RV221 - My POV and Messaging Framework (to 10x Growth)

Summary

B2B Revenue Vitals: Episode RV221 - My POV and Messaging Framework (to 10x Growth)
Host: B2B Refine Labs (Chris Walker)
Guest: [Unknown Speaker]
Release Date: November 7, 2024

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Introduction

In Episode RV221 of the B2B Revenue Vitals podcast, Chris Walker engages in a deep-dive conversation with a seasoned guest from Passetto, a burgeoning company making significant strides in refining messaging and scaling growth. Unlike previous episodes that featured live audiences, this session presents an intimate dialogue focused solely on uncovering the mechanics behind effective messaging frameworks and their impact on business growth.

The Power of Messaging and Narrative

The guest underscores the transformative power of a well-crafted message, stating, "[...] the hidden, like, 10x weapon for your company is actually your message and narrative" (02:14). Over a mere 27 days in October, Passetto achieved more revenue and pipeline generation than it did in the preceding nine months of 2024. This explosive growth was not fueled by changes in content volume or distribution but solely by a shift in what was being communicated. The guest emphasizes that nailing the message can propel a company from zero to ten exponentially faster than traditional methods.

Shifting Target from CMO to CEO

A pivotal revelation discussed is the strategic pivot from targeting Chief Marketing Officers (CMOs) to Chief Executive Officers (CEOs). Initially, Passetto presumed CMOs would be their primary customers. However, over time, it became evident that CEOs or Chief Revenue Officers (CROs) were the true decision-makers capable of implementing substantial changes. The guest remarks, "[...] the CMO can't fix the problem, they can help the company see the problem, but the CEO or CRO actually has to fix it" (04:10). This shift allowed Passetto to reframe its messaging, leading to a more profound resonance with their actual decision-makers.

The Role of the CEO in Pipeline Creation

The conversation delves into the critical role CEOs must play in understanding and driving pipeline creation. The guest asserts, "if you as a CEO [...] do not fully embrace and understand both the power and the underlying mechanics of how marketing and pipeline creation actually work, you're going to put your company at a massive disadvantage" (09:45). By reframing the problem and engaging directly with CEOs, Passetto could accurately quantify pipeline issues and offer targeted solutions that extend beyond traditional marketing efforts.

Volume and Iteration in Content Strategy

Emphasizing the importance of volume in content creation, the guest compares it to exercising: "It's like going to the gym once a week or seven days a week, who's going to get in shape faster?" (06:59). Consistent and frequent content output accelerates the feedback loop, enabling faster refinement of messaging. This approach contrasts with the gradual 18-month process experienced at Refine Labs, highlighting that higher content volumes can lead to quicker insights and growth.

Challenges with Traditional Marketing Attribution

A significant portion of the discussion critiques conventional marketing attribution models. The guest likens measuring the ROI of individual marketing components to "asking somebody working at a car manufacturer whose job is to put the tires on the car" (33:35). Traditional attribution focuses on micro-level metrics, often neglecting the overarching pipeline creation process. This misalignment leads companies to fix minor issues while the larger, more impactful problems persist, impairing overall growth and effectiveness.

Building Companies Without External Capital

Exploring alternative growth strategies, the guest advocates for building companies without relying on external capital. They argue that focusing on delivering actual results to customers can sustain growth organically. "[...] know that one company can be a stepping stone to another one. Just like a real estate investor thinks, I'll buy this 10 unit apartment and I'll hold it for a couple years" (47:41). This approach not only preserves founder equity but also fosters a sustainable business model centered on customer success and operational excellence.

Creating an Effective Feedback Loop

The guest highlights the significance of a robust feedback loop in refining messaging and strategy. By engaging directly with customers, especially CEOs, Passetto could receive actionable insights that informed their messaging framework. "[...] the biggest issue is a pipeline problem [...] how do we set marketing up to use that budget to move these KPIs" (16:07). This continuous interaction ensures that the company remains aligned with market needs and can swiftly adapt its strategies to address emerging challenges.

Conclusion and Key Takeaways

Episode RV221 offers a compelling exploration of how strategic messaging and executive-level engagement can drive exponential growth in B2B companies. Key takeaways include:

• Message Over Metrics: Prioritizing the refinement of messaging and narrative can serve as a powerful growth lever.
• Executive Engagement: Targeting and engaging CEOs or CROs ensures that solutions are implemented at the highest strategic levels.
• Content Volume: Consistent and high-volume content creation accelerates learning and message refinement.
• Holistic Pipeline Management: Focusing on the entire pipeline creation process rather than isolated marketing metrics leads to more sustainable growth.
• Sustainable Growth Models: Building companies without excessive reliance on external capital fosters long-term stability and founder equity retention.

The episode serves as a valuable resource for B2B leaders seeking to understand the intricate relationship between messaging, executive strategy, and sustainable growth.

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Notable Quotes with Timestamps

• 02:14 – Guest: "the hidden, like, 10x weapon for your company is actually your message and narrative."
• 04:10 – Guest: "the CMO can't fix the problem, they can help the company see the problem, but the CEO or CRO actually has to fix it."
• 06:59 – Guest: "It's like going to the gym once a week or seven days a week, who's going to get in shape faster?"
• 09:45 – Guest: "if you as a CEO [...] do not fully embrace and understand both the power and the underlying mechanics of how marketing and pipeline creation actually work, you're going to put your company at a massive disadvantage."
• 16:07 – Guest: "the biggest issue is a pipeline problem [...] how do we set marketing up to use that budget to move these KPIs."
• 33:35 – Guest: "asking somebody working at a car manufacturer whose job is to put the tires on the car."
• 47:41 – Guest: "[...] know that one company can be a stepping stone to another one. Just like a real estate investor thinks, I'll buy this 10 unit apartment and I'll hold it for a couple years."

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This summary encapsulates the core discussions and insights from Episode RV221, providing listeners with a comprehensive overview of effective messaging strategies and their profound impact on B2B growth.

Transcript

[Chris Walker]

You're listening to Revenue Vitals with Chris Walker. All right, Chris. So this one is a little different from the normal ones we've been doing. So to date, basically, I think we've done three or four sessions. All of those have been live. This one is just me and you. And I figured.

[Unknown Speaker]

Sweet. I thought we were gonna have an audience. Okay, cool. Yeah, yeah.

[Chris Walker]

Just me and you.

[Unknown Speaker]

Nice.

[Chris Walker]

Just me.

[Unknown Speaker]

Shop.

[Chris Walker]

Yep. And I want to go deep on a few things, and for everybody who doesn't know, so Chris and I work closely together. We handle all of Chris's content. And one of the things that you have hit on recently with Passetto, sort of, I would say, newer company that you're running is really nailing, after 10 months or so, some of the messaging and points of view that you've evolved it into. I think you've always had the foundation of really, like, the insight of why you created the company and sort of the direction that you would take it. But it seems like the developing the. The point of view over the last 30 days, 45 days or so, has really taken a. A positive turn, and the market has responded. So. And I think that this is very related to what we talk about on our show and with all my content is like, content strategy. And so the question here is, like, how can we develop our points of view in a way that resonate with the market and then can be transferred into our messaging everywhere? You know, in terms of website marketing, collateral content marketing, all of that, and using the content strategy to, number one, inform those points of view, and then, number two, then have the railways to get that message out? So there's a lot we could go into there, but I think maybe first, do you just want to set a little context on, like, kind of those insights of, like, the last 30 days or so and how that refinement of the points of view of messaging has gone for you?

[Unknown Speaker]

Well, here is the massive insight for people, which, if I can distill it down, it's that the hidden, like, 10x weapon for your company is actually your message and narrative. And so just in the month of October so far, and the month isn't even done yet, at my company, Passetto, we've booked and closed more revenue and generated more pipeline in the first 27 days of October than we had the rest of the fucking year. The entire year of 2024. That's nine months. And we did more in 26 days of October than we had in the first nine months of the year in terms of revenue and pipeline. My content mix and distribution has not changed at all. I produce the same amount of podcasts every week. I put them on LinkedIn, they go on other channels. The content and distribution mix and volume has not changed at all. The only thing that's changed is what I'm saying. And when you're able to nail that, that becomes the thing that gives you this big growth from 0 to 10. And I believe maybe the impact is less dramatic and fast, but you could have the almost the exact same reinvention at a hundred million arrangements by really nailing it. And so that's been a huge learning for me. That is pure data and almost an unarguable conclusion around the fact that what you say is actually the most important thing inside of the content. Now I want to talk through a little bit of the process around how you get to this because the first time I did it at my company, Refine Labs, it took me around 18 months to get to this, like dialed in, say something, it resonates with the market, they feel the problem, they take action. And that in this time my new company posetto. It's taken me about eight months and a couple of the key insights that I've learned because I can talk through the tactical process. But let's talk about the key learnings that people should take away that are non obvious. The first one is who you get your feedback from drives your company strategy. And there are a lot of companies that get their strategic feedback from customers, from the wrong customers, and then that drives how they build their product, what go to market motions they run, how they invest in marketing, how they message around the problem and the level of stakeholders inside of the company that the company solves for. And all that stuff gets driven. And if it's driven by the wrong person, then you end up building the wrong company. And so you're not going to know that overnight I went into this game at Passetto thinking that the CMO is going to be our target customer. And after 10 months I have learned that as powerful and capable as a CMO could be, they do not own the full go to market. It's either owned by the CEO or the Chief Revenue Officer, depending on the Oregon reporting structure. And the CMO can't fix the problem, they can help the company see the problem, but the CEO or CRO actually has to fix it. And when I made that shift, immediately you see the problem differently, immediately you message the problem differently and immediately you can quantify the problem differently. And I think it's actually the level of Understanding the details of the problem at such a level that you can explain it better than your customer and usually differently than how the market is currently explaining it. Because if the market was explaining it well and it worked, then people wouldn't have the problem. And so I think as a first step, I think people reach so far, like, I want to build an AI company. Right. Instead of thinking, what is the problem that I will solve with AI? And so I think that that discipline around that process can be hugely impactful as well. So make sure you're getting feedback from the right person. You might not know who the right person is. When you start your company, you have to be able to iterate and learn and that the message that you say in your content is actually the most important thing. It's the same thing when I talked about advertising in 2020 and 2021. As good as your targeting can be, as good as everything else can be, if you say something that the person that's consuming the ad doesn't care about, the ad was worth nothing. It did nothing. And same thing if you go and make a speech. If you pay $50,000 to your CEO to make a speech at a conference and you make a speech and it sucks, and everybody walks out and says, I didn't learn anything, what was that $50,000 sponsorship worth? It's the message that really, really matters. As I continue to get more wisdom, should I say like, more experience, more wisdom around this, around. And we talk about volume on this podcast. And I believe in volume a ton. And all that you do when you do more volume, as long as it's done in the right way, is you accelerate the process to getting to the end.

[Chris Walker]

Yep.

[Unknown Speaker]

It's like going to the gym once a week or seven days a week, who's going to get in shape faster? And so that's the same thing when it comes to the podcast. And just I guess that's maybe a reason why it took Refine Labs longer, because I didn't start the podcast until a year into the company and then we really started to have the traction about a year later, a year into the podcast, and I didn't do as much volume or other things. So that just increasing the cycles is a massive way to get the insights faster and get to the end. It's never an end. It's an ongoing road. And sometimes I don't like giving advice in this topic because it's so art. This is an artistic skill. People that are able to do it really well. It's like painting $1 million painting or even more than that. The value of it can be so good when it's created the right way. And so sometimes I don't like giving advice on things that really, really are more art than science. But I can talk through the things that I've learned and the things that I've gone through so far.

[Chris Walker]

Exactly. And I think it's like, it's also just really focusing on how important it is. It's like you could have the best content execution, but if the actual fundamental premise of the topics you talk about, how you talk about them, the way you champion the problem, like if those aren't framed in the way that's resonating or differentiated, it's not going to to your point, like the compass analogy that you use a lot with Passetto, like you're going to be 25 degrees off from where you ultimately want to end up, if not more so. I think just like even just reminding people about this is like before we get to the tactics and the platforms and the channels and all of that, like we at least have to have some sort of premise around this core point of view messaging framework.

[Unknown Speaker]

And so, yeah, well, here's the thing, is that that CEOs know that they need to understand sales. They know that they need to be able to run the P and L and understand the finance and understand what's going on the balance sheet and things like that. They know that they either need to understand the product or find somebody that is so good at product and they leave this thing called marketing over here and they have, then they don't even care to learn enough about it. And the insight is that if you as a CEO over the next one to five years, do not fully embrace and understand both the power and the underlying mechanics of how marketing and pipeline creation actually work, you're going to put your company at a massive disadvantage. And for many companies it is the most expensive, important problem. And so as a CEO, you have to be able to identify what is the most expensive, important problem, slash opportunity inside of our business. And then how do I drive it forward? How do I understand, understand it enough so that I can drive it forward. It's that valuable. It's that important. And before it was sales and sometimes it's technology and product and other times it's this. But a lot of the times right now it's pip. I don't call it marketing anymore. I call it pipeline creation, which can include strategic marketing, revenue oriented marketing, business development and other investments, which through this.

[Chris Walker]

Process that you just went through of refining your understanding of the problem and your own messaging around it. This pipeline creation framework has been developed and this is one of the new, you know, the new things that you're championing and bringing out exactly to our point here. So.

[Unknown Speaker]

So the crazy thing is that the product was already done.

[Chris Walker]

Right?

[Unknown Speaker]

Right. So the product was already done. Now it is just reframed to a different stakeholder with a bigger problem.

[Chris Walker]

Yes.

[Unknown Speaker]

And so that is a crazy insight on its own too.

[Chris Walker]

Yes.

[Unknown Speaker]

Yeah.

[Chris Walker]

So let's go through that. I mean, if you want. As much as you want to, like, what was your process for? Of course, like, you had the content engine built, so that was able to inform a lot of it, I think, and we can go into that. But you also were having external, you know, private conversations or, you know, with customers or non customers, things like that. Like, what was your process going from I'm selling to a CMO and I'm saying this to now I'm selling to the CEO and I'm saying something else.

[Unknown Speaker]

Let's cut to the chase, because we've been cooking for a while here. Okay? So from May forward, if you look at our NRR and customer success ratings, the companies that start with the project with the CEO are off the chart. They expand fast with us, the whole company's happier, and they're generally more successful and get better results. And when it comes to the cmo, we get pushed down to a VP or director and the project gets stalled because marketing can't fix the problem. And so you don't have this flywheel of expansion and results and things like that. And it's. Again, it's. And so it's as simple as that. Like we saw, we went through the project, we have whatever. We've gone through maybe 25 companies, and the ones that have been led by a CEO are there are clearly the most successful customers from all different facets and angles.

[Chris Walker]

And so does that mean the CEO is inbounding to you all or they're.

[Unknown Speaker]

Just the first couple? Yeah, the first couple were. Hey, I've been listening to your podcast over a phone call and I thought this was pretty interesting. And I want you to speak with me and my CFO about, like, going through this process with you. Because we weren't out there fishing for CEOs, right. Like, I thought we were still like, this is. Marketing is going to own this. And then. So you get that. You put the content out. Right? If there's no content out with no message, that CEO never hears the content, never Comes inbound, you never get the learning, which is why the process is so valuable. But then once you have that, you can basically just especially in the early stages, you can literally qualitatively dissect the success of your customer, how you're multi, threaded, how much quantitatively, how much they're expanding the metrics, improvements that they're getting, how fast it's happening, and you can really have that dialed in.

[Chris Walker]

And when are you having conversations to like qualitative conversations to also then pair with those quantitative insights on the success, you know, metrics and stuff like that?

[Unknown Speaker]

I'm involved in every one of the projects.

[Chris Walker]

Yep, exactly.

[Unknown Speaker]

I'm the one pitching the, the CEO, the million dollar expansion to fix their $250 million pipeline problem next year. So, like, yeah, and it's another learning as an entrepreneurial CEO. Like, you have to be in there. This is not outsourceable. You have to be working with the customers. You have to prove the expansion process works and that your product and offering and pricing work. You have to prove that your messaging works, both in a sales conversation and at a narrative level. You have to use the product just like your customer would. And I think that that level of care and attention to detail, like, I'm not an attention to detail person, but when it comes to the, the way that I do it, like I said, is more like art. So I am very attentive to the details, but how I get there doesn't feel very scientific to people.

[Chris Walker]

Yeah. And okay, so you looked at that. You had quantitative data that were saying these customers are getting the best results. Not only they're getting the best results, but we're able to do our best work for them as well.

[Unknown Speaker]

Oh my God. That's a huge. It's like, it's. That one is like, you can see the team when they work on this set of the 50% of customers that get led by a CEO and then my exact same team, including myself, working with the other companies where it's typically led by marketing. It's not a hate on marketing. It's just the reality of our business right now that it's just way more fun, way more engaging, way more growth. Your ideas actually go into practice when we work with those customers and the other ones. It's a slog for the most part. And so it's another interesting variable of as a signal that isn't business related necessarily. It's just who are the customers that you like to work with?

[Chris Walker]

Yep. Yeah, 100%. And what then was your process of evolving from there that insight, the messaging, you know, for example, like I know you, obviously the insights didn't stop. You know, you had those initial probably kind of assessments of it and thinking, but like, at some point you actually have to switch over the messaging. What prompts you to feel confident? Like, what were those things that made you feel confident? This is in fact the right move to make rather than anecdotal, in isolation, some, some random examples and stuff like that. I mean, it's a big move, It's a bold move.

[Unknown Speaker]

So, so the thing that I've learned is like, change your narrative, not your product marketing. Don't change what your website says unless it's detrimental, but usually it's not. It's just like not 100% fully clear. Change your narrative first. Let it push through, run the sales conversations, Let the customer communicate their problem. You present the solution, you prove that it works, then you start to make improvements in the product marketing, the website. I think it's a crazy hack. You have a super risk free way to test messaging. And so there are other tools that you can use for messaging tests, which I support as well. But this is just a. I just think it's a crazy advantage.

[Chris Walker]

And so that narrative then is getting.

[Unknown Speaker]

Pushed through where you're testing that podcast, LinkedIn events.

[Chris Walker]

Yep, content. The two Cs. Content and conversations, basically.

[Unknown Speaker]

Oh, and sales and sales conversations and expansion. Renewal conversations. Good point.

[Chris Walker]

Yeah, exactly. And so then what you're looking for then is that like overwhelming positive reinforcement, sentiment, outreach.

[Unknown Speaker]

It was like kind of like a perfect storm. Okay, so on one side, we have these customers that started with us in July, but now have been through the cycle of two or three months with us, have seen what we can do. We have a plan to make the impact. We have the trust with the leadership team. You get those expansions and then like a week later, the Pavilion conference is in Austin, just in my backyard. And like the perfect time. And you have all these go to market leaders, CROs, CEOs, CMOs, Rev Ops, 500 or more of them in this room. And you can start talking to people and you just have everyone saying, we have a pipeline problem. And the undertone sentiment is we don't know how to fix it. I don't have confidence that our CMO can, as a CRO will say, I don't have confidence. They won't say it. It's an undertone. I don't have confidence my CMO can fix this problem. And they're also saying I don't have Confidence that I can fix the problem. Right. So those are some of the things that are going on. So I. You have that because at the top level the message was you need to view your whole, you have to look at your whole go to market holistically, which I totally believe in. But then once you look at it holistically, it breaks into new logo and expansion pretty clearly. And so you can look at those, you need to know GRR and NRR to plan marketing. But the whole point of looking at it holistically is to optimize the pipeline creation process. And so it's a reframing. You focus in on the problem that people truly have and communicate that you're built to solve. Are we going to help a company fix their GRR from 70% to 90% over two years? No, we're not. And so it's important that if they have that problem that they know and they fix that problem instead of trying to fix the hiring us for a million bucks to try to fix their pipeline problem. Right. So it's an important step of just diagnosing what the problem is that I think some, a lot of companies struggle with. So we can help with diagnosing the problem. And then if the diagnosis is that you have dysfunction within your pipeline creation process leading to low roi, missing pipeline targets, sales team is starving, lowering forecast, sometimes marketing, still celebrating that they're hitting their plan. If you have that level of dysfunction in your pipeline creation process that can be measured quantitatively with a metric, then you can calculate how much is this costing us every quarter that we don't solve it, which is extreme for a company. And then you can decide is it worth it to spend a million dollars to try and fix this $50 million per quarter problem or should we just roll the dice and let our team try to fix it for the third.

[Chris Walker]

Time this year on the second or third leader trying to fix it as well. Okay, let's take that example at the Pavilion conference. When you're in those just one on one conversations or group conversations and you're, you're wanting to learn these things, like you're wanting to hear how they are framing their own problem and things like that, how are you actually, you know, going about those conversations? Are you prompting them with questions like open ended or direct or like, I know it's, you know, this is like.

[Unknown Speaker]

It'S an art of conversation.

[Chris Walker]

But like this is, this is actually like where you get these insights. So I think it's really important to not seem too self serving in these either like you're trying to pitch them something or sell something. You want to get the real information.

[Unknown Speaker]

Yeah, it's something that I've learned how to master and most of the time it works. Sometimes it comes back to bite me if I'm being honest. But I think net net, it's a positive thing, is that I'll say something that I don't necessarily believe in order to feel their reaction. It is a non verbal reaction. And so I'll say something which ends up being my hypothesis. Like it feels like companies, most of the companies that I work with like can't figure out how to do X, Y and Z. And someone might say, actually we have that figured out, we have a fucking pipeline problem. Right. And so as long as you don't get the confirmation bias, it's a great way to tease out is what I'm saying. Something that people respond to. And then you do that a couple times. So I was saying our previous message, right. And people are like, actually that isn't the problem I have. This is the problem that I have. Here you go. Yes. And it's more or less them reframing the same problem in their point of view.

[Chris Walker]

Super smart.

[Unknown Speaker]

And so then they give you that back. You hear that four, five, six times from people that work at the 500 person private equity owned company. That's your exact target customer that feels the problem, that it costs them a ton of money. And then you can start to narrow in. It also helped us narrow in on the segment of customer that we want to help just by quantifying the problem. Right. If you're too small then the problem is not the magnitude of the problem is not large enough to pay us to fix it. Yeah, right. Yeah, yeah. And maybe we'll build a down market offer. But right now there's plenty. We have eight customers and there's 2,000 in the US and we're going to focus on that segment first.

[Chris Walker]

That makes sense. That's a really, really practical takeaway there. So let's talk about then like how you're using the content process. Because like I think the question here, and this is probably similar to what you realize just with Patto and who you're marketing to in general is like who do you believe should own this process? I mean we could product marketing CEO.

[Unknown Speaker]

Like the person who owns the long term company strategy is one way to put it. Another way that I would look at it is the person that is the majority shareholder if they're operational. So you could look at it in both Ways like for a lot of companies it's the same person, right? Yes. The CEO owns long term strategy and is also the majority shareholder unless they raise a bunch of institutional capital and dilute themselves over time. But usually at the beginning it's the same person. So that is who I think. I watch companies outsource this to an external evangelist or their VP of marketing and then it's just an interview show of interviewing people in the market, promoting somebody else's perspective, not your own company's perspective, not getting the overall learning. And it's purely a promotional tactic, not a strategy. And when used the right way, it's actually the fuel that drives the company's strategy. A combination of having this message to the market broad where seriously, if the message hits and a CMO believes that they have the problem and they believe that I'm right and they can't fix it themselves and they forward it to the CEO and they make a case for fixing it, it's like it's in the bag, you know what I mean? Like that is how the content process overall works.

[Chris Walker]

So yeah, so it's not necessarily even then to you about access to these conversations as well, like literally market research through the mechanism of the content while also you know, audience building, promotional develop, articulating your own points of view and stuff like that. But like having conversations with ICP through the content.

[Unknown Speaker]

I'm smiling for those of you that aren't watching the video because if you're me and you do it right, so if you're the CEO and you do it, you can feel it. You could feel it. It fundamentally changes. There's a momentum behind you. More people want to talk to you, more people want to work at your company. When you get the narrative right, people feel it, smart people get it. They say they're ahead of the game, they understand the problem differently, they know what's going on, they see where the future is going. And then you feel you get messages from people that want to work with you, they get messages that want you to consult with them. You get messages of people that want to join your company because they think that you're right. And so when you get it right, you can feel it almost immediately.

[Chris Walker]

What would you say to the CEO? Let's say they meet those two criteria, know they own long term strategy and, or their majority shareholder. And this is a very common pushback, especially at a certain scale of like someone owning the, the content, owning essentially like the face of the content brand. Because the one of the reasons being the value that you and I are talking about right now is that they don't have the time for it. How would you frame the overcoming that objection? Essentially because like, obviously you're missing out on number one, the feeling of your message resonating and then number two, that then being able to be transferred into every other part of the company. And so like you've got teams who are, let's call it $50 million in revenue. And they will have really credible people on their team, like subject matter experts and things like that, who are the face of the content brand, which I do think is a strong play. But like the question for this particular piece of it, the point of view and the messaging framework and the feedback loop, like how important do you think it is for someone who's sitting in that seat to actually be the face of the content brand?

[Unknown Speaker]

For that reason, at the highest level, I think that the way that we build companies will change is changing. It's changing before our eyes. And I've remained committed to the strategy that I took originally and I believe that a lot more entrepreneurs will take it. And I've made this argument so many times philosophically around it, but I'm going to make it with real numbers. Okay. As the owner of this company and, and the most powerful thing that you can do to get customers, understand your market, accelerate growth and things like that is this process. Because this process involves doing everything. It's not just the content. It's doing the sales calls, it's expanding the customers, it's working with the customer, it's getting the result, it's feeding that back in. It is your strategy and it is the highest leverage thing and it's the number one way that you can build your company without raising external capital. And then as the owner of the company for the next five years, instead of being on the train where you burn money and then every two years you don't take distributions. You just have a salary. You're employed by basically the board and the investors. You can't take a distribution for five years. You have to raise money every two years to keep up with it. So imagine the amount of money that's lost purely in the distributions. Because VCs typically run break even or burn, where if you ran your company profitably over that period of time, you might take out $10 million in distributions over those five years.

[Chris Walker]

Yeah.

[Unknown Speaker]

And then at the end of the five years, you have a company that you own most of. Maybe you gave some points to employees, some strategic people, maybe you made M and A and had some rollover equity, but Maybe you own 60 to 80% of the company and then you sell it at 20 million in revenue and make more money than if you built it to a billion dollar company and raised all the capital.

[Chris Walker]

Yep.

[Unknown Speaker]

And I just think that there's a totally new way to build companies that is better for founders, better for teams, better for customers, and ironically better for investors. And there's a small subset of companies, some AI companies and some other things that deserve the VC infusion of $100 million. But most SaaS businesses don't need it. It gets wasted on, on 50% of revenue going to sales and marketing because they have an excess and they're driven to burn. They don't make the hard strategic choices that they need to. And I think that overall people will start to see that I can fund the growth of my company by getting customers for not a lot of money, that I don't need to have a four year CAC payback like the VC model, that I can do something like this and pay back the cost of acquiring a customer in two months and then for the rest of time it's straight profit because I'm smarter. I don't need a massive team, I don't need a million dollar advertising budget, not at the early stage. It makes sense to do those things at 100 mil. And I'm actually starting to think now that this type of strategy doesn't need to be forever. That once you can get it to like think about Mark Benioff for example, once you get the company to a mass scale, the personal brand is no longer needed. The personal brand built the company brand, then the company brand takes over when they're at scale. It doesn't have to be at. Most people don't. A lot of people don't do this because they're like, I want to exit my company and I don't want to be stuck or I don't want to be like a asset around this. And I just simply do not believe that to be true. My other businesses, that I'm not operational anymore continue to do well and have positive business trends and performance. And my content doesn't support that message almost at all anymore. And because the company brand has now exceeded or at least has a brand of its own that people know and trust, that deliver, that have a lot of successful customers and word of mouth and things like that. And so I'm encouraging people to consider this as a, I mean you can do it for as long as you want, right? And if you're the majority shareholder, you are also the main majority beneficiary of the input that you're doing. It just simply is the highest leverage thing that you can do. And so people that say I don't have time just have decided that the other things that they're doing create more leverage subconsciously. That's what they've decided. And so going to the product meeting on Thursdays and sitting there for 90 minutes and hearing the roadmap, going to the gym at 7am, which I think is super important, but they've made a conscious choice. The gym is more important than posting on LinkedIn. And so it's just about, this is not a productivity hack, right? It's not about analyzing your calendar in finding 30 minutes to do a fucking podcast. That is not what this is. It's not, we're not talking that way. It's seeing what's actually going on, which is that to build the best product, you need to be most in touch with your customer, not have the best dev team and the most money to build the best narrative. You need to be closest to your customer, not do a $500,000 category design project with someone. You need to be closest to your customer to be able to sell deals and close deals and expand customers. You also have to be in there. And so I think just the, when you really rooted in fundamentals, the fundamentals are timeless and they're the most powerful and you can put money on top of it to mask it or to make it, quote unquote, less important. But oddly you just create different problems when you have more scale. And there's a lot of companies that just had big capital raises throughout the past five years and at very big valuations. And now that those have normalized, like people will tell me, oh, their product must suck or oh, they like really must not be able to. Like there must be a product issue, right? They're 100 million in revenue and people are like, oh, it must be a product issue. It's because they didn't manage their cap table and that they scaled the company with a four year CAC payback. And you don't just. It's hard to just cut your CAC payback period in half and maintain growth and not have a massive disruption to your business. And so the problem gets created as you build. Like they feel the problem at the end, but there's years of decisions and work that create the problem and have created this problem for a lot of companies.

[Chris Walker]

So yeah, okay, yeah, that was awesome bunch on that kind of to our point here is like being closest to your customer is obviously a central theme to this. And the content plus conversations is one of the best ways to do that. So the, the content piece that often I will hear is like, hey, this person doesn't have the time to invest in it or we only can do one thing per month or something like that. It's actually not just about driving pipeline directly from that piece of content. That is often what it's being measured against, but it's also losing the ability to partially 50% of the ability to be closest to your customer because the more things you put out, the more feedback you're going to get. And that just informs, informs, informs. Same thing with the conversations, obviously the one on one. So I'm putting those as equal importance.

[Unknown Speaker]

Yeah, let's go there for just a second. Like, yep, the companies that are buying technology and investing a bunch of time to measure the success of their content is like trying to fix a light on a boat while there's a huge hole in it and the whole thing's sinking. It's literally just, it's, you can do it, you can fix the light and the light will work, but the boat's going down. And it's not figuratively like the company's going down is that they're fixing the, they're fixing a small insignificant problem while there's a large problem over here. That's the real thing. And the real thing is that B2B companies do not measure their pipeline creation process properly and they do not have a framework of how to run it, which includes, like I mentioned, business development and BDRs, marketing investments, partners strategic marketing and things and brand and that collectively those things do not get measured properly. And they get so lost in this like attribution battle and they lose sight of the big picture. And a lot of companies have that right now where at the attribution deep tactical million slide deck thing it can look like the marketing is performing, but you're over there in the boardroom and you're listening to what's happening. There's no way this stuff can be working. Our CRO is confident we have a pipeline problem. We're about to down forecast Q1. Our performance and pipeline production has been declining for three or four quarters. Like the market is not working or is it like. And so to me that's fixing the content. Measurement is just. People get so lost in fixing micro problems instead of the high leverage real problems, myself included. So like my own business especially it's like nice to have someone come in and we talk about this sometimes, me and you. Like, it's nice to have somebody just to talk to that's outside of your company that you can talk to and say you're like, oh, our team like really struggling. And then they ask you a couple questions and they can convince you that your team's actually super high performing. They can help you calibrate, they can help you see things that you don't see. And so I think that can be valuable too.

[Chris Walker]

One of your recent, I think it was on the most recent GTM Live you did was the analogy of like asking the content marketer what's the ROI of what you're doing? Like, prove the ROI of what you're doing is like asking somebody working at a car manufacturer whose job is to put the tires on the car. And that's what they do on the assembly line. They just put the tires on every time. Tire, tire, tire, going up to them and asking them what's the ROI of what you're doing, you know, in relation to the success of our, you know, output and sell through of these, these vehicles.

[Unknown Speaker]

And I so love it, I love, I said it so. But like, I love it because the car needs wheels, right? Like your company, your company needs a website. So saying what is the ROI of the website just doesn't, it doesn't make any sense. It's like this company could not run if we didn't have a website. We need one. We can try to estimate the impact of spending a hundred thousand dollars on it and seeing how that works. But you get down to this micro issue around like, what is the ROI of this one little thing that we have to do in order for this factory to run. And those are many of the questions that get asked overall. And I think they're generally the wrong questions. And I think that we should not be asking the people that work in our revenue factory to measure the ROI of their job, to measure the ROI of the revenue factory or to make critical, long term strategic improvements to the factory. That is not their job. Their job is to work in the factory and put on the wheels. Other people come in and try to figure out how do we put the wheels on better if we use a different glue, could we save $1,000 per car? Somebody else does that. And so companies have the people that are building the tires trying to make the process of how to build the tires better. And they are doing these really small things that don't make any impact. And so there's a clear separation that I see that factories run on that B2B companies don't right now that become one of the core reasons B2B companies aren't innovating. Why most of the new experiments that people always say, marketing these experiments, why do all the experiments keep failing? It's because we ask the question about who the tires. Instead of look at the, instead of look at factory performance.

[Chris Walker]

I'm getting close to the point where I see like essentially like a flagship content engine as just being something similar to the value and necessity of a website. I mean would you agree with that? Like, and what that flagship content engine is could be different for different companies and the pillar of it could be set up differently. There's many different ways to approach that. But it is really tough. And I feel for some of these content teams who are being measured against short term inbound lead metrics and KPIs off of like a new YouTube channel that they're setting up which like the value of these things is unquestionable. And the value can be measured across multiple categories including inbound pipeline, but also the other motions of marketing and sales that can help lower CAC and make things more efficient overall. But yeah, I guess like it's about tires on the car.

[Unknown Speaker]

It's yeah, you need tires on the car. And it's really about the process of when is the right time to do these things versus the other things.

[Chris Walker]

Yes.

[Unknown Speaker]

And so like it's really hard and big companies do this. It's really hard to be like, oh, we need to invest all our money in brand that we by the way can't measure accurately. We do not look at an ROI or overall performance target. But we say that it's going to make an impact in 12 to 24 months. It's hard to make that investment when you can't pay your bills, whether it's your own personal investment or the company. And it's obviously like an extreme example, but that's the situation that it's in that like they're like we should invest more in brand. And meanwhile the metrics that they have on the 10 million that they already spend do not add up. And so obviously adding this thing while the factory is failing is going to put pressure on all that stuff and cut that experiment. And so it needs to be a methodical process of get our factory to run properly. Yeah. With repeatable, executable programs that happen through people process and technology and then put one new thing in. And if our YouTube you could spread multiple out.

[Chris Walker]

Right.

[Unknown Speaker]

So you have the machine that's running and then you have two or three things that you're sprinkling on top of it. And if one of those things hits, it drives your growth for the next couple of years. And this is like I'm going to reframe it. But it's basically the revenue R and D framework that I talked about years ago, just better positioned at this point. That is how you run growth for companies where the whole company knows these are our bets. There are only three of them. We need one of them to hit our plan and the other two are the upside. Instead of the growth marketing team is doing this little thing over here and if they get it, we'll get 2% better. And over here if they do something we'll get 1% better. And it's just separating the difference between optimizing within a apartment or within a process versus optimizing across the entire thing.

[Chris Walker]

Yeah, I think we should save like I'd like to go deep on that in maybe the next session. Which is like the sequencing of basically content is a pillar. Like the different approaches to content. There's YouTube, YouTube only. There's podcasts, there's short form video, there's newsletters, there's written content for your blog. There's a million different things you could do. But content being the highest level pillar of that seems like it is something that every company needs to include in their pipeline creation framework at some point to your point. But I. So I think at some point you and I should go deep on like the sequencing of that and where and how to know when to fit that in and then know that it is working. You know, essentially yeah, like the.

[Unknown Speaker]

Some of these things I just don't even have the energy to say anymore. But like, yeah, the reason that companies do not run paid social advertising in the right way, that delivers the best ROI on the investments and they bleed money on LinkedIn ads every single month, year over year. And the why they don't have an organic social presence and why their executives don't do those things, why they do not have a thriving live show that they do with their customers and market and all these things is because the way that marketing is measured directly disallows it. There's no other way around it. And so I get. I've said it so many times that I'm like almost tired of hearing myself say it. But that's. It's the root of the issue. And so. And people get. Are stuck continuing to try to fix the problem the wrong way or take on this endeavor of trying to do this marketing strategy without changing the metrics and then watch it fail in six months and go back to doing what you were doing before. It's tough medicine for people to take. But that. Is it like this? Yeah, well, yeah.

[Chris Walker]

And I think the reason I brought it up now especially is just because of some of the topics you've been talking about recently, which is like elevating the conversation to the CEO CRO level, like board level and the metrics and KPIs that they're looking at. And I don't want to get into the brand conversation because that's like a big black box or whatever. But content is not easily measurable. But then at the same time we also have to measure to some degree of knowing that it is working and stuff like that. And so it's almost feeling like it's a little bit at. Well, that's what I'm saying.

[Unknown Speaker]

Yeah. Like I'm at. I don't point of challenging.

[Chris Walker]

Need it fundamentally.

[Unknown Speaker]

Like if you spend a million dollars a year on marketing SDRs and generate 20 million in pipe and when that 25%, you spend a million bucks, you get 4 million in revenue, then you pay your sales team and you have a six or eight month CAC payback period. Does it matter whether you have attribution touch points on your LinkedIn video? No, it doesn't. Everybody knows that the strategy is working. And so it's just like it's elevate as executives to know that what determines success is the business performance. It has nothing to do with the attribution or touch points or any of the micro bullshit that frankly the marketing department has made up to prove the value of marketing. That's the premise of what all the tools were built for. It was not built to help you drive strategy. It was not built to help your executive team align. It was helped to prove the value of marketing things. And so it's biased to measure the old stuff that companies used to do. Look at the tools that measure the success of display ads on view through conversions from ABM accounts. Like it's so far from saying that the ads were effective, but they can make the measurement dial in to say we should keep spending this $15,000 a month through 6 cents. So just the touch points only matter. To understand why the business KPIs look the way that they do, if the business KPIs are great, we should look in and say what are all the things that are working? How do we max them out? How do I Put more money on the shit that's already working. And if you're benchmark average median, you can say we're doing pretty good. But we have a lot of opportunity to go. How do we move forward from here? It's good to know that we're at the median. We're not low performing because many companies are at the median and think they're low performing. And then you have the companies that really need to hear you're at the low performing of the spectrum. That means. What does that mean? The stuff that you're doing is not working and it's not marketing's fault. It's a go to market problem, not a marketing problem. Even though marketing deploys a lot of investments in that area. And so being able to look at that as a team and say we like the biggest issue is a pipeline problem. Most of the investments that can fix it in the short term come from the marketing budget. So let's figure out how to set marketing up to use that budget to move these KPIs.

[Chris Walker]

Love it. It's a big topic and it's tough. I feel for, you know, the content teams that I talk to a lot because some of these things are out of their control to some degree and.

[Unknown Speaker]

So totally out of control. It's five levels in the organization below who needs to make the decision.

[Chris Walker]

Exactly. Yeah, exactly. So yeah, we can save that for, you know, another session, go a little bit deeper on. But the POV thing, especially for just where you are right now with Pesetto, I think it was incredibly valuable. So appreciate you going through it. Any final words on just that in general, like you know, the messaging pov like now how you're thinking about it, if there's anything you're thinking about, carrying it forward to the next step for you with Pesetto, now that you've honed in on sort of this feedback loop has been hitting for you how you're thinking about carrying it forward or anything else.

[Unknown Speaker]

Keep cooking, baby. We got a. We have a great set of customers that are in agreements through 2025. We get to cook, we get to co create the product with them. We get to be in the details, we get to figure new things out. And you have a narrative. People know they have a problem. You're only 10 months into your company now. You got to prove that you can actually fix the problem. You can quantify how much the impact is. Their go to market efficiency goes from 400% to 250% as planned in our financial plan. They add $150 million to their company in 12 months. Yep. That gives us a different story to tell to every single customer after that.

[Chris Walker]

Yes.

[Unknown Speaker]

So those are now.

[Chris Walker]

That's when the website changes.

[Unknown Speaker]

Now it's time to execute. Yeah.

[Chris Walker]

Yeah. Love it. Awesome, man.

[Unknown Speaker]

And I think people undervalue that. By the way. I think the Idea as a SaaS founder of Getting the result that you promised to your customer, not that you deployed the tool and onboarded them, that they get the actual result should drive more founders to have a professional services arm that you get paid for, not that you charge $3,000 for implementation as a loss leader. And then you try to outsource it to agencies long term, that you build it and you guarantee that the customer fixes their problem and your NRR goes through the roof and it changes your company and you get paid to do it. And it's an R and D arm. And it's. To me, I just am starting to get blown because I, I consult with companies that have 93% NRR. Right. So they're losing customers from their base every year. And you can see that it's tough for them to change at scale. Right. But companies that are building from the beginning couldn't build totally differently. And I think that most software solutions that get sold, you can look at MarTech, look at 6Sense, or look at any of the ABM tools, the tool might be great, but they do not help their customer get the true value out of the tool. They do not help change the KPIs, they do not help executives to align at the executive level, not even to set up and integrate the tools together. And that's a $200,000 investment that typically does not get an ROI in the companies that we analyze. And a lot of companies are ripping it out right now. And so as a founder, can you see what's happening right now for companies that are at scale, you can understand their metrics and say, how do I design my company differently? So that doesn't happen to me at 50 million ARR. And the thing is to, to care about the actual result that you get the customer. And if you do actually care about it, why are we giving it away for free? And a customer success manager that isn't equipped to solve the problem. Like a lot of CSMs are babysitters for customers. They have talent. I'm not talking down on them. But it's different than being an executive level consultant that helps you implement an ABM tool. It's a different person that you need to do that. And you could charge $300,000 in professional services. And then your NRR also gets better while you get paid. So we'll see. Big companies won't change it. They're too far along. I'm interested to see if the small companies change how companies are built from what was different from the 2012 to 2020, 2021 timeframe and how you go about it. The capital structure is just way different now. So I'm excited. It's weird because people have asked me for years, they're like, chris, when are you going to write a book? And I'm always like, no, actually I don't want to write a book about demand. Chen. Like, I don't, but this is what I want to write a book about. The new way to build a company or a group. The new way to be an entrepreneur.

[Chris Walker]

Yep.

[Unknown Speaker]

That I think it doesn't involve raising money and thinking about first principles differently. Knowing that you don't have to only build one company in your career is powerful. Knowing that one company can be a stepping stone to another one. Just like a real estate investor thinks, I'll buy this 10 unit apartment and I'll hold it for a couple years. I'm going to sell that. I'm going to go to the 30 apartment. You can use businesses as stepping stones and things like that. Yeah. I just think there's so much power in knowing what options you have as an entrepreneur rather than just taking the path that everyone's taken for the past 10 years.

[Chris Walker]

That was killer and I would actually encourage everybody. If you haven't seen it yet, you probably have, Chris. But like, basically what you've just described has been hitting, you know, online recently to some degree too, which is the term founder mode. Paul Graham wrote an essay recently called Founder Mode and said the best founders are the ones that are in the details and they don't outsource these big key areas like exactly like you've just described. So that was a great essay. I think everybody should check it out. This was awesome, man. Appreciate you.

[Unknown Speaker]

Love it. Every time.

[Chris Walker]

Yeah, we'll catch everybody on the next one.

[Unknown Speaker]

Thanks, homie. Talk to you again this afternoon. See you.