Adam Torres and Mike Malloy discuss fractional executives.
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Show Notes:
Malloy Industries gives overworked CEOs more time, money, and sales by confidently delegating to a trusted fractional executive. In this episode, Adam Torres and Mike Malloy, Founder, CEO & Trusted Advisor at Malloy Industries, explore Mike’s entrepreneurial journey and the benefits of working with fractional executives.
About Mike Malloy
Started at the #1 place to launch my career in 2008, Deloitte, which helped him earn his M.S. in computer science and play ultimate frisbee at Georgetown. He took the atypical career path to become a traveling sunglasses salesman and social enterprise CEO at Waveborn Sunglasses.
After 5 years, lots of lessons learned, and $500,000+ raised from 27 investors, He filed for business and personal bankruptcy, bounced back as the Program Director for 5 years at the Halcyon Incubator advising, coaching, and making connections for the next generation of social enterprise CEOs. Then, during a small global pandemic you may have heard about, he migrated to the beach in DE with my wife. they added a Chief Cuteness Office to their team and have no plans to leave the beach.4 companies that advised pitched on Shark Tank. 3 got a deal. The 4th is worth more than $500M. Full-time employees are not the solution anymore. make smarter investments by contracting 100% of an expert’s skill set for the time you need, NOT recruiting, interviewing, hiring, and paying a full-time salary with benefits. That’s why HE built Malloy Industries with 200+ fractional executives to help B2B SaaS CEOs scale their business from $2M to $20M. Our 75+ clients have collaborated with vetted fractional executives to achieve business objectives, reach investor milestones, and save their only non-renewable resource: TIME. he served as an Entrepreneur-in-Residence and Adjunct Professor at Georgetown University, where he received the 2022 Outstanding Entrepreneurship Faculty Award for leading the Georgetown Startup Interns (GSI) program and teaching undergrad and grad students how to not suck as interns. He have 100+ students looking for internships year-round….
Full Unedited Transcript
Hey, I like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to missionmatters. com and click on be our guest to apply. All right. So today I have Mike Malloy on the line, and he is the founder, CEO, and a trusted advisor over at Malloy Industries.
Mike, welcome to the show. Thanks, Adam. I’m excited to be here and looking forward to a great conversation and perhaps sprinkling in a couple of dad jokes along the way. Adam, before we, before we get started, my friend, let me ask you what did the sushi say to the bumblebee? I don’t know. What did he say?
Wasabi. Oh, I’m in for wasabi all day, and I’m gonna, I’m gonna take that one. , I’m like, that’s gonna be a, that’s gonna be a tweet in a little while , I’m gonna, and I’ll cc and I’ll tag you. . Love it, Mike. Well, let’s. Just to get us kicked off here. One of the things that we do at Mission Matters and our goal and our aim is to amplify stories.
I mean, that’s our mission. That’s why we do what we do as a company. So on your end, Mike what mission matters to you? Why do you do what you do? That’s a great question. I do it for my son our two and a half year old chief cubeness officer, Matt. And, you know, he’s the why behind a lot of the work we’re doing and impact we’re trying to make here at Malloy Industries.
Amazing. Have you always been an entrepreneur? Like, like, the, I see the term founder. Is that always been in your DNA? It has, you know, I have previous experience as a Deloitte consultant Deloitte was kind of enough to pay for me to go to Georgetown. I got my master’s in computer science and follow the typical career path to traveling sunglasses salesman and CEO of a social enterprise sunglass company.
So from 25 to 30, I ran away, born sunglasses. And then I spent five years running the incubator. As a program director in DC, supporting other early stage entrepreneurs before taking another entrepreneurial leap and starting Malloy Industries about three and a half years ago. Wow, that’s, that’s amazing.
How did you know that Malawi Industries, like, that this was going to be something you’d spend some time on and that this was going to be a big focus of yours? Like, normally when an entrepreneur, when they’re looking at their next venture, their next business, like there’s one way or another, I like to say that it sucked them in.
How’d you get sucked in? Yeah Adam, you and the listeners may not have heard of it, but there was this small global pandemic a few years ago that kind of changed work and life as we know it. And so during that time, my wife and I left to T. C. where we’ve been living for about a decade and moved to the beach in Delaware.
And so really a forcing function to take this leap was the return to work. And I didn’t want to go back to the city and was pretty confident in my skills. my knowledge, my network that I could figure it out. I will say quitting my job at 25 and single to go run a sunglass company, the beach was different than being 34 and married and the commitment that come with that.
But I was very optimistic and now I’m all in that the future of work is fractional and company companies and other entrepreneurs, especially B2B CEOs can build amazing companies and grow their teams without Just hiring full time employees, you know, but oftentimes bringing in somebody who has 20, 30 years of experience for 123 days a week to lead your sales team, your marketing, your HR, your operations is a great alternative to, you know, what’s traditionally been a six figure salary and benefits and all the overhead that goes with full time employees.
Yeah. Talk to me about how you stumbled upon the fractional model. Like where’d that come from for you? Yeah. So when I in April of 2021, I kind of put in my notice at the housing incubator and that summer it was Mike Malloy was Malloy industries. It’s kind of the single handle. You know, Hey, I can help with sales, marketing, some fundraising, consulting and realize that I really enjoyed it.
It was lucrative and well, to be honest with you, Adam, life threw me a curve ball and in September that year, my mom passed away and the same week my mom passed my wife found out she was pregnant with our first son and a lot of feelings and circle of life. And I grieved it was with my dad and I, you know, as I got back to work in October, I realized that I had made 0.
In September and I was fine for a month, but if my son was coming around Cinco de Mayo and I want to take paternity leave and wanted to be an active in his upbringing, you know, I needed a way to make money. That wasn’t just Mike’s billable hours. So that put me on the path of customer discovery. And this point I’ve done over 500 customer discovery interviews with.
Founders with investors with fractional executives to kind of understand where, when, how, why fractionals make sense for different stages of businesses and different functions. What’s the budget you know, is available at those different stages. You know, if they raise their seat around on their way to the series a or they bootstrapped, you know, I will say it’s, it’s not a good fit for like an idea stage back of the napkin.
Okay. Thing, but if you’ve got over a million in revenue and or funding, it’s a phenomenal strategy and a great way to allocate part of those budget line items to get the expertise and only pay for the expertise you need without all the overhead. Yeah, I’m a, I’m a huge fan of fractional work and fractional executives and one of the, one of my best friends.
It’s because I’ve found that even and nothing against having, you know, full time employee and a full time person in your, company for this. And there’s a lot of benefits, pros and cons. But for me, it’s always the learning side of things. Like anybody that I’ve ever hired on a fractional side, you know, there You can somebody can learn when they’re within your company, but then that’s kind of, that kind of becomes their echo chamber is your company and what you’re doing, but when you have a fractional executive that’s working, maybe even across industries or across other things, there’s just this.
I don’t know. There’s probably a real business term for it. I just say soft value, whatever the real business term is. Somebody emailed it to me, or if you know what Mike say it, I don’t know. But, but like this soft value that comes and these ideas that come from crossing different industries and different, even sizes of businesses and learnings.
I mean, I don’t like there’s, that’s not even in the billable hour, really. That’s just the person you’re getting. If you’re getting somebody great, am I off on this? Like, is this something I just know? You’re absolutely right. Yeah, you’re absolutely right. And I think that’s part of the magic is it’s both historically, you know, what types of clients and industries have they worked with throughout the career?
And then even in that moment, like who are your active clients? Like I met her today with a real estate technology company that needs help with marketing. You know, I’m also, you know, FinTech company on the marketing side. We’re working with. Several different B to B SAS companies across health care and education and finance as well as a medical device company.
A couple of different marketplace clients where you’re actually a marketplace as well. Kind of matching fractional executives with entrepreneurs who need them and I have found it’s been so helpful taking lessons learned and ideas and. Patterns from one client or industry and applying them elsewhere.
Like that’s where there’s a lot of value. Yeah, we have one client we’re working with on kind of the operations and marketing side. And, you know, they told us they built a tiger team and I was like, oh, tiger team. It’s kind of like a group of you know, cross functional specialists. There’s a little reference to Apollo 13 there.
I have told multiple other clients in the past 2 weeks. Okay, I think I did a tiger team. You know, I want you to look at the fractional, but the other people on the team, like, let’s get some people so it’s not just sales in a silo or just marketing in a silo or just operations, but bring them together and like, hey, they’re kind of the advocates representing each department and also bringing back the ideas when it’s to be done to that function within the organization.
Now, on my end, I mean, I’ve been preaching about fractional for at least, I don’t know, maybe 10 years now, and I don’t even know if we called it fractional back then. It was just more consultants or something else. I don’t know if I was calling it fractional, it might’ve just been like hiring a consultant.
But now I think the fractional space and some of the benefits, like we’ve had many conversations on it. I’m curious, cause this is your world at this point in this stage in the game, like post pandemic, like why do you get pushback? Like if you’re on a sales or this or that, and you’re talking about you’re on the benefits side, cause it seems so obvious to me.
When do you get pushed back? Yeah, I think there is a level of like educational marketing that needs to take place. If someone has never worked with a fractional, yeah, like if they’ve only ever had full time employees, if they’re always in the office, although I don’t know if any clients where everybody’s always in the office, but the people who are always in the office are the ones that don’t work with us.
You know, like, if you’re like, everyone must be here, I must look over your shoulder and make sure you do your TPS reports. Like that’s also like not a good culture for us, you know, Mike, you promise. Good job. And then I think there is a level of sometimes just understanding the budget and like, yes, on an hourly rate, a fractional executive is more expensive than like a mid level manager.
But you’re also not paying them 40 hours a week. You’re usually paying them 5, 10, 20 hours a week. And you have the flexibility on a month to month basis to say, Hey, you know, month one, yeah, let’s do it at 10K. I want you to dive in and really get started here. But then let’s just see if we can do, you know, 8K, maybe 5K over the holidays.
And work with them. And hey, cash is really tight, actually. Let’s drop this down to, you know, halftime for the next couple of months. We’re expecting some big deals to close or funding to come in. And then, yeah, we’ll ramp it back up. All right. You can’t really do that with a full time employee who like, yeah, this is their W2.
This is how they pay their rent and provide for their family. You know, , that isn’t an option. The, the other reason why is like some entrepreneurs just have a hard time like delegating. Like letting go, like there’s a, Oh, I must own and touch everything. And you know, everything flows through me.
And along with fractional executives, I also do some CEO coaching. And in those coaching conversations, we talk a lot about how to delegate and automate their business so that they can reclaim their freedom in time. And don’t have to be the linchpin for everything and could pass the Fiji test where if, you know, Adam shows up on your doorstep and says, Hey, I got these tickets to go to Fiji.
You can come, but you can’t bring your laptop or your cell phone for 2 weeks. Like, would your business explode or would it kind of be even keel or would it even grow? Like the goal for everybody, myself included is like, Hey, I could take 2 weeks off and the business would be in even better shape when I got back.
It’s hard to get there. And there’s kind of step that we help our clients to be more comfortable taking that time off because that could be terrifying for some of your listeners. Why take two weeks off and not even check email? Like, No way. Man, Mike, I’ll tell you one thing, they’d be shipping me podcast mics to Fiji, that other, their co founder Shiraj, he’s on it, he’ll be like, you’re going to Fiji?
Great. What hotel I get there, they’d have a whole podcast set up and a whole nother room set up for me. Like, okay, don’t check email, but take this call, man. I love it. I love it. Oh, they’re harsh. Oh, sorry. They won’t hear this episode. It’s fine.
Oh, man. Like, that’s, that’s great. I love it too. Because but you answered my question. So it still is the education piece with piece, which is fair. I mean, when somebody like, it doesn’t matter what they’re doing, if they’re going from, you know, , they’re getting off of spreadsheets and getting into like, digitization, if they’re getting into a new marketing game, if they’re getting into something else, it’s still fair.
Then you know, , that’s fair. But I feel like after they’ve done it once and if they work with the right company and the right thing, you can’t unknow what, you know, there’s gotta be this moment on the other side of like, where you get like a, like they started and , , they dipped their toe in the water with you.
And they’re like, Hey, I’m curious, can you do this too? Or do you have a person that is that kind of the journey? Absolutely, Adam, and you nailed it with the dip your toe in the water, because we have a client started working with at the beginning of this month, and we had a call yesterday and he literally said, you know, I know when we started at the beginning of the month, like, we were dipping our toe in the water, he’s like, I’m diving all in, man, now, because I also need we started with an operations project and then we brought in an HR person who just started this week, and he’s like, alright, I need another operations architect.
And I also need this marketing person to start tomorrow on, you know, I think next year we’re gonna need some help on the technology side as well with our product road map. And it’s just, Hey, I’m calling Mike and like, we now have a weekly recurring meeting. We’re just checking in. Hey, how’s it going with the current stuff?
Okay. What’s the next thing you need help with? Because we’re the guys, you know, and being that trusted advisor and it’s kind of why that’s, that’s in my title, like you call Mike and we just talk about the problems you’re dealing with. You know, my number one question is what’s your most expensive problem you’re trying to solve right now.
And it’s expensive. It means it’s taking up your resources. There’s five resources, time, attention, money, energy, and effort. And it’s a spectrum of how much of each of those it’s taken. If it’s taking a lot of resources, it also means there should be some budget allocated to solve it. And in many cases, if you can throw money at a problem, you can solve it.
If you can throw really smart fractional executives at a problem, you can solve it. And that creates time and space for the founder, the CEO, you know, to be able to focus on the other parts of the business that need their attention. Now, obviously you’re on my show. So I want everybody to call you, that’s a given, but that being said, just in general, especially for those that are still in that education, you know, onboarding kind of thing.
And they’re just , getting there. How did they know if they’re working with the right, like fractional company? Like what are some warning signs of, if it’s a not. Maybe the best company or even like, okay, they have great processes. Like this is a company you could look deeper into, especially for those that like to shop around.
Like , , what are some things they should think about? Yeah, great, great question. And I encourage folks to do their diligence both with the company they work with and then the actual fractional. Cause like, I mean, you can post on LinkedIn and be like, Hey, does anybody know somebody for, you know, 10 hours a week, if you help me with this, you’re going to get all sorts of responses with varying levels of quality.
And so if they’re a stranger on the internet, like do your reference checks, you know, and unless you’re saying a podcast company and they say mission matters, then no reference needed. Just go, go, just contact us. Go ahead. You’re done. Well, and, and what I was going to say, I don’t know, I’ll give you this for the show notes.
It’s like, we have a reference check. Script that we give to entrepreneurs to do reference checks, both for fractional and even for full time hires, to pull out some of those, because typically a reference check is like, oh yeah, they were so great, I love them, you should hire them, like, Really? What is that?
Everybody was there? Yeah. Yeah. That was nobody. And so we had some harder hitting questions. The other thing that we do kind of our three step process for the Malloy match is like, you’ll meet with me for 45 minutes. We’ll scope out the project, understand what your most expensive problem is, what’s the end in mind.
We’re sitting down six months from now. It’s a huge success. We’re celebrating. What are we celebrating? And then how are we going to measure success? What are the key metrics before, during, after context? Who are the other key stakeholders involved? Making sure we get their input on the front end as we scope it out, as well as on the interviewing decision making process and who to work with.
What’s your timeline and budget? When do you want to get started? Is there an end date? Does this go on in perpetuity? You know, our typical project is 10k a month, gets you 40 percent capacity for a fractional sales executive, sales. That’s month one. We can ramp that up or down month two and beyond. And then coming out of that one, we’ll put that into our matchmaking algorithm to recommend three of our 308 fractional executives that we have.
So they’re all vetted that they’ve gone through a process with us. I would say the first 150 or so were people in my network. You know, I’ve been in the D D C Maryland, Virginia startup community for 15 years. I know a lot of people worked at Deloitte, Georgetown, Boston college. As this has grown though, like I’m the fractional executive guy, and believe it or not, you can throw a rock and hit somebody whose neighbor wants to be or is a fractional executive.
And so as friends of friends have come in, we’ve kind of built out a vetting process for them. We have a whole onboarding thing they go through and with the first project we recommend them for, we’re very, very hands on from a customer success standpoint, making sure that that the communication flows through because we’ll scope out the project.
We’ll recommend three. We’ll say, Hey, Adam, here’s your three candidates, Alice, Bob and Charlie. Interview them. Let’s meet again in 7 to 10 days. We can debrief how those interviews went and select who’s going to be the best fit. We’ll finalize the timeline, scope and budget, and you can get started, you know, the next Monday or the Monday after that, because one of the values of these fractional executives is the speed to bringing them in and not having to take the 3 to 6 months to recruit, source, interview, vet, hire onboard, train some full time employees.
And so in the interviewing process, it is largely an interview on culture fit. Interpersonal communication. Do you like their vibe? And is this somebody that you want to work with? And in many cases, if it’s a fractional sales executive, is this someone you would feel comfortable representing your business?
If no, then like, don’t pass go, don’t collect 200. Like, you know, that’s it. If yes, great. Maybe there’s a second meeting. Maybe there’s somebody else in your team that want to interviews them. But what we do in that selections call is, like, make sure that this is the right one. And then it’s a collaborative Google Doc, basically, that we edit the scope of work together to make sure all three parts work together.
Parties, Malloy Industries, the fractional executive and the client know exactly what’s expected. And we have built out an end of week report, the Malloy way which we have all of our fractional executives at the end of every week, email to the client and email to our chief of staff and me. Here’s what I did this week.
Here’s what I’m doing next week. Here’s where I’m stuck and need help from the client. I’m giving you access to a system or training, or you said you would send me that document. I haven’t gotten it yet. And here are upcoming scheduling constraints, like I’m off the whole week for Thanksgiving. Next Tuesday is my kid’s birthday, so I’m taking the day off, you know because what we have found over three and a half years and almost a hundred clients we’ve worked with, the issues arise when communication fails and they’re like, Ma, the meatloaf, what are you doing back there?
They have no idea. Like you know, that is a recipe for failure versus proactive. Here’s what I’m doing here. The key meetings this week, here’s we got in the books next week. And getting that like clockwork creates a much more consistent experience. And then our customer success manager checks in monthly with the fractional monthly with the client.
How’s it going? What can we do more of less of start doing stuff doing and then I come in as a trusted advisor and do quarterly strategic business reviews with all of our clients, focusing a little bit on the past and the service we’ve been doing, but a lot more on the present and future state. Where do you want to go over the next 365 days?
What do you need to accomplish in the next 90 days to feel more pride, confidence, and excitement in your business? Amazing, Mike. Well, this has been a lot of fun. I learned a lot. I think this is going to be a great piece. It’s going to play well with our audience, especially those that are out there that have been considering, you know, the fractional side of things.
things they’ve heard me preaching it for years now but still haven’t dipped their toe in the water. That being said, somebody’s listening or watching this and they want to follow up and they want to learn more about Malloy Industries. How do they do that? Great. Well, one, they have to love dad jokes, which is why I’m going to ask you first, Adam, what did the yoga instructor say to her landlord when he tried to evict her?
Are you flexible? Well, good question. Actually namaste. Oh, that’s even better. Dang. They can find out more at MalloyIndustries. com slash pod p o d And that’s my last name, M A L L O Y, Industries, I N D U S T R I E S dot com slash pod. My email is Mike at mobileindustries. com. You can also connect with me on LinkedIn.
And would love to, to hear from you guys. You made a joke earlier, who did I call? Like, you can call us at 302 212 4424. I’ll pick that up. Would love to hear from any entrepreneurs who are interested in fractional executives. Or dad jokes. We got plenty. We have a whole page on our website and like a daily dad joke newsletter we send out, which is just a little labor of love as well.
Awesome. And for everybody listening, just so you know, we’ll put the links in the show notes, so you could just click on ’em and head right on over. And speaking of the audience, if this is your first time with Mission Matters and you haven’t done it yet, hit that subscribe or follow button. This is a daily show.
Each and every day we’re bringing out you new content, new ideas, new education, and hopefully new insights. along the way in your journey as well. So again, hit that subscribe or follow button and Mike, really appreciate you coming on, man. And thank you for coming on the show. Thanks Adam.