2148 - Reframing Success through Mindfulness with Pentane's Adam Callinan

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1:07With us right now, it's Adam Callanan. Adam, you are the founder and CEO of Pentane. You are found on the web at pentane.com. That's P-E-N-T-A-N-E.com. You're also the host of the new podcast, Growth Mavericks Disrupting Default. Well, Adam, it's great to have you. Thanks for having me, Josh. Excited to be here. Yes, absolutely. So as we get going here, What have you been doing for fun lately? Are there any TV shows or movies you've been watching, music, anything of that nature? You know, I spend an incredible amount of time in the woods doing woods things. I live in Montana, so we have a lot of access to that, which is a strictly no technology zone with the caveat of having the things to get yourself out of trouble if you need to.

1:56From a music standpoint, I have a pretty diverse musical skill set that covers everything from, you know, rap and classical to, uh, I've been listening recently. I've been meditating to Tibetan throat singing, which is an interesting thing that has been super fascinating. Um, yeah, I mean, do you find that the, do you find that the music aids in, in meditation? I have, it's a new thing and I have found it to be a really nice new take and twist on what I was what I've been doing for the last 10 years. So it's just sort of, I haven't explored a lot around the world of meditation. And I was actually listening to a podcast with Sian Bannister recently, who's from my hometown of Flagstaff, Arizona.

2:43And she brought up Tibetan throat singing. And I was like, I can't hear something called Tibetan throat singing and not go down that rabbit hole. So I've gone down the rabbit hole. And I do think it is interesting for me, maybe not as a do it all the time forever thing, as a thing to integrate into sort of a 10 or 20 minutes of quiet. Yeah. Well, I think like many people, I have one of those very, very active brains and meditation has always been pretty challenging for me. So I'm always open to hearing, you know, maybe things that might work for someone that's blessed with a brain like mine. So, and I wonder if that, you know, the kind of the brain then starts to associate then, you know, with that and that when it hears it, it's reminded then to kind of let go of some of that, you know, kind of the monkey mind.

3:39Yeah, I have seen that as a big positive impact is it actually gives you something to focus on. so after after only a handful maybe five a handful of of 10 or 20 minute you know sessions with your earbuds in or whatnot i find now that when i when i turn that on it immediately like triggers me into that mode which is not typically how meditation has worked for me in the past i also have a pretty busy monkey so yeah i mean that's what meditation is for right is to try to get control of that busy monkey mind when you can. Yeah. All right. Monkey minders unite. All right. Well, Adam, I'd love to hear about the work that you do.

4:17Yeah. Pentane comes from my experience as an e-com founder. My last company was a company called Bottle Keeper. We were adamant from prior company scar tissue that we build it really lean, really efficient. I wanted to have no employees, frankly. And we did that really well. We got in just three years, we got to 8 million in sales with no employees, no investors. It was completely bootstrapped, super efficient. We really understood how operational finance and marketing have to work together. Advertising have to work together in order to drive profitable revenue. And that was just us solving problems.

4:49Fast forward, that company got acquired in 2021 by private equity. And I advised a few companies that we had invested in and realized that they too did not really understand how to make money. They didn't understand the link between how they spent money on the expense, the fixed and variable expense side, and how they made money on the revenue and advertising side. And so I rebuilt some of the things that we did at Bottle Keeper really well in a much cleaner, leaner, sexier way. And it completely changed the way that those businesses operated. So Pentane is a SaaS platform that takes the messy spreadsheets and manual data input and automates all of that into a really helpful directive platform for a brand.

5:32I mean, it quite literally tells you exactly what to do. If you want to break even, it says, go do these five things. If you want to get to a 10 % net margin, go do these five things. It's very, very specific. Wow. Okay. Well, do you mind kind of pulling back the curtain and let's get into some of how that can be figured out? Yeah, it's all math. I'm amongst a backcountry monkey. I am also a massive nerd. I mean, pentane itself is a five carbon molecule. My degree was in molecular and cellular biology. So I have a pretty heavy math background and I wrote, it was my cousin and I, I Bottle Caper wrote all the math for all those systems that we ran the company on for the entirety of our owning it.

6:12And so I rewrote all of the math in a much better, cleaner, more functional way. And what happens when you pull in the expense data from a business? So, for example, via API, you connect your QuickBooks account. And that integration pulls in the necessary expense information about how the company spends money, what the payroll is, what your office expenses are, your cost of goods, your shipping and fulfillment, all these things, you know, that exists in a business. And then it applies a lot of math, some complex, some not that complex with your revenue and advertising. And it, from that, we can literally, this math is the answer.

6:50Like it can literally tell you exactly what to do. So again, for example, if you're the system, you say, I want to generate a 5 % net margin, it can mathematically back out. You need to cut your expenses by$12 ,482, or you need to increase your prices by 3.4%, or you need to increase your conversion rate from 1.2 to 1.7, or increase ad spend to$102 ,000 at a 3.4 return on ad spend. What you're talking about sounds insanely simple, right? Where are we as humans messing this up? Because I think that all of us would agree, well, yeah, no, right, that math tracks, but we might not think to actually do that.

7:29Why? Why? The point is that it's complicated. The whole purpose of the system is to simplify that complex, the complexity that comes with all of that math. And I mean, again, going back to bottle keeper, because we had no employees, I had to run every single position in the company. So I had to do the marketing. I had to build the website. I had to write the content. I had to shoot the videos. I had to build all of the ad campaigns and advertising. So I was doing all those things from the standpoint of CEO trying to build a profitable company. So it's, it really is when you have to have the financial side combined with the customer acquisition side in order to get that clarity.

8:04And the point of the system, like that we're in iteration two of the system. The first iteration was just, here's all the data, figure it out. The second iteration is, here's the data. Here's exactly what to go and do with it. And it is quite literally the simplification of all of that complexity. That is the point of the product. Yeah. Do you, Adam, so tell me how you work or how you engage with folks? I mean, like, or how this fits in? They might be looking at something like this. Is this kind of just like a separate tool? How do they integrate? I guess I'm just curious about how it works. Yeah.

8:45So a typical, our, you know, our typical client is a 15, technically it's a one to 50 million, but they're generally 10 to 20 million revenue consumer brands. They have a Shopify account. They have an Amazon account. They use QuickBooks. They're advertising on meta, TikTok, Pinterest, Google ads. So they takes 10 minutes for them to onboard. They go through, they click the buttons, it connects all those things. And then it starts answering questions. And there's, there are three main parts to the system. One is just really a straight real-time executive dashboard, which sounds trivial. It's actually not that trivial.

9:18There are a lot of dashboards. Most of them, frankly, are just flat inaccurate. And they use terms like net profit massively incorrectly from an accounting standpoint. But again, seeing the data is helpful. What you do with the data is really important. So there's a guidance system that allows all of those things that I mentioned about that go do this, this, this, and this. It allows the user to go in and pull all those levers either at the same time or independently. and then slide this sort of ad spend slider down a graph and see how the business changes as they spend more ad dollars or less ad dollars, how it needs to perform to get to break even, what happens if they add a new employee for 10 ,000 a month, what happens if they do a 10 % discount?

9:59All of those things can be inputted into this to gain that clarity, really simplify. Again, there's a lot of complex math to get to that point, but to really simplify telling them exactly what to do so they can make smarter, better, faster decisions and not have to wait until they get into P &L next month to see if what they did was good or not. Well, I don't think I need to state this too vocally. I mean, we're in a stage of rapid innovation right now. Everything just seems to be accelerating at a pace never before unseen on the planet. AI is kind of compounding that change. How do you think this all fits in with this rapid pace of innovation happening right now?

10:44Well, I mean, from a development standpoint, we're certainly able to produce product much faster and less expensive, which is a beautiful thing from a cost standpoint. You know, I think in our position, we, Pentain has so much information about what, you know, the company is doing or not doing. There's incredible opportunity to build AI systems, to be able to pull out from all of that data, things that algebra and calculus can't find. I'm really reticent to just bolt on an AI thing and call it an AI thing. That's what everybody's doing right now. And I think that is ridiculous and not, and not useful, not helpful.

11:20I mean, maybe if it helps you raise money and that's what you're into, great. But I'm not going to do that until we have a really significant, massive use case for that. I mean, I'm using AI all the time personally and in business as I go and build and do. But I mean, there's no question that AI is, you know, we are in a golden era, the likes of which have never been seen. So we will certainly be participating in that. Yeah. Yeah. Your new podcast, Growth Mavericks, Disrupting Default. Can you tell me about the kind of the mission or what your hope is with the podcast and who you'll be chatting with?

11:58Absolutely. There are two types of people I'll be chatting with. And I actually, I'll explain that in a second. The purpose of the podcast is two parts. The first is to talk with consumer brand founders and founders in general about the tactical parts of their business that are working and more talk about the things that are not working. We as entrepreneurs have a tendency to only talk about the good stuff. And that is a massive waste of time. It's not helpful to anybody. It feels nice and that's great, but it's not useful. The other part of the podcast is to delve into the topics around being, getting comfortable, being uncomfortable.

12:36What are the things that, that you as an operator, as a business person, as a mom and a dad and a, you know, whatever you are in life, what are the things that you do to push yourself beyond your limits and break out of comfort zones? Because the more that you can do that and the more you can build, um, anti-fragility, the more you can build durability, the more you can withstand the massive up and downs that come with being a founder, which means the longer you can last in the game, which means the more opportunity you have for that outlier event, you know, that is your first hockey stick. I mean, you know, companies fail when people quit and people quit for all sorts of reasons, but, but a lot of that in a question is stress related.

13:14So how do we build durability to be able to withstand that stuff better? And I think that being, being very physical is a great way to do that. So speaking with people about that. Yeah. You know, I wanted to get back, kind of take it, you know, back to what you talked about at the very beginning, you mentioned how much you love getting away from tech. for just kind of having that period where you're tech less. For leaders that may be listening, can you share maybe just your thoughts on that and how that might help us so that when we are expected to be on, that maybe it can help bring a little bit more balance?

13:56I don't know what are some of the benefits that you've gotten from that as a leader? I don't think anybody this day and age can question that our phones are generally bad for us. Now, there are lots of arguments on both sides. I mean, they clearly have massively increased productivity, and that's good and great and grand, but like social media and all the things that we get clickbaited into constantly are not generally good for our brands. Getting away from that in any way you can is going to be net positive, no questions asked. Now, if you can get away from them and also get out in nature, interesting things happen.

14:33You know, going for a 10 or 20 minute walk is awesome. Going for a three-day backcountry, you know, horse hunt is a life-altering experience because it's hard. Everything is difficult. And you come back from that completely desensitized to the trivial challenges that we face every single day in our lives. And in that environment, and granted, again, I live in Montana. I get to do this stuff whenever I want to, for the most part, in that environment, there's no cell reception. Like your phone has no use outside of to take a, you know, the occasional picture. So doing things like that a couple of times a year, I think are really, really, really helpful and important and have massively changed, you know, my life, certainly over the course of the last five years.

15:20I have found so much joy lately in this, you know, chop wood, carry water. I mean, just really, you know, enjoying simple work, you know, of my herb garden and learning how to make sourdough bread and, you know, you know, engaging in every DIY project in the home I could possibly conceive of. And that to me, I feel like has just made me when I am expected to be on, has really allowed me to maintain focus just so much better. I don't know if you experienced that as well. Absolutely. I mean, after bottle keeper acquisition, I got advice from a wise sage to not go and just do another startup because naturally that's what you want to do.

16:07And so I took time and I got into carpentry and I found out that I really enjoyed building things with my hands. So I went now, like I built a mudroom. I built my daughter a bed. I built that Montana sign. Like I just went nuts in carpentry and it opened up this whole other creative aspect of my life and, you know, and doing something with your hands that, I mean, look, if you're a plumber for a living, it probably doesn't apply to you. But if you're a technologist, if you're in a SaaS company, if you're an entrepreneur, the chances are you're spending most of your time doing what we're doing right now.

16:38You're on a screen, you're in a computer and being able to supplement that with, with hard work and, and using your hands in a different part of your brand, I think is, for me, has been tremendously valuable. Yeah. Adam, who should be, you know, getting back to your day job, who should be reaching out to Pentain and what does, what does, you know, discovery look like? Yeah. Our, again, our, our ICP today, and to be clear, the math inside of Pentain applies to every business on the planet. It's the same math for ExxonMobil as it is a landscape company, as it is a dry cleaner, as it is for Bottle Keeper.

17:14We're focused on consumer brands because that's where I can be the most helpful given my most recent experience. But in that one to$40,$50 million consumer brand range, if you're, if you're like the number one thing, if you're arbitrarily setting ad budgets, as in an accountant, a CFO, a founder is just saying, we're going to spend X,$50 ,000 a month. And you don't have a mathematical reason or justification for that number, I absolutely guarantee you you're doing it wrong. The result of which is that you're probably underspending for what your business needs to make enough revenue to even have the chance of getting to break even or accomplishing your net margin goals.

17:54Because it's an emotional reaction to ad spend is an expense. And it's a scary expense because we don't know how it needs to perform. We don't know what good looks like. And so math answers those questions. Pentain answers those questions. And I mean, that's the most upfront version. Most companies that are spending money online are just have a tendency to be arbitrarily setting ad budgets. And that's extremely dangerous. They can't see what's going on in their business. They don't know what do good looks like. Within Pentain, we have systems that will tell you exactly if whatever you're doing is working or not.

18:31If you are starting a new marketing system. You're going to try to free shipping. You're going to go to a new agency. You're going to do whatever. Like the answer to that, don't let this word freak you out. Don't black out is called contribution margin. Now you don't need to know what contribution margin is. I'm past trying to convince everybody that, that they have to mathematically understand contribution margin. But what you do need to do is look at a graph of contribution margin and see if it's trending up or down. If it's trending up, it's working. If it's trending down, it's not working, but you want to know that while it's happening.

19:01You don't want to discover that six weeks from now when you get a P &L. So there are a lot of systems inside of Pentane that really simplify these complex concepts to help other brand operators answer questions that are difficult to answer. And in some cases, they may not even know the question to ask. Adam Kellen, and again, founder of Pentane, your website is pentane.com. By the way, I don't know that we mentioned this explicitly, but this solution works for startups all the way through enterprise. And it can kind of adjust with you, which is rather unique. So again, that's at Pentane.com. And again, the new podcast, Growth Mavericks, Disrupting Default, which you can find in your podcast player right now.

19:47Adam, it's been a great conversation. Thank you so much for joining us. Thanks for having me, Josh.

19:57Thanks for listening to the Thoughtful Entrepreneur Show. If you are a thoughtful business owner or professional who would like to be on this daily program, please visit upmyinfluence.com and click on podcast. We believe that every person has a message that can positively impact the world. We love our community who listens and shares our program every day. Together, we are empowering one another as thoughtful leaders. And as I mentioned at the beginning of this program, if you're looking for introductions to partners, investors, influencers, and clients, I have had private conversations with over 2 ,000 leaders asking them where their best business comes from.

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