Ray Carballada, a media, content, and advertising executive, shares the ways that content is shaping how brands communicate and shares insight into what the future of content may look like. If you like our podcast, please subscribe and leave us a rating!Podcast: DownloadSubscribe: iTunes | RSS
Ray Carballada: Quality when it comes to video content is a commodity, people don't buy quality anymore. Really the value now on the content side is in the idea and the creative, and that's really where all the value is.
Bill Gullan: Greetings one and all. This is Real-World Branding. I'm Bill Gullan, President of Finch Brands, a premier boutique branding agency. Thank you for joining us. A little bit of housekeeping before we get to our interview with Ray Carballada. Three ways to help us here at Real World Branding; one of which is to subscribe in the app store of your choice and make sure you do not miss an episode.
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Today's guest is Ray Carballada. Ray is an entrepreneur and a strategist, a manager at the intersection of creativity and business growth. He's a bold face name in the Philadelphia landscape and has been for quite a while. Most recently, Ray spent the last four years as President and CEO of Alkemy X and before that was President and COO. Eighteen years total helping transform a sleepy organization called Shooters Post and Transfers into, and through the re-branding process, to become Alkemy X. A real leader in content creation and in production, and Ray is certainly going to speak about that as well as the role of content today, as well as his own career path. Enjoy Ray Carballada.
Bill: We're here with Ray Carballada. Thank you so much for joining us.
Ray: Thanks for asking me.
Bill: It's our pleasure. If we could start, and it's a fascinating story I'm sure, with a bit about your journey, most recently eighteen years building what is now known as Alkemy X and a lot before and a lot betwixt and between, could you take us through your path?
Ray: Sure. I guess it's easiest to start at the beginning, I'll start there.
Bill: Go for it.
Ray: I'm a Still Photo major, I went to RIT for photography and did some other things while I was there but took a lot of business classes and some other things. Then decided to work in Danville, Pennsylvania at the Geisinger Foundatio versus a job offer that I had in New Orleans to be a journalist photographer. Because Geisinger was going to pay for me to go graduate school and I wanted that.
Bill: That's not so bad.
Ray: I think that made that decision and when I went to night school, I worked full time and got my graduate degree in business from Bucknell.
Ray: Yes. Some of that was I just that I knew I wanted to be in the creative business but I wanted to be in the business of being in a creative business. Then I got recruited to work at a startup in Washington DC. It was a video startup of a major printing company and what I didn't realize was that the guy that hired me and the company was about a month or two old, the third month he was gone.
Bill: Figure it out, right?
Ray: Exactly. It went well other than there were some challenges where they had a big sales staff trying to sell video, and selling printing and selling video work and creative content is very different. Needless to say, I learned how to sell when I was there which was very valuable in my career going forward.
The company was doing okay. We were very successful selling printing and video combinations to high schools and some other stuff like that. I got a phone call out of the blue from a headhunter about a job at Campbell's, running their internal media department. I spoke with my father who is still a big mentor of mine and he said, ‘You're young, having a Fortune 100 Company on your resume is not a bad thing.’
I came up, talked to them, and it was a really interesting challenge in that they were still primarily an analog department but they wanted to move into digital. There was a guy there that was retiring after thirty-five years then I was going to be taking his place, and it was a great. I decided to take the job, and it was one of the best things that I did for a lot of reasons. I learned about design and graphics and printing and digital photography and all that stuff. I learned about a lot of that stuff when it was so new that nobody really knew whether or not you were doing it right or wrong which was good.
I also ended up working very closely with the C-Suite executives because my department managed all the events including all of the Wall Street presentations and board meetings and things. The culture there was really interesting because the executive at the time was a self-made boy from an Australian farm. He was very open and willing to talk to me about his presentations, and it ended up being a really good partnership. I really learned a lot about business, and I think he learned an awful lot about messaging and audiences and communication at the time.
Bill: Forgive me for interrupting ... This was the mid 90s, this was when everything was happening in terms of the internet. Did you find an organization that large maybe had aspirations to understand digital but because of their resources were they faster than others or because of their heritage were they slower?
Ray: Much slower.
Bill: That makes sense.
Ray: They were using slides when I got there.
Ray: You have no idea.
Ray: Also that's a great opportunity too. If you go into a place that really needs a lot of work then it's a good opportunity for you. I consolidated purchasing and some other stuff and ended up with a fairly large department a few years later and one of the consulting firms ... I'm not going to mention which one ... comes in and essentially does a restructuring and my department goes down to three people pretty much in two weeks, overnight. Because the thought was, ‘Well, if we just cut all these, then all these expense will go away.’ Needless to say majority of that stuff was all negotiated contracts and things like that. In my mind, we were saving the money but they ended up putting it all back after I left.
I was planning on somewhat staying and then three guys that ran a company named Shooters at the time which was a Campbell’s vendor of mine approached me because I think they thought I was potentially losing my job. Their company had been around for fifteen years, got a few million dollars in sales but hadn't really been able to scale it since then. I decided, ‘Well, let's go ahead and take a shot.’
I did that and there was a lot of opportunity at the time and a lot of potential. We were able to really start growing the company by expanding them out of primarily crewing services into advertising then after that moving into Downtown and expanding into television and visual effects and some other things.
A lot of those things were done to diversify so that we weren't so heavily based in advertising but also when you're trying to scale a company with just cash flow, because we did that by business development and cash flow, and we didn't have any outside money coming in. You have to figure out how to leverage your assets. If you think about all those things, there's a percentage that overlaps, whether or not it's engineering, servers, administrative, or whatever. It allowed us to scale the company fairly quickly up until 2008 when the recession occurred.
Basically the company really changed almost overnight when film went away. A lot of it buried entries to the post-production business and primarily went away and the industry changed a lot. We expanded into New York and did some other things to mitigate that but coming out of the recession, you need to be in a very different place in the media business and transitioning into that is hard for a lot of companies. Alkemy X was on the path, in my mind, to do that.
We talked about it a little bit before we started with the mics. My contract was up for renewal, and I was already thinking about, ‘Maybe it was time for a change.’ Through that negotiating process, it became clearer that it was. Now I'm out playing golf.
Bill: Without the mobile phone you said. What a blessed emancipation.
Ray: I’m talking to a lot of people, and I'm actually having a really good time. I'm doing some consulting. It’s interesting in that a lot of the consulting I'm doing has nothing to do with the media business. I'm working with a toy company right now, and I'm having fun.
Bill: Terrific. You realized fairly early it sounds like. You, as noted, were in undergrad at RIT focused on photography but pretty quickly it seems like the business side of the creative world grabbed you. Did you always have both sides of the brain working or was there a moment when it became clear?
Ray: I think it goes back before that, both my parents' families were very poor. My father was very successful in the banking industry as an English major. My favorite thing was to sit around at the Thanksgiving table with my dad and my uncle and stuff, and they would just talk about business and I would just love to sit there and watch them. I thought that they really knew what they were doing. I realized much later that there was a lot of wine involved at that point.
Bill: Stories got inflamed a little bit.
Ray: I really enjoyed doing that. I had a paper route when I was twelve; I would cut lawns; I did everything I possibly could. Actually part of that motivation was for whatever reason I wanted a camera. I bought a regular SLR camera. It was my first camera that I bought and my grandmother really encouraged me. My mom thought it was a bad idea of course but my grandmother was like, ‘You know, that might actually lead to something, why don't you go out and buy that?’ I've been doing that ever since. I've been always involved with some business or helping somebody with his/her business.
I think I always wanted to be on that side of things and things have changed a little bit, but I was in the creative companies for a lot of the time and actually there's still probably a good percentage from there that aren't really run by businesses. That means that if you can run your creative company like a business, you have a competitive advantage over the ones that aren't.
Bill: It's a distinctive executive profile that you bring for that reason, and I would imagine the big skews in the direction are being run by creatives in a way that's a little bit peripatetic. Then, on the other hand, there's a danger when it becomes too business in that you kind of squeeze the inspiration out of it and having an appreciation for both sides of the head, both sides of the house probably put you in a really good stand I would think.
Ray: It does, it gives you a little credibility with the creative staff, you also understand that you just can't manage them- you just can't. Whether you say you're going to manage creative staff or not, if you think that you're managing them, you're really not- they got one over on you. It's really understanding that it's a very fluid environment and you have to, I used to use the term all the time, you have to fence them in as a manager. There's a wall that you don't want them to go over because they're going to hurt somebody or themselves but anything that they do inside those parameters, you just have to let them do what they do because that's the way their brains work.
The other side is that they have to trust you and some of that is that you're always trying to do what's best for the enterprise or them. Also, I had a track record of letting things, if they really were passionate about something, I would go with the flow with it. Also, they understood that if I was really passionate about something or I wanted something done a certain way or whatever, I very rarely did that. Over time my relationships with some of the key staff was that they would come and ask me opinions on some things because I just have a different way of looking at things.
Bill: That's valuable. Eighteen years or so, driving this growth story of Shooters Post and Transfers, it was noted at a certain time into not only the re-branding to Alkemy X but also the growth from a smaller, mid-size production shop, as noted doing a lot of the advertising work here in sleepy, Philadelphia that long since not been the agency town, much into the giant content, giant maybe is too strong of a word, but the content company and leader that it is today, what were some of the key ingredients that led to this incredible growth story from your perspective?
Ray: I think that some of it is really not fighting the marketplace so much no matter what you would like to sell, it doesn't really matter - understanding what the market wanted. Also, I think there were some opportunities in Philadelphia for a while that were an advantage. Others were not afraid to make smart risks or take chances. The diversification into television and visual effects pretty much saved the company through the recession. If we hadn’t done that, we would have been too entrenched in advertising. The other thing is understanding where the marketplace was going a little bit in that content was becoming a big buzz word in the mid 2000s. What better way to learn about content and, ‘Why don't we do television? How hard could that be right?’
Bill: Figure it out.
Ray: Honestly, we probably got a little lucky on the first one, but we were there and the company actually took some financial risk on the first show. Without getting too specific, we ended up retaining some rights that ended up paying off. Those are the kind of smart things that we did and I'm sure there's a bunch of things we can talk over, they weren't too smart.
Bill: We'll save those for another time.
Ray: Hire really good people. I think that the biggest thing is really as a leader of any kind of entity, you have to be three or four steps ahead of everybody else in your company and that yes you deal with operational issues and things like that, but you have to constantly be trying to grow in my mind because you never know what's going to go away. If you ever sit back and say, ‘Okay, I'm comfortable with where I am.’ What are you going to do if one of your major accounts goes away or gets bought by another company? There's so many different things, you have to constantly try to grow and move forward. I think because we did that, we were successful in a lot of things.
One thing led on top of each other and also one of the critical things was not using outside account reps. We were one of the first companies that built our own internal sale staff and things like that and that helped a lot. We had talked about a little bit earlier, and it was at the time a lot of the company's cash flow was just being dumped right back into the company to grow the company.
The other is diversity of product mix, all those things have two factors; one they help you grow but they also help you if any one of those sectors doesn't do well. You can't fight the market again if the market's way down no matter what you do. You can't overcome that unless you have substantial financial resources and stuff like that, especially if the product is not something that people are buying and that's why the diversity really helped us.
Bill: Interestingly, when we talk about where the market's going and not fighting it, starting your career with a publisher that was seeking to start up a division in, I'll call it video but I'm sure the creative folks will call it film, and now looking at what media companies are trying to do racing to video is a way that captures some eyeballs and builds brands and stands out above the wall that Facebook and others are creating here. With the management side, the creative side, and content, how is the notion of content and its role or its value evolved over time from your perspective?.
Ray: I think there's two factors. One is your premium content is more valuable than it ever was. It's more valuable than it was but also a lot of content has become a commodity. Interesting conversation I had with somebody recently about quality, quality when it comes to video content is a commodity, people don't buy quality anymore.
Bill: Its all in everyone’s pockets, at least to a certain degree.
Ray: What people don't think about is that fifteen years ago, there was a technical aspect to quality but now the software is so that it white balances your own phone – the levels, and it has stabilization. Everybody thinks that they take all these great pictures. There's stabilization in these phones, you know what I mean? People don't realize all that. That immediately creates a situation where technical quality is almost a commodity. Really the value now on the content side is in the idea and the creative and that's where all the value is.
What's interesting with technology and with the internet and self-distributing and all that kind of stuff is that the true creative talent, there's two folds; one of them might want to be part of some sort of group together but there's a lot of people now that just do work on their own because they don't need to and they are the product. What's in between their ears is their product. I think that that's really a big change for the agencies and production companies and things like that and that the truly talented don't need to be associated with anybody else because anybody can find them instantaneously.
Bill: Youtube, Instagram, these are platforms that are yielding superstars like Twitter, little bit less multimedia but the right level of snarky delivered succinctly and all of a sudden the Webby Awards are people that we've heard of now. It's not just a trade type of thing.
Ray: I know of a story where a creative director was looking to find a director for a commercial that they were doing and the guy said, ‘You know, I know this video game. It's very similar to what I want to do.’ It took him less than half a day to figure out who the director of this video game is which happened to be a film director, and they hired him.
Bill: That's amazing.
Ray: You could have never have done that ten years ago. You couldn't have.
Bill: I guess the logical question maybe is if this incredible democratization has widened the ability to be true content creators, what is the value or the prospective value of team development from development? What are the capabilities that a firm brings to this that maybe individuals can't? As you said the barrier to entry is not on technology, anyone can have a drone now. You don't need to have or buy a helicopter or anything else. Do you see a future evolution in terms of this lone wolf between the ears versus groups that may have a greatest hits ability when it comes to different things?
Ray: I think that in the future content companies will be built around some creatives that probably are ownership or maybe have a big ownership stake. Think about a really successful law firm. They're usually built on the backs of a couple of really talented lawyers, same kind of concept. I also think when it comes to content, there's going to be more and more of it, but I think that people are starting to realize the difference between good content and bad content. Very similar to when desktop publishing came out, everybody thought they could do design then they realized, ‘Oh, there's bad design.’
People are starting to realize there's bad video content, and I think that there will be potentially less of it in the future being produced. The really good content will go to the truly uber-talented in that space because if you took a hundred percent of the content that was produced ten years ago by the professionals, eighty percent of that can be done in house at almost any organization. Only twenty percent of the people that are doing it are going to, I guess you can say, in the future make their living doing that.
Photography would be a great example. You still hire a photographer for a very special event or a photo spread or whatever, but how many times have you seen people hire a photographer to shoot a picture of somebody taking a check like they used to do twenty years ago? They don't need to because you can look on your phone, ‘Oh yeah, that's good everybody is in focus, everybody's eyes are open, okay.’
Bill: But, if it's your wedding, Uncle Jim is not going to do, right?
Bill: Fair enough. We talked a little bit about the unique challenges of building and nurturing teams on the creative side of the world, but are there, across your careers, some philosophies that you've formed or put into practice about building teams, driving culture that you think continue to be as valuable as they've always been? Or what are the secrets to building the right kind of teams, in a creative industry or beyond, that can achieve the kind of goals that you've achieved?
Ray: The old adage that you should hire somebody smarter than you or better than you is, I think, really important. The other thing that again somebody smarter than me said this to me and said this about people is, ‘People that are really good at something and don't realize they're good at it because it's very natural to them.’ You have to understand that when you look at something that seems very obvious to you, don't expect for it to be obvious to your team because they're not wired like you. They're wired differently than you, and they're not going to solely see it. I think that part of it is to understand that everybody is wired differently and that you have to, like in my role as the CEO of Alkemy X was to respect the creative team, understand that they really know what they're doing.
I'm not the creative guy. I'm not the creative director. Yes, could I pretend to play in that field a little? I'm not terrible there but I was really good at running the company. They respected me in doing what I was doing and I respected them, and I think that some of it is to understand that old adage. Everybody thinks they can direct — that's not true. It's just as much of a talent as coming up with a creative concept or managing the company where people are wired differently. You have to understand that from a cultural standpoint especially in a creative company.
The other philosophy is always do your best. You can today, no matter what, even if it really sucks because you have been dealt terrible cards, as long as you're doing the best that you can, tomorrow it will work out. Don't get hung up that you didn't get a job or you missed delivering something or whatever. If something goes wrong, if you did everything the best you can, and something came out of left field, there's nothing you can do about it.
Another thing is some people manage to get really hung up on making the right decision, and I think you have to make the best decision that you can at the time. I want to qualify that slightly in that you have to do all your homework. If you do all your homework and you make a wrong decision, you most likely learn something from it, but you did all your homework. The other side is that if you didn't do all your homework and you make a decision that's wrong, that's not too good.
Bill: That's on you.
Ray: That's bad. Yeah, that's bad. I think that that's really more and more in today's world, you have to be really comfortable with that because things are moving so quickly. If you figure it out totally, even if you make that decision, it might have been the right decision but that was two months ago, now it's a wrong decision because two months have passed.
Bill: Makes perfect sense. What's next for Ray? We talked a little bit about it before the mics came on, the ability to play nine holes of golf without a phone constantly interrupting. You've talked about some of the consulting stuff, obviously there's an incredible creative perspective that you have but this entrepreneurial spirit, this intelligent risk taking, this leadership and growth capability that you have, obviously in you meeting a lot of people as noted, but have any idea of what the next move looks and feels like perhaps?
Ray: For me, it does have to be something that's entrepreneurial and challenging, and that's something that I want to do right now. I guess you can say I'm already thinking about what the next thing was and that is trying to do something that potentially has some sort of impact would be great on my next thing after. If I could combine those two right now that would be great, but for me I'm not saying no to any meeting because there's some things that have surprised me a little bit as far as things that there's some very interesting things going on out there.
I told myself when I was going to do this that I was going to make sure that I took my time and didn't rush into anything right away now. If I had some opportunities, if I come back twelve months from now I'd go, ‘You know, I probably should have done that.’ Who knows? It always ends up working out in the long run, it always does, no doubt.
Bill: With the ability to lift your head over the past couple of months and look around, what's your take on Philadelphia at this point? Because of the entrepreneurial economy, as a creative culture, anything that you've learned? You obviously spend a lot of time in various places driving the business at Alkemy X but now that you've had a chance to meet some folks and look around with fresh eyes, how are we doing regionally?
Ray: I think that Philadelphia could be on the brink of another Renaissance if you look at what's going on here. There's a lot going on here but honestly if you go to Brooklyn, it's double what's going on here just in Brooklyn with building and stuff going on. I do think that there's been a change growing in the city that everybody is always worried about, ‘We're too close to New York.’ All that kind of stuff. There's some validity to that but at the end of the day if you have a great company and a great culture and you have a great product that people want to buy and you're successful, not all but a large percentage of the people that might want to work for you would rather work in Philadelphia than New York. It's just a better quality of life especially if they have families and things like that.
There are certain positions and certain people that if your aspiration is to run Viacom some day you have to be in New York, you just have to be. It really depends on what your aspirations are but I think that Philadelphia has a huge potential and if you think about it, it's because the world is getting smaller, we all talk about that. You can be in Philadelphia and compete for any job in the world if you want to. Where you're actually located is becoming less and less of an issue.
Bill: Indeed. As we close and thank you so much for your time and insight, Ray is a well-regarded, well-known executive and author of success stories in this region and beyond. As you look back on your career path and choices that you've made, you referenced some of the decision making as you've done different things but summing it up for those who've been inspired hearing about your journey, we've mentioned a few but any other words of wisdom with which we should part?
Ray: I said always try to do your best but the other is you’ve got to show up. I don't know if people have heard that before but I've gotten more business or more contacts or more success from going to that event that I was like, ‘Oh, I don't want to. It's late.’
Bill: It seems to be the one that's always great, right?
Ray: You have no opportunities unless you show up and I think that especially in today's world, obviously we network electronically but physically going to events and networking with people and building relationships. What I found is that it starts to build a level of trust. It gives you either somebody you can ask questions to or if you're going to be doing business with them, it's a different type of relationship. I think the phones and electronic stuff is very important, but don't underestimate going to these events and going to these things and trying to network and build your network outside on the franchise of your business really. Go to things that you might think that you're not going to find business at and you'll be surprised what you find at those places.
Bill: Actually getting back, real quick, then we’ll close. Thank you for your time. Since we're here on Real World Branding, how old is the Alkemy X re-branding project? Two years old, three years old perhaps?
Ray: About two years.
Bill: Any reflections on that process and what was easy? What was not as easy? What you anticipated versus how it felt to be in the middle of that?
Ray: We didn't go into the process trying to re-brand the company. It was more of restructuring the company with all the disruption in the media business. What did we need to do to stay relevant? I brought in a couple of consultants and staff to help me with that and really it became clear that the brand was confusing. I guess you would say the old brand was confusing and some other stuff. Some people would debate with me on this, but I don't think we moved fast enough. We had a big competitive advantage of being a one stop shop especially in New York, nobody else was doing that. The brand really reflects that if you think about it.
Alkemy X, we put together a lot of different things in different ways that nobody else did, and the clients got it. The clients loved it once we released it, but the issue was is it took us so long internally to make that change. I can understand why - we were living with that brand for thirty years.
When we announced the name, three of our top competitors in New York a week later announced that they were basically the same thing because they had seen what we were doing. They had fleshed out their services, and we had lost a lot of our competitive advantage, especially in New York. Stuff like that happens. I think that the process of doing it was more than just the name. It was really looking at everything else that was going on. I still feel very strongly about the re-positioning of the company into that spot. It was really relevant going forward. The issue is it's a very different business model that the company has to own because the business model that existed five years ago just doesn't exist.
The whole post-centric technology based business model, what does it mean? There's no barrier to entry under the post side and technical side now because it's all creative and it's all talent and that's what the goal was when doing that. I guess you could say that's my biggest thing: I think we didn't move fast enough no matter what the name was going to end up being.
Bill: Thank you so much for your time and insight and for all the work you've done that helps put this marketplace on the map. I can't wait to see what comes next. We're definitely going to take advantage of the inner imperative having maybe some windows in your schedule to spend some time and seek your expertise. Thank you, Ray.
Ray: Thank you very much.
Bill: Many thanks to Ray for his time and his insight, his journey is a fascinating one, his future is also fascinating. He has so much to offer, and he's so thoughtful about not only the world and role of content, but he has an ability to see where the world is going. We can't wait to see through his eyes as his career continues. Thank you for joining us on Real World Branding, as always we appreciate your support of what we do and we'll sign off from the Cradle of Liberty.