What Happens When CEOs Delay AI Adoption in Engineering Teams

TRANSCRIPT SUMMARY:

00:00 – AI Replacing Traditional Engineers
00:56 – Terravision Company Introduction
01:53 – Childhood Entrepreneurial Beginnings
04:54 – Lessons From Failed Startup
07:16 – Startup Focus And Leadership
10:09 – Building Terravision Over Time
13:05 – Staff Augmentation Explained
17:00 – AI Disrupts Software Industry
20:51 – Creating Cognitive Engineering Framework
26:16 – Managing Team Transformation
31:23 – Achieving Productivity Gains
38:13 – Writing The Cognitive Leader Book

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FULL TRANSCRIPT

Jeff Holman (00:00)
Software is not going to be done this way anymore. What is going to replace your work is another engineer that choose to harness AI. It's obvious that it's obsolete what we're doing. You start seeing bottlenecks on the process. You need to think and orchestrate and be the strategist.

Ricardo Arcia (00:16)
Welcome back, everybody, to the Breakout CEO Podcast. So good to be here with you again. I'm Jeff Holman. I'm your host. I'm an attorney with Intellectual Strategies. And I love bringing the behind-the-scenes insights and details to you about, know, I would do it with the people I work with as clients, but their information is confidential. So we invite guests on and we get them to share their stories about when they were navigating tough decisions, what types of perspectives they've learned, how they've

gained and applied insights in their business. And today we get the privilege of having Ricardo Arcia with us today. Ricardo, it's very good to have you here with us today.

Jeff Holman (00:55)
Thank you, Jeff. My pleasure.

Ricardo Arcia (00:56)
Yep. your company that you're leading today and have led for some time now is Teravision, right? Fantastic. So Teravision, as I understand it from our conversation before, is it's a near-shoring software development company. And you've been navigating everything from building teams to ⁓ long-term, you know, you've been around for a really long time. You've seen a lot of things going on. You've helped a lot of clients.

Jeff Holman (01:03)
Yes.

Ricardo Arcia (01:25)
And more recently, all of the opportunities and disruption that come along with this whole AI thing, right? So you've seen quite a bit over the years. Yeah. Did you always want to run a business? Was that kind of in your nature to say, I'm going to graduate from school or move out of the house or whatever it was? At some point you're like, I'm always...

Jeff Holman (01:37)
Yes.

Ricardo Arcia (01:53)
I've always wanted to run a business. I've always wanted to lead a business, build a team. Is that your nature?

Jeff Holman (01:59)
When I was nine, I started selling stickers that I built my own on the school. I didn't know the word entrepreneur by then, but I've been all my life that way. ⁓ After I finished college, ⁓ I decided to work for Corporate America for a while to learn. But then as soon as I thought I was ready, then I pushed two or three businesses that I...

created that they fail. And then finally, I got into television 23 years ago and gladly it's been successful since then.

Ricardo Arcia (02:37)
Wow, that's a long time. Congratulations on making it over two decades now. That's fantastic. So I'm curious. I know a lot of people have these stories about when they're kids and selling stuff. I don't relate to that. was a terrible, I went out and tried to do like sales or something one year or raise some money to buy whatever it was. And I ended up refunding money to a few neighbors who were gonna buy something from me and I never actually fulfilled on my end. I don't think I was ever good at sales. But I'm really curious about this.

time in people's lives when they, especially when they've gone to school and they go work, you know, the normal job, the expected job, the corporate jobs, and they get that. What was it about you when you said to yourself, you know what, I think I can do this, or I think I'm ready to try it on my own? What was the prompt for you at that moment?

Jeff Holman (03:29)
Well, as I mentioned, I always been with that entrepreneurial spirit inside and all the time when I was working in a regular job, and I'm an electronic engineer by training and I was working for a telecommunication company for a while. And then the internet hit that we're talking about 1998, 1999. by then all the time I had side businesses where I was

building a new company with some partners or something. it was, I think I knew it was just a matter of time. And then in 2002, we decided that I'm originally from Venezuela. So my wife and I got married and decided to move to the U.S. And when we moved, I said, you know what, this is a time to go on my own. And I cannot tell you, it was easy. It was really hard, but it was the right time.

And I have some interesting experiences that have helped me grow since then.

Ricardo Arcia (04:34)
Yeah, I'd love to. We're going to get into some of those. Is there anything that you think you took away from those experiences, those, you know, those attempts, those tries that didn't work out as well as you wanted to? What did you take away from ⁓ those early business attempts to make this one more successful?

Jeff Holman (04:54)
The first thing I learned was that you need to have ⁓ a correct strategy or a proper strategy. One of the businesses that I failed, we built something called 48hours.com. And what it was, was imagine an Instacart by then. We're talking about Venezuelan kids in Caracas. And then the internet was already there. And you went to 48hours.com and you asked for whatever you wanted. And we went, pick it up from the

supermarket and take it to your home in 48 hours. That was the deal. But then I was in my telecommunication business. My partner was in their telecommunication business and we didn't think what would happen if this really hits, if everybody started asking for this. And it was a mess when it happened. We started getting 20, 25 requests every day and we had no way to fulfill that. So we decided to close the business because I mean we died of success in that case.

It was, but we didn't think about, we didn't strategize of what would happen. We didn't know that was going to happen and we didn't think it was going to happen and we were not expecting and we were not prepared. since then, I've been trying to be five steps ahead of whatever is going to happen and see it, try to see every scenario before we make a decision.

Ricardo Arcia (06:15)
Yeah, that makes sense. think I see a lot of that with people that I've worked with, ⁓ friends who started businesses on the side and, you know, nothing wrong with that. I think it's great that people do it. They have the energy to do it and the interest. But there is that problem of kind of ⁓ divided attention, right? Like you're working a full-time job and then whether it's problems in the business that need attention or maybe even the success, the unexpected level of success of the business that needs attention, you now find yourself... ⁓

at work probably in the nine to five and saying to yourself, how do I find the additional time I need to actually either fix the problems or fulfill the orders that are coming in? that is a struggle for a lot of people and they don't realize that until they've tried two or three businesses and said, you know what, really should stick to my knitting, right? Or stick to what I'm familiar with or something, stay in my lane, whatever.

Whatever phrase you want to use for all of that.

Jeff Holman (07:16)
Yeah, let me complement what you're saying. We work, especially at the beginning of television, we work with lot of entrepreneurs to build minimum viable products, new software products. And I realized that every time we had ⁓ a group of entrepreneurs that came and they didn't have at least one person 100 % focused on the project, they were never successful. It was all the time.

And then at a certain moment, I started telling them when they came, three great guys, one of them from Procter & Gamble, one of them from another place. They all knew the whole thing they needed. And then they came and pitched me and tell me, yes, I have here, they have a million dollars to do the project. And I was, guys, first you need to decide who's going to run this. I I've been seeing this for too many times to see that you're going to build your product. You're going to have it. You're going to start.

having success or not success, this is going to badly. I mean, if you have somebody there, 80 % of you is going to fail. So imagine if you don't have somebody there. So that's something I've seen a lot in our industry.

Ricardo Arcia (08:29)
Yeah, that makes perfect sense. see that when we get brand new innovators coming to us saying, I want a patent, I want to trademark my brand, I'm going to start this new product, this new e-commerce product. ⁓ It's really exciting time and it's easy to be like on the, yeah, I guess kind of the early stage. Everything looks like it's going to work out just fine because your spreadsheet looked good or whatever it is. But I've had a lot of those conversations. I'm like, now you know that this is like the time is going to go by fast.

Money is going to go quickly. if you don't have the ability or the interest to stick with this long term to actually put might be a hundred thousand dollars into the, you might think it's a $5,000 project. It's not, it's a hundred thousand dollar project to get going and it's going to take way more time. so it's really interesting to see that, to have those conversations. think I know exactly the types of conversations you've had with some of your potential clients.

Jeff Holman (09:19)
the

Ricardo Arcia (09:28)
Well, tell us a little bit more about Teravision then. What is it that you do? How has the business been built up over the last 23 years? Just a quick note about our guests. I host the Breakout CEO podcast to share behind the scenes insights from scaling businesses. As an attorney, I see the real challenges leaders face long before success becomes public. But client stories have to stay confidential.

So we invite guest CEOs to share their own moments of struggle and success. I'm so grateful to our guests and my team at Intellectual Strategies for making this show possible. Now, let's get back to the show.

Jeff Holman (10:09)
Well, we started the business when I moved here to Florida in 2002. All the magazines and everything I was reading about, it was about doing outsourcing, software outsourcing in India. By then, I mean, I'm talking on my industry and what I know. I'm a software engineer, electronic engineer. And what we realized by then was that the internet was going to start making

a lot of disruption in different industries, one by one. And we created the company with the idea of being a good partner for these companies in managing this disruption, what you call digital transformation in a way. So that's what we did. At the beginning, we started working a lot with entrepreneurs and doing minimum viable products. We started doing these new applications. ⁓

And typically 90 % of our business came from those type of projects. But then over time, we realized that that segment wasn't, I mean, as I mentioned before, 80 % of them fail. So you lost 80 % of your clients just for the sake of the market. So nothing you did, but they are going to run out of ⁓ capital. So then we moved to the mid-size market that is the one that we attend now.

typically work with companies in US and Canada that have engineering teams from 25 to 300. That's kind of the sweet spot. These are companies that really need help from an engineering perspective, either with these teams to help them accelerate a project or with the specific engineers, insert them into their teams so they can accomplish

whatever they're looking for. So that's pretty much the story just before AI hit us that I think it has to be another part of the conversation. But before that, that's what we've been doing for the last 20 years up to 2024. ⁓

Ricardo Arcia (12:24)
Okay,

so you guys really supplement existing teams with additional talent, if I'm understanding that correctly. So you're not necessarily out there looking for direct consumers who want software built for them and doing that type of software development. You're more embedding with an existing team or building in parallel with an existing team that has their own department.

What types of teams do you deploy to these departments? Is this like, you know, three to five engineers? this 20 engineers? Who, who, who hires you and what do they, what kind of requirements do they have?

Jeff Holman (13:05)
Well, typically imagine that you, I don't know, you are a logistic company and you need to build an application to ⁓ know how much ⁓ fuel is in your tanks, in the tanks of your clients. And you hire a company like us and what we do is we build a team with a project manager, somebody from product that help the client ⁓ build these requirements.

And then we design the whole application. have the team to design the application. We have the developers to build the application. We have the quality assurance engineers to test the application. And then we have the engineers that are able to put this on the cloud that are called infrastructure or DevOps. So we build those teams for them to do that. Or, and that was like the most type of business that we did at the beginning. But then,

The companies have been, every time, wanting to have more control of what they do, especially the ones in the segment that we work, the mid-size companies. These companies typically make from $10 million to $500 million. And they want to have more control. So what we do is that we had to switch to providing these engineers to their teams. And then the value proposition had to change from delivering the project to

delivering you the right engineer to be able to work effectively in your environment. And before it was 90%, 10%, and now it's not the other way around, but about 75 % of our business has become that staff augmentation, a staffing team for our clients.

Ricardo Arcia (14:53)
Yeah, well, that's got to have had some impact on your revenues and just the stability of your business when you have those large engagements, big clients coming out. Typically, companies see less fluctuations month to month in demand and in revenues and profitability. Have you seen the same thing? Is it a stabilizing effect for you?

Jeff Holman (15:17)
It is, especially because we moved to the mid-size companies. We still work with some entrepreneurs and we love to do it. But at this point it's about 10, 15 % of our revenue. Right now, I know we're building three minimum viable products for three different companies, three entrepreneurs that came, they raised some money. And typically when they raise the money, now they have the mandate to deliver whatever they agree with their investors.

So, and they are not ready because they don't have a team. So they just jump in and hire a company like ours and say, Hey guys, help me do this in six months, nine months, whatever that is. And then we come and help them out. So, and that's really fun. you know, we got to run a business and ⁓ even though it is really fun, it's, hard to, be just in that market per se.

Ricardo Arcia (16:08)
That's more like adding spikes onto the baseline that you've got with the with the 75 % of business at the mid market tier companies. Well, so so you mentioned AI a little bit and we don't have to jump right into it, but I am very curious. AI has to have disrupted the way that you look at your business and is probably still kind of an open ended question as to where everything will be going. I would say where it's going to land, but I'm not sure any of us expect.

AI to ⁓ kind of stop and allow us to get settled in again anytime soon. So it's more like which direction do we need to point so that we can, you know, stay in the right lane as AI continues to develop? What is the whole AI movement done with your business?

Jeff Holman (17:00)
Well, you know that I've been following AI for about 12 years. And since I started understanding what it was, I knew that the same way internet has been transforming other industries, this was one going to impact us in a way. I didn't know exactly how, but I knew it was going to impact us. And in 2024, what happened was that we realized that the technology was mature enough.

So we had to take it seriously at the time. And we started seeing that clients came and they ask us typically, I mean, you have the typical client that come and says, hey, ⁓ can we do this project in eight months and with 10 X budget? And you say, no, it has to be 12 months and it has to be 15 X budget because. ⁓

The reason is that if you go to a smaller shop that is going to tell you yes and yes and yes and everything you want to hear before you start, you're going to get burned with that shop. But if you want to go with a serious company that is really going to deliver what you need, this is going to happen. And I typically kept winning those deals. But in 2024, I started losing them. It looks like the AI hype is starting. Some people were seeing that there was another option.

and somebody was doing something differently than what we were doing. So what we did is that we decided to do two things. The first one was to build in our innovation lab. We started experimenting with AI and we created three teams ⁓ and we asked them, we said, okay, this project that we built in seven months last year, I want you to try to do it in eight weeks using any AI tools.

Let's see what happens. So we put them separately. Every team was working separately. The team was a complete team, somebody from products, somebody from development, somebody from quality assurance, and somebody from infrastructure. And we started seeing different patterns. The first pattern was that we saw that junior engineers were using AI to work. And the quality, they were jumping in really eager to do that. But the quality of what we getting was really low.

was worse than what they typically used to do, even being junior engineers. But then we saw the senior engineers and these guys came in, they were more hesitant, they didn't trust this much, but they thought more about it and the quality was better, but was inconsistent. Some of them didn't well, some of them didn't. We also saw that in every stage, I mean, when you build software, you have stages. You have somebody that creates the requirements, you have somebody that...

It does the designs. You have somebody that makes a code. Somebody tested. they were, each of them were using different tools that each of them chose for the exercise. And we saw that in every stage, they were able to accelerate. Imagine something like this. You have somebody writing requirements. And typically I have one, I call it business analyst writing requirements every day for a team. Well, this guy now using a

ChatGPT or ⁓ Jamie or any of these models is able to write what it took him two weeks is able to write it in an afternoon. So now what happens is that you see that acceleration, but then the rest of the team were not ready to receive that. So you start seeing bottlenecks on the process. And that's when we sit and we said,

Ricardo Arcia (20:34)
Yeah.

Jeff Holman (20:51)
We felt that fear of, well, first, it's obvious that it's obsolete what we're doing. mean, we have to switch. The way we've been doing software, it's not the way that software is going to be built in the future, for sure. And then we have to do something about it. So that was kind of that pivotal moment in 2024 where we decided to transform our company and we have to start moving from there.

Ricardo Arcia (21:19)
Interesting. want to get into the only that transformation because I'll bet it's very revealing ⁓ for a lot of people. I other industries are going through transformations right now, similar to what you've experienced. But it caught my attention. You mentioned an innovation lab. So this is an internal initiative, I assume, within your company to say, hey, in addition to fulfilling client work, going to experiment, you know, among ourselves to find better ways to do things. Is that common in your industry?

to have a team or time dedicated to exploring the innovation itself.

Jeff Holman (21:55)
You have to, mean, as you know, mean, AI has been the most disruptive technology that happened in the last 25 years. imagine when we were doing, before we built applications only for a desktop, and then at a certain point we start getting phones. And we had to understand how to do that. and there is always a new programming language and a new thing happening.

So it is intrinsic in our way of working that we have an innovation lab. Sometimes it's more people, sometimes it's less. But we are always testing something because there is no way otherwise we get behind on a weekly or on a daily basis. So we have to, our CTO always has some one or two good ideas as he thinks are the future and that we need to start testing them and checking them out.

Ricardo Arcia (22:52)
Yeah. Well, the other thing you mentioned was about bottlenecks and it reminded me of a book. I think it's called The Goal and I, gosh, I had the author's name on the tip of my tongue here. Something gold something. I'll have to get back to it. Anyway, The Goal is about a fictional business story about this guy who goes in and he's helping companies and he has this whole analogy for bottlenecks specifically about

Something about kids, I think he took kids out on ⁓ an excursion of some type and one of the kids was slower than the rest. so he experimented with putting the, do I put the slow kid at the end? Do I put them in the middle of the group or do I put them at the beginning of the group? And, and you know, there's this whole discussion about how, where you put the bottlenecks in your business impacts the performance of the overall business. And so it sounds like you were seeing

Not that you didn't have bottlenecks before, but maybe there's a shift in where the bottlenecks show up and how they impact the business. Is that correct?

Jeff Holman (23:56)
Absolutely. What we saw was that there was an obvious way to accelerate in different parts of the process. And the acceleration sometimes were 80%, 50%. But we were not seeing that result at the end, at least not in the lab. mean, and that's what happened. ⁓ is that what we did afterwards is that we created something we call a zero team.

internally and I asked this team, guys, how we're going to do software from now on? How are we going to build this? And what we created was the first thing we thought about it was to build ⁓ what we call it now a cognitive engineering framework. It's a system on how to use AI around this process. But then we realized that we also had to create a training program.

for all the engineers because we had to teach them how to use a framework and how to think about AI, especially. mean, ⁓ to give you, and this applies to every industry, the first level in the certification that we built is the change of mindset. I mean, we used to do things. We used to write an email. We used to write code. We used to ⁓ test ⁓ manually something in the software world.

And now using AI is the other way around. You need to think and orchestrate and be the strategist about how the application is going to do your work. Because it does it faster than you. mean, I love that.

Ricardo Arcia (25:32)
Yeah.

I was just going to ask you about, the team and how they've adopted the change or how they've reacted to it. Because it can be really jarring to people. ⁓ when all of a sudden the guy who was not the bottleneck before now realizes, a second, everybody's going to be waiting on me. Like, like I don't, I don't want that. That's I'm not used to that. Has the, how big was your team at the time? Was it about the same size as it is now? Okay.

Jeff Holman (25:59)
Yeah, 200 plus, yeah.

Ricardo Arcia (26:01)
How did the team start reacting to this? Did you see, was there like discomfort among some of them or were they, you know, were they all just on board and said, yeah, we're eager to tackle this together? What was the team environment like through this testing?

Jeff Holman (26:16)
Well, on the testing, everybody was into it. Everybody was ⁓ amazed. I mean, we are engineers, so everybody wants to naturally. You are curious about new technology.

Ricardo Arcia (26:30)
Yeah. Learn and get better. That was all important to them.

Jeff Holman (26:32)
Yeah, but that was there. Then when we tried to implement this framework and this training into a team that already had responsibilities of delivering a product or a software, then everything changed. And we come back to the people conversation. Now you have a group of people that already has to deliver something, but you're asking them to now use new tools and new technologies and new ways of doing things at the same time.

So now becomes a leadership problem. Now you have to come and tell them exactly in our scenario specifically, we have to give them permission to be slower. We have to tell them, okay, wait, I don't want you to keep doing things the way you were doing it because based on my experiments, I know software is not gonna be done this way anymore. So I need you to jump into this new wagon and do it the way I'm telling you.

I want you to make mistakes. I know that it's going to take more time. I know that at the beginning it's going to be harder. And I agree that it's going to be slower. That's fine. But I need you to do it. And what I realized that really clicked on my team was when I told them, AI, be sure that AI is not going to replace your work. What is going to replace your work is another engineer that choose to harness AI.

with us in the proper way. I mean, I don't know what I don't know. We built a framework from our former experience, and we didn't know if the framework was going to work. We built a training that we thought it was the best possible training. But I need my team to give me feedback, to sit with me, to work together so we can make it happen. If you are willing to do that, you are the perfect engineer to be in our organization. If you are not, then what's going to replace you is another engineer that I'm going to hire that is willing to do that.

So at that point, everybody felt like, OK, my job is secure if I go through all this process. I mean, I cannot tell you, Jeff, all the ⁓ different coaching strategies that we built and created to help the team during all this transformation. But it was a people problem at the end. The technology was there. The technology changes every day. We have a new cloud or a new

chat GPT version every single day. that wasn't an issue. The issue was getting people into this transformation and helping them on a daily basis. we get gains, ⁓ consistent gains cycle after cycle.

Ricardo Arcia (29:15)
So how much of that would you say the work in doing that transition is? Because you say it's much more people problem. How much of your effort though as a CEO or as an executive team is put into the people side of it versus the technology side of it? Is that half of your effort? it more than half of your effort? What would you say that impact has been to do it the

what you think is the right way at this point in time.

Jeff Holman (29:46)
Well, you have to do both. mean, in our organization, we have our CTO that is responsible for bringing the right tools into the team. But we have our Agile coach, is how we call it. And he is responsible for all the coaching techniques and strategies inside of the organization. So basically, have both. ⁓ You have to go both ways. You have to implement the framework. You have to implement what I was telling you on the

On the training program, you start with the mindset shift, but then the second level works on the tools, on the type of tools that you have to use and how to use it and so on. And then on the third level, that's an important part as well. You need to teach people and show people ⁓ in real scenarios. So we have a third level where we go on examples specifically for your role. If you are a project manager, we give you the examples for you. If you are a developer.

We give you the ones for you if you are an architect, if you are a quality assurance engineer. So we give you all the foundations in those two initial levels. And then on the third level, we give you specific ways of working for your specific role.

Ricardo Arcia (31:00)
No, I love this. You have an actual framework for the, you know, implementing this type of change and helping people, you know, get up to speed with it. Do you have a background in change management by chance or any experience with that?

Jeff Holman (31:13)
Well, the experience that we got in these 20 years.

Ricardo Arcia (31:17)
I've been running a business for 20 years, Jeff. I've seen a lot, had to deal with a lot of change.

Jeff Holman (31:23)
Yeah, no, the, I mean, really the situation in 2024 really hit us hard. mean, and at this point, to give you real numbers, to give you an example, when we have been implementing, because we tried to, did this internally and then we started doing with our clients teams. And we've been with our clients, the longest that we have been implementing this is a year with three different teams. And we have been able to accomplish for them,

about a 30 to 35 % increase in productivity in their software development process. And that's been, mean, if you had told me five years ago that I was going to get 30 % of increase in my productivity in software development, I wouldn't believe it. I mean, it's really interesting. It's really, but we have to really, and the thing that we, what I'm telling you that we built and that's what,

My book is about all this story that I'm telling you. Basically, what we did was iterating, and we built a recipe that we have seen that works for our teams and for our clients. It doesn't mean that it's the only recipe. There are several recipes to go through this transformation in engineering teams. ⁓ But it's one that helps CTOs, especially when they have the mandate from

from above, from the CEO saying, hey, I've been hearing about AI and I know that now AI help companies build software, so go for it. ⁓ We have some sort of adoption map, is how we call it, or recipe that can help them move ⁓ with more confidence, knowing I can follow the steps of this framework and process that Terabiton created and go getting the...

the improvements from time to time.

Ricardo Arcia (33:24)
Yeah, what a great resource for somebody who does not have the 23 years of experience building businesses. They can come and fast track their learning with the book. I want to hear a little bit more about the book in just a moment, but I'm curious, as I was listening to you talk about that 30, 35 % increase in performance, have you seen the same impact across your two different market segments, both the larger organizations where you embed with their teams as well as the

call it direct teams that are building software for specific consumers. Is that impact happening equally in both of those segments?

Jeff Holman (34:02)
No, it's absolutely different. Let me give you an example. One of the things that I've seen happening right now, especially in entrepreneurs and new ideas, you can use AI ⁓ and this is kind of the hype that you see on the internet and read about it. You could definitely use AI to build a proof of concept in days. Something that typically took before five months, four months.

that you could take to market to test. You can do it in days with a couple of very smart engineers. And I think, well, I'm sure that this will accelerate innovation in the planet in general. And I think it's going to be amazing. That being said, in the segment that we work, that is this mid-size companies, it's different because you have

legacy software that's been written for five years, 10 years, 20 years. And it's a lot more challenging for all the reasons I mentioned, the bottlenecks, all those stuff. And that's where the cognitive framework really helps. And that's where you can get this 20, 30, 40 % of improvement in nine months or a year. And I'm pretty sure that with time and new technology that is going to come out, we're going to keep improving and keep getting a small

increments, but it's different. It's a different challenge, one thing and another. Absolutely.

Ricardo Arcia (35:34)
Yeah, okay, that makes sense. The audiences are looking for different outcomes. They certainly have different budgets. They're interacting with your team in different ways. In a way, I see a lot of people, my clients, especially the visionary CEOs who are out there, they're ideating new business models every week and they're like, we're gonna do this and then we're gonna do this. I don't know if that is partly how you operate. sound...

You found some very structured with an engineer background. I've got an engineering background also, although not all of the 20 years experience you have. I think engineers are a little less prone to vision jumping than some other people, but I'm not sure where I was going with that, but you the different market segments and in my experience, I often ask my clients when they come to me and they say, I want to, I want to form a new company or I want to start a new brand. And I'm like, you know, just to,

quick little assessment. like, are you, are you looking to start a second business? They're like, no, no, no, this isn't another business. This is just another product. Okay. But who are you selling it to? Well, we're going to go sell it to this other, this other consumer. We're going to go, you know, like you've done, you're, we're going to sell from, we're to go from direct, you know, service services to some type of, you know, other model where, where our target is, is different or our, revenue, you know, the way we generate revenue is different. And I'm like, yeah, that's

That to me, I know you're going to do it under the same company name or you're going to do it with the same team. That sounds like two businesses. And so in, to some degree, you really are in your business running two separate business models, right?

Jeff Holman (37:16)
Yeah, absolutely. We do. And I think all those type of individuals that you're mentioning are going to really be able to increase the amount of innovation that they could bring to the world with a very smaller type of budget that they would need. I I remember

companies coming five years ago and saying, need this to test the market. And I was saying, this is a $150,000 project. Now I can say it's a $10,000 project. But it only works for that segment. mean, those 15 Xs of improvement are in that segment of starting new projects, greenfield projects, and that type of stuff. On the other ones, forget about it. Those are really complicated and have a bunch of other challenges that is good, but it's not

15x what you're going to get from AI.

Ricardo Arcia (38:13)
Yeah, that makes sense. Well, Ricardo, tell us a little bit more about this book. I think you started to talk about some of the frameworks, but what motivated you to write a book on top of being a busy CEO?

Jeff Holman (38:25)
Well, when we got into that inflection point in 2024, we did our experiment. And then I said, I mean, yes, I did the experiment, but by definition, I cannot have all the answers. So I need to find the answers. So I started interviewing CTOs. I started calling CTOs and finding I need to. And I started asking questions. And after the 20th or the 25th CTO,

interview and I realized that everyone, but literally everyone was asking the same question. Everybody was saying, how can I use AI to improve my software development process? Everybody. And so I realized that there was a need in the market of everybody was asking the same question and we were solving that internally. So I continue my interviews. I interview over 150 CTOs and

and engineering leaders ⁓ and using ⁓ our experiment and then everything that we built and our experiences pushing this into our clients and how to assess how their businesses from a transformational standpoint and how to help them, coaching them on how to get that 30 % of transformation, then we realized it was something that

that it could be useful for the market. And I started getting some good traction and some good motivation from my clients as well, because we were helping them with some stuff. And I mentioned, I'm thinking about it. Yes, you have to do it. you know what marathon runners do. They do it. They go for it. You say, this is a hard challenge. Let's go for it.

Ricardo Arcia (40:17)
Yep, just plan ahead, put your training program together and then a year you'll have a book written. The time's gonna pass either way, you might as well be writing a book, Well, one question I wanna ask about this, and just for the audience, the book is, correct me if I'm wrong, but the book is The Cognitive Leader, right? That's the title you've got for that once it releases. ⁓ It's gonna be a really interesting book, I'm sure, probably for a lot of segments inside your industry and outside your industry.

I'm curious when people because everyone's asking the same question, right? The question you said is something like, how is AI gonna gonna transform our industry? How do we how do we adopt it leverage it in our industry? How do we become more productive? How do we not lose not lose ourselves and our business to AI? Those are all embedded in that one question. One of the things I've seen ⁓ because we've worked with a lot of inventors as a law firm, we help people get patents and

And one of the ways that people come up with new and novel and patentable inventions is by taking kind of that general question that everybody has asked, you know, isn't there a better way? Right. And you take that question, you know, what's going to happen or what is AI going to do our industry? But when you start, when you take that question down a level or a couple levels and you start to ask more specific questions, then you start to

reveal these patentable inventions. It's not just, huh, I wonder if this could work better. You start to say, well, what if we tried to change the material that it's made out of? Or what if we wanted our users to have a different experience? When you were talking with ⁓ all of these other professionals and they're all asking that same high level question, ⁓ I'm curious if there was a point where you said, in order to answer

this question or solve this really general problem that people are having. We really need to break this down. We need to ask better questions or more specific questions. Does that fit into anything that you experienced while you were doing your research?

Jeff Holman (42:27)
Yeah. And that's exactly where we hit the point of saying, Hey, we need to build a framework. What it means we don't know, but we need to build the framework to figure this out. And then this ⁓ training program. And then we hit the wall again when we started pushing this into the teams. And then we realized, ⁓ I mean, you need to train them, give them the.

the framework, then you need to coach them on a weekly basis and help them really go into that. absolutely that's, that's exactly what happened. And I also wanted to mention Jeff, that this cognitive leader, the, the, the reason why I chose this, this title is because this cognitive leader for me is that person that is able to connect what AI can do with what your team can do harmoniously.

and get the best out of it. And because you have to do it intentionally. I saw, and you will see it on the book, I have several stories of my clients trying to push AI without ⁓ a structure, without a framework, without an idea. Just to give you an example, guys, you have here Copilot, ⁓ and they gave that to 100 engineers and said, test that out. That's fine for a week or two.

but you cannot give them that without training, without asking them what to do, without coaching them on how to do it, or it doesn't take you anywhere. So this cognitive leader is that person that intentionally tried to understand which the capabilities of these new technologies, which the capabilities of your team are, and how can I connect them together. And in our case, of course, we applied for how to have the best software development process.

as part of it.

Ricardo Arcia (44:25)
Yeah. And you probably have a unique perspective in a sense because not only are you leading the organization, you've got all the expertise behind you from building the organization over time. But as you work with two different market segments, ⁓ you know, you're in the one sense, you're, you know, you're trying to work maybe on the edge of technology and speed and performance a little bit more so with your, with your smaller clients who need an app built because you're seeing that's what they're pushing for. Right.

They're pushing the boundaries on budgets. They're pushing the boundaries on delivery times and on, you know, probably customer experience, things like that. But on the other hand, you're working with these big clients with legacy systems and teams and all sorts of constraints. And you're saying, and you're saying, well, how do we, how do we take the advantageous parts of what we're doing, you know, faster, quicker, better, cheaper here? And how do we, is there a way to actually integrate them into.

these legacy systems and these teams and how they're operating. And so in a sense, that probably gives you a perspective that somebody who's only working in one side or the other that they might not have. Is that, have you seen any of that crossover?

Jeff Holman (45:43)
Absolutely. I mentioned that I was in the beta reading part of my journey with the book. And I had someone from a startup that I asked him, can you read the first two chapters of my book? And he read it. And he came back and said, you got it all wrong. How can I get it all wrong? Well, we had three engineers. We just left to go. We kept only one.

Ricardo Arcia (46:05)
Really?

Jeff Holman (46:12)
We are doing some agentic AI stuff and we are growing really fast the things we're doing. And I started asking questions. Is this ⁓ something that is scalable and this is something? No, no, no, no. I said, that's fine for your segment. You're absolutely right. For what you're doing, I agree with what you're doing. But if you see the other side of the coin is different and it's different because of this. It was, yeah, now I get it. So absolutely. mean, I've seen it.

I, this time that I'm telling you happened yesterday. I mean, it was funny. It was a guy that I, that's been working on and off in projects with us and, has been a client a couple of times. And, and it was funny the way he just came and he had the, the trust to tell me, I think you're wrong. And then when we had the conversation, I wasn't, he was right as well, but on his segment.

Ricardo Arcia (47:12)
Yeah, maybe not with maybe maybe not as right once you stood back and looked at a broader, a broader perspective. So

Jeff Holman (47:18)
Well, one thing that it took me and it helped me a lot was that based on that and based on another beta reader from a very big company that mentioned as well some other aspects that don't apply to them, I decided on the intro to add ⁓ a little paragraph explaining that mainly this book is for these mid-size companies. So if you are a smaller company or a bigger company,

Probably things apply, but if you're a mid-size company, for sure they will. So that's the type of thing that you get from the better readers that I love that you get all these people giving you their expertise and their thoughts and you can implement it and put it in the book.

Ricardo Arcia (48:01)
I love it. love it. Best of luck with the book coming out. Do you have a time frame for when you think that'll be released?

Jeff Holman (48:08)
I hope by the end of the quarter, Jeff, I'm going to push very hard. And my coach says that it's challenging, but I mean, I love challenges. So let's see if we can able to make it. Yeah.

Ricardo Arcia (48:21)
Good goal to have out there. That's exciting for you. Congratulations and best of luck getting to that goal or meeting that goal shortly after that point. ⁓ Ricardo, it's been fantastic having you on. You've clearly got a lot of experience. Our audience appreciates hearing the insights that people like you come on here and so openly share because I have the perspective that a lot of CEOs, regardless of the industry,

And sometimes regardless of the stage of the business, CEOs and leaders are all on this same path. Maybe just given the context, we should say all CEOs are running a marathon. They're all running the same marathon. Now, some of them are going to get to the hill faster and they're going to have to climb that hill, you know, sooner than somebody else who's maybe on a descent part of the course. But we're all on a similar path.

journey here, even though the timing of when we meet these different obstacles and opportunities might change for each one of us. So I do think there's tons of value in ⁓ someone with your level of experience sharing even a few insights for the audience to hear. So thank you for doing that today.

Jeff Holman (49:38)
No, thank you, Jeff. ⁓ I enjoyed very much the conversation today. Thank you for the invitation. So I'm glad I was able to be here.

Ricardo Arcia (49:47)
That's been

my pleasure and good luck on your your upcoming races. And then for those of you who joined us today in the audience, thanks again for coming and listening to the breakout CEO podcast. sure to follow or subscribe on your favorite podcast platform. And if you enjoy the show, a rating or a review goes a long way. Our mission is to promote the stories of breakout CEOs in scaling, SaaS, e-commerce and tech companies.

to equip peer CEOs with valuable perspectives and confidence. Thanks again for joining us on this episode of The Breakout CEO. I'm Jeff Holman and I'll see you next time.

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