Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
The Spiff Story | Why the Best Founders are Knife Fighters with Jeron Paul
23 Plays7 days ago
Jeron Paul is a 4x founder and a defining entrepreneur in the Utah ecosystem. Most recently, Jeron was the Co-founder & CEO of Spiff, the leading incentive compensation platform which he successfully sold to Salesforce in one of the most strategic acquisitions in the space. Before Spiff, Jeron founded and sold Boardlink, Scalar, and CapShare.
-------
00:00 Breaking into VC by selling a 401k and working for free.
06:30 Learning what not to do from dysfunctional venture cultures.
19:40 How to double your price when a giant tries to lock you up.
26:50 Why "Founder Mode" requires being in the technical weeds.
34:10 Identifying your acquirer on Day 1.
44:30 Why a small first exit is the secret to a massive second home run.
01:03:15 Why UX is a CEO-level concern, not a department.
01:15:20 The "Infinite Scale" framework for evaluating your management team.
01:21:40 The ultimate success metric.
-------
Gavin Christensen founded Kickstart in 2008, establishing the region’s first seed-stage venture fund.
You can follow Gavin on LinkedIn.
-------
Kickstart is the Mountain West’s most experienced and active early-stage venture capital fund. Kickstart provides pre-seed & seed funding to ambitious tech founders across Utah & Colorado with a focus on AI, B2B SaaS, and frontier tech.
See Kickstart’s full investment portfolio here.
Recommended
Transcript
Introduction and Casual Banter
00:00:05
Speaker
All right, Jaron. It's wonderful to see you. Welcome to the Kickstart podcast. Thank you. It's great to have you. Thank you. You look good. Thank you. um I didn't shave today for you. yeah I mean, you look rugged. All right. Yeah, you look rugged. You look like a gritty entrepreneur who's been spending time at a large company.
00:00:24
Speaker
That's true. Yeah. I'm sure you're doing a great job for them. Thank you. I know you and i joked about Rest Invest. I don't think there's much of that going. There's investing going on. Not a lot of Rest in Yes. Yes. yeah Yes. Well, we'll definitely say that.
00:00:37
Speaker
Yeah. ah Very good.
Investment History and SPF Success
00:00:39
Speaker
um So today we wanted to go through some of our so our history together, our investment in SPF, which was an amazing outcome for Utah, for you, for us.
00:00:51
Speaker
But maybe as a backdrop, maybe we just go quickly through kind of our common history, however that makes sense. Yeah. Maybe introduce your background a little bit for our vast audience. Yeah, yeah. We have all these new listeners. true. And they're just like, who's Kickstar? Who's Jaron?
00:01:09
Speaker
We have no idea. Yeah, it's important. ah Do you want me to do it? Or do you want to? You start like an old married couple. and Yeah, yeah, yeah.
Early Friendship and Career Paths
00:01:17
Speaker
Kevin and have known each other for a very long time. We're work or work married. Yeah, that's right. it's been It's been a long time. Start at BYU. Start at BYU. So Gavin and I met at BYU, econ department. um We were just econ buddies, and we have so many stories that are pretty formative to our relationship, actually. They go back to that time, ah you know given that's probably not what we want to most focus on here. We graduated in econ.
Transition to Venture Capital
00:01:45
Speaker
Gavin went to work for Fidelity. I went back so back east to work for a company called Monitor. i Really wanted Gavin there, frankly, and felt like, actually, more more importantly, i just felt like Gavin belonged there or they they they could really bestize it from you. yeah um You're the type of person that they were trying to recruit. So Monitor was a consultant's management strategy consulting firm. At the fantastic. Pretty cool boutique firm. I felt like, yeah, we only took strategy cases. It was now very McKinsey-esque except only doing strategies. It was kind of cool. bunch of AWS folks.
00:02:15
Speaker
um So Gavin came and joined me there. we recruited you and successfully got you there. and to be honest, I don't think I knew a ton about consulting until I met you and other people like you. yes You were a philosophy and econ. I was like a guy was going to be a literature professor turned econ.
00:02:31
Speaker
Similar. sore Similar. Yeah, super idealistic. yeah yeah so i think But I think you opened my eyes to like, hey, there's this cool way to do business that yeah that's really interesting. and Totally. And and and that was that was a big part of a relationship is Jaren would always do things a little bit before me. Yes. And he would he actually did an awesome job of like saying, here's how you do it. Here's how you do the case interviews. Here's how you apply to business school. Here's how you get into venture capital. Yeah. I mean, that was a lot of how our relationship went is Jaren would do a thing before I did, help me do it, and then I would take his spot.
00:03:00
Speaker
Yeah. Well, and and you would keep the spot warm. did this Yeah. So but let's, ah and and I would say super kind of you, Gav, but I think you've definitely, um there was a point where that inflected. i Yeah. and um
Venture Capital Journey and Mentorship
00:03:12
Speaker
But anyway, yeah. so we So we were at BYU. We went to Monitor. We were probably overlapped three years at Monitor, I want to say. Three or four years? Yeah. Three years. That's right. Yeah. Three years. years yeah yeah So the full three years, I went to business school, but before I went to business school, i networked into venture capital market in Utah and found A person yeah called J.D. Gardner, who Gavin and Shout out, J.D. Shout out, J.D. Gavin and I both have super fond memories of him.
00:03:37
Speaker
He took a bet on me. um i think it was because I was had been admitted to to Harvard. And so he was like, yeah. And he had done an HBS program as well. So... He said, yeah, come intern. So I literally sold my 401k at the time, like everything liquidated it. Wow. Because, yeah, because i we didn't have money to sell. Like they had no money.
00:03:57
Speaker
So I had to, you know, that was a job and it wasn't paid. I should have mentioned that. Which was very, by the way, that was very par for the course for Utah Venture at the time. Yeah. It's so true. Pay us to work here. cheap. Just so brutal.
Cultural Challenges at V-Spring
00:04:14
Speaker
Yeah.
00:04:14
Speaker
yeah Kind of cool, though. like Kind of, yeah. Gangster. A little bit gangster. Yeah, yeah. ah um So I was there with JD and Jeff Curl and kind of a crew that has really been pretty influential in the Utah tech scene for a while. And then I went to HBS, but when I left, they said, hey, do you know anybody who could come work full time? And I said, I know the perfect person and recommended gavin gavin interviewed got the job um then gavin went to business school and he told them to go after me because i had subsequently at business school had started a couple of companies um and i'd taken a job for a company called
Loyalty and Team Cohesion
00:04:52
Speaker
thompson financial and was working there ah you'd be doing kind of like an intrapreneurship type thing i'd started at a company at hbs they kind of semi-acquired yeah i was like an acqui-hire almost yep And then i was building it for them. And Gavin called me up and said, hey, I'm going to business school, but I think I can help you get a better position here, like a principal level job. And Gavin helped me to kind of created a position for me that I applied to. Yeah.
00:05:20
Speaker
got. yeah um And so I then was at V Spring, Gavin came back, we overlapped for a period V Spring. I ended up bouncing out to do entrepreneurship and Gavin, as we all know, um has become, I think, one of the biggest pioneers in Utah, VC. and so right nice I think there's a definite inflection point at that point where you know our paths went very different directions, yes um but we still were able to work with each other a ton. And that's what we're going to talk about. it Which was fun because i there was conversations about us working together at Kickstart at that time and several times since.
Lessons from V-Spring
00:05:54
Speaker
Super cool. you know so which is Which has been fun.
00:05:57
Speaker
What would you, um I think it's probably interesting for the audience to maybe try to briefly summarize what it was like to be at B-Spring because it was a it was a Oh, my God. So, you know, ah like you know what would – The spring. Yeah. I mean, just like a such – like if there's a book at some point that would be awesome about that period. It's funny. i'm I'm far enough away from it now that like i I get more and more truthful about my experiences there because i didn't want to, like, talk negative about a previous employers or anything like that.
00:06:29
Speaker
I would just say, and I think a lot of the vSpring partners that I still know and love what Icarus is, yeah like it kind of taught Gavin and I how we didn't want to do yeah venture capital, to be honest. so Yeah, I mean, it's like, what I would say on the on the real positive side is they were they they that we were like so excited to be there. It was like it was like a
Impact of Early Career Lessons
00:06:50
Speaker
so much energy, like there was, things were happening. It was super exciting. Pioneers. Pioneers. I mean, they saw the opportunity before anyone else, I think, in for here. For You know, there were some dysfunctional aspects to the culture and the partnership that,
00:07:07
Speaker
Kind of made it so it didn't... It it should have been the the the dominant force in in the Mountain West. yeah in and in And one of the biggest asset managers probably in the U.S., honestly, is probably what it should have been.
00:07:20
Speaker
It isn't that. um So we all learned a ton from that. Yeah. um and yeah And like you said, I... I feel like what they gave me was an incredible privilege that yeah so few people get and and wasn't was very formative in my career. Yeah, so me too. i i i both have i have like this, certainly there were aspects that I learned of things, like you said, that I i think there was an opportunity there that was missed, yeah ah to put it to put it mildly. But on the flip side, you know what they gave ah us was incredibly yeah appreciated. I totally agree. I mean, for example, like, there's so many things we could talk about, but like, for example, they lay let young guys like us um sit on boards early, source deals, and fix bad, crappy companies.
00:08:10
Speaker
um They had zero scarcity. Like, for all the all the problems that that they had, you know, the scarcity mentality, which is like, yeah I got to keep this stuff for me. They were kind of like, what can I give you? yeah Like, how can I, help like, take it. Like, yeah anything that was traditionally reserved for more senior positions at the spring, they were just like, no, we want, like, how do we get you on more boards? Like how we I want to be as successful as I can be. And I'm not, yeah, they they just were not scarcity minded. yeah They were like, how do we get you more? I mean, there was it the pay conversations were were sometimes difficult, but I mean, i still think that is other than pay, which I think was a little bit yeah trickier um to manage at that time, just they had a big, they actually had a pretty big staff. yeah for a venture capital firm. I did, yeah. And so ah other than that, they were just like, how can we give you opportunities to grow? Yeah.
00:08:59
Speaker
Totally. It's cool. Totally. I mean, that's... Or at least start with a fund there. i Yeah. I mean, i said as they they were yeah they were like awesome enough to allow me I was at Kellogg just to take that fund. I had kind of the idea I had there and they basically said, hey, if you'll move to New Mexico, you can do it. You can do this like crazy little seed fund, you know, and we'll help you do it. And it's awesome. And eventually, eventually could spin it out. Yeah. So, I mean, not many funds let you do that. and So that was awesome. So cool.
00:09:30
Speaker
So, well, there's a lot we could talk about with the spring, but yeah maybe we jump to, let's, let's talk about, um, maybe jump to, to capture.
Introduction to CapShare and Scalar
00:09:39
Speaker
Sure. Um,
00:09:42
Speaker
High level there, ah early just early CapShare, eventually kick Kickstart it becomes one of the funders, and then lessons learned and kind of what that meant for Spiff. Yeah. um Okay, so CapShare.
00:09:56
Speaker
so really quick before CapShare, I had started a valuation services. Oh, right, that's which we called Scalar. Yeah, and it's still alive and kicking, doing really well. and you know But I had always in the back of my head wanted to do tech entrepreneurship, I was really obsessed with software. And from, I, you know, Gavin and I cut our teeth in, in many ways in early in our career on the web 1.0, like boss, we saw the web blow up both, both positively and negatively. And I was really convinced in the aftermath of that bubble pop bursting. I was actually super convinced that,
00:10:31
Speaker
Technology was the future, actually. Yeah. So everyone was kind of like, ah, you know, it's had its time, back to fundamentals, let's all do PE, old boring deals, you know? I'm like, yeah. And I was opposite. it was like, no, this is just the opening shot in what's going to be a volley of of massive amounts of, you know, progress in technology. So So I started this services business, but i really wanted to end up pivoting to doing some software.
00:10:58
Speaker
And so started to take profits out of the services business and just into a software business. So that's really how I got started as a software CEO. yeah And, um you know, had an awesome opportunity to raise money from Gavin.
00:11:10
Speaker
Um, which was huge for us. It, it really is. that It was at a pretty critical juncture where we're actually splitting out the firm, the, the, sorry, the old valuation services firm from the software business.
00:11:23
Speaker
And, um, uh, you know, you light our seat around and, you know, was huge. So, yeah. And it was a killer, it was a killer company. um lots of interesting, money like that's its whole like podcast talking about that one. Um, what are some, what are some highlights for you? I know I have some, some very clear memories. Oh yeah. Um, you know, from my side, but I was, you know, just a board member, but you know, i'm curious what, you know, what are the highlights? Yeah.
00:11:50
Speaker
Pop to mine. And, and I, and ah and I, I will say a big theme for me is, which I think is great for our audience to consider is like, you want to learn the, the, you don't want to over, you want to learn the right lessons from success or failure, but you don't want to overlearn them. Yeah. So I think that's a great theme. Great theme for today, which, yes and I think we got that right.
Impact of Relationships on Entrepreneurship
00:12:10
Speaker
You got that right. Yes. But it took some like, Oh, right. Right. Yeah. That was easy. So we'll, and we'll, that's that's a little fores that's foreshadowing. foreshaowing I love it. Um, Yeah. You know, was I like, was was Capture the best return ever in Kickstart's history? Like not not even close. Was it a return? Oh, was it solid? Yes. And so like, I kind of look at that as my training wheels experience, you know, as far as like working with outside investors.
00:12:36
Speaker
ah So it was great. i I think the biggest thing I learned is that some of these people that you meet early in your career, mean, they can just i mean They can just alter the shape of your career and the trajectory so massively.
00:12:51
Speaker
And I'm thinking of Matt Stapleton. yeah I'm thinking of Casey Crouch. yeah I'm thinking of Steve Brooks. I'm thinking of people that I have now done two to three startup ideas with, you know? can i Can I just, another theme, I think it's good for audiences, which we kind of highlighted last time, but I think is really specific to Jaren is, just like I said, like, my relationship with Jaren, we were close friends, we were peers, but a lot of what Jaren was amazing at was, like, helping a peer do the next thing, you know? And I think that he, Jaren has created this incredibly loyal team, because, like, a lot of all those names you said went on to be co-founders of Spiff. Yes. And,
00:13:31
Speaker
are so loyal to Jaron. And I think so much of that is because he really took time to help them take the next step, whatever that was in their career.
Loyalty in High-Risk Ventures
00:13:38
Speaker
And and they just and they just, you know, i mean, like they don't, they're they're not wondering, does Jaron care about my career? Does he care about me?
00:13:46
Speaker
that matters a ton. it You know, no one, you shouldn't take that for granted. that that makes that like That makes special leaders, and I think that's something you've done super well. Thanks, Kay. It became a big part of the SPF, you know, capture culture and then SPF culture. So I just want to point that out of like, you know, one of the things we talked about at Kickstarter is for an entrepreneur to be special, they kind of need to be special. Like, let's say, use a chess metaphor, high ELO rating in a few areas. Yeah. And I think that's one of your areas. ELO rating. Yeah, is like is like the mentoring and development of team members to create loyalty yeah is is awesome. Yeah, I know. And thank you so much for the comment. So kind of you. And um yeah, I feel like loyalty is such an important part.
00:14:27
Speaker
of building something that's high risk. Yeah. Because otherwise people bail out and you need continuity to to succeed in most startups that, you know, all obviously we all want to be those Uber startups, literally like like Uber that just take off in a yeah hockey stick.
00:14:45
Speaker
Most of us have to grind it out. And if you're grinding out, you need loyalty. And so... you know it's and there's plenty and it And let's be honest, there's plenty of times during that journey that it's not strictly rational to stay.
00:14:58
Speaker
Right? I mean, it's just, right? it's Yeah, I love that. I mean, it's totally true. It's not, you know? yeah And so it's like the loyalty, it's the relationships, it's the it's the cause, it's the problem that that keep you there. i mean, I'm laughing because the amount of times it was not rational for Matt Stapleton to stick it out yeah with me was, I mean, yeah massive. like we were getting boat raised by a Silicon Valley backed competitor, um, who had raised at one point 200 times the amount of money that we had raised. Yeah. Um, you know, I mean, was a rash. He's very talented. I mean, he went on to become a CEO right after me. So like he could have gone and started his own business. He could have been recruited. Yeah.
00:15:39
Speaker
It, you know, a lot of this comes down to relationships that you want to cherish, you know, and, and they're crazy important. And I, I think it's important. And, uh, and, again, in high-risk ventures to have loyalty.
00:15:50
Speaker
Yeah, sure totally. Totally. um so So CapShare, maybe speak to the dynamic with Stapleton because I think you guys are a great yin and yang. Yeah. And maybe speak about, maybe it's just a comment about startup teams and, you know, his strengths, your strengths, kind of how...
00:16:12
Speaker
Was that obvious to you? Did you learn that over time? Yeah. I mean, I think so. It's funny. Like Matt started at Scalar, which was the valuation services business. And the first thing I loved about Matt is he he came on Scalar at zero salary and 100% commission.
00:16:29
Speaker
Anyone who does that and then goes on to succeed, I mean, it's just so rare. and he bet 100% on his ability to perform. And by the way, this is guy who I'm sure had an elite academic record. Yeah, could have done a lot of things. I i think he was a presidential seller or something. Yeah, i mean unless you she was like a 4-0 guy. yeah Just like insane like academic credentials yeah and yet takes 100% commission jobs. Like that's a weird combo. Very weird.
00:16:59
Speaker
And, and as, you know, as I'm just going to say this, cause Tanner's right there, but like, as Tanner knows how many HBS folks go into sales. sell and Yeah. Let me, you right right. Or like almost zero. It's like solo.
00:17:10
Speaker
This is, we can cut that part out if you guys. Yeah. No, I really, let's take a snipe out of him. The point is, you know, yes, Matt could have done something wildly different. And yeah. yeah So yin and yang. Bad and I are very yin and yang. He's operationally excellent, super dialed in on, like, I would say, like, probably does not have ADD that I've ever seen. Yeah, like, super yeah linear. linear with Like, very linear all operations genius, you know, can kind of, like,
00:17:39
Speaker
He actually says this a lot. Like, he he can he can take a a system and turn it into a well-oiled machine. Do you know what i mean? Yeah, I've then i've seen it. yeah And I like creating new systems. So, you know, so we're we're ah different that way. Yeah. We've both taken different functions at different times. He's taken sales sometimes. I've done it sometimes. So, it's not fallen neatly into functions. Although, I think I am T-shaped, to your point of my ELO rating gets stronger in probably...
00:18:08
Speaker
ah product and product engineering and marketing is probably where I go deeper as a CEO and much, much less in like operations, even sales. I'm, you have to be good at sales to be a founder. Yeah. Full stop. Yeah. You are, there's a, you know, before you transition out of founder led sales, founders have to be good at sales. Yeah. But I would not say I've never carried a bag and I don't think I'm, And I think you became, i you know, over the course that I've known, you've definitely become a very strong fundraiser and ah teller of companies, yeah which is the ultimate sale. That's the old enterprise sale first rounders. Thank you. and But like, you know, it's a learning curve yeah yeah for that, for sure. Yeah. Yeah, yeah there's a learning curve there for sure.
00:18:51
Speaker
um I mean, you you helped me to the the capture sale, like funny story. And for for the listeners, you know, I was like, I think we I wanted to sell the company for something. This is is is this my first small deal. And I wanted to sell it for something around 11 to 12 million.
00:19:06
Speaker
um Gavin was was like, double that, double that. And, you know, what the offer was like in that range. And so we ended up essentially doubling the offer. yeah um And that lesson came worked really well in a much larger deal with Bev, right? have right yeah Because we ended up doubling that one, roughly. Which is, you know, the the wild, and again, it's these are this is maybe easier advice to do when it's not, like, when you have a portfolio, and've and, you know, we I'd seen a bunch of deals, but it is wild in my and i career. I have seen, like, you work however many years in the company, five, ten years, to get to a certain point, X point,
00:19:44
Speaker
And then depending on how the negotiation goes and the process goes, you generally can double it. And literally that's can i've been our experience together. Yes. Each time is we've. and and And by the way, the way it starts is always like, oh, there's no way to go from this number.
00:19:58
Speaker
No, i I didn't believe it. and I thought you were like, I thought you were messing with me. i Yeah, yeah. Just being like, just, that that was like one of the few times that I've been annoyed at Gavin. yeah Like I was literally kind of annoyed with you. I was like, this is a greedy, he's acting greedy. This is like not the Gavin that I'm used to. He's just, it he's investors taking over here.
00:20:17
Speaker
He doesn't not know what it's like to be on the other end as an entrepreneur. And in fact, you did. And in fact, you knew that was going to be better. Obviously it's so much better for all of us if, we could double the exit price. Yeah, totally. And in in ah in in both cases, you know, interestingly enough, therere there there are other parties, but not like a bunch of offers or a bank. So just, now I just think it's good for audience to know that like, hey, the way, now part of it is you have to have a CEO who can storytell and and kind of who, and, you know, we were very above board with how we did this. You know, it was, we didn't make anything up, but
00:20:52
Speaker
But on the flip side, it wasn't like the tension on the line was from generally one party. So that's, that's that's so it just, you know it matters how you run the process. Totally. I mean, I'm thinking two things. One thing you said that I think is worth repeating because I think it's great for every entrepreneur that goes through an exit.
00:21:07
Speaker
um I remember talking to you and i the so the acquirer at the time had said, hey, you're under NDA. You cannot talk to anyone else. You know, as soon as you talk to someone, our offer's off the table. And Gavin said,
00:21:21
Speaker
Gavin said something to the effect of, I've never once ever in my life seen more interest in an asset drive the price of that asset down. yeah And the idea being, yeah you go talk to someone else, yeah you actually get interest, guess what's going to happen to the original acquisition price? yeah And that's exactly what happened. yeah They didn't withdraw their offer. in fact, they got more urgent and more excited about trying to make it happen. When someone's ah when there's a when when the hook is set, yeah and there is a time before the hook's set where this might not be true, but when the hook is set, yeah you absolutely can get the offer. And in fairness, you know in that case, we're not saying anything that's in the NDA, but we are you know we are saying, hey, we have other parties here that have said, come talk to us before you sell. And so we we have an obligation to go to them.
00:22:09
Speaker
Yeah. We didn't sign it. Yeah, that's right. Yeah, that's right. we had yeah they were trying to like were trying to They were trying to lock us up. Yeah. And, you know, bullies. Right before we signed it, we went and did a malice of old Sean talking to folks. I remember those conversations because I remember I was on vacation. We didn't know you were signing it. Sorry. We did the blitz. We got a bunch offers ended up taking one of the other offers that came in. That's right.
00:22:34
Speaker
I was riding my one wheel at a KOA. I was on an RV vacation with my family when we had the capture discussion. so now Now, one thing we got wrong in retrospect, right, is we had two offers. yes Yes. And um the the wild thing is...
00:22:49
Speaker
And this is and this is unknown this is like one of those things you wouldn't know. We took one from a more credible source. Yes. It was cash. Yeah. We could have taken an equity deal. Sometimes equity deals don't work out. In this case, if we would have taken the equity deal, we we it it would have gone from our side, probably from a 4X to like a 50X. Yeah.
00:23:08
Speaker
And it was like at the time, we worried that the other deal had yeah problems. Yeah, we got over, i over-rotated on the little thing called ethics. And, and you know, you can't really over-rotate on that, but, like, but you kind of can in a weird way. Yeah, no, I mean, it we could have, there's there might have been a way that we got hosed. Oh, there definitely could have been. ah But I think what I mean by that is, you know, we we often put competitors in boxes. They're just, 99% the time, they're just good people, yeah you know? yeah And sometimes they're screwed up people. yeah And sometimes they do make borderline ethical crap that you don't like. But sometimes you need you do need to kind of separate that out and and try to be a little bit more.
00:23:51
Speaker
Not so black and white. Yeah, not like say, okay, they're an enemy. Right. Yeah. Because it'll let that affect your yeah like affect something that could have had a 50x difference in the all. I will say one was cash.
00:24:02
Speaker
which allowed me to go create Spiff. And so I, I, you kind of got your 50 X, you kind of got your 50 X and as did we, you know, in terms of like going forward it with Spiff. So, yeahp and but it, but it was an interesting moment.
00:24:14
Speaker
Lessons learned from that, experience, um, at a high level that that you were thinking about as you started SPF? and edit In terms of, oh, coming into starting SPF? Yeah. Oh my gosh. I mean, I have a whole slide e on like some lessons I've learned from going from capture to SPF, but um Being a first-time software CEO to going to a second-time software CEO. ceo First of all, fundraising, having any exit under your belt makes fundraising just exponentially easier. So it was fundraising was not even ever a stress for me at Spiff. Not once, really. Maybe a little bit towards the very end when the markets were kind of cratering.
00:24:55
Speaker
ah Number two, you know, I learned so much about how to be a ah technical CEO because I had been in the weeds of of code actually at so ads at um Capture that really taught me some important things about how to scale a software business and that that I wouldn't have known and can really bite you in the butt. Yeah. And can actually kill you relatively if you're in a competitive race. a lot of software CEOs aren't in super competitive spaces and that's better.
00:25:25
Speaker
But if you are in a competitive space, how you build that software and how your ability to make it extensible is absolutely critical. And and so I learned a lot. No, that's great. Let me just insert there. I think that's an important theme, yeah which is ah my experience with great founders has been they tend to be pretty in the details, pretty micro-focused for a long time. you know and I have had this conversation, and I think you're a great example Again, not many HBS grads um that are very strategic have curiosity to to learn to code later in their careers and and actually be technical yeahp and like have an opinion about. and there and it
00:26:05
Speaker
Part of the Spiff story is actually a debate you had with the CTO where you know there was a business decision around a technical thing that actually was really important that you had a strong opinion on. Yeah. And and I would say it's still not totally clear who is right. But what I will say, and that's the technical CTO at um Spiff is now become like, first of all, like a lifelong friend yeah and and someone that I want to to start. If I ever do another startup, like he would literally be the first person I agree. Yeah. so um But what what I would say is, you know, would they laugh a lot at my coding at that Capture and and Spiff and they they make fun of me because they they'll say things like, I brought the production server down like twice, which I did. Yeah. I remember. Yeah. And so, you know, they'll they'll mock me a little.
00:26:56
Speaker
But, you know, and so I've often went on One of those, just for the audience, one of those was like three weeks before we closed the transaction. Yes, it was. It was so dumb, man. I mean, it was up pretty quickly yeah in my defense. But it was like literally you shipping load at... Doing two in the morning. Yes. so Yeah. And so I was really in the details. like yeah And and i' I received a lot of flack, too, for like, why should a CEO ever be coding? Because I ever...
00:27:22
Speaker
And, you know, I think, first of all, I do think the world's shifted around what a CEO does. I remember, like, think about the CEOs we were backing in these spring days and just what the mindset of, like, what a great CEO is. And now think about founder mode. Oh, yeah. Think about, again, whether you think, whatever you think about him politically or otherwise. Yeah. Think about how Elon Musk runs companies. Sure. I mean, these these folks are very much. Yeah, technical. Technical and dumb.
00:27:49
Speaker
in the details. In certain areas. ninety totally It's a T-shaped thing. You can't do it everywhere. yeah I doubt Elon Musk is reviewing ah the ASC 606 RevRec requirements for his company. you know but like but he when it's When it's important, no is if it's a battery question or it's a question about the weight of the car, he's on the line. He's on the rear. Yeah. Yeah, absolutely. And I'm the same way. And that I think I i think that's important. Yeah. More important. Yeah. I think I think leaning that way versus the other versus the kind of politician.
00:28:23
Speaker
Yes. You know, the folks that I mean, i don't know how to say it as charitably as I can, but some of the CEOs we work with just. It's theater. Yeah, it was it was like, yeah, it was CEO theater. Yeah, I totally agree with that. And it was important at that time. or It was viewed as that's all the CEO does. Yeah, you wear you know, it's like you dress the right way. Yeah. Like whatever. I don't know what else they did. yeah Totally. Yeah. um Loafers.
00:28:47
Speaker
It's just so weird. It was just like very it was like so old school. Yeah. like yeah yeah um But yeah. So the other the other thing I think it does is it creates a culture. Now everyone is going to pay attention to details. yeah Is it the CEO is paying attention to details? Guess what? Everybody's paying attention to details. The other thing it did for me is it created, as much as they made fun of me, Spiff became a place where really smart technical people went to work. Because the CEO cared about ba and the tech, actually the engineering. yeah
00:29:19
Speaker
And that's very different. Most CEOs, even now, they're producty. They care about the way it looks, it feels. Do they care about how it was engineered? yeah Think about being a BMW CEO or whatever. you know Do you just care about like, hey I just care it goes from zero to 60 in 3.1 seconds and it looks pretty and it's functional and it works well. It sells to this demographic.
00:29:40
Speaker
There are other CEOs who are like, no, I want to see the engine. yeah I want to look at how we're improving the piston layout. I want to know whether we're getting maximum efficiency out of every stroke of that piston. i I think ah yeah we're at an age now where la yeah that's the type of leaders. The great CEOs look more like that, right I think, now.
00:29:59
Speaker
And I think we just anecdotally, you know, kind of just maybe talking about our ecosystem here, I think we've we've we've had an evolution here from very go-to-market focused CEOs, which we still have a lot that are amazing. that that's they That's their core skill set to more, I would say, balanced or maybe product or engineering focused CEOs.
00:30:19
Speaker
individuals like yourself who have really brought like that balanced culture to the table and then built the go-to-market uh alongside yeahp which i i think it tends to yield you know kind of more balanced company yeah yeah yeah i agree um okay so maybe let's let's uh this is probably a good moment to um you you founded spiff yes um what What was, maybe tell us about, what's it how is it, maybe we maybe we look at the deck and you tell us, you give us a couple highlights slides from the deck yeah and and and you're telling us, like, yeah, let's do that. Like, we have the original pitch pitch deck here.
00:30:57
Speaker
sure. And I think if we just do this, yeah, here we go. Love that little lightning bolt. By the way, we have was expertise knockoff. Okay, we we actually have, like, a lightning bolt kind of in our logo. lost yeah So, I don't know if we were inspired by Spiff, Nat, but, um,
00:31:12
Speaker
So, yeah. So maybe you tell us, just tell us a little about your, s spff you know, original insight and um yeah motivation. ah So, you know, it was very much had kind of a scratch your own itch problem. so Matt Stapleton and I have spent our lives, we're we're very financially and accounting minded individuals and Matt and I have started.
00:31:30
Speaker
plus three Yeah. he's together so a lot of how i start companiesies will always involve him and it's weird because we've he's retired now so it's super weird i feel kind of rudderless sometimes but um but you know so we've always been obsessed with hey you show me a complex enterprise grade problem that's being managed in an excel spreadsheet and we'll show you a startup idea So that's kind of theme one for a lot of what we've done. Which I love about. Accelerate placement. And we love financial technology, not fintech per se, because we're not that into payments.
00:32:04
Speaker
We're more into accounting type financial technologies. So think broader yeah ERP kind of ecosystem. um And then because those things were always in the back of our mind, the things we loved, when we had a problem where we were using a spreadsheet, which was commissions for our own two companies that we'd started previously at Bolt Scaler and Capture, the light bulb kind of went off. We we like, wow. And it was one of, another thing that's probably a theme that I've always super appreciated about you, Gavin, is
00:32:36
Speaker
Gavin is, has a, and I'd love to, you might want to, you know, you might expound a little bit on how you think about market size because you're different than most. be Yes. um I think you tend to be able to see markets that are deceptively small or however you want to think it. They seem much smaller than they actually are going to become.
00:32:55
Speaker
And that was very much a spiff thing. I think, you know, when I told this idea to my mom, she laughed. well Yeah, yeah she because she's like, I mean, it's Jaren, it's like take out a calculator and multiply 10% times the revenue you brought in. That's a person's commission. Like you don't need software um yeah to do this. You know, she was like, both my mom and dad were kind of like, really? Like are missions? Like what? You know? Yeah. And yeah I think...
00:33:19
Speaker
we had a pretty good nose for, you know, this is this is a good basis a big market. Yeah, like, this is that it really at the intersection of the offices of the CFO and the offices of the CRO, which are probably my two favorite offices.
00:33:32
Speaker
you You get those two, Because the office of the CEO, for example, I don't think they spend very much money. yeah What's the CEO spending a ton of money on? It's really the office of the CRO and the office of the CFO. Marketing, too. yeah But I love that intersection of finance and sales. Oh my gosh, that's a sweet spot. Because sales drives crazy urgency. Finance will always drag their feet.
00:33:55
Speaker
Because they're always like, oh, we've got to find the best possible solution. We're accountants. We've got to look at everything. We've got to like, oh, can't spend money. We've got to like, negotiate them down and sales is like we want this in the field now we're trying to hit numbers yeah what like so we got the benefit and on the good side of finance too is like when you're in sticky sticky sticky yeah low low sure yeah so we kind of got the best in both worlds with those two totally i mean um so and we'll get to our memo or show a couple yeah yeah shots of our memo and stuff you know for the audience but um
00:34:29
Speaker
The way I think about market size, especially when you talk about pre-seed, seed stage companies. so the time that we were talking SPF, you know, it was pre-revenue, pre-product. Jaren was actually still part of Capture. yeah And so, you know, we had a ton of trust. We wanted to do the deal.
00:34:43
Speaker
But that was that was unique for us. And so it's very much a ah ah theoretical market because... In and a lot of cases, we're replacing Excel, which is a, you know, it' it's sort of a a fixed cost, sunk cost for people, and and they're using it for something that, you know, and another use case. And it's amazingly powerful. flexible in a way. It's incredible. It's incredible. Like proto software everywhere, right? um So the the way, you know, I think I learned this from Lucid and other investments that I've done where I just got so sick of VCs saying, like, well, the market size is too small. and I kind of feel like it was ah often like a lazy answer. Answer. yeah know And the reality is most really interesting markets at the time of the pre-seed don't even really exist. or They're kind of theoretical. There might be a lot of potential yeah folks. And then we have a lot of nomenclature around you know different kinds of markets. But really, you're you're kind of saying, is the pain deep enough? And I think in this case, what our memo talks about is saying,
00:35:40
Speaker
look, there's this company out there called Salesforce.com that really invented SaaS software for the enterprise. It's crazy. You saw the acquirer from day one. And the way they became so relevant is the way you got paid is that you put your stuff in CRM. That's how Salesforce automation started. It was fundamentally about getting paid and about tracking leads and the kind of revenue process. Agreed. And I just, I knew if someone could create a way for reps to use this offer. And everybody used Salesforce, but they used it because they had to. And if someone could wedge and become the rep's choice and become the way people, you know, you talk about in your pitch, the two panes, the two screens, you know. Here's my screen of my CRM and here's my screen of how I get paid. I'm really trying to see how one leads to the other. Totally. And Salesforce would never let someone get between them and the reps getting paid. You're totally right. And they saw that very clearly. Yeah. And I knew you guys were capable. The thesis was, we love the idea of what we call founder opportunity fit, which was Jaron and Matt and his crew had spent time in venture capital, in valuations, in the next generation of the cap table,
00:37:00
Speaker
who better to kind of navigate this, the kind of the revenue side and the and the finance side yeah to build this? yeah You know, one, it's it's a little bit of an inside baseball kind of thing, commissions, right? Oh, definitely. And, you know, which is awesome. yeah We love that. and And for me, the last thing i say about market size is just like,
00:37:18
Speaker
So when you do something amazing for a set of customers, you you you um you you get permission to to do the next thing. And that's generally where the real market size comes from yeah is the second product and the ability to kind of lend and expand with what you have. yep So the most important thing is do something incredibly well. yeah Right. And so anyway, so that so i that was not a big concern for us. But yeah, we had a lot of VCs pass based on that. A ton. And what do they look at? They look at what's being spent today. And it's like, that isn't actually that relevant. And the way, there's a lot spent today. There's billions of dollars spent today. But like, that wasn't big enough. Yeah, it's not big enough. It's like, well. And I kind of agree with them. Yeah. Like for certain. I agree with them that that was the size of the market at the time. And that that market wasn't terribly appealing to me either if it stayed at that size. That's right. To to your point. but it was a bet that it was going to be. You're going to bring in, you know, classic Clay Christensen stuff. Got his book right here. Yes, and some non-consumerers. Yeah, the non-consumers come in, which is a lot of what you did.
00:38:13
Speaker
Totally. And land and expand is a lot of what we did. We yeah we had a 15%, probably 20% product that dropped pretty early on in Spitz. Days added 20% to our ARR overall. so And we had another one coming right around the time that we kind of got acquired. So, yeah, I mean, I totally agree with you. What's your role? You earned the right to do the next, to solve the, that's that's the wonderful thing about being a problem ever is you earned the right to solve another problem. Because I,
00:38:39
Speaker
Maybe what I would say is like sometimes it feels when you read analyst reports, you read like VC blogs, it feels very analytical. But the reality is, you know, again, we're in the in the world of AI, but these are humans making decisions and humans are fundamentally emotional creatures. Right. And they're right. And so when you do something well for somebody, you earn the right for them and say, I'm going to trust you with my pain. Yes. You know, like a therapist or, you know, right. like totally um And so it's like, i jar I love entrepreneurship. Like we just started a new little like a model. I like it. Jaren, you've earned the right to solve another, you know, tellingnna trust you with my secret pain, you know? And yep um the cool thing is Spiff has gone on to have a a ton of customers now. Yeah.
00:39:24
Speaker
I'm trying to think what else we want to highlight from that journey. We're over a thousand now. So yeah, that's amazing. At the time of acquisition, how did you have? Uh, we, we, we've probably, we've probably added, we probably, I need to be careful because we're at publicly traded company, but I will say that we've doubled, I can, I think I can say that we've doubled revenue, but not the customer accounts. There's been some shifting there. Okay. Okay. Great. And I know it's continued to like be bigger and bigger. Oh yeah. Yeah, for sure. Yeah. Huge, huge, some huge customers. fact, this is probably interesting, think, worth people knowing is part of the, so Salesforce led around, obviously, at SPF. Yes. Part of motivation for the acquisition is they were going become a customer. Yes. And a very big customer. Yeah.
00:40:12
Speaker
And that was probably one of the biggest drivers of the acquisition. We found out the acquisition. Yeah. Was that they had actually selected us among all the vendors customers.
00:40:23
Speaker
The up-and-coming vendor of choice, yeah. And ah they had compared us in benchmarks. So unfortunately, I've had... you know i'm I'm a knife fighter CEO as well. I've never i've never had these yeah open like these blue oceans. I don't even know what that would feel like. I'm ah i'm like a red ocean c eight CEO. i'm like I read these Peter Thiel... like you know The best way to succeed is find a non-competitive market. I'm like, wouldn't that be nice? It would be great. yeah It's never been. You've always had a very highly capitalized, very very very very visible competitor. And frankly, very skilled yeah competitor, too. And that was true for Spiff as well, yeah sadly. um but So we were selected as the vendor of choice over both a bunch of legacy software providers, which isn't terribly shocking, but then also over a range of other vendors that
00:41:12
Speaker
backed by some incredible VC firms. Yeah. So it was great. um And that was a big driver of the acquisition. Yeah, for sure. ah There were other drivers as well. Like we... you know We brought on a board member early on, Sean Jacobson, who Gavin and I both love. Just an incredible personality and an incredible, ah you know added so much to our company.
00:41:34
Speaker
But he introduced us early on to um ah Matt Garrett at Salesforce Ventures. yeah And we brought Salesforce Ventures on early. yeah Yeah. Much earlier than I would have ever. Which which runs a counter to a lot of VC advice around bringing in strategics.
00:41:51
Speaker
ended up working out pretty well for us. Right. At that point, you had a good board. You had a, you know, a solid group of VCs around the table and and backing. And so it was like a series.
00:42:03
Speaker
they They came in small in the B? Yes. Yeah. And then led to C. Yep. Yeah. Totally. Yeah.
00:42:11
Speaker
Lots of things we could talk about with SPF, important moments. um um i i because Since we have it, I got to show you our memo just to show you that. ah Let's see. This is so cool. The work here. There we go. have it opposite Wow, this is so cool. Yeah, so here's the memo um you know that we wrote. on We do this with every significant investment we make.
00:42:35
Speaker
These tend to be pretty proprietary, by the way, at least going back to my days of VCs. so I mean, it's pretty neat, to honestly. I don't think you've seen this. I haven't. yeah and And a lot of times it's hard to get VCs to share their memos with you at the time of investment because they're going to be evaluating you as a manager and other things. You know, you got to do it.
00:42:52
Speaker
um But when they do, it's usually extremely valuable to the entrepreneurs. So I've i've seen that they'll redact to them sometimes and send them over to you. And I think it's actually wise. I think it's really wise, actually, for every CEO after a round to say, hey, can I get your memo?
00:43:07
Speaker
Yeah, it's it's really smart because you'll you'll see how, again, they'll redact it partially. But um yeah, they'll you'll see how they think about help you It'll help you interact, engage with them better at on the board level.
00:43:17
Speaker
And it'll help you to see what their real concerns are. That's cool. That's cool advice. I actually like that advice. um Let's see here. Things that you'll think is fun. So, yeah, I mean, so pros, we said, hey, proven known founder with deep knowledge of the space. I've known Jared for a long time. Capture, a solid exit. Let's see.
00:43:39
Speaker
A bet on Jared has sitting with smaller probability of a zero based on his tracker. addition to his experience launching startup, he's a subject matter expert. It was direct experience. Yeah, you look for founder market. Yeah, yeah that was a big thing for us. yeah And the other thing I would say on that that's, you know, cool of you guys is a lot of folks would look at an exit, like ah a capture as not necessarily a positive. Yeah.
00:43:59
Speaker
A lot of VCs, a lot of Bay Area VCs might actually, I think they might look at it as a negative, Gavin, because they would be like, he's not capable of generating a really, 10x return. this is like This is like someone who can chat drive a 3x return, sure, 4x, great.
00:44:13
Speaker
10x, you know, probably not. um ah ah ah you You flip that to, we're not going to get a zero here. You know what I mean? Well, and and also just know that like there was some voices on my team that were kind of like, oh, Jaron just wants to get small deals. Who are they? Who are they? They're yeah no comment. Okay. Yeah. So, so ah I was going to, was making a joke, but won't, I won't say it, but, um,
00:44:34
Speaker
I'm going track them. yeah Yeah. Dalton. Well, I'll tell you after. coming for you, Dalton. I'll tell you after. um All right. So, um but the way I saw it, look, you know, you have a large family.
00:44:45
Speaker
Yeah. um You pay for some expensive education. i Like, I knew the pressures you were under and the fact that you had that exit cleared the decks for you to swing yeah the fences. definitely. And so it's like, it's real life. You know, we get it. You don't have a portfolio. So I, I knew kind of what, like some of the, some of the kind of constraints. and yeah So I understood that you were freed up to really go big. It's really interesting that, yeah, like kind of psychological level you were even in thinking, thinking about, which is super valid. It matters. I mean, it matters. Yeah. One of my favorite classes. then what You never see it in investment. No, you don't. It matters a ton. I mean, one of my favorite classes at business school was called the human element of private equity. I'm like,
00:45:23
Speaker
That's a lot of what you did. And it's, yeah, I mean, does this stuff matter? Yeah, it actually matters as much as other things, right? was wondering why you wiretapped my phone at the time. Yeah. It's just standard. Just standard. Yeah, just hard drivers. Yeah, no word.
00:45:35
Speaker
um Okay, i so maybe I'll, it's let's see, something that you might think is fun here. Opportunity size, we said, we is it was it positive for us? and um we um Strong evidence of customer pain. We love that you had run a great process. yeah Again, this is pre-revenue, pre-product, and Jaren hasn't joined the company, but we for from a pattern recognition standpoint, someone who runs a great process is more likely to be successfully successful. So process matters to us. um And the process there was we had interviewed a lot of folks, and we uncovered it.
00:46:09
Speaker
immense pain like that level of pain yeah it was like which we love hearts and in entrepreneurs don't entrepreneurs focus too much on solutions and not if i'm paying yeah pain and i is that's what is good to know couple things that we we said were cons part-time founder yep um early stage company that is what it is premium valuation wow yeah just kind of fun ah well and probably at that time yeah kind yeah if that's yeah i mean this time it has money but you know So we kind of go through how it fits with us. Talk about Jaron. I think we just say so many glowing things. It's almost embarrassing. Mike.
00:46:42
Speaker
um Yeah, Mike. Talk about the rest of the team. Jimmy, that's so cool. Yeah, and this is this is kind of fun. So then we, at the end, and I'll share i'll ill share this whole thing with you at the end here, but We actually kind of go through three scenarios, slow, plan, and exceed. Yes. And what's kind of funny, and I tilt back, just to touch. And this was done, you know, before we did the first deal.
00:47:06
Speaker
and Wow, it's like almost. It is so close. We actually, ah we missed it by a ah few years, but the the actual number on the exit size was like essentially right. we Within five or five percent. Is this 28? I'm sorry, i can't see that quite. 26. Okay, 27.
00:47:23
Speaker
And um anyway, so it was a great outcome for us. We just did a little, around kind of wild. intta And we we were going in without this being anything. And so you know we thought the most likely was, and at the time, you know we thought there was a real chance of multi-billion once we kind of got underway, but. Yeah, you know, just kind of interesting. and then And then we kind of, these are some the details. But yeah, that's that the Kickstarter. the the kickstar that's um then i'll kind of overview there. Do you want me give you the quick pitch?
00:47:50
Speaker
Yeah, do you want to do the the quick pitch of Spiff? It's so weird to give a pitch at where I'm at now. do I can give my pitch again at the sea level. It's kind of crazy. It's surreal. um Yeah, so we started the mission.
00:48:04
Speaker
i don't even know what to say about this, but it's, you know, hey, it's it's like ah it's on the nose there. You know we're go build a great commission system. ah it's Interesting that we kind of looked at our three value points here. i don't even remember these folks. So real-time commissioning, back office automation, and commission-blind optimization.
00:48:20
Speaker
of you know We learned some things on that. That isn't how I would describe it now. so But there's enough here that's that's still meaning important. I did love, this was very memorable to our team, the Victorian style manual labor, which you took as a customer quote. Yes, because that again, that immense pain.
00:48:35
Speaker
yeah When we saw that, idea we burst out laughing because someone's like literally, this was a poll, by the way. we So we sent out ah a survey to I want to say it was like 2000 CFOs of startups. We ended up getting about 150 or 180 response back somewhere in that range. And there were quotes. We said, describe this was the response to describe your current commission process.
00:49:01
Speaker
The response was Victorian style manual labor minus the smog and adverse working conditions. That's right. That was the direct quote. It's amazing. By the way, you're like, dude, this guy's a poet. This is like Dickens hiding in some finance department. I know. He's been frustrated. Yeah, he's just like, this is moment. Ah, yes! Yeah, Gaff and I both study literature a lot. So yeah, yeah, it's totally kind of funny. Yeah, but yes. And I actually don't think that was like not represented. I think it's very representative. So yes, we found an immense amount of pain. Yeah.
00:49:40
Speaker
uh you know i think with the market we kind of felt like it was the the point of this was hey you know we know that the market for commissions is not going to be that gigantic there was actually a garner study that paid it closer like 1.2 and we had we had kind of we were adding some things into it so it was a little i mean i put spiff estimates there too so you know like we we did so that it was actually like just barely over a billion yeah Exactly, it exited at the time or it got in public. And I think it was like 400 million so. It's like not a great exit. yeah So I think what this was trying to show is like, look, we're at the center of a lot ah ah lot of stuff. I mean, the SPM one is obvious now in retrospect. most A lot of people don't even think of ICM as supper from SPM. And those two words stand for incentive compensation management and and sales performance management. So ah clearly we play squarely in that other billion dollar market right now. And I think one thing you knew that I think was community that we got was like, hey, this is this is a really, it's you know, this is maybe a smaller sliver of this, the intersection of these markets. This is very strategic. It's strategic.
00:50:48
Speaker
Crazy. It's so strategic for for players across all these different yeah verticals. yeah And especially when AI, you know late in Spiff's journey, AI started entering into the product. yeahp And we came clear like, okay. Yeah, this is super strategic. i I couldn't agree more. And that's kind of what we wanted to convey with that. We do do a bottoms-up revenue estimate.
00:51:10
Speaker
um It's super off and wrong. ah One of the first things we learned, and I think I have this in here somewhere. This is kind of one of the first things we learned was that how wrong this slide was. So we we thought it was going to be CapShare part two. Kind how we were pitching it to you, yeah how we were pitching it to others. And CapShare was, hey, we're the CapShare and its biggest competitor, which was eShares now, Carta.
00:51:33
Speaker
So everyone knows Carta. That was my previous company, its biggest competitor. um They very much our playbook was, hey, we're going to start in the kind of bottom left of this graph, which is kind of a narrow product focus, really focused on the startup market, actually, or or SMB market. And then we're going to just do the classic innovator's dilemma and move right up and into the to the right. yeah We ended up, like the first two customers we signed,
00:52:00
Speaker
So like looking at this estimate, yeah A, we're not even at 10,000 customers right now. We're at 1,000 plus, a little bit more. So um like look at that. Yeah, that's crazy. And then we're we're wildly, this number is wildly off. i mean we are mean, we have several companies that have TCVs in the multiple, multiple millions. So, yeah.
00:52:25
Speaker
did But we definitely got to a revenue potential, I think. You know, again, I'm at a publicly traded company, so I've got to be very careful. Right. But that revenue potential is for us. But even the journey before you got acquired, it was clear that you were going to be a replacement for legacy vendors and for a large companies. Totally.
00:52:43
Speaker
ah Because so many of, what so much of what had what gone on is is, you know, I think you said it well, professional services masquerading as software. Totally. Totally. Friddle. Yep. ah Unchangeable. Yep. ah Riddle with errors. Yes.
00:52:58
Speaker
Excel running. so So, you know, replace Excel. The reality is Excel was still in use even when you had bought millions of dollars of software. i told you because you didn't trust it. Interesting. This is a great. Yeah. Yeah. it's Totally. So I think one of the big things we learned was a we thought we were going to come in and serve a bunch of small companies. We ended up coming in as ah much. We, the entry point of this market ended up being quite a bit more mid market and even upper mid market. Yeah. That was the entry point.
00:53:24
Speaker
So I think a lot now about insertion vectors when I'm starting a company and we just, we were, we were, that we were roughly right. But you know, It didn't matter, right? We we we got it enough right totally looking at this. do do you um It might be that may have a good moment to talk about you know one of the big challenges for SPF as it scaled, which is the reality of implementing the software. Yeah.
00:53:48
Speaker
I mean... and And how that influenced your ICP and PC. Yeah, it's a huge, huge, huge ah pain point for us because we we were selling, as exactly as you said, we were selling professional services. We sold against professional services masquerading use software.
00:54:05
Speaker
And we found that it was a tough nut to crack in terms of us truly automating all the professional services. And so even to this day, there's still a lot of work um that AI is going to to, I think, completely, it's going to knock the cover off the wall. So if we think that this is the market now, it's going to be so much bigger because AI is making it so easy to to implement yeah these very complex systems like a commission management solution. Yeah. That's exciting. Yeah. I don't know if there's much else here, I would say. I mean, it looks like we had already had some yeah some closed deals or, oh no, this was a survey. So yeah, I know we closed early on, you know, and so grateful to them, but we closed early on. Experticity. Yeah. We closed early on um Weave and we closed Lucid. yeah Thanks, Gavin. Yeah. um You're huge part of that. um
00:54:56
Speaker
Those three companies, ah we knew, i knew in me when we closed those three companies, Gavin, i I knew we were going to have a great company. Honestly, there was a great market here. They had such crazy pain and they were willing to pay. Yeah, they were definitely willing to pay. Awesome. Like our first customers were kind of in the $20,000, which for you and me, we were like, wait, what? They were willing to pay us 20 grand? Like, is that, we remember we were targeting like maybe five to grand, right? Oh, it'll be a, we'll knock the cover off the ball if we're getting $8,000 these folks.
00:55:28
Speaker
our first customers. We're the 20 to 30. Yeah, that was exciting it's exciting. So yeah, and then you can tell from this that we're mainly just leveraging a lot of like, we we don't have a lot of actual, we're not in market here. You know, this is, ah hey, our customer research shows this. That's right. And this is like a, you know, this is like a pitch sort of between people who know each other really well of like, hey, we're running a great process here. Yes. You know. Yes. Companies interested in beta.
00:55:55
Speaker
Yeah. Yeah. That's always, you know, that's what you want to leave. with Yeah. Yeah. You got some interest, a lot of interest, so much overwhelming interest roadmap, you know, cool, but who even cares? Like this is, yeah. Yeah. No, it's like you said, a great process. We gave you a demo. So we actually had some software that was live.
00:56:13
Speaker
Kind of pretty, actually. um And then you bet a lot on the team. So we you know we focused a lot on the team. yeah I think the team was incredible. Even when I look at this to this day, these these folks were so strong. yeah and great um Matt's picture is not here. i don't know why But maybe I say it keeps a little profile. I'm trying to keep Matt. I don't know. He hadn't joined yet.
00:56:32
Speaker
Yeah, yeah, and he wasn't going to join for a year. i hope see He was CEO is of the SCA. Yeah, that's right. Okay, anyway, and then this is the typical funding pitch. so Yeah, that's great. Yeah, now very good.
00:56:44
Speaker
um Okay, so the lessons you learned from Capture applied to Spiff, you know, um you know like because I feel like there's a few, like one that I would point out was you felt like with Capture, which I think there's a lot of reasons you felt you're like, look, I had a competitor who raised much more aggressively.
00:57:03
Speaker
They went for network effect. They were successful. yeah And they were able to, you know, own a lot of the market. yeah We had a great outcome. But, you know, they kind of beat us at that game. They did. And so with Spiff, you're like, I'm not going to let that happen yeah to me. Maybe strike. How do you strike the balance between like only the paranoid survive and like running your own race? Yeah. Right. Where.
00:57:24
Speaker
Does that make sense? Because because like ultimately, you know you might have been trailing a little bit from revenue and fundraising perspective. You had a killer exit, a great outcome, yeah you know probably becoming a market leader in combination with Salesforce. i think it's probably fair to say. I think it's fair to say.
00:57:41
Speaker
you know Does that make sense? Like, so, you know, cause you and I would have this conversation and that would be a lot of my advice is like, yeah, that's, it's, we're building the space together. yeah Um, this is less of a network effect driven business than the previous one. And let's run our own race. Yes. Um, Yeah, I mean, I think i think it's so funny because i've I've looked at a couple of Utah companies recently that are um doing four-day work weeks or doing, um you know, yeah this this some really cool stuff. Well, I say, i like, some of them are, I'm not critical of, I actually love it. Like, there's this company, Bamboo HR, that does, like, a paid, paid vacation. They'll give you $2,000 to go on vacation. yeah
00:58:19
Speaker
I'm like, that is so cool. Yeah. ah wildly different competitive situation to us. You know, that's just that just wasn't in, i wasn't even in the realm of possibility for us.
00:58:31
Speaker
Or SPF. I mean, if we were doing that, we would have been lapped so many six ways to Sunday. I mean, it's just not possible, Gavin. I mean, we we were already burning hot yeah to try and stay competitive. You know, maybe it's possible, but I i will never say nothing's impossible. well I'll just say you'd have to be a much more brilliant product thinker and strategist than I was.
00:58:54
Speaker
And my guess is that they were in a far less competitive market. That's my guess. Because if you're in a highly competitive market... which by the way, every CEO should assume. yeah you You just got to assume that. If it's interesting. If it's interesting, it's going to get impotent. And so i do tend to be a little bit more on the, here's how I think about the run your own race. I think i'm I'm very much on the only, the paranoid survive, but how I think about running your own race is in those deep moments when you need psychological attention. salve for your wounds.
00:59:27
Speaker
Look in the rearview mirror and and think about how many startups have died before they've gotten to the point where you're at. And then be very proud of what you've built no matter what yeah happens. Let the chips fall. so yeah And then run your own race. Trust your instincts. yeah Obviously, no, don't trust your instincts.
00:59:42
Speaker
Get crazy amounts of data. yeah Eat brilliant about how you made a product and strategic decisions. yeah And then don't look. And then just trust. And then back yourself. Back yourself. Back yourself. Back your team. Believe. You kind of have to believe. I think about one way you guys did that is this was a low-code, no-code solution with a very ambitious technical architecture that aspired to be much more than commissions and had a technology base to do that.
01:00:09
Speaker
um it It made some um a broad, kind of like a very ambitious view of of where you would take the user. yeah um you know So one of the tensions was like, do you just have it look like Excel or do you or do you have it be something else? And I think for a long time, Spiff was like, we're not Excel. yeahre We're something else.
01:00:28
Speaker
um Now, I think ultimately that architecture that was powerful and extensible was part of why you were acquired and why you're why you're as powerful as you are. Maybe talk about the, this is something that came up in my conversations with with Matt and Mike too, was one of the learnings I think from Capture um was it was a very performant project, but there was, we didn't, there was others that invested more in design and user experience.
01:00:54
Speaker
yep I think you were determined like we are not going to lose like we there's no way in hell we're losing on design. And so you brought in a very senior UX person early, which you kind of stumbled into, Albert. yeah um And, such you know, it became like ah a real secret weapon for the company. Yeah. And actually kind of an unusual structure where you had um both design um and, you know, product and sharing reporting into the CEO. Yeah, and I won't do that again if I start a company now, even in the area of AI. maybe you maybe Maybe speak to that. Yeah, because yeah um
01:01:28
Speaker
I view UX as a CEO-level concern, absolutely, 100%.
01:01:33
Speaker
you know it's it's court It's a core differentiator. It really is. Now more than ever, you know we've got a lot of chat interfaces now. I think i think the whole world right now is is yeah balancing on a pin. Yeah.
01:01:44
Speaker
We don't kind know which way it's going to fall. Right. You know, I, you know, people are talking to chat. I'm talking to chat to you on the way to work. So there's a bit of how are we going to, exactly. How are going to exist in a voice based architecture? are we going to merge that? You know, chat is, chat is so amazing because it can take unstructured data. Yeah.
01:02:04
Speaker
And and it we're in a world where the old problem used to be, how do we get unstructured data to structured data? that That whole problem existed in technology for decades. It's kind of gone.
01:02:17
Speaker
And well, it's kind of, but what which coming back is still unstructured, yeah right? And so there's there's a definitely a tension right now around how do how we exist in a world where we still need some structured data, people still, especially in my world of finance,
01:02:33
Speaker
They still want to see ledgers, man. Yeah. and out And they need to take it somewhere. You want to chat out a ledger? Yeah. Like, let's read out this ledger to me. It's got a million rows. you want me to start chatting it out to you right now? You'd just be like, like good yeah you know? No. So how do we merge those levels? A brilliant designer like al Albert Kandari, and he is brilliant. Yeah. Yeah, it is.
01:02:53
Speaker
It can make a we told, we joke and to still to this day, we said for probably the first two years, we said Albert was our best salesperson. He never once really took a sales call. He probably did, but like he basically never sold. Right.
01:03:06
Speaker
But because we had this this UX that was so demonstrably better, and I'm sorry, than any of our competitors at the time. Yeah.
Focusing on Software Aesthetics
01:03:14
Speaker
It wasn't even closed, Gavin. Yeah. And that ended up...
01:03:17
Speaker
It's closing out in it in a In a category that hadn't really seen yeah beautiful, inspiring software. um So I think that was a really interesting choice. and i think yeah i think especially you know and I think that's part of how your customer, your ACVs grew um to larger amounts than you would expect totally for a startup. yeah because of Partly because of the the the look and feel. I agree.
Talent Acquisition and UX Investment
01:03:43
Speaker
at one One other thing I'd say just sounds just to put a little bit of Utah lore in here that's kind of funny. Um, i so you I had to go to the board to get an offer to Albert because I want, I wanted to give him a sizable offer. And he was working in a very senior position at a company called Instructure here.
01:04:00
Speaker
And i went to the board, got approval. And then he was like, yeah, but I think I'm ready to go. And then as soon as he kind of mentioned that he was probably going to leave and go join a startup, Josh Coates, who is the CEO of Instructure, know,
01:04:14
Speaker
got into a bidding war with us. Oh, I don't think I... Yeah, basically. It was like a mini bidding war. And maybe it wasn't... I know Josh was involved, but it might have been a couple of people over there. But they were basically like, well, Albert, we'll give you this if you stay. yeah And to his credit, obviously, it got to a point where it was just like...
01:04:31
Speaker
But we had to go back and forth a couple of times. So so it was, it it became really quickly like, is Jared a little crazy? Like, I'm sure the board, you you backed me, I'm so grateful. But yeah it was like, really, we're spending this much on UX at this stage? Yeah, yeah. I mean, it was like, it was super. We'd never seen it. Yeah. in it But it was like, okay. And he got a big equity stake, you know? And so like, you know, but it wasn't as big as it as I wish it could have been actually in retrospect. Yeah.
01:04:59
Speaker
um i'll I'll remedy that if I get to work with Alta. Yeah, yeah. But anyway, we answer saw you had to get a board clearance to do that a couple times. It was... yeah he Yeah, I feel like that was, yeah, that paid a lot of interest. You also, like, maybe ah speaking to Mike, maybe speak to the role, like, think that speaks to the, and you know, you also, I think, decided, like, hey, we we're going to be, you brought in someone that was obsessed performance in a way that maybe this space hadn't seen before. No. And was totally overkill.
01:05:31
Speaker
But, maybe speak to that, but I think at some point, It wasn't. Yeah. maybe we speak to oh and And it's funny because this goes to like a blind spot that I had. um So Casey, who had started Capture with me as well, um or at least was the early on at Capture with us, it was our best engineer capture at Capture. probably Probably Steve would take issue with that, but Steve was also the CEO. So yeah, like well it was yeah yeah um our best individual contributor. Yeah. yeah Engineer.
01:06:01
Speaker
Casey and I would always talk about what constitutes great code. And we would always use things like it's extensible. It's it's easy to understand. yeah um And, you know, I'm trying to remember what the third one was. But, you know, we there were these kind of three big buckets. we'd always talk about what constitutes a great code. And um I think it's probably something like it's it was well tested or anything like that. yeah so But the thing that was never in that was its performant.
01:06:29
Speaker
and And so when Mike came in as a CTO, he comes from a, literally, he comes from a fintech. transactional. transactional. Yeah. Yes. Super highly scalable. Yeah. Crazy scalable. Regulated. yeah
Spiff's Culture and Startup Building
01:06:41
Speaker
Yes. And he's, I think in Utah, I think at the time, like there's, there's yeah probably no one in his league and, you know.
01:06:50
Speaker
Again, i'm ah I'm going to flatter you, Mike, and i I think he's top percentile of like 1% of engineers I've ever worked with. um And I've seen a lot. And gainfully employed. And gainfully employed, you know.
01:07:04
Speaker
And, you know, I've seen a lot. I worked in VC for few years before. Yeah, he's awesome. He's awesome. And I would just say, yeah, his emphasis on performance was super not intuitive to me. And in retrospect, it seems just completely obvious.
01:07:17
Speaker
So that was an area where he really taught me immensely. And I'm, to his credit, you know, I don't think I was easy to teach on that. I was probably like, why are we focusing so much on performance? You know, and like to this day, performance is actually a huge area thing that for us. yeah and And one thing Stapleton pointed out, i think it was interesting is just like, Hey, the combination of you being a product engineering focused CEO and Mike being kind of an alpha person,
01:07:42
Speaker
in the in in actually the open source community. it was. And then in in, you know, kind of in the, you know, we'll say it just, you know, kind of ah a developer's developer really else create this like cult around like, hey, if you're serious about um your product and providing like a really a really cool solution, Spiff is the place. I think he did that. I i get i much more credit than me, but thank you so much. but Because I think there was an element of like,
01:08:10
Speaker
I had to get humbled a little bit, but you know, because I thought I knew more about engineering than I clearly did. And I clearly didn't. And Mike stuck with me through that. I think I had a couple of important yeah points that I brought, though, as well. And one thing I'll say about Mike, there's a very famous when there's an old there's a now it's not it's not that old, but there's an older language now called Ruby on Rails. And.
01:08:31
Speaker
There's a famous founder there named, um the founder's name is Mats. He's a a Japanese fellow. And he he has a, there's a saying in that community, which is Miniswan. It's an acronym and it it says Mats is nice. So we are nice. And that spells out to Miniswan. And I feel like that's,
01:08:48
Speaker
really core to spiff's culture when mike brought that which is brilliance like no no leeway on not being crazy smart yeah really being at the cutting edge of a really really smart yeah but also being incredibly kind. Yeah, which I think that's a big part of the culture. I mean, let's let's talk about the culture for a second. We get a whole kind of conversation about the culture across these companies. here You know, we've talked a little about some of your attributes and some of these these these co-founders. I think this mentoring was a key part of it. One of the things that Stapleton mentioned is like, hey, we didn't spend a lot of time. you know, we were we were we had we had remote, we had in-person. We didn't spend a lot of time doing like cultural things.
01:09:32
Speaker
you know My observation is like, hey, the most important thing about culture, especially in like high velocity startups, is like who you are, what you do, what decisions you make, who you hire, who you fire, right? yeah It's like in what the actual work is. yes and And so I think you guys created an amazing culture yeah um of accountability and like passion for this problem.
01:09:55
Speaker
but You know, and you did stuff, you did offsites, you did things like that. But maybe, but I think it's sometimes in the conversation about culture, we get caught up in like, we'll do this thing, do this thing. I totally agree. It's like, actually, don this is a this is so... Yeah, yeah. Or like, don't focus on it. Focus on it. This is ah like you're trying to do something. Yeah. And so the work and and who you are as a person, i it screams so much louder than like the bells and whistles. Agreed. Right? I think sub 100 employees, like my...
01:10:25
Speaker
Like some 100 employees, maybe you could argue 50, but somewhere in there. If you're focused on culture, it's like, that's like being a theater. It's like a ceo theater. Yeah. Like, what are you doing? yeah I'm sorry, but like you're focused on culture. You got 50 people here. Yeah. You don't have a strong enough culture that people can't just feel it. Yeah. And and you got, you got like, you got stuff to build.
01:10:44
Speaker
Yeah. Like focus on building. Yeah. I'm focused on culture. Like, again, yeah like i think i be i'm I'm talking about culture in the meta. Like, yeah if you're building culture decks and you're educating people on your culture, like, okay, there's elements of that that are great. But, but but like like, yeah, why are people motivated enough and passionate enough about but what you're doing that it's just like, yeah Yes. and And so many of the things that will ultimately become culture that people will point, they're going to emerge naturally. Yeah.
01:11:10
Speaker
So you don't need to stress out about it. Yeah. Just solve the problem. Like one of my biggest insights on this is like there's actually um Clayton Christensen wrote an article on culture that almost no one cites actually. And it's such a good article. And he says that most people think about culture as being a product of culture.
01:11:27
Speaker
the people inside an organization, aella the leadership and blah, blah, blah. And he says, actually, culture is often more often than not a product of the customer. It's the problem you're solving for the customer that creates the initial culture of the company.
01:11:42
Speaker
Because you design yourself to be excellent at solving a perfect a so certain type of morale. So you are it's like you but you become fit for a certain function. Does
Innovate Narrowly and Focus on People
01:11:52
Speaker
that make sense? Yeah, yeah. And so yeah I think in the early days, like over-indexing on culture is is kind of silly. yeah And and that's that's not to say you can't have a strong culture. But if you're spending too much time on it as a CEO early on,
01:12:05
Speaker
I think it's a big mess. oh yes ah a hundred At 100 people, slightly different story because now you've got to like scale yourself in a certain way in a way that you can't. You can't have personal interactions with that everyone. You can't.
01:12:17
Speaker
um And by the way, this isn't say don't invest in off-science and all those things. That's not what I mean. What I mean is if you're building really complex culture decks or if you're like talking about how we're goingnna be our culture is going be super different, you also taught me something really big on this, Gavin.
01:12:33
Speaker
innovate narrowly. Don't innovate broadly. yeah A lot of people spend a lot of time trying to innovate on culture early on. yeah And it's like, you don't have time for that. do you know what i mean? Like you're what you should really focus of your innovative horsepower on is the problem you're solving for your customers.
01:12:49
Speaker
And culture will come over time if you get that. um so Like some people try to innovate on legal structures and it's like office furniture. Yeah. It's like, what are you doing? Food. Seriously. It's like, Yeah, which is cool.
01:13:01
Speaker
Which is, which is, i mean, i and I think it's, it's a, it's a, no, it's amazing. Like it's a, ah like it's the, the instinct of the creative entrepreneur is to try to change everything. Yeah. change but But it just, it's so hard. I mean, the reality is no one in the world wants to actually do business with a startup. And so you have to, I always say like innovate on the one thing that you are best in the world at your high elo and everything else be normal. It's okay. Yeah. And you don't have to fight a battle on everything. Yeah. Yeah. That's so good. But no one wants to buy from a startup. Yeah. yeah the The failure rate is already, the the the the playing field is not level.
01:13:36
Speaker
the The deck is stacked against you. focus on solving that problem so that you can be, have the fun, yeah eat your dessert. That's later. That's right. You know, if you're focused now on eating dessert, like doing all these fun things and all these creative things, you're, you're going to potentially kill yourself as a company. Yeah, totally. So totally. Um, maybe one more topic, yes um, that I wanted to get to maybe speak about. So a big part of,
01:13:59
Speaker
having all these successful startups that you've had and has been building teams, um, and, you know, hiring and having to sadly fire and let go of people sometimes.
01:14:11
Speaker
What have you learned about the team building process? Um, you know, what lessons, um, so clearly you've had this amazing founding group that you've now repeated, you know, two and three times with,
01:14:24
Speaker
um, that you've chosen really well. And, and you you all have grown up together. yeah You've learned, so which is, which, which is part of what makes this whole thing beautiful. Yeah. When you're not playing, you know, you're not playing for money anymore. this is more, you know, you and I've had this conversation.
01:14:40
Speaker
What has like, Hey, like, what are you playing for? And it's, it's about building. It's about the people. Um, Maybe you speak to, without we don't we we're not going to talk through any specific people, but um what did you what did you learn when it when it didn't work out? Yeah, yeah, yeah. You know, yeah what did it have? That's the most important part, right? um Well, first of all, if you I found ah that if you really care about people, like really, and it's you can't fake it.
Evaluating and Aligning Management
01:15:09
Speaker
at When you really care about people, ah the hardest things actually become so much easier. yeah And what I mean by that is like we talked about loyalty early on yeah and loyalty is great, but loyalty.
01:15:20
Speaker
so it's pretty easy if you really care about someone to look them in the eye and say, I care about you. And the biggest way I care about you is I care about your equity. And that's what's really going to, that's what I promised you. You were clear when I, when you joined. And I always say this whenever I hire someone, i always say, um you know, I think you could scale infinitely yeah and I'm going to give you enough rope to hang yourself.
01:15:44
Speaker
But if you end up hanging, like we're going to swap you out. And guess what? That's true for me. Yeah. True for it. Yeah. So it's, it's true. I tell this to everyone on my arm. It's like, even as excited as I am, I always say like, Hey, you know, we'll see how far you can scale.
01:15:56
Speaker
And I believe you can scale infinitely right now. Like, I'm so excited. But if you don't, we're going to have a conversation. And it's not going to be that painful. It was pretty painful a lot of the time. Extremely painful sometimes. Because a lot of times people are upset. They're angry. They get mad at you. they they did They unfollow you on LinkedIn and tell everybody what a jerk you are. and Yeah.
01:16:16
Speaker
And all the while they're making a lot of money too. A lot lot yeah. I mean, it can be pretty yeah brutal at times yeah and feel unfair. Yeah. But like, I also feel like, um you know, don't don't get sideways with your team. Like so many so many CEOs get sideways with their team. And it's like, anyway, the long short, the short answer is um you absolutely, as it I view it as a core skill of a CEO to be constantly evaluating your management idea hutling Yeah. And you shouldn't have to wait for a board member to bring it up. Right. That's a problem, actually. Well, yeah and yeah I mean, if if it's ah if it's a fair blind spot and you just didn't notice it, that's great. Okay. But but then be very responsive. But I'm with you. You should bring it the board. But I'm with you, yeah. If a great CO is rarely being surprised by a board member. Oh, I know go that our CRO wasn't scaling it. yeah that's If that's happening, yeah you might be. Your job might be right. Yeah, you honestly yeah really, yeah, because that's your review. That's your main job. What about um in making hires?
01:17:18
Speaker
um You know, yeah you you used search firms, you used board members' referrals, you you sourced your own. um what What did you learn about, like, consensus hires, non-consensus hires?
01:17:35
Speaker
um I'm guessing what you'll say is like, hey, what I learned is i I need to trust my instincts in the day because it's my hire. Yep. And sometimes very board members were, like, fired up. Sometimes they weren't. Sometimes it was very non-consensus. yep You and I can think of a couple not very non-consensus that you were very glad you'd made.
01:17:53
Speaker
But those take courage. I'm just curious um what you'd say about that. Yeah, I mean, I i totally agree with you. I made several non-consensus hires, and i'm I'm super proud of almost all our hiring at SPIF. And, you know, to be honest, we we had to let some people go, but I think I was also...
01:18:11
Speaker
pretty signed up to make that happen when it needed to happen. And I didn't, I didn't, uh, dump those difficult conversations on other people. So, yeah, I mean, I, um, I don't know that there's a a rule there that I can point to. I mean, I, I have rules for hiring, but they're, they're kind of unrelated. I, I, I, I'm obsessed with getting, um, you know, blind reference. I do definitely have to do several of those. I look for people that have longevity in their roles.
01:18:38
Speaker
I, I, in a startup, I don't like folks that are bouncing around. Yeah. so And then I look for championship teams. Those are kind of my three big principles. Have you been part of a championship team?
01:18:49
Speaker
And can you speak to it in a cogent, cohesive and and compelling way? And then, you know, or do you have a history of not just performance on a championship team, but also longevity? Mm-hmm.
01:19:00
Speaker
You know, nothing great is built in a year. yeah It's just... I think that's great. See, it's getting that way with AI, but I still think so. Most great things aren't built in a year. Yeah. Even OpenAI, which is arguably the the best startup in history now, it wasn't built in a year. But if it's so great, why do you leave, yes too? if your If your role so important, why are you leaving? Yeah. Yeah. yeah And then do your do your back back channels. Yeah. And then, you you know, you know your you know your management team better than the board ever will.
01:19:27
Speaker
You do. And I love board members that have deep insight. And there's a lot of them, you know, there's a lot of them, Gavin, including you. So, you know, obviously, let's listen to your board. It's crucial. Yeah.
01:19:38
Speaker
Ultimately, you have to be the one to man-tying them every day. Totally. yeah and i You can't that's right and i i get conviction. yeah It's a problem. and i think it's like i think yeah you Use your board. like yeah Listen to what they have to say. But at the end of the day, I think you have to you're in the you're in that CEO role for a reason. And I think you need to you need to you need to ultimately munate... You make the call because it's here's what's brutal. And again, i I feel like I can give this advice because I have the same thing, which is if i i need to make the call or my partner needs make the call because at the end of the day, it's it's rare for a board member or or in my case, like an LP or someone to say, oh, that's okay because I, you know, you screwed that up. But I kind of said that that was my advice. They're they're like, you screwed that up. yeah exactly Like sadly, it's it's rare for people to remember that they actually gave poor advice. Yes. They just know that it didn't work. Yes. sure So you have to be just, you know, you got own it. I agree with you. Um,
01:20:34
Speaker
yeah This one's so on the nose and i you know and i i've like I'm going through some some weird things to handle in my life where I'm just really evaluating like what what I want to do in the second half of my life. And and to a large extent, you know it's not about money and there's so many people out there that struggle with money and there's so much unfairness in all this. But ah huge with all that said, and was a big caveat, like absolutely a huge reason I do startups regularly over and over again is because I want to go on a special journey with people that I deeply care about yeah where there are awesome rewards at the end of that. yeah you think
01:21:10
Speaker
It's like a dungeon analogy. you want to You want to assemble your quest party and then you go out and look for treasure chests. yeah And that's so fun when you open a treasure chest. There's almost nothing for me In some ways, that competes with that. When I look at a co-founder in the eyes and I'm like, you now we'll get to you now have this much did this much that you can go build another company with. You can go do this for other people. You can give it away entirely if you want to. It's up to you. but You now have a much bigger impact.
01:21:40
Speaker
um And so we do, we track, Matt and I have a little spreadsheet and we've tracked everyone that has made over 250,000, over 500,000 and over a million at our startups.
Salesforce Acquisition Strategy
01:21:50
Speaker
And we publicly published that on LinkedIn.
01:21:52
Speaker
So ah you can see exactly how many 250,000 how many errors and how many we've created in our last three companies together. so That's so cool. That's kind of how we think about it. It's a growing list. Yeah. and And I think even more than the money, i think the legacy of what these people are learning from from your team, from you, um and that the companies they've already gone on to start. That's totally true. Which, you know, we have lots of these people that we know. is is awesome.
01:22:21
Speaker
and So I think that's, in some ways, that's the true measure of the great companies as the as they attract people who can be founders and CEOs. That's cool. Does that make sense? They're a diaspora. Yeah, I know for me, I, yeah, I see, when I see a great company, i there's a moment when I'm sitting there with like a bunch of execs and going, wow, I got 10 CEOs in the room here. Yeah, that's so cool. But they're there because they're respected and they're valued yeah and and they know their learning curve is still super super steep. yeah ala So I think you're that kind of founder. So I think that's that's a special legacy that we'll see a ton of like spiffers out. It's already happening. JP is that starting an awesome company. I've got two other people that are You know, um one that, you know, um yeah yeah just went to another cool startup that's kickstart backed actually. And so, you know, we've, and then I've got two more that I think are about ready to spread their wings. So we'll, we'll introduce you to them soon. I love it. and We're excited. As we talk about the the sale of a company, one of the choices you made was to um bring in Salesforce in a small way in the B and then have them lead the C. yep um How did that affect the um the ultimate sale a company to Salesforce? In hugely positive way, which is again, somewhat counterintuitive.
01:23:39
Speaker
um And so, you know, i think... kind of a cool lesson for me to learn that, you know, having a, bringing a strategic in early, you know, they, they, they approached us.
01:23:51
Speaker
I want to say, okay, let me just see if I can do this, this math. Right. So they approached us, um, dream force. Let's see. So September or 25, 24. So 23. Yeah. They approached us to dream force. So September of 23, and they wanted to acquire us right around yeah then. Yeah.
01:24:08
Speaker
And ah we were so not ready. yeah The amount of money we would have gotten out of that transaction would have not moved the needle for you, me. And yet this is our one board member we have, which is yeah is a Scottish gentleman that we we both love very much. Leslie Stretch would say, they're the destiny buyer, you know. Salesforce is in the destiny of my hair, you know, and so they were our destiny buyer. Right. And so to have them come too early was excruciating and painful because we, I honestly think, and this is part of our work, you know, I look at this competitive landscape now and,
01:24:45
Speaker
I mean, it's tricky. damn The exits are tricky now, right? Because clearly Salesforce is the buyer here. again And so we got the destiny buyer. So it would have been hard for us to say no.
01:24:56
Speaker
um Fortunately, there was some some stuff that happened with Salesforce at the time where they essentially disbanded their M&A. This is public information. They disbanded their M&A committee. which gave us another year to grow.
01:25:07
Speaker
And then Dreamforce came up again and they approached us. At that time, we knew was real. we we We couldn't stave it off much longer. It was kind of how we felt about it. Obviously brought the board in. um And then we had a you know pretty interesting debate around whether you bring in and an investment banking firm. Sub a billion, it's not clear.
01:25:26
Speaker
It's not obvious. that you Certainly it's not going to be obvious if they'll even be interested in you, like talking about like the Goldman's of the world, the Morgan Stanley's of the world. Sub a billion is kind of like, eh. Yeah, exactly. And so we had a question in our heads of, do we bring in a banker or not? Yeah. um We ended up not.
01:25:46
Speaker
I will say to their credit that both Morgan Stanley and Goldman and Still helped us out immensely, both of those folks did, um just through some advice. yeah um And so i I feel like I owe those folks actually a lot. um And then we got into some pretty substantial negotiations. I mentioned earlier that, ah you know, I was was actually, you know, one thing I i made might give myself a slight pat on the back is I feel like I learned that lesson from you with Capture, and I negotiated extremely hard yeah in this one. no Very, very hard. And and we we definitely got an X factor on the on from where we started to where we ended. And one thing I would say, i think for entrepreneurs that maybe haven't been through this or been through it and maybe they're trying to go bigger like you did, I think what you did really well this time is just remembering that like if this is a human, this is like, yeah, this a financial transaction, but this is an emotional decision by someone someone who matters at a large company who
01:26:47
Speaker
ultimately like does the difference between one hundred million and 500 million and a billion matter to a company like Salesforce? Not really at all, actually. yeah Like it actually, if it works and it's what they hope, it actually kind of, it's all, that's all kind of rounding error. yeahp It's like them putting their bad their bit their badge on the table, their reputation on the line for, and it becomes pretty personal for you.
01:27:11
Speaker
very Right.
Maintaining Post-Acquisition Relationships
01:27:12
Speaker
Does that make sense? like very Like in some ways it's, it's more of a hiring decision. yes even Even at the scale of what Spiff's talking about. And so remembering that as opposed to saying, hey, this is some like game. No, this is like trust and momentum and like, can I help the career of somebody else?
01:27:28
Speaker
And as a piece and yeah the the human element is as just as important as like the the realities of the business that you're selling or that's buying you. And so I think that's 100%. 100%. A hundred, per right a yeah a thousand percent. Sure. yeah Yeah. And there's this interesting tension that happens in any negotiation where you care so much about the company and the people that you're working with and what you've all worked for for five years. And that translates to a financial figure. And so you're debating this number and how hard you debate.
01:28:01
Speaker
And it can get, you know, in any cases, it can get borderline or even fully acrimonious. And so there's this real tension between keeping an emotional yeah tie yeah with the counterparty. Yeah. um But at the same time, negotiating super hard. Yeah. and And it's like a lot of things. Those seem like they're opposed, but in a lot of ways, they're not. Yeah. They're not. Yeah. It's about, hey, I care a lot about you. This is how we're going to get everybody on the team so motivated to go hit that number, you know, and like try to see it through their eyes a lot. And you'll find that there's
01:28:36
Speaker
there is a There is a difficult, narrow, but there's a clean path through yeah avoiding acrimony and still negotiating that crap out of something. Totally. And there's you can build trust through that. Yeah. yeah And same thing on you know negotiating for fundraisers. This is the end point. But it's a beginning, too. And I think one of the things that you've always that I've admired is you you care about fundraisers being successful and people feeling good about investing, but also about acquirers feeling good about... so and And you and you you knew, hey I'm going to be living with the consequences of this deal. Yep. You know, one, two, three plus years down the road. And so I want to be able look everyone in the eye and say, like, this was a no-brainer deal. Totally. See, I told you. i i' am very close still. yeah I mean, I haven't talked to Kathan for a lot reasons. Kathan Karkanas, who was the head of the cloud at the time we were acquired.
01:29:26
Speaker
I care deeply about what he thinks about me and what he thinks about this yeah company. I care deeply about my current boss, Chris Bellmeyer, and what he thinks about this company. um And I stay in touch on a very regular basis with the M&A team yeah that bought us. No, I don't have to because I care a lot.
01:29:43
Speaker
lot. They put their names. Some of these folks literally, like you said, they put their name or their badge. They're like, okay I'm making a bet on Spiff. So, yeah, I mean...
01:29:54
Speaker
I just feel like it's like basic ethics, but if you believe in repeated games. yeah you know so This is all repeated.
Conclusion and Appreciation
01:30:00
Speaker
Yes. yeah Yeah. That's great. I love that. That's really good advice. um Cool.
01:30:06
Speaker
Well. um Thanks, Gav. Yeah, this has this has been an amazing conversation. Yeah, what an awesome conversation. I had a lot of fun. Yeah, this has been wide-ranging and very interesting. sir Thanks for your time. Yeah, thank you so much. Let's do it again soon.
01:30:20
Speaker
Yeah.