Eli Portnoy, CEO of BackEngine.ai, on the Simple Tools Powering Big Ideas

Introduction to the Podcast (00:00:02)
Julian Castelli welcomes listeners and introduces the podcast’s purpose and community.

Guest Introduction: Eli Portnoy (00:01:22)
Julian introduces Eli Portnoy, a serial entrepreneur and CEO of Back Engine.

Eli’s Early Entrepreneurial Journey (00:02:04)
Eli shares his early experiences and motivations for becoming an entrepreneur.

First Startup Experience (00:03:11)
Eli discusses his first startup focused on connecting low-wage labor to job opportunities.

Inspiration and Confidence (00:04:33)
Eli reflects on his background in Mexico and the entrepreneurs who inspired him.

Overview of Sense360 (00:05:10)
Eli introduces Sense360, its founding in 2014, and its initial concept.

Evolution of Sense360’s Business Model (00:05:39)
Eli explains how Sense360 pivoted from its original idea to focus on valuable data collection.

Use Case for Restaurants (00:07:50)
Eli describes how Sense360 helps restaurants understand customer behavior and marketing effectiveness.

Combining Data Sources (00:09:15)
Eli discusses integrating foot traffic, credit card, and survey data for deeper insights.

Challenges with Traditional Market Research (00:11:28)
Eli contrasts Sense360’s real-time insights with traditional methods of market research.

Customer Adoption of Dashboard (00:12:08)
Eli explains the challenges of getting customers to utilize the new dashboard effectively.

Support from Analyst Team (00:13:01)
Eli shares how they built an internal team to help clients understand and use the data.

Growth and Exit of Sense360 (00:14:15)
Eli outlines the growth trajectory of Sense360 and its acquisition in 2020.

Transition to Scalable Sales (00:15:55)
Eli discusses the challenges of moving from founder-led sales to a scalable sales model.

Founder’s Superpowers in Sales (00:16:32)
Eli reflects on the advantages founders have in selling their products compared to sales teams.

Sales Team Development (00:17:02)
Eli describes the process of training his sales team to adapt to a new selling approach.

Here are the extracted timestamps and their titles from the podcast episode transcription segment:

Discovery in Sales (00:18:04)
Eli discusses the importance of understanding customer pain points before presenting solutions.

Achieving Product-Market Fit (00:19:55)
Eli shares how a visual representation of customer logos confirmed their product-market fit in 2019.

Lessons from Acquisition (00:21:05)
Eli reflects on the challenges faced before the acquisition and shares valuable lessons for founders.

Impact of COVID-19 (00:21:41)
Eli describes the severe impact of COVID-19 on their business and the tough choices they faced.

Treating Partners as Partners (00:23:30)
Eli emphasizes the importance of viewing customer relationships as long-term partnerships during crises.

Listening to Customers (00:25:07)
Eli highlights the significance of truly understanding customer feedback to adapt business strategies.

Adapting to Change (00:27:04)
Eli explains how their company pivoted to provide valuable insights during the COVID-19 pandemic.

Navigating Remote Work (00:28:22)
Eli discusses the challenges and considerations of managing a remote workforce post-COVID.

Team Collaboration (00:30:26)
Eli reflects on the importance of in-person interactions for team bonding and collaboration.

Annual Team Gatherings (00:31:52)
Eli shares their practice of annual team meet-ups to strengthen relationships among remote employees.

Podcast Episode Timestamps
AI’s Impact on Business (00:33:49) Discussion on AI’s evolving role in revenue generation and its implications for hiring practices.

Efficiency through AI (00:35:27) Exploration of how AI tools can enhance productivity and team efficiency in business operations.

Intentional Business Practices (00:37:11) Emphasis on the importance of thoughtful decision-making and reimagining business processes with AI.

Identifying Tailwinds and Headwinds (00:38:22) Eli shares insights on spotting industry trends that favor startups amidst challenges.

Recommended Resources (00:40:18) Eli recommends influential books and podcasts that shaped his entrepreneurial journey.

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 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, CHG, Healthcare Pathology Watch and Moment, canopy, the San Francisco 49 ers, and many more. This episode is brought to you by Growth Elevated. We are 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 Ski and Tech summit in beautiful Park City, Utah. So if you’re a skier and you’re a tech tech leader and you enjoy networking with other leaders and learning, check us out@growth.com.

Speaker 2 00:01:22 Today, I am super excited to welcome Eli Portnoy Portnoy to the podcast. Eli is a serial entrepreneur, and he’s a CEO and co-founder of Back Engine, which helps B2B businesses unlock high velocity customer feedback and create a high velocity feedback loop. He is a serial founder. Before founding Back Engine, Eli was a CEO and co-founder of two other successful startups, both of which had exits. Thinking there was acquired by Telenet for 22 million, and since 360 was acquired by Medallia for $44 million. Eli, welcome to the do the program.

Speaker 3 00:02:01 Thank you. Julian. It’s really great to be here.

Speaker 2 00:02:04 It’s it’s great to talk to you. You’ve you’ve done this three times. So you have perspectives, in three different eras. What was what was when did you start becoming an entrepreneur? What brought you into the entrepreneur lane versus just taking normal job?

Speaker 3 00:02:19 I don’t know, actually. It’s a question I asked myself quite a bit because it’s, it’s a crazy thing we do. Starting companies is a really a crazy thing.

Speaker 3 00:02:28 And I don’t know when the you’re a glutton for punishment.

Speaker 2 00:02:31 You’ve done it three times.

Speaker 3 00:02:32 I am. And, I think I think it’s just something I’ve been gravitationally pulled to since I was very, very young. I remember in high school starting a, like a store in school and basically getting it set up for. And it’s still there now. So 20 or 30 something years later, it’s still going. And, and college, I started a company during one of the summers, and then once I started working in the professional world, Very, very quickly. After my first job, I realized that I wanted to start something and left to start my first business. So yeah, it’s been I don’t know when it started, but it seems like it’s always been there for me.

Speaker 2 00:03:11 What was your first real startup company?

Speaker 3 00:03:15 So my first real startup was actually right after college, and the basic idea around it was, this is 2005. So way back before, before some of the tools we have available today.

Speaker 3 00:03:28 But what I saw was there were a bunch of different, really interesting, really interesting recruiting sites out there, like Cat Jobs and Monster.com, and everyone I knew was getting jobs through these platforms. But the low wage labor market think like, construction workers, dishwashers, housekeepers, they were still using employment agencies. And so the idea was, can we use, a technology to help bridge, how they were looking for jobs? And it turned out that the reason they were doing that is because they didn’t speak necessarily speak English, and they didn’t necessarily have access to the internet. And so we built a hybrid online portal for employers that connect it to an IVR system, basically a phone calling system where they could call in and use their touchstone to basically apply for jobs. And, that was my first, first real business.

Speaker 2 00:04:17 Wow. And I guess through all your entrepreneurial experiences, you had, you had confidence that you could hire people and just attack a problem and do things in a better way. Any anyone inspired you to kind of give you that, that that confidence and that attitude, you think?

Speaker 3 00:04:33 Well, I’m originally from Mexico, and I think in Mexico I saw a lot of people start businesses.

Speaker 3 00:04:39 And, I was around a lot of entrepreneurs and that, that I just, I think it was an irrational confidence. I didn’t know how hard it was. I didn’t understand just how difficult it was. And so I’m like, yeah, I can do this, but not because I had this great faith in myself, but just because I, I was naive and didn’t understand how hard it actually was.

Speaker 2 00:05:01 Well, it looks like you figured it out pretty well. Given your track record, I’m very impressed.

Speaker 3 00:05:06 Thank you. It’s, It’s it’s been quite the journey.

Speaker 2 00:05:10 Tell us about since 360. That’s sounded like a really, great success story. And I’d love to hear the story. When did you start that?

Speaker 3 00:05:18 I started that in 2014. October 2014. And the, The basic idea changed quite a bit from when we started it, until we ended up figuring out what we wanted to do, and we went through a whole series of evolutions where when we first started the, the idea was, hey, these smartphones that we’re all using are getting jam packed with sensors.

Speaker 3 00:05:39 They had a GPS in for a few years, and then accelerometer and gyroscope and barometer and all these different sensors were being packed in, and it was almost like an arms race between Samsung and Apple to see who could put more sensors into the phone. And my hypothesis was that these sensors actually created really interesting data that developers would be able to use to build more personalized app experiences. So I had this vision that you, you know, you go to a bar and you get up to leave. And, Uber understands that and pushes a message to you and says, hey, do you need a car ride home? and all sorts of different use cases like that. And I was very excited to basically build a developer tool that any developer could use to very easily build that type of invisible experience. Turned out it was a very, very bad idea because, it was hard to monetize and there weren’t enough use cases and developers were already had too many SDKs in. But along the journey of trying to figure that out, it became very obvious that the data from these sensors was actually really valuable, and it was valuable in different ways that we didn’t anticipate.

Speaker 3 00:06:42 So it wasn’t quite as valuable to developers. But if we could figure out a way to collect it in a privacy friendly way, we could actually build some really interesting data tools. And we started to think, okay, well, who would want to know about just generally an aggregate non identifiable way where how the world moves around and where they’re where people tend to go. And we thought, well, restaurants probably care a lot about that because they’re spending a lot of money trying to get people into into their business. And so we started to build real time dashboards where we collected anonymized, aggregated foot traffic data. And then eventually we added credit card data. And then eventually we added survey data. And we used that to power these real time dashboards that restaurants and eventually retailers and the hospital industry used to basically understand everything they needed to know about their customer base.

Speaker 2 00:07:35 Give me an example. So I own a restaurant and I’m I’m up 3% year over year. I can I know my revenue, but how does sense 360 give me a broader picture of what’s happening around me?

Speaker 3 00:07:50 Yeah.

Speaker 3 00:07:50 So we typically worked with the the chains, the corporate side, not necessarily the franchisees. So let’s let’s just say, you, you work at one of the big, restaurant chains. You probably have a bunch of decisions you need to make that require you to understand your customer. So one is, what is my message going to be this year? How what are my ads going to say and what marketing channels am I going to use? And how am I going to position myself against some of my competitors? or I’m going to like, roll out this new limited time offer of this new product that’s going to be available for two months. How do I know if it performed well or not? These are all questions that we would answer. So as an example, in the case of the limited time offer, we could help and understand how many incremental people came into your your restaurants during that period. did you cannibalize your existing customers, meaning they would have come in anyway, or are you pulling people in that would have gone to other restaurants instead? Are you pulling in people from further away from your restaurant, or is it just people who are, in your trade area anyway? So these are the types of things that our dashboards would help them understand.

Speaker 3 00:08:54 And.

Speaker 2 00:08:54 And you do that by having a control group before the the message was sent out. And then afterwards you compare and because you have that that foot traffic anonymized individual data, you can see the the categories of people that came.

Speaker 3 00:09:08 Exactly that, that was exactly how it would work.

Speaker 2 00:09:11 And then how would you marry that with with the credit card and the survey data?

Speaker 3 00:09:15 So we couldn’t actually marry it 1 to 1. So we didn’t know that this user spent this amount. But we could look at sort of the two data sets in kind of. So we would look at how many people came in. And then we would also look during that time period, what was their purchase pattern of people who came in? Were they spending more? Were they spending.

Speaker 2 00:09:35 You could kind of overlap them even if you’re not buying point to point.

Speaker 3 00:09:38 Yeah, exactly. And it just gave you like a really interesting mosaic of what was happening. So you’d understand movement and then you’d understand spend and how check sizes were changing.

Speaker 3 00:09:48 And then the survey data helped helped us ask consumers questions. So we’d also understand why they did it. So if they did come in and they bought this one thing, we could ask them. And in aggregate, what did you think about this new limited time offer and.

Speaker 2 00:10:03 Where were you serving? Where were you surveying them on their phones or on their phones? LG?

Speaker 3 00:10:08 Yeah, we would partner with a bunch of mobile survey apps, to send the messages to people.

Speaker 2 00:10:14 And could you serve them based on their that they were in the store or, or did they have to just respond? I went to this, McDonald’s or whatever store during that time.

Speaker 3 00:10:24 The apps that we were working with had location capabilities, and so we could trigger surveys based on where they were in that specific moment. So we would only serve them if they were in.

Speaker 2 00:10:34 That’s a lot more real time, a lot more specific probably, than what the restaurants were using. What was what was the alternative? What were you displacing in in your sales calls?

Speaker 3 00:10:43 Yeah.

Speaker 3 00:10:44 So typically we were displacing traditional market research. So the way they would answer these questions previously is they would basically field a survey. And, you know, some of the times it was literally someone with a clipboard outside those restaurants collecting, answers. Sometimes it got a little bit more sophisticated. It was just email blast to their their customer base. Sometimes they would use a market research firm and surveys are important. So I don’t mean to discredit them. We obviously use them. And I think there’s a really important place for them. The problem, though, is if you ask someone how many times in the last year have you been to McDonald’s, it’s very unlikely you’re going to get a real answer. People don’t remember and they tend to bias down. Whereas if you ask them or how many times did you go to the gym in the past year, they’re going to buy us up.

Speaker 2 00:11:26 They’re going to buy us up. Yep.

Speaker 3 00:11:28 And we saw that all the time. And so it was we were basically going up against that type of market research where you do that, it’s actually very expensive.

Speaker 3 00:11:38 Data is a little bit harder to parse, especially when you’re asking them what happened rather than why it happened. And at the end of the day, what you end up with because it takes so long to collect this data, is a PowerPoint that’s basically outdated within days of getting it. And instead we were providing this real time always on dashboard.

Speaker 2 00:11:56 Got it. And was it? Was it a challenge to get your customers to to use the dashboard and to make decisions, or did they take on to it pretty quickly?

Speaker 3 00:12:08 They conceptually understood why they needed to use it. And they they would want to use it very, very quickly because, I mean, most of these businesses had like dedicated insights teams that their entire job was to derive these insights. Where we found a little bit more of a challenge was helping them understand how to use this very new data. That was there was just a lot more of it, and it was a little bit harder to wrangle. And you needed slightly different skills to be able to, to derive the the best value from change.

Speaker 2 00:12:40 It’s change management. Yeah, it can be an undoubtedly better set of information or a better product, but if that’s not what the teams are used to doing, you actually have to get them to adopt that and utilize it in their workflow. And I find that that’s a consistent challenge with companies that are that are involved with with data management and data provisioning.

Speaker 3 00:13:01 Yeah, 1,000%. And we ran into this immediately. The way we solved it was we basically spun up an internal like analyst slash consulting team where we we went and hired a bunch of like former management consultants, and they basically became the bridge. So they spent a lot of time with, with our customers, helping them learn how to use this data and what to do with it, and in some cases, even doing it for them.

Speaker 2 00:13:26 Got it. Were they from the restaurant industry or are they just really good data analysis folks?

Speaker 3 00:13:32 Yeah, so it was a question we thought about a lot, and we just had a very hard time finding people with the skill sets we needed that came from the restaurant industry.

Speaker 3 00:13:40 So we ended up not hiring with that expertise and then spending a lot of time making sure that we help them ramp up on the restaurant industry.

Speaker 2 00:13:49 Got it. But with that, help you with the technology that you’ve got more data, more detailed data. It’s on a dashboard versus a static PowerPoint. And you’re providing people that to help them utilize that data. customers were were happy. Obviously you were a success. You had an exit. Tell us, you know, you started in 2014 as a startup. Where did that journey end? Where did you get to? How large did you grow to? And I think you had an exit. Correct.

Speaker 3 00:14:15 We did. Yeah. So so 2014 we start the company. We have this previous concept that we’re working on. We start to realize by and it was late 2014. So let’s just say 2015. By mid 2016 we’re realizing this is not going to work. We start going through our evolution. We start building it by 2017. We’re in market.

Speaker 3 00:14:35 we we have some like pretty quick success. Bring on a few big, big, big customers and feel like, hey, there’s something really here. We get stuck actually, like trying to figure out how to build a repeatable sales model like the first few customers I built, I sold and then needed to, like, figure out how to get someone else to sell it. That actually took us about nine months. That was a really hard process to figure out. How do we go from founder led sales to like a more repeatable sales model? By late 2017, 2018, we figured that out. And then we went through like a crazy ramp where by 2019, we had over half of the top 50 restaurant chains on the platform. We started expanding to retail and things are looking really great. And then then we get into Covid, which is a whole other story. and we ended up being acquired in September of 2002 thousand. So September of 2000. So six years later.

Speaker 2 00:15:30 2020.

Speaker 3 00:15:31 2020. Yeah.

Speaker 2 00:15:32 Wow. That’s amazing.

Speaker 3 00:15:33 Yeah. 2020.

Speaker 2 00:15:34 So I want to I want to reverse the tape a little bit because you you talked about the transition from founder led sales to scaling sales with a team and that you’re exactly right. That’s one of the biggest challenges for entrepreneurs. tell us a little bit about your journey there. What did you know, what did you learn and how did you crack that intractable, intractable problem that really catches a lot of a lot of folks off guard?

Speaker 3 00:15:55 Yeah. I didn’t realize just how different I sold versus how different almost anyone else would sell. and, and I see this all the time with founders. I there’s nothing unique about me. It’s just as a founder, I have a few superpowers. Yeah. And it’s not that I personally have superpowers. It’s by definition, my role gives me superpowers. So one is I know the product intimately well. And I understand, like I help build the product. So I’m an I’m a good evangelist of the product. I can sell the vision, I can sell the the promise of it in a way that’s just very hard for someone else to do.

Speaker 3 00:16:32 the second superpower is I also control the roadmap so I can basically be in a sales conversation here, something and basically go back and say, guys, we got to go build this and that happens. And so and also I’m like this bridge where there’s zero distance between me and the customer. Me and the product team. Me and the engineering team.

Speaker 2 00:16:52 It’s just me. That’s what you try to design. It’s the perfect situation, but it works really well as a unit of one. And it gets more complicated. A unit of three for five teams.

Speaker 3 00:17:02 And it becomes impossible. I mean, one of the things I hear often from salespeople is like, I know what customers are telling me and no one believes me. I go back to the rest of the team and they’re like, no, you’re just biased. It’s recency. You’re not thinking strategically. And so like, that’s a big handicap for a lot of salespeople. Whereas as a founder, it’s not just not a handicap, it’s a superpower.

Speaker 3 00:17:23 So, I didn’t realize just how much of an advantage I had. And I brought someone in. Her name is Margarita. She was incredible. But I was like, go sell, like Excel. And she tried and it wasn’t working at all, at all, at all. And at some point, she and this other person on our team, Mikey, who eventually became our head of sales, kind of sat me down and said, we can’t sell the way you sell. We have to break. We have to break the reins of like and the structure and everything, and we have to go figure out how to sell ourselves. And and they did. And it took them some time to figure it out. But eventually they cracked it. And they they were able to go at such a faster velocity than I ever could. And it unlocked for us the ability to then like actually build a sales team.

Speaker 2 00:18:04 That’s awesome. So did they create a repeatable process and and you know, what were some of the steps they took that were different than what you did?

Speaker 3 00:18:12 Yeah.

Speaker 3 00:18:13 So so one thing that I’ve seen for myself and almost every founder I’ve talked to, like we’re very bad at discovery, we’re not trying to find and identify the pain that a company has and then figure out how to solve it. We’ve got our product that we’re so proud of, and we come in and we start talking about and getting people excited and doing all these things and like showing it off. And we spent all of our time in that world. Whereas the way they do it, which is definitely the better way, and I’ve actually learned from them and I now do a lot more discovery. And I find that to be an incredibly important part of the sales cycle for everyone. It’s just not how I was wired and I had no training, so I didn’t know how to do it. But like they come in and they spend the first hour just learning everything they can about the business, what problems they have, what are they trying to do, how. And then they use our solution as a way to help them solve that problem.

Speaker 3 00:19:02 And they only talk about the parts of the solution that actually solve their specific problem. So they’re not spending that much time in their product. They’re spending all the time on like the solution itself.

Speaker 2 00:19:11 So that’s one thing, the resolution of the problem as opposed to the whole tour.

Speaker 3 00:19:15 Exactly. And the vision and the excitement around how cool this is and what it can do and the promise of it. Yeah.

Speaker 2 00:19:23 That’s great. So your team built the repeatable process and that was and they probably had to build all the materials and the supporting assets so they could actually bring new people in and get them productive within a reasonable time. That’s a question I always like to ask founders, you know, you know, product market, you have product market fit, not when you can sell as a founder, not when your head of sales can sell, but when they can actually bring in a new sales person and get them up to quota within a reasonable period of time. What was a reasonable period of time for you, and when did you know you had product market fit?

Speaker 3 00:19:55 I’d say in 2019 is when I felt it, because we had this tradition where whenever we would sign a new customer, because these were all consumer facing brands, we could go and buy a t shirt with their logo on it.

Speaker 3 00:20:08 And so as soon as we would close one, we’d have like the ceremony where we would buy the shirt, and then we would hang it on the wall until we had this, like, wall. And I remember, you know, when we were going through this transition, we had like six t shirts on the wall, and we were so proud of those six t shirts. And someone on the team said it was like a corner. So it was like the small wall. And then there was a much, much longer wall that was completely blank. And someone said, imagine one day if we could fill up that wall. And in 2019, we filled up both walls and we had to double layer and we had to like it was crazy. And that’s when I felt like, okay, if all of these restaurants and now some retailers are starting to think that there’s value here, and we were able to sell that and sell it in a quick way. Then then we have product market fit.

Speaker 2 00:20:50 Oh that’s fantastic.

Speaker 2 00:20:50 So you had a, you had a wall that really showed that graphically that that must have been a great, great visual. Congratulations.

Speaker 3 00:20:57 It was fun. Thank you. It was really we were very proud of it. And I think the whole team was inspired by it was it was fun whenever we got to do it.

Speaker 2 00:21:05 Well that’s fantastic. So you you you hit product market fit and, very shortly thereafter, you got the attention of one of the giants in the industry, and you got acquired. any any any stories about the acquisition or lessons for other founders when, when that that that big, big giant comes knocking?

Speaker 3 00:21:26 yes. Although I feel like if I share that story, it’s going to seem like it was just up and to the right for us. And I like no stories up into the right. We went through some very, very challenging periods and near-death experiences before the acquisition, which.

Speaker 2 00:21:41 Yeah, you mentioned Covid. You you had Covid impact. You’re you’re you’re serving restaurants. Restaurants all closed.

Speaker 2 00:21:47 Right?

Speaker 3 00:21:48 Yeah. So Covid was really, really bad for us. So we were, doing a series B raise going into Covid. And so we didn’t have like, this war chest of capital. We were getting ready to fundraise. And then, or we were in the fundraising process and then Covid happens and within the first week. So March like whatever 16th or 17th, we start getting calls from our customers, big, big, big multi-billion dollar brands. And they they call us up and they, they basically tell us we have an annual contract with you. We know that. But we’re going to tell you that you really have a choice. You can either invoice us and we will not pay you because we are shut down and we are laying people off, and we do not have the cash, and we will never work with you again. Or you can hold off on invoicing us, give us a break, basically not charge us. And then maybe we’ll get out of this and we’ll work with you again.

Speaker 3 00:22:42 And that’s a really tough message to hear, because we didn’t have enough cash to basically be able to, like, cover our expenses without the revenue. And I didn’t know if it was going to be two months, three months, 12 months, 24 months. It was not clear at all. And the first customer calls us the second, the third, the four, the fifth five in the first week. And we’re like, if five called us this week already, how many are going to call me next week? How many are going to call me the next week? The week after? And I learned a lot of very, very valuable lessons through this period. The first one is you have to treat partners as partners, and you have to think of them as like 20 year relationships. You can’t think of it as like a transactional thing. Because if I was thinking about a transaction, I had the legal means to basically force them to pay us, but that would have been catastrophic for the business.

Speaker 3 00:23:30 So lesson number one is treat everyone as a partner and like work together to figure it out. The second big lesson I learned is how to manage like work with the team. So the team obviously knew Covid was going on. They were fielding these calls. They knew that things were in a bad place. And I had a choice. And I think earlier in my career, what I would have done is I would have gone back to the team and said, no, things are okay, and I would have tried to keep everything like protect everyone and sort of try to deal with everything myself. And that would have been catastrophic because the team would have seen right through it, and the team would have also really, really not been able to help me. And it would have been me trying to carry this massive burden. Instead, what I did was I went to the team and I said, guys, this is what’s happening. We what the customers are telling us isn’t that they don’t have money. What they’re telling us is what we offer them is not valuable to them right now.

Speaker 3 00:24:25 They do not want to pay for it because they are not going to get value from it. With their restaurants being closed.

Speaker 2 00:24:30 Yeah. No one’s in the stores. There’s no there’s no data to capture.

Speaker 3 00:24:33 Exactly. There’s no value. And that’s a different message than we don’t want to pay you right now because we don’t have the money. What they were telling us is we’re not going to get value from it, and we have to conserve cash. So we’re not going to pay you. But they were paying for other things that they did really need. And one of the things they were paying for was, for instance, DoorDash and all the delivery, like they needed delivery even more. They were paying them. They just weren’t paying us. And what what ended up happening was the team rallied around this information and said, well, okay, how do we solve this? How do we fix this? And that leads me to my third lesson, which is like, you really have to hear customers.

Speaker 3 00:25:07 As a CEO, it is so important to really hear customers. If I hadn’t been on those, some of those calls and I hadn’t heard it directly, I would have maybe accepted like, hey, they just don’t have money. We’re going to have to figure out how we’re going to lay off a whole bunch of people. We’re going to do all these really hard things. We’re going to survive, and then we’ll come back. And I would have missed the core message, which was, you are not valuable to me, because what ended up happening is we got together as a team and we said, okay, what can we do that would be so valuable to them that it will stop all of our other customers from leaving, and we’ll get these five customers back. And we said, well, everyone wants to understand what’s happening with Covid. And yeah, people aren’t coming into their restaurants, but they are buying delivery. Let’s go build like this whole delivery product using our credit card data to understand who’s ordering delivery, how are they ordering delivery, what are they doing with the delivery.

Speaker 3 00:25:55 And then let’s marry that with the fact that we do have some foot traffic data to understand. Like is it 0% of people are going or are some people going out of their house or anyone going to drive in and like, let’s start building a product around Covid. And literally the team in about a week was able to retool our system to do that. And we went back to these restaurants with this new offering. And not only did we keep our other customers, we got back those initial customers that had called us and we started to grow. We started to bring on some massive brand names in April. So still like in the midst of Covid. And that’s why I think Medallia came to us a few months later to acquire us, because even though, like it was still in the midst of Covid, we started to grow and we started to grow quickly. And that was a very.

Speaker 2 00:26:39 An amazing story. So you you used your other data sets to answer the question of what was happening after this dramatic change, which I think we all remember.

Speaker 2 00:26:50 You’re right. Delivery really took off during that period, and if you’re a traditional operator, you probably don’t really know. You want data around who’s ordering and what the patterns are and how you can adapt. That’s an incredible story.

Speaker 3 00:27:04 And at that point, what was so interesting is like delivery. DoorDash was big at that point, but it wasn’t ubiquitous. Not every restaurant chain was using delivery. It was still like the early days. Covid obviously catapulted it, but if you’re in a restaurant and you’re either very early in your delivery journey or you’re somewhere in the middle of that journey, or you haven’t even started it, like you need best practices, you need help. You need someone who can guide you through how to, like, manage your business through this like crazy change. And we positioned ourselves as the leaders to help them do that and that that not. I wouldn’t just say that it led to the sale. It did. It also saved our company. I do not think sense 360 would have survived if we hadn’t gone through that iteration.

Speaker 2 00:27:43 No, you were between rounds and you’re about to lose your revenue base. No one can survive like that.

Speaker 3 00:27:48 Yeah.

Speaker 2 00:27:49 That’s that’s that’s incredible. What a great story.

Speaker 3 00:27:52 Thank you. I’d like to say it was fun. I don’t know that it was fun, but it was very rewarding to, to learn some of these lessons and go through it.

Speaker 2 00:28:01 So you had you had an exit. Congratulations on that. And this this is your your second exit, your multiple many more than just two startups. But now you’re, you’re starting a new one today in the age of AI. And you were telling me earlier that the difference between building a company today versus five years ago is dramatic. Tell me a little bit more about that.

Speaker 3 00:28:22 Oh, different. It’s actually amazing. I think the the two biggest changes that well, there are three changes. One of them is the macro environment is different. Like it’s a tougher macro environment. But we can leave that to the side because there have been lots of cycles.

Speaker 3 00:28:34 the two big differences that I see, one is I, I is changing a lot of things and it’s changing them very quickly. And it’s impacting how I think about operating businesses. And some of the questions I have to answer as a CEO. And the second thing is the remote work that Covid has brought that in. And it’s and now it’s a question that every company has to think about in terms of how they they build themselves up. So those are the two big differences and I can go into as well.

Speaker 2 00:29:00 Let’s start with remote remote work because that happened directly with Covid and people have not gone back. So today, how many of your employees, do you have any even, even temporary office space? What is your situation?

Speaker 3 00:29:13 Yeah. So I work in an office because I really need the separation from home and work, and I need, like, a place to to really focus. So I come in, but I’m the only one here. So my co-founder is in, southern, like, in, like, Irvine area.

Speaker 3 00:29:26 So a couple of hours from me so we could see each other, but we can’t work in the same space. we have, a salesperson in Hawaii. We have, our customer success is in, Toronto. And then we have, several engineers basically all over the world. And it’s just a completely different setup than anything I’ve ever done. And it’s, you know, I don’t have answers when it comes to remote, I don’t think. I don’t think anyone has the answer. It’s a very, very I have a lot of questions, and some of the questions I asked myself were, what are the benefits of having people in person? And I think the benefits are material. I remember that story of like putting the t shirts up on the wall. Like not ups are hard, and being in the trenches with people and like actually being able to build those relationships and having those shared ceremonies and like that matters. And the collaboration that happens that that really, really matters. The second question I have for myself was at what cost? And when I started trying to hire people in Los Angeles who could come into an office, I found two things.

Speaker 3 00:30:26 One is there weren’t a lot of people who were willing to come into an office, even if they lived nearby us. And so getting people to actually come into the office is a challenge. And then you’re limiting your talent pool dramatically. You’re basically saying, out of all the talent in the seven 8 billion people that live in the world, I’m going to, like relegate myself to those that live within a mile or two miles of the office. It’s really, really limiting. So that’s a big cost. And then obviously, the economics of hiring in LA versus pretty much anywhere else in the in the country or in the world material as well. And so, what I ended up deciding to do is basically to hire the best people I possibly could, no matter where they were, and to really invest and build the infrastructure to try and make sure that we were collaborating and that we were building that, that team as much as we can. But it’s one of those things that that may be the right answer for us today.

Speaker 3 00:31:13 It might not be the right answer for us in a few months when we get bigger, and at some point it might not scale as well as I’d like. And so it’s just one of those things I’m constantly thinking about and constantly exploring. And I don’t know that I have the right answer, but I think what we’re doing now is working for us.

Speaker 2 00:31:26 Yeah, it’s a tremendous advantage. And technology, the way we’re talking today. And, you know, we haven’t met in person. Have you met everyone in person on your team yet?

Speaker 3 00:31:35 So one of the things we invest in is we actually bring everyone together once a year, which is just once a year. So anyone who was hired before January, I’ve met anyone who we’ve hired since, which I think are three people we have not met since we have not met. but hopefully I’ll meet them very soon when we do the next one.

Speaker 2 00:31:52 Right. So bringing together, you know, team, team get togethers and things like that are important to to bridge the bridge, the gap.

Speaker 3 00:32:02 I think so. I think so, because at the end of the day, we’re all human. And as much as I love zoom and or I love.

Speaker 2 00:32:09 Love, hate zoom, right. It’s a love hate relationship, right?

Speaker 3 00:32:12 Yeah. it’s not the same. It’s really just not the same. It’s not the same as breaking bread with someone. It’s not the same as, like, having, like, a full day with them and doing things that are not just work related. I find that zoom meetings, even with employees, they tend to be transactional, like I meet with someone because we have a stand up or a meeting and we’re like, go through the 30 minutes and there’ll be some chit chat. But like the interactions are transactional.

Speaker 2 00:32:35 Well, because you have another meeting 30s later. You have to you have to go through it, right? So there’s efficiency there. There’s obviously cost savings there, but you miss the relationships. Your story about the t shirts is perfect, right? That I can remember a similar stories when, you know when I was running leisure link the same sort of thing.

Speaker 2 00:32:53 And you have relationships that last for years and beyond, you know, different company cycles. So I think you’re right. We’re in transition. It’s not clear what the future holds. I know one of the things that I’ve seen, you know, as you know, we we we host an annual conference for tech leaders. And one of the reasons it’s not just for CEOs is we want to give CEOs the chance to bring their colleagues and actually get together for 2 or 3 days and something that’s curated. There’s some business value, there’s some fun. So a lot of people end up doing their annual planning there or do a quarterly board meeting there. And I think that, you know, the companies need more opportunities to get together. And if there’s a way to do it where it’s not a big thing, where you have to, it’s another job to do, but you can just come. We’ve found a lot of people really enjoy that. Up.

Speaker 3 00:33:36 I love that. I think that’s a phenomenal idea.

Speaker 3 00:33:39 I love that you like, have leaders bring other people from the team and so they’re bonding with other leaders, but they’re also bonding with the leaders in their company. That’s that’s brilliant. Love that.

Speaker 2 00:33:49 Exactly. Yeah, I think that’s going to be something that continues to grow. And I’m really excited about it. All right. The second topic was AI. And you know, I think you told me earlier that, you know, it used to be pretty linear relationship between revenue and people. And you could kind of follow some playbooks in terms of who you have to hire. And what’s the playbook today or is there one it’s being developed.

Speaker 3 00:34:08 Oh yeah. No, I if someone has a playbook, I want to hear it. I think we’re all trying to figure it out. I, I think there’s just a lot of different things going on all at the same time. So one is there’s there’s a lot of noise and I don’t think all the noise is real. So I don’t think you can build an entire company right now on one person.

Speaker 3 00:34:26 Like, I don’t think that’s at least not in B2B, where like you need someone to talk to customers, you need someone to sell to those customers. I think what it does, at least for right now, is that it can accelerate dramatically how much someone can do and how quickly they can do it. And I think about my own workflow and the amount of things that I’m able to offload. Anytime I have to write something, anytime I have to research something, anytime I have to like, execute, I can just have the ideas come up with the structure. It’s almost like a junior level employee where I give them sort of like, this is the project, this is what I’m trying to do, and I project manage it, but they do more of the execution. I’m finding that that that is a very, very viable one to have right now. And it means that you need to hire people who can think that way. And so one of the big questions I ask anyone that we hire is, are they a native? Are they curious? Are they like in their free time playing around with it for their personal life? Are they trying to fit? Like, it’s almost like I want intrinsically lazy people who are going to, like, really push the boundaries.

Speaker 2 00:35:27 Of I figured out how to offset that characteristic. Yeah, because it’s not it’s not not doers. Now, it’s not going to be managers of the genetic tools?

Speaker 3 00:35:36 I think so. And I see it like the difference between someone who leans in and someone who doesn’t is is pretty dramatic in terms of how much they can accomplish. And that doesn’t mean that someone who hasn’t been exposed enough to it or isn’t currently leaning in can’t lean into it. But like, I pushed that very hard during the onboarding. And it’s just like, if there’s no bonus points for doing something hard, there just isn’t like it’s the bonus points are for doing something well, doing it fast, doing it cheaply. But now if we’re doing it hard. So if there’s AI tools that can help you like lean into it.

Speaker 2 00:36:08 Yeah. And you need to you need to save that energy for the polishing and the catching and the proofing. Right. Because it’s not it’s not perfect.

Speaker 3 00:36:15 So it’s not.

Speaker 2 00:36:16 Perfect. But if you can get 80% of the way there and then are really good at the 20% and do that three times in the time, it would have taken you to do it the other way.

Speaker 2 00:36:23 That’s that’s real value.

Speaker 3 00:36:26 Yeah. Massive value. It’s transformational value. It means that, you know, you could do five x the amount and you could probably do it better. And yeah. So we have eight people on the team now. I feel like at this stage in our company at sense 360, we probably would have been 15 to 20 people. And I feel like there’s still room for us to get even more efficient. And so it’s an exciting time.

Speaker 2 00:36:48 2 to 3 x your 2 to 3 x more people efficient and I.

Speaker 3 00:36:52 Think.

Speaker 2 00:36:52 So. Yeah. And you’re real estate efficient right. So you’re able to grow faster with less capital. Yeah. And I think that’s what we’re seeing. You know companies which is only going to unlock more innovation faster, which while painful in some ways is going to be a great thing for innovation.

Speaker 3 00:37:11 Yeah, I think so. I definitely, definitely think so. And it’s, it’s it’s a brave new world. It’s a real opportunity. I, I worked at Amazon very early in my career, and one of the things that I took away from my time there was that, the company was just thoughtful about every aspect of the business.

Speaker 3 00:37:28 Everything was intentional from HR to the the way like meetings happen to absolutely like how product was developed. Everything was intentional and thoughtful. Now doesn’t mean I agreed with absolutely everything, but you could see that someone had spent real time thinking about it. And I think that’s the same lens we need to apply to every business now with AI and make sure that we’re not we’re not doing things just because that’s how we did them, which is how most companies operate. But we’re thoughtful and we think through what are the implications? Where can I fit in? How do we reimagine this? And everything just needs to be reimagined.

Speaker 2 00:38:02 Absolutely. Well, Ella, you’ve done multiple startups. You’ve got a lot of experience. You know, if you’re talking to another founder who’s starting to jump into something, what are some of the lessons you might take away? You were talking to me before the interview about headwinds and tailwinds. You know what? Elaborate on that a little bit.

Speaker 3 00:38:22 Yeah. So so my I didn’t mention this, but my first VC funded company, which was between the the recruiting one and since 360 was a company called Think Near.

Speaker 3 00:38:31 And we were doing location based mobile ads in 2011. So talk about tailwinds. The iPhone had come out a few years earlier. The GPS was put in, usage was exploding, and advertisers were so hungry to figure out how to advertise on a mobile device. And here we came along and we started evangelizing the idea that location really mattered. In mobile ads, the tailwinds were insane, and so the business was sold within 18 months, and it was a really nice success. And it was so easy and it masked every one of my mistakes. And honestly, if I could do that again, I would do it again anyway.

Speaker 2 00:39:04 So how does how do you how do you spot these tailwinds? Because that sounds like a dream.

Speaker 3 00:39:09 Yeah, I’m not really sure. because my next business since 360 had a lot of headwinds and that was much harder, much longer. I think the way to spot tailwinds is to look for to look for industries that are very large and going through disruption. So advertising is obviously very large and mobile was a big disruptor.

Speaker 3 00:39:29 And if you can do that, You typically as a startup, have a big advantage because, you know, as a startup, we we’re going to have less resources, less people, less brand, less distribution than a big incumbent than a big player. The only advantage we have is speed and agility. And so we want to look for industries where speed and agility actually matter more than all of these, those other things. And really the industries that are going through transformation are the ones that where agility matters so much. And so I think the best way to find tailwind is to find big industries undergoing very dramatic change.

Speaker 2 00:40:01 And there’s a.

Speaker 3 00:40:01 Lot.

Speaker 2 00:40:01 Of emotions today. So I think there’s gonna be a lot of innovation. And it’s going to be faster, so faster and cheaper to innovate than ever before. So let’s hope that that pretends good things for our economy. Well, Eli, this has been a treat. I’m impressed with your journey. I’m impressed with your thoughtfulness and how you’re sharing the lessons.

Speaker 2 00:40:18 I think it’s going to be really great for our audience. you know, when you’re when you’re trying to learn and you’re out there trying to, look, look for resources. Are there any podcasts or books that you’d recommend to our audience?

Speaker 3 00:40:31 Yeah. I mean, the, the, the book that I think shaped my journey the most was probably Hard Things about Hard Things by, Ben Horowitz. It just, it really inspired me in a lot of different ways, I think from on the on the one side. Yeah, it’s a great one. And it’s also just, it’s real. It’s. There’s no fluff around it.

Speaker 2 00:40:52 Yeah. He cuts right to the chase and he doesn’t sugarcoat sugarcoat it. Yeah. At our conference, we we we take a moment each year to read the struggle and and there and there are tears every year. Yeah.

Speaker 3 00:41:04 Yeah. I also love Lenny’s podcast and just generally like all his writing, I think he does a really good job of, having like, very data driven insight into how things are changing and what some of the best practices are.

Speaker 3 00:41:17 there’s so much it’s it’s incredible. The other thing I love to do is I love to use OpenAI’s deep research to go deep on any topic. So it’s almost like curating my own little article.

Speaker 2 00:41:28 Yeah, exactly. You can tell me more about this. Give me a summary of that. It’s great. It’s more and more opportunities each day. Well, Eli, thank you so much for taking all this time with us today. I’m really excited about sharing this with our audience.

Speaker 3 00:41:42 Thank you so much. It was really, really nice connecting with you. And thanks for having me on.

Speaker 2 00:41:46 I hope you can join us next winter up at the ski slope.

Speaker 3 00:41:50 I definitely plan on it.

Speaker 2 00:41:52 All right. Eli. Take care.

Speaker 3 00:41:53 All right. Thank you. Joanne.

Speaker 1 00:42:04 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.

Speaker 1 00:42:20 Com. We’ll be back next week with more insight from another great tech leader. Thank you.