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- [00:05]
Sarah Lynch
I'm Sarah lynch and you are listening to your NEXT move audio edition produced by inc. And Capital One Business. For this season, we gathered a bevy of conversations with entrepreneurs who made last year's Inc. 5000 list. They joined us in our your Next move Booth at the Inc. 5000 to share lessons learned and anecdotes from building their businesses. In this episode, Inc. Staff reporter Ali Donaldson interviewed Gennaro Cavazos. He is the founder of GXC. They're ranked number 188 on the 2024 Inc 5000 list, and they're a security company offering advanced metal detection and protection services. Ali started the conversation by asking Gennaro how the company grew so much so quickly.
- [00:53]
Ali Donaldson
What do you attribute to that fast growth?
- [00:55]
Gennaro Cavazos
My team, you know, you want to go fast, go alone, want to go far, bring a team. And as I've spoken to a lot of people here at this conference, I get that same question. How did you make it into the 2000 plus revenue multiplier? Did you hire a lot of subject matter experts? Did you, you know, how did you pull it off? And I said, I typically say no. I actually made it a point to not hire a single person with experience in the job that they're doing. What I've learned, if you do what you want to do as opposed to what you have to do, you will be a lot more successful. And you unlock the power of the person when they're working from a place of passion. And it was a bit of a gamble. It's a lot of faith. And some people would consider me so hopelessly optimistic that I'm naive. But I do believe in people chasing what they're after. So to be honest with you, we built this place by making sure that nobody was stuck in the throes of the place they left.
- [01:53]
Ali Donaldson
I really like that. And also I'm curious too. When people don't have that background, do you feel like you don't have to break bad habits, that everyone's starting from kind of square one of what your company does?
- [02:03]
Gennaro Cavazos
Absolutely. I am a huge opponent of the way it's always been and this is how it's been done. And I share that same philosophy. Well, if it was so great, respectfully, why aren't you still there? So I want to be careful to not allow a culture to develop where it's like folks that move from one state to another and they start voting for whatever it is that they left and that they tried to get away from. That is probably one of the biggest challenges we face is you don't want to make it appear that you're critical of somebody in their experience and, like, you don't value it. But also, it's like, please keep in mind this place isn't that place, which is why you're here. So let's be careful.
- [02:41]
Ali Donaldson
And so when you are hiring in this way, where it's not the specific experience they've done before, but it's more those intangibles, the things you can't teach, how do you find those people? How do you hire that right person?
- [02:51]
Gennaro Cavazos
I actually have a method I use. It's not my own method. It's one that I found to be incredibly effective. You have a hypothetical conversation with them, and you deal five years in the future, and I'm gonna give you 10 statements, 10 declarative statements, and you're gonna fill in, almost like a Mad Libs exercise, what it is that you've done. So one would be, I've purchased, I've accomplished, I've developed, I've learned, and we go through 10 of them. And every single time I've done this, I've been able to pick the exact one that falls under this next criteria, which is the next round of questioning. Let's pretend I have a magic wand. I can only make one of these things come true, and it's guaranteed. Which one of these do you want to make sure 100% come true? And based on how somebody responds to these questions as I'm asking, I can always pick because I'm good at understanding what you are actually into. Some people will say, I've learned how to become a good employee at gxe. Okay, that's manufactured, right? Some people say I've purchased a home for my mother because one of the things I always wanted to do when I was a child was provide for my parents the same way they provided for me.
- [04:06]
Ali Donaldson
So do you find that most people will answer that combination of both professional and personal?
- [04:11]
Gennaro Cavazos
Yes, and I'm very careful to tell them, and I'm very direct. I'll say if I feel you're giving me an answer I want to hear, I'm going to stop you, and I'm gonna ask you to try again. I don't want you to tell me what you think I want to hear. I want you to tell me what you feel. And typically, the people that really commit to the exercise, the ones that can feel vulnerable enough to work from a place of passion and start talk, things that have nothing to do with the job, those are the Ones that you know will be free to pursue that passion and address whatever issues there are in the most functional way that's going to allow them to be successful and the organization benefits from that.
- [04:45]
Ali Donaldson
That's really interesting. And so you find too, when someone says, well, the most important thing is I want to buy my mom a house that's going to be a really good employee.
- [04:52]
Gennaro Cavazos
And the final one is, okay, I can't guarantee that I don't have a magic wand to make that happen. Tell me your plan to make that happen in the next five years. And that's where you really find out their ability to problem solve. Start with the end in mind, work your way back. Let me hear how you can critically think. Now I've just put some pressure on you. You said this is your dream. You said this is a goal. How do you plan to accomplish it? And those that successfully navigate those three phases of that exercise, those are typically the ones that have been just phenomenal. We have no attrition. Nobody leaves.
- [05:23]
Ali Donaldson
Wow.
- [05:24]
Gennaro Cavazos
Which is very difficult for a security based company.
- [05:26]
Ali Donaldson
Really. Is there a lot of turnover in the industry?
- [05:28]
Gennaro Cavazos
Yes. So we, as I said, protection from a staffing standpoint as well as technology in the staffing industry, in the security world, it's typically one predicated on seeing how well you could drive the wage down, which drives down the talent so that they can pick up volume and generate revenue that way. And what happens is the client ends up not receiving a high value or great services, which increases risk. And you find yourself then in a chicken or the egg situation. Right. If you're not happy with the services you're getting and I'm billing you, let's just say $30 an hour. Here comes GXC and we say it's going to cost you 40. Well, they're going to look at their existing provider and say, I can't get the same people to show up on my site. Their people show up different shades of effective. We'll say, why am I going to pay more when this is my understanding of security as a whole? So we come in with a different perspective of you will get what you pay for, check our resume kind of thing. Because we focus on getting the wages up for the employees. That makes them stick around. Right. And we do other things like every employee gets an Amazon gift card for their birthday. We find different ways to kind of promote the group and the team and when they feel like they're part of something, why would you leave?
- [06:41]
Ali Donaldson
And do you think that race to the bottom in terms of Pricing is the biggest challenge facing the security industry.
- [06:47]
Gennaro Cavazos
Oh, I would say the. It's a big one because a lot of the larger organizations, I don't know if you're familiar with the AstroWorld issue from a couple years back where there was a giant crowd push. Several people passed from this, and that is a consequence of that type of security mentality. Very unpopular opinion. But by and large, when you don't have professionals that can help mitigate these types of things, manning the gates, manning the front of the line, that is what occurs. That's part of the race to the bottom. The biggest race to the bottom is a lack of investment in security organizations in taking the chance to professionalize the people that they're paying at a lower rate to give them an opportunity to grow beyond that for themselves. It takes a certain type of person to know that for the same pay you could get at McDonald's, wrapping a burger, you risk getting punched in the face for at a gate. Right. So you have to dig into the psychology of that person and why they choose to do that. You're there for a reason. Right. And if I can unpack that reason and I can make a modest investment and give you all the resources possible to grow your personal training portfolio and you actually do it well, then now I'm going to help you up because you're helping yourself. So I think the biggest problem and the race to the bottom exists because it's an overall lack of investment in the people that really may want to do this for real.
- [08:08]
Ali Donaldson
The fact that you're in this industry that has a lot of drink competitors, they may be undercutting you on price. How do you stand out? What has been the most effective marketing hacks for you?
- [08:17]
Gennaro Cavazos
You know what the first core belief I have is I have no true competition. What I mean is I'm my competition. If I'm not unpacking different ways to re present and remarket and redefine security concepts and deliver them to the customer in a way that they can understand them and that I can clearly articulate how I'm going to solve their problem while providing value in our service. Well, that's part of it. The other part of that is we more focus on the professionalized solution. So when we're under bid, it is like a okay, you will get what you pay for. And security is one of those industries that you don't need it until you need it. You don't budget for it until you have to. But know that that security budget, since it's not proactively developed, at least on a scale that you might need it to be after something terrible happens. It has come from other parts of the organization. So other parts of the organization now suffer to develop the security budget, and they typically shortfall it.
- [09:19]
Ali Donaldson
Engineer, I'm curious, after you've given some clients that message, you get what you're paid for. Okay, walk away. Have you had some of them come back later in the future?
- [09:26]
Gennaro Cavazos
The actual first contract we ever won with gxe, it was a library chain out in Long Island, New York. And we did a walkthrough. And I'm the type of person that it's always guaranteed to be a no if you don't ask the question right. You never know what you can do. And when you do, speak your mind and be transparent and approach things with a radical type candor. You can't unring that bell as long as you deliver the message properly so people can't unhear things. So we're doing this walkthrough and I see some of the other organizations that provide the type of services, race to the bottom services I'm talking about. And I pulled the director aside and I say, I want you to know some people would see it as arrogant. I see it as assuredness and understanding the market. If you hire any of these other organizations, you're going to regret it. They're going to be cheaper than me. But I'm going to solve your problems. Three weeks go by, we submit the bid. This company bid a full dollar an hour less than we did, which is a good amount. That's a really good amount.
- [10:26]
Ali Donaldson
That adds up.
- [10:27]
Gennaro Cavazos
They hire that company because the board mandated that they do that because they were lower on price. And three weeks after that into the start of the contract, a displaced person comes into the library, gets on the computer and starts looking at things you probably shouldn't look at in a public library. And the library staff looking for the security officer, trying to find him, can't. Asks the man, hey, I need you to stop doing that, please, can you please leave the library? And he proceeds to pick up a chair and start swinging it. While this is going on, the security officer happens to sneak in, sign in, of course, two hours past his shift start time, to try to make it seem like he was there. And they called me the next day and said, we want you to provide these services. So the first question was, how can we help? Can you match their bill rate? I cannot. The answer isn't you pay less. The answer is you buy less. Because we have a value to maintain. And I can't cheapen my employees livable wage, make them feel like they're part of something, make them be able to support their families and they'll protect that place like their own home.
- [11:30]
Ali Donaldson
And I imagine too that that's an easier sell to when you're talking to clients to say, remember these are people, they've got families, they've got bills to pay.
- [11:36]
Gennaro Cavazos
Absolutely.
- [11:37]
Sarah Lynch
When we come back, Ali speaks to Gennaro about the different ways clients find his company and where people are looking for security firms. But first, a quick break.
- [11:52]
Gennaro Cavazos
Our tag and our company motto is people protection and process. And security is a combination of those three things. And if you cheapen or shorten any one of those three, you're not going to have a protective posture that you're needing to really actually make a difference in keeping people safe.
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Ali Donaldson
Gener you walk me through sort of your pitch. Where are the avenues that clients find you? Where are people looking for security firms?
- [12:15]
Gennaro Cavazos
Unfortunately, we are the type of organization and the commodity we offer in metal detection and weapons detection technology that we're typically called after the fact. And that's a very difficult space to work from because now everybody's afraid. And a lot of the other organizations who might try to offer what we do and do it, how we do it, they more focus on the fact that it happened in Upsell. We stick with solve the problem. Classic risk mitigation. Let me address the the actual credible threats. Let me supplement you with technology that's going to solve your problem. Let me help you with the people that are going to work that technology and let me develop you a consistent process. The pitfall of this is because what we do is typically reaction based only by an organization's inability to prioritize being proactive marketing. This is a double edged sword. So imagine you're safe at work, right? And you get an email from a security company that says, hey, you should be screening for weapons detection here. Would you like to buy this metal detector? No, I've never had a metal detector like so it's almost like you're marketing fear. Well, if you don't have it, it's only a matter of time or you probably should. Right? And that's a difficult space to work from because you don't want your brand to be associated with that type of emotional approach to driving people to buy. Right? People buy emotionally. That's one of the oldest concepts of sales. People buy emotionally. The problem is you can't put someone in that emotional headspace and expect to Be successful because people never remember what you say or do. They remember how you made them feel. If you make them feel unsafe, they're not going to buy from you. But just marketing that product is essentially insinuating they're unsafe. You need weapons detection, metal detection here, you need security here. Well, do I? Nothing's ever happened.
- [14:06]
Ali Donaldson
So knowing that, do you avoid things like cold outreach or advertisements?
- [14:11]
Gennaro Cavazos
I am of the thought, and this might be a bit of a contradiction because I say I don't have competition, I do try to find out what my competition does and do something completely different. So we take an approach that is sort of having us embed ourselves on your team as sort of an unpaid consultant. Right. And they say, don't ever do free consulting. It's nonsense. In our industry, if you do not help people understand the gaps they have, they don't even know they exist. It's classic. Tree falls in the woods, make a sound, right? If I can show you that based on crime statistics or data, employee interviews, that you've had 17 assaults in the last year that you might have known about maybe three of them, well then maybe we should mitigate that vulnerability with a countermeasure. So it takes a different type of approach to market and it's a very long pipeline. But once you are successful, you're not gonna be stopped. The one time we successfully marketed proactively to an organization that did not have a lot of ambition on number one, even thinking it was possible to be done, number two, understanding how it can actually be executed was the Indianapolis 500. The Indianapolis 500 brings in nearly 350,000 spectators every year. It's a one day event and I've.
- [15:25]
Ali Donaldson
Heard from some friends from there that it's a wild time.
- [15:28]
Gennaro Cavazos
It is. And it is like you've never seen more beer in your largest event. Right. And interestingly enough, if you have to screen with a metal detector, think of all that beer coming through. How do you screen people for weapons with thousands upon thousands of cans of beer coming in? Well, that's where we come in, Right. The technology we use is not cheap, but it is the world's leading technology. Combined with our processes. We did a 20 minute, like quick documentary on it because it was history. It's the first time ever they screened. It was wildly successful. And I knew it was going to be because we planned and we, we had people saying, this is the fastest I've ever gotten in the Indianapolis 500 ever. You know, you implemented metal detection. I thought it was gonna be slow, but what they don't realize is that the people paired with good protection technology and the process of cuing people and moving people's a science, moving them safely is even it's chemistry, right? So we were able to pull that all off and, you know, proud of that because it's literally history. There's only one biggest event in the world, and it was a feather in our cap that, hey, everybody, if you think that your organization cannot undergo this same type of transformation without compromising the confidence you have in your existing security parameters, it can be done.
- [16:42]
Ali Donaldson
And so when you created this video, Rada, this sort of mini documentary, like, what did you do with it then? Do you put it on YouTube? Do you splice it up to put on social. Because I think people weirdly like lines is a thing I think people like to watch on social media. Those like sped up line videos. And we all hate waiting through security. So it's like if you see people going fast, I could see that, you know, catching some fire on social media.
- [16:59]
Gennaro Cavazos
Time lapse is huge, but also time lapse doesn't tell the story. A time lapse can actually, from a weapons detection and screening standpoint, could look unsafe. Like all these people going through so fast, are they even being screened? Well, of course they are. I put it on LinkedIn. I know you're supposed to tell your story, right? You're supposed to market yourself. You're supposed to scream to the rooftops. This is the first money I've actually spent on marketing in terms of coming to this gala, like the flights and all that. And because we've not had to market. But the pitfall I face is what I spoke about earlier. If I do promote this stuff and I do market this stuff, is the message going to be received by the person that's sitting there that doesn't yet have the problem, is it going to be received well enough that it can cause them to get in motion and let that inertia carry itself through a successful implementation of technology based on a budget that has to be developed based on money that wasn't there, that's being taken from other avenues of the organization? It's a very difficult climb, which is why I think we've graduated into that organization that people call when something does go wrong from schools around the country. We do a lot with trying to donate to these schools, like after a school shooting or something. I have a fleet of metal detectors that if I'm not using them, take them. Please, right? Like, please.
- [18:08]
Ali Donaldson
And I'm curious for you, you know, Gennaro as a founder in this difficult space where it can be really, I think, emotionally difficult that you and your team are showing up after something horrible happens. You know, how do you do that? How do you take care of yourself and your team?
- [18:20]
Gennaro Cavazos
I've never had a problem leading with my heart. Vulnerability is not a problem for me as I am. I was born in 83, so I'm sort of like a dawn of millennial age here. I don't know if it's a new way of approaching it, but I lead with vulnerability and understanding empathetically. I have two 10 year old daughters and they are my world. And I approach every single job that I'm on, every single major high profile event that I'm part of. I have to walk my kids in here, right? And if I'm going to walk my kids in here, what am I going to do? Well, I'm going to put in the time, I'm going to put in the effort, the thought process. I'm going to bend around your budget as best as I possibly can, right? And just make it work. I don't let it consume me. I'm a Marine Corps veteran at a couple combat tours in the Marine Corps and was a federal law enforcement officer after that. So I've been around environments that will cause you to be able to function when others might focus more on what happened. And I'm focusing on how does it not happen again? And that calmness that I think is entered post catastrophic or critical event unintentionally ends up becoming a great selling point because everybody's on fire. I'll give you a quick one. State Fair of Texas last year, we were actually there and we put metal detectors all around the fair. It's the largest fair in the country. They put I think like 3 to 4 million people through there over the course of 23 days. And somehow a weapon got in and it's still investigation. And so I know what happened, right? And what I know is that if that weapon passed to our detectors, it did its job. I know this to be true. And I get the call, 8 o' clock at night, I'm in New York. This just happened. I get on the first flight, 4am out of New York, get down to Dallas. And I stayed there long enough to be able to eventually speak with the public relations person for the state fair. Very, very lovely person. And you talked about the emotion on the back end of something like that happening. It's supposed to be a family fair. 30 to 40 years had gone by since anything like this had happened. But her job is to now present a strong front to the community, let them know it's safe to come in. And I was told it was a badge of honor I should wear proudly that they let me step out in front and help the state fair and the community talk through this. I did several media opportunities and several media sessions to help everybody understand that you are safe here. These types of things can and will happen. But what was done already prevented it from being even more catastrophic.
- [20:57]
Ali Donaldson
It kind of reminds me what happened with the Taylor Swift concert being canceled in Europe of like that's because people were doing exactly what they needed to do and found that out and was working with law enforcement.
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Gennaro Cavazos
Absolutely. And that's all it is, collaboration. Right. There's always the. I find that as people, we desperately search for closure to try to make sense of something that you technically cannot make sense of. And that's actually where trauma's born. When you can't complete that cycle of thought process and find rationality or place rationality to what happened or can rationalize what happened, it becomes scarring. And while everybody else is trying to work through that cycle, I saw my first combat at 19 years old. I learned how to close that cycle pretty fast. Right. So then begin the problem solving process. And I think that's ended up being a really, really important part of our organization. And it's not just me. I have other like minded military service, disabled veteran owned business, minority owned business. I love hiring veterans and I love hiring veterans because I know if something breaks bad, chances are these folks have been paid before to experience things like this. And it again, it's all about that calming sense. Whereas everybody's trying to stir the chaos, the media people affected, of course, right. We are the ones that come through and say we got it. Okay, there's a way out of this.
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Ali Donaldson
Well, Genera, thank you so much. Really appreciate your time. This has been great.
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Gennaro Cavazos
Thank you so much for watching.
- [22:18]
Ali Donaldson
I could speak to you for a whole nother hour.
- [22:22]
Sarah Lynch
That's all for this episode of youf Next Move. Our producers are Blake Odom and Avery Miles. Editing and sound design by Nick Torres. Executive producer is Josh Christensen. If you haven't already, subscribe to your Next Move on Apple podcasts, Spotify or wherever you listen. Your Next Move is a production of Inc. And Capital One Business.