Ep # 84 | Opportunities For Tomorrow

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Raghu Kakarala is the Managing Partner at FortyFour. Prior to cofounding FortyFour he helped build and grow Spunlogic and Engauge into the largest private agency in the Southeast. After participating in the sale of Engauge to Publicis in 2013 Raghu travelled extensively with his wife Dolly and twins Sai and Avi and came back to Atlanta to help create FortyFour into a premier place for local talent to envision and create great work for leading clients. With clients across the globe as well as based here in Atlanta, FortyFour has grown to over 50 employees in its headquarters in Inman Park.




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Shantel: Hey Raghu, welcome to the show.

Raghu: Hey Shantel, pleased to meet you. It's happy new, it's good to kickoff 2019.

Shantel: Absolutely. We're really excited to learn more about what inspires you and makes you think big picture and imagine more and I'd love to kick things off with sharing with our listeners a little bit more about your agency background.

| LIFE ALWAYS WORKED OUT THAT WAY |

Raghu: Yeah. I guess I never really thought I'd end up in this industry, but I guess it's treated me well. So when I look back at it, the thing that stands out to me is that I never really meant to get into it in the first place, I have a math major and always wanted to get into finance and business and a little bit after I graduated from undergrad, I started a finance firm. However, it was computer related and we built some financial models and started a credit reporting firm. Out of that, got me into the Internet and all the other great things that it could do. And then suddenly right around the late 90s, early 2000s, I started really getting into Internet marketing and met a great friend Raj Choudhury. And, fast forward a year or two and next we were in business together along with Jeff Hilimire and Danny Davis at Spunlogic and it was a great ride from then all the way through when we sold Spunlogic in 2008 and became Engauge and then we all stayed on board until we eventually sold Engauge in 2013. So next thing, I'm 15 years into being in internet marketing, which I never really thought I wanted to be in, in the first place, but it's treated me well and I've met a lot of great people. So, I guess life always worked out that way.

Shantel: I love that. I had no idea you wanted to pursue finance.

Raghu: Yeah.  Well, I always, I read this book a long time ago called Den Of Thieves and it was all about the junk bonds in the 1980s and all the leverage buy-outs. And they made a few movies about it, like Bonfire Of The Vanities and a couple of other kind of cool movies like that. Of course, Wall Street back in the day. So I guess that sort of got me inspired by all of the flash and cool things and complexities in that world. So, it kind of hooked me. I guess if I was watching The Bourne Identity Movies, I would have joined the CIA. So, very impressionable age.

Shantel: Impressionable. So, with the background in finance and Spunlogic, did you take on a role of kind of more of a CFO or operations in that sense or did you kind of lead some of the programming with the computer background?

Raghu: Well, I mean I guess I provided some stability on the finance side of things. In general, I would say for most of our time at Spunlogic, we never really had enough money to need a CFO, we just really needed people to help grow the business. So, all four of us really wore many hats, sometimes helping in sales or having a key client or two that we help run or getting into new service areas and just really networking and growing the business. And I think wearing many hats was great. Definitely, when it came to finance or business type questions, I probably had a little bit more experience than the others, but at the end of the day all important decisions were collaborative. So, even though my experience was a plus, I think four heads were definitely better than any one of us and we made a good set of partners to help grow the business over the years.

Shantel: Certainly. I can definitely relate to the many hats and I think as business owners, oftentimes we find ourselves wearing many hats. Are you still in that boat, in that kind of wearing multiple hats with FortyFour?

Raghu: Yeah, definitely. I think a little bit less so now that we've grown to a pretty good size. In fact we're probably honestly about the same size now as Spunlogic was back in 2007, but I think along the way I saw, especially when were already in Engauge and towards the end, we were closer to 300 employees for a while, that you could specialize more and more and I could do something really cool like I helped start our social media practice in China and really help grow that. I think scale help me dive deeper into a few things and that was great, but I really enjoyed getting back into being able to wear multiple hats but now we kind of had to start up again with FortyFour. So, I think there's pluses and minuses to both but it's great over a span of a few years to be able to do something deep and do a deep dive into something because your company has enough scale to do all the normal day to day things well. And then also be able to have your finger in many different areas like you would at a smaller firm.

Shantel: Can we dive a little bit into FortyFour? Can you tell the listeners about your current company?

| DEEPER RELATIONSHIPS |

Raghu: Awesome. I think one thing that we thought when we were putting the firm together is what can we do at scale for really big companies while being a small company ourselves and we sort of keyed in on the idea of building, creating and managing platforms and whether those platforms are eCommerce platforms or content platforms or marketing platforms without owning the technology stack as far as being subject matter experts in how it was all put together as well as how it was run day to day and improves over time would allow us to have deeper relationships with clients that have less churn rather than just doing project work. And we put a vision together around that. And we grew a really thriving eCommerce practice that I think it's a leader in the SouthEast and a very strong CMS practice that can do large scale international websites, multilingual, multi country and that allows us to have a longterm relationship with clients. And that's really helped us focus, get really good at what we do and then also develop a real relationship that goes into learning about what makes our clients business tick and get into the verticals of sales and retail and pharmaceuticals and things like that and have really deep conversations with clients about what they're doing, what they plan to do in the coming year, how we can help them with their jobs. And it's great, which is a much deeper relationship than when, back in the day when we were just building websites.

Shantel: You mentioned big companies, so it seems like you went into this firm with the direction of we're going to target big companies specifically. Was that different from Spunlogic and Engauge and some of the other partners or clients you touched? So was that a new endeavor or that was what you were used to handling?

Raghu: Great question. Honestly, at the beginning with Spunlogic, it was working with whoever wanted to work with us and our level of maturity and all of that grew over the years. But at the beginning I think we were a great client that would over service small to medium firms and towards the end we were being able to work with larger firms like Home Depot and Chris Steak House and do a good job for them as well. But we were always really good at caring about each client and when we were smaller, definitely I think the clients that we could best service we're also small and that grew over time as we got better at our jobs. Now, I think starting a firm after having a lot of experience, we could logically say let's target big companies from the beginning just because we say we wanted to deal with, honestly the only way that it was going to come to life is if we could actually add value. And I think now with years of experience we could add value to large firms as well. And honestly, sometimes there's large firms that you've never heard of that have good complex challenges and those are great firms to work with because they don't get treated with the same respect when they go to a holding company because their brand name isn't big but their needs, their budgets and their ambitions are. So a big client isn't just one that have a fancy name, it's also one that has big problems and big opportunities. So, I think being able to treat both kinds of firms well is so far calling card here because while we do have a lot of great brand names and we really appreciate the ability to work with them, we also appreciate the tough challenges and the big problems and opportunities that lesser known brands have that are also big companies and also do business nationally or internationally.

Shantel: Yeah. I love what you said about when you realized you were in a place that you could add value. So it wasn't, you weren't coming from a place of I'd like to work with them, I hope that we have a service that they're interested in. You were confident with the value that you could provide and then you kind of probably tailored that messaging to them which I think is great and putting together a Webinar for a company on how to attract your perfect customer. And so I've been thinking a lot about that and trying to reflect on five years ago when I was starting, I don't think we had a lot of intention on who we were trying to get. We were just saying yes to everyone. So it's been a fun exercise to reflect on that and see how we've evolved and then hear from other business owners how they define their niche and then actually attract those types of customers.

Raghu: Good. I mean I always kind of framed it in a way of even when a client doesn't immediately need something but they want to sit down for a coffee with you, can you have a conversation and help them solve maybe some opportunity they see at work or maybe there's a restructuring going on or they see a competitor or somebody in a different industry tie something and just have casual conversations that add value and that they really appreciate, even if there aren't any dollar figures that come out of it because three months, six months, two years down the road, that client or prospect might suddenly be in a position to act on their thoughts that you helped them put together and they might have budget then and I trusted over time they'll remember those good conversations in the past and call me up and continue the discussion and suddenly some business relationship and not just conversations over coffee, which is actually funny because I don't drink coffee, but conversations over hot chocolate while they drink coffee have really been the key to the last 15 years of success.

Shantel: So outside of hot chocolate, are you a tea drinker or just hot chocolate?

Raghu: No, I don't really need the caffeine, when I wake up in the morning I'm up and honestly, I could do a double expresso right before I go to bed and still go immediately to bed. So I guess I missed the whole caffeine kick while I was in college. I never really needed it.

Shantel: Nice, I really appreciate what you said about the, just those casual conversations and not expecting anything in return and I think there is so much value in just that relationship focused approach as opposed to just hard selling all the time. How do you nurture those relationships? So you grab a cup, how do you remember or do you have a system or process to stay in front of people that you'd like to continue that relationship with?

| THERE’S NO REPLACING TEAMWORK |

Raghu: Yeah. It's interesting. I've always respected a few friends in town, Jeff Hilimire, David Comings, few others that have had great success and have a very good cadence to how they go through their day, their week. Well, David's exceptionally good at that, but Jeff's quite good at that as well. But for me, even my schedule is organic. I trust my instincts to feel the opportunities in the rhythm and flow of business for where I spend my time and I've tried to spend a few minutes before I go to bed and a few minutes when I wake up mentally recalling things, I remember things very well and I write down highly procedural tasks in a to do list, like certain deadlines for filling out some paperwork or tax forums or really tactical things like that. But for bigger picture things, I feel like I'd like to dial in on the rhythm and flow of business and have less of a structured cadence but more of a attitude no way of going through the rhythm and flow that I'm feeling because a lot of times I like natural instincts combined with experience and I feel that's led me in a good direction over the years because at any one time as an entrepreneur you can go in a few different directions. I like to let the sense of rhythm and flow that I'm feeling lead me down the right path and of course balanced by some highly tactical things being written down on a to do list. Over the years, I've had the pleasure of having some great employees that are perfect complements to me as far as making sure that we together deal with tactical things and keep up. I guess the role of executive assistant isn't really the modern way of talking about it, but I've had a couple of employees over the years that have been perfect complements to me as far as letting my sense of the rhythm and flow of business opportunities combine with the sort of structured flow of just things that need to get done. And sometimes teamwork is, and there's no replacing teamwork. Even if you have a highly structured schedule.

Shantel: I like that you mentioned about the natural instincts. I think that perhaps could remove some of the overwhelm of, I have to talked to everyone or I have to follow up with, just kind of going with it. I would imagine it removes some of that pressure and feeling like you have to do something and just letting things organically unfold.

Raghu: Yes, and I noticed that I just described marriage. I suppose if both spouses are the same way, then either things get missed or either the rhythm and flow of life gets missed or the tactical things that keep things from falling apart get missed. And to have that balance is ultimately a great way to go through life, but it's also a great way to do business and you can get sideways sometimes, but I think a good conversation and can help fix those instances. But for most of the time, that rhythm and flow balanced with some tactical approaches, it's a great partnership.

Shantel: Yeah. No, that is interesting. I'm a couple months away from marriage, so I'm soaking it up all of the marriage advice I can get. I really also appreciate that you'd mentioned about reflection. So at the end of the night, soak up everything that happened in the day and I am not very good at pausing and reflecting. Is this a practice that you've always had or is something over time you've put into practice because it was an important thing for you?

Raghu: Many years ago, like 20 years ago or something. Occasionally, I somehow got into a rhythm of right before going to bed remembering the things I forgot to do that day and that would always mess up the beginning of my sleep and I was always a good sleeper and then, I noticed that and I changed that to not thinking about what I didn't do that day but of opportunities for the next day, which was a very positive way of ending it. So that got me into a good mood of even if some tactical element needed to get done that day and the time just didn't let it happen or you wanted to do two or three things that day and something came in, a last minute client meeting or opportunity. I started thinking about opportunities for the next day to end the day on a good note. And then I wake up in the morning sometimes with refreshed ideas on how to take advantage of those opportunities. I'm not sure if, I'm not saying that I dream about a solution to it, but it may be just a fresh head in the morning gets me set up the right way.

Shantel: Yeah. I think that there's certainly some power in that and I am someone who keeps a notebook by the bed because I will also remember things, but maybe I need to switch the mind frame around that.

Raghu: By the way, two Apps that I do like that are super lightweight because I never could get into the Evernote thing. I like Google Keep and the Google Tasks Apps, just being super lightweight and cross platform to help deal with some of those things to write down because I feel like I can hurry up and do a quick note or check off on those two things without having this whole day planner or approach to life.

Shantel: Yeah. We are a Google team and we use everything Google and that is an App I have not explored, which I'm not quite sure why, so I'm going to have to check that out. I appreciate you sharing. So I would like to switch gears a little bit. We were joking before starting the recording about how we're both, I'm also in an open office environment, no closed doors, no private offices. And imagine for a company or listeners that are starting a company or ones that are considering what their office space dream may look like. Do you have any insights? How has it been helpful for the team? Do you have any thoughts on an open collaborative environment?

Raghu: I mean, that's not often mentioned with open collaborative environment is usually there's less build out costs and there's lower cost to having to reconfiguring as you add new staff. So there's quite a bit of cost savings for a startup as well, and that flexibility and less build out expense and all the other stuff. So even if you feel like there are some downsides, capitalist scarce when you're starting out and if you have an open office space, that means you've built fewer walls, you've invested in less office furniture or cheaper office furniture, you can grab some IKEA desks and some chairs. You can reconfigure as teams, you can double in size and suddenly gets smaller desks. There's a lot of flexibility in an open office environment versus trying to build a formal office environment. I think the only way you could do that as a startup is if you accidentally sublet some class B space that's already split up into smaller rooms. Sometimes necessity is the mother of invention. I think. So a lot of us ended up in open office plans because that was barely what we had. But I think we found some benefits as well. And if you're rhythm and flow focused, you can sense the rhythm and flow in an open environment. There is a book I read a really long time ago, I guess when I was in high school, called Liar's Poker also along the same finance famous Den Of Thieves and it talked about Solomon brothers having this office environment where all the traders were group together and you could really sense of where you are winning or losing and the rhythm and flow of the trading desk and the trading floor and the trading days. As it got success, they moved into this bigger space in London that absorbed all that team energy and dissipated it. And they lost sense of how the firm was doing on an hour by hour or a day to day basis. And when you lose that situation awareness, it led them down to eventually not being nearly as good of a firm as before and eventually folding.

Shantel: That is really interesting. I've never thought about it from one savings perspective and this is our first office space, so we didn't really consider some of the build out costs and then also from the flow perspective, I think sometimes, selfishly it sounds really nice to be able to just shut the door, take some breath but I could see how companies could lose that sense of awareness of how things are going. How are people feeling, that energy which may go into people's culture.

Raghu: Yeah, I think so.

Shantel: That's a great thing.

Raghu: And honestly, I don't know what the alternative is. So, if I was a law firm and I had a bunch of different lawyers working on different clients, kind of maximize the available time, I totally get the closed door approach. I think it would make more money and also allow for some privacy of those kind of transactions, but what we do, I'm not sure if there is an alternative.

Shantel: Well, I just have a couple more questions for you to wrap things up and I'd be interested if you're open to sharing. Is there a maybe the biggest mistake you reflect on, that you've learned as an entrepreneur or a really big lesson, not necessarily a mistake, but just really something that helped either pivot the company or was a challenge that you had to overcome that you reflect on often that comes to mind?

| TAKE STOCK |

Raghu: Yeah, I mean without going into the exact mistakes because honestly every year or two I think we find ourselves making the same one and that's been true across a number of companies I've been in, is every now and then to take a stock of who your firm is today, which clients you can service best as far as skill set, as far as sides with the client as far as what you're asking for. Because every now and then maybe you might outgrow a client. There's a chance that you aren't servicing somebody new as well because of somebody that you're over servicing something that you've done before. Everything's a bit of a balance because I think every client deserves to have the right kind of attention, the right kind of talent put on them, but every now and then you might have grown or shrunk as a company and you're misallocating your best resources and I think you need to take stock every six months or so and say, Hey, if I rank my employees and our capabilities and our goals with how we're allocating them, am I doing the right thing for each of my clients? And you can't do that all the time if you can't shuffle around resources, it's inefficient and not particularly fair to firms. But I think if you don't do that once or twice a year, you'll suddenly find yourself in a place where some of your most seasoned employees are not being able to help some of your newest clients. And that's not fair to either your employees who don't get to broaden their talents on new clients or your new clients that if they don't have access to people that have the most experience. But I think that's true for any firm. Take stock every few months about who you are and if you're allocating your time, your money, your resources, the right way. And I think you'll find that you make that mistake. It's not a mistake if you change it every six or 12 months, but if you go a year or two without doing it, I think that's a mistake that doesn't benefit your employees or your clients.

Shantel: I think that's great. We just did a similar exercise and we've done it twice now at our yearly retreat and we take inventory on what we feel we do best and then we take stock on why we potentially lost customers and what the reasoning was. And then made sure that how we add value is the same way that the end result that that customer wants. Because we can say that we do x, Y, z great all day, but if the customer we are serving doesn't care necessarily about that at the end of the day, then we need to revise and reiterate, so revise and iterate that process. So it was a really helpful exercise and I think a little overwhelming because pivots, we want to be able to pivot it quickly so that we don't lose any more clients but an exciting challenge for sure.

Raghu: I call it the services equivalent of the TPS reports from that movie office space, you're doing something but you don't realize why you're doing it or if you're adding value creating this and clients change, your agency changes. And, I think a regular touch base of saying am I allocating the best of what I have to the best of what our clients can be and everybody benefits from them. But it's easy to take your eye off of it for a little bit too long.

Shantel: Definitely. Raghu, how can people get in touch with you, learn more about FortyFour and your journey?

Raghu: Awesome. Well, we always have our website fortyfour.com, but I mean honestly, I'd love to just sit down and have coffee with any of you, whether it's helping you solve business challenges, helping you start an agency, helping you be a better client, helping you move up the ranks in your job or meet your business goals and objectives. I won't have coffee but I'd be happy to buy you a cup and reach out to me through the website or our LinkedIn or my email raghu@fortyfour.com.

Shantel: That's great. Yes. Big fan of hot chocolate folks. Well, thank you so much for being on the show. We really appreciate it.

Raghu: And, have a great year at Imagine Media and I hope to see bigger and better things from you this year.