Prasanth Chilukuri Of Tekmetric On 5 Things You Need To Know To Successfully Scale Your Business
An Interview With Ken Babcock
Don’t stop challenging yourself and looking to build your business. Success is the result of a journey, not a result alone. Being an entrepreneur is a journey, and it’s always evolving. Your business is not a standstill component — it’s a growing entity that needs to be nurtured. It’s a journey that keeps growing and evolving, and it keeps getting nurtured. You have to enjoy the process and create new goals to maintain your progress, even as you reach old goals.
Startups usually start with a small cohort of close colleagues. But what happens when you add a bunch of new people into this close cohort? How do you maintain the company culture? In addition, what is needed to successfully scale a business to increase market share or to increase offerings? How can a small startup grow successfully to a midsize and then large company? To address these questions, we are talking to successful business leaders who can share stories and insights from their experiences about the “5 Things You Need To Know To Successfully Scale Your Business”. As a part of this series, we had the distinct pleasure of interviewing Prasanth Chilukuri, Co-Founder and Co-CEO of Tekmetric.
Prasanth Chilukuri is the Co-CEO and Co-Founder of Tekmetric Shop Management System, a cloud-based shop management system developed for the automotive repair industry. At Tekmetric, Prasanth spearheads finance, marketing, and operations including product development, analytics and software design. With his corporate finance background and auto repair industry expertise, Prasanth is the driving force in the day-to-day operations of Tekmetric, as well as an influential voice for improving the efficiencies and profitability of individual shops and the automotive repair industry as a whole.
Thank you for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’?
My backstory is a great combination of networking, determination and a little bit of luck. I actually intended to go to dental school, but after I earned a business minor in college at Texas A&M University, I realized my passion leaned toward building businesses. I pivoted into finance, and it wasn’t long before I began working with a company called Talos Energy. At the time, Talos was a small company specializing in offshore energy exploration and production — I was one of about ten employees. In the next few years, I was able to work side-by-side with leadership and work my way up within the company as it grew and expanded. It was invigorating to be an integral part the process, from seeking private equity funding to standing alongside the CEO as he rang the bell on the New York Stock Exchange when Talos went public. That was a pretty big moment in my career — definitely a bucket list item to stand there with the Talos team and hear that bell.
As I was working with Talos and helping the company grow, my friend, Sunil Patel, reached out to me about a potential startup idea he had — a shop management system for the auto repair industry. Together with the small team we assembled, we worked evenings (after the conclusion of our day at our full-time jobs) to perfect the technology and begin gathering support from our networks. Before long, we had the first prototype of the shop management system, and Tekmetric was born. I had to admit — I started to fall in love with this project, and I realized I wanted to put 100% of my efforts into making Tekmetric succeed. So, I left my previous role and joined Tekmetric full-time. The first few years were tough — a long process of improving the product, hiring the right people, fundraising and getting deals. But we stuck with it, and today are serving thousands of shops across the United States.
Throughout my career, there’s one thing that has really resonated with me: being with an organization that’s growing at a hypergrowth pace. I’ve been part of a large company, and you have a pretty small impact in that type of environment. But being part of a company like Tekmetric, where you wear multiple hats and everyday looks different, gives you a great opportunity to be creative and have a strong impact.
You’ve had a remarkable career journey. Can you highlight a key decision in your career that helped you get to where you are today?
First, marrying my wife. I truly believe you need a solid support structure, especially when it comes to starting a new company, and I don’t think I’d be where I am without her.
Professionally, I’d say it comes down to networking and people. Understanding the power of people has really impacted the way I approach business. In my opinion, it’s a key influence on every decision you make. Business is not just about putting together a spread sheet or slide deck. It’s a people industry, no matter where you go or what industry you serve. Whether you’re dealing with vendors or customers or colleagues in the office, it’s very much about the relationship that you build. I think the key decision of leaning into those relationships and building upon them is vital.
What’s the most impactful initiative you’ve led that you’re particularly proud of?
Candidly, I take pride in my thoughtful approach to the small and big stuff in business. While I could list going to the New York Stock Exchange or the process of getting Tekmetric off the ground, I think I’m most proud of my approach to leading in the trenches with a positive tone. For me, it is a ‘day one’ mindset of being kind to everyone — employees, investors, customers — is important to me. Being consistently kind from ‘day one’ sets the tone to ensure we keep our relationship in place.
At Tekmetric, this mindset — and leading my team to follow this mindset — has been a crucial initiative from the very beginning. Bottomline — you don’t need to run a business as a jerk. It’s important to be kind to your employees, investors and customers. We certainly aim to emulate companies like Chick-Fil-A and Southwest Airlines in that aspect. It’s a big part of Tekmetric that I’ve led, and I’m proud to see everyone march in concert on this front.
Sometimes our mistakes can be our greatest teachers. Can you share a mistake you’ve made and the lesson you took away from it?
First, I’ll answer generally about a mistake I see over-and-over: that is in regard to equity in your company. Equity is such a valuable thing, and many entrepreneurs and business owners just starting out take it for granted when they shouldn’t. It’s something we have been very intentional in here at Tekmetric, particularly as we’ve grown in the last couple years.
At the onset of your business, it’s easy to overlook something like equity, and I’d say nearly everyone has to experience equity-related challenges at least once as business owners. I get it — you don’t have a lot of money in the beginning, so all you can offer is portions of your company. But, if you really believe in what you’re creating and how valuable it is, holding onto every drop and being prepared to evolve your equity with the business is a vitally important lesson.
Personally, I learned this through both Talos and Tekmetric, as well as the additional passive opportunities where I’ve assisted. Regardless of the split when you start, a company’s equity doesn’t have to remain an equal split. It might not be very popular, but this is actually a key challenge I’d like to see entrepreneurs take on. Your business looks different today than it did yesterday, and it’s going to look different tomorrow — so why shouldn’t your equity evolve with the business? I would urge entrepreneurs to consider this early-on and explore the possibility of an equity structure built not on necessity, but on the value contribution of each key player in your company.
Another personal area where I’ve learned from our mistake centers on the importance of scalable processes. My takeaway: you can’t just have a one-off solution — it should be sustainable as you grow. As an example relative to our mistake in this area: we made a deal with an organization that required a report that no one else used. In all honesty, we were willing to do this for the sale. At first, I volunteered to do the report manually every Monday for the organization’s three shops, and it wasn’t a big deal. However, Tekmetric was well-received, and the technology’s use scaled quickly. Before long, I found myself pulling this report every Monday for up to 25 shops, and it would soon grow to more than 100 shops. We had to adjust, and we ended up building an automated report that pulls this information for this organization and our other clients. Our first solution wasn’t scalable; the second solution was.
How has mentorship played a role in your career, whether receiving mentorship or offering it to others?
This question has perfect timing. I just recently joined the Young President’s Organization (YPO) as a reference from other CEOs I know, and I’ve begun looking for a one-on-one mentor for myself. This is the first time I’ve seriously explored seeking out a mentor for myself. I’m seeking two things right now: a mentor who has the experience and has been in my shoes before, and a coach to continue building my ability to lead. In the past, I always viewed mentorship as “someone who has experience who can give you tips,” and I stopped there and didn’t think about it. But now I see that mentorship is about building a relationship — like a trainer at the gym who’s invested in your wellness and health. They actually understand and help you with your journey. It took me a long time to think about what that relationship can be and the potential it can bring. And I’m on the hunt!
As far as offering mentorship, I love to. I see a lot of friends and people who want to start companies who don’t know the first thing about raising capital or get started. I see how easy it is to feel ‘stuck’ on the legal structure and ‘paper’ side while losing sight of the business and what they’re actually trying to build. I love to hear people’s ideas, get involved, and help them out. I’ve always really enjoyed hearing stories and offering insight where I can, whether it helps me or not. I love seeing people build things.
Developing your leadership style takes time and practice. Who do you model your leadership style after? What are some key character traits you try to emulate?
I think there is a broad range of leaders and those who are laser-focused — the Tim Cooks, Elon Musks — that are often referred to as stand-outs. Oddly, I’ve come to realize that I’m inspired by George Clooney. I read about him a while ago, and George is one of those guys that you’d want to invite to your home for a BBQ. He’d show up, bring a beer, sit down and tell stories, help you do the dishes and then leave. I always thought that was cool — someone who leads with that persona. He’s authentic with people, and that’s a key trait I think about emulating: authenticity. If people believe in you, and people enjoy what you’re about, they’re happy to be there with you.
When it comes to leadership at Tekmetric, I really lean into the servant leadership mindset. One of the authors I enjoy, Simon Sinek, addresses this mindset — you have to trust your team and make sure they’re taken care of, before you take care of yourself. There’s a great quote from his book, Leaders Eat Last, which embodies this approach: “Leaders are the ones who are willing to give up something of their own for us. Their time, their energy, their money, maybe even food off their plate. When it matters, leaders choose to eat last.”
Thank you for sharing that with us. Let’s talk about scaling a business from a small startup to a midsize and then large company. Based on your experience, can you share with our readers the “5 Things You Need To Know To Successfully Scale Your Business”? Please give a story or example for each.
Scaling your business is a lengthy, intense process. Over everything, I have one key mantra: people, processes and systems. Have the right people in place, teach them the most efficient processes and establish an ongoing system to keep building progress. Without any one of those components, your business may face unnecessary challenges. Once you get to a point that your business is running consistently in these three components, you can consider looking ahead to the next level. There’s five key components I recommend:
- Have the right people involved.
- Know the direction you’re going.
- Be intentional with your finances.
- Expect roadblocks and prepare accordingly.
- Don’t stop once you hit your stride.
To use a cliché phrase, part of scaling is about the journey, not the destination. Even for our team at Tekmetric, as we’ve grown, we’ve adjusted. Previously, we focused only on the short term: the next month, quarter or even the rest of the year. But as we’ve scaled, I’m privileged to be thinking about what’s happening in the long-term. Whatever is happening this year is set, and we’re committed to it, but my mind is already in the next few years.
Let’s look at each component. The Right People. First, you have to have the team that serves your company the best. At Tekmetric, we learned this the hard way. We had a phenomenal idea — but our first team wasn’t comprised of exactly all the people we needed. And that meant we failed in the first round. It was disappointing, but we learned a valuable lesson, and the next round, we hired people based on the talents we knew we needed. It was the right move, and it set us in the right direction toward success. In fact, many of the team members from this second group are still with us today.
You also have to know the direction you’re going. Having the idea is great; getting it right as you grow is vital. You may not have the details fully fleshed out, but you must know what you want to do and the tools you need to get there. I’ve always said, if you have a goal in mind, and you don’t know how to get there, then you’re doing something right. If you do know how to get there, you’re not thinking big enough. Think long and hard about what you want your business to look like. Once you figure out those initial steps and orient yourself in the right direction, you can think ahead to challenges like growing and scaling.
As you scale your business, be intentional with your finances. When you start making profit, don’t take that as a sign to relax financially. You need to find the right balance. The biggest thing at Tekmetric has been knowing when to expand and take on extra resources. A lot of companies start with an idea, raise a ton of capital and try to build something gigantic, and they don’t move strategically. Before you scale, look at your resources: are you using funding efficiently? Are your people paid too little, or too much? I think about it like a car — I wouldn’t put it on the road with no gas or unaligned tires. The same applies to your company and its resources.
Inevitably as you’re scaling your business, you’re going to hit a roadblock. Expect roadblocks. You have to be okay with this, and you need to be prepared to pivot, realign and take on a new plan. That might mean a project takes another quarter, or that you lost a deal because you couldn’t deliver results. For Tekmetric, sometimes a feature doesn’t go as planned or is released late. We might have a big enterprise client that’s upset with us because they’re not getting the results they want. Having a stomach for those things and realigning as needed is crucial. Not everything goes perfectly as planned, and that’s part of the scaling journey.
Finally, don’t stop challenging yourself and looking to build your business. Success is the result of a journey, not a result alone. Being an entrepreneur is a journey, and it’s always evolving. Your business is not a standstill component — it’s a growing entity that needs to be nurtured. It’s a journey that keeps growing and evolving, and it keeps getting nurtured. You have to enjoy the process and create new goals to maintain your progress, even as you reach old goals.
Can you share a few of the mistakes that companies make when they try to scale a business? What would you suggest to address those errors?
Mistakes — or lessons learned, as I prefer to think of them — are inevitable when you’re starting a company. You’re trying to survive, and you often do things you need to just to keep the business running.
One of our mistakes was not making an effort to understand our market on a deeper level. We understood it on a surface level, but we didn’t take the time to really outline who we were serving with our product. For us, that didn’t come until the last couple of years, when we had a strong marketing team put into place. Before that, we’d go to everything — motorcycle shops or boat shops or tractor shops. But that meant we were building features to accommodate a wide variety of clients, and it wasn’t an efficient use of our resources. It’s a common mistake, but we had to look back and realign our goals to get that clear vision of our market and who we’re serving.
We also learned the importance of not limiting our efforts to projects impacting only one or two clients. Big clients are fantastic supporters as you scale your business — they can bring in a great profit and help boost your reputation in the industry. In Tekmetric’s case, our enterprise clients have been tremendous resources as we’ve grown. However, I’ve come to realize that it’s also important to pay attention to every player in the industry, both big and small, and focus your most significant efforts on projects that benefit as many clients as possible.
For example, if you add up everyone in the auto repair enterprise market, you’ll see around 15,000 large businesses, and 175,000 smaller independent repair shops. If you put all your effort and resources into only the 15,000 big companies, you’re missing out on opportunities to help everyone else.
Don’t get me wrong — there is a time and place for specialized projects for large clients, and they’re crucial to your business’ success. However, you also need to make sure you know the entire audience you’re serving, align yourself with that and don’t be afraid to adjust as you grow.
Scaling includes bringing new people into the organization. How can a company preserve its company culture and ethos when new people are brought in?
It starts and ends with communication. At Tekmetric, our team is primarily made of remote workers, and it’s important to keep everyone informed and motivated, even if they’re not in an office. That’s harder to do when you’re working virtually. I’ve seen it in previous organizations to where leadership assumes information has been passed along — and it hasn’t.
Candidly, this is something I’m working on as well as a leader. My co-CEO or I might share information with management and assume they have shared it with their teams. However, it doesn’t happen as eloquently as we thought, and we realized it was like a game of telephone, filled with miscommunications. What we’ve done is make a specific effort to keep our team well aligned and empowered. Whether it’s a monthly Town Hall or a weekly Slack update, it’s crucial to make sure everyone knows what’s happening in the company.
In my work, I focus on helping companies to simplify the process of creating documentation of their workflow, so I am particularly passionate about this question. Many times, a key aspect of scaling your business is scaling your team’s knowledge and internal procedures. What tools or techniques have helped your teams be successful at scaling internally?
When it comes to building and maintaining culture — especially as we’ve grown into an internationally remote team — one of the best tools for us has been Slack. We joke that Slack is our office, and in all honesty, it is has been since we’ve started. It’s our way of collaborating in real-time, communicating and building culture. I actually just had a meeting with our People & Culture team, and we were talking about how you can get people engaged outside of work on something like Slack and control it so it’s a cultural tool rather than a distraction.
We have also discovered the importance of creating an intranet to track key information as you scale. This could be housed in a program like Notion, Confluence or even Google Docs. As your organization continues to grow, documentation is critically important. I recognize that not everybody wants to come in and just read page after page of everything, but it’s important to standardize your company’s processes and history.
This is something our development team has done really well. They’ve sort of standardized the onboarding process of an engineer: what to expect, how we work and what we do. They’ve streamlined the process to smoothly onboard engineers from around the world. So, we’re taking a page from their playbook and applying it to other teams, like sales and customer success. Ultimately, this strategy should expand to the entire organization.
What software or tools do you recommend to help onboard new hires?
We’ve expanded quite a bit in the last few months alone, so the concept of software to onboard new hires is a little newer to our team. Our People and Culture team has done a phenomenal job building an applicant tracking system with Greenhouse. From there, they have a system in place to help onboard new employees through our HR system. They also leverage Notion to track quite a few statistics and key applicants in between.
Our biggest priority is intentionality when choosing the right system. There are lots of systems out there — some do everything very well, and some are only okay. But we have found that it’s not efficient to use just any system, or even a large mix of systems. The less systems you have, the more efficient you’re going to be.
Often, I see companies try to save a dollar in this area. They use several programs for the same task because they’re free or cost-efficient, but this approach is so inefficient and not scalable. Not to mention, they can never remember where their information is stored. On the flip side, a business can invest in just one or two tools that solve the same problems. It may cost a little more, but effort and time these investments can save are critical to the business process.
Because of your role, you are a person of significant influence. If you could inspire a movement that would bring the most amount of good to the most people, what would that be? You never know what your ideas can trigger.
If I could inspire anyone, I’d inspire them to build something and create your own path in life. Something I reflect on often is the concept of a “rat race,” and how we’re all living through this race of life. This has been a more significant concept for me since we started Tekmetric, and since I’ve had my daughter and have seen her grow through the different stages of life.
The societal norm is this: we’re born, we fight for good grades in school, then we fight for a job, then we fight for a promotion. We might get married along the way, and we have to search for a place to live, then we have to do it all again if we have children and need a bigger space. But who says we have to follow this exact path to be successful?
My epiphany to myself was, “Life is a rat race, but you can make your own walls and design your own race.” You don’t have to follow someone else’s race. You can uncover your own journey as you go through it — and there’s always a new path. If you need to, you can leave your part of the “race” and start a new one elsewhere.
I encourage everyone to think about that and challenge themselves to look outside the social norms we see everyday. If you can’t afford the house or children, don’t force yourself to do it. If you don’t want to fight traffic to work downtown, don’t.
Starting a company is probably the biggest symbol of making your own way. I recognize that not everyone can — or wants to — take that path, but everyone does have the opportunity to create their own destiny. If I could inspire anyone, it would be to stop, pause and think about what you’re doing. Does it bring you joy? Does it bring you happiness? If not, you should pivot and look for something that does.
How can our readers further follow your work online?
You can learn more about Tekmetric and our work at www.tekmetric.com.
This was truly meaningful! Thank you so much for your time and for sharing your expertise!
About the interviewer. Ken Babcock is the CEO and Co-Founder of Tango. Prior to his mission of celebrating how work is executed, Ken spent over 4 years at Uber riding the rollercoaster of a generational company. After gaining hands-on experience with entrepreneurship at Atomic VC, Ken went on to HBS. It was at HBS that Ken met his Co-Founders, Dan Giovacchini and Brian Shultz and they founded Tango.
