How innovation is the ‘Secret Sauce’ behind the success of Sylvain Labs

How does a company overcome innovation stagnation to bring a new product to the marketplace?

Alain Sylvain is the Founder of Sylvain Labs which is an innovation and brand design consultancy.

Companies are able to outsource their innovation issues to Sylvain Labs where they help businesses to identify unmet consumer needs and in turn, create new products to meet those needs.

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Alain Sylvain

Alain Sylvain

Sylvain Labs

Alain Sylvain is the Founder of Sylvain Labs which is an innovation and brand design consultancy.

 

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Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses for an audience of real entrepreneurs. And I just got back from . . . Alain, I didn’t say this to you before, but I just got back hours ago from Santiago, Chile, where I ran a marathon.

Alain: That’s cool.

Andrew: Yeah, it was . . . I saw your eyes bulging out. It was like that. I didn’t expect the heat to be so bad.

Alain: The heat . . . yeah, [inaudible 00:00:27] . . .

Andrew: Yeah.

Alain: Yeah, so that’s the winter in that side of the world right now. So I guess that’s . . .

Andrew: Right. So I thought maybe it was going to be, you know, easy. I didn’t realize the heat would be the biggest barrier to me finishing the marathon, and then they ran out of water. But they did have Gatorade, which sponsored the race, so there was like endless Gatorade.

Alain: Yeah, I don’t know if that’s good, but [inaudible 00:00:46].

Andrew: The thing that struck me about them was . . . Have you been to Chile?

Alain: I haven’t.

Andrew: And we’re here, by the way, to talk to Alain Sylvain. He is the founder of Sylvain Labs. What they do is they’re an innovation and brand design consultancy, and we’re going to talk about what that means and how a lot of the innovation that goes on in these big companies I thought was just all internal. That was their secret sauce. That’s what made them amazing. No, apparently it’s Sylvain that does it. And we’re going to talk to him about it, but I’ve got to just tell the audience, catch them on who I am and what I’m doing here.

The beautiful thing, Alain, that happened over there was they did this Startup Santiago about a decade ago, where they decided they were going to give money to entrepreneurs who wanted to move there and start their companies there. Some of the companies ended up doing well and stayed there. Many either left or didn’t do well, which is what happens in a startup.

But what I noticed is there’s this culture of embracing entrepreneurship that came through that, and more than that a culture of optimism. And yes, part of it is due to the fact that it is a stable country, Chile is. It is a country that hasn’t had these big swings in their money or in their politics, the way that other countries have in the area.

But another part is the sense of we can do something big, and big things are happening here and the opportunity is here if only the world knew about it. And I love being around that. And frankly, the thing I think that we as entrepreneurs bring more than anything else to the world is, yes, we bring jobs, yes, we bring innovation, yes, we bring all that. But man, that sense of optimism, that sense of don’t worry, someone can be there to solve it, there are people walking around right now thinking, “You know what? I don’t believe the government can solve my problems. But I do think there’s this entrepreneur is going to come up with a solution somewhere.” And the more that we just keep grinding on our stuff, the more that we keep being optimistic and energetic and creative, I think the more we can shape, in their case, Santiago has definitely been changed by it, so we can change our cities. I’ve seen it. I think . . . Maybe this is a little bit too naïve. You tell me. I really believe we can and are changing the world. What do you think?

Alain: I think that’s . . . I’m an entrepreneur, and I largely believe that, just as you said, a lot of the responsibility to change the world is on entrepreneurship. But I do also . . . I’m going to push back a little bit, because I do think that it’s a bit of a, sort of a cult of enthusiasm around entrepreneurship in this era, that’s there’s this whole that they’ve been kind of heralded as easy thing anyone can do, and it only comes down to the entrepreneur. And the way we look up to the Elon Musks or the Elizabeth Holmes, who’s even a better example, it’s a little dangerous.

And if you look at pop culture more broadly, and you think about how business has always had a place in pop culture, to me it’s always been very interesting that “The Apprentice” was a really big show about 15 years ago, and it was about big business. It was about the boardroom. It wasn’t about entrepreneurship. This was about conquering, right?

And then the recession happened, and we saw pop culture play business differently with things like “Undercover Boss” and “Secret Millionaire.” And that was the big companies showing contrition. You know, it was a little bit of like it’s a little apologetic to be a big business person.

And now, we see “Shark Tank,” which is doing exactly what you’re saying, which is at this moment in time entrepreneurs are celebrities. My question would be, is that all they are? You know, are they only a symbol of optimism, or are they actually the engines of change in cities in Chile and around the world? Because [inaudible 00:04:07]. There’s a whole secondary market around products and services for entrepreneurs that don’t necessarily . . . It’s almost like the next big business idea is the idea to service someone else’s business idea. Do you know what I mean? Like Squarespace and all these other companies that are servicing entrepreneurs versus actually delivering something [new 00:04:24].

Andrew: I get it. But I still think that there isn’t enough of a hero worship of entrepreneurship, and I don’t like the ups and downs. I don’t like how, at some point, all businesses, including new entrepreneurs, become so vilified that they have to start protecting and defending themselves. But at the same time, there was a little period there where it felt like entrepreneurs were the heroes of the world, where people admired them and wanted to be more like them, and that disappeared within a couple of years. It disappeared as fast as Web 2.0. And now we’re back to admiring YouTube stars, and everybody wants to be an Instagram celebrity.

Alain: Yeah, it’s easy. It’s easy. I’m doing it right now. Actually, I was [inaudible 00:05:00] becoming [inaudible 00:05:01].

Andrew: There are people who didn’t like asked if I could be in the story that you’re going to publish on Instagram.

Alain: No, but how is this? I’m sorry. And I know you want to shift. But how about the fact that it’s a privilege to become an entrepreneur? How about the fact that it takes a certain amount of space and access and resources and support and mentorship to believe you can be an entrepreneur [inaudible 00:05:23]?

Andrew: I wish it didn’t. I wish that it didn’t. There was a period there where I was told that I could never be a writer, and it’s because my writing wasn’t good enough in whatever class it was. And today, anyone can go put a blog post up, and they made it so simple now that even on Facebook they welcome long posts and they make it easy. You’ll see every once in a while somebody go long form with it. I’ve also said countless times here I’m not an artist, but they’ve democratized art to the point where I could take a photo that looks really good [inaudible 00:05:53] platform multiples to publish. I would like to see a world where more people became entrepreneurs and felt that it was possible to.

But you know what else? I feel like it’s on me a little bit more. So this year my goal is to run a marathon on every continent.

Alain: [inaudible 00:06:06]

Andrew: I love the sense of a goal that’s big. I’m wondering if next year’s goal could be more about spreading entrepreneurship to every continent, about now that I’ve seen the world a little bit more, and I will more as this year goes on, is there enough of me complaining about what the world is missing and how it just needs to be more available and more of me saying here’s a small way I could contribute that would maybe have bigger impact. I’ve been thinking a lot about that. That’s the thing about having these big goals and then making progress towards them, I do feel more in control of my life and more open to bigger possibilities. Do you feel that way about yourself?

Alain: Yeah. I mean, I think, you know, I don’t . . . Maybe because I’m an entrepreneur I’m very much focus on the day-to-day and just moving up, you know, moving this rock up a mountain. And I don’t really feel like I have the time and space to really calculate where what I’m doing fits in the broader scheme of things. But yeah, I mean, I am intentional about what I’m doing. Sometimes I think the growth of my company consumes all of me in a way that’s unhealthy.

Andrew: I do that too. Or the lack of it. Or the, you know, the stagnation.

Alain: Yeah. Yeah. I mean, here I am jawing with you. Like I could be doing something else. But it’s . . .

Andrew: I do find a lot of entrepreneurs like this hour to just reflect back on what they did, because we don’t get much time to sit back and think about it. And I want to get into it. In fact, I want to even go back in time a little bit and understand how your family, being from Haiti, might have influenced you growing up in New York. I know it influenced me.

I should say this interview is sponsored by two companies. The first will let you hire great developers from all over the world. It’s called Toptal. And the second is a new sponsor. It’s the James Altucher Show. James Altucher believes in writing books so much that he’s actually encouraging people to write their own books, and he’s helping them. And I’ll tell you later how his company, how Choose Yourself is helping people do that and how it can help you too.

But first, why don’t we just explain what your business does. And before we started, you started to tell me about this work that you did for a beer company. What was the beer company?

Alain: We work for Anheuser-Busch. We’ve been working with them for years.

Andrew: So I want to understand what you do by understanding a specific example, because I hadn’t heard about this. I didn’t realize this was a thing. What’s the problem that they came to you with?

Alain: Right. The problem most companies come to us with is usually a problem of innovation. So we need new products in the marketplace that helps us solve particular challenges, and that could be a competitive threat. That can be the need, you know, they’re being disrupted. That could be they want us to be relevant. In this case, Anheuser-Busch came to us because they wanted to have a greater presence in the late night moments, you know, when people were out partying. People were drinking cocktails.

Andrew: Because what was the shift that they were noticing as they were . . .

Alain: Well, for decades, we’ve been moving more and more towards cocktails and towards wine. And beer has become less and less of a desirable thing late into the night. You know, people might pregame, so to speak, but they don’t necessarily take it into a club for example. And so . . .

Andrew: Oh, wait. So you’re saying people were starting to drink beer at home before they went out, and then when they were out, they wanted to have a nice cocktail in their hands?

Alain: Right. That was . . . It’s a trend that’s been happening for years, and it’s still happening.

Andrew: Okay.

Alain: And so if you’re the largest producer of beer in the world, that’s a very threatening thing, especially as the cocktails culture kind of came out of nowhere. It came out of nowhere and becoming more and more accessible to people within the places that you wouldn’t expect. So the brief to us was: How can we combat this through innovation? What new products should we create that gives us a relevance deeper into that and competes against these things?

They didn’t attach a brand to it. They didn’t really attach anything. And through our work, which I can get more specific on if you want, we basically identified a product idea with them, that they ended up creating. It was called Bud Light Platinum, and it was meant to be a higher alcohol, premium version of Bud Light, which did very well for those couple of years.

But that’s a good example. It’s about sourcing innovation.

Andrew: And they don’t do that themselves? I always thought that, especially these bigger companies, that’s what they do. They understand their customers best. They understand what they could produce. They mix something that they could produce together with what consumers want, and that’s how they create it. That’s not done internally?

Alain: Sometimes. Sometimes, not always. You know, like every bit of a business, there are places that you outsource. In this case, where you need sort of a ruthless focus on creativity and consumer insight, it’s not unusual for companies to go elsewhere. There are many companies like mine, many consultancies that do this sort of outsource innovation. And I’ll add that it’s not only about products. Sometimes it’s about a vision or a culture of innovation or a pipeline strategy. It’s not always as simple as like a specific product idea.

Some of our digital clients, and we have a lot of them, they’re not necessarily thinking of a new digital product. They’re thinking about a new approach to a category, just to be a little vague about it. But that’s sort of the brief.

Andrew: Yeah. One of the reasons that we focused on the Bud Light story instead of Google is because you felt that you could be more open with what you did with Bud. And so, even though you’ve done work with tech companies, we decided to focus on them.

You were starting to tell me before we began about the process. You said it always starts with research. What’s the research that you did in this case?

Alain: In the case of Anheuser-Busch, they had a core audience that they knew drank their beer. It was like young dudes, you know, bros.

Andrew: By the way, is there . . . I thought I heard some noise in the background. Good, it looks like it’s gone.

Alain: No.

Andrew: Okay.

Alain: Okay.

Andrew: Yeah, it’s young dudes who are their core customer?

Alain: That’s right. And what they wanted . . . What we started with is better understanding what they want from these experiences, that I talked about, late into the night. And so we did primary research with them, qualitative research and quantitative research around the country, identifying their needs. And that’s what I mean by that first stage. You do research to identify unmet needs.

And we learned very early on that these young guys, that there was a tension there, where on the one hand they wanted to party. You know, they wanted to get drunk. They wanted to go out. And, you know, surprise, surprise. That was a big part of it. But at the same time they also wanted to feel more mature while they were out, that they didn’t want to be treated like a child. They wanted to drink something next to their boss that didn’t make them feel like a kid. And that was a very interesting tension, because on the one hand you have the pursuit of memories and fun and exhilaration and joy, and almost a reckless joy on one hand. On the other hand, you had discipline and responsibility and maturity. And is there product that can kind of reconcile those two things?

And so that, the first phase was the research. The second phase was identifying that tension, that inside tension. And then the third was developing ideas that solved for that tension. And there are a few ideas that one might create to solve for that.

Andrew: For example?

Alain: Well, I told you the one we settled on, which was the premium, high alcohol version of alcohol, I’m sorry, of Bud Light.

Andrew: Of beer.

Alain: Another version would be maybe a more socially oriented product, something that you buy in with the sole purpose of consuming with friends, like a six-pack 2.0. That’s really about bringing people together. Another might be about workplace. You know, maybe there’s a way to bring your product to the workplace that doesn’t feel so out of place.

So really acknowledging the maturity of this young guy who’s going through a [inaudible 00:13:22] crisis. You know, at the time, that was a lot of what was being talked about was it was a new life stage that has emerged. That’s what we learned in our research is this new life stage has emerged, where people, you know, they’re not so young that they’re living at home, but yet they’re older. And [inaudible 00:13:39] really interesting new space. Anyway, that was the second phase was identifying that inside tension.

The third was identifying ideas, like the higher alcohol, premium version. The next phase was the client sort of picking one. Now I should say this is never something that someone should do alone. You do this with clients. We weren’t the ones that were like, “This is the product. You’ve got to do this.” It’s a true consulting company in that it’s a partnership. And so when one was identified, the next step was thinking about where does it play, like what brand should it be. Should it be a new brand? Or should it be attached to something that already exists? And eventually, through all sorts of brand work, the decision was made to make it a Bud Light product.

And then from there, you know, you test it. You work on a formula. You think about the naming of that product. You think about the branding of that product. In this case, the bottle looks different than a base Bud Light bottle. You think about the distribution. Where should it be? Where should it be sold? Should it be only in bars? Should it only be in clubs?

So all of those decisions were made, and it launched in 2012. It exceeded all expectations and really opened up a new category in beer, this higher alcohol, premium version. Bud Light created something called Black Crown, which was the same sort of concept. And then MillerCoors created Fortune, which was the same sort of concept. So through this work that we did, I think we uncovered a new sort of slice of beer.

Andrew: And it’s you understanding it and going to your client with advice based on this, and then they go out and create based on what you’ve advised them? Or they just become smarter for it and they go in a different direction?

Alain: It can go either way. The best case scenario is that they go off and build it, but they bring us along with them. We are not engineers or industrial designers per se. We are more on the consumer insight and conceptual side of things, with helping advance the idea. And if we can get along with the clients along the way, that would be great. But it’s not always the case.

Andrew: You told our producer, “I do not want to get into the specifics of revenue. I know Andrew is going to ask, but I don’t want to get specific.” What . . . I think I know what you feel comfortable saying, but I’ll let you say it. Revenue for 2018, it seems like you’re comfortable talking about. What was the revenue then to give us a sense of size?

Alain: Around $10 million . . .

Andrew: Okay.

Alain: . . . was the revenue, which is the size of a small to medium-size consulting company in this category. You have to remember we are purely consulting, so we don’t manufacture things. It’s purely our time that we sell.

Andrew: And it’s all your firm, no outside funding, 100% you.

Alain: That’s right.

Andrew: Okay. Profitable then.

Alain: That’s right.

Andrew: Let me talk about my first sponsor and then we’ll get back into the story. Do you know James Altucher by any chance?

Alain: I don’t. Tell me about him, please.

Andrew: I will. He’s a guy that I think my audience will recognize. He someone who’s a little bit of an eccentric. He started just blogging about himself as a guy who’s been in finance forever. He started blogging about personal things, like how he wanted to commit suicide at one point, how he thought about doing it, how he built up a company after that. And he started to build up this big reputation. In fact, I should go look up this New York Times article that I saw him in. It was phenomenal.

But the way that he did it was by writing a blog, and then he said it’s fairly easy to create a book. And he says people don’t recognize how easy it is. And he says, “I’m going to take on the challenge of showing people how to create a book.”

So if anyone out there wants to do it, all you have to do is go to your phone, send a text message to this phone number. It’s 50445, and just text the name “Andrew” to it, and they will send you information about how publishing a book, how they could help you publish a book and how publishing a book can actually change your business.

And I’ll tell you, going to Argentina . . . No, excuse me, to Santiago Chile, I needed some advice. I needed some help. And there was this guy, Nathan, from Magma Partners, who just was like my guide through the whole industry, and largely what it was, was I read his book about how venture capital works in Latin America.

And when I got it, I thought this is going to be brilliant. Then I started flipping through it and reading it. It was essentially a collection of blog posts. But that’s all I needed. Some interviews that he did on his podcasts, some blog posts that he had written about different countries. All of his own like research and own personal notes. But it helped me. It wasn’t like this long, journalistic exercise. It was just one guy who’s a blogger/podcaster, who’s in the space, who understands it and wants to understand it better and report to the world. And because of that, he got tremendous credibility in the space with people like me and companies that then partner up with him, companies that then get funding from him, companies that then invest in him. That’s the power of writing a book.

If you want to do it, if you’re at all curious about how to do it, James has done it really well. He’s had a phenomenal run with . . . You know what? I should have like . . . I need more data here in front of me. I should be able to tell you how many of his books were bestsellers, for example. Instead I’ll tell you if you’re interested, go dial this number in your phone, 50445, and text the word “Andrew” to it. So 50445, text the word “Andrew.”

By the way, we sold him that ad about six months ago. I did that. I went through it. I typed in the number. I typed in my name. And I hated the response. I said, “This is not right.” And they spent a couple of months redoing it, so it works now. Guys, go give them a shot. If you want to build your credibility, they’ll help you do it.

Let’s go back a little bit in time. I said that your parents were from Haiti. What was it like for you guys growing up in New York?

Alain: Well, you know, this is the mid-80s in New York, which was a really interesting time. My parents immigrated to New York in their teens and early 20s, and so they came with a real optimism. You used the word “optimism” before. They came with a real optimism, with a promise to really achieve something here. It’s the American dream. So that was always prevalent around us. We felt like we had a great amount of responsibility, as descendents of immigrants, to really do something special. So that’s all I really remember was the expectations that . . .

Andrew: Why do you think it wasn’t crushing you? I hear a lot now in popular media that if you push your kids too far, that you’re going to crush them. And then The New York Times did a piece just a couple of days ago about how the reason that the kids who get into the top three New York schools, the reason they get in is because their parents put incredible pressure on them to study and to prep. And so I wonder at what point, when does it break a person? Why didn’t it break you?

Alain: Well, I think it’s how you define what breaking is. Yes, I’m financially independent, and I can . . . I’m doing what I’m doing and I own a business, but I’m also incredibly stressed and busy. And do I spend enough time with my own family? The priorities are interesting, what’s implicit in that question, you know, and what we value as a society. So I think it would be cavalier for me to say that it hasn’t had some negative impact on me. [inaudible 00:20:42]

Andrew: So the negative impact is that it’s forced you to work so hard that maybe you’ve sacrificed other things, like your health and family.

Alain: Maybe, maybe. Right. Or maybe, you know, it’s created really a shortsighted view on what success is or what well-being is. I’m being provocative here, because I don’t think it’s as simple as to suggest that people like me are on the other side and we succeeded. And we all look back at our upbringing and think our parents let us down one way or another. So I think it’s . . .

Andrew: What did your parents have you do that most people wouldn’t recognize? I’ll tell you I felt like the immigrant culture New York was phenomenal. I remember how hard my dad worked when we were immigrants. And then I remember once we got it, there was another batch of people. Somehow there was a batch of guys from Korea who came in and opened up stores near where my dad’s place was. They were willing to work longer hours, and my dad was starting to want to work shorter hours. And I felt like that’s the thing I can never lose, what these guys are coming into the country with, that need to keep working.

Alain: Right. Yeah, in my case, it’s not only . . . That’s why I totally relate to that, this idea, this need to keep working, but it’s also this idea that failure is not an option and that the pursuit is long and that the hustle is real and [inaudible 00:22:00].

Andrew: Did they make you work weekends? Did they make you get a job early on?

Alain: Did my parents make me work weekends and get a job?

Andrew: Yeah.

Alain: Yeah, there was a little bit of that. There was just, you know . . . I’ll tell you the big, and I wouldn’t say my parents failed in any way. Don’t misunderstand. I feel very lucky I work with my dad, for example. But I do think, as immigrants, they didn’t fully appreciate and understand what it meant to be creative.

Andrew: Ah, yeah.

Alain: Okay. So this is . . . And you might relate to this, right? So a lot of creativity is sort of a foreign concept when you hit the ground in the U.S. and you’re just trying to make it. You know, this idea that I want to be an artist or a musician, it’s pretty foreign. Certainly, like the combination of creativity and business is a foreign idea. You know, even to this day, I think, you know, my parents are like, “Is this real? Is this a real job?”

Andrew: Your parents are still saying that to you.

Alain: Yeah, and my dad works for the company. [inaudible 00:22:50]

Andrew: What’s your dad in the company?

Alain: He’s the COO, and he helped me found the company. So he is responsible for [inaudible 00:22:58].

Andrew: Really? What your dad’s background?

Alain: It’s just that. So in operations and administration.

Andrew: You mean he came in from Haiti and he was an operations guy in New York?

Alain: Yeah. That’s right. Well, he came in his teens. He came in his teens, so he’s in his 60s now. So [inaudible 00:23:09].

Andrew: Oh, okay, got it. I thought he came in a lot later. Okay. And so you then went on and you had a more traditional career path. You were managing director of a consulting company. You still wanted to start your own business. You wanted to be creative. You wanted to be entrepreneurial. You’re someone who we kind of didn’t get to talk about it, but you were an entrepreneur a little bit even as a kid. And then you said in a job interview, “Maybe this is not what I should do.”

Alain: Oh, man. Yeah, this is exactly right. I mean, I was at this point where I was . . . I always thought about starting my own business. It was probably like something that I could do. As you mentioned, as a kid I was always thinking about this stuff. And just to be safe, again, because I didn’t have a network or I wasn’t well-funded, I was looking for jobs, just new jobs. I couldn’t deal with where I was.

And I ended up getting a job offer at a tech company. It was a juicy offer, more on the creative side, and it felt like it was really the next step in my career. And I did a really bold thing at the time. There are not many things I do that I think are bold. But this was one of them. And I said to the hiring person, I said, “Instead of taking a full-time job with you, would you be my first flagship client? And so I’ll trade my consultancy. I’ll do the same thing you asked me to. So I’ll hire people. I’ll create a department, and I’ll focus on your key priorities. But I’ll do it as an outsider. I’ll have an office in your company and so on.” And the client agreed. And it was a three-month engagement, and I hired a couple of people that are still with me. And we worked on their stuff.

While I was working on that engagement, I also looked for work. And the funny thing was like I didn’t start my company, get investment. I didn’t hit the ground running, looking for sales. It was a job interview that was the key catalyst. And so I was able to start on day one with a client, with employees, with an office, with a logo, with computers, and then I never had to cut my salary. You know a lot of entrepreneurs cut their salary the first year.

Andrew: Yeah.

Alain: I never had to do that, because that first moment and the way the first client came in. And so when I talk to people considering entrepreneurship, I often will float the idea, “Well, have you thought about going on the job market, because it could be . . .” It’s an interesting way to network, interesting way to maybe find opportunities that are no longer there, because inherently people who are hiring are people in need. And if you’re thinking about starting your own business, you will get a better sense of other people’s needs through growing that process.

Andrew: I wonder why they were comfortable with you doing that, because wouldn’t they want to own this part of their business? Why would they be okay with someone who’s going to hire walking away with all the people they’re hiring?

Alain: It’s about time. You know, clients don’t have the luxury of time, of staffing things perfectly. You know, we work with super creative companies that . . .

Andrew: I get that today. But back then, you had to still go and hire. Why would they wait while you hired for yourself? Why would they let you . . .

Alain: They trusted. They trusted that I could hire faster and better than they could internally.

Andrew: Better than the next person that they would have considered.

Alain: Right.

Andrew: That’s what it was. And you know what? I have noticed that, having seen some of my friends go through the hiring process. They’ll find somebody. They love them, and if they lose them, it’s a big letdown, and it’s a big change in the business. And I can see them in many ways saying, “You now what? Let’s just outsource it. If this is the same person we like working with, let’s outsource it.” And maybe in the back of their heads thinking maybe the person would want to come in, in the future, or we decide that this experiment didn’t work.

Alain: Yeah. And don’t forget, I mean this is risk. It was AOL. This is also risk. You’re managing risk by sort of doing this experiment, a three-month experiment, doing this creative project, like is there to lose? What is there to lose? And a lot of our clients come to us because it’s bite-size risk that they could take.

Andrew: This was AOL. I’m actually going through the Internet Archive to get a sense of how your site developed and evolved.

Alain: Oh, our site.

Andrew: Just to see if I could see who the company was, and I didn’t. But I did see AOL. No, I didn’t see AOL. I actually saw the very first version of your site, which was just plain . . . It’s like wallpaper background from an interesting club, your logo. It says underneath “Pon de humanitas.” What does that mean?

Alain: Yeah, I mean “pon de humanitas” is a weird sort of mantra for us. The reason we had put that on our logo was primarily because it looked cool typed in a logo. But “pon de” is Jamaican patois to mean like seize. Like you might say pon de fleur or pon de replay, or take control of or to take hold of.

Andrew: Ah.

Alain: And then “humanitas” means culture in Latin. And I don’t know what influence I was on at the time, but it was this interesting thought about can you seize culture, and that’s what “pon de humanitas” was. Those early websites are not exactly our greatest moments. You know, we were still trying to figure out who we were and what we stood for.

Andrew: There was this sense of old and new, barbershop, like classic look, and this sense of the vision of the future. And there was a sense of I’m putting my cellphone number on the website, because this is just me at this point.

Alain: No. It was never just me. That’s not my cellphone number either.

Andrew: Oh, it’s not.

Alain: I mean, [inaudible 00:28:23].

Andrew: The 917 number was not just your cell phone?

Alain: No. I mean, I don’t think it was. [inaudible 00:28:29]

Andrew: Okay. I’m afraid of saying it out loud just in case.

Alain: Yeah.

Andrew: But I get. I think it was like you told our producer four of us with computers in a room working.

Alain: That’s right. That’s right. It was really, really intense. And one of the key pieces of advice I got when I started the company was don’t spend money. It was like a no-brainer. It was like rule number one, just don’t spend money. And so for those early days, even the website that you pointed out and the office you’re talking about, those were all bartered. I bartered everything like crazy.

Andrew: Was the office the client’s office?

Alain: I had an office at the client’s, and I also had an office right outside, right down the block.

Andrew: Okay. What was the trade for the office?

Alain: For the office, I think we helped introduce them to potential clients, other clients.

Andrew: Okay.

Alain: I think it was a production company on Lafayette, and we were on the fourth floor. And then we had a tiny little office. It was something like 1,000 bucks a month. And, you know, so what do you barter for that amount? It’s not a lot you can kind of do for that. But I’ll tell you we, and we continue to bring this philosophy with us, is if you can find mutual interests, you know, the so-called win-win, you can barter.

Andrew: Like what? What do you barter with now that you’re a $10 million company?

Alain: Right. As a good example, we, if you look at our holiday video, we do a holiday video almost every year. So in December, we did this video, and it was probably silly looking at it now, but it was a real production. And it probably cost probably 20 to 30 grand to actually produce that properly. And we have a partner that we bartered with a lot in the past, a company called Green Card Productions, that did it for us in exchange for work we do for them and helping them think about their brand and what they stand for.

So that exchange, not a dollar was spent. It was exchanged in that. We got this little video that we can use with our clients and to help us promote ourselves. We really don’t have like a marketing budget where we can do that sort of thing. And in return, we get to work on a different challenge, do something that comes really easily for us to be honest. You know, it’s not hard to do that work for them. And we also like them and want them to succeed. So that’s a good example.

Andrew: I wonder why. I sometimes think about being able to do that now, and then I think it’s hard to tell someone who doesn’t make any money off of you, “I need a revision to this video. I need you to do another version. I need you to change it because this is what I’m looking for.” You get a lot less control, and it’s a lot more back-and-forth sometimes.

Alain: Well, I mean, you’re kind of pointing to the inherent business model that I have, which is about back-and-forth. It is a collaboration. It is about partnership. And so we have a familiarity with that, and it’s not always great. Sometimes it’s pretty intense. But you welcome the back-and-forth because they’re going to live with this. Remember, our job is to help channel their organization itself in a more authentic way. But that’s our job. It’s not to tell them who they are. It is to tell them, to articulate it in a way that’s new or more compelling. So that’s why they need to be comfortable with it. So we don’t . . . But believe me, we do run into issues with clients about back-and-forth. It’s just that that’s not really the thing.

Andrew: I’m looking up your dad, Al Sylvain. He’s got to be proud because it’s his name also on the company. It’s Sylvain Labs, both him and you. He worked for 17 years at Citi, what’s now Citibank, VP of Operations. I can see that he had his own company too. What happened to AIM Leadership Resources?

Alain: Do you want to patch him in? These are better questions for him.

Andrew: Ah, I would love to. Would [inaudible 00:32:07] patched in?

Alain: Probably not, but, you know, he can speak to his own things himself.

Andrew: Okay. But he’s one of the first four people that you started with?

Alain: That’s right. That’s right.

Andrew: Why did you feel like you needed a COO when it was just the four of you?

Alain: Well, I always . . . well, for one, it’s a huge part of the job of starting a business is kind of setting up the infrastructure and being able to focus on the key details. And by him being available and willing to do that, that just freed up probably 30% of my time, and that was the key thing is like I’m getting more time. He also was at a point where he wanted to do something more entrepreneurial as well. So it just made perfect sense. It comes with challenges, of course, as all family businesses do, you might say. But it was the smartest thing I ever could do, because he brought a level of discipline at an early stage that most companies don’t have. You know, we were probably the most buttoned up company at that age. You know, we were going through like board minutes and stuff. You know, the company was like three months old.

Andrew: Board minutes.

Alain: Yeah, exactly.

Andrew: Would you recommend that? I know whenever I get my LLC book or incorporation papers when I start a company, they give you that big book that you’re supposed to keep minutes, and I think, “Well, that’s not really practical.” Is it helpful to actually do it?

Alain: I’m not the best person to ask, because of exactly what you’re kind of alluding to, which is this deep trust I have with my dad. So he suggested we do it. He knows better. And as I said, it comes with challenges, but ultimately he has his expertise and I have mine, and we trust each other.

Andrew: I’m sensing some tension there..

Alain: [inaudible 00:33:51]

Andrew: Like even I felt a little scared when you said, “Do you want to patch him in?” Like I was sensing something in there. What’s going on? Even if you can’t be open about the details of it, what am I picking up on?

Alain: I don’t know. Maybe you’re picking up on issues you have with your own dad. I don’t know. I don’t know. I mean . . .

Andrew: I feel like I’m getting vibes from you about you can step, but not be on this line, or I’m not comfortable with you going into my family right here.

Alain: Yeah. I mean, I’m not comfortable going into my family for sure.

Andrew: I saw that.

Alain: But it is part of the business story. It is part of the story. And if you want to talk about business, no problem. I mean, I think it’s kind of a provocative idea of working with family and kind of getting underneath that. So I can understand why you’re asking. But it’s not really the story. You know?

Andrew: I get it. First dollar came from that first client, AOL. I’ve got the revenue from it. Do you feel comfortable talking about what that was, how meaningful that was?

Alain: It was like a few hundred thousand dollars.

Andrew: Yeah.

Alain: That first project, you know, which is not unusual. Most projects for companies like ours are in that zone.

Andrew: So they basically funded the business. How did you get the next batch of customers once you had this one client?

Alain: I hit the road. I mean it’s literally every breakfast, lunch, and dinner I was out talking to people and, you know, asking them what they wanted, how we could fit, what they saw in the marketplace, how did they grow their own business. Literally, for those first four or five months, I was out like crazy.

Andrew: What’s the right person to talk to at companies when you’re selling this type of service, brand innovation?

Alain: Well, the CEO is obviously . . . the C-level is obviously the key place to start. Marketing is usually the primary sort of department we report into. We report to CMOs and work with the head of marketing, but we also work with business development and strategy, corporate strategy. Sometimes we get projects that are more internally focused, so help us create a product for our teams to work more efficiently, and that would be more of like a HR or a COO.

Andrew: I saw soon after the company started, I started go through the Internet Archives. I saw AOL, yes, and then I see Toys “R” Us. LVMH, the big brand, Nike, AIC, which used to be called Interactive Corp, they own a bunch of companies like . . .

Alain: IAC, yeah.

Andrew: Sorry?

Alain: IAC.

Andrew: IAC, I think I misread it. Target. How did you get all these brands to work with you? How did you get all these companies to even like pay attention to you?

Alain: You know, there are a couple of things. For one, it’s because this is innovation. It’s sort of an expensive service to pay for. Only big companies really can afford this usually. So our client list, by virtue of the market, would always be impressive because it would only be big companies, number one.

Number two, we got those relationships because of pre-existing relationships. So my LVMH client was an old client I had before. My AOL client I told you how that came about. It was relationships. The relationship, all we needed was one person at a company and one little project, and that would grow and grow. And actually, since day one, since we started in 2010, we’ve had 100% client retention, which means every client we’ve ever had has asked us to do another project, which is not usual. Usually, you know, clients oftentimes come and go. But it was this kind of focus on relationships that created that impressive list.

Also we did a lot of work with Mother, which was a creative agency, which is a creative agency, which I worked at for a few years before I started the company. And . . .

Andrew: And that was your longest job, right?

Alain: Yeah, prior to this one, that’s right.

Andrew: Yeah.

Alain: They referred us to clients a lot. Anheuser-Busch was something referred to us by Mother.

Andrew: Yeah, I can see that. I can see that the relationship with the previous company would have helped. This is MotherNewYork.com, independent creative company, right?

Alain: That’s right. That’s right.

Andrew: I didn’t know them before this. But I’m starting to see a lot about them as I’m like prepping for this interview. I should talk about my second sponsor, and then I’d love to find out a little bit about your background, the work that you did before this.

Second sponsor is a company called Toptal. If anybody out there is looking to hire developers or designers or finance people, I really urge you to go check out Toptal.

And you know what? I’ve got to tell you, Alain, I hired a finance person from them, because I wanted a second set of eyes to look at my books. One thing that he helped me uncover last year was that I was paying way too much in credit card processing fees. It’s one of those deals that you just sign up for and you forget and you assume it’s the cost of doing business. I like that he just did the analysis on it, and then he went and he researched. And then he came back and he said, “Andrew, you can definitely save money.” I was just looking at the last quarter’s expenses this year, and now credit card processing is insignificant, and we could probably reduce it even further. It’s amazing. And he’s done similar things like that. Like he’s told me how to recategorize my own takeaway pay from the company, based on articles he had read about the tax changes that came up that are going to have a big impact on us this year.

It’s like lots of little things like that. He helped me under cover that there are some people I paying too much for. It looks like the company that’s doing our books got a couple of numbers probably wrong in the accrual, and he and I got on a call today. We were just kind of going over it, and together we understood what the problem was. I only have him for like a couple hours a month, and still tremendously helpful.

So I’ve talked in the past about how you can hire developers from Toptal, and really by now you guys all know the best of the best developers. You could hire designers. But the truth is many people are not ready to hire designers from a place like this. So I’m going to focus on the fact that I’ve hired a phenomenal finance person from there. And if you’re looking for anything finance related, that is the place to go. I’ve had people say, “I just need the right spreadsheets put together.” “I just need the right financial models.” “I just need somebody to put together slides and a presentation to take my ideas to investors.” All that and so much more is available.

If you want to hire from Toptal, there’s a great deal that only I get because it’s created by two Mixergy fans. It’s go to Toptal.com/mixergy. When you do, you’re going to get 80 hours of Toptal developer credit when you pay for the first 80 hours, in addition to a no-risk trial period of up to two weeks. People I’ve interviewed have signed up. People who listen have signed up. Go check them out. Top as in the top of your head, tal as in talent. Toptal/com/mixergy.

What was the work that you did at Mother? I saw in your LinkedIn profile that you did strategy at Mother, and then you were Managing director at Redscout. Can you put some flesh on your background? What did you do?

Alain: Sure. Mother is a creative agency, so meaning that they do largely what you might call advertising. They help brands tell their stories through messaging and so on and media, and that involves a creative, a “crafts” person, a creative that knows art direction and copywriting and helps think of the tagline or draw or illustrate the [inaudible 00:40:43]. But it also involves a strategist that helps align that creative work with the business needs, making sure the business needs aligns with the consumer insights, with the culture. And so my job was to make sure those things were still relevant as the creative development was happening. And Mother was probably the more creative side of these sorts of agencies, so it was pretty . . . My job was more on the strategy side, but I worked in this very creative [place 00:41:09]. And as I said, told you earlier, I thought I was a creative person as I was coming up, so this was kind of like an ideal.

Andrew: I see the overlap with creativity, with the strategy, that part of what you do now at Sylvain Labs seems to be that kind of work, that kind of helping them strategized what they’re doing.

Alain: Yeah. That’s right. That’s right. I mean, this is the thing. You know, companies are feeling a crisis. They don’t have creativity early enough or further upstream. They’re looking for more and more of that creative thinking. That’s what design thinking is, and that’s what a lot of this newfangled interest in sprints and being agile and so on is how can you bring creative thinking earlier on in the process. And management consultants who have, who have lived earlier on in the process, they are looking for more ways to inject creativity in their work. And that’s why that’s exposed a new opportunity for companies like mine, who probably come from a more creative space, but can compete with management consultants to certain degree. That’s the thing. Yeah, [inaudible 00:42:11] between creativity and strategy is [inaudible 00:42:13]. It’s not new. You know, people talk about it all the time. But our company, that’s sort of what we sell. It’s like the product we make.

Andrew: You told our producer, Brian Benson, that one of the things you wanted to do was create an atmosphere of creativity and rigor. What do you mean by that?

Alain: Well, you know, you often don’t see, believe the two can coexist. You know, creativity is thought to be this very reckless, imaginative, explorative process. And rigor is really often thought to be constraining. And so we believe the two can happily coexist, that actually there is some rigor to creativity and there is some creativity to rigor.

And so a good of that example, let me give you a good example of that is we work with General Motors on innovation. We help them create new products ideas for the driving experience, for mobility, for example. And what we’ll do is we’ll do research with drivers specific about what their needs are. We’ll do really elaborate research, like what do people need when they’re driving their car, and we’ll identify the specific needs, whether it’s about connecting with people, it’s about entertaining and styles, or whatever. And then from there, we’ll invent ideas, true invention, like maybe there’s a gaming concept or maybe there’s an exercise where you remote fuel your or something we created a few years ago.

And so that process of being really rigorous about insights and developing a way to think about needs, combined with the sheer act of invention, the way a real inventor might, is what we’re talking about between combining creativity and strategy.

Andrew: So the next set of customers came from these referrals, from you hustling. Then the next big leap seems to have come because of something, because of Brandcenter. What’s Brandcenter?

Alain: Brandcenter is a graduate school in Richmond, Virginia, that focuses on brand strategy, advertising, and marketing. It’s one of the best master’s program in the country, and I was on the Board. I’ve been on the Board for about nine years. I just got off the Board. And I had gone down there a few times, and I got to know students pretty well. And it ended up being a great feeder for talent. And those first two people I hired came from the school, and they’re still with me nine years later. And they help me run the company.

Andrew: Oh, wow.

Alain: Yeah.

Andrew: And did you also get clients by being on the Board?

Alain: I made interesting relationships among other Board members, and maybe we had a little project here and there. But I wouldn’t say that was a [inaudible 00:44:39].

Andrew: It’s more about talent.

Alain: It was more about talent. It was more about doing something in the education space. Yeah, it was about networking for sure.

Andrew: You also at some point decided we’re going to start own more of our intellectual property. Why did you decide that? Like how is that different from the way things work? And then what happened after you made that decision?

Alain: Well, there are couple of things. One is we sell our time, and we’re not necessarily making things that are out in the world. You know, we don’t make things physically out in the world. So there’s a real sort of need to make more. And so what we started to do was, in addition to trying to [inaudible 00:45:20] projects more and more to [making 00:45:22] place, we decided to make our own stuff. So we’ve created a couple of documentaries. We also self-published a book. We have our own podcast. We have created a line of hot sauce. We are partners in a line of headphones. We have our own [inaudible 00:45:39] so to speak, and it fulfills us in a different way than our client work.

Andrew: Why your own hot sauce?

Alain: So each one of them has a story. So one is the hot sauces we have a guy that works here that used to be a fine dining chef, and he had a killer recipe for hot sauce that I love. And one day he came in and he said, “I’ve got gallons of this thing, and I don’t really know what to do with it.” And so we agreed to buy it and try to commercialize it. And it fails horribly, because we didn’t really know how to commercialize a product. But we did learn a lot about how do you create a new food product if you want to say that. And when we work with food clients, as I mentioned Anheuser-Busch or Chobani was a client or other clients, now we can speak more authoritatively about what it takes to create a product. We can talk about the viscosity of liquid in these bottles or how big should the spout be. You know, how do you put the logo on the outside?

Andrew: Hmm, because you’ve done all of that.

Alain: Because we did all that. And so what we’re doing with a lot of our side hustles, we’re learning a lot about how to create businesses from scratch.

Andrew: So one of the things that would scare people away from doing that is the belief that if they start something like a hot sauce and fail, then it communicates failure to understand the space to the next client. Why doesn’t that happen?

Alain: [inaudible 00:46:56] Why what?

Andrew: Why doesn’t that happen? Why aren’t clients going . . .

Alain: [inaudible 00:47:00]

Andrew: It does. It really does.

Alain: Totally, it does happen. I mean, it’s . . . I’m not afraid to tell a client that we were naïve at a certain time. It was more about experimentation and risk, and I’m happy about the investment. You know, we took the time to try to do something. The world did not need another hot sauce. But it was a moment for us to do something beyond our day jobs and explore a new territory. And we, for the first time, we really learned that we can create something. If anything, it gave us confidence that we can create something, which helped us then do the headphones, which unfortunately I’m not even rocking right now. But we . . .

Andrew: I see the headphones. Master & Dynamic, is that what it was called?

Alain: That’s right.

Andrew: That’s what it’s called now. Right. So you guys made headphones.

Alain: We met the CEO, an entrepreneur, named Jonathan Levine, who had a concept for high design headphones. This is before . . . This is a few years ago, so it’s a little early. Beats was sort of the new player in town. They had just gotten acquired by Apple, and we began to see a new space in the audio space. And this was an idea that Jonathan had. We ended up working with him to create this . . . we [entered a 00:48:10] service-for-equity relationship. So we did a big project that came out. The name, the brand, the business strategy, how does it grow from an innovation point of view in exchange for equity in the business.

Andrew: I see.

Alain: And so we still have that equity, and it’s now in the Apple Store. And it’s killing it. It’s doing really well.

Andrew: Whose idea was the design of the headphones?

Alain: It was a combination of a lot of players. They had a head of design, product design internally. I think they worked with a design company. But we also informed that through more conceptual. You know, we were looking at industrial design post-World War II Germany, industrial design . . .

Andrew: Yeah. Yeah, it’s got that classic look to it. It looks really good.

Alain: Mm-hmm.

Andrew: All right. And I see also Lilo, and that’s a superfood company. That’s still around, right?

Alain: It is, but I’ve gotten word recently that they’re going to close pretty soon. It’s an açai bowl company, like refrigerator stabilized açai bowl. That we, at the time, we saw Greek yogurt and a few other interesting breakfast concepts popping up, and we thought . . . and açai bowls are growing, and this was a concept to make it more refrigerator stable. And we were in dozens of stores, dozens of stores in Canada. But it never quite took hold.

Andrew: And still it’s worthwhile for you to have these side hustles?

Alain: It doesn’t cost us much. This is the thing. It doesn’t cost us much. It . . .

Andrew: What about distraction?

Alain: Well, is it a distraction if it’s allowing us to . . . And we sell creativity. If it’s allowing us to stretch ourselves and explore new ground and learn, I don’t think it’s a distraction at all. And you know, if I can use it in moments like this and say that we have portfolios that some have succeeded and some have failed, it’s definitely added as a value.

Andrew: I’ve been thinking we should do that too. I’ve just been . . . Like I feel if I really want to do better interviews with people who do e-commerce, I should just maybe create an online store. Even if it fails, I’ve learned how it works, and frankly it doesn’t need to succeed. It just needs to let us get the mechanics right and then have more challenging questions in future interviews because we’ve played with this stuff more.

Alain: Mm-hmm, right. It gives you much more credibility. I mean, a lot of consultants like ours they have patents. They’re like we have 20 patents, and none of them actually succeeded, but they can say we have patents, because it says something about what they’ve actually done. We don’t do that. But I can understand why one would.

Andrew: Because that also shows that they’ve created something, and you’d rather actually create the product or be a part of the development of it. In fact, you’ve even . . . When your people come to you and say, “We’ve got these side hustles,” you’re not upset. It doesn’t feel like they’re being distracted from the work they do.

Alain: No. I mean, just as we talked about before, entrepreneurship is such a prevalent part of culture today. Everyone has some sort of side hustle that they’re thinking about. Maybe some are further along than others. Some are for profit, someone are non-profit. Some are creative projects. And when you know that about people, especially when the people I’m hiring are creative people, you know, they all have different . . . Most of them have a different agenda.

Andrew: Right.

Alain: When you acknowledge that and you give a safe space for it, it just makes it a much more honest and transparent relationship. And I can give you a couple of examples. One, there was a hot sauce example. But there was a guy that worked with me that was clearly a musician. Clearly, like he cared about music. He was actually on “The Voice.” A couple of years before, he was a contestant on “The Voice.” He was on Pharrell’s team, and he was working on his music on the weekends and nights. And you know, I care about music, and I know a little bit about it and offered to help. We produced his music video, and I think it’s on the site. It might be on the site. To help get it off the ground, we advised him.

There’s another woman here that works with wood. She makes furniture with wood, and it’s something she’s really into. It’s not that she wants to start a business or anything, but it’s just something that’s really defining for her. And so we asked her to create our conference room table. And it’s a huge, 13-foot, beautiful table, that if we bought it in a store, we couldn’t afford.

But this was a great way to bring out people’s real character and, again, be much more transparent.

Andrew: You know what? I do want to do more that. I admire that you guys do that. I see it on your site all over. How do you do it when you sell time? How do you have the discipline? How do you have the space to enable this?

Alain: Truthfully, it’s hard. You know, the past couple of years, we haven’t done it is much as we’d like. When people realize it’s a bonus, that it’s not something that most companies provide, they will work with you to make it happen within a certain time frame or budget. In the case of the table, I talked about Gretchen Devero, who made this table, and she’s an amazing craftsperson. And she had a limited budget and limited time, and she just made it work.

You know, we’ve run into this problem a lot with these sort of side hustles, and we’re running into it even more with the pro bono projects. Where a Certified B Corporation, and we do a lot of social . . . We try to do more socially-minded work, and that’s when it becomes really hard to wrangle the time and [inaudible 00:53:29] creates a discipline.

Andrew: As a B Corp, you need to do that?

Alain: No. No, but as a B Corp, I’m just using it as a symbol of sort of where our priorities are.

Andrew: Ah, you’re saying, look, if we are Certified B Corp, which I see on your site very clearly, you’re not just putting that on your site. You have to live it somehow, and that means helping people who aren’t paying you guys and doing pro bono work.

Alain: I think you’re right. There are some companies that don’t do that. You know, as consultants, this is how we’ve chosen to do it. So we do pro bono projects with non-profits every so often. It’s not a big part of our time commitment. Don’t get me wrong. But we’ll do maybe four non-profit oriented projects over the course of the year, helping a non-profit create a new brand identity or design or helping them make a pitch deck for raising funds, things that they normally couldn’t afford to do and things that take us very, very little time.

Andrew: Yeah, I can see how that would give more meaning to your work too. I’m looking at it right now, like the Lower East Side Girls Club. I can’t imagine they need the type of rigor that Anheuser-Busch or that Google would need. But I can see that you’d have a lot of impact and they feel great and you feel great about helping them.

Alain: Mm-hmm.

Andrew: All right. For anyone who wants to go check out your website, it sylvainlabs.com. Anything that I missed, that you feel I should have brought up?

Alain: I think it would be great to talk more about my dad.

Andrew: No, you don’t. You don’t want me to talk about your dad. I’ve got to interview your dad.

Alain: That was a joke.

Andrew: [inaudible 00:55:05] but I was a little scared of you there.

Alain: [inaudible 00:55:08]

Andrew: So I defended it. Well, thanks so much for doing this interview. I’m putting out an open invitation to your dad. If he ever wants to come on here and do an interview himself, I would love it.

And I want to thank the two sponsors who made this interview happen. The first will help you hire well. It’s called Toptal. And the second, if you’re trying to write a book or if you want to get a reputation built for yourself, but it’s actually writing a book on your own is kind of a tough process, especially if you’re working and you’ve got responsibilities day-to-day, go check out James Altucher and what he’s been doing. If you know James, you don’t need me to say much more. So all I’ll do is say just go into your text app right now and type in “50445” and send them the message that just says the word “Andrew.”

All right there it is. Thank so much for doing this interview.

Alain: Yeah, thanks for having me.

Andrew: You bet. Bye. Bye, everyone.

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