John Corcoran 10:04
Did you decide that it was time for you as the founder and CEO to move out of the CEO role and into a new role and hire someone else to replace yourself as CEO? Was there a trigger event where you burnt out? Or did you feel like that was just the timing was right, what
Mike Krass 10:21
What inspired it? Yeah, the thing that happened was, you know, we got through COVID, say, get through, we began the COVID experience and in 2020, I was still the CEO at that time. And I didn’t realize it. I think that that really weighed on me pretty heavily, and eventually went to my business partner who was our Chief Operating Officer. And I said, I’m really tired of being the CEO. Like, what I know now, two and a half years later, that I couldn’t put into words, back then was, I’m tired of knowing literally everything about this business all the time. It’s exhausting, right? It’s just, it’s exhausting. Yeah.
And I don’t want to sound, you know, as if I am ungrateful or not not passionate about being in the business, I really am passionate about being in our business and excited for the future. I was just beginning to recognize I’m exhausted from this specific position, or this specific set of responsibilities. The other thing that came up is maybe about a year before that we began to self implement POS or attraction, as some people call it. And the more that my business partner and I talked, the more we realized we were actually splitting the visionary and integrator role. And as we continued to talk it over, and then we talked it over with our business coach, we hack into the realization of like, oh, Mike’s been the CEO, but he’s been doing a ton of integrator responsibilities.
And those just do not make him now a happy bear. It’s no wonder Mike is tired from some of these responsibilities, because, well, he can do them. They don’t come naturally to him. Yeah. So towards the end, someone you weren’t. Yeah, I don’t know if the light bulb, or the kind of like, clicked off. And I said, Oh, no, no wonder I’ve been just feeling like running on autopilot. Just not really enthused to be owning all these responsibilities. Those are really the two big things that happened.
John Corcoran 12:25
Yeah. So then what do you do next? How did you go about replacing yourself?
Mike Krass 12:33
I think I’ve only done this once. That being said, with a sample size of one experience, I think I had the luckiest experience ever. So I came to my business partner, and just really laid it all out to her. And I said, I’m tired of doing all this. Everything I just told you and your listeners, John, I’m exhausted, not charged up as I feel like, you know, nothing, nothing. There’s no sunshine in this rule for me at the moment, which wasn’t entirely true. But that’s how I felt at the time.
John Corcoran 13:04
And this is Partway into COVID. How far into COVID is this?
Mike Krass 13:11
This was probably the summer of what is actually the fall of 2020. So you know, we were roughly six to nine months, depending on where you lived in the US. Six to nine months into people, our lifestyle and our groceries.
John Corcoran 13:31
So let me be the devil’s advocate here. If I’m your business partner, and you come to me six months into this pandemic, and granted, we didn’t know how long it was gonna last. But you know, the world is kind of chaotic. At that point in time. Many agency businesses had a dip initially and then a ton of business. So it was kind of chaotic.
But if I’m your business partner, I’m saying Mike, don’t rock the boat, man. Like, we got a lot we got enough to handle right now. Why do you want to suddenly throw this on the organization? What did your business say about any part of that? And? And if not, why didn’t she say that? Because it seems like that was the reaction.
Mike Krass 14:11
Yeah, what she said was, I’m glad you brought this up, because I would love to be the CEO but I didn’t know how to tell you that. She said I didn’t. I didn’t want to make it appear that I was coming for your seat on the bus. Who’s the no Jim Collins analogy? And she just said like, I don’t know how I would have brought this up. She’s I’ve kind of just been sitting on it.
And you bringing it up, makes me comfortable in saying like, I would actually like to be doing these things like this is really exciting to me. What would you think about me being the CEO? That’s what she told me. Yeah.
John Corcoran 14:47
So you’re fortunate that she was willing to do that you didn’t have to go externally and find someone else
Mike Krass 14:53
to fit that role. Correct. And that’s why you know, a moment ago I said, I think that I’m the law. IQs person with my sample size of one experience to have gone through this because it could have gone any number of ways, right? You know, you were doing a good job of acting, they’re being, you know, I’m happy. She could have just can’t believe that now in the middle of a pandemic and you’re trying to get, you know, it could have gone a million different ways. Why don’t you just get out of here, you obviously don’t want to be here anymore. You know,
John Corcoran 15:22
clearly, she should have in my mind reacted.
Mike Krass 15:27
Yeah. And she didn’t, she just said, Hey, I’ve been sitting on this for a while, and I did not bring it up. And I can’t think of a better, you know, segue into talking about so it went incredibly well.
John Corcoran 15:39
So then, did you find that it was as easy as, alright, Monday morning, your CEO now? Or did you feel that there was a process that you had to go through either with the team to kind of train them, or with documenting processes that maybe you were involved in, that you hadn’t documented previously?
Mike Krass 16:01
Yes to everything you just said minus it just happening on Monday morning. For us, we really put together an intentional plan, or and I actually started transitioning responsibilities, say at least three months before we actually told the team.
So for us, we were kind of testing the role, the role of change without actually telling the rest of the team that and that gave me some confidence that we could be maneuvering these changes, without there being too much conflict, or change happening with the team as a whole. Yeah.
John Corcoran 16:36
Now, did you find that you were able to figure out what your next role was? Now on LinkedIn, you’re listed as founder, slash visionary. So how do you figure out you know, you knew you knew he didn’t want to sit in the CEO seat? So what seat Do you sit in now?
Mike Krass 16:52
I sit in the founder, visionary seat. I describe my title as founder. Because the word visionary makes my Midwestern soul very self conscious. And even though it is a seat and a role within the EOS accountability chart, it really, it makes me deeply uncomfortable to describe myself that way. And I went straight back to read the book right here on my bookshelf here at the office. And I went straight to the book, and I said, What is the visionary supposed to be doing?
And as Carrie, my partner and I started looking at it, I was like, Oh, my gosh, look at all this stuff that I was doing that I wasn’t supposed to be doing. Like no wonder, you know, I was feeling deflated. And then I started looking at the other things, and I was like, okay, like an external face, you know, big client relationships, which generally goes with sales, or some sort of outward facing sales and marketing position. The more I looked at it, I was like, Oh, this, this job description is almost writing itself in terms of my responsibilities now.
John Corcoran 17:54
Yeah. Now, let me be devil’s advocate, again, because how do you avoid getting sucked right into the business into roles that could be either your could be stepping on the toes of people who, for example, do sales, or just kind of like, occupying yourself with a lot, but a series of different tasks that that still puts a lot of details, as you said, you didn’t like having all the details in your head, but you’re still have more details in your head if you step back into a role like that?
Mike Krass 18:28
Yeah, the short answer is, sometimes it happens. And I would describe it as almost like meditation, of which I’m not a very active practitioner, but I have meditated in my life. And some of the best meditation advice I got, actually, through a, a meditation teacher, I guess you could call this person is when you’re trying to have a silent mind and you’re trying to be still thoughts will come into your brain, you cannot stop that from happening.
It’s about re centering yourself. So almost think about like your ball rolling down the lane, right, like at the bowling alley. You’re gonna go side to side and you might hit a bumper, but it’s valid, we are centering ourselves. And so I ended up being very intentional. In terms of re centering if I thought I was getting sucked into too many things. The other thing I did was definitely not successful. And as a great lesson for your listeners and your viewers, I tried to be as hands off as possible. And I would argue that in the long run, that was not a great idea.
I was probably way too hands off. But I couldn’t. It was kind of like one or zero is almost binary for me. I was like I’m getting sucked into things and I’m trying to reenact my role, you know, on a daily basis. So maybe I’ll just like to step back all the time. And I would argue that that was not a great idea for them, for the reason of when I stepped back. There wasn’t any kind of accountability mechanism that I left. So it’s like hey, I know Longer are responsible for this, John is. But John has to report to me on a weekly basis. I missed a whole chunk of the account. Yes,
John Corcoran 20:07
He took a step back, but it created a kind of leadership vacuum or decision making vacuum.
Mike Krass 20:16
Yeah, for a time being it created a vacuum. And I tried to make up for it by really connecting deeply with our staff on a one to one basis, for example, and in 2023, I’m sorry, 2022. My goal was to travel to every US city where we had a team member living and working out. And so I kind of tried to make up for it in that way, by being around those people as much as I can. We’re a remote business. So it’s not like we all have an office that we can come into every single day and see each other.
And that whole accountability layer that I just left behind is comical, frankly, because I followed this EOS path, which is centered around like, you know, radical accountability and who owns what and when is it due. And that’s like the one thing that I just completely forgot to implement when I backed away. So my business partner, as the new CEO, took a lot of those responsibilities, and filled some of that vacuum. We had another senior leader fill some of the vacuum. But it was like almost this organic happenstance of how it was that vacuum got filled, as opposed to me very intentionally saying like, Oh, here’s the list of responsibilities, who was who owes me answers on what and on work.
John Corcoran 21:33
Yeah. And then you have an interesting model. Now, because you actually report to your business partner, you are responsible for marketing for the firm now and reporting to your business partner is kind of almost like the outside vendor of marketing for the agency.
Mike Krass 21:53
Yeah, it’s definitely kind of changed the dynamic, because one moment we’ll be talking about, you know, hiring, enroll her company, and then the next level, we switch over and she’s like, I thought he said, we’re gonna get like, 10 new leads out of that campaign that we invest in last month. And it’s, I have found that for myself, first of all, that’s the question the CEO should be asking, right? The CEO should not be saying, Hey, Mike, why don’t we brainstorm and we’ll find out a way to get the 10 leads for next month, right?
The CEO is like, I got enough going on that plate. Like, if you are the head of marketing, you’re on the hook for this number, like, where are you what’s happening with this number. So I have found that, you know, breathing, taking a deep breath and being like, Okay, we are completely changing, they are in a split second, our roles and relationship is going to change. And at first, it was a little frustrating. And I even expressed that to her. And she’s like, Well, I’m not surprised that it’s a little frustrating. She’s like, I’m, I kind of assumed that you were frustrated with some of my questions. But it’s, it’s, it’s taken a lot of mental horsepower to realize, okay, I need to, I kind of like switching between the seats, we are equal partners to you, I am on this one aspect of the business I am reporting to you.
And inversely, for example, as the previous CEO, I was in charge of all the financial operations, which the visionary should not really be in charge of by US standards, that’s not a great place for finance to ladder to. And inversely, I was also kind of poking and prodding on the finance front for the longest time during the transition. This being like, why are you doing this this way, and how you acquire your curling and expect like, it could be as minute as why you accrue an inexpensive spring across this kind of, you know, schedule, up to something bigger. And so we sort of did the same thing to one another where it’s like, yeah, hey, like, you’re in charge of the financial operations of this business now. And like, my life is very much tied to it as the 50% business owner. So I have some questions for you. So we’ve kind of actually traded those responsibilities back and forth between marketing and
John Corcoran 24:08
You also have this model that you’ve developed called this agency leadership committee. Sounds like an executive team. What exactly how does that work in
Mike Krass 24:18
your company? Yeah, it’s brand new. And the intention behind it is that we have some really couple things. Firstly, number one, we’ve got a few team members who have been behaving as executive leaders but not being recognized and given some of the autonomy and authority to make as many decisions as frankly, we would like them to make. And so we came up with this idea, actually, one of our team members brought it to us last year and 2023. And we molded over as a partnership of caring eyes and business owners.
And we said ultimately, we think this is a great opportunity. Again, using the US bottle and using a level 10 meeting format. This is a great opportunity for Mike and Kari as the owners to do more of what we need to be doing, which ultimately, services businesses growing the business. Right. And in many services businesses, whether it’s marketing or another field, the growth of the business is almost always tied to the founders. And so we just need more time and energy to be able to do that kind of work to help grow that business.
So the agency leadership committee is brand new this year. I think it’s going really well to trust in those team members, and already seen them step up and and, and, and being recognized with the fact of oh, I can make decisions. We’ve got a clear decision making criteria, here’s what you can and can’t decide on without even consulting us. Here’s what you need consultants about and here’s what you have you no, no, no decision making authority around because we need to be involved as the owners. So it’s hopefully freeing us up to continue to grow.
John Corcoran 26:04
I want to ask you about first of all, Eos, you mentioned so traction is one of the books there. But any resources that you want to shout out there any particular books in the series, or implementers, that you use that
Mike Krass 26:17
you want to mention? We didn’t use an implementer, which meant it took about 12 times longer to get this thing going, then it probably should have. So a resource if you’re thinking about Eos, at least for the first year. If I could have gone back in time, who would we have just paid for an implementer to really install EOS into our business? From the top down. I think it would have been would have gotten us to these level 10 meetings and the executive committee that we’re calling an agency leadership committee a lot faster.
That investment would have paid off, in my opinion. In terms of books, obviously, you know, the book attraction is fantastic. Also, that to not to mess with Geno’s book sales. But a lot of that content is actually just available on the US worldwide website. You might not know what to look for. But if you actually buy the book and then start comparing some of the website content, you realize almost all of this is somehow or somewhere available online. Which comes back to Geno’s entire business proposition which is the content is the value here. The accountability and getting it done. Yeah,
John Corcoran 27:25
Yeah, there’s some truth to that for sure. You also went through a big hurdle a while back where you had a client concentration issue. And I had a couple of key clients that left at the same time, one of which had been a long standing client that had their goal is either go public or be acquired by private equity. Talk, take us through what that experience was like and how you climbed your way back from it.
Mike Krass 27:53
Yeah, so we lost at one time in a single month, we lost two of our clients, which accounted for almost half of our revenue. So we had not one client concentration problem, we had two, which was not a fun place to be. And in terms of how I reacted the first day. And this all happened. Actually, I came back from maternity leave after my daughter was born. On the first day, I remember looking at our financial model, and I was like, huh, these are not good numbers. And in the SEC, it was like it took me days to really realize how terrible it was.
And by the end of that week, I was full blown, like we need to make major changes yesterday, I guess we need to make changes. So the changes that we did make is, as you can imagine, there’s a lot of cost cutting, we retained all of our staff. So we did not reduce salaries, we did not reduce any sort of compensation, whether it’s salary or non salary for the team. We didn’t eliminate any positions. But we looked at eliminating expenses from the standpoint of more like below the line expenses. So which consultants are we working with, which ad agency is helping us with this, that or the other like, you know, one of our most successful consultants, who also costs quite a bit of money. We were just like, hey, there’s nothing you can do about this, we need to make the expense go away, and we need to make it go away yesterday.
So we cut our expenses in the span of about 60 days by something like 30 or 40%, you know, our run rate expenses that we were expecting, again, without touching any of our current staff, which was really important to us that we keep the team in place. And the other thing that we did is during that year, it was a particularly rough slog in terms of net new business, it was tough to get a new logo into your business again to stick as a client. At least that was our experience at the time. And so we really activated our existing networks and are existing clients. And that’s something that now we’re taking into our marketing and 2024. And beyond paying attention to our existing clients. It’s so stupid, simple.
They’re already spending money with you, where else can you make problems go away for them? And what’s the value of making those problems go away? You know, we had gotten caught in this new logo cycle and growth cycle for so long that we really, to be candid, had neglected our existing customers, our existing clients, and there were a ton of opportunities with some of them. When we actually got into talking to them and having some candid conversations, we found some of our clients and increased their fees with us by 2030 4050 60% in some classes, just because we made the effort to intentionally say, you know, we’re, we’re here to help you in other ways. And so those how to end
John Corcoran 30:55
How did you approach that conversation? I imagine you didn’t say, hey, we lost two of our biggest clients this month. So you got some time this Friday? Like, what did you say?
Mike Krass 31:07
Yeah, my business partner. So she’s now in the CEO seat. She started with 45 by 45. So every 45 days, she would talk to our clients. And frankly, not all of them wanted to talk to her that often. But it took a 45 day cadence to get them to talk to us more importantly, or I’m sorry, accordingly. And so we just started these conversations with them about how’s the business going? If there was nothing, there was no assumption, right?
We didn’t come in saying, hey, we need some money, and you probably got it. So you could give it to us. And we could do more for you. Instead, it was about telling me about how your business is going, like, tell me what’s happening specifically with your role where you are stuck, where you had, you know, have your hands tied behind your back. And really, that conversation was all one to one, and it focused on the individual. So it was me coming to you and saying, John, where is your business? Like? Where are you stuck with your business where you can’t get any further as John.
And unintentionally it sounds as I’m saying it out loud, a lot like a Zig Ziglar book, which is, you know, I can get anything I want by helping you get you doing it. Yeah. And so that’s what we’re trying to do every year moving forward. It’s gonna be part of our marketing plan. I’m just having these really candid conversations with John, like, what do you want? And what’s in the way? And sometimes that results in more business? Sometimes it’s not? Yeah, either way. It’s that deepening of trust and deepening the relationships there. Yeah. One
John Corcoran 32:39
of the things I want to ask you about is you recently kind of made the decision to move into another market or another client avatar, which was more early stage companies, you’d previously been serving larger clients. You know, you decided to look at smaller clients, zero to 50, employee types of companies. What inspired that decision?
And, you know, some would say that doing something like that might be, you know, going back to kind of opening the funnel, a broadening becoming too broad, not niched enough. So, what, what made you decide that that was the right decision, and then it wasn’t moving too far afield from the focus that you’ve had for the business and the discipline you’ve had for the business?
Mike Krass 33:27
Sure, so like I mentioned earlier, there’s over a million software businesses across the world, there’s only about 4000 cybersecurity vendors globally. And so it’s a pretty small market, a lot of those are early stage, right, they’re 20,30, 40, 50, 60 employees, maybe have raised in a round of funding. They’re generating revenue, but they’re not huge, you know, a mid market or an enterprise business. So for us, we realized it was very difficult to only target. But then market and above. It’s not impossible. But what works really well. I’m like extra hop networks is a great example of a client where we started with them when they were maybe 70 or 80 people, right, they were kind of fitting that earlier stage avatar, by the time they were acquired seven and a half years into working together.
There were, you know, three 400 people globally. And so it took us entering into a working relationship that early in their companies, maturity and lifespan for us to grow with them. And so, being able to tell that story, as we told and communicated with other people like oh, yeah, we’ve gone on, you know, your air quotes your rockets, we’ve gone on a rocket ship journey, extra networks were acquired for $900 million. They did great on the ice. It was fantastic for them, for all their investors, for all their key personnel with their options like it was a fantastic financial exit for them. And we realized that that is the story. We wanted to be a part of it before and there’s a larger addressable market for us there. We just needed to right size the offering.
And so the question that we’ve been asking ourselves is, what criteria has to be true what needs to change from servicing an Enterprise Client versus a 7070, headcount startup, what has to change based on what they need? Right? For that startup, what we would bring from an enterprise, it’s like buying a Ferrari and driving around a school zone, they don’t need half the stuff that we just natively draw into a contract. They need very specific things. And in six to 12 months, those needs are going to change. So we’re looking for somebody who can really grow with them, and with their needs, and a business that’s really changing at a very rapid pace. And so that’s what we’re working on now is we’re kind of working like downmarket as well to service folks along that journey. along that journey. You know,
John Corcoran 35:57
I know, I know, we’re almost out of time here. And I can’t help but reflect on this conversation. Because what I hear a lot is very focused, a lot of focus on systems and processes and a disciplined process. And being very deliberative. And you’re also a pilot. And all those qualities make for a great pilot, they tend to be checklist oriented, they’d follow a system or process tend to be very risk averse. And yet, we have in our mind, this idea that the entrepreneurs like you know, Richard Branson, a risk taker, you know, throw caution to the wind kind of thing, versus at a fair connection to kind of draw those connections between the fact that you’re a pilot and the way that you approach business. And you think that that is an asset, those qualities that make you good at being a pilot, serve you well, in business as well.
Mike Krass 36:49
Yeah, I think it’s a great analogy, a great comparison for the sole purpose of if you want to scale your business, eventually, all this stuff needs to be written down and needs to turn into an SOP, it needs to be able to be followed by all. And that’s a very common right to have SOPs in the aviation world. Even when I put my daughter to bed, she knows like we read the story, he she can see it coming, you read a story, that means like, bedtime is imminent. And then we go to the blinds. And then we point at the sound machine, which has a purple light if she likes purple, and then we turn the lights on and, you know, flip the lights off.
And then she was in bed. And it’s like that same process every single day, whether she wants to go to bed or not is irrelevant, but she knows like, oh, like bedtime has come. And I think as an entrepreneur, it’s what will help our business scale, especially being a professional services business, we’re selling our expertise for selling what we know in our heads and we can bring to life for you. I don’t have a thing that I can say I can get two of these, you know, let me let me get them shipped out from the factory or the factories up here for us. So if we don’t write all this down, we don’t turn it into a system. I fear that will always be the exact same size as we are today.
And that for me isn’t an option because every single year, my business will become more expensive to operate. Health insurance premiums will go up my my, you know my errors and omissions insurance will go up my offense base price will go like everything will go up just a tiny bit every single year. If we stay the exact same size in terms of revenue and headcount, we will eventually go out of business. And for me, I want to go out of business. I’d like to continue to grow the business and that’s, again, part of the agency leadership, having that next generation of leadership installed, and empowering them to take the business to the next level of this.
John Corcoran 38:40
Your bedtime process sounds almost exactly like mine. I have four kids at home, except there’s a lot more tears and a lot more breakdowns. And that’s just on my part. So I think I could learn a bit from you about that. Mike, this has been great. Where can people go to learn more about you and learn more about MKG?
Mike Krass 39:03
Absolutely. I’m most active on LinkedIn. You’ll see me posting there just about every single day. So my name is easy. It’s Mike, crass kilo, Romeo Alpha Sierra Sierra. So get that NATO alphabet in there for my pilot friends who are listening, and MKG. You can find our website at mkg(dot)marketing Just type that into your URL browser. Hit enter and it will take you straight to our website.
John Corcoran 39:27
Awesome. Thanks so much, Mike.
Outro 39:32
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