Speaker 1 (00:00:02) - Welcome to the Growth Elevated Leadership podcast with Julian Castelli. Each week, we talk with senior tech leaders to explore stories and insights about the challenges involved with growing technology companies. We hope that these stories can help you become a better leader and help you navigate your own growth journey.

Speaker 2 (00:00:27) - Hi, this is Julian Castelli. I'm the host of the Growth Elevated Leadership podcast, where each week I talk with inspirational entrepreneurs and leaders in the tech industry. On this show, past guests have included CEOs and CXOs of great companies like Work Front, CG healthcare, Radical Systems, In Moment, Vox, Pop, me, the San Francisco, 40 Niners, and many more. This episode is brought to you by growth. Elevated growth elevated as a community of tech founders, CEOs, and CXOs who are committed to working together to share best practice practices and learning in an effort to become better leaders. We do this through educational events like this podcast, and we also have an annual tech summit, which also happens to be the base of beautiful Park City Mountain.

Speaker 2 (00:01:10) - So if you like tech and you like skiing, check it out at Growth elevated.com. Today I am super excited to be joined by David Bell, the CEO of canopy, which is a SaaS company serving accounting practices prior to canopy. Davis has held leadership positions at various SaaS companies and had a successful career on Wall Street. Before that, Davis is here in Utah with me and he's married and has seven children. Please welcome Davis Bell. Hey, David. Hey.

Speaker 3 (00:01:42) - How are you, Julian? I'm doing.

Speaker 2 (00:01:43) - Great. How are you?

Speaker 3 (00:01:44) - Doing well. Great to see you.

Speaker 2 (00:01:46) - It's great to see you. And congratulations. I understand you just raised a successful funding round.

Speaker 3 (00:01:51) - We did. We just raised $35 million of funding, which, we're excited about. And, you're not seeing tons of funding announcements these days. No, that's that's.

Speaker 2 (00:02:01) - A healthy round. And in a, in a, in a kind of a drought economy for for tech startups raising capital. So that means you've differentiated yourself from the crowd and must be doing some things right.

Speaker 2 (00:02:12) - Congratulations.

Speaker 3 (00:02:13) - Yeah. Thank you. We're excited about it.

Speaker 2 (00:02:15) - Well, this is super exciting. Tell us, tell us what canopy does, please.

Speaker 3 (00:02:19) - Yeah. So canopy is a firm wide operating system for accounting firm. So we are not the the software where an accountant does the actual work of accounting. They don't prepare taxes or run payroll or audit or bookkeeping and canopy, but they do everything else. It's the place where you manage your customers, their information, your communication with them, as well as collaborate within the firm. Keep track of your time, send invoices, get paid. So it's sort of that that system.

Speaker 2 (00:02:47) - Of them run their accounting business versus exactly them helping their clients. Correct. Is it a system of record for these firms?

Speaker 3 (00:02:54) - Very much so. It's the it's the sort of spine of of an accounting practice.

Speaker 2 (00:03:00) - Wow. Okay. That I want to come back and ask you about that. I bet that has some unique challenges. But tell tell me when you started with the company and and if you wouldn't mind, let's book in the journey.

Speaker 2 (00:03:10) - Where were you when you started with the business? And then obviously you just had a successful endpoint or, you know, milestone point, not endpoint where you raise some capital. Tell me about where the company was, where you started and and walk us through to today, please.

Speaker 3 (00:03:23) - Yeah. Of course. So I started at canopy just a little under five years ago, so late 2019. And since that time we have, you know, I'm going to count the end of 20, four, but I think, you know, over the last five years or so, we will have, between 4 and 5 X revenues during that time. So growing quickly, growing the team from I think it was about 100 folks when I started. We're coming up on about 170, people and thousands and thousands of accounting firms on canopy.

Speaker 2 (00:03:55) - My goodness. So you joined in just five x the business. Sounds like it was a smooth ride,

Speaker 3 (00:04:01) - Yeah. I haven't really been doing much. It's, just kind of, you know, set it and forget it, right?

Speaker 2 (00:04:05) - That's awesome.

Speaker 2 (00:04:06) - Everyone wants to get into tech, right? Looks easy. No, I imagine it was anything but. Right. So so so what? Tell us a little bit about that journey. I'm sure there were some ups and downs. What were some of the biggest challenges?

Speaker 3 (00:04:19) - Yeah, I mean I think a couple I mean, I think number one, when I came on, there was a reprioritization of one product in particular, which was our practice management, product. So we sort of said, hey, let's really focus on on this or had been a couple other products. One got shut down right before I came, and then the other we sort of chose to continue with, but we weren't investing nearly the amount of resources in that product.

Speaker 2 (00:04:47) - So that's always hard because you had existing customers, right?

Speaker 3 (00:04:50) - Yeah. And, you know.

Speaker 2 (00:04:52) - Fortunately for them, what did you do with those customers? That's the kind of traps people into trying to do too much. Is that sure? Well, the one.

Speaker 3 (00:04:59) - That got shut down was sort of in beta. So that wasn't you know, it didn't have a huge customer base, the one that we, we chose to, not invest as much in does have customers, but it's a relatively simple product. It's well done product. People like it. And so there's not tons and tons of, requests on feature improvement and so forth.

Speaker 2 (00:05:21) - So, okay, so you just kept it alone where it was and just didn't reinvest more into it. Yeah, we do a little impact yet your customer base or is it one customer typically using all your products.

Speaker 3 (00:05:33) - so not they may be but they can use one or over on practice management we have 5 or 6 modules and they could be using any one of them. A few of them, all of them together.

Speaker 2 (00:05:46) - Got it. So practice management was what you decided to focus on correct.

Speaker 3 (00:05:50) - Yeah. That's that's where we sort of we sort of said, hey, this is where our future is. This is our focus.

Speaker 3 (00:05:56) - We're going to go after this thing, and make it happen.

Speaker 2 (00:06:02) - And what were some of the challenges in building a system of record versus more of a point app?

Speaker 3 (00:06:08) - I mean, they're enormous, honestly. So one, one of the key decisions, that we sort of made was our our market is dominated by two large incumbent products that have been around for decades and decades and decades, and they're outdated and on prem, but they're powerful and they do a lot. And and so, the temptation, I think in our market at least, and I think this is common to other SaaS companies, was to say, well, let's carve off a piece of that. Let's do one of the 5 or 6 things, just do it really well, and then we can sort of move up market. We can get bigger customers, better deal sizes, and then we'll just either will integrate with that, you know, incumbent sweet or will just make them kind of run alongside. And we chose the opposite path.

Speaker 3 (00:06:56) - We thought ultimately people want the one stop shop. They want to they don't want to stitch together a bunch of disparate applications. So we made a decision to build the whole thing, which, I regretted, lots of times because that is incredibly hard. It's very time consuming. It's very capital intensive. Sieve. But I knew that if we could fund it and we could execute well on it, that that was really going to be the killer of these incumbent sort of legacy suites. So that was a really important decision and one that was really challenging and made life really hard for a while, but that has proved to be the right one.

Speaker 2 (00:07:35) - Awesome. So you you made the right decision. You, decided to build the full enchilada? Yeah. Operating platform. Yeah, but I imagine you have raised capital for that. That must have been pretty tough.

Speaker 3 (00:07:47) - yes, it was tough because I think we had been known, I think, among investors for, the product that that we discontinued that which was a tax preparation.

Speaker 3 (00:07:58) - Yeah.

Speaker 2 (00:07:58) - I remember you guys were called Canopy Tax.

Speaker 3 (00:08:00) - Yeah, yeah. And then and then you have challenges in the marketplace itself because people were sort of, you know, focused on that because that's how we branded the company. So, we we had to re re sort of educate the market. But as it relates to fundraising, we had to re-educate investors. And that's harder than it sounds, actually. They they really get that embedded in their minds. And, and so going to them to say, hey, you know, we're going to do something a little bit different, we're focused on something different. and getting them to put money in, is challenging. And, fortunately, I think since I've been here, we've raised about $70 million, but it's, it hasn't been easy. And some a lot of that depends on what's going on in the market, which is another thing that maybe I was a little naive about is I always assumed, hey, you show up with the right metrics and the right story, like you're going to you're going to be great.

Speaker 3 (00:08:51) - But you you are a very small boat in a very large ocean. And, you know, if that ocean is is stormy, then investors really react to that. To to the extent that your individual metrics and story are often sort of irrelevant.

Speaker 2 (00:09:08) - So when did you raise that first round that that was really going to help you build this platform product for, for accounting practices?

Speaker 3 (00:09:16) - Yeah, I would say, You know, we've done a couple of different rounds, but I think one big one came in, sort of the, you know, spring of 2021. That was our series AA and that that gave us some. Okay. We've got, you know, we've got cash. We can continue sort of pushing this, this sweet approach. And then we raised a series B, B in late 21 with new investors. and that was really like okay, we, you know, we've, we've got the capital to do this. We've got a phenomenal market opportunity. And now we can really we can go after it pretty.

Speaker 2 (00:09:51) - Quick between series A and series B, what kind of traction did you have? Did you find in the marketplace that allowed you to raise, you know, double down almost? It sounds like.

Speaker 3 (00:09:59) - Yeah, I think the big thing is we were showing a couple of things. Number one, we were showing that we could execute in terms of building the product. We were showing a lot of progress in shipping. Really, really great stuff really frequently. and then number two, we were able to tell a story about just where it could go. Right? We were starting to move up market into larger and larger firms, which was really important to people, because when you're in a vertical market the way we are, we sort of accountants and nobody else, investors are always going to be concerned about your Tam, right? Like, you know, if you're Divi or Lucid or, you know, Salesforce or pick your, you know, horizontal player, that's never concern. But when you serve accounting firms, they go and do the math and they're like, okay, you know, if this is going to become a big company, you got to convince us that you're going to serve a lot of that vertical.

Speaker 3 (00:10:46) - And so we had to show that we could move to ever larger firms. and then I think we had some really exciting opportunities that we had not yet been able to prioritize, like payments that was really attractive to. We're really attractive to to investors.

Speaker 2 (00:11:00) - Yeah. That is that's a that is a nice trend that a lot of companies are jumping on the bandwagon on. And investors do like that because it's a it's A12 punch in terms of revenue juice. Yeah.

Speaker 3 (00:11:10) - Exactly. Yeah I mean that that used to be kind of a cool idea. Now it's sort of like table stakes. Right. And if you're not doing it there, you know you're committed.

Speaker 2 (00:11:18) - But you managed to get capitalized on that. Yeah. And if you're going to be, you know, the operating system for a services firm, then you can you can start. Yeah. Be part of that participate. Yeah. Any particular investors that you know that that got that got the got on board and helped you understand the new story and kind of gave you some confidence to to circle others around them.

Speaker 3 (00:11:37) - Yeah. I think, You know, people, I think it's fast. I've learned a lot about investors and where their value lies. everybody's money is green, right? and I, I don't generally think that investors are going to be, you know, hugely value add in terms of telling you how to operate the business. And I don't think, you know, most CEOs want that or need that. I think they can have great feedback and insight as people who are a little removed. And I definitely get that. But I, I honestly think the most important thing to select for and I lived through this was how do they behave when, you know, things don't go to plan? So we had we had a set of investors that predated me who were super supportive as we were sort of, you know, changing focus. And then we had, investors at Ancona Capital, which is a newish fund out of Orange County.

Speaker 2 (00:12:34) - Who were Brian Messick. Right?

Speaker 3 (00:12:36) - Yeah, it's Brian and Josh Harmsen.

Speaker 3 (00:12:38) - a couple of, you know, a couple other guys. and they were just capable of kind of, you know, separating out noise from signal and just ignoring the noise and really getting in. And, and then, ten Cove's capital came on as our series B b and they've been phenomenal, just incredibly value add their fintech folks, and they've really pushed us on payments and helped us figure that out, which was a little outside of my skill set is more of a SAS person. Yeah. so, you know, they're they're I think that's maybe the other thing is, if you can find someone with some real topical expertise that you lack, that that can be really important as well.

Speaker 2 (00:13:20) - Well, makes makes a ton of sense. And in your recent round, it was at the same group of investors that kind of continued on forward.

Speaker 3 (00:13:28) - Yeah, yeah. And that's an interesting maybe topic is, you know, we we talked to a bunch of outside investors and we had lots of interest from outside investors.

Speaker 3 (00:13:38) - The reality is I realized, hey, our our inside investors, our existing investors were so bought in, and they're just part of the story, and they understand in a level of complexity because they come to board meetings and you talk to them all the time. that it's challenging for a new investor to, to get there. And then the other thing is it's a tough market right now. Right. And so, I knew that our existing investors were able we're going to be able to have confidence that would enable them to give us credit for like, you know, if the cake is like three quarters baked, it sort of gives us credit for a fully baked cake because they've seen us along the way. And they know what, that we'll do, what we say we're going to do. And an outside investor just doesn't have that same level of exposure and confidence and context. So, you know, I just felt pretty. And the other thing is just easier and faster. And, you know, you don't have to change your board and bought, you know, board dynamics that.

Speaker 2 (00:14:35) - everyone's happy with where the company is going. Congratulations. Yeah.

Speaker 3 (00:14:39) - Yeah. So yeah, in some ways they're harder to get to come in because they, you know, they they know where the skeletons are. Right. and so yeah, that's, that's kind of how I, why we, why we went down that path.

Speaker 2 (00:14:53) - That's. That's fantastic. So. Sounds like you drove this, this truck right through Covid. And what kind of challenges? The Covid. Yeah.

Speaker 3 (00:15:03) - You know, sometimes that feels like just a really strange dream that we. Yeah. Definitely had. I kind of mask in my coat the other day. I was like, what on earth? How did this form a big part of my life at one point. But, yeah, I started, I think I want to say four months before Covid and of course we had a huge nice office and we were all, I mean, it was a Utah based. You I don't I think we had one remote employee. It was like, if you work at canopy, you come into the office Monday through Friday.

Speaker 3 (00:15:33) - and so yeah, I mean, you're navigating how do you set up to work remotely? What are you going to do? People are anxious to know what you're going to do when you come back. and, you know, how do you deal with, like, the immunization thing and like, when can people come back and who's allowed to. And I won't go into all the details, but I, I feel like the, the sort of governing principle we settled on as an executive team was I just said, look, I'm going to let you all decide what you want to do with your teams. I didn't feel that it was made sense for me to dictate, like everyone back in on X date and under these terms, because there are different jobs, right? And being an engineer is different than being an A, and that's different from being a support agent. So, you know, that was it was a time to the other thing was just transparency. We were like super transparent. This is what we're thinking about.

Speaker 3 (00:16:30) - We'll tell you x, y, y, you know, giving them just a lot of information so that they could sort of, you know, there was a lot of anxiety in that time. And I think that I think that helped. Where do you where.

Speaker 2 (00:16:40) - Did you guys land on the office situation? What are your how how much in-office versus hybrid versus remote are you now.

Speaker 3 (00:16:46) - Yeah. So our our engineering teams have elected to remain fully remote. We do they do come in for sort of stand ups and things like that with their squads, you know, UX design and product QA. everybody else is, in office Monday, Wednesday through Friday and at home Tuesday, Thursday.

Speaker 2 (00:17:07) - you're doing the three days in. Yeah. And have a full size office or have you done. Yeah. Yeah.

Speaker 3 (00:17:12) - No, we we do. And you know, sometimes I go in on a Tuesday and Thursday and it's like, oof still costing me money and nobody's here, but I, I feel like we've landed in a good spot.

Speaker 3 (00:17:21) - I, I don't I'm, I'm also sort of skeptical of the idea that there's this like perfect thing. They just all have.

Speaker 2 (00:17:27) - I've heard it.

Speaker 3 (00:17:28) - Yeah, yeah. Pros and cons. And we feel good about where we've landed.

Speaker 2 (00:17:32) - Okay. Great. Well, you know that it's been. Sounds like it's been a interesting five years. What would you say you're most proud of in the journey?

Speaker 3 (00:17:42) - Oh, man. I'm proud of our team. we have really low attrition. We've had the same core exact team together with an exception or two, basically, since I've been here. I'm proud of our employee NPS. It's really high. It goes, you know.

Speaker 2 (00:18:00) - What is it? How long have you been keeping employee NPS? Since I.

Speaker 3 (00:18:03) - Got there? yeah. So I think, you know, our record was maybe 72. I think it's in the high 60s right now. but I, I take a lot of pride in that. I mean, you got to average it because sometimes, you know.

Speaker 3 (00:18:14) - And did.

Speaker 2 (00:18:15) - It happen? Climb from some point to go from X to Y.

Speaker 3 (00:18:18) - Yeah. I mean, it was low when I, you know, when when we first started measuring it just because there had, you know, it was kind of a challenging time. But yeah.

Speaker 2 (00:18:27) - Well you just get started.

Speaker 3 (00:18:28) - Yeah. But but yeah, I mean, you know.

Speaker 2 (00:18:30) - And how long did it go to. And Covid was that was, that was, it was it a barometer of how things were going in Covid?

Speaker 3 (00:18:35) - No, actually it was pretty high during Covid because okay, you know, that was also a time where I think, you know, we had this new kind of vision and people were getting excited about it. but I think, you know, it's also a good lesson. It's like, not ever linear. It's not like five points up every quarter, right? Like, it dips because people are stressed or they're unhappy with the, you know, something going on. And and then, you know, you work it out and it edges up and you know, over time, you know, you want it to live at that.

Speaker 3 (00:19:03) - You know, 60, 70 level, I think is is actually really good.

Speaker 2 (00:19:07) - Is there anything that you've done, levers you've pulled or decisions that you've made that you think had a tangible impact on your employee NPS and overall people's excitement and satisfaction with with working at the company?

Speaker 3 (00:19:22) - Yeah, I mean, I think the number one thing people focus a lot on, like benefits or office policy or even culture, and in those matter a lot. I think the number one thing is people want to feel like they're winning, right? Like they want to feel like this company is succeeding. It's growing. We're hitting our numbers. We're meeting our OKRs. I think that's the number one thing outside of that. Yeah. I mean, people care that, you know, you're providing them autonomy and that there's communication. I think probably the biggest thing outside of winning is transparency. We we do a monthly all hands where we show them everything. They see a board deck. I mean, they see all of our metrics, cash balance or our churn, like the whole nine yards, whole company sees everything.

Speaker 3 (00:20:09) - Yeah. so I think that's really important to people, which can be challenging to manage because it's like, what are.

Speaker 2 (00:20:15) - The challenges that creates? I think that's an awesome transparency, but I, I imagine some CEOs will be nervous about that.

Speaker 3 (00:20:22) - Yeah. I mean, I think there's a couple of challenges. Number one, not everybody has the necessary context to fully make sense of some of the things you're sharing, right? So you have to provide a lot of context on hey, yeah, like our new RR went down. But that's because, you know, this is tax season and we don't bring in as much new era. Right. And there's actually a ton of jargon that you realize you're using, you know, LTV or cap or whatever. And so you got to provide that to people because they don't just that's not something you learn in school, right? and then you're always worried it could get shared, I guess, outside. But I don't know, you just sort of have to trust people, that they want, and I it hasn't, to my knowledge.

Speaker 3 (00:21:04) - So, but, yeah, I mean, the flip side of it is it can create concern if, like, let's say you've got a goal for cash and you miss your goal for cash. People get a little concerned. But ultimately I think that's good, right? It's like they're participants. It affects them. And it's also like, well yeah guys, we missed cash because we missed you know, we missed our retention goal. Yeah. You know so that's like oh wow I connect retention and cash. And now I'm going to like think about that a little bit more. So you know that's not perfect. But I think it the pros outweigh the cons.

Speaker 2 (00:21:35) - That's great. I think that's really. A great practice and it does does require some investment to make sure everyone understands the context, but it also keeps you on your game to make sure you're communicating clearly and, and, Helping people understand. So. So what were what was the what were the metrics that make people feel like they're winning? Is it is it going to are growth or is it the whole thing?

Speaker 3 (00:21:59) - I mean, it all matters.

Speaker 3 (00:22:00) - But I think, I think art growth probably trumps most things. I mean, probably other things. customer NPS is a big one. You know, our product folks take that pretty personally, and they.

Speaker 2 (00:22:14) - Have a lot of pride in that. Absolutely. And it's typically linked with their growth too. Right.

Speaker 3 (00:22:18) - Yes, very much so. You know retention I also think, you know, and probably almost to to an outsized extent fundraising, you know, people. Oh yeah. You know, that's.

Speaker 2 (00:22:31) - That's a deliberate look that that is a outside benchmark. It's kind of, you know, maybe it shouldn't be, but it's it's certainly feels like a report card.

Speaker 3 (00:22:39) - Yeah. It's somebody outside said validation. Your baby's your baby's not ugly, right. Yeah. So no, that.

Speaker 2 (00:22:45) - Makes perfect sense. Well, listen, this sounds like, you've had a great journey. What? What do you think? That, you know, now that, would make you a better leader in the future based on the experience and what you learned at canopy over the last five years.

Speaker 3 (00:23:03) - You know, I think probably my whole conception of leadership has changed and and I, you know, wish I had known this when I started. And I think we've all probably read too many books about Steve Jobs and Elon Musk and Jeff Bezos and clearly very accomplished people. But, you know, I think that model is the sort of leader who stands, you know, astride the company and has all the answers. And, you know, when someone comes with an idea, you know, you shoot him down because you know that you've got all the answers, right?

Speaker 2 (00:23:38) - 500 people on a whim.

Speaker 3 (00:23:40) - Yeah, yeah. Just because I didn't like that tie you were wearing and, you know, and it's like these bold, kind of almost irrational moves and. But I think the central idea is like, I'm the visionary. I have all the answers and I know exactly what the future holds. And I'm just going to drag everybody towards that.

Speaker 2 (00:23:57) - Yeah, there's a prototype in the media and it gets a lot of attention.

Speaker 2 (00:24:01) - Is that that iconic leader? Yes. It could also be very toxic.

Speaker 3 (00:24:05) - Yeah, well I think it can. It is toxic number one. But I think more than that, I think strategically it's just not a good idea because I just fundamentally believe that if you're curious and open and don't believe that you have all the answers, you're going to get to the right answer way more often. Hopefully you've hired a smart team around you, and they all have different expertise that you don't have, and they have different exposure to things that you don't have because you're not in their seat every day. And I've just been wrong about stuff like I just like flat wrong, right. And like, you know, if you're in your mind you're trying to be Elon Musk, then you know that that mindset doesn't admit to the possibility that you could be wrong. And so I think listening and curious and like, hey, I think this why do I think it you're saying something else. Why do you think that? And then there's usually a synthesis, of those, I think of.

Speaker 2 (00:25:04) - An example where you kind of led with, with curiosity and questions and got to a better result.

Speaker 3 (00:25:12) - yeah. I mean, I think, man, a million of them, I think, You know, one one example would be when we were sort of pitching to investors back, like early days. You know, I was I was doing it in a way where I, you know, we had kind of two products. One was a legacy product that wasn't growing as much. And then this new product that was small but growing much faster. And so I was conflating those numbers, just one R number because I wanted to show the scale. Right. You're going to get a multiple based on your R. So I didn't want to exclude the slow growth stuff. And my crow kept telling me, like, I really think you ought to separate those out and tell two different stories on those. because I think the growth is going to matter to people more than the scale. And I, I can't actually tell you why.

Speaker 3 (00:26:05) - I may have read something I don't know, but like, I was really convinced that he was wrong and I was right. And, but I just kept running into a brick wall with investors, and I changed it. And it was one of those rare things. This doesn't often happen in business, but it was like a magical kind of like I could see immediately. Like immediately. Yeah. Because they were like, oh, okay.

Speaker 2 (00:26:26) - Frame the story had a huge impact.

Speaker 3 (00:26:27) - Exactly. So but, you know, I didn't want to. It's like my job to be fundraising is my job. Right. Like and so it's like, if I'm not good at that, then why am I in this job? And I realized, well, I don't like I can be good at it by listening to someone.

Speaker 2 (00:26:42) - And it can be even better by having.

Speaker 3 (00:26:44) - Yeah, exactly.

Speaker 2 (00:26:44) - Five brains on the problem, right?

Speaker 3 (00:26:46) - Yeah, exactly.

Speaker 2 (00:26:48) - Okay, that's a great example. Really neat. Well, as you look back, if you had a chance to travel back and do it again, is there anything you'd do differently? Well, you know what? In other words, what lessons might you share that, you'd like to do differently next time?

Speaker 3 (00:27:04) - Yeah.

Speaker 3 (00:27:04) - I think, and I think this is becoming a little bit more popular, but. You know my background. the companies I was at, probably the last the one that got the largest is a structure. And that was very much the raise. A lot of money. Burn fast, raise more money, burn fast. And it worked out great. They went public. It was fine. But I think that I had that mentality. And I think that there's actually a way to raise, but to do it in a way where you own your destiny a little bit more. So I'm not like anti venture capital by any means. Obviously, I've raised a lot of money at canopy, but I do think that if you raise in a way where you bring in, let's just say you bring in $20 million, you can structure your, your expenses and your financial plan in a way that's like, look, we expect to get to, you know, 20 million in RR on this capital. but if it goes slower, like we're going to be in a tight spot because if we we have no runway, when, you know, we're 15 instead of 20, we're going to have a hard time raising number one.

Speaker 3 (00:28:08) - Number two, even if you get to 20, you don't know what the market's going to be doing. That's right. A lot of companies this is uncontrollable and it matters a ton. It's not just about your company. So there's a lot of companies that were doing great. And they just happen to run out of runway in like, you know, late 2022, early 23. And it was like the window was closed. That's right. So I think yeah, exactly. So I think structuring in a way where you can, you can get to cash flow break even if you want to is smart. So that then but you don't have to write. If then it's like.

Speaker 2 (00:28:43) - You have to break the glass in case of emergency. Yes. Opportunity. Right. Yeah. So how did you do that? Or is this something you're saying this is something you would do next time? Have some contingency plans?

Speaker 3 (00:28:53) - I didn't do that. And in fairness, it would have been hard because we had to hire a bunch of people to build this thing.

Speaker 3 (00:28:58) - But like, I think I think now we're doing it like this round is that represents that for us. And I think that, you know, a lot of the companies I admire, maybe it takes another year or two and sometimes you're in a land grab. You don't have that time. But like most companies, can take just a little bit longer and operate with with a little bit more eye to optionality where it's like, look on this round, we could keep going, cash flow break even, we could go raise another big round or we could sell the business. that's a really awesome place to be. And I think I maybe would have those options. Yeah, exactly. And the thing is, if you can just stay alive, that's what you can out. You can outlive anything, right? If you can just stay alive, then great. It's the problem comes when your need for cash or to sell comes at a bad time, either because of what's going on at your company and your metrics, or the the broader marketplace, and you have zero control over that.

Speaker 2 (00:29:54) - That's right. So control your own destiny. Have have the optionality by being able to get closer to break even. You know, if you if you know you can do it, you'll you'll sleep better at night. Yeah. And, have a plan whether you pull that plan or not, it still is a strategic decision that you and your investors make.

Speaker 3 (00:30:13) - Exactly.

Speaker 2 (00:30:15) - That makes a lot of sense.

Speaker 3 (00:30:16) - Yeah, it's a hard way to live where you have to do that at a certain point in time. Like that's a and we and I lived through that and it worked out. But that's a that's I had a full head of hair when I started this job.

Speaker 2 (00:30:28) - And yeah, you can definitely, definitely, benefit from, from having multiple options. Well that's that's a great story, Davis. I really appreciate you sharing it with us. you know what? What's what's next for the company? I mean, you just raised a bunch of money. Yeah. You're. What are your goals for the next the next five years?

Speaker 3 (00:30:46) - Yeah.

Speaker 3 (00:30:47) - I mean, I think, we've got our eye on a couple of different adjacent products, which we're excited about. we, we're investing heavily in AI, which I'm super excited about. Like, you know, your average SaaS company, I think made people a lot more efficient, right? Like, you know, pick your poison, Salesforce or whatever. I mean, it really does. It saves a lot of time, makes people more effective. But I think there's a chance for software that leverages AI to make people. Ten, 50, a hundred times more effective. And I and I'm really excited about like the, you know, the ability to do that.

Speaker 2 (00:31:24) - Yeah. There's a there's going to be a lot of innovation over the next five, five years, five, ten years. It's going to be super exciting. It's going to happen fast.

Speaker 3 (00:31:31) - Yeah it is.

Speaker 2 (00:31:34) - great. Well, you know, last couple of questions. Any any, what do you do to keep up the speed as you as you're learning? are there any podcasts or books that you'd recommend for our listeners?

Speaker 3 (00:31:44) - Yeah.

Speaker 3 (00:31:45) - Honestly, right now, my two favorite, things for that are newsletters. there's a guy named Benedict Evans who, is really I mean, he's he's a tech sort of generalist, but he's he's spending a lot of time thinking about AI. And his newsletter is just phenomenal. The other one is a guy named Ethan Malik, who's, a professor at Wharton. And he's, like, very, very drilled into AI. He's it's more technical. You know, he's he's sort of in the weeds, but I, I don't can't believe and understand all of it all the time. but I'm trying to spend a lot of time thinking about AI. And then I love Jason Lumpkin just as a SAS, you know, person. Like, I think.

Speaker 2 (00:32:25) - He's.

Speaker 3 (00:32:26) - He's he continues to be I don't know how he does it, but he continues to deliver a lot of value and insight, which he's been doing for a long time now. So I'm a big fan of his as well.

Speaker 2 (00:32:37) - Fantastic. Well, thank you so much for taking some time to tell us your story, Davis, and congratulations on all the success.

Speaker 3 (00:32:44) - Yeah. Thank you. It's great to be with you, Julie, and I appreciate you having me on.

Speaker 2 (00:32:48) - I enjoyed I enjoyed our conversation. Have a great day.

Speaker 3 (00:32:51) - All right. You too. We'll see you later.

Speaker 1 (00:32:56) - Thank you for listening to the Growth Elevated Leadership podcast. If you enjoyed this episode, would you please follow us and subscribe on your favorite podcast player and we'd be grateful if you recommend it to a friend. If you'd like more resources on how to become a better leader in business, we invite you to visit us at Growth elevated.com. We'll be back next week with more insight from another great tech leader. Thank you.