00:15:10 · Steve Stagner, Miguel Armaza
It frees you up to do the work that's more important And it opens up capacity, which is really what we're trying to do is open up capacity so that we can grow. And so anyways, I think that's kind of the more detailed work that we're doing at Crete right now. To do all that, I'm super excited because we have partnered with Thrive Capital. They have given us, Thrive Capital, if you're not aware, or maybe in the audience, they've invested well over $1,000,000,000 directly with OpenAI. And so they're like one of the top leading investors in OpenAI. So we have kind of a direct relationship. And it's really nice to have them because there's a pioneer tax in technology, you know, just the pioneer tax of learning technologies. And to have some of the leading engineers in OpenAI on our team gives us potentially a disproportionate advantage to go over this pioneer tax that we're all pioneering through as a society and as companies. And so we're super excited about those. They've given us we have I call them the Fab Five. I have five engineers that are working with me directly to walk into firms and provide real life solutions for their real life problems. [00:16:30] S1: You mentioned, obviously, there's a lot of advancements and efficiencies that you're finding, but you still need a human in the loop. What are, if any, what are some of the things that you've identified that AI is not there yet?
00:16:30 · Miguel Armaza, Steve Stagner
[00:16:30] S1: You mentioned, obviously, there's a lot of advancements and efficiencies that you're finding, but you still need a human in the loop. What are, if any, what are some of the things that you've identified that AI is not there yet? [00:16:46] S0: Look, mean, I don't think that at this point, you could rely on AI to, you know, sign off on an audit or a tax return fully. I think where we're focused is we're focused on using AI to just do the mundane task. That's where we're starting. Maybe in a year from now we can talk about doing more advanced stuff but we're focused on just how can we take transactional data that's very mundane and take the human largely out of it so that we can free up time for more valuable activities. [00:17:25] S1: Does growth become your most important KPI or maybe share a little bit about the KPIs that you're tracking and maybe some of these are not so obvious to outsiders.
00:17:36 · Steve Stagner
[00:17:36] S0: Look, our mission at Crete is we wake up every day to accelerate growth. When I think about that growth, I don't think about it in terms of just revenue growth or EBITDA growth. I think of growth more broadly in terms of human growth and client growth and firm growth. So when I think about growth, I feel like Crete, if you think about us, we're kind of like the Intel inside. So So if you think about a brand, you know, we have all these different firms that we partner with and those are their own unique brands and we honor and preserve those local cultures. Crete is an Intel Inside, kind of like a processor of Dell computer that makes it go faster. And so the metaphor there is very important because the investments that we're making is to help unlock that growth. My most important metric that I think about are what I call the triad which is client success, employee success and firm success. And that's the triangle that I look at. And I look at it as a triangle because if we're getting more clients and growing our and deepening our relationship with them and our satisfaction with them, that's a good thing. If we're growing our individuals and developing them, that's a good thing. And the satisfaction is high, that's a good thing. And then if our financial metrics are, I look at the financial metrics as a lagging indicator with the leading indicator being the client and that the team. And if those two things are moving in a north easterly direction, then I believe the financials will follow. And it always has. In my past, I invested 10,000,000 a year in learning and development for our employees. Two hundred hours per employee in training. It's public knowledge that we did that on selling mattresses, which is the most boring thing you could ever do. And you certainly don't need $10,000,000 worth of mattress training. So what we did is we spent training on learning and development. And what was the net effect? Well, we had a 30% higher store average than the average company that we bought. And so we had the same access to the same customers, the same access to the same market and the same manufacturers but yet we had a 30% higher shore average. So why is that? Well I say it's because we invested in the people.
00:19:55 · Steve Stagner, Miguel Armaza
And I think that what's going happen here is in this industry is we have an opportunity to really invest in our people and the technology and the combination is going to be what really helps unlock the growth, which is our mission. [00:20:10] S1: Speaking of customers, which is one of the three legs of that stool you just mentioned, are customers also demanding for better tech? You just mentioned you as an example. You work with one of the top 10 accounting firms and you still demand for better tech because you know it's out there, but at the same time, you're the CEO of a company that is injecting AI across your company. Right? So you're right there at the tip of the spear. Do you find that the expectations of customers have also shifted? Yeah, I think
00:20:47 · Steve Stagner
[00:20:47] S0: it would be at our peril to not shift with the customer. So there was some research that I had seen, and I don't have the exact quote right here, but it was roughly 77% of the clients want a greater suite of services and 80% would switch for best in class technology. So if you break it down to the client, like as a client, how amazing would it be if I knew the status of my tax return all year and could see some technology and log on and to see where like the Domino's pizza tracker, but it's the tracker of my tax return and what's missing, what's in the oven and here's what's missing. But then on top of that, some dashboards for either business or personal where I could see kind of what's going on with my money and other things that are happening. We're working with the firm directly on client dashboards and the clients are loving it. And so what does that do for you, Miguel? That gives you a stickier relationship with the client, because the client now values the information and the intel and then what you're doing from that. And if you just look across the continuum of everything, like take, I mentioned Domino's. Domino's is really winning the pizza war based on technology. Starbucks is winning the coffee war based on technology because of the mobile app. So that's in the consumer space. So consumers always want more information, more transparency, they want speed, and they want accuracy. And so the more you can put that in front of them, that's gonna be who wins. I don't think it's a zero sum game. I think that, you know, there's a lot of really great leaders in this space and thought leaders and millions and millions and millions of dollars being invested. But I think, you know, for us and our firms, we really are going to go heavy and invest in technology that's going to help the client.
00:22:39 · Miguel Armaza
[00:22:39] S1: Speaking of the second leg of that stool, and that's your people. Yes. Like technology comes and goes, but you have some core principles about managing a workforce, motivating your team. Have you found your principles, your beliefs to have kind of been pretty steady throughout your career or have some of those things changed specifically about managing a workforce?