m an average size $10 to $25 million company with 50 inside sales reps and 10 field reps selling B2B, this is a brand new way to think of an increase in my bottom line in my top line for doing something that most folks want to do naturally anyway, which is just being more productive. I think one of our first episodes, we talked about the need to have people feel like they’re accomplishing more and to feel like they’re really doing a good job and it’s in its inherent. No biophysiology to feel that way. And in too often, I think a lot of the encumbrances that we’ve placed on the work from an office environment burdens us to feeling our best sometimes because of all the things that don’t really matter, the political, the manifestations of org charts, and promotions and elbowing and all that other stuff. And this certainly just allows me to feel good about my productivity in a different way. Doesn’t it?

Chris Beall (23:54):

It does. I mean, Deming said that we work for pride of workmanship and the ability to get more done. That’s meaningful to us without interruption or unnecessary interruption, I think just helps our professional mental wellbeing and helps us personally. There’s another thing too, which is just a lot of evidence that says, hey being outdoors, being in greenery, so to speak, I’m looking out here right now and all the trees that surround this place that I’m living now over that direction somewhere, there’s a Rocky beach that I can walk down to, there’s nothing to keep me from taking my phone, plugging in an air pod or two into my ears and having some meetings yesterday, I had two and a half hours of conversations with people while trotting around barefoot. And is that good for my mental and physical health? You bet I’m not exactly a young buck. I’m 65 and change years old. And for me to get a couple hours of exercise and while talking to people is a great thing. And that is very hard to do at the office.

Corey Frank (24:54):

We’ll leave it there for this episode. This, this was a heady one lot of numbers, lot at stake, and certainly a lot to consider as we move forward with hopefully an end to COVID insight. Regrettably the cost has been extraordinarily high. What you’re doing here, Chris, and certainly with what the ConnectAndSell team continues to do is have to look for that axle grease to at least help them make the best of a real tough situation for folks. So great stuff has always with that, that ends this week’s episode of the Market Dominance Guys for Chris Beall. This is Corey Frank from UncommonPro wishing you a great and successful week.

 

Podcast: Play in new window | Download

 

(aka: The Problem Is Making Your Numbers)

Running your sales program with a conversation-first approach delivers needed information to you. Naturally, this is important to your sales department. After all, utilizing a conversation at the beginning of the sales process tells your sales team almost automatically if it’s worthwhile to have another conversation.

 

So, why should a CEO be selling when he has salespeople to do that job? Because there’s important information a savvy CEO can glean from having conversations with prospects. Information about how things are changing for prospective companies due to competition or demand for their products, about new leadership within their companies, and about the adjustments prospective buyers have had to make to meet the challenges of impactful events — like this pandemic. In these preliminary conversations, a CEO can truly keep his finger on the pulse of prospective buyers and detect how his own company’s product, service, or even sales message might need to be changed to better meet buyers’ needs.

 

In this podcast, Chris will also explain his take on a different result that has surfaced due to the pandemic. He begins with, “There’s a bad, bad disease in our economy, and it’s called commuting.” Listen while Chris expounds on his conclusion that the massive collapse of the commute economy is real — and that the effects of it have huge economic value.

—-more—-

Market Dominance Guys are brought to you by:

ConnectAndSell. ConnectAndSell allows your sales reps to talk to more decision-makers in 90 minutes than they would in a week or more of conventional dialing. Your reps can finally be 100% focused on selling, even when working 100% from home since all of their CRM data entry and follow-up scheduling is fully automated within ConnectAndSell’s powerful platform. Your team’s effectiveness will skyrocket by using ConnectAndSell’s teleprompter capability as they’ll know exactly what to say during critical conversations. Visit, ConnectAndSell.com where conversations matter.

Uncommon Pro – Selling a big idea to a skeptical customer, investor, or partner is one of the hardest jobs in business, so when it’s time to really Go Big, you need to use an Uncommon methodology to gain attention, frame your thoughts, and employ a sequencing that is familiar to convince others that your ideas will truly change their world. Through Uncommon Pro’s modern and innovative sales, scripting, and coaching toolset, we offer a guiding hand to ambitious Sales Leaders and their determined teams in their quest to reach market dominance. Today is the day things change. It’s time to get “uncommon” with uncommonpro.com.

The complete transcript of this episode is below:

Chris Beall (00:35):

So you have this issue that has to be solved, but it’s very rare that the company’s issue of staying in business is actually tied tightly to individual rep’s need to make the number. Where that came from was as a way of assessing performance within the territory that had been granted, is actually a way to buy the territory. That is, if I make my number this year or exceed my number, then I get the territory for next year and I get a bigger number. Why do I get a bigger number? It’s assumed it’s easier to grow a territory than it is to [crosstalk 00:01:09].

So it was actually a purchasing mechanism where this independent business person called the sales rep, purchases the territory in addition to enough compensation for their own business to stay alive, and they do it through “performance” by making the number. So there’s an agreement that this territory is worth selling to you if you bring this much revenue. 

Then maybe in clever schemes, some of it has to come from this product and some from this product, then you put all these cool features in the comp plan, so to speak, but none of those features actually have to do with solving real customer problems. The assumption is, the product solves the problem and caveat emptor, buyer beware. Buyer beware doesn’t work very well in the B2B world where the buyer is increasingly less expert than the seller because products are increasingly complex and interdependent. So the buyer must truly be able to trust the seller. And when the seller corrupts out and says, “I’d rather make the number then tell the truth,” problems happen. And they are problems, not for the seller, they’re problems for the business, the buying business and the selling business. The seller might make out, the person might make out.

It’s one of those things that as sales management and as business management, I think we should be acutely aware of. And it’s one of the reasons, by the way, I think CEOs should sell. We could do a whole episode on that. Somebody once asked me, “Why do you sell so much? Why do you spend hours a day on the frontline selling? I assign myself a kind of a soft quota. It doesn’t have anything to do with my compensation, probably does actually in some subtle way having to do with stock options and God knows what, but my quota is about $6 million a year last year. And this year it’s maybe $7 million and change. I’ve got a lot of other things going on. Why do I do that? I mean, isn’t it distracting me from the core of the business, which is … I don’t know what it is because I’m not that good of a CEO.

I guess sitting around and talking to people, I don’t know, doing stuff like this.

Corey Frank (03:04):

Staring at spreadsheets. Yeah, exactly.

Chris Beall (03:05):

Staring at spreadsheets. Yeah. I’m pretty fast on spreadsheets. The reason I do is, a business fundamentally is a means of solving problems for others that are inconvenient or too expensive to solve for themselves. That’s the purpose of the business. And unless you’re hearing the problems with your own ears and it’s coming into your own brain, very, very hard to integrate the information about your customers as it changes over time. And it changes over time even if nothing happens. It’s obvious. Competitors show up, your customer’s businesses change, innovations show up or substitutes are happening, there may be some other way of doing the job. Who knows what it is? You can have a pandemic show up. I know that sounds almost impossible, but what if the whole world kind of went home overnight? Well then what? 

So how do you learn as a CEO unless you’re out there selling? And the CEO has a real advantage as a seller. They can sell honestly. It’s really easy to sell honestly as the CEO, because you’re not tempted by the transaction. You’re forced to take a holistic view. Unless the transaction is the one that’s going to help you make payroll and you’re on that edge. Then you got to be careful. These games are life or death games at that level, so it’s a different kind of thing. 

It’s fascinating to me that when I sell something, people go, “Oh, you just sold that because you’re the CEO.” I don’t know. I can’t unbecome the CEO. I guess I could. I could quit and see whether they’d hire me back as a sales guy, but they probably wouldn’t. They just go, “Well, you only sold $6 million last year, and you did that because you’re the CEO, so we’re not going to hire you.” So I’d have to do something else. Go to work for you, maybe, or something like that. That’d be funny.

It speaks to this very basic question, which is if you’re using trust to dominate markets, you actually have got to be honest. And if the transaction temptation is too much for you, you’re going to get dominated by somebody who figures out how to be honest. It’s a huge competitive differentiator, is being straight up with folks. Then that means you’ve got to target well. You’ve got to target well and you have to be very efficient. So your sampling techniques to find out if you’re targeting’s any good, I’ve got to run really, really fast.

This is actually the core of the Market Dominance Guy’s thesis, is the reason you run conversation first is because it delivers information to you, and every conversation tells you almost automatically whether it’s worthwhile having another conversation. So it’s conversation first, not conversation lots, right? And a conversation as a sampling mechanism that allows you to reliably answer this question. Should we move forward or not in this relationship? That’s the question on the table at all times. 

So now the question is, how short a conversation can you have? How frequently can you have it, given that you cost money and your salespeople cost money in order to get that question reliably enough answered? Not perfectly answered, but sufficiently, reliably answered that you don’t have a false negative problem that really hurts your business. That’s why I always talk about the flow rate of conversations as being important within the math of sales. But it’s also important for a completely different reason, which is, if you’re not sampling the marketplace continuously, you are ignorant of change.

Say your message stops resonating. This happened to us. When the COVID thing hit, everybody went home. Our standard opener was still okay. It needed to be changed a little, but our value prop, what we call the 27 second part of the pitch, and this is just a cold call. Not that important, but pretty important. And it went from something that people could listen to, to something that people couldn’t listen to. It went from, “Hi, I’m the guy tapping you on the shoulder at the gas station and saying, ‘Here’s the additive that will get you a 10 times better gas mileage,'” to saying, “Hi, I’m the guy with the additive that gives you 10 times better gas mileage,” and saying it to somebody who’s just been on a roll over accident in a 100 car pile up. It’s the same message, just the context has changed. So we needed to change our message. 

We changed it to talk about something that we do help with, we think, at least you could be curious about, which is the problem of managing a work from home sales team. Totally different. “Your car is upside down, but I think I have a couple of hooks here and a jack and I get your car back up on its wheels.” Having done that your car is drivable again, you have the freeway to yourself. Would you like to be able to go faster? It’s actually a very different thing, but you’re not out there in the front lines as the leader and you’re just staring at spreadsheets or numbers, you’ll miss this stuff. And this is where the competition is.

Somebody once told me, a business fundamentally is a sword fight in the dark room. The only time you see anything is when there’s a clash of steel and enough sparks to get some dim outlines. So you better be in the fight. You can’t be outside just listening to it.

Corey Frank (08:00):

Well, speaking of taking advantage of opportunities, we have talked before we started recording here about this massive amount of capital that is seemingly invisible to the economists and the journalists and the politicians today that is pouring into the United States. I think now would be a good time to chat a little bit about that, Chris, because I think our listeners would certainly want to kind of see again that high mountain air, the second piece that has really kind of inspired you as of late to see the invisible, so to speak.

Chris Beall (08:34):

Yeah, let me share my screen here, because this is really kind of shocking, at least to me. So I got up a few weeks ago, I think it was three or four on a Saturday. And sometimes on Saturdays, I don’t know what it is about Saturday morning, but I’ll wake up sometimes and think, “There’s something really bugging me.” And I was listening to and watching all the doom and gloom going on out, and I thought, “I’m not seeing the world this way, but I don’t have any numbers to back it up,” so I thought I’d go get some numbers. 

So the way I was seeing the world, and that I’m still seeing the world is that we had a bad, bad disease in our economy called commuting. And you would never have designed it [inaudible 00:09:11] ever. Nobody would ever say, “I’ve got a great idea. We have a lot of ways for people to interact with each other, with voice and with video and they’re pretty much universal that can reach into almost every home. Gosh, we got all this, but I have an idea. I think, let’s do this. Let’s take 3000 pounds of steel and put some rubber tires on it and an engine in it and then take 30 minutes or there abouts each day and sit in that thing with some danger to ourselves and let’s sit in that thing and let’s all get together so that our three pound brain can be near some other three pound brains so that we can look at each other when we talk to each other, but we could even do that with video. So I guess maybe so we can smell each other or touch each other, because those are the two things that you can do for sure up close and personal. And we can sit in conference rooms together, except some of the people on the other end of the speaker phone will feel left out.”

So you would never have designed it. So my question was, “Well, what if it went away? What if it’s gone away?” And I know a lot of people are saying, “Well, this is COVID and it’s temporary,” and so forth. I became pretty convinced that the massive collapse of what I call the commute economy is real and it’s done. And I looked at it from two perspectives. 

So one is, what do CFOs really not like? By and large, they don’t like leases for office space on the balance sheet. And if you’ve ever tried to get out from under a lease, when for whatever reason, your business, you had … we did it back in 2014 when we left our San Mateo office and decided that having all those people together didn’t make any sense. That was pretty painful. It’s always painful to get out from under a lease. The liability is just not fun to have. And CFOs don’t like it. 

The other thing CFOs don’t like is just waste, depending especially on head count. So I just went out and started researching this question, which was so … are the really numbers that tell us that the commute economy had costs? And what about productivity? Are people more productive in the office? And I’d run into this, and not even a study. Just these guys at Prodoscore that I happen to know, P-R-O-D-O-S-C-O-R-E.

You should go check them out if you want to know whether people are being productive or not. They’d come in and tested us as a company. And by the way, they found out that John T McLaren, our Senior VP of Sales rep, he’s also the President now that I think about it. Anyway, John T was the most productive person they’d ever seen, is what they said. I thought that was pretty interesting. They have automation that measures productivity, and whether it measures it absolutely or relatively, that is even if it’s not an absolute number, it would be able to tell if productivity had changed up or down. 

So they said that they had a 100 million data points that showed that there was productivity gain of 47% from people who had gone to work from home because of COVID. 47% productivity gain is insane. And there’s no consultant on earth who wouldn’t dominate the entire planet if they could offer a 47% productivity gain across any workforce, people seek 3%, right? 4% is a big number, but 47%? And this is measuring what people actually do. So, that was shocking. 

But then I also thought, “Well, what about the cost of commuting? What if the knowledge workers just in the US didn’t have to commute?” So I went out to the government sources and here and there, and I put together this spreadsheet that you’re looking at. And it’s out there on LinkedIn. You can find it. It’s in a post that I did back then. And I’ll probably repost it, maybe we’ll repost it and make it easy to find, but pretty simple. It says there’s 48 million knowledge workers, and they commute for 26 minutes on average each way, as we all know in bigger cities it’s a lot more than that. So I just took it up to hours and said, “Okay, well, $50 an hour, times 48 million knowledge workers, times 199 hours. What is that? 9 billion labor hours and $478 billion of labor that’s wasted commuting.”

And that’s kind of crazy, if you think about it, right? It’s hard to find $478 billion. That’s bigger than the bail out on the Great Recession of 2007, ’08, ’09, whenever that thing was. That bail out was $250 billion, $300 billion, depending on how you count it. Right? Then they have to drive all over the place. And I thought, “That’s no big deal.” And then I calculated it out, and it’s like, hey, just at the standard 57.5 cents of mileage reimbursement, that’s another $184 billion. And then I decided to just throw in something as an ancillary, kind of get a feel for it more than anything else, which is, so what percentage of those people have kids and those kids need some care when parents are commuting just when commuting. And the answer’s probably yes, that’s $33 billion.

So the direct costs are $695 billion, right? But the rest of the workforce also was delayed in commuting. So what if they were spending 25% too much time, actually 33% too much? What if they can save 25% of their commute time? Everybody who has to commute just by commuting on roads that aren’t full of knowledge workers. And I think that’s pretty realistic. We’re all seeing it now. And the answer is, there’s another $117 billion of savings. So the commute savings both directly from knowledge workers not commuting, no labor and mileage, then I threw a one childcare thing. I bet I could have much more if I felt like it. And then the impact on others from us knowledge workers clogging up the roads with our 3000 pounds of steel, and I’m not even by the way, getting into what comes out of those cars and all of that, just ignoring that.

Corey Frank (14:45):

So the rental costs for commercial real estate and all the office supplies, all those hard G&A that also contribute to this is incredible.

 

Chris Beall (15:55):

Yeah. And this number looked big to me. And then I went over to the productivity number and just looked at, well, how much revenue to companies make per employee? And for us knowledge workers, that’s about $200,000. So the revenue potential from work from home is $14 trillion just improve productivity, $14 trillion. And I said, “Yeah, but the companies only get to keep the gross margin, gross profit.” So gross margin average for US companies, 47%. So it’s only $6 trillion, and we add that to our $813 billion of savings. And you get $7.445 trillion of free money for the economy. 

Now I hear people already saying, and some people say, “Well, it doesn’t get spread around.” Of course, it doesn’t get spread around immediately. It ends up, a lot of it in the hands of companies, and what do companies do with it? They tend to reinvest because they’re ambitious, and they reinvest in things like hiring people and they go out and try to expand their market. Some of them might even choose to go dominate markets. You never know. 

So the fact of the matter is, it’s a lot of money. How much? Well, $7.5 trillion is just too much to think about. So 2008 stimulus, oh, I’m sorry. It was only $152 billion. So it’s 46 times as much money as we spent to bail out the economy in 2008. It is a little bit less than the total debt, $9.5 trillion of all US companies. The one I really like is total 2019 government spending $4.4 trillion. So this is bigger than the US federal government, almost twice as big. And it comes into our economy, it’s already happening as far as I can tell. No economist has weighed in on this. I’m not an economist. This could be completely wrong for some reason I don’t understand, but I think we’re seeing it already. And I think it’s going to surprise us.

What is it going to produce for business? Well, the opportunities for dominance go way up. That’s for sure. Because as the economy gets stimulated, I suppose is the right term, by the $7.5 trillion a year coming in, I should have broken it down by the minute. It’s a fair amount of money per minute at that. I mean, here people are freaked out about $1.5 trillion of student college loan debt. So one year of these savings would pay that off six times. [crosstalk 00:18:16]

Corey Frank (18:16):

That’s incredible. That’s a hidden $7.5 … you found it in the virtual couch cushions of America.

Chris Beall (18:24):

Yeah. The virtual couch cushions of America. I think one of the things that we don’t understand about our economy is how it really works. So we measure it by GDP and all these old measures that kind of don’t really capture it very well. But one thing we know that economists and economic models are built to not do is they’re built to not recognize the impact of sudden change, because one thing that can’t happen in economies, except from suddenly declared war and it has to be big and fast, is sudden change. So the economic models make a lot of assumptions, that nothing has changed, but what if something changed that’s really positive and made a big difference, like suddenly people like me can live in port towns in Washington because my fiance doesn’t have to commute to Bellevue.

Think about the economic impact on port towns, and I have a couple of people who, we do well in life and we’ll spend a lot more money here. What does that mean to the local economy? Well, I guarantee you one thing, it wouldn’t have happened without the collapse of the commute economy.

Corey Frank (19:32):

We started this conversation, and this is where we’ll probably end it today is with the Milk-Bone and the dog at a gate, and you’ve come full circle here in that for a company who is struggling thinking about, perseverating about moving their team to a work from home model, oftentimes the gate is open. The spreadsheet I think that you walked is through here, is just walk around the gate, come on in, the water’s fine. 

The downside that a lot of the hesitancy that a lot of companies would push back on, Chris, is the culture and the continuity and the three pound brain, there is some benefit from being next to another three pound brain. And that’s my feeling of involvement, my feeling of social status and things of that nature. And I think we had … a lot of those could probably addressed if they listened to last week’s episode with [inaudible 00:20:29], and the wonderful culture that he’s building with his organizations. But, what do you say to that just briefly when, okay, I can go around the gate. I see the hard costs. It makes sense from a P&L, from an EBITDA perspective, but man, there is real atomic weight from that three pound brain being next to three pound brain.

Chris Beall (20:48):

Well, we’re going to have to try it for a while, because going back to the office is expensive and dangerous. Dangerous in a funny way. And the plaintiff’s bar is itching to go after an employer who forces people to come to the office and one of them happens to get sick. I mean, they are armed and ready to go. Anybody who’s familiar with how the plaintiff’s bar works and how class action works knows what is about to happen. 

So folks voluntarily coming back in, still there’s some legal risks, just is because who knows what assurances you may have inadvertently provided, what warning labels you might’ve had to have, what mitigations you could have done that you failed to do and not knowing about them, by the way, might not be a defense, right? So you’re about to learn something auto manufacturers have known for a long time, which is that you’re responsible for safety if you offer something where there are safety issues that are different from what was expected. And since no one knows what to expect, this could be problematic for anybody who’s bringing folks back. 

Secondly, every mitigation is untested. There are no tested mitigations. I saw a beautiful article in the Puget Sound Business Journal that showed a picture, an infographic, and it showed the 11 mitigations that you should consider before you bring people back to the office. And they were things like coming in with a new HVAC system that had different kinds of filtering in it and circulated air differently. Really? For a year and a half or two years of benefit? I mean, if you’re going to bring them back, okay, but really? New HVACs so the three pound brains can sit next to each other, but not infect each other? Think anybody’s ever tested that? I don’t think anybody’s ever tested that, right? [crosstalk 00:22:35] Not one of these mitigations has been tested. Coffee machines that you operate with your smartphone. I don’t think anybody’s ever done laboratory testing or in real life testing of the impact of that on respiratory virus transmission.

So this is just stuff people are going, they’re kind of waving their hands and saying, “But, but, but, but, but.” Now, remember there’s a finger on the scale, which is the other side of those big leases. So you should expect to see a lot of stories about how essential it is and possible it is to bring people back into the office. But I tell you from a scientific perspective, again, all 11 of those mitigations have got to be done and all 11 have got to work, and then you have to not get a little bad luck, like, well, it turns out they stood next to somebody in the Starbucks downstairs. It’s unlikely. You’re going to have to learn to live with it anyway. 

Culturally, what do you do? I know in sales what you do. It’s simple. I’ll show you. I’ll show you. Let me go show you, because I have it right up here on my screen right now. So here is an answer, and I admit this is a commercial. I apologize for it. But it’s an answer. For your sales team, nothing is more energizing than talking to people. 

Corey Frank (23:50):

That’s correct. 

Chris Beall (23:51):

This is our team today, and here’s an SDR’s talked to 25 decision makers. Set one meeting, so they had a moment of excitement. It’s had 14 followups. It’s Friday, people tend to be a little busy on Friday. I got two referrals, and had 5 minutes from 24 seconds after pushing the button on average before he talked to somebody, Josh Lyman did. And I’m sure during that time he was doing something else that’s useful. 

It’s kind of funny. We talk about culture. Like culture is about ping pong tables or it’s about drinking beer in the conference room or whatever it happens to be, which I think people gave up a while ago to for safety reasons. Fact of the matter is, people, as Deming told us, they worked for pride of workmanship, and if they have good work to do, and they’re having fun doing it, and they’re being managed in a way that’s fair and reasonable and encouraging, then the core of culture is there. And that’s the number one thing is work culture actually can be about work, and it can be about what somebody loves to do. 

If you’re in sales, you hopefully love to talk with people. And so here, my team today, they’ve talked to 168 people as we see down here. That’s a lot of conversations, right? Here’s what also is culturally kind of good about this. They didn’t have to make those 5,655 frustrating dials and navigate those fun systems. That was done for them. So that’s kind of pleasant.

And then another thing is, people like to be able to help and they like to be helped. If you need help, you’re stuck. You need to learn. If somebody notices you need help, and there’s a lot of ways to do that. So say your boss or your coach could come in and say, “You know what? This guy, Sean McLaren, he’s our chairman. Man. He’s kind of a lot of busy callbacks today.” By the way, Sean McLaren really is our executive chairman who really does talk to people. So today he had six conversations and set one meeting. That’s pretty good, but he’s having a hard time keeping people on the phone. I wonder if Sean’s got issues today? Is it a little slow? Is his voice bad? Well, this one can’t be correct. That’s a minute long conversation. So maybe he just coded it wrong. 

These are short. I have a feeling if I listened to one, and we’re not going to do that right now out of respect for Sean’s awesomeness, but hey, if Sean needed a little help, just thinking about his state of mind today, his mood or whatever, then we can help him. Right? Then here’s another thing is, it’s fun to do work that counts. It’s not much fun to do work that doesn’t count. So today this team, it’s 5,655, and now it’s gone up by a couple. It’s only three in the afternoon after all. Would that have been culturally marvelous for them to just gone to voicemail 1,825 times today or navigated to voicemail 1,567 times, or been told by a gatekeeper, “I’m sorry. Corey is not in today. I’m not available.” None of that looks like fun, right? So culturally that’s part of it. 

Now the rest of it is this, human beings actually don’t have a sense of smell like the other animals, the other mammals. So your dog can smell you across town. And I’m speaking literally here. I had a dog once that freaked out, ran off in a thunderstorm and she went all the way back up to our mountain home, which was 17 miles away of complex navigation involving roads and trails and God knows what. And she went to every neighbor’s house and sort of knocked on the door to check to see if we were there, because we were out of town. Imagine that, right?

Corey Frank (27:29):

Yeah. Well, she knows that there’s a bunch of Milk-Bones on the other side of the fence. That’s probably [inaudible 00:27:33] that she couldn’t get to. Yeah.

Chris Beall (27:34):

Exactly. Well, what was she really doing? She was following a scent trail. She had mapped a scent map, not a trail. She had mapped the scent. She had only been up and down that road one time in her life, one time up, one time down. That was it. This is a dog who had never been to town before, before we moved to town. So she remembered how to get back to that complex mountain home by knowing the smell of everything along the way. So dogs are really, really good at this.

You go to the airport, they don’t have a trained human who’s going up and down in the security line, sniffing everybody. They have a dog, right? Humans are not the most brilliant in the world at smelling each other and figuring out if they’re sincere to be trusted. But we are geniuses, like dogs will never be, at hearing each other’s voices and seeing each other’s faces, and the voice and the face are the two ways that we express ourselves in terms of what really counts, which is, do I care about you? And if you want to have a great culture, let your people know you care about them and let them tell you they care about you and about the mission. And you just do it in natural ways, in the normal course of business, like getting on these zooms by just talking on the phone. 

Everybody in your company who is physically capable of hearing and seeing, and that’s not everybody, I get it that that’s really tough for folks who have vision problems and hearing problems, but of the rest of, of the mass of folks at your company who don’t, they’re so good at interpreting sincerity and good intentions and meaningful direction from tone of voice, for the same reasons cold calling works, it’s possible and easy to project fantastic culture to a remote workforce. 

And in fact, you have more time to do it during the two hours you would’ve been commuting, let’s break it down. I have a team in North America, personally of 28 people. So in two hours, how many five minute conversations are there? There’s 24. That’s pretty cool. Think about that. That’s 24 times I can spend having five conversations. And in those five minutes, each one of those minutes pays seconds carrying 20,000 bits of emotional information, terabits of emotionally important information can be transmitted. 

Having meetings where everybody gets to participate, this is one of the beauties of zoom, in a standard conference call, the standard conference room, participation is dominated by the physically most dominant person. They stand, they take over the room, they interrupt, they talk, they go to the whiteboard, they dominate. In a hybrid where there’s a speaker phone in the desk or the table in the conference room, you get a two tier economy, two tier culture. People in the room, and the people in the mushroom, people in the mushroom don’t have a shot. They don’t exist. They will never have the floor in any significant way. 

On a regular conference call, just voice only, it’s tricky. You need a good moderator, but in a zoom call, it’s so natural. Everybody sees each other’s face. And normally the contribution level per person goes way up and people feel more included. So I think making an inclusive culture is actually easier, and some of the biases that we have about people are a little, shall we say muted in this environment and biases are not the greatest thing in the world. So I actually [crosstalk 00:30:58]-

Corey Frank (30:58):

Happened 10 years ago, then you could argue that the urgency to go back to the commuter economy would have been so much more urgent, but because the tech stack is so much more in place and plumbed and accepted that there really isn’t many excuses to go back to the way we were.

Chris Beall (31:17):

When you work the numbers, it says don’t do it. When you work to culture, it says don’t do it. If your work productivity, it says don’t do it. We solved this problem a long time ago. We would never have designed it like we had it. Clogged cities with roads you can’t get through on, people frustrated, not seeing their children, not getting enough exercise, not eating well, stopping at the bar on the way home, sucking down the lattes because they’re bored. Let’s face it, that was not healthy. It wasn’t economically healthy and it wasn’t otherwise healthy.

Corey Frank (31:48):

Well, if that’s the case, then I tell you what, since we’re up against the clock here, Chris, by the next time we do this, then your background needs to be changed to the new virtual commuter economy. And I expect, I think all of our listeners expect a view of Discovery Bay for port towns, as opposed to the crowded streets there that we see behind you now.

Chris Beall (32:11):

Exactly, you’re going to be looking out towards a Protection Island, and I think we got a lot of protection that’s actually built in. It’s tragic what’s going on with all the cases of people getting sick, people dying, but I do believe that this bunch of people worked hard to create a situation where we can work from anywhere and we can contribute to society no matter who we are. I believe there’ll be a next wave that we haven’t even touched yet, which is inclusiveness across society. There are so many smart people who don’t contribute, don’t get to contribute because they don’t live where the rich businesses are. And I’ve done some experiments around that about, oh, back in 1991 and ’92 that proved to me for sure that there is no difference in talent among all of our different communities that we have in this country or anywhere in the world.

And I think one of the side effects of work from home and work from anywhere is going to be that more people are going to find great careers as knowledge workers who are currently being left out. And I think that’s another wave that’s coming, and nobody’s seeing it coming. 

Corey Frank (33:23):

That’s great. Okay. Well, we have a topic to discuss for next time. In the meantime, I’m going to go search for my share of the $7.5 trillion that you say is buried somewhere in the aether, in the virtual couch cushions of America. So until next time.

Chris Beall (33:40):

I’m going to go load up with the [inaudible 00:33:42]. Talk to you later.

Corey Frank (33:40):

Beautiful. 

Chris Beall (33:40):

Thanks, partner. 

Corey Frank (33:44):

Thanks, Chris. 

 

Podcast: Play in new window | Download

The problem in sales is that the desire for the transaction puts most salespeople already behind the eightball. When he was growing up, Chris’ family put up a chain-link fence originally for the goats, but a few years later it helped with the dogs and inspired an experiment.

Chris opened the gate 30-40 feet away from where he put a dog bone over the fence. His dog tried to go over, under, and through the fence, but couldn’t get to the bone. But it also didn’t back up enough to see the open gate. This is what most salespeople do.

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Use your expertise to back up and explore rather than trying to drive their nose through the fence to the juicy steak, the commission on the other side which is counter to the role you want to be in. Most salespeople are screwed up, and most sales compensation programs are screwed up. They encourage people to go through the fence rather than looking for the gate.

Market Dominance Guys is brought to you by:

ConnectAndSell. ConnectAndSell allows your sales reps to talk to more decision-makers in 90 minutes than they would in a week or more of conventional dialing. Your reps can finally be 100% focused on selling, even when working 100% from home since all of their CRM data entry and follow-up scheduling is fully automated within ConnectAndSell’s powerful platform. Your team’s effectiveness will skyrocket by using ConnectAndSell’s teleprompter capability as they’ll know exactly what to say during critical conversations. Visit, ConnectAndSell.com where conversations matter.

Uncommon Pro – Selling a big idea to a skeptical customer, investor, or partner is one of the hardest jobs in business, so when it’s time to really Go Big, you need to use an Uncommon methodology to gain attention, frame your thoughts, and employ a sequencing that is familiar to convince others that your ideas will truly change their world. Through Uncommon Pro’s modern and innovative sales, scripting, and coaching toolset, we offer a guiding hand to ambitious Sales Leaders and their determined teams in their quest to reach market dominance. Today is the day things change. It’s time to get “uncommon” with uncommonpro.com.

The complete transcript of this episode is below:

Corey Frank (00:34):

Welcome to the episode of the Market Dominance Guys, where the best in sales today comes together. We have Chris Beall, CEO of ConnectAndSell. So Chris, first of all, good afternoon, got a lot going on in your life, which we may get to in this episode. But before we click the record button, we’re talking about sales. And the problem in sales today is the nature of sales in and of itself, is the fact that the desire for the transaction, which most salespeople are already behind the eight ball. So why don’t you set that up a little bit better, just so I understand what that high mountain air has given you from the latest riff.

Chris Beall (01:18):

Actually, no high mountain air here. We’re moving from Seattle. We’re moving to Port Townsend because we can. And part of that is, I’ll call it, the great work from home migration, where folks are able to live wherever they want now, if they’re knowledge workers. Employers have lost the moral authority to tell people to come in and risk their lives in order to get their three pounds of brain physically closer to another bunch of three pounds of brain by moving 3000 pounds of steel for 26 minutes each way.

Corey Frank (01:44):

That’s correct.

Chris Beall (01:45):

That was a strange idea to start with. You never would have designed it that way. If you’d thought about it for a minute, you’d never have said, “I got a great idea.” People could talk remotely to each other and do all sorts of things, collaborate and do stuff. But, I got a better idea. Let’s move 3000 pounds of steel for 30 minutes, in order to get those brains close enough, that the way they talk to each other’s right through the air, rather than through the telephone, it’s finally been shown by necessity to be bankrupt, and we’re never going back.

But the problem with sales, remember one of my reps once asked me in Denver when I’d come back from flying across country. Remember when we used to do that?

Corey Frank (02:27):

I vaguely recall. Yes, absolutely.

Chris Beall (02:28):

Yeah. We were all sitting together and talking about how to get better. And he said, “What’s the one thing you would change about us, to make us like you, as effectively as you do?” And I said, “Oh, it’s simple. I would have you believe in the value of what we do, or the potential value of what we could provide, for the person that we’re talking with as much as I do.” So I get it. And then they buy more. So no, it’s the purpose of you believing that is for them to buy more. It won’t work unless you’re a psychopath, it doesn’t work.

Corey Frank (02:59):

So it’s not just product knowledge.

Chris Beall (03:01):

No, it’s the opposite. And product knowledge is, actually, you need to have confidence that the product that you represent has an above average chance of being part of a potential solution. And that you might explore it, you might find part of within the next conversation. And the next conversation could tell you enough, to tell you to move forward or not move forward. That’s all you could do. And I call it the dog, the fence, and the phone problem. So when I was a kid, I grew up out in the desert, North of Scottsdale, what is now Scottsdale. But back then it was way out there. And we finally put up a chain-link fence, cause our goats were a problem. And they were a problem, like they’d climbed up on this realtors convertible T-Bird. They have sharp hooves and it’s not so great when they’re dancing around them on the convertible roof.

And that costs my parents a little money. Then they went next door. We had one neighbor, it’s kind of funny, within a mile and one neighbor and they were next door and went into their garage and sort of started up fire. And this guy’s ham radio set, it wasn’t that great, right? So we put up a chain-link fence, and that meant our dogs were inside the fence. And one time I did an experiment, it was a very cruel experiment, but I was kind of an experimental kind of kid. I think I got it from my mom, the woman who used to say, “Chris has a lot of room out in the desert to bury a child.” I thought, “I’m going to open the gate over here. And then I’m going to come down about 30, 40 feet away and put a dog bone, one of those milk bones, on the other side of the fence and see what my dog does.”

And the dog tried to go through the fence, tried to go over the fence, tried to go under the fence, but never got the idea that it should back up and look around and see the open gate and go through the open gate. I think that this is how, sadly, most salespeople behave. Rather than trying to find the opening that may not be there, and if it’s not there, use your precious time to go find another fence. The opening that might lead to a place from which a mutual solution can be understood.

You’re taking the role of the expert. You’re the specialist, but not using that role in a corrupt way to, to try to manipulate or force somebody into a transaction. Just using that expertise in order to explore; that means backing up as often as going forward and not just trying to drive your nose through the fence, cause there’s a transaction on the other side. That juicy steak on the other side, that transaction that commission, often make salespeople behave in a way that is directly counter to the role that they might claim that they’re staking out as a consultative salesperson.

If you’re being consultative, the first thing you have to admit is that there’s a reasonable shot that you can’t help. Qualification is really answering the question. Does it make enough sense right now, from what I understand, to answer the question maybe in a positive way, maybe yes. That’s worth going forward with the next conversation. If not, they’re disqualified. So all the normal qualification dance, and all that, is just garbage, it makes no sense whatsoever. If you sell anything interesting, then I don’t have a budget for it. I mean, that’s just ridiculous. The idea that somebody has a budget for something that actually takes a salesperson to sell, you have to have a budget for it. They can go click on it and some online, whatever, and buy it that way. And even then if they know everything about what you’re selling, you definitely can’t be the expert.

You can’t be providing the value of knowledge, and then the value of a willingness to explore. So I think most salespeople are screwed up, but most sales compensation programs are screwed up this one way. They encourage the dog to go through the fence instead of to look for the gate.

Corey Frank (06:52):

And then, so that desire for the transaction generates maybe alternative behaviors that are not conducive to establishing trust. Let alone curiosity.

Chris Beall (07:04):

Yeah. I mean, they’re fundamentally dishonest, right? If I tell you something for the purpose of getting you to do something, instead of for the mutual purpose of us understanding something, getting it on the table and being able to talk about it, how is that different from me physically grabbing you and forcing you to go through a door I want you to go through or… [inaudible 00:07:24]

Chris Beall (08:23):

There’s really no difference. I’m saying, I’m in a position of superior power and that I know more than you do, and I’m going to use that power to cause you to do what I want. Now I could say sincerely, what I want is always good for you, but that’s unlikely to be the case. Honestly, it’s unlikely to be the case and, discovery, I think is a funny term. In discovery, we tend to think, what are we discovering? Let’s discover the stuff about this person that helps us sell to them. Let’s discover their pain. Maybe their pain isn’t what’s relevant to them right now. Maybe there’s some surrounds some context, some way of understanding the situation that will lead to a realization: “Hey, there’s something much bigger that we could be doing now.” So I think the false negative problem is the one that dominates sales, not the false positive problem. False positives waste your time, false negatives waste the marketplace.

There’s a big difference between the two, a false negative means I left the best deal, potentially, to my competitor. It’s a negative to me, because I didn’t ever engage in a way that gave it a shot. It’s a positive to my competitor cause it’s so good, and now I’ve walked away. And yet we do nothing in sales about the false-negative problem. And that goes all the way back to something we’ve talked about before; the original purpose of sales was not to dominate markets, and to shape the valuation of companies. The original purpose of sales was to dispose of inventory in generating flow of gross profits. And when those two come in collision with each other, the old one tends to win because it’s tied to the compensation plan and the belief systems of salespeople. So every sales book you pick up , by and large, will tell you to do something, to manipulate somebody in order to get them to transact with you. And don’t worry. It’s okay.

Corey Frank (10:14):

So, but that’s pretty widespread. I mean, that’s what we train newer sales reps to do in order to be successful, especially in a commoditized environment. If I’m selling whatever the commodity of the day is, let’s just go back 15 years ago, long-distance services or transport services or a Microsoft service provider, for instance. I can get the various types of services from many different types of providers. And so why does it engender that type of inauthenticity in order to sell? Is it because of the pressure of how do I differentiate?

Chris Beall (10:53):

I think so. The fundamental failure of not being differentiated or not knowing your differentiation, I actually have never seen a real commodity. I don’t know what they are. My example is always my breakthrough script for coffee beans. If I’m the coffee bean guy, and I’m delivering the coffee beans it’s probably something like this. I believe we’ve discovered a breakthrough that completely eliminates the fundamental risk that your most loyal customer is going to walk away disappointed because you didn’t have their favorite grind. Does that sound undifferentiated? Of course not.

Corey Frank (11:29):

No, not at all.

Chris Beall (11:30):

It makes you think that, maybe, there’s something different. Not about the beans, although you do get the idea that I will have a selection that makes sure that your customer’s favorite grind is either in there right now or will be discovered. It does give you the idea that my deliveries will be accurate and on time, because otherwise you might be out of that particular kind of bean.

Corey Frank (11:52):

So in other words, Chris, if I hear you correctly, whether you’re in a commodity or not, is less relevant to the fact that how you communicate the messaging around an economic, a strategic or an emotional message, that really is where the differentiator happens. So even if you do find yourself in a commoditized situation, your superior messaging work should be able to pull you out of it. To communicate to the prospect where I don’t necessarily have to be inauthentic.

Chris Beall (12:25):

I don’t need to be inauthentic in any way. I’m trying to sell one product, which is the meeting. And the reason is the psychological difference between me, coming at the prospect, talking to the prospect, and then coming with me on a journey of exploration is radically different. It’s possible for somebody to comfortably confess in a conversation that they voluntarily come to. And it is a matter of confession. Even when we talk about folks’ pain, they don’t wear their pain on their sleeve. They really don’t. In fact, in business, your pain is a secret, because it’s a weakness and folks in business don’t advertise the weaknesses. So you must be trusted before somebody is going to tell you their weakness in business. You could use it against them. You could go out and tell the world, that Corey’s coffee shop is located on a corner that doesn’t get any traffic, and the Starbucks across the street is killing him.

Right? Don’t go to Corey’s. If you confess those things to me, I could be the enemy. I could take that information and do something bad with it. So if I’m coming to your coffee shop, Corey’s Clever Coffee, and I don’t have an open mind about your business and you don’t have a willingness to trust me to tell me what is true in your business. Maybe what’s true in your business is this: “Chris I’m really frustrated. And over there at Starbucks, they got the big line going out the door. I have confidence that when you come into my coffee shop, not only get better coffee, but it’s quieter. A lot of people are annoyed by the music over there, and by all the people going in and out. There’s better places to sit, I got more comfortable chairs and they’re set up in a way that promotes conversations.”

“And I don’t throw you out in 30 minutes if you’ve been hanging out too long. And, by the way, my WiFi is really fast. It bothers me, that folks aren’t coming in here.” Now, that’s an interesting conversation. You’re confessing a bunch of weaknesses about your coffee shop. And if I’m the really smart coffee guy, I say, “So is there ever a problem? You’re trying to run this really quiet shop. Those espresso grinders are really loud and I’ve heard some people complain about that is the other shops. Is that something that, given that you’re trying to have a quieter environment, that is a problem for you, or have you handled that?” “Oh, let me think about that,” says Corey. Well, it turns out that I know somebody who has an ultra-quiet grinder and it works really well with all the beans that we sell.

In fact, we roast them a little bit extra and they grind a little bit quieter. Now that’s a coffee person listening to this, I’m just making this stuff up. I don’t know anything about grinding coffee. I do know about sitting in coffee shops, I’m wishing it was quiet. That’s just me. My point is, where do you get to the point, Corey, where you’re willing to confess that weakness or those problems to me somewhere inside that discovery conversation with that exploratory conversation? And if I’m bucking for a transaction, why would you do that? If you think my purpose is to get you to buy something, why would you confess to me? And if you don’t confess to me, how do we have any problems to work on?

Corey Frank (15:44):

If I sold you, Chris, are you an easy sell? Do you see yourself as an easy sell? Do you see yourself as pretty uncomplicated emotional mechanism to get to that trust? Or are you a natural, typical left brain, maybe cynical, and I want to buy and I want to be sold? How do I sell to Chris Beall? And for those who are listening, this is probably something you should take notes because this guy is the CEO of a very large company with an unlimited budget. Let’s get everybody the keys to the kingdom. So how do I sell Chris?

Chris Beall (16:20):

Well, first of all, you do have to approach me as something that makes me think just a little bit. I have to be intrigued. I have to be curious. Secondly, you’ve got to do it in a way that is open about what it is that you’re doing. I really object to somebody who’s asking me the five tricky questions that box me into agreeing with them. Well, wouldn’t you agree, Chris, that it’s superior to have your children left with some money after you die, then being destitute and on the street? I’ve actually experienced that recently, and I’m not an easy sell once you do that. Once I decide you’re trying to manipulate me, I’m really, really difficult. But, if you want to talk about business and the challenges that we might be having, I’m easy. Now, I’m not easy to come up with a big first transaction.

I tend to want to try the relationship out. Because a lot of stuff that sounds great, turns out to be harder than you think. I don’t often think people are deceiving me. I just think things tend to be hard. That is, solved problems are less hard than unsolved problems. So by its very nature, the problems that I have that are currently unsolved are the hard ones. And therefore, they probably don’t avail themselves to easy solutions. So when somebody offers me an easy solution, I think that, “Could be so, but this problem could be a hard problem for some other reason.” I’ll flip it around. So, when we sell ConnectAndSell, we sell an easy solution to having lots more conversations, but that’s not the problem. That’s not a problem we’re solving in and of itself. It is an advantage to have a lot more conversations, no doubt about it, but it gets us into the world of sales. And selling and dominating markets is not an easy problem.

If it was, we wouldn’t have this podcast, right? If, that were a trivial problem, “Oh, I think I’ll just dominate this market.” Oh sure. Choose a market of one. You’ve got a pretty good shot. Once you get to two people, it starts to get a little diverse. At 10, this starts to get pretty hard, right? So it’s a fundamentally hard problem. I have a belief, all fundamentally hard problems have fundamentally hard math at their core. They either have some chain that everything in the chain has got to work. And so the probability of the whole thing working is the multiplicative outcome of taking all those probabilities in the chain and multiplying them together. So if I have a six-step chain, and then it’s a 50% chance that any given step will fail, the odds of success are very, very small. Here’s my chance of succeeding:

one over two times, one over two times, one over two times, one over two times, one over two times one over two. What is that? Well, that’s one over 64, right? So one out of 64 times I’ll get all the way through that chain of events with only six events in it and a 50-50 shot at each one working. but it’s only one out of 64 times, the whole thing works. And I just have to think about the world that way. I think people in business should think about the world more in terms of probability or bets and not the single debt, but looking at value chains and asking about dependencies. If this has to happen in order for this to happen. If I must get Corey to come to a meeting, and then if I must get him from that meeting to accept a test drive.

And if he must actually show up for the test drive with his people, which he has to provide us with the data. And if he can get his legal team to actually sign the test, drive DocuSign. And on and on and on. I go down there and I say, “Well, what is dependent on what?” And there’s a problem that people have. This is one of the other problems of business: salespeople want to just go one step to the transaction, but analytical types want to see how many steps they can put in a process because it shows they’re really thorough.

Corey Frank (20:32):

Sure. Oh yeah.

Chris Beall (20:33):

And if you put enough steps in a process, one thing that’s guaranteed; process will never be executed successfully in a finite amount of time.

Corey Frank (20:42):

You got your too many variables into the system and it’s going to be challenging. Certainly right. VCs are notorious for that or private equity. Hey, fetch me another rock. Hey, if you give me the cohort of this year, and this year’s worth of revenues, then bring it back. And meanwhile, they’re going to use that as the cramdown, as we’ve talked about in the previous episode. So I think that’s a good springboard into the math of sales then. As we’ve always talked about, as you’ve always taught me here in these 40 odd episodes, right? Is that the limited variables in a system, I can predict if I put my major constraint or my main constraint in the business is trust-based conversations at scale. And so if I add that to the top of the funnel, it’s logical that every other piece of the funnel, the math should restrict down to whatever the output is.

And if I don’t know or care about any of those variables in the system, then I’m going to be pretty much relegated to just sell more. Just whatever my marketing team is able to throw from an AdWords perspective. And, for this journey to be authentic, is only as strong as the weakest link. If my math isn’t right, if my focus on the math isn’t right, then maybe that’s why sometimes I’m a little bit more inauthentic on my sales calls. Because I’m going to try to fix or try to artificially create some ratios in my calm, dial the conversation, conversation to page pitch, to meeting, et cetera. That really isn’t naturally there. It’s not naturally water-falling down. But, if I can be a little bit more manipulative, maybe I can help with some of these other ratios.

Chris Beall (22:28):

Exactly. I mean, that’s such a perfect description. It is exactly analogous to the machine and the machine shop. Or are they in the factory that’s supposed to take the blank and it’s supposed to turn it into a tube, or whatever. I remember being in shop, a few years ago, that did that. And the blank was a titanium blank, and the tube was the barrel of the world’s lightest sniper rifle. So it’s less boring than [inaudible 00:22:54]. A sniper rifle you can hold at arms length on one hand, and balance on your thumb. That was a remarkable product. But, somewhere in there, this titanium blank comes in and it’s got to be grilled in a very precise way to turn it into a tube. So, say instead of accepting what the machine does, the operator decides, “I’m not getting the yield I’m supposed to get. Out of every 100 of these that come in, 97 are supposed to go out as tubes that are good enough to be a barrel. But I’m only getting 92.

So what I’m going to do is, I’m going to take the ones aside that didn’t turn outright. And I’m going to take them over here, and I’m going to work from by hand. That’s what I’m going to do. Why? Because, I want to make my number. I want to make my number.” Well, do you really want to be the person who buys that sniper rifle that happened not to be making a standard process, but was rejiggered along the way by somebody who’s trying to make his number?

And that’s how we make bad business in business. We force deals all the time, in order to make the number. Sometimes it’s done through discounting. Sometimes it’s done through overpromising. Sometimes it’s done through downright lying. There’s a reason that salespeople have a reputation, by and large, in the large, as not being truth-tellers. Because the focus on making the number provides a lot of temptation to not run the system, not run the process, and to instead rejigger the output and maybe fake it. Say, “Well actually, what I’m going to do is I’m going to change the testing, so that now this appears to be within tolerances.

Instead of being out, it’s going to be in. And I’m going to ship them downstream.” And, this is a problem that plagued manufacturing for years. And it’s the problem that, I think, has actually finally been solved in manufacturing. I’m sure there’s backsliding all over the place. But in manufacturing, where I used to live, you didn’t mess around with the running process by intervening. And you went back and said, “Okay, what is it? What’s the root cause?” This is like, this is what the Toyota production system taught everybody. And it’s even used in hospitals now, and all sorts of places you wouldn’t expect . They say, “Hey, let’s report to the truth. Let’s not report to a desired number. Let’s report the truth.” But sales is this last bastion where, since trust is such a big deal, and since the number is held out as the result, what’s the number, right?

What gets sacrificed? Well, we sacrifice trust in order to make the number. And we do it by producing false deals. We take good customers and turn them into bad customers. And, by doing the wrong deal, we do this. Everybody does this, by the way, because everybody has constraints on the business. One of the constraints is, you have to make enough money on the business. And, if you fail to do that, it doesn’t matter how good you would have been. All prizefighters that are knocked out in the first round are equally good in the second round. That doesn’t matter how good they would have been. They’re all terrible. They win the same number of championship belts, zero.

Corey Frank (26:07):

Yeah. Zero, right.

Chris Beall (26:09):

So, you have this issue that has to be solved, but it’s very rare that the company’s issue of staying in business is actually tied tightly to individual reps needing to make the number.

Where that came from, was as a way of assessing performance within the territory that had been granted. There’s actually a way to buy the territory. That is, if I make my number this year or exceed my number, then I get the territory for next year and I get a bigger number. Why do I get a bigger number? It’s assumed it’s easier to grow a territory than it is to grow investors.

So it was actually a purchasing mechanism, where this independent business person called the sales rep, purchases the territory in addition to enough compensation for their own business to stay alive. And they do it through “performance” by making the number. So there’s an agreement that this territory is worth selling to you, if you bring this much revenue. And then, maybe, having clever schemes, some of it has to come from this product, and some from this product. And you put all these cool features in the comp plan, so to speak. But none of those features actually have to do with solving world customer problems. The assumption is: the product solves the problem and caveat emptor; buyer beware. Buyer beware doesn’t work very well in the be-to-be world, where the buyer is increasingly less expert than the seller, because products are increasingly complex and interdependent. So the buyer must truly be able to trust the seller. And when the seller corrupts out and says, “I’d rather make the number, then tell the truth,” problems happen. And they are problems, not for the seller, but problems for the business, the buying business and the selling business.

 

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In this episode, Corey and Chris continue their conversation with a high Beta Market Dominance Practitioner MaxSold CEO, Sushee Perumal. aka “the skinny kid from India,” MaxSold CEO, Sushee Perumal starting with why he felt he could successfully start an airline and his escape route when that failed. We open with Chris tying together his tapping of the bells analogy and plunging into Sushee’s story which ultimately leads to MaxSold’s growing success through a path of science, rather than simply tossing out millions of marketing dollars hoping it will work.

Chris reminds us, and Sushee agreed strongly that sometimes we have to wait before we can celebrate a win, funding, goals achieved.

—-more—-

Some of the questions Corey and Chris ask Sushee include:

What do you do to regain laser focus on business?

What does the end in mind look like?

How do you get unstuck with your team? Sushee answered, “That’s the hardest thing. The psychology of moving the people to the other side, how do we as a unit make the decision?
It’s not a force of will. Have we considered all the pros and cons of the lists?
How can we articulate all the things that go into trying to make that decision?
One big voice can overpower to convince people their way is the right way, but you still need to consider and hear from everyone to get their input. What are the unknown unknowns?”

Market Dominance Guys are Sponsored by:

ConnectAndSell. ConnectAndSell allows your sales reps to talk to more decision-makers in 90 minutes than they would in a week or more of conventional dialing. Your reps can finally be 100% focused on selling, even when working 100% from home since all of their CRM data entry and follow-up scheduling is fully automated within ConnectAndSell’s powerful platform. Your team’s effectiveness will skyrocket by using ConnectAndSell’s teleprompter capability as they’ll know exactly what to say during critical conversations. Visit, ConnectAndSell.com where conversations matter.  

Uncommon Pro – Selling a big idea to a skeptical customer, investor, or partner is one of the hardest jobs in business, so when it’s time to really Go Big, you need to use an Uncommon methodology to gain attention, frame your thoughts, and employ a sequencing that is familiar to convince others that your ideas will truly change their world. Through Uncommon Pro’s modern and innovative sales, scripting, and coaching toolset, we offer a guiding hand to ambitious Sales Leaders and their determined teams in their quest to reach market dominance. Today is the day things change. It’s time to get “uncommon” with uncommonpro.com.

The complete transcript of this episode is below:

Chris Beall (01:04):

Discover is whether you should continue to engage because the only currency we run out of all the time is time. And we get reminded of that all the time when something happens that reminds us, all we have is time, right? We’ve all had events like that in our lives. And so I just think it’s fascinating that we often think it’s about money, it’s about data, it’s about analysis, but when you come right down to it, it’s usually about being humble, believing in what you offer as potential, that you are an expert at something, you have some value, and then having conversations to find out where the fit is. I call it tapping the bells. I think that we’ve said this before, but I’ll say it again, if somebody presented you with the problem, I have a thousand bells, but only 10 of them are bells. 990 of them just look like bells.

And we’re going to put a bell up in the bell tower and it’s going to have to ring once an hour on the first hour, twice on the second hour, and by the time we get up to noon, it’s got to ring 12 times, and if it’s made of clay, it’s going to fall apart. Your job Sushee, without being able to do anything other than interact with the bells, is to figure out which ones are made of brass and which ones are made of clay. All you can do is tap the bells, right? That’s the conversation. All you can do is have the conversation and see if it resonates. If it resonates, then it’s worth moving forward and finding out if you like the other features for the thing. And I think you’ve just been exceptional at doing that through your career.

Did you do that in the airline business? It seems to me, if you would ask five people for advice about starting an airline, six of them would have told you not to do it.

Sushee Perumal (02:41):

Absolutely. And I think that’s the skill, as you said before, I tried to gather as much data as possible, and then decide if I’m going to do it anyway. Same thing with the airline, I was talked out of it by practically every single person I talked to about. And I said, you know what? I have all this data and all this information, so what’s the worst that can happen, right? So I did exactly the same thing this, as I did with that, which is maximizing the opportunity while minimizing the risk. The escape route is this, so the worst that can happen is I need to wind things down and I’ve learned a few things.

Similarly, with the use of the proceeds, we are trying to minimize risk with Rich, and the next conversation I’m going to go with him is asking him Rich, this sounds amazing, you’re clearly an expert with it. What can we do with third of the budget that’s been presented. Could we do it? Could we work on a component that you’re the most confident in so that we can execute on that, show some wins and then double down on it.

And then before we spend millions on radio and TV, let’s try to figure out the economics and the map, the science behind this. Once we get that formula, then the problem shifts to figuring out if this thing can scale. And at what point are we getting the diminishing rate of return? Get back to the question about the airline, I made sure that similar advice I got from people who are strategy consultants, I reached out to the founder of WestJet, I’ve read every airline book that’s ever been written and figured, Oh man, there is a lot of risk to it.

But being a pilot, having the accessibility, let’s start small. And I started small. I just put people into the Cessna 172, which was built in 1974, and did a viability test for flying people to the surrounding areas. This thing has legs, there was demand, and now let’s get this financed. And that’s when we entered the last 2007, 2008 financial crisis. And then I figured, this has been [inaudible 00:04:57] or put it on hold because it costs a bundle of money to finance an airline.

Corey Frank (05:03):

Does that mean you’re going to have an airline for us later?

Sushee Perumal (05:05):

Absolutely.

Corey Frank (05:06):

It sounds like it still burns inside of you to do that.

Sushee Perumal (05:10):

Oh, it does. And mostly because of the accessibility I have. I want everybody to have it. Chris, in the last podcast, talked about going from Port Townsend to British Columbia and he was looking to… do I swim there? Do I get up on a paddleboard? I’m like, Chris, I can fly you up in 20 minutes.

Corey Frank (05:34):

Yeah.

Sushee Perumal (05:34):

The local convenience and the accessibility. If the opportunity is still there, and I need to go back at doing an industry scan and all of that, but I use the plane that I have access to on a regular basis. That’s how we built MaxSold. We use a Cessna, like Chris uses ConnectAndSell. It’s like how do we shorten that time to market dominance?

Corey Frank (05:56):

That’s brilliant.

Sushee Perumal (05:57):

How do we get in front of as many people as we can to shake hands, kiss the babies, and learn and see how we can help solve their problem? And when you get face to face with somebody, when you’re actually doing a tour of these houses or places they want to sell, we make this go whole lot faster than by any other means, than putting salespeople on the ground, training them, telling them about our approaches, all of that is just making those discovery calls in-person face-to-face, is what we were able to do with the Cessna.

Corey Frank (06:33):

That’s brilliant. So when you look at MaxSold and the airline, I think for a lot of the folks who may not be that familiar with you, Sushee, they’re going to assume that you come from a very wealthy family. You have access to unlimited streams of capital. You were born with the proverbial silver spoon. I think it would be helpful to frame exactly what kind of great story this is. Let’s start at the beginning. Where did you come from and how did you end up as Auction King of North America?

Sushee Perumal (07:03):

Not quite yet. I’m a skinny kid from India. We lived in place that’s no bigger than half the size of this room with not very much at all. And strangely enough, I think that fueled a lot of my entrepreneurialism because I saw my dad go from a super tiny place with not much at all to being able to golf every day and having chauffeurs and having the luxury, so I knew that… I’ve seen the evolution. Every three to four years, we would trade up, move up, live in better places, drive better cars. And I remember going from being on a bicycle, which is a very big… I think he had a motorbike, but not a nice motorbike, to having nice cars and that didn’t happen overnight. It took many years. That’s my beginnings. Not just learning and going back to what’s the how can we do more with what we have? Because that’s all we are going to get. Nobody’s going to magically hand you a few million dollars to start a company or do things. We just have to use what we have and go at it incrementally, iteratively, and slowly build up

Corey Frank (09:20):

So you learned a lot of these traits from your father, then how did your father’s influence and the role model that he was set you forth to inspire you to do the airline, and do all the other things leading up to MaxSold?

Sushee Perumal (09:35):

Growing up and I’ve read a lot of books where the prevailing mentality is stay within your lane, live within your means, but what I’ve been brought up with is it’s not when everybody would start Mary had little lamb, I will start think big. What’s the biggest swing you can take to… the world domination, market domination has been drilled into me as a child, right? When I learned the alphabet, and it was like, think big, world domination, you can achieve anything. So that gave me an incredible amount of confidence where I was able to reach beyond my levels of intelligence, and reach beyond what I think people have as artificial walls and boundaries and ceilings around them. So I never looked at those kinds of things as limitations.

I called up the founder of WestJet, the airline, and this is a multi-million dollar publicly traded company. I called him up and figured out a way to get to him via networking and other things. And because that wasn’t a boundary or an artificial thing that I had in saying, Oh, that person is unaccessible and who am I to call him? I just said what’s the worst that can happen, right? That answer your question, Corey? Just the principles that I’ve been given and taught is to think big and do the market… And that’s why Chris and I connected so well, because world domination.

Corey Frank (11:01):

I think of one of our earlier episodes, Chris and I talked about nature versus nurture from an entrepreneur perspective, and clearly the environment that you grew up with, your parents gave you that raw material, that raw DNA to fuel. And so when a market dominance message from the likes of Chris Beall come into your world, it’s already a snug fit. It’s already a fully snug locking mechanism, if you will. From your perspective on market dominance, knowing that Sushee is a fully high beta market dominance practitioner now. When you see you’re a dealer in math, you’re a dealer in exponents. So what do you see is the path that Sushee has as he’s on this market dominance? What can he expect from continue to adhere to these principles, so to speak, just from a theoretical laboratory perspective, as an early practitioner here as he’s dominated some of the markets that he’s entered?

Chris Beall (11:58):

The first thing you can expect is that the parasites are going to try to come in because he’s raised money. The number one risk hidden in every market dominance play is its attractiveness to parasites. So if I were to give Sushee one piece of advice, it’s, you’re the immune system, keep the parasites out. And you know exactly what I mean, right? They come cloaked in talent, in pedigree, and in a huge amount of self-interest. You can tell a parasite when they say they’re a team player. That’s a guarantee in an interview. If somebody says they’re a team player, they’re guaranteed to be a parasite. That’s really very safe. That’s the spiky proteins on the outside of the virus that tell you, it’s bad. Don’t take that one in. Don’t breathe that in, that one’s going to kill you, right? So that’d be number one.

Number two is, and I think Sushee already knows this, but it’s really interesting. Look at cycle times before you look at throughput for anything that you’re experimenting on. Dominance comes in general, from driving denominators down rather than driving numerators up. Whatever cycle time you have now for some key activity, for whatever the bottleneck activity is, it’s customer acquisition would be an example. You want to figure out how to get the cycle time down and paying attention to throughput. How many of them I can make per unit time is a secondary thing. Get to throughput after you have dominated cycle time and you really understand the cycle time issues around the bottleneck. There’s only three things we can control in business other than our attitude and the company’s attitude is generally controlled by the leader’s attitude and the absence of parasites. The leader’s attitude gives you everything you need as long as the parasites don’t come in and suck the life out of it.

So leader’s attitude, no problem for Sushee. But Sushee has a really complex situation because he’s got to do regional execution. It’s an on-the-ground business. I’ve run one of these. I know what it feels like. I’d call it inherently heavy in a funny way. That is, even if the individual operating units are light, the nature of the business is that it’s heavy because it has to be anchored in some place. There are cycle time issues around everything in that place, and there’s cost issues that come with it. He figured out how to drive cycle time down in terms of using that Cessna, right? That’s the thing you keep playing. The denominator is your enemy. Drive it to zero and you can get to infinity.

That’s what the math says in business. The numerator actually takes care of itself. The numerator’s where you get more of something. You get network effects, you get market dominance effects through referenceability, you get scale effects. All those effects show up in the numerator, but dominance shows up by driving the denominator down. You’d get a lot more bang for your expended effort. And so cycle time may be on acquiring a customer, or a cycle time on setting up a new regional unit. Those things are going to be really key. If you can really stay focused on that, because every piece of advice you’re going to get as a market dominance practitioner is going to be what I’ll call it, numerator advice. Go get more of this, go plan for more of that, go to the channel because the channel is bigger than you are. Just all manner of things, because everybody is used to grinding on the numerator.

That’s why, by the way, if you don’t understand this, those little-

Sushee Perumal (15:33):

Billboards.

Chris Beall (15:35):

Yeah, exactly. It’s really an interesting problem because our minds go to what we can see, and we can see growth in the numerator, and the denominator is invisible. We don’t really see cycle times, but we only have cycle times, throughput and quality. That’s all we got. So once you figure out the quality equation, which you have to figure out first. It’s like what’s above threshold quality, and then stop thinking about quality immediately other than maintaining it. The next equation is how do I drive down cycle time on the core duty cycle of this business? Whatever it is that if I could wave a magic wand and have more of it, instead of seeking more of it, let’s make the thing that makes it go faster. That would be it. Other than that, keep your experiments small, because big experiments yield confusing results.

It’s not that they’re expensive, which is a problem, it’s that they’re confusing. We had this just happen the other day here, where we’re doing an experiment around cleansing data, or calling in advance to make sure that you only have to call on the good stuff, right? And we conflated that experiment with three other variables, and somebody wanted to see if they could get this particular business value out of it internally, and blah, blah, blah. And next thing you know, we got bad science, right? So keep your science clean. And that means small experiments, because small experiments give clean results, so at least they have a shot. That’s it. That’s all I can tell you, Sushee, you got everything.

Sushee Perumal (17:00):

Well said. I’m going to replay this several times to my team when the podcast comes out.

Corey Frank (17:07):

It does bring up the next tangent we can finish here with is, the business as you’ve taken it over, and as you… we’ve talked about culture a little bit offline last week, and things that you’re trying to do, certainly on the capital raise, things that you’ve been successful at, when you feel overwhelmed, or maybe a tad bit unfocused on all the different parameters or variables or inputs in the business? What does someone like Sushee do to level set and regain that laser focus on the business?

Sushee Perumal (17:43):

I look at it from a goals perspective. What is it that we are trying to achieve? What does the end in mind look like, and I just work backwards. Whether it’s a way to market dominance, whether it’s making a decision on where we’re going to set up a call center, any of those things. And if it’s overwhelming, I try not to introduce too much more information. I just look at what is the end state look like? How do we go at it with that end in mind, and then work backwards to figure out what are the pros and cons. What are we missing from the decision that needs to get made?

Chris Beall (18:16):

That’s interesting. That’s the essence of strategy, right? We’ve talked about strategy on Market Dominance Guys before. Strategy is always a list of steps, and it’s essentially a plan to get to a goal. And the plan is not the tactics, the tactics are how you execute the steps. It’s actually the intermediate steps, I call them resting places. If I get here, then I can see how… If I were there, I could get over there. And if I were there, I could get over there. I compare it to crossing a river. I used to spend a lot of time with a backpack on my back in the big mountains without any support, other than another guy and my legs and what was in the backpack, right? And you think the mountains would be the big obstacles, but it’s not the case. It’s the rivers that are the big obstacles.

And when you come to a river, it’s always unique. I’m talking about places where there are no bridges, right? No bridges at all. No human beings live there, and nobody’s ever built a rope bridge. And so your biggest obstacle is always figuring out how to cross a river, because swimming with the backpack is a bitch, I can tell you. And talk about risk, there’s downside and there’s no upside. You aren’t coming back if you ever go face down in the water with 90 pounds on your back. And the big strategy question was, Okay, is there a series of rocks? Even if three out of the first five steps come back toward the current shore, as long as the ultimate path across the rocks leads to the other side, I don’t need to get closer to the other shore with each step.

I need to get to a place I can stand from where I can go to another place I can stand that ultimately leads to the other shore. And I think you’re describing that process of saying, my goal is the other shore now. But the easy thing is jump, right? Evel Knievel it. But generally, that’s not… If it were that easy, somebody else has already done it. Who cares, right? But you’ve got to figure out a path. I had a question for you about this. When you’re trying to do that, how do you get stuck? And by stuck, I mean in my classic model, right? The one some people heard before, which is you’re either inflow stuck or you’re waiting. So when you’re figuring out strategy, you’re stuck because you don’t know the path. So now you think you’ve got part of the path, but now you’re stuck. What do you do with your team to get unstuck when you don’t know what to do next?

Sushee Perumal (20:39):

And that’s probably the hardest thing that I’m often facing, which is the psychology of moving the people to the other side, or the psychology in trying to figure out how do we, as a unit, as a team, make that decision so that it’s not a force of will, it’s not somebody’s opinion dominating. It’s have we considered all the pros and cons and the risks so that we are not going face down into the water with a 90 pound backpack on our back? How can we articulate all the things that go into trying to make that decision? Well we’ve all been there. There could be somebody in the team that has a big voice that they’re trying to influence everybody that their way is the only way. But as a leader, as a facilitator, I see my role as making sure that every opinion is considered, and I would probably run it by you, Chris, or by somebody saying, here’s why we are stuck. Here are the pros and cons, all the inputs we have, what are we missing from this picture? What have we not considered? What are the unknown unknowns, because that’s often what gets us, doesn’t it? Looking at the unknown unknowns. So the team and the psychology or… That’s really the hardest component is to make sure that’s all well articulated.

Chris Beall (21:58):

So there’s something brilliant hiding in there that I just got to get this out. Sorry to jump on it, but I just wanted to say this to all you entrepreneurs out there who are crazy enough to raise money. To open the poison closet and pull out a bottle of poison and say, I’m going to survive it. I have built up a resistance to iocaine powder. That’s pretty good for you, Corey, especially. Never go up against a Sicilian when death is on the line.

Corey Frank (22:27):

Absolutely.

Chris Beall (22:30):

Here’s something that I think is a fact. Most entrepreneurs see this as exactly the opposite. The moment that money hits your bank account and you’ve closed that financing, I guarantee which state you’re in. You’re stuck. That’s just a fact of the world. There is no way it could be anything else, because you’re no longer waiting. As you’re getting toward a close of any deal of any financing.

There’s always a period where you’re waiting. That is, it’s all done, but it’s not done, right? That’s why we have all this, it isn’t over until it’s over kind of talk because it reminds us that sometimes we just have to wait before we start celebrating. Celebrating is not anything other than just preparing for the next thing. We’re saying that’s behind us, that something’s in front of us, but I guarantee you, we’re not in flow. We can’t be in flow because being in flow means that I’m doing what I was doing before, and I’m continuing to do it in a way that’s effortless because I practiced it and it’s me now, right? But it’s you, that’s a previous you. Now you’re the funded you and therefore, you’re stuck. And I think that most entrepreneurs just don’t get that.

They go, I’ve got the money. I put a plan in front of the investors. I must know what to do, let’s go execute that plan, which is the single stupidest thing you can do when you take money, is to immediately execute the plan on which you raised the money.

Corey Frank (23:59):

Or I must be a lot smarter than I thought I really was, and everybody else saw through my ruse. Now, what do I do, right? The money is a validation for my clear intelligence.

Chris Beall (24:11):

I’m so impressed by Sushee, because you anticipated being stuck, and you started calling around. You put up a website, so it’d be easier to talk to people, have the right people talk to you. You reached out to a number of us, and you started really anticipating being stuck as soon as you were waiting, which is the smartest thing in the world to do is as soon as you’re waiting, and you know you’re going to be stuck, switch to learning mode, because the waiting is a waste, unless you do something else.

And the thing you should do is the thing that helps with the next thing. The next thing is guaranteed stuck. Stuck means I’ve got to learn. So you’ve just switched on learning, knowing you were going to be stuck, so why not just act like you’re stuck? And I thought that was… I just had to bring it up, because I’ve never seen it before that in anticipation of a raise, you freaked out appropriately.

Sushee Perumal (25:04):

We had a number of proposals lined up so that we can hit those buttons and execute on those micro-experiments. As soon as the cash hits the bank.

Chris Beall (25:16):

That’s pretty smart. When the cash hit the bank, you weren’t stuck because you’d actually treated yourself as stuck earlier. That’s just so unusual. I highly recommend that to anybody foolish enough to raise money.

Corey Frank (25:27):

I have a feeling that Sushee at this episode, your Sushee Perumal website, you’re going to be hit with a lot of folks who are going to be hitting you up for mentoring advice I think, because you have so much to teach us all.

Sushee Perumal (25:40):

It was really set up so that I can learn from folks like you, Corey, and Chris, and Oren, who I can hopefully get introduction to, so that I can continue to get all the way up to Richard Branson.

Chris Beall (25:53):

There’s guy who knows when he’s stuck.

 

Podcast: Play in new window | Download

Chris and Corey’s guest, Sushee Perumal, CEO of MaxSold tell us to take cautious steps when the tank is full of funding. Some of the highlights in this episode include:

Driving the concept of MaxSold’s tagline, “From the sponge under the sink to the Ferrari in the driveway, we sell everything in two weeks.” concept is the fact that live auctions were not and are not meeting the market needs. Sushee is the perfect example of Market Dominance, as well as a very likable person to know and work with. Hear this first of a two-part interview about the shortest path to market dominance.

From owning an airline because he wanted to cut his teeth in entrepreneurship, to dominating the market in relocation and downsizing services. Chris noted, “This is the end of the commute economy.” This is because the relocation option we have completely turned this upside down in the recent months of COVID-19 – work from home forever.

Sushee explains how he chose to maximize the opportunity by minimizing the risk. Just because you have magic technology, doesn’t mean you can execute new business.

Chris asked him, “Does this assessment process take 10 years before you put gas in the tank?” You’ll have to listen to the surprising answer. How did he make the transition? He learned that you don’t dominate by hiring a bunch of C-Suite staff. He also learned from his failed and struggling competition that you don’t throw expensive parties as part of your ROI plan.

Be incremental. Be resourceful. Ask for advice – humbly. It helps that he embodies the value of being humble and likable.

—-more—-

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The complete transcript of this episode is below:

Corey Frank (00:37):

Excellent. Welcome to another episode of the Market Dominance Guys with Chris Beall, and Corey Frank. So today I’ve put on a jacket, Chris combed his hair, and we actually have a guest that is worthy of the Market Dominance Guys to pretty up. And it’s said that the things you own often end up eventually owning you. And I think if that’s the case, Chris, then certainly our next guest has found the unlock key, if you will, to setting free your world again.

MaxSold. We have Sushee Perumal from MaxSold, CEO and Founder. MaxSold is one of North America’s largest and fastest growing relocation, and downsizing simplification firms, auction houses. And simply put, if you got transferred to Omaha, and Sushee is going to tell us a little bit about this, you get transferred to Omaha, God forbid, and had just inherited a great uncle’s estate in Vermont, or you simply want to declutter or to simplify your life, MaxSold is the answer. All you have to do is engage with them and they’ll do all the work, and they send you a check. And so the CEO of MaxSold, Sushee Perumal, is with us today and his story, I think what Sushee and I have talked about, his story is up to this point, one that’s probably worthy of at least a Joe Rogan roll cast, Joe Rogan podcast, I should say. But since we can’t do that, he’s going to have to settle for a couple of broken down sales guys like us. So welcome to the Market Dominance Guys, Sushee. It’s a pleasure to have you.

Sushee Perumal (02:03):

Great. Thank you, Corey. It’s a pleasure to be on the show. And I’m a big, big fan, and probably put in about a hundred miles listening to your podcast, and often I’m hitting replay, I’m doing that 15 minute rewind so that I can re-listen to what you and Chris say, because I just wish I was running with my notepad so that I can take notes.

Corey Frank (02:23):

It would look funny though.

Sushee Perumal (02:25):

The follow up date, the founder is it’s a second generation auctioneer and he lives eats breeds auctions, but the live auctions are not meeting the market needs. He came up with this concept as, “Hey, we have the things call the internet. Why don’t we leverage that to be a replacement for live auctions?” And so that’s when I entered the picture and I transferred the phone number from my airline onto MaxSold and created a website, got the team going. And now we are just under 500 people on the ground to do the cataloging, photography and all of that. And I think Chris gave me this line, “From the sponge under the sink to the Ferrari of the driveway, we sell everything in two weeks.” So being able to come in and vaporize everything, it’s a huge burden off of their shoulders. For those that we serve. Thank you for inviting me for the show. Happy to be here and looking forward to learning a lot.

Corey Frank (03:24):

Well, that’s great, I think-

Chris Beall (03:25):

Fantastic. It’s great to have you here. You’re the only guest we’ve ever had? We don’t have very many guests, but you’re the only one who’s ever been able to say, “I transferred the phone number from my airline.” I take it that doesn’t mean the phone number you were using to call Air Canada, but that you actually had an airline. Is that true?

Sushee Perumal (03:42):

Correct. Yeah. So I decided to cut my teeth in entrepreneurship by starting an airline.

Chris Beall (03:48):

Why not?

Sushee Perumal (03:49):

Said, “Why not? Let’s give this a shot.” And the reason is I was trying to combine my passion for flying and the accessibility it gave me saying, “Hey, more people should have access to this.” And I said, well, that was a time when the very light jets were coming out. Companies like Eclipse and Cessna was getting into this, Embraer was getting into this. So they’ve been creating planes that cost a fraction of your Gulf stream jets at a far better accessibility in terms of operating costs. So figured why not start a charter service with this? Charter airline service with this? This was my attempt at failing big and I succeeded at it.

Chris Beall (04:30):

That’s a beautiful thing. Well, now you have a service that I think is suddenly even more important than it was before. Obviously crucially important for life changes, right? When somebody is retiring, when they’re downsizing, when somebody passed away, when somebody has been transferred, all of those things were your bread and butter before, but now we have this sudden thing that’s happened. And I don’t think everybody’s recognized it. I published something on LinkedIn the other day that said, “This is the end of the commute economy and between the savings on commuting and the productivity increase already being measured from work from home 47% productivity increase for people who are knowledge workers. We should see instantly actually already flowing about seven and a half trillion dollars a year into the US economy.” Which is significantly bigger than the federal budget. It’s almost as big as the entire debt of all us companies, right?

It’s enough in one year to wipe out all the debt for US companies. Here we have this phenomenon that is occurring. And one of the side effects that I’ve noticed and I’m actually participating in is relocation to where it’s desirable to live before retirement. Think of this as acting retired from a place perspective, 10, 20, 30 years before you retired, because you can now work from home and work from home forever. So suddenly the Ferrari in the driveway you thought was so important for your commute might be replaced with the four-wheel drive that is a great thing to have when you move to the mountains. Or in my case, my fiance and I are moving to Port Townsend, two plus hours away from her office. My office has always been an in house, but she works for Microsoft. They’ve worked from office company. Suddenly it’s all choice, choice forever.

So people are suddenly moving and you just took down, my understanding is some funding ignoring my advice, of course, because If a guy spends a lot of time with me, learns to ignore my advice. It’s actually its a skill that they acquire. Oh, not in going back 15 minutes to listen again and say, “What the hell was that guy saying?” So those are two really important skills you’ve picked up, but you’ve ignored my advice, you’ve taken money, but now you’re suddenly armed with some cash going into what I call a high beta situation, where there was a lot of volatility. I’m not talking about market volatility in the financial markets, I’m talking about energy in the system. Think of it as lots of entropy. It takes a lot of information to describe what’s going on now, which creates entrepreneurial opportunities because the big companies can’t move were moving is required to be fast and small. And so you can do anything you want now. So now you can do anything you want better than an airline. So what are you going to do with that money to dominate?

Sushee Perumal (07:18):

Right. I spent a lot of time thinking about it while listening to you and Corey, Chris, as well as while reading books and other things. It’s simply like, how do we maximize the opportunity at the same time minimizing the risk because there’s few States are entering into the second wave, with the lockdowns are being lifted. And luckily we have a 10-year foundation of bootstrapping the business, finding out how we can create elasticity in the operations and the execution. So we can go from zero to a 100 or from a 100 back to 20, depending on this evolving situation we are in. So we want to make sure that continues. We all of a sudden don’t want to blow millions of dollars on a TV and radio campaign, because if we are not able to execute on it, then we would have blown a bunch of money-

Sushee Perumal (09:11):

… oh as I was saying, what’s the best way to maximize the opportunity to minimize the risk? By taking really cautious steps, but the tank now being full and having the luxury of having that.

Chris Beall (09:21):

Interesting. So let’s talk about risk first. People who raise money in Silicon Valley, they don’t really talk about risk. The risk to the business is the risk you can’t raise more money. And that has to do with making what’s called progress, which is kind of a euphemism for doing whatever the VCs at that moment think is pretty cool. Nowadays, it’s gotten different, everybody’s talking capital efficiency and unit economics. So that’s how we control risk generally as by being efficient with our capital and managing the unit economics. But it sounds like you intend to do all of that while taking advantage of a market opportunity and dominating and doing it with the dominance, not being I’ll call it, store bought. That is you’re not going to buy the revenue, you’re going to go earn the revenue somehow, but you’re going to judiciously use this money in order to lubricate that process somehow, is that kind of how to look at it?

Sushee Perumal (10:12):

It is. Oh yeah, absolutely, Chris. Like I would say looking at the shortest path to market dominance, we want to… I like how you said it earlier in other podcasts about looking at your market as lists. We are constructing a playbook with all these lists that we can execute on and seeing how do we maximize the opportunity and minimize the risk? Because if we start executing on the lists, if we can’t deliver on the product, then we would have blown a bunch of money. So we are trying to figure out how to manage that cautiously.

Chris Beall (10:42):

Interesting. What does this spring to mind for you, Corey? Do you think that the amount of time that Sushee and company have spent really figuring this thing out 10 years, is that necessary? Or can you figure out one of these things in 10 hours? I mean, it’s taken us more than 10 years. We’ve been at this 14 years, I figure tomorrow afternoon, I’m going to figure out ConnectAndSell. That’s my fantasy, because on Saturday, every once in a while, I think, “Oh I got it.” Right? But it seems to be a much more incremental and iterative process than that often with what can only be described as a little backsliding here and there, where your brilliant idea becomes something that was so… Our example is we started a thing called Outbound on Demand and it was just going to do outsourced appointment setting. And it was so easy to sell if we didn’t recognize that just because you have magic technology doesn’t mean you can execute a new business, right?

So we were very poor execution player in a crowded market that was oddly easy to sell because everybody will try a new outsourced appointment center. It’s the nature of that business. It’s a chocolate chip cookie business. If you come out with some cookies, everybody’s going to try a cookie. And the question is, are they going to buy a hundred million cookies? And the answer turned out to be, I don’t know, we didn’t stay around to find out. We retreated. We back slid, so to speak into our core. So Corey, you’ve seen tons of this. And Sushee, you must have done some of this. So let’s start with you, Corey. Do you really think it takes 10 years to figure out or some amount of time to grind it up and figure out the execution side before you should put gas in the tank and hit the accelerator?

Corey Frank (12:14):

It’s funny, Chris. Ryan Reser and I had a conversation about this just the other day, about how seemingly sophisticated organizations that at its surface, you would think have all the math of sales already instituted. They must have the math of sales because they’re excise and they’ve raised Y amount of dollars and they have Z amount of team members and reach. And then in talking with this particular prospect, who’s thinking about coming on Uncommon Pro, you realize that a lot of it has just been, I don’t want to say luck, but it’s certainly hard work and grit, but they didn’t understand the why of what got them there. And because you don’t understand the why or the metrics of what got you there. I think you’re kind of just a ship without a rudder, just drifting from port to port, hoping the certain winds will take into a porter prosperity.

And when that happens, just because of riding the trade winds, I think once or twice, I think a lot of us, and I’ve certainly been there. You start to believe that you’re actually better than you are, but you’re not able to define the process or the science of it. Certainly what I’m curious from you, Sushee is when you looked at this business that was 10 years old and took, took it over and you infuse it with capital and culture. As we talked about the other day, what science, what process did you use as you have all the risk pieces on the board, so to speak, and you say, we going to deploy X amount of armies here into this market and X amount of armies to do this market. Chris and I threw a little bit of that thought process of how do you start? Because there’s tons of auction houses out there and you guys have seem to really find a niche.

Sushee Perumal (13:53):

Absolutely. And there are other auction houses that entered the space tens and millions of dollars of VC cash. And so studying them, we figured out what not to do, which is hire a bunch of CMOs, CROs, VP of sales, going to every market with five or six sales reps that are from high-end auction houses and high-end real estate companies. We also figured out from studying the competition, not to throw $30,000 parties with the hopes of getting a return on investment. It’s very much been an incremental and iterative process to figure out the science and the mechanics of things. So we, as an example, with buyer acquisition, we figured out what the cost per acquisition is, how long it takes to get to an ROI, what channels do they come from? And also the scale up limits, but several channels. So it’s the same sort of path we are on in this next phase is to figure out whether we can increase those limits, whether that math scales.

So if its acquisition through search engine marketing, there’s only so many people searching to try to figure out how are they going to solve the problem of having a house full of things to sell. So once you’re maxed out on search engine marketing, then what do you do, right? Then let’s go to channel two and figure out here are the scale-up limits. And here’s what the payback period looks like. And then we go to channel three, which is outbound. And that’s how I bumped into Chris. When the problem that we are trying to solve is, “Gosh, it takes so much time to call real estate agents. We have 20,000 real estate agents in a city calling them is going to take years or decades. So how do we short circuit figuring out whether or not this channel is going to work and the science of that particular acquisition channel?”

So that’s what led me to ConnectAndSell, so that we can get the math of sales figured out in really short order. And we figured it out. We figured it out within a week, whether or not this particular channel was going to be a factor or not, which is real estate, realtor outreach.

Chris Beall (13:53):

Within a week.

Corey Frank (16:09):

Within a week?

Chris Beall (16:09):

And we figured out. Oh, I’m a hundred percent. Like I was floored that we could figure out this, something that would take us months, if not years, we were able to compress that timeline. So the channels that are working, that we have the math and science behind it, but there are scale-up limits to those. So we need to tackle other channels and we can’t run out of gas or we can’t organically fund tackling other channels, which is why we took on this raise. We did this fundraise so that we can go at market dominance faster, so that doesn’t take us another 10 years to figure out. So that we can first two things. One, scale up the things that are working and second tackle other channels so that we can scale those up as well. So instead of only being able to afford 10 or 20 grand on radio advertising, I can all of a sudden afford more. And if it works, I can put fuel to that fire.

Rich Kagan will be a happy guy if that works out, huh? I’m going to be watching this carefully because I’ve been talking to Rich and we’re in a similar situation without the raise. We’re actually doing a little raise right now. Maybe by the time this goes to air, we will have raised, maybe not. Who knows? I think our story is always a little bit tricky because we’re so unusual, but this is another thing that I think is fascinating is that it’s just sharing information with other entrepreneurs around what’s worked. Like you and I spoke about something the other day that it just turns out I have a weird part of my past involving a floor finishing company that I created. It’s kind of like an airline. If you think about it right? And a national skill floor finishing company, trying to fix all the floors in every hospital in America.

So it’s a little more prosaic. I think jets are cooler when you think about it, but yeah, floors they’re all right. But we had a little kind of a legal structure and a financing structure that is very, very unusual. And I don’t know if you’re going to use it or not, but it’s something we could share just by talking. And I think something that folks should keep in mind when they’re going aftermarket dominance is while this might be your first rodeo in a particular channel or a particular market dominance challenge, it’s probably not everybody’s, but without conversations, we can’t really discover, like there’s no catalog, there’s no ontology of market dominance stuff, right?

I mean, we have a trick, “talk to lots of people.” And we know how to apply that trick, like magic acid to dissolve a raft of problems, but not all problems. And so I think one of the things I think you do exceptionally well, maybe better than anybody I’ve ever met is you are very humble and open about reaching out to other people and getting advice. You just make it abundantly clear to all of us that it’s a good idea for us to help you. And I think that’s a remarkable skill. Where did you learn that? That’s really uncommon among entrepreneurs. They tend to lone wolf that a little bit.

Sushee Perumal (19:00):

That’s a great question. Well, I think maybe being a business analyst as my first job out of engineering. So I went into this Telekom, The Bell and I was asked to tackle as people assumed I was more intelligent than I am. Right? So they gave me all these responsibilities. I’m like, “Holy cow, how am I supposed to get this done?” So I just ended up picking people’s brain. Now I’m like, “Can you help me with this? Can you teach me how this works? Can we figure this out? Can you show me the lay of the land?” And I remember my leader telling me that the one time I thought everybody does this. And apparently they’re surprised they’re doing this, which is, I reached out to a vendor they’d given a system to test, but there was no support at all.

So long story short, I reached out through this really weird way of great to the engineering team that had built that product. And even Dave was surprised like, “How did you get my number? Like how did he get my contact info?” So I’m like, “Well, this is what I’m trying to achieve. So can you help me with this?” So I think it’s just being resourceful, being frugal, trying to figure things out. And I thought everybody had the same skill set, but I’m just starting to figure out not everybody does. Not everybody goes to people for advice and tries to get this whole thing figured out.

Chris Beall (20:16):

Remarkable. Corey has it also. You guys are both just super exceptional at being humble. And every once in a while, I’ve worked with Corey where he thought he knew. And it seems to have been disabused of that notion over time. But you both have this incredible ability I think, to actually just humbly ask somebody for advice and not just do it, kind of like a, “what do you think?” Like they do it in a way that challenges them and makes them want to go deep with you and see what you’re really asking. And I think is an under understood, under-taught part of the market dominance equation. We’ve never really talked about it, Corey, that we’ve kind of talked about it, like go ask the market through tons of conversations. Right?

Corey Frank (20:58):

Sure.

Chris Beall (20:59):

But that’s one thing to do, but you could actually use the same conversation first approach to go ask for advice. And I think that you guys are really masters of that.

Sushee Perumal (21:09):

Yeah. And one of the podcasts, you talk about salespeople having this confirmation bias that’s overwhelming. And the only reason you would be curious is about the timeline and the budget. They don’t go into a discovery call genuinely wanting to understand and learn. So, that resonated with me. And I think that’s the approach I’m taking is, “Let’s figure this out. How can you help me with this?” And that’s from your… You talk about knocking on doors as a full of brush salesman. And that’s what you were asking. Right? You were doing discovery calls.

Chris Beall (21:41):

Yeah. It’s an interesting question. I mean, I told salespeople all the time in sales and I think sales as semi-interesting market dominance is very interesting and sales has a role and market dominance. But I tell them all the time that you need to believe, but you must not sell. And what you need to believe is that what you have is of potential value and that you don’t know how that might work out for this individual. If you believe those two things, then you open up a path to have conversation about what their situation might be. And you can discover for real, whether you should continue to engage, which is the only thing worth discovering is whether you should continue to engage. Because the only currency we run out of all the time is time. And we get reminded of that all the time when something happens that reminds us, all we have is time, right?

I mean, we’ve all had events like that in our lives. And so I just think it’s fascinating that we often think it’s about money, it’s about data, it’s about analysis. But when you come right down to it, it’s usually about being humble, believing in what you offer as potential that you are an expert at something, you know, you have some value and then having conversations to find out where the fit is. I call it tapping the bells. I think that we’ve said this before, but I’ll say it again. If somebody presented you with the problem, “I have a thousand bells, but only 10 of them are bells. 990 of them just look like bells. And we’re going to put a bell up in the bell tower and it’s going to have to ring once an hour on the first hour or twice on the second hour.

And by the time we get up to noon, it’s got to ring 12 times.” And if it’s made of clay, it’s going to fall apart. Your job Sushee, without being able to do anything other than interact with the bells is to figure out which ones are made of brass and which ones are made of clay. All you can do is tap the bells, right? That’s the conversation. All you can do is have the conversation and see if it resonates. And if it resonates, then it’s worth moving forward and finding out if you like the other features for the thing. And I think you just have been exceptional at doing that through your career.

 

 

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In this episode Corey asks Chris, “The other leaders that you’ve observed from being an investor or executive or being you know board member CEO, do you want to surround the issue and debate for the sake of maximizing all the different off-ramps that you could take or is it genuinely from a science level scientific level that you have your flag?”

This leads to Chris talking about the three stages of your business or career, he says, “I’d like to think of myself as the guy who insists that we go science first. And if you’re going to go science first. That means you have to be ready to do experiments and experiments are very well understood. We know how to do experiments been doing a lot of science for a long time. That means you’ve got to be math first because doing experiments that don’t have a shot mathematically is ridiculous and you shouldn’t do that.

—-more—-

So you got to keep the number of experiments down to a minimum and cram them in a small amount of time for a small amount of cost. I’m not a fan of internal debate for a long period of time. I think you debate just long enough to determine one of three states. And I think we should all consider this as a way to run our lives. Not that I’m here to tell people how to run their lives, but what the heck. So we’re in one of three states. I think this is sort of mathematical truth or truth of life state number one is we’re in flow. And when we’re in flow, we should stay in flow.

That’s, that’s just a great policy when it’s working. To start to invent new thoughts or new strategies or new ways of holding the racquet in tennis, you need to adjust, you go change your shoes so you can play better. You’re in flow, and you stay in flow.

What would be the point of developing great skills and I’m not continuing to use them.
When the road keeps paving itself in front of you, all you have to do is stay on the path.

Don’t fall, don’t talk about it. Don’t think about it, just go do it and keep your eyes open, but go ahead and crash into something that’s okay. That takes us to the second state we’re in often. That is a state that I call stuck. I love the word stuck because it actually colloquially means what the state means which is, ‘I’m stuck.’ I actually can’t move forward, but it’s not normally because I’ve lost my motive power. It’s not like my legs fell off. It’s because I don’t know which way to go. And when we’re stuck. We can do something and it’s really clean and organizations have a hard time doing and individuals have a hard time doing it but organizations have a harder time because we have to admit, we’re stuck and stuck is synonymous with. We don’t know. We don’t know what to do. And if there’s anything that I would advise young entrepreneurs. to get comfortable with, it’s the fact that often you don’t know what to do and a thing to do. That’s incredibly effective when we’re stuck is to say we’re stuck.”

Listen to this episode to learn how to embrace stuck and then what the third state is all about.

ConnectAndSell. ConnectAndSell allows your sales reps to talk to more decision-makers in 90 minutes than they would in a week or more of conventional dialing. Your reps can finally be 100% focused on selling, even when working 100% from home since all of their CRM data entry and follow-up scheduling is fully automated within ConnectAndSell’s powerful platform. Your team’s effectiveness will skyrocket by using ConnectAndSell’s teleprompter capability as they’ll know exactly what to say during critical conversations. Visit, ConnectAndSell.com where conversations matter.  

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The complete transcript of this episode is below:

 

Corey Frank (00:32):

Or imagine a dog sled, how many dogs would have to pull sideways to ruin a dog sled. It’s only one. You got to lead dog and you got a second dog. If the second dog pull sideways, you are toast. You don’t have a chance because there’s a lot of leverage up there from a parasite anywhere near the top is tough, so keep those out. And then take in folks who have a proven track record of talking sense into other people. You don’t want to know their answers. You want to get access to their impression and their negative wisdom and positive wisdom, but you want the negative wisdom first. You certainly want them to say something too. It’s like, it seems to me, somebody who says “it seems to me” is probably a pretty good bet. Somebody who says, “I think you should” probably a pretty bad bet.

It seems to me that the way that you’re anticipating deploying capital, you’re going to run out well before you achieve dominance. So what do you think is the right thing to do at that point? And you’re going to answer them. “Well, I’ll go raise more money”. Okay, so what’s that going to look like? What’s that going to feel like? So saying it takes twice as long to get there as you usually would, as you plant. Right? So now it’s a two X time and now you’re raising money. So some folks are tired and it’s not. What’s that like? “Oh man, that is not so great”. So you kind of have to work your way into, well, what might we do differently today? And it’s almost always in the model and there’s only kind of three things to do, right? One is to reduce my burn, my overhead.

Another is to accelerate my acquisition of new customers that are going to bring value over time. And the third is make my product fit the situation better so that it provides more value or is easier to buy, or one of those various things, like three dimensions to the whole problem. The fourth one, which is just add money, is almost never a right answer, almost never.

Chris Beall(02:26):

But yet you see that in so many companies that are struggling or stagnant stalled, they may have a negative burn rate and their answer isn’t necessarily to focus on product market fit, or certainly they’ve nibbled, maybe some costs here and there, but it’s usually focused on, we need to raise more money. Otherwise, we got to pop smoke and get a chapter to lift us out of here.

Corey Frank (02:48):

Right? Well, folks, I think there’s a kind of person, kind of entrepreneur, but they’re really working for VC Inc.

And that’s what the audit do. Okay, figure out how to raise some money. Some sort of a bridge somewhere and somewhere might be a salvage and I might be a lucky hit, but at least then they go on and get another job with another VC company. And that’s perfectly fine. It’s the career choice. There’s nothing wrong with it. It’s like working for a big company is just different. It’s working for a series of small companies and occasionally you get a win and it’s lots of fun. You get to have small teams and all that smallness is great. It’s not quite the same as being an entrepreneur who is trying to build something and it’s strapped to the bumper and driving in traffic, that’s a different thing entirely. And in that case, you’ve got to look at those three dimensions. And if it does turn out, you need to raise money, then raise money.

It’s much better to raise money, to take advantage of an unexpected opportunity than to cover up an unexpected hole in your finances. A case like this right now, we have this horrible thing going on in the world at this month. We’re recording this in the time of COVID and lots of things are different. So is it a great opportunity or not for any given company? So actually the first question you should ask about any change is not what’s this going to do to me, but does this present a great opportunity and an unprecedented opportunity for us? Because if you don’t ask that first, you’ll never get around to it because everything offers lots of problems. So once you start talking about the problems, you just talk about the problems forever, right? The answer to that question tells you, “Well, what should my stance be? What should we be looking for?”.

If it’s possibly a great opportunity situation, how can we explore that inexpensively and quickly? How can we find out if it’s a great opportunity? So for our company, for instance, it connects and sell. This whole COVID-19 thing is probably a great opportunity. Why? Well, because hundreds of thousands of salespeople got sent home and their managers can’t tell what they’re doing. And people have crazy ideas, like security cameras to spy on people and click trackers and all this nonsense, right? Which everybody thinks for 10 seconds, notice is never going to fly. You can’t compete for talent and say, “And by the way, the number one thing we do is spy on you”. That’s not really going to work, right? Because some competitor will say, “No, we’ll trust you”. It’s like, I’m working for that guy. You missed your spike.

Right? But it is important to see what folks are doing or you can’t help them. So when there’s change though, big change and business is all about adaptation and change. What we need to do first is ask, “Is this a big opportunity?” and if so, “How do we characterize it quickly?” and then ask the question, “Does it advise us to get some capital together in order to take advantage of that opportunity?”. That’s a great reason to raise a little bit of money. Maybe even a lot. You never know, maybe something. And so the changes I tend to create my problems by addressing are the ones that are, I call them, kind of model level at some people might call them paradigmatic. It’s such a loop that even seems like we got the model wrong here. Nobody ever wants to hear that kind of crap. Right?

I mean, really, who wants to even think about that. But every once in a while you do have a model wrong. They’re a hundred percent fatal when you get the model wrong, which is why I’m kind of risk-averse. So oddly enough, you know what I used to do for fun, right? I used to climb mountains and stuff like that. And I still do certain things that people would think are not zero risk. Risk-averse, people can do those things. That’s how you get to the age of 65 and you’re still alive if you do stuff like that, you better be fundamentally risk-averse, which means oddly, you need to be open-minded to the possibility that what you’re doing is wrong, because that’s where the big risks hide and continuing down a path that goes off Niagara falls.

And you just thought it was a rock concert that you were going to, right? Well, it was the rocks were at the bottom of the falls and you will be in concert with them rather correctly. So anyway, the other is I can be a little bit argumentative. I don’t think in a negative way. I just don’t roll over very easily in the face of what I think is an illogical argument.

Chris Beall(07:04):

Do you want to debate? As a leadership style from, again, not just you, but certainly, we’ll pick on you, but all the other leaders that you’ve observed from being an investor or executive or being board member CEO, do you want to surround the issue and debate for the sake of maximizing all the different off-ramps that you could take? Or is it genuinely from a science level scientific level that you have your flag, you have your banner and you want to teach and the stakes are highest for you, so to speak?

Corey Frank (07:35):

Well, I’d like to think of myself as the guy who insists, we go science first. And if you’re going to go science first, that means you have to be ready to do experiments and experiments are very well understood. And we know how to do experiments, been doing a lot of science for a long time. And that means you’ve got to be math first because doing experiments that don’t have a shot, mathematically is ridiculous. It shouldn’t do that. So you’ve got to keep the number of experiments down to a minimum and cram them in a small amount of time, small amount of cost. But to do that, [inaudible 00:08:06] stuff away with logic. And I’m not a fan of internal debate for a long period of time. I think you’d debate just long enough to determine one of three States and I think we should all consider this as a way to run our own lives.

Speaker 2 (08:24):

Connect and sell. Welcome to the end of dialing. As you know it, Connect and Sell allows your sales reps to talk to more decision-makers in 90 minutes than they would in a week or more of conventional dialing. Your reps can finally be 100% focused on selling, since all of their CRM data entry and follow-up scheduling is fully automated within connect and sells powerful platform. Your team’s effectiveness will skyrocket by using connect and sells teleprompter capability as they’ll know exactly what to say during critical conversations. So come on, give your fingers arrest with connect and Sell. Visit connectandsell.com.

You’re listening to the Market Dominance Guys with your host, Chris Beall of Connect and Sell and Corey Frank of Uncommon Pro.

Corey Frank (09:21):

Not that I’m here to tell people how to run their lives, but what the heck? Right? So we’re in one of three States, I think this is sort of mathematical truth or truth of life. State number one is, we’re in flow. And when we’re in flow, we should stay inflow. That’s just a great policy when it’s working. If you’re on the tennis court and you’re lacing those down the line backhands, and those cross-court forehands that are winners over and over and over, it’s a bad time to start to invent new thoughts or new strategies or new ways of holding the rack or go change your shoes. You’re in flow, you stay inflow. Again, I’ll go to our product. One of the great things I love about Connect and Sell is, it lets you get into flow with regard to conversations and stay there for hours because you’re either having one or you’re hyped up about to have one that’s not very far off.

So staying inflow is the key to performance, right? What would be the point of developing great skills and then not continuing to use them when the road keeps paving itself in front of you. It just, “Drive, baby”. Right?

Chris Beall(10:27):

All you have to do is not fall out.

Corey Frank (10:29):

Don’t fall. Yeah. And just don’t talk about it, don’t think about it. Just go do it and keep your eyes open, but go ahead and crash into something. That’s okay. The second state we’re in often is a state that I call stuck. I love the word stuck because it actually colloquially means what the state means, which is “I’m stuck. I actually can’t move forward”, but it’s not normally because I’ve lost my motive power. It’s not like my legs fell off. It’s because I don’t know which way to go.

And when we’re stuck, we can do something and it is real clean and organizations have a hard time doing, and individuals have a hard time doing it, but organizations have a harder time because we have to admit we’re stuck and stuck as synonymous with we don’t know what to do. And if there’s anything that I would advise young entrepreneurs to get comfortable with, it’s the fact that often you don’t know what to do and a thing to do that’s incredibly effective when we’re stuck is to say, we’re stuck. Just verbalize it, “We’re stuck”. It means we don’t know what to do. And if somebody says, “no, no, I know what to do”. They’re probably not right. They’re probably guessing. And there is a role for guessing and we’ll get to that in a moment. But the first thing we do when we’re stuck, as we stop pretending we’re in flow. Stop pretending we’re in flow.

Sure. We still got to eat. We got to sleep and do a bunch of these necessary things. We still have to sell stuff. We’re going to keep the wheels turning on the business, but let’s recognize we’re stuck. And this COVID thing actually for a bunch of companies suddenly made them stuck. And instead of saying, “we don’t know what to do”, they said, “Well, let’s start doing stuff”. But that leads to the next part of stuck, which is you have to ask yourself then, if it’s as bad as it looks, whatever that is, that means my overhead is burning my capital and it’s burning it at a higher rate, so I might run out of money. That’s the worst one. Look at the date when that might happen and ask yourself the question, “Is that the amount of time we have to get unstuck. And if it is the amount of time we have to get unstuck and it’s long, then let’s go learn.

When you don’t know, learning is the way to know, how do you learn through science? We do experiments. So the next natural question is what experiment is going to yield the most information about our stuck situation in which direction we might go the fastest at the lowest cost. And that’s a very concrete question to debate. And when you get down to the debate being difficult, then you no longer have to debate anymore. Cause as soon as it’s difficult, whatever it is, it’s two options. Well, as soon as it’s hard to decide between them, it’s easy to decide between them. There’s nothing to it. Just pick one. And that’s the role of the CEO. That’s the role of the boss. The role of the boss is to guess when you don’t know, and there’s more value in making a decision now than there is and making a marginally better decision later.

And that could be even a big decision where you have no information, but you have no tie, so the CEO guesses. That’s why I call the CEO role, “The Guesser”. And when I hire people, I say, one thing you got to know is in our organization, I’m the Guesser. And this is really bad because it’s also corrupt. It’s completely corrupt because the Guesser guesses when we’re out of time and we don’t have enough information, must make a decision. And the Guesser who also declares that we’re out of time, we don’t have enough information, must make a decision. So it’s a totally corrupt role. And I’m sorry, but it’s like a mathematical singularity. We can’t get away from it. There’s no escape. As Edward Abbey once said, “We’ll find out who a philosopher is compared to a practical person. When you throw a brick at the head of a true philosopher, he doesn’t duck”. Well, the rest of us duck, right?

And so you’re depending on the head, no one wanted to dock. And that’s why you put a person in the CEO position that you trust to guess. That’s the one thing, they’re not going to steal that is do things for themselves and they’re not going to guess. I mean, they are going to guess when the time is right, but then there’s the third stage that’s really important. And this is the one that people just blow a hundred percent of the time. You never see anybody put this right, ever. And it’s the state many, many companies are in right now. And it’s kind of an ironic state. It’s a state of waiting. We should wait for something. Now I’m not saying the COVID thing means we should all be just sitting around, waiting in the foxhole. All contrary, we’re burning, right?

Most companies can’t afford to wait, but certain big companies can wait. They got the capital to wait. And if you don’t know what to do or you know what to do, but you have to wait for a resource. It’s like trying to go through a door before you’ve opened the door is a dumb plan. If somebody else is going to open the door and that’s a great idea is to have them open the door. You have to wait. Now there’s a wonderful thing about waiting. Unless you’re single-threaded on everything in your world, you can take the wait time and you can use it to go learn about some other things you’re stuck on. So waiting is truly waiting and it’s the hardest of them all because it’s an emotional impossibility for a group to wait, cause somebody is antsy and wants to go and that person’s going to agitate for it. So go find something else for you all to go and stuck on and research.

Chris Beall(15:35):

It’s not progress even. It’s not the implied mode of progress, either moving forward or playing your arms or activity. Activity, sometimes in a business, just connotes you’re doing something. Waiting is, I feel like I’m being overpaid as to wait, but I’m reminded of Tom Watson, the founder of IBM, I think at 1947. When he started, I think I seem to read somewhere that he had a simple phrase written on all of his executive board room, whiteboards or green boards at the time chalkboards at the time. It was one word and it just said, “Think”.

Just to the point where sometimes just thinking or waiting or processing is working and you don’t have to have this implied or perceived activity to be justified by the powers that are earned in your key. Sometimes it’s simply waiting for the door to open. I think that’s beautiful, Chris. So in other words, and also it seems like from a starter perspective, state number two of being stuck where you talk about, “I don’t know which way to go”, “We should probably test”, “We’re definitely not in flow”, “I need to evaluate how much capital I have”, that’s the state of most startup businesses as it’s a force needs to become in motion versus a force already in motion tends to remain in motion,

Corey Frank (16:55):

All startups start stuck.

Speaker 5 (16:58):

All startups start stuck. I love that.

Corey Frank (17:00):

All startups start stuck. That’s the starting state of all startups. The flow state you want to get into is the flow within the first experiment. And when the first experiment yields enough information, stop, then you go back into a state of being stuck and you design the second experiment. Maybe you already have it designed, but I hope not because if you don’t take the information for the first experiment, use it to design the second, you are sort of throwing away the primary resource you’re trying to gather, which is information about what the market, as a list might want and pay for in order to solve a problem that they have today and we’ll continue to have in some future. If we don’t recognize that startups start stuck, it’s a beautiful place to start. It’s why actually most startups fail. They start stuck and they unstuck. And in between, they flail around thinking that activity is going to get them unstuck.

But what gets you unstuck is experiments, because that’s the only way to find out about the world, what’s true. So the tendency is to have internal debate. I’ve had a lot of founders tell me, “I spent six weeks working on this business plan and I’ve thought of everything”. And I always think back to a company that we did call finished line floors, where the idea came to several of us on a Friday by looking at a floor that was outside of a Starbucks in Des Moines, Iowa. And somebody asking a question of somebody else, “How long do you think this beautiful, shiny floor has been down here?”. I said, “What does that even mean?”. I was the somebody else. And the answer to that question back and forth revealed a possibility of a multi-billion dollar business. So I went home and wrote a business plan.

It was pretty detailed. Big spreadsheets going on and on and on because what I wanted to know was if we do it, is it worth it? Cause I don’t know anything about floors. And by Sunday evening I convinced myself that it was worth presenting to somebody with some money to who might be interested to say, “Yeah, I think this, if we can pull it off, I think it’s hard, but I think it’d be worth it. What do you think?”. And he wrote me a check at dinner for about 300,000 bucks and we started the company on the spot and started operating the next day. So that was between a Friday and a Monday with the drive back and forth to Boulder, Colorado and Des Moines, each way. I had a very fast car. So it was all right. But that’s an appropriate amount of time to build a business plan and appropriate number of people, which is one, after all, it’s only an exercise to answer this question, “If this works out, would it have been worth doing?”.

At that point we could say, “Okay, now we’re stuck, right? Isn’t that great? We’re stuck”. Here’s what we don’t know. We don’t know actually how to put one of these floors down. Okay, well let’s do some experiments. So, who’s the manufacturer of the product? What do they recommend? Can we get some experts who put other kinds of floor finish down? It was a water-based Euro thing. What environmental controls do we do they think we need, can we set that up? When we set up in two days and experimental test bed of a floor with some control over airflow and stuff like that. When an expert roll the floor in our cycle time for, is it working was one day, cause it took six hours to dry. And then we were getting information, right? And we got that information in a series of experiments. And at the end of a week and a half, it’s like, all right, this can be done under these circumstances. “Just be open about it, man. You’re stuck. Get good at being stuck.

Chris Beall(20:28):

Ray reminded Chris of Ray Dalio’s book principles here. And he has this image of the proper evolution of a business, which sounds exactly what you’re talking about here, right? Is in flow and stuck and then keep experimenting. And one thing Ray says here is evolution is the single greatest force of the universe. It is the only thing that is permanent and drives everything. And it consists of adaptation as inventions that provide spurts of benefits that decline in value. So these benefits or values seem to have a half-life that what got you in flow state doesn’t necessarily maintain that flow state permanently.

Corey Frank (21:10):

High flow can never be permanent. It’s wise to treat it as permanent while you’re in it. And it’s also wise to keep financial buffers and emotional buffers against its inevitable failure. It’s just like the business cycle. The business cycle is built into the very nature of how we invest in businesses. At the beginning of a business cycle, it seems like there are some opportunities. So investors come in and they do some investing and the investment has returned. So there are some opportunities. So there’s more investment. That’s not the issue. The issue is how much risk? Well, if it keeps working out, we must be able to buy more risk. So keep buying risk, combined risk. But the information about how much risk we have doesn’t come into the future. So when it does come in the form of failures, then we go, “Oh my God, we must have gotten past the edge of the risk” and all investments stops and the economy freezes up and then look, it’s rethought by like capital liquidity coming usually from government.

And we go through it, right? We got to the same thing. That’s the same cycles. I love Ray Dalio’s picture there. And we go through them in life. Look at how we work as animals. We’re not particularly active in the night as a species, right? Some people are, I mean, not so much now because they can’t go to bars or maybe they are gone to bars. I hear in some places they do that again. But there’s a period during which we’re not stuck. We don’t need to do experiments and we’re not in flow. We’re actually waiting. We’re waiting for our body to get back into a state where we can execute and we have to wait. We call it sleep, kind of close. Right? And it looks just like that, right? Because the value of the activity decays over time. And by the way, those decays often look like cliffs because this is another fact of the world.

There are very, very, very, very many ways for a system to fail a system that consists of 10 interacting parts has more ways to fail than there are atoms in the universe. There are very, very few ways for a system to work. Everything’s got to work. So even small amounts of friction or little misalignments, or you take a big machine, that’s got a bunch of gears and you take one gear out, you shave the teeth off of it, or you freeze it up. All of us who’ve ever worked as mechanics. And as you know, I used to do that at one point in my life on air-cooled engines. You know that the whole thing has to work. And in most random States, it doesn’t. Right? It just doesn’t. If you throw out a cup of sugar into a gas tank, [inaudible 00:23:42].

Adding carbohydrates to other carbohydrates looks good to me. I get an engine that doesn’t work anymore. And there’s just one of the very little water. Water’s good. Gasoline’s water, waters. I mean, water is a fluid. Let’s put them together, maybe there’ll be great. Well, it doesn’t work anymore. Right? Almost everything doesn’t work. And everything of value as a system, every execution unit of value is the system. Companies are systems. So companies have a marvelously large number of ways to not work. And they have almost one way to work. And when they stop working, sometimes you need to just oil them. Cool them down on oil, like sleep. You cool it down, you oil it, you put a little fuel in it, right? Make sure it can go the next little bit. And that’s just fine. Sometimes you got to replace a part and sometimes you realize that the system is no longer designed for the terrain it finds itself in.

And you’ve got to put more wheels on or paddles instead of wheels or tracks instead of paddles or rotors, so you can get above the terrain or something in the design cause it doesn’t work anymore because the circumstances for which it was designed are no longer those that obtain. And without having these paradigms to think about, these comparisons. I think the stuff’s really, really hard. I mean, if somebody says, I.

Sometimes people complain about me a lot is what’s with all the damned analogies, right? Well,

Chris Beall(25:06):

You’ve had so many jobs and from the age of a lemon, I think you can draw from most people think it’s an analogy. It’s actually a basis in reality. Let me tell you, it looks like an air-cooled engine or it’s like a can of bug spray. You ever use a can of bug spray for a black widow? There’s no light. There’s no metaphor. It really is. Right? It’s a simile.

Corey Frank (25:27):

It’s like being held up at gunpoint, at a theater that you work at North Tucson.

We’ll leave that one alone.

Chris Beall(25:38):

I haven’t heard that one before.

Corey Frank (25:40):

We’ll [inaudible 00:25:41] that out sometime, but there’s some, I found out that insurance investigators are superior to the police when it comes to solving certain classes of crimes.

Chris Beall(25:48):

Well, they have a higher motivation. They have a higher value to motivation to do as such, so.

Corey Frank (25:53):

And greater freedom of action.

Chris Beall(25:55):

And greater freedom action. True. True.

Well, I like this. I like all market nondominant companies are equally uninteresting and all startups start equally stuck. And I think that will go into the lore as well.

Corey Frank (26:08):

Well, thanks Chris. I think this episode, I knew we were going to draw plenty of nuggets from hearkening to your past to help other people in their future, particularly when it comes to getting their businesses off the ground. So again, we’ll just keep throwing up those questions and keep milking that wisdom. This is great stuff.

Chris Beall(26:27):

So until next time on the market dominance guys, this is Chris Beall and

Corey Frank (26:32):

Corey Frank.

 

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