Was for Callus Group.
Derek Kalles: 11:42
The callus group was the security operations project. Like it was helping optimize security operations in a large organization. And, you know, through that, you know, the, you know, the outward facing of the business to kind of, you know, how much do we play with the word staffing? How much do we play with the word consulting? Do we help, you know, build teams because we’re great at building teams?
Or do we just go do project based work? All of that was an evolution. Yeah. But we never lost the thesis of security. And we really never lost the thesis of the, you know, the core, you know, the core values of integrity, purposefulness and ownership.
It had. It’s kind of like that old quote. It’s, you know, it’s easier to write something longer than to write it short. And I didn’t have time to make it short. There were a lot more words in the beginning to know where we’ve landed and having that real focused thesis on securing the future for all of us.
And we have actually recently built a sub like a sub supporting sub brand and Kalles digital to kind of support the more transformation component of it. Because I think our special sauce is we’re human centric, even in the world of AI and automation, you know, putting the human in the middle when it comes to security so that we can also traverse, how do we empower people? How do we empower processes to make security a part of the, you know, the daily life and the transformative element of a business versus just, oh, big walls, let’s put up walls, let’s slow everything down. And that was a little.
John Corcoran: 13:13
And that’s a, that’s a great tension right now because, you know, we were talking beforehand. I installed OpenClaw on my computer not too long ago and my phone is actually a VPN and I access it through my phone. And this has been a hot thing the last, you know, month or so. Really big topic, but also a lot of security concerns. And, and so like, as we move into this new world with AI, there’s new security concerns that are coming up.
Derek Kalles: 13:38
Absolutely. And that tension is not going to go away. And I mean, some of the thesis of what we were just talking about dates back five, six years ago. I mean, this message has evolved, you know, incrementally. But now bringing that message into today, right, of how security is.
Transformative and recognizing that what’s transformative now is, you know, with a rocket engine, you know, attached to the back, you know, versus what it was even just five years ago. So, you know, you, you brought up OpenClaw and, you know, the wide aperture by which it consumes data, by which it, you know, creates its powerful capabilities. These are things companies have to wrestle with. And, you know, where they fall in the spectrum of, you know, risk tolerance. And, you know, the answer can’t be no.
The answer has to be yes. And how. That’s the reality that we see. And that’s and that comes in different, you know, we can go a lot of places with that. But I think these, you know, these first order principles on democratization versus control speed versus risk experimentation versus standardization, productivity gains.
John Corcoran: 14:50
These things are showing up so much. It’s crazy how much these things are coming up. Even just last week, there was this. A friend of mine works at meta and I sent it. He hadn’t even heard of this, but there was this thing that went viral on Twitter that this woman who was like head of AI and security, some security role in AI at meta had opened, installed OpenClaw, which was then going to delete her entire inbox or something.
She wasn’t quite sure why. And she had to run to her Mac mini to like, unplug it to prevent it from happening. She had tweeted about this on a Sunday night for some reason, had shared this and it went viral, of course. Right. And that’s meta, right?
You know.
Derek Kalles: 15:27
Yeah.
John Corcoran: 15:28
And then, you know, the same group of friends, this other friend who works at a company that’s kind of like a fintech company. She was telling me about how she’s testing around ChatGPT and stuff like that. And of course, registering like free accounts, you know? So I think what we’re seeing right now is a lot of workers and people like that are if their employer doesn’t give them access to these tools, they’re going and doing it anyways, but they’re setting up a free account. They’re uploading maybe some sensitive client information, right?
And that information is going to be used as training data and be publicly accessible. So these are all things that are happening in real time. It’s wild.
Derek Kalles: 16:02
Well and that comment of centralization versus democratization, it is real. And when I’m talking to technologists that are, you know, maybe 25, 20, 25 years into their career, you know, we talk about SaaS, SaaS, and now here you say there was a central administration that was just built into architecture and the thinking that went into even these technologies, even when we moved to the cloud, right, there was still this centralization, you know, platforms, whatever, we’ll call it, whatever striation of AI that we’re talking about because there’s lots to it. Is it not built that way? They are designed to empower that end user, you know, whether or not you want to or not. So when we’re talking about, hey, how do we bring, you know, governance?
How do we bring risk decision making? How do we capture this productivity that everyone loves to share and talk about, but still not show up on the cover of The Wall Street Journal. This is what executives are having to wrestle with. And that’s where I really bring it back to. It’s.
Yes. And you’re not going to be able to say no to AI. You’re not going to be able to say no to security. We know that. You know, you’re not going to be able to say no to product advancement.
You know, you’re not going to be able to say no to your people. You like the example you just said, so what do we do? And that’s, you know, that’s where it comes together is bringing that flavor of how you manage the ongoing journey of bringing AI and the flavor of AI right into your organization. Is it a GPT? Is it just chatting?
Is it, you know, a true agent that is handing off and orchestrating and talking to one another? Like what? What are we really doing with it? And those are, those are some messy conversations in my business right now. And there’s no one size fits all.
John Corcoran: 17:44
Is it challenging for you or you as a company to stay abreast of all these things? I mean, the pace of new announcements is just wild.
Derek Kalles: 17:54
It’s funny. Earlier I was having a virtual lunch with one of my team members on one of our larger accounts. And, we were having just the same conversation of how do we better share and collaborate as he’s, he’s actually running an AI productivity project for us for some time now. How do we stay on top of it? Because the answer is we can’t, you know, and what’s what I’ve noticed is an interesting sediment, whether I’m talking to a CISO, a CIO, a CTO is that anyone says that their, their, their pure form expert. And, on top of all of it is probably not being truthful because really the greatest amalgamation of knowledge around AI and what it can do, whether the LM model or at the agent agent building mode or the iPods level, like it’s a collection of people and organizations.
It is not. Yeah, this is the one. So for us, it’s trying to stay focused on how cyber security and how security shows up in AI. And then that connection points to how being secure with AI connects to those kinds of cultural emotions of bringing it into the organization. We are not going to purport ourselves to be experts in all things AI.
It’s more of, you know, how do you bring it in a pragmatic fashion that is demonstrable versus just, oh, look at this bright, shiny object.
John Corcoran: 19:14
Well, what you’re describing to me sounds a little bit like a consultative role where you need to, just talk a lot of these things through with your clients. Are you finding that that is the case now that you’re having to do a lot of those sorts of things, like just hold their hand and help them think through these things?
Derek Kalles: 19:32
I think the framing is one of the bigger value adds. You know, people want to jump right into the tech, the technical bits of like, well, what about this tool? What about this? How do we connect this? How do we get our underlying data to work?
Right? How do we stay compliant? How do we get compliant? And those are very, very important things. But depending on the elevation of the organization and the size of the organization, just helping frame it, frame the conversation around the right thing, going beyond even, well, what’s the use case and the value, right?
Like it’s okay if the use case and value is there. Can we get there? How do we get there? You know, is it going to be all different by the time we get there? Oh interesting.
Right. Like, and kind of getting really trying to land on some of those for what are the, what are the first order principles that you really care about? And you can’t have a list of 50 of them, right? And they can’t look like they just came out of a textbook. Like we need to say, here’s the three things that are non-negotiable as we just navigate all these unknowns because you’re not an expert.
I have flavors of expertise.
John Corcoran: 20:42
I mean, even the biggest experts don’t know right now. You know, I mean, some of the biggest experts out there don’t even know Dario Amodeis, the Sam Altman’s are saying that there’s a lot of unknowns that they’re considering, considering everything that they know. We could talk about this all day, I’m sure. But another thing, there’s a couple of things I want to move on to.
Derek Kalles: 21:00
Yeah. Please.
John Corcoran: 21:01
Okay. So one thing that’s fascinating to me about you is that you run four different businesses now. You got a couple other ones, so we’ll make sure we spend some time on them, one of which has been, you know, in your words, a bit of a challenge. So Fieldnotes AI. So what was the original vision behind Fieldnotes AI?
And tell me, take me through a little bit of the, you know, the, the struggles with that one.
Derek Kalles: 21:23
You know, when I came out of university, I knew I was going to be that person that never knew what he wanted to do when he grew up. That hasn’t changed. You know, 20 years later, I am still that person and very, very curious sometimes, you know, very much to a fault at times. And, just like, you know, my father’s influence on me, I’ve had a strategic partner and investor who has been instrumental to me in kind of capturing opportunities with people that you really just want to be around. Like you get one, you get one chance at this rodeo, like work with interesting people, work with people that you care about, work with people that when those hard times come, you can partner through things, right?
And Fieldnotes was one of those. I really wanted to learn how to build SaaS software. There was a couple, a couple friends of mine that we had been working together and even been customers and helped, you know, and done a number of venture things together. And we saw some real gaps in capacity and resource planning. So kind of PM, so project management, that’s where it started.
And then it evolved upstream to realizing the data capture challenges of even making software like that work, which are the classic garbage in, garbage out that you see in CRM. And then within that, we pivoted even more to realizing there’s some lightweight CRM and like pipeline activation we could do. We were like officially turned away from PM into this and then going, wow, why are we having humans do this alongside a light piece of software? How do we get AI to hell? You know, this was starting some of the early even pre antics, like how do we get AI to help us, you know, machine learning to help us.
And so I mean, the business on its fourth pivot, the, you know, the primary CEO and founder, you know, they’re, they’re doing a great job, continue to innovate in this space. It got further away from where it started and, you know, really into the sales and marketing space, which isn’t obvious. I have sales and marketing in my ventures, but it’s not my expertise. And he has built that. And so, you know, I still am a part of it in an advisory role. But again, it’s, it’s one of those journeys where, you know, you started here, you had some personal growth ideas and great people and saw some market fit, and then you realized you didn’t have market fit or your capital structure wasn’t right.
Or, oh, this could be a better place to go. And, you know, you know, the journey is never linear. It’s never, you know, X marks the spot and I shouldn’t say never. More times than not is not, at least in my career. And some, you know, still have good strong relationships there and some incredible learning, you know, learning lessons that I have shared with many of folks on, you know, how to how to bootstrap, how to build ventures, when to think about, you know, bringing in venture capital, like how does that, how does that work?
And, you know, how do you, how do you stay true to just working with really, really interesting people that you care about in this, you know, this, this journey of life and entrepreneurship.
John Corcoran: 24:23
All right. You got a couple other businesses. We don’t have to go through each of them, but at least four. How do you manage all this? How do you know, you know, you, you, you manage to keep an eye on each of these as different ones are undergoing pivots, different ones that require different amounts of your energy and time.
Derek Kalles: 24:40
Yeah, it sounds like a cliche, but there’s a very personal truth in it. When you work with and work with great people, you can. You can build systems and processes around that too, to operationalize and sustain businesses. So, you know, I built another, you know, staff. I built another consulting company out of Carla’s group in the finance space with an incredible team member and employee and helped partner in having her be that CEO and run that business.
You know, the, the, the, the property management business is still in my portfolio. And I’ve brought in some key team members and other partners that I’ve already worked with into that business to help my dad, you know, who has now officially retired, which is fantastic for him. And, you know, he’s built a legacy in helping establish that business and the influence it had on me. And, you know, the, you know, the field notes journey along the way. Carla’s group.
And, you know, and here I am again looking at, you know, founding another company, you know, truly in the agentic in the agentic AI space and I’ll keep. I’ll keep that one a little coy for. For the moment, but, you know, I think it’s, I think, part of the exciting part of being an entrepreneur and I’ve gotten involved in the University of Washington is launching an entrepreneurship through acquisition program and curriculum and.
John Corcoran: 26:03
Oh, yes. Yeah, Walker Deibel kind of wrote the book on that. Great guest on this podcast.
Derek Kalles: 26:09
Yeah. So I’m, you know, leaning into that space is kind of a philanthropic back to my university and helping, you know, the, you know, both, you know, younger entrepreneurs as well as seasoned professionals that want to step into the world of entrepreneurship. And I just, you know, when people ask me, like, what’s my core thesis, it’s always building and doing it with people that I’m going to be proud to see, you know, have successes and, and have wins. And, you know, that’s what I try to stay close to. So managing that portfolio is not easy.
It’s hard. And, but I think if you have great people and you recognize you can’t be the hero, you really have to fight that hero syndrome. Yeah. And, you know, be okay with things not being done. Always the way you want them.
You know, you’ve gotta. Yeah. You know, and that’s a, that’s a daily thing, you know? Yeah. We all have ego.
We all and we show it up in different ways. And but you gotta, you gotta face those things down.
John Corcoran: 27:06
I want to ask you about what you mentioned, you know, earlier in your career, before you had kids, it was easier to put in the hours to, you know, have your foot in different places. Now you have a foot in four different places, possibly starting a fifth, but you have children. So how has that shaped you or changed your approach? How do you manage it now that you have kids?
Derek Kalles: 27:26
Yeah, it’s I mean, one, none of it would happen if it wasn’t for, you know, my wife and my partner in crime. So yeah, there’s an important partnership there. And, across all three of my kids, it’s, you know, it, it has changed some of those nuanced time management skills, some of that. What’s the focus? You know, where do I have to go?
I have to let go of things more, you know, technologies like agenda, you know, you know, AI have helped be able to move faster and move quicker through, you know, ideating through things. But, you know, the rhythms of your day and the rhythms of what’s negotiable and what’s non-negotiable just become more heightened. And, you know, those trade off conversations are, you know, more finite. And so I wish I had a perfect system. I think there’s lots of incredible literature out there.
Atomic Habits, you know, down to, you know, oh, there’s just so many I could list, but it’s yeah, I think you have to find what works for you and how your family rhythms, how your work rhythms, like when you’re. And I think the last thing that I would share is just one of my hacks is really realizing the time of the week or the time of the day where certain work best fits and if at all possible, I try to do. I try to fit into those. If I am working on something that is more greenfield or thinking it is better for the morning, if it’s just working hard on a bunch of things that can always be in the afternoon, you know, if you know, kind of like the time we’re talking right now is a time where I’m on my best, like ability, ability to speak hopefully, clearly, we’ll have to see what the audience says.
John Corcoran: 29:12
But like.
Derek Kalles: 29:13
You know, because I am a talker is kind of like picking those spots and being okay, honoring yourself to go, hey, certain times of the day and certain moments are better for certain types of outcomes because you just don’t. It’s not an unlimited capacity because.
John Corcoran: 29:25
Yeah, it’s funny you mentioned that because I love doing podcast interviews in the afternoon because to me, it’s just a conversation, right? It’s just that it doesn’t require super hard thinking. It’s just two people having a conversation. And you mentioned Atomic Habits, James Clear was on my podcast way before he published that book.
The book has been a phenomenal success, of course. But I mean, credit to him. I mean, he really liked writing for his blog for years. jamesclear.com was just writing about habits and even before that had blogs previously that weren’t even about habits or about different topics, but he put those, those pieces in place, which so he really deserved all the success he got with that book. But I want to ask you about it, I previewed it at the beginning.
You went to Spain, actually for a period of time with your family. How long did you plan that in advance, and what was that experience like? Being able to like, go off and do that with your family?
Derek Kalles: 30:16
I mean, it’s akin to the entrepreneurial journey where it started and where it landed were two different places. So, you know, it was inspired by a number of folks in a business group that I’m a part of entrepreneurs organization listening to some of them do it, having, doing, having done similar things in their journey or ones not doing that and regretting it, you know, and it’s, and, you know, and then Covid happened and some health stuff happened in my family and, you know, kids get older and, you know, the time frames by which you can navigate it changed. And then there was this moment of just, you know, it was on our, on our bucket list for a reason to immerse our family, immerse our kids, immerse myself as a professional in a foreign speaking country for a reason. And, you know, sometimes you have to just say, I’m going to do it. And I’m just going back into how to make it happen.
And that’s what we did. And we went to live in Valencia, Spain, for a period of time. And, you know, I didn’t work a full schedule, but part of the part of the fun and the and the family enjoyed it too, is, you know, dad would have his, you know, Seattle working hours, you know, but in Spain, when I’d wrap up at 9:10 p.m. trying to overlay with Seattle hours, it was perfect because the whole family was ready to go to dinner. So, you know.
John Corcoran: 31:34
You think.
Derek Kalles: 31:34
Not to dinner?
John Corcoran: 31:35
Yeah.
Derek Kalles: 31:36
So, you know, you know, I made sure my number one priority was being present there and present with the family. And It challenged me as a leader to look at my leadership team and be more leadership led, not founder led, which is a whole nother rabbit hole. And you know, that journey has opened my eyes on how I have, you know, further have to be discreet in what I’m doing and the trade offs, you know, between ventures and staying hyper focused in the cyber space with Kalles Group, you know, it’s, it’s just another one of those entrepreneurial journeys that happen to have a really great personal impact. It was an incredible experience, and I know it will have a lifelong impact on my children.
John Corcoran: 32:20
Yeah, yeah, that’s such a great story. You mentioned it kind of like there’s a tension between, I know you didn’t use these words, but, you know, you have four different businesses that are pulling you in different directions. You got children pulling, you got a spouse pulling you in different directions. How do you deal with that without there being, you know, warfare between the different factions or jealousy or some kind of bitterness that he’s not as present.
Derek Kalles: 32:50
Those are I mean, it’s a tough question, and it’s a great question. And I really draw back to some of those 1% concepts. Right. You know, I think when you are, you know, I think certain motions in entrepreneurship really drive this. We absolutely need it.
Right now. We needed it yesterday. You know, this, you know, rapid, rapid expansion, rapid, rapid, you know, growth. Not all of the ventures that I’m a part of need that like you’ve got to pick, you know, so I think one way I navigated is kind of picking the spots from a, where can incremental change get us there? And am I okay with those timelines in partnership with those leaders?
And then where do we need to go bigger and faster right now? And that’s hard because I’m wired to go, let’s, let’s do it all yesterday. Let’s go, let’s go 100%. So I’d say some of the biggest tension is inside of me of going, okay, you know, you know, to, to navigate where I put my time, where time dollars go. You know, it’s thinking through that incremental change, you know, versus, you know, step change.
And when one or other one or the other is needed.
John Corcoran: 33:55
Yeah. Derek. We’re almost out of time. I want to ask you a question. I enjoy asking at the end of almost all these interviews.
So I’m a big fan of giving our guests a little bit of space at the end here to acknowledge people who’ve been there for them, who’ve helped them. You’ve mentioned key employees who you promoted and took more responsibility. You mentioned leadership teams. You mentioned your father. You mentioned key investors invested in some different projects.
Is there anyone that you would want to acknowledge for being there for you and helping support you in your journey?
Derek Kalles: 34:26
You know, I’m, I’m, there’s so many people and, you know, reflecting, reflecting on that in this moment, you know, I think of, I think of obviously my dad, you know, and his, his impact on me. And, you know, my, the, the opportunities that my parents gave me. I think about my, my, my spouse, Kirsten, you know, I think about kind of key, key people in that journey point, you know, CEC, Shawn, John, Rosie, you know, the list goes on and on. My, my entire leadership team at Kalles Group. Liz.
You know, and so I think there is this. There’s this collection of people that in this moment and the question you’re asking, it’s an opportunity to just recognize and be grateful for. There’s so many of these people that every day make me better because of their greatness. And I hope I have that impact on them. But I need to reflect and think and be thankful that, you know, yes, my university go dog, some big University of Washington husky fan.
Hopefully that doesn’t detract too many of the listeners here. But, you know, you know, gave me a, you know, cornerstones to that foundation. But it’s these people that have been a part of my world for so many years that really are the ones that push me, you know, cause me to read this book. Listen to this. No, Derek, you’re not thinking about this the right way, you know, and I assume positive intent.
Listen to them. And, you know, I become better because of that. And I think that is such a maybe a part of the entrepreneurial journey that gets lost. It’s that it’s that support network. It’s that growth network.
It’s that entrepreneurs organization out of Seattle. So many names that I could list there. It really is. Without those levels of community and connection, there’s no way I would be here or be able to sustain what I’m doing right now.
John Corcoran: 36:23
Yeah, yeah, yeah. I’m very active in San Francisco, and I know lots of members of the Seattle chapter that are really great people. So you’re really lucky to be in such a great chapter. Derek. Where can people go to learn more about you and Carla’s group and check out online?
Derek Kalles: 36:39
Yeah, I mean, Kalles Group kallesgroup.com is obviously going to, you know, drive you to the front side of our site. But then obviously on LinkedIn, I think, you know, LinkedIn is a great place to connect with me. And, you know, not only talk about the entrepreneurial things I do, but also the civic things I do, you know, around the University of Washington or in the foster care system. And I love, I just love talking to interesting people that are building things. And, you know, like you and I have a kindred spirit around EO, that the EO community is a global community.
And there’s just so many great connections out there. That’s how I was. You know, it’s been wonderful meeting you and getting connected with you. So I just think those are the, you know, LinkedIn is a great place to reconnect with me or connect with me for the first time.
John Corcoran: 37:24
Cool. All right. Derek, thanks so much.
Derek Kalles: 37:26
Thank you.
Outro: 37:30
Thanks for listening to the Smart Business Revolution Podcast . We’ll see you again next time. And be sure to click subscribe to get future episodes.