A (3:48)

Are you looking at the negative feedback as almost like a signal in the noise that you're onto something that's correct? Or is this just like if you.

B (3:54)

Work for the deal, you go through a sales process, you try a new sales pitch, you do it five times and you win zero deals. You get an insight that, hey, something that I'm doing here isn't working. And sometimes when I look at it, it's like something that I'm doing here isn't being explained well enough. Because any logical person that understood my full perspective would see this as logical. And instead people see it as a hot take and think that I'm out here just making up things for likes and comments and it just couldn't be farther from the truth.

A (4:22)

That's one point that I wanted to touch on because from afar, like I'd seen you talk about attribution and I think Maybe I misunderstood your take. So again, let frame this in the dumbest possible way. Would it be a straw man to say that you are against attribution?

B (4:35)

No, I am firmly against how attribution is used. And there's a huge difference between not liking a hammer and then not liking a hammer to be used to pour concrete. It doesn't make sense. And so attribution is not the problem. The way that it's used in companies as a replacement to KPIs in order to create easy measurement models for finance, to say that this is the ROI of our marketing funnel and this is the ROI of our SDR funnel and they create very easy, simple calculations around that stuff for planning that worked fine when there was massive market tailwinds in 2021 and it didn't matter and you were going to have enough pipeline and unit economics, there was no pressure and then all of a sudden all that goes away. The same mental models and the same planning models are being used when there's no big tailwinds and there's huge pressure on unit economics and the whole thing is falling apart. The thing I've been preaching forever as long as I've been in this type of game has been we need to focus on business KPIs first, regardless of department, regardless of how we decide on attribution and multi touch or department level sourced or whatever fucking things, we want to come up with that if the business isn't performing, that's the thing that we need to focus on. And then from there, depending on the business context and the historical trends within the business context context, we can come up with very precise key questions around what we want to use attribution for. And with that, we go in and we look at the data with a purpose to answer a question, rather than just sifting through all this shit trying to come up with a bunch of 100 slides about the insights that we're finding that mean nothing. And so for example, our win rate has been dropping from 16% down to 6.1% over the past 12 quarters. Consistently we have gone from 16 and then it dropped down and it was at 13, 12, 11, now it's at 6, 5, 7 and it's in this average period and we're seeing these consistent drops. Why? Is it because our sales team sucks? Is it because we fired our CRO? Is because we turned over half the sales team? Is because our marketing supply chain totally sucks and we incentivizes them on MQLs? They got 50 MQLs that suck? Is it because our connection between the process of getting a lead and then prospecting and getting into a meeting, that process is broken. And there's no level of coordination and prioritization. There are so many potential root causes of not achieving this outcome. And then you can look at the attribution data and other forms of custom analysis to get the answer to that question and solve your fucking business problem. And instead people are in the boardroom debating the attribute. I just sat through one yesterday. It's starting to really frustrate me. It's my job. I sit through it and I watch leaders of a business say our attribution model isn't working. It's causing all these problems. The SDRs feel demoralized. Marketing doesn't feel like their marketing isn't making a tangible impact on business results. Blah, blah, blah, blah, blah. So what do we want to do? We want to change the attribution model. We want to take something that's not working and move it from a W to a linear shape and think that's going to fix the problem. The problem is the way that attribution is used, not the type of model that you choose. And once people fundamentally understand that, and it's very difficult, especially for large companies, because the history of the company created these siloed departments and the analytics that are collected by department sdr, sales and marketing are all different. They're different properties. They don't connect together. And you have these disparate data sources that nobody can put together into a top level model. So the only thing they can do is say which department got it. What it does is it takes every single department and focuses all the investments into one very minor part of the buying journey, where people are in market to buy and to get a source attribution on a lead. And so all the marketing investments go there when they should be spread out properly across the customer lifecycle based on business priorities. But no, they all go that way because it's based on sourced pipeline. And then you put all your marketing investments to a very, very tiny percent of the market that is in buy mode. The 99% of companies that you want to go after are totally cold, not being marketed to properly. Your sales team's trying to reach out to them, failing miserably, not getting meetings with your target accounts. And it's all because the model is driving the investments in improper ways. And so that's why I use attribution data. You can't argue with the touch points. There's a lot of value to be gained by it, but how it's used as a replacement to keep KPIs to create departmental level credit, to use one model across the whole go to market, not use each individual model for different purposes, just the whole way it's used is just ludicrous at this point from my perspective.

A (9:15)

Yeah, see this is actually an amazing illustration of exactly what I was talking about where like the headline is chris Walker hates attribution modeling. Whereas what you just said and what I listened to in your past interviews is that I use this as a tool to answer business questions and make better decisions against the outcomes that we all want. And I don't know if this is a simplification, but I found that attribution models are used in two broad ways. And one is this like credit assignment system. It's a political tool, it's an organizational incentive tool. And then there's the decision making component where you can sort of like index on certain channels and within the model that you all agree on, decide which components of the system are underperforming, overperforming, et cetera, to make better decisions. And it seems like you are against the political credit assignment. There's this model from Nassim Taleb. He talks about the bed of Procrustes. It's like, all right, if you're two feet taller than a bed, you cut somebody's feet off right to fit the bed. And it's like we're using attribution models to basically fit what we were already doing and assign credit to those things versus as a forward facing tool to make better decisions.

B (10:20)

Couldn't have said it better myself.

A (10:22)

That's beautiful. All right, cool. And another idea that you've been hammering on lately and I think you may have been getting shit for at least inferring from your tone on. I think one of your latest LinkedIn posts is the sort of dire straits of marketing programs in general and the CMO role. So what are you seeing on the ground you're talking about like, I'm trying to save this profession. I'm trying to like elevate the conversation. What are you hearing? What needs to change? What's the high level takeaway here?

B (10:49)

Just so everyone has the proper context. The beginning of my career I studied engineering. Then I worked as a basically an operations consultant inside of a big company for four years. And then I worked in demand gen inside of companies in house for multiple years. And then I started a company where I worked with CMOs and demand gen leaders for five years and worked with more than 200 companies. And now I started a company where I work with CMOs, CROs, CEOs and CFOs to create a structure to optimize their go to market through a new way of looking at the data. So I collected for most of my career this perspective around marketing from marketers, you see. And then over the past couple of years I've made this evolution where now I interact with PE firms, the people that create value and the GPs at PE firms, CEOs, CFOs, the chief of staff that's trying to turn around the $200 million company. I now obtain financial data. So I have growth rate, go to market efficiency, cost of acquisition, those trends over eight or 12 quarters of what's happening across 50 companies. I understand go to market better than anyone right now based on data. And the prevailing sentiment around it is PE Investors are concerned that their marketing isn't working. They know they have a pipeline problem. They know that the CEO CRO is not capable of solving it themselves and they're not sure their CMO can either. And it's not a talent problem is the thing. The process and the structure that's created that runs the go to market actually creates the problem where it boxes CMOs in to a very, very small mandate around get trackable touches on leads that become pipeline. And when you box marketing in like that, you get really bad results and you incentivize it and you reward it to do the wrong things. And when you just step back for a second and look at it, I just feel like marketers, especially ones that haven't gotten out of the marketing department, carry a lot of baggage and a lot of ideas that nobody else in the company buys into. It's a bunch of garbage. Like even sitting in a room debating whether we should use a first touch, a last touch or a linear is a debate that only happens from the marketing arena. Nobody else, everyone else is focused on business KPIs.

A (12:59)

This is like kids table stuff you're saying.

B (13:01)

And if you just take a step back and say we spend 20 million in marketing and when you combine that with our prospecting machine, now all of a sudden we spend $24 million. And these investments need to produce a specific amount of pipeline that allows us to hit our growth targets. And if we are not performing, then we are doing the whole company, the shareholders, the investors, our customers and our team a total disservice. Yet nobody's measuring the outcome of that. And the whole rest of the revenue factory, the whole rest of the go to Market sales is starving at the bottom of the funnel with not enough pipeline CROs down forecasting. We wish we could put more customers into our 120% NRR machine and grow them over the next five years plus. But we can't because we can't create enough pipeline because our fucking structure around how we do it and how we box our team in is so broken. I think that that puts a level of ownership and a large level of opportunity for CMOs that translate their work directly to business outcomes. They're few and far between today. I know they're out there. I talk to them and I fucking love talking to them. Because immediately I can be like, these people really get it. And it's amazing. But most people don't. And so what's going to happen? This is an important thing that a lot of people in the background are talking about splitting the strategic side of marketing, which includes product marketing, brand comms, ar with the pipeline production side of marketing that really can run a lot more like a factory filled with processes based on data. It's like separating the science and the art. It's almost like that. And that different people should run those two different machines. And for some reason marketing has been this big thing. I totally believe that Rev Ops is this big thing that needs to get broken up and we're just shoving a bunch of important responsibilities into one function, not properly defining it and just leave and causing some issues. So I think that smart people are having that debate right now. And I would argue that there are many companies that would benefit from having their chief revenue officer run the pipeline process and take full accountability over it and hire consultants and experts and internal people that really know how to do that and collect the data so they can run it like a machine, just like they run their sales team and they can have other tools. And then you find a great incredible product marketer, strategist, CMO that can build your messaging and your narrative and communicate that and dominate analyst relations and other forms of thought leadership and create the multiplier effect where that's the thing that a CMO does that gets you from 50 to 200 is that figuring out the message, driving that into a scalable sales messaging and sales enablement. And that the machine to create pipeline is not trivial. It's not hard. It's straightforward on what to do. Collect the right data, optimize prospecting, optimize advertising, optimize events, go through a specific process over 18 months. Ish. And totally reinvent your go to market based on data and So I feel like there's going to be a reckoning here where some CMOs are trying to give away pipeline production. That's an interesting trend that I had not heard up until recently.

A (16:03)

Wait, so that's fascinating. Like you're making the argument that maybe these functions should be split like the brand and maybe demand. I don't know what words we want to use for this. I saw a take on LinkedIn today. It was like everything's demand generation. It just matters on the timeline, right? They're saying brand is basically doing the same thing, it's just seven years out or something like that. You think incentive wise these things should be split atomized in a way because that would break people out of the box or what is the take here? I'm super curious on that because right.

B (16:29)

Now, because it's all in one thing. And they try to measure the marketing investments that they measure the investments in product marketing against pipeline production which does by design. So and they measure that against track like pipeline production in the overall which is not what product marketing. Product marketing benefits across the entire go to market and should be spread out and the cost should be allocated across that way to determine the proper roi. And that there is a huge difference between doing art and doing science and you need both and go to market. And there are a handful of CMOs that came up through DemandGen, the newer ones that think more like a scientist than an artist. But many of the great CMOs are artists and I think that we need to put our talented, smart people in the best place for them to be successful to help the business. And right now they have two massively competing objectives. And so without an incredible VP layer and strong C level alignment, it's going to be really hard for them to accomplish that job. And so I think that splitting the balance between short term accountability and longer term outcomes. And that's not to say that because pipeline production reports into the CRO that everything is lead gen, that is not about it. It's how do we create the most pipeline most efficiently. You could run thought leadership out of that department. You could run webinars, you could do performance advertising with an incredible offer. You could do brand advertising. The tactics don't matter. It's how do we craft the tactics inside of that to produce a high ROI on the investments that we use to create pipeline. And I think that becomes like just a. Whether you split it just in the GL codes and the finance and you look at it differently or whether you split it organizationally is totally up to You And I hate recommending. Org changes because I think it's just an administrative burden that slows companies down for the most part. There's CMOs that want to. That think they would benefit and the company would benefit from splitting it up. So if you're one of those people, I think it's worth having a conversation around.

A (18:25)

This resonates. It's so funny. Like I, at one of my past companies, before I launched the agency, we had a model like that. There were two sort of CMO like figures. I can't remember the title. I think it was like CMO and VP of growth. And I think the org structure for certain companies can like differ. Right. Like there's a lot of specificity to that stuff. I was on the growth, I was running experiments. It was very analytical performance marketing, working with the paid team, the web team and then the SDRs were on that team too. And it was all very pipeline focused. The other side is more brand events, et cetera, kind of building the overall narrative. And I think like, just from a personal standpoint, it makes sense. Like I come up through very much like a growth, demand, science, growth models, that kind of world. And when I talk to the more, I guess like you said, the artistry side, it is very much like a translation. It'll feel like, explain like I'm five. Like I don't actually understand a lot of this stuff. It's like two different mental models. So really it kind of makes a lot of sense. I want to ask you a question and I might have to apologize for this one. This might be a. This is so a guy on my team, Usman, he's a big fan of yours. Had a couple questions regarding some of your hotter takes. So sort of like back against the wall, right? He said some marketers argue that demand creation and I think this plays in right with demand creation and kind of like dark social some of your earlier ideas. Finelabs says some marketers will argue that demand creation is just a fancy term for brand awareness. As a flag bearer for that term, how do you feel when it's put like that?

B (19:48)

You can pick a bunch of brands that you're aware of, that you know about. Do you want to buy their fucking thing so bad that you need it right now? No, that's the difference between brand awareness and demand creation. It's the difference between someone knowing about you and desperately needing your solution because you've told them about the problem, how much it cost them, what the opportunity is, how it's going to their number One priority for next year. It's a huge difference. And some people are like, demand creation doesn't exist. All you can do is just wait for the market to come to you and wait for the demand to happen. Like it just comes out of nowhere. Before I started this company in January, nobody talked about go to market efficiency. Nobody talked about a unified pipeline architecture. Nobody talked about using a custom object to track your SDR performance with your supply chain altogether. Nobody talked about measuring a unified set of KPIs that look at unit economics, primarily combining financial data and CRM data to have all the data that you need as a CMO or CRO to make good decisions. Nobody talked about all that stuff. And now I think I sat through 15 discovery calls last week that people that want to help have me and my team help them solve this big, expensive, important business problem. And for you to say that that is not creating demand is ridiculous. Nobody knew about this stuff. Nobody looked at it this way. So the misperception that a lot of people tend to have around demand creation is that they think that in all stages and in all cases, the company is what creates the demand. And that is not true. When you're a millionaire and you're creating something totally new and nobody knows shit about what you do, yeah, you have to create the demand for people to want to care about what you're talking about. But when you're salesforce or when you're some big hundred million ARR company that starts to have scale, has thousands of customers, now all of a sudden, your customers, the market, the analysts, all the tech vendors that integrate with you, all the other stuff in the ecosystem starts to be the main lever for demand creation. And so it's not to say that you as a company control all the demand, that would be entirely wrong. But somebody that could be you, could be your competitor, could be your customer, could be some random consultant, somebody has to create the demand for your customer before they want to buy your shit. And I think if you don't acknowledge that part in the process and you think that it's just brand awareness, that is where you get when the companies spend $3 million on trade show booths and build them up and know they don't get an ROI and leave the show and are complaining that they didn't get the right attendance. And they blame it on the fact that the conference was in Orlando or Vegas or Louisiana or New Orleans or something like that. And then they do all this stuff in the name of brand, they measure and they, they're happy that people know about that have heard the company name before, but no one wants to buy their shit because they're not marketing the problem, they're marketing the brand. And the last thing is that people think that marketing creates brand awareness. Marketing creates a portion of it, but a majority of it comes from the word of mouth of your happy customers and you delivering on an experience every single time, delivering on your promise and renewing that customer and helping them be successful and helping them frame that success. And then they want to tell their friends about it. And like that's where you the piece by piece, get a customer, deliver on the promise. Get a customer deliver on the promise. Brick by brick by brick is how you build real brand awareness. The thought leadership element gets somebody interested in the problem. It creates the demand, it doesn't build your brand.

A (23:19)

This is very interesting and kind of struggle to put this into words, but there's another thing. This is going to parlay into something that I uncovered as I was listening to your podcast. So this is another misunderstanding of Chris Walker, I think. So with a term like demand creation or dark social, I think a lot of people on the outside are like, all right, you're taking that, you're branding it, you're pushing it and you're just trying to like make that a thing. I've listened to a bunch of your podcasts and even with your new company, I don't think you've used this word, but like, there's a customer centricity to what you're doing that I find fascinating, which is like you talk about sitting in these meetings, you talk about interviewing like your target customers, even shifting the business and product that you're bringing to market based on who the customer is and what their pain points are. And I think what you're doing is extracting those and finding patterns and validating those through the messaging. It seems like that's the fundamental alignment that needs to happen. That's maybe missing. And that's like this is where the demand creation thing maybe is misunderstood, is you're not necessarily. People think you're making something up, you're creating something from nothing, but you're pulling something from the ether, this pain point that already exists. And maybe nobody's put a word to nobody spoken to it in the way that you have. But it's all, in my opinion, it's very customer centric. Does that make sense at all?

B (24:33)

I mean, this is like the language in is like one element, but this is better represented as like the art of business strategy in a true what traditional CPG brand, the CMO was effectively the go to market strategy leader. They own product price, promotion, distribution strategy, the whole thing. And then therefore they could be P and L accountable if they needed to do something. They could figure out how to raise the price 10% if volume is going to drop because they lost a distributor or something big. And they have all those different levers. And that's how I learned how to do marketing, which is actually business strategy outside of finance. That is the art of business strategy that gets balanced by the science. And I think that they play together. But you need different forms at different stages. From zero in revenue to 10 million, you basically need art. You have superstar salespeople, one or two headcount that can get a lot done. You have superstar founder that can go out and get the relationship, the partner, the customer, superstar person that can build the product super fast. And it's all about superstars. And then at some point you reach a time where you have a hundred headcount and superstars don't get it done anymore. And you need process and you need science and you need data. And the art still matters up there. But the art up there then becomes a multiplier around it. You update your narrative and you hit it the right way, you can double your growth. It's respecting both but using them appropriately. I see a lot of early stage companies. I think that's why that company grow blocks failed and shut down, which I think the mission of what they were doing was inspiring. There was a company that was, I think raised a seed or a series A that was trying to make a rev ops platform and ended up shutting it down. They announced it a couple of weeks ago. Is really early stage company trying to build on the winning by design revenue architecture. But they tried to target SMBs super small because they're easy to integrate. But those companies don't have that problem yet. They don't have enough resources, they don't have enough programs, they don't have enough complexity. They can do all that stuff in a couple of rows in a spreadsheet. And so those types of tools are valuable when there's growing complexity where the executives can't figure out what's going on in the 10, $10 million in marketing or the 5 million in SDRs, or the 13 million in account management. And so I think that is an interesting distinction.

A (26:47)

Well, that's what I think is fascinating. And that's where some of this, like when you boil it down, it sounds very foundational. It seems like with Paseto Like, I listened to an interview about why launch a new business? And you talked actually about shifting the stakeholder that you were working with, which I found interesting. You're like, we used to work with the head of Demand Generation. We used to maybe work with the cmo. But like, I wanted to talk to the CEO and the cfo. And I think this model is very like, bottoms up. You're looking at the buyer, you're looking at the stakeholder, you're looking at who you're solving a problem for versus other people, including myself. Sometimes I think about what message do I want to get across, what do I want to do and what market do I want to play in. And that's a little bit tops down. You're really like looking at the center of the bullseye and pulling out solutions and a go to market from that. Is that a misinterpretation or.

B (27:29)

When I started my new company and put Megan in charge of Refine Labs, I wasn't going out saying, oh, now I'm smart, I'm going to go fix this with CEOs. It was not the plan. And the difference is that the problem that exists in companies is ridiculously clear, mostly understood, and mostly unrecognized for the root cause of what actually causes it. And so all I'm doing is talking about the problem at the beginning and then watch what comes back in. Who are the people that are responding to me talking about this problem? What size are they? Who's the stakeholder? Do they end up buying? What do they want to buy? Do they think about us as a consulting firm or acceleration or cost savings? Why were they thinking about us? Who are the customers that renew? Who are the customers that get the biggest performance on growth rate increase in the first three to six months? Why? And then you can get that data and you can say, oh, like I see the pattern here. The companies that are between this size and this size, that are trying to achieve this, that have this person come in and talk to us about doing it, and then they are the champion that implements it in their company. That's the customer that we want. And it takes six months to get there. And so it's more about being open to the path that your customer takes you on. And I think more so being committed to the solving the problem than being committed to your product strategy or your market strategy. I think both of those can be more flexible as long as you stay true to the problem.

A (28:56)

What does your process look like, maybe a little bit more tactically for identifying a problem? For validating that and then maybe the timeline across those. Like, are you in the early days just doing kind of qualitative interviews? Are you pushing out messages on LinkedIn to then validate and find patterns? When do you know that a problem is weighty enough to build a solution and messaging around?

B (29:16)

Get paid to do consulting, look at all the data, quantify the biggest problems that people don't see, educate people on the problems, build automated, fast solutions to solving the problems that people don't see right now.

A (29:29)

Do you ever get frustrated if you see a problem, you know it's a problem, you try to communicate that problem, people still don't understand why it's a problem.

B (29:35)

I mean, that kind of happens. That's been happening to me for five years now. I think it's more so about recognizing how abundant the market is and how large the market is and recognizing that while most CEOs are told, oh, I need to raise $500 million in VC and build a $500 million company and try and sell it for $5 billion so that my investors can make a ton of money, and I work for 15 years birding myself out to make someone else a bunch of money and needing this sort of winner take all mindset to a market instead of designing the business around the life you want to live. And for me, I know that I bring immense value to companies. I want to work with a small team of incredibly smart people. I know the value that we provide to companies can be hundreds of millions of dollars in 12 months. And I'm going to charge appropriately for that. I'm going to love the people that we work with. I'm going to love the team that we work with. We're going to do great work with people that don't get in our way and buy into our shit. And if that means that we do 500k less in revenue next year, then so be it. And I'm not taking a meeting on Friday for a sales call or a customer fire to disrupt my schedule. And I think as the CEO and the leader, you can set the tone for those decisions that the rest of your team can make too. And before, I would burn myself out and work weekends and do stuff for companies that didn't pay us enough and weren't satisfied with our work and things like that. And I'd rather have eight hugely successful customers than 20 headaches or 30 or 50 or 100 or a thousand headaches. And so I think that. And then when you come at it from a bootstrapping perspective, maybe we can get into some CEO talk here. I'm trying to help people understand the differences here because I see you have two paths when you build a company, right? I mean there's more than two paths. But to simplify it, you can bootstrap the company which means you have to either self fund it or go slower, quote unquote slower because you don't have money. Or you can bootstrap it or sorry. Or you can raise money which gives you the perception of going faster. And then you're on this train. I want people to understand the financial differences between these two situations. So when you bootstrap it and we'll just go on a five year timeline for now. When you bootstrap it from year one to five, your goal is to be a profitable, sustainable company not driven by the investors growth targets. And so if your company goes from 500k in profit to a million in profit, to 2 million in profit, to 3 million in profit and you own 100%, then you put that $7.5 million in your bank account over five years. When you raise VC, the VCs don't allow distributions because they just put their money into it. And so you don't get distributions and you get driven to lose money. And so in year one you take zero out, you just get paid your salary and your bonus. Year two, same thing, year three, same thing. Year four, same thing on and on and on. And so meanwhile if you bootstrapped, you might have taken seven and a half million dollars in cash over the first five years. During in the VC model you take zero, maybe you get some sales, sell secondary shares five years or seven years in, but you're not getting anything along the way and you're somebody else's employee. And then at the end if you had that run rate business of 5 million in EBITDA, you can, and depending on the business and the gross margin, you could sell that for 50 to $100 million. And maybe you own 100%, 80%, 60%, nobody needs more money than that. But if you do the VC game and they have their target, which used to be a billion sell as a unicorn, now it's like 5 billion because the entry prices are higher and they're getting less equity. So now it's like 5 billion for them to make their returns. The average right now is I think 17 years for a VC investment to actually clear to liquidity. Jason Lemkin did that analysis. You want to be in the game for 17 years to do that and then sell the company when you own 3% or something like that and not take distributions along the way. I think that generally, if you look at it from an asset class perspective as an investor, that a private equity investment is significantly just a better asset class than venture capital today. You get cash flow and appreciation and sometimes tax benefits. On the VC side, you almost get nothing except for qualified small business stock upon a liquidity event. And so as a founder making that decision specifically around your short term financial gain, I think is, is in short term meaning the first five or 10 years of your building your company, I just think that people are not aware of the other options.

A (33:57)

Absolutely. And what I'm hearing like on a broader generalization is like a lot of intentionality from you, I mean, in that sort of dichotomy. But also you talked about ways that you're building Pasetta that might be different than ways you've operated in the past. You know, like working with a smaller collection of clients that you really love and digging into those problems and making massive impact. I'm curious if you've intentionally set forth any other ways that you're building this business versus ways you've done things in the past.

B (34:22)

Totally.

A (34:23)

Any different ways you're going to market any.

B (34:25)

Yeah.

A (34:26)

What learnings are you taking?

B (34:27)

Yeah, I just think this is such a simple playbook that like an entrepreneur that currently has nothing except for skills, no money, no team, no big profile, but has skills and drive and desire around something. The playbook for them to get the best life and financial outcomes without going down that path. And it's the way that I kind of did it in two stages, but I think that you could do it in one. So the first thing to recognize is that if you're in a recurring revenue business and you want to build SaaS, that NRR is actually your most powerful metric combination. Grr. Nrr, Right. The expansion of your base becomes by far the most powerful lever of growth. And so if you look at and analyze a lot of SaaS companies, they won't build a professional services arm of their company because it decreases gross margin. And then they might not be considered or valued as a SaaS company because 20% of their revenue comes through services that help their customer be successful and hopefully drive NRR up. And I think it's totally fucking whack. And they put a CSM in there instead for renewals that doesn't really know how to help the customer because it hits CAC instead of gross margin. And I think the way that we build SaaS and the way that we deliver to customers needs to be way more focused on delivering the result to the customer than just selling them a product. And when you think about delivering the result for a lot of companies, think sixth sense. Think some enterprise tool that goes into a different like it is not just about hooking them into Salesforce and their product. You need to retrain how the BDRs run their process. You need to fix the data architecture you need to create. They need a services layer to operationalize their product and they don't deliver it to the market. And the market knows and the market is churning from their product because they can't operationalize it because those types of companies refuse to deliver the services that make their customers successful. And so when we think about building a SaaS company today, instead of having a CSM that's a manager level person trying to focus on the renewal, let's get paid to make our customers successful through expert level services. And we bundle our 100k SaaS product with a $300,000 professional services contract and we absolutely crush it for our customer. And our expansion and renewal rates are so much higher that it offsets that perceived impact on financial gross margin. Or we deliver such a great service and such a great outcome that we can make 80% gross margin on our professional services too. Which is something that's totally reasonable and totally possible depending on what you're selling. And then if you did that then you can cashflow product development and you can use your customers revenue to reinvest in the product and never raise vc. So that's one thing. Services as a way to cashflow and fund the development of your product. The second one is going fast is not how much money you spend or how many resources you have. It's ironically sort of inversely correlated. Whoever is closest to the customer is the one who goes the fastest. And you don't need a hundred people or a $10 million budget to be the closest to your customer today. And so the people that are closest to the customer identify the problem in the right way, understand how to fix it through the services and actually fixing the problem. And then build automation and make that service into a product that delivers a consistent customer outcome. And so being close to the customer is more important than having more money is another core lesson. And then lastly, I think this is a personal choice so this doesn't have to apply to everyone. I'll just share it on myself. You can choose your go to market motion and what you want to sell. Right? You can sell a $7 a month thing and try and sell hundreds of thousands of them. You can sell a $2,000 a year thing and try and sell tens of thousands. You can sell a 30k deal and try and sell hundreds of thousands. Whatever. I have decided for myself that I only want to solve rich people problems. I want to solve big, painful, expensive problems where hundreds of millions or billions of dollars are on the line. Just like they call in a specific real estate agent to sell the $80 million house or to sell the $100 million plane or to do anything super to the lawyer to win the $400 million lawsuit. And I want to me and my team are going to solve the most expensive, painful problems for companies and we're going to build a highly specialized, differentiated company. I'm not going to play lower market. I'm not going to compete with a 30k SaaS tool and the market will see that it's clear that we playing a different game here and the different game is get customers actual results, not build your ARR. And I think that people need to recognize that to solve a customer problem, especially for an enterprise SaaS tool, you need executive change management, you need technology and you need best practices implementation.

A (39:07)

I'm telling you man, you're preaching the gospel of like customer client centricity. And it's like not in like the business book way but like actually like doing it like boots on the ground because you're saying the services. I'm like, you also get this not even a side benefit, a massive benefit of being so close boots on the ground with the clients understanding what to build into the platform that's going to increase the value. It's like you're not abstracted away from it. You know, it's not like a number on a spreadsheet. You're like right there like doing the work alongside them. Yeah.

B (39:32)

And instead of measuring successive onboarding of did they use these five features we measure the success of. Did they get the business outcome that we promised them?

A (39:41)

Yeah. Did they click through on our like welcome.

B (39:43)

And it's just a lot in marketing and sales technology. I think that's just because that's what I get marketed a lot. But I'm sure it exists in other categories too about just companies dramatically over promising what their product does. And I think that that type of stuff plays itself out sometimes it takes longer than others. But it's as simple as this. If you do not provide tangible, measurable, consistent value to your customer, you do not have a recurring revenue business long term. You might be able to do Great. When marketing budgets are inflated by 100% in 2021 and 2022 and you can grow to 100 million. ARR. And nobody's scrutinizing your expense and they're resigning with more seats and they're doing all that stuff and then all of a sudden at some point the economy slows down and at some point people say, what is the value of this tool that we spend $300,000 a year on, on an annual contract and we've been using it for the past four years and nobody can defend the ROI of the product and you're in trouble. That can happen to services vendors, that can happen to tech vendors, that can happen to pretty much any recurring revenue model business. And I think that there are a lot of marketing technology vendors that have built big companies and don't provide a lot of value and are starting to really feel that pressure right now because of the marketing budget scrutiny.

A (40:55)

Absolutely. I know we're coming up on time, but I wanted to ask you just real quick on the LinkedIn stuff, you were extremely early on LinkedIn dark social. I have two questions. One from Usman, two from Usman, actually.

B (41:05)

All right, we'll go rapid fire.

A (41:07)

Yeah. So first, your LinkedIn content has never used the typical personal branding playbook like posting selfies, talking about your vulnerabilities, yada yada. You've still grown a massive audience by focusing narrowly on your craft and speaking no BS about it. So Usman wants you to crack your thoughts on the stereotypical personal branding stuff and why are you successful despite ignoring this?

B (41:28)

It's just so funny because the thing was, despite not posting selfies and posting that type of stuff, you still managed to grow your following to 160,000 like.

A (41:37)

On a business network.

B (41:38)

I can't believe, as if, as if you have to do that, that other stuff to build a personal profile on LinkedIn or anything like that.

A (41:45)

You don't follow hook templates? You didn't download like a PDF of hook templates.

B (41:49)

Yeah, because I'm not playing a game. I am using this as a platform to help people understand that there are big business problems. I'm trying to help people. It benefits my businesses, it benefits other businesses I'm inferred of, and it benefits tons of businesses and people that never pay me a dime because I go into this channel and anything that I do as a marketer through the lens of a CEO, all the shit that I do is highly intentional and with massive leverage. When you have a hundred person marketing team, nobody's Looking for leverage. They're just looking to stay busy. And it's another reason why I see a lot of companies thinking that their team is overweight and that their marketing team would go faster with 10 people than 40. And I tend to agree with that in some cases. But let's get back to LinkedIn.

A (42:32)

So another one on LinkedIn being early. I'm just going to ask you straight up, like what's your crystal ball say, right? Like where's the alpha? I think people have priced in LinkedIn now when you got on, when you were just doubling down, I don't think it was obvious. So now moving forward next year, two years, five years from now, where's the alpha? Where's the attention? Is it still LinkedIn? What are you doing?

B (42:51)

All that matters is where is it right now? Because you can always adjust. If LinkedIn disappeared tomorrow, all that stuff would flow somewhere else. You could follow your customer and you can rebuild there. And so all that matters is where are people right now? And when you think about it that way, the places where B2B buyers are at the most scale, where they consume content in a place that is not an email list or some type of owned gated thing, that LinkedIn is the number one place that you can market your company, not a conference, trade show. And then it's about connecting the digital. So LinkedIn number one opportunity, organic, right? Organic content on LinkedIn is the number one opportunity in B2B on the digital side. And then connect that with highly strategic, physical, in person experiences if your ACV allows it. What I do on LinkedIn opens up all these opportunities for real life. And then I get invited to a 12 person CEO dinner and I'm sitting next to someone that's the CEO of $100 million company and then they become my customer next week. And I'm only at that dinner because I spent five years on marketing on LinkedIn for someone that's doing the thing to invite me. And people just don't think about it that way. They're like, where's my lead? Where's my lead? From that one LinkedIn post that I did last week. And so it's just a mindset thing. It's about understanding how you want to build your business. And when getting more customers for less money, if that's important to you, then focusing on the places that have a bunch of leverage is the place to do it. LinkedIn is still the best on the media side. It's properly priced, I would say. I guess I would say that from a Social network perspective. Yeah.

A (44:24)

Yeah. I mean, we definitely don't have your reach and consistency, but I would say that resembles pretty much what we're doing with our playbook, IRL plus Digital, setting up landing pads, building trust, et cetera. So that's good to know. All right, man. There's so many other areas we could have driven down. I feel like you're a tough interview, a fun interview, but you're tough because you've spoken so much that I'm like, all right, I wanted to make some new angles here, not rehash the same stuff, so hopefully it was fun. Is there anything else you want to talk about? Anything we missed? Any last words to hammer home?

B (44:52)

No last words. I got to jump on my next one in one minute here, where I'm going to be educating a ton of marketers on why the exact reason why the four funnel model that I've been talking about and most every company is doing is fundamentally flawed. And I will point that out objectively. Any logical person will understand and see how in the world is it possible that every hundred million dollar company runs on this broken fucking model? That's what I'm trying to figure out now. So I will continue doing my investigating market research, and we'll report back.

A (45:24)

Hell, yeah. And I'm sure we'll see it on LinkedIn. I think people know where to find you, but where can people find you online?

B (45:29)

LinkedIn or the B2B Revenue Vitals podcast? Nice.

A (45:32)

Thanks everyone so much, man.

B (45:33)

See you.

A (45:34)

Cheers.