SaaS Breakthrough – Featuring Jim Coleman

demio saas breakthrough featuring jim coleman About Jim Coleman:
Jim Coleman is the Co-Founder of xFusion, which provides technical customer support for fast-growing SaaS businesses. xFusion offers a hands-off experience that empowers makers to make & growers to grow.

Prior to xFusion, Jim was a SaaS operations manager at FE International, which operated a private equity fund called LTV SaaS Growth. He oversaw operations and high-level growth initiatives across a portfolio of SaaS holdings.

He has significant buy-side and sell-side experience and has vetted potential SaaS acquisitions, led due diligence, and the post-acquisition handover processes of multiple SaaS assets.

Outside of work, he’s passionate about adoption and raising foster children and his dream is to maximize his impact on developing countries.

 


Show Notes:
03:50
Solving a Big Pain Point For Saas In Customer Support
06:15
Applying Principles Learned In The SaaS Space To The Agency Model
08:25
Working With An SDR Agency While Building An Internal SDR Team
"The challenging part has been that we don't feel like they really understand our business and they don't have the context to be fruitful. Whereas our internal team knows the context a lot more, but what we're finding is that David and I can actually have the most fruitful conversations because we know the business in and out. So yeah, that's, I guess that's the beginning part of the experiment where we're reaching with or experimenting with reaching out via cold email, LinkedIn connections, and then also doing some phone calls up on phone calls. And so far the emails have been the most effective, but surprisingly, what we've seen is that like, non-personalized industry-related email, like for example, we started out by sending cold emails that were pretty information heavy and arguably on the long side, but not personalized. And we sent those out to Shopify app owners and we had amazing resonance with that, and that's that was the kind of the genesis of xFusion. And those were our first clients. So at this stage we're finding that the highly-personalized emails just aren't as effective as we would have hoped that they would be."
11:55
The Vital Role Of Integration Into The Team
13:40
Choosing The Moment To Start Hiring an SDR Team
"I'm a big fan of the founder being involved as much as possible. David and I are the only ones that handle the sales calls. And we handle that in a way that's very interactive and very connective. I like, for example, in a one-hour sales call, I'll speak about, I'll speak to my perspective, customer perspective clients, about their life, their business, et cetera, for 55 minutes of the hour call and maybe five minutes sharing our product. So it's just a very connected experience. And I think there's value in having the founder do that. The challenge, I guess, is because of like the volume of interactions we need to have kind of at the SDR level, it's not as practical. Because most conversations don't lead anywhere in terms of like outbound emails and connection requests on LinkedIn, et cetera, that we thought we could have some help in that area and then we can leverage our time by actually being the ones that were on the calls."
15:20
Agency VS Internal Sales Team: It Comes Down To Results
16:00
Learning The Playbook From An Agency To Use Internally Later
"A big part of the motivation and justification of the cost is that Dave and I don't have the sales background and we wanted the playbook, we wanted the assets and I think that element's been helpful, but we're just not real sure. I guess we're not real confident in the playbook because it's just not been super effective yet. So, but yes, starting out, that was the idea, like, Hey, you know, we'll not only get the, you know, the team resources and the actual, you know, number of outbound context, but also the playbook that we can then use internally if we, if we want to go forward in that way."
17:15
The Importance Of Really Knowing Your Ideal Customer Profile
"Really knowing your prospective client. Well, like your ideal customer profile. Like who are they, what do they think, what decision process are they using to make a buying decision? Like for if I'm speaking directly to a founder, that's very different than speaking to someone that's like in operations that has to then go sell to the founder or the CEO. It's a different conversation. And there's different goals. The person that's an operation wants to look good, right? They want to make good decisions and they want to be wise and they have certainly risk aversion, right. They don't want to recommend a company that ends up not doing well or whatever the case. So that's, it's a very different process to sell to them. So I think really understanding that and then developing the script around that is really fruitful because then you're talking their language. "
18:20
Experimenting With Different Channels And Doubling Down On What Works
21:35
The Value In Studying The Prospects Of A Business That's Being Sold
"When we get into the weeds of our business, it's so hard to see the forest for the trees. So if anybody's looking to acquire a business, there's a very unique opportunity to study it at a high-level. And I always recommend that people digest what they're learning and document real carefully, the sort of next step actions that they would take if they acquire the business. I think another really important thing is to, is to consider what you would bring to the business. What is the business need? If it's you know, if there's a solo founder, that's quite technical, but isn't an operator or a marketer and you have those skills, that's fantastic. If you don't see that you're going to bring value to the business, if they've already got that area buttoned up, I'm not saying I wouldn't purchase it, but I would definitely hesitate because they're just not going to as many wins."
24:30
Changing The Measuring Stick From Production To Production Capability
"What is the highest and best use of my time? What is the greatest contribution? You know, like if I come into work one day and have a really effective sales call and have a really great connection with somebody, and I do nothing else that day, is that not a win, right? Like see it, and that rarely happens. Right. Like I rarely just do nothing else, but my point is like changing the measuring stick from being like, you know, production, production, production to shifting more towards like production capability and just recognizing like, Hey, we're running a marathon here. We don't need to overstretch ourselves day-by-day. We need to look at the big picture as much as possible. And just to your point, be like, just taking time to think, like, I'll go sit on the couch in my office sometimes. And just kinda quietly, like almost meditate, justpause and think instead of just do, do do."
26:35
What A Seller Can Do To Make Their Business More Attractive
29:50
Seller Mistakes: Code That Is Not Clean And Well-Documented
31:55
Opportunities And Challenges After The Pandemic Ends
34:10
Lightning Questions Collapse
Transcript:

DA (03:19):
Hey Jim, thanks so much for joining me today on the SaaS breakthrough podcast. Excited to have you and xFusion here. How are you doing today?

JC (03:27):
I'm good David. Thanks for having me. How are you?

DA (03:29):
I'm doing great. I'm doing great. A rainy day here in Tampa. I heard you guys got some snow recently in OKC.

JC (03:36):
We did. It was like a major event here. It's funny because I lived in Colorado for a dozen years and we're actually headed back there soon. But when it snows in Oklahoma, man, everybody freaks out schools are canceled and everybody just loses it over one inch of snow. It's kind of funny and kind of frustrating as well.

DA (03:51):
Yeah. I definitely remember those days in Arizona in Tucson if it snowed, it was like a national holiday or something like that. Everybody just canceled doing everything. But it's a, it's a good time. I hope you guys have a wonderful holiday season out there, but what I want to do today is jump in a little bit about around xFusion. Talk about some of the experiments and growth initiatives that you guys are doing there. Also dig into a little bit about your experience at FE International. Talk about SaaS opportunities and the different acquisition items that you saw there while working with them. But before we jump into that, why don't you explain a bit about what you're doing at xFusion when you founded it, who the customers are and what you're trying to do uniquely in the marketplace?

JC (04:30):
Yeah. You know, we're having a blast. We've been at the stage of just experimenting with different methods of customer acquisition and really fine tuning operations and setting up processes and systems and we're having a great time. My my co-founder David is a former senior developer at Uber. My background is in SaaS operations, customer service, customer success. And also as you mentioned at FE, I went through the process of vetting SaaS acquisitions, and kind of setting up processes to run those and then actually operating those businesses. So basically the Genesis of xFusion is that David acquired a business through FE and I worked with him kind of on the side is like a consultancy type thing and helped him grow out his internal support team. David owns a SaaS called ShopStorm.

JC (05:16):
I own a SaaS called GrooveJar. And we basically went through the process of building out our internal teams. When we started working with a competitor of xFusion that offer kind of per response-based support coverage. And we just found that we were always needing to kind of police them and make sure that they were jumping on our inbox as one agent may be working across five different client accounts. So long story short, we built out a team internally mid early, mid 2019. Really were pleased with the way that was going and were like, gosh, we think this would be a valuable service to other SaaS owners. So we launched it officially this spring, late spring, actually left FE in, I guess it was the end of May and David and I launched completely full-time xFusion. We've been growing ever since. So we're at somewhere range, I think we're at 20, 21 employees now full-time. We just have to encourage (inaudible) growth. Yeah, thank you. Thank you. It's been a journey and I know we'll probably get into that some today, but it's been a hoot and I'm just really grateful to work with David and work with the team that we have.

DA (06:15):
That's fantastic. And I definitely know that there is a big pain point for SaaS companies in the support side of things, providing that technical customer support, being able to do it in a efficient and timely manner, the hiring process, the training process, building out the different SOPs, all that kind of stuff. A lot of us go through that in the early days. Now, what have you guys had to do to find product-market fit? And for this it's like an agency fit almost, or find that ideal customer, obviously coming in with a prebuilt support team, you're looking for someone in particular, someone who has a unique problem, but is there an industry you're going after? Is it just SaaS? You know, what's the size of company. How have you guys had to figure that out along the way?

JC (06:58):
Yeah, it's been fun because I feel like we're really taking the principles that we learned in the SaaS space and applying them to the agency model. You know, most agencies, they have kind of one-off clients and they may be large clients and maybe dev clients or, you know, do something that's rather high-ticket, but our clients pay monthly. So it's very much a recurring model, which we enjoy. Our focus at this stage, or to this point has been really reaching out to SaaS founders. And the idea is that we want to give them back the ability to work in the highest and best use of their time. So what we've seen is there's a lot of solo founders or small teams that the founder is very much involved in support and he or she is, is really a technical person at heart in it.

JC (07:39):
And working in support takes them away from, I guess, working on the business versus in the business. That's the idea, right? Is that we're able to free them up by taking leadership over their inbox and setting up SLPs, writing internal and external help docs. You know, growing the team there. That we ask that the founders provide initial training, obviously. And then we take over training from that point for future support people. So that's been the focus at this point. W.e're kind of swimming upstream a bit and working with larger and larger companies right now, our current minimum is we asked it that you have one full-time agent, but the average now is more like three or four as we kind of swim upstream. So, but you know, SaaS is near and dear to our heart. That's what we know. And that's our focus. We do work with business owners outside of the SaaS realm, but like 90 some percent of our current clients are in the SaaS space.

DA (08:26):
That makes a lot of sense. And as you've kind of grown out and started to meet more and more SaaS companies, that's what I'm interested in today, the growth and marketing initiatives that you've used to start this kind of flywheel into the SaaS industry. Now, I know you've been running a ton of different experiments, obviously kind of growing since May, since you said you probably done a lot of different things. One of them that I'd love to dig into a topic that we don't talk about a ton here is around SDRs and having to build out an internal SDR team. But you've done this while also working with an SDR agency. I would love to learn more about this process. You know, why you're developing it this way and kind of your thoughts on it.

JC (09:05):
Yeah, it's been, it's been fun like in a number of the SaaS businesses that I ran previously and even with David and I current businesses, GrooveJar and ShopStorm, the LTV is not high enough to allow us to afford a sales team. We've been quite limited. And that's a true story for a lot of businesses. I did work on one in my time at FE that the average client was paying as a SaaS business in the email marketing space, the average client was paying between $500 and $2,000 a month. So we could really afford to do some experiments in sales, which was nice, but certainly fairly uncommon for SaaS. So that's one thing I've enjoyed about xFusion is that because our clients pay, you know, we charge 29.50 per month per full-time agent, and like I said, we have an average of two or three agents per account.

JC (09:46):
So we have the margin of flexibility to allow us to reach people via different sales methods than, you know, we could otherwise afford. And one of those is working with SDRs. So David and I like we're, we're bootstrapped, but we did have a little bit of money to experiment with. And we thought, you know, let's try to work with an outsourced SDR firm at the same time, we're building out our own internal team. Small team, like we have three internally on, on that side of things. And it's, it's been, it's been an interesting learning experience for us. We're, we're unfortunately very underwhelmed with the progress we've made with the agency. So much so that, that, you know, they're actually going to extend our contract without costs because we've been disappointed in the outputs that we've seen from them.

JC (10:31):
We're not measuring their efficacy based on results. But more so like on inputs. So it's been difficult. I think the challenging part has been that we don't feel like they really understand our business and they don't have the context to be fruitful. Whereas our internal team knows the context a lot more, but what we're finding is that David and I can actually have the most fruitful conversations because we know the business in and out. So yeah, that's, I guess that's the beginning part of the experiment where we're reaching with or experimenting with reaching out via cold email, LinkedIn connections, and then also doing some phone calls up on phone calls. And so far the emails have been the most effective, but surprisingly, what we've seen is that like, non-personalized industry-related email, like for example, we started out by sending cold emails that were pretty information heavy and arguably on the long side, but not personalized. And we sent those out to Shopify app owners and we had amazing resonance with that, and that's that was the kind of the genesis of xFusion. And those were our first clients. So at this stage we're finding that the highly-personalized emails just aren't as effective as we would have hoped that they would be.

DA (11:38):
It may also be timing. I mean, this year has just seen an explosion I think of like cold email outreach, this personalized type of emails. And I know my inbox has gotten crazier and crazier through the year as more businesses are utilizing that. I do think you said something that was really interesting though. You said, you know, building an internal team or having your internal SDRs, you're always going to have a better like input and understanding. And I think that's to be said across the board when you're working with an agency versus your own team members, and that's kind of the balance there, right? Your internal team will always know things better than just a contractor or someone that's you know, part of an agency. How have you guys in your business been able to solve that, which is a question that I'm thinking of. So through that agency, how have you guys solved that problem?

JC (12:24):
I think that's why we've been frustrated with the SDR organization that we're working for or working with is because David and I don't handle our business the same way. So we very much know our customers. We talk to them regularly, David and I love to just spend time with our clients and talk shop, like, well, outside of just the support realm. So we know them and our team is dedicated full-time on their account. So they are integrated into their team. We basically have two options. One, we can go in and take complete leadership over the inbox. And that would be a case of like a solo founder that just needs help. And they need someone to sort of take over that role. We also integrate with customers like our most recent client is a WordPress hosting platform and they have something like 30 employees and we've jumped right into their team, but we're fully integrated.

JC (13:08):
So our team members are participating in meetings. They're on the company's Slack. They are fully and totally integrated into the team where there's no visible difference in like a staff employee versus versus a member of our team. So it's something that like, because we've been so sensitive to that. And because we've seen some real wins in that area from a, like a cultural and integration perspective, I guess, I think it makes it even more frustrating to deal with this outsourced agency and I guess their lack of integration into our team.

DA (13:36):
That makes sense. So integration into the team kind of being the key thing there. So it makes a ton of sense. Now for you guys at this exact moment to think about building an SDR team, when you both are still, it's still very early stage for the business. Obviously you guys are still doing some of these sales calls yourselves, and it sounds like you're doing a good job with them as you should be. You know, why did you choose this moment as the moment to start hiring a SDR team? Was there, you know, anything historically you've seen inthe past working with SaaS companies that have led you to the idea that like, you know, the faster you build your STR team or at a certain MRR revenue milestone, you should start, you know, starting to build this out?

JC (14:12):
With the price of our product, we can afford to do it. And we think it's wise to experiment. Like it's kind of paradoxical in a sense because I'm of the mindset that it's really important to build a solid foundation, kind of like, you know, it's important to build a solid foundation before you can build a skyscraper on top of it. You wouldn't want to build a skyscraper on shaky ground, you know. I look at it that way, but at the same time, I think there's value in, in conducting experiments and just kind of seeing what sticks, but I'm a big fan of the founder being involved as much as possible. David and I are the only ones that handle the sales calls. And we handle that in a way that's very interactive and very connective. I like, for example, in a one-hour sales call, I'll speak about, I'll speak to my perspective, customer perspective clients, about their life, their business, et cetera, for 55 minutes of the hour call and maybe five minutes sharing our product. So it's just a very connected experience. And I think there's value in having the founder do that. The challenge, I guess, is because of like the volume of interactions we need to have kind of at the SDR level, it's not as practical. Because most conversations don't lead anywhere in terms of like outbound emails and connection requests on LinkedIn, et cetera, that we thought we could have some help in that area and then we can leverage our time by actually being the ones that were on the calls.

DA (15:22):
Now, why did you guys choose to do agency and internal build that? Was that just something that was kind of happening already? Or did you guys want to run the experiment to see, is there going to be, one better solution than the other?

JC (15:33):
Yeah, exactly. I mean, I so badly want the agency model to work and maybe it will, it's still, they're extending, and I think that they're going to make some improvements and it's still early enough to sort of save that. But yeah, we just, we just want to see what works like the advantage of the agency model is it's, it's much more hands-off for us and if they can deliver results and ultimately if they can get calls on our calendar, it's totally worth it because it's certainly a lot more effort for us in time to work with our internal sales team versus just, you know, outsourcing that responsibility. But it really just comes down to results.

DA (16:04):
That makes sense. I didn't know if there was like some type of like learning process that you were trying to get out of it or like, cause again an agency is typically someone who's heavily focused and experienced in some type of mechanism. Are you like trying to gain any insight into how they're doing things and move from there?

JC (16:20):
Yes. I'm glad you, I'm glad you brought that up because yeah, that was a key motivator. We spent $15,000 with this particular agency on a three-month agreement. So a minimum $15,000, and then we can decide to extend or not extend at the end of that. But yes, that was a big part of the motivation and justification of the cost is that Dave and I don't have the sales background and we wanted the playbook, we wanted the assets and I think that element's been helpful, but we're just not real sure. I guess we're not real confident in the playbook because it's just not been super effective yet. So, but yes, starting out, that was the idea, like, Hey, you know, we'll not only get the, you know, the team resources and the actual, you know, number of outbound context, but also the playbook that we can then use internally if we, if we want to go forward in that way.

DA (17:04):
Yeah. That makes a ton of sense. And I think that's a, it's a really good little insight to just say because you can learn just by spending some money like that, right. Learn the playbook, obviously in this situation, maybe this experiment didn't work out perfect, but you'd probably did gained some insight here along the way. And when you've looked at other companies from like an operations point of view, you've gone into other SaaS companies, like you mentioned before, have you seen other SaaS companies making mistakes while implementing an SDR process? Anything that you guys have learned from that you've taken into this business?

JC (17:34):
Yeah. I think one of the things that comes to my mind is, is really knowing your prospective client. Well, like your ideal customer profile. Like who are they, what do they think, what decision process are they using to make a buying decision? Like for if I'm speaking directly to a founder, that's very different than speaking to someone that's like in operations that has to then go sell to the founder or the CEO. It's a different conversation. And there's different goals. The person that's an operation wants to look good, right? They want to make good decisions and they want to be wise and they have certainly risk aversion, right. They don't want to recommend a company that ends up not doing well or whatever the case. So that's, it's a very different process to sell to them. So I think really understanding that and then developing the script around that is really fruitful because then you're talking their language.

DA (18:20):
Yeah. That makes a lot of sense. That's good advice. Another experiment you've been running in the early days here is another opportunity for you to get some education in the company to figure this out. You mentioned, you know, kind of figuring out the sales side of things, as well as working with, you know, a sales consulting and training, doing it yourself, kind of growing your own skill sets there versus doing another agency hire like a done for you agency for sales, where maybe those SDRs are pushing to a DFY agency. Why this experiment? What are you trying to gain from this one?

JC (18:52):
I think just as much knowledge as possible in the early days, there are experiments that we've done that I really regret. Like we spent six grand on Facebook ads that were just completely unfruitful, but you know what, it's like so on the, on the micro level, like I'm frustrated by that. And that's a bummer and it's disappointing. I don't like to throw away $6,000, but at the same time, we're really learning what sticks. So it's the same thing with the sales process, right? Like, so we hired a consultancy slash like training program. And we learned a lot from that just to educate ourselves in a short amount of time. Like arguably we could have found all of that material and piecemeal that together online. But this is an accelerated way to handle that. And then also the information gained from the agency as far as, like I mentioned earlier, the playbook, et cetera.

JC (19:35):
And I mean, the big picture idea David is like, we're just wanting to figure out what works for our business and then double down on that. And the fastest we can get to that point, the better. I remember I was at a conference. I don't, you may have been there, it was an LTV conference in Manhattan in the spring of 2019. It was a great conference and David Hauser was one of the key key presenters. And he's the guy that the founder of Grasshopper and sold it for, Oh my goodness what was like $160 million? Back in 2015 I think a very large amount of money. And he was talking about the growth process for them. And he said, you know what, what I'm looking for, what I, what I try to achieve when we finally got, there is I want to put a dollar into the slot machine and get $2 out and just do that all day long.

JC (20:16):
But one of the things that I thought was impactful about that, and that my key takeaway was that he said, you know, what worked for us in, at Grasshopper back in the early 2000 tens is not necessarily what would work now, because things change so rapidly. So it's not just a matter of like copy paste this model, but use the opportunity. You have to experiment with multiple different channels and see what works for your business. And then double down on that. So our feeling is like the quicker we can get to that place and though, it's painful to spend money on things that don't work the quicker we can get to that place the better, because then we can double down and just put more and more money into that machine.

DA (20:51):
I think the key kind of takeaway and something that we learned early on too here is that you can actually pay for the experience to level up like stepping stones forward, figure out these different experiments by hiring an agency, learning from their playbook, hiring a sales consultant or a trainer, right? Like someone who has a ton of expertise in a specific vertical can teach you things and move you forward so fast. Yes. You could try to learn all these things on your own. You can try to find all this information out there and just do it yourself to quote unquote, save money. But what you're also doing is losing time there. And to your point, you got to go through a lot of different experiments to see what will work for your business and something will work. You just have to figure out what it is. So it's a fantastic answer and a fantastic way to think about it. Now I do want to switch over to talk a little bit about your experience at FE international. Some of the things and lessons you've learned prior to xFusion, I know you were doing operations and the high-level growth initiatives with some of these SaaS companies, some of the SaaS holdings, what insights, you know, can we talk about, or things that you learned during that time?

JC (21:58):
Gosh, there's so much, that was an amazing experience working with Thomas and the FE international team. So it's kind of a funny story. So long story short, they bought my SaaS business at the time. They then hired me to work contracted on that business. They then hired me to operate or to run customer success for one of their SaaS products that they had at the time. And then I ran operations. And then I got into the the process of early stage vetting negotiations, due diligence handover, and then, and then actually operating and growing the companies that we acquired. So FE runs a portfolio of SaaS businesses. That's always growing in size and they're continually acquiring new businesses. So that's what we do. And there's so many, so many lessons I learned from that. One of the key lessons that I learned is like, there's such value in studying the prospects of a business that's being sold.

JC (22:48):
And there's a unique opportunity to look at the business from a 30,000 foot perspective. It's amazing. Like I would have conversations with SaaS founders that were just incredible people, very, very brilliant at what they do, but they wouldn't see sometimes the most obvious things. And I think that's because when we get into the weeds of our business, it's so hard to see the forest for the trees. So if anybody's looking to acquire a business, there's a very unique opportunity to study it at a high-level. And I always recommend that people digest what they're learning and document real carefully, the sort of next step actions that they would take if they acquire the business. I think another really important thing is to, is to consider what you would bring to the business. What is the business need? If it's you know, if there's a solo founder, that's quite technical, but isn't an operator or a marketer and you have those skills, that's fantastic. If you don't see that you're going to bring value to the business, if they've already got that area buttoned up, I'm not saying I wouldn't purchase it, but I would definitely hesitate because they're just not going to as many wins. And David I'm happy to talk about like the, I guess the prep process if maybe one of your listeners is looking to sell a business, if you want to do that now.

DA (23:54):
Interesting. Yeah. I would love to hear that. I just want to add to that the forest from the trees analogy is perfect for what you're talking about right there. And I think speaking for myself, I know that when you're in the business every day and you start putting out fires on a daily basis, and you start looking at the micro things that you have to do to get the macro things done, it really changes your perspective on the business. And it's sometimes very hard to take that 30,000 point view, like look at the business. And sometimes what helps is just taking some time away, like, you know, taking a couple of weeks off, getting that vacation to really just reset your thinking. So you're not just focusing on all that micro part of your business.

JC (24:33):
Yeah. I love that. One of the things that's also been really effective for us is having what my good friend Sean Hyatt, and Shaun's the COO of the fund that I left. And we knew each other well before that, but he loves to use the term outside eyes. So, you know, he and I routinely talk and David and I, my co-founder, we routinely talk to other founders and we have kind of round tables and we share what's going on in our business. What are the challenges. And it's so valuable to get insight from, from other people. And also just the idea of like, and maybe this is changing, but there's been like this badge of honor in the entrepreneurial community, like, Oh, I work 60 hours a week and I'm just so busy. And I like, I do everything I can to fight against that.

JC (25:10):
Like, my goal is to get to the place of working 10 hours a week on the business. Not so I can just go sit around, but so I can work on other initiatives as well. I'd love to get into the nonprofit space. There's other things I want to do in my life. And I'm starting to, I should say, see the value in, like, what is the highest and best use of my time? What is the greatest contribution? You know, like if I come into work one day and have a really effective sales call and have a really great connection with somebody, and I do nothing else that day, is that not a win, right? Like see it, and that rarely happens. Right. Like I rarely just do nothing else, but my point is like changing the measuring stick from being like, you know, production, production, production to shifting more towards like production capability and just recognizing like, Hey, we're running a marathon here. We don't need to overstretch ourselves day-by-day. We need to look at the big picture as much as possible. And just to your point, be like, just taking time to think, like, I'll go sit on the couch in my office sometimes. And just kinda quietly, like almost meditate, justpause and think instead of just do, do do,

DA (26:07):
And I hope everyone that's listening takes the time to rewind this segment and listen to it again, Jim, that was so well said. And, you're basically saying a lot of the belief systems that we have here at Demio too. It's really the philosophy that we have. It's about impact over bottom seat mentality. There is like this busyness for busyness sake kind of mindset, and there's always more to do, but it's really measured by impact and sometimes doing more, doesn't always equal moving the needle further. Right. So I love that again, really well said. I don't have to say anything else for it, but I do want to circle back. You did mention, you want to talk a little bit about like a buyer perspective and kind of looking at a business that way.

JC (26:46):
Well, specifically I'm thinking of, I guess, a seller perspective, what a seller can do to make their business the most attractive to a buyer. And in the SaaS space we're seeing more and more is passive or semi-passive buyers that have money that want to acquire SaaS assets. They see the value in that, but they don't really want to operate them, or they don't want to be as involved in operations. So we've seen sellers be really, really effective when they start to button up their business. I'm a fan of doing this from the beginning, and this is an opinion, and I know some people don't share this opinion, but I remember that I used to way back in the day I was in law enforcement and I was a detective, but I was going through the police Academy and we were doing driving pursuit training.

JC (27:27):
And the instructor always said smooth is fast and fast is smooth, and I've taken this weirdly, I've applied that to business. And I think I want to go fast, but not so fast that I can't be smooth. And what I mean is that, you know, I want to button up processes and create systems as I go. In other words, if like, for example, our hiring process, I can blaze through that and go a hundred miles an hour, or I can take just a moment and document the steps of that process. So it can be executed by another person. So that concurrently creates value for the business. And like in terms of like sales value, valuation, and also value in terms of operation. And what I mean is like, you get to the place where you want to sell your business, if you have all of those things buttoned up, it makes your business so much more attractive to the buyer.

JC (28:11):
And it's kind of like when you go look at a house that you're going to buy, if there's, you know, little bits of damage throughout the house, if there's just, things are kinda messy and not really put together, like the yards of mass, like you get an idea of like, I'm a little bit nervous about the bones of this house, about the structural integrity of this house. Because if they're not on top of the small things, then they're probably not on top of the big things. And that's the idea with business as well as like, if you dot your I's and cross your T's a buyer's going to discern that very, very quickly. And they're going to see that, that you're just on your game and there's systems and processes. It also makes it more attractive to them because when they come into to run the business, the business is effectively a fine tuned machine and already running itself, you know, there's systems in place that people are following. And then it's a matter of like having the right people in the right seat. So getting the owner's time down to a minimal amount is so important, where they're just overseeing 10 hours a week maybe, they're not day-to-day in the business. I think getting to that place before listing the business or selling it on the private market is just so critical.

DA (29:09):
Is that having, you know, basic directors or C-levels in, or is it just having like enough systems and managers in that it just runs itself?

JC (29:17):
It just depends on the size. Of course. Yeah. I mean, it's got to make sense, like the business has to be able to afford to do that. And there's exceptions. Like I understand that. Like there's, there's exceptions where there's a solo founder. I mean, like we acquired SaaS, SaaS assets in the Shopify space that were worth a million or 1,000,005 with one founder and like a VA. I mean, it's crazy. Like I just, that happens. But as the business grows and you get in the higher evaluation amounts may be three to 5 million. Yeah. The more, the more people you have in the right seats and the less the owner is doing the better, the more attractive it's going to be to a prospective buyer.

DA (29:52):
Any other major lessons that people should be thinking about if they're looking to sell or any other areas where they need to button up?

JC (30:00):
Well, I guess to go into more detail, you know, documentation of processes, one of the things that we've seen over and over is that the code is just not clean and well-documented, and I'm not technical. David, my co-founder is, but just from a, from a non-technical perspective, we've seen time and time again, that the code is not well-documented and commented. It's just not real clean. And that's kind of like, I don't know. I go back to the equivalent of like selling your house. Like, that's, that's a foundational element. And then, you know, if there's, if there's cracks in the foundation and it's sloping, like that's a real red flag, it's not that it's not overcomeable, but I recommend that founders spend a bit of time documenting their code, sort of writing a guide out for their code comments, et cetera. That just makes it so much more attractive to the buyer.

DA (30:41):
I love that. It's things that you have to like, they're mindset things at the same time. And it's things that we've been doing for a while, but it's like, sometimes it sucks to be like, okay, we need to spend some extra time documenting or building systems. It feels like you're losing time to do it. But to your point, you're accelerating things in the future. So it's like a little bit of time now for acceleration in the future. And you just got to do it.

JC (31:04):
I think a good litmus test David is to ask yourself, like, am I hiding anything? Is there, is there anything, and I don't mean from like a nefarious perspective, but I mean, there's like, if you're thinking of yourself as a seller, like, gosh, if the buyer sees this thing, I'm screwed, I fix that thing. Right? Like, so you can be completely and totally transparent, not perfect. Like everybody knows that that like, no business is perfect. No, no founder has time to dot every I and cross every T. But, but if you take care of the big things and then you can just be honest with the small things like, Hey, you know, this is the one area I've not documented or whatever, but this is what I'm willing to do. You know, I'm willing to have sort of deal that would require me to stay on board for 90 days. You know, I will take care of this and we can do a, some sort of hold out with funds to make sure that's done. I think that goes a long way with buyers. And just that level of transparency.

DA (31:46):
Definitely. I think transparency is a big thing. Like it's a great value to have in your business because it forces you to find those holes early and be transparent with those problems and then just address them early on whether or not you're selling or not.

JC (31:57):
Totally.

DA (31:58):
But fantastic with xFusion looking forward here into 2021 with, you know, kind of a changing B2B landscape and SaaS. Are there any new challenges or opportunities that you're excited for? Any things that you see on the horizon here?

JC (32:11):
Yeah. Constantly, man. I can't wait to see what plays out sort of post-COVID. I know that we've got the vaccine coming aboard. I know that's going to take some time, but one of the things have been really rich for us really beneficial is that there's been like one of the positive things about this horrible situation with COVID is that more and more companies are willing to entertain the idea of being remote, sometimes by force and sometimes they've just decided to do that including, including owners that previously thought that wasn't viable. So because they've done that, they've then considered like, Hey, you know, could, could we consider outsourcing as well? And our big thing is like, we don't, we're not competing against other outsourcers. We're competing against the idea that the founder could actually handle support internally. Or success internally. Versus, Hey, like, you know, is it possible to work with an outsource team that would be the same as working with a team internally? So that's really where we're going. So I'm curious to see, like, I feel like there's probably going to be some bounce-back. We're a fully remote team. And I think if I had my, my way, we would like split an office with another, another team or two. So we would have it like, you know, two days a week or something like that. I miss that in person environment. And I'm just curious to see what's going to happen, I guess, as things settled with COVID.

DA (33:23):
There's definitely some major questions as far as like workflow and just like, I guess, company happiness with staying remote. We've been remote for five years now and we really have to work hard for our culture and it hasn't been an issue, but you know, we want to do retreats and stuff like that, which you kind of lose during this time. Now for your business,I think one of the interesting things is, you know, a lot of companies have looked to cut costs and now as they're remote, they're really looking to operationally stay lean moving forward, seeing what can happen when you really overinflate costs. So it'd be interesting as you guys you know, as an agency are able to effectively give the same results or better with maybe less cost than having employees that you're paying taxes on and all that kind of stuff. So you guys could be in a really, really great position as, as the market shifts a little bit.

JC (34:09):
Yeah, I think so.

DA (34:10):
That's awesome. But let's do this. Let's jump over to our lightning round questions. Just five quick questions that I'll ask and you can give your first best thought that comes to mind. You ready to get started?

JC (34:21):
Yeah. Sounds good.

DA (34:22):
All right. Let's do this thing. What advice would you give for early stage SaaS companies starting marketing today?

JC (34:31):
Yeah, I don't know if my first thought is always the best, but my first thought is to know their perspective clients, to just know, like, I think there's so many tactics in marketing and growth, but it comes down to human relationships, right? Like from top of funnel to bottom of funnel, it's all about connecting with people. And I think the more we intimately understand our clients, I think that's what that's, what's given us the boost early days is because Dave and I know SaaS, we know that we know the language, we know that world. And I think it's really helped, you know, but from top of funnel to bottom of funnel. So I think that would be it it's just to know their perspective clients.

DA (35:02):
That's great advice. And it's something that it's easy to say, but it's sometimes it's harder to do to get really into that nitty gritty detail. So it's a great answer. What skill do you think is vital for marketing teams to improve and build on today?

JC (35:15):
Skill. Gosh, I think it goes back to the same answer. I think it's, it's understanding people, it's knowing the perspective client and it's just really working to make sure that every piece of content, every piece of copy or illustration et cetera, matches that. That it really targets the ideal customer profile and really understands them. So I think that the deeper they can go into sort of psychology the better.

DA (35:42):
Yeah. That's the word I was going to use. Psychology. Right. Understanding that. What about a best educational resource you recommend for learning about marketing or growth?

JC (35:50):
Again, I guess keeping the same thing, like a book that I've read or almost completely read lately is Rory Sutherland, Alchemy. And it's again, it's about the, those sort of unexpected things. And he's worked for Ogilvy for many, many years, and it's just a major player there and he's taught me some amazing things on sales and marketing. One of the things on the sales side is, he mentioned like the most effective used car salesman ever was a guy that focused on selling the person their second third car. And in other words, he treated them in such a way that he wanted them to come back. He didn't want to make a quick sale and have a quick win, but what he considered the long term. And I think that's an important approach when it comes to marketing growth in sales and just like understanding, Hey, like these are humans and we're wanting to make a real life connection with them that the goal is not just sell them something. The goal is to provide value for them and to create a relationship that's that's enduring.

DA (36:40):
I love that. I absolutely love that. What about a favorite tool you can't live without?

JC (36:45):
Now I know this is probably like a million people's opinion, but I just, I love Slack. It's just like, you know, having, having a remote workforce and having great culture at a remote workforce is difficult. And I appreciate Slack as a platform because we use it not only for our team, but we also use it for all of our clients. And interestingly, one of our most recent client, that I told you about earlier their WordPress hosting platform, they actually use Slack to communicate with their customers. So they will create Slack channels on a per customer basis. And it's so communal the way that they handle support, it's like everybody is on the team and it's, it's very community oriented. So I'm just, I'm impressed with the flexibility of a tool like Slack.

DA (37:25):
That scares me to think about how many channels they must have in there.

JC (37:28):
Unbelievable. It's unbelievable. But it works.

DA (37:31):
Yeah. I'm sure it does work. I'm sure it does work. I'm having a little anxiety attack, just thinking about that. And we'll see how Slack changes and evolves with Salesforce. That'll be a new frontier with them as well. What about a brand business or a team that you admire today?

JC (37:49):
You know, I'm most impressed with the companies that handle support very well. Like they have a reputation of providing incredible customer support and they have a reputation of having an incredible culture and I love studying them and considering them, I mean, in the SaaS space, you're thinking like Zapier, you know, HubSpot Basecamp, you know, and outside of that thing, Southwest Airlines, think Chick-fil-A like, there's something they do different and they're excellent. Both on the culture side internally. And on the support side externally, there's something holistic that they're doing in their business that I just really, really admire and want to model after

DA (38:25):
I do too. And I think that's something that we've tried to do very, very strongly here is have a wonderful customer success experience. And the thing that we've done for anyone listening is we've really put a major focus on being customer focused. Like what can we do to give great customer experiences? And that is in the brand, the voice, the product, but it's definitely in, you know, your customer support team, investing in that heavily, whether working with someone like xFusion or building out that team yourself, you know, that is something that you have to invest in early because it's so integral to those customer experiences.

JC (38:58):
That's right. Totally.

DA (39:00):
Perfect.Well, Jim, I just want to say thank you so much for jumping on with me today for sharing so much about your past knowledge about what you guys are doing right now. It sounds like xFusion is in a great position and excited for you guys in 2021, but thank you again for your time.

JC (39:13):
Thanks, David. Really been a joy to speak with you.

DA (39:15):
It was great time. Talk to you soon. Have a great day.
(...)

Resources:
Learn More About xFusion:
https://www.xfusion.io/
Connect With Jim:
https://www.linkedin.com/in/jim-coleman/
Follow along on Our Journey to $100k MRR
A shaky start? No doubt. Yet, three years later, we've got our eyes set on $100k MRR. We'll be sharing everything along the way.