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Season 01, Episode 10

CEO & Co-Founder of Datapath, David Darmstandler

CEO & Co-Founder of Datapath, David Darmstandler

About the Episode

Today on The Fastest Growing Companies podcast, we’re talking to the CEO & Co-Founder of Datapath, David Darmstandler

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Full Transcript

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23:02

Chris:
I’m Chris Ronzio founder of Trainual. And I’m here today with David Darmstandler. He is the CEO and co-founder of Datapath. Hey David, how are you doing?

David:
Awesome. Thanks so much for being here. Thanks for having me. All right. So

Chris:
Tell us real quick. What is data path all about? What do you guys do?

David:
Yeah, sure. Datapath is a managed service provider. So we manage networks, servers, cloud for organizations, and we’re also, what’s called a managed security service provider. So we manage, uh, cybersecurity for companies. So we keep the bad guys out.

Chris:
Got it. And is there a specific type of customer size customer industry you work with or is it anyone that has computers?

David:
No. Over the years as we’ve kind of grown, we’ve realized that we work best with, so we know about half our business is comprised of, you know, fast-growing companies. So organizations that have technology needs and, you know, really live or die by technology. So those industries kind of pretty much represents, you know, distribution and manufacturing and stuff on their side. The other half of our business is K-12. So we do a lot of public school districts, um, and it’s pretty much split down the middle. And so that’s, um, it’s, it’s, uh, it’s, it’s nice to have that mix of customers because you get to see some, you know, um, different styles of leadership and, you know, kind of how those organizations work and, um, at different scales for sure. Got it.

Chris:
I’d love to get into that split of the different types of customers as we talk, but first, why this business, what, when did you start it and what was, what was the reason for starting it?

David:
Yeah, sure. Um, well really, I, you know, my, the other co-founder James we’ve been good friends since third grade, so we actually, um, you know, kind of came together to, can start working on a business plan. We were in our early twenties and he had already kind of started doing some it consulting and a few customers. Um, and I, I had started another company up in Sacramento and I left that to come, you know, work with him and start data path together. And, um, it’s kind of all history from there. So,

Chris:
Well, you’re, you’re writing history. I mean, you’re growing crazy fast. Uh, and from the last few years when you had 29 people to today, you said about 57, you’ve also added a lot of people to the team over the last few years. So what do you think has been the secret sauce behind your explosive growth? Is it a certain connection, a certain service, a certain, a referral? Like what, what made you tick up into

David:
The right? Yeah, so, you know, I mean, from like philosophically, I would say it’s just that our team is focused on just being better every day. So, um, you know, I, I think that’s been a huge part of it and really just having, you know, building out a leadership team. And I don’t mean just like a set of people. We’re constantly working to develop each of our team members, um, in areas that they would like to learn or feel like they’re weak. So I think, um, just, you know, putting into place processes and how we’re going to mentor and career path people to get the kind of where they’re most passionate is been a huge part of it. Um, and then obviously, you know, zooming out, no, it’s the same side to, you know, talk to customers and go, okay, what’s, what’s working that we’re doing and what totally sucks. And so as long as we’re constantly, um, remain humble and don’t think we know everything and we’re willing to listen to both our team members and our customers, I think that’s been part of it, for sure.

Chris:
It sounds so simple, but listening is something that so many businesses just don’t do. Like they’re, they don’t ask, they don’t provide the avenue for people to give that feedback to customers or employees. So what is your take on, on, on the cadence of that feedback? How do you make sure that you’re having the career path discussions or you’re asking your customers for feedback? Do you have anything operationalized for

David:
That? Yeah, absolutely. I mean, we’re big on net promoter score. So we, you know, we use some applications that every interaction with the customer we’re looking for the most simplistic way, just to get some feedback. So I think at this point it’s like some dancing, thumbs up and thumbs down and, you know, an email that they got to click, um, gives them some opportunity for additional surveys and that kind of stuff. And then, yeah, just a regular cadence in person with those customers will now obviously mainly zoom depending on the customer and our team member. But, um, you know, just usually at least once a quarter that we’re sitting down and doing a really thorough, like, okay, where are we where we, uh, what’s working for you and you know, what’s going on with you guys? Um, you know, are we aligning, uh, and then with our team members, um, it’s at least twice a year on the career pathing side.

David:
In fact, right now we’re in the middle of, um, just gutting that whole thing and starting over again because, you know, we realized like we, you know, like anything you get into it. And it’s like, man, we made this way harder than it needed to be particularly managers. Right. It was just super time-consuming and it kind of takes the love out of it. Right. They’re focused more on the activities than they are like the core, the meat of why we’re even doing it. Um, and that’s, you know, I think that’s every organization, right? You get like halfway down the trail and you’re like, man, we totally forgot why we’re even here and why are we doing these things and why it even matters? And, but those things do matter. Right. And, uh, and then y’all on the other side too. We try to do a lot of, um, I don’t know what you guys do, but we’re just trying to do a lot more companies zoos and like all companies, stuff that we’re finding a way to connect.

David:
Um, and just keep things real, even though we’re physically separated. Cause we don’t have a whole lot of people in our offices. Um, you know, we, unfortunately, middle of COVID, we just, we just finished our brand new, big, old headquarters. There’s like three people in it, right. It’s 14,000 square feet. It’s such a bummer. It’s such a beautiful space, but no matter, you know what I mean, it, what matters is that, you know, people are, are safe and you know, we’ve got the, in California, we’ve got the issue with kids. Kids are not school, so they’re at home. So, you know, we can’t necessarily ask all of our team members to come back to the office because of watching the kids. So, but as simple things like we’ve even done recently, we just did core value stickers. Right. Um, took all of our core values and big, huge on those. And um, this gives them physically something to pass out and then also are digital versions that we can just pop on all kinds of stuff through on emails. And it’s just to remember, right. Like why we’re doing what we’re doing and the way you’re supposed to live and work, if you are a data doc. Right. So

Chris:
Cool idea. I’ve never heard of core value stickers. So that’s, I just wrote it down on my iPad. That’s a fun thing I want to look into, but there, there was something you said there that I want to just rehash for everybody listening. Um, because you may not even realize you said it, but you said that you’re revamping a process entirely because it got too complex. And I think so many people put processes in place and then there are teams there. People just think, well, this is the way we do it. And they don’t have it in their DNA to revise processes and iterate and improve. And so the fact that you do that intentionally or not inside your business, I think is probably one of the secrets to your growth, which is, you know, CU kudos for that. That’s awesome. And then the tip about NPS net promoter score for anyone that’s listening to that doesn’t do that. It’s such an easy way to just collect feedback regularly from your customers. So great points there. Thanks for making those. Um, let’s go back to the earlier days when it was you and your friend that started this thing. Uh, I imagine at the beginning you were doing a lot wearing a lot of hats. Uh, what were the first couple of hires you made to take things off your plate?

David:
Yeah, we actually, uh, we’ve got some horror stories around that. Um, my, uh, partner nine teams, it was the first year actually within a few months we needed to hire, uh, you know, we essentially kind of got going and we landed on some large contracts out the gate, uh, kind of sold them and then went home and went, okay. You know, how the hell are we going to fulfill these things? Right. Um, so, you know, we didn’t know anything about hiring. We kind of hired a guy that we knew, um, you know, just as an acquaintance and, uh, just kind of being like a total, you know, it was just like every, um, HR issue you could have with an employee. I feel like we had with that first guy and, uh, you know, and he’s still a friend today, so it’s like, you know, we still catch up here and there, but, you know, and he knows what, what, where we’re at in our stage of business and he knows where he was at personally.

David:
So it’s just kind of funny to reflect back and go, okay, these are, you know, made us realize that, um, you know, it’s, it’s really in that beginning when you’re hiring, that’s the most critical part, especially as a leader. And I think for those leaders that even as they get larger, um, you know, still to this day, you know, my partner and I still interview everybody because we want to make sure it’s not that we don’t trust our team, but we really want to make sure that like they’re in it for the long haul. And they’re primarily that they’re going to fit and gel well with risk, for culture. We’re not looking for them to be like everybody else. In fact, we’re looking for a little bit at rub, but we’re looking for those values to line up. Um, and that’s, uh, it’s really difficult, right?

David:
It takes, you know, it’s, it’s been a number of years for us now doing this. And so it takes time to know how to ask the right questions and pick those things out. And, and so, um, you know, picking the right team members to us is the most critical, and that was, you know, kind of what we learned at the gate. Cause you know, yeah. It was, um, what we call the second shift. We work a full day and felt like we worked a whole second day, we put many kids up. Um, it was just working in the evening all the time, uh, weekends, whatever. Uh, but that’s, you know, that’s part of the grind, right? So

Chris:
Hiring acquaintances is code for disastrous hiring. It sounds like, um, you’ve gotten better at it baked in core values into your interview process and still, you know, keep a pulse on that. What are some of the other hard parts, I guess, about having grown your team? Has there been much you’ve had to let go of, or what have you learned over the

David:
Years? Yeah, absolutely. I mean, I, I think, um, you know, to, uh, to just realize, you know, where you’re weakest I think is, is a huge part of it and being honest about it. Um, I think what I see in a lot of, you know, young organizations or, you know, you probably do too and smaller ones and just a lot of micromanagement right now, letting team members run with stuff, not let them make the stakes. Um, so I think I love having those conversations early on, Hey, I know you’re totally gonna blow it at some points and that’s okay because if you’re not blowing it, that means you’re not really trying or you’re not attempting something that’s difficult. Right. You’re just staying safe and we don’t, we don’t want that. So, um, so I, you know, I think that’s a definitely a complex thing to overcome as, as, as somebody that started an organization, you see a lot of, uh, you know, different, uh, leaders that really struggle to ever let go of that stuff. And I think it, I think it really keeps them from expanding and growing. I think it’s, you know, it’s, it’s impossible if you’re not blowing

Chris:
It, you’re, you’re not, uh, you’re not pushing hard enough or you said there’s some quote there. I can’t wait to pull out because that’s setting the expectation that it’s okay to mess up. I think it’s such an important part of letting go and delegation and training. So great point there was, was there ever a point in the last few years in this growth journey that you thought, man, I don’t know if this business is going to make it like some things are not going well or has it been smooth sailing?

David:
Oh no, no, it’s never, there’s never like a year where it’s just me. I mean, you know, and it’s hard because you don’t know what you’re comparing yourself to. Right. Um, I think we’re really hard on ourselves. Um, but you know, there’s definitely, no, I think COVID for sure, right. That first, uh, right when COVID hit, you know, there was just so much uncertainty on all levels, right. You know, business, you know, all of a sudden, um, customers were a little, you know, for a short period, there were, you know, a little bit more cautious with how they were spinning. There were all these, uh, elements with team members that you’re dealing with and emotions around, you know, illness and, you know, economically are they going to be okay? I mean, all these things that, you know, you had to kind of juggle as a leader.

David:
Um, so I mean that was, that was really kind of, you know, terrifying in many ways. Right. And, and as a leadership team, we just went, Hey, how do we, um, you know, this is, this is kind of our, our time, right? So, um, you’re probably too young for the, uh, for the Goonies thing, but you know, this is, this is our time, right? Like this is our time to, to, uh, kind of reality show ourselves as leaders and we’re navigating something that really hasn’t been navigated or at least it’s been, you know, over a century. So how do we, um, how do we take care of our team members? How do we take care of our customers? How do we make sure our team members stay safe and our family stays safe? So there was a lot too, you know, that that was probably, you know, maybe the same for you as probably the most difficult period and leadership I’ve ever experienced.

David:
Um, and I’m, uh, you know, excited to say that we, I feel like we navigated it pretty well. And, and we did the best we could with the information we had and it felt like information was constantly changing. So it was like, um, but you know, in the end, what was weird about it was, you know, we had, uh, you know, the business changed for, you know, maybe six weeks there. And then all of a sudden it was like accelerated growth, um, at least in our business. Right. So, uh, but it was hard cause you know, we have five, got a lot of buddies, and probably do two that own restaurants and stuff like that. And that was really difficult to watch. Um, you know, you felt, we felt pain for our local communities. So we, you know, we, even though there was uncertainty, you know, we went and did, like, we went and bought, you know, thousands of dollars in gift certificates in local restaurants for our, our team and passed them out and said, Hey, go, you know, go take you, you know, go get dinner for your family to go on Friday, Saturday or whatever.

David:
I think anything we could do that obviously lined up with our values. We also said, Hey, we’re going to support a lot of communities where we’re at and we’re going to really help these guys out. So, uh,

Chris:
That’s great to hear you did that. I know earlier on, you mentioned doing more zoom calls and trying to connect and build culture. I know for us, that’s been really important over the last year. So is there anything you’ve done to help keep people together when they’re more remote than usual? Yeah, so I mean, like in the beginning, probably

David:
Like all firms, we did like freaking hours and stuff like that. Right. Like, grab a beer. And I think that, um, that lasted for a little bit, uh, I, you know, I think it, you know, like anybody, I think our team members were like Googling, Hey, what can we do? Uh, you know, to stay connected via zoom. Right. Uh, which was really difficult. I, um, you know, the other things we did was a lot of, like, we tried to, you know, take funds that we would have used for like our normal company get-togethers. And instead, we made them for the families. So we did like dinner and, um, uh, you know, dinner and movie nights. So we gave him a movie gift certificate and paid for dinner and, you know, sent home some like some that kind of stuff, um, on a tactical level.

David:
Um, I know I keep a spreadsheet number of our other leaders internally. Um, you know, we, we have our regular morning check-ins as teams, um, every morning. Um, but we’ve also as leaders, the one-on-one time, we actually keep spreadsheets of the last time we connected with each individual team member, even if it’s for 15 or 20 minutes, just to make sure that we’re on a regular cadence, you know, over zoom at a minimum, just going, Hey, how are you doing? Talk to me about, you know, like the morning check-ins are great from a tactical standpoint for business, but we’re having separate meetings that are like, Hey, you bring to me what you want to talk about. You can just talk about fishing. Like I don’t, you know, like talk about whatever hobby you have. You don’t have to talk about work. It’s just about connection.

David:
Yeah. That’s going to change. I think the vibe, everybody is funny because sometimes even in those group meetings where we’re doing those like we’re doing the kind of a multi-person like just, Hey, let’s just hang out and let’s just talk about life. Um, somebody will start diving into work and everybody is like, no, no, no, no. Like, no, like just sit down and just talk about, you know, talk about life and talk about where you’re at, how you’re doing, how you’re feeling about things. Um, or just like, like I said, just like random hobbies. I mean, it’s just funny or just like stories that the other one that’s kind of fun is like, you know, tell us something nobody would know about you. And it’s just pretty crazy. I mean, we had one guy that like had worked in the circus as a kid. I mean, dude, it was just like these like incredible stories that like, you could never, there’s any way you would know that stuff. Right. Unless you had taken the time to actually ask and check-in. So that’s cool that,

Chris:
That you call each other out too, because you know, it’s, it’s so easy to get back on the work topics. Like even my, my brother is our CMO. I’ll call him sometimes on the weekend and we’ll be trying to talk about like, you know, he, he went sledding with his wife or something like that. And somehow it ends up turning into like, uh, like Facebook cost of acquisition. It’s like, how did we get here? So it’s good to have a referee for that.

Chris:
All right. So I want to circle back earlier, we talked about you kind of split your client base into these high growth companies and this K to 12 education companies. Um, has that been, that focus really propelled your growth or what would you say has been, uh, has been part of what’s helped you scale on the customer side? I definitely

David:
Think it has for sure. Um, you know, as, as we’ve adulthood, as an organization, as we like to say internally, um, you know, in the beginning we were kind of like a funnel where we’re like, we’ll just take anything. And we soon realized we just can be good at that as many, many things. And we’re kind of doing a disservice to the customer and to our team members to not, you know, have a level of focus and expertise. And you know, that we’re realizing that really comes in and kind of, you know, we’re, uh, we have a much better chance of propelled growth through having like an industry-focused and industry expertise than to just kinda throw this wide net out there and hope that we catch a bunch of different stuff or be an expert in everything. And that is probably one of the harder things.

David:
I mean, I think it was probably six or seven years ago. We had about 440 customers. Um, we reduced that down to 55, really painful, but the, uh, the Chinese fire drill is kind of went away, right? Like just this like craziness, like, you know, and if you play that as a kid, but you get in the car and it’s like everybody switches, you know, seats or whatever, it’s like, it was just like this constant chaos. And, you know, since we kinda went to more of this industry-focused, it helped to quiet things internally and allow people to be, um, you know, really focused on, you know, kind of their craft. Right. Which I think ultimately is what, you know, most professionals want to be allowed to do. Um, so I think between that, and then also just the respect you gain from the customer base.

David:
Right. And then it allows us to kind of go, um, you know, essentially go up in size as to the customers we’re servicing. Um, and so it’s really, uh, you know, that level of focus is, has changed a lot and we’ve done some, you know, focus based exercises internally where we’ve hired, um, you know, some consultants and stuff like that to help us kind of really just, um, zero in our focus on, you know, on markets in particular. So yeah, some of that obviously got derailed. Some of those really big plans got derailed with COVID last year, but, you know, we still, you know, continue to, um, stay on that track. I think it really has helped though with scaling, for sure, especially

Chris:
[inaudible] is such a key point here, like the repeatability of what you’re doing creates more profitability and it creates more referability. And so it sounds like you really double down on that. So looking ahead then, uh, w w where to, from here, what’s next for Datapath.

David:
We finished a couple of smaller acquisitions, one in 2018 and one last year, actually in the middle of COVID pretty much. So we, in July, we required a small, um, uh, provider like us down in Orange County, and we’re gonna, you know, really our, our plan is to do at least once a year. So if not two, depending on, you know, kind of the bandwidth we have, and if we can find the right organizations to join us. So that’s been a huge part of kind of our growth strategies to kind of grow, um, you know, both geographically and in talent as we, you know, find these, you know, additional targets. So, um, that’s a huge part of kind of where we’re, we’re going at the moment. So that’s great.

Chris:
Well, for everyone listening, I mean, you heard from David his path over the years, growing their team size pretty dramatically specializing in on a couple of industries, putting some intense focus on their core values, down to buying core value, stickers, collecting feedback from their customers, from their employees, specializing, all of these things have been recipe is for their growth over the years. David, if people want to connect with you after the fact, where can they find you? Sure. Uh, really, you know,

David:
Obviously, the best place is, you know, LinkedIn, so there are not many Darmstandlers out there. So you’ll, you’ll find me pretty easily. Um, and obviously I love Instagram, so I’ve just had Darmstandler.

Chris:
Well, connect with David Darmstandler on LinkedIn on Instagram. Hopefully, you can borrow a page from his playbook as you’re writing your own. Thanks, everyone for listening. We’ll see you next time.

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