Optimizing your Small Business & Your Time: Kelan Raph of Grand Canal Solutions – SBS 62

Small Business show at BusinessShow Co Episode 62 for Wednesday, April 13, 2016.

Greetings.

Folks and welcome the Small Business show at BusinessShow Co the show that is by, for and about small business owners. Here in Durham, New Hampshire, I'm Dave Hamilton.

And in Lafayette, California, I'm Shannon Jean. How are you, Dave?

I'm doing well, Shannon. How are you today, man?

I'm good. I'm very good.

Good.

You out there chatting all the messenger Facebook messenger bots today?

You know, actually I have it on my list to mess with, but it's been a busy day for other reasons, so I haven't had time to play. But that is actually part of my work, you know, it's good to get into that. Yeah, yeah.

That's awesome. That's awesome. Well, hey, today we're joined by a good friend of mine, Kellen Raff of Grand Canal Solutions. How are you, Kellen?

Doing great. Thanks guys for having me.

Yeah, thanks for, for being here. You know, Kellen and I, as I mentioned earlier, we go way back for probably 10 years where Kellen was my DHL rep. We used to use DHL a lot and now he's out on his own and doing his own thing. So we thought we'd have him here today, talk about his business.

Sounds like a plan. Yeah, yeah.

So, Kellen, the name of the company is Grand Canal Solutions. And tell us a little bit about what you guys do there, how you got started, and just about the product or services that you. That you offer. Sure.

So Grand Canal Solutions does logistics optimization for companies that are distributing products. So we developed a software, the product name is called Optimize, and it's purpose built to help distributors of product to be able to efficiently move their products within the domestic US as well as internationally. So very much what a carrier does for a shipper, we do for all different types of shippers using all different types of carriers.

Okay, so is it all international or just domestic as well?

Both international and domestic and domestic.

Okay. Okay, that's cool. So, you know, we're. We always focus on, you know, the aspect of running your own business here, starting getting things going. So let's go back and talk about the start. Tell us about how you got started with Grand Canal, what the impetus was, and I mean, did you work and I know I mentioned you worked for dhl. I don't know how long after you left that you started Grand Canal, but tell us how you got started and how you made that transition from employee to business owner.

Yeah, sure. So actually the product that we launched last year started right when I left DHL. So I was working for DHL, doing my MBA at St. Mary's College right around the corner from where you are, Shannon.

Yeah.

And I was taking a quantitative analytics course, which is basically statistics and Excel, and realized that I had a lot of data available to me and started playing around with that data and coming up with optimization logic. So basically algorithms which can improve decision making processes in shipping. I didn't realize it was going to take us eight, nine years to actually launch the software. There were a few hiccups along the way, a few good opportunities that I kind of put the product on the shelf basically and went and helped specific shippers with some bigger projects. But yeah, it was quite a long path to get here. But we launched the SaaS software, so it's available on the web a year ago. So we put out 1.0 a year ago and that was really started from just me solo. So I left DHL and I said I'm going to basically make a consulting practice us to help shippers, you know, those product distributors with their logistics needs and help them optimize their distribution networks. And so one by one by one got a lot of experience under the belt and built a lot of models, a lot of the algorithms during those cases, working with customers.

Nice. That's cool. So just to. So I can understand a little bit when you're talking about optimizing logistics and this kind of thing, is it all related to cost savings and efficiencies? Is that what you're primarily focused on?

Yeah, efficiencies for sure. So those could be cost related or they could be time related. They could be automation, reduce the touches. It could be also to optimize inventory values. Like to say you don't need five inventory locations around the us you really just need three in these places.

I see. Based on the data that you get from the client.

Yeah, exactly. So we actually map the entire network through data. So we pull that data together from shipping histories and then we put it into our solution and then it starts making recommendations for improvements that can be made.

That's cool, man.

So you wrote, I mean you developed this entire software package for. Well, it's a service by yourself or internally there how much of it was. I mean this just fascinates me as someone who's built software and who likes data and who likes to analyze things, but also likes to have computers automate those things so I don't have to think as much. And so I'm Just curious what the process was like getting from, you know, you're solving this problem manually, you know, you want to solve it in an automated way and you've got this idea for, for the software. But like you said, you're kind of, you know, dealing with clients one on one as the, as you, you know, have to stay in business. So getting to this point, was there. Was it that you had mapped out the software and you knew exactly what it was going to do, but you just hadn't written it yet? Or was it a thing where as you were helping customers, you were sort of saying, oh, wow, well, we could put this in the software and this in the software. And was it a learning process as you.

Yeah, absolutely. So exactly like you said, each project, each use case, each model that we had to build, it was all built in Excel originally. So we basically did it manually as you could in Excel, start writing these different types of scripts and algorithms. And then eventually to the point where we started breaking Excel because we were putting too much in there. Either too many rows or too much data or too much complication where Excel would just freeze. And then we started translating, transitioning over to more of a database program like SQL. And then we built the. We basically took all of our Excel models that we had built and all of our reference files and all of our database type stuff and we started from scratch about two and a half years ago and started building purpose built SAS software on a database. So basically from scratch we took these models and then we reprogrammed them into the software.

Oh man. There's nothing better as a programmer than having the opportunity to take something that you've built in one. And I'll call Excel a language because it is, you know, and, and you've sort of perfected it there, but you've got all this legacy history of the foundation of it. That kind of is crap by the end, you know, by the time you get to where it's actually working, you're like, oh, there's all this stuff that I would have built differently if I did it, you know, if I could do it from scratch. And then you got to do it from scratch. That's all. You know, I can imagine that being.

Yeah, yeah, yeah, yeah. It's quite a journey. I have to add in my co founder. So two and a half years ago when we started coding, I actually did a joint venture, my consulting firm with a software company. Arun Rao is my co founder in Grand Canal and he had a software company which had staff and programmers and everything. And so basically he was the one responsible for translating a lot of this over to the data. And so our team of, I don't know, two years ago, we were, I think, seven or eight people, you know, something like that. And now we've grown to a size of 22, I think more than. More than half of the team is on the. On the programming side.

Well, that's really handy to bring in a partner that does, you know, that can. I mean, that Shannon and I talk about partnerships all the time. And one of the best parts is, you know, when you have a partner that sees the same vision and brings all different skills to the table.

So that's it. It really helps. And the additional people that we've brought in as well, partners, also executives who have very specific experience and focus on certain areas have allowed both of us, both Arun and I, to really focus on what is the highest value for ourselves. So he's the cto. I'm much more customer facing, much more kind of project management, sales type of role.

That's awesome.

That's great. Yeah, it is. And also recognizing that as you're building this data over time, that there's this large opportunity, I think it would be all too common, especially as a consultant, just to put your nose down and focus on your current business and just keep solving the same problem over and over and over. But seeing that opportunity, I think it's fantastic. I think. When did you, you know, was there a point when you realized, like, you know, that you'd created a viable business? You know, what was it at when you did the joint venture? Or was there something that really hit. You're like, wow, this thing could really be big.

Yeah, that's what we intended on doing. So we did the joint venture to do development, and then we said, when we feel confident that this is ready to go, we will basically merge the two companies and start from scratch, brand new. And so that's what we did in December of 20, 2014 was we took all of the IP from and all of, you know, basically the two companies and just started from scratch with a new corporation, which was a good, easy way to start, actually.

Yeah, it makes sense. You know, everybody gets involved and once you hit these benchmarks, you bring it together. That's great. That's good. So how do you market the business? What's your methods for getting the word out and bringing in new customers to your platform?

Yeah, it's a big experiment still, actually. And I call it an experiment because we're doing so many things and we're very open with what's working, what's not working. The idea is that we'll say, yeah, let's run a test on it, let's see what happens. Most of the business that we have has been from prior relationships, referrals. Like for instance, Shannon could call me up and say, hey Kellen, you should talk to this company. They're growing fast and they're looking for this type of solution. But we're starting, starting now to. In the past two quarters we've been doing some email campaigns out to our prospective customers, which is mostly in the E retail business as well as distributors and manufacturers and things. So product based companies and we're getting actually very good results on that. So we're getting hits to the website, which we can see we have a service that sends us an email of any company that they can identify by IP that hits our website. And so we're getting, you know, some big names hitting the website and we follow up from there with them.

No, that's, that's great. Yeah, it makes a lot of sense. So Dave and I always talk about schedules and, you know, how you manage your day and juggle things and we're always interested is, you know, what time, what's your day like as a, as a business owner, you know, are you a tight agenda type of person that really sticks to everything and checks things off the list or are you more free flowing, walk around and solve problems type of person? Give us a description of that.

Yeah, it's getting more intense on the planning and agendas and you've got 15 minutes to do this thing that you'd love to spend an hour, but you only have 15 minutes. So that's what you're going to do. And as well lock yourself in a room so that nobody can come interrupt you and turn off the LinkedIn, turn off the email, turn off everything, turn off your cell phone and hide it because you not very much time. So that's, that's definitely been something that I've been improving on myself and getting a whole lot more organized. I, when I was consulting I would have breaks between projects sometimes where it was like, I just finished a year and a half project and I have nothing going on. So I'm gonna go travel for the next seven weeks, you know.

That's good.

Yeah, that was, that was the past.

That was the past. Kiss those goodbye right now.

Yeah.

Yeah. Let's. We always say here, you know, you know, owning your own, you don't have any freedom. I mean, you have flexibility. But Certainly you give up that freedom. Yeah, yeah, for sure.

It's interesting though, I want to circle back to this concept of managing or perhaps mitigating interruptions and sort of forcing yourself into that role. There's something to be said about a deadline, even a self imposed one, or a limited amount of time to get something done. You know, it, it can be, it can actually really help efficiency because you just wind up focusing on the one thing that you know you can do and just doing it. Is that, is that a corporate culture thing for, for you folks, for everybody at Grand Canal, or is that just something you've kind of imposed upon yourself?

You know, it's, it's becoming part of our culture. We used to have like a year ago before we really went to market, you know, we would spend the entire day in a large conference room, you know, whiteboarding and br. Brainstorming and really being very, very creative. And now that we've developed the product and we've gone to market and we've got really things to do and each individual has their specific role, it's much easier to actually just divide and conquer. So it's been a transition for our whole team of learning how to focus. And there's a couple books that I've read and re read over the. The period of about the last year which are fantastic. One is Getting Things Done. I can't remember the author, but it's a very popular book. And I think there's also a version of getting, you know, there's a second like a version 2 of that as well. So I'll, I'll listen to that on audiobook every once in a while just to remind me. I think there's a bridged version of it that's about an hour or so. And the other is a very old book, the Effective Executive. Every time I pick that up and even read four or five pages I'm just like, oh wow, like epiphanies right and left.

Yeah, that's interesting. That's great.

There's one more theory that I was taught in a coaching session years ago called the Big six and basically says, you know, the premise is you can really only accomplish about six projects per day. And so you have in order to focus yourself and not procrastinate kind of the biggest things, you know, make those six and no other. Like feel free to make a list of all the things you want to do tomorrow, but the things you're going to do today have to be very limited. And then to carve those, you know, if you have an hour and a half type of a project, don't say, oh, it's, you know, I don't have an hour and a half right now, so I'm not going to start it. Just carve it out into 30 minute blocks and so just get 30 minutes of it done. And sometimes all of a sudden you'll realize like, I just finished the whole thing in an hour and now I can move on.

Yeah, that's great. I love that concept of locking things down and knowing that you're kind of limited on that and what you can get done otherwise, you just never stop. Right?

Yeah. And there's a guilt feeling as well. When you have as much work as most startups and most entrepreneurs are putting in 10, 12, 14 hours a day and they would love to be able to put in 40 straight hours a day, there would be nothing more satisfying than just having the clock stop. But that's not reality. And so being realistic about what you can actually accomplish is quite relieving.

Yeah, I agree. I mean, there was a book came out a few years ago called Rework that really grew on the premise of, yeah, you gotta hustle and you've gotta really work hard, but you know, there has to be some cutoff and to kind of recharge yourself and you get to have a life and all that stuff. And it really talked a lot about that guilt that you mentioned that we all have that, oh gee, it's, you know, it's 10 o' clock and I could be getting this done and that done. And I just had yesterday, my son, let's go play basketball. I'm like, oh, I gotta get this done. But you know what, it's light for like an hour. We're gonna go play basketball, you know, so that's good stuff.

Yeah. One thing I've done regarding family balance is I never work from home. It's so frequent that I don't work from home that I, even if I tried to, I can't because I don't have that habit. So I may come home late, you know, 7 o' clock or something like that, but, but once I'm home it's like, don't work. But I will get up at 4 in the morning sometimes and start work and go to the office and then the family is sleeping, which is fine.

I'm always curious what time people get up and if there's a rhythm to it or if it's you just get up when you wake up. Because I do that too sometimes at.

4 in the morning.

I'LL wake up and it's like, okay, yep, I'm awake and I'm going to go over to the office and you know, start getting stuff done. So do you have a routine that you mostly follow or not as much?

Yeah, I spent probably the last six months waking up at three, four in the morning and just being ready to go, like totally ready to go. That was more stress induced than it was usually.

I don't mean to laugh, but yeah.

Yeah, no, that's what drives that.

Yeah, it is. So now I'm a lot more healthily balanced. I wake up about five and go work out and, you know, wait to check the email and things like that and really have a more planned scheduled day. But I guess it depends, you know, it depends seasonally with business. Seasonally, right.

Sure.

That there are times to rest and there are times to work your butt off. Yep.

Yeah. I think one of the things that I've tried to do in the last few years, talking about that balance and things, is to not let, or at least try to not let other things drive my schedule. You know, kind of come back to that six things you said where you're, you set your things up and you give yourself room to maneuver during the day when you have to solve problems or things. But I found if I let other people drive my schedule as far as, oh, I need this from you, I need this, we need to do this. It was just, I mean, it's almost impossible because you just never stop. So we try to, you know, manage things that way. Worked out pretty well.

Yeah. And it's about getting your teammates to take responsibility too. Not for task wise. I mean, it's just general responsibility. Like you learn to say no, basically. Like, I could help you with that, but I've got my own work to do right now and that's your responsibility.

Yeah. And you know, we talked earlier when we first started, you know, learning about Grand Canal, about optimization. It's the same thing in your, I think in your business. Your day, since we're talking about that is, you know, how do you optimize your time and how do you say no even to clients? I mean, we constantly are trying to optimize our client base to, you know, where's the sweet spot that we can provide the best service, generate a profit and then, you know, the tail, the long tail that's maybe wagging us from certain clients that we don't make any money on. Maybe we have to, you know, say no to those guys.

Yeah, it's a healthy process, actually. To do that annually, you know, to look at your customer base and say cut out 10%. And it could be because they're not paying you. It could be because they ask too much or that they take advantage or that it's just not the right business. Like your business has changed and theirs has not.

Yeah, it's tough because you want to offer those services. And a lot of the historical stuff you and I talked before the show, I have some in one of my companies that's transitioning to really a new model and you kind of have to say goodbye to some old customers that are just like what? What do you mean? You can't provide the service for us anymore. So it's, it's can be challenging.

Yeah, but it is healthy to do that, that culling, right?

I agree. Yeah, I agree. I find myself doing it daily sometimes it seems. But you know, so we're talking about, you know, optimizing things and measuring things. You know, we all measure cash, you know, cash is king and how the business is doing and growing. But you know, we all know as business owners there's a lot more to it. And we talked about our health and you know, family time. What's beyond cash? What's a good rubric? I love saying that word. Makes me sound much smarter than I am. Measurement that you folks use, your team uses to measure your success.

Yeah, that's a good question. We actually do a lot of metrics around that. Happy customers, of course, is one. We engage customers on a much longer term basis and so we don't have a lot of renewal necessarily. Like it's more of an annual type thing. But you know, we would measure churn, which would be the measure of unhappy customers. Right. And then measure revenue growth within the customer. So is the customer finding more and more value continually with us, but probably actually going back. I'd like to change my answer. We measure how much dollars and what type of return that we are achieving for the customer. And that's something that we do even monthly. And so we're always looking for new opportunities to prove our value. And we found that if you can just continually continue to deliver value, that you'll always be valued by the customer and it'll be a very long term relationship.

That's a great answer. So you're measuring cash, but not from a perspective of coming into your pocket, but what the customer is saving related to that?

Yes, we believe that if we focus on the value that we're delivering to the customer, everything else will fall into place.

Yeah, I like it, that's really.

Yeah, well. And it also gives you a way to frame conversations with the customer. I mean if it's just a natural part of what you're doing every day, you can, it's naturally going to then come up whenever you're chatting with the customer or when it's appropriate when you're chatting with the customer. And it's hard for them to ignore that. That's good.

Yeah, yeah, it's working.

Yeah, that makes sense.

Cool.

Well, we love hearing about your success, but we also really like mistakes here. Maybe just because, you know, we've made so many on our own. But as business owners, you know, we think it's important to share it and everybody looks at a lot of companies from the outside and thinks, you know, things are perfect. You know, think back in your business career over this eight year span of getting the optimized platform launched. What's the best mistake you've made that you've learned the most from that you can share with our listeners?

Yeah, sure. I'm glad you limited it to only that eight years because it's way too long. I would say that we took our eye off of serving customers in a critical phase for us a few years ago, actually about a year plus ago, so before we launched the first version of the software, we just kept getting sucked into product development and we stopped selling, we stopped marketing, we stopped visiting face to face customers, we stopped networking and then all of a sudden we finished the product and we were like, who wants this? We realized that we really didn't have a lot of these. And what I would recommend in order to get around this and this is what we recognized we didn't have was we didn't have these early adopter kind of beta relationship. And in fact I remember talking to you Shannon, about this and that during that time of like, hey, you know us, you know us well. Can, can we just get some of your data and beta with you? And we just weren't doing it, we weren't doing enough of that at all. And that should have been continual like to not take it should have been part of the balance rather than saying, hey, let's perfect this process. And the lean startup talks a lot about that in the, you know, in the theory of the MVP where it's like get the minimum viable product together and then even as ugly as it is, even requiring a ton of explanation, just get it out there into potential customers hands and hear their feedback. And that when those potential kind of beta customers are part of the development process they will, of course, give very valuable feedback. Everybody understands that part of beta. But they'll also be part of the development process and they'll have more connection to the finished product as well.

Well, yeah, and for anyone, and we've done a whole show on this, who's ever developed, you know, their own software for their business, whether it's a product you're trying to sell or just something to run your business, that, that mistake is, you know, that's priceless advice because we've all been there where you kind of go down this wormhole and you do want to perfect it, but it can just go on and on and on. Am I, am I right, Dave?

Yeah, totally. Yeah, of course. Yeah.

It's just not, it can be non stop. So that's very good piece of advice. Yeah, definitely. So maybe you may have just answered this question as well, Annette, but if, you know, if you could go back to when you were first getting started now with your experience and all this stuff, what's one critical piece of advice that you could give yourself that maybe something you would have done different or something you would have told yourself that would have had an impact on you? Yeah.

Similarly, I think that all product, product development people should be customer facing, should have that engagement. So, you know, that's to avoid developing in the vacuum. And it shouldn't just be one person. Like I was basically customer facing and the rest of the team of resources, let's call it six or seven people, were much more just relying on me for the customer feedback. And so I think it should be much more of a team approach. It should be that anybody involved in product development early stage should literally go out and visit customers and hear from them firsthand, translate for themselves that message.

Yeah. Instead of running interference for a programmer, telling them what you heard, getting them to, you know, in direct contact with the customer, that kind of thing.

Yeah, exactly. And you know, from a use case perspective, it doesn't have to be that they're literally sitting in front of the customer, but to really understand the customer.

I've always said that every business is the customer service business. And it's easy to forget that or it's easy for certain people in a larger company as you grow, because like you said, they can be shielded from the customers. If you're going to be shielded from it, you have to be made aware of exactly what's going on with them. And it's just easier to get people out in front of customers. Yeah, that's good.

That makes sense. So, Kellen, we Love hearing about your company. What's the best way for people to get a hold of you and learn more about the optimize platform?

Oh, yeah, sure. So our website, we just relaunched a new website which has an explainer video on there. It's a 90 second video that gives me chills every time I watch it because it's kind of been in development for a couple of years.

Nice.

So grand. Yeah, it's grand canals with an S at the end. So basically grand canal and then s.com and then there's a. That explainer videos, I think on the. On the main page there.

That's great. Well, you know, we appreciate you hanging out with us today. We'd love to have you back on in the future and talk about, you know, how you're doing and things you've learned and all that stuff. It's great to share some of the insight for, you know, our listeners and we really appreciate it.

Yeah, thanks, guys.

Yeah, thanks for coming. It was a pleasure to meet you, Kellen. This is really interesting stuff. I love it. It's good folks. If you have questions for Kellen, well, he just told you where to find him@GrandCanals.com but you can send us stuff to feedbackusinessshow.co and of course you can find us on Facebook. We're still dba podcast, Shannon. This week we're just gonna change that. We're gonna cut bait on that one and it's just gonna be business show co or business show if we can get it over there on Facebook. So we will announce that at the beginning of the next episode. But we're just gonna fix that problem because I want to start listing like all these great books that Kellen, you know, so we gotta have the right home for that.

So I'm with you.

All right, sweet. We'll see you next week, folks. Shannon. Thanks, Kellen. Thanks everyone listening. Thank you so much. Looking forward to hearing from you and.

We'Ll see you next time.

Take care, everybody. It.