I’m Out of the Valley of Death

Introduction:

This week, Shawn Busse, Jennifer Kerhin, and Jaci Russo talk about how their businesses did this year and what they’re planning for 2025. Jaci and Shawn have been surprised by a surge of new clients in December, which they say never happens. And Jennifer is excited because she’s confident that in the first quarter she will finally exit the Valley of Death—that transitional period growing companies experience when the people and processes that made them successful stop working (AKA No Man’s Land). Along the way, the owners discuss the relative merits of promoting from within vs. hiring from without, how long it should take to onboard senior-level hires, whether it’s better to err on the side of budgeting for too little growth or too much, how they’re training employees to use artificial intelligence, and what Jennifer can do to stop spending so much time writing and pricing proposals.

— Loren Feldman

Guests:

Jaci Russo is CEO of BrandRusso.

Jennifer Kerhin is CEO of SB Expos and Events.

Shawn Busse is CEO of Kinesis.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome Shawn, Jennifer, and Jaci. It’s great to have you here. In the past few weeks, I’ve been asking everyone how their years have gone, whether they’ve hit their numbers, what they’re thinking heading into next year. I’ve already gotten to you, Shawn. You told us you weren’t exactly thrilled with your year, but I have yet to hit Jennifer and Jaci. Jennifer, how about you? How’s your year ending up?

Jennifer Kerhin:
We are off our budgeted revenue, but not bad. I had a really aggressive goal this year for revenue. It was 25-percent growth. So, we had 15 percent. I can’t say it’s bad, from a revenue standpoint. I’m not happy we didn’t meet the budget, but that’s okay. I’m more upset about my profitability, and I know this is a standard part as you grow a company. You go through areas of feast or famine, where you grow a lot, and then you’ve got to sort of come back and make sure all your processes are fine. And so I’ve spent a considerable amount of money on a higher level of management this year, and I know it will pay off, but it hit my profitability because of high compensation. So, the hope is that next year we get the revenue to catch up with the expenses.

Loren Feldman:
Did you hire more high-level people than you expected to at the beginning of the year?

Jennifer Kerhin:
The compensation was higher than I expected, yes. Salaries are increasing quite a bit in the last couple years. And so what I wanted to have, I knew I needed for growth. It just cost me more than I budgeted and expected.

Shawn Busse:
I seem to recall you’ve been trying to sort of up-level the team, right? So you’re hiring more experienced people. It’s less of that young and eager, works really hard, but not very experienced, and so they’re less expensive. Is that fair?

Jennifer Kerhin:
That’s exactly right, Shawn. And some of those I’ve identified can get there under strong leadership and external training. And some, I just need outside help and understanding. You want to give people a chance. How long do you give them a chance for? How much do you realize they need a chance if they have a strong leader under it? You just don’t have all the time to coach those young, ambitious people, and so you need a leader to help coach them to get to their level, and that’s expensive.

Loren Feldman:
We’ve also talked about your hopes of getting stuff off of your plate so you can stop working those 12-hour days and six-day weeks that you told us about when you first joined the podcast. Did you make progress there this year as well?

Jennifer Kerhin:
Well, I got a lot of stuff off my plate—a lot—but then more stuff got back on it. It’s like you can’t get rid of this.

Loren Feldman:
How’d that happen?

Jennifer Kerhin:
Oh my goodness. Well, when you’re training leaders, that takes a long time that I had not expected. So you’re getting external people at a higher level. They may know the skill-set, but they need to understand your company, and I underestimated, I think. That’s a question for all of us: How long does it take to get someone onboarded into your company at a leadership level. Is it 90 days? It is 180 days? Is it really nine months to a year? I’m spending a considerable amount of time coaching these leaders, training these leaders, having them understand expectations. That part.

And then I have ramped up my marketing significantly, which is fantastic. It just means I’m doing a lot of proposals. And I think we talked about this on an earlier podcast [episode], Shawn and I did, is that our proposals are really customized, and they take a long time, which is great. I’m getting a lot of requests for proposals. I’m just spending a lot more time. That I did not expect to get off my plate, it’s just a lot more work, which is great. I do need to figure out how to get that off my plate for next year.

Loren Feldman:
So, how has this experience left you thinking about your budgeting for next year? Are you going to set ambitious goals again?

Jennifer Kerhin:
Great question. I have my CFO and my number two and I are meeting for the third draft of our budget. It is not aggressive, but it also looks terrible, from a profit standpoint. And so, forecasting is really, really difficult, right? It’s really difficult. And if you under-forecast, you possibly under-resourced, so you’ve got to hire people. But if you over-forecast, and you don’t meet those expectations, then what?

I don’t think anybody has the right answer. So, Loren, I am being very conservative this year. I think our goal is 15-percent growth. But I need that, because I brought in all this staff. So, if I meet it, fantastic. If I exceed it, even wonderful. If I don’t meet it, I got problems.

Shawn Busse:
I love that you think 15 percent is very conservative. [Laughter]

Jaci Russo:
It’s crazy high!

Jennifer Kerhin:
Oh really? Good.

Shawn Busse:
Especially since, now, you’re a larger company. 15 percent on a half-million-dollar company? Big deal. 15 percent—I don’t know where you’re at—on a $5 million company is a big deal. That’s tremendously disruptive. It’s really difficult. Your profit’s going to take a huge hit. Your cash flow is going to take a huge hit. I just kind of wonder if you’re not using your prior experience to inform what your perception is of the future.

Jennifer Kerhin:
Shawn, that’s a really good point. I had not thought of that at all, that percentages should probably go down as the company gets bigger. I heard once that if inflation is, let’s say 5 to 7 percent, you’ve got to take that off, because it’s just inflation. So 15 percent with 5 percent inflation is really only 10 percent growth. That assumes that your pricing is keeping up with it, which is somewhat difficult. But that’s a really good point. I have to go back and think about that.

Shawn Busse:
Well, we’re not in that type of an inflationary environment right now. I think I saw the other day it was like 2.7 percent, something like that. So, that’s the other thing that’s shifted too, is, yeah, you’re right. We were in a heavily inflationary environment, so your perception of what growth needed to be was probably informed by that as well. I’m kind of curious why, I mean, you said you were slowing down growth, but then when you said 15 percent, I’m like, “What? No wonder your profit sucks.” [Laughter]

Loren Feldman:
How many people do you have to hire to handle 15 percent growth, Jennifer?

Jennifer Kerhin:
Well, none. I’ve hired them. That’s why my profitability is not great this year. I hired them now so I can absorb that kind of growth next year with no additional head count or maybe a part-time coordinator. But no significant head count.

Loren Feldman:
Well, that helps. Is your profitability not looking good in your budgeting for next year for the same reason it disappointed you this year?

Jennifer Kerhin:
Yeah, I think the profitability took a hit this year because I hired high-level leaders, and from a compensation standpoint, next year, I need that revenue—I hired them for growth, so it was done. It was just more than I thought it was going to be. But I need that growth to make sense. It’s taking a lot longer than I expected to get people onboarded. It’s not easy, I think, or maybe I just underestimated it. The learning curve of getting into a new company can be tremendous.

Shawn Busse:
Well, the problem you’re having is—I mean, sorry to sound like a know-it-all—you’ve grown really fast. So your business has changed significantly, which means you probably haven’t had time to put in place the processes and systems that make onboarding and acclimation efficient.

Jennifer Kerhin:
That’s right.

Shawn Busse:
So, you’re paying a penalty for that fast growth. But I don’t know what the answer is to that. It just is kind of a natural phenomenon of: Fast growth means you don’t have the systems, which means people can’t step in as quickly. And you can’t get them up to speed as fast.

Jennifer Kerhin:
Shawn, you’re exactly right. You don’t sound like a know-it-all. You sound like you know it. [Laughter]

Shawn Busse:
I’ve just suffered it. Maybe that’s the way to say it. It’s not a know-it-all: it’s suffered together.

Jennifer Kerhin:
The good part is, I would say probably at the beginning of Q2, I will be out of the Valley of Death.

Shawn Busse:
So it’ll be over $5 million?

Jennifer Kerhin:
Yeah, so that’s a big one.

Jaci Russo:
It’s huge.

Shawn Busse:
That’s a big one, especially for a service company. That’s a huge milestone.

Jennifer Kerhin:
And just knowing the management level that’s in there, that they can handle that, these things are all off my plate.

Shawn Busse:
That’s great. Do you feel like you have the sales and marketing ecosystem to run at this point? Or do you feel like that’s still—

Jennifer Kerhin:
I wouldn’t call it a system. It’s there. It’s doing well. It’s not a system yet. It’s under-developed, as a process. That’s why proposals are taking me so long.

Shawn Busse:
Oh, and it’s on your plate, right?

Jennifer Kerhin:
Yeah, I have two part-time people helping me. I have a sales person who does new business, who goes out and gets new business. And I have a part-time marketing person, but she hasn’t—well, she just started. So, we will see. But yeah, that’s why it’s taking up a lot of my time. That is a goal for next year, by the end of next year, to systematize that so that it’s off my plate.

Loren Feldman:
Jennifer, the way you said that, it sounded to me like you were saying you will automatically exit the Valley of Death when you hit that $5 million mark.

Jennifer Kerhin:
No, no, no, no, no. To me, the Valley of Death is less about revenue. It’s more about management and things off my plate.

Loren Feldman:
That’s what I was going to ask.

Jennifer Kerhin:
Yeah, Shawn jumped in with revenue. It’s not that. It’s more that I have leaders who are trained, who can now start to implement standardization of workflow and over-supervise staff. And then, I got payroll off my plate. Payroll is off my plate. Financial and admin stuff is off my plate. I now meet the CFO, and it’s not low-level stuff. It’s high-level conversations. The last thing off my plate that is day-to-day is the proposal writing. Once that’s off my plate, then to me, I’m out of the Valley of Death.

Shawn Busse:
If I were to look at your CRM and look by leads-by-source, what would be the percent that are coming through that are not from you or your network?

Jennifer Kerhin:
I would say about 75 percent of our leads that turn into sales are from our tech partner.

Jaci Russo:
Really?

Shawn Busse:
Well, that’s a good tech partner.

Jennifer Kerhin:
Yeah, so it’s not me.

Shawn Busse:
Is that locked down? Could they go somewhere else? Could they get bought? Etc.?

Jennifer Kerhin:
All of the above, yes. But they’re not feeding me leads out of the goodness of their heart. It’s because we’re the only services partner that works exclusively on their platform. So because of that, they don’t want to give it to anybody else. Now, if other services that do what we do decide to exclusively work on their platform—so it’s less about the tech partner, more about my competition—

Shawn Busse:
Or if somebody were to buy them that was a competitor to you, that would be bad.

Jennifer Kerhin:
That would be bad.

Shawn Busse:
That would be bad. So you sort of do have concentration risk within your market and ecosystem. Do you have a plan to offset that?

Jennifer Kerhin:
I do not. So this was a calculated risk about—I don’t know, 2019—five years ago, that people that do what we do—convention management, trade-show sales—work on multiple different event tech platforms based on clients. And I said: Too complicated. We’re going to stick with one platform, and we’re going to become experts at it. So if you ever use that platform, we’re the person to go to. And it’s worked out extraordinarily well. So as long as that company grows, we can grow, but it’s high risk, high reward.

Shawn Busse:
High reward, yeah. That’s great strategy. Love it.

Jennifer Kerhin:
Well, as long as the risk doesn’t come in. [Laughter] And I heard a phrase years ago that said: “Niche is rich.” Have you guys heard that? Instead of trying to be everything to everyone, if you become the best at a very small niche, it can be successful. And I think of myself as a whale in a puddle. In that small puddle, I am the whale, and I’d prefer to be a whale than a minnow. And to me, the size of the body of water is less important than the size that I am.

So I think sometimes when you start a business, when you’re trying to do everything to everyone, don’t. Try to focus on a couple things or one thing that you do extraordinarily well, and become the best at it. And I think it’ll take a little bit longer, maybe, to pay off. But when it does, it does well.

Shawn Busse:
How about you buy the tech platform?

Jennifer Kerhin:
How about they buy me? [Laughter]

Shawn Busse:
Okay!

Loren Feldman:
Jennifer, I wanted to ask you about one other aspect of what you told us, which is, you’ve been hiring high-level employees, and it’s taken a little bit longer to get them up to speed. Part of that, I assume, is because they’re coming from outside. It’s not like they grew up in your business. And that’s something that owners talk about a lot, when they have the choice to promote from within versus hiring from outside. Is it your goal to get to the point where you’ll be promoting more from within?

Jennifer Kerhin:
That was my goal before, and I promoted a lot from within. And we had some missteps. Really great people just maybe didn’t have the experience, whether industry or managerial, to be able to do it. And we had someone, about six months ago, decide to take a step back, and it’s the right decision. They were fantastic, really great at one level, but as the company grew, didn’t really have the skill-set and couldn’t ramp up fast enough. But now as the number two position in that department, they’re going to do amazing, because now we have somebody from the outside.

And so I gave that person room to breathe, to develop those skills, put them in a leadership training program, and then brought in someone from the outside who’s new. So, we’ll see. But I’ve been trying to promote from within, and what I’ve learned is, when you grow fast, people cannot grow fast enough with you who you need. And I’m trying to strike the right balance, from promoting from within but then getting people from the outside. I don’t know the right balance, but I know when you grow fast, it’s really hard. A founder like myself, an owner, will work nights, weekends, get training, listen to podcasts, do everything. But your average employee may or may not be able to do that fast enough for you.

Loren Feldman:
Are you confident that you got the right people when you hired from outside at these senior levels?

Jennifer Kerhin:
No. Who’s ever confident? [Laughter] That’s the hardest part. What does onboarding a higher level person mean, versus a recent college graduate? That’s a different onboarding. What are the things you have to do? How long do you have to take to see certain results? Is it, like I said, the three-month, the six-month and nine-month? The coordinator you should be able to see in 90 days. Or is it vice versa? The coordinator is going to take longer, but the directors should be fast. I don’t really know, and I’m trying to figure out whether—I do know our hiring process is getting better. We recently instituted an assessment. We’re doing Clifton assessments, StrengthsFinder, I think it’s called.

Jaci Russo:
Oh, yeah.

Jennifer Kerhin:
Have you heard of it, Jaci? We just started it, and it was really insightful when we were interviewing for a position. And we made them all take it, and then we’re like, “Oh, oh!” Things that came out that made it better to ask in the second interview. And so now we’re going to implement it across the board. How did you use it, Jaci? For new hires or current?

Jaci Russo:
New hires, new hires. And Enneagram and StrengthsFinder were the two we liked the best, but I’ll tell you, Positive Intelligence is pretty good too, and that’s all about your saboteurs. Fascinating insights.

Jennifer Kerhin:
I never heard of that one, so I’m gonna go take a look at that. I’m finding that the first interview helps you weed out somebody, but to get to the second or third, the outside assessment’s really helpful.

Jaci Russo:
Right. You know, we have this “Happy, hungry, humble” mantra. And so the hungry, to me, is people who really want it. And so we put them through the ringer: three or four rounds of talking to different people, and then we give them a paid project that has become the biggest indicator. And I mean pay. Like, no question. You’re paid a full rate. But it is fascinating to me, the people who will submit their work and no follow up: “How’d you like it? What do you think? What should I do differently?” Because I intentionally wait a couple days and: nothing.

Jennifer Kerhin:
Jaci, how big is this project? Is this a four-hour project? A four-week project?

Jaci Russo:
We’ve got four or five different ones. We give them real client work, because we don’t want to game the system, and we give them exactly how much direction they would get if they were here. So, they’ll figure out really quickly what it’s like to work here, and it should take about 10 hours.

Jennifer Kerhin:
I like that idea. At a high level, right? You’re not going to give a college graduate that, or maybe you could, just different. But at a high level, that’s interesting.

Jaci Russo:
Everybody gets some kind of a test project.

Jennifer Kerhin:
Okay, okay.

Shawn Busse:
I agree with that. I absolutely agree with paying. You’ve gotta pay people.

Jaci Russo:
Got to!

Shawn Busse:
I don’t give them real work, though. I kind of disagree with that, because I don’t want there to be any resentment or thoughts like, “Oh, well, you’re just using work that”—

Jaci Russo:
Oh, we don’t use it.

Shawn Busse:
Yeah, I don’t want there to be any confusion. So we do made-up projects. But see, I like the made-up project, because then you have consistency. Like, I give the same project to multiple people over time, and then you can see, like, “Oh, wow. This person handled this this way. This person did it differently, this way.” I like that consistency.

Loren Feldman:
I was going to ask: Jaci, how do you think about the issue of promoting from within or hiring higher-level people from outside?

Jaci Russo:
We’ve gone through the ringer on this, and we’ve had years where it was: You became an intern, and then you became a paid part-time employee, and then you became a paid full-time employee, and you’ve never worked anywhere else but here. So you have a very limited appreciation for all of the great benefits that you get. You think it’s like that everywhere, and that’s a challenge. We have hired what I would classify, for easy jargon, middle managers from other places, and they come with bad habits, so we’ve been through the ringer. There’s pros and cons everywhere. I think for us, it’s really come down to: Are you the right kind of person?

And so, doing the rounds of interviews—which, I’m the last one. I’m not the first one. I’m the very last person they meet with. I’m going to look at their resume, and I’m going to give them a quick, “Yes, you can go through the process,” or, “No.” But once they’re in the process, they’re going to meet with different departments. They’re going to do peer interviews. And it’s 15 minutes. I mean, nobody’s driving over here. It’s Zoomed. We’re trying to keep it simple.

But how frustrated are you going to get with the process? That’s going to be part of it. And how well do you interact with different people? And then the paid test project. And if you’re the right fit, great. You’re going to be here for a long time. We’ve got employees who are going on multiple double-digit years. And now I feel like we’ve won, and I just have to do everything possible to keep them happy and here.

Shawn Busse:
Jaci, I’m glad you said some of that, as I’ve had that problem too. To cultivate from an intern, there’s a shadow side to that. And we had to part ways with an employee a couple years ago, and she was delightful, just a lovely person, but man, she had just stalled out in her career development.

And it was really frustrating because there was nothing for her to compare to. She just didn’t really recognize what the opportunity was, how kind of amazing it is to be able to shape your career. She didn’t really know how to do that and was just kind of stuck, and, man, that was a hard lesson. Like you, we don’t hire interns anymore. I just don’t do that. I want people who’ve been somewhere else and have struggled in their career somewhere else. I don’t want to be the one to introduce them to that idea. It’s just too painful.

Jaci Russo:
So, I have a question for you: What do you do when great people, who have been with you for years, but technology has provided opportunity? How do you either reassign them, retrain them, or release them?

Shawn Busse:
When you say the technology has provided opportunity, that sounds like coded language for: They haven’t kept up, or what do you mean by that?

Jaci Russo:
I’m a little bit thinking about me and some conversations we’ve had lately, but I’m specifically thinking about a client who has a tech company. The employees are delightful, great, awesome, and really do an incredible job. But the industry has changed, and the way that the industry has changed, the revenue is now coming from different departments and these people—that’s not their skill-set.

Shawn Busse:
Right. I mean, I think you and I probably face a similar situation. If you think about you and I probably made a bunch of money over the years doing design-y stuff, right? Like clipping photos out of a background: at the time, technically complex stuff that other people couldn’t do. And we’ve just seen that arena become commoditized. And I have definitely had employees who just won’t change with the times. That’s so hard because, you’re a good person, you’ve done years of good work, and I hate to say it, but that job is disappearing. And we need to get you a new set of skills. Boy, it is tough. Some people don’t know how to do that. It’s really hard.

I mean, I had a really lovely young man who started out as an intern, became our web developer—you know, in-house guy—and he was great. And then I just saw the writing on the wall for our business. I’m like, “I need you to be able to meet with clients. I need you to actually guide them through the process.” And he was like, “I just want to sit behind my desk and code.” And so I basically found him a job elsewhere. I literally called a friend, and I was like, “Do you need a great web developer? I’ve got one.” Fundamentally, I was like, “Hey, man, this job is changing. This is what I need you to do. Do you want to do that?” And he’s like, “I don’t want to do that.” I’m like, “Okay, all right.” I think that is a really hard real phenomenon.

Jaci Russo:
It’s a challenge. And it’s like, what kind of company are we? Are we the kind of company that cuts people loose when I can’t use them anymore? Are we the kind of company that values our people?

Shawn Busse:
Yeah.

Jennifer Kerhin:
Well, isn’t that business, though, Jaci? I mean, if you don’t need them, how long are you going to wait? Three months? Okay, but you can’t hold them for a year.

Jaci Russo:
Right.

Shawn Busse:
Oh, yeah, I can! I can totally lose money for a year. [Laughter] I mean, I have.

Jaci Russo:
But that is part of the challenge.

Jennifer Kerhin:
Sure, and I think part of it is emotional. If you just look at straight numbers, outside analysts can say, “Get rid of that person. Get rid of this person,” whatever. And when you see the emotion behind it, it tells a different story: Whether that person was willing to work on a Sunday to get a project done, or, for us, at the last minute was able to travel somewhere, their willingness to jump in and help, you want to hold them as long as you can till more business comes. But on the other hand, sometimes skill-sets change, and that’s the hardest thing for a business owner, is the right staffing at the right level. And labor is not easily changed in and out.

Shawn Busse:
Yeah, for sure. I mean, that’s the problem with, basically, the work world. I was thinking about this today. Somebody was making an argument on LinkedIn that, “Oh, employees are just like athletes. They have stats, and you need to measure those stats. And if they’re underperforming, you need to get rid of them.” And I’m like, “Dude, no way.”

It is so complex. The interconnectivity between employees, their communication skills, soft skills. There’s a ton of stuff you cannot measure, and that’s the thing. We’ve moved into a knowledge-based sort of world, which means you have unique things you do in your company that are not easily found on the street, which means you have to train people. I just think it’s really hard. That’s just the way it is.

Loren Feldman:
Let me jump in here. The clock is ticking, and I don’t want Jaci to think she’s getting off the hook. Jaci, how’s your year ending up?

Jaci Russo:
Oh my gosh. You know, I signed up to do these things because I was given a guarantee in writing. There was no math. And now there’s math. [Laughter] This is not my favorite thing. I don’t like the math. Loren, as we’ve talked about in our Founding Members Mastermind monthly, last year and this year were some really weird up and down years for me. We’ve had this kind of steady growth. I look back at ‘20, 6 percent; ‘21, 3-percent growth; ‘22, 43-percent growth; ‘23, 13-percent growth. So it’s been good to steady, and I knew eventually it was going to kind of top, but I was shooting for 10. I thought a solid 10 percent would be great. And this year, I started to think, “Oh, man, we’re not going to get there.” And all of a sudden, in these last few weeks—we never get new clients in December—there are five who are asking to hire us. And that never happens.

Shawn Busse:
It’s the same with us. December is usually dead, right Jaci?

Jaci Russo:
Dead. Dead.

Shawn Busse:
And the same. It’s like, all of a sudden, my pipeline’s full, and it was dead over the summer.

Jaci Russo:
Dead, dead, dead, D-E-A-D, dead.

Jennifer Kerhin:
Yeah, me, too. Decembers I get some, but not the level of requests in my pipeline right now.

Shawn Busse:
I think there was just universal paralysis for 2024. People were like, “Eh, I’ll kick that down the road. Let’s wait till the election’s over. Blah, blah, blah.” Just totally not taking action. It drove me crazy. This year was just terrible for that.

Loren Feldman:
Jaci, what do you think changed for you? Do you have any idea?

Jaci Russo:
Well, we’ve done some smarter things with processes. We’ve gone back to some basics. We had a very good, I think, discovery meeting-to-proposal-to-presentation system that we developed over the early years that was real personalized. Much like Jennifer, we spent a lot of time really making it top notch, and we got into a position for those years of growth, growth, growth. We had a crazy quantity of discovery meetings. Some months we’d have 30, 40, 50 discovery meetings in a month, because it wasn’t my leads anymore.

We were getting all these outside leads, because we’re like, “Hey, we’re going to work on an inbound campaign. We’re going to do more outbound marketing. We’re going to pull them in from all these places.” Because, to your point, Shawn, I didn’t want all the business to be because of my network. We needed to have a real system. So we’ve got a system in place. The system worked. It changed our closing numbers a lot, but also they weren’t—

Shawn Busse:
The quality went down, didn’t it?

Jaci Russo:
Yeah, but our three biggest clients came from that. And so, we had to trade off some personalization. So this year, we’re like, “Okay, reassess.” And we went back to lower quantity, higher quality of lead, and we felt like the reflection then was going to be a more personalized proposal. And so we had to make some modifications to get back into that. But now, all of a sudden, the yeses are coming quicker.

Loren Feldman:
Did you change your pricing?

Jaci Russo:
Oh, as you happen to know, Loren—I love when you ask questions you know the answer to.

Loren Feldman:
You didn’t have to tell everybody that, Jaci! [Laughter]

Jaci Russo:
Oh no, I’m throwing you under the bus, buddy.

Shawn Busse:
This show is scripted. Anybody who’s listening, we planned this all out.

Jaci Russo:
No, I didn’t know he was gonna ask that, but he did just hear the answer to it yesterday.

Loren Feldman:
Thanks a lot, Jaci.

Jaci Russo:
Oh, Loren, you’re not getting away from it, man. You’re not getting away. So yes, Loren, we did change our prices. Coming out of ‘19, when I did Goldman Sachs 10,000 Small Businesses from January to May of ‘20—so the end of the teens—we went through a lot of change. No more project work, period. It’s all got to be strategic brand plans. The implementation of those plans. That was awesome. That made my heart happy. That’s been the best thing we ever did for our business.

And Goldman Sachs realized, “Oh, we’re not charging nearly enough.” And so that education and the time that Covid provided me gave me a lot of time to really do the research to figure out what those numbers should be. And so we were at a good place over the years. More people were interested. The prices went up. We want to have bigger companies. The prices went up. Well, I had to do some assessment this year, because we’ve gotten more efficient with a lot of things. Things aren’t taking as long as they used to. We’re smarter, better, faster, and I’m doing a lot of research on the psychology around numbers and understanding how much I love round numbers, but buyers don’t love round numbers, and I need to do some work on adjusting that.

So we did a lot on pricing psychology. Referenced a lot of research from Nick Kolenda. It was a great podcast—not any greater than 21 Hats, of course, but in addition to 21 Hats—called Nudge, and he was a guest on it. And he’s got this great book on marketing and psychology and pricing and stuff. Anyway, all that to say, we didn’t just change the value, but we also changed the presentation and digits of the numbers, and it’s been “Yes, yes, yes, yes” in a row. It’s crazy.

Loren Feldman:
So how is this affecting your planning for next year?

Jaci Russo:
I want more of it, please. Always more.

Loren Feldman:
Are you budgeting for more?

Jaci Russo:
We are. We’re staffed for more. We’ve got capacity, and we’ve got an office of full-time employees. And then we’ve got some independent contractors, because they like that life, but they’re practically in with us. I mean, they do work for other people. We’re following all the rules. They’re not really employees—in case the IRS is listening. But they want more. They’re asking for more, and so we’ll have more to give them.

Shawn Busse:
Do you ever slow down, Jaci?

Jaci Russo:
No, sir, [Laughter] Absolutely not. There’s not enough time. Time is too short. I’m only going to be here a little bit longer, and I want to make the most of it. Now, somebody the other day asked, “Okay, if we took away the coffee, how would that affect you?” I was like, “No, if I started to drink coffee, how would it affect me?” I only drink water, just water, no alcohol, no soda, no coffee, no tea. Just water.

Shawn Busse:
Wow.

Loren Feldman:
Jennifer, I wanted to go back to something that you raised in our emails before this session. You raised the issue of training employees to use AI. What’s going on with you that made that an issue you wanted to talk about now?

Jennifer Kerhin:
I’ve realized that a couple people that are tech curious are going to use it, but I have to be the leader training everybody to understand and how to start it. The week of Thanksgiving is always kind of quiet for us. So the Tuesday before Thanksgiving, we did a three-hour AI training, basically. And it wasn’t training. I think it was called AI innovation fun. And what we did is, we had someone do a 20-minute presentation of slides, like: What is AI? The different types of ones out there. Here’s some ideas, blah, blah, blah.

And it was really cool, because she did all these slides just to get everybody from the 22-year-old, recent college graduate to the 60-year-old who’s been with us just thinking, assuming they’re starting from zero. So some basic overview: ChatGPT versus Perplexity versus Claude versus what Grammarly does on AI. And at the end of it, it was really funny, because I didn’t know she did this. The slide then said: This entire presentation and slide deck was created by AI. So, it was really cool.

And then we broke up into small groups. So then for the next hour, each department, we had a leader, and they just played. So my sales team pulled up ChatGPT, and they just had different things that they were playing with. So we just allowed them to have fun with it. So they had to take a picture of their desk and put it in and say, “Please organize my desk.” They did fun, cute things, and then they went to work. Then we came back, and each department did a presentation of what they did. So, it was fun to see what other people would do. And then we had a brainstorming session, and we did quizzes, and we went back.

And so, trying to get everybody up to speed on: What does it mean? How can you use it? Just start playing. Just create it. Who knows? It’s kind of crap in some ways, and other ways, it’s amazing. Just put anything in there. Put it on your phone and talk to it. And they were all very excited about having the opportunity to play at work on something that they were all very interested in. And so I’m going to do this probably once a quarter, so we can start adding AI into our workflow. I don’t know how yet, besides writing, and the writing of AI sounds like AI, so how to change the tone or whatever. But if I don’t do this, I feel like I’m almost a little too late.

Shawn Busse:
I found a great use of AI writing, actually. I got an email from my IT vendor, and they have a person on their team who is just terrible at communication—shocking!—and he always writes in this tone that’s condescending, and it just grates me. It’s sort of like, “Well, as we told you before, blah blah, blah, blah.” It’s like, oh man, that is just really bad. And so, anyway, rather than get pissed off about it, I fed his message into AI. And I said, “Rewrite this in a tone that’s more friendly and team-oriented.” And it did a pretty good job on the first pass.

And I was like, “Well, do this, but less,” or, “More of this.” And by the time AI was done with it, it was a good email. I was like, “Oh my gosh. I don’t know how to tell my IT company, but they need to use this tool.” It takes coaching, right? It needs somebody. They’ll need a human to review it, because the person who’s doing the bad communication doesn’t have the self-awareness. But man, it was a really good application of AI. The before and after was profound. So anyway, if you’ve got bad communicators, you can use AI to improve their writing.

Jennifer Kerhin:
Yeah, I agree. And there’s so many possibilities between analysis, between image creation, between slide creation. The possibilities are endless. I just need to get my team moving that way. Do you think, Shawn, everybody on your staff does that with ChatGPT, or whatever AI you used?

Shawn Busse:
Yeah, you know the good thing: I have a couple people on my team who have been pushing the exploration forward. And there are some people who clearly have very little interest in it, and then there are others who are really fascinated by it. But they’ve made it part of their kind of ongoing discussion, because it’s disruptive. It’s incredibly disruptive.

Jennifer Kerhin:
Especially in the marketing world.

Shawn Busse:
Oh yeah, totally. I mean, I’m glad that I’ve been moving away from transactional marketing for years.

Jaci Russo:
Yes.

Shawn Busse:
All those crappy blog posts that many agencies were paid to write, why would you pay an agency to write a crappy blog post anymore? If you’re gonna write a crappy blog post, have AI do it. So, yeah, I think it’s really important that every business figure out how it’s affecting their organization.

Literally, I have a client that came to us, and they said, “This is our marketing plan.” And I took a look at it. I was like, “Wow, that’s really standard.” And then I went over to AI, I was like, “Hey, write me a marketing plan for XYZ type of business.” And it spit out, basically, the marketing plan they had built as human beings. Because it wasn’t very remarkable, right? And so I think a big part of the puzzle is, you, as an owner, are going to have to focus on things that are really high-value and hard to create, because copying other people isn’t going to do it anymore.

Loren Feldman:
Jennifer, I was thinking about it when you were talking about how much time writing proposals is taking you. And I’m wondering if Shawn or Jaci have used AI for proposals?

Jaci Russo:
I do. I do. I have two suggestions that make it very helpful. We use an AI recorder in our Zoom meetings. We happen to use Read AI, but there’s plenty of them—Otter or whatever. And we take that transcript and drop it into AI and tell it what we want to accomplish with the proposal. And that first draft is probably 75 percent right.

Shawn Busse:
Wow.

Jennifer Kerhin:
Does that include pricing, though?

Jaci Russo:
Sure.

Jennifer Kerhin:
My biggest thing is pricing. That’s what’s taking by far the longest, the descriptions. And I think it’s just because it’s so customized, what we’re doing. I don’t know. I have to figure out a way—that’s a 2025 goal—to make it less custom or faster. Somehow, I have to do it.

Shawn Busse:
I mean, you could feed it all your past proposals with purchasing, and then you could build basically your own learning model that would understand, “Oh, when these keywords are used, it means pricing is more oriented this way.” I think that’s your path to solving some of that.

Jennifer Kerhin:
Well, I look forward to accomplishing that, because it’s a big time suck, and I know it shouldn’t be. But that’s for next year.

Loren Feldman:
Jaci, you’ve told us in the past that you’ve looked over almost all of your processes for ways that AI can improve them. Have you actually trained your employees to use AI?

Jaci Russo:
We have, and we’ve made it a team sport. Everybody has to train somebody else. You know, Maria went and learned how to do this one thing and then taught the rest of us. And Kennedy and Morgan learned how to do something and taught the rest of us. I learned how to do something and taught the rest. Michael’s learned. And that’s how we’ve kind of divided up the challenge of incorporating it so it’s not resting on any one person.

And so, Jennifer, I feel your pain. I feel like, a lot of times, I have to put them on my back and carry them to the new land, but I’m like, “I’m not doing that anymore.” Everybody’s going to learn this stuff, because it is our future, and the people who don’t know how to use it are the ones who don’t have a future.

Jennifer Kerhin:
I totally agree with that, Jaci. Everybody’s got to learn it, and you have to start off slow, start to feel comfortable with it, and then try to be creative with what’s possible. I met someone at a conference about a month ago. He has it on his phone, and he talks to it. He uses it for advice on how to talk to his 13-year-old teenage daughter. [Laughter]

Shawn Busse:
That’s amazing.

Jennifer Kerhin:
It is. So on the way home, he’ll say to ChatGPT, “Okay, my daughter has this issue. Please tell me how best to approach her. Blah, blah, blah.” And it spits out answers to him. I was like, “What?!!” It never occurred to me to use it like on a personal, like therapy basis, but—

Shawn Busse:
My creative director’s having conversations with it. You know, he’s basically like trying out ideas: “Has anybody ever done this?” Or, “What could work in this arena?” It’s just sort of like a riffing tool. You know, like musicians riff with each other, and it’s pretty interesting. That conversation piece is pretty cool.

Jaci Russo:
I feel like it’s a brainstorm partner.

Jennifer Kerhin:
Yeah, I used it. I was in Poland recently for a site visit, and then saw some family, and I asked it to find me places to buy ingredients for a Thanksgiving dinner. It was the week before Thanksgiving, and it created an entire menu—all the recipes and the locations and the stores of where to find them. And it even said, “You will not find a whole turkey anywhere in Poland. You’re just gonna have to buy a turkey breast.”

Jaci Russo:
Oh my gosh.

Shawn Busse:
And you know what it didn’t have? The stupid recipe sites and all their pop-up ads.

Jennifer Kerhin:
That’s right, that’s right. Not yet. At least not yet, Shawn.

Loren Feldman:
Jaci, you mentioned brainstorming. Can you give us a sense of what kind of brainstorming is that? Marketing plans for a client? Or is that about strategy for your business. What have you done?

Jaci Russo:
All of the above. Look at this P&L statement, and tell me where I need to make changes in our books. Look at this budget, and tell me where we may be off. Because, again, I hate math. I love the brainstorming piece of it, because there’s no judgment. I feel like I can bounce different ideas off of it. I’m not going to take what it says and just use it outright, but it gives me a really great starting place to help coalesce my thoughts.

Loren Feldman:
Are you doing this on ChatGPT?

Jaci Russo:
Typically, yes. Yeah. I mean, I do play around with some of the others. You and I’ve talked a lot about Scribe, which is one of my favorites. Grammarly, obviously, is one. I love that QuickBooks is starting to bring in AI, so it’ll just automatically scan invoices now.

Jennifer Kerhin:
Really???!

Jaci Russo:
Oh yeah. Have you not played with that?

Jennifer Kerhin:
I have not!

Jaci Russo:
Let me change your life! If you have the digital version of it, whether they emailed it to you or you scanned it and saved it on your desktop, however you got it, I don’t care, you open QuickBooks and you go to Bill and you can upload from desktop or upload from computer. It will bring it in, and if they already exist as a vendor, it will match, match, match, match. And all you have to do is approve.

Jennifer Kerhin:
You know what? So I use Bill.com in addition to Quickbooks. It does that. Yep.

Jaci Russo:
Which is why I canceled my Bill.com subscription, because QuickBooks now does it.

Jennifer Kerhin:
Oh, all right, I gotta look, because Bill.com is not cheap.

Jaci Russo:
No, it is not.

Jennifer Kerhin:
Good idea. Okay, see? There’s gonna be so many things.

Jaci Russo:
You’re more profitable now.

Jennifer Kerhin:
There you go. There’s so many things that we are not even scratching the surface on that I’m really excited about.

Jaci Russo:
Me, too.

Loren Feldman:
My thanks to Shawn Busse, Jennifer Kehrin, and Jaci Russo. Thanks so much for sharing, guys.