November 5, 2024 • 36 mins
When Craig Rupp left Iowa in the 80s, he never wanted to step foot on a farm again. A whirlwind career as an engineer took him to some of the biggest companies - Motorola, Apple, Samsung - but he always felt a strong connection to his roots. He had an idea he couldn’t shake - an opportunity to change farming forever. Introducing Sabanto and its best-in-class Autonomous Operator, Steward. On the day of their first big test, the tractor froze, stuck in a field in a blizzard - no planting, no company, no future. If Craig wanted this to work, he had to find a solution - and fast.
Ben is back with a series of episodes celebrating businesses from across America, starting with the great state of Iowa and Sabanto Agriculture. Joining Ben is Sachin Seghal Founder of Elevate Digital Marketing in Des Moines and Brian Lamb, Northeast segment head for Middle Market at JPMorgan Chase. Together they discuss the developments in Artificial Intelligence and its importance for small businesses while sharing insights on how small businesses can effectively transition to mid-sized enterprises and beyond.
The Unshakeables is brought to you by Chase for Business and Ruby Studio by iHeartMedia
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker (00:09):
Iowa the land of fields, whether it's fields full of corn
or fields full of baseball dreams and those fields, they're
often full of tractors. The site is so common. Most
people don't even notice them
until they notice that they're driving with no one at
the steering wheel.
Sheriff's office. Can I help you? I just saw something
(00:29):
a little strange. A tractor out in the cornfield that
was driving along by itself.
There was nobody on the tractor but it was moving.
Could you actually tell there was nobody in it? Yeah,
because it's an open cab tractor.
It was, there was no one on the seat. I
(00:51):
just felt like I should probably let somebody know. I
don't know if someone can go out there and just
check the seat. Ok. We'll have somebody check it out. Ok,
thank you. All right, thanks.
That's just one of many times that Craig Rupp had
911 called on him and not because he's going around
pushing people out of tractors, but because his company Sabato
(01:13):
is changing the way America farms forever.
I knew agriculture. I knew machines. I wanted to disrupt
the industry. I want to send a message that autonomy
is coming in agriculture. That's why I think the next
generation tractors are already sitting in your machine shed.
(01:37):
Welcome to The Unshakeables from Chase For Business and Ruby
Studio from iHeartMedia. I'm Ben Walter CEO of Chase for Business,
on The Unshakeables We're sharing the daring moments of small business owners
facing their crisis points and telling the stories of how
they got through it. If you're new to the show. Welcome,
if you've been listening, welcome back over the next few weeks,
(02:01):
we'll be highlighting exceptional small businesses from across the country.
We'll also be hearing from experts in those markets who
can tell us what the business and communities supporting them
mean for America. But this week, we're firmly in the
Hawkeye State and we have two great guests joining us today,
Brian Lamb and Sachin Sehgal.
(02:21):
You know, the more we learned about Sabanto and Craig's business,
the more it made sense to have those intimately familiar
with the local market. Come on and chat with us.
Sachin is the founder of elevate digital marketing, an agency
based in Des Moines, Iowa Satin. Welcome to the unshakeable.
Thank you very much, Ben. It's great to meet you.
So I really love Iowa. I grew up here. I
(02:43):
have a small business here and I really love it
as a place for innovation.
I know most people picture the coasts when they think
about A I and tech, but there's so much happening
in the Midwest that I'm excited to show off. All right,
let's get into the show. This is Sabanto Agriculture from
Ames Iowa.
(03:05):
I was fortunate enough to spend some time in Iowa
this summer. What really stood out to me is just
how much Iowans love Iowa. I talked to some terrific
people and it's amazing how people all over Iowa seem
to have this real emotional and almost physical connection to agriculture. It,
it's just a way of life in Iowa. So as
soon as I met Craig, there was one question I
(03:26):
had to ask immediately.
Craig, I believe you grew up on a farm. Is
that right? I most certainly did. I grew up on
a farm in northwest Iowa. A little town called Cherokee.
It's about 5000 people now and it was corn, soybeans,
hogs and cattle. What was that like growing up in
an agricultural community?
(03:50):
You know, it, it felt normal while I was there.
I guess that's what you knew. Right. That was your life. Yeah. Yeah.
And everyone I knew had something to do with farming
chores in the morning chores in the afternoon when you
got home from school, you know, you had to feed
the cattle, feed the hogs, you know, I just assumed
that this was a part of growing up outside working.
(04:12):
So when you were growing up in this rural community
on a farm,
did you imagine someday you would own a business No, I, I,
it was never really a plan for me. I never
would have imagined that I would ever start a company.
The little town I grew up in, had a radio
shack and then by God they had books and you
could learn about electronics. It was like the internet for
(04:34):
me back in the early eighties,
1984 when I graduated high school and went to college
to become an electrical engineer. I, I was convinced that
was the last time I would ever set my foot
on a farm again.
Craig followed that engineering track working at Motorola in the
(04:55):
nineties where he did hardware development for mobile phones. Around
1995 Craig and some fellow Motorolans saw an opportunity, mobile
and cellular devices were taking off. We had decided that
we're going to start a consulting company we would meet
in the mornings at a local restaurant and then we
kind of did the old pinky promise that if we
(05:17):
could get $30,000 in contracts, then
that would hold us out to the end of the year.
And it turns out about two weeks later, we had
$30,000 in contracts. So we gave her two weeks notice
and went out and started what was called Alliance Technologies Group.
Craig kept chasing his curiosity working at John Deere apple, blackberry,
(05:40):
Nokia Samsung, and a few other household names. And while
he never imagined he'd be an entrepreneur once he started
Alliance Technologies Group. He couldn't stop you. You have started
how many companies? Uh This is my sixth.
So the fifth company he started was called 640 Labs.
It combined his work at John Deere on internal cab
(06:01):
displays with his work on the Apple ipads cloud data
storage system.
My brother still farms. I was at his farm. I
was sitting in one of his tractors that he just
bought and I saw this little port, all the engine
data is on this port. And then my friend and I,
we started this company and the whole idea was we're
(06:23):
going to take data off of that port or off
of these vehicles. Agriculture data into the ipad, ipad up
into the cloud. So it was a very inexpensive way
of collecting data.
18 months later, we got acquired by Monsanto
at Monsanto. He was back in regular conversation with farmers.
(06:45):
I had a unique skill set. I knew farmers, I knew,
you know, what made them tick. I can talk with
them about planting corn soybeans. And you know, I'd always
ask the question, what keeps you up at night? And
it was always labor. You know, it was the cost
of labor. It was the lack of labor.
The availability of farm labor has changed over the years.
(07:08):
The average age of the American farmer is 59 and
farm families are much smaller than they used to be.
I have 57 1st cousins and both my parents had
double digit brothers and sisters and all of them had
a lot of Children and now just you have four kids. Now,
(07:30):
that's a big family. I thought, you know, autonomy is
the answer for it.
Ok. So this is where I want to bring Sachin
back in- Sachin, You've lived in Iowa your entire adult
life and it seems like you have no plans to leave. So,
what did you think about Craig's departure? He said he
never wanted to step foot on a farm again. You know,
(07:51):
it's interesting. I bet many people had the same ideas, Craig,
but there's a lot of people moving back to the
area post COVID because they kind of realized that Des
Moines has quite a bit to offer in terms of
innovation and entrepreneurship. So it's kind of nice to see
a boom coming back in.
We've heard from Craig about the path he took and
his background leading him to a place like Sabanto. But
(08:12):
what's striking to me is that this is a guy
who said he never wanted to be back in Iowa,
never be back on a farm. And now he's created
an agriculture company and is farming full time. I mean,
what do you make of that?
You know, we've seen a lot of companies in Iowa
and Des Moines specifically come out of the agricultural space
and a lot of companies providing new innovative solutions to
older problems. We've seen recycling companies doing things like plastic recycling.
(08:35):
We've seen fertilization companies with different types of fertilization techniques
and planters with different planting companies. So Craig is really
pioneering his way in that field on the agricultural side
of things, using A I and automation to bridge that
manual to tech divide,
you know, so much evidence of innovation in that sector. So,
but I do want to talk about A I for
(08:56):
a second because it's everywhere you can't pick up the
paper without reading about it. Assuming you actually pick up
a paper anymore. But that's a different issue and it's changing,
people are talking about it, changing the way we all
do business. So do you use A I in your work?
We use A I all the time, we use multiple
different tools. It's kind of a, a common theme that
we're seeing with a lot of businesses actually using A
I in different ways to, to bridge that gap between
(09:19):
maybe manual processes that they've been doing in the past
and completely digitally native processes that they're moving in towards.
Even if that's just an email follow up automation when
a client checks out or just finding A I chat
bots or even call bots that uh someone can call
and interact with.
Yeah, automation and A I are going to be a
huge help for small businesses. One of my clients in
(09:41):
particular similar to Craig, their business leads with A I
as a solution. They're a telecom provider. And one of
the things they provide is an A I detection of
safety equipment for schools, organizations, municipalities. So, you know, when
you see someone with a fire hazard or, or some
sort of uh threat to, you know, the safety of
(10:01):
a building,
this company is using A I to basically dispatch emergency services.
So, Craig's goal with Sabanto is to make up for the
lack of human labor and farming where he sees a
shortage and that could stoke a lot of people's fear
about A I replacing human jobs. What would you say
to them? There may be rules that are just moved
around in the company. But
(10:21):
at the end of the day, you definitely need a
person before you can just push A I content out
there unless it's pretty much just gathering information. So we
see it on our end a lot where the A
I will get you really close to the end result
that you're looking for. But you still need to do
a little bit of manual input. It does a great
job with graphics design, things like that as well, but
(10:41):
it just still needs a human touch at the end
of it to get it ready for production.
I tend to agree with you, Sachin. I think we've
had other technological revolutions before and there's always been the
threat of job eliminations and there always have been some,
but it's, they've always created more jobs than they've eliminated.
They've just been different. And I think this time will
be no different.
So, back to Craig, he like Satin knew the problem.
(11:04):
Not enough help on the farm and the solution, it's autonomy.
If this was a math test, this would be the
part where Craig would have to show his work. I'll
let him walk you through the steps.
So I've written software, done hardware. I have started companies
in the past. I knew farmers, I knew what made
them tick. And I used to work a lot automating
(11:26):
manufacturing plants. If there's anyone that can do this, I
can do this.
In 2018, I started the company. I went out and
leased a 4220 AJ CB tractor and I went out
and bought an 18 year old 20 inch planter and
I got a CD L that's a commercial driver's license,
(11:48):
by the way, Craig got it so he could drive
the semi truck to haul his tractor to farms across America.
And I spent the winter writing software. I promise I'm tracking.
At least I know what a planter is when you
start telling me what kind of planter. I confess, I've
lost the plot but to anyone who's worked on a farm,
I'm assuming they know. Yeah, it's a standard 18 year
(12:09):
old 20 inch and we're planting soybeans farmers kind of
an uh,
a group of people. They, you know, they won't trust
anyone to plant corn. The only thing I know about
corn is it's supposed to be thigh high by the
fourth of July. Uh, yeah, that, that was, you know,
back in the thirties or so. But now, you know,
now it's typically shoulder high by the fourth of July
(12:32):
with corn off the table. Craig went after soybeans, he
set his sights on having a minimum viable product to
test in the spring of 2019.
He spoke to a few people about testing the tractor
out on their fields.
Agriculture has two degrees of separation. So I swear to God,
I can get to any farmer in the US through
(12:53):
two people. If you're keeping score, that's four degrees less
than Kevin Bacon would need to get to someone. Yeah,
I've met him, by the way.
Word of Craig's wild autonomous planter spread quickly
after about two weeks of word on the street that
some crazy guy is gonna stop by with a autonomous
(13:13):
tractor and planter and autonomously plant their crops. They were
lined up. Craig launched Sabanto on May 3rd 2019. He
didn't choose that date because it was some momentous occasion.
It was once again all up to the farmers.
It was the farmer that told me early May we're
(13:35):
going to be planting so you better have everything together.
Craig didn't, but he launched anyway,
I slept in the uh sleeper of that Peter bilt
and there were some cold nights because I didn't have
a heater in it, but it was a learning experience.
The software was nowhere close to being product. I it
was more of a proof of concept. Can this thing run?
(13:58):
Craig drove the semi and the tractor planting beans across
the Midwest.
It was a very rainy spring. So on days he
got rained out of planting. He was flying out to
California to meet with V CS. Raising money from V
CS isn't always easy, but Craig had a good track
record to back him up.
Everyone saw 640 labs. Kind of an interesting little company
(14:18):
that got swallowed up quickly by Monsanto and I was
a co founder of that company. And I think that
gave me a lot of credibility when getting in front
of V CS. Lo and behold, I, I got a
term sheet and I closed on a funding round. Craig
had squeaked through that first season planting, but if he
wanted to make Sabanto succeed, he needed a team.
(14:42):
So I went back to Chicago and I convinced five
people to leave their perfectly paying job and join me
in this quest to take autonomy into agriculture. Did you
think after that first season, did you think, you know,
I've got something here like it might have been hard
work and it might have been, it might have been difficult,
but I've, I've got something or you weren't sure I
(15:04):
knew all the problems I ran into were solvable
and, you know, II I knew I couldn't do it myself.
I mean, it was all off the shelf components. It was,
you know, a big box sitting in the tractor wires
going all over. And the software there was, it was
literally command line software. There's still a hell of a
(15:27):
lot of development that needed to be done on it. Well,
someone who remembers the late seventies and early eighties, I
learned to run software on command line. But I think
uh I think today that doesn't meet the hurdle, does it?
Uh No.
So then you got some funding. How much did you raise?
$2 million? Ok. So you get some funding, I assume,
then you start working on truly products, this and making
(15:47):
it sort of fit for purpose and building it out properly.
Is that what came next?
Yeah, it wasn't necessarily products and it was more of
take it to the next level, get it to work reliably.
In early fall 2019, 1 of Craig's farmer friends reached
out and said that he had 350 acres of land
(16:09):
that needed to be seeded with a cover crop for
the winter planted after the fall harvest, cover crops, help
revitalize the soil and prep it for spring planting again.
I thought, well, this is perfect.
They were finally able to get started in mid November.
Craig experimented with smaller horsepower tractors with his software to
see if that helped reliability
(16:30):
horsepower equals work divided by time, what autonomy does is
it increases time and time is inversely proportional to horsepower.
So you increase time, you decrease horsepower.
They tested it out on smaller fields before they went
to the 350 acre plot.
We had an 80 acre field and 6 a.m. in
(16:52):
the morning. We're out there, let's get going on this.
We should be able to get this done by uh
23 o'clock. Right, We left the field at right around
2 a.m.
and we had only covered about 10 acres
this time, we actually practiced before we got there and
(17:12):
everything's working fine and we get to the field and
nothing is working. The planter won't plant and the engineers
are working feverishly trying to fix it and between the
path planning, controlling the stamp thing, making sure it goes straight,
making sure gps is working. It was really bad. And
(17:32):
the six of us
went back that night and I know everyone was absolutely frustrated.
I remember going to bed at around two o'clock and
waking up at four o'clock and thinking to myself, what
the hell did I get myself into? We hear that
phrase a lot
nature as we know runs on its own schedule. Mid
(17:55):
November rolled around and it was time to plant 350
acres of cover crop, whether Craig and his team were
ready to or not. They took their tractors out to
rural Illinois to the farm and set up their mobile
lab in the tent by the side of the field.
You know, 300 is a very large number when you're
10 ft wide and, you know, going five mile an hour.
(18:16):
So we're doing five acres an hour. And if you think, oh,
we'll just run it 24 hours and, you know, it
will be done in three days.
The guys were laughing, they still laugh about just sitting
in this little tent in the, in the late afternoon,
about four or five o'clock, it just started snowing and
then by,
(18:37):
oh, I'd say midnight one o'clock, uh the wind kicked
up and it started blizzard if you can imagine just
the blowing wind. And then the six of us sitting
in this little tent tractor out there still working. Mind you.
And there's someone sitting out on the tractor and we
would take shifts on who had to sit out on
(18:57):
the tractor. We had snow mobile suits and insulated coveralls
and whatnot. But someone had to be the poor bastard
who had to go out and sit on the tractor
for the next hour or two because we didn't have
absolute control of the tractor. There was some functionality missing.
If it goes over a little hill, we would lose
communications with it. And then the person would have to
(19:18):
do it manually park the tractor over here and then
let's see if we can get a path plan made.
And for one reason or another, we were off by
2 ft to the left. It was, it was pure hell.
And this wasn't just one day. This was over multiple days.
I was concerned that some of the guys would not
(19:40):
come back the next, next time because this is perhaps
the craziest thing they've ever done. Oh, and by the way,
all six of them were staying in the farmer's basement.
During all of this, two of us got a bed
and then the other four of us were sleeping on
the floor. The other thing to add insult to injury,
(20:02):
the shower, the hot water didn't work on the shower.
You know, we didn't want to let the farmer know
because he's out doing field work and I don't want
to bother him. So we didn't say anything about it.
But then we were taking cold showers and living in
a basement and then trying to, uh trying to get
this damn thing to work in the end, the 350
acre field they thought would take three days. It took
(20:24):
three weeks.
We felt defeated. There was a lot of fear, uncertainty
and doubt.
I'm sure everyone in the company had reservations about. Is
this going to work? Is this going to get better?
Like why am I doing this? Did you think about
giving up at the time? No, no,
(20:45):
I don't quit.
When did it come along far enough that you thought? Ok,
I've cracked this nut in 2021. We were doing tillage
just west of Chicago. We ran at 48 hours nonstop.
We let this thing loose in a, oh God, I
think it was 480 acre field and this thing ran
(21:06):
day in day out, never stopped. And
at the time I looked at this and I'm like,
I started to see light at the end of the tunnel,
we had path planning working. We were monitoring all aspects
of the tractor. We were holding the line within a
good one inch, two inches and it was just a
matter of keeping fuel in it. Craig had finally figured
(21:29):
it out. And since 2021 Sabanto has continued to grow,
their autonomous product is called steward and it supports 19
different tractor models. As of today,
we have 40 employees right now, split between Iowa and
Chicago and we have a good 30 to 40 customers
right now. Farming operations all scattered throughout the US. We
(21:51):
have quite a lot in Florida and Georgia starting to
do a lot in Texas right now. From California to
New York, Texas, to Wisconsin.
Oh, wow. So really, truly nationwide. Do you retrofit someone's tractor?
Did you send someone out to install this on the
tractor they already have or do you just send them
a kit and they do it themselves? How does this
actually work?
So, we have dealers throughout the US and normally they
(22:16):
do the installation and we obviously help with the installation.
So we get to a farming operation and we do
a demo at this point in time, we actually haul
a tractor onto their premises and let them use it
for two weeks. And once they get hooked,
(22:37):
whatever tractor that they have, what we do is we
install the autonomy system on that tractor and then they
can remotely control and monitor that tractor perform field operations.
I did a little bit of research before this interview
and I learned all about
the technology investments that the big guys are making. The
deers of the world are making in terms of autonomous tractors.
(22:59):
You know, these big combines that can do all the
stuff that can laser the weeds and whatever. But I
also learned all about the right to repair battles that
are going on between farmers and manufacturers. So I'm curious,
does your solution play into that at all? You know,
the ability to sort of keep your tractor and repair
it and do what you want and then have some
of these autonomous features just layered on at a, at
a lower cost.
(23:20):
I'm all for the right to repair. I'll, I'll be
honest with you. If someone could fix something remotely without
me getting involved, I'm all for that. And we give
them the tools in order to do that. But it
is an interesting alternative. You know, you can go to
one of the big manufacturers and buy this giant very
expensive smart tractor or smart seater or smart whatever or
(23:41):
you can take the equipment that you already have and
give you a call and make it smart. Your next
generation tractors are sitting in your machine shed.
I just love that idea so much. The next generation
tractor is the one you already own. I think a
lot of people stumble onto great ideas that seem so
totally out of the blue, but make perfect sense. Once
you look at combining some tools that no one's considered
(24:04):
as a result, Craig's business has grown considerably and as
part of that growth, he's moving into a new segment
of our bank
for our listeners, I lead small business here at Chase
and Brian Lamb, my friend and partner is the northeast segment.
Head for the middle market. We work closely together to
take care of those businesses who are growing to the
next level. And so I wanted to bring Brian in
(24:26):
to give people a sense for what that means. So Brian,
it's great to have you on the show. Thanks for
being
here,
Ben. It's good to see you. Good to be here.
And uh thanks for having me. It's exciting to see
companies progress in their growth trajectory and there's some common
themes and patterns I I maybe can touch on first
you hear the term middle market. What does that mean?
(24:48):
Generally it means first that you have reached a certain
size and complexity size could be driven by revenue. Maybe
you've got, you know, go from 10 million to 20 million.
That's one example. Also, complexity, complexity could be defined as,
you know, the geographies that you cover. Maybe it used
to be a city and a county and now it's
(25:10):
states or maybe even countries. The other part of the
complexity is your capital structure. Maybe historically had a small
line of credit or a credit card or you were
able to actually build that business with friends and family capital.
But now you're moving to different types of capital and
different types of financial needs. If I think about the
transition and
(25:30):
maybe one of the one or two of the things
I see companies that do it well. And by the way,
I got to pause and applaud what Craig and Sabanto
to have, have done, they've done a fantastic job of
scaling and growing. What I see is a challenge though,
I would tell you is when companies don't anticipate some
of those needs that may happen when they get much bigger,
(25:51):
I'll give you a couple of examples. One, their working
capital needs change dramatically, right? When, when you own a
small business, there's the phrase, hey, making Payroll where it's
not always a figure of speech, you know, but managing
your working capital and the cash collection cycle can become
very complex as you get much bigger. And we see
a lot of companies struggle there. The second thing believe
(26:14):
it or not is talent, right? You know, Ben, you
and I always talk about the talent that you may
have started with when you were a small company may
need to look different. The folks that are really helping
you run and scale the business
talent becomes a really big consideration. And then partners
who are the partners, who are the advisors, your accountant,
your lawyer, your bank, the in the institutions that ultimately
(26:38):
help you make sound decisions for growth. You have to
think about those as well as you scale and grow.
Yeah. The other thing I I often talk about is
a combination of complexity and scale, particularly with respect to your,
your staff. I always say there are two big inflection
points when you are growing a staff, when you have
up to 50 people or so, you can really know
(27:00):
all of them and you know which ones are good
and which ones are less good and which ones have,
which quirks and there's an inflection. Once you go beyond
50 you can't know all of them. It's tough up
to about 200. You can still know who all of
them are. You don't know them. You probably only know
that about 50 but you know who the 200 are.
And then once you hit 200 you see people and
(27:22):
you don't know if they work for you or not.
And that's a really different mindset around your business because
you really are relying on your leaders to know those
employees and to cascade your message. And so I always
tell people that you, that you need to think about
those two inflection points 5200. Like when do I stop
knowing everyone personally? And when do I stop knowing who
everyone is?
I
love it be because
(27:44):
I think those are really interesting goalposts to think about.
And it goes back to something you and I always
talk about, which is culture when you built the company,
when you started it and you began to grow, there
was a culture, there were values, there were principles that
you as the leader as the founder believed in. Well,
you don't want to lose those as you grow and
(28:06):
so you can make all of these other really smart
business decisions. But to your point
as you start having hundreds of employees, one of the
things that you most importantly want to focus on and
protect is the very culture that helped you be successful
from the beginning when you grow, slow down
and just realize what got you to that point, you
(28:28):
may have to do some things differently to continue to
scale and grow.
Have you ever seen in these growing companies? A founder
and CEO actually bring in and hire a CEO and
say I'm going to do the things that I like
doing and I'm good at, but I'm going to have
a professional run. The actual uh do you see
that?
I, I, Ben, I would tell you, I see it
more often than not. Actually, when a company has reached
a certain inflection point, they've grown, maybe they have international
(28:53):
services and products now, maybe they've expanded into different product
lines which requires different expertise to your point. They are
a much bigger people business. Now, they've got 1000 employees
instead of 100.
I have seen investors and founders bring in a new
CEO that is a better fit, I guess I would
(29:15):
say is the word. It doesn't mean that that founder
CEO investor doesn't add tremendous value
and they still own and they still
own the business. And
in almost every scenario, they still own the business.
But they have found someone that's a good fit for
where that company is in the life cycle of their growth.
And I got to tell you when I've seen that happen,
(29:37):
I've seen that company thrive and grow.
One of the things that I often hear clients talk
about as they transition up to the middle market is
I need to build infrastructure. I'm running this thing on
a shoestring. I'm running this thing informally. I've got to
build infrastructure to scale this thing. What does that actually mean? Yeah.
No, it's important infrastructure
could mean things like
(29:58):
investing in technology to improve automation, right? Maybe before manual
processes because of the size and scale of your business
really made sense financially, you know, strategy wise. But as
you get much bigger and you become more complex,
having digital capabilities for your teams and your clients will matter,
(30:21):
automating processes to streamline how you do business and remain
if you will efficient, become important. Another example of infrastructure
might be cybersecurity, just protecting the value and the assets
that you've created. I see this all the time at
JP Morgan Chase. And
one of the things I try to get folks to
(30:41):
think about is even though cyber and fraud, those may
be things that you're aware of. Are you doing enough
in your infrastructure to harden the assets and maybe one
other infrastructure point I would raise as you think about
your scale and your growth
is the quality of your financial statements
and your ability to produce timely reliable reporting, both operational
(31:08):
reporting and financial reporting. It will help you make better
decisions that will better inform your partners and advisor that
you work with on a regular basis. And principally I
call it helping you look around the corner, right? You
may see things in those operational and financial reports
that help inform what your next best decision might be.
(31:30):
I tell you what it's exciting to see those leaders
that can make that sustainable transition, right? And there are
a couple of key I guess elements I see or
dimensions I see in those types of leaders. One they
just
always are resisting complacency. The idea that you have reached
a certain plateau and that you can cruise or that
(31:52):
you think you've done enough that your competitive advantage will stand.
The test of time. Second is diversification.
So the products and services or the geography or the
client base that you built over the years, I would
encourage folks to be restless about continuing to diversify their business. Right.
Maybe there's new products and services. Maybe you, you've historically
(32:15):
grown through acquisition and you're going to do a better
job through organic. Look at your share of wallet, right?
Even though you've got a great client base, could you
deepen that share of wallet? Could you take a bigger
percentage of their spin and
they do business with you? Your margins? There's always an
opportunity to look at margin improvement even as you grow.
(32:37):
Can you grow profitably in a very efficient way? And
maybe the last thing I see leaders do is kind
of a deep focus on productivity,
right? They've gotten to a really big size and scale,
they've continued to grow. And now what could they do
for every incremental dollar they invest? How productive is that individual?
(32:57):
Is that investment? And is it driving the returns that
a business owner would expect? And so
when I think about those leaders that kind of bend
the curve, those are some of the key elements I
see them demonstrate,
it seems like what reads through all that though is
continued hunger.
It's really special to see the small businesses thrive and
grow and move into the middle market and beyond. And
(33:21):
so that is at the end of the day, one
of the most important elements of this country is a
chance for us to do business and see companies grow.
And finally, Sachin, I want to bring you back in.
Here is Craig's story unusual and that he's been successful
in an area that the big companies have been going
after or do you see that frequently? Craig's story definitely
(33:42):
isn't unique. I'd say in terms of entrepreneurs creating more
efficient ways to do things in an older industry such
as agriculture. There's definitely a lot of entrepreneurship and young
companies that are making waves in the industry where generally
you see big players for the most part.
Uh Craig touched on something that I think is important,
which is in a world that is increasingly tech driven
(34:04):
where you, you know, you're in a part of the
country that doesn't necessarily have the depth of tech talent
that a Chicago or a Silicon Valley or New York
City has. How does the region and how do the
entrepreneurs in the region face into that? What does that
feel like on the ground? He's definitely right about that,
the talent locally, especially with universities and things like that.
Even though Iowa State and Iowa are great, they have
great tech programs, great for your science programs.
(34:26):
I think family history and the culture of the state
really breeds a lot of people that are still lean
in the agricultural side of things. But when it comes
to the tech side of things, we realize that there
may not be such a big talent pool here in
the Midwest or in Des Moines or in Iowa specifically.
So people will pull from Chicago or bigger markets where
there are more intense tech pools and kind of marry
(34:48):
those two different industries on how to communicate the tech
side of things with what your project on the ground
is going to be. What do you think are, are
the advantages to owning and starting a business in a
place like Iowa?
I can speak to Des Moines specifically. The entrepreneurial community
here is really vibrant, it's really thriving and there's so
many cool local resources that you can tie into to
(35:11):
get either well networked or find funding and being from
a smaller town and a smaller demographic in a, in
a geographical area, you definitely get to know each other
a little bit better. So the ability to connect with
people that you're trying to get in contact with. It's
a shorter connection. Generally, it's also even a personal connection
where you can find someone that
know someone personally that you can get in contact with.
(35:33):
So it's becoming a little bit more of a cultural
hub for smaller agricultural companies and smaller start ups. I
hope that continues that that trend would be, would be
really cool to see flourish over here.
Thanks so much for listening to this episode of the unshakeable.
And thank you to Craig Rupp Sachin Sehgal and Brian
(35:53):
Lamb for speaking with us today. If you like this episode,
please rate and review it. And if you know someone
who may like the series, please tell them about it.
Next episode, we'll hear from an entrepreneur who started a
company with the full backing of her previous employer. Not
just emotional support either they guaranteed her clients and contracts.
If she started her own company,
we'll be speaking with Quanetta McNeal CEO of House of
(36:16):
Logistics out of Birmingham, Alabama.
I'm Ben Walter and this is The Unshakeables from Chase
For Business and Ruby Studio from iHeartMedia.
Iowa the land of fields, whether it's fields full of corn
or fields full of baseball dreams and those fields, they're
often full of tractors. The site is so common. Most
people don't even notice them
until they notice that they're driving with no one at
the steering wheel.
Sheriff's office. Can I help you? I just saw something
(00:29):
a little strange. A tractor out in the cornfield that
was driving along by itself.
There was nobody on the tractor but it was moving.
Could you actually tell there was nobody in it? Yeah,
because it's an open cab tractor.
It was, there was no one on the seat. I
(00:51):
just felt like I should probably let somebody know. I
don't know if someone can go out there and just
check the seat. Ok. We'll have somebody check it out. Ok,
thank you. All right, thanks.
That's just one of many times that Craig Rupp had
911 called on him and not because he's going around
pushing people out of tractors, but because his company Sabato
(01:13):
is changing the way America farms forever.
I knew agriculture. I knew machines. I wanted to disrupt
the industry. I want to send a message that autonomy
is coming in agriculture. That's why I think the next
generation tractors are already sitting in your machine shed.
(01:37):
Welcome to The Unshakeables from Chase For Business and Ruby
Studio from iHeartMedia. I'm Ben Walter CEO of Chase for Business,
on The Unshakeables We're sharing the daring moments of small business owners
facing their crisis points and telling the stories of how
they got through it. If you're new to the show. Welcome,
if you've been listening, welcome back over the next few weeks,
(02:01):
we'll be highlighting exceptional small businesses from across the country.
We'll also be hearing from experts in those markets who
can tell us what the business and communities supporting them
mean for America. But this week, we're firmly in the
Hawkeye State and we have two great guests joining us today,
Brian Lamb and Sachin Sehgal.
(02:21):
You know, the more we learned about Sabanto and Craig's business,
the more it made sense to have those intimately familiar
with the local market. Come on and chat with us.
Sachin is the founder of elevate digital marketing, an agency
based in Des Moines, Iowa Satin. Welcome to the unshakeable.
Thank you very much, Ben. It's great to meet you.
So I really love Iowa. I grew up here. I
(02:43):
have a small business here and I really love it
as a place for innovation.
I know most people picture the coasts when they think
about A I and tech, but there's so much happening
in the Midwest that I'm excited to show off. All right,
let's get into the show. This is Sabanto Agriculture from
Ames Iowa.
(03:05):
I was fortunate enough to spend some time in Iowa
this summer. What really stood out to me is just
how much Iowans love Iowa. I talked to some terrific
people and it's amazing how people all over Iowa seem
to have this real emotional and almost physical connection to agriculture. It,
it's just a way of life in Iowa. So as
soon as I met Craig, there was one question I
(03:26):
had to ask immediately.
Craig, I believe you grew up on a farm. Is
that right? I most certainly did. I grew up on
a farm in northwest Iowa. A little town called Cherokee.
It's about 5000 people now and it was corn, soybeans,
hogs and cattle. What was that like growing up in
an agricultural community?
(03:50):
You know, it, it felt normal while I was there.
I guess that's what you knew. Right. That was your life. Yeah. Yeah.
And everyone I knew had something to do with farming
chores in the morning chores in the afternoon when you
got home from school, you know, you had to feed
the cattle, feed the hogs, you know, I just assumed
that this was a part of growing up outside working.
(04:12):
So when you were growing up in this rural community
on a farm,
did you imagine someday you would own a business No, I, I,
it was never really a plan for me. I never
would have imagined that I would ever start a company.
The little town I grew up in, had a radio
shack and then by God they had books and you
could learn about electronics. It was like the internet for
(04:34):
me back in the early eighties,
1984 when I graduated high school and went to college
to become an electrical engineer. I, I was convinced that
was the last time I would ever set my foot
on a farm again.
Craig followed that engineering track working at Motorola in the
(04:55):
nineties where he did hardware development for mobile phones. Around
1995 Craig and some fellow Motorolans saw an opportunity, mobile
and cellular devices were taking off. We had decided that
we're going to start a consulting company we would meet
in the mornings at a local restaurant and then we
kind of did the old pinky promise that if we
(05:17):
could get $30,000 in contracts, then
that would hold us out to the end of the year.
And it turns out about two weeks later, we had
$30,000 in contracts. So we gave her two weeks notice
and went out and started what was called Alliance Technologies Group.
Craig kept chasing his curiosity working at John Deere apple, blackberry,
(05:40):
Nokia Samsung, and a few other household names. And while
he never imagined he'd be an entrepreneur once he started
Alliance Technologies Group. He couldn't stop you. You have started
how many companies? Uh This is my sixth.
So the fifth company he started was called 640 Labs.
It combined his work at John Deere on internal cab
(06:01):
displays with his work on the Apple ipads cloud data
storage system.
My brother still farms. I was at his farm. I
was sitting in one of his tractors that he just
bought and I saw this little port, all the engine
data is on this port. And then my friend and I,
we started this company and the whole idea was we're
(06:23):
going to take data off of that port or off
of these vehicles. Agriculture data into the ipad, ipad up
into the cloud. So it was a very inexpensive way
of collecting data.
18 months later, we got acquired by Monsanto
at Monsanto. He was back in regular conversation with farmers.
(06:45):
I had a unique skill set. I knew farmers, I knew,
you know, what made them tick. I can talk with
them about planting corn soybeans. And you know, I'd always
ask the question, what keeps you up at night? And
it was always labor. You know, it was the cost
of labor. It was the lack of labor.
The availability of farm labor has changed over the years.
(07:08):
The average age of the American farmer is 59 and
farm families are much smaller than they used to be.
I have 57 1st cousins and both my parents had
double digit brothers and sisters and all of them had
a lot of Children and now just you have four kids. Now,
(07:30):
that's a big family. I thought, you know, autonomy is
the answer for it.
Ok. So this is where I want to bring Sachin
back in- Sachin, You've lived in Iowa your entire adult
life and it seems like you have no plans to leave. So,
what did you think about Craig's departure? He said he
never wanted to step foot on a farm again. You know,
(07:51):
it's interesting. I bet many people had the same ideas, Craig,
but there's a lot of people moving back to the
area post COVID because they kind of realized that Des
Moines has quite a bit to offer in terms of
innovation and entrepreneurship. So it's kind of nice to see
a boom coming back in.
We've heard from Craig about the path he took and
his background leading him to a place like Sabanto. But
(08:12):
what's striking to me is that this is a guy
who said he never wanted to be back in Iowa,
never be back on a farm. And now he's created
an agriculture company and is farming full time. I mean,
what do you make of that?
You know, we've seen a lot of companies in Iowa
and Des Moines specifically come out of the agricultural space
and a lot of companies providing new innovative solutions to
older problems. We've seen recycling companies doing things like plastic recycling.
(08:35):
We've seen fertilization companies with different types of fertilization techniques
and planters with different planting companies. So Craig is really
pioneering his way in that field on the agricultural side
of things, using A I and automation to bridge that
manual to tech divide,
you know, so much evidence of innovation in that sector. So,
but I do want to talk about A I for
(08:56):
a second because it's everywhere you can't pick up the
paper without reading about it. Assuming you actually pick up
a paper anymore. But that's a different issue and it's changing,
people are talking about it, changing the way we all
do business. So do you use A I in your work?
We use A I all the time, we use multiple
different tools. It's kind of a, a common theme that
we're seeing with a lot of businesses actually using A
I in different ways to, to bridge that gap between
(09:19):
maybe manual processes that they've been doing in the past
and completely digitally native processes that they're moving in towards.
Even if that's just an email follow up automation when
a client checks out or just finding A I chat
bots or even call bots that uh someone can call
and interact with.
Yeah, automation and A I are going to be a
huge help for small businesses. One of my clients in
(09:41):
particular similar to Craig, their business leads with A I
as a solution. They're a telecom provider. And one of
the things they provide is an A I detection of
safety equipment for schools, organizations, municipalities. So, you know, when
you see someone with a fire hazard or, or some
sort of uh threat to, you know, the safety of
(10:01):
a building,
this company is using A I to basically dispatch emergency services.
So, Craig's goal with Sabanto is to make up for the
lack of human labor and farming where he sees a
shortage and that could stoke a lot of people's fear
about A I replacing human jobs. What would you say
to them? There may be rules that are just moved
around in the company. But
(10:21):
at the end of the day, you definitely need a
person before you can just push A I content out
there unless it's pretty much just gathering information. So we
see it on our end a lot where the A
I will get you really close to the end result
that you're looking for. But you still need to do
a little bit of manual input. It does a great
job with graphics design, things like that as well, but
(10:41):
it just still needs a human touch at the end
of it to get it ready for production.
I tend to agree with you, Sachin. I think we've
had other technological revolutions before and there's always been the
threat of job eliminations and there always have been some,
but it's, they've always created more jobs than they've eliminated.
They've just been different. And I think this time will
be no different.
So, back to Craig, he like Satin knew the problem.
(11:04):
Not enough help on the farm and the solution, it's autonomy.
If this was a math test, this would be the
part where Craig would have to show his work. I'll
let him walk you through the steps.
So I've written software, done hardware. I have started companies
in the past. I knew farmers, I knew what made
them tick. And I used to work a lot automating
(11:26):
manufacturing plants. If there's anyone that can do this, I
can do this.
In 2018, I started the company. I went out and
leased a 4220 AJ CB tractor and I went out
and bought an 18 year old 20 inch planter and
I got a CD L that's a commercial driver's license,
(11:48):
by the way, Craig got it so he could drive
the semi truck to haul his tractor to farms across America.
And I spent the winter writing software. I promise I'm tracking.
At least I know what a planter is when you
start telling me what kind of planter. I confess, I've
lost the plot but to anyone who's worked on a farm,
I'm assuming they know. Yeah, it's a standard 18 year
(12:09):
old 20 inch and we're planting soybeans farmers kind of
an uh,
a group of people. They, you know, they won't trust
anyone to plant corn. The only thing I know about
corn is it's supposed to be thigh high by the
fourth of July. Uh, yeah, that, that was, you know,
back in the thirties or so. But now, you know,
now it's typically shoulder high by the fourth of July
(12:32):
with corn off the table. Craig went after soybeans, he
set his sights on having a minimum viable product to
test in the spring of 2019.
He spoke to a few people about testing the tractor
out on their fields.
Agriculture has two degrees of separation. So I swear to God,
I can get to any farmer in the US through
(12:53):
two people. If you're keeping score, that's four degrees less
than Kevin Bacon would need to get to someone. Yeah,
I've met him, by the way.
Word of Craig's wild autonomous planter spread quickly
after about two weeks of word on the street that
some crazy guy is gonna stop by with a autonomous
(13:13):
tractor and planter and autonomously plant their crops. They were
lined up. Craig launched Sabanto on May 3rd 2019. He
didn't choose that date because it was some momentous occasion.
It was once again all up to the farmers.
It was the farmer that told me early May we're
(13:35):
going to be planting so you better have everything together.
Craig didn't, but he launched anyway,
I slept in the uh sleeper of that Peter bilt
and there were some cold nights because I didn't have
a heater in it, but it was a learning experience.
The software was nowhere close to being product. I it
was more of a proof of concept. Can this thing run?
(13:58):
Craig drove the semi and the tractor planting beans across
the Midwest.
It was a very rainy spring. So on days he
got rained out of planting. He was flying out to
California to meet with V CS. Raising money from V
CS isn't always easy, but Craig had a good track
record to back him up.
Everyone saw 640 labs. Kind of an interesting little company
(14:18):
that got swallowed up quickly by Monsanto and I was
a co founder of that company. And I think that
gave me a lot of credibility when getting in front
of V CS. Lo and behold, I, I got a
term sheet and I closed on a funding round. Craig
had squeaked through that first season planting, but if he
wanted to make Sabanto succeed, he needed a team.
(14:42):
So I went back to Chicago and I convinced five
people to leave their perfectly paying job and join me
in this quest to take autonomy into agriculture. Did you
think after that first season, did you think, you know,
I've got something here like it might have been hard
work and it might have been, it might have been difficult,
but I've, I've got something or you weren't sure I
(15:04):
knew all the problems I ran into were solvable
and, you know, II I knew I couldn't do it myself.
I mean, it was all off the shelf components. It was,
you know, a big box sitting in the tractor wires
going all over. And the software there was, it was
literally command line software. There's still a hell of a
(15:27):
lot of development that needed to be done on it. Well,
someone who remembers the late seventies and early eighties, I
learned to run software on command line. But I think
uh I think today that doesn't meet the hurdle, does it?
Uh No.
So then you got some funding. How much did you raise?
$2 million? Ok. So you get some funding, I assume,
then you start working on truly products, this and making
(15:47):
it sort of fit for purpose and building it out properly.
Is that what came next?
Yeah, it wasn't necessarily products and it was more of
take it to the next level, get it to work reliably.
In early fall 2019, 1 of Craig's farmer friends reached
out and said that he had 350 acres of land
(16:09):
that needed to be seeded with a cover crop for
the winter planted after the fall harvest, cover crops, help
revitalize the soil and prep it for spring planting again.
I thought, well, this is perfect.
They were finally able to get started in mid November.
Craig experimented with smaller horsepower tractors with his software to
see if that helped reliability
(16:30):
horsepower equals work divided by time, what autonomy does is
it increases time and time is inversely proportional to horsepower.
So you increase time, you decrease horsepower.
They tested it out on smaller fields before they went
to the 350 acre plot.
We had an 80 acre field and 6 a.m. in
(16:52):
the morning. We're out there, let's get going on this.
We should be able to get this done by uh
23 o'clock. Right, We left the field at right around
2 a.m.
and we had only covered about 10 acres
this time, we actually practiced before we got there and
(17:12):
everything's working fine and we get to the field and
nothing is working. The planter won't plant and the engineers
are working feverishly trying to fix it and between the
path planning, controlling the stamp thing, making sure it goes straight,
making sure gps is working. It was really bad. And
(17:32):
the six of us
went back that night and I know everyone was absolutely frustrated.
I remember going to bed at around two o'clock and
waking up at four o'clock and thinking to myself, what
the hell did I get myself into? We hear that
phrase a lot
nature as we know runs on its own schedule. Mid
(17:55):
November rolled around and it was time to plant 350
acres of cover crop, whether Craig and his team were
ready to or not. They took their tractors out to
rural Illinois to the farm and set up their mobile
lab in the tent by the side of the field.
You know, 300 is a very large number when you're
10 ft wide and, you know, going five mile an hour.
(18:16):
So we're doing five acres an hour. And if you think, oh,
we'll just run it 24 hours and, you know, it
will be done in three days.
The guys were laughing, they still laugh about just sitting
in this little tent in the, in the late afternoon,
about four or five o'clock, it just started snowing and
then by,
(18:37):
oh, I'd say midnight one o'clock, uh the wind kicked
up and it started blizzard if you can imagine just
the blowing wind. And then the six of us sitting
in this little tent tractor out there still working. Mind you.
And there's someone sitting out on the tractor and we
would take shifts on who had to sit out on
(18:57):
the tractor. We had snow mobile suits and insulated coveralls
and whatnot. But someone had to be the poor bastard
who had to go out and sit on the tractor
for the next hour or two because we didn't have
absolute control of the tractor. There was some functionality missing.
If it goes over a little hill, we would lose
communications with it. And then the person would have to
(19:18):
do it manually park the tractor over here and then
let's see if we can get a path plan made.
And for one reason or another, we were off by
2 ft to the left. It was, it was pure hell.
And this wasn't just one day. This was over multiple days.
I was concerned that some of the guys would not
(19:40):
come back the next, next time because this is perhaps
the craziest thing they've ever done. Oh, and by the way,
all six of them were staying in the farmer's basement.
During all of this, two of us got a bed
and then the other four of us were sleeping on
the floor. The other thing to add insult to injury,
(20:02):
the shower, the hot water didn't work on the shower.
You know, we didn't want to let the farmer know
because he's out doing field work and I don't want
to bother him. So we didn't say anything about it.
But then we were taking cold showers and living in
a basement and then trying to, uh trying to get
this damn thing to work in the end, the 350
acre field they thought would take three days. It took
(20:24):
three weeks.
We felt defeated. There was a lot of fear, uncertainty
and doubt.
I'm sure everyone in the company had reservations about. Is
this going to work? Is this going to get better?
Like why am I doing this? Did you think about
giving up at the time? No, no,
(20:45):
I don't quit.
When did it come along far enough that you thought? Ok,
I've cracked this nut in 2021. We were doing tillage
just west of Chicago. We ran at 48 hours nonstop.
We let this thing loose in a, oh God, I
think it was 480 acre field and this thing ran
(21:06):
day in day out, never stopped. And
at the time I looked at this and I'm like,
I started to see light at the end of the tunnel,
we had path planning working. We were monitoring all aspects
of the tractor. We were holding the line within a
good one inch, two inches and it was just a
matter of keeping fuel in it. Craig had finally figured
(21:29):
it out. And since 2021 Sabanto has continued to grow,
their autonomous product is called steward and it supports 19
different tractor models. As of today,
we have 40 employees right now, split between Iowa and
Chicago and we have a good 30 to 40 customers
right now. Farming operations all scattered throughout the US. We
(21:51):
have quite a lot in Florida and Georgia starting to
do a lot in Texas right now. From California to
New York, Texas, to Wisconsin.
Oh, wow. So really, truly nationwide. Do you retrofit someone's tractor?
Did you send someone out to install this on the
tractor they already have or do you just send them
a kit and they do it themselves? How does this
actually work?
So, we have dealers throughout the US and normally they
(22:16):
do the installation and we obviously help with the installation.
So we get to a farming operation and we do
a demo at this point in time, we actually haul
a tractor onto their premises and let them use it
for two weeks. And once they get hooked,
(22:37):
whatever tractor that they have, what we do is we
install the autonomy system on that tractor and then they
can remotely control and monitor that tractor perform field operations.
I did a little bit of research before this interview
and I learned all about
the technology investments that the big guys are making. The
deers of the world are making in terms of autonomous tractors.
(22:59):
You know, these big combines that can do all the
stuff that can laser the weeds and whatever. But I
also learned all about the right to repair battles that
are going on between farmers and manufacturers. So I'm curious,
does your solution play into that at all? You know,
the ability to sort of keep your tractor and repair
it and do what you want and then have some
of these autonomous features just layered on at a, at
a lower cost.
(23:20):
I'm all for the right to repair. I'll, I'll be
honest with you. If someone could fix something remotely without
me getting involved, I'm all for that. And we give
them the tools in order to do that. But it
is an interesting alternative. You know, you can go to
one of the big manufacturers and buy this giant very
expensive smart tractor or smart seater or smart whatever or
(23:41):
you can take the equipment that you already have and
give you a call and make it smart. Your next
generation tractors are sitting in your machine shed.
I just love that idea so much. The next generation
tractor is the one you already own. I think a
lot of people stumble onto great ideas that seem so
totally out of the blue, but make perfect sense. Once
you look at combining some tools that no one's considered
(24:04):
as a result, Craig's business has grown considerably and as
part of that growth, he's moving into a new segment
of our bank
for our listeners, I lead small business here at Chase
and Brian Lamb, my friend and partner is the northeast segment.
Head for the middle market. We work closely together to
take care of those businesses who are growing to the
next level. And so I wanted to bring Brian in
(24:26):
to give people a sense for what that means. So Brian,
it's great to have you on the show. Thanks for
being
here,
Ben. It's good to see you. Good to be here.
And uh thanks for having me. It's exciting to see
companies progress in their growth trajectory and there's some common
themes and patterns I I maybe can touch on first
you hear the term middle market. What does that mean?
(24:48):
Generally it means first that you have reached a certain
size and complexity size could be driven by revenue. Maybe
you've got, you know, go from 10 million to 20 million.
That's one example. Also, complexity, complexity could be defined as,
you know, the geographies that you cover. Maybe it used
to be a city and a county and now it's
(25:10):
states or maybe even countries. The other part of the
complexity is your capital structure. Maybe historically had a small
line of credit or a credit card or you were
able to actually build that business with friends and family capital.
But now you're moving to different types of capital and
different types of financial needs. If I think about the
transition and
(25:30):
maybe one of the one or two of the things
I see companies that do it well. And by the way,
I got to pause and applaud what Craig and Sabanto
to have, have done, they've done a fantastic job of
scaling and growing. What I see is a challenge though,
I would tell you is when companies don't anticipate some
of those needs that may happen when they get much bigger,
(25:51):
I'll give you a couple of examples. One, their working
capital needs change dramatically, right? When, when you own a
small business, there's the phrase, hey, making Payroll where it's
not always a figure of speech, you know, but managing
your working capital and the cash collection cycle can become
very complex as you get much bigger. And we see
a lot of companies struggle there. The second thing believe
(26:14):
it or not is talent, right? You know, Ben, you
and I always talk about the talent that you may
have started with when you were a small company may
need to look different. The folks that are really helping
you run and scale the business
talent becomes a really big consideration. And then partners
who are the partners, who are the advisors, your accountant,
your lawyer, your bank, the in the institutions that ultimately
(26:38):
help you make sound decisions for growth. You have to
think about those as well as you scale and grow.
Yeah. The other thing I I often talk about is
a combination of complexity and scale, particularly with respect to your,
your staff. I always say there are two big inflection
points when you are growing a staff, when you have
up to 50 people or so, you can really know
(27:00):
all of them and you know which ones are good
and which ones are less good and which ones have,
which quirks and there's an inflection. Once you go beyond
50 you can't know all of them. It's tough up
to about 200. You can still know who all of
them are. You don't know them. You probably only know
that about 50 but you know who the 200 are.
And then once you hit 200 you see people and
(27:22):
you don't know if they work for you or not.
And that's a really different mindset around your business because
you really are relying on your leaders to know those
employees and to cascade your message. And so I always
tell people that you, that you need to think about
those two inflection points 5200. Like when do I stop
knowing everyone personally? And when do I stop knowing who
everyone is?
I
love it be because
(27:44):
I think those are really interesting goalposts to think about.
And it goes back to something you and I always
talk about, which is culture when you built the company,
when you started it and you began to grow, there
was a culture, there were values, there were principles that
you as the leader as the founder believed in. Well,
you don't want to lose those as you grow and
(28:06):
so you can make all of these other really smart
business decisions. But to your point
as you start having hundreds of employees, one of the
things that you most importantly want to focus on and
protect is the very culture that helped you be successful
from the beginning when you grow, slow down
and just realize what got you to that point, you
(28:28):
may have to do some things differently to continue to
scale and grow.
Have you ever seen in these growing companies? A founder
and CEO actually bring in and hire a CEO and
say I'm going to do the things that I like
doing and I'm good at, but I'm going to have
a professional run. The actual uh do you see
that?
I, I, Ben, I would tell you, I see it
more often than not. Actually, when a company has reached
a certain inflection point, they've grown, maybe they have international
(28:53):
services and products now, maybe they've expanded into different product
lines which requires different expertise to your point. They are
a much bigger people business. Now, they've got 1000 employees
instead of 100.
I have seen investors and founders bring in a new
CEO that is a better fit, I guess I would
(29:15):
say is the word. It doesn't mean that that founder
CEO investor doesn't add tremendous value
and they still own and they still
own the business. And
in almost every scenario, they still own the business.
But they have found someone that's a good fit for
where that company is in the life cycle of their growth.
And I got to tell you when I've seen that happen,
(29:37):
I've seen that company thrive and grow.
One of the things that I often hear clients talk
about as they transition up to the middle market is
I need to build infrastructure. I'm running this thing on
a shoestring. I'm running this thing informally. I've got to
build infrastructure to scale this thing. What does that actually mean? Yeah.
No, it's important infrastructure
could mean things like
(29:58):
investing in technology to improve automation, right? Maybe before manual
processes because of the size and scale of your business
really made sense financially, you know, strategy wise. But as
you get much bigger and you become more complex,
having digital capabilities for your teams and your clients will matter,
(30:21):
automating processes to streamline how you do business and remain
if you will efficient, become important. Another example of infrastructure
might be cybersecurity, just protecting the value and the assets
that you've created. I see this all the time at
JP Morgan Chase. And
one of the things I try to get folks to
(30:41):
think about is even though cyber and fraud, those may
be things that you're aware of. Are you doing enough
in your infrastructure to harden the assets and maybe one
other infrastructure point I would raise as you think about
your scale and your growth
is the quality of your financial statements
and your ability to produce timely reliable reporting, both operational
(31:08):
reporting and financial reporting. It will help you make better
decisions that will better inform your partners and advisor that
you work with on a regular basis. And principally I
call it helping you look around the corner, right? You
may see things in those operational and financial reports
that help inform what your next best decision might be.
(31:30):
I tell you what it's exciting to see those leaders
that can make that sustainable transition, right? And there are
a couple of key I guess elements I see or
dimensions I see in those types of leaders. One they
just
always are resisting complacency. The idea that you have reached
a certain plateau and that you can cruise or that
(31:52):
you think you've done enough that your competitive advantage will stand.
The test of time. Second is diversification.
So the products and services or the geography or the
client base that you built over the years, I would
encourage folks to be restless about continuing to diversify their business. Right.
Maybe there's new products and services. Maybe you, you've historically
(32:15):
grown through acquisition and you're going to do a better
job through organic. Look at your share of wallet, right?
Even though you've got a great client base, could you
deepen that share of wallet? Could you take a bigger
percentage of their spin and
they do business with you? Your margins? There's always an
opportunity to look at margin improvement even as you grow.
(32:37):
Can you grow profitably in a very efficient way? And
maybe the last thing I see leaders do is kind
of a deep focus on productivity,
right? They've gotten to a really big size and scale,
they've continued to grow. And now what could they do
for every incremental dollar they invest? How productive is that individual?
(32:57):
Is that investment? And is it driving the returns that
a business owner would expect? And so
when I think about those leaders that kind of bend
the curve, those are some of the key elements I
see them demonstrate,
it seems like what reads through all that though is
continued hunger.
It's really special to see the small businesses thrive and
grow and move into the middle market and beyond. And
(33:21):
so that is at the end of the day, one
of the most important elements of this country is a
chance for us to do business and see companies grow.
And finally, Sachin, I want to bring you back in.
Here is Craig's story unusual and that he's been successful
in an area that the big companies have been going
after or do you see that frequently? Craig's story definitely
(33:42):
isn't unique. I'd say in terms of entrepreneurs creating more
efficient ways to do things in an older industry such
as agriculture. There's definitely a lot of entrepreneurship and young
companies that are making waves in the industry where generally
you see big players for the most part.
Uh Craig touched on something that I think is important,
which is in a world that is increasingly tech driven
(34:04):
where you, you know, you're in a part of the
country that doesn't necessarily have the depth of tech talent
that a Chicago or a Silicon Valley or New York
City has. How does the region and how do the
entrepreneurs in the region face into that? What does that
feel like on the ground? He's definitely right about that,
the talent locally, especially with universities and things like that.
Even though Iowa State and Iowa are great, they have
great tech programs, great for your science programs.
(34:26):
I think family history and the culture of the state
really breeds a lot of people that are still lean
in the agricultural side of things. But when it comes
to the tech side of things, we realize that there
may not be such a big talent pool here in
the Midwest or in Des Moines or in Iowa specifically.
So people will pull from Chicago or bigger markets where
there are more intense tech pools and kind of marry
(34:48):
those two different industries on how to communicate the tech
side of things with what your project on the ground
is going to be. What do you think are, are
the advantages to owning and starting a business in a
place like Iowa?
I can speak to Des Moines specifically. The entrepreneurial community
here is really vibrant, it's really thriving and there's so
many cool local resources that you can tie into to
(35:11):
get either well networked or find funding and being from
a smaller town and a smaller demographic in a, in
a geographical area, you definitely get to know each other
a little bit better. So the ability to connect with
people that you're trying to get in contact with. It's
a shorter connection. Generally, it's also even a personal connection
where you can find someone that
know someone personally that you can get in contact with.
(35:33):
So it's becoming a little bit more of a cultural
hub for smaller agricultural companies and smaller start ups. I
hope that continues that that trend would be, would be
really cool to see flourish over here.
Thanks so much for listening to this episode of the unshakeable.
And thank you to Craig Rupp Sachin Sehgal and Brian
(35:53):
Lamb for speaking with us today. If you like this episode,
please rate and review it. And if you know someone
who may like the series, please tell them about it.
Next episode, we'll hear from an entrepreneur who started a
company with the full backing of her previous employer. Not
just emotional support either they guaranteed her clients and contracts.
If she started her own company,
we'll be speaking with Quanetta McNeal CEO of House of
(36:16):
Logistics out of Birmingham, Alabama.
I'm Ben Walter and this is The Unshakeables from Chase
For Business and Ruby Studio from iHeartMedia.
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