Full Transcript
[Music] Welcome to the Solspace Podcast. Thanks for listening.
Mitchell: Everybody, welcome back to the Solspace Podcast. My guest today is Shawn Busse from Kinesis. Did I pronounce the Kinesis right, Shawn?
Shawn: You got it right. Thank you.
Mitchell: Shawn, you and I are introduced to one another by Leslie Camacho. I've actually had Leslie on the podcast before, and I did a string of podcast episodes about EOS, the Entrepreneurial Operating System. That's the connection for how you and I know one another.
Leslie introduced us because Leslie knows that I've been trying to push my web development company, my digital company, into a specific vertical market or going after the industrial manufacturing space. We're doing that because it's a pretty clear, obvious place that needs our type of services. Our type of services are building and maintaining complex websites.
What I mean is a website that helps someone sell something that's hard to sell, because it's complicated, configurable, expensive, high stakes. These factors come into play. Leslie thought you should talk to Shawn, because his firm helps businesses make transformations like you're trying to make. You should get an understanding of how Shawn and his team think about the kinds of problems you're trying to solve. You and I chatted last week, and you sent over a white paper. We started swapping stories, and there's some insights that you have that I thought were going to be really useful to get in front of people in the context of my podcast.
One of the things you talk about that I think we're going to get into is the concept of a value chain versus a value shop. You brought it up to me as I was complaining about the CEOs I'm talking to. They keep asking me, okay, Mr. Kimbrough, what's the ROI on this thing that you want to do?
You want to digitize our sales process. You want to make our sales pipeline digital. What's the ROI?
What? What do you mean ROI? I'm going to quadruple your revenue and shave down your sales team and make you guys so much more efficient.
What do you mean ROI? I don't even know if I can quantify it. I felt like I couldn't say that out loud until meeting you.
Maybe you could tell me a little bit more. What's going on out there that people want to know ROI, and they want to know how they can incrementally slightly improve what they already have versus what you do, which is help people make a leap over a chasm into a new form of being, a new way of existing?
Shawn: Yeah. Thanks for having me, and appreciate the opportunity to share this idea. I have a good friend who runs a robotics and automation company.
What he does is he helps robots dance in ways that they've probably never done before. The type of clients who hire him are really on the cutting edge of technology and using robots for things that you might not ever imagine that they can do. He and I were talking one day, and he said, I have this paper that you really need to read, Shawn. It'll really blow your mind. The only caveat is that it's really boring. It was an academic paper from a Norwegian business school.
If you really want to target boring, that's it right there. I tried reading it. I put it down.
I tried reading it. I put it down. Finally, after him bugging me a number of times, I finally got through it.
When I was done reading it, I was like, I see why you gave this to me. This is probably the most important business paper I've ever read. I don't say that lightly, because what they were talking about was the concept of the value model, which is how does your business provide value to its customers?
A lot of folks, when they think of how we provide value to our customers, it's like, well, I program things, or I make things, or I saw things, or I cut things, or I make all these ideas of putting things together, assembling things, or servicing things. The framework that they used that I thought was really meaningful was this idea that most of us know what the value chain is. It's that idea of putting things together to create value.
The longer the chain, the more valuable the thing usually is. If you think about maybe something like a car or an advanced car, like an electric car, you're navigating both the drivetrain and all that material. You're navigating the materials to assemble the frame and the chassis and so forth, maybe batteries and so on and so forth.
The more complex the chain, oftentimes, the more valuable the thing. If you think about really valuable things like an iPhone or anything made by Apple, where they get the most margin, they've really successfully navigated the creation of a very robust value chain. We all know the idea of the value chain, but many of us have businesses that actually aren't a chain.
You, Mitchell, are not taking pieces and parts and assembling together for a client. You're not even assembling digital stuff to make a thing that you then optimize and make better and better over time. These professors pointed out there is more than just the chain and that there are two other really important models.
Those are the value network, which is like Amazon or maybe the App Store, where you have large numbers of buyers and large numbers of sellers. Facebook is a good example of a value network. Then a value shop, which is somebody who solves complex problems.
As soon as I read that, I was like, yeah, that's what we do. Kinesis, we solve challenging problems. Clients want to grow.
We help them figure out how to do that in new ways. Realizing that the mindset of a value shop is really different than a value chain has really helped me understand how to talk to different types of business owners. What they're after, they may be different things.
How to speak each other's language has become really important.
Mitchell: One of the things that I've noticed as I look back on client engagements through the lens that you're describing is it gives me some insight into why it's been so hard to crack this nut of getting web development into the industrial manufacturing space. Why are they so resistant? If I look back on some of our clients, one of the first in this space who came to us to do a project found us because he and his brother had taken over the business from their father.
Millennials taking over from a boomer. That's a pattern we see. He had a long running dislike of the sales team.
He was looking for an opportunity to make a change. He had a background in CS, computer science. He knew how to do web development, so he understood those fundamentals.
He knew how to choose a platform. He chose a platform that Soolspace works on quite a bit, CraftCMS. He wanted to find expert developers to do a pretty complicated build. He wanted to move his business onto the web.
These guys sell programmable power supplies in the industrial space. They don't sell anything that's less than five figures, but they now do it off of the website. I'm looking back in some of these relationships, and I'm also looking back on conversations I've had at trade shows like Automate, which you're going to go to in May, I think, and give a presentation.
Conversations I've had, I'm dealing with people who are not in the value shop mentality. I think you have a story from a business that's firmly in the value chain space, but the owner had that value shop mentality. They were ready to make a fundamental change to how they deliver their services, and that drastically changed their trajectory revenue-wise.
It's an example of what's the ROI. I don't know what the ROI is. It's huge.
How about that? Can you tell me about that story?
Shawn: It's a really good example, too, of the challenge of a value shop when a chain-oriented person is purchasing those services is that they're often purchasing an unknown. Your client who hired you to build something new, he had faith and belief and had seen other digital transformations elsewhere and instinctively knew something could happen that was really good. That can be really a hard sell to somebody who's constantly told you have to prove something is worthwhile before we're going to actually do it.
If you think about how machines are bought within the industrial space, often the machine is bought through the pure lens of an ROI. What is my payback period on this machine? I'm going to buy this thing.
It's going to make me 20% more efficient in this arena, so I can spend this much to make it make sense. When you're accustomed to buying that way, it can be really hard to buy something that's never been bought before. The thing about when you buy with a chain mentality is usually you're talking small increments of improvement, small increments of gain.
When you buy from a value shop mentality, sometimes the upside is almost infinite compared to what you spend on it. We had a client that was a machine shop. Machine shops are definitely chain-oriented businesses who work for chains.
He was in a declining industry. At the time, he was helping an industry that did semiconductors. While that's swinging back now, back then it was all going overseas.
Declining revenues, what are we going to do? He had a theory that if they would build a digital tool that would enable customers to see the level of quality and delivery time really under the cover of the business, that if they could get that in the hands of the customer through the web, it would make him more competitive and also reduce the friction of the engagement with customers. He set about to build that tool.
He did that without any proof that it would work. One thing led to another, and pretty soon he's selling into the aerospace and the defense industries, which are much higher margin, much more predictable and long sales cycle. He transformed his business 10 million to 40 million in a matter of years.
That transformation was really made possible through his value shop thinking. What could we create that doesn't exist? What's funny is that now all the other shops have copied that idea.
There are software packages that do exactly what he built. A lot of times when you get first to market, you have this first mover advantage that's super powerful, and then you have to know people are going to copy that. Usually, you get a runway, and then you build the next thing and the next thing.
What I see with the industrial space is it's way behind in terms of digital transformation. Oh, yeah. Absolutely.
It's been talking about it for years, but often the extent of that is like, well, we know when our machine goes down because I get a text alert. That's the extent of the digital transformation. It's really not engaging with the customer in a meaningful way like the client did that I was telling you about.
Those are the hallmarks of it's often not been done before, that the return on it is 10, 100, 1,000x in some cases, and then you also have to be willing to take a risk. That's a change of mindset that sometimes people have a hard time getting around, but unless you want to stick to incremental improvement, you have to make those bets on that journey. I think that's the opportunity.
Mitchell: I'm not looking to get the best of both worlds, but one of the things that we talk about and have for years with our clients is we'd help them see a vision of their future three or four years down the road. You're headed here. Exactly what your configuration of that is, we don't know.
We're not proposing that you spend all your money right now and put all the effort in right now. We're proposing that you start marching in this direction and let's go try experiments and learn, experiment and learn. It feels chain-like.
It feels incremental, but where we're headed is a transformational space. Help me pull that apart and understand, is that one of my problems with trying to sell into this space? Do they need to hear a story about, we are going to completely change everything, write me a giant check?
Or we're going to completely change everything, but we're going to do it carefully and we're going to test as we go and we're going to measure and we're going to validate. How do you handle that with your clients?
Shawn: I think a lot of it is having a discussion about what is the state of the world we live in today? The state of the world we live in today is one of volatility, uncertainty, ambiguity, where the known things are less and less and less and less. Most everyone will agree with that idea.
Having been through the pandemic, having been through all kinds of chaos of the last four years, I think a lot of people at this point have also stopped saying, I can't wait to get back to normal. There's no returning. That's not the era of employees believing one thing or another or thinking about compensation one way or the other, or when, heck, employees had no voice.
All these things have changed dramatically. Getting somebody to understand we are in an era of change. How do you adapt to that era of change in a way that allows you to do new things?
We call it placing bets. How do you place enough bets out there that maybe three out of six of them don't go anywhere? That's okay.
That bet placement is small enough that doesn't kill you. Those other three, maybe two of them leap you forward in some small steps that are interesting. Then maybe one is that lottery ticket.
It's that piece of software that my client built that, wow, we didn't expect this, but look at that. If you think about the VC market, which I don't love to put a lot of energy into it, but to some degree, they've just applied math to business and say, we're going to place a bunch of bets on a bunch of companies. A lot of them are not going to work out.
Then those few that do are going to be stratospheric. I would say how businesses can adapt that thinking is unlike VC where they don't care if those businesses die, I think we care a lot about our companies. We're going to place bets that don't kill anybody, but are meaningful.
They're significant enough to prove something, whether that's we keep going or stop. That idea of small bets that don't kill you, but that are enough of an investment to make a meaningful decision. Agile thinking, which comes out of software, is a good way to think about that space of we're going to be more agile in our decision-making and stop placing five and 10-year bets.
We're going to place one and two-year bets and see what happens with those and then adapt. I think getting to that point of agreement, when I have a conversation with a CEO that's in a chain-based business, I talk about predictability. Because their world's really been rocked.
Then I say, well, there's a new way. There is a way to work in this state of volatility and uncertainty. VUCA is the acronym you want to look up here.
It is about making small bets and trying new things because the era of the 10-year plan, I think it's over. Look at GE. These giant companies that were once the foundation of our country, GE is like three companies now.
Look at Boeing. Look what's happened to Boeing in the last year. The reliability of things is not there, so how do we navigate that space?
I believe it is to make small bets so that not only can you realize unknown potential, but you're also protecting yourself from uncertainty. You're building new things so that if something destroys the thing that you know to work, you have some other things that you can lean on.
Mitchell: This is a cultural change that you're asking these businesses to go through. I hope you're not telling me that I'm not going to make any deals unless I can make the kind of pitch that you can make, which is not only do you need to try some digital experiments and place some bets, but you need to change culturally. Your team, certainly your leadership team, needs to become an innovation culture, an experimentation culture, a data and measurement culture.
Can you tell me more about the cultural change required? Because I know in your practice, that's a big deal.
Shawn: For folks that don't know us, I would say we live in that sweet spot of brand and culture and markets. What is it you're selling? Who's the people doing the work?
Then how do you position it? We found that this is another thing. The past era of hyper-specialization and only doing one thing is from the era of stability and certainty.
That's also chain thinking. There's some great stuff from Clayton Christensen, who wrote the book, The Innovator's Dilemma. He has a whole bunch of stuff on modularity versus integration.
Modularity says we want to break things into their component parts. Think about building a house. We're going to hire the electrician.
He's a sub. We're going to hire the plumber. He's a sub.
She's a sub. We're going to hire the concrete person. They're a sub.
That's a modular approach. That works great if you're going to build a subdivision and things are the same over and over and over again. Let's say you want to build a commercial building out of mass timber, which is a new technology made from trees put into cool shapes.
Let's just put it that way. I'm an Oregon kid, so I love trees. Mass timber is a whole new technology.
You can't use a modular-based approach when you're doing new things or things that are highly tech-oriented. You need a more integrated approach. You need to think about the culture.
You need to think about your offerings. You need to think about your customers. You need to be really more holistic.
I think, in general, that is the transformation that leaders have to do these days. All the Harvard Business Review articles are about this these days. It's about holistic view of the company, seeing the bigger picture, not being in these silos that we were encouraged to do for many, many years, but actually have the company be dynamic and more organic and less rigid and chain-oriented.
That's where I think to be thinking about, not only does the leader need to be thinking like that, but actually to foster and encourage folks in the organization to be willing to take a risk, make a change, to try things. If you don't do that, if you just keep doing the same thing, we have lots of case studies of that. Folks going into the pandemic saying, this will be over in a few months.
We're just going to keep doing the same thing. Or folks who saw a huge benefit from the pandemic continuing to do the same thing, and now they're bankrupt, like Peloton. They were on top of the world.
We're just going to keep cranking out Peloton. It's like, well, someday, people are going to leave their houses again. How do you build an organization that sees when that moment has shifted and we can move in a new direction?
Mitchell: I'm thinking about a client that about three or four weeks ago, I went on location there and I got to talk to the C-suite. I was pitching a dashboard. I was pitching the idea of a quote dashboard.
They were facing the challenge of, hey, okay, so this new website you built us has driven in tons of leads. That's awesome, but also terrible because there's so many leads, they're not qualified. The sales team is barely even working them because it's too difficult to sell this complicated thing as opposed to just the parts that we like to sell traditionally.
I said, well, what about dashboard? I couldn't get sign off. I couldn't get them off the fence, not because they lacked value shop thinking.
The problem was even worse than that. The problem was they're just dealing with crises internally about just the fundamentals of their business model. They're seeing some erosion in their position in the market.
In other words, what you're describing is in some ways a luxury. How do you face the criticism that someone comes to and says, this is awesome, Shawn. We'd love to do this.
We don't have time. We have to get our sales team back out on the street to go try to recapture some business that we lost. We're in crisis mode or whatever.
Arguably, you should be doing this when you feel like your back's against the wall. I feel like it must be sometimes difficult to get people to see the necessity of this when this feels like a luxury that they'd like to put off for later.
Shawn: Yeah, this really gets into the realm of, if you really want to get some interesting stuff, human behavior and stress-based response. Really great leaders, the ones that I've worked with in my years, even under stress, they're able to have a way of seeing things from a more long and short term. They're able to oscillate between those two areas and go, yes, it's important that we deal with the sales team and they're on fire, et cetera, et cetera.
Also, we've got to put some bets out here that are not going to manifest for two years from now. If we wait two years to place those bets, that will be four years before we ever see any change. I love that parable about the best time to plant a tree is 50 years ago and the second best time is right now.
Some of it is a leadership challenge and do you have leaders in your organization who are thinking both long and short or even the whole system one thinking, system two thinking? I think that was Kahneman who brought that idea to the table, which is that emotional right now decision-making versus the more slow thinking and fast thinking, slow consideration. Because what you're doing is you're doing that slow thinking for them.
You're like, well, it really makes sense logically and they're in that other system of thinking. They're in that, I don't know the situation that well, but it sounds like more of that emotional space and it's hard to get out of that. I get that.
I really get that. When you're under stress, you want to go to just survival instincts and that probably feels like survival to them. And you're selling them on a new house.
It's like, we just need to get by. We need a tarp over our heads, but it's not an either or kind of thing. It's like try to have measure, try to be focused on what's possible.
Yeah, it's a tough road, man, especially because things move so fast.
Mitchell: Yeah, this is how you shake out the, borrowing some Jim Collins language, the level five leaders who are able to do both at the same time. I mean, one of the things he talks about is how to kill a perfectly good company is to panic when you don't need to. This is my, I'm just paraphrasing some of his concepts, but you can move too fast.
You can pivot too far and you do so because you sort of lack an internal, I'm not sure what the language I'm looking for is, but you sort of lack this internal integrity to hold the course. Well, at the same time, being ready to adapt and change. Honestly, the cultural piece is so important here because if culturally the organization as a whole, multiple people on the team embody a culture of, let's deal with today's fire.
Well, let's also remember to plant the tree. Both of those things are equally important and we can do both at the same time. That's a sort of a culture that gets built over time.
Tell me that, is it a culture that you create or do you find people who have that capability? Is it like binary?
Shawn: Yeah, I don't think it's binary, but I do, in my experience, folks underestimate the power of shaping the culture through the hiring process. So we don't work with really big companies. I mean, our client profile is maybe three to 30 million in annual sales.
And so we're talking owner operated businesses and they do not have a lot of resources. You know, they're not throwing, you know, a million dollars at us to do some crazy idea. And so when we come into a company, you know, we came in a company number of years back, they were like 35 people.
They had huge turnover. And so they hired us to build a website and we're like, we're not going to build you a website at all right now. We're going to help you fix this hiring process that produces almost 50% turnover a year.
And they're like, what? What? You, you're supposed to build us.
You're the website guy. And we're like, no, no, no, no. We're the business and we're the business guy.
We're going to help you make the business work. And if I build you this fancy new website and your employees are turning over at 50% every year, you're going to piss people off. You're going to get more customers who are then going to be mad at you, who are then going to tell everybody how bad you are.
So I'm just going to accelerate your demise if I actually do the thing you've asked me to do. So we, we worked the whole hiring process to be values oriented and aligned with a real mission driven organization. We got that, that turnover rate down to like 4% was crazy, you know, within two years.
And then we, then we built the website and then we could drive business to them because then the right people were on the team fostering that, that, that mindset of success and progress. And so it's a little bit of, you know, you got to have the culture, but I found you can shape the culture based on who you're bringing into it faster than almost anything else. I think faster than trying to convince people to believe in something.
Like I found that if people are open to being convinced, keep them on the team. If they're like, no, I don't want to be part of this, then I think it's worth asking whether they should be there in the first place. And then you just pour the gasoline on the hiring process to bring the right people in.
You know, when people doubt, doubt this, I just say I was proven really wrong when they promoted Tim Cook to Apple CEO. I thought for sure that company would be in trouble. He's produced more shareholder value than it was ever possible, than I ever thought possible.
And as I thought about it, I'm like, what has he done? So first of all, he's an operations guy. And I thought he would just do operation, you know, make everything more chain oriented and better.
But clearly they have a value shop in their company that because he's worked there so long, he sees the value of that and he gives it freedom. And he lets it thrive and he lets it produce things like the earbuds, which are like a massive business unit all in and of themselves. You know, they just keep innovating and innovating and innovating, even though it's an operations guy running the business.
And I think that is such a powerful lesson of like, yes, Steve Jobs, no question, innovative, big thinker, etc. But here's an example of a company run by a guy in charge of chains who said, I'm going to make sure that innovation piece not only lives, but actually thrives in our organization. And that's what I try to try to share to people.
Like that's the opportunity. That is the opportunity. If you're a great chain thinker, how do you foster some of that value shop innovation within your organization?
You can't squash it. You know, you can't the minute it doesn't deliver a huge ROI that first year. Oh, it's done.
You know, we're killing it. You know, it's got to give how to give it room to breathe.
Mitchell: Yeah. So how do you find these clients? It's the uniqueness, the unicorn-ness of the types of businesses that you can help that would be attracted to what you want to do with the approach you want to take the cultural change you want to bring about the kinds of clients who want to embrace the type of work that my team does.
It's clear to me that these are exceedingly rare people. And I, how do you find them? How do you reach them?
They need us. You know, they don't know that this is out there.
Shawn: How do you find them? This is the reason why we rewrote the Norwegian business paper. I gave it to a couple people and to a person, they read like half of it.
They're like, I don't know, Shawn. So we rewrote it and we rewrote it in a way that I think is digestible to entrepreneurs and business owners. And there's a whole section on like sales and marketing and like how does a value shop approach sales and marketing because they want to grow versus a chain.
And it's really different. It is really, really different. Oftentimes chains are organized around scale, right?
They want to produce lots of things. So that means their marketing tends to orient towards that, right? They're buying digital media.
They're doing all kinds of stuff to get scale and get lots and lots and lots of customers. A value shop, if I got six new customers in a year, I'd be happy as a clam. That's like a total win for me because they're low volume, high value to us.
And so that means like I don't want to adopt the growth strategies that a chain uses, which are based around scale and small value at high volume. So I even think this is true for chain based industrial manufacturers. They fall victim to this kind of stuff all the time.
You know, they think like, let's do this huge scale thing. They might be selling a half million dollar thing. And it's like you need to really think hard as to what's the right way to get that into market.
And if you look in the paper, a lot of things we talk about is the power of word of mouth, the power of reputation, the power of your brand and what you do and you're excellent at. And so a lot of successful shops will tell me, well, we never do anything. We've just been around a long time.
So people send us business because they know about us. And that's legit, like length of life. It's a strategy.
But like if you want to change the status quo and you're like, Hey, I don't want to be a 10 person company or a 20 person. I want to be a 50 person company. Then you actually have to take action.
And usually that action is around customer education, centers of influence, finding places where people are at that share your values and mindset and providing value to them. I mean, honestly, there's a little self-serving here to writing that paper because I work with value shops. I work with businesses that think like a value shop.
So I want to articulate to them there's a different approach to marketing and sales. And here's what it is. And it's people centric.
It's super important on the human side because your employees touch your customer in a really big way. So you got to have employees that don't like quit every year. You know, like you got to have long term employer relationships, which means you've got to really foster those relationships with your employees.
And then there's a lot of like nurturing of business relationships as opposed to I'm going to sell you something. Right. Because the moment somebody is ready to embark and change, you don't know when that's going to happen.
But you have to be in their orbit and they have to have that brand recognition of you. They've got to know, Hey, I want to undergo digital transformation. I want to do something with our website different.
Who does that? And, you know, if they think of Mitchell, boom, you're great. So it's about being in their orbit in a meaningful way for long periods of time.
I mean, a long period. I have clients that hire us that I met them five and 10 years ago. And they're like, what you said stood out to me.
And I've kind of filed you away at my Rolodex. And ideally, I've stayed in touch with them. Things like LinkedIn, I think, are really good for that.
I think LinkedIn is probably the most underappreciated B2B sales tool out there right now. I would put tons of energy into that if I were in B2B marketing and sales.
Mitchell: Yeah, I can confirm that too. I've seen that as well. And it's really helpful with the idea that you're putting out there, which is make that human contact and then foster it over a channel like LinkedIn.
So keep it relevant. I met a great private equity investor a year ago, just randomly over dinner as part of my trip to Automate in Detroit. And really great guy.
And he sort of took the wind out of my sails by annoyance of equity people, a VC or private equity. So he's really got it together. And it's his money, his partner's money they're putting in.
And he has specialization. He has experience. He knows what he's doing.
And we met a year ago. And now we're doing a project. And this sort of opens up another part of the conversation, which is it matters who you talk to at the organization.
I mean, our day-to-day contacts are digital marketing managers at any given company. And they're outnumbered. There's like one or two of them at a lot of the businesses that we work with.
But they don't make the signing decision. They don't write the check. They don't decide to spend the money.
So that conversation has to be with the person who's going to do that. And furthermore, it's got to be with the person who's ready to get creative and look for new explosive value opportunities. And in some cases, I'm noticing that this is the private equity people who've acquired a business who say, well, this is an untapped opportunity because they haven't bothered to go digital yet.
So that's another part. But we were talking about LinkedIn and the usefulness of staying on people's radar and being sort of present in their orbit and how long it takes to convert. And I can definitely affirm that I've seen that.
Shawn: You know, the big change we've made along those lines is that for the longest time, I was the rainmaker in our company. And that's very common in value shops, you know, pure value shops, not chains with value shops within them, but like guys like you, guys like me, folks who do consulting or any kind of professional service. There's usually the founder, entrepreneur doing so much of that work.
And I realized, I don't know, maybe two or three years ago that I'm like, this is problematic for a lot of reasons. Like I can't take a vacation for among others. I get hit by a bus.
That's a real problem. We did some experiments. We placed a few bets.
We hired an outsourced salesperson for six months just to sort of see because we were very skeptical, but we're like, well, let's put some money on the table. Not so much that it'll kill us, but let's try it. We tried some digital stuff like advertising and so forth.
And none of those things worked. You know, those are things that might work in another type of business, but it just didn't work for us. And so what we started doing is talking to the team about like, how would you feel about doing business development?
And for a lot of employees, I was like, ah, I'm like, no, no, no, no, no. I'm not asking you to sell things. Don't convince people they need us.
I don't need you to do that. I just need you to build relationships. That's it.
That's it. That's my entire task is to build relationships. And we're going to maybe divide and conquer a little bit.
Why don't you take automation and maybe industrial stuff? And I'll take the built space, like construction oriented industries. And, you know, so we sort of divided up and then we found like centers of influence, which is why I'm going to automate and I'm going to speak there.
I was at a conference for architects and engineers recently, and I was a speaker there. So now we're all touching lots of people. And even if those there's about five employees who are doing this, even if those five employees are only 30% as effective as I am, that's still 150% of me.
So that's been a big transformation for us. And it's, it's not easy, but you asked about how do we get new customers? And I've come to realize that we need to take advantage of network effects.
We need to take advantage of Metcalfe's law, which is as you add connections, it grows geometrically. And that's one of the most important ideas I've ever come across. And so I'm getting other people in my organization to start to develop and nurture their networks too.
And now when we have business development meetings, it's like, Oh, you know that guy? Oh, I know that guy too. Oh, he cares about this or she cares about that.
And so now we're really building relationships in a more, in a bigger way, but not using any of those like traditional marketing strategies of paid AdWords or even SEO, which we used to be like page one of Google. And we don't even do any SEO anymore for better or for worse. We were like Kings of the King of Kings of the castle on that.
And I just realized it was becoming commoditized and going to become pay to play. So, so we're doubling down on, on relationships for sure. Yeah.
Mitchell: How much do you structure that? How much do you incentivize it? How much do you guide?
How much do you encourage your team to do that?
Shawn: I'm really lucky. I have a small team, right? We're like 11 people.
So super SEAL team six, like really tight. Everybody's very invested. We're really good at hiring people who are committed to the cause.
And I'll tell you this and who's ever listening. One of my secrets is we often hire children of entrepreneurs. Just kind of.
Interesting. Yeah. So even if they don't have parents that were entrepreneurs, what the characteristics are, are folks who are okay with uncertainty and ambiguity.
They're okay without having definitive roles and responsibilities. They tend to come from the humanities in terms of education. So they're good communicators.
So in terms of your question of KPIs and incentives and so forth, I'm always cognizant of the dolphins story when it comes to incentives, which is these trainers train these dolphins to go get trash out of a swimming pool. Like part of like a sea world type of thing. Right?
So the dolphins would go and grab the trash and they, they train them that they get a fish every time they brought them a piece of trash. Well, the dolphins figured out pretty quickly, Oh, piece of trash fish. And they would go and they would tear the trash in half and then they would break a piece.
So they get like, you see what I mean? They'd like tear the trash up so they would get more fish. And so you just have to remember whenever you're, especially financial incentives, you have to be careful about human nature.
Folks are always going to kind of look for the thing. So I try to hire people who have intrinsic motivation. Do they want to help the company succeed?
And I try to do that over pushing incentives onto them. There are people in our organization who will never be good at this thing. And I'm not asking them to do it.
Like our graphic designers, they're introverts. They are scared of groups. They're fantastic designers, but there will never be business development people.
That's okay. And I'm not going to like create some incentive scheme that penalizes them for being really bad at that type of stuff. But they are the ones who put together that white paper.
They're the ones who helped make that thing look really amazing and easy to understand. So they're contributing in their own way. And so it's just, it's more of a like, how are you contributing to the cause?
And then those who say, I really do want to help. And they're not good at it intuitively. We have meetings once a week and we teach them, okay, this is what you want to do.
When you go to a new meeting and you've never met anybody there before, your goal is to make one new friend. That's it. That's your only goal.
And then after that, follow up with them and then connect on LinkedIn. And so we're just slowly rolling them into it. And they're finding like, oh, this is really fun.
I enjoy it. And I find that when people like the thing they're doing, they give you 120%. But when they dread it, they'll give you like 30%.
And so let's find, let's make it engaging and good to do. And if I've done anything well, it is to hire people who are intrinsically motivated and like appreciate new opportunities. And that's a huge advantage that we have over these kind of artificial incentives that could put on things.
Mitchell: We did a project, I'll just not name any names at all, just to be careful. But we did a project about two years ago that went really well. It was led by a designer developer from the team who is a problem solver.
I mean, this person would, you would find them on your team because they're that type of thinker. And they formed such a bond and relationship with the client. And this client is basically, they're a think tank.
And they have a double role at like a global cosmetics manufacturing company. A name everybody knows. And these guys reached out to us.
And every conversation we've, they haven't hired us yet. Every conversation we've had, that client has joined the call. So not only did they refer us, but they joined the call to advocate for us.
The first call, they're like, we don't think there's a fit here. I don't think it looks good. A month later, they're like, can we talk again?
Because the guy that you formed a relationship who likes you so much, who's such a big fan of Soul Space, he won't shut up. So can we talk one more time? He joins the call every time he advocates for us.
And it was, I didn't have anything to do with it. I mean, I had an initial conversation. And then the person who works for me on the team who killed it, did such a great job, built such a bond and a relationship with this person that that person has kind of become a super refer or something like that.
There's so much bigger than we normally serve. But the power of that relationship is just astonishing.
Shawn: Yeah, that's a great story, man. You know what it triggers for me is this concept of the inverted funnel. So traditional sales and marketing is big funnel.
I'm making this sign with my hands. It's a big funnel. Throw lots of stuff in it.
Lots of garbage. Maybe some good stuff will filter down. And at the bottom of the funnel is your right fit customer.
That thinking, again, is very consumer marketing driven thinking, right? We're going to put ads on TV and the Super Bowl and everybody's going to see them. And then some percent are going to take action and buy our Coke product, whatever.
So that is terrible for our types of businesses, Mitchell. And so I have a client who had this aha moment, which is the inverted funnel, which is the idea of we want to be like a freaking laser beam and find people who really believe in the things we believe in and are passionate about it. And those people, when they're in an organization, will find other people who are like that and they will start to evangelize for us and they will expand the bottom of the funnel.
So now I'm like opening my hands up. So it's the exact opposite of like a normal marketing ideology. It's like you land and expand.
And that's a killer model for B2B, anything, even a chain. I think that's a great strategy. I know lots of industrial manufacturers who have good account managers who know how to do that in an organization.
They get a tiny foothold and then they build advocacy and friendship. And then that grows the business. It's totally different than how marketing is taught in colleges.
This is not taught in college, which is why so many marketers come out and they go to work for businesses like mine or yours and it's like they fail. And it's not their fault, but they've been taught top of funnel, big funnel, brand, Coca-Cola, kind of consumer marketing. And the B2B stuff is totally not taught.
It's not taught in college. Yeah. So that inverted funnel is a really cool idea.
If anybody's listening to this, like in terms of growing their market presence, whether they're a value shop or a chain or somewhere in between.
Mitchell: We used to get frustrated when we would do a great job for a client and our primary contact, as I mentioned a minute ago, was usually a marketing director of some kind, VP marketing, that type of person. Do a great job, such a great job that they get a better job somewhere else. And now we're fired.
Yeah. Well, they go to that job and then now the new marketing director is like, I don't know who you are. I like my friends.
I'm going to hire my friends. Goodbye. Like, whoa, that's not good.
But then again, it doesn't take too much time to realize that we became a virus. So that marketing director that we did a good job for, they go to another job and they need to do it again. Right?
So then we get brought along. So that funnel expands at the bottom. Yes.
The challenge is the thing you do, is it portable? It hasn't always been portable in Solspace's case. We've been specialized in specific web development platforms.
And we have only recently successfully started to get clients to say, when we ask them what we are, to say, oh, you guys are digital strategists. You're digital problem solvers. Okay.
That's good. That's a win. The last time we asked someone, they said, oh, you're the craft CMS specialists.
Shawn: Right.
Mitchell: And since I'm not using that at my new job, I don't need you even though you perform miracles for me.
Shawn: Yeah.
Mitchell: So the culture and also the fundamental thing you're doing in selling needs to be viral as well. It needs to be compatible. It needs to be able to propagate.
Shawn: Yeah. You know, it's interesting. What you just described there is the contrast of modularity versus integration.
So your old model was modular. We're the craft CMS guys. We're so specific to what we do.
We're within this narrow domain. And when you said, actually, now we're expanding, we're doing more kind of digital transformation. That's more of the vertical or highly integrated model.
And it changes, right? It changes who you hire. It changes how you operate.
It even changes how you articulate to your customer what it is you do. And I face this too. I used to sell to the marketers for 10 years.
The marketer was my customer. And now I don't sell to the marketer at all. I sell to the CEO.
I sell to the owner of the business. And the reason I do that is because I want to see across the whole business. And if I get marginalized into marketing and I can't talk about culture and I can't talk about new offerings and I can't talk about innovation, I'm totally hitched my wagon to that one person who the average tenure of a marketer is less than two years.
They are going to leave. They are going to leave. So I've said, I love the marketers.
They're great people. They're usually the more innovative forces. But I got to be talking to the owner slash CEO.
And that'll enable me to really do the kind of good work we want to do and not just do the thing that is thought of as marketing. I think your story is really, even though you were kind of stuck in a sort of narrow area, I think that that idea of forming a strong relationship and then that person goes elsewhere. I call it the benevolent virus.
I'm glad you used the word virus. It's the benevolent virus. Yeah, that's exactly right.
That works with engineers. It generally doesn't work with procurement people. Actually, if there's anybody you don't want to be selling to, it's usually procurement.
Well, that's a signal for me.
Mitchell: If you have procurement and I have to talk to them, then you're not a client. You're already in a space where I'm not interested because I can't win with you. I can't succeed.
I can't help you. No. You're in the wrong territory.
Well, Shawn, this was great. I feel like there's so much more I could learn by talking to you, but we got to end it at some point. Thank you for your time.
Where can people find you? Where can they get access to this white paper that I fell in love with?
Shawn: Best places. Find me on LinkedIn, Shawn Busse, BUSSE, Kinesis. Just shoot me a DM and I'm happy to send you a copy of the white paper.
We just put it out, so we don't have any kind of landing page yet. We're working on that kind of stuff. Best to just reach out to me and I'll send you a copy.
Mitchell: It's a masterclass on how to put a white paper together. Usually, these are garbage. Usually, they're just like, hey, can I get your email?
But this is good material, especially for the kinds of clients I serve and who my company is and the sorts of clients that you serve. It's a really valuable piece. It's well done.
Shawn: Thanks a lot. Really appreciate that.
Mitchell: Well, thanks again, Shawn. Thanks for joining. We'll get some show notes out there along with this podcast. Hopefully, we'll get some people coming into your LinkedIn and grab that white paper and start improving their businesses.
Shawn: Right on. Thanks, Mitchell. Thank you.
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