Speaker: Iowa the land of fields, whether it's fields full of corn
Speaker: or fields full of baseball dreams and those fields, they're
Speaker: often full of tractors. The site is so common. Most
Speaker: people don't even notice them
Speaker: until they notice that they're driving with no one at
Speaker: the steering wheel.
Speaker: Sheriff's office. Can I help you? I just saw something
Speaker: a little strange. A tractor out in the cornfield that
Speaker: was driving along by itself.
Speaker: There was nobody on the tractor but it was moving.
Speaker: Could you actually tell there was nobody in it? Yeah,
Speaker: because it's an open cab tractor.
Speaker: It was, there was no one on the seat. I
Speaker: just felt like I should probably let somebody know. I
Speaker: don't know if someone can go out there and just
Speaker: check the seat. Ok. We'll have somebody check it out. Ok,
Speaker: thank you. All right, thanks.
Speaker: That's just one of many times that Craig Rupp had
Speaker: 911 called on him and not because he's going around
Speaker: pushing people out of tractors, but because his company Sabato
Speaker: is changing the way America farms forever.
Speaker: I knew agriculture. I knew machines. I wanted to disrupt
Speaker: the industry. I want to send a message that autonomy
Speaker: is coming in agriculture. That's why I think the next
Speaker: generation tractors are already sitting in your machine shed.
Speaker: Welcome to The Unshakeables from Chase For Business and Ruby
Speaker: Studio from iHeartMedia. I'm Ben Walter CEO of Chase for Business,
Speaker: on The Unshakeables We're sharing the daring moments of small business owners
Speaker: facing their crisis points and telling the stories of how
Speaker: they got through it. If you're new to the show. Welcome,
Speaker: if you've been listening, welcome back over the next few weeks,
Speaker: we'll be highlighting exceptional small businesses from across the country.
Speaker: We'll also be hearing from experts in those markets who
Speaker: can tell us what the business and communities supporting them
Speaker: mean for America. But this week, we're firmly in the
Speaker: Hawkeye State and we have two great guests joining us today,
Speaker: Brian Lamb and Sachin Sehgal.
Speaker: You know, the more we learned about Sabanto and Craig's business,
Speaker: the more it made sense to have those intimately familiar
Speaker: with the local market. Come on and chat with us.
Speaker: Sachin is the founder of elevate digital marketing, an agency
Speaker: based in Des Moines, Iowa Satin. Welcome to the unshakeable.
Speaker: Thank you very much, Ben. It's great to meet you.
Speaker: So I really love Iowa. I grew up here. I
Speaker: have a small business here and I really love it
Speaker: as a place for innovation.
Speaker: I know most people picture the coasts when they think
Speaker: about A I and tech, but there's so much happening
Speaker: in the Midwest that I'm excited to show off. All right,
Speaker: let's get into the show. This is Sabanto Agriculture from
Speaker: Ames Iowa.
Speaker: I was fortunate enough to spend some time in Iowa
Speaker: this summer. What really stood out to me is just
Speaker: how much Iowans love Iowa. I talked to some terrific
Speaker: people and it's amazing how people all over Iowa seem
Speaker: to have this real emotional and almost physical connection to agriculture. It,
Speaker: it's just a way of life in Iowa. So as
Speaker: soon as I met Craig, there was one question I
Speaker: had to ask immediately.
Speaker: Craig, I believe you grew up on a farm. Is
Speaker: that right? I most certainly did. I grew up on
Speaker: a farm in northwest Iowa. A little town called Cherokee.
Speaker: It's about 5000 people now and it was corn, soybeans,
Speaker: hogs and cattle. What was that like growing up in
Speaker: an agricultural community?
Speaker: You know, it, it felt normal while I was there.
Speaker: I guess that's what you knew. Right. That was your life. Yeah. Yeah.
Speaker: And everyone I knew had something to do with farming
Speaker: chores in the morning chores in the afternoon when you
Speaker: got home from school, you know, you had to feed
Speaker: the cattle, feed the hogs, you know, I just assumed
Speaker: that this was a part of growing up outside working.
Speaker: So when you were growing up in this rural community
Speaker: on a farm,
Speaker: did you imagine someday you would own a business No, I, I,
Speaker: it was never really a plan for me. I never
Speaker: would have imagined that I would ever start a company.
Speaker: The little town I grew up in, had a radio
Speaker: shack and then by God they had books and you
Speaker: could learn about electronics. It was like the internet for
Speaker: me back in the early eighties,
Speaker: 1984 when I graduated high school and went to college
Speaker: to become an electrical engineer. I, I was convinced that
Speaker: was the last time I would ever set my foot
Speaker: on a farm again.
Speaker: Craig followed that engineering track working at Motorola in the
Speaker: nineties where he did hardware development for mobile phones. Around
Speaker: 1995 Craig and some fellow Motorolans saw an opportunity, mobile
Speaker: and cellular devices were taking off. We had decided that
Speaker: we're going to start a consulting company we would meet
Speaker: in the mornings at a local restaurant and then we
Speaker: kind of did the old pinky promise that if we
Speaker: could get $30,000 in contracts, then
Speaker: that would hold us out to the end of the year.
Speaker: And it turns out about two weeks later, we had
Speaker: $30,000 in contracts. So we gave her two weeks notice
Speaker: and went out and started what was called Alliance Technologies Group.
Speaker: Craig kept chasing his curiosity working at John Deere apple, blackberry,
Speaker: Nokia Samsung, and a few other household names. And while
Speaker: he never imagined he'd be an entrepreneur once he started
Speaker: Alliance Technologies Group. He couldn't stop you. You have started
Speaker: how many companies? Uh This is my sixth.
Speaker: So the fifth company he started was called 640 Labs.
Speaker: It combined his work at John Deere on internal cab
Speaker: displays with his work on the Apple ipads cloud data
Speaker: storage system.
Speaker: My brother still farms. I was at his farm. I
Speaker: was sitting in one of his tractors that he just
Speaker: bought and I saw this little port, all the engine
Speaker: data is on this port. And then my friend and I,
Speaker: we started this company and the whole idea was we're
Speaker: going to take data off of that port or off
Speaker: of these vehicles. Agriculture data into the ipad, ipad up
Speaker: into the cloud. So it was a very inexpensive way
Speaker: of collecting data.
Speaker: 18 months later, we got acquired by Monsanto
Speaker: at Monsanto. He was back in regular conversation with farmers.
Speaker: I had a unique skill set. I knew farmers, I knew,
Speaker: you know, what made them tick. I can talk with
Speaker: them about planting corn soybeans. And you know, I'd always
Speaker: ask the question, what keeps you up at night? And
Speaker: it was always labor. You know, it was the cost
Speaker: of labor. It was the lack of labor.
Speaker: The availability of farm labor has changed over the years.
Speaker: The average age of the American farmer is 59 and
Speaker: farm families are much smaller than they used to be.
Speaker: I have 57 1st cousins and both my parents had
Speaker: double digit brothers and sisters and all of them had
Speaker: a lot of Children and now just you have four kids. Now,
Speaker: that's a big family. I thought, you know, autonomy is
Speaker: the answer for it.
Speaker: Ok. So this is where I want to bring Sachin
Speaker: back in- Sachin, You've lived in Iowa your entire adult
Speaker: life and it seems like you have no plans to leave. So,
Speaker: what did you think about Craig's departure? He said he
Speaker: never wanted to step foot on a farm again. You know,
Speaker: it's interesting. I bet many people had the same ideas, Craig,
Speaker: but there's a lot of people moving back to the
Speaker: area post COVID because they kind of realized that Des
Speaker: Moines has quite a bit to offer in terms of
Speaker: innovation and entrepreneurship. So it's kind of nice to see
Speaker: a boom coming back in.
Speaker: We've heard from Craig about the path he took and
Speaker: his background leading him to a place like Sabanto. But
Speaker: what's striking to me is that this is a guy
Speaker: who said he never wanted to be back in Iowa,
Speaker: never be back on a farm. And now he's created
Speaker: an agriculture company and is farming full time. I mean,
Speaker: what do you make of that?
Speaker: You know, we've seen a lot of companies in Iowa
Speaker: and Des Moines specifically come out of the agricultural space
Speaker: and a lot of companies providing new innovative solutions to
Speaker: older problems. We've seen recycling companies doing things like plastic recycling.
Speaker: We've seen fertilization companies with different types of fertilization techniques
Speaker: and planters with different planting companies. So Craig is really
Speaker: pioneering his way in that field on the agricultural side
Speaker: of things, using A I and automation to bridge that
Speaker: manual to tech divide,
Speaker: you know, so much evidence of innovation in that sector. So,
Speaker: but I do want to talk about A I for
Speaker: a second because it's everywhere you can't pick up the
Speaker: paper without reading about it. Assuming you actually pick up
Speaker: a paper anymore. But that's a different issue and it's changing,
Speaker: people are talking about it, changing the way we all
Speaker: do business. So do you use A I in your work?
Speaker: We use A I all the time, we use multiple
Speaker: different tools. It's kind of a, a common theme that
Speaker: we're seeing with a lot of businesses actually using A
Speaker: I in different ways to, to bridge that gap between
Speaker: maybe manual processes that they've been doing in the past
Speaker: and completely digitally native processes that they're moving in towards.
Speaker: Even if that's just an email follow up automation when
Speaker: a client checks out or just finding A I chat
Speaker: bots or even call bots that uh someone can call
Speaker: and interact with.
Speaker: Yeah, automation and A I are going to be a
Speaker: huge help for small businesses. One of my clients in
Speaker: particular similar to Craig, their business leads with A I
Speaker: as a solution. They're a telecom provider. And one of
Speaker: the things they provide is an A I detection of
Speaker: safety equipment for schools, organizations, municipalities. So, you know, when
Speaker: you see someone with a fire hazard or, or some
Speaker: sort of uh threat to, you know, the safety of
Speaker: a building,
Speaker: this company is using A I to basically dispatch emergency services.
Speaker: So, Craig's goal with Sabanto is to make up for the
Speaker: lack of human labor and farming where he sees a
Speaker: shortage and that could stoke a lot of people's fear
Speaker: about A I replacing human jobs. What would you say
Speaker: to them? There may be rules that are just moved
Speaker: around in the company. But
Speaker: at the end of the day, you definitely need a
Speaker: person before you can just push A I content out
Speaker: there unless it's pretty much just gathering information. So we
Speaker: see it on our end a lot where the A
Speaker: I will get you really close to the end result
Speaker: that you're looking for. But you still need to do
Speaker: a little bit of manual input. It does a great
Speaker: job with graphics design, things like that as well, but
Speaker: it just still needs a human touch at the end
Speaker: of it to get it ready for production.
Speaker: I tend to agree with you, Sachin. I think we've
Speaker: had other technological revolutions before and there's always been the
Speaker: threat of job eliminations and there always have been some,
Speaker: but it's, they've always created more jobs than they've eliminated.
Speaker: They've just been different. And I think this time will
Speaker: be no different.
Speaker: So, back to Craig, he like Satin knew the problem.
Speaker: Not enough help on the farm and the solution, it's autonomy.
Speaker: If this was a math test, this would be the
Speaker: part where Craig would have to show his work. I'll
Speaker: let him walk you through the steps.
Speaker: So I've written software, done hardware. I have started companies
Speaker: in the past. I knew farmers, I knew what made
Speaker: them tick. And I used to work a lot automating
Speaker: manufacturing plants. If there's anyone that can do this, I
Speaker: can do this.
Speaker: In 2018, I started the company. I went out and
Speaker: leased a 4220 AJ CB tractor and I went out
Speaker: and bought an 18 year old 20 inch planter and
Speaker: I got a CD L that's a commercial driver's license,
Speaker: by the way, Craig got it so he could drive
Speaker: the semi truck to haul his tractor to farms across America.
Speaker: And I spent the winter writing software. I promise I'm tracking.
Speaker: At least I know what a planter is when you
Speaker: start telling me what kind of planter. I confess, I've
Speaker: lost the plot but to anyone who's worked on a farm,
Speaker: I'm assuming they know. Yeah, it's a standard 18 year
Speaker: old 20 inch and we're planting soybeans farmers kind of
Speaker: an uh,
Speaker: a group of people. They, you know, they won't trust
Speaker: anyone to plant corn. The only thing I know about
Speaker: corn is it's supposed to be thigh high by the
Speaker: fourth of July. Uh, yeah, that, that was, you know,
Speaker: back in the thirties or so. But now, you know,
Speaker: now it's typically shoulder high by the fourth of July
Speaker: with corn off the table. Craig went after soybeans, he
Speaker: set his sights on having a minimum viable product to
Speaker: test in the spring of 2019.
Speaker: He spoke to a few people about testing the tractor
Speaker: out on their fields.
Speaker: Agriculture has two degrees of separation. So I swear to God,
Speaker: I can get to any farmer in the US through
Speaker: two people. If you're keeping score, that's four degrees less
Speaker: than Kevin Bacon would need to get to someone. Yeah,
Speaker: I've met him, by the way.
Speaker: Word of Craig's wild autonomous planter spread quickly
Speaker: after about two weeks of word on the street that
Speaker: some crazy guy is gonna stop by with a autonomous
Speaker: tractor and planter and autonomously plant their crops. They were
Speaker: lined up. Craig launched Sabanto on May 3rd 2019. He
Speaker: didn't choose that date because it was some momentous occasion.
Speaker: It was once again all up to the farmers.
Speaker: It was the farmer that told me early May we're
Speaker: going to be planting so you better have everything together.
Speaker: Craig didn't, but he launched anyway,
Speaker: I slept in the uh sleeper of that Peter bilt
Speaker: and there were some cold nights because I didn't have
Speaker: a heater in it, but it was a learning experience.
Speaker: The software was nowhere close to being product. I it
Speaker: was more of a proof of concept. Can this thing run?
Speaker: Craig drove the semi and the tractor planting beans across
Speaker: the Midwest.
Speaker: It was a very rainy spring. So on days he
Speaker: got rained out of planting. He was flying out to
Speaker: California to meet with V CS. Raising money from V
Speaker: CS isn't always easy, but Craig had a good track
Speaker: record to back him up.
Speaker: Everyone saw 640 labs. Kind of an interesting little company
Speaker: that got swallowed up quickly by Monsanto and I was
Speaker: a co founder of that company. And I think that
Speaker: gave me a lot of credibility when getting in front
Speaker: of V CS. Lo and behold, I, I got a
Speaker: term sheet and I closed on a funding round. Craig
Speaker: had squeaked through that first season planting, but if he
Speaker: wanted to make Sabanto succeed, he needed a team.
Speaker: So I went back to Chicago and I convinced five
Speaker: people to leave their perfectly paying job and join me
Speaker: in this quest to take autonomy into agriculture. Did you
Speaker: think after that first season, did you think, you know,
Speaker: I've got something here like it might have been hard
Speaker: work and it might have been, it might have been difficult,
Speaker: but I've, I've got something or you weren't sure I
Speaker: knew all the problems I ran into were solvable
Speaker: and, you know, II I knew I couldn't do it myself.
Speaker: I mean, it was all off the shelf components. It was,
Speaker: you know, a big box sitting in the tractor wires
Speaker: going all over. And the software there was, it was
Speaker: literally command line software. There's still a hell of a
Speaker: lot of development that needed to be done on it. Well,
Speaker: someone who remembers the late seventies and early eighties, I
Speaker: learned to run software on command line. But I think
Speaker: uh I think today that doesn't meet the hurdle, does it?
Speaker: Uh No.
Speaker: So then you got some funding. How much did you raise?
Speaker: $2 million? Ok. So you get some funding, I assume,
Speaker: then you start working on truly products, this and making
Speaker: it sort of fit for purpose and building it out properly.
Speaker: Is that what came next?
Speaker: Yeah, it wasn't necessarily products and it was more of
Speaker: take it to the next level, get it to work reliably.
Speaker: In early fall 2019, 1 of Craig's farmer friends reached
Speaker: out and said that he had 350 acres of land
Speaker: that needed to be seeded with a cover crop for
Speaker: the winter planted after the fall harvest, cover crops, help
Speaker: revitalize the soil and prep it for spring planting again.
Speaker: I thought, well, this is perfect.
Speaker: They were finally able to get started in mid November.
Speaker: Craig experimented with smaller horsepower tractors with his software to
Speaker: see if that helped reliability
Speaker: horsepower equals work divided by time, what autonomy does is
Speaker: it increases time and time is inversely proportional to horsepower.
Speaker: So you increase time, you decrease horsepower.
Speaker: They tested it out on smaller fields before they went
Speaker: to the 350 acre plot.
Speaker: We had an 80 acre field and 6 a.m. in
Speaker: the morning. We're out there, let's get going on this.
Speaker: We should be able to get this done by uh
Speaker: 23 o'clock. Right, We left the field at right around
Speaker: 2 a.m.
Speaker: and we had only covered about 10 acres
Speaker: this time, we actually practiced before we got there and
Speaker: everything's working fine and we get to the field and
Speaker: nothing is working. The planter won't plant and the engineers
Speaker: are working feverishly trying to fix it and between the
Speaker: path planning, controlling the stamp thing, making sure it goes straight,
Speaker: making sure gps is working. It was really bad. And
Speaker: the six of us
Speaker: went back that night and I know everyone was absolutely frustrated.
Speaker: I remember going to bed at around two o'clock and
Speaker: waking up at four o'clock and thinking to myself, what
Speaker: the hell did I get myself into? We hear that
Speaker: phrase a lot
Speaker: nature as we know runs on its own schedule. Mid
Speaker: November rolled around and it was time to plant 350
Speaker: acres of cover crop, whether Craig and his team were
Speaker: ready to or not. They took their tractors out to
Speaker: rural Illinois to the farm and set up their mobile
Speaker: lab in the tent by the side of the field.
Speaker: You know, 300 is a very large number when you're
Speaker: 10 ft wide and, you know, going five mile an hour.
Speaker: So we're doing five acres an hour. And if you think, oh,
Speaker: we'll just run it 24 hours and, you know, it
Speaker: will be done in three days.
Speaker: The guys were laughing, they still laugh about just sitting
Speaker: in this little tent in the, in the late afternoon,
Speaker: about four or five o'clock, it just started snowing and
Speaker: then by,
Speaker: oh, I'd say midnight one o'clock, uh the wind kicked
Speaker: up and it started blizzard if you can imagine just
Speaker: the blowing wind. And then the six of us sitting
Speaker: in this little tent tractor out there still working. Mind you.
Speaker: And there's someone sitting out on the tractor and we
Speaker: would take shifts on who had to sit out on
Speaker: the tractor. We had snow mobile suits and insulated coveralls
Speaker: and whatnot. But someone had to be the poor bastard
Speaker: who had to go out and sit on the tractor
Speaker: for the next hour or two because we didn't have
Speaker: absolute control of the tractor. There was some functionality missing.
Speaker: If it goes over a little hill, we would lose
Speaker: communications with it. And then the person would have to
Speaker: do it manually park the tractor over here and then
Speaker: let's see if we can get a path plan made.
Speaker: And for one reason or another, we were off by
Speaker: 2 ft to the left. It was, it was pure hell.
Speaker: And this wasn't just one day. This was over multiple days.
Speaker: I was concerned that some of the guys would not
Speaker: come back the next, next time because this is perhaps
Speaker: the craziest thing they've ever done. Oh, and by the way,
Speaker: all six of them were staying in the farmer's basement.
Speaker: During all of this, two of us got a bed
Speaker: and then the other four of us were sleeping on
Speaker: the floor. The other thing to add insult to injury,
Speaker: the shower, the hot water didn't work on the shower.
Speaker: You know, we didn't want to let the farmer know
Speaker: because he's out doing field work and I don't want
Speaker: to bother him. So we didn't say anything about it.
Speaker: But then we were taking cold showers and living in
Speaker: a basement and then trying to, uh trying to get
Speaker: this damn thing to work in the end, the 350
Speaker: acre field they thought would take three days. It took
Speaker: three weeks.
Speaker: We felt defeated. There was a lot of fear, uncertainty
Speaker: and doubt.
Speaker: I'm sure everyone in the company had reservations about. Is
Speaker: this going to work? Is this going to get better?
Speaker: Like why am I doing this? Did you think about
Speaker: giving up at the time? No, no,
Speaker: I don't quit.
Speaker: When did it come along far enough that you thought? Ok,
Speaker: I've cracked this nut in 2021. We were doing tillage
Speaker: just west of Chicago. We ran at 48 hours nonstop.
Speaker: We let this thing loose in a, oh God, I
Speaker: think it was 480 acre field and this thing ran
Speaker: day in day out, never stopped. And
Speaker: at the time I looked at this and I'm like,
Speaker: I started to see light at the end of the tunnel,
Speaker: we had path planning working. We were monitoring all aspects
Speaker: of the tractor. We were holding the line within a
Speaker: good one inch, two inches and it was just a
Speaker: matter of keeping fuel in it. Craig had finally figured
Speaker: it out. And since 2021 Sabanto has continued to grow,
Speaker: their autonomous product is called steward and it supports 19
Speaker: different tractor models. As of today,
Speaker: we have 40 employees right now, split between Iowa and
Speaker: Chicago and we have a good 30 to 40 customers
Speaker: right now. Farming operations all scattered throughout the US. We
Speaker: have quite a lot in Florida and Georgia starting to
Speaker: do a lot in Texas right now. From California to
Speaker: New York, Texas, to Wisconsin.
Speaker: Oh, wow. So really, truly nationwide. Do you retrofit someone's tractor?
Speaker: Did you send someone out to install this on the
Speaker: tractor they already have or do you just send them
Speaker: a kit and they do it themselves? How does this
Speaker: actually work?
Speaker: So, we have dealers throughout the US and normally they
Speaker: do the installation and we obviously help with the installation.
Speaker: So we get to a farming operation and we do
Speaker: a demo at this point in time, we actually haul
Speaker: a tractor onto their premises and let them use it
Speaker: for two weeks. And once they get hooked,
Speaker: whatever tractor that they have, what we do is we
Speaker: install the autonomy system on that tractor and then they
Speaker: can remotely control and monitor that tractor perform field operations.
Speaker: I did a little bit of research before this interview
Speaker: and I learned all about
Speaker: the technology investments that the big guys are making. The
Speaker: deers of the world are making in terms of autonomous tractors.
Speaker: You know, these big combines that can do all the
Speaker: stuff that can laser the weeds and whatever. But I
Speaker: also learned all about the right to repair battles that
Speaker: are going on between farmers and manufacturers. So I'm curious,
Speaker: does your solution play into that at all? You know,
Speaker: the ability to sort of keep your tractor and repair
Speaker: it and do what you want and then have some
Speaker: of these autonomous features just layered on at a, at
Speaker: a lower cost.
Speaker: I'm all for the right to repair. I'll, I'll be
Speaker: honest with you. If someone could fix something remotely without
Speaker: me getting involved, I'm all for that. And we give
Speaker: them the tools in order to do that. But it
Speaker: is an interesting alternative. You know, you can go to
Speaker: one of the big manufacturers and buy this giant very
Speaker: expensive smart tractor or smart seater or smart whatever or
Speaker: you can take the equipment that you already have and
Speaker: give you a call and make it smart. Your next
Speaker: generation tractors are sitting in your machine shed.
Speaker: I just love that idea so much. The next generation
Speaker: tractor is the one you already own. I think a
Speaker: lot of people stumble onto great ideas that seem so
Speaker: totally out of the blue, but make perfect sense. Once
Speaker: you look at combining some tools that no one's considered
Speaker: as a result, Craig's business has grown considerably and as
Speaker: part of that growth, he's moving into a new segment
Speaker: of our bank
Speaker: for our listeners, I lead small business here at Chase
Speaker: and Brian Lamb, my friend and partner is the northeast segment.
Speaker: Head for the middle market. We work closely together to
Speaker: take care of those businesses who are growing to the
Speaker: next level. And so I wanted to bring Brian in
Speaker: to give people a sense for what that means. So Brian,
Speaker: it's great to have you on the show. Thanks for
Speaker: being
Speaker: here,
Speaker: Ben. It's good to see you. Good to be here.
Speaker: And uh thanks for having me. It's exciting to see
Speaker: companies progress in their growth trajectory and there's some common
Speaker: themes and patterns I I maybe can touch on first
Speaker: you hear the term middle market. What does that mean?
Speaker: Generally it means first that you have reached a certain
Speaker: size and complexity size could be driven by revenue. Maybe
Speaker: you've got, you know, go from 10 million to 20 million.
Speaker: That's one example. Also, complexity, complexity could be defined as,
Speaker: you know, the geographies that you cover. Maybe it used
Speaker: to be a city and a county and now it's
Speaker: states or maybe even countries. The other part of the
Speaker: complexity is your capital structure. Maybe historically had a small
Speaker: line of credit or a credit card or you were
Speaker: able to actually build that business with friends and family capital.
Speaker: But now you're moving to different types of capital and
Speaker: different types of financial needs. If I think about the
Speaker: transition and
Speaker: maybe one of the one or two of the things
Speaker: I see companies that do it well. And by the way,
Speaker: I got to pause and applaud what Craig and Sabanto
Speaker: to have, have done, they've done a fantastic job of
Speaker: scaling and growing. What I see is a challenge though,
Speaker: I would tell you is when companies don't anticipate some
Speaker: of those needs that may happen when they get much bigger,
Speaker: I'll give you a couple of examples. One, their working
Speaker: capital needs change dramatically, right? When, when you own a
Speaker: small business, there's the phrase, hey, making Payroll where it's
Speaker: not always a figure of speech, you know, but managing
Speaker: your working capital and the cash collection cycle can become
Speaker: very complex as you get much bigger. And we see
Speaker: a lot of companies struggle there. The second thing believe
Speaker: it or not is talent, right? You know, Ben, you
Speaker: and I always talk about the talent that you may
Speaker: have started with when you were a small company may
Speaker: need to look different. The folks that are really helping
Speaker: you run and scale the business
Speaker: talent becomes a really big consideration. And then partners
Speaker: who are the partners, who are the advisors, your accountant,
Speaker: your lawyer, your bank, the in the institutions that ultimately
Speaker: help you make sound decisions for growth. You have to
Speaker: think about those as well as you scale and grow.
Speaker: Yeah. The other thing I I often talk about is
Speaker: a combination of complexity and scale, particularly with respect to your,
Speaker: your staff. I always say there are two big inflection
Speaker: points when you are growing a staff, when you have
Speaker: up to 50 people or so, you can really know
Speaker: all of them and you know which ones are good
Speaker: and which ones are less good and which ones have,
Speaker: which quirks and there's an inflection. Once you go beyond
Speaker: 50 you can't know all of them. It's tough up
Speaker: to about 200. You can still know who all of
Speaker: them are. You don't know them. You probably only know
Speaker: that about 50 but you know who the 200 are.
Speaker: And then once you hit 200 you see people and
Speaker: you don't know if they work for you or not.
Speaker: And that's a really different mindset around your business because
Speaker: you really are relying on your leaders to know those
Speaker: employees and to cascade your message. And so I always
Speaker: tell people that you, that you need to think about
Speaker: those two inflection points 5200. Like when do I stop
Speaker: knowing everyone personally? And when do I stop knowing who
Speaker: everyone is?
Speaker: I
Speaker: love it be because
Speaker: I think those are really interesting goalposts to think about.
Speaker: And it goes back to something you and I always
Speaker: talk about, which is culture when you built the company,
Speaker: when you started it and you began to grow, there
Speaker: was a culture, there were values, there were principles that
Speaker: you as the leader as the founder believed in. Well,
Speaker: you don't want to lose those as you grow and
Speaker: so you can make all of these other really smart
Speaker: business decisions. But to your point
Speaker: as you start having hundreds of employees, one of the
Speaker: things that you most importantly want to focus on and
Speaker: protect is the very culture that helped you be successful
Speaker: from the beginning when you grow, slow down
Speaker: and just realize what got you to that point, you
Speaker: may have to do some things differently to continue to
Speaker: scale and grow.
Speaker: Have you ever seen in these growing companies? A founder
Speaker: and CEO actually bring in and hire a CEO and
Speaker: say I'm going to do the things that I like
Speaker: doing and I'm good at, but I'm going to have
Speaker: a professional run. The actual uh do you see
Speaker: that?
Speaker: I, I, Ben, I would tell you, I see it
Speaker: more often than not. Actually, when a company has reached
Speaker: a certain inflection point, they've grown, maybe they have international
Speaker: services and products now, maybe they've expanded into different product
Speaker: lines which requires different expertise to your point. They are
Speaker: a much bigger people business. Now, they've got 1000 employees
Speaker: instead of 100.
Speaker: I have seen investors and founders bring in a new
Speaker: CEO that is a better fit, I guess I would
Speaker: say is the word. It doesn't mean that that founder
Speaker: CEO investor doesn't add tremendous value
Speaker: and they still own and they still
Speaker: own the business. And
Speaker: in almost every scenario, they still own the business.
Speaker: But they have found someone that's a good fit for
Speaker: where that company is in the life cycle of their growth.
Speaker: And I got to tell you when I've seen that happen,
Speaker: I've seen that company thrive and grow.
Speaker: One of the things that I often hear clients talk
Speaker: about as they transition up to the middle market is
Speaker: I need to build infrastructure. I'm running this thing on
Speaker: a shoestring. I'm running this thing informally. I've got to
Speaker: build infrastructure to scale this thing. What does that actually mean? Yeah.
Speaker: No, it's important infrastructure
Speaker: could mean things like
Speaker: investing in technology to improve automation, right? Maybe before manual
Speaker: processes because of the size and scale of your business
Speaker: really made sense financially, you know, strategy wise. But as
Speaker: you get much bigger and you become more complex,
Speaker: having digital capabilities for your teams and your clients will matter,
Speaker: automating processes to streamline how you do business and remain
Speaker: if you will efficient, become important. Another example of infrastructure
Speaker: might be cybersecurity, just protecting the value and the assets
Speaker: that you've created. I see this all the time at
Speaker: JP Morgan Chase. And
Speaker: one of the things I try to get folks to
Speaker: think about is even though cyber and fraud, those may
Speaker: be things that you're aware of. Are you doing enough
Speaker: in your infrastructure to harden the assets and maybe one
Speaker: other infrastructure point I would raise as you think about
Speaker: your scale and your growth
Speaker: is the quality of your financial statements
Speaker: and your ability to produce timely reliable reporting, both operational
Speaker: reporting and financial reporting. It will help you make better
Speaker: decisions that will better inform your partners and advisor that
Speaker: you work with on a regular basis. And principally I
Speaker: call it helping you look around the corner, right? You
Speaker: may see things in those operational and financial reports
Speaker: that help inform what your next best decision might be.
Speaker: I tell you what it's exciting to see those leaders
Speaker: that can make that sustainable transition, right? And there are
Speaker: a couple of key I guess elements I see or
Speaker: dimensions I see in those types of leaders. One they
Speaker: just
Speaker: always are resisting complacency. The idea that you have reached
Speaker: a certain plateau and that you can cruise or that
Speaker: you think you've done enough that your competitive advantage will stand.
Speaker: The test of time. Second is diversification.
Speaker: So the products and services or the geography or the
Speaker: client base that you built over the years, I would
Speaker: encourage folks to be restless about continuing to diversify their business. Right.
Speaker: Maybe there's new products and services. Maybe you, you've historically
Speaker: grown through acquisition and you're going to do a better
Speaker: job through organic. Look at your share of wallet, right?
Speaker: Even though you've got a great client base, could you
Speaker: deepen that share of wallet? Could you take a bigger
Speaker: percentage of their spin and
Speaker: they do business with you? Your margins? There's always an
Speaker: opportunity to look at margin improvement even as you grow.
Speaker: Can you grow profitably in a very efficient way? And
Speaker: maybe the last thing I see leaders do is kind
Speaker: of a deep focus on productivity,
Speaker: right? They've gotten to a really big size and scale,
Speaker: they've continued to grow. And now what could they do
Speaker: for every incremental dollar they invest? How productive is that individual?
Speaker: Is that investment? And is it driving the returns that
Speaker: a business owner would expect? And so
Speaker: when I think about those leaders that kind of bend
Speaker: the curve, those are some of the key elements I
Speaker: see them demonstrate,
Speaker: it seems like what reads through all that though is
Speaker: continued hunger.
Speaker: It's really special to see the small businesses thrive and
Speaker: grow and move into the middle market and beyond. And
Speaker: so that is at the end of the day, one
Speaker: of the most important elements of this country is a
Speaker: chance for us to do business and see companies grow.
Speaker: And finally, Sachin, I want to bring you back in.
Speaker: Here is Craig's story unusual and that he's been successful
Speaker: in an area that the big companies have been going
Speaker: after or do you see that frequently? Craig's story definitely
Speaker: isn't unique. I'd say in terms of entrepreneurs creating more
Speaker: efficient ways to do things in an older industry such
Speaker: as agriculture. There's definitely a lot of entrepreneurship and young
Speaker: companies that are making waves in the industry where generally
Speaker: you see big players for the most part.
Speaker: Uh Craig touched on something that I think is important,
Speaker: which is in a world that is increasingly tech driven
Speaker: where you, you know, you're in a part of the
Speaker: country that doesn't necessarily have the depth of tech talent
Speaker: that a Chicago or a Silicon Valley or New York
Speaker: City has. How does the region and how do the
Speaker: entrepreneurs in the region face into that? What does that
Speaker: feel like on the ground? He's definitely right about that,
Speaker: the talent locally, especially with universities and things like that.
Speaker: Even though Iowa State and Iowa are great, they have
Speaker: great tech programs, great for your science programs.
Speaker: I think family history and the culture of the state
Speaker: really breeds a lot of people that are still lean
Speaker: in the agricultural side of things. But when it comes
Speaker: to the tech side of things, we realize that there
Speaker: may not be such a big talent pool here in
Speaker: the Midwest or in Des Moines or in Iowa specifically.
Speaker: So people will pull from Chicago or bigger markets where
Speaker: there are more intense tech pools and kind of marry
Speaker: those two different industries on how to communicate the tech
Speaker: side of things with what your project on the ground
Speaker: is going to be. What do you think are, are
Speaker: the advantages to owning and starting a business in a
Speaker: place like Iowa?
Speaker: I can speak to Des Moines specifically. The entrepreneurial community
Speaker: here is really vibrant, it's really thriving and there's so
Speaker: many cool local resources that you can tie into to
Speaker: get either well networked or find funding and being from
Speaker: a smaller town and a smaller demographic in a, in
Speaker: a geographical area, you definitely get to know each other
Speaker: a little bit better. So the ability to connect with
Speaker: people that you're trying to get in contact with. It's
Speaker: a shorter connection. Generally, it's also even a personal connection
Speaker: where you can find someone that
Speaker: know someone personally that you can get in contact with.
Speaker: So it's becoming a little bit more of a cultural
Speaker: hub for smaller agricultural companies and smaller start ups. I
Speaker: hope that continues that that trend would be, would be
Speaker: really cool to see flourish over here.
Speaker: Thanks so much for listening to this episode of the unshakeable.
Speaker: And thank you to Craig Rupp Sachin Sehgal and Brian
Speaker: Lamb for speaking with us today. If you like this episode,
Speaker: please rate and review it. And if you know someone
Speaker: who may like the series, please tell them about it.
Speaker: Next episode, we'll hear from an entrepreneur who started a
Speaker: company with the full backing of her previous employer. Not
Speaker: just emotional support either they guaranteed her clients and contracts.
Speaker: If she started her own company,
Speaker: we'll be speaking with Quanetta McNeal CEO of House of
Speaker: Logistics out of Birmingham, Alabama.
Speaker: I'm Ben Walter and this is The Unshakeables from Chase
Speaker: For Business and Ruby Studio from iHeartMedia.