Full Transcript
Guest: Michele Cook, Founder and CEO of Fractional Executive Staffing Platform
Host: AJ Riedel
THE MARKET OPPORTUNITY: TECH LAYOFFS AND AI DISRUPTION
AJ: You mentioned that you're focused on the intersection of tech layoffs and AI implementation. Paint a picture for our listeners of what you're seeing in the market right now. What's the problem you're observing?
Michele: Right and left, you see all these massive layoffs in the tens of thousands. Amazon laid off 15,000 to 17,000 people. Meta laid off 30,000, then laid off another 5,000 on top of that. And they literally admitted they were training their AI based on their employees' work to replace them. They did promise they wouldn't lay people off for another seven months, but I mean, that's a major problem. If you're constantly in strife, worried about whether you're going to have a job in seven months, that's a lot of pressure for people.
Many of these people are really high-level executives, high-level experienced, very knowledgeable. What's being found in the industry is that companies are laying these people off believing people would be replaceable. You cannot replace human intelligence with artificial intelligence. Period. So now they're calling these people back. But what you see is people are going to have a bitter taste in their mouth. They're going to feel that companies are worried about their stockholders and not their stakeholders.
Having seen that in the market, I felt there was a way to position my company to help executives thrive through this type of market change and disruption and get to the other side.
THE PLATFORM VISION: FRACTIONAL EXECUTIVE SERVICES
AJ: So your response to that need is that you're building a platform for C-suite people, executives who got pushed out of corporate America who need to figure out how to become independent. Your platform helps laid-off executives transition into fractional consulting roles. What's your vision there?
Michele: I'd done some consulting in my past, but it was just little me. Seeing this in the marketplace, I realized there needed to be something bigger than me to help these executives. Companies are going to lay people off because they'll follow the trend. Then they're going to turn around and realize they need these people back. People are going to have trouble going back, knowing they have this job for only the next six months or not.
So how do we take these executives and build a career around being fractional? Being able to work with multiple companies. If they're working with three to five companies in a month, and one of them lets them go, they're going to be okay.
My vision is to bring in CXOs—CTOs, CIOs, Chief Revenue Officers, Chief Marketing Officers—and build out the platform. I also have another layer where I'd like to intern or mentor people in basic business consulting for startup and growth companies, because those companies will eventually grow and they'll need the fractional. But they don't need that full experience yet. So I want to layer that in so we're helping people all the way across the board.
BUILDING TWO BUSINESSES CONCURRENTLY
AJ: You're essentially building two different businesses. You've got your staffing recruitment platform and a fractional services agency. You want to teach them how to be a fractional, but you're also going to get business for them. How are you deciding which one to build first, or are you doing them concurrently?
Michele: I'm doing them concurrently. I have a recruitment specialist on my team—he doesn't take over HR once somebody's on payroll, but he's really good at recruiting. I worked with him before, and he'll be valuable not only for my group but for determining good candidates for our fractional team and how we grow without overgrowing. You don't want to overscale and under-deliver.
I also need to fill in my gaps. I'm great at sales and marketing—that's been my history. Could I do a COO level? To a point. Should I do it? Probably not. Definitely not financial CFOs—that's not my forte. I can do bookkeeping and balance the books, but that's not my specialty. So I want to surround myself with really intelligent people to help build this platform out so we're full service with these companies as they grow.
SUPPLY SIDE: FINDING AND RECRUITING FRACTIONAL EXECUTIVES
AJ: Is your vision that the fractionals don't really need to do business development on their own? They sign up for your platform and you get them their gigs?
Michele: If they bring it in, that's wonderful, but a lot of these people—if they're CIOs or CTOs—they don't know how to sell. That's one of their huge hurdles. So I bring the experience. I do things like this podcast with you, speaker gigs, speaking engagements to get the word out. I participate in founder groups. That's what I do—I can get in front of a group of people and start talking. Once I know my fractionals, I know their story and what they're good at. I can coach them: well, this methodology could be trademarked. You bring that to the table and suddenly that's new. It's a completely different layer that they're offering to companies. So I can both coach them and portray them to companies as the experts they are. That's what I'm good at—telling the story.
AJ: Do you charge for that coaching, or is that part of your package?
Michele: There's a 10% agency override on whatever they do. If they go into a company and their starting rate is maybe five thousand a month for a certain number of hours, there's a 10% agency fee. This is for not only getting that gig and making sure it goes smoothly, but making sure there are alternative gigs behind them in case that one fails or changes. That's it—just a simple 10% for the services to be part of the agency.
DEMAND SIDE: THE BUSINESS DEVELOPMENT PLAYBOOK FOR FINDING COMPANIES
AJ: The business development playbook for recruiting your fractionals is completely different than selling to companies. How are you approaching each?
Michele: The recruitment itself is something that can be offered to companies. If they're scaling, we can offer my recruiter to them to do that recruitment. He's been able to reduce costs quite a bit and has shown a proven track record with his methodology.
But recruiting for the fractionals—I think one of the best places you can be is on LinkedIn. It's a business-to-business platform. You see stories right and left about people saying, 'I've been looking for work for two and a half years.' You've got an executive with wonderful experiences and valuable education struggling because they don't know how to package themselves. They're either looking for that job—the job in corporate America—or they just don't know how to package themselves. That's a gold mine for getting in front of a lot of people using that service.
In addition, a lot of people listen to podcasts like this and speaking engagement events. That's another great way to get the word out and get those meetings. I'm also building a networking platform where other companies that do similar things to what I do—but not exactly—can participate in affiliate programs. So if I come across something that suits their group, I can refer them to that company, and vice versa. That's a huge part of it.
LINKEDIN PROSPECTING STRATEGY
AJ: On LinkedIn, how do you find laid-off workers? You can't really filter for that in Sales Navigator.
Michele: This is where my recruiter's methodology comes into play. He uses AI tools to help gather information, but it's getting in front. If someone says, 'I'm open to work, been looking,' a lot of times people will repost that. So the person who reposts might be in my network, and the person who's looking is not. I might reach out directly and say, 'I was looking at your profile. Have you considered this type of thing? Would you be interested in a consultation with my recruiter?' We have a conversation, see if it's a fit. If it's a go, then we move forward.
SALES PROCESS: DISCOVERY AND INTAKE
AJ: How do you actually connect them to opportunities?
Michele: I have my website where I'm going to post about them. I'm also using a CRM in different ways. The biggest thing you want to do is create foundational things so they're very simple. If I've got an intake sheet for my marketing people—here's all the questions I ask based on my marketing methodology. On the other side, I want to create that similar intake sheet for my CXOs. So when they're sitting down with a company, maybe both on a Zoom call, we're doing an intake. We're finding out what's working, what's not working, where are they seeing huge holes and gaps, where can we fill in? That should be a simple formula. It should be a cookie-cutter formula that can be used from client to client to client. Not every client's the same, but the intake portion should be the same, where you're evaluating what you're bringing to the table, what they have going on, what they're doing now, and what's not working.
DEMAND SIDE: POSITIONING FRACTIONAL SERVICES IN A COST-CUTTING ENVIRONMENT
AJ: Now let me flip to the demand side. You mentioned companies laid off all these executives and now they're panicked about AI. But they also have budget constraints. How are you positioning fractional services as a solution when these companies are in cost-cutting mode?
Michele: If you're bringing somebody on with the experience you would pay—say two hundred fifty thousand a year—but you do it fractionally and it ends up being more like one hundred twenty thousand, you've just saved a lot of money. You can go back to your stockholders and say I've saved money. But you can also go to your stakeholders and say we're still delivering to you. It becomes a huge savings to the companies based on the project and their needs, what type of C-level services we're delivering.
On the other side, the C-suite person needs to be able to manage if they're working with three different companies. They've got to be able to manage that. If they get lost in the first email batch, there's going to be a major issue. So we need foundational things like a CRM with all information documented, making sure you're on top of it, and your calendar is your friend. Really, the other thing is making sure you're in contact with these companies you're providing services for on a weekly basis. At minimum bimonthly, but it really should be weekly, making sure you're still meeting your objectives as you go along.
FINDING COMPANIES: NETWORKING GROUPS AND FOUNDER COMMUNITIES
AJ: How do you find companies that might be good candidates when they're probably not going to signal on LinkedIn that they laid off people and now they're lost?
Michele: The minute I put 'fractional' on my LinkedIn, I started getting companies reaching out. You do get some interest. It's a buzzword right now. Updating your profile and making sure you're elevating it so it's searchable by artificial intelligence really does help.
The other thing is getting in front of groups. I met with the Founders School, which helps founders get clarity on what they're doing and help them grow. If they grow to a certain level, they help them go to the next level. I'm part of that whole group. I'm in front of these people and I talk about my services. You can also set up meetings and have a one-to-many conversation. You've got people signing up saying they want to know more about fractional CFO services. Let's have a presentation to all the founders. Everybody who signs up is raising their hand. You can create these events that are virtual or in person, and then you determine what their needs are, and set up a one-to-one after the presentation. That's a great way to get in front of people. People's time is really valuable, so that's a huge way to do it.
NETWORKING EVENTS AND ROI CHALLENGES
AJ: If I understand, you go to events where these potential companies are, like founder networks that are going to need these executives as they scale. And then the top of the funnel is getting them to come to an event about using fractionals, and then if they're interested, you do a one-on-one discovery call with them. What's your ROI on that time spent?
Michele: Even if you get a hundred people signing up, you maybe get twenty people to show up. That is one of the issues. It's something I'm trying to refine and define. The other question I'm looking at is: can we do this more automated as a webinar so it reduces actual time spent? If it's automated, then you go, 'Boy, I really want to hit that.' You hit a button and learn more about it at this point, then you get the one-on-one. That's where I'm leaning towards as this is being built, because I think that's really going to make a huge difference in changing that ROI issue.
Even when you get in front of one-on-ones, it often takes two, three weeks for them to even pull the trigger because they're noodling, they're working on their budget, they're figuring things out, they've got to talk to people in production or whatever they've got to do. It's just getting them to pull the trigger.
AJ: So you're looking at very time-intensive and long sales cycles on both the recruiting side and the recruiting of companies, and you're looking at ways to shorten that cycle.
Michele: Absolutely. That's one of my challenges. One of my goals is that I'm really great with following up with people. But if I'm following up with twenty or thirty or forty people at one time, it becomes a challenge. So how do I reduce that? That's one of my challenges. I've got to make sure I'm reducing time to trigger, basically.
PLATFORM DEVELOPMENT AND EARLY MOMENTUM
AJ: Where are you with this platform? Is it still in development or are you making money from this?
Michele: It's still in development. I recently relaunched it. But I actually have conversations as of today and tomorrow that should be some triggers moving forward. I've been talking to these people for a couple weeks, so that's really the process I'm working on—reducing that time.
The other piece is getting those other individuals, those other experts on my team where I can let them go and do what they need to do so I can start selling them. I'm still building that piece out. There's a huge opportunity for people to come in.
SUSTAINABLE GROWTH AND EXIT STRATEGY
AJ: In the midst of all this platform building, you're also doing fractional work yourself?
Michele: I am right now as I build it. That's to pay the bills as I build up the agency and get that going.
AJ: Is that just to keep the lights on?
Michele: It is. That's how I'm paying the bills as I build up the agency. I'll be fine. I'm going to be really happy when I can say I'm going to go to Europe for a couple weeks and you guys run this. Call me if you need me. I'll take a couple Zoom calls while I'm there. That's my goal—to get it to the point where it's that fine running engine that can go with or without me. Eventually, I'd like to have an exit plan for myself on this, but have it continue to go after I'm gone.
AJ: So you want to create a well-oiled machine that doesn't need you to be in the office every day.
Michele: Exactly.
VISION FOR THREE TO FIVE YEARS
AJ: Where do you see this business in three to five years?
Michele: My goal is to make it a multi-million dollar business that is literally helping and layering in from growth companies, bringing them into the mid-level stage, really helping companies across the board navigate. And we'd be on the forefront of where AI is going. We have to keep on top of that. AI shouldn't ever replace the human element or human intelligence. But we've got to keep on top of that because anytime there's a market disruption, you just have to be aware of what's going on, keep apprised of it, figure out how to move quickly, and pivot if you need to. So that's really what this company is going to need to do. But it's built for that because of the whole platform structure. It's literally built for that pivot, which I'm so excited about.
CALL TO ACTION FOR FRACTIONAL EXECUTIVES
AJ: I work with self-employed consultants and fractionals. If there are fractionals listening who have already decided they want to be fractionals, do you want to hear from those people?
Michele: I would love to. I'd love to have a conversation and schedule a time so they can meet with my recruiter and myself. We can find out more about what they're doing, what's working, what's not working, and how we might be a fit.
AJ: How would they get hold of you?
Michele: All my information is on my website. They can set up a Calendly right there available on my website to schedule a time. Just let me know what it's for and we'll set up a Zoom and go from there.
THE HUMAN ELEMENT IN AN AI WORLD
AJ: I have one last question. The podcast is called Thriving Through. Are you thriving?
Michele: I am. It's a work in progress because it's newer, but I'm super ecstatic about what I'm doing. The feedback I've gotten from various different meetings and people I've met—they're excited about what I'm doing. They see the vision. The fact that I've got so much clarity around what I want to do, it's not something vague. It's very, very clear as to what I'm looking to do for companies. I've gotten wonderful feedback. I'm super excited about this and developing something that I really truly feel is going to help people all the way across the board. So yes, in that manner, I am absolutely thriving.
AJ: One more thing I want to touch on. You mentioned that companies that took on AI, their upper-level management are pulling their hair out because they've got a larger load. AI can generate millions of lines of code, but you need a smaller team of software engineers to read that code and verify it's good.
Michele: Yes. And I see it on LinkedIn right and left. You see companies announcing they're laying off three thousand people, and then the same company announces they're now open to hiring software coders. AI does not replace the human touch. And so stakeholders are also your clients. You're going to lose clients because of this. You're going to lose business. Companies need to be aware. And so we're here to help prevent that, keeping the company viable with your budget while also still delivering that customer service and human element all the way across the board.
Your chief revenue officers, your chief marketing officers—they know what that means, what that looks like, and what it's going to entail. If you've got an AI bot answering things and spinning something into a tailspin because it keeps saying, 'I'll send you a link and do it online,' that drives me crazy. I'm from the technology sector. Imagine people who don't have a technology background. They're stuck in this loop and they're going crazy. So I'm really here to help companies not do that and report better to their stakeholders, their employees, and their clients.