Want to Build Your own Software to help Systematize your entire business? Here’s is how Steve Byers did it!

Do you want to build your own custom software to help systematize your entire business?

In this interview Steve Byers CEO of EnergyLogic Inc reveals the steps he took to build proprietary software to systematize his entire business & eliminate the loss of crucial client data because he couldn’t find an off-the-shelf software solution that was the right fit for systematizing his business.

Steve Byers CEO of EnergyLogic Inc




Tweetable Quote:


In this Episode You will Discover:

  • Why Steve’s biggest challenge with his business was losing or missing data.
  • How Steve ended up with incomplete client files, and how that led to the systematization of his business.
  • Why Steve decided to use the cloud for storing important data.
  • How Steve’s wife took over the architecture of building systems.
  • Why Steve couldn’t find an off-the-shelf system for systematizing his business.
  • How Steve started at the end to figure out what systems they needed in order to deliver for their clients.
  • Why Steve’s priority with systematization was schedule management.
  • Why Steve’s software needs to be flexible and adaptable to a variety of variables.


Noteworthy items Mentioned in this Episode:

  1. Good to Great: Why Some Companies Make the Leap…And Others Don’t by Jim Collins
  2. Playing to Win: How Strategy Really Works by A.G. Lafley and Roger L. Martin
  3. Switch: How to Change Things When Change is Hard by Chip Heath and Dan Heath


Episode Transcript:

OWEN: My guest today is Steve Byers, and he is the CEO of EnergyLogic Inc., Steve, welcome to the show.

STEVE: Well, thanks for having me Owen, I’m really happy to be here.

OWEN: The goal of this interview is to talk about how you systematized your business so it runs successfully without you. And we’re going to walk the listener through the story behind how you exactly did that. But before we even jump right in I want to find out some mind-blowing results that you currently experience as a result of going through that process of systematizing and automating your business?

STEVE: Sure. To give you a little background, we deal with tons of data because we do testing on homes, for homebuilders primarily and homeowners as well. But the focus of the business is on homebuilders. So we go into the home, we do inspections, we got hundreds of data points per home. So in order to do that we have to deal with all that data. And without a system we’re finding that we were not able to deal with the data, we’re losing data, we’re disappointing clients occasionally, things like that. So now, where we have gotten to know is, frankly, we never lose data because it’s a Cloud-based system. We’re able to be highly efficient. So, roughly speaking, we would have to have about 10% more staff to deal, and that’s just office staff, to deal with the amount of work we have if we didn’t have the systems that we have in place now. I don’t even know exactly what the number of additional number of field staff we’d have to have, probably at lesser numbers. That gives us a much better shot at being profitable because we can get the headcount down and not kill people at the same time with too much work. That’s really important to our culture.

OWEN: I think during the pre-interview you mentioned how now, based on the system you have, a client can just call you and ask for a report. And within 25 seconds, you just go into your system, press the button, and it goes out. And before, you probably have to get a team just to pull that data out.

STEVE: Exactly. That was one of the first… From that moment when I client called and I was in a place where I was out of the city. I was at a conference. And I was able to immediately get in, get the data they needed, get the report they needed. That was an incredibly good feeling. Because when that first time happens like that, as an entrepreneur you feel it’s like the door is open in front of you. You can see there’s a way into the future. And so, dragging all these baggage behind you that you know is going to make it nearly impossible for you to get where you want to be.

OWEN: Yeah. How would you say your company has transformed as a result of systematizing your business?

STEVE: Probably the biggest thing would be that we are able to focus not on the midday or the menusha of managing paper, and managing the data itself. We have the systems in place to do that. And not just data. I keep saying data. When I say data, I mean schedules, client names and phone numbers, the files themselves all those pieces. And when you know that that is handled by the system that you cut, that lets your people focus on what is really important like customer service, getting the job itself done correctly. And with the work that we do is very quality. It’s a function of quality, we’re doing quality assurance, even it’s in the context of energy efficiency but we’re doing quality assurance. So our people can focus on seeing what’s there in front of them and now worrying about did I lose a piece of paper, did that get written down? Because the whole system guides them through the process and makes sure that they don’t forget things, letting them focused on the big picture, the important things.

OWEN: How would you say your personal life has transformed as a result of systematizing your business?

STEVE: Let me put it this way. If we didn’t have the systems that we have in place I would not have a personal life.

OWEN: Yeah.

STEVE: Or, I [Unintelligible 00:04:26] have a personal life, or the company would sold out several years ago because there’s simply no way it could’ve grown to the size it is now if we hadn’t done what we’ve done.

OWEN: Yeah. We were asking you during the pre-interview, basically, since you have the systems in place and it basically runs without you what would you say was the longest time you’ve been away from the business. What would be the longest time you’ve been away from the business?

STEVE: It’s been a 6-week trip out of the country. We were going to China. My wife’s a cultural anthropologist in addition to being part of the company, and she was working with some students there, some American college students. I would basically forget entirely about operational things. I was working on something but it was a project basis and I didn’t have to but I could. I didn’t have to worry at all about operations. Now of course in the big picture systems is not just a web system like we built to handle our schedule, our data, the concrete things. A system is also of course the people that you have. And I’ve got really great people working with us to make sure that things run smoothly.

OWEN: Okay. Let’s give the listeners some more context as to what you guys do. What exactly does your company do and what big pain do you really solve for your customers?

STEVE: We do a variety of things, but the core of the company is we’re working with major homebuilders to help them build more energy-efficient homes. The problem that we’re solving for them in essence is that they are homebuilders so they know how to build homes, they’re very focused on that. When you’re talking about process, good and successful homebuilders are very process oriented. But what they see is the house. They don’t necessarily see the details and the quality assurance pieces, especially around energy efficiency, durability, and safety that we see. That’s what we’re trained to see. That’s the pain and suffering part that we do. And we help them demonstrate to the homebuyer how energy efficient the home is. It gives them a context and a comparison for the home they’re building versus other homes.

OWEN: Yeah. How many full-time employees do you have?

STEVE: We have about 32 full-time employees and 10 part-time employees.

OWEN: One of the questions that my listeners want to know is in terms of revenue and profit, is the company profitable and what was last year’s annual revenue and what would you expect to generate this year?

STEVE: Right. The company is profitable. We did about 3.5 million gross last year. We’ll do about the same this year because we’ve got some changes in the market that are outside of our control. There’s things that changes the game for us year to year. This year there are changes in the game in a way that’s not so great for us but that’s okay. We’ll come out of that just fine on the other end.

OWEN: Congratulations so far on what you’ve been doing. That’s great to know. Let’s go back, before the point where the business is now systematized and can run without you, take us back to when it was not at that point. And at that time what was wrong with it? What even went wrong?

STEVE: The biggest thing was losing information. There’s nothing more painful for our business, and I think this would apply to lots of different businesses where it’s service ensured. There’s nothing more painful than going out, doing the job, and then losing the results of the job, losing literally a piece of paper that you record the data on. Because then you got to go back and redo the whole job. That’s not very good for profitability. So that’s one of the most painful things. Even if you didn’t straight out lose it that’s the most painful thing. But the inability to respond quickly to a client and their needs, whether it be for data, for addressing the schedule of work to be done, without the system you can do a little bit of work and keep it all in your head. And I think this is true. I hear over and over from different people, even in different industries. You’re able to keep so much in your head, as a solopreneur, or entrepreneur with a couple of people. And you reach that point, you hit that wall where you can’t keep it in your head anymore. And that’s usually the moment, the epiphany. “I have to do something.”

OWEN: You also mentioned something about closing down your office and moving to another one. How was than an issue at that point too?

STEVE: That was just a story I was telling. We’re just moving offices into different spaces. We’re closing down one but simply because we had a better place to move to. But what was interesting about that when we were talking prior was that going through all these files, you got to move out of an office you’ve been in for 10 years, you accumulate a lot of stuff. Boxes, and boxes, and boxes of paper files from the day when we were all paper. I’m there just saying recycle this, shred this, etc. When I opened up a box and say, wow, it’s sort of amazing to me to pick up a file, a piece of paper from 2003. This how we used to do our work, before we had all the databases, before we had systems, before we had processes. I was going through various boxes and grab an evolution of paperwork before the system. Now there’s no paper. So, many of my staff have never seen how we used to do our work. So I grabbed the little history museum out of the paper so I can show some people.

OWEN: Based on what you guys do, at that time before you build the automation and the systems behind what you do now, it was very paper intensive, collection of data for the work you had to do. Paper was everywhere, and so I can actually see how that could’ve been an issue.

STEVE: You’re absolutely right. And it’s not just paper. I for example have, let’s say poor handwriting. So you got to translate that so that… One thing that systemization did as well was to dramatically reduce transcription errors. Somebody’s trying to read my writing and input, or even myself trying to read my own writing. I put it into, it’s just…

OWEN: Sometimes I cannot even read my own writing. Okay. At that point now, let’s go back to where you mentioned some of the issues. What will you say at that very point can you remember was the lowest point, and describe how bad it got.

STEVE: Okay. I would say the lowest point was where I was at this point where I was trying to do more high-level work. Some design work for a client. And it was something that I needed to really focus my best effort on. But because we didn’t have the systems in place during the day I was still have to do all the daily operations stuff with this old, bad, chaotic system. So that drove me to doing this complicated, difficult work late at night.

OWEN: Real power is not even there anymore.

STEVE: The brainpower is not even there either, and I just remember that being the lowest, darkest point where I wasn’t able to use my best self on that demanded the most because I had all these other stuff going on.

OWEN: Given that you just shared… Do you remember a specific point where you feel like this was your breaking point that it’s either I’m going to change things around or we’re going home. Do you remember that breaking point and if so, share that story of the breaking point if you do remember? What happened?

STEVE: I really think that what I was describing was that breaking point where literally I’m up until 3 in the morning and just saying, “I just can’t go on this way.” I can’t do this work that’s important to the company so we’ve got to change that. If we’re going to get bigger, better, and grow we’ve got to build better systems so we can tackle bigger, better things.

OWEN: Yeah, now let’s talk about what was the very first step you took to solve the problems you’ve mentioned that you experienced at the lowest point in the business.

STEVE: Yeah. You can imagine we had this giant file system, and we’ve had a whole folder labeled AWOL ratings, Absent Without Leave ratings that came out of the military. So that’s where the name came from. And that’s just we just simply lost and couldn’t find. And so, we started from that point realizing that we needed to build a system. So we like lots of companies, we…

OWEN: Did you say you lost a folder that had information in it? Was that what you’re saying? I didn’t get that part.

STEVE: Sorry, let me rephrase it. We had a folder that had files that had missing information. And so, they’re incomplete. So they’re incomplete. If they’re incomplete we can’t finish the job. If we can’t finish the job then we can’t get paid for the job.

OWEN: Yeah, okay.

STEVE: Right. So I think a lot of companies do it. We started building Excel spreadsheets, and then we went to building something in Microsoft Access. Those are all fine for what they are but they’re no way to really grow a company. And then as we went through the process of finding the limitations of Excel and finding the limitations of Microsoft Access we realized that we needed to bring in somebody who could really help. So we hire a developer who still works with us as a third-party developer. But it’s been a 10-year long relationship now. And we started designing the system based on our work in the field. So we still do the architecture of the system. How should it look and what is the process. How’s the workflow need to go and all those things. And he takes what we say we need and he built the backend, the databases all in the Cloud now, and that was one of the fortuitous decisions that we made was instead of making it a server-based system, because this is 2005. The Cloud was in some ways kind of early days for the Cloud if you will. But we decided that’s where we needed to go because people all over Colorado trying to do work. And to think that being able to get to a server all the time was not true. So with this one, one of this really happy decisions we made to go to the Cloud and it’s just been an evolutionary process from there building more and more robust systems, sometimes simplifying them. A lot of process and systems as you well know have a way of getting complicated, and getting more and more complicated. And then sometimes you got to crowd that all back. So that’s a lot of what we’ve done.

OWEN: So let me see if I can break that down a little bit more. The very first thing you did was you build kind of like an Excel database spreadsheet that had all the data. You said something about a billing person, your wife I think, probably helping you at that point. What does she do at that point when you guys are working with the Excel data? I’m curious.

STEVE: Yes, so she’s running all the bookkeeping for the company, and because of my bad management of data and records she was often chasing around, trying to find all these missing pieces of data. Again, that makes it really hard to get paid. So she ended up taking over the architecture, doing the architecting of the system. She’s a very intelligent woman and was able to take that over and do that in a really fantastic way, and develop this really great working relationship with the developer.

OWEN: Okay. And so at that point after getting what you needed to get into the actual software itself, was it from the Excel you guys now move into an Access database, and from then you now move into trying to do something on the Cloud. I’m just trying to understand the transition of what’s happening.

STEVE: Yeah, exactly. So one from spreadsheets, to Access, and then from Access into the Cloud.

OWEN: Okay. And Access being something that sits on your server, and then Cloud being something that, it’s not necessarily in a server where someone has to be, maybe each drive or something and located in the office. But it’s something where anywhere in the world they can get access to.

STEVE: Exactly.

OWEN: Okay. After that what was the second step you guys took to kind of solve this problem?

STEVE: Interesting, at that point I’d say I’m a pretty second step and so on.

OWEN: [Unintelligible 00:17:10]

STEVE: Yeah. It never ends, that’s one thing to mention. Maybe we’ll get there. It’s a continuous evolution. We’re always improving the system. One thing that happened that changed out how we ran the business in essence is that… This is a very small industry and there was no system. One of the reason we were having to build our own system was that there was not off the shelf system for us to buy. So for a big industry like say, heating and cooling, or the home building, there are dozens of different competing systems to run the company.

OWEN: Different IT, they probably have a lot.

STEVE: And so, for us there was no such thing, that’s one reason we had to build our own. So once we had built it and we showed it colleagues and friends in the industry people really liked it and wanted to buy it. So we ended up selling it as an subscription service to other companies. That changes things. Of course, when you’re building something only for yourself you have a certain perspective. And then when you’re building it and selling it to other people your perspective on what’s important and what you need to do changes.

OWEN: How?

STEVE: Because we have to take not just our perspective in running a company in Colorado, had to change and we had to think about what’s it mean to be doing this work in any part of the company in the country for different types of clients. What are different needs people have? Are they going to use the system the same way that we do. What do we have to do in terms of training people to use the system. So it’s a feedback loop too because we learn and how to help people that are our clients for the system, we learn better how to build the system. And that’s been an interesting thing for us. And good thing for our clients is that we almost never have a bug or a problem come back to use from our client base. Because everything that they ever see we tested internally on our own people for a while. So it’s very, very rare for us to have a problem like that.

OWEN: When you say your own people you mean the other colleagues who are in the same industry who wanted access to the software too. Is that what you mean?

STEVE: I mean our people is our staff. So when we have a new release of feature that we build into the software EnergyLogic runs it internally for a certain amount of time and make sure that it’s good to go. Then it goes outside. So it’s not just a beta test, it’s a real-world test internally before our clients that subscribe to the system ever see it.

OWEN: Okay. And so is this software that you guys build internally, is this the one you call DASH?

STEVE: Yes, that’s it.

OWEN: This is probably taking you away from the flow of what we’re planning to talk about. But you are a service business and then now you build your software to run your service business and then you have people outside who are in the same industry saying they want Access. And then you’ve given them Access, that now makes you kind of a software/business. I’m like, dealing with that dynamics, how did that work?

STEVE: Yeah, it’s a good question. And for a long time we struggled internally with the idea that were we a software company. Can we and should we say that we’re a software company. And we can eventually say, “Yes, we are. We’re a software company and we’re a service company.” And those things work nicely together because of what I just said, we get try to things out on ourselves before clients ever see it. And it also puts us in a leadership position in the industry because we’ve been able to do things and think we have to, we’re forced to think about where’s the industry going, what’s the future of the industry, and to keep our software relevant so we’ve got to stay ahead of the curve. And that’s good for any business. Is it challenging? Yes, it’s challenging for sure because one of the things that business consultants that I’ve worked with over the past many years I’ve said is that we’re too diversified, and I understand that critique. However, it’s been a very good thing for us ultimately that we’ve been so diversified and able to do these different things.

OWEN: Let’s break that down a little bit more. Is it diversified in the sense of on one hand you’re doing service. And on the other hand they’re also providing software, or diversified in the sense of the solution you’re providing to the customers are kind of a lot. I just want to understand what they meant by that.

STEVE: Actually we’re diversified in a couple of different ways, yes, exactly what you said. So we’re diversified and we’re a service company, and we sell software. But we’re also diversified with our client base because they all do different things so we’re in turn how to meet their different needs. And the rest of the company are even more diversified than that because we also do training and consulting. It’s additional services that we offer as well. So yes, I’m just about every front you can think of.

OWEN: The vertical, horizontal, everywhere.

STEVE: Yeah, 360.

OWEN: We still talk about kind of like the solutions that you came up with during the lowest points. So what are the steps do you remember that you took to kind of solve the problems that you guys were experiencing at the lowest point in the business?

STEVE: Well, one thing we did was we looked at what the deliverable was. We started at the end in essence if you will, what do we need to deliver to our clients.

OWEN: Okay.

STEVE: So that was an important thing for us too, because ultimately if we’re selling systems that don’t help us deliver what the client needs then we’re not going to be able to do good work for them. So we started there, what is it they need. So they need speed and they need accuracy from us. So we do our inspections and need them to happen on schedule. And then they need to get the results quickly, so we designed a system that started with those assumptions and went back from there. Again, I think I mentioned it, but we had to design a system to conform with the workflow of the people in the field. It couldn’t just be my wife, she doesn’t go to the field and never has. It couldn’t just be me because I have my own particular way of doing things. And at that point I was not really in the field anymore, I was starting to come out of the field. I was still in the field some but I’m starting to leave the field. So we needed to make sure that we had the perspective of the people who are going to be using the tool in the field as a driving force for their part. That’s the field part, there’s also another part which is the administrative part of the system, which is the scheduling, reporting, and the things that the back office people use. And their processes and their workflows needed to be taken into account as well.

OWEN: Yeah. I’m also curious, given that you’ve kind of build systems is any way you can start from. But I’m wondering, how did you even prioritize what steps to take. I’m trying to figure out, what was the decision making factor in saying, “This is the specific area I’m going to start creating a system for in my business.” How did you make the decision on where to prioritize and where to start from, and work your way gradually from?

STEVE: To relate it, the first place we started was the ability to manage the schedule. And so, less the data side of thing, or the data we’re gathering, the houses and more. The interaction with the people scheduling the home. So our people talking to the builders about when jobs should get done. And the reason for that was that it’s a very fluid and dynamic world, home building. So jobs move around constantly because of all the different contractors that are doing work. So maybe a job one contractor doesn’t finish their job then that pushes the house around on the schedule.

OWEN: Yeah.

STEVE: We needed to be able to move houses and let our people know so that they could see it all the time, it gave us that. So we just start there, so that was a priority. And interesting, tension is related to what I was discussing too. So we use it internally of course and that’s where you started it. And then we have external clients. So those are two sets of competing interests in terms of prioritization. So we have our own staff to say, “We really want these things.” And then we have all the users in the subscriber base who are asking for sometimes similar things, but often times different things. And we had to balance the priorities for the two. So in essence we have an internal client, us, and external clients. So we had to balance the needs and demands.

OWEN: I’m also wondering, how exactly did you document procedures and processes for the business, and if so, what tools did you use at that time?

STEVE: Yeah, at that time I’d say that we’re really not very good at it. We were building systems and building it fast. And a lot of cases, not documenting very well. We’re still in the process of getting better and better about that. And so, you’ve gone from a process of just literally Word documents to document things, and try to capture how we do our work and how that’s reflected in the systems we built for both internally and externally for the clients. And now and then we went to PDF and we’ve done videos of how to use the system. And frankly, we do a lot of live training now as well when an external client buys the system. We really encourage them to have us come out and do a live training. We find that to be far more effective than anything we can do and document right. All very necessary but there’s nothing like having a live trainer, or at least they go to meeting, but live training is very effective. Now, we use a lot of different tools to document and get through the process, and drive projects. As soon as we talked about different tools. So we use live minutes right now, virtual collaborations phase. One of the things that we didn’t talk about before, we were talking earlier I think were one of the big things for this year is really driving a project management mentality into the company.

OWEN: Okay

STEVE: And so, I don’t know if you’ve heard of a Asana.

OWEN: Yeah, I’ve heard of them.

STEVE: Yeah, and so, we’re really making a transition to Asana. We use Zoho project right now. We’ll transition to Asana. We still use Zoho CRM for our own needs. But Asana is a really flexible tool. We like it, and so we’re making a big push that everything we do, literally everything, even meetings or projects in the next year. It’s just tremendously exciting. I really believe that the process of driving project management as a mindset of the company is going to be transformative.

OWEN: Yeah, and a time when you were working on creating systems and automating the business, what books or even mentors that had the most influence on you at that time and why?

STEVE: One of the very earliest… I love business books. I’m not trained as a business person so in a lot of ways I learn on my own, do it on the job. And one of the very first books we’ve read is the E-Myth and I’ve gone back to that over and over again. We’ve worked with an E-Myth consultant, that’s been really great. Good to Great is another fantastic book. These were sort of classics. Playing to Win, another really important book for us, a little more recent. And then the Heath Brothers books. I don’t know if you’ve read any of them, but Decisive, Make It Stick, and Switch. These are really good books. Then there’s a couple of periodicals that have been very important to me over the years. I read Inc. Magazine cover to cover just like the bible. There’s always good stuff in there. And then a little more esoteric, Harvard Business Review. It talks a lot of colleagues of mine and we’re all running in smallish companies. It’s sometimes hard to make the leap from what’s written in something like the Harvard Business Review back to your company. But fortunately they write up executive summaries in the back of the magazine so you can go there and pick things out that are relevant. I don’t really need to read about global supply chain management. That’s not us. But there’s almost always something there about HR, or innovation, etc. that I can take stuff from that even if it’s talking about big corporations. I can bring some gems back to our company, things that we can think about and do. So those have been very important to me.

OWEN: And also at that time, if we just talk about all the steps you took and we don’t talk about the challenges that you actually experience at the time when you’re trying to systematize and automate the business, it will not give the conversation the full spectrum of what really happened. So what will you say was some of the biggest challenges that you actually experience, that you try to create systems for the business at that time and how did you solve them?

STEVE: Yeah. As mentioned we do the architecture from the system and work with developers. So two things there, architecting software is a lot harder than we realized.

OWEN: How?

STEVE: Because the human brain can handle all kinds of information, data, and ambiguity the computers don’t. You’ve got to tell computers exactly what you want and they’ll do all kinds of wonderful things but you got to build systems that take that into account. So building a system that works, you got to do a couple of things. You have to map out exactly who’s using it, how are they using it, and what’s the end product as we talked about. So we were doing all that in-house. Then you’ve got to add somebody who’s doing the coding. So that was one of the biggest challenges for us as well was figuring how to work with someone. That was probably the first time in our company that we really worked so intensely with somebody who was outside the company. He was a contractor for us. And so that was a big challenge as well. I think those are the biggest challenges. And there’s always, of course, resource challenges. Especially at that time we’re not a big company and how you spend your money, what you emphasize and prioritize in the design of the system, you got to make sometimes hard choices.

OWEN: You said something during the pre-interview about schedulers, designing schedule model, what is that?

STEVE: We are dealing with a lot of jobs on a given day. We’re talking about earlier these jobs move around every day. So we got people from our clients calling [Unintelligible 00:31:59] that house isn’t ready, or this house is ready now. It was supposed to be ready tomorrow, it’s ready today. And so we have a wonderful staff of schedulers who are constantly adjusting the schedule, and that’s a really complicated thing to do too. That’s also tied as you might imagine to the billing. So when a job becomes complete the billing staff need to know that that’s happened. So it’s all very interwoven, the scheduling, the fieldwork, and then ultimately the billing is all intimately related, and those things have to keep up with each other in the system. Not just the software system, but all the other systems and the people. So the more you can build a system that keeps everybody on the same music, knowing what’s current, nothing in people’s heads, that’s the key. If somebody’s keeping information in their head or on a piece of paper then it’s not accessible to somebody else.

OWEN: Another thing you mentioned also is about the fact that the nature of the industry is rapidly changing.

STEVE: Yeah, it is. And dealing in homebuilding there’s a number of different things that are changing all the time. The way that the home builders build their homes has been changing consistently. We’re working with energy codes with the cities, counties, and the states put out. So that’s another thing that changes all the time. And because of the nature of the work we do, which is quality assurance and making sure that homes comply with energy codes. And then telling the builder and the home buyer how the home will perform from the energy perspective, that’s changing constantly. So our systems have to be able to be changed when there’s a change. When there’s a change in the building code we also work with programs. A lot of the work we do is with Energy Star, programs like that. Those programs change all the time. So we have to be able to change our program when other people change. So we have to be very flexible in design.

OWEN: So basically, you had to build the software, the DASH, the system you guys have so that when new changes come you can easily remove a model and add this new change, and everything reflects on the system. That’s kind of what you guys have to do.

STEVE: Exactly. If we hadn’t built systems that could be relatively, easily changed. Then it would’ve been really a problem. It would be very expensive.

OWEN: Do you remember any other challenges at that time that you want to talk about?

STEVE: I think I’ve hit on the biggest challenges. Working with somebody who’s not inside the company. Balancing various internal demands. So you’ve got one person who thinks this is the most important feature to have and another person has a totally different perspective on it. We have a with three different owners, myself, my wife, and our business partner. We all have our different ideas about what’s the most important thing. So managing all of those different expectations and desires, those are big challenges.

OWEN: Wow. And given all these challenges, how or why did you even stay committed to the goal of systematizing the business, given all the challenges you mentioned?

STEVE: Sure, why don’t you just throw in the towel someday? Because we knew we had big aspirations, we knew we wanted to grow the company. We had a large reason that we do the work we do is because it’s really good for the planet frankly. We’re trying to save energy, that’s an important goal. I don’t care what your politics are, saving energy is an important goal. So that’s a big deal to us. So we knew that in order to grow the company and get where we wanted to go, which we’re not there yet. But in order to get where we wanted to go we had to have systems that were flexible, robust, and could deal with all the volume that we hoped that we would eventually get to. And so, even though it was difficult… Early on in the process there were times when there were certain people who felt like, you know what, this is too hard. We should go back to pencil and paper because that was easier. So you had to fight against that. Listen, stay the course, stay with us, yes this is a difficult transition but this is what we need to do to get where we’re going. You had to build a picture, you had to build a vision of what was going to be on the other end of the pain and suffering.

OWEN: Yeah. Now we’ve talked about the steps that you took to actually systematize the business and get it to the point where… I’m trying to figure out at what very point did you now feel the business was systematized and it could run without you? Do you remember what happened or where specifically did you feel that way?

STEVE: I think it was at a point where we felt comfortable that we could have other staff members taking on role of running daily operations and that was key. We could step out the systems and the processes were in place at the point where we did not have to be involved in those daily operational management experiences.

OWEN: Here’s a question that my listeners like a lot. Imagine your business like kind of a conveyor belt. On one end is a potential builder that’s probably thinking of have you guys work for them, maybe do an energy rating on their building. On that end of the conveyor belt is that person. And that same person is on the other end of the conveyor belt now. He’s now become a customer. He loves you guys and raving about you, and he’s telling the whole world about you guys. But in between that, people, systems and things behind the scenes are making that transformation happen as that person is going through each stage of the conveyor belt. So can you give the listeners a behind the scenes of what’s happening?

STEVE: That’s a good question and an interesting one because, and I think this is true for a lot of businesses. If your client never knows how much work is going in to delivering a great experience for them, that’s one measure of success. If it looks easy and seamless to them when it’s actually very difficult, great, that’s success to a degree. So we’ve got schedulers trying to manage all these moving houses. We’ve got our field personnel gathering the data and dealing with all the challenges that they have in field, whether the job not being ready. The fact that when you’re doing quality assurance work a lot of times you’re delivering bad news to people. “Hey, I’ve got to tell you what’s wrong here.” That’s 90% of the work we do is for better or worst. It’s telling people what’s wrong with the work that was done. All those things, what they see is that the work I’ve done, it got done well, it gone professionally, it got done on time, we didn’t hold-up their process, that is success. That’s what we’re able to do with the systems we have.

OWEN: So I’m wondering now, just so that the listener has a concrete way of knowing the different departments. I’m just trying to figure out the different phases of what’s happening.


OWEN: Yeah, that way the person can literally know this is how…

STEVE: Okay, so in general, without getting to all the other strange things that we do the process with our homebuilders, beginning of the relationship we look like a consulting firm. So we talk with them about where their houses are. First, we might do some testing, here’s where you [Unintelligible 00:39:49], where do you want to go, what’s point B. Maybe they’re at this place and they want to become an energy star builder for our team. And so, we move on to analysis. We use energy modeling tools that tell us how much energy and how it chooses now, and what would you use if you change XYZ. So that’s what the first part of our relationship with our clients look like. And then the second part of the relationship we become inspectors. So we go out, we inspect the work that other contractors like the insulator, the framer, and the heating and cooling guy or girl. We look at their work, we test it, and the third part is recording. So we ultimately produce the report telling them what went well, and here’s what the score is. And we also hold people accountable. So something is wrong, if an inspection fails we won’t pass the house through until it passes. So we make them come back and fix them.

OWEN: Awesome. I like that. I just wanted to give the listener what are the different phases that you put people through especially when it comes to the energy rating thing for the builders. And so, we’re talking about how the business now is systematized. And I was curious, what specific systems that you have in place in order for employees to know exactly what they need to do? And so far, we’ve talked about Dash being the core. Is there any addition you want to add about the Dash software you build before we talk about the things you have in place?

STEVE: Sure, we’ve talked a good bit about it, you’re right, and let’s just say it’s the center, we call it the backbone of our business and that’s true. There’s a couple of things that it’s not. It’s not a project management tool, and that’s why I brought Asana, we’re using it to do that. It’s also not a CRM. We use Zoho CRM for that. I’ve repeatedly address the question, could we build CRM capacity into, for those of you who don’t know, customer relationship management capacity. the tool itself. And because those systems are so big it never made sense to us to build into our own system, and there are other very good tools out there to use. So we use other tools to handle that aspect of our business. So those are the other pieces that we use to manage the company that aren’t part of DASH right now.

OWEN: Okay, that’s good to know. And so, how do you track and verify the results being delivered by the employees? I think you mention something about how DASH produces reports, something like that?

STEVE: It does. There’s a couple of different ways that DASH produces reports. One we have a set of canned reports, various things that we set-up to run over and over and over again. There’s also an ability to run ad hoc reports, so that we can pull all different kinds of data out of DASH. Right now as we talked about [Unintelligible 00:42:37], we don’t feel like we have the perfect metric for engaging employee performance, and maybe there really isn’t such a thing as perfect metric. So when we look at a number of different ones because we’re not a factory, we’re not producing a product.

OWEN: Widgets, yeah.

STEVE: Yeah, we’re not producing widgets on a line. And so, if it means that on a given day one of our field staff may have to spend extra time working with the builder, working with the contractor because things didn’t go well for them. And we need to take that time so that they understand why we failed them on something. No just that you fail, but literally, why does it matter, what is it going to matter to the ultimate consumer, the home buyer. Why does it matter then that these things were done right and why are we holding them accountable for that? If they need to take the time to do that we want them to take the time to do that. That’s what’s making the change over time, not just failing people. That’s not change, that’s just failing people.

OWEN: Yeah, I totally understand because given the nature of the business itself, in essence you’re actually kind of consultants too. It’s not a widget or software per se, it’s consulting. So based on the person you’re consulting with who has a different set of issues, the solution or end result might end up being different. So it’s knowing how to work your way around that.

STEVE: Exactly. So inspectors, consultants, and educators in essence.

OWEN: Okay. Now the business is at a point where it runs without you I want to get some insights as to which areas of the business you focus on the most now and why?

STEVE: For a while now I’ve been able to put my time, attention, and energy into some of the bigger things for the company, the strategic issues and initiatives. One of the big things that we’ve done, we launched at the beginning of last year, so it’s relatively new. We formed a collaborative of other like-minded companies across the country, one per major market. If there’s three things that the collaborative is doing that’s working on it’s exactly what we’re talking about. Our common business problems and opportunities and processes. And then the opportunities that are there in front of us as a group to work with different clients. And then it’s also a place for us to do innovation incubation, something that I’m very excited about. We’re still working on how to do that. But the ability as a group of small companies to do bigger things than we would otherwise fail to do on our own. So that’s one thing. But that’s what I get to spend my time on, is big strategic things, initiatives. I try to hold a team together from my company, potentially people from outside and members from the other collaboratives so that we can drive things forward and do big things.

OWEN: And one thing that I noticed so far based on this interview, even when you were building the technology that would make you stand out from the competition, you were even willing to share with people who are necessarily competitors. Now that you are running the business where it runs without you, you’re still working with people who you would consider competitors. Why? I’m just curious on the reasoning behind that.

STEVE: That’s a really good question, and I guess probably a little bit personality and I guess part of its longevity in the industry. Again, in the industry with a lot of people are in it because they have a bigger mission in mind, saving energy. It’s a big mission. It may sound like a simple thing but I’ve got a lot of really good friends, and I have a lot of respect for. Ultimately, to me it was more interesting and exciting to find a way to work with these people that I like and respect than to just go out and compete with them head to head in every market across the country. Does that mean that ultimately perhaps EnergyLogic is a smaller company than what it otherwise be? Maybe. But maybe there’s more fulfillment for myself and my staff in working with other people than just trying to go out and crush them under heel.

OWEN: But it could also be that because of the fact that the industry itself is a new industry that is growing. So by the fact of you going out and helping others who have the same mindset and also in this industry, helping them be more successful. Basically get the industry more mature and growing up more, and more exposed to other people who have interest in using the services of people in this industry. I’m just trying to understand, is that kind of like altruistic goal?

STEVE: I wouldn’t call it altruism because we’re definitely trying to grow all these businesses and make more money. But make more money doing good. But because this is a young, relatively small industry, there’s a ton of opportunity for professionalism. And if we professionalize a core group of really good companies in the industry, It probably benefits everybody because they’ll have to keep up. And it benefits us because… It’s like this. If you’re training to run a race and you run with people who are slower than you, they’re not going to push you, right? But if you run with somebody who’s as fast as you are maybe even better, just a little bit faster, then you’re going to run better, you’re going to get faster yourself. And that’s a little bit of that collaborative yet competitive spirit that we’re trying to build in this [Unintelligible 00:48:10].

OWEN: So basically the rising tides raises all boats.

STEVE: Yeah, again, it’s relatively new in the grand scheme of things and there’s a ton of work to do. We’ve got a long way to go in this country with reducing energy and houses. So we’re nowhere near the finish line in terms of what we can do with this industry.

OWEN: Yeah. And what’s the next stage of growth for your business and what plans do you have to achieve next and why?

STEVE: One of the big things that we’re doing at EnergyLogic is that we’re embarking on an employee stock ownership plan, ESOP.

OWEN: Wow.

STEVE: That’s a big deal for us. It’s a big deal for any company that does it. So we’re just starting out on the long process of selling the company to the employees. And that’s really exciting, it’s really complicated, it’s a lot of work, in some ways it’s kind of scary. But it’s really good and we’re really happy to be doing this. It’s very consistent with our values and who are. So that…

OWEN: Why are you doing that? I’m just curious too because I like to know about that.

STEVE: Well, there are a number of ways you can exit a company. And for us we really have a ton of respect and a lot of admiration for the people who work for us, and we feel really blessed that they do. And they’re really good people. I don’t need the whole pie, I’m happy to have my slice in this. So it’s just very consistent with who we are as owners that this is the way we want to go and exit.

OWEN: I can even see that that’s also very beneficial too because it’s a win all the way to go probably IPO or all the way to trying to sell it to somebody else. But the time you sell to somebody else, the president comes in with their own culture and everything. Sometimes that leaves the employees you have and they’re all disenfranchised.

STEVE: Yeah, absolutely. So very early on we made the mistake and the inverse of talking about the company as a family. We don’t talk about it that way. We talk about a team now. But families are a different thing. You don’t leave your family, you can’t get out of your family.

OWEN: You can’t sell your family.

STEVE: Right, but teams can change, morph, and grow over time. People can come and go. So the team is a much better metaphor for us. So that’s all part of who we are.

OWEN: So in summary, just trying to give the summary of the steps you’ve taken so far to get to this point where the business is systematized, so the listener know what to do next. What will you say are the key things the listener have to have in mind in summary?

STEVE: Sure. There’s a lot of people who will say this and somebody didn’t mention when they asked me about influence is Seth Godin, incredibly famous modern thinker. One of the things that he says repeatedly and other people say this too is that you’ve got to know where you want to go. I think not just you, you have to know it, you have to write it down. So you’re going to say, here’s where we are and here’s to go. Right this down and then start working backwards from there, devising a plan for how you’re going to get to that point. I think especially in America we often the mistake of not having a long enough time horizon. So this can take you 5 years to get to where you want to be, put together a 5-year plan. Yes, it’s going to change. The only thing you know is that it won’t be the way you lay it out on paper. But if you don’t do that I just don’t think you can get there. If you lay out that plan, look where the holes are, look where the obstacles are, look at yourself as a business owner. What are your strengths and weaknesses? It’s very obvious stuff but I know what I’m good at now. It took awhile to figure that out, and I’ve hired people who are good at the things I’m not good at. I think that’s another key piece. But all those things matter. Just put together a plan, figure out where the holes are, figure out where you need help, and then stay with that plan. To me that’s the key.

OWEN: Stay focused. What would you say is the very next step for the person who’s been listening all the way to this point to take in order to get started with transforming their business so it runs successfully without their constant involvement.

STEVE: On the assumption that people who are listening to this are interested in that because they sense that they don’t have that, if you don’t have processes in place already, or you systematize a process. You’ve got to determine what your process is. A lot of times we still struggle with this, is do we have two people doing the same job in two different ways. We have this internal debate all the time. And I’ll say we have 15 field people. I say, I don’t believe there can be 15 best ways of doing things. I will entertain the notion that there are maybe 2 or 3 that are roughly equal, but they can’t be 15 best ways. So what are the best ways, the best practices for your business to get it worked done and then make sure that everybody starts to align on those things and everybody’s in agreement. That takes leadership, you got to get everybody on the same sheet of music about what you’re doing, how you’re going to do it, why it matters that everybody does it the same way, roughly speaking. Then you can systematize what you’ve done. Then you could start to get your head above water as the business owner do the other things that you need to do to grow the company.

OWEN: Awesome. I’m always curious to know, is there a question that you are wishing that I would’ve asked you during this interview that I didn’t ask you? And if so, you can post the question and the answer.

STEVE: That’s a great question in itself. You’re a really good interviewer.

OWEN: Thank you.

2. I think this is fun…

OWEN: Now, I got to put my head back together.

STEVE: It’s always fun to think about these things. Most of the time now I guess about what future holds and not so much what the past held. And that’s always good. I don’t really have a question that I wish you’d ask. I’m sorry.

OWEN: No problem. And so, what will you say is the best way for the listener to connect with you and thank you for doing the interview?

STEVE: Mail, possibly through LinkedIn. I’m out there on LinkedIn, that’d be great.

OWEN: Awesome. Now, I’m speaking to you the listener. So far you’ve listened to this interview, I hope you enjoyed it. And if you did I want you to feel free to subscribe to the interview because we have a link on iTunes, it’s by going to sweetprocess.com/iTunes. That way you can subscribe, and everytime we have a new podcast, literally we’ll come to your phone and you’ll know about it. And if you don’t have an iPhone, you can subscribe via an Android device by going to sweetprocess.com/stitcher, and that way you can download the Android app. And if you know someone else who will find this interview beneficial I want you to share with them so that they can checkout this interview and get value from it as well. Finally, if you’re at that point in your business where you’re tired of being the bottleneck and you literally want to get things out of your head, document step by step procedures so your employees know what you know and actually carry out tasks and execute just the way you want them to, sign-up for a free 14-day trial of SweetProcess. Steve, thanks for doing the interview.

STEVE: You’re very welcome, thank you.

OWEN: And we’re done.


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