Latest / Scrappy but Successful [Consultant's Personalities When No One's Watching] / 33. The $1M-$10M Businesses PE Ignores (And Why That's the Opportunity) with Charlie Warden

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33. The $1M-$10M Businesses PE Ignores (And Why That's the Opportunity) with Charlie Warden · Scrappy but Successful [Consultant's Personalities When No One's Watching]

• 0:03
  What's happening, everybody? Welcome to Scrappy But Successful, the show where I
• 0:11
  sit down with your favorite consultants and we find out if they're successful today because
• 0:18
  they're sophisticated or because they're a little bit scrappy. I'm your host,
• 0:24
  Jack Tompkins, CEO of Pineapple Consulting Firm and Pineapple Analyst AI, always helping small
• 0:31
  businesses become more data-driven. Fun fact of the day: we've got a local one for Charlie.
• 0:36
  Denver, Colorado, is a city built on whiskey. In 1858, there were two parties that had the
• 0:43
  deed to the city.
• 0:48
  And so one convinced the other to relinquish their deed by offering a barrel of whiskey.
• 0:55
  Talk about a scrappy start to a city, but that's neither here nor there. Today I'm
• 1:00
  joined by my friend Charlie Warden. He's the managing partner of Warden Strategies, they're
• 1:06
  a revenue strategy and venture-building firm based in Denver, of course. What I think is
• 1:13
  really cool is that Charlie's a fractional CGO, a chief growth officer. Not CMO, not a CRO.
• 1:20
  We're getting we'll we'll get into all that.
• 1:24
  Charlie, we know you're successful today, but the question we have for you, do you think
• 1:34
  you're sophisticated or more on the scrappy side?
• 1:38
  Great question. I knew you were gonna ask this for the last week or so and I've honestly
• 1:45
  struggled with what the answer is. Obviously scrappy. My foundation was pretty much in work
• 1:53
  hard and figure things out, which is scrappy by nature. But over the years, especially the last
• 2:00
  five or six years, we've really learned how to find a time and a place for scrappiness.
• 2:08
  So when we're building a new venture, there's a lot of scrappiness. When we're working with
• 2:15
  a 30 year old company, there's a lot more sort of nuanced sophistication that needs to be
• 2:22
  brought to the table in terms of helping them evolve, think through strategically. But then
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  we can always come in with that scrappy firepower to also execute some of those
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  strategies. So it's really a hybrid, but I'm rooted in scrappiness, that's for sure.
• 2:43
  Nice, I like it. I've seen that a lot with guests too. It's like, sort of grew up
• 2:51
  quote unquote scrappy and then have developed into something that's a sophisticated system.
• 2:58
  Yep, pretty much. My wife would say I'm just scrappy, no sophistication. Yeah.
• 3:04
  Fair. Okay, so obviously entrepreneur, couple time entrepreneur. Did you have entrepreneurs
• 3:13
  in the family growing up and where did you grow up?
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  You know, I didn't think I did at the time. When I was growing up, entrepreneurship wasn't
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  quite as trendy as it is today. So I grew up in St. Louis, Missouri. My parents both grew
• 3:34
  up in the Midwest, tiny towns. My dad's from a tiny Nebraska town, my mom's from a tiny
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  northwest Missouri town.
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  So they really are the definition of scrappy and still to this day, probably the greatest
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  inspiration to me. As I was growing up, my dad was a part of a really small at the time
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  design build firm, just struggling to get by, struggling to build this business up. He
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  wasn't the founder, but he was pretty early.
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  And my mom sort of had that prototypical entrepreneurial spirit. She launched several
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  small businesses as I was growing up. The biggest was probably a landscaping business
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  that she ran with a friend of hers.
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  I didn't think anything of it at the time. Looking back, it was quite a bit of that kind
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  of entrepreneurial spirit in the household.
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  And do you have a lemonade stand as a kid? Like does that trickle down to you at an early age?
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  I never got into the lemonade stand, but I did a couple other stands. So everybody does the
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  lemonade stand. I didn't love the idea of sitting out there all day for 25 cents a cup, right?
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  So we had two stands in our neighborhood. We had a pretty family friendly neighborhood, a
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  lot of people walking around on the weekends, so I actually would drive up, or
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  I'd have my dad drive me up to Krispy Kreme. We'd buy a dozen donuts for three bucks, or
• 5:21
  three dozen donuts for nine bucks. And then we'd go sell those for two bucks a pop. We had
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  a little donut stand. And then me and a couple friends from the neighborhood also set up a
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  baseball and football card stand.
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  To this day I can't remember why we had this idea, but we had a bunch of these rare cards.
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  So we said, let's set up a stand, garage sale style, and buy and sell some cards. That's to
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  this day the highest margin business I've ever done, pretty much a hundred percent. Those were
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  the two stands, never did the lemonade thing.
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  That's awesome though. I love that you're just like, alright, there's some good gross margin
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  on donuts, let's go resell.
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  Yeah, and again, I didn't even know what gross margin was. I just thought, okay, I have five
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  dollars and at the end of the day I could have twenty-five dollars. That's great, that's more.
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  Right, it's so funny. The simplest answer is the easiest answer. You're like, I can spend five and
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  make twenty or net twenty. What kind of age? Like, is this middle school you're doing this?
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  Yeah, exactly. And I got to eat some donuts, so that worked out. We would have moved into that
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  neighborhood when I was in third or fourth grade, so it would have been somewhere between
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  fifth and eighth grade. Middle school.
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  That's pretty good as a middle schooler. I had a kid in my class who would buy candy and wear
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  the baggiest pants on the planet and sell individual pieces of candy for a full dollar
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  when he got it for five cents. On the baseball cards and football cards, one question I often
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  ask is did you collect anything as a kid that you thought would make you rich?
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  No, none of us were avid collectors. We just kind of accumulated these cards, and one day
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  we thought, what do we have around here that we could sell? We had all these cards and didn't
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  know what they might be worth, but we said let's give it a shot. I think it was a Derek
• 7:49
  Jeter card. Some guy off the street bought it for I think two hundred bucks.
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  Could have been worth a lot more, but it was great to us. So we didn't collect anything I
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  thought would be worth a lot. Now I regret it, I wish I would have bought two of everything and
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  kept one in the box.
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  And you're saying we. Is this brothers and sisters, friends? Who are you doing this with?
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  No, it was just me and the neighbor kids, we just pulled our cards together and set up a
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  stand. I have one older sister though.
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  How are the grades in school while you're being a side hustle entrepreneur?
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  I've always had a pessimistic view of school, but grades were fine, I would say. I did enough
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  to stay off my parents' and teachers' radars, but I could never buy into the process of
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  school, this teacher telling me what to read.
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  I could never really get into it, but I did enough to get myself into undergrad without
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  getting grounded.
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  Right. It's almost a scrappy way to go about it, but it's a little sophisticated too, cause
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  you know exactly how to play the game.
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  Yeah, exactly. I like to think I learned how to play those games at an early age.
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  Okay, so take me to full time entrepreneurship. So you go to college, work in the world a
• 10:15
  little bit, what's the first business?
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  I never actually worked in the world before the first business. When I was a sophomore in
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  undergrad, I still had no idea what I wanted to do other than I wanted to do business, I
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  wanted to start something.
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  I wanted to build a company like I had seen my dad be a part of. But I had no idea what
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  industry or skill set I'd bring to the table. I liked creating things, graphic design,
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  videos. I made a few videos, a website, and a campaign for a friend running for university
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  president.
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  He paid me for it after, which I didn't expect. I thought, you know, I could maybe do
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  this for other people. I added communications as a minor, which got me access to all the
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  film studio software licenses for free.
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  I launched that business still in school, zero overhead for two and a half more years
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  because I could use the campus facilities.
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  I called it Lion Head Productions. That's where entrepreneurship began, I suppose.
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  So scrappy, I love it. So you're saying, hey, I got a buddy doing this, let me throw some stuff
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  together, but it's the same thing as the donuts. I have this stuff I have access to,
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  can I go use it and sell it. How do you get your second client after that?
• 12:21
  That's a good question, I wish I could remember better. When I got closer to
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  graduating, I said okay, I want to keep doing this for a year or two, I think it'll pay the
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  bills and give me time to keep exploring. We moved back to our hometown, me and my now wife,
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  which was St. Louis, Missouri.
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  I just leveraged my network, I knew a bunch of folks. I started reaching out to older
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  people, friends of my parents who owned businesses, and got my foot in the door to do
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  a few projects here and there.
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  Before you knew it I was nineteen years old sitting down with forty year old VPs that I
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  had no business advising, but just kind of faking it till I made it, and I guess I'm
• 13:14
  still doing that to this day.
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  I mean, that's amazing though, the power of just saying hey, I own a business and I do
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  this, even with zero clients, you can still get in a room with people. I can see why you're not
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  a huge fan of the typical school structure.
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  And it's a great way to go about it too. You're young, are you living with your girlfriend at
• 14:18
  the time, dual income? Or doing ramen noodle dinners? Tell me about the household.
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  We were living together, tiny six hundred square foot apartment, rent wasn't very much.
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  She was still figuring out what she wanted to do, so she was nannying for a family we met.
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  That plus my venture was enough to pay our twelve hundred bucks a month and bills. We
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  were on a budget, but we've always eaten pretty well. We sacrificed other things, like
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  going out.
• 15:28
  Yeah, it's crazy how quickly a hundred dollar bar tab can show up, and if you cut that out,
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  it's a lot easier to save money. I've been in a similar situation, barely paying myself.
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  We never had any formal agreements, but I'm lucky I have a partner willing to put up with
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  my unconventional path, lots of lows and some highs. Some of my proudest moments are the two
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  of us figuring things out during the lows.
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  We had to figure out how to pay rent for a few months when we couldn't, and learn how to stay
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  under eighty dollars for a grocery bill week after week. Pull the eggs down, that's two
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  fifty, pull the milk down, we're at four fifty, let's get bacon this week, okay we're at 950.
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  We went through those days together.
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  Take us to the next venture. What comes after this, and how many ventures are we talking?
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  I'd consider myself a founder or co-founder in four ventures now, and everything else has been
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  pretty close to the founder, I've worked directly with or for founders and CEOs since I
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  graduated college.
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  So the next venture was more traditional, we had an idea, a hardware company, a patent
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  pending hardware invention, and we went the traditional VC route to raise money, get the
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  prototype working, prove the concept.
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  That was my first venture into sitting as a founder and CEO. I'd taken somebody's money who
• 19:02
  I cared deeply about, and it might not work, which is terrifying at the age of twenty four.
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  Great experience, it got us overseas to China a couple times. We ran that business for three
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  years, hired a small team, built a supply chain, figured out go to market, had
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  conversations with people I'd never expect.
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  And made every mistake you could possibly make, all the classic cliches of overwhelmed founder
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  came true. I left that business around 2017, and that's when my wife and I moved down to
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  Denver.
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  I said I'm gonna take the next few years and work for founders so I can do some more
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  learning before I jump back into a founder seat. I spent a couple years in startup Series
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  A type businesses before I ultimately launched my first consulting firm in 2020.
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  Tell me about taking on money, how did you feel about paying yourself a salary?
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  For a short period I did, not a very big one, basically rent at home plus a few hundred
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  dollars. I'd say pay yourself a salary, raise enough money to get yourself to market, that
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  was one of our problems, plus ten percent more.
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  So you have enough buffer to be strategic and not so reactive and scared all the time, making
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  quick twitch decisions every day. I wouldn't say it's one of the top thirty things I'd
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  regret.
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  Do you work with clients in that funding stage, and how do you advise them to go to market?
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  In our traditional model we're a fractional CGO for well established businesses. There's a
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  middle part to the story where I realized I love working with established businesses, I
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  think that's where I add the most value.
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  That's our core business. We also have our studio arm, kind of an incubator where we can
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  do side quests.
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  On that side we're absolutely in that scrappy startup, do we take on capital, can we
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  bootstrap this mindset. We don't do as many of those, we've gotta really be passionate about
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  it to take those on.
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  Okay, what makes an investment not worthwhile, what makes one stand out enough for you to take
• 24:08
  a third or fourth meeting?
• 24:27
  For us, on the studio side and the growth strategy side, we basically said we're gonna
• 24:34
  validate the human relationship and the personal fit with each founder first. If
• 24:41
  there's not good synergy, we're not taking it.
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  We're not gonna take on business just for the retainer or potential upside. So we look at who
• 24:50
  is behind the idea, do we want to build something with them, and what is the market
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  opportunity for the idea.
• 25:26
  We have a project right now on the studio side, an AI platform with a large defensible
• 25:33
  proprietary data set. The partner needs help turning this from a consulting business into a
• 25:40
  true software, SaaS model.
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  That's been a really fun one because it's defensible, there's a market there, and we love
• 25:49
  the relationship with the inventor.
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  Tell us about the established companies, and how do you land on chief growth officer? That's
• 26:18
  a less common term than fractional CFO or CMO, tell us about the naming.
• 26:25
  This is a whole episode in itself, I've written several articles on the chief growth officer
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  methodology. I feel like we're all taught through school and our careers to think in
• 26:39
  silos. I go to school to be a marketer, or a salesperson.
• 26:44
  We get crammed into these silos as we grow up in our careers, and our approach is to break
• 26:51
  down those silos. The chief revenue officer was the first attempt at breaking that down, sales
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  overseeing customer success expansion.
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  Where that fell short is it became a glorified sales seat with ancillary responsibilities that
• 27:07
  never got defined well. So we come in as a chief growth officer and say there's three
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  pillars, marketing, sales, customer success.
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  The foundation is your revenue operations that spans across all three. If you don't have that,
• 27:23
  all three will fall. The brand experience is the roof, what you can see from a mile away,
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  you can't build that without the infrastructure.
• 27:32
  We had one client who said we just need leads, we haven't had a lead in two years. We spent a
• 27:39
  few months focused on marketing, that wasn't a good spot. We said your pain points are
• 27:46
  actually in sales, delivery, and revops.
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  No automation, no usable data, no defined referral motion. They called us their marketers
• 27:55
  for the first two months, now they call us their everything team. I'm trying to get them
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  to just call us their CGO.
• 28:30
  How many people are in that boat of, I just need more leads, if I had more leads I'd have
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  all my problems solved?
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  I've never seen, I need more leads, actually solve any real fundamental enterprise value
• 30:27
  problem. Sometimes it makes you feel better short term, but a hundred percent of the time
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  there are underlying issues.
• 30:36
  The revenue operations piece always surfaces as a priority. Who's in your pipeline, what stage
• 30:43
  are they at, when's the last time you called this deal. Let's set up a workflow to remind
• 30:50
  you every Monday to check your pipeline.
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  I've seen this with clients too, any speech in a networking group about lead generation is the
• 31:34
  most well attended session. I'd bet one percent of people who attend actually use something to
• 31:41
  generate more leads effectively.
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  And that's where the scrappy sophistication balance comes in. We're gonna peel back some
• 32:39
  layers, ask uncomfortable questions, but once we get past that we'll bring a level of
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  sophistication to your organization, build up your team, put the right systems in place.
• 33:18
  Has your ICP evolved within Warden Strategy, or did you have it pretty well defined coming in?
• 33:25
  We had it pretty well defined this time around. Our first business, five or six years ago, we
• 33:32
  scaled very quickly, hired a bunch of folks, pretty agnostic across industry, which was
• 33:39
  great for growth, I learned a lot.
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  But it presented a lot of challenges and broke the business model. We spent a lot of time
• 33:48
  thinking about where we added the most value and enjoyed the work the most, and landed on
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  SMBs right below the private equity acquirable threshold, the two to twenty million range.
• 35:11
  I love it, I think it's a sophisticated move to say here's what it is and we're gonna stick
• 35:18
  with it, refine it, but not pivot, it's continuous improvement.
• 35:29
  Yep, and saying no, we told ourselves we're gonna actually say no this time, we've already
• 35:36
  said no several times, it's scary but we're doing it.
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  Alright, scrappy versus sophisticated, lightning round. How many unread emails is too many?
• 35:55
  Five. I'll let it get to five or six if I'm out and about, but it's gotta be empty every
• 36:02
  twenty four hours for me.
• 36:17
  Do you ever send an email that's only the subject line, nothing in the body?
• 36:35
  No, I hadn't even thought about that.
• 36:39
  What's the first time of day you allow yourself to actually look at emails?
• 36:50
  I wake up at five ish, lately forcing myself to just lay there for up to an hour. Then I'm
• 36:57
  looking at messages around six, but I always put it down, go shower, give myself another
• 37:04
  forty five minutes.
• 38:05
  Did you ever use two previously used dryer sheets instead of a new one, in the tight
• 38:12
  budget days?
• 38:22
  Yeah, we still do that actually, quite a bit.
• 38:28
  Did you ever use a clean Tupperware as a bowl because the rest were dirty?
• 38:37
  Never, I'm a little type A about dishes, mine get washed immediately.
• 38:55
  For most people it's either dishes or laundry. How long does it take you to put away clean
• 39:02
  laundry?
• 39:03
  If I do laundry it gets put up immediately, I'll finish it the same day. My wife will let
• 39:10
  it sit a day or two, but I can't complain since she's doing it.
• 39:33
  How many phone numbers do you have? Three. Do you leave voicemails or texts?
• 39:49
  I always call first, but if I don't get an answer, I send a text.
• 40:03
  How do you answer the phone when someone you know is calling?
• 40:14
  Hey, what's up. If it's an unknown number I never say my name, I just say hello, and if
• 40:21
  they ask who's this, I say who's this back.
• 41:07
  What is your airport personality? Two hours early, cocktail before the flight?
• 41:14
  Ultra efficiency is my goal, lines are my least favorite thing. I've had Clear for years,
• 41:21
  highly recommend it. I'm already checked in, straight to Clear, grab a coffee, walk to the
• 41:28
  gate and board.
• 41:49
  If somebody's scheduling a meeting with you, do you say you're free this week or send a
• 41:56
  calendar link?
• 41:56
  I've been using the calendar link more and more, I don't love how it comes off but it's
• 42:03
  been effective. I'll try to go above and beyond and list five or six options in an email when
• 42:10
  I can.
• 42:51
  When Calendly first came out it felt impersonal, but now it's just an efficiency
• 42:58
  thing. My phrasing is, here's my availability, link to Calendly, or happy to find time via
• 43:05
  email if nothing matches.
• 43:29
  Well Charlie, thank you so much for coming on. What do you want folks out there to know,
• 43:36
  anything you're promoting?
• 43:40
  I'd do a disservice if I didn't do a shameless plug. Warden Strategy, we're a fractional CGO,
• 43:47
  we work with established, typically B2B businesses. We love founders still wearing a
• 43:54
  bunch of hats but ready to grow.
• 43:56
  We help you align revenue operations, marketing, sales, all the way through the customer journey.
• 44:03
  We love getting deeply embedded with three or four clients at a time. If anything resonates,
• 44:10
  please reach out.
• 44:18
  Nice, a hundred percent scrappy beginnings, but now a foot in both worlds, even more on the
• 44:25
  sophisticated side. Certainly scrappy beginnings, but a foot in both worlds today.
• 44:32
  Again everybody, reach out to Charlie, it'll be a fun conversation. Thanks so much, stay data
• 44:39
  driven everybody.