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Join Ron Callis, Owner & CEO of One Firefly and industry veteran, as he talks business development, technology trends, and more with leading personalities in the tech industry. Automation Unplugged (AU) is produced and broadcast live every week.
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An AV and integration-focused podcast broadcast live weekly
Join Ron Callis, Owner & CEO of One Firefly and industry veteran, as he talks business development, technology trends, and more with leading personalities in the tech industry. Automation Unplugged (AU) is produced and broadcast live every week.
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President & CEO of Smart Spaces - OKC Talks About Finding Success Through Selling Experiences, Not Specific Products

AU 266 feat. James Westbrook, President & CEO of Smart Spaces OKC. Join us for an exciting show that dives into how James has found business success through being process-driven and experience-focused, the return of analog audio, and more!

This week's episode of Automation Unplugged features James Westbrook, President & CEO, Smart Spaces OKC.

About James Westbrook:

James Westbrook began his career in the AV industry 32 years ago as a Regional Sales Manager for Apollo Presentation products, where he developed a passion for the industry. With a degree in Industrial Distribution from Texas A&M University, James shifted his focus from commercial a/v to the residential home automation arena in 2001, when he opened Home Theater Technologies, LLC. to serve the Dallas-Fort Worth market.

James and his team successfully shepherded the company through many market fluctuations, and in 2019 HTT was one of the original companies involved in the merger that resulted in Bravas. From there, James found exciting opportunities for integrators in the Oklahoma City market and purchased what is now Smart Spaces of Oklahoma City, a Bravas affiliate.

Interview Recap

  • How their success comes from being process-driven and selling an experience, not a particular product.
  • Their 2-channel throwback hi-fi shop, The Groove, and why analog is coming back.
  • Their work with Vital Management to identify what they should be working on and, more importantly, when to say no.

SEE ALSO: Show #263: Director of Control Rooms at Barco Discusses the Complex Command-and-Control Market

Transcript

Ron:

Hello, hello. Ron Callis here with another episode of Automation Unplugged. Today is Wednesday, May 22nd. It's a little bit after 12:30 p.m.. So it is our normal showtime, our normal show day. And I hope all of you are doing well, whether you're watching live or watching on replay.

Ron:

And here in our household, it's kind of nice. It's almost summer. My son has another week or two of school and then summer vacation will start. So not that that really impacts me directly, but at least he'll be able to sleep in. And for many of you, that means summer vacation schedules and kind of some of the activities of summer will begin.

Ron:

One of the things I'm most excited about personally is we're just coming off show season. So all of our spring shows that kicked off with Lightapalooza in February, which was just a spectacular event into all the various buying group activities. Wrapped that up last week. I was actually out at the ProSource Power Event here in South Florida, which was pretty convenient to have a South Florida show. So didn't have to get on an airplane.

Ron:

And we did an AI workshop. So we were training all of the members there on some of the best practices and methods on how to use some of these new fangled AI software and tools to help with business processes. So that was a lot of fun. But the good news is I don't have any travel now for another four or five weeks, which is pretty exciting.

Ron:

I know there was a time early in my career where I so looked forward to getting on an airplane and flying around the country. And now I look forward to it because I get to see my friends and my clients. But it also is hard, right? Traveling around the country, going to all those shows, that can be challenging. So I don't mind a little bit of a break. But you didn't come here to hear me talk about summer and upcoming summer vacations.

Ron:

You came to listen to my guest. So let me go ahead and introduce my guest for Show 266. This is James Westbrook, president and CEO of Smart Spaces out of Oklahoma City. And they are a Bravas affiliate. And so we're going to learn what a Bravas affiliate means.

Ron:

And I've known James for many years and he's doing really awesome things there in Oklahoma and he's actually running a couple of different businesses. And we're going to hear what he's doing and catch up. So let me go ahead and bring in James and let's get the party started. James, how are you, sir?

James:

I'm good, Ron. How about yourself?

Ron:

Man, if I were any better, I'd be two people.

James:

I say that often, but the world's not ready for two of me.

Ron:

Oh God, they're definitely not ready for two of me. I'm pretty confident my wife would go bananas.

James:

Yeah.

Ron:

Not in a good way. James, where exactly are you coming to us from right now? Looks like you're coming from a beautiful office.

James:

I am in the conference room of our Oklahoma City Experience Center, which is about a 5,000-square-foot space in a strip center where we have built a golf simulator and a theater.

James:

And I'm in our conference room right now that we use a lot for lighting demos. And that's where I am tucked into the corner of Oklahoma City.

Ron:

Very nice. Now, your facility is, your business is, Smart Spaces is a Bravas affiliate. And I know that I've had people ask me to clarify Bravas and Bravas affiliates. What exactly is a Bravas affiliate?

James:

Well, so Smart Spaces works under the Bravas umbrella as to be a Bravas location, you've got to hit a certain you got to be a certain size or it just doesn't make sense. So the affiliate program is designed to give Bravas an opportunity to look at some of these smaller companies, maybe develop and get some of these companies over the threshold that would make them a palatable or attractive acquisition for Bravas.

James:

So we have many of the benefits of being a Bravas company, shared resources, great buying power, phenomenal marketing, and support plan backing. So we truly do get all of the benefits of Bravas in my mind from a public standpoint.

Ron:

And I know that it would be hard to believe, but there is a chance someone is tuned in and watching and listening and they don't even know who or what Bravas is. So for those people that are uninformed and they've been living under a rock for the last 10 years and they don't know what Bravas is, do you mind kind of giving your explanation of the group in the company?

James:

Yeah, I've only told it about a hundred times, so I've got a great...

Ron:

But not on Automation Unplugged. This would be one of one.

James:

That's right. So Vital Management, operated by Paul Starkey and Steve First, has been around for many, many years. And Bravas is kind of the end result of an 8 to 10-year collaboration and sharing of stories amongst dozens of different business owners. And in 2019, 16 of us kind of rolled up, packaged ourselves together and were purchased by a private equity firm and became Bravas.

James:

So Bravas is now, gosh, I mean, it'll be five years this September.

Ron:

Wow. And that would make you guys one of probably the largest custom integrators in North America, correct?

James:

We are. As a matter of fact, yes.

Ron:

Okay. Awesome. James, I have so many questions about what you have going on there in Oklahoma. And you're also running a two-channel brand as well, right, called The Groove.

James:

Groove.

Ron:

So I want to get there, and I know a lot of people are going to be leaning forward when you're talking about those exciting things. But I'd love if you wouldn't mind sharing your background. Kind of where'd you come from?

James:

Gosh, where do I start? From a education standpoint, I went to Texas A&M University and have a degree that was mixed between marketing and engineering. I have always had somewhat of an entrepreneurial spirit.

James:

I guess one of the few companies I've actually worked for in my life. One of my first jobs out of college was Apollo Presentation Products out of Ronkonkoma, New York. And I was hired as a regional sales manager. We sold laser pointers, easels, overhead projectors. Actually, Apollo is responsible for designing and developing one of the first LCD projectors. They took an overhead projector and an LCD flat plate panel and put them all in a box.

James:

And so that's... I kind of traveled across the US selling educational presentation products. And from there, I entered the commercial AV arena and started a company called A Visual Image that had a great run in the commercial space, did a lot of work internationally and throughout the U.S. and eventually kind of migrated into residential with a company called Home Theater Technologies, which was based out of Dallas, Fort Worth. And after about, oh, 15 years of doing that, sold and became Bravas. So that's very condensed.

Ron:

That is condensed. So it was Home Theater Technologies. That would have been when I would have met you.

James:

I think I met you pre-Bravas, pre-Bravas acquisition. You did a lot of marketing work for us back then.

Ron:

We did.

James:

And the website and it was, it was a lot of fun. It was the first time we worked together.

Ron:

We did. What was it in your, what was the twinkle in you and your wife's eye regarding this concept of a roll-up? What was it that was appealing, this Bravas concept that you had been presented at some place? What about that seemed appealing versus running Home Theater Technologies, which you had been running for 15 years?

James:

You know, I say on a regular basis that the AV industry can be an industry of amateurs and enthusiasts. And I was a person that had a real technical passion for the equipment, the gear. And I had some back-end accounting back office experience, but not... I'm more of a sales and design and engineering.

James:

So you know in 2017, you know we continued at home theater technologies to beat our heads against the wall and try to figure out ways to become more profitable and better ways to get work done. And I ran into Paul at CEDIA one year. And that was when they were pushing the Vital Management.

James:

And they were talking about giving us metrics and the ability to drill down into your company and increase your profitability and increase your labor efficiency. And you know after spending 15 years beating my head against the wall trying to figure it out, I mean, I knew what the problem was. I just, it didn't matter what I did. I couldn't fix it.

James:

And so Tracy and I said, these guys seem to know what they're doing. Let's give it a shot. And we went all in. I mean, we drank the Kool-Aid. They made recommendations to us that we just thought were crazy. I mean, we exited the production builder market, which was half of our annual revenue.

Ron:

That must have been terrifying.

James:

It was huge. And all of a sudden, we were the fastest-growing group in Vital Management the first year we were there after cutting half of our business out.

James:

And so we trusted them. We listened to what they said. And you know we'd have these monthly calls where it's like little car gauges. And you know we were moving the needle. And darned if it worked great. I mean, it's a tough business to be in. And the benefit of Vital and what Paul and Steve were doing is they were combining information from dozens and dozens and dozens of companies.

James:

It wasn't opinion. It was fact and just pulling out all the great stuff. And it totally turned our company around. I mean, we wouldn't be where I am today had I not been that year we spent with Vital Management or that two years pre-merger and sale.

Ron:

Tell me more, why cutting the production builder work? Why did that make such an impact?

James:

Well, to begin with, it's low margin. And you've got these resources, humans, that you're using for labor. And you know you're sending highly qualified guys out to do very simple work. You're not really getting that great of a return. At one point in time, I thought builders wanted technology in their house, and I thought we were helping them. But builders just, they want to build the house. They want to get it through the warranty period, and they want to get paid, and they want to move on to the next one.

James:

So I think we put too much effort into that production builder business rather than... and it wasn't profitable. When we did put much more effort into larger homes, larger jobs, doing design work, doing lighting design, that business is a lot more profitable.

Ron:

Interesting. And you were using the dashboard from Vital, and I believe then, they maybe still do, they called it BI for CI. Is that?

James:

Yeah, I'm not really sure what they're doing today, Ron. I know that...

Ron:

Matt Bernath is now president and running the operation over there.

James:

Yeah.

Ron:

But what I wanted to get at is they had dashboards, and you talked about the idea that looking at different metrics and ratios within your business, knowing that comparatively, your numbers compared to other businesses, that was important to you.

James:

And you have been in business a long time. You had been at this game for decades. But for you to now have that information, that caused you to make change in your business.

James:

It did. It presented a competitive situation where I was comparing myself with other counterparts in the industry. And you know there were times where we were excited about our upcoming monthly meeting to see how far we'd move the needle.

James:

You know, we'd try something. We'd say, OK, no more coming to the shop to pick up equipment. It'll be on the job site every day that you show up. Drive your own vehicle home. Don't come to the office, go straight to work. So we try that for a month and then sure enough, that labor productivity would jump up. So you could see real results as you tried different things. There were things that we tried that moved the needle the other way.

James:

Simple things like not wasting time accounting for small little tiny parts and pieces, little RF. We created a big bucket called miscellaneous stuff. And we decided that we need to charge X% for miscellaneous stuff. And it just freed up a lot more time to do the things that were more profitable.

Ron:

Interesting. So you ultimately sold the business to Bravas, sold the business. You became part of Bravas, the big family. How did you land in Oklahoma? 'Cause you live in Oklahoma City now, correct?

James:

I do. Well, I live in Texas and Oklahoma City.

Ron:

Oh, okay.

James:

You've been to my house.

Ron:

I have been to your house.

James:

Still have the same place. I'm there a couple, three or four days a month, maybe. But so if somebody told me five years ago, 10 years ago that I was going to live in Oklahoma City and admit it to anybody else, I'd have said you're crazy. I didn't even acknowledge Oklahoma as a state. I love it up here. It's a very unique environment. Shortly after the Bravas merger, I was asked to come take over management for the Oklahoma City branch. And that ultimately turned into what is now Smart Spaces, the Bravas Affiliate.

James:

So we're not owned or controlled by Bravas, but we're under the Bravas umbrella.

Ron:

Got it. I remember back in the day, I'm going back many years ago when I worked for Lutron, I lived in Minneapolis and I used to work in the States in the Midwest, and I used to visit Oklahoma. And I might be misremembering it, but I'm going to totally people from Oklahoma in the Midwest are going to go wrong, you dumb dumb.

Ron:

But there were some cities where when college football season happens, like a good portion of the population of the state moves to those college football stadiums. Is Oklahoma City a big college town, college football town?

James:

The state thrives on college football. I'm a golfer and I've got a membership at a club up here. And my favorite days of the summer are when the Oklahoma football teams are playing because there's nobody on the golf course. Nobody at all. It's the greatest deal in the world.

Ron:

I remember this. I never made it to a game, but I remember, you know, commuting around town and I was like, where is everybody? They're at the football game. They're either at the stadium or they're in front of a TV watching the game.

James:

It's huge.

Ron:

What is it? What's like, what's it like living in Oklahoma City?

James:

It's great. You know, it's one of the my sons went to school at OU for a couple of years south of here in Norman. And we visited a while, you know, we visited regularly, but really didn't spend a lot of time in Oklahoma City. I think it's probably one of the most culturally diverse places I've ever been. And I've lived in Europe. I've lived all over the United States. It's the feel of a big city, but it's not a big city. You can get just about everywhere you want to go in 20, 25 minutes. There's lots and lots and lots to do.

James:

I live downtown and the musical concerts and the comedy shows and a lot of it's kind of a testbed for a lot of the entertainment industry before they're doing Netflix specials or something like that. They'll come do a gig in Oklahoma City. Three hour drive from Dallas.

Ron:

That's an easy commute.

James:

Yeah, easy, easy drive. And just I really enjoy it. For something I was very critical about five or 10 years ago, I'm kind of keeping it secret now. I don't want to lie.

Ron:

Don't worry. We won't tell anybody. Isn't that funny how we as humans can have biases or judgments against things and be so confident that we know, we think we know certain things like maybe, you know, Oklahoma City wouldn't be a great place. And then you go there and you're like, "Man, this place is fantastic." It's so common in society. It's interesting. It is political season, so these differences and biases is all out there in social media.

Ron:

Don't worry, I'm not gonna go that direction with any questions. Tell me about the type of projects you guys are doing, James. You guys score some nice work. What is the spectrum of the jobs type that you do at Smart Spaces? And then maybe introduce the other business that you've also spun up.

James:

We've actually got a pretty diversified client base. We do residential and commercial. And from a design build, put the technology on the plans before the building comes out of the ground to retrofits, people remodeling. We're involved in a couple of new car dealerships right now, which are nice. They're very heavily intensive on video and sound and audio. We're involved in a large sports bar that is currently being built.

James:

And we actually get... you know we're not the big city. I think there's two Best Buys here. And I think there might be a Guitar Center that has a little bit of gear. But we sell parts and pieces and cables and a pretty good diversified mix of what we do.

James:

Talking about the other business in Dallas Fort Worth, I always tried to get into the two-channel world, but there was already too much established competition. Well, we saw an opportunity in Oklahoma City last year. We had so many people coming in our showroom here. It was disruptive to operate the business.

James:

So we opened up a separate store just for 2-channel channel called The Groove. And it's in downtown Oklahoma City in a kind of historic area called Automobile Alley. And that's where the people can go to kick the tires and turn the knobs. And it's been quite successful.

Ron:

Tell me more. What was your vision for the 2-channel channel? You said you've always had a desire to get into it. Dallas was pretty competitive, so you resisted. You saw an opportunity and you went for it. What was your vision? And tell us about the store. What does it look like when you walk in?

James:

Well, to begin with, I was approached by a gentleman here locally that had recently opened a vinyl bar and you know kind of patterned after the Japanese vinyl bars. And he was kind of having a struggle getting it off the ground.

Ron:

So we partnered up and we rented the back room from him for a six-month period and threw some speakers and turntables and some equipment in there and actually got a lot of traffic. We thought it was going to be a good idea to be in a bar, but people don't come to bars to buy hi-fi equipment. They come to bars to drink. And the conversations aren't typically that productive at nine or 10 o'clock when you're trying to sell AV equipment.

James:

So we moved across the hall earlier this year. And this is a throwback to a 1970s, 1980s hi-fi store. You know, funky lights, vintage furniture, all modern day equipment. When you walk in, you go through a record store. We've subleased the front entry to a gentleman that had a record store very well established. And this is a second location. And then you've got our listening room.

James:

We've got a section that's just audio. We've got a section that's video. We've got a wall of televisions. Strictly retail. No installation work. Massive amount of equipment, you know, major brands.

Ron:

Do you mind sharing some of the brands?

James:

Yeah, yeah. We've got McIntosh and Bowers and Wilkins, Sonus faber, of course, Sony, Samsung. I don't want to leave anybody out. It'll hurt their feelings.

James:

Pro-Ject Audio, Rega, Sonus faber, Rotel. A headphone bar, where we've got a wide variety of Sony and Focal headphones. And I mean, God, Ron, we have people buying $3,000 pairs of headphones. And I didn't even know such a thing.

Ron:

Do you find that people are going in to check out vinyl, and then they learn that they can sit down and listen to what proper music sounds like? Or how does the dynamic work? Are they going for the gear and then they're, you know, spending their time flipping through the vinyl?

James:

It's kind of a mix, you know? You get some people coming in to buy a turntable and realize, oh, I can buy vinyl while I'm here. It's a one-stop shop. You know, we have people very specifically come to buy gear and are surprised that there's a vinyl store in the entryway. But it's been a lot more successful than I anticipated it being this early in the game. I mean, we just opened it. We reopened in February. So we've got three months under our belt in the new location.

Ron:

Big picture, I was having a discussion with a member of my team a few days ago, actually. Why has vinyl had such a resurgence in the last few years? Like, what has happened in society that all of a sudden we're selling more vinyl now than back in its heyday?

James:

I have an opinion to that. I think it's a fairly well-educated opinion. You know, growing up, going to the record stores and going to the shelves at Best Buy when the new CDs came out, you know, everything was tangible. Whether it was a cassette, an eight track, a record, a CD, a laser disk, a Blu-ray disk. So with the advent of the iPod, I think the general public traded convenience for equality.

James:

And I think that the Hi-Fi stores kind of died because you didn't have to go in and look at the records or the CDs. You could do it online. You could get a digital download. And of course, that content is all compressed. And now they came up with ways and there's just a whole industry of decompressing and converting it from analog back to digital. And I mean, gosh, why not just go buy the original analog source? What do we need to do all this conversion for?

James:

So I also think that the emotional attachment to the experience you have listening to music kind of went by the wayside when listening to compressed audio. And there's so much more information on a record that you don't hear through a Walkman or, you know, an iPod. So now that vinyl has come back, CDs are coming back. There's talk of cassettes coming back.

James:

And I think the timing for the Groove was good because if you're going to go back and touch and feel the records, why not touch and feel the equipment? There's a lot of online retailers that I think kind of tainted the consumer's confidence in buying things online, Ron. We've come across counterfeit McIntosh equipment that, you know, it's kind of a crazy world out there.

Ron:

Like they're coming to you for service and they learn that it's not even real or authentic?

James:

It's not even real. You know, you open it up and it's, you know, it's somebody else's electronics in a fabricated case. So, you know, it's crazy how vinyl is coming back. And I never expected CDs to come back, but CDs are on a resurgence right now as well.

Ron:

I have my new pair of Focals right over here. I haven't installed them yet. I just turned them on for the first time last night.

Ron:

And I was talking to the Focal guys at the ProSource Show last week. And their amp, I'm gonna do them a disservice 'cause I don't know what it's called, but it's an amp and it has the integrated CD player in it. And they were telling me that that's all the rage.

Ron:

There's such a demand for the integrated amp with CD player because people, and he was making this overture to me, all these people have all these collections of CDs that have been sitting in their closet.

Ron:

And I was like, oh my God, in this closet over here, I have boxes of CDs that I never had the heart to throw away. 'Cause I was like, one day I'm going to use these things again. And I would totally, if I had a CD player, I would totally pop a CD in and play it again. It sounds silly to say that because it was all the...

James:

It's kind of a trip down memory lane.

Ron:

It is because I have so many memories connected to every single one of those CDs. I know where I bought it.

James:

That's because we believe that there is a truly an emotional attachment to music that just went away. And we're seeing that come back. We really are. I mean, I don't know any other reason to spend $3,000 on a set of headphones other than to just get all that detail and all that clarity and get all that information into your ears.

Ron:

Yeah, that's awesome. I'm curious, when you, James, are listening to music, am I going to get you in trouble to ask you what do you listen to?

James:

Nah. I've got a great system at home. It's my little go-to Mecca. I have a pair of Sonus faber, two-way heritage amateur speakers, and then a McIntosh integrated MA 9500, which is a solid-state integrated system with 300 watts per channel of power output. And then a Rega P8 turntable.

Ron:

Got it. Will you just sit there? Will you do the two-channel experience and sit there with a cocktail and just turn the lights off and just listen to your music?

James:

Almost every day. Almost every day. I'll listen to an album or two and then I switch to streaming for convenience.

Ron:

And when you're streaming, how do you prefer to stream?

James:

I use, so I store the content on a gosh, a Rune server. And the music is managed and streamed through Tidal most of the time. And then we also use Blue Sound as an interface and very similar to Sonos or Whim. It's just my personal preference is Blue Sound. I feel that they're more into the hardware aspect than they are the content aspect of it.

Ron:

Makes sense. Makes sense. Well, I appreciate you sharing. And I'm excited for your success with your 2-channel business. That's awesome that you're realizing such success. And frankly, you're bringing that vintage experience. I say the vintage. It sounds like you're really, it's not just about the gear, it's the experience of someone visiting the store.

James:

It is. The ambiance and the textures and the colors and the smells and the sounds. Yeah, I got our Facebook page. Charlie, the manager down there does a great job keeping it updated with images. But it's a way cool place, man. It really is.

Ron:

How do you market that thing? So how are you driving traffic into that business if you're saying that selling 2-channel in Oklahoma City wasn't, and I don't want to be dismissive of anyone doing it there, but there wasn't as much competition, it's probably putting it lightly, as there was in Dallas, Fort Worth. What are you doing to drive visibility to your business?

James:

Crazy, Ron. We're advertising on the radio and digital media. And that's a story in and of itself. We had a call one day from a person down in Norman, Oklahoma, about 30 miles south of here. And it was on a Monday. We're closed on Monday. He was desperate for a new turntable.

James:

If we couldn't get him a turntable on Monday, he had no choice but to drive to Dallas. Well, it turns out we went ahead and opened the store and met him. He bought his turntable. And the next day, my phone starts ringing about 9:30. Turns out it was a guy named Carrie Murdoch, who's one of the leading sportscasters in the state on an FM radio talk show called The Sports Animal. And he, during his show that next morning, kind of gave us a shout out.

James:

We didn't even know who he was, but at the time, we didn't know who the guy was until the next day on the radio. And I mean, my phone rang all day long. So many people heard about the Groove on the radio. And coincidentally, one of our builders down in Norman had just recently finished a house for one of the salespeople for Cumulus Media, who manages this radio station, runs this radio station.

James:

So the next day, I had a meeting with her and we're running 80 some-odd radio spots a day on a sports radio station and on an AM/FM rock station. We sponsored a weekly music trivia show on the sports station. And then we sponsored a weekly vinyl hour on the FM station, did a couple of live broadcasts with another radio personality. It's very well respected in the state.

James:

And then this digital targeted media marketing through targeted ads and geofence. I don't get it, man. But it's unbelievable.

Ron:

Well, I can explain it. So for those folks out there that have brick and mortar, you can do what's called geofenced retargeting or display advertising so that if people say enter some perimeter of either your brick and mortar location, or I know you had given me the example before we went live, you said they were doing it around like luxury apartment complexes or luxury neighborhoods.

Ron:

So you could geofence geographies and you could then have your content served up to them. And you can do this on social media. You can do it with Google advertising. And you're doing that and it's hitting. It's working. It's driving traffic.

James:

First off, I didn't know people listen to the radio anymore. I mean, I didn't even know there was one in my car. I mean, of course I knew there was one in my car, but I'd never tuned into a station before. And I... we're three months into this. And just about everywhere I go in this city, if I mention the Groove, that person is familiar with who we are from the radio.

James:

And they were going over their campaign results with me last week. I might share these with you to get your opinions on some of them, because the data that they were giving me, in a one month period of time, 51 people that received our digital targeted ad actually came in the store. They're tracking their device. And of all these people that got this ad, 51 of them came inside your building. Crazy.

Ron:

That's cool. That's very, very cool.

James:

Radio advertising is not dead in Oklahoma. I can assure you.

Ron:

Well, you've been at this game of business, James, for a little while. You know, I put air quotes for a little while. And you've run businesses that were less profitable, and you've run businesses that were more profitable. And today, at least you know for the time period that I've known you, you're running a nicely profitable shop. And that is... anyone that's listening or watching, you know that that's easier said than done, and you know that that's hard to do consistently over time.

Ron:

And so this is what I believe to be true, James, and you don't have to comment unless you want to. But I would say from my experience, most integrators are running at, you know, 10% or less net profitability on their business. Or less. Or less single digit profitability, or worse yet, they don't know. They don't know how profitable they are. They know there's money in the bank, but it might be theirs, or it might be customer liabilities.

Ron:

And then at like a really good shop, really good business installation company is in the 15% net profitability. And exceptional businesses, very rare air is approaching 20% or 20% plus. And you're approaching or you're in that top tier neighborhood. And what are you doing today that you've learned to do or learned to pay attention to that is resulting in you consistently running a more profitable business than in some of your earlier years?

James:

So I think there's a couple things. Process is so very, very important. I kind of lucked into this industry. I got a job working for Apollo Presentation Products. Ultimately, I ended up staying in the industry. The industry has really evolved and developed.

James:

But with a lot of businesses, there comes a time where the owner becomes complacent. They think they got it made. They think they're doing it all. And so you get comfortable and you find yourself caught in a rut and you're moving backwards.

James:

We follow a very, very stringent written process. And I actually have it sitting on my desk. But our company operates off this one piece of paper. This is our operations process.

Ron:

And is it always handy, always at hands reach?

James:

There's one on everybody's desk. Everybody here has one of these to remind us, and we have regular meetings to talk about our processes. So if we follow the process and if we take care of the customer, the money makes itself. If we go off the beaten path and we don't follow the process, we're constantly losing out. We're missing it. It's more difficult.

James:

The most expensive aspect of our business is labor. And that is where I think in the old days, that's where I lost most of my money.

Ron:

Give me an example. Examples of what might feel like it's the right decision, but it's harming the business. In terms of labor, if you want to run with that scenario.

James:

Well, I mean, like we had a situation today where we need a cable conduit run across some concrete. And the guy said, well, we'll just go get a saw and a jackhammer and this, that, and the other, and we'll do it ourselves.

James:

Well, that's not what we do. We're not experienced at that. It's going to take us a lot longer. Let's pay somebody else that's a professional to come in and do what they're best at, and then let's take our time to do what we're best at.

James:

You know, learning how to say no is sometimes really hard. You know, like going back to earlier in the conversation where we fired our production builders overnight. Well, that was a tough lesson.

James:

But man, we sure learned with that labor we could make a lot more profit doing jobs that had higher margins.

Ron:

So being more selective in the type of work that you're pursuing.

James:

Absolutely. Absolutely. You know, we kind of look at our product lineup. I always compared it to like a band. You got a first chair, second chair, third chair, and there's not a fourth chair. So Mr. Amplifier Manufacturer that's new to the block, I'm sorry, but our seats are full. If one of them vacates, well, we might consider you later. But you can't be everything for everybody.

James:

And you know I think another big part of it is I remember back in the years when we were selling structured wiring, and we were selling products. We were selling, you know, a brand X, Y, Z. And people don't want the product. They want the experience.

James:

When you go from selling a product to selling a solution, that's a pretty major hurdle. But when you go from selling a solution to selling an experience, and taking the brand names off, and taking all the complex nomenclature out, and you know at the end of the day, people just want this stuff to work. It's really, really all they want to do. So that experience-based selling, I think, is a big part. But you know I'm digressing.

James:

I've learned in the last four years in Oklahoma that process, process, process. My team helped design this process. My management style has gone from that of the dictator to that as a coach. This is my team. These are people I have. It's all I got. I got to get through the season with these people. So my job is to make them better. And my job is to create opportunities for them.

James:

And, you know, we used to go, we'd go to hire people. And there was always my counterpart that said, "We can't afford to pay that much. We can't afford to pay that much." Well, you get what you pay for. And, you know, if you pay your people well, follow the process. Do what you're good at. Don't do things you're not good at. Let somebody else do that.

James:

And focus on the experience that you're giving not only your clients, Ron, but your vendors and your employees and the people you run into along the way in doing the job. I think that's what's really made a difference. And it's been a lot of fun.

Ron:

What would you go back and tell the 30-year-old entrepreneur version of yourself? If you had a minute to spend with them, you had a minute to spend with you when you were 30 years old.

James:

Listen to other people that have more experience than you have.

Ron:

Talk less, listen more.

James:

That's exactly right. There's a lot of knowledge out there. And in our industry, you just got to find the guys that are smarter than you and talk to them and get to know them.

James:

I mean, back when we first worked on marketing, I would have never spent that kind of money on marketing 2016, 2015. But it's what you do. And I listened to what you did. And we got results out of it. We got tremendous results out of it. So yeah, listen to other people.

Ron:

Now, there's a book out there, Who Not How. I'm sure it's over here on my bookshelf. There it is. Oh I've now moved my go-to books that I want at hand's reach right here so I can grab 'em. One of my favorites, I'll hold it up to the camera, Who Not How by Dan Sullivan and Benjamin Hardy. And the book's general philosophy, which I've attempted to practice more and more, which is what you're saying, which is find people in your life that know how to do that thing.

Ron:

You just referenced cutting concrete. You could go and rent a concrete cutter and your guys have probably watched it and probably could figure it out. Or you could go get the expert concrete cutter that'll come in and get, they'll be in and out in 10 minutes and make it look easy. And they're happy. They practiced their excellence and your team's happy 'cause they were doing other productive work while that work was getting done.

Ron:

And no one got injured. You didn't waste any time. You didn't waste any money. You know, the same thing, like when you think about your CPA, few of us want to do our personal or business taxes. I know that I don't. I file taxes in like 30 states. Like it's not remotely fun, but you bring the professional into your life. And when you do that, things get better. So I agree with you.

Ron:

My younger version of myself tried to do so many things myself. And now, even in my agency, if I don't know how to do it or my team doesn't know how to do it, we're less likely to go say, "Let's figure it out," versus, "Let's go hire an expert that is an expert at that thing that can get us, you know, to the goal much, much faster." Because everybody wins.

James:

You know, when you quit focusing on being the best or the biggest, and you just realize you just want to be the best, you know, I think I finally came to the realization that my greatest fear in this industry is having a competitor of mine on a job site and criticize the work that we did and be correct about it. That's a fear. But it's about being the best. And if I'm asked to do something that we don't normally do, it's a lot easier to say no now than it was 30 years ago.

Ron:

The more we say no, in my life experience, the more I say no, the more money I make.

James:

I'm right there with you.

Ron:

Amen. When you look ahead, James, to the 2024, this economy we're in and beyond, right? So we have a presidential election coming in the fall. All of us are out there weathering the political storm. That is, our brothers and sisters and neighbors out there arguing this and that about, you know, politics.

Ron:

Although I think in this season, 2024, my observation is, I think we've all been a little bit better. I think we all got a little frustrated from '16 and '20 and all the divisiveness. I don't know if that's true, but I don't know if that's true in the world, but it's what I feel. I feel a little bit less of that. Maybe everyone's just not going there. But again, I said I won't go into politics.

Ron:

What do you see economy-wise? What are you forecasting for your smart spaces business and your groove business in '24 and '25? And what are your predictions for what's ahead?

James:

I think that I still have not lost my confidence in the economy. We've seen a little bit of fallout on some of the lower price point homes due to what interest rates have done. Fortunately, we're very diversified. We're not just doing residential new construction.

James:

And then we've also expanded the lighting work that we're doing, the window treatment work that we're doing, a lot of focus on video surveillance and the advent of AI for verification of break-ins. So, you know, I think we'll still continue to continue to see growth. I don't know if it's going to be a lot or if it's going to be a little, but I certainly don't think we're going to go the other way.

Ron:

Your forecast is the economy, and I'm putting words in your mouth, so I don't know if this is what you believe. You're seeing the economy, at least in your market, which is Oklahoma. You see it as better in '24 than in '23? Or flat?

James:

Yes. I see it better. You know, there's a lot of money in Oklahoma. There's a lot of oil money. There's a lot. I mean, people who have money are always going to have money and they're going to spend money and they're going to buy nicer things.

James:

So definitely think that we're going to continue to we're definitely better than '23. But it's hard to measure because we're doing a lot more lighting than we did before and we're doing a lot more 2-channel than we did before. I got a crystal ball, but it's really never been very accurate.

Ron:

Well, I love what you're saying there. You're saying the economy, it might be a little better, but what you're doing, James, is you're being proactive and you're adding new categories of revenue streams to your business.

Ron:

So one version of a business operator is they could sit there and let life happen to them. Another version is they can continue to invent and reinvent and innovate and design their future.

James:

You know, I think that's always been a key to my success, Ron, is there's my wife used to always joke and say, you know, he's just going to get bored with this business after a year and he's going to go start another one.

James:

And you know that diversification and being involved in different things certainly gives me a much heightened level of comfort than if I just did new construction because they could stop building new homes tomorrow. And I'd be up a creek. They're always building new restaurants. Hospitality industry is always evolving. The car dealership industry.

James:

All of these car manufacturers want to compete with each other. They want to have the newer looking showrooms. There's kind of a mandate with a couple of car manufacturers right now that they want all new showrooms. So we certainly don't want our competitors to grab that revenue opportunity when we're perfectly qualified to do it.

Ron:

We are in an awesome industry. I said this in 20... let me think about, what is this? 2000, when I joined this industry, when Lutron hired me, I knew nothing about this industry, by the way. And I said, it seems reasonable. There'll be more technology in our lives tomorrow than there is today. And I read in a book somewhere that you want to be in a growing marketplace, if you can, to build a career. And I was like, sure, I'll go work for Lutron. Let's go. And I'm here now 25 years later, and I feel exactly the same way.

Ron:

When I look ahead, whether it's that car dealership or that restaurant or that house or that boardroom, there will be more technology in those spaces tomorrow than there is today.

James:

Absolutely. Constantly evolving.

Ron:

And it's going to constantly be evolving, constantly getting better, faster, stronger, more capable. And I do not think AI replaces that.

Ron:

I do not think the future robot workforce replaces that. I think that makes our industry absolutely necessary and very viable for very many years to come.

James:

I would have to agree with you, Ron. You know AI and, you know, it's the experience. You know, we used to be the AV guy, or we were the home theater guy, or we were the security guy. And today, we want to be the technology guy.

James:

We want to be the technology integrator. There was that, I don't know, big riff about four or five years ago at CEDIA and at all of these conventions and events about the DIY market and how the DIY market was going to come in and really cripple a lot of the CI guys. This stuff's not getting easier. It's really not. I guess the other day, there's Wi-Fi 7 now. I just figured out what Wi-Fi 6 was. So...

Ron:

I'm still on Wi-Fi 5!

James:

It's like working in a toy store, but it's really hard to keep up with all the new toys and gadgets and gimmicks that come along the way. So, no, I think we're in a very safe industry. You know, I think that the AI is just going to continue to drive more opportunity to us. You know, the health and wellness markets are going to continue to drive more opportunities to us because we have a fairly well-educated workforce and a fairly technically astute workforce where some of these other trades don't necessarily have that level of problem solving in their workforce.

Ron:

I agree. I want to close on, again, just kind of a big meta topic here, which is, if you look across the United States, and I'll be specific, there's a housing shortage. And there's a demand for housing that's unprecedented.

Ron:

And because of mortgage rates and insurance, you know, interest rates and whatnot, I was just having this conversation with one of my neighbors, you know, a couple well into their retirement, no kids at home, and they've admitted that under normal circumstances, they would have sold their home and downgraded. But they can't afford to downgrade their home because of the interest rate they locked in and where they're at versus what it would be in a resale.

Ron:

And so that combined with an unprecedented demand, it puts our country into a really interesting place where it's, in my mind, I'm almost imagining like a pent-up rubber band, a pent-up demand for housing. And I'm saying all of that, it's causing certainly some pain and suffering, but I'll just go back to our industry. I think it means that at some point, that pressure would have to be relieved, no?

Ron:

I mean, there'd have to be some significant surplus of construction, residential construction, or it just stays perpetually underserved, but there's supply and demand economics at play here. And it seems at some point more homes are going to get built. And again, that simply bodes well for the home construction space, which is where we operate. I don't know if I'm more ranting. I'm standing on a soapbox stating that, but do you feel that or do you have an opinion to weigh in on that, James?

James:

You know, with what we're doing, the lion's share of our clients are in the million-plus dollar homes. It's kind of not the rest of the country. I guess I would struggle to be in my mid-20s trying to make a decision on buying my first house right now with pricing the way it is and interest rates were the way they are.

James:

But it's a constant cycle. It's up and down. There's ebbs and flows and there's good times and bad times. You know, the entry-level construction market in Oklahoma has suffered, but the high end market continues to be strong. People certainly are always going to want a place to live. Downtown Oklahoma City has got a half a dozen high rises that were abandoned office buildings that are being repurposed for high-rise living, for residential.

Ron:

So maybe that's the spin, actually. Maybe that's the clarification is that the luxury consumer is going to buy their house in cash and they're not subject to the interest rates. So the demand shortage in the country is really that middle-class and lower-class person that might want to buy a home. They are suffering. There is a shortage of homes. But that luxury consumer, is there enough construction getting built to satiate their demand for housing or at least in Oklahoma?

James:

You cut out on me there. We had a little little internet burb there, Ron. But I think, you know, one of the things that we see in Oklahoma and we saw in Texas is there's a lot of people in California and New York and Florida that are all coming here.

James:

And especially the housing market in California is just so much more cost per square foot. So we're still really enjoying those transplants. Don't necessarily like all the transplants coming in, but it is a unique market in the Central Texas, Central Oklahoma that I think is unique to the rest of the country.

Ron:

It sounds like you, James, have landed not by accident, but by design into a really cool place. You're living in a beautiful place, you're running a great business, you're making money, you're having fun. Congratulations. And thank you for coming on Show 266 of Automation Unplugged. It was a lot of fun having you on the show and catching up with you here live. I appreciate you.

James:

You know, Ron, I really appreciate you inviting me to be on the show. We've known each other for a long time, and I think I saw some of the automation unplugged that were in the single digits. And it's taken quite a while to get here, but it's really been exciting for me. And thank you so much for having me on the show.

Ron:

You're welcome. For anyone that wants to get in touch with you directly, James, learn more about the Groove, learn more about Smart Spaces, how would you recommend they get in touch with you?

James:

Ron, the best thing I could recommend is email me, and it's pretty simple. It's James dot Westbrook, first name, dot last name at SmartSpacesOK.com. And we also have social media pages for both Smart Spaces and the Groove.

James:

Anybody more interested in learning more about the Groove could reach out to us at info at thegrooveokc.com. And I'd be happy to talk to anybody about anything industry related. I didn't get here by myself. There were a lot of guys that fought these battles before me, and I listened to them, and I took their advice. And if I can help somebody else within this industry, then I'd love to.

Ron:

Awesome. Well, it's a beautiful overture. And James, appreciate you, my friend. Congrats on your continued success. And I look forward to seeing you soon.

James:

It's been a pleasure, Ron. Thank you very much. ].

Ron:

All right, buddy. All right, folks, there you have it, James Westbrook. He is running a couple of great operations there in Oklahoma City, running Smart Spaces and the Groove.

Ron:

And we'll make sure to put those handles and websites down in the show notes and on social media. And we, One Firefly, we have a whole slate of booked guests through the summer. So I know for a fact we're gonna do three shows in June and it might be two or three shows both in July and August.

Ron:

So we've got a lot of fun folks lined up to bring to the table here and interview. And if there's ever anyone that you would like to see on the show, reach out, let me know, let my team know. And we'd love to try to make that happen. So on that note, I'm gonna sign off. I appreciate all of you.

Ron:

And James, you're still down here on my screen. Stay, James. You and I are going to connect here as soon as we go off of being live. But appreciate all of you. And I'll see you very soon. Take care.

Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly became the leading marketing firm specializing in the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.

Resources and links from the interview: