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How to scale a b2b services business
58 Plays10 months ago
Tyrone Croome-Carroll is a 3-time COO and accomplished people-centric leader, currently with Cadence (the leading language solutions provider to the global investment community).
In this episode of the First-time Founders Podcast, Tyrone shares what he learned leading multiple B2B information services businesses and explains why its important to build systems to support high performance teams in rapidly scaling environments.
Interested viewers can reach Tyrone via https://www.linkedin.com/in/tyronecc/ and Rob (https://www.linkedin.com/in/robertliddiard/) at Rob@mission-group.co.uk (or to book some free time with Rob, visit https://www.eosworldwide.com/rob-liddiard). Alternatively, if you’d prefer Rob to send you a free copy of Traction (the book by Gino Wickman which explains The Entrepreneurial Operating System) just complete the form here: https://www.eosworldwide.com/traction-giveaway?implementer_email=rob.liddiard@eosworldwide.com
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Transcript
Introduction to First Time Founders Podcast
00:00:01
Speaker
Hello, welcome to another episode of the First Time Founders Podcast, the show where we talk about how to start a business from nothing and grow it into something meaningful. I'm Rob Lydiard. I was the co-founder, CEO of a software business called Yapster that I founded in 2015 and was acquired at the end of 2022. I'm now a professional implementer of the entrepreneurial operating system or EOS, which means I work with entrepreneurial leadership teams to just help them get more of what they want from their business.
Meet Rob Lydiard and Tyrone Carroll
00:00:25
Speaker
That's my day job, but in my spare time, I love talking to entrepreneurs and entrepreneurial people about the first time founder journey and what those of us have done it learned along the way. Today I'm speaking with Tyrone Croom Carroll. He's a long time COO in the services space, typically tech enabled services. So what I mean by that are organizations that scale with people, they scale revenue with people.
00:00:50
Speaker
rather than just scale revenue with users, like the classic sort of VC backed SaaS product company.
Challenges of Starting with Little Capital
00:00:56
Speaker
It's an interesting space because for a lot of founders, particularly professional founders that are coming out of banks, law firms, accounting practices, and all sorts of other consultancies, um a lot of founders do come out from those sort of backgrounds. ah Really, really good businesses to start in this space because you typically don't need a ton of investor capital to get going. Um, but just because you're not under pressure from investors to scale the business doesn't mean that you don't want to grow fast. And when you grow fast, you typically, if you've never operated before, well, definitely if you've never operated it before, you'll likely make operating mistakes. Tyrone specializes in partnering with founders that are going on that scale up journey for a services business to help them get to where they're trying to get to with, uh, less organizational whiplash and pain.
00:01:45
Speaker
So if you're thinking about investing in or starting or joining a tech enabled services business, this is the episode for you. So without further ado, I give you Tyrone Crew Carroll.
Understanding Operations in Tech-Enabled Services
00:01:58
Speaker
welcome to the first time panels podcast thank you for doing this my friend thank you very much rob great to be here So today we're going to talk about operations specifically in the context of founding and scaling tech enabled professional services. Can you give keep people a quick primer on on what that means? Like I don't know if you want to dance through your career maybe from being um ah like perhaps alpha sites, but but just help people understand the world that you come from and the gigs that you've kind of done in this tech enabled professional services world. Sure. I've never really thought about the the definition of tech-enabled professional services in great detail, but it's basically um people are the most important part of the business. And revenue generally scales with people. um So the service is being provided by by people. And so you know if you want to provide more services, you need to add more more people. And then all the complexities that kind of come with ah with that, you know building teams. And um a lot of time the
00:02:54
Speaker
real gains in those businesses come from making people more productive or making their jobs easier. ah So essentially, you know, the tech enablement is to enable the people rather than say, to build, you know, a product that, you know, people are interacting with, that there are no people on the back end, right? um So different from a SaaS business and in that sense. um So I don't know if that suffices as ah as a kind of a yeah definition to like what we're what we're trying to do, but
Tyrone's Entrepreneurial Journey
00:03:21
Speaker
yeah. um And me, I guess I always wanted to be an entrepreneur. So I kind of got started, I suppose, as most people too, finding a few businesses not really knowing much what I was doing. Way back when I had a gold import jewelry business from the Middle East. And I had a staff training business for luxury events. Those were really fun. But
00:03:51
Speaker
We had the financial crisis in Ireland and both of those went but you know off a cliff and the margins got got compressed and they weren't much fun to run anymore. um So I moved to to London and I was kind of looking for proven founders to apprentice with essentially. um And so I found Max and Andrew at AlphaSides. They both had their kind of consulting career. They'd done their Stanford and MBA. they had started and exited businesses before. Andrew had listed his on the AEM exchange. Max had sold his to Microsoft. And I just thought, tick, tick, tick, tick. These guys look like they know what they're doing. um you know I'll ah'll jump on board with this business. quite god the sense of you know I didn't really know what ah what Expert Networks was about at the at
Expansion of AlphaSites
00:04:34
Speaker
the time. And I didn't know what I was in for. It was a business of about 35 people or so. um And I think when I left that business, it was sort of 800 or 900 people or something like that.
00:04:44
Speaker
um So it was a real journey, about a year and a half into that journey. I always knew I wanted to live and work in London, New York and Hong Kong before I was 30. It was just kind of an ambition of mine. I thought all the interesting people are there and all the all the fun stuff happens there. So best get myself there in whatever way I can. um So Max one day sent an email saying, we want to go to Asia, who wants to do it? I thought it'd be really competitive and everybody would be battling over it. really only me and then one other guy stuck in our hands. but Three months later, I was sitting in in Hong Kong thinking, but did i what did I sign myself up for? In a little sweaty service office. And I didn't have the foresight to sort of get them to send me there first. So I could check the place out or anything like that. I just sort of literally just got there.
00:05:32
Speaker
got slingshotted out there. um And then I spent, I guess, the next sort of seven or so years building out alpha sites. So we did um Hong Kong, Seoul, ah Shanghai, and Tokyo. and We got the business up to about, ah we had 50 staff and we had about 15 million in annual revenue. what What was the service exactly that people would be buying for that 15 million? Yeah, it was an input to say, consulting. So the clients were management consultancy firms like McKinsey Bain, BCG, um big private equity firms, some hedge funds, etc. and some corporates. So those guys were generally when they were working on a project to make an acquisition, um or they were trying to build a sort of go to market strategy, or, um you know, they're trying to understand a piece of technology, they would generally come and they'd want to speak to experts.
00:06:29
Speaker
And so we would find the experts for them and match them to match them to the clients. So they generally but on a very fast, um you know, timeline. So they generally come and say, Look, I need x y z and you know, within 24 hours, we hopefully connect them on the phone with the people that they ah that they wanted to speak to. him And they use that in as part of their their insights or you know, to sort of um figure out what to bid on the various different deals or you know, go or no go on ah on an acquisition or something like that. Wow. And it ended up being quite a big business, right? Like as you were there. It was a small, I mean, it was a small industry to, I mean, an industry that was growing very, very quickly. I think probably when I joined, there were maybe 20 players and now there's probably about 150 to 200 players. So, and now it's there's probably about a 2 million revenue,
00:07:16
Speaker
opportunity, I suppose. um it Quite niche at the time. um but And the business um the business that I joined AlphaSites was probably, I don't know, exactly 10 or so years late, let's say, to the to the space. um But I think what was one of the really um impressive things was that they just executed, you know, really, really, really well consistently over time.
Scaling Challenges and Solutions
00:07:42
Speaker
And that brought them from, you know, there were there were players that were were were much, much larger than us. And, you know, AlphaSight is probably now the second biggest player in the in the space at this at this point. um So that was just a real masterclass in kind of scaling businesses around ah around people.
00:07:59
Speaker
So and a lots of ah lots of room to practice and and sort of make ah make mistakes. um Often didn't feel too comfortable at the time. But yeah, that's ah I guess that's what it's all all about. Is that where you sort of discovered a love of of operations? um I think I discovered the love of scaling and systems around people. um So you know that was a It was a really people-driven business. so probably we had
00:08:30
Speaker
you know ah I used to think about the number, 50% is sort of the attrition I used to think of um annually. um and That would be 30% who would you know not work out or leave themselves. and then 20% you would sort of be promoted to to the next to the next level. But in terms of the people actually you know deliver doing most of the delivery on the service for the clients, sort of driving revenue, um I'd be losing 50% of the people out of that pool every year, right? And we'd be growing 100%, right? So it was kind of like, if you've got a standing team of 100 people, you're going to lose
00:09:04
Speaker
50 of them, so you get a higher 50, but then you want to grow you know to to you know whatever, what, 200, so you get a higher 150 people on 100, which is kind of like a... So that's that's you know and i'veve sort of turned out always hyperscaling. And I think, um I guess when I sort of transitioned into kind of doing interim roles in consulting and helping scale-ups I have you know ah been lucky to work with some great businesses, um but um i think people always I always always find people underestimate you know the exponential situation that happens there. right you know How difficult that is to do to actually put 150 people on 100. And then you know when you look at that, you know just to talk about one thing like recruiting, if you look at that backwards, you know if you've got 150 people that you need to do,
00:09:50
Speaker
Okay, well, how many final round interviews is that? you know how many What's your percentage of acceptances you're getting? you know Okay, well, how many from you know the round before final to final? you know And it just goes, boom, like that. And so how many applications do you need? um And I think that business alpha sites in the States was um it got on some list of, I think it was 17th most ah applied for a company in the United States or something like that at at some point. um And on that list is like Google, McKinsey, et cetera. So it was just, a um you and Because there was so much going on around you know onboarding people and you know ah moving people through through that that process, um I think that's why um I guess i you know picked up a lot around essentially you know building systems around people and kind of scaling. so um yeah that's a i suppose yeah Definitely where I got my ah ah cut my teeth is I would say probably on ah on this sort of thing.
00:10:43
Speaker
Well, I know you then you've then been Chief Operating Officer twice since, haven't you, Jordan? Of course, we found a prosapien who introduced us. ah you Over that time, so now coming sort of up to where you are now, you've found that you've you've arrived at a general kind of operating philosophy, like when one of these founders talks to you, how how does that generally go? Like what what yeah what's the basis? Are they looking for something different quite often each time or are they generally looking for the same sort of thing and you're really qualifying them to see if what you do is a fit for what for what they need? um
00:11:14
Speaker
i I still, ah I basically, I probably haven't left it behind forever, but I guess I i say to most of the people that i I work with, I'm not, I'm not a zero to one guy. I'm a 50 to 500 guy, right? um And so I would like to find a business at some point, but I find kind of delivering and scaling on the rails are really satisfying. yeah and so If they've just got a bit of product market fit and they're just you know trying to figure it out, or um if they've got some product market fit and then they've gone into they've've sort of grown a bit and then things have got a bit muddled and confused and the strategy is not so clear, um then these are kind of the situations that I generally have done.
00:11:59
Speaker
pretty well, pretty well. And so um and a lot of that is, I mean, what's the operate, what's the kind of philosophy? um So yeah, I look for businesses that ah have that because I think that's where I do best. um Just sort of clarifying and then kind of putting structure and you know, systems around around some of those things.
Role of the COO: Visionary vs Integrator
00:12:21
Speaker
um And then yeah, I think I think also the COO thing is a really weird role, which I didn't really figure out for quite some some time.
00:12:33
Speaker
um It's a really hard one to define because you know if you're sort of head of sales, it's kind of you know though those types of people look the same in many different organizations in terms of what they what they do. um But the role of a COO is an odd one because essentially you're you're basically very, very industry dependent. So you know if it's highly regulated, you've got to deal with a lot of stuff like that. um you know if it's ah I've got lots of people, you've got to deal with things like that. you know It's got a lot of technology, you've got to deal with things like that. Lots of suppliers, then you know et cetera, lots of legal issues. you know So the role, depending on what industry you're in, looks really, really different. um And then also, you're kind of the the other jigsaw puzzle to whatever CEO you get. um So I think the thing to being successful as a COO is make sure you choose the right CEO, because you might not be a very good complement to each other in that sense.
00:13:26
Speaker
oh yeah i've a um Yeah, and and that that becomes really, really, really apparent. so um And, so you know, yeah, in the last couple of roles ah that I've had, I've had really great people to to work with. But, you know, I would say ah if you've got your kind of classic, you know, founder who's running around the place, you know, just constantly throwing ideas and grenades into the business. um And, you know, you've got a ah business that has lots of people in it. um And, you know, you're trying to kind of keep that
00:13:57
Speaker
ship going in ah in kind of one one direction, and someone's over the helm just kind of going going like this, you know, like, oh, shiny thing over here and shiny thing over there, then, um you know, your job is kind of in a way to sort of insulate people from that, and sort of filter it through, you know, the right amount of it, and sort of maybe bounce a few of those ideas back to them and say, like, well, let's let's test that a little bit, but you don't need to expose everybody else to it to that, you know, all the time, because, you know, I think most people are looking for, you know, sort of a ah calm day where they can kind of focus and get there and get their stuff done, right? so A lot of, I would say that's a big consideration for sure. It's so true. I'm laughing because of course, in the world I've been now, we broadly put kind of executives into two camps, visionaries or integrators. and it's the I've got pictures of a whole bunch of my friends coming to mind as you describe that founder caricature. The reason I'm so fascinated with what you've done is I started my career as a as a lawyer in professional services. Like you, I always wanted to be an entrepreneur. I didn't have the brains, I guess, that like, i don't know why I don't know why it didn't occur to me to to just strap into the legal sector a little bit longer and then start a services business having acquired some like some client following and some practicing capability. I was quite a junior lawyer when I left.
00:15:11
Speaker
I've actually sit and then I went into software and learned the hard way and learned that industry and now I'm a software guy, but I'm sure my entrepreneurial journey would have gone faster, bigger had I stayed in professional services first and gone into software laterally. Well, it wasn't very popular. um It's true. you know And now it's becoming more popular because they're generally ah businesses that bootstrap well. Basically go go cash flow negative for you know raise a bunch of money go cash flow negative burn burn burn burn burn burn burn burn and then hopefully you get product back of it and
00:15:42
Speaker
boom, you know everybody buys your your product. right you know This is the kind of SaaS saas model. But um you know the professional services model, you can you can kind of make money from from day one. And so you don't need to take on a lot of money. it So it's not that interesting to investors. So all like all the sort of guys, VC is popping up on LinkedIn. you know They're not talking about these types of businesses or you know because they're not they're not but not attractive to them. right it doesn't mean theres But they make up you know the majority of the businesses that you know exist around the place of manufacturing, professional services, et cetera. you know These SaaS businesses, okay, there are much, much more of of them now. but um you know and Over time, I think they've become much more popular now because now obviously rates has changed, et cetera, and now we're into the world of cashflow is king. right and so These businesses actually have cashflow, so now a lot of people are coming back around and looking at them and saying, like oh okay, well these might be nice interesting things to supply.
00:16:33
Speaker
we you know what's in What's interesting is even had I had the sense to start my entrepreneurial journey and professional services like doing what I know, I still didn't have any operational awareness until years and years and years of pain and then eventually discovering the entrepreneurial operating system. So what I'm interested in is whether it's a lawyer, expert, a network, fractional CFO, finance services, information security risk, doesn't matter, right? I'm putting them all in this bucket of this area where you've kind of emerged as a specialist operational leader. If you've got somebody that's a fairly mad subject matter expert around delivering the service, but has all of the quirks that you described a moment ago.
Analyzing Business Operations
00:17:14
Speaker
What would you say the average kind of first 90 days might look like if you're a COO coming in to try and add some value with ah with a founder that meets that caricature in this services world? I know you can't generalize, but let's just have some fun. yeah i mean i'll take it I'll take a step back because I have to admit I haven't read your your your your piece, right, on essentially the um the entrepreneurial, how what did you call it? All good. Entrepreneurial operating system. Just to be clear, like get also it doesn't matter. The reason the EOS spoke so much to me is because I'm not a great operator and so EOS allowed yeah it allowed me to lean on
00:17:55
Speaker
I didn't acquire the experience you did the hard way so this book kind of like shortcutted my journey that i think for me i mean um so that was my not not necessarily my point i just haven't read that once because i'm but i'm fascinated by these things and because i saw the value of them um and i got you know and i There were books that for me were transformational too. you know and and I think there were you know people who introduced things to me that were were transformational for for me too. and so um One that was enormous for me was um
00:18:26
Speaker
There's a group called Gala, which I'm sure you know. yeah um And ah there was some stuff in, I think their latest thing is called Scaling Up or something or something like that. um but yeah And then there was also a book called The Rockefeller Habits, um yes which I don't know if you've come across as kind an old one. I think it's been re rebranded and relaunched at some at some point. Um, and so, uh, yeah, I learned a lot on, uh, you know, I, I'm a type of person who likes to see the structure and things. And if I can see the structure and understand the system of what's going on, um, then it makes a lot of sense to me and I can really engage with it. But if I, but else, but if I can't figure out what's going on, then, then I find it really unsatisfactory because
00:19:06
Speaker
I don't know if I'm pushing here, if something's going to happen over over here. So um you know I think ah that's what I'm always looking for is like, what is the pattern basically? in the how does So even if the founders created a totally accidental operating yeah culture and system, you're initially trying to understand how does this machine work? So my first question is always, to that yeah how does this machine work? And I look at most a lot of things like like that as well. so um And then I think you knowre youre it's good if you're in ah a business that has a lot of throughput, because then you just get more feedback, and then you're able to figure that out faster. If you don't if you only have like lots of very big deals, and you know they only come around every so often, you you don't get a lot of feedback to test out a lot of different things. um So high throughput businesses, I would say that's another pattern of a thing that I look for when I kind of go into businesses as a COO. I want businesses to have ah repeat interactions, a lot of a lot of it, so that you can course correct you know as you as you kind of go. right
00:20:02
Speaker
um So, you know, I wouldn't be in the, yeah. Anyway, that's certainly something that i that i that I look for. And then the space that I was in and where I kind of cut my teeth, that's what I learned how to deal with. And so, you know, I think as you niche down a little bit, as you kind of go further in your career, you you understand that the areas where you have you know a spike, right? For sure. So on ah the first 90 days, I mean, the first thing that I always start with is I sit down with the management team or the CEO and I say, look, um tell me in your own words, what it is that you think you're trying to doally and um yeah do, know, through that. And, you know, the exercise then is basically just listen to to them and then compare it. compare Like a whole afternoon.
00:20:46
Speaker
Yeah, well, I mean, hopefully they have it in, you know, a sentence, a paragraph and a few paragraphs. I don't know, they don't have that. Then they're kind of, okay, we need to kind of go back to the drawing board and talk a little bit more about like, you know, I don't think you know what you're trying to do. um is it which And that can be a problem sometimes too. right um But usually in the stage that I'm going in at, um it's usually they've had some success. And then their success is kind of like overwhelming them a little a little bit, um as so as I said, 50 to 500. And there are these and you've probably looked at this as well, there are these kind of valleys of death, right for businesses. um And they all there's a pattern to it, right? They all tend to happen at different different points. And you know, there's been lots of studies around that about, you know, crisis of leadership, crisis, you know, etc, etc, etc, right. And, um you know, they come at
00:21:32
Speaker
Revenue sizes they come a team team structure sizes and that's because of things like you know as you try to put in a management management layer you know you get more just the see the leader gets more dislocated from the customer and what's going on at the ground level and so things start to go a little bit crazier and two levels of management you know so it's sort of he said she said you know whatever and so it just gets more out of whack and so you know there are these just points where things start to break down i would say another major one is As an entrepreneur your your real role is basically to know kind of take on more and do sort of do more up until a point and then it basically becomes sort of reducing right um and essentially delegating. right and If you become in in any way more successful, you know running a business more than 10 million or something, 5 million or something like that, you know your job is basically
00:22:21
Speaker
giving stuff away and finding lieutenants to basically take on different parts of the business as you grow. And so for a lot of founders who've been in the mode up until that point, everything about their success has been basically being able to learn a new skill and kind of do something new. And so that's really, really hard for them to kind of like let that stuff go. And that's why then a lot of times they come back and start meddling in the business in those particular areas. And then they undermine whatever lieutenants they put in there And then that person gets pissed off and then they leave. And so, you know, you're just trying to, a lot of the thing is just trying to sort of stop a lot of things happening. But in terms of the first 90 days thing, yeah, first thing is talk to the people and just say, like, what are you trying to actually achieve here? And then look at what they've got in place. And then evaluate, like, are those systems, are those people, are those clients going to deliver what you say you want to do?
00:23:20
Speaker
And you find so often that it just doesn't. And it might have at the beginning, but then it kind of like got out of shape a little bit. And they've taken on a whole long tail of clients that are sort of, they're forcing them to sort of like do all these sorts of things, but like they're saying they want to serve, you know, enterprise clients. And then they're, they're, they've got all these sort of, you know, clients that are taking up 60% of their account manager's time or something like that. Right. Um, so just that question at the beginning is, is kind of really clarifying for me. Um, And then I think the next step is, all right, um like is it working? So like can you can you show me that what you say you're trying to do um you know and and the kind of the product market fit that you you have? Can you show me like where that's actually coming out in the business and sort of in the in the numbers, even if it's not the majority of what's going on here?
00:24:12
Speaker
um And then i'll then I'll go and talk to all the various different sort of you know lieutenants in the in the business and just get a sense of what they think is going on, um you know what their experiences of being in the business and you know how you know how ah probably what they thought they were getting into is quite different from what what's what's going on now. you know Some of them are very excited. Some of them are a bit jaded. um you know usually
00:24:43
Speaker
I think a big big part of it is trust building at the beginning as well. So I think you come in, I come in externally and I used to do much shorter term gigs, interim roles and um you know, I used to come in and kind of make some recommendations and. I think people are very wary of that because it's sort of like, okay, I've ever not tell that guy anything because you know he's not going to be around for very long and then you know he's going to disappear often. Some things are going to happen that I might not have sort of much control over and I might regret saying those things. I used to not find that very satisfactory and um I started essentially, that's why I started um you know staying for a year, a year and a half.
00:25:20
Speaker
um to to actually implement and kind of take on and run teams to try and implement the change in the suggestions that I had i'd made. um And I think a big part of that is is trust building ah with people, because if you don't do that, they're not going to tell you um what's actually wrong in the business and most the other times the people at the lower levels in the business, state they understand what the problems are.
Building Trust and Managing Expectations
00:25:44
Speaker
They just have said them five times and then no one's listening, so they stop saying them, um or you know or they're afraid to say them for for whatever reason, or they don't think that they've listened to, or you
00:25:53
Speaker
whatever whatever is kind of a um you know or they don't know how to express that problem in a way that someone else is going to digest properly. um So yeah, a big part is then trust building with with people who are connected to what's going on at the sort of ground level. um And then, you know, I will start looking at, I'll generally try to relieve some of the, like in in people-driven businesses, for for me, I think the the managers are the key um because they're that connection layer between, you know, where you're trying to go and translating that to to people on the ground.
00:26:29
Speaker
um And if your managers are constantly overwhelmed and swamped, then it's really hard to ask them to do anything else or to change behaviors because they're just trying to battle everything that's sort of coming at them every every day. um So a lot of the first types of things that I'll try and engage in will be around improving manager quality of life. Um, so, you know, can I, can we focus, can we, you know, direct the team to automate something, which is taking them a lot of, a lot of time, a process, uh, or something like that, just can give them back 10% of time. And now I can say to them, okay, well, now I'd like you to, now you've got a breathe breathing space and like, I'd like you to engage in in this, right? Um, so yeah, I think, uh, a big bit for me is, uh, the beginning is kind of. Emergency relief stuff, basically, uh, you know, like what can we, um,
00:27:18
Speaker
you know, where can we do something that's going to make a lot of impact that's going to um give us kind of like compounding returns. And I think through managers is one of the places you can get the best um kind of like compounding returns, right? Cause they affect, you know, five, six people each, right? And in that sense, it's, yeah, it's, it's, it's mega, like it's, um, It's so interesting that once you, because that is exactly what I was thinking about, like asking back in that once you've created some organizational capacity, you obviously then are able to do some new things without asking the shareholders to put a ton more money in for your transformation. But still, do you quite often find, or when you're talking to other sort of COO types that are wrestling with other founders, just to kind of not make the sound that we're talking about, founders that you've worked with or you're linked in necessarily, sure but just dealing with founders generally,
00:28:10
Speaker
How do you set the expectations so that they're sensible? Because you know like you you might carve back some some capacity by getting your manners more effective. You might get some additional capacity because there's capital available for you to deploy. I'm assuming quite often, though, there still isn't enough organizational capacity to s square that with the founders' vision and dream. Would you talk to people a little bit about like how one deals with founder expectations? Recognizing a lot of the people listening are probably those founders with inflated expectations. I think as a founder's job is to be unreasonable. So I think you don't want to suppress that in them. and You don't want to make them ashamed of that or you know make them feel stupid or anything anything like that. so um you know and I'm definitely a ah dreamer as well and I like to you know
00:29:00
Speaker
get in the room and you know get excited with the founder about about what they're what they're trying to achieve. And and you know i don't again, another thing I look for is i don't really I want to join businesses that I think can go somewhere. And so the work can make a significant difference and the business can really make a transition. And so um yeah, I get really excited about that about that too. um I think they're always going to be in a bit unreasonable. I generally talk to them very directly about it. you know I will talk to them about their strengths and their weaknesses, and I'll say, look, you're not very good at that. you know and then I think sometimes they are very accepting of that, and other times they need some data basically to to to show that. and and like you know you You'd be saying things like, look, the last you know these people you've hired into the business,
00:29:46
Speaker
they're not very good fits, or they're not very good at what you hired them to do, right? Like, you know, your judgment of people is very poor. um Like, you know, you this you see this thing happening again and again, and I will say, you know, and I think, ah depending on the person you get, but most founders are pretty practical people. And they're they usually really, they love that they're really usually because they like feedback, and there's a lot of people don't give it straight to them. So um I think, ah yeah, I think ah telling people really directly. But I but i think this problem you're you're talking about specifically is, um ah well, as I see it, there's always this tension between, if I was going to want, as I found it,
00:30:28
Speaker
They're really sensitive to lots of different things. um you know So one piece of customer feedback or you know one sort of missed deadline or you know one person who they bumped into and always said whatever to them. And sometimes then that'll they'll go off on that and it'll be you know something that'll they'll dive into and then they'll you know go down and grab a few people better shirts or whatever. you know digitally, not physically, yeah in most cases. um But ah you know what, so a lot of the time, I think, for me, I'm asking for patience from them. And I'm saying, I'm asking for focus. And I've got to explain to them that, like, I definitely believe
00:31:08
Speaker
If you try and execute on everything at the same time, it's it's going to be weaker, right? Because you only have, you know, 10 points of strength, right? And so, you know, if you just try to apply that to 10 things, you're going to get a one in terms of momentum on everything, right? um But actually, if you attack things, um you know, with, you know, five points of strength on two things, right, you're going to see massive progress on those things. um And if those are things that give you kind of compounding, you know, ah space on other stuff, then you can basically take, okay, now I've got 12 points, I can go do in six and six on two more and keep going like that, right? And so you're kind of asking founders like, look, trust me. um And I do ask for a lot lot of trust from them. And then hopefully you can prove you one or two things that make a big difference. um And then and then you get a bit more space from them. And then they'll let you a bit more rain, basically, to go tinker with other things in their in their business. um But
00:31:59
Speaker
Yeah, I think it's it's constantly um trying to kind of say, well, look, I know you see bad things happening here. um But just bear with it. It's like we're going to just have to kind of bite our tongues a little bit and just let it let it go. Because once we fix this, then our ability to fix that is going to be way, way, way, way better. um So I think that was kind of the tension as as I see it, another question a you Yeah, it's interesting. So to summarize the your If you're a founder listening to this and you're trying to fix operations, you've got an operational leader coming in, the test is, will this person be straight with you is is key. And then do you trust them enough to be able to allow them to the the time and the space
00:32:44
Speaker
to deliver and I guess you add those two things together and if your expectations are too high because you've over promised your investors or something, I guess that's where we have a full and frank frank conversation between CEO and COO about what needs to happen, right? If even with absolutely elite operational performance and some patience of the CEO, you just can't get to the promised lands that the the next funding is dependent upon, then you just got to stare into that and figure it out, right? Is that is that fair? I think take make it make a difference because the investor situation is usually different um between, say, SaaS companies and bootstrapped professional services or tech enabled professional services businesses. Good point.
00:33:29
Speaker
right so like you can kind of um you know If you're not generating revenue and you've got a big burn and you know the conversation with your investors is different, right or like you know you're generating a little bit of revenue but your burn is really high, right like you know that is I understand that's ah that's a completely different kind of conversation. You usually don't get into that situation in these types of businesses. um There are there have been in the space that i've been in that you know and i would distinguish between the ones that kind of did the pc approach you know raise quite a bit of money i tried to build a kind of very technology driven product um and then the ones that basically did bootstrap service businesses and then try to build technology and with the funding that they generated themselves um so you're kind of
00:34:14
Speaker
ah Your conversations with investors in my experience are different. um you know yeah Usually your conversations with different kind of investors and your conversation with these these types of investors is like, we're not generating enough growth is kind of the the conversation. or you know Yeah, that's certainly how i've ah i've I've seen it. Rather than like, um you know, we're going to hit the wall at some point and basically like, you know, crunch time, let's start ripping things out and throwing them off the boat, you know, kind of a situation. where which Which brings you back to this point of patience, right? Because it's not it's not that the thing's going to blow up, it's just that it's going to get to the destination on a different time horizon. Yeah, exactly. And it can it can be like, okay, we're like on this trajectory and like, you know, things will start to come up like that. You know, I think, ah yeah, it
00:34:58
Speaker
that's the way I've seen it it sort of go. um Or, you know, we're we're growing, it's not, it's not going great. But like, you know, it starts, you know, it starts compounding then. um And so, um you know, I've been in ones that are going like this. And they know, it's kind of like, okay, well, like, we're still going down. But like, you know, we need to be calm in the situation and do the things you have faith that the things we're doing are going to bring it right again. And if we panic, and just start like, ripping everything out then then we're definitely going down um and so um yeah i see but i but i think the investors are they have a slightly different mindset in those two two different situations cuz,
00:35:35
Speaker
um Yeah, i think i don't I don't know as much as about investors who are are kind of in that sort of heavy PC model that is focused on fast businesses. But it's such a good way to end. I know we're coming up to the time you got allocated. buts For founders listening to this, the reason that I'm so excited about the space that you occupy is because it has all of the same vigor and many of the same operational challenges of scaling some of these software businesses. yeah But from a founder perspective and creating something you're proud of that transforms your life, your family's life, the people that work with you,
00:36:06
Speaker
The risk profile is just different, right? It can be different. And so I really hope people receive that and and and and understand why this is exciting, despite what they might read from VC blogs. Tyrone, are you happy for me to include like your LinkedIn in the show notes? Yeah, no, absolutely. What type of people are you generally generally interested in in in in chattting in chatting with, like all comers or particular types? ah All-commerce, definitely. i mean I think in my career, I've come from... and My background was in you know management, sort of a information systems and statistics. such as It was much more it was kind of more technical and techy-driven. Then I went into a very, very people-centric thing. and Then I've come back towards sort of more technology-driven businesses. so All-commerce, definitely, have are interested to interesting to me. But people are passionate about systems.
00:36:57
Speaker
um you know and and kind of like seeing the patterns and things and then you know building systems around that. I think that's that's the most fascinating thing for for me and I geek out on that. on that But I would say as a note as a message of like encouragement to people who are thinking about the point you're making about you know should I start a business? and even though this isn't the most sexy kind of, ah you know, portrayed space to to people. um You're absolutely right. You know, these are businesses that you can make money from day one. ah You know, and generally, you can scale the business
00:37:28
Speaker
like to ah to a reasonable sized team um before you start having bigger problems. um And then, you know, those bigger problems are just about finding the right people, you know, and getting them into your business and and getting them to help you and then sort of delegating, you know, more and more things away. So, um you know, you can you can build a ah lifestyle startup business, um you know, ah fairly, you know, easily with low risk in these in these types of businesses. So I definitely encourage people to to to do it.