Today's Guest

Benjamin Friedman founded Build Scale Grow, which operates as a fractional and interim COO/CFO building long-term scalable systems and installing accountability metrics with fast learning loops. He looks to reduce cash flow and monitor the runway while also being mindful that companies need to invest in new and near-future opportunities now more than ever. Applying lessons from 20 years of bumpy startup rides leading to multiple successful exits, Benjamin started Build Scale Grow to support passionate founders in activating their dreams.

Episode Transcript

(Please excuse grammatical errors due to transcription)

Gordon Henry:             Hey, hey, this is Gordon Henry at Winning on Main Street and this week we're fortunate to spend some time with Benjamin Friedman. Welcome to the show Benjamin.

Benjamin Friedman:      Thanks Gordon. Glad to be here.

Gordon Henry:             So quick intro on Benjamin. He's the president and founder of Build Scale Grow, where he provides fractional CFO or COO services to founders looking to scale. Benjamin has founded or have been part of five successful exits. His resume includes impressive stints at companies like Story2, Parsley, TRAFFIQ, Tenthwave Digital, Brazil Station, and Miller Advertising. Benjamin led finance and operations in these roles, handling M&A, capital raising, debt financing, team building, management collaboration, and working with investors and lenders through diligence, through structuring and post-integration. And as you listen to Benjamin, what should you get out of this episode? I think you can learn some important lessons about how to build scale and eventually exit your company. And you can think about whether Benjamin Friedman and his company Build Scale Grow, can help you directly as a fractional CFO or COO. So Benjamin, let's get started.

Benjamin Friedman:      All right, that's great. Appreciate the introduction.

Gordon Henry:             We all know the sobering statistics about startups. Something like 80% of startups eventually fail. Is there a formula or system for launching and executing a successful startup? I think often entrepreneurs think it's like alchemy or luck. I know that's a subject we could have a whole book on, but let's hear some of your thoughts.

Benjamin Friedman:      Yeah, so it's definitely a combination. Anyone who says that luck or timing doesn't play into it, that doesn't seem realistic. Anyone who says it's all luck, it's also not realistic. I think it's a combination. You want to start with a very solid idea. One thing to really consider is the founder-product fit. That is whether you're running a product based company or a service based small business, think about how you fit with the problem you're trying to solve. If it's something you're doing because you think it'll make you a couple bucks, that may or may not work out. But if it's something you're doing because you are passionate about solving that problem, because it's something that really excites you, even when you're not formally working, you're just thinking about how to fix this, how to solve this, how to make something meaningful, that's going to be a good indicator that you're going to have the tenacity and resilience to keep going forward.

                                   And so I really encourage you to come back to the vision and values, but also really think about how engaged you are with the problem. Because no matter what happens with your co-founders, your investors, your team, the market, et cetera, if you are dedicated to figuring this thing out, you're just going to keep going at it. And that's going to bode well for your company's longevity and exit if that's what you're looking for.

Gordon Henry:             Yeah. So let's talk about your company, Build Scale Grow. First, what led you to start this company and what are you most excited about moving forward?

Benjamin Friedman:      Sure. So it's funny, I have to confess that even though I talk a lot about planning and anticipate the future, my company started when there was a business that wanted to engage me. I was looking for my next full-time role. They only needed somebody part-time. And I said, You know what? This is outside of what I was looking for, but it seems like a really good fit, I'd love to work with you guys. I started working with them part-time. I was socializing the fact that I'm now consulting and people started coming to me with other projects and it was serendipitous. So I'm very fortunate, I pictured something like this years down the road, but it happened to come sooner than expected. And it's been great. The reception I received from people I've talked to, former vendors, et cetera, working with me, I'm really excited about what I'm doing here.

                                   I want to take a lot of what I learn and a lot of my writing and I'm going to compile it into a book that's going to be released by the end of the year. The working title is, Scale, Reach Your Peak. So I think that really speaks to growth. It speaks to owning what you control, which you as a founder is, yourself. How you allocate your time, your own resilience, taking care of yourself, which is something I'm glad we're starting to talk about now in small businesses. And the book really compiles a bunch of different situations and scenarios where it's a modular approach.

                                   You can go in and think about anything in front of you and just go right to that article, learn a little bit more, go deeper if you want, but it gives you a sense of what you need to know right away to start thinking about those issues. And then from there, I see taking this to different opportunities like this to spread the message, going to conferences, any way that I can engage with founders and talk about challenges and opportunities they're facing, that's a thrill for me and I'm happy to do it.

Gordon Henry:             So for somebody listening who's thinking of maybe hiring you or hiring Build Scale Grow, can we sort of break down the process? What is fractional leadership and then how do they get started with you? What is it actually like on the ground?

Benjamin Friedman:      Sure. So fractional leadership is working with somebody coming in at an executive level. Now you might be a business of five people and you don't think of terms of executives and all, but somebody who really own the vertical or several verticals at the company. I typically come in as a fractional COO. So I'm looking across the whole company. I'm owning particular areas. So that might be revenue operations, it might be client success, recently it's been looking at product management. I will own those areas for a period of time, but my goal is always to find a long term solution that doesn't involve me, that will be integrated into the company so that we can continue to scale and grow moving forward. And then founders who are interested, we typically have a couple conversations. I'm interested to know where they're at, what they're looking for.

                                   Honestly, half the time I refer out because they don't need me at this point. It might be accounting, payroll, legal, fractional, CTO, CMO, et cetera and I'm not going to be your best option for right now. I'm happy to do that because I think it's a lift for everyone. And if I did a good job, you'll come back to me at some point and we'll have another conversation. And then from there we formalize what is it you're exactly looking for? Is it a couple hours a week? Is it to specifically focus on an area and install processes systems, perhaps build a team from scratch and we'll define those deliverables and then we'll move forward from there.

Gordon Henry:             And do you have team members? Are there other people on your team who are other fractional CFOs and COOs? Or is the client hiring you specifically?

Benjamin Friedman:      So the client is hiring, Build Scale Grow, and then I'll work with other fractional leaders, other vendors to create a holistic package. So basically we'll look at any gaps in their growth and identify the priorities and then say, Okay, these are the resources you need. I'll oversee those resources. Maybe I'll handle the project directly, but I'll make sure that we're making progress and we'll evaluate that constantly.

Gordon Henry:             Yeah, great stuff. We're going to take a quick break to hear a word from our sponsor GovCon Winners. And we're going to be right back to here more with Benjamin about, what's the difference between a startup that's a local service business versus a tech startup?

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                                   And we're back with more from Benjamin Friedman and really fascinating conversation about how a company like Build Scale Grow and a fractional leader can help sort of turbocharge a company that's either a startup or in the early stages. I was wondering about the difference between a local service business that's like going into plumbing or a garage door or roofing, these things that people do kind of on a day-to-day basis versus more like a tech startup, the ones we sort of read about in TechCrunch. How do you think they approach things differently in terms of getting started?

Benjamin Friedman:      So I think I'm actually going to start with the similarities and then branch out into the differences. Because I think getting started, you want to be very mindful of all the considerations of a business, legal structure, accounting structure, basic bookkeeping, et cetera. You want to think about your value proposition and what you're going to do to make money. How are you going to add value to the community, whether it's through a product or a service. And you really want to think about then, as you start to grow, how are you going to measure your progress? How are you going to get feedback and how are you going to build a community around what you're doing? So now having said all that, let me break it out a little bit on the technical side, you want to make sure you have the right sources to build the product. I'm a big believer that most developers and dev teams feel like they're the best.

                                   That may or may not be true, but it's hard to have everyone be the best. So you probably want to start working with one, but then you want to bring in somebody else to evaluate the quality, evaluate the design. You want to have a couple opinions in the mix and not be beholden into one perspective. I think that permeability is really going to help you to build the best product. And then as soon as possible you want to get that product out there. You want to start sharing designs, mock-ups, prototypes, MVPs so that you can have actual users engage. If you have to offer it for free, perhaps even provide incentives so people start to engage with the product, that's really in your best interest and I hope you can do that. Because you want to get as much feedback from the users as possible.

                                   Switching gears to a service company, a lot of that is the same. You certainly want to get feedback from your customers, but you want to think about it on a different scale. You want to think about setting up reviews with your clients, particularly your big clients. Likely it's a quarterly review, it might be a faster cadence at onboarding for the first three months and then a quarterly review. You probably want to have something that's more routine like a survey or NPS outreach, but something that can be quickly done by email. Because some people like to talk and they're very comfortable in that setting, but some people only want to respond to a survey. And then I always want to have a third option. So if people are not responding to either, you don't know if that silence means they're busy but they're happy or they're unhappy but they don't want to voice that. So I like to find another way to reach out, direct email to the account lead.

                                   If that person's not responding, go back to the business decision maker, but see if you can find a direct connection with somebody at the company and just ask open ended questions from there. What is going well with us so far and what could be better? As we continue to refine and build the service, what can we add that would be exciting for you? You thought about hiring us so many months ago, what do you think about that decision now? Have we met your expectations? And if not, okay, I'm sorry to hear that. Let's talk about that. Let's dig in. A lot of times as humans, we're uncomfortable facing the uncomfortable truth, but that's the only way we're going to learn and grow. And that's important to do, especially in a service business which is built on relationships.

Gordon Henry:             Benjamin, how is your messaging to your clients, to the Build Scale Grow clients, how's that changing now in this new high inflation, high interest rate world where money is very expensive and funding is more difficult, what are you telling people?

Benjamin Friedman:      So I think people are hearing a lot about being mindful of cutting costs, of being profitable if you want to get investments. So I don't see the need to iterate those messages per se. I encourage founders to use this inflection point as a catalyst to think about how you can change and the business can change. So for example, if you've been growing nicely but you're concerned about the future prospects, this is a great time to look at your performance evaluation process and make sure it fully aligns with your company goals, your team objectives and individual performance. People could be doing a great job, but maybe that job is no longer suitable for your future direction. Use this as a chance to evaluate your strengths and make sure that you're mindful of the opportunities. And then also my bias is optimism. I feel like whenever there's a challenge that also presents a lot of opportunities.

                                   You and I, Gordon could name a ton of startups that came out of the last recession. There's probably going to be a number that are going to come out of one if we do have one anytime soon. And so it's being very mindful of with everything changing, what opportunities are coming up? Low hanging fruit, people are moving from big business to small business because they're more price conscious. How can you take advantage of that? You can provide the same level of service but at a much better cost point for your customers because you don't have the same overhead. Okay, how do you capture that? How do you message that? How do you prove that you have the same level of quality so that you can capture those customers? Are you seeing customers or markets open up in areas that you weren't seeing a couple years ago and what does that come about?

                                   Do you have a business that addresses supply chain? If so, great. What are you doing to address that and how do you promote that? So there is a lot of uncertainty and certainty always makes us nervous. But I say take control of what you can. Look internally to the business, make sure you're at your maximum strength and then look outward to the market and really talk to your existing clients and prospects in a way that says, Hey, what opportunities are you seeing? What problems are you facing now that you didn't see six months ago? Maybe you can solve those problems, maybe not, but keep asking those questions and see what you can discover.

Gordon Henry:             Yeah, great stuff. In the last few minutes we have, I wanted to just ask you a couple questions more about you and your business on a more personal level. First of all, what's your plan for Build Scale Grow in the future? What does the company look like in five or 10 years? You're big on exits, are you going to exit this business someday?

Benjamin Friedman:      So I hate to give the standard founder response of, I just want to keep growing and see what happens. But that's also the honest response here. I'm really happy with what I'm doing. The ability to pick my clients and really get to know them. We start off slowly and then if it's working, we keep going. That's very different than launching in full time into one company and in that company could be great to start, but the executive team changes, the market changes, the investors change. You never know what's going to happen. But with what I'm doing, I'm working with clients who I really enjoy. They're growing, they're very thoughtful and they're self-aware and they're thinking about what is it that I'm doing that's impacting our future? And I just want to keep going at it. And then I'm excited about the book coming out. I'd love to promote that some. And then from there we'll see what other opportunities come to promote the message.

Gordon Henry:             Well, we're just about out of time. I want, before we go, I wanted to ask, how should entrepreneurs or future business builders learn more about getting involved with you and Build Scale Grow? What's the best way to contact you?

Benjamin Friedman:      Yeah, probably the best way is to go to the website. It's www.webuildscalegrow.com. From there you'll see some recent blog posts and some other information about the business. And then hopefully we can have a conversation and talk a little bit and see what's on your mind.

Gordon Henry:             Well thanks for coming on the show. Really enjoyed chatting with you, Benjamin, great to have you here.

Benjamin Friedman:      Thanks Gordon. And it's been great talking with you as well. Have a good day.

Gordon Henry:             Have a good day as well. And thanks to our producer, Tim Alleman and our coordinators DF Barnett and Daniel Huddleston. And if you enjoyed this podcast, as always, please tell your friends, colleagues, or families to subscribe. Please leave us five star review. We'd really appreciate it helps us in the rankings. Until next time, make it a great week.

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