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How Jack Wagnon launched ctel3 using partnerships, not capital

jack_wagnon_ctel3_fullIn 2010 Jack Wagnon moved from Portland, Oregon, back to his hometown of Topeka, Kansas. He started ctel3, a business management consulting company with a focus on cutting edge automated sales, marketing and customer service.

In five years Wagnon has grown his business with clients across the Midwest–all without a major capital raise. SPN spoke with Wagnon about how he grew his business by partnering with other entrepreneurs.

SPN: For readers not familiar with ctel3, explain what your company does?

JW: ctel3 is business management consultancy with a highly specialized focus on sales, marketing and customer service. What we want to do is look at how to enable companies to make the transition from the way they used to market to the way the customer wants them to market now.

SPN: What’s your background?

JW: I have a Masters in Integrated Marketing, a Fortune 50 management background at Intel Corp., and I founded a green housing development company. I’ve gone through the Dot-com crash, the commoditization of IT, the housing crash. I’ve seen market cycles go up and down.

I’m a sales and marketing person by nature, and sales and marketing has really changed in the last 15 years – it’s now completely customer centric.

SPN: How did you get the idea to start your business?

JW: When [my family] relocated to the Midwest from the West Coast, I did a lot of informational interviewing, trying to figure out who’s doing what.

Through that process I met the Security Benefit folks. I was very interested in learning about their problems from a sales and marketing perspective.

It ended up being that they didn’t really have a job, but they had a lot of problems. [So I said,] “Guess what, I can solve this, this, and this. Why don’t you hire me on a short-term basis and let me tackle this?” That’s what started it all. And I never looked back since.

SPN: Once you had your first customer, how did you develop your business around that?

JW: Once I had the Security Benefit contract, I needed to define what my [business] was. So I sat back and wrote a business plan. I built my strategy on three core competencies: data science, marketing information systems, and the strategy that drives the aforementioned.

As a result of that, I identified the types of people I needed to support delivery on the solution. I did an incredible amount of research, interviewing various vendors that could help me establish a competency providing the solution I could see in my mind.

It’s just a lot of hard work. You have to get out there and research to understand who’s doing what. Everyone will tell you they can solve a problem, very few will have a track record of doing it, and an even smaller number can work well with the team you’re putting together.

I’ve got a team of excellent partners. And that’s what I think ctel3 does extremely well: putting together a team.

SPN: What have been your best partnerships so far?

JW: Data science is a very difficult field to staff. Sigma Marketing Insights out of Rochester, New York, is a small shop that’s been around since the mid-eighties. They started in direct mail database design, and they have evolved into statistical analysis and marketing data. They’re perfect for what we do, and their leadership is very open to collaborative projects.

CRM is at the core of our technical solution, and I needed a reliable development team to lead our implementations. ProCore Resource Group out of Kansas City has proven to be an excellent partner. They handle all of our CRM development consulting and are a deep subject expert with Salesforce.com. They have a shop of 10 extremely high-end evelopment types, and they are very entrepreneurial, a lot like Sigma.

Right now I’m also working with a shop out of Denver to handle all of our lead nurturing strategy and marketing automation. They are small, nimble and entrepreneurial which is a perfect match for our core team.

SPN: What’s the nature of those partnerships? And what do you offer to those partners that they are looking for?

JW: There are two kinds of partners. As a business management consulting firm, we are in the business of recommending solutions. So there’s a range of technology partners out there that are “referral partners.” If the customer’s business requirements meet your technology solution, we will put your technology on the table for consideration.

Then there’s the “strategic partner,” which is a somebody that is a dedicated, strategic resource at the consulting level. That’s ProCore, that’s Sigma. These partners comprise the core ctel3 offering.

They are interested in working with us because we are an engine for developing new clients for them. We help them realize new customers they wouldn’t normally have access to.

What I’ve found is that people are really interested in getting a foothold in the Midwest

Most importantly, we are in the Midwest. It’s typically an underserved geography.

What I’ve found is that people are really interested in getting a foothold in the Midwest. There are very few Jack Wagnons in the Midwest. Frankly, I haven’t had a lot of barriers to deal with.

There’s a ton of corporations looking at the Midwest. The problem is a lot of companies originate from a coastal perspective. So you need somebody on the ground to help them out.

It’s like the Music Man musical, “You’ve got to know your territory.” It’s campy, but it’s the truth.

SPN: Have you found any drawbacks to starting your business in Topeka?

JW: No. Because what I’m selling is what’s between my ears. My geography is irrelevant, quite frankly. No one cares about where we reside; they only care about solving problems. And problems are universal. There’s been no liability being located in Kansas.

The challenge becomes, as we grow, that we plan to bring some technical competencies in house. Being in Topeka is a potential challenge. We are thinking about locating our expansion in Kansas City or maybe Denver so that we can attract a larger pool of prospective talent.

However, the corridor between Topeka and Kansas City is basically hardwired. [Compared to Portland] it’s just like driving out to the suburbs.

SPN: If you could go back and start your company again, what would you do over?

JW: Knock on wood, I’m not sure I would change anything. This has been a pretty calculated play. I’m pretty cautious, and I’m definitely thinking four moves ahead. So far we’re on track. Ask me that question in five more years.

The first five years are not all that difficult to figure out. It’s what you do with a track record. It’s my next move that’s causing me anxiety.

SPN: And what’s that move?

JW: An investment in managed services. That’s where we’re going next. We are going to start building competency in house to provide a fully outsourced marketing automation service.

SPN: Are you at capacity now?

JW: Completely. I can’t take on any more strategic consulting work. I can source more technical integration business, but from a strategy perspective, I need more Jack Wagnons. That’s an expensive resource.

In order to hire more people like me, it’s going to require more money. In order to hire the talent for the managed services division I envision, it’s going to require money. We’re going to have to go out and raise capital. At this point, it’s time  to put together a short list of potential capital partners.