Rocket fueled growth – Tim Hamilton of Praxent

Tim Hamilton, Founder and CEO of Praxent

Tim Hamilton, the Founder and CEO of Praxent, grew his company’s revenue from $2.6m in 2014 to $5.2m in 2017, a 103% increase and now they are on track to hit $7.3m this year.

Praxent is a custom software company and digital consultancy that helps their clients unlock greater profitability and valuation through strategic technology tools.

In this interview with Eversprint‘s Malcolm Lui, Tim shares how he and his team accelerated their high value sales by:

  • Bringing on board a new partner to handle sales, which allowed Tim to focus on marketing and lead gen.  This key decision was inspired by the book “Rocket Fuel” by Gino Wickman.  
  • Generating leads through continuously refined content marketing and corporate event triggers.  
  • Capitalizing on the trend toward reducing buyer journey friction.  value 

Praxent Interview - (computer generated transcript)

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Malcolm Lui here. Welcome to Eversprint.com. Today we're speaking with Tim Hamilton, the Founder and CEO of Praxent, a fast growing custom software company and digital consultancy that helps their clients unlock greater profitability and valuation through strategic technology tools. Tim grew his company's revenue from $2.6 million in 2014 to $5.2 million in 2017, 103% increase, and now they are on track to hit $7.3 million this year. Welcome to the call Tim.

Thanks so much Malcolm. It's great to be with you.

So Tim how did you do it? How did you grow your company sales so fast?

You know Malcolm I've been close for quite a while. It's sort of the business to almost 18 years ago in the year 2000. So I've been at it for quite a while. But you know what. The growth that we've we've achieved in the past three or so years going back to 2015 originate from a decision a single key decision that I made in 2015 after reading a book called rocket fuel. The bottom line is I decided to bring on a business partner in 2015. He started officially in the beginning of 2016 and we began in earnest sort of reinventing architecting the business and setting it up for rapid growth. But the way that we divided our roles and responsibilities was absolutely key to the growth that has resulted since then. I'm happy to chat more but. But the other day that that was a decision that has enabled us to unlock our growth

What was your business like before you brought in your partner and how did it change so radically that really made a big difference.

To support Kevin came on I was responsible for sales and marketing and made some progress. Building a team around me to take over delivery but I really I really wasn't completely out of out of delivery. And the biggest thing I was on my shoulders was was sales. So the decision to bring on Kevin had a lot to do and the success that we had to have a lot to do with the decision to have him join the business and really take over sales and new business which is which is his strength. What he's done in his career what he's been really really successful. So he came on an early 2016 and within a few months was completely owning all new business and all sales which really enabled me to focus on marketing Legion. It turned out I was really excited and passionate and creative in this area. It was it was the part of the business that gave me the most energy to focus on and with Kevin focusing on sales. I had the confidence to just explore and deepen my skills and marketing and Legion. So the combination of that and you know Kevin's unique ability really is what enabled us to to grow as a result.

Fantastic. Now you said you came to this realization this aha moment when you read the book. Rocket fuel. I'm not familiar with that book. What about that book gave you that aha moment.

The core idea in the book is that for every major successful business for every business that succeeds there are two leaders at the heart of that business. Now we often only hear about the one leader the book calls this kind of leader the visionary the person who's out front who's the tip of the spear so to speak. So for for Microsoft it's Bill Gates for Apple it's Steve Jobs for Disney it's Walt Disney none of those businesses. However according to the book would have succeeded without the second leader the leader behind the curtain so to speak. The book calls the leader the integrator for Walt Disney. It was his brother Roy for Steve Jobs that was his integrator. Steve Wozniak and obviously Paul Allen was there Bill Gates as integrator. The idea is that the integrator works with the visionary to disqualify all the bad ideas from the good ideas the visionary the visionary produces 20 20 or 25 new ideas every single month and if a business pursues all those ideas while it may be creative they can be very very destructive causing a lot of disharmony or lack of accountability a lot of confusion. The integrator helps the visionary to filter bogus determining which of those ideas are good which those ideas we really disqualify. And so I read that book and why I really resisted the idea of bringing on a partner. Historically this book helped me to see really really clear relief that that the time had come I really desperately needed to bring on an integrator to help me to focus on my strengths rely on my strengths and rely on him for his

I found it interesting that you didn't feel that you needed someone to help you on the fulfillment side of your business. That was something that was pretty much buttoned down nailed down for you.

Well what I've learned since then is that what a business needs for a film it changes as the business grows and you know you can think of this as the different chapters through growth. And and I think I think most businesses probably encounter challenges gaps and shortages in their fulfillment area and their delivery areas. As they grow and that you know that that certainly has been been the case for us. But but I do believe that we we have the ability to identify those and shore up those gaps. The thing that really is particularly challenging in my business the bottleneck to our growth so to speak is is in is in the sales process. Now I would I would say Malcolm that this is probably different for every business you know depending on that business environment that the business model the bottleneck that the founder really needs to focus on it will you know may not always be sales likely as not always sales. Maybe it isn't deliberate but in my particular case in the consulting and professional services business dealing with the customer at the very very very end it's very very beginning of the relationship navigating them through their insecurities their peers their challenges helping them to to really diagnose the core issue that they're facing in business. Those are extremely difficult conversations to have. You have to have a very very sophisticated business developer to do that of a consultant. Frankly this is this is really really high level work. And so for us that was our bottleneck and the most important thing for me to remove myself from in order to unlock scalability in the business.

Right. For Kevin did he bring a huge Rolodex to help you generate unclose new business or is he just a fantastic sales person who's able to do all those things he just talked about to develop the relationship and work through what challenges the clients may have or prospects may have at that time.

Now there is another book that I'm thinking about that I that I read just before Kevin joined cult predictable revenue written by Aaron Ross in this book. Aaron puts forward the the idea that there are different types of different types of business development or sales experts. There is the opener. There is the bowser and then there's the service Germar. And that historically we have looked to sales professionals to fulfill all three roles to have the ability to open via a Rolodex to introduce us to a new client to close that client into a customer and then to serve that customer throughout the life of their relationship with us. The book predictable revenue says that this leads us to a lot of trouble and really encourages readers to specialize. The book suggests that no there is a kind of sales person who's really good at it. This is a fast conversation. Somebody who is extremely extroverted. The Connector the Rolodex. These are these are the types of attributes that we look to the skills and strengths that we look to a an open or to provide. Kevin is a closer so he is really really skilled at the consultative conversation. And for him to focus on closing we knew that we had a gap in in the open. We had to find a way for the business to generate leads predictably and sustainably. And that's where I went off and focused so that Kevin could focus on lead conversion. I decided to spend my time on the generation and so it was it was a little different than what you suggested but still we were able to. We were able to make it work by playing to our strengths.

Great. Now are you looking for a closer. Is that what you looking for when you found Kevin or are you just looking for someone to help you on the sales side in general.

You know the funny thing is that in retrospect if I'm completely honest with you I can only see the way this works and explain it and in retrospect I didn't plan it all out this way. I don't. Kevin and I knew exactly what was going to happen the and exactly how in in in 2015 2016 when we did this we both read rocket fuel and may just be where we were so convinced about the premise of the book that we just we felt like we would somehow complement each other. We'd both been in this industry for a long long time. We both deliver projects for several hundred clients and we we were very very much aligned on a core values and principles perspective and it was really it was that that brought us together and how we should organize how we should divide and split our roles and responsibilities that really only became clear after about eight or nine months of working together. It was it was a very very happy coincidence that it all worked. Not to say that we didn't do a lot of careful planning and that this wasn't all. I guess carefully vetted. We certainly battled it but the plan didn't become obvious intellect.

Right. For the growth that your company has experienced how much of it came from finding new clients and closing new clients and how much of it came from generating more business from your existing client base.

The vast majority of it came from new clients. EPS absolutely can say that again being able to go off and focus on lead generation got us into many more doors and got us got us into more conversations. And that was absolutely critical now. Now your question is an important one obviously because there's a ton of revenue that's on the table. There's a lot of services that we can provide to clients once we are in relationship getting into relationships are the hardest part when the services

Can you share how you generate more leads for for Kevin to finally close at the very end. What was your lead generation process.

So for us for us we've just really focused on content marketing and digital marketing. We wanted to take a lot of a lot of the success that we've helped our clients to develop over the years and we wanted to tell their story. We wanted to share share about the wins and share about our insights that we've developed along the way. And that's where I focused since scavenges joined us and joined on. It's really an architecture

So how do you do the numbers work out on the inbound side how are you driving. Are you. Do you have any sort of paid advertising at all going on to draw people to your content or is this all from organic searches.

It's a mix. You know we we we do a mix of digital and the other thing I'll say is that it's never static. You know one one surprising thing is that there's quite a lot. There's a ton of dynamism in that channel particularly so you know we're constantly optimizing it tweaking and improving

He sure with me perhaps the things that you tried and experimented with didn't work out so great in terms of generating new leads.

Yeah. I'm happy to. So one of the things we've tried as a as I shared with you earlier is that we read this book predictable revenue and in that book they talk a lot about how to how to hire an opener. So this is a unique uniquely skilled salesperson who very very good at introducing a business to prospects out there in the market. We've we've tried to do this four times. We've outsourced it several times. We've hired employees internally to do it several times and what that work looks like is counting down or sending a ton of e-mail out to the marketplace trying to get us intros and appointments. That's one of the things that we were most committed to because I'd seen competitors doing it successfully and seen it working in the marketplace and I thought manat we just keep trying somehow some way we're going to unlock this. So we tried four times four separate attempts over the period of about 18 months before we ultimately decided you know we were never read. This is this is not in our business. And instead of just being stubborn about it we're going to we're going to have try something else beyond trying out found before selecting the next campaign and next channel that we really went after.

We used a framework called jobs to be done which was developed by Tony Olmec and that really popularized by Clayton Christiansen. Jobs to be done theory basically says that they'll be key to marketing to unlocking business growth and marketing is isn't really understanding it at a very DCL level. The circumstance that your target customer is in when they begin looking for a solution that you could provide them with. And we started doing that. We started thinking really deeply about the circumstance that our prospect was in what kind of a business are they working for. What level in the business are they at. Who is their boss. What are their greatest insecurities. What are they what are they losing sleep over. And in the process of brainstorming and thinking a lot about that we also thought about well where would they go to find a solution. And what event in their professional life or maybe even personal would trigger them to look for a solution that we could provide. And it was in that exercise that that that helped us to be creative about innovating the way that we approach marketing

He share what those innovations were like. What are the event triggers that you found to be key toward finding businesses that are a good fit for your company services.

Yeah. You know one of the things that we came up with was that if a business is either trying to fill a position in their in their recruiting process or they've just made a new hire a particular time those are very public signals or indicators that a business might be innovating or looking to innovate in a particular area. A secondary source which was a little bit less less effective was you know press releases that that business was putting out there that were basically announcing a new focus. Oftentimes when a press release would come out it would maybe be too late. A new hire or an ad to make a new hire are often are and better better indicators. You can also learn a lot about a business just by reading their glassdoor reviews. I'm looking at recent departures or also following Manee news. If a private equity company recently made an acquisition or Siècle you'd better bet that those businesses are likely to make an investment of some kind to technology. These are all publicly observable events and data that you can you can see and do a lot with.

Can you give an example of a company having a job opening for a certain position. Or maybe just an announcement of how they just hired someone. How would you and Kevin then take you to nextstep power. Do you perhaps reach out to them and begin the conversation.

I think probably as we've all experienced there's just such a high volume of solicitation that it's happening at this point. I think there was an estimate that that we see on average 30 500 AD impressions or advertisements per day. So we all sort of reached our air our max volume level. I would I would encourage anyone who is trying to do this work to get creative about how to personalize that outreach because the only way to break through that noise is to either hit a prospect with incredible accuracy that really resonates with their unique circumstance or to personalize it in a in an uncommon way. Those are ways that at least in a in a B2B complex sale. We've we've we've been much more successful than when we've sort of sprayed and prayed. We've taken the same message and delivered it to a large target that just hasn't delivered results for us.

All right. Can you share some of the different ways that you've done outreach and it has worked really well and perhaps share some of the ways that you thought would work and it just totally flopped.

You know it's inefficient to personalize it.

Right.

It requires it requires a lot of extra extra work. And in a complex B2B sale. But the most effective thing that you can do I think is to share with the target prospect the person who's going to be receiving this outreach whether it's Uncle voicemail or a handwritten note an e-mail a LinkedIn message. The best thing that you can do is an effective thing that you can do. And that is relatively easy to scale is to share other successes that you've had in their category in their industry using using names of companies that they are familiar with that they either look up to or perhaps threatened by or are aware of that. That is one that's one technique is basically like showcase you know caissons with possible hard quantifiable numbers data saying you know we worked with this company that you're probably familiar with because they're in your category and we helped you drive this kind of are why Would it make sense for us to tell

Right. Have your clients been pretty open about about having you create case studies about them and sharing the results you've generated for them.

Yeah I mean most. There are some there are some exceptions. When when when a project is so confidential and has such sort of special strategic value to the client business then some clients are a little bit leery. But in the majority of cases we're able to create case studies that our clients are proud for us to publish and we haven't we haven't had a lot of a lot of difficulty getting it out.

Right. Fantastic. In regards to your sales process can you outline what your process is like what you know who does the initial contact is Kevin that does the first contact or is it you and at what point does Kevin Kevin come in and do the consultive selling to close the deal.

This has changed recently. We've hired we've hired on to an account our client coordinator because. Because Lilo's gotten to the point where we are not able to process. We're not able to process them all ourselves in a timely manner and so we've started to build around this as a competency so that we we can serve those prospects that are really really early stage and get them the information that they're seeking. If we're not a good fit we're really candid with them about that at the very very beginning so that we can help them to find a good fit either referring them to a better solution or are doing some brainstorming to help them find a better solution. We might not have as an action but if if in the process it it seems like we would be a great fit. And then it goes to Kevin in their strong competition

Right. Was it typical sales cycle how long does it take from beginning to end before the deal gets done and in Europe to start working on a project.

Really nothing is typical it varies so much to give you a number I could say in a 90 to 120 days and you'll have outliers on either side of that

Right OK. In regards to the opportunities you're seeing going forward. Do you see any big trends that are that you want to position your company to take advantage of or perhaps reposition your company so that the trends don't cause any disruption for your business.

You know what. Our focus the trend that we see in the marketplace and the focus strategically for us is that the buyers journey in every single category is changing. Digital technology is disrupting the way people buy everything. So to share a couple of examples if you look at Parvana for example revolutionizing the way that we buy cars Zillow and redfin are working tirelessly to revolutionize the way that we buy homes. We recently built and launched a product in the Amba B2C residential real estate space called bungalow. And they're doing that as well in residential real estate. And so our focus is really to help businesses to remove friction from their sales process to remove friction from the buyer journey with custom technology. We see this trend only accelerating and not slowing down. Other examples include I mean if you remember way back in the day before we had Expedia Travelocity that we had to buy a plane ticket. It's a ridiculous example because it seems like it was so far so far away or so so long ago. But just think about the transformation that's occurred in the travel industry with sites like Expedia Travelocity Priceline. This has happened a lot in B2C and we were taking those innovations and helping B2B primarily B2B service companies to acquire them. And that's the trend we only see accelerating going forward

Can you give an example or perhaps a quick summary of one of your case studies where you have done that where you've helped the company reduce the friction in their sales process.

Yeah absolutely. I'll give you one that has both a B to B and A B C aspect and r g several years ago saw a real opportunity to help their homeowners go solar. They're a residential utility company based out of Houston. They sell retail electricity. They saw solar energy produced on the rooftops of their customers is a real competitive threat to their market and they decided that they wanted to do something about that. So they they they worked with us to build a sales enablement platform that was ultimately used by over 3500 sales reps that were all independently employed and running and other small businesses. These are basically solar and solar businesses which make up a business you know Acme solar and Tucson Arizona. These guys would sell and install solar panels to homeowners in Tucson Arizona and argi would provide a lease at Acme solar to that homeowner and we built a technology that would enable Acme solar and there 10 or 11 person sales team to effectively estimate and build and then and then manage the lease process for those leases so that they were able to sell a heck of a lot more solar panels because they weren't shelling out the customer wasn't shelling out 23 year old Elmendorf's for insulation and said they were paying. Call it 68 120 dollars a month for that solar lease. And through this process energy was able to sell 80 million dollars of solar leases. Only eight months after we launched it it grew so incredibly rapidly far exceeding our expectations for the program. It was a huge success for them and for you know clean green energy

Right now when when you work with energy on this project did you already have the technology and the capabilities to do it all in-house or is it all somewhat new to your team and there's a bit of you of your team having to acquire new knowledge and maybe bring onboard new people new partners to execute the project.

Yeah almost all in almost all cases. There is some aspect of new and innovative but at this point we've done over 300 projects and we we have we've done everything from embedded hardware to Antonino software only from Mobile to desktop. We've done a lot. We've seen a lot and certainly earlier on in the business you know when her when I first started 18 years ago there was a lot of fake it until you make it. And I I'm really really grateful for the for the risks that the early early stage pilots took. I'm happy to say that we never let a client down due to a failure to get to the other side of a technical barrier so to speak. But in some cases we've gotten creative about how to deliver the reality in this business is that businesses everywhere are under a lot of pressure to remain innovative and just going to an off the shelf solution really it doesn't cut it. It's the way that your customer buys from you unless you know you're implementing Shopify for a pretty standard e-commerce experience. And that's that's not what we do. Oftentimes in order to create a unique and innovative buyer journey you have to go and build a custom

Right now there are two philosophies on that right. I mean you're in one camp where you are writing custom solutions to meet the needs of your clients. Exactly. And then there's the other camp of a camp where you produce where you provide a standardised solution and you offer to those who need it and can use it and everyone else will find a solution elsewhere. So what's your thinking between between being a a a a bespoke software consultancy company as opposed to offering a single well-defined product or service.

You know an off the shelf standard standardized solution is often a really great way to go what you're solving is an internal problem. For example creating a records management system or a customer relationship management system a loan origination system I mean there's many many examples of primarily internally oriented tools and systems that that businesses need to to. A general ledger is a great another great example. It's in those areas that going to an off the shelf solution makes the most sense. And oftentimes we have people coming to us with internal issues they want to streamline this business process or they want to you know remove a human effort from that process. And those leads and the opportunities that we typically work on to others because we really do see the opportunities as better suited to filled by a an off the shelf solution. What we're focusing on is really in the way that the brand our client brand treats the customer through the purchase process that is inherently competitive. It is an inherently differentiating. So it is in that way that we do not believe it's prudent for clients to go to an off the shelf solution unless their business is highly transactional and fairly to monetize. Like I said an e-commerce business or retail business it does not make sense for them to come to Praxair because they're better served by something like a like a like a

Right from going back to the beginning of our conversation you shared with me earlier how in 2017 your company did 5.2 million in 2018 you're looking at almost bumping in up by 50 percent. Looking on track to hit about seven point three million for the year what big changes drove that 50 percent increase

We've done

If any

We've done a lot of work to to build out a human centered design practice at Praxair. What that means is that instead of designing software around the technical constraints or the system architecture software requirements we take a step back and really focus on the user the user. In our cases oftentimes the clients prospect or the clients customer when we spend time to really understand them to an uncommon degree and pooling Lexx research qualitative and quantitative research to actually observed what's really powerful is that you can actually observe that user in their context of use to see what creates the trigger for them to look for a solution that could ultimately lead them to our clients business for a solution. What's the circumstance. What are the what are the pain points. What are the points of friction. Do they have any emotional insecurity as they go. And it's in really understanding that that we can help our clients to make strategic and differentiated decisions about what ultimately needs to be built in their solution and adding that as a practice area for us in the last two years has been absolutely key. We've become we've become much more consultative with the work that we're doing with our clients. They're they're bringing us into design the solution as opposed to just building a solution that you know they've already designed

Right for your plans beyond 2019 beyond for your plans beyond 2018. What are the opportunities that you see. What's the next step to take your company to the next level.

You know a lot of what we've been talking about is really for us is really the focus for us in 2019 and beyond. It's really it's to drill into this focus of removing friction from an otherwise painful Bayor journey especially for those B2B service businesses that are struggling to get their prospects and clients across the finish line. We are experiencing an unprecedented amount of demand right now and businesses everywhere are feeling are feeling like they can't scale up quite as much or quite effectively as they've been able to they've sort of hit their ceiling and they're looking for innovative ways of transforming that fire journey with technology. We're going to just deepen our focus and specialization in that area and continue to employ and deepen our ability within the realm of human centered User Experience Research Design. That's really it for us. Staffing recruiting building and organizing a team that that's a challenge that anyone who is in business understands right and and especially being in Austin there's a there's a it's a difficult labor market so that will also be a core across for us. Michael

To fond of questions for you Tim. One for your clients who are your ideal clients. Who are the ones that you prefer to work with that you can help the most and to what's the best way for those people out there who are your ideal clients to contact your team.

So thank you very much for asking for us. You know it's somebody I'm on at a leadership or an executive level at a at a typically B2B service company that is is struggling with the excess of demand. They've got more than enough demand that their business systems cannot scale to meet the demand. There are also as an individual looking for an opportunity to sort of reach up and grab that brass ring they see or conceive of an innovative way a transformative way of improving the way business gets done in their industry. And they've been burned by by maybe outsourcing or offshoring it in the past and they want to they want to find a really wrote La Belle and competition that will give them the confidence to go ahead make that take that leap. We start small we start small as we possibly can with a low risk initial investments of BET and validate that the concept actually will work. If we cannot if we can prove that with a relatively high degree of certainty that your concept your vision for the business will generate are why the words profit from software then. Then we'll share that research unapologetically and candidly with with our prospects and encourage them to keep looking and often oftentimes we'll help them come up with alternatives in terms of starting a project. The best way to begin the process for us is to go to our Web site Prax since dot com and work on the contact us button that people want to have a conversation directly they're welcome to email me as well. Tim at Prax and dark comments Tim isn't Timothy at Praxedis dot com and we'll well like I said start with a very very small project to test and validate the idea and then build from there.

In terms of your ideal client is there a particular size of business a minimum revenue size that be

We

One of your requirements.

The way that we think it really is is a mid-market company that's right in the middle of their of their industry. You know in some industries that it may be you know 20 or 50 million dollar companies that might be a 200 million dollar company. Usually the and b the the the projects that we're working on begin at a range of about 50000 dollars. Duby to do that you ex researching validation and go up beyond that depending on how aggressive a business wants to get with their innovation in 2018 2019. The range is usually anywhere from about 5 million in revenue Ormus the small side to you know several hundred million on the large side

All right good. That's helpful to know and help with or clarify for those people who are interested in reaching out to your company. Thanks so much for joining us and sharing how you grow your company so fast.

Thanks very much Malcolm.

We've been speaking with Tim Hamilton, the Founder and CEO of Praxent about his company's rapid growth. For interviews with other fast growing companies, or to learn how we can increase your firm's high ticket sales through automation, visit eversprint.com.

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