“So we started this out of the garage of my house. We had no product. We had no money. We had no customers. We had nothing. Within the first eight months, we had our first million dollar contract.”

Interview by Mike Sullivan

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Mike:
Hello, I’m Mike Sullivan. Thanks for joining us again today on the MO.com, where we feature small business owners and entrepreneurs and bring you hints, tips, insights, and perspectives on what it takes to be successful. Joining us today is Bob Mahaffey. Bob is the founder of Xcelerate Media, and Bob has a great story about the company, how it got its start. So, I’m going to let you Bob take over. Thanks for joining us, and can you tell us the story about the company?

Bob:
The story on our company is I spent 18 years in corporate America, and I was director of training and development for a 70,000 person company. What happened I put a bid out for several e-learning courses that we wanted to do, and I examined 20 companies. Out of all the companies I examined, I didn’t really care for the quality. The costs were exorbitant, and everything would take a year to implement. So I told a buddy of mine if we started a company that just focused on e-learning, and we did everything in 90 days or less at a high quality at a fair cost, a good market would be had.

So we started this out of the garage of my house. We had no product. We had no money. We had no customers. We had nothing. Within the first eight months, we had our first million dollar contract. Today we do business with 20 of the Fortune 50. We do about 800 programs a year. We have about 50 employees, and we’re just growing at a very high rate. This is the best year we’ve ever had revenue and profitability wise. It’s basically still on those three premises – 90 days or less, very high quality and at a very good price.

Mike:
You had a really solid job in corporate America. Did you take on Xcelerate Media as a part-time job, as you were building it up over time?

Bob:
No. Stopped full-time and just started doing this full-time, and it’s kind of interesting. I don’t know if this’ll work real well. But when we started out of my garage, since we really didn’t have any funding, our desks were a door that you purchased at Lowe’s for $12. We stained it, and then we got filing cabinets at a junkyard for pennies on the dollar. When you look around our office today, we have 50 people in here. Every single one of them, including myself, has a desk from Lowe’s that cost about $12 that I stained myself, two filing cabinets from a junkyard. People said, “Bob, the company’s doing well. You’re growing. You’re doing business with the Fortune 20 companies. You got to change that.” That’s part of our lure, because we wear it like a badge of honor, because when you come here, there is not a marble lobby. There are not very great fixtures and everything, because we do things all for our customers to give them that great cost and everything. So, we wear that like a badge of honor. We’re not cheap, but we’re very smart with what we do with our dollars.

Mike:
So I think you have a sales background. How did you get into the training aspect that led you to where you’re at today?

Bob:
Yeah, I’ll give it in a Reader’s Digest version. I began in sales in 1986 with CompuServe, and I had a territory that did $600,000 a year. I built that up to a territory that did $72 million a year, and it was just a great ride. What happened is we had some great growth that I started a training program for the salespeople in the region that I had, and all my other peers started to send all of their salespeople to me to get them trained, even though they didn’t work for me or everything. So, that worked out well.

So, they asked me do I want to head up training, and I said no because it’d be a huge pay cut. What they did is they juiced me with options and they took very good care of me. I was able to cash in on several hundred thousands of dollars of options there. So, really compensated me for what I wasn’t getting in the sales revenue. So, is in that training role is when I started looking at the other companies and just started getting attached to the technology.

Mike:
Based on your record with CompuServe, you have great sales skills obviously. Is that something that comes natural?

Bob:
I don’t think it’s anything that I’m natural at really, because I would tell you I’m the worst salesperson. I’m not a good salesperson. But what I think I am good at is when I would sell at CompuServe, I’d bring the right resources in at the right times and take advantage of the skills of others to make the big sales. So, I wouldn’t say I’m a good salesperson. If you were to see my technique, it’s very non-threatening. It’s very non-pushy. It’s very non-laid back, and we approach it more just from listening to what the customer has and doing the best job we can at building a business case to try to give them what they need.

Mike:
Tell me about the book you’ve written regarding sales, how it came about and what readers will gain from reading it, what skills they’ll pick up.

Bob:
I was just very frustrated in the lack of sales skills that a lot of folks have, missing the fundamentals. I found the worst violators were tenured salespeople that have been around a while. So I’ve written and published a book. It’s called, “Climbing the Sales Mountain.” I can even give you the website on it and user ID and password, so you can check it out if you like. But how it works is you go and you read the book or you listen to the book. You can do either/or, and it’s a two-hour read or listen to. Then, after you do that, you take an e-learning course that doesn’t regurgitate the book, but it reinforces the salient points.

When you finish the program, you will know, number one, how to prepare and organize a territory. Number two, you’ll know how to book an appointment. Number three, how to run a sales call. These are the chapters, by the way. Number four, how to run a sales cycle. Number five, after you know how to run the sales cycle, you know how to prepare a business case. The last chapter is how to present that business case and close, so just fundamentals. But then I have honors chapters that deal with things like negotiations, objection handling, personality assessment, closing and these types of things. So, we have the fundamentals and then honors chapters, which is a very nice compliment.

Mike:
As a business owner, what qualities, what skills do you look for in employees or salespeople when you’re looking to hire?

Bob:
We’re looking more at the person, not their track record. So some of these things, we look for the three Es. People that have a high level of energy. People that can energize others around them, and people that have the edge to get things done. So, the three Es, and that’s something that I’ve learned from General Electric following them. Then we also use the Southwest adage, is that we hire for attitude and train for skill. So, when we look at the different employees, if you give us someone that has a great attitude and someone that has a great work ethic, all they need is that environment to be successful, and we have a great environment here. So, when we look at someone, I’m looking more for their attitude and their work ethic. If they have those two skills and they’re a good people person, then we’ll provide the environment and the product set to make them successful.

I would tell you this, if you were to ask our customers why they buy from us, I would tell you three things. The type of people we have at Xcelerate Media that they’re buying from, number one. The way we service them, number two. The story we tell, number three. It’s kind of interesting. I want you to think about this. The three things that I’ve just mentioned have nothing to do about our product. The product is a far, far way down . . . now we have a terrific product. But I would tell you that people are buying from us more because of those three things that I said earlier – type of person, how we service them, the story we tell, and then we have this great product.

Mike:
What advice would you have for some small business owners or entrepreneurs that aren’t quite as far along as you are yet or not as experienced? What advice do you have for them?

Bob:
To take more risks and push things, because there’s something, Mike, I call the “entrepreneurial twist.” This is what I think kills a lot of entrepreneurs. So many people do so much planning and organizing and thinking what they need to do to go forward, and they basically never get anything done. What we do more around here is we try different things. So what the entrepreneurial twist is, I talk about, is you go to a certain point. You figure out what’s working, what’s not working, and then you take a right or a left turn. Then you go more and you hit it hard. Find out what’s working, what’s not working, then take another turn and just keep going.

If you think too much, you’re going to die. So you just need to move quickly and try different things and just keep doing that, and you’re able to move along a little faster. I know it sounds a little crazy, but you just need to move fast and keep moving and adapting. There’s an old adage I preach around here that it’s not the smartest that survive. This is an old saying. It’s not the strongest that survive, but it’s the ones that do the best job of adapting. So we really try to live that here.

Mike:
Bob, my final question for you is, what do you attribute your company’s success to?

Bob:
It’s not because of me. It’s not because of our products. It’s because of the culture that we have here. The culture is we don’t have much control of our people. We hire people that we empower them. We trust them. We give them deadlines of what they need to do, and then we give them the ability to do their own thing, and they don’t get in trouble if they mess up. We actually encourage that. Try messing up. Try to take some risks. Then we learn from it and then we move on from there. So, if the number one reason why we’re so profitable and growing at such a healthy clip, it’s more about the people and the culture we have here. I don’t think it’s about the industry or about the product or anything. It’s about the group of folks we have here and the culture and the environment we give them to move on.