Matthew Achak - Co-Founder of FCR: Coin Flips, Choosing the Right Business Partner, and Employee Retention

Matthew Achak  00:00

If you are a true believer in what that company is doing 100%—that you are changing that industry or changing something—if you believe in that with all of your soul, it becomes so easy to talk about why you are the company that that client should buy from. Because it always comes back to your differentiator; it never comes back to price. Price—if you're talking about price, you've already lost.

Callan Harrington  00:28

You're listening to That Worked, a show that breaks down the careers of top founders and executives and pulls out those key items that led to their success. I'm your host, Callan Harrington, founder of Flashgrowth, and I couldn't be more excited that you're here. Welcome back, everyone, to another episode of That Worked. This week, I'm joined by Matthew Achak. Matthew is the co-founder and Managing Partner of Nonlinear Venture Partners, where he consults and invests in early-stage startups. Prior to Nonlinear Venture Partners, Matt co-founded FCR, the leading provider of outsourced live agent support services for tech companies. FCR was acquired by TTEC in 2019. If there is one word that defines our conversation, it's passion. Matt has so much passion for the businesses he's built and the communities he's served, and it's hard not to get motivated by it. We talked about the importance of establishing a company's DNA and core values early on. We also dove into the value of having a complementary business partner. Both of these are really common topics on the show, and I loved hearing Matt's take on them. We also dove into how Matt kept employee retention high in a traditionally high-attrition business. I thought it was an incredibly interesting playbook for the right type of companies that can pull this off. Now, with all that being said, the part that I loved the most wasn't even in the show, but I felt it was important enough to add it here. Matt had talked to me a lot offline about how critical his wife was to his success—how her choosing to be at home with the kids and keeping everything stabilized was vital as he grew and scaled FCR. I personally couldn't agree more with that statement, and when you hear Matt's story, it just puts that in a totally different perspective. So with that, let's get to the show. Matt, I am excited. I've been looking forward to this interview. Where I'd love to start this out is, I'd love to hear the unique thing that happened when you sold FCR.

Matthew Achak  02:52

Let's go back a little ways. It's 1991, recently graduated from college. Back then, there weren't a lot of opportunities, not a lot of options for 21-year-olds with zero experience in the real world. And so, you know, at that age, you think, "Well, I can try grabbing a number of small jobs. I can do this, I can do that." But what I decided to do was travel halfway across the country and move to Boulder, Colorado, with some friends. So I arrived in Boulder and realized there were no jobs there, but there were a lot of jobs in Denver. So I answered an ad for a company that was looking for an employee for their new call center that they had just built in downtown Denver, which, nowadays, it's not a great idea, but at the time, it was a beautiful building. I was employee number two in this gigantic call center, and that company was called TTEC. Fast forward 30 years or so, and TTEC was the organization that eventually acquired my company, which I started in 2005. When I had told the CEO of the organization, he couldn't believe it. He was flabbergasted.

Callan Harrington  03:59

And it's gotta be kind of a surreal moment for you. What was that like, the fact that it was them in particular?

Matthew Achak  04:06

I remember thinking, "Wouldn't that be something if they were the company that was the right fit for FCR?" And I just kind of put it out there, really thinking about how fascinating and full-circle that would be—that moment of closing the deal, sitting down with the management team on both sides, and then saying, "You're not going to believe this, but you were the company that gave me my first opportunity at 21 in the call center space, and you're now the company that's going to own FCR and hopefully carry on our culture."

Callan Harrington  04:38

So I'm going to hold there because I want to come back and talk about that. But before we dive into that moment of actually selling the company, pulling this back—so you were in this space previous to founding your own company. Is that right?

Matthew Achak  04:54

That's right. So, in '96, I believe, and living in Denver for a bit, I decided I wanted another change. But to make it even more interesting, I decided to flip a coin. I chose two cities that I thought looked interesting: Portland and Boise. I just flipped a coin, packed the car, and it landed in Portland. I had answered an ad—because back then, there were ads; the internet had not become this Monster.com, and things like that didn't exist yet. So I answered an ad for a company that was looking for a salesperson. In order to stand out, I completely redesigned their marketing materials, just because I thought, "Well, it's something interesting to do." I looked at them, and I didn't like them, so I redesigned them, and I sent them over to the president, and he called me back and said, "Well, when you get here, you have a job. We'd like to hire you as our first salesperson." I said, "Oh, that's great." And what's really fascinating about this—and now this is where I talk about the idea that the company I created really was a part of me as a person. It wasn't just a company; it really was a part of my DNA. My career arc and my personal arc are really tied together because of that coin flip. Because if I don't flip that coin and it doesn't land on Portland, and I don't drive to Portland, a lot of other really fascinating twists and turns don't happen. Number one is I don't get that job where I meet my business partner because he was the CFO there, and he and I realized we worked really well together. Also, if I don't flip that coin, I don't decide to drive to Cannon Beach, Oregon, on my birthday with a friend, whose appendix doesn't happen to go out that morning, which then causes me to drive alone, get lost, and wind up on a different beach where I meet my eventual wife, with whom I'm currently married. And so, in a weird way, that coin really drove the career I would have, the person I would marry, the kids I would eventually have—all because it landed on heads. No. So once I got to Portland, I realized I could really dig my teeth into this industry. I liked it; it was interesting. And so, the company I worked with was called 800 Support. It's where I met John Statter, my amazing business partner. We still are building businesses together. But once I got to Portland, I realized I liked the outsourcing sector. It was interesting, and I liked a lot of what 800 Support was doing. But as John and I realized, there was a lot that could be improved upon. So what's interesting is the DNA of First Call Resolution, the company that John and I would build in 2005 from scratch—literally just an idea on a napkin—was embedded first in 800 Support. So the concepts about leveraging smaller towns, Northwest communities, focusing on smaller programs, building a more interesting work environment, a more welcoming environment, empowering your call center agent to be more than just a commodity, to actually try and differentiate that work, to differentiate the customer service experience—instead of making it an afterthought, making it a focal point of a sales transaction. So it becomes something really important that companies could use to show how their product and experience are different than other companies'.

Callan Harrington  06:56

Well, here's a question—did this type of decision-making come up later, or was it after you flipped this coin that you were like, "Okay, I like where I'm at now, I'm keeping this here"? One of the things I'm curious about is, you mentioned that when you went into this, you thought, "Okay, I can really see myself growing and expanding in this industry." And for those that don't know, this is not— and you were in a sales position—that's a tough sales job. Service sales, especially when you don't have years and years and years of relationships, is really tough. How did you even get off the ground? How did you start to build that out of the gate?

Matthew Achak  08:56

Cal, you're right. Historically, it's a commodity play, and it's really just a race to nowhere. It's all price-driven at that time. So if you go back to—we'll say—2005, the world was very different. Remember, this is pre-iPhone, pre-Uber, pre-Airbnb. So all of these ideas hadn't really taken seed yet, but what was happening was a lot of the call center work had been so commoditized that it had all been sent overseas to places like India—India, especially—Europe, the Philippines. But there was a backlash occurring where companies were realizing maybe quality could be something just as important as cost. It was not an easy industry to break into. You had to really start thinking about things completely differently. So rather than selling on price, it was selling on—and this is going to sound crazy—but it was selling the idea of greatness, of wanting companies to come along for a ride, to build something better, and to be a part of something greater than us—their company and our company. So I'll give you an example. One of the concepts that we believed—and I still believe was so important, and still is—is rebuilding small communities in rural locations. The core concept of FCR was to find towns where previous industries that used to renew timber, mining, fishing, manufacturing—all these industries that used to be the foundation of these communities—didn't exist anymore. And so, our idea, our philosophy, was to find places like that where these are smart people who used to work in these industries. You can't work in mining or in timber or in manufacturing and be dumb. Many of these were college grads; there just weren't other jobs there. And so our philosophy was simply to go into these communities and provide careers—and I don't say jobs, I mean careers—so true career pathing, where you can bring interesting work, not repetitive call center work, but really interesting work, work for disruptors and tech companies, startups, companies that are moving fast and changing the world. Because I truly believe that companies like to be associated with companies who are doing something good in the world. If it means good business, right? You can't just be altruistic; there has to be good business at the end of the rainbow. But if you can prove that you can truly differentiate with high quality, a competitive cost, and really doing good in the world, you will bring people. You will bring companies along with you. And that's what we saw, and it started slowly. We funded it ourselves; we bootstrapped everything, which was hard because banks didn't really want to loan us a lot of money. So John and I just kept pouring our money into the idea. But we both believed it was the right idea, and we thought it had legs, and we felt like it was going to create a flywheel effect—that if we could just get a few companies on board, we would be able to convince other companies to come on board too. What happened was, we got lucky. It was also the time when venture capital was really starting to pour money into disruptors and startups, and they were willing to differentiate with their customer support departments, which previously companies were saying, "No, it's a commodity. We only have so much money." Well, companies were now rethinking these ideas and saying, "You know what? Let's differentiate. Let's give people a delightful experience. Let's make our customer support team the greatest in our industry." Because of that, we now could say, "Well, look what we have. We have towns in Roseburg, Oregon; Independence; Coos Bay; Grants Pass." What was fascinating was we saw retention just skyrocket because your options in these towns are: you can come work for startups in tech with FCR, or you can work for the high school, or you can work for McDonald's or Dairy Queen or the hospital. Who would you want to work for? Well, chances are we were the company you would want to work for.

Callan Harrington  13:03

And what I'm hearing you say is essentially, everybody's going out there competing on price. It was essentially, if you're in that game, it was a race to the bottom—whoever could do it the cheapest. We don't even care about quality because all anybody cares about is price. And you came in and said, we're going to do two things differently: we're going to have a focus on quality, and we're going to do that by rebuilding these communities that are dying for a job to do something more interesting than what they're doing, because just the level of jobs isn't available in these communities. Is that right?

Matthew Achak  13:34

Exactly. And then you can create career pathing because one of the most important things when you build a company is you have to set your DNA, your mission statement, and your company values immediately. You have to set that stuff early because that's how you bring people on board. Concepts like fairness, integrity, respect, transparency—these were things that John and I lived every day, and we were super clear: look, if you want an inclusive, welcoming environment, if you want to be treated equally, if you want a place where you can rise based on how exceptional you are as an individual and as a worker, this is the place for you. If you're looking for some place where you can bully people around, this is not that place. And by starting those concepts early, it's how we started seeding our company with the type of people that we wanted in our organization. And it was important to get those people early because we knew eventually it was going to be hard to import talent. We were going to have to grow our talent. This is the one challenge when you're not in a large town or large city of a million, is when you need to hire another program manager, when you need to hire another call center director, when you need to hire a VP, you're going to have to build those people yourself. I mean, you can import, but it's hard convincing somebody who's been living in, let's say, San Francisco, to move to Grants Pass, Oregon.

Callan Harrington  14:56

I want to spend some time on this. In my personal experience, and even so in Columbus—and Columbus is a decent-sized city, right? It's not New York, Chicago, or anything like that. But I was at a bootstrap company when venture capital was starting to get poured into Columbus, and I couldn't compete against all of these new tech companies that were offering way better benefits and everything else. But I took the path in a very similar way—I said, we're going to have the best training program that's out there. People know, if they come here, they're going to develop in their career, and they're going to get to that next level. How did you actually implement that? How did you develop those people into those next positions?

Matthew Achak  15:35

Well, I tell you, I wish I had a mentor back then to help us, or guidance, because some of it was a lot of trial and error—trying to figure out what made the most sense for us. And honestly, it's like humans; there's never one size fits all. So you're tinkering; you're tailoring things for specific individuals according to how they best learn. I will say that we wanted people to work the phones inside the organization for at least a year if possible, hopefully more. It gave them a chance to appreciate how hard the work was. One of the biggest takes as a parent, as a father to two sons, one of the messages that I'm always talking to my kids about is how important hard work is. And there are certain jobs I feel everybody should have in their lives. There are two of them in particular: number one, everyone should work in food service to understand how hard that is. If you don't work in food service, you'll never understand how hard your waiter or waitress is working, how hard that busboy is working, how hard the front of the house is working. These are hard jobs; you're on your feet all the time. And number two, everyone should work in a call center. You appreciate the difficulty of getting up every day and for eight hours putting on that headphone and taking calls from people who are not happy with their product, and how hard it is to diffuse that situation and turn it into a good call. And if you can do that work without losing your mind, you will probably be able to do other things more complicated down the road in your career. But that foundation of being able to take a simple call from an irate customer and flip that around into something positive is priceless.

Callan Harrington  17:21

I say a similar thing in the sales world. If you could learn how to cold call, and I'm not saying you even got to be good at it—if you could just learn the resilience it takes to be able to make cold calls—you just open up to what's possible. One area I want to circle back to, and you've mentioned this a few times, but you've mentioned that you've had a really, really, really good partner. What made that partnership so good?

Matthew Achak  17:45

Well, in my opinion, the number one rule in business before anything is to have a good business partner because one person cannot do everything at that high level. You can try, and some have succeeded, but I've watched so many companies struggle under the weight of this singular person trying to do everything that I've realized having a great business partner—it's almost, you can't put a price on it. John and I had skills that complemented each other incredibly well. Callan, I would sell for free every day. I would do it for free. I love it. I love talking about sales. I love thinking about sales. I'm always thinking about, "Oh, wow, that's an interesting sales opportunity. Oh, wow, how could somebody generate sales if they had this product? Interesting, how would you scale your sales team if you were selling this product? How would we introduce this product to other people?" But you know what? I don't like operations. Can't stand it. I had to do it for two years as we turned over the company to TTEC, and it was so hard every day. I just—I dreaded having to sit on some of these long calls that were operationally focused. And then you throw finance in there—not my skill set. John and I fit together so perfectly because he, to this day, is the smartest person I've ever met when it comes to ops and finance. He has an ability to simplify very complicated concepts, which I think was invaluable for me because what I wanted to do was to move fast and to scale our company quickly. But he was good at reminding me, "Alright, the consequence of these decisions will result in these changes to our margin. Can we live with these?" And it's good to have people reminding you, "Yeah, it's great to sell, it's great to scale, but you also need to make money as a company too." And it's also good to have somebody that you implicitly trust—that's invaluable.

Callan Harrington  19:42

So what if a founder, or somebody's thinking about founding a company and they don't have a business partner but are thinking about getting a business partner? What is the advice that you're giving them on how to go out and find one?

Matthew Achak  19:56

Well, number one is network. You should be networking like crazy when you're starting a company—in fact, any company, especially when you're young. If you are not networking, you are doing yourself a disservice. You should be out traveling, meeting people, connecting with people, doing coffee meetups, having lunches. It's how you meet people. It's how you connect with people. I mean, we're humans; we naturally are a social species. So it is how we grow ourselves individually—by exposing ourselves to people who are different than ourselves. But that's also how you're going to meet, in my opinion, a potential business partner. It's how you'll meet people who you'll find interesting. So I always hear when people are building their company and they're head down and so focused, and I always have to remind them, you know, you should be networking as well.

Callan Harrington  20:45

I mean, for me personally, whenever I'm not—still to this day—but it's been probably the most consistent thing in my career. When I'm not, I'm stagnating. I'm stagnating every time that happens. So let's say they found a potential business partner. What are the conversations that they need to have to see if this is actually going to be a good partnership?

Matthew Achak  21:07

Well, first and foremost, you've got to figure out how honest this person is, and I don't know how you do that. I knew John was the person I wanted to work with because we had a history of working together. That was very helpful. So I personally don't like the concept of working with friends and family. I find it creates unnecessary stresses because it's hard to separate business from that relationship. So with John and me, business was hardwired into how we worked and still is to this day—business comes first. We still are exceptional friends, but we view business as the driver of everything. But trying to figure out how honest that person is is really important. Number one is, what are their skills? Do they complement yours, or is there too much crossover? Right? If I were working with a business partner who had a strong sales background, maybe it's not working as well because we both now have that skill.

Callan Harrington  22:03

Let's talk about that. Let's talk about the sales side for a little bit. What was your approach? How did you build and scale the sales team?

Matthew Achak  22:11

Oh, man, do I love talking about sales. I mean, how much time we got here? Because we could go a long time.

Callan Harrington  22:18

We could, we definitely could. For the both of us, we could probably do that. Why don't we start with this?

Matthew Achak  22:23

So I'm going to say some stuff that's going to be controversial, and I'm sure a lot of people are going to disagree with me. But you know what? After 30 years and after successes, it's my opinion, and I'm just going to tell you my opinions. Number one: experience—overrated. In fact, I would argue not essential. I would take an individual who is hungry, open-minded, listens, and is willing to learn over somebody who's experienced—who's been trained in the wrong methodology—any day. Any day on Tuesday. Because you take that individual, you can train them on how sales should work, and you can show them the pathway. And I found that you cannot undo poor training. It's impossible. You can try; you can give it the old college try. But if somebody has been trained on maybe the wrong way to prospect, maybe the wrong way to treat people, if somebody is trained on the wrong way to manage other salespeople, you're not going to be able to undo that stuff. You're better off building. So my philosophy has always been to build. The most important thing to me when I built my company was, I wanted it to be built as if I was the employee. I wanted to build a training program that treated people the way I wanted to be treated—the way I wanted to be trained—which meant focusing on quickly scaling me as an individual, and then whatever the opposite of micromanaging is, that's what I wanted. I wanted somebody who trusted me to do the work and got out of my way so I could do the work. It seems like an obvious concept, but companies rarely do that these days, because I think there is an implicit idea that people cannot be trusted. And I actually will argue for the opposite. If you build your compensation correctly, you can trust them implicitly.

Callan Harrington  24:20

There's a lot of truth to that. And the reality is, I actually agree with the things that you just said there. I'm a very big believer that if you have the right character traits, I'll take that over experience all day. Now, there are some unique roles that need some unique experience when you're talking about very high-level enterprise tech and things like that. So there are some exceptions. I got blasted on that on LinkedIn over saying that, but I totally agree with what you're saying.

Matthew Achak  24:46

But my whole philosophy was, you actually don't need to worry so much about that because if you build the compensation plan correctly, you won't have to manage them. It will do itself. They will understand what the levers are, and if they're hungry, and if they want to succeed, and if they want to win, they will run with it themselves. You will actually have to tell them to take a break.

Callan Harrington  25:08

One of the things I'm super interested in, because as I mentioned, that philosophy I totally agree with on the experience, I found that a lot easier to implement in SaaS and in tech sales than I did in service sales. Because service sales, to me, is very much—you've got to build deep relationships. How did you teach them how to do that?

Matthew Achak  25:28

I think, like everything, it depends. Now, I don't have a ton of experience selling SaaS. I just know enough about it. We work with tons of SaaS salespeople. I know how their compensation plans are built, and I know how the sales work. But I will say that the hungrier that individual is that you bring on, the more willing they are to do whatever it takes to sell, the easier the plan is. And I think the biggest thing, in my opinion—the most important thing—is to create a true believer. And what I mean by a true believer—and this is where I think a lot of companies fall down, and I will stand by this idea till my deathbed—whatever you're selling, it has to be something you truly believe in. You have to believe not only that it's important, but that you are helping in some way. If you don't believe that, if you cannot look your client in the eye and say, "I believe in this company, and I believe in this product or service," I don't know if you can truly be a great salesperson. Because your client's not dumb. They'll see right through it. They're just going to demand concessions—"Oh, whatever. Give me a cheaper price." But people love to be a part of greatness. They love it. We all love it. Like when somebody talks about something really cool, and they do it in a way that they're not selling it—they're just talking about something that's amazing—people want to come along for that ride because they can see it's great.

Callan Harrington  26:55

And you know what else I'll add on to that? The best salespeople play to win, not play to lose, right? It's hard to play to win if you don't believe in your product. Yes, because it's so easy to concede, to say, "Like, oh, you know what? If I don't really believe in this, I probably am going to concede on price or some other item that we normally charge for," or whatever that might be. It's so hard to do. I totally agree with that.

Matthew Achak  27:20

If you don't believe in your company and in what you guys are doing and what you're trying to achieve 100%, you can't differentiate it. It becomes price. But if you are a true believer in what that company is doing—100%—that you are changing that industry or changing something, if you believe in that with all of your soul, it becomes so easy to talk about why you are the company that that client should buy from because it always comes back to your differentiator. It never comes back to price. Price—if you're talking about price, you've already lost. It's not going anywhere. Price should simply be, "Look, we will get you there. We'll get you to the price you need to get to satisfy your management team. But let's talk about what we are as an organization and how we fit in with how your company operates."

Callan Harrington  28:15

What's interesting is I can still see the passion in how you're talking about this today, and I love that. And one of the things on my mind that I'm curious about is, what did that feel like the moment this deal was done? Was it a "I hit it; I reached the top of the mountain. The goal has been reached." Or was it "Now, what's next?" What was that for you?

Matthew Achak  28:37

The deal was signed in October of 2019, three months before the pandemic hit. So that was interesting. Callan, I would say this: Was there a feeling of relief or anything? No, there was a little bit of sadness around this thing that we've built. I hope I'm doing the right thing. From my perspective, we've done all the due diligence, all the research; we were trying to find a company that could allow FCR to not only scale but also scale in a way that would career path all of our people who weren't in small towns. And career pathing was something that was very important because in many of these towns, that concept, again, had not existed. And so, you're always thinking, "Look, we want career pathways for everyone; we've got to find a company that opens that up—a large company." And so there was a sadness around, "I hope we did the right thing." We're having to let go. There was also a realization, "Man, I have a lot of work in front of me because I was going to run it for the next three years." And so I became the CEO of that entity that operated inside a larger entity that was theoretically still my company but also owned by another organization. And that was complicated. And so there was a realization that I've got some tough sledding ahead of me, and I'm going to run this thing through a pandemic, and we're going to have to rethink everything we're doing because we were all on-prem, and now we're going remote, which is completely different from how we operated. How are we going to do that? Well, you trust the culture, you trust the team, you trust the process, and you trust the DNA of your organization to see you through. But most importantly, you trust your people to make it happen. And it did. It all worked out. But that was, I think, a big realization that it was going to be harder than I realized. There was some relief in the process; it took a while. There was some relief when we finally made a decision and got it done. But mostly, I think, there was this letting go—this baby that we kind of created—now it's starting to get grown up, and it's time to release it into something bigger. 

Callan Harrington  30:44

That is such a cool story. And I'm always curious because you hear from a lot of people that when they sell the company, it's the goal, but at the same time, it's also very, very difficult to do. But Matt, the last question that I have for you is, if you could have a conversation with your younger self—age totally up to you—what would that conversation be, and what advice would you give them?

Matthew Achak  31:11

Wow, that's a good question. You know what I would tell them? I would say, make yourself an interesting person, right? You're going to do interesting things. Do that. I think one of the challenges I think kids right now are running into is they're thinking about their career first, rather than their life first. And what I mean by that is, I always think about that idea of, "Would you find yourself interesting if you sat next to yourself in a bar?" So you plop yourself down next to yourself—let's say you're a young person, you're a younger version of yourself—and you sat next to an older version of yourself, would you find yourself interesting? And the advice I would give myself is, keep doing interesting things, right? Take those cross-country trips without knowing what's going to happen. Try stuff. Learn different things. Learn languages, learn instruments, build experiences. Because by doing things like that, you make yourself more interesting, and you create stories to tell about yourself later. You can draw on these stories, and people love to talk about interesting stories. Because this is important: people like to share their stories too, and it's a great way that we can trade experiences. So the more experiences you have, the more ways you can trade your experiences with others.

Callan Harrington  32:34

That was the most interesting answer that I have got on this show to date, and I so agree with that. I'm a huge believer in stories and storytelling and everything else, but you're right. It's those random stories that are the ones that stick, and then the next person tells the next story, and then before you know it, hours later, you're trading back stories, and the time flew by, and you've built a deeper connection as a result of it.

Matthew Achak  33:00

We never remember the mundane job that we had that was one more rung on the ladder, but we always remember the crazy trip we took where our car broke down and our battery died, and we met some random people, and we had this crazy night, and then it took us in a whole new direction that day. We always remember that.

Callan Harrington  33:23

It's the coin flip all over again. Matt, this has been excellent. Thank you for coming on. I really enjoyed this.

Matthew Achak  33:32

It was a pleasure, Callan. Thank you for having me.

Callan Harrington  33:34

This was great. I hope you enjoyed Matt and my conversation. I loved having this conversation with Matt to pick up on all the passion that he brought to his business. If you want to learn more about Matt, you can find him on LinkedIn in the show notes. Also, if you liked this episode, you can find me on LinkedIn to let me know. And if you really want to support the show, a review on Apple Podcasts or Spotify is very much appreciated. Thanks for listening, everybody, and I'll see you next week.