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- [00:00]
A
I love talking about this. This is the. So I've been talking about like tactical marketing for like five years, but this is the. That I really want like to talk about. Everyone I talk to one on one like this, they're like, this is the stuff you need to be talking about. This is like so valuable, so unique because yeah, I've gone through all of this. You're listening to Revenue Vitals with Chris Walker. You're trying to start an agency. Okay. On the Voluntary or involuntary? A little bit of both.
- [00:50]
B
I've been there.
- [00:51]
A
That's when I started my company was. It was really involuntary for me. Yeah. They asked me to leave.
- [00:55]
B
Yeah.
- [01:03]
A
For how big of a company? Not that small.
- [01:12]
B
Yeah.
- [01:28]
A
Sounds like a recipe for disaster. I don't want to take over sales, you know what I mean? Like, I think that I'm like really good at sales but having to manage both of those things. You need someone to manage sales, someone to manage marketing and then you.
- [01:47]
B
Yeah.
- [01:50]
A
And like if you're playing behind the eight ball, you're playing catch up from someone else's stuff. It always is with companies of that size. I don't like working with companies that small anymore. It's too unstable.
- [02:07]
B
Yeah. The whole marketing team, how many people? Yeah, yeah, yeah.
- [02:42]
A
Good with me. What do you mean? Electronic?
- [03:03]
B
Yeah.
- [03:05]
A
Like just go and do that for a company. Start an agency around it.
- [03:16]
B
Yeah, yeah.
- [03:35]
A
How much they pay you? Not enough, but yeah, I started, I started there too. But you really want to be at like a thousand?
- [03:45]
B
Yeah, yeah.
- [03:48]
A
I charge way more than a thousand an hour. And for like my mid level people I charge 750 and for a low level person like 400 retainers.
- [04:02]
B
Years. Yeah.
- [04:04]
A
Takes a long time. I was like 100 bucks an hour, 2500amonth, 5k a month, 8k a month, 12k a month, 15k, 18k, 20k, 27k, 35. Now we have some that are in like the 50s.
- [04:19]
B
Yeah.
- [04:20]
A
It just depends who you're working with. The lower part of the market fucking blows. But it's the only place to get started, so I can't say nobody. But it's a lot more rare for like a hundred million dollar person to put their reputation on the line. For like one person or a solo thing, they want to have something that's a little bit more proven, especially if it's expensive. And so at the beginning you basically start with the series A's and the series B's and you do good work and you get testimonials and they likely churn because their business sucks, not because you didn't do good work. And then you use it to step up. And as you step up, there's like big plateaus. And I'm exposing a new one because now in like a $200 million company, I compete with PwC and they have like a $1.5 million contract there. So I used to charge 75k and they're comparing it to 1.5 million and I just took my price to 300k. So I tripled my price and everybody says yes, it's still too low. I know, maybe 20 hours. We like hook into their finance system, hook into their CRM, analyze all this data, build a road map for the CEO and the CFO, change how they're going to spend their $30 million next year, help them forecast for next quarter, figure out what the most important thing is to hit the number. So like if you stay in the marketing department, you have a cap because there's like, if you look at the marketing budget, there's not that much that's actually variable. You have this head talent expense that's fixed. Then you have all these events that are committed to and then they have digital. So when you think about like what they have for like a consulting project, it's like maybe 50 grand, maybe 100 grand in a year and they can pick one or two, right? So like I tried to sell it into marketing for 50K and they're like, no, we can't afford this. And I'm selling it the same thing for 300k to a CEO. If you sell product marketing, you pretty much have to be in the product marketing. Unless you're selling to early stage people that don't have product marketing. But probably not, no, because you just want to do one thing really good. In my first business, I got to do three things really good and it makes it three fucking times harder. Media, creative, CRM reporting. Three distinctly different skill sets, Talents, pricing, budget holders for the companies wherein they're selling a 30k agreement which is really 10k three times. But in their budget, the 10k spread out over three line items. Now you bring it to one decision maker and they're like, I don't want to pay for these things. And like. Yeah. So packaging and pricing is the biggest lever to grow a consulting business for sure.
- [06:58]
B
Yeah, yeah.
- [07:03]
A
Right now we use partners. I kind of split like rev ops and then like revenue architecture. Like what is the building going to look like in three years? And then somebody else is going to start building toward that building. So I look at myself as like the architect and the general contractor and then like I'll bring in the electricians and the other people or the company already has the plumber and they, they can do.
- [07:28]
B
Yeah.
- [07:29]
A
But like I'm more so figuring out like what do we do, how do we do it repeatably, who do we do it for, how long should it take, should it be recurring or projects or what? And so I'm not trying to scale customers yet. Like I'm good to have five customers and have them all try to be ultra successful for the next six months and then we know we can deliver it profitably. We know how to deliver. They're going to renew and then do some more stuff. I mean I like, lots of people listen to my stuff.
- [08:02]
B
Yeah, yeah, yeah, yeah.
- [08:05]
A
I'm actually surprised that I don't get more for how much awareness I have. But I think it's because I've been pitching a CEO offer to CMOs and so none of the CMOs, it's not that they don't care, it's that they can't put 500k of their budget to fix someone else's problem. So you need the CEO or the CFO to say this is important. The budget department holders have their budget. Where are we going to find the next 500k that's going to take our business to the next level? If we do this one thing right. And it's all the cross functional things. It's the connection between marketing SDRs, the connection between marketing and sales are in those connection points is where all the misalignment and none of that, none of the work happens because of the.
- [08:47]
B
Yeah.
- [08:47]
A
So my best advice is focus on solving a specific problem. So don't call it product marketing. Say you have this problem and I fix it. And then. Because when you do that. It happened to me yesterday that if I did it to a director of marketing ops or something and I pitched it to them, they would say, oh, how much does it cost per hour? Right. And when you pitch it to somebody that's like, I just want the solution. You say it's going to cost $300,000 and all they say is, yeah, if we can fix that, that'd be worth $300,000. And they don't think about how long does it take them is what's the cost per hour? Like the low level people think about that because they have to manage the pennies, but the big people just want, they don't even really care how the sausage is made. They just want it done. And so focus on as high in the organization as you can with the most important problem to that person that relates to your skill set. I mean it's hard because my new company, it only took me like six months but I've been in doing it in some fashion for since early 2019. So if you look at it in aggregate and 2021, 2022 was like a facade, kind of like I got bigger companies but maybe it's not because I deserve them, it's just because there was so much money. So now at this point I deserve them. And it probably took five years but you're like it's ongoing climb. It's not like you're at the bottom and then you get to the top. It happens over time.
- [10:14]
B
Yeah.
- [10:20]
A
It depends what you like. Consider start and finish. You know what I mean? I started at 0, I'm at 160k now. A majority of the growth happened for the first couple of years because in the first couple of years I made content for likes and so I could appease the algorithm and get followers that don't aren't my target customer and don't care and pump the vanity metrics and stuff like that. And then I just eventually shifted and said I don't care how many followers I get. I'm going to talk about the things that I have a perspective on that the market meets that happen to align with the things that I sell. But I don't think about me being like slimy. I'm like it's a no brainer for most CEOs to hire me and pay me a million bucks. I really believe that. So I'm not like feeling like I'm salesy, like I think I'm helping them. But yeah, I posted almost every day on LinkedIn and I've done three podcasts a week for the past five or six years. But it's like if you bought a piece of land and then for six years you like build this incredible house and now you have an addition and you have a pool and you have this and you wake up and you have all this stuff and it doesn't just go away. So it's just kind of like if you're planning on being in the industry for a while and monetizing against the industry, it's literally the highest leverage thing that you can do. You get the most. I'm surprised actually recently about how much it impacts retention and expansion almost more than acquisition. All of the key leaders in my customers listen to my podcast, so I work through the challenge with like some part of their organization and then I pull it back out and I talk about it broadly and then they, they see that they're doing the same thing because it literally came from their. The patterns of the situations. And so then they start speaking the same language. They're like, oh, I get that. I'm so aligned. Let's do this for another year. I see the. And so it's like not. It's crazy how much it's benefited that more than new logo. Recently I've loved it because I'm not going for, like, if you look at my podcast, like, listens, it was like, woo. And now it's like on the way down. And I like, don't care because there's a lot more marketing managers than there are CEOs of $50 million companies. And so just by that theory alone, if you're going after that, you're going to have reach go. And when I talk about things that are important to a CEO, I'm going to lose the marketing manager or the director of demand gen or the sale SDR leader along the way. And that's fine. That's just how it goes. Like, if you switch content overall, sometimes it's going to work for people for a while and then it might not. What I won't do is keep talking about stuff that I'm not passionate about just to keep the likes going. It's exhausting. It sucks. Yeah.
- [13:02]
B
Yeah.
- [13:08]
A
2019, I was asked to resign and then they like gave me like a small severance. Like, and so I had like a little bit of a Runway. And the CEO was like, yo, I think you should try to be a consultant. And I was like, what's a consultant? I don't want to do that. And then I was like, okay. Like, I basically have no money in my bank account except for the severance. And I don't want to get another job because I hate, I hate doing this over and over. And the real thing was like, I'm an entrepreneur. Like, I can't work, I can't sit three levels in the organization down and like, be told what to do and not have an influence on the company. I was a great employee in terms of productivity, but I was always dissatisfied as an employee. I always felt like I wasn't. I had a lot more to contribute than I was allowed to contribute. And so I was like, okay, like, and then I reached out to my network and like, said, hey, like, I'm thinking about doing this. And people that I had worked with before that like needed my help. A hundred bucks an hour here, 5,000amonth here. All of a sudden you're making the same amount that you would make at a job. You have better tax benefits doing it as a consultant. And then you can, like when you get to 20, 30k a month, then you can think about do I want to hire someone or I just want to do this by myself and make 20, 30k a month. And then it's like if you have a useful skill and you have just a network of people, you should be able to get to a place you already have three clients, you know what I mean? And if charged appropriately, you would probably be at 10 or 20k a month.
- [14:23]
B
Yeah, yeah, yeah.
- [14:33]
A
But like I know a company that does. We help you do like a one page positioning to redo your homepage and they charge $7,500 and it's like a 30, 60 day project and it's totally unscalable. Really. I think it's, I don't. It's not even worth going through the sales process. No. It costs you more in time and meeting and software and things like that to just sell the deal and then 30 days later the revenue's gone and then you have to go and sell another deal and you're just on this hamster wheel of doing project. You're an employee again.
- [15:06]
B
Yeah.
- [15:07]
A
So the price has to be high enough that you can pay a salesperson to do it, that you can pay somebody else to do the work and there's enough profit left over and there's no sense in hiring more people until you can achieve that.
- [15:19]
B
Yeah, yeah, yeah.
- [15:30]
A
I think the biggest distinction now is like art versus science and to pick one. And the stages of companies that need the art versus the science are different. And it's like almost like at the beginning you need the art and then at like 10 million ARR, it becomes a lot more like science. And then at 50 million ARR, you need the art again, 50 to 100. You need the art to get to the next level. You need the big narrative, you need the foresight to integrate that feature in and have a bigger story. As I've worked with companies at different stages, the stages are incredibly predictable about what people need, what break things like that. So between 40 and 20 it's a totally different story. And there's enough SaaS companies where you can literally like hand pick the selection. And so at 50 million the CMO is going to want to do it. Maybe they need your help, maybe they didn't Think they can do it on their own. So that's like a risky proposition to start with. Then you get forced to below 10 million ARR. And I just don't like that market. It's just a tough market. So. Yeah, but the clear thing is that they don't. If they have a cmo, they probably over hired it too early. So they most likely have like a VP or director of marketing that is leaning more toward like just marketing assistant demand gen than CMO strategists. And so maybe there's a way to plug in there. I think that it's really hard to defend the art, the ROI of the art, until you get to a level where companies budget for it properly. Which is like 50 or $100 million.
- [17:05]
B
Yeah.
- [17:06]
A
So the question is what do you want? Like if you want to make 20k a month and like do better than a job and work 25 hours a week, then you can totally do it. Being a product marketing consultant to build like a multimillion dollar like scalable business, I think it would be a lot challenging in the product marketing realm.
- [17:27]
B
Yes.
- [17:28]
A
Because the thing to think about as a consultant now is what is the thing? Because I am outside of the company, what is the thing that I can bring that nobody in their company has and it's typically either a proven process or the hundred reps that they don't have. Some combination of those two things that says you can do it on your own, but the chances it succeeds is like way lower. The chances you do it on time is way lower. The chances it gets used is way lower. Is it worth it to use me to make sure that this important thing for you is successful? Like it's a no brainer if you're talking to the right people. But if it's just like I do what your CMO or someone could do better, then it's. And I've run into this too. It's just like they're going to do it on their own.
- [18:14]
B
Yeah.
- [18:15]
A
So you have to be what are you bringing to the table that they simply cannot have? And it's different. Right. So like you just want to do the consulting route like you don't need any. I'm really talking like this is a competitive advantage, scaling a business. Yeah. So the original plan was like make a million dollars a year and just start investing in real estate. Right. And like, and then like just LinkedIn started to erupt and like I was at a million run rate in like nine months and I was like, why the fuck would I stop now? I have three people that work for me. It's a million dollar cashflow business, profitable, like, let's go. And the business that I am building now of like top level strategic executive consulting for sales and marketing, that's what I wanted to build originally. But in 2020, all the way up until 2023, literally nobody cared about unit economics. Nobody cared about making smart, precise decisions around budget. And so I'm talking about cac. The people I'm talking to run a million dollars a month on Google Ads and don't measure it. They're just like, yeah, here we go. Another million on SDR is like. And just pouring it in. Investors don't care, company doesn't care. There's no controls around it. So that business, I would have gone out of business if I kept trying to sell something that wasn't appropriate to the market. So what? Where do people want to spend all their money on advertising? Okay, so we'll build an advertising agency and we'll do it way better than everybody else. And it was partially meant to fix the go to market problem because the advertising MQL SVR sales, like that process is so inefficient that it really destroys go to market. So we're having a new advertising strategy. But if you don't say MQLs aren't important anymore, then the advertising strategy doesn't help you very much. So anyway, that company, you know, did a very successful. And then I had leadership and now the leadership is installed and people run it and I own it. And then the market opportunity changed. Where it's like now unit economics really matter now. The models that like a CMO would measure and a CRO use and how they think about strategy, all that stuff is out the window. You can't just add more headcount into it. You can't just spend a million dollars more. You have to be really strategic about how do I make these investments work. As a CEO or CFO that has to basically understand the impact of the investments and then allocate them. They don't have a model to think about that either. And so it opened up this huge opportunity where now I just like was able to have my business partner run that one and start the one that I'm actually really passionate about. Yeah, timing really matters.
- [20:50]
B
Yeah.
- [20:56]
A
I mean like we officially launched it in 2020, January 24, like almost a year. But I've been working on solving this since 2017. So even in the background, what the things we were working on in terms of like how do you measure These things, how do we create new frameworks and mental models for people to think about new definitions? So, like, even though the company started a year ago, it's like the culmination of five years of work.
- [21:19]
B
Yeah.
- [21:24]
A
LinkedIn, where I find all of my employees and customers and business partners and everyone.
- [21:30]
B
Yeah, yeah.
- [21:32]
A
Business partnerships are something that you need, like alignment on what type of company do you want to build and how you want to build it. And then you also need alignment on the financials. I feel very wise on this now, having gone through it a couple times, but most people aren't. Between stock options versus real equity, F Corp. Llc, partnership, ordinary income tax, capital gains grants, notes, like, all. All the stuff that sits on the debt, all the stuff that sits on the balance sheet that I didn't appreciate at the beginning, where most people attach their employment with their equity because it's a stock option, and you really. If you leave, you're not gonna. Most of the time, you're not gonna pay for the stock options, pay the tax, and then hope the company exits. You're gonna just forfeit the options. And so they basically, like, there's no separation between my ownership in the company and my employment. When you start a bootstrap company like this, there is total separation. Someone could come work at your company, needs to get paid salary and commission to do the job that they're hired for, and then separately could spend, make a $200,000 investment in the company for 15% or whatever the valuation turns out to be, instead of them buying an Airbnb and getting a much better return on their investment, working in the company, basically building a set of Airbnbs through a company. And then if they ever say, like, I want to leave, they bought the equity, they leave and they retain the equity and they get the distributions, and they could sell the equity or the company could buy it back. And it's such a better solution than giving people equity. Make business partners buy it and put the skin in the game. And, yeah, I just would never do it any other way. I watch how stock options misalign executives long term. They're fully vested at four years. What the fuck? Why should I stay any longer? And then there's like, these. All these zombie executives that are sticking around at companies, hoping they go public and it might not happen for three years, and they're not passionate about the company anymore, but they're all locked up. And so I don't want that for my company. I want, like, if you want to leave, that's fine. Like, you Bought your equity at the price that was fair market value. Amazing. If I have the money to buy it back to you, and I think the company's going to grow, I will, or maybe somebody else will. I just think it's a way cooler way. I've learned a lot about wealth creation, and I think most people need a stepping stone. Everyone tries to hit the home run the first time, and I think that most people need a stepping stone to get from like 0 to like 2 or 3 million net worth. And then once you have that, be able to get some liquidity and then use that to actually get rich and treat it into. It's not like everybody builds the Facebook. This is my fourth company, technically, fourth llc, like your first company is usually not the biggest, it's usually not the most successful. But so the first two are like, basically just fizzled out. And I had a lot of learnings, but no tangible monetary financial impact, except for the cash flow that I had. And the next one becomes where I get to that first level. Right. And then now that one's running, it has, like, has a substantial cash flow and stuff. And then from there I can start my new one, which I hope is the big one.
- [24:38]
B
Yeah.
- [24:40]
A
Oh, what's your. I don't know. I have like, my personal number, but that doesn't like the. Separating your interests as a CEO and as a shareholder is different. Like, I might only want to get it to 30, but there's somebody out there that wants to take it to 300. It's my responsibility to, for myself, my personal fiduciary responsibility and all shareholders to put the person in the seat that wants to take it the biggest and drive the most value. So at some point, the company might outgrow me as CEO or something like that. And before I was like, I have to be the CEO of this company. There's no other way. And there is the power to founder mode that you don't get from a hired gun. But yeah, there's like a buyback of time type of thing. Like, I. I sold a lot of equity to make this transfer happen to incentivize other people in the company. But I got back 50 hours a week in all of my mind share. And so it was like the trade.
- [25:35]
B
That I made, yeah.
- [25:39]
A
Four. And we're hiring our fifth right now. So it's, yeah, still pretty small, but the new way is build a $10 million company with 10 people. I built my first company. We got to 22, $23 million run rate, and we have like 125 people. And if I could do it all over again, I would figure out how to do it with 25 people. And like not scale a like low margin, low margin offer that's built around headcount scaling. And so technology automation, leverage on pricing by pricing as a solution rather than like a deliverable by the, like a task by the hour. And getting leverage on that because there's things that I can do that add $10 million in value that take me 10, 10 hours. Right. Like why is time for some things, I think time is the best way to quantify the output. The grunt work, the hand work, but the mind work where the only reason I give you good advice is because I've, my brain has been working on this for 10 years. Start charging by the hour is dumb. It's not aligned. Yeah, like I should be aligned to get you the best results in the shortest amount of time. Not stretch it out for a hundred hours because like so I'm still trying to work on that. We don't charge by the hour. We monitor how long it takes to know if we're making money, but we don't charge by the hour.
- [26:52]
B
Yeah.
- [26:58]
A
I love talking about this. This is the. So I've been talking about like tactical marketing for like five years, but this is the shit that I really like to talk about. Everyone I talk to one on one like this, they're like, this is the stuff you need to be talking about. This is like so valuable, so unique because yeah, I've gone through all of this and I literally see how everybody is still like looking at the path of VC and stock options as a founder raising VC and going down that train as an employee thinking that stock options are going to make you attend deca Millionaire. And just watching how it plays out, I see the financials and I talk to all the executives and there are very few people that I know that made more than 5 million bucks on a SaaS exit. No one except for a founder. Totally screwed.
- [27:43]
B
Yeah. Yeah.
- [27:45]
A
And then I've learned a lot of cool stuff about debt. Obviously people use debt to get, make real estate and get super rich and it's like. And private equity uses debt to make their investments pay off better. And like smart people use debt, but they know how to use it. And so I've learned some like, cool, I made some mistakes with debt, not like consumer debt. And then I've had some really good moves with that. And so I think I have like a lot to say on that one too because I think a lot of people are afraid of it. But literally you buy any piece of real estate, you need debt. And if you're like buying into businesses or like trying to make next levels of businesses, like refinancing your business is a thing you can do that. Like get to 2 million. You have a million in the cash in the bank, you have some assets, pull the million out, put the bank's million dollars in. You have a million dollars in liquidity that doesn't get taxed. You pay the interest and then you literally get a million dollars in liquidity. And like most founders don't, they let the million dollars sit in their bank account making 0.1% interest in the checking account or 3% in the Treasury. And they could be pulling that out, investing in real estate, other companies, private equities, whatever, and make the money work way harder. It's really like a. It's like a finance thing that gets you from. Everyone can figure out how to set. Not everyone. The levels are figure out how to sell something and then figure out how to sell something profitably and scalably and then figure out how to dominate the balance sheet, how to use debt and equity to extract and create value.
- [29:05]
B
Yeah.
- [29:10]
A
It'S been so fun.
- [29:11]
B
Yeah. Yeah.
- [29:21]
A
I leave like all my options open. There's a part of me that thinks like, because if I'm working with like the right people and the right customers on the right stuff, it like fires me the fuck up. Why would I want to sell that? And so I'm just like a lot more focused on creating the conditions where I don't loathe the customer meeting on Thursday. And if I can do that, then I'm not sure I want to sell the company. I might put other. I want to hire and delegate so that I only focus on the things I really like to do and I add the most value. So that's an obvious one. But to. You don't need to necessarily relinquish control or like being the highest ranking executive. I think that a lot of CEOs like a barometer of how effective their company is is how little they can work. You still have to do stuff, but at four people, you have to do everything. But at like 30 and 50, I think it's figuring out how to just do the most important. It's really about making like three to six really important decisions. Well, every year. I never looked at it with such simplicity before.
- [30:23]
B
No.
- [30:27]
A
Generalist that can do enough of the stuff that my customer needs. Take the most delivery work off my plate.
- [30:32]
B
Yeah.
- [30:37]
A
I mean Like a generalist to an extent. Like they're like, you know, VP or C level revenue leaders at former companies and now work at my company. But when you say generalist, it's like I'm not hiring a sales rep. I'm not. Yeah, I'm hiring somebody that can do. Has the expertise that can like basically try to replicate me as not as close as possible. I'm not trying to get someone that's a clone of me. I'm just trying to get someone that can do what my customer needs.
- [31:05]
B
Yeah. Yeah.
- [31:06]
A
And so for some companies that might be a $400,000 C level executive, for other companies might be a $40,000 designer, it's just like, what is my customer? Depending on that, what does my customer need?
- [31:16]
B
Yeah.
- [31:19]
A
No, everywhere, U.S. and Canada.
- [31:22]
B
Yeah.
- [31:26]
A
I mean every. Just the people that worked at HubSpot and Drift. There's not that much SaaS in Boston.
- [31:36]
B
Yeah, yeah.
- [31:37]
A
We're all over the place.
- [31:38]
B
Yeah.
- [31:39]
A
And it creates like tax complexity. Having employee like full time W2 employees in like 10 states. It's fun, but like those are just things that you run into. Like, and then once you like the problem happens, you figure out how to fix it. Then the next time you do it, you just, it's not a problem anymore. And it's just like every entrepreneur needs to go through all the same stupid pain points and figure it out. And then like, so From I've gone 0 to 1, 1 to 10, 10 to 20, and now I'm doing it again the 0 to 1. I did like 60% faster the second time. I know where to get my financial model, what it should look like, what tools that I need, what people that I need, when should I hire them, how do I decide, how do I need to price, what do my proposals look like? All that stuff is fast tracked the second time. So you like fix all the problems and the next time you do it, you don't have to, you don't have to think about it. You already know and then the same thing. So 1 to 10 will also be fast for me. And then eventually I'll get to a place at like 10 to 20 where I start running into problems that I haven't proven that I can fix yet for my own business. And so like as a consultant, I can go in and like, you're a $20 million SaaS business and need to fix that. That's a whole different, it's a whole different solution than fixing your services business as a CEO. But I think there'll eventually be Quite a bit of overlap. Just the financial profile of how it's more about how the companies run, run the company. That's different between how I run my company versus how a SaaS company does. Neither are good or bad, but I just won't spend as much on sales and marketing to achieve the outcome because I think that there's plenty of ways to be incredibly efficient. And even if I had 80% gross margins, which in my last company I didn't at this company, the potential would do 75, 80% gross margin. Even then I wouldn't spend 30, 40% of revenue on sales and marketing. I just wouldn't. It would be 20. And it just forces the business to get customers to scrutinize. So sales and marketing investments. At a big company, they'll spend 100k and not care about it. At a company that only has 100k, they treat every dollar like it's their last dollar. And so just providing the appropriate amount of resources but not excess for people to do what they need to do.
- [33:49]
B
Yeah.
- [33:54]
A
Not a fucking chance.
- [33:56]
B
No.
- [33:56]
A
No. Two months into it I was like working 15 hours a week and making twice as much as I did at my job and doing all the things creative stuff that I want to do and like a bunch of shit. And I was like. And then like it took me another six months to the LinkedIn profile started to grow and then there was a day where I basically like, I think my company hit about 2 million on a Friday and I just like broke down in tears and I was like, I'm literally never going to need a job. I like, I have built a skill like a learning a knowledge set where even if it's not B2B SaaS, like I could a restaurant, a storage unit, a cupcake plate, whatever. Like I understand business enough to figure out is this, can this work? How do we get customers? How do we make it profitable? So it's just a. Now just a great skill.
- [34:42]
B
Yeah.
- [34:49]
A
It doesn't make a lot of sense on paper, but. But it's been fun.
- [34:52]
B
Yeah.
- [34:52]
A
Yeah. Because I like, it's ironic because in like 2011-2014, I basically like optimized manufacturing facilities.
- [35:01]
B
Yeah.
- [35:01]
A
Figuring out how to get different suppliers to get parts for cheaper and automate certain processes and like take things that like a skilled person does and make it repeatable to do by someone else. It's way less expensive. And like, how do we do all this stuff? And then if you do that, you can make a significant impact on the company's profitability and Efficiency and scalability. And now I literally just take all those skills and do the same thing for people that are trying to make revenue. And I think about it just like it's a revenue factory and you have people and processing suppliers and I don't know, it's like I see the matrix now. It's just very simple to me. I don't know, people are like what the fuck is this demand gen person doing? They used to be a manufacturing bleed process optimizer. Who the fuck is this guy? And then it eventually all makes sense. And like the. I studied electrical engineering too which like doesn't make sense on paper but like a lot of the engineering and science principles make a lot of sense now. Yeah, I think that designing, it's like systems engineering is like building a go to market.
- [36:02]
B
Yeah, yeah.
- [36:03]
A
How do all this, how does one signal affect something way downstream? How do you connect those things?
- [36:08]
B
Yeah.
- [36:11]
A
It'S so fun.
- [36:12]
B
Yeah, yeah, yeah, yeah.
- [36:15]
A
So like I would say it's just if I were in your situation, not what you would do. If I were in your situation, I would be a product marketing consultant, figure out how to change the pricing so I get to 20k a month and then after that I can do whatever I want.
- [36:27]
B
Yeah.
- [36:32]
A
I know a lot of people that feel that way. I felt that way five years ago.
- [36:35]
B
Yeah. The.
- [36:37]
A
Unless you just have a much different lens on how you choose the company. Yeah, I watch a lot of smart people going to a lot lighter funded companies that aren't going to raise a lot of institutional capital, that understand the company's financial profile, burn things like that before joining, which is not something that I did five years ago. And not most people don't ask that. And so I just think the selection pool of like what makes a good company, especially for a marketer is just very small. It's very small. Yeah, yeah, I know it's so weird. But they're like self created, all of them. Like the investment and then the adjustments in the cap table and then the board formation are the start of all the pressure and problems. And so it's more like if you had a pie of 100% of companies, only 5% should raise VC, but right now 95% are. And so, and just the outcomes aren't large enough. The timelines are getting so long, it's too competitive and it's not like it was never like this. But you can't just raise 30 million bucks, add $20 million to sales and marketing and double your company. And so there's so many companies that are 20 million that do that and then literally they get to 30, but now they're burning $10 million a year and they have to fire half their sales team. It's just like, why are we doing this still? So I just don't like those, I really don't like those situations. But when you get a little bit further upper market and it's really just when you change from growth venture capital to smart growth equity or private equity that the growth objectives and things like that become a lot more realistic and achievable because it's just how much expectation can you have at 50 million ARR? It's just like if we add 25 million, that's 50% growth, that would be incredible. And that's a lot of. We've spent 10 years to get to 50 million. Now we're going to add 50% more in one year. Yeah, maybe. But a lot of people will be pumped for 30 or 35. And like then when you, if you have good NRR and you break down a new logo, the new logo target's totally reasonable. And like when you're at 3 million ARR, and you're trying to get to 10 million and you have no historical data, you have no process, you have nothing proven. It's just like, sure, some companies make it, but it's a total mess. Like, just not a mess that I like to be a part. Like you guys can all figure that stuff out and then come find me when that, that mess is taken care of.
- [39:19]
B
Yeah, yeah.
- [39:26]
A
I like when the companies enter right there. It's a great entry point.
- [39:29]
B
Yeah, yeah, yeah, yeah, yeah.
- [40:04]
A
Finances.
- [40:10]
B
Yeah.
- [40:10]
A
I've realized that like too late stage is also tough. Too much politics, too slow. It's really the politics that pissed me off and that it, like most companies end up so department siloed at that level that you just. There's just these big cracks and holes that nobody's fixing and that nobody's. No, everyone has $20 million in budget and nobody's going to put their budget to fixing that thing that sits in the middle between people, even though everybody needs it. Yeah, there's a sweet spot for sure and it takes some time to figure. I didn't appreciate how much different Stage was up until the last 12 months. And now like if you. I look through and I see the stream of advice going on on LinkedIn and I'm like, oh, well that's applicable to companies that are publicly traded but are definitely not going to work for the 30, $50 million company. Or this advice is for a 2 million ARR SaaS company, but this would be a fucking destroyer for a $50 million company. And I know that most, because I didn't even appreciate this until recently, that most people do not have the brain experience to sift through the advice and figure out, oh, that one's for me and these 10 aren't. And so it's just blanket advice that shouldn't be blanket advice.
- [41:22]
B
Yeah, yeah.
- [41:32]
A
That'S totally true. Yeah, yeah. I think there are different stages for CMOs and CROs are totally real. And I think that the same thing exists in sports teams. Like sometimes you need to start quarterback, other times you need someone else.
- [41:44]
B
Yeah.
- [41:45]
A
And so I think the expectations of it's really like tours of duty now is really the way I look at it. It's like a season and hopefully there's just a clear financial outcome for the revenue executives that I just wit. I like have started to think about it more like how sports do athlete contracts and it's like, look, this is a three year gig. This much is guaranteed. Here's all the additional like potential bonuses and structures. And if things hit. This is about the amount of money this contract is worth. Are you in it for three years or not? And then like after three years maybe we'll renew the contract, who knows? And it's not really a contract, it's more of a verbal agreement. But having somebody know that like, hey, there's a start and finish here, I think can be really powerful actually, and not ex. And then if it works out great, but not expecting people to stay forever and that they're like, get us from 20 to 50, then we're going to need somebody else most likely. And sometimes you're like the Tom Brady that plays on the same team for like almost the whole career. Right. But the reason is that that software company, mostly companies that raise institutional capital do not incentivize people to stay for a long time. The sales compensation plan is like the number one most obvious. Why is there so much sales turnover? Why do our good reps not stay? Yeah, the ones that make a million a year every year. Yeah, they're probably going to stay at your company. But why is everybody else turning over then we have to rehire. It's so expensive. We have to ramp. We have people out of territory. And it's because if you look at the places that have good retention in sales, the salespeople get a perpetual commission on customer retention. And so they, they over time build up this passive income stream that comes from all the customers that they've closed, how they've been there, that it's never worth it for them to leave. And then you just have this level of complacency between like, if they're making all this money passively, are they still going to continue to do their job? I think that's more of like a motivation and management thing than an incentive thing. And then all of a sudden like, what if you had like 5 or 10 reps that were so productive instead of 50 fucking reps that you spread out the leads to all the time and those five or 10 are going to be with you forever and they're getting their cash flowing an extra 10k a month because of all the customers that they. And then they're checking in with the customers they sold and making sure they're happy because they get 1% or 2% of that transaction. There's just no long term incentive for anybody outside of stock options. And stock options is not. It's a handcuff, not an incentive. Yeah, it's like a total. I get that people can get rich on stock options. Totally get it. But it's mostly a facade, especially if you have common shares, which is what most people get.
- [44:24]
B
Exactly.
- [44:28]
A
If you're below the investors, which is everybody. If you're below the investors, then it gets pretty hard.
- [44:34]
B
Yeah, yeah.
- [44:53]
A
I know. And I saw it at my last business because like there were people that were the key point of contact for $2 million in business, but they don't have a long term incentive. And they, somebody else comes and says, I'll give you $50,000 more to come and do this job and they go and take that and all of a sudden $2 million in business is at risk. And I'm like, that's fucking totally stupid of me as the owner to be vulnerable to that to happen. How do I create a system where it is set up where every person wants to work here forever? How do I create a system where they are incentivized and over time tenure continues to get rewarded and things like that, where back in the day, and even at some, like a law firm or places where they have partners, like people work for seven years, become a partner, work for the company for the rest of their career and then get a distribution, a pension distribution on the stock that they purchased over 35 years and work at one company, like one or a couple companies their entire career. And it's a good, good financial setup. So I'm trying to crack that code because if you're in the consulting agency. You're really in the talent management business. It's not even. It's not sales and marketing. Even though sales and marketing helps the real businesses. Talent management. You're selling people. Yeah.