How to Build a Sustainable Company Culture: The CapForge Story

Audio Leading By Strength and Building a Sustainable Company Culture

Video How to Build a Sustainable Company Culture: The CapForge Story

Chapter-by-Chapter Summary

Following are the sections we covered in this conversation with their summaries, along with the time location in the video and audio to follow along. The timestamps in orange correspond to the chapters in the YouTube version of the podcast episode. This video will display to the lower right as you scroll down. 

00:00 Selected Highlights from the Conversation with Matt Remuzzi

This segment, the "trailer" of the episode, highlights snippets of the conversation that spotlight Matt's wisdom on building CapForge.

03:43 The Birth of CapForge

The journey of CapForge began in the early 2000s, a time marked by the infamous dot-com bust. It's a period remembered by many as a time of financial uncertainty, but for Matt Remuzzi, it was the catalyst for his entrepreneurial journey. "I always wanted to be an entrepreneur," Matt recalls, reflecting on his long-standing ambition to run his own business. Yet, like many aspiring entrepreneurs, he faced the daunting challenge of determining exactly what that business would be.

Matt's early career was a series of trials and errors. From high school ventures to college experiments, nothing seemed to stick or fit his vision. However, in 2000, a significant opportunity arose when he was hired by a venture-backed firm right after completing his MBA program. His role involved working with businesses in need of raising capital by helping them with business plans, financial projections, and investor pitches.

Ironically, the very firm that gave Matt his break also faced its demise due to underperformance. By October 2000, Matt found himself laid off as the company struggled and eventually shut its doors the following year.

Undeterred by this setback and armed with some savings and valuable experience, Matt saw an opportunity amidst the fallout. "I think that there's still people who could use this service," he thought. Identifying a potential market among businesses that could not afford high consulting fees but still needed quality financial guidance, Matt decided to offer freelance services at an affordable rate.

With some contacts and potential clients in mind, Matt took a leap of faith into freelancing as a temporary experiment. His plan was straightforward: try it out until January and if it didn’t work out, go back to job hunting. However, this "temporary" venture turned into a long-lasting success story.

Now, over two decades later, CapForge stands as a testament to Matt's entrepreneurial spirit and adaptability—a company birthed from circumstance but sustained by vision and determination.

06:25 The Vision and Growth of CapForge

The journey of CapForge is a testament to the evolving nature of business and the importance of adaptability. From its inception, the name CapForge was chosen not out of a grand vision, but rather a pragmatic decision. Initially considering names like "Entry Point Ventures," Matt Remuzzi was advised by friends to select something more abstract, akin to "Google" or "Xerox." Thus, "CapForge" was born—a name that has stood the test of time across various business ventures.

Reflecting on the name, Matt shares how it conveys a sense of strength and potential. Although initially not designed with specific meaning, over time it has come to symbolize "capital" and "forge," embodying the idea of creating wealth. This organic evolution mirrors Matt's entrepreneurial journey.

Initially, Matt did not have a long-term vision for what CapForge would become. Like many entrepreneurs, he started with a skill set and a need to pay rent. The idea was simple: leverage available skills into something workable. The vision was not initially clear, evolving over time rather than being predefined.

Many business owners embark on their entrepreneurial journey without a clear vision. Some have elaborate plans from the start, while others find their path through experience and trial. Matt’s experience aligns with this latter approach; he spent years exploring various business avenues—buying, selling, starting businesses—before finding his niche in bookkeeping and accounting.

That's what I'm kind of using as my guiding point.

Twelve years into his entrepreneurial endeavors, Matt identified bookkeeping and accounting as his primary focus. This realization marked a turning point for CapForge, providing clarity on its growth trajectory. With this newfound focus, Matt envisions CapForge as a scalable entity—a national brand capable of continuous growth without further pivots.

The path taken by CapForge highlights that vision can emerge through practice rather than being set in stone from the beginning. For entrepreneurs like Matt Remuzzi, understanding one's strengths and aligning them with market needs is crucial for long-term success.

10:50 Scaling Challenges and Leadership Structure

Scaling a business is a multifaceted challenge, particularly when aiming to establish a prominent presence in a crowded market. Matt Remuzzi of CapForge discusses the hurdles and strategic vision required to elevate a small business accounting firm to national recognition.

Challenges in Scaling a Business

The accounting market is fragmented, with numerous small, independent CPA offices but no dominant national brand for smaller businesses. Remuzzi identifies this gap and aspires for CapForge to fill it, aiming to become the most respected and well-known service provider for small businesses. The ambition is daunting, given the need for substantial growth—"a million to two million in revenue is about as much as one person can manage." CapForge has begun this journey but acknowledges it needs to grow tenfold just to rank among the top hundred firms.

Leadership Structure and Management Layers

One of the significant challenges in scaling is navigating the complexities of leadership structure. "Managing a management layer is its own different challenge," Remuzzi notes. As businesses grow, they often require additional management layers, which can complicate operations and dilute company culture if not handled carefully.

Balancing Growth with Operational Efficiency

CapForge has expanded its services across all fifty states from its Southern California headquarters. However, Remuzzi recognizes that maintaining virtual operations alone may not suffice for national brand recognition. The plan includes opening offices in major cities to establish a physical presence that complements their virtual reach. This strategy aims to enhance their brand's visibility and credibility.

CapForge targets businesses generating between $500,000 and $15 million in revenue—those beyond the startup phase but not large enough to have in-house accounting departments. This focus allows CapForge to maintain operational efficiency while catering to a substantial market segment with specific needs.

While scaling presents numerous challenges, from leadership structure complexities to market positioning hurdles, CapForge's strategic approach aims at steady growth while maintaining service quality and operational efficiency.

15:13 Challenges of the Small and Mid-Size Businesses

Small and mid-size businesses often find themselves in the challenging position of being a somewhat "forgotten segment" in the business world. While entrepreneurs often bask in the spotlight of entrepreneurial spirit and innovation, and large corporations receive ample attention and support, businesses that fall somewhere in between are frequently overlooked. These organizations, typically ranging from ten to three hundred employees, face unique obstacles that are not always well understood by the general public.

One of the primary challenges for these businesses is managing growth. Often started by a single operator with specialized skills—such as a plumber or an engineer—these businesses can manage well when they are small. However, as they grow beyond fifteen employees, things start to get complicated. The need for developing a layer of management becomes apparent, yet this comes with increased costs that can cut into profits.

The financial burden of management is significant. Business owners face a tough decision between delegating tasks to free up their time and watching their profit margins decrease due to administrative overhead that does not directly contribute to revenue.

Moreover, managing employees effectively is a skill not easily acquired. Many business owners may excel at their trade but struggle when it comes to managing people or an entire management layer. These skills aren't typically taught in school, leaving owners to learn through experience—good or bad.

The transition from being an owner-operator to managing a larger organization involves navigating "murky waters" with no clear playbook. This complexity often results in businesses capping out at certain revenue levels because breaking through requires not just gaining more customers but also developing an effective organizational structure.

In essence, small and mid-size business owners must wear multiple hats—balancing their roles as entrepreneurs with operational management—making it a challenging yet crucial aspect of achieving sustainable company growth.

18:47 Unique Leadership Model

In the world of business, leadership structures can vary widely, but CapForge has embraced a truly distinctive model. This unique leadership approach is characterized by having two CEOs at the helm. It’s a bold move that reflects the company's commitment to innovative solutions and adaptability.

The conversation on "The Business Philosopher Within You" podcast dives into this leadership style with Matt Remuzzi of CapForge. As discussed, the decision to adopt this model came from a thoughtful and intentional process, recognizing that the company's growth required a fresh approach.

"I had the thought one day that rather than try to figure out which of those two would be promoted over the other, well, what if I just had them both take on the role?"

This decision wasn't made lightly. It was based on the understanding that having multiple leaders can provide a balanced perspective, ensuring that different aspects of business operations are covered effectively. With two CEOs, CapForge has implemented checks and balances that allow for more comprehensive decision-making.

The benefits of such a leadership model are numerous. It allows for diverse viewpoints and collaborative problem-solving at the highest level of management. This can lead to more innovative solutions and a more flexible approach to challenges.

However, this structure also presents unique challenges. Ensuring smooth collaboration between two leaders requires clear communication and defined roles. The success lies in how these roles are managed and how well both leaders can synchronize their visions for the company's future.

CapForge’s experiment with dual leadership is an insightful case study into how companies can rethink traditional structures to better fit their evolving needs. It showcases an openness to reimagining leadership in ways that align with sustainable company culture and growth aspirations.

22:51 Innovative Organizational Structure

In an era where traditional leadership models dominate the corporate landscape, CapForge stands out with its truly unique approach to organizational structure. The decision to appoint two CEOs is not just unusual but a strategic choice that reflects CapForge's commitment to optimal decision-making and balanced leadership.

The Dual CEO Model

The idea of having two CEOs at CapForge wasn't pre-planned. Instead, it emerged from a practical need observed in the business world: finding a single individual with the breadth of skills required to oversee operations, administration, and marketing is rare. This challenge often leads to biases in prioritizing certain departments over others based on personal preferences and relationships.

Recognizing this, Matt Remuzzi decided not to select just one leader from two outstanding candidates but instead appointed both. One CEO is strong in accounting while the other excels in administration, ensuring that both areas receive equal attention and expertise.

Checks and Balances

This dual leadership structure introduces a system of checks and balances. Before making significant decisions, one CEO consults with the other, ensuring decisions are made with balanced perspectives and without personal biases. This collaborative approach helps mitigate conflicts that might arise from individual preferences or departmental loyalties.

"I had two outstanding employees from two totally separate areas... Rather than trying to figure out which of those two would be promoted over the other... what if I just had them both take on the role?"

Benefits of Dual Leadership

The system has proven beneficial for CapForge, not only in decision-making but also in employee relations. Employees have more than one leader to approach based on their comfort level or specific issues, providing them with an alternative if their relationship with one CEO is strained.

This partnership has led to shared goals and unified incentives, eliminating competitiveness between the CEOs. Their compensation grows as the business prospers, fostering a collaborative rather than competitive atmosphere.

Success Over Time

After nearly three years since its implementation, this innovative structure has contributed positively to CapForge's growth and organizational culture. Matt Remuzzi feels fortunate about how well this unconventional approach has worked out for both the company and its employees.

In summary, CapForge's innovative organizational structure reflects its commitment to sustainable company culture by prioritizing balance, collaboration, and shared success.

28:14 Conflict Management in Leadership

Managing conflict within a leadership team is a challenge that many business owners face. In "The Business Philosopher Within You" podcast, Matt Remuzzi, co-CEO of CapForge, shares insights into how he handles such situations.

"We've had some cases where, you know, a particular employee has run into some issues," Matt explains. These issues might involve one of the two co-CEOs having a closer working relationship with the employee in question, leading to varying levels of frustration and expectations.

Matt describes situations where one leader might feel that an improvement plan with specific milestones is necessary, potentially leading to changes if those milestones aren't met. Meanwhile, the other leader might feel that overall performance is still positive and worth continuing. These differing viewpoints necessitate a balanced approach.

In such cases, Matt steps in to serve as a tiebreaker. He considers both sides of the argument and evaluates what he would do if he were the sole CEO. The goal is to reach a middle ground that guides the employee back to desired performance levels without drastic measures.

The approach involves enhancing job descriptions and outlining improvement plans with clear but fair expectations. "Trying to... reach a middle ground where we can hopefully guide this employee back to the level of performance that we want," Matt mentions.

This method not only resolves immediate conflicts but also creates a template for handling similar situations in the future. It becomes part of the company's management intelligence and serves as a roadmap for addressing future issues.

By fostering clear communication and setting realistic expectations, conflict management becomes an integral part of CapForge's sustainable company culture.

31:27 Entrepreneurial Insights and Advice

Entrepreneurship is often portrayed as a glamorous pursuit, filled with endless successes and victories. However, as Matt Remuzzi of CapForge shares, the reality is often more complex. Despite the outward appearance of success, the journey is fraught with challenges and moments of doubt.

Matt candidly admits that the thought of walking away from it all isn't foreign to him. "About once a week," he jokes, waving away the idea with humor. Despite these moments of doubt, he emphasizes that to be successful in an entrepreneurial venture, one needs "a lot of optimism and a lot of persistence." This mindset helps in pushing through the tough times and maintaining focus on long-term goals.

Reflecting on his journey, Matt discusses times when he seriously questioned his path. There were moments early on when meeting clients in person seemed more hassle than it was worth—especially when meetings turned out to be no-shows after long commutes. Such experiences could easily lead to frustration and doubts about whether the sacrifices were justified.

Yet, Matt underscores a critical insight: success in business isn't just about personal achievement or monetary gain. It's about the broader impact on clients and employees. "If I was to quit or give up," he notes, "it impacts our clients. It impacts our employees." This understanding feeds his drive to continue growing CapForge.

Ultimately, Matt's advice for aspiring entrepreneurs is clear: focus on the bigger picture and celebrate the wins. As long as these victories outweigh the losses, it's worth persevering. In his words:

"I try to focus on the bigger picture and look at the wins."

This perspective not only keeps him motivated but also ensures that CapForge continues to grow sustainably for all involved.

37:25 Growth and Change Through Entrepreneurship

Entrepreneurship is often a transformative journey, and for Matt Remuzzi, it’s been no different. Reflecting on his experiences, Matt acknowledges that being an entrepreneur has profoundly changed him. Unlike the traditional corporate path where individuals might transition between starting a business and working in corporate roles, Matt’s journey has been uniquely entrepreneurial from the outset.

The shift from being an employee to an entrepreneur brought about significant personal growth for Matt. He notes that while he was once focused on his own paycheck and responsibilities as an employee, entrepreneurship has broadened his perspective. He now places a greater emphasis on thinking about others—a change he attributes partially to age and personal milestones like marriage and parenthood.

“I think what it has given me a greater appreciation for and what's different is how much more I think about other people. I take a more, you know, more responsibility to heart.”

As a business owner, Matt feels a deep responsibility towards the people who work for him. He is committed to providing them with opportunities for growth, fair compensation, and work-life balance. The thought of selling his business raises concerns for him about how new leadership might treat his team, highlighting his dedication to their well-being.

This evolution in mindset underscores the broader impact of entrepreneurship on personal values. It moves beyond merely growing the business or increasing personal financial gain; it becomes about the collective success of everyone involved. Matt’s entrepreneurial journey reflects an increasing appreciation for the role of others in driving growth and success.

Ultimately, entrepreneurship has helped Matt take a more global view of his business—a perspective he believes might have been harder to develop within the confines of a corporate role where the focus often remains on personal advancement rather than collective impact.

40:38 Lasting Legacy through Company Culture

In this episode of "The Business Philosopher Within You," the discussion touches on the profound idea of legacy within a business context. Bhavesh Naik and Matt Remuzzi explore what it means to build a company that not only thrives in the present but also continues to flourish long after its founders have moved on.

One of the key points Matt emphasizes is the significance of company culture as a lasting legacy. He asserts, "You don't mess with the culture." This sentiment encapsulates the belief that a company's culture is its core, and meddling with it could jeopardize its future.

The conversation delves into how company culture is not merely an abstract concept but an integral part of business longevity. Matt explains that maintaining core values, such as prioritizing clients' best interests, forms the foundation on which a company can grow and sustain itself. This mindset is what makes clients trust and refer CapForge to others.

Matt provides a tangible example: if a client calls with an urgent concern late in the day, responding promptly rather than waiting until the next day aligns with their cultural ethos. This principle of exceeding client expectations not only fulfills promises but also strengthens client relationships and fosters loyalty.

He cautions against changes that could undermine this cultural foundation, stating that while procedural updates or service expansions are necessary for growth, altering the company's core values could lead to long-term negative effects. "That's the part that you don't wanna mess with," he reiterates, highlighting how vital it is to preserve these principles for future success.

By embedding these values deeply into CapForge’s ethos, Matt believes in creating a legacy where culture is paramount. It’s this unwavering commitment to their core principles that has propelled CapForge's growth and will continue to drive its success in years to come.

44:13 Advice for Aspiring Entrepreneurs

Starting a business can be a daunting endeavor, especially for those transitioning from environments like Wall Street or venture capital firms. The most crucial advice for aspiring entrepreneurs is to find something that aligns with both their interests and their strengths. This alignment is key to sustaining motivation and perseverance through the inevitable challenges of entrepreneurship.

"You're going to be the most likely to be successful if you can find something that aligns with what you like and what you can do well."

Many individuals make the mistake of choosing businesses based solely on potential profitability, such as those with recurring revenue or trending markets, without considering their personal interests or capabilities. This approach often backfires, as a lack of interest can lead to burnout, especially during difficult times.

If you enjoy what you do and have the skills for it, you're more likely to endure tough days because the positive aspects outweigh the negatives. This is why alignment between personal interests and business goals is essential.

It's important not to confuse hobbies with viable business ideas. For instance, if you love playing golf, starting a golf-related business might not mean spending more time on the course but managing operations that are only tangentially related to your hobby.

"I think there really needs to be an alignment."

Finding something you're passionate about is crucial, but it must also be practical from a business standpoint. Understanding what drives you—activities that you'd engage in even when unwell—can help identify your true calling.

Making a list of activities that engross you despite discomfort can reveal what you're naturally inclined towards. For example, hosting a podcast might be an activity someone would pursue regardless of physical discomfort because it brings immense satisfaction.

Ultimately, creating a work environment where you can focus on these activities more than others leads not only to personal fulfillment but also professional success.

48:44 The Importance of Understanding People in Business

Understanding people is a fundamental aspect of business success. As highlighted by Matt Remuzzi, founder of CapForge, the ability to connect with others is essential whether you’re managing employees or dealing with customers and vendors. Remuzzi’s educational background in psychology, despite being initially unrelated to business, has proven invaluable in his entrepreneurial journey.

"Understanding people is the key to any business."

This insight underscores how skills in psychology and human interaction can often outweigh formal business education. Remuzzi reflects on how his psychology major equipped him with tools that have had a long-lasting impact on his business dealings. While formal business education, such as an MBA, provides theoretical knowledge and strategic frameworks, the practical ability to interact effectively with people is a game-changer.

The Role of Understanding People in Business Success

The success of any business largely hinges on interactions with people. A solo entrepreneur might think their operations are independent, but they still rely heavily on a network of customers and vendors. As businesses grow, the complexity of managing human relationships increases exponentially.

Remuzzi notes that leaders who excel in dealing with people usually have more successful organizations with lower employee turnover rates. In contrast, those who struggle tend to experience higher turnover and might even rely on family members who feel obligated to stay despite challenges.

"If you can do that well, the other skills, honestly... I could do what I do now if I just had a high school diploma."

How Psychology Can Aid in Business Management

Psychology plays a crucial role in understanding human behavior and motivation—key elements in managing teams effectively. Business leaders who understand these dynamics can create environments where employees feel valued and motivated to work toward common goals.

The lack of formal training in people management is a common gap that many entrepreneurs face. Remuzzi emphasizes that while one can learn many skills on the job, understanding people often requires innate intuition combined with learned experience.

Building Strong Relationships with Employees and Clients

Creating strong relationships within an organization is essential for sustainable growth. Businesses thrive when leaders foster environments where both employees and clients feel appreciated and understood.

Remuzzi’s insights remind us that while technical skills are crucial for any entrepreneur or leader, the ability to manage human relationships often determines long-term success.

52:22 Pursuing Passions Outside of Work

Finding a balance between work and personal interests is crucial for many, including Matt Remuzzi of CapForge. Despite his professional commitments, Matt ensures he makes time for pursuits that bring him joy and fulfillment. One of his recent accomplishments is earning a private pilot’s license. This achievement marked the beginning of a new journey, as he’s now working on adding an instrument rating to enhance his flying skills.

"I've recently been working on, well, I got my private pilot's license."

In addition to flying, Matt has a passion for surfing and hiking. These hobbies allow him to connect with nature and enjoy the great outdoors. Whether it’s riding the waves or embarking on long hiking trips, Matt finds peace and satisfaction in these activities.

"I enjoy surfing."

The importance of pursuing passions outside of work is evident in Matt's lifestyle. Engaging in activities that resonate personally not only provides a break from the professional routine but also enriches life experiences, contributing to overall well-being.

53:01 The Simple Philosophy of Business Success

In the podcast episode of "The Business Philosopher Within You," Matt Remuzzi of CapForge shared his straightforward philosophy on achieving business success. During his conversation with Bhavesh Naik, Matt emphasized that the path to success in business is not shrouded in mystery or secret formulas, but rather, it lies in simplicity and integrity.

Matt pointed out that despite the allure of secret success formulas often sold in the market, the real key to business success is quite simple: "Treat people well. Treat your customers well. Treat your employees well. Do a really good job, whatever you've offered to do." This straightforward approach underscores the importance of maintaining quality and integrity in every aspect of business.

Matt highlighted that any attempt to cut corners or lack transparency can lead to trouble. He asserted, "Anywhere you try to cut corners and shortcut and be less than transparent, less than honest, less than full integrity, you know, that's where you run into trouble." This statement reinforces the value of honesty and full transparency in building a sustainable company culture.

While acknowledging that there will be rough days and hurdles along the way, Matt remains confident that staying true to these principles will lead to prevailing success. He concluded with an encouraging note that maintaining this simple philosophy—doing a good job and treating people well—will ultimately work.

Matt's insights serve as a refreshing reminder that building a successful business doesn't require complex strategies but rather a commitment to quality work and ethical treatment of all stakeholders.