What It Really Takes to Grow a Startup with Joe Grover, Former CMO of Homie

Guest Introduction (00:01:12)
Julian introduces Jo Grover, highlighting his entrepreneurial background and role at Homie.

Jo’s Career Journey (00:01:56)
Jo discusses his transition from venture capital to joining Homie, a disruptive real estate tech company.

Homie’s Disruptive Model (00:02:10)
Jo explains Homie’s impact on real estate, addressing high commissions and lack of transparency.

Billboard Marketing Strategy (00:03:13)
Jo shares how Homie used billboards to create brand awareness and tell their story.

Real Estate Commission Challenges (00:06:28)
Discussion on traditional real estate commission structures and how Homie aimed to disrupt them.

Homie’s Pricing Model (00:08:20)
Jo outlines Homie’s pricing strategy, offering a significantly lower commission compared to traditional models.

Consumer Perception Challenges (00:09:47)
Jo reflects on the difficulties of changing consumer behavior and trust in traditional agents.

Market Share Growth (00:10:10)
Jo discusses Homie’s rise in market share despite challenges from traditional real estate agents.

Federal Lawsuit Discussion (00:11:17)
Jo mentions the lawsuit filed by Homie against real estate associations and brokerages.

Company Growth Overview (00:12:20)
Jo outlines Homie’s growth trajectory and expansion into new markets during his tenure.

Vertical Integration Strategy (00:13:37)
Jo explains how Homie integrated services like loans and title insurance to enhance profitability.

Creative Marketing Campaigns (00:14:46)
Jo shares examples of guerrilla marketing campaigns used to promote Homie’s disruptive business model.

The Network Effects of Homie (00:15:45)
Discussion on how Homie’s visibility created a flywheel effect, boosting customer acquisition through social proof.

Challenges in Market Expansion (00:16:21)
Jo explains the difficulties in replicating success in new markets and the importance of tailored go-to-market strategies.

Lessons from Market Dynamics (00:18:09)
Reflecting on the challenges faced when entering different markets and the nuances that affected marketing strategies.

The Allure of Growth Over Profit (00:18:27)
Jo shares insights on the dangers of prioritizing growth over profitability in startup culture and its consequences.

The Shift in Investor Expectations (00:18:56)
Discussion on how investor focus has shifted from growth to profitability, impacting startup strategies and operations.

Celebrating the Right Metrics (00:20:13)
Jo reflects on the importance of focusing on profitability and customer service rather than vanity metrics in startups.

The “First 400” Badge Story (00:20:17)
A story about the celebration of employee milestones that masked underlying issues within the company.

Learning from Failure (00:23:42)
Jo discusses the importance of destigmatizing failure in entrepreneurship, focusing on lessons learned rather than just successes.

Entrepreneurs and Identity (00:25:29)
Exploration of how entrepreneurs often tie their self-worth to their business, leading to negative consequences.

The Importance of Objectivity (00:27:09)
Jo emphasizes the need for perspective and objectivity to make sound decisions during challenging times in business.

Navigating the Entrepreneurial Struggle (00:29:16)
Discussion on recognizing when to pivot or quit, and the importance of understanding market dynamics.

Applying Learnings at Amplio (00:31:29)
Jo shares how he integrates lessons from his career and the podcast into his role at Amplio to help other companies.

Introduction to Amplio’s Vision (00:32:00)
Jo Grover discusses Amplio’s mission to reduce the high failure rate of small businesses.

Fractional Leadership Benefits (00:33:03)
Exploration of how fractional leadership roles can enhance business growth and reduce risks.

Challenges in Marketing Practices (00:33:31)
Jo shares the challenges faced in marketing within a well-established company and the solutions implemented.

Support for Entrepreneurs (00:33:56)
Jo expresses his passion for supporting entrepreneurs and building relationships with founders.

Conclusion and Episode Wrap-Up (00:34:15)
Julian thanks Jo for sharing insights and encourages listeners to subscribe for future episodes.

Podcast Closing Remarks (00:34:37)
Final thoughts and an invitation to listeners for more resources on leadership.

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

Speaker 2 00:00:27 Hello, this is Julian Castelli. I’m the host of the Growth Elevated Leadership podcast, where each week we talk with inspirational, inspirational entrepreneurs and leaders in the tech industry. Past guests have included CEOs and CXOs of great companies like Work Front, Healthcare Pathology Watch and Moment, canopy, the San Francisco Funders, and many more. This episode is brought to you by Growth Elevated. We are a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learnings in an effort to help all of us become better leaders. We do this through educational programs like this podcast as well as our blog, and of course, our annual Ski and Tech Summit, where we bring tech leaders to beautiful Park City, Utah to enjoy camaraderie and collaboration in the beautiful mountains.

Speaker 2 00:01:12 So if you enjoy skiing and tech leadership and networking, check out Growth elevated.com. Today, I’m super excited to welcome Jo Grover to the podcast. Jo is a serial entrepreneur. He’s worked in many startups and we’re going to hear about his journey with homie, really innovative tech company that was disrupting the real estate market. And today, Jo is a manager and the CMO at Amplio, where he advises high growth consumer companies. As a fractional CMO, Jo has a rare combination of marketing and finance expertise, and he brings a data driven perspective to the C-suite. As we’ve said, his career spans the leadership roles at home and two venture backed startups, and he’s also the host of a new podcast called The Real F word, which I can’t wait to hear about. Jo, welcome to the program.

Speaker 3 00:01:56 Hey, thanks so much for having me, Julian. I prefer to be asking the questions versus answering the questions, but I’ll make an exception today.

Speaker 2 00:02:02 Yeah. Today the spotlight is on you. So, you know, Joe, you’ve been an entrepreneur, you’ve had an exciting career, and today you’re helping companies with what you’ve learned.

Speaker 2 00:02:10 But let’s go back a story a little bit and talk about one of your companies. I’d like to share, homie, because homie is really had an impact on the world of real estate with a real disruptive model. Tell us about homie, what they did and who their customers were.

Speaker 3 00:02:25 Sure, it was my my most recent full time journey. It’s been about two and a half years since I left homie. But really, to back up a little further, you know, I spent some time in venture capital for seven years and then in two different venture backed startups, and when I moved back to Utah, I met with a bunch of companies, but one of the first companies I met with was was homie, and I had no idea it was a job interview. And I met with Johnny Hanna and Mike Perry, who were the founders, and we started chatting and, you know, they’re like, you know, by the end of the meeting, they’re like, hey, why don’t you come help us build this? It was.

Speaker 3 00:02:53 And I was like, we just met. Like, I knew Mike Peregrine a little bit from my days in venture. You know, I think I started the next week and we were out in New York City raising our seed round, and and so it was it just it happened that fast. Yeah, I.

Speaker 2 00:03:13 Hear.

Speaker 3 00:03:13 You. Listen, it’s a it was a big problem to solve, right? Everyone knew that real estate commission seemed too high and there wasn’t enough transparency. And it wasn’t really a consumer centric kind of market. and then homey had already built a little bit of buzz like there was I mean, they’re, they’re early marketing the, the, the previous head of marketing who was a good friend of mine. Now, like, he did a great job of just like priming the market and grabbing some attention really early on. And some of that was through billboard advertising and some of that was.

Speaker 2 00:03:46 Through, I think Homie’s famous for. Well, let’s do a little digression. So, so Joe and I live in Utah, and the main main road is I-15 15 is kind of like that, that road that goes between San Francisco and Silicon Valley.

Speaker 2 00:03:57 Right? So all the all the tech entrepreneurs and venture capitalists are going in that same road. Tell us, tell us what they did there that really had given you that at least brand awareness at the time, because I remember seeing it as well.

Speaker 3 00:04:06 Yeah, when I joined, they just had a few billboards up, but they had made a decision that they were going to make this bet, and they had we had really small marketing budgets, but they were going to buy three billboards in a row to tell a story. And those three in a row billboards became pretty iconic. They still are. In fact, this this story comes full circle because, and I took over. A big part of my job was how do we continue to, like, generate awareness and help people to understand that there’s an alternative to just hiring maybe your friend or your neighbor, or, you know, a sibling to to sell your house, their real estate agent, and and paying the toll paying the higher the higher percentage based commission.

Speaker 3 00:04:44 And so we were constantly thinking about different ways to, to go to market, both in Utah and other markets, and always thinking about what the next billboard campaign was those three in a row. Billboards we kept for five years. I left in about a year after that. Didn’t renew the lease, and so I got a call from the company. So now I actually have the lease for those same three in a row billboards. And they’re my clients that are on on those billboards. And in a fun twist of fate. We called me as they’re making a comeback right now and said, hey, how do we get back on the three in a row billboards? And so. Wow. Now.

Speaker 2 00:05:19 Now that really is come full circle. And that was a as a fractional CMO, you have this special, you know, break the glass case of emergency asset. You can you can you can work with your clients on.

Speaker 3 00:05:27 Yeah. And we ran them for home for Amplio. And we’ve, we’ve run them for maybe 3 or 4 other brands that we work with.

Speaker 3 00:05:34 And so anyway, it’s been kind of fun. I probably bought more billboards than most people in the state of Utah over the last.

Speaker 2 00:05:40 Well, certainly the most tech leaders, tech tech marketers, right? For sure.

Speaker 3 00:05:43 Well, maybe there’s some injury attorneys that have bought more than I have.

Speaker 2 00:05:47 Yeah, yeah, the billboards are a thing, but just it’s unusual in tech outside of Silicon Valley and at least Utah. Now that I’ve seen it, maybe there’s a few other markets as well, but let’s go back. So. So for the listeners who may not know the story about homie, you know, we’re talking about real estate, one of the biggest industries in the world. We’re all familiar with it. you know, the historical model is you’re paying a 6% commission in the traditional marketplace. They have millions of agents that that’s that’s the business model. They say it’s not a cartel or an oligopoly because it’s supposed to be negotiable. But you guys just put that in the spotlight and and came up with a very disruptive model, if that’s going to cost $30,000 a commission on a typical transaction, what were you offering and how were you able to offer it?

Speaker 3 00:06:28 Yeah, early on, I mean, the price started really low and it was just peer to peer.

Speaker 3 00:06:31 There were no agents involved in the first version of homie. But then as we evolved, we realized that there was still a necessity to have a real estate agent. And and it was never it wasn’t intended to be an anti agent model. It just was intended to be a more efficient model that was agent enabled. And so we actually had a large team of agents, and all of those agents became the top 5 or 10% in the state of Utah because they were doing so much volume. And and what we realized is that the reason commissions are so high is because you have a pretty low barrier to entry to become a real estate agent. And by the way, my sister, the real estate agent, my sister in law is the real estate agent.

Speaker 2 00:07:08 I remember the interesting Thanksgiving when you were when you were joining the disruptive company. What was that.

Speaker 3 00:07:12 Like? Yeah, I just and I really value the work that real estate agents do. I just felt like there was a we felt like there was a better, more cost effective model.

Speaker 3 00:07:20 And so the reason their commissions were so high is for only two reasons. One, and even though they they said commissions are negotiable. Consumers didn’t feel that way. Most agents when they listed your home charged there was a 6% commission. They would share that with the buyer agent from another brokerage that would come. And that never felt negotiable, because if you offered less than 3%, then maybe the buyer agent wouldn’t bring their buyers called steering. It’s against the law, but still happened. And then buying agent buyer agents would say, hey, it’s free to hire me. It’s the seller that pays for it, which is not also not technically true. And so. And then the listing agents. Right. They would typically charge 3%. And that has come down and has come down over time for lots of reasons. And maybe because.

Speaker 2 00:08:00 When, when homey was starting, it hadn’t. Right. You guys probably were a a driver in challenging the status quo.

Speaker 3 00:08:06 Yeah. And our average commission rates were double that of other countries, you know, first world countries.

Speaker 3 00:08:11 That’s the reality is like there were other models in the United States.

Speaker 2 00:08:15 So you had benchmarks but but homey was going to charge what? So I would pay $30,000.

Speaker 3 00:08:20 When I was there when I started in 2018. and I was there for about five years. It was 1500 bucks to list your house.

Speaker 2 00:08:28 That’s huge and disruptive and, like 1/20.

Speaker 3 00:08:32 Yeah. Or one tenth at the time and became 1/20. So. And that that has gone up over time. But $1,500 was that model was really like, let’s create as much value as we can and let’s create as much efficiency as we can. Our agents were W-2, not 1099, so they didn’t have to think about marketing or or sales at all. They just had to do real estate transactions. And so they became really, really efficient. We also applied as much technology as we could to make that process more efficient. And listen, the market was in our favor. We were in a seller’s market. And so we determined, in fact, in a magazine produced by the National Association of Realtors, like they determined that it only took like 7 or 8 hours for an agent to sell a house in the market.

Speaker 3 00:09:14 Well, like when you apply that against the commission, like, you know, we were making the agents in the traditional market with high commissions. We’re making as much as heart surgeons. And we just thought that that was probably there was probably a more cost effective model. And so we pushed that hard. And listen, we did it in a way that attracted a lot of attention. Consumers were compelled by this. In fact, all the time people were like, oh, we love the marketing. We totally agree. Commissions are too high. And then they would go and sell their house and guess what? They would hire their friend.

Speaker 2 00:09:43 Or why was it too risky? Why would they do that?

Speaker 3 00:09:47 I think the relationship, the relationships carry a lot of weight and and not always. We had the number one market share in the state of Utah for a time. on the listing side, because we did capture a lot of market share for a highly fragmented market and with with a really small base of agents, we captured a lot of share in this market.

Speaker 3 00:10:10 Yeah, I think the relationships I think the ground game of traditional real estate agents, I mean, consider this. I had maybe 20 people on my marketing team at the height, 20 to 30 across five markets and their marketing team, the traditional agency, 20,000 agents in Utah alone. And then Arizona probably had 40,000 agents. It’s like tens of thousands of people that didn’t care for me because of their business model and maybe a little bit because of the early marketing, but didn’t care for me because of the business model that were constantly battling us. It was a threat. It was a threat to to the pocketbook, to their pocketbooks. And so that was a really tough dynamic as a marketer to kind of try to combat. So like, I could say whatever I wanted on a billboard or a commercial or a guerilla marketing campaign or in PR, right, or we had studies done by university professors to validate that we were selling houses for more money and and faster. But it didn’t matter because I had, you know, all these people that you trust, all these traditional real estate agents were like, yeah, why would you ever work with me? For various reasons, some some that were valid and many that were not, but that was a that was a really interesting dynamic.

Speaker 3 00:11:17 And in fact, it was so prevalent, the collusion against homie and other disruptors that had flat fee models were trying to disrupt the economic model, that there’s a lawsuit now in federal court, homie, long after I left. Filed a lawsuit against the Association of Realtors and the largest brokerages. Some of those brokerages. I don’t have any inside information now, but some of those brokerages, I believe, are probably settling out of court to try to, you know, brush.

Speaker 2 00:11:44 Well, there’s been legislation. I mean, so, you know, you were attacking a giant oligopoly. It was controversial. You were in the marketing side. So you were you were poking the poking the bear. Oh, you know, that was an interesting experience. And, you know, this is a billions of dollars on the line. So this is this is a controversial thing. It got a lot of attention. And then, of course, you put it right on the billboards, which really got people’s attention. I remember seeing them myself and coming down and talking with you and Johnny and, and you know, so this is real disruption, but it’s not easy.

Speaker 2 00:12:11 Okay. So so you start you said you’re there for 4 or 5 years starting in 2018. You know, give me a sense of how the company grew in that time period. And then we’ll go on to kind of some of the lessons you learned.

Speaker 3 00:12:20 Yeah, I mean, we we started in the real estate model listing houses. Then we had buyer agents to help people buy houses. And we were rebating some of that buyer agent commission because it was already baked in. Right. And so rather than us keeping that, that the listing agent was sharing with with the buyer agent, we would actually give that back to our consumers and let them and let our let remember.

Speaker 2 00:12:40 That you had to use this to buy, you know, some furniture or whatever. Yeah.

Speaker 3 00:12:44 Or buy down or buy down your rate or cover other closing costs. And so on. Both sides were trying to save, save the customer money. And when I started I think we were we were sub $5 million. We probably ten x that or x that over the time that I was there.

Speaker 2 00:12:58 So ten x 8 to 10 x and 4 to 5 years. So it was working right. You guys really? Yeah. It really caught fire for a while.

Speaker 3 00:13:05 There was a lot of things that were working. But like in the spirit of like, you know, you know, complete transparency. Like in Utah, we had market share. Excuse me. We were growing. We had launched during my time, we had launched the mortgage business, and we were saving people money on the mortgage side. And we had launched a title, the title business. And, we actually acquired a title business and then rebranded it. So we had homey title and homey loans, and.

Speaker 2 00:13:28 That sounds like a lot for a young startup to try to manage.

Speaker 3 00:13:32 Yeah, I mean.

Speaker 2 00:13:33 Those are huge industries that you’re picking at a multi-front war.

Speaker 3 00:13:37 But what happened was that $1,500 price point, you couldn’t you couldn’t build a sustainable business on $1,500. But if they also bought with you and then they did their loan with you and we got did their title insurance, and then we did their homeowner’s insurance all of a sudden.

Speaker 3 00:13:50 And what we found is we create way more value through vertical integration and save them a ton of money. And we could make enough money to be profitable. And we were in Utah, but we we expanded out to other markets pretty quickly to try to prove this out. And this was the like capital was flowing and venture was just like, hey, you just need share. Like you’re the most dominant player in this space. There’s there’s all these is highly fragmented. So you had disruptors in all all these different markets. And what we need to do is replicate what we did in Utah, in Phoenix, Arizona and Denver, Colorado and Boise, Idaho and Las Vegas, Nevada. So that’s what we did. So we expanded and that took an incredible amount of capital investment. Right. So you know my team is three people when I start it’s 30 at the height. Right. Like just on the marketing side because we had to have, you know, marketing managers and market right to try to like, we had to really beef up our ground game to try to combat the the onslaught of kind of, you know, negative sentiment from the traditional industry.

Speaker 3 00:14:46 And so it was so it was really an exciting time. We did a lot of things. We won. We did some things that were very guerilla. We ran for Senate in Arizona like home for Senate. It was one, you know, an Adi for the best guerrilla marketing campaign. You know, we’re dropping cash from blimps in Arizona and the Delta Center that said, you know, dropping commissions. You won $1 at a time. Like we were really trying to use creativity like this kind of courageous creativity to to set ourselves apart and to, like, establish awareness around a business model that we thought was better for consumers. And so while that was exciting and fun, like it was not efficient, we were we were still raising money and we were burning capital because of all that aggressive expansion in these other markets. And it didn’t pick up as quickly as it did in Utah. And two things were happening. One is the consumer base in Utah was probably more price sensitive generally. Right? Maybe it’s what I call it, the pioneer heritage of like, who kind of like, established this part of the United States.

Speaker 3 00:15:45 And yeah, we’re there’s also really strong network effects here. So once we started creating shares, people saw us on a billboard. They wanted to save money. And then they listed with homie. Guess what? There’s a For Sale sign, a homie for sale sign, and then their neighbors see that and that social proof. So then we have all these mini billboards across the entire market, and we had really strong concentration. Like there was communities where you drive into a neighborhood and do a third of the For Sale signs, where homie signs that established a really strong flywheel, where we were profitable and growing. Our customer acquisition costs were low in Utah. We were not able to replicate that in larger markets as quickly as.

Speaker 2 00:16:21 This is to kind of almost like a two sided marketplace, you need to have customer suppliers and buyers, and that’s really hard to replicate in additional markets. Right. You have to go one by one. Do you think you would have been more successful if you did one at a time? Or did you know what some of the lessons and.

Speaker 3 00:16:37 I.

Speaker 4 00:16:38 Mean, we did we.

Speaker 3 00:16:39 Did sequence it. I mean, one of the general lessons is like we had pretty sophisticated thinking around which market and how we were going to launch that market and go to market plans and which channels to invest in and attribution. Like we were like, if you would have if we if we shared the plan with you. I mean, it gave a lot of investors confidence. We raised tens of millions of dollars. And the reality was that it wasn’t the it was the that affected us. Like when we got into those markets, there was nuances to the demographics of the market and the and the even the customers were not as similar in Phoenix as they were in Utah. Like we thought. This will translate really well market to market. But there’s also a lot of other dynamics, like for example, billboards were really strong for us in Utah. Well, buying billboards in the southeast valley of Phoenix isn’t really possible because there’s no billboards there. So then you have to like think about the go to market.

Speaker 3 00:17:31 Each market has a little bit of a different kind of media mix and strategy and even different messaging. As we tested messaging, messaging that resonated here didn’t always resonate in Denver, so there was more differences than similarities as we took this market to market. And then it just takes a takes a long time and a lot of investment to build awareness. And so as a small startup, you know, it was difficult to do that with too many markets. I think if I were to go back, I would absolutely have gone.

Speaker 4 00:17:59 Deeper.

Speaker 3 00:17:59 In.

Speaker 4 00:18:00 Yeah. You guys have.

Speaker 2 00:18:01 You guys had great success, but you also ran into some challenges. Looking back, what are the lessons you bring out now that you say, hey, if I could do it again, what? What I might have tried differently?

Speaker 3 00:18:09 Yeah. I mean, I think the first thing is and this was this is a learning that a lot of entrepreneurs have had in the past five years is there’s an allure to keep raising money and keep kind of growing, share and driving topline at the expense of profit.

Speaker 3 00:18:27 And even though we had positive unit economics, which that’s what most investors were looking at at the time. We were not profitable as a standalone business.

Speaker 2 00:18:35 And because you were investing those profits in the growth markets?

Speaker 3 00:18:38 Yeah, we were investing in the growth markets and trying to like capture, share and validate the model. And we were really building the business for the next round. And so many companies have done this, and I’ll just never do it again, like in that way. And by the way, I wouldn’t have the opportunity to do it again in that way because the market has changed. Now investors.

Speaker 2 00:18:55 Has.

Speaker 4 00:18:55 Changed dramatically.

Speaker 3 00:18:56 It’s it’s not growth at all costs anymore. It’s like, oh wait, maybe profitability does matter. And like I always knew that. We all knew that. But as you sit and board meetings and investor meetings and investors are not asking you about profit, they’re not talking.

Speaker 4 00:19:10 It’s all about.

Speaker 2 00:19:10 Growth rate, market share.

Speaker 4 00:19:12 Right. It was.

Speaker 3 00:19:12 Just yeah. And so like growth rate, market share penetration.

Speaker 3 00:19:15 There was signals like what is CAK doing. And let’s look at unit economics in every market. But the reality is like a good business. I mean Homie’s been around ten years. They’re making a comeback now. I’m so happy that the team is figuring this out. But the reality is, it’s like if you have a good product market fit and an efficient marketing engine, then you should be able to drive profitability sooner rather than later. And then you can control your own destiny. But until you do and you’re relying on capital markets, right, which fluctuate. And that’s why.

Speaker 4 00:19:46 They open and close.

Speaker 3 00:19:47 They open and close. And then you find yourself in a tough spot. And I watched one by one, every one of our competitors collapse in other markets, close up shop, go bankrupt. Like all the all that investment in proptech and fintech. Not all of it, but a lot of it kind of went away because those businesses didn’t do the fundamentals of being able to validate that enough consumers wanted that, and they could acquire those customers at a low enough cost to sustain the business over the long term.

Speaker 2 00:20:13 You told me about a badge that said the first 400. Tell us that story.

Speaker 3 00:20:17 Yeah. I mean, listen, when you’re in a venture backed startup, like you’re always just trying to create energy, you’re trying to hire the best people, right? You’re winning awards. Like, there’s all these, like, external pieces of validation, right? You’re on magazine and you’re entrepreneur of the year and this and that, and you’re like, everyone wants to. All the investors are super interested and they want to talk to you. And everyone’s like, oh, you’re crushing it. And everything looks like it’s up and to the right. And you never. It’s never as positive on the inside as it looks on the outside, and it’s usually never as bad on the inside as it feels like some days as an entrepreneur. But I remember we were kind of on a tear in the marketing team. I had really amazing marketing team. Some of them I still work with today there have joined me at Amplio and other businesses.

Speaker 3 00:21:04 I can’t remember whose idea was, but we’re like, hey, let’s let’s create these like badges. And we had these backpacks built from old vinyl from our billboards, and we created these different badges. And then we created some stickers. And I remember walking in and there was a sticker that said first 400, and we had 400 employees and contractors, really. And that was a big number. And like, we were celebrating the wrong things. And I knew it like I saw it. And I knew that things were faltering in the capital markets a little bit. Interest rates were climbing and really like making it difficult for our core customer and our ICP to even buy a house. And customers weren’t selling houses as interest rates rose. And so, like, all of a sudden the markets were freezing on me and I was like, and I feel like we kind of lost some product market fit as as home owners had more and more equity in their house, the savings mattered a little bit less. So we weren’t the pain wasn’t quite as acute.

Speaker 3 00:21:52 And so all of a sudden all these dynamics were happening. We were wrestling with this and then all this. We roll out this sticker or this badge that said first 400. And I just remember looking at that and thinking that this is a this is a bad sign. Like we had gotten out over our skis. I remember talking to Johnny and I’m like, Johnny, like, I’m sorry. I mean, I should have caught this earlier. We should have just we should have never rolled this out. And sure enough, we had to reduce our workforce. We had grown to expand to 15 markets and on the tech side and the operations side and the marketing side. And then when we didn’t raise a large round of capital because the capital market shifted and all of a sudden, you know, there was a lot of skittishness in the market. We had to lay off employees. And that was so painful for me. And it just taught me the lesson, like, let us not celebrate the wrong things.

Speaker 3 00:22:39 Let us celebrate. profitability and delivering quality customer service. Let’s celebrate NPS, but let’s not celebrate awards. let’s not celebrate employee headcount as a measure of success. Let’s not celebrate capital raises.

Speaker 4 00:22:58 Right?

Speaker 3 00:22:59 Let’s celebrate real value creation.

Speaker 4 00:23:02 Those are the vanity.

Speaker 2 00:23:03 Metrics.

Speaker 4 00:23:04 Right?

Speaker 3 00:23:04 They are. And they’re signals. And they sometimes correlate. But like that’s that’s what I yeah, that’s some learning that I think a lot of entrepreneurs in that era have learned. And investors it’s not about about growth at all costs.

Speaker 2 00:23:18 Absolutely, absolutely. Well, it was for a while, but that’s very dangerous, Right. And and cycles, cycles change. So we’re definitely in a different cycle today. But you know you you’ve learned a lot from that. And you’re and you’re taking it forward by by talking to other people. Now you’ve got a podcast where people are sharing those learnings. Tell us a little bit about what you’ve you’ve learned in the podcast. It’s called The Real F-word, which is a little provocative. Tell us about that.

Speaker 3 00:23:42 Yeah. I mean, listen, I’ve had some success and I’ve had a lot of failure, and I just feel like we always talk about the success. Like we look for patterns from other successful entrepreneurs to follow. And I kind of want to look at the patterns of failed entrepreneurs, because those are the patterns that help de-risk are, you know, my next startup, our next startups and our companies. And and so, like the real F word is all about destigmatizing failure and entrepreneurship. It’s about being more raw, unvarnished, vulnerable. So I you know, I’ve interviewed 16 or 17 entrepreneurs now and founders and had some we’ve cried a lot. I think the podcast is kind of like entrepreneur therapy, probably for me, more than it is for them. We just pack. Yeah, exactly. It’s really cathartic. And so we just unpack the whole journey. And then, rather than framing everything in the podcast, it’s like, great. We had this failure and then we learned from it and we sold our next company for $1 billion, which does happen.

Speaker 3 00:24:35 And I love that. Sometimes it’s just failure. So let’s just live in that moment and learn from those experiences and not be so quick to kind of move past it. in an effort to, like, make ourselves feel better about losing $10 million of venture capital or having to fire people we really cared about, we’re losing our houses and our families because of the personal costs of starting a company and pouring our hearts and souls into something that actually didn’t work out in the end. That’s what the whole real f word talks about.

Speaker 2 00:25:07 Yeah. How much? You told me earlier about founders coupling their identity with their business, number one. And then number two, you know, how much do people go in understanding just kind of the odds, right? If 90% of startups fail. Right. But. But everyone’s feeling like they’re going to be the 10%. How does that play out, in your experience talking to people who’ve gone through these experiences?

Speaker 3 00:25:29 I think if you looked across all the conversations I’ve had so far, and by the way, it’s maybe why you did such a great job on your podcast.

Speaker 3 00:25:35 And I listened to a lot of the episodes. And and so if I can get to 100, maybe I’ll have more statistically significant group to, to extract, like the real patterns. But there has been one underlying theme, at least in this first season, and that is as entrepreneurs identify themselves and couple their identity and their self-worth with their company and their startup. It leads to lots of negative consequences. It leads to poor decision making, distorted decision making, and has significant costs in terms of our mental health. When things don’t work out. We we delay Difficult decisions like reduction for us or laying people off that we care about. Sometimes we don’t face the reality that what we’re doing in its current form is not working, and we actually have to quit. And that word has such a negative stigma. But you know, what is more negative is like continuing down a road. And that road will never lead you to the destination. And like and I just see like this idea of like persistence at all costs.

Speaker 3 00:26:44 I’m never going to give up. I’m never going to quit. I’m going to go like go down in a blaze of glory. Like while I. Make this.

Speaker 2 00:26:58 And the people who have had success have gone through the struggle, as we mentioned earlier, too. So. So how do you kind of balance that? Is there is there some advice to, to folks in terms of how to recognize when they’re maybe caught in that struggle?

Speaker 3 00:27:09 Yes. And I love the struggle of Julian. And those of, you know, those of you that haven’t read that. I mean, it was really profound and and I felt that personally. And I see that with other entrepreneurs. I think that what, what it really takes is experience, and it takes experience and objectivity. And most entrepreneurs, when they’re in that moment, they just don’t have that right. They’re like, if this business fails, I fell right. Like, this is like my all my net worth is tied up in this asset. I’ve made all these promises and like rather than facing maybe the hard facts, right? They just keep working harder and even to the point of extreme burnout where they may literally put their lives at risk.

Speaker 3 00:27:49 I had an entrepreneur who literally considered and tried to take his own life because his business was like collapsing around him. And the the moments in my life where I’ve been the deepest and darkest moments of my life have always been tied to some type of professional challenge, and it’s just not worth it. Like our lives are more important than our work. Work is part of our lives, but it’s not our life. And so what you need is objectivity and perspective. And the only way you really get that is like someone who’s already walked that journey, right? So there are these there’s actually coaches that are called quitting coaches, but like, oh.

Speaker 2 00:28:23 Wow, I’m.

Speaker 3 00:28:24 Not. I feel like like as I engage with entrepreneurs, sometimes it’s growth. Like we work with companies 5 to 50 million as fractional executives and we’re helping them grow. But when things get tough, that’s when real leadership is tested and tried and to evaluate what needs to happen to keep this business, to help this business to survive and to help the entrepreneur survive.

Speaker 3 00:28:44 Survive. Sometimes that takes an outside voice. It takes some of that experience to say, come on, this is the wrong road. And you just like I know you don’t believe it, but like, here are all the signals. Yeah. Like it’s like so identifying signals.

Speaker 2 00:28:57 From is what we’re talking about, right. Because when you’re when you’re in that bubble, you can’t see it and you’re not going to get it from your investors. And typically and you know, your employees, you know, aren’t going to aren’t going to tell you that either. Right? So having some objective experience, third party mentorship or or resources that can help you see that, right?

Speaker 3 00:29:16 Precisely. So I think that that can help a lot. And I think this like listening to entrepreneurs, like listening to these, these episodes that you’re recording with entrepreneurs or the real F word. When you start to identify the patterns and you’re like, wait, that’s where I’m at, either personally or professionally, that’s where my business is at.

Speaker 3 00:29:32 Maybe that helps you come to to this like realization that actually deciding, like, we’re at the end of this road and you’ve given it all you’ve got is, is it can also be a noble decision and and not just continuing to like, burn yourself out and like, sacrifice your health and your relationships and continuing to throw good money after bad, like sacrificing your investors money in a pursuit of something that maybe you’ve just lost product market fit, or you never had it right and no amount of marketing is going to overcome that. Maybe it maybe like there’s competitive dynamics have shifted or the market has shifted. And like and when that happens, we can’t go back 2 or 3 years and say, well, yeah, but we were on the the fast 50. Utah business fast 50 or on the we’re I’m the Ernst and Young entrepreneur of the year. So like this is the business. Maybe it’s not the business anymore. Right. And it doesn’t mean you weren’t successful and you didn’t have product market fit. But you have to face those realities.

Speaker 3 00:30:26 And sometimes we’re too myopic as founders and operators.

Speaker 2 00:30:30 Right. And you can’t you can’t turn failure or a challenge into a success in terms of learning until you take that step. Right. And and I think that, you know, it’s just human nature to try to keep fighting and be that hero, that epic struggle. So, you know, I think that’s a great, great lesson that, that, that I’ve been through. And many, many people that I’ve talked to on this podcast in our community have gone through. So having having someone to help you level set and see the objective and also to help you understand that, you know, frankly, if you’re an entrepreneur, it’s part of the journey. It’s a it’s a badge of honor. It’s a stripe. It’s, you know, on your shoulders, you know, the most successful people that we all hear about quite often have got there through many, many steps on a journey that sometimes includes some failure and certainly certainly some some rough spots.

Speaker 2 00:31:14 So that’s I think that’s a profound lesson. I’m glad you’re sharing it on your podcast. Tell, tell, tell me a little bit about Amplio now in terms of how you how are you taking all these learnings from your own career and now the ones you’re hearing from other entrepreneurs? And how are you applying these to help companies through your role in Amplio?

Speaker 3 00:31:29 Yeah. You know, when I when I was at Mercado Partners in the early days, we had raised a couple of funds and we were taking Skullcandy public, and the CFO was a fractional CFO. And I was like, what? We have a fractional CFO helping take this company public. And it was Kent Thomas, the founder of Amplio. It wasn’t called Amplio at the time. It was advanced CFO or CFO solutions. And and it just came full circle. And Kent sold. You know, he’s retired now and sold the business to his partners. And I’m one of those the kind of next generation of partners helping run that business and launch the marketing practice.

Speaker 3 00:32:00 But whether it’s finance or marketing or HR, we even have a turnaround practice when things get really hairy. Right now we’re doing sales tax and business valuation. So we’ve just basically identified like if if you look at the failure rate of small businesses, it’s just way too high. And so the vision for Amplio is like we want to increase significantly impact and increase the success rate of those businesses, help these small medium businesses, these growth stage companies to really not just survive, but thrive. And the way we do that is we plug in that experience, that perspective, that objectivity in a fractional way, because that’s honestly what most of these companies need. They don’t need a full time CMO. They don’t probably need a full time CFO in every instance, but they can really benefit from some of that structure and learning and experience and that just de-risk growing a business. So that’s what I’m doing now. I’m I’m the managing partner over the marketing practice. So it’s been really over the last two plus years now we’ve you know, we’ve helped, you know, 50, probably 50 businesses in the marketing practice and 500 across all of our business lines, to, to figure out their go to market to like build their marketing strategy and plans.

Speaker 3 00:33:03 And then now we’re doing a lot of execution work too, because what I found is, like, once you have it built, there’s so many gaps. You don’t have 30 people on your.

Speaker 2 00:33:11 Team and you can’t you can’t move in increments of one FTE to kind of build these things. So, you know, I’ve worked with amply on the finance side, and I’m excited to learn more about your marketing, because when you can get fractional both leadership and individual contributors, your degrees of freedom grow significantly. So that’s really interesting. I think it makes a lot of sense to add add the marketing, function to the stack.

Speaker 3 00:33:31 Yeah, yeah. And so it’s been it’s been challenging and entrepreneurial and it’s like being in a company that’s been around for 30 years. That’s a great reputation in the market. But the marketing practices has been relatively new. But I have a great partner, Courtney Osborne who’s was at Qualtrics. And we’ve and we have, you know, 15 CMOs that we plug into companies and we have 25, you know, employees now on the marketing side that are helping do everything from like demand gen to creative.

Speaker 3 00:33:56 And so it’s been it’s been a great journey. And I just love entrepreneurship. I love working with these founders. They’ve all become like, you know, dear friends of mine, I just I because I’ve sat in that seat. I respect the sacrifice and the and the grind and the work so much, and I just want to support them along their journey.

Speaker 2 00:34:15 Absolutely. That that is what makes it all worthwhile. Well, Joe, this is a great story. I’m so excited that you’re able to both share your lessons and learnings now with people on your podcast and through Amplio, and I look forward to, continue to learn from you as we move forward in the new Year. Thanks for joining us this morning.

Speaker 3 00:34:31 Thanks so much, Gillian. Happy to be here.

Speaker 1 00:34:37 Thank you for listening to the Growth Elevated Leadership Podcast. If you enjoyed this episode, would you please follow us and subscribe on your favorite podcast player and we’d be grateful if you recommend it to a friend. If you’d like more resources on how to become a better leader in business, we invite you to visit us at growth.

Speaker 1 00:34:53 Com. We’ll be back next week with more insight from another great tech leader. Thank you.