EP36: Celebrating a win isn‘t anything, it‘s just preparing for the next thing.
In this episode, Corey and Chris continue their conversation with a high Beta Market Dominance Practitioner MaxSold CEO, Sushee Perumal. aka "the skinny kid from India," MaxSold CEO, Sushee Perumal starting with why he felt he could successfully start an airline and his escape route when that failed. We open with Chris tying together his tapping of the bells analogy and plunging into Sushee's story which ultimately leads to MaxSold's growing success through a path of science, rather than simply tossing out millions of marketing dollars hoping it will work.
Chris reminds us, and Sushee agreed strongly that sometimes we have to wait before we can celebrate a win, funding, goals achieved.
Some of the questions Corey and Chris ask Sushee include:
What do you do to regain laser focus on business?
What does the end in mind look like?
How do you get unstuck with your team? Sushee answered, "That's the hardest thing. The psychology of moving the people to the other side, how do we as a unit make the decision? It's not a force of will. Have we considered all the pros and cons of the lists? How can we articulate all the things that go into trying to make that decision? One big voice can overpower to convince people their way is the right way, but you still need to consider and hear from everyone to get their input. What are the unknown unknowns?"
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The complete transcript of this episode is below:
Chris Beall (01:04):
Discover is whether you should continue to engage because the only currency we run out of all the time is time. And we get reminded of that all the time when something happens that reminds us, all we have is time, right? We've all had events like that in our lives. And so I just think it's fascinating that we often think it's about money, it's about data, it's about analysis, but when you come right down to it, it's usually about being humble, believing in what you offer as potential, that you are an expert at something, you have some value, and then having conversations to find out where the fit is. I call it tapping the bells. I think that we've said this before, but I'll say it again, if somebody presented you with the problem, I have a thousand bells, but only 10 of them are bells. 990 of them just look like bells.
And we're going to put a bell up in the bell tower and it's going to have to ring once an hour on the first hour, twice on the second hour, and by the time we get up to noon, it's got to ring 12 times, and if it's made of clay, it's going to fall apart. Your job Sushee, without being able to do anything other than interact with the bells, is to figure out which ones are made of brass and which ones are made of clay. All you can do is tap the bells, right? That's the conversation. All you can do is have the conversation and see if it resonates. If it resonates, then it's worth moving forward and finding out if you like the other features for the thing. And I think you've just been exceptional at doing that through your career.
Did you do that in the airline business? It seems to me, if you would ask five people for advice about starting an airline, six of them would have told you not to do it.
Sushee Perumal (02:41):
Absolutely. And I think that's the skill, as you said before, I tried to gather as much data as possible, and then decide if I'm going to do it anyway. Same thing with the airline, I was talked out of it by practically every single person I talked to about. And I said, you know what? I have all this data and all this information, so what's the worst that can happen, right? So I did exactly the same thing this, as I did with that, which is maximizing the opportunity while minimizing the risk. The escape route is this, so the worst that can happen is I need to wind things down and I've learned a few things.
Similarly, with the use of the proceeds, we are trying to minimize risk with Rich, and the next conversation I'm going to go with him is asking him Rich, this sounds amazing, you're clearly an expert with it. What can we do with third of the budget that's been presented. Could we do it? Could we work on a component that you're the most confident in so that we can execute on that, show some wins and then double down on it.
And then before we spend millions on radio and TV, let's try to figure out the economics and the map, the science behind this. Once we get that formula, then the problem shifts to figuring out if this thing can scale. And at what point are we getting the diminishing rate of return? Get back to the question about the airline, I made sure that similar advice I got from people who are strategy consultants, I reached out to the founder of WestJet, I've read every airline book that's ever been written and figured, Oh man, there is a lot of risk to it.
But being a pilot, having the accessibility, let's start small. And I started small. I just put people into the Cessna 172, which was built in 1974, and did a viability test for flying people to the surrounding areas. This thing has legs, there was demand, and now let's get this financed. And that's when we entered the last 2007, 2008 financial crisis. And then I figured, this has been [inaudible 00:04:57] or put it on hold because it costs a bundle of money to finance an airline.
Corey Frank (05:03):
Does that mean you're going to have an airline for us later?
Sushee Perumal (05:05):
Corey Frank (05:06):
It sounds like it still burns inside of you to do that.
Sushee Perumal (05:10):
Oh, it does. And mostly because of the accessibility I have. I want everybody to have it. Chris, in the last podcast, talked about going from Port Townsend to British Columbia and he was looking to... do I swim there? Do I get up on a paddleboard? I'm like, Chris, I can fly you up in 20 minutes.
Corey Frank (05:34):
Sushee Perumal (05:34):
The local convenience and the accessibility. If the opportunity is still there, and I need to go back at doing an industry scan and all of that, but I use the plane that I have access to on a regular basis. That's how we built MaxSold. We use a Cessna, like Chris uses ConnectAndSell. It's like how do we shorten that time to market dominance?
Corey Frank (05:56):
Sushee Perumal (05:57):
How do we get in front of as many people as we can to shake hands, kiss the babies, and learn and see how we can help solve their problem? And when you get face to face with somebody, when you're actually doing a tour of these houses or places they want to sell, we make this go whole lot faster than by any other means, than putting salespeople on the ground, training them, telling them about our approaches, all of that is just making those discovery calls in-person face-to-face, is what we were able to do with the Cessna.
Corey Frank (06:33):
That's brilliant. So when you look at MaxSold and the airline, I think for a lot of the folks who may not be that familiar with you, Sushee, they're going to assume that you come from a very wealthy family. You have access to unlimited streams of capital. You were born with the proverbial silver spoon. I think it would be helpful to frame exactly what kind of great story this is. Let's start at the beginning. Where did you come from and how did you end up as Auction King of North America?
Sushee Perumal (07:03):
Not quite yet. I'm a skinny kid from India. We lived in place that's no bigger than half the size of this room with not very much at all. And strangely enough, I think that fueled a lot of my entrepreneurialism because I saw my dad go from a super tiny place with not much at all to being able to golf every day and having chauffeurs and having the luxury, so I knew that... I've seen the evolution. Every three to four years, we would trade up, move up, live in better places, drive better cars. And I remember going from being on a bicycle, which is a very big... I think he had a motorbike, but not a nice motorbike, to having nice cars and that didn't happen overnight. It took many years. That's my beginnings. Not just learning and going back to what's the how can we do more with what we have? Because that's all we are going to get. Nobody's going to magically hand you a few million dollars to start a company or do things. We just have to use what we have and go at it incrementally, iteratively, and slowly build up
Corey Frank (09:20):
So you learned a lot of these traits from your father, then how did your father's influence and the role model that he was set you forth to inspire you to do the airline, and do all the other things leading up to MaxSold?
Sushee Perumal (09:35):
Growing up and I've read a lot of books where the prevailing mentality is stay within your lane, live within your means, but what I've been brought up with is it's not when everybody would start Mary had little lamb, I will start think big. What's the biggest swing you can take to... the world domination, market domination has been drilled into me as a child, right? When I learned the alphabet, and it was like, think big, world domination, you can achieve anything. So that gave me an incredible amount of confidence where I was able to reach beyond my levels of intelligence, and reach beyond what I think people have as artificial walls and boundaries and ceilings around them. So I never looked at those kinds of things as limitations.
I called up the founder of WestJet, the airline, and this is a multi-million dollar publicly traded company. I called him up and figured out a way to get to him via networking and other things. And because that wasn't a boundary or an artificial thing that I had in saying, Oh, that person is unaccessible and who am I to call him? I just said what's the worst that can happen, right? That answer your question, Corey? Just the principles that I've been given and taught is to think big and do the market... And that's why Chris and I connected so well, because world domination.
Corey Frank (11:01):
I think of one of our earlier episodes, Chris and I talked about nature versus nurture from an entrepreneur perspective, and clearly the environment that you grew up with, your parents gave you that raw material, that raw DNA to fuel. And so when a market dominance message from the likes of Chris Beall come into your world, it's already a snug fit. It's already a fully snug locking mechanism, if you will. From your perspective on market dominance, knowing that Sushee is a fully high beta market dominance practitioner now. When you see you're a dealer in math, you're a dealer in exponents. So what do you see is the path that Sushee has as he's on this market dominance? What can he expect from continue to adhere to these principles, so to speak, just from a theoretical laboratory perspective, as an early practitioner here as he's dominated some of the markets that he's entered?
Chris Beall (11:58):
The first thing you can expect is that the parasites are going to try to come in because he's raised money. The number one risk hidden in every market dominance play is its attractiveness to parasites. So if I were to give Sushee one piece of advice, it's, you're the immune system, keep the parasites out. And you know exactly what I mean, right? They come cloaked in talent, in pedigree, and in a huge amount of self-interest. You can tell a parasite when they say they're a team player. That's a guarantee in an interview. If somebody says they're a team player, they're guaranteed to be a parasite. That's really very safe. That's the spiky proteins on the outside of the virus that tell you, it's bad. Don't take that one in. Don't breathe that in, that one's going to kill you, right? So that'd be number one.
Number two is, and I think Sushee already knows this, but it's really interesting. Look at cycle times before you look at throughput for anything that you're experimenting on. Dominance comes in general, from driving denominators down rather than driving numerators up. Whatever cycle time you have now for some key activity, for whatever the bottleneck activity is, it's customer acquisition would be an example. You want to figure out how to get the cycle time down and paying attention to throughput. How many of them I can make per unit time is a secondary thing. Get to throughput after you have dominated cycle time and you really understand the cycle time issues around the bottleneck. There's only three things we can control in business other than our attitude and the company's attitude is generally controlled by the leader's attitude and the absence of parasites. The leader's attitude gives you everything you need as long as the parasites don't come in and suck the life out of it.
So leader's attitude, no problem for Sushee. But Sushee has a really complex situation because he's got to do regional execution. It's an on-the-ground business. I've run one of these. I know what it feels like. I'd call it inherently heavy in a funny way. That is, even if the individual operating units are light, the nature of the business is that it's heavy because it has to be anchored in some place. There are cycle time issues around everything in that place, and there's cost issues that come with it. He figured out how to drive cycle time down in terms of using that Cessna, right? That's the thing you keep playing. The denominator is your enemy. Drive it to zero and you can get to infinity.
That's what the math says in business. The numerator actually takes care of itself. The numerator's where you get more of something. You get network effects, you get market dominance effects through referenceability, you get scale effects. All those effects show up in the numerator, but dominance shows up by driving the denominator down. You'd get a lot more bang for your expended effort. And so cycle time may be on acquiring a customer, or a cycle time on setting up a new regional unit. Those things are going to be really key. If you can really stay focused on that, because every piece of advice you're going to get as a market dominance practitioner is going to be what I'll call it, numerator advice. Go get more of this, go plan for more of that, go to the channel because the channel is bigger than you are. Just all manner of things, because everybody is used to grinding on the numerator.
That's why, by the way, if you don't understand this, those little-
Sushee Perumal (15:33):
Chris Beall (15:35):
Yeah, exactly. It's really an interesting problem because our minds go to what we can see, and we can see growth in the numerator, and the denominator is invisible. We don't really see cycle times, but we only have cycle times, throughput and quality. That's all we got. So once you figure out the quality equation, which you have to figure out first. It's like what's above threshold quality, and then stop thinking about quality immediately other than maintaining it. The next equation is how do I drive down cycle time on the core duty cycle of this business? Whatever it is that if I could wave a magic wand and have more of it, instead of seeking more of it, let's make the thing that makes it go faster. That would be it. Other than that, keep your experiments small, because big experiments yield confusing results.
It's not that they're expensive, which is a problem, it's that they're confusing. We had this just happen the other day here, where we're doing an experiment around cleansing data, or calling in advance to make sure that you only have to call on the good stuff, right? And we conflated that experiment with three other variables, and somebody wanted to see if they could get this particular business value out of it internally, and blah, blah, blah. And next thing you know, we got bad science, right? So keep your science clean. And that means small experiments, because small experiments give clean results, so at least they have a shot. That's it. That's all I can tell you, Sushee, you got everything.
Sushee Perumal (17:00):
Well said. I'm going to replay this several times to my team when the podcast comes out.
Corey Frank (17:07):
It does bring up the next tangent we can finish here with is, the business as you've taken it over, and as you... we've talked about culture a little bit offline last week, and things that you're trying to do, certainly on the capital raise, things that you've been successful at, when you feel overwhelmed, or maybe a tad bit unfocused on all the different parameters or variables or inputs in the business? What does someone like Sushee do to level set and regain that laser focus on the business?
Sushee Perumal (17:43):
I look at it from a goals perspective. What is it that we are trying to achieve? What does the end in mind look like, and I just work backwards. Whether it's a way to market dominance, whether it's making a decision on where we're going to set up a call center, any of those things. And if it's overwhelming, I try not to introduce too much more information. I just look at what is the end state look like? How do we go at it with that end in mind, and then work backwards to figure out what are the pros and cons. What are we missing from the decision that needs to get made?
Chris Beall (18:16):
That's interesting. That's the essence of strategy, right? We've talked about strategy on Market Dominance Guys before. Strategy is always a list of steps, and it's essentially a plan to get to a goal. And the plan is not the tactics, the tactics are how you execute the steps. It's actually the intermediate steps, I call them resting places. If I get here, then I can see how... If I were there, I could get over there. And if I were there, I could get over there. I compare it to crossing a river. I used to spend a lot of time with a backpack on my back in the big mountains without any support, other than another guy and my legs and what was in the backpack, right? And you think the mountains would be the big obstacles, but it's not the case. It's the rivers that are the big obstacles.
And when you come to a river, it's always unique. I'm talking about places where there are no bridges, right? No bridges at all. No human beings live there, and nobody's ever built a rope bridge. And so your biggest obstacle is always figuring out how to cross a river, because swimming with the backpack is a bitch, I can tell you. And talk about risk, there's downside and there's no upside. You aren't coming back if you ever go face down in the water with 90 pounds on your back. And the big strategy question was, Okay, is there a series of rocks? Even if three out of the first five steps come back toward the current shore, as long as the ultimate path across the rocks leads to the other side, I don't need to get closer to the other shore with each step.
I need to get to a place I can stand from where I can go to another place I can stand that ultimately leads to the other shore. And I think you're describing that process of saying, my goal is the other shore now. But the easy thing is jump, right? Evel Knievel it. But generally, that's not... If it were that easy, somebody else has already done it. Who cares, right? But you've got to figure out a path. I had a question for you about this. When you're trying to do that, how do you get stuck? And by stuck, I mean in my classic model, right? The one some people heard before, which is you're either inflow stuck or you're waiting. So when you're figuring out strategy, you're stuck because you don't know the path. So now you think you've got part of the path, but now you're stuck. What do you do with your team to get unstuck when you don't know what to do next?
Sushee Perumal (20:39):
And that's probably the hardest thing that I'm often facing, which is the psychology of moving the people to the other side, or the psychology in trying to figure out how do we, as a unit, as a team, make that decision so that it's not a force of will, it's not somebody's opinion dominating. It's have we considered all the pros and cons and the risks so that we are not going face down into the water with a 90 pound backpack on our back? How can we articulate all the things that go into trying to make that decision? Well we've all been there. There could be somebody in the team that has a big voice that they're trying to influence everybody that their way is the only way. But as a leader, as a facilitator, I see my role as making sure that every opinion is considered, and I would probably run it by you, Chris, or by somebody saying, here's why we are stuck. Here are the pros and cons, all the inputs we have, what are we missing from this picture? What have we not considered? What are the unknown unknowns, because that's often what gets us, doesn't it? Looking at the unknown unknowns. So the team and the psychology or... That's really the hardest component is to make sure that's all well articulated.
Chris Beall (21:58):
So there's something brilliant hiding in there that I just got to get this out. Sorry to jump on it, but I just wanted to say this to all you entrepreneurs out there who are crazy enough to raise money. To open the poison closet and pull out a bottle of poison and say, I'm going to survive it. I have built up a resistance to iocaine powder. That's pretty good for you, Corey, especially. Never go up against a Sicilian when death is on the line.
Corey Frank (22:27):
Chris Beall (22:30):
Here's something that I think is a fact. Most entrepreneurs see this as exactly the opposite. The moment that money hits your bank account and you've closed that financing, I guarantee which state you're in. You're stuck. That's just a fact of the world. There is no way it could be anything else, because you're no longer waiting. As you're getting toward a close of any deal of any financing.
There's always a period where you're waiting. That is, it's all done, but it's not done, right? That's why we have all this, it isn't over until it's over kind of talk because it reminds us that sometimes we just have to wait before we start celebrating. Celebrating is not anything other than just preparing for the next thing. We're saying that's behind us, that something's in front of us, but I guarantee you, we're not in flow. We can't be in flow because being in flow means that I'm doing what I was doing before, and I'm continuing to do it in a way that's effortless because I practiced it and it's me now, right? But it's you, that's a previous you. Now you're the funded you and therefore, you're stuck. And I think that most entrepreneurs just don't get that.
They go, I've got the money. I put a plan in front of the investors. I must know what to do, let's go execute that plan, which is the single stupidest thing you can do when you take money, is to immediately execute the plan on which you raised the money.
Corey Frank (23:59):
Or I must be a lot smarter than I thought I really was, and everybody else saw through my ruse. Now, what do I do, right? The money is a validation for my clear intelligence.
Chris Beall (24:11):
I'm so impressed by Sushee, because you anticipated being stuck, and you started calling around. You put up a website, so it'd be easier to talk to people, have the right people talk to you. You reached out to a number of us, and you started really anticipating being stuck as soon as you were waiting, which is the smartest thing in the world to do is as soon as you're waiting, and you know you're going to be stuck, switch to learning mode, because the waiting is a waste, unless you do something else.
And the thing you should do is the thing that helps with the next thing. The next thing is guaranteed stuck. Stuck means I've got to learn. So you've just switched on learning, knowing you were going to be stuck, so why not just act like you're stuck? And I thought that was... I just had to bring it up, because I've never seen it before that in anticipation of a raise, you freaked out appropriately.
Sushee Perumal (25:04):
We had a number of proposals lined up so that we can hit those buttons and execute on those micro-experiments. As soon as the cash hits the bank.
Chris Beall (25:16):
That's pretty smart. When the cash hit the bank, you weren't stuck because you'd actually treated yourself as stuck earlier. That's just so unusual. I highly recommend that to anybody foolish enough to raise money.
Corey Frank (25:27):
I have a feeling that Sushee at this episode, your Sushee Perumal website, you're going to be hit with a lot of folks who are going to be hitting you up for mentoring advice I think, because you have so much to teach us all.
Sushee Perumal (25:40):
It was really set up so that I can learn from folks like you, Corey, and Chris, and Oren, who I can hopefully get introduction to, so that I can continue to get all the way up to Richard Branson.
Chris Beall (25:53):
There's guy who knows when he's stuck.
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