The $50K Consulting Offer That Works

What does it take to go from seeking sales door-to-door to helping $100 million industrial companies achieve 10x growth? Caxy CEO Mike LaVista has done all that and more in his 23-year journey scaling a tech consulting firm, and he shares many of his secrets for success here today. 

Starting with an 80’s cover band background, Mike’s transition to tech was accidental but fueled by a focus on client needs. Caxy’s key pivot, he reveals, was niching down to serve industrial companies scaling to $1 billion. Noting that this specialization dramatically increased project value, Mike highlights Caxy’s innovative “Game Changer Assessment” which has become a cornerstone, positioned as an investment, not a cost. He details how client acquisition has evolved from cold calls to referrals, partnerships, and content marketing – including his own podcast – and that scaling the team has required standardized processes and objective hiring assessments. Mike finishes up today by describing his transformation from tech expert to strategic CEO, embracing coaching and a growth mindset, and propelling Caxy toward exponential growth as it aims to make today’s top line tomorrow’s bottom line in three years.

In this episode, you’ll learn:

• How to niche down your consulting services for maximum impact

• How to position a high-value discovery offer

• Client acquisition strategies beyond cold outreach: the power of referrals, partnerships, and content

• Key steps to effectively scale your team and avoid delegation pitfalls

• The role of objective assessments in hiring A-players

• Strategies for transitioning from a technical expert to a strategic CEO focused on exponential growth.

Welcome to the Consulting Success podcast. I’m your host Michael Zipursky, and in this podcast, we’re going to dive deep into the world of elite consultants where you’re going to learn the strategies, tactics and mindset to grow a highly profitable and successful consulting business.

Before we dive into today’s episode. Are you ready to grow and take your consulting business to the next level? Many of the clients that we work with started as podcast listeners just like you, and a consistent theme they have shared with us is that they wished they had reached out sooner about our Clarity Coaching Program rather than waiting for that perfect time. If you’re interested in learning more about how we help consultants just like you, we’re offering a free, no pressure growth session call. On this call, we’re going to dive deep into your goals, challenges and situation and outline a plan that is tailor made just for you. We will also help you identify where you may be making costly and time consuming mistakes to ensure you’re benefiting from the proven methods and strategies to grow your consulting business. 

So don’t wait years to find clarity. If you’re committed and serious about reaching a new level of success in your consulting business, go ahead and schedule your free growth session. Get in touch today. Just visit Consulting Success – Grow to book your free call today.

Michael LaVista, CEO of Caxy Interactive, builds outcome-based software for diverse industries, from fintech to startups. With 20+ years of experience, he advises C-suite execs on mission-critical software, understanding their unique challenges. Beyond Caxy, Michael’s a musician and family man residing near Chicago.

Connect with Michael LaVista

Discover more about Caxy Interactive

Hey Mike, welcome.

Michael, good to be here. Thanks.

Yeah. Great to have you on. So you started Caxy, which you told me just before we hit record means “ribbet” in Greek. Like the sound that a frog makes or was it a rabbit or something?

Frog. It’s a frog.

For some reason I was thinking- well, because you said, yeah, ribbits, I was thinking rabbits.

Rabbits. Whatever people want it to mean, it can mean.

Well, see, this is the thing. You chose a name that has a story behind it. I’m guessing that you get quite a few asking you what does Caxy actually mean?

Yep, they do. And it’s funny because it used to be– When I started the company, I had two partners. I was our like technology person trying to figure out how to do programming. We had a salesperson and a business person. And so like none of us were marketers and we’re like, “Oh, Caxy. That’s kind of funny. It’s a frog. How about frog having web feet? Web. Get it? Web.” And like it was just so tenuous but like it was a short four letter domain. We thought that was important or cool, and then here we are 22 years later.

Yes. Was it started 2000 or 2002?

Oh my gosh, it is 23 years later. Yeah.

Okay. So clearly, listen, the name must have been the right name because you’ve survived 23 years and not only survived, but thrived. You’ve worked with some very large organizations. We’ll get into all that. Let’s kind of go back to the early days. Why did you start Caxy? What was going on? What were you doing? What’s the origin story?

So it’s like some entrepreneurs. A little bit accidental. My first career was in music. I was playing in a ‘80s cover band in the ‘90s.

I got the connection. Now it’s very clear.

Right? You get it. You see the straight line. And it was really fun and a great experience. And we toured the country, the US for a long time. And I got to a place and was like, “I wonder if I’m going to be doing this when I’m 60.” And so these two friends I mentioned who had this kind of idea, we’d heard about the dot com boom. This is like super dating myself. But like all you had to do was say  dot com and someone handed you money and everything was super easy. Obviously, it wasn’t, but it became like a transition thing where I’m like, “Well, let me do this on the road or on the weekends,” or kind of ramping it up. And then we finally incorporated. It was like, “Okay. Let’s make this the main thing.” And I do remember playing my last, my last show with the ‘80s band. We were playing at a college in Iowa and I was playing Jesse’s Girl and I was like, “I don’t think- I can’t play Jesse’s Girl ever again. I’m done.” That was my last night. And then we flipped over and then that was the focus ever since then and still do it on the side and have a band and all that kind of stuff. But this has been the main thing for a while.

02:47 – Caxy’s Mission and Services for Industrial Companies

And so what does Caxy do today?

So what we do is our mission is we want to help companies, primarily, non-tech companies think like industrial manufacturing, stuff like that, where what they focus on isn’t technology. And they’re typically around $100 to $200 million where that’s a size you get to you’re making something happen. You’re delivering a lot of value clients and yet you want to get to a billion. And typically you can’t do that without rethinking how you do your processes in general and then further how technology might catalyze that. So what we do is we come in and we always start with an audit first. Let’s document and diagram all the things you’re doing. And typically there are a couple of areas that you probably know about that are problematic. We come up with some recommendations about that and help you create a roadmap. 

And then if you continue with us, most of the work we do by volume is we make software. So we’ve identified a problem and we say, “Oh. Actually what you need here is your sales process is leaking margin because of X,Y,Z. We might build a little piece that goes in there that you use,” and then you know, then typically we want to look at a three year growth plan. We want you to make 5x back on what you invest with us. So we’re really a business-focused technology company that wants to help companies grow.

04:03 – Caxy’s Client Audit Process and Pricing

Got it. And you charge for that audit?

We do.

What does that look like pricing range wise?

Because we’re never sure what’s in there, and I want you to feel like you got value, we have a flat fee, so that’s $50,000. And what it does is for a company of that size, even if you don’t continue to work with us, probably for the first time, you’ve seen your processes, you can see where the bottlenecks are, and you’ve got recommendations about how to fix them, how to move forward, what to buy, what to build, all that kind of stuff, and you can use us or someone else. But that usually just provides a lot of value on its own.

That makes sense. From what I saw on your website and the research that the team did here, it looks like you work in a pretty diverse kind of span of industries: Manufacturing, construction, some retail, some private equity, even maybe trading, healthcare. Has it always been that way or was there some kind of niching down and adjusting as you went along?

Well, it’s funny, you’re talking to me at a really great time where we’re starting to have some courage about who it is that we serve. And like a lot of consultants, I started off, I remember, with three people, and we’re at about 50 or so right now. And with three people, you kind of say ‘yes’ to everything. And so we did every technology, every industry. We did some marketing, we did some operations, we did anything you were willing to write a check for, we were doing it back in the early days. And of course we weren’t good at all that stuff. And so as time went on, we got smarter and smarter about the stuff we were the best at and expert at and narrowed in on that. But kind of we lagged in our courage about industry. And hopefully this podcast will be my reason to go fix the website. But we’re really focused on industrial companies because we think that size, what I’m talking about, that $100 million to $200 million, seems like that’s where they just hit a ceiling. And if you’re the founder, CEO, everything just got really annoying and everything’s slower than it used to be and inefficient and margins are eroding, all that kind of stuff, and you want to grow, that’s where we plug in. 

When we’ve been in other industries, it’s really fun. So you mentioned trading and some other stuff. They’re really fun for us, but it’s more like these sort of fortuitous situations where we were referred into this great company. We’re a great fit for them, but it’s hard for us to go market to other companies because it’s harder to have that value right away, which we think we can have in the other industries.

06:29 – Client Acquisition Strategies for Consultants

That makes sense. And then if we go back to the early days, you mentioned you kind of took on whatever work came your way. Just getting things going, getting traction. How did you actually go about getting your first few clients?

In the most insane way possible. So my partner, who I’m still really great friends with, literally was doing door to door web sales and he would get excited about driving into an industrial park. So you can picture, you drive into that area and there’s like 50 just low one-story buildings and he was knocking on doors. And our first really big client was a dry cleaner supply business. And so all like the little tags and bags and hangers and little bits and pieces that go with something. And we talked to him, he’s like, “You know what? I think I like to take this online.” And he was serving customers in the- we were in the Chicago area, so he was serving dry cleaners in the Chicago area and thought like, “Maybe I could just do this nationally. ‘And so it was an early e-commerce thing and we figured out e-commerce doing that. We figured out a lot of marketing stuff, some SEO, some other things, and we were pretty upfront. We just started. So he took a chance on us and it was really successful. We worked with him for a while and then they ended up selling. So kind of successful. 

We were door to door and we did a little bit of print marketing. And a story I’ve told a lot is that we spent a lot of money on full page ads in the business magazine in Chicago. And we got no calls the first month, no calls the second month, no calls the third month. And we’re like, “Okay. Well, that was silly. Why did we do that?” And then a really big company, Citibank, called our marketing company and said, “Hey. Do you guys do this thing we saw in this magazine?” And we’re like, “No, but we’ll call them for you.” And that was our kind of launch pad into some larger companies.

I love the story of your business partner just hitting that kind of business park. And I think so often, especially for people who are at an earlier stage in their kind of business ventures, and we were talking to Mike earlier about technology, this is the kind of stuff that people don’t do anymore or it’s very rare. Everyone kind of runs the technology. They’re looking for the latest social app or what’s trendy. And it’s like that shiny object because it seems like they’ve been sold on how quick and easy they’ll be able to get results. But doing that old stuff like going to events and networking and just a little bit of grit and hustle, putting yourself in uncomfortable situations actually tends to yield some pretty good results.

Without question. Because I think one thing I really believe in is this idea of a pattern interrupt, if you’re just doing the thing that everyone else is doing, it’s really hard to distinguish yourself in the noise. But going to an event and walking up to someone that feels like you’re nervous about it, the worst that can happen is they can turn away. Well, it’s not that bad. Try it. And it’s incredibly successful.

09:13 – Current Marketing and Lead Generation Tactics

Let’s fast forward then to the current times. 23 years into the business, what are you and the company doing? You said about 50 people now. What are you all doing from a marketing kind of lead generation perspective? What’s building your pipeline? What’s getting you meetings? What stands out right now?

So one of the things that I’m embarrassed to admit is that there are some lessons you have to relearn every couple of weeks or something. And if there’s something I’ve found a lot of founders forget that most of your revenue is going to come from your existing clients. And they’ve already demonstrated a like and a trust of your work and your people, and they know who you are, they know where to send the check, all that kind of stuff. And so don’t forget to go to your clients and talk about how you’re serving them. And I’ll give you a little hack that has worked for me nearly 100% of the time, is that as we’re growing, I always go to my current clients and I make sure that we’re doing well for them. That if they were to rate us on a scale of 1 to 10, we’re a 9 or a 10. And if we are, I say, “Hey, listen. Just letting you know,” and here’s the line, this is the hack, “I’m investing in the company and we’re growing our capacity. And before I give those new people to someone else, I want to see if there’s anything else we can do to help you with.” And I’ve got to tell you, it is close to 100% successful. And it’s because when it’s almost maybe like a loss aversion maybe is the thing that works here where it’s like I’m presented with something, I might have this extra capacity but if you don’t take it, they’re going to go somewhere else. And I’m not trying to do anything unethical. It’s just like it’s true. Like we have new people, I would prefer to give them to you because we already know your business, we like working with you, we like all that stuff. There’s mutual value there. So that’s number one. 

The other one is frankly what we’re doing right now. I started a podcast a couple of years ago kind of on a tangent of an idea and that experience taught me actually no, I want to be on this idea. So I reloaded this year on something called the Digital Transformist because we’re focused on digital transformation. And I’ve noticed that the mere act of talking to people who are generally in our market, that either they know someone we should talk to or we should talk to them or they know someone else for the podcast. And it’s sort of like a self perpetuating flywheel that’s been really, really successful and by the way fun and I hope informative and interesting for people. So that’s been really good. And I think this year of the 15 or so that I’ve done, we’ve done work with four and then the add on the tag along which is when we’re done, we chop it up, as I’m sure you do, into little bite-sized pieces that gets out onto social media. And the feedback I get from people is, “Oh, my God. You’re everywhere.” And I’m really not. I’m just reusing this stuff. That’s been really successful. 

And then the third leg is we, and don’t forget this is a small business, find partners who are serving your client just in a different way. So for us it’s either like designers are great or business consultants or private equity where we’re all just trying to help these clients in this space from different angles. How do we team up and do that? So long answer. But that’s kind of the three legged stool there.

12:16 – Creating Differentiation for Consulting Businesses

Yeah, that’s fantastic. 

Now, Mike, there’s a lot of companies who would say something somewhat similar to what you said in terms of we help industrial or older companies to kind of modernize their technology stack and you’re not the only company doing that kind of work. But obviously, you’re doing something that is working really well because the company has grown to where it’s at today. What do you think differentiates your company? And I guess another way to look at that question is, what’s the strategy to create differentiation? How do you go about and how have you gone about separating your company or moving it to a higher level so that it’s seen in the way that it’s seen?

I love the question because it’s the thing I finally got smart about about five years ago. And I think I’ve seen this in other companies too. I think most consultants talk about and focus on what they do for the first V1 of the company. And all of a sudden, for me at least, you wake up one day and you go, actually, what’s more interesting are what are the problems I solve. And so for a long time, we were the name of a technology shop, or we did websites or we did software or apps. And so what ends up happening is then, I think from the buyer journey, you look like a transaction that you either do or don’t. Do I need an app or not? Yes or no. And then about four or five years ago, flipped over to a model where what we’re trying to think about is, well, what are the problems that we actually solve? And again, this line that I came up with ended up being a little bit like truth serum. When I say we help industrial companies go from $100 million to a billion, all of a sudden if you’re a partner or you’re that company, you go, “Wait, wait, hang on. Forget app. Tell me about that.” And the way we get there in tactic, might be an app, but it might not be. It might be some consulting, coaching, it might be all that kind of stuff. So that transition, I want to tell you, 5x’ed my project size in the last five years and actually maybe trending toward 10x. And I’m not kidding, just focusing on the problems you solve and that strategy making its way into all our materials has sort of been how we’ve developed that.

So just to try and summarize that a little bit, it’s kind of the earlier version of your company and what’s very common, and we certainly see this as well with people that reach out to us, the focus is initially on things like the deliverables and the inputs, the things that they do, not have enough focus on the outcomes, the results, the value that they create for the clients. And you’re saying that by intentionally focusing more on the outcomes and the results and the value, it’s created bigger conversations with buyers because you’re not talking about just the deliverable, you’re talking about something that could include many deliverables, but the deliverable itself isn’t the focus, it’s about the bigger outcome or solving a bigger problem. And so that is what’s 10xing project value, is that correct?

Yeah, absolutely. I think another side effect I didn’t really think about until after it started happening, I think consultants probably have this experience too, which is when a customer shows up saying, “How much for this thing?” And what they’ve done is they’ve done a self diagnosis and it’s almost like we all do with WebMD. And then all of a sudden you show up at the doctor and you’re like, “I’ve got Zika virus.” And it’s like, “No, okay. Hold on. Let’s actually let a professional do the diagnosis and let’s see what’s going on here.” And we’ve been able to redirect people to say I know you showed up looking for this thing and you’re getting quotes all over town for this thing, but let’s talk about the problem you’re trying to solve. And to be honest, sometimes it is. Sometimes you’re right. But sometimes you’re going down a path that’s really like this tactical thing that you heard about. This is like during the app craze or like everyone had to have an app, but no one knew why. And so when we’re able to redirect, all of a sudden we’re the only company that told them to do something different and maybe even smaller. And we’ve earned some trust because we’re really trying to help them as opposed to just give them a quote for how much for two tons of steel?

16:28 – Optimizing the Sales Cycle for Consulting Services

That makes a lot of sense. As you’ve kind of gone through this journey, I’m interested in how has your sales cycle changed, if at all? Could you kind of paint a picture of ‘here’s what our sales cycle looks like today and this is what we’re doing differently compared to before. This has made a really- has had a big impact.’

So, spend a lot of time on that. And I think that the free sort of sales work that I did, our sales cycles were anywhere from months to forever to I’m chasing people three years later. And it’s because we’re doing the, “Hey, just checking in,” and seeing how things are going, and we’re just little kind of puppies running around your feet looking for crumbs. And when we switched to more of a business outcome kind of stance, what ended up happening was we ended up talking to the CEOs more often. Because the first thing we sell is this assessment thing, if we can make the case and it makes sense, typically, it’s a one call close, honestly, because it makes sense. “You’re trying to get somewhere. We have experience in this. Do you want to do it or not?” And that should be an amount of money that isn’t like a deal breaker. And so all of a sudden we started getting, in a way, paid sales calls to help them, but then also see what the pipeline will look like for us. Let’s dramatically reduce the turnaround.

Before you actually get on the call with that CEO, let’s say, what typically happens so that when you do get on the call, they’re prepared, in many cases within one call, to commit to a $50,000 engagement?

Without getting into our whole process. We have like a–

I want to get into the whole process- I know we don’t have time for all that. But yeah, walk me through that.

Yeah. The sales process we do is a lot like, if you’ve ever done a Sandler consultative sale, I think it kind of mirrors that a little bit. And I think the idea is- I have found that most people start off thinking, start off skeptical, prospect start off skeptical and think they can probably do it on their own, but they’re willing to maybe hear you out. And so through the process, if we can figure out where you are now and where you’re trying to get to, which again for our frame is you’re at $100 million, you’re trying to get to a billion, well, that’s a really cool goal. “Tell me about what you’ve tried already that you know that didn’t work.” “Well, we brought in a consultant and  that didn’t work. And then we hired this head of IT and that was a disaster. Then we did something overseas and that was a crazy waste of money,” and all this other stuff. And so you get to a place where you’re tacitly both agreeing, you’re 0 for 5. And then we say, “Well, what are the obstacles?” “Well, we can’t hire the right people.” So you’re getting, in a way, they’re confessing they want to get somewhere, they tried stuff, it didn’t work. And then we say, “Listen. It sounds like you’ve done- you know your problem, and maybe it’ll just go away.” “No, no, no. We need help. We need help.” 

And so we get to a place where, again if you’re a hundred million dollar company, the idea of spending $50,000 to solve what potentially is a $900 million problem for you, shouldn’t be too crazy. And if we ask the right questions, if we can demonstrate some expertise about, for example, we’re at a place now, I think we know a lot about how these industrial companies work. We know a lot about problems you’re going to have with inventory and sales and ERP and all these things, we can demonstrate some expertise, then it’s not as difficult a sale as it would be- If they were just flipping around, if they’re out shopping for assessments, we’re going to be a price thing. But if we just show up, we have a business conversation about how to get you from A to B, and you confess that you tried some stuff and it didn’t work, it’s not as hard as it could be.

20:19 – Lead Generation Methods and Referral Strategies

And how are you getting those conversations? I know you said that there’s a big portion of revenue or a big opportunity is selling deeper into the existing kind of client organization. But when you’re working with somebody, having a sales call with a new prospective client, how are you getting to that point? Is it typically a referral? Is it outreach? Is it through a podcast, as you mentioned? How are you finding those come into place?

It’s funny, I did leave out one thing we do. So we do do some direct outreach where we’re sending customized physical, physical packages, kind of lumpy mail stuff. And it’s your typical 1% or 2% kind of response rate. The referral business and the client referral, like referral from partners and from other clients is most of it, and so they do show up warm. So I don’t want to boast that I’m like America’s number one salesperson. But when we’re aligned on you want to get somewhere and you’re stuck, we can be a really big help.

21:17 – Scaling a Consulting Business from 3 to 50 People

That makes sense. That makes a lot of sense. 

Can you walk me through the progression of you’ve been in business now for 23 years, you’re about 50 people? If you were to look at those 23 years in terms of chapters, when did you hire different people? So day one, you were, I think, three partners, if I’m not mistaken. And then when did you make your first hire beyond the partners? And at five years in, how many people do you have? Just kind of walk me through the stages of how do you get to 50 people or so today?

Sure. The chapters are a great way to think about it because we were on our own, the three of us, for six or eight months. And with the illustrious dry cleaning supply job, we needed a designer. So we hired our first employee. Shout out to Lawrence Smith, who’s out there somewhere, great designer, and helped us design some things. And we were hustling and working 80, 100 hours a week. So whenever I get to a place where I’m like, “Okay. I think I’m actually working two and a half jobs, let’s cut it down to one and a half and we’ll hire out that one.” And so we were always kind of like just hustling and kind of adding people in. And then we got a couple of really big ones all at the same time that were total blind luck. So I mentioned Citibank, and then one of our early clients was a company called Thinkorswim that later sold to TD Ameritrade, the trading company. And their need was like, “Oh, I’m going to need four more people in 30 days.” And so we did a lot of sell some work and then hire. And I will tell you, in retrospect, I wish we did it the opposite. Because one of the things that plagued the company for a long time was we were always at 105% capacity. So everyone was always a little or a lot overworked. And all it would take is when technology for one bug or one weird thing, or someone’s on vacation to make someone’s night or weekend miserable. And so in retrospect, I wish we’d managed a bench a little bit better, but those couple of big clients really kind of leveled us up a little bit. And then we did that for a while, and then we got stuck at 20 and we went to 21 and then 20, and then 19 and then 20, and 22 and then 20. And we couldn’t escape this orbit of 20.

And sorry, Mike, what was causing that? Why were you stuck in that place?

I really think it was like– So here’s what it really came down to. And this happened again at 40. And it’s that we got to a place where our processes and our sort of all star players had to be involved in every part of a delivery. And so when we grew to like a little bit bigger and someone said, “Okay, great. On the new client, we’re going to have new people. Only the new people do that one.” And that one didn’t go as well. And they didn’t crash and burn, but they were- whereas most of our clients would work with us kind of in perpetuity, that client would do one project and be like, “Okay. That’s enough, we’ll call you next time.” And then they never would call. And so we realized we had to get better at scale and what that would look like. And then our kind of Caxy V2 made it up to about 40. And then the same thing happened again. And that’s where you kind of mentioned hiring, that’s when we introduced our first kind of middle management, sounds like a pejorative term, but people to help manage the teams so that the executives could help grow the business. And that is kind of where we are right now.

Can you just break that down in a little bit more detail? So let’s just take the place when you’re at 20 people and you’re up and down, but, and it’s not, as you said, so it sounds like the experienced people on the team, they were seeing good results, clients were coming back, renewing, staying longer. The newer people were put onto projects without the more experienced people maybe supporting them. They would do an okay job, but the clients wouldn’t renew, wouldn’t stay longer. Can you just break down more specifically how you solve that? Was it you hired somebody to project manage stuff or what do you actually do more tactically to solve that?

Yeah. So I think when we finally escaped that 20 orbit, what we figured out was that the different All Stars – and we had like amazing unicorn people who are doing this incredible work – they all had their own way of doing it. And as an organization, we didn’t necessarily say here’s how this job works. It’s like, I’ll go do that. And then almost by luck, this person did a really good job and someone else did something different. And so we went through a really heavy documentation phase to say, “Okay. Here’s what project management looks like. Here’s how we do agile.” Even down to, “Here’s what a standup looks like. Here’s what a day looks like. Here’s what a demo is.” Really documenting it out so that new people could be like, “Oh. I didn’t realize I was supposed to do that.” And like, “Oh, that’s the magic. You gotta do that.” And so that documentation step, which sounds kind of boring, really was the way we were able to train past that to the next level. And then sort of right now where it’s happened again is now that the work that we’re getting is, I mentioned 5 and 10x bigger, the complexity is 5 and 10x bigger. So we had to sort of revisit those processes to say, “Okay. The OS needs an update.”

26:26 – Caxy’s “Game Changer Assessment” Offer

Yeah, right. That makes a lot of sense. You talk about this, we kind of call it internally a discovery offer, your initial assessment, $50,000. Do you sell that as a branded, an assessment or do you have a different name for it that doesn’t use the term assessment?

Oh, yeah. We call it The Game Changer Assessment.

Okay. The reason I ask is because I’ve found that for some companies, they look at the word assessment and they feel like we’re paying you to learn about us. And it’s like, “No, we don’t want you to just pay to learn about us. We want a specific outcome.” So you have branded it. It has the word assessment, but it’s not just an assessment or a discovery offer labeled as such. There is some branding around it.

There is. And if I’m honest about it, again, thinking about how it’s sold, it has never been sold. When someone has gone on to Google and said, “How do I hire someone to do an assessment?” It’s more like in the natural flow of our sales conversations, it’s like, “Here’s this thing we do that we think creates value. If that makes sense for you, we should do that first. It happens to be called this.” But I see your point. There is a connotation that comes with it for sure.

27:34 – Hiring and Team Building Strategies for Consultants

So as we’re talking about team here for a moment and kind of building the team, what have you learned or what stands out for you? When you’re looking to hire a new team member, an A player, what are the one or two things that really must be there? Maybe there’s more than that, but what are the must haves that you and your team are always looking for when you’re hiring somebody new?

There’s new news on this in the last month. So one of the things that really hurt me early on in the company is I got super lucky with my first eight or ten hires. And I was like, “Oh, I am a genius. This is so easy. I just go out and hire people and the people I like work out.” And as we grew, the way I would sort of describe at least my Achilles heel is I will hire a funny, outgoing person regardless of role or experiment. And so I would always err on the side of like, this person’s a nice good person to have culture fit, all this kind of stuff. But then it’s not necessarily a correlation. This person is a terrific employee, shows up and is accountable and will do the extra thing for the other person on the team, all that sort of good worker stuff. 

And so we tried for a long time. What questions can we ask? How do we get at that? And I’ve come back to something that I think I initially would not have enthusiastically endorsed a long time ago, which is we now have a suite of assessments that we do that include things you’ve heard about like this, but some other kind of motivational and some other things we do. It’s about an hour long test and we get lots of information. And the thing that we noticed, we did our whole team, that was missing was we had a bunch of extremely smart, very accomplished people who were kind of constantly deferring to each other. And the mental image I have is, that Spiderman meme where there’s like three Spidermans pointing at each other. I think we were doing a lot of like, “Well, what would you do?” “No, what would you do?” “I’ll defer to you.” “Well, what would you do?” And so we weren’t always moving the ball ahead quickly. And on a big team, for us a big team might be 9 or 10 people, we were kind of getting in the gridlock a little bit. 

And so we’re realizing and not saying that we’re never going to hire those people again, but a team has to be a mix of skills and personalities and drives. And so one of the ones we’re looking for is someone who’s able to kind of push through ambiguity. Someone who’s willing to just make the decision kind of thing and then make the decision right. And so those are things that across the board that we want. And I think on any of those personality tests pinned all the way at the top or pinned all the way at the bottom is generally a problem. So if you’re super demanding or totally passive, that’s a problem. So we actually mapped per job, per role, we mapped the ranges of all the scores that we’re looking for. And they’re not hard and fast, but if you’re too low here, but you make it up for over here, that’s great. But maybe the short answer, I’m trying to give, nothing but long answers today, the short answer is try to get more objective about it because I can be so easily fooled. And I think as an owner, you hire who you’re wired up like. I’m a high DI, so I like outgoing people who to do something. And those aren’t always the best employees.

30:49 – Transitioning from Technical to CEO Role

Right. All right. So Mike, before we wrap up, my final question, or second to final question, you started off as the technology guy, right? Your partner is selling more business sales, marketing, all that. You mentioned that you bought out, made a transition, you bought your partners three or four years, whatever into the business. Today, you lead the company. And I wonder if you could just talk about- there’s lots of people out there who have maybe more technical backgrounds. They don’t initially feel like they are strong at marketing and sales and business development and all the things you need to actually grow and scale the business. What have you learned? And I think my real question is what are you spending your time on today as a CEO, as a leader of this 50-person or so company with a technical background? Where do you put your energy? Where do you put your focus to grow the business?

So there’s maybe a couple of things to dig into there. I think the first one is I know a lot of technical founders of consulting businesses like mine. And just because it’s natural, again, if you start as a doer and I know how to do a thing and I can sell you that thing, that’s what you’re going to do. And you can take it so far and then you have a choice to make and there’s no judgment about it. I think you could probably run an 8 or 10-person company like that almost forever and probably be the lead developer on every project and do a lot of the delivery stuff and all that kind of stuff. The opportunity that presented itself to me is that I am a little unusual as a technology person who also likes being with people. It’s not nobody, but it’s 1 out of 10 as opposed to whatever. 

So I had this opportunity early on in the company where my partner, who’s terrific, had started his family before mine. And we got to a place where we were working a ton, he wanted to dial down and maybe it makes sense that we find a different way to do this. And so the month we decided that we would do that, we got our first really big check from this other client. I’m like, “Oh, this is easy. I just take this check, I give it to him and we’re–” It’s easy. And so I lucked out. And then literally the next morning I woke up and I was like, “Oh, wait. Am I the sales guy now? Oh, I don’t know. That’s scary. Do I want to do that?” And then it just turned out that I actually really liked it. And so to answer the second part of your question, I’ve invested in four coaches over the 20 years, each sort of like building on the next thing. And I found that I absolutely love sales and finding the problem and helping that. I love answering that question – how do we get from a hundred million to a billion? I find that really fun. And the fact that I don’t actively program and I haven’t in years, like a long time, but I know how it all works. I know all the words. We’ve moved to frameworks that I don’t know how to do anymore. So I couldn’t really help at all if I wanted to. But I know how to put it together and I don’t need to go ask somebody how it’s going to work. 

So when I think about growing the business, what I work a lot on now is how do I take us to the next level. One of the thought experiments that we came up with the other day about our three year plan is, and we stole this from somebody, do the thought experiment of what would happen if you took your bottom line today, I would say your top line today, and made it your bottom line in three years. And if you want to grow by 20%, your mind goes to a place of let’s just work a little harder. But if you’re going to like 5x your business, you have to do it differently. You will have to develop different skills and hire different people. It’s going to be a different way of doing business. And so that thought exercise is what we’re focusing on now. We’re going to bring our top line to our bottom line in 36 months. And to do it, there’s some system things, some people things, some marketing things, but that’s where I’m focusing my energy right now.

Yeah, I love it. Well, I definitely want to follow up with you on that, Mike, as you go through that journey and hear how things come along. Thank you, Mike, for coming on here today. I want to make sure that people can also learn more about you and Caxy. Where’s the best place for them to go?

Best place to go is caxy.com and/or thedigitaltransformist.com where the podcast is.

Okay. We will link all up in the show notes. Mike, thanks again so much.

Important Links:

Mike LaVista’s LinkedIn

Caxy Interactive

The Digital Transformist

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