“People are the secret to success in all that we do.”
Charlie Paparelli in Episode 16 coaches the RevPartners audience on the 3 Milestones of Team Building during the early stages of company growth. Building teams strategically is one of the greatest contributors to growth and something that Charlie has much experience in, with his 40+ years of building and investing in companies. He now gives back to the community by advising entrepreneurs. Following over 25 years in angel investing helping entrepreneurs achieve their dreams, Charlie accesses the knowledge and experience of fellow entrepreneurs by sharing stories through paparelli.com
Take 20 minutes to listen to the wisdom he shares to start strategically building your founding, leadership, and functional teams.
Then head back to the races! 🏁🏆
Pit Stop Highlights
- How critical it is to find a cofounder who shares your values and is as lit up about the mission, the market, and the product as you, the founder!
- The three questions your sales team will most certainly ask and you should always be prepared to answer:
- Who do I call?
- What should I say?
- How much does it cost?
- What traits to look for when choosing and inviting professionals to join your executive team?
- Where Charlie has seen most companies fail in his 40+ years of building, investing in, and advising companies?
Connecting with Charlie
Visit his website: https://www.paparelli.com/ for weekly, story-based blogging and zoom chats with entrepreneurs to help them solve problems + share insights.
BT: Hey, everybody, welcome to Pit Stops to Podium, the RevPartners podcast where we talk to execs who have competed and won, taking their companies from high growth to high scale. My name is Brendan Tolleson. I am the co-founder and CEO of RevPartners. And I'm delighted to have with me today Charlie Paparelli for this podcast episode. Welcome, Charlie.
CP: Great to be here, Brendan. Always good to be with you.
BT: Yeah, I love our time together. And Charlie, I was thinking. Guys, we've known each other for over 10 years now, and I was trying to think about how to give people a background on who you are. You've really done everything from building companies to investing in companies, and now you're in this kind of phase or season. I think you call me back in terms of what you've learned and helping other entrepreneurs on their journey. But how would you define what you do, Charlie?
CP: Well, what I'm doing now is I've kind of moved; I'm sort of transitioning out of a 25 plus year career of angel investing, which was all about helping. I called it helping entrepreneurs achieve their dream of starting and owning their own company. And now I've taken a lot of that experience and that network, and I'm now helping entrepreneurs do the same thing, not so much from the investment side, but by interviewing other entrepreneurs and getting their stories out of them so that people can learn from them and what they've learned.
BT: Yeah, you will get into some of the actions that you can take. At the end I'm going to do a teaser here, which really is an incredible writer, and there's an amazing opportunity for other entrepreneurs to learn from him and we'll get into that at the end of the episode. But paparelli.com just really rallied ego. The Oracle has spoken. So, Charlie, before we get into our big idea, we have a tradition here at Pit Stops to Podium, and that's to understand our guest outside of a business context. And so the way in which we do that is really to understand three fun facts about our guests. So if you don't mind, indulge our audience about some of the hobbies or interests you have or passions you have outside of what you do on a daily basis.
CP: Yeah, my biggest passion, which really started in college, is I ride motorcycles and I like to ride motorcycles fast and I like westerns. So I do a lot of North Georgia riding. But I also went to the California superbikes school, which is something that a lot of people don't know about. So 150 miles an hour in straightaways with big tarzo and there I was. 67 years old doing that. It was a lot of fun. I did it. In fact, I've done it three times that it was with my son. Well, what's your brand of bike right now? It's BMW artim, OK, which is a sport bike. Basically, it's a Sport Touring like it's a combination bike. So I can go on longer rides without getting my back. All messed up, but it has a little wind protection for me. So it's really a nice place. A lot of fun. Kathy goes with me too. We're planning, in fact, to go to dinner. I'll go for a lobster dinner later in July in Maine. Oh, wow. So we're talking to take two weeks, take some time going up to Maine on the motorcycle. And then come back down again. So that's something that we have planned.
BT: Must be pretty good lobster. And Kathy, for the audiences at Charlie's wife. So outside of biking and Kathy, what else should our audience know?
CP: Well, we have something else that's way off the reservation for me is and Kathy, always had this dream of owning land, me being from Jersey city, New Jersey, that wasn't ever a part of what I really was interested in. But we have bought land 40 acres in Alabama on a river. Wow raw land. So I go out on this place and she just has a big vision for it and I'm just trying to catch up to it. That's where we are right now.
BT: That's great. I did not know. That's a good fact. What's the third fact for our audience?
CP: The third one is, is Kathy, always I was always thinking, you know, I think maybe I'm going to learn how to ride a motorcycle or something like that is not a good idea. OK, what happened is we just put in an order for two electric bikes. And they got these big fat tires and we'll be able to do some off roading, but we'll be doing it on what's the equivalent of a bicycle that does have a little electric to it so we can go up those heels and do those things. So we're going to get into electric biking or biking in general, which should be a whole new experience for us.
BT: That's great. Well, I appreciate you sharing some of the personal sides of your life in addition to what we'll discuss now. So you had an opportunity to not only build organizations, but also support them in that angel investing capacity. And so we talk about companies growing, going from that growth to scale. You know, building teams is certainly one core component of how you grow. And so I'd love to talk a little bit about those different stages as it relates to team building. But before we get into those three stages, I think it'd be helpful to tell the audience in your perspective, why team building is so important and maybe intuitive, but I think it's important to unpack and define that.
CP: Yeah, I think the thing that's missed a lot is in building and starting companies and building companies is the value of the people. You know, we talk about people often at times, but we're so focused on the technology or we're so focused on this concept of product market fit and process and all of these other things that we sometimes walk right past the people. But my whole experience, my 40 something years in business, as I look back, it's all about the people, all the value. Is it in the people know if you want to grow big, you have to have the right people. If you want to grow big value, a very valuable company, it's going to come down to the people. And if you want to be an attractive acquisition candidate, it's all about the people because the people mitigate risk for the buyer. So you just can't get past it. People are the secret to the success in all that we do.
BT: I like that to your point, it's often neglected and put on the back burner, and if you're in a software Sas type model, that the product is typically a star. But what you're describing is actually the people are what really informed the product and ultimately create the value around the product, which is great. So let's start this dive into this a little bit. Let's talk about stage one, Charlie, and this is kind of founding startup phase of team building. And so what does the team look like? And what are the key areas as it relates to what the role, the team, the importance, the team at that base?
CP: OK, this first stage of growth I would put as the I would to. They use the term that we've all accepted now is that product market fit state, right? He comes up with an idea and you're thinking, man, I think that this really solves the problem out in the marketplace, shows the people that will probably buy it. So you got to figure that out. But that stage is really led by the founder and the founders that I'm seeing more and more of these days are not technical founders. These are people like yourself who have industry experience. OK, now it could be vertical market experience or it could be horizontal market experience, that they're experiencing some market and some type of product and. So you start with the founder and the founders out there flopping around with a PowerPoint slides, trying to figure out, OK, now that I got people interested, how do I build it? Well, they don't have any technology background. So the first thing that a founder has to do is find that co-founder I love in the Bible. It says, you know, it's a two people, two are better than one. And three are even better. This is in the book of Ecclesiastes, because if two are better than one, because if one falls down, the other can pick them up. But the idea is that you can't be everything to everybody when you're building a company. You can be that guy that maybe is the CEO type who's a good strategy person, but you don't have any technical expertise. You got to find that co-founder that has that. And that's hard to do. I see people getting stuck with that all the time because that co-founder has to be lit up about the mission and the market and the problem as the founder. So it's not about can they program something? Can they build a product? No, it's got to be this fit this hand in glove fit. How hard is that to find somebody? It's like saying, look, you got a couple of weeks, find a girl, get married, build a family. Right you know, we get that. We say, oh, I don't want to get married till I'm like 30. I want to figure out who I am. I want to make sure I have a career. I want to, you know, make sure I've got the I've got a house that we can get if we get married, we can go to and all that stuff. But, well, no, you don't have that option. When you start a company, you start a company. It's like, man, I got to find somebody that's going to build this product. And I only get zestra saying, yeah, you got to find him fast and, you know, like, no, don't go fast, go slow, no, go fast, you know? How do you do it so hard? That's the beginning of building that team.
BT: I remember when you and I were talking about starting this company and the whole partnership concept, but and I was talking, you know, my co-founder Matt Bolian and you talked to both of us about this whole concept of marriage and that you don't go into this lightly. Like, if you are going to be a co-founder, it is not a small commitment. You are really going this full board. And it's more than just it's not a transaction at this point. There's a lot more that's on the line.
CP: Certainly true. Yeah they forget that building a company is really a 7 to 10 year exercise. I mean, it takes a long time. And then you think, oh, yeah, but someday somebody will buy. Sometimes they won't. So this is what you're doing together forever, and you'll spend more time with your co-founder, Matt, than you're going to spend with your wife? Yeah, actually before long.
BT: I feel bad for Matt, for that one.
CP: But, also, you have a great co-founder there.
BT: I do. Yeah I love what you're describing. There's a complementary skill set for things that I've also uncovered with the co-founder type of model. It's not just like the synergy and the skill set, but also shared values. And if you don't have that, it makes it can have all the strengths and competencies in the world. But if you don't have that kind of layer or the foundation, if you will, it's going to create a lot of problems. But that's a topic for another day.
CP: Yeah let that last piece, though, is important. Not only that, and a lot of people talk about culture and personality fit and values fit, but they got to be lit up about what you're doing. That was excited about what you were doing, you were excited first, and then you got him excited and you got him excited enough that he was ready to leave his job, to start this company, to do, especially technology guys. And they got offers all over the place. Why should I be excited about your market?
BT: All right. So let's move on to where we're at. That kind of first stage is the founders. And you talk about prime market fit. So now you've established market fit. What does it look like post?
CP: Essentially once that's established, because there's a transition point at the stage to this, I would call the build the process building step. OK, so now I've got I am I as Brendan, I can now sell this, which is a good thing. All right. But now what I have to do is I've got to figure out, can someone else besides me. Right, and so I have to find somebody that's a salesperson, and the first thing I always say, a salesperson is going to ask when they come in, they ask simple questions. They say, who do I call? What should I say? How much does it cost? And if you can't answer those questions as a CEO, you don't have a strategy. OK, as opposed to saying the really good questions. If you go out there and figure it out. But if somebody comes in and says, yeah, OK, now I'll make some calls.
BT: That really good. Let's take a step back. Three questions ask: who do I call? What do I say and how much is the cost? Is that right?
CP: Yeah, that's a good, good three questions. It's very simple and straightforward, but oftentimes you can't answer it. We can't answer it. That's exactly right. We start these companies because as founders, we're not a lot of cases. We're not professional salespeople. And it all to us, it's sort of are like, I don't know when I talk to this guy, it was different than when I talked to that guy. Are you going to build any company that way? I have to get to a process. And salespeople are all about process. They're not about figuring out strategies. They want to know what they need to do. Who do I call? What do I say? How much is it cost? I want to go one to the other to the next Bing, Bing, Bing, Bing. Sell, sell, sell. If I can get that I'm making money as a sales guy. I'm excited about what you guys have built. OK, we're now building something together and maybe I'm one of your leadership team, which is a really cool thing, you know, outside of sales. Anybody else that you want to highlight real quickly on there is a no usually and depending on service, whether you're a service organization or you're a product organization, usually what you need is somebody who's a good ops person. In other words, they can keep the trains running on time. Right so we said we were going to do this. The guy the sales guy makes the sale and I'm skipping the marketing side of the salesperson, makes the sale and then it goes gets flipped over the wall. Well, who's going to take it from there? Who's going to make good on all the promises this guy just made? You know? So you got to get those steps. You've got to have that process person, that person in place to make it happen.
BT: Ironically enough, that was our first major hire was getting a person in that capacity. I did not lead you with that question, but I'm glad you asked it because our first priority was if I I'm going to sell it, then we need somebody who actually can fulfill it and make sure that whatever we promise, we actually deliver. And then we can ultimately scale our delivery, which then allows us to sell.
CP: But at that stage, so I call that what's this stage is middle stage is so I moved out a product market by getting my co-founder. Then I finally get to my product market fit and I go to stage two and I have to build processes so I can replicate my sales and my delivery and all that starts to work. But it's working with what I got. At the same time, you're building what I'll call the leadership team. These are the key three people, five people, OK, that if I walk in as an investor, I go mad. Those guys are a great team. They know what they're doing. Yeah so that's that, that's that next stage, the build process stage. And now it looks like, hey, I bet these guys can grow this thing. Yeah it gives confidence to the market that you have not only that, but the process that you just described. You can actually scale the organization. You as the CEO founder, you're not sitting there going, oh, I go, I don't have to do everything. I don't have to have all the ideas. These people have ideas I hadn't even thought of yet. That's when, you know, you got a good leadership team.
BT: Yeah, that's what I consistently hear is like, how do I need to find a path to fire myself for to make sure that I am not irreplaceable. And if that's the case, then you're not moving beyond just yourself.
CP: And that's certainly an issue that I've heard from a lot of founders, is that they get stuck in that phase where they can't move beyond themselves, which is critical for scale.
BT: Well, let's move into kind of we've talked about stage one is that co-founder stage. We talk about stage two. That's where you get in that leader leadership team concept after that. Now, let's talk about stage three. We're moving more into, I think you describe as the functional teams, correct?
CP: Yeah that's where you get into how am I going to really build this organization, make it into something bigger to get past that million irr, if you will, annual recurring revenue. And to do that now, this leadership team, this new leadership team that seems to be able to get to a million or $2 million a year now they have to get to 5 to 10 to 20. Right to have that kind of growth. Well, to do that, they have to have this new skill. They have to become leaders and managers. So now they have to hire people within their area of expertise, so if I am the salesperson now, all of a sudden I'm a stylist manager and I have to hire salespeople and I have to train them and I have to manage them. And I have to help develop them. And then if and that's true, whether even if I'm the technical lead, if I'm the technical lead, building out the product, well, now I can't do it all myself. I have to hire people. And now I have to take on the role of manager, not as the chief cook and bottle washer developer, the best developer that ever lived. I have to be a good manager. If I can't build out a team, we can't grow. And that's true for all the other disciplines that are involved, which would be service delivery support in all those areas. But the management team now is faced with this critical test. Will the individuals on the team be able to build out their area, their silo of expertise, of functional expertise? And that does it's hard to find those first five people. It's even harder to see if they're going to make it. And you wind up flipping them out sometimes. Well, you've got to get new people in and you're starting all over. So there's this ratcheting effect that takes place. It's two steps forward, one step back, and we got that team in place.
BT: I don't know if this is a fair question. I'm going to ask it anyways. In light of your experience and you think about these I love frameworks. You talk about this kind of framework for team building where you go from a founding team to a leadership team, ultimately to a functional team. Where do you see most companies fail as it relates to this progression? Is I mean, or is it just you find it all across the board?
CP: I think the biggest progression failure really happens between the product market, that founding team and the leadership team. They never get a leadership team in place. So as an investor, I'm talking to them, they've been in business for three years and every ladder is still leaning against the family. He's still doing kind of all of it, and he has some good people, but they're not leadership team quality, ok? They're just not there. He wasn't able to or she wasn't able to bring in those people that look just like stars like he or she does, you know, and that might be a future podcast where we talk about the profile, the leadership team and of those characteristics and qualities because they can be a really good episode.
BT: Well, Charlie, again, I really appreciate your insight. I know I've learned a lot. I'm sure our community has, too. And framework's, to me, are always a great way to capture a broad concept in a consumable fashion. And I do also love your three questions the salesman asks that will stick with me for sure. But Charlie, as we wrap up, what are some practical ways in which our audience can engage with you and learn more of these amazing insights that you've been able to share with the community over a period of time?
CP: Well, I've been blogging for over six years now every week, so I have a site called paparelli dotcom. You go on that site. There are. And it's all story based blogging. It's not it's not instructive type of thing. So it's interesting. It's fun. So I've done blogging. And then last year we hit in the pandemic. I got into things called Zoom chats for entrepreneurs to help entrepreneurs solve problems that other entrepreneurs are faced with, just like they are. And now I've got into in-depth interviews that are two hour interviews with some very successful people and a lot of people are learning from. So it's all on that site. All you got to do is submit your email and you'll be contacted Tuesday for the blog and on Fridays for the interviews that go out.
BT: Well, I highly recommend it to our audience. I know I have learned a lot. Charlie is a great person with a lot of wisdom and it's worth the follow up. So, Charlie, Thanks again for stopping by. I really do appreciate it. And we'll chat soon.
CP: It was a lot of fun. Thanks, Brendan.