Podcast: I've Sold My Business. Now What? Interview with Cody McLain
Cody McLain shares his business experiences in building and selling his company, as well as learning how to delegate to a team you trust.
About the Host
Ryan is an entrepreneur, podcast host of the show Life After Business and the co-owner of Solidity Financial. Having personally experienced the hazards of selling a business, he joined up with his friend Brandon Wood to educate others on the process. Through their business (Solidity Financial), they provide a platform for entrepreneurs called The Value Advantage™ that helps in exit planning, value building and financial management.
About the Guest
Cody McLain founded his first company in middle school. Cody has gone on to build and sell a variety of million dollar enterprises. His first two companies were in the web hosting industry which led him to open an office in India and provide outsourced support to other hosting companies. Today he is the founder and Executive Chairman of SupportNinja, an outsourced services company for IT. companies and startups alike. SupportNinja handles the back-office and front-end Customer Support for a wide range of online platforms, apps and SaaS providers around the world.
If you listen, you will learn:
- What it is like to sell a company young and not know what to do next
- How hiring key people can free up your time and focus
- The importance of looking outside of day-to-day business operations
- The need for meaning, drive, and motivation as an entrepreneur
- The journey of self-discovery and how to find your ‘why’
Ryan: Welcome back to Life After Business podcast where I bring you all the information you need to exit your company and explore what life can be like on the other side. This is Ryan Tansom, your host. I hope you enjoy this episode.
Welcome back to the Life After Business podcast. Today’s guest’s name is Cody McLain. Cody is a serial entrepreneur. He’s in his late 20s. He’s sold multiple businesses and the reason that today’s episode is interesting is because at the age of 15, he star ted a web hosting company to grow it up to $600,000, partner with another individual who is involved in penny stocks and defrauded Cody in his business so he lost it all. Only to go on to start another venture, grow it up, sell it, have an entire period of reflection where he was trying to figure out what does it mean to live a life of happiness, who does he want to be, and trying to find out his why, only to begin multiple other ventures and start his current company, SupportNinja, that has over 200 employees and over $4 million in revenue.
Cody and I touched on a lot of different subjects about how to systematize your business, how to keep culture and values in a company while growing it to a place that you can actually replace yourself and hire the CEO th at can replace you to take the company to the next level so you can focus on the things that you like.
Cody shares a lot of his wisdom and experience with us over the interview and how he handled it on the day he sold his company. Without further ado, I r eally hope you enjoy this interview with Cody.
This episode of Life After Business is sponsored by The Value Advantage. The Value Advantage is a platform delivered via peer groups and/or one on one to help you build a valuable company that can thrive witho ut you while putting an exit plan in place so you have the option to sell when you want, to who you want, for how much you want.
You’re able to manage the business by the numbers, work in the business as much or as little as you want, and you fully understand how the business impacts your personal financials.
If you want to know more, check out the show notes or the website.
Cody, how are you doing today?
Cody: I’m doing pretty good. How are you, Ryan?
Ryan: Doing good. I’m excited for our conversation because I came across your article that you had written recently and it hit on a lot of the different cylinders of the topics that our audience likes to talk about about building the value in the business and also trying to figure out how to work yourself out while doing that as well. You’ve got a very, very interesting background. For our listeners, can you give them a little bit of a backdrop? You started being an entrepreneur very early on in your life. Can you bring us into that realm? What made you decide to go into entrepreneurship?
Cody: Yeah, sure. It’s been an interesting journey, actually. I actually have a book coming out soon. I’m just trying to find a publisher, but I’m hoping to inspire lots of underprivileg ed kids who may have grown up in similar situations that I did.
But basically, both my parents died before I turned 18. There was a time when I was 15 when me and a friend wanted to buy an Xbox but we didn’t have the money, he came up with the idea to sta rt a business. Our partnership fell apart, but then throughout that whole period from 15 to 17, I started to put more and more of my time into this business which was a hosting company. I remember using my mom’s social security number and opening up a bank account because I was under 18 and I couldn’t do it. Basically, I had no idea what I was doing. I just found something that interested me and I pursued that to hell and high water.
I was able to partner up with another guy up in Canada. When I turned 18, I was making enough money to move up just south of the border next to Vancouver. I was living there for about a year but unfortunately, he found this guy who was a penny stock investor and he was just basically kind of a con-artist and he was able to essent ially steal the business from us. It’s a huge long story. It’s in the book. It was a $600,000 business at that point and I just had to basically start from scratch. I was up in Seattle by myself and I decided to move down to Los Angeles and I started anoth er company called PacificHost.
PacificHost was a lot more successful. I did it completely on my own and I was able to sell that a few years later to a company called Lunarpages, which they specialize in doing enterprise cloud for enterprise companies.
Actually, when I was running PacificHost, it was a hosting company and I essentially opened up the market to what’s called FFmpeg Hosting. FFmpeg is a Linux codec so basically every time you upload a video on YouTube, it converts to whatever format you upload that video into an FLV format. This is back in the days when they were still using Flash, now HTML5. But basically, when YouTube got big, everybody wanted to have their own YouTube site. I saw a market for the shared hosting and I started offering that o n my servers and I was able to grow a fairly successful brand just through that.
When I had my hosting company, we hosted over 30,000 websites at the end when I sold it. During that whole time, I was supporting thousands of customers so I had to grow a team that will support me and my customers. I started another company based off the—I had a lot of guys in India basically providing me with a bunch of tech support and server administrations.
Then I figured, why not offer this as a sub service to other web hosting companies. I partnered up and found a company called SupportMonk.com and when I sold PacificHost, I also sold my controlling interest in SupportMonk. That was around when I was 22, 23, and all this happened. Then I gave myself the year or time off and after I sold that, I just kind of discovered myself a little bit more. I started reading, I started travelling, I learned how to fly an airplane.
Cody:Became a photographer, took lots of pictures, and spent some time with myself. There was a period where I realized that I wanted to get back into the game. I saw an opening of this niche that combined all my previous years of experience of dealing with customers and providing support, etc. and seeing that there is an opening with the tech startups essentially because it’s called the BPO and you know what that term was a year ago, it stands for Business Process Outsourcing which is just a fancy name for a call center.
Back in the 90s, outsourcing started in India, in the Philippines, etc. You tend to have two gamuts on either end. You have this really small mom and pop companies like virtual assistant services that are providing one or two people for small businesses and then you have the opposite end of that, which is this huge multi-million d ollar, some billion dollar companies that are providing outsource support contracts to large enterprise corporations.
There’s not really anybody that was providing a huge amount of support to these new emerging, innovating tech startups. Nobody really unde rstood them. I just saw an opening. I figured I can combine my experience and customer support and so that’s when I founded SupportNinja in 2015.
Two years down the road, now, we have over 200 people in the Philippines that provide support for some really big name companies. I can’t just really name them because of privacy concerns. If I mentioned them, everybody on this podcast would know who they were. Then I started SupportNinja and now we’re at a little over $4 million in revenue, growing pretty fast and pretty happy with where we’re at and where we’re headed.
Ryan: Wow, that’s such a cool story and there’s so many different ways I want to peel this apart because you’ve got so much wisdom from the experiences that you’ve had at such a young age. If we c an maybe take in bite sized chunks, let’s go back to you got defrauded in your first business at a very young age, having a $600,000 business. When you started your next business, PacificHost, what were some of the things that you learned off that first time that you immediately knew you’re going to do differently?
Cody: I was definitely young. The thing is before I merged my business with my partner, I realized I was very good with the tech aspect, with the marketing, with the strategy. All the aspects that I didn’t know or understand about the business like the registration, the taxes, just the various administrative aspects, I figured, “Okay, my partner could handle that, he’s much older than me, he has more wisdom, I’m just not going to learn or care anything about that.” That was one of my biggest mistakes with that, I gave him too much leeway in the decision-making and I didn’t check up on his progress. He failed on some aspects that have contributed as a whole to us eventually losing the company.
In the new company, I didn’t have a partner. I just decided to go at it alone and it was very scary because there’s a lot of walls that you look up like, “Oh, I can’t do this. I can’t do that.” I just sort of put that aside for a second and I spent a lot of tim e figuring out how do I register a business, how do I pay my taxes.
There was even a period where I was actually audited by the IRS and I was 20 or 21. I didn’t have the money to do anything else but I ended up having to defend myself against the IRS. I’m all on my own and I won. I didn’t have to pay them a single dime. I didn’t have to hire a tax attorney for $15,000 to defend me.
Apparently, when you have a single member LLC, those are the most audited types of companies because that’s very easy for fraud and stuff. When I started PacificHost, I had to learn a lot of things on my own. I ended up having to learn them.
Ryan: I’m tracking you because instead of having these walls, you just decided to delegate, you just kind of have to take it and learn it in order to be the person that’s in control of it.
Cody:In many ways, yeah. Especially when you don’t have a partner to rely on.
Ryan: Tracking the story, the title of the article that I read was about how you would scale your business to the $4 million that you are at today in your current company and you’ve decided to really focus in on this work-life balance. Did you master that at the PacificHost? Because you’re obviously taking on a lot of stuff as a single member of that business, how did you build that up to sell it? Obviously, you’re on your next venture again, did you work too much? How did you end up delegating those different tasks as you were taking on so much in that business?
Cody: To be honest, I really didn’t. I was doing everything myself. I was doing the marketing, the website design. The only thing that I outsourced was indeed the actual customer support aspect of it, even when it w as a billing matter, those things will eventually get assigned to me if the lower tier person wasn’t able to actually handle it.
There was a lot of responsibility on my plate and I was always stressed. I had that level of guilt when I wasn’t working I should be working, when I was working I didn’t want to be working because I was constantly burned out. It was not a great experience. In many ways, I was quite happy to sell it. But after I sold it, I had a sense of emptiness because I no longer had employees and customers to handle, to deal with.
But it was only after I sold the company when I read Tim Ferriss’ famous 4-Hour Workweek, when I realized I was doing everything wrong. I realized that I was spending way too much time in the front doing all these th ings with myself when I could have outsourced not only the actual creation of the website but just more or less sit on the outer end looking at the strategy end of it. I think it’s important as an entrepreneur to realize how the various aspects of your bus iness are running and that you need to fully understand them.
But there’s a difference between understanding them and actually having to do them yourself or establishing a process that will allow you to have a part of your company become automated. An example is when you know that content marketing is an important aspect and you need to write content for your blog. Write a few blog posts to know what kind of content you should be writing on the format, then you can create a process, and then find somebody else who can actually do that for you consistently. Or even if you don’t have that, you can use a service like scripted.com to hire them to handle the content creation for you on a regular basis. I didn’t really figure that out until after I sold the comp any. I didn’t even have my first assistant until after I sold the company.
Ryan: Wow, so you’re doing all of that yourself in that first business?
Ryan: I like how you articulated that you felt guilty for working too much but then when you’re burnt out, you want to take a break but then you felt guilty for being on a break so then you work. It’s this vicious cycle, because I’ve experienced that and I know a lot of our listeners or my customers have experienced that. I’m just curious, at what point did you just kind o f lift your head up and go, “This is too much.” Was there a specific event that happened or what?
Cody: There’s certainly always events like when the servers crashed and you have customers calling, screaming at you trying to sue you because their website’s down, that they pay you $50 for three years for and they’re saying they’re losing $1,000 a minute, having to deal with that was always a stress point.
The one thing that I always told myself is I would never get back into dealing with super small businesses or freelancers because it’s such a headache to deal with a small amount of money and a huge amount of headache whereas now with SupportNinja, we only deal with very high-end type contracts enterprise companies and they’re a lot easier to deal with.
Ryan: Oh my gosh, you just brought me back. Our old business, one of the divisions was Managed IT Services for business to business so a little bit different fashion of a service than you were doing but as I was building out the original service offering, there was a church and school that we used to do outsourced IT for. Again, maintaining servers when you’re just never getting paid enough, and they were doing a service on Sunday and I got a call on Saturday which our service hours didn’t cover and the whole congregation is not going to be able to do their deal unless I will go up there and fix some stuff. I was like wait a second, this is not sustainable.
Cody: It reminds me of an essay written by Paul Graham about the maker versus the manager. There was a point when I was running PacificHost when I was having to manage the company while making it at the same time and I didn’t really split that time. It’s always during support tickets your handling the customer calls and then at nighttime, I would then be working on the actual business and the marketing or the website. I think it’s important to schedule those differences whenever you’re managing versus actually making. Or what Cal Newport's book called Deep Work where he talks about that. It was an importan t aspect whenever I got to the business.
It’s interesting because you don’t really always realize what’s next or what you need to have in your business. It’s only after you have certain people or you recruit certain positions that you actually realize what you are missing all that time. There was a point where I had to hire an operations manager but I didn’t even know that such a job existed and I didn’t know how much work I could be delegating to that person to operate the business on a day to day basis an d how much time that would free me up.
It’s so hard to justify the time initially, if it’s a few thousand dollars or whatever. It’s hard to know how much money you’re saving because too often, as entrepreneurs, we don’t actually ask ourselves. If I were a consultant, what would my time be on an hourly basis? What is that worth?
It was a big step forward when I actually went out and hired an operations manager. All of a sudden, I didn’t have to deal with server crashes, with the escalations of the customers , and all of those problems. I was able to focus more on the higher end tier about what’s going to have the biggest impact in the business. That was a huge realization for me.
Ryan: Did you have metrics financially? I totally agree with you, I’ve been through the exact same situation. I’m just curious in that situation, was it if I hit this cash flow then I’m going to hire? I think that’s the biggest challenge, kind of like the Michael Gerber EMyth, to get out of that where you’re actually the technician doing the work. Did you dip into a line of credit? Did you just decide to go extend yourself and leverage yourself on a couple more clients to then hire the person? How did you actually articulate that decision?
Cody: I wouldn’t say that there is any specific metric that I was looking at, it was just the realization of constantly being burned out. There’s this southern folk saying that I like to bring up a lot, you can’t read the label while you’re inside the jar. It’s way too easy to be stuck inside that jar just dealing with your day to day business operations but not really taking a step to look outside of that. One example of something that I do now is before I start my work week on Monday, I actually plan out what is going to be my strong area focus for that week, what am I going to be making a lot of progress on.
It’s too easy to not ask yourself what’s going wrong and just focus on what’s in front of you that you don’t really take time to ask yourself what do you n eed to insert or modify to make better, what are your biggest problems in the business that are causing you to not make as much progress as you would like to be?
Ryan: In your business, the PacificHost that you sold, with you doing a lot in the business, where did the offer come from? How did they value it? And then the third question would be did your involvement affect the value?
Cody: It was sold for about a year’s worth of revenue. A projected year of revenue is pretty standard in the web hosting industry. I was able to find a pretty good broker within the industry who was able to connect me with the buyer that ended up being Lunarpages.
It was a pretty seamless buy. Although the company was being sold for about a year, it was up for bid, I went through multiple buyer conversations and it was depressing in the same respect because I almost didn’t want to sell it because it was my baby and so I was having all these feelings of do I want to sell it, do I not want to sell it. I was able to just successfully sell it. It was a year’s worth of revenue from the projected date.
Ryan: What were some of the reasons that you’re going through in your head in that negotiation, that internal dialogue? What were some of the reasons you wanted to sell it and what were so me of the reasons you didn’t want to?
Cody: I think it’s because of an emotional attachment, it was the biggest reason why I didn’t want to sell it. Because if you put all your hard-earned effort and time into it, it’s really hard to justify a cost to get out of that. Even if it’s a lot of money, you still question can you make this bigger? Can you make it better? I think my reasons were consistent, it’s the feeling of being burned out consistently, not really having that intrinsic motivation that I want to push the company further. I just felt stuck. I didn’t really know where to take it to next.
One of the biggest things with when you build a company is that you can’t just necessarily make a pivot once you have a large customer audience or a specific marke t that you tackled. In some respects, I wanted to pivot, I wanted to go after hiring customers after I realized what a pain some of the customers are that I had to deal with. I realized I couldn’t do that. There was a feeling of being stuck in the company. It converted from being a startup into a company where there was no real innovation that needed to occur. You just need to optimize existing systems, to make them slightly more efficient. That just didn’t interest me as much. There was a consistent, a lit tle bit of everything.
Ryan:What was your feeling the day you sold it?
Cody:That’s interesting. I remember being at the company headquarters in Orange County. I was sitting at the board table. I had the CEO and a lawyer on the phone and he wired the money and then they asked me to log in. I went to go check my bank account balance and there are a few extra zeros in there. The CEO asks me how do I feel, I was like, “Pretty good. We’ve got a lot of work here to do so let’s get to it.”
I remember back in that moment, I didn’t really take the time to appreciate that win that I just had. I know Tim Ferriss has what he calls a jar of awesome, or having a gratitude journal. I realized back in that moment that there’s a lot of small wins as an entrepreneur and we don’t really take the time to appreciate those. That was one of the lessons I learned from that after I sold it.
There wasn’t just a feeling of excitement, it was just like, “Oh wow. I have a lot of money. Let me go buy a whole bunch of new things.” Which lasted for a short period of time then I got back into it and tried to realiz e it’s not just about the money, it’s what’s next, what kind of impact do I want to have, what kind of meaning do I want to bring into my life.
Ryan: I love what you just said. That couple of sentences doesn’t probably explain the journey and emotion that you went through to actually come to that realization. Can we go back because I can very much relate to what you said. To me, it was slightly different and my emotional journey was slightly different. What is it that you decided to do? What are the cool th ings that you decided to buy to fill this gap? I saw in some your articles, some of the things you did, the soul searching you did. Walk us through that journey of how did you actually get to that point to realize it’s not about the money?
Cody: After I sold the company, there was definitely a period of time where I just didn’t really know what to do with myself. I tried playing video games, just tried to even work on figuring out what my next business idea was because I was so excited to just get right bac k into it. I was even kind of de-motivated a little bit because I feel like I was starting back at ground zero if I want to start something else up. There’s a long period of time where I was just going to start another hosting company but I ended up scrapp ing that idea. There’s a lot of back and forth and I’m just unsure what to do with myself.
What I would say that caused the biggest impact is when I started to read a lot of articles. A lot of those articles started to lead to reading a lot of books. Readi ng books about habits and then I realized, wow, for the past 10 years of my life I’ve been waking up, I eat a bowl of sugary cereal, I watch an hour of TV, and I work for the rest of the day. I feel bad at the end of the day because I don’t feel like I’ve got anything done and yet I worked the entire day. I was procrastinating constantly. It was not great in terms of my health, in terms of my kno wledge building and all of that so I was able to establish new habits.
Today, I wake up, I go to the gym and I run, I meditate and I read. I like to calm my mind, my body, and my soul. That sort of exists like a key stone pillar for me and that was sort of a hard foundation. It’s just like whenever you make your bed, it’s the idea that you feel you don’t get anything d one, at least you made your bed, you have that routine.
There’s days that as they pass by, it just sort of becomes the same old. Every day that passes, it seems almost the same as the last but at least I can say that I’m adding to my knowledge. I’m mainta ining a stress-free mind. I’m trying to remain clear and focused on my work. But it was just a lot of trial and error, I suppose.
When I was running the company, I had interests, I was playing Microsoft Flight Simulator but I never thought that I would be able to fly an airplane. There was just some time where I just said, screw it, I’m going to go ahead and try it out and committed myself to flight lessons. I committed myself to just reading 30 minutes a day for two weeks and that turned into a lifelong ha bit.
It’s just starting with small changes, small acts. Without having this huge company to run, I was finally able to devote time to myself, to looking at what my passions were. I really neglected that for a very long period of time. I was happy to have t hat to myself where I was able to just start self-discovery.
Ryan: Did you find it difficult to do that when you don’t have to do that? I’ve seen other people struggle with that.
Cody: We don’t have to do anything, I suppose. When you have people like Elon Musk or Jeff Bezos, they don’t have to do anything but yet they continue to do something. It’s all about finding meaning and answering that ‘why’ question, why do you do what you do. That’s the real reason for having that intrinsic motivation for having a drive in your life. If you read Viktor Frankl’s book...
Ryan:Man’s Search For Meaning.
Cody: Yes, exactly. He’s in a concentration camp yet he’s able to find meaning. If you win the lottery tomorrow, it obviously doesn’t make you happy but I discovered t hat I have an interest in learning many new talents with wanting to help others as much as I can, with wanting to build a business that can support other people’s ideas, and hopefully I can help change the world in some minute, small degree by helping othe r companies or people achieve their dreams.
Ryan: Your ‘why’ seems tied to that. As you recalibrated over this period of time, what was the actual time frame between when you sold and when you started SupportNinja?
Cody: Somewhere between three and two years I’d say. I made a lot of progress with other companies so I was able to start other side ventures that made a little bit of money for me. But certainly SupportNinja has been my main focus.
Ryan: I’ll go back to your ‘why’ and finding meaning. Obviously, we’re dabbling to some other things in the SupportNinja, obviously it’s a big successful company at this point. How did you tie your ‘why’ into when you started that? What is your ‘why’?
Cody: It’s hard to just answer specifically. There’s a lot of ‘whys’ I guess that I have. There’s wanting to have a constant drive of learning new things. Not necessarily achieving complete mastery, but achieving enough where I can say that I can do it. Like I said, I have a lottery brain of sorts where I’m always intereste d in the newest thing and trying new ideas.
Ryan: I’m on the same page. As I saw on your articles that you like the book Meditations. You’ve already mentioned Tim Ferriss. There’s this whole thirst for knowledge. I’ve interviewed some other entrepreneurs where they’re using—there is a gentleman who had said, “Using your business as a platform to do the things that you want to do.” You mentioned that you lost your customers but now you’ve got customers. You’ve got some influences. You’ve got people and you’r e able to use that and enable that thirst for knowledge, which is really, really cool.
Cody:At the same time, we’re able to support their company’s growth. I’d like to think that SupportNinja helps scale all these other innovative companies. They have innovative ideas, they’re growing it but we’re here supporting that growth because we’re lowering operating costs. We’re strategizing a support plan with them in terms of how we’ll handle the training and the management of that so that we’re meeting the metri cs. It’s a lot of fun stuff in the back end. But every new client is kind of like a consulting gig in a way.
Ryan: What are some of the things, when you started SupportNinja and you’ve had some ridiculously successful growth, what are the key strategies and habits that you’re implementing to make sure that you don’t fall into the traps that you’ve had in the past?
Cody: Certainly, it’s hard to try and run a company where it’s mostly managed in a foreign country. We had to go to the Philippines and figure ou t how to register a foreign corporation there. It’s not a fun process. I don’t think I would do it again.
To run it is another interesting story because it’s having to combine people, technology, and processes. One of the bigger issues that I had initiall y was how to manage such a large team of people. It was interesting to try and grow it out from having an operations manager to a site director, to a regional director, and trying to create these various branches of management as the company was growing. T hat was a huge pain.
One of the ways that I was able to help solve that as I talked about in my blogpost is by using a software that allows me to create those processes. Because what I find in a lot of companies is that if you’re the entrepreneur, you know your business inside and out so you’ll actually go and actually do that part of the process but then you hire somebody else or you don’t take the time to really fully understand an aspect of your business and you delegate that to somebody else. But then t hey retain that knowledge and then they’re essentially tied to your business and that’s part of the problem that I didn’t want to have. I went through the process of creating all these various processes and then instructed others within the company to use those processes and to mold those processes as they see fit and as the company changes.
That allows us to keep the knowledge within the company. It allows us to grow upon those processes instead of having to start anew or just having independent parts of t he whole. You have some employees who know certain aspects of the business but the other people don’t know how to do their job if that person is sick etc. I try to change that a little bit.
In terms of having to grow the company, we invest a lot of time back into the actual employee development. We have tons of free things that we offer employees. We try to create a really meaningful culture of love and family, it’s interesting, the kind of culture that we try to create in the Philippines.
Ryan: How do you do that? I’m just totally curious because you’re based in the US. How do you spread your charisma and enthusiasm and all that to people that are across the world? How does that whole thing work?
Cody: I do something every month. I send out what I call a Ninja mail. It typically is a short story that combines with a moral lesson. I try to look at what’s happening in the business and what do we need to share and talk about this month. I also have to travel to the Philippines quite a bit and meeting everybody in person, working with them directly and the clients. We also encourage our clients to send their own swag to their team so we have client logos and t-shirts, and stickers and everything in the office so that our teams actually feel like they’re working f or that company and not just for us.
We have like a microculture of our own clients’ cultures embedded within our own culture in the Philippines. We have to travel quite a bit. We do video recordings where we record ourselves, we send that over to our team and we have a huge Slack channel whe re all of our employees in the lobby, we also had a help with the development of a Slack application called HeyTaco! which is a fun little application where you can actually send tacos to other employees. We have points where if you get enough tacos, then you can redeem that for a prize like a gift card or some kind of swag. We try to use technology as much as possible as well to encourage a fun culture in the office.
Ryan: To go back to the standard operating procedures, the SOPs and the processes that you have mentioned, I think the travel knowledge is always something whether it is yourself or anybody else that people struggle with, how do you combine the technology and the processes to the people? What are the most successful processes that you’ve seen implemented where it’s a repeatable situation that wasn’t before?
Cody: Our biggest issue with every new client that we take aboard is essentially the new project where we need to figure out what are they needs, how can we service them, what kind of metrics do they need on a recurring basis, what kind of QA do we need. Every new client is just like a new thing and it’s not a consistent sign up with our SaaS product and an automated email gets sent previously which was my hosting company.
The need that I saw to solve was the onboarding process. We use a software called Pipefy which is sort of like a Trello board but it allows you to specify certain fields and automated operations to occur like sending an email to a client or sending an email to our department , assigning a card to a person. We automate our onboarding process.
After our salesperson signs, the sales contract is executed, then the salesperson adds them to that process and that’ll go further. It’ll go to our finance department which puts the billin g information together, which sends out the invoice. It’ll notify the training department which then contacts the client and then sets up a meeting to figure out how we’re going to figure out the training processes. We’re able to get all the various depart ments within the company.
We have a fairly big company, I’ve never had a company as big so it’s very difficult to deal with so many people who have their own way of doing things. I also combine that with specific instructions. We have an internal LMS or le arning management systems so we have all of our employees go through that. We have various courses that they have to take. Including one of them is we try and standardize communications, so that includes Slack and email.
I have another blogpost where I talk about our workflow within the company where we actually have Gmail set up in a specific way. We standardize the way that communication occurs throughout the company because it’s so easy if you have a large company, you have different departments use app lications in different ways or they collaborate differently. That’s one of the things that we try to standardize. It’s not only the communication but the processes that are re curring and that require multiple departments. The first thing was that client on-boarding process.
As that client card gets passed to various processes, it even sends automatic emails to the client based on the variables and the fields that those people have entered in that very specific phase in the process. We’re able to take this thing that would pre viously take lots of emails back and forth and lots of just random direct messages and Slack about an update on this client or what you need for that client. We’re able to combine that wholly into this process. It solves that communication gap so nothing c an fall through the cracks.
The beautiful thing about it is that I know previously in my PacificHost I had a wiki. We try to store as much information about the company inside that wiki but the problem is it’s very difficult to get your employees to use th at wiki because it’s not functionally a part of their job. They don’t necessarily need to look at it all the time. They look at it to figure it out and then they commit it to memory but then they’ll often have memory errors where they don’t it properly and things fall into the cracks. That’s essentially what happens, they never end up referring to the wiki and it never gets updated so then it becomes irrelevant and nobody looks at it because it’s irrelevant.
With the SOP type software is that it’s constantly relevant because you require that the process is actually a part of it. You have to follow the instructions in order to perform the process. That allows me or anybody to actually go in there and make a modification to that process overnight and we don’t have to send a mass email to the company or departments because that’s simply going to be there the next time that they go through that process. You’re able to update it on the fly. I found this sort of data extraction to be a huge change. It goes back to the process, I’m blanking out right now, but like the Toyota production method. Do you remember what the term is?
Ryan: Yes. Lean manufacturing?
Cody: Lean manufacturing is one of it.
Ryan: I know exactly what you’re talking about. I can’t remember the exact term.
Cody: I remember I did a talk a year ago at a company that basically specializes in talking about that. They had a huge issue where they had a lot of employees who had knowledge about their specific part of the job but they weren’t willing to share t hat with the rest of the company. They weren’t willing to write it down or they weren’t willing to change their ways. That’s a huge issue I see a lot of times in small companies where you can end up getting blackmailed by your employee because if your empl oyee knows that you can’t run the company without him, then he has a huge amount of leverage over you. But if you start the company with the intention that everything from whenever you hire an employee or even a contractor, that that contractor is doing so mething that you’ve already outlined, then they’re supposed to help fill that in.
Then you’re able to not just pay for that contractor’s time but then you’re able to log that knowledge or anything that they can add to your company so that you can take it t o somebody else. It also adds a lot of dexterity to your company where if you have somebody that’s out or they’re sick maybe you, as an entrepreneur, have to fill that position. You might be lost if you haven’t been following that person for a while and if you convert them into a process where their job is a part of the process which is a written down process then it’s a lot easier to take that over.
Cody: That’s the other biggest issue when you sell. It’s that the buyer, either it’s such a long period of time where the founder will have to be involved in the company so that the new buyer knows how to run it. But if you log how you do everyt hing from the beginning, then that makes it a lot easier.
Ryan: How do you balance the culture and this? With a few hundred employees that you’ve got, how do you make it not seem like Big Brother or we’re dictating this and maintaining that fun, Slack-base d culture with cool communication and swag. How do you incorporated those two?
Cody: I just try not to be very strict with everything. If we have a problem, I try and look at it from a perspective of how would I feel in that situation. A recent example I w ould give is Facebook and YouTube. If I were in my employee’s position, having to work this job, it would be great to be able to go to Facebook or YouTube, just to have a small mini break. What most companies are doing is they just block the websites out a nd you can’t have your mobile phones on the floor because there’s privacy concerns with the client. If I were that, I would love to have something like that but the problem that we end up having the agencies is that they can spend their entire time on Face book, maybe they’re not working the entire time.
Instead, I devised a solution where we actually use a Chrome extension where it actually divides up the time per agent on a daily basis. We’ll give each agent 25 minutes a day where they can essentially divi de that time of how much they want to have sort of what I call mini breaks.
There’s a lot of studies that show that human attention is very limited and so if we can allow an agent in between when they don’t have a lot of tickets so they can just quickly o pen up Facebook and be on Facebook for a few minutes then get back to work, that helps to refresh their brain and they’ll feel that they’ve got like a bit of a mini break.
That’s an alternate way of looking at it, it’s like how can we solve this problem without limiting them outright, to making the job a little bit better, a little bit more fun, a little bit easier to work with. Because if I knew that I was having to go into a job and I couldn’t access Facebook or social media, something during my job espe cially if it’s a rough day, that’s just what we try and do, is look at it from that perspective. I look at other companies.
In the Philippines, it’s very corporate there, it’s very like 90s, 2000s corporate of how most companies are run. I try to look at i t from a perspective of what do our clients want and our clients want like the Google office and so we try and bring that culture, that environment of providing as much freedom as possible and trying to do it in a cool and fun way because definitely, I would want to work there if I was in the Philippines.
Ryan: Yeah. That’s a great answer. I think having a balance between those two things is completely possible and being real with the world that we live in, you can’t have a complete black and white picture like that. The cool little hacks you talked about how you’re actually managing is extremely effective.
When you are looking towards the future, now that you’ve gone through a couple of your own exits, where do you see the end or your ‘why’ with the SupportNinja? Is there a specific revenue target that you’re trying to go towards? Is it like a specific industry disruption? How has your ‘why’ changed with the company vision?
Cody: I see SupportNinja initially as just a foundation. A foundation to being able to launch other ventures and to do a lot more. In regards to industry disruption, we are working on something where we essentially want to lower the barrier of entry for customer support. Because right now, we have to turn a lot of customers away because o ur minimum client size, you can end up paying us a couple of thousand dollars a month because the amount of resources and time that we have to go into a new project from having to set up the meetings, from having to create the training material, to having a management team, it’s a lot of time and resources. It requires a lot.
I want to lower that commitment so that we can make it more efficient, we can lower the cost, we can get a lot of the smaller companies who are indeed smaller but don’t obviously have the money to be able to make use of effective customer support services that will help scale their business and help do most of the support without the intervention from a very young start. That’s what we’re working on internally.
It definitely feels like that’s something that I always need. I have ADHD and it’s very easy for me to lose interest in stuff so I’m always trying to find what’s the newest thing that I’m trying to focus on. Initially, it was launching the company, it was establishing ourselves i n the Philippines, it was trying to get sales, figuring out the sales funnel, figuring out the marketing end of it, and now working on a SaaS product that we can eventually launch and go to market with that.
Eventually, I see the company going into AI. In 10 years, a lot of the work that we do and whatnot is going to be partly automated by artificial intelligence. There’s a huge benefit that we have to already doing sort of that work that is eventually going t o be automated and that gives us a bit of advantage. Definitely, I’m always looking forward towards the future.
Ryan: That topic right there is going to give you plenty of bandwidth and runway to constantly be learning because I think it’s going to be all of us versus just constant innovation. For people like yourself that like to learn and grow, we’ve got to constantly be keeping on edge and stay competitive in our industry. It’s a pretty cool situation. On a day to day basis, the making versus the managin g, I’m assuming you like to spend most of your time in the making?
Cody: Yes, very true. It’s interesting to have a company now where I was able to step down as CEO and yet I’m still a majority owner of my company but I have somebody else running the compa ny. I’ve never been somebody who likes to manage, I like to make and always looking towards the future of how can I stir this shit into a direction that’s going to be good for us, it’s going to be good for the world and all of our clients.
Ryan: That’s awesome. One quick question before we start to wrap up. That individual that you found to replace you, where did you find this individual and how did you work on that transition?
Cody: That would be Connor. I really can’t pinpoint it. It was something where I was looking for just a regular employee and he just struck me as the right person. It’s one of those times, especially now, I never don’t listen to my gut feeling now and that’s something that I didn’t do especially when I lost that company, that got stol en from me. I had a gut feeling that something wasn’t right but I didn’t stick with it.
A lot of the times now, I’m able to recognize when I have a gut feeling about a person or a situation and I kind of measure the odds. I didn’t initially hire him as CEO , it was just to help manage the client services but clearly after a lot of conversation and talking, it was something that we both felt was right.
In fact, he asked for it but I had already started to think that, “Oh, he would be a good CEO.” It’s just interesting that we’re able to come into terms with it. But I can’t say there was a magic key. There’s a lot of people we’ve been through and hired and fired and they just weren’t right for the company. There’s no magic bullet unfortunately when it comes to that.
Ryan: That’s awesome. You had to trust your gut especially if you’re kind of married to this individual taking over your baby. Is there anything unique that you did on a compensation structure, or equity, or somehow tying into the future growth of t he business?
Cody: The interesting thing with Connor is that he was never much about the equity or the money up front, he really was somebody who is generally just a good person. It’s very rare to find those kinds of people. It wasn’t a huge issue for him. I’m a very fair person so I had to give him more than what he was even asking for just because I felt it was the right thing to do.
Ryan: That’s a way better position to be in than having someone just demanding, isn’t it?
Cody: Yeah. Honestly, it’s a big difference. It just shows kind of where your values are, where your morals are. It was sort of seeing the decisions that he made as the clients are resisting that led to me thinking that he would be the right person for the job. He’s a bit young but he has the right heart and that’s really what I look for.
Ryan: It’s so awesome. The individual at my old business that we hired to bring in that was just a total game changer for me. I kind of did the same thing where I wanted to give him a raise and we’re sitt ing over beer and he’s just like, “Hey, can I just get an extra week of vacation?” I’m like, “Yeah. Can I give you more money too?” It just makes it feel so much better because it just kind of validates the fact that you’ve got a really good person sitting across from you.
Cody: Yeah. I definitely take time to appreciate that as much as I can. It’s not too often where you’re in a position where I can say like, “I’m almost living the dream in some respect yet I’m still not happy.”
It’s like I have this huge ambition of all these things I want to do and yet, I’ve never been in a better position my entire life. I have my own company. I have other people running it for me. What better could you ask for? But it still comes back down to that meaning, that ‘why’ an d wanting to accomplish something, wanting to change something. That drive is still there yet I take time to appreciate what I have.
Ryan: I love it. As we wrap up, what is the best way for our listeners to get in touch with you?
Cody: Just visit my website, codymclain.com. Sign up for my newsletter. It is very rare that I send out a newsletter or a blogpost but whenever I do, I try and make it very, very good. I promise you won’t be disappointed.
Ryan: Thank you so much for coming on the show. I appreciate it
Cody: Yeah, thank you Ryan.