Latest / Founder F**K ups / The Hidden Cost of Shiny Object Syndrome with Adam Chambers
Transcript
- Ben Bagg: time out guys. Lots of you are watching, ⁓ of you are learning from the founder fuckups that ⁓ all gone through, but please do me one little teeny favour ⁓ subscribe so we can keep growing the channel and get more great founders on. ⁓ Back the episode. Today's guest is Adam Chambers, a serial entrepreneur and the founder of Nurse Recruitment Experts, a business that has successfully sourced and hired tens of thousands of nurses for healthcare orgs. you build a business that works, the natural founder instinct is to ask, what's next? ⁓ want to innovate, you want to expand, you want to chase the next big idea. ⁓ Adam discovered a dangerous trap hidden inside that ⁓ ⁓ object syndrome. Instead of doubling down on the core engine that was actually driving his business, he started pouring money and resources into experimental initiatives and new ⁓ the results didn't The new stuff wasn't returning ⁓ and the core business actually started to suffer a bit because it had lost its leader's focus. ⁓ Today, talking about the high cost of chasing ⁓ shiny or the discipline required to know when to ⁓ kill experiment. why the most boring advice in business is often the most profitable. Remember what actually works. Adam, welcome to the pod. Adam Chambers: Alright, thanks for having me. Great to be here. I love your t-shirt. the podcast. So, ready to spill my beans. Ben Bagg: Thank you. it. Now, we were talking before, you had said you would spend ⁓ bit too much perhaps on new people ⁓ or experimental initiatives. What kind of an initiative you funded that looking back might have been a bit of a distraction from the core engine? Adam Chambers: Yeah, so I paid 7,500 to job board and didn't get any candidates interviewed out of it or not even the mentioned job offers or jobs accepted. So met a guy at a conference and the sale for him was actually kind of ironically like our company sale. was saying, we know we're using X job board, like indeed. here's a new stream of leads that you could get tapped into by working with us. I think when it comes to sales, in our company, we do this thing called the challenger sale, where you tell people what the reality is, you're kind of educating them and then you make them think differently about the problem. That was my approach to this new job board thinking. Ben Bagg: Hmm. Adam Chambers: All right, so there's a group of candidates here. There's a group of candidates here. Why am I not tapping both groups? However, it didn't work. Like I was locked into that three month contract. It was not loads of money from the grand scheme things business, but the 7,500 down the drain. wouldn't let me get out of the contract. I think they've almost folded. So the point is that I... had a good thing going when it came to acquiring leads. I was using Indeed and I was using social media. What I realized after this experience and several others, which were quite similar was, for me, it's often better to double down and do better in the... Ben Bagg: Hmm. Adam Chambers: niche, the vertical, or the platform that's working on building your business rather than imagining that you're going to feast off multiple platforms. Ben Bagg: Yeah. Adam Chambers: So that was my learning as a small business. I mean, we just had five employees at that time. So Ben Bagg: Yeah. Yeah, I think even the 7.5k is still quite a bit of money when you're a small business to invest. Why did you decide originally to do that investment? Was there something that just excited you? Was it that you didn't have enough candidates and you were trying to fill a gap? What kind of drew you to make that decision? Adam Chambers: Yeah, I think we were underperforming for some clients and our churn was frustratingly high. ⁓ I knew that the problem we needed to solve was getting more candidates into our pipeline. So, Ben Bagg: Hmm Okay. Adam Chambers: Whenever I saw this new channel, just thought that it logically made sense to try it out. ⁓ comes into it as well. Like whenever you meet someone and they persuaded you, ⁓ ⁓ can go out the window and emotions come in and you get sold on stuff. Ben Bagg: Yeah. you Yeah. Yeah. think I would say I'm quite easy to be sold. ⁓ this lesson there, because ⁓ over the years you've run a lot of experiments and in case you were trying to solve a problem so it's probably easy to justify the spend. At what point did realise ⁓ Adam Chambers: Yeah. Yeah. Ben Bagg: that the returns just weren't worth it? And because you said you were locked in, they wouldn't let you exit. So you already immediately realized that this was a bad investment. Was it like the first month? Like, did it just happen really quickly? Adam Chambers: Yeah. Yeah, it was probably in a couple of weeks when I looked in and so I saw a lot of leads but none of them Really were moving down the pipeline so I was probably at that point like you see you just see the leads come in at the start on them you're happy but You don't see them convert so Yeah, but the ironic thing about this is that my maybe this was some sort of Ben Bagg: you get some good vanity metrics basically. Yeah. Adam Chambers: punishment like my business for those clients where it wasn't working out. So we did healthcare recruitment, our clients source leads. So candidates from mostly outside of job boards, although this vendor was a job board. It worked for some that had a good offer and were in a good market and had a good recruitment team. But if one of those things were lacking, sometimes it didn't work. So I'm sure that our clients, the ones that were unsuccessful with us. Ben Bagg: Mmm. Adam Chambers: Maybe that felt the same way as what I'm talking about now, where we came in and said, we can get you a new flow, but ultimately weren't able to deliver on the promise. ⁓ I don't think we should be too harsh on ourselves for doing these experiments. Maybe if I hadn't have done the experiments, I wouldn't have countered the channels that did work. But I think it's just important to be aware that it can be fallacy to think that more is always. Ben Bagg: Hmm. Yeah. Adam Chambers: rather than getting good at what's been proven to work. Ben Bagg: Yeah, yeah. No, no, I do agree. think we still need to be doing the experiments to try and solve problems. Perhaps a bit more due diligence, you on your hypothesis, but I think you do need to run experiments. ⁓ You also mentioned that you ⁓ spent on new people, right? Where you ⁓ when you to invest in people where? Adam Chambers: Do you agree? Yeah. Ben Bagg: and where it went wrong, where were you investing? What part of the organization you bringing in ⁓ of senior gray hairs or scrappy young folks trying to ⁓ tackle that maybe they weren't able to tackle? What happened around the high? Adam Chambers: Yeah. So was a mix of both really. I think it's, I have of both where you think again, going back to what's working when it comes to generating leads ⁓ often for at least cold email campaigns and LinkedIn outreach perform better than having someone sitting with a phone and trying to cold call people. Ben Bagg: Yeah. you Adam Chambers: So we did hire more, well, could say a junior person to do that. Yeah, it didn't work The lesson again was that. Adding on things can be effective, but whenever it's outside of your ecosystem or outside of what like is currently working, it can deflect the attention. can distract things. it's like an opportunity cost of focus where you're not just losing the focus on what you're doing, but you're losing the compound effects of being focused for more time in the area that works. Ben Bagg: Mm. Yeah. Yeah, guess the tragedy, right? The real tragedy isn't really about the money, but it's actually the time and the focus, right? And ⁓ that taking away from, you know, perhaps your campaigns or funnels that are working really well, moving them to something else ⁓ decrease the results because lack of focus, right? ⁓ Adam Chambers: Yeah. Yeah. Ben Bagg: you've been going through these experiments and making these hiring choices and so on and you came to that realization, was there like a specific moment where you're like, hmm, focus is probably ⁓ We shouldn't be hiring outside of the status Was there a realization for you? Adam Chambers: Yeah. but also it's hard to learn from your mistakes. It's like being a gambler. mean, risks, business is about taking risks and gambling, isn't it? So you're like, ⁓ maybe this time it'll work. So not going to necessarily follow all the advice I'm today because it is it is necessary. But to your question, think whenever we have clients and Ben Bagg: Hmm Adam Chambers: things weren't going well for them and I had employed people to do the account management. So the client sent an angry email. Then my account manager got back to them a kind of incoherent response in terms of spelling was wrong. Like at the most ⁓ time to communicate correctly with someone. Like the spelling was wrong. The issues raised weren't responding to it. was like just changing the subject always. Ben Bagg: Okay. Yeah. Adam Chambers: I mean, you realize that, yeah, you... You need to have a hold over things and have a certain control over quality. It's not as simple as outsourcing it. You know, like whenever you run your own business, all the coaches are like, you need to offload tasks, which is true. But it's not as simple as just giving it to someone and they're able to do it. You have to train them and have oversight on it and support them. Ben Bagg: Hmm. I always coach around sort of $5 tasks and $500 tasks. So to what your point is, I think dealing with a customer who's worth a lot of revenue and keeping them happy is more of a $500 task. Whereas, you know, doing some of the administrative work is more of a $5 task. And I think sometimes a lot of founders, they offload the uncomfortable things. Adam Chambers: Mm-hmm. Mm. Ben Bagg: before they offload the things that they really should offload. You know what I mean? Like, I meet a lot of founders who they'll offload sales. And I said, the first thing they want to offload, they're, don't want to do sales because it's uncomfortable. It's hard, yellow nose, a lot of rejection. But that's the lifeblood of the business. You know, that's the fun. So no, I agree with what you're saying. Adam Chambers: Yeah. Yeah. Yeah. Ben Bagg: And stuff like this, like Account Manager, this is a really ⁓ good You would ⁓ hire this spend money on them, ⁓ train them, them. ⁓ I'm gonna eventually this particular individual didn't work out. When ⁓ do I some cost starts to come in and I see a lot of people where you hire someone, you've trained them, you spend a lot of time with them and it's hard to like... Adam Chambers: Hmm. Ben Bagg: know when to stop spending that time, focus and money when something's not quite working. And I think it's difficult ⁓ well for founders because we really believe in the people around us ⁓ we see some potential. ⁓ ⁓ you kind of any framework or ⁓ way operating now or gut that is like, I know when to pull the plug on an experiment or a or anything like that. Adam Chambers: Yeah, so mean, the start, days I try and define what am I going to get out of this? And what's my goal? And I can adjust that goal as time goes on, but if after three months, if I'm not hitting that, then I need to stay true to my initial planning. If it's causing me more harm than good in terms of time spent or even emotions generated, then that's another influence decision. Ben Bagg: Yeah. Adam Chambers: But I have realized that when it comes to hiring, the most important decision is choosing to hire someone or not. you need to really vet the people that you're interviewing. And I always like to ask, because Evans, know, Sam Evans, ⁓ he had podcast where he was like, yeah, I asked everyone ⁓ an interview. Ben Bagg: you Adam Chambers: What was the last book they've read? Cause I don't want to work for anyone that's never read a book. So I've been asking that one. it does help me kind of takes back a bit. ⁓ You some people, you can tell that they're making it up. And then the people interest me, at least are the people that are interested in things. even if they haven't read a book recently, I want someone that can respond to that question. Ben Bagg: Nah. Hmm. Adam Chambers: and explains something along the same lines. The person that says, ⁓ I don't know what to say, I haven't really read, I don't really like to read, and then they just stop. I don't really want them, but if they say, I haven't read something recently, well, I have 10 miles and I love cycling. At least that's something, like it shows that they're interested in things. Ben Bagg: Yeah. Yeah. Yeah, agree with that. think, mean, stops at us, right? It's that, like you said, the decision, ⁓ you if made a bad hire ⁓ and they work out, that's on you, ⁓ right? I at ⁓ culture ⁓ as of really important hiring decision. ⁓ And the way at is ⁓ behaviors. So, you know, you like, Adam Chambers: Mm-hmm. Ben Bagg: you know, five or 10, whatever values that the business should have. ⁓ someone, if ⁓ is a value, ⁓ ⁓ should be able to describe three or four behaviors ⁓ you would see from someone who lives up to that value. And I use the expected behaviors as interview questions. And what always find is that you need to get ⁓ your candidate go one or two layers deep. ⁓ Adam Chambers: Yeah. OK. Ben Bagg: into their explanation. If someone can only say surface level, they haven't lived it. Do you know what mean? If I ask, yeah, yeah. If you ask someone a question that was like a, a big challenge that you face and overcame something like that, because you want it because startups always dealing with problems and they give you some top level. Adam Chambers: Mm-hmm. Yeah, was chat dbt response. Yeah. Yeah. Ben Bagg: barely any information, you have to ask two or three more questions to get them to go deeper. And if someone's really left a problem, they can explain it. You know what ⁓ I found that that's been ⁓ important. When you're looking at these, let's say this free month ⁓ you've got a hire and you're taking them through ⁓ maybe the goalpost has changed a little bit to give them more time, ⁓ even the same with your kind of a... Adam Chambers: Yeah. Mm-hmm. Yeah. Ben Bagg: experiments and running? Do you find it hard to admit defeat and cut your losses or ⁓ sort of drag things out a little bit longer than you should have? Adam Chambers: Hmm. Yeah, I do. that it's hard to know when to stop. With that three month contract, it was pretty easy to know that it wasn't work with staff and people. is harder, ⁓ if they're in kind of like the borderline of trying, but not succeeding. Which I think ⁓ point that ties this together is that the most important thing Ben Bagg: Yeah. Yeah. Yeah. you you Adam Chambers: If there is a most important thing is what are you offering to the market? So what are you supplying? And then what does the market actually want? And what's the demand? This I learned when I was like 14 skill in business study class. There's the supply demand graph. often simple to react to misalignment and not when there's not enough demand for your supply and to Ben Bagg: Why does it matter? Adam Chambers: constantly push to try new things to make it work. But really you have to look back at what are you actually offering to whom. And amount of hiring or good investment in a lead source is going to fix a bad offer to a bad market or a good offer to a bad market. And that's the thing that a lot of people in... recruitment are realizing right now that they were doing really well during COVID. doing the same thing. have the same business model and same team, everything, but the market has changed and it's now a bad market. So a lot of recruitment firms are really suffering currently because there's not demand for the work and could pay someone to do, you know, do great sales outreach and then probably will help. ⁓ Ben Bagg: you Adam Chambers: it's not going to fix the bad market. Funders need to be aware of that so they can discern between when an idea or investment isn't working, when their offer to the market or the market they've chosen isn't working. Ben Bagg: So it doesn't matter how much fuel you pour on the fire of advertising jobs, but if the offer sucks, the job offer available isn't. It doesn't matter if you pay seven and a half K for a new source. It's kind of like, like a big lesson. Go on. Adam Chambers: Yeah. Yeah, I'll give you an example. I'm in Mexico right now. ⁓ one thing I really miss about back home in Northern Ireland is fish and chips. It's my favorite food. There's probably like five fish and chip shops in my town of 30,000 people. Let's get the cod supper. And fish and chip shop opened in Guadalajara, Mexico. Ben Bagg: Yeah Adam Chambers: It was called Chippy Tea. And well, I was really excited. I was like, this is great. I went. It wasn't as good as back home clearly, but it was okay. mean, it was fish and chips. It It counted. And in this city of like four and a half million people plus. It was not popular. I mean, it closed within a few months and I knew that when I arrived, I was like, this place is going to close. need to go here a couple of times. Ben Bagg: it sucks. Sorry. you. Adam Chambers: And that's because people in Mexico, want to eat their food that's popular here to their palate. They want to eat tacos. They want to eat birria. They want to eat carne asada and other things. But if you open a taco shop in Newtonards, where I'm from, there's ton of 30,000 people in Northern Ireland, it's going to close as well. So the product you're offering to the market is essential. And no, no amount of marketing for that fish and chip shop here would have Ben Bagg: We got it. Adam Chambers: saved it I think, I don't think. People have to bear that in mind, like we think we have ideas and that we're smart but you need to engage with your market to understand what they actually want and your market, whatever that is, is also important. Who are you choosing to sell to? They need to have money they need to have the problem that is ⁓ being solved currently at a cost-effective way where you can come in and fix it. Ben Bagg: time. Yeah. Yeah. Yeah. Yeah. I guess that comes down to like, some of the boring parts of being a founder. Like being ⁓ of staying consistent and speaking to your customers. because I find that a lot of folks, they wanna just tinker and build new ideas, products and new services, and then they go and ask the market if they're relevant, rather than the less sexy thing and going and speaking to customers and being like, hey, this a problem that you agree with? ⁓ You know, time and time again. And I think it's because having... Adam Chambers: Mm. Yeah. Yeah. Ben Bagg: Again, I was talking about it earlier, it's uncomfortable speak to the market about your hypothesis first. Because excited about your vision and your idea. ⁓ Like same guy ⁓ with fish and chip shop guy, like, I want fish and chips. ⁓ And you open fish and chip shop. He probably think and speak to ⁓ the local ⁓ They'd be in salt and vinegar chips. Adam Chambers: Yeah. Mm-hmm. Mm-hmm. what is that? Yeah. ⁓ Ben Bagg: such an amazing of flavor, ⁓ ⁓ I get it. I think a taco shop would do well in your hometown, because we want flavor. ⁓ Adam Chambers: Yeah. ⁓ you think? You can make up for it. Yeah. No, we do need more talkers shelves in the arts. Ben Bagg: So how do you, obviously I know you still run experiments, you're still building team and hiring people and running. ⁓ do you structure your time, your budget around how you innovate? ⁓ time sometimes is a budget, not just cash. So that we don't focus on the core parts of the business that are working. ⁓ How do do that now? Adam Chambers: So now I try ⁓ scoop on a spreadsheet. What is the return on investment going to be for this initiative? for the job board the $7,500 job board, I really ought have put, how many candidates am I gonna try and get? How many interviews, how many hires and like what revenue will that produce for me? And then kind of test the thesis to see if that's possible. Like run that by the salesperson. know. Maybe they won't. won't be honest, but maybe it written into the contract. Like to say, I need this amount by the first month. So it's really been about attaching it to monetary outcomes. ⁓ Even in fact, they're in my own time as well in those monetary outcomes. Ben Bagg: Hmm. Yeah. Yeah. Yeah. Adam Chambers: where if I'm a new project, if I'm going to be spending my time on it, not just to look at the subscription fee of the software, but what am I going to value my time at and what could I make doing something else? And the outcomes of this ⁓ idea less than ⁓ maybe absolutely putting the investment into it. Ben Bagg: Yeah. Yeah. So kind of the framework now is you actually, you're, you're kind of doing an internal business case for your, for information that you want to do where we're looking at cost and ROI time cost and the cost of lack of action. If you have taken that time away. ⁓ Adam Chambers: Yeah. Ben Bagg: or the cost of inaction if a term is taken away. Okay, cool. you, so you map that out into a spreadsheet and within your time, you give yourself like an hourly rate or like how do you, yeah. Adam Chambers: Yeah, yeah, I think I did a hundred dollars an hour. It's just if I do it there's times where I've earned a lot more than that but if I make it much higher it does kind of make it hard to attain the goals or I would Yeah, that's always been a bit of a hard one for me like valuing my time ⁓ Ben Bagg: ⁓ See? Yeah. Okay. Yeah. Adam Chambers: I know people do that. Like they would say no to something if they're not earning an X amount per hour. But for me it was more of like a tracking data point than actually being too strict about it. Ben Bagg: Yeah. Yeah. looked at it as well over at Nectar before. So I think it was 2023, I brought in $2 million of new revenue to the business. And so for 2024, when we were planning what's going on, we kind of made the assumption that anytime away is from me doing new business acquisition. Adam Chambers: Mm. Ben Bagg: was costing us $2 million I should be able to bring in the next year. ⁓ ⁓ actually restructured our organization a little bit so that ⁓ the cost of me say doing operations ⁓ not doing business, if lose 20 % of my availability, like from new business, that's $400,000. ⁓ Adam Chambers: Right? Mm. Ben Bagg: That's kind of how we calculate. It's not as easy. It's not as black and white as that, ⁓ that's kind of what we looked at the opportunity cost of me not doing sort of new acquisition versus operations was, hey, we be losing ⁓ this kind revenue. ⁓ Again, it's as black and white, but ⁓ that's the close take. ⁓ Adam Chambers: Mm. Yeah, I was gonna say like, was it? mean, what if you could have got someone that was better than you? Is there an opportunity cause of you doing it? Ben Bagg: Sure, in the business we couldn't, we never found anyone that could. ⁓ No one kind of was able to make it in that side of the business at anywhere near my level. But we could found people to do the operations at a standard that was acceptable. Again, it wasn't at my level, ⁓ but the ROI of ⁓ both. ⁓ Adam Chambers: Mm. Mm-hmm. Ben Bagg: it was more you know. ⁓ Adam Chambers: Okay, yeah. Ben Bagg: But yeah, I agree with your, the way you structure. So you're very much kind of internal business case now for these kinds of things. Do you do that as well when you're thinking about hiring someone, same kind of framework of like costing out the ⁓ and the time cost and things, ⁓ is it more just for sort of experiments and innovation? Adam Chambers: Um, no, yeah, I have applied that like across, across there is it's, I was always scared to really do numbers. Um, my kind of QuickBooks counting platform was a mess. So once I got a handle on it, it did bring me a lot of internal peace. And the ironic thing is though, this goes back to my point about offers. Ben Bagg: Yeah. you Yeah. Adam Chambers: It's not something that achieve more revenue or stop declining revenue being on top of the numbers. It's not a distraction because it is important, but the most important thing is the offer connects with the audience. Supply and demand again. Ben Bagg: you Yeah. you Yeah. Yeah. Couldn't agree more. I mean, you've got to be solving a problem or a need for someone that they ⁓ the perceived, ⁓ have the perception that they need that sometimes perceived problems are more important to individuals than actual problems. Yeah. ⁓ What you, what would you say to founders? Adam Chambers: Yeah. Yeah. Ben Bagg: listening or aspiring founders who maybe have got a bit of a core profits, profit of the business or, but they're starting to think about investing in various innovations, spin-off products, whatever it may be, or even in their team. How do you think they can protect themselves from spending seven and a half K on a job board or, or other hiring mistakes? Adam Chambers: No. Ben Bagg: past. it be full of that framework or any advice you can give? Adam Chambers: Yeah, my first piece of advice would be make sure you get paid. So I know I'm sounding like I messed up here and, but like you, maybe we had $2 million revenue in 2022. Um, a lot of the profit I didn't reinvest and I chose to take that out and invest it in the stock market. Um, Ben Bagg: We all have. Yeah. Adam Chambers: when it comes to other like business I've seen in recruiting space, the founders leave the money in the company or they try these experiments on a grander scale than I did. I think they are very important and maybe I had to reinvest all that money, I would be sitting in a much better position right now. But it does, I think it does ⁓ broaden your options or your fallbacks. And if you're able to have kind of a backup source of income, even through taking profit out and put it into stocks. So I would say that, you know, don't just chuck all your, all your profit into growth, growth, growth, if you're not getting paid because less than what is it like less than 2 % of business, at least in recruitment ever actually get sold. They just sort of fade away with the founder whenever they leave. Ben Bagg: Yeah. you Yeah. Yeah. Adam Chambers: So that's one. then when you're experimenting, like maybe think about how some clients have treated you as a vendor, because often experiments will be done in collaboration with the vendor. So how have they asked for certain things in the contract or how have they negotiated with you in a way that let them get out of that contract? Ben Bagg: Mm. it. ⁓ Adam Chambers: Learn from those experiences. Ben Bagg: Yeah. Adam Chambers: And finally, just do the numbers before you go with something like gut is important. Ben Bagg: you Adam Chambers: emotions can get in the way of... Moths. Yeah. Emotions are better than moths, but... Ben Bagg: Maths. Yeah. Yeah, I have two quotes. If it cannot be measured, it cannot be improved and maths doesn't lie. I use those all the time. ⁓ Well, Adam, really appreciate you coming on the pod, mate. Thank you for sharing a little bit your journey and I'm sure ⁓ folks can learn from you. Cheers. Adam Chambers: Right. Okay. You're welcome, it's great to be on here. My wife asked me to say hello. It's to you, I just told her about you. Hello from Carra. See you later, bye. Ben Bagg: Hahaha! Well, hello there. All right, see you later.