From SXSW to distributed teams nGen grows and then things get dicey. Here is part Three: Saying Your Goodbyes.
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Carl: Work naps are everything, Gene.
Gene: I can't do naps.
Carl: What?
Gene: I can't.
Carl: Define a nap for me. How long is a nap?
Gene: 30 minutes.
Carl: Oh, for god's sakes? No, it's like three hours.
Gene: Okay, cool.
Carl: Maybe I'm sleeping.
Gene: I can do that. How many hours of sleep do you require a night, to be a normal-
Carl: Require?
Gene: To be a normal participating human the next day.
Carl: It's really weird. I normally get eight or nine hours, but sometimes I'll wake up around three and I'll just get up and read for an hour. Right. It's like, I don't try to, if my body decides to wake up for whatever reason, I'll just get up.
Gene: Yeah. That's smart. I like that. I think a lot of people just go back to bed or just lay there.
Carl: If I know I'm not going to be able to sleep.
Gene: Yeah. Just get up.
Carl: I'm just Like, yeah.
Gene: It's going to mess up your... All right. So we have covered a lot of stuff the past couple episodes.
Carl: I know and we're still rocking and for those listening, we're just ripping these out one after another.
Gene: Yeah, man. That's why we're still wearing the same clothes. It's not literally three weeks of clothes.
Carl: Trying change of clothes.
Gene: Yeah. It'll be weird.
Carl: Prallax is going to be so happy that I chose this shirt today for the 17 episodes we're recording.
Gene: Oh man. Well, yeah. So, we are going through Carl's history with his services company and-
Carl: That's right with vengeance, courtesy of a listener request and a member request from Hans [bureau 00:03:28].
Gene: Yeah. So send those questions in. If you guys have questions.
Carl: Yeah.
Gene: We love to answer questions because it makes a lot easier to episodes.
Carl: Yeah, it gives us something to do. Otherwise, we just got to mix stuff up.
Gene: Which is cool too. All right, man. So we left off, we had made this big transition from flash to web standards and where you were with your life and your company and stuff.
Carl: Yeah. And we're getting more popular, we're starting to travel. Yeah. Craziness.
Gene: Travel. So that's right around the time you started attending South by, I know that was big for you. I never... Although I was in the industry and I was jealous and I was watching all the shit from South by, I never went, I never once went.
Carl: It was nerds gone wild. I-
Gene: That's not what I remember hearing about.
Carl: I remember the parties we'd get invited to from either the web hosts or from the big product companies like Google and just free top shelf stuff and people getting ridiculous. And I mean, it was a high stress job anyway.
Gene: Right.
Carl: Even though it was a lot of fun, but you know, there was... I remember that suddenly I'm not home, and remember I started this because I had kids.
Gene: Mm-hm (affirmative).
Carl: And that became... I started our best business development was me on a stage somewhere. And that became like a thing and I also loved it. Yeah. So you started to have two worlds that you live in. It's just crazy.
Gene: Mm-hm (affirmative).
Carl: Yeah.
Gene: So talk about that a little bit. How do you make that transition? And I know that because there's a lot of people that would love to make a transition like that. Going from, you know, your business development up until now consisted of sending envelopes to random people.
Carl: Well, there were letters in them.
Gene: I know. I know. But to speaking on a stage, did you ever speak at South by?
Carl: No, we were selected one year and I'll get in trouble if I share the whole story. But the selection committee, there was one person who decided that my talk, because it was with another person, that we should not be selected because they thought... They just didn't like it and they thought they were going to be over representation I can't explain it without outing everything.
Gene: Sure.
Carl: But just to say that we had that one opportunity, but then the next year I put a talk in called beers on the Hilton patio.
Gene: Right.
Carl: And it said, "Hey, I'm Carl. Want to have a beer? Find me on the Hilton patio." And it started skyrocketing, and then they caught it and they took it down. But I did sit on the Hilton patio for quite a while and people would come by. I probably had... I had of beer with a lot of people, let's just put it that way.
Gene: I was trying to see the side show-
Carl: Hey Carl, how long are you going to be here? I'm pretty sure I can't walk. Come on back.
Gene: Yeah. I'll be here till the end of South by. That's cool.
Carl: Well. I never spoke at it. Yeah.
Gene: Right. So how did that work for you? How did it work? I mean, why would you seek that out? Would you want to speak publicly at these events?
Carl: You know, it was about getting in front of everybody. It was about sharing who we were, because the thing... This happens right now in marketing, you'll hear people say, well, I don't want to go to talk at industry events because I'm just talking to myself and I'm not going to get people who are going to hire me to do what I do were to hire my company, to do what we do.
Carl: But you know, we took that turn one year and said, okay, I'm no longer going to speak at industry events. We're going to start speaking at other things. And we saw about 60% of our leads drop that's because people who are at those events, aren't just your industry, but also people in your industry are going to go in house at some point. And they're going to say, I saw this guy talk, they did this thing. We should contact him and see. Spark Box, you know, they did that work responsibly. Because you want to talk about another season? Responsive web design.
Gene: Yeah.
Carl: There's another one around the corner.
Gene: Yeah.
Carl: So that was part of it. But also I was a theater major. I love getting up on stage.
Gene: So you able to collapse those two worlds of what you're doing in here.
Carl: Yeah. And you were a huge part of that [would converge 00:07:44]. You encouraged me to bring monkey time to that stage and just do whatever the hell I wanted and honestly that freedom truly opened up the stuff that I could bring and made me want to be better as a presenter.
Gene: Awesome. Awesome. Yeah. Okay. Well, all right. So where are you now? So you're attending South by, you're starting-
Carl: Attending South by.
Gene: How's it going back at Engine?
Carl: Engine's doing well. And the thing is, we're all traveling for the most part. We're all going to South by, right? We did bring in another developer. So we ended up being around five people now.
Gene: Okay.
Carl: And still all dudes and we're going through and we're going to South by and we're meeting people. We're doing things. Now another thing happens now and this does become kind of another season. When you're you using standards, you are going to have content management systems and they have to be standards compliant. They have to be able to spin out good code. The original one we used was... I can't remember now type something... It was, it was really hard to use... Movable type. It was movable type. And then we decided we had some money and we were going to build our own because a lot of people did that.
Carl: And as we were detailing everything that we wanted out of it, we found ExpressionEngine.
Gene: Mm-hm (affirmative).
Carl: So now we start doing things with ExpressionEngine Travis is really good at understanding the way it works. [Verik 00:09:18] is still rocking out great designs. Bruce is a good illustrator too. So he's doing great illustrations as well as learning how to code. And it's tough, right? To go from what they were used to learning how to code this stuff is like... It's a different language literally for your brain to figure out, but we start doing that and then we go into that ExpressionEngine phase. Now we're not a standard shop, we're an ExpressionEngine shop. And we've got that tagged at the bottom of things and you know, that sort of stuff. But we get to South by and Travis had this idea for something he wanted to build, which was called structure.
Carl: And this allowed a lot more flexibility in moving around the way that a site was architected within ExpressionEngine, without having to code, you could actually move things around and it would automatically create the architecture.
Gene: Yeah.
Carl: So this was a big deal. So we get there, Travis finds out that there's an Ellis lab meeting and he wants to go to it. Right. Which is great. So we go and they tell him it's a closed meeting.
Carl: Sorry, but it's a closed meeting. He goes, oh, okay. And they said, well, do you have a business card or something because you know, we'll get in touch with you. And so he hands him, the business card and his Twitter handle was [rock then roll 00:10:34] . Right. And so looked at and they went, you [rock N roll 00:10:38] . And he was like, yeah, he goes, "Shit! We're talking about y'all come on in here."
Carl: And so we go in there and they're talking about structure and how it's changing things and what's going to happen. So now we've moved into this phase where we are creating something that the whole industry's going to use along with this marketing thing with happy webbies, there's got to be... So it's like really intense. Does any of that drive work? Maybe, maybe not. But in terms of the popularity and the fun, people knew us now and we were getting new opportunities and getting asked to speak on bigger stages. And that was mainly me, but we all were going to talk sometimes. All of this stuff starts to get really big and was... I mean was again fun. But then you start to realize, okay, we're an ExpressionEngine shop. Now we're dependent on another company for what we do. We've hitched our wagon to Ellis lab. And, and it was great.
Carl: I mean, they were sending us leads. We became one of their preferred vendors or whatever. Preferred shops that they worked with and, and that stuff was great. But then we started realizing, you know, there, there are other ways that we can do stuff. So maybe we take this off.
Gene: Right.
Carl: Off the site. Right. And yeah, so we go through that. That's really big. And then we get to a big change where the organization itself is going to change because Travis wants to get to New York. Verik wants to go into video. Right. And so now, although I had never planned on being in charge, I'm going to have to rebuild stuff. And they were both awesome. We came to a very amicable agreement in terms of the buyout, all that kind of stuff. So we go and now we're going to be distributed. So the next season we're actually... We were a hybrid. We were located with four people, myself and three others. And then we had one person in Seattle and now we become distributed. But one person who is in of the four decides they want to move somewhere else. So it's like, everybody's starting to realize, and then we can hire anybody.
Gene: Right.
Carl: And this would be 2008... 2009.
Gene: You were very early on... Early adopter on... [inaudible 00:13:12] Well, thank you. I couldn't think of the word.
Carl: Yeah. Yeah.
Gene: [inaudible 00:13:15] employees. I mean, early on.
Carl: I could not replace the talent that Verik and Travis had locally, that wasn't going to happen.
Gene: Right.
Carl: So I had to look out to that network that engine had of amazing people and find somebody who could come in and, and we did.
Gene: So it's more born of just flat out necessity.
Carl: It was necessity. It was also, you know, locally there was chatter that this was probably the end of engine because the actual team that built everything was going to go off, do other things. And it was just the talking head that was left. So it was also-
Gene: [inaudible 00:14:00].
Carl: Thank you.
Gene: I mean who the fuck are you.
Carl: I appreciate that. But it was one of those things where it was also let's bring in somebody.
Gene: Right.
Carl: That everybody goes, "Oh wow, they brought in this guy from Seattle.". So that was a cool thing. But then, we start to hire people from all over and that moves into, we became developers.
Gene: Mm-hm (affirmative).
Carl: We moved from being a design organization that had really good development chops to over the course of two years being one designer, couple of project managers and 20 devs.
Carl: It still blows my mind.
Carl: We were in eight eight time zones.
Gene: Over the course of two years?
Carl: I think so. Yeah, that feels like it plays out. Right. And we were a DJango shop. So now we've gone from being a CMS oriented shop to a certain technology shop, a DJango shop. Right. We were a Python shop and this was through a few really big clients that we had. We were also on... we were one of Facebook five preferred vendors. We blew that in the first year because we would tell them no, and they would bring somebody else in and they would be like, "all right, well y'all are just fired."
Gene: [inaudible 00:15:21] be the second time we've blown something with Facebook. We can talk about that later.
Carl: Yeah. I did that before though. So-
Gene: That's awesome.
Carl: That was the second one. So they had already... But so we're getting these amazing opportunities with Microsoft and Facebook and all these types of things. And a lot of it's really dev heavy. And one of the things that I always believed was that we should have been flow with the way that the work is going to come in and that was what was needed.
Gene: Right.
Carl: But it did get to this point because... Won't get into a whole jellyfish model, but that season quickly becomes the jellyfish season where we're working with 40 to 50 people at a time, 12 are on the core team. And everybody else is like a friend.
Gene: Like supplemental employees.
Carl: Frengineer. Right. So it is a contractor would be what you would say technically. But we would say for Frengineer, because we knew them really well. We knew what they wanted to work on and we'd bring them in for that stuff. So that becomes a really breaking point for me.
Gene: Well, now, and again, we do these little sidebars, but at that time... And this is right around... I met you slightly before. And I was sort of friends with you through your development of this jellyfish model. I don't want to just throw that word out there because.
Carl: Right, right.
Gene: A lot of these folks might not know what that is, but you were going around talking about this model of working.
Carl: Yeah.
Gene: And working with these subcontractors, which by the way, in any other industry this shits happened for hundreds of years.
Carl: Oh yeah, yeah.
Gene: For some reason at the time in our industry, it was like, no, sir, they need to be an employee. You know what I mean?
Carl: Yeah. And once again, a theater major, I didn't take any business classes or, "Oh, well that's the technical blank blank model."
Gene: Right, right.
Carl: We were just making stuff up. But yeah. So, the real quick hit on the jellyfish model and thanks to Rachel [Gurts 00:17:13] for naming it. She branded it jellyfish model. There was a core team. And if two people on the core team wanted to take a project, they they could build a team from the second layer, which we called Frengineers. Because we were engineers. So the core teams, engineers, the second layer is frengineers. So they could grab four people and say, okay, together this team, and there would be at least one person from the core team working on it. And two people from the core team had to want it. So now we invert the sales model when clients would come to us, when prospects would come to us, we would say, "Hey, here's how we work. It's a little bit different. We need you to pitch us on why we are the right people for you."
Carl: Microsoft was like, fuck you.
Gene: Yeah. Right.
Carl: We're not going to play your game. But startups were really into.
Gene: Oh yeah. Right, right.
Carl: Yeah. Because they got money and they want to play that game. And then like anybody who was a big time company, starting something new, they liked this idea because they were just getting pitched like crazy and human nature as we chase what retreats from us. So as soon as we said, slow your role, you got to tell us why. And they would say, why would we do that?
Gene: Right. Well?
Carl: The response was, "Well, do you want somebody working with you that was told they have to, or do you want somebody working with you that said they want to.", Because we're the group that says we want to, and if we say we don't want to, why would you want to work with us?
Carl: Right. So that worked really well. And that was when we really started to grow. And then that second layer Frengineers, we needed more people. So we create a third layer called army of awesome, which was just people we hadn't met yet, but we knew we wanted to work with. And then every Friday I would make two or three phone calls to the army and just say, "Hey, I know we haven't [inaudible 00:19:05] emails or whatever. I know we haven't talked before, but the team really like your work. This is the kind of stuff we're doing. Would you ever be open to working together? What do you need financially? What kind of work excites you? If we hit a trigger where we can do this stuff, we'll get in touch.", and all that stuff worked great. I mean, it it was really good. That was also when I was starting to come to the bureau.
Carl: And so I'm evangelizing jellyfish model on stages. I'm doing it at the bureau. And honestly there're parts of that today that are the bureau.
Gene: Right? Absolutely.
Carl: Collaboration, everything that I wanted because we started the Jellyfish Alliance as well, where we were trying to get shops to work together. Right. So that really, we started looking at the bureau and get to this at the end of this series,, but it was everything I was trying to accomplish with Engine only. It wasn't a pure play engine. We were still doing the work and then trying to get other people to help with the work and then trying to get other shops, and so it became this weird kind of ecosystem.
Carl: But when it worked, it was amazing. Everybody was enjoying what they were doing. People felt in control. If somebody needed to take some time off, they just did like you talking about open vacation or people call it unlimited vacation, which don't call it that. That's not what it is.
Gene: Right.
Carl: It's open vacation, but people could just take time off, but they have to start scheduling. Also, we got to that concept of a holacracy where if you needed time off, you would ask the team. You wouldn't ask me because I knew when we were across eight time zones, unless I want to be awake all the time.
Gene: Yeah. It's not going to happen.
Carl: So you would basically check with your team. And what would always happen is when somebody pushed a big deliverable that made it through QA and was finished, that's when they would take their time off. So it was like, all of these things were ingrained in the jellyfish model, but that was truly when we started to grow fast because the jellyfish model could expand and contract, and that was the core feature. If we lost three big clients or finished two big projects, it wasn't like we had a bench that was waiting.
Gene: Right.
Carl: They were released back into the wild.
Gene: Right. Got to take care of themselves. So, you're telling this story and everything sounds so awesome. But why... So he's in in his list here...in Hans's list, he's got the "oh, shit" moments. So why, I mean, why would you ever stop doing that?
Carl: The "oh, shit" moments are you realize eventually that you are the person who owns the thing, no matter how much you want to create utopia, how much you want... People used to call us the people's republic of Engine. Right. And I was hurting my family in a way, because of the a way that I was compensating myself, that wasn't the core... That got adjusted later, but that was something. Because of my mindset, I was like, why am I working so hard? Why am I doing this? And I'm still kind of making that old Engine money and we're in this new world. But I think the big thing was there was one time we had a client, big client and we were invoicing probably 120 grand a month to this client.
Carl: And we got to this point where there was going to be a $200,000 invoice. And that woke me up because I wasn't running anything. Everybody was running their stuff. They did have like centers for certain things. Like there was the accounting hub and there was so that people had standard jobs that were supporting the core team. And we got to this point and I told the accounting hub. I was like, "Hey, don't send that invoice yet. I was like, we need to make sure we tell them that this is coming.", and so I did a video because we were real big on video and I did a video to the team. I said, "Hey, so I stepped in and I stopped this because we need to talk to the client before this goes over. Because I worry that we're going to get to this point. They're going to pull the plug."
Gene: Yeah. Why you sending me a $200,000 invoice.
Carl: You spent like... And it was legit. I mean, the work that was done was legit.
Gene: Right.
Carl: But it was this thing where new developers have been brought on. Now, the team is bigger. I didn't know if it had been communicated or not. So I put that in there and I got a response back from one of the people on that team tearing me a new one, that I didn't know what was going on. I had no right to tell them what to do, that they had it under control and that I needed to basically get back in my lane.
Gene: Stay in your own lane person who taking liability for everything.
Carl: Well, and I didn't think of it that way. I didn't think of it as liability. I thought of it as well-
Gene: Well?
Carl: Okay. And I was really mad and I reply back, "I'm really mad right now. I'm not going to, I'm not going to reply.".
Gene: Yeah.
Carl: "I will reply back tomorrow.", so I did, and we had a company wide call. Everybody was invited to be on the call. Lori who's been with me for three companies. Basically we were using Skype because that's what we had. And she would keep up with, if somebody wanted to ask a question or not, they would just type in, raise hand. And we got there and I was talking with the individual and I said, I'll let you go first if you want or I'll go first. But this was transparency, was one of our core values. And we were going to have this conversation in front of everybody.
Carl: And they went first and they say, they apologize for their ton, that they did mean what they said, but they could have said it in a better way, they were just very emotional about what had happened. And came to me, I said, "I apologize for stepping in without having a conversation. I should have. I should have let you every anybody know that I was concerned before just going straight to the client. But I don't know that I ever really recovered from realizing that I had created a place that was running itself, but was going to make mistakes and learn from them. But at my expense and mistakes I had already made."
Carl: Now that can sound really cocky. But it's also just this thing, at that point, I had been working in services environments for 20 years.
Gene: Mm-hmm (affirmative).
Carl: And it was just, I don't know, they can do that. At the same time while that call was really good. In fact, somebody, Aaron [inaudible 00:25:50] was a developer with us and Aaron wrote,
Gene: Well, Aaron man.
Carl: He's so good. Aaron wrote... he tweeted at some companies when things go wrong, they close doors, at Engine, we knocked down walls. But that day Engine Work split into three groups. The old guard who loved me and couldn't believe I was treated that way. The new guard who wanted and appreciated the freedom and flexibility to do whatever. And then this other group that was just there for the work and they really didn't need the drama.
Gene: Right.
Carl: So, each of those groups, I loved. I love them dearly and I appreciated where they were. And they were all reflections of things that I had done and had created. But so that became a thing where now, okay, it's going to be really hard to make decisions because of the thing that I have built.
Carl: And to that point, it did come down at one point and it was threat of a lawsuit. Now nothing will wake you up. If you consider yourself running egalitarian place, if egalitarian means equal, then-
Gene: Your name on the lawsuit.
Carl: Being told you... And it never happened, but it was a threat of it, and that woke me up, that it's my neck is the one on the chopping block here. As much as they want to take accountability ,as much as they may want do stuff. Doesn't matter. Doesn't matter. It's my mortgage. It's my house. It's all my stuff that is suddenly being called into question four things I did not do. Not that I didn't do them. I didn't mean like that.
Gene: You're responsible for them.
Carl: I'm responsible for things that I was not part of.
Gene: Right.
Carl: This sounds bad. Cause I'm not blaming anybody.
Carl: This was all the way we planned it to work.
Gene: Oh yeah. Oh yeah.
Carl: But also, I was kind of taking nine months off, you know? And so I was checking in once a day, but I wasn't really there. So the thing that I learned coming out of this, there's always somebody that's in charge if you want to be or not. And there's always somebody that's in charge if other people want you to be or not. And it is going to get to a point where if somebody isn't leading, that people want to follow, you're going to go off a cliff. And that kind of became our cliff because we had a very large client that pulled the plug and we had a lot of money in the bank and we decided to self incubate and try to do some projects, launch our own products that lasted for a little while.
Carl: And then we get to that point where it's like, okay, we got about five weeks.
Gene: Yeah.
Carl: See what you can find.
Gene: Oh yeah.
Carl: Yeah. So that was it. And I know we're coming up on the time for this episode... The hot take... And I never got this when we were starting Engine leadership matters. You know, we sent out a survey at one point, job satisfaction kind of surveyed Engine when we had a lot of people working there and we got amazingly high marks, but the comments would be like, I'm still not really sure where we're going. I love my work. I feel challenged. I feel fairly compensated, not sure what the hell's going on.
Carl: And that was because any organization needs some sense of where you're going. It becomes that whole need to progress, to feel like you're moving forward. Otherwise it's like, we mentioned that other day, you're just the person who's driving a bunch of people around on a bus and you wake up and go, I'm a Bus driver?
Gene: Yeah. That's right.
Carl: That's what I do. And I love bus drivers don't get me wrong.
Gene: Right.
Carl: But if you suddenly you're like, that's the thing. So I think leadership matters. Think it matters inside of each one of us to know that we're leading ourselves and going in a direction that other people want to go.
Gene: Agreed. I think there's one more episode here, dude.
Carl: Yeah.
Gene: I think there is and I look forward to getting through that next part. It kind of feel like a cliff hanger here, but it's important. It's important to not only talk about like the highs, but also the "holy shit, shits about to get real" moments. And in those realizations that happen. Sadly, they never happen before the bad goes down. Why does it happen that way?
Carl: And why is it that you can't remember before it goes down a second time?
Gene: Ha! Like wha.. But you know.
Carl: What a catharsis, thanks everybody for letting us do this.
