Finding leads can be time-consuming and oftentimes costly. With the help of a software and the right people, you can actually do away with your worries about generating quality inbound consulting leads. Today, Michael Zipursky interviews Sam Schutte, the CEO and Chief Software Architect at Unstoppable Software, Inc about how he started his company and is leading billion-dollar companies to the right path through his consultancy business. Sam also shares how he leverages his experience in starting his consulting business as well as in developing a discovery offering.
I am here with Sam Schutte. Sam, I’m excited to have you on.
Thank you. I’m glad to be here.
Sam, you are an expert in process improvement and custom software development where you run a team from your base in Ohio. Your clients include CBRE, Sunstar, Ball and several other billion-dollar organizations that some people might be familiar with, others might not. You’re a real expert in the area that you work in. I’d love for you to tell us a little bit more about what it is that you’re doing. Tell us a little bit more about the work that you do.
Unstoppable Software is my company. We’re a software development firm and our sweet spot is working with companies that want to do strategic software development and software product development to be a key part of their strategy. Specifically, working with companies in the verticals of industrial manufacturing, engineered products and in that engineering and architecture space. I work with them as a consultant. As an individual, my role is to help guide them through that process because often our clients don’t have any real strong background in software development. It’s not something that they’ve focused on as a core competency, even if they’re a large company. I guide them through that process and because of the nature of the work that we do, we also have to provide the implementation services. We have a team of developers that we bring to build out their software products.
Tell us how you got into it. Your story was interesting. I remember you have this on your website, you talk about leaving a university or college. Fresh out, you post your resume and on the same day or a few hours later, you got a call from a recruiter. Later that day, you already had your first gig. Talk us through a little bit about how you got to where you are today, in terms of the different types of places that you work before you went out on your own and start your own consulting business.Hiring salespeople is hard because they're basically professional liars. Click To Tweet
I got my computer science degree from the University of Pittsburgh. I started out in medical records, so we have done a lot of healthcare software in the past because of that. I worked in large IT departments for a lot of different startups. Seeing the difference between the way startups operate that are cranking out product, venture capital back startups versus IT departments that often are slower in moving and they have all different constraints. That was a key insight. I did that for a number of years. I started coming about in January of ‘08. A friend of mine had got promoted to vice president position and I was finishing up a contract that was winding down and he said, “Why don’t you come work for me?” This is a large $60 billion company and I said, “If I’m going to do it, I want to do it on my own as a consultant.”
At the time, my wife was pregnant, I had my house on the market and I was going to night school. It’s a perfect time to start a company. My wife thought I was a little crazy, but that six-month contract working for that gentleman who is a vice president, over time I grew that account. I learned how to make account sales and to grow from an initial footprint. To the point that, we had at one time ten people full-time within that organization working on projects. We still work with them years later. We still do quite a lot of business with them. That was our initial foray into working with industrial manufacturing and industrial companies and that’s been a recurrent theme. That’s something we have developed a center of excellence around is, working with that type of company and we know the way, the problems they have and the challenges they have.
Talk us through the client or the next client beyond that. That was someone who wanted to bring you in-house. You said, “No. Let me do it as a consultant.” How do you take and leverage that first experience in starting your own consulting business and getting your first client or two?
For a while, a lot of consultants and consulting companies face this problem where you get one major client and they can dominate you. Yes, maybe you’re doing millions in revenue, but it’s all with them. I know firms that that’s worked out badly for them. For a while, it became my priority. I’ve got to diversify. I don’t care who it is or how it is. I’m trying to remember that far back. You’re talking about years ago. It was probably through word of mouth and people I knew at that point. I had a couple of companies that are big companies that referred us. We did a little work with US Steel because they had that relationship and got me in and it was also some other people we knew that brought us into some medical records projects and in the healthcare space. Starting out, like anybody trying to do a lot of networking, people you know. That was what allowed me to do that initial diversification. It was also hiring salespeople that had a good roll desk of names.
Do you mean you hired salespeople?
Correct. I had a couple of salespeople work for me. At one point, I hired an experienced gentleman who had some great connections at some large companies and that got us into them. He was able to bring us some more.
What does that look like? A lot of people would be interested in exploring that idea. Many consultants are good at what they do. They have the expertise. They can provide value for the client. They’re not necessarily that excited about the idea of going out and selling themselves and doing the marketing. There’s a lot of people who would love to find a salesperson or someone to take that off their back and implement it. May you explain to us what did that look for you, the person or the people you were bringing on at that time? Making them talk about how that compares to now if they’re no longer around. Walk us through how you go about finding those people. What did that experience look for you?
It’s hard and it’s funny because my dad came up through the IT industry. He’s always been a role model of mine and he said, “Hiring salespeople is hard because they’re professional liars. The good ones.” No offense to salespeople and myself included. I found it difficult to find the right person. It’s probably harder than hiring software developers. First, I tried going for someone that was super experienced and expensive, but someone like that is hard to keep long-term. It did get us into some good opportunities, but it didn’t last long because it’s like always on to the next bigger opportunity. I tried the other extreme end of someone who was fresh out of school, no experience whatsoever in any sales and my idea was to train them up. That was a different set of results that wasn’t great either because it’s no small thing to create a sales management and sales training program from scratch.
That’s probably even harder than becoming a salesperson. What I found is you can’t necessarily outsource that until you have it down a path. Even then, because of the nature of what we do which is custom, complex and far-reaching in an organization’s process and business. It has to be something that I’m intimately involved in. Where we are now, I manage all those sales and make all those sales happen. What you learn and most people learn there are subdivisions of that. There are people who can do lead generation, but maybe they’re not the ones doing the calls. That’s probably our next step is trying to figure out those things that can be done well by someone else.
It’s a good point. We see this a lot with consultants that either reach out, we have conversations with or they’re coming to our programs are often times wanting you to try and outsource, get someone else to handle the marketing or the sales aspects. If you don’t have some of the fundamentals and foundational elements in place, it’s hard to get the most out of that. That’s why I often recommend and because we work together in terms of getting clear on your ideal client, your messaging and all these other things first. Also, going out and having those initial conversations with buyers, whether or not they buy right away, teaches you a lot. That’s information that you can then use to strengthen the sales process, your messaging and marking materials and all of that.It's no small thing to create a sales management and sales training a program from scratch; it's harder than becoming a sales person. Click To Tweet
What we tend to see, it’s putting it out there, my observation is most people have greater success bringing on salespeople or getting support in those areas, once they’ve built a good foundation first in their business. They have an opportunity to test some things to work through refining their own messaging and their ideal clients. You can be more strategically in terms of where you’re putting people in or what resources you’re putting together rather than trying to take this whole chunk from the get-go and put it onto someone else. They have a whole big learning curve that it takes for them to get up to where you want. Most entrepreneurs and consultants don’t have the patience for that.
If we give a sign to an agency, we expect we’re going to see results right away. They need time to figure out what’s going to work and what doesn’t. Doing it yourself, often in the early stages is probably the best thing because you’re going to get that feedback. Let’s talk about your industry to a degree. We’re talking about marketing, business development, and sales. A big part of that has to do with your messaging, specialization and focus. You’re in a marketplace where, when people hear the words custom software, the first thing that often comes to their mind is, “Cheap offshore development companies.” That’s something that anyone in your area comes up against. How do you deal with that? What have been your steps to position so there’s enough differentiation? Your ideal clients might think, “Why don’t we go offshore and find some cheap option to do this?” How do you get people to see that might not be the best idea for them?
The thing is understanding the different stratification within our narrow industry here of software development. It’s tempting and most folks outside of it probably put some big label on it that it’s all programming, consulting or something. There are different people. People that are our clients and others that are not our clients.
What do you mean by that?
For instance, if you look at companies that claim to be software consulting companies, 95% of those are staff augmentation companies that it’s a shell game with W-2 versus a contract.
To clarify for our audience, do you mean that they essentially go out and find contractors, right resources and people to fulfill on projects?
Essentially only recruiters. There are a lot of companies, based on a Google search, you might think they do exactly what we do. What they’re doing is the Kroger’s of the world or somebody that says, “I need twenty developers for six months. I’m going to hire ten of them. Go find bodies.” I call those body shops. They’re not involved in the process of development. That company doesn’t have its own bench of developers or anything that. They’re only trying to fill a gap and there’s a need for that because obviously a company Kroger or whoever, they don’t want to be doing the recruiting. That’s the problem they’re solving. We’re not in the recruiting business and we’ve never had a client hire a developer away from us. They’re not allowed to and the developers that work for us have been here a long time, 8 to 10 years.
What we go for though, in the sector of the market when we hear people start talking about how they’re looking for a development partner. What that means is a company ours that can come in and bolt on to their existing organization and amplify their ability to do stuff they couldn’t do before. For instance, we work with big firms and small firms, one of our customers, they’ve got about fifteen employees. They manufacturer optical lenses and optical products of all kinds of complexity. When they’re looking for is the need to build out systems for their process, are they going to go figure out how to hire a developer? What do you do about source code? How do you manage them? What kind of process? What does agile mean?
It’s a complicated high-risk game because it’s expensive or they’re going to go look for a partner such as ourselves that we can attach and become a key part of their strategy. Both to be more competitive out there to save money and time and everything and also reduce the risk of something going wrong. Us putting that skin in the game and that ownership of the project is probably the easiest way to see it versus if I’d say, “Here’s a developer. Good luck. Let me know how it goes in six months. Here’s your hourly rate.”
What I hear you say is you’ve put in the time to think through the difference between what you’re providing and what others are providing. It’s great not to hear you say. “We’re better,” or, “We focus on higher levels of service.” All these buzzwords are meaningless words that everyone says there’s no differentiation because everyone’s saying the exact same thing. For everyone reading this, I would say, think deeply about what you are doing to hit on the difference between you and others in the marketplace. Go beyond the buzzwords and the surface level points of difference that maybe everyone says on their website and think about how does that difference play out in the mind of your ideal client?You can't necessarily outsource tasks until you have it down. Click To Tweet
How do you take that and make sure that you’re communicating it in your messaging? That’s the next question I have for you. How have you taken that understanding and knowledge of the difference that you’ve identified a buying criterion for us is when someone’s not looking for developers, they’re specifically looking for a partner. That’s an interesting keyword that you can seek to or focus on and identify. What do you have done with that? What have been some of the best practices that you’ve implemented knowing that point of difference? How have you use that to your benefit in your marketing, conversations or messaging or anything else? What have you done with that knowledge?
From a marketing standpoint, we try to talk more about strategic questions and not skill questions. We do a little bit of both. If you were trying to sell somebody on the idea that you’ve got the best developer in the world and they should hire them to come work for them as an employee and you get a commission on that. Maybe what you’re going to talk about is, a certain skill that the developer’s great at, “We’re the master at angular or something that.” Whereas, what I try to talk about more is, “How can we help you develop the intellectual property?” “What can intellectual property do for your business?” Answer questions like, “Should I patent things?” That’s what people ask me. They don’t ask me about, “Should we be writing software in X or Y?” It also affects the way we develop our products and services and our productized services which you and I have worked on a lot together.
For instance, it is starting every project out with a discovery engagement. Offering to do that project on a fixed bid basis, offering ongoing maintenance packages and the way we structure all that. If you’re looking for a body to fill a seat, you don’t need any of that. None of that makes any sense. If you’re looking at, “If I spend $10 million to open a new plant and I can spend $1 million of that on software to make it run better.” That’s your budget. That’s your number. You need to find somebody that can come in and make sure that happens. Due to the nature of our business, if you try to do it yourself sometimes it can be hard to control that budget.
We’ve done some work together. You came to our coaching program several years back. Take us through a little bit about what was going on. Your business was already doing well. You had some great clients that you are working with you built up a team, you had some different salespeople. A lot of good stuff was happening. What was going on in the business that made you decide to reach out and have a conversation and ultimately come into our program? What was on your mind? I’m interested and because it’s important for others to be able to see and maybe find some points of relevance or more things where they might feel they’re hitting up against some ceilings or challenges. What was going on for you at that time?
It was related to what we were talking about in sales and salespeople. When I had maybe 2 or 3 different salespeople work for me with mixed results and thought, “Maybe I’m the only one that knows how to sell this right now and I don’t know how to teach someone to sell it necessarily. I’m going to have to do the sales part.” What else is in the mix? What’s the other part of the equation? That’s the marketing. In my field, if you go talk to most firms, sales and marketing is the same thing. There is no difference at all. Marketing is much bigger than that. I had worked with 1 or 2 other coaches, advisors or more marketing consultants or folks who would run a pay-per-click campaign for me or create a piece of direct mail, but they still weren’t getting it.
It was more like, “Even this, I probably have to be the one that creates it but I need a guide or someone to tell me you’re doing it wrong.” It’s funny because you and I had talked about this before somewhere I landed on a PDF or lead magnet you had and I subscribed and I probably had hundreds of emails from you. A couple of years later, something came in the inbox that led me to call you. At the time, what I needed help was, with a virtual CMO, a virtual marketing executive type that knows his stuff.
It was a fit for me because of the size we were and that way, I can make the sales and I can make sure I’m doing the right thing with marketing. A great thing you said made it clear for me. You said, “The same way that you can look at source code and software and see whether it’s good or bad. I can look at marketing to if it’s good or bad.” That’s definitely been the case. That’s a goal of mine is to figure out and to be able to look at something the way you do and say, “That won’t work.”
One of the things I remember that we worked on, which I’d love to hear your view on how it’s impacted your business, but around developing a discovery offering. It’s an early stage first step low level of risk option for people who are interested in working with you. Take us through what did that looked like. Why did you want to put a discovery offer in place for your business? What were the challenges you are facing before putting that in place?
For me, the problem was people would reach out to me all the time waiting to come in and talk to them. I might be in there myself or take some of my developers in there and we would be spending an inordinate amount of time creating documents, plans, designs, and everything all towards the ability to say, “Here’s the project.” This was years ago. This was in the early days, but it’s, “We don’t have anywhere near that much money. I only have $10,000. I pitched him on $80,000 or $800,000.” First off, it was a spending thing because if I say, “We need to do a $5,000 discovery engagement,” and you say, “That’s way too expensive.” You’re not my customer. It’s not going to work. It was also a little bit of initial purchase. You got an initial commitment and prove that this person can write a check and do they have that ability?
I had people that would say, “No problem. You can tell me a couple of hundred thousand, I can do it.” They take it to their boss and their boss says, “No way. I’m not trusting you with this. You’re a junior-level guy.” They thought they could do it and they were wrong. A big piece of it is simply money and a budget validation. We’re providing a lot of value through these discovery things because we’re telling you if what you’re even talking about is feasible. Is it possible? Are you crazy? Is it going to take ten times what you’re thinking or is it going to be ten times cheaper than you think? What’s the value of that? There has to be a price on that.There are always things hanging out there. You never know what's around the corner. Click To Tweet
It’s also a real point of differentiation too. You could, like many other consultants out there say, “Sure. Happy to do this for $50,000, $150,000, $500,000 engagement, no problem. We can take care of that.” What you’re saying is, slow down. First let’s dig into this together and see, as you mentioned weather it works, whether this makes sense to do? If it does, is it going to cost more than you might think? Is it going to cost less? How do we accomplish it? It’s helping them to receive value before even beginning. When they do decide to start, they’re doing it in a way that has the highest likelihood of not only them succeeding but also getting a positive ROI.
It also builds trust. I always tell people, “Do you want to walk into a client and say, ‘Here’s a proposal for $500,000 pay me,’” or, “Let’s try to do a little tiny thing together and see if we each other and that’s only going to cost $2,000.”
What percentage of your projects begin with a discovery offer?
It’s 100%. We will not do a project unless the discovery. It’s probably been that way for about a year. I had a transition point where we did a little bit here and there or some people could talk us out of it. What I’ve noticed and learned is we simply do not win those opportunities. If someone won’t shell out a small investment and we’ve done them for $500 if they’re like, “I don’t. I can’t.” “What about an afternoon together?” It can be a small amount of money sometimes but most time it’s not that. Most time it’s $2,500, $5,000 something that. We do that 100% of the time. We evolve through the process. I remember talking with your cousin Sam about this a lot and you gave me this idea. You could say, “It’s $5,000 but if you hire us for the rest of the project, we’ll discount at 50% and cut it back.” What I found is if they do the discovery project, they always do the other project. Your win rate was much higher there. Whereas, if you didn’t make the discovery, it was 50/50.
It’s usually shortsightedness that holds you back. They look at it and go, “Why would I charge $5,000 when I can charge $50,000?” The chances of winning the $5,000 are significantly higher than lining the $50,000. If you land the $5,000 the chances are you’re also going to land the $50,000 or turn into a $150,000. You don’t lose anything by starting with the discovery offer.
We have a project we’ve been working on. It was a $1,200 cover offer and it was easy-peasy. They said, “It makes sense. Let’s do it.” We’ve done $400,000 or $500,000 with them but the thing is they would never have done that without that first experience. The other thing is that the whole process of building trust together. I tell folks, “We’re delivering real value. We’re giving you design documents, requirement documents, a roadmap, and a feasibility study.” These are real things. There are people out there that probably charge tons of money for that. Take it and hire some development team in China if that’s what you want to do. No one’s ever done that. I never had anybody do that.
A real buyer is not going to do that because number one, you’ve already given them great value and number two, usually a buyer is a buyer. Meaning, if someone buys the threshold between a $0 transaction and even a $10 transaction, they take their checkbook out or their credit card out and they have to take that step. When they do, what it means is they’re buyers and they’re more likely to buy again. They recognize their time is too valuable. They don’t want to go and start from scratch and try and find somebody else. As long as you’ve delivered value and they’re feeling good about the relationship, the trust and the results they can see and they’re going to continue on with you which is what you’ve found.
I want to talk about you as a CEO and leader. You have a team and you’ve worked with team members for many years. What’s it like for you? You have the responsibility to provide for your team and business is filled with challenges. It’s not always, a year after year growth and with no downtimes or no slow times. Even with companies that are growing consistently, there are still lots of challenges that they face. What’s it been like for you as a leader that feels a responsibility to provide for your team?
That definitely is the pressure. You’ve got to worry about the things you can control. Sometimes it’s been a rollercoaster. I’m fortunate to have folks that will stick and stand by me. Maybe sometimes they get nervous, but I always come through is what they feel. We talked about that because one of my big core values is, egalitarianism. I’m not their boss. I don’t own them. We’re partners in this effort and we’re peers. Maybe they’re on the field and I’m the coach, but so we talk about these things. That makes it easier for them when there’s transparency about what’s happening. What’s coming up? What’s not coming up? “Things are getting a little slow. We need to finish this up and find something pretty quick. Can you help me do that?”
What do you do when you hit that place? A lot of people have that where they’re either hesitate to bring someone on because they’re waiting for the perfect time. Even if they have people they get to a place where maybe revenue does slow down a little bit. They start questioning their team, what they’ve built and the model. You’ve been there. We’ve had conversations and everyone’s been there at different times. What have you found is the best practice? What helps you the most when business gets to a place where even if it’s a challenging day, but you also have to provide for your team members’ responsibilities? What do you focus on? What do you think about what you’ve found that helps you to get through and see the future a little bit so you don’t end up slowing down or taking apart what you’ve already built?
One answer is motivational and the other practical. One is probably when the business was a couple of years old. I started out working on my own one-man a company like most people and there was a time, it was April where contracts ran out and I had nothing to do. I sat there for 60 days with nothing to do. It was funny, I was sitting in this client’s office and they’re like, “Are you doing anything?” “No one’s paying me. I’m sitting here.” It was stressful and maybe some people will quit seven days in. At the end of that 60 days, I had a meeting and we closed a $600,000 project. Which later became over $1 million projects. What if I’d given up two weeks in and thought, “Time to go get a full-time job?”
I think about that. You never know what’s around the other corner when it’s the bleakest. The other thing is if you’re like, “Maybe I need to hit a revenue goal,” or, “We don’t have much runway here.” Get out of a piece of paper and write down what you can close and what can you make happen in the short-term. There are always things hanging out there. There’s that guy you talked to a few months ago and those things get buried in your CRM. There’s a lot of CRM noise and making those numbers visible. In conjunction, trying to set realistic revenue goals put them somewhere you’ll see them, this was something you told me a long time ago. Put a Post-it note on your bathroom mirror that says, “Your quarterly goal.” For me, the home image of my iPhone is a list of my quarterly dollar goals. I look at it constantly. That makes you aware if you’re like, “I’m only 10% of the way there and the end of quarters halfway done.” That stuff can become invisible sometimes when you’re working on the business.
If you don’t have a clear sight or you don’t have a visual on what you want to achieve or what that destination is, it’s hard to reach it. You might end up there, but you might also end up on the other side of the world. It’s important to be aiming at least for that target. Sam, there’s so much more that we could dig into here but time-wise, I’m going to have to wrap up. I want to make sure that people can learn more about you and your work.
One thing that you’ve done and I want to draw people’s attention to, which you weren’t able to touch on. People could go and check this out for themselves is, you did a good job of building some short concise case studies, which a lot of people don’t do. I know that thing that we talked about several years ago, and it’s a big opportunity for people to communicate more of their wins, experiences and the results they help their clients to achieve. You’ve done a good job of that in your case study section on your website. Tell everyone here, where’s the best place to go to see that and how to get in touch with you?
Our website is UnstoppableSoftware.com. At the top, you’ll see a link there to case studies if you want to check those out. I also have a podcast you can check out on the website as well or by going to UnstoppableTalk.com. You can also reach me at [email protected]
Sam, thanks again for coming on and enjoyed the conversation.
My pleasure, Mike. It was good talking to you and talk about all the things we’ve been working on.