In this episode of the Solspace podcast, we welcome back Shawn Busse from Kinesis to discuss the concept of change in business. The conversation delves into recognizing the need for change within an organization, whether driven by external friction or a proactive vision for the future. We explore the challenges of convincing people to embrace change and the importance of fostering a culture that is open to transformation.
[Music] Welcome to the Solspace podcast. Thanks for listening.
Mitchell: Hey everybody, welcome back to The Solspace Podcast. With me again is Shawn Busse from Kinesis. Shawn was on the previous podcast episode, and I was talking to Shawn before he went to the Automate trade show in Chicago. Shawn, welcome back. I'm curious how it went at Automate. You were preparing a presentation, you were going to give a talk, and we talked about the talk you were going to give.
How'd everything go? What was it like?
Shawn: Thanks for having me back, and good to be here. You know, I'm from a decent city in a small state, but I've never been to a trade show of kind of that scope and scale, and it was huge. And I think that was really what struck me first and foremost is kind of the size of it.
And I literally, even though I had maps and I had an app that told me where to go, you could literally get lost in there and not know how to find your way out of it. So that says something to the impact of it. I think the other takeaway I got from it was just how much sameness there was there.
Just how remarkably same all these competitors were to each other. So what I mean by that is lots and lots of booths with robots picking up things and setting them down. And it was like an arms race to see who could be the most clever in what they picked up and what they set down.
But they were all essentially doing the same thing. And it really, I have a good friend who was there and he was like, yeah, a lot of these people are doing the exact same thing as everybody else. There's actually not a lot of innovation and originality.
You really have to seek it out. It's there, but you have to know what to look for. So that was really eye-opening for me as a guy who likes innovation and creativity and change to just see an industry I think we think of as really progressive and forward-moving, have so much of the same stuff going on.
So that was eye-opening.
Mitchell: Well, one of the things we've been talking about on our email exchanges since our last episode was change. And it's a broad topic, but you and I've sort of focused in on a few aspects of it. And we're talking about an industry that's at least 10 years behind the curve in the discipline that I practice, which is digital, which is web development.
The clients that we have in that sector have chosen change and they chose change and then found us. They didn't find us and get talked into change. They came to it and then they said, all right, here's the big thing we're going to do and here are the component parts.
In order to execute on component Y, we need to go find a web developer who can do this concept, who can flesh this out and see if it's possible. And so they come across us for a variety of reasons. I want to improve that.
This idea that Mitchell can go out and prospect for people who are ready to make a big leap, a big change, it's absurd. It's not real. There's some other way that I can connect with these people, but we're talking about change, right?
And you and I have been going back and forth on this question of how do you know when it's time to make a major change? And how do you know when your change is incremental, a little bit more of the thing or a little bit more in this direction versus tectonic versus just a leap across a chasm? I wonder if you could get us started on this general concept.
I think you spend a lot more time thinking about change with your clients than we do because they're coming to us and we're part of a larger package of change that they're making.
Shawn: I see. Yeah. I mean, you said a few things in there that I think are worth talking about, especially I interviewed one of my clients in advance of this recording, who I would say is probably the most change aggressive person I know.
And, you know, I asked him about kind of the nature of change and he said something really interesting to me. He says, I'm going to read it word for word, I don't think you can transmit the desire to transform. Meaning he doesn't really believe you can convince people that they need to change.
That his belief and his experience has been, you need to go find people who want to change or are already in that mindset or have a proclivity towards change as opposed to convincing people. And I think that's part of it too. I'm thinking about the business owners out there who might listen to this, like, do you have a culture that embraces dynamism and change?
Because I think that's part of the equation to begin with. There are cultures out there that quite frankly, without a full sale evisceration of the company, you're not going to bring change to that organization. I think that the accounting industry is a really good example of this.
I see a few radical change makers in that arena and then I see a ton of people who are really trying to do business as usual and no amount of convincing is getting them to change their idea about that. So I think that's a little bit of the thing to think about is what is your organizational DNA and are you one in which you have enough people in it to where they have their antenna up to change needs to happen? And I think a healthy organization has a mix of that.
I have that in my company. I have some folks where it drives me crazy. It really changes hard for them.
I'm like, come on, let's go. But if everybody were like me, it would be chaos all the time.
Mitchell: Yeah, exactly. That's right.
Shawn: Yeah. So I think that's something to really think about is the culture and are you built to accept and bring about change? And then I think to your other piece that I think is really interesting is like when do you know it's time to think about change and what should we be looking for?
I'm kind of curious, when clients come to you and they've already started the boulder down the hill, the change boulder has already been put in motion, do they say to you what started that first thing? Do you ever learn that from them? Why did you even start rolling the thing before it even picked us up?
We're three or four links in the chain down. What do they say?
Mitchell: One of the things you said in an email exchange today, in fact, you mentioned the word friction and that's my answer. My answer is your answer. And the answer is my clients come to us when they've encountered too much friction in their sales process in some cases.
Sometimes it's really specific, like they know the website's the problem and they know there's friction in how they manage it, how they deploy new stuff to the web, how the customers interact on the website, how systems tie into it, how data moves across different systems that touch the website. Friction, friction, friction. So my marketing copy is all about friction.
Talk about it all the time. And they are coming in saying, all right, so we need some professionals and we need to pay real money and spend real time and build a real scope to reduce this friction because we think once we do, we're going to unlock a lot of opportunity. Friction is the byword from my experience on this.
Shawn: Yeah, that really mirrors what David and I were talking about, who I was telling you about in terms of like the change agent. When he was talking about the times when we've made really big changes, it's been in response to external pain. In some cases, it was like, our business is pretty much done.
We might as well throw one more Hail Mary, quite literally. He's a really good example. When we met him, he had just hired a salesperson and was like, and I think we also need to do some brand or marketing.
I'm not really sure. But he deferred that and just made the bet on the salesperson. He didn't hire us right away.
And that happens a lot, actually. A lot of folks meet us and then they don't hire us. And then two years later, they do.
The salesperson had flamed out, but this didn't work. And I hear the flamed out salesperson story a lot. And then they'll often think, well, we need to do marketing instead of sales.
It's like, well, maybe. I'm really in the realm of marketing. I'm not in sales.
But what I see that works really well is when marketing and sales are a cohesive unit. And so with him, his sales had totally flamed out. He had no way to get new customers.
He didn't know how to get customers. And that was really the beginning of a journey of, hey, let's do something really, really different. And one thing led to another in terms of positioning and branding and the type of work that we would talk about.
And today he's probably four times the size he was in 2017 when we met him. And really that was driven by making a big change. And that big change was driven by friction.
The friction of, I can't get new customers. I don't know how to get customers. You know, he was really frustrated.
Smart guy too. He was like, he tried everything. I think friction is a good indicator.
I've also been thinking about like the delineation of immediate friction versus slow, steady friction. So I'm willing to bet that your clients often have more of the slow, steady friction to where if you were to calculate its cost over time, it's pretty dramatic. But at any one moment in time, it's probably not super severe.
That's accurate. I think that's the, that's the devious friction because it's actually really bad when you start to add it up. You know, if you think about, well, our accounting system doesn't talk to our inventory system or our procurement system, right?
These systems will talk to each other or our online purchasing doesn't talk to our real world purchasing or any of these things, right? It's like, well, over the course of a month, I don't know, it sucks, but maybe not that bad. Then you start calculating, okay, 12 months, 24 months, 36, like how many months do you want to go by while this is like this, you know, draining money out the bottom of the bucket.
So I think that's a, that's a big one. Kinesis clients, they tend to come to us more often from like, I would call those like events, like almost a friction event. So like we got a ton of new clients after the great recession.
I mean, just so much new business, you know, 30% year-over-year growth, fastest growing company many years in a row. And what really drove that was that everybody fired their marketing people in, you know, 2008 through 2010. And I came to market with outsourced marketing team for about the price of hiring a marketing person.
And man, the market was ready for that. They had all experienced the pain of ineffectual marketing. They all wanted customers.
They didn't know how to get them. If they had to fire their marketing person, then what do I do? Some had tried hiring salespeople, but like I said, that doesn't always work, especially if your marketing is really weak.
So I think that's something to think about. You know, we've had this, this pandemic, which was a, which was a sudden event and I'm still trying to try to put my finger on like, what's the thing that business owners are thinking differently about now or are they, or, or has enough time passed to where they realize enough that things need to change. Kind of to turn it back to you, there was a time I remember this, especially manufacturers or guys in your arena would say, well, why do I need a website?
Right. They wouldn't even like, they would question the validity of that. And, and I think that shift happened slowly, right?
Or, or maybe not. Did, did it, was it slow and then all of a sudden, or yeah, tell me a little bit more about that.
Mitchell: Yeah. The pandemic was, was a jolt. It was like an electric shock.
Our business and agencies like mine just exploded because the pandemic was a friction event. Oh, we can't sell the old way, but I guess it's possible to sell online. And we've been talking about doing it.
We've been talking about making the website the best member of our sales team. We haven't gotten off the stalling and we haven't done it. And then that jolt happened.
And now these people are like, whoa, we got to do something. Right. And then just from my own experience, when the vaccines started coming out and rolling out and you could feel like you could go out and you can walk around without a mask, when those limitations started to decline, I just wanted the old world back.
And I think a lot of, a lot of prospective clients of my type of business out there are like, goodness, thank goodness. I'm glad that's over. Let's go back to the old way.
I like the old habit, you know, but there's, there's been a decline in, in my market. And I some other stuff, you know, industries and whatnot. But this idea of a friction event matches up with how we've gotten quite a few of our clients.
There's a client has been on retainer with us for a long time and we are their web team and they outsource it to us. And they, they have, they seem to have no interest in changing that. That's good.
That's great. They still talk about the day they came to me and said, this really important section of our website is just totally dead. Something happened in the code and now it just won't load at all.
And it's a big part of our revenue. You're an expert in this platform. It's Crash CMS. They were on this platform that we specialize in. Can you come in and fix it? And on the phone when I, I just, they gave me the credentials. I logged in while we were talking and I did my process on it and fixed the issue in maybe 30 minutes or whatever, while I was talking to them.
They still talk about them. That was a friction event. What have we done in the years after that?
Well, we've done professional web development in an ongoing manner for them. We have resolved very few emergencies since then because we professionalized their website. We got them out of that, but they still talk about that friction event.
There are clients who come in and they say stuff like, okay, well, we just inherited this website in an acquisition or a private equity event or whatever. Now we have to manage it. I don't even know how to even get near it.
Like, what is this thing that you guys specialize in? That's a friction event. Right.
So that language is accurate. And we're talking about drivers of change and we're talking about the mentality of embracing change, right? And it's, in some cases, we're talking about human animals here.
So you've got to poke them with an electric prod to get them to move. And that's this pain of a friction event. You and I both have clients who don't require that.
Shawn: Yeah.
Mitchell: They come in and they are capable of seeing a future that they want to attain and they need help to achieve that. Let's talk a little bit about them because those are really rare and interesting people to work for. And I'm sure you have some of those clients.
What is it like for them? How do they arrive at that state of saying, all right, I see the vision now and I want to execute. I need some help.
Shawn: Yeah. In a world of horses, they are the zebras. That is really, they are rare.
You're so right about that. But I do think they have something in common with each other is that they are making bets on possibility and the future before there's actually a crisis. Right?
Mitchell: Yeah. Right. Exactly.
Shawn: So I think what makes them really exceptional leaders is they have, it's such a cliche to say, so-and-so can see around the corner, but like literally they can kind of do that. I have a client, I'm going to talk about this on the last podcast, but like he recognized his industry was in decline long before it was actually in decline. And rather than just kind of waiting until the shit hits the fan, he actually started building new things and trying new things.
And he created a whole new brand. He created a whole new way to talk about his company. He brought on a new salesperson who unlike that other sales story I said, this new salesperson was really quite successful.
And so I think that company then was probably low 10 million in revenue. Today they're like four times that size. And all of that revenue that they made then on that industry that was in decline is gone.
Meaning if he had done nothing, he would be out of business today. And no amount of like sales and marketing would have changed that for him. So he did have friction, but he recognized the slow friction very early on.
And then he started building towards something new and it was in a new industry and a new offering. So that act of both creation, which is initiated by a hunch or like an instinct or that look around the corner idea and getting started early enough that you have time to like course correct, make little tweaks and changes to where today he's dominant. I mean, he's just on top.
And it's interesting because I reached out to the sales guy recently and I was like, Hey man, it's been 10 years. We've done great work together. I really appreciate you and you've done great work.
And he's like, yeah, it's really good. And I think we need to get together because I feel like it's time to re-examine thing. And my guess is he also is acting on a hunch and information from the field, which is telling him, Hey, the market's caught up.
Things have shifted. We got to be ahead of everybody else. Let's start now.
Not when we're in trouble. And I think really good leaders do that. Well, I don't know.
Does that ring any bells for you?
Mitchell: Yeah. I know a few clients like that and they're rare.
Shawn: We all kill for them, right?
Mitchell: We have one like that and we implemented his vision and he's kind of one of like the type of person that you're talking about is for sure. This guy implemented his vision, executed it. It's up and running and now he's going to internalize the work.
So he's going to hire internal people to manage the thing that we built and he got what he paid for and it's good. He doesn't need us anymore. So that's, that's how he's executed on that.
And that's a pattern I've also seen is this type of person who can see further around the corner and they know what next to build or have built. They know when it's time to move on so that they have moved their business to a new stage and now they need a new set of tools and helpers to move that way. The vast majority are people like me who I see what I see when I can.
And even if I see the future, I can difficult to execute and see the future, but with discipline follow through on creating a new thing, marrying those two worlds of chaos change versus discipline stability. Both of those things are required in the same human being. And I just think that's really rare.
Shawn: It's funny you bring that up. I made a list before we started talking and I wrote down, okay, so Kinesis, we work with owner operators like you Mitchell, generally three to 30 million. That's kind of our sweet spot.
And I was like, what holds them back or what are their big challenges? And I wrote three bullets. I wrote 21 hats, which is another podcast I'm on.
And it's titled 21 hats because it's the number of hats you have to wear as an owner. And it's just a lot, it's a lot to carry. And anybody under that, definitely under 10 million and probably under 5 million, you're just doing too many jobs, but it's really hard to win at all of them all the time.
So that's one. Number two problem that I see with owner operators is the transposition of the words strategic planning, which actually becomes just planning, meaning like, oh, we want to go from 4 million to 4.5 million. And how are we going to get there?
It's an annual plan and quarterly rocks or whatever system you use, but it's actually not really strategy. It's just the execution of work. And that's not wrong.
I'm not saying that at all, but when we put that word strategic planning in there, we're confusing the two. And then finally there's no VP of strategy on your team, right? So there's nobody like dedicated full-time trying to figure out where to go next.
And so it's all falling on one or two people in the company. And I think that's why it's really hard for an owner operator of a small business, especially under 10 million.
Mitchell: When you're counseling your clients and you're helping them with your practice, your discipline, isn't the owner operator, the one who should own the strategy? Don't you get pushback on that on a regular basis? What do you mean, Shawn?
I'm going to outsource the future of my company to somebody else. This is insane. This is me.
I have to be accountable for that. That's my responsibility.
Shawn: Yeah. And I think right there lies the missed opportunity and the way you described it. And that idea of singular accountability.
If you look at, my favorite person to talk about these days is Rick Rubin. You look at what Rick Rubin does, right? He's a really incredible musical producer.
He's produced almost anybody you've heard of. Little bands like U2 and Tom Petty and on and on and on and on. He's almost single-handedly responsible for Johnny Cash's incredible resurgence, Phoenix from the ashes kind of thing that he had 20 years ago or so.
It is not like these musicians are coming to Rick and saying, hey, tell me what my next album should be. They're not outsourcing creative vision to Rick Rubin. They're not hiring him to do their job.
They're actually taking advantage of the fact that the creative process usually benefits when there's more people involved in it, especially when they're really good at what they do. And so that act of creative collaboration, I think great strategy comes from that. And I think it's a missed opportunity when an owner or a CEO feels like it should be entirely on them to figure it out.
I have clients who are incredibly visionary, incredibly smart, very future oriented. And I know that the work product that comes out of collaboration with us is far better than if they had done it alone or if we had done it alone. I think that's a really important nuance that we often think that it's a one person job.
I have a background in the fine arts. I was a studio art professor for a few years and thought that was going to be my big career forever. And I realized it doesn't pay anything and it's really political.
But what I really appreciate about the arts is it really taught me that when smart, creative, interesting people come together for a common cause, really cool things can happen. And if you look at all the great artists through time, whether they're musicians or painters or sculptors, most all of them either had a studio with other artists in it or were constantly hanging out with other artists. And so I think businesses like that, when you collaborate and work together, you produce just a better product.
It's a better album. Johnny Cash is way better with Rick Rubin, but Rick Rubin can't even play an instrument. So I that's a really important lesson.
And I'd love for people to set aside the idea that innovation and creativity has to fall on one person's shoulders because I think it's more fun and better. Call me biased, but yeah.
Mitchell: I read a great biography of Leonardo da Vinci a few summers ago and you're reminding me of that right now. My impression of da Vinci, all the years that I had heard about him prior to reading this book, Walter Isaacson, I believe it was that he authored this one, was that, oh, he's the singular genius wandering around Italy, painting the Mona Lisa and coming up with designs for contraptions. And the reality was he collaborated extensively the way you're describing.
And most of his work, most of his masterpieces are lost to history because they were for theatrical productions. Oh, okay. Yeah.
And dukes and princes and so forth would hire him. And as part of a team of people putting on these elaborate festivals or dinners or productions that were in some ways theatrical, kind of like, you know, just a festival type of an environment. And da Vinci would create these contraptions and apparatuses and these experiences using his artistry combined with engineering.
And they were all in the context of collaboration. A lot of his most interesting work, all these things would just be destroyed once the production was over. He was intended to be temporary.
And even some of those more permanent contributions that he made were collaborative as well. So there's a lot of support for the position that you're taking. How long does the collaboration last?
Rick Rubin comes in and he helps produce an album or two. Like what's the duration? How do you know when you're ready and how do you know when it's over?
Shawn: I think it varies a lot on the artist too. Some of my clients literally months will go by where we're talking to them all the time and we haven't necessarily produced anything. And then one day, boom, like something really powerful comes out of it.
And some of our clients value that so much that they're just engaged with us all the time. And that's a great financial model, quite frankly, but it's also a great way to understand the depth of their business. And I, I think that it's part of the reason why we have employees quite frankly, is that an employee by being around all the time, like magic happens in unexpected ways.
So I, I tend to like that ongoing kind of relationship. Some of our clients like lean into that really hard when they're like maybe 10% of our revenue, 5, 10% of our revenue. And they're working with us a lot.
And then others, it's like, we're on this like low boil on the back of a stove and then they can just turn the knob and, and bring us back online. And we can do really interesting, bigger projects because the things we've done early in the relationship, kind of like your 30 minute web fix, like we really helped them untap some potential or remove a friction or both. And so that buys you a lot of like loyalty and also like, well, if he can do that, what else could he do?
And then there are those where they, for whatever reason, maybe they want to build their own empire and they don't want outsiders to be part of it. And they want to build it all internally. And we've helped people do that too, where we do this transformation and then they want to really build a, an employee based team.
I think that's different though. Like once you're inside the walls of the castle, so to speak, things start to shift and it's harder to be that force of innovation and creativity and newness. But, but that's legit too.
That, that outcome is legit. Just like you experienced, you know, where you build something and the guy then wanted to just have it kind of run on its own with somebody internally. So I don't fight that.
Like I just try to be awesome with customers. And then those who want that kind of ongoing, Hey, we're in a studio together, always making new music and our company is built around constant innovation and staying ahead. Those are the best customers.
But I, I, I found that I can't convince people to think that way or behave that way. You just have to find those folks. You got to really find the, the zebras amongst the horses.
I don't know if that mirrors your experience at all. You probably have some like that where they just value you being around. Right.
And they're in a, in effect, they're paying for you to be thinking about them all the time. I was tinkering around with this new software product the other day. That's a really interesting tool.
It sits on your website and it tells you the person who is visiting your site, like to the person. And I was like, Whoa, well, privacy issues aside, this is really interesting. You know, I saw this like prospect who I had talked to.
They popped in and looked at our website and we could see what pages they visit. A couple of pieces of technology together there. It's not just HubSpot.
Like that's a different, when somebody submits and gets a cookie on their machine, it's not this it's different. This morning I had two people from a company that I had, I thought was like, they were no longer prospect. I thought, you know, they, they, they just stopped emailing me.
I thought this was done with. And then two people who I did not know from that company are on our website. And I'm like, huh, that's interesting.
And then bam, out of the blue, the guy who I had been talking to emails me and he's super interested. Wants to talk. It's like, wow, that's really fascinating.
And so I reached out to my client that I've been talking about here that was a small shop and now they're bigger and they work with us all the time. I'm like, I'm using this tool on my website. This might be cool for you.
And he saw it and he's like, Whoa, that's awesome. So who knows what value that might bring to him? It could be worth nothing.
It could be worth millions of dollars, right? If, if he has some insight about somebody visiting his site that he didn't know, and he finds a way to connect the dots. And what did I get paid to do that?
I don't know. I can't really calculate that, you know, 32nd interaction I had with him as a dollar amount. But the fact is like, I'm always thinking about those clients that are engaged with us and how I can help them.
And there's something valuable about that. And I think good clients get that like really great clients understand that.
Mitchell: Yeah. We, we see this a lot. We have a lot of clients on retainer.
The nature of the work is just making sure the website's online at a minimum, like an SLA type of a thing. So they have us on retainer, but one of the values is that they know we're thinking about them and they know that if we did a thing, we solved a problem for client A and we see that it's useful for client B who's in a totally different industry, but the same technology could be effective. We let them know.
And that solution scales because we've done it before and we can tell them what the metrics look like. And so there's a virtuous cycle there. So yeah, we, we definitely see that pattern and we definitely embrace it.
One of the, one of the last things we were talking about that we haven't yet covered, and this is on this topic of change in this topic of like, when do you know that it's time? And when do you know that the time of incremental is over and you need to make a leap across some sort of a chasm? You and I have been throwing this graphic back and forth over a few days in this infographic, I'll link to it in show notes, but it talks about the valley of death that sort of punctuates the growth of a business at different revenue level.
And it also emphasizes how rare the businesses are that make it through these several different valleys of death. And this is a graphic about change, the graphic about, all right, well, you were fine up to a million, but 10 million is really different. And you're not going to incrementally get from one to 10.
The leap to get from one to 10 means a lot of change at one, coordinated, synchronized. Maybe you could talk a little bit about your thoughts on this question.
Shawn: Yeah, I got introduced to this idea many, many years ago where this owner that I knew was talking about atoms and electrons. And he was talking about how electrons and their kind of distance to the nucleus, that they exist at one distance and then they move to another distance, like in a jump. They don't like slowly progress their way to the new position that it's like, yeah, they're vibrating.
And then all of a sudden, boom, they move to the next kind of orbit. And that stuck with me for many years. And I think it really fits also how businesses work or don't work, that there has to be something to kind of break through to that next orbit level.
Back to that client who was 10-ish million dollars, there's a certain leader who would have said, hey, let's double down on marketing and really go capture more market share in this they wouldn't have said in this declining industry. He just would have said, well, it's harder to get sales, but we're going to just work harder and hire more salespeople and let's use more incentives. And that's one way.
I don't think it works. But to fundamentally say, let's actually go someplace totally different. Let's build something new.
And now they're four times what they used to be in size. And I don't think that that kind of jump from one phase of the electron to the next phase happens by optimization. And that's tough because there are some things in business, many things in business that benefit mightily from optimization.
And many business models are built around optimization. It's just been my experience and observation that companies kind of don't exist at these in-between zones, these valley of death range. The range between 1 million and 5 million is really hard.
There's not a lot of like three and a half million dollar businesses. They either make the jump or they regress back down to a million or two. I think a lot of that has to do with like the structure and size that's needed at these different levels, but 10 million.
Yeah. You probably need a CFO at 1 million. You don't need a CFO.
So it's like these structural components exist. And if you build them, it's expensive, right? It's expensive to have a CFO and a VP of sales and a COO and all these VPs of this, that, and the other.
So how do you build for the size you need to have before you've arrived there? And I think a lot of folks wait too long to build the thing. I mean, this is right in your wheelhouse, right?
I think they wait too long to build the thing waiting for all the financials and all the stars to align. But then what happens is they start to lose customers or they lose employees because they haven't built kind of to that next maturity level of an organization. And then the friction starts to happen internally.
And then the gear, the sand is in the gears and now, oh crap, we lost that really critical employee who was tied to that really important customer. And now we lost that important customer and they were friends with this other guy, you know what I'm doing? And it's like you start backsliding.
So I think that that willingness to make those investments in your future state is another hallmark, I think, of great leadership. I think I've tried to do that even at my small size, our peak is $2 million business, right? Until a lot of people like, oh, whatever, that's nothing.
But it's like, well, I just got to remind people, 96% of businesses don't ever get above a million dollars. So, and only 0.4% get above $5 million. So it's really hard.
And I think that the difficulty lies in that what the classic Marshall Goldsmith, what got you here won't get you there. And I think what I've tried to do is always sort of over-purchase based on our size. Like we've implemented a CRM long before any company of our size would have had a CRM.
We bought really good computers and networking equipment and hired really professional IT people way before, while other people were just kind of scrapping things together with Google Sheets and stuff. So I tended to over-invest knowing that I wanted to get the friction out of the organization that would allow me to scale up in size. And I see that even in larger businesses that are successful there, they're investing in the future, not on kind of today's current state.
Mitchell: Is that all you have to look for is points of friction and prioritize those? You're talking about placing bets on an ill-defined, amorphous future. And I've placed the wrong bets in the past.
And it wasn't just, oh, there goes 30 bucks, there goes 40 bucks. No, there goes 30, $40,000 that I cannot get back and I can't lose. How do you know where to place these bets?
Shawn: How do you reduce the risk on those bets that you're If you subscribe to Nassim Tlaib and Black Swan and all that sort of stuff, the first rule of placing bets is you don't ever place a bet that'll kill you. So you don't put a $500,000 bet out there at the size of business you're at, Mitchell, and I don't put a $250,000 bet out there. So I think that's kind of rule number one.
But it's a good question. I mean, I've made bets that have cost me six figures and above, for sure. Those are usually bad people bets, honestly.
Either an employee who just really was just a bad hire, super expensive mistake, which then translates into client errors, which then you have to end up paying for one way or the other as an owner. As a professional service provider, I think your culture and the skill of your team is probably the most important thing you overspend on because the downstream consequences are so high. I think the realm of marketing and brand and positioning is really tough.
It's really tough to know, is it right to try this position out or go to market with this strategy? Because often there's no playbook. There's nobody you can just copy, especially what we're doing as value shops.
I think the counsel I give folks who are selling a service is to pay a lot of attention to the sales process because that's usually going to tell you where you need to put your bets at. And a lot of times clients will come to us and early on, we're really trying to get involved somehow with their sales process or feedback from that sales process because customers will often tell you what the friction is and then you need to feed back to them what relates to that friction in a new way. Are you familiar with a concept of the strategic narrative?
No. Oh gosh, there's a guy by the name of Andy Raskin who's done a really good job of kind of co-opting the term, but it's not his. It's been around for some time.
But the idea is, what is the story that you're going to tell that is about the old way and the new way? And the goal of a strategic narrative approach is to help buyers understand what the new way forward is and why the old way is just not working. So exposing all those frictions, illustrating why it's not working.
And my hunch is that you're kind of in the thick of that realm right now, right? You're trying to get industrious manufacturers and businesses live in the current century. Yeah, exactly.
And it's just, it amazes me how much ungodly amounts of money these people will spend on anything but that. Sales commissions, trade show booths, direct, whatever. You go to their website and you can't even find the product you're looking for.
I cannot tell you how frustrating that is. I think we're in that, the before times and the future, they are slowly getting that message and the ones who are ahead of it, man, it's just like such an opportunity. I think about my friend Adam, who he was an in-house marketer for a company that made bolts, like literally bolts.
Bolts, like a commodity item, right? But also some really expensive bolts. If you've got a sports arena and you need to bolt down this cantilevered thing that can't ever come out or you crush thousands of people, that bolt really matters.
And that bolt is probably $2,000, right? And there's probably 10,000 of them in the thing. And he, this is some years ago, he's like, hey, I want to do a thing where we actually do search engine optimization for bolts.
And they were like, whatever. And this is way before the memo got out on SEO for the industrial market. Killed it. I mean, he just absolutely killed it. Made them so much money because I think they didn't really believe in him, but like he wasn't upsetting anybody, right? They didn't, they actually didn't care.
The tragedy of it, right? Here's a guy who setting them up to make millions of dollars that they would not have made before. And they let him do it because they didn't care.
And I think that mindset is still out there. It's changing, but eventually the atoms of the world are going to be the CEOs, not the guys who maybe grew up in the forge and reluctantly are using email. So, so I think you're, yeah, you're ahead of the curve.
And I don't know that you can convince people. I think back to our original discussion, like he didn't actually convince them. They just didn't care.
And the reason I knew that he didn't care is A, he told me, and then B, like once he did that, he wanted to do other stuff, right? He wanted to keep going. And they're like, oh no, no, settle down there, youngster.
You know, he moved on and helped somebody generate a ton of money in another business. Right? So a really great leader would have seen what Adam did and went, whoa, you need to be our VP of whatever strategy, marketing, innovation, whatever.
So anyway, the atoms of the world are out there. People like you, people like me, and I think our people are out there. They're just zebras, you know, in a world of horses.
Mitchell: Yeah. Well, Shawn, this was another good episode. This is abstract to the max talking about change and when you know an organization needs to change and what are the signals and that sort of stuff.
So I really appreciate you walking me through some of this. We'll catch up again soon. And in case anybody wants to reach out to Shawn, Shawn Busse at Kinesis, this is kinesisinc.com.
Shawn: All right. Fun talking to you, Mitchell. Thank you.
Mitchell: Thanks, everybody.
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