Rob Stott: All right, we are back on the Connected Design podcast. And I feel like every time we get together, we should just have the cameras rolling all the time between you and I, Mr. Jeff Cole. It is a good time when we get together. If you’re watching the video version of this podcast, you are in a game room right now. Is this home, office? What is this behind you?
Jeff Cole: I agree.
Jeff Cole: So it’s a game room in the Hudson House. We’ve got nine locations, multiple showrooms, and a couple more coming, which will be announced here toward the end of the year. But yeah, we do game rooms for people, whether it’s golf simulators, custom pinball machines, or another vendor that wants to sell us really cool technology-laced dartboards. And of course, we do the lighting and TVs, monitors and video walls that go along with it. Why not have fun? Your house should be your house. Your house should be a fun place.
Rob Stott: Absolutely. That’s what this industry is all about, right? It’s fun. So I love it. Formal introduction: Mr. Jeff Cole, founder and CFO of Architechne, out there in Minneapolis. I know Minnesota is where you’re based out of, and we’re going to get into it because you guys have very quickly, and I know you’ve got an aggressive plan there for continued expansion.
Jeff Cole: We do have an aggressive plan. There’s no doubt.
Rob Stott: Yeah, but I love it and look forward to diving into it. I mentioned we just did this. We were in Denver together and had a really cool session. I had a lot of fun. I hope you did too. And I know we’re recording, so if you say the right answer, I’ll slip that twenty to you after we’re done here.
But it was a lot of fun in the session at CEDIA, part of their education slate of conferences, getting to talk about, like I said during the session, it felt like an in-person podcast. Just being able to chit chat with you and Sean Hansen of Logic, and understand your origin stories and how you got into this business, I had fun. I want to give you the chance to recap what you thought of it.
Jeff Cole: Yeah, no, I thought it was a blast. I look forward to doing more stuff like that in the future. It is just like with anything: the louder the voice from the right channels, the better that environment becomes. I think you do, if not the best, one of the best podcasts that are out there within our industry. I think you do a great job. Not that I can get my twenty bucks. Now I have got to get a couple. But I think because you’re good, you’re a blessing for the industry. There are a lot of reasons for that. I won’t get too far into that because it’s supposed to be about other things, but yeah, what we did at CEDIA was great. Hopefully there’s more of that stuff to come.
I would join any of those panels in the future because there’s just so much range in quality, ethics, sustainability and profitability. You’ve probably seen it all from your perspective as well. I have from the different roles that I’ve had in my time within the industry all the way back to the beginning. We need more people that know what they’re doing. I think you know what you’re doing in your industry, and I think Architechne knows what they’re doing in our industry.
Rob Stott: Well, thank you. I also concur with at least your half of it. I’m still figuring it out, I feel like, as I go, but I appreciate the kind words. It came up during that session: the origin stories are always fun for me to uncover. It’s fascinating because there are a lot of similarities from integrator to integrator, but there really are some unique perspectives or unique background experiences. You can have two businesses that act or look alike, but how they came to be is so different. There’s a lot to be learned from all that, which is why I really enjoy being able to have those conversations and have someone like yourself.
I’m going to give you the chance. I know I said it’s one of my favorite questions to ask on the podcast, and I did it there in person, but I want to give you the chance to formalize it and capture it in the form of this podcast. Tell us about your early start, your background, your first experience with technology and understanding that this could be a career path.
Jeff Cole: That’s a really good question. Hopefully it matches the answer that was at CEDIA. For me, I’ve always loved technology. There’s definitely a separation between first career, second and third career in the world of technology, and when I just loved it in general. I think I was fourteen years old and I watched *Top Gun* on a Sony Dolby Digital receiver at my brother’s house. He just wanted to show off his system, and he was ready to be done with it in five minutes. I ended up watching the entire movie. I’m like, this is the coolest thing.
Keep in mind, this is the most basic 5.1. There are Cerwin-Vega speakers. It is the most basic thing out there. And I’m like, man, this is incredible. From that point on, I worked multiple jobs, saved my money and bought my own receiver, which was a Yamaha DSP-A1. I spent a couple thousand dollars on it. I was 16 years old by the time I got it. Because I didn’t have enough money and I wanted to have the best, at least what I thought was the best, I had to wait over a year to buy my first pair of speakers.
So I just sat every night reading the manual, turning it on, switching DSP modes, doing all this ridiculous stuff. No sound, by the way. Even my parents were like, why don’t you just go to a garage sale and get a cheaper pair of speakers to hook up in the meantime? Great idea, but like everything I do in my life, I want to do it right. I want to do it at the highest level that I possibly can. So of course I had to buy a pair of MartinLogan Aerius, and I had to wait and wait and wait.
I went and bought them from Ultimate Electronics. I remember when I first went in, and this was also wild, which I left out at CEDIA. I walk in, I’m 16 years old, I just got done playing basketball, I’m sweaty, I have cash in my pocket. I’m there with my buddies, and we look like a bunch of hooligans. Nobody wants to talk to us. Ultimate Electronics is busy. They’re handing out waters and stuff. I’m like, hey, can I have a water? And they’re like, are you working with somebody? Because it looked like I just came up from the street playing basketball. I’m like, hey, just so you’re aware, I’m here to buy something.
Rob Stott: I am a customer. Wow.
Jeff Cole: Finally, they don’t even give me a sales guy. They give me this guy named Cameron. I’ll never forget him too. He had a heavy lisp, quirky dude, and he was like an administrator. He’s there to book counsel and do things. He’s like, well, they gave me to you. I’m thinking about getting into sales. And I’m like, what is happening? I didn’t care. I was so excited about getting my first pair of speakers. He got the sale, and of course everybody was coming over trying to figure out what happened. I bought stuff from him for the next four or five years.
Rob Stott: You should just give all the credit to Cameron.
Jeff Cole: That was amazing. That started the hobby into the world of technology. Then of course, like everybody, in some way, shape or form, since they have had 130,000-plus employees every year for the last 30 years, I did work at Best Buy doing all kinds of different roles at all kinds of different locations, off and on for a total of 15 years.
Then I left the industry for a bit, and I kept getting recruited to come back because Magnolia was born. Best Buy acquired Magnolia from the West Coast and started rolling it out. This is past the Magnolia Home Theater phase, and they went into the design centers, real projects, real systems. I’m like, no, I already saw Magnolia Home Theater. That came and went. Magnolia Home Theater basically birthed Sonos. I don’t know if you remember that whole thing. Sonos wasn’t doing great until Magnolia Home Theater. I’m like, I don’t think I want to do that.
Of course, they kept pulling me in, and finally they’re like, just come in, let us give you an investor walk. I show up, everybody’s there, I’m high-fiving, we’re having a good time. I get this investor walk of where technology is. We’re talking Control4, Savant, Lutron. My mind was blown. I’m like, no, I have to come back.
Rob Stott: It had changed a little bit.
Jeff Cole: So I went back. I was with Magnolia for several years, ran some stores, helped open some stores, met a bunch of amazing people, of course amazing clients, a bunch of designers and managers and regional people. Then I was director of sales for Kaleidescape for a bit. This is where I got to meet another 160 integrators across the U.S. At that moment, because of how people did business, I got to see the manufacturer side. I also got to see some of these custom integrators that you’d think were high profile. I’m like, this is gross. I want to get out of this.
So I left the industry completely and I was in nonprofit for several years. Then I had a services company that does HVAC, plumbing, electrical and drains. They had a bunch of clients calling because they wanted them to do technology. Of course, they started trying to do Ring doorbells and stuff like that and trying to make it profitable, and they couldn’t because there’s no profit. It’s DIY product. You don’t need somebody to do any of that stuff. Unfortunately, professionals still do. Hopefully that comes up later.
So I went there and helped them build a division, which grew into a phenomenal half-million-dollar showroom brand, a phenomenal install team and a trained sales team. We did a million dollars our first open year, which was pretty cool for a short, quick little stint. Then they had a PE firm come in and want to buy the rest of their company. So either we spin this thing off and let everybody go and I stay with them, or I acquire it. That’s where Architechne was born. We acquired everything: all inventory, all assets, all the stuff. We had to rebrand everything. Then we put up two showrooms. That’s where it started.
But then you start to, I’m doing install, I’m doing sales, I’m doing ordering and inventory, I’m doing marketing, I’m doing everything. You saw my first logo. It was horrible.
Rob Stott: We’ll leave that out of here. That was a CEDIA special. You had to be there to see it. Maybe next year.
Jeff Cole: Oh my gosh. Here’s the sad thing: when you’re in the middle of doing something and you’re working so hard at something, you don’t have the third-eye-view perspective to really look. You’re stuck in the bubble. I thought this thing was so incredible. Of course, the first person I showed it to, they’re like, this is really horrible, Jeff. I’m like, what are you talking about? You don’t see the vision. You don’t get it. So I bring this to like 10 people, and everybody’s laughing in my face because they’re comfortable and they know I can handle it. I’m like, okay, this is really bad.
That’s where I hired a marketing firm, and they’ve been fantastic. Venzio still is with us today. Matter of fact, they’re with us shooting at CEDIA because we’re rolling out our second series of the Artisan Series, season two. That should be coming out here shortly. That’s where it was born.
But then as I started to look at the landscape, we’re in 2026, back then it was 2022, and there are a lot of big players out there. We knew the space that we wanted to play in because of the time that we’ve been in the industry. So how do we fast-forward to compete with the people doing projects that are $100,000, $500,000, $800,000-plus? Because you can’t if you’re small time. Nobody’s going to trust you with a half-million dollars because you work out of your garage. That’s not happening. That’s where I went to work and built a custom model for us to scale quickly, not negatively impact the client, and not negatively impact the employees and staff on this growth trajectory.
As you’re probably aware, when companies grow too fast, you always hear the stories. Things fall apart, people quit, clients have disappointments. It’s chaos everywhere.
Rob Stott: What’s awesome about your story is that you mentioned 2022. So you’re an infant. Depending on when you potty train, you might still be in diapers in terms of how old the business is, which is crazy to see. You mentioned wanting to be careful with quick growth. You guys have done it not only well, but right. That’s the important distinction. You’ve approached it in a way that a lot can be learned.
Whether a company or an integrator wants to go the route that you guys have, there’s still a lot to learn from an efficiency standpoint in what you guys are doing. I’m trying to find a way to ask without getting too much into the secret sauce. From a location perspective, when you think about your first two locations, what were the priorities as you were getting up and running that you wanted to make sure you had on point, that you wanted to make sure ran smoothly and set the stage for what Architechne would become?
Jeff Cole: Unfortunately, when you get your first two locations and there are so many things to do in a day, when you’re in the beginning stages, people are so passionate they’ll work 18 hours. That’s not unique to me. That’s anybody that has an entrepreneurial spirit and has energy. The problem in the very beginning was that there was like 40 hours of work every day. We never wanted to let a client down. That was the number one priority. That was the only thing that was a priority.
It was just John and I, and we had a couple of great installers as well. We didn’t want to let a client down, so whatever it took, sometimes we took it on the chin financially. Sometimes we took it on the chin timing-wise. Our quality of life was not awesome, but it felt awesome. It wasn’t like the quality of life was horrible because you’re out there doing a job where you’re thinking, man, I wish I was doing something else. You’re doing exactly what you want to do. There just wasn’t enough time.
When there were two locations, we were growing and I’m trying to work on operating models and marketing, and who do we want to bring in? Because it has to be inner-circle people that I would trust, because there is a lot of autonomy. I’ll get as far as I can into some of our operating model. Knowing what I know, it is a one-of-one. There’s nobody else that runs it like this. That is, as you call it, the special side. This isn’t like a McDonald’s Big Mac where you can replicate that thing at home. This model, at this point in time, for most businesses, especially the ones that have been around for a while, would be very hard for them to replicate because of how their company is built. So I’m not too concerned about that.
It ended up being a situation where, and I’ll give a shout out to Shane. When John and I were kind of done building these two locations and things were churning a little bit, we went to CEDIA and I ran into a friend and previous colleague named Shane Orendorff. I’m sure you may know who he is. He’s been around for a while and he’s done great work. At that moment in time, he didn’t have a job. I’m like, what? We’re brand new. We don’t have a ton of capital just laying around. How do I get this guy a job? Because I’d love to work with him again.
That’s when I saw my operating model really unfold. We build locations strategically around people or a small group of people. Shane Orendorff is an amazing individual. We want Shane to be a part of this industry and a part of our company until the day it doesn’t exist. So how do I create a model to reward somebody like him and give him the autonomy to basically run his location underneath our umbrella? It’s not a franchise. Everybody asks that all the time. It’s not a franchise. He is an operator of Rochester, Minnesota. And of course, he helps out in all other aspects of our business because he’s incredible.
Now he runs that location, he can grow that location, and the more he grows it, the more he’s rewarded. It’s basically an input-output methodology. It’s not like he has a stellar year out of that location, and I get a bigger bonus and I get to go buy more stuff for myself. He gets it. It’s shared that way. If you want the best people, you have to be willing to share in the concept.
That location opened up. Then we met up with Ryan Tallman right around the same time, which happened to be in Sarasota, Florida. He went through a very stressful time in his life right before we built a location around him and Dave Farnham. Then that was built. These people are not just expertise in the industry. It’s the passion and the willingness to build something together, and what we’re all willing to do to ensure the client experience is best in class.
All of a sudden, we went from two to four, and the operating model was written. Our attorneys built a bunch of stuff. Here’s the funniest story, and I’ll always repeat the story. Our main attorney is like, why would you do this? I’m like, what do you mean? Why are you so willing to give these people this plan so they have access to equity, they have access to what we call our tier system? The better they do and the bigger they get, they move up this tier system to reward themselves even more. I said, well, because they deserve it. They’re the ones at the ground level.
We pay our installers more than anybody else. We pay our operators and our technologists more than anybody else. If you’re at the ground level of working hand in hand with the client, you’re the one doing the real work. You deserve more money. A person sitting in an office who occasionally goes out to check a job site, or a person sitting in an office who’s using CAD to draw some plans that almost auto-draw themselves at this point, and by the way, in two years they will and those jobs will all be gone, there’s no value there for us. The value is in a person that’s willing to put in the work to produce the best possible product for the client, and also make sure they’re aware enough and have the capability to protect our business. That doesn’t mean it always goes that way.
Rob Stott: A question I can hear integrators asking in my head is, all right, so you’re paying them more, but how are you making up for that? Is it that you have fewer of those other, I don’t want to call them nonessential, but effectively they will be, moving forward as you point out. Is it having fewer of those roles? Are you pricing projects at a higher cost? In what ways are you able to afford a higher rate to be able to pay your people more?
Jeff Cole: That’s the perfect question. I’ll tell you right off the bat. Any custom integrator right now that does projects appropriately, they know on a $100,000 project, $25,000 to $30,000 is typically labor. In our industry, 25 to 30 percent of a ticket is labor, which compared to other trades is like the opposite. That means 70 percent is product. Product is priced the way the product is priced. That’s off the table.
Right now, the hourly rate we charge is below most location and demographic standards. If you go out to Denver or Florida or New York, the hourly rate is somewhere between $175 and $220 an hour per person. We’re way below that. Why? Because I don’t have this PM sitting there at this location to go babysit installers who are already doing the job the right way. We have an internal system that allows people to know what they’re doing every single day, recap what they’re doing every single day, and everybody that’s a stakeholder is updated automatically. I don’t need a person to go out there and look at something that I can already see. They’re making 100 grand, or whatever they’re making, and then the client has to pay for that.
We also have an internal system called a bounty. So yes, if you do have a $500,000 sale or something that’s really complex, you can check off project management. We have, within our organization right now of 26 people, three people that have been in that role before. Guess what? We get to pull that resource from that location and use it on that. Just like if you want to do a Crestron system, we pull our best Crestron programmer and deploy them on that job site. They’re not just sitting around absorbing resources where the company financially is going to be in crisis, or the client has to pay for something they’re not even using.
We set up a system that allows these resources, which now, we have nine locations, and by the end of 2028 it should be closer to 30. We can get to that in a second. It is the right move because clients need us. They’ve put up the bat signal in all kinds of cities across the U.S. We need to make sure that we’re there for them.
Rob Stott: There’s that aggressiveness I was talking about. I imagine the bat signal looking like that original logo.
Jeff Cole: No, it’s just an Architechne A. It’s not the original logo, but that’s good. We need to make sure that we’re fiscally responsible for the client’s funds, and of course that we make sure we pay the people what they deserve to make. I think I covered mostly everything that you’re asking on the cost perspective. We operate so differently that the typical costs that go into operating a business like ours are substantially reduced.
Rob Stott: The cool thing hearing you describe it is that so much of that answer, but really how you’ve built this company, is effectively the people. Having trust in their skill set, that they’re the right people, that they fit the C word: culture. I know we talked about it in Denver, how important that is to ensuring you can trust them to go out on that site and know they’re going to do the job right.
I want to give you a chance to talk about that too, because it’s the underlying thing in all of this, right? The culture of the company. It can be difficult when you’re trying to grow a company and you’re talking about all those locations, ensuring that the culture maintains and that it is what you want it to be as you expand. It can very easily get out of whack. You don’t want to think about locations going rogue, but if you don’t have a good culture, I guess that’s what can happen. What are you guys doing to ensure the culture is set and stays the way you want it to be?
Jeff Cole: Two-part deal, but let’s talk about the cultural piece. You’ve seen experts tell businesses, hey, you need to have a workout facility in your office. You need to put up sleep pods. For a while, it was, you need to put out candy. Then of course candy is bad for you, so no, you need to put out fresh fruit and granola bars. You think about all these things, and what all of it has in common is it’s robotic things that you’re doing because somebody else told you to do it. That’s not your culture anymore. It’s somebody else’s.
I’m not saying it never works, because there are people who say, I loved working here. Here’s what they had. But that’s people who have been programmed and inundated by the same type of stuff over and over again.
We are responsible, and every individual is responsible, for the culture that’s been created within Architechne. I’ll share this for our culture. Probably one of the biggest rules up front is we believe in mutual accountability and conversations. When I bring up diversity, yeah, we have a diverse culture, but it’s diversity of thought. I want diversity of thought within our culture so that when you think of somebody who has to design something at a high scale, like Tony Stark, and yet the person that walks the job sites, the Incredible Hulk when he’s green, we can still figure out a way that the client experience is not negatively impacted. Also, all the players and stakeholders involved can still get the job done, which is kind of what happens right now, and I’ll expand on that in a second because it goes back to your first question.
In the world of culture, we have things put in place and pillars put in place so there are checkpoints for different things for the culture. On top of that, it’s run by the people who are running their locations. In the world of mutual accountability and conversations, if I say something to you, because everybody can act like themselves, that’s the number one thing. You get to be yourself. You don’t have to come here and play 90 percent because you don’t want to say this because this person may think whatever. No. You can act like yourself 100 percent of the time.
If you happen to say something that somebody doesn’t like, because we’re all different individuals, you’re going to say something. Not everybody has thick skin, and that’s okay. There’s nothing wrong with that. If you say something that offends somebody else, the mutual accountability piece is that it’s their job to let them know offline: hey, all your jokes are usually hilarious. You said this one thing, I really don’t like that. Are you cool with just not talking about that in the future? Super simple thing. That’s what organically builds a culture.
In our world, people don’t have to be half themselves. They don’t have to do anything like that. You can be 100 percent yourself all the time, as long as you’re not being 100 percent disrespectful. We have a value system, of course, too. You can’t run around like an idiot and say ridiculous things because, oh, it’s freedom of speech. It’s nothing like that. But there is some ridiculous stuff that does get said that’s hilarious, and people have fun.
I’ll sum up the culture piece. If you know a culture is really good, the easy indicator to me is when I’m working with someone, they’re fun. How does that prove it? Because they’re fun with you in the process. Why? Because they know the job that you’re hiring them for is so in the bag. They don’t have to sit there and act like a robot to do all the different things and pull all the levers. They know that we can easily deliver a half-million-dollar project. Even when a mistake happens, they know our process to fix the mistake.
It’s very similar to you. That’s why you’re not giving yourself enough credit. You’re having a good time all the time. You’re laughing about stuff, making jokes, hanging out and singing karaoke, whatever you’re doing. You’re having a good time because you’re so good at this. It’s natural to you. The people within Architechne, it’s so natural. They get to have a good time and be personable and be real. A lot of the jobs we get are because people are personable and real.
I had a client who’s a phenomenal client. She’s an amazing person. She’s like, one of the reasons why I’m with you guys is because I got the best hug from Stephanie. I’m like, wait, what about me? Who was I in this equation? We make jokes and stuff like that, but people become comfortable with Architechne because everybody is just so real. We get feedback sometimes where one of our operators shares things that most other people wouldn’t, details internally that shouldn’t go to the client. But the client’s like, I’ve never had anybody be this transparent with anything. Can I hire you? Everybody gets job offers all the time. That’s the culture piece. That’s kind of the expectation.
Rob Stott: You definitely answered it, and I have one follow-up. I know a lot of it, and this is a challenge that we hear about all the time in this channel right now, and if you’ve had any conversations with CEDIA, you know they’re working on it or at least trying to. It’s the talent pipeline and hiring and finding the people in this channel to fill these roles. It’s difficult to hire.
When you’re hiring for culture, it’s another layer that becomes even more difficult. Are you guys doing anything, whether it’s during the hiring process, to weed out based on culture?
Jeff Cole: Yes. Before I answer that, I want to make sure, because I feel like I missed something. You brought up going rogue with nine locations. There are moments where things go rogue, because things are organic here. I have to allow somebody who’s running a location to be themselves and try things.
I’ve shared this. We allow what we call the fudge factor. It’s money that’s going to get spent that’s never going to come back. We had a location that’s like, no, we need to do radio ads. We need to do billboards. We need to sign up for these magazines. It’s like, we’ve spent a quarter-million dollars in the first couple years of marketing. We know it doesn’t work already. But we want that person to experience it. So we buy six months of print. Guess what? No leads. Magic.
We allow people to experience the operator mindset to its fullest because they’re not spending the money, Architechne is. Architechne is spending the money for their location. So yes, there are things that happen sometimes that are not 100 percent congruent with the brand, but it’s okay. It doesn’t damage our brand. If you look at our website score and our brand across even CEDIA, when we get vendors and other integrators coming to our brand, it is very strong. It’s because we don’t control every little facet. I don’t want to control everything and every little lever. I want to trust the people within the organization, and I trust them to make mistakes too. They’re human beings. They’re going to make mistakes.
I know that even if they make a mistake, the client’s not going to suffer because they’re going to do everything they possibly can, whether that’s a weekend, two extra days on a job site, or they’re going to be there until 10 p.m. I know they’ll do it. I trust that they’ll do it. So that’s that. I didn’t want to miss that.
Rob Stott: I appreciate you recalling that and getting to it, because it segues well into the individual, hiring for culture and weeding out. Talk about that a little bit.
Jeff Cole: First of all, to become an operator, and you’re going to see some announcements in January of next year on the next wave of operators, it’s very hard. It’s not just the people that I happen to like. I had a conversation with a gentleman who I love. I think he’s amazing. He runs his own integration firm right now, and I would love to acquire that firm and have him join the Architechne team. I think he’s incredible. But because of how our culture is set up, it’s not a dictatorship.
Could I really do this and bring in whoever I want? Of course. But then the whole infrastructure of how we have things set up would crumble. The truth is that I trust people to make hiring decisions with me. The operator role is the most important role within our organization. Not that it’s more important than a lead installer or anything like that. That’s not what I’m saying. They have more responsibility.
If another operator comes in that I want to bring in, they have to go through an interview process that is very high level, including a final interview that’s an hour to two hours with every other operator. They’re getting grilled and hit with questions, and I’m sitting there like, oh my gosh, I don’t know if I want to work here anymore. These people are brutal. You go through that process and every single operator has to be a thumbs up, or you don’t get hired. That’s it. Our infrastructure, our interview process, weeds out average people.
Imagine how many applications would come through if the NBA, NFL or MLB said, hey, we have open applications. A billion applications would come through. Then the first day, they say, here’s what’s required to be a professional athlete, and all of a sudden that billion would turn into 50,000 overnight.
That’s kind of how we have it set up. You come to Architechne, your responsibilities are bigger, the payouts are bigger, but how good you need to be is best of the best. You need to operate as a CEO of your location and be able to wear multiple hats, ensure clients are a priority, and make sure, because everybody wants to complain like, look at this CEO payout over there. Well, they don’t know that person’s been working 100 hours a week for the last 10 years and they don’t have a personal life. They don’t know these things. They only see the top of the iceberg. So we filter a lot of people out because we only want the best. The roles require the best.
The same goes for installers and salespeople. When you come to Architechne, you are going into the professional league of our craft. The level of projects we’re doing with the complexity, and think of all the latest and greatest things: full-blown AV distribution, video walls, crazy lighting, Ketra, HomeWorks, all the stuff that we do at the highest level on a regular basis. You need to be real damn good. Our interview process is pretty tight.
Keep in mind what’s required. Even up front in our culture, we talk about some of the things that are happening internally. Anybody that wants to be average and sit at a desk all day, nothing against you, but they don’t want to come here. They’re like, damn, that sounds like a lot of work. Yeah, it is. If somebody makes $500,000 a year, you’re in doctor, high-end lawyer status. How much time do they have to put in to even get to the table? We rationalize it that way.
What we’re going to roll out next year, I believe we’ll have a ton of applications. A ton. But as people realize what it is and what the expectations and deliverables are, I think a lot of those applications will see themselves out the door. We get people that apply all the time. We get people who want to work here all the time. We have to be very careful because, one, we don’t want a toxic individual. I don’t want a person who has been doing the same routine every day installing Sonos and lick-and-stick garbage. That doesn’t mean that if you have the right attitude, the right capacity and the right mindset, we don’t have training programs that can get you wherever you need to go. I’m not disparaging those types of things.
But as I shared with you before, in four-plus years we’ve installed four Sonos systems. Why? It’s a DIY product. I’ll say it over and over again: nothing against Sonos, nothing against what it is. But if I can go buy it at Target, why do you need a custom integrator to deploy it?
Rob Stott: Fair. Thank you for running through that. It shows again the attention to detail that I think people would pick up on in any conversation with you. One I wonder if they picked up on at the top of this conversation was the fact that when I introduced you, I said owner and CFO, not CEO. I think that is a really telling distinction for how you approach everything within it.
Founder, right? You could title yourself what you want. Chief arcade officer back there. Maybe I’ll switch to that. But that, to me, speaks to how you approach everything else. People, when they name themselves, I don’t know how many are going to be willing to go out there and say CFO, chief financial officer of the organization. Talk about that decision to do that.
Jeff Cole: That was very intentional. You’re the first person to ever say anything about that. That’s a really good question.
As we grow at the speed we’re growing, things cost a lot of money. Mistakes cost a lot of money. I’ve shared with you we had an electrician who stole $90,000. Things have to be approved, and when you have nine locations and they’re doing millions of dollars, you have to ensure that each location is doing things appropriately. Final payments of things, approvals of big expansions, whether it’s an existing location or new locations, all have to come through the CFO.
Am I more of a visionary? I am. Do I have to work twice as hard to do CFO duties? I do. It’s not my favorite, but it’s what’s required right now for the company to do what I promised it would do to all the people who work internally and the clients who are external. It requires me to do a role that you wouldn’t typically see me in. I’m not going to sign up for something and do it half-ass. I’m going to sign up for something and learn things real quick and apply all my abilities to ensure it’s done an appropriate way. My business partners and things all expect me to perform at that level. So I do.
It’s the most important role right now. Fast-forward another year from now, there’ll probably be a controller or somebody in that role that takes a lot of those things off my plate. There are already a lot of things that have been handed over to other people we’ve hired. But next year is going to be a special year, and what I’ll be required to do, we’ll just say it’s going to be in business development. I’m sure my title will change then. We can do another episode.
Rob Stott: I like that little cliffhanger. Something to keep an eye on. I want to ask too, I know we’ve spent a lot of time on this episode talking about your people, your interview process and the culture you’ve set up. There have been a lot of fascinating things that we learned about one another, mainly in Coronado, but one of the most fascinating points about Architechne that I remember you sharing, and I’m hoping you can dive into a little bit here, is the fact that you interview people, but you also interview your clients.
I thought that was really unique. I’d never heard that before. It’s a unique approach. Usually when you think about an integrator going out for a job, it’s, all right, I have to do everything I can to put my best foot forward with the client and put a proposal out there that they’re going to like and try to impress them. You kind of flip the script on them. Talk about that a little bit.
Jeff Cole: This is again something that I’ve never seen done in our space. But if you look at every other space where people are spending this amount of money, it is done. Whether you walk into Porsche, Ferrari, Rolex, pick whatever poison you want, you’re being interviewed as soon as you walk through the doors.
Rob Stott: Go back to you at Ultimate Electronics.
Jeff Cole: Ultimate Electronics. I was getting interviewed. They were a premium electronics store. Now, that was what I would call profiling. Whereas if you’ve got genuine interest, or these other things, keep in mind, if you get a limited-edition Porsche or a limited-edition Rolex, people want those things not to really buy them because they love them. They want to flip them to make money.
In our space, there’s risk involved because a lot of people that we’re doing these size of projects for have a lot of money. You’ve already heard many times where they use their money, their influence and their understanding of law to do things that are not great. You’ve heard about it on custom home builds, big AV deployments, custom landscape builds, where all of a sudden the client’s not paying for half of it and they’re suing. We don’t want any of that.
You have to keep in mind too, our overhead is low, not just because of our operating model, but because we own everything. We’re debt-free. We have bills to pay every month. There are a lot of them, but they’re not because we owe money to banks and things like that. So we have to interview clients. Again, this isn’t a stringent process. We just get to know them.
What we call the life of the client process, on the front side of it, we’re not shooting out bids left and right, which most other integrators do. Hey, I need all these things. Here’s what I’m looking to do. I need a bid ASAP. They put together this bid, they mail it out. We don’t do that. It’s like, well, we might be the wrong company if this is what you’re looking for. What do you mean? Well, let’s have a conversation.
We have a discovery call on the front end of the life of the client process, and the discovery call is just to get to know the person. That’s it. They get to know us. We give them an opportunity to ask a ton of questions about the company to make sure we’re the right company for them. We ask a ton of questions to them to make sure they’re the right client for us. After that, then we get into phase two of the discovery call where we need floor plans, and we walk through room by room what they envision their technology to look like, or not look like if they don’t want to be able to see it. We give them ranges on the very next call.
We’re on a third call or sit-down with them at a showroom or in person before we even present numbers. We don’t want to drag out this process. We want to make sure this is the right fit, not just for them, but for us. This is an important decision. Even if it’s somebody who’s only spending $20,000, $20,000 is a lot of money, man. We want to make sure we can take their money and do the best we can with it. We want to be stewards of their money, what they expect and their expectations.
We follow this process to a T because we know the process works. Not only are the clients always happier at the end of it, the ticket typically grows because they don’t know what they don’t know. Most importantly, fewer mistakes happen. Once we do that interview process and get to the point of the life of the client process, it’s always a range. We’ll do ranges for each category. So if you’re doing a massive project, you’re building a 12,000-square-foot monster, and you want technology everywhere and you want to go crazy, that’s okay. We’ll break up AV and automation and lighting and shades, your dedicated theater, whatever it is that’s going into this thing, so that you can see it all. Versus just getting this line on your home build that the builder gives to them that says half a million dollars. Have fun.
By the way, when we see stuff like that with our competition, sometimes we inspect jobs that have happened and we get to see the bid afterwards. You can see used stuff, old models, all kinds of stuff that I just can’t stand. We’ve got, you’ve heard me say this before, 22,000 integrators in the U.S. Twenty thousand are not great. Clients don’t know. They just don’t know.
Rob Stott: It gets back to the whole point of this, right? You saw sloppy, ugly work out there and a way of doing it better that not only has been better at the outset, but as you continue to grow as well. I know there’s a whole lot we can unpack with the life of the client as well.
Jeff Cole: We need to get those back. We should just do a monthly follow-up and I can show you pictures of the stuff we find, and we could blur out companies and stuff.
Rob Stott: We might be going down that path, man. I love it. You talked about it a little bit in there, but was this something that you implemented after, or right from the outset of starting Architechne?
Jeff Cole: It’s from the beginning, and I’ve been in sales for a long time. The art of conversation, the art of listening, being able to take people’s problems and translate them into something cool, I’ve been doing it for a long time. I wouldn’t say I’ve been a salesperson. I just like to share cool stuff with people, and I want to do it with respect to their budget. A lot of that, our sales process, gets translated down.
That was developed within six months, the full system. It’s actually being updated because times change and we want to make sure that we can cater to our clients. We do a yearly summit. Our yearly summit this year is out in the New York/New Jersey area, and for the whole company, we fly everybody in. There’ll be an update to the life of the client there, so that’ll be fun to see. But it’s little tweaks. It’s nothing that’s a big change because we know what works and we know what our clients expect. We’ve gotten feedback from our clients as well.
We get feedback from our clients because of our follow-up process when somebody didn’t follow the life of the client. We’re all human. Then of course we have a conversation with that individual. Hey, why didn’t you do that? Well, it didn’t make sense here. Here’s why. Okay, well here’s what the client said afterwards. Okay, I guess I was wrong. People are okay with taking feedback because they know they’re not a number here. They’re not just an employee. It’s not even a career here. It’s something more.
I know the first thing that comes to everybody’s head is, it’s a cult. Nobody’s drinking Kool-Aid here, and you’re not going to end up on the nine o’clock news. It’s nothing like that. But it is something more, and it is special. To everybody who’s not a part of Architechne at this point, if they become a part of Architechne, they’ll see. It’s something very amazing.
Rob Stott: It’s funny because that cult word gets thrown around, and it’s part of culture. It’s in there. It’s the first couple letters. You can’t have culture without at least a little bit of a cult personality in what goes on. Don’t cut yourself short on what culture is. I think you guys have done it in a way where, seeing you walking around as a crew in Denver at CEDIA Expo, enjoying your time, people clearly are bought into what’s going on.
Again, in just a couple short years, to watch what you guys have done has been awesome to follow. I personally continue to look forward to continuing to follow it.
Jeff Cole: That’s awesome. I’ll share this. A lot of companies run off fear. I did a presentation, and I don’t know if you can find it. It’s probably on video somewhere. It was fear versus belief, and what comes with each one of those cultures. A lot of our competitors run things by fear: do this or else. Or they’re very tight because they think having that tight of control yields a better outcome, when there’s plenty of data, and of course my opinion, that that’s not the case.
Our belief culture that we have, not only do I think belief is way more powerful than fear, it just takes more work to create it. Our culture is infused with belief. It’s infused with, what can tomorrow look like if I do the right things today? What can our projects look like if we follow the life of the client process? More importantly, what can my personal life look like if I put in the time and energy doing everything I possibly can over the next five years? Everybody in our ecosystem knows the answer to that. Belief does require a little bit of faith because nothing is 100 percent. Things can happen tomorrow that completely unravel what our seven-year roadmap looks like. I don’t think so, but it could.
I would say the belief culture that we’ve built is extremely powerful, and it’s so powerful that our clients are part of that journey too. We did our YouTube series, and I know when I was on the phone with one of our clients, they’re like, yeah, I booked a consultation, somebody else came and they’re amazing. I was just hoping it was going to be you because you seem like such a character on your YouTube series. This whole thing that we’re creating for people to engage with, we’re starting to see the fruits of that labor. Sometimes you never even know the fruits, right? You don’t even know how it impacted this person over here through five different connections, whatever it may be, but we get a lot of feedback from clients and, obviously, our neighbors in the industry. Things have been good.
Rob Stott: It’s been awesome. Like I said, it’s a story we’re going to continue to follow. Whether you like it or not, we’re going to be there along the way.
Jeff Cole: I do. I like it.
Rob Stott: Good. That twenty’s definitely on the way. Jeff, this was a ton of fun. I know you mentioned it. We’re certainly going to have you be a presence on here, more than just this episode. We look forward to having you back and chatting through more of what makes Architechne so special and how you guys are doing what you’re doing. It’s been awesome and I look forward to it for sure.
Jeff Cole: I appreciate the invite, and as always, this is incredible. Hopefully at some point in time I can get on a call with you and what’s his name from Liaison? Steve, that’s right. Steve. He’s a good dude.
Rob Stott: Yeah, Steve. We’ll do it. You guys would have a lot to share there for sure. This was great. We appreciate it.
Jeff Cole: Thank you so much.
