Hard Way MBA

Hard Way MBA Question of the Day Episode #7 by Jason Thomas

Hard Way MBA Question of the Day Episode #6 by Jason Thomas

Hard Way MBA Question of the Day Episode #5 by Jason Thomas

Who are your mentors...

http://wp.me/p6QsdB-6z

Bryan's Background:

- Graduated from Univ of Ill.

- Arthur Anderson in 1992: 6 yrs and volunteered to do everything he could. Never shyed away from a tough assignment.

- Went back to get MBA along with CPA.

- LMI Aerospace Corp Controller through IPO: Did a lot of improvements and got into operational director

- Astaris: Took through a sale process.

- Waylon Securities CFO: Private, family owned business, $40M and grew to $120M while he was there.

- Then CFO / COO for Life Uniform: Private Equity owned business. Largest retailer of medical uniforms. 5 years. 10 acquisitions. Sales process through strategic offering in mid-2013. Was CEO when it was sold.

Terms:

* Help us understand and demystify what M&A is.

* What is due diligence? Is performed in an acquisition / sales. Done to ensure what you're buying is what you expect it to be. It's valuation, testing earning. Kicking the tires to ensure you get what you think you'll get. Companies are often sold by investment banker/ business boeker. Company is stating certain facts to support their valuation. Transactions are similar to large personal transactions: cars, homes, etc.

* When is it a merger v. acquisition?

* Certified Mergers & Acquisitions: really means acquisitions and sales divestitures.

* Transaction Advisory:

As a business owner or leader, what should you be looking from both sides of a deal?

* In Preparation for a sale: Just reading an article about how many businesses have owners who are 55+ years old. Don't have succession planning, etc. There are many businesses getting ready for sale inthe next 10 years.

* Know what it's worth. Have a business valuation that will identify current value as well as value drivers and value eroder to create strategies to maximize value.

* Consider tax situation and corporate structure.

* Quality financial info: having holes and problems in the information will hurt the valuation.

* Marketing of the business.

* Good transaction attorney. There are differences between the personal attorney and a specialist.

* Buyer: Many of the above count the same for buyers

* Valuation by an independent professional firm will support your negotiations.

* Signed letter of intent to do real due diligence.

* Quality of earnings report to confirm what sellers are telling you about future earning potential.

* Need to consider post-closing transition.

* Two kinds of buys:

* Strategic buys who will have synergies, overlap and redundant positions.

* Private Equity: May shake up upper management but rank and file middle managers and sales reps are left alone and given time to prove themselves.

How much thought is really given to the work of post-transaction integration beforehand?

* Key employees locked up

* Transition plan for owner, especially, if they are the brand.

* Vendor agreements

* Cultural challenges

* Are there synergistic opportunities?

From the perspective of a mid-level manager what should we be trying to do if we know we’re on either side of a deal?

* Try to get involved. You may not be on the deal team but there's a lot of work to do. Many people don't want to do it.

* Be positives and step up. See the opportunities and long-term payoffs.

* Never be shy about volunteering.

* Has seen it on the sell side too. Some will put their resume together and gossip. Others will dive into the issue, roll up their sleeves and help. Put best foot forward for buy team. Strategic buyers will look for the best and brightest to keep.

* Don't ever take a victim mentality.

Your favorite business book?

* Good To Great: Jim Collins.

Reach Bryan: [email protected]

314-983-1390

Hard Way MBA Question of the Day Episode #1 by Jason Thomas

Background on Steli

* Originally from Greece and grew up in Germany

* Dropped out of school at 17

* Launched first few business then.

* Bought a 1 way ticket to Silicon Valley

* First business was a soul crushing failure.

Launching Close.io

* Close.io started as an outsourced sales function. They started developing internal software to empower their sales people.

* January 2013 they launched the software on its own. Within one year it was larger than the other business.

Transition from the services business to the product business. What did you do to 'retool'?

* Reality is fairly messy

* Never intended to launch software business

* Had no vision of the software, simply, what do we need? Took a year to determine that they had a perspective.

* Going through difficulties on service business. Tough to manage from cash flow perspective. Staffing, seasonality,

* Were not sufficiently capitalized to manage through the down turns of seasonality.

* Product took off and grew quickly, with little resources.

* Within a few weeks they made tough choices and let go of half of our team.

* Blog post, I fired half my team.

* Spent a lot of time with people on the team making sure they were okay.

* Spent time with those they had to let go. They are all current customers.

What prompts you to be so open and candid about the struggles involved with the startup world?

* On a person to person basis was always transparent.

* Very self-reflective guy, has always looked inside to see what he fears, the bias, all of the negatives.

* After shutting down his first business he realized that he'd tried to pretend. E.g. Working for 17 hours (but only being productive for 5)

* Steli Efti, TedX, cathartic. Helped him.

* Since that talk has tried to be more and more open publicly.

* Tends to teach and talk about things that are on his mind.

* Because there's a lot of self-study and self-mastery he's just sharing what's on his mind.

* Personal philosophy: teach everything I know.

* Is profoundly impacted by helping other entrepreneurs get through their difficulties.

Why the trend to openness about their vulnerable points?

* The reason we want to hear them is we're authentic human stories.

* Today, it's getting safer for people who have made it through the roughest patch and are in a good place.

* As people see there's not a terrible response, they are more comfortable

How do we move this level of openness and sharing into the larger corporate culture?

* Not worked in a large organization himself so it's difficult to say

* There will need to be early adopters, pioneers, leaders, etc. will need to lead the way.

* A few will be inspired enough to translate that, take some risks and share some risky thoughts.

* If, perhaps, that goes viral it can catch on.

* Believes that the time of massive organizations will start to die out over the next 10-15 years.

* Large organization will break up into decentralized organizations.

* That will make more of these corporate jobs, more nimble, more agile and adaptive.

* There's always some risk involved in doing real work.

What piece of advice would you give to our listeners that will help them get better today?

* If you're really about being better every day, look at what you're afraid of. Ask yourself, what are you afraid of?

* It's probably your next big step. It's a road sign. Now, write it down and go confront it. How can you force yourself to take that step now, not tomorrow, now?

Hear & Contact Steli

* Podcast: StartupChat

* Sales and more tactical stuff: http://blog.close.io

* Best way to reach Steli: [email protected]

* Twitter: http://twitter.com/steli

Mark Richman shares his founder story with us on Hard Way MBA.

Scott Pope is a marketing executive with 10+ years of lead generation, graphic design, and business development in a variety of vertical markets including health care, financial services, retail, and manufacturing industries. I have personally seen Scott's commitment and hustle on display in the field.

Right now, you are a VP of Marketing. I have seen you work on the supplier side, as one of the hardest hustling sales reps I've ever met and on the client side as a extraordinary operator. Taking all of that experience into account... What kind of it of advice do you have for us who are in sales in the marketing space? Which of the tactics you used as a sales rep to open relationships and generate new business do you still like? How has your perspective on those changed since moving to the client side?

Buyers working in the enterprise space are hard to find and don't have time. Know your stuff, have an opinion and hit hard.

Likes a lot of the demo stuff in the marketing world. Make it very experiential with the client's data, etc.

If I heard your VM but didn't call you back, I probably forgot. Don't over think this stuff. Call back. We're not thinking about you.

There's so much going on in the marketing world today, so many changes, so much to keep track and make sense of. As a marketing leader in a mid-size organization obviously have to prioritize, help us understand how you go about that privatization...

Ideas are a dime a dozen but implementation costs money.

Everyday is learning and testing new ideas.

Learn heavily from people that have more experience than you. Have mentors. Learn from them.

Test it. Test it again.

Build an audience.

What trends you see being most impactful over the next 12 to 18 months?

Amazon is huge right now. Buyers (the audience) are there.

Facebook for targeted ads - mine and look for specific targets. There's not as much competition as you might think and the targeting is very discrete.

Lead capture around buying right now. This is an instant gratification time so you need to get people buying now and more to the second sale immediately.

One of the big gaps I see in marketing (and business in general) today is between strategy and execution. I see a lot of people talking about strategy, talking about having a plan. I see some people executing around a plan but I see a most just posting to Facebook and shooting out tweets, without necessarily being able to point back to the strategy. Is that something you see in your experience as well? What what do you do in your organization to bridge that gap?

Need to understand what you are, what you want to be as a company / salesperson.

Execution needs to go through the filter of 'Does this fit what we do? Does it get us closer to what we want to do?'

This podcast is all about learning from the hustlers of the world. What piece of business advice would you give to the up and comers, the driven professionals? Something they can put to work today.

Be realistic. Know what you do and who you do it for. Don't let grand ideas or ideas that don't work out slow you down. Sometimes you just have to grind it.

Reach out to Scott to let him know what you're taking a way from this podcast and putting to practice.

Contact: [email protected]

Let's level set; Art of value - When you say value, what do you mean? I'm sure it's not 'the cheapest in town'.

- The value a customer will receive or achieve as a result of doing business with you. Must focus on the end result.

What prompted you to take such a large departure from the standard time and materials business model?

- Not every customer is open to having a great conversation...

- What's most important is outcome. Everything I do should be focused on that outcome and is significant. We should be moving the needle.

- Bad customers drive out good customers... Courage to drive them out early...

How do you introduce the concept of value pricing to the client?

- Guide the conversation with great questions.

- Not every customer is open to having great conversations.

- What's most important is the outcome you're seeking. I'm really interested in doing work that moves the needle - 10% or more.

- Not every customer is a great fit / good customer. If you load yourself up with bad customers, you'll drive out the good ones.

In your transition to a Value Based business model, did you think about turning back, going more traditional? Tell us about the circumstances that pushed you to the breaking point?

- Early in your business or if you are in a slow time you're going to feel major pressure to 'cave'. This is not a pressure that ends, it will be revisited many times over the year.

- Have a process for transitioning over 6-12 months.

How does the concept of value play out through the customer life cycle - marketing, sales, service, retention.

- Interviewed Joanie Newkirk, Author of Brilliant Price Hike, about Disney raising prices in the 2000's. Listen here.

- Consolidated all pricing into one department.

- Abundance mindset rather than zero sum game of the scarcity mindset.

I've talked to you mostly about value in the context of selling based on value. I'm currently selling to large organizations, as do many of our listeners. I don't have total control over my business model, like an entrepreneur running my own company. How do you see these concepts playing out in this environment?

- Business model is based on a philosophy of how the world works. Charging for your time is based on Marxist Theory, Labor Theory of a Value, Sum of everything ti took to build it.

- Versus Subjective Theory of Value. where value is in the eyes of the customer.

- Hourly billing requires a calculator. Value billing requires courage

Find more about Kirk Bowman:

www.artofvalue.com

@artofvalue

Listen to a few great shows:

The History of the Billable Hour

The Law of Value