Speaker 1 00:00:02 Welcome to the Growth Elevated Leadership podcast with Julian Castelli. Each week, we talk with senior tech leaders to explore stories and insights about the challenges involved with growing technology companies. We hope that these stories can help you become a better leader and help you navigate your own growth journey. Speaker 2 00:00:27 Hello everybody. This is Julian Castelli. I'm the host of the Growth Elevated Leadership podcast, where each week I talk with inspirational entrepreneurs and leaders in the tech industry. Past guests have included CEOs and CXOs of great companies like Work Front, CHG, Healthcare Systems In Moment, Vox, Pop me, the San Francisco 40 Niners, and many more. This episode is brought to you by growth. Elevated growth elevated as a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learnings in an effort to become better leaders. We do this through educational programs like this podcast, as well as our annual Tech and Ski summit, which happens to take place in beautiful Park City, Utah. So if you're a skier and you like talking about business and growth in tech, check us out at Growth Elevated. Speaker 2 00:01:17 Com. Today I'm I'm excited to bring bring to the podcast Dave Taylor. Dave is the co CEO and co-founder of Data path a managed IT and managed security company. That Data Path is is headquartered in North Carolina, Northern California, and it has about 80 team members throughout the US and has made the Inc fastest growth company list eight times. David lives in Park City, Utah with his wife and four awesome kids, and that's where I had the chance to meet up with them. Please welcome Dave Dave Stadler to our podcast. Speaker 3 00:01:57 Hi, Dave. Speaker 4 00:01:59 Hey. Thanks, Julie. Thanks for having me. Speaker 2 00:02:02 Hey. I'm excited to talk to you today. So you've been. You've been, You've been an entrepreneur. and a, tech leader for over 20 years at Data Path. Speaker 4 00:02:14 I have. Yeah. No, since 2005. So it seems like it's going fast. Go ahead. Speaker 2 00:02:21 Tell us a little bit about what data path does. Speaker 4 00:02:25 Yeah, I mean, there's some it up, depths. You know, Dave has managed it service providers. Speaker 4 00:02:30 So we manage infrastructure and security for large organizations, for government, education, finance. and, you know, most recently over the last couple of years, gotten into health care. Speaker 2 00:02:41 So and so what's, what's the typical profile of a company? that would be your customer. And walk me through their problem and their alternatives and how they find data path and why they choose data path. Speaker 4 00:02:56 Yeah, absolutely. You know, for us, you know, over the years, it's, you know, we've transitioned as far as, you know, the type of customer kind of gone up the stack. the customers we serve now, you know, have pretty good size IT departments usually, you know, kind of in that range of ten to, you know, sometimes upwards of 50 plus people in there on their IT team. Okay. So we come in and just kind of help to, to supplement them. and we manage, you know, essentially their private cloud forum, their, you know, their infrastructure and we do the monitoring and response to security incidents. Speaker 4 00:03:29 you know, in the finance space, that kind of ranges from, you know, probably somewhere around, you know, 100 team members upwards to, you know, thousands. and then, you know, kind of government education space, you can go as high as 20, 30,000 users. so it's definitely. Speaker 2 00:03:44 Employees that are relying on the IT infrastructure that you're helping to. Yeah. That's all the users. Right. Speaker 4 00:03:49 So we're yeah we're okay. Speaker 2 00:03:50 So you're working with enterprise customers that you know they've got enough it needs. They've already got ten, 20, 30 people working, but they need more help. And you help them scale more efficiently by supplementing their team. Or do you sometimes take over the whole IT infrastructure? Speaker 4 00:04:06 Yeah, we generally are kind of taking over the infrastructure for them and working with their team directly, which is worked out great. So we kind of come in and just kind of become a part of their team. And really some of the advantages, you know, really for the departments is they're getting a series of tools, they're getting the AI, the, you know, a lot of the back end work that we've done over the years and the last 20 years to make things more efficient. Speaker 4 00:04:30 So if you're large, say you have 20,000 users and you've got, you know, say 30 sites, different, you know, locations, you know, your infrastructure gets very complex fast, right? So you need an organization that understands, like how to manage that, how to help you see what's coming, how to plan, how to be more strategic in the way you support it. and ultimately be there as your Top Gun when you know something goes awry or goes, goes wrong. Right. So, you know, insecurity is obviously always changing, right? So that that kind of came naturally over the last decade that we developed, you know, security services because it became such a large issue for customers. so, yeah, and, you know, a lot of our we've actually scaled with, you know, startups as well. So we've had startups that came in, they had, you know, 10 or 20 employees, and we've seen them all the way through to a thousand employees, you know, kind of managing their cloud infrastructure and stuff for managing the security side forum. Speaker 4 00:05:20 So it's been, you know, it's fun ride. We prefer the growth side. We love the idea of working with entrepreneurs and working with organizations that are growing. it's a lot more exciting organizations that are stagnant or, you know, kind of just sitting there growing. Speaker 2 00:05:32 Then their need for your service is going to grow. Right? And so that's good for business. And and then if you can actually, you know, make it a smooth path for the growth, make sure that they're not going to run into any walls. That's got to give a CEO a lot of confidence saying, great, I know I can scale, you know, infinitely with your help, that's got a that's got to be a great reassurance. Speaker 4 00:05:52 Oh, absolutely. Yeah. I mean, when you're it fails, your customers lose faith in you. Right? So if you're down for a day or two days or sometimes a week, we've seen it all, being in 20 years, you know, it's it's it's pretty easy for, for organizations to really take a, take a hit from a branding perspective, too, right? People lose faith in the product. Speaker 4 00:06:09 So, yeah. So our job, you know, it's one of one of those one of those services you provide that, hearing less is better, right? So, yeah, it's like. Speaker 2 00:06:18 The offensive line. I coach the offensive line at high school, and, you know, you don't want to hear about the offensive line on the loudspeaker. And, you know, until after the game and what a great job they did. But not during the game. It means something wrong. Speaker 4 00:06:29 Absolutely. So but yeah, I mean, we and we continue to innovate and develop products. And, you know, AI is a big part of that right? At this point. You know, what it can do for customers. So we'll see where that takes us as well. Speaker 2 00:06:40 Let's go back and trace the path. So you started in 2005. You started from scratch. You got. Speaker 4 00:06:47 Started. Speaker 2 00:06:48 we run. Speaker 4 00:06:49 For And $57. Two founders, rented a 100 square foot office with a mini fridge and stacked servers on the top of it to, you know, to host stuff for our customers. Speaker 4 00:07:02 So, yeah, it was, it was definitely about as bad as, garage like, as you can get. Speaker 2 00:07:08 And now you're you're a $30 million plus business. You have how many employees? Speaker 4 00:07:13 80. Speaker 2 00:07:14 Okay, so I want to I want to I want to unpack how you scaled, because I think something you told me earlier is a lot of companies that in your, in your field don't really get that large. Right. And they kind of hit a ceiling and, and you've, you figured out how to continue to keep growing and, and get to the size you are. And you punch through some scale barriers. And I think that's something that all, entrepreneurial businesses face. And so that's a great theme for us to talk, talk about today. But, you know, tell us a little bit about the journey. What was it like in the early days and then, and then, you know, when did you gotta have to start changing? Changing how you were growing the business. When you're when you kind of realize that that scale is not not something you just do more of the same of. Speaker 4 00:07:57 Yeah. No, absolutely. I, you know, the beginning was, it was a grind. I mean, we, I, you know, I'd come off some other companies I've been a part of and another one that I had started. So I knew the grind of, you know, getting the company off the ground. But this was a very different kind of company. The one that, you know, I'd worked on before was, was more in the technology space and more of a SaaS type product. So, you know, it went into the service based, you know, managed services. And, it it was a grind. I mean, it was, you know, physical work at points. It was, you know, going out and finding. Speaker 2 00:08:31 Customers of carrying servers and, you know, installing racks. I mean, a little bit like, Silicon Valley with the the servers in the truck. You haven't one of those moments, you know. Speaker 4 00:08:40 Yeah. I mean, one of the first, I think the first or second big project and customer we landed was, you know, we land this big, we were manufacturing Fashion first. Speaker 4 00:08:50 and, we manage this, you know, this big rock quarry, that, you know, grinded up limestone and they needed to take the whole campus wireless, which was basically, like, impossible at the time. But we found a way to design it and make it work, and and, you know, we were hanging off the side of cliffs, you know, running wire and, you know, my partner and I was just, you know, but, you know, it was brought in good revenue. And, we were laughing, having pictures and pictures. Speaker 2 00:09:15 From that engagement, like in your company Almanac. Speaker 4 00:09:17 I, I think we probably do. so, yeah, it was definitely a, you know, those kinds of situations were on the regular. You know, one of our first customers we got was the publicly traded company, and they were sending us all over the Western United States. you know, and you, you know, just just the just the constant grind of just traveling, moving, managing customers, trying to manage service, trying to manage billing, all with just a super small team. Speaker 4 00:09:42 And so thankfully, at the gate, we landed pretty large contracts that allowed us to staff up and, you know, get some of those rules fulfilled, so that we could focus on some of our core areas of strength as individuals. You know, in the in the case of sales, as an example. But, yeah, it was definitely, it's definitely grind out the gate to get this off the ground. Speaker 2 00:10:01 So yeah. So but but you obviously were successful. You, you helped those early customers, you innovated you, you, you did the hard work of of hauling equipment like, you, like, you know, and everything that's needed as an entrepreneur in the earlier stage. When did you when do you feel like things changed and you kind of looked and said, all right, we, you know, we want to be bigger than the, the average competitor. And, and, you know, doing the same type of thing is not going to work like one plus one. We can't just scale linearly with a change. Speaker 2 00:10:32 The way we, we run this business to, to get bigger. When did you hit that ceiling. Speaker 4 00:10:38 Yeah. You know, probably kind of around that five, $5 million mark in revenue. we're starting to land some larger contracts, you know, in $5 million in our space is, you know, you're still a pretty good size organization with such a fragmented industry, you know, so these guys get to, you know, a lot of the entrepreneurs in our space get to ten or 15 or 20 employees and feel like they've really arrived. but you do you reach some some, you know, some major kind of stepping points. You got to make some big investments you have to make in the right people, to get you from where you are currently to where you want to go. which is difficult for a lot of entrepreneurs to do. you know, the biggest one, you know, I think we've discussed it's just that releasing control. Right. And, and so, you know, you you've got to you've got to find those capable people. Speaker 4 00:11:27 You have to raise them up. And, so that $5 million mark was, was tough. I mean, it was kind of a plateau for a little bit. And we had to kind of figure out, you know, how do we grow, you know, both organically and organically. In our case, you know, we we decided that we really wanted to go for it and go all in. And so, you know, part of that was, you know, bringing the right people and also making some large investments and, you know, some acquisitions and things like that to scale. So. Speaker 2 00:11:54 Now when you were at that stage, did you have like the evidence or the confidence that said, that said, all right, we know we can grow the revenue based on either customers or backlog. So you kind of did you feel like the market opportunity was there, and did you feel like you had maybe an organizational or a leadership challenge to kind of get there, or was it a little bit of both? You kind of had to take the step and see if the revenue would come. Speaker 2 00:12:16 How did you have both challenges, or was one kind of feeling relatively comfortable at that point? Speaker 4 00:12:23 Yeah, you know, we knew the demand was there. I think what we realized was that our, our team just wasn't ready for the growth. And the people that we had in those positions had come up, you know, essentially through the realms of it or security. and so they were oftentimes very analytical. And, you know, they overthought things. Right? So as opposed to being strategic. and really deciding, hey, what needs to kind of what do we need to shed in order to, to really scale? and so at that point, you know, kind of the analogy I remember having in my head was kind of a race car analogy, right? Like, okay, well, if you want something to go faster, you can't keep adding more weight. you can't be adding more stuff that you're going to do, you know, like when you watch some of these, especially the newer ones that come out, these documentaries on race cars, it's like they're constantly, you know, losing weight wherever they can. Speaker 4 00:13:14 They're they're thinning out like things that don't make sense in order to kind of really get that speed and performance they need. And so when it comes to scale, we just, you know, looked at our business and went, okay, these couple areas can scale really well. And these things that we're doing over here are actually, really not scalable there. And oftentimes what's funny is those things are often what people think are the best part of their business, but they're oftentimes where you're not you're getting the worst margins. they're the messiest part of your business. They're really difficult to scale because they're, you know, they're just they're complex. They're overly complex. So a lot of those things we decided to, if we were going to keep them for the sake of the customer to contract them out, which allowed us to scale out faster. We still got, you know, some margin off them. So. Speaker 2 00:13:57 Yeah, it is. It definitely is. It requires a more efficient race car to to scale because you can kind of do the math. Speaker 2 00:14:06 Right. I think there's a theme here that I hear you saying like, look, people start businesses in areas they know, right? That's the beauty of capitalism and the entrepreneurial entrepreneurship world that we live in. And what I see over and over again is you get people who are really good at it, for example, right, creating an IT company. Right. And then, you know, they may not have had experience to some of the other disciplines required to to scale businesses, whether it be finance or people leadership or, you know, HR, you name it. Right. And and so we see that and I talked to a lot of non-technical founders who maybe know an industry. And I talked to technical founders who really don't know how to sell, or sales, founders who don't know how to write great tech write. And so, you know that that's probably where most people that's the default stage. That's where people find themselves. So how do you a first recognize that. And then B what do you do to kind of punch through and and get those other other skill sets, or educate yourself in a way that you can you can get through that, that barrier to scale. Speaker 4 00:15:13 Yeah. So I mean, I know we chat a little bit about this. I think the thing that helped us the most in that kind of $5 million mark was, you know, bringing on a good coach that was referred over to us. and it scaled, you know, very a series of different companies. you know, he was doing it. He didn't need the money. He was doing it more just to be, you know, it was kind of his service. He really enjoyed it. he's still, you know, still in my life, great guy. One of the things that he has to do for a couple of years was track every 15 minutes of our day, which sounds tedious, but, you know, really wasn't something that he he'd go over with us, but really, it was more eye opening for us to look at. So you would look at the end of your day or end of your week and you went, oh, man, I'm literally involved in everything. Speaker 4 00:15:56 Like, sure. Speaker 2 00:15:56 So that kind of gave you a start that there's maybe a better way. Speaker 4 00:16:01 Yeah. And am I that micromanager guy that I didn't think I was and, and so when you, when you constantly kind of going back and forth with leaders or those you're trying to develop and you're, you're, you're not necessarily coaching them, you're critiquing them on everything, then they start to double, you know, they're they've got a lot of double think in their head around, you know, am I doing this the right way? They stop making decisions as fast. because they, you know, they they've got this person kind of peering over their shoulder all the time. And so when you get that really high level of talent in there, they're just not going to put up with that. Right? So if you do go and hire somebody really, really good to say operations or service or finance or whatever, and you're constantly just over their shoulder. they've got about. Speaker 2 00:16:41 People, leadership and executive leadership and ability to scale teams. Speaker 2 00:16:46 I want to get into the details and like, clearly that that that little charting exercise is details. But I mean, you said it pretty easily, but I'm guessing it wasn't too easy to just to to get that coaching with you and your, your co-founder. Like, what was the was there a catalyst or was there something that kind of made you say, man, this is worth doing, right? because, you know, most people don't. I think the default is not to go seek out and get help, because that, you know, that that implies that you need help. Right? And then you get that little conundrum, that founder conundrum of feeling like, you know, oh, yeah, I know what to do. Right. So let's talk a little bit about like how you made the decision. Was it an easy one or was it something that you had to go a couple rounds with your founder and and how'd you get there. Speaker 4 00:17:26 Oh no. Yeah. This was this was not an easy one. Speaker 4 00:17:29 you know, I think a lot of it came from the fact that, you know, we weren't we kind of hit this plateau. So it creates pressure and frustration. you know, in that plateau, you're not hitting the numbers you want. You're not hitting the profitability you want. You're not generating the cash you'd like to. You know, I think the other thing is, you know, you're losing good people because you frustrate them. Did you did you lose? Speaker 2 00:17:52 Did you go through a couple cycles of trying to do it yourself and get people and it not working out? Speaker 4 00:17:58 Yeah, absolutely. Yeah. and you know, I and I, you know, you know, in my, some of the best people I ever worked for kind of coming out of college, you know, one in particular that I really respected said, you know, in your life, you should always have somebody that's mentoring you and you should be mentoring somebody. and so good advice. Yeah. I think it's great. Speaker 4 00:18:22 And I, you know, I'm still doing it to this day. And I, so, I mean, to have a coach meant a lot to me. Like, I, you know, had to be somebody I respected as somebody I trusted, had to be, you know, somebody that I could learn a lot from. And, you know, in this case, I did, and to this day, I, you know, obviously still have a really close relationship with this guy. And we serve on boards together and things like that. So he's been a very impactful part of my life. and he's not I. Speaker 2 00:18:47 Want to write down that question. You should always have a mentor. You should always be mentoring someone else. Is that what you said or what? How did you say yeah, yeah. Speaker 4 00:18:53 Yep. And so, and to this day I still do. So I've got mentors and I've, I, in fact, just yesterday just, you know, mentoring a young entrepreneur and there's, there's no fee to this or anything. Speaker 4 00:19:04 I'm just I'm just helping this guy out that's got a growing business. Speaker 2 00:19:06 And it helps you learn to write when you see other businesses. Absolutely. You can do your pattern matching, right? Speaker 4 00:19:12 Yeah. And, you know, at. Speaker 2 00:19:13 The time was was your was your partner on board like the did you both come to the same, same realization or, you know, just walk us through like what what it was like, you know, taking the medicine and saying, okay, we're gonna we're gonna do something different. Speaker 4 00:19:26 Yeah. I mean, my partner and I, we've been buddies since the third grade. So, you know, we have very different personalities, but we end up getting to the same place, which is what's always been great about us. Right? So we might we might take two different roads to get there, but we're going to end up in the same place. Our values have always matched up. And so, we just kind of talked about, you know, who would pick the coach type of coach we interviewed. Speaker 4 00:19:49 Some people totally landed on this coach that we worked with through referral. and, you know, I think some of the things this coach said to me immediately that, you know, that were I think what really hooked me because, you know, I, I hadn't used a business coach before. So, you know, one of the things he talked about was said, hey, you know, I yeah, ultimately. Speaker 2 00:20:11 Mike. Right. Is this really is this really. Yeah. That a lot of people I think are a little self-conscious about it aren't they. Speaker 4 00:20:19 They are. Yeah they are. And you know, and you're having to expose everything. Right? I mean that's the biggest part, right. Like all the darkest parts. Right. All the stuff that. Speaker 2 00:20:26 Yeah, the secrets that you know. Speaker 4 00:20:28 Yeah. Like we're talking about issue. Right. Like maybe the financials you don't want to open because you know they're going to be horrible. Right. and so, you know, one of the things you said is like, hey, my job is to, you know, obviously develop as a leader. Speaker 4 00:20:41 But the other thing is, I'm going to save you lots of time and cost. so he's like, I, I'm going to from wisdom and from my experience, you may you may have an idea or direction you're going to go that I've already seen or been down. And so I'm going to tell you, you know, there's probably an alternative that's going to work much better and essentially, you know, provide a shortcut to getting you to the goal you want to be at. So I think that, is ultimately was very true. And still to this day, with the coaches that we work with, that they save us a tremendous amount of, potential catastrophes. But, you know, time sucks, right? Time waste. Speaker 2 00:21:21 Money drives into a ditch if they don't have some guidance. Right? Yeah. Speaker 4 00:21:25 Yeah. Because even even. Speaker 2 00:21:27 Even the great the greats that we all hear about in Silicon Valley, everyone's had their examples. Speaker 4 00:21:33 Well, yeah. And I think one of the things that I see entrepreneurs do that's is probably one of the worst things they can do is to not have any level of accountability to. Speaker 4 00:21:40 Right? I mean, and so when your people know that you are accountable to somebody, even if it's just a coach, you know, it brings some relief to, you know, those people that are working with you. And one of the things we opened up was to allow our coaches to work one on one with our team members. as well. So to give them, you know, give them an outlet. Right. So if they want to chat about some things in a confidential manner and then they would, the coach would find a way to bring it to us in a way that, you know, obviously would what would be the way that's positioned. Speaker 2 00:22:10 Private companies, whether it's a coach or even a board of directors. I know I talked to a lot of private companies and they say, why would we get a board? We don't need to, man, that's one of the things we're grateful for. We don't have to worry about that. And a lot of times I say, well, you know, it's it's it's to have that accountability cycle and to help you win. Speaker 2 00:22:27 It's not like, you know, if you're private, you own your company, you don't need a board because you don't have third party investors, but you might want to have that kind of accountability loop. Someone who's there, who's incentivized to help you score touchdowns and, and, and meet your objectives. Right? Speaker 4 00:22:41 Absolutely. Yeah. You know, and that's where I think advisory boards are, are great for that. I mean, they're not fiduciary. They're not going to tell you what to do. But there are a bunch of smart people. They're going to kind of guide you in the right direction. They're also gonna probably make connections for you and, and tell you when you're out of bounds. And, so, yeah, I think it's, Anyways, yeah, not to steer too far, but yeah, that, that that pivotal part helped us to realize that, you know, we had acted as the superstars. We were, you know, we we felt like we had to lift the whole company at all times and, and do the big things. Speaker 4 00:23:12 And in reality, we need to build the engine for scale. And it's very. Speaker 2 00:23:16 Difficult to scale you. You clearly can't just, you know, keep putting up, doing more and more of the same things with two founders, right? You know, two's better than one, maybe. So you can get to, you know, that 5 or $6 million mark. But What was it you had to start doing differently to punch through that ceiling and get to scale? Speaker 4 00:23:35 Yeah. You know, I, you know, number one was, which I you know, we talked about, you know, previously Joan was just, you know, one of the things I wish I was in earlier, which I, you know, I kind of started doing at that point was understanding finance and the metrics greater. Right. So the day we are in business. So this is not a, you know, this is not a, entertainment company or something where you just, you know, you you're just having a good time or, you know, it's a party. Speaker 4 00:24:01 It's like, you know, at the end of the day, metrics and dollars matter. And so when you find one of those. Speaker 2 00:24:06 You let me know, right? Yeah. Speaker 4 00:24:08 When you find entrepreneurs, just they oftentimes, they either ignore it or they expect someone else is managing it. But in reality, I've met a lot of entrepreneurs or people who've been in business, you know, say 20 or 30 years, and they still don't understand how to read, you know, basic financial statements, or to understand the metrics that are important to encourage. Speaker 2 00:24:27 You to to dig into that a little bit. Speaker 4 00:24:29 He did. Yeah. And then I went and got, you know coaches in that space of finance. And ultimately I went and you know, did a degree for that reason. Right. Just because I want to educate myself, it was like. Speaker 2 00:24:40 You got a degree while you were working. That's impressive, I got it. Speaker 4 00:24:43 I got an MBA. While I was, I was working with four kids. Speaker 4 00:24:47 It was. Yeah. I would not recommend. I would not recommend it. Speaker 2 00:24:50 And nights and weekends. MBA good for you. Speaker 4 00:24:52 I would not recommend it. but I did, you know, you've seen it. I, I, we've talked about I, I've read countless books on finance. Some, some I would not recommend to anyone unless you want to get a good night's sleep. Yeah, but there are some. Speaker 2 00:25:05 Yeah. Late nights like that. Reading to help insomnia. Speaker 4 00:25:07 There are. Yeah, there are some that are great. I, you know, I, I started reading a lot of publicly traded financial statements. I started to match my company up going, hey, well, if this company is. Speaker 2 00:25:16 Just like when you can actually speak the language of public company stocks and see what they're talking about on MSNBC and understanding it, right? Speaker 4 00:25:23 Yeah. And you know, and and, you know, obviously we're wanting to go raise money, particularly from banks. And so, you know, we have to be positioned well, right? Your financials have to make sense. Speaker 4 00:25:31 you have to know them well. You have to be able to answer the questions in the moment. And you should be able to because you should know the weakest parts of your business. You should know the strongest parts of your business. And then you know, what comes to light is, hey, here's where we actually make all the money. And it's actually oftentimes what I found is it's actually like our simplest part of our business, our easiest to sell and scale. but for whatever reason, we get attracted to these other shiny, you know, what even might want to add? A professor in college just said, you know, the shiny $20 bill, right? So you get distracted by these shiny $20 bills because it makes you feel good in the moment, or it's a quick hit, or in our case, like somebody might go sell like a really large, you know, multimillion dollar project back then. But in reality, they were very thin margins on those large projects. So you didn't have a lot of room for error, and then you had float time on the products. Speaker 4 00:26:21 And so there was all this stuff that we just decided, like, you know, beyond that to like what builds enterprise value. Right. And so in our case it's you know, it's the RR. So really zeroing in on it. Speaker 2 00:26:32 Knowing what the critical metric is really allows you to align as a leader. Right. And then you can share that internally and use that as a as your Northstar metric and make decisions based on the impact. Right? Speaker 4 00:26:45 Yeah. And just stop lying to yourself. You know what I mean? Like, don't like don't lie to yourself. Don't don't preach fluff. And I mean, everyone knows in the day in their gut that, you know, maybe what's being said isn't right because it doesn't even match up with what's actually happening in the realm of financials. And then, you know, the things that are even worse is you find mistakes on where sales guys didn't actually they you've been servicing a customer, but you hadn't been billing them. I mean, there's all kinds of it can go on forever, right? Like there's, you know, lost revenue and there's just so much stuff that you actually learn in entrepreneur. Speaker 4 00:27:17 You go, okay, I know when I go and what it does is it prepares you to be able to to hire the right people. And I don't just mean in finance, it's in all areas of the business. Right? So when you can talk to an operations person that's, you know, a fluent in finance enough to be able to manage operations, it gives you more confidence. Right. so that's awesome. Speaker 2 00:27:38 Yeah. So finance definitely is is something that, you know, people from an IT background wouldn't necessarily come to the table having. And so you, you figured that out. You made the investment to learn that. And then the other thing you were telling me about is just, you know, a different way of thinking about scaling your team. Right? And and that's something that, you know, I think everyone struggles with. What's the difference? How do you make the change? What are the couple of the key lessons you learned about how you thought about your team? And I think you described to me that you're almost able to you're so successful now that you're almost able to have your team run the show, and you can be really at the strategy level. Speaker 2 00:28:16 I'm sure that felt a million miles away from you when you were on the other side of that, that that chasm. Talk us through that chasm. Speaker 4 00:28:23 Yeah I know. Absolutely. So. Yeah. It you know, that's, my the other co-founder and I, you know, some share out of operations at this point, we're working more on the larger strategic deals or kind of high growth opportunities. you know, you know, really for us, it when we when we think about people, I think for a long time we, you had a lot of wrong people in the positions, which I think we you know, I think if I was to start over, I would I would make those decisions a lot faster. could. Speaker 2 00:28:58 You did you hold on to your original people too long? Speaker 4 00:29:01 We really did. Yeah. And that and that cleanup process, really, you know, positioning people. I do feel that, a lot of leaders are they're kind of tuned for a certain size organization. A lot of times some can scale and grow with the organization, but there are many that cap out at 5 or $10 million in revenue. Speaker 4 00:29:20 Like. And beyond that you see these like kind of boiling or pressure points. That puts ultimately a lot of stress on the organization, but it puts a lot of stress on that leader because it's just they're out of their element. and so learning to have those conversations faster, because I also often found that when the organization was was frustrated, so was that person. And they really didn't feel like they were fit anymore and they wanted to go do something different. And so, you know, I, I'm a huge proponent now of having those tough conversations immediately, or as fast as you possibly can. And particularly for those that when it comes to leadership, just that you're you're having those honest conversations with people like, hey, is this is this working for you? Because it's it's not working for us. And so, just open that up. Oftentimes people say, you know, thank you. Like, I've actually been thinking about, wow, that's either moving in this other role or. Yeah. Speaker 2 00:30:15 That's that's got to be a relief. Speaker 2 00:30:17 Right. Because the we've talked on this podcast many times with people, and it's one of the biggest things that comes up in leadership is we've kind of boiled it down to, you know, fire fast or slow, but all the dynamics that make that so hard, you know, because, you know, you have loyalty. You've got you've got people that you've worked with for a long time. You've got people that are keeping the trains running. It makes it really hard to have that conversation. But it sounds to me like once you had the courage to do it, you started finding that it was actually a relief on both sides to actually have the conversation that you've been consistent about. Speaker 4 00:30:51 Yeah, absolutely. I mean, it, you know, there was a few rare times where people would get, you know, defensive or whatever, very rare. But, when you give your leaders the tools, even just those opening conversations, and if they're not going to do it in person or they're not doing it, go zoom. Speaker 4 00:31:05 Just tell them, hey, I tell them, hey, just can't do it on a phone call, right? Because it does the face to face bother you? Like, can you can you have the tough conversation? and so what was interesting about it was, I'm not even saying these people left the organization. It was just, hey, you know, we would have the we would open up the can and they'd say, hey, you know, I've really been thinking about it, and I hate being in the leadership meetings. And I just want to focus in this area of the business. I see I see a huge problem here and I want to own it. And that's when you know, you like, hey, I've got the right leader. I just have them in the wrong place. Yeah. Speaker 2 00:31:38 Which is, which is fantastic. That's a that's a huge unlock. Speaker 4 00:31:42 Yeah. Because you don't want to lose all that equity too, right. When I say equity, part. Speaker 2 00:31:45 Of the reason I've been holding off on the conversation in the first place, right? All that culture. Speaker 4 00:31:50 All that time with that person, you you care about that person. But oftentimes we we think caring for them is just leaving them in that role and probably paying them more than they should be paid or whatever the case is, or, you know, stifling the business because people can't grow under them. and so, you know, giving the people, you know, the ability to kind of have that open dialogue, nothing needs to happen that day. Just open the can, give them a couple days to think about it, said, you know, a future day, you know, in a week or so to have, you know, to to kind of solidify the conversation. Speaker 2 00:32:24 So do you make it a little open ended and collaborative? It sounds like that, that that's like it takes a little the pressure off. Right? It's supposed to like, hey, you know, you're not cutting it anymore. We're going to fire you, which is a very intimidating conversation. How would you phrase it? Speaker 4 00:32:37 yeah. Speaker 4 00:32:37 It's just it's just more like I said in the beginning. It's just more like, hey, is this working for you? Because here's what's not working for us. And, you know, usually that, that just even that open ended single, single set of questions just opens up this can of all these feelings, and things that are, you know, are kind of deep in their when they know it's a safe place, right? When they don't trust their leader. It's a totally different situation. But, you know, you you kind of reduce your, you know, you're going to strengthen the organization. You're going to really help that person you care about. and, you know, you're also reducing your liability, right? Because like, where is it actually ultimately going? Right? If you leave this person in there and it ends up in a termination, particularly wrongful termination, you got a whole other set of problems, right? So and, you know, it's just the right thing to do if you truly care about people, have the tough conversation, have it quickly. Speaker 4 00:33:30 And, Speaker 2 00:33:35 That's that, that's that that's a key lesson. I, I've seen that come up over and over again. So so that's great. what about enabling your team to scale, like on the next side of that conversation? You know, whatever position you put them into, what did you learn in terms of, enabling your team to find the right roles? As I think is that conversation helps, but then how do you help them scale and grow in their careers, to the point where you and your co-founder could be at that, like oversight level now? Speaker 4 00:34:07 Yeah, absolutely. I mean, I, you know, starting, you know, working backwards. Our current situation is, you know, is has worked well just because, you know, we've hired our key leaders, coaches, and a lot of times those are specialized coaches. We've given them the support they need. So I think what I see a lot of entrepreneurs do is like, you know, not give them, say, an assistant or virtual assistant or whatever, which I think is is really puts a lot more pressure and time. Speaker 4 00:34:33 You've got like high level people doing kind of administrative work. That's really low level work that they shouldn't be doing. And so you can kind of help give them some of their time back. So same thing. We still have our team go and track their time, which was what we learned. Okay. Speaker 2 00:34:45 So you're using that same technique for your leaders. That was one of your first leaders. Speaker 4 00:34:49 Yeah. Speaker 2 00:34:49 And you're using for new leaders. Now you're passing it down. Speaker 4 00:34:53 And so when you look at it you go, hey, well you're actually spending three hours a week just scheduling stuff. Yeah. Coordinating meetings. That's exactly. Exactly. Yeah. So can we get you somebody? You know, we've got plenty of people overseas now that, you know, work for us on our contract basis that are, you know, assistance as an example. Right. So they're just and they're great. Like, they're, they're they're there part of our team there? you know, they they pick up the slack for our leaders, and empower them. Speaker 4 00:35:21 but I think the biggest thing is telling them just to go. Just just to roll, like. Like they know what to do. And if they don't, then they're the wrong person. But I think that one of the biggest things we did this last year that really showed us a lot was we should kind of do them more of a top down strategic planning, do off sites, etc. we went to more of a bottom up. It's like, hey guys, here's where we need to be, here's where we'd like to go. And we've decided that as a team, you show us how we're going to get there. How is your department going to get how is your department going to meet these meet these areas that we need? Like if, you know, for instance, if sales has to grow by X sales, how are you going to do it? Marketing. If you have to deliver X number of ncl's, how are you going to do it right? and so I think that's a huge part of it. Speaker 4 00:36:07 And then you know, pretty quick. Right. And they know that they start to buckle. If, you know, either they're going to need a coach to kind of help them get there, or maybe it's just the wrong role for them. but that that feeling of autonomy is huge, right? They have to have that feeling of autonomy where they can go. Speaker 2 00:36:24 You're the leader. How are you going to how are you going to solve it? Right. And that that does create transparency in their capabilities. Right. And I love the fact that you support them, whether it's administrative help or coaching help. That's really it feels to me like you're creating an environment where they can succeed. Speaker 4 00:36:40 Yeah, yeah. And that's you know, and obviously this comes from a lot of seeing in other organizations. I've, you know, obviously, like I've told you, I geek out on a lot of different, obviously finance. But, you know, I've read a lot on autonomous organizations and how they're doing it. Speaker 4 00:36:55 So to start to slowly apply those things and you have to remember all these people you've hired, for the most part, have come from hierarchical organizations, right? And are not used to being able to make decisions. And so you almost have going from. Speaker 2 00:37:09 Big corporate company to an entrepreneurial company. That's not natural, right? Speaker 4 00:37:14 Yeah. And you got to release them and go, hey, just go. Just roll like, you know, to do. you know, and obviously there's, you know, there's some there's some guidelines there where you're there at least kind of giving you an idea of how, of what they're going to do, but, you know, if they want feedback or whatever, but, you know, coach will help them and ultimately, like you'll see them start to develop their people. They feel free. They can make the calls. and you clearly you need to be involved in the big things as a leader. Like, you know, if it's something that can put you out of business or, you know, substantially, you know, something you can't recover from, but really, how many of those are there? It's like most of the time it's, you know, hey, I want to I want to do X for Alex. Speaker 4 00:37:52 That works for us. It's like, okay, well, you know, why do I need to make why am I involved in this decision. Right. Yeah. Because clearly you feel like, you know, if you're the leader coming to me with this, you feel like you can't make that call. That's great. So. Yeah. And so I actually. Speaker 2 00:38:08 It sounds like you have come fully to the other side of the chasm, where you don't have to be in everything. You can empower your team. You're taking concrete steps to make sure that they're successful, both in terms of support and leadership. And now you're almost the point. Like what? You're asking the opposite question, looking back, which which kudos to you. You know, a lot of people never make it through that that that that's a great story. well that's great. I think that's going to be helpful to a lot, of lot of our listeners. Everyone's trying to scale. Everyone naturally falls into the trap of trying to do too much themselves. Speaker 2 00:38:40 And and, you know, the organizational challenges that creates, I think, are going to be really, recognized by, by, by a lot of people. tell me a little bit about, you know, where are you educating yourself beyond that? The finance textbooks I found you, you had buried in, in the other day. What do you recommend to to other leaders? There may be on the front end of that chasm thinking about scaling or, you know, that can inspire them for their leadership journey. Any books or podcast you'd recommend? Speaker 5 00:39:09 Yeah, absolutely. Speaker 4 00:39:12 You know, I, you know, a couple of the. Well, there's a lot of books. I, I, I would highly suggest entrepreneurs are constantly reading. So, you know, 1 to 2 books a month would be a recommendation if it's just audio. I definitely am a huge proponent of, of, you know, obviously, I, you know, part of mine is, is more spiritual being a Christian, I, you know, I like to take at least an hour a day, and just go for a walk and, and really clear my head and figure my day out before I start. Speaker 4 00:39:40 so part of that is, you know, prayer. I mean, for others, it might be meditation, those kinds of things, but you really need to be in a good headspace as a leader. I think it's really tough to start your day and, and, you know, wake up on the wrong side of the bed and you're just a jerk to everybody. I don't think that helps anybody in the end of the day. you know, there's some great books. Hard thing about hard Things, I think is a is a is a great one. there's there's there's a ton. I, you know, there's I think it's interesting to just constantly be reading different things. I'm reading a fly fishing book called The Optimist right now. I like to kind of mix my head up a little bit, because I always pull something for leadership out of these other, you know, ideas, these other concepts that come out of just, you know, completely random books. yeah. I, you know, really for me, I there's a series of podcasts I love. Speaker 4 00:40:29 I but really, I think what's most been most important for me outside of books and everything else is really just, to find a community of entrepreneurs. What you guys are doing is, is is awesome. And I think that's critical for people. And then, you know, on a smaller scale, if you can find them either in your local network or people that you can find throughout the nation or maybe in similar businesses, but you're not competing, just people that you can trust. You can share the the tougher parts of what's going on in your organization. and again, finding a good coach if you can't afford one, or, you know, maybe there's I know there's plenty that are retired entrepreneurs are happy to help and they're a little bit bored. They want to keep their mind going. so, you know, huge proponent of of just, you know, finding that, that community for you. yeah. Speaker 2 00:41:14 Not not not not boxing yourself in and trying to solve the problem alone is a great lesson. Speaker 2 00:41:18 And so, you know, thank thank you for that. I think, you know, that's what we're trying to do at Growth Elevated. Hope to see you at the at our summit this winter. Yeah. And thanks for taking time to just share some of your leadership stories and secrets with us. Dave, this has been really excellent. Speaker 4 00:41:32 You got Julian. Thanks for having me, man. I really appreciate it. Speaker 1 00:41:38 Thank you for listening to the Growth Elevated Leadership podcast. If you enjoyed this episode, would you please follow us and subscribe on your favorite podcast player and we'd be grateful if you recommend it to a friend. If you'd like more resources on how to become a better leader in business, we invite you to visit us at Growth elevated.com. We'll be back next week with more insight from another great tech leader. Thank you.