Episode 279: Find Niches in the Market and Make Them Yours with the CEO of Botkeeper Enrico Palme...

Welcome to this episode of the Million Dollar Mastermind. I'm Larry Weddell and before we get started, if you want to know exactly how to win again and again, go to Wydell on winning.com webinar now to watch something I've put together for you. Now let's get going into this episode of Million Dollar Mastermind.

I am here with founder and CEO of Bot Keeper and that is Enrico Palmerino. Enrico is running an incredible operation in the bookkeeping for account business and in fact 300 full time employees and the company is just founded in 2018. They are rolling. And congratulations on your success so early with your new business there Enrico.

Thank you Larry. Very much appreciated. Yeah, and we haven't quite only started in 2018. We actually launched at the beginning of 2016. But it wasn't until the end of 2018 or 2019 that we rolled out the platform for our accountants. That is certainly only a couple years out there, but it's been an awesome journey.

Tell me about that story. Now you were in a couple of things. You've been a CEO of Think Light, which is a lighting efficiency company and then you moved up to co owner managing director of SmartBooks outsourced bookkeeping and accounting service. And now you, you, you've taken all of that and building something really, really substantial now it looks like, yeah, it's.

Been, been an amazing journey for sure. So I, I come from a quant background so I went to college at Babson and Think Light was call it the founding of a solution for a problem in the lighting and accounting sector. So we built some software that automated how you do lighting analysis and design. The business took off. We were doing 8 and a half plus million in ARR by the time I was a senior. So it was a crazy college journey. And then I had a great exit that came out of that biggest headache was our accounting. And so I then kind of threw my hat into the accounting arena, joined SmartBooks, grew the firm quite a bit over the next few years to 40 plus employees and a really solid cloud accounting practice and then ran into I'd say some of the headaches and hurdles that faced the entire industry as a whole, which was human capital like the accountants are in short supply but in super high demand. So fewer and fewer people are going into accounting year over year. It's like down 20% consecutively year over year. The average age of an accountant is 55, 72% of accountants that leave an accounting job leave the industry altogether. And the starting wages for an accountant just jumped 20% at the beginning of this year. So you're seeing a lot of strain on the accounting industry and accounting firms alike. All the while the demand is just growing exponentially. So even though the supply is shrinking, the demand for financial services is expanding at the same velocity that new business formation is happening. And that's an exponential curve. So you take those two things together and you have this major headache and problem. You have all these businesses wanting your services, but not the people that do it. And that's where the idea for botkeeper came to be, which was let's build a platform for you to run and manage a bookkeeping practice on. Be the first of its kind. So there wasn't any other CAS client accounting services platform, AKA bookkeeping out there for you to build and scale a business on. And then two, if, if that platform did what it was supposed to, which was be a management solution, but also unify all these disparate apps out in the market and, and allow access in an automated fashion to the financial data of the businesses and allow you to relay back to them, you know, process accounting. You could take that data exchange or platform, marry in machine learning and AI and actually automate away a lot of the processing whereby which both of those together free up the human capital constraints because you're allowing a human to do way more than they could otherwise do. The skills, critical thinking, complex accounting, but automate away a lot of the manual tedious, kind of mundane, basic bookkeeping. Yeah.

And what school was this? What college?

I went to Babson College in Massachusetts. And.

What were you studying that caused you to. Was it, were you in an entrepreneurial business management type program?

So Babson happens to be ranked number one in the world for entrepreneurship. I happen to also be in eTower, which was the top 21 entrepreneurs on campus. It's an amazing community. It's kind of like a fraternity slash sorority because there's men and women, but you get voted in, so you had to apply for membership. You get voted in based on your credentials, pedigree and kind of like you as a person whether they believe you're going to achieve what you set out to, but they also voted out every semester two individuals who were basically the weakest links. So it's kind of like survivor for being an entrepreneur. So I was doing that and then I was also taking. I graduated with a triple concentration or triple major in quantitative methods, strategic management and entrepreneurship.

Wow. And how did, was this growing up, was it likely or unlikely that you ended up on a career path like this? What did you have in mind for yourself growing up?

So back as early as, I think it was my first grade class, you're kind of asked by your professor to draw a photo of know what you want to be when you get older. My mom, I think, still has it today. It's. I drew an image of, like, this individual wearing kind of like a. My best rendering stick figures, right? This person wearing, like a suit and carrying a briefcase. And I wrote on the top of the paper, CEO. So I'd say I think I probably always thought and wanted to be a business owner. And as early as a kid, you know, I was selling candy bars at sports games. I was vending hot dogs at a supermarket with, like, my own little hot dog stand. I was buying gumball machines and placing them in stores and bought a truck equipment and employed some friends to do landscaping. So I think I was just heading down the path, I think, since an early age.

Well, I think you were not a business prodigy. You're like a young business psycho. It sounds like.

What can I say? Business is my. You know, some people have, like, you know, a sport of choice. I feel like business is my.

Well, I was trying to think when. What. At what age did I first hear CEO? And not only had you heard of it, you wanted to be one at age five.

Yeah. I watched how my. Both of my grandfathers and my dad, you know, had my. So my grandfather on my dad's side, he built a plaza and a supermarket and then, you know, like, multiple supermarkets and stuff. And I watched the community impact that he had. It was just, like, so cool to have this thing that, you know, he had started and, you know, obviously, like, assembled, like, you know, the bricks, you know, that came together and then the business and employing a lot of people. And he did a lot of, like, you know, charitable and donations and stuff for the community and just the impact that he had. And everyone knew him, so he's like a local celebrity, which was so cool. And then my grandfather on my mom's side had started an agri, like an agriculture distribution business. And it was like the exact opposite. Where from on my dad's side, that grandfather was like, you know, the work demanded a ton. Like, it was just tons of hours. Like, running a supermarket is just crazy hours and time. And my dad ended up taking over, too. So I watched that firsthand. But the grant. My grandfather on my mother's side, he had figured out a way to build a business that was like, just him and, like, some contractors and vendors. But I had the Ability to, like, work from home and crazy amount of flexibility and like, you know, sold it and retired early. And I kind of just had this vision for, like, how do I do both? Right. And. And that's what I wanted to be. I wanted the flexibility. But I like the, you know, some level of control. I most importantly, just love the idea of the impact.

Hey, listen, there's a lot of information online, but there aren't a lot of people who have actually done something. In my case, I've actually built a successful business, has accrued over $5 billion in assets under management, and has done well even during trying times. Now, if you want to know exactly how I've done this, go to whiteellawinning.com Webina Aren't Now I've compressed a decade of learning into five short weeks. Just for those of you who want to give yourself an incredible advantage and are tired of waiting and watching others move up.

Yeah.

And what skill sets were you developing as you came up? Were you thinking of those terms or you just trying to get as many. Try as many different businesses do as many different things, learn as much as you possibly could to put you in a position to be successful like that.

So I think I gravitated to math and I like speaking or I like, you know, communication. You could say I got in trouble a lot in class for talking when I probably shouldn't have. But I think, you know, two skill sets, like one fundamental principle is just being able to sell, right? Communicate people. But two, and the foundation to being able to sell is solving a problem and being able to problem solve, find a gap or a need and meet it. And, you know, and that's one of the reasons why I gravitated to math was I love problem solving. And whether it was vending candy and drinks and stuff like that at sports games, like problem I was solving was people were here out in a field and hungry and. And there's no place to go. There's no, like, outdoor vending machine. So a little stand and selling concessions and stuff solved that need. And I had to be able to converse and sell people on, you know, whatever products I was selling them and also identify, like, the ones that people would want that I didn't have and need to make sure I come back to the next game with. And then math, you know, I loved the algorithms. And then I started to, I think, just gravitate to. I love the idea that you could use mathematical equations to automate processes. And I thought that was just beautiful streamlining and automating Things. This idea of machines and software was cool, and that's kind of, since then, where I continue to gravitate today. But all fundamentally rooted in problem solving.

Well, it obviously helps inform your decision making to move in the right direction as much as possible when you know where you want to end up. And you having set your sail towards having your own thing, being your own.

Company.

It probably wasn't an accident that you wound up, you know, I don't know that college in Massachusetts. Baxton, Babson.

B, A, B, S, O, N. Yeah, it's, it's small. I mean, it's like only 1200 students.

Okay.

I don't feel. I think.

I don't feel so bad now.

Yeah, it's, it's, it's small. They definitely have a lot of prestige around entrepreneurship and are, you know, like, globally ranked.

How'd you find. How'd you even find, you know, how did you even. Did you go on a hunt or had some, some of your family members been to Babson?

To.

Where are you out looking for the number one entrepreneurial school? How did you up there?

So I started looking for the number one business school. So I was looking at, you know, like Ivy Leagues, like Vanderbilt, like, just Wharton. I was looking at, like, those, you know, schools like that. And along the way, I was catching up with a buddy who happened to be on the tennis team with me. And he's like, oh, Enrico, where are you applying? And I was like, oh, I'm looking here. He's like, well, what are you looking for? Like, those are. There's a very wide range in size and feel location of those schools. Like, what. What's your. What do you care about? I told him, I just, wherever I go, I just want to go to the number one place. Like, I just, like, I'm a competitive person by nature, so I wanted to go the best. And he said, well, that's your criteria. And I told him, best business school. He was like, well, have you heard of Babson? They're number one in entrepreneurship. And then that was like the instant click. Like, it was like, well, entrepreneurship is more aligned with what I really want to be versus call it like business because it's more broad set, not this, like, idea of like starting something and taking it from the ground up. And then I, you know, I went, did research, you know, went on campus and, you know, I think shadowed a class and I applied early decision and went there. I applied early action too, as like Bentley and Bryant as well, just because they were also local.

Coming out of that because, you know, people, the idea of this is to talk about winning and lessons you've learned about winning by, you know, real world experience. But the, you know, people can't listen to this and they're, they're looking for what can I do, you know, what can I do that I'm missing and everything. And now one thing they can't do. Probably for most people, it's too late to go and try and get into Babson. But the thing is they can pick up the things that you learned about how to think, how to problem solve coming out of a school. What makes them number one in entrepreneurship? What would distinguish themselves and what, how, you know, what advantage did you get by going to that school? And did they, did they deliver on that promise?

I talk about them quite a bit, so. And I don't think I would, I would do that if they didn't deliver on. I definitely owe a lot of my success to Babson predominantly because, like, the thing that distinguished them was they preach and practice this idea and concept of entrepreneurship in action and thought in action. And so I found that like comparing my education to some of my buddies, a lot of their courses were taught by, you know, say like professors and academia, academics. And it was philosophy, philosophy and theory. And Babson was very much taught. A lot of my professors were like major lawyers that are like professors. They were like the head of marketing at Coca Cola or something like that that's now teaching the course. It was, you know, it was doers who had come back to teach and they also practiced the same philosophy in terms of how they, you learn. So it wasn't like theory and concept and case study and just it was actually due like, here's, you're going to go and group up with some students, you're going to put a pitch together. You're going to pitch the professors in class on your pitch. The winning teams will kind of make it to the winning pitches will make it to the finals. And then depending on how you did in the finals, you get awarded between 500 and, you know, at the time I think it was like $3,500 in cash to start the business that you pitched. And then you'd have to like wrangle and assemble the team which were your students, and then get out there and start the business and generate revenue and money and manage expenses and ideally at the end of the semester have generated multiples more than the money that went into the company. And all that money then went into charity and other stuff. And you got to pick the charitable foundation that it went to. And so it was just, like, right out of the gate. And that was literally my freshman year first semester. That was how it started. So you do that. And then, you know, I tried, like, granted, I've had a couple of successes, but I've also incorporated, I think, 13 other companies that are, you know, nothing to write home about. And, you know, but along the way, I was spending time with my law professor after class saying, can you help me with the contracts that I'm working on for my lighting company? I was spending time with my marketing professor around, like, messaging and, like, how we structure brochures or spending time with, you know, my macroeconomic professor on, like, the business model and, like, the managerial accounting behind it. So, you know, I think, like, the key, honestly, is find people who've been successful, and it's like, you know, gain their assistance in whatever way you can to learn from their mistakes. Because, trust me, I've made more mistakes than I think most people to get to this point.

Yeah, and the quicker you could learn that, the better, because it takes a lot of moving parts to do anything great. A lot of people involved, and there's nobody knows everything. And so the quicker you get past this thing that it's. I've got to come up with, with all the ideas, the quicker you could move forward.

If you enjoyed what you've heard and are dead serious about finding out for yourself exactly how this works in the real world. I've taken the most valuable business lessons I've learned over 40 years and put them into something for you to watch. Go to whiteellawinning.com webinar now in order to move up as fast as possible. I'm Larry Wydell, and I run the Million Dollar Mastermind. Go, go, go.