The ZIZO Effect

Ep 8 The ZIZO Origin Story: Part 1

• ZIZO Technologies Inc. • Season 1 • Episode 8

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Join us on "The ZIZO Effect," where we dive into "The ZIZO Origin Story: Part 1." In this episode, Andrew Reimers and Jimmy Chebat take us back to the roots of ZIZO. Explore Jimmy's entrepreneurial journey, starting from his early days in the accounts receivable space to the pivotal 'aha' moments that led to the creation of ZIZO.

Discover the transformative milestones that shaped our innovative platform, highlighting the unique challenges and breakthroughs. This episode is not just a tale of founding a company but a deep dive into the power of innovation and perseverance in the entrepreneurial world.

Make sure to tune in for this enlightening journey through the history of ZIZO, and understand the vision and hard work behind the gamification that's revolutionizing workplaces today. And stay tuned for part two, where we continue unraveling the ZIZO story.

Listen now and follow us @playzizo for more updates on transforming your work environment. Be Ready - It's Game Time.

Andrew Reimers:

Welcome back to the ZIZO Effect podcast, your ultimate source for all things gamified. Today we're switching gears to explore something truly groundbreaking. The origin of ZIZO and the visionary behind it, Jimmy Chebat. Join us on a journey through time as we uncover the genesis of ZIZO, starting from Jimmy's humble beginnings in the accounts receivable space back in 2008. From those early days to the pivotal aha moment when Jimmy realized it was time to shake up the traditional workplace, we'll be uncovering the untold story behind this innovative venture. So settle in and get ready to uncover the captivating story of innovation and inspiration. Get ready, it's game time. Hello and welcome to a very special episode or two of the ZIZO Effect podcast. Today we're taking a deep dive into the origin story of ZIZO. My name is Andrew J Reimers and my son and I once owned a collection of over 400 monster truck toys no duplicates.

Jimmy Chebat:

Very nice. I know that story goes a little bit deeper with some of that resale was an exciting venture that you and your son went on together.

Andrew Reimers:

It was. We had a. Well, I'm going to give credit where credit is due my son Everett he man. He's smarter than I am because he was trying to figure out a way to buy a new gaming PC. Nice, and I don't know if you're aware, but that shit's expensive.

Jimmy Chebat:

It is expensive.

Andrew Reimers:

And I don't have a ton of money just laying around to be able to blow on a $1,500 gaming PC. But he said what about those monster trucks that we have? Yeah, turned out, posted them online, went viral.

Jimmy Chebat:

We had quite a collection and we were able to get that pc for him, so I'm super proud of him and, uh, really happy with the results and, uh, it actually reminds me I have a couple things I need to ship out later today. Well, let's get into the episode, but first let me introduce myself.

Jimmy Chebat:

I'm Jimmy Chebat, co-host of The ZIZO Effect podcast, and I have a slight addiction to buying ice cream. Buying? Buying yeah, well, I mean when I was younger, I used to eat the ice cream as well, but for some reason I've tried to cut my diet or go on a diet and try to eat less sugars, but I still buy them. Now I have two kids and a lot of nieces and nephews, so they are more than happy to eat them.

Jimmy Chebat:

So nothing goes to waste. No, they get eaten. I mean, some of them do. They get freezer burned. They get opened once. I mean I'll still eat a little bit of ice cream here and there, but I still have to buy it and I almost feel like that movie Conspiracy Theory with Mel Gibson where he goes into a bookstore and buys.

Jimmy Chebat:

I think it was Catcher in the Rye. It was Catcher in the Rye. Yeah, I walk by that freezer section and I got to go in. I got to buy an ice cream. It's just my thing, I don't know why.

Andrew Reimers:

That was before he had all that hate in his heart. Who's that? Oh Mel.

Jimmy Chebat:

Gibson. It was a good movie. I enjoyed that movie. It was a good movie.

Andrew Reimers:

It was a really good movie. No and Catcher in the Rye honestly one of my favorite books.

Jimmy Chebat:

Really fantastic story. Probably just because I'm a weirdo, do you have like 40 versions, uh?

Andrew Reimers:

copies of them at all? I don't, but then I would have been worried. You know. What I do, though, is I also buy it frequently, because I lend it to people, and then I never get back. Catcher in a ride, yeah, and every once in a while I like to sit down and read it.

Jimmy Chebat:

I have to watch that movie again.

Andrew Reimers:

Maybe you are well, no, not conspiracy theory conspiracy.

Jimmy Chebat:

If you're buying multiple versions of that book just to give them away, man, maybe there's something there.

Andrew Reimers:

Well, maybe that could be for season two of The ZIZO

Jimmy Chebat:

Effect.

Andrew Reimers:

If you want to talk conspiracies, I can talk conspiracies, but I digress. So, jimmy, today, man, we're here, we're going to get down to business. All right, we're going to forego name the game this week. I'm sorry to all of our fans that are listening along and watching along at home, because today, as I said earlier, we're going to talk about the origin of ZIZO, but ZIZO wasn't always ZIZO, and I think our audience is going to learn a lot today from your history, your background, your past. So, jimmy, let's start at the very beginning. Man, can you tell us a little bit more? I know you've said in our first episode you introduced yourself and talked about your history, but why don't you tell us a little bit more about your early career?

Jimmy Chebat:

Yeah, so you know I've been an entrepreneur for as long as I can remember, but for a brief moment in history I believe it may have been my actually last job where I was employed by somebody else. I worked for a web development company and web technologies was the name, and you know I would sell. I love technology. I got my first computer very early. It was the early days where dial up and you know aol as well as you may ask what?

Jimmy Chebat:

brand, what brand of computer? I believe it was dell, okay, if I, if I'm not mistaken, and windows 95, um, I think was the operating I was a gateway 2000 guy. Yeah, it may have been prior to windows 95. Okay, you know. Don't hold me to it, my memory is shot that that's another thing, I'm the stoner here, man, come on.

Jimmy Chebat:

Yeah, so stoners have these weird memories. It's very selective. Like you remember certain things, I just forget everything. So I don't remember anything, but anyways. So I worked for a web design company and I loved it because it wasn't just I wasn't just selling like brochure websites, I was selling online solutions and I would work with my clients to help develop these solutions to bring their products and services to market, but hopefully, you know, be able to find a creative way to incorporate some of their operational requirements in there, or lead generation and lead capture. So it was the early days of the internet and when it was starting to really take and explode, up until the bubble burst in 2000. I don't know if you remember that.

Andrew Reimers:

Well, I remember that super, remember the ads in the Superbowl day.

Jimmy Chebat:

Oh, yeah, oh my goodness.

Jimmy Chebat:

Was it petscom? That was the big one. I think that was really what was the first domino in that bubble bursting. It was so overvalued and it really bring no revenue. And then all of a sudden, I mean, we went from. I was able to sell websites back then for like $20,000. And then, after the bubble burst it was, I couldn't sell it for 500. And because everybody and their nephew was building it out of their basements, it was just, and the company I worked for unfortunately went bankrupt and let me go. But from there I had to make a choice of where I was going and a lot of my customers that I'd built and developed really good relationships with were asking like Jimmy, where are you going? What's your next? Where are you landing? We want to come with you.

Jimmy Chebat:

It was my experience and expertise with technology and being able to communicate them that really is the reason why they went with us and I decided to start my own company then. So another early venture Chebat's Computer Consulting was the name of it. The old triple C yes, that C, yes, that was my logo. Triple C, c embedded in a C embedded in a C. And you know that was. You know, I built that pretty large. I had a lot of clients. I did it for almost five years before the next chapter in my career, but it was a great experience and my challenge was I couldn't scale it. I tried to hire people and to help me expand, but my clients wanted me and I couldn't duplicate myself, so I had a ceiling At least not yet.

Andrew Reimers:

Speaking of old movies, multiplicity. But every time you clone yourself it gets like a little bit dumber and worse. That'd be pretty good. Family Guy did a version of that.

Jimmy Chebat:

It was really funny and I think Stewie made him intentionally slightly not as smart or slightly dumber.

Andrew Reimers:

Okay, but it was a good episode. Good choice of words.

Jimmy Chebat:

I had other options.

Andrew Reimers:

No, that's super interesting. So you know, and I know that I know this story, you know, but I want you to sort of fill people in at home Eventually. So you built your business. You know you were having a hard time scaling. How did that lead you down the road that got you into the accounts receivable space?

Jimmy Chebat:

Yeah, so one of my clients actually a friend of mine referred me to one of his friends who was opening a collection agency and they became one of my clients setting up their network infrastructure. You know I was there for quite a long time as during their startup phase, setting up their machines, their networks, their security, and as they kind of grew, you know we would, we would add more and expand our network and they would ask for building the website and things of that nature. And I got really close with them and they were very green when it came to business and business savviness and I had a lot of experience. So my consultations went beyond IT and into the business side of things and eventually they wanted to expand and open a second operation and asked me to partner with them.

Andrew Reimers:

Oh, wow, wow, and your dreams came true.

Jimmy Chebat:

right, that's exactly what you were looking for no, I looked at the operation and one of the things that drew me to it was they were having fun, it seemed exciting and the revenue potential was very, very high, so there was no ceiling and that to me was kind of like. Part of my ambition was to grow and I had dreams of becoming a millionaire and a billionaire and growing and I really thought it was going to be through technology. But this was a good segue and you know, little did I know that it would lead me back to technology. But yeah, that's that's how I got involved ac counts receivable and, and we did wind up opening an operation together.

Andrew Reimers:

So you started on the backend. Everything that went into that seems like a lot. You mentioned you were a little bit siloed, but you, you know you had a little glimpse into the culture and what it's like to be on a collections floor. I've been on a collections floor, uh, but your role began to expand and you started to get more into operations. So what were your first impressions, seeing that side of the business for the first time?

Jimmy Chebat:

Culture shock? Yeah, yeah, I mean it's. It's very different than what I had expected. Can I ask?

Andrew Reimers:

maybe. What did you expect from that?

Jimmy Chebat:

I'd be really curious with executives, managers, kind of managerial level and above, even in my role on the back end, you know I'm dealing with vendors, sales reps, you know HR people and more professional right. So you know, getting into the operations now I'm working with the frontline workers yeah, I would say lack of accountability, excuse after excuse, you know. Motivation, you know, and favoritism. So I mean I can go on and on about the I would put it in quotes unprofessionalism, that kind of went on. But that was the culture. So it wasn't something that you know we created and but it was part of the industry as a whole's culture.

Andrew Reimers:

Yeah, you know the lack of accountability. I know it was big, but you know if you wouldn't mind running down, because I know some of these stories and I think it'd be super beneficial to people that are listening, especially if they run businesses and they deal with frontline workers. What are some of the greatest hits of excuses you used to get over the over the years?

Jimmy Chebat:

Oh, my goodness, I don't know, my goodness, what's our rating? Pg, or is it 17? Not X. I mean, I've heard you swear a few times, so it's not a big deal.

Andrew Reimers:

If Andrew does it, it must be okay right, that's the motto around here.

Jimmy Chebat:

No, I mean, there's a whole ton of excuses why, if you're trying to hold somebody accountable, why it's not their fault, you know the manager is sleeping with this person and that's why she's succeeding. You know the debt sucks and it's everybody's fault, but mine, yeah, just a lot of different excuses that, to me, I didn't have a lot of rebuttals for, because I didn't have the proof or the evidence to dispute it. And you know again my first role in operations, working with frontline workers, so learning.

Andrew Reimers:

Yeah, you know, and culture shock can mean so many different things to so many different people, but I can tell you the same thing. You know, when Titus first came to me about potentially getting into collections and I started to see that, you know, when I first got in there too, you know, I had a pretty good feeling about myself, but all of a sudden, I was just like, whoa, like these people are hungry, like I'm, I'm motivated, but these people are like sharks. Uh, you know it was. It was really uh, it was. There was a culture shock for me, too, when I first got into that space, jimmy. Let me ask you what was happening then. We have this culture where nobody has any accountability whatsoever. How did that make you feel and what were you experiencing trying to manage this?

Jimmy Chebat:

Well, it was frustrating, right, because you know I'm coming out of the back room, so to speak, and you know, having conversations for the first time with people Again, we're growing pretty fast, right. So there was a gap in, you know, human resources from a managerial standpoint. I remember as we were growing, you know, people were promoted to a team leader managerial role. There was no formal training, you know where. It's not like they were going through a manager training program. We were kind of going off the fly here. And so even myself you know I wasn't trained in people management. I understood business. I understand the business metrics and how to operate at the IT. Of course, Everything else I can figure out People was something new.

Jimmy Chebat:

So I was really frustrated when I would try to have a conversation with somebody and say, hey, we pay you quite a bit of money and you know, our expectation is that you would hit these numbers, but you're far from that. Now it's been a couple of months. How do we get you to those numbers? And again, those excuses that we talked about earlier. Well, it's not my fault. I'm doing everybody else's work. You know the phone rings. I'm the only one that's picking it up and I'm closing everybody's deal. All of my calls are being picked up or ignored, or they're skilled as I am and you know not talking them off. So it was very frustrating yeah.

Andrew Reimers:

No, I can only imagine. And you know it sounds like you needed real data. Now, you know we haven't really gotten into what you guys were tracking. Of course we know collections there's always a wide bottom line. We want to know how much money has been collected. But you needed real data and you really wanted to build it sounds like a culture of accountability. Right, correct, okay. So how do you get that right data to build that culture?

Jimmy Chebat:

That's a good question. You know, to build a culture of accountability and we've talked about this before it's about getting the right people and the right data and you know we used to measure a single metric, which is monthly goal. Right, and it's what I call a trailing indicator. You have a whole month to actually reach your goal. So, having conversations with people during the month, I'll say, well, I still have time. I still have time I have until the end of the month.

Jimmy Chebat:

I've got some things in a pipeline that I'm going to close and, oh, we're going to crush it this week. So there's always you give them a little bit of leeway because they're right, they still do have time. There is a monthly goal and the systems of record. Really, you know there's information in there, but you've got to go hunting and you've got to go digging and you've got to go deep into the systems of record to be able to extract information that is actionable, right and relevant. So what I decided to do is, you know, reverse engineer that primary KPI. Ding ding, ding.

Andrew Reimers:

And you know, come up with what we call leading indicators.

Andrew Reimers:

That's right. So reverse engineering you know we've talked about it here. It's a major part of my job and my working here working customers onboarding because we want to get past that primary metric. We want to get past that bottom line KPI, because it isn't a matter yes, of course every business is in it to make money, right? Yep, but there are behaviors and actions and sometimes skill and talent that goes in to that bottom line. So sometimes people don't even know what they're looking for. So I think it'd be maybe a pretty good opportunity here to maybe explain to everybody that's paying attention along at home or in their cars or whatever they're doing at the moment, to talk a little bit about the process of reverse engineering. So why don't you start us out? So, okay, we're going to say sales.

Jimmy Chebat:

Well, let me start from a business. Let's zoom all the way out. Okay, you're a business, so Okay. And whether you're B2B or direct-to-consumer, whatever the case is, you have an objective right, a primary objective, a reason why you got into business. And what is that reason? Why would somebody get into business for themselves?

Jimmy Chebat:

To make money To make money. And if you look at the financial statements, what line is that? Where is that line for making money? Right at the bottom statement in your income statement. It's top line is what? And then you remove all of your expenses. You can get cost of goods sold and all that stuff, but then you've got the cost of doing business right. It's all your expenses. And then if you subtract expenses from revenue, you get that bottom line. People call it EBITDA. It's before taxes and amortization, but it's really about that profit, right. So let's focus on the top line, right, because that's where we're in control. If you're part of a sales team, let's reverse engineer this. How do you bring in revenues?

Andrew Reimers:

Well, in order to bring in revenues, I need to make a sale.

Jimmy Chebat:

You got to make a sale. And when you make a sale, what do you bring in? Revenue, revenue, okay, so revenue is a KPI, right? So for each deal, there's revenue that's associated with that deal. So you can bring in 10 deals worth $1,000 a piece, that's $10,000, or one deal worth $10,000.

Andrew Reimers:

And who's to say which is better?

Jimmy Chebat:

At the end of the day, it's $10,000, right, but you also have a number of deals, right? So, whether it's one or whether it's 10, it's important. So then you have a third metric average deal size.

Jimmy Chebat:

So if your average deal size is 2,500, you got to close four deals to get to 10,000. If your goal is 10,000 and your average deal size is 1,000, then you got to get to 10 deals. So those are three metrics that are what I would call skill-based KPIs or result-based KPIs. But then how do you get there? How do you?

Andrew Reimers:

close a deal, well, you have to get a hold of somebody, and whether that's through phone calls, emails, generating leads.

Jimmy Chebat:

Contact, yeah, outreach. So those are, you know, you can call it effort-based KPIs or behavioral KPIs. Number of phone calls, number of emails, amount of outreach Maybe you combine the two, right, that's a KPI. Those are all individual KPIs. When you're making those phone calls, now I can pick up the phone and make 100 phone calls all day long. I believe in you. I mean I can call the Weather Channel and just listen to the weather. Do you remember that? 844-4444.

Jimmy Chebat:

Yes, you'd be surprised, like when we started measuring that and the number of people that would just call the Weather Channel, listen to the weather and have that added to that. You have to do some auditing. Oh man, so yeah. But also, what's more important is when you're making phone calls is right party contact? If I'm just calling my friends, my family, relatives, whatever, or even their friends and their families in collections, it doesn't matter because you're not talking to the right person. So, rpc, right party contact, that's another metric.

Jimmy Chebat:

When you get them on the phone in collections, you can get promises to pay, right, yeah. So people telling you yes, yeah, no, I'll pay that off. I'll pay that next month. You know it's what we call throwing shit at the wall, seeing what sticks right. So we do measure it. It is an important metric right. Throw up a hundred thousand dollars on the board. If 10,000 stakes, great, you hit your number if that's your goal. Some people need less. Some people will throw 50 up on the wall, some people will throw 20 on the wall, but that production is a KPI and all of those are what we call leading indicators. We have an understanding of if you do this behavior, if you put in this much effort and you bring in these leading indicators, then ultimately it will hopefully lead to success and we'll be able to identify a lot sooner whether or not you're on the path to success or not.

Andrew Reimers:

Yeah, and I bring it up all the time. Part of those leading indicators is something that I love and it means so much to me is because I watch it. Not only does it help from a business and a managerial standpoint, but I see it as a way to build relationships with your workers.

Jimmy Chebat:

It's what I used to call the 80-20 rule. Okay, data will tell you 80% of the story. It will never tell you 100% of the story. You still need that human interaction. You still have to have people management Because, like you said, if I'm looking at data and I'm saying, andrew, what the frick? There's three days in a row, you have zero productivity. What's going on? And you look at me like Jimmy, I just buried my uncle. I was off for three days. What are you talking about? How did you not know? And you know if I'm secluded and in that back room not really paying attention to my people, and just the data? Again, it's not going to tell you the full story, but it will tell you 80% of it.

Andrew Reimers:

And I know that you always do have a solution, so you're always building the next thing. What were you building here?

Jimmy Chebat:

you building here, you know what I wasn't actually building at this point. I was learning, I was discovering, and, for me, I'm trying to build this culture of accountability and I realized that I'm losing these arguments or these debates with individuals who are giving me excuses, and I didn't have a rebuttal, and so I needed to collect data, and so here was just a discovery right. First we started identifying, like, what are the things that I need to measure? Then I need to start measuring it, what systems are they coming from and how do I collect that information. And so, to me, this was an exploratory period where I'm just discovering how to manage people using data, and it really wasn't an objective of hey, I got to go build a solution. I have to discover for myself how to solve this problem of this workforce culture that I felt was unaccountable and we were losing money as we were growing, as opposed to the opposite.

Andrew Reimers:

Yeah, no, it makes total sense. So then, I guess my next question would be when was your aha moment after starting to dig through this data, after starting to find the metrics that you knew you wanted to track, when did you realize you might be onto something?

Jimmy Chebat:

Well, there were several aha moments, and I'll tell you the first. And it came when I finally had aggregated enough information where I can analyze it and have something that I can dispute.

Jimmy Chebat:

So I brought somebody into the office and had the same conversations that I've had a hundred times before, right when, in which I was talked off the majority of those times, you know, apologizing that I need to do better or we need to do better as an organization when finally somebody was coming to me with those same excuses I'm working everybody else's deals, you know nobody's closing my deals.

Jimmy Chebat:

And I'm like, actually, I turned my screen, I said here's the truth and here's, you know nobody's closing my deals. And I'm like, actually, I turned my screen, I said here's the truth and here's, you know, here's what actually the number of deals that are in your queue that were closed, that somebody else actually closed those deals for you. And here are all of the deals that you close and the majority of them were actually your own accounts. So you're not doing the work that you're putting in. The effort that you're putting in is actually benefiting yourself, not the excuse that you just told me and the aha moment was, you know their response, their physical response, their body language, and it's like their eyes bugging out, like looking at my screen, looking back at me, and they asked the question.

Jimmy Chebat:

You can see that and for me it was just went and pulled back that curtain on Oz, my man it felt so good, you know, to finally have something that was undisputable, right and empirical in the sense that you can't dispute this data. This is real information, right, and you know he didn't have an opportunity at that point to challenge that data. He had to trust it at that point that it was accurate information For me. I knew it was accurate, I collected it myself. But then I tried it again multiple times and I was getting the same response and that kind of collectively was the aha moment for me, like I'm onto something.

Andrew Reimers:

Yeah, you're onto something there, and I know that there's a history in Buffalo being a collections hub for sure for years and years. I mean I don't know how far back it stretches. One thing that you know, I think you would say is consistent throughout all collections agencies, especially back then, was a whiteboard. You'd go up and you know you as a collector, you close a deal, you walk up to the board and you put on your. I collected $10,000 for this account. Here's the account number. Everybody celebrate me, I'm the best and you go sit back down. But that's a very day-to-day thing.

Jimmy Chebat:

Yeah, and I mean an important part of the culture itself. And you see that ubiquitously across not just call centers or collection agencies, but sales teams right A board where they have information that they share publicly and it serves multiple purposes. Right, one, it's public information, that a status update. Where are you today? Where are you for the week? Where are you for the month? It depends on what you're posting on the board.

Jimmy Chebat:

For us it was a daily thing that in the morning we would wipe the board clean and we would start fresh. And every time somebody closed a deal they would take that walk up to the board and they would use a specific color dry erase marker to write the summary of the deal. And you know, based on the color, you know it would communicate whether it included green money, you know post dates for the current month or all future cash. And it's an opportunity to get recognized. Right, it was what we call peacocking. Hey, flaunt your feathers, spread them out, let everybody see you. And the more times you would walk up to that board, especially in a single day, the more recognition you would get. And people you know they paid attention to that right and they love the opportunity to walk up to that board as managers or directors or operators you know, owner operators we use that board as a snapshot of current day's productivity.

Jimmy Chebat:

If I seen an empty board Current day, current day If I seen an empty board, I'd know we were not doing well. If I seen a full board, we're doing great. And I would be looking for names that are repeated that I got to go and find out who those people are or make sure that I recognize them personally. But you're right, it was only for the current day. And so, as I said earlier, we would wipe that board clean literally in the morning to start the new day fresh.

Jimmy Chebat:

But before we would wipe it clean, we would actually copy the contents of that on a sheet of paper and then we would store that sheet of paper in a file cabinet. And I remember another one of those aha moments where I seen this stack and I was like man, there's a lot of information in there and if I can harvest this information we can get some real good data. And so the next aha moment really I understood the power of the whiteboard I didn't want to replace that recognition tool, but I took the data that I was collecting and I made it public and, you know, built a web browser based tool that would allow me to display all of the data that I was collecting and making it public. And that was the next evolution of the product that I was building.

Andrew Reimers:

Yeah, I mean that's and that's amazing that you recognize something that I know you said it was a culture shock and everything was just screwed, you know, but you were able to recognize the importance to those frontline workers, the meaning of that walk up to the board, the meaning of that recognition, and you were smart enough to keep record of that because, from a collector's point of view, yesterday was gone, yesterday didn't matter anymore. It's all about today.

Jimmy Chebat:

Yeah, and from a business standpoint, it's not Every day matters, of course. B but it's a cumulative total of all of productivity. That really is what impacts the business's bottom line.

Andrew Reimers:

So this is when you decided to build your product right.

Jimmy Chebat:

Not yet we're getting there. I mean again I was building something right. and it wasn't necessarily a tool that I was looking at to share with the world. This was something that I was. I'm looking for a solution for my own operation to help me accomplish my goals of building a culture of accountability, and to do that, I just needed to collect information that I can use in my rebuttals, and you know so. You know the steps that I took in terms of making it public and then addressing. You know that, or at least identifying that the whiteboard brings a lot of value, not just informational, but also from a recognition standpoint. So maybe you're right. Maybe this is when I started really thinking about okay, let me build a solution, and yes, this was my first. I haven't built it yet, but I'm building, I'm working my way towards that.

Andrew Reimers:

So you had your own internal system in place that you were working on building. You obviously decided to continue to make that information public. Uh, you wanted to keep that, uh, that culture. You wanted to have that culture of uh accountability that we talked about earlier and bringing that. So, once you had your solution in place for your business, what were the changes you started to notice in the culture?

Jimmy Chebat:

Well, there was a lot. There's a shift from this glorification of the top collector just perceived top collector, of somebody who's finishing a month big to more of a data-driven culture Less excuses, less finger pointing right, which is what I was driving towards. I was driving towards a culture of accountability, and so taking accountability was a big part of you know and taking responsibility for your own actions. I started seeing that shift. There's no more excuses.

Jimmy Chebat:

I'd go to bring somebody in my office. They would say I know what you're going to talk to me about, I know why I'm here, I'm going to do it. They already knew and that was a really major moment in the evolution of this is when people already knew the reasons why you're going to have that conversation with them and they knew that they were failing before you can tell them that they're failing, or they knew that they were succeeding before you can go and congratulate them. They already knew what to expect when you were coming up to them some form of recognition. So, yeah, there was a considerable shift internally in terms of the culture that I wanted to develop and it was working Well, with such positive internal results for you.

Andrew Reimers:

So is this? When you decided to go to market, you knew you had a product and this was it.

Jimmy Chebat:

Yeah, no.

Andrew Reimers:

I didn't decide to sell this.

Jimmy Chebat:

It was not my decision. I was actually almost had my hand forced to do that, and I'll explain. We never solved the problem of attrition. Actually, that wasn't a problem for us Back in the day. We didn't have a human resource issue. You know, there was enough people who were looking for jobs and were actually looking for jobs in the contact center space, specifically collections in Buffalo, we had a huge hub.

Andrew Reimers:

Oh, I remember. I mean signs everywhere. It was one of the best paying jobs you can get in Western New York, especially, you know, if you didn't have a college degree or it was something that you could really take care of your family, you could pay for your rent, you could pay for all that without having to work multiple jobs.

Jimmy Chebat:

Yeah, I mean we paid well above minimum wage. Right, it was a desk job, so you weren't working flipping burgers or working in retail. You had unlimited earning potential, because there's usually a bonus structure also attached to a relatively high hourly rate, and you can continuously increase that. So there was no retention or attrition problem that we're dealing with. Although the industry did have high turnover, it was only due to poaching People. And there was this thing that people did they would take their checks and their pay stubs and they would bring it to another employee, because everybody knew everybody in the industry. So all of your friends worked in collections, so you would see, find out where they were and hey, how's the debt, how's the compensation, how's the bonus structure, how's the culture, how's the environment, how's the management? And they would just jump ship and in order to negotiate a better wage, they would just bring their pay stubs and declare that they're a top-collector.

Andrew Reimers:

From the best tax season month.

Jimmy Chebat:

Yes and show them, and they would also sometimes negotiate like, hey, I'm earning bonus. The industry would always hold bonus checks until the end of the following month and it was a way to keep people within that organization, because if you earned a bonus and you left, well, you're not going to be able to collect it. I don't know from a labor law standpoint whether or not that was legal.

Andrew Reimers:

Dude, it was the early 2000s man, it was the wild west, wild west.

Jimmy Chebat:

Yeah, so. So, in any case, I got a call one day from another operation and they said hey, you know, we've got one of your old collectors here and they mentioned that you guys use a product called the e-whiteboard. Do you have their phone number? You know we'd like to use it here, or at least like to get a demo. And I said that's not, that's that's. I don't buy it from anybody, that's something I created. And they're like oh well, are you selling it? And at that time time I wasn't prepared to sell it, it wasn't built to scale yet. And you know, I think I said hey, I might consider it. And then, you know, after three of those phone calls, I was like okay, I definitely have something here and I'm I probably should bring this to market.

Andrew Reimers:

Oh, that's amazing. So tell me what were some of the highlights, highlights and successes of the product early on, we had a lot of success in terms of sales.

Jimmy Chebat:

Bringing it to market was a great experience initially. Let me kind of take a step back and talk about how I designed this thing. You would, when somebody every company has their systems of record. Those would include your phone system, your dialer system, your collection software or CRM, your portfolio management. Whatever you're working with in tracking those things, in whatever technology you're using, are your systems of record. You would enter that information there. We actually had our own data entry point. So when you close the deal, you would enter the much of that money is green money, how much of that money is postdated for the current month, and categorize that from a reporting standpoint. And so we were able to produce reports and dashboards of information. That was not available in the other systems of record. However, it required you to enter your data in both your system of record as well as our system. Yeah, and what do we sell? Trust, trust, yeah, one for four finally.

Jimmy Chebat:

And one of the big parts of being able to have trust is having accurate information, accurate data, and the worst thing you can have is inaccurate information, because you know what that leads to excuses, it allows people to say, hey, that's not accurate, that's wrong and you need to get your shit together because, uh, my compensation is based on that. Yeah, and there's so many different ways that they can twist that and leverage that in terms of making themselves look better and making you look bad as an organization.

Andrew Reimers:

What were some of the other internal results you started to see?

Jimmy Chebat:

Well, I know that my objectives were to build a culture of accountability first right, and I wanted to do it through objectivity, through transparency, through fairness, through equity or equality right, treating everybody the same. A reason why I also developed this is because I wanted to standardize the way we managed, where all of our managers are managing the same way, that it was not subjective, it wasn't, you know, based on internal biases or personal biases this person's friends with this person, this person's doing.

Andrew Reimers:

Whatever I'm getting the bad, you know, I'm getting the shaft. Yes.

Jimmy Chebat:

Correct, and that's another reason for building trust. Another way to build trust right Between an employer and employee is for them to feel like they're being treated fairly and equitably, and so that was a really big part of building that into our platform.

Andrew Reimers:

So objectivity and fairness being built into the whiteboard super important. We've had full episodes in the past talking about why that's important, so people can tune in and listen there. But you know this is a gamification podcast, jimmy. So I have to ask is this when you first started to realize and identify that gamification was?

Jimmy Chebat:

needed gamification meant. I don't even know if it existed.

Jimmy Chebat:

We know the history of the term, but for me personally, I didn't understand that that's what I was doing. I did notice very early as an industry, the industry is gamified and what I mean by that is there's always some form of competition. Again, when I first made information public, they're basically lists, right, right, and when you set that list in descending order, it's a natural leaderboard. Right, here's the top producer in this category and here's the top producer in this category and you'll know from first place, all the way to last place, what position you're in. Those are leaderboards. That's part of gamification.

Jimmy Chebat:

But we would always have contests. But now we would be able to have contests with more leading indicator metrics, so who can make the most phone calls, who can do it in? You know, we would have like hourly contests and, you know, half a day contest and we would have it multiple metrics and be able to use this system of record. But also, people were challenging each other, right, and they knew that they can trust this data source. That's where, you know, I started to see that, hey, this could be used, you know, as an engagement tool and to also not really engagement wasn't really a thing back then. It was more about how do I maximize productivity, and I knew that the effectiveness of contests right, hey, let me build this contest and I can squeeze way more productivity. There's inherent problems in that right. It's only a handful of people that are going to win, or one person is going to win each contest. So we didn't have. You know, although we had full participation, um, only a few people actually got to actively participate in the rewards.

Andrew Reimers:

Oh really.

Jimmy Chebat:

Yes.

Andrew Reimers:

So only a few people would part, would get to participate and be rewarded because they were top performers. So what did that do to the other people in the office?

Jimmy Chebat:

I mean, it became somewhat counterproductive in a sense, because they would be demotivated once they seen the same people winning all the contests and they'd say why even bother? We already know who's going to win. And so we would get creative in our operation. We would change things up where it's not necessarily the top producer that wins. Maybe we created a raffle where, hey, for every deal closed or for every hundred dollars in revenue you bring in, you get a raffle ticket. We would do a Chinese auction where there's bags and you would just put your raffle tickets in the prizes that you wanted. But then again even and then what happens? You got a low performer winning the big prize and your top performers are pissed off because they're saying how's that even fair? So yeah, it's difficult in a manual setting to make everybody happy.

Andrew Reimers:

So you're on the market, everything's going really well. You have a lot of businesses buying your product, changing their culture, you know, changing building that culture of accountability, putting that transparency out there for everyone to see so nobody can hide behind their excuses, nobody can hide behind anything, which is amazing, and I think it's really important to recognize the impact that you had on the local culture here in the Buffalo collections world. I even knew other people that came to work with us or went to other places that were using e-whiteboard, but of course, we're not here on the e-whiteboard effect podcast. What challenges did you encounter once the whiteboard was on the market and had been going for a little?

Jimmy Chebat:

while, well, you got it right, we sell trust right, and trust has a lot to do with the data. And once the data became corrupted, right when it stops matching with your systems of record, and whether through human error, lack of management, I even seen in certain cases where I felt that the data was being sabotaged because certain managers, you know, had a certain power and they were losing that power, their value, because a lot of the value of the information was there. And so, in any case, once people lost trust in the data, it no longer became effective and you couldn't use it as a tool, a performance management tool. So we had churn and eventually it was 100% churn where we lost every single client that we had onboarded, and it was very difficult to accept. But I understood, you know, and that's where the the mantra we sell trust was born from is because you need accurate data.

Jimmy Chebat:

Garbage in, garbage out. If you don't have good, accurate data, you're not going to get any results from it. So we did wind up pulling it off the market and we didn't stop using it. We kept using it in our operations and we continued to use it until I sold my agency, the day that I sold my agency, but I decided, if I'm going to go back to market with this, it's going to require direct integrations with the systems of record, because there should only be one source of truth.

Andrew Reimers:

Wow, I mean. So that's amazing. Even though you did pull it from market, you still believed in it enough to be able to use it internally, make sure it was working properly, because it was doing everything you intended it to do.

Jimmy Chebat:

But is it fair to say that you were just kind of stuck with the limitations of the technology of the times? Yes, maybe resources right to continue to develop that integration and really the vendors right being able to access that data. So some of the vendors were legacy products right, they didn't have APIs like we do. Nowadays. A lot of the technologies are built with API integration capabilities where you can connect to that and extract data pretty easily. But yeah, no, we continue to use it and we continue to evolve the product as well. It never stopped being produced. We had a great team of managers and directors and they would contribute to its evolution. I mean, they would say can we have this report, can I see this, can I see that? And we would ask we had three offices, so we'd have a diversity of thought and information and as long as we had everybody on the same page, that would say yes, we would definitely use it, we would build it right into the system.

Andrew Reimers:

So no, that's really interesting to me that you continued to work on it, because a lot of people at that point maybe would have just given up and said you know what? The dream is dead. I tried, I failed. I'm going to go do something else, and I know that that's not you and it never will be you, of course. But what would you say then? Because you talked about the evolution of the product even after it was off the market. What was maybe? Give me an example of the coolest feature, maybe one of the best features that you ended up adding to the product after it was already off the market.

Jimmy Chebat:

Yeah, and to your point, failure is a really big part of success. I mean, every experience that you have, whether you're succeeding or you're failing, is part of your overall experience and it helps you, especially if you're able to evolve from those experiences. So one of those experiences was a conversation or a debate that I used to have with my brother that led to you know one of probably the best feature, that led to the evolution into ZIZO of our product, and that debate. You know he would, I guess, subjectively decide you know I'm sure he used some data points but decide. You know who his quote unquote superstars are and what he would do is. You know he would treat those superstars very, very differently than the rest of his workforce and that ultimately led to a lot of churn.

Jimmy Chebat:

We got a lot of good talent from his office that would come over and they would see that our operation was very different. Everything was about fairness and equity, equality, where people were all treated the same regardless, and I would disagree with them saying everybody needs to have the same opportunities to succeed, otherwise you're setting them up for failure. You never really tap into some of that hidden talent until there was a point and we were a debt buying model, meaning that we were an active debt buyer, we would purchase our inventory and we would place it and then, after we were done with it, we would actually sell it to the market in the marketplace. And then there was a huge change in the market where the cost of the debt was going up considerably and I got to a point where, for the prime paper, your top inventory was getting so expensive. I had to decide like I can't waste this on everybody here, maybe your brother was- right, maybe he was right, like I mean, this was going to be like.

Jimmy Chebat:

These are, people are just starting and I know that their performance is well below our standard and they're still learning. And but how do I, how do I compromise my policies? How do I compromise this model that I've built in this philosophy of everybody's treated equal? And I had that next aha moment and it was like I know how to do it. I know how to give everybody the same opportunities but still provide the top performers the better quality of inventory. And the way I did that is I did that objectively. So I created the eWhiteboard manager and this was an algorithm that we set. We had, at that point, only four ranks. So now in ZIZO, we have 25 rank levels. We do, yeah, oh my gosh. So the beginning was very elementary and basic, but we had and I copied Madden and we have the Madden franchise, which I played. I grew up playing that since the very beginning Rookie, pro, all pro and superstar.

Jimmy Chebat:

So we had those four rank levels and everybody started off as a rookie. And then we created expectations across all of the different KPIs that we were measuring, all the submetrics, all the way up to the primary metric, and we would say here's what we expect from you on a daily basis as a rookie, and it would be more when you're a pro. It would be even more as an all-pro and, of course, the highest expectations for superstars. And at the end of the month you accumulate experience points based on your ability to meet those expectations or exceed them. And as you accumulate enough experience points, you would get promoted. And as you get promoted now you get treated differently.

Jimmy Chebat:

But everybody had the same opportunity to move through those rank levels and it was objective. It wasn't somebody deciding subjectively or through their own personal biases or opinions. It was. Here's the data, here's how many experience points you earned, based on your performance. And once you reach that level, you get in. And then we started building all of our policies around this rank level system, and that was really truly that when gamification really started to take shape for us.

Andrew Reimers:

Wow, I mean, it's so cool. The product just continued to get better, you know, over time. And I don't know if you can smell that in the air, but I'm starting to smell a little bit of ZIZO in here. Yeah, I think so. Who's cooking ZIZO? But I still don't understand, because I know that there was a transition. Yeah, because right now we're at where. What year are we in?

Jimmy Chebat:

Well, I, I mean, I can't tell you exactly when um, I probably could go back and pull that information, but I think I know where you're going with this is when did I decide to make it zizzo, right, right, and, and I gotta tell you there's there's one key point where ZIZO concept, the-imagining of the whiteboard was born, and it was at a conference in Las Vegas in February of 2018, where I had a conversation that sparked the Zizzo revolution.

Andrew Reimers:

Well, jimmy, I think that's a great place to stop. As I said earlier, this might've been two episodes. Hell, it might even be three episodes, who knows? But, jimmy, it has been really cool. I think it is so beneficial and so valuable for everybody that's listening, because if you're just starting a business, if you've been running a business for 20 years, no matter what it is, there's something for everybody in there to learn from your experiences, your trials, your tribulations, your culture shock and everything. And I really appreciate you sharing all this, and I can't wait to get into ZIZO and everything that that can do, including the origin story Even before me. I want to learn even more about what was going on here before I showed up, you know, and really changed the game, but I want to thank you for being here.

Andrew Reimers:

Everybody, tune in next week for the second half of the ZIZO origin story. My name is Andrew Reimers, this is Jimmy Chebat, and we'll see you guys down the road Wrapping up this episode of the ZIZO Effect podcast. We looked into the origins and the driving force behind ZIZO, tracing its roots from Jimmy's early days to the moment of inspiration that set it all in motion. But this journey is far from over. Join us next week for part two of the ZIZO origin story, where we'll continue the conversation right where we left off, the beginning of ZIZO itself. We'll uncover the pivotal moments that shaped its inception and set the stage for its transformative impact on the workplace. So mark your calendars and tune in next week as we continue the origin of ZIZO. Get ready, it's game time.

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Andrew Reimers

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Jimmy Chebat

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