We’re starting a new series on the EcomCrew Podcast today. This series is called Traction, inspired by a book I read recently which had a tremendous impact on me and my business, so much so that I’m applying the principles laid out in the book to my own company. I’m documenting the process in this podcast series so that you and your business could benefit from my experience.

I’ve mostly been an entrepreneur for as far as I can remember. When I was 18, armed with a box of business cards and a pager, I started my own company called Discount Computer Consultants. One of my clients hired me and I got a taste of the corporate life. After that stint I went back to being an entrepreneur and have run various companies since. Through all those years, I noticed that there’s one thing that kept repeating in all the companies I’ve run or been in: as the company got bigger, things just started falling apart.

As I run my current company, I’ve tried my best to avoid the same thing happening especially as we keep on doubling every year. Experience has greatly helped me on this front, but something kept nagging at me and I couldn’t quite put my finger on it.

Until I read Traction.

Traction: Get a Grip on Your Business is a business book written by Gino Wickman who developed a practical method for businesses called the Entrepreneurial Operating System, which aims to help entrepreneurs keep their company on track to achieve lofty goals. We certainly have lofty goals for Terran and Traction is already helping us get there.

This episode is the first of many dedicated to Traction. Here are some of the things I discuss:

  • How I started in eCommerce
  • The problems most companies face as they grow
  • Introduction to Traction and the Entrepreneurial Operating System (EOS)
  • The importance of sitting down and writing your company’s core values
  • Our company’s 7 core values and how we came up with them

We’ve slowly began rolling out the Entrepreneurial Operating System in our business and we’re already seeing big improvements. I’ll continue to cover our progress in this series of podcast episodes, and if you have any questions, just comment down below.

And speaking of comments, once you do leave a comment on this episode, or on the previous episode, you get a chance to win a limited edition EcomCrew mug! Just leave a comment by the end of the week and we’ll ship you your cool mug anywhere in the world if you win. Check out how fabulous this mug is here.

We’re also running another webinar on May 16th where Dave and I will be talking about our Amazon launch strategy. We’ve talked about our strategy many times both in the podcast and blog, but this is the first time that you can ask us as many questions as you like, as we provide ample time for Q&A.

Resources mentioned:

EcomCrew Webinar
Traction: Get a Grip on Your Business (Amazon afiliate link)
E120: Getting Fired From My Own Company
Basecamp
Who Moved My Cheese?

Thanks as always for supporting the EcomCrew Podcast. Don’t forget to post your comments down below to win your EcomCrew mug! Until next week, happy selling.

Full Audio Transcript

Mike: This is Mike, and welcome to episode number 138 of the EcomCrew Podcast. You can go to EcomCrew.com/138 to get to the show notes and comments for this episode. And this episode we’re bringing back the free mug contest. All you got to do is go to EcomCrew.com/138, leave a comment and you’ll be automatically entered to win a free mug. We’ll ship it to you anywhere in the world.

It’s a cool mug with the EcomCrew logo on it. You could be thinking about EcomCrew while you have your morning cup of coffee. We’ll hope you leave a comment on this. We’re trying to get more people to comment on the blog. So don’t just say I want to mug. Let us know some interesting comments about the episode. Again we’d love to hear from you.

And this week, we’re going to be going over Traction which is a book I’ve been talking about quite a bit on the podcast and in my business late these days. It’s a really interesting thing sometimes when you come across something that’s so profound that you know almost immediately that it’s going to change your life. And that’s actually what’s happened here with Traction. I’ve been running businesses since I was 18.

My first business was doing computer consulting for home computer users. On my 18th birthday, I remember pretty clearly as best I can from all those years ago going down and opening up a bank account and getting some business cards printed with my beeper number on them. And I was in business with my first business, and did that for several years until one of my clients — I started doing more corporate stuff later on in that journey.

And one of them ended up hiring me and that’s what I did for a while in my corporate life for seven years before getting back into entrepreneurship. But I digress. I mean, the business journey has been a long one and there’s definitely been some consistent themes or challenges, or problems that I faced through that. Traction has helped solve so many of those, and I can feel a sense of urgency and just excitement in the office and in organization now that we’ve been able to do this.

And over the next series of episodes, we’re going to be breaking down each part of the Traction process, getting real behind the scenes under the hood look at exactly how we did all that. And it all starts here with this first episode right after this break.

All right guys, welcome to the first of many episodes about Traction. Let me give you a little bit of back story before really digging into this. So I’ve been running businesses really since I was 18. I started my very first business I always joke with a box of business cards and a pager because that’s literally what I did. While I was still in high school on my 18th birthday, I went down and opened up a bank account, a business bank account with a couple of hundred dollars.

And then went from there once I got my check book down to a local little like search speed I think it was called, I forget the exact name of it. But it was like business supply store/ printing company and got a box of business cards made. Actually I guess the first thing I had to do was go get my pager. If you remember having a beeper, I think I did that first because I had to get the beeper number. And once I had the beeper number, I started a company called Discount Computer Consultants.

I still remember that company. I knew that I wasn’t going to be going to college, and I needed something to make some money. So I started hustling, helping people build computers, and helping people with that at a very young age. And one thing led to another. I eventually ended up with a corporate job from one of my clients hired me that I did for seven years before getting back into entrepreneurship.

And that corporate job was really helpful because I got to see a large company or what became a large company grow as I was there. We started when I was there I think. I was somewhere between employee 30 to 50, I’ve a forgotten exactly now. I feel like I was around 31 actually I think about as my extension was 131 and it started at 100 and then 101 the first. And then as they hire we just kept on adding to that that phone tree. So I think that I was about the 31st employee.

And when I left we had more than 200 people there over the seven years I was there. It was a fun ride. I really enjoyed it. I learned a lot. A lot of things I learned there came in handy as I started my next company doing online poker. Affiliate marketing eventually got to 66 employees. And I started noticing a lot of things repeat themselves over and over between that company and the next thing that I did and next thing that I did, and eventually in e-commerce.

And I could never quite put my finger on it. I never just quite understand exactly the dynamic why as we got to be bigger, things started to fall apart. Like instead of getting bigger and stronger together, we always seemed to kind of get more disjointed and just like I said it’s kind of fall apart. The wheels will come off the bosom, like there wouldn’t be the same passion, excitement, focus etcetera. And again just could never quite figure out exactly what it was.

I mean there’s some things I figured out along the way. Like number one, in this company as we started, I wanted everyone to be in one location. I thought it was really important not to have people all over the place. And we’ve gone the two locations now since we have our California and Philippines office. But our core thing there was the keep all of our employees centralized so they can feed off of each other. And I’ve worked really hard at not growing too quickly. Even though we are doubling every year, we don’t grow too quickly.

I mean it seems to be at least somewhat controlled. We’ve been working really hard on hiring only the very best talent. We don’t want to create a team that is subpar which is something I’ve done before. But even still I could kind of start to sense and feel like things weren’t really working the way that I wanted. And I didn’t really know how to solve them other than to hire a COO in Jacqueline.

And you always feel like I’m going to make this hire or do this or do that, and that’s going to be the magic thing that unlocks this problem. And Jacqueline in the beginning was already helping tremendously, but I could still sense that something wasn’t quite right. And then I read Traction. And I really realized and I’ve kind of alluded to this in a previous episode, the biggest issue and it really hit me in the face was in the very beginning of the book.

It talks about how every company needs a visionary and every company needs an implementer. And I knew this in some ways because that’s why I hired Jacqueline to be kind of our operations person. But I didn’t really know why. I couldn’t articulate it in a way that made sense to me. If I was to explain my problem to somebody, I couldn’t really ever explain that. But once I read this, immediately it clicked. I’m like oh my God, this is the problem.

This is the root of the problem is that I need to focus on being the visionary, and I need someone else to focus on being the implementer. And I need to do that in a way that I let them do their job and they let me do my job. And I talked about this in a previous episode when I talk about how I felt like I got fired from my own job because I always felt like even though there would be an implementer on the team that I was still implementing certain things. Not necessarily in a destructive way but certainly not in the most helpful either being realistic about it.

So that was the first part of Traction that that really opened my eyes to this. The second thing that I realized as I was going through this very early on is that communication has always been a problem in companies that I’ve been a part of from the perspective of like, yeah, I set goals and I know what I want to be doing and I tell people what they needed to be doing and do reviews or whatever and do performance reviews.

But there’s never been a situation in any of the companies that I’ve been a part of, either my own companies or even the company I was in the corporate job for for seven years where everybody was on the same page, or every single person in the company knew what our fiscal goal was for the year for sales, knew was we were trying to do to get more business and what our big objectives were, what our core values were, what our mission was. All these different things, the executive team I think knew that stuff pretty well. And I was on the executive team, I was lucky enough in that position to be the youngest person actually on the executive team.

But I can wholeheartedly say that the other let’s say 190 people that were in the company that weren’t on the executive team, they didn’t know jack crap about this is certainly what our goals were. They just knew we were a sales company trying to sell more stuff. And I think that’s probably about as much as they knew. And we’d have a annual meeting every year, but we wouldn’t have necessarily — we threw up our sales numbers, but people didn’t necessarily know what our goal was or how we were going to accomplish it.

And that’s definitely the way things have been here at Terran and at the other companies that I’ve run. And the same thing goes for like what is our core values and what is our differentiator, what’s our ten year plan, what is everybody marching towards? If you asked any one person in the company, you might get a different answer from everyone. I think that it’s pretty disjointed and everybody knows what that is.

So what Traction has is something called the EOS system or just Entrepreneurial Operating System. And what this does is it has a chart your vision traction organizer that helps you lay out your core values, your core focus, your ten year target, your marketing strategy, your three year plan, your one year plan, your quarterly rocks, and your issues list. And they have a chart; we’re going to roll it out in a little bit different format here shortly.

But the thing is that this gets documented and put out to the entire company so everyone knows all of these things. It’s really important and I agree once I went through this and kind of realized specifically what was missing within our organization was these things. So we’re rolling this out. By the time this episode comes out, the rollout will have already happened, but we’re doing it by taking a day off from the office.

All the people in California are going to go. We’re going to have a meeting about this, go over all these different components. And then the rest of the day we’re going to spend going to a baseball game, which will be a lot of fun. In the Philippines, it’s going to be similar. We’re going to take a half a day and go over all this. Everybody there knows exactly what’s going on. The same exact information is going to be communicated to them, and then the rest of the day we’re going to go to a karaoke bar because they love karaoke there and have open food and a bunch of stuff.

So it’s going to be a lot of fun. But at the same time we’re going to communicate to everybody specifically what all this stuff is. And what I want to do with the next several podcast episodes here, we might break this up a little bit here and there, but this is Traction episode one of many. And if you don’t find this stuff interesting, just fast forward past all these Traction episodes. But I highly recommend whether you’re one person or 100 people that you listen to this stuff.

Again I’ve been doing entrepreneurship and running companies for a long time, and it took me a long time before I had this aha moment. And I give a lot of credit to this book. And the difference already is just unbelievable within our company, and we haven’t even rolled this out to our entire team, that it’s just us at a higher level putting this down on paper. And I cannot wait to get this out to the entire organization.

And as a result of following this already, we’ve already seen a lot of growth and getting things on the right picture, because we’ve laid out all of our goals for the whole company and we know exactly what we want to do. So that’s the introduction. Now what I want to do is spend the rest of this episode on core values, which is the first thing that’s going to be done when you go through this vision in Traction organizer work sheet, core values is the first box on the list.

And I want to spend the rest of this episode talking about this because this is something that I’m very passionate about. I’ve always had what I consider to be really important core values in running a company. But the problem was that not everyone else knew what the heck they were. It’s kind of like if a tree falls in the forest, is anyone here kind of thing. I think it’s important to make sure that everyone knows exactly what’s going on.

So what ended up happening was as we were doing this, we have Basecamp now which is a great tool for project management for our entire team. And we have a management section here which is our COO Jacqueline, my wife Michelle and myself are our management team, our C level team. And I rolled this out and I was like, look, I want you guys to read Traction, we’re going to start developing our core values. I’m going to start first, like this is what I’ve come up with. I’d like you guys to add to this list, let’s talk about it.

And so I was like, here’s my list of my own. The first one was people first; create an environment in which people look forward to coming to work. Number two happy customers over money. Number three, develop only amazing products. Number four, integrity, and honesty. Number five; treat people like you like to be treated with respect, honesty, compassion, and humility. Number six, just being a little bit better than everybody else is not good enough. Number seven, be proactive.

And this was like my initial list, and like I threw at them. I was like let’s talk about this, what do you guys think of this list? And then after I went back and read the book again and I realized I needed to kind of rephrase this. So I said, one of the things the book has is an example of ways to use we for everything. So everything should start with ‘we.’

I was I like that idea, so rewording all of these to be, we put people first. This includes customers and employees. We develop only amazing five star products. We consider honesty and integrity above everything. We expect everyone to treat others the way we like to be treated with respect, honesty, compassion, and humility. Number five, we don’t want to be just a little bit better than the next guy, we want to leapfrog them. Number six, we are proactive in everything we do regardless if it’s your responsibility or not. Number seven, we never get complacent, we never stop learning, and we always try new things.

So this was my first pick at all this. And I think the important thing here like I put a lot of thought into this. I’m like what is important to me in this company? What do I want to instill as something that is a legacy for Terran and what we’re doing here, and I want to let everyone else know that this is what I feel that I’ve never let out my inner self? Even though I felt very passionately about all this stuff and maybe through osmosis everyone’s kind of figured this out, it’s never been documented and described to everybody, which I think is super, super important.

So then we sat down as a team. And I was like Michelle and Jacqueline; I’d like to get your take. Give me five things that you guys see as important just as like high level topics that would be either added to this or that you think are the most important thing for us to be having as core values. And Jacqueline’s were customer service, problem solving, creativity, quality, teamwork, and collaboration.

And Michelle’s was communication, creativity, a sense of learning, continued education, and striving for excellence, and personal growth, which I thought were also really good core values for us to have as a company. So we sat down over the next couple of days, and we didn’t spend obviously a couple of days straight with this. We would spend an hour or two at a time and went over this, and refined this down. Because the whole idea and one of the things that Traction talks about is that you want to say this in as few words as possible, and you don’t want to have more than seven or eight I think the number was of core values.

So we ended up with seven and we refined this down to something I think that’s pretty profound. It’s worded I think really well. Let me go over our seven core values here at Terran. We always put people first. We only develop amazing products. We treat others the way we want to be treated. We are leaders not followers. We set the bar. We get things done. We will always try new things, and finally we have fun.

Now I literally printed these out and put them on a wall in our office. And I wish I could do the same in the Philippines office, but we’re in a co-working space. So until we get our own office and can hang these on the wall, everybody knows what they are at least, that’s the most important thing. I want people to know that we always put people first. I want people to come to work here and know that yeah your job is important, but like our relationship with you as an employee and a person are more important.

Life comes first, you come first. The job is important; you’ll do a good job. We know we trust you; we’ve hired you because we think you’ll do a good job. If you don’t, you just aren’t going to fit in here. And if you do a good job, the most important thing to me is that we put you first. And it’s not just our employees but also our customers. Again I don’t want customers who have a negative experience with us.

There’s some people you’re never going to make happy. They just want to complain for complaining sake and they’re just bitter pills, and there’s nothing I can do about that. But if we can do something about it, we’re going to do something about it. Number two, I want everyone to know we only develop amazing products. I want people coming in here knowing that we aren’t developing crap, that you can be proud to work at Terran and be a part of ColorIt and IceWraps and Wild Baby and Tactical and Survival Food and coloring club, and EcomCrew and anything else that we do in the future.

And when we do it, it’s going to be good products that people like that we’re going to hopefully have a five star product. And if you aren’t happy with it, we’re going to take it back as a return regardless if we make money or lose money with it, that is immaterial. We want people to be happy because we develop amazing products. And there’s a lot of people that I know that have worked at companies that don’t care about this at all.

I know a lot people from my past life especially in online poker affiliate marketing where people can care less about if they’re just literally stealing from someone to get their money, they don’t care. That is not like who we are like who I am. I think it’s really important for people to like our products. And I think that maybe some of that is self-serving, because I do think that this is instilled in everything that we do here and it also helps with the strongest form of advertising which is word of mouth.

Number three, we treat others the way we want to be treated. This is something that I try to live my entire life by. It’s certainly not just business, but I don’t understand how people can do something to someone else that they would be really pissed off if it happened to them, whether it’s stealing or being unethical or cheating or whatever it might be. And I’m not here to judge anybody. This is not a religious thing for me.

This is just I have had people do a lot of really nasty things to me over my life and my career. It’s just a part of being a business owner, and being a 40 year old person. Not everything is always shiny every single day. And it sucks when that stuff happens to you. And my reaction to that is not two wrongs make a right. My reaction to that is I’m going to take the high road and be the better person, and treat people the way that I like to be treated, and realize that there are going to be other people that don’t feel that way, and that’s fine too.

And again it’s not a religious thing. If it is for someone else, that that’s fine too, I don’t have any problem with any of that. But this is the way that I choose to live my life, and this is how I want us to be running our company. And anybody that’s a part of our company to understand and take this to heart. Number four; again we are leaders not followers. We set the bar. Anyone that knows me personally knows that I am not a complacent individual.

I don’t just follow everybody else. We want to be the ones leading everything that we do, whether it’s ColorIt and making the best possible coloring book, or it’s EcomCrew and putting out the best e-commerce podcast that there is. Or our courses that we launch and putting out courses that people feel like they got more value out of than what they paid for. When we get comments back about this, it’s really heartfelt. And I feel like we’ve done accomplished our mission when people say that they would have paid five times more for a course, comments like that, or same thing with our products.

This is where we want to be. We want to be leading things and we set the bar. And that’s why one of my 2018 goals is to come up with something that no one else is doing. This is like literally one of our goals is to come up with something that no one else is doing. So and that’s the number four and I want everyone else in the company to know this. I think it’s important that they understand this.

I want people to communicate that this is how things are around here. And if you’re just living a life or mediocrity and complacentness in your job at Terran, we don’t have a place for you here. And I think that’s important. Number five, we get things done. That’s pretty much on the same line of what I was just saying. We don’t micromanage or treat people like infants. We want people to get things done. They can get that done on their own schedule and time and whatever, but we want people to get things done, and that’s important to us.

That’s definitely how I feel like I am. Like I probably got a long list of 2018 goals. I feel like I definitely get things done. And I want people around me the same way. I don’t want to babysit people anymore. Like I’ve had that with employees, and we want people that are in players and this is really important.

Number six; I want people to know we will always try new things. In fact, like we want to try not to just keep doing the same thing. That’s actually bad in my opinion is just to keep doing the same thing over and over again even if it’s working. That is Who Moved My Cheese, right? If you’ve ever read the book Who Moved My Cheese, God knows I’ve talked about enough on this podcast in the past. Don’t just keep going to work every day and expecting the cheese to be there just because it always has been. One day you’re going to eat the last plate, and you’re going to be starving because you had no backup plan or other way to get cheese and I think this is really, really important.

And again number seven, we have fun. Yeah, it’s stressful here sometimes and we have a lot of really lofty goals. But I want to hear smiley laughing people and see smiling faces and people who enjoy what they’re doing day in and day out. And this is really important. Communicating all of this is something that has never happened even though I’ve always felt this way, why hasn’t everyone else felt this way or understood it? Probably because I didn’t communicate it well. That is what Traction helps with.

So the last thing I want to mention here before signing off for this episode is that you have to take this seriously as you’re going through this process. We did nothing it felt like but do meetings for the longest time because there’s a lot of components at Traction. And you’ll see all the different things as I go through and talk about this. This one thing alone took multiple days of meetings on a otherwise already packed schedule.

So my thing was and I told our team this, Jacqueline and Michelle, when we have a Traction meeting on the schedule, it’s as good as gold. There is no excuse of why we can’t do it. And I would think over I think something like 30 to 40 meetings we had total of Traction. We had to reschedule I think only two of them. And they were pretty good excuses. And so I mean the point is that we didn’t make excuses and just keep punting, oh we’ll do that tomorrow, we’ll do that next week. We stuck with it until our entire system was mapped out including these core values which kicked things off on the right foot.

And again these are written on the wall and we will go through this with every new employee. We have communicated this at this point by the time this podcast is out with all of our employees, and everyone now is on the same page and knows exactly what our core values are. So that’s episode one of many of Traction. I look forward to getting through all of these with you guys over the next several weeks. Until the next one, we’ll talk to you soon.

And that’s a wrap for the first episode, first installment of this series on Traction. You can go to EcomCrew.com/138 to get to the show notes for this episode. And just as a reminder, one person who leaves a comment is going to win a free EcomCrew mug. You must comment by the end of next week. All you got to do was leave a comment. You can leave anything; just say hey, I want a mug.

But we’d like to hear something more interesting about what you thought about this episode. We work hard putting the podcast together and getting feedback from our listeners is really important to us. So we’re going to encourage you to do that by giving you the mug. I think this is a great episode to comment on. This was a long journey for us getting through Traction, and I’m really proud of what we have been able accomplished there.

So I look forward to hearing your comments. We’ll be back with another Traction episode in the next few days. We’re going to try to get through these as quick as we can to just kind of have them all grouped together, but we have other content to fit in there as well. So again EcomCrew.com/138 to get to the show notes for this episode. And you can go to EcomCrew.com/webinar to sign up for the next webinar. Until the next episode everybody, happy selling, and we’ll talk to you then.