OWEN: My guest today is Matt Ham and he’s the CEO and President of Computer Repair Doctor. Matt, welcome to the show.
MATT: Thank you very much. It’s a pleasure to be here.
OWEN: This show is all about getting entrepreneurs like yourself who have been able to systematize their business and having to run successfully without them having to be there. And before we even talk about how you’ve been able to achieve that in your business I want to the keep the listener all the way to the interview by sharing with them what are some mind blowing results that you now experience as a result of going through that process of systematizing and automating your business.
MATT: The biggest results were just the fact that we can run multiple locations without me having to be present. We’re a brick and mortar retail service based company. So it’s necessitated to be able to run multiple stories with not having me the owner be present at every store. Unless you want four uniquely independent stores running you require systems just to get that operations falling smoothly.
OWEN: That’s awesome. And so how’s your company been transformed as a result of you systematizing your business?
MATT: From the very beginning of our company we knew that systemization was going to be a necessity. From the very beginning we built for scale and we really focused on processes. We try to build our company not around specific individual people, the skills of an individual person but the skills of a position, and the skills of systems that we put in place. So it really was able to take us from a mom and pop level shop where it’s one little store that does well, with the ability to uniform performance for all of our stores across the board to turn it into more of a franchise type business.
OWEN: And how has your personal life been transformed as a result of systematizing your business?
MATT: It gives me a lot more free time. I have flexibility. My free time is probably the biggest thing. Because before I’d be required to be in the shop. I had to answer questions. I had to make sure the day-to-day was getting done. But once you systematize it you can pull out of that and you can spend your time either relaxing on the beach, which isn’t quite what I do. Or focus on growing the company and taking it to the next level.
OWEN: That’s awesome. Since you have more free time and you have systems in place in your business and it allows you to run your business without you having to be there I’m wondering what’s the longest time you’ve actually been away from the business?
MATT: Absolutely. That’s a great question. The longest I probably spent away from the business was for about a month. That was maybe a year when my wife and I got married. We went overseas to get married and then we went on a honeymoon. I could spend a while… business I guess but I’m kind of a workaholic trying to continuously grow it. But I was able to pull away for a month without any problems.
OWEN: That’s awesome. That’s a good test of it can actually run without you. Let’s give the listeners some context as to what your business is all about. What exactly does your company do and what big pain or problem do you solve for your customers?
MATT: Essentially we are a computer and iPhone repair company, a brick and mortar kind of store. The mission statement that we tend to say is we solve a problem for a customer by providing a service. We focus on high quality services in a timely manner and at a competitive rate. But at the end of the day we are service-based company with a brick and mortar store that focuses on the repair industry. We’re tackling electronic devices, with the bread and butter services probably being computers, iPhones, iPads, that sort of thing.
OWEN: And so how many full-time employees do you have?
MATT: It kind of varies. I believe 14 right now, because I know we’re bringing someone on board next week. I believe we’re at maybe 12 full-time and two or three additional part-time employees.
OWEN: Is the company profitable… last year’s annual revenue and probably what do you expect to do this year.
MATT: Yeah, we are profitable. I think we hit right under a million last year. I was actually looking at the numbers this morning.
MATT: Thank you. And we’re predicting to do about 1.5 this year. We added two stores at the middle end of last year. So those contributed a little, but those should be building up revenues in this year in helping grow our company.
OWEN: We’ve just shared about the results you’ve got as a result of systematizing your business but obviously it wasn’t always like this. Take us back to when the business was not systematized and automated like it is now. What was wrong with it?
MATT: Like I mentioned from the very beginning, we were focused on systemization. We knew this was going to be a need from the beginning. But at the beginning of our…
OWEN: I think I also want to find out, how did you know from the beginning that that was the case? Because most of the time when I bring on guests here they didn’t even know. They ran into the issue… But how did you know that?
MATT: When we started I realized that I wanted to build this business for scalability. I was never interested in just building one location. I was always interested to see if this was the kind of company that we could scale the multiple locations across cities, or states, or the nation, or whatever you want to call it. And so that basically necessitated the ability to put systems in place because I said, “Hey, we’re going to eventually have 5, 10, 100 locations. I’m obviously not going to be able to run each one of them. So we’re going need to put systems and processes in place to do it. So from the beginning obviously it wasn’t like that. We had that as an ideal, as a goal in mind, but it wasn’t like that. We have multiple customers coming in. We’ll say two customers on the phone, another customer on the lobby. And despite the fact that I had a staff member too even at the beginning they were all coming to me because they weren’t sure how to do things. So they’d have to ask me questions or we had to solve problems as we went along. A fairly simple issue that [Unintelligible 00:06:05] just by, “This is how we do it. You do this, this, and that.” We’d have to figure out the best way to do it on the spot for ourselves. So we pretty much built the systems as we went. At the beginning everything just took so much more time than it does today. Getting back to your original question that was probably the problem with it that we initially resolve. It’s just that without proper systems your employees really aren’t sure what to do because everybody’s got different objectives and different ways of doing the same thing. And everything just takes a whole lot longer.
OWEN: Let’s talk about specifics regarding this question because in the interview you said something about having hiccups when you were in there to manage stuff. Even though you guys started with the intention of being systematized from the very beginning you mentioned that there were hiccups when you were not there to manage stuff. And then also something about a flat hierarchy, having an issue with that. Let’s talk about those things you mentioned during the pre-interview.
MATT: I’ll give you an example. One of the things that our company does is we recover data for customers. So they bring in the device, we recover data. It’s a standard procedure today that when a customer’s picking up that device we ask them to check the data, right? Make sure it’s all there. Before you leave we want to make sure you check it out. To me that made sense from the beginning but when I go away for a day or two not all of our staff members realize that that was a process that was in place so they just come in, “Here it is.” You pick it up. And the customer calls back the next day, “Well, there’s not all my stuff there.” And so problems would arise from not having the proper systems in place and employees not really knowing what to do not because it’s a problem then but just because you haven’t put a system in place to take care of something every time. And getting to your question about the hierarchy, when I think of running startups, I think a lot of famous entrepreneurs out there discuss having a flat hierarchy in a company. Trying to have everyone as equals as much as possible so that you can all contribute equally towards the end goal. And I really like that idea, but in this type of business we just need a structure to hire. In stores there just has to be that level of technicians and a manager, regional managers, operations manager, because that that kind of structure is necessitated by the process you need to put in place to allow the workflow to get done properly.
OWEN: Yeah. And you mentioned how the managers now would be able to answer a lot of questions that came up. You also mentioned an example of back then having two customers in the lobby and trying to manage them and always asking you questions. Talk about how that was a problem too.
MATT: If you’re a single manager or a single person running it without systematized processes in place the real world will throw things at you left and right. Even though my employees knew what they were… We’d have like you said, two customers on the phone, one in the lobby. And all three had questions that I needed to solve. So I’m sitting there trying to talk to a customer on the phone and I got an employee on my left saying, “There’s another guy. He’s got question. I don’t exactly know what to do,” or someone in the lobby. We normally do it like his but this and this happened this time so how do we deal with that? And so without systems and processes in place that kind of plan for those eventualities. The employees would be standing there looking at each other like, “We don’t know what to do. We haven’t been trained for this. There’s no way to do this.” So they ask tons of questions. That’s a problem when you don’t have the right systems in place because no one knows what they’re supposed to be doing. And it can eat up a single person’s time in that regard.
OWEN: Back then when the business was not systematized what was the lowest point and describe how bad it got. And talk about a specific event that happened that just triggered you. And at the breaking point you said, “I have to change how things happen. I have to systematize this business.”
MATT: The systemization of my business has come in multiple parts and segments. One of the things that I would say is probably the lowest time that we realize the need for systemization probably had to do with security. We were growing and we have just opened up multiple stores. And I realize that we had a manager that was stealing from one of our stores. Basically the whole way that he was able to do this was because we didn’t have the proper security systems in place to manage that. And I’m not talking just like a security system like a camera but the ways to track…
OWEN: Inventory that comes and stuff like that…
MATT: Yeah, exactly, all those types of things without the proper safeguards in place. I was a little naively hopeful that my employees would be respectable people but it didn’t always work out like that. And even though in the back of mind I knew that the security would eventually be an issue. You’re a startup, you’re trying to solve the biggest fires first. And that was just one that was a low point because I think it really hurts you on a moral level to have the staff that you know and trust doing that kind of thing.
OWEN: What was the very first step you took to systematize the business?
MATT: The first step is basically the brainstorming session. The first step is when you say we need to systematize. What are all the different things that we need to do? It’s breaking down the different categories and trying to just enumerate the things as much as possible that you’re going to solve, the problems that you’ll need to solve, the systems that you’ll need to put in place so that you can make a choice on how to proceed. That’s probably the first step. And the step after that is once you have a clear picture of all the different processes and aspects of your business that you need to address it’s finding the framework for that, right? That’s kind of the first and second step, and they go hand in hand, is identifying the ways that you need to systematize, and then finding a framework that fits that. For ours it was a web-based application. For other people depending on your industry. It could be designing a physical machine, or conveyor belt, or whatever it is, assembly line that systematizes a process. But that’s I think identifying the problem and finding the framework to solve that problem.
OWEN: In your case you guys identified all the things you guys had to do. And then you now had the jobs run through a centralized software or something?
MATT: Absolutely . What we did is we said, “Okay, the things we need to do as a company is we need to handle these jobs. So the customers will drop off a computer and say, “Okay, we need to track that computer and have somewhere we can centralize all the information regarding that customer’s job. Another aspect was we needed to have a centralized area where we could manage all of our customers, keep track of all of our client information. We had to have another section where we accepted payments. And so those are examples of what we found during the brainstorming process. And then we decided on a framework to try to solve that process which for us was a web based application that would essentially run our company, would allow customers to check in when they dropped off devices. It would allow our staff to look up information about the job or about the customer and enter information in, etc., and then at the very end of the process accept payment from customer on the job.
OWEN: Okay. And so gathered all the work that needs to be done into a software but then you created a framework where it would kind of be like the rules of how we do the work here so that even if they don’t know the specific details. They followed that framework that would end up getting to the end goal of what you’re trying to achieve.
MATT: Absolutely. For us the systemization of our business and that software solution go hand in hand. Because the software that we have been building in-house is what runs the day to day operations of our company, right? I would say one of my employees won’t spend more than 20 minutes without touching that software and handling something, right? So obviously it takes time to sit down and do a hardware repair on a device. But you’re constantly updating the job notes or looking up what’s next, or looking up another customer’s job to answer their questions. So building that system that kind of guides you through the repair and guides you through your work flow was tied directly into the systemization of our business.
OWEN: How come you decided to build your own custom software to manage the work flow of your company employees versus looking for an application online that could do that. I’m just curious.
MATT: That’s a great question and one that I get asked all the time, and that wasn’t an easy decision. The reason that we eventually went with our own in-house solution was basically came back to the desire and the end goal for our company which is to grow large. So it’s like open up multiple stores, potentially franchise and to develop our own brand. It takes a ton of time, money, and effort to develop this system, and there were solutions out there that existed. But the problem with those solutions was none of them would be perfect, all of them would charge you ongoing fees. And then the products were basically built around their systemization. So it was a third party company that created software to do this. And they said, “Here’s the systems and processes that we think you’re going to need for your business and so you can lease our solution. To me maybe it’s all 80% of the problem but that just doesn’t cut it. I wanted to tailor fit every aspect of that software down to the exact process and the exact systems that I felt were going to achieve maximum results for us. We have spent a whole lot of money investing time and effort into our own system, whereas we could’ve spent a fraction just leasing someone else’s. But to me that decision, while sometimes I revisit it when I’m in the midst of fighting that battle, to me that was necessitated by the fact that, look, we want something that’s going to be perfect and we want something that’s going to do every single thing we need and that’s going to be a flexible solution and something that if we eventually do get to the franchising step where we’re franchising this business we can offer to our franchisees as a value.
OWEN: Yeah, the value add especially if you go from the beginning, wants to go franchising in the first place. This wasn’t part of the pre-interview but I’m curious in regards to building the software. Because the listener might be listening saying there are tools out there that could help and there’s a way for me in my business so unique that I feel like it’s better to create my own solution. And so just real quick, how did you find the right people to help with that? Are you a programmer yourself or…?
MATT: Trial and error. I’m not a programmer myself. I can read code and I have coded myself before but this was kind of out of my league. We went through a number of different programmers before we found the right fit which has been pretty much a more permanent solution. But it’s not easy. That’s a good HR question because if something like this is so incredibly important to your business and integral to the service that you provide you need to find just the perfect person to do it for you.
OWEN: So did you go with an agency or you had to hire somebody eventually in-house?
MATT: We eventually went with a third party company. So we did a little of both. We mostly worked with freelancers to do various aspects. But eventually we went with an overseas company because that company was able to offer us aggressive pricing and also a team of people. And the thing that I liked about that as oppose to someone in-house was that someone in-house is going to be there all the time, they’re going to know it. But what if that person decides to leave? What if that person has issues or whatever. The reason I liked the one with the company is that they handle that staffing issue. And the main programmer on my project besides to leave or they just transition to another one, right? They’re going to be there. Their company’s got to track history that can be a little more reliable than just a single individual. If we found the right individual I wouldn’t say that we wouldn’t go that route. That just kind of is how the cards went out in my company.
OWEN: And from my understanding on how it goes with the agencies is that if you are trying to build your own custom software yourself people just think you only mean the programmer. But you also need the designer and stuff like that, and the different parts of the people that will work together to build the app, but in case of an emergency they have everything already in place. And you work with them to outline what the tools should do and internally they would figure out how to deliver because they have the people in place to do that. I just wanted to share that with the listener. What are the steps did you take back then to systematize the business besides the ones we’ve talked about so far?
MATT: After we identify the areas that we needed to systematize and we decided on the framework, that comes the actual building. That’s the heavy lifting that’ll pretty much go on forever for our company. So we pretty much decided we had to start somewhere. At first you just need that bare bones solution, something that is cheap and dirty but does the trick and gets you off the ground. And then from there it’s just building on that. One of the things that I’ve mentioned previously to others was that I read a book called The Lean Startup. It’s a pretty popular book for entrepreneurs. One of the things they focus on is something they call the MVP which is the minimum viable product. And that was maybe be the first step in building our software. The minimum viable product basically means that you don’t want to spend years launching the perfect product. You want to spend months or whatever the time frame is launching the bare minimum of what you need something to do. And the idea is you get that product out into the wild and the you start using it and testing it, and learning from it. You get that feedback loop and learn from the results. Because you spend a significant amount of time designing one key feature that you think is going to be the be all and end all that’s going to help you out. But at the end of the day nobody wants to use that because maybe you forgot something basic. So putting it in the wild gives you that real world feedback that you really need in building these types of systems.
OWEN: And you can iterate from then. And another analogy that can you say help the listener with this is imagine a triangle. And this big triangle you’re trying to achieve by building in this case a custom software. But instead of trying to build an entire big triangle just take a small slice of the triangle from the top to the bottom, a very small slice and build that first. And then gradually you can start adding more slices to it. Before you know eventually you get the entire big triangle you’re trying to build.
MATT: Absolutely. And that’s what we’ve done. Once we had a product that worked we would start identifying aspects of it and then just improving those. I have a list of things that either don’t work, or bugs, or additions, but it’s just kind of seeing which is the highest need for you immediately and going after that one.
OWEN: Back then when you were systematizing and even automating parts of the business how did you even prioritize what order of steps to take? How did you decide what systems to create first and what to create next? What was the decision factor that came in place?
MATT: You basically start with the biggest pain point. Whatever your employees are complaining about the most or whatever is the biggest pain point, or during your brainstorming sessions, whatever it looks like it’s got the biggest potential to revolutionize the way you do something or add additional revenue, right?
OWEN: I like the work you used during the pre-interview. You said whichever fire is burning hotter and brighter.
MATT: Exactly. It’s what problem do you solve first, it’s where the fire is burning brighter and hotter, or how do fire get started in a building, you choose the hottest area and you tackle that. And it’s the same for us. There are all these, the system that you know you need to improve. Just like an entrepreneur his time is pulled in a hundred different directions. You just got to find a way to prioritize. And the way to do that is whatever’s the biggest problem, or whatever is going to provide you the best results in the quickest amount of time, right? And those are the things you just want to focus on, do and do well. And then put that behind you and move to the next one.
OWEN: And because you’re continuously improving your system you mentioned that today the biggest need you’ve seen to improve is what?
MATT: The biggest thing that we’re working on currently is our inventory system. That’s kind of the focus right now, is that we’re really trying to find ways to identify the cost of goods sold, margins at every aspect of our business and set those up in a way to really bulletproof that process just because that’s one of the most important things to running our company. So it’s something that needs the most attention in our system right now.
OWEN: And the way I want the listeners to understand is kind of like when the fire is burning bright then you go ahead and use the water hose and quench the fire that is burning bright. Then you are now able to see the next fire and then you quench your different fires. And eventually all the fires are off and maybe you now get a chance to walk to a different room where there’s new fires burning but you’ve cleared the park there anyways. And the business is growing and improving. And as you’re making improvements to the system you’re quenching the fires. But then you got the next level of your business because you’ve basically gone to the next room because you’ve improved your business to that level, now you’re seeing new fires to quench.
MATT: Yeah, and hopefully eventually stop working on putting out fires and you’re working on additions to the house instead. That’s the goal.
OWEN: I love that analogy. How exactly did you document procedures and processes for your business? What tools did you use then?
MATT: On the documentation end that’s one of the things that we could probably do better because I focus a lot on my effort on getting the next system in place. We do have a few solutions to that. First of all, we try to build this software so that it required as little documentation as possible. We designed it to be intuitive. Whether it as the customer checking process or the workflow step of getting an actual repair done for a technician. We try to design it in a way that it would guide you through the process to make it easy, just like an iPhone makes using it easy because it’s intuitive. We try to design that system as well to minimize the documentation that would be required. But obviously everything requires documentation. So we put together, it’s basically a knowledge base. We started out…
OWEN: An in-house wiki? Okay.
MATT: Exactly. We started out with an in-house wiki. It kind of transitioned to like the knowledge base website that we host in our own subdomain that’s basically a training manual and includes like a training manual for new employees on how to use the system, how to learn the processes, as well as…
OWEN: What specifically are included in the wiki?
MATT: It goes over a number of things. The wiki for example, part of it’s devoted to new employee training. So it goes over, “Hey, this is how you use the system. This is how you’ll use our system to intake a customer job or how…
OWEN: The software.
MATT: Exactly, the software to handle, or repair, or do X, Y, Z. And so there’s that focus on a new employee, and then it documents other things like if you need to do this particular repair this is how you start. Here’s some training manuals to learn how to do the repair. This is at what point you work with a more senior employee to actually get some hands-on experience. It’s the building blocks to take someone for example who doesn’t know how to do an iPhone screen repair to be able to do screen replacements for customers. It’s the systemization of the training process.
OWEN: And some of the things you mentioned also during the pre-interview is how to interact with employees, warrant policies, pricing guidelines, and just additional training on the different things you do for the customers, so I just want to make sure the listener get that. At the time when you were working on systematizing and automating the business, in your case you were automating by creating a software that guides the employees through doing the work and also interacts with your customers as well. And also systematizing by documenting procedures and processes for those things that a machine cannot do, where human beings have to actually do, so you’re doing both of them. And so I’m wondering at that time when you were doing those things I’m wondering what books or mentors had the most influence on you?
MATT: I’ll double back to the one that I mentioned earlier, the Lean Startup, right? And discussing that minimum vial per product, that’s one that I kept in my mind just because of how relevant it was to the process. The things that they discuss at just about launching and really making sure that your designing for the real world and you’re getting something other there where you can actually have real results. I’ll give you a specific example of that. One of the things that they mentioned in the book is that the customer is not always right. It defines two things. It talks about the need to get customer feedback. How important it is to get feedback from the customer because that’s what you need to grow your software. But that’s different than assuming that the customer knows the features that need to be added, what the customer wants out of the system. And for us the employees are our customer of the software. So one of the things that I do constantly is ask my employees for feedback on a system. What do you hate about it, what do you love about it, what’s easy, what needs improving. Where do you think we could add additional features, etc. But I don’t necessarily always take. Because even though….
OWEN: Is that the concept of the five why’s where the employee might way, “This is how I think it should solved. But if you just go ahead and do that feature you probably are not really solving the problem. I’ve read the book too and it says going layers deep to figure out the why behind the problem. So by the time you go five layers deep to see what the real problem is, now you’re solving for the problem as oppose to solving for the feature they suggested.
MATT: Exactly. You’re absolutely right. The customer doesn’t always go deep enough into the problem to really understand the underlying issue that needs to be addressed… the feature which they think might be useful to them but it’s just on the surface because they haven’t gone deep enough into that question. You’re absolutely right.
OWEN: Do you know how the five why’s work so the listeners can understand how to probably implement it if they wanted to use this for something in their business, or should I explain it?
MATT: I can go into it a little, you can correct me if I’m wrong. I don’t know if I remember it exactly, but I think the five why’s, basically asking why this feature and why does that need to be done. And it’s basically investigating a particular issue to really understand the root problem that’s underneath. It’s making sure that you’re not… The customer says, “We need to change this to red.” “Why do you change it to red?” “We want to change it to red so that it sticks out.” “Why does it need to stick out?” It’s really important. And so once you start asking that why, why, why…
OWEN: Why is it important then?
MATT: Exactly. So you say, “Okay, the real problem you’re trying to solve is not that you want to make this from green to red. The real problem is you want to have this item here be stressed so that nobody misses it. Maybe instead it from green to red you realize that you need to create an alert, or you need to have somebody check on it or something like that. It really gets to the underlying issue that they’re trying to solve, not just what they think the solution is.
OWEN: And you got it. I just wanted you to share that with the listener because I think that is important and be applied to anything even besides doing software building. That could be applied to other things that are not related to software. And so if we just only talk about the successes that you achieved as a result of systematizing and even automating your business and don’t talk about the challenges you face I don’t think we did a good job of giving a well-rounded interview. So let’s talk about it. What was the biggest challenge you experienced as you initially tried to systematize and automate the business, and how did you solve them?
MATT: There’s a number of challenges. One of the big problems that I find consistently… You had mentioned earlier going with a firm because they have good designers and additional programmers. In my company I try to play the role of the designer myself. And one of the things that I realized is it’s very hard to design a process to be simple. Designing a very simple process is actually incredibly complicated. It’s like a labyrinth. You start out with one path, and then that path splits in two. And maybe it’s an easy decision to go left or right, but then from there you can go left and right, and from there you can go left are right. And before you know it you have to design for 16 different paths based off just a few questions. And so we ran into that a lot in our design process. And so I realized that something as simple as taking in a customer device, a customer wants to drop something off. It’s actually incredibly complicated to design that in a way that it’s simple and easy to do, and in a way that you account for every individual eventuality.
OWEN: So keeping it simple was one problem, and then how did you solve that?
MATT: The way that we solve that, you basically have to understand the problem as well as you can, because that’s the only way a true, deep understanding of the complications that arise is the only way that you can create a simple and elegant solution. Some of the best companies out there, the most well-known, the most high valued companies out there provide extremely simple solutions that just do things better. So to solve that I relied a lot on process flows. So I found some online application that allowed me to basically create flow charts. And so at one point I created 20 flow charts that had sprawling flow charts to handle just a couple of simple things like changing the status on a job. Because we had to account for every possible solution and I created these flow charts to really walk the developer through. “Look, if they choose this then these are the questions. But if they go down this path then we’re going to need to do X, Y, and Z. Or if they add this part we have to check to see if the part’s in stock. Then we have to double check the price of the part, or we have to do this or that.” There’s just so many little paths that they could take that I solved it by visually doing flow charts which allowed me to visualize a complex problem and create an elegant, five-step solution.
OWEN: And break it down to the fundamentals. Okay. You also mentioned there were some other challenges that you think were kind of the biggest ones, something about hiring and consistently training the staff members.
MATT: Yeah. One of the things that is hard to do when you’re trying to take a business and systematize it is you really have to find time to get your job done, what you’re supposed to be getting done, done, as well as develop these systems. Finding time to get anything done besides keep the lights on is an issue at the beginning. Because you’re spending all your time… Let’s say me for example. I’m spending all my time fixing computers, trying to get these jobs done and out the door. Where am I going to find time to then design these systems to create it better in the process. For us it was just an incremental process. As we hired employees we trained them. We trained them on our processes, we trained them on our systems. And so everything that we did, every time there was a new issue come up, or there was a new question, or there was a new way of doing something we built that into our process, right? A new device, or a new repair, or a question that we hadn’t heard before, the ideas that as you encounter problems that need to be solved, you build permanent solutions, and you build systems and processes that handle it the next time. So that the next time you encounter that the employee’s not coming to you, but the employee is either been trained or has some centralized place where they can go to find that information and they can handle it themselves.
OWEN: And what was the second biggest challenge that you experienced while you were trying to systematize and automate the business. I think you mentioned something about people are always looking for the shortest path.
MATT: Yeah. That gets down to building for real life. So I discussed taking a complex problem and finding an elegant solution. But the other hard part was again related to design which I felt was that you can design these solutions but they’re not always the best. Because in a process, in a system people are always going to take the easiest path from A-B. I discussed previously with some other people. I saw this great meme that was basically showing a garden, a quad with a concrete walkway going through it. And the walkway would go straight and then we branch off left and right so that people could get to where they needed to go. The picture showed the grass that was filling in the walkways was there was a diagonal line that basically cut that corner straight through the grass. And you can tell that people have just been walking on it for years. And that comes down to you can design these perfect systems that you think they’re going to do this and then they’re going to do that. But if people then just cut the corner that’s how they’re going to operate in real life. And so it’s the same thing for our system. Designing processes that’s like, look, we can design it so that they’ll do it this way. But if we create these little loopholes for them or other ways to do it they’re just going to circumvent the process and do it another way.
OWEN: So how do you solve that then?
MATT: That’s a complex question because it comes down to how do you want to solve that? In a perfect world you can build whatever solution you want, right? So the question is do you want to put up… Imagine that quad, the question is do you want to put up walls around those concrete walkways to basically force people to walk straight and then left? Or do you want to allow them to go off the beaten path to get things done faster. So the idea is how important is it to you that you design rigid processes that have to be followed. And for me what I’ve realized as we start scaling, we really needed everything done the same way. So it is very important to have these rigid pathways, but it’s also important to have the best way to get things done. So part of it comes back to the MVP. You build a system in which people can do what they need to do, and then you see how they’re getting around the systems that you’ve built, how they’re designing it better in real life, and then you adapt. You say, “You’re not going straight then left, you’re cutting the corner. Let me design a systems in which you can cut the corner.” Or you do the five why’s, why are they cutting the corner, or why aren’t they using the path that I built and they’re taking their own path, and how can I build a system that helps cut that path. And really it’s just about investigation. The way we solve that is like you said, you asked the 5 why’s. You find out why they’re doing it that way. And then you get to the underlying cause and you build a system that can solve that underlying cause.
OWEN: Back then were there any other challenges that you experienced that you want to address? I think during the interview you talked about specifically some things that had to do with the customer intake process.
MATT: Yeah. That’s a good example, something that we had to modify. We have this intake process. A customer come in, they have to check in their device, and they will register in our system. So we had one store that got particularly busy. There were always customers waiting to get checked in because employees had to help them. So I said, “Okay. You know what, it’s going to be a great idea. We’ll design an intake system in which customers can pretty much check themselves in. They’re going to be able to check themselves in and say we’ll put two computers out there. So instead of waiting for an employee to check them in, there’s this long line. They’ll just be able to check themselves in and an employee will spend a third of the time helping out every customer, and boom boom, we’ve increased efficiency. Once we put this into action we realized that customers didn’t want to check themselves in. They go through the process but the would start asking more questions. “Why do I have to put this information in? Can I talk to you about this issue first, etc.” And we realized that the new process we had designed was actually lengthening the amount of time that it took to get customers checked in because we had designed this perfect system that solves what we thought was the problem, but the reality of the situation was we didn’t factor in the human aspect of it. And that basically all the time that we had invested in this automated solution. So we learned a lot but we ended up having to go back to our original intake process, which we did modify and we’re able to improve upon that. But that’s an example of something that failed. It’s hard to design perfectly the first time. It’s a challenge…
OWEN: The takeaway is you design something, you test it, and see the results. And if the results are not going the way you expected then you’re willing to take it back to redesign it again. This just gives me kind of, based on the example of you know how these new debit cards are out now where they have the chip. The whole idea with the card company, Visa, MasterCard, and all that was to make sure that the cards are more secure. And so then once you swipe the card you have to now put the chip in. But now it’s even making it longer at the lines when you are in the store is that you have to wait for that chip to do all the craziness. And it’s a much slower process. Yes, it’s more secure but t’s a much slower process to buy the goods you want/
MATT: Yup, absolutely. And then a lot of cards don’t have chips yet, and then there are credit cards… I have a credit card that has a chip but I don’t have a PIN for it yet. There’s all kinds of…
OWEN: Yeah. I just want to share that example with the listeners. Given all the challenges that you mentioned earlier why did you stay committed to the goal of systematizing your business?
MATT: It was the only option. For us it’s the only way to grow. If our goal really is to open multiple locations and look into franchising the only way that we were going to grow is to put systems in place, right? Think about McDonald’s, think about Subway, those are two obviously are the biggest franchises in the world with so many locations. But the only way that you’re going to build a company like that is if you have bullet proof standardized systems. And they need to be battle tested and they need to work. We’d be happy if we get half that many stores obviously. I don’t know about that. But building those systems and building the processes is the only way that you’re going to turn a single location into a chain of stores and not just have every second of your time be putting out fires or answering questions.
OWEN: I totally understand. Let’s bring the story to a more recent time. What point in time did you feel like that the business was systematized and it could actually run without you successfully. Do you remember when?
MATT: Yeah. We had multiple ways of that. The first time that it was systematized and I was able to pull out was about 9 months in. That’s when I was able to get out of our first location, right? We had people that were running our first location. I didn’t have to be there all the time. The system worked. And then we open multiple locations required as to modify our system and processes so that we could parts delivered in all those locations. We got managers running those locations and I could just pull back. And then as we add even more locations you had to build systems that operate a distribution center to ship parts to those locations. And so at every growth project there’s been multiple points where we’ve had to build new systems so that I could then pull out of that and continued to help them grow. But I would say I was about 9 months in that I was able to pull out of the first location. And about a year and a half in that I was able to pull out and have a single operations manager kind of overseeing multiple locations.
OWEN: One of the questions I always like to ask, especially when we start talking about the more recent times like how your business currently runs today is I want to give the listeners a behind the scenes of the different parts of the business, and different systems you have in place that keeps it running the way it should run. And so imagine a conveyor belt. One it’s somebody who probably broke the screen of the iPhone or whatever. And on the other hand of that conveyor belt is that same person. You guys have fixed the screen of the iPhone and they’re out there raving about you guys, telling people and their friends. “Hey, if you have an issue with your iPhone check out Matt’s company.” But behind the scenes in your company there are different parts that make that happen. I want you to kind of share with the listener what are the different parts of the company that’s making that transformation happen for the listener. And feel free to even start with the systems you have in place in finding the person in the first place.
MATT: Just like any company there’s multiple aspects of the business, from training, that’s what I kind of consider the HR side of things. You have to find an employee, you have to train an employee, you have to have a process for on boarding them. You have to develop systems for that. We have to develop systems for teaching a manager how we’re going to go out and find that employee. Once we found that employee what are we going to ask during the interview once we’ve got them on board how are we going train them? How are we going to train them on customer service? How we’re going to train them on the actual repairs? How are we going to train them to learn about our company’s procedures? Then there’s systems for marketing. It’s how are we going to market our new locations, what are we going to do an ongoing basis, what’s going to be need to be addressed here and there, how are we going to market our brand, how are we going to market our stores? For other aspects of your business like legal and accounting you sometimes develop systems, sometimes you don’t. For me I think legal is the kind of thing well you have to have a process for your legal aspect when you’re on boarding employees to sign the right documents, etc., but you don’t probably need ongoing legal support unless you’re in an industry that deals with a lot of [Unintelligible 00:46:28]. But accounting needs to be systemized in any business. You don’t want to wait until the end of the year to learn how you did in January, you need an accounting system that’s going to consistently keep you up to date. So you have to decide on systems that you use for that. And so just like any business you have to address all of the aspects of your business… Financials is another good one. Besides just accounting how are you going to manage cash flow and how are you going manage payroll. You have to identify all the aspects that need to get done and you have to design systems specifically for those. That’s the conveyor belt. And so you’ve got jobs moving from point A to point B and that’s the workflow management part of it. But that’s the company, it’s systematizing all those aspects. That’s how you build and grow.
OWEN: Okay. I was going to ask you. The next question is about what systems you have in place to enable the employees know what they need to do. But so far you’ve talked about the work flow tool software that you guys build custom internally. And also the knowledge base where you guys put procedures and processes for staff to learn and train up on. But I’m wondering, are there any other tools besides those two that enabled the employees what they need to do?
MATT: Yes is I guess the answer to that. If the question is how do employees know what they need to do, I think one of the best ways to teach people is just having somebody show you something. That’s a great hands on learning. When you develop a larger company and you want to systematize and open up chains you obviously need to put that kind of training down on paper and that’s kind of what we’ve done with our wiki, with our knowledge base, whatever you want to call it. But you’re never going to have that substitute for one-to-one training. And for us a lot of that comes in on the actual repairs. We have systems on our wiki that say, “This is how you fix an iPhone for example.” But that employee is going to need to be hands on. So I’d say besides just the tech panel system that we built and besides just the wiki and the knowledge base the systems that we built include an aspect of that…
OWEN: Learn by doing, yeah.
MATT: Exactly. Because I think that’s how your reinforce a lot of those skills.
OWEN: I’m glad you mentioned that. How do you track and verify the results being delivered by your employees?
MATT: For s it’s very easy, right? It’s how many iPhones can you fix and how quickly can you get them done, right? It’s pretty easy to see if an employee’s doing their job because if something comes in broken it needs to be fixed, period. So besides just that metric you can track things like how quickly do employees get jobs finished, how many can they get done, how difficult are the repairs they’re getting done? You have to find ways to measure their customer service. So for us inside our system we built metrics, we built a dashboard so that we can say, “This employee go this many repairs done in a given time period. This is the cost of the repairs.” You have to qualify the repairs sometimes. You can’t just say they got 10 repairs done because repair A could be harder than B. We built metrics to qualify those. You have to build in timing. “They got 10 done, great, but how long did it take them?” We also track metrics like how often do they damage a device. When an employee damages a part or a customer device that has to be logged. And it’s logged in our system so that we can track those types of metrics. And then we use things like reviews. So when customers leave us reviews, we have surveys that customers fill out. When customers fill out surveys, that track is like the softer side of things. So that track helps us verify. And the customer service aspect, not just the numbers of how many did you get done, how much money did you make us, but how did the customer feel about what we did.
OWEN: Glad you share that. Since now you have more free time in your business I’m wondering which areas of your business you focus on now and why?
MATT: The biggest areas I focus on our business is growth. I focus on growing to new locations, or I focus on projects that’ll grow our revenue or efficiency. It’s about taking what you have and expanding, making it bigger, growing, going outwards. But it’s also about looking internally and making sure that you’re doing everything in the best possible way. It’s about always improving efficiency, always making sure that you’re doing things better than you did them yesterday, and you’re growing stronger. For me it’s about looking at the long-term growth and the long-term viability of our company. Sure, things might be running well today, and the machine works today, and we’re making money today but we want the machine to work in 6 months, we want it to work in a year.
OWEN: I love what you said during the pre-interview. You said you were always thinking about how to make money next year instead of just today.
MATT: Absolutely. By this point I have practically no control over how much money I’m going to make today. My staff on the front line, they can affect how much money we make today or how much money we make tomorrow. But the decisions that I’m making are how we going to make money next year. If I say, “I want to double my money next year,” how are you going to do it? You got to open up more locations, which means you need to research more locations, which means you need to find funding, you need to find employees. If you’re not planning 10 steps ahead you’re going to get to tomorrow and you’re going to realize you have no plan, and nothing’s going to change.
OWEN: What’s the next stage of growth for the business? What do you plan to achieve next and why?
MATT: For our business the next step is to open up more locations, looking to franchising, and just try to continuously grow. Like I said, we’re going to try to take all the systems that we’ve put in place and just make them better, stronger, and more robust. And then we’re going to look to expand our footprint. In our industry the way you make more money is just by opening up more locations. Continuously providing quality service for your customer. And just being able to reach more customers by opening more brick and mortar stores.
OWEN: I get that. Let me play devil’s advocate right now. Why not look at the situation where instead of opening more stores, making more of an online presence where they just send me to one location and everything’s all done online from your location?
MATT: For us, the fact that we have to tangibly and physically repair an actual device, we’re sort of limited in that online aspect thing. To get to your question one of the things that we do is we always push marketing in a particular market to try to get a particular store more customers. So you’re absolutely right, you can push online marketing and try to drive more customers to an existing location. And that’s something that we’re doing on ongoing basis. We’re always trying to find better ways to market and to drive more customers to our store. But if you’ve created a process that says, “I created a process that can get this many customers in, and I can do this many repairs, and drive this profit.” If you just opened up more of those stores you’ll just get more of that profit. It’s about increasing the margins incrementally and then just multiplying the number of stores.
OWEN: Good. As we come to the end of the interview, if you would leave the listener with a way in which they can get started transforming their business so that it runs without them, what would you tell them as the very next steps they should take. Feel free to summarize what you’ve talked about so far if that’s going to be your answer.
MATT: Absolutely. As I mentioned the first step is you got to brainstorm. You got to figure out what it is that you need to solve. If you’re sitting down and you’re saying I want this business to run without me you need to figure out what that means. What do you do for your company that someone else can’t do? Or how do you teach someone else to do that and how do you make sure that once that person’s gone someone else can do that? How do you take projects off your shoulders and put them onto someone else’s shoulders. Once you’ve identified all the areas you got to start going after them. You got to start somewhere and you got to just find ways to get thing, after thing, after thing off your plate and onto someone else’s plate. Because the more you’re juggling the less you’re going to have time to figure out the next step. It’s a snowballing effect. Once you’ve gotten 5 hours of weekly work off your plate you can devote those 5 hours to getting the next 5 hours off your plate. So obviously money’s going to come into play because if you’re paying someone else to do something that you are doing yesterday you’re going to have to realize is this financially viable. Because if you take a franchise location of any kind of store for example. And if the franchisee is doing the work they’re going to make X amount of money. But if they hire a manager to the work they’re going to make less money. So you have to figure out is it going to be financially viable to actually allow myself to pull out? Can I design this business so that I don’t have to be here and it actually makes me money. Because sort of the difference between owning a business and having a job. And so I heard someone say that before, maybe you own the business but at the end of the day if that business doesn’t run without you you have a job. If you’re making profit from a business without you having to do work, or be there, or minimal involvement that’s when you’re actually getting profits from a business. And so you need to realize if your business is going to support that.
OWEN: That’s awesome. As we come to very last question I’m wondering is there a question that you were wishing I would’ve asked you during this interview that you think will add more salt to what we’re talking about that I didn’t get to ask you. If so, post the question and even the answer.
MATT: I would like to have a nice comment there but I think you asked a whole lot. I think we covered a whole lot of topics. I think that you did a great job of getting into how we systematize my business, why we saw the need for it, what were some of the positive aspects of it, what were some of the challenges we had to accomplish. I think this is a great, well-rounded interview. I can’t think of anything I left out.
OWEN: That’s a good sign then. I’m speaking to you the listener. If you’ve enjoyed this interview so far, please I want you to leave us your honest review and feedback on iTunes. And to do that you go to sweetprocess.com/iTunes and that would redirect you to our iTunes channel and hopefully you’ll leave us a 5-star review. The reason why we want you to leave us a positive review is because the better reviews we get, the more ratings we get. And the more ratings we get the more we’re exposed to other potential listeners like yourself. And the more we encourage to get guests like Matt on the show to talk about how they’ve systematized their business and have it run without them. And one more thing. If you’re at that stage in your business where you’re tired of being the bottleneck and you want get everything out of your head so your employees know what you know, and you can actually track their task as they do the task and monitor their workflow, well, sign-up for a free 14-day trial of SweetProcess. Matt, thanks for doing the interview.
MATT: Absolutely. I appreciate you having me.
OWEN: And we’re done.