I am joined this week by David Conforti, co-founder and CEO of the Varfaj Group. Together, we trace Varfaj's journey from its inception at NYU to its present-day management of large-scale projects on the Shopify Plus platform. We also shine a light on the stark digital divide between small businesses and legacy enterprises, and discuss how this gap can be bridged using the right balance of compliance and innovation.
We zoom into the human element of business, by evaluating the role of project/client success managers in our organizations. The shift from a traditional hierarchical structure to a more fluid pod structure, the necessary blend of senior and junior talent, and possible pitfalls in the hiring process are all discussed in detail.
Finally, we dive into the world of working capital. David Conforti and I reflect on the merits and demerits of traditional hiring methods versus leveraging existing networks, and why a trial period before full-time offers could prove beneficial. We also discuss the importance of swift cash conversion for sustained growth.
I am joined this week by David Conforti, co-founder and CEO of the Varfaj Group. Together, we trace Varfaj's journey from its inception at NYU to its present-day management of large-scale projects on the Shopify Plus platform. We also shine a light on the stark digital divide between small businesses and legacy enterprises, and discuss how this gap can be bridged using the right balance of compliance and innovation.
We zoom into the human element of business, by evaluating the role of project/client success managers in our organizations. The shift from a traditional hierarchical structure to a more fluid pod structure, the necessary blend of senior and junior talent, and possible pitfalls in the hiring process are all discussed in detail.
Finally, we dive into the world of working capital. David Conforti and I reflect on the merits and demerits of traditional hiring methods versus leveraging existing networks, and why a trial period before full-time offers could prove beneficial. We also discuss the importance of swift cash conversion for sustained growth.
I'm Brandon Amoroso and this is the D2Z podcast Building and growing your business from a Gen Z perspective.
Speaker 2:Hey everyone.
Speaker 1:thanks for tuning in to D2Z, a podcast about using the Gen Z mindset to grow your business. I'm Gen Z entrepreneur, Brandon Amoroso, founder and president of Retention as a Service Agency Electric, and today I'm actually joined by David Conforti, who's the co-founder and CEO of the Varfi Group which hopefully I didn't butcher that pronunciation there who is another Shopify Plus agency that's based out of Miami as well. So really excited to have you on today.
Speaker 2:Yeah, yeah, likewise, brandon. Yeah, a little bit about us is so. It started Varfi about five years ago now, when I was actually at NYU, and it started really not with too much of a grand vision in mind, but just my friends and I had a lot of extra time in our hands while we were at NYU.
Speaker 2:We were in the business school there and after one of my friends did his summer internship at Accenture, he realized what the space looked like for the agency and the consulting world and we thought that we could do this ourselves. So we started doing smaller projects like websites, landing pages, logos, and then have really refined our offering, scaled our team since then, so we're up to 16 people now full time doing primarily all Shopify work and, like you said, became a Shopify Plus agency last year, so doing some of the larger builds on the platform now, which has been really exciting.
Speaker 1:Nice, you are the only other Shopify Plus agency owner I know who has a similar founding story to me and that you started it in college. And you started it in college because you saw the way that it was being done and figured, you know, like you know they can do this, then I can probably do this shit too, which I took a class at USC that was around SEO marketing, and now, after listening to the teacher for a couple of weeks, I was like there's no reason that I can't just start doing this. Yeah, then just just went for it.
Speaker 2:Exactly, and the other cool thing about the econ space too is that the bigger the company, the less they probably know about the nuances and the innovations in econ. It's been so surprised, as we start to move up the value chain and work with bigger and bigger clients, how much more opportunity there is with these large companies that have legacy systems, Whereas I think you know there's a lot of people that are more our age, maybe started at their own brand, etc. Which are they really know a lot about the space. So it's definitely that kind of that gap between the two, I'd say.
Speaker 1:Yeah, I feel like there's two, there's two camps, or really three. There's, like, the small businesses who really have no idea you know where to go or how to get started. There's the small businesses who are started by, you know, people who are digitally native and have, like you know, everything in a row when it comes to their tech stack. And then there's the very large enterprise organizations who have, you know, just a Frankenstein technology stack that is rife with efficiencies and then also a corporate structure that doesn't lend itself well to enabling or affecting change. So that's the goal we're running into.
Speaker 2:Yeah, that you start to play the politics game when you work with some of the larger brands, right that's. I don't know, have you run into that with electric?
Speaker 1:Yeah, I mean, we recently went through like a level of effort, return on investment exercise and going through it, you know, part of the level of effort wasn't actually you know how much time it would take to implement, or how many like dev hours or however.
Speaker 1:You know whatever and more so, who are the various stakeholders and how many of them are there within the internal organization that we're going to have to, you know, go to bat with, or, you know, pitch our case to before we can get sign off and approval on this initiative, and some of them were like, you know, six different people would have to sign off and, you know, maybe this was potentially being looked at as encroaching on something else they had going on. And I'm like, literally, this tech partner will set it up for you for free, AB tested against your entire website for three months, and you're saying, you know we can't address this until next Q, for I'm just like that. That boggles my mind. But you know, I guess there's a reason in some instances why it's done that way, but I think it's been taken, you know, sort of too far where I get having checks and balances and stuff like that, but not when it is just so unbelievably ridiculous that you end up not being able to do anything.
Speaker 2:Totally One of our larger clients. We're doing this migration for them right now. Actually, we're migrating eight of their markets, so the US and then seven international stores, from Bay Commerce to Shopify and it's. They are run by a very large parent company and that's been pretty interesting to see how decisions are made and how the team functions, because it's something you know that, being like an entrepreneur ourselves, like we've never really dealt with.
Speaker 2:I've never had really a job at a real company, so to speak, like it's started basically working for myself at the age of 18. So seeing how that goes has been an interesting insight and I think that you know there's they just have so many compliance games to play, which I definitely am not jealous of, but it's you have to play that balance of like, yes, we're compliant, but are we, are we innovating, are we moving fast enough as well? So it's a trade off and I definitely see that. I think it's it's actually heartening as an entrepreneur because you see how much opportunity there is in all spaces, because even though there might be a really big player there you now have insight of. You know they cannot move as fast as some of the more disruptive, more nimble startups.
Speaker 1:And you know, as it relates to dealing with those internal politics. And then also, like a secondary question would be do you think it's a blessing or a curse that you haven't worked at a quote, unquote real company before? But how do you navigate those internal politics artfully so that you're not pissing anybody off but still keeping the business? And then like, do you think it's been a blessing or a curse that you haven't had a traditional work background in an experience?
Speaker 2:Yeah, I think that, as far as you know because there's kind of two things there's like internally with our team, how that plays, and then externally, when we work with our clients, how that plays. And I think that internally, that has been a good and a bad thing.
Speaker 2:It's definitely presented a lot of learning curves where, for instance, you know, we had employees coming to me saying like, hey, we need to be doing one-on-ones, we need to be implementing all of these things that larger companies have performance reviews, et cetera and I thought, oh, wow, it's a really great idea. So internally, you know, that's been some of the learning curves, like I said, but I think that the opportunities that those presents are way bigger than the downsides, because on the upside you have people taking more ownership of the task, feeling like they're really part of the company. It can impact change. We don't have necessarily these big mundane processes that have been in place forever, but really it's a thing that people can come into and make their own. And the part that has been really big for me is, like you said, I haven't worked at a company before, a real company, so I do a lot of reading and try to gather as much context from previous entrepreneurs as possible, like, two of my favorite books are no Rules Rules, which is by the founder Rehastings of Netflix, and then Ed Catmull wrote Creativity Inc, which is about Pixar.
Speaker 2:And those are two and they're an international organization, so there's a lot of really cool learnings there. And then Creativity Inc was fascinating because they have this delicate art of giving feedback to the creative process. You know and what that looks like, how to give proper feedback, how to grow people creatively.
Speaker 1:So trying to fill that void or maybe that lack of experience, and I think it's a good thing to be able to just hop in and test without having preconceived notions and assumptions as well, which is something that I think I would have been a lot more jaded and had a lot more internal biases if I had gone and worked at an agency ahead of starting my own, though it would have helped a lot in terms of credibility and network, but I don't know if it would have helped so much in doing something differently or being able to think creatively or outside of the box.
Speaker 1:There were definitely things that we did that were just objectively stupid, because I was like oh yeah, I don't need to do that shit. That doesn't make any sense. But there actually is a reason that some of these agencies do some of the things the way they do them, and so there's a little bit of blind confidence there that these guys are idiots and they have no idea what they're doing, and so I'm going to do everything differently, which I also would not recommend as well. Well, we're some of those.
Speaker 2:I have a few off the top of my head, but I'm curious to hear what you said.
Speaker 1:I resisted the concept of a project manager, client success manager, account manager, whatever you want to call it for the longest time, because I always just looked at that person, for better or worse, as an extra body that was taking payroll and time and money and not necessarily providing real, tangible results or value for the business that they were working for. But over time, realize that there are necessary conduits to be able to effectively communicate and work with a client and also, if you train them properly and have it set up in the right way, they actually can be a value add from a strategic standpoint, versus just being somebody who's essentially there to connect the dots. Actually have them be more of a strategic thinker and almost like a Shopify consultant, so to speak. Yeah Right, but that was one that I resisted for two plus years because I just didn't. And it's just like you.
Speaker 1:A bunch of Google, a bunch of random books, and I went through a variety of different organizational structures when it came to how are we going to structure the team, or are we going to do a pod structure? Are we going to do more of your standard traditional hierarchy, things like that? And so that was a constant ebb and flow. Of which route were we going to go or not go? Yeah.
Speaker 2:How do you like the pod structure?
Speaker 1:You know, it just wasn't really scalable, like for us. The way that we ended up doing it is looking at it more at an individual level, but we were predominantly email and SMS. We have some SEO and content and some web design and development as well, but each individual ended up in a particular vertical or verticals. So we had one person who pretty much took all the skincare and beauty clients, because that just sort of happened over time, and then we would track basically workload based off of clients. So some people might have only two clients but they only have two clients because those two clients take up a significant amount of bandwidth.
Speaker 1:But then somebody else might have seven, and so it really came down to how many touch points per month were they responsible for? And then the CSMs essentially act as the conduit for anywhere between five to I think the most one ever had was like 12 clients and then we fill in the pieces around that particular CSM. So it wasn't like this ideal world where there was a pod with a CSM who worked with the same email and SMS team members every single time, because we'd have to have essentially perfect client inflow and outflow where we were never out of whack, but some clients would come in at a $3,000 a month retainer and then we'd have somebody else at a $15,000 a month retainer, and so that just made it impossible to keep that pod structure.
Speaker 2:Definitely, that's something that we're evaluating right now and I think that, having seen, for instance, we've come in and picked up pieces from projects that a larger agency worked on, I think that they gave us a lot of confidence as well, realizing that they also I was resisting for a while was getting any junior talent. So we really focused on, like we hire a lot of ex Shopify. We hire a lot of people that have been in the industry for decades and that really allowed us to get to give our clients a really high level of expertise when they're coming on, and I really thought that like margins and working capital, and I realized that those people are really expensive and so trying to find the balance of senior talent with rock solid SOPs and processes then allows your junior talent to actually outperform itself, you know, and like act as more senior talent. So that's kind of been something that we're we're focusing on now.
Speaker 1:We actually went the reverse route where we were so scrappy and we're just like throwing bodies at that shit and a lot of training and the. I actually had difficulties doing it the other way. Or like bringing in somebody with experience. And then you know I'd bring in somebody with experience and try to delegate, but then would realize you know sort of very quickly that maybe they didn't have as much experience as you know. One would think, or they did have experience but it just wasn't the right experience. Or you know, just because you have experience doesn't mean you actually know what you're doing.
Speaker 2:And so that was like balancing act.
Speaker 2:Yeah, it's also this, this, but you said it's a balancing act. I think where we're at which is that you are not a small team of you know three or five people, but you're not a huge team of two or 300 either, and there needs to be this, this balance between providing leadership and providing that senior, but also actually getting in there and doing the work, and that takes a special person. I think, which is where, like you got to cycle through a fair amount of people and you know, if you make a mishire, I think the best thing you can do is be very decisive with your, with the outcome there, so identifying that that person is a mishire and rectifying the situation as quick as possible and moving on to the next you're pro and then you're one step closer to figuring out what the ideal hire looks like.
Speaker 1:Yeah, what is your hiring process look like from? You know, requisition of the job all the way through, you know prospecting for candidates and then getting them actually, you know, onboarded to the team, Because that was something that was always changing and evolving for us, especially as we grew, and was never perfected and still isn't perfected by any means.
Speaker 2:No.
Speaker 1:So how do you try and manage that? Yeah, yeah, there's the silent plug in the background.
Speaker 2:I think that we I've never been a big fan of like a formal hiring process we generally tend to have. We have our org structure lined out and we have we keep constant updates of where we want to be in six months and 12 months, so we know what the org structure we're building towards and then what we do is I'm always prospecting new talent. So, being you know that a lot of our teams from Shopify, they have huge networks in the Shopify talent pool, so pulling people, other people from Shopify and then now that we have you know, many people that have also come from other agencies, they're pulling past coworkers, et cetera. So really being targeted with our outreach and trying to grab people from networks existing networks because I think that the experience I've had of like posting a job on Indeed, getting applicants running an interview, is just horrible.
Speaker 1:Yeah, it's a. It's a painful process for sure. We like put together these questionnaires that we would force everybody to fill out before they were even, you know, potentially considered for a role, and that allowed us to, you know, weed out a lot of the, a lot of those that are not serious, very quickly. It's like you're not even willing to fill out, you know, a short little questionnaire about the role. Then you know your LinkedIn easy apply is not, you know, the person that I want to be talking to by any means. So definitely.
Speaker 2:And we have one.
Speaker 1:Oh yeah, go for it. I was going to say the issue I found with agencies is like you'll, you'll sell something and then you might need to, you know, fill or have capacity, at least when we were early on. And so then it sort of just became you know who's just good enough versus who's the best, and then you know. Fortunately we're in more of a proactive hiring like playing field now, where we have enough resources and capital to be able to do so. But when you're just like bootstrapping from nothing, it really is just like do you have a beating pulse and are you willing to? You know, work and dive in here?
Speaker 2:Yeah, that's such a, that's such a. This is actually the best person to do the job. One thing that's helped us is that when we hire someone, we generally hire them on a three month contract first, and before extending that full time like W2 offer, and that way because we've had interviews that people have interviewed so well. Their resume looks amazing, but then there is that intangible piece that you can't quite quantify, which is desire to work, and trying to gauge someone's desire to work is really tough in an interview, so there's no other better way to do that than to actually get them on the desk, get them doing the job, see how they take to everything in stride.
Speaker 1:Yeah, no, that makes a lot of sense. That's what we did originally, but not because of that, Just more so you know, we only had part time work for that person.
Speaker 1:And then as it, you know, scaled and as we got in more business then the opportunity would come for that. So we sort of like fell into that unintentionally. But like, what are some of the things that you've uncovered that are sort of pitfalls or things that you wish you would have known before starting an agency or really just starting a business as a whole and scaling it up?
Speaker 2:Number one, I think, is a focus on working capital, especially as a bootstrap business. Focus on getting you know, moving opportunities through your pipeline and converting that to cash as quickly as possible. I think that that's something that allows you to scale in an effective manner, and it's really tough to grow and to scale if you're not doing a good job of converting the work that you're doing into money at a very basic sense. Where, like we fell into that pitfall early on, was that carrot that clients made dangle down the road or, you know, accepting, especially when we started working with some of our bigger clients. Big holding companies would come to us and be like, yeah, we're going to pay you net 60 because they could kind of throw their weight around. Do you know what I mean?
Speaker 1:and then you the conversations are always is this like what do you realize they're working with? Like a 20 person Shopify agency that's run by a bunch of 20 year olds. Like where the hell do you think we're going to accept next 60, this wild yeah, it's like I mean, did you play that game?
Speaker 2:no, I've definitely played it. I was like I need, I want your logo, I want this work.
Speaker 1:I, I don't think we ever got as far as net 60. I'm pretty sure we got somebody to sucker us into net 45, like typically the absolute most would be net 30. But then you just get, you know, creative with when you actually sending the invoice. So, yeah, you know, net 60, if you're sending at the beginning of the month, is not really net 60, it's more like net 30 or net 45. And so the devil is always in the details there, because you know we aligned with one client on net 30 and they're like you're building us at the beginning of the month.
Speaker 1:I'm like, yeah, it's net 30. And they're like, no, you should be billing us at the end of the month. And so then I'm basically out, you know, a full month of salary and payroll before you know that's technically even due for them. And then, taking into account that you know they're probably not gonna actually not even say probably nobody pays on time, so you're out at least another 15 days. And then I was like our AR guy forever and I'm just like, yeah, which I think was bad, definitely bad one, because yeah, it's a waste of my time. But second is, you know they think they're all buddy buddy with me and like, at the end of the day, no, it's like, you know, pay me. And if there was sort of like the big bad CFO or something that we could have come in there and, you know, provide that sort of wall between me and the client, I think that would be very beneficial.
Speaker 2:I totally agree. That's been something that I've been really big on. Is that I like?
Speaker 1:I think that as a leadership position, you need to be associated with a lot of positivity in the client's mind, and being the one that's banging down the door for invite invoices is not a really fun position to play but we did to ourselves, because if we just continue to provide the service and you're not paying us and, like you know, we're growing very quickly and so some things would fall under the radar and we had one client who we were still working for actively, who hadn't paid us in like 90 days, and they were on, like a very healthy way, one of our largest clients.
Speaker 1:And then it became, you know, well, now they owe us like 50 grand and so now you have to work your way out of that hole and they're like oh, like can we get a payment plan or this and that? But as soon as that happened, like we created a feedback loop between billing and the CSM, so like, if you don't pay us on time, we're not, we're not talking to you, like we're done, we're not sending an email, we're not sending a text like part of it is a respect thing as well. Like, yeah, I mean you have to, especially if you're paying after services have already been rendered, not in advance. Like totally, we have a business to run here as well and we're not you know the type of company where you can have like 90, 90 terms or something.
Speaker 2:Yeah, this is the part of it that I think nobody likes to talk about, though, and it's like a really crucial part is. I remember, like at in college, like working capital, was this like? You know this equation? They put it on the wall in finance class, and then it's actually cool, though, to be able to run your own company and have to think about those things, and the answer does not come from a textbook. You know, like you had to get really creative, be like okay, fine, you want to do net 60? Great, well, we're gonna blow you up front. So, actually, it's effectively net 30 yeah, or like figuring out.
Speaker 2:You know, like something we're doing right now is like autopay stuff. Right, because I was looking at how much time our team was spending chasing down voices, realized we could probably give a 5% discount if we just put people on autopay. Save them money, save us time, which is effectively money like that.
Speaker 1:The decisions like that are kind of cool actually, and then not some of the things that get talked about a lot not only they get talked about at all and, having not come from a traditional, you know, business background, I think that's an area actually where I was hurt is because I, you know, wasn't really paying as close attention to that.
Speaker 1:And then, you know, we were sending out invoices ad hoc, like, yeah, whenever the client like we would start on the 5th of the month, or the 16th or the 12th or the 20th, like it did not matter, and so that we'd end up in this weird billing cadence where it wouldn't line up and like, actually I learned a lot more so than I've ever have about finances, going through due diligence and going through the acquisition process, because we started and stopped with one company and got very advanced with them, but they provided, you know me, with basically their CFO, who is sort of like you know, this is the way that you should actually be doing things, which was, you know, very helpful in quote unquote our finance department, which at that time was myself getting us up to speed a little bit more with how we should actually be doing things and how that finance.
Speaker 2:Making sure your house is in order is really important as you're going through that acquisition process and that's been one of the biggest changes that we've made is outsourcing it to a fractional CFO. It's a really inexpensive service and it's something that's gonna yield you huge results. Almost immediately, you actually feel like you have good visibility as to where everything is Good reporting, getting that stuff in line, I think, is huge, and it also has allowed us to do cool things with our team, because once you have that in line, then you can create performance based incentives and align company success with your employee's personal success, which has been something that I'm really keen on. I think it's really, really important.
Speaker 1:Yeah, I completely agree. Well, before I let you run here, I got one final question, because we primarily talked about the more so entrepreneurship and building the business, but obviously the holidays are coming up Black Friday, cyber Monday and whatnot. What is the one thing that merchants absolutely need to be paying attention to or that you're focused on with your clients in advance of that?
Speaker 2:We? That's a good question. I did number one thing, not only for this Black Friday but more generally, is everyone's talking about community marketing, having a community led growth for their brands, and that's something that we've investigated different solutions with our merchants and there's not really a good one out there. Like no one wants to go join a Facebook group or join a Slack group or anything like that. Discord's kind of too techy, but they do it pretty well, so that's actually been a solution that we've built. In-house is this community building platform for brands. It's called Chatti, so we're rolling that out in the coming weeks and months here and I think that that's something I'm really excited to see how that works for our initial crop of beta companies this season.
Speaker 1:Okay, yeah, that sounds awesome. I will be bugging you for a sneak peek of that. See what it's like.
Speaker 2:Yeah, absolutely.
Speaker 1:Well, thank you so much for joining us. Before we hop, can you just let everybody know who's listening, where they can connect and find you online.
Speaker 2:Yeah, absolutely. So our website is definitely best, which is barfi, b-a-r-f-a-jcom, and then also, you know, linkedin and Twitter, which is at barfi.
Speaker 1:Awesome. Well, thank you again for coming on. For everybody listening, as always, this is Brandon Amoroso. You can find me at brandanamorosocom or electricmarketingcom, and I will see you next time. Bye, you, you, you, you, you you, you, you, you you.