Bill D’Alessandro is the show’s most frequent guest. With the podcast once again in full force I wanted to catch up and see what he’s been up to.
Quite a lot, it turns out.
Since Last summer he’s raised money from investors, hired a dozen more people and made two acquisitions. He’s all-in on the goal of building a big business, with the audacious goal to grow 100x.
We dive deep about the ins-and-outs of raising money, building company culture and how to screen for pro-active employees when hiring. You’ll even hear details of the much-rumored incident where he marooned his boat with three innocent souls aboard.
Welcome to the eCommerceFuel Podcast, the show dedicated to helping high six and seven figure entrepreneurs build amazing online companies and incredible lives. I’m your host and fellow eCommerce entrepreneur, Andrew Youderian.
Andrew: Hey hey, guys. It’s Andrew here and welcome to eCommerceFuel Podcast. Thanks so much for joining me on the show today. And coming back to share all sorts of wonderful, interesting things is a long time recurring guest, Mr. Bill D’Alessandro. Bill, welcome buddy.
Bill: Yeah, great to be back. It’s been a podcast hiatus and we’re back on the air. Season two.
Andrew: Season two. I was hoping to do this because this is gonna be kind of a catch up with you focusing on, of course, on things like, you know, what you’ve been up to the last year, specifically in building your team with your business. But I was hoping to do this out at Fripp Island.
You had myself and a bunch, a handful of other people out there. You guys have a house out on the coast in South Carolina. And yeah, it was a great time. Second time I’ve had the chance to come out and thanks having me out, man. Are we gonna get into the story about how we got your boats dock and got stranded for eight hours? Or something that your dad doesn’t know about we should keep quiet with?
Workcation Gone Awry
Bill: I told him, I told him. And it’s not the first time. It’s not the first time, yeah. So this was the fourth annual Fripp Island workcation, where I bring a bunch of entrepreneurs out to the beach for a week, and we jam on business. And I’m very glad to have Andrew and a bunch of other smart guys as a part of it. So we’ll continue…to be continued next year.
Andrew: Man, I will say like we did obviously get the boat…it was interesting. We got the boat stuck, by no means…I mean, it wasn’t your fault, it was just some bad tides and water conditions and stuff. But one of the cool things that came out of it was we were stuck for seven hours from like, I don’t know, 3:00 to 10:00 ish or 2:00 to 9:00 ish.
We couldn’t go anywhere and I would say probably some of the most amazing conversations from that trip happened when we were stuck on a, you know, a 50 square foot platform in the mud with nothing but like potato chips, the sun, and some beer to keep us fueled. It was great.
Bill: It was really great. Because I mean, when you’re stuck for literally seven hours, you know, you kind of run out of stuff to talk about pretty quick, and then you kind of dive deep into, “Well, we’re all stuck. We’re all staring each other on the face, you know, let’s kind of go round and talk about what we think, you know, each of our greatest strengths are, greatest weaknesses, or biggest blind spots.”
You know, as, you know, people on trip know each other fairly well, having done this for a few years now, so it was really interesting to hear from other high-level folks, you know, some things you might be missing about yourself. Which it’s kind of hard to get that unless you lock a bunch of people in a room or strand them on a boat together.
Updates From The Past Year
Andrew: Yeah, no, it was super valuable. Well, let’s do an update with you, Bill. So I mean, it’s…maybe we can take, you’ve gone off course a couple times the last six months. But let’s kind of do…what have you been doing the last year? Like maybe we can use Fripp as a great kind of anchor point. What have you been doing since the last trip that we had in 2016?
Bill: Yeah, so I guess between mid-2016 and mid-2017, my company, Elements Brands, we have acquired two additional brands, one called TriLASTIN, one called eb5. And we’ll talk more about the stories behind those in a little bit. We’ve grown over the time period from about 4 people to about 16 people.
We’ve raised some outside capital, which was really exciting. And then personally, I also sold a small software business that I was involved in sort of on the side, so I could continue to focus my efforts entirely on Elements Brands. So a lot had happened in the last year. Oh, and then also personally, I got engaged and bought a new house. So I’ve been pretty busy.
Andrew: That’s awesome. Congrats on the engagement, man. I’m excited for you in that.
Bill: Yeah, thanks.
Year Over Year Revenue Growth
Andrew: So total number of business and what’s new revenue growth? Just didn’t catch it. How many businesses do you have now? And then maybe what have you grown from the revenue from last year to this year?
Bill: Yeah. So we are now in the, I think it’s the seventh year of Elements Brands. And we have more than doubled every single year since inception. So it’s started to get some nice compounding, you double every year for seven years. So, yeah, we’re up roughly double, a little more than double. We’re projecting a little more than double in 17 over 16.
Andrew: And why raise funding? I mean, why take on…the whole reason you got into eCommerce was to escape kind of your overloads in the corporate investment banking world. Why take on investors, which obviously investors can have a lot in terms of their experience, in terms of capital? But they can also add a lot of stress, they can add, you know, someone else’s opinion on that, especially if they’re different from yours that can be can be problematic. Why did you take on funding? Why did you raise that money?
Bringing in Investors
Bill: Yeah, so this was…you’re right about all of that. It’s an interesting calculus when you go from kind of solopreneur, and you bring on employees, you know, and you own the whole thing, you don’t answer to anybody, to bring on some investors definitely changes the dynamic. And it’s something not to be taken lightly. And my thinking on this sort of stemmed out of a conversation I had at Fripp two years ago.
And the question was, you know if I wanted Elements brands to be 100 times as big, what would that look like? You know, project out and say, “Okay, assume Elements Brands is 100 or 500 times as big as it is now. What would you have had to do in order to get to that point? And I think that’s just generally a very interesting mental heuristic when you think about goals and progress, and where you want to go on vision is to say, “Imagine I’ve already succeeded. Imagine I’m a hundred times bigger. What will I have had to have done in order to inform that success?” And then those, very usefully, those are the things that you should be spending your time on. You can kind of write that narrative backward.
And for me, you know, what I realized, as I said, you know, I had won the four-hour-work game. And, you know, that was working, I had achieved sort of the bounce around the world, I had my company, I was selling products online, I was making, you know, enough money, I kind of won that game. And I sort of looked in the mirror and I said, “Is this all there is? You know, I think we’re doing something really unique here at Elements. How can we scale that and make it 100 times bigger? How do you take a big swing?”
And what came out of that discussion was that if we were to be 100 times or 500 times as big, what that meant is that we’d have to buy a lot more brands. And, you know, not just kind of 1 per year, but 12 per year. And so what came out of that is sort of our BHAG–or Big Hairy Audacious Goal–is to develop the infrastructure and systems and cash flow such that we can buy one brand every month without taking on additional outside capital. And I realized that to do that, I had to essentially take on capital one time. Because the business was scaling, and it was throwing off some cash but it wasn’t throwing off enough cash to reinvest in huge chunks.
And I realized that I wasn’t gonna get to that place for a few years. And I had an opportunity to raise some money and basically pull forward that huge chunks of cash available to invest phase, so we could be investing equity capital for the next few years, and bolting on additional cash flow engines, additional brands to the core. And the point is sort of once we have spent through the equity capital, we’re at a point where the core portfolio is throwing off sufficient cash that we can continue keeping up that pace of acquisitions. So I kind of realized it was time…I could buy a few, several years by raising some outside capital. We’ve pulled that timeline forward.
Bill’s Thesis for Buying Businesses
Andrew: And you’re kind of thesis for everything with Elements Brands, I don’t know if it was this way from the beginning or if it kind of evolved. But is that if you look at a lot of the big consumer product goods companies, a lot of their products are…they’re not, they’re struggling, whether it’s, you know, ketchup or whether it’s skincare or detergent, things like that. And really, we’re in an era of a lot of products that are much more niche or much more personal. They’re smaller but they have much more loyalty with consumers.
And so it’s your kind of thesis that instead of having 2 or 3 or 4 cash cows that you build up and you milk for, you know, 40, 50 years, you’re gonna try to assemble really a portfolio of high-quality niche, very personal products that you can run under one umbrella.
Bill: Yeah. So the thesis is essentially that for a number of reasons, we are trending towards a world with more smaller brands rather than fewer larger brands. And I don’t know that I’ve ever actually talked about this on the air before. So the Elements Brands investment thesis that a nutshell is that in the past, if you wanted to take a consumer product, a brand, to market–say a brand of laundry detergent, for example–you’d have to go through WalMart, Sears, Target, you know, kind of traditional big-box retail.
And a WalMart is large but a WalMart is finite. You can only put so many brands of laundry detergent in a WalMart. So that has the effect of concentrating consumer demand for laundry detergent on a smaller number of brands, which leads to fewer, larger, brands.
And that leads to a world with Procter and Gamble, and Colgate/Palmolive, these big sort of CPG conglomerates. And they’re very good at things like running focus groups to figure out the best scent of Tide that appeals to the most moms. And they’re good at running Super Bowl ads to the biggest possible audience to tell them that Tide is the best. But with the shift to eCommerce, it kind of blows the doors off that whole model because shelf space online is infinite.
You can have as many laundry detergent brands as you want on Amazon.com, or on the Internet more broadly. And that has the effect of taking that same consumer demand for laundry detergent and spreading it over a larger number of brands. And that leads to a world with more smaller brands. And this is really enabled by eCommerce because it’s easier than ever to start a brand. It’s easier than ever to go from zero to a million or 5 million or 10 million in sales.
How to Focus on the ‘One Thing’
Andrew: So maybe, let me play a little devil’s advocate with that. One of the things you’re really excited to do, obviously you liked the idea, but one of the things that appealed to you about this as well, based on…just based on talks we’ve had, is the ability to focus on one thing. You know, you divested of that SaaS app you talked about, some of your other stores. A lot of the things you had you totally cut out to focus on this.
But that shift in preferences towards very individual niche products partially is based on, a lot times better products. But it’s also a lot of times based on a very tight and relational founder, or owner, or someone who is…there’s, they be more personal because somebody who, let’s say, you know, builds up an organic lip balm from scratch, like they’re very invested in it, their values are in the company, and there’s a part of that founder that comes with it.
So I guess my two questions to you playing devil’s advocate would be one, how are you gonna be able to do that as you scale to maintain the voice and the soul of all of those brands? I mean, when you go to, let’s say, 20, 30, 50 plus, that sounds…it would be difficult to do. And secondly, how do you focus on…because these are all across different websites too.
Like for me, one of the challenges and things on your side is thinking about trying to run at some point 50 or 100 different websites for brands that are, you know, 4 to $5 million dollars or even maybe…I’m not sure what the average one is. But those two things seem like they could be, in my mind, the hardest things to overcome. So how are you thinking about those?
Bill: You’re right. That is absolutely the hardest part of the business model. I think a lot about this. And my answer is sort of, at least as our…I think about it in two parts. And this is definitely not say I have this figured out, or to parry and say no, that’s really not that difficult, because it’s very difficult. But the way we try to solve it is kind of in two parts.
And the first part is that you’re correct that a lot of brands have…to maintain the voice and the individual identity of different brands when you buy them is difficult and important. But there’s a lot of stuff that goes into running a brand and a website that has nothing to do with the identity of the brand. The accounting, the fulfillment, the conversion rate optimization. You know, the process by which you, you know, evaluate that AdWords is profitable.
You know, you talk to someone like Mike Jackness, and he has a whole funnel, you know, kind of for giveaways and email marketing. And that funnel can be applied across lots of brands. So you might not reuse exactly the same content but you can reuse a lot of the same methods. Kind of the plumbing and the blocking and tackling of running an eCommerce business can be applied across a lot of different brands.
An example for that is we own two brands that aim to solve certain skin conditions, different skin conditions. So the brands are competitive but the way you market them is very similar. You know, just swap out, you know, how to prevent X with how to prevent Y. You know, and you kind of duplicate all your AdWords campaigns, you can duplicate all your email funnels.
You can kind of duplicate your website template even to some degree and, you know, fill with different content. But it’s not sort of this all or nothing thing, where brands are so different, or brands are the same. You know, a company is a kaleidoscope of things, and brand is only one. So we can spread our tactics across lots of brands without necessarily homogenizing the branding, the feel, and the products if that makes sense.
Keeping It Personal
Andrew: It does. Do you try to focus on products where…that part makes more sense. What would be harder I think is maintaining kind of a personal connection, like let’s say you’ve got a founder who…a lot of it depends to on how integral a founder is to the business. But let’s say for the sake of argument they’re not, R&D in a lot of these would be difficult too.
It seems like it’d be hard to be fairly sophisticated and world class, let’s say, developing just like let’s say one or two or three different verticals in that area. But to try to do 50 on a regular basis and come out with new products would be almost impossible unless you had a huge team. Do you try to focus on products where they’re fairly static and, you know, if you didn’t come out with a new product for the next 5 to 10 years, that it wouldn’t be a big issue.
Bill: Yes. I mean, we definitely don’t like things that are faddish. Anything that’s experienced a huge pop I’m not interested in because, A, they’re gonna want me to pay for that growth and, B, what happens after the pop? You know, the other side of the bell curve, right? So I’m definitely not interested in faddish products but the paradox here actually is that in some ways, product development actually gets easier because we’ve confined ourselves to the niche that I call household goods and personal care. So that is sort of anything branded and consumable that you would use in your home or put on your body.
And by confining ourselves to that niche, it means we actually have a pretty good pulse on, I don’t want to say all but a large wedge of the contract manufacturers in that industry. And all of those contract manufacturers have in-house sales teams and dev teams. So they’ll actually bring to us, you know, “Here’s a new hot ingredient. Here’s a new product,” you know.
And we also have so many touch points on the market through our different brands that we’ll start to see, you know, here’s where the market is moving. And then we now can say we have a ton of contract manufacturers and all of their staff at our disposal, and we can develop a new product and then say which brand does this actually fit best underneath. So as long as you don’t get really scattered, the product dev actually gets easier because you can follow an industry and introduce new products under whichever brand makes sense.
Bringing In Other People’s Money
Andrew: Got it, yeah. I’d love to get a little bit inside your mind. When you raised the money, you know, you made this decision. And when you go out and raise money like this, you took a sizable chunk of money. You’re raising it from people, maybe you don’t know, but you definitely raised it also from some people that you did know, people you had personal relationships with, people that you’ve built up rapport and trust within your network over years and years. And, you know, you hadn’t done this before.
Like you’ve got an idea, you’ve got a thesis, you’re going into this. But there’s a very, you know, it’s business and it’s something that is audacious and so, therefore, has a chance, you know, a chance of failing. How difficult was that, I guess? Question one. And if it was a really difficult thing to take people’s money given that obviously, you’re doing something risky, how did you get past any kind of hump or difficulty you had in saying, ‘I’m gonna do this, and I’m just gonna take the best shot,” and what was that process like for you? Was it really hard decision? If it was, how did you get yourself from one side to the other?
Bill: Yeah. It was a very hard decision because, you know, as you said, we had given up sort of the four-hour-work week dream and you’re taking on some bosses. But for me, you know, when I decided to raise money, the thing that sort of followed from that is what kind of money? If you raise sort of traditional venture capital, you know, they have a set of incentives from their side that require the companies that they invest in to grow very quickly and get liquid within five to seven years. And that was not, you know…and as a result of that, they’ll put sort of unnatural pressure on you to do things that kind of conform to that narrative.
So I was very specific that I didn’t want those types of pressures imposed on me or on Elements Brands. So I went out to raise money from an investor that had a long-term focus. So when we met with people…and I’ll backtrack here into how we found them in a minute. But when we met with people, you know, most investors will ask you, “Well, how do I get my money back?” And the right answer is, of course, you know, here’s a list of companies that will probably buy us once we’ve reached a certain size, you know, you can get liquid that way, or we’ll go public.” You know, you’re supposed have a plan to get liquid.
And, of course, I’d thought about all this. But I on purpose gave everyone the wrong answer. I said, “You’re not gonna get liquid. I wanna build a big company. I wanna be around for the next 25 five years. I want to throw off cash and you’ll get your money back that way in the long term.” And that’s scared some people and they didn’t invest because of it, but I only took money from people who heard that and said, “That’s something I believe in and wanna be behind.” So I took patient capital.
And as far as sort of thinking about, you know, where do you find investors, how do you go out into the marketplace and get connected and get networked in, yes I was able to use some of my network that I’ve had for a while. But the most important thing for me was to find a lead investor who really believed in what I was doing, was willing to write a check and commit early, and then open up his Rolodex to other people who he thought would be interested in.
And he’s become a close personal friend. He’s a great guy and I’m very deeply indebted to him because he really helped a lot. And the process for me took nine months. You know, I kind of, when I had this idea of what I wanted to do, I went to him and I said, you know, I realize it’s sort of breaking the mold a little bit but here’s what I wanna do. You know, what do I need to put together in order to raise money? And sort of he kind of read and drafts the deck.
And when we got to the point where, you know, it was really baked, you know, he said that he would invest and then he introduced me to some other folks. And so I think having a very strong lead investor to get one person to write a chunk that’s a sizeable…or a check that’s a sizable chunk of your round, and then we’ll introduce you to other people, is key.
It goes without saying that your pitch has to be good. And there are a million bits of advice in the world about how to do a good pitch. I think the simplest is to paint a picture of where the world is going, support that picture with data so it’s believable, and then tell a story about how your company is riding the wave to that future point so you’re swept up. The world is changing and here’s how we’re taking advantage of it. I think that is the strongest narrative for a startup money-raising pitch.
Raising Money & Running The Business
Andrew: And you said nine months. So did you spend nine months with, obviously you’re doing a few other things here and there? But was that your primary focus for nine months, raising that money?
Bill: No, because I was still running the business. I mean, anybody who’s raised money kind of knows it does take up a huge chunk of time, but you also have to still run your business. Yeah, I mean, I thought about it every day but I still had to do my job.
Andrew: And now that you have investors, what…we don’t have to get into, you know, the real nuances of everything involved. But at a high level, what does that mean in terms of your on-going involvement with them? Do you have board meetings, how often do you have to give them updates or presentations, are they calling you every, you know, week asking you, are they hands off? How does that change your interactions with them?
Bill: So keep in mind you don’t have to do anything, right? It’s like, at this point, it’s all just sort of an agreement between you and your investors, what makes them comfortable and happy. What we’ve settled on that works for myself and my investor base is I send them a lengthy email every month, you know, just kind of an investor update. “Here’s what’s going on, here’s the set of financials for the month, here’s the major strategic initiatives.” That takes me, I don’t know, two hours to write.
So we do that every month and then we do board meetings twice a year. We may move to quarterly here shortly, interestingly because I think it’s helpful. The board meetings are the best days of my year, because the guys that get around the table are incredibly brilliant. And it forces me…for that board meeting I usually do a 100-page PowerPoint. I dust off the investment banking PowerPoint making skills and I, you know, with charts, you know, I break down all the brands, I do some kind of a macro commentary.
And the reason I do that is because you get out what you put in. You know, I’ve got a few hours with some serious heavy hitters around the table. And if I come prepared, if I put high quality in, I get even higher quality out of these guys. So I work my ass off for the board meetings. And I don’t do it because they require it, although I know if I stop doing it they would sort of expect it. But I do it because it helps the business, because it’s the most high leverage time I get every quarter.
Growing a Team
Andrew: Interesting. I wanna move a little bit from investing to the how you’ve grown the team. Because you went from 4 to 16 people in one year, which is not an insane jump. But that’s one person per month that you’re hiring minimum. And to me, that seems, and I mention a lot of people listening, that’s a very, a fairly, you know, torrid growth rate on the personnel side. So what’s your philosophy for hiring? Particularly like, what are you looking for and what do you screen for in those candidates? And I’m sure it varies based on the position but maybe you can kind of start there with those two aspects.
Bill: Yeah, so I have had to get a lot better at hiring. Because as you said, it’s about one person per month in addition to running the business. Then you’ve gotta train them, get them up to speed and we throw a lot of people when they come work here pretty fast. So we need a on-boarding process that gets us the best candidate that can get up to speed the fastest and that will stick. Because churn is is devastating. You know, when we lose people, that is not only monetarily expensive but it’s slows down our growth curve.
So it’s very important to get good at hiring. And I’ll talk a little bit later, if you want, about company culture, which is something I’ve gotten very passionate about this year at the behest of my investors sort of pushed me down the hill to start looking into it and have sort of fallen in love with how do you build a company and a culture and a vision with goals that you can achieve. And how you use that vision to sort of guide which you do on a day to day basis.
So…but kind of more tactically, what we do to hire candidates is I try to put up a series of hurdles that they will clear in order to move forward in the interview process. So my simpliest hiring hack, and this sounds ridiculous, is so we post our jobs on some local job boards and also on Craigslist. And we write really, really good job descriptions. So the job descriptions, we use sort of this format where we talk a little bit about our company and then we talk about who are you? Who are we looking for? And I don’t mean, has a four-year degree. You know, what I mean is looking for somebody who has successfully quarterbacked long-term projects where you were the single point of failure.
You know, describe who you are, who our ideal applicant is, what they’ve done, how they feel, what type of challenge they’re looking for. And then we move into sort of two sections. One section is had you been with us for the past six months, you would have… And I list the projects that this role would have worked on, so the applicant can conceptualize what it would actually be like to work here. And then I have another section that kind of says, “If you get hired in the next six months you will…”
You know, and some of these things, like when I was hiring for my warehouse and logistics manager, it would be like renegotiate our company’s contract with FedEx. Plan, map, and rearrange, you know, our 6000 square foot warehouse for eCommerce. You know, things like that so they get a sense for what they’ll actually be doing. And then at the bottom, I set up the hurdle which is to apply for this job, send your resume, send an email with the subject line, exactly this, you know, it might be “Warehouse manager 2016 application” or whatever. Send an email with exactly this subject and a PDF resume attached. Parentheses, word documents not accepted, to this email address. So all you have to do to apply successfully is to get the subject correct and to send a PDF resume.
Bill Loves PDFs
Andrew: But Bill, PDFs…PDF is so hard.
Bill: It’s so hard, but if you can’t make a PDF, you can’t work here.
Andrew: You’re brutal, man.
Bill: Well, that’s the point, right? So the point is, it’s not a high hurdle. I mean, it’s just a basic conscientiousness hurdle. And the thing that floors me every single time is the test of match the subject line and use a PDF instead of a Word document eliminates 80% of applicants. So of the emails we get, eight of them have either not conformed to the subject line or attached a Word document.
Andrew: And you just delete those, I’m guessing.
Bill: And I delete them out of hand. And once actually, I was having trouble getting qualified candidates. So I said, “All right. Well, maybe I’ll make an exception.” And I started wading through the applications who had not followed the guidelines and was shocked to find out that they were 100% terrible. It was unreal how this test had correlated to good candidates. So now I feel very, very comfortable just deleting them if people don’t follow those directions.
On Boarding Tactics for New Employees
Andrew: What about your philosophy for…let’s say you get someone, you know, you hire them, what’s your philosophy for on-boarding and training them? Do you have…and maybe just managing people in general. We could probably do a whole series of episodes on this but once that first day comes, do you have a very a fairly high-level approach saying here’s our goals, here’s what we’re trying to get, here’s are the resources you have, here’s your deadline, go? Or do you have more of a hands-on training approach? What’s does that look like when somebody comes to work for you day one?
Bill: We do a little bit of both. Sort of, I think one of the key tenants that guides all of our on-boarding is we try to have our new applicants do meaningful work as soon as possible. So I don’t wanna like sit you in a conference room and make you watch a bunch of videos and get “trained” Right? I’ve had my employees think this is a joke, but I actually love it. I take it as a huge compliment. And they say that starting to work at Elements Brands is like getting hit in the face with a fire hose because we just throw you in. You know, you’re like you work here now, let’s go. And so you’re expected to start work very, very quickly and ask for a lot of help.
It’s very much on-the-job training and we have…and maybe this is a good segue into culture and some of the things we’ve done to describe what it’s like to work here and what types of people we hire. We came up with a set of core values. There are six of them, and we did this, you know, I kind of took a rough cut and then I went back to the employees and said, “Do you feel as though these things describe what it’s like to work at Elements Brands?” And this was…my investors made me do this.
And I initially thought that it was a total waste of time. Like a total waste of time. I was like trying to put together financials and the vision for the company, you know, our strategy, and they required that I dedicate half of our board meeting in early 2017 to talk about vision and culture. So I did it because they wanted me to. And it’s been one of the most valuable things that we’ve done.
So we have our core values. If you want, we can we can go through them together. But the first one, and I think this is the most important for us is, be proactive in everything that we do. And so the difference is, you know, instead of saying, you know, “Hey, I did this task, what do you want me to do next?” You know, somebody who is proactive says, “I’ve completed this task. Here’s what I think I should do next. Do you agree?” Someone that comes to their boss and is proactive about seeing, “Here’s where my time can be best applied, and I’m just gonna go for it. I don’t need a babysitter I don’t need someone to tell me what to do next.”
Which is really important in a high-growth company. Because we’re all running around like crazy. And we’re gonna throw you in, and you need to have a sense for, you know, here’s how I maximize my time.” What then what’s most important, and I can’t just sit around and wait for somebody tell me to do something or I’ll never do anything.
Andrew: With that, you know, being proactive, some people have that, some people don’t. And I’m sure you’ve hired some people that are on both ends of that spectrum. For the ones that aren’t, have you really tried to reinforce that by asking, you know, if they come to you, by really trying to get out of them saying, “Hey, you know, what’s next? This is what I expect you to do. I expect you to come with me with more of a proactive agenda every time when we meet.” And if so, has it actually been helpful in turning people around? Because that sounds like it would be a…you can make the argument, I think a fairly strong argument, that people either are like that or they’re not. And it’s really hard to develop that in people.
Stay Late & Finish If You Want to Get Hired
Bill: I totally agree. It’s very hard to turn that around. So I try to do the hiring process as to not hire the people who are not like that. So we actually screen for that in the in-person interviews. And I do it with a situational question, you know. And part of it you can just tell. You say, you know, tell me about a time that a previous boss gave you, you know, kind of a vaguely defined goal with not a lot of details on how to get there, and how you drove the project to meet the goal. And you can tell from the answer to that question whether somebody is proactive and just has it together.
But I ask for, I specifically ask a situational question where I say, you know, “Andrew, imagine that you get this job. You come in on Monday and I say, “Hey, Andrew.” You swing by my desk on Monday and I say, you know, “Here’s about three hours of work to do. It’s gonna require some data analysis. No rush on it, but let’s meet first thing on Friday to go over it.” And you say, “Sure. You think, “I’ve got all week.” So you go back to your desk.
And for one reason or another, you know, the week kinds of get away from you, it’s not that you’re not doing your job but just it was a busy week. And Thursday at 4:00 pm rolls around, and you haven’t started, and you’re supposed to meet with me first thing on Friday to review the results of your work. What do you do in that situation?
And it’s very, very interesting because you get two responses. Response number one is some version of, “Well, I would have managed my time better,” or “I would never let that happen,” Or, “If I did, I would proactively communicate to you so you weren’t surprised in our meeting that I didn’t have it done.” Some version of that.
The other version, which is the correct answer is, “I would stay late and finish it because I made a commitment.” And I have never hired anyone that didn’t answer I would stay late and finish it. And that’s not because we’re stay a late company but it’s because I want people that make commitments and stick to them. And I think that’s a great indicator of productivity.
Andrew: Wait, wait, so just to clarify, you’ve never hired anyone who has not said…you’ve only hired people who said they would stay late and finish?
Bill: Correct. Yeah, that is like the one non-negotiable in my entire interview process. You need to answer…
Andrew: What percentage of people say one versus the other?
Bill: I think about 25% of people say I would stay and finish it.
Andrew: Wow, that’s surprisingly low.
Bill: Especially in an interview environment, right?
The Interview Process
Andrew: Yeah. So how many people do you have to go through, with all these tests, with all these things, which are obviously, you know, you’re trying to find the right person, how many people do you have to interview before you can you make an offer to someone on average?
Bill: So we typically try to do, we try to collect enough resumes that we can phone screen 10 people. And a phone screen takes, you know, a half hour or less, which is just sort of walk me through your resume, let me get a sense for who you are. And, you know, and I’m trying to suss out, you know, I don’t do those anymore, typically my department has to do these. And we’re trying to suss out do you meet our core values? Are you proactive? You know, do you solve problems in reputable ways, you know, etc?
And if you kind match that…if you hit all those things, then we try to narrow that 10 down to 2 or 3 that we bring in for an in person. And then I do the in persons with my department head, with the hiring manager. So it’s the two of us and the applicant and we do two or three of those for every position. And several times, we’ve not liked any of the two or three and we go back to the drawing board, we repost the job. So…because it’s so much more important to hire well than just to hire.
High on the Excitement Level
Andrew: I want to ask you about a few of your, in kind of the light of, you know, raising the money, you know, kind of up-leveling, all this hiring, everything you’re doing, get a sense of where you are personally with everything on the work and maybe just the health front. So maybe you can give me just a sense, you know, of 1 to 10, 1 being the worst, 10 being the best ever, level where you’re on these different things. And feel free to comment on them as you want. But first one, excitement levels. Where are you?
Bill: Very high on the excitement levels. I mean, our thesis is working, you know, it’s bearing itself out in the numbers, I’m excited because I love eCommerce, I love…when you talked about focus before, like it would seem like I’m not very focused on each of the brands. And I never got to say the other way that I solve this problem is that we’ve built a great team.
So I view…my baby is Elements Brands, the systems, the people, the strategy. And then my employees, their babies are the brands in the functional areas where they work. So I focus on one thing, which is the company, Elements Brands. And my employees focus on a finite amount of things, which is their functional area or the brands they work on. So I’m very excited because this is the stuff I love to do. And I get to do it every day.
Andrew: Stress level.
Bill: It depends on the day. Like it does with most entrepreneurs, right? I had a very stressful May, we closed the biggest acquisition we’ve ever done in May. And it was a it was a roller coaster of a deal. But we got it closed and it was awesome.
Andrew: We have to do, we should do a different episode on that one, man. It’s, you’ve got some good stories from that.
Bill: Yes. I would be glad to tell stories about that. It was a company that was on the edge of bankruptcy, so there was brinkmanship in the negotiation, I mean, there was all kinds of stuff. And so May was very stressful but, you know, lately, you know, I’ve been lucky enough to have some vacation lately, and, you know, we’re kind of hitting our numbers and we’re kind of on the coasting, not coasting but we’re on the low side of the roller-coaster where there’s no stress. And I’m sure it will get stressful again soon in holiday, you know, like any entrepreneur.
An Average Workweek
Andrew: Maybe not directly related to stress, but work level. Like are you working regularly four hours, forty-hour weeks, are you doing eighty-hour weeks? What’s your work, you know, the amount of time you’re spending in the office physically?
Bill: So, actually one of our core values is be the place that people want to work, wanna come to work. And a big part of that is balance and work-life balance…
Andrew: And ping pong tables, of course.
Bill: No, no ping pong tables. But we do have a patio with artificial grass, and hammocks and stuff, which is fun.
Andrew: Very nice.
Bill: But balance is important to me personally. So I work pretty much, you know, 9:00 to 6:00, 9:00 to 6:30, five days a week. You know, pretty normal “corporate” level of work. I’ve been trying to get in a little bit earlier but the earlier I get in, you know, then I’ll kind of shift it forward and try to go to the gym in the afternoon or something. And my employees work, you know, roughly the same schedule, you know, kind of your standard eight-hour workday.
And it’s important to me that we stick to that because if you squeeze more out of people or yourself, you will burn out. I know that from investment banking. So my goal is to create a place where we can retain people sustainably. And I think, you know, a normal amount of work is key to that.
Andrew: And then finally, health levels.
Bill: I could probably go to the gym a few more times a week, to be quite honest. But, yeah, it’s a goal of mine. You know, as I said, I’m engaged. So of course, we’re on “Operation Wedding Diet.” And my Director of Finance and Ops, he goes to one of these fitness concepts here that’s around the corner. He’s pressuring me to start going with him. I think I’m gonna take him up on it. So yeah, I got a little bit of work to do in that regard, but, you know, I’ll let myself off the hook because it’s been a busy summer.
The Next 12 Months
Andrew: Nice. And finally, wrapping up, man, if we do this in a year from now, what are the goals that you have, where do you gonna be in 12 months?
Bill: I hope we will be twice as big, again, as is our pattern, I hope we will not be twice as many people because eventually we’ve got to scale this thing, of the people that we do have. And yeah, I hope we’ll have done several additional acquisitions and, you know, just kind of keep on chugging along. I mean, I don’t think we need to do anything more transformative strategically. We just need to continue to execute.
Andrew: Love it. Bill, I was planning on trying to get in some of the acquisitions here, but we got into some other good stuff and didn’t wanna shortchange that. So yeah, we’ll have to do another one where we talk about some of your acquisitions, some of the stories, the war stories from there. Maybe, you know, talk about some heuristics that you used to acquire the company. I have zero experience with that, so we’d love to just, you know, mine your information there. But it’s so good to have you back on, excited to be doing this more regularly. And yeah, thanks for sharing, buddy.
Bill: Yeah, man, of course. I would love to do the acquisition. I’ve done, you know, five now and, you know, looked at hundreds. So there are there are plenty of both heuristics but also funny stories from actual executions. So we need to do a whole episode on that. I’ll fine.
Andrew: We can do one of each. The practical episode for acquiring companies and just the, you know, grab a drink and hear some war stories. It’d be fun to do both.
Bill: Oh, yeah.
Andrew: Awesome. Hey, thanks, Bill. Good chatting, man.
Bill: Of course, it’s good to be back.
Andrew: Want to connect with and learn from other proven eCommerce entrepreneurs? Join us in the eCommerce Fuel private community. It’s our tight-knit vetted group for store owners with at least a quarter million dollars in annual sales. You can learn more and apply for membership at ecommercefuel.com Thanks so much for listening, and I’m looking forward to seeing you again next time.