Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I’ve done over a thousand interviews with entrepreneurs about how they built their businesses. My goal is to bring the best entrepreneurs out there to talk to them for an hour and hear how they built their companies so that you can learn from them, you can build incredible companies and do what many, many other people have done, which is come back here and do an interview yourself to teach what you’ve learned and tell your story.
Today I’ve got a story of an entrepreneur who was happily working at a company–maybe I’m assuming he was happy–but he was working at a company and things were going well. Then somebody said something that sent him in a whole other direction. He became an entrepreneur. I’ve got the phrase. I’m going to let him say it in the interview. It’s one of those points in your life, in his life that becomes that turning point.
Then he ended up building this phenomenal company really big. And that’s what we’re here to talk about today. His name is Curtis Hite. Is the founder of Improving. It’s a technology management and consulting services firm. I freaking love the domain, Improving.com. We’ll found out the story of how he got that.
This interview is sponsored by the company that will help you hire a developer, bring him on your team. It’s called Toptal. And it’s sponsored by the company that helped us book today’s guest, Curtis and every other guest on Mixergy. It’s called Acuity Scheduling. I’ll tell you later how they can help grow your sales.
For now, Curtis, welcome.
Curtis: Welcome. I’m very happy to be here.
Andrew: Thanks. Dude, how much did it cost to buy Improving.com?
Curtis: Much more than we anticipated. One thing to recommend or that happened is when we first tried to purchase the domain, it was about $5,000. That was when we first started the company, were not very big. There were some squatters on that domain name. But a year later, we said no, didn’t have the money because we were just starting up. A year later, they were like $10,000. We’re like, “We don’t have the money now. No way.” We were ImprovingEnterprises.com, social much different domain name.
Well, five years later, they started asking over $150,000-$200,000. At some point, we just decided to bite the bullet. Yeah. We got a discount because there were some interesting practices by the squatters. But we still paid six figures for it.
Andrew: What do you mean? What kind of practices?
Curtis: I would call them kind of like some black hat practices, where they created false competition.
Andrew: Yes. That’s the kind of stuff that causes problems.
Curtis: Yes. But we worked through that and acquired the domain name, which was very important to us.
Andrew: I’ll bet. What kind of revenues are you guys doing now annually? Let’s talk 2016.
Curtis: 2016, just looked at that number. We’re in between $43 million and $44 million.
Andrew: Million dollars?
Curtis: Uh-huh.
Andrew: Can you give me an example of a project that you’ve worked on? I know that you guys do so many things. I’m on your site right now looking at the services. There’s consulting, application development, recruiting services. Can you give me an example of a typical project that you work on?
Curtis: Sure. One of our clients is Six Flags. In general, we are experts in building software applications for other companies, specifically custom solutions. We worked with them for their ticketing systems, their season passes, their biometrics, gate access. So, trying to make that more efficient, give them ways to market their offerings to people across the internet, things like that. We’ve pretty much helped them with their entire platform.
Andrew: I used to go to Six Flags Great Adventure every year multiple times when I lived in New York growing up. So, if I were today to go and buy a ticket for Six Flags, I would be buying it off software that you guys put together?
Curtis: Integrated, yes.
Andrew: Integrated.
Curtis: If you got through the gates, we would definitely have integrated and influenced and even developed a lot of the software behind it.
Andrew: I see. So, there’s software that does ticketing. You guys help them acquire it and integrate it into the rest of their operations. Is that right?
Curtis: That is correct.
Andrew: That’s the kind of stuff that you do. Okay. The job that you had that I mentioned earlier was in the defense industry. What were you doing there?
Curtis: We were doing software application development, essentially developing large scale applications for the defense industry. I was working for a large system integrator.
Andrew: These integrators are huge companies. I’ve only worked in smaller companies. I’ve never worked at large enterprise. I didn’t realize how much integration is such a big thing. Why is that?
Curtis: Because software systems are very complex. People have very complex ideas and to develop a software system, let’s say, for the defense industry, you might have several $50 million applications that take years to develop and then getting them to talk to each other in a secure manner, as you can imagine, costs probably as much as it did to develop original systems.
Andrew: Yeah. Our level, we use Zapier, for example, to just connect to software. You’re smiling. You know what I’m talking about. But enter the large enterprise level, this is what they need to do. Was I right in saying you were happy? It seemed like you were doing okay there.
Curtis: Very, very happy there, extremely happy at the company. It’s great work, some of the most interesting projects I’ve worked on today. So, yes, I was very happy.
Andrew: I love that Ari our producer at Mixergy first talks to guests and one of the things that she learned as you she was talking to you is that an administrator said something. What did that person say?
Curtis: Okay. So there’s a little bit of a story behind that. We were trying to create an internal consultancy for this large system integrator. I just want to keep them private for now.
Andrew: Why? Why were you doing an internal consultancy?
Curtis: We were trying to attract top talent into the organization. In larger organizations, very structured salary bands, it’s not as entrepreneurial. And as a result, we were trying to attract people that had very new skill sets in the industry and it didn’t fit within the salary bands to get the correct people into the company. So we were trying to create an internal consultancy, one that was a fully owned subsidiary of a business unit that could provide these services, act, outside the company, be completely owned by the company.
We’d presented a business plan to the general manager of our local entity. It was about 3,000 people at the local organization. When it up the chains at a corporate level, what came back was essentially, “Tell those software weenies to get back to work.”
Andrew: Weenies, like, “Stop trying to recreate our company and just work, you weenie.”
Curtis: You got it, and I’m a software one at that. I read that message and the first thing I thought was–the assistant showed me the message. It wasn’t my assistant, the assistant to the general manager. You think about that and you’re like, “Wow, these people have a whole lot more influence than you can ever imagine and you’ve got to be careful on that.” She was a friend. She’s just like, “I’m sorry. This is kind of at a dead end at this point because look what happened.” When I looked at that message, I was like, “Wow. . . That’s rough.”
I still remember my employee number. I was 139622. I think that’s what showed up on every form too. But I was kind of like, “Wow, I’m a number. I’m a software weenie. This business plan was developed completely outside on my own time with a few of the partners.” I said, “You know what? Why not start a business instead?”
Andrew: So, you started a business.
Curtis: [Inaudible 00:08:23].
Andrew: Sorry?
Curtis: So I started the first business, which wasn’t Improving. It was a different business.
Andrew: What was that business?
Curtis: The company was named Expede and within a year, this was right before the dotcom or during the dotcom, we sold it to a company called Valtech. We became their North American operations. We went public within a year.
We rode the market up, €7 a share to €370 because we were on the Nouveau marché in Paris, which was exciting going to Europe all the time. We had a $2 billion market cap, yet our revenues were only like $100 million. It was fun but not real. Then we came all the way down and that was back in 2000. But eventually that company was very fun, learned so much. End of 2006, we parted ways there and in 2007 started Improving.
Andrew: Yeah. I see the press release from February 23rd, 1999. Valtech put out a press release about the deal. This was just before the whole thing fell apart. So, you really got the whole ride.
Curtis: We got to ride it all the way up.
Andrew: You got the ride up. Then I think it was towards the end of that year things were getting shaky and then the following year was the worst year in tech ever, at least in the startup tech world.
Curtis: Absolutely.
Andrew: Then you went on and started another business.
Curtis: Yes.
Andrew: The next business was called what?
Curtis: Blue Ocean Group. Based on the book–you know, forward thinking people, competition can be what you make it, where you can choose to differentiate and have an entire blue ocean, there’s a book on that. We liked that name. Quickly, within probably two months of us establishing the company, we purchased a company called Improving.
Andrew: By the way, before we get to Improving, were you able to name your business Blue Ocean Group after–the book was called what, “Blue Ocean Strategy?”
Curtis: Yeah.
Andrew: That’s not an issue? Sorry?
Curtis: Yeah. We had named it Blue Ocean Group.
Andrew: I see. Okay.
Curtis: Still own the URL, still own the company name, the registry in the state of Texas.
Andrew: You just said, “I like the way these guys are thinking. I’m learning a lot from them. I’m creating a consulting company based on what I’ve learned from them and also what I know.” You start doing it and then a year later you acquire another business.
Curtis: Yeah, months later.
Andrew: Months later. Why acquire another business? Why not continue with this business first, with Blue Ocean?
Curtis: Well, Blue Ocean was under the premise of we wanted to start another consultancy. So, Improving was aligned with that. When we purchased it, it wasn’t with cash. It was with equity at the company, merged, give about five people an opportunity to join our leadership team, many of which originated and worked with me back at the large system integrator back in the early 90s.
Andrew: Where you were a number?
Curtis: Yes, 139660.
Andrew: I love that you still remember it. But you were also thinking, “This Blue Ocean Group could become kind of an incubator,” right? You wanted to have lots of different businesses. You’re smiling. Tell me about that initial strategy.
Curtis: That was the aspiration. I have the journal, “We can do this and we can do this.” So, I probably had 20 ideas and one of the first things was one of the organizations since we’re familiar with it will be a technology services company, a management consulting company. When we had the right intentions, this would be just one.
It worked so well with the leadership, then we grew, then we grew again. Eight years now running, we’ve been on the Inc. 5000 and it takes a whole lot of time to run a company that’s growing that fast, which meant there really was very little time. I was the de facto leader in that, not de facto, I was a leader. It consumed all my time.
Andrew: I see.
Curtis: It still is.
Andrew: It still does?
Curtis: Yeah.
Andrew: Yeah. I’m amazed and appreciative that you were willing to sit down for an hour. Also you know our process means another hour with the producer to make sure everything is all squared away and I appreciate it. I see. You’re on a rocket and you say, “Why get off this rocket and start to create a second rocket. Let’s take this one up and see how far into space with can go with this.”
Curtis: You got it.
Andrew: Where’d you get your first customers or how did you grow this thing in the beginning in the first few months?
Curtis: So, a friend of mine and one of the founders of this company, his name is Craig left the previous company, which was Valtech. People kind of knew I left. I was a very visible leader in the Dallas community. So, they started to suspect that other people might not say at Valtech. They approached Craig about hiring him–great friend, longest term friend I have in Dallas from the early 90s. Instead of him saying, “Yes.” He’s like, “Curtis is starting up a new organization. Talk to him.”
So, our very first lead came from pretty much my earliest friend in Dallas saying, “They want to hire me. Maybe you can convince them that I can consult to them.” And that’s what we did.
Andrew: So, you basically said, “Look, you still get my services, but hire me through this company.”
Curtis: That’s right.
Andrew: What’s in it for him that he’s basically getting you a new client but he still ends up with the same job? Why would he rather do that?
Curtis: Being part of something bigger. We have a very, very tight culture. We have about 15 to 20 people that have worked together for almost 20 years from 1994–actually more than 20 years–he and I since 1994, several more from 1995, early 90s, my business partner here. That was one reason because we were a good group. The other is in starting this second company, the model was a shared equity model. From the very beginning, I shared effectively 87% of the equity. I kept around only 13% for myself.
Andrew: I see.
Curtis: There was a lot in for him. Today, he’s actually the fourth-largest shareholder.
Andrew: I see. Okay. That makes a lot of sense. Tell you what. There’s a reason why you’re the leader and it goes back to your past. I want to investigate that and then come back to how you got your next batch of customers. First, I should talk about my first sponsor. It’s a company called Toptal.
I’ve got to tell you, this guy Derrick Johnson from my audience came to the office here at Mixergy. I do scotch night from time to time because I want to talk to entrepreneurs in person and get to know them. This guy Derrick not only comes in. He comes in bringing Leopold Brothers Rye Whiskey. Are you a whiskey drinker?
Curtis: I love whiskey.
Andrew: I do too. What’s your drink? Which one?
Curtis: I just like whiskey on the rocks. I like Basil Hayden. I like some of the Texas brands like Garrison Brothers or TX. Every day maybe–not really every day–but if I were to eat something pretty standard, like I guess Basil Hayden would probably be it.
Andrew: For me, Glenlivet is like my daily, though I’ve been really enjoying rye. Leopold Brothers is Maryland rye, Maryland-style rye. I’d never heard of this before I lived in DC. There’s someone who’s family was part of it who came to a party. She introduced me. It was terrific. I mentioned it in an interview. This guy comes in to scotch night where he knows I’m serving scotch. He brings his–he found Leopold Brothers, this hard thing to find in California. I say, “Derrick, thank you. I appreciate it.”
I quickly open it and start to share it and we talk. I come to understand the reason he brought it is he’s appreciative because I told him about this company Toptal. See, Derrick, I don’t even remember what part of the country he’s in, but I know he’s not in San Francisco. He’s not in Silicon Valley. He doesn’t have access to like Google-level engineers because he’s just running a business.
Because he went to Toptal with his CTO after searching through 20 to 30 interviews trying to find somebody who’s like Google-level quality because he needs a good developer, he said, “Let’s see if this guy Andrew knows something.” He’s talking about Toptal. Let’s check it out.
So he called up Toptal. Toptal got him two different people. His CTO any one of those two would be good. They found the person that they clicked with. They hired that person. Now that person is working not just full-time, but I think it’s called full-time plus all within Derrick’s company. The company is called Tatango.
The CTO says, “This guy is as good as me.” Now Derrick is hiring more and more people from Toptal. That’s why he brought me Leopold Brothers, because he’s so appreciative that I helped him find someone who’s Google quality, Facebook quality, which he wouldn’t have access to. The process of hiring them was easy.
So the reason I’m telling you guys this story is because if you’re listening to me and you’ve heard me talk about this and you need to hire someone who’s like top three percent, that’s what these guys are doing. They raised money from Andreessen Horowitz because Marc Andreessen and the team at Andreessen Horowitz believes in their vision of creating a way to produce a database of the best of the best developers and make them available to businesses like the ones that you’re running, if you’re listening to me.
If you want to check them out, they’re offering a great discount. Not a discount, they’re actually making a great offer to Mixergy listeners. The creator of Toptal is a long-time fan, so he wants the relationship with Mixergy to work and he wants to support other Mixergy fans too. So, this is what he’s offering–Mixergy listeners are going to get 80 hours of Toptal developer credit when they pay for their first 80 hours and that’s in addition to a no risk trial period of up to two weeks.
If you want that, go to Toptal.com/Mixergy. And don’t feel obligated to give me a whiskey, but if you really are happy with it, I would love it for you to come here to Mixergy. I will share my Glenlivet and a couple other favorites and we can drink Leopold Brothers to celebrate.
All right. I’m grateful to them for sponsoring. And I’m grateful to you, Curtis, for being okay with them being a sponsor. I always say to my guest, “Here’s who my sponsors are. Are you okay with them?” And you said, “You know what? It’s a bit competitive with us, but go for it. If that’s who your sponsor is, don’t switch it up for me.” I like that kind of confidence.
So I talked about your leadership skills. I’m sensing confidence from you. It constantly comes out. Does this go back to the Air Force?
Curtis: Okay. So, I was in the corps. Yes. At Texas A&M, I was a member of the Air Force. I think you learn a whole lot by being in the military. Back in the late 80s, early 90s, I had the opportunity at Texas A&M, going to school, also being paid by the Air Force to go school, but you learn and you’re in this environment where you’re forced to lead.
By about 20 years old, I’m the commanding officer of one of the squadrons there and had about 70 people or no, 100 people, somewhere in the neighborhood that reported in to me, effectively. You’re forced to learn a whole lot when you have 17, 18, 19 and 20 year olds running around because there are a lot of fun challenges there.
Andrew: Testing you.
Curtis: Oh yeah.
Andrew: Testing their limits.
Curtis: You find yourself at the hospital. You find yourself getting people out of jail. You find yourself. . .
Andrew: They’re not just testing your limits. They’re testing society’s limits at that age. You have to go and protect them from it. Do you have a memory of a time when you felt like, “You know what? I’m only 21, but I got this. I’m a leader?” Is there something you did that surprised you?
Curtis: Surprised me, I don’t know about surprised me. But you start to notice that people gravitate towards you or you seem to be a better connector than maybe some of the other people around you. That became evident. Another thing that taught me to take a little bit of risk, along with a few other things.
Andrew: Like what? How did you take a risk back then?
Curtis: Pardon me?
Andrew: How’d you take a risk back then?
Curtis: Sometimes it’s not the best risk or the smartest. I don’t know. I could tell a story that’s a little incriminating.
Andrew: Do it.
Curtis: You’re trying to motivate the people in your squadron, a lot of the younger, newer people. One of the things we used to do is get Christmas trees and put them in the barracks area, the quadrangle. I kind of authorized our freshmen to go and cut down a tree, a big one, like a 40-foot tree and it happened to be–they chose one that was on the grounds of an airport and they cut down this huge tree and brought it back and they tied it to a light pole.
When everybody fell out, it had our squadron name on it, everybody’s whooping and hollering and things were great. Then about 4:00 in the afternoon–I knew it was a risk, but then the pole came down and there was damage and we had to pay for the damage to the university property. They asked who this was and that was me. So, I marched bull ring for effectively two weekends, where you literally get up in the morning, march in a huge square all day long.
Andrew: All day?
Curtis: All day. You do that for multiple days. You get inspected, then march more. Then you get inspected. They do let you eat and stuff. But you take risks like that. You know you need to inspire and motivate and things like that. There’s sometimes a combination of taking a small risk like that in order to motivate and connect with people that work for you.
Andrew: I see. And why do you think that helps them connect with you?
Curtis: One is it takes courage to take risks and then they see people that are taking risks that knowing themselves, maybe they wouldn’t have taken it. Seeing somebody willing to do that knowing there was a big unknown, I’ll relate that back to the company, right? There’s a big risk in starting a new organization. One of the things that one of my partners did, Ric DeAnda and myself is for the entire year, we didn’t take a salary. That’s a big risk. You have a family. You have people you need to support. What happens if it goes wrong?
But that also showed a commitment that, “I have the courage. I believe in this company so much from the long-term perspective,” which I think encourages others, “This guy is going without a salary. That’s how much he’s committed to us, dedicated, yet he also believes in the future because who goes without being paid for too long if they don’t believe in what they’re doing in the long-term picture?
Andrew: I see. It wasn’t liked you owned the whole company, so it doesn’t matter because if you’re not taking a salary, the equity is going to make up for it. You’re sharing that too with them.
Curtis: 87%.
Andrew: What is it that you believed in so much at the time that you were willing to not take a salary? What were you guys doing that you believed so faithfully in?
Curtis: I believed in the people. A lot of these were my friends from Raytheon that then came and followed me to Expede, which became Valtech. Then they’re following me here. I believe in the people. It’s one of our core values, involvement the model to go beyond that is essentially our success has been a consequence of our collective involvement. Even today, over 90% of our leads for business just like that very first one come from outside our business development or marketing teams.
Andrew: 90% come outside of marketing?
Curtis: Or business development.
Andrew: What’s up with marketing? Let’s get them on track. Work harder guys.
Curtis: What happens is they give us the programs, the entire company the programs to actually get out. We’re a services company. We’re a professional service which is relationship-based business development and we do all sorts of activities that get us involved in the communities and the industries and they provide the platform. In the end, very intelligent buyers, very, very intelligent–CIOs, CTOs, COOs, sometimes CEOs are buying what we do.
A sophisticated buyer usually buys from somebody that’s a sophisticated seller. And a traditional account manager doesn’t have the knowledge sometimes to do things on their own. They get encouraged by having all of us out in the community. We speak, for instance, over 360 speaking engagements per year.
Andrew: Who gets that? This is where you guys get your customers. So, when I use my standard tools to figure out how you get customers, they don’t work because it’s not about a Google ad that then leads to a customer. So, let’s talk about the details of what you do. Speaking is one of them. Who books that many speaking engagements for you? Who works with your team to know you have something clear and well thought out and well-presented so that you’re using the opportunity properly? What’s your process for doing that?
Curtis: One is we extend trust to our employees, our principals, our leaders. This is a top-down–I probably was in front of groups eight to ten times last year. It starts at the top. They get to see me present.
Andrew: Who books you in that many opportunities? I know I could get tons if I wanted it, but somebody on my team would have to be on it to make sure it’s scheduled properly. Who does that for you? What’s your process for that?
Curtis: Pretty much individuals. Within the company, they know I’m more than willing to speak, so if somebody is kind of anxious about speaking, they know that there are people in the organization that are not. So, they’re on the lookout. They know that this is part of our very DNA, our culture. I’ll give an example. Two of the presentations I gave were setup by two different recruiters that we had within the organization. Somebody comes to them, “Do you know everybody that would want to speak on this topic?”
Andrew: I see.
Curtis: They’re like, “Yeah, our CEO will speak.”
Andrew: So it’s not a process of looking for speaking opportunities and somebody in charge of booking it. No. Whenever there’s an opportunity, somebody hears it and says, “Hey, our CEO can do this or I know there’s somebody on team who can handle it.”
Curtis: And then some people actively look. They get interested in a topic. They go research it and we have an entire program about engagement, what we call our employee engagement program, involvement program. That program, they get recognized for speaking. They get points for speaking and in fact, become a new member in the organization.
The number one way is they earn these points from this program. It’s like time sheets except it’s an honor-based system and if you’re in the top ten for an extended period of time showing ownership behavior, we make you an owner.
Andrew: I see. And ownership behavior includes going out there and speaking. So you don’t need to find a speaking opportunity for them. They know ownership behavior is speaking. There’s an incentive for me to go and find it. I’m an owner or will be. I should go and find it myself. That’s one of the things you guys do. I see.
What about–so, my wife works at Yahoo. She’s the Director of Yahoo for Good. I was amazed that when she got the job there, when she had a speaking opportunity, it was no longer her creating slides for herself the way it was at nonprofits that she worked for. There was a team of people that made sure the Yahoo brand was represented well, that she had support in figuring out how to express the message that they have in slides that look good and communicate to the audience what they were trying to do. I had never seen this before. Do you guys do any of that or is it on the individual to figure it out?
Curtis: Very little. We offer help. So, we have a few things that guide us, some of our guiding principles. One is dedication. One of the guiding principles is own the company name as if it were your own. So put something out there you’re proud of. If you need help, another is under dedication–give freely of your time, knowledge and resources.
So we have so many people that like to speak that get involved in the community that are more than willing–a lot of people that are doing it for the first time will practice in front of others. They get ideas about their slides. But if you’re on an owned presentation and own the company name, don’t put something out there that’s going to embarrass you or the brand and trust is a big thing. So we extend a lot of trust to them. Our style is not to push the brand. What we do is we genuinely give of our time, our resources, our knowledge, give back to the industry, give back to the community, give back to each other. Just good things happen. You never know where they’re coming from. Good things happen.
Andrew: So, what else do you do that’s considered marketing but doesn’t directly relate immediately to a sale?
Curtis: Supporting the local community, we do user group and professional group support. Because we’re also a training company, in every one of our offices, we have one to three training rooms. What happens when those training rooms in the evening? Nothing except for the average company. What we do is we make them available for professional groups. I was just looking at the metrics today. We had 51 unique professional groups that used our Dallas space alone in 2016.
What’s more impressive is we have an average of 40 professional groups that use it each and every month. We probably have over 1,000 people coming through our space every month and that involvement program I told you about, you get points for hosting the office space that night. We have a big board and there’s a picture of the person hosting that night on it. The three to four groups that are using our space every single night, thousands of people a year come through our space because of that.
Andrew: I see. So, if I had like a Toastmasters group, you guys would host my Toastmasters group?
Curtis: That’s funny. We host Toastmasters.
Andrew: You do? What are some of the more directly related to your business organizations that meet there?
Curtis: Okay. So Scrum Alliance might, which is a software process scrum. That might. A local .NET user group may use our space, which is a technology. We have the American Marketing Association that’s used our space. While they’re not directly related, digital marketing is very, very close. We do not do this. We are non-discriminatory. If you want to use our space and it’s available, come. Not only do that, you just give us a call. Tell us how many people. We’ll provide the food. We provide the drinks.
Andrew: Provide the food?
Curtis: Oh yeah, at night. So, definitely.
Andrew: Wow. Space for events is hard.
Curtis: Yeah. Well, we have classrooms that seat around 30 if we need to. We have some that open up bigger and they can seat 100. We had a large, large crowd last night. I think it was one of the Agile groups meeting here.
Andrew: How do you guys manage that? I know there’s one company here that’s really good about that. It’s called NerdWallet. They have an internal space that’s like theater seating for I guess their own internal events and they make it available to lots of different organizations. But they have someone who sits at the door and makes sure that every guest is greeted properly and signs in and doesn’t end up walking around where they’re not supposed to. I think they even hire security. It seems like a massive operation. You’re bringing in food. Do you have to hire someone to just run this thing?
Curtis: No. In fact, we leave our office after we’ve welcomed everybody.
Andrew: That’s it. Some random guy from Toastmasters is in your office space and you guys are okay with that?
Curtis: At night without us. Yes. We’re a very open environment with computers over the place. At some point, I will say we’ve had a few thefts in the past. You know what? To me, that’s unfortunate that people might take advantage of the space, but it’s not worth starting to introduce a non-trusting behavior when the incidents are so few. So many people appreciate what we’re doing and we’re known for it now that we’re over-subscribed. There are groups waiting to be at our space.
That’s not just in Dallas. We have about 14 or 15 in our Columbus office and we have 6 or 7 that are now in our Minneapolis office. This starts to build, gains momentum. We just want to give back. It’s part of a greater movement called Conscious Capitalism. We are part of these ecosystems, the stakeholder model and it’s one way we can do it that yeah, it costs us a couple hundred thousand dollars a year to support these groups.
We don’t know if a lead comes in from that or not, but what we do know is we’re doing good for other people. We’ve hired people that experienced us through those things. So, there are some recruits or we’ve gotten business, I’m sure. I can think of a few instances, but that’s not why we do it. It just happens out of what we do.
Andrew: What else do you do like that? I had no idea you were doing this. Now that you mentioned it, maybe I can kind of see it on your site, but the only mention I could pick up on is public classroom. Maybe that’s what could tell me I could use it. So, I had no idea. What else do you do like that?
Curtis: We don’t advertise it. That’s the thing. At this point, it’s not advertised. We just offer it and word of mouth goes out. Another thing we do that gets a lot of word of mouth is we do public events in each of our offices within our technology community, let’s say. We do movie nights. We have people–we do a premiere. We did a premiere for the “Star Wars” movie the night before.
And we open it up to our stakeholders, whether it’s our suppliers, our clients, our employees, the technology communities of the people that come to our space. We will get 500 people at a movie night. “Hey, come watch Star Wars for free with your family. You’re never going to hear us pitch you.” We don’t say–we’ve seen competitors sit across, do the same thing literally across the theater from us and you have to sit through a 30-minute presentation before you watch the movie.
I’m like, “That defeats the purpose.” I don’t even want to talk about my company before. Why would you want to? We do these events and attract 500 people or so to some of those events. We do this across the country. That night, we probably have 1,000 just seeing the improving brand, having fun with their families. How many events that you know from a business focus on a family versus the people they want to sell to? We like to just give back to the families that give so much to us.
Andrew: I see. This is your stakeholders meaning not just employees, but maybe a supplier, maybe a customer, that kind of thing.
Curtis: Right. That’s part of the Conscious Capitalism model.
Andrew: Conscious Capitalism is an organization–my wife was a big part of it I know when we first got here to San Francisco, it’s one of the first groups she looked out for. Can you talk about that for people that don’t know it?
Curtis: Absolutely. One of the co-CEOs is out in San Francisco, worked with him, Alexander McCobin. They have a great active chapter there. It’s an international organization that is committed to conscious business and they are based on four pillars. One is you have a purpose beyond just making profit, where organizations and we need to contribute and have something besides just making money.
The second pillar is the stakeholder model that it’s not just about the shareholder, employee and customer which seem to be the typical stakeholders that people look out to. If you’re a public company, then the shareholder kind of rules the day but you have your employees, but you also have their families. You have the communities, small communities that you’re involved in and they’re a stakeholder because they benefit from your business being there and the families of your business being there.
You have your industry. Suppliers should hold a very similar status to your customers, but that’s not the case. Partners are part of this. We treat them all the same way. Our events, if you’re a stakeholder, you get invited to our events, not if you’re a customer and we want to sell to you. We’re just part of a larger ecosystem when it comes. Giving back to all those stakeholders are so valuable and important. That’s second tenet.
Third is a commitment to culture. We’re a best workplace. You have leaders that are really committed to creating a great place to work. We’ve been number two in the state of Texas, number one in the state of Ohio. Then finally, the last pillar is about conscious leaders, leaders that are striving to be more self-aware that want to continuously get better, improving, it’s what we do, part of our name, really just having this general awareness about getting better. Conscious leadership is kind of lacking.
So Conscious Capitalism is this community including Whole Foods, Trader Joe’s, Container Store, First United Bank, that come together each year a couple times really trying to push these four pillars forward.
Andrew: Yeah. I went to some of their events. I heard the founder of Method soap talk about how having a mission beyond the business behind selling soap helped him sell more soap. I can see how that works. In a world where we’re tracking every order, where we can assign tags to every customer based on where they came from, it really takes a leap of faith to say, “I know that doing this is actually going to grow my business, but I’m not going to be able to tie an order back to this and I still trust it.” It takes courage speaking up.
Curtis: It does.
Andrew: All right.
Curtis: A big leap of faith.
Andrew: All right. I want to come back to how you raised money in the beginning–very, very, very tiny, wow, I’m surprised you even needed to raise that money and then how you grew the business and then what happened, since we’re talking about Texas, what happened when the energy industry had a tough time.
But first, I’ve got to tell people about this software that I’ve been using for about as long as I’ve done Mixergy. It’s called Acuity Scheduling. You booked, Curtis, this interview using Acuity Scheduling. Any time I want to talk to people, I use Acuity Scheduling. So, I had this thing where I decide–you teach classes, I teach classes–I thought, “I have an idea for something I want to teach. I don’t know if anyone’s going to even buy it.”
So what I did was I just sent out a message to a few people in my audience. I said, “I’m thinking of teaching this. Would you be interested?” A bunch of people said yes. I said, “You know what? Can you tell me why you’re interested?” They filled out a form saying why. Then a final step was, “I want to know you really are willing to pay for it. Would you be willing to put down a deposit? I don’t even know what it’s going to cost or when it’s going to happen. I just want to know are you really willing to pay or not. Would you put down a $30 deposit?”
A bunch of people did. I thought, “Great. This means I should create it. There’s a market for this thing that I want to teach.” Most people at that point would stop and say, “There’s a market. Go create it now and sell it to them.” But I like to go the extra step of actually talking to the people who put down money, even though it’s just $30 it’s important for me to understand why they did it. Now, coordinating with dozens of people and getting them on the phone is a nightmare.
First of all, I can’t just pick up the phone. My people don’t pick up phones. They’re Facebook Messenger people, text messaging. They’re not going to do it. And also, coordinating and keeping track of calendars is tough. So, what I did was I went to Acuity. This really took me a few minutes because this is my habit.
I created a calendar in Acuity. I said, “I want to know the person’s phone number. I want to know their name and maybe one or two other questions. Here is the availability. I’m available Thursday to do this, Monday at this time to do this, etc.” put it all in and boom, I got a calendar. I actually embedded it on my website and then I went back to everyone that paid $30 and I said, “I want to get to know you. Pick a time off my calendar that’s fitting for you and let’s get on a call.” They picked a time from my calendar. They scheduled a phone call.
At the time I was scheduled to talk to them, it was on their calendar and my calendar. They got a reminder email before so they knew to be there. I had their phone number on my calendar so I knew where to call. Just so organized. I got on the phone and I understood why they wanted to buy it. I understood what they were looking for. I understood they were willing to pay $1,500, $2,000 for it, but not $5,000 for it and $100 would be too little based on what they were looking for. It taught me a lot.
If you’re listening to me and you’re not talking to your customers, there’s a good chance it’s because it’s just too complicated. If you use Acuity Scheduling, they’re going to make it really easy for you to make your time available for your customers are for your customers to book with you.
More importantly, once you book it, for both sides to show up when they’re supposed to. Acuity will put it on your calendar, on their calendar. It will send out reminder emails. They’ll send out reminder text, so much like that. That’s what allows me to coordinate over a thousand interviews on Mixergy because Acuity organizes it. That’s what allows me to also follow up with people.
If you want to follow up even more–we talked about Zapier–you can connect Acuity to Zapier, which means when someone puts their name in their system and books a time with you, Zapier can maybe add them to a spreadsheet. Using the integrations that are built into Acuity, you can add that person to your CRM. You can add that person to an email drip campaign. You could do so much. You could charge. If you’re talking to people and you want them to pay, you can charge.
My favorite use is companies that say, “Sign up and as soon as you sign up, they say, “Here’s my calendar. Book a time. Let’s talk about how to use my software. Let’s talk about your needs. Acuity will even grow with you, so if you can’t take these phone calls anymore because you’re getting too many, you hire someone and add their time to the single calendar and that’s available to your customers.
I’m talking a lot about features. I’ve got to tell you, the benefit of talking to a person can only be felt. I really urge you to go and try this. Go to this special URL where they’re giving us a ton of time. Frankly, I know they’re giving us so much time that a lot of listeners are going to just use it and never even have to pay because they’re going to get the value so fast, but it’s worth it because for many people, this is going to be an integral part of their business.
So here’s the URL where you’re going to get 45 days free and really see this. It’s available at AcuityScheduling.com/Mixergy. They’re actually even going to give you a private one on one consultation, if you want, with an Acuity pro. It’s really a great program–AcuityScheduling.com/Mixergy. I’ve used it for years, maybe over half a decade now. For a long time I’ve referred people to them before they even sponsored and I’ll continue to do it if they ever stop. It’s that good– AcuityScheduling.com/Mixergy.
Curtis, coming back to–what do you think of the way I did that ad? I think it was a little bit long, but I’ve got to work on cutting it down. Other than, what did you think? You’re a marketer.
Curtis: It’s pretty natural. I’ve been musing at how both you kind of integrated in the discussions, integrated into the story. While you’re sponsoring people, you’re supporting them. I find it very interesting. I thought it was pretty good.
Andrew: Thanks.
Curtis: I’m not kidding you.
Andrew: Thanks. I appreciate it.
Curtis: It’s better than just–you’re not reading, which to me is very important.
Andrew: Yeah, which at times means I have a disaster for an ad and the sponsors are still willing to pay for it. But I think it’s worth having a bad ad read sometimes to keep that genuine feel so people know I’m talking about how I use it and not reading from a script.
Curtis: Yeah.
Andrew: I’m looking at notes for you. One of the things you told Ari was after you guys launched, you raised money. How much money did you raise?
Curtis: $165,000 total.
Andrew: In your industry, that’s nothing because you’re talking about large integrations. Why did you need to raise that money?
Curtis: Simply to help with cash flow at the very beginning. So, in our industry it’s typical that we start to help with an integration or building an application. Let’s say we start it on January 1st, we give their first invoice on January 30th or 31st. They might pay 45 days later in mid-March.
In the meantime, you’ve had to pay for the person doing the work for five pay cycles. No cash has come in, yet you’ve had to pay five pay cycles or ten weeks’ worth of work. That’s a big challenge in an industry that’s professional services where people are your expense. So, that’s very costly. We just needed enough money to get us over the hump of–
Andrew: Getting paid.
Curtis: Those initial months starting up the company. We actually had help from our bank as well, which was really wonderful. We had a reputation with the bank and they gave us an unsecured line of credit for $500,000 in addition to that.
Andrew: The reason they felt comfortable I’m assuming doing that is because you said, “Look, here’s my agreement with this client. They’re good for it. Once we get paid, we can pay you.” Is that right?
Curtis: No. Actually it’s because of how they worked with me back in the dotcom days at the previous company. They were my bank back then. What ended up happening–they’re still my bank today, very happy with Silicon Valley Bank, to be honest.
Andrew: That’s who it was, Silicon Valley Bank?
Curtis: Yeah. There’s my plug for a partner that’s stood by us for a while. I can remember right after the dotcom bust, more or less, our largest client at the time was Enron. We had built the software, our consultants had built Enron online. It wasn’t that we misused it. It was we had built this great highly transactional system.
They owed us millions of dollars and they went bankrupt and our largest client went away at the same time, meaning not only were they not going to pay us for the past, but we didn’t anything coming in a large employee base. I remember getting all of our suppliers together, our partners together and saying, “If we’re not careful, we go out of business. I don’t know how I’m going to do it, but everybody is going to get your money back over time and things like that.”
The bank saw me so committed. The easy thing would have been to file bankruptcy. It took us two years to pay off all of our debts and things that we owed because of that but we did it, didn’t file bankruptcy. It took salary decreases on me and my partners along with other people volunteering, but we paid every debt we owed.
So they had seen us work through that. I think they felt secured that if we did have a debt, we’d do everything we could. The nice thing is that we never had to invoke it. Yeah, we borrowed against the line just for cash flow, but our bank has been a great partner and gave us what we needed at the time.
Andrew: We don’t think about bank loans at all, actually. I remember I started my first business right out of school. My bank gave me a $50,000 unsecured line of credit, actually a loan. They just said, “Here, it’s in your account, now you can start paying us interest.” But I can go in my account and now see zero. I can actually see $50,000+. That was shocking.
Curtis: Yeah. Silicon Valley has a tendency to understand technology companies better than most banks that might look at you just like a restaurant business or something else. So, they’ve been a good partner. There’s my plug.
Andrew: It’s worth it. So, I see how you got your first customer. The next batch of customers came that way too. You were starting to grow. Before we get to the downturn, I’m curious about how you knew what to develop into. When I looked at what you offered when I went to Improving.com, I was surprised that with the mix of things you did that you also did training and coaching. I’m wondering why. Why do training and coaching in addition to consulting services, application development, recruiting? All those things fit and they bring in high revenue. Why also do an Agile services workshop?
Curtis: Okay. So training very close to coaching is helping other people learn. One of the things we like to do, we’re not cheap people. We have very, very talented engineers at the company, project and program managers. One thing that is not good is for a client to get too reliant on us if they’re not prepared for that. So, one way is to make them more self-sufficient. So, if they don’t have the skills, we need to have the skill set to train them and help them become self-sufficient. That’s a big part of the model.
The other is there is a wide need for training out there. In a down market, it’s the first thing to go, it’s the last thing to come back. But we train thousands of people each year now and that’s another source for potential new leads. They get to try–instead of a half a million dollar project or two million or even $100,000 project, they can send somebody to class and get an idea of the quality of professional services that we provide.
It might be $1,500 for an individual seat in a public class or it might be $15,000 for a dedicated class, but they get to try our services at something that is not at the average price point that’s six figures or beyond almost all the time.
Andrew: I see. I’m looking at one of the classes, Agile Team Dynamics. To give people a sense of pricing, it’s $895. I’m wondering who teaches this and other classes. Is it the people who also would be on the job for other projects?
Curtis: Yes. So we have some instructors, just two, that are full-time instructors, but full-time instructors means you probably instruct about 50% of the time and you consult others. Then we have a whole pool, 15 to 20 adjunct instructors that consult probably 80% to 90% of the time and then train 10% to 20%. We have two that are dedicated, we rotate some of those and the rest we pull from those consulting ranks. You’re getting people training you that actually do it.
Andrew: Why? Why is it important that somebody who’s actually doing the work train? Why take them off a job where they might be making more money?
Curtis: Well, big difference between theoretical learning and practical learning. The people that do this on a regular basis know how to apply it. It’s part of our training model as well. When you take a class from us and your company takes a class in let’s say scrum or Agile, project management or something like that, our classroom instruction doesn’t end in the classroom, it ends after we’ve helped you apply it, meaning we will then send a coach or consultant out to your site.
We’ll give you a four-hour project estimation workshop applying it to your business after we’ve trained you. We believe that that type of thing just rounds out our services. It goes hand in hand with consulting, helping people learn, helping people get better, helping people to improve.
Andrew: Is it also that it helps the consultants understand the software better, understand the methodologies they’re teaching better? Is it training the trainer while the trainer is training the students?
Curtis: Any time you train or speak, you become more professional. You become more skilled at communicating, which is great for any consultant. We can give that training inside the company. We sometimes do as part of our Improving University program, Improving U as well as a slew of other classes for our employees. Yes, it helps you become a better professional, more valuable to the company if you can do that.
Andrew: One of the things I’ll let you in the audience in on a secret. One of the ways I understand what’s going on inside a companies I use Glassdoor. I don’t usually talk about it because I don’t want the guest to know where I found stuff out. But Glassdoor is such a great resource. No one thinks of looking at Glassdoor until they’re trying to get a new job. But if you’re doing work with a company, looking at Glassdoor gives you insight into their culture, how they work.
If you’re researching someone for an interview, it helps. If you’re trying to figure out what your competition does, why people work with them or don’t work with them–so helpful. You guys actually link to Glassdoor. You actually use those little widgets that nobody else uses to link over. The reason you do it is because you have such positive reviews on Glassdoor, right?
Curtis: We have a few that are not.
Andrew: It’s not 100%. It’s like four out of five stories.
Curtis: Overwhelmingly, it’s really good. Yeah.
Andrew: One of the things I’m learning is your people are happy there, of course, but one of the challenges is you guys seem to require a lot of initiative, right?
Curtis: Yes.
Andrew: Am I reading this right? Here’s an example. “Sometimes a company requires you to take initiative to get full value out of what Improving has to offer. I missed this when I first came on board. Any way you can encourage us earlier to help us see what we’re missing out,” that’s like the one con in this one anonymous employee in Dallas, Texas, right?
Curtis: Yes.
Andrew: Why are you smiling like that? Did I pick something out that is a little awkward?
Curtis: I enjoy this. No organization is perfect. I love to get the feedback. I monitor Glassdoor. I look at it. I strongly encourage if there’s something constructive for people to talk with me or the leadership directly to hear back. But our company does require some initiative and I think a lot of this is around your own personal development because what I’ve seen is that the people that wait for the company to be responsible for their own personal development tend to not as rapidly adapt and succeed as those that take that as, “Oh, that’s my responsibility.”
So I take it and it is a requirement to take some individual. But I want to make also that there is a tremendous support system around people. We just kicked off an internal coaching program for nine individuals inside the company. It’s a 13-week program where I participate in it as a CEO. We have two presidents participating and one VP as the coaches in this program.
So we have our of our senior executives giving back, but these people have to invest their time. We’re investing our time backing them and coaching and teaching classes. We’re out until 10:30 last night. So, it’s this give and take, but there’s rarely–I don’t know a lot of companies where you will have four senior execs give up time every week to coach and mentor and develop employees for 13 weeks. It’s a good program. It takes give and take on both sides.
Andrew: I know we’re over time. Let me just finish off with two quick questions. The first is about the downturn and what you did. The second is since you’ve hired so many people, maybe you can give us one tip about hiring that we wouldn’t have known, one thing that would help anyone out there who’s running a consulting business hire or any other kind of business. But first, why don’t we start with the downturn. The energy market, you told our producer, suddenly took a big hit. What year was this?
Curtis: Okay. This was about 2014, tail end of that, ’15.
Andrew: How did that impact your business and what did you do about it?
Curtis: So, instantly overnight, in our Houston, Dallas and our Calgary markets which are tied to energy, a lot of business went away. In Houston, one of our larger clients and a few of our others, 50% of our revenue literally went away in three months. In Calgary, it was about 40%. Being through a downturn before–I mentioned Enron–you learn to handle things.
One is we knew of the risk ahead of time. Some clients use us to mitigate risk. We’re going to use a consultancy so that if there’s ever a downturn, you get rid of your consultants. Well, we kind of played that. We have some trusted partners and we have a large number of trusted partners in our Houston office that they knew that was their risk to assume. So, in the end, we make a big change. We talk with clients. We didn’t have to lay off a whole lot of people, but we did lay off a few, very few people. But we communicated. We tried to do it with respect.
Some of those people since have come back to work for us because of how I think we handled it. But if you ever have to do that–I’m just so grateful that it was so few people and not like Enron–do it with dignity and help these people out. Help them find positions and things like that. That’s not a great story to talk about, but it’s real about business–endless peaks is a myth. How do you mitigate for those times? We save money. We don’t distribute everything each year so that we can save for a rainy day.
Andrew: Don’t distribute it to the owners.
Curtis: Yeah.
Andrew: Now, the other question is a hiring tip. Hire to your culture. Hire and emphasis values. A mis-hire is more expensive because of cultural alignment than maybe other challenges. But you can have the best person with the wrong cultural alignment and that is not a good hire or they come and it’s not what they expected, so they leave.
Andrew: How can you tell if somebody actually is going to fit with your culture as opposed to just like parroting back what they see on your culture webpage?
Curtis: I talk to them about it and say, “This is real. When we say involvement is one of our guiding principles and one of our values, we really mean it. Do you realize that we have employee events every month? You’re going to feel out of place and awkward if you don’t participate because everybody is going to be connected and you’re going to feel like an outsider. If you don’t like doing that, we’re probably not the place, which means about an evening every month you’re spending with your colleagues and stuff like that.”
Andrew: I see. Painting, is that something you guys do?
Curtis: Painting, beer making, we do these movie nights.
Andrew: Monday Night Football.
Curtis: Monday Night Football in these theaters, different things to get people involved. We’ve done cooking competitions. These are fun events, but we expect you to be involved. Another one is excellence, meaning we have a high demand on–I will tell you, if you are not great at what you do, you don’t want to work here. There’s a lot of pressure. We tell this to people, which becomes inspiring to a lot of people wanting to come in. We have people studying to make it here. So we put this out and say, “If you’re not this, you’re going to feel uncomfortable.”
Believe me, the number one way we lose people or they didn’t align with the values or they didn’t kind of take us seriously. They’re like, “Wow, when you said your employee base is involved, they’re involved.” I’m like, “Yeah, that’s exactly what we said.” So, that seems to be a very big recruiting trick. Know your real values, who you really are, what you call your identity and hire–it’s not worth getting the right person now saving two or three weeks just to know they weren’t a cultural fit later on.
Andrew: Yeah. I think there are several times that I was on your careers page to understand what you guys were about. I just kept clicking the, “Our Culture.” It was like, “You have to look at our culture and understand and accept this before you can look at our jobs.” All right. For anyone who wants to check it out, guess what, the URL is actually really easy to go to. That’s because they spent a boatload of money to make it that easy. It’s Improving.com.
And for my two sponsors, if you’re looking to book calls with people, possible customers, existing customers, anyone, you really have got to check out Acuity Scheduling. I’ve even used it for scheduling scotch night because I want it on my calendar and I want reminders to go out. Check out AcuityScheduling.com/Mixergy. If you want to hire a developer full-time, part-time to come work with you guys, check out Toptal.com/Mixergy.
Thank you all for being a part of Mixergy. Thanks, Curtis.
Curtis: Thank you.
Andrew: Bye, everyone.
