As part of my series about the “5 Things You Need To Know To Create a Successful Service Business,” I had the pleasure of interviewing Freddie Laker. Freddie is the founder of Chameleon Collective, a consulting firm that supports CEOs and investors by providing interim executive leadership. Freddie, a serial entrepreneur, has been successful at founding, leading, and growing companies since 1996. Before providing interim leadership roles to Private Equity backed companies through Chameleon Collective Freddie has served as a CEO three times, a CMO twice and a VP of Strategy for one of the largest digital marketing agencies in the world. With a very broad range of experience leading or working with start-ups to Fortune 100 companies, he has a unique perspective on how to build a successful service business.
Thank you so much for joining us, Freddie! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
My mother is from Oklahoma and my father is English. I was born in London but spent most of my early life growing up between England and South Florida. This left me with an odd accent I refer to as “mid-Atlantic”. I’ve been passionate about technology since I was a child. When I was growing up I was fortunate that my father found computers interesting. I started hand-building them with him at the age of 7. I never dreamed at the time that this would cause a lifelong obsession that would then have such an influence on my life.
Although I know both my parents had a profound impact on shaping the man I am, there is no doubt that my father, Sir Freddie Laker, had a unique influence on me. He was also a serial entrepreneur, famous in the 70s and 80s, for creating the first low-cost long-haul airline.
He spent most of my schooling years grooming me to be an airline CEO. I was very fortunate to be exposed to incredible people and experiences that left a lasting impression on me. Sadly for him, aviation was not my passion. Thankfully, another passion of mine, the Internet, turned out to be the defining technology of my generation and my genuine love for it placed me at some very opportune moments in the early days of its rise to commercial viability.
My earliest company was a Florida-based ISP, but I credit my real break as helping The Womb to become one of the first internet radio stations in the world. Today, if anyone turns to you and says “Do you know someone that can help me with internet ideas?” you will probably know someone you could recommend. But in 1997, most of us didn’t have someone we could recommend. The press and recognition from The Womb really helped put me on the map and allowed me to work with an entirely new class of clients, developing websites and providing internet-related services to them.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
I’m so glad you asked this question next! After all the grooming and fair share of luck I had leading up to some of my early success, the reality was that I had dropped out of University and was basically a 19-year-old (with a wild streak) running a growing technology and web development company. I made more mistakes then I care to recount, but most of our funniest moments gone awry were based on how I didn’t focus on the details of contracts or truly understand the implications of them.
In the earlier stages of my businesses I frequently grew them through raw energy and drive. Employees and clients got caught up in, what was at times described as an infectious level of enthusiasm I had for doing great work. Big, boisterous sales personalities, creative geniuses, and tech wizards can attract many positive things to your business, but if you don’t learn to appreciate having discipline around legal, finance, and operations it’s easy to squander those positive opportunities. Here’s what happens if you don’t have good contracts and neglect putting protections in place for things like acts of nature or force majeure.
In 2006, my company, iChameleon Group, had the incredible honor of designing and building the latest ADiamondIsForever.com campaign for DeBeers alongside JWT. Not only was this a huge, timeless advertising campaign, but it was our first time working with this particular world-leading advertising firm. We were halfway through production when Hurricane Wilma hit South Florida, knocking power out across the state for almost three weeks. One day, our main contact at JWT called, and told us they were incredibly sorry about the storm and offered us their deepest sympathies. Shortly after that, he followed up by letting us know that if we didn’t launch the website in time for their multi-million dollar media campaign, in which the website was deeply integrated, that they’d have no choice but to sue us into oblivion. There’s no doubt it would have sunk my company.
Although crazy and scary at the time, we now reflect on this as one of the funniest and craziest moments of the company’s history. We had one employee with power. He lived with his parents, his grandmother, and his brother. About fifteen people drove their computers over to his house and we set up on any surface we could find. We thought we were geniuses… then we realized that no gas stations had power and we were all going to run out of gas just getting there. For the next couple of weeks, I became the world’s most humbled CEO as I spent all of my time as our gas delivery guy. I would queue up in line first thing in the morning, get the two tanks of gas that we were limited to due to state rationing, and then go put a couple of gallons in each person’s tank. It would take three hours to get to through the line and then I’d repeat the process about three times a day to make sure everyone could get to and from work during this total crisis.
To this day, I’m not sure if I was more amused by the look of my employee’s “Abuela” looking at us all like we were crazy each day, or how we worked together to save the company. In the end, the website went on to become a great success and was recognized globally in almost every major advertising award show.
We’d like to learn more about your unique business model. How does Chameleon Collective’s opt-in strategy work?
Fundamentally, Chameleon Collective is unlike any company that I’m personally aware of. It’s a company that is in service to its employees vs. employees that are in service to the company. As wild as this may sound…Chameleon Collective is not designed to make money or create a profit. Chameleon Collective is a construct that all of its members have collectively built, designed to enrich our lives. We took our favorite parts of being an entrepreneur, things like freedom, control, and maximizing your earning potential, and found a fair balance between our favorite things from a traditional company like infrastructure, scalability, and community.
In the five years since founding the company, we have never posted a single job listing. New people are invited in, and another Chameleon (as we refer to our people), have to vouch for them. Typically this means they’ve worked with them for at least a year in a prior professional capacity. After that, they have to be approved unanimously after interviewing with five other Chameleons. We’ve found this process keeps our quality very high, but most importantly it ensures that people are aligned to our cultural values. We look for people that believe there has to be a better way to work in today’s day and age.
If there are Chameleons with similar services, but only one is required, how does the selection process work?
Chameleon Collective also has a rather revolutionary approach to management. Our company is flat with a free-flowing leadership structure. We rearrange our leadership structure depending on who owns the client relationship. No one is obligated to work with another person or on a project they don’t want to work on. If the client lead wants to work with one Chameleon vs. another, they will ultimately decide. No one person is given work just because they have open or free capacity. This ultimately results in the right people being chosen for projects and drives our team members to make sure they have exemplary reputations within the collective. Respectfully, there is no “cousin of the CEO” on our team. Our approach rewards the best people and attracts very high-performing individuals. We have aligned our compensation approach to match this.
Is ‘conglomerate’ another word for your collective? You have many disparate categories that don’t seem to integrate. Is there a reason you cover so many, rather than focusing on one or two specific business categories and drilling down vertically to be experts in those areas?
Actually, our teams are highly integrated, but our approach to the market is different and that may catch some people by surprise. Our mission is to build and grow great companies. All of our services focus is on driving growth — this might be obvious things like marketing, but in many cases it’s more complex issues like re-organizing an entire company for growth, designing and then hiring a new sales organization, or re-thinking how a product is sold.
Personally, I think the old agency and consulting model is dying and a new model is emerging. A lot of the agency and consulting world is predicated on ensuring that clients never run out of problems, getting embedded into the client, and then tying sandbags to your feet while doing your best to not get dragged out of the building.
Our approach is different.
First, we believe that, although there are many types of experts, leaders have a disproportionate impact on a business. They shift cultures, they think past challenges that paralyze others, and they are key to driving growth. We have built a very large roster of heavy-hitting leaders. For our size, we are very, very top-heavy. This would normally be a bad thing, but our culture and free-flowing leadership structure allow this to be successful. These leaders spread across many disciplines and industries.
Second, we have a large team of subject matter experts, as you’ve noted, that then work with these leaders or for existing sales, marketing, or digital leaders within our client’s organizations to execute their vision. Unlike an agency or consultancy, we have no account people. Our team members work directly with the clients, frequently adopting company emails or identities (like Chameleons) when they are due to work from the inside to transform an organization.
Third, and this is the one that normally surprises people, we have a team of executive recruiters that then work to find and hire full-time staff to replace our people at the client’s office. Agencies and consultancies don’t normally go out of their way to work themselves out of a job. We work to grow our client’s businesses while building the tools and teams they need to be successful long after we’re gone. This is one of the reasons we work with so many investors. They frequently bring us from investment to investment because we have a track history of getting in and then getting out when we’ve completed our mission (no sandbags needed).
How does it work when there is a difference of opinion between Chameleons on a project? Who has the final say?
We have a clear set of processes on how we approach most client challenges, but if it’s more about how to solve a particular client challenge then we’ve found that because of the types of people we focus on adding to Chameleon Collective we tend to be pretty reasonable in settling internal debates. If there is an impasse, whoever leads the client relationship will have the final say.
Thank you for that. Let’s now pivot to the main focus of our interview. Extensive research suggests that “purpose-driven business” is more successful in many areas. When you started your company what was your vision, your purpose?
As a company, our outward-facing mission is to build and grow great companies, but internally we were founded for a very different reason. A prerequisite of joining the company is that you have a track history of growing a business, through whatever your respective expertise is, but in full transparency that is not the true glue that binds our company.
Our purpose was to find a better way to work. Corporate life wasn’t cutting it for us. Many of us crave more independence, more freedom, and less bureaucracy. Simultaneously, we want to make more money, but do it on our terms. The gig economy sounded exciting but, respectfully, platforms like Upwork are frequently a race to the bottom with very hit-and-miss results for clients and the freelancers on the platform.
We set out to make something that was for us. Something that was for high-end professionals that gave us the best of the corporate world with the best of independent freelancing or being an entrepreneur. We knew it had to be more than an open technology platform, so we focused on aligning an insular group of professionals that trusted each other. I believe we’ve invented a new business model that we refer to as the collective model.
The irony is that by building something for us we were actually creating a “honey pot” for top tier talent. And, ultimately, what are clients looking for? Top-tier talent.
We frequently joke that it’s the most capitalistic social experiment in the world. What we once thought was crazy has now resulted in us building a large business with many Fortune 1000 clients and premier investors around the world.
What do you do to articulate or demonstrate your company’s values to your employees and to your customers?
We practice radical transparency.
Originally we started practicing radical transparency because it was the only way to maintain our flat structure. In a normal organization, there is a hierarchy with leaders at the top that hold the knowledge of how the company works and how people are compensated. I would estimate that 99% of service companies are built on a model of, “I will pay a person X and I will charge the client Y and then they make the money on the spread.” We realized that for us to be truly flat, everyone needed to know everything or traditional hierarchies would naturally form.
For the first couple of years of the company, we practiced radical transparency inwardly but were concerned that our business model was too progressive and would scare some clients. Last year we made the decision to practice radical transparency outwardly. It’s been a resounding success. Our clients admire our approach and we’ve found it gives them extra confidence in our business. They know that the vast majority of every dollar goes into the hands of the people doing the work vs the large mark-ups of traditional, bloated, organizations.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
It would be a toss-up between these two because they’ve both served me well.
The first is to focus on the areas I can fix and improve. If I can’t solve something (or find a team member to solve it), I move on quickly, as dwelling on these issues is a distraction that wastes valuable energy and mental resources. You don’t have to win every battle, so focus on the ones you can win and in most cases, you’ll succeed overall.
The second is to watch your ego. Entrepreneurs and type-A personalities, whether they like to admit or not, can have issues with their ego. Many ambitious people get caught up in what others think of them. If they have had some success or want to project success, they get very caught up in what people’s perception of them is. It’s a trap. Temper your ego; it doesn’t matter what anyone thinks about your success. It’s fleeting.
Your reputation is the only thing that no one can take away from you. Be humble, respect others like you’d want to be respected yourself, be kind, and be honest. That will be the only true legacy that matters.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
My second company, iChameleon Group, was completely boot-strapped. It grew very fast and we expanded from South Florida to Los Angeles and London all within four years. As we got bigger and continued to pick up larger clients like Coca-Cola and Diageo we kept getting exposed to longer and longer payment terms from these large organizations. 90 days on $500k projects was brutal!
With all the things that were going right, like the quality of the work and the company culture, we still had huge challenges, like frequently coming within days of not having enough money for payroll. I remember lying in bed some nights where I was so stressed out that I felt like time was slowing down as I stared at the ceiling and watched the ceiling fan blades rotate in slow motion. At one point, I even mortgaged my house to make sure I had the funds to give us a cash reserve. Sadly, at that point, I didn’t know much about raising money from investors.
Like many entrepreneurs, I kept going on a mix of passion, fear, and adrenaline. I had people that were counting on me. I had dreams of grandeur. I also had that mortgage and a payroll. No rest for the weary! If any entrepreneur tells you they’re not even a little afraid of things going wrong then they haven’t thought about the challenge enough!
So, how are things going today? How did your values lead to your eventual success?
Today, I’m the happiest I’ve ever been in my entire life. I may be fatter and balder, but I’m definitely getting smarter. Chameleon Collective, and my other businesses, are based on all the learnings leading up to this date.
We have no fixed offices, which reduced overhead costs and gave us broader access to talent. We are transparent and open, which forces an entirely new level of professional discipline. We have clear processes and solutions to common challenges. But most importantly, these companies aren’t just groups of smart people…they’re groups of intelligent, culturally aligned people — and this can make all the difference.
Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a very successful service-based business? Please share an example for each.
Although many factors contribute to creating a successful service-based business I believe these five things create disproportionate value.
People First. Be maniacal in your approach to recruiting. Insist on being part of the hiring process for every hire. Being smart and knowledgeable should not be enough to get in the door, insist on finding people that will be additive to your culture. Being part of the hiring process also gets people passionate about following you as a leader in addition to the company. When the company gets too big for that, find someone that is more than a hiring manager, make sure that everyone is interviewed and signed off on by someone that you know is a mirror image of you for screening people who are aligned to your culture.
Set The Tone. Always work harder than your team. You may think your employees work for you, but you actually work for them. If you set the tone, then they’ll do their best to match you. If they have to go the extra mile and you have set the precedent for always going the extra mile, then they will follow suit. In the beginning, the founder or founders frequently are the culture.
Hire Great Leaders. As I mentioned earlier, check your ego at the door. You don’t want to be a company that is essentially just “a genius with a million helpers.” Leaders drive change, leaders allow you to scale, and, most importantly, leaders can extend and better align your culture further down the organizational hierarchy. Also, one often forgotten perk — leaders also allow you to go on holiday without worrying about your company. Everyone needs a break!
Technology Empowers. Embrace technology or fail. Some service providers are worried about the impact of artificial intelligence replacing some service jobs. I believe the future will be about humans and A.I. working hand in (virtual) hand to more effectively deliver experiences. Technology is a force-multiplier for service people. Embrace tools like marketing automation to create better customer communication experiences or intelligent data analysis to better anticipate the needs of customers.
Document and Train. It’s not uncommon to see the inner workings of even a successful company existing solely within the founder’s head. Documentation isn’t fun for many people, but taking pride in not just what you do, but how you do it and then sharing it with the team will make your company successful beyond measure. Building great documentation and then overlaying it with effective training makes companies scale faster and with more consistent results.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I got my heart from my mother and I’ll always be thankful for the influence she has had on my life, but I got my passion for business from my father. Sir Richard Branson says that my father was his mentor, but I was fortunate enough to have him as my mentor my entire life until he passed away in 2009. I remember him teaching me to read financial statements from a very young age, or how to engage people, or even how to inspire them. Most of all, I remember what he told me about his mistakes and I respected that he could be very humble amongst the bravado.
My father and I really liked to talk about two things when I was growing up: business and women. We spoke every day and one particular day, I came to him to tell him about a problem I was having. He listened to my story for several minutes — nodding and listening intently, but never interrupting. When I finished he put his hand on my shoulder and looked me right in the eye and said, “Son, I’ve ****ed up things you haven’t even thought of yet.”
My father and I had a 55-year age difference. He was in his late 70s when we chatted. He didn’t always curse, but when he did, it was for effect. What he said was funny and made me laugh, but it was also quite profound. He let me know that any mistakes I was making were just part of the journey through life. It reminded me that I was going to make plenty more along the way, but his retort also reminded me that it would all be okay.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I think a lot of people would say they want to change the world. There are far more noble people in this world trying to save the environment, end hunger, or eradicate diseases. I’ve chosen to contribute to the world by trying to find a better way to work. I know that what we’re doing at Chameleon Collective has fundamentally changed the lives of many of the people within the collective.
I know not every business can function like this, but I believe we’ll see this new way of working spread to more and more companies and that it will improve the lives of the people within these new types of organizations. In fact, I hope this article inspires some people to challenge their understanding of how they believe a company should work. Truly, there has to be a better way, and more people need to challenge the status quo.
How can our readers follow you on social media?
I’m very active on LinkedIn and professionals can follow or connect with me here. Alternatively, I share most of my thought leadership through Chameleon Collective’s Facebook or Twitter account.