Zak Dabbas is the Founder and CEO of a very successful mobile agency called PunchKick Interactive. Currently ranked 959 on the Inc. 5000 list, they are on track this year to earn $8M.
PunchKick currently has 70 employees, is very profitable, and has most amazing and transparent culture you have ever heard of.
In this interview, you will learn how PunchKick Interactive got started and how they chose their niche. Are you looking for ideas on how to build a multi-million dollar company? Get your pen and paper ready to take pages of notes to capture the brilliant ideas shared in this interview.
Listen now and you’ll hear Zak and I talk about:
- (04:00) Introductions
- (05:00) How did you get started?
- (08:00) What did it mean for you to focus on mobile?
- (10:20) How did you target your customers?
- (16:00) How did you attract the talent to your team?
- (17:30) What is whisper talent?
- (21:40) What advice would you give to younger agencies?
- (26:00) How has transparency really helped your business?
- (31:30) What is the PunchKick Growth team?
- (34:00) How do you attract talent?
- (39:00) Tell me about your decision to hire salespeople?
- (44:00) How does your team do outreach?
- (47:00) What does sales team compensation look like?
- (53:30) What are The Hunger Games?
More About This Episode
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Hey there bright idea hunters. Welcome back to episode 146 of the Bright Ideas Podcast, I am your host Trent Dyrsmid and this is the podcast where we help entrepreneurs to discover ways to use digital marketing and marketing automation to dramatically increase the growth of their business.
If you are an entrepreneur and you are looking for proven tactics and strategies that you can implement in your business today this is the podcast to listen to. So how do we do that? How do I make good on that promise?
Well the way that I do that is I bring on other proven experts; other entrepreneurs to share the story of how they have built their organisations and in this episode you are in for a treat. My guest is a fellow by the name of Zak Dabbas who is the founder of a very very successful mobile agency called Punch Kick Interactive. They are on track this year to do eight million dollars, last year they did four million, the year before they did two million.
They are ranked number 959 on the Inc 5000 list. They’ve got 70 employees. They are very profitable and they’ve got the most amazing transparent culture that you have ever heard of. In this interview we are going to talk about how they built it, how they got started. And I am going to give you a hint; it was from sitting in his classroom in law school and realised that he did not want to be a lawyer.
And he started sending out emails. But they did something that was really smart. They picked a focus very early on, almost from day one; and made it their mission to become the leading organisation with that particular focus.
And we talked a lot about that in the interview and we talked a lot about how that affected the type of companies that they would go after, the things that they would communicate to them, how they initiated conversations and how they turned those conversations into those people becoming clients.
There is so much incredibly good stuff in this interview that I encourage you to make sure that you are sitting still when you are listening to it with a pen and paper in hand; so that you can like I did, take pages of notes as Zak pours out brilliant idea after brilliant idea and yet he is the humblest guy on the planet and was an absolute pleasure to listen to.
So with all that said we are going to welcome Zak to the show in just a minute but before we do that, very quickly, I get a lot of people sending me emails asking what tools and resources I use to run Bright Ideas and my other businesses.
You can see a list of all them at GrabTrentsBonus.com, some of them are affiliate links if you want to the affiliate link to buy those products that would be wonderful and I appreciate that very much. If you do I have some bonuses for you. That is why it is called Grab Trent’s Bonus. There are instructions there and you can send me the receipt.
Take your pick of some of my paid products that I would like to give you for free after using the affiliate link; pretty cool huh?
Okay, with that said, grab your pencil, grab your paper, sit down and please join me in welcoming Zak to the show.
Hey Zak welcome to the show.
Thank you so much for having me.
Yeah no problem, it is my thrill to have you here and we are going to be talking about all sorts of amazing stuff here today to do with the incredible growth of your agency, Punchkick Interactive, which I won’t spoil, we’ll get to what you have accomplished here in the last couple of years in just a moment.
But before we get into the results and all the steps that you and your team have taken to achieve those pretty incredible results, let’s have you, as I always do, introduce yourself. Who are you and what do you do?
Okay great, I am Zak Dabbas, I am the co-founder and CEO of Punchkick. And so my role in the company is really making sure that systems and processes are optimised; that everybody is really happy; that we are growing in the right direction and really keeping a clear look on what is happiness is like in our company and how people are doing and how we are growing and just being involved in a little bit of everything.
Alright, so we’ve got the head honcho on the line folks and he’s built himself a multimillion dollar company so if you are looking to do the same or you are looking for inspiration or you are looking for ideas, get your pen and paper because there is a bunch of them coming your way.
So first of all, I discovered you guys because you were on the Inc 5000. I think you told me in 2012 you did two million dollars in revenue, in 2013 you did four million dollars, here in 2014 you have already surpassed four million dollars, you think you are on track for somewhere between six and eight.
So that is pretty darn phenomenal, kudos to you for that. So folks now that you know you are listening to someone who has built something pretty incredible, let’s go back to the beginning. You told me that you started this back in 2006 while you were in law school. Is that correct?
Yup, when I started the company I was in law school and previously I was a pre med student in college. I graduated and decided medicine was not for me and thought, okay I guess law school is the next best thing. And so
I went to law school and very quickly realised that I disliked it a lot. And so one of the biggest things in my life that I should have asked myself was what did I love to do and what I enjoyed doing.
And I look back and all the parts come together but at the time I was doing a lot of freelance work with my biggest partner today Ryan Unger who is our CFO. And I was doing a lot of work with him freelancing. We were designing and developing websites and I would handle the stake hold and client relationship side of things and finding new work.
And we were doing it on the side and I got to law school and I realised I made a really really big mistake. And so at about a year and a half in of the three year program I told Ryan, “Ryan if I have to be a lawyer I am just going to kill myself, this cannot be my destiny.”
We decided to make our claim. We started Punch Kick Interactive. We turned the freelance work into this legit business and titled it Punchkick Interactive. And by that time Ryan had gone and seen a conference, a *inaudible* conference and at that conference heard a bit about mobile here and there and came back and said, “you know what Zak, mobile is the next big thing, I think we should make that our focus.”
And so we did it. And I graduated but I spent the rest of my law school experience in class firing off new business email after new business email, trying to land the kind of clients that I really wanted to work with and
I thought would help grow our business. By the time we graduated he had landed a client (he was doing the same thing) and I had landed a client.
The rest is history but I quit my job at the law firm I was working at and it was wonderful.
Alright, so let’s go back there, when you decided you were going to focus on mobile, what specifically did that mean? You were going to build mobile websites? Because you guys were like two freelancers, did any of you guys write any code? Because I know you build apps now but you probably did not back then I am guessing.
My business partner is an unbelievably strong developer. And back then, this was on 06, there was no iPhone and so back then mobile was wallpapers, screen savers and basic mobile sites (that were called WAP sites back then and had very limited functionality) and also a lot of text message campaigns.
What we did was we looked at the mobile landscape and a lot of it did not exist. We saw some opportunities for businesses to reach their audience using mobile tactics. And so when we fired up in the beginning it was all spec work. It was projects that we designed and developed, just the two of us to showcase our skill set. And that was what we had to start.
So what did you build?
When we started to land work, the very first project that we ever did was actually with an agency that is still a client of ours and they were working with Intel. And Intel wanted a cool new way to reach students who were being invited to creative fares on college campuses.
And so we actually worked with this agency to create a text message campaign were you could basically get someone to opt in and then the day of the event they would get a message like, “Hey get out of bed you have an interview with Intel at eleven o’clock and here is some directions.”
Very simple stuff but back then that was very new, like this idea of customised content on your mobile device was very new and very difficult to sell. Back then I joked that we couldn’t give mobile away and most of what we did was on the education side.
And so some of the clients that we worked with at that time were just really early adopters, they really saw the potential there and so that was also part of why the company was fun; is that you would work with folks who saw that this was really new and exciting and they were willing to experiment with it.
Yeah so not being able to give something away would definitely make it difficult to attract clients and drive revenue but none the less you told me that you did a couple of hundred thousand dollars in your first year and I think your first project was for Intel. Which I think you just mentioned a moment or two ago.
Where did you go from there? What was the early focus in terms of the product or service offering?
What we realised very early on was that with something like mobile; it was really going to appeal to early adopters. And so we would shout to folks who we thought would be really open to adopting a new technology or a new way of engaging with their audience and so around that time another big client that we landed was Pearson education. Which I think is the second largest book publisher in the world. And back then they had a bunch of folks that we worked with who were responsible for creating e-learning tools.
At the time it was a stagnant industry and they wanted different ways to distinguish and separate themselves from the other book publishers and so with Pearson; around that time back in 2006 one of the first projects that we landed was actually one where you would purchase a book at a college campus and in addition to that book at no cost you would get this access to a flash card system.
And you could basically on your desktop view these digital flash cards and you could create custom decks of flash cards that had different items on them based on the chapter you where studying. And from there we created the desktop flash card system and it had a mobile component. And the mobile component was being able to take those flash cards that you created and actually import it to your mobile device.
And in 2006 this was very very new territory and actually the contact that we worked with at Pearson; at the time this launched it was tremendously successful for them and our contact was presenting it to the CEO of the company and I heard through the grapevine that she presented it to the CEO and she was promoted.
And that opened the floodgates with Pearson and so for a number of years we did a lot of really cool things with Pearson. So I guess for us what we found was that when we found the right clients; if we did really good work and we cared a lot about doing good work the rest worked itself out.
That is kind of how it happened for us.
So would it be fair to say that through using direct outreach you managed to land a couple of key clients; you did incredibly good work for them and then marketing and sales kind of looked after themselves for a while as a result of these great client relationships?
Absolutely, until recently I think I mentioned earlier it was November; we got our first official sales team together. Before that it really was word of mouth and reputation. And I think there is a lot to be said for that.
That people sometimes forget that clients just want to work with folks that make them happy and they enjoy working with. And I think for us part of what it was was I did not want to be a lawyer.
I did not want to do anything else. This was all I wanted to do and so I looked at every single client that we landed at the time as such a blessing (I guess is the only way to describe it). I was so happy that we had these relationships and I wanted us to do good work. Something else that I think maybe is worth mentioning is I am one of those people that like to think about what the future could look like and then I like to build a plan to get there.
And so even at the start of Punchkick, Ryan and I, we didn’t even have an office at the very beginning. And it was like this is what our dream office is going to look like and these are the clients that we are going to work with. And this is the kind of calibre of talent we are going to attract. We knew from day one the kind of company we were going to build and so we made decisions to get us there.
We had other project opportunities when we started Punchkick and we turned them away. So part of the growth for us on the sales side was being okay with saying this isn’t the kind of client that is going to get us in the direction we wanted to go and so we turned away projects that we didn’t think was a good fit for us.
We got a lot of interest from the adult space and we just did not want to do mobile work in the adult space. There were just a lot opportunities like that and we just stayed laser focused on the kind of clients we wanted and it served us really well.
One of the things that I know is a struggle for a lot of young agencies is getting enough profit into the bank account to be able to fund the expansion of your team and hiring the right kind of talent that you need. So how did you guys go from just being these two guys to four, eight and ten people? And obviously you are much passed that now, you are at 65 now but I want to stick around the early phase for a bit.
That was the toughest thing to deal with at the time and what I’ll say is this, if there is one thing I have learned throughout my career it is passion is equally if not more important than skill set. And what I mean by that is when you find people who are really passionate about what they do, they find a way.
There is that saying that where there is a will there is a way. It really is true. One of the things that I think we did really really well and that we still do really well today and it really makes Punchkick what Punchkick is; if you come to our office you’ll feel it; we know what a Punchkicker looks like, feels like, sounds like. It feels like a family. Even back then we couldn’t afford to grab somebody from a big five agency.
I could not poach somebody from a booming tech company but what I could do is find what we call whisper talent; which is this concept that a speaker that I saw in Argentina spoke about. He spoke about whisper talent where you find the guy who is living in his parents’ basement that has so much potential to being an unbelievable developer but maybe didn’t have a chance or maybe doesn’t have the credentials that someone else might have on paper.
We interviewed a lot of people and we found people who really believed in our vision and where we were trying to go and while they might not at the time have had years and years of experience I never doubted for one second that they would work hard and try to really provide a lot of value. Even when we were still very small we were bringing on all the talent we could and just finding exceptional talent.
And even today I have a strategist that has been here for three years and he is one of my dearest friends. When he started with us he was working in retail at Apple and I kid you not one of the things he said to me was, “I will sweep the floor at Punchkick; I just want a chance to work here.” And he actually came on in a like lead generation capacity and today he has rounded up some of the largest projects at Punchkick interactive.
So I think it is just in really smart hiring.
Now did you hire all these folks as full timers at the beginning? Did you have the cash for that or did you have to just bring them on as sub contractors and use them only when you had work for them?
It is funny that you ask that. When Punchkick first started we were working in Cleveland the first year and we were working out of my apartment and we had a number of contractors in Cleveland that we would turn to for overflow development and design and what not.
Then we moved to Chicago because we needed a bigger market. We still planned not having an office and keeping it,
I don’t want to say casual but not the big business we are today. And we ended up getting a small office for mailing purposes. It is funny how fate works, we had this small office and this office was the size of a tiny closet.
And it flooded and the land lord at the time told us: “I don’t want to repair this office; I am just going to give you a bigger unit one floor down.” And this office that we got had a really nice view; it was pretty big for us which is not saying much at the time. Ryan and I were like, “Maybe we should just buy some desks, maybe we should come to work once in a while here,” and so we started to.
And at the time we had freelancers working with us and we were like, “Hey come to the office too.” And really, I don’t want to say overnight but immediately we decided that we wanted to hire a team and so since our first office we have not used contractors. We don’t use them. Today every once in a while someone will come in for a few days to maybe pitch in on a project that is running tight but by large, even today with the 70 plus employees we have, they are all full time employees.
I found that the relationship that I could build with an employee, the long term feel of it is just invaluable for me. I never had that with a contractor. And I know some folks who run amazing businesses using contractors it just wasn’t for me. I really enjoy getting close and being friends and being in it together. So we got away from contractors as soon as we moved to Chicago and got an office going.
Okay, so what advice would you give to someone that let’s say that they are not drowning in referrals yet? They are scrapping for every deal and they are really trying to get kind of over the hump and they have got to do outreach they got to reach out; they got to figure out, “these are the companies that I want to have as clients, they do not know that I exist,” what advice would you give to that person to get conversations started; which is the hardest part with the kind of clients that would allow them to charge the rates and do the work that is necessary to create the profits necessary to grow and invest in their business?
Here is what my advice would be and I think it is going to sound a little hippy dippy but I am going to say it anyway; I don’t think that you can fake relationships and what I mean with that is if you don’t really want to work with a client that you are going after, there is someone else who does. And so I think the most important thing to do is to really ask yourself, “What kind of clients do I want, what kind of clients get me so excited, what kind of clients motivates me and inspires me to grow my business?”
Because if you think in those terms I think you would just naturally do things to get into those circles and so for us when we were starting small I wanted to be at conferences and events where the clients that we eventually landed were at because I was interested in their work. I really liked what they did in the digital space and I wanted to help them from a mobile perspective.
It was never about just revenue for me and so I think we being in touch with “What gets you excited, what just drives you?” Because then you are untouchable. You are going to want it more than anybody else and the client is going to feel it. You are going to make the kinds of decisions that make you an asset to those clients.
If you don’t feel that I think that maybe the client base isn’t right or the direction isn’t right. So for what it is worth that is what I will say, that passion, it is a clichéd word, but passion is just so important. Do you want to work with this client badly? If you do you will find a way, you’ll bump into them and you will be at events where they are at. You’ll follow them on social and congratulate them when they do something great or launch new projects.
It just happens, there is this idea that I had in my mind which is also maybe bizarre to talk about but I feel that I can make things happen. I believe that. I believe when I really want something that it just happens for me. And I know that that is because I make steps to make those things happen whether I notice it or not and so I think my advice would be to really ask yourself what drives you. What makes you really excited and go there, because you will meet people who are really excited to work with you as well.
So is this the attitude you had when you were sitting in the law class, sending out about 60 to 80 emails at a shot?
Absolutely because for me it was a matter of survival; I did not want to be a lawyer. I wanted to be in creative space. I wanted to be in digital. I looked at it that if I don’t make it with Punchkick then that is it, I am a lawyer. For the rest of my life I am going to work in a law firm. I am going to work in a culture that I don’t like, that doesn’t make me happy, it was survival for me, I wanted it so badly that I made it happen.
And I made it happen with a website and pretty much nothing else. It was a pretty lean start-up.
I agree completely with what you just said and the pragmatic side of me also says, “Yeah.” But these people, these perspective clients don’t know who you are, don’t care who you are yet and they are super busy, got a gazillion other people also trying to get a piece of their business. And there has to be some way that you are able to break through all of that noise and actually get their attention long enough for them to realise that you have all this passion and vigour.
I think part of it is the niche nature of Punchkick when we started. We were reaching out to people to talk about mobile or we were speaking at events or different technology meet ups and what not. We were speaking about mobile and it was niche and exciting and there was no one else that I knew that was doing it. I had not met others who were also working in the mobile space.
Especially not in Cleveland so I think being in a niche market, that is a huge like off, because if you look at the new technologies coming out today and these new start ups. A lot of them are started by folks with no actual experience related to the industry they are in but they see an opportunity and it is a niche and they just go with it.
And so I think that in some ways in Punchkick we always find that the clients that we work with tend to really embrace innovation and innovative thinking, they want that and that is the language we speak so we were able to get in front of those people. Starting a company today in the mobile space or particularly in the digital space, that would be really hard.
I think my advice would be if I was starting another company tomorrow I would go for something that is niche, unique and novel. That helps a lot.
Any ideas come to mind?
Oh boy, I think sensors; I love sensors and wearables. The idea of building businesses that are alive where social is being conducted on the back end and the temperature of a room is adjusting. I just love this stuff. I think sensors and wearables, these are the emerging technologies that excite me. I don’t want to think about it too much though because I will say, as cheesy as it sounds, I adore Punchkick; it is my favourite place in the world to be and that is what I wanted out of business.
I often say to myself the next business is going to be product based. Like somebody places an order and I send a gadget out and I call it a day but truly that could never be enough for me. I think some of the friendships and relationships that I have here are some of the best parts of my life.
And that is what I needed and it serves that role for me.
And you can tell by looking at your website, the about page in particular is one of the better that I have seen; conveying a feel for what your organisation is like.
Yeah, I think transparency is such a big part of who we are. I can go on a tangent on that for an hour so I don’t want to go down that road I’m sure.
I think that is a great road, we did talk about that in the pre interview; we talked about how everything is so incredibly transparent at your organisation. So let’s get a little more specific. What do you mean by transparent, transparent with your staff, transparent with your customers? Let’s talk about it.
Really it is both but I will talk about the staff side. Ryan and I are not oracles; we do not have all the answers. I never had all the answers and I think that we really try are darnest to try and really have our team understand and appreciate that. So outside of each other’s salaries currently (and even that’s not forever) there is no topic that is off limits at Punchkick.
So every single day we have a thirty minute huddle where the entire company comes together. We talk about what is going on with our clients, what new pitches are in the air, what issues we’ve got, everything is up for grabs. We have a thirty minute huddle; everybody gives a little good news in their life so we have a base line of what is top of mind for everybody.
And then we do shout outs; which is where you can give some credit to somebody who did something above and beyond; so we got the huddle every single day and that unites us like a school of fish. I try to lead as transparently as possible meaning I don’t want someone to wonder what I am thinking. I want them to know even if it is uncomfortable. And I encourage others to be that way, so in our company, seventy almost people, you could come here and you would be able to vouch, no politics, no bureaucracy, the best ideas rise to the top.
And so we talk candidly and we give feedback really candidly. Even on the growth side of Punchkick that happens with Punchkickers. We launched something called the Punchkick Growth Team and basically every week a voluntary group of people, our first quarterly launch we had 22 people show up, we meet every Tuesday at nine in the morning and literally just come work on company growth initiatives.
So at the start of the quarter we delegate those growth initiatives out, people basically volunteer for a growth initiative that they think they can tackle. And we just grow the business together. So every week we are meeting and at the end of the quarter we just wrap up all the growth initiatives we can. It’s just like it is effortless in some ways.
I want people to know what’s going on. If we have a rocky relationship with a client I think the team should know that, if the client is ecstatic and loves what we are doing I think the team should know that. And if we are unsure about a new process or unsure about a new way of doing things I want the team to know that. That I think is our single best competitive advantage and I have seen how it can transform a company.
It is one of the things where I will meet with the folks who ask me, “How do you at this size keep the culture so strong?” And it is like to me it is easy, it’s transparency. It is also really loving your team; as weird as that sounds.
I care deeply about the people that we hire and I want them to love it at Punchkick, I want Punchkick to be the best thing that ever happened to them in their lives. I want them to stay with us forever and so I do what I can to make them happy and to take care of them and in turn they do the same back.
Just like this beautiful little utopia where you can be yourself, you can do great work and if you don’t like something you can just say it. You can just pull me into a room and yell at me and there are no repercussions.
And I think that transparency is a big part of that because I’m a human, I don’t know everything about growing a business and a lot of it I am learning as I go.
So there are only a few things that I feel good about on a day to day basis and one of those is that transparency is helping us and I know how to hire good folks. I know who makes sense at Punchkick and who is going to be happy here and when I sense something wrong I try to fix it. So people and transparency are huge.
Let’s talk about the people for a minute then, when you are running a professional services firm with as many people as you have; getting the right people on the bus is incredibly important. Let’s go back to, I think you said 2 years ago you were at seventeen people when we did the pre interview; what did your recruiting process look like back then? Where did you advertise, how did you find people? How did you interview them? What were the things you looked for?
Yeah, that is great so the interview process and then the hiring process. What would happen is I would get to a point where I knew I was managing something and we needed somebody that was better than I was to manage that thing or better than Ryan was to manage that thing. In the beginning what we did was job posts on Craig’s List, job posts on Chicago job board, nothing fancy. And we just interviewed a lot of people. So people would come in and we would meet with them.
The one thing that I feel in my life that I know is people. Most of what I do in my day to day, I feel like I am learning. Or problems are coming up and I am solving them as I go, people I know.
So folks would come in for an interview and I could just tell the excitement they had about a fast growing company, I could tell from the personality, somebody who is open and really comfortable in their own skin, funny and just light and pleasant. I used to say to myself when I interviewed somebody and I still do today, “If this person had an emergency in their life, they had a disaster happen; would I put them up in my house for a week?”
And so I used ideas like that in the background, when we interviewed we just looked for people that we thought were amazing and it worked. It really worked for us, getting the right people on the bus; that is such a struggle and the only advice that I am going to give on that that I feel okay putting out there is: ask yourself if you are a good judge of character, you align yourself with people that push you forward, that make you a better version of yourself, if the answer is yes then be on the interviews and look for those people.
If you are not good at it, if that is not your strongpoint, find someone who is. To help you on the hiring side because when you start a business, you are your people. I think that is even on our website, we are our people. Punchkick is the people and so I don’t know what could be more important than that. That would be my advice, either do it yourself or have somebody help you. Even if it is a friend, if it is a colleague, somebody who you know is just a good judge of character.
Have that person be there and even in the interview process get away from these lame questions that people ask like, “what is a trade bet?”, “what is your worst quality?” And then somebody responds, “I work so hard.” Those are not the questions you should be asking.
The questions I ask is “Why are you here today?” and “What do you love doing most in life?”, “If you could have any job here what would it be?” “Should you have been fired at one of your other jobs, what is the worst thing that you had done at another job that you think you should have been fired for?”
“What do you do for fun?” I want to get to know somebody and in fact even since our start we would have interviews happening and they would be interrupted a lot, like people would be walking in and out of the rooms and I would actually encourage that because it is a very Punchkick feel. That is how Punchkick is, you are in a room somebody walks in, they need something. It is kind of crazy all the time.
So I wanted people who could adapt to that pretty well. And even in an interview I would see somebody walk in; another Punchkicker might walk in and somebody who is being interviewed is completely thrown off, where somebody else says, “Hi”, introduces themselves. They take it in stride; those are the things we looked for.
It is kind of also on the transparency front again, letting somebody know what your business is really like because they are interviewing for the job and you are interviewing for the talent. So I think the more you can give them a sense of what it is really like the better.
So you now have a sales team that you added in November of last year. You told me that that has worked out very well for you. So I wanted to spend some time talking about the details around building a sales team and how you get them to be productive and paying for themselves. Because I know from my past business experience that was a big challenge for me and it is a big challenge for everybody.
With respect to salespeople, prior to when you decided to hire, your new clients were predominantly coming from word of mouth, would that be fair to say?
Yes, we had small periods where we hired somebody to be kind of a loan shark sales person, like kind of lone ranger. It didn’t work out and we didn’t really know what a sales team would look like. We dabbled in it but the majority, yeah. Work was coming from word of mouth, from bumping in to people at events and networking; kind of the usual.
Okay and your sales team now has how many people in it?
Our sales team now has six people.
And did you hire all six at one time or did you hire them in pairs?
Here is what we did. We had done enough sales to start to get an idea of what our strengths were in sales and how to multiply that. When Ryan and I used to sell personally I was always the guy who wanted to go out to dinner with the clients and wanted to get close with the clients; wanted to get the contract signed; I wanted to get the baby locked down; I wanted to make it happen.
Ryan was always the guy who had a million big ideas, super passionate about the technology and just brainstorming and all that. That combination worked really well for us. We called that a strategy relationship combination, strategy closer.
What we decided was, one, we needed a sales manager. We needed somebody who could come in and really be held accountable for having a sales team that was successful and providing the education whatever that team might need.
And then we hired what we called closers/mobile advisor. Let’s say an incoming lead comes in, they are the person who they are going to talk to on the phone. They are going to figure out if this is a good client for us, are we a good fit for them, what does the project look like; get that ball rolling.
And we also hired mobile analysts who are folks who do a lot of outreach. They’re looking what is going on in social and who are the movers and shakers and what is happening and they are trying to reach out to them and get meetings or keeping drip campaigns going, sending them what is going on with Punchkick and all that.
So we structured it that way.
Okay, so let’s talk about those people that do outreach, because it is a huge challenge trying to get (as I mentioned earlier in our interview) trying to get people to simply give you a piece of their attention is incredibly difficult.
So when you hired these folks, first of all, are they solely focused on outreach or do they do outreach when there is not enough leads coming from the website to keep them busy?
So when a lead comes in from the website that actually gets kicked up to the mobile advisor, that role that I told you about that gets on the phone and gets it going.
With the mobile analysts, which are the more outreach folks, those are typically people that we bring in, they are younger in their career and it is a fantastic training opportunity for them. And so what happens is they come aboard they’re doing outreach, they are learning the industry, learning about what we do and they are trying to build those relationships with the goal of transitioning to another role at Punchkick within nine to twelve months.
So it is almost like a combined training program but also providing a lot of value for us because they do outreach; which is really great for us because a lot of folks we reach out to actually do really want to learn more about Punchkick and what we’re doing and they are really happy to talk to us. That is why that’s worked I would say.
And the outreach that we they are doing, are they using social media, are they making cold calls, are they using cold email, who did you tell them to reach out to and how do they actually do it?
That is a great question, no cold phone, we don’t use that, nobody calls anybody that I can imagine. Our sales manager gets a wish list of clients that we would like to work with or folks that are doing really cool things that we would like to connect with and he’ll work with those outreach folks to come up with creative ways to reach out to them.
So it might be an email blast, it might be going to a networking event, where one of these folks are speaking and trying to get a relationship or a conversation going there. It is things like that. Let me think, I want to give you some more actual tactics because I think your listeners would benefit from that.
Social is a big part of it. If there is somebody who is doing something in mobile space or the innovation space our outreach team; these are guys and girls that really love the space and they love the tech space so they’re doing this anyway and they are reaching out and saying, “Hey this is great”, getting dialogue going.
Man, I don’t really know much more beyond that which is a testament to our sales manager I guess that I don’t have to be involved in the nitty-gritty there.
The goal of the outreach folks is to get a conversation with one of our mobile advisors. Somebody who is much more nuance and understand the mobile industry and can see what the opportunity is and go from there.
Oh okay so the mobile analyst that does the outreach is the lead generator and they pass the conversation on to the mobile advisor who is the person who qualifies the lead and make the proposal and moves them toward the saying yes?
Yes and the mobile analyst; that lead generation person will be there on those calls because that relationship is there and they want to learn and know what is going on. But yeah it is the mobile advisor, that closer role who is really looking for the opportunity and helping shape that opportunity.
I would actually love to do another interview with your sales manager if you think that would be alright?
Because I could easily so an hour long interview on everything they are doing. Please make an email introduction if you would.
So we will shift off of the sales tactics then because we are going to cover that in a subsequent interview. Let’s talk a little bit about just what a compensation plan looks like. I know you have mentioned that you haven’t decided to go full disclosure on salaries yet, so you don’t have to go there that is fine.
So for the mobile analyst, do those folks get some kind of a base salary and then an incentive for number of conversations they start? Or how does it look?
Great question let me begin the answer by saying we never found ourselves attracted to candidates who wanted to work on a commission only structure; I don’t know what it was about those folks and more importantly I can’t live with myself doing something like that. So our lead generation folks; they come in at a base salary that is significantly higher than most lead generation folks. It’s an absolutely liveable salary and on top of that they get a commission for the meetings they set up.
The mobile advisors like the closers I mentioned they also have a highly liveable salary with commissions built in for deals they close. And the sales manager has a highly liveable salary, more of a lifetime value; a small percentage of those accounts that grow and come in as a result of that team.
There are many folks who are going to say that this is not an ideal strategy, but I never wanted a salesperson’s need to make an income to survive to trump the desire to do what is right for our company. And so I wanted folks to come in and I would say to them, “I’ll make an investment in you and I want you in turn to in turn make an investment in Punchkick and find us the kind of work and opportunities that really grow us.
I think it is the right call and I can see it both ways but I didn’t want there to be a pressure to just bring in work because I think there is such a thing as bad work. I think that you can find work or projects that are not good for your company and for the kind of team that you have. And you have to have laser focus on what makes sense for you.
All of them get a very liveable wage and commissions.
Okay, what percentage of your clients are in Chicago, the same town you’re in?
Probably less than half, maybe half or less than half.
And the folks that are on the sales team that are doing the prospecting; are they prospecting local companies or are they prospecting companies regardless of where they are because they are companies that you want to do business with.
The latter, they are prospecting companies that we want to do business with. Wherever they are.
Okay and how do you build lists of those companies? How do you figure out that is a company… You can sort of randomly stumble across them of course?
That is a good question…
And maybe I should be asking the sales manager.
Yeah because when I was involved in sales it was just like, “Who am I meeting at events and who is doing cool stuff that I want to work with and I am going to reach out to?”
Yeah that would definitely be a better question for our sales manager because I don’t really know the answer.
Alright, folks don’t worry, I’ve wrote it down; my list of questions to be asked in part two of this interview. Just make sure you listen to the second part and you will get an answer to that question.
Okay, what haven’t we talked about that, I am just kind of scanning the notes that I made in our pre interview, you really wanted to talk about culture and transparency, do you think that we have done a good enough job of that or do you think there is something else that is really important that would enrich the quality of this interview with respect to that?
Or anything is there anything that we haven’t talked about or that I haven’t asked you which you really wanted me to?
So I’m looking at this question through the lens of someone, a young entrepreneur, what I’ve learned, what I can impart that would help them. Is that the right lens to look through?
I think that is a very good lens yes, so let’s go with that one.
Okay so, things I have learned, I think I have covered most of it, you are the sum of your team, you are your people. And so finding the right talent is crucial. I think transparency, letting folks know what you struggle with, where business struggles are, where the pain points are and where the success is is so important.
There is a feeling when a company is really unified and people know the direction it is going, it’s such an unbelievable feeling. And I have seen other entrepreneurs and CEOs who have walls up between their teams and themselves and I don’t think it is the right way to do it. But I’m just one person.
I think being passionate about the work you do, being in an industry or running a company that makes you so excited because if you are not someone else will be. I think that’s huge.
I think that’s about it.
Well let me ask you, I’ve thought of a question that I wanted to ask you before we finish up. Have you ever heard of Verne Harnish’s Rockefeller Habits?
Okay, do you follow his… because I know you do the morning huddle, do you do quarterly and annual strategic plans?
That is a great question and that is something I would love to expand on actually if I’ve got a minute here.
You do indeed.
Okay so we do the morning huddle and then quarterly we do something that we affectionately call the hunger games where we show everybody revenue numbers, expenses, client wins, new policies at Punchkick or new benefits; things like that. So we do that every quarter, with the goal being that all of that is transparent, everyone understands the direction we are moving and so on and so forth.
You mentioned Verne Harnish and that brings up one thing that I have found to be true for myself; which is I have always believed you have to do things your own way and you have to make your own road and I mentioned to you the Punchkick growth team. It is actually working incredibly well. We have so many folks here excited about growing Punchkick; owning the growth initiative they have and that is something we have grown on our own organically here at Punchkick.
Now on to our operating system, so we have an operating system now that is really really wacky and it is working so well for us. And here is what it is. We build apps and mobile sites and we do a lot of strategy and what not but most of the projects we do, we are doing in two week sprint cycles. And so what we do is, when you are on a project, you’re part of a tribe, you are all accountable for that project.
Every two weeks the project managers mark the project sprints red or green. Meaning we delivered, everybody made good on their promises or we mark it red. Every six months Ryan and I sit down and if we were fifteen percent profitable the previous two quarters, everyone who was on a tribe that was green gets an instant raise.
We don’t have to talk, no politics, no nothing. It is instantaneous. And the goal there is to convey the message that if Punchkick is profitable and our clients are happy, that’s it, you’ll get raises forever.
And so that has worked really well for us because what we find is if a team is working together and they are on a sprint together a QA tester could say to a designer, “You owe designs on Wednesday, it is now Thursday you should not leave here until you’re done because if you do you are going to throw this whole sprint off and none of us will get a raise. Like none. We will all be dinged for this.”
And so folks are holding themselves accountable. It is not a perfect system and we just launched it last quarter and so we are working on a lot of kinks with it but it is fantastic. It’s been a breath of fresh air because the whole reality for us is the only reason we have rules and have deadlines is because we want clients to be happy and we want Punchkick to be profitable. And when we are there should be no barriers to everyone enjoying that.
And that is not something we got from a book. And so one if the things that I’ve learned; I looked at some of the questions that you sent me over and I actually panicked when I saw “what is the most recent books you read”, I don’t read business books. I feel that the answers we need are within this team. And they are within myself and they are within Ryan.
So we paid really close attention to business and we are really comfortable pivoting and creating systems and processes that work for us and we don’t feel bad about it. And that I think is really important to think about. I think entrepreneurs sometimes feel pressure like, “Oh I better use this operating system or I am going to model my business after this book.” I don’t think anyone knows your business like you do and you should go with what feels right and for us this is working incredibly well.
Interesting, very very interesting, so let me sum up what I heard you say. I think it was profound and I want to make sure that the audience understands it. You have projects that get organized into two week sprints and there is a tribe that is pulled together for that two week period at a time to work on that project.
And if things go well, at the end of the project it is going to be green. And if things don’t go well, and I am sure there is definitions of don’t go well versus go well, it gets marked as red. And over a quarter; (how many two week periods is that?) The is going to be six two week periods, so potentially somebody could be on six different tribes during a three month period or are they always on the same tribe?
They are generally on the same tribe. Our projects are pretty large here, so you will be part of a tribe on a project and you will be on it. And then yes every two weeks a sprint gets knocked out another two weeks, another sprint.
Okay, so when you get to the end of the quarter if you had a fifteen percent net profit margin during the quarter for the business overall the people who were on a sprint that got green automatically get a raise, yes?
Yes but it is actually after every two quarters so we use two quarters of that. The reason we do this is one, it is raises and I think raises four times a year might be a little scary for us. We do it twice a year. But the bigger reason actually is because if a team struggles one quarter they can work really hard the next quarter to increase profitability and kind of still save it.
So we look at the last two quarters and the average, if we were fifteen percent profitable there is instant raises. Another beautiful benefit of that that I considered but did not realise the difference that it would make a lot of companies have sales and development but they are like very siloed/segmented and don’t work closely. At Punckick we all fit together so sales and developers; we are all friends and we are all close.
And so what happens is if you are on a tribe that is delivering green every single sprint, if you are seeing what
sales are doing and they are struggling to bring in new clients or revenue, it’s in your best interest to help sales close deals. So we’ll have designers say to the sales folks, “Hey I’ve got some bandwidth, can I help you with a pitch, can I help you with a proposal, can I design some mock ups for you?”
And that has been beautiful because it gets people understanding, “I’ve got to deliver but the company also has to be profitable.” It’s freaking awesome.
Yeah no kidding; it sounds like it.
Zak you have been an absolutely fascinating guest to have on the show. I have taken several pages of notes as I have been interviewing you. And I want to thank you very much for making some time to come and chat with me and share the details to the degree that you have.
Thank you so much for having me I’m happy to speak my mind any time. So thank you very much.
No problem, and so if people would like to get a hold of you; just one, what is the one easiest way for them to do that?
Email is definitely the best way.
And do you want to tell the audience what the email address is?
Oh yeah it is firstname.lastname@example.org.
Okay, Zak well thank you again so much for being on the show, it’s been a pleasure.
Absolutely thank you.
Alright to get to the show notes for this episode go to BrightIdeas.co/146 and if you enjoyed this episode please do me a favour and help me spread the word by going to BrightIdeas.co/love where there is a pre populated tweet awaiting the click of your mouse. So that is it for this episode, I am your host Trent Dyrsmid, thank you so very much for being a listener. I hope to have you back in the next episode which will be coming your way soon.
Take care, bye bye.
About Zak Dabbas
Zak Dabbas is the co-founder and CEO of Punchkick Interactive. A bonafide veteran of the mobile space, Zak has played a key role in the launch of integrated mobile campaigns for global brands including Harley-Davidson, Microsoft, Allstate Insurance Co., UPS, and Marriott International. Zak has overseen mobile strategy for Punchkick since its founding in 2006, and has helped the company experience massive year-over-year organic growth since its inception.