This Niche Market Is Raising a Ton of Money Right Now (w/ Anand Sanwal of CB Insights)

Key Takeaways

sorry no we're doing I'm I'm tired on Mondays and not because I hate my job I just maybe it is because I hate my job and I just wake up and I'm just drained every Monday so I'm trying to think about what are the solutions or things going on just crazy weekends no I'm not yeah I had to go to sleep at 11. all right guys you're gonna have a good story yeah I don't know yeah I think it's probably I'm biking pretty heavily so I'm wondering if my body's just like yo you need more rest yeah yeah we're balancing the I think it's just good to try to check in with ourselves to try to understand what's actually happening versus just like oh I'm tired you know it's like a thousand percent that's good good to see you man it's been a long time it's been a while how are you this Monday morning I'm good I'm good I just got back from uh my siblings and I and my mom do an annual trip so we just got back from our siblings mom trip yesterday so that was cool so is it just the siblings or the families go just the siblings what's that like it's cool we just started to we went to Italy last year this year was a little bit we we couldn't get schedules to work as we went to Chicago so it's a little bit different than Italy uh but yeah it's cool it's good you don't get that much uh and have you ever read that Tim Urban uh like thing about your the rest of your life for 90 years or whatever you know that thing have you seen it yeah it's like how many days you actually spent with your parents is like basically none yeah like after you're 18 and you've spent like 90 of your time with your parents so uh so yeah it's kind of like it's yeah it's a good good opportunity even your siblings so it's cool it's a good time we just eat our faces off and walk around and see a different city so yeah it's a good time so what do your parents like to do what do you do we just so my dad passed away a few years ago so um so yeah so no it's uh it's mostly sightseeing and eating yeah I'd say like that's a good that's pretty much it I think we might work in some Wellness stuff in next year's some some yoga some hiking some you know some stuff like that but yeah I think we have to you know my mom's 73 so it can't be like you know we did we went to like one a hot spot it might be too strong of a word but it was definitely like a you know a very you know bougie dinner place and uh you know at like 10 o'clock you know we were sitting down and my mom was definitely like she's like wow people eat late and like you know they it's very loud in here but she had a good time you know I think it's a good wave so yeah it's good but you know she's a you know traditional Indian immigrant mom and so it's uh it's it's cool she's still like seeing new stuff about this country even though she's been here you know for a long long time so it's cool it's a lot of fun I love that you do that that's inspiring my parents are coming uh three weeks and we're doing a similar thing like just hanging out with them for the weekend yeah I was even I was feeling guilty this morning because I was like can you guys leave Sunday morning like early and then I was like ah why don't you try to let him stay longer like how much time is appropriate and I was curious how do you think how do you think your kids are going to treat you when you're older and I like the dynamic by the way that you go just with your siblings you don't bring your your significant others or kids it's just you and the parents yeah yeah we do that too separately um yeah I mean it's a good question I hope they see I hope they see a good example so I mean that's you know but ultimately they're going to see what they're gonna do what they do but yeah hopefully they like you know I've seen I've seen a lot like the parent the kids kids treat their parents the way their parents treated their kids I've seen that a lot so I'm like all right well you know which seems you know pretty obvious actually once you say it like that but you know it's like yeah you're just like you're you're learned you know you're observed examples become your behavior and uh yeah so hopefully but you know I yeah I don't have like it's not necessarily that's that's a consequence of hopefully doing these things like it's not you know it's not the it's not the it's not an outcome but uh but yeah we'll see we'll see I think uh uh hopefully they they I just hope they like hanging out with me like when they're older you know like that's the yeah that would be that would be cool how do you balance I'm single well I'm not saying I'm dating but you know we're probably starting a family God willing and you know how do you balance how do you balance that how do you balance like doing your own life taking care of your your significant other wife and then the kids and then also try to run a startup in business yeah I mean I'm not sure I'm probably not one that should be giving advice on stuff like this like I uh yeah I don't know I mean it's it's ebbed and flowed right like you you know this well like there's the intense start period of the company and like you know other things suffer as a result and then now CB insights is you know no longer no longer have to worry about making payroll so I can you know now I'm able to find a little bit more balance but I mean I still grind pretty hard so I uh but I find you know I think I find time when the kids I don't miss there's certain things where I just won't miss stuff like the kids have or if you know the wife didn't want to do stuff will do it but they know that like I'm still going to be grinding so uh but yeah I don't know if I figured it out I think I do take vacations with the kids solo suggest you and the kids yeah they're in different schools so we'll like their spring breaks are in weird time like up like not the same time oh just one at a time you'll take them yeah so I'll take one at a time so that's been that's those have actually been pretty tremendous like uh we just my daughter and I just went to Costa Rica my son who's younger like likes history so we just went to Boston and like yeah I mean it's that's those I think are going to be the things that I I know I'll remember I think they'll hopefully remember that stuff too so it's yeah yeah still figuring it out for sure what is it how how hard is grinding hard what does that look like because I do these videos sometimes on YouTube and it's like yeah to be rich you just work hard and every time people said I'm like what how is hard what is hard work to you what does grinding hard look like so people know what the levels are at um I mean I think it in the beginning it was honestly it was it was just hours like if I'm being candid it was like there's a lot to do and like we're a data company and so there was always just like more data to get right and like we didn't have all these engineers and smart people that we have today so it was a lot of like just ground and pound like go get the dad I go go send you know 100 emails to prospective customers like it was like your output was very correlated to your inputs um I think it's less so now but yeah I'm still I'm still working a fair number of hours and if I'm not working like I'm scheming right like you know like even if I'm not like at the keyboard I'm always like all right you know I'm thinking like if I'm walking somewhere like it's still on my brain so that might still not be considered you know that's not maybe what people might call traditionally work but yeah I'm always yeah I'm scheming like unless I'm with my wife or kids I'm I'm like 100 scheming all the time for the people that don't know CB insights how do you describe it yeah it's evolved quite a bit um it's uh we think of it today as a Marketplace so we sell to Enterprises investors Corp Dev teams and uh and then on the other side we have technology companies and we connect those two so uh we connect them to data that the technology companies give us to data to information we extract from the public web and then we also interview buyers of software and give them access to all of the insights of those software buyers and so yeah the goal is to help them make quicker faster technology decisions whether you're an IT team whether you're a venture team or whether you're a Corp M and A Team I think that's interesting definitely for the audience and I think I want to kind of go from how where it started to where that evolved to because like what was the original premise that I thought was like you have data and you sell it to VCS yeah yeah yeah it is yeah I worked in Venture before so it was like hey we have data on private companies and you know you can buy a subscription and so uh yeah that's very much where it started I think when we I think last time I saw you in person it was like in New York you were running like something you know I don't know some some like uh Meetup or something and like that's very much what we were yeah I mean you know over time we were bootstrapped for the first six years so you you sort of follow the money right when you're bootstrapped and uh and so I thought we'd sell the VCS and M A teams and then all these Enterprises started signing up and we were like you know who are you like we don't they would close really quick they'd pay us more and you know it's like the dream customer right and but we didn't really understand their use case and they're like oh we're from digital transformation or from it or from a you know a wealth management team at Big Bank X and we're using you to see where technology is going and to figure out who are vendors of the future are going to be and we're like oh like that's interesting right and so you sort of pull on that thread and you realize like oh there's a lot of people who do that at these really giant companies and they have a really hard they have a they have a mandate to use technology to lower costs or get to grow faster and the world is no longer you know IBM Oracle Microsoft it's like it's the world you and I have been living in it's like thousands of fun you know best of breed SAS companies and just technology companies and they like yeah they're not equipped for that world and we help them figure that out so yeah that's been it's kind of been the evolution over time and then the big thing that sort of changed was companies started wanting to give us information so we have this newsletter which sort of sputtered along and was growing and then eventually it kind of got critical mass and then companies were like hey I want to be in your report I want to be in your Market map and we said sure we're not going to charge you anything but you got to you know do it you got to do what we call an analyst briefing you know give us some information about you that's not publicly available like who are your customers what's your price point you know like uh why your product beats X Y and Z and they were like okay if that's the trade like we're happy to do that and so now we get thousands of companies submitting this sort of proprietary info to us and so we've got this interesting kind of like um you know Off the Grid data set that like companies give to us and then you know and then we started talking to their customers and interviewing them about what do you like what don't you like about these these products and you know now that we now we've got this like big qualitative data set as well so so a few things back how did how did you get your first customer and what was that how did you have the idea and how did you get your first customer originally so idea was I worked in Venture in m a and I hated the products that we had to use I always felt like I was still going to Google to find information and I'm like well if I if I paid you know twenty thousand dollars for the subscription why is my team having to go to Google um so that was you know the Genesis of the idea candidly like I always wanted to be an entrepreneur so like I'd looked at buying Subway franchises and you know art framing business so like I don't know if I necessarily cared that much about the problem as much as like I'm just gonna go start something but this one actually like was good in that like I felt the pain firsthand um so that was you know how we that was the Genesis and then you know honestly it was just content marketing so we loved um what was that dating site Okay Cupid back in the day yeah remember they had this dating blog and they used to yeah and it was awesome right and so it was like okay and then there was 538 which was by Nate silver yeah and we're like you know Tech is actually a lot like politics it's like a lot of Talking Heads who have strong opinions but there's not a lot of data and we're like oh maybe we could like kind of take the irreverence of OkCupid take the data driven thing of both and like start doing content marketing and we put that out there into The Ether shared it with media journalists and then they would you would say Hey listen you know you get the report just linked to us and then you know somebody would see a link in the Wall Street Journal or New York Times or wherever and they'd be like hey what's the CB insights thing you know and then free trial on this you know then the landing page and you know all the ctas and all that good stuff and yeah we just call them up and be like hey we got this thing and you know the early days it was like 495 dollars a month now you know we're at around let's call it a 50k annual contract value so wow it's changed you know we've the as the customers evolved and offerings gotten better it's changed but yeah it was just you know that was like that was that you know I talked about earlier that ground and pound like the more calls the more emails the more demos you did every day the more sales the more you got to ring the register so that's all we did in the beginning and that's all I did in the beginning and then eventually I got lucky and hired some people who uh who kind of helped scale things uh you know Way Beyond the few folks that started it one I'm curious on that like at appsumo I'm gonna start up sumo.com it was for me it was startup people in Silicon Valley maybe New York that like these products and just wanted a better price on them and I could help these products do their marketing and that's evolved where our recent Avatar customer that we're serving was a marketing agency so like a solopreneur one two-person team doing like marketing work for for businesses mostly on almost all online so I'm curious and a lot of people are struggling with this how did you figure out which customers to follow and which ones to ignore because it was interesting like hey we did VCS but then we had these people knocking and I think what I've noticed in business and marketing is like how do I follow the behavior that people are already like uh exhibiting I'm not having to convince them so yeah is there people you ignored by the way as well as the ones you've listened to and I'm curious to hear a little bit more of that Evolution yeah yeah I mean in the beginning you know when you're when you're bootstrapped or Revenue funded I prefer uh like we were super promiscuous you're right like promiscuous right like when it came to who our customer was right it's like if you had money and could close relatively quickly right we would take your money right over time what we realized we you know so a good example of that we sold to some individual Angel Investors in the early days like you know because they were like oh 4.95 a month we can handle that the challenge was that those were people who weren't used to using data in their workflow and so they would be blowing up our chat all the time with like support requests right they're like oh like what does this mean or like you know you missed this deal about you know that I did it was like a 20K check and I was like well you know that was nobody has that information um and so we realized over time that there was uh certain customers who like required a lot more support and I remember going uh I was at this conference with a Consulting uh I met this consulting company and this guy was like I need you to add two zeros your price and I was like what like you know slow down what's going on and he's like I don't want to be in line I don't want to be behind the guy who's paying you three 4.95 a month uh when I need help and I was like oh all right like support is another dimension that people will you know I always thought it was just like the product and then I was like oh supports this other Vector that people will pay us on and so uh so that was kind of eye-opening I would say for sure right and so over time and then as a business stabilized we realized okay like that kind of pro-sumary use case isn't where we're gonna go and we're gonna focus on you know Enterprises investors and you know we still have universities and economic development groups and other folks but that's not the you know the Lion's Share is now like we zoned in on but I'd say in the beginning it's just you're trying to make money and so like you you just take what you can get and then over time you have the luxury of kind of narrowing in so it wasn't yeah we weren't super disciplined in the beginning it was just like hey just like somebody's willing to pay us and you can give them a credit stripe link like go get it what would you recommend for other entrepreneurs about identifying the right customer segment to prioritize or focus on yeah yeah I mean I if I look at the the biggest mistakes I've made have been of lack of focus right and so I would say if if I had any do-overs it was lack of focus in the product lack of focus on who the customer was um and so I think figure niching down and figuring out okay I'm just gonna build something that's tailor-made and exceptional for this one kind of uh you know Persona and then once I knocked that down I have a vision of what other personas this might apply to and I'll just keep knocking those Bolding pins down over time I think you know if I had the discipline back in the day I would have done it that way I didn't um but yeah I think like kind of increasing the quality narrowing the scope is like generally I would say good is a good is a good thing to do um uh but you know it helped us find maybe product Market fit but um I think if we've been a little bit rigorous we could have said hey this there's a lot of X Persona let's go and build something really tailor-made for them um you know go crack that nut and then we'll go after the next one so yeah in product and marketing and you know our ideal customer profile I wish we'd been I wish I'd been more disciplined at times for sure and just like narrowed in on somebody with a little bit more Focus uh have you ever over focused and what I mean by that is like at appsumo this year our focus is like new buyers like let's expand the pie of people that are solopreneurs and reach out to them and appeal to them and today this morning I get a comment that's like Hey we're missing out on sessions which is the overall traffic to the business and it's like well we're focused on new buyers you want to it's like you want to focus on two things and so it's kind of an interesting it's not to say either or wrong or right but then you know there's always trade-offs to be mindful of when you're making a focus or a decision yeah I I don't know if I don't think we've been over focused it's actually a thing that I'm trying to emphasize even more now and the company is like ruthless prioritization I don't know if we've never gotten it down to one thing right but um but I think like you know sometimes you'll ask folks and you myself included like hey what are your priorities and you list like 10 and it's like if you have 10 priorities you have no priorities right and so this year like we've got sort of you know three or four kind of key priorities right and so that's what we're focused on I as a company gets bigger I think it's really valuable because if it's not one of those things everybody knows like okay we shouldn't work on that right because otherwise like it's really it's easy and I'm guilty of this like I get attracted to sort of the shiny object um and so now for even for me it's like okay hey it doesn't actually solve one of those four priorities we have like we can't do it so I think that in that sense it's been good as the company's gotten bigger to narrow in on like what are the key priorities and really thinking through those and then if it's not part of those like you just don't do it and it gives a lot of clarity not just to other leaders but like they're people in their org so yeah I'm a big fan of focus I mean I guess if you focus on the wrong thing yeah that could be kind of lethal uh but hopefully if we've done our analysis right and picked like the big uh you know I think the thing is like you got to think of something that even if we're wrong it could still be lucrative or it could still be valuable right so like maybe we think it's going to be worth you know a hundred but if we're wrong by half and it's still and we end up with an outcome of 50 that would still be meaningful to the biz right if it's like hey like it's only valuable if we perfectly execute this then like that's a problem right so um but yeah we yeah that's a good room I think we're getting better at that no it's one of these things in life no one thinks they're you know people are minimalists everyone's focused but then you talk to them and you're like that actually and I was even writing I wrote down for my own self like we have a top three in our company and we kind of revisit it and we do talk about it and we check status but I don't think it really is implying to everybody else like these are the three right I think it's like oh those are three and um can you can you share your your priorities let me see which one I can share um yeah so we have one I'll talk about so we have like this uh you know kind of like a you know what's fashionable like a product like growth the plg motion right and so we have a bunch of customers who are like smaller corporations or smaller investment firms who we've kind of priced out of using CBI right and we would get I'd get emails in response to the newsletter and somebody was like listen I have ten thousand dollars can I just can you send me a payment link can I buy one seat and for a bunch of years we're like no that's not our model we don't we can't support that all this stuff and so like last year I was like okay just for kind of shits and giggles let me see if we can do that right and the process because there's all this Machinery behind the scenes was like you got to set up this instance in Salesforce and you got to get a contract and it was like you would think we were like SpaceX trying to put somebody on the moon to get this person's ten thousand dollars um and it was like okay there's enough demand here in the kind of size the market and we said okay there's you know X tens of thousands of firms that we think would you could be prospective customers but just that aren't because of our pricing and our structure and we're not equipped to service them support them in our current way and we said okay we're gonna go we're going to go actually not seed that part of the market and go after it right and so we had to build like a e-commerce enabled kind of seat and we had to figure out who's in and who's out and then there's a bunch of like routing you know somebody comes in from a bigger customer but who found that like they're not actually they're actually not able to Avail themselves of that pricing right like that's only for a certain size customer right and so like there's all this you know there's all this sort of there's still this Machinery behind the scenes that has to be created and so that's a big priority for us and so yeah like that's been something that like we've got somebody on the executive leadership team who's like who owns that we've got specific goals around how much revenue that's going to drive and then like at every leadership team meeting or every kind of let's say leadership team meeting they're doing a readout on like here's what's going well here's what's not going well here's what I'm gonna do you know but it's it's the status reports interesting the most interesting part is you know if it's going well what am I going to double down on if it's not going well what am I doing to fix it right because that's like you know like the status reports it is what it is it's like okay what's your plan like if we're off track you know what are we doing you know is it conversion rate problem is it pricing problem is it a whatever the challenge is like you got to get into the weeds um so I think that's been yeah and so that's like an example of one and then how we sort of are trying to drive discipline around how we manage it and get to an outcome and the reality is like we might it's early days that one just launch but you know maybe six months in we're like oh this was a Bad Bet right like um but like if we've done the right if the inputs have been good then we're like okay at least we made the right decisions along the way and maybe we gotta go revisit like why was our thinking slot on this like what did we miss um but yeah like the key is like we were constantly making progress or like that's the hope how did you figure out what to prioritize and can you share the other ones maybe broadly and then I I understand how you got to got to the decision yeah um um so what typically will happen is we said we had three we have kind of three uh Financial priorities for the year right or like um we wanted to uh you know increase our ARR our new AR we wanted to increase gross retention and then we wanted to drive up Margin right like those are our three kind of financial metric outcomes we wanted and so every initiative that was going to be a priority had to ladder up to one of those so if you can't show that's going to help one of those like immediately it's excluded it couldn't ladder up to revenue sorry one more time yeah Revenue yeah new ARR so new annual recurring Revenue so yeah absolutely um and so so one it was there right and so what that ends up doing is it ends up getting rid of lots of science projects on the product side right it's like oh this wouldn't it be you know like the the the uh the most painful things to have built in retrospect started with wouldn't it be cool if right because it was like oh yeah that'd be cool and then nobody really wants to pay for that right it's hard also if you kind of start talking about it and then people are already committed to it and as a leader you're like you have to kill or pull back it's tough yeah yeah it's you know and the thing is you know like if you've hired good people like as I imagine you you have and we have is like there's actually very few bad ideas right there's just but there's good ideas and then there's like exceptional ideas and you basically have to say no to all the good ideas and only focus on the exceptional and so we figured out these kind of key financial you know metrics operating metrics we wanted to focus on and then everybody kind of comes with you know everybody meaning on the leadership team comes with okay here's what I think can drive those and then it's sort of like a you know it's a productive sort of Battle Royale right for like you know which idea is the best right um and so like that is based on you know really based on the quality of your thinking and the quality of your preparation right and so like good ideas are those that come with a set of facts and information bad ideas like oh you know Noah and I agree that this would be good right like that's not good right a bad idea is whoever is the hot company in Silicon Valley is doing it right like don't give a right like why is it relevant in our context and why will we be successful with it so you know like there's a way of presenting ideas that is that does better at CBI in some other ways and yeah if you bring facts and information to your case and then yeah we kind of like pick from amongst those and then that becomes that became our priorities at the start of the year and you know we'll see you know we'll revisit them and you you know we kind of stage gate them so if like if things are going well and they need more resources they get more resources if they're not going well then hey like what's your plan to fix it and if they're like off the cliff bad then it's like okay it's like time to like you know cut you know cut Aid on this and goes pursue something else so that's yeah that's kind of like the rough the rough methodology right like planning's yeah that's like an art you know it's like when you get some stuff right and get a bunch wrong uh and I would say like this is probably our first year of this is the best year of planning we've done but like you know historically that's been it's certainly has been an area of opportunity for us how do you know it's the best and what did you do differently this year than the past so one I think we got ahead of it like we were we weren't you know like often we were like kind of building the plane and flying it at the same time right like we're in the new year and we're still like figuring out the priorities right which is like you can't that's just not you know then we're like four months in or five months in and we've just figured out the priorities and it's like you know now we only have half a year to actually go action um so one I think we got ahead of um two I think we had sort of this you know we'll call it like an idea meritocracy in terms of like everybody bring your ideas and we'll go through and hash through them and then I think three as we said we gave individual ownership to each priority right like there's somebody on the leadership team who's responsible for it right and so I think in the past sometimes we've had sort of like this jump ball right where it was like it wasn't it wasn't clear who owned it right and so like if it's if you have unclear ownership it's like well they're everybody's doing whatever they think they should do but it's like nobody's actually the quarterback and you need somebody to be the quarterback who's kind of calling the shots on it um I'd say those three have probably been the things that have made it good the best thing though is that like that idea meritocracy part is like actually seeing ideas and saying like good no good and like or you know come back with this I think like that's been that's that's big I like the the ownership I definitely resonate with the thing I wrote down is that we're having like a H2 Summit planning Wednesday and I like what you said about Revenue focused ideas so it's like here's the targets I care about that gives you the structure for thinking about the ideas and bringing data related to that I think otherwise um potentially I would speak for us it's a little open-ended yeah we had that we had the exact thing right it was just like yeah because yeah then it was just like they're all good ideas but it's like to what end right and I think by giving folks those priorities it also folk it's you know it's kind of like when you ask somebody like hey do you want to go to dinner like and it's just like totally open-ended right versus like hey like do you want to go out to this neighborhood and get this or this like you know now it's just much easier for people to like kind of paint within those lines and so now when we said like hey ARR growth retention gross margin like it was like okay I can get behind that right like I know what's inbounds and what's out of bounds pretty quickly and so I think actually the first set of ideas that we ended up discussing were of a higher quality because they all had to ultimately like be additive to one of those priorities right it wasn't like hey I care about like you know some random like thing it was like it was like no no walk it back like how's it going to drive one of those three and if they couldn't it was like okay well then like go back to the drawing board right like we don't we can't I like that you said your top metrics was like ARR margin and retention retention I might copy it I'll do like civilians that's a good idea I'm just gonna put this I like that um one thing I'm wondering I'm running many things on it and it's it's Adnan because I'm so used to Adnan and this morning I'm going for a walk I'm like it's it's odd not no it's on on it okay um what did you do to level up your leadership like what did you who did you have around you what did you consume what did you where did you learn all this from and you know more specific stuff the better for selfishly for me and then maybe the audience will benefit you yeah um I don't you know again like it's it's evolved right so like um you know like it and it's I don't know if these are Universal rules I think sometimes like startup land people talk about them like they are like the person who's good from one to two won't be good from two to four won't be good from four to eight and like I don't think that there's these like they're not these like laws of physics that are universally true but I think like I have seen like sometimes the person who's great at one stage isn't great at the next stage right and so I don't know if you've ever seen that um this is framework settlers uh Town planners a set in a Pioneer settlers Town planners right and it's like you know settlers are like the first people who like uh you know they're like sorry Pioneers are the people who like forage A New Path and find the thing and make it work right and then the settlers come in and set up systems the town planners like help it like grow and flourish and so you know I'd say like roughly that's been my experience like there's just different stages of company growth and so you have to make sure that the people that you have at the leadership team have been people that are good for that stage of growth including myself right like there may be a point in which I am not the right person for CB insights because like it's gotten it's outgrown my skills um I still like to believe that I have something to offer so I'm still still here um the thing I think we've looked for is or the mistakes I've made have been where somebody is if we're at stage n we look for people who've seen growth at the N Plus One Max n plus two from us right so like if somebody's from Salesforce or Oracle like they're not going to be able to hang at CBI and it's not anything about a deficiency in them it's just that our entropy level is too high right and like we have there's just in the and the business card doesn't do as much of the heavy lifting like the name on the business card right like I remember when I was at American Express like everybody would call me back right and like in the moment you're like oh that's because they think on and it's like you know dope right and then you realize like no they just they just care about American Express right and so when I left all those people who I thought would be like super helpful didn't return my calls right and that was like oh that was because the logo on the business card did most of the work um and so we're a challenger brand so I think the one thing we look for is you know people who are sort of stage appropriate they've seen maybe the next level or two levels up um that's been big I think any time we've made mistakes has been hiring people who've been just too many stages removed um and then in the hiring process I think we've gotten better there um you know we with the leadership team it's like we always do like a case study right like and not like a McKinsey like you know how many gumballs can you fit in a 747 kind of case like a like a hey here's some data on our company sometimes we like it make it illustrative so it's not real data and we say like hey and here's the problem and here's your prompts all right um and come in and you're gonna sit down with me and a couple members of the leadership team and we're just gonna like talk through it the way we talk through like any problem that we're having and in those sessions I'll sometimes even if I agree with them just take the Counterpoint just to see how we disagree right and so that's been really good because you can actually see how good somebody is at like thinking about things in our context and actually being able to push back how they work in our in our sort of setting right um you know um do they go above and beyond in that case and that that's like the end of our process so that's been really good because if you don't do well in that like you know there's been times where I've gone against my instinct and somebody's output there and I've still hired them and like you know 100 those people haven't worked out so that's been really good and then references which is a weird you know actually maybe seems trite like I take those incredibly seriously So for anybody on the leadership team like I do them myself and I'm basically looking for reasons candidly not to hire the person even though they're very far along in that process like if I don't see high conviction by the references I usually ask like hey you've worked with X you know other people like this in your history like where does you know you know ABC persons stack up and if they don't say like they're the best person I've ever worked with in that role right like that's usually like that means like then I'm gonna it's not a definite out but like I'm gonna push on that now with the next reference so um so those have been like the case study and references at the leadership team level and then yeah just kind of like knowing when somebody is Maybe when the company's outgrown them uh is important that's really I would say that's that's the most agonizing kind of thing because they're like they're somebody that you you like personally grown to like a lot and they've done great things for the business but business has gotten too big for them and so you got to find a way to and some people see it and they're like oh no I'm like a I'm a 10 to 20 million dollar person like that's what I love and they like they're just self-aware but a lot of people aren't and like that's a hard conversation and gotta find a way to sort of respect their contribution but also find a way to like say like Hey listen like for us to go from 20 to 40 or 40 to 80 or 80 to 160 like you know like this isn't this isn't a fit um those that those conversations are challenging and sometimes difficult any books or advisors that you've had or courses that you've benefited from in learning organization leadership management yeah there's a book called [Music] the manager's handbook um I'll send it to you afterwards I should know this um I found that book to be really good and actually the book that has like it's not a management book but the book that's had the most impact on me from a business perspective is the goal by this guy named Eli Yahoo gold Rat wow you that was okay tell me more why you like that yeah so that book is like it's a weirdest book Business book I've ever read because it's written as like a fiction book right so it's kind of like you know this story and this guy and you know all this stuff but like it's just a systems book and it like just talks about like in any system the challenge like there's one constraint that's restricting you from achieving what you want and like you have to focus on solving that constraint once you solve that the constraint will move elsewhere is sort of the the summary of it but that book has been like I would say transformational for me in terms of thinking about like yeah like from the business is a system and how do you break it down into systems um so yeah I love that book I've read that like multiple times and I think it's it's weird it's weird because it's written as yeah but it's really really good I've read that one and I I the first time I I've only read it once and I was like it felt more like operational research like like how do you be efficient at the company um and then what's the bottleneck holding back the other bottlenecks I think was the major takeaway what did you take away that's yeah that's what I took away but I think everything is like everything's a funnel right like in a company like you're trying to hire it's a funnel you're trying to Market it's a funnel sales is a funnel engineering is a funnel I got I got a lot of I you know so like you know we'd always talk about like on the on the product side you know it was like oh like you know there's all these ideas the team has we need to like find a way to surface the ideas and this is a few years ago and it was like like our ideas are a problem are we like actually executing are we not is there an execution problem like is our development time taking too long right is that from four years ago when you actually broke it down it wasn't we didn't need to spend time getting more ideas we needed to get the ideas we had develop quicker right so we could have spent a bunch of time trying to get more ideas but it actually doesn't solve the problem those ideas would have just sat in inventory because we didn't like we couldn't get them into production right and so I think ultimately like companies are just like all sorts of funnels and so like yeah I liked it because like you know a funnel is a process as a system and this the goal is like just really good at seeing like okay just focus on the biggest problem in any funnel and then once you figure that out constraint or the problem just moves elsewhere in the funnel we need to go solve that and just keep solving that so I really yeah that was really good yeah I love that manager book the one you're saying before if you ever if you find out which one that was yeah um I know we have a few more minutes here uh what are you noticing in the markets today I'm shifting gears a little bit yeah yeah um because you have this you have really interesting data about probably it sounds like more Enterprise than the Consumer side but I'd just be curious like what obviously Ai and chat GPT stuff I'm wondering what are the things that people aren't noticing that you're noticing yeah so I think the big thing I'll break it down there's sort of like the Enterprise side there's the investment side and then there's the acquirer side so on the Enterprise side like 20 you know 2015 to 2021 like it was all about New Growth right it's like hey what new businesses are we going to add like how are we going to drive more Revenue more Revenue Etc you know now it's become about how do I improve operations get more efficient like deal with risk right so it's like it's gone from like the revenue side to the expense side right and so when you're thinking about um the technologies that are doing better in large Enterprises today are often those that like will help them you know save money become more productive and like in 2021 it was like hey we can add this new business opportunity to you and you can go sell more of you know ABC so Enterprise just more cost conscious that drives a lot of the technology decisions um so that's been one on the investor side I mean it's you know it's just a tougher market right like valuations have totally reset um which is good for if you're writing new checks right because you're probably getting you know companies that are better evaluation um which can be good I think a lot of the sort of tourists in the in startup land have probably shaken out right like you know people who are just like startup Founders because it was fashionable like they're kind of realizing like oh this is harder than it looks and you know I think some of those posers are probably washed out which is which is a good thing you know if you're an investor I think the challenge though is if you have these companies that you funded in 2021 at 100 times you know ARR like that company is may never grow into that valuation right and so what do you you know what does that founder do what do you do as an investor right with that company it might be a solid company but it's not it just never grew into that sort of lofty Mark that would have been set and so I think there's a lot of like you know so you're seeing it now there's more down rounds there's going to be more company failures because there's just folks are focusing on their best bet at this point they're not going to just like you know kind of spread the cheese on the pizza evenly the way they were in 2021 um and then acquirers it's the Strategic so there's two types of acquirers there's like your financial sponsor which is like your private equity and then there's your strategics and you'd have counter-intuitively you'd think like strategics are like oh this is the best time for me to acquire I get the best deal but their stock prices are down so they're actually kind of risk off like they're not doing deals and private Equity is probably the you know they're the ones who are probably the most acquisitive right now but like they're also you know generally a pretty disciplined buyer right and like they're there's not all these you know quote synergies that they're going to get so they're going to Value you in like a really real way and so I think there's a bunch of like late stage startups that private Equity is probably going to go swoop in and pick up on the cheap because they're good companies that are sort of you know we put out some data recently I think like 86 percent of unicorns were still hiring right and like a grown head count like in the last year which is kind of shocking right you'd think like everybody got the memo like on Cost Containment and stuff but clearly people haven't so I think private Equity is going to swoop in sort of fix these companies that are bloated and sort of overstaffed and just gonna say like Hey listen you've got like your earlier comment about Focus this is working stop with all the science projects and like just get buckled down on this segment um so I think it's a good time to be in private Equity investors I think if you're disciplined there's probably the best time to find good deals but you got your existing portfolio you got to deal with and then Enterprises it's just shifted more to let me cut costs and let me figure out how to improve operations and not you know I might not be looking at like autonomous robots and all the Sci-Fi stuff that I was looking at a couple years ago so um yeah it's just yeah The Tenors definitely changed I would say and then within that you know generative AI is like you know if you're a Founder listening to this like you should find a way to sprinkle that into your pitch deck because it will it is the it is the unlock for for fundraising right now uh it's like the one sub-market that is flying right I think there's like there's already 13 unicorns in generative Ai and you know no other segment is seeing that kind of growth like fintech digital Health like all the Darlings of the last few years are all like they're all down yeah gen AI is definitely like the place um you know I think they're like the challenge is like it's um there's a there's lots of like brain power going to sexy ideas and so this is going to end up being a ShakeOut like there's probably way too many hey gen AI copywriting tools there's way too many gen AI travel planning tools right but like these are like the problems that everybody's like oh I felt that problem and then everybody goes and starts um I think like some of the less sexy generative AI stuff like the folks that are doing generative AI to help lawyers and accountants and Auditors like that's probably where like that's where the returns are gonna be if somebody figures those out but you know that's those are you know that's like the you know smart people focus on on sexy problems is often like where there's there's some good there's some good uh there's some good outcomes uh but yeah a lot of the money flies into stuff that everybody has felt in their day-to-day life and then yeah and do what you know why can't Trip Advisor build that travel booking tool like there's really no reason that they can't and we're seeing that in real time like Microsoft like is moving really quick right like as quick as startups you know in some instances so this idea that like big companies can't move quick I think we're starting to see that that's actually not the reality and so you know sometimes Founders like we in our delusion or you know arrogance or whatever we want to call it or like oh yeah we'll just move quicker and it's like well no like look at the evidence right now that's not the way it's working so you actually you actually need to have some fundamental insight and not just like well we'll execute big lumbery slow ass company because that's that doesn't seem to be the way it's working right now that's so interesting it's very counterintuitive about the big companies yeah they are moving quicker like because back in the days like oh they're they can't compete yeah exactly and it's still a subset of them it's still like your tech tech large tech companies right I'm not sure like you know I'm not sure that like you know the life insurers of the world are blazing any Trails across the board here but um but yeah there is yeah the folks that we might think of as you know who you can compete with you know they do move really quickly and so I think it's something to be mindful of but yeah there's going to be some really interesting you know like the the co-pilots right like there's you know the code development co-pilots that github's made but there's going to be you know co-pilots for doctors for lawyers for all sorts of other trades that I think are going to be pretty compelling and we're seeing some stuff th