What’s the most efficient, most secure method of growing your company? Shane Mahi, Founder and CEO of SalesDRIIVN, and Gerry Hill, EMEA Regional Vice President of ConnectAndSell, explore this question with Chris Beall in today’s Market Dominance Guys’ podcast. “Overhead is like a racehorse,” Chris says. “It eats while we sleep.” He offers the following advice to Shane and to our loyal listeners: Forget taking money from VCs. Instead, work on shortening your pitch-to-value cycle time and build your business that way. “The faster your company can cycle and produce value,” he explains, “the lower your risk of losing your business.” Gerry chimes in with his own great advice: “Be sure to take a scientific approach to the experiment, not an emotional approach.” And, as always, Chris reminds those pursuing success in business that “Market dominance is a risk-reduction program: in order to reduce the risk of losing your company, you need to dominate one market. Then go dominate another.” That’s the way we roll on Market Dominance Guys every day: lots of valuable advice and helpful reminders. Listen in for more of it on today’s episode, “Overhead Is Like a Racehorse.”
About Our Guests
Shane Mahi is Founder and CEO of SalesDRIIVN, a service provided by some of the sharpest minds in sales, generating quality meetings for its customers.
Gerry Hill holds the position of Regional Vice President/EMEA of ConnectAndSell, a Silicon Valley–based sales acceleration company, which provides technology that gets salespeople 10x more live conversations with decision-makers.
Here is the full transcript from this episode:
Shane Mahi (01:36):
So how does a new business owner protect themselves when they are seeking funding? Because with all the advice in the world, some people will just still go for it. What can a business owner do to protect themselves from getting into bed with the wrong person?
Chris Beall (02:01):
Wow, that's a tough question. I'll take a shot at it. Well, I'm going to go with an analogy. Some people who've watched this program know that there was a time when I was working with somebody as an advisor to his company as a friend, and he came into some money and decided to hire some salespeople, a salesperson to take his product to market. And I told him, "I'll fire you. I won't advise you anymore if you do that." And he asked me, "Why?" And I said, "Because we're doing an experiment now with a great deal of money to determine the answer to this question, 'Are you great at hiring salespeople?' And the answer is no, we know you're not, you've never done it before."
Chris Beall (02:40):
So what are the odds, your first go, one of the hardest things in business, which is to hire a salesperson, but an unattractive company that you do no business with anybody, you're just getting started, what are the odds that you're going to hire the great salesperson that you need to take a product nobody knows about to market with the chief operating officers and similar of some of the biggest companies in the world? It's like zero, right? So I told him, "I'm not going to waste my time." And he said, "Well, what's your alternative advice?" I said, "You mean, after you fire the salesperson?"
Chris Beall (03:13):
And he said, "Well..." And I said, "Okay, let's assume that you do the right thing and that you let this person go so that they can go do something useful with their life. You need to cold-call these chief operating officers and talk to them, somehow, get a meeting with them and talk to them about what their needs are, what they see in their own organization that you can help with, with your idea of a product, and that's it. And if you can get the flow rate of those conversations up high enough, then you'll be fine. Your money won't run out, or you'll find out your idea is bad and you'll find out fairly quickly it's bad. And then you'll save yourself a bunch of grief and you can do something else."
Chris Beall (03:54):
And he said, "Huh." And I said, "So it's very similar when you think your problem is I got to, I got to raise some money. You're just like this guy thinking his problem was, I got to hire a salesperson. The odds of you choosing a financial partner as a naive and getting the right financial partner, who's going to be there with you with your interest in mind rather than theirs, bringing something beyond money to the party because money is, Gerry just said, "Cash is trash." The world's awash in money. It's of no value to you. You can get it from anywhere. So what are the odds of you doing a great job of... I think of this way, you're not seeking investment, you're hiring a financial partner. You've never done it before. I guarantee you will fail. However, the price of your failure will be your company. And so given that you're crazy, just crazy to take investment, unless you're an expert investment taker, that is your great at buying from out there somewhere, a great financial partner and selling them for good reasons, not bad on why they should partner with you.
Chris Beall (05:04):
It can be done. I am at the edge of sometimes being able to do it, but I regret quite frankly, every dollar I've ever raised. And I can go back and look at that and the numbers are big. It's like $180 million. It would have been better in every one of those situations to bootstrap and it would have been better because it would have slowed us down enough that we would have had to learn what the real problem was we were solving all the way to the bottom. And that's the hard part of business. It's easy to come up with a solution. It's hard to come up with a solution, right? I mean, anybody can come up with a solution and a slide deck. There's nothing to it. Anybody can name a big tan, by the way, if you name a big tan, you're dead already.
Chris Beall (05:48):
No small company can ever address a big tan. That's just a stupid idea. That's just a crazy idea. Yeah. We're going to take over the world. Well, who cares, right? I mean, it doesn't make any difference. It's like I have a mountaineering analogy. You can stand there and look at the summit all day long. It doesn't get you any closer, right? I'm looking at ever... Oh, what a tall mountain. It's 29,028 feet and it's all covered with ice and the ice fall looks really dangerous. Well, it is, but it's great. That didn't help you, sorry. Yeah.
Shane Mahi (06:22):
It made you tired looking. Made your neck tired.
Chris Beall (06:27):
So I'm with you Gerry and that's kind of the whole purpose of this podcast is to let people know. And it's the purpose of connecting. So why we do the company is to let people know there's a... You actually have the key resource, which is your voice attached to your willingness to learn associated with a hypothesis of how you can help. And that's it. That's your core. That's what you're bringing together. If you take your voice out and you just left with the hypothesis, that's not so great. So the hypothesis ain't going to dominate any markets. But the VCs will pay you for it because they're looking to get rid of you anyway, right? They're looking at-
Shane Mahi (07:16):
I never call. I never understood that line. Why? All right. So what if you have a good CEO and the VC still wants them out, then what does a company do?
Chris Beall (07:28):
You end up with a fight and it's not good. I've been through them. I know what it looks like. Anybody ever wants to give me a call. I might tell them about one of them, all depending on how the court records are sealed. But let's face it, once you take money, if you end up in conflict with the money that conflict's going to be resolved relatively violently, I'll say through corporate violence or you're going to lose. You will probably lose most of the time. And the reason is they're experts. They're professionals. They're not professionals on running a business, they're professionals at winning that fight. So you don't want to be in that fight. You don't want that. That's what that big document's all about. That's the rigging of the fight. [crosstalk 00:08:13].
Shane Mahi (08:13):
Well, I just don't... I do not understand. So maybe, I'm too simple-minded or I don't know how this comes across, but I just think I would never give up that much control then. Does that not protect you? If you just say, "I'm not going to give up that much control, I've heard of ultimate vetos in contracts where they can't override the CEO's decision." Does none of that play into factor in 2000s?
Gerry Hill (08:41):
No, not really. Because there aren't enough CEOs are dynamic enough to actually be the intellectual property of the company. I can think of about four at the top of my hands with that shit or maybe two kind of works right now in popular culture. No one's getting rid of Elon Musk. Nobody's getting rid of Jeff Bezos. Nobody's getting rid of guys over at Palantir. They are the intellectual property of the business. They're the reason that the investment is made. That's why they get to hold onto category a shares and do all that other cool corporate stuff that they get to do.
Shane Mahi (09:10):
Gerry Hill (09:12):
That's to know that if they just hold on really tight... Sorry, they just hold on tight in Elon Musk's coattails, they'll be fine, but there's nobody corporate rating Tesla because nobody can do Tesla other than Elon Musk. So if I'm an investor there, that's fine. But to be honest, Shane, you, me, Chris, every one of us from this call whilst we own sparkling in our own brilliance every now and then we are not the intellectual property that can carry a company forward for long enough, right? Anybody could lose that fight because we're not professionally equipped, like Chris says, to deal with the ability to win that fight. I mean the classic in social culture story is I bought a server on Facebook. He was the major shareholder. His share got related to X and he ended up in a lawsuit that he lost and basically got a settlement at the end of it, on a billion-dollar idea.
Gerry Hill (10:04):
So it happens all the time.
Chris Beall (10:06):
Gerry Hill (10:08):
Yeah. I started an inside team on a practical basis for a pretty hot start in the UK. I can't disclose what it is. And the CEO was adamant. She was never going to dilute, never going to dilute, never going to dilute. Now, there's kind of a horrible culture over there at the time. And so there's a bit of bitterness. One of the previous colleagues who got let go horribly and didn't deserve to sent me through the company's house filings after their latest rate. She ended up diluting everything. She owns zero in the company anymore, but she's still the CEO, even after all of that stuff and that's visible. You can see it in the company's house. Now her major next problem is she's now got growth number on her target and the way that a chief revenue offer does. She fail to attain that. She's really easy to get rid of because not only does she not have any real stake anymore and her go-to-market execution's absolutely messed up. Because she's reliant on four customers.
Shane Mahi (11:10):
I'm putting my boxing gloves on and I'm going to town with them. That such a bad idea.
Chris Beall (11:16):
All right, Shane. So I'm going to tell the audience you've done something really, really smart recently.
Shane Mahi (11:22):
Chris Beall (11:23):
You gave me a call and said you were looking for an initial set of partners in order to engage with provide value to know what you were learning, know how you were learning, and form a foundation on which you could build the business in the next stage.
Shane Mahi (11:41):
Chris Beall (11:42):
I was very intrigued with that. I got Gerry involved. We did a test drive yesterday. We're now partners, right? How long did that take end to end from you giving me that call to us being partners and moving forward?
Shane Mahi (11:54):
Couple of days.
Chris Beall (11:56):
Couple of days.
Gerry Hill (11:56):
Chris Beall (11:57):
Right. Nobody raises money in a couple days and this relationship is worth a lot more than a VC too. I can guarantee you over time. You'll learn things. We'll learn a bunch from you also. And then you'll also do something really valuable for us, which is drive meeting for Gerry. And Gerry's a big producer. So I love to have the draft horses eating well, because that way they pull hard on the plow. It is just... What can I say?
Shane Mahi (12:23):
Well, I'll tell you even just now. I'm not even being anything cheesy. I honestly just had chills down and it's not because the windows is open, but I had chills run and down my body because of that. And I have been through my run of the trenches through my life. And even some of the contracts for business that we've had with some of our clients have been a nightmare in some cases and meeting Gerry for the first time when we trialed, connect then so to become a customer and then getting into conversations with you and learning from you and then just the ease and the comfortability of that conversation and how it's transitioned. I've heard many, many times, that's how business should be done. If somebody makes business complicated, you probably don't want to work with them.
Shane Mahi (13:53):
When somebody makes businesses smooth and energetic and fun as it is with you guys, even yesterday, we smashed out the park, I think Gerry had a great meeting, even today with one of the people we put forward, that's what a company wants to aspire to be. They want to dream of having partners that they can connect with, they can click with, and they can create that magic. And that is what I believe we're creating with you guys at ConnectAndSell. So in everything that we say, we are in debt to you guys. We're thankful to be even in conversations, even on just appearance with you guys. It means a lot.
Chris Beall (14:27):
It means a lot to us too. So I'm going to bring out some technical issues here that I think Gerry's quite the technical guy when it comes to building businesses. So Gerry, you and I both know that in the world of manufacturing stuff, all of us who have ever been successful know that there's this thing called the theory of constraints and there's only one bottleneck, right? We know that. We also know that you have to characterize the bottleneck in terms of throughput, cycle time and quality. And that those are objective measures, not subjective measures. Throughput is units per unit time, right? That one we got to know. Cycle time is I got to make one. How long does it take till I get one out, and I can go make another one? And then quality is what percentage of what comes out actually gets used downstream and what per percentage gets scrapped. That's it, that's all there is to it. And there's only one bottleneck in any organization.
Chris Beall (15:17):
And I firmly believe the bottleneck in almost every B2B organization is the flow rate of meetings with folks that they should be talking with, not just to sell, but to learn. There's feedback loops that we have to have. We can't know everything. And the only reliable way to learn anything is through direct experience, working with people trying to solve their problems or failing to be allowed to solve their problems or anything in between. All those things are great, right? So Shane, you just described the cycle time from desiring an investment of a kind, right? Investment and partnership, to having the opportunity to pitch, which was the test drive that you did yesterday, your team did yesterday to closing that deal that is getting funded, so to speak, to delivering first value.
Chris Beall (16:06):
Now think about that from a venture capitalist. When do you ever deliver first value back to the VC? You have already delivered first value in a cycle time of one day because Gerry's had one of the meetings. And so that meeting is probably worth, I'm going to guess, given Gerry's close rate, that's about a seven to $10,000 value meeting on average, some number like that. Here's a point I'm going to make. And Gerry, you can elaborate this. When we talk about risk in business, a risk in anything, we tend to talk portfolio, right? The way you solve risk is through portfolio. Have a lot of stuff on the table, have a lot going on, have it at different points in its evolution, and something will be coming across the finish line at every point. And you can do this with deals. You can do it with learning. You can do it with people. Everything's got a portfolio associated with it.
Chris Beall (16:52):
What I think we tend not to think about is that the risk within the portfolio can be sharply changed, sharply reduced by reducing the cycle time to value of every step within the execution of that portfolio from engagement to value delivered. The shorter that cycle time is, the lower our risk is, because we learn faster and I've made this point on multiple episodes of Market Dominance Guys, overhead is like a racehorse. It eats while we sleep. Like Shane, when you went out in the business on your own with that commission check, there's the racehorse called your life and it's eating at that having nothing to do with the business. That's your overhead, right? So the faster we cycle and produce value and produce knowledge, the lower our risk. And oddly enough, it takes patience to run fast cycle time businesses. It takes patience because we have to say, "Well, we don't rely on any one of these. We're going to be patient and let them hit, but we're going to make, them run as fast as they can within the bounds of nature," right?
Chris Beall (18:04):
Gerry, I want you to riff on this little bit. I'm going to play Corey Frank here and ask you to look at the world you've lived in, which there's a lot more as I call it, analytical machinery around business than most of us that you understand. And look at this issue of how fast do you go from I'll call it, from pitch or idea, proposal, whatever it is to value delivered across the portfolio. How much does that play in your mind as you're thinking about business, and you're thinking about risk reduction? Because the essence of market dominance is risk reduction. Oddly enough, market dominance is a risk reduction program. It is not anything else. Reduce the risk of losing your company by dominating one market, then go dominate another. What's that cycle time X? Whatever it is. What's the cycle time of the little stuff in there? Better pay attention. What are your thoughts on this Gerry?
Gerry Hill (18:56):
I think you can run those cycles in parallel as well. If you've got the right process and systems and people in place.
Chris Beall (19:03):
Gerry Hill (19:05):
With some standardization and just some deviation, the standardization is going to be who. The standardization is going to be what. What am I going to say? How am I going to engage? The difference might be, who am I speaking to? The difference might be, which market am I speaking to them in? And then I'm going to intelligently look at that data, review it and determine [inaudible 00:19:29] and effort and motion require the objective, the goal, the thing that I need to prove that this was a valuable and worthwhile experiment. What I'm not going to do though, is set the boundaries out for six months because six months is far too long for me to tolerate failure points. But if I can get the same amount of data, same amount of information, the same flow insight in a week or two weeks that I can get in six months, then every single hypothesis that I want to test that I believe in is worth running into the side of a mountain. And that's kind of how I think about it.
Gerry Hill (20:03):
Every single experiment is taking an idea and literally throwing the tennis ball or whatever into the type of a building and seeing if it comes back at you with the right signal or if it deviates. And can I do something about the deviation? Is it the deviation of 1% or is it a deviation of 15% from my normal performance levels that I'm anticipating? If it's 15% plus I'm probably going to park it for a while until I can resource it appropriately with the right message, the right staff, the right level of maturity. If it's 1%, I might go again and double down on one of the variables to see if I can bring it back to zero on the degree spectrum. But the key point is, so as long as I'm investing that data, give myself a mindset which is, I'm going to stay neutral and just simply observing and analyze rather than being materially invested emotionally to the concept, I can get very far very fast.
Gerry Hill (20:53):
One of the things I liked about the test drive that we ran yesterday is inside our operation for better worse, our data connects been dropping off. I've been experiencing it a lot. My lists have fatigued. We brought in Shane's fresh lens on targeting and his fresh lens on list building. Their lists proved better than our lists, right? It's not an experiment that we were necessarily going to run inside our company without going through the cycle of getting other people involved in the process. But this was another way that we could dynamically take control of something. Virtually everything stayed the same, same system, same weapon, same message, fundamentally the same regional skill level across the board minus chain and [inaudible 00:21:39]. What was the variable? The specificity of the list and the list vendor that we used. That's a really good example of that playing out in the real world.
Shane Mahi (21:48):
That's a great example.
Chris Beall (21:53):
Yeah. Fascinating you bring that up by the way. Our own list, as you know, had been kind of degrading over the summer. And part of it was I think a strategic miscommunication or misalignment that had us focusing on a smaller subset of lists and we could have gone into some others in our land and expand world. Just to quote you some numbers, our dial to connect a week ago was 36 point something today, it was 19.97, exactly one week later. Because we paid attention to Shane, what you taught us yesterday. And we actually did something with it in our own shop. And voila, we got an improvement with regard to dial to connect. By the way, we didn't get an improvement with regard to the number of meetings. And I'll make this point, you're going to have to put up with a lot of this yourself.
Chris Beall (22:41):
When you measure the outcome only, and you don't know what the intermediate steps that lead to it are, and you're not measuring those separately, you can get dicked like nobody's business into thinking either nothing is happening when something's happening. So here I'm looking at this. Our dial to connect improved by a factor of two. Our number of meetings stays the same. Our conversion rate went down by a factor of two. Now, is that because we were calling on list that we didn't have a good message for, that is we got the numerical more folks to talk to, but we went up in company size and maybe we need to change our message a little bit. That's a possibility that comes out. Cycle time for that whole thing, one day, right? One day. We don't know it's time to dig into those particular conversations and ask that question. And you're going to be challenged with this, because you want to do this for other companies and they're going to want to resist science, right?
Chris Beall (23:37):
Gerry's describing a scientific way of going to market. He used the word experiment. He meant it. He didn't use it like an experiment. He used it as an experiment, change one variable, run it, stay objective. I love it. Gerry talked about staying emotionally separated, like you can't go in and do science and go, "I sure hope this works. Squeeze harder, and I'll make that buns and burner hotter and I.. Okay man, I'll fro it against a wall, maybe that will make something happen." It doesn't work like that. And I'm an old scientist. I get this. You have to be a little cool to be a scientist, right? Bring a little fancy to it. But what are you experiencing already working with customers, where you are trying to bring a more scientific approach to their go-to market and their market dominance and they might not be resonating with you on it. What is your experience and what do you think you're going to have to do in order to deal with that other than get great customers like ours? [crosstalk 00:24:35].
Shane Mahi (24:36):
Hope either slow or a complete halt to their learning experience or their learning and development. Now with us, as soon as we... So I came from a Mitel phone, then I went to an 8X8 software. I told you about that, Gerry. Yeah, we are using 8X8. We are running and gunning right now. And then we stepped into ConnectAndSell and literally stepped into an Aventador SVJ with polar exhaust, everything mapped out and we just went for it. And the thing is, because it was not only the data, it was adapting to that software and that speed of work and that speed of performance that completely accelerated our growth. And it's because we were able to understand much clearer, much better. We were able to pivot quicker. We were able to understand data sets a lot clearer.
Shane Mahi (25:34):
And simple, simple example of just mobiles versus office and headquarter lines. There's a, it was a 4.49 versus a 9.59, almost a double increase in performance based on the quality of what you choose in your list. So when I'm speaking with companies and we are not using in some instances... No, we are not using ConnectAndSell, and in those instances, the performance is poor. The performance, the activity, the level of engagement is poor because it takes so much longer to understand who we're trying to speak to. However, when we flip the script and we jump into the weapon, for example, we analyze data, we analyze trends, we analyze outcomes, we analyze the performance of the list, I'm able to dig into how do I turn up the notch with each and every one of my reps?
Shane Mahi (26:26):
I can see they're dials. I can see their conversations. I can see everything from front to back and literally have a full dashboard of what I need to learn, analyze, change, tweak, review, and then execute. So to the direct answer to your question is what do I experience if I'm working with customers that don't adopt that behavior is they learn slower, their results are achieved a lot slower, and they halt what the potential is for greatness. And that's where applying the right technology comes into play.
Chris Beall (27:03):
I mean, it is quite interesting because they end up in this. I'm going to coin a Gartner or a Forester type of term. They end up in this trough of disillusionment, where they think they're buying something. The execution is constrained. The learning's constrained. Their mindset goes from enthusiasm to, "Okay, where is it? Where's this amazing thing." And then it goes to concern, and then it goes to, "Just get me the bloody meetings," rather than, "Help us diagnose why the meetings don't exist." Now, the methodology that is superior, it's just coined by McKinsey, right? If I think about what they do to structure an analytical framework over anything that you want to explore is superior. The way we think about it at ConnectAndSell is that there are three inputs, rep-less message. I'm adding another one coaching. How can I coach a velocity? Can I coach well enough? Four components, the four-legged stool, right?
Chris Beall (28:01):
Now, if I'm McKinsey, what am I doing? I'm analyzing information. But there's four things to analyze. There's not one thing to analyze, there's four. So their framework is mutually exclusive, comprehensively exhaustive. Mutually exclusive, I'm going to analyze list without thinking about any of the other stuff. And I'm going to come to a conclusion about list. I'm going to analyze rep without thinking about the odd stuff and come to a conclusion about rep. I'm going to analyze messaging and come to a conclusion about messaging. And then I'm going to analyze coaching and come to a conclusion about coaching. And at the end, I'm going to apply my superior brainpower to analyzing those four conclusions together, to come up with a meaningful, almost perfect analysis of the total, the whole.
Chris Beall (28:54):
Now, one of the things that a lot of people who are inexperienced with processing data at volume, turning data into insight and looking at dashboards is that they're jumping between the themes and mixing their conclusion so that they don't actually come up with the total conclusion.
Shane Mahi (29:12):
That's a good point.
Chris Beall (29:13):
And we get bogged down on this insight culture, with data culture. We love TotalGen. We love the power of big data, but unless you know how to mutually exclusively and comprehensively exhaustive to analyze each of the four components of success, then you're never going to win. And I think, one of the areas in business, which suffers the most still is this massive lack of maturity on the value of analysis and data isn't going to market execution, especially on the sales side. Marketers are starting to get their shit together here, but we still suffer. Now, what I think is unique about your business proposition, Shane, other than the execution of staying meetings is you've got a radical opportunity to rip up the playbook for outsource selling and actually lead with the insight, lead with the data, lead with the value that's created by being able to forensically pick apart the four things, which matter, rep-less message and coaching.
Shane Mahi (30:10):
I like the forensic word that you threw in there. Forensic outsource specialists.
Gerry Hill (30:18):
Hey, you could use that. Go ahead.
Chris Beall (30:20):
It's the words that matter. But there's a royalty attached and it's about 20% [crosstalk 00:30:26].
Shane Mahi (30:27):
I'll pay it.
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