Cancer & Competitiors: Bootstrapping to $10M & Beyond – Patrick Campbell – MicroConf Growth 2019

0:00I want to do something a little bit different and take a huge step back and talk about a few things that we've learned that are very very foundational to where we've gotten in terms of our modicum of success and also talk a little bit about these are the things that I think if I were gonna start another company or as we continue to scale are extremely important I'm gonna get pretty personal in some situations here I'm gonna reveal some some cool data so be gentle but I'm also gonna say some things that are offensive you know just in terms of the data not violating code of conduct I promise

0:45but it's one of those things where my goal is to make you think so if you have like a visceral reaction to some of the things we talked about obviously let me know I'm going to share my email at the end and I want to share and make sure that you get the value from what we're talking about sound good you guys fired up all right if you're not fired up I'm not fired up and it's all about me right no all right cool so the first thing we're gonna talk about this whole concept of finding leverage within our business the whole idea of you have

1:14limited time limited resources all these limitations no matter where you are in your business and you're trying to scale that business so how do you find the right leverage to understand how you should grow the next thing we're gonna get into is seeking truth something that isn't quite as binary is a lot of us want it to be and how it comes sometimes gets extremely gray and how we can act within that gray and that chaos and then finally controlling fear all of you if you're not a sociopath have some fear when you're building your business and some fear that basically creeps in in terms of all the external stimuli that

1:47you have and I've had some pretty unique problems with my business and so have some learnings there I'm first off to give a little background who here has heard of profile or price intelligently ok cool that's awesome I think if I said that last time I spoke everyone was like who the [ __ ] is this guy but that's really cool so I'm gonna go really briefly through this then so profit while our core product is free subscription financial metrics so we plug into stripe his or braintree whatever you're using and give you access to basically your churn data your metrics all that kind of fun stuff

2:19some good segmentation we also have engagement data in the platform and we give this away for free I'll go a little bit deeper into why but we give it away for free and a very briefly basis here mainly because what we're trying to do is we're trying to show you problems and opportunities within your business and then we want to sell you software that basically helps those problems and helps those opportunities and so the paid products that we have we have a product called profit well retain I stole all this from our marketing site because I'm a terrible designer so sorry if it's coming off a little pitchy that's not

2:47what I'm trying to do here it handles delinquent turn and now voluntary churn is in beta as well we have a product that does revenue recognition which is like terrible but really important and then finally we have price intelligently which is software that basically helps you understand where you should be pricing and how you should be pricing and the whole vision here is basically we want to sit at the center of basically the subscription universe in order to study it understand the truth of subscription growth and then build products that basically take that understanding and help companies grow in a very like outcome-based way to give

3:20you some numbers we haven't revealed any of this before so that's kind of cool one big metric that we track for the free side is revenue under management and so this is the ARR of every company that's on profit well it's about five billion which is pretty cool it's actually really accelerating the 2019 which is also really cool we also in terms of revenue this is what the past two and a half years look like I'm gonna show you what it looks like kind of across the seven years in a bit it's one of those classic zeros and then it works out so we just crossed the 10 million

3:51mark which is cool and you can kind of see turns out when you hire a marketing team in 2018 all of a sudden it starts to work which is really kind of fascinating yeah who would have thunk right we got 65 people right now most of those are in Boston we have a Rosario Argentina office as well which is about ten that offices continue to expand about half of the sixty-five are an R&D and in product we have 78 groups percent gross margin a lot of people think we're a consulting business on the price intelligently side is we're not it's a software company with profession services which is a little bit different

4:29and then we've had zero dollars in funding which is pretty cool it's not entirely true though the funding actually came from myself and so you're looking at and these are not fun numbers um you're looking at my salary over time as well as my savings over time and basically in 2012 I started my career working in US intelligence in DC not a high paying job then I went and worked at Google which was like not really a high paying job but a really really good job and so I'd saved up you know with my 401k and my savings about twenty five thousand dollars basically that went to zero very quickly within

5:072012 and 2013 and then I basically paid myself an average of about thirty thousand dollars up until the last couple of years when I'm finally making six figures I also paid with flesh and what I mean by that is this is what I looked like in 2012 I'm the one on the right to be super clear and now I look like this so that's exciting and we'll talk about that a little bit but yeah that's kind of the background a little bit about the company some facts you might not have known about us but what I want to do I first want to get into leverage because I was thinking about

5:47and 2019 planning in particular what has gotten us to this point and what has gotten us through some of the hardest times that we face and I think that we luckily and I don't think we knew this proactively but we luckily got into a position where we knew how to exploit the little resources that we had and we were really really good at using that restriction as expression in terms of growth and what we built and when I talked about leverage what I'm really trying to get at is we want to get the most out of our time our money and ultimately the effort now what's

6:22interesting is in our communities we live in this world of a lot of different dichotomies so what I mean by that is when you look at people giving you advice on what you should do there seems to be one side of the world that's like do things that don't scale right Paul Graham tells us you know what in your early days but even in like your growth phase you got to do things that don't scale and he and the rest of the group that says that is not wrong they're not necessarily right but then you have this other side of the group particularly a lot of Engineers data scientists like

6:51myself etc who say you know what you got to work smarter not harder right we've heard these two things before yes raise your hands if you have there we go audience participation it gives me joy okay so we've heard these two things but the really really funny thing is is that none of the neither of these two things are right a hundred percent of the time right neither of them are really right most of the time most of the time you can have things that don't scale they're actually really really good and absolutely okay but you can also have things that tank your entire business right and what I found and kind of like

7:27reflecting and talking to a lot of like founders advisors and mentors is that a lot of us actually have a solid framework for evaluating what is gonna be the best leverage within our business and the problem is is that this room needs to be better at this than anyone else because if I have you know 20 million in funding if I have a million dollars in funding when I'm early on I don't necessarily need to have the most leverage because I can guess and check my way to success and when this really hits you in the face is when you're facing some sort of a problem because

7:59oftentimes what happens is when we are looking at a problem might not be we're not growing enough it could be an actual support ticket could be a whole host of things but what ends up happening as we go through what I like to call the freakout cycle of executive emotion you like that phrase no it's like a good band name I think - anyways so what happens is a bad thing happens and let's say it's a reactive situation there's a huge bug that happened there's like some bad PR crisis there's something bad that happens so what we do is we go this is important right we don't question if

8:31it's important we go this is important and what happens from that is we go through what I like to call the reverberation of [ __ ] right which is basically us freaking out and yes we might go and fix that problem but we're sitting there and we're like yeah right we're like how is this person so stupid why is this happening right but we still need to solve that problem and so our emotions like driving us there driving us and all of a sudden what happens is we're like okay cool we're gonna guess and check right it might be based on something that we read right like or pricings

9:05wrong let's end it nines and put the most expensive tear on the left that's gonna solve it right like we're just gonna guess in check right and all of a sudden it might work it might not and let's say it doesn't work what ends up happening on the second pass of gas in check especially if months have gone by is all of a sudden we're like we're going to fail everything is terrible right because all of a sudden we're facing these like nightmares we're not getting the growth fear is starting to creep in you know your mother's like what are you doing with your life right

9:33I get that one a lot and then all of a sudden we get guessing check three four five six seven and eventually something probably works right eventually something works or at least we think it works right we put in LinkedIn ads that work it's starting to get us growth cool we can check this off at least for now but the issue with this type of thinking isn't that hey you're losing time which is definitely a problem when you're going through multiple guesses and checks the issue comes in that those initial guesses and checks that you are testing probably have unintended consequences they're gonna cause you more problems and then all of a sudden

10:09you get into this cycle where like oh man that problem is now the most important thing let's like solve it and you get into this like world where everything is terrible even though things are ok or things can be ok right now I'm being mildly dramatic for a fact but this happens on a constant basis within a lot of our businesses and if you look at like really junior employees you see this especially if they they're driven and want to do a good job this happens constantly right where you have to kind of sit them down and be like hey like a bad support request is gonna

10:41happen let's think through it right this happens in small and large situations now it was kind of interesting about this is that the better way to kind of approach this is the break out cycle of executive emotion I'm very creative I don't know anyways so a bad thing happens and the first thing that you want to do is actually question is this important right like is this actually important now if you say no you don't do anything you're still gonna go through the reverberation of [ __ ] but it's gonna be smaller right because if something bad happens you're like hey it's not important it's still

11:15gonna eat at you a little bit especially if you're a founder because you're like I want to do a good job I want this business to be great well my team to be great I want my customers to be happy but then if it is important what I think a lot of us especially when we're facing things that we understand what we normally do naturally is we live in a world where we first think we framework what's the right idea we figure out what that idea is then we decide on what we should do and then we act right now I guarantee you the technological Technic

11:49founders in the room the non-business focus founders in the room you do this all the time all day when you're trying to figure out how to build trying to figure out how to squash a bug like this is something that naturally happens now in addition to that the business focus founders if you're working on a partnership you're trying to do a sales drip campaign you're trying to do a whole host of things same thing you're really really good at this the problem comes into play when you get into an emotional place and all of a sudden you revert back to the previous cycle now the end of this particular cycle of

12:19acting you get into a situation where you monitor and adjust you go back to thinking and acting based on what was good what was bad and you still might have those unintended consequences based on what you've done but you've now lowered the risk of basically being in a position where you were just kind of running around like a chicken with your head cut off trying to solve that particular problem and so what I want to kind of help with something that's really unlocked for me for kind of the past 15 years that I picked up I'm in a couple of different places is what can we do to double-click on giving you a

12:51good framework for some of these problems and the one I like to talk about is this whole concept of problem cause' solution has anyone heard of this it's a little bit of root cause analysis if you study the rhetoric in college you probably came across this or if you're a debater back in high school or college so problem cause' solution is basically the whole concept of is you can't solve a problem so if you think about a problem in life world hunger gun violence you know anything else that's like really crazy like we can agree that those are problems but it really hard to be like cool solve that

13:23problem because that's the symptom of something that's happening right what we can solve for are the actual causes within the actual problem that's there so with world hunger or gun violence you have a bunch of different causes as to why those things are happening and when you want to develop an actual solution what you find is that that solution has to go after the cause right it's kind of like you can't treat the actual symptom you have to treat the disease right now what's kind of cool about this is you'll start to discover okay some of these causes aren't equal to other causes right when we're looking at hey we have

13:57an issue with lots of accuracy issues we're gonna try to figure out what is the primary cause that doesn't break all the other things that we've done and how can we figure out how to have the best effect on that problem without having like more problems pop up right and so we use this framework a lot especially with things that are a little bit bigger like not in a support request necessarily but will actually look at this and we'll be like all right we have this problem in the business or we're faced with a particular problem in HR for instance or something that's a little bit more ambiguous to us as we're

14:30scaling it will actually map this out and it's helped immensely now the other thing that's kind of cool and I'll go through an example here is that this really helped us identify why we should give away profit well for free as well as where we're going from a vision perspective so profit well that the origin of profit Wells I've told it before but basically we had price intelligently and we discovered we didn't have enough leverage with the data that we were collecting so we were able to help people with their pricing with the software that we already had but the issue was is that we wanted to

15:03help them with bigger and bigger problems or the causes of those problems and so we determined that we needed more data we needed to get to the financial data we needed to get probably to engagement data and eventually to attribution data as well and so we were like this is really exciting this is the idea we're gonna go after and we didn't really go after it right away because we were looking for like we're not really completely sure and then came a day I was in I can't tell you where cuz that'll reveal a company I think but we were helping a company that was about to

15:32I P o with their pricing and we discovered that they were calculating their mr r and their churn completely incorrectly and so it was this outside vendor coming in to help them with one thing discovering that this was a huge problem for this really large company and so we were like this is awesome right like we're gonna buy Ferraris we're gonna be so effing rich it's gonna be great this is back when money it was like a big motivator because I was so frickin poor but what end up happening is we're like great let's get an MVP right and this is what the MVP looked like yes that is a piggy

16:09bank logo in the upper left hand corner and yes when you mouse over that piggy bank that little coin did drop into the piggy bank that is Museo sands and this is what you get when you hire Patrick to be a designer I'm just letting you know okay and I'm a little insecure diz telling you this so this is what it looks like now it's great awesome so when you have when you you have a design team the problem was and this is where the problem popped up so this is our trajectory for profit well right this is our error under management late 2013 early 2014

16:44mr. Pigford showed up right with bear metrics which is really interesting then in like early 2014 there was a landing page for chart mogul right then all of a sudden you had first officer John is amazing by the way the co-founder of first officer then you had 34 other companies that popped up because stripe in particular which is where we were all were playing was basically really really easy to start the product and getting it right going through all the accuracy issues was was where a lot of the work happened now to kind of make matters even worse we're sitting here and all this wasn't happening right away but basically we

17:22had this product we hadn't really liked publicly like made a big splash or anything because we were kind of doing the we like to call it the the DC / Dharma Shaw style of building product but then all of a sudden stripe fund invested five hundred grand and bear metrics and then chart mogul at the time they didn't raise all four million right away but they basically were funded as well so we're sitting there and we're like okay we are definitely not the belle of the ball no one really knows us they think we're just pricing all of a sudden these products their first versions looked so

17:55much better than ours I had so much like surface area in ours the two big competitors are funded and this is what our funding looks like right so this is this is where I'm basically you know with with no savings and making no money living in Boston which is not a cheap city and that put me in a nice little reverberation of cry and so what kept us going though is we looked at the space and we looked at like all of bi-rite not just like SAS metrics and subscription metrics and one thing that we did we've always been known to collect data and like go after

18:31and like really research the situation but the one thing that really kept us going is that we did some research where we collected NPS scores from bear metrics customers chart mogul customers business other a bunch of other business intelligence products we went out to their customers and we said hey basically asking you know the recommendation question for NPS which is measure of customer satisfaction if anyone's not aware and anyone guess what the aggregated score was for this kind of BI reporting world scale of negative 100 to 140 any other guesses zero one more negative 25 is negative 15 and we were like interesting and our NPS like

19:21wasn't great right with our little piggy bank MVP right so what we did is we have a problem and it's actually a pretty meaty one right the distribution and monetization of profit well it's gonna be difficult due to competitive pressure and limited resources in this market it appeared I don't know if you guys remember when all this launching was happening like hacker news every other week like there was just a lot of stuff going on so we started using problem cause' solution we didn't like no we were doing it perfectly at the time but in hindsight that's exactly what we were doing and we looked at okay one of the

19:53causes this is going to be difficult is the lack of willingness to pay so we use some of the resources we have and some of the methodologies to collect willingness to pay day yeah and this was the willingness to pay for a SAS metric solution this is the data that we actually collected back in 2013 our 2014 potentially right there and what you'll notice here is that basically you have a low-end of 50 dollars per month a high-end of $250 per month and this is like a high-end customer which isn't like an enterprise customer but we weren't going to go right out Enterprise without any funding

20:24and the problem that you're seeing here for anyone who understands negative churn is that basically if I have a big dog a $250 person basically churn I got to have a ton of a loss to be going from my little dogs up to being a big dog right and people just don't move that quickly in terms of their mor especially at this low end and so we're in a situation where there's just like a really low willingness to pay and we see this in most business intelligence analytics products because they all go up market eventually and when we looked at and we actually diagrammed what the

20:56actual bi in analytics space looked like what we found is that all of the energy is being spent on the lower end of this continuum so we have a ton of devops products a ton of database products working on the data and then we have a bunch of people who are like hey you got a bunch of data let me give you a [ __ ] ton of graphs right give you charts on charts on charts and that's what we call analytics right and what's interesting about that is when you look at most people in the space they stopped at this dotted line right now they're marketing

21:30talks about insights and outcomes right you look at any publicly traded business intelligence products go to their front page of their website it will say something like hey your customer service rep can get insights on what's going on and pull their own reports right get better business outcomes by looking at graphs right they don't say it like that but that's basically what they're saying right and what was really fascinating as we put a couple of different like feelers out in the field of like basically like we told people hey what if we had this product that did this what's your willingness to pay and what we found is that as you get further and

22:07further down this continuum the willingness to pay goes up significantly so if I solve your turn or part of your turn with Payne you're willing to pay me a lot more than if I just give you an analytics product that has a bunch of graphs right and what was also really fascinating is the NPS went up as you went across this continuum I think that stands to reason right like a lot of us would figure that that would be true and we also found just to be very intellectually honest that there was a little bit of a dip back at the data side because normally the buyer would

22:41turn to a developer for the data side and essentially those developers really appreciated the efficiency that you would get by using some of these database tools or other DevOps tools and the other problem that we saw was massive accuracy issues um anyone try to build an analytics product before yeah it's pretty terrible mainly because getting it right and getting it to be accurate it's something that's really really difficult it's easy to get it like 92 basically 95 percent right but when you're dealing with someone's finances all of a sudden it's like it has to be deadly accurate or people don't want to use it especially as they

23:22get bigger we saw this in some data that we collected there's a max DIF graph I can send you how to do this if you're not sure how to but basically we collected data and we found and the second rung here that as a company got bigger all of a sudden they started care more and more about accuracy and the one thing that we had found when we did our competitive NPS is that across the board not only with our like direct competitors but although all the other bi products this was the biggest issue to the operational buyers the other things that we had very little name

23:51recognition especially for this particular space not a lot of money we've kind of hammered that home and our product was definitely behind like the design for something like bear metrics or some of the other analytics tools so much better than ours especially at the gate out of the gate and we were sitting here and we would have situations where it was like we just didn't know what we should do in terms of what features we should because there were so many different vectors that we could go down in terms of what was important and so our solution here to kind of you know gloss over there's a bunch of other

24:22analyses that went into these causes was well if there's a lack of willingness to pay and there's still value in building this we're gonna give it away for free right and we'll show you some data as to why we did that as well we're gonna take the hit and focus on accuracy until it's good and that took us 18 months to two years because we didn't just weren't able to just take like oh the invoice variable inside stripe you had to go down to the event level basically rebuild the profile of the customer and then do that across the entire account which took a lot of time maybe about

24:575,000 different stripe companies on profit well and it's one of those things where like we're still finding bugs even after five thousand because everyone implements stripe a little bit differently but we're gonna focus on accuracy and we're gonna commit to this strategy because basically what we were looking at was if we can get people in on analytics we can then get enough data to understand and get deserve and show them insights and then ultimately what we can do is we can build outcome based products where it's you turn it on it solves a problem it pays you money and then we take a cut of how much we give

25:29you and so the way that we think about it is basically we're gonna attack everything up until this dotted line and that dotted line is probably going to go up a bit and everything beyond that is free and then everything on the other side of that line that's what we're gonna actually charge for so that's how we thought about it that's how we applied problem salt problem cause' solution but now I want to give you a little tactical detour you guys ready for a tactical detour pumped it's some data all right let's chat about freemium so big thing about freemium it is an acquisition model it is not a revenue model a lot of

26:06you think it's in pricing it is not you need to think about freemium as like a premium ebook and what I would tell you is that freemium is going to be a part of all of your strategies plus or minus 20% within the next 10 to 15 years and the reason for that is the most overused slide in any deck which is how much competition has basically just increased the average number of competitors if you started a software company particularly in SAS about five six years ago you're looking at an average of about three competitors today that average is actually increased to about 12 just because it's easy to

26:42start it's hard to grow but it's easy to start the other thing about freemium that's a huge advantage retention is noticeably better you're looking at the retention for about 150 companies where you're actually looking at customers who converted from free free trial or no free and you'll notice is that freemium it's notice will be blood better especially from the bottom part then NPS is also noticeably better so again these are customers that converted from free you'll notice the one year ago chart those free converted customers are doing notice really probably about double the NPS is those folks who converted basically from from a cold start now the

27:22reason for this without going deep because it's not a freemium talk is it gives people time to nurture basically we have people who are using the free version of profile who have never paid us we're totally ok with that we give them a ton of value but what's funny is that they'll use this for like two years and then all of a sudden timing which is such an important part of sales they'll all sudden go hey we gotta fix pricing now who should we talk to oh yeah we stuck at his profit well folks like we feel bad not paying them like they feel bad because we're offering up this this

27:51value so at least we get the conversation and a lot of those people then end up paying us something um if you want to learn more about freemium I wrote the freemium manifesto profile calm slash freemium it's about a hundred page book a lot of value in there if you want to go deep on freemium alright you guys ready for truth again I don't know if you're fired up alright so I need to be like stand up and let's clap no okay cool alright let's talk about truth so I want to take a step back and I'm gonna do a little experiment on you okay I'm

28:24gonna show you a couple prompts and all of these prompts I have data for I have data to support exactly what I'm saying and it's good data I'm not lying with any of these prompts what I want you to do is I want you to register your emotional response so the things that I'm about to say so the first thing I have data that shows that founders who sleep less than five hours a night they grow slower than those who sleep seven to eight hours per night their company's not themselves most people grown by the time they founded a company right right this is a pretty easy one to

29:03agree with right like I don't even really need to show you the data like some of you are like I want to see the data Patrick and that's cool but you're probably like yeah this is easy to agree with now the next thing what if I told you that companies with institutional funding have higher churn rates than those who are bootstrapped and here's the data every second line is the bootstrapped part of the cohort every first line is an institutional funded one notice how crazy the difference in churn right now that's pretty easy to tell you right some of you not only are like yeah I get it totally makes sense

29:41but you're also kind of happy about it right because you're all bootstrappers right we're all bootstrappers and we're like yeah [ __ ] those VC's right which is not really how we should feel because again the binary VC versus not always ends on it's a tool for what you need right let's try another one founders with hobbies and who score high on a work/life balance index have slower growing companies there's the data founders who have hobbies those who have hobbies are the dark green those without hobbies the light green work/life balance folks who scored high on work-life balance the dark green light green as those who score low on work-life balance

30:29that one's a little harder to agree to right now you're like did you include this in that data did you account for that thing in this data like all of a sudden you're like I don't believe Patrick Pecha does know what he's talking about right I need my side projects right and then finally remote companies have considerably worse growth and worse retention than co-located ones there's a growth data 20% less growth and those folks or co-located now you want to murder me right it's most of your a remote right this is interesting and the reason that this is interesting is you're all basically going after the backfire effect

31:17you had no problem questioning me as a source when it was something that you agreed with and would hit your core beliefs all of a sudden I started to poke holes in your core beliefs same data same source I didn't fuss with it at all and now all of a sudden you're like yeah your data set doesn't include this and that doesn't make sense and you have an agenda and like all these bad things right now the backfire effect basically when something supports our view we don't question it if something attacks our view we feel attacked they've actually studied this if there was a bear up here and it was attacking

31:51me the same part of my brain would go off if you attacked one of my core beliefs with data or some other point of view the same piece of information basically to my brain but that's terrible if you're a founder right and it doesn't mean you should question everything in a very [ __ ] ik manner right but it does mean you should be a little bit better and a little bit more conscious of if something is attacking you and if you should actually accept it or if you should learn a little bit more in a nicer manner not na this guy does nobody's talking about--we

32:27right and I think that this really comes down to the emotions of what we perceive in what we know to actually build a business and I think what a lot of us do is we don't pursue the actual truth of what is right or what is wrong on a number of different axes instead what ends up happening is we go with what we know we end up building what we know and if you've ever hired someone who you're little unsure about and all of a sudden they found out oh they're just doing the same thing that they did at the previous company they're not approaching that

32:59particular problem at your company we're at their company at that point with the same level of rigor that they should be right and so there's a couple of tactics on how to actually pursue truth here the first one that I really really love is this concept to call the most charitable interpretation principle who hears heard of that the basic concept is when someone pisses you you're gonna start overreacting right all of a sudden you're gonna go oh my god Patrick you don't know what you're talking about remote is awesome there's all these trade-offs with remote maybe the data says that but it's gonna be better eventually and all that other

33:32stuff right instead what you should do is go okay let's assume the other person is competent with good intentions and assumed they might be right right this was literally the biggest unlock for me in the past 12 to 18 months it made me so much more Zen than I am and so much more patient because someone would come to me and I'd be frantic and I'd be like oh we have this problem we have this problem and I'd be like okay hold on a second like this person's not an idiot why are they saying this let me learn and if you've ever had a conversation where

34:02someone came to you they said something and you got really pissed off and like you argued and then all of a sudden the end of the conversation you got to a point where you're like oh I actually agree with what you were going to say now that I understand what you're going to say like you're not using the most charitable interpretation principle now the other thing that I find really useful missus what I picked up when working at NSA was working on red team's anyone know what red teams are if you're in cybersecurity a pentesting you're aware of these the basic concept is when you have an idea particularly the big

34:32decision you should be red teaming that idea pretty aggressively and what that means is is you're trying to figure out you're trying to it's used in like both combat and intelligence as well as cybersecurity you're basically trying to figure out where the holes in the argument are where the holes in the actual like enemy are in this particular case in a big principle that we have at profile well is you want to be disagreeable and think critically mainly because we have all these ideas coming and all of these ideas that may be good or may be bad but we want to make sure that we're actually thinking critically

35:05through those ideas and the only way that we can do that is if we read team those particular ideas and I do this sometimes even with support requests I'll sit in something comes in and I'll be like assuming those charitable interpretation and then all of a sudden I'll go into a little hole and I'll be like oh crap what do I need to do here this is the best idea this is why you had last time I'll stink still think through two other scenarios in order to basically attack hey is this the best idea of still the process basically have the idea think through a bunch of different

35:34scenarios and then ultimately make a decision and oftentimes what you find in wargames is that all of these different Red Team scenarios you may not actually use those scenarios going forward but they actually make the final idea that you work on that much better cool all right here's an example of froth well that I am very uncomfortable sharing just to preface if I get a little like shaky so I travel a ton traveling about 170 to hundred thousand miles a year because enterprise software fans and so what that means is is like sometimes I'm away from you know my family which is my partner Jenny and our dog Sloane so I

36:19was away for a while we had a really really good weekend it was October 29th Monday morning we woke up about 5:30 6:00 it was like a tip it was a cool morning like we got coffee all that kind of fun stuff which we normally don't get to do in the morning because we're both like running around so would you say breakfast I just got out of the shower just hanging out and I read this on Twitter so CEO chart mogul looking at reviews on g2 crowd and kaptara basically found something that definitely looked bad there was a situation where you know someone was basically doing multiple reviews they

36:59gave us some positive reviews they were able to find it they were able to trace it back to the negative reviews that they gave to chart mobile and you went to the LinkedIn profile of the person and it looked real suspicious real terrible and then about an hour later Josh jumps in and basically says this is not friendly competition these guys are really unethical low-class insanity and so [ __ ] happy Monday it's gonna be a great day and again what I want to do is go full [ __ ] Braveheart and be like [ __ ] you guys I have emailed you I've tried to be nice

37:44you couldn't emailed me I could have solved the problem for you I'm a pretty nice guy I'm from [ __ ] Wisconsin like we're like black labs of people like we're just like so fun so nice right but like no we got to like do this on Twitter and like I don't know it was one of those things where like I was just like just fired up and then Christophe from point-9 who's like a legit investor is like he jumps in like adds fuel to fire like I'm just watching the likes and watching the responses and then like the kick in the face was like there's

38:16two people who I like went so out of my way to help with pricing on a pro bono basis and they're just jumping in like yeah profiles trash like blah blah and I'm like [ __ ] okay and so what actually did is they looked at the problem the reviews definitely look fake right Twitter and there's a public issues there's relationships with these competitors you want to have a good relationship I feel with your competitors I think it's important and there's a perception to our users and our customers right and what really just like really kicked also kicked in the face was like these review like there's

38:57a hundred visits to that page like a month like gee to crowd kept trying to sell us stuff we're like there's no no one goes to this page so like it doesn't make sense right so I do an investigation right I go in I ask everyone internal I interviewed everyone at the company even our Argentinian crew who like you know English is great but it's not like great always written so it's like they're probably not the case i deep interviewed everyone that like was even remotely close or people who weren't in the marketing team that could have been this like some sometimes you have who are engineers or salespeople or stuff

39:31that aren't tied to this kind of stuff I walked into every interview basically being like hey like you're guilty right like I wasn't aggressive but I was like you're guilty like let me make sure you're guilty right that kind of a thing and then when external we had a couple of partners that weren't related to this but like we're remotely related like marketing partners I emailed down I was like hey I got on the phone with you something came up interview them interview them interview them nothing and then I went to we had this like we tried to do some affiliate marketing like a year and a half ago and I

40:04couldn't get ahold of this guy but and that's like the best place where I think something happened I don't know yet it's really hard to like disprove a negative right and so I basically did the due diligence looking for the causes and I couldn't find like a good cause or a good like hey we did this and so what I ended up doing as a solution is I basically went out I contacted GT crowding kaptara like I was the one to contact them which is really funny to me I said listen you got to do an audit of the entire the entire category which they both did it took about two weeks

40:37and we all lost reviews we all lost positive reviews we all lost negative reviews I went in I made it clear to the team I was like hey I we did not find the culprit but just to be super crystal clear this is not acceptable I didn't tweet anything I controlled the emotions because it just was like I got a ton of advice from people I was texting and like most of them were like don't respond because it's just there's no nuance on Twitter I handled anyone who came in and basically we had a couple people email in and were like hey I don't want to like be a part of a

41:08company that does stuff like this like what's going on I gave them everything like all the information and then finally I wrote both Josh and Nick's separate emails two-page emails that basically were like listen we don't want to win this way I did this investigation I contacted these folks they're doing an audit of the entire reviews blah blah blah blah on the unethical part like I don't know what you're referring to we've had a debate about competitive ads with you before we don't think they're unethical you do but if there's anything else that we've done in the past that we're not doing please contact me because I'd like to apologize for it or

41:39if there's something we're continuing to do please let us know because we will stop doing it and for better for worse that was it right and this was like a terrible situation that I hope none of you have to go through I mean it sucks but it was one of those things that if we didn't have some of these frameworks like if I didn't assume that these two guys are trying to protect their company and if I saw this I would be just as pissed as them I probably would have went full William Wallace right like I would have been like [ __ ] these guys

42:11right but instead I was like there to protect the company this looks super crappy I would probably do something different but I who might a judge what they're going to do and it caused us to be very very rational of finding the truth going after the truth and understanding what the truth needed to be and with that who's ready for enough another tactical detour right cool awesome claps that's great so we've all heard this speaking of competitors don't focus on your competitors right who's heard that yeah focus on the customer right which is definitely important and definitely should be number one but that advice started coming out of the

42:52woodwork before this existed right I have to use the most over you slide multiple times to really get it over over your heads right this is that data that I referenced in terms of the rise of competitors this is their first year of business and this has got even worse but here's some funny data those companies that have a competitive focused marketing strategy their CAC is lower all cax going up but it's noticeably lower it's about 20% lower which is super super interesting and this is why in like certain markets things like competitive ads competitive pages these types of things actually work really really well now for some of

43:33you who are like yes but don't go too far I don't want to do that here's some evidence to support you this is the NPS of companies that have a competitive product strategy versus those who don't and notice that the NPS for the product side is actually much lower for those individuals who have a competitive product strategy and so what I would say in particular is that on the marketing side you have to kind of judge your market we hear about the those two bear metrics and chart mogul all the time we had we put them on our pricing page for a long time because we were like hey

44:08you're already looking at them or you should know about them because you're gonna find them so here's like extra research that actually worked out really well we do ads particularly on the accuracy issue because we're I would argue the one company that's figured that out and so what happens is we get a lot of people who turn off them to us because of the accuracy especially our target stammers there but I wouldn't use it for product you got to focus on the customer cool all right last point I'm going over I promise to go quickly Xander's gonna murder me it's gonna be great okay let's talk about fear

44:41who here has been scared in their business who here has not been scared that's right because they would have to get the [ __ ] out right okay all right fear fears a part of life right like fear is a part of life it's part of being human it actually is a really really good thing right but when this thing comes up this like freak out cycle and you're never gonna be a hundred percent there's things I still freaked out about what you kind of want to minimize is not necessarily the freakout cycle you want to minimize the reverberation of fog right and the reason that you want to do

45:11that is because there's a lot of fear that's going to happen it's gonna come from a lot of different places there's good fear basically you want to do a good job you want to make someone in your life proud right there's like lukewarm fear which is like hey my parents think I'm insane because I left like a job I'll never get fired from from the government you know then going to Google and working at one of the best places to work to a customized jewelry company which was the first startup I've worked at to starting my own thing right and so they're like yeah are you

45:44unemployed now is that what you're talking about right and then there's like really bad places that fear comes from and this is like you know I unfortunately I had like it's not unfortunate but I had like a seven-year relationship that didn't work out and she was in grad school for when I was starting the company and like her friends like I don't know grad school I learned is like spring break for adults like it's like they go out Wednesday Thursday Friday Saturday and maybe Sunday right and I'm not that like Chris savage dragged me to a David Copperfield show last night and I was like I maybe

46:16just want to hang out in my room alone like it's just kind of my style but the the reason I tell you about the ex-girlfriend is for the friends would always judge me because I wouldn't go out I wasn't fun like that and it was because I was sitting there and I was like I have ten people if I don't do this thing they're not gonna get their paychecks and that's like more important than like getting drunk and that kind of thing and then you have acts of God in the universe right there's a lot of places where the sphere can come from because there's these things that are kind of

46:43attacking you and to give you some context this is the graph I showed before on kind of where we are this is the whole company this is subscription revenue and so we have revenue from 2012 to about 2016 there but we didn't have like subscription revenue right um and we were doing okay but during this whole time I had a lot of first time founder woes any like first time founders yeah and you remember your first time as well I could not have founded profit well in a worse way first thing I did and it was terrible part-time co-founders anyone do that before if you're not both or all three

47:26of you or four of you part-time it's terrible I was the full-time founder he had part-time founders it's not that it can't work but it has a really low success rate I have some data on that if you want to see it it does get worse though the next thing is my part-time co-founders they were fully vested and I was not when the head of product at HubSpot and the local CTO want to start a company with you you're like okay like I'll do whatever right that's cool awesome gets worse both part-time co-founders had more equity than I did and they could basically vote me out or

48:01do anything that they wanted even though they were a part-time it's worse the lawyer we had sister-in-law of the most paranoid of the two and then finally we had very little alignment on anything right did not date Mike founder co-founders long enough they never worked full-time at the company and I know like again most charitable interpretation like these guys had never found it a company either we all were like yeah let's not worry about the legal stuff let's not worry about all this stuff because like everything's gonna be great like everything's gonna be fine we'll all like trust each other right so I had to dig myself out of that hole over that

48:38entire timeline and everything's fixed now and they're still involved in the company and we're in a really good emotional place but I did threaten to tank the company a number of times because they had equity and it's like there's nothing you can do if they're fully vested you sitting there and you're like how do I like move an immovable object right I had to break up in here I had the reddest of oceans just to give you some context I refer to this before but like imagine you're in a world where you're working on features that are really really important the accuracy piece here that we were talking about

49:09with the metrics it's really important and you know that this is the future and you know this is what you need to do and you know that curve is somewhere down the line imagine you know that but every damn day you get a support email or you get an email that's like well barometric says this chart you don't have that chart we're like yeah but the charts wrong I don't care they have the chart and it looks pretty right you're like okay or like HubSpot was on profit well and they were like yeah we're gonna go spend 500 grand plus five engineers full-time to buy liquor and we're like okay like

49:47great that's fun and then the the biggest you know kick in the face god the universe whomever came in and i i've had and he basically gave me cancer Shay's like the most blunt way I feel like it's a that I don't know that clearly a little nerve-wracking that's why I came out a little aggressive but second time this is at this point in time this is the second time my cancer first time I was at Google which if you're gonna get sick get a job at Google it's amazing my manager was like hey do you just like not want to come in and I was like like do I still get paid

50:25and he was like yeah that's like how long he's like I don't like for six months and I was like I'm okay like how come into work and I worked through the whole thing but that was back in like 2011 and I was like four to six months from finally being in remission and it was just like I was such like a kick-butt thankfully like I get tested a lot and so they caught it really really early and everything's fine now not technically in remission but everything's good oh thank you that's [Applause] but just imagine all that right and it's not a contest right like you have your

51:06own shitty things in your life like it's it might not be this dramatic might not be this many lifetime movies that you've gone through but it's like one of those things where like you face something like this and you might be like yeah but it's smaller but like again like you know it's all relative right and I think what's really interesting is we go through so much [ __ ] trying to build a company we go through so much anxiety we go through so much fear and we try to do it alone and then when we talk to people you know what people tell us to do you

51:39should meditate right yeah I should really meditate you everybody read atomic habits she really meditate bro you got to work out you got to eat well that's gonna solve all your problems do you journal you got your five minute journal right and all these things are great all these things help but you're treating the symptoms and being mildly preventative the only thing that got me through that time and yes during most of the time it was just reactionary I was like I gotta go to treatment I gotta do this I gotta do that right like I wasn't thinking of this but the big thing that got me through this at least in my

52:24opinion in in hindsight was really the why in god's name i was putting myself through all that what was the why of what i was trying to get to and to me it was it was truth like i wanted to build something great i want to build something great i want it to be awesome i want to be awesome for our customers and our users and i know that sounds a little trite but literally i treat the world is a [ __ ] math problem and i was like the math problem isn't solved yet and so every bad day i used some of these tactics i got a little bit better

52:58and i think that what a lot of you need to do is you need to understand your why and i disagree with some of the other speakers because i don't think it can be something like you know hey i want a really good you know salary for my family I don't think it can be things like on that level not because those things aren't important but because there's so much better ways to make a good salary for your family right you got to have a y at the center of your company at the center of your product and then you also have to understand what do you want to achieve

53:27if it is just that salary if it is just that you know good lifestyle 20 hours a week whatever it is that's awesome but you have to know thyself and I think what a lot of us end up doing is we get really really frustrated because we want the billion dollar exit or we want the ten million dollar company or we want to be Jason freed or we want to be Chris savage and then we're like doing we're not willing to do all of that work we're not willing to do those things and then we have all this dissonance that's sitting on both sides in-between these

53:58things where all of a sudden we're like well why isn't it happening and know thyself was a really really big thing for me because I was able to figure out it wasn't money it wasn't any of these things because I wanted to build something great and then what I ended up doing is I made sure I found partners after going through a bunch of Hell who were on the same page they wanted to do the things that I wanted to do and then I made sure that our team was on board and I was very selective and like basically who we should hire and then I

54:31made sure that I found a partner and I found friends who respected what I was trying to do because anytime the fear tried to get in here and anytime it actually did all of a sudden I had this whole support system around me everyone who was on the same wavelength you got it and were able to basically pick me up or at least be like hey this other thing that you're not working on actually is going well the mission is advancing right which is a great place to be in and to kind of break this down it's really being introspective on where you should be going and what you want you

55:06want to make sure you consume all the advice in the world about that direction and I think the piece that a lot of us miss out on is being unapologetic I want to build a big [ __ ] company and I don't want to apologize for it that's the thing that I think about ready for a detour yeah all right to bring this home so Xander doesn't murder me as patio 11 said you should be writing to and speaking with your team 5 to 10 X more than you're doing right now we found this out especially if you're scaling I wish we started doing this when we were

55:4410 people not when we were 50 but it's super super important and what we do is when we have some big thing like our principles which are like our values and our mission and even like our equivalent of like the shareholders letter what we end up doing is we make sure there's multiple versions for it so we have a narrative which is like 10 pages long goes into all the different idiosyncrasies of things so people can read it that also has a summary we have a presentation which is like a 10 slide deck then we also have some media where we do either video or actual internal

56:18podcasts so people can consume this in many many different ways and then the last thing we do which I think a lot of you don't end up doing with some of your reports is we actually test them so that doesn't mean like hey if you get this wrong you're fired but it's just like hey what did you get from this what do you think of this to make sure that everyone's on the same page the other thing that we do is we try to do weekly posts in both slack and that includes typically a video or some media that really helps because it just keeps people on the same page we try to

56:48repeat things as many times as possible especially in the onboarding process so that they get the main things that you should be focused on the other thing that came out particularly with my first bout of cancer and it's a little McCobb I call them if I die Doc's now we also call them if you get hit by a bus Doc's and I think now we call them command centers because it's a little bit more PC but they're basically they were Google Spreadsheets of every part of the org we basically structured it in a way where you could basically go in and if you were in this part of the or you

57:24could spend a day or two if you're new to that team and you could get everything every summary anything that you needed to get we're transferring that all over to notion and then what we did recently was our ops and Finance folks as we said prep the company for sale so I learned this like tactic from like a big seat oo and Boston like it's not that we're selling its that basically when you tell someone prep the company for sale what they do is they'll go find all of the terrible things like they'll get all the contracts in order they'll make sure all the employment agreements are set up and

57:57they basically get this into a really good position that if we were gonna sell or if we were gonna raise money or something like that we're in a really really good place makes sense cool so leveraged truth and fear I hope everyone learns something if you didn't come find me because I want to make sure I provided some value but the thing that I'll leave you with you are quite certainly your own champion and your own enemy and what I mean by that is you control your destiny yes there's luck and there's things that might come in and just like hit you in the face and do a

58:35whole host of things but the thing that you got to remember is that there's so much more in your control you just have to take ownership of it and when you take ownership of it that's where you can actually change it and you can make it better whenever I meet a founder who's miserable that's the first thing I talked to them about which is there's all this stuff happening but you control where you are and if you can't you got to find the right people around you who can help you basically get good reigns on your horses cool email address PC at profit well any questions on pricing and

59:07all that kind of fun stuff if you want the data decks that I normally do happy to send those over but I'll be here tonight appreciate it guys you