My Favourite Failure: I didn't know my limitations - Mike Connolly

0:00I'm going to level with you. I'm not the best manager in the world. I'm a decent coach, but management is my co-founders thing, not mine. And thank god for that, because developing your team is one of the single most high-leverage things you can do as a leader. Which is why I'm really happy we're working with Personio. They're the all-in-one HR platform you need to handle everything, from hiring to onboarding, handling absences to managing compensation. Their features touch every point of the employee lifecycle, from onboarding right through to exit interviews. And because they automate so much of the boring but necessary HR admin, you and your managers can focus on getting the best out of your people.

0:40So, if you're leading a growing business and want to spend less time on HR admin, then book a demo at personio.com forward slash secret leaders. That's personio.com forward slash secret leaders. There's a link in the show notes. Hello and welcome to Secret Leaders. Many founders begin their entrepreneurial careers after first excelling as employees. Confident in their abilities, they think, if I can do this for others, why not go out on my own? But the shift from employee to entrepreneur is not just about working for yourself instead of someone else. More crucially, it is a transition from having a team around you to suddenly being alone.

1:25And few people possess every skill needed to build a successful business themselves. As a fairly successful salesman, ventured out on my own into the world of telecoms from stumbling into the industry, thought that I could do it all, went in with a bit of a cocky attitude and a can -do attitude, and unfortunately fell flat on my face in the beginning.

1:58Mike Connolly was working for sales for a telecommunications company. He was doing well at his job and making good money, the most money he'd ever made in his life. At the time, it was such a good gig that he even recruited an acquaintance of his, Jamie, to join him. Very good friend of mine called Jamie, who I brought into my old employer, who is an operations guru, a tech guru, and very, very strong background in that area. He basically, within two years, become a director of that company that we are working for because he's that much of a genius. And he was only 21 at the time. They made him operations director and gave him shares in the company.

2:37That gives you an understanding of how much of a superstar this kid is. This was all going well for both of them for a while. But after some changes at the company, Mike decided that he could give it a go himself. My attitude once I had a commission only role, I was the CEO and co-founder of my own personal individual business. I was in control every day of going to appointments and making sure that I brought money in through the door to survive essentially. If I didn't sell, no, the lights wouldn't be on at home. So from already living and breathing that mentality, that is the exact same mentality as a business owner.

3:18So the transition for me at that point was like, I'm already taking the risk. So surely I should just take the risk to do it for myself. The risk versus reward was exponential. So I took it upon myself to basically decide that I was going to at all costs, go out and set up my own telecoms firm on my own. so took the big risk um and set up a small firm called simple cloud communications i had no knowledge of how to operate these systems i had no knowledge on how to install these systems i had no knowledge on how to manage customers i had no operational background i just had a can-do attitude as well i've seen other people in this in these departments at these other companies doing this if they can do it i can do it having proved himself a successful salesman, he knew he'd be able to get clients signed up.

4:12And as it turns out, he was right. The first couple of months was very well. We brought on a good amount of clients. I was literally booking, sitting and selling my appointments. And then afterwards, I was in servicing. And then that's where it fell off. Because obviously, I was out selling to other customers. I was telemarketing to book appointments on the other occasions. and then it was then trying to cram in support. Now, the toughest thing for me in any business I would ever be in or any role I've ever had in any company is making sure that the customer that you've sold to is looked after.

4:49I have a huge sense of guilt if I was to ever sell to a business where I couldn't service them properly. And that is when it started to settle in. I think it's safe to say Mike was a bit out over his skis here. He'd gone out on his own venture, confident he'd be able to get the clients and figure the rest out. But the rest was not getting figured out. Even after teaching himself the technical side of the job on the weekends, Mike didn't have the time or skill to continue to serve his clients. So we eventually took the plunge and hired an engineer to come and work for us. He was selling a very similar solution on the same business model and same sort of hardware and that side of things.

5:30So it should have been a like-for-like fit. but the people managing this individual previously knew how to manage how to do the configuration and were basically like a fountain of knowledge for this engineer should this engineer need any additional help obviously i couldn't provide that we bumbled along for many many months i changed engineer and eventually i i sort of lost my confidence in honesty was selling to selling to customers that I knew I couldn't service. And we were pretty much at breaking point to the point where it's actually, are we going to continue with this business or are we going to have to jack it in?

6:12And actually, it's transpired that my business partner in the background was actually punting the customer base that we'd acquired to other local businesses to see if they could obviously sell the customers on and cash out from their investment because we'd lost a significant amount of money at that point. I think we must have been about just over 60 grand in the red from overheads because our overheads got over sort of 12 grand a month at that point with all of the staff and offices and all that sort of things. So it was literally at the point then when it was do or die. And I remember going on holiday with my wife and we were contemplating, what can I do?

6:51And in my head, I was like, I cannot quit this. There is no way I'm going to give up going back working for someone. I know that this can work. Because previously, in my old role, I had a very good close rate. I was on way above industry average on closing. I was bringing decent money for the company, decent money myself. So I know I can sell. The major issue with this here is the back-end operational piece, which I am massively struggling with. If I can find someone that we could bring into this business to partner with us and then have a share of the company and make that part of the business their own and their baby, we're going to make a success of it.

7:3060K in the hole, client list being sold off. At this point, the only thing that could save Mike and this company from going completely under would be, I don't know, a brilliant technician who wanted to co-own the business? And just out of luck, I don't know how the timing could have been more perfect. Jamie, he messaged me and said, let's have a chat and basically said, look, I'm really unhappy. where I am and let's have a chat about doing something. Literally. We kept in touch. Every sort of three to six months, I'd maybe give Jamie a call and say, look, I'm struggling on this element with the customer.

8:07Will you give me some advice? And reluctantly he was because he was so invested into this particular firm at the time, which he would help me out because I was a friend. And then eventually I could hear in his voice he was getting fed up with me. And then little did I know in the background, he was also getting fed up with his current incumbent. So it was just like the stars of the line at the right time. And then we had a conversation. He bought a property, remortgaged, and he had some cash there because he was going to invest in the second property. But rather than doing that investment, Jamie put out my old investors and Zappi was formed.

8:46Zappi's doing great now. A growing team, nearly 2 million in turnover in their first year. And while Mike's original company, Simple Cloud Communications, never fully officially closed shop, Mike learned that sometimes the difference between things working and not working is one piece. And sometimes that piece is the right person. The fact of the matter is, is that we both knew how to make this work in telecoms in our own respected roles and skill sets. I knew how to bring on customers with sales and Jamie knew how to service customers, how to install the customer systems and how to manage all of the back-end operations of the business because that was what he was doing.

9:30So it was sort of, it was like salt and pepper. We both had our own individual qualities, but together it made a fantastic blend, right?

9:43that's it for this episode i want to thank mike for sharing his story and advice and you thanks for listening i've been your host dan murray surter i'll see you next time