Watch Episode #100: An Industry Q&A with Lee Travis
In this weeks home automation show of Automation Unplugged, Lee Travis, innovator and thought leader in the home automation industry, brings a unique perspective as an owner of two custom integration firms in different markets.
This week's show features our host Ron Callis interviewing Lee Travis. Recorded live on Wednesday, February 26th, 2020, at 12:30 pm EST.
About Lee Travis
Lee got his start in car audio over 30 years prior to founding Wipliance in 2006. With two locations, one in Bellevue, WA, and the other in Scottsdale, AZ Wipliance has 35 employees, made $5 million in revenue, and was named Integrator of the Year for 2019 by the Consumer Technology Association and CES.
Wipliance’s unique approach to marketing efforts includes a dynamic video portfolio, exciting showcase events, and a sister company, Obot Electric, that offers a seamless experience for clients.
Here are some of the topics Ron had the opportunity to discuss with Lee Travis:
- His process in integrating electrical contracting to his business
- Challenges and advantages to operating in two different markets, Washington State and Arizona
- The importance and benefits of being part of a buying group
- The future of 5G and how it might impact the custom integration industry
Ron: Hello, everybody! Ron Callis here with another episode of Automation Unplugged brought to you by my day job over at One Firefly. This is a big day. You can see the, where are they at? The balloons here. This is actually our episode one hundred. I was just reminiscing earlier this week about when this started. I made a post on LinkedIn actually this morning about this. I want to say it was right around the fall of 2016, approximately around that video on Facebook was becoming a thing. Facebook now could stream video, and they were slowly rolling it out. As an agency that serves customers throughout North America and the custom integration market, it's my job, and it's our job to be on top of new technologies. I brainstormed with my team, and we came up with this idea of doing this show, and it officially launched in April 2017. For those of you that have been watching or listening, you know we've gone through lots of different software, lots of different microphones, lots of different techs to try to figure out how to be great at this. And that brings us to today. I'm proud to bring you our guest. He's a long-time client, a friend of One Firefly, an all-around great guy, and well-respected in our industry. And that is Lee Travis of Wipliance out of Seattle. Let me go ahead and bring in Lee, there he is.
Lee: Oh, is that today?
Ron: Yes, it's right now! Were you busy texting?
Lee: Sorry, I was just working. I forgot that it was today. But look, let's do it seems like as good a time as any.
Ron: Well, your office there seems to be perfectly decorated with one hundreds. Is that just by accident? Where did that come from?
Lee: I don't know. Do you mean these things? [blows on a party horn]
Ron: Woo! That's awesome. That is fun. Well, Lee, how are you doing, sir? What do we have there?
Lee: Oh, there's all - I don't know, my desk looks like somebody threw up one hundreds. It's got one hundreds everywhere. I was hoping they were one hundred dollar casino chips, but they're just actually paper.
Ron: That is funny. What I could do here in our little software environment, Lee. Any comments that are coming to us live on our Facebook page, and I can put them on the screen here.
Lee: Oh, no.
Ron: Yeah. It is dangerous. I've got to do some auditing and filtering.
Lee: You may have to proof some of that stuff.
Ron: I will proof it. Here is Jordan, you know Jordan. He's saying, "Hi." And you've got Stephanie. She's saying "Show 100! Can't believe it." And here's someone else that you know, this is Kendall. There's the one hundred, that's for Kendall. "Excited to have Lee join us." I'll put more comments up on the screen. If you're out there watching live certainly drop a comment and tell us what you're coming to us from. We're planning on having a fun conversation here with Lee. Feel free to interact. All right, Lee, some folks listening and or watching may not know you may not know your background, so I always like to start there if you don't mind. Maybe just tell a little bit of your background and your story, how you came to being the dude running Wipliance out of Seattle.
Lee: So the dude story, if we go way, way back, I started with car audio in 1987. I was an 18-year old that loved cars and loved music and was trying to figure out how to put those things together. I went to my first Consumer Electronics Show in 1987, so the one I just went to in January was my 34th consecutive Consumer Electronics Show. I've been doing this gig for a long time. I went from car to home. I'd love to hear from some car audio guys out there, I know there's a lot of them in this industry. Ex-car audio guys, I'm guessing.
Ron: When you were doing car audio, is this in the years when you would like to try to make cars really loud, or what was the goal? I didn't live through that age. I wasn't a part of the car audio scene. What does it mean to be in the car audio scene?
Lee: The car audio back then was cellphones. Just go back and imagine a $5,000 cellphone and a $1,500 a month cellphone bill, and that was after, of course, pagers. Doctors hold onto those a little bit longer, but that was a big part of our business. And then the car audio piece, just like what we do today. It's really about what the customer wants. Some of it was just about SPL, Sound, Pressure, Level, and Volume. Some of them were about sound quality, some of more about making a killer system disappear. It's very much the art and craft that we do today in homes and businesses. Do they want it loud? Do they want it to be hidden? Is sound quality the most important thing? Every customer or client has their own schtick. That carried over. From '93 and '94, I got into home stuff. That was the beginning of surround sound, DVD, and projectors that took three people to install up on the ceiling and hope you didn't drop it on your head.
Ron: And this is the big Runco projectors?
Lee: Yeah, it's like one of those old light bulb jokes right. Like how many people to take to screw it in? It took two guys to hold it up and one guy to put in the leg bolts all to make sure that thing didn't come down. From there, we got into commercial. It started with audio/video because that was my passion, but then builders wanted us to do structure wiring and security, and they wanted one person to do it all or one throat to choke, as they call it.
Ron: I've heard you say that more than once - one throat to choke.
Lee: It's my new mantra! Over the years, I built another company that we grew to three states and a hundred employees and had some great success and learned some lessons about acquisitions and culture and what to do and definitely what not to do. My knowledge comes from, and I don't think any colleges would have accepted me, so all my knowledge comes from hard work and school hard knocks and mistakes made. I started Wipliance in '06, we're at 14 years and have a fantastic team, and we have offices in Seattle and Scottsdale. We have an electrical contracting company up here in Seattle as well. It comes down to the people, building a great team, and loving what we do. I was reading some other articles about successful people, and whether it's Bill Gates or still Steve Jobs or Warren Buffett or Elon Musk, the common trait was curiosity. I know as you and I've talked right, you're consuming all those podcasts because of your thirst for knowledge. I think I've always just been really curious about all this stuff and love the technology aspect.
Ron: For Wiplaince, what is a typical project? I call all the folks in our industry technology professionals or A/V guys, and the reality is you're all a little bit different. You have different specialties and different areas of focus. So what is the Wiplaince area focus? What is the sweet spot for your types of projects?
Lee: The name Wipliance came from wireless appliance because, starting it 14 years ago, I think I had reserved and trademarked the name to two or three years before that. I really felt that in the future, there would be so much more we could do wirelessly that would come out that wouldn't require new construction hardware for us to do it. Today, our clients range from - I know some people out there do only "cost is no object" projects or only six-figure projects. I would say we really kind of run the gamut. Direct to vendor businesses are only less than a third of our business. Commercial is about 25% of our business. The rest of it then is you know retrofit and direct to consumer. I feel like we're fairly balanced, and that helped us through the recession. I started that company pre-recession. I think that's what kind of kept us agile and not be 100% dependent on one vertical. Today, we do anything. Literally, our requirement is that we're selling a complete solution. You want to buy a soundbar and a TV; we take care of that. And if you're going to do half a million-dollar project, we do that on the other side. We do MDU and high rise buildings. I think we kind of go soup to nuts in that category.
Ron: You actually mentioned a few things there that I want to go a little bit deeper on. I do want to give a few more opportunities for shout outs. We've got a nicely active crew watching and commenting live here. We've got Bobby Dodge over at ProSource. I've got that as one of our topics on, to talk to you about ProSource. He says, "Hi, Lee, and Ron. Two of the best in our industry. Looking forward to seeing you both in Vegas at the Summit." For sure, Bobby. Likewise. That's just around the corner. Not this Sunday, I'll be heading out there. But on the 8th. When are you going down to Vegas?
Lee: On the 6th.
Ron: Oh, you're going early. Why are you going so early? Are you going for fun in Vegas for a few days?
Lee: It's a weekend, and it's Vegas. I don't think much an excuse to go.
Ron: That's a good point. All right.
Lee: Are you going to come in early now?
Ron: I gotta, I don't know. Maybe. You put me on the spot here! Maybe. I'll think about it.
Lee: Am I allowed to ask questions?
Ron: You can ask questions. No holds barred here. Well speaking of which, Chris Palmer just posted "Man, how that Lee Travis is not on every piece of CE branding. I don't know." See, that was borderline. That wasn't too bad. I did go ahead and read that one. We'll see if they get any more juicy as we go. Then we got Kris Gamble; he's watching from the UK and gave us a bunch of one hundred emojis. Thank you, Kris. I appreciate that. Lee, in 2006 is when you launched Wipliance. When in the evolution of your business of being an entrepreneur, did the electrical contracting division come into being? Did it happen right at the same time? Or did you evolve into also opening that division?
Lee: I did have some experience with electrical before in my previous company. We started Obot Electric, which stands for On Budget, On time in 2008. Two years later. It was just great planning on my part. I know we've talked before about businesses on edge, so nothing like starting an electrical contracting business right before construction comes to a screeching halt in '09.
Ron: That's when I started my business entirely was right there perfectly in '08 to enter '09. So yeah, I feel your pain.
Lee: Let's just say it was touch and go.
Ron: Amen, from your mouth to God's ears. Wasn't that true. You know what? It made us stronger, didn't it?
Lee: It did, for sure. There's no doubt about it. It's like you don't pray for hardships, but you're thankful on the other side.
Ron: I would imagine having an electrical contracting division enables you to tackle certain types of projects more seamlessly.
Lee: It does.
Ron: Was that the philosophy of why to do that? To give you say easier access or entry or maybe even get you in the door earlier into some types of projects?
Lee: Well, I think it's easy in hindsight to come up with some great explanation for why you started something, but it's not as fancy as all that. Many solutions or companies come out of fixing a problem. We were basically out installing a lighting control system and depending on other electricians. They said they were going to be there on a Friday to put it all in. We also have the customer expecting to have this lighting control system ready for a party that weekend. And the electrician calls us and says they can't make it because they're still busy on another job. Literally, it was at that moment where I was like, "We need to have control of this piece to make sure that we can give our customers a complete solution." What started out from a need of, "We need lighting control systems installed, powerful projectors, power at TV locations, power for our equipment racks, and to control the customer experience. We need to bring that in-house."
Ron: I'm curious, if you don't mind, I'll dig a little deeper there. Let's say with lighting control, I know you're a big Lutron reseller, you're close to Lutron. They're a great company, and lighting controls important for your business, as are lighting fixtures - selling lighting fixtures important to your business. When you are securing control projects, let's say you're selling a Lutron lighting control system - will you then, as a part of your strategy, also sell the electrical services to run the Romex or install the lighting control? So that you're able to sell the hardware and the electrical labor? And/or sometimes do you find yourself selling the control and then partnering with whoever the contractors' electrical contractor is?
Lee: It can kind of happen either way. If we're on a project and the contractor has their favorite electrician and electrical has changed, Other these recent advancements in lighting, electrical has changed very slowly over the years. There are lots of good electricians out there that do a great job. If the builder has electrician they're in love with, and we don't try to upset that. We work with them and try to build a great relationship. If they don't have someone or we're just coming in to install our stuff, then obviously we refer that to our sister company, Obot Electric to handle the installation of the lighting control and power needs requirements. If the client and/or the builder is open to it, then we try to be selective about the jobs we take on. We're more of a boutique electrical shop, so we're not going to take everything. We're really looking for the clients that want to do some great lighting, and if they're just looking for the cheapest price, then we're not those guys. But if they want somebody who understands lighting and lighting control and what all of that is, that's looking out for not doing outlets in tile if they can be done under cabinet or in a cabinet or on the sidewalk, make it look really clean. If you're just looking for the lowest price, then we're not those guys.
Ron: You have a unique vantage point as an integrator and as an electrician or electrical contracting business. What's your perspective on what appears to be this increasing rate of low voltage lighting fixtures solutions? There are all these LED technologies coming out, and there's even buzz or talk of maybe there'll be homes with no Romex pulled for lighting control. I'm going to ask you to pull out your crystal ball a little bit, what do you think is coming down the road in that regard?
Lee: That's a great question. I'm not an official knowledge source on this, but obviously, we see those trends, we see it coming more from the vendor side, and we see people asking about it. There isn't a lot of consumer knowledge around this, but with some of the low voltage only lighting products out there like Colorbeam and some of that kind of stuff, they've proven that that technology can work and can be done over CAT or network cable. I think from what we've seen so far, that part of the industry changes very slowly. You're not just changing electricians, but you're also changing the code and inspectors and all these things. I remember when we were doing Lutron lighting control, and we were mixing high voltage and low voltage in the same box. We always had to bring documents to say that it was legally OK and get it passed. That's the same challenges today with this low voltage lighting. The electricians aren't sure about it. The clients are like, "Do I feel safer to pull Romex and know that today or in the future, I could do anything high voltage?" Then there's obviously people that want to push the envelope that want to do the low-voltage lighting and then once that has happened, are the inspectors comfortable with that? I mean, here's a fixture being powered off with low-voltage cable. They haven't seen that before, it's new to them. You've got to kind of do those steps like we had to with lighting control in the early years. As for long term, I mean clearly, every LED light is stepped down at some point to a lower voltage.
Ron: There's a transformer in line, it's just where is it?
Lee: Yeah. So today it could be six inches or 12 inches or six feet or twelve feet away, the difference is you're talking about, can it be 80 feet away or 100 feet away? That's where that technology is new, and it's dropping down to low voltage at some point anyway. There's always the question of where do we put these transformers? Are they going to generate too much heat? Are they going to be serviceable? Are they up in an attic space or inside of a cabinet? Those are all questions, but I see no reason why, and I know from the lighting vendors that I'm talking to, they're all trying to figure out the same question. How important is that we should be developing a product like that? I think it's an open opportunity. Will someday you end up with local contractors pulling all that lighting? Will you someday have a house that's all wired and low voltage? It's really hard to tell. I mean, our computers today can plug into USB and power up our phone. A lot of these devices can, but stoves can't, hairdryers can't, clothes dryers can't. There's still a lot of things that require that that high voltage connection I think the one thing that's constant here that we've always seen as change.
Ron: If you can't accept change, you shouldn't be in this industry playing ball.
Lee: To me, that's what makes it exciting. If it was the same thing every day, all year, year after year, to me, I don't think I'd be doing this because it's that curiosity, it's that change, it's what's coming next. What do we need to prepare for? What do we need to learn?
Ron: I'll ask you a trick question. If you were going to build a new house and you're building it next year 2021, would you pull Romex to the lighting fixtures, or would you pull low voltage cable to the lighting fixtures?
Lee: I would pull Romex the lighting fixtures.
Ron: Would you pull both, or would you just pull Romex?
Lee: Today, planning out for 2021, I would pull Romex because it would leave me lots of options.
Ron: OK, that's fair.
Lee: There's a lot of great products out there. I've got lots of choices that are electrically powered. I have limited choices that are local power. Now obviously, I love layers of light, so we would do under cabinets and above cabinets and accent stuff. For all that stuff that's already going to get set down to low voltage, then I'd be fine.
Ron: I thought you mentioned Lutron, you and I both mentioned Lutron. Lutron, last year or maybe a couple of years ago now it all blends together, acquired Ketra. And so I'm curious how the world of talking about circadian rhythm lighting and tunable lighting - what are you seeing out there? Because that then ties into this conversation of wellness, which is a growing theme in our industry. Certainly, in the marketing from the vendors to the dealers. I'm curious, are you seeing that now from the dealers to the consumers down to the street level? And what do you believe is in our future with those products and categories?
Lee: With Lutron acquiring Ketra and with them essentially "Lutron"-izing it, which means to make something that's of their quality standard and scalable. At the CEDIA show, I come back from the show, and people say, "Hey, what's the best thing you saw?" That's been the most impressive thing I have seen by far. It's not completed because we're still furnishing it and doing the A/V stuff, but we've just completed a Ketra showroom here in Bellevue-Seattle area, for those of you that don't know the area. It's exciting. I've seen it obviously in client projects, and I've seen it obviously at trade shows but to have it here and be able to show people, now, once again I don't think there's a ton of consumer knowledge - we're not getting a lot of them asking about it, but you know who's excited about? Is the trades - the interior designers, architects, and builders that are leaning in. They're interested and excited, you can ask Melissa from our office. They're beating down the door and who knows maybe Melissa pop up here with some video of some of that stuff. That space is still in progress, it literally just got carpeted this week. We've already shown it to people and they're super impressed. Now, is it for everybody's budget? No. And is somebody going to put it in every room? No. But it's a glimpse of where the technology is going for sure. Those that want the best, it's impressive what you can do with it.
Ron: I remember vividly this past CEDIA going through the Lutron/Ketra demo, and it was a fantastic demonstration. I can imagine the design community going through something like that and certainly being impressed and finding ways to really perhaps in a superior way highlight their architecture or their design and their spaces through the use of tunable lighting. I'm with you, I agree.
Lee: We went through such a bad phase with LED. To me, I compare it to music. We started compressing our music down to the smallest possible file so that we could get a thousand songs on a little shuffle. Now we've gone the other way all the way back to high-res audio but we did the same thing with lighting. We were like, "Let's save energy." So we came up with these ugly compact fluorescent lights that looked terrible, made you look terrible, made everything look terrible. And then blue and green LEDs, and now, to me, Ketra is the equivalent of high res audio but now there's also a lot of other great products from vendors like W.A.C Lighting, DMF, American and those guys, at different price and performance points. But now we can get some really good looking LED with warm dim and step up into the color change.
Ron: That's a great comparison, by the way, I hadn't thought of that. And so Melissa if you're listening or Jordan, there should be some blog content for my client. That was good stuff right there. It was a great comparison, great analogy. There are quite a few more comments here so I'm just going to read a few of them to you.
Lee: Melissa's gonna be one of them showing off that Ketra showroom.
Ron: Yeah. Melissa should be posting that reference you made, for sure. But Chris Palmer says, "In all seriousness, Lee is exceptional at what he does. He's been a great leader in ProSource, a great friend and mentor. As the line between high voltage and low voltage continues to blur, Lee's intuition in having both businesses already solidified will continue to pay dividends." There you have a believer in your philosophies. Then we have a question here actually from Jordan. He says, "One thing that stands out to me about Wipliance is how it has locations in both Washington and Arizona. I'm curious to know how that happened and what Lee sees as the biggest challenges of trying to grow his business in two different locations that are not close to each?" Obviously, that's not a car drive away. You're jumping on an airplane to go to a different market. That's an interesting question. You are operating in Arizona and Seattle. How did you decide to do that?
Lee: Jordan that's a great question. And once again I just think, I know Ron - you and I have talked about this kind of stuff before, it's like the stuff on how a company gets started or how close to the edge it gets at one point or some of those things. I mean people really love to hear those stories right. That could certainly be a story that's magnificent about the opportunity in the Arizona market and the growth in the valley and all those things. Or there's this one that is, we had a lot of clients down there - because if you're from Seattle and you have the kind of weather that I'm looking at outside which is cloudy and overcast, expected rains.
Ron: Scottsdale's a nice place to be.
Lee: Yeah. Scottsdale, Arizona area is a great place to be with 300 days of sun. So if clients can afford a second home, it's either going to be a mountain home or it's going to be a sunshine home, and if it's sunshine and you're traveling from Seattle, like you guys on the East Coast it's going to be Florida or the Bahamas or something like that - South Carolina maybe. Here in Washington, it's going to be Palm Springs or Scottsdale, Arizona - it could be California if you have another business or another reason to be there. We were already going down there to take care of clients' homes and projects that were from up here.
Ron: Is that a common vacation spot? The tech industry or whoever lives in Seattle that often buy a second home down in the Scottsdale market?
Lee: Absolutely. We have a lot of clients that have homes there, homes in Palm Springs, and in California. When you have that relationship with the client and they trust you, they would rather just bring you down to do the same thing in their new home or property down there to manage and take care of it all. And because of my car audio background, a lot of the car audio manufacturers are there and so from going there in the '80s, I just remember having this crappy weather in Seattle and you'd have this amazing predictable sunshine down in Arizona. And so the question is, "How can I spend some more time down there?" We would do client products down there and then builders would say, "Hey if you were here more I'd use you more.".
Ron: One thing grew to another and now you're operating in two markets.
Lee: Part of the challenge is, for clients going to enjoy their second home it's a two hour and 15-minute flight, that part is it is easy. Where some people would expect us to grow out of somewhere like Portland. Which would be an adjacent market to Seattle. Going down to the desert definitely has its challenges and starting in a new market to do business where you just kind of have just a handful of existing clients and relationships. It's tough to build something from scratch like that in another market. I know there's a bunch of east coast dealers that have businesses that are in Florida for the same reason. But it has its challenges, opening a second location plus logistics. It's a big learning curve. To build something from scratch is both exciting in the same way that when we started Wipliance 14 years ago it was like, you're in the trenches scrapping for every piece. To go do that in a new market is both exciting and exhausting at the same time.
Ron: Yeah it's hand-to-hand combat.
Lee: It's going to be like when you open your West Coast operation.
Ron: Well, fortunately, I moved in 2015 to virtual. I have people in L.A, Colorado, you name it. We're now at 41 people and they all work from home offices. I guess in that respect I have 41 offices.
Lee: There you go.
Ron: Funny comment here from the one and only Marc Fisher, he says "Lee Travis is paying Chris Palmer now." I think they just like each other, Marc. I think that's what it is.
Lee: Chris is fantastic and a fellow member of ProSource. I know Bobby was on there earlier and ProSource is a buying group that on the surface gives us buying power as you know, $20 billion in combined buying power. But what it really is, is its relationships with guys like you and guys like Marc, Bobby, Chris that have been in there so far but really made up of the best dealers around the country. I'm on committees and that kind of stuff to give back because it's really those relationships with these guys and gals where you go there and learn and can ask questions from other dealers in other markets or dealers in adjacent markets.
Ron: There's about, approximately a thousand dealers in some groups. Which means there's depending on who you talk to North of ten thousand that are not in any group. What would you say to those not in a group about why they should be in ProSource or in some other group?
Lee: What are you doing?!
Ron: What are you doing, man?!
Lee: I just... Not everybody can become a Pro Source member. You have to apply and you have to have a real business that takes care of real clients that do quality work. So that part gets vetted, but if you can join Pro Source and obviously there are other buying groups out there, we just spent a bunch time to really interview and decide which group we want to be part of. I think we've been members for 10 of those 14 years but then I just kicked myself for not joining earlier because the buying power that you get makes us competitive with big-box retailers. So for our customers that the advantage, is that on a TV we're the same prices as Best Buy is. That buying power makes us competitive. But that's not even the most important thing. The things I learned from the other dealers and those manufacturers who come with other relationships, putting the relationships together. I mean that's where I met you through. And so you know as a group you know we find solutions and put something together on a scale that I could not individually. But at the end of the day, the single most important benefit would be the relationships and the things that I learned from the other members.
Ron: Believe it or not, we've been recording for almost 40 minutes. I still have so many questions I want to ask you here on the show. I'm going to try to knock through some of these.
Lee: Speed round!
Ron: Just in my last show, show #99 - I interviewed Caesar and he's our EOS Traction implementer coach here at One Firefly. We did a little session on Traction which is the process and the operating system that we are now implementing here at One Firefly to try to be a better business. And just in riffing with you before we went live, I didn't know this, you're interacting with EOS Traction in some way? What's your experience there?
Lee: We are. I didn't realize how many other people were doing it, Leon - they've been doing it for six or seven years. Until we talked earlier, I didn't know you guys were doing it. EOS is an Entrepreneurs Operating System. But as your company grows, we have these growing pains, whether they be from having three companies or two locations or just growth and scale, you have growing pains right. What's the medicine you take for that? I think you have to be open and willing to learn. We had our leadership team read the book over the holidays then we got together as a team and said: "Hey do we think this is something that will make a difference in our business talking about these things implementing these things?" It's made a huge difference just since the first of the year in metrics and KPI's that we're beginning to just start to measure and see what's happening with those things. Being honest to ourselves, because you can obviously speak for yourself, but you read that book and you're like "Oh my gosh we have all these problems." And then you read the second half of the book and you're like "Oh my gosh everybody has lots of problems." I mean I know people that work for Fortune 100 companies and when I hear about some of the stuff that goes on you're thinking you wouldn't think that happened to the Fortune 100 company. You just realize that all companies have issues and they stem from humans more than likely and growing pains. The nice thing is it gives you a plan and a method on how to begin that improvement and that there's no expectation that you're going to get all those things perfected overnight. For us, we've hit different ceilings along the way and we're building for the future.
Ron: In the EOS Traction world, you can self implement, or you can hire an Implementation coach. I wasn't so confident in my ability to self implement, so I hired the Implementer that is working with us as we're riding with our training wheels through this process. Did you choose to do the Implementer coach, or are you self implementing?
Lee: We have had great success so far self-implementing at our meetings along the way. Obviously book talks about setting up two days where your whole team goes offsite. We weren't able to do that. So we've had you know six four-hour meetings away from the office that we have a moderator set that's cracking the whip to make sure we stay on time on schedule. And so far we've had good success with that. So I guess I would liken that to the gym membership. There's two approaches, one that hires a trainer because they know that they're not going to be disciplined enough to do it and then there's the next one that gets accountability partners. Everyone in our group is holding everyone else accountable, there's six of us on the leadership team that is driving these things forward.
Ron: Are you holding your L10 meetings every week?
Lee: We are yep.
Ron: How are you digging the L10 meeting? Not geek out too much.
Lee: They're not done in 90 minutes yet. Because we were able to have a two-day off-site meeting, initially, we did these four-hour meetings, so we're still having those until we get to a point we feel like we can get that done. And as you know from your business, it's one of those things that you feel like you don't have time for but then once you start doing it like we don't have time not to.
Ron: I mean, you and I talked to lots of business owners in many different capacities. I think the most powerful thing I've learned over the years is the older I get, I realize the less I know. I realize there's just so much power in stepping away from the business and working on the business as opposed to just being busy. It's very easy to be busy.
Lee: Very easy and it's different to work on the business than in the business. And so your mind tells yourself you don't have the time. You can say you don't have time to go to the gym either. But then when you go, and you start seeing those improvements, which is where we're at today, you're like, we're sticking with this gym thing.
Ron: No, I dig it. All right I'm going to go back, I'm changing topics totally so my audience is going to go what is he doing. All right 5G is clearly on the horizon and it's clearly going to affect us in some way. Melissa even tried to keep me on track here and posted this question, "How do you feel about 5G?" Thank you Melissa. I appreciate that.
Lee: That sounds like her keeping me on track all the time.
Ron: Yeah well she helps us both so we're sharing in that in that attention and I'm an even further geek out. So I'm a T-Mobile phone user that's my phone company I just got my new iPhone eleven and on the T-Mobile website they now have Bill Nye the Science Guy educating on 5G and even the different types of five geeks or short wave, medium wave, long wave. Lots of different ramifications in terms of the reach of that signal into the home. This is clearly going to disrupt our industry in many ways, I would think. What is your kind of vision of how that's going to happen?
Lee: So disclaimer I'm by no means a 5G expert. I mean, I've definitely checked it out at CES and some other seminars and what manufacturers are working on behind the scenes. Its standards are just being set, but when you see what its capability is that you know today, everything we do requires a hub or a process or whether that's your home network. And obviously, as we said earlier, I mean that's the exciting part about this industry is that it's always changing. To stay with it, you've got to be paddling out that front edge of the wave, which can both be scary and exhilarating, and that's a part that I love about. As you get into it and look at it further away, you're like wait. We weren't even doing networks 10 years ago. Now it's one of the single most important things the reliability of our system is that network backbone. You know that from owning a business, in your office, if your network goes down everything down.
Ron: There's no Automation Unplugged!
Lee: There's nothing. Yeah. With 5G, to communicate device to device. And I know you know horizon AT&T holds the most amount of licenses followed by Dish, followed by the new combined T-Mobile + Sprint. That will tell you the kind of multi-billion dollar investments these companies have made in licenses. For that motion detector to be able to talk to that keypad to talk to that network device sensor to talk to this computer without having to have a hub in between talking to another hub is basically translating English to German, German to French, French to Spanish and so forth. We have all these devices in between to basically translate once everything's on one central platform and can communicate 5G to 5G, I think it's going to explode with the market. The question is, will the market be ready? Will the dealers be ready? How will that roll out? What will vendors develop? It's definitely going to change the market and provide an opportunity for some and lose others which is kind of how this industry has gone over time.
Ron: Do you think we'll see it talked about more? There's the buying group show season here over the next couple of months, and then of course down in September, we'll have CEDIA. Do you think we're going to start to see this being talked about in vendor booths? Or is it still too early?
Lee: I think it's still too early. This is three years away before we start seeing devices in our industry, I think probably so but I'm not an expert. And real full implementation can be 5 to 10 years. I mean if you look at how long it took to go to HD and took to go to 4K and some of these other technologies. That requires not just our stuff but requires multiple parties and standardization of platforms. I just think it's a future opportunity that scales out our business to a larger market. I think that's the opportunity and I think it will be exciting both for dealers and for consumers. And it has huge implementation obviously outside of our industry in terms of safety, car to car communication and car to cell phone communication.
Ron: Am I remembering correctly that there's some talk that changes the role of the network in the home? To the example you gave a moment ago where at the moment every IoT device in your house with an IP address needs to go through the hub or the net with a local network switch or network in your house and then get reported up. Is it with 5G that now we're talking about every device potentially just directly through that high-speed high bandwidth link reporting to cloud-based processors? Does it change the architecture of the network in the home or is it yet to be seen.
Lee: I'm going to say yes to both. For sure it will change the architecture just in its communication but I do think there's going to be other questions like security. Today you use your network as a firewall and it's security equal for your business and for your home. How all these devices remain secure? That's one of our client's most important questions these days is about security. Like it's great to have these cameras level to do the stuff but how do we keep all this stuff secure?
Ron: How to keep it safe. All right I'm gonna switch topics one more time. When you and I met each other a number of years ago now what I discovered in your business and in your brand is this strong affinity and appreciation A) for marketing but video, the use of video in your storytelling as you're talking about your business, your brand, your offering. Where did that come from? The videos, I had nothing to do with this. This is all you and your team producing just fantastic content, representing deployments of technology both commercial and residential. Where did you learn to do that or know to do that?
Lee: Well, I mean is you know from this industry and everything that you do from a marketing standpoint, you can certainly tell a story and then if a picture is worth a thousand words, then a video is worth a million words. I mean today if you look at I mean, even our discussion about podcasts. You can drive down the road or run or walk your dog, in your case, and listen to and consume content for the curious mind. There's a ton of content, whether it's binge-watching TV shows or ads or whatever that is video. Instead of telling them the message, you can show the message. We just thought the video was the future frontier of communication with people.
Ron: Why do you think more of our industry doesn't utilize video?
Lee: Because it's not easy.
Ron: Tell us about it. How do you do it? How do you do what you do? I know it's hard.
Lee: It's just like when you launch this show, it wasn't easy, and it takes time. And you just determine that over time that's going to pay off, same thing for us with video. Most dealers, as you know, don't even take pictures of projects. I'm sure when you're putting their marketing stuff together, you're like "All right. Let us know what you have for pictures," and you're helping to supplement.
Ron: Usually met with silence after we ask for that content. Like, "Are you still there? Hello?" "No, Ron, we'll just use your stuff, or we'll use the vendor's stuff." That's usually the response.
Lee: And everybody's busy right. You're going from one job to the next job and getting your customer taken care of, but taking time to stop and take a photo and then video, though it's a much stronger message. As you know, from doing this show live, it's also more work to shoot a video because you have to say, "What is it we're shooting? What's the message of the content editing?" We've got a great team, from Melissa, who chimed in earlier. We've used some different video people, but we've landed on somebody who helps out. And the video also is not inexpensive. We just try to kind of find that peak of the value curve in terms of capturing the video, some of it can be done over the phone, but most of the stuff we try to do is professional. We were having a meeting yesterday we got six or seven things in the can already that need editing or need some more shots or whatever and so you just sort of push forward to get those things complete. But that's a great business card for us to put out there and send the video because most other people don't have it. And the customer we can talk to them for two hours, and they can watch a couple of minute videos, and they get it.
Ron: At a high level because I'm just mindful of the time and I know that we're going to quickly go over time -
Lee: Is that normal?
Ron: It's not normal but there's a lot of fun things for us to talk about. I appreciate you spending time with me and my audience—two quick things. As you enter 2020 when you're working with your leadership team, how do you think about the budgeting of developing your forecast for 2020 in terms of revenue and expenses? And I want to zero down to that expense line item called marketing. How do you think about what type of money, not what are you going to do or not who you're going to spend it with, but how do you define or think about correlating budgets for expenses like marketing based on the outcomes that you hope to achieve in that year? Is there a system to it or is it less sophisticated than that?
Lee: I'd say you if I take us back to the previous recession that we talked about a minute ago, is that we're gonna have another recessionary period. Is it this year with the election, is it next year? But historically we're doomed. Even with the recent stock market you know thousand point drop we're still extremely high. Real estate is extremely up. It's not if, it's when. What we learned last time is that by investing in marketing early, and as you may or may not see from your clients, it's hard to get them to even invest in marketing. Because in this industry, if you're good and you've got some client relationships and some build the relationships, you're like "Hey, we're busy what do I need any marketing for?" The reasons you need marketing is what if the market changed and you weren't busy? Or what if you want to grow your business from $1 million to $2 million, $2 million to $4 million or $6 million. You're much more knowledgeable in this space than I am, but companies that market, market to either grow their business, to gain market share, or to keep from losing market share. Dealers in our space, because it's so trade and skill dependent, not everyone has to market. People might be comfortable and they might be fine. We grew every year during the recession period but we marketed every year during the recession period and we marketed before the recession period and we marketed after the recessionary period.
Ron: How did you know to do that? Because when you read the textbooks, that is the right thing to do. It's also the opposite of the knee jerk reaction most small business owners have when conditions around them become scary, they will often go, "All right let's huddle up. What can we cut?" And marketing and a few other categories are often things that are easy to slash. What you practiced back in '09, '10, '11, and '12, that was before you and I met - maybe a decade before we met. How did you know to do that? Had you read the right book? Had you surrounded yourself with the right advisors or mentors that helped you understand that? Or was it just your common sense?
Lee: Well, like you, I consume a lot of knowledge because I'm curious and hungry. Whether that's books, magazines, seminars, I don't know how many original thoughts I've had. They're all combinations of things that I've learned from thought leaders like yourself or other people in the industry or marketing events. Coming from the car audio background, which is retail, you have to market in that space to get people. Now not to date myself but those were YellowPage ads, newspaper ads. We did events back then, we did car audio competition events and intense sales and all sorts of creative ways to try to kind of drive business. I would just say it's just from years of hard knocks of books with thought leaders to come up with what those things are. And then as you know some marketing is trial and error. It's different in each space, it's different in each market.
Ron: Everything does not work for everybody. If it was that simple, everybody would have magical perfect marketing.
Lee: And if you're like "Hey what's the 80/20 split on this?" Like I want to put all my money into the 20% of marketing that actually works, the problem is even today with online and lead sourcing, it's hard to tell exactly what that 20% of your budget is. Some things are really clear and obvious like this brought us these leads and is really clearly working but some of the other stuff is just is about long term seed planting. Just because you're full from dinner doesn't mean you don't sow seeds in your field. Those seeds are for tomorrow and next month the next crop and next.
Ron: Melissa, are you listening? That was a good one. Grab that one. I see that on an Instagram post that was quotable.
Lee: It's about sowing seed over a long period of time to grow. And it's hard to have a steady hand when you want to cut that line out and that can be hard to say "Gosh, should we keep doing this?" And then obviously, you've got to look for that feedback loop and see what's working what's not working and some of it is just trying new things. We're changing some of the event formats this year to try some new and different things with some vendor only events. Where in the past we've done these evening of technologies that would include all of our vendors. We're trying some new and different things. We're not wearing Yellow Page ads anymore is what I'm saying.
Ron: I know that I want to have you back on to talk about your event-based marketing. I mean, our agency doesn't currently operate in that domain. Still, I think event-based marketing is one of the best types or forms of marketing our channel could do as it relates to interacting with your customer's prospects in the design community.
Lee: Jordan, you may want to write that down.
Ron: Yeah, Jordan make that happen! I do want to close on this, Lee. I want to congratulate you on winning the CTA Integrator of the Year back in 2019. That was a year ago. What did that mean to you when you won that? I think Sean out of Colorado is the most recent winner, I think he even called you out on stage if I remember Sean's speech.
Lee: He did. First of all, thank you for thanking us. And second of all that was so last year.
Ron: I just want to know, what did that mean to you to win that? And then the last question to tie in that is for those are folks are listening that are trying to grow their business, I'd love if you'd offer seed or two of wisdom of things they should maybe focus on that would help them grow. To be Integrator of the Year in a national global organization, I mean that's not a small thing.
Lee: First of all, after going to 34, last year was 33 consecutive Consumer Electronic Shows, to win an award like that from the CTA was very humbling.
Ron: Was it an award for going to the most shows in a row?
Lee: It was not. There are actually some people that are up in the 40+ year-range, though I'm getting up there, it's going to take maybe another decade for me to knock some of those people out. But it was very humbling to do that. We have a fantastic team, that's really the secret behind our success. Sean, who is my hero, did try to throw some embarrassment and shame on stage but we built a great friendship over the years and he's another Pro Source relationship. Lance Anderson from Admit One, their company is probably the most award-winning that I know. He's always like, "Dude, you got any of these awards. You don't enter, you're not going to win." And it's one of those things, like your marketing that you put effort into, you can't correlate, "Oh this lead from that award," but when you visit Lance out of their showroom or you see their stuff, you're like "Wow these guys are the bomb.".
Ron: I was just watching Lance on Facebook this morning, scrolling through my news feed and he had a video talking about something but I found myself two minutes in watching his full video, it's funny.
Lee: Yes. That's them doing that scene planting. Obviously you've got to do good work to go submit to go get good awards.
Ron: Is that your advice for those listening is to enter to win? I mean if you want to win you got to play.
Lee: For sure about it, but I mean it's part of the marketing thing overall. You really got to have a strategy, have someone that can help you put that strategy together, and be working on all these things. It's not just the videos, and it's not just the events, both of those I think are two great things. Take a video of your work. I've seen some great stuff out there just now technicians cell phones or other dealers doing live shots. A lot of people are nervous about doing it.
Ron: Pro tip here, actually it's an amateur tip, but the new iPhone 11 shoots 4K, 60 frames a second video. Check it out on YouTube. It shoots a gorgeous video. The video off this phone would be better than what currently exists in most integrators' portfolios for video content.
Lee: That's a low-cost way to get into it.
Ron: Well, Lee, it was an absolute pleasure, sir, having you on episode 100. This was a big deal, it was a long time and a lot of hard work getting here I've got to thank my team. I've got a lot of people working behind the scenes, I'll call out Stephanie, Allison, Elizabeth, John, and Kendall - they all have a role in these shows. Ultimately from getting guests onto the show to getting the interviews done to getting post-production done to getting it out on social media to getting it up on the website, getting the transcripts done, interacting with the audio engineers. There's a lot of work that happens to get this done every week. And so I want to give them a shout out. I want to give you a shout out for being our special guest here on show #100.
Lee: Well thank you for having us on. I'll do a shout out to Melissa, our marketing manager, who works with your team all the time. And on your team, Jordan and Kendall. They absolutely kick butt for us.
Ron: Well, my friend, I appreciate you!
Lee: To #100!
Ron: To 100!
Thought leader and innovator in the Custom Integration industry, Lee Travis of Wipliance, brings a unique perspective as an owner of two locations in different markets along with his experience with ProSource buying group and Tech Summits!
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 within 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.
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