In the face of the global climate emergency and the European energy crisis, data centres are under increasing pressure to reduce their carbon footprint and enh...
Ep. 20 – Practice like you’re going to play, with Sam Prudhomme – Great Business Minds
Welcome to another episode of the Great Business Minds podcast, the definitive show for the business of digital infrastructure.
Updated October 16, 2023 / Original October 11, 2023
Founder and Editor, The Tech Capital
October 11, 2023 | 5:51 PM BST
Welcome to another episode of the Great Business Minds podcast, the definitive show for the business of digital infrastructure.
GBM is brought to you by Preiskel & Co, a leading award-winning City of London law firm, internationally recognised for its expertise in the digital infrastructure industry and the telecoms and tech sector work more broadly. Wherever your legal or regulatory needs are (including outer space) Preiskel & Co LLP can support you, so do feel free to reach out to them here.
Our guest this week has had an inspiring growth journey over the years with key leadership lessons along the way.
Sam Prudhomme is the president of Accelevation’s data centre business unit. Prior to joining Accelevation, Sam was the president of Instor solutions and was responsible for the overall strategy and execution for the company. Sam is a dynamic leader with a reputation of assembling and directing sales and operations teams, increasing profitability, creating customer-centric go-to-market strategies, cultivating cohesive workforces, and growing global brands.
He started his career in commercial construction and moved to the telecom industry where he held a field operations role during the 4G evolution. He then transitioned to the data centre industry in 2010 where he held senior sales roles designing and implementing data centre power systems and supporting critical facility infrastructure.
After more than half a decade designing, selling and constructing critical facility infrastructure he joined the Subzero Engineering, where he would become the VP of sales and marketing. He helped build Subzero’s global sales team and launched multiple product families to help the brand respond to the massive demand increase and evolving use of data centre containment. During his tenure, Sam curated Subzero’s initiative to correlate the use of its products to the industry’s drive towards carbon-neutral operations. A concept now considered commonplace.
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This episode features our commercial partner Preiskel & Co, a leading award-winning City of London law firm, internationally recognised for its expertise in the digital infrastructure industry as well as the telecoms and tech sector work more broadly. Visit www.preiskel.com for more information.
Please find below a comprehensive transcript of the dialogue between GBM and Sam Prudhomme from Accelevation.
Note: It is important to note that the text retains certain informal expressions, interjections, and other aspects characteristic of a spontaneous and fluid conversation.
GBM: Sam, thank you so much for talking to me. And congratulations for the recent deal. We’ll touch on that a bit later in this podcast. But to begin with, give us a bit of an overview of where you come from, and how did you get involved with this amazing industry which is the data centre space?
SP: Thanks for having me and I appreciate the congratulations. I first got into the critical facility space about seven years out of college. I was doing commercial construction and light industrial construction down in Louisiana, the great recession hit and, you know, private and public money dried up pretty quickly. And so the one thing that was burgeoning, still was booming, was the 3G to 4G rollout and all of the different infrastructure that was required to complete that evolution. And so I was able to get a job as a national ops manager for a DC power company. So I moved from Louisiana to Texas and began running teams of people that were rolling out 4G rollouts for, you know, the big telecom guys, Verizon T Mobile, AT&T. And through that work, it kind of introduced me to critical facility work, maintenance, windows, all of the things that we kind of colloquially use to these days in the data centre.
And so that work kind of led me into a sales opportunity for an electrical power company, where I was basically a sales engineer/solution engineer for big power equipment, switch gear, UPS systems, batteries, PD that are used for the data centre space. And I did that for quite a while. And then kind of migrated from there to a company called Subzero Engineering in Salt Lake City that did data centre containment and structures. I worked for them as their VP of Sales and Marketing for three and a half years. And that moved me over to in-store. And I got to like, kind of like a more well-rounded view of everything from selling the power to selling the infrastructure to doing all the services that installed all that power and infrastructure into one. And so that’s where I find myself today.
GBM: A very interesting story, because you kind of got into the technical side from the get go, which is slightly different from some other guests we’ve had on this podcast I was asked as well. So of course, as you were building your career, especially at the beginning, was there someone that was a big influence on you, a mentor, someone that you really looked up to? And how did that person kind of shaped you as a person? And then as a leader? How did you shape your leadership style?
SP: That’s a good question. It’s funny, because throughout the different phases of my career, both in construction, and then then again, in that early telecom days into the transition into a, you know, an individual contributing salesperson, solution engineer, to where I am now, I’ve had mentors and each one of those stops, that’s really driven different parts of what I find myself calling my leadership style today.
Early on in my career, you know, the construction company that I worked for, was run by a very savvy businessman. And so I got to understand what a P&L was. And I understood, you know, cost versus sell price, I got to understand really a lot of business mechanics that were applicable in the real world, not just from the university. And so utilising that as I moved into my style of management, from managing projects to managing people, it was more rigid, it was more structured, and it was more like, well, “this is what we’re going to do”. And this is how we’re going to do it, because this is the way the math works.
When I moved out of that into sales, I definitely had a mentor that allowed me to see people as individuals and not as like, numbers on a spreadsheet. And so I started to kind of backup from that rigidity and management style and I started to look at how that probably didn’t do me any favours earlier in my career. You know, I’ve always been somewhat of a people person able to talk with people and you know, I can converse quickly but when it came to motivating people and understanding what motivates them, right, that was when the sales career really grabbed that because he taught me very early on. We don’t sell things. He’s like “we sell hope, we sell joy,” because we sell the thing that solves people’s problems, the things that keep them up at night. That’s what we’re solving for. So he’s like, “you got to get past what you think they need and you got to figure out what they actually do need”.
That’s a multiple levels down, you know, it’s not just surface pain, it’s definitely the emotional pain. And so the same exact thing applies to leading people, because they all have different things that they’re going through. And you have to understand what their individual motivations are, no matter if they’re a vice president that reports to you or if they’re a factory worker, we need to understand, as leaders, what it is that motivates and what it is that we can do to help solve our people’s pain. And then we can put them in a position to succeed. And then both the business and the people are beneficial.
GBM: I love that. And I think you really painted the story quite well, going from, of course, school, high school, college, learning the business mechanics, which sometimes we do leave universities without knowing how business sometimes actually works. It’s good to have a hands on experience and someone to guide you through those things, learning about P&L, learning about revenue, learning about losses, how to manage spreadsheets, but then that shift you also made into understanding the human capital, being a people person. I think that’s when kind of maybe you made your big leap into the leadership side of things, which I, unfortunately, I think there’s still a lot of people that have not reached that, even though they are leaders.
The point that you made about the products as well, I mean, you might have the best product in the world, if you don’t have a good team behind selling it, the product is not going to work because people buy people first, at least my view is that people buy people first. But with that said, I mean, I can already kind of get a sense of your next answer. I’m not going to ask you what keeps you up at night, I’m going to ask you what gets you up in the morning; what motivates you to get out of bed in the morning to do what you do on a daily basis, based on what you just said?
SP: It’s a bit of a different thing for me. I came from a lower middle class family in Louisiana, and my mom and my dad sacrificed quite a bit just to give me things that they didn’t have. And so they worked their entire lives, never really getting to a point where I would consider that they were comfortable. They always had to worry about money, they always had to figure out where the next dollar was going to come from, they never had the ability to be free enough to experience joy on their own terms. And I think a lot of people today feel that way. And that’s not great. That’s not great for society. And that’s not great for those people.
Because of the sacrifice that my parents, you know, did for both myself and my sister, I find myself wanting to continue to explore how far I can go, and how many people I can bring to a level that my parents didn’t get to, because it’s not just about me, it’s about who I touch and who I affect. And so my parents legacy is the thing that gets me out of bed in the morning, because when I look back on what they did, I never want to take anything for granted. I never want to waste a day, I never want to forget how amazing it is to do what I do with the people that I do it with and the industry that I do it for.
And so I get out of bed every morning, like let’s go crush this day. And sometimes I get crushed by the day. But I mean, it’s just part of it. But that’s what drives me, you know, the ability for me to continue to seek out what is possible, based on what my parents gave me the foundation of.
GBM: Now, I can’t disagree with that. And I think sacrifice sometimes it is the right word when it comes to raising the new leaders, and you were talking about the legacy that you wanted for them. Their legacies, generating new legacies, because you as a business, as a leader, are also creating new legacies with your employees. And sometimes the best legacy you can generate is when someone leaves the company, and they go on to bigger and better things. And now that they’ve been educated, and there’s a good vibe coming out of the business they were doing before picking up on that as well.
But because you mentioned, sometimes you get crushed by today, I’m going to ask you maybe one or two examples of when things have crushed you down, when they have gone wrong. How did you deal with that? And how do you spin that into a positive?
SP: Most of the time when things go wrong, it’s because I’m focusing too much on the problem and not enough on the way that I’m dealing with it. Right? So something occurs, whatever it is, you have improper feedback, you put a lot of work into something that somebody doesn’t pay any attention to. And that hurts you right? But that’s not the thing that crushes you. The thing that crushes you is those stories that you make up in your own head about why that occurred, and you let that beat you down and you go to bed at night going, “man this day was terrible”. And then you have to level set and say, “well, was it terrible? Or did I just think it was terrible?” And then you begin to put yourself, you take yourself out of your own head, and you place yourself into the person’s head that he is perceived to have slighted you. And you say, “well, what are their motivations? What happened to them? What was their day like, and maybe this had nothing to do with anything, and I just wasted an entire day being crushed, when really, this was just something that was nothing”. And so I think that the day will crush you but you have to always reach to a new level of empathy, so that you can understand people better so that you’re not offended by them.
And I think the more that you do that, the better you’ll be doing, you’ll be better at doing that subliminally in general, and things won’t get to you as much. And you’ll be able to process them much faster. And you listen, well, this person is under this type of stress because of this thing. So their reaction was actually not surprising. It was okay. And now I can use that to work around and help them out and help me out. And so that’s kind of the way that I’ve been trying to really dig in and understand, you know, my own feelings based on how other people are interacting with me, and then the day, and then I try to do that again, as I deliver bad news to other people as well. I try to think about it that way.
Because I’m sure some days I crushed. Yeah, I’m sorry, that said, some days I crushed people too, it’s not that I just get crushed, I crushed. But my motivations aren’t that.
GMB: Yeah. And again, I mean, we said it’s part of the game. And it’s part of the journey. But I think I completely agree with what you said, I think it’s important to sometimes step out of the box, and really look at the problem – if we can call it the problem. Then just see how can we address it and putting yourself in the shoes of the other person. I think that’s probably the biggest thing that you can do when addressing an issue: understanding why did this person think that way?
I often say it’s okay to be angry and upset for five minutes, but you got five minutes to be angry and upset, then go and find a solution on how to solve it. I don’t know if you agree with that but I think we’re sort of on the same page around that. And I was going to ask as well, in terms of business, because and you’ve already painted the story of how you got into where you are right now, but there’s been a lot of times where you had to negotiate things. I’m talking more about things for yourself, so it contracts, be payments, be joining a company to run a team, etc. With that said, what’s something that during those negotiations, what’s something that you’d never open hand off? What’s something that is non-negotiable for you, when it comes to business?
SP: I have to have an understanding that the leaders, the people that are making the decisions, the ultimate decisions for the business, care about the employees first. The people have to be first. It can’t work for a business that puts the business first, right? And so in all things we must think about our team members aren’t just our employees, because they will take care of our customers if we if we care about them. And then our customers will take care of the business, right? And so it’s employees, it’s people, people first, customer second, business third, and usually one plus one equals about 17. So it’s not a linear equation. It’s not linear math.
But the other way around is linear math: if you do put the business first, and then you put the customer second, it’ll be negative. It’s a negative number, right? Because the business plus a negative number, the business can’t take care of the customers, the employees take care of the customers. So you always end up well worse, even simple math, simple logic. And so my one non-negotiable is that I must have a strong understanding and belief that the business is operating for the individual, for the people. And through that both the business and the people can benefit mutually.
GBM: Okay, so can you give us some examples of how you folks foster a people-first approach within the business? How do you create a culture of inclusivity? How does everyone have a voice in the decisions that are made? What are some of the strategies that you use, which will be quite beneficial, especially if somebody is starting a startup nowadays? What good tips do you have that you use on a daily basis that really fosters that culture of inclusivity?
SP: Yeah, I mean, if you’re making a decision that’s going to positively or negatively affect somebody, you must discuss that with them. They have gotten to buy in; you have got to get their input. You’ve got to walk down the whole line of what the change is going to be. By first communicating why we are thinking about doing that change, and why must be correlated to the North Star goal of the business. So we are doing this because of this, and this leads us here. Right? Then you boil that down into how that North Star goal affects them: greater opportunity, greater compensation, increase in stock price, whatever it is.
Then you say, this is how this will affect you, either positively or negatively. How do you feel about that? And is there something else that we can do that will accomplish the why that is easier or better for you. You have that discussion all the way down to the, I hate having to say, the lowest level of employee in the business, and then you move back up into the decision making and say, here’s the feedback that I received and here’s what we’re going to do. And then they, whether we choose to do what they say or not, they’ve had their share of discussions that we’ve given them an opportunity to discuss it with us. And together, we’re moving forward in a way that we both understand.
That is thinking about them first and then thinking about the business second, and then moving everything forward. And you have to do that for every decision, and it gets tiresome, and it gets cumbersome. And sometimes you just want to make an arbitrary statement that I’m going to do it this way, because it just doesn’t work that way. And every time you do that, you always end up having to over communicate on the back end anyway. And so just do what you say you’re going to do all the time.
GBM: I was going to ask actually, because, of course, you’ve already mentioned this, sometimes it’s easy to just do an arbitrary decision. So when you allow a lot of people to have an opinion, we know that things sometimes can get a bit messy, and it can become quite time consuming. How do you manage? How long do you wait for, how does it go from left to right? We got all the feedback, and then need to make the decision, how do you manage that gap in the middle, you know, on actually making a decision and who ultimately makes the decision?
Because sometimes we get the feedback and then we spend six, eight months trying to realise that decision. And I mean, I’m thinking of my own experience where we would have meetings with the whole company, and everyone has a say and we’ll end up six, eight months trying to decide on something. By the time it was decided, it was already too late. How do you kind of manage that gap between feedback and making a decision?
SP: So our middle managers, our middle of the company leaders perform the exact same function on a daily basis in the exact same way that I will do it with them. And so they’re already very, very in touch with their people. So I can offer a process that already kind of understands where it needs to go based on the feedback that they get on a regular reoccurring basis. So whenever I offer a process, there’s not a lot of chance that the individual contributor is going to say that’s not going to work, because my middle managers are so good at listening, talking to them on a daily basis. So my feedback loop is very, very strong.
That increases the chance of a process being adopted very quickly, even after input and reduces the chance of a circular reference in an Excel folder, which is just negative and not working. And so it’s a cultural thing. It’s not a onetime moment thing, it is an all the time. It’s never-ending; it’s a constant way of doing business and leading people that leads to speed. And it leads to accuracy in thought processes. And it allows us to kind of read each other’s minds. And so if you think that it’s an instance, it can’t be an instance, you can’t do it one time, you have to continuously do it.
So when you author a process, that doesn’t mean that the process is written in stone. That process is written in pencil, or it’s written on a computer with a backspace button, right? And so you can always reexamine it at any point that you feel. And we encourage that feedback from, again, the lowest level employee back to our middle managers or middle leaders. And then that feedback comes back to me quickly. That allows us to get kind of get to 80%. We’re 80% there, we’re not going to let perfection ever get in the way of our progress. And so that also allows us to speed up.
Because if we try to offer a perfect process, it will take eight months, because you have to do trials, you have to do tests, you have to feedback, and you have to feed that feedback back into the process. And so eight months later, you’re there. But if we get at present there, we can start implementing something in a week, we can get feedback immediately. And we can start working on on how to make everything better. So I would just say in summation, it’s a lifestyle of the business. It’s a culture, it’s not an instance,
GBM: I think you’ve hit the nail in the head with the concept of consistency of doing that to really get the feedback loop. I’ve always worked with being a one-off kind of thing in previous companies and I think that’s where a lot other businesses fail, it’s a one-off. And usually you get to “have a say” and then that never gets heard by anyone else.
But Sam, before we kind of close off this first part, what’s been the best and the worst advice you’ve ever received? And this can be personal advice, this can be business related advice. Just what’s been the best and the worst. And I mean, the best, people usually name who said it, the worst, you’re more than welcome to throw someone in, if you want to…
SP: The best advice, I’ve been told this a lot in my life, but really the best advice is you can’t rush success. There’s no shortcuts, right? “Sam, you need to be patient, focus on hard work and consistency”. I’ve been told that by my parents, I’ve been told that by many, many bosses, many, many managers because, you know, I’m impetuous. I want to move quickly, I want to do things fast. And I want to get to the place so I can do the next thing. And what I’ve learned – I just turned 40 a couple of months ago – is that’s not the way to do it. It’s not the way.
I don’t know who said it but if you’re leading a group, and you’re so far out in front, that you can’t see them behind you, then that means they can’t see you either. So you’re really leading no one. And so you have got to be patient, you have got to be intentional. And you’ve got to do the hard, slow thing of communicating everything every time. And you’ve got to live that every day. And you can’t just make decisions because you want to go faster. So I would say that is a lot. And I don’t really know, it’s a collective group of people who told me that, but that is the best advice that I’ve ever heard. Is that to slow down, be patient to go faster.
The worst advice I ever received… You tend not to remember the worst advice you’ve ever received, right?
GBM: I think what you touched on, and the word consistency keeps kind of popping into my head, making informed decisions, making foundational decisions as well building the foundations properly. And then sometimes, business is not a sprint, it’s a marathon, it takes time to build. And the beginning is always slower until it gets to a peak point where things are running this slightly different way. So I completely agree with you. I’ll ask the question about the worst advice at the end in case it comes up.
But moving more now towards the market and the business… my first question will be more around, because you operate within a very special part of the business, especially the hyperscale segment, I was going to ask what are the challenges that hyperscale operators are facing nowadays? But before you answer that, if you could just give us an elevator pitch of what Accelevation does, just so people know kind of what you deal with on a daily day to day basis, that would be great.
SP: Sure, the Accelevation data centre business unit, we are a comprehensive design build whitespace construction company, that self performs our own electrical work and low voltage work and builds out all of the conveyance and structures that are related to that electrical and low voltage that encompass the whitespace. We also manufacture data centre containment, data centre caging and ground support is structural conveyance products. And then we incorporate both our manufacturing and our services to deliver a solution to our customers at speed and scale.
GBM: Thank you. And then if we pick up on that, what would you say are the challenges that operators are facing within the hyperscale segment?
SP: Availability of all resources is currently a challenge. We have power challenges, we have water challenges, we have land challenges, we have other various supply chain challenges from the powertrain to the cooling units down into the whitespace. And then we have a talent shortage. And we have a generalised labour shortage of all things.
The one thing that’s getting better is there is some more labour and talent coming into the space. But that’s not due to a good thing. It’s due because of other macroeconomic forces that are forcing them out of the commercial or other industrial industries into our space. So that’s not great, but it’s still good for the industry.
And then you have some short-term supply chain issues that are starting to get better coming out of COVID. That’s a lot of constraints. I just said that.
GBM: No, no, no. But I think that those are the real issues that people are facing. And I mean, you’re speaking to us from Austin. So a lot of these issues are being felt in North America. But it’s also being felt in Europe very strongly, especially around power. I think in Europe, that’s the top-of-mind worry. If not, since at least the invasion of Ukraine by Russia. But and then yet, what made a lot of headlines over the last few months has really been this rush of AI, applications coming into the space. And then we’ve seen the headlines of people just building hundreds of megawatts, gigawatts of data centre space to accommodate all the capacity demands that AI is pushing in. How, from what you do, have you seen AI change the requirements? Has AI impacted the development of data centres? And are people future proofing enough? Or is it impossible to even future proof like before?
SP: It’s very difficult to future proof. I think that there are thoughts and there are goals to future proof as much as possible. One thing that they’ve done from a future proofing standpoint is they are pre-leasing unbuilt properties, right. So they’re future proofing their land bank, and they’re future proofing their available, you know, capacity, if you will. This does a number of things for the industry, which I think we’ll probably get into here in a second about the money. But what it does, is it creates a lot more long term demand. And that long term demand does a lot of very good things for planning. Because if you know that something’s going to occur, then you can plan for it to happen, and you have time to be ready for it. And so I think that’s one way of future proofing. That may be unintended. But it’s helping out most of their, you know, important supply chain partners.
AI is changing the way that everybody kind of thinks about everything. And it’s mostly driven around GPU, and the way that the GPUs perform and the infrastructure requirements of those GPUs both in power and connectivity. And whenever there’s a power requirement, there’s obviously also a cooling requirement and or a heat removal requirement, because cooling is not necessarily the correct term. And so because it’s new, and because so few companies have a complete box around their AI goals, plans and development, there is a lot of attrition and churn currently in the design, and purchasing and planning stages of all of these AI facilities.
GBM: Interesting. And I guess they’ll also have some of some sort of impact between the relationship of vendors versus customers or vendors and customers. How is that relationship kind of changing on the back of all that?
SP: So it used to be that, you know, end-users, customers would say, “I need this from you, but I’m not going to tell you why or where it’s going, I just need you to give me this one thing, I need you to give me a price”. And so that was the relationship. Okay, we make this one thing. So you came to us. And then they would look at how your one thing interacted with all of their things.
Today, they’re like, “we can’t just put you in a box and ask you for something. We won’t get the information we need and that won’t be beneficial to us when we come to you with money to give it to us because we didn’t tell you everything”. Now they’re kind of opening up the kimono, if you will. And they’re saying, “look, here’s all the things, here’s everything that we got, this is what we know. What can you do for us? How can you be creative and doing that thing for us? And what do you need from us to be able to guarantee that when you say you’re going to do something, you’re going to do it?” Because all of that backs into how they receive funding and how they get their leases signed with their end users.
Their end users don’t want surprises seven years into a lease. They want to say to this company, this colocation operator, they want to say, “alright, we’re okay with escalation charges after a certain year but if we need to change infrastructure, we don’t want you to go back to the drawing board and make us resign a different lease. So you need to be able to provide infrastructure that allows us to go from point A to point B, without changing costs other than escalations normal throughout the life of the lease”. If the operator can get to that point, because they understand their suppliers and their supply chain their environment, they can come through on that promise. They will get a lease signed when that lease is signed. They can guarantee a return based on the triple net lease effectiveness, right, and they can go get funding Then they can build the thing that’s going to get revenue coming in the door for that REIT in that fund. And then they can move on and go do it again.
So speed to trust from a customer supplier relationship is important. That trust turns into promises from the operator to the user, that promise turns into a lease, that lease turns into money, and that money turns into a building. And then they go do it again. And so it used to be a foundation of keep them at arm’s length, we don’t really want them to trust us or us to trust them, because we don’t want them to know too much, right? Because they may raise the price, they may see that we have no other option. And that’s not monetarily efficient. Now, it’s trust first. Commercial, economic second, which is great. It’s very difficult. There’s a lot going on, there’s a lot that goes into building trust between a supplier and a vendor, but at least the market is being demanded to shift that way. And it’s unfortunate that it took this AI explosion as the necessity that’s creating this innovation around new customer and vendor relationships.
GBM: I think it’s very important. I mean, trust again, I think for this second part of the conversation trusts is the key word now. And what you said, when you sign something, then you’re not going to put forward another pricing point in a couple of months or years’ time. I think that’s very important. And things need to be upfront, especially as the sector is becoming more financially mature in the conversations that we’re having as well. Which brings me then to a question around budgeting, because especially they I mean, my assumption, I actually I feel lucky that I don’t have to deal with budgets to build these facilities, because I think it must be a nightmare nowadays to even try and understand what’s coming in terms of costs to build the platforms, how, with everything that’s going on, how can people kind of allow the budgets to still be flexible, to deploy the necessary capacity?
What It I mean, in this case, I guess AI is the key word and the things AI are pushing forward that we cannot predict because we might be planning for 100 megawatts now but in three, four years’ time, 100 megawatts are not going to be a lot, we’ll be looking at more, probably more like 400-500 megawatts for the same thing. So how can we just be flexible in that sense? And how does the supplier then play a role in that flexibility?
SP: I think that the word that I heard you say was predict, right? When anybody predicts anything, it’s usually their opinion. And so I’ll go from predict to opinion and I’ll go back to trust. How do people trust someone’s opinion? That’s a subjective situation where you’re using your own experience, or whatever, or things. And so what we’ve done to help with this, as we say, we’re not going to just hope that you trust us. And we’re not going to be appalled when you don’t, because you don’t really have a reason to trust anyone’s opinion. You can say, okay, that’s your opinion. And I do agree with it, or I don’t, but you have to trust it, right? Sometimes we don’t trust our own opinions, because we don’t have enough information.
So what we did is, we looked at how can we objectively create a much more predictive outcome. And so we’ve looked back on, you know, in stores, 30 years of doing what we were doing, and we’ve aggregated a number of data points. And then we created a solutioning tool that looks at all those data points that finds correlations between them. And then we’ve studied how those correlations can predict outcomes based on certain variables that are unknown. And then we look at all of those variables across the entire project lifecycle, and then we aggregate the outcomes of those variables, whether they’re positive or negative, from an effect standpoint on what we’re trying to predict.
Then we produce a budget that is weighted based on how any of these variables could affect one another throughout the outcome of the project. And we say, “here is a budget that will not produce a change order based on all of these variables that we know may or may not happen”. It’s analytical, it’s mathematical, and it’s objective, not subjective. And so we give it to them, and we say, “here’s your budget”, and then they trust it, right? They trust it, they trust it enough to go to an operator of hyperscale and say, “here’s your budget, it may be a little high, but guess what, that’s the number”.
That’s what it’s going to be. There’s not going to be change orders. And yes, we can do it in the timeframe that we said, because we understand the variables that are at play that could affect the schedule. And then an operator says, “thank you for that. It’s objective data, we’re going to use that and we’re going to get to a lease”. And that’s how we’re going about creating budgets that are objective and not subjective, not based on opinion, based on many, many data points of historical fact.
GBM: A quick side note, just for our listeners, Instor was recently acquired, and it was rebranded as Accelevation. Please correct me if I’m wrong, but I think that’s correct. Seems to have become Accelevation a few months ago. It’s kind of the same company, just a different phase of growth.
SP: Well, so Accelevation are the holding company, but Instor will remain the brand that we go with. So Instor is our data centre business unit brand, if you will, but Accelevation is our parent company there are a holding company and Instor is wholly owned by them. But from a brand recognition standpoint, we’ll continue to use that Instor name because of its market recognition.
GBM: Okay, thank you. Just going back to what you were saying, because I’ve read a few things that you’ve written around something called the Prism Process, is what you described the prison process, or what is the freeze prison process? If it’s not that?
SP: No, that is the prison process. You’re correct. The prison process is not just about solutioning, though, it obviously goes into project management, and then also into service operations and the fulfilment of the project. So that is the budgeting part of our prison process. And the thing that I discussed just now, the operation, the process that I discussed is part of a proprietary solutioning tool, software tool that we use to produce markets. I’m sorry, there’s the dog. There it is….
GBM: He wants to be part of the podcast as well.
SP: Stop. Sorry about that. I knew it was going to happen, it snuck up on me.
GBM: Still behaved. It’s nearly an hour into it.
SP: He just loves the barking people that walked by.
GBM: I was going to ask, so for a more direct example around cost saving using the prison process. So if I’m operator and I’m coming to you and I want to build a data centre, how can Prism help me save money?
SP: Speed. Speed is the thing that cost operators the most money or a lack of speed. So any type of delay in the LOI to lease standpoint or a delay from the lease to the funding or delay from funding to build, or delay from build to operator taking over is a delay in spending money and making money for them. And the longer there is between them spending money and then making it, is substantial for their ability to go do something different or go use those resources to go scale in another place.
So what we do is, we reduce that entire timeline by creating a very, you know, efficient and effective objective budget in a very short amount of time. So we can reduce that LOI to lease to funding to build to customer, which is revenue. And so because there’s such a long amount of time, the any day, month, week, we can reduce that is how we’re saving those people money, because the cost of capital now is actually quite high. So if they’re carrying capital cost without revenue, they’re paying on interest. And if we cut down on the time that they’re carrying it, then we’re dramatically putting money back in their pocket to go do the very next thing. It all goes back to how the money flows.
From a more project-based standpoint, we reduce change orders in our process by 80%. So a reduction in change orders basically means a reduction in costs. But it also means we know what the costs are going to be, which helps with you know, FPN, a financial planning and administration. And so if we’re doing financial planning and administration on the front end, then they more adequately understand the length that their capital is going to go. So they can dedicate capital away from a change order bucket for a contingency to other projects they can do concurrently. So now they’re growing their business faster as well. And so that’s how we help; we just eliminate a lot of variables within that process.
GBM: Yeah, and it comes down to trust, speed, and clarity on pricing, who has clarity in pricing?
SP: It comes back to what I said in the beginning: it is understanding their pain, their pain is their pain, their pain is how do we do this whole thing, not just this. One thing that you do, their pain is not getting a power whip from, you know, the PDU to the rack, their pain is getting a tenant to sign a lease so they can start building the building.
GBM: Absolutely. But then speaking about speeds of scalability. What’s the plan for growth at Accelevation now? Are we going to see you go into new geographies; are we going to see new products and new hires? Talk us through what the near term kind, 12-24 months, plan is for the company.
SP: You will continue to see us try and productise certain things that we use the most within our whitespace bit of projects. So we will continue to try to consolidate the supply chain and integrate it. That helps us better control the outcomes of the projects and helps us reduce margin stacking by buying and reselling things for our customers. And so we’re going to continue to capitalise on the commercial advantage that we have through our manufacturing capabilities.
You’ll see some new products come out that will definitely be within the confines of what I just spoke about. You will see us venture into new geographies, but you’ll see us follow customers there. There is so much North American work right now that it would be distracting if we just decided to go stand up a new market without having a base customer or a tenant or a base or you know, just an anchor customer if you will, in a certain geography.
So I’d say that we’ll be a little bit slower to progress and then scale as we have to follow the customers. The customers are going to grow, so we’re going to grow with them. We don’t plan on turning down work that is within our core competency. And so we will grow our team, both our manufacturing team and our service side of the business to accommodate the growth of our customers.
GBM: Okay, I’m not going to ask for pinpoints on the map but I think we kind of can guess more or less some of the regions that you’re going to be walking into in the next few months. And then I was going to ask in terms of talent, because especially in the first part of the chat that we’re having, we’re talking about the importance of really cultivating this culture of inclusivity, letting people be part of the discussion… How are you finding things when it comes to hiring new talent? And this could be the people with a lot of experience, are there enough out there for you to do what you want to do? But then especially with the younger people, so people coming into the market now and I guess, millennials but given the generation Z is now coming to market, how are you finding the hiring of those? Is it hard to find new people? What’s Instor doing around attracting new talent?
SP: We’re doing our best. I’ll tell you that, it is difficult. Why do I think that? There’s an odd expectation, for some reason in our industry, that people have to have like vast amounts of experience for them to be effective. I don’t subscribe to that notion. I think that part of the reason that we created the solutioning tool that’s part of our Prism processes, is because we have very long tenured individuals that may want to eventually retire at some point. And so, how do you reduce that risk, right, from the talent leaving the industry? And so we created that tool to allow people without vast amounts of experience to come in and utilise the tool. The tool accelerates their ability to make better decisions that they don’t have experience to draw on. So we can scale effectively without having to find someone who’s been in the business for 10 or 15 years.
I also think that we’ve created an ecosystem of very, very talented individual with individuals with amazing cultures, that is drawing people from other parts of the industry to ours. And that’s working out well for us. And then I think that it’s the other than that, it’s just roll up your sleeves and do the hard work of finding people and gaining trust that you’re the company that they should work for, and then never stop doing that. We’ve never, never stopped working on that. And we’ll still probably going to come up short every once in a while with who we need. We’re still going to be working very, very long hours, and we’re still going to have some burnout. And it’s going to be managed, and it’s going to be discussed. And we’re going to have to do our best as a leadership team and as an organisation to minimise it. But it’s understanding that those things are going to happen and not turning a blind eye to it that’s going to help us continue to succeed.
GBM: And it’s part of the business’ culture evolution as well. Things will change and adapt as new challenges come along. But as we’re getting to the end of our chat, I’ll bring it up again: any worst advice?
SP: I’d say worst advice is probably someone told me one time just make the decision because there’s nothing they can do about it. Like, for whatever reason, if someone doesn’t have a choice, then the decision is easy, right? That one’s not great advice. I don’t think that ever works out in the long run. I think that is a very short-term mentality. I think that it’s a very easy thing to rationalise when you’re stressed and you need to make a quick decision. But that goes back to the half patients, right? Do it the right way. How you do anything is how you do everything. So if you’re going to make a massive decision, and you’re going to take a lot of time, and you’re going to get some input, you’re going to ask smart people their opinions, then you should do that for a small decision, right?
Kevin Cashman wrote a great book called “The Paws Principle”, where it just literally tells you to stop, don’t do anything. Think about it, go back through and chase down all the rabbit holes of what this could do. And I think if we do that for small decisions, then we can move forward. Now, again, I’ll go back to don’t let perfection get in the way of progress. So there are no absolutes here. I don’t want everybody to think that I’m just on one end of the spectrum or other; everything’s kind of down the middle. So compromising all things. I guess.
GBM: It is adaptability. And you might have actually answered my last question. And this is one that I like to ask everyone that comes on. What is your favourite quote, by who and why?
SP: Oh, that’s funny. I guess one of them for sure is how you do anything is how you do everything, right. I have three little boys. And they think that, you know, practice is boring, whatever they’re practising in, whether it’s school, or whether it’s sports. And I’m like, if you practice poorly, you’re going to play poorly. And the games matter and winning is fun. So practice like you’re going to play. And I say how you do anything is how you do everything. And, you know, maybe that’s a little bit too elevated for a nine-year-old but eventually, you know, my theory is that eventually that’ll register when they’re 15 or 16. And they’ll be like, “Oh, that’s what that meant”.
If you’re going to clean your room, clean your room, like make it spotless, do it the right way. If you’re going to clean the bathroom, that toilet needs to be shining otherwise what’s the point? Right? What’s the point of doing something if you’re going to do it halfway. So do everything the whole way, like do everything the whole way. Clean the kitchen the whole way pick up your toys the whole way. Practice like you mean it. Workout like you mean it. Make decisions like you mean it, whether big or small, you know. Love people like you mean it. Be interested in people like you mean to. Do everything the way you would do anything or do anything the way you do everything. So that’s kind of a life motto for me. And it’s worked out pretty well.
GBM: Absolutely. I don’t remember where the study came from and what the actual figure was, but I read something somewhere once that about 90% of businesses fail because people do things halfway and they give up on it. And that is the biggest business killer. It is the fact that people just don’t stick to it, and don’t do things properly and go until the end with it. So that’s very interesting.
But Sam, I really appreciate our chat. I think some of the key words that came out for me it’s consistency, trust and in speech. And I think part of it is cost saving as well. But because this is an interesting split, I think we kind of got the three key words that came up and I really, really enjoyed it. So Sam Prudhomme, president of Accelevation’s data centre business unit, thanks so much for talking to me.
SP: Thank you have a good one.
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Welcome to another episode of the Great Business Minds podcast, the definitive show for th...
Welcome to another episode of the Great Business Minds podcast, the definitive show for the bus...
Welcome to another episode of the Great Business Minds podcast, the definitive show for the bus...