Radical Financial Honesty: Sharing the P&L with Your Team

Today we’ve got Lee Cook and Jake Cook on the show, the cofounders of Tadpull, as well as one of their leadership team members, Hannah Jerome, talking about how they operate an open company, specifically how they share all of their financials with their team members, which is a pretty radical thing to do.

You’ll learn:

  • How transparency has helped them create a world-class team
  • The way employees react when the financials don’t look good
  • The value in having employees use self-assessment for bonuses

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(With your host Andrew Youderian of eCommerceFuel.com and Lee Cook, Jake Cook, and Hannah Jerome of Tadpull.com)

Andrew: Welcome to “The eCommerceFuel Podcast,” the show dedicated to helping seven-figure-plus store owners build incredible businesses and amazing lives. I’m your host, Andrew Youderian, and excited about today’s episode.

I’ve got some good friends on the show, friends of mine from the business, Tadpull, which is right down the street from me here in Bozeman, Montana. Literally, it’s like four blocks away. It’s pretty cool. You know, to record this episode, I hopped out of my office, walked down and was in their office in like four minutes.

I’m chatting with Lee Cook and Jake Cook. They are the cofounders of Tadpull, as well as one of their leadership team members, Hannah Jerome, talking about open companies, specifically how they share all of their financials, or at least the key financial results of their business including net income, with their team members, which is a pretty radical thing to do.

We had a discussion in the private forum about if people did this, a while back. I’ll link up to it in the show notes. And the overwhelming response from people was, “Don’t do it. This is a bad idea.”

But at Tadpull, they’ve really embraced a unique way of looking at this in a way that it’s had great results on their business, and they continue to do it. So, I wanted to dig into that with them and not only learn about it from the owner’s perspective, but also learn about it from one of the leadership member’s, team member’s perspective on the other side of the aisle, to get a sense for how it impacted their motivations, and their thoughts, and their buy into the business.

So, we’re gonna talk to both sides of the aisle, which is a cool way to look at it. You get both perspectives here.

So, hope you enjoy it. I had a lot of fun with this, and I think you’ll get some, if nothing else, it’s a fascinating perspective into a company, and best case scenario, you could come up with a strategy to really be able to increase the buy in and the cohesion of your team at your store.

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I’m gonna set the stage here. We’re sitting around a table in this wonderfully upholstered…what would you call it? Like, a booth? Very classy, Denise-style, very classy, both that, Jake, you’ve reupholstered, right?

Jake: Yeah, personally, the only thing I’ll ever do, upholstery.

Andrew: We talked about transparent companies, because I think you and I were having lunch, and you casually mentioned that you and Lee run a very transparent company, showing, you know, P&L to your employees. And I didn’t catch it for a minute, we talked for about three seconds and then something snagged in my brain, and I was like, “Wait, what…You do what?”

So, yeah, I really wanted to dig in to that because it’s very unique and very interesting, so thanks for willing to talk about it.

Jake: Absolutely.

Deciding to Be a Transparent Company

Andrew: But why did you decide to do it? What made you guys, before, you know, what lead to you guys’ to start and actually make that happen?

Jake: So, our core value when we first started the company was around a couple of different things. One was a lot of empathy or user-driven insights, and we felt like employees should also be lumped under that as well. So, what’s it like to work with Tadpull?

And we always try and say “work with” not “for.” It’s a subtle thing, but we really look at everybody like a teammate, not like employees, necessarily, but that we’re all working on this together.

And so when we looked at open book, you know, I’d read a book called “The Great Game of Business,” by Jack Stack. He’d worked with a lot of really blue collar workers and they’d resisted unionizing based on this idea of opening up the books, where the people that did the work could share the fruits of the labor, which seems like a very, you know, common sense approach, right?

They outperformed competitors, they just crushed it. They opened up of all sorts of different lines of business as a result, and they credit a lot of it was open book.

When you teach people the financials and the language of business, they know what the score is. And if they know what the score is and they’re on a team, then they’re more likely to all line up and plow down the field together. And so that was our idea of, “Hey, let’s open things up and show the financials,” as bleak and dark as they were in the early days.

Andrew: Were they bleak and dark in the early days?

Jake: Oh, were they bleak and dark?

Andrew: Really?

Jake: And it then also I think helps, hopefully with transparency, it builds that trust, and so they understand that, “Okay, this is the score currently, and it’s a, you know, it’s a moment in time.” But by doing that, everybody can understand where the money goes. You see an invoice go out, “Well, where is it all going?” any of that, you know, just something as simple as taxes, which is a lot, or offering benefits and salaries, you know, it adds up to a lot, and so you’ve got to profit to invest down the road for our future.

It’s helpful to help them to see what the score is and what that looks like.

What Tadpull Shares With Employees

Andrew: Lee, can you talk about exactly what you share? Do you share individual salaries? Do you share, you know, lamb or line expenses for rent and insurance and things like that? What do you share with your team members?

Lee: Yeah, I think we generally just share basically, big buckets, where all the salaries are rolled into one big number and so everybody sees that’s the salary, that’s what we pay people. And then there’s a few other categories around, you know, this is our tax burden, this is, you know, just office utilities, rent, all that kind of stuff. And so it’s all just rolled up into big buckets, basically. Just really helping people understand that, you know, health insurance, 401K, all those things, those all fall under that salary bucket.

And so just seeing that it’s the pie chart, and where it’s broken out, as Jake mentioned, just, you know, some of the tax burden. And so when everybody can sit down and look at it from that standpoint and see what the daily and monthly burn rate is, and they’re like, “Wow, okay, I work on this client and that invoice is X, but that’s three days around here,” it doesn’t go very far by the time you take out taxes and all those things.

And so I think it does help people get a little bit more of a realistic perspective of what it costs to actually run a business, and then also just keep the lights on.

Where Net Income Goes

Andrew: Yeah. And you guys actually have some rules for what percentage of your net income, because your team members can all see net income even though it’s, you know, after those bucket expenses are taken out. What percentage of your net income goes to different things, right?

Lee: Yeah. Yeah, exactly. And so we generally try to save about 20% out of each check that we deposit and just look at it, Jake and I both came out of undergrad around 2001 when we went through the first recession, and then we had a different startup back in, you know, we started in the late 2006, and so 2008 was another hard time when the recession hit.

So, we’ve seen things go south and so we always try to run pretty conservatively. And so we save 15% for a rainy day fund out of every check, and then we put five percent toward marketing. So, those accounts are just, we’re just trying to protect ourselves from anything catastrophic.

And then we also look at, basically, what’s left over, how much we reinvest for research and development, and just try to, you know, in e-commerce and digital marketing, you’re constantly having to innovate and create new things, and so there is some cost with, you know, data science and engineering, programming to develop the next, you know, round of software innovation. And so seeing where all the money goes, is I think really helpful and eye opening for our team.

Tying Compensation to Goals

Andrew: And Jake, you were saying that when you set this up, you know, a big part of open book is tying compensation to certain goal posts and milestones. Talk a little bit about it if you would, and then specifically if you could give some examples of what type of, you know, because that’s the hardest…it’s so hard to do when you’re setting up compliments, if it’s tied to just gross revenue, if it’s tied to profitability, if it’s tied to a certain return on ad spend, whatever it is.

Jake: Yeah, you know, sales is very straightforward. A car sales person, you might give him a base and then they get a chunk for commission or whatever. These are marketers, or an engineer, how do you reward them that way? And so Hannah can speak about this in a second, because she’s really taken this way beyond what we could have probably originally envisioned.

But we tried to tie, you know, everything was topline revenue and profitability. And then, you know, it’s up to 15% of your gross salary so you might wanna make it substantial. It’s real money, but it’s really contingent on this person performing too, so the idea of just showing up at Tadpull and I just get to hang out and wait the line doesn’t really work.

You’ve got to be able to produce value. And so, you know, five for topline, five for profitability, and five percent for personal growth or how you are doing. We’ve since refined that a little bit this next generation.

Another core value is everything’s a prototype around here, so we always are looking and changing processes and workflows. And I think it’s a really key thing in tech because you should always…you know, thing is really done. You should just, you know, “Hey, we’re gonna try it, we’re gonna test it and then we’ll iterate off of that.” So, the same thing we do for our clients, we’re trying to do it with some of our staff internally.

Andrew: So, five percent revenue is pretty straightforward, five percent bottom line is pretty straightforward. That five percent on the personal individual, is it just a subjective issue from you as a manager to say, “Hey, here’s where you are on that?” and kind of…

Jake: It was. We’ve tried to since tighten that up a little bit more. And one thing I’m still on Hannah’s thunder here a little bit, she did a great job of putting together some employee surveys. So, they’ll go through and self-assess. And one thing I learned from teaching college students was I always have them grade themselves and then you give them a grade, and then you see if there’s a massive discrepancy between them.

Then that way, it’s not like, “Well, you know, my boss didn’t like me,” or, “My professor didn’t like me,” it’s like, “Well, we’ll have a discussion here across these dimensions on how you did.”

So, we’ve since gone to that, and then diving into a promoter score to say, “Hey, how likely are you to recommend working at Tadpull to a friend?”

Self-Assessment Surveys

Andrew: Cool. Hannah, can you talk about that just quickly? Because you set that up right, that whole survey. So, how does that work? It goes out quarterly to everyone on the team? And what does it ask? And net promoter score, I think most people are familiar with that, but is it just that or is it more in-depth than that?

Hannah: Yeah, absolutely. So, our team members all fill out this quarterly questionnaire. We have a variety of questions that basically ask them around personal growth in the core areas of their position, so we have these areas we look at like technical expertise, creativity and strategy, obviously, work in digital marketing, that’s a key component of the job, project management or client services.

And in each core area, we’re asking them to weigh in and really reflect on their own personal growth before they give us that final score. So, “What do you think you achieved this quarter?” and then we can sit down with them as a leadership team and discuss it. And it’s been really eye-opening, actually.

We’ve got some great comments from the employees, even some things that we could look at changing a little bit on the bonus structure itself. To Jake’s point, that has been a prototype.

We’ve certainly refined that over time. But really giving them an opportunity to put their own mark on it and to say, you know, “I feel like I achieved this because I really grew in this area, or I was able to achieve this for clients.” It’s a great basis for those conversations.

Compensations Based on Conversations

Andrew: So, does it serve more to help you get a sense of if there’s a big disconnect, you need to talk about, or do you actually compensate based on what they say in the survey?

Hannah: That’s a great question. It’s a little bit of both. We’re always noting areas of growth and areas of improvement too, for each team member. But actually, those conversations have really helped drive the actual, you know, cash bonus at the end of that quarter. One key change we made this year is to say okay, we’re gonna have personal bonuses that are very much tied to your personal performance, and we’re also gonna have profit-share bonuses.

And that’s where, to Jake’s point earlier, as we look at sales and profitability and those margins, if we’re performing well as a company, we wanna give back out, but we also really wanna mark that personal achievement.

The Pros of Operating Like This

Andrew: You’ve been doing it for four years, I believe. Maybe get into a little bit of how it’s worked out, so in terms of, maybe we’ll start with the good, so maybe Jake, really you guys can dive into that. But what have you guys seen in terms of the good from rolling this out?

Jake: I would say, you know, we’ve got to get Hannah’s take here as well, as our first hire. Hopefully, people would say it helped build a lot of trust. I think there’s always a lot of suspicion, hiding back the car marks, right? “The man has stood me down…”

Andrew: Early before that.

Jake: Early before that. He did, and went and clarified it into a theory. But…

Andrew: The Egyptians are considered that.

Jake: And hopefully, nobody feels like they’re maybe enslave here, where we’re lashing them to build a bigger pyramid.

Andrew: That wasn’t the comparison I was going for. Sorry if it got across that way.

Jake: But, no. I think this idea, you know, of management or owners, co-founders, making tons of money…and I don’t think you realize quite till you get, at least, I felt that way when I worked at other companies, was you don’t realize all the other variables that are, you know, they’re trying to put money back in so that you have a compelling product line in two years.

I worked for a software startup where the CEO was in Europe doing consulting, and we’d have big deals with big pharma and he couldn’t make it. And I remember on my exit interview I was like, you know, “What happened?” or, you know, it just didn’t make sense to me, and he said, “I had to go take that gig for payroll, it wasn’t like I wanted to be there.” And I was like, “Oh, my Gosh, I had no idea you’re operating on some of these variables.”

Andrew: Like, he needed to make the money to keep the company afloat in a second job?

Jake: Well, no, he was, instead of, you know, working on the company, he was having to work in it periodically.

Andrew: I see, okay.

Building a Culture of Entrepreneurship

Jake: I might just work on it and hoping to build this brand for the software thing. I mean, I was sitting there just feeling like, “Oh, my Gosh, that makes a lot more sense to me now.” Had I known some of the things, I think I might have stuck around longer, because I could have seen like, oh, well I’m not getting support because of these other things that he has to optimize for, but down the road as we grow we’ll be able to do that. So, hopefully, there’s trust. That’s the first thing.

Second is we’re trying to build a culture of entrepreneurship, you know, around…when we work with some of our clients where they don’t do open book and the financials are off the skated, you know, it almost comes from they don’t really think about how to make more money or be more profitable, or really be effective in their building product online.

We want everyone on this side of the table to think that way, because that’s how we win when we get in front of a C -Suite with a CEO or a CFO, is we’ll talk to those bottom line numbers, and that resonates. So, we want them to be thinking that as well.

And I think one of the best ways is if you don’t wanna go do a startup, join one where you get to actually pretend like you’re an entrepreneur, in a sense, without having taken all the risk of, you know, putting your house up for collateral. So, you can still have, you know, deep your toe in the water without taking on all the risk.

Hopefully, the employees feel that way as well, or just like us if we’re smart, identify market opportunities and most importantly, take care of our clients, where you can harvest on the other end and pay as well.

Lee: The other opportunity that we’ve tried to express and tried to help our team see, is really that if there’s a project, a type of project they really love to work on, great, let’s try to sell more of those. Let’s identify opportunities to help other clients in a similar capacity. And so really trying to help them see that, “Oh, wow. I can really leverage my skills and help build the company by identifying these areas where I can, you know, if I wanna specialize over here, I can try to do that.”

And so trying to create those opportunities. And, you know, back to Jake’s point of just, you know, really fostering that entrepreneurial mindset so that people are thinking about it from a numbers standpoint of like, is this gonna move the needle? Is this gonna help, you know, improve the bottom line? Because if that’s what they have to think about at Tadpull, hopefully, that’s gonna instill that so they’ll think about it for our clients as well.

And I think it starts here and then goes out.

An Employee’s Perspective

Andrew: Hannah, as a first hire when this rolled out, when you saw that first, you know, P&L, what stood out to you and surprised you about that?

Hannah: Yeah, honestly, it was pretty shocking. It’s changed a lot as well, since that first quarter, as you can imagine. But, yeah, we really weren’t bringing in that much in that first year, and so just realizing like, okay, well, I maybe have more student loan debt than we have in our bank right now, right?

And that was just a reality, but it also gave me a tremendous respect for Jake and Lee, and the risk that they were willing to take on very early on. You know, we started out in their basement, and we’ve certainly grown a lot since then, and the company’s changed a lot since then.

But just, yeah, seeing those numbers initially, it was like, “Okay, I’m making an investment here, right? I’m investing because I believe in this, and they’re sharing this information with me because they believe in me and they think we can do this together.” So, it really changed the game upfront.

Andrew: So, did the company make less money than you would have guessed if someone had said, “Hey, how much do you think Tadpull’s making?” that bottom line number, was that less?

Hannah: Definitely, initially. I think that trajectory has probably changed as we have grown. You know, what at an employee, a new employee now would say versus what I would have said that first year.

Andrew: Right, and not to say that to knock on Tadpull, but more of just like there’s a ton, even businesses that run fairly leanly…like I try to think that I run my business fairly leanly. But there’s months where I look at the bottom line and I’m like, “What? Where did everything…?” and I have to go back to the P&L and add everything, and I’m the owner, right? So…

Hannah: Yeah.

Andrew: Yeah. I mean, as someone who’s a team member did that, how did that change any of the way you thought about the business or your compensation in terms of feeling like you were…Did it change any of the mentality behind being on the team and the financial aspects of being a part of Tadpull for you?

Vested Employees from the Beginning

Hannah: Yeah, definitely. I mean, I think a lot of it for me, I mean, if the founders were eating beans and rice, I was gonna eat beans and rice, right? I felt vested from the beginning, and I do think the open book piece had a lot to do with that. You know, I knew that we weren’t making much on some of our initial deals, and so just realizing that, okay, I don’t really have the right to a big compensation right now, like that’s not even an option for them, so why would it be for me?

It just gives you a real, I guess, appreciation for that early time in a startup, and just realizing like, okay, I can help us get there by really being smart with my time and by figuring out how to really bring these clients value, we can reap the rewards as a team and grow as a team.

Andrew: Jake, we will switch over to you and talk about a lot of good stuff, obviously, so you can hear from Hannah but I’m guessing there’s been some, maybe some rough patches like any good thing that you roll out, anything bad that has come about, awkward conversations? Maybe you guys have a quarter that’s rough and everyone’s just like, “Oh, my goodness, we’re gonna lose our jobs?” Has there been any downsides to this, or what have been the downsides to it?

How to Handle The Rough Patches

Jake: Yeah, I think…some people, I mean, there are some folks that have gone in, you know, with Glassdoor, and getting back to transparency, you might as well just open it up, because people can probably, you know, reverse engineer it a little bit or they’ll go on Glassdoor and find out what’s some of these we’re at.

You know, I had this great question to Peter Thiel, the founder of PayPal used to ask was, “What’s your unfair hiring advantage?” And he asked SpaceX that, because SpaceX was getting Cal Tech, PhD, rocket scientists to work at SpaceX for $75,000 a year, and the reason was they could go through more launches. You know, NASA is not launching rockets anymore, SpaceX is.

Andrew: Well, SpaceX, starting are like if you watch those launch videos that they do, people just go ballistic. It’s like a full-on frat party back there.

Jake: Right.

Andrew: You know, like when the thing lands, people are, you almost expect…it’s just, people seem super vested in the company.

Jake: Exactly. So, taking that as inspiration where, you know, some folks say I, you know, entry level if I move to Austin, or the Bay Area, I could make this. And we try to be pretty honest, like, “You’re right, you can, and we probably can’t compete and match. If that’s what you’re optimizing for as your topline revenue, yeah, for sure. You can see what the numbers look like on our end, so hopefully, you feel like we’re being truthful and transparent with you, you know, that this is what we can afford to do.”

And I think, you know, everyone says they want A players, but you want the best your business model can afford. And we’re not gonna outcompete a Facebook or a Google, I bet students go work in those places. It’s fantastic. I mean, you know, the benefits obviously are incredible. We won’t be able to compare for gross forever, that stuff.

Unfair Hiring Advantages

Andrew: So, you’re talking about, you know, that unfair hiring advantage. Are you saying one of your unfair hiring advantages is that you are really open and transparent, and people can peek under the hood in ways they can’t at other companies?

Jake: We hope so. Exactly, yeah. And when you join Tadpull, you’re signing up to be on a team of really nice, really smart, really curious, motivated people, and so you’re coming in to work every day to work alongside people that are gonna be working just as hard as you, united around, hopefully, the same mission.

You see an opportunity where you can grow your skills, and you get to go through a lot of, you know, i.e. rocket launches as well, because you’re working with some really great brands like Jackson Hole Resort, or Caterpillar, or Mystery Ranch Backpacks. So, you’re seeing things at a big global scale, and you get a really, get exposure to a lot of really, hopefully, cutting edge technology and trends in ecom.

Andrew: Lee, have you ever seen anything? I mean, you’ve got two thirds of the bonus, sounds like yours is topline and bottom line, and one third as personal. Have you ever had any instances where you’ve had somebody, especially given, you’re being so transparent, you’ve got someone who maybe isn’t contributing quite as much as some of your top team members, and it causes resentment because they think like, “Hey, we’re busting it really this topline and bottom line, a lot of it is coming from us, but this other person is just running our coattails to this nice bonus.”

Has that been an issue, or is that something where people just don’t last for long in the company if that’s the case?

Lee: I think that’s more true. I think our culture is such that, you know, people really do produce, and if they’re not, they feel it and they’ll self-select out. We haven’t had too much of that, but definitely, I think we try to be really careful in our hiring practices to make sure that it’s a really good fit. We go through a pretty long, you know, interview process, we do some test projects, and then we, you know… And so it doesn’t happen too often, but I would say they generally self-select out.

So, we haven’t had that come up before. I think whenever there is an opportunity where one of our team mates will come to us and say, “You know, I don’t understand this,” it’s generally just a really good, candid conversation with them about, “Okay, these are all the factors that we’re looking at, these are all the things we’re optimizing for, this is the tax burden, this is our burn rate, you know, help us understand your view of things.” And so it really helps to realign and, you know, I think it helps them see in a lot of ways, and is just an opportunity to reeducate.

Because sometimes, you know, if a couple of months have gone by and we haven’t looked at the financials very closely and bonuses come up and other things, I think that, you know, people just get weird perceptions and sometimes it’s just like, “Oh, yeah, I thought everybody got this,” but it’s just revisiting some of those topics to really make sure that we’re all pulling on the same end of the rope.

Andrew: Have you guys ever had any instances where you’ve had just a blowout quarter, or a blowout year, making a ton of money, and it’s awkward to share with your team? I mean, you do have the profit share, but have you had that where, you know, it’s just a really good year and you almost, not that you should feel bad, but, you know, you do? Does that make ever awkward, or not really? Because that would be one of the hard…I mean, that’s the other side of this, too, right? Like, you’re still doing a profit share, but I could see that being potentially an issue, or maybe not.

“Only The Paranoid Survive”

Jake: You know, to-date, it really hasn’t been. You know, it’s weird, because as an entrepreneur, when you started, you can have that scarcity, especially when you scratch it from nothing, you have the scarcity mindset, like well, it’s mine, I got all the clothes and cash is what I would make if I was working in the industry, blah, blah, blah, right? And, you know, I’m guilty of thinking that way too sometimes, for sure.

But when you start to watch, I think, someone like Hannah come out and in five years what she can do, you’re so grateful for someone to be right there in the trenches with you. And as you add more people to the team, they’re right there fighting alongside you and helping to build something, it becomes, it’s just like, “Oh, yeah. We’ve got to take care of these people.”

And not only that, like just from a pure competitive perspective, if we spent all the time training, and educating, and getting them thinking about our method and how we grew these results, and then they leave because of comp, like, “Oh, my Gosh.” So, I think our job, for Lee and I, is to really paint the vision, “Here’s where we’re going, here’s we’re gonna do a software. Here’s what we can be helping small teams use data to market better online, and we just need really smart people helping us do that.”

To-date, it hasn’t been. But I also think that Andy Grove quote, you know, “Only the paranoid survive,” so you’re always thinking like, “I got to keep a lot of cash on hand,” and, you know.

Hannah: Just to quick note there, too. There’s a reason that our biggest profit-share bonuses come in the fourth quarter. We ask our people to put in a lot of extra time and a lot of effort through the holidays. And certainly, most of our clients, similar to “eCommerceFuel Podcast,” they are in ecommerce. Everybody knows that a big chunk of the sales come in through September all the way through January, and so it can be hard.

And just in general, there’s a lot of bumps on the road in the startup, and there’s a lot of things that you’re asking your team to do. And when you’re hiring young people and you’re putting them in these positions of just really taking them out of their comfort zone constantly, you really have to have a big carrot too, and you have to say, “Look, there is a light at the end of the tunnel here.”

Another great thing we do is we take a week off between Christmas and New Year’s, just because everyone, we feel like really earns that. So, that’s outside of just typical vacation time so we can all say, “Okay, cool. We got a profit-share bonus if we did well and we really worked hard. Everyone take a week off and let’s start fresh in January.”

How They Kept Their Superstar Employee

Andrew: Yeah. Hannah, one question. I’m backtracking a few questions here, but Jake alluded to when you guys were working and starting the company, working out of a basement. Lee, I think you came on a little bit later, because you were working, and then came in shortly thereafter. I mean, they’ve said very glowing things about you’re, obviously, a super important of the team here, coming out of school, what made you stick with it for five years when you could have gone somewhere else?

How much of it was tied to the fact that they were really open and transparent with the model? And how much was some other part of, potentially, the motivation that kept you with the company?

Hannah: Yeah, that’s a great question. Gosh, you’re gonna make me tear up here, Andrew. You know, I think that a lot of it is the people, it always was for me. And so I knew that I could learn a lot from working with Jake and Lee, and honestly, coming out of school and I had had a couple of stints with some bigger companies, and just realized, you know, I wanna work at a place that my efforts can be tied directly back to sales.

I can actually see that work have a ripple effect, and I can learn, and I can grow and be exposed to some really cool people, and some really cool projects.

I guess for me, when times got tough, my relationships with the team really held me in there. And from an open book stand point, that helps when times got tough with clients, or if we had a tough project or things like that. It was like, you know, we really need this for cash, and so I’m just really gonna try to do a really great job and deliver an exceptional experience, even if I feel like maybe it’s not a great fit for the company.

Lee: I just wanna layer on the fact that Hannah had interned at Boeing the summer prior to graduating, and so she picked to take her chances on a startup and not retreat back to Boeing where there was a lot more security and a lot bigger paychecks. So, it’s easy to testament to her constitution. The fact that she was willing to put with so much and really believe and keep believing. And frankly, a lot of times, she made us believe. So, she is a keepie to the team.

Final Thoughts on the Open Model

Andrew: That’s cool. Lee, to wrap up here, final thoughts on the open, for good or for bad, the open model of, you know, being transparent with team members about finances?

Lee: You know, I would say, you know, for anybody considering it out there, don’t listen to your accountant, don’t listen to your bookkeeper, they will tell you, “Absolutely, do not do this.” And so, I think it does have to be something that you’re really committed to. I think transparency has to be, you know, part of your DNA as a company and as a culture to really see it all the way through.

I think it can provoke some really good conversations, but you have to frame it up that way, not everything is presented as just, “Oh, this is an opportunity to educate again.” You know, it’s more like a criticism.

And sometimes it feels like that, and so I think you just really have to be prepared to have those conversations and be excited to take it on, and really help people understand and instill just that entrepreneurial mindset.

Tadpull’s Software

Andrew: You guys have a software product, a very cool software product. Can you talk about that a little bit?

Jake: Sure. So, we help, you know, eCommerce companies, $5 million to $50 million range, there’s so much data they’re dealing with every day. And, you know, we looked at the tools like Amazon has and they go, why don’t the small guys have this? And so we’ve been on a mission the last two years to help them understand who their most profitable customers are, what marketing campaign they came from, and then help them look at a granular level like, you know, how’s my SEO performing?

How’s my paid media performing? And help plan campaigns across these different channels and then, you know, major the bottom into that for time, value and stuff.

So, it’s been fun. We’ve been very blessed with some wonderful early beta clients like Code & Co in Santa Barbara, Mystery Ranch Backpacks, Jackson Hole Resort. They believed in the vaporware as we got going, which was just…it was this ugly, back at prototypes.

Andrew: ….to look like it was coded, but you guys were all furiously running calculators in the back?

Jake: I literally coded the first demo off of a theme that I got online, which I had no business doing. But that’s been a lot of fun. I think, you know, we look at ways we can help some of these small companies that have maybe one or two people in-house, maybe teams of five at the most, and there’s just so much of them to get done in addition to doing trade show boosts and a print catalog, or whatever. So, have them level up and then use the software, then hopefully, the services side, and educate them as we go forward.

Andrew: So, is it fair to say like…because it sounds like, you know, if you’re not super familiar with it, you could just say, “Well, that sounds like Google Analytics,” but the advantages over Google Analytics, would it be fair to say a) It helps you plan out and execute those market campaigns within the software, and then b) It will give you access to a lot of data that Google Analytics won’t?

For example, like in our discussions, you’ve mentioned it will pull in perhaps your margins on different products and account for those. Google Analytics, it’s gonna be difficult if not impossible to pull those in, so stuff like that.

Jake: Yeah, we always say, you know, the base, the foundation, is Google Analytics. But, you know, if you’re having a really high bounce rate on a page, or you’re inventory’s out and you’re running paid against, Google Analytics doesn’t alert you. So, we call it a ribbit, playing off the iteration of a tadpole, amphibian animal. But like, you know, the right data at the right time in your face can be really valuable. Like wow, this campaign is really expensive and we’re not converting very well.

Well, if your agency or you, don’t go in and check that for 90 days, like you can blow through a lot of money at scale. And so just like pushing that forward based on these different bands, and then using the data science to predict, “Hey, this customer actually isn’t that valuable because they buy a lot and they return a lot,” which, you know, GA doesn’t report back on that very efficiently.

So, when you know at a one-to-one level who your customers are and what’s working for acquiring your best customers at the right moment, we think there’s a huge opportunity for midmarket companies.

Andrew: Very cool, and that’s Tadpull, Tad, pull with a U-, P-U-L-L.com, right?

Jake: Right. Yeah. Yeah.

Andrew: So, you can check out the software there. And then, Lee, you guys are hiring a couple of roles in the near future. Anyone listening that fit those can talk about those for a good fit?

Lee: Yeah, definitely. I think as we look to scaling grow this software, we are definitely looking to find some sales people that can help us in that process. And then beyond that, we are looking for talented digital marketers to help interface with our clients and help support people as they onboard and use the software.

Andrew: Cool. So, we’ll link up to both of those, the Tadpull software as well as the job description on the you guys’ site, or we can put them on the job board, but we’ll get those linked up.

So, guys, it’s been fun. Before we wrap up, I’d love to do, if you’re up for it, a quick lightening round.

The Lightning Round!

Jake: Please.

Andrew: Yeah, and so I’ll just go…we’ll go round robin here, so, Jake, you got the mic, so we’ll start with you and then we’ll just go around, and then the last one we’ll have you guys all chime in on. Jake, what’s something you’ve changed your mind about recently?

Jake: The importance of constraints for managing your time and your health.

Andrew: Is there something in particular that made you think about that?

Jake: I’m not that great at working out in the gym, and then I think there’s times I’m probably not the most efficient managing my time, so I’m trying to get little bit better at that.

Andrew: Hannah, what are you currently spending too much money on?

Hannah: My dog. Definitely, my dog. And that is the perpetual answer to that.

Andrew: Lee, what’s something you’re not spending enough money on right now?

Lee: I would say recreational travel is something we’re not spending enough money on lately.

Andrew: It’s just mostly business travel?

Lee: Yeah, we travel plenty, and it’s really fun. And it can feel recreational at times, but it’s definitely for work.

Andrew: Jake, let’s go back to you. What’s one of the top three items on your bucket list?

Jake: Living in a van, down by the river. I think that would be band life, which is interesting. And we’ve talked about this before, I’m very jealous of the fact that you guys have a van. So yeah, that’s super-efficient doing that.

Andrew: Very cool. And then we’ll still do this question over the last two all the way around, so, Hannah, top three, or one of the items on your bucket list?

Hannah: I would really like to charter a little boat and sail around the Mediterranean.

Andrew: Cool.

Hannah: So, I probably will be able to do that at some point.

Lee: I wanna watch the Olympic swimming events some year. I’m not sure where, but I’m gonna do that.

Andrew: Because both you and Jake are high school/college swimmers, right?

Lee: Yeah, we were high school and collegiate swimmers. So yeah, I just think it’s one of the coolest things that rolls around every four years.

Jake: For the record, we don’t wear Speedos anymore, just in case you’re asking questions about that.

Andrew: And the last question, if you had to get a tattoo on your arm right here, you know, where everyone’s gonna see it almost every day, what would it say, or what would it be?

Jake: Okay, so mine would be, “All things must pass,” which is my favorite George Harrison album.

Andrew: We’re getting shocked looks.

Lee: Yeah. Oh, my goodness, it’s a really hard question.

Andrew: Yeah, this one wasn’t on the list.

Lee: No, no, it was not. No. I think, “Never give up,” I think in a startup, and in life in general. That “Never give up” mentality has to kick in.

Hannah: Yeah, I would say something around the lines of live fully, just living fully where you’re at. Yeah, that would apply to start ups and a lot of other things.

Andrew: Well, Lee, Jake, Hannah, thank you, guys. Thanks for your patience too, with the technical issues I had working like a novice first time podcaster here.

Hannah: No problem.

Andrew: Batteries went out about four minutes into the interview, and I didn’t notice until about 30 minutes later. It’s amazing these guys didn’t just stand up and leave. But it’s so cool to see how you guys run your company, and it’s good to have you guys right down the street in Bozeman. It’s awesome having you as neighbors, so thanks for being able to come on and talk.

Jake: Thanks for all you do for the community too. eCommerceFuel, both the podcast and the forums are fantastic. So, it’s wonderful to have a place for all of us can go online to check in and see what other people are working with, so thanks for leading the charge.

Andrew: Yeah, of course, thanks. And you guys are gonna be, Lee and Jake, you guys are gonna be in New Orleans. So, if you’re in the community and you’re gonna to be at ECF Live, make sure you track these guys down, they’re awesome.

Jake: I wouldn’t miss it. It’s gonna be an awesome event.

Andrew: Yeah, thanks a lot.

Jake: Awesome. Thanks, Andrew.

Andrew: That’s gonna do it for this week, but a few important things to know about, especially if you’re a store owner, before you go. First, if you’re looking to hire for your eCommerce business, make sure to check out the eCommerceFuel job boards. We’ll get your job in front of thousands of qualified job seekers to find you the perfect candidate.

And if you’re looking for work, you should check out the dozens of handpicked opportunities along with lots of other roles that pop up every week at ecommercefuel.com/jobs.

If you’re an established store owner, you absolutely should be a member of our private community for seven-figure-plus store owners. You get access to a discussion forum with over 1,000 vetted, experienced ecommerce entrepreneurs, invitations to our in-person member-only events, and access to our private review directory with over 5,000 software and service provider reviews.

If that sounds interesting, you can learn more and apply for membership at ecommercefuel.com/forum. That’s F-O-R-U-M.

And a big, big “Thank you” to the two sponsors who make the show possible. First to Klaviyo, who makes email marketing automation incredibly easy and powerful. If you’re not using them for your store, you’re leaving money on the table. You can get started for free at ecommercefuel.com/klaviyo.

And then secondly, to Liquid Web, the absolute best place to host your WooCommerce store anywhere online. If you want a rock-solid store that can scale with you when you need it to, check them out at ecommercefuel.com/liquidweb. Thanks so much for listening. I’m looking forward to seeing you again next Friday.

Want to connect with and learn from other proven eCommerce entrepreneurs? Join us in the eCommerceFuel private community. It’s our tight-knit, vetted group for store owners with at least a million of a 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.

 

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