TSP078 | Kurt Theobald – Transcription

TSP079 | David Dotlich – Transcription
TSP081 | Vince Thompson – Transcription

John Livesay:

Hi and welcome to The Successful Pitch podcast. Today’s guest is Kurt Theobald, the CEO of both Classy Llama and Nucleus Commerce. Kurt has been featured in both Forbes and on the Huffington Post where they did an article on the three points of wisdom from a $5 million entrepreneur. So I wanted to find out what those three points of wisdom where in a much more detailed than just a story. The first one is be willing to do uncool things, in other words, it may not be sexy but it actually solves the problem and it allows people to be successful. The second is: What is the journey of entrepreneurship? What do you learn about yourself that allows you to be successful? Because if you have the concept and the mindset and the container, he says, for being successful, that’s what holds us success. Otherwise, it just leaks right out.

He also talks about be careful who you accept wisdom from as well as money. Make sure that it’s the kind of person that you want to become. If you’re going to be taking information from someone, you need to make sure that these people are someone you want to work with. His big takeaway is “Success happens when it’s ready.” You just got to keep moving. Enjoy the episode.

The interview begins in 45 seconds right after this information on how you can get funded fast.

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Hi and welcome to The Successful Pitch podcast. Today’s guest is Kurt Theobald. Kurt is the CEO and co-founder of Classy Llama, an Inc 5000 eCommerce agency that has already done $5 million in revenue. I found out about him from a wonderful blog he did on the three points of wisdom, and he said, “Entrepreneurs should create shiny new things, the edgier the better. Well, reality disagrees,” and Kurt is going to tell us all about that. Kurt, welcome to the show.

Kurt:

Thanks a lot John. I’m glad to be here.

John:

So tell me about what you’ve learned about valuable work often lies hidden, that you have to dig deeper. You said you’ve cut your teeth on ten previous business, all of which died, and you said you went too far. What do you mean by that? What happen that you’ve learned from ten things not working that’s made — now you are so successful?

Kurt:

I think there is a culture in the — Entrepreneurship circle sources culture that drives towards you’ve got to do the next big thing. I tried to do the next big thing so many times and I realized that sometimes, doing something that’s not cool but it’s in a niche where there is a real need, sometimes that can work a lot better and a lot faster than pursuing the next big thing. So that’s where I found — I got my traction is — I’m just going to do something that’s not as cool. I’m going to do it really really well, and that works out pretty well because a lot of people that don’t do things really really well in those uncool niches. So that’s worked really well for us.

John:

So talk about what’s considered a cool thing versus an uncool thing?

Kurt:

The cool things are the things that will publicly change the way that people do things. A lot of times it’s going to be consumer facing. So there’s this whole market where you’re serving businesses that people don’t really see, and that’s just not cool because nobody hears or knows about it. But when you’re doing something that’s going to change the behavior of the consumer, it’s going to reshape the world in some way, be for the big things that people want to do. They want to change the nature of energy, or the way that people buy things, or the way that people — a big new way to play video games. Virtual reality, how to apply that? There’s all these big things that are being developed that honestly, probably has lots to do with how much they hit the news, honestly. The more they hit the news, the cooler they are.

John:

Well, your willingness to do quote “the uncool things” sometimes require some sacrifices, right? Tell us about what you and your partner, Erik had to do as far as just the office space? You have to be almost like MacGyver sometimes, right?

Kurt:

Well that is true, and it’s probably true about the cool and uncool things. It may just be a common part of successful entrepreneurship, but it’s the willingness to go through difficult circumstances. Things like you hear a lot of entrepreneurs started in a garage, we started in a garage. It’s a common thing. I remember in the early days with our business, we had a two-car garage in my house that we were using as an office, and in the winters, we have this thin — like 6 mil plastic hanging up by the garage door to try to create some barrier for heat. I had a woodfired stove in the adjacent room, and that was all we have for heat. So it got really cold in the winter like we’re trying to — the guy had tried a coat and our hands are shaking because it’s so cold. Then in the summers, we took a panel out of the two-car garage door and put three quarters of that panel, we put in a particle board and then put an AC unit in there to try to keep it cool enough which also didn’t worked very well. So we we’re too hot in summers, too cold in the winters. I guess it’s part of being an entrepreneur and cutting your costs to the quick, and you just kind of bear through it because you believe in what you’re doing.

John:

You really have to have tenacity and grit and passion to survive those kinds of things, otherwise you’re like, it’s not worth it, right? You have to believe in what you’re doing and that you really want to work for yourself and have a big why of why you’re doing this. Even if it’s quote “uncool” right? So I just think that’s so valuable and congratulations on exceeding $5 million, so few startups ever get to $1 million, let alone 5. What is it that you could share as sort of the motivation factor beyond just making money that makes you so successful that makes your clients at Classy Llama want to keep working with you?

Kurt:

Well, I think that from the very beginning, like you mentioned that very important why, I actually started a professional journal back in 2004 towards the end of the year. That’s now about 12 years ago or 11 and a half years ago, and at the very beginning of that journal, I expressed that who I am as an entrepreneur, it’s part of my DNA, and so to do anything other than be an entrepreneur or to — when I sail, when I fall down, to not get back up and keep going is to betray who I am, and that I will not do. So that kind of powerful why in that foundation, it really makes it to work. As a friend of mine says, “a diffision.” A diffision means like incision is to cut like an incision as to cut into, diffision is to cut away, so you’re cutting away all other options and you have one path, and you have to stay in that path.

John:

Ooh, I love that.

Kurt:

So I made a diffision according to who I am and I have to stay on that path because I’ve cut away all other options. We’re kind of like scuttling the ship from the — I think it was carcasa, whatever, that scuttled the boats. And now they only have one way to go. They can’t go back, they had to go forward. That’s so important because there’s so much pain involved with entrepreneurship that you kind of have to cut away all the other options so that you really only do have one path to keep going, because you never would have done this if you knew how difficult it was going to be. So it’s just important to have that frame in mind. This is the only way to go.

John:

It’s so valuable. I know — what you said there, if you don’t come back from failure, you’re portraying who you really are. So failure might be something that happens but it doesn’t define you and it certainly doesn’t stop you from trying again, right?

Kurt:

Yeah, and I think it’s very important to clarify that who I am isn’t necessarily who’s someone else is, so my walking in that was appropriate where someone else who — they’re more of a supporter or they come alongside, they’re more consultative, whatever it is, different people have different strengths. So if you put someone who’s not an entrepreneur and they go, “I want to be the American entrepreneur because of what other people have said about me, rather than who I really am, ” it can really get them in a mess.

John:

Well, this whole thing you talked about is, the journey of entrepreneurship is really a journey of self discovery, which I think is so important because whether you’re pitching yourself to a client or an investor, they’re buying you much more so than the idea or your skills, don’t you think?

Kurt:

Especially like in an early stage of a business, they’re investing in you not this idea because the difficult thing about business is not getting a good idea. There’s lots of people that have good ideas. The difficult thing is executing that idea and bring it to fruition and making the smart choices and being able to receive good feedback, and not be too proud to receive the wisdom from others and have the fortitude to endure through the pain that is going to be required to get to the finish line because it almost always takes longer than you expect it will for it to be successful. You hear about these huge successes that happened overnight. Usually there’s a long story before those successes. Secondly, those are super rare even if they do happen. You got to invest in people that are going to be able to endure, going to have humility to receive quality feedback and have the wisdom installed to be able to guide an idea to quality fruition

John:

Their willingness to be coachable and not think you have all the answers and not even ask for help is so important to realize that you don’t have to know everything and you can get — here’s your resources and your network to get insights and give you a different perspective because we can become so myopic on thinking. We only see one way out of this and we always have other moves, right? But let’s talk about your big point about be careful who you accept wisdom from and how you choose your mentors and advisers. Not just by how successful they’ve been but are they a cultural fit with your philosophies. Can you speak to that?

Kurt:

Yeah, for sure. Something that I’ve learned is I just interacted with different people and there’s a lot of successful people out there according to the world standards of what success is. A lot of people with a lot of money out there, but that doesn’t necessarily mean you want to learn from them how to become wealthy. A lot of people say that’s the objective of entrepreneurship is I want a lot of money. The challenge is the way you get that money in the end will determine the quality of your life in all other aspects. So if you’re learning from someone who has a bunch of money, has been divorced three times, works 80 hours a week and has for the past 30 years, is that the way your life wants to look, you like to look? Is that what kind of money you want to have? Because money can own you or you can own money. If you take wisdom from those who have learned how to become the slave to money and they have a lot of it but they’re still a slave to it, that’s no life to live. So just look to the advisers that have a life that looks like the kind of life that you actually want to have, not just in the sum of money that they have or the make and model of their car but look at his family, look at their relationships, look for the deeper things in their life because those are the things that really has staying power.

John:

I love that. That’s so important because otherwise you’ll burn out right? If you don’t have a balance going on and a reason to have some other life outside of what your business is, people think “Oh, I’ll just put that all in the back burner and they’ll still be there when I finally become rich and successful and then I’ll be happy.” You have to figure out a way to be happy during this whole process right?

Kurt:

Yeah. I think what ends up happening is they say, well once I’m rich then I can take a view on things. I think what happens is that other parts of them atrophy. So by the time they actually get rich, that’s the slavery, that’s all they have. It’s not suddenly their lives are about building and growing. As Dr. Seuss says, the biggering and biggering and biggering, that’s what it’s all about at that point and they’ve lost the context, they’ve lost the sensitivity to the other things that are so much richer in life.

John:

Then how do you — as you get more and more successful in this success that you now have, how do you find the right people to join your team that have this mindset?

Kurt:

It kind of adds a third variable in any interaction where I’m evaluating people for the team. They have to have the right experience, they have to have the right soft skills but the third thing they have to have is the right cultural alignment. That’s really difficult to find all three things.

John:

Let’s take a little deep diving into each one. Obviously, the experience is pretty obvious. You need somebody to be a creative director where no technical stuff about ecommerce since that’s what you do for people and you want them to prove that they know how to do that right? But tell us what you mean by soft skills, is that emotional intelligence?

Kurt:

Yeah, by soft skills, I mean things like their ability to communicate effectively. To write things down in a way that’s coherent, and maybe this extends somewhat from a culture but just to be able to like be generally responsible for showing up on time, and showing up in meetings when they say they’re going to, and scheduling their time and just some fundamentals life skills, time management, communication, those kinds of things that you don’t go to necessarily a class to learn them. There’s things that you learn through osmosis and through relationship and whatever the culture that’s around you, you learn those soft skills.

John:

Let’s talk a little side note, side road there because I think what you said is so interesting, just about the basics of being on time. I had another guest who wrote a book about managing millennials, and that’s anywhere between 16 and 36 at the moment, and some of the baby boomers are having so much trouble managing millennials because they have a different mindset of what they think about work. I said, “If you don’t tell someone what your expectations are that they show up on time, then they’re going to think it’s loosy goosy right? Then you can’t get mad at them if you haven’t been very clear at the beginning that this is what we need from you. Do you have any insights as to how important it is to set the tone and expectations right from the get- go or even before you hire someone to make sure that’s a fit?

Kurt:

Yeah, that’s actually really important. I feel like when you’re in the interview process, you’re not just evaluating whether they are right for the team, but you’re actually setting context. You’re setting the table for what and that the foundation for what it will be like provided they actually do get selected and join the team. So setting those early expectations around “we expected you to be personally responsible” that’s like tying your shoes in our organization. It’s a fundamental. You got to tie your shoes before you run the race. So just being able to manage your own time, to communicate effectively, these are tying the shoe thing in our organization.

John:

I love that. You have to tie your own shoes before you run the race. We’re going to tweet that out. That’s great. Now, let’s talk about your culture alignment. How much time did you spend defining what the culture was so that you could decide what you wanted to have and what makes your culture unique?

Kurt:

The culture, my understanding of the culture and what I want to design and create into the culture has been an evolution over a number of years. Early on, I really felt like I have this vision for what I want the culture to look like. I’ve had a lot of jobs and I get to experience a lot of different cultures. I didn’t like any of them but I experienced a lot of things I didn’t like. So I had this thing I wanted to create so I built out a presentation and I built out a vision for it, and there’s a lot of good to that. I was able to articulate it and express it. It attracted people. However, what I learned through experience is that you can’t just write down the culture you want to have but if the people in your organization that make the culture what it actually is. So you can write it down and that’s what it theoretically is but what your culture actually is, is a product of the sum of the interweaving of the thread of all the people in an organization and what they make it so.

You can still design a culture. This is the culture I want, but then what you have to do is you have to go out and you got to find people that don’t just look at the cultural state and go, “I like that. That’s great.” But rather, you find out, are these the kinds of people that are going to contribute into this kind of culture. Are they going to create — do they bring this culture to the organization because that is the only way to really make it happen. You can guide a little bit here and there but ultimately, the people you bring together have to make the culture what it is. So it’s really all about that culture alignment, making sure you don’t just like the culture, but you align with it. You’re going to be a contributor to the culture. I tell people, I maybe in a position where I’m the last line of defense for the culture, but all of us, all of us need to be culture bastions. We are the propagators of the culture, everyone of us.

John:

That’s really walking your talk, isn’t it? Giving a people a sense that the tapestry need all of the threads to make it work.

Kurt:

That’s right.

John:

And that when you make people feel like they’re part of something, acknowledged and needed, then you get their passion to work in all kinds of situations right? Because they love that. That’s what people are looking for much more than just a paycheck. It’s the sense of acknowledgement, appreciation, and contributing and making a difference. I think if you can create a culture where that is the kind of thing that people want to come to work for, it gives them a reason to get up in the morning, gives them personal sense of pursuance, you’ve really done something well. I think — my suspicion is that’s the reason you’ve been so successful now, been able to achieve the revenue you have.

Kurt:

Yeah, I agree. Revenue and all, I think these are reflections. They’re by-products of what really matters. To speak to what you’re saying, all that I have done is I really try to be careful to honor each person that I’ve interviewed, to evaluate is this going to be good for them to come into this environment? Are they going to be able to contribute to this environment and how are they going to thrive in this environment? Because I want each person that comes into the organization to be able to be fully themselves, to not have to check part of themselves out of the door when they come in. Speaking of millennials, I think this is so important to capturing the hearts of millennials. There’s a lot of things — I look at the millennial generation and there are things — I really appreciate things that I think are things that they struggle with, and that’s true with any generation. But one of the things I love about millennials is that they really thrive on and demand authenticity and they thrive on being independent in their thinking, and really valuing I want to be able to express myself and be who I am. I love that. I want to make sure to protect that, because when you do that and you make sure that you got the right people in your organization that they can just be themselves and it’s going to work. Suddenly, you no longer have to draw passion out of them, you don’t have to draw in each and out of them. It will naturally organically, come from them because they’re just being who they are. You don’t want to force it anymore, you don’t have to draw it anymore, it comes from their core. It makes everything else a lot simpler.

John:

I think I’ve never heard anybody express it quite like that, because if you have somebody who’s just quote “phoning it in” and doesn’t get to express themselves and has to feel like they’re a robot and has to tone down their personality and their vision and their comments because they are not appreciated or wanted, then there’s no way that you’re going to be passionate about your vision. But if you encourage them to be authentic so you don’t have to be that one person that work and one person off work, and just looking at the clock until you can get off work to be yourself, then they’re passionate about their whole life and passionate about their day and they’re probably not going to leave at the next offer that’s just slightly more money, right? Because they’re motivated by more than money.

Kurt:

Yeah, and I can speak from experience, watching this happen. First of all, the retention level at Classy Llama and now Nucleus Commerce, it’s the second company I started — It’s just phenomenal. I mean people stay. I really believe it’s because they are able to be fully themselves here. The second thing is, we haven’t compromised on our team growth, and so when there’s an opportunity to grow, we don’t get loose on our standards in order to take advantage of the growth opportunity, but rather we limit our growth to how quickly we can find quality people and this is wisdom. You have find from Jim Collin’s and others, but I’ve seen the benefits. Other than that, people want to stay because they know that they’re being honored in who else is coming into the environment because they work with great people and they get to be fully themselves in the space that they’re in. That makes a space that they want to stay in.

John:

Well, one of the big cost that’s sort of hidden and really doesn’t get itemized is the cost of attrition and turnover. It’s hard to put a dollar amount on it but when you have to start from scratch and retrain somebody and get them to start developing relationships with the clients from the get-go, that’s a big hit on your productivity which affects your bottom line. So if you can attract and retain good people, that is gold right there, and that’s a big big part of being successful, financially, emotionally, every way, right?

Kurt:

Yeah. I think that a lot of times, there’s too limited view on the compounding effect where you can look at money and then you say, well, if I got a 5% return on money every year, after 20 years, it’s way bigger than 100% which is 5 times money. But this aim is through of time. A lot of people don’t realize that time is a resource that compounds, so how you invest your time now and the return you get now is something that can compound. Then the other thing is people like the investment you make in people and in building that team. If they stay with you and the team stays together, it’s like a sports team. The longer a sports team stays together and stays united, the more effective they’re going to get because they just start learning each other, they learn the game better, yes, but they also learn each other better and that’s strength of the fabric as we’re calling it, grows and you become more effective together in what you’re doing, as well as more effective as a team. I can’t underscore how powerful it is.

I watched these private equity companies come in and they buy up other companies, or even public companies, whatever. They come in and they buy in — they buy these companies and they insert — they’re like impose their culture on them, and then I see all of the good people scatter. People are balling up like they’re like quitting. I’m going “that company that bought that organization doesn’t understand that the most valuable thing in that company is leaving and it’s the people”.

John:

Yes. Well let’s talk about also the importance of saying no to the wrong client as well because that — you can’t just take any client even if you need the money because that can be a nightmare as well as drain on your time, your employees’ moral, and maybe even costing you money, right? Have you had that experience?

Kurt:

Oh yeah, many times. Honestly, that shows from that same thing of we have standards and we stick to our standards, our culture standards and who we work with as a — and the clients early, especially early, it’s just so painful because you got only so many opportunities and you need the revenue, and so you have to draw a line somewhere though and say these are the ones we’ll take and these are the ones that we won’t. I think I can say confidently that in my business I’ve never turned away a client and regretted it. I have many times accepted a client and regretted it.

John:

Ah, there we go. There’s the line everybody. You never regret saying no but you’ve often — you can say yes and regret it. It’s very much like dating too. I think people respect you if you’re not desperate and say, “Look, this is who we worked with. This is who we’re for, this is who we’re not for and we’re not so desperate that we’re just going to take anybody’s money.” It’s not a dictatorship, right. When you work with us, it’s a collaborative cons in the situation. We may not be a good fit for you. It’s not just a one way street if you decide whether you’re going to hire us or not, right?

Kurt:

I think a lot of it has to do with the willingness — when people want success before it’s time. When they’re engage with these different clients this angle, I can accept these fewer clients and I can live on a really lean budget and kind of rough it for a little bit longer in order to be principled in who I am expecting as clients, or I can say yes to more and try to grab that success before it’s time. It’s just that that lure of impatience and you just got away. Let success happen when it’s time. You focus on living by the right principles and the right standards and doing things the right way, and success will come when it’s time. You just do the hard work, the success will come on it’s time.

John:

Nice. Well, let’s talk about who your ideal clients are, both for Classy Llama and Nucleus.

Kurt:

Okay. Classy Llama typically works with companies that are generating, let’s just say $1 to $50 million in online sales. They’re looking for a partner relationship and they’re focus on or they’re needing help or wanting to build on the Magento platforms. So we’re focused on that piece of technology, that’s a key niche for us. So we’ve been building on the Magento platform since it came out in early 2008. We have focused on it, we pushed everything else off our plate and focused exclusively on it since being gold partners with Magento which is the high level of partnership you can have. Anyway, we are deeply invested in Magento, we know it very well and so we look to help. It’s established eCommerce companies or well-funded to sometimes well-funded startups as well, get going in their eCommerce businesses on the Magento platform.

The Nucleus Commerce actually serves the same market. It just does it in a different way.  We sell software extensions that help people, specifically that are getting on Magento 2.0 which just came out recently. We’re on one of the early providers of additional software that enhances the functionality and offering of the Magento 2.0 platform.

John:

Fantastic. I love how much symbiotic relationship there is there that the extension of the second company totally gets the knowledge you learn from the first. Is there any book that you recommend for our listeners to read about life or business that you found specifically inspirational or helpful?

Kurt:

Two books. One is the Good to Great by Jim Collins. It has some really great fundamentals there and what I love about it is it’s all data driven. There’s a lot of things that are data driven like — that’s data driven by — it doesn’t really, smack up true because you can make any data look like anything. Well, I read what he found and I feel like this was a true blue, data driven exploration because it’s found a lot of unexpected surprising truth that isn’t popular. When I see something that is not popular and I see the data behind of them, like okay, that’s not popular and I know it’s true, and so i trust it. I really believe that it good work with the — the Good to Great book.

I would actually offer up for young entrepreneurs that are just getting started, I’d offer up a book that I wrote called Finding Truth at the Bottom, and it really outlines three keys to being effective, to being productive. It also really tries to confess certain common paradigms that I think are really confused about what the expectations are around, what it looks like to be an entrepreneur, to run a business. I just think there’s some common held lies about what that means. This book really tries to conduct that. It’s a simple read, it’s fictional, relatively short. I know a lot of people have really gotten a lot a value out of it.

John:

Fantastic. We’ll be sure to put both of those books in the show notes with links, and I assume your book is available on Amazon?

Kurt:

Yeah. I’ll get you the links of that.

John:

Perfect. So how can people follow you on social media? What’s your Twitter handle, all that good stuff?

Kurt:

My Twitter handle is easy. This is @kurttheobald. I’m on LinkedIn, /in/ktheobald and those are the two key interface points on the business front  that I use.

John:

Fantastic. Well Kurt, it’s been a pleasure having you share your wisdom of how you’ve been so successful not just in revenue but creating a culture that attracts and retains the people who — not only share your vision, but contribute to it.

Kurt:

Yeah, I appreciate the opportunity John. I hope I helped a lot of people.

John:

Fantastic. Thanks again.

Kurt:

Thank you. Bye.

Thanks for listening to The Successful Pitch Podcast. If you liked the show, please go to iTunes and write a review, and encourage your friends to write reviews too. It really helps get the word out.

You know, people say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest but when it comes time to write the check, they don’t do it. So, how do you get people to say yes and then follow through? Visualize yourself on the left side of a riverbank and you have to cross the river and on the other side of the river is where the funding happens.

So, first, you make up your idea and then you make it real and then you make it reoccur. Once you start dipping your toe into the water to get to funding, that’s where I can help. I get you across that river faster than you would on your own with a lot less frustration than you will get when you hear a bunch of no’s and you don’t know why. So, if you want some help getting funded faster with less frustration, go to my free funding webinar, sellingsecretsforfunding.com/webinar and sign up and get in-depth information on how you can get funded fast. Thanks.

TSP079 | David Dotlich – Transcription
TSP081 | Vince Thompson – Transcription

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