00:00

If you wanna reverse engineer things, you have to have a model with economies of scale that gets you to three to four hundred thousand dollars per employee, or your model is not real. It is not scalable.

If you wanna reverse engineer things, you have to have a model with economies of scale that gets you to three to four hundred thousand dollars per employee, or your model is not real. It is not scalable.

00:18

What's going on, man? How are you?

What's going on, man? How are you?

00:20

I'm so excited to be here, and talk about all my first millions

I'm so excited to be here, and talk about all my first millions

00:24

talk about the millions I lost, few learnings on scaling, and whatever you want, Sam, it's great to be here. I love you for many reasons. One of them is, like, you're so catchy and you're so good at summarizing important things, but in explain it in a very simple way and simple to understand ways. But before we get into that, I need to, like, talk about background because we have to to the OG software guys, you are the guy. So, like, if we talk to, like, the founders of HubSpot or, I mean, like, guys who run multi or tens of billions of dollars companies, they say, if you wanna learn about software, Jason's the guy, But we have a bunch of, like, sometimes twenty year old, kids listening to this, and I wanna, like, give a little background. And so we don't I don't wanna spend too much time on this. But basically, what I know about you is you started a few software companies including echo sign, which you sold for nine figures. I don't know the exact amount, but you've said nine figures. Then you've been investing in in startups as a VC for, like, since two thousand thirteen, which you said, I think you said you ten extra fund or something like that. Is that right? That is about that is about right.

talk about the millions I lost, few learnings on scaling, and whatever you want, Sam, it's great to be here. I love you for many reasons. One of them is, like, you're so catchy and you're so good at summarizing important things, but in explain it in a very simple way and simple to understand ways. But before we get into that, I need to, like, talk about background because we have to to the OG software guys, you are the guy. So, like, if we talk to, like, the founders of HubSpot or, I mean, like, guys who run multi or tens of billions of dollars companies, they say, if you wanna learn about software, Jason's the guy, But we have a bunch of, like, sometimes twenty year old, kids listening to this, and I wanna, like, give a little background. And so we don't I don't wanna spend too much time on this. But basically, what I know about you is you started a few software companies including echo sign, which you sold for nine figures. I don't know the exact amount, but you've said nine figures. Then you've been investing in in startups as a VC for, like, since two thousand thirteen, which you said, I think you said you ten extra fund or something like that. Is that right? That is about that is about right.

01:24

And then what else did you do besides echo sign before that?

And then what else did you do besides echo sign before that?

01:28

Before that, I had a a startup where I made my first million.

Before that, I had a a startup where I made my first million.

01:32

Between

Between

01:33

when the internet died for a while, I actually founded a startup making implantable

when the internet died for a while, I actually founded a startup making implantable

01:37

batteries from nanomaterials,

batteries from nanomaterials,

01:39

which I knew nothing about, which is interesting. We sold it for fifty million after twelve and a half months. It is kind of a an MFM story. And I learned a lot from it. What was that company called? It it was called Danagram devices, and we did something that was thought to be impossible,

which I knew nothing about, which is interesting. We sold it for fifty million after twelve and a half months. It is kind of a an MFM story. And I learned a lot from it. What was that company called? It it was called Danagram devices, and we did something that was thought to be impossible,

01:54

and we got by by our competitor. It was a classic buyout after twelve and a half months when we took away one of their largest customers.

and we got by by our competitor. It was a classic buyout after twelve and a half months when we took away one of their largest customers.

02:00

Did you raise funding?

Did you raise funding?

02:02

We did. And it was hard. It was I'm dating myself. This was one of the crummiest points. We raised nine million in our seed round and sold seventy percent of the company.

We did. And it was hard. It was I'm dating myself. This was one of the crummiest points. We raised nine million in our seed round and sold seventy percent of the company.

02:11

In our first round. And that was the deal. That was the deal. That there was no choice. There was no negotiation.

In our first round. And that was the deal. That was the deal. That there was no choice. There was no negotiation.

02:17

It was a different time

It was a different time

02:19

And that meant that meant what what you and the founder, you and your other partners, I don't know how many you had had fifteen million left over to share after the fifty the fifty million dollar exit. I'd say it was more like about ten million or maybe even eight million to share. So it was enough. Interesting for the first million,

And that meant that meant what what you and the founder, you and your other partners, I don't know how many you had had fifteen million left over to share after the fifty the fifty million dollar exit. I'd say it was more like about ten million or maybe even eight million to share. So it was enough. Interesting for the first million,

02:35

it was just enough to not work for the man. I have worked harder. I worked even harder on the next startup on echo sign, which Adobe bought. So echo sign, was that basically like,

it was just enough to not work for the man. I have worked harder. I worked even harder on the next startup on echo sign, which Adobe bought. So echo sign, was that basically like,

02:44

what DocuSign is now? You guys just sold earlier. A lot of learnings. Yeah. We actually

what DocuSign is now? You guys just sold earlier. A lot of learnings. Yeah. We actually

02:49

DocuSign believed I mean, I'm really dating myself. DocuSign was basically a printer driver company when we started. We were the first web solution

DocuSign believed I mean, I'm really dating myself. DocuSign was basically a printer driver company when we started. We were the first web solution

02:56

I wrote it all myself in PowerPoint and crappy wireframes, and we built it.

I wrote it all myself in PowerPoint and crappy wireframes, and we built it.

03:02

And we got to

And we got to

03:03

a million dollars a month burning four million. So we got to twelve million ARR,

a million dollars a month burning four million. So we got to twelve million ARR,

03:08

growing a hundred percent with a hundred and ten percent revenue retention and cash flow positive.

growing a hundred percent with a hundred and ten percent revenue retention and cash flow positive.

03:14

So if we and we sold it in twenty eleven, and twenty eleven was a long time ago, in internet time and in real time, it was just before we understood the metrics

So if we and we sold it in twenty eleven, and twenty eleven was a long time ago, in internet time and in real time, it was just before we understood the metrics

03:24

around recurring revenue businesses. And so even my board, my investors

around recurring revenue businesses. And so even my board, my investors

03:28

didn't like, they weren't sure we had a good business. If I said to you today, Sam, I've got a business doing a million bucks a month, growing a hundred percent with a hundred and ten percent revenue retention and profitable.

didn't like, they weren't sure we had a good business. If I said to you today, Sam, I've got a business doing a million bucks a month, growing a hundred percent with a hundred and ten percent revenue retention and profitable.

03:37

You would say that's the that's the ticket.

You would say that's the that's the ticket.

03:40

That's the tick. Now DocuSign was bigger. We had about thirty six percent market share.

That's the tick. Now DocuSign was bigger. We had about thirty six percent market share.

03:47

But we were cash flow positive and growing a hundred percent.

But we were cash flow positive and growing a hundred percent.

03:51

So, you know, we only raised four million. So when you sell your company to make your second millions,

So, you know, we only raised four million. So when you sell your company to make your second millions,

03:56

Sometimes the second one is is, there's a certain logic in it, and the logic actually in its own way can be stressful. Right? It could it could be stressful. It's a cop that That was a very complicated decision because it made sense on paper

Sometimes the second one is is, there's a certain logic in it, and the logic actually in its own way can be stressful. Right? It could it could be stressful. It's a cop that That was a very complicated decision because it made sense on paper

04:07

given

given

04:08

the the team wanted to do it in part of the team wanted to do it and given how little we'd raised. Right?

the the team wanted to do it in part of the team wanted to do it and given how little we'd raised. Right?

04:14

But, in my gut, I knew it was, emotionally, I knew it was the wrong thing to do.

But, in my gut, I knew it was, emotionally, I knew it was the wrong thing to do.

04:19

Scott Galloway came out a while ago and and I didn't get to talk to him about this, but he had this awesome presentation. You and Scott are similar in that you're you're just you have beautiful language. That's what I that's what I describe these has to be only. They picked their words beautifully.

Scott Galloway came out a while ago and and I didn't get to talk to him about this, but he had this awesome presentation. You and Scott are similar in that you're you're just you have beautiful language. That's what I that's what I describe these has to be only. They picked their words beautifully.

04:31

Scott has this thing. So Scott sold l two. I don't know how much. I think one to two hundred million. I forget the exact amount, but nice nice And he was like, well, I wanted to have, nine figure exit. And I wanted to do it in this data business because that's what I knew. And so I worked backwards and I sort of reverse reverse engineer it And he said something like he was like, I knew I was like, I knew I needed to have an international presence. I needed to I I knew I needed to charge at least

Scott has this thing. So Scott sold l two. I don't know how much. I think one to two hundred million. I forget the exact amount, but nice nice And he was like, well, I wanted to have, nine figure exit. And I wanted to do it in this data business because that's what I knew. And so I worked backwards and I sort of reverse reverse engineer it And he said something like he was like, I knew I was like, I knew I needed to have an international presence. I needed to I I knew I needed to charge at least

04:54

fifty thousand a year for a service. And then when he lists all these things, and then he spent eight years however long building it. And I love that because I love reverse engineering. And what I tell a lot of people, I'm like, they wanna create this amazing stuff.

fifty thousand a year for a service. And then when he lists all these things, and then he spent eight years however long building it. And I love that because I love reverse engineering. And what I tell a lot of people, I'm like, they wanna create this amazing stuff.

05:06

And I'm like, yeah, that's cool. And sometimes that works. But you can actually kind of reverse engineer a bunch of stuff to figure out what's the rules of the game that I need to play, and then you optimize for the rules. And I wanted to have you on to basically, like, reverse engineer what it takes to get, like, either a hundred million in revenue or or even a hundred million in outcome because I actually those rules are actually the same. I was like, Jason, I wanna talk about this, like, reverse engineering thing and you, like, banged out this, like, five or eight point thing. You said that a lot of startups right now because they raise money in a zero interest environment. They're it's like a hundred grand in revenue per employee. And you said, no. The min new minimum needs to be three to four hundred thousand. Is that right?

And I'm like, yeah, that's cool. And sometimes that works. But you can actually kind of reverse engineer a bunch of stuff to figure out what's the rules of the game that I need to play, and then you optimize for the rules. And I wanted to have you on to basically, like, reverse engineer what it takes to get, like, either a hundred million in revenue or or even a hundred million in outcome because I actually those rules are actually the same. I was like, Jason, I wanna talk about this, like, reverse engineering thing and you, like, banged out this, like, five or eight point thing. You said that a lot of startups right now because they raise money in a zero interest environment. They're it's like a hundred grand in revenue per employee. And you said, no. The min new minimum needs to be three to four hundred thousand. Is that right?

05:44

It is. If you if you're trying to reverse engineer whether your business model makes sense, like, this is one thing that reverse engineer certain business models have economies of scale and some don't. And if you wanna go really big, you wanna have business with economies of scale. And if you step back in the old days of software,

It is. If you if you're trying to reverse engineer whether your business model makes sense, like, this is one thing that reverse engineer certain business models have economies of scale and some don't. And if you wanna go really big, you wanna have business with economies of scale. And if you step back in the old days of software,

06:00

The old Adobe's Microsoft Intuits made a million dollars in revenue per employee, a million dollars. Okay? You'd have a bunch of engineers They'd go they'd go off in their offices. Everyone used to have a private office to code. You'd spent two years building a piece of software.

The old Adobe's Microsoft Intuits made a million dollars in revenue per employee, a million dollars. Okay? You'd have a bunch of engineers They'd go they'd go off in their offices. Everyone used to have a private office to code. You'd spent two years building a piece of software.

06:15

Small team, you'd put it on a DVD rom that are you're on that cost fifty cents, and then you'd package it up. That cost fifty cents for a dollar. And then someone would sell it for you between fifty dollars and four hundred dollars. This was a really good business.

Small team, you'd put it on a DVD rom that are you're on that cost fifty cents, and then you'd package it up. That cost fifty cents for a dollar. And then someone would sell it for you between fifty dollars and four hundred dollars. This was a really good business.

06:28

There were ninety percent margins, and the classic Adobe Microsoft Intuit fifty cents of every dollar went straight to cash flow. Fifty cents. We don't see this anymore in in companies to go public. It was so profitable. So that was a million. And then things just deserve or whatever you wanna call it. It got crazy, and we reached a low in twenty twenty one of a hundred thousand in revenue per employee. For all these unicorns, a hundred thousand. So we got we only were ten percent as efficient as we used to be. Now the pendulum swung back. So we were historically word a million per employee. The low point was a hundred thousand per employee.

There were ninety percent margins, and the classic Adobe Microsoft Intuit fifty cents of every dollar went straight to cash flow. Fifty cents. We don't see this anymore in in companies to go public. It was so profitable. So that was a million. And then things just deserve or whatever you wanna call it. It got crazy, and we reached a low in twenty twenty one of a hundred thousand in revenue per employee. For all these unicorns, a hundred thousand. So we got we only were ten percent as efficient as we used to be. Now the pendulum swung back. So we were historically word a million per employee. The low point was a hundred thousand per employee.

07:02

When employees in the Bay Area, it probably cost you two hundred and fifty thousand dollars fully burdened with insurance benefits, this and that. So you're losing a hundred and fifty thousand per employee. Now every public company, at least, public SaaS software company, is at three hundred to four hundred HubSpot's at three ten, which we talked about. Cloudflare's at four hundred.

When employees in the Bay Area, it probably cost you two hundred and fifty thousand dollars fully burdened with insurance benefits, this and that. So you're losing a hundred and fifty thousand per employee. Now every public company, at least, public SaaS software company, is at three hundred to four hundred HubSpot's at three ten, which we talked about. Cloudflare's at four hundred.

07:21

That's where you have to be. And so But when? When do you have to be there?

That's where you have to be. And so But when? When do you have to be there?

07:25

So one way to think of if you're lucky enough or unlucky enough to spend in how you look at it to raise capital, angel money, venture capital, whatever, it it bridges the gap. It bridges the gap. To get you to three to four hundred thousand dollars per employee, but you're gonna have to get there. And if your product isn't profitable enough, if your gross margins are too low,

So one way to think of if you're lucky enough or unlucky enough to spend in how you look at it to raise capital, angel money, venture capital, whatever, it it bridges the gap. It bridges the gap. To get you to three to four hundred thousand dollars per employee, but you're gonna have to get there. And if your product isn't profitable enough, if your gross margins are too low,

07:44

If it doesn't make sense, make some changes. Right? You have to have a a model. If you wanna reverse engineer things, you have to have a model with economies of scale that gets you to three to four hundred thousand dollars per employee, or your model is not real. It is not scalable.

If it doesn't make sense, make some changes. Right? You have to have a a model. If you wanna reverse engineer things, you have to have a model with economies of scale that gets you to three to four hundred thousand dollars per employee, or your model is not real. It is not scalable.

07:58

And then you have another point here. You say, going multi product and you say, it's a huge issue of how when and where to figure out when to go to multi product did you say at, like, ten million or in revenue you wanna go what what did you say for going multi product? By the time you get to ten thousand customers, you better have second product

And then you have another point here. You say, going multi product and you say, it's a huge issue of how when and where to figure out when to go to multi product did you say at, like, ten million or in revenue you wanna go what what did you say for going multi product? By the time you get to ten thousand customers, you better have second product

08:19

that and this isn't this is the non obvious thing that can be bigger than the first. This one took me a while to figure out to be bigger than the first. For HubSpot, CRM in two years will be bigger than marketing automation at HubSpot for years was a marketing company. In two year CRM, its sales product will be bigger than its marketing product. It has to be. And you you wanna be there by ten thousand customers.

that and this isn't this is the non obvious thing that can be bigger than the first. This one took me a while to figure out to be bigger than the first. For HubSpot, CRM in two years will be bigger than marketing automation at HubSpot for years was a marketing company. In two year CRM, its sales product will be bigger than its marketing product. It has to be. And you you wanna be there by ten thousand customers.

08:40

This is the same for ecomm businesses too. Like they sell, a handful of skews, and then they reach, like, some type of critical mass and then, like, alright. We need to create more stuff. So, like, we made deodorant. Now we need to make toothpaste or shampoo or something like that.

This is the same for ecomm businesses too. Like they sell, a handful of skews, and then they reach, like, some type of critical mass and then, like, alright. We need to create more stuff. So, like, we made deodorant. Now we need to make toothpaste or shampoo or something like that.

08:54

But the second one has to be bigger. This is the one to think. This is the mistake founders make.

But the second one has to be bigger. This is the one to think. This is the mistake founders make.

08:59

If the second what's easiest

If the second what's easiest

09:01

Sam is to add a product extension. Okay. We sell shampoo in e commerce. Okay? Let's sell shampoo and conditioner.

Sam is to add a product extension. Okay. We sell shampoo in e commerce. Okay? Let's sell shampoo and conditioner.

09:07

That's the easiest thing because our customers already know us, If they buy shampoo, they'll buy shampoo and conditioner. But the problem is if you if you if if the second product

That's the easiest thing because our customers already know us, If they buy shampoo, they'll buy shampoo and conditioner. But the problem is if you if you if if the second product

09:16

isn't bigger than the first, and the first one's still growing. You never catch up. It's never enough. Right? If you're selling a hundred fifty million of shampoo and you're growing twenty percent a year, you're adding million a year. Right? And you launch shampoo and conditioner, and it does a million in its first year. It's great, but it'll never get there. The second one has to be bigger than the first. And this is it's too all default to the easy second product, and you actually have to do the harder one. That's, interesting. So at the hustle,

isn't bigger than the first, and the first one's still growing. You never catch up. It's never enough. Right? If you're selling a hundred fifty million of shampoo and you're growing twenty percent a year, you're adding million a year. Right? And you launch shampoo and conditioner, and it does a million in its first year. It's great, but it'll never get there. The second one has to be bigger than the first. And this is it's too all default to the easy second product, and you actually have to do the harder one. That's, interesting. So at the hustle,

09:42

so we had I don't remember. A million and a half subscribers.

so we had I don't remember. A million and a half subscribers.

09:46

I think we were doing a million a month in revenue. And, like, a media company

I think we were doing a million a month in revenue. And, like, a media company

09:51

is basically

is basically

09:52

you build an audience and then you launch multiple businesses

you build an audience and then you launch multiple businesses

09:56

to that audience. So whether it's advertising,

to that audience. So whether it's advertising,

09:58

conferences,

conferences,

09:59

software, whatever. That's kinda typically how media companies are weird. It's usually a collection of small businesses

software, whatever. That's kinda typically how media companies are weird. It's usually a collection of small businesses

10:05

and or or different businesses. And,

and or or different businesses. And,

10:08

I think we were at a million a month. I forget I think about that. And I wanted to create us,

I think we were at a million a month. I forget I think about that. And I wanted to create us,

10:13

a subscription service called trends. And it was like, we, like, And,

a subscription service called trends. And it was like, we, like, And,

10:17

dude, I fucked it up so bad because I charged three hundred dollars,

dude, I fucked it up so bad because I charged three hundred dollars,

10:21

a year, which is so stupid. It should have been thirty thousand dollars a year. It should have been way more expensive. I think in the first month, we did I don't remember exactly, but in the first month, we did

a year, which is so stupid. It should have been thirty thousand dollars a year. It should have been way more expensive. I think in the first month, we did I don't remember exactly, but in the first month, we did

10:31

almost a million in sales. And then it was a pain in the ass. It could but by the end, I think when we sold, I think we were at five, like, maybe ten months later, we were at five million a year in sales with it, but it only had, like, four or five people running it, which so is profitable.

almost a million in sales. And then it was a pain in the ass. It could but by the end, I think when we sold, I think we were at five, like, maybe ten months later, we were at five million a year in sales with it, but it only had, like, four or five people running it, which so is profitable.

10:45

But the mistake I've made was the thing of not making it bigger than the first thing. And I so, like, intimately know that mistake. And it's really hard because I'm like, well, this is, like, a clear extension. Just do this, then this. But it it just because it it's also like a a psychological thing of, like, why pay attention to this thing, just put money back into the main thing. This is an advantage to hiring

But the mistake I've made was the thing of not making it bigger than the first thing. And I so, like, intimately know that mistake. And it's really hard because I'm like, well, this is, like, a clear extension. Just do this, then this. But it it just because it it's also like a a psychological thing of, like, why pay attention to this thing, just put money back into the main thing. This is an advantage to hiring

11:08

a VP of sales, for example, founders underprice their products, usually.

a VP of sales, for example, founders underprice their products, usually.

11:12

They underprice them. We're so because we know what's more is it more important to get the product off the ground a hundred customers

They underprice them. We're so because we know what's more is it more important to get the product off the ground a hundred customers

11:19

than to optimize pricing. As founders, we're always going medium or long. Right? So we almost always leave money on the table

than to optimize pricing. As founders, we're always going medium or long. Right? So we almost always leave money on the table

11:26

so that we can make people happy and get them going. Dude, I've underpriced.

so that we can make people happy and get them going. Dude, I've underpriced.

11:30

Everything I've done, I've underpriced. Yeah. And and so have I in so have eighty percent of founders, not all, but it's it's a I hate this term, but it's a feature not a bug because as painful as it is, you can fix pricing later, at least for new customers. It's harder to fix it for grandfather customers. Right? But for new customers, then just double it to six hundred and twelve hundred and eighteen hundred. Like, it is it's hard.

Everything I've done, I've underpriced. Yeah. And and so have I in so have eighty percent of founders, not all, but it's it's a I hate this term, but it's a feature not a bug because as painful as it is, you can fix pricing later, at least for new customers. It's harder to fix it for grandfather customers. Right? But for new customers, then just double it to six hundred and twelve hundred and eighteen hundred. Like, it is it's hard.

11:53

I I think it's like rooted in like imposter syndrome. I'm like, I don't know if this is good enough. And but then you talk to if you talk to a good salesperson,

I I think it's like rooted in like imposter syndrome. I'm like, I don't know if this is good enough. And but then you talk to if you talk to a good salesperson,

11:59

You're like, dude. Like, I could, like, just put a zero behind that. I'll sell it. You know what I mean? Like, if you talk to a good salesperson, can can get it done. A good one will not rip people off. But a good one will will get the full value for your product. In a way as a founder, you almost never can. You you almost never can. Right? That's why a lot of the old classic disaster contents about hiring a VP of sales because that's why in a in the first quarter, the first nine days, you should see a lift from a good VP of sales at least because they can run this playbook. With the same leads, the same customers, the same dynamics for trends or something else, something with the confidence to ask thirty thousand for trends, knowing it's cheap compared to Gartner or Forest or whatever,

You're like, dude. Like, I could, like, just put a zero behind that. I'll sell it. You know what I mean? Like, if you talk to a good salesperson, can can get it done. A good one will not rip people off. But a good one will will get the full value for your product. In a way as a founder, you almost never can. You you almost never can. Right? That's why a lot of the old classic disaster contents about hiring a VP of sales because that's why in a in the first quarter, the first nine days, you should see a lift from a good VP of sales at least because they can run this playbook. With the same leads, the same customers, the same dynamics for trends or something else, something with the confidence to ask thirty thousand for trends, knowing it's cheap compared to Gartner or Forest or whatever,

12:38

they'll take that off your plate. If they're good and you'll see a thirty to a hundred percent revenue lift from someone that's great.

they'll take that off your plate. If they're good and you'll see a thirty to a hundred percent revenue lift from someone that's great.

12:44

Right? Yeah. Someone that's mediocre will rip your customers off and never understand your product and misspell trends and never read it and not know what it is. A mediocre one will actually see a revenue decline from founder led sales, but a good one will will solve will will solve that piece. Right? So,

Right? Yeah. Someone that's mediocre will rip your customers off and never understand your product and misspell trends and never read it and not know what it is. A mediocre one will actually see a revenue decline from founder led sales, but a good one will will solve will will solve that piece. Right? So,

12:59

I think the other thing, you know, you just didn't give it enough time either. I sold the company at four and a half years. Yeah.

I think the other thing, you know, you just didn't give it enough time either. I sold the company at four and a half years. Yeah.

13:06

But that was like

But that was like

13:07

I was okay. I don't regret that at all because I wanted to get some financial freedom,

I was okay. I don't regret that at all because I wanted to get some financial freedom,

13:13

and I was broke. I I think I paid myself the first two years, my salary was twenty grand. The third year maybe a hundred. And then the fourth year, I think I paid myself a few hundred thousand dollars, but I was like, I was fucking poor. And so I I was impatient in what you talk about all the time. The worst thing is a tired CEO, and I was a tired I was I was tired of being poor,

and I was broke. I I think I paid myself the first two years, my salary was twenty grand. The third year maybe a hundred. And then the fourth year, I think I paid myself a few hundred thousand dollars, but I was like, I was fucking poor. And so I I was impatient in what you talk about all the time. The worst thing is a tired CEO, and I was a tired I was I was tired of being poor,

13:35

basically. And that was a huge mistake, by the way. Pay yourself way more if you can. Is what I've learned. As soon as you can afford it, pay yourself market is the learning. Yes. Is the learning always as soon as you can afford you added this other thing on here. You talked about, you want thirty percent of your revenue to be outside of North America.

basically. And that was a huge mistake, by the way. Pay yourself way more if you can. Is what I've learned. As soon as you can afford it, pay yourself market is the learning. Yes. Is the learning always as soon as you can afford you added this other thing on here. You talked about, you want thirty percent of your revenue to be outside of North America.

13:54

That's very intimidating.

That's very intimidating.

13:55

That's probably the most intimidating thing here is going global.

That's probably the most intimidating thing here is going global.

13:59

In at least in my opinion, I think it's a very intimidating thing. Obviously, some businesses, this doesn't really work. Right? If you're highly regulated, it can take a long time, for example. Right? If you're very specific,

In at least in my opinion, I think it's a very intimidating thing. Obviously, some businesses, this doesn't really work. Right? If you're highly regulated, it can take a long time, for example. Right? If you're very specific,

14:11

But at scale, at scale, the average public

But at scale, at scale, the average public

14:16

software leader

software leader

14:17

gets about a third of their revenue outside of the US. HubSpot is now a

gets about a third of their revenue outside of the US. HubSpot is now a

14:21

majority. The majority of HubSpot's customers, small businesses are outside of North America, the majority.

majority. The majority of HubSpot's customers, small businesses are outside of North America, the majority.

14:27

And so if you so let's step back in terms of reverse engineering. Right? If you there's a couple things. If you don't lean into them, you're gonna have less revenue than you otherwise would. International and partners are two of them. If you try to only sell direct as an issue too.

And so if you so let's step back in terms of reverse engineering. Right? If you there's a couple things. If you don't lean into them, you're gonna have less revenue than you otherwise would. International and partners are two of them. If you try to only sell direct as an issue too.

14:41

And so how do you do this? How do you learn how to sell in France, right, in Germany and Milan and London?

And so how do you do this? How do you learn how to sell in France, right, in Germany and Milan and London?

14:48

It's not as complicated as it sounds.

It's not as complicated as it sounds.

14:51

What you do is build your business, build your brand. Right?

What you do is build your business, build your brand. Right?

14:55

Be find a niche where you're one of the top, two or three folks. You don't have to be you don't have to beat HubSpot everywhere, but find a little segment where you're better or a little area, and watch who wants to buy you.

Be find a niche where you're one of the top, two or three folks. You don't have to be you don't have to beat HubSpot everywhere, but find a little segment where you're better or a little area, and watch who wants to buy you.

15:05

And if you're in software, what will happen is

And if you're in software, what will happen is

15:09

Australia, New Zealand, UK,

Australia, New Zealand, UK,

15:12

some parts of France, and others are very used to buying from US companies. They will find you if you are the best vendor. They will find you. You don't actually have to find them. Now traditional industries won't find you. Right? It's gonna be tech focused folks. It's gonna be early adopters. It's gonna be cool kids, but they will find you

some parts of France, and others are very used to buying from US companies. They will find you if you are the best vendor. They will find you. You don't actually have to find them. Now traditional industries won't find you. Right? It's gonna be tech focused folks. It's gonna be early adopters. It's gonna be cool kids, but they will find you

15:29

And as soon as you cross five percent of your revenue in in an area, then invest in it. Just invest in it. Soon as you see a cluster in England or New Zealand or somewhere you didn't expect Chile or Brazil,

And as soon as you cross five percent of your revenue in in an area, then invest in it. Just invest in it. Soon as you see a cluster in England or New Zealand or somewhere you didn't expect Chile or Brazil,

15:41

like, support it. And then the cheat code that this sounds obvious. Okay. The one one is just support it. Like, make your product open. Right? This the the the the one that takes work is also,

like, support it. And then the cheat code that this sounds obvious. Okay. The one one is just support it. Like, make your product open. Right? This the the the the one that takes work is also,

15:54

localize your product earlier.

localize your product earlier.

15:56

And most of your engineers don't wanna do this. They don't wanna localize the product into Spanish and Portuguese. Turn turn into thirty languages. Not super complicated engineering task, but ninety five percent of engineers just don't wanna do it for a variety of reasons. So, you know, you can you can get going in the English ish countries and even in Europe. Right? But you're not gonna penetrate

And most of your engineers don't wanna do this. They don't wanna localize the product into Spanish and Portuguese. Turn turn into thirty languages. Not super complicated engineering task, but ninety five percent of engineers just don't wanna do it for a variety of reasons. So, you know, you can you can get going in the English ish countries and even in Europe. Right? But you're not gonna penetrate

16:16

certain areas if you don't actually localize your product. But that that's the second cheat code. The first one is just be be welcome to it. You don't have to go hunt customers in Japan if you have zero. Like, you don't have time as founders.

certain areas if you don't actually localize your product. But that that's the second cheat code. The first one is just be be welcome to it. You don't have to go hunt customers in Japan if you have zero. Like, you don't have time as founders.

16:26

Going to Japan is like the worst place ever to go because the culture is so different and there's been so many failures

Going to Japan is like the worst place ever to go because the culture is so different and there's been so many failures

16:34

of Japanese companies wanting to come to America and America to

of Japanese companies wanting to come to America and America to

16:36

Japanese because the culture is, like, wildly different, because I actually looked at, but one of the ways that I researched cool company ideas is I like to look at Japanese publicly traded companies. There's this one called

Japanese because the culture is, like, wildly different, because I actually looked at, but one of the ways that I researched cool company ideas is I like to look at Japanese publicly traded companies. There's this one called

16:47

usabase. Have you heard of usabase?

usabase. Have you heard of usabase?

16:49

So usabase is,

So usabase is,

16:51

it's a media company in Japan. They own three products. One of them was sort of like CB insights, and it was doing thirty or fifty million in revenue. The second one was a news app called newspicks,

it's a media company in Japan. They own three products. One of them was sort of like CB insights, and it was doing thirty or fifty million in revenue. The second one was a news app called newspicks,

17:02

that was doing another thirty million. And then I think they had one more thing. And I remember going and trying to download their app, and it was all in Japanese that I couldn't really figure it out. But I eventually, like, translated it. And I was like, I'm gonna make this app in America, and I'm gonna do it at the hustle. And so I built out this, like, whole thing, and I was gonna launch it and everything.

that was doing another thirty million. And then I think they had one more thing. And I remember going and trying to download their app, and it was all in Japanese that I couldn't really figure it out. But I eventually, like, translated it. And I was like, I'm gonna make this app in America, and I'm gonna do it at the hustle. And so I built out this, like, whole thing, and I was gonna launch it and everything.

17:21

And

And

17:22

the culture of what they what they were trying to do, it required users to leave feedback and opinions on news, which is, like, not so common here. And I remember, like, fuck, why is this Japanese idea not working? And then I realized I was just, like, reading Wikipedia or whatever, and there's this whole term to describe the failure of American companies trying to break into Japan because the culture is so different. And it scared me like hell to, like, do anything involving

the culture of what they what they were trying to do, it required users to leave feedback and opinions on news, which is, like, not so common here. And I remember, like, fuck, why is this Japanese idea not working? And then I realized I was just, like, reading Wikipedia or whatever, and there's this whole term to describe the failure of American companies trying to break into Japan because the culture is so different. And it scared me like hell to, like, do anything involving

17:50

Asian cultures because our cultures are so different. I'm like, I can never crack that. Whereas,

Asian cultures because our cultures are so different. I'm like, I can never crack that. Whereas,

17:54

Germany, France, it's like mostly similar But, yeah, the whole Japanese thing freaks me out. I'll give you two examples, but, like, Salesforce

Germany, France, it's like mostly similar But, yeah, the whole Japanese thing freaks me out. I'll give you two examples, but, like, Salesforce

18:03

got got had ten percent of their revenue in Japan in the early days.

got got had ten percent of their revenue in Japan in the early days.

18:07

Ten percent. Now they didn't if you you can you can Google it, you can see what Mark Banningoff said. They didn't plan it. They got dragged into Japan. Some of it was through partnerships. And others. But my point is that wasn't on their day zero plan. Okay? But it took off there. I was just talking with Howard Lerman who,

Ten percent. Now they didn't if you you can you can Google it, you can see what Mark Banningoff said. They didn't plan it. They got dragged into Japan. Some of it was through partnerships. And others. But my point is that wasn't on their day zero plan. Okay? But it took off there. I was just talking with Howard Lerman who,

18:23

He's got a new company called Rome, but he founded Yext and took it up to a billion.

He's got a new company called Rome, but he founded Yext and took it up to a billion.

18:27

And they were huge in Japan. And we were talking about

And they were huge in Japan. And we were talking about

18:30

how he was gonna do Japan. The next they got dragged into Japan for small businesses. They got dragged in. So my point is don't don't show up to Japan with no traction.

how he was gonna do Japan. The next they got dragged into Japan for small businesses. They got dragged in. So my point is don't don't show up to Japan with no traction.

18:39

Asking asking for a tour in the city, but if you if somehow in your first hundred customers, first five hundred, you've got five in Japan,

Asking asking for a tour in the city, but if you if somehow in your first hundred customers, first five hundred, you've got five in Japan,

18:48

Don't don't don't dismiss them. Don't be snarky like some folks are. Don't say it doesn't matter. In fact, say, oh my god. We've got five customers for Japan and our products not even in Japanese. We've got something good here. Like, let's take a pause and let's figure out what the heck is going on like Salesforce did. And get ten percent of our revenue from Japan. That's how you do it. Is there a sweet spot for how much you charge? I think with a lot of people starting out, like, what I did,

Don't don't don't dismiss them. Don't be snarky like some folks are. Don't say it doesn't matter. In fact, say, oh my god. We've got five customers for Japan and our products not even in Japanese. We've got something good here. Like, let's take a pause and let's figure out what the heck is going on like Salesforce did. And get ten percent of our revenue from Japan. That's how you do it. Is there a sweet spot for how much you charge? I think with a lot of people starting out, like, what I did,

19:12

like, well, my business was, too pronged in that we had users and then we had advertisers or advertisers for spending six figures a year, but I had to acquire

like, well, my business was, too pronged in that we had users and then we had advertisers or advertisers for spending six figures a year, but I had to acquire

19:20

fucking

fucking

19:21

four million

four million

19:22

subscribers in order to, like, make it work, and it was really hard. Acquisition.

subscribers in order to, like, make it work, and it was really hard. Acquisition.

19:26

Yeah. And and so is there, like, a price point where you're, like, you want your average customer to be paying fifty thousand a year?

Yeah. And and so is there, like, a price point where you're, like, you want your average customer to be paying fifty thousand a year?

19:33

I think that pricing is over discussed.

I think that pricing is over discussed.

19:37

And I'll tell you why. There are we have all now bought two hundred

And I'll tell you why. There are we have all now bought two hundred

19:41

at least most businesses have bought over two hundred SAS apps. Okay? It's two many two hundred pieces of business. Software. And we all kinda know what stuff should cost. Like, we know what notions should cost. We know what HubSpot should cost. We're on Riverside. I know what Riverside is. What do you guys pay? Three hundred bucks a month. Okay?

at least most businesses have bought over two hundred SAS apps. Okay? It's two many two hundred pieces of business. Software. And we all kinda know what stuff should cost. Like, we know what notions should cost. We know what HubSpot should cost. We're on Riverside. I know what Riverside is. What do you guys pay? Three hundred bucks a month. Okay?

19:56

Like

Like

19:57

okay. Let's say you pay three hundred bucks, four hundred bucks a month. Now if someone else has a better version of Riverside and they want fifty thousand, you're gonna, like, a month. You're gonna kinda balk. Right? But what if someone had something that was better than Riverside. It was thirty dollars a month. It would seem too cheap.

okay. Let's say you pay three hundred bucks, four hundred bucks a month. Now if someone else has a better version of Riverside and they want fifty thousand, you're gonna, like, a month. You're gonna kinda balk. Right? But what if someone had something that was better than Riverside. It was thirty dollars a month. It would seem too cheap.

20:10

Right? It would seem too cheap. So my point is there are organic price points

Right? It would seem too cheap. So my point is there are organic price points

20:15

And what you wanna do is anchor around them. Go figure out the couple of products out there that are most similar to yours and charge the exact same way

And what you wanna do is anchor around them. Go figure out the couple of products out there that are most similar to yours and charge the exact same way

20:24

and either charge the same pricing

and either charge the same pricing

20:27

or if you're nervous,

or if you're nervous,

20:28

charge a smidge lower, ten percent lower, twenty percent lower,

charge a smidge lower, ten percent lower, twenty percent lower,

20:32

If you charge too much lower, you're telling the market you're not as valuable as Riverside. Right? Or you're not as valuable as HubSpot, and you can actually customers will bounce off you if you're too cheap.

If you charge too much lower, you're telling the market you're not as valuable as Riverside. Right? Or you're not as valuable as HubSpot, and you can actually customers will bounce off you if you're too cheap.

20:43

If you're too cheap, they will get confused.

If you're too cheap, they will get confused.

20:46

So anchor around the comps. If truly

So anchor around the comps. If truly

20:49

ten times more valuable than Riverside. Okay? Riverside's very good. We're using it to record the session. If you're ten times more valuable, maybe charge twice as much, because you're telling the market we're ten times more valuable than the leader. Right? We're ten times more valuable. But whatever you do, founders that say there's no one like us. There's no comp. Try harder.

ten times more valuable than Riverside. Okay? Riverside's very good. We're using it to record the session. If you're ten times more valuable, maybe charge twice as much, because you're telling the market we're ten times more valuable than the leader. Right? We're ten times more valuable. But whatever you do, founders that say there's no one like us. There's no comp. Try harder.

21:07

Try harder. It doesn't have to be the same as you. Just it feels the same. It feels a similar amount of value, a similar type of utilization? Do I use it eight hours a day? Do I use it once a month?

Try harder. It doesn't have to be the same as you. Just it feels the same. It feels a similar amount of value, a similar type of utilization? Do I use it eight hours a day? Do I use it once a month?

21:18

Do I use it as an API? Is it metered? Is it per seat? Just there's hundreds of apps like you. And if you price similar to similar value apps, you remove friction. You remove friction from the sales process. And that's what you wanna do.

Do I use it as an API? Is it metered? Is it per seat? Just there's hundreds of apps like you. And if you price similar to similar value apps, you remove friction. You remove friction from the sales process. And that's what you wanna do.

21:34

Until you're really big,

Until you're really big,

21:36

you and this is why we also under prices found because you wanna remove friction.

you and this is why we also under prices found because you wanna remove friction.

21:40

We want every deal to close in the early days, don't we? We want every deal to close. And so your job as a founder, if you wanna scale, if you wanna reverse engineer things, your job because no one else in your company will do this. Your job is every day to relentlessly

We want every deal to close in the early days, don't we? We want every deal to close. And so your job as a founder, if you wanna scale, if you wanna reverse engineer things, your job because no one else in your company will do this. Your job is every day to relentlessly

21:55

remove friction

remove friction

21:57

from your customer acquisition process, remove friction. And people added at scale. The classic one is contact me. You know, you go to website. You're all excited to on your own, but I gotta talk to a rep.

from your customer acquisition process, remove friction. And people added at scale. The classic one is contact me. You know, you go to website. You're all excited to on your own, but I gotta talk to a rep.

22:07

Yeah. Well, they've yeah. There's a couple reasons. One reason is they've gotten to hundreds of millions in revenue, and they actually wanna add for to the sales process. Right? But you don't wanna do that until you're at tens of millions of revenue. You want it every day come into work. And if you can't do anything else, on your company, remove friction. How can I make sign up easier? How can I add single sign on? How can I make it easier to check out from my e commerce thing? How I make the bundle easier? How can I make support better? Remove friction. Having support that happens automatically in seconds rather than waiting five minutes on the dumb bubble? That removes friction, doesn't it? Whatever it takes to remove friction?

Yeah. Well, they've yeah. There's a couple reasons. One reason is they've gotten to hundreds of millions in revenue, and they actually wanna add for to the sales process. Right? But you don't wanna do that until you're at tens of millions of revenue. You want it every day come into work. And if you can't do anything else, on your company, remove friction. How can I make sign up easier? How can I add single sign on? How can I make it easier to check out from my e commerce thing? How I make the bundle easier? How can I make support better? Remove friction. Having support that happens automatically in seconds rather than waiting five minutes on the dumb bubble? That removes friction, doesn't it? Whatever it takes to remove friction?

22:42

The last point you have is, the the most challenging

The last point you have is, the the most challenging

22:46

it's, getting to net net revenue retention of a hundred percent. Yes. And

it's, getting to net net revenue retention of a hundred percent. Yes. And

22:52

we've you you're I don't know how you would subscribe yourself. I think of you as

we've you you're I don't know how you would subscribe yourself. I think of you as

22:57

you're a you're a CEO founder type, but I think that you have an edge on sales.

you're a you're a CEO founder type, but I think that you have an edge on sales.

23:02

And operations. The churn part, I think

And operations. The churn part, I think

23:06

and this is maybe maybe naive. I think that's mostly product. Maybe it's it relates to who you sell to and how you position it, but it's like product. And it's the hardest part. It's like figuring out how do I make something that integrates in someone's workflow or how do I make something that's so essential to someone's life that they not only do they not wanna get rid of it. They're gonna tell their coworkers and their coworkers are also gonna have to start using it. It's so freaking hard. And I think it's part art, part science, but you said that you have to have a hundred percent net revenue retention. The good news is is that a lot of the big boys sucked at first. I think Brian Halligan,

and this is maybe maybe naive. I think that's mostly product. Maybe it's it relates to who you sell to and how you position it, but it's like product. And it's the hardest part. It's like figuring out how do I make something that integrates in someone's workflow or how do I make something that's so essential to someone's life that they not only do they not wanna get rid of it. They're gonna tell their coworkers and their coworkers are also gonna have to start using it. It's so freaking hard. And I think it's part art, part science, but you said that you have to have a hundred percent net revenue retention. The good news is is that a lot of the big boys sucked at first. I think Brian Halligan,

23:38

I think he told me that they were churning out something like

I think he told me that they were churning out something like

23:42

at one point, like, five to ten percent or maybe even more per month. And he was like it was horrible. And it took us four or five years to figure it out. But what do you have to say about churn and retention? How do you how do you make it good? If you wanna reverse engineer things to your point, you need to

at one point, like, five to ten percent or maybe even more per month. And he was like it was horrible. And it took us four or five years to figure it out. But what do you have to say about churn and retention? How do you how do you make it good? If you wanna reverse engineer things to your point, you need to

23:59

really honestly have a path

really honestly have a path

24:02

from at a product level so that you can eventually get to that hundred percent. Right? And you can stage it. So I don't know if HubSpot's if HubSpot really was turning five percent or more in the early days, let's say its revenue retention is more like fifty percent in the beginning. Okay? I think he told me there was like a quarter or two where it was like

from at a product level so that you can eventually get to that hundred percent. Right? And you can stage it. So I don't know if HubSpot's if HubSpot really was turning five percent or more in the early days, let's say its revenue retention is more like fifty percent in the beginning. Okay? I think he told me there was like a quarter or two where it was like

24:19

existential crisis bad where it was like, you know, it it was something like that. I think they're like year four where it was like, this is not gonna work if we don't figure this out. Yeah. Well, I know from when I talked to him, it was seventy five percent from him, Doresh, at like thirty million of revenue, which is kinda late. It's they still hadn't totally figured out until they went multi product and a bit into the midsize of of SMB. But the point is, like, on the one end, yeah, their VCs were critical blah blah blah, but they did have a plan to get there. Had a plan to get there. They were going a little bit up market, a little bit up market, not a lot, just a little bit into bigger small businesses,

existential crisis bad where it was like, you know, it it was something like that. I think they're like year four where it was like, this is not gonna work if we don't figure this out. Yeah. Well, I know from when I talked to him, it was seventy five percent from him, Doresh, at like thirty million of revenue, which is kinda late. It's they still hadn't totally figured out until they went multi product and a bit into the midsize of of SMB. But the point is, like, on the one end, yeah, their VCs were critical blah blah blah, but they did have a plan to get there. Had a plan to get there. They were going a little bit up market, a little bit up market, not a lot, just a little bit into bigger small businesses,

24:52

and to have more than one product add value. And in fact, it's interesting.

and to have more than one product add value. And in fact, it's interesting.

24:55

HubSpot nominally has raised prices,

HubSpot nominally has raised prices,

24:58

but the pro the average customer day pays eleven thousand The average customer are two years ago paid eleven thousand. The average customer four years ago paid ten thousand. Okay? So what HubSpot has done, which a lot of folks don't do. They get it wrong. And this is why HubSpot is one of the reasons it's so successful. Is there adding more value for the same dollar?

but the pro the average customer day pays eleven thousand The average customer are two years ago paid eleven thousand. The average customer four years ago paid ten thousand. Okay? So what HubSpot has done, which a lot of folks don't do. They get it wrong. And this is why HubSpot is one of the reasons it's so successful. Is there adding more value for the same dollar?

25:16

They're adding more value each year for the same dollar. That software is supposed to be a service. SaaS software as a service. We forgot about it. In twenty twenty three, late twenty twenty, it became soft SaaS became software as a rip off. Everyone got massive price increases for no benefit. Right? Some folks will grumble about HubSpot. It has rates prices. But overall, the prices haven't gone that much. And now they have five times the amount of software that's fifty times more powerful. Right? It's like two hundred and fifty times better. Than when Brian started. And that's what you've gotta aspire to as a founder. The flip side is,

They're adding more value each year for the same dollar. That software is supposed to be a service. SaaS software as a service. We forgot about it. In twenty twenty three, late twenty twenty, it became soft SaaS became software as a rip off. Everyone got massive price increases for no benefit. Right? Some folks will grumble about HubSpot. It has rates prices. But overall, the prices haven't gone that much. And now they have five times the amount of software that's fifty times more powerful. Right? It's like two hundred and fifty times better. Than when Brian started. And that's what you've gotta aspire to as a founder. The flip side is,

25:46

here's the like, if you have a high churn business and HubSpot started, there are a lot of folks start in hytron business. Be honest, build a spreadsheet. I know you and I talked a little bit about this in the hustle in the early days because you had high churn as a media business. It's inherent to a media You had high subscriber churn. Okay. You were stressed about this. I actually wrongly

here's the like, if you have a high churn business and HubSpot started, there are a lot of folks start in hytron business. Be honest, build a spreadsheet. I know you and I talked a little bit about this in the hustle in the early days because you had high churn as a media business. It's inherent to a media You had high subscriber churn. Okay. You were stressed about this. I actually wrongly

26:03

wrongly challenged you to be less stressed because I thought you were you were a great founder and would figure it out. But you gotta put it in a spreadsheet and say, look, if you have churn north of three percent a month, three, four, five, and that is endemic to certain models,

wrongly challenged you to be less stressed because I thought you were you were a great founder and would figure it out. But you gotta put it in a spreadsheet and say, look, if you have churn north of three percent a month, three, four, five, and that is endemic to certain models,

26:16

Look what gravity does to you around when you get to double digit millions. When you get to ten million, fifteen million, twenty million, usually gravity

Look what gravity does to you around when you get to double digit millions. When you get to ten million, fifteen million, twenty million, usually gravity

26:24

weighs you down because you're losing so many customers each month, it almost becomes impossible

weighs you down because you're losing so many customers each month, it almost becomes impossible

26:30

to replace that leaky bucket. So we we are the hustle was a daily newsletter. We sent an email six days week. We were at one point. I'm trying to remember, we are at one point seven million subscribers.

to replace that leaky bucket. So we we are the hustle was a daily newsletter. We sent an email six days week. We were at one point. I'm trying to remember, we are at one point seven million subscribers.

26:40

We lost,

We lost,

26:43

fifty

fifty

26:44

fifty thousand

fifty thousand

26:45

subscriber or no, maybe it's forty thousand subscribers per month. And we were adding

subscriber or no, maybe it's forty thousand subscribers per month. And we were adding

26:50

like, four thousand a day or something like that. It was insane. Can you imagine that losing

like, four thousand a day or something like that. It was insane. Can you imagine that losing

26:56

forty thousand people and we're like, How are we gonna fix this? And eventually, we did, but I know that, like, companies like, I don't know what the hustle's at now. I I assume I think they're close to three million subscribers and the churn is really low.

forty thousand people and we're like, How are we gonna fix this? And eventually, we did, but I know that, like, companies like, I don't know what the hustle's at now. I I assume I think they're close to three million subscribers and the churn is really low.

27:07

Morning brew is at like four and a half million subscribers, and you wanna know all the newsletters do that people have talked about. So we grew organically to a hundred thousand subscribers. I mentioned many due to And once you then you do paid marketing to get to many millions, and then you get a name after four or five years, and then you quit advertising, or you spend very little. And you're just like, just gonna stay at three point five million, three million subscribers, and we're gonna launch more newsletters. That's the name of the the newsletter. That's how you get to a hundred million in revenue for news It's the exact same thing as software, which is you go multi product. But except unlike,

Morning brew is at like four and a half million subscribers, and you wanna know all the newsletters do that people have talked about. So we grew organically to a hundred thousand subscribers. I mentioned many due to And once you then you do paid marketing to get to many millions, and then you get a name after four or five years, and then you quit advertising, or you spend very little. And you're just like, just gonna stay at three point five million, three million subscribers, and we're gonna launch more newsletters. That's the name of the the newsletter. That's how you get to a hundred million in revenue for news It's the exact same thing as software, which is you go multi product. But except unlike,

27:40

software,

software,

27:42

the churn is outrageous. And but, thankfully,

the churn is outrageous. And but, thankfully,

27:44

the market size is, like, thirty million people, but it's it's, like, crazy high. The But that that ties to the point of being very self aware about this. Right? And that churn so you you churned out you had, like, you're churning out. I I'm getting that math round. I think you're churning out about thirty percent of your growth each month, right, in that in that phase. Right?

the market size is, like, thirty million people, but it's it's, like, crazy high. The But that that ties to the point of being very self aware about this. Right? And that churn so you you churned out you had, like, you're churning out. I I'm getting that math round. I think you're churning out about thirty percent of your growth each month, right, in that in that phase. Right?

28:04

It was, for so if we sent an email to a million people and if we had a million subscribers in one month and we sent six times a week times four, that's twenty four times,

It was, for so if we sent an email to a million people and if we had a million subscribers in one month and we sent six times a week times four, that's twenty four times,

28:14

a month, we would lose roughly four and a half percent of the million. So Yeah. That's that three to five percent churn we talked about. Right? And on the way up, it's sort of okay because the hustle's exploding and there's viral elements and great. But eventually, gravity,

a month, we would lose roughly four and a half percent of the million. So Yeah. That's that three to five percent churn we talked about. Right? And on the way up, it's sort of okay because the hustle's exploding and there's viral elements and great. But eventually, gravity,

28:28

that's the you gotta be honest about gravity and come up with a strategy to address it, right, for small businesses. It's a at that that math just it it's, you know, and and you I think you would echo this. Around ten million of revenue, you need so much growth to overcome that churn.

that's the you gotta be honest about gravity and come up with a strategy to address it, right, for small businesses. It's a at that that math just it it's, you know, and and you I think you would echo this. Around ten million of revenue, you need so much growth to overcome that churn.

28:43

Right? You need, like, epic, epic, like, you can't even it's not even what your gut says as a founder. You need so you need

Right? You need, like, epic, epic, like, you can't even it's not even what your gut says as a founder. You need so you need

28:50

double digit growth per month. Here's the insight. You need double digit growth per month to overcome that churn

double digit growth per month. Here's the insight. You need double digit growth per month to overcome that churn

28:56

at scale. Right? You need double digit, and you and you you need to understand which business you're in. So you're in the conference business now. I was in the conference business sorta. I think my conference business was doing

at scale. Right? You need double digit, and you and you you need to understand which business you're in. So you're in the conference business now. I was in the conference business sorta. I think my conference business was doing

29:07

over the handful of years, I think we probably did three million in revenue. You're due thirty million in one year. So we're not the same ballpark, but what I learned with the conference business is It sucks. It sucks hard.

over the handful of years, I think we probably did three million in revenue. You're due thirty million in one year. So we're not the same ballpark, but what I learned with the conference business is It sucks. It sucks hard.

29:19

And for some reason,

And for some reason,

29:21

I still love it. And same with media, I freaking love it, but it's way harder, I think. And why are you in the conference business if you're supposed to know all of this great stuff about software because software seems like we only we all work the same amount of hours per per week. Like, it just seems like

I still love it. And same with media, I freaking love it, but it's way harder, I think. And why are you in the conference business if you're supposed to know all of this great stuff about software because software seems like we only we all work the same amount of hours per per week. Like, it just seems like

29:39

just start a software company. Why start a conference business where you're you're in kind of an uphill battle?

just start a software company. Why start a conference business where you're you're in kind of an uphill battle?

29:46

It's a good question. I mean, the,

It's a good question. I mean, the,

29:48

Do you guys do you guys make a profit on thirty million? Yeah. We do, but you have but we've got to

Do you guys do you guys make a profit on thirty million? Yeah. We do, but you have but we've got to

29:54

so Saster annual is our big flagship event, and so we get twelve thousand bull in the Bay Area. Now it's every September. It costs ten million dollars to turn the lights on. That's a stressor. It costs ten million dollars to turn the lights on.

so Saster annual is our big flagship event, and so we get twelve thousand bull in the Bay Area. Now it's every September. It costs ten million dollars to turn the lights on. That's a stressor. It costs ten million dollars to turn the lights on.

30:07

Okay? Before you make a dollar. Okay. So a thousand dollars, an attendee is your cost? Yeah. About a thousand dollars per attendee is the full the honest fully burdened cost about a thousand. We do do want in Europe and June for thirty five hundred. That's much cheaper.

Okay? Before you make a dollar. Okay. So a thousand dollars, an attendee is your cost? Yeah. About a thousand dollars per attendee is the full the honest fully burdened cost about a thousand. We do do want in Europe and June for thirty five hundred. That's much cheaper.

30:21

That'll be about three hundred dollars to turn the lights, well, three hundred dollars per attendee, but it's still, like, a million and a half to two million dollars to turn the lights on. Okay. Two mil one point five and ten million.

That'll be about three hundred dollars to turn the lights, well, three hundred dollars per attendee, but it's still, like, a million and a half to two million dollars to turn the lights on. Okay. Two mil one point five and ten million.

30:30

What's the other one? Get over that, and then you've gotta pay people. Right? And then you've got other expense is. So until you cross, if if it's funny I get it is a terrible business. So we talk about it. I literally had

What's the other one? Get over that, and then you've gotta pay people. Right? And then you've got other expense is. So until you cross, if if it's funny I get it is a terrible business. So we talk about it. I literally had

30:42

a VC

a VC

30:44

managing five hundred million in revenue, making millions and millions a year just in fees with a good track record, call me the other day saying they wanted to build a conference business because investing so hard. Nah. It's like, dear, do you still

managing five hundred million in revenue, making millions and millions a year just in fees with a good track record, call me the other day saying they wanted to build a conference business because investing so hard. Nah. It's like, dear, do you still

30:58

get you still get paid if there's a natural disaster or like a rainstorm. That was like my whole thing. I'm like, dude, I work it all. I work it so hard for this freaking conference. And if it rains, attendance is down. Like, it just sucks. Like, one or two one or two days of, like, some crazy weather or something can, like, change things. Terrible.

get you still get paid if there's a natural disaster or like a rainstorm. That was like my whole thing. I'm like, dude, I work it all. I work it so hard for this freaking conference. And if it rains, attendance is down. Like, it just sucks. Like, one or two one or two days of, like, some crazy weather or something can, like, change things. Terrible.

31:15

The reason we did it was on accident. We we built this community around content. Right? So we built content, and then it's a community. And, yeah, we got some newsletters and some podcasts. They're not quite at your scale, but they have some scale.

The reason we did it was on accident. We we built this community around content. Right? So we built content, and then it's a community. And, yeah, we got some newsletters and some podcasts. They're not quite at your scale, but they have some scale.

31:27

And then we just did meetups and just so many people came to the meetups in the beginning. You've done them. I mean, this was a long time ago. Like, this sounds small today, but our first meetup in twenty thirteen, we had eight hundred people come, and these were great CEOs. Great CEOs. Right? CEOs that now are are

And then we just did meetups and just so many people came to the meetups in the beginning. You've done them. I mean, this was a long time ago. Like, this sounds small today, but our first meetup in twenty thirteen, we had eight hundred people come, and these were great CEOs. Great CEOs. Right? CEOs that now are are

31:42

I've gone public or have nine figure businesses, and they all came. And that what I I didn't know it would be a business, but I knew we had product market fit. So I wanted to build then I did another meetup, and then other meetup had a thousand and we had to turn people away. And then then we did a one day event just to do it. I didn't it wasn't a business. I outsourced the first two years. I never even looked at a financial statement. Yeah. The first two years I had a partner. He kept all the profit or the revenue. I just drove the engagement, right, in the content.

I've gone public or have nine figure businesses, and they all came. And that what I I didn't know it would be a business, but I knew we had product market fit. So I wanted to build then I did another meetup, and then other meetup had a thousand and we had to turn people away. And then then we did a one day event just to do it. I didn't it wasn't a business. I outsourced the first two years. I never even looked at a financial statement. Yeah. The first two years I had a partner. He kept all the profit or the revenue. I just drove the engagement, right, in the content.

32:07

And so this by the second year, we had three thousand people.

And so this by the second year, we had three thousand people.

32:10

And there was demand. So the real reason I got into the business, Sam, wasn't because I want to because second year, he quit. My partner quit and didn't wanna do it anymore because it was too much work.

And there was demand. So the real reason I got into the business, Sam, wasn't because I want to because second year, he quit. My partner quit and didn't wanna do it anymore because it was too much work.

32:20

So I quit.

So I quit.

32:21

I had no ability to do this. I had no team. I had no blue I didn't know how the revenue or the finances worked. And I had to learn for the third year from scratch, and so it wasn't intentional.

I had no ability to do this. I had no team. I had no blue I didn't know how the revenue or the finances worked. And I had to learn for the third year from scratch, and so it wasn't intentional.

32:33

I felt like the a community wanted this that there was demand, organic demand. And,

I felt like the a community wanted this that there was demand, organic demand. And,

32:39

but, yeah, it is a terrible business. Once it got

but, yeah, it is a terrible business. Once it got

32:42

Once it got now you can do the math in your head. Right? Once it got over fifteen million in revenue, it finally generated actual profits.

Once it got now you can do the math in your head. Right? Once it got over fifteen million in revenue, it finally generated actual profits.

32:50

Right? But that's a lot of years.

Right? But that's a lot of years.

32:53

Not fake fifteen, not pretending you're at fifteen, not not claiming revenue that's not real, but you gotta really just get over fifteen to clear the nut.

Not fake fifteen, not pretending you're at fifteen, not not claiming revenue that's not real, but you gotta really just get over fifteen to clear the nut.

33:00

But they so a lot of trade show businesses,

But they so a lot of trade show businesses,

33:04

on the high end can sell for fifteen times earnings.

on the high end can sell for fifteen times earnings.

33:07

But a lot of them can go for eight or ten if it's like a b to b,

But a lot of them can go for eight or ten if it's like a b to b,

33:12

trade show. There's a bunch of companies. A handful. Yeah. Or more.

trade show. There's a bunch of companies. A handful. Yeah. Or more.

33:17

Yeah. It's the best ones can go for twenty times if it if it's been around for forty years and it's an annuity at that point. And, for some reason, it's always British company. A lot of British companies buy trade shows. So there's informa. There's Euro Money. There's a bunch of them. Would you ever sell?

Yeah. It's the best ones can go for twenty times if it if it's been around for forty years and it's an annuity at that point. And, for some reason, it's always British company. A lot of British companies buy trade shows. So there's informa. There's Euro Money. There's a bunch of them. Would you ever sell?

33:32

Yeah. Hive, they bought my friend. Rhinde dye company, I believe, the traffic summit.

Yeah. Hive, they bought my friend. Rhinde dye company, I believe, the traffic summit.

33:37

Would you, what could you sell SASer for and would you do it?

Would you, what could you sell SASer for and would you do it?

33:41

We've had two folks that have approached us to buy faster over the years. I wouldn't say we've ever had, like, a a term sheet to to

We've had two folks that have approached us to buy faster over the years. I wouldn't say we've ever had, like, a a term sheet to to

33:49

to be on the table.

to be on the table.

33:51

The learning from that is it's really been based on comps.

The learning from that is it's really been based on comps.

33:54

I know we talk about or or EBITDA and blah blah blah blah, but it's really been based on comps. Right? And Shop Talk was bought for a hundred and fifty million at a bad our size, probably under,

I know we talk about or or EBITDA and blah blah blah blah, but it's really been based on comps. Right? And Shop Talk was bought for a hundred and fifty million at a bad our size, probably under,

34:04

they got a good deal. And Monday twenty twenty, sold for a good deal. It's sold for a hundred million, what is only doing ten million revenue, but both were, like, iconic.

they got a good deal. And Monday twenty twenty, sold for a good deal. It's sold for a hundred million, what is only doing ten million revenue, but both were, like, iconic.

34:13

Dude, let's talk about that. Let's talk about that.

Dude, let's talk about that. Let's talk about that.

34:16

The guy who started those companies in ham is in Hampton. I've got to know him. That guy is amazing.

The guy who started those companies in ham is in Hampton. I've got to know him. That guy is amazing.

34:21

What, what, off the charts. And then he sold he sold another company for thirty million. But listen, these guys started a Google. These guys started a tech company, I believe, like a payment company. They sold it to Google for a hundred million dollars. They went and started a conference. It kicked ass. They sold it for something like fifty or a hundred. I It sold twenty twenty for a hundred million, and now it's doing a hundred million.

What, what, off the charts. And then he sold he sold another company for thirty million. But listen, these guys started a Google. These guys started a tech company, I believe, like a payment company. They sold it to Google for a hundred million dollars. They went and started a conference. It kicked ass. They sold it for something like fifty or a hundred. I It sold twenty twenty for a hundred million, and now it's doing a hundred million.

34:42

Then they did it again with Shop Talk, which is like a trade show for d d to c. Now I forgot what's the other founder's name? There's a it's a white guy and an Indian guy The white guy has a new one named,

Then they did it again with Shop Talk, which is like a trade show for d d to c. Now I forgot what's the other founder's name? There's a it's a white guy and an Indian guy The white guy has a new one named,

34:53

it's called Health.

it's called Health.

34:55

Because that I don't know. That I don't know. I I know a Neil. I know a Neil a little bit. I know a Neil a little bit. Yeah. H l t h. You gotta look at this because here's what these guys do. The it's the website is all the same.

Because that I don't know. That I don't know. I I know a Neil. I know a Neil a little bit. I know a Neil a little bit. Yeah. H l t h. You gotta look at this because here's what these guys do. The it's the website is all the same.

35:07

It's like the same avatars for it. It's like the same graphic design. Oh, and they just look just like ShopTalk or Monday twenty twenty. It's the same thing again and again. They do the same thing. And he's it it he's done this like four times. I I think this is their fourth time that they've created a new trade show. I should've known it. I see it now. Yeah. Have you So I think this is significantly

It's like the same avatars for it. It's like the same graphic design. Oh, and they just look just like ShopTalk or Monday twenty twenty. It's the same thing again and again. They do the same thing. And he's it it he's done this like four times. I I think this is their fourth time that they've created a new trade show. I should've known it. I see it now. Yeah. Have you So I think this is significantly

35:26

larger than Shop Talk and money twenty. And so health is like, it's they do these trade shows

larger than Shop Talk and money twenty. And so health is like, it's they do these trade shows

35:31

where they get all it's bay what a trade show basically is what a lot of people don't realize, it's basically a,

where they get all it's bay what a trade show basically is what a lot of people don't realize, it's basically a,

35:36

marketplace that lasts for three days. And so you get a combination of buyers and sellers and you hope that you create some type of transaction.

marketplace that lasts for three days. And so you get a combination of buyers and sellers and you hope that you create some type of transaction.

35:43

And what he does is he charges people. So you can go for free but you have to offer up a thirty minutes of your time to be pitched, I believe, to set up a meeting. Or you could pay money to set up a meeting

And what he does is he charges people. So you can go for free but you have to offer up a thirty minutes of your time to be pitched, I believe, to set up a meeting. Or you could pay money to set up a meeting

35:56

with Yeah. They're they're eight hundred bucks per per ten minute meeting now at ShopTalk. So I don't know what they are at health. They're eight hundred dollars for a quick meeting. And these guys pick a variety

with Yeah. They're they're eight hundred bucks per per ten minute meeting now at ShopTalk. So I don't know what they are at health. They're eight hundred dollars for a quick meeting. And these guys pick a variety

36:05

niches where they're like, alright. There's a bunch of buyers and sellers in this market, and they scale up these trade shows faster than anyone I've ever seen. I think Exactly. And a lot of people don't know this. They they run other companies. I the the guy I'm referring to, I'll find out his name. He is he's also on the board of a, of a large private equity firm. Like, These guys are killers. And for some reason, they pick trade shows as their main thing, which boggles it boggled everyone's mind. It was like, why would a bunch of tech guys who can, like, make their money in significantly easier ways. Start a freaking trade show. They've knocked it out the park. It's it's like a gem of a business to study.

niches where they're like, alright. There's a bunch of buyers and sellers in this market, and they scale up these trade shows faster than anyone I've ever seen. I think Exactly. And a lot of people don't know this. They they run other companies. I the the guy I'm referring to, I'll find out his name. He is he's also on the board of a, of a large private equity firm. Like, These guys are killers. And for some reason, they pick trade shows as their main thing, which boggles it boggled everyone's mind. It was like, why would a bunch of tech guys who can, like, make their money in significantly easier ways. Start a freaking trade show. They've knocked it out the park. It's it's like a gem of a business to study.

36:38

There are gems. I will say. I I only know a meal a little bit. The other cofounder of these multiple companies, money twenty twenty in ShopTalk, but it is interesting

There are gems. I will say. I I only know a meal a little bit. The other cofounder of these multiple companies, money twenty twenty in ShopTalk, but it is interesting

36:46

in terms of Convergent Evolution that he got into it by accident too.

in terms of Convergent Evolution that he got into it by accident too.

36:51

How so? They built money twenty twenty to support their fintech.

How so? They built money twenty twenty to support their fintech.

36:55

They didn't build money twenty twenty originally

They didn't build money twenty twenty originally

36:57

to be a standalone business. They built it to support their startup. Like, many of us do events to support our companies. Right? Jonathan Weiner. Yeah. Okay. I don't know. I might know the other. And it took off. It took it took off Monday twenty twenty took off, then ShopTalk was,

to be a standalone business. They built it to support their startup. Like, many of us do events to support our companies. Right? Jonathan Weiner. Yeah. Okay. I don't know. I might know the other. And it took off. It took it took off Monday twenty twenty took off, then ShopTalk was,

37:10

that they did was was a heat seeking missile. Right? They act it was this was totally tactical.

that they did was was a heat seeking missile. Right? They act it was this was totally tactical.

37:16

And they even gave up on a lot of things and just did the these paid meetings. Right? They just did it. And going back to the conversation, how do you get into something? Sometimes you you plan it out on a whiteboard. And sometimes they'll like these guys for these these event that it found them.

And they even gave up on a lot of things and just did the these paid meetings. Right? They just did it. And going back to the conversation, how do you get into something? Sometimes you you plan it out on a whiteboard. And sometimes they'll like these guys for these these event that it found them.

37:31

It found them. And then they then they leaned into it and it became expert. But I know I've don't know Jonathan, but I do know Anila, but I remember talking with him the last time I saw him in person, and he's like, man, this is a hard business.

It found them. And then they then they leaned into it and it became expert. But I know I've don't know Jonathan, but I do know Anila, but I remember talking with him the last time I saw him in person, and he's like, man, this is a hard business.

37:43

So you think and he built he like us, he or like me, he built a software business,

So you think and he built he like us, he or like me, he built a software business,

37:48

and, it is it is hard. I don't know. I would just caution folks

and, it is it is hard. I don't know. I would just caution folks

37:52

like, anything everything's harder than it looks to get into. I would just caution folks that there aren't there aren't a lot of shortcuts and you need I'm sure that the HLTH is wild. This successful, but you've gotta be it's like this is one of these businesses where if you're not in the top two, you're worthless.

like, anything everything's harder than it looks to get into. I would just caution folks that there aren't there aren't a lot of shortcuts and you need I'm sure that the HLTH is wild. This successful, but you've gotta be it's like this is one of these businesses where if you're not in the top two, you're worthless.

38:08

You're worthless. You have no value at all. Nothing.

You're worthless. You have no value at all. Nothing.

38:12

Because they are marketplaces. Why are you gonna go? Why are you gonna go to fourth tier event in an industry. And in fact, most of them died at in twenty twenty. Most of the fourth tier stuff died. It it sort of stumbled around.

Because they are marketplaces. Why are you gonna go? Why are you gonna go to fourth tier event in an industry. And in fact, most of them died at in twenty twenty. Most of the fourth tier stuff died. It it sort of stumbled around.

38:24

When we all work together in in the office and in the Bay Area, but most of them never came back. Only the best ones really came back after after lockdown.

When we all work together in in the office and in the Bay Area, but most of them never came back. Only the best ones really came back after after lockdown.

38:32

Let me ask you one last question.

Let me ask you one last question.

38:34

You are an investor.

You are an investor.

38:36

Yeah. So you've you've raised money for your own startups and now your latest one strapped and you're an investor. You've deployed tens or hundreds of millions of dollars into companies.

Yeah. So you've you've raised money for your own startups and now your latest one strapped and you're an investor. You've deployed tens or hundreds of millions of dollars into companies.

38:45

I have a theory.

I have a theory.

38:46

I think that if you are if you're if you're If building wealth in a five or ten period

I think that if you are if you're if you're If building wealth in a five or ten period

38:53

is your number one or number two priority for starting a company, Yes. You should basically raise no money or very little money, and you should not raise venture capital.

is your number one or number two priority for starting a company, Yes. You should basically raise no money or very little money, and you should not raise venture capital.

39:03

Do you agree or disagree with that? If your goal is to get the first points on the board to make your first millions?

Do you agree or disagree with that? If your goal is to get the first points on the board to make your first millions?

39:09

Yeah. I think what you call you use the word shekels a lot or nickels. If you wanna get a few nickels No. Your first it's a lot. If you wanna get the money to not work for the man where we started this conversation,

Yeah. I think what you call you use the word shekels a lot or nickels. If you wanna get a few nickels No. Your first it's a lot. If you wanna get the money to not work for the man where we started this conversation,

39:19

listen.

listen.

39:20

All the stuff's harder than it looks. It's all hard as we know. But If you want to have an exit for

All the stuff's harder than it looks. It's all hard as we know. But If you want to have an exit for

39:28

ten to thirty million dollars, ten to fifty million dollars, which is still harder than it looks Right? But north of ten, then, yeah, you wanna raise only a fraction of that. Don't raise that much. So if you raise here's a simple way to think about it. If you raise

ten to thirty million dollars, ten to fifty million dollars, which is still harder than it looks Right? But north of ten, then, yeah, you wanna raise only a fraction of that. Don't raise that much. So if you raise here's a simple way to think about it. If you raise

39:41

a couple million dollars, which is hard. Like, it's not it it looks easy on the internet. It's hard. But if you raise a couple million dollars,

a couple million dollars, which is hard. Like, it's not it it looks easy on the internet. It's hard. But if you raise a couple million dollars,

39:47

you've lost no optionality.

you've lost no optionality.

39:49

The only thing you've suffered is some dilution.

The only thing you've suffered is some dilution.

39:51

The only thing you've suffered is some dilution.

The only thing you've suffered is some dilution.

39:54

After a couple million, the game changes. After a couple of million the game changes. And so, yeah, I I I think there's something to be said for raising nothing, but most people raise nothing because they can't raise anything. I think there's even more to be said if you can of raise being one and done. Anywhere from half a million to two million, whatever you can clogge together,

After a couple million, the game changes. After a couple of million the game changes. And so, yeah, I I I think there's something to be said for raising nothing, but most people raise nothing because they can't raise anything. I think there's even more to be said if you can of raise being one and done. Anywhere from half a million to two million, whatever you can clogge together,

40:12

And you use it to not to pay yourself, that's that's what losers do. You use it to hire a few good people

And you use it to not to pay yourself, that's that's what losers do. You use it to hire a few good people

40:18

to derisk this investment, to accelerate this investment. You use it to hire a few good people, and get it off the ground. Most of us need a little help. Like, some folks just literally, they can do it on their own. They're two great engineers. They don't need any help. They can go do it on their own. Most of us are not those people, especially if you're a business person,

to derisk this investment, to accelerate this investment. You use it to hire a few good people, and get it off the ground. Most of us need a little help. Like, some folks just literally, they can do it on their own. They're two great engineers. They don't need any help. They can go do it on their own. Most of us are not those people, especially if you're a business person,

40:33

it's harder to do it on your own, right, unless you build something on WordPress or or tools, it's hard to do on your own. You need a little bit of money, but stop there.

it's harder to do it on your own, right, unless you build something on WordPress or or tools, it's hard to do on your own. You need a little bit of money, but stop there.

40:42

You you not only do you maintain control and have less dilution, but then any exit works, then any exit works. Once you raise more than ten million,

You you not only do you maintain control and have less dilution, but then any exit works, then any exit works. Once you raise more than ten million,

40:51

It can be worth it, but if you raise more than ten million, here's and this goes to your point. This people don't get this in to in today's world. If you raise more than ten million, you're signing up for a billion dollar exit. And anything less than that is a disappointment?

It can be worth it, but if you raise more than ten million, here's and this goes to your point. This people don't get this in to in today's world. If you raise more than ten million, you're signing up for a billion dollar exit. And anything less than that is a disappointment?

41:04

It just might not even work out. Like, there's so many variables you may run out of money you might not get. People, once you start raising ten million dollars, you get addicted to burning more money too. There's lots of issues that that creep out from that. But you gotta commit to a billion. If you don't see a billion dollar, if you don't feel it in your bones,

It just might not even work out. Like, there's so many variables you may run out of money you might not get. People, once you start raising ten million dollars, you get addicted to burning more money too. There's lots of issues that that creep out from that. But you gotta commit to a billion. If you don't see a billion dollar, if you don't feel it in your bones,

41:22

then don't raise double digit millions. Just don't do it. It's it's not generally not worth it. Find a way to do it with less. And,

then don't raise double digit millions. Just don't do it. It's it's not generally not worth it. Find a way to do it with less. And,

41:30

and everyone will be chill if you raise single digit millions less and self or whatever.

and everyone will be chill if you raise single digit millions less and self or whatever.

41:35

Everyone will be chill. Everyone will be chill. They're not chill once you get to the double digit millions.

Everyone will be chill. Everyone will be chill. They're not chill once you get to the double digit millions.

41:40

It it ain't it ain't chill. For a long list of reasons. People start expecting a lot.

It it ain't it ain't chill. For a long list of reasons. People start expecting a lot.

41:46

And too many folks these days think that

And too many folks these days think that

41:50

venture capital's free. It has no cost.

venture capital's free. It has no cost.

41:53

The the social contract between investors and founders has broken down the last three years. It has broken down.

The the social contract between investors and founders has broken down the last three years. It has broken down.

42:00

I I literally just suffered my worst investing loss ever. I'm ten x lifetime. I suffered my worst investing loss ever. How much is this? Ever. Five million of not all of my capital, some of it's mine, five million out of two hundred. Okay. So it's not gonna change the pace, but I've never lost this much money.

I I literally just suffered my worst investing loss ever. I'm ten x lifetime. I suffered my worst investing loss ever. How much is this? Ever. Five million of not all of my capital, some of it's mine, five million out of two hundred. Okay. So it's not gonna change the pace, but I've never lost this much money.

42:14

And you know what the founder said?

And you know what the founder said?

42:16

I tried What do you care? It's not really your money. What do you care? It's really your money.

I tried What do you care? It's not really your money. What do you care? It's really your money.

42:21

What do you say to that?

What do you say to that?

42:23

I could honestly, Sam, I could I had to bring in a friend to deal with him. I couldn't talk to him again. I spent years of my life helping him. I helped him raise all his money. I put him in all of our SASer events for free. I promoted him constantly for years. And then he says, what do you care?

I could honestly, Sam, I could I had to bring in a friend to deal with him. I couldn't talk to him again. I spent years of my life helping him. I helped him raise all his money. I put him in all of our SASer events for free. I promoted him constantly for years. And then he says, what do you care?

42:38

It's not your money.

It's not your money.

42:40

I remember when I I took a little bit of angel money, and I and I remember thinking, like, I am, like, a steward, a steward of his cat. I was, like, I have to die to get a return.

I remember when I I took a little bit of angel money, and I and I remember thinking, like, I am, like, a steward, a steward of his cat. I was, like, I have to die to get a return.

42:49

That's how I felt, though, but kids don't feel that way these days. I was like, it's my life's mission now. I have just, like, because to take someone's hard earned money, I felt so much stress. I felt stress. I remember when I hired someone who had a kid, I was like, oh, I have a kid now. And then I remember feeling the stress when I took someone's money. I'm like, this person just trusted me with twenty five thousand dollars.

That's how I felt, though, but kids don't feel that way these days. I was like, it's my life's mission now. I have just, like, because to take someone's hard earned money, I felt so much stress. I felt stress. I remember when I hired someone who had a kid, I was like, oh, I have a kid now. And then I remember feeling the stress when I took someone's money. I'm like, this person just trusted me with twenty five thousand dollars.

43:10

I better go hungry or die. Order to get a return from them because if they if someone loses my money, I'm gonna wanna beat them up.

I better go hungry or die. Order to get a return from them because if they if someone loses my money, I'm gonna wanna beat them up.

43:17

You you know what I mean? I was like, it's like a big deal. Like, this is someone's mortgage that I I just took for a minute. I better make this get a re good return. Jason, I appreciate you doing this, man.

You you know what I mean? I was like, it's like a big deal. Like, this is someone's mortgage that I I just took for a minute. I better make this get a re good return. Jason, I appreciate you doing this, man.

43:28

What do you where do people find you? On Twitter, your Twitter guy now instead of Quora, even though you got famous on Quora. So Quora was great for five years, and now it's non existent.

What do you where do people find you? On Twitter, your Twitter guy now instead of Quora, even though you got famous on Quora. So Quora was great for five years, and now it's non existent.

43:38

But, yeah, you can find me on Twitter at jason l k, or honestly, if you're a business y person,

But, yeah, you can find me on Twitter at jason l k, or honestly, if you're a business y person,

43:44

find me on LinkedIn. Dude, thanks for doing this. You're the man. I appreciate you. And that's the pod.

find me on LinkedIn. Dude, thanks for doing this. You're the man. I appreciate you. And that's the pod.

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