STP 136 | How Small Businesses Can Thrive Against Big Business Competition
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[00:00:04] Sri Kaza: is. Go double down on the things that your customers love about you. go take advantage of the things that are unique to your customers and maybe not to the rest of the world. So, you know, any practice that's local somewhere, right? Get more, get better understanding what's going on locally and make sure that, you've got ties to stuff that's local, because that's a big driver for your existing customer base.
[00:00:29] And. That creates a big moat. Then for someone like Better health who will never really invest in that, who'll never really understand that, how do you stay kinda local and plant deeper roots?
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[00:00:46] James Marland, MBA: Hello and welcome back to the Scaling Therapy Practice. This is your host, James Marland. This is the show where we empower mission-driven leaders to launch life-changing online courses. Today I'm here with my guest, [00:01:00] Sri Kaza. He is the author of a book Unconvention, a Small Business Strategy Guide.
[00:01:08] What really drew my attention to this is, I work with most. Most small businesses, small, and there was some topics about scaling and the underdog mindset that just really caught my attention. I really wanted to pick the brain of the author here. So Sri Ri Kaza, welcome to the show.
[00:01:25] Sri Kaza: Thanks for having me on, James. Appreciate it.
[00:01:29] James Marland, MBA: So catch us up to speed. Books don't just happen. They don't just float out of the sky. There's a lot of work and a little bit of history that comes from them. So can you tell me, what's your history and what led you to write the book? Unconvention.
[00:01:44] Sri Kaza: So I hate describing myself as an author because this is the first time I've ever gotten a book written. I'm a businessman. I'm a consultant. For years I worked for the consulting firm, McKinsey. I was a partner there for a long time. And then in the past 10 years though, I've been leading businesses [00:02:00] that work with small businesses.
[00:02:02] Most recently, a FinTech lender that was lending money to small businesses. And you're right, the book didn't just come out of nowhere. It came out of, a lot of work that I've been doing with small businesses who were looking to grow, looking to expand. And, I just learned so much about how they play by the same rules as the big businesses that I consulted to as a McKinsey partner.
[00:02:23] But they don't have the same advantages that the big guys do. They're subscale, they don't have the resources, they don't have the time. But somehow, a number of them survived beyond those odds. And I tried to do a good amount of like analytical and detailed research to understand what is it, what numbers pop out and stand out to, like, how these guys win when the odds are stacked against them.
[00:02:49] And in the research and all the work that I did, actually what I learned is, it's con counterintuitive. It's a few what I call underdog principles about how they're, they stay. Unique to [00:03:00] their market. I call it positioning. They're very close to their customers with their proximity, and they fulfill more than just a profit purpose.
[00:03:09] They, they have their own they don't, they fulfill something better than the profit mission. I'm sorry. They have their own purpose, whatever that purpose may be. Those three principles, positioning, proximity, and purpose are really what. Kept a ton of these small businesses from going under during COVID.
[00:03:27] And I used the book to kind of tell a lot of their stories.
[00:03:31] James Marland, MBA: So what I'm hearing you say, and we talked a little bit about this in the pre-show, is on paper, some of these businesses should have failed during COVID, but there was something that. Kept them alive, that might not have shown up on the balance sheet. It might not have shown up in the numbers.
[00:03:48] Is that
[00:03:48] Sri Kaza: Yeah, that's right. Yeah. You can imagine I'm an analytics guy, so I got these beautiful charts that should look like lines, and you've got all these outlier dots that like, Hey, how, why did these guys [00:04:00] survive?
[00:04:01] James Marland, MBA: Was that the as you were doing the research, is that how the book came apart? Came. Came to fruition as you were looking at just the opening up, the curiosity of like, how did this happen and why did it happen? And then how do you help other people learn from them?
[00:04:18] Sri Kaza: Yeah, that's right. I think I learned a ton of business frameworks and I put 'em in, put 'em into play using working with McKinsey or using it in my own businesses to kind of scale and grow. I thought they were very helpful and they make make a ton of sense. So in working with small businesses, I use those frameworks and to understand what they're trying to do.
[00:04:38] And what I learned in all this research was that those frameworks aren't enough, or at least they didn't explain the performance until I actually had to go talk to and visit some of these small businesses to understand what they did and why they survived. One of the things that really stood out to me was.
[00:04:55] How much customers rallied behind the businesses that did [00:05:00] survive. You probably went through this, I'm sure every one of your listeners went through this. There's a restaurant somewhere where you always used to sit down and eat. And during COVID, during whatever lockdown, you decided you're gonna get takeout, even though takeout from that restaurant never made sense.
[00:05:14] You did it and you did it way more often than you would've sat down and eaten there. And that's because. You knew they were in trouble. You wanted to show them your support, and you increased your attention to them. You increased your spend with them because you wanted them in your life. It's a very simple analogy for why customers go ahead.
[00:05:34] James Marland, MBA: Well, yeah, no, that's great. I'm wondering, is there a specific case study from the book that was that illustrates this or somebody
[00:05:43] Sri Kaza: Oh yeah there's a handful of case studies in the book that talk about these different I'm using one example that I thought everybody would relate to, but yeah, there's a number some of the case studies that I highlight. At the very beginning of the book our, one of my favorite topics are independent bookstores, which are small businesses that
[00:05:57] James Marland, MBA: Yeah.
[00:05:58] Sri Kaza: under threat [00:06:00] by everybody every three years.
[00:06:03] There's another threat to the small independent booksellers. And in the end, somehow they're still around and they're impactful and they mean something to their community. So one of the.
[00:06:15] James Marland, MBA: Well, yeah. Yeah. What as you were talking about the independent booksellers light bulb came up in my mind because in the therapy world, the therapy space, there's a lot of consolidation of services and like some technology that's being applied to the delivery of services, I don't know. I don't know all the players, but better help comes to mind. 'cause I see their ads all the time, get a therapist and it's easy and it's cheap and we're nationwide or whatever. And I'm just like, wow. That's like the big corporation stepping into the, it's like Amazon coming into the boutique bookstore.
[00:06:53] Sri Kaza: Yeah, this is a great analogy.
[00:06:54] James Marland, MBA: talking about are very.
[00:06:57] Sri Kaza: Yeah.
[00:06:58] James Marland, MBA: The independent therapist [00:07:00] or the group practice.
[00:07:01] Sri Kaza: Yep. The three examples three case studies I bring out in, in, in the book on bookstores, I think they would translate, although it's gonna take some imagination from the owners and operators of the of the therapy practices. But one of the big things that stood out was that these bookstores brought something to their communities.
[00:07:23] That their customers recognize we're unique and different. So when I talk about positioning some cases, it's not a complicated or difficult positioning because it's a location, it's central. It's a place for people to collect and gather, right? That's one. You can actually, say, Hey, we've got it.
[00:07:40] We didn't have to think too hard about it. It's there. In other cases it's gotta be a little bit more unique. It's gotta be differentiated. From, for example the big box, you know, down the street, which has also got the same location. And so one of, one of the examples, one of my favorites is, is, um, a bookstore called Bookseller in, in, uh, Chicago.
[00:07:59] [00:08:00] It's a there in Lincoln Square. And the owner. Combined, two of her favorite things that she loved. Books and wine and created a, a bookstore that had an, you know, had a, um, bar inside that served wine. Also focused on an inventory and a collection of books that lined up with the folks who lived in the neighborhood.
[00:08:19] And she thought more about that before she, you know, before she went out there with just, Hey, here's a handful of books. She spent almost a year putting her inventory together.
[00:08:28] James Marland, MBA: She really thought about it and curated it for the people who would be attracted to both, her her offers. I'm just thinking how would a therapy and wine office work?
[00:08:42] Sri Kaza: So it
[00:08:42] James Marland, MBA: Maybe, well, maybe Okay. And
[00:08:45] Sri Kaza: well,
[00:08:45] James Marland, MBA: people, probably not. Very good. It might be the most popular place on the street.
[00:08:50] Sri Kaza: Yeah, well, it comes down to what I thought was the most powerful part of her story, because it wasn't, some of the other ones were more easy to understand oh, I care about the community and [00:09:00] I'm giving back to a particular cause. So you get people who support that cause to rally around it.
[00:09:05] But in this case, someone who had a personal passion and just it made sense to her. And thinking about that and then thinking about from a therapy perspective, there are certain things that therapists who've been around for a very long time who have experience or just really care about their patients.
[00:09:21] They have strong feelings about, they, they believe certain things should be done in certain ways. And if they're very particular about this, they may actually not be able to get some customers. Some patients may actually prefer something else. I think the big thing to think about for leaders of these practices is can I focus on some very specific things that I think matter more than others, and can I come to terms with the fact that it may not appeal to everybody?
[00:09:54] Because when you recognize that you can double down on the things that you think are good. While [00:10:00] foregoing or forsaking some of the things that may get you those incremental ex extra customers, you will then be better than, better help because they've gotta su they've gotta be good for everybody, right?
[00:10:16] So when you think hard about the things that they offer or what you offer, there's a couple of things you probably copy and that's okay. But go back to what's core to you and what's amazing about it, 'cause I've seen it now in so many different businesses, is what matters most to you may or may not matter most to everybody, but as long as there's enough customers who believe in that, they'll find you because you've prioritized what they care about the most.
[00:10:43] It's a little bit harder, right? 'cause you now have to your mark is gonna be a little bit different. You're gonna be targeted a little bit. It turns out like really connecting with that personal passion allows you to create that positioning. That's what I call it in the book. And the principles is your positioning is about being unique and embracing that [00:11:00] uniqueness.
[00:11:01] James Marland, MBA: You're reminding me of the book was Mike Markowitz, the Pumpkin Plan. I don't know if you've ever read that,
[00:11:07] Sri Kaza: No, I haven't.
[00:11:08] James Marland, MBA: It's, he's a small business guy. He wrote Profit First and Fix This Next, and I don't know, a bunch of other books. He's got a new one coming out. I normally read his books after a little bit, but just the.
[00:11:21] If you're growing a champion seed pumpkin, one, if all the vines have pumpkins on them, the big one won't grow. You'll get a bunch of little pumpkins and if you notice which one's growth and it's got the best potential to grow, you do special things to nurture it. But you also, what you were talking about is finding your unique position.
[00:11:43] It's your, you're not spreading out your energy for 10 different messages or 10 different people you are you're putting all your energy into that one pumpkin that is growing the best and has the best potential for growth. And that's all part of like your unique [00:12:00] position. And I think therapists it's a little scary to niche down a little bit because they're like, yeah.
[00:12:07] You, so you, how does somebody address those feelings of, well, if I say no, if I niche down to this, I have to say no to these people, but
[00:12:17] Sri Kaza: Yeah. Tell me about it. Look, I choose not to use the word niche. It actually is like in the business textbooks, it's what defines a lot of the strategy that I propose in my book. And I
[00:12:29] James Marland, MBA: do you use?
[00:12:30] Sri Kaza: niche is too negative. I just say positioning and differentiation. But, but let me give you a little out for the folks who are worried about this. it's not so much that you have to say no to anybody, it's that you want to make sure that the ones who value what you're focusing on feel like you're the only one out there that can do this,
[00:12:51] right? So I come back to this resiliency that I saw post COVID, people who kept their other, the businesses they cared about [00:13:00] alive did so because.
[00:13:02] They felt a connection to the business, but even more importantly, that was the business they wanted to stay in their life because that was the one. So can you be the one
[00:13:13] For your customers? And it doesn't have to be every one of your customers, they be the one for, but wherever it is that whatever it is that you feel strongly about, that you become the one for that you can coexist then with Competi co competition.
[00:13:27] Because you are just the one place to go for the set of customers that care about it. So niche isn't particularly the way I would describe that, although you're right from a business strategy and kind of, anything you would read in a book, that's probably how they would describe this, is I'm gonna pick a specific customer segment and they're gonna come to me and only me.
[00:13:51] What I'm proposing is. Go double down on the things that your customers love about you. Go take advantage of the things that are [00:14:00] unique to your customers and maybe not to the rest of the world. So, you know, any practice that's local somewhere, right? Get more, get better understanding what's going on locally and make sure that, you've got ties to stuff that's local, because that's a big driver for your existing customer base.
[00:14:17] And. That creates a big moat. Then for someone like Better health who will never really invest in that, who'll never really understand that, how do you stay kinda local and plant deeper roots?
[00:14:29] James Marland, MBA: Yeah. Does that that, that's great. I wanna get to the does that spill into proximity? You have three things, position, proximity, and purpose. How would
[00:14:41] Sri Kaza: it does.
[00:14:41] James Marland, MBA: talking a lot about positioning what's proximity.
[00:14:45] Sri Kaza: So proximity is, I use it as knowing what your customers care about, knowing about your customer's experiences and using them in your management decisions quickly. Right? The reason, it's an advantage for the [00:15:00] underdog when it's not an advantage for like a big corporations have to go and do surveys and then they have to go.
[00:15:05] Up a chain of decision makers and the CEO. Yes, maybe he's met a few customers here and there, but he doesn't have the sense of what's needed. But small businesses much have much closer proximity. Do they make decisions on it? Do they go and cater to those customers? Now, I think in the case of therapy practice, you know, your existing customers really well.
[00:15:27] You know, you know how they think and what their concerns are, but building a business around that. Means making decisions that cater to what they need and what they want. And again, you may actually be ruling out some future customers, but the positioning is in this case what you may or may not do is you may or may not sit down as a group.
[00:15:48] If it's a, if it's a group practice or, or as an individual sit down and say, wait, how did these people find me? What was their journey to get to me? How do I think about the next people taking that same journey? What's a [00:16:00] better place for me to be present for my marketing and customer acquisition?
[00:16:04] Right? How do they, do, am I just relying on word of mouth, but then I look at my customers and they're finding me through some other means, or whatever those might be. You have a much better, read on where your customers were and how they came to you. That, if you focus in those places that you were successful and you put your energies there you'll be able to grow faster or find the customers who are looking for your type of service more easily.
[00:16:30] So proximity makes a difference because a lot of times, like me, when I get to solving a problem, like if you gimme a Rubik's cube and locked me in a closet, I probably wouldn't, might not come out until, either I gave up or got to three, three sides done. But. If you're doing your job and you love your job, like I would imagine many of your practitioners do, you're focusing on solving your customers or your patients' problems.
[00:16:55] You you're having your conversations with your patients, but are you taking a step back and asking what have you [00:17:00] learned about their journeys? What have you learned about their needs and how could you be a better business for them or people like them? That's a great feedback loop that you, maybe you just have to carve out time to make sure you're doing once, once a week, once a month to think about building your, your business for scale.
[00:17:18] James Marland, MBA: Yeah it kind of, it reminds me a little bit about a book I read called Effortless. It's a really small book by Danny eni. There's a couple books called Effortless, but this one's by Danny and he talked about what, what would make the what's the obvious offer, what would make it 10 times more?
[00:17:36] Attractive to them. And you have to know who they are. Like you have to just what you said, you gotta know what they care about. If you know what they care about, you can communicate you can communicate your intentions and also that you, you're the solution a lot easier. And it's, just like the book said it's when people know you care and that you can solve the problem the path to purchase is [00:18:00] effortless.
[00:18:00] Sri Kaza: Yeah. Oh, that's exactly right. If you, and that comes outta the purpose piece as well, right?
[00:18:05] James Marland, MBA: Oh yeah. Let's talk
[00:18:06] Sri Kaza: You care. Yeah. That purpose piece is pretty clear. Look, you, you, you, your purpose can be the same as better health, right? If you wanted it to be, which when they say we wanna bring, care access to more people, make it more accessible, make it more commonplace that's great.
[00:18:23] Like, that's a great purpose. And nobody has to argue with you that, oh, it's not different from anybody else's, but what's valuable is the people who. See you and watch you behave if you behave in line with that purpose. It fulfills the other pieces of, yes, we do care, right? And it helps you weather tough choices.
[00:18:44] For example, should we be marketing here because we get one an outs or two an outs with this channel where people don't really stick with us. We're making our money back. We're making a couple extra bucks. We're keeping ourselves busy but we're not delivering on our purpose. Those are places that [00:19:00] will be much easier to say no to when you come back and align with your purpose.
[00:19:04] Right? If your purpose is longer lasting relationships and, and long-term health, right? Yes, there are things that will get you some some dollars, but it's a lot easier to forsake that and then focus more on the customers where you're gonna have impact. Okay.
[00:19:21] James Marland, MBA: Yeah, I can imagine when during the, especially during the pandemic the companies that, that people had a negative feeling like our purpose doesn't align with them or their purpose is just to get money. There was no loyalty
[00:19:35] Sri Kaza: Yeah, you'll never see, you'll never see people rally to go save some corporation. Right. You just don't see it. But we saw people doing GoFundMe for their bookstores. We saw people pre-purchasing, salon service cards to keep their hair salon or nail salon open, and then the takeout story, there's so many stories about people like this service.
[00:19:56] Piece of my life needs to be here when everything comes back to normal. And if I [00:20:00] have to do something different today to make it happen, I will because it's important to me.
[00:20:05] James Marland, MBA: Yeah those three underdog principles sound really applicable, especially when considering just the nature of the small business landscape. now you said I wanna switch a little bit with our remaining time. You're not a full-time author. You also offer some consulting and coaching services, I believe.
[00:20:25] So what what do you do when you're not writing books?
[00:20:27] Sri Kaza: Okay, well, yeah. So I was a consultant off when I kind of engage with businesses, either I may take another full-time role as an executive to go lead a company to scale, or if I'm in consulting, it's usually around growth scaling and operational efficiency and kind of getting to market with some product.
[00:20:44] That's kind of typically what I spend my time on. These days though, I'm, I am focused on, getting the book out, getting the word out on the undr, putting some highlights on small business stories that that really reflect those principles. Well,
[00:20:56] James Marland, MBA: Okay so I scaling then. [00:21:00] So I think we, we said in the pre-show, we were gonna talk a little bit about like the high level view of scaling. What what is, what are some of the principles of scaling you think that could apply to small business?
[00:21:12] Sri Kaza: This is great. You know, when I took my principles of scaling to some of the bigger business I worked on, I had one or two objective functions. Growth and profitability, right? That's usually all you have to worry about or solve for. And when you do that, it gives you a lot of clarity on what actions or activities you can go do or what things can hit those.
[00:21:30] It's all mathematical equations at that point saying, if I were to. Start offering this product, or if I were to simplify this task, et cetera, I would get more profit or get more scale. In the case of a small business, those principles still make sense. But what I've discovered, which is even more valuable, is instead of focusing on amplifying your profit number, it's an amplifying your purpose.
[00:21:54] And when it gets down to how do I scale? It really does come down to the number one resource [00:22:00] bottleneck and almost every one of the small businesses, it's the small business owner themselves. It's the operator who's business. And that's where you get some real challenges because scaling in somebody's mind might be, Hey, I want something that operates without my attention, or my attention's kind of consumed, so the only way I can grow is, is do something that doesn't require my my, my engagement.
[00:22:22] That's really dangerous. I think when you think about scaling especially when it's a owner operated business and it's a very personal mission oriented business it's an element of recognizing what your time is worth and it's optimizing your time. You know, I, when I, when I was at McKinsey, we did all kinds of big complicated throughput and operational improvement work.
[00:22:43] My favorite. Book, if we're sharing favorite books, was the Goal by Elihu Goldratt. And it's about the Theory of Constraints. It's a fun book, uh, but it introduces this complexity theory on how do you optimize a factory when you've got all these different [00:23:00] things going on. How do you find whatever, what you'll call the bottleneck in the factory and optimize it And, when I apply that to the small businesses nine times outta 10, it's the owner themselves. Sometimes it's other, other things like maybe it's their store size or maybe it's the number of chairs they have in their salon, or it, maybe it's the number of therapists in the practice. Those may be other bottlenecks.
[00:23:22] But when you get down to how do you solve for that bottleneck, I think that becomes a very important and personal set of questions as opposed to in my scaling work, it's always profit questions. Because now you go back and you say there's 20 activities that the owner or, or the operator is involved in, and we need to reduce them.
[00:23:39] We need to focus them. You don't just do the ones that are profitable and not profitable. You also go look at what's giving that individual fulfillment, both personally and for the mission of the business, what's having impact and connectivity with customers. So before you start cutting out things make sure you, you, you focus on the right things.
[00:23:59] And [00:24:00] when you, when you get in, I've got a, I've got a workbook that goes along with that underdog principles book that kinda helps think
[00:24:05] James Marland, MBA: Oh, so that elements is also in your book as well.
[00:24:08] Sri Kaza: Oh, absolutely. The what's written it's about all these specific business strategies that I learned as a big business consultant and then tying these underdog principles.
[00:24:19] How do you keep those principles and still play by the rules that big guys are playing? Right.
[00:24:24] James Marland, MBA: Yeah, the you you're talking the language of the small business owner, especially the small. Business therapist donor. 'cause a lot of, when they're thinking about like growing or expanding, like I'm doing all these things. One of the first questions is are you still getting your own mail?
[00:24:39] Are you still emptying the trash? Are you still cleaning the bathrooms yourself? Are you still buying the snacks for the office or whatever? Are you ordering the paper supplies? I mean, it's obvious and low hanging fruit, but they're still doing it.
[00:24:51] Sri Kaza: Yep. Yeah. No, but that's the first thing I learned about small businesses is they're the CEO, they're, the head of hr and they're the janitor.
[00:24:59] James Marland, MBA: [00:25:00] Yes.
[00:25:00] Sri Kaza: other role in between because there's nobody else they trust to do it, and. Some of this is, get some of these things off your plate. It's worth spending the money to get somebody to do this because you can create more value by putting what you're best
[00:25:14] in.
[00:25:17] James Marland, MBA: Yeah,
[00:25:18] that's a good line. You can create more value by doing what you put do your best in or something like that. Like you're there, there's low value activities and high value activities, and there's only some activities you can do as the owner. And yeah I think. It's another topic, but I do think owners undervalue their time and what it's worth significantly
[00:25:40] Sri Kaza: Yep.
[00:25:40] James Marland, MBA: and what they could be doing with it.
[00:25:42] Well, we're this has been a great conversation. Can you tell us about like where can people buy the book or what your webpage where can people look you up?
[00:25:49] Sri Kaza: so the books on sale or available for pre-order, on Amazon and on and on Barnes and Noble and my favorite, which I like to plug, is bookshop.org. So if [00:26:00] you do have a local bookstore that you patronize and you wanna support but you don't have time to go there go buy this book from bookshop.org and then tell 'em what bookstore you normally buy from and.
[00:26:11] The they give the credit to that local bookstore, so you get online. Also we'll be carried in, in, in local bookstores, but you know, I don't know which ones. Today you can come to my website if you're interested in the underdog principles as a primer, you can just download my website is three-casa.com, S-R-I-K-A-Z a.com.
[00:26:33] And yeah, you can contact me if you're interested in learning more.
[00:26:38] James Marland, MBA: Yeah the the link will be in the show notes for your webpage. Also, looks like you have a LinkedIn profile where people could probably chat with you. Sri this has been an amazing conversation. I really identify with the underdog principles and the principles of scaling and your time.
[00:26:55] Thanks so much for being on the show with us and sharing us your wisdom.[00:27:00]
[00:27:00] Sri Kaza: All right. Thanks.
[00:27:02] James Marland, MBA: All right, listeners, the message I'm hearing here is pretty clear. One is have a mission that's a little bit, connected to the community, like making money is fine, but that's not going to endear you to the community. So what do you care about that they care about? That you can that you can become a differentiator.
[00:27:24] And then the second thing is value your time. Like we are the bottleneck. I am the bottleneck. You are the bottleneck. Say it out loud. It. Listen and apply some of these principles and look up the under. I'm gonna get the name of the book, right? Un Unconvention, a Small Business Strategy Guide, and it's at local bookstores and all the big stores.
[00:27:46] All right, it's now time to go put your mission in motion.
[00:27:51]
