Ep. 486 - Infinity Constellation CEO, Brennan Pothetes

Summary

Podcast Summary: Ep. 486 - Infinity Constellation CEO, Brennan Pothitas

Introduction In Episode 486 of the "Second in Command: The Chief Behind the Chief" podcast, host Cameron Herold engages in an insightful conversation with Brennan Pothitas, the CEO and former COO of Infinity Constellation. Released on June 24, 2025, this episode delves into Brennan's career trajectory, leadership philosophies, and the innovative business model of Infinity Constellation.

Brennan Pothitas’ Career Journey Brennan begins by sharing his diverse career path, which spans from roles in risk management and compliance within the banking sector to pivotal positions in pioneering fintech companies like Simple in Portland, Oregon. His transition to New York City saw him contributing to Bloom Credit, a leading credit data company, where he expanded his expertise beyond product development into sales, operations, and recruiting. This broad skill set ultimately led him to co-found and lead multiple insurance companies before taking on the COO role at Infinity Constellation—a holding company specializing in AI-driven businesses.

Key Lessons from Leadership Challenges Brennan reflects on his early experiences, emphasizing the importance of maintaining balance and prioritizing mental health to achieve high performance. He highlights two major lessons:

1. Personal Well-being: Ensuring physical fitness, adequate sleep, and activities that recharge him are crucial for sustained leadership effectiveness.
2. Facing Problems Directly: Instead of outsourcing challenges, Brennan advocates for confronting and understanding problems firsthand to build expertise and make informed decisions.

Building Infinity Constellation Infinity Constellation was conceptualized as the first AI-focused holding company, aiming to launch and scale multiple AI service businesses efficiently. With eight subsidiaries under its umbrella, Infinity has rapidly grown to generate substantial revenue within its first year. The company’s unique approach involves:

• Capital and Human Efficiency: Centralizing essential functions like finance, IT, HR, and legal to streamline operations across all businesses.
• Founder-Centric Model: Recruiting repeat founders and empowering them with the necessary resources and infrastructure to build and scale their ventures.
• AI Integration: Leveraging artificial intelligence to disrupt traditional service industries, creating scalable and innovative business models.

Leadership Transition: From COO to CEO As Brennan transitioned from COO to CEO, his focus shifted from internal operations to external strategic initiatives. While his COO role was centered around optimizing internal processes and supporting subsidiary CEOs, his CEO responsibilities now include:

• Investor and Board Relations: Providing context and strategic direction to investors and the board to ensure aligned governance.
• Strategic Positioning: Concentrating on market positioning, strategic growth, and long-term vision for Infinity Constellation.
• External Focus: Leading the company’s narrative, fostering investor relationships, and driving the overall strategic agenda.

Recruiting and Building Teams Infinity Constellation prioritizes recruiting top-tier talent through its extensive network and a rigorous selection process. The company seeks individuals who are not only experienced but also embrace technology and the transformative potential of AI. Brennan emphasizes the importance of alignment between employees and shareholders to foster a unified vision and drive sustainable growth.

Investor Relations and Capital Management Brennan discusses the company’s recent successful fundraising of $11.5 million from a diverse group of angel investors, family offices, and venture capitalists. He underscores the significance of aligning investor expectations with Infinity’s capital-efficient and profitable growth model. By maintaining strong fundamentals and focusing on cash flow, Infinity ensures it remains attractive to investors who value long-term, sustainable growth over rapid, unsustainable scaling.

Future Outlook and Strategic Vision Looking ahead, Infinity Constellation aims to continue its expansion by launching new AI-driven businesses while maintaining its commitment to profitability and efficiency. Brennan envisions Infinity potentially going public, driven by its innovative approach to disrupting longstanding service industries through artificial intelligence.

Advice for Aspiring Leaders In closing, Brennan offers heartfelt advice to his younger self and emerging entrepreneurs: prioritize enjoyment and passion in your endeavors. Embracing the journey with enthusiasm not only enhances personal well-being but also fosters creative and effective leadership.

Conclusion This episode provides a comprehensive look into Brennan Pothitas’ leadership journey and the strategic innovations driving Infinity Constellation’s success. Listeners gain valuable insights into balancing personal well-being with professional responsibilities, building efficient and scalable business models, and fostering strong investor and team relationships. For aspiring COOs and CEOs, Brennan’s experiences offer practical guidance on navigating leadership transitions and driving sustainable business growth.

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Note: This summary is a paraphrased overview based on the provided transcript and avoids direct quotations to respect copyright guidelines.

Transcript

[Cameron Herold]

Hey, it's Cameron Herald, the host of the Second In Command podcast. Before we dive in, there's something you need to know. If you're a coo, VP Operations, or you're in any role where you're the second in command to the CEO, the COO alliance is the place for you. If you're the integrator to the visionary, you're going to want to join us. The COO alliance is the world's leading community for the second in command. We've had over 500 members like you join from 17 countries to grow their skills, connections and confidence. You'll get the tools, friendships, and a 10x guarantee to ensure that you get your money's worth. Go to cooalliance.com to learn more and see if you qualify. You can even book a free call with our team to ask questions. Now, let's jump into this week's episode.

[Brennan Pothitas]

And the only way you're going to get into that flow state is if you're exercising, you're sleeping well, you're doing whatever charges you up, because if you push yourself. There was a role I had many years ago where I tried to just brute force the role and I ended up just like kind of breaking and failing in a lot of ways. And that was really pivotal to me to get like my mental health in order, get my fitness in order, get all aspects of my life in order because it creates higher performance. And that's, that's probably like my first biggest learning. And then my next is like, don't outsource your problems. And so I used to kind of probably have like, I guess I would say a confidence issue around, oh, I really don't know how to do xyz. So like, I'm going to find someone and hire them to do it. And a lot of founders, I think, try to just like pay to make that pain go away. And that thing just drives you to your problems in a Ferrari. Like you're basically just burn a bunch of cash and you have to really learn that problem yourself. Then you're going to have the expertise to know who's really good and credible to be able to solve that problem. And turns out you might actually end up being the expert on that problem yourself. Welcome to the Second In Command podcast, produced by the COO alliance and brought to you by its founder, Cameron Herold. In the second in command podcast, we talk to top COOs who share the insights, strategies and tactics that made them the chief behind the chief. And now here's your host, Cameron Herald.

[Cameron Herold]

All Right. You're going to love this episode. Today we have the CEO and former COO of a group called Infinity Constellation. His name is Brennan Pothitas. Brennis is a very, very strong CEO, but it's really cool to know that his transition and how he moved from that COO role into the CEO role of this holding company that owns eight companies in the AI space. You're going to learn a lot from him on leadership, on growth, on finance, focusing on what really matters, and also on taking care of himself as a leader, almost like someone would take care of a racehorse to make sure that they're actually ready and winning races when they are racing. So we'll see you on the inside. You can listen to all of our episodes on Apple and Spotify anywhere you listen to podcasts. You can also watch them on our Second in Command podcast YouTube channel. This will definitely one to bookmark, to share and probably listen to more than once. See you on the inside. So, Brandon, welcome to the Second In Command podcast.

[Brennan Pothitas]

Thanks for having me.

[Cameron Herold]

Yeah, looking forward to this very much. You and I just got to chat just a little bit in the back channels before we went live that you're from Portland, Oregon, originally. And I had started a business up there about 30 years ago, which brought me to the West Coast. So we both have some pretty good memories and times on the west coast or Northwest. How did you end up going from, I guess, a kid coming out of school a bunch of years ago to where you are now? Give us the short story, because you're now the CEO and there's a reason why we have you on the podcast because you moved from the CEO role. But how did, what was your career to get you to the CEO of Infinity Constellation?

[Brennan Pothitas]

Yeah, that's a great question. I've always been, ever since I was a little kid, I've always been having my own businesses and I've been like this generalist in the business. And so I started my career actually in risk and compliance and banking, weirdly enough, and then basically joined one of the first neo banks called simple in Portland, Oregon. And that's really where I worked really closely with one of the co founders, Shamir, and started in a finance role, but then sort of became a generalist in that and then ended up in a product role. And then from there I moved out to New York City where I helped build Bloom Credit, which was like one of the first really, like credit data companies that was, you know, furnishing and cleaning credit data and doing like end customer APIs around credit data. And that's where I worked with Matt Harris, who is the CEO and the founder at the time. And I started as a product role, really working on software, but I ended up doing a lot more in the business itself around like sales, operations, recruiting. And so even though I had sort of a VP of product tile, I would have, if I looked back now I'm like, I was really like a CEO and then I went on to build a couple of different insurance companies. And from when I sold my last insurance company, Butter, to Odeco, which is a supply chain company, the founder of Invisible, which is one of the world's largest a training companies, reached out to me and said, hey, would you help us spin businesses out? Because we have a really large AI data training business and, you know, they're serving the Fortune 500 of the world, sort of being Palantir for operations. And they were trying to have us build new companies and they, you know, we were talking about building this Holdco and. And I wanted to be a founder in that Holdco and they were like, great, you should come on a CEO and support the team. And we need a lot of help on, you know, finance and operations and recruiting and reporting. And so that's. That was the first time I had the COO role and it lasted all of, I don't know, like maybe 90 days or 120 days. But then I look back at my career and really like just being, being sort of internal CEO or being generalist is something I played a couple times in different roles in the past, and it fit really nicely. That's how I sort of like came from Portland and ended up being a CEO in New York.

[Cameron Herold]

I love that. All right, so you look like you're about 24. You're clearly not. You got the benefit of some age going for you. How old are you now? Mid-30s.

[Brennan Pothitas]

I just turned 38 tomorrow, actually.

[Cameron Herold]

Okay. Same age roughly as my wife, 38. So you're. You've been around long enough to have done what you've done. What do you think were the major lessons from kind of the crisis of meaning? Did you have any lessons from the edge where you were, you know, on the cusp of getting fired or on the cusp of pulling all your hair out or on the cusp of stressing out that you can talk about kind of some of those lessons for us?

[Brennan Pothitas]

Yeah, I mean, I think balance and mental health is incredibly important. Right. And so I talk to founders every day because I'm trying to recruit them and to build stuff with us. And it's really important to not only be 10x good at your craft, right. But you also have to love it because then you're going to outwork everyone around it. And the only way you're going to get into that flow state is if you're exercising, you're sleeping well, you're doing whatever charges you up. Because if you push yourself. There was a role I had many years ago where I tried to just brute force the role and I ended up just like kind of breaking and failing in a lot of ways. And that was really pivotal to me to get like my mental health in order, get my fitness in order, get all aspects of my life in order because it creates higher performance. And that's, that's probably like my first biggest learning. And then my next is like, don't outsource your problems. And so I used to kind of probably have like a, I guess I would say a confidence issue around, oh, I really don't know how to do xyz. So like I'm going to find someone and hire them to do it. And a lot of founders, I think try to just like pay to make that pain go away. And that thing just drives you to your problems. In a Ferrari, like you're basically just burn a bunch of cash and you have to really learn that problem yourself. Then you're going to have the expertise to like know who's really good and credible to be able to solve that problem. And turns out like, you might actually end up being like the expert on that problem yourself. And so that's something I'm always like reminding my team, reminding myself to do. But those are like my two big levers.

[Cameron Herold]

That's interesting. I don't think I've ever heard anyone talk about that. Outsourcing your problems. When I was replaced as the COO for 1, 800, got junk. I took them from 2 million to 106 million. They brought in the former president of Starbucks USA to bring my replacement. Took about a year to find her and she was let go a year later. And she was definitely outsourcing the problem. She wouldn't listen to the franchisees, she wouldn't listen to the front line. It was always hire these big corporate consultants to come in. And I think she just wasn't even close enough to the core of the business to really even get it, which kind of makes sense. So on some of these stages of your growth, are there any big lessons from the transitions that you pulled when you move from one company to another? I think we often Forget about those transitions, but did you ever learn anything in those? And starting in a new company, how to figure out the new company quickly, how to build relationships with people that are already there? You know, any of those kinds of lessons that come to mind?

[Brennan Pothitas]

I mean, I think this kind of goes in line with the outsourcing of your problems, is like get down really tactical on the data and the customer. And I think a lot of people talk about this like at least in like startup land and in scale land, like you want to go down, understand the customer's needs, understand the data, what's really driving the business. And whether you're in a finance role, COO role or any role in the business, like what are the drivers of your business? And so you know, usually in like an interview or when I'm coming into any new company, I'm like, well, creating a new company, well, what are the drivers of the business? Where are we constrained? Are we going to be demand constrained, supply constrained? What's our power? What's our advantage? Are we counter positioning the market? Then I go in and say, okay, let me try to like prove that wrong or prove that right, like where am I wrong? And you know, I started my career in risk management, compliance and banking. And I had a, I had a really like awesome VP at the time and she would tell me like, if you can't explain the risk, like you can't write this report if you can't explain to me what the risk is here. And so that's like one of my favorite questions of myself and of people in the business is like, well like what's the risk? Like what's the business risk? And I spend a lot of time trying to understand that as quickly as possible. And then especially in like really fast evolving markets like AI or in like black swan events, you know, when there's like a recession or something like that, like you have to understand those risks change. And so like that's something I like really dig into to like, you know, when I'm creating a new company or coming into a new role or, or anything. And it's just been instilled in me since, you know, my early 20s in my career.

[Cameron Herold]

I think there's a correlation between that and something Elon Musk said about a year ago, which is if you as the CEO or CEO of your company don't know the one big problem facing your company, you are the problem, right? So if you can't explain this risk, you're the risk. There's something interesting there in terms of Taking care of yourself. Then I want to ask you a little bit about Infinity Constellation. But in terms of taking care of yourself, what is your specific. Do you have like a morning routine, do you have an afternoon routine? And do you treat taking care of yourself as kind of part of your core responsibility? Do you look at getting to the gym or going to yoga or working health habits? Do you ever take this as oh, I'm taking time away from work or do you look at this as you're like a racehorse and you need to take time to take care of the racehorse.

[Brennan Pothitas]

In my early part of my career I was very scarcity minded and I was all about grinding it out and grinding out every inch in the business, which I think there's times when that's important, you need to hit the afterburners. But fundamentally most of these high growth businesses and I'm sure like with 1-800-junk like there's power law advantages like hiring the right employee, doing the right ad, like really spending that right time. And you have to be in a very like present flow state of mind to be able to execute on that stuff. And so as I sort of transition into different roles, like for me it's really like part of my job. And if I'm not doing that, I'm, I'm failing because I'm the biggest risk to the business because I'm spiky, I'm under optimized, I'm not communicating well to my board. Usually communication completely drops like when you're not taking care of yourself. And so that regiment looks like this year I actually cut alcohol completely, which was a huge lever. And I know everyone's talking about that right now, but I organically did that. And so you know, like all frosty CEOs, I struggle with anxiety or CEOs struggle with anxiety. And so taking alcohol as a depressant out or it really helped. I make sure I get over 7 hours of sleep a night and plug to 8 sleep. They like boost my REM and boost my other sleep by like about 20, 25% which really matters. But the biggest thing is whether I have to do it in the morning or I just do it on my time. I have my team book out at least an hour for me to weightlift multiple times a week, like over three times. And I lift heavy, heavy weights. And I just, you know, for me like it might be Pilates, it might be yoga, it might be going for a H, but just that movement. But for me personally, Olympic lifting really took me back into like you Know when I was playing sports in high school again and I just like really, really love it. So it almost gets into like a meditative state for me. I won't look at calls, won't look at emails, and I just focus on that. And that's me time. And more time than not I come out of that and I go and I have an idea and I go, oh my God, I have to text this, I have to text this person right now. Because I just thought of this and it let my brain process. And what I found out is that this zoom world where we're in zooms as sea levels back to back to back to back. You're getting all your sort of brain brained and you're not able to process where if you remember when we're all like in person or if you're in New York walking around, when I'd walk between meetings, that's actually buffering time to then reflect on that, think about it, be creative. And so I've put a lot of stuff to just get creativity back in there and then the last thing I do is, you know, I've done executive coaches before in my past, but like I also have a pretty like regular therapy routine as well for like the personal side of my life. And then the one thing that I've taken from others is I generally when I'm home every day at like 6, I make sure I'm there cooking with my wife and being present with my wife. She's a repeat founder too. And that's just something we do. And I might do that, go to bed and do emails later. But like that's just like part of my routine. And so all those things together, like family health, mental health, physical come together to help me perform better. So I pretty much like explain, you know, my therapist or people I'm training with, I'm like, I'm like a high performance athlete. Like I'm working in AI startups and I created eight of them. Our business is growing really fast. Like I need to eke out every bit of performance I possibly can. And so I'm always like looking for new ways to sort of like eke that out and, and I wish I had that. Like this mindset has sort of been something I've adopted really recently in the last couple years. I wish I would have like when I was 24, figured this out. Cause I would have been way ahead of where I'm at now.

[Cameron Herold]

So yeah, totally get it. Totally agree. And I quit drinking two years and two weeks ago.

[Brennan Pothitas]

Congrats.

[Cameron Herold]

Decisions I ever did, it certainly gets way easier. All right, so Infinity Constellation. I want to find out a little bit about the business. Then I want to talk to you about the transition that you've made from COO to CEO and what that transition was like and what the differences in the roles are. So tell us a little bit about Infinity Constellation.

[Brennan Pothitas]

Yeah, so Infinity was born out of a company called Invisible. Invisible helps train 80% of the world's LLMs and then helps implement those within the Fortune 500. So like really large businesses. AI training and applied AI. The founder Francis basically came to me because I was an early. I was their first enterprise customer many years ago. And him and the board approached me and asked me to help b CEO of a holding company that they were concepting where we would find AI service businesses and launch them. And so we were, we were struggling with the innovators dilemma, right where we have one really big customer over here. But how do we launch these, these small businesses now, but they could be $1 billion disruptive business tomorrow. And I think it's a problem every business has around allocation and budgeting. And so what we came up with is first we were like, okay, should we do a venture fund or should we do a PE model? And we realized that actually a Holdco is a great, a really, really great model for this. I think there's a Canadian company, Constellation software, that I think did this. And there's also a lot of like the most famous is Berkshire Hathaway, but there's ones for dating apps and crypto and cpg. And the benefit of a holding company is that you can be very capital efficient and human efficient and equity efficient. And so we created the first AI holdco. We have eight businesses. We've gone basically zero to 6 million of arrow in 12 months and then we just raised 11 and a half million. But what those businesses look like is we have a design as a service, business radiance. And so it's the best in the world. Design fast, better. And the secret is we take AI process platforms and we build those around designers. Another business, Everest. We figured out that a lot of people are trying to commoditize executive assistance with AI. I'm sure you've seen a lot of the like $100 a month, you know, scheduling EA. We actually figured out, we're like, no, no, people are really important. Let's go find the best EAs in the world from like tier one venture funds. But then let's recruit them and then build tech around them. So CEOs COOs like yourself could basically have a best in class EA with the tech around them so they're more efficient, better, faster. And so we've done this eight times and we, we generally go and hunt and find a paired like a repeat founder and we place an operating team and then we find a great applied AI person and we build a business and we seed it and so that's how it works. And you know, for me it's been a pretty incredible process because I started really foundationally building this business as a CEO and then the board wanted me to come in and be CEO and raise external money and launch externally from Invisible, which we just finished. And so we're very happy about that. And you know, the rest is hopefully going to be history.

[Cameron Herold]

But I love the model. I love, I love how almost infinitely scalable it is because you have so many different roles that you can hire around and empower and then so many different that you can scale out into different categories or verticals. And it follows the adage, I've been saying for about probably two years now that, you know, employees don't have to be worried about being replaced by AI, but employees have to be terrified about getting replaced by employees who use AI. It's kind of like 25 years ago when I walked into. I can't believe it was 25 years ago. Holy shit. 25 years ago I walked into 1 800, got junk and the CEO looked at me and he was laughing. He goes, you have a laptop. He goes away, you're going to carry that from meeting to meeting. I'm like, yes, that's exactly what I'm going to do. And two days later, Brian went out and bought a laptop. He's like, oh, I get it.

[Brennan Pothitas]

Right?

[Cameron Herold]

And now it's completely ridiculous to think that you would even want to have a desktop like a laptop. So it's a tool. And for you guys, one of the crux isn't really coming up with new ideas. It is around people, right? It is around recruiting great CEOs and CEOs. So what's your model for recruiting great people? And do you work with executive recruiters on that? Do you just leverage PR for that? Can you kind of talk to us about what you do?

[Brennan Pothitas]

We go on some world class podcasts like this and then. No, but largely we are people constrained and so we have access to capital. Our business grows fast, we know our model works. And so really it's finding the right people who want to build with us. And so we typically go out to our network. So you can go to our site and you can apply. We have a great careers page and across our eight companies and then we're probably going to launch another three later this year. We're looking for right sea levels. Sea levels, right operators and our vibe is like where we start capital light. We build a real business with profitable unit economics and we, we like people that want to get in and build with us, that have a good track record but really want to apply AI to a services space. And so you know, typically I'm finding people across all different industries, all different stages of career and it really comes down to just, you know, are you, do you believe AI is going to be fundamentally like disruptive? And then two like do you have an ability to come and put your shoulder against something and make some motion? And that's at the C level, the CEO level, CTO and on. And yeah, we're, we're definitely be hiring a lot this year because we need more and more. Good.

[Cameron Herold]

My guess would be that you're hiring in the middle to younger part of Gen Y. You're hiring the 26 to 40 year olds because they've got some business experience but the tech stack experience, right. They actually understand and embrace technology. Whereas you look at a Gen Xer like me, I'm at the first year of Gen X. I'm almost a technical luddite. I'm, you know, I'll be 60 years old in October. I'm not your guy. Even though I have all the operational experience. Is that true?

[Brennan Pothitas]

I think we'd like, for me it's a state of mind. I think in a case like you like you come in with a great background and a service industry we don't know, like that's really, really valuable. Like I think Elon Musk I'm not.

[Cameron Herold]

Looking for, I'm not looking for a job. I was just.

[Brennan Pothitas]

But like yeah, I think Elon Musk said that like most foundational models have like sucked up all the available data on the Internet and now it's like the thing that, that, that isn't on the Internet that's really valuable. And so a lot of people that are in services career are actually really valuable C levels to us. And so for our team we're really great at hiring applied AI people. And so I actually have some, some CEOs. Some of the most successful CEOs are like definitely they're not millennials and they're not Gen Z. So like you know, I won't call them out but like I Think that's a little bit of the secret sauce is like applying that, that deep expertise plus the, you know, the AI angle. Whereas conversely, like some of our best AI engineers are really early career folks because the engineering is actually completely changing and how you prompt engineer is really different than how you code. And so it's very interesting, like roll by roll, how we're being disruptive or being disrupted right now by AI in general.

[Cameron Herold]

Interesting. Well, I was a reference for Elon and Kimball in their very first round of funding for Zip2 back in January of 95 when they, they wanted to raise $600,000 for Zip2. And Kimball called me that night, he's like, what did you tell them? I'm like, did I screw up? He goes, no, we wanted 600 grand. They gave us 3 million. That was 30 years ago. But they based it all on his operational experience. He didn't know. And Elon was unbackable because he was the tech guy. Well, I've got a couple of referrals I'll make for you when we get offline. I've got three different amazing search firms that specialize only in kind of C level talent, but I also have a fourth that only specializes in kind of director level ops, people that are really, really. Hey, it's Cameron. I hope you're loving today's episode. Quick question for you. Does your company have a strong leadership training program in place to grow the skills of everyone who manages people? If you want to help yourself and your company grows, get everyone who manages people learning from my invest in your leaders online training program. There are 12 core leadership skills that I cover online and they're all going to really grow. CEOs pay me $78,000 a year to coach them one on one. And now you can all benefit for 1% of what they pay me. These are the same leadership skills that I created and certified everyone in at 1-800-got junk when I was there as COO. Go to investinyourleaders.com today and use promo code podcast10 before the end of the month to get 10% off each manager you sign up. Now back to the show. Strongly trained. Love that all of them will be kind of good secret weapons when you're on a growth trajectory because it's, it's how fast you can bring the good people in. Right? You lose so much time where momentum is momentum. Yeah, talk about, talk about your. Go ahead.

[Brennan Pothitas]

No, and I was just going to be like, and those kind of firms are great because they make sure you don't drop the bar. You know, it's so easy to, like, in a CEO or CEO role just be like, wow, this is painful. I'm just going to hire someone for it. And I think having like, a really, really good exec search and really good executive search partners helps make sure that bar stays really high.

[Cameron Herold]

So, yeah, and I refer people to our part. We have about 15 different partners for the CEO alliance, but three that are in the recruiting space. I refer any companies to them and they take really good care of people because they get so many referrals. The question I have for you, around your growth. So you came into infinity. At one point, you were the COO of infinity, and now you're the CEO when you were the coo. Talk to us about what your role was.

[Brennan Pothitas]

It was really about. I mean, I first came in and we had the concept, like, the conceptions of a bunch of ideas, and we had an idea of the structure, but it was really to partner with the executive team and get reporting in line, get financial, like, get financial reporting in line, get the idea of infinity together. And so it was like very, I would say it's like very internal focused with, like, our different businesses. And so it was a lot of, like, reporting. It was a lot of operations. It was a lot of making sure that data numbers were reliable and making sure that the businesses were positioned appropriately and, like, really working. And especially in a holdco where I'm building different businesses, it's like working and supporting those CEOs in a really tactical way around. Like, we automate finances, I T, HR and legal. So it's like putting a lot of that stuff on rails. And that that was largely, like, what I was focused on.

[Cameron Herold]

And then. Did you have a finance background coming into this? You did. Okay, that. Because I know you mentioned finance and analytic and kind of the compliance stuff. So you had a finance background, you understood data, you understood that's. Do you think you could be successful in your role without that?

[Brennan Pothitas]

No. And. And you know, I have a master's in finance and before that, econ. And so I got very familiar with P and L and risk early in my career. And it's something like, I don't think you have to come from a finance background to be really successful as like a COO or even head of marketing, I think. But you do have to eventually, like, learn that, learn what drives the business, learn how your business makes money or loses it, and then learn how you can, like, mitigate that to a certain degree. And so that's something I'VE just spent a lot of time with, over my career. So yeah, I feel I'm very comfortable in that space.

[Cameron Herold]

Well, and then there's also the cash flow component. People always talk about making and saving money, but they don't talk about how cash is your oxygen and you can suck it out of the business even though you're profitable because you don't have the right either unique economics or the cash flow conversion of your cost acquisition lifetime value.

[Brennan Pothitas]

Our best companies are positioned the best and it's all around cash flow. And so that's actually the fun thing about building in a Holdco is you get to sort of like see a bunch of different businesses over time in different industries. And that's been an early learning. We've basically pulled out is that like, positioning is everything and if you position around pricing and services where you can have really strong cash flow, you deliver a great product to your customers and then you deliver something awesome for shareholders. And it's just, it's funny how, you know, I wouldn't have necessarily said like, I've always heard of positioning and thought a lot about it, but I didn't realize like, how key, like it's probably the, the top thing to do and they're, they don't really have a close second, in my opinion.

[Cameron Herold]

Yeah, no, I agree. You see, you definitely see it through the right lens. Okay, so in the COO role, you walked us through what, what that was. What's changed now that you're CEO? What do you not focus on or how have you decided or been able to kind of delegate and elevate from what, what you were working on?

[Brennan Pothitas]

Yeah, I mean, I think it, it's a lens shift.

[Cameron Herold]

Right.

[Brennan Pothitas]

And you still have to think about the same risks. You still have to think about the drivers of the business. But you know, I had a much more internal lens as a coo, whereas now as a CEO, I have a really external lens. So I spend a lot of time, like my main job is to give context to my investors and my board so that they can weigh in and like, provide the right governance and the right input, especially at like a really fast growing business. I sort of joke, like, we have eight kids and I have a lot of aunts and uncles that help with those kids. And like, it's a lot to like, explain what's going on with all those, you know, making sure the numbers are right, thinking about strategy, thinking about positioning, recruiting that next great board member, recruiting that next great CEO or coo. It's very much external focused Whereas I was much more internal focused, if that makes sense.

[Cameron Herold]

Yeah. When I was in Seattle in the late 90s, I was running an Internet company and we sold to a Holdco that owned about eight different companies. It was called Shop now. And when Shop now, they had a group of kind of internal shared services that all the eight companies used. And then the eight companies tried to do business with each other as much as possible. Some of that I think was a bit of the Internet shell game was like, I buy a million dollars in advertising from you, you buy a million from me. We both booked a million in revenue, but we both booked a million in expenses. I mean, I don't know how that was even legal. What kind of shared services do you run now amongst the eight companies? Or do you operate them as completely different businesses with completely different teams?

[Brennan Pothitas]

I mean, we definitely operate the fundamental business as completely different teams with different businesses. So we have a lead engineer, we have, they care about their product, their delivery, their marketing, their positioning. But then on the back end, because as a Holdco, I need really good, strong, accurate financial data to make allocation decision. Things like we centralize finance, we centralize information technology to have controls over access and security, which is really important. And then we centralize HR as well, because we find across all those you get economies of scale. And then that's also like whenever you're talking to a founder and they want to come build, you're like, hey, you can actually just start selling and building your product tomorrow. Like we have all this infrastructure in place that you normally would spend a year putting together and we have it for you at your fingertips so you can focus on the right thing to build. It's pretty attractive. So we, we put a lot of effort, the whole team. But I spent a lot of my first part as CEO, like really getting that foundation in place. And now as CEO, I'm out, you know, singing the gospel around why that's awesome to build and hold go. So.

[Cameron Herold]

So one of my mantras in business has always been that a leader's core job is to grow people, right? To grow the skills and the confidence and the connections of our direct reports. And it's one of the areas that I feel like most startups and even early stage VC funded or PE funded companies are really lacking. They tend to get good finance expertise, they tend to get good governance expertise, they tend to get some good connections from biz dev, but nobody really drops in to teach the management and leadership team how to run meetings and how to do interviews and how to coach People and how to train people and how to run. Like so you have all these managers who think the answer to everything is to add more people and that that's not the answer to everything, anything other than more complexity. How do you help or do you help these companies or do you just hire leaders that are good at that?

[Brennan Pothitas]

I think that's a great question. I thought a lot about this and there's actually, there's venture funds out there that offer really great services around that stuff. And I think a lot are trying to differentiate with their platform teams. And you've seen that over the last like five years, like especially as more like, you know, 20 years ago there was a small amount of venture funds and now you can raise from thousands. And you know, like even in Europe, like someone the other day was saying there used to be 50 funds, now there's 2,000 in Europe. Like even regionally there's so much competition. I actually think a lot of people have tried to diversify in this, but I actually think it comes down to the incentive model of the business itself. And so the reason that a lot of founders, and this is my opinion, the reason that a lot of founders go and I think just try to solve their problems with hiring is, you know, you raise 5 million bucks and then you go and you look out and you're like, okay, I got to burn this in 18 months. What am I going to do to burn that? A lot of them don't have great go to market channels or great other things. So you can put a slug into that. But then ultimately you're like, okay, I'm going to hike these hires. And it's like, well, what if now I can Instead of raising five, I can raise 10. Oh, just hire two people instead or three. And I think that works all the way up market during zero interest rate where like you had companies raising hundreds of millions of dollars and they're like, okay, I'll hire 20 marketing people and then that'll work. And so I really think it comes down to like incentive of the model around where you burn and deploy. And for me, like that's what's so attractive about the Holdco is that we start really small with a cash commit. But it's not hey, go burn 5 million bucks, it's hey, build a profitable business with AI and try to do it with as little people as possible as fast as you can. And when you flip that incentive magic happens. And that I think is going to be the important thing. And I look at tech as a whole and I look at how much value tech has created over the last 30 years, but then I think also, like, how much extra capital was probably deployed into things that it didn't need to to create that value. And it's just something I spend a lot of time thinking about. Which is why that's a great question.

[Cameron Herold]

Well, yeah, even. Just. Even, like. And for people that don't know the term burning money, that means spending money or investing money, usually at a pace that's faster than you're getting a return. So you're spending it and you're losing money quicker, knowing that you're going to go to the next funding round, which I've hated that model forever. I've hated it. And I remember being at a conference about 10 years ago. I was sitting beside the founder of Hootsuite, Ryan Holmes, who I ended up coaching and running his strategic planning for a couple years. We were sitting, talking at a table, and finally I kind of pounded my hand on the table. I said, will someone stop talking about raising money and start talking about making money? And he looked at me, goes, I agree. We have to turn to profits. I don't understand where this idea has come from about just grow at all costs. And. And when you're raising money, you guys are in the process right now of raising 11 million bucks. Eleven and a half million bucks.

[Brennan Pothitas]

Yeah, we just finished raising our first raise of eleven and a half million.

[Cameron Herold]

Okay, so you're raising money. What kind of is that institutional money? Is it friends and family? Is it angel? What's the level of investors?

[Brennan Pothitas]

It's a mix of angel, family, office, and venture.

[Cameron Herold]

Okay, so from these different groups, they have different expected, you know, return rates. Right. Your family wants to get their money back, hopes to get their money back, but they're going to be a little bit more patient than a, you know, a VC firm or a private equity firm that needs it to be in a certain number of years. How do you manage those expectations? And now where interest rates are so much higher, it feels like their expectations are bigger. Is that true? Are their expectations more tampered because of the market that we're in?

[Brennan Pothitas]

I mean, I think you look back to, you know, multiples, or you look at multiples.

[Cameron Herold]

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[Brennan Pothitas]

Time as you look as well as returns in the tech sector over time I think fund returns are at a pretty low position relative to the 90s and early 2000s. And so I think LPs and everybody would like more and for the model to work like they need to. Ironically like I think a lot of folks need to invest in the next Facebook, LinkedIn, Microsoft, Oai. But a lot of those businesses actually didn't take hundreds and hundreds of millions to make their model work really well. It's all back to positioning but for us like it's less around source of capital, it's more around like like mindedness as well as like understanding our story and then the value you can bring in. So Freestyle is our lead investor. Maria Pal is our partner there. She's incredible, right? And she's venture backed with you know, great venture LPs and she sees the story of AI services as something where it has a massive TAM. We can get there if we're patient and we build the right businesses profitably. And she's very aligned with our capital efficiency, she's very aligned with how we build businesses and she's really excited about it. Right. Whereas the flip end we have other family offices who I won't name but like you know, fairly notable and they're also massively aligned with. Wow. Services can be disrupted for the first time in 100 years with tech. And yes we have a long time view and like yes we want to be involved in this and so I think it is like a bit of a different process but different sources of capital help diversify your syndicate. But also end of the day you're bringing investors into your community and we ask them to be really involved and we're really hyper transparent. And so that brings in the right people. Not which I think like the wrong impression or the wrong thing where I think maybe the market is failing to a degree is really, really high multiple valuations on venture in early stages and then you look at, at like the growth stage of the rounds and not seeing anyone IPO at the right multiples and I think that that's really, really risky and that's where you lose control of your company. That's where you lose, you make bad decisions, you bring in for the wrong type of management. And so that's really like if I was giving like friendly founder advice would be even when we raised this first round we were thinking of like well what's going to be the reasonable multiple we want to target when we ipo and like where do we think the market will be and like, we're probably gonna be wrong because that's. If I could predict that, I'd be a trillionaire. But thinking about that I think is incredibly important because all these markets work together. And that's where I've seen a lot of things break right over. Raising at a bad multiple with the wrong business strategy, the wrong fundamentals. And that's where I think the market, the market will eventually correct. The market corrects. And you know, that's why you see like very low series A to series B conversion rates. Like I think everyone's like around 10% or just under that right now you look at even lower B2C to D or like, you know, D to IPO. Like those rates are the lowest they've been in a long time for that.

[Cameron Herold]

I think it is a strange market. So are your investors now understanding that this is not a builder bus grow at all cost kind of model, or are you place. Are you planning on doing a series B shortly? You know, you're raising your first round.

[Brennan Pothitas]

We're not constrained by capital because our businesses are gross margin positive. I won't quote specific financials because my finance guy will get mad at me. But like we have solid fundamentals and our ability to create new businesses and get really rapid revenue growth in profitable segments. That some are, some there's a lot of venture players, some there are no venture players. Like, we're very diversified and I think that makes our investors excited to want more. So like we're not capital constrained. For us, it'll just be how many great founders and teams can we field and how many can we scale with ourselves without dropping our bar and dropping our quality to then go out and do that and then we'll go out and think about our future rounds. But ultimately, like we want to IPO Infinity Constellation because we think that, you know, we're, we're building a model that's transforming a service industry that hasn't really been disrupted in hundreds of years. Right. Like, like our businesses are pretty unique. Like who's building kind of an AI brand agency or AIEA as a service? Like these businesses are like, they've all been around, but now we can really go out and take a crack at them with AI, which I think is like quite powerful.

[Cameron Herold]

It's really powerful when it's funny that you're one of the only people I've ever heard say that I could be a trillionaire by now. Which is crazy to think that in the next few years we will have our first human who's A trillionaire, which I remember hearing about a billionaire when I was a little kid thinking everybody wanted to be a millionaire but we'd heard of a billionaire. Now everybody wants to be a billionaire, but we've heard of a trillionaire. It's ridiculous.

[Brennan Pothitas]

I believe I said if I could predict every market move, I could potentially be a trillionaire. That being said, I think, you know, there's a lot of people who are ahead of me.

[Cameron Herold]

Elon's on his way. Like somebody was saying the other day that, you know, oh, Elon's just doing what he's doing with the government to make more money. And then I saw a note that if he was paid $500,000 a day every single day since the day that Jesus was born, which was 20, 25 years ago, times 365 days, if he was paid $500,000 a day, every single day, thousand 25 years, he still has more money than that. That's how much 360 billion is. It's just, it's an out, It's. Yeah, it's ridiculous. So in scaling out what you're scaling, are you guys greenfielding all of these new businesses, are you acquiring? Are you finding leaders that have an idea that needs to be funded? What's the model?

[Brennan Pothitas]

So eventually like a Holdco can do all those things but really those eight businesses were greenfield. So we thought of a thesis we liked. We recruited a repeat operator to that thesis. Built the tech team around them, built the product, help them get their first customers, run the back office. Like that's, that's our playbook. I am talking actively. I had great founder conversations today with people who are coming with, with really, really solid ideas that we want to build and accelerate. Like in either case it's really driven by the founding team because we sort of make it happen. But it's very important to have like the founders incept and drive it because like we don't want founder employees, we want like a rate great founders to come and build with us.

[Cameron Herold]

And what do you mean by founder employees? Like early stage non. They've never done it before?

[Brennan Pothitas]

No, I think it's more of like a mindset.

[Cameron Herold]

Right.

[Brennan Pothitas]

Like if you, we give really high equity ownership and then that aligns you to shareholders. And I think there are models where you could have really low equity ownership and I'm like hey, here's my idea, like please go build and come to life. It works really well on Excel and I had consulting agency a build up the whole plan for it. I think those type of Businesses are really hard to launch from an incubation perspective because the founding team needs to really feel that ownership in the idea and like drive it forward. That's something that in whether we acquire the business, someone pitches us it, or we start it fresh, like the founders own that vision and owned the company completely, or else, like, I don't know, like, I think I'm just biased being a repeat founder. Like, I think that the other model is like really hard to win. Win on.

[Cameron Herold]

Yeah, I get it for sure. I mean, from, from 94 through to March 14 of 2000, because the next day is when Steve Ballmer said there was an Internet bubble and the market crashed. NASDAQ went down by 78% in six months. So in those days, people were giving out equity in lieu of compensation, right? Equity instead of comp. And then we got more title inflation. And then we, you know, from 2000 to 2008, people wanted to have a proper compensation because their stock options were all worth nothing. When you're saying you're giving out equity now to founders, is it in lieu of compensation or is it, you know, as well as compensation but your comp is more pared back or are you paying what market comp would be and you're, you're giving some upside because you want to lock them in and have them really treating it like founders?

[Brennan Pothitas]

I, I believe definitely like paying founders and paying employees and, and all ours are paid. So I think in the, a pure equity only model gets probably a little like too aggressive for, for me and for us, but we definitely make sure that all of our operators and people are really aligned with. Because I think the right word is alignment. And in all those scenarios you're talking about, it's like there's misalignment. There's misalignment between either employees and shareholders, or shareholders and the founders and the employees. And that's why, like, I think it's really common in this environment, at least in the last like five to 10 years, is that there was a lot of zero interest rate happening. Founders would take secondaries, the employees would like have their equity zeroed out, or they would take debt and you would never be paid out of the business. There's a lot of like, you know, reasons why I think employees don't value their equity right now. But what it comes down to is like, do you trust who you're building with? Are they raising at a reasonable multiple? Are you building something you believe is going to fundamentally change things? And then you should really radically align yourself to Your investors, like the employees, the executives and the board and shareholders should all be aligned. And that's something me and the board spend a lot of time talking about. That I think is incredibly important because it's easy to fall out of misalignment, especially when the market's changing a lot.

[Cameron Herold]

Well, it's one of the reasons why I've always been against profit sharing is profit sharing is almost never aligned with what the owner wants. The owner wants to grow the economic value of the organization, which sometimes means being less profitable to invest in more people and more tech and more marketing. So if you align people to the wrong thing they make, they make decisions that are, are good, but not necessarily with where you want to go. All right, so Bren, I want you to go back and give yourself some advice. I know you look like you're 24. If you were 24 years old and you were out there leaving your, you know, your, your university or wherever career and you were going to go off and start in business, what advice would you give the younger you that you know to be true today?

[Brennan Pothitas]

Have fun. Like all what we're doing is incredibly cool. And that's really like what Future Self always says to, to Past self is just like, you're having a blast. You're gonna be okay. Have a lot of fun and good things will come. And I try to have take that advice from Future Self as well.

[Cameron Herold]

That's probably why you have the smile the entire time we've been chatting as well. Brendan Pathitas, the CEO and former COO of Infinity Constellation, thanks very much for sharing with us on the Second In Command podcast.

[Brennan Pothitas]

Thanks for having me.

[Cameron Herold]

Appreciate it.

[Brennan Pothitas]

You've been listening to Second in Command, brought to you by COO alliance founder Cameron Herold. If you enjoyed this episode, please be sure to like, share and subscribe. Subscribe to us on Apple Podcasts, Spotify and our other podcast streaming platforms. For more best practices from industry leading COOs, visit COOAlliance.com.