From Passion To Profit With Systems That Scale with Damon Flowers

Host Gary Pageau interviews Damon Flowers, CEO and founder of Modern Operators, about how “modern operators” differ from old-school business approaches in a fast-changing world shaped by AI. Flowers shares his background as a contrarian problem-solver who left corporate life to build businesses, and explains how passion becomes a viable business only when customers will pay (product-market fit). He argues most companies aren’t ready to scale because they lack foundational systems, documentation, feedback rhythms, and alignment, and he distinguishes lifestyle businesses from owner-led growth businesses. Flowers outlines the mindset shift needed to delegate, accept imperfect handoffs, and build transferable processes buyers want: predictable marketing, sales, and fulfillment engines plus dashboards. He describes moving from disconnected tools to an integrated operating layer where AI agents can synthesize reports, support documentation, and maintain brand voice. He directs listeners to modernoperators.com for discovery calls, audits, or operations partnering.

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Transcript

Sponsors And Welcome

Erin Manning 0:00

The Dead Pixels Society Podcast is brought to you by Medaclip, Advertek Printing, and Independent Photo Imagers. Welcome to The Dead Pixels Society Podcast, the photoimaging industry's leading news source. Here's your host, Gary Pageau.

Gary Pageau 0:18

Hello again and welcome to the Dead Pixels Society Podcast. I'm your host, Gary Pageau, and today we're joined by Damon Flowers, who's the CEO and founder of Modern Operators. Hi Damon, how are you today?

Damon Flowers 0:30

I am fantastic, Gary.

Gary Pageau 0:31

Good. Now the question I have to ask is what is an ancient operator and how is your thing different from being an ancient operator?

Damon Flowers 0:41

So yeah, modern operators. Gosh, we have definitely crossed the Rhine, if you will, in terms of old school versus new school, right? So old school business, which lasted decades and decades and decades, was you had lots of time to just throw stuff against the wall and see what stuck. You know, you had time to figure it out. Life didn't move very quickly. You know, we didn't have this thing called AI that was, you know, always in front of us. And so it does almost feel like we're in this sort of modern world where even business, every aspect of life, including business, has changed, right? And so to me and my my founder and modern operators, we definitely believe that in order to thrive in business today, there's going to be a different level of thinking, a different approach, different systems, different tools, et cetera. And just like the transition from moving from the horse, right, and buggy to cars, if you don't fully make that transition, I think the good analogy in your world is if you didn't make the analogy from analog to digital in time, if you just kind of kept kicking the can down the road, you probably didn't do too well after several years.

Gary Pageau 1:47

Well, then you know, there are people who specialize in film or are still doing well, but like you said, horse and buggy, right? The horse, they're still around. There's it's just not a mainstream business anymore. So where did you start? Where did you get into this stuff as a business owner? Yeah, I mean, you've operated your own business right before you did this. So tell us a little bit about where your expertise is coming from that world.

Passion Versus Real Market Demand

Damon Flowers 2:12

Yeah, so I think for people who go into business themselves, I think they're just kind of a different level of crazy than most of the world. And for me, I actually got fired from one of my first corporate jobs working in Silicon Valley because I was the guy that was like, hey, why are we doing it this way? And you know everything, right? Yeah. But uh, but kind of that, you know, why are we doing it this way? Why don't we do this instead? This this doesn't make sense, you know. And after a while, they were like, Yeah, that's nice, young man, but got the boot and I'm out. It was kind of like I've always drummed to a different beat, seeing seeing things behind the scenes, how they work, you know, wanting to figure things out, a problem solver, kind of coupled with this just drive for novelty. And so novelty, like, you know, just like I could, it would be it would kill me to go work in a cubicle day in and day out in the same place, doing the same thing. So I'm kind of the other end of the spectrum. So business was a way to kind of scratch those itches, right? Solving marketing problems and figuring out products that people will buy, and how do you fulfill people so that they're happy with you after the fact and they tell their friends, you know, and how do you manufacture stuff and put up websites, all that stuff is really been exciting for many years.

Gary Pageau 3:22

So when people have started in the photography business, right? And when I talk to people who, you know, started businesses in the 60s or 70s, processing film, it's because they liked photography, right? I mean, that was sort of their passion. They really liked that whole the process of film and the magic that happened in the tray and maybe or in the processor, and that and they really weren't thinking about the business side of it, right? And and I always see that a lot today, where people like have a passion for something. So, what are some of the things people can look at when they have a passion to start a business or continue a business that they can evaluate whether it is a business or not?

Damon Flowers 4:06

Yeah. So I think of those people as actually craftsmen, right? So whether it's crafting a beautiful piece of wood or, you know, like a great piece of art, they're really doing it for the the joy I think that it brings them internally. And uh this is an interesting question. So your question was, you know, how do you kind of know that you have something that maybe is beyond a passion, could turn into a business? Right. Ultimately, it comes down to will people give you money, right? So we call that project market fit. Will someone pull out a credit card and pay you for the expertise, the craftsmanship that you bring, because they don't have that thing and yet they want it.

Gary Pageau 4:46

Right.

Damon Flowers 4:46

I think for a lot of folks, especially creative folks, whether it's in video or art or imagery or photo photography, et cetera, I think it is very important. If that is something that you want to make your livelihood, then you've got to have conversations with people to get your product out, to get your photos out. Can you get it hung? Can you get your photography or your landscapes work hung in a restaurant locally? Yeah. In fact, my daughter, who's 18, she's been an artist for years and years, and like always thought it'd be kind of a fad that would go away, but she's gotten incredibly good. And I've suggested, like, hey, you know, do you want to go to college for this? You want to study this? And she's like, no, because the moment that I start getting paid for it, it takes away the joy. And I was like, oh wow.

Gary Pageau 5:33

I've actually gonna have someone in the industry tell me that. I had someone tell me, nothing kills your love of photography faster than having a photography business. Yeah.

Why Growth Breaks Small Businesses

Damon Flowers 5:42

You know, you've gotta you've got to figure out is this something that I love doing and I want to bring this into the world in a way where I'm also paid for it. Because we we have to put food on the table and take care of our families and buy all the things that we need in light.

Gary Pageau 5:58

So when you're talking to someone about their business, you know, one of the things that I saw in your materials you talked about is scaling, right? How to scale a business in different ways. And, you know, there's AI tools now, and there's all kinds of things. There's a lot of people who operate smaller businesses who, you know, they kind of have to be the person who has their fingers in everything. But that's not how you can actually scale a business, right? You kind of have to kind of let that stuff go.

Damon Flowers 6:26

Yeah, I would actually say that the vast majority of businesses are actually not ready for growth.

Gary Pageau 6:33

Okay.

Damon Flowers 6:34

That's what most people don't understand. They really feel like all businesses should be growing, and all businesses are poised for growth. And that's not really the case. So a business that's poised for growth means that it has a foundation, it has systems, it has cycles and rhythm and feedback. It's got all kinds of things built inside of it where you can dump more money into marketing and it can handle the growth. You can dump more staff, more customers, right? Most people don't operate a business in that way because if you were to add a bunch of new customers or a bunch of new money or whatever, the business would very quickly break, right? They would not be able to fulfill customers, they would be scrambling, and 24 hours is not enough time in the day to do everything that they would need to be able to do.

Gary Pageau 7:17

Right.

Damon Flowers 7:18

It maybe kind of helped me circle back the idea of where do we want to go next with this?

Gary Pageau 7:23

Well, the idea that uh, like you said, people aren't necessarily ready to scale, and they want to have their fingers in everything. They want to be able to touch every part of the process, right? They want to be the key customer contact, and that doesn't scale.

Mindset Shift From Doer To Leader

Damon Flowers 7:40

And this is kind of where I think business owners need to be uh honest with themselves about do I want a business that I really just enjoy showing up every day and doing things in the business? Or do I want to transition the business to a place where I'm working on it? I'm leading my business, I'm actually growing my business, but I'm not in the day-to-day. And that's a really important question for business owners again to check in with themselves around. So it's totally fine, right? I think we call this a lifestyle business. So, you know, I enjoy putting together the art and talking with customers and signing deals and negotiating contracts. The problem, I think, is when somebody wants to grow their business, but they're stuck in the day-to-day and they don't know how to make the transition from one to the other. And so one is that I like to say our inner game is what creates our outer reality. And I think you've probably heard this before in other, you know, podcasts, including yours, maybe Gary and others, like, you know, how we think about ourselves, our beliefs about ourselves, beliefs about what we're capable of, how much money I'm I'm I'm capable earning, you know, and worth of earning, all of that. That plays into then what do we create in our life? And your business is exactly the same. It's a manifestation or an outward expression of who you are on the inside. Oftentimes, business owners will need to kind of start there to figure out if I want more, then I'm going to need to start to see myself differently. Right. So if I'm making half a million a year and I want to have a business that I sell for five million a year, I'm going to have to think about myself differently. You know, how does the $5 million a year business owner that's really dialed in and somebody's writing you a check now for you to step away from that business and they're taking it over and you now have $5 million in your account. How does that person make decisions? And then along the way, we tailor some things and we're building this business that's really built around us. Right. But in order to transition, you have to now bring in people to do work that's not you because you are not scalable. Exactly. People can scale around you, systems can scale around you, but you cannot continue endlessly scale. So now we have to figure out how do I impart my vision to the people that are around me? How do I get them excited about coming in to do work and to how do I get them to own outcomes? So in my business, how do they own the outcome of working with our customers and making sure our customers are taken care of?

Gary Pageau 10:29

But part of the challenge with that is you've got you may want your staff to be a certain way, but you yourself have to then do those things, right? I mean, sadly, I've heard many cases where it's like, you know, I want my staff to be here, you know, eight o'clock in the morning to start and they're ready to go, and then he doesn't stroll until 10, right? I mean, it's one of those things where if you want, you have to provide the template yourself, not just through dictation or or how things are done, but actually, you know, do those things, right? You have to display them.

Damon Flowers 11:06

I need to get to the place where when I hand something off, I'm okay with it being 60% done the way I would do it. And then with training and over time, it goes to 70, 80, 90% plus. And in fact, then it actually gets better than you would have done it yourself.

Gary Pageau 11:23

Right.

Getting Processes Out Of Your Head

Damon Flowers 11:23

That's where a lot of I think business owners struggle is they don't ever fully transition and hand things off and delegate because there's this, they're not getting done that way and they don't know how to fix it. Right. So they just continue to take things back over and then they're stuck back in this overwhelm loop or they're caught up in the day-to-day and the business doesn't continue to work.

Gary Pageau 11:44

So, how does documentation and things like that come into play? Because I find that when people want to pass on tasks, they really have trouble documenting it down in terms of, hey, this is the procedure for doing these things. And that I think is the first step, I think, to getting to the point where you can start handing things off.

Damon Flowers 12:28

And this is why, in fact, we a big part of why we created modern operators, because there it turns out there is a series of playbooks and principles and frameworks and all of that. That once you understand, you can see the potential in your business. You can see the potential for growth. You can see the potential for working in your business 20 hours a week, really dedicated to the things that you really, really love, and have other people around you, your staff that are doing the things that you don't really love, but they really love, and seeing your business continue to flourish and grow. And then someday, you know, it's built in a way where somebody would write you a check for it. I love what you're talking about with documentation. One of the traps that business owners fall into is everything is stuck in their head. Exactly. Where the business to go is stuck in their head. You know, what's most important for us to do this month or this quarter is stuck in their head. Who the most important accounts are, and you know, what's, you know, who's doing what and how this is done and how that's done. And so it does start with beginning to get that information out of the founder's head into we call it a system. Modern operators says a system, where you can now confidently know that the staff around you sees what you see. They're aware of the vision of where the company's going. They're aware of what's most important for us to focus on this quarter. They're aware of this is how I sign a contract, this is how we sell, you know, this is this is how we do coupon codes.

Gary Pageau 13:54

And maybe some of the why, because I think that may be missing, is why are we doing it this way?

Damon Flowers 14:01

And so the system, you want to think about if in a perfect world, the founder would sit down and have conversations with people, you're exactly correct, around this is who we are, this is what we value, this is who our customer is and what they really want, what they're struggling with. This is why we do what we do. And and this is how you ultimately can take over and own what you do and make it a part of the bigger vision for the business so that we're we're all moving in the in the same direction. It's important to uh alignment. I talk a lot about alignment. We we want to make sure that everybody, you and your staff are in alignment around where you're going. The worst thing is if half your team is rowing to the left and half your team is rowing to the right, the boat never goes anywhere. It just stays stuck.

Gary Pageau 14:48

So I've seen people like recommending like even like dictation services, right? Like, you know, hey, let's let's just have, let's have you talk about how to do these things, and then you use an AI tool or something to transcribe it and clean it up and do those things. There's a lot of great tools right now out there to help with that process.

Damon Flowers 15:10

We're starting to move away from a tools environment to more of what I call an operating system environment. Sure. Yeah, a tools environment is like for years, oh, I need a tool to manage my prospects and my sales pipeline. So I go look at it. Yeah, I go look at a CRM. Oh, I need a tool to handle my inventory for my my business, right? I'm gonna go get this system. And then tools that came out to make those two tools talk to one another. And now with AI, we're making a very quick transition to what I refer to as an operating system or an operating layer. So it turns out that for the last several years, we've been starting and growing businesses sometimes very rapidly by bringing people and systems all into one operating layer where sales, marketing, product, fulfillment, legal, finance, your everything is operating in one space, which enables staff to be able to share information and access and see things very easily. Of course, it's all permissions-based, but it enables everyone to have one source of truth. Imagine a world where you've got one source where you could go to ask a question and immediately you get an answer back. Imagine a world where you could ask for it to create some marketing copy or or you know, help you in your in your marketing your business. And because the system knows your business so well, it's able to give that information back to you. Right. And so, especially with AI, now being able to bring the context of your business into one central hub. Right. Imagine like your staff again being able to ask a question, how do I do, how do we do this? How do we do that? And immediately the answer is there. Imagine a world where you are asking, like, hey, how many widgets did we sell last month? What was our you know, CPA, my CTR or CPA, or how much did we spend on ads or whatever last month? And boom, the answer's there. Imagine a world where all of your information is coming back from what your prospects are saying about your product or your service. It's all right there. And so asking the system, hey, based on what my prospects are saying about what we sell, what should we go sell next? Or what's the main problem that my customers are running into that I need to solve? Right. And now the system, because it has access to that type of information all in one place, it's able to deliver that back to you. I know this is probably getting a little bit high level, but every business owner should be doing an annual retreat where you get away from the business. Maybe it's just you, maybe your leadership team, and you're sitting down to ask the questions what did we accomplish last year? You know, what worked well? What did we try that worked well? What did we try that didn't work? And you want to be able to distill and pull that information up, for instance, to be able to plug that into your next year. Where do we want to be at the end of this year? Right. A lot of businesses don't do that. But again, those that do, you're on a rocket ship for growth. In years past, that would take countless hours and days to bring and pull all that data together and slides and people, your head of this and that, or gathering this information, and everybody gets together and you're whiteboarding stuff, and then somebody's got to stay after and distill all these notes and all these discussions. Right. This January, we'd already built out the template, for instance, for everything that we need to gather at the end of a year. I literally kicked off an AI agent inside of our operating system that's trained and built to do this. And within about five or six minutes, we got back an entire synthesized report inside of our system of this is everything that you accomplished. This is how you move the ball forward, this is where you made improvements to margins and products, this is how many projects you had, how many tasks you did you completed, how many new staff were on boarded, how many customers we had, you know, what would our revenues look like and increases. I got to tell you, Gary, I was blown away. I literally had to just step away from the computer because a moment like that, that would normally take 50 plus hours of time to go through. And it happened in 10 minutes. Why? Because all the data was already there, right? Right, exactly. Everything within sales and marketing and our meeting notes from all the meetings that had happened throughout the year, everything is available. And now the agent is just going through and asking the same questions we would have asked ourselves, but it knows now how to go throughout this system and pull and double check because you know you hope it's not having hallucinations and things like that.

Gary Pageau 19:59

But usually that stuff's pretty good. I mean, that's that is what's amazing about what's happening with kind of AI these days. It's sort of taking the idea of an application out of it. Because right now, if you think about it, you would have, okay, to generate that report, you got to do some things in Excel, you got to do some graphics, you got to do some things in Word. You know, you have seven applications that would do these things, whereas but as part of the AI, it's just the function, right? And I think we're heading towards a world where applications in air quotes are going to be disappearing and we're just gonna access the functions.

Damon Flowers 20:33

Yeah, I think you're right. And I think we're also gonna start to see tailored approaches based on who you're interacting with. Sure. So an example is for all of our clients, we have a brand voice, and that that voice is constructed based on what we know of that client. And this is like, you know, they're detail-oriented, they really like to see things in this way, or they're big picture oriented, and they really you just give them the summary. And then as a result, our communication with them gets automatically produced based on what they want to see, how they like to see things. Another example of brand voice would be imagine where you're doing marketing for clients. For instance, we have a client of ours who's really a big name in the digital marketing space, doing marketing for big name venues and rock concerts and all that. And they use brand voice now for writing ads and writing copy for all of their clients. Well, now that they have a brand voice built for client A, client B, client C, client D, when the AI is writing copy, then it's able to marry out this is this is the brand voice for this particular client, this brand, how they think, what they want to see, what their values are, all of that. And even having the AI then run some checks and make sure, like I wrote this, then I checked it against this, I checked it against that. And now when it delivers back, it's the AI has done 90% of the heavy lifting, and now staff are able to come through and tweak and refine and polish, right? Right to make something that's even better than it would have been before. And I'm not, by the way, suggesting that we I don't see a world that's healthy where that we move into where it's just AI and no people to work. We're we really need both. And and you know, a good, healthy. System has people that are doing what they love to do, and they've got tools to help them do it even better, right?

Gary Pageau 22:28

When we have these conversations about AI impact, it's like I always go back to, you know, when Photoshop was first introduced and things, and people used to do that stuff by hand with oils and pens and correct images and all that kind of stuff. And then Photoshop came in and more people could do it. The people who stayed that way went away or had to learn new skills. And then I think with AI, it's a lot of that too, where you know you're going to use an agent of some sort just like you used to use Photoshop to help you accomplish a task, but you still need a human being involved to guide it or train it or correct it or manage it in some way.

Damon Flowers 23:10

Yeah. I love that story. So I think we both agree the number of people that now could become photo editors grew exponentially because of these tools that were available, which allowed the explosion of even more images, right? Yeah. Tailored to customized images.

Building A Sellable Business Engine

Gary Pageau 23:26

And again, again, I mean, of course, there's going to be fallout, right? I mean, you know, I mean, that's that when there's any massive technological change, there's going to be a fallout. And, you know, we all don't know where that's going to be. But generally speaking, it creates more opportunity on the back end than we know going into it. So we really don't know what the impact of AI is going to be. But for now, for businesses who are who are you know trying to streamline their process, like I said, they now get some great tools and some great, I keep using that word. I shouldn't say tools. You'd say you say you don't, you say don't use tools. Look at your business and use these processes to evaluate it on how you can get it to a sellable position, how you can get it to where you need to go, where maybe it's been held back by either lack of information, lack of structure, lack of process. Yeah.

Damon Flowers 24:15

So the question there is, what does a if you're thinking about selling your business, the question to ask then is what does a buyer want? Right. Right. So if you were going to buy your business not knowing anything really about how it works, what would you want to have in place? It turns out buyers want to have a system that runs that system. They want a system that produces money predictably, low risk, sustainably, it adapts, things of that nature. And they want to be able to understand what are the buttons and levers that I need to push and pull in order for this system to continue working. So the reason that that is is because they're putting their money to work into a system or an engine that's producing a return for them. And the reason that they don't want to necessarily buy a business that has founder A, who is intimately involved in everything, is what happens when founder A gets hit by a bus the next week? Right. Or founder A decides, I'm out of here, I can't do this anymore. Now there's a massive risk, right, with the buyer. And how's the business going to continue to grow? So start with that question, I would encourage folks to start with that question and then realize like, okay, that means I need to have a marketing engine in place. How do people find out about me? I need to have a sales engine in place. How do I sell my widget or my product? How do I have a fulfillment engine in place? How do I fulfill my product? Right. And I have a dash, just like a car. I've got a dashboard in place that tells me, hey, the engine oil is getting low, the temperature is getting too high, the fuel gauge is getting too low. You've got to have a dashboard that signals to you first, the business owner, and then later to the buyer, this is how the business is running. And therefore, I know ahead of time if there are problems or things that I need to be aware of to fix it. I kind of talk about stages that individuals go through. We don't do all this at once, but we go through a stage where we typically are kind of stabilizing the high-risk things. And then we typically build a foundation of systems and processes that work in the major areas. And then we're typically optimizing the business. That's where we install the dashboard and we make sure, like, okay, yeah, we know exactly how it's running. And then we prepare it for growth. And that way, when a new buyer comes in, they know what they're buying and they're willing to actually pay you more money for the business because they'd rather pay more for a business that they they understand it competently runs without you. They're going to pay very little for a business.

Step Away Test And Where To Go

Gary Pageau 26:50

Because it's all about performance, and that's the thing. It's I always tell people when they talk about buying a business, it's not a reward for what you did in the past. It's the promise of the future. That's really what you're selling when you sell a business. And once you understand that, you understand that you know it has to be set up to a way for in such a way that it is transferable. And the more seamless it is, the more attractive it is. Which is why franchises are such a big deal, right? Because it's a relatively seamless transaction of a business process. Yeah.

Damon Flowers 27:25

I mean, I love the way that you put that. It's not a reward for what you've created in the past. Um, it is a it's built for for the future. And so I I think a good way that a business owner can can kind of step into this process is either asking a question or actually doing it. What would happen if I step away from the business for a week? Right. Maybe you start with a day if that's where you need to start. But maybe it's a day, maybe it's a week. But ultimately, what would happen if I stepped away? Now, maybe you just ask the question and then you go to work fixing those things. Or maybe you just say, you know what, I'm going to step away from the business for 24, 48 hours or an entire week, and I'll deal with the consequences when I come back. That's a good place to sort of understand what is immediately breaking when you're not there. Right. What answers do staff members need? What processes just get stopped? What things just stop happening when you're not around? And then go to work fixing those first.

Gary Pageau 28:19

So, where can people go for more information about your modern operators system?

Damon Flowers 28:27

I would encourage folks to go to modernoperators.com and just book a discovery call. You can go through and check out our newsletters. You can binge on our YouTube and understand a little bit more about my background and my co-founder's background, Mark Mallian. But the best thing to do is just to hop on a discovery call and let's see if if we can help. We'll tell you and be up front. We might have some ideas for you, for instance, that you could implement, you know, help do it on your own. Maybe you end up hiring us to do an audit of your business and really help to bring back information that you may not be aware of of how your business is currently running, what it's what it's valued at, what systems are maybe not in place and how to how to what we would do if we were in your shoes to go out making that a reality. And then for other folks too, we do everything all the way up to actually partnering with businesses and being their operations partner and doing all the operations for them to make sure all that stuff is set up. Yeah.

Gary Pageau 29:23

Hey, listen, thank you so much for your time, Damon. It was great to meet you and uh best wishes for the future.

Damon Flowers 29:29

I appreciate it, Gary. This has been great, man, and I've enjoyed learning more about you as well.

Erin Manning 29:36

Thank you for listening to The Dead Pixel Society podcast. Read more great stories and sign up for the newsletter at www.theadpixels society.com.