In this episode of the Growth Elevated Leadership Podcast, host Julian Castelli interviews Kathy Slowinski, a turnaround CEO known for revitalizing distressed software companies at Trilogy Software. Kathy shares her journey in the tech industry and discusses her operational strategies, including cost-cutting, optimizing cloud infrastructure, and integrating AI to enhance business performance. She emphasizes the importance of transparency, customer engagement, and making tough leadership decisions. Kathy also highlights the benefits of measuring AI usage within teams and fostering a competitive spirit. The episode offers valuable insights for tech leaders and entrepreneurs navigating company transformations.
For more resources on how to be a a better leader in business, please visit us at GrowthElevated.com, and follow us on LinkedIn.
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Timestamps
Introduction to the Podcast (00:00:02)
Julian Castelli welcomes listeners and outlines the podcast’s purpose and focus on tech leadership.
Overview of Growth Elevated (00:00:29)
Julian introduces Growth Elevated, a community for tech leaders sharing best practices and insights.
Introduction of Guest Kathy Lewinski (00:01:12)
Kathy is introduced as a turnaround CEO specializing in transforming distressed software companies.
Kathy’s Journey to Trilogy Software (00:02:41)
Kathy shares her background in tech and her recruitment to Trilogy Software.
Trilogy’s Unique Business Model (00:05:52)
Kathy explains Trilogy’s approach to acquiring and revitalizing distressed software companies.
The Alchemy of Cash Flow (00:07:06)
Discussion on how Trilogy creates cash flow from companies that are not generating it.
Competitors in the Tech Space (00:08:20)
Kathy mentions competitors like Constellation that operate similarly in the tech acquisition space.
Trilogy’s Organizational Structure (00:08:58)
Kathy describes Trilogy’s structure and the dedicated teams for different software sectors.
Focus on Enterprise Software (00:09:54)
Kathy discusses Jigsaw’s focus on enterprise software and its B2B model.
Transforming Companies (00:10:12)
Kathy shares her achievements in turning around three distressed companies in the past year.
Challenges Faced by Distressed Companies (00:11:07)
Kathy explains the common issues companies face before being acquired by Trilogy.
Playbook for Acquisitions (00:12:34)
Kathy outlines the playbook used to assess and improve newly acquired companies.
Transparency During Transitions (00:13:02)
Kathy emphasizes the importance of transparency with employees during acquisitions.
Capabilities for Efficient Cuts (00:15:19)
Kathy discusses how Trilogy’s central functions allow for quicker and deeper cuts in operations.
Central Functions and AI Utilization (00:15:28)
Kathy explains how AI is integrated into customer support to improve efficiency.
Engineering Challenges in Acquisitions (00:16:43)
Kathy addresses the complexities of managing diverse tech stacks across acquired companies.
Global Talent Acquisition (00:18:22)
Kathy highlights Trilogy’s strategy of hiring the best global talent for engineering roles.
Top Three Efficiency Drivers (00:18:55)
Kathy discusses the three main efficiency drivers for tech companies: cleaning up roadmaps, prioritizing tech debt, and focusing on core use cases.
Tech Debt Management (00:19:14)
Kathy emphasizes the importance of addressing tech debt and avoiding unnecessary modernization of programming languages.
Cutting Unnecessary Tech Upgrades (00:20:19)
Kathy advises against modernizing legacy systems unnecessarily, highlighting the cost implications of such decisions.
R&D Cash Flow Reduction (00:22:32)
Kathy explains that by reprioritizing product roadmaps, companies can reduce R&D costs by over 50%.
Cloud Infrastructure Optimization (00:23:40)
Kathy discusses optimizing cloud infrastructure, including reducing unnecessary redundancies and server sizes to cut costs.
Real Estate Cost Savings (00:26:20)
Kathy highlights the potential savings from reducing office space and transitioning to remote work setups.
Sales and Marketing Strategies (00:28:41)
Kathy shares insights on improving sales and marketing through AI, focusing on content generation and funnel optimization.
AI Utilization Measurement (00:32:16)
Kathy describes how her team measures AI usage, noting significant increases in productivity through AI tools.
Dictation for Efficiency (00:34:12)
Kathy explains her transition from typing to dictation, enhancing productivity with AI-assisted writing tools.
AI Newsletter Creation (00:36:35)
Kathy discusses her efficient process for creating newsletters using AI tools.
Monitoring AI Usage (00:37:13)
Kathy explains how she tracks AI usage among her team to enhance productivity.
Team Competition in AI Usage (00:37:31)
The team engages in friendly competition to measure their AI usage percentages.
Impact of AI on Productivity (00:38:09)
Kathy shares the significant improvements in deliverables and releases due to AI implementation.
Lessons from the Startup Experience (00:39:07)
Kathy reflects on crucial lessons learned during her time guiding a startup.
Importance of Open Communication (00:39:29)
She emphasizes the need for CEOs to engage with customers and staff regularly.
Making Hard Decisions Early (00:40:43)
Kathy advises on the importance of making tough personnel decisions before financial crises arise.
Optimism vs. Reality in Leadership (00:41:02)
The discussion highlights the balance between optimism and the need for proactive decision-making.
Finding Kathy’s Newsletter (00:41:31)
Kathy shares where listeners can find and sign up for her newsletter online.
Closing Remarks (00:42:20)
Julian thanks Kathy for her insights and encourages listeners to subscribe to the podcast.\
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 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 Retail, me not the San Francisco 49 ers, and many more. This episode is brought to you by 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 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, which also happens to be at the base of a beautiful mountains in in Utah.
Speaker 2 00:01:12 We’ve been at Park City and Alta. And so if you’d like to learn more about either the event or Growth elevated, please check us out at Growth elevator.com. And please subscribe to this podcast wherever you listen to podcasts. Today I am super excited about welcoming Kathy Slowinski to the podcast. Kathy is a turnaround CEO known for transforming distressed software companies into high performing enterprises. As CEO of Jigsaw at Trilogy Software, she specializes in revitalizing companies through strategic AI implementation, process refinement, and she has an ability to consistently achieve 70% net profit margins within a year of taking over a distressed company. Kathy’s track record includes successfully turning around three companies in 2024 implementing AI first initiatives that achieve 80% adoption rates. Her expertise spans both process and product management go to market, creating scalable, profitable business models. Boards and CEOs seek out Kathy for a straightforward approach to company transformations and her ability to deliver measurable results. Let’s welcome Kathy to our program. Slots, Kathy. There you are. Let’s welcome Kathy to our podcast. Hey, Kathy.
Speaker 3 00:02:41 Thanks for the intro, Julian. Good to see you again.
Speaker 2 00:02:43 Yeah, it’s great to see you as well. So, you know, tell us a little bit about, you you’ve been an entrepreneur at a tech company set up by several times, and then you went over to trilogy trilogies, a different type of company. So tell us a little bit about your journey from, you know, being at a tech company and then what you’re doing at trilogy and how the first maybe both influenced your interest and prepared you for the second?
Speaker 3 00:03:09 Yeah, definitely. So I’ve done a lot of growth stage, companies in my past in terms of running product management, typically product management and engineering or product management, and go to market. And, probably about ten years ago, I ended up at trilogy. I was, moving overseas and wanted a role, that was 100% remote. I got recruited in by a friend and totally fell in love with it. It’s the most intense place you could work in terms of.
Speaker 3 00:03:41 There’s always something new happening. you’re sometimes acquiring two, 3 or 4 companies in a single year. You you’re. Wow. Expertise in various domains grows quite rapidly, so I loved it. the thing that I didn’t love was I was living in Australia and the time zones were murdered to try to cross over with the US, so I. I left the company with a plan to come back. And then a couple of years ago, I was working for a startup that was actually distressed, running out of capital. We were trying to sell it and we’re selling it to a company in Austin, Texas, and trilogy’s actually based in Austin. So I scheduled a lunch with, the woman who is my boss now, doctor, and said, listen, I really want to come back. I know you’ve got a CEO portfolio, CEO role open, you know, spend about two hours over a lunch. And by the time I walked away, she was like, what day can we start? Well, depends.
Speaker 3 00:04:36 It depends on the, acquisition. But, came back and just love it. after I actually left the first time, I found myself bored at every other company. And I know that sounds a little facetious to say, but it when you get used to that, that much intensity and change when you’re at a single company doing one thing. you, you know, you fix a bunch of things, and then you sort of sit there and you’re like, now what do I do? So I constantly, constantly found myself going to the CEO and saying, can you, like, give me another department or can you give me a special project to work on? So even after my trilogy years, you can see in my, LinkedIn profile, for instance, I always have like two or 3 or 4 departments at companies instead of just one, one thing, just because I love that, that intensity and things, connect across areas, right. Like product and support are so highly connected. So there was a company I ran both in, came to another company as a GM and then ended up running sales, marketing and product management because again, they’re all highly coordinated between each other.
Speaker 3 00:05:40 And I just found like running it all helps you remove the barriers.
Speaker 2 00:05:44 Sure. So but you’re talking about the intensity of trilogy. But but most people don’t don’t know what kind of company that is. So walk us through.
Speaker 4 00:05:52 Yeah, for.
Speaker 2 00:05:52 Sure is trilogy and how it’s different than an ordinary company and how it gave you those skill sets.
Speaker 3 00:05:58 Yeah. I’ll give you the the Cliff note. Cliff notes edition. trilogy started 35 years ago. It was bootstrapped by a gentleman named Joe Lemont. He built software from scratch, sold, a pricing configuration tool into large companies like Ford, IBM, and, somewhere around the.com boom. He’s like, man, there’s a lot of good companies out there, but they’re running out of cash. They’re making revenue, and we’re really good at operations. Why don’t we start buying these companies? So let’s call it 20 tens, early 20 tens. They started buying companies. Here we are 25 or 15 years later in 2025, and we’ve bought about 150 companies where we’ve and they’re always distressed, pretty much.
Speaker 3 00:06:42 we buy them for cash, you know, take them over day one and basically work on improving their operational side of their business to get them profitable. And our our play is we try to keep them as long as possible. We don’t typically sell the companies. Once in a blue moon, there’s someone comes and gives us an offer we can’t refuse. But typically these are long term hold. We use the cash and you’re.
Speaker 2 00:07:06 Creating you’re creating cash flow with these companies. And they’re probably not cash flow generating when you get them right. So you’re kind of creating alchemy, helping them turn into a cash flow stream. And this I’ve always been interested in this, and I can’t wait to learn more about your business and trilogy, because that’s frankly why SaaS companies get premium multiples, because of the recurring revenue and theoretical high margins. There’s always the theory that, hey, this business should things, you know, should we hit the top of the market or things slow down, we should be able to have a recurring cash flow stream.
Speaker 2 00:07:36 But a lot of the companies in the early stages never get their right because they’re at the at the formation and growth stages, and you are actually taking those same companies, but getting them to that cash flow level, which which is kind of alchemy and I can’t wait to hear how you do that.
Speaker 3 00:07:51 Yeah, our companies tend to be a little bit longer in the tooth in terms of like been around for a while, like let’s say average is 7 to 15 years in terms of operating. But they just get to plateaus where they can’t grow anymore. They’re trying as hard as they can and then they’re burning their cash too fast. So we turn.
Speaker 4 00:08:08 Them. And this is a.
Speaker 2 00:08:09 Trend, right? There’s a there’s a number of companies that are doing this now. Who are some of the who were some of your peers in the, in the tech space that, probably heard about?
Speaker 3 00:08:20 Yeah, probably the best, company and well, best well known company out there is constellation. They’re Canadian company.
Speaker 3 00:08:27 They do pretty much constellation. Yeah. the same thing we do. There’s lots of other smaller boutique ones, but a lot of times we find ourselves up against them in the bid process.
Speaker 4 00:08:37 Got it.
Speaker 2 00:08:38 And you’re you’re on the operations side. Is there another group that’s out there looking at companies and kind of constantly bringing them in.
Speaker 4 00:08:45 And.
Speaker 2 00:08:46 Do they have different? Are you you’re organized by sector or you know, so if the acquisition group is bringing a company in, do they have multiple places to send it or they are. What’s the what’s your structure?
Speaker 3 00:08:58 Great questions. We do have a dedicated M&A group, led by Niraj Gupta. But if you’ve if you got something for sale, reach out to me and I’ll, I’ll connect you with Neeraj. he’s got a small team. Then within Trilogy Software, we have four CEOs. And depending on what type of software it is, and basically our capacity is where we decide which CEO gets, the acquisition. So we have a CEO that that is dedicated to telco only.
Speaker 3 00:09:28 She’s okay, on a, you know, a rampage buying tens of companies, in the telco space, we have two CEOs in the enterprise space, and now we have a CEO that we’ve hired in the services space, specifically around AI services is our our goal here. And he’s building new products as well as acquiring.
Speaker 2 00:09:49 And what’s jigsaw’s focus. That’s your that’s your your group enterprise. enterprise software.
Speaker 3 00:09:54 Enterprise software I do have a couple SME, SMB products, but we are 100% B2B. And the bulk of my portfolio is enterprise.
Speaker 2 00:10:04 And did I, did I? I read it right. You, transformed three companies last year.
Speaker 4 00:10:12 Yes. That’s that’s that’s a pretty impressive.
Speaker 3 00:10:18 Yeah. Thanks. it was a busy year, to say the least. we did probably about $35 million in equities or 39. Sorry. We’ll edit that part out. $35 million worth of revenue purchased through acquisitions. So three small companies, and all of them were negative margins. I think the worst case scenario one was about -40% 40% margin and have turned all of those around.
Speaker 3 00:10:47 They’re all trending towards a 70% or already at 70% margin within.
Speaker 4 00:10:52 Wow for.
Speaker 3 00:10:53 Four quarters.
Speaker 4 00:10:54 Is our is that is.
Speaker 2 00:10:55 That an EBITDA margin?
Speaker 3 00:10:58 It’s a net EBITDA margin. Net margin.
Speaker 4 00:11:00 EBITDA. Yeah.
Speaker 2 00:11:02 And and what’s their growth profile before and after.
Speaker 3 00:11:07 They were not growing their flat okay. So a lot a lot of times these companies that we buy are somewhere in that like let’s call it ten year mark of being operating. And they’ve they’ve gone through a growth cycle. They’ve gotten funding and then they’ve hit the accelerator with the funding, but hit it way too hard and can’t find that next ICP to grow into or. Yeah, don’t have the right, you know, product features to get to that ICP. So they’re trying to build while growing and just tend to burn through their cache way too fast. and often we find they’ve made, like, a decision and sort of don’t pivot quick enough before it’s too late and or don’t make the hard decisions to, you know, revert back to what they’re doing or pivot a different direction or let go of people, or slow things down until they find the right next.
Speaker 4 00:12:06 Yeah, they’re, they’re.
Speaker 3 00:12:07 Happy to sell into.
Speaker 2 00:12:09 They’re burning too much cash looking for growth. And when they get to you then so you’re, you know, you guys are okay with the growth rate. but you’re primarily focused on operations and you’re, you’re going to create the alchemy by improving cash flow. So what’s what’s your general playbook? Do you have a playbook when when a new company comes in, is there a set of standard things you look for to to get your biggest, impact and bang for the buck?
Speaker 4 00:12:34 Yeah.
Speaker 3 00:12:34 Even before with the playbook as part of the acquisition playbook, we want companies that have great retention rates, but we don’t care if their growth is totally stalled. As long as we know we can retain the the existing customer base, we’re willing to invest in the company. Post-acquisition. we do. I mean, we do the hard things that typically the CEOs don’t want to do, which is shed the people. It’s it’s it’s almost always our, our day. One thing, it’s, we call it the doctor.
Speaker 3 00:13:02 Spock and Mother Teresa approach. When you get acquired, everyone is more or less stressed out, freaking out a little bit. They want to know where their future lies, right? And we’re very we try to be very transparent and say, like, the only way to get these companies back to profitability is to cut the costs, right? So there’s usually two main cost centers. One is people and the second is things like offices. Right. Like assets you don’t need. So those are pretty quick to cut. but we’re very transparent with people. Day one we do an all hands we, you know, tell them we we already formulate how much we have to cut to get to a number that’s reasonable to get into profitability space again. We let people know we create a plan and we like we, you know, if we if we have to I’ll give you an example. If we have to cut a third on day one, we let them know and we let them know that that day one, that’s who’s getting cut.
Speaker 3 00:13:57 And if we know we’re cutting another third, maybe after six months, we let them know on day one they’re getting cut. We actually call it pay to quit like we’re one. We say, hey, if you’re not ready for this, you don’t want to stick around. This isn’t for you. We will actually pay you to quit. But either way, you know you have six months to go find another job, and we are totally fine. Look, looking for another role? As long as you help us with the transition into our playbook, into our central functions, into our model. But we try to be super transparent with people because it’s it’s probably the worst thing to get acquired. And just like, not.
Speaker 4 00:14:32 Of course.
Speaker 3 00:14:33 What’s going to happen? Like, are you going to have a job in three months or not? Well, you’ll know that.
Speaker 4 00:14:36 Would be.
Speaker 2 00:14:38 The stress already. A lot of times it’s stress because you’re concerned about this. And then I think if you do some research, you’re going to find out how tight your company operates.
Speaker 2 00:14:47 So of course that’s going to be stressful. So I’m glad to hear you guys are are very forthcoming and open with your employees. But let let me let me ask a question. So there are some some companies and management teams that never get their foot off the gas because they want to grow. Maybe they’re they misjudged the market, but there are plenty that try to cut and find it difficult because they’re small companies and they they need people. What do you do? You have any special capabilities that allow you to cut faster and deeper than the companies on a standalone basis?
Speaker 3 00:15:19 Yeah, to two things. One is we have central functions. We again, we’ve been around for 35 years.
Speaker 4 00:15:25 We yeah. Give me an.
Speaker 2 00:15:26 Example of a central function how that works.
Speaker 3 00:15:28 Support. Right. So we support 100 products with one support team and everyone gets certified on the products. We also use a ton of AI in support right now where we call it deflection rates. I think we’re at like 76% deflection rate on our customer support tickets.
Speaker 3 00:15:43 So that means 76% of our tickets that come in. I can answer in real time.
Speaker 4 00:15:49 The solver.
Speaker 2 00:15:49 Solved without a human.
Speaker 3 00:15:51 Right. We still have a 200 person support team. We’re down to 30 people because of the AI that we’ve put in. So that’s even saved us a.
Speaker 4 00:15:58 Ton of money, which we can then supports.
Speaker 2 00:16:01 One of the best use cases for AI. It’s it’s it’s perfectly right.
Speaker 3 00:16:05 Definitely. so central functions support, finance, even engineering. Like, we have a central support function for our engineering side of the house where they manage all the maintenance and the bug fix. Right. We order.
Speaker 4 00:16:19 We.
Speaker 3 00:16:20 Order humans to to manage it. And now it’s becoming more and more AI, quite honestly. Right. And, the work on.
Speaker 2 00:16:27 Narrow your acquisition funnel though, right? You do you have to have products that are built in a certain way that your centralized R&D team can manage, does that you know that that seems like the other ones make total sense. Support, finance, HR.
Speaker 2 00:16:43 I can I can understand if you if you have scale capabilities there, but I would think that engineering is where people have the most surprise from the outside end, because it seems like everyone’s built their own folly on and their own stack. And, and are you able to really scale when they have different, different tech stacks?
Speaker 4 00:16:59 And it’s part of the architecture?
Speaker 3 00:17:02 As part of the acquisition process, we do a lot of documentation and knowledge transfer, and we try to get everything written down how it works, videos of how it all works. So we don’t ever lose that knowledge and that stays in a knowledge bank. The coolest thing with AI now too, is we can put it into something called the rag. So you can query the rag questions about how things are built. But the answer is no. We have everything from old school on premise software, right? Built 30 years ago in our portfolio that we still do releases on, and we have to keep it up to date because we have hundreds of customers on it, right up to, you know, modern AI platforms, written in Python.
Speaker 3 00:17:43 So we’ve got the gamut of things. There are specialists, people that really get to know the software well within the company, over 1000 people, 1000 people deep. So it’s, you know, we’re okay to have a few people that really know a couple of the platforms. Well, sure, but we don’t find too many problems with different types of platforms because of the knowledge transfer process we do. And then in general, the skill set of folks we hire, we try to. One of the other big things we do is we hire globally all over the world.
Speaker 4 00:18:18 Okay. So you’ve got a.
Speaker 2 00:18:19 Deep team and an efficient team.
Speaker 3 00:18:22 Very efficient. But we don’t play the game of like we’re hiring globally because we want a cheap resource where we take the approach of if it’s a 200 K engineering role. We will find the best human in the world for that 200 K versus constraining ourselves to one geography. and I think that helps as well, in terms of just finding the best talent in the world, and people love working for us and stay with us for years.
Speaker 3 00:18:49 We’ve got people in the company for they’ve been around for ten, 15, 20 years, which is sort of unheard of in technology.
Speaker 2 00:18:55 Yeah, that’s amazing, especially when you know the complexity of what you guys are doing. So tell me, what are what are the big, you know, your top three if this was, Wheel of Fortune or something and we’re saying, hey, your top three efficiency drivers that you consistently see over and over again or Family Feud, what are the top three boxes?
Speaker 3 00:19:14 Top three is clean up the roadmap. Try not to do everything for everyone. Figure out what the core use cases are for the customers who are paying you right now because you want to retain them and work on that. So, you know, we’re you and I were talking about it before the call. You join these companies sometimes. Or you buy these companies sometimes and you see these roadmaps where they’re, you know, six months, 12 months, 18 months of tech debt. And I’m like, who are you.
Speaker 3 00:19:38 Who you tech dating for? Is is the platform falling apart? you know is is it fall over every day? If that’s not happening, then I don’t like sometimes.
Speaker 2 00:19:47 Example what’s an example of tech that you need to do and tech that you can just postpone or not even ever do? Because I think that as a non technical founder, I used to get paralyzed with the, you know, the anxiety of like, hey, the the machine is going to break if we don’t fix XYZ and then it’s just like you described you’ll, you’ll end up six months, nine months of at least commercial inactivity while you’re, you’re, you’re building infrastructure what it feels like. So when is it possible to do that safely and what is it not to say?
Speaker 3 00:20:19 I would say the things that I would cut is the like, let’s modernize the language that we’re using. Let’s use like the latest, hottest version of whatever. You know, if it was written in, I don’t know, Java. Now they want to move to Python or something, right? Don’t don’t do that.
Speaker 2 00:20:37 Like we can support Java. We can we can get the job or.
Speaker 3 00:20:40 Yeah or you. But like we often find by companies who are older languages like dotnet right. Most dotnet developers are north of 50.
Speaker 4 00:20:50 At this stage. It’s hard to find.
Speaker 2 00:20:51 These days, right?
Speaker 3 00:20:52 Hard to find. But the amount of money you’ll spend rebuilding from net net to Python, for instance, you will never recoup in revenue or cost savings later on. Yeah, it’s harder to find people. But with I know I mean I can help. That’s right. You’re you’re non dot net developers learn to use. Net a lot faster. So that’s that’s one that I think is like a huge throw away of money. The other ones that I see is like they built two products and they want to merge them because.
Speaker 4 00:21:24 You know, consolidate.
Speaker 2 00:21:25 The platform the new, to the new. I bet you’re the new platform. Yeah, that’s going to do everything in a better, more efficient way. I mean, if I had a dollar for every time I heard that right, that need.
Speaker 3 00:21:37 And not only consolidate the platform, but like throw a new UX UI on again. Yeah, six months to 12 months plus. Then the users get all cranky because they’re like, can’t find the thing that I used all the time because the workflows change. So to me, those are those always end up in the tech debt. I mean, UX isn’t so much tech debt, but they end up in those like sunken costs that you’ll never see again. The places you’re going to want to spend money on is like security vulnerabilities, right? certifications. Like if there’s if you’re using some flavor of Java behind the scenes, making sure you’re at the you don’t have to be at the latest version, right. Just figure out like the version that’s not going to be deprecated for 4 or 5 more years and you’ve got some room to go, but you get you get people that are insistent, like, we got to be on the newest version of this. Otherwise bad things will happen. And it’s like, what? Bad things will happen.
Speaker 3 00:22:27 so those those are probably the ones I make sure get.
Speaker 4 00:22:31 Done when.
Speaker 2 00:22:32 When, when you go in there and you find you, well, you’re effectively reprioritizing or or narrowing the, the product roadmap. What what scale of reduction are you typically able to make in the R&D, cash flow department?
Speaker 3 00:22:52 north of 50%, maybe even more.
Speaker 4 00:22:54 So you’re actually able to.
Speaker 2 00:22:55 Cut cut 50% cost by just going through with this discipline approach. Let’s let’s not let’s not Replatform let’s not re re re language. Let’s let’s just make sure the product keeps working and you have the, you have the expertise to make sure that it’s going to keep working and it’s going to have appropriate security, like you said, 50% cut there. Right. That’s a big deal. What percentage of the, of the expense base of companies coming in is typically R&D.
Speaker 3 00:23:26 Depending on the company on the low end, probably 30 on the high end, 50 depending on the company.
Speaker 4 00:23:32 there’s.
Speaker 2 00:23:32 15 to 25% cash flow improvement right there.
Speaker 4 00:23:36 Easily.
Speaker 4 00:23:37 Very easily. Okay.
Speaker 2 00:23:38 So other categories, what are your other big categories.
Speaker 3 00:23:40 Yeah. Another area quite honestly is the optimization of their cloud infrastructure. It’s often teams don’t have people like DevOps, people that really understand how to optimize and get the most out of, infrastructure. We’re we’re an AWS shop. And we often see just crazy things like three data center redundancies. And I’m like, when have you even ever had to failover to one data, one other data center? Why? You know, why are we paying for multiple redundancies? That’s one area, over, over like over sizing the servers that they need. and just not the AWS.
Speaker 2 00:24:22 You can have it variable capacity. Right?
Speaker 4 00:24:25 Right.
Speaker 3 00:24:25 And running them at maybe 5,060% capacity versus really working on that. And a lot of times like engineers don’t have a background in infrastructure that’s a.
Speaker 4 00:24:34 Very different skill set. Yeah.
Speaker 3 00:24:36 So not having people in-house that really understand, infrastructure is a big factor where right now, the company that we most recently purchased, we will reduce our we will reduce our AWS bill by 50% by the end of this quarter.
Speaker 3 00:24:51 And we only have the company in end of August I believe. So goes to show. Right. Like again, they have multiple data centers. and even when you’re doing the optimization of the infrastructure, sometimes you just find things that like haven’t been updated. So this this company again, they’re they send emails, they send a ton of emails. And they were only able to do like a quarter million a day. And we were able to now get them up to a million emails a day, which means the end users can use the product more, right? We offer unlimited emailing now as part of the services, so they’re getting more value out of the product. And we’re actually reducing the costs because we move to a different, mailing provider basically within AWS. So it’s just like.
Speaker 4 00:25:37 Going, that’s fantastic.
Speaker 3 00:25:39 Chunk by chunk through the infrastructure stack and understanding, like what can be optimized even just we don’t do anything crazy like hearts. I call it heart surgery when you like replace a database but optimize.
Speaker 3 00:25:51 Yeah. Optimizing SQL queries. Right. Like having someone that understands database tuning. a lot of times that’s just not there in engineering shops. And it’s amazing how much money is just spent on, cloud infrastructure and is wasted.
Speaker 4 00:26:08 Okay.
Speaker 2 00:26:08 So I’ve got, you know, it sounds like, customer support, number one, R&D. Number two, what’s your what’s your third on the big board where you find the best efficiency gains?
Speaker 3 00:26:20 A super easy one. It’s not the. It’s not probably the best, but it’s like the easiest one is, offices. We find real estate.
Speaker 4 00:26:28 Yeah, it’s real estate, right? Yeah.
Speaker 3 00:26:30 I mean, no one really wants to come into the office. I mean, I do miss it. I actually have, workspace now. Same place you’re at. but it’s just to be around humans once in a while. But at the end of the day, when when you’re short on cash and you’ve got a fancy office at a expensive real estate, sorry. Expensive address.
Speaker 3 00:26:51 Do you really need it? Right? I mean, how many people are coming in? it’s it’s an easy expense to drop.
Speaker 4 00:26:58 What are your.
Speaker 2 00:26:59 Companies? Are you able to kind of carve off big, big, big recurring expenses through real estate reductions?
Speaker 3 00:27:07 100% of our companies go okay after we buy them. We’ve been.
Speaker 4 00:27:11 100.
Speaker 2 00:27:11 How you know, is it sometimes, you know, real estate leases are our long term. So, are you able to kind of sublease typically, or sometimes you have to wait 18 months till the next term renewal. Any tricks there?
Speaker 3 00:27:24 We either try to sublease or sometimes it’s just worth paying the penalty to.
Speaker 4 00:27:29 Try to break the lease. To break the lease. Yeah. but.
Speaker 3 00:27:33 Huge cost savings. I mean, that that sometimes is somewhere between 5 and 15% of cost for a company. and just easy money to get back to.
Speaker 2 00:27:42 Do you typically replace it with some, some shared space? Do you or is everyone just go home?
Speaker 4 00:27:48 Everyone goes home.
Speaker 2 00:27:50 And so you don’t. If they want to have a company meeting, what do they do?
Speaker 3 00:27:53 Great. Great question. We do a ton of off sites. Honestly. We, I’m hosting an offsite here in Utah next week for my leadership team. I just had my whole sales team in Montenegro because they’re globally based. And we had it was the easiest place for everyone to get to with direct, like, some semblance of a direct flight. there’s another one coming up, I think, in late March in Chicago. So we just do off sites. But the cost of an offsite is pennies on the dollar compared to.
Speaker 4 00:28:22 Yeah.
Speaker 3 00:28:23 keeping real estate that no one goes to.
Speaker 2 00:28:25 And I bet you it’s really special when you do get your people together. So there’s a little bit more excitement and and positivity there. What about sales and marketing? That’s what we haven’t talked. And I think you mentioned earlier, that’s the one group that you kind of continue to to, want to have longevity in. Right.
Speaker 2 00:28:41 It’s a little different than maybe some of the other categories. How do you treat sales and marketing and go to market?
Speaker 3 00:28:47 Yeah, that’s a place that we’re starting to really delve more into. I so we’ve now built I agents that’s, you know, schedule all of our meetings for us, with incoming leads. we are doing a lot more of our content generation using AI, our SEO optimization, using AI. I know everyone says, like, I can’t do it, and I totally disagree. You you just have to spend. It’s not like a go write one prompt and you’ve already solved the problem. You’ve got to get very.
Speaker 4 00:29:19 Sophisticated work with.
Speaker 3 00:29:21 The way you’re using your AI tools and having some. We have something called brain, Brain Lifts where we write these like guides. So the AI stays within, boundaries of what we wanted to do.
Speaker 4 00:29:34 Right?
Speaker 3 00:29:34 Doesn’t doesn’t just pull like, general information.
Speaker 4 00:29:37 It’s a teenager with hallucinations.
Speaker 2 00:29:39 You have to give it guidelines.
Speaker 4 00:29:41 Exactly.
Speaker 3 00:29:42 so really getting sophisticated with that, optimizing the crap out of our funnels, it is.
Speaker 3 00:29:49 We run an experiment every single week. and everything is measured. Like, if you can’t measure it, you can’t make it better. so.
Speaker 4 00:29:56 We.
Speaker 2 00:29:57 Back up, it’s go to market now. Centralized, or is it still, maybe a hybrid between specialized company and your central team that has some expertise? What’s the what’s the what’s the structure of go to market at a newly acquired company?
Speaker 3 00:30:10 We keep it in the business unit. So it is.
Speaker 4 00:30:13 That stays in the business. You specialize, but you have all.
Speaker 2 00:30:16 These you have all these experiential AI improvements at the mothership that you can implement and coach and, and help with. Is that how it works?
Speaker 3 00:30:26 Definitely. So comes into the commercial commercial side, so into the business unit that I run which is focused on the products within my portfolio. They do span across multiple products, but it’s a lot of rinse repeat, like what we’re going to do for one product you can do for another product.
Speaker 4 00:30:41 Right.
Speaker 2 00:30:42 So you specialize a new technique once one place you can apply it elsewhere because you have this this the other big thing.
Speaker 3 00:30:50 The other big thing we do is like we’ll share our learnings with other business, the other four three business units. Right. So we do like collaborate across each others. But GTM just isn’t centralized at this stage. I think it’s too hard because of the specialization within at the product level. You have to you really have to have some domain expertise at the product level.
Speaker 2 00:31:10 Got it. How about the management level? What if you’re part of the management team? Of a of an acquired company. What what what part of that group do you keep intact. And what are the key elements of people that you that you know, transition to other things?
Speaker 3 00:31:25 depends on the acquisition, but quite honestly, because we do 100% cash acquisitions day one, the management team is released quite quickly. Sometimes we keep a few people around for transition purposes, but it’s rare that management sticks around because we have our own centralized functions.
Speaker 4 00:31:43 Yeah. They plug into your structured.
Speaker 2 00:31:47 matrix management. Okay. That makes sense. And so it sounds like I mean, this business has been around for a long time.
Speaker 2 00:31:52 So this is not an AI driven business historically. It’s an efficiency and operational expertise, value creation hypothesis. But now so many of these areas, not only do you have centralized expertise and operational expertise, but now you’ve got AI. Is this additional benefit? How long has that been going on? And what’s the what’s the eye curve been looking like for you guys?
Speaker 3 00:32:16 Two years probably. It’s been going on back half of 2023. I really started to push it. So 18 months ago and we, we probably two years ago we were at like zero or single digit. I use people were, you know, ChatGPT had just come out. We’re dabbling with it. And now it’s to a point where we’re now measuring, I use per week. We have ways to like monitor what apps you’re using on your computer. And we’re averaging in my functional area, like 60% every single week. About 60% of our time working on our computers, we’re using some sort of AI tool to help us.
Speaker 4 00:32:58 Yeah, I saw.
Speaker 2 00:32:59 I saw you were you were you had a measurement of I utilization. I didn’t know what that meant. So break that down. What does that mean? How are you measuring and who are you measuring and what are they? What are they doing with AI? As an example.
Speaker 3 00:33:12 I’ll, I’ll use myself as an example. So our, the, the tool we use basically grabs sort of screenshots of what you’re doing throughout the day. And it coaches you. the coach is kind of new, but it tells you, hey, like your task switching too much, you should like bundle your time or you’re doing this thing. Did you think about you’re writing this, newsletter? Did you think about how I can help you write this newsletter? So, for instance, I launched a newsletter, I think, at the end of last year to help other leaders with their companies becoming more AI forward. and I, in the beginning, I was writing it by hand, but I’m like, man, this is so time consuming and I can’t come up with stuff now.
Speaker 3 00:33:53 I use various AI tools. I use something called Super Whisper to dictate a lot of what I used to type. And God knows we all type so much every day. Yeah, so I can probably get what’s in my brain out onto, into a prompt in two minutes versus typing for ten, 15 minutes to.
Speaker 4 00:34:12 Write like, yeah, now.
Speaker 2 00:34:12 Now you’ve got you’ve mastered that. Was it hard at first to just shift from typing to talking? Did it take some practice?
Speaker 3 00:34:21 yes. In terms of remembering that I have the feature, like I’ll just start typing. I’m like, what am I doing? This is so slow. but it’s something I’ve always said, like, once this becomes mainstream and it’s very accurate, I’ll be using it all the time. And, my, my team jokingly says, like, I get a commission for Super Whisper because I tell everyone to use it. I don’t, I don’t I think it’s, it’s 250 bucks lifetime. And I’m like, I make that.
Speaker 3 00:34:47 I make that up every hour that I use it. Sure. Right. In terms of efficiency and productivity. But I, you know, I, I dictate we have a tool that we’ve built in house called effort. We’re actually launching it.
Speaker 2 00:34:59 Does it automatically logically organize your sentences. Right. Because as I as I speak, sometimes my stream of consciousness is not the most organized or structured. And whereas when I write, I can kind of see it and then restructure it. Does the does your tool give you the chance, like you just shared five sentences, but you want to rework them or you said something twice now to give you that kind of capability?
Speaker 3 00:35:23 It doesn’t, but it’s easy to just kind of copy paste or edit, you know, if you want to. Okay.
Speaker 2 00:35:27 So it gets the words on the page, but you’re still going to do a little polishing yourself. Is that correct?
Speaker 3 00:35:32 Yeah. But quite honestly often I just use AI to polish it. I don’t sit there okay.
Speaker 2 00:35:37 So I apologize as well okay.
Speaker 4 00:35:39 Absolutely. So you get.
Speaker 2 00:35:42 The first is dictation to get it on the page. And then you could refine using your own brain and AI. Okay.
Speaker 4 00:35:48 That makes sense. Yeah.
Speaker 3 00:35:48 So we built a tool called Efr. it’s only internal use right now. The whole company has been using it for the last few months. It’ll it’ll be external soon, but it’s it has access to every single Lem that’s out there. So everything from ChatGPT cloud grok, Gemini, Lama, you name it. We have 20 lives in it, and now we’ve added the reasoning models in the last month or so as well. So I just go to offer sort of talk what my thoughts are. And I ask Ephram, like, can you make this have some semblance of organization and it’ll take.
Speaker 4 00:36:22 A great.
Speaker 3 00:36:23 Clean it up. I’ve built a style guide to how I want to write, for instance. so like the other night, my head of marketing Ping me was like, I need another round of AI boss.
Speaker 3 00:36:35 And I was like, oh man, I’m tired. It’s 10:00. I want to go to bed, but I gotta get this done. Let’s see if I can do it in ten minutes. And between a stream of conscious of, talking into Efr and I’ve already got it, I’ve got a project set up where it just writes my newsletters based on my format that I spent. I spent a couple of hours building the format out, but now it just sort of puts it into that format. Or I basically talk. I hit go on Efr it takes a minute for it to, like, spit it out, maybe even less. And then I just move it to Grammarly. Do some slight adjustments in less than ten minutes. I’ve got a full like newsletter.
Speaker 4 00:37:12 It’s fantastic.
Speaker 3 00:37:13 All right, all I. In the meantime, this is all. Even as CEO, I monitor my time because I think it’s like I want to see how much AI usage I’m getting. Right. So this is all getting sort of monitored and it gets picked up and I, I can check every day, like what my percentage of time using AI for the week is.
Speaker 3 00:37:31 So like this week I’m like 2,025% for the week, right? but you know, it’s hilarious. It’s 7 p.m. on Sunday when the reports come out in. My whole team is like bragging with each other in one of the chat groups, like, what’d you get? And it’s it’s it’s a competition every week to see who’s got the highest score. But we’ve got people our engineers are hitting 90% AI because they’re they’re using tools to help them code now.
Speaker 2 00:37:56 And I love the fact that you can actually measure the AI usage, and I’m sure you’re seeing it trickle into other your traditional metrics. But that’s that’s the first time I’ve heard, actually the measurement of the actual utilization of the tools, which is great.
Speaker 4 00:38:09 Definitely.
Speaker 3 00:38:09 It’s not only measuring it there, we’re seeing it with the results. Right? We’re getting releases out the door to our customers. We’re solving bugs and problems so much faster. we’re seeing it sort of everywhere. It’s not just, you know, hey, you’re using it 90% of your time.
Speaker 3 00:38:24 Like, there’s so much we’re we’re we’re probably pumping out 4 to 5 times more content from, like, marketing and sales and engineering, and product in terms of like deliverables and releases than we did a year ago, maybe even.
Speaker 2 00:38:41 That’s amazing. So, Cathy, you’re a couple years in now, removed from, you know, single startup to I’m going to I’m going to just summarize what you told me as being in the efficiency factory. What do you know now that you wish you knew back when you were in the chair, helping to guide a startup. And what were some of the biggest lessons you can share with our listeners?
Speaker 3 00:39:07 Don’t be afraid to say out loud that you’ve done the wrong thing, and you need to change the decision you made, right? Like, we all make mistakes, but sometimes people go down with the ship with their mistakes. I see it all the time with the companies we acquire. so don’t be afraid to change. but lead the change management as well. Don’t.
Speaker 3 00:39:29 Don’t be the CEO that just sits in the office and, like, doesn’t come out and talk to the people and doesn’t know what’s going on and doesn’t talk to customers. that’s a big thing. Like 1 or 2 conversations with customers will really help you understand the health of your product, and your business. Then looking at a spreadsheet. Right. So get out there and and.
Speaker 4 00:39:51 Get out there and talk. Yep.
Speaker 3 00:39:53 And, you know, sometimes you’re going to have uncomfortable conversations. People will tell you your baby is ugly and you have to be okay with that. so that’s probably some of the things. The other thing is make make the hard decisions sooner than later. Like, yeah, firing, letting go of people. I wouldn’t say firing, letting go of people is hard because you’ve built relationships with them, you know, that they’ve, you know, got bills to pay. But you sometimes people just hold on too long and then, you know, realize they’re really in a tight spot financially because they’ve, they thought they can make it up with sales.
Speaker 3 00:40:29 Right. And it just doesn’t happen. so fire or fire let go like make your decisions ahead of the curve. Way ahead of when you’re going to need the money. Don’t wait till you need the money to let go of people like you’re too late.
Speaker 4 00:40:43 Then it’s at that stage. Exactly right.
Speaker 3 00:40:46 It’s like a sneaky effect. You know, make your hard decisions ahead of the curve of where you’re going to be in the sticky spot. and that’s hard to.
Speaker 4 00:40:55 Do.
Speaker 3 00:40:55 Right? Because you’re.
Speaker 4 00:40:56 Like.
Speaker 3 00:40:57 You’re an you’re an optimist and you’re like, we’re going to pull through. Everything’s going to be fantastic.
Speaker 4 00:41:01 That’s right.
Speaker 3 00:41:02 The reality is, you know, you might have if you have a best and worst case scenario, you’ll end up somewhere in between, hopefully. But even that won’t get you get you through. So make those decisions. sooner than later, the hard ones.
Speaker 4 00:41:16 And so you have some optionality.
Speaker 2 00:41:18 That makes a lot of sense. Well, Kathy, this is this is great.
Speaker 2 00:41:21 I can’t wait to continue our conversation because I want to continue to learn from you. You’ve learned so much. where does it where can I find your I newsletter? What’s it called? We’re going to find it.
Speaker 3 00:41:31 It’s the literally the I possi. okay, you go to the site, you should be able to sign up. Also, if you find me on LinkedIn, there’s a a newsletter. Sign up also on Twitter at Case Slowinski. Spending a ton of time on Twitter these days, I was I was a little anti it for a long time. I was like, it’s too much information, but it’s another one of those things. If you spend the time and you curate what you’re being exposed to. You can learn a ton of stuff. And I’m constantly out there just learning more about AI and what’s going on and trying to stay on top of the hundreds of developments that are happening monthly.
Speaker 2 00:42:11 Absolutely. That’s great advice. I enjoyed talking with you this morning and, super excited about what you’ve shared with the audience.
Speaker 2 00:42:18 Thanks so much.
Speaker 3 00:42:20 Thanks for having me, Julian. See you soon.
Speaker 2 00:42:22 All right. Take care.
Speaker 1 00:42:26 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 2 00:00:29 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 Retail, me not the San Francisco 49 ers, and many more. This episode is brought to you by 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 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, which also happens to be at the base of a beautiful mountains in in Utah.
Speaker 2 00:01:12 We’ve been at Park City and Alta. And so if you’d like to learn more about either the event or Growth elevated, please check us out at Growth elevator.com. And please subscribe to this podcast wherever you listen to podcasts. Today I am super excited about welcoming Kathy Slowinski to the podcast. Kathy is a turnaround CEO known for transforming distressed software companies into high performing enterprises. As CEO of Jigsaw at Trilogy Software, she specializes in revitalizing companies through strategic AI implementation, process refinement, and she has an ability to consistently achieve 70% net profit margins within a year of taking over a distressed company. Kathy’s track record includes successfully turning around three companies in 2024 implementing AI first initiatives that achieve 80% adoption rates. Her expertise spans both process and product management go to market, creating scalable, profitable business models. Boards and CEOs seek out Kathy for a straightforward approach to company transformations and her ability to deliver measurable results. Let’s welcome Kathy to our program. Slots, Kathy. There you are. Let’s welcome Kathy to our podcast. Hey, Kathy.
Speaker 3 00:02:41 Thanks for the intro, Julian. Good to see you again.
Speaker 2 00:02:43 Yeah, it’s great to see you as well. So, you know, tell us a little bit about, you you’ve been an entrepreneur at a tech company set up by several times, and then you went over to trilogy trilogies, a different type of company. So tell us a little bit about your journey from, you know, being at a tech company and then what you’re doing at trilogy and how the first maybe both influenced your interest and prepared you for the second?
Speaker 3 00:03:09 Yeah, definitely. So I’ve done a lot of growth stage, companies in my past in terms of running product management, typically product management and engineering or product management, and go to market. And, probably about ten years ago, I ended up at trilogy. I was, moving overseas and wanted a role, that was 100% remote. I got recruited in by a friend and totally fell in love with it. It’s the most intense place you could work in terms of.
Speaker 3 00:03:41 There’s always something new happening. you’re sometimes acquiring two, 3 or 4 companies in a single year. You you’re. Wow. Expertise in various domains grows quite rapidly, so I loved it. the thing that I didn’t love was I was living in Australia and the time zones were murdered to try to cross over with the US, so I. I left the company with a plan to come back. And then a couple of years ago, I was working for a startup that was actually distressed, running out of capital. We were trying to sell it and we’re selling it to a company in Austin, Texas, and trilogy’s actually based in Austin. So I scheduled a lunch with, the woman who is my boss now, doctor, and said, listen, I really want to come back. I know you’ve got a CEO portfolio, CEO role open, you know, spend about two hours over a lunch. And by the time I walked away, she was like, what day can we start? Well, depends.
Speaker 3 00:04:36 It depends on the, acquisition. But, came back and just love it. after I actually left the first time, I found myself bored at every other company. And I know that sounds a little facetious to say, but it when you get used to that, that much intensity and change when you’re at a single company doing one thing. you, you know, you fix a bunch of things, and then you sort of sit there and you’re like, now what do I do? So I constantly, constantly found myself going to the CEO and saying, can you, like, give me another department or can you give me a special project to work on? So even after my trilogy years, you can see in my, LinkedIn profile, for instance, I always have like two or 3 or 4 departments at companies instead of just one, one thing, just because I love that, that intensity and things, connect across areas, right. Like product and support are so highly connected. So there was a company I ran both in, came to another company as a GM and then ended up running sales, marketing and product management because again, they’re all highly coordinated between each other.
Speaker 3 00:05:40 And I just found like running it all helps you remove the barriers.
Speaker 2 00:05:44 Sure. So but you’re talking about the intensity of trilogy. But but most people don’t don’t know what kind of company that is. So walk us through.
Speaker 4 00:05:52 Yeah, for.
Speaker 2 00:05:52 Sure is trilogy and how it’s different than an ordinary company and how it gave you those skill sets.
Speaker 3 00:05:58 Yeah. I’ll give you the the Cliff note. Cliff notes edition. trilogy started 35 years ago. It was bootstrapped by a gentleman named Joe Lemont. He built software from scratch, sold, a pricing configuration tool into large companies like Ford, IBM, and, somewhere around the.com boom. He’s like, man, there’s a lot of good companies out there, but they’re running out of cash. They’re making revenue, and we’re really good at operations. Why don’t we start buying these companies? So let’s call it 20 tens, early 20 tens. They started buying companies. Here we are 25 or 15 years later in 2025, and we’ve bought about 150 companies where we’ve and they’re always distressed, pretty much.
Speaker 3 00:06:42 we buy them for cash, you know, take them over day one and basically work on improving their operational side of their business to get them profitable. And our our play is we try to keep them as long as possible. We don’t typically sell the companies. Once in a blue moon, there’s someone comes and gives us an offer we can’t refuse. But typically these are long term hold. We use the cash and you’re.
Speaker 2 00:07:06 Creating you’re creating cash flow with these companies. And they’re probably not cash flow generating when you get them right. So you’re kind of creating alchemy, helping them turn into a cash flow stream. And this I’ve always been interested in this, and I can’t wait to learn more about your business and trilogy, because that’s frankly why SaaS companies get premium multiples, because of the recurring revenue and theoretical high margins. There’s always the theory that, hey, this business should things, you know, should we hit the top of the market or things slow down, we should be able to have a recurring cash flow stream.
Speaker 2 00:07:36 But a lot of the companies in the early stages never get their right because they’re at the at the formation and growth stages, and you are actually taking those same companies, but getting them to that cash flow level, which which is kind of alchemy and I can’t wait to hear how you do that.
Speaker 3 00:07:51 Yeah, our companies tend to be a little bit longer in the tooth in terms of like been around for a while, like let’s say average is 7 to 15 years in terms of operating. But they just get to plateaus where they can’t grow anymore. They’re trying as hard as they can and then they’re burning their cash too fast. So we turn.
Speaker 4 00:08:08 Them. And this is a.
Speaker 2 00:08:09 Trend, right? There’s a there’s a number of companies that are doing this now. Who are some of the who were some of your peers in the, in the tech space that, probably heard about?
Speaker 3 00:08:20 Yeah, probably the best, company and well, best well known company out there is constellation. They’re Canadian company.
Speaker 3 00:08:27 They do pretty much constellation. Yeah. the same thing we do. There’s lots of other smaller boutique ones, but a lot of times we find ourselves up against them in the bid process.
Speaker 4 00:08:37 Got it.
Speaker 2 00:08:38 And you’re you’re on the operations side. Is there another group that’s out there looking at companies and kind of constantly bringing them in.
Speaker 4 00:08:45 And.
Speaker 2 00:08:46 Do they have different? Are you you’re organized by sector or you know, so if the acquisition group is bringing a company in, do they have multiple places to send it or they are. What’s the what’s your structure?
Speaker 3 00:08:58 Great questions. We do have a dedicated M&A group, led by Niraj Gupta. But if you’ve if you got something for sale, reach out to me and I’ll, I’ll connect you with Neeraj. he’s got a small team. Then within Trilogy Software, we have four CEOs. And depending on what type of software it is, and basically our capacity is where we decide which CEO gets, the acquisition. So we have a CEO that that is dedicated to telco only.
Speaker 3 00:09:28 She’s okay, on a, you know, a rampage buying tens of companies, in the telco space, we have two CEOs in the enterprise space, and now we have a CEO that we’ve hired in the services space, specifically around AI services is our our goal here. And he’s building new products as well as acquiring.
Speaker 2 00:09:49 And what’s jigsaw’s focus. That’s your that’s your your group enterprise. enterprise software.
Speaker 3 00:09:54 Enterprise software I do have a couple SME, SMB products, but we are 100% B2B. And the bulk of my portfolio is enterprise.
Speaker 2 00:10:04 And did I, did I? I read it right. You, transformed three companies last year.
Speaker 4 00:10:12 Yes. That’s that’s that’s a pretty impressive.
Speaker 3 00:10:18 Yeah. Thanks. it was a busy year, to say the least. we did probably about $35 million in equities or 39. Sorry. We’ll edit that part out. $35 million worth of revenue purchased through acquisitions. So three small companies, and all of them were negative margins. I think the worst case scenario one was about -40% 40% margin and have turned all of those around.
Speaker 3 00:10:47 They’re all trending towards a 70% or already at 70% margin within.
Speaker 4 00:10:52 Wow for.
Speaker 3 00:10:53 Four quarters.
Speaker 4 00:10:54 Is our is that is.
Speaker 2 00:10:55 That an EBITDA margin?
Speaker 3 00:10:58 It’s a net EBITDA margin. Net margin.
Speaker 4 00:11:00 EBITDA. Yeah.
Speaker 2 00:11:02 And and what’s their growth profile before and after.
Speaker 3 00:11:07 They were not growing their flat okay. So a lot a lot of times these companies that we buy are somewhere in that like let’s call it ten year mark of being operating. And they’ve they’ve gone through a growth cycle. They’ve gotten funding and then they’ve hit the accelerator with the funding, but hit it way too hard and can’t find that next ICP to grow into or. Yeah, don’t have the right, you know, product features to get to that ICP. So they’re trying to build while growing and just tend to burn through their cache way too fast. and often we find they’ve made, like, a decision and sort of don’t pivot quick enough before it’s too late and or don’t make the hard decisions to, you know, revert back to what they’re doing or pivot a different direction or let go of people, or slow things down until they find the right next.
Speaker 4 00:12:06 Yeah, they’re, they’re.
Speaker 3 00:12:07 Happy to sell into.
Speaker 2 00:12:09 They’re burning too much cash looking for growth. And when they get to you then so you’re, you know, you guys are okay with the growth rate. but you’re primarily focused on operations and you’re, you’re going to create the alchemy by improving cash flow. So what’s what’s your general playbook? Do you have a playbook when when a new company comes in, is there a set of standard things you look for to to get your biggest, impact and bang for the buck?
Speaker 4 00:12:34 Yeah.
Speaker 3 00:12:34 Even before with the playbook as part of the acquisition playbook, we want companies that have great retention rates, but we don’t care if their growth is totally stalled. As long as we know we can retain the the existing customer base, we’re willing to invest in the company. Post-acquisition. we do. I mean, we do the hard things that typically the CEOs don’t want to do, which is shed the people. It’s it’s it’s almost always our, our day. One thing, it’s, we call it the doctor.
Speaker 3 00:13:02 Spock and Mother Teresa approach. When you get acquired, everyone is more or less stressed out, freaking out a little bit. They want to know where their future lies, right? And we’re very we try to be very transparent and say, like, the only way to get these companies back to profitability is to cut the costs, right? So there’s usually two main cost centers. One is people and the second is things like offices. Right. Like assets you don’t need. So those are pretty quick to cut. but we’re very transparent with people. Day one we do an all hands we, you know, tell them we we already formulate how much we have to cut to get to a number that’s reasonable to get into profitability space again. We let people know we create a plan and we like we, you know, if we if we have to I’ll give you an example. If we have to cut a third on day one, we let them know and we let them know that that day one, that’s who’s getting cut.
Speaker 3 00:13:57 And if we know we’re cutting another third, maybe after six months, we let them know on day one they’re getting cut. We actually call it pay to quit like we’re one. We say, hey, if you’re not ready for this, you don’t want to stick around. This isn’t for you. We will actually pay you to quit. But either way, you know you have six months to go find another job, and we are totally fine. Look, looking for another role? As long as you help us with the transition into our playbook, into our central functions, into our model. But we try to be super transparent with people because it’s it’s probably the worst thing to get acquired. And just like, not.
Speaker 4 00:14:32 Of course.
Speaker 3 00:14:33 What’s going to happen? Like, are you going to have a job in three months or not? Well, you’ll know that.
Speaker 4 00:14:36 Would be.
Speaker 2 00:14:38 The stress already. A lot of times it’s stress because you’re concerned about this. And then I think if you do some research, you’re going to find out how tight your company operates.
Speaker 2 00:14:47 So of course that’s going to be stressful. So I’m glad to hear you guys are are very forthcoming and open with your employees. But let let me let me ask a question. So there are some some companies and management teams that never get their foot off the gas because they want to grow. Maybe they’re they misjudged the market, but there are plenty that try to cut and find it difficult because they’re small companies and they they need people. What do you do? You have any special capabilities that allow you to cut faster and deeper than the companies on a standalone basis?
Speaker 3 00:15:19 Yeah, to two things. One is we have central functions. We again, we’ve been around for 35 years.
Speaker 4 00:15:25 We yeah. Give me an.
Speaker 2 00:15:26 Example of a central function how that works.
Speaker 3 00:15:28 Support. Right. So we support 100 products with one support team and everyone gets certified on the products. We also use a ton of AI in support right now where we call it deflection rates. I think we’re at like 76% deflection rate on our customer support tickets.
Speaker 3 00:15:43 So that means 76% of our tickets that come in. I can answer in real time.
Speaker 4 00:15:49 The solver.
Speaker 2 00:15:49 Solved without a human.
Speaker 3 00:15:51 Right. We still have a 200 person support team. We’re down to 30 people because of the AI that we’ve put in. So that’s even saved us a.
Speaker 4 00:15:58 Ton of money, which we can then supports.
Speaker 2 00:16:01 One of the best use cases for AI. It’s it’s it’s perfectly right.
Speaker 3 00:16:05 Definitely. so central functions support, finance, even engineering. Like, we have a central support function for our engineering side of the house where they manage all the maintenance and the bug fix. Right. We order.
Speaker 4 00:16:19 We.
Speaker 3 00:16:20 Order humans to to manage it. And now it’s becoming more and more AI, quite honestly. Right. And, the work on.
Speaker 2 00:16:27 Narrow your acquisition funnel though, right? You do you have to have products that are built in a certain way that your centralized R&D team can manage, does that you know that that seems like the other ones make total sense. Support, finance, HR.
Speaker 2 00:16:43 I can I can understand if you if you have scale capabilities there, but I would think that engineering is where people have the most surprise from the outside end, because it seems like everyone’s built their own folly on and their own stack. And, and are you able to really scale when they have different, different tech stacks?
Speaker 4 00:16:59 And it’s part of the architecture?
Speaker 3 00:17:02 As part of the acquisition process, we do a lot of documentation and knowledge transfer, and we try to get everything written down how it works, videos of how it all works. So we don’t ever lose that knowledge and that stays in a knowledge bank. The coolest thing with AI now too, is we can put it into something called the rag. So you can query the rag questions about how things are built. But the answer is no. We have everything from old school on premise software, right? Built 30 years ago in our portfolio that we still do releases on, and we have to keep it up to date because we have hundreds of customers on it, right up to, you know, modern AI platforms, written in Python.
Speaker 3 00:17:43 So we’ve got the gamut of things. There are specialists, people that really get to know the software well within the company, over 1000 people, 1000 people deep. So it’s, you know, we’re okay to have a few people that really know a couple of the platforms. Well, sure, but we don’t find too many problems with different types of platforms because of the knowledge transfer process we do. And then in general, the skill set of folks we hire, we try to. One of the other big things we do is we hire globally all over the world.
Speaker 4 00:18:18 Okay. So you’ve got a.
Speaker 2 00:18:19 Deep team and an efficient team.
Speaker 3 00:18:22 Very efficient. But we don’t play the game of like we’re hiring globally because we want a cheap resource where we take the approach of if it’s a 200 K engineering role. We will find the best human in the world for that 200 K versus constraining ourselves to one geography. and I think that helps as well, in terms of just finding the best talent in the world, and people love working for us and stay with us for years.
Speaker 3 00:18:49 We’ve got people in the company for they’ve been around for ten, 15, 20 years, which is sort of unheard of in technology.
Speaker 2 00:18:55 Yeah, that’s amazing, especially when you know the complexity of what you guys are doing. So tell me, what are what are the big, you know, your top three if this was, Wheel of Fortune or something and we’re saying, hey, your top three efficiency drivers that you consistently see over and over again or Family Feud, what are the top three boxes?
Speaker 3 00:19:14 Top three is clean up the roadmap. Try not to do everything for everyone. Figure out what the core use cases are for the customers who are paying you right now because you want to retain them and work on that. So, you know, we’re you and I were talking about it before the call. You join these companies sometimes. Or you buy these companies sometimes and you see these roadmaps where they’re, you know, six months, 12 months, 18 months of tech debt. And I’m like, who are you.
Speaker 3 00:19:38 Who you tech dating for? Is is the platform falling apart? you know is is it fall over every day? If that’s not happening, then I don’t like sometimes.
Speaker 2 00:19:47 Example what’s an example of tech that you need to do and tech that you can just postpone or not even ever do? Because I think that as a non technical founder, I used to get paralyzed with the, you know, the anxiety of like, hey, the the machine is going to break if we don’t fix XYZ and then it’s just like you described you’ll, you’ll end up six months, nine months of at least commercial inactivity while you’re, you’re, you’re building infrastructure what it feels like. So when is it possible to do that safely and what is it not to say?
Speaker 3 00:20:19 I would say the things that I would cut is the like, let’s modernize the language that we’re using. Let’s use like the latest, hottest version of whatever. You know, if it was written in, I don’t know, Java. Now they want to move to Python or something, right? Don’t don’t do that.
Speaker 2 00:20:37 Like we can support Java. We can we can get the job or.
Speaker 3 00:20:40 Yeah or you. But like we often find by companies who are older languages like dotnet right. Most dotnet developers are north of 50.
Speaker 4 00:20:50 At this stage. It’s hard to find.
Speaker 2 00:20:51 These days, right?
Speaker 3 00:20:52 Hard to find. But the amount of money you’ll spend rebuilding from net net to Python, for instance, you will never recoup in revenue or cost savings later on. Yeah, it’s harder to find people. But with I know I mean I can help. That’s right. You’re you’re non dot net developers learn to use. Net a lot faster. So that’s that’s one that I think is like a huge throw away of money. The other ones that I see is like they built two products and they want to merge them because.
Speaker 4 00:21:24 You know, consolidate.
Speaker 2 00:21:25 The platform the new, to the new. I bet you’re the new platform. Yeah, that’s going to do everything in a better, more efficient way. I mean, if I had a dollar for every time I heard that right, that need.
Speaker 3 00:21:37 And not only consolidate the platform, but like throw a new UX UI on again. Yeah, six months to 12 months plus. Then the users get all cranky because they’re like, can’t find the thing that I used all the time because the workflows change. So to me, those are those always end up in the tech debt. I mean, UX isn’t so much tech debt, but they end up in those like sunken costs that you’ll never see again. The places you’re going to want to spend money on is like security vulnerabilities, right? certifications. Like if there’s if you’re using some flavor of Java behind the scenes, making sure you’re at the you don’t have to be at the latest version, right. Just figure out like the version that’s not going to be deprecated for 4 or 5 more years and you’ve got some room to go, but you get you get people that are insistent, like, we got to be on the newest version of this. Otherwise bad things will happen. And it’s like, what? Bad things will happen.
Speaker 3 00:22:27 so those those are probably the ones I make sure get.
Speaker 4 00:22:31 Done when.
Speaker 2 00:22:32 When, when you go in there and you find you, well, you’re effectively reprioritizing or or narrowing the, the product roadmap. What what scale of reduction are you typically able to make in the R&D, cash flow department?
Speaker 3 00:22:52 north of 50%, maybe even more.
Speaker 4 00:22:54 So you’re actually able to.
Speaker 2 00:22:55 Cut cut 50% cost by just going through with this discipline approach. Let’s let’s not let’s not Replatform let’s not re re re language. Let’s let’s just make sure the product keeps working and you have the, you have the expertise to make sure that it’s going to keep working and it’s going to have appropriate security, like you said, 50% cut there. Right. That’s a big deal. What percentage of the, of the expense base of companies coming in is typically R&D.
Speaker 3 00:23:26 Depending on the company on the low end, probably 30 on the high end, 50 depending on the company.
Speaker 4 00:23:32 there’s.
Speaker 2 00:23:32 15 to 25% cash flow improvement right there.
Speaker 4 00:23:36 Easily.
Speaker 4 00:23:37 Very easily. Okay.
Speaker 2 00:23:38 So other categories, what are your other big categories.
Speaker 3 00:23:40 Yeah. Another area quite honestly is the optimization of their cloud infrastructure. It’s often teams don’t have people like DevOps, people that really understand how to optimize and get the most out of, infrastructure. We’re we’re an AWS shop. And we often see just crazy things like three data center redundancies. And I’m like, when have you even ever had to failover to one data, one other data center? Why? You know, why are we paying for multiple redundancies? That’s one area, over, over like over sizing the servers that they need. and just not the AWS.
Speaker 2 00:24:22 You can have it variable capacity. Right?
Speaker 4 00:24:25 Right.
Speaker 3 00:24:25 And running them at maybe 5,060% capacity versus really working on that. And a lot of times like engineers don’t have a background in infrastructure that’s a.
Speaker 4 00:24:34 Very different skill set. Yeah.
Speaker 3 00:24:36 So not having people in-house that really understand, infrastructure is a big factor where right now, the company that we most recently purchased, we will reduce our we will reduce our AWS bill by 50% by the end of this quarter.
Speaker 3 00:24:51 And we only have the company in end of August I believe. So goes to show. Right. Like again, they have multiple data centers. and even when you’re doing the optimization of the infrastructure, sometimes you just find things that like haven’t been updated. So this this company again, they’re they send emails, they send a ton of emails. And they were only able to do like a quarter million a day. And we were able to now get them up to a million emails a day, which means the end users can use the product more, right? We offer unlimited emailing now as part of the services, so they’re getting more value out of the product. And we’re actually reducing the costs because we move to a different, mailing provider basically within AWS. So it’s just like.
Speaker 4 00:25:37 Going, that’s fantastic.
Speaker 3 00:25:39 Chunk by chunk through the infrastructure stack and understanding, like what can be optimized even just we don’t do anything crazy like hearts. I call it heart surgery when you like replace a database but optimize.
Speaker 3 00:25:51 Yeah. Optimizing SQL queries. Right. Like having someone that understands database tuning. a lot of times that’s just not there in engineering shops. And it’s amazing how much money is just spent on, cloud infrastructure and is wasted.
Speaker 4 00:26:08 Okay.
Speaker 2 00:26:08 So I’ve got, you know, it sounds like, customer support, number one, R&D. Number two, what’s your what’s your third on the big board where you find the best efficiency gains?
Speaker 3 00:26:20 A super easy one. It’s not the. It’s not probably the best, but it’s like the easiest one is, offices. We find real estate.
Speaker 4 00:26:28 Yeah, it’s real estate, right? Yeah.
Speaker 3 00:26:30 I mean, no one really wants to come into the office. I mean, I do miss it. I actually have, workspace now. Same place you’re at. but it’s just to be around humans once in a while. But at the end of the day, when when you’re short on cash and you’ve got a fancy office at a expensive real estate, sorry. Expensive address.
Speaker 3 00:26:51 Do you really need it? Right? I mean, how many people are coming in? it’s it’s an easy expense to drop.
Speaker 4 00:26:58 What are your.
Speaker 2 00:26:59 Companies? Are you able to kind of carve off big, big, big recurring expenses through real estate reductions?
Speaker 3 00:27:07 100% of our companies go okay after we buy them. We’ve been.
Speaker 4 00:27:11 100.
Speaker 2 00:27:11 How you know, is it sometimes, you know, real estate leases are our long term. So, are you able to kind of sublease typically, or sometimes you have to wait 18 months till the next term renewal. Any tricks there?
Speaker 3 00:27:24 We either try to sublease or sometimes it’s just worth paying the penalty to.
Speaker 4 00:27:29 Try to break the lease. To break the lease. Yeah. but.
Speaker 3 00:27:33 Huge cost savings. I mean, that that sometimes is somewhere between 5 and 15% of cost for a company. and just easy money to get back to.
Speaker 2 00:27:42 Do you typically replace it with some, some shared space? Do you or is everyone just go home?
Speaker 4 00:27:48 Everyone goes home.
Speaker 2 00:27:50 And so you don’t. If they want to have a company meeting, what do they do?
Speaker 3 00:27:53 Great. Great question. We do a ton of off sites. Honestly. We, I’m hosting an offsite here in Utah next week for my leadership team. I just had my whole sales team in Montenegro because they’re globally based. And we had it was the easiest place for everyone to get to with direct, like, some semblance of a direct flight. there’s another one coming up, I think, in late March in Chicago. So we just do off sites. But the cost of an offsite is pennies on the dollar compared to.
Speaker 4 00:28:22 Yeah.
Speaker 3 00:28:23 keeping real estate that no one goes to.
Speaker 2 00:28:25 And I bet you it’s really special when you do get your people together. So there’s a little bit more excitement and and positivity there. What about sales and marketing? That’s what we haven’t talked. And I think you mentioned earlier, that’s the one group that you kind of continue to to, want to have longevity in. Right.
Speaker 2 00:28:41 It’s a little different than maybe some of the other categories. How do you treat sales and marketing and go to market?
Speaker 3 00:28:47 Yeah, that’s a place that we’re starting to really delve more into. I so we’ve now built I agents that’s, you know, schedule all of our meetings for us, with incoming leads. we are doing a lot more of our content generation using AI, our SEO optimization, using AI. I know everyone says, like, I can’t do it, and I totally disagree. You you just have to spend. It’s not like a go write one prompt and you’ve already solved the problem. You’ve got to get very.
Speaker 4 00:29:19 Sophisticated work with.
Speaker 3 00:29:21 The way you’re using your AI tools and having some. We have something called brain, Brain Lifts where we write these like guides. So the AI stays within, boundaries of what we wanted to do.
Speaker 4 00:29:34 Right?
Speaker 3 00:29:34 Doesn’t doesn’t just pull like, general information.
Speaker 4 00:29:37 It’s a teenager with hallucinations.
Speaker 2 00:29:39 You have to give it guidelines.
Speaker 4 00:29:41 Exactly.
Speaker 3 00:29:42 so really getting sophisticated with that, optimizing the crap out of our funnels, it is.
Speaker 3 00:29:49 We run an experiment every single week. and everything is measured. Like, if you can’t measure it, you can’t make it better. so.
Speaker 4 00:29:56 We.
Speaker 2 00:29:57 Back up, it’s go to market now. Centralized, or is it still, maybe a hybrid between specialized company and your central team that has some expertise? What’s the what’s the what’s the structure of go to market at a newly acquired company?
Speaker 3 00:30:10 We keep it in the business unit. So it is.
Speaker 4 00:30:13 That stays in the business. You specialize, but you have all.
Speaker 2 00:30:16 These you have all these experiential AI improvements at the mothership that you can implement and coach and, and help with. Is that how it works?
Speaker 3 00:30:26 Definitely. So comes into the commercial commercial side, so into the business unit that I run which is focused on the products within my portfolio. They do span across multiple products, but it’s a lot of rinse repeat, like what we’re going to do for one product you can do for another product.
Speaker 4 00:30:41 Right.
Speaker 2 00:30:42 So you specialize a new technique once one place you can apply it elsewhere because you have this this the other big thing.
Speaker 3 00:30:50 The other big thing we do is like we’ll share our learnings with other business, the other four three business units. Right. So we do like collaborate across each others. But GTM just isn’t centralized at this stage. I think it’s too hard because of the specialization within at the product level. You have to you really have to have some domain expertise at the product level.
Speaker 2 00:31:10 Got it. How about the management level? What if you’re part of the management team? Of a of an acquired company. What what what part of that group do you keep intact. And what are the key elements of people that you that you know, transition to other things?
Speaker 3 00:31:25 depends on the acquisition, but quite honestly, because we do 100% cash acquisitions day one, the management team is released quite quickly. Sometimes we keep a few people around for transition purposes, but it’s rare that management sticks around because we have our own centralized functions.
Speaker 4 00:31:43 Yeah. They plug into your structured.
Speaker 2 00:31:47 matrix management. Okay. That makes sense. And so it sounds like I mean, this business has been around for a long time.
Speaker 2 00:31:52 So this is not an AI driven business historically. It’s an efficiency and operational expertise, value creation hypothesis. But now so many of these areas, not only do you have centralized expertise and operational expertise, but now you’ve got AI. Is this additional benefit? How long has that been going on? And what’s the what’s the eye curve been looking like for you guys?
Speaker 3 00:32:16 Two years probably. It’s been going on back half of 2023. I really started to push it. So 18 months ago and we, we probably two years ago we were at like zero or single digit. I use people were, you know, ChatGPT had just come out. We’re dabbling with it. And now it’s to a point where we’re now measuring, I use per week. We have ways to like monitor what apps you’re using on your computer. And we’re averaging in my functional area, like 60% every single week. About 60% of our time working on our computers, we’re using some sort of AI tool to help us.
Speaker 4 00:32:58 Yeah, I saw.
Speaker 2 00:32:59 I saw you were you were you had a measurement of I utilization. I didn’t know what that meant. So break that down. What does that mean? How are you measuring and who are you measuring and what are they? What are they doing with AI? As an example.
Speaker 3 00:33:12 I’ll, I’ll use myself as an example. So our, the, the tool we use basically grabs sort of screenshots of what you’re doing throughout the day. And it coaches you. the coach is kind of new, but it tells you, hey, like your task switching too much, you should like bundle your time or you’re doing this thing. Did you think about you’re writing this, newsletter? Did you think about how I can help you write this newsletter? So, for instance, I launched a newsletter, I think, at the end of last year to help other leaders with their companies becoming more AI forward. and I, in the beginning, I was writing it by hand, but I’m like, man, this is so time consuming and I can’t come up with stuff now.
Speaker 3 00:33:53 I use various AI tools. I use something called Super Whisper to dictate a lot of what I used to type. And God knows we all type so much every day. Yeah, so I can probably get what’s in my brain out onto, into a prompt in two minutes versus typing for ten, 15 minutes to.
Speaker 4 00:34:12 Write like, yeah, now.
Speaker 2 00:34:12 Now you’ve got you’ve mastered that. Was it hard at first to just shift from typing to talking? Did it take some practice?
Speaker 3 00:34:21 yes. In terms of remembering that I have the feature, like I’ll just start typing. I’m like, what am I doing? This is so slow. but it’s something I’ve always said, like, once this becomes mainstream and it’s very accurate, I’ll be using it all the time. And, my, my team jokingly says, like, I get a commission for Super Whisper because I tell everyone to use it. I don’t, I don’t I think it’s, it’s 250 bucks lifetime. And I’m like, I make that.
Speaker 3 00:34:47 I make that up every hour that I use it. Sure. Right. In terms of efficiency and productivity. But I, you know, I, I dictate we have a tool that we’ve built in house called effort. We’re actually launching it.
Speaker 2 00:34:59 Does it automatically logically organize your sentences. Right. Because as I as I speak, sometimes my stream of consciousness is not the most organized or structured. And whereas when I write, I can kind of see it and then restructure it. Does the does your tool give you the chance, like you just shared five sentences, but you want to rework them or you said something twice now to give you that kind of capability?
Speaker 3 00:35:23 It doesn’t, but it’s easy to just kind of copy paste or edit, you know, if you want to. Okay.
Speaker 2 00:35:27 So it gets the words on the page, but you’re still going to do a little polishing yourself. Is that correct?
Speaker 3 00:35:32 Yeah. But quite honestly often I just use AI to polish it. I don’t sit there okay.
Speaker 2 00:35:37 So I apologize as well okay.
Speaker 4 00:35:39 Absolutely. So you get.
Speaker 2 00:35:42 The first is dictation to get it on the page. And then you could refine using your own brain and AI. Okay.
Speaker 4 00:35:48 That makes sense. Yeah.
Speaker 3 00:35:48 So we built a tool called Efr. it’s only internal use right now. The whole company has been using it for the last few months. It’ll it’ll be external soon, but it’s it has access to every single Lem that’s out there. So everything from ChatGPT cloud grok, Gemini, Lama, you name it. We have 20 lives in it, and now we’ve added the reasoning models in the last month or so as well. So I just go to offer sort of talk what my thoughts are. And I ask Ephram, like, can you make this have some semblance of organization and it’ll take.
Speaker 4 00:36:22 A great.
Speaker 3 00:36:23 Clean it up. I’ve built a style guide to how I want to write, for instance. so like the other night, my head of marketing Ping me was like, I need another round of AI boss.
Speaker 3 00:36:35 And I was like, oh man, I’m tired. It’s 10:00. I want to go to bed, but I gotta get this done. Let’s see if I can do it in ten minutes. And between a stream of conscious of, talking into Efr and I’ve already got it, I’ve got a project set up where it just writes my newsletters based on my format that I spent. I spent a couple of hours building the format out, but now it just sort of puts it into that format. Or I basically talk. I hit go on Efr it takes a minute for it to, like, spit it out, maybe even less. And then I just move it to Grammarly. Do some slight adjustments in less than ten minutes. I’ve got a full like newsletter.
Speaker 4 00:37:12 It’s fantastic.
Speaker 3 00:37:13 All right, all I. In the meantime, this is all. Even as CEO, I monitor my time because I think it’s like I want to see how much AI usage I’m getting. Right. So this is all getting sort of monitored and it gets picked up and I, I can check every day, like what my percentage of time using AI for the week is.
Speaker 3 00:37:31 So like this week I’m like 2,025% for the week, right? but you know, it’s hilarious. It’s 7 p.m. on Sunday when the reports come out in. My whole team is like bragging with each other in one of the chat groups, like, what’d you get? And it’s it’s it’s a competition every week to see who’s got the highest score. But we’ve got people our engineers are hitting 90% AI because they’re they’re using tools to help them code now.
Speaker 2 00:37:56 And I love the fact that you can actually measure the AI usage, and I’m sure you’re seeing it trickle into other your traditional metrics. But that’s that’s the first time I’ve heard, actually the measurement of the actual utilization of the tools, which is great.
Speaker 4 00:38:09 Definitely.
Speaker 3 00:38:09 It’s not only measuring it there, we’re seeing it with the results. Right? We’re getting releases out the door to our customers. We’re solving bugs and problems so much faster. we’re seeing it sort of everywhere. It’s not just, you know, hey, you’re using it 90% of your time.
Speaker 3 00:38:24 Like, there’s so much we’re we’re we’re probably pumping out 4 to 5 times more content from, like, marketing and sales and engineering, and product in terms of like deliverables and releases than we did a year ago, maybe even.
Speaker 2 00:38:41 That’s amazing. So, Cathy, you’re a couple years in now, removed from, you know, single startup to I’m going to I’m going to just summarize what you told me as being in the efficiency factory. What do you know now that you wish you knew back when you were in the chair, helping to guide a startup. And what were some of the biggest lessons you can share with our listeners?
Speaker 3 00:39:07 Don’t be afraid to say out loud that you’ve done the wrong thing, and you need to change the decision you made, right? Like, we all make mistakes, but sometimes people go down with the ship with their mistakes. I see it all the time with the companies we acquire. so don’t be afraid to change. but lead the change management as well. Don’t.
Speaker 3 00:39:29 Don’t be the CEO that just sits in the office and, like, doesn’t come out and talk to the people and doesn’t know what’s going on and doesn’t talk to customers. that’s a big thing. Like 1 or 2 conversations with customers will really help you understand the health of your product, and your business. Then looking at a spreadsheet. Right. So get out there and and.
Speaker 4 00:39:51 Get out there and talk. Yep.
Speaker 3 00:39:53 And, you know, sometimes you’re going to have uncomfortable conversations. People will tell you your baby is ugly and you have to be okay with that. so that’s probably some of the things. The other thing is make make the hard decisions sooner than later. Like, yeah, firing, letting go of people. I wouldn’t say firing, letting go of people is hard because you’ve built relationships with them, you know, that they’ve, you know, got bills to pay. But you sometimes people just hold on too long and then, you know, realize they’re really in a tight spot financially because they’ve, they thought they can make it up with sales.
Speaker 3 00:40:29 Right. And it just doesn’t happen. so fire or fire let go like make your decisions ahead of the curve. Way ahead of when you’re going to need the money. Don’t wait till you need the money to let go of people like you’re too late.
Speaker 4 00:40:43 Then it’s at that stage. Exactly right.
Speaker 3 00:40:46 It’s like a sneaky effect. You know, make your hard decisions ahead of the curve of where you’re going to be in the sticky spot. and that’s hard to.
Speaker 4 00:40:55 Do.
Speaker 3 00:40:55 Right? Because you’re.
Speaker 4 00:40:56 Like.
Speaker 3 00:40:57 You’re an you’re an optimist and you’re like, we’re going to pull through. Everything’s going to be fantastic.
Speaker 4 00:41:01 That’s right.
Speaker 3 00:41:02 The reality is, you know, you might have if you have a best and worst case scenario, you’ll end up somewhere in between, hopefully. But even that won’t get you get you through. So make those decisions. sooner than later, the hard ones.
Speaker 4 00:41:16 And so you have some optionality.
Speaker 2 00:41:18 That makes a lot of sense. Well, Kathy, this is this is great.
Speaker 2 00:41:21 I can’t wait to continue our conversation because I want to continue to learn from you. You’ve learned so much. where does it where can I find your I newsletter? What’s it called? We’re going to find it.
Speaker 3 00:41:31 It’s the literally the I possi. okay, you go to the site, you should be able to sign up. Also, if you find me on LinkedIn, there’s a a newsletter. Sign up also on Twitter at Case Slowinski. Spending a ton of time on Twitter these days, I was I was a little anti it for a long time. I was like, it’s too much information, but it’s another one of those things. If you spend the time and you curate what you’re being exposed to. You can learn a ton of stuff. And I’m constantly out there just learning more about AI and what’s going on and trying to stay on top of the hundreds of developments that are happening monthly.
Speaker 2 00:42:11 Absolutely. That’s great advice. I enjoyed talking with you this morning and, super excited about what you’ve shared with the audience.
Speaker 2 00:42:18 Thanks so much.
Speaker 3 00:42:20 Thanks for having me, Julian. See you soon.
Speaker 2 00:42:22 All right. Take care.
Speaker 1 00:42:26 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.