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[00:00:00] Derrick Smith: Don’t quit. It’s hard. I couldn’t do anything else, but there’s high highs. There’s low lows. You feel this weight of responsibility. It can be super frustrating, you just can’t quit. You’ve got to keep persevering, businesses just don’t grow up and to the right.
[00:00:33] Lee Brumbaugh: Welcome everyone to another episode of Sales Against the Odds. My name’s Leigh Brumbaugh, CEO of Sales Xceleration, your host for today. I am joined by Derrick Smith, who I know very well. Derrick is the co-founder of The Firefly Group, associated with Sales Xceleration. He’s also a certified EOS implementer.
[00:00:50] Lee Brumbaugh: With Derrick’s leadership, The Firefly Group has developed the Entrepreneurial Toolkit, which focuses on helping SMB companies grow. So he knows the space very well, and he has a proven track record of helping companies grow, develop, and successfully air, exit. Derrick, thank you so much for joining us today
[00:01:06] Derrick Smith: You’re welcome. Thank you for having me on
[00:01:09] Lee Brumbaugh: as a fellow Hoosier, right, another Indiana guy, You come out of Indiana. What made you get directly into entrepreneurship? Was that always the path that you intended? so tell us about the beginning of how you got on this, this entrepreneurial path.
[00:01:22] Derrick Smith: It wasn’t, but as I look back, I’ve always been an entrepreneur. I was always starting things and doing things, maybe that others didn’t do. I’ve always been a risk-taker. I think back to my childhood and all the stupid things I did that I could have gotten hurt doing, and I just, I think that was all part of this risk-taking, this comfort with risk, this entrepreneurial nature that I was just born with.
[00:01:48] Derrick Smith: but I didn’t plan on that. I actually, always wanted to be like my dad, who was a dentist. for 45 years, and always really looked up to him, and still do to this day, and thought, “I’m gonna be a dentist.” And then I went and shadowed a dentist, and I was like, “This is not me at all.”
[00:02:09] Derrick Smith: Love my dad and, all that he was able to do, for our family through that, but I realized quickly that that’s not what I wanted. And then I just so happened to get an internship with a venture capital firm that was doing healthcare, technology and healthcare software investing. And it was there I realized I was an entrepreneur.
[00:02:32] Derrick Smith: I spent a summer with a team that was entrepreneurial. They were investing and backing entrepreneurs, and I knew it then. And ever since that, I think I was maybe 23 or 24 at that time, I knew that, was God’s calling on my life to start things and own businesses and lead businesses
[00:02:53] Lee Brumbaugh: Yeah, it’s a great story, Derrick. it’s interesting of how we, my family was in the oil and gas space and it was early on and like, “That’ll be the path.” And then you, you get there and you realize, wait, maybe that’s not the path for me. I was, I was healthcare as well, as you know. So, as you go through this path, Firefly Group, talk to me a little bit about, the history of it.
[00:03:10] Lee Brumbaugh: how did Firefly come together? And talk to the audience about what Firefly kind of stands for.
[00:03:16] Derrick Smith: it was 2013. I had just gotten married, and I was working for that venture capital firm. and I started to get restless. I worked for a great team, just great people, but I knew I wanted to start something on my own. And so I was just searching, I was scaring my wife to death.
[00:03:33] Derrick Smith: We just got married, and I started talking about maybe leaving my job and starting a business, but I didn’t know what. right around that time, I met David Mann. And David, is a fellow Hoosier, co-founder of Firefly, as you know. And, he was in a season of transitioning out of doing venture capital, and he was looking to buy family businesses with a former classmate of his, which was Mark Snyder, our third, partner at Firefly.
[00:04:04] Derrick Smith: And so I was just talking with David, getting to know him, and talking to him about, “You know, I’d really like to buy a family business.” There’s so many good family businesses around Indiana with- without good succession plans and, with children maybe not wanting to take the business over. And he’s like, my former business, school classmate and I are doing that.
[00:04:28] Derrick Smith: We’re looking for businesses.” And so I, uh, eventually left the venture capital firm. It was just transitioned out. It was a really, good win for everybody. And I got out on the road and started looking for businesses to buy on my own. I was gonna raise the capital and then run the business, and David and Mark were doing the same thing but separately.
[00:04:49] Derrick Smith: David and I stayed in touch. We would meet probably every week or two. And then, several months went by, and David had a vision to kind of bring it all together and form, Firefly Group 2.0. Uh, it started out with he and Mark, and then, I joined, and then a fourth partner, Drew McHouston, joined as well.
[00:05:09] Derrick Smith: And we were always looking at deals together, but we didn’t formalize it until a few years after, we all started searching, separately. that’s how Firefly came to be. What does Firefly stand w- for? The reason why we all came together is because we shared a common set of core values, and we had a mission that was similar.
[00:05:29] Derrick Smith: And we wanted to buy companies and grow companies, but it wasn’t to, build our own, reputation. It wasn’t about building our own fortune or anything like that. It was always about What was God’s calling in our life, and how could we make the biggest impact on people’s lives? And we just felt like buying businesses, owning those, and, and leading them well was our path.
[00:06:00] Derrick Smith: And we all share in that even though we got to it in different ways. And that’s why we all came together. We’ve been working together now a total for 13 years almost, and we’ve always had that shared purpose and a shared set of values. what I didn’t know when we started was just the, diversity of skill sets and backgrounds.
[00:06:24] Derrick Smith: And I think God orchestrated that because, you know, what David does really well and what Mark does really well is different from me, and we complement each other really well. So not only do we have that common set of core values and purpose, but also a diverse skill set that I think helps us be successful at Firefly
[00:06:46] Lee Brumbaugh: Great story, Derrick. Thanks for sharing that. And so when you’re out there and you’re starting to hit the road and you’re looking for business, because we have a lot of SMB owners that will listen to this, and maybe they’ve bought that first business, looking at the second. What stood apart when you guys were looking at that first company, that first deal?
[00:07:00] Lee Brumbaugh: what were some of the things that stood out of, “This is the type of business that we think we can be successful with”?
[00:07:08] Derrick Smith: David and Marc had a lot more experience than me, back in 2013. Marc had been with a big, private equity firm, Roark Capital. David had been doing venture investing for quite some time. Uh, so they had a lot of experience. I didn’t have much. And being entrepreneurial, that didn’t really scare me.
[00:07:29] Derrick Smith: It should’ve, but it didn’t. And so at the beginning, I think, just speaking for myself and probably for David and Marc, we were looking for any business who had an owner who would talk to us. and then we would dig in, and if it was profitable and growing and we felt like there was shared core values, it didn’t really matter the industry.
[00:07:50] Derrick Smith: I mean, we didn’t, we didn’t want to, to get into things that were too far out there, but, construction, manufacturing, business services, technology, we looked at a little bit of everything. And we were looking for some fundamental things: profitability, growth, shared core values, good people, differentiated capability, all the things that you would normally look for.
[00:08:14] Derrick Smith: But it was really, hard to find businesses that are good and healthy, and we were just trying to find a business owner who would talk to us. we did. We, we found, a few and, and learned a lot along the way. So that was, that was how we originally started before we got way more focused
[00:08:32] Lee Brumbaugh: So as you’ve gotten focused, I know that, as I mentioned at the onset, the entrepreneurial toolkit, how has Firefly evolved to, to really focus on serving SMB clients? And talk to a little bit about what the entrepreneurial toolkit is and, and the vision for where Firefly is today
[00:08:48] Derrick Smith: Yeah. So the roots of the Entrepreneurial Toolkit really started in 2015, and you can see my bookshelf here in the background. There’s a, there’s a book there called Traction, and someone had given David Mann the book Traction, and he shared it with us. We all read it and really fell in love with the entrepreneurial operating system.
[00:09:07] Derrick Smith: We had, I think, three businesses at that time, and we started running them on EOS with an implementer. and so it was working really well. It was helping us execute better. It was helping us get better alignment with our leadership teams. And in 2017, we were able to go to the first EOS conference. We heard Gino Wickman speak.
[00:09:31] Derrick Smith: We were very impressed by him. And David had a common connection to Gino, and he was able to get introduced to Gino Wickman. That was in sometime in mid to late 2017, and then we were able to buy the business EOS Worldwide in May of 2018. So at that time, we were still a generalist, but after buying EOS Worldwide, we started to see that the target market customer for them, which is the SMB market, they needed other things as well.
[00:10:10] Derrick Smith: And they were, there were three common issues that they were running into. building a great customer list, having a great group of people that were right people, right seats, and filling open seats with great people. Uh, and then the third one was just really having access to good, reliable data that was at a reasonable cost to acquire that data to run their business.
[00:10:36] Derrick Smith: And so we were like, “Man, All these businesses are struggling with a lot of things, but these are the three common themes that would move the needle. Let’s focus on buying businesses that do that, that help the SMB market.” And at that time, the, the private equity investing space for SMB companies was getting way more competitive, and we knew we needed to have something that would differentiate us, and so we started to focus.
[00:11:05] Derrick Smith: David or Mark, one of them came up with this phrase, the Entrepreneurial Toolkit, so that became our thesis and that, our sole focus probably in about 2019 or 2020 timeframe
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[00:11:37] Lee Brumbaugh: Discover how we deploy these proven sales solutions to address your sales challenges. By going to our website, filling out the contact form, we’d love to hear from you.
[00:11:49] Lee Brumbaugh: you’ve come up with this vision of where it’s going. Where, where has it led to today of, where you serve the marketplace? I mean, I know the story, being associated with Sales Xceleration, but w- walk us through that
[00:11:59] Derrick Smith: , We had the focus. We started, trying to find all the companies out there that did things in sales and, leadership and certifications and training and all this stuff when we started to get a, lay of the land. And we came across a really interesting business called Sales Xceleration.
[00:12:17] Derrick Smith: that was in 2020, I believe. And we were able to meet the co-founders of that, which happened to be in our backyard in Indianapolis. And, we knew that, entrepreneurial businesses really struggled with sales and sales leadership and building sales teams that were not reliant on the founder or the CEO.
[00:12:39] Derrick Smith: And so we just fell in love with Sales Xceleration, and after several months of conversations, we were able to acquire that
[00:12:48] Derrick Smith: business as well. And then, we were able to make a minority investment, in 2023 in a business called Titus Talent, which is really the market leader in helping entrepreneurial businesses acquire the right talent on their team, and they’re phenomenal at that.
[00:13:07] Derrick Smith: So we have three businesses that fit the entrepreneurial toolkit thesis, and we’re continuing to, just build relationships with market leaders, that do the other things out there, and hopefully will be thought of when they’re ready to exit. some big criteria that we have is they need to be the market leader in their niche or on their way to it.
[00:13:32] Derrick Smith: And of course, we have some size criteria and all that as well, but that’s the big one, along with a culture fit with us
[00:13:40] Lee Brumbaugh: Yeah, it’s great, Derrick. And it’s great to see again the evolution of how couldn’t talk to a business to having a very focused area of where you wanted to grow and then being able to execute upon it. I’m gonna pivot a little bit. you’ve mentioned, and obviously you’re also, as you got into EOS, you loved it, and you started doing it, I know as, some of your own, building your own practice.
[00:13:58] Lee Brumbaugh: you work with a lot of SMB owners. You’ve learned a lot. this is a very broad question, but when you go into a business, whether it’s in a EOS session or what you’ve learned through Firefly Group, when do you think, “Oh, this company gets it”? is there cues early on where you’re like the leadership team, whether it’s the owner or the leadership team, what is that, that signal that like this is a team that gets it and is positioned well for growth?
[00:14:22] Derrick Smith: So I’ve started six businesses. I’ve been a part of acquiring 15 family businesses, and I’ve now worked with 25, companies as their EOS implementer. the word that comes to me is humility. I think that is a key ingredient, and it starts with the CEO, visionary, founder, whatever you wanna call that person at the very top, having a high level of humility.
[00:14:52] Derrick Smith: they want to grow. And it’s not just like sales growth or profit growth. They just genuinely want their mission, their impact to grow. And obviously you have to grow sales and profit, to do that. But they are growth-oriented, and they’re willing to change and do the hard work that it takes to grow the right way.
[00:15:20] Derrick Smith: And when I say the right way, like in a healthy, scalable way that’s not all about them, and it’s not completely reliant on them. So those are some things that come to mind as I think through all the different experiences I’ve had
[00:15:36] Lee Brumbaugh: So when you have that, leader that’s humble, right? how does that trickle down into the leadership team? if you’ve got that humble leader, how is that reflected in the leadership team?
[00:15:46] Derrick Smith: Well, number one, it, sets the right tone for the rest of the team that, hey, there’s not one person on this team that has all the answers. They’re open, they’re humble, they’re willing to find the right answer, and it doesn’t have to be their answer as the founder or CEO. they’re willing to change and evolve.
[00:16:08] Derrick Smith: They’re willing to acknowledge their weaknesses. And I think, as the leader goes, so goes the rest of the leadership team. And as the leadership team goes, so goes the rest of the organization. And so it all just trickles down. And so if that leader has those characteristics of humility and a growth orientation, it’s naturally going to, be a part of the DNA of the leadership team and then everybody else, in the organization.
[00:16:36] Derrick Smith: So everybody becomes humble. They all are open. It doesn’t have to be their answer. It’s not their ego that they’re trying to serve. It becomes the greater good of the company. And, it’s not about their title. It’s not about, if they had the right answer. They’re truly trying to build a great company and make an impact on people’s lives.
[00:16:56] Derrick Smith: that just breeds, a great business. I mean, if you can have a leadership team?
[00:17:00] Derrick Smith: that just thinks and acts like that, the culture of that business, I’ll take that, any day, in terms of the teams that are gonna win and execute and, do it the right way and have fun along the way
[00:17:14] Lee Brumbaugh: obviously as, as a leader, we’re always trying to have a team full of that, right? But in the real world marketplace, it’s hard to find people that are truly on the same bus with you, on the same mission, are humble, are not about them. Like, what have you seen for companies that when that, when they’ve got a member of the team that’s not that?
[00:17:31] Lee Brumbaugh: How do they identify that? How do they address that? have you seen it sometimes where they haven’t acted quickly and it’s really been a, a negative impact on the team? talk to me about that seed, so to speak.
[00:17:42] Derrick Smith: it’s hard. I mean, I tell my EOS clients this all the time. people are coming together in, in a work environment. Let’s say you have 50 employees. 50 people are coming together in a work environment. They all had different upbringings. they’re all coming from a different background, different experience sets, and then it’s you’re bringing them all together in one place and trying to get a common set of core values, a common vision, a common mission, and that is really hard.
[00:18:14] Derrick Smith: And then you’re spending 40-plus hours a week together, more time together than you are with your family, most likely. you’re gonna have situations where a few or many just don’t fit, the right thing to do is to address that. If you’re really thinking about the greater good of the business and even the greater good of that individual, the best thing to do is address that. And I don’t know if I’ve ever encountered a situation or encountered a client who said I moved too fast on correcting that issue. It’s always, “I waited too long, and it cost me.” And I get that. I get it as a business owner myself. But, it’s always we move too slow, we should have moved faster.
[00:19:05] Derrick Smith: And it’s usually a fear issue that is holding them back from addressing it. If you run on EOS, the tools will make it crystal clear what’s going on, what the issue is. It’s just a matter of then moving forward with courage once you, you know that you have an issue with a person.
[00:19:25] Derrick Smith: And I’m also a big believer in addressing smoke before it becomes fire.
[00:19:29] Derrick Smith: So, you know, your employee should know what’s working, what’s not working all the time. They should have feedback, so by the time it becomes a real issue, it’s not a surprise
[00:19:42] Lee Brumbaugh: I like that because it’s like you said, it’s humble, right? That it’s, it’s not easy. It’s, you know, these are people that oftentimes you care about, it’s when you don’t make that decision, it has that negative impact. And it’s easier said than done, but I, I’m with you. It’s very rare that you have a situation where you, you wish you wouldn’t have acted.
[00:19:59] Lee Brumbaugh: the SMB community, right? From where you started with Firefly when you were on the road and trying to find business to where we are today to where we’re going, what has shifted? I mean, we look at the stock market, right? We see the companies are up and, but to me it’s interesting working with an SMB company is it’s very different than what you may see on Wall Street, right?
[00:20:16] Lee Brumbaugh: Of how we operate and where do you see the SMB landscape moving towards? Where was it? where is it now? Where is it shifting to, just from a general perspective
[00:20:24] Derrick Smith: definitely a, a lot more, companies like Firefly trying to buy SMBs. When we started, looking for businesses in 2013, there were not a lot of buyers for, you know, companies of our size criteria. Think, you know, a couple million in profit up to six to eight million of profit. there just weren’t a lot.
[00:20:49] Derrick Smith: And now there are tons of buyers for that type of business. The traditional private equities bought smaller businesses. There’s lots of what’s called independent sponsors, which is what Firefly would be categorized as. and then there’s lots of individuals just looking for businesses to buy. I get a call probably every month on a new individual that’s leaving corporate and they wanna buy a business, and they call that ETA, entrepreneurship through acquisition.
[00:21:21] Derrick Smith: So that’s a big change. There’s just been a lot more buyers. I see that trend. You know, and as I think about my EOS clients and I think about our businesses at Firefly, just they’re very focused in on, uh, growth. And, I can’t think of anybody taking their foot off the gas or slowing down or being cautious.
[00:21:43] Derrick Smith: I don’t know the large company landscape very well, the public markets, well at all. the entrepreneurial space, people are investing and from what I see, and their foot is on the gas pedal. They really do, want to grow and are trying to do it
[00:22:01] Lee Brumbaugh: Yeah, good perspective. Derrick, last question for you. For that, you’ve learned a lot of things, I’m sure, along the path, from being involved in the venture capital side to EOS implementer to what you’ve learned with acquiring companies. For that SMB owner that’s, maybe just purchased a business, maybe a little bit stuck, any last tip that you’ve learned along the way, maybe even something that you did wrong that they would resonate with them to put in practice with their business?
[00:22:25] Derrick Smith: don’t quit. It’s hard, and I couldn’t do anything else. But There’s high highs there’s low lows. You feel this weight of responsibility. It can be super frustrating, and you just can’t quit. You’ve got to keep persevering, and know that businesses just don’t grow up and to the right.
[00:22:50] Derrick Smith: That’s not the reality. Like, you are gonna go through a season, and that season could be really hard. and so have faith and keep going. Keep working hard. You will get through it. that would be number one. number two, I’ve always known this, but I, I just feel like I really know, it now. it’s all about people.
[00:23:12] Derrick Smith: you have to have a great team, and you have to spend a lot of your focus as a owner and leader on building a great team that aligns with your values and are good at their job. And they have to be both of those things. If you are unwilling to quit and you are very focused on building a team, And you stay humble, that most of the, the ingredients to win, I think, at the end of the day
[00:23:39] Lee Brumbaugh: You know, it’s so interesting. you read all these books and everything and all the buzzwords, right? Of like you’re, getting your right ICP and your value proposition and what’s your competitive difference and all these things you know, especially with AI that you can do now. And at the core, I think everything you said is absolutely correct.
[00:23:55] Lee Brumbaugh: It’s still about having good people, having a good vision, being humble. it’s these business areas 101 that are timeless, it’s very easy to lose sight of that, a business owner, right? You’re chasing the next thing versus making sure you have the right people aligned with your right vision
[00:24:10] Derrick Smith: Yeah. And you’re just unwilling to quit. Like, you will keep going. those seasons that are hard, which if you’re in it long enough, you will face it. If you haven’t yet, it’s coming. you just gotta remember to keep going
[00:24:24] Lee Brumbaugh: it’s an SMB company for a reason. There’s gonna be bumps in the road, but those that handle it well with their teams are gonna be the ones that are successful in the long run.
[00:24:32] Lee Brumbaugh: So,
[00:24:33] derrick_smith-56174eea-dca4-44e3-a0bf-1-CFR (Detached audio): Right
[00:24:34] Lee Brumbaugh: Derrick, thank you so much for joining us. This has been great. Always good to catch up with you. Thank you everyone for joining another episode of Sales Against the Odds. Please join us again in two weeks where I’ll have another business thought leader that challenges how we think about growth and the health of our business.
[00:24:47] Lee Brumbaugh: Thanks everyone.
