The ROI of 90%: A Founder's Guide to Letting Go

Matt Schaubroeck on Founder Mistakes, Scaling Strategy, and Team Alignment

How do leaders truly learn? According to Matt Schaubroeck, founder of Leverage Point Consulting, it comes from the mistakes made along the way. Schaubroeck speaks from deep experience, having co-founded, led as CEO, and successfully exited his first company, IO Airflow, in 2022. His journey provides a candid look at the challenges faced by first-time founders and the strategies required to build scalable, impactful businesses.

Leverage Point Consulting was born from Schaubroeck's desire to help other founders avoid the common, often painful, mistakes he encountered. His transition from politics and communications, through an MBA program where the entrepreneurial spark ignited, to leading a tech company through a pandemic pivot and acquisition, offers a rich perspective on translating vision into operational reality.

Key Insights from the Conversation

1. The Founder's Journey: From Idea to Impact Schaubroeck's path wasn't linear. IO Airflow started with a vision to reduce energy consumption in buildings, leveraging IoT and data analysis. The pandemic forced a pivot towards indoor air quality, demonstrating the need for entrepreneurial agility. This experience underscored a core truth: while founders often feel they are blazing new trails, 60-80% of their challenges are common to most entrepreneurs. Recognizing this shared experience can demystify the journey and encourage seeking effective solutions rather than "bludgeoning" through obstacles.

2. Bridging the Vision-Execution Gap Many visionary founders excel at big ideas but struggle with the day-to-day operations—hiring, culture, cash flow management. This disconnect can cause brilliant visions to falter. Conversely, strong operations without a clear "North Star" lead to stagnation.

• SMART Goals as a Roadmap: Translating an aspirational vision (e.g., 5-year strategy) into actionable steps requires quantifiable goals. SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals provide this roadmap.

• Cash Flow as the Starting Point: For founders intimidated by metrics, Schaubroeck recommends focusing on cash flow projections—hitting revenue targets and managing expenses—as an accessible entry point for founders unfamiliar with metric-driven management. Cash flow tells the story of the vision and how it will be achieved numerically.

• Regular, Honest Reporting: Consistent measurement and honest assessment (often starting simply with Excel) are crucial. Avoiding the temptation to "fudge" numbers allows leaders to identify what's working, make necessary small pivots, and prevent minor issues from becoming major crises. Discipline and ownership of reporting are more critical than the specific tool used.

3. The Critical Importance of Delegation One of the biggest mistakes Schaubroeck admits to making as a first-time founder was micromanaging and resisting delegation, believing he could do everything best himself. Effective delegation is crucial for scale:

• It's a Trust Exercise: Letting go allows others to rise to their potential and builds a team effort, moving the business beyond dependence on the founder.

• Enables Founder Focus & Well-being: It frees the founder from burnout and creates the possibility of taking vacations, knowing the business can run without them.

• Unlocks Team Growth: Delegating provides opportunities for team members to learn, succeed, and advance their careers, which is essential for retention in scaling companies.

4. Building Culture and Identifying the Right People Finding and developing the right team involves trial and error. Key considerations include:

• Capacity vs. Worldview: Decide whether to hire junior talent (requiring significant training time) or more senior/fractional experts (requiring careful alignment of worldview and expectations).

• Testing Fit: Using short-term engagements (like co-op students, often subsidized) can be a low-risk way to test the founder's ability to communicate vision and onboard effectively before making significant hires.

• Honest Conversations about Motivation: Understanding what team members want to achieve personally and professionally is crucial for creating win-win relationships. Supporting their goals, even if it means they eventually leave, builds trust and a positive culture.

5. Aligning the Team: The Power of "Why" Team alignment starts with clearly communicating the company's mission and vision (the "Why"). When everyone understands the broader goal, their daily tasks gain purpose, creating cohesion.

• Transparency Builds Trust: Schaubroeck shared being upfront with his team about cash flow constraints and potential layoffs. While stressful, this honesty ensured everyone understood the challenges and goals, fostering a collaborative approach even during difficult decisions like layoffs. He learned the hard way that avoiding transparency or outsourcing difficult conversations (like layoffs) can severely damage morale and trust.

• Consistent Communication: Founders focused externally (investors, customers) can easily neglect internal communication, leading to misalignment. Regular updates and ensuring the team understands the "why" behind decisions are vital.

6. Resource Prioritization: Identifying the Real Constraint When resources feel stretched thin, simply adding resources ("throwing money" or "throwing bodies") without understanding the root cause can worsen the problem.

• Diagnose Before Prescribing: Use metrics, especially cash flow statements, to identify where performance is plateauing or costs are rising unexpectedly. This helps pinpoint the actual bottleneck.

• Calculate Opportunity Cost: Frame resource needs in terms of missed opportunities. If a barrier prevents capturing $5,000/month in new revenue, the $60,000 annual opportunity cost likely justifies allocating budget to solve that specific problem.

7. Fundraising: Prioritize Sales Traction Schaubroeck advises founders, particularly in conservative investment markets like Manitoba, to prioritize achieving sales traction before aggressively pursuing equity investment. Paying customers are the best validation. Strong traction provides leverage for better valuations and terms when fundraising does occur. Raising multiple rounds requires careful consideration of dilution and finding investor partners who add value beyond capital and align with the founder's long-term vision—viewing investment as a "marriage."

8. Staying Motivated: Disconnect and Find Perspective To manage the stress of entrepreneurship, Schaubroeck emphasizes activities that use different parts of the brain: running, skiing, playing the cello, and reading non-business books help him unwind and maintain perspective.

Transcript for Search & Skimming

Below is the complete, searchable text of the interview. You can use the speaker tags to quickly search or skim the conversation for key insights on using cash flow as a story, the importance of delegation, and the reality of raising equity dollars.

Randell Mauricio: How do you really learn to lead? My guest today is Matt Schaubroeck and he says it comes from the mistakes you make along the way. And of course he should know he built his first company from the ground up and then sold it in 2022. And in this episode, he gets real candid about the challenges of being a first time founder, the secrets to building real team alignment, and the power of your cash flow statement to tell the true story of your business. So it's a real honest look at what it really takes. This is freeing the founder.

Randell Mauricio: I, uh, I want our listeners and viewers to get to know you a bit better. What's your origin story, specifically your founder story? What did you do in the past and what led you to creating the value that you create in the marketplace today?

Matt Schaubroeck: Sure. So, you know, Randell, I don't come from, uh, a natural entrepreneurial background or family history. My, my background actually was in politics and then in communications. And I decided at one point to go get my MBA, and that's where I came across the idea of entrepreneurship, which at the time I really knew very little about. But I loved the idea of building something with impact. And so inside one of those courses is where an idea was born that developed eventually into the business IO Airflow. That was the company that I co-founded. I was the, I ran it in different capacities. Uh, took on the CEO role in 2017. Never really looked back. Became a full-time endeavor in 2020, and we were acquired in 2022. So what IO Airflow did, uh, was division at first, was to find ways to reduce energy consumption in commercial buildings. The problem there is that buildings are consuming much more energy than they need to. But they just don't know necessarily where those gaps are. And so we were finding ways using, um, internet of things, technology and advanced data analysis to find those gaps and give them an action plan. In 2020, I quit my day job about a month before the pandemic locked everything down. Really interesting time to be a startup founder and I learned a lot. Uh, we had a team that only continued to grow during that time, and it also allowed us to think entrepreneurially and came across the idea of indoor air quality, which is something that. In 2019, almost no one was thinking about indoor air quality. And all of a sudden it shot up to severe, um, importance in people's minds. And so we pivoted into that space and it was really interesting to work into that new domain, adapt our business into meeting this new market demand. Uh, our team continued to grow, and then we did get acquired by another company. And so I worked with that company for about a year and a half and really enjoyed that time helping to scale that company, uh, based outta Toronto to get their, their foothold in North America, and then decided it was time to come out on my own. And what I loved about being a founder Randell and having that CEO role was to build something of value. And I, I learned a lot along the way. I made a lot of mistakes. And what I realized when it was time for me to think about what I wanted to do as an independent consultant was I wanna make sure that people aren't making the same mistakes that I did, whether I was a first time founder. And that's really the point of leverage of leverage points. It's, it's the purpose of leverage points is that we want to be able to help those founders who have those great ideas, who have those great inventions to grow without worrying about some of those first time mistakes that are all too common.

Randell Mauricio: Thank you for sharing, sharing that and just hearing it a second time or, or third time. But, uh, um, at this point, uh. It really emphasizes the word impact. And you mentioned that a couple of times and what I find really interesting about your story specifically, Matt, is you've been there, done that, you've started a company cradle to grave, and now you're able to step, step back and actually pull from your experiences and it's clear you have depth. What, how does that translate to an advantage for you as you're working with other founders?

Matt Schaubroeck: You know, I think it's, it's the perspective of of precedence where most companies and most founders, they're, especially the first time that you're growing a company, feel like you are blazing a new trail. You're going into uncharted waters, uh, blind and no map. But in reality, you know, with a little bit of context, you'll realize that. 60 to 80% of those issues are faced by almost every founder almost every time. There's a lot of commonalities here, but because you are feeling so new in that role, it feels like a unique experience and that can create some barriers to even just asking for help or understanding that there might be an easier solution than trying to. Bludgeon your way head first into, into a path forward. And I think that experience and that expertise has given me the capacity to come in and show that there is a way that is more painless, it's easier, uh, but still brings value to those founders, right? They're not feeling like we're pulling them away into a direction they don't want to go, because we still are bringing that, that entrepreneurial, that founder mentality that I think is so important. You know, being a founder is a unique way of seeing the world. You can't grow a startup unless you're coming with that mindset first.

Randell Mauricio: So let's talk about vision. This is the common ground you and I have. We both understand the importance of having a vision, making sure it's shared by all. Why is this such a crucial step to take that vision and then translate it into an actionable strategy, an actionable plan?

Matt Schaubroeck: You know, and, and I know you know this well, Randell, but if anyone had an easy answer to this, we would all be doing a lot better, I think, as individuals and as a society. But, um, really there, there are. Brilliant visionaries out there who are building incredible technology and products and services, uh, and those minds just aren't necessarily well attuned to the day-to-day organization of a business and operations plan. Hiring strategies, culture. Cash flow management, all of these things, they require that certain expertise that someone who is, you know, brilliant technician in their field, they might not be trained or might not have the confidence or even the will to want to engage in that side of the business. And so when it comes down to that vision, it can fall apart so easily if those foundational details are not being dealt with. Now. On the other hand, if you are really good at those foundational details, but don't necessarily have that north star on where you want to go, it feels like you're treading water. So it is important to have that combination of, of both. And sometimes we're helping our clients find their North star. Other times we're helping them with those day-to-day operations. It's finding that balance as a way to create that catalyst for growth. That's the success story.

Randell Mauricio: You know, it was, I just listening to you, it made me think of an experience I had just yesterday. I belong to a mastermind group and we were meeting, uh, just yesterday about how we were talking about, uh, a spec, very specific operational framework. And, and there's many of them out there. Uh, but I can see the faces as I looked around, uh, this group. They're spinning their wheels, and that's not judgment on them, but they're sitting there feeling overwhelmed. They know they're busy. They know that they have to implement and adopt this operating framework. Even though we all have access to the how, and we have documents that I'll say, you know, do this. Step one, step two, step three. I sometimes find that in my interactions with other founders, they are looking for a how, for the how. And sometimes I, I take a step back and say. Are we complicating it now as opposed to getting started? But the fact is it is overwhelming and there is a lot to do and sometimes without, before you even get started. We're we, we find this problem manifesting in our minds. Do you see the same thing?

Matt Schaubroeck: Not every client is ready to commit to working on the business when they have so much time that needs to be spent in the business. But if we can find the tools to coach and support and help 'em understand the value of what that time will give back to them, uh, then that's where they'll start to really see that value.

Randell Mauricio: Yeah, easy to agree with you there. As I was forward to our conversation today, I was trying to map out what are some key things that we can empower others with, and here's three. I'm sure there's plenty others, uh, smart goals. Accountability tools and the skills slash leadership to be able to delegate effectively. And so let's dig into each one of these, starting with smart goals, uh, in your perspective, Matt, uh, what kinds of strategies can companies and founders use to, to make sure that those objectives that they're setting out as goals actually ladder up to the broader vision of their, uh, of that, uh, of that organization?

Matt Schaubroeck: Absolutely. And Randell, you know, as you said, there's a lot of different playbooks out there that people could use and you know, there's no bad framework necessarily, but I think the any good framework is going to start with that high level vision, whether it's a five year strategy. Or a one year vision. Uh, just being able to think about the future and where you want to be, something aspirational. And then you need to create a path backwards in terms of how you're going to get there. And that's where smart goals will give you some quantifiable tools that will allow you that roadmap forward. And if you're not measuring it, then you don't know. What is going to lead to success or not? Uh, smart goals I think, are so underrated, particularly when it comes to scale ups, where it feels like you just need to be nimble and agile and you're pivoting all the time. Uh, and that's fair. You know, that does have to happen at the early, early stages of a company. At some point, you need to have your North Star and you need to start focusing on that aspirational goal on where you want to be. There might be some change in there at, you know, certain moments in time that will require some small changes, but ultimately you do need to start driving towards a specific direction. The only way you're going to know if you're going in the right direction is if you're implementing some, some, well, some. Metrics that you can measure that are time bound and accurate and speak to your business and the work that you need to do that you know will drive the.

Randell Mauricio: I am trying to put myself in the shoes of the listener or the viewer of our conversation, and for those of you who might. You wondering, well, what is a smart goal? Let me break it down for you. Uh, that is an acronym specific, measurable, actionable slash achievable. I've seen both of those, uh, used for the a, uh, realistic is the RNT is as Matt, you had mentioned time bound and all good parameters to make sure that you're getting traction and that there is, um, a chance of you holding each other accountable for satisfying these goals. Matt, in my experience. Uh, and I, I have to admit that whenever I've tried to use smart goals, I sometimes get pushback, and that's healthy. That's natural because for an organization who is not necessarily used to a culture of accountability or a culture of measurement and improvement, this may rock their world. And so just from your perspective, what are some easy ways to manage that change?

Matt Schaubroeck: I think a smart way of thinking about smart goals if you're not used to measuring yourself on, on key metrics is your cashflow projections. Uh, you know, cashflow is a really wonderful metric and making sure that you're hitting your revenue targets, making sure you're staying on budget for your expenses. It's meeting all the criteria of a smart goal while putting it in a language that any founder will understand into the dollars that they need to keep those lights on. And so. I always think, you know, financial projections, they scare a lot of founders, particularly those who, who don't necessarily come from a business background. They feel overwhelmed by what the numbers could mean. But what the projections really are is it's a story that you're telling and it is a way for you to put some numbers behind the vision that you're wanting to sell and how you're gonna get there. They, they're exactly the metrics that you are looking to realize, and there's a lot of other things underpinning that. But I think if you want to start thinking about that smart goals and metrics based mindset, just start thinking about. What your break even point is every month. Are you meeting those targets? How are you meeting those targets? Eventually that will evolve into a full set of smart goals. But even just starting with those few things, everyone when it comes to an early stage company is hyperfocused on those dollars as well. They should be. It's a really great way of measuring that growth.

Randell Mauricio: I love that you used the word story because it does tell a story. And I also, I, I like to personalize whenever I'm working with an organization, I like to make it as personal as possible. And so, to give you an example, just today was doing a kickoff, um, for, for. A, a set of co-founders and the exercise was really just thinking ahead. What does the, what does your organization look like three years from now? And you can pull and extract so many stories there. And I think that really resonates with the heart and the mind, and especially for the founder who. Let's face it, a lot of founders are emotional, and maybe emotional is not the right word, but they're very intuitive and they have these visions that they can see that, and that's their super skill. They that, that most people cannot access these visions. Anyhow, the point I'm trying to make is. love interjecting and, and weaving in the personal side into the business planning because I think that's really, it's been really helpful in motivating that change and that action in an organization who re, who needs to help the most.

Matt Schaubroeck: Absolutely agree. And yeah, thinking of stories, I think part of the story that a founder needs to tell is that story that's in their own head. And sometimes that just gets lost in translation and smart goals are a really effective way of doing that because it's a path to towards that. That aspirational future that the founder wants to achieve. And so, you know, by having someone come in and asking those those tough questions on, "Okay, you know, you want to build this hugely impactful or hugely successful company, how are you going to get there? How do you see a path to success?" And if the founder is able to communicate that in a way that is understood by the rest of the team, that's the other value of smart goals. Everyone all of a sudden starts understanding. What the goal is, and it's sort of moving towards that same direction, right? There's a unified approach. Everyone understands the need, the rationale of why they're doing what they're doing in every department in every day, and that will create the cohesion that is needed to build towards that future. Without that, the founder might be saying something that is completely misunderstood or misinterpreted by other people on that team, and that's where you get that disconnect that causes other troubles later on down the road. So start. Early with key measurements that will bring you that alignment that will lead to.

Randell Mauricio: So how about a dashboard slash scorecard? And I know there's probably a dozen other words that other founders and frameworks. Would, would, would use to describe this, but what tool do you use to make sure that you have, are looking at one place or one to two places to access all of the measurables?

Matt Schaubroeck: You know, we don't use a, a, a specific dashboard. That's tends to be just something. Honestly, Excel, uh, is my best friend. Uh, in the early stage of a company. It's so easy to build up those metrics. Uh, you can report back on every month. I think the, the key there is to have regular reporting and to be honest in those measurements, it's so. Attempting to want to hash the numbers and to fudge things to make it look good. But really at that early stage, if you are reporting on internal measures, uh, on a monthly or whatever regular basis, that is giving you a lot of insights into what's working and what's not, and allows you to make those small pivots where needed to achieve the success you need if you are faking the numbers and then six months down the road. That small shift could turn into a, a much bigger crash. That's gonna take a lot more time and a lot more resources to fix. And so, uh, yeah, uh, however that, that is displayed, I think the most important thing is it becomes a regular part of your conversation at the leadership or the management team that people understand what you're measuring, how you're measuring it, and what that measurement really means.

Randell Mauricio: I'm gonna double down on your answer. It made me think back to a recent conversation again, a group conversation that I had with other, uh, founders, CEOs, leaders of their businesses, and one of the questions was, what tool should I use to make all of this cohesive? And we got answers were frankly all over the spectrum, anywhere from. Google sheets ninety.io to whatever, and again, to the point I made earlier, there's dozens out there. But at the core, and this was my, this is my belief at the core of it, is if you don't have the discipline, if you don't have a, a centralized ownership and, and, and accountability to actually commit to this. Frankly, it doesn't matter what software, what platform you use, because you're missing the foundation. And so I would always double down on making sure that it's clear who is owning it, who's own, who's owning the accountability and making, uh, serving in the role of glue, if you will, for that organization.

Randell Mauricio: Matt, let's transition over to delegation. Uh, delegation to me personally is something that I. Give a lot of respect too, because in my opinion, it requires leadership and personal capability. You know, we're living in a world of AI and as, as great as that is, AI cannot do delegation for me. AI cannot do leadership for me, at least not yet. So that's comforting. But, but in your. In your opinion, how important is delegation and and what type of dynamic have you seen to work really well inside a a, a growing and scaling organization?

Matt Schaubroeck: I think this is such a good question, Randell, that you're asking because it's something that I think a lot of early stage companies don't talk about enough. It is a very humbling experience as a founder. To finally admit, "You know what? I might not have the capacity, or I might not be the person who has the right skillset to take all of this on myself." And I know as a first time founder, this is one of the biggest mistakes that I made. It, it almost comes to the point of micromanaging where you're wanting to be involved in all parts of the business. It's doing two things. First, it's burning you out. Second, it's not letting others rise to their leadership potential. And I think at any stage of any organization as a founder, as a leader, the best thing you can do is give your team the space to be the best versions of themselves that they can be. And delegation is a huge part of that. It is a trust exercise. And so. Even though it can seem scary, even though it feels like you can do it better yourself, which is probably true at the start, delegation is a long-term goal for you to have the peace of mind that this is growing past just yourself. That this is something that is becoming a team effort. That this is becoming a institutional reality. And by the way, it's also gonna be the reason that you are gonna be able to take vacations at some point, because otherwise you're stuck at your desk because no one else can do that job. Okay.

Randell Mauricio: And I, and I also like the perspective that the more you are willing to delegate, the more that you do it, the more opportunity you give that person to grow and succeed and learn new things. And I remember the, the. The point in time of a company, there's a very, there's a very. What is the word I'm looking for? There's a very stark difference between the team dynamics, cultural dynamics of a company in start versus grow versus scale. And the expectations of the team are vastly different. I have a pioneering team, let's just say, you know, my team was five people wide. A very different expectation. I, I, people are highly intelligent, the people around you, and they're gonna know that this is a, a company in start mode. The expectations of a company in scale are gonna be different. That employee, that team member, whether they're a key employee or not, they're gonna be thinking about what? What is the balance? What is, what's in it for me? What, what's the next step in my career? Cannot unlock that if you, the founder, are not willing to let go and let others learn and make their own mistakes.

Matt Schaubroeck: Yeah, I think that's a really important point that you're raising and, and, and part of it for me is, is asking the question, "You know, what, why are we building a business?" Certainly, you know, having a comfortable living for ourselves is part of it. Although arguably there's easier ways to make a comfortable living than trying to found companies. We do it for the passion, but we're also doing it to leave a bit of a legacy. I think that there is something to that. We we're looking. In some way to build something that is having a greater impact than what we can achieve just on our own as an individual. And part of that I think, is training and mentorship and helping others to align with us in our vision of reality, but also training them up to, um, perceive the world as we do. I think that there's something really valuable in that. There's a cultural aspect to that as well, but certainly I just think from the operational day-to-day side of a business, a good leader is delegating so that. That impact can grow faster than they ever could on their own. And, uh, you know, again, it's, it's so easy to say, "Well, no one's gonna do it as well as I can." That very well may be true. But if you have a team of 20 people doing it, 90% as good as you, that's just gonna be a greater ROI overall than something that you would just have, you know, a hundred percent just you for the rest of your life. You're not gonna achieve the scale that you really want.

Randell Mauricio: I love that you mentioned culture, because culture is the other side of that story. There's two sides on that fence, and let's assume that in this case, in this imaginary case, the founder or founders. doing things correctly. Uh, yes, they're hands on. They're holding themselves accountable. The buck stops with them, but they're also balancing, uh, a healthy balance of delegating and letting others succeed as well. So let's assume that is written in stone. How does that founder now develop the intuition or the criteria to assess if they have the right people on board? Could you elaborate on that or share any anecdotes?

Matt Schaubroeck: You know, I, I, I think part of it is trial by error. Uh, I certainly, you know, I've made bad hires and I've, I've regretted those decisions and I've, you know, invested time in people that didn't necessarily work out, and I actually don't view that necessarily as a bad decision. As a leader, it's important to go through the whole gamut of culture, hiring, mentorship, to see what works, what doesn't, what you're looking for, what type of dynamic. That works for you and works for the business and, and others that don't. And so as part of, as part of that culture, uh, it's asking yourself, "Do I have the time to bring on someone in-house? Is that person going to be junior? Am I looking for someone that can work a little more independently?" Uh, if they are junior, do I have the capacity to train them in the way that I want? To, you know, have them perceive the world. Uh, there's a certain investment of time into that. On the other hand, if someone's coming in at a more senior level, or even someone who's coming in as a, as a fractional, uh, that is coming in with a certain worldview of a certain expertise, that can take a lot of time and effort off of your hands. But also there might be some translation gaps in there. And so there's always that balance in trying to figure out how you will maintain the cultural. Vision of what it is you're wanting to grow with the need to grow, uh, in the realities of business in the way that, uh, you know, that that scaling needs to happen over the long term. So I, I do think that a founder needs to think about those things. Uh, I think the best thing you can do is, is to just try, like hire a co-op students, bring in someone, see if that is working for you. Uh, even just as an exercise, if someone's on a. Four month term or something like that. And by the way, there's great, you know, financing opportunities where you can hire a co-op student and get reimbursed. It's, it's, it's worth your time because it's a litmus test for you as well. Can you communicate your vision? Can you communicate your action plan? Can you onboard someone else so not only they understand you, but can start to help you achieve that vision? If not, there might be a communication gap that you have to address first before you even think about bringing on more capacity in house or finding someone to help you to make that a reality.

Randell Mauricio: Uh, you mentioned the word capacity, and I wanna segue there, but before we do that, I, I, I would love to share a personal anecdote that is somewhat related to your, your response. And it made me think about all of the. Tuition, the dumb taxes, the mistakes that I've made over the last 15 years. In, in, in. And I'm specifically talking about that dynamic with staff member, with the team member. What I've found out in as, as a company, goes from start to to grow to scale, I mentioned it earlier, is the motivations change. And one of the things that I personally learned in the last couple of years that I wish I knew when I got started in in the corporate space was motivation matters and having honest conversations as humans just. Put the facts on the table. "This is the vision. This is what I'm interested in achieving. This is what the company's interested in achieving. What is it that you want to achieve?" And that doesn't have to be abrasive. It doesn't have to be combative or divisive. It just can be honest because I, I believe that the best partnerships, if you will, I know that sounds cliche, but the best relationships are ones where. They're win-win, and I think it's totally okay at from an employer's stand standpoint and from a founder's standpoint, it's totally okay and healthy to have that healthy realization. "I cannot achieve this for you. So if I cannot help you achieve your goals, let me do the bare minimum, and that is to support you achieve whatever it is that you want. And whether that's in here, in here, in this organization or another, I'm gonna help you." So I put that on the table. Um, a would love your reaction to it, but just listening to you speak, I, I think there is value in being human and being supportive of one another regardless if that person stays with your organization for the long term or not.

Matt Schaubroeck: Absolutely. You know, I, I love that you're bringing this up because I, I think, again, it's, it's a humbling thing to admit that you don't necessarily, as that founder leader, uh, have the answers to everything. Now, you know, from, from my personal story, I, IO Airflow was a data intelligence company. I'm not a data analyst. I don't know how to code. I also knew very little about building science coming in. I was not a technical founder. I surrounded myself with technical people and they were all better at their jobs than I could ever be. And that is the way that I wanted it. That was by design. 'Cause otherwise, uh, I would've had to do all this myself. So delegation as a part of that was having the data analysts give them the vision. Help them understand the business side of the coin and then work alongside them to help achieve that, that common goal. But ultimately, they outstripped me on any number of, of scientific measures, and that is what allowed the company to grow so successfully. Uh, they weren't feeling constrained or bootstrapped. They were given the time and the flexibility and the trust to move forward, and that is ultimately what led to their success.

Randell Mauricio: Amazing. That's my cue. Now to transition over to capacity, because you mentioned resources. How do you plan appropriately? And that actually was my question. Um, how can businesses effectively identify and prioritize the critical resources when they already know? We already know they're already. Feeling like they're stretched too thin. So what are some strategies that, uh, you found to work.

Matt Schaubroeck: I think some of those strategies really start with, um, understanding when you were just treading water or you're pushing up against a bit of a ceiling. And I think that happens several times over any organization's lifetime when, uh, they've kind of plateaued and the revenues are stable and the expenses are stable. But you understand there's an opportunity for more. The how and the what. On how to achieve that growth. Just kind of alludes that, that team. And so maybe it's bringing in an outside perspective, maybe it's bringing in some fractional support or even an in-house hire, but understanding what that need is, where the gap is that is preventing that growth, if you can identify that barrier and putting some resources against it. Um, I, I do think it's important though from a resource side to really understand what the constraint is before necessarily just throwing money in. There are unfortunately a lot of people out there who will. Take a founder's hard earned cash and not give the advice that's really needed. You need to understand really what your problem is and make sure that whatever, um, resources and support that you're bringing in it is to solve that specific problem. So having a critical eye on the organization is really helpful and critical can mean. You know, understanding the block to an opportunity for growth or something that is holding you back either way. Uh, if you have the humility and the critical thought process to be able to identify that, that's where you'll be able to throw some dollars into something targeted that is more likely to yield an effective ROI.

Randell Mauricio: I agree with that a hundred percent. I, there has been probably three or four times in my career, the last 15. Years where I can it, like the back of my hands where my initial reaction was, throw bodies at it. But my wiser, smarter reaction or reflection was if I don't understand what the root cause is, I'm only gonna multiply and exasperate the situation. And that problem, this chaos that I'm feeling right now is only going to multiply. And so, hands down, agree with everything that you had mentioned there. Uh, one of the. Keys that what was critical for me at least having run the shop that I ran in in the last 15 years was having a pulse and visibility to how the resources were actually being deployed, scheduled, how many hours I have, so on and so forth. Do, do you have any experience or insights with, with, um, actually measuring the, the resources that you have so that you can then decide how it's used effectively?

Matt Schaubroeck: I mean, I, I think from a resource gap identification, it comes back to those metrics. And for me it was always the cashflow statements, right? Like, where are things plateauing, uh, where are expenses increasing? What is causing those to happen? Uh, and then if that's something that we have the capacity to deal with in-house, great. If not, what can we do to address that further on down the road? It's, it's, I think. You know, again, you, you don't, you don't know what you can't measure. And so part of that, in order to identify the need was really sitting down at a pretty regular interval and having the honest conversation about what's working. It's really easy, I think, as a, a startup or any, any organization to have the blinders on and say, "Everything's going great. There's no problems here." And if there's a problem, I'm just not gonna say anything. 'Cause I don't wanna be embarrassed by it. Uh, that's gonna be your biggest constraints to growth. And if you can identify something. Share that with everyone else, that's when you're gonna be able to identify the gap and throw some resources behind it. So measuring really, I think, you know, goes back to those goals and, and finding where the opportunities could be if only there were some resources behind it.

Randell Mauricio: And even if the company feels like it's plateauing, you don't have dollars, you don't feel like you have dollars to, to throw into a problem, uh, take the time to do that calculation. You know, if you're missing out on. $5,000 a month because there's a barrier preventing you from unlocking, you know, one or two additional clients. Think about it in those terms. That's $60,000 a year. I think you can probably unlock a little bit of your budget for that.

Matt Schaubroeck: Very good point.

Randell Mauricio: My next question, I realized that earlier on in our conversation, I had put the cart before the horse when we were talking about change management. Um, so here we are. We've, we've talked about smart goals, uh, accountability tools. We've talked about delegation at this precise point. At some point in this journey, the founder will then realize. How do I get the team on board and which brings us to the next subtopic, which is team alignment. Matt, in your experience, what are some best ways or the key ways that we can get the team not only onboard, but really, really bought in?

Matt Schaubroeck: I am a huge fan of Simon Sinek. This idea of the Golden Circle, starting with why it is, it is a North Star. I've used that term before already in this conversation, but having that North Star helps everyone to understand what it is that we're all working towards, and everything starts from there. The leadership needs to be able to effectively and clearly communicate. The mission and vision of the organization is once you get to that point, you're going to be able to start to create that, that execution, that action plan where everyone understands what their tasks are on a day-to-day basis, individualized to them, but also in pursuit of that, of that broader goal. And, um. It's so easy, I think, to become siloed as, as a founder, as a leader, where you have that vision, you're focused on the vision, you're talking to investors. Maybe you're talking to customers or other partners, but you're not focused on the inside. And that, that misalignment can happen so easily. And if you're not taking the time to make sure that everyone understands where you are, every step along the way, um, it can, it can go off track real quick.

Randell Mauricio: I'm, I'm gonna double down on that again. Uh, I can think back to recent days when, uh, back to my mastermind we were talking about how do you establish. Trust your leadership team. And it made me think about, in, in, in my experience, how initially we had started with only the senior leadership team or only the executive leadership team. In short order, we found out, we realized that there was a trust gap or at least a communications gap. And that's how the. That's how it was manifesting. There was a lack of communication that we felt was healthy and, and there just was not enough of organic, honest, uh, dialogue exchange. And so what we did was we harmonized the leadership team meetings. And again, there's a lot of other, there's a lot of operating systems there, and so no need to go into that, but just the, the bridging that gap making sure that a, they were represented. And B, had they felt as if they had a way to contribute and be heard. I, I tell you, Matt, 12 months down the road. It was as if that trust issue, that trust barrier was fully lifted. Now, did we have, did we still have room for improvement? Absolutely, because what happened 24 months down the road was absolutely wonderful, but just in, in, in that same fiscal year for that leadership team to be able to establish that trust and the weight lifted off of it was really something remarkable. Any, any experiences similar to that?

Matt Schaubroeck: Absolutely. You know, and, and I'll tell just a personal story, I think, um, as IO Airflow was, was growing, I, you know, there was cashflow constraints. Often something every founder probably experiences once or twice where you don't necessarily know where the next payday is. Going to come from. Um, and I had a choice, I think, and I, I, I chose to be pretty upfront with my team and said, "Look, you know, here's our goal by the end of the quarter. If we don't meet that target in terms of our sales projections, then we're gonna have to make some tough decisions and we might not be able to continue at this, at this rate." It was a hard thing. I think it put a lot of pressure on people, and you never necessarily want to have people. Worried about their future. It does create some stress. But at the same time, what I found in that experience was people understood what we were up against and some of those things were within our control. Some of those things were beyond our control, but at least everyone understood what we were trying to do. They understood that everyone was working as hard as they could to towards that expected future. And ultimately, you know, we, we were quite successful, but there were some bumps along the way, and we had to have some times where those hard decisions were to be made. Having that clear communication allowed us to take a whole team approach to those difficult conversations. Those are not fun days for anyone, um, anyone who's involved with them in any capacity. But if you have at least communicated clearly upfront, it makes it a little easier to help navigate that from a place of trust and understanding, even if it's a hard conversation.

Randell Mauricio: You are absolutely right. That is not a fun conversation to have and I, I can also recognize and acknowledge why a founder or business leader may shy away from that and to, to avoid the conflict as opposed to just get finding the best way through it. So intrigued. I wanna ask you, Matt, in, in that example, did you find most people responded by saying, "Yes, I'm on the bus," or "No, I'm off of the bus?" Because you were so transparent with our situation,

Matt Schaubroeck: I'm gonna, I'm actually gonna share a mistake that I made in one of those times. There was one moment in time where we had to, to lay off some folks on our team, and that was a really hard day, and I wasn't sure that I was the one to have the conversation. Now, I, uh, at that point hadn't been as diligent about. Communicating everything upfront through that process. And then there are companies you can hire out there to help you with that offboarding process for employees. And I hired them and honestly. It was botched. Uh, the communication was not clear. People were really upset. They felt blindsided by it, and I kind of made a promise to myself at that point that I would never let that happen again. You know, you're taking on responsibility as a leader. I think when you are hiring people, you have people's livelihoods, um, that you are responsible for, and. It is important to take that seriously. And so, uh, that is where I learned the importance of having the clear communication. And then, you know, subsequently there were other times where we needed to have some offboarding, but people were much more understanding and they were making choices on their own, about their own career and their own approach. And a lot of people, they chose to stick it out. Uh, even though they knew the writing might have been on the wall, they stuck it out until the end. 'Cause they believed in what might happen and they believed in, in, in. You know, the potential of the upside. And that didn't always happen in every case. Um, and in those times, those people, they went out with their heads high and knowing they contributed to something that was really special, even if it didn't work out the way we wanted it to work out, um, it still was a whole team collaborative approach and I think that's really special.

Randell Mauricio: That's a level of humility that only the truest leaders have attained. So thank you for sharing that, Matt. That's excellent.

Randell Mauricio: Hey, tell you what, uh, I'm watching the clock here. Before we, uh, draw to a close, uh, I, I'd love to try something fun with you. Didn't tell you about this, uh, in advance, but I'm gonna call it the lightning round question. So feel free to keep your. Your answers as as brief as possible or elaborate if you like. And so there's only five. If we get through all five, I'll be happy if we get to one or two. Great. So here we go.

• Number one, what's the biggest misconception people have about scaling a business?

Matt Schaubroeck: Um, once you have your first customer, the next 10 are easy.

• If you could only give one piece of advice to a new entrepreneur, what would it be?

Matt Schaubroeck: Focus on validation first. 80% is good enough. Don't wait for a [perfect product].

• What's one book or resource that has profoundly influenced your approach to business?

Matt Schaubroeck: Crossing the Chasm by Moore. Foundational book in [tech adoption].

• What is a common mistake you see businesses make, um, uh, when they're trying to grow?

Matt Schaubroeck: Uh, trying to get equity dollars rather than focusing on sales.

Randell Mauricio: That's making me pause. Let's, let's dig in. Focusing on equity dollars as opposed to, okay. Outside money,

Matt Schaubroeck: I'll give you, I'll give you, I'll give you a little more on this one. So I think particularly in Canada, so it's a little more of a conservative market. And in Manitoba, the, the investor community is, is quite small and not necessarily as sophisticated as we hope it will be in the future towards tech companies understanding tech business models. Uh, so as a result, they're a little more conservative and a little more risk averse. And so if you're trying to raise investor dollars here. One of the things they're going to be looking for is sales traction. That's not true in every jurisdiction, but uh, it is something that will help any company. The best validation you can have is people who have opened their wallets to give you money, and particularly if they've done it over and over again. And the more companies like that, you have the greater chance you are going to have of, uh, going with high traction to unlock investor dollars at a higher valuation. Which is just nothing but good for you. So if you had six months of runway left and you thought, "Well, this is the time to raise investor dollars," rather than focus on sales, I'd encourage you to do it the other way around.

Randell Mauricio: This is really interesting to me, so forgive me that I'm going down this route. Rabbit hole. But in terms of, uh, dilution and valuation, what's your stance? Like, how do you find that right balance? Because if you're a SaaS company, yes you need, you need that cash injection. But if you're not a SaaS company, hey, you can hold up for much longer, develop your own, uh, um, organic valuation. where do you draw the.

Matt Schaubroeck: Yeah, I mean, coming down to the, the governance and control side of valuation is something that we don't often think of. We think, right, like, I'm gonna raise this money. Sure. I'll only own, you know, 51% of the company or less than 50% of the company over time. Uh, but that's okay 'cause I have the money I need. It's not just about the money, right? An investment is, is a marriage. I mean, it is a legal contract in a lot of ways. That is as hard to get out of as a marriage in a lot of, in a lot of ways. And so you wanna think about the value that they're adding and also thinking about what that relationship is going to look like. Uh, and in some cases, that relationship is not necessarily going to be good. They can be a hindrance, they can be a barrier. They can prevent your growth. And if you are looking to raise multiple rounds, uh, overly diluting yourself can have a negative impact on subsequent rounds. So it, it is a balance. That being said, uh, I know that there is, you know, a very aggressive idea to non dilution in a company that makes sense to me in theory, but the reality of a situation is the company is worth. A lot of times what an investor is willing to pay for it. So as much as there is that balance, um, you know, 30% of $10 million is more than 90% of $500,000. And if that investor can help you get to that first figure, that's something to consider.

• Final question in this lightning round, how do you personally stay motivated, Matt? Uh, and how do you personally manage the stress of running and growing your own business?

Matt Schaubroeck: Love this question. Uh, doing things that don't involve a screen running, uh, in the summer, cross country skiing in the winter. I play cello for fun. Uh, just trying to use different parts of my brain that don't involve business plans really helps me to unwind, relax, and, uh oh yeah. Reading non-business books.

Randell Mauricio: Is that a thing? Really? I haven't done that in years. I'm gonna have to follow suit and the cello one, that's a surprise for me. So I'm gonna have to take a rain check there and see to bust out some tunes.

Matt Schaubroeck: I started as an adult, and you can too.

Randell Mauricio: Okay, thanks for the tip, Matt. I wanna make sure that you get the, uh, last word in any, for the viewers, the listeners, uh, consuming this content anywhere you'd like to. Direct them. Any, any pieces of, uh, resources or content that you would suggest?

Matt Schaubroeck: You know, that's a great question, Randell. I, I, I think I'm not necessarily gonna plug my own, uh, company here. I think we're, we're happy where we are, but I think if you're looking to, to grow a business, there's great resources out there. I think some books we talked about Jeffrey Moore, we talked about Simon Sinek. Uh, there's some just some really good, um, resources out there. But I think the best thing that anyone can do in terms of wanting to grow a business is to connect with others and find a way to network. You know, you've mentioned. Mastermind group. Uh, finding those kind of professional networking organizations, CXO organizations, peer support, these are all ways I think that you learn so much about others and also find that you have a lot of commonalities between you as well. So wherever you are, I'm sure that a group like that exists on the off chance it doesn't. You might be able to create one and become that center point on building a community of founders. I think that's probably one of the best ways that you will find growth.

Randell Mauricio: And, and for the listeners out there, I can tell you firsthand that Matt is speaking from a place of authenticity because as of, I don't know, three, four weeks ago, Matt and I did not know each other. And so here we are doing this podcast, doing this interview, and I can tell you that every time I connect with him, I learn something new. So Matt. It has been an absolute pleasure. All the insights that you've shared. In my opinion, you've made a massive contribution. I'm gonna be forever grateful and forever looking for ways to reciprocate because this cannot be the only time that we do this.

Matt Schaubroeck: I agree. I'm already looking forward to the next one. This was really fun, Randell, and I'm, I'm glad to get to know you, uh, and your, your methodology and your philosophy a little bit better as well. This is really excellent.