At Collective 54, we often discuss the “Valley of Death” firms face when moving from Growth to Scale. But what if the cost of this journey is too high? In this session, C54 alumni Julian Lumpkin shares his story of deciding to close his firm and what came next. He’ll reveal the tough questions he asked himself and offer strategies for communicating this decision both internally and externally. Walk away with insights on how to navigate this turning point and confidently plan your next chapter.
TRANSCRIPT
Greg Alexander: Hey, everybody! This is Greg Alexander. You’re listening to the Pro Serve Podcast. This is a podcast dedicated to founders of boutique professional services firms. So if you’re in the business of marketing and delivering expertise for a living, let’s say in consulting, IT services, marketing, etc., this is a podcast for you. On this show, we’re dedicated to helping you grow, scale, and maybe someday exit your professional services firm. On today’s episode, we’re going to talk about something that we haven’t talked about before, and that is, let’s say you’re an entrepreneur, and you’ve been at it for a while, and you’re giving it the good fight, and it just doesn’t work for whatever reason. When is it time to call it quits, hang it up, and go do something else? We have with us a longtime Collective 54 member. He is now a Collective 54 alum, and we’re proud to say that his name is Julian Lumpkin. Julian recently made the tough decision to shut his firm down, and he was courageous enough to come on our call and let me pepper him with the questions that went into that. So, Julian, with that, would you please introduce yourself to the audience?
Julian Lumpkin: Yeah, thanks, Greg. It’s nice to be here. My name is Julian Lumpkin. I founded Success Kit 7 years ago. I’ve run that business for the last 7 years and, like you said, very recently made the tough decision to close the business down and move on.
Greg Alexander: Okay, so tell us just real briefly what Success Kit did.
Julian Lumpkin: Success Kit created case studies, customer success stories, and video testimonials for all different types of B2B businesses. We would interview our clients’ clients and then create content that they could use in their sales process and on their website.
Greg Alexander: Alright. So let me start with the big question, which is, what led you to the decision to shut your firm down and seek the next chapter in your life?
Julian Lumpkin: What led me to the decision was, well, the most direct thing is growth stopping. For the most part, over the last 7 years, we were not hitting our growth goals, but we were always growing. A lot of the business seemed healthy, and I wanted to grow faster and scale the business. I saw that as possible. Even though growth was way slower than I wanted it to be, while we continued to grow, I wanted to keep putting everything into the business that I could. Once growth stopped, it became apparent that we were not going to scale, and I had to make the decision if I wanted to really invest my time and energy into creating a lifestyle business or shutting it down. I decided to shut it down.
Greg Alexander: Was this a gradual thing, or was this something you had been thinking about for a while?
Julian Lumpkin: It’s tough to answer that question. It had been in the back of my mind for a long time, and I would go through different phases in the business. There were other times during the course of the business where I thought we could get to this point. But the very final end came very quickly. Actually, we were not in a position to deal with revenue dropping off, and the consequences of lower revenue were too severe to go through. So, sort of a non-answer here, but it’s something that had been in the back of my mind at different points of the business. But then the real final decision came very quickly.
Greg Alexander: Yeah, that’s not a non-answer. That’s a real answer. And I think, you know, what was it someone said? Something’s impossible until it isn’t. It kind of happens really quick once it happens. Alright, let me ask you about how you evaluated the risks of shutting it down and the potential rewards that you might get from whatever it is that you’re going to do next. How did you balance those things? Because you mentioned to me the idea of running a lifestyle business wasn’t attractive to you, and if the firm wasn’t going to grow and you couldn’t scale it, then you didn’t want to continue on. That’s a big revelation. A lot of people just keep limping along with the lifestyle business, but you didn’t want to do that. So what was the calculus around risk and reward?
Julian Lumpkin: Yeah. Well, I should note, I think we did limp along as a lifestyle business for quite a long time, unfortunately. But where I was able to make the decision that you’re talking about, of deciding that that’s not where I wanted to put my time and energy, really comes down to two factors. The first one is very simple, which is the financial factor. Over the last seven years, while the business supported me, I was not earning as much as I could on the open market. I wasn’t earning as much as I was before I started the business, let alone what I might be able to earn now. So the first part of the equation is pretty simple. I think the second part is perhaps a little more interesting. What really gave me the drive to do this and make this move was starting to feel like I was actually excited about moving on.
At other times, and perhaps the situation that entrepreneurs find themselves in, is their business isn’t going exactly as they’d like, and the idea of getting a job terrifies them. I think we’ve all heard this from entrepreneurs—that they can’t stand having a boss, that they hate the structure of a work environment. I never felt that way. I had great relationships with my bosses and colleagues, and I wasn’t one of those people that couldn’t fit into a regular work environment and had to go become an entrepreneur. That said, for most of my time running Success Kit, I didn’t want to go back to getting a job. But towards the end, as revenue started to slow down and my frustration with the lack of progress building it up grew, I started to look at it like the amount of effort I’m putting into this business that’s not going well—if I just put this effort and take all the lessons I’ve learned, and the same level of commitment, discipline, and concentration, and put it towards a sales job or sales management job, I’m going to enjoy it more, and I’m going to succeed. And that’s what it came down to.
Greg Alexander: How old are you?
Julian Lumpkin: I’m 37.
Greg Alexander: So you started when you were 30, and you shut it down at 37. The reason why I’m asking that question is because the learning for those that are listening to this—one of the learnings—is this concept of opportunity cost. And that’s what Julian is explaining to you right now. Our prime earning years are between the ages of 30 and 60. Do we earn money before the age of 30? Sure, we graduate college at 22, but from 22 to 30, we’re really kind of figuring stuff out, building a network, picking a profession, etc. And then, after 60, do we earn money? Sure, some of us do, but the reality is, many of us are on a glide path towards retirement at that stage. So 30 to 60 is super important.
The compliment I want to give you, Julian, is that it’s not like you tried it for a year or two. I mean, you slugged it out for seven years, right? And I knew you during that time period, at least a portion of that time period. And you’re right—this wasn’t something that you came to easily. But there is a point in time where the opportunity cost is just too great, which is what Julian is talking about here. And what should he have done? Spend another seven years? So now I’m 14–15 years in, halfway through my prime earning years. At some point, you have to do the math on that. That was a really big learning that I just wanted to underline and put an exclamation point around.
Tell me about the emotions of this. I’m sure this was a very emotional decision and something that you didn’t come to easily. The logical stuff, which is what we just talked about—that’s the easy stuff. The emotions are the hard part. So what were the emotions like?
Julian Lumpkin: The emotions were very difficult, though not nearly as long-lasting as I thought they would be. Telling my customers that we were shutting down was very challenging, and telling my employees, one at a time as it happened at different times, was also very challenging and somewhat emotional. I know they all really liked the jobs that I had created for them. Accepting that this was the outcome, that this was the best decision, and this was the result I was going to achieve, was challenging for a couple of months. But it’s amazing how quickly, once I accepted that, it became not all that challenging. For one, I’m just the type of person that focuses on moving forward. So once I started to think about and work on what I’m doing next, it became a lot less challenging for me.
Greg Alexander: You know, I have to say that Collective 54 was a client of Julian’s, and so I was getting the notifications from him as he was informing his clients that he was shutting his firm down. You handled it extremely well, very professionally. You were always putting the client’s interests first. Little things like letting me know that I needed to download the case studies you did for us before a certain date, otherwise they were going to expire and get deleted. It’s just little things like that. So I felt, as your client, that you were not screwing me in any way, that you were doing it in a very logical way, and I’m sure your other clients felt that way. So I just wanted to publicly acknowledge to you, in front of our little world, that you did it right. For members that are thinking about doing this, it’s very important because we only have one reputation. I’m a fan of Julian’s because of the way that he has conducted himself, not just in this moment but previously. He’s a 37-year-old young man, and I’m sure our paths will cross again. The way you treat people matters, and you treated us as your client very well. I’m sure you treated your employees very well, and that’s a very important thing to do. I understand, because I was your client, how it happened. What’s going to happen to your employees? Have you been able to help them find jobs? Did you leave that up to them? How did all that go?
Julian Lumpkin: Two of the employees were freelancers before they became full-time employees for Success Kit. Both of them immediately transitioned right back to being freelancers. Our video editor, who I worked really closely with and was kind of my final employee and helped run things during the last year, I really cared about making sure he landed on his feet. So I helped him think about and structure a job search, and I made sure to be an outstanding reference for him. I’m happy to say he has a new job that he’s really happy with. That has also made things a lot easier, just seeing that everyone else landed on their feet. I’m pretty confident I will do the same.
Greg Alexander: Okay, very good. You mentioned to me before we hit the record button that your next chapter is going to be one where you take a sales job with an enterprise tech company, going back to the world of being an employee. It was interesting to hear you say that you didn’t become an entrepreneur because you didn’t like being an employee. Many entrepreneurs become entrepreneurs for that reason, but that wasn’t the case for you. So when you thought about going back to being an employee, I’d love for you to tell us: What did you learn from the seven years as an entrepreneur that you plan on applying in your role as an employee?
Julian Lumpkin: Yeah, there’s so much. I’ll stick with kind of the big picture one that I think is most interesting and the biggest change in my mindset. I think, for me, being a founder was to some extent a humbling experience. Prior to being a founder, I was extremely successful in every role that I did in both sales and sales management. Going through the process of being a founder, especially a solo founder for most of the journey, having to do all of the different roles—product, marketing, HR, everything—gave me such a new level of appreciation for having good teammates. That’s obviously what I’ll look for in my next role as an employee, but also in the future, as I think about if I were to ever start a new business, to start with a team. That would really be almost before the actual product or the idea, like the primary part of the decision-making process. I know what I do really well. Can I find people around me that will support that? So that’s the mindset I’m taking as an employee, and if I were to ever be an entrepreneur again as well.
Greg Alexander: Yeah, it’s so interesting to hear you say that. You know, in the investing world, which is the world I spend a lot of time in, there’s a debate that says, do you make the bet as an investor on the idea, or do you make the bet on the team? There’s an equal amount of people that come down in each camp. My opinion, and you just validated it, is to bet on the team, because if you have a complementary team that’s willing to work hard, and they work well together, they probably can figure out the idea, given enough time and enough resources. But if you’ve got a dysfunctional team and non-complementary people, it’s tough to overcome that one, for sure. So I’m really glad that you’re thinking like that. And I’m sure that as you consider the job that you’re contemplating, or others that may come in the future, you’re probably going to be analyzing that one real quickly and intensely.
Greg Alexander: For those that are listening to this, and maybe we’ll end on this, and we’ll save the rest for the member Q&A, what advice would you give to members that might be internally having the conversation? Maybe they haven’t gotten to the point yet where they’re sharing it with their wife or their co-founders, but are saying to themselves, you know, “Things aren’t going well. I’m not a quitter. I want to keep going, but how much longer should I keep going, and what do I need to see to tell myself that I’m not crazy, that there really is an opportunity here?” What advice would you give somebody who’s thinking like that?
Julian Lumpkin: Yeah, it’s tough because sometimes pushing through these times is what makes us successful, right? So it’s really about finding that right balance. I think the best piece of advice I could give, and what gave me a better picture, was forcing myself to explore what my options were if I left. That really put things into perspective. I had gone seven years, and I was used to working really hard, just kind of making a livable salary, and I had gotten used to that without much of a basis for comparison anymore. Just starting to have those conversations about what it would look like if I were to exit, leave the business, or shut it down really solidified things for me. I think just going through that exercise of thinking through what your options are and how they make you feel would be valuable.
Greg Alexander: That’s good advice. Well, listen, anybody who is given the opportunity to hire you as you move on to your next endeavor is going to get a fantastic employee, and somebody who, at age 37, is wise beyond his years, because seven years as an entrepreneur is like 30 years in corporate America. The fact that you’re going to be approaching the job with the totality of understanding what the product team does, what HR does, and what finance does, even though you’re likely to go into sales again because that’s your passion and what you’re good at, just knowing all those other components is going to make you that much more effective as an employee.
Greg Alexander: And then I’m going to make a prediction. When and if this does happen, I want you to come back on the show and tell the story. But I bet you’re going to be an employee for three years. You’re going to do well, you’re going to replenish the bank account with some big, fat commission checks, you’re going to come up with the next great idea, and you’re going to say, “I now know what I didn’t know when I was 30, and I’m 40, and I’m going to give it another try.” When that happens, I want you to call me because I’d like to participate at that moment.
Julian Lumpkin: I absolutely will, Greg. And I hope you’re right.
Greg Alexander: All right, Julian. Well, thanks again for being here. A few calls to action for the listeners: If you enjoyed this session and you think you might want to become a member of Collective 54 to get access to others like it, go to collective54.com and fill out an application. We’ll get in contact with you. If you are already a member and you have a million questions for Julian, which I’m sure you do, look for the invitation to the Member Q&A and attend that session. This is a rather unique opportunity to talk to somebody who’s got the guts to say, “Hey, this didn’t work out for me, and here’s what you can learn from that.” It’s the very essence of being a contributing member, so look for that. And then, if you’re not interested in either of those two things and just want to learn a little bit more, I point you to my book, which is called *The Boutique: How to Start, Scale, and Sell a Professional Services Firm*, written by yours truly. You can find it on Amazon.
Greg Alexander: Until next time, I wish you the best of luck as you try to grow, scale, and exit your firm. And Julian, once again, thanks a bunch for doing this. Really appreciate it.
Julian Lumpkin: Thank you, Greg.
Note: This transcript was generated by Zoom.