Jon: So today we are on with the forecast founders. We have Amy Cooke and Ryan Westwood. This is their second rodeo together. They are in the rev ops space. They recently just closed a $34 million round and the two of them together and their prior team also sold for Infosys for $250 million. So I personally AM is super excited.
Jon: This is represents one of Peter's portfolio companies. I think both are right. Both Simplest was a university growth loan portfolio company and forecast is now again is that public or it is now.
Peter: Yeah yeah. No we're very excited to be supporters and partners with Ryan and Amy again.
Jon: I'm super excited. I, I met Amy through a local user group, AWP, Utah, and instantly we fell in love with her and we've done stuff ever since. So like when you look at like founders, they're just rock stars. Both Amy and Ryan are just phenomenal.
Amy: Well, we are big fans of you guys and we really appreciate your support. And also, John, first moment I met you, I'd heard all about you and they were like, you got it. And then I'd seen you on LinkedIn, like you have this insane LinkedIn following. And so when I met you in person, I thought that was just it was it was just super awesome.
Amy: So I was very glad to be very glad to be in your.
Jon: I'm grateful to be around your and hopefully some of your karma rubs off.
Peter: A lot of good karma on the forecast team. So I thought maybe it would be helpful for our listeners to kind of set the stage and talk a little bit about Simplex and Ryan's background, because I think it informs a lot of your thinking, right? Ryan In terms of how you're thinking about focus and and where you take this company.
Peter: Ryan and I had the pleasure of meeting when we were both on the board of an entrepreneurial venture capital association in Utah and had a lot of fun putting on different events and activities to support founders and our local ecosystem. And I heard that he was raising for his new startup Simplex, and begged him to let me write a check and get in on the deal.
Peter: And he was gracious enough to let us do that. But Ryan, can you tell us a little bit about like Simplex and and what that story was like?
Ryan: Yeah, surplus was an incredible journey. I think that there are a few pivotal moments that stick out to me and things that made a big difference. I had an opportunity to write for Forbes for four years, and during that time I interviewed 50 or so CEOs and I was paying such close attention to every word, I mean, everything they said.
Ryan: And so I, I learned a lot through those interviews. I did a ton of listening, and then we applied it. At simplest, everything that I had learned in my career, everything I learned through those interviews, we applied it all. At simplest, and it was like everything in my life since I was an eight year old boy and and wrote a report about being an entrepreneur.
Ryan: And ironically, I think most eight year olds probably of our time spelling it. But I was writing, I wrote a seven page report. I still have. And so everything from that point to sent was everything I had learned. We applied and it was like this huge culmination of all this effort and energy in my life was focused on simplicity, and it became this incredibly exciting company.
Ryan: And we grew from 0 to 600 employees in six years. And I had these incredible people like Amy running all of the go to market marketing and making it just home. So it was incredible opportunity to grow a business. We were highly differentiated. One thing that was really unique about simplicity, a lot of people felt like we were too much of a niche and to differentiate it, we took one small niche and hyper focused, and for years Amy and I took constant pressure from our sales team and from employees and from everyone else to broaden our scope.
Ryan: And we were relentless in our focus at being the best in the world. That one thing and it ended up the when I knew we were on the right track is we signed a $13 million deal at Google and we beat out Deloitte. And I was like, my gosh, I remember the executive meeting. I was like, You know, Deloitte was founded in 1898 and look, there's this tax company, this historic company, and we're like this little startup and we just we just beat them.
Ryan: And it was because we stayed focused and we were beating the drum and doing one thing really, really well. And that was when I was like, okay, we've got something pretty special here. And then the emphasis came and made an offer we couldn't refuse. So we took the offer and sold.
Jon: The business 50 million bucks now, and you did it right at the top of the market, beating the market crash.
Ryan: We did. I was also I still remember being with Clint back at a jazz game and being like, my gosh, three days till it funds and it was the day it actually funded is when Donald Trump said, We have a national pandemic. This is serious. And I was I just kept refreshing the bank account, like, okay, it's done.
Ryan: It happened, it's over. Because I was getting calls from other friendly, like competitor CEOs that were in the same process. And the the buyers fell and they were only three weeks. They were three weeks behind us and they walked away. And so I was like, my gosh, this is this. This needs to happen. We need to close.
Ryan: So it's one of those things where you're calm in front of the team. But in reality, I was just all nerves because I knew everything going on in the world. And so I felt very fortunate. We have, you know, I think of what's the movie It came out was Vin Diesel when I was in high school and the car movie Fast and Furious.
Ryan: You know, No. How you know how he says that, you know, he you can win by an inch or a mile, but a wins a win. I feel like my career has been all winning by inches. I like the whole way. I it's just just trying a little bit harder and not being relentless and not being willing to give up.
Ryan: And we win every time and people see the track record. But Peter, I think it's mostly by inches.
Peter: Yeah, I think that's the way it is for most people, right? It's you know, you move the mountain one shovel at a time, you eat the elephant one bite at a time. One of the things that I've always really respected about you, Ryan, is your ability to build amazing cultures. And one of the things you talked of that you kind of hinted at, but this Google deal was you had built this really interesting ethos within the company of always being like the underdog.
Peter: Can you talk a little bit about that and where that came from and how that you had to pivot that over time as a company went from being like the little underdog to winning the big contracts?
Ryan: Like Google is interesting because if you think about core values of a company, I think sometimes founders, they put values up that they think that people would like or that they saw from another entrepreneur. And I really think that at the heart of the founders, it has to be something you really, really believe in and is part of.
Ryan: Like even if you weren't a part of the startup, this would be core to you as a leader. And I think Amy and I, of many times in our lives and our careers have felt like underdogs. And so it was very easy to have underdog spirit be one of our core values because it was so authentic to who we are.
Ryan: But the first time I really felt like an underdog was and I've told the story before, but I was in Philadelphia. I was this kid from Utah. My teacher was one year from retirement. She was racist. And she also really didn't like members of the Church of Jesus Christ. She said to me, Hey, you're the Mormon kid. You guys are you guys are black.
Ryan: You sit at the back of the table, here's some glue sticks. If you raise your hand, I will not respond. Don't ask me any questions. Figure it out. This year. And I spent a year in the back of the classroom being completely ignored and feeling what it was like to have no privilege. And I had to catch up in school the next three years.
Ryan: And I got this chip on my shoulder like, I got this. I'm smart. I'm going to get to the I better get to where everybody else is and get ahead. And in the fourth grade, I won a spelling bee against the sixth graders. And I was like, Yes, I did it. And it was the first time that, like, it drove deep into my heart, an underdog spirit and like a chip.
Ryan: So that's where it started. And I think, Peter, every time you read a biography or you learn about somebody who's successful, there's always this tie to their childhood. There's always these defining moments. I mean, Amy, I love to hear, just like for you when in your childhood, in your life, when did that underdog spirit come about?
Amy: I've just been thinking about that because I think you're absolutely right. Like everyone that I know who has like grit that won't stop has had a really like, pivotal life defining moment where they had to just pull themselves up and keep going. For me, it was when I was newly married. I had been divorced. I had two little kids.
Amy: I got remarried and I thought everything was going great. My husband got a job one month before Lehman Brothers went bankrupt with Lehman Brothers. So then he was you know, he was like unemployed. We had tiny little kids. I couldn't move because of a custody arrangement. He couldn't find a job in the area. He had just had back surgery, Like it was like kind of dire straits for us.
Amy: And we weren't paying the bills. And so that I'm like, you know what is go time? Like, what? What am I going to do? Because these kids need to eat, you know? And so Jeff came to me, my husband's Jeff, and he he gave me this. He was like, Hey, Amy, I got this $10,000 tax return. Let's split it in half.
Amy: And each take $5,000 and see who can make the most money. And so I thought it was awesome and I really appreciated it because it kind of got me out of my like, everything so hard to. Yes, yeah, let's do this. And he made it fun. And so you can ask me who when.
Ryan: I'm bothering me. Yeah.
Amy: Exactly. I went from the competition. But he says that because he invested his in real estate. So he goes well for counting how many hours spent to make it. Then he wins because I put a whole heck of a lot of time into it. But I use that $5,000 to start a business. And I started a writing business and one of my clients was Bryan Westwood, helping him write his Forbes columns and so he talks about Forbes columns and learning from the greats.
Amy: And for me, it was so amazing to be able to learn right along with Ryan and learn from Ryan and be able to like, have that knowledge distilled as I'm writing these articles. And so like Ryan very quickly became one of the people I admire most and continue to admire most. And so then I was like, You know what?
Amy: I just when Ryan asked me to, you know, join to leave my business and to join the team and be the head of marketing, at simplest, it was a no brainer. I was like, Absolutely. I have so much to learn and, you know, it was just such an exciting time. So that was that was my story. And it was a really wonderful one, just a wonderful outcome.
Amy: And and I have so much appreciation for the team that we work with now for Ryan as a leader for the values centric approach that we take and for that grit mentality that just like we will not stop, we absolutely will not stop. It does not matter how long it like how long it takes or how many hours we have to stay up to do it, you know.
Amy: So I think that's been a really great.
Jon: Yeah, you're a night owl, Amy. I've learned this. I like she she sleeps less than I do.
Amy: Well, you know, when you're just so excited about it. What what can you do? Like, I'll stay up researching competitors, and, you know, it's really.
Jon: So. Well, tell us about focus on what is it.
Ryan: It. Yeah, sure. So during our time off, we were thinking, okay, if we if we get back involved in building a business again, what does that all look like? And one thing that we came away with is we were like, we don't want to start at zero again. That's really, really hard at it. You can burn up a lot of cycles trying to get to product market that.
Ryan: How do we find a business that we're super excited about that already exists? So that was criteria number one was an existing business. We're not going to start from scratch. Number two is can the business look like the profile of a public company? Can we buy a business that we can really build over the long term with high gross margins?
Ryan: Is it scalable? Is it recurring revenue? Is it that kind of model that we can build a much bigger company with? The other thing is, is it highly differentiated? We found and have learned highly differentiated businesses. I can go much, much further than the last thing is, is we wanted a really technical team. We felt like a technical team that had built the product but needed just an accelerant and a go to market team would be a great marriage for what we do in our team.
Ryan: So we found all that and forecast and when I started interviewing customers and customers were really, really happy, I that's when I was like, okay, this is it. This is the one. And then when all the founders agreed so quickly, I was like, okay, we're definitely on the right track. And I would say that I'm even more excited now than when we were in due diligence.
Jon: Who are all the founders? Yes. So what is.
Ryan: Yeah, so the founders are Amy, Lance, Isaac and myself. So Isaac West was our CEO. Lance is our Chief commercial officer, Amy's our CMO, and then myself, Courtney Yeah, we've all been doing it for a long time. Lance was a head of our partnerships and alliances, at simplest, and he it's been seven plus years I've worked with him.
Ryan: So interesting thing about the team is we have opted to work together multiple times and we've been through a lot of hard times and good times and ups and downs and we still like to work together. And I think it really rare thing about our team is that we are to keep working together independent of the wealth we've created for each other, independent of new opportunities.
Ryan: Even when we've been presented lots of other options, we've all opted to work together.
Jon: That's fun. IT Can you talk a little.
Peter: Bit about what forecast does?
Ryan: Yeah. So if you think of if you think about right now, 40, depending on the studies, you see 40 to 50% of reps are not hitting quotas. And our belief is that one of the major reasons they're not hitting quotas is they're not being set up to succeed. So their territories, they're the way the leads are managed and tracked, the geographies, the products they're told the sold, the sell, the industries that they're in, these things, sometimes sales reps are let down by their own companies and organizations, and we believe they're not being set up properly to win and succeed.
Ryan: And with focus, those teams have a higher likelihood of hitting their quotas and achieving them. And our customers report far greater confidence by the sales teams. The quotas and territories are right and accurate. And if you've got a sales team that's excited and believes they have the right territory and the right quota makes a magnificent difference in the growth of a company.
Ryan: So my belief is, is that without full cast, your reps aren't achieving what they could.
Amy: Yeah, just a follow on to that. Like we've all been in sales positions before and we know what it's like to not be supported and we know what it's like to feel like, you know, you're just being used and abused by the company and you're not being set up for success. There's a really interesting statistic that I'll have to get the source for you later, saying that when when reps hit only 95% of quota instead of 100, they are like 300 times, not times 300% more likely to attribute.
Amy: And then you have the cost of all that, trying to find someone new and when really if you could just help them get to that 5%. You save so much in employees satisfaction, you save so much in, you know, in your revenue and not having to ramp someone else up. And so and you have such a better culture.
Amy: So there is the culture piece, the revenue piece, all of those things to really help the salespeople succeed.
Peter: And so you're starting off with sales, territory management. But the talk to us about the bigger vision, because I think the bigger vision is that there really isn't a dominant player and rev ops and rev ops is like this nebulous term that means something slightly different to everybody. Do you talk about like how you think about rev ops and how it relates to focus going forward?
Ryan: Amy You talk about Rev ops, I'll cover I'll cover the strategy for the bigger picture. Go ahead.
Amy: Okay. All right. So revolves is so interesting because it was formed the term was coined by the CEO of Lean Data in 2016. Like this is not been a term that has been used a lot. But everyone sees how that connective tissue between sales and marketing and customer success is missing. Right? You've got Salesforce that tried to automate and remove revenue pain from sales.
Amy: You got HubSpot. The we tried to remove revenue pain from marketing, but they're not talking to each other. That connective tissue is gone. And what we hope to do with forecast is to have that connective tissue there to really streamline those systems and make sure that everyone is just set up to succeed. And all of that conflict between sales and marketing, etc. is gone.
Ryan: Yeah. So just to just to further what Amy is saying, I mean, we really see an opportunity where you have all these point solutions and rev ops. There's tons of point solutions to combine those point solutions to create one flow or go to market platform. And that's what we're focused on doing. My belief is there's a lot of entrepreneurs out there building products or companies that would like to join.
Ryan: The team of experienced entrepreneurs, have a track record of success that can help them be successful, and we'll look to be aggressive about opportunities to acquire.
Jon: Any other radar that you can talk about. Probably not. But I mean, you've already you you and Amy co-founded. You acquire that company.
Ryan: Yeah. What I will tell you is that I'm reviewing an LOI right now. So there is one on the docket.
Jon: Because that was a big part about what made you successful at Simple, as was the acquisition roll up strategy.
Ryan: Yeah, we did seven in three years. Yeah, we were pretty, pretty focused on that process. We love M&A. It takes a lot of execution. It's tedious. You have to be maniacal about details. Most teams aren't set up for M&A. Most fell and I don't think most teams really understand or appreciate the nuances of it. I give an example.
Ryan: You you buy a company, somebody has one benefit, one small benefit that is slightly better than yours and you don't notice it and you bring them into your company, you will demoralize that person. And so if your team is not aware of those finite details and willing to manage them and understand them, it backfires. And I think most M&A transactions fell because of lack of execution and paying attention to detail, and that's where Isaac Westwood comes into place, RCO, where, you know, I can bring these deals in, but he is going to make sure every tedious little thing gets managed and taken care of.
Ryan: And that's where we make we really complement each other so well as co-founders because my, my weaknesses are their strengths and vice versa. And we're all really aware of each other's weaknesses and strengths, and we're really open with each other about those weaknesses and strengths.
Amy: Yeah, absolutely. Yeah, It's Walter that I had to get used to because I came from an entertainment family where everything was gold and gilded and the show must go on and you must not show any cracks in the exterior. And so then to start working with Ryan and Isaac and, and, and Lance and have them say to me, What are you actually thinking?
Amy: Like you're saying this, but what do you actually think? And it's so gratifying to be able to talk with somebody and have that level of trust where you can actually say what you think and you can say something like, you know, I think that that sales number is bullcrap because I think you're sandbagging your number and have them be like, am I smelly my number?
Amy: Okay, let's review it and and have that not blow back on you and have that not there. There are nothing but good things that have come from being transparent. And that is such an unusual thing to do in an organization. But it's something that I have come to really respect and admire about the team and it's my weakness and I'm trying to get better at that.
Peter: Yeah, Having a culture where you can be honest and authentic is so valuable, right? You're able to see around corners that other people can because of that.
Amy: Yeah, Ryan has a really good model that we use. That's Lindsey. On his model of organizational health. We use that as kind of an underpinning of how we want to run an organization and how we want to get rid of any of that. Have you heard of the five dysfunctions of the team? I'm sure you have, but we.
Peter: Use them. Yeah, but you want to do all of our our listeners real quick.
Amy: And well, sure. Yeah. So like the Five Dysfunctions of a team is based on Lindsay, Yoni and let me look it up so I don't get it wrong, but it's based on a little a pyramid that you can look at. And he talks through the organization of a company and it's all about you got to have number one, you've got to have the trust.
Amy: Number one, you've got to have number two, you've got to have unity. Number three, you've got to have healthy disagreement, which is what I was just talking about, because I just you know, that's my weakness. Right? Number four, you've got to have accountability. And number five, you've got to have some self-interest. So you've got to. And Brian, do you want to expound on that?
Amy: Because I think you've extend beyond that for sure.
Ryan: Yeah. So I'm geeky enough and love this stuff enough that I wrote a 20 page document on this operating model that we now use to rob the company because I, I, I just genuinely, whether I'm running a company or not, the process and the details of how you do it is just a life obsession of mine. And so I even love helping other entrepreneurs or CEOs and watching their growth rates double and triple by just making small changes.
Ryan: It's really not major changes that are the difference makers between fast growing companies and those that aren't. But when you when you hit on those five points, one of them that she was talking about, I'll just hit on is commitment. Right. And when you're when you're really committed team and you're in, you have if you have anybody on your team that's not fully committed and they they weaken the entire team if you've ever joined to go work for a nonprofit or or you go do anything and you show up and people are half hearted, it's demoralizing.
Ryan: And so you've got to be fully committed. So one of the things we do is we put our hands in at the end of meetings, you know, like at the end of a budget meeting, it's a boring meeting. We put our heads in and say, Are you committed? We also have where every single executive is an investor. You don't join our executive teams unless you cut checks.
Ryan: So yeah, unless it hurts really, really bad when you don't succeed, you don't join our executive teams. So and I and I used to think that wasn't that big of a deal. But the more I find, the more I see that so many startups are freely giving out stock. They're so excited about gathering or gathering this leadership team together, and they forget that it's a two way street.
Ryan: Yes, you will give them stock, but they also you need their heart and commitment to build it. If they're not willing to do that, then they don't have a place on our leadership teams and the way we work. So we have passed on talented people who at the end of the day, we're able to cut a check into the company and we've had people empty there without telling us until later.
Ryan: And retirement accounts made them a lot of money.
Amy: Yeah, that puts the pressure on. You know, one other thing, if I if I can just kind of expound on some of the the principles that Ryan's use that I think are so, so interesting, different and important. And one of the reasons that he is successful time and time again is because I when I was running an agency, I ran it for 15 years before it focused and before I was working with Ryan, I had a chance to work with literally hundreds of CEOs because I was doing their brand.
Amy: I was helping them with their marketing. And so in my opinion, I have a really, really good bird's eye view of what makes a good CEO, because I've been working with so many of them for so long. And there are a couple of things that I think are really excellent about the way that Ryan operates and other successful CEOs operate that are super important and they are actually truly life changing to a business.
Amy: The first one is that this is like you have to have direct and decisive leadership. There has to be somewhere where the buck is going to stop and someone's taking responsibility with it for it. And the CEO needs to make sure that each executive is is taking full responsibility for that. And then when there's disagreement, then the CEO says, okay, this is the answer.
Amy: This is the answer. This is where we're moving and we disagree and commit that. To me, I have seen I have seen multiple businesses fail because of that. The second thing that I think that Ryan does really well is I think that it is really, really important to have that small differentiated like that small segment of like where you strike and then expand that differentI Asian.
Amy: And it's really hard to have that discipline to say, we are going in here and we are going to get all of the TAM here and then we're going to expand. And that what Ryan mentioned before was like it was really hard for the sales team. The simplest to understand that because you're like, I've got it. I've got an amazing like sales cloud deal right here.
Amy: And why do you like why do you only want CPQ or whatever, you know? And so we need to put it on our website and yada yada. And so I think having that discipline is really important. So anything else, Ryan, you would say?
Ryan: I would just say that the only reason that I'm able to be a capable CEO is because I have a way better team and a bunch of people that are better at all their departments than I am. So Amy is way better at running marketing than I would ever be. She knows it better. She's passionate about it. She has done every role in the marketing department.
Ryan: She can go deep in any area of marketing. She's put in the time and effort. She's got mentors, she's learned, and now she's a mentor to many, many, many marketing leaders. So I couldn't do my job well if I didn't have it distributed. And one thing I see with a lot of startup founders is, you know, they really feel like they're the big hero, right?
Ryan: And at the end of the day, it's a big time backfire and a miss. It is such a missing judgment. You do not want to be that person. You will burn out. You will not make it. You want to have the best team you can possibly have and you want to distribute out the energy, the effort, the burden, the stress across all of you.
Ryan: And that's why you have co-founders. That's why you're not a solo founder. So I like to distribute the wealth. I'm happy to share equity. I'm happy to share all the opportunity with really smart people, especially if you've worked for people, for a long period of time. I always tell entrepreneurs, you should have a list. If you're an entrepreneur with everyone you've met throughout your life that's impressed you, you should have that and you should be ready at all times with that list.
Peter: You know what? What I love about that too. And one of the things that has really struck out to me working together with you as an on the investor side is that you don't settle. And I think Amy is a great example of that in that I think a lot of entrepreneurs and maybe maybe it's, you know, the Peter principle, as they call it, where like they think they're the hero and they, they, they feel threatened by people that are better than them at certain things.
Peter: But like, I remember having a conversation with U.S. employees where you're like, I want like the best CFO, I want the best marketing person. I don't want like, somebody who's good. I want somebody who's done it and can do it again and is really good. And I'm going to set my sights real high and I'm just going to go after until I get up.
Peter: And I think a lot of entrepreneurs like that, maybe they're insecure or maybe they're, you know, afraid of somebody outshining them. I don't I don't know what it is that. But sometimes they settle. And I think the fact that you don't settle allows you to build this incredible team around you. So anyways, that's just one of the things that I write.
Amy: Yeah. Thanks, Peter. I think Brian's being too kind and generous on this call. Actually, I have so much to learn, but I will say that having, like, hiring, hiring a team with you, that is that you think is phenomenal is so important. Not just because it creates good feelings, but also there has to be that trust. Trust there, right?
Amy: You have to be able to just take two to know like, okay, I don't have to worry about this department. They've got it. I can sleep at night, you know what I mean? And so, like, I really do think that having, you know, being able to have that level of trust and for me, knowing someone is has got my back and is going to help me when in areas that I'm weak in is really important.
Amy: For example, we're like looking at utilization numbers for a forecast this week, right? Tim has the CFO comes to me and he's like, how are you calculating this? And like dun a day. I could have totally taken offense to that and be like, I totally know what I'm talking about in the utilization, but I trust him and I trust that he's not going he's not doing anything to try to make me look bad.
Amy: He's trying to help me out. Right? And so we had this meeting two days ago and and they found a place where we were using internal ours for something and forgetting to allocate it. And it changed the utilization number and it made it like we figured it out. I would have never been able to do that if I had been siloed and and been like, I got this, I got this, you know, I'll tell you what my number is.
Amy: And so having that level of trust is a really important way to run the business, in my opinion.
Ryan: My advice to founders on this issue is if you want to sleep at night and you want to succeed, get over your ego and hire the people you need.
Peter: Talking a little bit about some of the the things you learned as you're as you're moving forward with with focus I'm curious like what are maybe some mistakes you made in the past, at simplest and maybe other companies that you you learned from and you're bringing to the table that you're super excited about implementing that focus.
Amy: Can I say I've been wrong once? I've done everything once, so then I can do it right.
Ryan: It's so true. There's a long list of things that we didn't do right? And like you said, Amy, I feel like we just went really hard and fast and we just tried a lot of things and we fell law at everything. And once you get it out of the way, you can be successful. And I feel that way about every area of business for me in tech or how I have felt in I failed in being an investor.
Ryan: I felt in real estate, I felt as an entrepreneur and I got it out of the way. I took my leggings and then was like, Here's our number two. And every time we've been very successful since on all of those things. But we embrace those and we learn from them. We made changes. I'm a different investor, I'm a different CEO.
Ryan: All of those things evolved because of those failures. But at simplest and before one of those lessons was I always thought we just need cells. And in and whatever it is, let's just sell. And it was such a that was one lesson I learned, Peter, which is you don't build a brand just selling everything. You don't differentiate, you don't win long term, you don't build the big companies selling everything.
Ryan: Another one I learned is just grow old, fast, fast, fast, fast, fast. It'll be okay. And that's what I thought early on. And I learned that there's a serious issue around cash flow. With that mentality. You can go out of business and make mistakes you have to understand the difference between profitability and growth, and you have to understand the correlation and the balance.
Ryan: Being a great operator is understanding your levers, both margin and revenue and your number one job as a CEO is making sure the cash is there so everyone else can do their job. If you build out that great team, you then have the luxury of making sure you have a balance sheet for them to do their jobs. And then they love working for you because you set a vision, you get out of their way and you make sure they have the money they need to succeed.
Ryan: And that's what great operators, CEOs do. But those two things early on that I miss totally the differentiation and the cash flow management, those are things I fell down and they hurt so bad that I learned how to manage them better.
Peter: Now I love that. I love how succinct it is too, because that is something that a friend of mine asked me the other day is like, What? What makes for a great founder that's worth backing as a venture investor? And we talk through a lot of different things. But ultimately it all boils down to what you talked about.
Peter: It's hiring the ability to hire an amazing team, the ability to fundraise and give them the cash they need to do their job and to hold the torch of the vision, right that so that there's good alignment with everybody and and I feel like if everybody can approach those in different ways, but if you can't check all three of those boxes, it's going to be a real slog.
Peter: As a venture backed CEO and maybe even be successful in other areas. But but I feel like, especially if you want to be venture backed, you really need those three things.
Amy: Peter I love posting. Find that that's so foundational to the success of the business. I really love that.
Jon: So can you talk about the deal now? Like what did it look like? Why did you invest?
Ryan: Peter Yeah, let's hear from Peter.
Peter: So, so we were just really excited, honestly, to back Ryan and Amy and Lance and the rest of the team. I think there is a certain level of magic that happens when a team has worked together through ups and downs and produced success consistently over time that has such a huge de-risking factor to an investment. And I also love the like as great, as simple as was and as great of an outcome signed to emphasis as it was.
Peter: And maybe you disagree, Ryan, but I feel like that this team like has infinitely more potential. And so I was excited to be able to be backing a team in a new platform where they could just really run at it and push it to the limit. So that was another reason. We've also like just talking a little more strategically.
Peter: We looked and invested in a number of the rev ops point solutions that are out there. And so this story and vision kind of creating a more unified approach to rev ops, which is a massive sector, really appealed to us and our team. And so, you know, there is a clear vision. It also played really well to, I think a lot of Ryan and Amy and the rest of the team strengths around.
Peter: We are sitting in this unique period of time where there have been a number of companies that raised a lot of money, very high valuations, not going to survive. And so those with cash will be in a very strong, dominant position to be able to take advantage either through acquisition or acquiring market share during this time period. And so that just seemed to really play towards the team's strengths given what they did at some place.
Peter: And so there were just a lot of these like pieces that kind of lined up from a team composition, from an industry composition and, and from like a timing position that got us really excited about about backing, backing around the naming what.
Ryan: Peter, thank you for saying that and thank you for backing us again. And once again we will we will have a great outcome for all of us. Let me, let me just say this. I love what you said about just the platform and us being able, being capable of more. I felt like when we were a part of emphasis and I was looking around at the global practice and it was north of 600 million, and I realized how big the opportunity was and I realized how talented my team is and what they're capable of.
Ryan: I knew deep down in my heart that we were capable of building a much, much bigger company. And I think that's what made it so that I just couldn't I'm one I'm an awful golfer and I couldn't stay on. I'm also not the kind of person that can sit on the couch very long. I knew that I needed to do something, but more than that, I knew in my heart that our team was capable of something much bigger and that if we did it right, you know, we're giving 1% to a foundation.
Ryan: We're going to be, you know, have a philanthropic element to what we're doing. I knew that if we did it right with the right team, we could have a really big impact on our industry, on Utah and on tech.
Jon: Does that make you happy?
Peter: Can you talk, Ryan a little bit more.
Jon: But that make you a B Corp then? Are you?
Ryan: We're not a B Corp, but that's something we've actually discussed is pursuing that.
Peter: Can you talk a little bit about the fundraising environment? So 2023 I feel like in some ways it was kind of like this last year because so many venture funds were like, We don't know what's happening with valuations. We don't want to take down rounds, markdowns, like all kinds of stuff. And so there's like this big pullback, especially if you were anything that wasn't I right, I like it was like a whole other thing.
Peter: But if you weren't I as like a core business if it was kind of a challenging fundraising environment. Right. Do you want to talk a little bit about what that what that process was like and things that you found that helped you be successful through that process that might be relevant to other founders?
Ryan: I think right now, particularly in this environment, being a repeat founder and is significant, I think it makes a really big difference. So first thing I want to say is if somebody looked at the round and saw the seed round and said, Man, it's really hard out there. I'm struggling. First thing I want to say to you is that just understand the circumstances are different.
Ryan: We're a little later in our entrepreneurial careers and not played a big part in it, so don't beat yourself up. The the second thing that I would say is, is we also wrote big checks ourself. So when you think about the round one, understand this is a third or fourth company for many of us. We've been returning money to investors since the beginning of our careers to we wrote, you know, as a founding team, $9 million in capital.
Ryan: Yeah we put a lot of money into the business. So if you're also thinking, Wow, this is really hard fundraising environment, realize that we wrote big checks ourself. So I just want to other entrepreneurs that are looking at the experience. One thing I don't want them to do is compare themselves and not have the facts on the and understand all the modalities to this we did.
Ryan: You may not be able to cut $9 million check and you may not have had three or four other ventures. Right. Those things played majorly in our favor. Then we had a list of investors that have had great outcomes with us and we almost exclusively raised from them. So the other thing to keep in mind is if you haven't already returned money to your investors and they've had a great return, then it might be a lot harder to raise money right now.
Ryan: So that's the other thing is we we did and many of our investors you know, if you go down the list, Todd Peterson was in simplest and Todd Peterson was a quick meeting and $1,000,000 jack Jeremy Andrus, Josh James, these great people who have been supportive of our ventures in the past, my earliest seed investor, my very first one who did it to check in picks before simplest he got agree about coming up business and a great return.
Ryan: He was a half hour call and a half a million dollar check but because he he had a huge return in two companies with us so and with him he seeded both. So when I say huge is because it really was like seed seed so so he was a half a million and his partner was a half a million.
Ryan: So million bucks came in in two half hour calls because. We had return money twice before. And so for entrepreneurs, I want you to hear this. If you return money to someone twice in in short span and got them a great return, when you call them, they're likely to be a lot more excited about your phone call to raise money.
Ryan: So the moral of the story is, is deliver for people. Don't give up on what you're doing. As simple as we were, you know, we were an integration platform and then we were a services business. I can't tell you how many people told me it wasn't the kind of business to raise venture capital for and you won't make it.
Ryan: I want to express my most sincere gratitude to all of those people because they gave me unbelievable fuel. The the at the end of the day, all of these things happened because we just like I said, we won by inches and we don't ever give up. So our fundraise went the way it did because of a lot of variables that happened years ago that gave us this opportunity.
Ryan: Now. So having said all that, it still hard. We still had to make more calls than we thought, and we collected a lot smaller checks than we expected from people and so that was a difficult part of this. Amy raised millions of herself independent of me, and that's what I mean by being a founder that distributes it out.
Ryan: You got to have powerhouses. You got to you got to realize, like Amy on her own would do great and what I do. And so having her on the team strengthens everyone.
Amy: I think that Ryan, I love that about, you know, putting that putting in it, putting away for future that in addition into the emotional bank account for for the future and being the person that is trustworthy that you can count on to protect your money just like you had your own. And I think that the other sources besides former investors that we got money from were former clients and former employees.
Amy: Like we did not go outside of our own network. And so what was really exciting to me is I'd had a lot of these former CEOs that I had I was telling you about who were like, I want to know what you're doing and wrote a check. And to me, that was very exciting to see that, you know, that, that when you never burn your bridges, when you treat people well, when you deliver on what you say you're going to deliver on, good things happen.
Ryan: Yeah. So what's interesting is for around this size, what makes it really, really unique is usually the majority is venture capital, right? It was actually not the majority. Like Amy said, we had dozens of employees. We had more than ten customers invest in the around and we had our leadership team and then we had our our angels ourselves and then our VCs.
Ryan: So it was a very unorthodox round, but I would rather have tons of customers and employees rounding out around than another venture capital group.
Peter: Yeah, well, and as a VC, I would rather have that on the cap table too. Right? Because that brings a certain level of commitment across.
Jon: The board that I think it's really interesting.
Peter: The the other thing I just want to pull out from something you said that I think is maybe a valuable piece of learning is your story of that, that investor that back to you at PCI Express and like that business was not a huge business or a massive, massive, you know, outcome. And that's okay because it you know, it teed up, I'm sure you learned an insane amount through that process and it teed up for where you are today.
Peter: And I think sometimes it can be easy to get sucked into this belief that like, the first company I have to build has to be like, Facebook has to be huge. And that's not necessarily the case, right? Like, yeah, it's okay to start small and start learning and proving. And you know, you can still have a very successful career, you know, exiting, building and exiting businesses as you go.
Ryan: Yeah, we didn't have any venture capital. There was only two angel investors and then the existing team, we all had an outcome that was good, but it was a single right. It was a single. It wasn't like it was crazy. But we were building a track record and we were building up to where we are today, and the business models every time have improved.
Ryan: So everything that we've run the business model has been better, the team has been better, we've been better capitalized. And so we really have gone from the bottom. We didn't come out with a bunch of, you know, venture capital and a big, big platform every time we've gotten bigger and better. But it's been gradual and, you know, 40 years old and it's been a while.
Ryan: It's taken time to get to this place.
Jon: But you're winning by inches and those wins add up or mile, whatever.
Ryan: That's it's been inches. No miles for me.
Jon: Yeah, well, it's good. Well, thank you guys for being on the the Venture Capital podcast. It's an amazing experience. Is there anything that our like our listeners can, like help you out with that?
Amy: No comment. Yeah, we're so broad, to be honest. Yeah, it was wonderful. If there is anything that we can help our listeners with though, I would love to leave my contact information if that's possible. So my I'm a very good texter. I'll text you back. My number is 9498130182 and I promise to text anyone back. Probably won't call them because I never get my calls.
Amy: So if you want to text me and then I'll call you, I just won't know. So but if there's anything that I can help any of your listeners with at all, we're always happy to offer what advice we have and we know that we have a lot to learn as well.
Jon: Well, awesome. Well, thank you guys for watching and we'll say most and thanks for joining. And and if you guys want to learn more about Ryan and Amy, their links will be in the show descriptions here on YouTube and on Apple and on Spotify.
Ryan: Thanks, guys, for having us. Appreciate it.
Amy: Thanks for having us.
Jon: And check out more cars.com for your Redbox. Well, not quite yet. What is the ideal cup point right now?
Ryan: 50 salespeople or greater?
Jon: I guess if 50 salespeople are greater, go check out forecast accounts.
