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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 00:00:28 Hey everybody! Today we’re going to talk about team building. Building. And I want to talk about push versus pull. That’s the framework I want to use. Is your team pulling you into next year. Are they pulling you into 2025. Are they knocking the ball out of the park in their department? Think about your executive team, right. Is every member of your executive team pulling you towards future growth? Are they inspiring their peers with their speed, their attitudes, and their approach? Or Can you think of some of your team members that maybe aren’t pulling, with the pullers? You know, you know, when you have it, you can know it when you can see it. It’s like product market fit. they are ripping.

Speaker 2 00:01:10 They’re creating opportunities. They’re knocking down obstacles. They’re excited. They’re energizing everyone around them. That’s what I’m calling pullers. Then maybe you have someone, some other folks that are maybes. Okay. So you think about your team. They’ve been pullers in the past. They’re likely to be pulling in the future. Maybe sometimes they’re off and on. so you can have a maybe group as well. But I also want to differentiate the opposite of pullers. And I think the opposite of pullers are people that instead of pulling you in your team, you have to push them. Okay? You have to really get get with them because they’re they’re not doing what you need from the team. Maybe they’re, they need some help. Maybe they’re they’re getting outmatched, with the phase you’re in, and, you have folks that you have to push and so think hard. Most teams have 1 or 2 of them. And you know, sometimes I ask CEOs, I think I tell them to think about which executive one on one session that you dread the most.

Speaker 2 00:02:09 That might be a sign, right? Maybe you’ve even stopped doing one one on ones with this executive, or you’re avoiding them. That’s a sign. Or maybe they’re causing troubles in meetings, or they have a lot of excuses. and so I want to think about categorizing your key team members, your executive team members as pullers who are pulling forward. And then there’s this maybes, which is fine. Let’s set those aside. And then are there sums that you have to push? And if there are, maybe it’s time to think about what to do with those, those pushers, next, next year as you start your planning. Now, I heard this concept of pullers versus pushers on a podcast the other day. it’s the I o podcast, which is the investor and operator podcast from Sterling and Tyler over at Pelion Ventures. So shout out to those guys. I thought it was a great concept, and I wanted to just spend more time talking about it, because I think it’s such a great, easy way to just think about it.

Speaker 2 00:03:01 You can see a puller or everyone’s had pullers and maybe everyone, once they think about it in this context, can think about people they had to push. And it really helps. And it just happens to be December. If there’s snow outside here in beautiful Park City. And I thought of Santa Claus, right? Because when I heard this concept, I thought, okay, well, think about the pullers, right? That you imagine Santa and his sleigh being pulled by a team of beautiful reindeer. The reindeers are straining on their harnesses, they’re pulling forward. There’s. They’re excited, and everyone’s trying to keep up with them. And they’re pulling Santa and his sleigh through the night sky. We could also all picture that, right? Santa has eight pullers and I’m not going to name them all. But we all know the song. And how else can he circle the entire globe on Christmas Eve? Unless he had eight fantastic pullers? Now the question is, does he have any pushers reindeer that he needs to push to help them do their job.

Speaker 2 00:03:58 Reindeers that he’s pushing all the time, reindeer that might even be sitting in the sleigh next to Santa. Or instead of the the presents or making, you know, taking his seat instead of pulling it. So when I heard this concept, I immediately thought of Santa Claus and said, man, pullers are out front pulling. And as the CEO, you’re trying to, you know, point them in the right direction and encourage them, make sure they’re fed and everything. Or are they are they arguing with you in the on the bench, in the seat, or much worse, are you having to push them? Maybe they’re in the on the in the sleigh and you’re Santa Claus behind the sleigh pushing folks. And so I, I thought that was great. And I wanted to share it with everybody to see maybe that image will help you. And I even created a I generated image, which I’m going to put on this posting here so you can see it. But are your is your the question is, is your executive team pulling you like Santa’s reindeer or are you behind the sleigh? And there’s a couple people in the sleigh and you’re having to push them.

Speaker 2 00:04:56 And if that’s the case, maybe there’s an opportunity for you to really increase the, the, the, the, the effectiveness and power of your team in 2025. So we’ll we’ll share that picture and we’ll have some fun. So so what are we talking about here. What do we what do you need to know? Okay. As the CEO your biggest job is to attract, retain, inspire and support an excellent management team. Okay. As a CEO, you’ve got three things. You have to have the vision of where you want to go. Number two is you have to attract the team who can get you there. And number three you you lead them along the way. And that middle piece attracting the team is was probably the biggest single job. And that’s what we’re talking about. If you attract eight pullers like Santa does, you can do incredible things. You can create miracles like like all of us are trying to do in the innovation world. Right? But if you have a handful of pullers and some pushers, it’s much harder.

Speaker 2 00:05:53 Right? And so my my point is do you have the right team. Do you have the right team for the next leg of your journey? Right. And sometimes the team changes by stage. So I’m going to ask you the question, do you have the team right. Team not for last year. Do you have the right team? Not for this year, but do you have the right team of pullers for next year, 2025 and beyond? Right. And I think that as you take some time over the holidays and think about, you know, what you can do to be successful going forward. this might be one of the biggest things you can think about to have an impact in 25. And don’t forget, this is the most important job of the CEO. And it’s the most important because it’s critical to your success. We’re all trying to innovate and do incredible things out there. If you’re an entrepreneur, if you’re trying to create innovation and change the world through tech, it is hard enough to do that.

Speaker 2 00:06:48 And it’s almost impossible unless you get the absolute best time, best team for the next phase of your journey. It’s critical to your success. Number two. If you don’t look at the team like this, no one else will. This is the job of the CEO. There’s no hiding or hiding from it. There’s no one else who’s going to come in and do it. You can’t outsource it. You have to do it. Number three, if you get it wrong and you don’t recognize that you have pushers, it can cause you to fail. Right. And we’ll talk about that a little bit. And then the last reason that, it’s it’s very, very hard. we talked about it in the hire. the fire fast and higher. Slow the dynamic of psychology and why it’s really hard to change teams out, but it’s important. It’s your job as the CEO. You have to do it, and it’s critical to your success. All right. Now, why why do we have to know this? Why? Why is this important? Okay.

Speaker 2 00:07:46 It’s important to think about it. And the reason I thought about it here, as we’re planning for 2025, you know, this is the the end of Q4 2024. So we have the forward year. Look at number one. Almost everyone has this problem, right? Even if you had the perfect team at some point in a stage that your company is growing and it’s going to have new challenges and new opportunities, and you’re going to need the right team for the forward, stage you’re going into. So the right team of pullers is sometimes stage dependent. You might have a puller who was a great puller in the series, a stage, but now you’re a series B and they’re trying to figure it out, and maybe they’re in the middle category and you can work with them and get them to be a puller there, and that’s fine. So take everyone who’s in the maybe category, put them in the maybe, but really look and see if you have pushers that you’re spending a lot of time with that you really have to push them to get the job done.

Speaker 2 00:08:38 And that’s the framework that I just thought was so powerful. If you’re pushing them instead of them pulling you, then maybe you’ve got to make a change. And that’s a framework to look at. Okay. It number two, it is easy to ignore. In fact, all the circumstances collude to make you want to ignore it because you have so much work to do. Your plan for 2025 probably doesn’t include, you know, upending your executive team. That’s probably terrifies you, right? And so it’s easy to ignore that. It’s emotionally hard to act upon. Right. Again, we talked about it in the higher slow fire fast, all the emotional things are going to have you default to try to deal with the status quo, or maybe hide some people in the maybe basket, which you know, you can do for a little while. But again, once you start using this framework of push versus pull, I think you’ll start identifying. Yeah. That person that I put, maybe I’m pushing them, I’m pushing them and pushing them.

Speaker 2 00:09:29 And at the end of the day, you have to make that tough decision to to find a puller if you want to be successful. another reason it’s hard is it’s recurring, right? You think you have it solved? you know, you just make a big hire. It’s a huge time of expense. It’s emotionally challenging. You might get a recruiter. It’s going to take a lot of your your CEO’s time, your board board’s time. You know, it’s very difficult. You think, okay, I’ve already done this. And all of a sudden, just when you think you have it solved, might pop up in another area. And that happens because the stages that we’re talking about. And so again, look at the forward year 2025. Do you have if you have five departments, the five executive leaders or 4 or 3, whatever it is, do you have your three or 4 or 5 pullers? Okay. And is anyone arguing and sitting in this in this slide next to you? So what I recommend that you do what you need to do here is to evaluate your team.

Speaker 2 00:10:26 And it’s very simple. Just break them into two categories or maybe three pullers. You know who they are. You have your pushers and you look at each executive if you pull, where are they pulling? You know, can they make be an example for other team members? And then you think about a pusher, where are you having to keep pushing them? Right. And you might have the people that you’re not quite sure put them in the middle for now, and we might be able to work them, but you really want to find the ones that you’re constantly pushing, you’re constantly spending time with, and then saying, okay, what would the impact be if we could upgrade that position? And ultimately, the reason why you need to do this, because if you do, it’s going to increase your chance of winning. All right. it’s going to it’s going to just help your team be more effective. And frankly, you can’t do it without it. So here’s the finish up here. Here are five signs that you may have a pusher as you go through this exercise of dividing your team into pullers, you know, maybes and pushers.

Speaker 2 00:11:24 You may have a pusher if number one the easiest is performance. Okay. That’s that’s that’s obvious. management 101. You know, look at who who met their goals, you know, have you meet your sales goals that you meet your marketing goals? Did you meet your meet your product goals? Did you meet your engineering goals? this year, you should be doing that at the end of the year. And, and, you know, any area that, is significantly off. That’s that’s a sign doesn’t necessarily mean you have a pusher. It just means that it’s an area to look at. And why is that right? Number two, what happens is, when you find someone that’s off you, you know, you’re a CEO, you’re a leader, you’re probably a pretty good problem solver. So you might have diving in and you might be trying to solve the problem for one of your team members. So are you trying to solve the problem for one of your executive team members? Right. Do you find yourself becoming an expert in sales or an expert in technology? All of a sudden you’re you’re look at your look at your bedside table.

Speaker 2 00:12:21 Is your bedside table full of books? Because you’ve decided you’ve got to figure out how to problem solve for one of your team members. That might be a sign that you have a pusher, right? You’re pushing them because you’re trying to figure it out. Now, it may be a unique challenge because we’re in the innovation space and it may be something really hard. And, you know, it requires that leader plus yourself, plus maybe some outside experts to solve a problem. So I’m not saying anytime you get involved it means you have a pusher, but it could be a sign, right? If you have the right puller, then you’re you’re focusing on trying to, you know, clear the path in front of them, making sure they’ve got enough to eat. And they’re they are sprinting towards the objective. If you’re trying to problem solve with them, it could be a fact that that you don’t have the right puller for this stage of the journey. Right. Okay. Number three, another sign that you might have a pusher is their team turnover in that department.

Speaker 2 00:13:12 Do they keep losing people? Do they have a hard time keeping their team? And so not only are they maybe not performing well, but then their team isn’t turning over and it becomes a consistent challenge. That’s a that’s a warning sign. If their team is, turning over or the caliber of their team is low. Okay, the fourth sign, they are in the sleigh. Okay. is there someone that you’re wondering about whether to put them in the maybe category or the pusher category, and they’re always in the sleigh? What does that look like? Obviously, you know, you can look at the graphic that I need to post here online. But for in a in a CEO executive suite, it means they are arguing about strategy. It means they are being defensive. And they’re they’re they’re arguing with their peers. So at the executive meeting they’re always being difficult. they’re spending time criticizing other departments. A lot of times these are signs that that they are struggling in their own area. And so they’re, you know, they’re not out there pulling, but they’re in the sleigh trying to trying to be defensive and, and creating some other challenges.

Speaker 2 00:14:13 So you can sometimes see, the problem. But because they’re in the sleigh and they’re being defensive or they’re arguing. Finally, the the last sign that you may have a pusher is that you can see that your other reindeer are getting frustrated. Okay. And this is why it’s so important that you actually identify folks that you have to push and you actually replace them with pullers. Right? eagles like to fly with eagles. Okay. if you have high performing pullers and they see one of the one of their peers is not pulling, they’re going to be pissed off. They’re going to be frustrated. They don’t like to be on teams with other other leaders who aren’t pulling. They may not say it, but you have to find out. You have to figure that out and you have to pull it out for them. It may not be politically correct, it might be subtle signs, but you have to have to find out. And when you do, you have to take action before you start losing your other pullers.

Speaker 2 00:15:03 Right. So imagine you’ve got, you know, five, five, exact team members and one’s really not pulling their weight and you got four others and they start getting frustrated. You might go from losing not just the the pusher that you have to replace, but you might lose one of your pullers because they’re here to win. And if you don’t fix your team and give everyone the best chance of winning, they might leave. Now you’ve got two problems, okay? You’ve just doubled your problem because you delayed. All right? So it’s one of the key reasons that you have to act once. Once you identify that you have some pushers because your pullers won’t tolerate, being saddled up with a bunch of pullers. So that’s the framework. Those are five signs. I hope this is helpful. I hope you enjoy the graphic. so you got to find out if you have any pushers. If you do, the first step is to admit it. Okay. Number two, create a plan to swap them out for pullers.

Speaker 2 00:15:55 And if you can do that and maximize the amount of pullers on your team, you’re going to increase your chances of winning in 2025. Happy holidays to everybody. Merry Christmas I hope you’ve got a bunch of pullers pulling you into 2025, and we hope to see you at Growth Elevated 2025 at the end of January. Take care.

Speaker 1 00:16:16 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.

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 00:00:26  Hi, this is Julian Castelli. I’m the host of the Growth Elevated Leadership podcast, where each week I talk to inspirational entrepreneurs and leaders in the tech industry. Past guests have included CEOs and CXOs of great companies like Work Front, CG healthcare, Radical Systems, Enrollment Retail, me Not, the San Francisco 40 Niners, and many more. This episode is brought 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 practices and learnings in an effort to help all of us become better leaders. We do this through educational programs like this podcast as well as our blog and of course, our annual tech summit in beautiful Park City, Utah. If you enjoy skiing and networking with other tech executives, check us out at Growth elevated.com.

Speaker 2 00:01:17  Today, I am super excited to introduce to you guys the founders of Revenue Reimagined, Revenue Reimagined as a sales and go to market expert agency that works with tech companies and other growth companies to create predictable revenue. These guys got on my radar screen because they’re out there talking about the go to market gap, and I’m seeing that everywhere. It used to be much easier to to be successful with sales with low interest rates. And when everyone was booming and people were were buying everything in sight. But it’s a lot hard lately. And these guys have a framework. They’re calling it the go to market gap, and they actually have the confidence to come in and help you fix it. They’re doing the hard work of unpacking the mess and rebuilding foundations to help companies get their revenue back on track. some might say they are reimagining how to restart revenue growth. Dale Zwizinski is the co-founder of Revenue Reimagined, and he previously ran sales departments at X44 and Halo. Jake Reni, also a co-founder, previously ran sales at tiled and has a senior sales leadership roles at Adobe.

Speaker 2 00:02:22  Finally, Adam Jay. The co-founder and previously ran sales at Falcon and Reprise. So these guys have great experience and I’m excited to bring them on to talk about this, this go to market gap. Welcome, Jake, Dale and Adam.

Speaker 3 00:02:40  Thanks for having us. I like how you did the the the the cycle. We put Adam last. So that’s always good. Listen, I I’m good to be last. I have to do less baby. That’s it. I gotta fix I gotta fix everything that these guys do. I’m kidding. That is true. That’s true.

Speaker 2 00:02:57  Excellent. Well, guys. Hey, thanks for being here today. you know, as we’ve talked and we prepared for this episode, we’ve talked about just how hard it is today, to to grow sales. Am I imagining that or is that, is that, a reality out there? It’s a lot harder the last 12, 18 months that it.

Speaker 3 00:03:16  Not night and day. It’s what what worked six, 12, 18 months ago doesn’t work anymore.

Speaker 3 00:03:22  go to market changes. I would even say in Jake and Dale gut check me. But even what worked 30 days ago doesn’t work anymore. It’s changing so rapidly, and it’s such a fast pace. Yeah, yeah, I go ahead.

Speaker 2 00:03:35  Dale.

Speaker 4 00:03:36  Yeah, I’m. We’re seeing that all the time. I think where people would build ideal customer profiles and value propositions like those need to be reviewed constantly and all the time. So, that’s something happening currently all the time and no one’s doing it.

Speaker 2 00:03:53  Yeah, I think I think we’re in a state where a lot of people are looking what at what has worked in the past. It’s not working. And there’s there’s some panic setting in. And, I think that’s what makes Mike special about you guys. This is a relatively new company. I want you guys to tell the founding story, but the fact that you are like the firemen coming to put out the fire, you know, I’m sure. Sure, it means you’re quite busy out there. And I’m grateful for your time this morning.

Speaker 2 00:04:15  tell us a little bit about your background. So you guys are are revenue experts. You’ve all had different experiences. Let’s just go around the horn, and I’d like to at, you know, have you tell us, you know, what experiences that you bring to the table that make your revenue expert? And why did you want to start helping companies on a on a fractional advisory basis versus, you know, what you’ve done in the past? Let’s let’s start with Jake.

Speaker 5 00:04:39  Yeah, that’s a good question. I, I had been thinking about it for, for some years. And, what I found as I was going through the later stage or I guess later stage of my career with some of the startups I had been a part of, is consistently the challenges that they were going through, of moving out of these product market fit phases into the like, the possibility of scale. And it just started noticing a pattern of the consistent issues that they were coming across every single time, that we were, you know, finding ourselves with the challenge of getting foundational issues just like settled, of how to get the right processes in place, how to get the right, spend and do this responsibly, and and how to prevent or avoid some of the inevitable things that seem to be coming up often, which is like layoffs when we over hired or we overspend.

Speaker 5 00:05:33  And so, for me, it got to a point where I realized, okay, I could either do this inside a single business and keep banging my head up against the wall, or I can take a lot of the frameworks that I’ve I’ve developed over time, the playbooks I’ve developed over time and really help do this at scale. And and that to me was something super exciting. And that’s why I decided to go out on my own. Finally, after about a year ago, after my buddy Dale here had been pushing me for the last two years to go maybe two and a half years to go out on my own. So that’s that’s why I decided to go do this.

Speaker 2 00:06:08  I like that the pattern recognition. Right. You know, once you see it a few times, you’re like, man, this is really helpful for a lot of people, right?

Speaker 5 00:06:15  Yeah, absolutely. Yeah.

Speaker 2 00:06:17  I mean, that’s one of the reasons we started this podcast in our blog, because we’re all seeing the same challenges over and over again, you know, different companies serving different customer needs, but with, you know, the same functional challenges happen over and over again.

Speaker 2 00:06:30  That’s that’s what we’re trying to do at growth elevators help people accelerate through those because it’s such a, it’s such a, rewarding feeling when you can help people skip steps or accelerate based on, you know, I always say, you know, learn from my mistakes. Please. I’ve got plenty to share. Adam, tell me about your journey, please.

Speaker 3 00:06:48  So it’s funny, Dale also is the one who made me go out on my own but a little different of a story. I started my career working for large public companies in health care, and got a ton of solid experience on systems, process tools, and, red tape at the same time. and realized that I didn’t love that big giant world. I didn’t feel like I made as much of an impact as I could. So I went over to the startup side, and was very blessed to be part of a couple IPOs and then wanted to get earlier in startups. so got into, like some seed and series A companies and very similar to what Jake said.

Speaker 3 00:07:27  Started seeing the same thing over and over and over again as a first time VP of sales or CRO, or second time VP of sales, CRO coming into the org to, you know, fix what the first one had been broken. I got pitched like I was an investor, right? Everything’s perfect, everything’s great. There’s just a couple things we need to change. But we’re going to change the world here. And all we need is for you to fix it. in being earlier in my career in naive, like I didn’t know what questions to ask, what metrics to dig into, what to really insist of. Like I need to see these reports. I need to see these numbers, not just take your word for it. And it took it. And were they even.

Speaker 2 00:08:07  There when you ask those questions, typically.

Speaker 5 00:08:09  No.

Speaker 3 00:08:10  No. there was a company that shall remain nameless where after being there a month, like I was told, we had X number of customers while we did, but half of them weren’t paying and had churns.

Speaker 3 00:08:22  And we’re still counting them as customers and we’re still counting the revenue they should have been bringing in as revenue. Oh, coupled with the fact that we were selling vaporware, another story for another time. but what I realized, Julian, is it’s not unique, right? It’s the same story every time. And oftentimes it’s because founders have been given horrific advice in the past, whether that be by, you know, a VC, whether that be by a inexperienced VP of sales who had no business being that first sales leader, because building is very different than scaling. And I realized that if I want to have that impact, that I want, I need to get to these folks earlier in the game, and I need to be able to help more than, you know, one at a time. After that last role, Dale had encouraged me, to go out on my own, which I was very reluctant to do. I did based on his pushing. And I’ll let Dale finish the story of how we wound up together.

Speaker 3 00:09:20  but here we are, in hindsight, being 2020, man. Like, there’s a lot of things I look back in life and I’m like, oh, I would have changed this. I would have changed that. I this is probably one of the best decisions I’ve ever made. I can’t imagine doing anything different or with anyone different than these guys.

Speaker 2 00:09:35  That’s awesome. Well, Dale, sounds like you were the instigator. You’re pulling these guys out of their roles. Well, you’re you’re the house breaker.

Speaker 4 00:09:41  I’m. I’m a little bit of the instigator. yeah, I’ve I’ve done sales for longer than I want to admit. and I was doing a lot of startup companies, so I’ve done, I don’t know, I quit counting now I say 25. It could be even more, but I’ve done it in like seven different countries. And so I did a lot internationally. I went into Oracle for a little while to get some like process execution type stuff done. so I did that for a little while.

Speaker 4 00:10:08  sold the company, to another fairly large mid-sized company called Fair Isaac. but always had the heart for the startup company because you can kind of do a little bit of everything. And so about two years ago, I was going through the same conversations. I’m just having getting pitch like an investor and we’re like, no, like, we know it’s broken. Like we’re not here to not talking to me.

Speaker 2 00:10:32  Otherwise, right? Yeah.

Speaker 4 00:10:33  Like it’s broken. But you need to know, like what you’re truly getting into. And I think founders are people that are going in to go at their first or second hire are hesitant because they think, well, if I make it two, if I don’t make it look good enough, then they’re not going to want to come work for us. And I think we as people that really want to help founders from a from a go to market perspective. We just know it. So I think we need to dispel that rumor. And people do really want to help.

Speaker 4 00:11:02  But you got to get the right person in that right seat because you’re building process. You’re hiring people, you’re building, you know, you’re closing business. You could be, you know, getting into messaging. So there’s a lot of dirtiness. There’s I call it pick and shovel work, that a lot of people don’t want to do if you’re heading up a sales sales group. So about two years ago, I was seeing trends of this because I go into a company similar to what Adam and Jake were talking about, and two months into the relationship, I could see that we weren’t going to go anywhere. Like there wasn’t a path to where they were trying to get to. But as leaders now in that company, you’re kind of stuck because you’re like, okay, like when we’re all competitive by nature. So you’re like, I can fix this. I can turn it around. But you just you kind of see the writing on a wall. You don’t want to be jumping around a lot. And it’s not that.

Speaker 4 00:11:49  Maybe better questions. We could have got better answers. but I also felt I took a reflection point and I said, why am I trying to do this for one founder at a time where I get in and I’m like, stuck for six months or eight months or 12 months, or I can do it for multiple founders and have that kind of conversation around how they can help grow in scale. And so, like I started doing some work on my own. And then when Adam, was leaving the company. So the funny story, the way we kind of got connected where we didn’t even know each other probably 18 months ago, and we were going after that same job that he was kind of just talking through, and I was trying to pitch them as like, this is a you should do fractional, like I was trying to go down the fractional path and he went down the full cycle path. He outflanked me in the sales process because he actually flew out there. I did not fly out there.

Speaker 4 00:12:42  so he definitely outflanked me in that. But, you know, six months later, like, Adam and I stayed really cool. Like, we had conversations. And even though we were competing for the same job, like we had our first call without even knowing each other. And so we built that trust and bond kind of right through that process. And when we were when he went out on his own, he ended up getting a job that he got a really good, first job and then got a second job that was like just as big, if not bigger, and said, hey, do you want to just, you know, tag team on this and see what happens? In the meantime, we had started our own podcast, Revenue Reimagined. And then I realized at that point when we started working together that like, you can’t do this on your own. Like you’ll see a lot of consultants, a lot of professionals go out on their own and they can only last eight, 12 months.

Speaker 4 00:13:31  It’s just super, super difficult. because of, you know, you want to take vacation. Like there’s times you get like, you gotta help clients out, and it’s just a very difficult thing. Adam becomes our executive assistant and all the operational stuff that we do, because Jake and I hate that stuff. and Jake and I, Jake and I have known each other for a long time, all the way back to the hirevue days. and and collaborated together. So I, you know, as we were building the organization out, it felt better because I like when Jake wanted to go out on his own, I was feeling the same way. Like I would not want to do this on my own again, even though I was trying to go through it two years on my own. And, or 12 months before Adam and I kind of, like, jumped on board together.

Speaker 2 00:14:13  Hey, did you guys work together at Hirevue?

Speaker 4 00:14:16  Jake was, we were. We were.

Speaker 5 00:14:18  No, let me tell the story.

Speaker 5 00:14:21  Dale tried hiring me when I was at Hirevue. I was I would be ended up becoming a power user at one of the companies that he was leading sales for at the time. one of the early, early kind of products in the market, in the, in the kind of revenue intelligence space and, and, I ended up becoming a power user and he just never seen anyone so amazing and and just effective as me. And so he tried to hire me, but he just couldn’t afford me at the time. No. Like we became, we became fast friends. Like we we just shared a vision. We shared a perspective, on on revenue. And regardless of the timing and how things didn’t work out, we like we knew we wanted to work together or collaborate. So we partnered on stuff and kind of just built the relationship from there.

Speaker 2 00:15:08  That’s awesome. A quick aside, Hirevue is a is a great tech company from Utah, and I always like to plug Utah companies. But I heard a thing that I think you guys will appreciate.

Speaker 2 00:15:17  I was talking to someone on Wall Street the other day about recruiting and and you know, I’ve got I’ve got a college age kid who’s looking at that. And they used hirevue as like a verb, like, like, you know, they’re like, I was asking about school recruiting and like, oh, it’s all in the hirevue now everyone does the hirevue. And I don’t think Hirevue was a company. He just kind of was referring it to as this thing. It’s like a process. It’s the hirevue thing. Everyone goes through the hirevue there’s thousands of people. I’m like, wait a minute, did you just say Hirevue? That’s a company. I know the founders of that business. That’s a really cool, you know, video interview, tool set. So? So all of us have some connection there. All right.

Speaker 5 00:15:50  Mark, Mark Newman would love that.

Speaker 4 00:15:53  One of my first hires through Hirevue was on the beach. I actually did the I did the whole thing on my phone, watch the watched the video and like, hired them right away.

Speaker 2 00:16:01  Yeah, it’s it’s a it’s a very cool tool. So for those of you just listening in, Hirevue uses video interviewing and all the benefits of technology to to go through that really long, tedious process and standardize it, turn interviews into data, and then be able to use that data to to make hiring decisions. And so a lot of us have connections with that, that Utah Tech company. All right, guys, so you guys got together, who wants to define revenue reimagined today? Like, you know, what does your company do? Who your company? Who are your customers? What’s the sweet spot of a customer that might be able to use revenue reimagined? Who would like to take that one? Dale.

Speaker 3 00:16:35  All. Dale. All right. Dale.

Speaker 2 00:16:38  Revenue. Your positioning statement. Revenue management revenue reimagined helps. Who? Where?

Speaker 4 00:16:44  helps you. So we’re doing everything from, series A to public companies. and the thing is that they don’t they have challenges the same, whether you’re a public company or or like $1 million, startup.

Speaker 4 00:16:59  So there’s a lot of similarities to those. We’re helping founders, CEOs and revenue leaders build, and stabilize their foundation to stabilize their, their go to market strategy, building foundations and driving through repeatability. So those are the three. Those are three of the four stages and go to market gap. and.

Speaker 2 00:17:19  When are you when are you big enough to be able to hire revenue reimagined and when is it too small?

Speaker 4 00:17:24  It’s a good question. we have some that are pre-seed that has some capital and some money. or not, I shouldn’t say pre-seed seed, seed that I got like a seed round raise. and that’s difficult for us because we are the salespeople. like we have to do many of the sales calls. but our sweet spot would probably be in, between the five and. And 50 million would probably be, like, the real sweet spot. Okay.

Speaker 2 00:17:53  and what’s the typical length? By higher revenue. Imagine. What am I signing up for? Is it is it 90 days and you’re done? Or is it.

Speaker 2 00:17:59  We do two years. What are we looking at?

Speaker 4 00:18:01  We we we usually say 6 to 9 months is is kind of our typical. the first month is always an audit. So one of the things we learned as a team, and I screwed up way before even we had had revenue reimagined, was I want to just go in there and solve problems and fix things like we want to operate. So we’re trying to get in there as fast as we can to operate on things. And and by the time a lot of founders come to us, or CEOs or revenue leaders come to us like it’s totally broken to the point of like they need leads now, they need deals closed. They need like, but there’s no process in place. And so it’s very difficult. It’s a difficult place for us as a team because we want to go in and like put on the gloves. Pick and shovel. Start doing the work. so right now, the way we do it now is a month audit. So we go through like all in very good detail, all the information from a go to market, from marketing, customer success, culture, etc..

Speaker 4 00:18:54  and then we come up with the top 3 to 5 things that we can work on in the next 6 to 9 months. and some of our engagements go 12 to 18. Some of them will say at six, we’ve done a couple at four. We don’t do anything below four now, because the first month has to be an audit, and then the next three or at least some work to get to some trajectory and momentum.

Speaker 5 00:19:16  Julian, if I could just add something there super fast, like I was telling my wife the other day, we were on a drive and she was asking me like, what are the biggest kind of things you’ve taken away over the last year doing this on your own? And I said to her, after running audits with new clients, I could never go back to the client side without wanting to run an audit. And how weird would that be? As a as an in-house House Crow saying, okay, wait. Well, before I take the job, I’m going to run an audit for a month on this company, right? But seriously, I could never go back.

Speaker 5 00:19:44  I could never go back.

Speaker 4 00:19:46  And it goes back to the original conversation we’re having. Like we while we were asking questions to try to get some answers, like, in fact, I would, I would go so far as to do a bottoms up like high level model to try to figure out what the revenue would be. But I would like inevitably, if you’re in a if you’re in an interview process for two weeks, for example, like you just can’t ask all the right questions, they’re not going to let you into their CRM. So that becomes a tricky a tricky place.

Speaker 2 00:20:12  Yeah. So the audit is great. And I think the audit is also good for the customer. Right. Because it gives them a chance to get a third party assessment, which is always important. almost, you know, full disclosure, I’ve worked with you guys a couple of times and I’ve seen the rigor of the audit. I think that, you know, you get a whole view of, of of all the different elements of the revenue machine.

Speaker 2 00:20:34  I used to call it the birthday cake, which is so many layers of so many different functions and it’s a little overwhelming. I think people talk about the non-technical founder and how restructuring a a engineering and R&D department is really difficult. There’s a whole group of people that help people with that. If you’re a non go to market founder, I think it’s equally as intimidating, right. When you’re throwing at all the different things, we rev ups and compensation and quotas and go to market and positioning and all the different things you have to work on. It’s a lot more than just going hiring salespeople. Right. And so I think that audit gives you guys, it defines the scope of of work that needs to be addressed. And obviously you guys use that to kind of pinpoint where you want to focus first. so that’s that’s that sounds like that’s been a good, good lesson. I don’t think we’ve talked about how long you guys have been in business. Let’s really back up. When did you start? Where are you now? And, and so you’re kind of, I think, sharing some of the lessons over the, over the first, that’s big sprint as a company, right?

Speaker 3 00:21:38  Yeah.

Speaker 3 00:21:38  We’ve, So we just celebrated our official one year anniversary, a couple of months ago. but as Dale said, it started revenue reimagined. Started before it really started. The initial idea was just a podcast, really, of how do we just share great advice with founders and revenue leaders so they don’t make the same mistakes? And I think they’ll check me 30 to 45 days in. We formed the LLC. and knock on wood, man, like we’ve been blessed, ever since we, I will say, work harder than we’ve ever worked. in, in a good way, but we’re doing it with a purpose. we are well over seven figures in revenue, which is outstanding. and then we’ve returned, you know, multiples of that to our clients. And I think one of the things that’s really important to us, when you look at what we do, it’s not always linear of, oh, I revenue reimagined was here for six months. I paid them $120,000 and I got back, whatever.

Speaker 3 00:22:47  243 6120. Part of it is certainly the dollar to dollar return on investment. and it’s something we look at very carefully. But the other part of it is like, how are we setting you up for success? How much funds have we helped you raised with your investors? How much runway have we helped you save? Because the burn was just out of control and things where you shouldn’t be spending money. and I think that looking over the past year, not only are we proud of what we’ve done, but we’ve learned a lot, right? Like we never used to do. The audit wasn’t required before, like it was a suggestion. and it took transparently bringing on to clients without an audit and being 45 days in and being like, dude, like this is nothing like what we discussed. Like what? What they said they needed us for. And what we scoped this job on is totally different. And now we’re having a conversation about, like, are we going to redo the whole scope or are we going to like, throw it out the window? so we’ve learned that while it’s really important in every founder or revenue leader who reaches out to us, wants that immediate impact, right? Like it’s often like, hey Jake, great conversation on Friday.

Speaker 3 00:23:58  Like, can you guys start on Monday? and that’s just not the reality. And it’s explaining that, like, we’re doing you a disservice if we do that, and I, I hate to be cliche and use the doctor analogy, but like, you’re not going to go to your doctor, say, hi, Doctor Julian. Okay, let’s go to the operating room right now. Well, what did what’s wrong with me?

Speaker 2 00:24:16  Yeah. Can you, can you can you can we get this done with my golf round, you know. Right.

Speaker 3 00:24:19  It’s it’s a very similar thing. but it’s it’s been just over a year. I think we’re still learning how to Best work together and divide the projects. Like there’s three of us and we all have, you know, our lanes of genius. a lot of overlap, but a lot of differences. and it’s exciting to continue to to grow and learn. Like, what’s great to say. Hey, Jake, I need you to take this for me.

Speaker 3 00:24:48  and conversely, what’s great for them to just say, hey, Adam, this is operational. I don’t want to touch it. Please do it or it’s not going to get done.

Speaker 2 00:24:56  That’s awesome. Well, look, you guys are off to a great start. I think you couldn’t have timed the market better based on what we said. The unfortunate news is that, you know, we all serve growth companies and SaaS companies and tech companies. And let’s let’s face it, the last 24, 36 months have been pretty hard with the, the, end of the derp and, and the increasing rates and just more competitiveness in the market. So let’s, let’s, let’s focus on what’s what. I got my attention, the go to market gap okay. This is what everyone’s struggling with. I want to do a little Family Feud style. All right. You might have a go to market gap problem if and you know survey said who wants to give me the first? The first. I’ll go around the horn.

Speaker 2 00:25:33  I’ll start with Dale. You might have a go to market cap if.

Speaker 4 00:25:37  If you are not consistently closing deals.

Speaker 2 00:25:42  All right. You’re not consistently closing deals. If you’re not closing deals, you obviously got a problem. It’s consistently the most important thing. Or is it just you’re not closing deals at all?

Speaker 4 00:25:50  Well, it became not closing deals at all in the latest like, you know, 12 months because people are like, I need to close more business. But I think it’s more like, can we now do it at a consistent basis? Can we forecast the deals and execute at the same time?

Speaker 2 00:26:07  Yeah, I had a conversation with the CEO yesterday and they were they were waiting for deals to close and they said, would you please go talk to my crew and give me your read? Like, is it really around the corner or not? What should I believe? Like it’s incredibly hard for every tech, every business leader to understand what’s going right now and, and and to be able to point to leading indicators.

Speaker 2 00:26:29  Do I really believe it or is it just another excuse? But I think the commonality is like, hey, we didn’t close what we thought we’d close in Q3. Q3 just ended a few days ago, right? We’ve all got companies in our minds that are struggling and, why? The question is why and how do we do something about it. So, okay, that’s I don’t know where the survey said, but it’s definitely up there in the top five. All right. Okay. Jake, you are next. You might have a go to market cap problem if.

Speaker 5 00:26:55  building off what Dale said, if you’re still operating solely off of top down modeling for your forecasting and your revenue plan. Okay.

Speaker 2 00:27:04  Like not yeah, you’re using top down, which means, you know, what is top down. We we kind of huddled around Thanksgiving and pick the number and then we’re trying to reach.

Speaker 5 00:27:14  It’s not even it’s not even we it’s it’s perhaps the it’s the board and and and maybe if he’s lucky or she’s lucky the founder being involved in that number.

Speaker 5 00:27:25  Right. Okay.

Speaker 2 00:27:26  So this is of what we told the investors. Yeah, a year ago, 18 months ago. So we we have that we have to hit 5 million. And you reverse engineer from that.

Speaker 5 00:27:37  That’s right. And then everyone’s kind of figuring out the magic numbers that’s going to take to reverse engineer that number. And, and it’s a little bit of this and it’s a little bit of like, well if we well, if we pull this lever and we just all of a sudden change our close rate from 15% to 33%, we can do it right. And it’s like.

Speaker 2 00:27:59  Easy, easy numbers until they tell you what you want to hear.

Speaker 5 00:28:02  It’s magic math and nobody knows how to make it happen. We just know how it looks on paper. And that is just a fast way to to to die. Right. And so if you’re not thinking about.

Speaker 2 00:28:15  Inside the revenue department, someone does that. It’s handed over to a sales leader. That translates to quotas and burdens on salespeople, right? What does that look like and feel like in the organization when that’s that top down forecast that’s unrealistic is tried to be implemented.

Speaker 2 00:28:30  What do you what do you see.

Speaker 5 00:28:31  It looks like looks it looks like a CRO or head of sales who’s head spinning going where did this number come from. How am I going to sell this to my team? There’s a lack of belief there immediately, already going into having to get the team to believe in that it comes to a team then doesn’t understand where these numbers are coming from, but it also results in what you commonly see is and I often think why like the statistic is about 45. And that number is going down, by the way, 45 to 50% of sellers are actually hitting their number. Right. And so when you’re operating a revenue org off of a 40% attainment, like there’s no predictability. And then what it also results into is, well, we’re just you know, we came up with a magic number. We were throwing warm bodies at the at the quota. And so all of a sudden you’ve got a sales org that’s, that has grown way too fast and without fail, every time 9 to 12 months down the road, we’re facing a really painful layoff.

Speaker 5 00:29:24  That’s what it feels like. And it sucks.

Speaker 2 00:29:28  That’s a that’s a great one I and that that’s really good description of what it’s like inside. And that becomes a vicious cycle. Right. Then you start all over again. All right. Right. I think you’re so far you’re number one right there. Let’s go. Okay. Adam, you might have a go to market gap if.

Speaker 3 00:29:45  You’re consistently getting ghosted by your prospects.

Speaker 2 00:29:48  Oh, my God, I like that one. That’s that’s that’s a big ding ding ding ding ding. It’s got to be up there in the top three. Ghosted that is that is the thing you hear. You know that so difficult because you don’t know what’s going on. And so you can still you can still maintain a little bit of optimism that just drags things out. But you’re just you have no idea what’s going on. But but you.

Speaker 3 00:30:08  Can you though maintain optimism. So I was having this conversation with someone the other day when you are getting ghosted. And I was looking at someone’s deals in HubSpot and it was like, hey, Jake, I just want to follow up and see if XYZ is still of interest, you know, hey, Jake, we have this great offer.

Speaker 3 00:30:23  And like, I think my response was if we were still of interest, if we spoke to value, if we were addressing pain, if we had the right ICP, they would get back to us without us having to say to them, Hey Julian, still interested? I promise you, if I’m interested, I’m going to tell you, and this goes to and like Dale said, it starts with the right ICP. It goes to the right message, it goes to the right offer, and it goes to solving pain and providing value. If you’re not doing that and you’re getting ghosted, you have a go to market gap.

Speaker 2 00:30:53  Absolutely. And it is. It is so difficult, because you can’t you can’t point to point to things with without getting, getting real as you described. So okay. That’s that’s definitely at the top. Let’s go one more round. Dale. You might have a go to market gap if.

Speaker 4 00:31:08  If you’re losing customers faster than you can put them in the top of your funnel.

Speaker 4 00:31:13  So you have that’s a churn. Yeah. Churn happening. And you’re doing all this work on top of the funnel to get people sold. Go through the process, get them close clothes out, and then they’re either not seeing the value in the product or they are, what they sold is and what they’re being delivered, or they just can’t afford it anymore. They don’t see the actual business value to what we sold in the sales process. So you have a lot of people especially this has been happening more and more often since a lot of the economy shifted and growth at all costs kind of gone away. A lot of companies were shifting their revenue projection cycles, etc., from from the sales team to the CSS team. And so they’re like, okay, not only do you need to not let the customers leave, but you also have to like expand and upsell them because they’re already customers. They’re already talking to us. So there’s that shift in paradigm that has happened over the last 12 months. And I think it’s I think it’s a bit unfair for the CSS team because they haven’t been trained on how to sell.

Speaker 4 00:32:12  They haven’t been training like they’re trained more on like, how do we make sure the customer is using the product or service the way it was intended to be used versus like, okay, now we gotta upsell, cross-sell you into more usage of different part of the product, etc.. So, if you’re losing those customers out faster, you can put them in. You definitely have a go to market gap.

Speaker 2 00:32:35  Absolutely. And that’s that. That is a really tough position because that’s hard to recover from that. That’s the leaky bucket. Everyone’s heard about it. And that’s a that’s a really good one. I’m gonna put you up there in the top five for sure. All right Jake, you might have a go to market gap problem if.

Speaker 5 00:32:50  If you’re if you you know Adam talked about the pain. I would say even if you’re not clear on the root causes that you’re solving, like the root causes of the problems that you’re solving behind the pains for your clients. And what I mean by this is when you don’t truly understand the root cause of the problem behind those pains.

Speaker 5 00:33:09  It results in not having a clear ICP. It’s results in not understanding which persona is the true personas. Oftentimes, they see a lot of startups hyper focusing on the user persona in their messaging, and not realizing they need to actually be focusing on the buying persona that owns the root cause of the pain. Right? So this is a common issue that we see that like if if you can’t speak to those root causes and easily break it down into how we solve it, you’re just going to be chasing messaging for the next 12 to 18 months and not figuring out how we’re going to how we’re actually solving this.

Speaker 2 00:33:47  That’s that’s a huge one. Right. And I like the way you tied it. Messaging is okay. Clear. We’ll we’ll look at our messaging. But it has so many ties into your whole sales process. Right. As you just described, figuring out who you’re pitching to, what your process is, who you make sure that you you include in the process. That’s a great one. All right.

Speaker 2 00:34:06  Last, last one. Adam, you might have a go to market cap problem.

Speaker 3 00:34:10  If you’re unsure if you have the right people in the right seats related to your revenue roles, if you’re questioning whether that VP of sales, VP of marketing, Director of Sales based on performance, or based on providing the overall strategy for what you need to move the business forward? if you’re having deep questions about that and not getting the answers you need, you likely have a go to market gap.

Speaker 2 00:34:37  Absolutely. And that’s that paralysis. Right. And I’ve been there as a first time CEO. And it’s like, okay, can I just hire someone to make this problem go away? And that’s a common trap, isn’t it? Right. Yeah. I think, you know, you just you it’s the wish or the hope higher. You know, I’m going to hire that right person and they’re going to solve it all.

Speaker 4 00:34:55  Well, I think I think it extends past that a little bit because if we’re asking operational or technical people to hire, go to market experts, I think by definition that’s just a recipe for failure, because I don’t think they would ask me, Jake or Adam, to interview a developer that’s going to write Ruby on the rails to code their product.

Speaker 4 00:35:14  So I think we need to think about this in a different perspective. If we’re a CEO or a founder that is trying to hire either a sales and marketing team or you know and have hasn’t done it before, it doesn’t have that expertise. It can be very costly. And you could be burning runway for the next 6 to 12 months, because you don’t know if you’re hiring the right person.

Speaker 2 00:35:37  Exactly. You might even not. You might not even know the right language and the questions to ask. Right. And I like your analogy, like trying to hire a CTO or VP of engineering when you, you, you don’t understand what Ruby on Rails are and what sprint planning and, and sales, sales development lifecycles are.

Speaker 3 00:35:55  Yeah. I’ve never even heard of Ruby on the rails until the other day, so that sounds sounds like a song from from the 70s.

Speaker 2 00:36:04  Exactly. So. And you know, and each department creates own language for good reasons, but but in an interview process, people can take advantage of that, right? Let me let me spout up a B buzzword compliant, throw out all the all the different, buzzwords of the day.

Speaker 2 00:36:18  And, you know, you’re a founder trying to juggle with that. So having an expert to help you with that. But even more important, like, you know, you’ve talked about the assessment, if you’ve done the assessment and you know what you’re looking for, right, you use that assessment to kind of program your next, next 90 days. Right. And so if you have that, you know, you at least have a starting point. But let’s let’s talk about the framework you guys laid out in your go to market cap, session the other day. So you have the assessment and actually know the assessments your first step. And then you have a four step process where you stabilize, you build a foundation. You kind of get the repeatability and scalability. Are those the four parts of your framework that you try to bring a company through?

Speaker 4 00:36:58  Yeah. Those are the four, phases of the framework. the biggest question is where do you fall in all of those phases? So what we noticed, and one of the reasons why we built this framework was when we went into a customer, they always want repeatability or scalability, like that’s where their mind goes.

Speaker 4 00:37:16  And so of course, even after the audit and we’re going in and we’re doing some of the work, they’re like, but in the past they did it this way. And I called 300 people a day and I was able to get meetings and like, so they go through this process, but they didn’t realize, for example, they were calling SMB customers and now they want to go to enterprise. So they’re they’re making that shift into a different market segment. And you have you potentially have the wrong people in the wrong seat. People are ghosting you. You can’t close deals like all the things we just talked about. So you’re really in this stabilization mode, like you’re in like how do we stabilize what we just had? Do we get to hire new people? Do we have to do different onboarding? Do we need new messaging. Like what is the actual problem. So we we a majority of the customers that we work with, what we see is we’re, we’re starting in that stabilization phase. And they want to just skip it and go to repeatability.

Speaker 4 00:38:08  And that’s a recipe for disaster.

Speaker 2 00:38:12  yeah. So so how do you determine what the the key moves are in that stabilization phase. I mean, you describe you’ve you’ve described various levels of disarray. I’m sure you’ve walked into all sorts of them, but you can’t fix everything. So how do you determine, like what key pillars you’re going to build, that you can actually create some traction and and signs of progress on.

Speaker 4 00:38:36  Go ahead Adam you can take that one.

Speaker 3 00:38:39  Yeah I think for us it’s we get down to the basics and stabilization. Like we really start looking at the ICP, the persona. We’re going to go through all of your deals and really try to understand, like are these deals that are closing? Do they all look alike? Are we selling to the same people? Are we selling the same product? Are we selling at the same price? Our people say, are we tracking why people buy all giving the same answer? Conversely, are we tracking why people buy and or why people don’t buy? Excuse me? And are they all giving the same answer? Is that value prop resonating? It’s getting really deep and understanding who we’re selling to, how we’re selling it.

Speaker 3 00:39:20  Is that messaging running across while also making sure that we’re looking at the internal team? and that we have the right people in the right place.

Speaker 2 00:39:31  I know, Jake, you mentioned like a second level layer there. You said, hey, not only do we need to understand the messaging, but but you kind of went deeper and said, do we really understand the root cause of the problem? So a good messaging is to really just identify the problem. But now you’re saying that might not even be enough there. You have to really understand the root cause of the problem. Expand on that.

Speaker 5 00:39:53  Yeah. Because if you understand the root cause of the problem, the the the like, the framework for solving that actually becomes a simple math like conversation. It actually, becomes an equation because if you understand the current state of the business caused by that root cause. and you understand where they want to go. The future state then, like, you can really break down the the revenue gap that it takes to get there.

Speaker 5 00:40:21  And what that breaks down to is figuring out what that what the root cause is behind the issues and the, I guess, the symptoms of what they’re experiencing. So we can go solve for that specifically. And and that’s what like when you do that, that’s what helps sellers actually start what I would call Dollar Rising. The problem. Right. But if you don’t understand what the root causes of those problems and you’re focusing on pain, then you it becomes a lot harder to quantify or dollar rise that pain. And then you can’t drag your buyers through the glass when it comes to helping them understand the impact that’s having on the business.

Speaker 2 00:40:58  So really understanding the problem you’re solving for you can you can you can quantify it with ROI and dollars and be sharper on getting the person who’s experienced it or has the authority to fix it. right?

Speaker 5 00:41:10  Absolutely, absolutely.

Speaker 2 00:41:13  All right. So you’ve gone through the assessment. You’ve picked a couple things to stabilise. obviously once you’ve done that do you typically get some you know, what’s the what’s the progression to the next stage of foundation or repeatability? Yeah.

Speaker 2 00:41:31  When you say, okay, we’ve actually proven that we’ve got a couple of those things and now we can start getting to repeatability and scale. What are you looking for that that gives you the trigger to the next next gate.

Speaker 4 00:41:40  So from stabilization I think it’s a bit of momentum. Like are you getting momentum. Are you getting our deals moving through the funnel? are we getting stuck at like where are we getting stuck? You know, we’ve done an evaluation of the team. you know, we do think we have some moderate people in there, you see. and we can, you know, move forward with this team. We have a Elise’s sketch or outline of what the process looks like. Many times we go into, Places in the CRM is a mess. Like they think they have a top of funnel problem and they need more leads generated. But the reality is, like their HubSpot or their Salesforce is completely messed up because it was built out wrong and they have leads that they haven’t followed up on.

Speaker 4 00:42:23  So, it’s just untangling some of that, that tangle and seeing the momentum happening. And then once you get into, you know, are you doing sales one on one stuff, sending recaps, getting alignment on the deal, sending out mutual action or joint engagement plans, like, are you doing sales 101 stuff like sometimes in my mind I think of stabilization as like college courses, like I’m in 101 and 201. Like, can I do the one on one and 201? And then once I kind of graduate from the one on one to 2 or 1, I can move on to like 301, which would be like foundation building, making sure that house is stable on that foundation. to start building out the real sales process that we want to put into the CRM, we want to, you know, start hiring that next salesperson. Maybe not 2 or 3, but we want to hire one and make sure that everything we were stabilizing. Right. Since. Yeah. Does it really make sense? Let me let.

Speaker 2 00:43:19  Me back you up. So so you talked about some basic 101 tactics, right? Which, you know, the first one is, is what what your parents taught you send a thank you letter. Right. Basics. Right. So that is really basics. But you you introduced this concept of a joint engagement plan. And you know, I’ve been around a number of sales organizations and that that feels like it’s it’s pretty interesting and and not necessarily a foundationally understood in this space. Why don’t you walk us through this, this jump, as you call it? What is it? Why does it make sense? And how many people you think are using it today? And what’s the difference between not using it and using it?

Speaker 4 00:43:54  Yeah. I got this from just my carrying a bag days. And what I found most helpful, we all become in the sales world, the sales concierge. And we don’t really want to become that sales concierge. We want to make sure that we the sales process or the buying process, which are one the same but different.

Speaker 4 00:44:12  We have the sales process, the buying, the buyer’s buying process. And so we’re going through this together. And so we each have responsibilities through this this process. And so our responsibilities are getting new information. Make sure we’re answering questions. Your responsibility is like how are you going to buy this thing. Does it make sense. Do we have a value. What’s the business. You know, what’s the the ROI on it. And we just need to keep each other accountable. So the joint engagement plan is or the mutual action plan, which people, some people call it, is just making sure that we’re keeping each other accountable, because at some point we want to derive value for the customer, and we want to make sure that we’re delivering that value. And that is I’m going to spend $100,000, and I’m expecting 350, $400,000 in ROI. How do I really get there and when am I going to get there? The customer doesn’t even realize that they have to get there.

Speaker 3 00:45:03  And piggyback piggybacking off that, when you look at the the buyers process because there’s not enough sellers, Julian, as you know, that map the sales process to the buyers process.

Speaker 3 00:45:14  Right. You go in Salesforce or HubSpot and you you have all these ridiculous stages that are really just actions that take place and they don’t like, align with where the buyer is meeting.

Speaker 2 00:45:25  Right?

Speaker 3 00:45:26  Right, right. First meeting. Yeah. We were to say that. Hey, Jake, where are you in your buying process? Oh, I’m going to have a first meeting with Adam. Like, I probably got what Jake is going to say. Yeah, but oftentimes what we see is sellers don’t truly know what’s needed to close a deal. Like, we we know that the customer is looking at X software. When do they want to go live? To go live? When do they need to have a contract signed by to get a contract? When does it need to go to legal? How long does legal take? What is your red line process? Who else needs to be involved in the product? How have you purchased software or services like this before all of these things that you could use to build out this joint engagement plan, so that it’s very clear, you’ve established with your prospect the critical event that is causing me to look at this product as X, I need to solve it by Y.

Speaker 3 00:46:20  Great. Now let’s work backwards of everything we need to do so I can make you look really good Julian, in front of your team so that you get the solved by Y. And we get it implemented by Z to make you look like a rock star. Not enough sellers take the time to look at a deal holistically and work with their customers versus, hey, Dale, okay, we’re going to sign you by October 21st. October 1st. Here’s the contract. Well, sorry, Dale, it takes, you know, our legal process. They’re on an eight week, nine week backlog. Why didn’t you know this to start with?

Speaker 2 00:46:50  So that seems like almost too logical, right? and it feels like you’re going to run into the conflict of of trust, right? And particularly if you’re multiple vendors. right? You know, of course, I want as a seller for us to engage in a joint engagement plan and a commitment to close. But as a buyer, I might be still holding you off at arm’s length.

Speaker 2 00:47:13  I’m not sure you’re my vendor yet, or I’m not sure we’re going to get the right price yet. And so how do you handle that? And maybe sell the joint engagement plan process, as mutually beneficial as opposed to kind of a lock in trap?

Speaker 5 00:47:27  Well, here’s the here’s the interesting thing on that is even worse than sellers not knowing the process, because you could even you could even argue that a lot of sellers know the process. They just haven’t codified it before. And so, you know, putting this together allows them to go, oh, okay, I don’t have to shoot from the hip anymore. I know, I know, generally like this makes sense. But now I have a blueprint right. Or framework that to help follow. And then when things are codified, they can do it over and over and over again. That’s part of repeatability. But what what I tell sellers all the time is it’s actually beyond the you the bigger problem and why you got to get so damn good at this is because your buyers don’t know how to buy.

Speaker 5 00:48:06  I’m going to say that again, like buyers don’t know how to buy. We’re not dealing with people.

Speaker 2 00:48:09  Who’ve been in that spot for ten, 15 years. They’re probably, you know, average ten years of two. Right.

Speaker 5 00:48:15  Right. And so either they’ve never gone through a procurement process on their own before inside of the business, or they’ve never they’ve never led a purchasing process, a procurement process themselves, or they’re just not really sure how to run the process internally. And so a big piece of this and how to do what you just said is like this, this kind of aligned agreement on this is to set and establish with the buyer. Well, how do you normally go through this process? Right. What is your what is your procurement process look like and what are the next steps involved in this. And and and that allows the seller to actually analyze. Does this buyer actually know the steps they’re going to be required or involved in this process. And then because you’ve been doing it for so long, a good seller will say, well, typically what we you know, if we’re able to align on these things on this call today, next steps would look like this.

Speaker 5 00:49:02  And what we need to do is actually get a more technical deep dive with with your team on this call so that we can analyze if, if we can meet your future requirements. Or typically next steps look like, having a pricing conversation. And, and that will allow you and the buyer to start moving from a buyer seller relationship into a partner conversation. And when you start looking at it through a partnership lens and you map it out together, like as Adam laid it out, like, let’s start with the end in mind and work our way back. And you joint, you build this joint plan. Then you find yourselves in conversations with buyers where you’re not just checking in or you’re not just following up, but you’re you’re confirming with them, hey, we’re working towards this goal together and we’re missing some of these deadlines. Is this is this still a deadline that we’re going to meet together? Is this still priority, or what do we need to do to make sure that we get there together? Right.

Speaker 5 00:49:53  It it it changes the relationship.

Speaker 3 00:49:57  And part of it is where, where do you identify that your vendor of choice. Like we all, we all know that you don’t walk in. I was just having this conversation the other day. Like, very rarely are you the only people that are being looked at, right. Very, very, very rarely. And if you think you are and you’re banking your sales process that no one’s looking at competition, you’re going to be blindsided at the end. Where do we bake in in your buying process when you identify vendor of choice? And I think it’s okay to acknowledge that, right?

Speaker 2 00:50:24  I think bringing that up and saying, whenever you’re ready, take some of the awkwardness out of that. All right, guys, let’s let’s talk about some of the consistent mistakes or lessons that you guys see that people can take away from it. I don’t know if it could be a family feud, but we talked about a couple of them. What are some of the common mistakes and repeatable mistakes that you’re able to provide some some lessons for that you see across your engagements and your experience.

Speaker 4 00:50:49  Jake. And start come on Jake, you got this.

Speaker 5 00:50:53  There’s like, where do we start? Is the question like which one.

Speaker 2 00:50:57  Rank it in the notes.

Speaker 5 00:50:59  All right. So common mistakes. one of the big ones is, we often, we often see that when, when these when these, like, frameworks and these blueprints haven’t been established and, helped sellers, like, identify how to run their process. It’s a wild, wild west on the sales floor, and every rep is running their own process, every reps running their own approach, and every rep saying something different when they’re on the phone. And so, there’s just there’s no there’s no clear way to repeat what we’re doing because it actually hasn’t been captured and we haven’t captured it and we haven’t measured it. We can’t scale it.

Speaker 2 00:51:41  So you’re saying there’s there’s lack of a, an official, consistent process that you can utilize. Everyone’s doing their own thing. And is that something you guys come in and help build a consistent process that you thousand percent?

Speaker 5 00:51:54  That’s that’s is what we do.

Speaker 2 00:51:56  Playbooks. Playbooks. Stages. Processes. Tools. Right. Hiring. Hiring. Yeah. It’s a complex set of things, but. But if everyone’s doing their own thing, they probably don’t have a standardized good one that they trust. And that’s the symptom. Okay. So that’s that’s a good one, Adam. A consistent, repeatable mistake that you see that you guys, you know, work on quite often to fix.

Speaker 3 00:52:19  Oh my God. having hired a full time head of sales or VP of sales too early, thinking that because they helped tweak some things at a previous company that they’re going to be able to build your go to market at your company.

Speaker 2 00:52:33  Yeah. Why is that so hard? they hire that person too early. Is is it just is it too much for one person? Is it that they don’t come in scoping it the right way and they’re going to need to have bring in a lot more resources to fix this problem?

Speaker 6 00:52:47  Yeah. The root.

Speaker 2 00:52:48  Cause of that, that being a mistake.

Speaker 3 00:52:49  I think it’s founders want to exit founder led sales earlier than they should. they want to hire someone who is the sales expert who’s going to come in and like, if I hire Jake, he’s he’s a great VP of sales or CRO, and he’s just going to come in and close some deals. But there’s been no repeatability. There’s been no process that’s been built. The team has been mismatched. You’ve had a couple of shows that have lasted six months, two months, four months, and you have nothing documented. So you hire this head of sales and it’s like, Julian, you do it, figure it out. and one of the things that I learned relatively early in my career is building from the ground up is very different than tweaking and a VP of sales. When there is process in place, clearly documented ICP, clearly documented value prop, demonstrated repeatability of why deals are closing, how deals are closing, pricing and packaging. It’s a lot easier to make those little tweaks if you’re a VP of sales who’s been at a big company and later stage.

Speaker 2 00:53:53  Company, you’ve got.

Speaker 3 00:53:54  Yeah. And most founders want to hire like the the Facebook VP of sales or sales.

Speaker 6 00:53:58  Brands who.

Speaker 3 00:53:59  Have no business working at a startup. and it fails. And that’s why we’re so bullish on whether it be us preferably or someone else. Use go to market. Fractional executives use experts who have built before to help you lay that foundation. Before you go, spend two, three, $400,000 on someone that is going to cost you 6 to 12 months in time, and an awful and.

Speaker 2 00:54:25  The potential cost of having to redo it, which could be the death spiral in a tightly funded startup. Right?

Speaker 3 00:54:31  100%.

Speaker 2 00:54:32  Okay, Jake, consistent lesson that you guys run into a consistent, repeatable mistake.

Speaker 5 00:54:38  I you want to skip?

Speaker 6 00:54:40  I’m sorry. Excuse me?

Speaker 5 00:54:42  I know it’s.

Speaker 6 00:54:44  There’s.

Speaker 5 00:54:44  More value if I.

Speaker 6 00:54:45  I didn’t mean to put you on.

Speaker 4 00:54:48  You can take my turn.

Speaker 5 00:54:50  I would say letting Dale give advice.

Speaker 6 00:54:52  That I would say.

Speaker 4 00:54:55  I would say I asked this so many founders or revenue leaders or CEOs not being able to articulate their their value proposition to the market in under ten, 15 words.

Speaker 4 00:55:06  It’s some dreary, like they just go on and on and then they can’t really map it to the business value that is that all of their competitors can’t say or execute on. So it’s a good exercise. It sounds super simple, but it’s a very hard exercise. And I think it’s just the the ability to do that in a consistent basis, because then you can actually onboard and train your sales team to do the same thing. If you go on and on, like a three paragraph sentence on where you’re where you are different or where your value lies, I can guarantee your customer is like checked out in the first five words. So super concise and easy to articulate.

Speaker 2 00:55:50  Awesome, awesome. All right, we’re gonna do one more lightning round, which is if you have, you know, one piece of advice to to a founder or CEO who’s finds himself somewhere in this, in this challenging cycle, you know, what would it be, Jake?

Speaker 5 00:56:06  Do you not hire a VP of sales too early? Don’t jump the gun there.

Speaker 5 00:56:10  It’s it is way too tempting. It’s way too easy to pass the buck. and it’s perhaps the fastest way to overlook the the symptoms of what are truly like the problems of your business at the current state. So do not hire a leader before you’re ready for that. That leader.

Speaker 2 00:56:32  That’s good advice, Adam.

Speaker 3 00:56:34  Document, document, document. Everything has to be documented. It cannot live in your head. I tell people all the time, I don’t care if it’s an Apple Notes Google Drive text. Like I don’t care where you document it, but you gotta get it down.

Speaker 2 00:56:48  Document what’s working.

Speaker 3 00:56:51  And what’s not and.

Speaker 2 00:56:52  What’s lost is.

Speaker 3 00:56:52  Just as important.

Speaker 2 00:56:54  Okay, excellent. Good stuff. Dale. You can do one thing. You’re stuck in this quagmire, in the gap. What’s one thing you can do tomorrow?

Speaker 4 00:57:05  get your pick and shovel out and start continuing to sell on your own. And not only to your, to your network, but people you don’t know. So a lot of times we go into places and they’ve exhausted their network or they’ve been successful, you know, selling to 10 to 20 of the people they know, but they haven’t tried to go outside of that comfort zone.

Speaker 4 00:57:27  And so just go outside your comfort zone and start cold calling or start cold emailing and trying to get that, that, that process down. So as you’re hiring people and you see how the process is going, you can’t just say, well, if you call 100 people, then you should be getting X number of leads and you should like, actually do the work so that you can have empathy, empathy and sympathy through that process. When you’re asking people to do things that you don’t, you haven’t done.

Speaker 6 00:57:54  Right.

Speaker 2 00:57:55  You know, do it yourself so you can teach others to do it. So so, you know, sticking that grind founder led sales. That’s great stuff. Okay. if if, obviously the other one you could do is you can hire some experts, you can find you guys at Revenue reimagined.com. You’ve got the podcast, the Revenue Reimagined, podcast. And then if you want to do a little studying before that, you guys have any books you might recommend, that people can kind of go to school on and at least learn the language so they can call you and feel like they they’re speaking the language of, revenue excellence.

Speaker 5 00:58:29  You know, one like, I think one book that every founder should just pick up and read as early as possible, just understand the mechanics and basic functions of a sales organization. Is Mark Wahlberg’s book The Sales Acceleration Formula that that is like a must read book for every founder and every early stage revenue team to every scaled, mature revenue team.

Speaker 2 00:58:53  I like that one. That’s a great idea. Adam, do you have a recommendation?

Speaker 3 00:58:57  Yeah, I mean, there there’s there’s a few back here.

Speaker 6 00:59:00  That’s right.

Speaker 3 00:59:01  If I’m going to pick one, one of my favorites right now is what a unicorn knows. you know, if you’re really going to look at how to scale, and what you need to do to get where you want to go and going about it the right way. it’s one of my local favorites. One of my recent favorites.

Speaker 2 00:59:17  What a unicorn knows. I like that. All right, Dale, what would you recommend?

Speaker 4 00:59:22  Yeah, I think I’ll go off. off the beaten path here a little bit and talk about the, extreme ownership from Jocko Willing.

Speaker 4 00:59:32  that’s just like, every day making sure that you as a founder, CEO, revenue leader, you’re taking that accountability, for the process. And even if some of the product challenges are happening or some of the team challenges are happening like it all rolls back into you and it starts from the top. So Extreme Ownership is a great book.

Speaker 2 00:59:53  Awesome. Well, hey guys, this was a great conversation. I know that a lot. A lot of our, community and listeners are going to be excited to hear about it because unfortunately, a lot of people do have revenue challenges. And it’s exciting to to see that you guys are solving them with precision and really, hitting your stride there. People can find you at Revenue reimagined.com, and we hope to see you at the Growth Elevated Conference. We can have some great conversations.

Speaker 1 01:00:20  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.

Speaker 1 01:00:31  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.

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  Hello everybody. 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. Past guests have included CEOs and CXOs of great companies like Work Front, CHG, Healthcare 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 practices and learnings in an effort to become better leaders. We do this through educational programs like this podcast, as well as our annual Tech and Ski summit, which happens to take place in beautiful Park City, Utah. So if you’re a skier and you like talking about business and growth in tech, check us out at Growth Elevated.

Speaker 2 00:01:17  Com. Today I’m I’m excited to bring bring to the podcast David Darmstandler. David is the co CEO and co-founder of Datapath a managed IT and managed security company. That Datapath is is headquartered in North Carolina, Northern California, and it has about 80 team members throughout the US and has made the Inc fastest growth company list eight times. David lives in Park City, Utah with his wife and four awesome kids, and that’s where I had the chance to meet up with them. Please welcome David David Stadler to our podcast.

Speaker 3 00:01:57  Hi, David.

Speaker 4 00:01:59  Hey. Thanks, Julie. Thanks for having me.

Speaker 2 00:02:02  Hey. I’m excited to talk to you today. So you’ve been. You’ve been, You’ve been an entrepreneur. and a, tech leader for over 20 years at Datapath.

Speaker 4 00:02:14  I have. Yeah. No, since 2005. So it seems like it’s going fast. Go ahead.

Speaker 2 00:02:21  Tell us a little bit about what Datapath does.

Speaker 4 00:02:25  Yeah, I mean, there’s some it up, depths. You know, David has managed it service providers.

Speaker 4 00:02:30  So we manage infrastructure and security for large organizations, for government, education, finance. and, you know, most recently over the last couple of years, gotten into health care.

Speaker 2 00:02:41  So and so what’s, what’s the typical profile of a company? that would be your customer. And walk me through their problem and their alternatives and how they find Datapath and why they choose Datapath.

Speaker 4 00:02:56  Yeah, absolutely. You know, for us, you know, over the years, it’s, you know, we’ve transitioned as far as, you know, the type of customer kind of gone up the stack. the customers we serve now, you know, have pretty good size IT departments usually, you know, kind of in that range of ten to, you know, sometimes upwards of 50 plus people in there on their IT team. Okay. So we come in and just kind of help to, to supplement them. and we manage, you know, essentially their private cloud forum, their, you know, their infrastructure and we do the monitoring and response to security incidents.

Speaker 4 00:03:29  you know, in the finance space, that kind of ranges from, you know, probably somewhere around, you know, 100 team members upwards to, you know, thousands. and then, you know, kind of government education space, you can go as high as 20, 30,000 users. so it’s definitely.

Speaker 2 00:03:44  Employees that are relying on the IT infrastructure that you’re helping to. Yeah. That’s all the users. Right.

Speaker 4 00:03:49  So we’re yeah we’re okay.

Speaker 2 00:03:50  So you’re working with enterprise customers that you know they’ve got enough it needs. They’ve already got ten, 20, 30 people working, but they need more help. And you help them scale more efficiently by supplementing their team. Or do you sometimes take over the whole IT infrastructure?

Speaker 4 00:04:06  Yeah, we generally are kind of taking over the infrastructure for them and working with their team directly, which is worked out great. So we kind of come in and just kind of become a part of their team. And really some of the advantages, you know, really for the departments is they’re getting a series of tools, they’re getting the AI, the, you know, a lot of the back end work that we’ve done over the years and the last 20 years to make things more efficient.

Speaker 4 00:04:30  So if you’re large, say you have 20,000 users and you’ve got, you know, say 30 sites, different, you know, locations, you know, your infrastructure gets very complex fast, right? So you need an organization that understands, like how to manage that, how to help you see what’s coming, how to plan, how to be more strategic in the way you support it. and ultimately be there as your Top Gun when you know something goes awry or goes, goes wrong. Right. So, you know, insecurity is obviously always changing, right? So that that kind of came naturally over the last decade that we developed, you know, security services because it became such a large issue for customers. so, yeah, and, you know, a lot of our we’ve actually scaled with, you know, startups as well. So we’ve had startups that came in, they had, you know, 10 or 20 employees, and we’ve seen them all the way through to a thousand employees, you know, kind of managing their cloud infrastructure and stuff for managing the security side forum.

Speaker 4 00:05:20  So it’s been, you know, it’s fun ride. We prefer the growth side. We love the idea of working with entrepreneurs and working with organizations that are growing. it’s a lot more exciting organizations that are stagnant or, you know, kind of just sitting there growing.

Speaker 2 00:05:32  Then their need for your service is going to grow. Right? And so that’s good for business. And and then if you can actually, you know, make it a smooth path for the growth, make sure that they’re not going to run into any walls. That’s got to give a CEO a lot of confidence saying, great, I know I can scale, you know, infinitely with your help, that’s got a that’s got to be a great reassurance.

Speaker 4 00:05:52  Oh, absolutely. Yeah. I mean, when you’re it fails, your customers lose faith in you. Right? So if you’re down for a day or two days or sometimes a week, we’ve seen it all, being in 20 years, you know, it’s it’s it’s pretty easy for, for organizations to really take a, take a hit from a branding perspective, too, right? People lose faith in the product.

Speaker 4 00:06:09  So, yeah. So our job, you know, it’s one of one of those one of those services you provide that, hearing less is better, right? So, yeah, it’s like.

Speaker 2 00:06:18  The offensive line. I coach the offensive line at high school, and, you know, you don’t want to hear about the offensive line on the loudspeaker. And, you know, until after the game and what a great job they did. But not during the game. It means something wrong.

Speaker 4 00:06:29  Absolutely. So but yeah, I mean, we and we continue to innovate and develop products. And, you know, AI is a big part of that right? At this point. You know, what it can do for customers. So we’ll see where that takes us as well.

Speaker 2 00:06:40  Let’s go back and trace the path. So you started in 2005. You started from scratch. You got.

Speaker 4 00:06:47  Started.

Speaker 2 00:06:48  we run.

Speaker 4 00:06:49  For And $57. Two founders, rented a 100 square foot office with a mini fridge and stacked servers on the top of it to, you know, to host stuff for our customers.

Speaker 4 00:07:02  So, yeah, it was, it was definitely about as bad as, garage like, as you can get.

Speaker 2 00:07:08  And now you’re you’re a $30 million plus business. You have how many employees?

Speaker 4 00:07:13  80.

Speaker 2 00:07:14  Okay, so I want to I want to I want to unpack how you scaled, because I think something you told me earlier is a lot of companies that in your, in your field don’t really get that large. Right. And they kind of hit a ceiling and, and you’ve, you figured out how to continue to keep growing and, and get to the size you are. And you punch through some scale barriers. And I think that’s something that all, entrepreneurial businesses face. And so that’s a great theme for us to talk, talk about today. But, you know, tell us a little bit about the journey. What was it like in the early days and then, and then, you know, when did you gotta have to start changing? Changing how you were growing the business. When you’re when you kind of realize that that scale is not not something you just do more of the same of.

Speaker 4 00:07:57  Yeah. No, absolutely. I, you know, the beginning was, it was a grind. I mean, we, I, you know, I’d come off some other companies I’ve been a part of and another one that I had started. So I knew the grind of, you know, getting the company off the ground. But this was a very different kind of company. The one that, you know, I’d worked on before was, was more in the technology space and more of a SaaS type product. So, you know, it went into the service based, you know, managed services. And, it it was a grind. I mean, it was, you know, physical work at points. It was, you know, going out and finding.

Speaker 2 00:08:31  Customers of carrying servers and, you know, installing racks. I mean, a little bit like, Silicon Valley with the the servers in the truck. You haven’t one of those moments, you know.

Speaker 4 00:08:40  Yeah. I mean, one of the first, I think the first or second big project and customer we landed was, you know, we land this big, we were manufacturing Fashion first.

Speaker 4 00:08:50  and, we manage this, you know, this big rock quarry, that, you know, grinded up limestone and they needed to take the whole campus wireless, which was basically, like, impossible at the time. But we found a way to design it and make it work, and and, you know, we were hanging off the side of cliffs, you know, running wire and, you know, my partner and I was just, you know, but, you know, it was brought in good revenue. And, we were laughing, having pictures and pictures.

Speaker 2 00:09:15  From that engagement, like in your company Almanac.

Speaker 4 00:09:17  I, I think we probably do. so, yeah, it was definitely a, you know, those kinds of situations were on the regular. You know, one of our first customers we got was the publicly traded company, and they were sending us all over the Western United States. you know, and you, you know, just just the just the constant grind of just traveling, moving, managing customers, trying to manage service, trying to manage billing, all with just a super small team.

Speaker 4 00:09:42  And so thankfully, at the gate, we landed pretty large contracts that allowed us to staff up and, you know, get some of those rules fulfilled, so that we could focus on some of our core areas of strength as individuals. You know, in the in the case of sales, as an example. But, yeah, it was definitely, it’s definitely grind out the gate to get this off the ground.

Speaker 2 00:10:01  So yeah. So but but you obviously were successful. You, you helped those early customers, you innovated you, you, you did the hard work of of hauling equipment like, you, like, you know, and everything that’s needed as an entrepreneur in the earlier stage. When did you when do you feel like things changed and you kind of looked and said, all right, we, you know, we want to be bigger than the, the average competitor. And, and, you know, doing the same type of thing is not going to work like one plus one. We can’t just scale linearly with a change.

Speaker 2 00:10:32  The way we, we run this business to, to get bigger. When did you hit that ceiling.

Speaker 4 00:10:38  Yeah. You know, probably kind of around that five, $5 million mark in revenue. we’re starting to land some larger contracts, you know, in $5 million in our space is, you know, you’re still a pretty good size organization with such a fragmented industry, you know, so these guys get to, you know, a lot of the entrepreneurs in our space get to ten or 15 or 20 employees and feel like they’ve really arrived. but you do you reach some some, you know, some major kind of stepping points. You got to make some big investments you have to make in the right people, to get you from where you are currently to where you want to go. which is difficult for a lot of entrepreneurs to do. you know, the biggest one, you know, I think we’ve discussed it’s just that releasing control. Right. And, and so, you know, you you’ve got to you’ve got to find those capable people.

Speaker 4 00:11:27  You have to raise them up. And, so that $5 million mark was, was tough. I mean, it was kind of a plateau for a little bit. And we had to kind of figure out, you know, how do we grow, you know, both organically and organically. In our case, you know, we we decided that we really wanted to go for it and go all in. And so, you know, part of that was, you know, bringing the right people and also making some large investments and, you know, some acquisitions and things like that to scale. So.

Speaker 2 00:11:54  Now when you were at that stage, did you have like the evidence or the confidence that said, that said, all right, we know we can grow the revenue based on either customers or backlog. So you kind of did you feel like the market opportunity was there, and did you feel like you had maybe an organizational or a leadership challenge to kind of get there, or was it a little bit of both? You kind of had to take the step and see if the revenue would come.

Speaker 2 00:12:16  How did you have both challenges, or was one kind of feeling relatively comfortable at that point?

Speaker 4 00:12:23  Yeah, you know, we knew the demand was there. I think what we realized was that our, our team just wasn’t ready for the growth. And the people that we had in those positions had come up, you know, essentially through the realms of it or security. and so they were oftentimes very analytical. And, you know, they overthought things. Right? So as opposed to being strategic. and really deciding, hey, what needs to kind of what do we need to shed in order to, to really scale? and so at that point, you know, kind of the analogy I remember having in my head was kind of a race car analogy, right? Like, okay, well, if you want something to go faster, you can’t keep adding more weight. you can’t be adding more stuff that you’re going to do, you know, like when you watch some of these, especially the newer ones that come out, these documentaries on race cars, it’s like they’re constantly, you know, losing weight wherever they can.

Speaker 4 00:13:14  They’re they’re thinning out like things that don’t make sense in order to kind of really get that speed and performance they need. And so when it comes to scale, we just, you know, looked at our business and went, okay, these couple areas can scale really well. And these things that we’re doing over here are actually, really not scalable there. And oftentimes what’s funny is those things are often what people think are the best part of their business, but they’re oftentimes where you’re not you’re getting the worst margins. they’re the messiest part of your business. They’re really difficult to scale because they’re, you know, they’re just they’re complex. They’re overly complex. So a lot of those things we decided to, if we were going to keep them for the sake of the customer to contract them out, which allowed us to scale out faster. We still got, you know, some margin off them. So.

Speaker 2 00:13:57  Yeah, it is. It definitely is. It requires a more efficient race car to to scale because you can kind of do the math.

Speaker 2 00:14:06  Right. I think there’s a theme here that I hear you saying like, look, people start businesses in areas they know, right? That’s the beauty of capitalism and the entrepreneurial entrepreneurship world that we live in. And what I see over and over again is you get people who are really good at it, for example, right, creating an IT company. Right. And then, you know, they may not have had experience to some of the other disciplines required to to scale businesses, whether it be finance or people leadership or, you know, HR, you name it. Right. And and so we see that and I talked to a lot of non-technical founders who maybe know an industry. And I talked to technical founders who really don’t know how to sell, or sales, founders who don’t know how to write great tech write. And so, you know that that’s probably where most people that’s the default stage. That’s where people find themselves. So how do you a first recognize that. And then B what do you do to kind of punch through and and get those other other skill sets, or educate yourself in a way that you can you can get through that, that barrier to scale.

Speaker 4 00:15:13  Yeah. So I mean, I know we chat a little bit about this. I think the thing that helped us the most in that kind of $5 million mark was, you know, bringing on a good coach that was referred over to us. and it scaled, you know, very a series of different companies. you know, he was doing it. He didn’t need the money. He was doing it more just to be, you know, it was kind of his service. He really enjoyed it. he’s still, you know, still in my life, great guy. One of the things that he has to do for a couple of years was track every 15 minutes of our day, which sounds tedious, but, you know, really wasn’t something that he he’d go over with us, but really, it was more eye opening for us to look at. So you would look at the end of your day or end of your week and you went, oh, man, I’m literally involved in everything.

Speaker 4 00:15:56  Like, sure.

Speaker 2 00:15:56  So that kind of gave you a start that there’s maybe a better way.

Speaker 4 00:16:01  Yeah. And am I that micromanager guy that I didn’t think I was and, and so when you, when you constantly kind of going back and forth with leaders or those you’re trying to develop and you’re, you’re, you’re not necessarily coaching them, you’re critiquing them on everything, then they start to double, you know, they’re they’ve got a lot of double think in their head around, you know, am I doing this the right way? They stop making decisions as fast. because they, you know, they they’ve got this person kind of peering over their shoulder all the time. And so when you get that really high level of talent in there, they’re just not going to put up with that. Right? So if you do go and hire somebody really, really good to say operations or service or finance or whatever, and you’re constantly just over their shoulder. they’ve got about.

Speaker 2 00:16:41  People, leadership and executive leadership and ability to scale teams.

Speaker 2 00:16:46  I want to get into the details and like, clearly that that that little charting exercise is details. But I mean, you said it pretty easily, but I’m guessing it wasn’t too easy to just to to get that coaching with you and your, your co-founder. Like, what was the was there a catalyst or was there something that kind of made you say, man, this is worth doing, right? because, you know, most people don’t. I think the default is not to go seek out and get help, because that, you know, that that implies that you need help. Right? And then you get that little conundrum, that founder conundrum of feeling like, you know, oh, yeah, I know what to do. Right. So let’s talk a little bit about like how you made the decision. Was it an easy one or was it something that you had to go a couple rounds with your founder and and how’d you get there.

Speaker 4 00:17:26  Oh no. Yeah. This was this was not an easy one.

Speaker 4 00:17:29  you know, I think a lot of it came from the fact that, you know, we weren’t we kind of hit this plateau. So it creates pressure and frustration. you know, in that plateau, you’re not hitting the numbers you want. You’re not hitting the profitability you want. You’re not generating the cash you’d like to. You know, I think the other thing is, you know, you’re losing good people because you frustrate them. Did you did you lose?

Speaker 2 00:17:52  Did you go through a couple cycles of trying to do it yourself and get people and it not working out?

Speaker 4 00:17:58  Yeah, absolutely. Yeah. and you know, I and I, you know, you know, in my, some of the best people I ever worked for kind of coming out of college, you know, one in particular that I really respected said, you know, in your life, you should always have somebody that’s mentoring you and you should be mentoring somebody. and so good advice. Yeah. I think it’s great.

Speaker 4 00:18:22  And I, you know, I’m still doing it to this day. And I, so, I mean, to have a coach meant a lot to me. Like, I, you know, had to be somebody I respected as somebody I trusted, had to be, you know, somebody that I could learn a lot from. And, you know, in this case, I did, and to this day, I, you know, obviously still have a really close relationship with this guy. And we serve on boards together and things like that. So he’s been a very impactful part of my life. and he’s not I.

Speaker 2 00:18:47  Want to write down that question. You should always have a mentor. You should always be mentoring someone else. Is that what you said or what? How did you say yeah, yeah.

Speaker 4 00:18:53  Yep. And so, and to this day I still do. So I’ve got mentors and I’ve, I, in fact, just yesterday just, you know, mentoring a young entrepreneur and there’s, there’s no fee to this or anything.

Speaker 4 00:19:04  I’m just I’m just helping this guy out that’s got a growing business.

Speaker 2 00:19:06  And it helps you learn to write when you see other businesses. Absolutely. You can do your pattern matching, right?

Speaker 4 00:19:12  Yeah. And, you know, at.

Speaker 2 00:19:13  The time was was your was your partner on board like the did you both come to the same, same realization or, you know, just walk us through like what what it was like, you know, taking the medicine and saying, okay, we’re gonna we’re gonna do something different.

Speaker 4 00:19:26  Yeah. I mean, my partner and I, we’ve been buddies since the third grade. So, you know, we have very different personalities, but we end up getting to the same place, which is what’s always been great about us. Right? So we might we might take two different roads to get there, but we’re going to end up in the same place. Our values have always matched up. And so, we just kind of talked about, you know, who would pick the coach type of coach we interviewed.

Speaker 4 00:19:49  Some people totally landed on this coach that we worked with through referral. and, you know, I think some of the things this coach said to me immediately that, you know, that were I think what really hooked me because, you know, I, I hadn’t used a business coach before. So, you know, one of the things he talked about was said, hey, you know, I yeah, ultimately.

Speaker 2 00:20:11  Mike. Right. Is this really is this really. Yeah. That a lot of people I think are a little self-conscious about it aren’t they.

Speaker 4 00:20:19  They are. Yeah they are. And you know, and you’re having to expose everything. Right? I mean that’s the biggest part, right. Like all the darkest parts. Right. All the stuff that.

Speaker 2 00:20:26  Yeah, the secrets that you know.

Speaker 4 00:20:28  Yeah. Like we’re talking about issue. Right. Like maybe the financials you don’t want to open because you know they’re going to be horrible. Right. and so, you know, one of the things you said is like, hey, my job is to, you know, obviously develop as a leader.

Speaker 4 00:20:41  But the other thing is, I’m going to save you lots of time and cost. so he’s like, I, I’m going to from wisdom and from my experience, you may you may have an idea or direction you’re going to go that I’ve already seen or been down. And so I’m going to tell you, you know, there’s probably an alternative that’s going to work much better and essentially, you know, provide a shortcut to getting you to the goal you want to be at. So I think that, is ultimately was very true. And still to this day, with the coaches that we work with, that they save us a tremendous amount of, potential catastrophes. But, you know, time sucks, right? Time waste.

Speaker 2 00:21:21  Money drives into a ditch if they don’t have some guidance. Right? Yeah.

Speaker 4 00:21:25  Yeah. Because even even.

Speaker 2 00:21:27  Even the great the greats that we all hear about in Silicon Valley, everyone’s had their examples.

Speaker 4 00:21:33  Well, yeah. And I think one of the things that I see entrepreneurs do that’s is probably one of the worst things they can do is to not have any level of accountability to.

Speaker 4 00:21:40  Right? I mean, and so when your people know that you are accountable to somebody, even if it’s just a coach, you know, it brings some relief to, you know, those people that are working with you. And one of the things we opened up was to allow our coaches to work one on one with our team members. as well. So to give them, you know, give them an outlet. Right. So if they want to chat about some things in a confidential manner and then they would, the coach would find a way to bring it to us in a way that, you know, obviously would what would be the way that’s positioned.

Speaker 2 00:22:10  Private companies, whether it’s a coach or even a board of directors. I know I talked to a lot of private companies and they say, why would we get a board? We don’t need to, man, that’s one of the things we’re grateful for. We don’t have to worry about that. And a lot of times I say, well, you know, it’s it’s it’s to have that accountability cycle and to help you win.

Speaker 2 00:22:27  It’s not like, you know, if you’re private, you own your company, you don’t need a board because you don’t have third party investors, but you might want to have that kind of accountability loop. Someone who’s there, who’s incentivized to help you score touchdowns and, and, and meet your objectives. Right?

Speaker 4 00:22:41  Absolutely. Yeah. You know, and that’s where I think advisory boards are, are great for that. I mean, they’re not fiduciary. They’re not going to tell you what to do. But there are a bunch of smart people. They’re going to kind of guide you in the right direction. They’re also gonna probably make connections for you and, and tell you when you’re out of bounds. And, so, yeah, I think it’s, Anyways, yeah, not to steer too far, but yeah, that, that that pivotal part helped us to realize that, you know, we had acted as the superstars. We were, you know, we we felt like we had to lift the whole company at all times and, and do the big things.

Speaker 4 00:23:12  And in reality, we need to build the engine for scale. And it’s very.

Speaker 2 00:23:16  Difficult to scale you. You clearly can’t just, you know, keep putting up, doing more and more of the same things with two founders, right? You know, two’s better than one, maybe. So you can get to, you know, that 5 or $6 million mark. But What was it you had to start doing differently to punch through that ceiling and get to scale?

Speaker 4 00:23:35  Yeah. You know, I, you know, number one was, which I you know, we talked about, you know, previously Joan was just, you know, one of the things I wish I was in earlier, which I, you know, I kind of started doing at that point was understanding finance and the metrics greater. Right. So the day we are in business. So this is not a, you know, this is not a, entertainment company or something where you just, you know, you you’re just having a good time or, you know, it’s a party.

Speaker 4 00:24:01  It’s like, you know, at the end of the day, metrics and dollars matter. And so when you find one of those.

Speaker 2 00:24:06  You let me know, right? Yeah.

Speaker 4 00:24:08  When you find entrepreneurs, just they oftentimes, they either ignore it or they expect someone else is managing it. But in reality, I’ve met a lot of entrepreneurs or people who’ve been in business, you know, say 20 or 30 years, and they still don’t understand how to read, you know, basic financial statements, or to understand the metrics that are important to encourage.

Speaker 2 00:24:27  You to to dig into that a little bit.

Speaker 4 00:24:29  He did. Yeah. And then I went and got, you know coaches in that space of finance. And ultimately I went and you know, did a degree for that reason. Right. Just because I want to educate myself, it was like.

Speaker 2 00:24:40  You got a degree while you were working. That’s impressive, I got it.

Speaker 4 00:24:43  I got an MBA. While I was, I was working with four kids.

Speaker 4 00:24:47  It was. Yeah. I would not recommend. I would not recommend it.

Speaker 2 00:24:50  And nights and weekends. MBA good for you.

Speaker 4 00:24:52  I would not recommend it. but I did, you know, you’ve seen it. I, I, we’ve talked about I, I’ve read countless books on finance. Some, some I would not recommend to anyone unless you want to get a good night’s sleep. Yeah, but there are some.

Speaker 2 00:25:05  Yeah. Late nights like that. Reading to help insomnia.

Speaker 4 00:25:07  There are. Yeah, there are some that are great. I, you know, I, I started reading a lot of publicly traded financial statements. I started to match my company up going, hey, well, if this company is.

Speaker 2 00:25:16  Just like when you can actually speak the language of public company stocks and see what they’re talking about on MSNBC and understanding it, right?

Speaker 4 00:25:23  Yeah. And you know, and and, you know, obviously we’re wanting to go raise money, particularly from banks. And so, you know, we have to be positioned well, right? Your financials have to make sense.

Speaker 4 00:25:31  you have to know them well. You have to be able to answer the questions in the moment. And you should be able to because you should know the weakest parts of your business. You should know the strongest parts of your business. And then you know, what comes to light is, hey, here’s where we actually make all the money. And it’s actually oftentimes what I found is it’s actually like our simplest part of our business, our easiest to sell and scale. but for whatever reason, we get attracted to these other shiny, you know, what even might want to add? A professor in college just said, you know, the shiny $20 bill, right? So you get distracted by these shiny $20 bills because it makes you feel good in the moment, or it’s a quick hit, or in our case, like somebody might go sell like a really large, you know, multimillion dollar project back then. But in reality, they were very thin margins on those large projects. So you didn’t have a lot of room for error, and then you had float time on the products.

Speaker 4 00:26:21  And so there was all this stuff that we just decided, like, you know, beyond that to like what builds enterprise value. Right. And so in our case it’s you know, it’s the RR. So really zeroing in on it.

Speaker 2 00:26:32  Knowing what the critical metric is really allows you to align as a leader. Right. And then you can share that internally and use that as a as your Northstar metric and make decisions based on the impact. Right?

Speaker 4 00:26:45  Yeah. And just stop lying to yourself. You know what I mean? Like, don’t like don’t lie to yourself. Don’t don’t preach fluff. And I mean, everyone knows in the day in their gut that, you know, maybe what’s being said isn’t right because it doesn’t even match up with what’s actually happening in the realm of financials. And then, you know, the things that are even worse is you find mistakes on where sales guys didn’t actually they you’ve been servicing a customer, but you hadn’t been billing them. I mean, there’s all kinds of it can go on forever, right? Like there’s, you know, lost revenue and there’s just so much stuff that you actually learn in entrepreneur.

Speaker 4 00:27:17  You go, okay, I know when I go and what it does is it prepares you to be able to to hire the right people. And I don’t just mean in finance, it’s in all areas of the business. Right? So when you can talk to an operations person that’s, you know, a fluent in finance enough to be able to manage operations, it gives you more confidence. Right. so that’s awesome.

Speaker 2 00:27:38  Yeah. So finance definitely is is something that, you know, people from an IT background wouldn’t necessarily come to the table having. And so you, you figured that out. You made the investment to learn that. And then the other thing you were telling me about is just, you know, a different way of thinking about scaling your team. Right? And and that’s something that, you know, I think everyone struggles with. What’s the difference? How do you make the change? What are the couple of the key lessons you learned about how you thought about your team? And I think you described to me that you’re almost able to you’re so successful now that you’re almost able to have your team run the show, and you can be really at the strategy level.

Speaker 2 00:28:16  I’m sure that felt a million miles away from you when you were on the other side of that, that that chasm. Talk us through that chasm.

Speaker 4 00:28:23  Yeah I know. Absolutely. So. Yeah. It you know, that’s, my the other co-founder and I, you know, some share out of operations at this point, we’re working more on the larger strategic deals or kind of high growth opportunities. you know, you know, really for us, it when we when we think about people, I think for a long time we, you had a lot of wrong people in the positions, which I think we you know, I think if I was to start over, I would I would make those decisions a lot faster. could.

Speaker 2 00:28:58  You did you hold on to your original people too long?

Speaker 4 00:29:01  We really did. Yeah. And that and that cleanup process, really, you know, positioning people. I do feel that, a lot of leaders are they’re kind of tuned for a certain size organization. A lot of times some can scale and grow with the organization, but there are many that cap out at 5 or $10 million in revenue.

Speaker 4 00:29:20  Like. And beyond that you see these like kind of boiling or pressure points. That puts ultimately a lot of stress on the organization, but it puts a lot of stress on that leader because it’s just they’re out of their element. and so learning to have those conversations faster, because I also often found that when the organization was was frustrated, so was that person. And they really didn’t feel like they were fit anymore and they wanted to go do something different. And so, you know, I, I’m a huge proponent now of having those tough conversations immediately, or as fast as you possibly can. And particularly for those that when it comes to leadership, just that you’re you’re having those honest conversations with people like, hey, is this is this working for you? Because it’s it’s not working for us. And so, just open that up. Oftentimes people say, you know, thank you. Like, I’ve actually been thinking about, wow, that’s either moving in this other role or. Yeah.

Speaker 2 00:30:15  That’s that’s got to be a relief.

Speaker 2 00:30:17  Right. Because the we’ve talked on this podcast many times with people, and it’s one of the biggest things that comes up in leadership is we’ve kind of boiled it down to, you know, fire fast or slow, but all the dynamics that make that so hard, you know, because, you know, you have loyalty. You’ve got you’ve got people that you’ve worked with for a long time. You’ve got people that are keeping the trains running. It makes it really hard to have that conversation. But it sounds to me like once you had the courage to do it, you started finding that it was actually a relief on both sides to actually have the conversation that you’ve been consistent about.

Speaker 4 00:30:51  Yeah, absolutely. I mean, it, you know, there was a few rare times where people would get, you know, defensive or whatever, very rare. But, when you give your leaders the tools, even just those opening conversations, and if they’re not going to do it in person or they’re not doing it, go zoom.

Speaker 4 00:31:05  Just tell them, hey, I tell them, hey, just can’t do it on a phone call, right? Because it does the face to face bother you? Like, can you can you have the tough conversation? and so what was interesting about it was, I’m not even saying these people left the organization. It was just, hey, you know, we would have the we would open up the can and they’d say, hey, you know, I’ve really been thinking about it, and I hate being in the leadership meetings. And I just want to focus in this area of the business. I see I see a huge problem here and I want to own it. And that’s when you know, you like, hey, I’ve got the right leader. I just have them in the wrong place. Yeah.

Speaker 2 00:31:38  Which is, which is fantastic. That’s a that’s a huge unlock.

Speaker 4 00:31:42  Yeah. Because you don’t want to lose all that equity too, right. When I say equity, part.

Speaker 2 00:31:45  Of the reason I’ve been holding off on the conversation in the first place, right? All that culture.

Speaker 4 00:31:50  All that time with that person, you you care about that person. But oftentimes we we think caring for them is just leaving them in that role and probably paying them more than they should be paid or whatever the case is, or, you know, stifling the business because people can’t grow under them. and so, you know, giving the people, you know, the ability to kind of have that open dialogue, nothing needs to happen that day. Just open the can, give them a couple days to think about it, said, you know, a future day, you know, in a week or so to have, you know, to to kind of solidify the conversation.

Speaker 2 00:32:24  So do you make it a little open ended and collaborative? It sounds like that, that that’s like it takes a little the pressure off. Right? It’s supposed to like, hey, you know, you’re not cutting it anymore. We’re going to fire you, which is a very intimidating conversation. How would you phrase it?

Speaker 4 00:32:37  yeah.

Speaker 4 00:32:37  It’s just it’s just more like I said in the beginning. It’s just more like, hey, is this working for you? Because here’s what’s not working for us. And, you know, usually that, that just even that open ended single, single set of questions just opens up this can of all these feelings, and things that are, you know, are kind of deep in their when they know it’s a safe place, right? When they don’t trust their leader. It’s a totally different situation. But, you know, you you kind of reduce your, you know, you’re going to strengthen the organization. You’re going to really help that person you care about. and, you know, you’re also reducing your liability, right? Because like, where is it actually ultimately going? Right? If you leave this person in there and it ends up in a termination, particularly wrongful termination, you got a whole other set of problems, right? So and, you know, it’s just the right thing to do if you truly care about people, have the tough conversation, have it quickly.

Speaker 4 00:33:30  And,

Speaker 2 00:33:35  That’s that, that’s that that’s a key lesson. I, I’ve seen that come up over and over again. So so that’s great. what about enabling your team to scale, like on the next side of that conversation? You know, whatever position you put them into, what did you learn in terms of, enabling your team to find the right roles? As I think is that conversation helps, but then how do you help them scale and grow in their careers, to the point where you and your co-founder could be at that, like oversight level now?

Speaker 4 00:34:07  Yeah, absolutely. I mean, I, you know, starting, you know, working backwards. Our current situation is, you know, is has worked well just because, you know, we’ve hired our key leaders, coaches, and a lot of times those are specialized coaches. We’ve given them the support they need. So I think what I see a lot of entrepreneurs do is like, you know, not give them, say, an assistant or virtual assistant or whatever, which I think is is really puts a lot more pressure and time.

Speaker 4 00:34:33  You’ve got like high level people doing kind of administrative work. That’s really low level work that they shouldn’t be doing. And so you can kind of help give them some of their time back. So same thing. We still have our team go and track their time, which was what we learned. Okay.

Speaker 2 00:34:45  So you’re using that same technique for your leaders. That was one of your first leaders.

Speaker 4 00:34:49  Yeah.

Speaker 2 00:34:49  And you’re using for new leaders. Now you’re passing it down.

Speaker 4 00:34:53  And so when you look at it you go, hey, well you’re actually spending three hours a week just scheduling stuff. Yeah. Coordinating meetings. That’s exactly. Exactly. Yeah. So can we get you somebody? You know, we’ve got plenty of people overseas now that, you know, work for us on our contract basis that are, you know, assistance as an example. Right. So they’re just and they’re great. Like, they’re, they’re they’re there part of our team there? you know, they they pick up the slack for our leaders, and empower them.

Speaker 4 00:35:21  but I think the biggest thing is telling them just to go. Just just to roll, like. Like they know what to do. And if they don’t, then they’re the wrong person. But I think that one of the biggest things we did this last year that really showed us a lot was we should kind of do them more of a top down strategic planning, do off sites, etc. we went to more of a bottom up. It’s like, hey guys, here’s where we need to be, here’s where we’d like to go. And we’ve decided that as a team, you show us how we’re going to get there. How is your department going to get how is your department going to meet these meet these areas that we need? Like if, you know, for instance, if sales has to grow by X sales, how are you going to do it? Marketing. If you have to deliver X number of ncl’s, how are you going to do it right? and so I think that’s a huge part of it.

Speaker 4 00:36:07  And then you know, pretty quick. Right. And they know that they start to buckle. If, you know, either they’re going to need a coach to kind of help them get there, or maybe it’s just the wrong role for them. but that that feeling of autonomy is huge, right? They have to have that feeling of autonomy where they can go.

Speaker 2 00:36:24  You’re the leader. How are you going to how are you going to solve it? Right. And that that does create transparency in their capabilities. Right. And I love the fact that you support them, whether it’s administrative help or coaching help. That’s really it feels to me like you’re creating an environment where they can succeed.

Speaker 4 00:36:40  Yeah, yeah. And that’s you know, and obviously this comes from a lot of seeing in other organizations. I’ve, you know, obviously, like I’ve told you, I geek out on a lot of different, obviously finance. But, you know, I’ve read a lot on autonomous organizations and how they’re doing it.

Speaker 4 00:36:55  So to start to slowly apply those things and you have to remember all these people you’ve hired, for the most part, have come from hierarchical organizations, right? And are not used to being able to make decisions. And so you almost have going from.

Speaker 2 00:37:09  Big corporate company to an entrepreneurial company. That’s not natural, right?

Speaker 4 00:37:14  Yeah. And you got to release them and go, hey, just go. Just roll like, you know, to do. you know, and obviously there’s, you know, there’s some there’s some guidelines there where you’re there at least kind of giving you an idea of how, of what they’re going to do, but, you know, if they want feedback or whatever, but, you know, coach will help them and ultimately, like you’ll see them start to develop their people. They feel free. They can make the calls. and you clearly you need to be involved in the big things as a leader. Like, you know, if it’s something that can put you out of business or, you know, substantially, you know, something you can’t recover from, but really, how many of those are there? It’s like most of the time it’s, you know, hey, I want to I want to do X for Alex.

Speaker 4 00:37:52  That works for us. It’s like, okay, well, you know, why do I need to make why am I involved in this decision. Right. Yeah. Because clearly you feel like, you know, if you’re the leader coming to me with this, you feel like you can’t make that call. That’s great. So. Yeah. And so I actually.

Speaker 2 00:38:08  It sounds like you have come fully to the other side of the chasm, where you don’t have to be in everything. You can empower your team. You’re taking concrete steps to make sure that they’re successful, both in terms of support and leadership. And now you’re almost the point. Like what? You’re asking the opposite question, looking back, which which kudos to you. You know, a lot of people never make it through that that that that’s a great story. well that’s great. I think that’s going to be helpful to a lot, of lot of our listeners. Everyone’s trying to scale. Everyone naturally falls into the trap of trying to do too much themselves.

Speaker 2 00:38:40  And and, you know, the organizational challenges that creates, I think, are going to be really, recognized by, by, by a lot of people. tell me a little bit about, you know, where are you educating yourself beyond that? The finance textbooks I found you, you had buried in, in the other day. What do you recommend to to other leaders? There may be on the front end of that chasm thinking about scaling or, you know, that can inspire them for their leadership journey. Any books or podcast you’d recommend?

Speaker 5 00:39:09  Yeah, absolutely.

Speaker 4 00:39:12  You know, I, you know, a couple of the. Well, there’s a lot of books. I, I, I would highly suggest entrepreneurs are constantly reading. So, you know, 1 to 2 books a month would be a recommendation if it’s just audio. I definitely am a huge proponent of, of, you know, obviously, I, you know, part of mine is, is more spiritual being a Christian, I, you know, I like to take at least an hour a day, and just go for a walk and, and really clear my head and figure my day out before I start.

Speaker 4 00:39:40  so part of that is, you know, prayer. I mean, for others, it might be meditation, those kinds of things, but you really need to be in a good headspace as a leader. I think it’s really tough to start your day and, and, you know, wake up on the wrong side of the bed and you’re just a jerk to everybody. I don’t think that helps anybody in the end of the day. you know, there’s some great books. Hard thing about hard Things, I think is a is a is a great one. there’s there’s there’s a ton. I, you know, there’s I think it’s interesting to just constantly be reading different things. I’m reading a fly fishing book called The Optimist right now. I like to kind of mix my head up a little bit, because I always pull something for leadership out of these other, you know, ideas, these other concepts that come out of just, you know, completely random books. yeah. I, you know, really for me, I there’s a series of podcasts I love.

Speaker 4 00:40:29  I but really, I think what’s most been most important for me outside of books and everything else is really just, to find a community of entrepreneurs. What you guys are doing is, is is awesome. And I think that’s critical for people. And then, you know, on a smaller scale, if you can find them either in your local network or people that you can find throughout the nation or maybe in similar businesses, but you’re not competing, just people that you can trust. You can share the the tougher parts of what’s going on in your organization. and again, finding a good coach if you can’t afford one, or, you know, maybe there’s I know there’s plenty that are retired entrepreneurs are happy to help and they’re a little bit bored. They want to keep their mind going. so, you know, huge proponent of of just, you know, finding that, that community for you. yeah.

Speaker 2 00:41:14  Not not not not boxing yourself in and trying to solve the problem alone is a great lesson.

Speaker 2 00:41:18  And so, you know, thank thank you for that. I think, you know, that’s what we’re trying to do at Growth Elevated. Hope to see you at the at our summit this winter. Yeah. And thanks for taking time to just share some of your leadership stories and secrets with us. David, this has been really excellent.

Speaker 4 00:41:32  You got Julian. Thanks for having me, man. I really appreciate it.

Speaker 1 00:41:38  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.

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. Past guests have included CEOs and CXOs of great companies like Work Front, Healthcare, Radical Systems, in Moment, Vox, Pop me, the San Francisco 40 Niners, and many more. This podcast is brought to you by Growth Elevated at Growth Elevated where a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learnings in an effort to help all of us become better leaders. We do this through educational programs like this podcast. we also have a blog, and we have an annual tech summit in the mountains of beautiful Park City, Utah.

Speaker 2 00:01:12  So if you want to learn about leadership and if you like skiing, check out Growth elevated.com and our annual Tech Summit. We’d love to see you there. Today I am super excited to welcome Cotter Cunningham to the podcast. Cotter is the CEO of Expert Voice. Expert voice help some of the world’s best brands build deeper relationships with their most influential, influential advocates in retail stores, professional settings, and online. All of this is done to improve the strength and reach of of trusted recommendations that help customers buy more confidently prior to Expert Voice. Cotter was the CEO of retail May not. Retail may not is a leading savings destination that enables brands to engage active shoppers and influence purchasing decisions. Cotter founded Retail Minot in 2009, and served as CEO through 2018 and chairman through 2020. As CEO, Qatar grew revenues from zero to almost $300 million and grew the business to to 650 employees, all while remaining profitable. He also raised over $250 million from a number of different investors, including Austin Ventures, Norwest Venture Partners, GV, IVP, and J.P. Morgan.

Speaker 2 00:02:29  Qatar is now a venture partner at Next Coast Ventures, and that’s where I had the good fortune to get to know him. He’s also a husband and a father of three kids and lives in beautiful Austin, Texas. Please welcome Connor Cunningham. Yay!

Speaker 3 00:02:44  Thanks. Thanks for the intro. That was fun.

Speaker 2 00:02:48  Yeah, well, we’re looking forward to hearing a little bit about, about the journey and some of the stories. So, you know, congratulations on on on all all the success. before we start talking about your company in Utah, which I’m tempted to do, let’s let’s go back a little bit to, to retail. May not. That’s an interesting company, right? yeah. You know, I look at it and I’ve used it for some coupons, occasionally. And, and so I look at it as kind of an e-commerce type of site. But tell me a little bit about how you got started with retail. Me not what was the what was the original idea? And did you have to iterate a little bit to get to where it was?

Speaker 3 00:03:22  Yeah, it’s a it’s a crazy story.

Speaker 3 00:03:25  So I was an entrepreneur in residence at Austin Ventures and kind of looking for a business, and we stumbled. I played around with coupons before there used to be a company called Fat Wallet that, did like rewards and cash back. And there was a couple of kind of smaller coupon players, and I started investigating the space. And it sounds so obnoxious to say this, so forgive me, but everybody I met was like a single, a solo entrepreneur. Inevitably, their background wasn’t marketing or anything like that. It was kind of scrappy, entrepreneurial types. And I felt like and a lot of them were kind of approaching it sort of part time and things like that. And so my thesis was, what if you had one of these and you ran it like a business, as opposed to sort of like a hobby that funded your, your lifestyle. And, because some of them had pretty amazing lifestyles. And I remember we, we bought three small companies on one day, and we ran those for you with an acquisition.

Speaker 2 00:04:36  So you had to be found some small players and said, let’s, let’s build a base. That’s right. Was the general idea the digitization of coupons going from paper to online or not so much.

Speaker 3 00:04:46  Not so much. It was really more just that at the time Retail. The well, the second the big the big thing is, was the one I mentioned that these were sort of run on professional. They sort of underlying sort of theme, I think, is this idea that at the time, e-commerce represented maybe 10% of the typical wallet spend. And of course, you feel like over time it’s going to be 90. And so let’s ride that, that growth up. and it proved right. I mean, I don’t know the exact I haven’t checked the exact percentages lately, but it’s certainly a bigger share of wallet for the average consumer today than it was when I started, in 2009.

Speaker 2 00:05:27  So help, help describe the ecosystem, right? Because I know it as a place, as a consumer, as a shopper, I can get a discount.

Speaker 2 00:05:35  But but you’re how are you getting those discounts and bring them together? And how are they unique discounts that you have at retail maybe not versus others or your marketplace of discounts.

Speaker 3 00:05:44  Yeah. So you tell me now. It was really innovative. It was started by two gentlemen from Melbourne, Australia. Like I said, I bought it about a year after, we started with three other sites and it quickly became the star of our little portfolio. And so we wound up sort of closing or winding down or just de-emphasizing the original three brands and putting all of our eggs into retail may not and literally change the name of the company, confusingly.

Speaker 2 00:06:13  To I was going to ask you where that name came from. So that was the Australian company’s name.

Speaker 3 00:06:17  Yeah, I see Australian coming out. It’s kind of a weird story. The guy had started a site called Bug Me Not, which was a way where, at the a lot of the, news sites, this is 2009. It was a different world.

Speaker 2 00:06:32  Had, the early days of the of the domain names and, and the great, great real estate grab.

Speaker 2 00:06:38  Right?

Speaker 3 00:06:38  Yeah, 100%. And so a lot of the news sites had started, requiring you to register. And so the whole concept behind Bug Me Not was you would register with generic like username and password, and you would post it and so I could go into bug me Not and grab that username and password. And so I wouldn’t have to register, I could use yours or something jointly. It’s kind of a fun UGC approach a little in a way. That’s the way they approached coupons. It was genius at the time. The interesting thing about it. So the ecosystem works like this. They’re online retailers and consumers. And so they’re looking for traffic. And so they use coupons as a way to drive traffic from the, from consumers. And so the interesting part about coupons is you don’t get paid on the use of the coupon. You get paid just for the traffic. So in other words, your cookie on retail may not. And then we deliver you to, you know, Kohl’s or Macy’s or whatever.

Speaker 3 00:07:41  And so that winds up in a paid Transaction, regardless of if you use a coupon or anything like that. Yeah. It’s pretty.

Speaker 2 00:07:50  It’s a traffic. It’s paid for traffic. Okay. Yeah.

Speaker 3 00:07:53  And so the, you know, typically a typical commission, I think it’s been pushed down pretty hard. Now I’m not in the business anymore, but, at the time it was around 5%. So not huge money. But, you know, if you do enough of them, it adds up. and so.

Speaker 2 00:08:10  This part of what’s called affiliate marketing and affiliate traffic, okay, that’s the category. All right.

Speaker 3 00:08:15  Yeah. And there are a couple of fun things about that, not the least of which was every every retailer has an affiliate marketing team and say, right, you had a clear customer who needed you and got bonuses on, you know, whether or not you were able to drive traffic to them. So there was a a definite win there as opposed to a lot of businesses like the one I’m in now.

Speaker 3 00:08:35  We don’t have a clear customer always. And so it can be challenging sometimes to say, hey, you know, you need us. And the guys like our girl or woman is like, hey, Dua. So that’s a thing. So anyway, there’s a clear customer.

Speaker 2 00:08:48  There’s a clear is the person in the marketing department. He’s who’s got a budget for affiliate traffic. Their job is to drive traffic. And what would you provide them?

Speaker 3 00:08:56  Yeah. Traffic literally.

Speaker 2 00:08:58  You provide them a tool set to build these coupons or.

Speaker 3 00:09:01  Whether that’s the that’s the best part of affiliate. So it’s all pre done. They’re they’re these couple of sites. Rakuten has one. It used to be Commission Junction and Link share back in the day. And so the the all the plumbing has been put in place. So you can actually run a coupon site with a very minimal sales group. Now we wound up really ramping up our sales group because we found that the more interactions you had with these affiliate managers, the better coupons you would get, the more exclusives you would get, the access to more interesting deals and stuff you would get.

Speaker 3 00:09:35  But the fun thing about retail, me not and I don’t want to miss this point, is kind of what we were talking about before. It let consumers post UGC user generated content on this site. So if you are out and about.

Speaker 2 00:09:49  You early days that became really critical, right?

Speaker 3 00:09:51  Right. And you were.

Speaker 2 00:09:52  An avenue for that or you helped them give you know.

Speaker 3 00:09:54  Yeah.

Speaker 2 00:09:55  Facilitate.

Speaker 3 00:09:57  If you found a fun coupon for gap or whatever, you could post it on retail. May not. You got points. We didn’t actually pay you or anything but.

Speaker 2 00:10:06  Gamify it a bit.

Speaker 3 00:10:07  We gamified it a little bit. And then the other thing that I think really helped is when you would post the coupon, you, the consumer, you would write it in a way that used your voice. And so, it helped in SEO a ton because you would typically describe the coupon or whatever the benefits were in the, in the way that a consumer would think, not the way that a marketer would think.

Speaker 3 00:10:34  So the example I always use is like women’s pants. They don’t always call them pants in the ads that come slacks or something like bottoms, but you don’t call them that. I mean, no human in the bottoms, like maybe for babies. And so, you know, it would be $5 off women’s pants at Kohl’s and you’d post that. And so I think that really helped. anyway, we wound up buying that company, and then it was a rocket ship for the first 4 or 5 years. It was really incredible.

Speaker 2 00:11:05  And and so you bought those startup companies, you kind of narrowed it down to the retail may not business. Then you just really started building on that business model.

Speaker 3 00:11:13  Yeah, that’s exactly right. about two years in, we started expanding internationally. So I bought Keep On sites in the UK, company called Voucher Codes. We bought three sites in France and sort of pushed them together. We did some work in Germany, which was hard, and we never really mastered Germany for better or worse.

Speaker 3 00:11:34  We did some stuff in Australia. So yeah, we definitely sort of expanded that way and then we started playing around with obviously the things that were to come. So, cashback being a big one, browser extensions being huge.

Speaker 2 00:11:52  So you really became, you know, kind of the cutting edge of, of online traffic and generation and affiliate marketing and understanding all those things.

Speaker 3 00:12:00  Yeah, yeah. I mean, you know, one of the leaders, there were certainly people in it with us.

Speaker 2 00:12:07  And so what were the stages like? You obviously you went all the way, you went public hundreds of millions of dollars. But what were the the high level stages if you had to break the journey down, start up phase, maybe growth stage and then public stage.

Speaker 3 00:12:21  Yeah. So we started with no employees, you know, just me in a tiny little office in the basement of Austin Ventures, and, Austin Ventures gave me $30 million, about 28 to buy the. That’s a.

Speaker 2 00:12:35  Good start.

Speaker 3 00:12:36  Good start.

Speaker 3 00:12:37  And if you start with 30 million in your pocket, you’re not doing anything wrong. to buy the three original sites. So they were all growing nicely and had pretty good revenues and pretty good growth. Our revenues are about 10 million to 12 million, kind of in that range. So you can.

Speaker 2 00:12:54  You you bought consolidated those. So you started at zero. Then you then you got a big big step change to ten. That’s right. What was the the next goal when you started ten. You’re trying to get there.

Speaker 3 00:13:05  My whole goal was to get to 100 million. Okay. I’ve been at Bankrate, a company in South Florida, before that, and we had worked. I’d had three different CEOs, and we had been gone from about 50 million to about 80 million during that time. I was there ten years, I think roughly. And, we never could get to a hundred million. And it always was. This kind of.

Speaker 2 00:13:28  You came in with that bogey. Very well. Well, well, well entrenched in your mind.

Speaker 3 00:13:32  No. Yeah. I mean, you know, the I can’t even describe it. It seemed almost unobtainable. And, the joke is that he told me not. I think we got there in about a year.

Speaker 2 00:13:44  One year.

Speaker 3 00:13:45  The second year. Second year. First year after we bought it. Yeah, it was doing about 30 million the day we bought it. And I think within a year we were doing almost a hundred. Yeah.

Speaker 2 00:13:57  Wow. Yeah. Okay. So that, that, that, that journey that you set yourself up for, for, you know, this might take three, five, ten years, one year to 100 million okay. So that so you, you you clearly know you’ve got a rocket ship at that point. You you hit you hit the wave right at the right time.

Speaker 3 00:14:12  Yeah.

Speaker 2 00:14:12  And so you have some massive scaling challenges that I suspect, right?

Speaker 3 00:14:17  Yeah, 100%. I mean, my favorite story about that is we needed some real estate. We were just bursting at the seams.

Speaker 3 00:14:23  We were over this coffee shop on South Congress and, you know, I mean, people were having to have meetings in the stairwell kind of thing. And so we wound up moving, a couple blocks north to, sort of downtown Austin. And I remember the only space I could get at the time was a floor like, for what Austin Real Estate has, is there’s a lot of empty space now, I think. But there wasn’t at the time. And so you had to take the whole floor and I didn’t need the whole floor. We had like 70 employees and I you know, I thought I remember telling our CEO, we will never use this whole floor. And I think we wound up taking 5 or 6 floors in the building by the end of the thing. But.

Speaker 2 00:15:08  And how long did it take you to occupy that first floor?

Speaker 3 00:15:11  Yeah, not very long. I mean, about a year. Yeah. So, we worked with some great people to help us with real estate, which I think is one of the hardest challenges, you know, to try and have enough space where you have enough space for people, but also you’re not sitting around looking at the space going, why do I have all this space? Right.

Speaker 3 00:15:31  because it’s not cheap. Right. And so we got lucky that, there’s a group here called HPI that was just fantastic in helping us kind of measure all that.

Speaker 2 00:15:42  Terrific. Okay, so you shoot up to 100 million. Now you’re at a incredible triple digit growth pace. how long did it take you to go public? When did you go public?

Speaker 3 00:15:52  Well, we went public four years after we started. So pretty. What was your.

Speaker 2 00:15:56  Revenue level at that point? Do you remember?

Speaker 3 00:15:59  About 180, I think I you’re you’re you’re testing my memory. but yeah.

Speaker 2 00:16:04  Okay. So within four years, four years to go, to go from 0 to 180 and going public, that that is the, the theoretical Super Bowl. I guess if you’re playing in the startup world, you know, what was that like? Tell me about.

Speaker 3 00:16:18  That. Yeah, it was crazy. I mean, it’s everything you’ve heard. I mean, my favorite story about going public was we, we had two great investment banks, Goldman Sachs and Morgan Stanley.

Speaker 3 00:16:32  And they were lovely and super smart. And we got lucky. And you know, they did a great job for us. But we were at fidelity and the salesperson for one of them was talking to the sale, the potential buyer at fidelity. Right. And they had been the Patriots game or something together. We’re going to go or something like that. And like I was just kind of sitting there drinking my coffee, listening to them talk. And it dawned on me, I’m the product here. Yeah, they’re selling you. They’re selling me. And it was a weird feeling because, you know, these guys are going to see each other a thousand more times in their careers or whatever. I’m there a day, you know? I mean, maybe you might be the.

Speaker 2 00:17:17  Flavor of the day and and you know, how how much are they going to emphasize you versus what’s coming tomorrow. Right.

Speaker 3 00:17:23  And, you know, and we got amazing advice and I wouldn’t change anything we did for the world.

Speaker 3 00:17:28  But you definitely realize you’re the commodity.

Speaker 2 00:17:33  Yeah, well, you went public on which exchange?

Speaker 3 00:17:39  Nasdaq.

Speaker 2 00:17:39  Yeah. So, you know, I mean, the reality is, though, but you’re you’re joining one of the world’s largest marketplaces and you’re, you’re a new you’re a new product on the shelf. Right? That’s exactly what it is.

Speaker 3 00:17:49  No, no, it was just kind of a crazy thing. Yeah. No, the going public. The other fun thing we did, I thought this was cool. So if you go public on the New York Stock Exchange, you get the famous balcony shot, right? Right. And the balcony holds 14 people. And I felt like, you know, at the time we were kind of 400 people, I think maybe 500. And to me, you know, I wanted them all on the balcony. Right. And so that seemed ridiculous. And so we talked to Nasdaq and they let us open the stock exchange in Austin at Austin City Limits, where they shoot the, the music.

Speaker 2 00:18:27  Oh, fantastic TV show.

Speaker 3 00:18:28  Yeah. And so we had a big party and, rang the bell.

Speaker 2 00:18:33  For some sort of. How do you do that?

Speaker 3 00:18:34  Yeah, we had a big stage and they, you know, and I’m sure it wasn’t connected or anything, but I got to slam the thing and, you know, the sirens went off. We had a band. It was, oh, that’s awesome.

Speaker 2 00:18:45  So you made it. You made it very inclusive. So your whole team can be part of that. No big screens and it’s been amazing. Bring your.

Speaker 3 00:18:51  Family out. I mean, you know, the whole thing, right. So it.

Speaker 2 00:18:54  Was that’s.

Speaker 3 00:18:55  Fantastic. Amazing day. And I think, you know, so often I mean I had the VCs come I mean you know, why not I mean it’s yeah. Yeah. How many times are you going to go public in your career. You know. So.

Speaker 2 00:19:06  Oh that’s that’s a great story. I’m glad to hear that.

Speaker 2 00:19:08  Well, you know this, you know, I read on your LinkedIn, you know, that you had an incredibly, high approval rating on some of those sites, like Glassdoor. People really liked working at your company, and you were incredibly well liked as a top rated CEO. Was was that something you focused on? Like how did you how did you in this growth? You you know, you’re obviously adding people trying to figure it, fill out flaws and all that. But how do you make it a good place to work and make sure that the culture was good, you know, during that rocket ship ride?

Speaker 3 00:19:39  I think it’s hard. I mean, like Austin then and now is really competitive. And so it’s not enough just to say we’re going to pay competitive salaries. I mean, Apple, Facebook, Google or all here they were coming at that time. And as well there’s a bunch of local great companies indeed started and is headquartered here. Dell, of course, the granddaddy of Austin tech is here.

Speaker 3 00:20:06  All amazing companies and great places to work. And so, you know, that’s your competition. When you’re thinking about like a product manager or a full stack engineer or front end person or something like that. All those people could go any of those places. And, you know, So it’s not enough just to say, well, we’re going to pay a competitive salary. You have to, I think, build a culture that people go, I want to be part of that. And so we did a couple things. We stole something from Amazon. One of the one of the things I’m most proud of is we stole a thing from Amazon called the bar raiser. And so it was a part of the, it was the it was supposedly the last part of your interview process, and we picked, I don’t know, I think 10 or 12 people from the company that we felt like represented kind of the best of us and from a cultural standpoint. And they would interview the every candidate, not just exclusively for culture fit.

Speaker 3 00:21:05  And they had a black ball. And so they could say, this guy, he’s not like us, you know, he’s not he’s not going to make it. He’s to cut the road. He didn’t talk about a team. He talks about himself, whatever. And, you know, I did.

Speaker 2 00:21:19  The final interview round. You You brought in your yeah, your best culture folks. And then they had to pass the culture bar.

Speaker 3 00:21:26  That’s exactly right. And I liked it. I thought it worked pretty well. And that was.

Speaker 2 00:21:31  Across the board every everyone that was hired. Well, that’s that’s not a small commitment.

Speaker 3 00:21:36  No. Yeah. And and inevitably and you can see this coming a hundred miles away. You know, there’s somebody you really want to hire that the person black balls, you know, and then you’re like, oh gosh, you know. And so, you know, you would talk to the person. Why why did we throw the black ball on on Sally. She seemed amazing to me when I interviewed her, you know, that kind of thing.

Speaker 3 00:21:56  But, you know, I mean, you’d work through it or you wouldn’t, but we you honored the process. Yeah.

Speaker 2 00:22:01  You have to honor to to to build.

Speaker 3 00:22:03  Otherwise it’s meaningless.

Speaker 2 00:22:05  I know it means a ton coming in, though. When you see that in an interview process, you. Everyone talks about culture. But that’s something probably that really speaks pretty loudly in the in the interviewing process.

Speaker 3 00:22:16  No. And it’s funny, I, I think culture has is something that we talk about now that for the longest, I mean, I’m older, I’m 62, the, the longest in my career culture wasn’t talked about. I mean, at least not any of the companies I was at. You know, it was just they it was a job. And so I think I think it’s definitely for the better. And I think it’s definitely something we try to focus on. You know, since I’ve been a CEO.

Speaker 2 00:22:46  So and that’s a really good example. You know there’s always the values on the wall and people kind of roll their eyes because sometimes they’re not consistently applied.

Speaker 2 00:22:54  But like the example that you just shared where you take the effort of using your the critical time of some of your best people to be part of that interview process and to give them the chance to blackball people and have to live with that, that that’s putting your money where your mouth is. I think that should probably speak volumes.

Speaker 3 00:23:10  No. And you? Yeah. I couldn’t agree more. And, you know, you talk about values. I remember I was at a big retailer who I won’t name because I don’t embarrass anybody. And they had a really well written set of values that were on the wall of the lobby. Right? We were waiting on the person to come pick us up, and I commented to our contact, I’m like, I love your values. And he was like, what are you talking about? And I pointed to the wall and he’s like, oh, I’ve never read those, you know? And so wow, what a it was so obvious that it was just some marketing hoo ha.

Speaker 3 00:23:45  And he’d never bought, you know, and he’s like, no, I don’t know anybody that’s ever read that and say, oh.

Speaker 2 00:23:49  My goodness.

Speaker 3 00:23:50  When we were going to do values, he told me not. And at my new company, we actually I don’t I thought it would be more powerful if instead of me coming up with what I think, we built a team of employees and had them say, here’s what’s important to us. And so I did that every time. Me not. And I did it again here.

Speaker 2 00:24:12  I love that. Well, I’d love to follow up and learn about that technique. But, so obviously this is this is a great story. It sounds like a ton of fun, but I’m sure there’s some things that, you know, looking back that you, with the viewpoint you have now and the perspective you have now that you might have done differently, what kind of lessons might you pull out to someone else who’s maybe, you know, we’re all aspiring to that kind of rocket ship, but whether they’re at the same slope or not, what are some of the lessons you can share? and things you might do differently if you did it again?

Speaker 3 00:24:42  Yeah.

Speaker 3 00:24:43  I think, you know, we probably over hired. We didn’t probably we definitely over hired. we struggled to find the right metric for sort of how to think about how many employees we needed to run the business. And I used to have this joke that, everybody needs a buddy. There are no one person departments. And so, you know, it’s a classic example that, you know, you think I remember I hired someone to run a strategy. Great guy, super smart. And I look up a year later and he’s got six people that were working for him, and that’s not his fault. He felt like we needed him. But to me, it was an example of, you know, building out a team that maybe we didn’t need. maybe we did.

Speaker 2 00:25:29  How would you handle that now if you were in that situation?

Speaker 3 00:25:31  Yeah, I we work hard to just. I just don’t hire. Right. We, we really have clamped down on I mean, we hire very it’s a much more first of all, we’ve I’ve always worked hard to hire in the interview process, but I’m pull I’ve pulled that back now into this sort of let’s talk about why you need someone.

Speaker 3 00:25:55  Right. And so if someone leaves, we don’t just automatically rehire for them. You know, we kind of take a step back and say, well, is there something we could do this job? Should we automate it? Should we outsource it? Should we move it offshore? What, you know, is there some other way to do this job that’s cheaper and more efficient. and I think that is a lesson that came with time, frankly. And it’s easy to get caught up in the kind of start up business of how many employees you have. How much money have you raised?

Speaker 2 00:26:26  Yeah. The vanity. Right?

Speaker 3 00:26:28  Yeah. Who do you raise?

Speaker 2 00:26:30  The process that you just described is what would get you to profitability and capital efficiency for sure.

Speaker 3 00:26:35  That’s right. And the joke is to me now it was crazy profitable. And so we probably weren’t as well. Not probably we weren’t as aggressive managing costs as you might be in a company that loses money.

Speaker 2 00:26:52  Yeah. Well, most people will listen to this podcast, are probably venture funded and they’re probably, you know, along the journey where they may still be losing money and getting to profitability while maintaining growth is really the name of the game.

Speaker 2 00:27:04  So, you know what you just said there in terms of really with every hire. Do you need that hire? Does it. You know, I love the idea of just replacing someone who’s there because that can sometimes be automatic. Yeah, right. But but you just walked through some really good criteria. You know, you need that person. Do you need that person full time? Do you need that person now? You know, do you need that person domestically. Right. You said about offshoring and then can you automate it? I think, you know, those are those are some great questions to ask, in terms of driving, you know, continue your growth, but but reducing your cost base as you go along so you get better, better profitable or more and more efficient.

Speaker 3 00:27:41  The other thing that happens, and you know this rarely, you almost never have someone immediately on deck, right? So if you quit tomorrow and I’ve got somebody that can start the next day, right? I mean, that just doesn’t happen.

Speaker 3 00:27:54  It doesn’t.

Speaker 2 00:27:54  Happen. Right. So your caps.

Speaker 3 00:27:56  Right. So in that sort of interim process where the person is left or leaving, but we haven’t brought in the replacement, I think it’s important to kind of talk to the team. Are we really stressed right now. Are we kind of doing okay. So yeah we we didn’t have good discipline on letting people go. We were very disciplined on hiring. But we definitely had people kind of bump along that, that maybe we should have been more aggressive about. So.

Speaker 2 00:28:28  Okay. Well that’s.

Speaker 3 00:28:29  Great.

Speaker 2 00:28:30  So tell me a little bit more about what you’re doing now at Expert Voice.

Speaker 3 00:28:34  Sure. Expert voice is a is kind of a quirky company. So you mentioned it in the in the opening we run pro programs for brands. And so the classic example. But it’s one of those companies you kind of have to explain for people to go, oh, okay. The example I always use is if you’re a ski instructor, you know, ski brands want you to wear their jacket, when you’re out and about, you know, the resort will give you a jacket, but but, I mean, you know, when you’re out and about or skiing on your own, you know, Helly Hansen wants you to wear their jacket.

Speaker 3 00:29:06  K2 wants you to wear their skis. I always tell the story. I skied for years in Taos. We grew up skiing there, and I had the same ski instructor for six years, and it was this guy in Jim and Jim skied on Rossignol. And man, I can assure you, when it was time for me to buy my first pair of skis, I was buying Rossignol. Or, you know, regardless, I remember that too.

Speaker 2 00:29:27  That was my first big, big, you know, new set of skis when I was aware enough of brands to make a make a choice.

Speaker 3 00:29:35  So brands need help managing those programs to make sure the ski instructors are qualified, to make sure that they are ski instructors, that kind of thing. And so we do that for them, and we manage that in an e-commerce sort of environment. So if you’re a ski instructor, you can come to expert voice and you have a ton of brands that want you to represent their stuff and they’re willing to sell you their stuff at a lower price to get you to, to be in.

Speaker 3 00:30:03  And that’s true if you’re a fireman or a doctor or nurse or, you know, golf pro, I mean, the list goes on.

Speaker 2 00:30:12  That sounds like a kind of a fun, fun area. You’re in. You’re you’re you’re in those aspirational recreational expert areas, right?

Speaker 3 00:30:19  Yeah. It’s funny. I haven’t always been as outdoorsy is I is I am forced to be now. So, we need to get you.

Speaker 2 00:30:33  Up here to Park City for our, growth elevated conference and do some skiing at Alta with us this year.

Speaker 3 00:30:40  I’m sure it’s fun.

Speaker 2 00:30:42  So tell me about, you in our, pre-game, we were you were talking about the challenge of being fully remote. You know, you’re you’re you’re in Austin. the company’s in Salt Lake. You’re back and forth, but, sometimes, you know, the people aren’t in the office in Salt Lake. how are you? How are you navigating that? What are your thoughts on on, you know, pros and cons?

Speaker 5 00:31:01  Yeah.

Speaker 3 00:31:02  We are fully remote.

Speaker 3 00:31:05  the company was headquartered in Salt Lake, and before the pandemic, I think there were two people out of the 150 or so that work there that weren’t in Salt Lake, and one of them commuted in every week. And then when the pandemic hit, people just scattered. And they moved to Seattle. They moved to Denver. they moved out from, you know, you know, Utah better than I, but out into the the backwoods of Utah, it’s beautiful. Why not? And so, When the pandemic ended, it would be almost impossible to bring the company back together. Coincidentally, that’s when I, we bought the company. I had a private equity firm in Austin called tritium. bought the company about almost exactly two years ago. And so there was no. You couldn’t put the genie back in the bottle, right? I mean, people were home and we just had to learn to live with it. But as you know, sort of the history of my own experience is very much kind of butts in seats mentality.

Speaker 3 00:32:13  and this is required us to as managers. You can’t be that way, right? I mean, we were joking before, before the call, I literally, you know, if you hadn’t had a shower, if you’re walking your dog, while we talk on the phone, I don’t know, you know, I mean, I guess I could hear the traffic or something, but we need to. It’s forces his managers to focus more on outcomes and not on sort of time and seat. And I think that’s pretty healthy. there are some jobs where that’s super easy. Sales is always the classic example of, you know, did you hit your quota? Yes. Then I kind of don’t care if you’ve played golf, you know, Friday afternoon or Four or something. I don’t know, maybe I do. but, old habits are hard to break. But, you know, for something that’s trickier, you know, programming, you know, we’ve used everybody’s tried a million things in programming to measure efficiency, but it’s it’s still challenging.

Speaker 3 00:33:17  And so, and operations and things like that can be more challenging to, to measure. But we’re working through it and it’s been a fun experience. People are great. the company is really, lovely. And, yeah, it’s going well.

Speaker 2 00:33:34  Well, I’m excited about, learning more and and and seeing you here when you’re in Utah. It’s great. Great. to have you, part of the Utah ecosystem, you know, speaking of that, the Utah ecosystem is is growing. But you you played a huge role in the Austin, tech scene, both, you know, in the venture capital space as well as, you know, obviously with retail may not, talk to me a little bit about what’s happening in Austin and, what are you most proud of there?

Speaker 3 00:34:00  Yeah. You know, it’s funny, the way I think about it is when I first moved to Austin, our biggest challenge when recruiting people, if someone was out of state was the trailing spouse. Problem is, how does your husband or wife that works find a job, especially if they were in tech when you’re at retail may not.

Speaker 3 00:34:26  And we really struggled with that at first. There was kind of Dell and indeed and that was it. And yeah. But now, you know you kind of never hear that anymore. There’s so much going on here. You know, as I mentioned before, you know, Apple, Google, Facebook, TikTok, all have pretty enormous offices here. Apple, especially the top.

Speaker 2 00:34:50  Tech markets for employment in the country.

Speaker 3 00:34:52  Yeah. And you know, so if you’re intact and you’re a trailing spouse, you can get a job if you want one. more than likely. And so that’s, to me, so exciting. I love to see that growth. there’s a good startup scene here. it used to be that there was just Austin Ventures. It was kind of the only venture firm in town, or certainly the dominant player. Maybe a better way to say it. And now there’s a lot of really well established. there’s still probably not enough seed capital here, but man, if you’re raising an A, you can definitely find people to talk to here.

Speaker 3 00:35:29  It’s still hard to raise money. Of course, raising money is hard. But, and I think that’s sometimes lost on entrepreneurs. I do a Q&A for a local newsletter. And, the most popular question by far is, you know, how do I raise money? Why am I having trouble? And, you know, not every idea can be funded and not every idea is a venture idea, so it’s still hard.

Speaker 2 00:35:57  Yeah, well, you know, I’ve enjoyed getting to know you through our work together at West Coast Ventures, and it’s a lot of fun to see all the exciting companies that, are being incubated and growing in Austin and across the country together. But that’s that’s been a real treat for me, and I’ve enjoyed it. So, that was a great story. Thank you for taking the time with us. You know, for the people that, are aspiring to to have the kind of success that you did, any any recommendations you have books or podcasts, do you think that, you know, that you read that you like, that they might, put on their list as they’re just doing their, continual, education?

Speaker 3 00:36:32  Sure.

Speaker 3 00:36:33  I would say two things. the thing I think that’s helped me as much as anything in my career is while I started in finance, I then shifted to marketing. And I think having a broader background has really served me well. I got lucky. There’s a branch of marketing. Direct marketing at the time required, pretty heavy analytical skills. And so, yeah, the finance background did. Yeah. So finance background was actually a benefit, not a negative. But, you know, that ability to sort of see across the platform has been invaluable. I can’t say it enough. And anytime someone comes to me, I’m like, get as much experience in as many different jobs you can in terms of podcasts or, books. my favorite business book is Shoe Dog. I think you’ve read it. it’s I love it. It’s truly amazing the grit that guy has. The founder of Nike is just Phil Knight. It’s just insane. I mean, his story after story where you just in the book where you’re just like, what this guy did to put Nike on the map is absolutely the classic example of what it takes to build a business.

Speaker 3 00:37:48  And I wish I could say I work half as hard as he did. It’s truly amazing.

Speaker 2 00:37:54  Yeah, that’s an awesome story. And you’re going to enjoy that movie. Er, it’s just a chapter in that book. But that, that’s a that’s a fun one about the Michael Jordan version, about it, chapter of that story. Well, Cotter, thank you so much for your time this morning. I think this was a great story, and I, I can’t wait to, continue to to work with you to, to help entrepreneurs in the way we are. And good luck. in all your, your ventures. Thanks so much.

Speaker 1 00:38:22  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.

Speaker 1 00:38:43  Thank you.

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 00:00:29 Hello, 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. 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 is a community of tech CEOs and founders and CXOs who are committed to working together to share best practices and learnings in an effort to become better leaders. We do this through educational events and programs like this podcast, and we also have an annual summit in beautiful Park City, Utah. So if you like skiing and you like talking tech, you like talking growth.
Speaker 2 00:01:20 check us out at Growth elevated.com. Today I am excited to have a conversation with Dan Chapman. Dan is a go to market advisor and fractional CRO, and he focuses on very early stage B2B SaaS companies. He focuses on founder led sales and that whole topic of how do you go from founder sales to scaling sales? Dan learned to sell as an executive at Google, and then he put those skills to work at Bento Box and Click dimensions. Today, Dan helps technical founders from selling their first customers to hiring the team and setting the stage for scale. His unique background across multiple go to market roles, and a hands on approach helps founders navigate the critical inflection points that often derail startups in early days. Please welcome Dan. Hey.
Speaker 3 00:02:11 Thanks, Julie. Glad to be here.
Speaker 2 00:02:13 Yeah. Glad, glad, glad to, have you here today, Dan. You know, the the topic that, you really focus on is, is, is really critical, right? Because so many people, the innovation economy is fantastic.
Speaker 2 00:02:27 We have people coming in from all kinds of areas. They come from a domain problem that they see, they want to solve. Some come from technology and then they’re faced with this challenge of sales. Right. And so having someone like you that can help move from founder lead sales to scale is critical. And I’m looking forward to talking about that. Before we do, though, give me tell us a little bit about your your background. How did you get to become an expert on early stage tech sales, and how did your background lead you to choose this as as your passion?
Speaker 3 00:02:57 Yeah, well, I’d say, my background is a little different than a lot of other folks here. in this type of role, doing this type of work. And that actually started out as a technical founder myself, as a software developer, started a small dev shop and kind of learned the hard way, how to sell by making pretty much every mistake in the book. I didn’t so much cut my teeth learning to sell as like, knock my own teeth out, running into the wall over and over again.
Speaker 3 00:03:25 and so as I kind of matured in my career and shifted my focus more towards go to market leadership roles with later stage and growth stage tech companies, I really came to appreciate just how hard it is as a founder, especially if you’re coming from a technical background, to really be successful in those early days of getting your go to market launched. And so what I wanted to do is make that process easier for other founders and kind of give back in that way.
Speaker 2 00:03:51 That’s fantastic. And so you started out with some software. You also have some experience in leadership and strategy with both the military and McKinsey. Tell us a little bit about how that and how that shaped your journey.
Speaker 3 00:04:03 Yeah. So I actually started out in software development, and then I went to undergrad and to pay for undergrad I did ROTC, so I spent five years, almost five years as an infantry officer in the US Army, including some time overseas. And, you know, couldn’t imagine two more different chapter one and chapter two kind of stages of a career, but really great experience, really formative for me, helped me understand the messier human side of organizations and just how important it is to really have a mission and drive clear intent even in, you know, high stress, rapidly changing environments.
Speaker 3 00:04:45 And I think some of that experience is actually why I gravitate towards earlier stage and what can often be, you know, the messy and chaotic world of startups.
Speaker 2 00:04:55 I got it. And then. So then after that, you you you went to McKinsey for a little while, and then you worked at Google as well.
Speaker 3 00:05:03 That’s right. Yeah. So, you know, coming out of the military, you know, wanted to explore and kind of broaden my horizons a little bit. So did the thing that a lot of people do when they don’t know what they want to do next and went back to school, did an MBA and then joined McKinsey as a strategy consultant after that. I spent my first year as a generalist, and then in my second year, I really focused on on tech. That’s kind of what I was. I was drawn to, and then, left to go work at Google, where and I managed to kind of weasel my way into working with the corp dev team there, working with, startups that Google had acquired.
Speaker 3 00:05:42 But they were keeping as kind of standalone brands or entities. and that’s where I got to work with founders again. and so that’s really what gave me the push to go back to startups. And so I left Google and started doing that full time and spent, Did three different, roles with three different startups as a, as a go to market executive. over time was really fortunate that of those three teams, two of them exited another one. became a unicorn. and so I got to work with some very high quality teams, some great products. and got some, some amazing experiences along the way.
Speaker 2 00:06:17 That’s interesting. So when you’re at Google. You’re you’re required by Google. Do they do. I’m not sure. There’s a lot of variety, but the companies you worked with were they fairly stand alone. And were you kind of an advisor from Google and what were you helping them with?
Speaker 3 00:06:30 Yeah. That’s right. So, a lot of it was, figuring out from a go to market strategy perspective how to leverage the big distribution advantage that that Google could provide, because a lot of these startups had relatively nascent, you know, revenues, or, you know, distribution, especially relative to, you know, the massive sales organizations that the ads team or that YouTube had.
Speaker 3 00:06:53 So it’s like, how do we get plugged into those organizations? And then, you know, all the way down to some of the basics around, like, just how do we think about go to market, how do we think about, measuring what’s working and what’s not, those types of things.
Speaker 2 00:07:06 Oh, that’s sounds like a great, great experience. And so what what pushed you to kind of say, all right, now I want to go out and do this as an advisor.
Speaker 3 00:07:15 Yeah. So after my last full time role, I worked at the public company that acquired the last startup where I was CEO and head of sales. and I really enjoyed that experience. I kind of had the itch to go back to to earlier stage. And, you know, I spent some time reflecting and, and a lot of the lessons that I learned from kind of growth stage like series A, series B, series C, I realized some of those had, you know, those problems that we were working on.
Speaker 3 00:07:45 We could have made it easier on ourselves by starting earlier and setting the stage correctly from the beginning, as opposed to having to go back and kind of fix some of that stuff while we were scaling. and so I just kept getting pulled earlier and earlier, with the, the work that I was doing with clients. And I wanted to try going out on my own and, you know, seeing if I could create value in, by myself. So just took the leap, took the chance and, haven’t looked back.
Speaker 2 00:08:12 Well, fantastic. Let’s talk about some of the things you do with early stage founders. You know, one of the concepts you talked to me about was selling to learn versus selling to scale. What does that mean? And what what stage is that?
Speaker 3 00:08:27 Yeah. So a lot of founders, when they’re they come to me, they’re looking for help setting, a scalable foundation for go to market. And while I think that’s an admirable goal, oftentimes those founders, when I dig in, are actually in a different stage.
Speaker 3 00:08:43 They’re not ready to scale yet. They need to really refine they’re messaging their positioning, and even sometimes what the product does for their prospective customers. and in some of the, some cases, we’ve got customers who really don’t have much beyond a few design partners. And so they need to go and validate that what they are building will sell. and so I think of that as when you’re in the founder led sales mode, you should be really thinking about your objective is not creating scalable processes and playbooks, but rather learning and using that chance to optimize the fit between what you’re building and what the market needs.
Speaker 2 00:09:23 So we’re talking you know, we’re talking about product market fit. That is one of the most used and least understood, terms in early stage startups. What’s your definition for product market fit?
Speaker 3 00:09:37 Yeah. So I think there’s a couple components. and there’s a lot of people who’ve written much more detailed, you know, a perspectives on product market fit. And so I’m not going to try to, you know, rewrite all that.
Speaker 3 00:09:51 but I think the selling to learn phase is really about proving traction and, consistency, meaning that you’re actually able to sell your product and that that your customers, your early customers are using it and seeing value in the same way. That’s the selling to learn phase. And then I think to get to product market fit, you really also need to start to get into the selling to scale phase, which is that you need to prove that somebody that’s not the founder can sell this and that. You can actually you have some positive unit economics, meaning that the expected kind of post-acquisition value of a customer is greater than what it cost you to go and acquire a customer. and then the last piece of this is momentum, which is, you know, I’ve seen people talk about, you know, this is measuring like your inbound demand or the number of active deals that you’re working, but something like that, just depending on your go to market motion, needs to be compounding and accelerating over time to really feel like you have good product market fit.
Speaker 2 00:10:56 Terrific. So you’re you’re selling the learn. You’re you’re you’re figuring out what the problem you’re solving is. Do you have like a template for, for founders that you use to kind of like you find that they’re not organized enough and documenting what they’re learning. And how do you help them really crystallize that first stage?
Speaker 4 00:11:15 Yeah, it’s a good point.
Speaker 3 00:11:16 And and the key in what you just said is really writing things down and documenting it and then iterating over time. And, often founders are so busy, they wear many hats. And even if you’re in a team of 2 or 3 co-founders, often whoever is responsible for taking the product to market and doing selling is that’s not the only thing they’re responsible for. But I think, you know, of the activities that you can do, as a founder, writing down your process and building your own. You know, whether it’s like a one pager or a script, if you want. Some of that feels a little bit like too heavy. But, you know, doing the basics on that and then making sure you are reviewing your own calls and learning from them, each one like you is a is an opportunity.
Speaker 3 00:12:05 Don’t waste it. make sure you’re testing something out that’s very deliberate. And then when you find traction, make sure you’re repeating those things that work and discarding the things that don’t. Trying something else that’s new. That process, I’ve seen really help founders accelerate, especially with those first, you know, 10 to 20, conversations that they have with with new prospective customers. Those are really precious. And so you need to make sure you’re extracting as much value as possible out of that. so yes, I have some templates. but a lot of it is honestly just the forcing function of having a, you know, regular cadence with founders to go through this process and make sure that we are deliberate, about learning from from each and every conversation we have with prospective customers.
Speaker 2 00:12:50 Got it. Okay. So you’re working with founders. They’ve gotten their few initial sales. And, you know, they they’ve documented it based on some of the help that you’ve provided. So how do they make that bridge to non founder sales.
Speaker 2 00:13:05 That that’s a big one. And it’s really hard. But new people come in right. Because I think you and I talked previously as a founder you have this magic superpower right. You know the problem. You were passionate enough about the problem to start this business. You’ve you’ve built the product. You’re probably in love with the product, which has pros and cons. You’ve talked to customers, you can tell stories, but then you bring someone in who’s just knew. My goodness, that’s a that’s a giant chasm, right?
Speaker 3 00:13:32 Yeah, absolutely. And before I answer your question, there’s one other thing to that. That’s a bit of the founder sells magic, which is you can actually change the product, which hopefully.
Speaker 5 00:13:43 Hopefully, you know, so you have that that’s.
Speaker 2 00:13:45 Additional superpower.
Speaker 3 00:13:48 Yeah. Now if you’re if your first salespeople are also promising things and adding to your roadmap, maybe you actually haven’t solved for that one key part of the selling to learn, which is consistency. and so, you know, I’d say one, I think founders often bias towards wanting to bring somebody in, either as a full time sales person, or even sometimes as a, as an early sales leader.
Speaker 3 00:14:13 to early, I would say this selling to learn stages is really precious time. And being fully in control of the go to market is something that will only happen once. And so I would say make sure you really nail the criteria around selling to learn, which is that you’re actually getting people to pay for your product, not design partners, not, you know, 90% reduced rate below what you hope to be able to sell the product for. But like you’re actually selling your product and that you’re seeing consistency in both who you’re selling to. So like, what are my customers look like? You know, do I do I act? Can I take my early customer set and create an ICP from it pretty clearly as well as are they all using it the same way? One of the other things that’s.
Speaker 5 00:14:59 Selling it.
Speaker 2 00:15:01 To a consistent customer who’s using it the consistent way and probably, you know, getting getting consistent value that you can build upon. So those those four of the pillars. That’s right.
Speaker 5 00:15:12 Yeah.
Speaker 3 00:15:13 And and I think the, the other piece like that we often see in early founder led selling is there’s especially for technical founders who come who really know the problem well. They’re often adding in whether it’s like an explicitly a line item. They’re adding in services to right to make the product work. And it goes sometimes beyond onboarding. But, you know, continuing to to maintain the product, or to help build other processes to make sure that product plugs in. And that’s in particular for like mid, upper mid market and enterprise sales. but and that’s okay. I think you just want to really make sure that you’re not having to pivot too heavily in what each customer’s implementation of your product looks like, too. and it’s fine at the beginning. Explorer.
Speaker 5 00:16:00 Sure. But yeah, like, you want to pick the one that seems to be having a.
Speaker 2 00:16:03 Services enabled product. again, it’s a it’s a superpower, but also could be a challenge in terms of having tight product that’s repeatable. Right.
Speaker 2 00:16:11 And you know, when you talk about lifetime value in scale, that’s probably where you start seeing the impact of some of that customization versus you consistency, which I know is one of your tenets there.
Speaker 5 00:16:22 Yeah, absolutely.
Speaker 2 00:16:24 Okay. So you’ve done that. You’ve worked with the founder. They’ve done the discovery. They’ve done the learning. And now is that scary point. Like, I have to do something beyond myself. I have to scale. And, I think I wrote a blog way back when, you know, based on, you know, one of my founder experiences like, don’t we just need to hire salespeople? We just go hire salespeople or what’s the next step?
Speaker 5 00:16:48 Yeah.
Speaker 3 00:16:50 I mean, I think that that can be right. I’ve seen, you know, I think people consider one of three paths. Usually they’re either looking to bring on an SDR because the primary problem is actually about lead generation. And the founder still wants to run those early conversations. But what they need help with is, is creating demand.
Speaker 3 00:17:08 And that can be successful, especially if it’s a very technical product. And it would take a while to hand off, to somebody that can run a full sale cycle and close. the second is they want to bring in 1 or 2. I think it’s really common and popular nowadays to bring in two A’s. I think the idea there being that if you hire two at the same time, you can validate if it’s not working well, whether you know, it’s more about the person and the fit for the background that that person has and the role and the need. or whether it’s just not ready to be handed off yet. and then the third option is bringing in somebody who will be, a sales leader, or, you know, go to market leader that, you know, usually has seen this before and is ready to go back and do another lap starting at zero. But but takes more of an IC role at the beginning. I think that that is the third one is it’s really rare to find somebody who has truly done 0 to 10 million or something like that, and wants to take another lap.
Speaker 3 00:18:09 I think the most I’ve ever seen somebody do is two times. Yeah. it’s.
Speaker 5 00:18:13 Pretty exhausting, right?
Speaker 3 00:18:15 It’s extremely exhausting.
Speaker 5 00:18:17 Let’s go back.
Speaker 2 00:18:18 And, you know, I was saying that the hiring salespeople almost ingest because, like, I learned the hard way that, you know, maybe it’s not the last thing you should do, but someone, you know, a good sales expert said that’s the last thing you should do. And his point was, you hire salespeople and you haven’t documented all the things you’ve learned And put them into a positioning framework and maybe have a sales deck and all the things that you talked about earlier. If you haven’t taken those and turn them into something that you can train someone with. It’s really going to be difficult for those salespeople because they’re not just coming in and selling to their friends, right?
Speaker 3 00:18:49 That’s right. Yeah. I mean, I think, what we talked about earlier, which was the even when you are in that selling to learn phase and you’re iterating and experimenting and you’re changing what you do from call to call, you’re talking about writing it down and building a playbook.
Speaker 3 00:19:06 But that’s not the stage where you should be handing it off. When you can reuse the same playbook and you’re not having to change it every time. That’s when I think that’s a requirement for sure.
Speaker 5 00:19:17 Yeah, because now.
Speaker 2 00:19:18 You have something you can train someone with, right? That’s right. I suspect you’ve seen several examples of salespeople coming in and not having that training and surprise there. You know, not only are they not the founder, but they haven’t had the training and therefore they don’t get the benefit of that cell to learn cycle.
Speaker 3 00:19:36 That’s right. And look in a you know, in a pinch you can it is much more time intensive as a founder, but you can run those conversations and those processes side by side with your first aid, but then you’re just putting the burden of the work on them to create the playbook. I’ve seen it, you know, work better when it’s the founder doing that work with, you know, an advisor or somebody else that knows what playbook building looks like.
Speaker 3 00:20:02 and then the your first day, he walks into something with a much better chance of being able to successfully ramp, especially in those first, you know, 30 to 60 days where it’s critical to.
Speaker 5 00:20:12 Get a key.
Speaker 2 00:20:13 Element of of, you know, you’re offering do you help them build that, that, that toolkit, that, that playbook and what what are the chapters in that playbook?
Speaker 4 00:20:22 Yeah.
Speaker 3 00:20:23 So I mean, the really it depends on the selling process. For more transactional sales, you might need kind of like a one call closed script where you walk through everything from qualification and doing a mini demo of the product to position, you know, presenting pricing and then closing for, you know, enterprise sales cycles. It’s obviously much more drawn out. And you’ve got to have actually a series of playbooks around. Here’s how we run qualification and discovery calls. Here’s how we run demo and scoping calls. You know, here’s how we run our validation events. And then, you know, here’s how we run through the procurement process, legal and, you know, compliance and all those types of things.
Speaker 3 00:21:05 So it really does need to be fit to the market.
Speaker 2 00:21:09 The latter is an enterprise sales motion. The former is is much more of a, you know, SMB or that’s right. Higher, higher volume sales process. But you know, but but if you’re not a, a trained sales professional, you probably don’t have those playbooks lying around that you can just roll out.
Speaker 3 00:21:26 You know, and in fact, like there’s often you may be forgetting to do things like, hey, I’m running a sales, hoping to run a sales cycle, and eventually sell this product for hundreds of thousands of dollars. I need to have a, validation event or, you know, I need to to learn how to do a proof of concept, like some of those things. you know, just a founder may not be aware that that’s that’s generally how those that type of customer buys. So, yeah, a lot of these are just based off of best practice. And then we go from very early like first principles of, you know, how does this product need to be sold.
Speaker 3 00:22:03 And then we’re testing those over time and they’re kind of evolving. and then yeah, eventually your, your, your early sales people and your early sales later they’re going to create a different version of the playbook that doesn’t allow for founder magic. That’s a lot more detailed. that has, you know, some of the materials from your marketing, what your marketing team will eventually create around case studies in those types of things.
Speaker 5 00:22:25 Right.
Speaker 2 00:22:25 What are your thoughts on when to hire the sales leader?
Speaker 3 00:22:29 So I, I think it needs to be when you have pretty significant traction and multiple salespeople that are hitting and hopefully exceeding quota and ramping quickly. one of the challenges with hiring really good, like a VP of sales or VP of growth, as a startup, is that you’re asking somebody to take a pretty significant risk with their career. they tend to come from, you know, they tend to have done well and gotten with a company to series B, series C or beyond. And so the ones that you want are going to really rigorously do their diligence around the momentum that the company already has.
Speaker 3 00:23:10 and so you want to make sure that you have that like it’s I’ve worked with clients where we went out too early and just the caliber of candidates that responded to, you know, our posting was very different, even just three months later, because of how much more momentum we’ve been able to build and the, you know, the proof that we were succeeding in the market, and retaining customers and expanding customers, that type of thing. as well as just, you know, what’s your, your what’s your, you know, size of your company as a starting point, most of these, high quality VP’s are going to want to walk into a team of at least four A’s, all of whom are doing well, so that they can just build on something that’s successful.
Speaker 2 00:23:53 Awesome, awesome. That that makes that makes good sense. Terrific. So. So tell me where people can find you.
Speaker 3 00:24:05 well, feel free to visit my website, Dan Chapman. Com I’ve got a link there where you can book time with me, if that’s, something you’d like to chat about in more detail.
Speaker 3 00:24:16 I’m also just Dan at Dan chapman.com. If you want to shoot me an email and you can find me on LinkedIn, I’d be happy to connect. I need to be better about, about sharing some of these thoughts a little bit more consistently, consistently. but I’m planning to to start doing that soon. So look for for more content for me coming to.
Speaker 5 00:24:34 Well that’s.
Speaker 2 00:24:34 Terrific. And, anyone you want to shout out that the, that helped you, helped you, get to where you are now?
Speaker 3 00:24:42 Yeah, absolutely. I mean, there’s too many to name individually, but, to all the founders and investors who believed in me when I was just starting out and getting back into startups, you know, coming out of big tech, Google and all that. to the teams I’ve been honored to lead who make the job just so rewarding. and the, you know, the founders who trust me now as an advisor and a fractional CRO, I’m truly grateful for the chance to get to help people out along the journey.
Speaker 2 00:25:10 Hey, another another thing we like to do is share some, you know, obviously people can come talk to you specifically, but I know you’ve got some. You like your your reader and you’ve got some books that you think are really valuable on this topic. What would you recommend if people want to start out by just reading reading up on the topic.
Speaker 3 00:25:25 Yeah. I mean, look, if you’re starting from zero, there’s a lot of good, like classic sales books. I’ll talk about one that is relatively newer and that I’ve really enjoyed. And, you know, kind of like put some of the principles to use with my clients, which is the jolt effect. It’s a, really about, it’s a follow up to kind of the challenger sale. and it’s a great newer one. If you’re struggling to get buyers to commit to changing and understanding what it takes. like if you’ve got prospects who understand that what their, you know, their current approach isn’t working, they understand the value that’s on the table, but they’re there’s something that’s holding them back,
Speaker 5 00:26:06 Or taking the plunge stick.
Speaker 2 00:26:09 Which is get things moving. That’s a good, good word for it.
Speaker 5 00:26:14 Yeah, it’s a great book.
Speaker 3 00:26:15 And, you know, we don’t have time to go into all the principles. but, you know, I’ve spent some time with my teams kind of going over some of those. And it’s a very practical book. It’s not just theoretical like you can put those lessons to use right away. I’m also a big fan of not just sales books, but kind of broader business, reads. And I really liked, The Outsiders, which is about, you know, it’s like a series of stories about unconventional CEOs and how they approached, you know, their business and created, outlier type results. a classic book on strategy, is good strategy, bad strategy. And then there’s one, called the Success Equation, which is it’s a bit of a humbling read because it’s, it talks about understanding the impact that luck and randomness have had on have on success and, and even, you know, how to quantify that.
Speaker 3 00:27:12 And I think it’s something that, frankly, those of us in the world of venture, you know, should keep in mind, when we when we think about what we’ve done in the past, and maybe that, you know, it’s not just about us being great, but a little bit of luck involved too.
Speaker 2 00:27:25 Of course there is. That sounds great. I’m going to I’m going to write those down and check them out. Dan, this has been great. Great great topic. I wish you best of luck. And I’m sure that your your clients are happy to work with you and really dive into this. There’s nothing more important than early sales, early stage sales, traction. And I love your focus on it and look forward to continuing our conversation. Thanks for joining us this morning.
Speaker 3 00:27:49 Yeah. Thanks, Julian.
Speaker 1 00:27:54 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.
Speaker 1 00:28:05 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.

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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 Hello and thank you for joining the Growth Elevated Leadership Podcast, where each week I talk to entrepreneurs and leaders in the tech industry. past guests have included CEOs and CXOs of great companies like Work Front, Healthcare, Rebecca Systems in Moment, Vox, Pop me, the San Francisco 40 Niners, and many more. this episode is brought to you by Growth elevated at growth elevated. We’re a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learnings in an effort to become better leaders. We do this through educational programs like this podcast as well as our blog and of course, our annual tech summit up in the Wasatch Mountains of beautiful Utah. If you enjoy skiing and working and networking with other tech leaders, check us out at Growth elevated.com.
Speaker 2 00:01:20 Today I’m super excited to welcome Rob cialis to the podcast. Rob is a a technology leader and and CEO in Utah. He has a proven track record of driving, business transformations. And one example we’ll talk about today is, is the strategic rebranding of auto that that led to almost ten X revenue growth. His expertise is in talent acquisition, team building and strategic partnerships. And he’s used those those capabilities to to fuel growth and success. As co-founder and CEO of Observe Point, he expanded the company globally, securing strategic partnerships and achieving significant financial milestones. his leadership is marked by a focus on innovation, operational excellence, and cultivating a strong corporate culture. Please welcome to the show, Rob. Silas.
Speaker 3 00:02:13 Hi, Julien.
Speaker 2 00:02:14 Hey, Rob. How are you?
Speaker 3 00:02:15 I’m doing well. It’s great to be here.
Speaker 2 00:02:17 Yeah. Thanks. Thanks. Great to have you on here. today, I’m looking forward to catching up with you. So, you know, tell us a little bit about Observe Point. You know, you and I got to know each other many years ago when you were the CEO of Observe Point.
Speaker 2 00:02:31 It’s a it’s a very successful company in Utah. You you raised several rounds and grew that for for several years. you know, give us a little background about that company, how you got involved in it, and what do they do with their customers?
Speaker 3 00:02:44 Yeah. You bet. Well, sir, point was just a terrific, you know, ride in a in a great company. And it’s even better company today. The company was co-founded by myself and John Pestana and we really understood that you’ve got to get your head around data privacy and governance and what’s happening on your website. And so we just recognized the need in the market and decided to kind of jump right in. And this was back in, 2011, 2012 when we really kind of got started.
Speaker 2 00:03:15 And it was it, was it the regulatory, was it driven by regulatory complexity, just cybersecurity complexity? What was the catalyst that you saw in the marketplace that said, hey, we can we can we can help people deal with this?
Speaker 3 00:03:28 Yeah, that that’s an important component now.
Speaker 3 00:03:30 But it was not a very important component in the early days. The early days when we started, the company was just around the pain of implementation and governance around martech, martech.
Speaker 2 00:03:41 So really marketing and all those, all those cookies and, and, tags that you’re putting on.
Speaker 3 00:03:45 Yeah. I mean, you better have an idea what’s happening on your website. Right? That’s that’s really what it comes down to today. Back then, it came down to you’re a marketing practitioner of an analytics team in a big digital company, and you’re trying to manage all these different martech technologies that are rapidly changing and understand what’s happening. And there’s just a need to kind of manage and govern that. And that’s kind of where we started. We’re almost at the execution layer, if you will.
Speaker 2 00:04:11 You know what? I’m remembering our conversations back then and and I recall you saying, like, hey, you might be in your second or third iteration of team leaders in marketing, and you have all the the baggage from previous teams still on the website, and you might not even know it.
Speaker 2 00:04:25 So you might have multiple different cookies or, or, automation, tools doing the same thing or maybe even working contradictory to each other. Right?
Speaker 3 00:04:34 Absolutely. Yeah. I do remember that conversation that was and still is a really standard pain point because large brands, large companies usually have a lot of cooks in the kitchen, and it’s pretty messy in there. And so who’s actually collecting what, when and where? Who owns that? has always been a real problem in the martech space on websites in particular. And now it’s it’s changed a little bit Now the market says you better govern and understand what’s happening on the website. And so part of the regulatory piece that you mentioned has really become a reflection of the growth of martech. And and frankly, at times, companies inability to not get every little piece of data that they possibly can on a, on somebody. And so that’s kind of a response to it saying, hey, you need to tell us what you’re actually collecting and make sure that’s all that you’re collecting.
Speaker 3 00:05:23 And, you know, that’s a difficult thing for, you know, marketers. that’s what I observed. Point exists. And that’s the problem that we solve.
Speaker 2 00:05:32 Oh, terrific. Okay, so you’d seen this problem. obviously you and your partner were very active in web marketing historically, so you kind of in this space, you saw it. And who were you? Who were you selling to? you know, how long did it take you to find that product market fit, where you understand the buyer and who had the pain at the customer?
Speaker 3 00:05:53 Well, in the early days, the initial thrust was into large enterprise, our first real key customer that really changed the business. And this is a kind of a story into itself, was we landed Turner. So Turner’s all the different Turner properties, including CNN, which at the time was one of the most trafficked websites in the world. And with that, we were able to really, really leverage that the, the, the problem that kind of that happened, you know, when, when people in, in our tech world say, you know, that first whale customer is really, you know, a dangerous customer because they can kind of like take you places you don’t necessarily want to go.
Speaker 3 00:06:32 And that’s that’s a little bit about what happened to us. But in a way that was a little bit unexpected. It was just that by being bootstrapped and, and then raising a really pretty modest series A, I think we were really under horsepower to try to attack a enterprise company as a really small brand. So we built kind of a lightweight product that. But for heavyweight type customers. and so we experience some real pain there. I would say the product market fit is only come in the last 2 or 3 years, where the market’s really kind of come to us in the technology chops of the company have really, improved dramatically. And because of that, you know, the company is well positioned now. And and that’s an interesting story too for people. Sometimes it takes time, which is the most frustrating answer anybody ever wants to hear.
Speaker 2 00:07:20 Oh, absolutely. That, you know, you’re under pressure the minute you take capital or even even before you said you bootstrapped. I mean, let me let me be really clear that that’s not a lower stress situation, right? Because you’re constantly trying to create capital.
Speaker 2 00:07:33 How long did you bootstrap like let’s let’s start. You started this company when in 2012.
Speaker 3 00:07:37 Well, we actually started before that, but it was not a real serious priority for myself or for my co-founder, John Pestana. I had sold a company with myself and two other founders to think partnership, and so I wasn’t particularly really ready to go out and do something. And, you know, John was, you know, figuring out how his transition from, you know, out of armature would eventually play out. And so it’s just a real light discussion. We really didn’t get going until we picked up Turner. Is that launch customer. Then we really.
Speaker 2 00:08:08 It was that early before you had even.
Speaker 3 00:08:10 Yeah we.
Speaker 2 00:08:11 Do it. So you get a whale very early okay. Now I see the gravity of that situation.
Speaker 3 00:08:16 That’s right. A couple developers, you know, you know, landing away. Right. We were bootstrapped and and our in the absurd point solution is a highly technical solution. It’s a highly, complex series of problems to solve.
Speaker 3 00:08:30 Imagine every single page on everybody’s website. Exactly. All the different martech technologies that are happening, the dynamic changes that happen every moment of every day. Being able to crawl all of that, catalog that and report that back to the brand with any type of accuracy. That’s a really hard problem to solve. And that nut’s now been cracked. But it was really hard in the beginning, and it made us, you know, the way it was going, wherever it really wanted.
Speaker 2 00:08:55 Okay. Yeah. He’s working. I see the boat being pulled by the whale. Especially if you only have a few few employees. You haven’t raised any capital yet. And so, you know, before that big enterprise customer, were you thinking you’re going to have a light, a light stack for kind of the SMB market or you really we just weren’t sure.
Speaker 3 00:09:14 Yeah, I don’t think we were sure. absurd point exists for anybody who has a website. And so I think we kind of thought, well, anybody who has a website, but it really turns out that the pain points exist highest at the enterprise level, and then they have the, the budget to be able to go out and to add a solution that helps resolve and remediate that for them.
Speaker 2 00:09:35 So when you, you know, again, whether it’s by a priori strategy or you, you get a whale hooked and starts pulling your boat around, you’ve got an enterprise customer, you’re starting to focus on the enterprise customer. Is that what drove you to say, hey, we need to put some capital in this and and do full time engagement. You know, for you and John.
Speaker 3 00:09:52 That was a big part of it for sure. The other was some entry of competition into the market. that that kind of changed, I think the outlook, we felt like the market was going to happen quickly, and if anybody else came in and got a big chunk, they’d catch up very quickly to where we were at. So it was time to the market.
Speaker 2 00:10:09 Yeah, actually, I think that’s a negative and a positive. Right. Because it’s a negative. You no longer have your own ocean, but positive is your validation that this is a real problem. People want to spend money to solve. Right.
Speaker 3 00:10:20 Exactly.
Speaker 2 00:10:22 Okay. So so when did you raise your, your first round and, and, you know, tell us a little bit about your, your, your funding journey, because sometimes we use those as benchmarks in terms of, you know, when you’re ready to raise a series A and, and, and what you learn from that experience. And then I know you guys raised a very successful series B and you know, you know, I’ve grown to to to be a very meaningful company at this point.
Speaker 3 00:10:43 Sure. We the first round was 2014 with Pelion, who are been absolutely fantastic people to work with. Chris Cooper and and Blake, who generally are best probably known through that firm, are just tremendous VC individuals. I mean, they they always are rooting for you. We never had an issue at all. Super positive experience with them.
Speaker 2 00:11:10 Fantastic. And so you raised that series A like, how large were you as a company at that point?
Speaker 3 00:11:16 we just crossed a million and RR and okay, $4 million round.
Speaker 2 00:11:21 Fantastic. And then, you know, how far did you grow before you started looking and saying, okay, maybe series B, we can double down here? Yeah.
Speaker 3 00:11:31 Well, when we, we had been like really serious bootstrapping. So when we decided to go ahead and, and, you know, take the loan, we were, we were eyes open that that’s really what it is. It’s an equity investment. But it’s kind of like a loan you have to pay back. And it just kind of changed the dynamics of like, we got to go. Obviously that money was raised to grow the business, not to sit there and with that, we very quickly went into negative burn, hired a lot of people, and kind of started going down that trajectory. So we were to almost at three years before we, raised our series B with Mercado,
Speaker 2 00:12:10 And, and, you know, what was the milestones you hit that kind of gave you say, okay, now we’re ready for a series B?
Speaker 3 00:12:16 Well, there are a couple, customer count came was coming up significantly.
Speaker 3 00:12:20 We had some, you know, really great wins with kind of exceptional brands, you know, Lowe’s American Express, you know, at one time, you know, 250 out of the fortune 500 companies. I think that number probably even higher now, obviously, as the company has grown. But we had we were getting significant early penetration, like we were starting to knock off these really big brands. And we have a, you know, credible NASCAR slide, if you will. And that was kind of.
Speaker 2 00:12:49 You had you had half the fortune 500.
Speaker 3 00:12:51 We had between that and some agencies that kind of service, those, we had very early deep penetration into that market. But that but that was also that same kind of problem. We were a lightweight product in a heavyweight market, and we did a great job punching above our weight class. optically, our a partnership with Adobe, that were incredible to work with. We just did an amazing job, I think punching above our weight class, but it was a hard technology problem to solve, and we were kind of really underpowered there.
Speaker 3 00:13:22 And that that led to just not being able to retain those customers on the basis that we wanted to. That led to a not not a, not negative retention, but overall just kind of real flat to soft retention. and then the problem we the problem started getting bigger and bigger. We had more of these bigger customers and it’s very difficult to catch up. This was also at a time when the technology landscape was different too. We couldn’t scale with AWS because AWS didn’t have some of the loops and hooks that we needed, and hadn’t even built out some of the functionality we were buying servers.
Speaker 2 00:13:59 Wow.
Speaker 3 00:14:00 Yeah, we were we were buying racks, buying servers because of what we were trying to do to solve this problem, to be accurate. And so it just became a much more expensive business. It became a much more, you know, hard, hard core engineering business, deeper technology business, especially with our customer base. And we were just probably under horsepower in a lot of ways.
Speaker 2 00:14:22 So with the benefit of what you know now, you know, whether it be something you might have done differently, you know, you, you, you had this great traction and, and demonstration of need from the marketplace.
Speaker 2 00:14:34 Maybe, like you said, they’re punching above your weight in terms of the size of these companies. You know, what do you recommend to someone who’s got that kind of challenge today in terms of how do you, you know, catch up from a capital, from an expertise, from a capabilities perspective, what you know, if you could, like, rewrite the story, what? What would you have told your younger self?
Speaker 3 00:14:55 Yeah. I think, to really understand how long the lag is between, you know, in the creation of technology. Right. it just you can add a sales person and they can go out and contribute to the business, you know, within 60 to 90 days. And that’s at the time when a, generally a developer starts feeling relatively ramped and in the business, and their contributions are still much further down the way. I think it’s it’s a different landscape now. So I don’t know if the I don’t know if the exact same lessons kind of almost apply in the same way, but it does take longer and it’s harder to build tech.
Speaker 3 00:15:29 And so it just needs more time. And so when you scale, scale with the hard stuff, first, scale with the things that are more difficult to scale first, it’s easier to add the lighter weight stuff. And we kind of added all of it once. And so one, you know, even exacerbated the problem. More of what we had, you know, being a heavyweight with the lightweight, lightweight budget and kind of a lightweight, sized business talent, headcount experience, those type of things.
Speaker 2 00:15:57 Yeah. Scaling technology is hard no matter what. But then when you, when you have to go to enterprise, I mean quite often that’s an entirely separate chapter for companies as they go along the journey. And it I’ve never seen it be a six month exercise or a one year exercise. It always takes longer than than than you think. And it sounds like you had that challenge even maybe before you were ready, which is a blessing and a curse, I guess.
Speaker 3 00:16:23 Yeah, that’s right. It is a blessing and a curse.
Speaker 3 00:16:26 And I think a lot of the companies that come through it often, I think, you know, either have a they just basically solved that technology problem sooner. They’re able to solve it soon enough that it doesn’t become a little bit of a ticking time bomb later. And we were able to kind of diffuse it barely, and, and move forward, in the last 3 or 4 years. There’s, you know, since I’ve left the company, John stepped in to really focus on technology and product. Then it’s been a complete landscape change, and now the product market fit is really there for the business, and the business is primed for a pretty exceptional run going forward.
Speaker 2 00:17:08 Oh that’s exciting. So, you know, what were some of the we’re talking about the challenges, but talk about some of the things you’re most proud of at the journey and any, any milestones or accomplishments that, you want to highlight?
Speaker 3 00:17:20 Yeah. There was a couple different things I, I thought did particularly well in the business.
Speaker 3 00:17:25 I mean, we, we won the awards that you win when you do certain things. Right. We made the Deloitte 500 list on the on the tech side that’s, you know, an enviable list to to be able to get on, you know, 5 or 6 years we were, you know, multiple years were Mountain West capital, you know, top 50 fastest growing in the state of Utah. So and that continues still. So the lot is just tremendous thing. I think we built a really good culture, a culture that people that care about each other and are dedicated, trying to solve hard problems. I think that was, a really good piece. I think the company did a good job of finding talent every place you could find it. you know, we had we have we’ve had a, you know, an amazing story of somebody that started at the front desk. And, you know, she’s now in senior leadership, you know, over at a at a public company. that’s.
Speaker 2 00:18:18 Awesome.
Speaker 3 00:18:18 So those type of things, I think we did, you know, particularly well and I’m proud of that. I, I see people that I worked with, you know, currently and because I’m still on the board and while I was active as CEO and there’s a deep connection and I get a lot of people saying that was the funnest company in the funnest place and the most enjoyable work experience I’ve had. And I’ve heard that heard that enough times to to really believe that. And it means a lot to me.
Speaker 2 00:18:47 Well, that’s awesome that that speaks to the culture you’re able to build. And and I know that special bond you have with the with with those team members that helped you, helped you build it. So that’s a that’s it’s one of the real upsides of what’s often a very challenging process. Right.
Speaker 3 00:19:03 For sure. Absolutely.
Speaker 2 00:19:05 So okay, so you had a great run there. And then you, you you jumped into a business called auto and and you, you know, it feels like the impact was a little faster in this one.
Speaker 2 00:19:15 Tell it tell. Give us the quick overview of auto please.
Speaker 3 00:19:17 Right. Yes. it was, you know, Covid year, right. Coming right off. Covid is, so, you know, a lot of different businesses were trying to find the talent and I was looking for like a next opportunity. And I didn’t, you know, have a lot of familiarity with the founder or the investors at the time. But I was I was brought in by one of investors. I did know, and it was a great little company. It was servicing independent car dealers and it was a it was a tech play. And they had actually like homegrown, some pretty interesting tech, and it just needed a kind of more experienced, I think, scaler to come in and try to help scale the business. I think the first thing, the biggest thing to mention there is just kind of getting your branding and your and your feeling right for the for the market, for what you’re trying to communicate. There was a kind of a founder name called First Period Administrators, and I rebranded it as auto.
Speaker 3 00:20:12 And that really did just instantly.
Speaker 2 00:20:15 Tell us the before and after again, I think, I think I like the second one, but give us the the first name was what.
Speaker 3 00:20:20 First secured administrators.
Speaker 2 00:20:22 That’s a tough one. Yeah, that’s a tough one. I thought it was a lot easier to remember and logically associate with the industry. Right.
Speaker 3 00:20:29 Yeah. Auto with two T’s. It’s like it’s it’s been really great for that business. So you know grew the business a lot there. you know that’s an interesting space as well. There’s been so many businesses that have been really impacted by what’s happened in the marketplace, and that one in particular, you know everybody who’s been paying attention to the used car market and new car market knows the automobile industry is super, unstable with inventory problems for a long period of time, you know, shortages in parts and then inflation and interest rates. There was a lot of headwinds in that business. And, you know, ultimately, I thought the business could be better served by being more of a tech focused business.
Speaker 3 00:21:10 And the founder really had his original vision and wanted to continue going down that original vision. I really respect that. So, you know, we decided to spin off the technology side into a little business to see what that would look like, to kind of test the marketplace. And that’s that’s a quick company I’m involved with as a founder called metrics, metrics AI. So it’s basically pulled the tech out of out of auto enabled to leverage that into a different market, which has been it’s been a fun little couple of months doing that.
Speaker 2 00:21:40 Well, fantastic. Congratulations on that. So, you know, now you’re at a point where you’ve been through the grind at a at a business, you know, taking it, you know, through from from, bootstrap through series A through series B, getting to be a meaningful size company, you’ve been able to take some of your expertise and apply it to another, another tech company in the vertical, you know, software space for, for autos. you know what, if you look back at this, what what are some of the biggest lessons you you carry forward if you had a chance to do it again?
Speaker 3 00:22:14 that’s really hard.
Speaker 3 00:22:16 how much time do we have? Right.
Speaker 2 00:22:17 Pick. Pick 1 or 2.
Speaker 3 00:22:19 Yeah. I think anytime you you’ve been an operator, you look back. I think number one thing is, you know, find coaches and expertise. I did that observe point, but I did a little late. And so find others that you can really, help pull you out of the day to day part of the business. or if you’re the type of CEO and that is actually very outwardly facing the business and don’t spend a lot of time finding a coach that helps you integrate and pull that into the business on like an execution layer. Those are the things that are important to. And so the best. You know, we just got done watching the Olympics. Every single person that made the Olympic team that there for any major country had multiple coaches. Yes, multiple levels of performance, performance coaching, nutrition, coaching, all these different kind of things. And except for.
Speaker 2 00:23:11 That guy in the in the the handgun shooting who just kind of walked off the street and won.
Speaker 3 00:23:17 Well yeah. Yeah.
Speaker 2 00:23:18 Well there is.
Speaker 3 00:23:19 Yeah, yeah. He showed up late after buying a pack of Lucky’s, you know, across the street. I mean, it’s it’s pretty amazing what I love.
Speaker 2 00:23:26 Watching that again because like, you know it obviously was a was a big hit with the media. But I went and watched that and I noticed like, you know, all around him there’s the coaches huddling with all the other other people. And you know, sometimes you have just the Clint Eastwood style. He just comes and goes out and shoots. But we all look at that and say, that’s what you should be as a founder, right? Like, like that guy. But the truth is there were 50 competitors and everybody else was working with with with coaches.
Speaker 3 00:23:49 That’s right. Yeah. And it might be that he works diligently with the coach in prep.
Speaker 2 00:23:54 Yeah. Behind the scenes. Right.
Speaker 3 00:23:56 But not in performance in like in at the actual performance. And that’s probably a great lesson of coaching too, is find the type of style that works particularly for you and and what you’re particularly needing and kind of week on if you will.
Speaker 2 00:24:09 Yeah. So so okay so you’re looking back. You do that sooner. Where would you look. How do you find these people. Right. You talk to your your board. Do you talk to your your investors. Like how do you you know you’re it’s not it’s not as easy as you think. Right. There’s a reason why both you and I didn’t do that immediately.
Speaker 3 00:24:26 Yeah, I, I think there’s there’s a perception issue, that hopefully I think is changing, for, for a lot of, you know, CEOs, you know, I grew up with a and understanding CEOs like, you know, like Steve and, you know, nobody thought Steve We’ve needed a CEO coach because he didn’t need a CEO coach. But he you know, he’s a pretty unique individual. and there’s other parts of his life that, you know, maybe in with some hindsight, we don’t look at in the same glowing way that we did maybe at the time, especially with the work life balance that I think a lot of people have come to understand is a real high value to them.
Speaker 3 00:25:07 so finding performance coaching and doing that and there’s they’re all over the place. you know, that’s one of the things I’ve started to transition into because I just so believe in it. I’ve started, coaching with Petra. Petra is a been a tremendous, you know, group to join. There’s only about a dozen of us, to even, like, possibly come a coach. You have to have a pretty amazing track record as a 20 year plus, type of executive. And, you know, we come in to really try to help businesses, scale up into bigger, better, more performant businesses. And we really sit there at the execution layer. And it’s been that’s my favorite layer of the business. It’s kind of the most interesting to me, so I’ve really enjoyed doing it to basically sharpen my skills as well. And it makes me a better, better individual and a better person as a coach because I don’t want to stand in front of people without knowing and believing in what I say and what I do and and how I live my life.
Speaker 2 00:26:12 Well that’s awesome. That’s great to hear that, that you found that and are paying it forward through your experience and, and in partnership with this group like Petra and, I, I’m glad to hear you’re enjoying it.
Speaker 3 00:26:25 It’s it’s been pretty incredible experience. I’ve been in front of companies. I never thought I would buy asphalt companies, veterinarian, pharmaceutical supply companies. But you very quickly understand how important it is that executive teams scale and grow with the business. And so for, you know everybody that listens to to you, Julian, in this podcast, you know, you have to find people that work for you now and in the future. And that doesn’t mean that they’re along for the ride forever. Some people in early part of businesses that are amazing Swiss Army knives, you know, that’s where they should stay in the business on the executive team. And that’s probably one of the hardest things to learn as a CEO is there’s a time and a place for just about everybody, including yourself.
Speaker 2 00:27:12 And that is a huge that is a huge lesson.
Speaker 2 00:27:15 And it’s almost impossible to to come in with that expectation, right? Because there’s so many forces that are trying to emotionally and circumstantially and, and pressure wise, you know, causing you to fall into that trap. And it’s one of those ones that I find is the easiest to recognize. Looking backwards.
Speaker 3 00:27:33 Agreed. It’s certainly hard to see in the moment, isn’t it? And that’s why sometimes, you know, coaching or advising, whether you’re talking to your board and you hopefully you have that kind of VCs that I was lucky enough to have, that I could do those type of things and have those conversations. But that’s really important to be able to to, you know, get out of the weeds and really understand what’s working in the business and what’s not. And it’s tough to do that when you’re in there hacking away, building the path for everybody else. But that’s what you have to do at times as a CEO. So you know that going in between those altitudes, I think, has always been the most difficult challenge for CEOs trying to scale companies.
Speaker 2 00:28:11 I think that’s a great, great lesson. And, I’ve heard it many times before. I think that’s that’s something that, would be really valuable to learn. the other thing, going back to the Olympics, you’re very passionate about about mental and physical health and longevity. Yeah. I’m going to embarrass you a little bit, but I think you you you shared that, you know, you looked at your biological age, and it was it was incredibly impressive and better than mine. So, you know, talk to us a little bit about longevity.
Speaker 3 00:28:40 Well, I think if you know the future is going to be very different. And for one of the reasons is, I think longevity science is very quickly figuring out how we dramatically slow aging. my most recent test is, you know, I’m I turned 53 this year, and my DNA test, which not everybody believes in, says I’m 43.
Speaker 2 00:29:02 So congratulations. I just got ten years there. That’s fantastic.
Speaker 3 00:29:06 But, you know, being healthy is a great part of performance.
Speaker 3 00:29:10 If you can’t, if you want excellent performance on the outside, you have to have excellent performance I think on the inside. and part of that is having a focus on, you know, longevity and, and overall health and my sense of what longevity science is going to do is it’ll change the landscape. I mean, we might have a CEO who’s 100 years old on the inside, but we’ve done so much with the longevity that they, you know, function like a 35 year old with that kind of drive. And what does that mean for the future of leadership? I think that’s a big part of what’s going to be answered here in the next 20 to 30 years, because I think we’re that close.
Speaker 2 00:29:46 So I can’t think of anything more exciting. Right? It’s the it’s literally fountain of youth at the same time. I’ll use myself as an example. I get excited about that when I, when I hear the success someone like you has had. And then I get intimidated by the, the mass of information that, you know, and people trying to sell you this supplement or that, like, do you have a recommendation of one source? If I wanted to learn about longevity and something that has some practical but but, but you know, in a busy lives of CEOs.
Speaker 2 00:30:14 Yeah.
Speaker 3 00:30:15 The guy who’s the guy who’s probably got the most noise, but and the most accomplishments and the most science, while at the same time probably having the biggest number of detractors is Brian Johnson, who’s actually a Utah ex Utah. He’s ex Braintree Venmo.
Speaker 2 00:30:29 Okay.
Speaker 3 00:30:31 and it’s a fascinating story on its own, but he’s probably done the most to try to take this amount of knowledge. He’s like, he’s hired an entire staff and spends millions of dollars a year trying to analyze the information, and then he makes it all free. And then he says, this is what he’s doing. He’s now he does now have a product and supplement that he sells, but he encourages you to do it other ways to only do it that way if you’re too lazy to do it any other way. and I kind of like that approach. I think he’s honest in his approach and is about as good a source as anybody. Doctor David Sinclair and of the Harvard MIT lab, he’s probably the best. If you really want to get to right to a technical source.
Speaker 3 00:31:10 He’s been on Rogan most multiple times and multiple podcasts. So David Sinclair is a is a good initial taste of what longevity science has in the future as well, because he’s on the cutting edge of what they’re doing on the actual lab side of it. Brian Johnson’s on the actual cutting edge of how we practically apply that to our lives, which is really the really easy fundamentals. Sleep sleeps. The most important thing that you do if you don’t sleep for 24 hours, you’re basically blowing like a point one. You’re you’re essentially be DUI. That’s how bad our decision making is without 24 hours for most people. That’s number one. Number two is basic exercise. Nothing crazy like the for longevity. It’s the minimal amount of exercise with the maximal, input towards health and lifespan. So you’re not saying let’s go run a triathlon. That’s bad for the body. The longevity experts say let’s go the minimal with the most impact. So it’s efficiency which everybody in this audience will love.
Speaker 2 00:32:09 So what’s an example of that? What do you what do you what’s your go to.
Speaker 3 00:32:12 Well so like you can do like an hour workout and just do a like a light dumbbell hit workout and get kill two birds with one stone. You’re doing some weight training and you’re raising your heart rate in an interval type, hit oriented way. that’s like 35, 40 minutes a day. And between that and then a good diet. Mediterranean is probably the easiest. But there’s a lot of good diets. That’s where most people get hung up. Most people get way too wrapped around the axle of diet.
Speaker 2 00:32:41 Right. And the supplements and this and that powder and pill.
Speaker 3 00:32:45 And that’s why doing like the blueprint kind of way is easy, because you said, look, this is three years and millions of dollars of research. Use it this way if you don’t want to figure it out yourself. But if you want to buy it yourself, here’s how you do it. and then the last, the last couple that I think have to be mentioned is just a mental and emotional health. We are now, after living through Covid, really understanding what’s happening with mental health.
Speaker 3 00:33:10 And I think, you know, there’s questions on social media and all these other types of things. I think it’s much more aware than we’ve ever been, and it should be a healthy, normal part of our discussion in our health is our mental and emotional health. Because who wants to live forever if you’re not happy? Who wants to live? Who wants to live a long time? If you feel depressed or anxious all the time, right? So everybody has to be healthy, healthy mind and body.
Speaker 2 00:33:34 And the impact that it has on your team. Who wants to work for a grouch or someone who hasn’t slept for 24 hours, or someone who’s not happy meant, you know, mentally and physically. So I think that’s a great point and I’m grateful for you bringing that up. So, Rob, this has been a fantastic conversation. Where can people find you today?
Speaker 3 00:33:53 Easiest way is probably LinkedIn. Or if you want to send me an email. Feel free Robert Tsai.
Speaker 2 00:33:59 Awesome. Well, Rob, thanks for taking time today.
Speaker 2 00:34:01 I hope we’ll see you at the The Tech Summit in January. And well, appreciate appreciate you joining us today.
Speaker 1 00:34:12 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.

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 1
00:00:27
Hey gang! Today’s topic is how to hire slow and how to hire well. Previously in the earlier podcast, we we identified the theme and it was a trail marker about firing fast and hiring slow. And the point about hiring slow is not so much that you want it to be a slow process, but you want to hire well. And that implies that sometimes you want to take your time to make sure you get it right. And today we’re going to talk about how to actually do that. The key to do that is using a structured hiring process. Structure and data is the key to increase the quality of your hires, and you’re going to be using standardized hiring tools to make sure that you can get it right. Simple.

Speaker 1
00:01:13
The simplest, summary is we want to have standardized job descriptions, standardized scorecards, and a standardized process. And by doing that across your teams consistently, you will get better and better at this. And you can make hiring a competitive advantage. Now, why are we talking about this today? You know we we said fire fast, hire slow. And we kind of left it there and said that’s just important. We talked about why that’s difficult. And one of the reasons it’s so difficult is that hiring is hiring is difficult. And some people are intimidated by the hiring process. And one of the reasons that your your instinct isn’t to go slow is like, you have a job that’s open. You have, work that’s not getting done. You have anxiety about the process. And so you tend to reach sometimes we all do. We tend to put hope into our equation. We tend to read experiences into candidates, hoping that they can develop into what we’re what we’re looking for, which is a solution, rather than using a data driven approach that really can help you both stack rank your candidates in a consistent manner.

Speaker 1
00:02:22
Get the input from all of your hiring professionals who are involved. Do it in a consistent way and get better and better at it. And most importantly, if you get to the point where you have a great process, you can have confidence that you can go hire an A player. Well, guess what, then you’re not going to be concerned about, you know, not firing someone faster when it’s not working out. You’re not going to try to rush a process because you’re going to have that confidence. So our our whole goal today is to talk about how to hire slow and how to hire. Well, okay. Now the reason we’re bringing this up is I have had conversations with management teams all the time, and I am surprised how few teams really take the time to create a structured hiring process. In fact, in many cases, hiring is as simple as passing out resumes and getting people on calendars and then having, you know, a slack exchange regarding, you know, who do you like best? What did you think? What did you think? you might have you might take think about all the time you’re taking you’re taking an interview time for candidates.

Speaker 1
00:03:26
You’re taking members of your executive team for hours to, to get do these interviews. And then maybe you’re getting back together, but, you know, maybe it’s, it’s a little bit less formal. That’s very expensive process. And you multiply that times five candidates, ten candidates, whatever it might be. Of course, this is an intimidating process. And you’re you’re really anxious to get it done quickly. And you’re really anxious that you might make a mistake. There’s lots of risk. So you know that that is not the best way to do it. And that leads to that that dynamic where you’re anxious anxious to fire fast and high or slow. And when you’re not data driven, when you’re not consistent, you can end up using circumstantial clues as to I liked that candidate or, you know, what do you think about that candidate? Okay, you like them, I missed maybe maybe I missed something in my interview must maybe I like them as well. Or you might default to kind of the resume too much and say, oh, I like that person who worked at so-and-so company.

Speaker 1
00:04:24
Let’s just go with them. That feels like the safe hire, right? The old adage, no one gets fired for hiring IBM. You know, same sort of thing. Maybe no one’s going to get fired by hiring someone who’s got a great resume, but you’re still maybe missing something because maybe they got lucky and got to work at a great company, but really weren’t critical for that factor. All these things can lead to mistakes, and mistakes can create mis hires. and, you know, ultimately you’re back in that same doom loop where now all of a sudden, if you hire someone poorly, you’ve wasted all that time, wasted all that money and fixing the problem. And now you’re stuck saying, man, should we stick with this person and give them more chance? Or should we fire fast? And then because you’re not confident in your hiring process, you get stuck in that doom loop even longer. So that those are all the reasons why I want to suggest it may be worthwhile spending some time really refining your hiring process and putting a little structure into it.

Speaker 1
00:05:22
And I think the good news that I want to share with you today is it’s not that hard. The key is structure and standardization and getting everyone to be on the same page. There are four things I want I want to talk about. The first is the standard job description okay. Then a standardized candidate scorecard, then a standard hiring process. And then ultimately, you know, a, a standard, review of all that to, to keep making the process better and better. Okay. So let’s go through those one at a time. A job description Everyone has job descriptions. This is pretty straightforward. But you know, obviously you should have a standardized company description. I shouldn’t have to say that, but I literally I’ve been at companies where people are creating their own ones. So marketing’s got one job description, R&D has another one. You know, the sales and marketing team may have a different one, may have a different one. There should be a standardized company description that’s attractive, that is is marketing oriented and really helps your company shine.

Speaker 1
00:06:25
That probably comes from the HR department, just like the last section of your job description. The compensation next steps that should be standardized probably come from your HR department. Okay, then there are three sections that really should come from the hiring manager, the person responsible for making this hire, and who has the problem that they’re trying to fill a role. Okay. Those three sections are the role responsibilities and outcomes, the professional qualifications that you’d like to have for this, this candidate and the personal characteristics. Okay. So there’s just three groups. Let’s go through them one at a time, okay. Roles and responsibilities and outcomes. Okay. It’s basically what is it that we are hiring you to do in this job? And the reason I like outcomes, if you can get to an outcome, you’re not just saying, hey, you know, you show up and do this job, you’re saying this is what success looks like, right? So if I’m hiring a financial professional, it’s not just close the books.

Speaker 1
00:07:19
It is. The books are closed by the 15th day of the month, consistently and accurately. And, you know, we improve our clothes from the 25th day to the 15th day. That’s an outcome. It shows the candidate what you’re trying to achieve, shows them what success look like. And yes, it also explains the responsibility. Now, it’s important not to just put so many, responsibilities and outcomes in there that you just, you know, you, you, you use a shotgun approach, okay? You’re probably to come up with a list of ten. I’m going to encourage you to do no more than five key responsibilities. Just like the same with qualifications and personal characteristics, I would encourage you to have, you know, a total of maybe 12 to 15, which means you have 4 or 5 of each. It doesn’t mean that those are the only ones, but very importantly, it means they’re the most important responsibilities. They’re the most important professional qualifications. They’re the most important personal characteristics.

Speaker 1
00:08:17
Remember, we are trying to really focus on the most important ones because everyone’s going to probe on those criteria, and we’re going to stack, rank and score the candidates on those criteria. So if you have ten responsibilities and ten qualifications and ten characteristics, guess what? First of all, you’re scattered. You can’t really find a unicorn that has everything great. So if everything matters, nothing really matters. But secondly, you’re not going to naturally go and have consistent comparisons because some people are going to focus on numbers six and eight and ten. Other people focus on two and four, and you’re not going to be able to have a consistent comparison across interviews. And you’re also not going to be able to score that many items like 30 different items, it becomes just unwieldy. So I like to see you have three groups times four would be 12 or 3 groups of five. You have 15 total. Okay. So you have that and that’s what you put in your job description. So you got company description.

Speaker 1
00:09:14
You have the job responsibilities and outcomes number. Section two. Section three is the professional qualifications you’re looking for. Section three are the personal characteristics of the person that role. That would be great. Then you have a standardized compensation. Next step. You put that job description out there. And that should be a very straightforward process okay. Now we get into the interviews. For process wise, I like to have a screening interviewer who is going through and screening and making sure that they have the professional qualifications, salary and availability taken care of. And that allows you to take maybe it’s a pile of 30 or 40 candidates and whittle it down to 5 or 6, right? So I definitely encourage you to have a screening process. You’re not taking your your executives time for screening. By the time they get to you, you know, they have the qualifications. You know that the salary and the job description works in terms of where they have to be location, availability, salary, all those things. So you can get really down to the most important outcomes and responsibilities and the most important personal characteristics.

Speaker 1
00:10:23
That’s where you have your senior people doing the interviews. Okay. So what I recommend doing is creating a standardized scorecard. And I say standardize. You should create one template for the company. And then the hiring manager should customize the specifics for each job role. And guess what? Those specifics the responsibilities and outcomes come right off the job description. So you take the 2 to 3 most important responsibilities and job outcomes, and you put them right into the scorecard. Then you take the most important 2 or 3 personal characteristics, and you put them right in the scorecard. And guess what? This is the same responsibilities and characteristics for everyone. They’re going to have the same scorecard. So Max you’re going to have six grading criteria. Let’s assume you go and take three and three. You’re going to have six responsibility or outcomes and six characteristics. That becomes the grid that you’re measuring scores on. Okay. Guess what. That also becomes your interview guide. Now you go through you have maybe five minutes of niceties and background.

Speaker 1
00:11:30
You kind of describe how much time you’re going to take for asking questions, and then boom, you’re going down those six sets of questions that you’re trying to ask to get compelling evidence. Okay, so if the responsibility is to to hire and train a sales team, okay, great. I’ve got to come up with a grade 1 to 5 on this person’s ability to do do that. And has that person driven that in the past? What is the compelling evidence I can use to give this guy a grade, or this woman a grade on their ability to hire and hire and train and manage salespeople? Well, I’m going to ask questions specifically about that. The scorecard is going to have a section for compelling evidence that, you know, what are the types of things that I’m going to look for. I might ask, you know, have they done it in the past? I might ask them to tell me stories about how they solve problems with sales teams in the past. I might ask them how they recruit.

Speaker 1
00:12:27
and I have a section on that scorecard for both the types of compelling evidence I’m looking for, as well as the notes. The answer, the question. Okay, again, this is a lot of structure, but it gives everybody a consistent way to evaluate how can I come up with a score on that specific criteria, of a of a job outcome. Another one might be a personal characteristic. Same sort of deal. Okay. Personal characteristic might be, you know, a get it, you know, get stuff done type of character who doesn’t quit until the job is done and is consistent, consistently completing work to to to above above standard. Right. Okay. So that’s a personal characteristic, you know, what does it mean? Okay. What’s the compelling evidence? I’m looking for evidence of doing it in the past. I’m looking at examples like, you know, where you know, how they how they manage to do that. I’m looking for, examples as to why they’re driven to to be detail oriented and get work done, and they can’t stand not having things done.

Speaker 1
00:13:28
So I’ve got some clues in terms of what compelling evidence looks like. I’m going to ask those questions, and then I’m going to take the notes. Right. And if someone knocks it out of the park, excuse me. If someone knocks it out of the park, I might be really impressed. I’m going to give this person a four or a five. I’m going to have the notes. Why? Oh, well, remember that story that this person told about, staying up till midnight? Because they had a board meeting the next night and they just had to get it done. I’m going to. I’m going to reference that story later on in the process, or I’m going to, you know, I’m going to take the notes related to what the evidence suggested. If I have a low score, maybe it’s a one. Hey man, this person’s only worked a couple times. And, you know, they really couldn’t speak to, you know, getting stuff done and taking that personal responsibility. In fact, some of the conversation made me a little nervous.

Speaker 1
00:14:18
I might take a note about what made me nervous and put a one down there. Okay, so standardized scorecards, they have 4 to 6 responsibilities and characteristics. They have the type of compelling evidence you’re looking for. They have a section for notes and they have a section for a grade. And you have to put a grade in one through five. All right. At the end of this process, when you’ve completed your interview, you are going to have a number. You know, it’s maybe it’s a 3.5, maybe it’s a 1.5, maybe it’s a 4.5. And your first interview, you’re going to have a number. You’re like, okay, well, I think I think this person was a 4.2. That’s what my average was. That’s pretty good. It’s a it’s in the in the fours. Now I go and interview 3 or 4 more people and I get better at this interview. Right. So let’s say I’m doing the sales person hire or the sales leader hire. By the time I’ve done the fourth one, I mean, I thought, you know, a four was, you know, candidate number one answer.

Speaker 1
00:15:14
But man, candidate number four really blew me away. I can go back and change my grades. The key is that the individual who’s making the grades stack ranks everyone they interview on that 1 to 5 scale. So if the best person I interview is much better than the second best person, and I get given that second best person, maybe a 4.4 or a five on something, and then someone sets the bar as this is what a five looks like, I can go back and say, okay, well, the second candidate, I’m going to give a five and I’m going to move that that first candidate back to a three. As long as you’re stack ranking the candidates compared to each other, that’s what we’re trying to do is we’re trying to you know, get the best candidate from the group that we’re able to to bring into the process. And if everyone does that consistently within their own scorecards, that’s perfectly fine. And when you add those scorecards up, ultimately I’m going to have a grade for this candidate.

Speaker 1
00:16:08
You’re going to have a great for this candidate. We’ll have hopefully 4 or 5, and we’re going to have grades for every candidate. And we’re going very quickly. See okay, you know who’s who’s winning in the stack rank candidate scorecard for total score. And then we can go see, you know, we can look at the scores for every character characteristic. And that gives you so much data. Think about that process. Imagine, you know, we’ve taken two weeks, we’ve interviewed five candidates and we have data. We know where everyone stands between 1 and 5. And we can drill into okay, how are they at this outcome. You know, what’s the evidence. You know who’s who, who scored them where. How are they at this personal characteristic. Why. You know, why is this person higher than that one. You have all the data now and and you can make a data driven decision, Okay. That is that is the scorecard process. Then after that, obviously you look at the scorecard, this is typically done in a Google sheet or a spreadsheet.

Speaker 1
00:17:07
So it’s a live document. You know, you can you can, once you’ve done your interviews, you can compare notes and you can get together and you can drill down and really go into the specifics of where you have conviction. And maybe there’s an area where you didn’t get to make every question, finish every question you wanted. Well, you can go to other people and say, hey, you know, on this on this criteria for I didn’t get a great story there, but I also didn’t have evidence that they’re not good at it. And you can go to someone who may have gotten a good, good story score and say, tell me what, what you what what did you hear on that, on that, characteristic that made you, give you the confidence to make that that score and their conviction is going to help you, and it’s going to be specific. It’s based on a specific characteristic you’re looking for. It’s going to be based on specific interview feedback that they got. It’s not going to be the kind of conversation I referenced earlier, like, well, I really like the guy, or I really like the gal or, you know, I think that, you know, this guy is going to do a good job.

Speaker 1
00:18:06
She seems seemed like a good egg. You know, whatever it might be, it’s going to be data driven, okay. And you get together and you look at that and guess what? If you don’t have a 4.5 or someone like whatever your criteria is, that feels great. Keep interviewing. Right. So you maybe have five. Let’s let’s interview ten and we’ve got ten. You’re going to have a a bell curve. And you know the top candidates are going to become obvious just from the data. And you know using this process I haven’t had a situation yet where, you know, I’ve had just like I didn’t feel best in my gut about the people with the best grades. It tends to line up, but it gives you much more conviction. Okay, so that’s the process. I think it really helps the reason we want to do this, why do we want to do it this way? It’s really not a lot much longer. It doesn’t take much more time. It takes a little work up time up front.

Speaker 1
00:18:55
It takes a little more discipline to make sure that everyone follows the process, but it ends up giving you data so you can make data driven decisions, and ultimately you’re going to have better outcomes. So that’s the process. we, you know, again, we comes back from fire fast and high or slow. That’s really hard. It’s painful. But if you actually hire in a structured way. So I might posit that instead of hiring slow hire in a structured way with data and with consistency, guess what? Maybe it doesn’t have to be so slow. Or at a minimum, it’s not going to be so painful. And when you have confidence that you can hire an a player, then firing someone is not risky because you know you can upgrade the position because you have a competitive advantage. You hire a players based on a data driven, structured process, and that gives you confidence to do that. And you can have that confidence if you have a structured job description, a structured candidate scorecard and a structured interview process.

Speaker 1
00:19:59
All right. So that is our trail marker for the day. I hope it’s helpful for you. we have a blog about this at Growth elevated.com. If you want to read there’s a little bit more detail there. And as always, please check out, other podcasts and blogs at Growth elevated.com if you want to learn how to be a better leader, and if you got topics for us or guests for the podcast, please send them our way at info at Growth elevated.com. Thank you.

Speaker 1
00:20:28
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.

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 Hello, this is Julian Castelli. I’m the host of the Growth Elevated Leadership podcast, where each month we talk with inspirational entrepreneurs and leaders in the tech industry. Past guests have included CEOs and CXOs of great companies like Work Front, CG healthcare, Radical Systems, and Moment, Vox, Pop me, the San Francisco 40 Niners, and many more. This episode is brought to you by Growth Elevated. Growth elevated is a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learning an effort to help all of us become better, better leaders. We do this through educational programs like this podcast, as well as our blog and of course, our annual Tech Summit, which just so happens to be at the base of beautiful Park City Mountain. Speaker 2 00:01:10 So if you enjoy skiing and winter sports and talking tech, check us out at Growth elevated.com. You can subscribe to this podcast wherever you listen to podcasts, and please consider joining us this winter. Today I am super excited about talking to Rob Castaneda from Australia and service rocket. Rob is an Australian entrepreneur who has lived in Palo Alto since 2008. The company he founded in bootstrap service, rocket, is behind some of the biggest names in our industry, none of them bigger than Atlassian, and we’re going to talk about the role Rob has played in making Atlassian one of the leaders in the software space. Rob and his team have been working with Atlassian since 2003, and helping to build the Atlassian ecosystem from Australia. Since then, Service Rocket has helped dozens of software companies and thousands thousands of enterprise customers across the chasm drive adoption and revenue growth. Outside of service, rocket Rob serves as the president of EO Entrepreneurs Organization, is an active member of Ypo, and serves on the North American Board for the University of Technology, Sydney. Speaker 2 00:02:20 Now, he claims he’s a lousy triathlete and has a family who tolerates his intense passion for software and bad jokes. Please welcome Rob Castaneda. Hey, Rob. Speaker 3 00:02:29 G’day. Thanks for having me. Speaker 2 00:02:32 Just to start with a with a lousy joke or one story based on based on, you know, the background. Speaker 3 00:02:40 Well, I, I, I am a lousy triathlete, proudly. And, I, I was challenged in 2018 to do the Santa Cruz, half Ironman by one of my, my team members, one of our rocketeers, and I, I said yes. And then after that, I realized that I couldn’t swim. And so I had to learn how to swim. And it’s been an amazing journey. And I’ve learned a few tips and tricks, for triathlon. And the first one is, you you don’t talk to people who do triathlon about triathlon. You talk to people who don’t do it. So when you say you do a half Ironman, they don’t know the difference between a full and a half. Speaker 3 00:03:24 that’s still pretty intense. Speaker 2 00:03:25 What for? For a non swimmer. What’s the what’s the swim on a half trial. Half Ironman. Speaker 3 00:03:29 It’s a 1.2 mile swim. it’s a 56 bike, 56 mile bike and a half marathon, but, the. I guess the real trick is when you, when you talk to people who do triathlon about your time, the lower the time, the more impressive. And when you talk to people who don’t know triathlon. That’s right. The longer the time, the more impressive. Speaker 2 00:03:50 And so I can’t believe you’d be gruelling for that long. You do it, my God, man. And are you crazy? Speaker 3 00:03:57 That’s right. So that’s what I learned. And the other one is to always just doesn’t matter how how fast your your walking or jogging or whatever. You just have to know where the photographers are so you can flex your muscles for the camera so you can get the photos. And there you go. If you do that and have a good time and have a smile on your face, yeah, yeah. Speaker 2 00:04:14 If you have that photo on the shelf and then you can remember the positives, right? Speaker 3 00:04:18 That’s right, that’s right. Speaker 2 00:04:19 Well, you’re you’re a better man than I am. I tried to run a marathon once, and I had a last minute injury that prevented me from from doing that. But I certainly admire your work there. So. So, Rob, I’ve enjoyed getting to know you over the last few months. we know each other through ypo. And then we’ve also done some work where I had the chance to learn about Service Rocket. And so I’m so grateful that you came on today to tell us a little bit about the company. Yeah. Speaker 3 00:04:42 Thank you. Speaker 2 00:04:44 Tell us about, Service Rocket. What do you do? Who are your customers and how do you help them? Yeah. Speaker 3 00:04:48 So, you know, maybe a little bit about how I got started. I was working I started off at the the help desk of a company called Borland Software and working in the Delphi C plus plus and the initial Java J builder days. Speaker 3 00:05:04 and from that I got into enterprise Java, but I worked on the helpdesk and when I got into the enterprise Java space, there were these parallel worlds of the the commercial side of things, WebLogic and, and things like that. And then there was the open source world, JBoss and others. And so I was. Teaching courses. on on WebLogic. And at nighttime I was hacking on open source in JBoss. And I got to really understand the, the the beauty of an open source community and how those relationships work as well as, hey, what drives commercial success and kind of working that that intersection between knowing the technology training and getting people to adopt it and use it and how it all works. so that was that was kind of my background. And then in 2001, I went back to Australia after working in the Valley, and I started the company, teaching training courses, for WebLogic and Web methods and Java and Sun Microsystems back then and then we, stumbled across through, through a connection in Silicon Valley. Speaker 3 00:06:18 a friend said, hey, do you know, do you know Mike and Scott? They’re they’re doing some work in the same open source Java area. And it turns out we’re on the same block in Sydney. And, we had kind of heard of each other and we, we met together. And then I learnt, what they were doing with Jira at that stage. And it was still very early days. They, they were actually a services company that started building, Jira to manage that business. And we were doing a bunch of project work back then, and we were using Mantis and Bugzilla, and then we said, okay, let’s switch in and start putting in Jira. And very quickly we, we developed a great relationship where they were very, very disciplined and focused in the beginning of like, no, we’ve done a little bit of the services thing. We don’t want to do that. We’re going to build a product. And there was a very clear boundary for them of what they wanted to do and, and didn’t want to do. Speaker 3 00:07:16 And so, we quickly became a bit of a case study that they could push their customers to. It’s like, okay, yeah, talk to Rob and his team. and, have a look at what they’re doing. And so from there, we just. Speaker 2 00:07:33 Were you kind of still evolving and the founding of the business, did you? So you kind of were right there at the early stage of. Yeah, I’ve been running and as service rocket on the stage at this point, or is it just Rob and friends, we were. Speaker 3 00:07:46 Called we were called customer back then. Okay. And I had started the year before they started. Okay. And so I had a, I had a a profitable small growing training and implementation business. Okay. So I was teaching Java and Tui and doing some, doing some projects. and so we were already running as a business. Okay. And so then meeting up, meeting Mike and Scott was like, okay, great. How do how do we use that technology and replace and replace some of the things we were using. Speaker 2 00:08:20 And so you became a customer of the product itself? Speaker 3 00:08:24 Yeah, we actually became a customer. and we were doing so as an extra. Yeah. Customer of JIRA. And we were doing work for a small pharmaceutical company called Johnson and Johnson and, Speaker 2 00:08:37 Just just a small one, Speaker 3 00:08:39 Yeah, a small company. I’ve heard of them. We needed a little workflow engine for a project. And back in those days, if you bought Jira, you got the source code because the last one had a bit of an open source heritage. Okay, so if you bought the enterprise version for 2000 bucks, you got the source code. So I remember talking to Mike saying, hey, I need a workflow engine for this project for for Jay and Jay. I’m going to buy Jira, and I’m going to just use the workflow engine for non bug tracking purposes. And so it was really the genesis of a few things one. We from that deal. We co-wrote the resale program to say, okay, we’re going to resell it, right? so we needed an agreement and. Speaker 2 00:09:27 You had to give J&J a license of the tool as well. Yep. Yeah. Speaker 3 00:09:30 So, so that that was the genesis to actually create the resell agreement. and so we did that. And what it also started I think now, which is very relevant if you look at what what they’re doing is non non bug tracking use cases. Speaker 2 00:09:48 Yeah. Speaker 3 00:09:49 Right. So now it’s the system of work or work management. Yeah. And so so that’s how that Genesis or the how that, how that started. over time though the repeatable pattern has been. Listening to the customer base. And being able to respond to their needs in a very service oriented way that we have an eye on how to scale. And so, we, you know, multiple programs we did. But, you know, one would be training as an example where, there were a couple of requests coming in for training. And, you know, you would think, what do you need to do to train customers on how to log bugs, right? And, what we did is we built a short three hour training course. Speaker 3 00:10:41 And back then in like 2004, 2005. Training was done in person, and doing training over webinars wasn’t wasn’t a common thing like it is now, right? And so we built a three hour course and we have to do three hours because we were in Sydney training us customers. We could do them in the afternoons, us time. And what we realized was that, if you go back to Geoffrey Moore’s work on Crossing the Chasm. Yep. jeera was absorbed. Really quickly. It was eaten up by early adopters. Right. Every every engineering lead would have a computer under their desk running Jira. And that’s how they were running their team. And that person actually didn’t need training. What we realized was that the person that wanted the training was kind of like the late, the late adopter or the early majority on the other side. Right. Speaker 2 00:11:40 Yep. Speaker 3 00:11:41 And they were asking this person hey I want to use Jira too. Right. And so we actually built and marketed the course in a way that the early adopter could refer the course. Speaker 3 00:11:56 To the early majority. Speaker 2 00:11:57 Okay. Speaker 3 00:11:58 Right. Speaker 2 00:11:59 You were a bridge for the chasm. Of course. Speaker 3 00:12:01 Was the bridge for Jira? Speaker 2 00:12:03 Yeah. Speaker 3 00:12:03 We ended up teaching 80,000 students. Speaker 2 00:12:06 Holy cow. Speaker 3 00:12:06 How to use Jira. And. And none of them were early adopters, right? Yeah, right. So what? Speaker 2 00:12:13 Early adopters don’t use training. Speaker 3 00:12:15 Usually they figured adopters don’t want training. But what we built, we built the training as a bit of a shield for the early adopter, because the one thing we realized with early adopters is they they love talking about their successes. But they don’t like helping you do it. Speaker 2 00:12:30 No, they don’t want to. They don’t want to. They don’t need training and they don’t want to be trainers. Speaker 3 00:12:33 Yes. They don’t have time. They want to move on to the next thing. And so I think as a, as a, as a solution or a software or product, once you’ve got the attention of an early adopter, you’ve got to use their energy. In this case, it was through training to push to the the early majority. Speaker 3 00:12:50 And the early majority was like, yes, I want to get my all my teams trained and we all want to do it properly. And, you know, it’s a different cadence but in a different tempo. But but we successfully did that. And you know, you would think teaching 80,000 people how to, how to log bugs and do that stuff would be, you know, not necessary, but it really helped, turn one instance, you know, at a large bank into, you know, 12 instances, right? Because you have 12 project managers. All right. You start scaling. Right. And so that that kind of network effect then happened, you know, there are many things running in parallel. But that was one example of. Of doing that as training. And what we also realized was that I have a big training background, but, you know, the. The free training isn’t as as valued as paid training. Right. And just like if if Harvard put all of their courses online on YouTube, which you can get most of the material for things, it doesn’t have the same value as someone going to do a degree. Speaker 3 00:13:54 Right. And so we put value on these courses. And and you know, we realize that, you know, companies have training budget that they want to spend. And how do we tap into that and use the resources of the enterprise to pay to deploy product? Sure. And through learning, is one way to do that. So there was that there was a really smart, API and plug in strategy that, that, Atlassian had, which turned into the App Store eventually. And we built the, you know, some of the very first apps were open source and we nurtured those through. We had the first commercial apps to prove that model. and I moved back to the US, you know, in 2008. And to help build out, let’s. Speaker 2 00:14:43 Let’s book in. You started working here, you know, incredible story. You were you were kind of, you know, peers and colleagues or the founders of Atlassian in Australia, one of the best Australian success stories in SAS ever. And that’s around 22, 2003. Speaker 2 00:14:58 You started working with them? Speaker 3 00:14:59 Yep, yep. Speaker 2 00:15:00 Okay. And when you started your company, how large were you? Speaker 3 00:15:05 it was just myself when I started. So that was me. And, I bootstrapped it, teaching training courses. Okay. there was no, you know, I had a one page plan of, like, hey, you know, teach people how to use technology and, do that through Asia Pacific. That was that was going to be my focus. but pretty quickly we got pulled back to the US to, to to do that. Speaker 2 00:15:33 So and so today, 20 years later, you know, you, you, you, you obviously managed to grow with it last year and provide all sorts of professional services for them. But describe your company just in general today. Service rocket. How large are you. And and you know, how do you typically, who do you work with and what do you what problem do you solve for them? Speaker 3 00:15:54 Yeah. So we’re just under 300 people now, operating in ten countries. Speaker 3 00:15:59 So we spend the world, and we the goal is not to grow headcount crazily for the sake of just growing headcount. and I would say we we have two main customer bases. The first one is. We we get called into a lot of fast growing technology companies here in the Valley or around the world who, hey, we need to build ecosystem. How do we do it? And you know companies we’ve done that for would include Metta. We were very early on in the Facebook at work program. there’s a lot of other, you know, open source slash tech that we’ve done. we’re doing some work in the Miro space right now. And The when we approach any particular space we’re trying to work on. Okay, what is unique about this space and what is the customer base and what what are they trying to do so we can help grow adoption? and I think a lot of founders look at Atlassian and say, I want that. And what that is right now is might be a thousand resellers on their website. Speaker 3 00:17:12 And. Just trying to recruit resellers, right. And I think rather than copying anyone’s particular program, what you would want to do as a founder is copy the journey of how they got there. But it’s your journey of how your customer base is working and how you take your early adopter customers learn from them. And how do you get your product from those early adopter customers to their early majority in those enterprises? So that so that you work out what those scale patterns are? and I think Atlassian really mastered doing that themselves and also leveraging the pieces that they definitely didn’t want to do. Speaker 2 00:17:53 And training was the first one that you, you found. Speaker 3 00:17:56 Their training was one. Support was one. apps is another. And you know, from there obviously professional services and we do a lot of professional services and managed services now. Speaker 2 00:18:09 what type of professional services? Speaker 3 00:18:11 Yeah. So professional services, the what we what we do in. And the way we think about it is, essentially how do you enable a customer to, to get started, get quickly launched, and then how do you empower them to keep going? So our mindset on this isn’t get as many projects from a customer as possible. Speaker 3 00:18:35 The the goal is get a project, get platform in. And then what we look to do is build what we call a center of excellence and a center of excellence. is effectively how do you help the customer run a program? Right? So if you’re putting in any infrastructure, the early adopter will will get it going. But then how does the how does the enterprise get ROI? The cost? The enterprise will get ROI if they roll three, 4 or 5, ten, 15, 20 initiatives through that platform. Speaker 2 00:19:14 So let me let me back up a little bit. When you talk about enabling, you’re talking about it, IT services, helping them create integrations, create customizations. Do do you know do work to make sure that that platform, delivers the value that, that ultimately is, intended, but based on the custom circumstances of that client. Is that a reasonable. Yeah. Speaker 3 00:19:39 You. Yeah. You have to lean in and get very specific. Yeah. So that you can pull back and identify the patterns. Speaker 2 00:19:48 Yes. Speaker 3 00:19:49 And, you have to go in. You have to build the success stories. And in every in every case there’s new ones. Right. And I think there is our industry on the product side in many ways is, doesn’t like the nuance and doesn’t like hunting for the nuance. Right? Because it’s not generic, it’s not perceived scalable. And I think it’s a case of I think you need to know it, learn it, grab it, because that that becomes the secret sauce in your whole product solution, whether that be product service, whether. Speaker 2 00:20:24 You’re talking about a good partner that has someone like yourself to work with so you can capture that nuance. But I think, just let me just dumb it down to language that our listeners will understand. If you’re a SaaS company, you’re your venture capitalist is probably telling you that we’re going to value you based on subscription revenue. Yeah. You know, you know, you are a SaaS business with one platform, and we’re not going to do custom software, right. Speaker 2 00:20:49 You know, and, we, we, we want to solve the customer’s problems, but they, you know, their, their specific needs will go on to our roadmap and we will roll those out in a scalable part of the application over time. But I think that while that is conventional wisdom and it suits one set of ambitions, it leaves the customer often with gaps, right? Yeah. And you’re talking about is filling those gaps. And not only, you know, the not only the obvious ones that are there up front, like we need to integrate to the API or whatever it might be. But when you just talk about discovery, you’re saying, you know, I think you’re talking about a really refined understanding of, yeah, we’ll do the first few things, but then more importantly, we’ll understand what’s needed for them to go and cross the chasm within their organization. Is that hearing you correctly? Speaker 3 00:21:36 Yeah, totally. You’re like spot on, right? The the. If you don’t get it across there, I think we’ll just chatting before. Speaker 3 00:21:46 Right. It becomes like tech enabled. Self-Aware. Right. Speaker 2 00:21:49 Say that again. Speaker 3 00:21:50 Like tech enabled. Self-Aware, right? Yeah. Speaker 2 00:21:53 Because if they can’t use it in their ecosystem the way they do, they do business, right? Yeah. Then you know and that’s and that of course will lead to churn. Speaker 3 00:22:02 Correct. So that’s that’s basically I think the way I think about it in our company is logos don’t buy software. People, right? Yeah. So when when our sales team comes back saying, hey, we we close this customer and they give me a logo, I’m like, that logo didn’t buy it. Somebody at the company bought it. Right. And if that person isn’t early adopter that’s great. You now have a window to expand that. Otherwise they’re going to move on to something else. Right. And and that’s okay. They might renew a few times, but if no one’s continually expanding then something else is right. And so I think understanding who the early adopter is or the champion. Speaker 3 00:22:51 Right. Another word for that. and these concepts are in Geoffrey Moore’s Crossing the Chasm book. I think a lot of people just look at the, the, the curve diagram and that’s it. There’s another diagram which is the it looks like a pizza. Right. And it’s a, it’s a round circle, looks like a pizza or a turtle shell. And it’s basically in the middle. It’s two concentric circles in the middle is the core product. And on the outside is basically what what Jeffrey Moore calls the whole product. Right. And it’s basically your your SaaS product in this example and all the things the customer needs to make it successful and get and. Speaker 2 00:23:27 Run in their ecosystem right. Speaker 3 00:23:29 Inside of their business. Speaker 2 00:23:30 Right. And that’s and just to be clear, there’s all that stuff that needs to be discovered and provided for. And so you’re a natural partner for a SaaS company because they’re going to provide the platform. They might have a customer success team, but they probably don’t have the professional services to do all that custom work. Speaker 2 00:23:46 And that’s where Service Rocket is available in a flexible fashion with your, your 300, engineers to really both, you know, how much do you do discovering versus just fulfilling what’s been discovered by the customer? Speaker 3 00:24:00 I think there’s a lot of discovery. the. You know, in trying to build an ecosystem like it, logically, it fits right. Oh, grab a partner, they’ll go and do that. And I think the, the, the double click into this is. How do you build an ecosystem? Speaker 2 00:24:18 And what’s the ecosystem? Speaker 3 00:24:20 And an ecosystem is when you have many partners. That are. And I think of it like a forest. Right. You have some foundational trees, right? That that are really the backbone of what that is. But then you have other partners doing niche things that, you know, you don’t go to a forest and there’s one tree, right, right, right. Speaker 2 00:24:42 So it’s more complicated than you think. Speaker 3 00:24:44 And you don’t go to a, you know, a bunch of bushes and go, great, look at this ecosystem. Speaker 3 00:24:49 You kind of need a combination of things. So I think there’s some foundations that need to be planted and the ones that have been successful, and the model we work under is where you. Where you can work with a partner and understand that that first 1 or 2 foundational partners, and usually you have enough bandwidth for one. You need to help them build a profitable business. Right. So a lot of what happens is that, and I’ll simplify. Right. SAS company sells customer wants more and more and more. The SAS company says stop. We can’t do any more of this custom stuff. Right? Because my investors don’t want me to do the services work. We’re going to do the the product only. and so at some stage you’re like, great, let’s bring someone else in to do that. Right. Now, the initial bootstrap of that relationship is really important. And the and it’s natural to be like, oh, let’s try a little bit and see how it goes. And so oh we could do that ourselves. Speaker 3 00:25:57 Or someone can do that in engineering in their spare time, you know. Or or hey, let’s hire a services lead so we can do the ones we want to do, and then we can give out the other ones. And so inevitably, there’s not a lot enough clarity. And when working with a partner, right. Whether it’s us or anybody else, the if you don’t build enough of a book of business. For that partner to actually run a PNL. Then. Then they’re going to give you. A limited amount of investment before they have to go and make money somewhere else. And so the one of the biggest pieces of advice that I would give if you’re going to build a partner ecosystem is pick the foundational trees or tree. And invest in it. Right? Have some visibility about what is the PNL that makes this work and make sure that it it it can actually work. Because if you know that that PNL is working, then what happens is that that partner will give you all their attention. Speaker 3 00:27:05 If that pal isn’t working for that partner, they have to make up the numbers somewhere else. And so you end up becoming not a partner. You end up becoming a client. And when you become a client, they’re like, great, I can give you half of a person’s time, but that you’re, you know, if you if you cut up somebody’s time, they don’t give you the best of everything. They’ve got wholehearted. Right? So the one thing we did with Atlassian is we we managed to do enough work together that we made money from the customer base together. Yeah, funded the work we did. Right. That enabled us to fully focus on expanding the ecosystem. Right. And so it wasn’t like, oh, I’m going to go and do a little bit there and see how it goes. and, and the role that we then played inside of the ecosystem. Comes back to my open source roots, which is you have to pay it forward and build an ecosystem. And if the ecosystem is successful. Speaker 3 00:28:11 Hundreds of companies will be successful. Right. So the mindset that we take into these partnerships is, hey, we might be the first partner, we might be the preferred partner, but we know we are the first of many, and our role is to make a great PNL and then show how we can help others create that PNL as well, so that we create an ecosystem. And when you create an ecosystem and enterprises are adopting and expanding with software, everyone wins, right? There’s no point being like the exclusive partner provider. You know, a long time, you know that one partner does all the work. That doesn’t work. It’s impossible to. You know, you’ll limit your scale, but there there are some patterns to go through. Speaker 2 00:29:00 Can you describe one of those ecosystems like, you know, because you’re so familiar with those terms, but make it tangible. So explain a PNL and an ecosystem with one of your partners where you have helped enable that. Speaker 3 00:29:12 Yeah. So and I’ll keep on the same example. Speaker 3 00:29:15 Right. we a lot of the early partners. in the Atlassian ecosystem. We helped and still help each other and still keep in touch. Right? And we understand, okay, what’s working, what’s not. And we have a great open relationship in terms of like understanding. The health of how the ecosystem itself is working. Right? Because if there’s one player that. You know, it was like, hey, when it all cost, it actually doesn’t do well for the customers. It doesn’t do well for anybody. And even even like we had the the Atlassian conference earlier this month. And, you know, many thousands of people there, like, I was running a session for some of the newer partners that came into the ecosystem to really get their mindset right about how we think in this ecosystem and that we’re not out to kill each other. Okay. Speaker 2 00:30:19 So you’re talking about the dynamic between multiple parties in a huge multibillion unicorn like Atlassian. Yep. Okay, so I get that. Okay. You know, our customers are in that 5 to $50 million range. Speaker 2 00:30:31 So they’re much earlier stage. Yep. They’re trying to figure out how to just work with one partner, let alone maybe find a second. But they’re challenges in how to manage 50 partners. So so scale it back and let’s let’s talk about how they you know what what’s what’s the critical advice you would have for for the the SaaS company who’s trying to meet the customer needs by having professional services to customize a product and make sure that their product can. Their roadmap can benefit from the learnings that are part of that. And they can also, you know, work with the partners and the partners successful. I heard you say the partner has to have a good PNL, so has to be good for both the partner and the and the SaaS company. And ultimately, both of those parties have to solve the problem for the customer, right? Yeah, but but they’re they’re probably not thinking about ecosystems at that stage. Right? I mean, no, they’re trying to get, you know. Speaker 3 00:31:23 Solving a problem. Speaker 3 00:31:24 I mean. Speaker 2 00:31:25 It’s back to the crossing, the chasm. They’re trying to, you know, expand within that customer or expand within their customer base. Speaker 3 00:31:33 Yeah. The, the I think the if I, if I’ll answer it in like the biggest dysfunction that we see is lack of clarity, internally to be like, okay, A lot of what tends to happen is that a combination of support, customer success, pre-sales, or whoever worked on the deal end up doing the consulting work or the project work, or getting the customer over the line. And I think there’s a role for the CEO to play about being deliberate, about. How, how or the outcome that they’re looking for. Because. In the trenches further down. Even though like from a company perspective, hey, we we want to do some of this work or we’re getting this customer over the line. sometimes the people doing the work really enjoy it. As well. So the clarity from top down saying okay this is the direction and this is what success looks like. Speaker 3 00:32:39 And what we’re building I think is really important. And I’ve seen a number of times where that clarity isn’t there. And so the partner is not successful because they’re not given the full support. Because the internal team still wants to do it, or isn’t clear about how they’re trying to prop up the. Speaker 2 00:32:58 Clarity as to who’s doing what. Speaker 3 00:33:00 Yep, clarity. And the second one is actually, I would treat the partners if they were another employee. Speaker 2 00:33:08 An extension of the team. Yeah, absolutely. Yeah. So. Speaker 3 00:33:13 and I’ll give an example of what you don’t want or an example of what typically typically happens. Someone internally obviously has a lot of context and a lot of a lot of their own internal support and is working with the customer. The partner doesn’t have any of that. Right? Right. So they come in cold bandaged. They’re gonna make mistakes. Speaker 2 00:33:33 Yeah. Speaker 3 00:33:34 And so it’s like if you treat them as if they’re internal, you’re actually going to enable them, onboard them, support them. And the when that’s not done you get the scenarios where it’s like, well, you’re supposed to do that. Speaker 3 00:33:47 That’s not my job. And, it’s easy to well, the partner is supposed to do that. Right. And I think the the enablement. You know your smaller up and coming SAS company doesn’t doesn’t necessarily even have onboarding done internally properly. Speaker 2 00:34:06 Right? Right. Probably not. Especially not for these custom services. Speaker 3 00:34:09 Oh I’m definitely not for that. But even just internally. Right. So so I think onboarding is a really big key in treating treating the foundation partner or partners as if they are internal. And so I think establishing sea level to sea level communication and accessibility. Right. Like when I work with, with any of our partners they have my phone number I’ll answer I’m on, I’m on available all the time as if I was the VP of services for for that CEO. Right. That’s that’s the mindset I’m the chief customer officer or I’m, I’m reporting to your chief customer officer. That’s where I fit in the organization. And yes, now we’re going to build out what what we need to build out there. Speaker 2 00:34:53 So that’s a very healthy level of connectivity. Absolutely. Great. Yeah, I. Speaker 3 00:34:56 Think I think you need that, and you know, customers are also smart. They kind of know how to play things too. Sure. So the you want to be working arm in arm with that, with that partner and having that strong communication. because you are working with people. Yeah. Right. So folks on your side, folks on their side, folks at the customer side, you’re going to have all ends of the spectrum. You’re going to have people who are really involved and want it to happen, and you’re going to have people that want other initiatives to happen. Right? Or, and things that go on. So building those communication links. So clarity is a big one. and then having those communication links at the right level, and there an understanding of like, hey, you may be the first partner, but we, we were actually counting on you to build a model with us that we can help with. Speaker 3 00:35:51 You replicate to other partners. Right. And I think that’s a really a really key mindset to have. Speaker 2 00:35:59 That’s. Those are great. Great. nuggets for sure. And working with a partner and making it a win win. Tell him. Tell me about the journey, about building your own business. What’s been some of the challenges that you’ve learned from? Speaker 3 00:36:11 Yeah. Oh, many. You know, I, I think many, many of us, like, read these stories of like. Oh, well, just up into the ride. I mean, I probably almost killed the company 3 or 4 times in its journey. and I think the journey of a company is really the journey of leadership of the, the CEO, right? Or the founder or whoever’s running the company. So, you know, I personally have been caught up times trying to please everybody or trying to make everything. Work without coming back to the panel. Right. And so I think typically in my journey, it was always like, oh wow, I’m either a. Speaker 3 00:36:58 Really great friendly company to work with. Or I’m really ruthless and financially driven. And I think that as a. Speaker 2 00:37:06 Leader, as the leader in terms of as your relationship leader. Speaker 3 00:37:10 Yeah, yeah. And I think a big, big lesson is just making sure those things work. And I think, you know, there are times when when we’ve gone all in on things. and I think you need a combination of gut feel and reality check and keeping a plan and keeping those things consistent. So, so I’ve learned a lot about that. Learned a lot about, working with different cultures around the world and what what makes people tick. And, so it’s a real blessing to be able to get to work with great technology and great people all over the world and solve some interesting problems and, and do it in a way that’s, that enriches people’s lives, and gives people opportunity to learn and grow so. Speaker 2 00:37:59 Well. You’re doing a lot of that, right? You’ve you’ve built a great business. You’ve gone from one continent to the other. Speaker 2 00:38:06 You’re in the heart of Silicon Valley. I know you’re giving back through your leadership through IPO and EO. anything you want to talk about there that’s been part of the journey. Speaker 3 00:38:15 yeah. I mean, that’s that’s also I think mentorship is is a big thing. And that’s how we met. Right? I was looking for an example of reaching out to network, saying, I want to find great examples of really good. How do I how to assemble a board and run a board. And actually, you came top of the list of highly recommended board members, right? So that’s how we met. So I’ll give you some props. and just I think in many of those organizations, what it’s really taught me is. Pay it forward and help. And and good things happen. Yeah. And I think we do live in a world sometimes where we think of ourselves as consumers, like what’s in it for me every day or every week. All right. Very transactional. And I will say like one of the reasons why I love being being part of, you know, EO in San Francisco and Ypo is, being down in Palo Alto, right where we’re, you know, a little bit out of the city, but it forces me to go and meet people and do things. Speaker 3 00:39:23 And and the biggest thing is not, hey, what is the topic of the discussion or that’s not interesting or what have you? The topic actually doesn’t matter. It’s the fact that you’re connecting with everybody and you’re learning about something, whatever it is. And that’s the side conversations and connections that, that, that’s. Speaker 2 00:39:40 Where the magic happens. You can’t predict it. You can only. What is Steve Jobs that you can only connect the dots when you look backwards. Speaker 3 00:39:45 Right. Only connect the dots backwards. And so the more the more you get out there and help, the more you’ll be helped. And then you’ll be able to trace back and say, wow, this is this is how that that fit together. So I. Speaker 2 00:39:58 Love it. That’s a great that’s a great, lesson for everybody listening out there. Well, this has been great, Rob. Thank you. I’ve learned a lot about partnerships and and, your journey. And I look forward to continuing to work with you and learning more. Speaker 2 00:40:10 where can we work and people find you? Speaker 3 00:40:13 Yeah. So we we’re on, Silver Circuit comm. You can hit me up on LinkedIn. I have a small little Substack that I’m building, called Leadership Behaviors, which is at Leadership behaviors.org, and I’m just writing different articles about how I’ve been building and rebuilding the company and trying to share knowledge. and so if there’s any any questions people have or things that they might want to input on, I’m happy to happy to to share the knowledge so. Speaker 2 00:40:43 Well, fantastic. Thank you so much for your time this morning Rob. Speaker 3 00:40:46 Thank you man. Speaker 2 00:40:47 All right. We’ll talk soon. Speaker 1 00:40:52 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. Speaker 1 00:41:13 Thank you.

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 Hello, this is Julian Castelli. I’m the host of the Growth Elevated Leadership podcast, where each week we talk with inspirational entrepreneurs and leaders in the tech industry. Past guests have included CEOs and CXOs of great companies like Work Front, CHG, Healthcare 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 is a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learnings in an effort to make us all better leaders. We do that through educational programs like this podcast. We also have an annual summit each year in beautiful Park City, Utah. So for those of you who like to ski and like to talk talk shop with other tech leaders, check it out at Growth elevated.com. Speaker 2 00:01:18 today I’m super excited to welcome Blake Harbor to talk with us today about scaling sales. I can tell you that almost every business we talk to, scaling sales is a critical issue. Blake is a veteran sales executive, and he’s been with some of the big success stories here in Utah, including Hirevue and Lucid. And after that, he went to Work Stream, where he oversaw an incredible growth turnaround that we’re going to talk about today. And, today he’s working to help other companies scale their their growth journey. So we’re going to learn a lot, with Blake. Blake, welcome to the show. Yeah. Speaker 3 00:01:51 Thanks, Julian. honored to be here. Speaker 2 00:01:53 We’re excited to talk to you today. Yeah. Speaker 3 00:01:56 Appreciate it. Speaker 2 00:01:57 So, like, you’ve done a lot of things. you know, we were talking just early in the intro about about some of the, this successful SaaS companies in Utah, But, but Workstream is one where you had just an incredible story of both downs and ups, right? Speaker 3 00:02:12 Yeah, it was quite the journey. Speaker 2 00:02:14 Yeah. Well, let’s talk a little bit about that. tell us before we get started, what does work Stream do? Who do they serve? Speaker 3 00:02:21 Yeah. So work Stream is, started as an applicant tracking system serving primarily the hourly workforce. So there’s, in that HR air tech space, there’s a huge gap between operators or employers and then the workforce and how they communicate. And so Workstream set out to solve that and bridge that gap, by providing a texting platform for companies to engage with employees or candidates in real time. So an applicant might go to an indeed or all these job boards and apply for a job, and they can get a text in real time to go ahead and schedule interview and then post interview, go through onboarding process and all the other steps that would go in. So this is. Speaker 2 00:03:07 The desk list worker, right? That’s right. A lot of tech has been developed for the desktop and to automate the work. But but there’s all these industries where people aren’t at a desk. Speaker 2 00:03:16 That’s right. Right. And so we’re focusing on that niche And the the key communication breakthrough is texting. Right. Speaker 3 00:03:22 That’s exactly right. Speaker 2 00:03:23 Okay. Where’s Workstream based. Speaker 3 00:03:25 Yeah. So we’re based out of Palo Alto. I met them actually through Peterson Ventures that introduced me to the CEO. And, were some early investors there. And, they were looking to build a sales team here in Utah. The CEO had been in Utah many times, loved the culture, understood that there’s a good sales engine culture here. Yeah, we’ve. Speaker 2 00:03:49 Got that reputation, you know, and you’re an expert, you know, why should people come look to look to create sales teams in Utah? Give us give us a little pitch for Utah sales. Speaker 3 00:03:59 I’m a huge advocate for a specifically SMB mid-market. We have a ton of experience. And I think the there’s a handful of things culturally that lend that self to it. You know, the there’s the Mormon church here where people go out and serve, Mormon missions for two years. Speaker 3 00:04:14 They knocked doors at 19 years old. You learn this, a level of grittiness doing that that, you know, most kids never have it 35 years old and, you know, they come back from that. There’s a culture. Speaker 2 00:04:27 In different languages that they learn incredible, incredible training. expertise that they have to train these missionaries in different languages, send them across the world and then have them, you know, advocate and promote religion. So, yeah, that’s that’s got to be an incredible training for sales. Speaker 3 00:04:45 That’s right, that’s right. I think even, you know, they come back from their mission. There’s this element of culturally where people get married, they get and they have kids young. I mean, I’m one of I got four kids. I, you know, 34 years old and my my oldest is ten, my youngest is five. Like, we’ve been through all that well doing all this with SAS companies. And you go through that process, it’s like I’ve got a mortgage, I’ve got a big family. Speaker 3 00:05:08 Now I got to figure out how to pay the bills. And there you go. Typically the best option is how can I make the most money, the fastest to sell. And yeah, you know, you get this level of greediness that you might not get elsewhere. Speaker 2 00:05:19 All right. So we got a Silicon Valley company, you know, looking to grow a Salesforce. They’re looking for Utah. They find you as an experienced Utah, sales executive. You’ve been with some some great, Utah companies, as we mentioned earlier, Hirevue. and what was the other one? Speaker 3 00:05:36 Lucid. Speaker 2 00:05:37 Lucid. That’s right. So you had a great experience. And what was their sales force like at that point? Speaker 3 00:05:43 so the sales team consisted of myself, the CEO and, one rep that was based in Palo Alto. Okay. Speaker 2 00:05:50 So this is early, like seed stage or a stage. Where are you? Speaker 3 00:05:53 Yeah, they were just finishing up the series, Speaker 2 00:05:55 Okay, so you’re starting from scratch. Speaker 3 00:05:58 Start from scratch. So when I joined, we were, on paper, about 800 K of revenue and pretty much all founder led sales and the typical founder led sales network friends, friends and family. Speaker 3 00:06:12 Things like that had like translated to a sell a core sales team yet and I joined in February of 2020 and the world shut down 30 days later and we, we churned half the business that. Speaker 2 00:06:28 Was that was Covid when the lockdown happened. Right? Speaker 3 00:06:30 That’s right. Speaker 2 00:06:31 What a great what a great time to start a new company. Speaker 3 00:06:33 Exactly. I was I was questioning all my decisions in life. Right. Speaker 2 00:06:38 We all can remember where we were, but, you know, a new venture, early stage. And that must have been pretty frightening. Speaker 3 00:06:44 It was. I mean, we were very small, I think less than ten and, 15, ten employees. and, you know, now we’re at 400 K of revenue and I, you know, bless my wife’s heart, 400. Speaker 2 00:06:54 You’re cut in half. 800, 400. Okay. Speaker 3 00:06:57 Yeah. Lost half the business. And I remember telling my wife, I better keep feelers out just in case, because I don’t know where this is going to go. Speaker 3 00:07:05 It might be back on the street sooner or so. and, you know, obviously there’s so much learning that goes into that experience of like, okay, where do we go from here? We’ve we’ve reset. and at that point we were selling to probably 7 or 8 verticals. Right. Anyone who’s hiring hourly worker, if you think about that for a minute. So, so many industries and they make up a majority of the US economy. And, we were trying to sell all of them. I remember the first deal I ever did. It was $600. monster win. I think it took me three weeks to get done. and it was it was painful. It was a trucking company, and the guy was pinching pennies. You could. You could barely make it work. Speaker 2 00:07:48 But again, the point was they’re just workers. So these are truck drivers. They’re not going to be at a at a at a desk. What were the what were the 7 or 8 verticals you were thinking about as you were, you know, early stage trying to figure out your go to market. Speaker 3 00:08:00 Yeah. So trucking third party logistics was in there. just in sort of warehousing. we were we’re thinking a lot about the healthcare, which there’s probably seven sub verticals of health care. a lot of hospice, in-home care, assisted living communities. restaurant vertical, where we ultimately ended up, we were selling to a lot of restaurants, franchised, non franchised, quick serve. thinking about, like, fast casual segments. Speaker 2 00:08:30 Okay, so all the all the places where there’s less workers. And how did it go originally? Yeah, the founders had sold the friend and family. Your your first sell was to to a trucking company. Speaker 3 00:08:39 Yeah. Yeah. That’s right. They were a last mile, logistics company. you know, the first couple of months was just figuring out what the hell we were even doing, right? Like, where? What do we have left of the base revenue? What are those customers consist of? Why did they stay with us during through Covid thus far? And I’d hired one rep. Speaker 3 00:09:00 that I actually had hired previously at lucid, and he’d gone into other companies and I brought him over and just really great or really young, scrappy, willing to build from the ground up. We worked out of our office, Utah office, which was my camping trailer next to the house. Every day, out of the. Speaker 2 00:09:15 Trailer. Speaker 3 00:09:16 Out of the trailer. That was get. Speaker 2 00:09:17 Get all the image, get the imagery of Covid cut in half in the trailer. Speaker 3 00:09:22 We literally I mean, it was 100 hundred degrees outside and no air conditioning was brutal out there. But he was a trooper and we made it work. But, it was really looking at those core existing customers that stayed with us, through March, April, May, June and starting to flesh out and have those conversations go back to them. Hey, why are you still with us? Like, yeah, we have nothing left to give you. What why why are you here? Tell us. Talk to us about like why you continue to use workstream and what’s working and what’s not. Speaker 3 00:09:52 And we started to us a couple of things where some of the better customers that just passionately loved us and said like this is critical, business critical. We can’t do anything else without this. we’re within a handful of buckets of verticals, one being restaurants, the other was assisted living communities. and then the third one was actually like a logistics or a company. And, we started to really narrow in the scope there on who we were thinking about targeting and going outbound into, essentially. And we were looking for, obviously just look alikes who, who looks just like these customers. And why did they buy the way they did and how did they buy which there’s unique buying patterns in each of them. And how do we kind of like reverse engineer how they bought them in the first place, how they use it, and how do we start to identify more people like them? Speaker 2 00:10:48 That’s awesome. So, you know, what I hear you saying is, and this is a great, great strategy, it sounds simple, but talk to your best customers as to why why they are sticking with you, why your product is helping, and then, you know, use that information to figure out what your choices are for vertical focus. Speaker 2 00:11:06 Yeah. That’s right. How did you how did you land on restaurants? What was it about the restaurants? You said, this is why we should go here. Speaker 3 00:11:12 So, Mark Newman, CEO of Hirevue, a great friend of mine is incredible. Lovely guy. I remember something he’s always told me and I’ll never forget is you just need ten people that absolutely love your product and if you could lean on them, you can figure out what’s next. And I’ve never forgotten that after 12 years of working with Mark. is I started to think about that specifically and what I continue to find over and over again where these restaurant operators that would get on these calls, number one, they would even take the call. They would be passionate about showing up to the call with myself, the CEO, and say, hey, we love Workstream we here’s product feedback. We need your help. Even during Covid and during this time, you understand restaurants were firing everyone. They couldn’t do it. And you know, so the need for to hire more people or use an applicant tracking system just wasn’t nearly as dire. Speaker 3 00:12:05 And what we also started to notice is they would refer us so naturally to other restaurant operators. And as we start to get those referral businesses, all of a sudden our cell cycle went from 45 to 60 days, down to about two weeks or less on some of these referral business. And we thought, okay, we have a ton of momentum here. And as we start to map out the Tam and Sam and think about where do we where do we start to point our efforts, well, I how I can there’s a lot of there’s not a ton of friction in the restaurant space where I could figure out how to go find who that owns these restaurants, and then they have four other friends that they’re networking with on a regular basis that also need the same help to solve the same problem. They’re not necessarily competing against each other. Yeah. And so and. Speaker 2 00:12:52 Then you get a lot of turnover in restaurants. People go and bring you bring you with them. Right. Speaker 3 00:12:56 That’s exactly right. Yeah. Speaker 3 00:12:58 And and what we so really over the course of six months in the back half of 2020, we started just narrow in and say, okay, let’s just, let’s say restaurants. And we even got a little bit more narrow there and so well, actually quick serve restaurants, which is, you know, McDonald’s, Jimmy John’s five guys, all those which then we found out happened to be they’re all franchised. They’re all owned by a local operator that might own actually ten Jimmy John’s. But the best part about it is they also own five five guys, right? And now all of a sudden what happens is you have this network effect of operators that are plugged into multiple brands at a single time that all know each other. And, and there’s almost this kind of big dog in each brand that owns the most stores or is the most successful in the franchises, right? That’s right. And the you know, franchisors we love you know we love John. We love this person. He’s got 100 stores. Speaker 3 00:13:57 He’s killing it like everyone wants to be like them. And so we thought, wow, if we could figure out how to get John on board and John becomes one of our ten, that just loves it. So we would go find those guys and we would damn near give Workstream to them for free, because all we cared about is them using us, becoming a champion and talking about it. Speaker 2 00:14:14 We’re like a brand ambassador for you. Speaker 3 00:14:16 That’s exactly right. Speaker 2 00:14:17 That’s exactly right. But you had to really understand. So you had to. You know, I want to talk about going from seven potential verticals to one. That’s that’s frightening for founders. Totally. Right. And and, but if you didn’t do that, you couldn’t go deep enough to understand the dynamics of those franchise or franchisee relationships and come to this strategy. So, you know, did you did it take some resistance? Was there some courage required to kind of say, look, we’re going to really go after this one vertical? Speaker 3 00:14:43 Yeah, absolutely. Speaker 3 00:14:43 I mean, that was an entire company shift that wasn’t just necessarily go to market. Right. Like we had to get to the point where the entire company aligned on this strategy of going after one vertical and products building for the vertical specifically. And they’re only having conversations with restaurant operators to continue to build for them. marketing is only talking to restaurants. How do we build more collateral and so on and so forth. And so that took a lot of effort. And, you know, a lot of kudos to to Desmond, my CEO that did such a great job of helping champion those efforts to help us identify it and then say, okay, how do we lead the entire organization towards this and then get buy in to have some degree of confidence that there’s enough we could do here and And I the bet that Workstream is continue to play out to on these at this time is that there’s the that whole market is really just underserved in all his solutions, right? It’s really fragmented market. And they’re going to continue to build on, you know, the the applicant tracking system, as was the the, the landing, opportunity to break into all these. Speaker 3 00:15:53 And now they’re they’ve built onboarding and employee engagement and payroll and all these additional products that continue to expand. And as restaurants consolidate tech and spend allows them to consolidate under the same. Fantastic. Speaker 2 00:16:06 All right. So you you’ve you’ve shifted your your branding towards restaurants. You’ve made the big shift. How did it go. Like you get some of those big dogs and is that the driver. Tell me how that this this strategy played out. Speaker 3 00:16:19 We we had one one of the big dogs in a Jamba Juice. That was our kind of a beachhead, I would say the early indicator of of why we were gaining traction. Jamba juice, those are first like main customer. And he was referring to us other Jump juice franchisees, which allowed us to start to recognize where the opportunity lies within the franchise kind of hierarchy, I would say. And as we went into the second half of, of 2020 was when we started to recognize this and preparing for 2021. you know, we’ve gone from, basically 400 K to just north of a million at the end of the year, which is pretty successful in itself, having turned half the business in March. Speaker 3 00:16:59 And we thought, okay, this is our we’re gonna make a big bet. We see the great rehiring as an opportunity to kind of ride this wave of what restaurants are going to go through next year, and we didn’t know if it during Covid coming out. It was it could be one, 2 or 3 years out. But how can we help champion within this space? a technology that allows people to go out and hire again because they’re going to have to over the next two years and going into January of 2021, that was the big bet we made as the whole company shifted to the strategy all in on restaurants, we became the vertical ized solution and we took it one month at a time. You know, we go, I think it was 6 million that year, for the entire year, basically from from 1 to 6, which I thought was just absolutely crazy. And in the first half of the year, we we’ve crossed 6 million. Speaker 2 00:17:53 Oh my gosh. So 500%, 600% growth in six months. Speaker 2 00:17:58 Yep. Wow. So, so now you got a whole new set of challenges, right? You you’re winning the pie eating contest. You get some more pie. So, so so how do you scale at that level? How many people are you hiring at this point? Speaker 3 00:18:09 Yeah. So we hired over 60, over 60 sales reps just in Utah here alone, that year. And, to your point, that was a whole new set of challenges, which was then my a lot of thought about, like, how do we how do we scale, how do we go higher that many reps have 5 or 6 reps a month every single month. Speaker 2 00:18:29 And what gave you I mean, you’re clearly at 6 million. You’re feeling you know, let’s let’s give us the color and the feel because so many people talk about finding product market fit. Yeah. And you were right there from not having it to having it. What are the you know, in addition to hey, we’re at 6 million. What are the signs and signals that like we absolutely have to scale like, yeah. Speaker 2 00:18:50 What did you start seeing that they said the convince you had product market fit. Speaker 3 00:18:54 I get this question off is just like what does product market fit feel like? I work with so many early stage founders at this point, and the best definition I have is when the market starts to pull you. And that’s what we saw over and over and over again. The further we went into some of these brands, the further we developed some of these relationships with some of these key franchisees, the faster that the referrals would come in from that brand. And we could directly correlate some of these referrals to to the exact person we had originally reached out to her and engaged with. And all of a sudden, we have, you know, you have people reaching out directly to my reps that, you know, had owned a brand. I have reps that were just the Burger King guy, and that rep got all the Burger King leads because he knows that brand inside out. He knows every single owner in there, and they are coming through, flying him to their own conferences. Speaker 3 00:19:45 They’re asking him to come speak at conference. Oh my goodness. 23 year old sales rep speaking at these franchise conferences, teaching them how to hire people. You never hired someone pretty good. Speaker 2 00:19:54 Sign lying or sales rep to come talk. Speaker 3 00:19:57 Yeah. So, the market was very much a good. Speaker 2 00:20:00 Example of pulling you, right? Speaker 3 00:20:01 That’s right, that’s right. Physically pulling us out to to to be at those events. and of course, like deals were coming from it. Right. Our sales cycle got faster and faster and faster. And you know, we were having so many one two call closes over the course of the seven days on these franchisees, we could land and expand, within these brands very quickly. Speaker 2 00:20:24 That’s that’s awesome. Okay, so back to the hiring you. You’ve got the signals of product market fit. You know how you know you’re working with a company that helps hire non desk workers, but it’s not necessarily your vertical. How do you find 660 people. Speaker 3 00:20:38 Yeah. I’ve been really fortunate to build a handful of teams here in Utah. Speaker 3 00:20:42 I’ve hired over 200 sales reps. just in Utah alone. and I have found there’s a couple of things that I think have really stood out in my experience of recruiting. I mean, I would argue I’m probably a better recruiter maybe than SLC or even because I’ve had to be my entire career. But, well, yeah. Speaker 2 00:21:00 A successful says leader. Recruiters recruiting on the job. Speaker 3 00:21:04 Yeah, yeah, exactly, exactly. So, I, I network a lot. I mean, I could, I know a lot about all the companies in Utah and what they’re doing, where they’re at, what they’re going through. And that’s simply just by. I spend a small fortune on just going to lunch with reps. I invite them to lunch. They’re willing to come to me. I’ve built just spent over a decade building a little bit of following on LinkedIn, which has helped, I think, tremendously. for me to be able to reach out to people and go to lunch and learn what they’re doing, and by doing that, it allows me to understand what podium is doing, what they’re going through right now. Speaker 3 00:21:41 And to understand, I use podium as one example. There’s 15 of them that, you know, I continually to pull from. but I can understand, who’s top performers in those organizations just by going to lunch, networking, having Having those conversations allowed me to get pretty targeted on my outreach for recruiting efforts. and in addition to that, it’s no different than the way we went and approached franchisees was, you know, we have five schools in the Valley here that I have deep relationships with that I’ve recruited from for many, many years and plugged into their sales program. I speak at their sales events. I’ve been really fortunate to work with the directors of those programs pretty closely. And, having recruited from them for a long time, I can recruit some of the top talent that comes out of these schools. And when you recruit a, you know, ex athlete out of any program, there’s a lot of eyes on them. And people look at where they’re going and they recruit like minded people. And I’ve, I’ve worked with some of the top athletes that come out of all these schools just by nature, if they want to get into tech sales. Speaker 3 00:22:46 And it’s an opportunity for them, and they have deep networks of other people just like them that also want to come work and be in tech sales. Speaker 2 00:22:55 That’s awesome. So so how did it end up? What was the the next couple of years like? Speaker 3 00:23:01 Yeah. So that year alone, we we went we grew from basically one to over 10 million in revenue. scaled the sales team, I think. I can’t exactly remember where we ended the sales team. We’re probably 60 or 70 reps at that point. Speaker 2 00:23:19 so from from founder sales to 60 plus and one, one year. Speaker 3 00:23:22 Yeah. Year and a half years. Speaker 2 00:23:24 Okay. Speaker 3 00:23:25 Yeah. and then we spent really the next six months continuing to grow. We we, basically grew to just south of 20 million. when I, I left there in, September of 2022, it was. Speaker 2 00:23:43 That’s amazing. What a what an incredible story. And, the company to go public, raise money. What was the company? Speaker 3 00:23:50 Yeah. So that we ended up raising a $100 million series B? you know, this was during the good old days of fundraising, which is very different. Speaker 3 00:23:59 But, you know, we, it was really, really fortunate time, you know, raised $100 million. The, the K through boys from Founders Fund to join our board. Jay Simons, the president of Atlassian, to join our board, really fortunate to work with a lot of. Speaker 2 00:24:13 Great, real, a real success success story. Speaker 3 00:24:16 Yeah, incredible. Incredible team. And they you know, they continue to now they’re continuing to build additional products for that market. Speaker 2 00:24:22 Awesome. Well, that’s a great, great story from like Inside the Crucible and getting the product market fit. That’s awesome. So and so you’ve done this at a number of different tech companies and you’ve got a great expertise. And now you’re bringing that expertise to to help others learn from it. Tell us a little bit about Blake Harbor Consulting. Speaker 3 00:24:40 Yeah. So I stepped away. I’ve got, like I said, four young kids. I stepped away from that in September of 20, 22. And, you know, I’d spent over a decade just, in a grind and, and had it emotionally been there for my family and a. Speaker 2 00:24:57 60 can’t be easy. Speaker 3 00:24:59 It’s a lot. So, I thought, okay, I’ll take a six month break. And I, during that time, I mean, I’m antsy, got a lot of energy. So I ended up meeting a ton of founders during what was supposed to be my time off. just two introductions, and I recognize this enormous gap in this transition from founder led to building a repeatable sales motion and founders trying to figure that out. A lot of technical founders that have never hired a salesperson in their life, how are they going to do this? And so, I thought, man, I could I thought I’d go back full time, but, decided to actually step back and say, you know, I can I can help multiple companies solve this over and over again. And it’s it’s where my passion lies, is helping founders find repeatability at the early stage and have confidence in hiring and building a sales team and reducing the risk of those hires. Most founders are stuck with the idea that they either hire an SDR and they’re all of a sudden SDR manager, or they hire the VP of sales for 400 K a year, which is a huge bet and extremely risky. Speaker 3 00:25:58 And most sales leaders have never seen that stage before. so I know help founders, build repeatability at that stage, help build the playbook, to reduce the risk of of those type of hires when they’re asking those questions. Speaker 2 00:26:11 cool. How how long do you typically work with a team? What’s your engagements typically look like? Speaker 3 00:26:17 Yeah, it it really depends. I’m really flexible actually on my engagement timelines because, you know, I’ve had engagements where we get in there and realize that that’s, you know, they’re a long ways from, Prague market fit and they actually need to go do something else, to where I’ve worked with companies for over 18 months at this point and, continue to work with them on, you know, a couple of them have hired VP of sales, and I help them go out and source that talent. We’ve found product market fit and started to scale and hired a few reps and then go hire a VP, SLS sales and continue to work and advise with those companies as well. So they’re pretty flexible. Speaker 3 00:26:54 But I’d say, you know, within the first six months you have a pretty good idea of what and if something’s working and either where we should double down or continue to like, point our efforts or where we might need to pivot. Speaker 2 00:27:08 Got it. And are you working primarily with B2B or B2C C type of companies? Speaker 3 00:27:14 Primarily B to B. Yeah. Okay. Yep. Speaker 2 00:27:17 And more SMB or enterprise. Speaker 3 00:27:19 SMB and lower Mid-Market. I don’t do much enterprise. I have great partners and referrals that I can send your way that are great options for that. But I am a SMB mid-market guy and that’s your specialty. Speaker 2 00:27:32 Just just as our story explained, knowing your niche and going deep in it is there’s riches in niches, right? Speaker 3 00:27:39 That’s right, that’s right. Speaker 2 00:27:41 Well, where can people find you? Speaker 3 00:27:43 Yeah, I can always find me on LinkedIn. I can’t accept any more connection requests. I guess they cap that. but you can shoot me a note on LinkedIn. I’ll always do my best to reply. Speaker 3 00:27:53 you can always email me. My email is just me at Black harbor.com blackbird.com. that’s usually the fastest way to find me or my cell phone’s, I think, public on LinkedIn. So you can text me anytime. I always text back. Speaker 2 00:28:08 Well, fantastic. Blake, that’s a great story. And I’m sure there’s a lot of people out there. Would love to learn from you. So thanks for sharing that with us this morning. And, good luck with with the business. Speaker 3 00:28:17 Thanks, Julian. It’s great to meet you and, great to chat through it all. Speaker 2 00:28:20 Awesome. Thanks a lot. Speaker 1 00:28:25 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.

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.

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) – Hello, this is Julian Castelli. I’m the host of the Growth Elevated Leadership podcast, where each week we talk with inspirational entrepreneurs and leaders in the tech industry. Past guests have included CEOs and CXOs of great companies like Work Front, Healthcare Systems in Moment, the San Francisco 40 Niners, and more. this episode is brought to you by Growth elevated. Growth elevated is a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learnings in an effort to become better leaders. We do that through this podcast, as well as events and a community of other tech leaders. If you’d like to learn more, please check us out at Growth Elevated. today I’m super excited to be. To be joined by Amelia Wilcox. Speaker 2 (00:01:17) – Amelia is the founder and CEO of Novartis. Novartis is a leader in employee mental health and wellbeing. Novartis, a high growth B2B company whose platform provides employee stress management tools and direct access to professional services. beyond Novartis, Amelia speaks on wellbeing, mental health and entrepreneurship at universities and events across the country. She is also active in promoting women and business communities and taking care of her family of five. Please welcome Amelia. Hi, Amelia. Speaker 3 (00:01:50) – Hey, Julian. Thanks for having me. That’s quite the guest list that you listed off. So I feel honored to be included with such great companies. Speaker 2 (00:01:58) – Well, we’re excited to have you. And, it’s been great getting to know you over the last few years and and, watching your journey at Nevada. And we’re looking forward to learn from it today. Speaker 3 (00:02:08) – Awesome. Let’s do it. Speaker 2 (00:02:10) – Yeah. Well, you know, tell us, you know, tell us what Nevada does. And how do you come up with the idea of starting that business? Speaker 3 (00:02:17) – Yeah. Speaker 3 (00:02:18) – So Nevada is an employee mental health and wellness platform. So we work with companies all over the US. And it’s an employee benefit where they can work with a provider or do self-guided care, across six different dimensions of well-being. So it’s a focus on mental health through the lens of mental health. but we recognize that there’s a lot of different paths to positive mental health for people, and we want to make sure we have the resources for all the things people need, whether that’s, financial well-being or nutrition, sleep, all the things. So it’s it’s pretty great. and yeah, therapy within like 24 hours. and we’re helping a lot of people. So it’s been really rewarding for me how I got started with this business. I actually ran a company before this called Incorporate Massage, and we did onsite massage therapy for employers, also as an employee benefit in the air space. and we were actually expanding to do all sorts of wellness services on site for companies. And so we were kind of evolving from just like an onsite massage company to onsite wellness. Speaker 3 (00:03:32) – We were expanding, and we had a lot of different partners that we worked with already that did, you know, onsite yoga or even like esthetics and nails and things like that, where everyone’s bringing everything into the office at that time, and we had grown the company to about 6 million in revenue. And then Covid hit and we basically went to zero in about ten days. Speaker 2 (00:03:54) – As, yes, an entrepreneur through Covid. We should talk more about that. But I’ll let you keep going. But I’m sure there’s stories there. Speaker 3 (00:04:00) – Yes. It’s a that’s a long story in and of itself. But yeah, the short version is we kind of looked around for a different problem we could solve. We didn’t know how long Covid was going to last. and my board really pushed me to just say, like, hey, what if this never comes back? What are you going to do? and so that was really difficult for me because I just couldn’t imagine a world where, like, what we live in now, my brain, my brain was like, no, of course everything’s going to go back to normal, right? and so I put together kind of a plan where I was like, okay, let’s see how we can, like, deliver wellness services instead of onsite, but doing them virtually. Speaker 3 (00:04:39) – And so we had massage therapists that already worked for us that did like personal training. We had registered dietitians, we had yoga instructors. And so kind of like our V1 was, let’s just do these sessions with employees one on one over zoom. Speaker 2 (00:04:52) – No employees are you are you A B to B to C model you you’re providing these to the individual consumer or the employee. But are you selling to the employer? Speaker 3 (00:05:02) – We’re selling to the employer. And then it’s being provided as an employee benefit that the employer is paying for. Speaker 2 (00:05:08) – Okay. Terrific. Yeah. You consider yourself a B2B business or B2C or. Speaker 3 (00:05:13) – B2B for sure. Okay. Yeah, we’re we’re selling the company. Even when we did massage, it was the same way. We never did like employee paid massage programs. That’s just not like my belief system is that, you know, the way we really help employees is by removing the things that are preventing them from getting care. So we have to make it affordable by, you know, covering the cost. Speaker 3 (00:05:36) – We have to make it accessible by bringing it into the workplace and making it really easy for them. So yeah. Speaker 2 (00:05:40) – So that’s, that’s that’s an innovation. Right. And that involves technology innovation and all the challenges of, of of who’s paying for what. And the complexity of, of health benefits I’m sure has been quite a bit. But let’s benchmark your journey here. So when did you start Novartis? Speaker 3 (00:05:57) – we launched with our first client in October of 2020. Speaker 2 (00:06:00) – Okay. So about four years now. and as he started at zero, where are you? Where are you now? Speaker 3 (00:06:07) – we’re currently, yeah, we’re at 1.5 million in revenue, and we’ve got 16 full time employees right now. Speaker 2 (00:06:17) – Okay. And I understand you just just raised some capital. Congratulations. Speaker 3 (00:06:21) – Thank you. Yeah, I was brutal. Yeah. No. Favorite fundraising environment? Speaker 2 (00:06:25) – The last 18 months has been a really challenging fundraising environment. So kudos to you to be able to come through and be successful there. Who are you? Who are your investors? Speaker 3 (00:06:35) – Access Venture Partners out of Denver, Colorado, and Firebrand Ventures out of Kansas City and Boulder, Colorado. Speaker 2 (00:06:42) – So fantastic. Well, you know, mental health is is really on the front page of the news these days with I don’t know if it’s social media or all the the turmoil that’s going on in the world or our politics or screens. But I keep hearing social, you know, the mental health crisis that we’re in right now is it seems like it’s bigger than ever. and it’s it must feel good to be providing those kind of services to people who maybe not now, don’t know how to get that help. Speaker 3 (00:07:14) – Yeah, it’s very rewarding. I, I really loved what we were doing previously in massage because we were really helping people, you know, in pain and who had chronic headaches or who were really stressed and anxious, like being able to physically relax them. you got a lot of positive feedback. And I felt like that was really fulfilling and my team was really fulfilled by that. You’re just getting like positive comments and feedback all the time. People are so grateful. And so it’s just really rewarding. Speaker 3 (00:07:43) – When we saw the opportunity to move into mental health, it was like, I didn’t even know we could like what we were feeling before as a company. and so that has been one of the most wonderful things about what we’re doing now is like, it’s it’s been, you know, we’re helping people who have problems in their marriage. We’re doing we’re doing like couples counseling where people have said like, hey, this saved my marriage. We have people that have said, this has saved their life when they’re dealing with extreme depression. And they needed to talk to someone. And they were, you know, having suicidal thoughts and, you know, people saying they just needed a friend to talk to, you know, on the lighter level or they’re experiencing a lot of stress and burnout. So we just again, it’s just like a lot of really positive difference that we’re making in the world that people seem to really, really need. And so being able to bring it in through the workplace and make it accessible and remove the, the concerns around like, oh my gosh, have I met my deductible yet? And your health insurance or do I have a copay like that? Cost can prevent a lot of people from getting the care that they need. Speaker 3 (00:08:47) – so we’re layered on top of health care, usually as a, as a faster way for someone to get in to see someone without having to go through insurance because it’s going through insurance is really it’s just a very friction. Speaker 2 (00:08:59) – Yeah, there’s tons of friction. And then you have this category of mental health, which I don’t know, am I right when I say it’s it’s kind of emerging into people’s consciousness that it’s something that you do can go get help for. A lot of people live with this for a long time without getting help. Is that is that accurate? Speaker 3 (00:09:16) – Yeah, I would say it’s definitely being brought to the forefront of like a social agenda. If you look at the US Surgeon General’s top six priorities, right. So you go to the website, US Surgeon General talks about like what his initiatives are. mental health and provider burnout are like two out of his six, initiatives that he’s really focused on. So even like at a, at a federal national level, we’re seeing that messaging being pushed out. Speaker 3 (00:09:44) – We’re seeing it, you know, city level like high school, right? They’re bringing in speakers to come in and talk to high school students. And so it’s raising everyone’s awareness. And and that’s really helping break down a lot of the stigma around it where people used to think like, oh, if I go get help, I’m broken or, you know, there’s something wrong with me or I don’t want to admit this, and it’s making it a lot more just approachable, like, hey, wait, maybe this is part of, like, normal self-care. Error, and we’re starting to see that shift slowly. over the last few years, just starting to happen. So a lot more people are willing to reach out, which has been great. Speaker 2 (00:10:19) – So the end consumer now is more aware that there’s help. You’re actually helping them understand that too by providing. Providing information about the various types of help that might be provided. What’s the challenge with the business model in terms of, making this a benefit and, and, you know, how does your business what does your economic business model work like? Speaker 3 (00:10:44) – Yeah. Speaker 3 (00:10:45) – So, I mean, we sell into HR, so there’s a couple challenges with that, right? Like HR pre-COVID, have their own budget and they could sign off on things with maybe without a cfo’s approval, where they could be the decision makers in some cases. post. It’s not even Covid, I would guess. I would just say, like with everything that’s happened in the venture market and how that’s trickled down into the economy as a whole. so the last 18 months, essentially, we’re seeing more HR people with less power, less ability to make decisions. and so we’re having to bring in like the CFO or the CEO and a lot of these conversations, or they’ll have like big committees that are deciding how to spend the money. Speaker 2 (00:11:28) – So now they but they’ve already got health insurance. The you know, yeah, all of our, our companies are providing health insurance. But is the mental health something that’s not included in their current packages. And do you have to educate them about that. Speaker 3 (00:11:41) – No. Speaker 3 (00:11:41) – So it is included in their packages. A lot of times they’re coming to us because their employees have a high need. So a typical HR person, there’s people marching into their office all the time saying, I’m really struggling with this, how do I get this help? And they can’t get in through insurance because it’s like an eight week wait. and so if you’re having a mental health challenge, you don’t want to wait two months to see someone. So there’s this huge gap where it’s like, yeah, we have health insurance, but like, how do we help people now? because a lot of people just give up. It’s like, I’m not going to wait two months to go talk to somebody, and then they just don’t get any help at all. and so we kind of come in and fill that gap. There’s also a lot of times we’re coming in and we’re replacing what’s called an employee assistance program. a lot of people are familiar with EAP. Maybe you use them in the past. sometimes those are provided, like with a health insurance package. Speaker 3 (00:12:28) – they’re basically designed for crisis care though. So it’s like, hey, if you’re struggling and you need to talk to someone immediately because you’re, you know, having an anxiety attack or whatever the case may be, you’re going to call this one 800 number. Someone who’s not a therapist is going to answer the call, and you’re going to tell them your problem. Then they’re going to give you a list of people to call, and you’re going to call all these clinics, and you’re going to get on a list and probably wait 2 to 3 weeks. you don’t get to choose your therapist. Usually they just assign someone to you. They’re usually the least experienced therapist. So they’re kind of like getting their experience, you know, helping you out. They don’t have a ton of experience to offer. So it’s usually not like the best quality therapists. And then you can only see them for 2 or 3 visits. And then like that’s your EAP benefit. And so kind of contrast something there. Speaker 2 (00:13:16) – But it’s not it either either has time delays or it’s not enough. Speaker 2 (00:13:20) – And you’re offering an alternative benefit. And and ultimately are you selling that as, as something that that’s going to help with, with retention and just a healthier employee population? yeah. You know what what what what is what is your primary, driver for people to say? Yeah, I want, I want to add Novartis to my benefits packages. Speaker 3 (00:13:42) – Yeah. So it’s a couple things I would say retention is a big piece of it. even just like so HR tend to be like really compassionate people. That’s why they’re going to HR in the first place. And they just really want to help their employees. And they see these employees with needs that are being unmet. The benefits they have in place aren’t sufficient. and so they want to help them. So we hear things like, HR is like, I can’t do my job because I’m basically being a therapist for my employees all day, okay? They’re looking to bring somebody in to take that workload off of their plate. and it’s been incredibly effective. they’re looking for things. Speaker 3 (00:14:17) – We’re seeing a lot more, high prescription health care costs around mental health, a lot more what people are calling like mental health days, right? When people are taking days off because their their stress level or their anxiety is just so high they can’t function. And these are trends that have been just like going up even since Covid ended. They’re continuing to increase. And so companies will say, oh my gosh, like we’re having a ton of absenteeism due to mental health, and we need to put something in place that will help people get the help so it doesn’t get to that point and our employees will come to work more. so yeah, productivity and absenteeism is one of those. And then of course, the health insurance cost where they say, oh, mental health prescription costs or mental health visits are in like our top three costs. And we need to figure out a way to reduce those. Speaker 2 (00:14:58) – So it sounds like the market’s coming to you a little bit or you’re you’re you’re seeing the need grow and you’re addressing it. Speaker 2 (00:15:03) – So it has is it easier to sell today than it was maybe three years ago because of the market trends. Speaker 3 (00:15:10) – in some ways, yes, it’s easier to sell because I think people are recognizing this isn’t going away. I think in the beginning people were like, oh, mental health is kind of like the top of mind, but maybe that’ll pass, like once Covid passes and it just kind of go away. And that hasn’t been the case. It’s actually if you look at the statistics, it’s gone up nine points. Mental health issues have gone up, nine points since Covid ended. Yeah. So over the last couple of years. So, yeah, I think it’s easier to sell in that, like, everybody’s looking for it and everybody wants something. It’s not as easy to sell in the last 18 months, because air has just kind of been like their legs have been kind of cut off out from under them. It’s like, hey, there’s tons of reductions in force happening. People are cutting their benefits. Speaker 3 (00:16:02) – And even though it’s like the need is the highest it’s ever been, if they can kind of squeak by maybe one more year, you know, we’re just seeing a lot of companies that are like, yes, we want this. We can’t implement it this year. We have to like, this is like a 2020 5th January 2025. So our deal cycles have gotten a little bit longer. air is having to bring in, some of the C-suite to get their decisions made instead of being able to make decisions on their own, which is extending the sales cycle, as well. And then just a lot of a lot of challenges around budget. Everything’s just kind of down to budget right now. Speaker 2 (00:16:35) – The last yeah, the last 24 months have been dramatically harder for fund raising. And that’s trickled down, you know, the economy with, with with a stall out in the economy, there’s been a lot of cutback, with businesses in general. And they’re spending. Do you, do you focus on any particular, verticals you sell into? I know you and I are both in tech. Speaker 2 (00:16:56) – Are you selling into tech? Is that that that group has been hit pretty particularly hard. Have you thought about other pivots? Speaker 3 (00:17:02) – Yeah. So yeah, that’s a great question. when we started at the beginning of last year about 70% of our revenue was in venture backed tech. So when. Speaker 4 (00:17:13) – Okay, so you. Speaker 2 (00:17:13) – Really got so, you know, okay, this is the entrepreneur’s journey that we want to capture. You know, first you you you pivot from from physical wellness and massage to mental mental wellness and then you, you you you go from a period of, of abundant funding in the markets to brutally difficult for both you as a, as a founder, having to fund your own business. But now you’re also serving those customers. Right? So. But talk to us about what it’s been like working with the venture community, the venture funded businesses, and what you’re doing about that challenge now. Speaker 3 (00:17:47) – Yeah, I mean, exactly. We we woke up and we’re like, all right, we have all these like huge deals with amazing companies and they’re like getting to the finish line. Speaker 3 (00:17:56) – It’s like you got to like March of last year. And all of a sudden everybody’s like, oh, we’re doing huge reductions in force. All new benefits are on hold. Right? And you’re thinking, okay, maybe next quarter, okay, maybe next quarter. And a lot of those, they’ve now been put on hold for like years now we’re like two years maybe 20, 25. so I realized pretty quickly as we had all these great deals that, you know, we’re going to launch our revenue, and then all of a sudden they had just all stalled. I was like, crap, we we can’t sell into venture backed tech. We can’t focus all of our efforts there. It’s also where most of our competitors are focused, too. And so I just did an analysis. I’m like, okay, where else are we winning? What’s like our number two market and our number three market. And we saw that, health care and education were both, markets where we had quite a bit of clients. Speaker 3 (00:18:43) – they were happy we didn’t have much churn. and, you know, we just had really good utilization metrics. So I was like, okay, let’s start running some campaigns to like, double down on health care and education. And, we’ve kind of moved around within those to figure out, like where our focus is right on healthcare. Is, is it hospitals? are we focused on clinics, long term care, you know, where are we seeing the need? Where are we seeing the dollars being spent in the budget? and we ended up with a primary focus as of today on really, like, small to medium hospital networks, is where we’re focused. And then we do we have continue to get more like higher education on the platform as well. so we’re seeing those come through pretty consistently. And so now where it was like 70% venture backed tech, now we’re sitting at like 25% venture backed tech because the ones that we’re already working with us for the most part, they’re not pulling those benefits away because their employees are using it. Speaker 3 (00:19:38) – They’re seeing the benefit. And so they’re cutting other things and, you know, cutting teams. But keeping those in place, well. Speaker 2 (00:19:44) – That’s that’s such a great exercise and, and discipline to actually look at your customers and figure out, you know, where you can focus and feel like you’ve got your best chance of success. Right, because you have limited resources. And if you can find an area that, like you said, has good retention and good economics and really are getting benefit from the product, you can double down on that. And those those categories are huge, right? So I’m sure you’ve got plenty of headroom to be able to sell into healthcare and, and education for quite some time. Speaker 4 (00:20:15) – Yeah. Speaker 3 (00:20:15) – There’s there’s a lot of experimentation too. Like if we’re just talking about healthcare, it’s like, okay, we’ve we’ve always worked with health insurance brokers that sell across all industries. Are there brokers that specialize just in selling into healthcare? And it turns out that there are. So we’re like, okay, let’s get meetings with those people. Speaker 3 (00:20:30) – Let’s go to conferences that are just healthcare specific. Let’s see if we can get in with like a group purchasing organization that sells into healthcare. And so we’ve got a lot of those kind of irons in the fire, right now that are coming to fruition, which is which is exciting. So I think we’re going to be able to open that category up even more. Speaker 2 (00:20:47) – All right. Well, fantastic. That sounds like a great pivot and good luck with that. so, you know, four years in, you’ve had a couple pivots, you’ve gone through a recession, you just raised money. You’re still alive. Congratulations. you know, what lessons, would you like to share with with with our community in terms of, you know, going through those challenging times, looking back. Speaker 3 (00:21:09) – Yeah. I think so. On a on a personal level, one of the biggest lessons I learned, is just that. You know, I think growing, growing this company growing the last version of of this company, which would be I will refer to as my last company. Speaker 3 (00:21:29) – I think there’s just been I haven’t really had, like a big exit or anything like that, like some entrepreneurs. A lot of people will say, you know, after I’ve had my first exit, then after that it’s like really fun, right? They’re like more experimenting. They can take bigger risks. It’s not as scary. so I’ve just been very focused on, like, I’ve got to have a good outcome and this fear of like, man, if this fails, I don’t know what I’m going to do because I basically have worked for myself since I was like about 20 years old. And before that it was like I had two jobs. I worked at the YMCA and I worked at Domino’s Pizza. So in my mind I’m like, I didn’t graduate from college, I don’t have any real jobs to put on my resume. So like, where would I go work if I’m not working for myself? I’m not building a company. So I kind of had this fear that if this fails, like, you know, my family’s going to lose their house, we’re going to be destitute. Speaker 3 (00:22:14) – Like, I don’t know what’s going to happen. And so this is a lot of weight to be carrying around, really high stakes. And as I’ve looked back. Speaker 4 (00:22:22) – What it’s incredibly. Speaker 2 (00:22:24) – Stressful. Speaker 3 (00:22:24) – It’s it’s very stressful. And so as I’ve looked back of like how I have grown in the skills that I’ve gained and like, through all of this process, and kind of learned more about what type of opportunities would exist for a person like I am. And like, actually, I am employable. I could go onto another company where they need a co-founder, and I know how to build the building blocks of a company and how to hire and find good talent. Like, I’ve developed a lot of those skills, and I could I could get hired at a, at a just a normal company to with the skills that I have. and that’s taken a lot of pressure off of me, which is allowed me to, to kind of be a little more free to take risks and have a little bit more fun with it. Speaker 3 (00:23:08) – so for me, that was like a really life changing lesson where it’s like, oh, actually, if this fails, it’s not the end of the world. And I have other entrepreneur friends that have felt the same, right? Where it just feels like everything you have is on this one bet. And if it goes wrong, and the amount of stress and anxiety that causes inhibits your ability to really drive the company well, you know. Speaker 2 (00:23:27) – Absolutely. No, I know what you’re feeling about I, I call it the waking up and staring at the ceiling at four in the morning, exercise where you put all that pressure on. But but you’re right. So having the confidence to to know that there are going to be lots of lots of doors that are going to open, that you don’t know, that are even there today, or that they will open, and the confidence that you can find your way through, you know, and now you must have more confidence. You’ve done several pivots. You’ve you’ve raised capital in a challenging environment. Speaker 2 (00:23:55) – You’re seeing more opportunity. And, you know, you probably couldn’t have seen the opportunity you’re looking at today 18 months ago. Is that. Speaker 4 (00:24:00) – Correct? Yeah. Speaker 3 (00:24:01) – Oh, 100%. It’s and yeah, you just never know what’s coming down the pike. And I think too, you get you’re going to get thrown curveballs like there is like a real element of luck, a large element of luck. Right? I can have the skill set to build the foundation of a, of a healthy company with smooth operations and, you know, great financial hygiene. I can understand go to market really well, but it’s like if the market’s not there, I mean, there’s just so many variables. It’s almost like we have to kind of give ourselves permission that it’s like, if the company fails, it doesn’t mean you have failed. It doesn’t mean you’re a failure. It may just mean like the market isn’t ready for this product or the market changed or, you know, I mean, I have I have a couple good friends that have had to like, shut down businesses with fantastic technology because there wasn’t really a market for it yet. Speaker 3 (00:24:54) – You know, and that doesn’t mean that they failed or their technology was terrible. There’s just so many elements that have to be perfectly aligned to really have that explosive growth that you know you want in that company. Speaker 2 (00:25:06) – No, I think I think you’re touching on a really huge point, which is the confidence the, the to be able to take what comes and, and have confidence that you’ll be able to get through it. And it takes that to be an entrepreneur. That’s part of that, that, irrational courage that founders and entrepreneurs have that, that, that. Allows them to, to to do irrational things and great things and change the world. So, you know, how do you how do you share that message? It’s so powerful. I’m grateful for you being your your candid, disclosure here, but how do you do you have other groups that you work with and, and does this topic come up a lot? Speaker 3 (00:25:45) – Yeah, I do, I, I personally like to mentor other entrepreneurs, especially female entrepreneurs, is kind of like something I’m really passionate about. Speaker 3 (00:25:54) – So at any given moment, I probably got like 3 or 4 different women that like, I’m meeting with and helping and taking calls with, and you know, that they’ve never raised venture capital before or they’re not really sure how to get started or, you know, they’re struggling in this area or that. and yeah, I think it’s important. I mean, one of my friends just finished a fundraise that she expected to take three months, and it took her six months. And and running the company and like fundraising is brutal. Normally it’s like I was my husband. So I raised capital five times. Every time he’s like, okay, he’s got to like, gear up. My family’s got to gear up. They’ve got to be like, ready for the haul that they know is coming. Because I’m I’m basically absent for that amount of time because I’m running the company. I’m flying all over the place. I’m having a million meetings. It’s incredibly stressful. It’s up and down. You get all excited about an investor and then they don’t invest, right? You know, I have to I think I my last fundraise not the one I just did, but the one before that. Speaker 3 (00:26:49) – I think I pitched 69 VCs before I got a term sheet. And so, you know, it’s just like, you know, it’s going to be hard. You know, it’s going to be difficult. You don’t expect that to be six months of that like that is that is brutal. So anyway, she just finished this fundraiser and she’s so burnt out. And I had finished mine like a month before. And she’s just like, how did you get through it? How did you recover? And I said, you know what? I took a ten day vacation with my husband right after it closed because I was like, I have to have this time to recharge because I was so wasted. And you run your company better when you take that time for yourself. Because I was just in this mode where I was so in the weeds and so, like zoomed in on everything and pulling out for ten days got me like to pull back and like, zoom out. And I could think a lot more strategically. Speaker 3 (00:27:37) – And we have like a ton of exciting stuff going on now that if I think if I would have just powered through it, I don’t know that my brain would have worked the same way. So we I think we forget that, especially if we’re, like raising money. We were like, oh, our VCs are just going to expect us to, like, jump in there and, you know, use their money. We got to be seen as like, oh, we’re working so hard to execute on the capital they gave us. But I think we need to give ourselves permission to like, take that break and take care of ourselves, because having a burnout CEO isn’t in the best interest of the company. Speaker 2 (00:28:07) – Well, that’s that’s a hugely important factor. And you know yeah we’re talking about mental health and your company’s an expert at that. And you’re helping people throughout all your clients and their, their employees. So that’s a great, great perspective. And I think people have to understand that. Speaker 4 (00:28:23) – Well, terrific. Speaker 2 (00:28:24) – I really enjoyed chatting with you today. you know, in addition to this podcast, you know, what do you like out there? What are you reading or what are you listening to? That’s that’s helpful on your on your journey? Speaker 4 (00:28:36) – Yeah. Speaker 3 (00:28:36) – I mean, my favorite podcast ever is how I built this. So I can listen to that anytime. My kids love it. I’ll sometimes let them pick an episode when we’re on like long trips and just be like, what company do you want to learn about? I just love the the beginning stages and the creation of companies is my favorite part. as far as books I love, Extreme Ownership is probably one of my favorites of all time. Just like this idea of like, always taking ownership for how things go. And I mean, we’ve everyone on our team has read that it’s like one of our core values. we’re always pushing for that, like this culture of accountability. and then right now I’m actually reading the four disciplines of execution. Our whole leadership team is reading that. Speaker 3 (00:29:20) – One is the four principles. And how to how to create alignment across an organization like powerful, you know, taking taking your one big risk. and so we’ve been really focusing on like, what is our wildly important goal. And like the big risk that we’re going to take and put our, you know, 20% of our effort toward that one thing outside of what he calls the whirlwind, right, the day to day. So, like. Speaker 4 (00:29:44) – Those are some. Speaker 3 (00:29:45) – Yeah. Yeah. So those are some of the ones, that I’m really focused on then. I love mental health podcasts and like, things like that for like personal development too. So. Speaker 2 (00:29:56) – Oh, fantastic. Well that’s that’s great. I appreciate your time today, and I can’t wait to hear about your success over the next, next few years. Thank you for joining us today. Speaker 3 (00:30:07) – Thanks, Julian. Speaker 2 (00:30:08) – All right. Amelia, take care. Speaker 1 (00:30:13) – 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. Speaker 1 (00:30:23) – 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.

Speaker 1 00:00:02 Hello. Welcome to the Growth Elevated podcast. Today I’m super excited to welcome Dave Carruthers. Dave was the founder of Vox Pop me. I had the pleasure of working with him for several years, and we’re going to talk about that, that journey of building a tech company. Dave, hails from the UK. He is now an entrepreneur in the United States, and, he is a tenacious entrepreneur with some incredible stories. And I can’t wait to to hear them for our group. Please welcome Dave Carruthers. Speaker 2 00:00:33 Hey, Gillian, good to see you. Speaker 1 00:00:34 Great to have you, Dave. so obviously, you and I known each other for a while. We’ve had the pleasure of working together. my goodness, the amount of late nights, the amount of times we’ve set over a beer or whiskey, talking about stories. I think we could probably do five podcasts to pull out all those stories. Speaker 2 00:00:49 For sure. Speaker 1 00:00:51 But I’m looking forward to start. Start today. obviously we have to know each other working at Vox Pop. Speaker 1 00:00:56 Me, tell us a little bit about Vox Pop Me and the founding story. And when you thought that this idea you had could be turned into a company. Speaker 2 00:01:03 Yeah. For sure. So, we started Vox Pop me in 20, 2013, and, it was a kind of nine year journey for me from kind of zero to kind of just under 10 million of RR and kind of what we really kind of focused on building with, with the company was helping consumer brands really get to know their customers better. we really kind of, leaned in to video as a medium, and the idea for the company kind of came out of kind of seeing the the kind of rise of everybody having this smartphone in their pocket. It was just kind of like, well, you know, we looked at kind of how companies got feedback from people and they did all these surveys and it’s like, wouldn’t it be cool if as a brand, you’re Nike and you can just say, hey, we want to know what a hundred people think about this topic and give get feedback in, you know, 60 minutes, you know, a couple of hours. Speaker 2 00:01:57 And, it was really. Speaker 1 00:01:59 What were they doing that at the time if they wanted to find that out, what’s the what’s the state of play before vox pop? Me yeah. Speaker 2 00:02:04 So before vox pop me I mean, you’ve got two sides of the research quantitative which is your traditional surveys and then qualitative which was more kind of traditional kind of old school focus groups. And the focus group hadn’t really been involved since, you know, when it was originated in the 50s and 60s. And what we wanted to do is kind of mash the two together and essentially bring these, advances in technology forward and create something that was a video survey. So all of our surveys were typically 3 to 5 questions. People’s responses were about 60s per question, and it was done with that selfie style of video. And that was key, because what it allowed people to do is just articulate them their thoughts more naturally. But what it also did on the back end was provided the brands with really powerful consumer feedback that they could share with their stakeholders. Speaker 2 00:02:50 Tell, tell better stories, really kind of understand the consumer. The power of video to influence was huge. It was, you know, so funny. We saw so many times at big brands, you know, how, you know, there’d be survey data and people would ignore it. But then you show them a handful of clips of someone talking about the problem, and all of a sudden that’s what drives changed because because essentially, you know, as human beings, we kind of kind of, we need stories. You know, storytelling is such a core part of kind of how we make decisions, how we, you know, create emotion. And, you know, whilst the data provides that kind of rational, side of the thinking, the kind of emotional side, was missing. So, yeah, our value proposition was really about getting to the consumer, consumers meeting them where they were in the world and being able to, you know, you think about, the efficiency of being able to get into someone’s home and see how they’re doing things. Speaker 2 00:03:43 You know, previously to that, they would send a film crew and be like, hey, just that natural, you know, show us, show us dinner time at your house. And it’s like there’s like three camera crews and a moderator there. And, you know, this is this was so much more kind of like intimate in terms of getting into consumer’s lives and being able to understand them in the moment. Speaker 1 00:04:01 So that’s that that’s a strong value proposition. You can go out to more people, you can do it much more quickly, and you get that into some intimacy in that, that, that authenticity of, of people, you know, because of the comfort they have with their phone and the fact that they’re actually talking to their phone on all kinds of mediums. You’re bringing that to the corporate world and, and, you know, did it take was it hard for the corporate customer to adopt that? Did they see this right away and say, oh, we want this, or what were some of the the challenges and getting them to change their ways? Yeah, I. Speaker 2 00:04:32 Mean, I think, for the first, first 4 or 5 years, kind of felt like a missionary evangelizing. the good word of video, so ironically ended up moving to Utah, but, yeah, I mean, just. Yeah, it was it took a lot of, like, education and advocacy and, you know, kind of, you know, I think kind of people, like, were intrigued by the concept, but we were definitely selling into an. Industry that was, you know, this is how we do things. This is how we’ve always done things, you know, and things there. And, you know, in the early days as well, you know, our kind of hypothesis of like, people are going to want to watch all of these videos and really get close to the consumer. And the reality is that was too much of a time bird and they didn’t have time. So, you know, we were we were, you know, I guess doing AI stuff before everyone was doing AI stuff in terms of how do you take this corpus of, you know, hundreds of videos and use AI to, you know, manage transcription, theme, coding sentiment, you know, and the platform was even able to be like, hey, out of those 200 videos, give me a reel of females under 30 talking negatively about these three things and bring that into a highlight reel. Speaker 2 00:05:42 So yeah, really kind of took the all of the pain points out of working with video, there. But yeah, definitely in the early days kind of getting consumers, brands started using this. And even in the first days, we, we started the company thinking we were going to be a tool for the market research agencies. you know, the big the contours of the world. GfK is these big, big agencies. And, you know, we kind of got pushed back. Our clients aren’t asking for this. It’s not interesting. And that essentially forced our hand to be like, okay, well I guess we need to go and validate that directly with Unilever themselves and these other brands and McDonald’s and, you know, and all of a sudden, like when we got into the right people, the forward thinking people in those organizations that could see that this insights function needed to be the, evolved. Like that’s where we start to get traction. So that, again, I think is a big thing for any startup is you’ve got to find those early champions that believe in your product, that they’re trying to do something in, within their business. Speaker 2 00:06:39 And, you know, there’s some great examples of clients that were early adopters of Vox pop. Me, they spoke with us at conferences. They kind of turned their department around, and then they’ve seen benefits in their career in terms of their progression in terms of like, you know, the now running, you know, you know, hugely, large departments within these big companies because they’ve kind of, they adopted tools like ours and others. Speaker 1 00:07:04 You know, that’s a great point. You really had to find the early adopters, the the people at the beginning of the crossing of the chasm. Right. And let’s just go over the dates. So you started the business in 2013 and you grew it from, from zero to, you know, around 10 million of RR. What what was the headcount? You know, when you. Yeah, we got, we we got. Speaker 2 00:07:24 Up to about 70 I think at you know when I kind of left the business. So yeah, that was. Speaker 1 00:07:30 A great run zero 0 to 10 0 to 70. Speaker 1 00:07:32 But you know, you’ve got a great value proposition. You’ve got big customers, big enterprise customers. So all that looks positive. But I think, you know, sitting here now in 2024 looking back this seems obvious. But like you said, it really required people who were willing to change the way they were doing doing things. And as I also recall that it was it was also the way they were used to buying things and conducting the work. Right? So that was that was a big challenge. Yeah. I mean, that. Speaker 2 00:07:56 Was a huge challenge. I mean, you know, now it’s kind of a fait accompli that most of these insights teams are buying multiple tools on an annual license in a, in a SaaS model. And I you know, I remember kind of when we first sat down and I was kind of explaining to you a bit more about the business and you’re like, okay, tell me about the revenue. And you’re kind of like pulling faces and like, what? What do you mean? This is there. Speaker 2 00:08:18 And like, we’re kind of like working through it. But yeah, I mean, like in the early days, like these people were used to buying projects, you know, and yeah, it was it was wild. You know, they could get 50 grand signed up for a project, but try and get them to get 12 grand, signed up for a subscription. And it just like that wasn’t how they thought about stuff. So yeah, it took a lot. You know, we had a we started off as a kind of, pay per video kind of usage kind of based model. We then, moved into more of a like a buy and bought credits and then eventually kind of, through through kind of, some of your leadership and kind of focus and again, kind of, you know, you know, what the our investors wanted to see was, you know, moved more to a full SaaS model. But, you know, again, it was it was interesting because we were kind of, you know, a lot of that we were you’re trying to sell something that people aren’t sure they want yet. Speaker 2 00:09:09 Yeah. In a, in a modality that they definitely aren’t comfortable with yet. And so trying to balance that and. Speaker 1 00:09:16 Trying to change the, the, the long standing behaviors and, and relationships that the industry have is difficult for a startup. So that was you know, I want to talk about, talk to you about in this next stage about the move from a UK company to the US, which you, you know, you and me have done very successfully. you know, I think 80 or 90% of the customers now are our US customers. But one of the challenges was what you just described, which is, you know, coming we wanted to raise capital in the US. We needed to have a business that that was attractive to US investors. It was a SaaS. You know, it was a it was a it was a business that had some service revenue. We moved it to, to to SAS and we were successful in raising capital. But let’s talk about just the overall other. Speaker 1 00:10:00 Challenges of moving to the US. You made the move to say, hey, you know, you’re an aggressive, bold founder. You said, I’m going to go plant the flag and live there myself and come to Utah, as you mentioned. Tell us a little about that story and how that impacted your founding team. And, you know, looking back, is that the way you recommend companies would would expand in the US? Speaker 2 00:10:19 Yeah, I mean, I think, you know, I was I was fortunate enough to kind of, you know, it always been a personal ambition of mine to kind of, you know, I’d been in tech for a long time, building companies, you know, it was a personal ambition to kind of move to the US. I never imagined it would be to to Utah rather than kind of Silicon Valley, I guess. But, you know, we had a we had a great partnership with a company here, and it was a it was the catalyst to kind of convince the board that, hey, trying us expansion would be would be good. Speaker 2 00:10:49 I mean, we were probably about a million in revenue when we went to the US, which is way earlier than I should say, is that. Speaker 1 00:10:55 You think that was the right time to move to the US or what? In retrospect, what do you think? what do you what do you need to be able to move the US? Let’s start it that way versus a revenue number. Speaker 2 00:11:03 I think, I think it’s really tough to find if you might get lucky and find that key hire and things like that. But I was very much of the opinion that if we were going to go to the US, it needed to be a founder mentality person. It couldn’t just be a job for somebody, you know, it’s the biggest market in the world. you know, you’ve got to get it right, you know, kind of, if you kind of outsource that, you know, is it because you’ve picked the wrong person, or is it because, you know, the product isn’t isn’t there and stuff? So as ever, kind of throughout my career, I’ve kind of been opportunistic. Speaker 2 00:11:43 You know, there was an opportunity to kind of move to the US because of this partnership. so I was kind of really focused on how do we leverage this opportunity, to kind of to show that. But it’s yeah, there’s definitely challenges for sure. Speaker 1 00:11:58 So, so you chose the model of one of the co-founders moving and establishing the base and leading from the front. Do you think that was a key to your success? Speaker 2 00:12:09 I think it was a big part of it. Yeah, I still firmly believe that, you know, and again, it’s not it’s not, you know, something everybody can do and depends on your kind of stage of life and where you’re at and stuff. Fortunately, like my kids were young, my wife said yes, you know, kind of, you know, like, I think you’ve got to get kind of buy in and stuff. But, you know, it was I definitely sold it as a let’s go to Utah for a year. maybe knowing that like many. Speaker 1 00:12:36 People have done that. Yeah. Exactly. Right. How many years has it been now? Speaker 2 00:12:40 Guest nine. Yeah, yeah, I’ve been in the US nine years now, and yeah, my kids accent’s a little bit ruined. But, you know, other than that, it’s, it’s. Yeah. You know, love living here, particularly in Park City with all the great mountain biking, snowboarding and kind of, you know, access to, to, to everywhere in the US is just so easy with the, with the airport being 30 minutes away. Speaker 1 00:13:02 So let’s let’s unpack it. You chose the strategy of the founder move, which is bold. And I think it was a key part of me success. What you know, once you were here, what were the next handful of hires? And looking back, you know, were they the right, right sequence? And what were the critical ones that allowed us to get scale and us. Yeah, I. Speaker 2 00:13:23 Mean, I think we you know, initially it was just some kind of, more junior folks just to help, like on the project management side and the, basics there. Speaker 2 00:13:32 But, I mean, obviously kind of bringing yourself on board as our CFO was it was a big move. we’d obviously been chatting about kind of a fundraising journey where we where we were, and it was kind of, you know, it was such an interesting challenge going from the UK market and having raised money there, which is, you know, relatively conservative versus kind of US approach to fundraising. And I’ll never forget I had, you know, at the time we had one deck. And you know, I’d advise fathers founders. Now if you’re raised in the UK, have one deck and if you’re raising the US, have a different deck and don’t those decks are probably a little bit different because I presented this deck in the UK and someone was like, this is crazy. It’s like pie in the sky. It’s two things. What’s your EBITDA? You know, all this kind of like kind of UK kind of thinking. And it has improved in Europe and the UK, but it’s still lagging way behind where the US kind of thinks about scale and ambition and things like that. Speaker 1 00:14:28 What was what what was your revenue state when they were asking about EBITDA? Speaker 2 00:14:32 Oh like, yeah, like a million or something like that. Yeah. Okay. Yeah. Yeah. Speaker 1 00:14:36 It’s like that is definitely different. That’s that’s when you and I met and I’d been coming from Bessemer. I share with you there’s a little different expectations here in the US. Yeah. Speaker 2 00:14:43 Some of us like UK early stage investor. That’s like asking for a five year cash flow forecast balance sheet, fully integrated balance sheet. And you’re like, what do you want? Like, you know what I mean? It’s just such a disconnect between, you know, all that it is. And then, I presented exactly the same deck to a, a usb-C who’s based in New York. And, he basically described what we’re building as a lifestyle hobby business. And I was like, hey, Morley kind of offended by that because I was like, you know, that’s not what we’re building. But B is like the disconnect between one guy thinks this is a lifestyle hobby business, and another investor thinks that we’re, you know, pie in the sky, crazy big dreamers. Speaker 2 00:15:24 It’s just, interesting. So yeah, definitely some cultural differences on kind of raising capital. the growth expectations, obviously we were raising kind of a larger round kind of more towards 2017, 2018. And again, the market’s changed a lot. You know, we were definitely in a zero interest rate situation growth at all costs. You know kind of don’t you know don’t worry too much about the burn. As long as you’re growing 100% year over year, just keep on that trajectory. right. So you know and you know, that was this was a great while it lasted, but it’s also kind of a conveyor belt that you get get on and can be difficult to, to keep up. So, you know, there are definitely some benefits of, you know, the UK investor is more pragmatic, more willing to be patient support. the US investor, it’s like, you know, you better hit the market. Otherwise we kind of writing you off from our portfolio’s return. So, you know, there’s pros and cons of both both sides of that. Speaker 2 00:16:22 But that was probably the biggest thing for us. Like the cultural differences between, our mixed investor base having having, investors on both sides of the pond. Speaker 1 00:16:32 Yeah, the investing on both sides is definitely a rich topic. And I think you summarized it well. Let’s talk about building a team that can expand the US. I think that with with you and Victoria moving over here, you know, you had a co-founder and a senior operational executive. Do you think that’s the, you know, the right, set of anchors that you need? And let’s talk about some of the key hires that, you know, you made for the for your go to market expansion. Speaker 2 00:17:00 Yeah. So the key, the key hires, I think, well, obviously, you know, to get a foothold in the market, you know, it was all about. Sales velocity and sales traction. So it definitely became a company where, you know, find it out of the UK. Very proud to find the company in the UK. Speaker 2 00:17:17 Co-founders based there, all of the product team based there. So product became, you know very much UK based and stuff. So the the hires we were focused on in the US were all really go to market hires. So, a couple of the key first hires were a couple of experienced, sell, people on the sales side and then a customer, customer success leader, Brendan Johnson, who came in, who had experience in the industry and was able to kind of, navigate and build that kind of customer success and retention function, from the ground up. So I would say, yeah, kind of all all really focused around, around go to market. And then also we, we ended up hiring, VP of marketing in the US as well. So yeah. How did how. Speaker 1 00:18:04 Did you find these folks. You know, it was when you find them when we’re still in the UK or is it after you’re here in the US? And would that make a difference and be able to find these critical hires that had some industry expertise? Yeah, I. Speaker 2 00:18:14 Mean, a big part of our growth story was being out and about events and conferences and stuff, and we really kind of made an impact and kind of, you know, were were, you know, were we’re very kind of visible at conferences. We’re very, you know, hosting a lot of kind of events and kind of, you know, kind of we we built a good reputation within the industry through that. So we, we attracted, a lot of talent kind of inbound because people saw what we were doing. So we got a lot of industry talent that was maybe, you know, kind of excited about how we were kind of coming into this new industry and disrupting it a little bit. So I would say like, yeah, I mean, it’s the most of those hires came through, kind of, kind of networking with people and recommendations and stuff. Speaker 1 00:18:59 Going to events, almost building a brand through your presence at these events. And, and that, that allowed you to build a team of people as experts. Speaker 1 00:19:08 And were you in the US at this time, and would you be able to do the same thing if you were in the UK? Speaker 2 00:19:13 so it started off, it was just coming here regularly. But yeah, I mean, most of those big hires were made once we moved here. And I think it’s just, you know, hiring is difficult when you’ve got a team down the road and you’ve got a thing. It’s even more difficult when you’re hiring people, you know, in a, in a different country. And and again, that was a big impact shock for us. I mean, the, you know, compensation expectations are vastly different here. That created some friction with like the team. And we’re spending this much on a project manager here versus here or, you know, this is how much. And you know, again, trying to as a UK company that was kind of modestly compensating its executives, trying to move to the US and hiring mid-level people that, you know, salary expectations were more than the, the, the executive team. Speaker 2 00:19:59 It was. Yeah, it was it was an interesting transition to, to kind of, to kind of deal with. So, yeah. So there’s definitely a kind of a lot of learnings around kind of how do you build that team and kind of, you know, how do you how do you think about, bringing, bringing the right people in? And we definitely had some mis hires, you know, for sure. In terms of like, people that didn’t work out, you know, for one reason or another, either, you know, we were we were very scrappy. I think companies take on the identity of their founders, particularly the CEO. So again, particularly in that 0 to 5 stage, you know, again, as you grow, you have to bring in, you know, different personality types, different levels of experience. But, a lot of the times, I think, I think early stage companies get attracted by logos on people’s resumes. Oh, like this guy was at Google. Speaker 2 00:20:51 It’s like, yeah, okay, great, he said. But they were used to having this, this, this, this and this around them. And that’s how they were successful. It’s not that they’re not good at what they do, but you take that away from them. They don’t know how to be a success as successful without the resources in the same ways. You know, smaller companies, right, aren’t quite clear on how to 0 to 5. Speaker 1 00:21:11 You have a different resource set for sure. And you have to be scrappy. And you’re right, you you definitely, you know, model that behavior. And I think built that culture in a great way. well, before we move on to another topic. Moving to the US. You moved first. You hired people within the industry. You made a presence at the trade shows. I think that helped. Speaker 3 00:21:36 To talk, talk, talk to me about. Speaker 1 00:21:39 some of the other challenges of coming, coming to the US. I know when we first started talking, the business had an operation in Australia. Speaker 1 00:21:49 You also were looking at expansion in EMEA. You were obviously growing in UK, and then you were now really pushing on in the US. Now, in retrospect, was that a sustainable strategy or did you kind of have to experiment to kind of focus? And I know we, we narrowed down to the US over time. But you know, looking back at that geographical expansion strategy, what are your lessons? Speaker 2 00:22:10 Yeah, I think the lesson was we tried to. being opportunistic works, you know, can work, but it also has downsides. So again, kind of, you know, like we had, someone from the industry that wanted to, you know, invest, you know, a decent amount and wanted to set up a presence for us in APAC. And we’re like, okay, well, it’s kind of little downside risk. You know, we’re getting a chunk of investment and, you know, you know, kind of adding to our expansion. But you know, the the the kind of lift or the additional kind of, kind of challenges that that brought weren’t kind of I guess a lemon wasn’t worth the squeeze in terms of that. Speaker 2 00:22:51 So I do think kind of we got a little bit distracted with trying to be too broad. I think it took a bit of time to kind of figure out, how to do that and how to do that, kind of do that effectively. but I also think kind of moving to the US also, you know, there are, you know, there was definitely unexpected impacts on the founding team and founding culture. You know, we’d gone from the three of us being like in a room together every single day, traveling together all the time to, you know, now one of us is, you know, 3000 miles away on a different, different time zone. And, you know, as we tried to transition the business and went through funding, obviously kind of brought in, brought in yourself, and I think one of the blind spots I had as a leader was essentially the impact that that created on the founding team, you know, because, you and I were very focused on, you know, the fundraise and some strategic thinking and, you know, and, you know, we kind of try to iterate quickly. Speaker 2 00:23:51 And it was it was it was more difficult to, I wasn’t intentional enough about bringing, my co-founders on that, on that journey with us. So they, you know, we, you know, definitely kind of ended up with a bit of like a, a them and us for a little period that we needed to kind of kind of work through and figure out kind of a better way to kind of communicate. So that was definitely a blind spot for me in terms of kind of, you know, it’s, you know, you know, the impact of different, different time zones and, and bringing other people in can, can have and just, you know, if you if you’re not talking regularly and I think being open and honest with each other, like that’s where kind of things start to, to bubble up that aren’t being said. And you know, there’s then assumptions, you know, on both sides that are kind of, kind of wrong. Speaker 1 00:24:43 Yeah. That’s definitely a hard thing when you, you separate the founding team and then the priorities shift, right? You know, with multiple markets, UK, EMEA and eventually I saw a shift to really focusing on the US, where most of the big customers were and most of the revenue was, but that that does have an impact on the team. Speaker 1 00:25:02 Let’s talk about scale. So so you know, there’s a number of journeys. There’s the 0 to 1. There’s the kind of the 1 to 3. And then there’s kind of, you know, the 3 to 10. you went through all three of those stages, but in that, that 3 to 10 and starting to scale a little bit after we raised the series A, let’s talk about some of the challenges you had in, in scaling the business and, you know, hiring teams for the next level. Speaker 2 00:25:27 Yeah, for sure. I mean, I think that’s definitely, Where I reflect on kind of most in terms of like, what am I good at? What, what what did I find more challenging? And, you know, 0 to 5, the scrappy stage, you know, getting anything off off the ground. I feel like, you know, you know, you know, in the top decile for doing that type of thing. when it starts to get a larger company and you’ve got to bring in, more senior roles and kind of figure out how do you kind of, build out that executive layer, to the team. Speaker 2 00:26:02 That’s where it was definitely, kind of more challenging and trying to figure out kind of who we needed and what did that look like, and what was the experience there? I mean, I think kind of, you know, key, a key thing for, a fitness perspective is obviously you’ve got to be able to be a great storyteller. you’ve got to be able to kind of inspire people to join the join the journey, inspire customers to take a chance on this new vendor. And you know, so, again, whether you’re raising money, getting new customers or recruiting key employees, all of that comes down to kind of storytelling. and being able to kind of, Gets people to do something a little bit crazy and kind of jump on this, this bus with you. We don’t really know where it’s going, but it’s probably going to be cool when we get there. So, you know, kind of get out. Yeah. Speaker 1 00:26:54 That requires a little bit of a magic. Right. That’s that’s the the founder storytelling, which is the, the key key ingredient. Speaker 1 00:27:01 Yeah for. Speaker 2 00:27:01 Sure. And I think that’s got to be matched with, you know, if you have a founder that’s like an amazing storyteller, but there’s no tech substance or product substance behind them. You know that’s not going to work. Likewise, if you have an amazing product tech founder, but they can’t tell stories or bring anyone in on the journey with them, that’s not going to work as well. So I think I think that’s the key thing that, you know, investors want to see when they’re looking at companies is like, what are the dynamics between the founders, you know, what are the you know what what is the kind of overlap skill set. Are there any gaps? kind of kind of between that. So, yeah, I mean, I think, in terms of scaling up, I think, yeah, as we started to kind of scale up, you know, I think a couple of things were kind of interesting. One was, we, we pushed into we had a core kind of audience for our product, which was insights of market research, but we’d had the partnership that brought us to the US was based on like a customer experience use case embedded into that there. Speaker 2 00:28:01 So we saw that as a really interesting idea and that kind of had more potential scale and kind of, opportunity. So we spun up our team that was focused on customer experience. We also because we’d seen one partnership, but also spun up a partnership team. And we’ll kind of figure out, okay, there’s a lot of other tools in this space that would benefit from having the video layer. How could we do that? So both of those were, I guess, interesting endeavors and like strategically made a lot of sense. And it’s always easy to kind of Monday morning quarterback this and be like, oh yeah, we should never have done that or done this and stuff. But I think from 0 to 10 you should be able to get you should be able to get to 10 million an hour with one core product category and one core product, and then expand. Speaker 1 00:28:50 And you’re seeing that because you think the focus is critical. Yeah, I. Speaker 2 00:28:54 Think the focus is critical. I think I think it it creates a lot of stress on the product team in terms of trying to do, you know, everything, you know, or try to be all things to all people. Speaker 2 00:29:06 And then a lot of the stuff with the partnerships was a lot of investment upfront for the promise of future revenue that may or may not come. So then you’re and that’s. Speaker 1 00:29:15 Hard when you’re capital constrained and resource constrained. Yeah. Speaker 2 00:29:19 100 100%. So you know, it feels like I mean we we I call them Bonnie partnerships. You know, I love you we love you kind of thing. Great press release but like where’s the where’s the dollars, where’s the revenue. And you know, we definitely had some that kind of, worked. But you know, I remember every year and you remember this. Well, we had a line in our forecast that was partnership revenue. And, you know, it was always, you know, you know, you know, five x what it ended up being because we were like, but there’s so much potential if we just do this and here’s this big pipeline. And the reality is if you haven’t, someone once described it as like, if you think about the McDonald’s franchise, like McDonald’s didn’t start franchising until they perfected the model and the go to market and figured it really has. Speaker 1 00:30:02 To perfect your own model before you can expand. Speaker 2 00:30:04 What you can’t do is start all these partnerships and be like trying to get them to kind of figure out the messaging, the go to market, when you’re still like. In iterating on that, you need to give them a playbook that is proven and, you know, works because otherwise you’re like, well, is it our current messaging and we’re not doing it right? Or is it how they’re delivering it and stuff? So a lot of lessons there. And I mean we went through four VP of partnerships, none of them bad, you know, bad hires. You know all experience partner people. But like, you know, we probably should have realized earlier that, hey, maybe it’s not the person. Maybe it’s the maybe it’s the stage or. Speaker 1 00:30:38 Yeah, or capabilities in general. Yeah. Well, Dave, despite all those challenges, you led the business through several stages all the way to 10 million. you had you have an incredibly, tenacious, leadership style. Speaker 1 00:30:53 You you talked about, you know, the challenges that kept coming up and, and the setbacks, and you had a particular way of describing them. I want to give you a chance to to talk about that briefly. And, you know, when you get hit like that, how do you come back and and keep your motivation high and keep being that, that motivational storyteller? Speaker 2 00:31:09 Yeah. For sure. I mean, yeah, I think, kind of coined the phrase like, yeah, when you’re, when you’re a startup founder, it’s basically about being kicked in the balls every day and just kind of keeping keep and going and stuff. And it’s just, you know, it’s I think from, from my perspective, it’s there’s always a lot of like, you know, ups and downs on any startup journey, you your best day and worst day are usually 24 hours apart in this side of things. And, yeah, you kind of have to, you know, not get too high on the highs, not get too low on the lows. Speaker 2 00:31:39 And, you know, it’s just it really is kind of, All right. That resiliency I think kind of you know, grit is a is a kind of undervalued kind of skill set. And the ability you’re going. Speaker 1 00:31:53 To get those highs and lows. And yeah, and it’s not easy. It’s it’s it’s really hard. Right. Speaker 2 00:31:58 Yeah. Kind of keep pushing on for and kind of keep figuring out, you know, that said the inverse of that, it did get to a stage where I decided, like, now is the time to step away. Like I’m not the right person to lead this from 10 to 25 and stuff. So I think it’s, you know, I think the key to good founders is, is knowing what you’re good at, knowing where you need help and bring it in the right people around you, and then also kind of being open to say, okay, this needs grit. I’m going to just push through this because I’m the best person to do this. Or actually, this needs more than grit. Speaker 2 00:32:30 This needs a different set of skills or different, kind of perspective on it and, and things like that. So that’s something kind of earlier in my career, I was I was less self-aware. And I think as I’ve kind of, you know, grown and, you know, had had the mentorship of yourself and others have become more, kind of introspective around, okay, what am I good at? What am I not good at? What are the what are what are the things that kind of gives me energy? What are the things that kind of drains energy and definitely is as the company started to scale, you know, as you get more people and more layers, you know, you kind of, you know, you you almost stopped doing work at some point as the CEO and you’re essentially just in meetings about meetings and, you know, there’s, you know, if someone’s talking to you, it means there’s a problem. So you’re just spending a lot of time firefighting stuff. And like, you know, I’m a builder and I like to be scrappy and iterate and like hands on and hands in. Speaker 2 00:33:22 And, you know, as a leader, kind of as you get a bigger team, you need to kind of get let them kind of be the people kind of doing the work. And, you know, that was a interesting transition for me. And, you know, I just kind of got to a point in my career where I was like, you know what? Like I am excellent at 0 to 5, 0 to 10. I’m going to focus here and can create incredible value for myself and investors in that, in that stage and, and get companies into a great space. And, you know, I’m sure at some point in my career, I’ll end up kind of hopefully finding the right opportunity where I can go, you know, all the way from 0 to 100 million. but I think kind of, you know, the stars will need to align for that to be the right thing. Or, you know, maybe I just need to, you know, you know, continue to work on those skills. Speaker 1 00:34:11 Well, that’s a great segue. Tell us about what you’re doing now. Speaker 2 00:34:15 Yeah. For sure. So, yeah, I’m launching a new business right now called Zeta. zeta.com. really exciting new, marketplace, business. So it’s a group buying platform. we’re focused on the outdoor industry right now. So bikes moving into kind of other outdoor enthusiast categories. And really the the value proposition on the buyer side is, you know, you’re going to spend, you know, 5 or $6000 on a bike. It’s difficult to negotiate a great price. You haven’t got five mates that all want to buy the same products. And we’re essentially, group aggregating buy side demand and matching it with sell side supply. So essentially finding 5 or 6 consumers that all want the same product in the same window. So think about an eBay auction where there’s one product, one person wins and they pay the highest price. The person who bids the most with the idea. The more people that join, the lower the price gets and everyone gets the product. Speaker 2 00:35:09 So we’re really excited. Speaker 1 00:35:11 As a as a as an outdoor enthusiast, I want to get a new bike, but I want to get a deal. And so this is kind of like Groupon for that category. Is that. Speaker 2 00:35:18 Yeah, absolutely. Kind of Groupon meets Overstock, for starting with bikes and then expanding into other, other categories. we’re starting as a marketplace, but our vision is really to not just be a destination marketplace, but also be, a technology layer that sits across kind of other sites. You can apply. Speaker 1 00:35:38 It to a lot of categories group. Speaker 2 00:35:39 By, power and group by across the e-commerce thing. So we’re thinking about kind of, you know, different ways to do that through browser extensions, Shopify apps, things like that. So I’ve got a co-founder based in Amsterdam. So doing the, long distance co-founder thing yet again. Speaker 1 00:35:55 You have experience doing that for sure. Yeah. Speaker 2 00:35:58 but, yeah. So that’s been, that’s been a great, thing. And, you know, obviously we, we share an office a lot of the time. Speaker 2 00:36:05 So you see, and kind of, I guess, it’s fun to be back in, that zone of excellence, zone of genius, and kind of scrapping around. Speaker 1 00:36:13 Well, I think you’re you’re you’re in your sweet spot. You’re a tenacious entrepreneur, and I can’t wait to see what you do with Zeta. Where can people find more information about Zeta and where can people find you? Yeah. Speaker 2 00:36:23 So, you can connect with me on LinkedIn. I always love to talk to founders, share their story, and and help wherever I can. So just Dave Carruthers, on, LinkedIn or at Dave Carruthers on, Twitter and insiders [email protected]. And so, yeah, check it out. sign up and, yeah, we’d love to help you get a great deal on, on your next. Bike right now. Speaker 1 00:36:45 Awesome. I look forward to to shopping with you. Hey Dave, thanks so much for your time today. This has been fantastic and best of luck with all the all the future endeavors with Zeta and your other other activities. Speaker 2 00:36:56 Thanks Julian. Really enjoyed the chat. Speaker 1 00:36:58 All right.

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. Julian Castelli 00:00:27 today I am very excited to welcome Deepak Simone. Deepak is the co-founder and managing partner of Wave Crest Partners. He focuses on helping founder led capital efficient B2B software companies to grow and scale. Deepak has been in the investing business for a long time. He was a partner at Bain Capital Ventures, in their growth equity group and also in venture capital at Comcast Ventures. Welcome, Deepak. Deepak Sindwani 00:00:55 Hey, Joy. Thanks for having me. Great to be here. Excited to, you know, Chad and and and hopefully, hopefully I have something smart to say. Julian Castelli 00:01:06 Well, you always do. We’ve had a lot of these conversations over the years. And when I started this podcast, I had you in mind as someone to, to to talk to and hear your story. Julian Castelli 00:01:16 You and I got to know each other when you were at Bain and up in Boston. And, I recall you being a very, very smart investor, very vertically driven. We were in a travel tech business at the time, and you had done a lot of work in that space. And, and, you know, we were talking about potential deals. But, you know, I also considered you an industry expert that I enjoyed speaking with. And, I also I was was excited when you called me one day and said you were starting your own firm, and that became Wave Crest Partners. So tell me a little bit about that founding journey and your path to starting your own growth equity firm. Deepak Sindwani 00:01:51 Sure. So as you mentioned, and I’ll just add a little bit to it. You know, I started out of undergrad briefly as an investment banker, was quickly reformed from that, started my own software company. So I always had a little bit of an entrepreneurial itch, but did it at exactly the wrong time during what I call bubble window now, and kind of the 99 2000 era. Deepak Sindwani 00:02:13 got more into the operating side, came back after that didn’t work, in product management and marketing and business development for a few years, both growth companies and one larger company, and so saw some ups and downs and then was lucky enough to get into the venture business in 2003 at Comcast, as you mentioned, joined Bain Capital in 2009. And then, you know, as you mentioned, you know, what I learned in my journey, which I’m excited to cover today, is I thought that Silicon Valley venture was the only way to invest in tech. And I went out and lived for two years in Silicon Valley. I joined a firm that did a lot of investing in Silicon Valley and then what I came to realize was there was a different form of investing called growth equity. And, you know, it’s a different level of risk. But it’s also, I think, a different approach to working with founders. And so I learned that through investing in a founder led business across from the Coors Brewing Company in Golden, Colorado, in 2006 while I was at at Comcast. Deepak Sindwani 00:03:21 And that changed my life. And, and that caused me to pivot to Bain. And so I did a lot of growth equity at Bain with non Silicon Valley companies and exclusively focused on non Silicon Valley companies, because we had an office there that focused there. And you know what I discovered was kind of a gap in the market. you know at the lower end of the market businesses that are what I call more in the expansion stage, you know, 5 to 10 million, 5 to 15 million of are, as I like to say, they’ve got something that’s working product market fit. Maybe they have one product instead of multiple products. And what they want to do is scale that. And, and so they need more help than I think just someone who deploys capital and shows up to board meetings, they want somebody who can they can be real sounding board on issues in particularly the go to market arena, sales, marketing success, analytics. And so that’s that was the impetus for starting Wave Crest out of Bain. Deepak Sindwani 00:04:24 Obviously, Bain is a great firm. I learned a ton, worked with really smart people. and obviously we met there, but I felt like if you know, one, I had the itch to do something entrepreneurial again and to felt like there was a gap in the market for, you know, companies that wanted less than, you know, 20 million of capital and, but wanted a, a partner to help them grow. So that’s why we name the firm Wave Crest Growth Partners and started hung a shingle as in many, many of your. Julian Castelli 00:04:55 Yeah. That’s your entrepreneurial journey. So you you, you probably, have your own story of the struggle. Right. And it was it was easy just people gave you money and said, invest it for us. Deepak Sindwani 00:05:04 What’s interesting is, you know, we we are entrepreneurs ourselves and so have a lot of respect for founders who go through the struggle. And we went through struggle in the first three years of our business, including one founder departing, departing, which I know has happened in some of your founder situations. Deepak Sindwani 00:05:23 And it happened to us. we also, you know what what’s interesting about starting an investment business versus technology companies. And certainly I’m not saying it’s at all any harder or easier. It’s just different is in an investment business, if you don’t have capital, you’ve got nothing to do. Right. And so a big part of the game is, you know, pitching like an entrepreneur goes and pitches investors or pitches friends or pitches customers. And in our case, we have to pitch. You know, either wealthy individuals or institutions like universities or foundations or pensions and, you know, but in the case of, of of investment funds, you know, you need to get ten or more of those investors to align in order to, you know, get past your existence risk. Julian Castelli 00:06:13 And so that was your existential starting point, your cold start problem. Right. Exactly. What was your what was your first round and how long did it take you to raise it? Your first fundraising? Deepak Sindwani 00:06:23 It took us so what’s what’s it what’s really interesting is and this was a learning for us as well that you go through in the journey is we we started and said, okay, we should go raise some capital. Deepak Sindwani 00:06:35 But then very quickly, from my past at Bain, I had been building a relationship with an entrepreneur in the commercial real estate technology space and his company. He wanted to, bring in some growth capital and bring in some help to continue to grow his business. He was around, you know, 8 or 9 million of RR. And so so, you know, we started early January 2016. By March, you know, we were already really talking to him, this gentleman named David Osborne, who’s a phenomenal individual about how to help him before we had capital. Julian Castelli 00:07:13 And that could be helpful. Right. Because you’ve got a deal on the sideline or even do an SPV for that deal or something. Deepak Sindwani 00:07:20 Yeah. So that’s exactly right. It was it was, you know, it was like the first customer that some of your founders. Julian Castelli 00:07:24 Have found in customer. Right. Deepak Sindwani 00:07:26 You learn it was our first, first investment. So we ended up really liking this business and and going hard after it and convincing the founder that we brought a different approach than other investors that he had met in the market. Deepak Sindwani 00:07:41 And we gave him a term sheet. And so part of our our story, if it was, you know, all founders have to be audacious. We were being audacious through. Julian Castelli 00:07:51 Did you have the capital behind that term sheet. Deepak Sindwani 00:07:53 We that’s the secret right? We did, we did. And so very stressful time as I’m sure all founders go through. And you promise something to a customer and then you got to go build it. That’s right. It was very similar. And so in June of 16 we signed a term sheet with him. And then we went and we of course had, a sense of what we would do. Like most founders, we weren’t the only. Julian Castelli 00:08:18 Of course, but we but you didn’t have it signed yet. You had to. Deepak Sindwani 00:08:22 Go do it. Julian Castelli 00:08:22 So, you know, it’s like the like like the, the not as a vaporware, but when you show a presentation or a figma or something of what you’re going to build on a in a piece of software. Right, exactly, exactly. Deepak Sindwani 00:08:33 So it’s the wireframe becoming the frame. Julian Castelli 00:08:35 That’s it. Deepak Sindwani 00:08:36 And so we went out and raised capital and invested in David’s company. And, you know, it was like the, the, the, the Genesis story. And so from our perspective. Julian Castelli 00:08:49 You did you close that deal before you raised your funds. So yeah. So we purpose vehicle. Deepak Sindwani 00:08:53 Yeah. We raised, as you said, a special vehicle. We raised a little over 26 million. We had some friends co-invest with us in that, from other funds that we knew just from being in the business. And, in September of 2016, we closed. And, you know, to your point, and this founders will understand this when you get that 0 to 1 and you get that first customer and it proves that there’s a value prop and a use case, then the next customer and the next customer are easier, right? I mean, they’re all hard, but it’s. Julian Castelli 00:09:26 The cold start problem. You have to start with something. Deepak Sindwani 00:09:29 Exactly. Deepak Sindwani 00:09:29 And so the ability for us to kind of get moving and have motion created more interest in us. I mean, obviously my partner and I had background in investing for 12, 15 years each, but to the institutional investment community where nobody’s yeah, they don’t care that you previously had Bain on your resume. And so, when we had building engines completed, they said, wow, you guys, you know, one, I like the company. And two, it shows that you guys can win and that you know what you’re doing. Right? So it gave validating as it does in your founders when they launch, you know, they land a big customer. Julian Castelli 00:10:07 That that really is very similar to a founding story of a tech company. So you can relate with your, your partners and portfolio company founders and CEOs. So, so from that starting point, in 2016 is now 2024, it was you. And by both at the time with, with with no fund and no companies, you got this first company, you know, you know during the process. Julian Castelli 00:10:30 And now tell us where you are today. From a size standpoint. Deepak Sindwani 00:10:34 I have a lot more gray hair, but, and a lot less hair, but, you know, the. Yeah. So we’ve gone from the two of us to 15 people now, we raised fund one at 145 million, invested another 100 million alongside of it. It took us two and a half years to raise the capital. So. To to point you raised. I mean, these things are never linear. They’re never up into the right. There’s always the stop and start and the side you go sideways for a few months. Julian Castelli 00:11:05 And that is something I’m sure every one of your portfolio companies can relate to. Yeah. Deepak Sindwani 00:11:09 And look I think that and I’ll talk about it. We gain I mean we had we had both been operators for short periods of time, three or 4 or 5 years prior to, you know, being investors. And in my partner’s case, after being an investor. And so EQ and humility are things that we developed through that. Deepak Sindwani 00:11:29 And then we went through it ourselves. Right. And staring into the abyss and wondering, you know, if we have a business. And so we try to bring that humility to the table with our with the entrepreneurs we are fortunate enough to partner with. But, you know, now we’re, you know, 15 people. We we we have about 600 million under management. We’re halfway through investing one, two. And so, you know, obviously a big difference in how many you wake up when you feel grateful. And, you know, obviously I try to do that. Julian Castelli 00:12:02 How many companies have you invested in now? Deepak Sindwani 00:12:04 We’ve invested in 14 companies. We’ve also one thing I’ll talk about on this podcast, we we’ve acquired, you know, 22, 23 companies into those 14 companies as well, which can be an alternate strategy, additional strategy for growth for founders. Julian Castelli 00:12:21 And so that’s that’s after you’ve made the initial investment, you’ve helped those founders grow through M&A. Exactly. So let’s definitely talk about that too. Deepak Sindwani 00:12:31 There market opportunity really. Julian Castelli 00:12:32 Yeah. That’s awesome. And your growth equity. So you’re you’re in between venture capital and private equity in a category called growth equity. Why don’t you help us define that. Deepak Sindwani 00:12:45 Yeah. So look many of your founders will build software companies and never raise capital. And that’s a great approach. Many of your founders will. Build companies and raise venture capital where the the approach. And having been a venture capitalist myself, you know, 10 or 15 years ago is very is different because it’s a riskier proposition to the venture capitalist. If you sit in their shoes because they’re backing these founders with zero revenue or a million of. Julian Castelli 00:13:17 Revenue, very early stage, part of the risk curve, right. Deepak Sindwani 00:13:21 And so in order to make the business work for them, they need to invest in lots of company. If they invest in three companies and they’re all early stage and they all don’t unfortunately work, then they they won’t have a business. And so from their perspective, they typically invest in 25 plus companies in a fund. Deepak Sindwani 00:13:42 as a result, they usually can’t spend a lot of time with those companies because they have eight, ten, 15 companies each that they are responsible for. But what they’re really trying to help figure out is which of these companies can be my Google can be my. Julian Castelli 00:13:57 Work, breakouts. Deepak Sindwani 00:13:59 Can be my Domo. And, you know, so that’s the model of venture capital. And I did that for, you know, 6 or 7 years. And then, you know, this company in Golden, Colorado invested in that was a little bit later stage business. So what the founder ended up doing was bootstrapping, raising a little bit of friends and family money along the way, but effectively building a company the old fashioned way through blood, sweat and tears and taking profits and investing it in more people and more technology. And so what growth equity says is or the principle of growth equity is your business is already existing and it’s growing, but maybe it’s undercapitalized and that, you know, you could land, grab the customers faster. Deepak Sindwani 00:14:43 You could you could invest in more products. You want to go faster. You want to improve your management team. You want to accelerate. And so our capital is less risky because there’s already a business. But it’s still focused on growth. Yes. And so that’s why it’s called growth. Equity is a little bit later stage. It doesn’t suit every founder because some founders, you know, in a large horizontal market should raise venture capital or some founders. It’s your point may be like the founder of MailChimp, you know, may want to bootstrap his way all the way to a multibillion dollar exit. Right. And so but for the founder who says, I’ve put five, seven, ten years into this, I’ve gotten it to 5 or 10 of IRR. It’s working. I would love to have someone who can help me, hopefully see around corners. But in addition, I’d love some personal diversification. Take some chips off the table, and I’d also like to double down on my growth. It’s a good solution. Deepak Sindwani 00:15:43 And you know, so it’s really a partnership model working with the founders. Julian Castelli 00:15:47 And what size of a company do they get into your range and your target. Target sweet spot. Speaker 4 00:15:55 Yeah. Deepak Sindwani 00:15:55 5 to 20 of our is where we typically invest usually more in the 5 to 12 range. So as I mentioned early growth expansion product market fits there. You have. Julian Castelli 00:16:06 Yeah they’ve they’ve got you know call it $8 million that they’ve gotten. Enough customers and enough traction to be able to to really understand the value proposition of their business. They’ve got some brand reputation in the space, and now it’s about going from that eight to 10 to 30 and that next stage. That’s exactly. Deepak Sindwani 00:16:26 Right. Yeah. We view kind of 0 to 5 as the hardest part of a founder’s journey. And you know every every part’s hard. But you know going 0 to 5 figuring out a value prop that you can sell to multiple the same value prop you can sell to multiple customers in a repeatable motion is really, really, really hard. Deepak Sindwani 00:16:47 And, you know, the founders should get paid for taking that risk, right. And in, you know, and so after you’ve gotten to that stage, then the, the the problems become different problems of growth, you know, how do I hire a sale? How do I take go from three sales reps to 15 reps? How do I have a Legion machine and a content marketing machine that works? How do I have customer success that is scalable in some cases international? How do I, you know, my pricing model? Every software, you know, sorry, not every time. Nine out of 10 or 99 out of 100 software companies that are 5 to 10 million of revenue, the pricing model they’re using probably isn’t the one that will get them to 50 million. So there’s these. Julian Castelli 00:17:32 Strategic. It is not. They’ve got to do something different. What got you here won’t get you there. Deepak Sindwani 00:17:36 Exactly. So there’s these strategic decisions on the go to market side that are really important as you go from 5 or 10 to 25 or 50. Deepak Sindwani 00:17:44 And so that’s what we specialize in. That’s what we love doing day in and day out. That’s where we have specialists on our team who all they do is work with the portfolio companies on those key decisions. Yeah. Julian Castelli 00:17:55 Talked about talked about your value added. You obviously are providing capital. You mentioned that you can provide the M&A playbook and capabilities. But but how do you what do you bring to to really help the business on that journey from operating operations or advisory standpoint? Deepak Sindwani 00:18:11 Yeah. Look, I mean, I don’t won’t go as far as to say, you know, capital is commodity, but it’s table stakes. And the real value is, as I like to tell entrepreneurs, the scars on my back shouldn’t be the scars on yours. And so it’s really the having built 30 companies from 5 to 50 or 5 to 25 or 5 to 100, there’s just a lot of learnings. Right. And and same thing that you have, Julian, from being a multi-time CEO. And so, you know, our hope is to package up those learnings into, you know, digestible, points of value where we can help the next generation of entrepreneurs. Deepak Sindwani 00:18:55 And so we’ve done that with something called the Wave Crest operating platform, which is five different pillars of value, which include best practices for sales, marketing, customer success, pricing, analytics, people who can help on the journey, you know, cohorts like you’ve done with growth elevated, but of CEOs that are on the journey from 5 to 50. and, you know, functional experts at Talent Network to help them grow the business with execs. And so the goal of Wave Crest is not to take the keys or take the steering wheel. The founders and the CEOs drive the business. It’s to really surround the company with value so that they have access to whatever knowledge and resources. In addition, we have two people full time who who are, you know, go to market SAS experts that work with the portfolio companies day in and day out on whatever they need. If that product pricing, if that’s customer success, it’s really at the strategic level, helping them think through the org design, helping them think through Tam expansion. Deepak Sindwani 00:20:01 I mean, we have multiple different projects we do across different companies. Julian Castelli 00:20:06 That’s awesome. you know, that that that is really value added to have that capability and that expertise. Is there a story or an example of a company that you want to you can maybe share with us, you know, show us how that works? Deepak Sindwani 00:20:20 Yeah, I’ll talk about this company. I have the logo on today. It’s named impel, used to be called Spin Car. And that also speaks to one of the things that happened to these companies. They go from 5 to 50 things changed your market changes. And so Spin Car was is founded by two very talented young gentleman in Syracuse, New York of all places. So we invest in it’s far. Julian Castelli 00:20:43 From Silicon Valley. Yeah, we. Deepak Sindwani 00:20:44 Invest in places that oftentimes people didn’t even know tech companies existed there. Yeah. Which is the beauty of the world we live in today, where you can, with AWS and Azure, do a lot and from a lot of different places. Deepak Sindwani 00:20:57 But, you know, they had built, you know, actually gone through their own, you know, pivots and tribulations before we we invested in 2018 and they were a, augmented reality. Digital merchandising solution, for the automotive vertical. So helping consumer helping. Auto dealerships and auto OEMs to, improve their customer experience online through the ability to, for example, go look at a car without going to the dealership, okay. Seeing the vehicle inside and out, which is something that all of us have done. You know, you go and you inspect where the scratches, particularly if you’re buying used. And one of the things, you know, obviously you can’t fully replicate sitting in the seat and seeing how it feels, but you can do a lot and save a lot of time. Right. And so, you know, trying to really bring a e-commerce experience to an industry that really didn’t have e-commerce five years ago. and so that’s what they were. And around that, they had built a data product as well, because they collected a lot of data around consumer interests and features and safety and the other things that consumers cared about. Deepak Sindwani 00:22:12 So they were 8 or 9 million of RR growing really fast. They had seed investors who, you know, really, you know, they had a couple of strategic offers on the table to buy the company. But the two founders, who were 30 years old, said, you know what? Like, this is so much fun and I see so much runway ahead of us that I’d rather continue to grow the business. But they had investors who were happy with some of the offers on the table. Yeah, okay. And provided an alternate solution that said, you know, we’ll we’ll buy out your investors. We’ll, we’ll give you, you know, 5 million of fresh capital on the balance sheet. And we’ll give each of you guys a little bit of, of a little bit of liquidity for, you know, the hard work you’ve done over the last 5 or 6 years. And so it was a packaged solution and it has worked great. I mean, the company grew rapidly after that. But then, you know, we hit Covid and you know, all the brick and mortar stores like dealerships were shut down. Deepak Sindwani 00:23:15 Right? And, you know, we had, as I’m sure, lots of founders who started their companies pre-COVID, you know, crisis moments of, you know, churn went up and, you know, no one knew digital marketing of vehicles when no one’s buying vehicles. And so and, you know, merchandising still matters. And actually, what happened was Covid ended up initially being a massive headwind, but then actually being a real tailwind because consumers said, I don’t want to use public transport anymore. I want a car. I can be alone. Julian Castelli 00:23:47 Prices really shot through the roof all of a sudden. Deepak Sindwani 00:23:49 Exactly. And then and then with the supply chain issues that happened after that in 21 and 22, the, you know, inventory became an issue and pricing actually went up. So but the point is, we went through, some tough times with churn. We had to, you know, make some cost cut cuts, including, unfortunately, some heads and we had the belt tighten. And, you know, the business, you know, was growing over 50% a year pre 2020 that year I think grew you know between 10 and 20%. Deepak Sindwani 00:24:23 So you know we had a this moment of you know did we miss the window. What happened. You know is the market going to recover. Luckily it did you know but but that’s part of the benefit of, you know, these are two, you know, very smart young guys. And hopefully we were a good partner to them through that and helping them with the advice and the budgeting and lots of other things that we were doing around customer, you know, saving customers and customer retention. And, and now then the next thing that that happened was in 21, we had the opportunity to acquire, a conversational AI business. And, what we realized was as part of the digital merchandising process that the these are considered purchases, you spend 20, 40,000 whatever on a vehicle. You don’t just buy it like you would something on Amazon, you know, in five seconds. And so the ability to do conversational AI makes a ton of sense. The ability to have 7 or 10 touchpoints with a shopper in multiple channels. Deepak Sindwani 00:25:34 Right. And so, you know, we did a small acquisition of a product tech company that actually was based in Eastern Europe, and had some initial US traction, enfolded it into our product and actually use that to broaden the vision and the Tam of our company and our and added another product to sell to the same customers, which was extremely lucrative from a lifetime value perspective. So we ended up changing the name of the company over the next couple of years from Spin Car, which, which? You know, it’s more of a merchandising and kind of viewership, value prop to impel, which actually in the Webster’s Dictionary means to drive forward. And so, you know, the whole vision of the company changed the trajectory changed, the Tam changed. And so, you know, now the company fast forward, that was. Julian Castelli 00:26:30 That acquisition, a key part of that that yes uptick. Deepak Sindwani 00:26:34 Took us in, made the product a lot more mission critical. You know, it’s hard when as as your founders know, when you use AI and you see the good things that can unlock to kind of do away with it, and the customers actually like it too. Deepak Sindwani 00:26:51 And if it can, you know, automate tasks and in, you know, in this case, chasing the customers and making sure that they want to buy your Jeep Cherokee or your Land Rover. yeah. There’s it’s a great use case. And so it made the product. Julian Castelli 00:27:06 Is very manual. Deepak Sindwani 00:27:07 And yeah, having. Julian Castelli 00:27:11 A used car recently and I’d say, you know, I probably responded to eight and only three could continue the dialogue enough to keep me engaged. Five. Fell through the cracks. Yeah. Speaker 4 00:27:21 It’s almost your. Deepak Sindwani 00:27:23 Point is and this goes for probably every industry. If you’re not using AI for repetitive tasks and you’re not using the benefits of automation, you’re going to lose to your competitors who are. And so to your point, you know, human beings are, you know, and with all the media we consume and all of the things on our phone every day, we have short term memory. Yeah. Julian Castelli 00:27:48 So it’s the attention span. That’s where that’s where competing for. Right. Deepak Sindwani 00:27:52 Three days ago we forgot what we saw. Deepak Sindwani 00:27:54 Yeah. And so you know it’s important to stay in front of anyways you know the business is now closing in on 100 million of RR. Julian Castelli 00:28:02 Oh my gosh. Wow. Deepak Sindwani 00:28:03 And so you know and all all, all kind of credit goes to the founders and the management team and it’s been a wonderful journey. We ended up along the way. Another solution where we can help founders, you know, for years in the founders and we looked at each other and said, we love working with each other, but we’ve helped the company and they’ve helped, you know, obviously they grew the company from seven or 8 or 9 when we invested to 50 and they said, you know, we should probably diversify risk a little bit at this stage. Julian Castelli 00:28:34 Their personal risk and their investments. So you help them take some more money off the table. Deepak Sindwani 00:28:38 So we brought in a great investor that we knew well did for a minority of the company. They took some more chips off the table. And you know we said but let’s keep growing. Deepak Sindwani 00:28:50 And you know, that was at 50 and now we’re closing in on 100. We have another acquisition we’re working on. And so anyways, there’s my point is journey can oftentimes include lots of different twists and turns, but some very accretive ones. Julian Castelli 00:29:05 Oh that’s a great story. The founders managed to get a partner that could help them grow ten or more, but they also managed to take some some chips off the table and diversify their risk. And it sounds like you guys built a great partnership. Deepak Sindwani 00:29:19 Yeah. That’s what honestly, it’s really about partnership. I mean, you know, the most fun and rewarding part of what I do as the quote unquote coach is, work with founders and, you know, their success. It makes me so happy, you know, and it’s it’s, you know, everyone. Everyone gets excited about different things. When I see founders kind of realizing their dreams or taking however many trips off the table or, you know, the company growing in size. We started the company was, I don’t know, 60 people now or over 300. Deepak Sindwani 00:29:55 I mean, those are just great, you know, milestones. Julian Castelli 00:29:58 Yeah, that’s that’s got to be really rewarding. Well, that’s a great story. And that, that sounds like the growth equity journey and did it did a great job of explaining how Wave Crest could partner with companies to do that. So that’s fantastic. Thank you for sharing that. before we wrap up, you know, for for our listeners who are out there and they want to get on a journey like that, any good books that you’ve read recently or a podcast that you’d recommend? Deepak Sindwani 00:30:23 So while it is Silicon Valley, because I, you know, I do feel like it’s like the political discourse, you always need to learn about what how different people view similar markets of the world. Right. And so if you’re on the left, you should listen to the right. If you’re if you know you’re on in growth equity, you should listen to venture. So one of my favorite podcasts I listened to every week is the All In podcast. Deepak Sindwani 00:30:46 that’s. Julian Castelli 00:30:46 A good one. Deepak Sindwani 00:30:47 For Silicon Valley guys talking about business. And, you know, it’s folks sitting in San Francisco who have a certain point of view, but they’re extremely smart and articulate. And so I always learn whether I agree or disagree, I learn. Yeah. So I think that’s a good one. on the the light lighter side, one that I really enjoy is is called, smart lists, which is a, which is a comedian, a comedic one. It’s basically three guys. You probably know Jason Bateman, Will Arnett, and and, I forget the third guy’s name, who are personal friends, and they interview athletes and celebrities and political figures. And it’s funny, you know, you get to see the personal side of, you know, people like Amy Schumer and, and other people they bring on. And then on the book side, you know, I, I, I’m someone who’s always kind of, you know, you reevaluating my own priorities in life and how I spend time and do I spend, you know, and so, you know, a few one that I love is, you know, I’m reading Charlie Munger’s Almanac right now. Deepak Sindwani 00:31:56 I mean, as you know. Julian Castelli 00:31:58 One of the titans of. Deepak Sindwani 00:31:59 The titans of the investing world, but it’s less about the almanac is less about investing and more about just philosophy on life and how you think about, you know, making decisions and being decisive and doing doing your research and, you know, clearing, clearing out the clutter. I love, you know, I love people who are candid and plainspoken. And, you know, he’s a kind of personal hero of someone who just told you like it was right and, and obviously lived a great life to 99 and did a lot of things. So, you know, and another one on my personal journey I’d recommend is one called Die with Zero, which is a really interesting book, kind of flips on its head what all of our friends at Merrill Lynch would tell us around how to save and invest your money. And it’s really around, enriching your life with experiences as early in your life as you can. Julian Castelli 00:33:01 Oh, I love that. Deepak Sindwani 00:33:02 Those like capital compound those experiences, compound your life. Deepak Sindwani 00:33:07 And so it’s a great book that was written by a very successful guy who’s and it was an energy trader. And, but its whole philosophy is, you know. Julian Castelli 00:33:16 Don’t don’t save up and wait and then like. Speaker 4 00:33:19 Don’t wait till you’re. Deepak Sindwani 00:33:19 65 to do the things you want. Do it now. Julian Castelli 00:33:22 I love that. Well, that’s a great, great message to end on. Deepak, where can people find you in Wave Crest? Deepak Sindwani 00:33:29 Yeah. Look, if anyone love to have conversations with your listeners, wave crest growth. Com is the website. Deepak at Crest growth comm is the email. certainly they can come through you as well. And obviously looking forward to doing a lot with you with these companies as well. Julian Castelli 00:33:49 Absolutely. And come, come join us at the Growth Elevated Summit next year. Look forward to that. This is great. Speaker 4 00:33:55 I could stay away. Deepak Sindwani 00:33:55 From Park City. I mean, it’s such a you live in such a great place. Julian Castelli 00:34:00 Well that is a that is a definite advantage and we’d love to host you. Julian Castelli 00:34:03 So look forward to seeing you there. Thanks for joining us this morning. And this was a great talk. Deepak Sindwani 00:34:08 Thank you for having me. Speaker 1 00:34:11 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.