Jeremy Weisz 14:13
I want to talk about niche, right, there’s efficiencies you mentioned SaaS, right, you can create more of a Swiss army knife just because it’s really specific to a niche services product or service is a niche. Obviously, I do want to mention, Digible Dudes in Apartment Marketing Podcast, and we’ll come check that out. It’s a niche. So talk about how you came to this niche.
Reid Wicoff 14:42
Yeah, well, I’ll start and David come behind me. But we did work together for Digital First Media. That’s the conglomerate. So think of it in terms of Ganesh and similar to a lot of these large media companies, regardless of media, they have these digital arms and in our case that came under the name of ad taxi. And so I was brought to run digital for ad taxi here in Denver kind of mountain region. And David was one of our enterprise sellers. So that’s how he and I first met each other. And it didn’t take long before he and I had a lot of I’ll say, started having a lot of late nights just talking about bigger ideas and how we might disrupt within the environment, we were in. But through happenstance, really, David got opportunity to manage a couple of campaigns for a very large property management company in North America. And he found quick success with it and started to scale it kind of independently. And that’s what prompted for me like some interest and hey, maybe there’s more opportunity here for us than what sits inside this, this department in this company. And that’s what led us to founding Digible but we went through a very thorough process, it wasn’t that kind of probably making it sound almost whimsical, but where we said, hey, this industry is a little more franchise-based. So it’s not that you get cut off at the heels with one client. So we like that, it’s also about getting critical mass. So, these aren’t huge budgets, but at scale, they become really relevant. We liked the clientele, we saw definitely a path to disrupt. The industry is notoriously, I’ll say behind some of those other mega categories, like automotive or healthcare, etc. And so there’s a bit of a hero pass. And we also had the network, we had the knowledge and give a ton of credit to David for pulling that together in a short amount of time. But that was really the impetus for starting that business.
David Staley 16:46
Yeah, well, the only thing that that organization wasn’t set up for intrapreneurship. Very well. And so that’s what made us have to leave and do it on our own to really take the steps that we wanted to take.
Jeremy Weisz 17:01
When I hear the beginning of your journey, I want to crawl into the corner. Okay, because have you had a rocky start to start in the company because of a lawsuit. Talk about the beginning talk about that.
David Staley 17:21
He did do his research. We normally would bring it up if you didn’t ask. But yeah. So when we were at Digital First Media, we were actually employed by the Denver Post. And the book of business I was running became the largest there by a considerable amount. And so when they learned that Reid and I had had conversations, but only conversations about maybe we should do something because we’re getting stifled they approached us and wanted us to sign a pretty bad or onerous. I’ll take that.
Reid Wicoff 18:02
Jeremy Weisz 18:03
David Staley 18:04
Yeah, right. Yeah, he’s definitely one-sided non-compete. And we’re like, well, we can’t do that. So Reid said, you still want to do this. I said, let’s go. And so we left. And then we incorporated the company, we didn’t even have a name yet. We didn’t have a website, we didn’t have anything. And then as soon as we incorporated the company, they sued us about three days later. So the first six months was just about draining our bank accounts with Attorney fees. But you pick it up from there.
Reid Wicoff 18:30
Yeah, well, we’re about 10 years apart. And I say that, because I think it was terrifying for different reasons for both of us. But for me, personally, having a family of five, three young girls and the mortgage and feeling like I had finally settled in, because I had been in a few different companies. And so it wasn’t an easy conversation to have with my wife, and then to start seeing your name kind of, in the papers and online trades was super difficult. So just emotionally experiencing that was a lot not to mention the economics that David’s bring it up. So we had both agreed before even we had founded that where we’d ever started business, we wouldn’t take venture. And so that was extremely difficult to hold to, you can imagine, not that we would have had much success trying to raise money, given the situation we’re in. So it did feel like we were on an island on a lot of different levels. And that that either makes you cave in and give up or you get scrappy, find the grit, and you persevere. And so it also involves some luck and we had our share of that and always will be grateful for some of the opportunities that seem to come in just at the right moment. We talked about someday we’ll write a book or do a movie called clutch. But yeah, we had some good luck that helped us get through those first six months But yeah, it was definitely emotionally taxing.
Jeremy Weisz 20:03
Why did you not quit? Because looking back, it seems obvious, right? You have 90 staff at the time. Listen, we started three days. Now someone’s suing, it’s hard enough in itself starting a business. Now you’re getting sued is draining the bank out. Emotionally, it’s draining, why did you just like, let’s just forget it. I’m sure you’re getting pressures on both sides with significant others, and just be like, well, what are we doing here?
David Staley 20:33
Yeah, well, a couple of things. One, to set the stage. My now wife is our third co-founder. So we were all in. It’s also the first time I’ve ever been physically ill from stress was going through this point, because I would say that they burned the boats for us. And so we didn’t have a choice. So what I mean is, I think Reid’s dad gave the quote, you never pick a fight with someone that buys ink by the barrel. And we found out about the lawsuit because they tagged us on Facebook and LinkedIn, and named us in like Denver Post sues these people, blah, blah, blah, they stole trade secrets, and so on and so forth. And so that’s how we found out and then we got served papers. And then we were in Digi Day, and Adweek and all these other places. So I didn’t really see that there was an option. I mean, I didn’t feel like I had that same clout that Reid had as far as going to another media organization. And at that point, he probably, that may have also been a challenge anyways, because of they wouldn’t wanted him to take his expertise over there. And for me, I felt like, I didn’t have a great resume, didn’t feel like a great resume to me at that point. So I feel like they burned the boats for us.
Reid Wicoff 21:49
Yeah, I agree with all that, I think I’ll say anger and belief were a big part of what was driving me. I did feel like the way things went, just piss me off. So that was a big part of me not willing to quit. But the reason that we talked about doing something was we did have a lot of confidence, that opportunity was there. And so I wasn’t ready by any stretch, I don’t know how long I would have been able to last if we hadn’t started to find traction, but I wasn’t ready to give up on that. So I also knew at my age that I probably wasn’t going to do this twice. David had had a couple of runs with startups when he was younger. I had one fleeting moment, I’ll say, in my 25 years. So that was, I guess, third element for me is, I can’t put myself through this again. So I got to give it everything I got.
Jeremy Weisz 22:48
Any tips or advice? Because that process, he said, took around six months? I mean, those processes can take a lot longer than that. But any tips and advice for people who will go through it or are for resolving a situation? I know yours is going to be unique, but just getting past it and resolving it?
Reid Wicoff 23:11
Yeah, well, try to talk to the source meaning there was one individual that decided to make that move. And if you can get past what was anger on their side, or this case, his side, I won’t name names, but and just speak more objectively about, what are the concerns? What do you want out of the deal? It’s classic kind of negotiation points. But if you can’t get to that, I don’t know that we would have found any success, it was a bit of a Hail Mary on my side to try and get that conversation started. Because there was so much, I think, anger on both sides. But yeah, if you can sit down and really talk through it, I think there was probably some ideas in their head that weren’t well founded, that helped, just kind of dispelling some of the assumptions, etc. But yeah, I think also outside counsel, we definitely both tapped our networks, just to try and get as much input. I mean, you’re obviously asking us for that now. But that would be part of my advice is you’re not as alone as you might think this story is more common than we realize, certainly not our exact scenario. But a lot of founders get intimidated by former employers or have non-compes. It’s super common. And so it’s not as hard as you might think, to find somebody to talk to that’s been through it and see what advice they can give you.
David Staley 24:47
But I would say, what we learned is that people can truly see you for anything. So we didn’t have that non-compete. We didn’t have a non-solicitation, and yet we still got embroiled in it. And so then to Reid’s point, I think the attorneys kind of gotten away at different parts where he really made movement, once he went talk to the source, I mean, attorneys are still present, but at least he got to talk to the source and it wasn’t then this filtering, that actually was a negative filtering, in our case, and then he’s right, like, there’s tons of people that have gone through this before. So I would definitely reach out and talk to them beyond the attorneys, we ended up, like, even reviewing at least three different groups seriously for our attorneys, and we ended up going with the high-dollar one. And I don’t know if that was like the best choice. But it would have been helpful if I would have reached out to more business owners the time that had been through it to get their advice. I just think, because there are different times that the attorneys would start to tell us like this is a business decision. And there are definitely times you need to make the business decision. And then there are times that you need to, I think stand up for your own beliefs. In this case, we went with the business decision, but I’m just saying it’s good to have perspective from both sides, and not just have your own attorneys telling you their view.
Reid Wicoff 26:04
And this is a little more specific to our situation. But I think it’s still applicable, potentially to others that are trying to figure out whether they can persevere or not. But if you have leverage, use it. And not everybody does. But I think we both were I’ll say playing nice. But that’s not what we’re experiencing from the other side. And so taking the high road, I mean, obviously everybody needs to know, kind of their own moral compass. And it wasn’t about breaking any kind of codes of integrity that we had. But certainly, we had more leverage than I think we fully recognized or deployed early on. And if I had to do it all over again, I think I would have been more aggressive, we’ll say, with the approach on our side.
Jeremy Weisz 26:53
Yeah, and I love what you said there, what do you want out of the deal? Figuring out what the other party wants out of the deal. I did an episode with Chris Voss, who, if anyone listening, he wrote Never Split The Difference ex-FBI hostage negotiator. And he talked about how he gets people out of hostages and terrorist situation sometimes. So it’s good to hear your advice. And I love that question that you asked, going from four employees early on to 90, there was a turning point where a big portfolio company came in, I love to hear about that, but then also kind of talk through the evolution of hiring and how you grew.
David Staley 27:43
Well, I feel like at different stages, we had those turning points. So I think like, it may have been seven, eight months, when we were burning so much cash, and we got a portfolio company, right, maybe a couple months after the lawsuit was settled. And that I think, gave Reid the confidence that like, oh, yeah, we can really do this. We’re not just going to like totally burnout. But then, over the six years, we’ve now had that happen, maybe two or three times, and even just a year ago, we had that happen again. So I think just at different stages…
Jeremy Weisz 28:14
That happen. You mean a big client or?
David Staley 28:16
Big client, yeah. So we just had these different waves hit at different points. If you look at our trend, all of our products are reoccurring revenue, that’s one of our most, that’s part of our Jim Collins Mac recipe. But that means that everything just stacks on top of itself, like SaaS for at least the services side, as well as the SaaS. But there are these different ways where you’ll get a new client, that is great, no, everything’s gonna go to you. And it feels like another giant opportunity. And so I’m just pointing out that’s happened several times, but nine months, and was one of those big demarcation points. And then I’d say a year ago was another one of those points. So I’d say we’re kind of book ended on that story.
Reid Wicoff 28:57
I can speak more to the hiring, but yeah, going from three to 90, in the span of five years, and doing it all on your own steam is no cakewalk. But the thing that we pledged too early and have been able to maintain is that we weren’t going to, I guess, have asterik by our offers or how we approached talent. We pretty quickly identified where also our weight class was. And we said we need to be competitive here. We can’t, and we weren’t going to be dangling big carrots of equity or performance-based clauses. And we even to this day, don’t have a Salesforce. So those 90 employees, there’s not a single seller at Digible. What we wanted to do, though, was create a great work environment, and we understood that part of that was a good benefits package. I think we offered 401k almost day one. So these are things that probably outside advisors, investors would have frowned upon or said, that’s crazy, you guys are in no position to do that, you’re burning 10s of 1000s of dollars a month, which we were. But we didn’t let that change our go to market as far as getting talent. And eventually, as we did start to find some success and now profits, we just kept reinvesting and reinvesting in that package. We also are clear about where we end, that’s something that can be difficult as you scale. If you’re not careful, it’s like, now you can’t undo that, pull that back. So we’ve just been really thoughtful, cliché, intentional, about what and how we go to market so to find top talent, and one of the biggest examples of that is our four-day workweek. That’s something that we had talked about in the second year of the business. And I’m proud to say that we were able to bring that to Digible about a year and a half ago. And it gets mentioned in pretty much every interview that we have, and lots more there, we don’t need to spell out those details.
David Staley 31:10
Well, I will add on the like framework is important. Since we always knew, like people will say like, hey, you need to know early on, if you’re planning to sell the business or make a lifestyle business, we had wanted to build a great company. That’s what we knew early on. And we also knew that we wanted to scale. And so to scale, you always need to set a first principle and then move forward. So that’s why these frameworks become important to us. So easy example there is we decided we wanted to basically pay in the top 70, sorry, the top 30 percentile of our peer group. So from a salary perspective, and then we wanted to offer other things to our staff that we just feel are the right thing to do, because many of them tend to be young, they don’t think about health insurance or 401K match or vacation time. So that all was important to us. And then on the four-day workweek, let’s go to a true 32-hour workweek instead of just doing four 10s. But it’s just setting those frameworks. So I think specifically, the one was a big change for us was deciding, okay, our pay bands are going to be somewhere between 60 and 80% of our peer set. And that’s where it’s going to be, we’re not going to try to go compete with someone that’s looking for 85%. But the person that wants to work at Digible is someone that wants Great Work Life integration, and a great culture. And is ambitious, not someone that wants a giant title or like the highest pay, then we know we stopped there and we’re not going to compete.
Jeremy Weisz 32:35
How was the implementation of the four-day work week actually, I had one of the people who started, I think it’s fourdayweek.com they started the organization. And so people go check that podcast out. I’m curious how it worked on your end to implement it?
Reid Wicoff 32:55
Well, we waited into it, if that’s the right verbage here, but the first quarter, maybe the first couple, we just did it every month, then we did it twice a month. And then we fully adopted it a year. So we took a year to get there. And certainly there’s a lot of lessons we learned, we knew we would, as far as productivity and communication, even the cultural aspects of it, which you’d assume are all going to be positive. But certainly there were some tests and some challenges for us there as well. The good news here and we did say this, it’s like the best way to innovate is giving yourself less time to do something. And so that was one of the mantras is, it’s like guys, this is going to modernize this company, it’s going to really force us to think differently and innovate. It wasn’t just about what can’t we do or what we do with less time, we use that as a rallying cry. And I think that was super motivational for the whole company. And they took on that mindset. And sure enough, we did find a lot of opportunities to be more efficient, more progressive, and how we went about our business. And the end outcome, I think we ended up with a better response time on our, we like tracking our email response time is just one of those data points for the customer experience, like with Digible is, we want to make sure we get back to you quickly with a single point of contact. That improved is and David I’m sure we’ll add more numbers here. But it also as far as the number of campaigns per FTE, that was an key number for us. It’s like we don’t want to go backwards. We actually want to improve that, even though we’re losing a full day. And we were able to do that as well. So
David Staley 34:41
Yeah, we told the staff that we’re going to do this, but our expectations are actually that you don’t just maintain the same amount of work, we’re actually going to increase the amount of work. So it’s almost like a reward. So we improved our efficiency by 20% meaning we lost a day and our productivity output was 20% higher than when we had the other day as well. So like if you were managing 100 accounts make it easy. Now you manage 120 accounts. And everyone was able to do that through some of it was training about just being more diligent with your time, it was just, being more focused on what really matters. And then to Reid’s point, we started tracking certain things that are really important. And I think that really helped us baseline. So I think our email response rate when we started was something like 12 hours or something, and we got it down to around six hours. And we’ve since moved that down to about three hours on average. So, I think, telling the staff and being clear with them, and then giving them a year to march there and figure it out and warm up to it. But obviously, they get this big payoff in the end. And obviously Digible benefited as well.
Reid Wicoff 35:46
And celebrating along the way. So there’s obviously mile markers when you do something like that. And I think it’s kind of like the three-minute mile, right? Four minute beg your pardon, thank you coming from the runner, I’m not the runner between the two of us if you couldn’t tell, but seeing is believing. And once that happens, you kind of break that glass ceiling, and it’s like, oh, we actually can do this. And so instead of waiting until the end, it’s like along the way, we were trying to make sure that we were recognizing that progress, so that people were feeling the confidence, the belief that what we were doing was possible.
Jeremy Weisz 36:22
I know we have a few minutes left, I have one last question. Before I ask you, I want to point people to digible.com to learn more digible.com. And Reid and David, I love to hear maybe one or two tips on growing leaders and how you grow leaders because growing from a few to 90, you’ve had leaders step up throughout and as you’ve grown, so what are one or two things you can tell other companies of how you’ve helped to grow leaders within?
Reid Wicoff 36:58
Well, he’s looking more my direction, probably because I manage the executive team. And that’s been a little more my responsibility and David’s, but he’s been a vital, I’ll say contributor, I like to call him a co-parent, as I often say, because I need that, you need that. And if you’re gonna develop leaders, you can’t do it by yourself. It does take a village. So I think getting kind of that board of directors together, as I like to put it for a direct report. It’s like this shouldn’t just be me mentoring you. There’s other people here that are all going to be contributing to your success. And the sooner you can identify who those are, the faster you’re going to grow. But I’ve mentioned the mile markers, the checkpoints, that’s really critical, right. Often, I think when you’re doing mentoring, you think that’s something magic happens after 12 months, and it’s really the magic is leading to that 12 months, it’s not the annual review. So we try to make sure we’re checking in regularly, really clear, because I think it said ambiguity is the enemy of accountability, so that there isn’t any confusion on what success looks like. And then it’s the elevate and delegate, we subscribe to this EOS platform that many do. And they pound that into you and rightfully so is if you never let your kid tie their shoes, they’re never going to learn how. But that’s not an easy balance to strike. Because you can abuse that the wrong way. Or it’s like now you’re delegating too much. Maybe you’re giving them more responsibility than they’re ready for. So I think that’s where, again, having really clear numbers, outcome statements, as David likes to point to, that’s pivotal. But I also can’t stress enough that you need multiple people involved for leadership development, it’s not a good idea to try and handle that independently.
David Staley 38:48
I would just add or highlight the EOS portion. The EOS has been really helpful for our business just to organize the chaos from the way Reid and I operate. He’s clear visionary, I’ve got some visionary tendencies to myself, and that really helped like, hone it. And well, we didn’t do a great job as adopting all of the EOS tools religiously at the beginning. And so we’re going through that process now. But I would say that for first-time leaders and sometimes even leaders that have been in their role for 10 years, it provides a lot of really great tooling that will just say, hey, here’s the basics of expectations about how you manage and lead a team. And then from there, you can, when you’re coaching someone and mentoring them, you can really focus on their personal gaps or opportunities. So I would just say following some system like that, it’s like how do you view our parent, how do you take them from walking through college? It’s like that feels like a tall order, but to give them a little bit of a roadmap through EOS would be an easy way.
Reid Wicoff 39:55
But last, real quick comment I’d have on that is be a great listener. A lot of folks, when they first start management will come to me like, certainly at Digible and say, any tips that you can give me would be appreciated. And I said, it’s often overlooked, you don’t get that advice typically, when you’re first moving into management is really put a priority on listening, because you’re so eager to understand the frameworks like the X’s and O’s of management that you miss a lot because you’re not paying close enough attention to what people are telling you. So I’ve seen the speed dating, like, I’m gonna do my discovery work, but I will challenge when people have said that to me and it’s happened here it’s like, I won’t know that you’ve truly listened until you know these two or three things about that person that would let me know that not only are you trying to learn about the business, but you’re trying to learn about them. And I think that goes a long way in leadership development. Be a great listener.
Jeremy Weisz 40:37
I want to be the first one to thank you both. Everyone could check out also the episode with Gino Wickman of Traction who started EOS. And then also I had Mark Winters on who wrote what Rocketfuel, talks about visionary integrator and I think they even have a quiz that you can take. So check those episodes out, that and check out digible.com And I want to thank you both. Thanks everyone.
Reid Wicoff 41:15
David Staley 41:16