Building the Data-Driven Business for a Resilient Future

Starting the conversation:

The future of business success hinges on the ability to harness the power of data. The right data — the information necessary to know your company is healthy and current enough so that you can adapt and iterate. Adam Callinan, CEO at Pentane, talks about how to create a resilient, adaptable company using the right information.

Navigating uncertainty is a business norm. And yet, our results come from what we can control. Making sure key performance indicators are tied to clearly stated endpoints. There is a very real cost to being unclear on where to expend thought, effort, and money. Having real-time, quantifiable data is a necessary piece of the pulse of your business and its ability to thrive in your industry.

In this program you will hear about the biggest learnings from being a CEO, what makes a healthy company (and how to set up your metrics to measure that), and how to work backward from your clearly stated goals to what you are doing now. Jess Dewell talks with Adam Callinan, CEO at Pentane, about building a healthy business that is competitive and resilient.

Host: Jess Dewell

Guest: Adam Callinan

What You Will Hear:

0:50 Big business challenge: What to do when the goalpost keeps moving?

• Know the development cycles — software is different from consumer product.
• Clue to success is how well you develop the ability to iterate quickly.

5:20 Adam Callinan’s biggest CEO learning

• Companies fail when people quit on the idea (even when they stay working with you).
• Use what you already know, and lean into your strengths.
• Just because someone says it doesn’t make it true.

14:30 Data will indicate the choices you have.

• How Pentane solved sales and revenue plateaus.
• Quickly identify when people are in the wrong job or focused on the wrong actions.
• What to do when you start reaching capacity — deciding whether to maximize the top, or to scale and hire.

19:40 What defines a healthy company?

• Success is theoretical until you define it for your company.
• Mentrix are just for your vanity until they have purpose and context.
• Know what makes you profitable and related efficiency ratios.
• It is important to get to real-time, useful information to keep data from being overwhelming.
• Know where you are going and have clear primary objectives.

25:00 Establish endpoints: Our time and money are real and there is a cost of not having a primary objective.

• Once endpoints are known can work backward to what you do know.
• Seek out non-ordinary quantifiable data
• This math works for ALL companies.

32:50 What do you need to be the best in the world at what you do?

• Have guides that provide guardrails to your decision-making.
• Be specific to who you serve and what they need.
• Figure out what questions to ask.
• Define what a healthy business means for your company.

35:10 Building in time for reflection — what Adam Callinan’s reflection time looks and sounds like.

• Question everything — and himself — in relationship to the bigger decisions.
• Build lifestyle routines to sit, think, and meditate.
• Have cues and practice mentally and physically to be present working and with family.
• Minimize distractions.

47:08 It is BOLD to define what makes your company healthy.

Resources

• How We Did $8 Million in Sales with Zero Employees or Investors
• https://pentane.com

Transcript

Jess Dewell 00:00
I’m so glad you’re here. Thanks for stopping by. At the Bold Business Podcast, we are normalizing important conversations. Yes, there are tips. Yes, there are ways to solve problems. More importantly, are going to be what do you need for yourself to be able to solve those problems and make the most of the education, the training and the programs that you are already using. This is a supplement to that. It can sit on top of it, fuel your soul, fuel your mind, and most importantly, regardless of where you’re at on your journey, maybe you’re starting out, maybe you’re ready to scale, maybe you’re going through reinvention, the conversations we are having will help you at each of those stages. So hang around. See what’s going on and I look forward to seeing you engaging with our videos.

Adam Callinan 00:48
Doing anything is better than doing nothing because you will learn from that anything and adjust and you can course correct.

ANNOUNCER 00:57
You are listening to the Bold Business Podcast, where you will hear first-hand experiences about what it really takes to ensure market relevance and your company’s future.

Jess Dewell 01:09
Do you want to know what makes up a healthy company? Do you want to know what Adam Callinan’s learnings as a CEO are that help him continue to drive success today? Do you want to hear about the thing that will help you have a healthy company and achieve the success you want? Those are called having endings so you can start again. Those are the three things that I talk about with Adam Callanan, founder at Pentane. Pentane came from best practices and information that was necessary for Adam’s previous company, Bottle Keeper, to make good business decisions and help them grow from zero to 8 million in just three years. Those business levers, that intention for the right work at the right time, makes all, all the difference. And I will tell you what thinking about some of these things is hard, having and working from lagging data or yesterday’s information is really hard, because we’re always looking to the future. Where are we going? What can we do? Here are these goals. He says, This is where we want to go. And so Pentane was created with these best practices that he found so the intelligence could be more on demand just in time being able to go cool, is my company healthy? Are we on track for success as we define both of those? It’s pretty amazing, pretty amazing. And I have to tell you, talking with Adam, I didn’t want to stop first of all, it’s that good of a conversation. Second of all, you’re going to hear what his biggest learnings as a CEO have been what data can do for your choices and options elements to consider when you’re defining what a healthy company is for you and our time and our money, and the cost of not having endings outweighs not having them at all. And so looking at that in a whole new way as well. So we can flip the script. We can normalize having some conversations that we’ve been avoiding. Because the more we talk about we can break the rules, the more we talk about data will tell us which rules we can break successfully, or maybe with, with more confidence and the willingness to try something new along the way, when it makes sense to keep moving and keep going. I’m excited for you to listen to this conversation, but business perspective.

Adam Callinan 03:30
I’m coming. So my history, I’ve been in a couple different types of companies, and the most recent one, being bottle keeper, is consumer product. I’m realizing now with Pentane. I mean, I realized this a while ago. I’m just it’s something that I’m still struggling with, that the development cycles and software versus the development cycles in a consumer product. In a consumer product, there’s, like, a defined you have an idea, you go deal with intellectual property, make sure you’re not violating patents. You can get a patent. You have somebody make the thing. And I’m taking, like, a year-long process and jamming it into 45 seconds, but you have somebody make the thing six months or three months or two months, or every months later you have the thing, and it’s okay. We’re now a business. We now have the thing. Let’s go figure out how to sell the thing, and that’s company. And in software, that’s not the way that it works. This the like, goal post of the thing is ready, moves continuously, and it will effectively move to infinity if you allow it to.

Jess Dewell 04:31
Oh, that’s the hardest thing.

Adam Callinan 04:31
Yeah. And we are getting very close. The distance that the goal-post is moving is shrinking and shrinking. [Uh-huh.] It is a very different product cycle than I, than the last decade of my life was built around. So that has been a difficult learning curve for me mentally.

Jess Dewell 04:34
And it’s funny because having been in the software world, more working with. Digital and technology more. That’s how I feel about consumer product. I’m like, What do you want to do? How long is this gonna take you? I can’t even wrap my head around this some of the times it is and if you don’t stay in it, it goes away quickly. It’s almost like getting acclimated to the weather. When you move it, you forget really quickly, what that’s like, and I will tell you what that last little bit of that goal post moving, that’s harder because it is not like the end zone, where that goal line, it does not move. It gets harder, but the goal line doesn’t move. You have that extra piece you’re right of, can we hold the goal-post so we can actually get there? Congratulations, though, by the way, I’ll bet it feels awesome to get this far.

Adam Callinan 04:55
It, like all things, has been quite a journey as a completely different chapter of life, post-medical and then post-consumer product and now into software. It’s a dramatically different space. Once it’s moving it, you have the capacity to iterate a lot faster, versus in a company like Bottle Keeper, where you have a product and you have 10,000 or 100,000 units of that product, you can iterate all you want, but you still have to sell through that product. It’s just the upfront cost. Starting bottle keeper cost us $20,000 I’m slightly deeper than that into Pentane, slightly. But once it’s going you can iterate it very quickly. So it’s just a, it’s a fascinatingly different business that, at the end of the day, has much stronger margins. And is that, it’s a, it’s easier to create a healthier SaaS company than it is to create a healthier consumer brand.

Jess Dewell 06:32
Especially when you want healthy margins. One of the things I think is interesting is that the investment is about the same in terms of the dollars that go in, timing might be different, but the dog, I think that’s also another fallacy that if people don’t understand. So I’m glad that you’re bringing this up, because regardless of how you get to market, the regardless there, there is an investment, and it is big time, energy and money, regardless, people think, Oh, we’re going to do this other thing, we’re gonna have less investment. I find that, and then they’re surprised. And I just, I’m like, Just every business with money, that’s it. You don’t know where it’s gonna be spent, or it could be spent differently based off of your business model, but it doesn’t matter. It’s still going to have that money investment. What are the three things that you feel like you’ve learned as a multiple time CEO in a very different market landscape between everything that you’ve done, where you are right now, your biggest CEO learnings.

Adam Callinan 07:30
I did not come up with this. I’ve heard this 1000 times for 1000 people, far smarter than me, but companies fail. When people quit, they don’t fail because the idea was bad. Now the idea might be bad, and that’s good and great and grand, but the reality is, the longer that you have the capacity to stick to it and tweak and change and listen to feedback and remove your emotional response from it, the higher the likelihood that wherever you end up will end up with something that is successful. Now the word success also means a lot of different things to a lot of people, so you lot of people, so you have to define what that is for you. This has been if, again, just looking historically speaking, at Bottle Keeper, we launched in, we launched on crowdfunding just to prove people would pay for the product in fall of 2013 and we make that generated $15,000 or something, which was three times what we were trying to generate. And as then we moved forward, it took another eight months to figure out how to actually sell the product digitally. We wanted to build a company that had no employees, so we had to do everything which is good. That was a choice that we made. And then we wanted to be direct to consumer, which was part of the have no employees if we’re gonna go B to B that has a whole other set of skills and human that needs to be involved in that. But through that whole process, we didn’t even once it started making money. We didn’t pay ourselves for the first two years of the business, because we just reinvested every nickel we had back into growing the business. That was at a point where I had just a lot of another company. I didn’t have kids, like, my wife had a great job, like, we have the flexibility to do that, and that’s being able to do that as what created the outcome that business ultimately had in acquisition years later. And there were a lot of times through that process where we tried real hard to burn it to the ground. We got real close to burning it to the ground an awful lot, and it’s hard. It’s fantastically hard. There are 1000 times that company could have and probably should have failed, but it didn’t, because we didn’t stop. And with Pentane, now, again, a totally different situation. We’re a year and a half into developing a product, and we do have a product out, and we have companies in the product, and we’re getting incredible feedback on the use of the product, and that’s that’s amazing, but the being able to have that built into my experience base is super important for a company like this. That just takes so long to get it to the point where you can really stomp on the gas pedal.

Jess Dewell 09:58
What’s the time frame? So. Far for Pentane, that you’re that you’ve been, what’s that time frame? I know you’re not on the gas pedal yet, but how far are you? How far have you taken to get that much closer to the gas pedal?

Adam Callinan 10:06
We started development on the product in January of 23 about a year and a half. But it’s unfair because the backbone of Pentane is structure that we use that bottle keeper. So we at bottle keeper, like, solved all these problems internally that allowed us to operate at scale without employees, and even at the point of we did end up hiring a couple of people, but like at the point we got acquired as an eight-figure revenue business, we only had four employees, and we had all these systems that we built to help us operate the company. They told us how we were being profitable, how to spend ad dollars, where our returns needed to be to accomplish our goals. And so after acquisition, I went, and I effectively went and helped some companies that we’d invested in, and realized that they had no idea how to make money. It’s and it’s not because they weren’t good operators. They weren’t smart people. They’re phenomenally smart people and incredible operators. It’s just complicated when you particularly when you’re doing it. So I rebuilt some of the things, and it completely changed those businesses. And so all that to say, like by the time we started development on a physical product, we had we knew exactly what the product needed to be. The math was already complete, because it was effectively a much sexier, modified version of the mathematical system that I had built at another company, and so that we had our first company in penta, in the software product, within six months, which is amazingly fast.

Jess Dewell 11:27
That’s like telling somebody who’s if you think about it, I’m gonna use whether it’s a book or a solution or a something else. I’m gonna think about that too, because usually people wait a long time until they have a lot of experience, and then this thing comes out. And even though it takes a long time and it time in and of itself, wow, that took a long time. Somebody without that experience could not have done it in that time frame. So I think there’s, I think there’s value in honoring and owning, hey, I’m using what I already have. Hey, I’m using what we’ve already learned. Hey, I think that there’s something else here that we could do more with and be of service more. So I’m going to call that out and say, Hey, I would change that a little on be like, That’s a cool CEO learning. Look, we got to circumvent the system a little for the next thing we wanted to do, because we found a place to make change. Now,

Adam Callinan 12:13
I appreciate that feedback, and the beauty of that is it happened completely organically. I didn’t leave in post-acquisition. I didn’t leave that experience going, I’m gonna go start this specific company to do this specific thing. That is not how that happened. It came very organically and naturally, and it made it a much more powerful system as a result of that.

Jess Dewell 12:32
I think there’s something to be said for honoring the organic piece. I know some people, and I’ll put myself in this category of drive, drive. I think that actually drives just as many failures as it does successes. And I think it gets in the way sometimes of super success, if you will, whatever that success because I’ve had success look like money, but I’ve also had success look like freedom, and I’ve had success look like all these things. And did my definition line up at the same time? Probably not stealth. Yeah.

Adam Callinan 13:01
It’s funny how that works.

Jess Dewell 13:02
Yeah, it’s crazy how that works. So what would be another one? Right? So we’ve got two. We’ve I’ve got two biggest CEO learnings, don’t quit, and hey, sometimes we already have what we need, and it organically shows up. So then what?

Adam Callinan 13:15
And I will just quickly add to that point, I went and did the exact same thing, to be clear. We got out and I had a performance coach who’s this wise, 70-year-old, epic man who has this crazy background that I could spend a lot of time talking about, but I won’t, for sake of brevity, who told me, do not go start another company. Stop stay home. Play with your kids. Pick up carpentry. Do take six months a year, whatever it is, do literally nothing. And of course, I didn’t do that. I said, Sure, doctor Jeff that sounds great. I Okay. I’m gonna go start a whatever, and then I’m gonna go start and of course it was horrific and terrible because it didn’t make sense, because it was my need to be doing something that was forcing a score peg into a round hole. And that just doesn’t work. I had to learn that myself to be like, Okay, you’re right. I’ll pick up carpentry and do those things to allow that to organically come about, which is a beautiful thing.

Jess Dewell 14:10
I like that. Yes, yes.

Adam Callinan 14:12
The third point that is really important that was built into the thesis in Bottle Keeper because of my prior experience to that is that just because somebody says it or says that it needs to be done a certain way, doesn’t make it true. You can see it in Bottle Keeper. You can see it in Pentane, in the way that we are operating. Bottle Keeper was built on the premise that we wanted to leverage technology and automation to build a scalable business that required no employees or investors. That isn’t on that’s like a unheard of thing, and certainly was in 2013 and it still is today. It’s getting a little better today because it’s harder to raise money today than it was then, but, but it’s that’s like a crazy thing that people are like, Why would you do that? For a lot of reasons, because we can retain control, we can reinvest in the business, we can grow it how we want to. Grow it. I could work from anywhere in the world with an internet connection, which we did. My wife and I traveled four or five, six months of the year for the first five years of the business. You as the founder operator, you get to make it up and do it however you want to do it. Now the data may tell you that you’re doing it wrong, and you may have to tweak that. And we got to the point where the data was telling me having no employees was not the right decision. There was a fork in the road. I can either have no employees in one hand and we can bottleneck the company and we’re not going to grow past where we are, or we can start hiring an efficient team and allow the company to continue to grow. Those are choices that you get to make, but, but there’s not a playbook. There’s learn as much as you can from other people around you that have and have not done it, and then appreciate that just because it worked a certain way for them doesn’t mean it has to be the way for you. You get to make it up however you want to make it up.

Jess Dewell 15:51
Share your thoughts and questions in the comments below. I thrive on your feedback and engagement. You’re listening to the Bold Business Podcast. I’m your host, Jess Dewell. This is your program for strategizing long-term success while diving deep into what the right work is for your business.

ANNOUNCER 16:09
Right now you’re listening to the Bold Business Podcast hosted by Jess Dewell, a nationally recognized Strategic Growth consultant. She works with business owners and executives to integrate just two elements that guide business through the ups and downs of growth. Number one, know what work is necessary. Number two, do all the work possible. Schedule a complimentary consultation to find out more at Red direction.com

Jess Dewell 16:40
Have you hit a plateau anywhere? Because I’m guessing this last point, when you’re talking about data, is going to show up somewhere. Anytime there’s a plateau, it could be in creativity. It could be in problem-solving. It could be and we can’t get this decision actually made. We keep kicking the can down the road. It could have been at a growth segment of, how do I get my first 10 customers, or even my first customer somewhere in there.

Adam Callinan 17:02
Did you have a plateau? And how did you solve it? Through the cycle of startup and scale, there’s never-ending plateaus. Yeah, you literally just do this, and then you do this, and then you do all these funny, non roller coastery movements. I would say the a really obvious plateau was with, with bottle keeper, again, we scaled up. We got to 8 million in sales in the first three years with no employees or investors. And that just got that was then we plateau. Then we got to the point was like, Okay, we have a decision make. We can either hire a couple of people to open up our bandwidth, or we can restrict the bandwidth. Have no people, and we’re, we’re maxed out, like any more orders through the funnel. So that would have been in 2016 we our first team member came out in 2017 going then into 18. We were in Shark Tank, and 18, when we were already like a 10-plus million a year revenue company. So that was an epic experience. Then we just continued to grow. But as we continue to grow, to a couple of your comments in the question, I got to the point where I was doing, I was operating positions in the business that I really don’t enjoy doing. I was spending 80 or 90% of my time with attorneys doing dealing with intellectual property issues, because we had a pretty big patent portfolio. So that was, like somebody’s whole job just to do that. Was dealing in the part of the business that is not creative. It’s not problem-solving in the fund. Let’s go crush at problem-solving. It’s problem-solving with attorneys. And that sucks for me.

Jess Dewell 18:30
That’s true. It does suck for me too, but I love that you put for me in there, because there are people that you bring in that love that.

Adam Callinan 18:38
Yeah, yeah, doing the creative stuff around intellectual property strategy and getting new patents that is interesting, because there is a lot of creativity and strategy in that. But like, dealing with infringement is like the worst part of Yeah, yeah. It just sucks. Honestly, it’s not fun at all, and I don’t like doing it. And so we both, Matt, my partner, and I got to the point where we had quite a few companies or equity firms or whatever reach out over the course of the business with some interest in acquiring the company or whatever. How much of that is real? Who knows? Because we honestly never talked to him. Most of it was probably spam. But we got to the point where we were getting some outreach from legitimate like an investment bank that had a buyer, and we just started listening to it, because frankly, we just weren’t enjoying what we were doing. It was harder. It got harder and harder as we rode the wave of paid media to acquire customers inexpensively. And so it’s just like all these things in the business got a lot more difficult. And then again, we were spending our time doing things that we didn’t really enjoy, so that, I tell led to the company getting acquired.

Jess Dewell 19:37
And that’s huge to be able to acknowledge, and then, of course, just be open. It wasn’t I’ve got to sell this because I’m done. It was maybe we need to listen differently. Maybe let’s look at this differently. What else is out there, so that we can see what our options were, and it’s amazing what will come up when we give it. Was another way to give yourself space, like your Dr Jeff says, what? Go do carpentry. Okay, I see, but it’s hard. It’s hard when you’re in the weeds. It’s hard when every single day is challenging and it could be fun, but it’s the challenging that’s actually that drag piece. And you’ve said this a couple of times. You’ve said, okay, we can add people to add sales, or we can automate to add sales, or we can just cap our sales, right? I’m i This is a common theme that you have said, and we’ve been recording now for just under 20 minutes, and I’m thinking, Okay, so let’s talk about this because ultimately, we’re talking about, how do we build healthy businesses, and that healthy businesses make us successful in our definition of success, let’s talk about that. Because everybody, how do I do more with less? Or what does that actually look like? Are there other data points, first, that you bring in and then on top of that? So what is a healthy company?

Adam Callinan 20:56
A healthy company? What is a healthy company? Is almost like asking somebody, what does success mean? It’s I would say a slightly less theoretical because you can attach metrics and data to it, but frankly, all metrics and data can be used inappropriately or become vanity metrics without context. Revenue can be a vanity metrics without context. So next time you’re this pop city you’re at, next time you’re at a networking group thing or a coffee thing with a group of people, and someone asks, how’s it going? And somebody says, Oh, it’s great. We just hired 27 new people, and our revenue, we’re we’re up 25% in revenue. That’s awesome. What is that literally means nothing. Those are completely vanity metrics. Their revenue might be up 25% and they’re still at a negative 40% net margin, and the business is completely built on a revenue model that it requires outside investment. They might have hired those 27 people, and they just added $100,000-$150,000 a month to their fixed expenses and their revenue. They have no idea how to pace, how to keep pace with their revenue in order to actually pay for those people. And so what does healthy mean? I think first and foremost, it means that it’s profitable. That’s the easiest, most logical thing to point at you can get really and we do, and I mentally do get quite granular with efficiency metrics and ratios, things like, relative to your revenue, what are your fixed expenses? Are you operating at a 25 or 30% fixed margin, or is it a 5060, 70% in which case I wouldn’t call that healthy, but that’s me, and it depends on the business. All businesses are different. That’s where, again, I go back to the some of it becomes a little bit theoretical. I think at the end of the day, what’s important is that, as the business operator, you need to have information about what is happening in the business, when it’s happening, and that’s really hard to get sometimes. And that’s not just what your revenue is, which is what you get. Usually, speaking, you know what your revenue is because we all have a system that tells us what our revenue is. You probably know what your return on ad spend is, because, again, that’s easy to calculate. You take your revenue divided by your ad spend, it’s all happy. You have no idea if you’re profitable, because you’re only on a day-over-day standpoint, because your only data point is from your P and L last month, not helpful. And so what you need is the capacity to see what’s happening in your business in real-time, so that you can make smarter decisions around how you operate and within that and I heard you talk about this in another podcast, and it aligns directly with how we’re operating penta and, frankly, how my brain works. You need to know where you’re going. What is your objective? In Pentane, we call it your primary objective. We set it as your net margin. Is it a 5% is it just to get to break even? Right now, you’re using money, you’re losing money, so the goal is just to get to break even. Great. Set that, assign that as your primary objective, and then we can provide you with solutions on how to achieve that and information on how to achieve that. Where does your average order value need to go to achieve that? How much do you need to reduce your fixed expenses to achieve that? Like all this, you can do all this stuff, really interesting stuff, with math, but you have to define that objective as a starting point,

Jess Dewell 24:22
What put a stake in the ground? What you talking about when it’s like the beginning of the conversation? Where’s our where’s the goal post? We know about that in relationship to, like, research and development, product, development, services, consumer, product, all of those, it’s interesting that we don’t have more conversations about this specifically related to how we operate business. We really are using things in our business that have not we haven’t really challenged enough to break through and go That one’s not right for me, or is this really going. To get us to what are you? Called it your What did you call you?

Adam Callinan 25:03
Called it your object? Primary objective. Primary objective.

Jess Dewell 25:06
It was something that, really, that associates me with action movies. That was what I had.

Adam Callinan 25:12
We associate everything with spaceships because I’m a nerd and have a three year old son. So we do, we do a lot of rockets.

Jess Dewell 25:17
I love it, see and there’s, yes, I know. I’ve been there and or mission, impossible, James Bond, you got it? And spaceship, yeah. And

Adam Callinan 25:26
If you think about that in any context, like you get in your car where you’re going, you don’t, generally, unless you’re just going for a nice, leisurely cruise, like, I’m going to the grocery store, that’s your end-point. You get in a plane, the plane takes off, it’s going to Dulles International Airport. That’s your end point. We know what those things are, but we don’t establish them in business, which, which has, you have death risk and those other things, like, at the end of the day, we are putting our we’re not putting our lives on the line, but we’re here putting our livelihoods on the line, and our time, which is all that we have at the end of the day, and our money, in many cases, and our bandwidth, and our time away from our Family, like all these things that are really important, and we’re not defining where we want to go. So it’s almost impossible to work backwards from that to figure out how to get there from where we are today.

Jess Dewell 26:09
By the way, you have accidentally landed on a whole other soap box that I love, that I believe wholeheartedly in. And if people come to me, the first thing I’m like, when does it end? That’s my first thing. I hear this, how long have you been doing that? When do you ever evaluate that’s the right thing to keep doing? Does it end so you can recommit to it in a new way or the same way? And this, these end points are huge in and they are not normalized emphasis. And I appreciate Adam that you are really talking about that, and you hit on the things that everybody wants from their business. I want more money. I want freedom of time and energy. I want to be able to spend more time with my family. So almost want to just toss out there and see what you think about this. What is the cost of not having a primary it’s everything.

Adam Callinan 26:59
How you get those things, how you get more time with family, how you get less time pitching investors, how you get less time managing investors, how you get less stress, how you get more sleep. Is you operate a profitable business. I mean setting aside all the other things going on in your life. If we can take that huge piece, which is, frankly, we tend to spend more time at work and in businesses than we do with our family. Like, if we can readjust and readjust that whole situation, and doing so in a way where we have an identified endpoint with that identified endpoint or primary objective, it’s significantly easier to work backwards from that, to make changes in the business to create that outcome. And it’s a lot of times, it’s easier than you think, most of the time that certainly that we see it’s it has to do with the expenses in the business. They just need to modify the expenses in the business. They need to create some efficiency and reduce their fixed expense basis, and that solves the problem like the math. That math is not complicated. Your net profit is equal to your revenue minus your expenses. Reduce your expenses. Don’t change your revenue. Your revenue doesn’t have to go up or down. And you that whatever you say than expenses goes directly to the net profit line.

Jess Dewell 28:20
So I’m going to tell you this. And you this may be old hat, really basic. I think based off of what we’re talking about, it makes sense to be able to share this, and that is in at Red direction. We have a list of expenses, and I know when are they going to happen? Are they having monthly, quarterly, annually, if they’re multi-year contracts, whatever, right, whatever that is. And the first thing that happens when I am doing an evaluation at the end of each quarter or at the beginning of the next quarter, depending on what my frame of reference is, in the moment, I am actually going through those and I am challenging every single one, what is up and how come and do we really need it? Because it is the easiest thing. And here’s the basic Park. You know what I did? I took it home. So I said, this is working really well here. Look, I’m actually able to keep this. These things keep creeping up. Turns out stuff is changing our availability. What we can get done with the tools we have is expanding here, but it’s contracted here, where whatever take advantage of all of that. I went home and we did it. You know, how much money we saved at home from all those silly subscriptions. I was like, Can we, like, make a spreadsheet of all of our subscriptions and just see we get large the whole extra vacation a year Adam because of what we did thinking. And so those of you who are doing this really cool stuff outside of your work, but you’re not bringing it to your work, are missing out. And then you could do what I do and say all the cool stuff that you’re doing at work. Doing at work, take it home and see what you can find that’s awesome over there too. So I’m going to just bring in that little bit of personal because when we talk about owners and investors and owner operators and people who are creating these awesome products and services to create big impact and create a lifestyle and create a. Culture with which people can come to work together in we forget about some of those things, and it’s really important to come back. This is what makes it possible.

Adam Callinan 30:08
It’s impossible, to make change into something where the data within it is not quantifiable. And when we’re talking expenses like they are, the primary example of quantifiable data, the extreme version of that is zero-based budgeting, like when you go back and do that, cut it to zero and add back in things that are mission critical.

Jess Dewell 30:26
It is not only valuable in the long run in terms of freeing up resources, adding money to be able to be spent on new, fun, creative things within the organization, it also gives us a better pulse on what we need and what we don’t need within our organization, so we can quickly say you are somebody I would like to talk to right now, or, Oh, maybe I know somebody for you, but I know I’m not that person in terms of whatever that relationship is for a product or a service that we need, because there’s a lot that we do without ever talking to people, but there’s a lot that we do in business, because so having that pulse, I think what you’re talking about gives us, gives it a sense of a baseline. What is the baseline? What is the pulse in our world? What is the pulse in our industry? As I’m hearing things I can better understand, listen closer that one made the little hairs on the back of my neck raise. Is there? What’s over there that I should pay more attention to, because it just helps us in our it to your point, it helps us go backwards? Here’s where we know we’re going. Here’s what we’ve said to do today to get there. Let’s adjust along the way by everything that comes up.

Adam Callinan 31:33
You’re not traveling in a straight line. From now to then, the line looks like this. It goes over here and then it comes back over here. But the goal is to try to keep it as straight as you can,

Jess Dewell 31:43
Which is obviously more efficient, and you’re right. Wouldn’t it be awesome if we all after all this time in business, after all this time business has been here, we’ve collected data? It has yet to go in a straight line. We may be closer in some areas. Okay, so in addition to operational efficiencies for expenses and staking the claim when you’ve got these end-points, are there things that you’re being called to do and you have to keep a boundary around being all things to all people, versus what are you best in the world at.

Adam Callinan 32:13
Guardrails are extremely important, or blinders, whatever you want to call them. I always call them guardrails. The math in the system works for any company. It works for it’s the same for Exxon Mobil as it is for a landscaping company, as it is for a drag cleaner as it is for a SaaS company or consumer product brand. It’s just the way that the math works. Now, obviously, to your point in question, we can’t go and do all those things for all those people. So we’re very specific that today we are focused on consumer product or consumer brands under 20 million in revenue, because that fits a very important point. The early-stage brand or small business brand is not generally big enough where they can afford half a million or a million year to go and hire like an absolutely gangster CFO, CMO combo, but they still have the same problems. They just have less visibility into the problem, and frankly, if they’re a first-time founder, they may not even know the questions to ask, much less how to solve it and how to answer the questions. So it’s very focused on that. That’s my next chapter. Post bottle keeper is to be impactful as much as I possibly can do an early stage operator, and I can do that consulting, but I can only do that two or three at a time, and that’s not helping a lot of people. So the point of Pentane is to create a system, a command center, if you will, of as much of my knowledge base and experience that can go into a software platform to help guide you the early-stage operator on how to operate. What is to you a healthy business again, you set your primary objective, 510, 20% at margin, whatever that is for you relative to where you are, and we will provide you with the information and the guidance, which is really important, because most systems don’t provide guidance. They just give you information, provide you with the information and guidance to make better decisions, to help you accomplish that goal.

Jess Dewell 34:05
How do you personally build in time for reflection and assessment, to make sure you’re staying on track, to make sure Pentane is doing what it needs to be doing, and it’s and make any adjustments there to be the best you outside of work, for your personal life, for your family.

Adam Callinan 34:24
It’s a really important question, particularly that latter part, which I which people have a tendency to to miss. And it’s the most important stuff. At the beginning of this, we talked about the, the first of the three CEO points. I question everything, and I question myself constantly. It’s just, I’ve just built that into my, the way that my brain works.

Jess Dewell 34:48
Like daily in the moment, are you sure about this, that you want to diet coke with lunch with, like, big questions in in use case?

Adam Callinan 34:56
Right now we’re in the midst of a complete UX UI redevelopment, because I built, I organized the system to be functional and helpful before I wanted it to be pretty and sexy and graphical, because most, again, most people do the opposite to that. They build this like really pretty system that’s actually not super helpful to anybody, and that is, it’s hard to do it the other way. So I wanted a helpful system that answers a boatload of questions that are really difficult to answer for an early stage operator, and then we’ll make it pretty so we’re in the make it pretty phase, and in the make it pretty phase, there are endless opportunities to add things and bolt things on, which then goes back to the kind of guardrail where’s the goal post space. So the decisions that we are making, and the decisions that I am making in that silo of UX UI, they have big implications from a development standpoint. And so I’m, I have a, I would say most of the time, this probably happens in the sauna, to be clear, where I, it’s like a technology-free zone for at least 20 or 30 minutes a day, where you where I have to sit and think if that is built into my lifestyle. Meditation is a thing that is built into my lifestyle that’s really important getting to that second part of like, how do you create the structure and foundation to be able to compartmentalize the business stuff and the family, to be able to focus on family when you’re with family, like, exercise is a hugely important piece of that your mental health and your physical health. Those are hand in hand. You can’t really do one without the other. Those are some of the things that are really helpful in navigating the massive ups and downs of startups and talking of plateaus. There’s, I probably have three or four plateaus a day where I’m stuck at something when, like, how are we going to get through this? And you give it space, and you walk away from it, you come back and you figure it out. And you’re not always right. Most the time, you’re not but doing anything is better than doing nothing, because you will learn from that anything and adjust and you can course correct.

Jess Dewell 36:50
I’m your host, Jess Dewell, on we’re getting down to business on the Bold Business Podcast. This is where we’re tackling the challenges that matter most to you, with actionable and achievable advice to get real results that lead to your success. Don’t forget to press that bell icon so you never miss a program. And it’s time to subscribe as well.

ANNOUNCER 37:13
Focused on growth, listen to more programs like this, which support the challenges and opportunities you are working with right now. Search Bold Business Podcast for the key terms at Red direction dot com, or your preferred podcast listening app.

Jess Dewell 37:30
Like you question yourself and you question everything. For me, I’m like, if I don’t know the answer, I’m gonna go do something, because then I’ll have some data with which to find the better question to ask. Get there. And somebody said, how do you have the energy to do that? I said, the more things I know that don’t work or that are wrong or that aren’t the right fit, that means I have a pretty good sense of there’s less to figure out how to actually get there and, and with a stake in the ground, it’s actually a lot less than people give themselves credit for. So you’d combine those two things, are you willing to take any action or question it and think about it, and are you willing to commit to something? And then, where do those overlap? It’s actually not infinity anymore. There is no infinite possibility. Here. It is a subset. Now we may not know what we don’t know, and it still could be a large part of that overlap, but it’s much more that that’s that can be tackled. Hey, whatever, right? There’s always going to be. Think about science. We keep finding out new particles that are between the particles that we thought were the smallest particles that were already there. Questions and opportunities are the same thing. And one of the things I think people forget is, first of all, nothing is set in stone. So in reflection, I’m like, where did I get rigid? I’ll add that to the reflection piece, as far as this part of the conversation goes. And another piece is, sometimes the decision is only to get us to the next step. If I found out something didn’t work, that’s great I can get to the next step. And that, I think, is the key piece that stops people from taking action or really understanding they have. There’s more potential if we would be willing to step into it and claim something to go, oh, here it is, and it just the path shows up.

Adam Callinan 39:16
You’re 100% right. Just do something. And I have found through through iteration, that I have a tendency to massively over-complicate whatever that solution is. And if it’s a math, mathematically in particular, I’m trying to solve something, some problem, and it requires a lot of math to do it. And I realize my windows right now are relatively clean. They usually look like absolute chaos, and I step away from it, or I come back to it the next day, and you do it with a fresh mind and a night of sleep and a cup of coffee or whatever, and it looks totally different. And I realized that I’ve been massively over-complicating it, and it’s only a two-step thing and not a seven-step thing, which is what I just spent three hours yesterday working on. So in the reflection point, getting better at recognizing when you. In that negative, never-ending feedback loop, and saying stop and getting out of it is a massive time and mental energy saver for me.

Jess Dewell 40:10
So you gotta know yourself too, right? And self-reflection allows us to learn about ourselves, is what I’m hearing you say.

Adam Callinan 40:15
Journaling is a really big piece of that. Yeah, that’s an amazing place for whether intentional or not self-reflection. Yeah, writing just something about writing things on paper with a pen is, is really helpful.

Jess Dewell 40:27
I will tell you what the big the middle of a yoga class is when I have my biggest frustration show up and I’m like, why am I thinking about that in yoga? And it’s Oh, because there’s the solution that comes next. And I’m thinking, why is this happening in yoga class, but it does because there’s something else going on that is actually pushing against that. Now I’ve always loved nature and I’ve always hyped Adam, but I just learned this phrase called Nature bathing. And I’m like, did you know that nature bathing is actually just hiking without your bone?

Adam Callinan 41:00
Or I thought that was just hiking. That’s funny, nature, bathing, that is amazing. I live in Montana, and we spend an incredible amount of time outside, and I cannot wait to share that isn’t it gonna

Jess Dewell 41:11
No, you’re gonna do weaving all the time for two hours, four times a week. I’m out in the woods. I’m hiking, and I don’t care about the phone. I don’t, I listen to podcasts all day. I love I don’t listen to audiobooks, but I listen to podcasts and I read books. I’m into a lot of this, but I needed time for my brain to not and like, your point sitting in a sauna, I think mine, besides yoga class, just being in the woods when a challenge comes up, because I can get through a challenge or something limiting, oh, I’m this far in now. I have to go this far. Can I actually really do this? Because that happens right? Whatever, the energy level changes day-to-day. It’s not the same day today. And when you overcome that, oh, look, there are like three other solutions that were right behind that limiting belief that, do I have to stop now, it’s weird to think about how space allows for some reflection, but stillness, the lack of stimulation, of outside stimulation, makes a big difference.

Adam Callinan 42:07
It’s all about getting into a place, wherever that is for you, where your active mind, that monkey brain in there, bouncing around, going all over the place, telling you’re bad or weird, or this thing’s this, or that thing’s that, like, that’s not helpful. So anywhere you can go, anything you can do to calm that creates space for that passive piece in the back that has the answers.

Jess Dewell 42:28
When you ride on the windows behind you, do you take pictures of them for posterity so you can go back?

Adam Callinan 42:33
Well, I take pictures of them because I have to erase them and I want to, I need to save what’s on there so I can look back to it.

Jess Dewell 42:38
Oh, that makes sense. Because I take pictures, I have a whiteboard that I use a lot, and I have pieces of paper that I draw on. And I will tell you what those are the most important things. I think they actually are way better than anything I’ve ever been able to type up because they end up going in a document. I’m like, Okay, so here are the things that you need to have from this, but without that space away from technology to have it. I’m not using my tools as effectively on the computer too. It’s easy to try and be paperless. It’s easy to try and be all digital. And I think we can get there and still be creative and not using the same device to do the work as we are to create. We don’t have a TV in our bedroom. I don’t have a radio. That’s not true. I do have a radio in my office, but I won’t listen to podcasts at work. That’s another thing I don’t do. I was like, No, I really want to learn this. I want to hear I’m going to be distracted by me that. So in a sense, there are these boundaries that are coming. And I feel like we’re talking about boundaries a little bit all the way through too, right? What are these boundaries that help us maximize the time that we’re focusing on something which gets done by minimizing distraction?

Adam Callinan 43:46
I’m the same. I can have music on but I can’t have words in it. It has to be orchestral or some Spanish guitar thing, something that’s calm, but it cannot have words in it. Or those words go into my brain and now I’m thinking about the lyrics or whatever, do everything you can to minimize the distractions around you.

Jess Dewell 44:04
I know I’m auditory first as a learner, and I’m tactile second. And I know, I know they say most people are visual. Do you know what style of learner you are or and I would say that would also be integrator of information.

Adam Callinan 44:16
Yeah, I’m definitely visual. You’re visual?

Jess Dewell 44:18
Yeah, okay, because I think if I can hear it and I can draw it, if I’m the one that draws it, then other people can see what I’m thinking. But most of the time it’s a big mess up in here.

Adam Callinan 44:30
That’s part of the trick is, I need to know, letting the mess, yeah, you didn’t know you were in my party, did you totally to your point of having a space to go and my murder wall back here that gets crazy, having a space to go and get that stuff out, gets it out, and once it’s out, and then you erase it. And now it just the thought process itself. The thought process itself iterates and iterates and over time and getting away from and coming back to it, it gets clean and it gets Correct.

Jess Dewell 44:58
I want to know what makes it bold? Bold. What makes it bold to really define what a healthy company means to you?

Adam Callinan 45:06
The aspect of health in a business is an unknown space. For most early-stage operators and to help them with data and simple guidance to understand how to solve problems that they can’t figure out is an amazingly difficult but rewarding, positive thing to be able to do, and that goes all the way through not just providing them real-time information or a guidance system that’s saying, hey, there’s a problem here. Come check this out. Dive deeper for a diagnostic system, but like true guidance on if you do this, will be the outcome that gets you to that objective. Because it’s, again, we’re using math, combined with my experience building and operating a consumer product company, running every single position in the company, marketing, finance, like literally every single position because we had no employees being able to translate all of that into a thing that can be really impactful and directive to an early stage operator. To me, is the ultimate success. Sure, it will make money, but that’s not the point. The point is too if we can help people solve problems that they can’t figure out, or frankly, again, they may not even know the questions to ask. The result of that is they create healthier, more profitable businesses, the result of which is they get to spend more time with their kids and their husbands and wives, and more time in the woods, on nature, bathing walks, and doing all these things that really are what life is about. That is, to me, the ultimate success, which is quite bold.

Jess Dewell 46:47
Every single time I have a conversation, I take away something that I want to share with 25 people I know when you’re listening to this podcast, you’re also listening for that and will have something that you want to share in the comments, I would like for you to engage with us. What is that thing that you want to tell 25 people from this program? Here’s why it’s important. It’s important because, yeah, there are going to be how-tos Yes, there are going to be steps. Yes, you’re going to be like, Oh, I wish I wrote that down. I wish I wasn’t doing this and I could actually take action on that right now. But guess what? You’re not so engaged right now because that one thing you want to share with others will be the thing that you can figure out how to incorporate in your business, in your workflow, in your style tomorrow.

ANNOUNCER 47:37
Wow. Jess hosts the Bold Business Podcast to provide insights for building a resilient, profitable business by deeply understanding your growth strategy, ensuring market relevance and your company’s future. It is bold to deeply understand your growth strategy with your host, Jess Dewell, get more information about how to drive solutions and reset your growth mindset at Red direction.com. Thank you for joining us, and special thanks to our post-production team at the Scott Treatment.