Zach Nathan

Cleaned & Rewritten Transcript

This transcript has been lightly edited for clarity and readability. The meaning, substance, and tone of the original conversation remain unchanged.

Henry Harrison: Welcome to the Henry Harrison Podcast: Entrepreneurs, Business, and Finance. Today we're very pleased to have Zach Nathan with us. He's a repeat entrepreneur, and we've become friends. We actually live in the same city, here in Dallas, introduced by a mutual friend. He has a very interesting company called Suite Leap, and we're going to learn a lot about that and about Zach. Hello, Zach.

Zach Nathan: Hey, Henry. Glad to be here.

Henry Harrison: Good. And I like your background, that's pretty cool. I have to ask, because it's right there: are you a guitar collector, or do you actually play?

Zach Nathan: I actually play. I have a very small collection. The entirety of it is behind me, plus one electric guitar. But I've been playing for almost 30 years now.

Henry Harrison: Wow. So, in a band? At the synagogue? Where do you play?

Zach Nathan: I used to be in a band. That's actually how I met my wife. It started in business school, where we played all the MBA happy hours on 6th Street when I was at UT. When we moved back to Dallas, some of the guys from the band were still here, and we kept playing shows. We were playing one show, and my wife's cousin's friend, who also happened to be friends with me, randomly brought her along. That's the first and only time I've ever picked up a girl playing guitar.

Henry Harrison: I never played guitar, but I think I was envious of the guys who could meet women that way.

Zach Nathan: It only happened once, but it was the one time I needed it.

Henry Harrison: Are you from Dallas originally? We talked about it, but I've forgotten.

Zach Nathan: I was born in Houston, moved to Dallas when I was two, and grew up here.

Henry Harrison: Okay. Then UT for your MBA, and back to Dallas. Let's talk about the business you're primarily focused on now, because it's neat, innovative, and growing. Tell us about it.

Zach Nathan: Sure. It's called Suite Leap. At my former company, which we'll get into, I had the experience of hiring a fractional CFO myself, and it was a real game changer as a business owner. I started thinking, why doesn't everyone in the small and medium space have a fractional CFO?

What I realized as I grew that business was that I could have used a fractional marketing person, a fractional HR person, a fractional operations person, and a fractional technology person too. So I thought, why not combine all of those under one roof and create a one-stop shop for fractional leadership across every major business discipline: finance, marketing, operations, HR, sales, and technology?

As a business owner, I had assumed the problem was that I didn't have the right leader to take me to the next level. But the real problem was that I didn't have the time, resources, or knowledge to properly find and vet that leader. And once I did find them, I couldn't afford them, because I didn't have $300,000 or $400,000 a year to spend.

What I really needed was the right expertise and leadership, at the right time, at the right price, with the right experience to help me get to the next level. That's what we built at Suite Leap, bringing all those functions together to help small and medium businesses break through and grow in the most cost-efficient way.

Henry Harrison: What size business is the sweet spot? Where are you most able to help?

Zach Nathan: We think about it in terms of revenue, so typically businesses in the $5 to $50 million range. Around that point, we find there's an inflection point. They've built the business to a certain level, but they need additional expertise to break through whatever ceiling they're hitting. It's largely industry agnostic, because CEOs, founders, and owners tend to hit that level around the same point, where they need the expertise but can't afford, or don't yet need, a full-time person.

Henry Harrison: And there are advantages to not having a full-time person, aren't there? They may have a wider perspective from working across multiple businesses instead of one their whole career.

Zach Nathan: Absolutely, a couple of things. First, an outside perspective is genuinely valuable. Working across many industries and businesses, and bringing that to bear for a company, is incredibly useful.

Second, hiring full-time is risky and expensive. If it doesn't work out, there's severance. If it does, there are benefits and bonuses, and a lot goes into a full-time hire. With an outside person, you don't pay for vacation, benefits, or bonuses; you pay for exactly the work they do.

A lot of the time with full-time hires, you may not even need them full-time, so you're wasting money on capacity that won't be fully used. It's about finding the most efficient way to get the expertise, because expertise is what the business actually needs.

I talk to a lot of founders who say, "I don't know what I don't know. I know I need marketing, but I'm not a marketer. Can someone come in and tell me what to do?" They want help with strategy, but they also want a strategic thought partner to talk things through and help figure out the right team to get where they want to go.

Henry Harrison: What's the profile of the people you bring on to place at founders' companies?

Zach Nathan: A lot of gray hair. You don't have much gray hair, but —

Henry Harrison: I've got a little bit here.

Zach Nathan: It's a pretty wide variety. Start with the grayest hair: someone near retirement who has been very successful and maybe only wants to work five or ten hours a week, but loves helping entrepreneurs and businesses. They bring years of experience from corporate, small business, or a combination of both.

On the other end of the spectrum is someone who has also been in the corporate or small business world but doesn't want the classic rat race, working for someone else and dealing with the politics. They like working with a variety of clients on a variety of problems, coming in one or two days a week to help owners solve them. It's a very diverse set of experiences.

Universally, though, everyone gets excited because they can make a real impact in these small businesses. If you work at a billion-dollar corporation and make them $10 million a year, who cares, it doesn't move the dial. But if you go into a small business and earn them an extra $1 or $2 million a year, that's life-changing, generational stuff. That's what excites our people: helping businesses grow in a meaningful way and get to the next level.

To get back to your question, on average our folks bring between 15 and 20 years of business experience, often concentrated in one functional area like HR, finance, or marketing. It's not just that functional depth, though; it's also the general business experience from working everywhere from big enterprises to small companies.

Henry Harrison: You had a big career at American Airlines, 11 years. Very precise on LinkedIn: 11 years and four months.

Zach Nathan: There you go. Yes.

Henry Harrison: Director of AAdvantage Partner Marketing, director of payment strategy, senior manager. You worked your way up, so you understand that $5 to $50 million is the small business category. The government defines small business as under 400 people, but many would say those are fairly large businesses too. It's not a one-person shop or a single franchise owner, but it's not American Airlines.

Zach Nathan: It's not American Airlines, no.

Henry Harrison: Thank goodness for American; we live in Dallas-Fort Worth. What was it like there?

Zach Nathan: I loved working at American Airlines. It's really where I started my professional career and cut my teeth. As a newly minted MBA, it was great, because they would put you in a job and then move you around year to year. I'm not sure if they still do that.

I got a very large breadth of experience doing things I really had no business doing: corporate sales strategy, labor union negotiations, and, as you mentioned, time on the Citi AAdvantage team helping run the credit card. It was all about moving into a job you had no business being in, getting up to speed as fast as possible, and figuring out how to add value.

That builds leaders, not necessarily through depth of expertise, but through breadth. It gave me the skills to walk into any business situation and ask, "What's the problem, and how can I add value?" I loved that, and I loved the people, absolutely top-notch. The issue for me was that I'm an entrepreneur at heart, and that environment isn't the most conducive to the entrepreneurial spirit.

Henry Harrison: Speaking of that entrepreneurial spirit, was that something you were born with? Were you a kid traveling around doing things, or did it come to you later when you thought, "I want to do something different"?

Zach Nathan: Maybe. I was never the lemonade-stand kid. What it really was is that my father is an entrepreneur. He's owned his own photography business in Houston for more than 40 years, doing party pictures, graduations, weddings, bar mitzvahs, all of that.

My parents separated when I was two. He lived in Houston, I lived in Dallas, and every summer I'd go to Houston and he'd put me to work. So I'd be a 12-year-old kid taking pictures at a party. I loved the lifestyle and the hustle. We'd go to the arcade in the middle of the day, play video games, then go back to work. I loved that flexibility, and I loved watching him handle all the problems. It was fun and exciting, and that always appealed to me.

The problem was that I never had a good idea for what I'd do. In my heart I wanted to own my own business, but I'm not really an ideas guy. As far as executing, I love that part. So I went through business school planning to work for a company, get some experience, and eventually go out on my own, with no idea what that would be. But I always wanted to follow in my dad's footsteps.

Henry Harrison: When you left American, did you just leave and say, "Okay, I'm done"? Were you married at the time?

Zach Nathan: Yes, I was married.

Henry Harrison: So that's a bit of a leap. Did she say, "Honey, don't give up the job, how are we going to pay the bills?" What was your first step?

Zach Nathan: Yeah, that was scary. What happened was that a friend and I decided to start an urgent care business together. I worked at American on nights and weekends for two years to get that business off the ground, doing my full-time job and managing the urgent care at the same time. I wasn't going to feel comfortable leaving American until that business reached a point where it could provide at least some of the salary I was earning. Once it got to a reasonable level of income I could count on, that's when I made the leap. It took two years to get there.

Henry Harrison: That's a long two years working two jobs.

Zach Nathan: It was. Small kids at home, a lot of sleepless nights. A wild time.

Henry Harrison: So that was the urgent care. You've got a few medical ventures on here, and also Safe Work. I'm looking at your LinkedIn to ask the right questions.

Zach Nathan: That's exactly it. We started a local urgent care business here in DFW, and alongside it I started a medical billing business to service the urgent cares and other customers. I went in with no healthcare experience, very similar to my American Airlines approach: it's just another business problem, let's figure out how to solve it. I had a doctor who helped with the medical side.

We grew the urgent care, and the medical billing business grew alongside it. There were also some adjacent businesses that came out of the urgent care. Safe Work was one. That was during COVID. We had the idea that businesses would need COVID testing to get their people back in the office, so we went to companies and did remote testing on-site.

It was interesting, because a lot of businesses went the opposite way, assuming everyone would work from home permanently. We were propping up a business in the middle of COVID to help get people back to work. We also started an ER physician staffing company and a few other things, all adjacent in the healthcare world.

Henry Harrison: Whose idea was the in-office testing?

Zach Nathan: I think that was my idea.

Henry Harrison: You're not giving yourself credit right now.

Zach Nathan: You're right. Okay, that one was my idea.

Henry Harrison: Once in a while.

Zach Nathan: Once in a while. I did say I'm not an ideas person. That one was mine, but we brought in partners and had help along the way.

Henry Harrison: It's interesting, because you have a wide variety of experience as a repeat entrepreneur across a series of businesses leading to this current one, plus the corporate background. That benefits your clients, because you have that perspective, and you're also bringing in other experts. You're not the one going in, I assume. Or have you done that yourself?

Zach Nathan: Actually, when I started, like with most things, I wanted to do it myself before hiring someone else for it. So I spent time doing some fractional work. I still have one client where I'm their fractional CFO, because I love it, I love the client, and I love the work. I spend a little time helping them and the rest growing the business.

For my clients, the value is that I have the enterprise experience at American, I started my own business and grew it from zero to $20 million as the owner and CEO, I hired a fractional myself in that business, and I'm also a fractional. So I understand it from every angle. That lets me partner with clients, understand their problems, and help them figure out the next pieces they need to get to the next level.

Henry Harrison: Before we came on, we got to know each other a bit. Most entrepreneurs, even the biggest, have struggled. I've forgotten how many times Ford went bankrupt before he got going; I think three times before he got Ford running with the Model T. One of your businesses had a tough ending, and there's a lot of value in that, learning from it and understanding the feelings involved when your clients go through a tough time. The empathy is different when you've been through it.

Zach Nathan: It is different when you've been through it. A lot of business is knowledge, experience, and luck. But the most important thing is taking the tough experiences and asking, "What can I learn from this?" and letting it make you more resilient.

We had a successful business. It didn't end the way I wanted because of a partnership dispute, but that doesn't mean it wasn't successful or that I didn't learn a lot along the way. Even though it wasn't a huge exit for me, I gained valuable experience I can bring forward to others.

Henry Harrison: Let me put you on the spot. What are some stories where you helped clients who were stuck? You mentioned the marketing example, but then what? They get your team to come in, and then what happens?

Zach Nathan: Sure. One off the top of my head, and for confidentiality I won't name the client: they came to me at about $15 million in revenue. They said, "This company started with a guy in his pickup truck driving around doing the work, and we've grown it to $15 million, but along the way it's become organized chaos. We're successful, but we're stumbling over each other. We just need more adults in the room. Can you help us figure out what to do? We're not even sure where to start."

So we ran a full-day strategy session: tell us all your problems, everything going on. From there we figured out a few things.

First, they needed someone in the president/COO seat. They already had a person we agreed should move into that role, so we built a support structure around them.

Second, they had more than 75 employees and no one doing HR. They had a warehouse with a lot of turnover. So we brought in an HR person quickly to handle the basics, hiring and firing. At the time they had an open-door policy, so employees were going straight to the owners to complain, which ate up the owners' time. Bringing in HR alleviated that right away and gave employees a real resource.

Third, revenue had stalled. So we brought in a fractional chief commercialization officer, because they needed both sales and marketing under one person who could make them run together. They had a sales team in place, so we oversaw it, and on the marketing side we rebranded, redesigned the website, repositioned the company, and actually renamed the entire business. We empowered the sales team with the right talking points and event strategy and got that commercialization engine running.

Finally, the person we promoted into the COO/president role had never held it before. So I had one of my fractional COOs come in to work alongside them, helping them grow from a "baby COO" into a more mature one, with the right structure and systems in place. They weren't doing the COO's work for them; they were helping the new COO get to where they needed to be to build out the rest of the organization.

That's been a huge success story. We helped their business grow from a disorganized, back-of-the-pickup operation into a company with a clear org chart, a working demand engine, and a support system for the COO. They increased revenue by at least 50 percent and profitability by at least that much over about 18 months.

Henry Harrison: Fifty percent?

Zach Nathan: Fifty, yes.

Henry Harrison: Wow. And I imagine the stress is lower for the founder and the whole team.

Zach Nathan: Exactly. For us, that's a real success story because they're a true partner. It wasn't just, "Do you have an HR person?" It was, "Let us partner with you to figure out the right person to bring in at the right time."

About 30 percent of our clients have more than one fractional working there, and those are the clients we love. They recognize that fractional really works, and once it works once, they ask, "Who else do you have to help us grow this thing?" That's exactly what happened here: HR was working great, so what's next? Those are the partners we love working with, helping them figure out who to bring in next and what part of the business to improve.

Henry Harrison: So that's your trick. It's like a drug, they want more.

Zach Nathan: Oldest trick in the book.

Henry Harrison: What struck me is that I've had staffing agencies that helped me, they're good at figuring out what kind of job, and we got a really important chief compliance officer through one in a prior business. But then they're done. Your model seems very custom. It's not "block and tackle, here's your CFO, let me know in a year how it's going."

Zach Nathan: That's exactly it; it's not that way. Each client is assigned a client success manager. The idea is to put the right fractional in place and then stick around to make sure it works. We talk to the client every month to confirm the engagement is on track, that the fractional is delivering, and that they're happy. We also talk to the fractional to make sure they're prioritizing what the client wants.

Where things go off track is when the client wants the fractional working on one thing and the fractional thinks they should be working on another. We want to marry those so both are on the same page. That client success component has to be in place for these engagements to last and for the client to get the most out of them. We're definitely not an agency. We stick around and partner with our clients.

Henry Harrison: You mentioned one to two days a week, and some different amounts. Is there a range? It probably varies by specialty too; HR may differ from CFO.

Zach Nathan: There's definitely a range. The overwhelming majority of our engagements are one or two days a week. Some are three. Some are advisory, as little as one hour a week. The whole idea is that it's customizable to the client, and customizable month to month.

When you talk to small business owners, things change quickly. Flexibility matters, both to them and to me as a business owner. Maybe there's a big thing this month, buying out an investor, raising money, a major marketing push, so we give people the ability to scale up. Or things are slow and we scale down for three months; that's fine too. As a small business's needs change, and they change all the time in growth mode, we want to be as flexible as possible. That's where client success comes in: making sure the fractional's time matches what the company needs in any given month.

Henry Harrison: You're a very positive person; I felt that from the moment I met you. Even the way you described the difficult exit, "but I learned a lot," is a positive way of looking at it. What's your biggest challenge with your current company?

Zach Nathan: That's a good question. We may have talked about this —

Henry Harrison: Just to give the audience context: if I recall correctly, you have around 100 people placed, or in that range. We're not talking about five people. You've got a pretty big reach and quite a number of clients. You've built a great team, and the people you place are experts themselves. That's a sizable organization.

Zach Nathan: Oh, for sure. With every business there are challenges. Sometimes I have to remind myself that we need to do the same things we tell our clients to do.

Henry Harrison: Look in the mirror, right?

Zach Nathan: Exactly. Part of it is making sure we have the absolute best people to place. Another part is service delivery. We're not at the client every single day understanding all their interactions, so our challenge is giving the fractional leader enough leeway to do their work while making sure it meets the quality we want. It's a combination of using our frameworks and assessments and making sure the fractional brings their experience to bear in the best way possible.

How do we make sure that, from the client's perspective, they're getting the most value, the best experience, and the absolute best person? That's what we think about constantly. Most of the time it works out, and we're getting better at it. We've done somewhere around 40 to 50 engagements, and I can count maybe two or three times where the fractional wasn't the right fit or underperformed. So our success rate is really good, but I'm always thinking about how to make it better and add more value.

Henry Harrison: Continuous improvement. From what I've heard from you and others, it's clearly working. But as you said, things are always changing, and we have to change with them. Continuous improvement is part of life for entrepreneurs. That's my two cents.

Zach Nathan: Agreed.

Henry Harrison: That's a pretty good wrap-up. Unless there's something you'd like to add, I really appreciate you coming on. How would people reach out to you or your company? What's the website?

Zach Nathan: Sure. It's Suite Leap, S-U-I-T-E, leap, L-E-A-P, dot com. You can contact us there, or through my LinkedIn; those are the two best ways to reach us. A lot of times we talk to folks who may not know about fractional, who are "fractionally curious" and want to learn more. A lot of what we do is just figure out whether fractional is a fit. Often I'll tell people it's not. Maybe their problems are too small and they need a bookkeeper rather than a fractional CFO, or their problems are too big and they need a full-time hire.

Because it's not the right fit for everyone, a lot of what we do is exploratory conversations to figure out whether it makes sense. If it does, we can help. If not, we'll refer you to the right place.

Henry Harrison: One thing we didn't cover: regions. Where will your company help other businesses?

Zach Nathan: Because of remote work, we can work anywhere. We do a lot of work in the DFW area, but we have fractional leaders all across the country, and a couple internationally too. We have clients across the country as well. If folks are open to remote work, we absolutely do that, and we can fly out to see them. Region isn't a problem for us.

Henry Harrison: Your business itself is remote, isn't it?

Zach Nathan: It is. We spend a lot of time in our clients' offices, so we're all remote ourselves.

Henry Harrison: It makes perfect sense, and it's almost a test. If you can't run your own business remotely, how are you going to run everyone else's remotely?

Zach Nathan: That's exactly it. We prefer to be in our clients' offices over our own anyway.

Henry Harrison: Fantastic. Thanks a lot, Zach. I look forward to catching up again soon.

Zach Nathan: Thanks, Henry. Appreciate it.