Hey, it’s Brent.

Today I’m sharing my interview with Mark McKelvey — founding partner of Stacked Analytics.

He went from doing analytics for the US military, to a commercial role, to moonlighting, and finally going out on his own.

I enjoyed learning more about Mark’s path to entrepreneurship…particularly how he built up savings from moonlighting to give him the comfort to forgo steady income.

This edition is jam packed with actionable information. Mark breaks down:

• The hidden (and not so hidden) benefits of having partners

• Why he craves ownership in his work

• How he came to enjoy sales

• How he got his first 3 clients

• And much more…

Here’s Mark in his own words.

Mark McKelvey on his experience starting Stacked Analytics with his partners

Tell me about Stacked Analytics. Who do you help and how do you help them?

Our aim is to extract value from data.  We do that through:

• data collection (web/app analytics tagging, form creation, log parsing)

• ETL (extracting data from source systems, transforming and loading into warehouses)

• Analytics and analytic strategy

• report development

• predictive modeling

• decisioning systems (automated systems that make decisions in real time based on some decision model)

Each engagement we take on comprises some combination of these activities.  We serve organizations who aren’t large enough to support an internal team to do this type of work or who want to move faster.  For smaller companies we will act as their entire data and analytics team, for larger companies we bring specific expertise to augment their internal teams or carry out projects to speed their progress.  It has been fantastic to watch our team deliver a solid data and analytics foundation that our clients grow into then take over the management of internally. 

What were you doing prior to Stacked Analytics?

I did analytics for the US military before jumping into commercial analytics.  I spent 7 years doing custom data science consulting and leading the development of a marketing analytics platform before starting Stacked Analytics with my partners.

What made you decide to strike out on your own?

I want to have ownership in what I am working on for two reasons.  

First, I want to offer solutions that align with my values.  In this industry I see a lot of things being sold that don’t seem to produce value, they are (expensive) tools for tools sake.  I also think small and medium sized organizations can obtain great value from data tools and techniques, most vendors are out of reach to these smaller organizations.  I believe that our services address both of these issues.

Second, I am motivated by ownership.  I believe that the producers of value within an organization should be given an opportunity to own a piece of it.  When working without this opportunity, I found myself frustrated.

Tell me about the business early on. What were your main challenges? Did you ever consider giving up?

Starting out, I worked full time for an organization and then was hired to consult on a project “on the side”.  I was working very long hours,essentially 2 jobs, but it gave me the opportunity to save and, when the timing was right, forgo W2 employment.  My wife, Carole, was pivotal in encouraging me to take the leap and go after building my own firm.  Winning my first handful of clients’ business was so thrilling.  

I met Michael Helbling who I ended up partnering with.  I get a lot of value from having a sounding board for challenges and opportunities.  Michael’s experience and reputation have been very beneficial to our business.  Furthermore, I think prospects like to see that the firm they are considering partnering with is more than a single person.  It gives the organization credibility and stability. 

My next venture is always rattling around in my head.  I don’t see myself giving up but I do hope to continue to increase my selectivity in the kinds of organizations I help.  I have a passion for education and the environment and will keep looking for opportunities in this space directly and with companies who are also aligned with these values.  

Any interesting thing you’ve done for money?

Regarding interesting things I’ve done for money.  I enjoy working on SaaS projects and have been involved in a number of startups, with varying levels of involvement.  I am working to develop those to a point that they can be a more passive source of income in the future.  I dabble in other forms of investment and have had a 1 vehicle Turo business for the past few years.

How did you get your first 3 clients?

My first client was the result of a recruiting company knowing about the work I do and hearing about an opportunity.  They linked me up to build a real time lead bidding system similar to something I had built in the past.  I still have this client though my involvement has reduced significantly as they have grown their internal data science team (from 0 when I started to 4 data scientists currently).  We have a great relationship.

My second and third clients were both places I had previously worked as a W2 employee.  They like my work and were happy to continue to utilize my services in a contract style engagement.

Following engagements came through networking and referrals.  This continues to be the primary way we find new clients.

Were there any key decisions, strategies, etc. that helped you get traction with customers?

I think this is all about listening to their needs and developing a solution that fits.  I enjoy learning about people and their businesses, I think that helps.

How do you get clients now? How has your strategy evolved?

I generate some short form content.  This has resulted in 0 clients however I do think it has helped me stay relevant within the minds of my network and led to many new, meaningful connections.  I would guess that at this stage 60% of new clients are referrals and 30% are from my network and 10% come through professional organizations I am a part of.  I’ll sheepishly admit that I do not use a CRM or track any data related to sales, though with continued growth this will become necessary.

My strategy has evolved in that I now fully believe that specialization within industries is a necessary next step.  Doing so will produce better products at lower cost and enable us to utilize more junior talent within the team.  Historically, I’ve taken the “rocket science” approach, where every new client has required a novel solution.  I’ve found that it is very difficult to build a team that can develop these types of solutions with any predictability.  That being said, difficult problems are where excitement exists and learning happens so we’ll look to identify a few industries and tackle the hard problems there.  

As I mentioned earlier, education and the environment are a passion of mine, The DeBruce Foundation is a current client that gives me an outlet in that space.  On the environmental front, I’m looking to help companies and organizations that identify sustainability and the environment as their top values.  These are “industries” where I am looking to specialize.

What do you like most about running your own business? 

Running my own business has given me the opportunity to perform every job function that is required in an analytics consulting firm.  I found that I really enjoy the sales and solution architecture side of my work.  Without setting out on my own I probably would have never learned that I enjoyed “sales”.  Admittedly, I have no formal sales training so I could be doing it all wrong… but learning about the opportunities and challenges of organizations and developing solutions for them is really rewarding.  I’m a problem solver at heart, and I’ve found that utilizing my technical and analytical experience to solve business problems is where I currently shine.

What is your least favorite part?

Money.  Budgets for data science and engineering projects are truly hard to predict. I want to deliver a wonderful experience for each and every client however sometimes their budget requires that we cannot include some “bells and whistles”.  I have learned that it is very important to call out where the budget is constraining the project in the statement of work and be very open with the client about the risks inherent to this type of work.

Furthermore, I would love to be able to work without any concern for budgets or my personal finances.  I am at a place now where I am comfortable turning down work that doesn’t fit and am looking forward to a time where I can accept fewer dollars for projects that I am really passionate about.

Do you ever think of quitting and doing something else?  

I have dreams of creating a small self-sustaining farm, sailing around the world, and/or teaching at a community college.  We’ll see how much I actually “quit”; perhaps I will allocate less time to consulting work and more to these other endeavors.

Was there a moment when you realized this was going to work?

I think after landing my first 2 clients that weren’t from previous work relationships I became much more comfortable with my future.  This was in my first year.

What’s your current business model? Do you have employees?

I do a mix of fixed fee projects, retainer, and time & materials work.  The type of project, client’s risk appetite, and client budget are factors in determining which type.  I have one full time employee and a healthy number of subcontractors.

Let’s talk numbers… What has your revenue trajectory been like over time? Are you making more than you were full-time?

I earned more in my first year as an independent consultant than I did in my previous position at the top end of data science salaries in Kansas City.  I have continued to grow top line revenue in my company each year since however last year was a bit flat.  I have not grown my salary in conjunction with revenue growth; instead we invest back into the company.

What advice would you give to yourself if you were just starting out? What would you do differently?

Specialize sooner.  I had this advice right out of the gate but was unable to act on it.  Specializing in a particular project or industry really helps establish expertise and as I mentioned earlier leads to scalability.

Anything else I should have asked?

I think the best question for each of us to ask ourselves is why are we doing the work we do each day.  If the answer isn’t something along the lines of “I’m sitting at the intersection of what I’m good at, what I love, and what the world needs” then keep working to get there.  I think the answer to this question can change over time as well.  

My answer to this question is: I love the opportunity to solve unsolved problems that lead to a better workday for the people who use my services.  Automation of data collection or decisioning can relieve team members of mundane work. Making new information available through reports and/or predictive models makes decisions less scary and leads to better outcomes.  Furthermore, the users of our services can provide a better experience because they understand their service and customer better.  I get to study and utilize cutting edge technology, work with really smart people and learn about businesses of all kinds.  

I am good at translating business needs into information products and understanding technology. 

I love learning, finding efficiency that frees people from mundane work and especially that thrill that comes from producing a kick-ass predictive model or solving some difficult problem.  

The world needs better information.

Any asks for the readers?

I ask that if anyone has thoughts or a response to me on these topics to please reach out.  I’d love to learn about the readers projects in this space, especially if there might be an opportunity for Stacked Analytics to help.  Find me on LinkedIn at Mark McKelvey | LinkedIn or email [email protected].

That’s a wrap!

I hope you enjoyed this edition of data founder chronicles.

All the best,

Brent

P.S. If you know someone I should interview (or you are that someone) please reply and let me know!

P.P.S. If you haven’t already, be sure to subscribe to get future case studies.