Cameron’s Live Coaching Call with Robert Kinsler, CEO United Fray

Really focus for the next year to 18 months about growing the skills of your people, really growing the skills of your managers and leaders. Because if you really invest in their skill sets, that's what's going to help you scale the company, right? So it's you caring about their lives, caring about them as leaders because you'll grow your skills. But if you can grow the five to seven key people in your company, your company goes to the moon. We've got Robert Kinsler from United Fray for a live coaching spot. This is something that I just decided to reach out and see who was going to go vulnerable and who's going to open up the kimono a little. And why don't you just tell us a little bit about what United Fray does just so we get some perspective and then we'll dive right in.

Yeah, absolutely. So, you know, the fluffy fun vision marketing language is that we make fun possible and we do that by creating and sharing fun things to do. So the creating got started about 13 years ago with adult sports leagues. We started off with a small skeeball league and have grown to 50,000 plus annual participants across three different markets. We've had times in our last 13 years where we were in more markets than that, but you know, waxing and waning based off of different opportunities. And so we're in three markets right now, got about a 30 person team on the extension of the creating side. Started with sports leagues, moved into event production. So public events, ticketed events, wine tasting, speed dating, river tubing, New Year's Eve parties, things like that that are fun for our community and that branched us into being hired to produce events for other people as well. That falls into two buckets. First bucket is team building, culture retreat, wellness rewards, and then separately utilizing the same fundamental skill set around experience creation and using that for community development, marketing, promotion, brands, activations, etc.

So you've got a fairly complicated business in terms of explaining can you break down where your revenues are? Like, can you give us kind of like an 8020 or 60, 40, 10 or 60, 3010 split on where your revenues come in from or is it really, really scattered across all those services?

Right when we got broke, the element that I was about to share is for the last five years or so here we've been moving into the sharing space, sharing fun things to do, which has really put us into via and content creation world, which is to continue to diversify our revenue. So I would say we're about 35 to 40% of revenue comes from our Traditional adult sports leagues. Another 35 to 40% comes from our event production work, being hired to produce events for others, and then the remaining amount comes in from advertising, marketing and items related to our content and media play. So the pie chart is moving towards equal thirds for each of the main three divisions. But certainly right now the events and the sports leagues have the best gross margins overall. Business. But the media is one of our longer term opportunities to build and create and really distinguishes us differently from other players in the market. The reality is there's not really anyone like us that's taken this unique task and we still have new things in evolution and development as well, including a membership model that's going really well. That's going to be a growing percentage of our revenue also.

Okay, the way I start all my normal coaching calls, I get the CEO to give me a bit basically a five minute update on the business in terms of what's going well, what's not going well, what you're working on over the next month and any areas you're stuck.

Sure. So what is going well is the continued redevelopment of the company post Covid. Covid was a dramatic shift for Frey. We're the antithesis of social distancing and so that was a difficult time for the company. We were fortunate that we had media as an extension that we had moved into about a year prior to Covid and that was something we were able to continue to focus on during that time. But since then, coming out of COVID it's really been about getting our feedback underneath us, understanding what the new posture looked like, what business was going to be returning. So we've done a good job of getting our sports leagues and event operations back into a good posture, understanding what our new environment is. What's going not so well is our challenges around monetization of media and really figuring out how media properly shows up to support the full company we've been working through. What does that really mean to support what we're doing. How do you do local media differently these days? Local media is under a lot of evolving stress around advertiser dollars and the way to make it profitable. And so we're playing in that space and we've got some wins, we've got some challenges as well. And then I think the other macro challenge that we're facing is really rebuilding the company into a space. We've gotten back now to where we were pre Covid. 30 plus full time employees. Different capabilities come with different personalities and a creative team versus a sports team versus an Events team, they all have to do their job differently. And so how those departments interact with one another, how we work to be as unsiloed as possible, is something that we're really leaning into because the silos just, they don't work, they're not conducive on any real level to achieving the mission at hand of the direction we're going. So that's been something we've been leaning into, having deep conversations with the team.

Where do you think you're really struggling right now and is there anything big you're working on over the next month?

My biggest struggle is that I am much more aligned with entrepreneurial strategy and vision than I am with building out the nitty gritty policies and processes and systems that will support where we want to go. I value them very much. I know that they need to be part of it, of how we get there. I can appreciate them very much. But I wouldn't say that the routine discipline and consistently applied execution is my strength. And so I rely heavily on my senior team to bring the, that program management, that project management to those initiatives. And the reality is that they've got one foot in operations as well. So they're straddling operations, get stuff done, the show must go on, and then also long term strategic planning. And I think that's hard for anyone to stand in both of those roles and to manage your time and to make that transition. So I would say from an organizational structure that's absolutely our biggest challenge is really maturing into this mid tier, young teenager style of business. Right. We've grown up from infancy to toddler to adolescent, and now we're coming into our like preteens and teens. And you got to develop different skills at that age than you had earlier. So that is the biggest challenge for sure. Just from a macro perspective, you also.

Went through some personal changes recently as well. How are those affecting you and have they affected you or are you back on track with everything?

Oh yeah, they absolutely affected me. At the beginning of the shutdown, just a couple months into the shutdown, I unfortunately had the distinction of being a Covid divorce statistic. And so that process started a couple months into Covid. A lot has been going on the last three years between Covid and the business and my personal life and my ability to compartmentalize and my strength around managing that sort of personal challenge has definitely grown just as out of necessity. I would give myself maybe a C plus B minus on how I've been able to manage both of those things while still Pushing forward in the business. My team has been a huge part of that, of us getting to where we're at and continuing the momentum. But we're certainly moving in the right direction.

Every single one of your employees is going through something too.

Oh, for sure.

And every single one of your employees struggles with something on a daily basis. And as we remove ourselves from the 15 person company into the 30, into the 50, into the 100 employee company, we tend to distance ourselves from the reality that all of our employees are struggling with the human condition in a deep way as well. A death in the family, a divorce they're going through, and financial issues. And I think if we as leaders can really stay connected to them as people and remember that they're struggling as bad as we are, we tend to vocalize how hard it is for us, but we really miss the reality that they're struggling too. And if you can be the leader that is so empathetic to them and their daily struggle and their daily lives and what they're really going through, they're going to go through brick walls for you to build the company. Every CEO who goes through divorce, goes through health issues, stays focused on themselves and forgets that every single employee is going through shit too.

For sure. Absolutely.

The reality is they're struggling with such deep shit and they have no one to turn to. And they don't have the skills or the money to be able to pay a counselor or pay a coach or get a physical trainer or take a vacation. They're really stuck in the middle of their shit. And as soon as you as a leader start to show up actually caring about their shit, and you'll be blown away with what starts to happen.

Well, the care has always been there. But you get certain quotes or certain ideas in your head that as an entrepreneur that you hear somebody say or you read somewhere, it frames the way you show up. Right. In a way that you may not realize or even until later on. You think back to the pros and cons of that. And someone very early on, somehow I got exposed to the idea of really keeping my distance, distance from my team and not crossing that friendship boundary line.

Yeah, that was a very 1980s way to run a company. Yeah.

And it's interesting because our kind of company is inherently built on friendship. You ask the average person why they enjoy working at Frey, it's because of their coworkers. They love their team, their friends. And so we have a very strong community and culture of friendship in our business, which has its pros and cons. Right. It's harder actually to hold your friends accountable than your non friends. Right. And so that creeps in now that.

99% of the humans use social media and we share our personal lives. We're out there. So we've already, we've already so massively blended it that there is no going back. And the reality is the closer you do blend it, the more that you're actually going to be trusted and liked by your people. So I'm just encouraging you to really to continue that because I think it's good. Do you find that the different businesses get messy at all? And how do you keep it clear for your employees, these products and services that are so different and then how do you split your time for that to make sure that you're not getting messy?

Yeah, it's a real challenge. Absolutely. There's a lot of common wisdom that we're running counter to or contrary to with the model. But there's also some elements, you know, if you look at, from good to great talks about the different models and whether or not you're. Was it a hedgehog he mentions?

Yeah, the hedgehog concept. Yeah.

And the thing that binds all of those services together is the expertise around experience, design and the focus on the mission of making fun possible. And fun means different things to different people. There's skill sets that go into it, they get utilized in different ways. And so there's a process and a philosophy, consistency through everything that we do that allows for them to work together. But from a logistical, operational perspective, there's no doubt that it's a challenge. Absolutely. And so that's what I've been leaning into on a macro level just the last two years is really figuring out how do we get all of these to operate under one roof, under one shared vision, and both operationally, culture wise, mindset wise. We've made some changes on the media side of things to address that. We've got some working concepts for how we're going to be doing our corporate planning for next year in a way that is much more integrated across all of our services.

And if you are product, if you were looking at each of these three different kind of core services that you've got, the way that I heard it was about three core services, could you think of each of them as their own operating pnl and do you have any of them that are stripping cash away? Is one of them just not doing well and stuck in cash for another? Or is one of them ready to spin off and sell where you can create more Cash, like at the end of the day, we only have three resources. We have people, we have time and we have money. And the key is, how do you get the highest return on investment of those three inputs? Because I've seen so many people that'll take, you know, cash from business one, and they pour it all into business two, thinking everything's okay, business just sucking so much time and cash out that they'd be better off just to kill it versus to keep throwing money at it. Like if you were running it all three on their own, would you keep running all three or would be like, oh, we're screwed on this business, I'm shutting it down.

It's a very astute question because I had to just make that exact call. And so I was alluding to changes on the media team. We started to transition about two weeks ago for the media team to move on to their next adventures. And really just the last year and a half, we've been leveling up our financial data to look at every each line as their own P and L. So we have P&Ls for each of the three primary divisions. We have a corporate cost center overhead. Those feet obviously, and really getting to a level of sophistication of having good data and understanding of exactly how each business line is running led to the hard decision that the media center was burning just too much cash, not sustainable. And I'm not surprised by that finding. I already knew gut wise that that's where we were at. But the question was, what kind of bump were we going to get after Covid? What sort of return of dollars from advertisers would be coming back? What sort of expenses did we have related to the production of that and would they catch up? And we went big, we swung for the fences. We had a full department. I didn't incrementally build media. I acquired a media operation and then invested heavily in it. And so we were playing big from the start. And some of the propositions and assumptions that we needed to come to realization didn't happen. And so the very hard decision was made to transition that team, the entire team.

It's also the payment factor that we need to look at.

Right?

Like I call it the PITA factor. Right. What's the PETA factor of that media business versus your entertainment? Like, you know, what's the PETA factor of working with all those people? What's the. Because we often look at it from a P and L perspective. But then there's also that the energy that we have to put into that and the people that we put into that. And that can either spin off very positive effects or very negative effects, right?

Yeah, absolutely. I mean, the people involved were wonderful human beings. There was a challenge though, of course, of working with them to get to where we needed to go because we didn't build it from scratch. There were pre existing thoughts and processes.

But you also talked about the complexity the business starts to feel when you pass the 30 employee mark. And when you go from 30 to the hundred, some of that complexity is because you've got 10 or 15 people that are part of a media company that you don't really need, that isn't really profitable. You strip that away and all of a sudden stuff gets easy again. Right. The PITA factor kind of disappears. And then you also have your time and your energy that you're split up. Right. It's almost like if you were dating three people, how much time are you really devoted to one person? When you're devoted to two others? You can't be. And I think we as leaders have to see that as an ROI suck on the business, that we've got to decide very critically with our projects and we often don't. You can take the same lesson and bring it into, you know, other projects. Right. It's kind of the Pareto principle, the 8020 rule that 80 of the results come from 20 of your focus, 80 of your results come from 20 of your clients. If you were spending more time with this construction company that is doing all the work for Amazon and getting more space, could you 10x you know, your core business versus spending your time and energy over here where you weren't even making money at it and it would like. So it's starting to think about your business that way as you scale, because your time is going to get stretched even more as you continue to scale the business.

Yeah. And that's the way that I really walk through that decision with the senior team. That was a point that I made, was that this isn't just a decision in connection with media. This is a decision connected to the time and resources and our opportunity cost of where we can invest our resources and time.

And yeah.

And the reality is that the cash burn that was happening from media was taking away resources, time and money, money from investing in the two parts of the business that are generating operating profits and doing well. And again, back to not incrementally building media, but acquiring a full operation. Right. And all of that overhead and all that structure and all of that legacy versus incrementally Building it, which is actually where we started. We started with the plan to incrementally build it. And this opportunity for the acquisition came open maybe six months later because I knew the publisher of the magazine, we had advertised with them in the past. I still don't think it was a very valid decision at the time to explore what that would mean and what direction. But it certainly exacerbated the level of complication of the business. It certainly divided our time, but we learned a lot. It's not a regret, it's just businesses don't fail by doing the wrong things. They fail by continuing to do the wrong things. And I would say this was the hardest decision I've had to make in the last 13 years of running this business, was sunsetting that department and product.

It's a lesson that I learned about 20 odd years ago I read the book Endurance about Ernest Shackleton actually going back 25 years. Now I don't know if you've read the story of Ernest Shackleton going to the Antarctic. So it's a true story. This explorer, 100 years ago, a boat filled with men, they get to the Antarctic and their ship wrecks on the ice and decide the ship starts to sink after a while and they have to live with these lifeboats flipped upside down. They live on ice floes in an island and two years later they're rescued. But about six months into their disaster, Shackleton, the captain of the boat, decides to shoot the dogs. And the dogs were like pets, but the reason they had to shoot the dogs where they were taking time and energy and food away from the men. And his job was to save the men, not save the dog. Every single person survived the mission. And I think that's kind of the leadership lesson of us looking across our companies is what are the dogs in the companies that we have to shoot so that you can spend your time and energy with your good employees, you can spend your time and energy with your good projects, your good customers, your good revenue streams. You talk about growing your people. Like as you scale the company when you're in the smaller company, the 10 to 30 range leaders can make decisions and not explain the why behind the what. Because the team doesn't need or have the sophistication to need the why. But as you start to scale the organization now, they need P and L responsibility, they need P and L visibility, they need visibility to the metrics and they need to understand some of our decision making. That's part of how you'll grow through this with them. This Month and over the next quarter is explaining it clearly that they didn't do anything wrong. It is just. It's us making a decision to put our people, time and money onto the core things that are going to give us the most return on time and money and people.

Yeah. And there were a lot of unknowns three years ago, four years ago, two years ago, a year ago. Right. That we were working through. And in the same way that they were growing and working through their skill development, the company was getting a better dip on the finances and I was getting out of divorce fog and all of these things kind of colluding. And I think the, you know, the unfortunate part is the reality is decision should have been made a lot sooner. Probably should have been made towards the end of last year, beginning of this year. But we also desperately wanted it to work. And so that process of being. Who is it? Stockdale, you know, endlessly optimistic about the future, but harshly realistic about the reality and where you're at and. And you have to be able to do both.

So you just touched on something that I think is really interesting, and it's that I don't want you and your company to create a culture where a person, you included, gets blamed for something. What we need to do is look for the underlying system that was missing or the system that was broken that allowed us to get to this stage. The great leadership team discussion is going to be what systems should we put in place to ensure that we make these decisions faster going forward? What systems can we put in place that would have had us making this decision nine months ago to work around the fog, to work around the analytics, to confront the brutal facts. I would then drop it down a level to all of the survivors, everybody who's still in your company, and say, what dogs can we shoot still? What projects are we working on that we can kill now, even though we're in the middle of them? What tasks do we work on day to day that are pointless, that we really don't need to do? What things are we spending too much time or money on that we can do faster or leaner or optimize or automate? And I think you could look across the organization and probably find my guess is 30% of your budget that you're. Of your expenses. You could actually consolidate and optimize and automate. Whether that be some more people that can get cut or things you're working on and then people's time. I'll bet you that if anybody's spending 40 hours a week, they can Optimize automate, say no to stuff, stop stuff that we've just been doing out of habit because it just doesn't need to be done anymore.

Yeah, I definitely think that would be an interesting project for the team to think about or a thought process. The interesting thing about our business is that the day to day that demands our attention really is so fundamental to the delivery of the product. Like the things that matter grab us, scream at us, pull us in. Because there's so much of what we do that is show business ultimately. Right. The show must go on, there must be a rep there, there must be an event producer there. We must have the ice. Right. So we spend a lot of time in that space. And you know, I would say I think we're probably on the softer side of having unnecessary fluff versus a typical business.

Another way to look at it as well is for you and your leadership team too, because I know you're in a couple of industry groups where you've got industry leaders from similar businesses that share ideas with each other. Could you reach out to others in your industry, competing or non competing, and look at some data points with them in terms of the number of revenue per employee, gross margin per employee, salaries as a percentage of revenue, do you compare those metrics? And then do you also compare those metrics retroactively quarter by quarter for the last three years? You know, are you gaining efficiency? It's hard because you kind of got a discount for Covid a little bit. But if you looked at, you know, this last 12 months versus the 12 months prior to Covid and you went quarter by quarter. So you compare 4/4 against 4/4 and look at those three metrics. Revenue per employee, gross margin per employee, and salaries as a percentage of revenue. The first two numbers you need to be increasing in terms of optimization. Right. Revenue and gross margin per employee have to be growing, otherwise we're getting bloated. And the other thing that happens when you get to the 30 employee mark and you've experienced this, I'm sure every first time or newer managers answer to every problem tends to be hire more people. Why is it that these early stage managers need another person, need another person. It's usually because they don't have the right skills. They have an inability to say no. They're not able to push back, they don't know how to manage conflict, they're not looking for optimization. People just get busy by being busy.

Right.

And I think you guys, as an opportunity, you're right. You probably are very efficient and probably Work hard. But until you measure that against others in your industry, we're guessing. Or at least measure against yourself. Right. To see if you're gaining efficiencies.

Absolutely. And leaning in, you know, one of our values is innovation and we, I focus and by extension the senior team and we're working every day to make our values more of our guide in life and not just, you know, pleasantries on the wall. Leaning into innovation and how can we do this better, faster, cheaper, with better customer experience. What does that look like? You know, it's one of the reasons why we have our own web platform and we don't use a third party because we do believe in the ability to make those innovations and the, and the strategic ed that it gives us. And you know, at times that's also hard though we want to say we're running three businesses. I'm also running a web development company here without a tech co founder. Right. So there's a lot on the plate here for Frey for us to get right, but we're moving in the right direction. It's super exciting to see, you know, this hard decision with media was the right one. It frees up a lot of mind space, a lot of mental capacity, resources, financial time, effort, all of those things to focus on the winning parts of the business.

How many employees do you have that work in customer service for the business currently?

So we have two people that are dedicated to customer experience is what we call them. And they're taking ownership of our membership concierge and membership administration as well. And we've just recently, I'd say in the last 12 months, really made the transition that they support the entire company, not just the sports operations.

Okay.

And so that's been a trend of the business is getting things more integrated and less siloed. But so two right now is the short answer.

Okay, so a good opportunity with this as well is going to look to how do you keep only two people working in this business area when you're three to four times the revenue that you are today, three to four times the members that you are today? Because there's only four reasons why we ever need customer service or customer experience people. Either our product sucks, our service sucks, we overset expectations with our customers, or the FAQs on our website aren't strong enough for people to solve their own problems. And you guys are at a stage where I'll bet you could really, really focus in around the FAQs. I was working with a client out of Austria a few years ago and she had 900 outstanding customer service requests. Big business, lots of people on the team. And I said, what are the requests? She goes, cameron, they're always the same. It's always the same. I'm like, okay, if they're always the same, fix the core underlying issue so that those people don't answer the same question seven more times this year.

My goal is to try to lower my, my experience lead to work on those things. I love the way that you laid out those four. So.

And the key is, the key is to solve the root problem. Right? So it's first principles, thinking and teaching them. First principles, thinking and teaching them to look. Because often what happens when they're new and when they're lower paid, they don't have the experience to solve the root problem, so they keep fixing the band aid solution. When do we ever phone Amazon with a problem? We don't. Because their FAQs on their website are so clear. We can solve every issue we ever have. And their product is good. They nail the timeline like they've just figured it all out. And I think you guys are at a stage now where if you spend the time and energy on that, as much as you're spending on your software platform, that all becomes gross margin as your company triples in revenue.

So, yeah. And really, how do we use our platform to improve those things? Right. And what would. What's the technology advantage that we have? And technology advantages for a business our size are tough.

Well, they're also huge.

Right.

So if you can.

They're huge when they're. Yeah. If you can figure them out, they're a differentiator.

I know you've got a lot of stuff that you're working through. Really focus for the next year to 18 months about growing the skills of your people, really growing the skills of your managers and leaders. Because if you really invest in their skill sets, that's what's going to help you scale the company. Right. So it's you caring about their lives, caring about them as leaders, because you'll grow your skills. But if you can grow the five to seven key people in your company, your company goes to the moon. So stay ahead of the curve as a coo. This next video is packed with great leadership lessons for you. It'll really help you as you continue in your growth.