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Patrick Baynes is an American entrepreneur and marketing executive. He’s best known for working at LinkedIn (#162), as co-founder of PeopleLinx, and being CEO of Nerdwise. More than that, Patrick is a fantastic person and a real pleasure to learn from.
He and I cover a ton of really important lessons in business, startups, product management, biz dev partnerships, sales development and much more.
This was really fun and I learned a lot.
Check out NerdWise over at https://nerdwise.com
Connect with Patrick (tell him DiscoPosse sent you) on LinkedIn here: https://www.linkedin.com/in/baynes/
Transcription powered by HappyScribe
Welcome back, friends. This is the show. This is the DiscoPosse podcast and you are listening to what is about to be a really fantastic conversation with Patrick Baynes. He’s the founder of Nerdwise, serial co-founder and somebody with a really cool background. I say serial that he’s actually had successful launches in the past of startups. Great history and just somebody who I really enjoyed chatting with. Nerdwise really solves a neat problem about solving lead generation, creating SQLs, MQLs, is really driving value and getting better information and insight to make the journey towards pipeline friendlier and more effective. But if you’re not going to do that, then you can learn tons of startup lessons and how to build culture and product management. And this literally is just a sea of startup lessons. I could turn this one into a book. So big thanks to Patrick for being such a fantastic guest and conversationalist. I do have to, of course speaking of success, thank you all and the amazing sponsors that make this podcast successful and allow me to keep doing it and bringing it to the world. So I got to make sure that if you’ve got data out there, it is at risk. Unless of course you’re using the fine folks over at Veeam Software. And if you want to find out more, it’s super easy. Just go to vee.am/discoposse and you can find out everything you need for your data protection needs, whether it’s on premises whether it’s in the cloud. They really have so many cool things. I absolutely think you should check it out. And because for the first time in like a zillion years, I’m actually going to read the official line because I think they do have much more than just pure data protection. It’s being backup and replication. We’ve got new V11A, which is out. And this is everything when it comes from AWS as your Google cloud storage repository integration with Kubernetes and ultimately greater RTO for Nutanix. That’s right. If you run Nutanix, then you need to get saved. So go to vee.am/discoposse. Speaking of getting saved, save yourself getting your identity sold online by being better by using things like a VPN. I’m a user of ExpressVPN and I think it’s fantastic. So much so that I’m able to say that I think you should try too. And if you want to try it, it’s easy. Go to tryexpressvpn.com/discoposse. And hey, I also like coffee, so go diabolicalcoffee.com. That’s it. Here’s Patrick Baynes.
Welcome everybody. This is Patrick Baynes and you are listening to the Disco Posse podcast. Welcome to the show.
My start to the year is going so well because it’s really content specific to stuff that I’m digging deep into. You are doing some really fantastic stuff with the team at Nerdwise and we’re going to dive into that. But just with your history that led you up to Nerdwise, with the problems I see constantly in the industry, especially in the startup ecosystem where we’re just pouring over tool chain issues. We’ve got all these interconnected or semi connected things, and everybody thinks they’ve got the ideal solution, and they got 27 single panes of glass and none of it seems to fit. So I’m excited. We’re going to unpack. We’re going to break down some myths about the early stages of setting up effective marketing tool chains and much more. But if you don’t mind, for folks that are new to you, if you want to give a quick bio of yourself and introduce the Nerdwise story, sure.
Well, thank you, Eric, for having me again. And for those of you listening, thank you for listening. I am Patrick Bayne. So I’m an entrepreneur. Both kind of have an agency background and the fact that I’ve provided a lot of professional services in my career and then also a technology entrepreneur. I built multiple software products. I was an early employee at LinkedIn in 2007 and then built the first enterprise kind of employee optimization and management tool for LinkedIn. That was a company called People Links. And we were early, although at the time it didn’t feel early. But we started that company in 2009, and People Links was really my first run at entrepreneurship. Had a good about six years there before we sold the company, raised close to 10 million in venture capital. And yes, we started as a training organization teaching people how to use LinkedIn quickly learned what type of product we wanted to build for the market, and services are a great way to get to know customers and know their pain points and what opportunities there may be. So then we built the People Links platform. That is a whole story on its own.
And then the market had changed more than I realized after People Links in the sense that people talk a lot about the barriers to starting a company being less and less. And of course, now you can have a TikTok account and be an entrepreneur. And it’s like crazy. But when I started this business, I realized I could do something. Now with my skill set, I could build a company without having to raise money. At least I felt confident that I could. And over years, I proved that to be correct. And then this business has started with that was kind of the primary mission was, hey, let me get out of the I don’t even know if you call them golden handcuffs when it’s venture capital. More just like real handcuffs. When you raise money, your business really becomes not just a business anymore. It becomes an investment vehicle like you have shareholders and people that you are responsible to and you have to report to. And it’s a good thing for many people if you want to be, if you’re really building out a company for that exit. But I didn’t know what I was necessarily doing when I started Nerdwise other than I wanted to take a solution to market without needing outside funding.
We have been profitable now for seven years. We built a lead. We work with sales teams, so we do the broader category of sales enablement. But it’s really lead generation and lead scoring for sales teams based on all their different data that they have, their sales outreach, their website traffic, what may exist inside of a CRM. We can help kind of activate that data, generate leads from it and score it. So both sales qualified and marketing qualified leads. And as this world has changed in the last seven years, one of the things, in addition to just access to starting a company, whether that be like launching a quality website or finding talent freelancers and all these other things that are so much easier to do now than ever before, there’s a whole marketplace now of practitioners. Whether they be software developers, graphic designers, web developers, website developers, and they’re affordable. They’re all over the world. Ten years ago, if you were to outsource development to India, for example, it was a much more risky proposition. Now, if you find a decent group in India, they’ve got 10-20 years of cycles under them where they’ve been doing this stuff for a long time.
And in any case, it’s been exciting to be on the front of that. And it’s put us in a better position as a company to be able to build a business without needing outside funding. So that’s sort of the story of nerdwise. We may go out and raise money at some point now, but it’s been seven years working with a whole breadth of different industries and company sizes, but that’s a little bit about who I am.
That’s fantastic. And also I’ll say congratulations on just growth and success already. Not that taking on additional funding to do bigger growth. It’s neither a good nor a bad thing, depending on what your goal is doing that. But I like how you highlighted earlier that getting money from a bank is they’re going to charge you a nominal interest fee for giving you the money. Getting money from venture capital, they specifically are expecting an outsized return on their investment and they have a guiding hand in delivering that outsized return. There’s a very different requirements and responsibility in taking venture money. So whenever somebody gets a new funding round and everybody’s like, yeah, congratulations. Inside my mind, I’m like, hopefully, congratulations, there’s some weight that comes with it. Again, there’s great reasons why companies need that and people need that. But it’s not free money for sure.
Even that’s changed in the last ten years. Now there’s startups to fund startups and even Stripe. So we use Stripe as a payment processor. Stripe is offering Stripe capital to its users based on their revenues. And they’re my biggest investor right now. Yeah, it’s unbelievable what has changed.
And you look at, like in the last year, what’s going on with micro, acquire and stuff. I’ve been kind of deeply watching where that was, this idea of people just posting SAaS. And it’s a beautiful sort of two sided marketplace. And I’m like, it started off as just people buying websites, and then all of a sudden they’re doing an incredible amount of business by being this beautiful two sided broker to it. It’s a vastly different world. And this is moderate level investments. To do it, you don’t have to go in and be an accredited investor, which is there’s a lot of work to do that you can’t just walk in even if you suddenly win $500,000. You can’t just go and become a venture capital investor. There’s legal requirements to be accredited, and there’s this history. It’s a weird sort of whole scene, but I don’t want to disparage it because it’s a fantastic thing, but it’s an odd world. And like you said, it’s changing fast.
And I’ll tell you one of the most interesting things I’ve seen, and this has always been there, but it has shifted completely which is, if you talk to PE firms and VCs, except for maybe some of the unicorn VCs and some of the bigger ones, although I think it’s still true for them. They’re hunting harder and harder for these opportunities than ever before now. It used to be that you had to find them. You had to get in. You have to get the opportunity. Still, by no means it’s easy to go raise money, but they’re hiring multiple associates to go out and find these investments and compete for these investments. And the folks I talked to, we actually do lead gen for three PE firms right now, helping them get in front of established companies that are privately held and they want to be first in line. And they’ve always looked. But it used to be that again, I think the whole marketplace, the boom, all the money that’s poured into startups. But now it’s almost like they’ve got business development operations that are 10X what they were to go out and find these investments and to be the first in line.
Yeah, it’s funny. I used to work in a financial services firm in it. So I became really highly attuned to the investment world and then to come into the tech side and then get involved in startups. So now to really literally see it from inside the machine. And now PE has changed so much. We’ve got private equity. One of the funniest transaction I saw last year was for folks that have kids. You probably know his name is Blippi. So Blippi is a YouTube phenomenon. He’s somebody that created this personality for kids videos. And there’s another one called Cocomelon, and they just do, like, funny cartoons for kids. Well, they were picked up by a PE firm that’s backed by Blackstone, and it’s like they’re literally buying up YouTube channels. Now, I didn’t have that on my bingo card for 2021 for sure.
Don’t get started on NFTs.
Yeah, I’m still trying to figure out how to even approach what it is, let alone what’s coming out of it. That is a wild world.
Oh, my God.
But I think what’s really interesting and I like your personal story that being early with LinkedIn, then the opportunity as you went to found your own firm coming out of it, that story of being inside somebody that solves a very specific problem or set of problems. Like, obviously LinkedIn really, really grew in what they were attacking. It’s a standard name in the market. No one even questions right now. Like, there’s no LinkedIn killer because they came and went right Plaxo, etcetera, etcetera. There’s all sorts of folks that want to do it. But then you had this beautiful opportunity. Now it’s a beautiful marketplace, but then in itself is now the machine that needs to be fed with other ecosystems and partners. And so then coming out, you’ve got this inside view of, like, there’s still a problem to be solved, and now to have the confidence to go out and solve that. What was the thought process, as you said, I think I’ve got something I can build.
Well, hindsight is 2020. And so some of it around what we built and the fact that we were early and how we got there. It happened very organically, kind of day over day. But the real story, the real push, was a desire to grow at a rate that LinkedIn wasn’t offering me, Ironically, because LinkedIn was like this rocket ship. It was a deck of corn. But I mean, it was a unicorn 30 times over. And it was my first job out of College. And so when I started applying for other jobs inside the organization, I was competing against people from Google and Deloitte, going for these entry level marketing manager positions and account manager positions and things where it wasn’t anything that I interviewed really well. They took me through multiple interviews. And I mean, I was interviewing with people who were like, one guy was the former head of marketing at Yahoo who took over marketing at LinkedIn, and then the other guy was on The Apprentice show and then came to work at LinkedIn. And there’s just these people that had profiles that were beyond. And this was before social media. So these were just credentials.
And at the time, in any case, so I couldn’t compete. And I didn’t want to go kind of like horizontally. And I got forward sitting in my cube and felt like I want to do more with myself. I’m 23, 24, and I just knew I wanted to grow at a faster pace. So I called my uncle, who is an entrepreneur, and I told him, I think I want to leave and start my own company. And he said, well, hold on to the job for as long as you can because that’s your cash flow while you figure out what you want to do. And I tried that for about another month. And I was like, I just can’t do it. I was breaking hackysack records out outside of the office three times a day with a buddy of mine. It’s like just fun, but not fulfilling. And so I left. And then I was very fortunate. Not a lot of people were leaving LinkedIn at that time, but another person had just left, and we got connected. And he reached out to me within a week or two and said, hey, I’m starting this other business.
And we kind of interviewed. He hired me as a contractor to do a little bit of work. We were basically selling training on LinkedIn and companies. He had been selling LinkedIn corporate solutions he saw in the marketplace. People just had questions that weren’t part of their solution stack. And for me, it was a low risk opportunity. I’m 24, I don’t have a wife, kids, a house, a mortgage, all those things. And someone who’s in their late 30s, wife, kids, houses like, hey, I’m starting a company, offered me a decent paycheck. I said, sure, there’s no risk here. It aligns with what I want to do. And then two or three months later, he made me a co founder offer. I got a piece of the business I described as being a shotgun seat entrepreneur, where I just got to kind of come along for the ride and learn a tremendous amount. And it paid off. I mean, two or three years later, we were doing seven figures and really built a strong brand and attracted the right people to come work with us. And that’s where I built my version 1.0 of my entrepreneur toolkit skill set.
And then I left there for a similar reason. I was ready. The company was at that time starting to be run by really senior people from the outside. And I was ready to do my own thing again. So went from shotgun seat to driver seat and started Nerdwise.
So when you think of describing Nerdwise, this is always the fun part of either like, there’s product led startups and there are services consulting lead startups. They’re never that far apart because they’re generally paired up. When someone says they have a consulting startup, I say, you have a consulting team. It’s not a start up. You may be building products. A good example I found is a company called Heptio. And I referred to them all the time as a product startup. And everybody’s like, no, no, they’re consulting. They do consulting for people building Kubernetes, but they’re using their own products they’re building to create a machine framework for people. That will be the value they sell. And they did sell, and they got bought by VMware, and it was a big deal. And even when the acquisition happened, I said, watch out, this is going to be a competitive product play into this ecosystem. And everybody’s like, they’re a consulting team. I’m like, no one pays this much money for a consulting team. There were products, but they were consulting lead.
Yeah.
And then other ones are, look at the Maz story. Of course, it’s like, same thing. Consulting, build products. All of a sudden the products are assassin switch up. Now you’re a product led company.
Yeah. You can come at it from a lot of different angles. And when you know the problem that you’re solving or your customer and they say, do things that don’t scale, and sometimes that’s what you do to get to know the customer, get to know those opportunities. And then you realize, oh, hey, we could build an app for that. Or, hey, we’re putting a lot of time into this one process that applies to everybody. And if we just put together a little bit of a user experience and connect some data and add a few buttons, we can now provide a little bit better of a workflow and some reporting and some analytics versus it’s also always good to go look at the spreadsheets. What are you doing on a spreadsheet right now that shouldn’t be or doesn’t need to be in a spreadsheet? And there’s a million examples of startups that were literally just spreadsheets and then turned into these great products.
Well, I tell you, in Enterprise today, I tweeted the other day, it said, it’s like the Scooby Doo, like removing the mask, meme. And it said, what’s running finance today? And it’s like complex AI and machine learning solutions you pulled off. It just says, Microsoft Excel. Like that. Yeah, it’s amazing. When I were in a finance organization, I would have these incredible people that they were quants before they were called quants, but they were doing stuff. And, like, in It offices, we get calls like, hey, I need to restore this three and a half gigabyte Excel documents. Well, first of all, that’s terrifying because it goes beyond what Microsoft even built the bloody thing for. And then you think, what are you doing with this thing? They’re like, this is our modeling stuff. But there was no SAS alternative at the time. And it’s amazing that that stuff still today powers a ton of people’s backends you tableau. You do all these things, no matter how you slice it, someone’s going to just dump that down to Excel, then copy and paste it into PowerPoint to give a team presentation. Oh, no, it’s 22.
Why are we doing this now?
And when you think of the problem, what was the reason that Nerdwise you knew right away that this is a thing we can build? Because this is a question I get asked all the time.
Yeah, well, gosh, even before that, I feel like you have to just sort of be committed to what you’re doing and then know that you’re going to screw it up and you just got to change it quickly, right? In whatever sense that may be, whether it be that you chose the wrong target customer or the wrong value proposition, or you’re building a product and you say, hey, I think we’re going to build we just want to have some SAS element of our company. Sometimes you just have to start to then run into the first brick wall or the first road bump and go, oh, wait, it’s not that. It’s this right? For us, there was a lot of that. And that’s me being candid in the sense that I didn’t have some AHA moment other than I thought I had a bunch of them. And then through trial and error, you find the one that sticks. And for us, it was we were doing lead Gen services for our clients for a broad range of different customers. And there was one theme across all of them, which was in addition to generating the coveted sales qualified lead in the meeting, the appointment, whatever it was that they wanted, there was also this base of marketing qualified leads that were the folks who they were showing interest but not making, not converting.
They weren’t taking the next step. And we were pushing our clients were saying, hey, but there’s all these warmed up prospects, there’s all these people that have been on your website, we can track them, we see all this data, it’s a million ways to pull this data and show it. And we were putting it in a Google sheet and we’re sorting it, we’re scoring it. We pay someone to run all these crazy algorithms, so it scores, it updates, it does all these things. And then we’re trying to push them to do something with it and we’re creating little tactics to get value out of it, to kind of like squeeze some juice from the lemon or whatever. That was the moment we said, hey, wait, the problem here is that nobody wants to work from the spreadsheet. This doesn’t say I’m a lead. It says I’m data. And so people weren’t logging into it. They weren’t using it after some trial and error realized. And by the way, setting up those spreadsheets is a pain in the ass. I think we weren’t smart enough to do it. I have the instructions still on our blog to teach other people how to do it, but it was like 30 steps and something breaks and there’s algorithms and things in there.
We’re paying an outside contractor to help us put them together. So we said, okay, look, let’s build it around this first. Let’s build it around this lead scoring and some workflows and user experience. And it has been night and day. I mean, you can see the same data on a spreadsheet as on the application. And it’s like you want to do something with this, right? So that was the theme is we just saw this kind of opportunity across all of our clients, and we’re trying. We’re using all of our creativity and brute force to try to get something to happen with it. And then it was like we’re fighting this with the wrong tool. We need to go from square one and build something that has a better workflow. And that was the beginning of we went from not just Lead gen and services to a lead scoring application. And then we’re continuing to build more around that to help reactivate those leads and identify them and have kind of a big brain that can take all your data. So now we’re iterating on it. But it took a while to figure that out.
I like this. You’ve really moved into the very specific thing that the audience problem is always like, we pull all this data, there’s a lot of companies out there that are into slicing and dicing data, and then they move it up to tableau and they put it into Snowflake. They throw a hot spot in front of it. They do all this stuff. But then you’ve got you basically have marketing Ops and sales Ops, people that are doing, like you said, what you were doing with Excel. But every time you want to say, like, hey, what active opportunities or prospects do I have? What MQL do I have right now? Okay. I’ll go get Charles to run a report for you. There should be a place that’s live updating at least as close you can to it.
Yes. And also, if you think about the conversion rates on either the effort itself to generate a lead or on the amount of leads that you convert to sales, it’s small on both sides. Right. So you might get I don’t know, let’s just say if it’s sales outreach or something, 1-3% upfront positive meeting flow, and then on converting leads, people say numbers like 15 to 20, and those are high. If you’re converting 15-20% of your leads, that means 80 to 75 or 85% to 90% or whatever percent of your leads aren’t converting. But where are the ones that wanted to convert or that we’re ready to have a conversation? And then on the flip side, 1-2 or 3% conversions on a campaign, it’s still kind of a revolving door. So how do you get the most out of all you’re investing in Zoom info, you’re investing in outreach, you’re investing in all these people that are doing all this work. You got the CRM, they’re tracking it, they’re doing all this stuff, and you’re getting these numbers that are great if they’re working and it’s driving up. But then you just have to go on to the next push. The next push, the more people. More people. So how do you just get more out of all of this investment, time and technologies and everything? That’s kind of where we’re playing.
It’s funny when I’d love to actually find anecdotal ways or analogous ways to show this. It’s really like imagine that there’s a Starbucks or like coffee shop that’s next to a Starbucks. So they’ve got similar keywords. They’ve got similar attractiveness audiences is adjacent. And you’ve got 100 people that walk by the front door or 1000 people that walk by the front door, and then 100 of them go in. But out of that, 100 of them, 80 of them walk all the way up to the cash and then go, Actually, I’m not going to get a coffee today. The numbers are horrifying. We’re still in business anywhere.
Well, I love the challenge of putting an analogy around that, too. They call that storytelling, but that’s great. I’m going to think about that and make a powerpoint slide get back to you on that one.
But then to this idea that we’re just repeating that machine and it’s like I hear all the time, like, SDR is 120 dials a day. If you’re in ten years into being an SDR, what does your day look like? It’s 120 dials. It doesn’t get better.
What do you look like ten years into being an SDR. Probably look a little bit like me. But yeah, SDR is a tough role. People can do that for 5-10 years. But yes, still, the point is valid and that you’re putting in all this effort, you’re getting all this activity, and what more can you get out of it before you just move on to the next thing?
Now, when it came to qualifying, there’s a very human aspect to qualification of leads. And this is what I want to dig in with you. Right. Because I work in an organization and I hear SQL/MQL all the time. I wish that for one thing, can I just throw my anger at the acronyms of the world, the fact that we’re using data and then we call them SQLs. And like, what do you store your SQLs in a database? What kind of database you stored in? Oh, yeah, that acronym was a little bit overused. But we’ve got SQLs, MQLs, you’ve got all these things. And so on the marketing side, we say, like, good lead, my MQL. Right. Then it gets to the sales side of it, and then most of them will just out into the air they go. Hey never get touched. And there’s somebody that says, well, it wasn’t really a good MQL. So that’s the SQL process. But that seems very, does not seem very systematic, that layer. How do you figure out what goes from MQL to SQL?
Yeah, it’s a very good question. So I see things as and there’s a graphic that I’m picturing where it’s like marketing funnel into sales pipeline. Right. And it’s horizontally versus vertically. But if you think about the stages of a marketing funnel and they’re a little different, you can label them however you want. But I think anything in the marketing funnel that hasn’t, like, gone where it goes, like, say, awareness from interest to consideration and then opportunity. You know, awareness isn’t enough. Right. Someone saw your ad, they saw your email. That’s not enough to be a marketing qualified lead. Interest, you could. Now it depends, maybe how many you have. You don’t want to be trying to go after everybody. But if they go to the point of, like, where you think they’re showing some interest to real consideration. And consideration may mean how much time on site, how many times did they visit your site? How much did they go back to an email of yours? More than once. Right. You’re now in the consideration stage. So that’s where I would say, is it true if you’re going to say to your sales team that these are marketing qualified leads, they better not be just like reading your email or saw an ad and clicked on some link bait.
They should be somewhere further down that marketing funnel. Now, a sales qualified lead and from my perspective, has to be in the sales pipeline. And that means that they took a meeting. If they’ve taken a meeting or they said yes to a meeting and maybe didn’t show or they signed up for a demo or requested information or something that is now and maybe not requesting information, but something that has actually said yes, I would like to meet with you. And they’ve gone into a sales pipeline like a CRM. They’ve been assigned to somebody, anything along those lines. That’s a sales qualified lead because that’s somebody that stepped on the showroom floor and said, I want to take this thing for a test drive. And that’s the distinction that I would make.
Now, when it comes to your team going in, and obviously every organization, they’ve got their preferences, a platform or they’ve got some other they got onto AppSumo, and there’s a really sweet deal. There’s always like a bunch of reasons why we choose any particular product. What’s your approach? When you go to an organization and say, we’re going to help you out, how much is their products fit into your process, how much of it is. I would suggest you go towards this other product because it may do you better. I’m curious what that flow looks like.
Yeah. So it’s interesting because we have two parts of our solution, a prospecting system. And that’s a system that requires not just technology, but it requires a true plan. Then you’ve got to have some data and some resources that aren’t necessarily even technology. Like you do need access to prospect lists, for example, or you’ve got to have something like that going on where you need it to do your prospecting. Then you do need automation solutions, and then you do need some resources and things around enablement. But the way that we’ve approached it is that we believe that we’ve selected what are the best in class, best of breed solutions for a turnkey prospecting system. Meaning if you don’t have anything or if you have something that’s maybe not performing that well or whatever the case may be that, hey, don’t worry about it. Let’s not go in and try to tweak a broken engine. Just let’s go. Apples to apples. You can either run what you ran or compare us to what your past performance. I mean, we have tools that we’ve selected that we think are best in class. Now that said, I know there’s a lot of great tools out there.
I like to tell our clients that we are tool agnostic and I want to be agnostic because what I really care about using list as an example is I just want quality data, quality prospect lists, wherever it comes from. Your internal, your CRM, your Zoom info, your email list. However, as long as it’s high quality. If it’s an outreach tool, what I care about is deliverability. Is the tool getting the right open rates, response rates, engagement rates. So it’s really got to be performance based. Now, as an entrepreneur and from a long term perspective, I would like us to be able to have and now I was talking about the prospecting system. From a SAAS perspective, I would like us to have an ecosystem that our platform. You can export your data from Salesforce or from outreach and you can upload it into the lead scoring thing and we’ll score it and we’ll do all that stuff. But we haven’t built integrations with every platform yet. And so on the system side, we have to come ready with everything that’s necessary that we know is no to low risk in terms of how it’s going to play out for our clients because nobody likes spinning their wheels and spending money and not getting returns.
So we have a set of suite of things that come included with our plan. Now on the lead scoring application, I would love for that to be part of. And we are in a couple of different integration partners or in a couple of different like, app marketplaces for different tools. But that’s something I want to build out and have it so you can turn on lead scoring for your Marketo account in a really turnkey way and then have those marketing, not just lead scoring, but then the workflow and the enablement around it and all that. So we have it. We want to be tool agnostic. I love discovering new tools through our clients and finding out that, hey, they’re using something they really like and it seems to be working like got my antenna up. And then from a platform perspective, it’s just about roadmap and prioritization and what we can do first. And selfishly, the things that are on the roadmap, I’m focused more on our existing customers than acquisition. Like what’s the next thing that my customers are going to get the most value out of? And then if we want to hit the gas and do some things from a marketing perspective, try to build that out.
Well it’s funny that you say that, this idea of going to a customer and then finding out what tools are out in the ecosystem. There’s lots of on my Nerd crew, we always had it was if this then that was the first one that was like doing all your goofy home automation. Then I started using it for some enterprise automation, which was kind of neat. And then I got turned on to Zapier, and I was like, okay, this obviously solves a bit of problem. And I had a couple of different folks on the podcast, and they both were like, yeah, we were deeply with Integromat. I’m like, never heard of Integromat. Then I find that this massive enterprise ecosystem wrapped around Integromat. I’m like, you don’t know what you don’t know. These are huge platforms that I had never seen. And now that I get exposed to, I’m like, oh, okay. Now, here’s the interplay and the interoperability opportunity, which is kind of wild, but that’s tough as an entrepreneur. Especially, you’ve got to be sort of ruthlessly pragmatic on how much you invest in partner integrations, because now you’re beholden to their mobile changing API and integration platforms.
Like, I used Go high level for something, and all of a sudden Zapier, they’re like, we’re building our own things, so we’re not doing a Zapier thing anymore. I’m like, oh, no.
I’ve learned that lesson the hard way. And best advice there is, if you’re going to build it, get close with the partner in one way or another, get in. Don’t just do it. Yes, you can tap into the API and start building, but reach out to the CEO first. Reach out to their head of product, reach out. They’ll tell you, if you email customer service, they’ll connect you with their head of integrations or whoever is running their API and make sure that you’re aligned with their ecosystem and that there’s no red flags. And ask them straight up say, hey, look, this is what we’re thinking about building. Is this good? Because it may be that they say that’s actually something kind of where we want to build, or we’re looking for partners more in this area so you can get the plug pulled pretty quick on you if you don’t build a close relationship and truly treat it like it’s a partnership.
Yeah. It’s funny. Whenever a product would come to me as a tech buyer and influencer inside my company, I would always ask them, like, sort of the same stock set of questions. And everyone was always like, do you have a well documented, publicly accessible restful API? I have no plans of consuming your products through a restful API. But what it tells me is that you are invested in external integration, which means that my other software could more easily potentially be linked in with this or put together with this. So it was to this degree of phoning the customer rep and saying, I worked with one company and they’re like, we’ve got a C# SDK. And, like, I’m out because I’ll never write a C# integration to map my data to your tool. So I’m going to have to look elsewhere. It was an interesting lesson in thinking about future proofing my investment, and I think that’s where the partnership ecosystem is pretty heavy in needing that.
Yeah. And even if you built a relationship, even if the ecosystem changes, they’ll be nicer to you. And give you some time, some heads up, some access. Hey, we’re rolling this out, but you got 90 days to adapt or whatever it may be. So you got to build that relationship. And like I said, I learned that one the hard way. Yeah.
When it becomes a point, like you said, where it could be that they’re suddenly going like, we’re about to introduce a similar service to what you’ve got. I used to always love it when you watch Amazon at the AWS reinvent. And on Day One, it’s always like these big keynotes. And like, we’re big handshake. It’s like that when the charity hands you the giant check, you’re like, we’re super proud of our integration. Here’s an amazing customer story, and I’m like, wait for it. Day Two keynote is Amazon announcing that they just launched this exact service that does what the day one keynote does. Like, oh, no, that’s tough news. That wasn’t the way you wanted to find out.
Yeah.
Now, when it came to product management and understanding the consultative experience, how do you weigh where you have to like, is this a solution needed? And then productizing it, what comes first in the chicken and egg of that scenario?
Well, I think at some point you have to have those, like, concentric circles that are what’s important in the middle. What are you really building in the middle? And then what do you think goes around? What are the features that make that kind of core feature pop that aren’t necessarily core, but they do further the user experience, the use cases, and so forth. And so I think that’s part of it. And you have to have that core thing and do it well. People would say it’d be great at that one thing. So I feel like that’s key for us, we’re really focused on productivity, and the lead scoring feature is one of those things. And then it’s like, okay, if we can be really great at lead scoring, that will drive massive productivity, and then what are those features that are going to actually take those score leads and make people more productive? What are the things that they need to take action on those workflows? And so you need some of that. I think it’s just call your true north. But the one thing you want to be good at, and then what do you build around that to support it?
And then you can become big. Maybe I can use all the other companies as examples. But if you can win that one thing, you kind of get the right to start to expand your use cases and what customers you serve and how you want to go from there. But you’ve got to get that foothold. And if you don’t have that priority, you’re going to be spread too thin in many ways. In all the ways, yeah.
And monetarily it’s the biggest punishment for that stuff. Right. Is just the capital investment to stand up a new system or service and then find that it’s not going to be generating revenue. And you’re like, oh boy, that’s a tough one. Now, here’s the interesting thing. We’ve talked a lot about the evolving world.
Right.
As you go into each startup, it’s like fundamentally different from when you started the previous. What about the idea of sort of APIs are forever and clean deprecation? Like, have you ever had to reach a point of the age of your platform or feature where you have to really think, is it safe with customers using it, that I need to just get rid of this thing? I’m always curious, the founder, where you approach that moment.
I think when you’re building products in general, you want to be sovereign with your product. You want it to be that product can be used regardless of an integration or not, and create real value for the client and the integrations can add to that value. Now, it’s very attractive to shortcut that and go right to an integration as a core feature, because now you’ve got all the data and you can just plug in workflows and things can get going really quick. Like you can turn the lights on really fast. But I think that’s the biggest piece is if you’re sovereign, if you’ve got real value, then you’re not taking on as much risk when you build out through integration. And so use integrations to make your product better, to enhance it, to help serve your customers and serve them in more and better ways. But also that if for some reason the lights go out on that integration, that it’s not a showstopper. To our point around at the end of the day, everything’s an Excel file, have that ability to get around the integration. If the data flow stops, at least you can have another way that the customer can get their data into your platform or out of it or whatever it may be. So there’s some of that. But I think that’s the biggest thing is don’t build around and the integration is your core thing.
Yeah. And that’s always a tough thing when you think of scaling the platform is where because you then have a data investment, you’ve got other implications that come by bringing that, bring the data closer to sort of own and be more sovereign with it. It’s not a one to one of us. Just bring it over here. Like we’re presenting a dashboard of external data versus bringing the data in as a different responsibility, especially on SAS. And you’ve got a lot of things to account for on the back end, for running and operating that environment.
Yeah, for sure.
There’s always the tough one to ask, and we give it the safest answer. You can. Have you ever had to fire a customer?
Oh, yeah, sure. But I do it. Absolutely. And I do it with so much love. You know, that can be I can give you scenarios where I’ve let a customer go, but I do it in a way. Like, I try to do it the right way. But the bigger thing that comes to mind is I try not to let them into the clubhouse. If my gut tells me that this is going to be a challenging individual, a challenging company, or that because of whatever element, I’m sensing that this just isn’t going to work out, I’ll pull out the special pricing sheet or have some other things up front. I said to somebody, I said, this guy was just challenging me and challenging me. And I said, you know what? I’m going to respectfully pass on this opportunity. And he was like, you’re giving up that easy? And something I said, well, and to be honest, yes, I am giving up that easy. This conversation has not been pleasant for me, and I don’t think that I would want to pass this on to members of my team, but I appreciate that people hate that, and I don’t like doing it either.
I don’t want to be on those conversations, but hiring a customer, yeah, I’ve done it. I guess I shouldn’t say that it’s easy, but you can wrap it in service and just tell them like, hey, this isn’t working out. And we tried everything, and I think it would be best if we just call it here. But there’s ways to do it with service first. And then I’ve had some of those customers try to come back as well. And it’s a $5,000 set up fee and an annual commitment if you want to come back.
Yeah, there’s a toll at the exit and then a toll at the reentry.
You want it that bad. But if somebody’s got it. And you know what I lost in my early days, I want to say three employees, definitely two to one customer. And the customer was so important to us, literally year two or year three. And they were only like three or $4,000 a month. But it was a big customer for us and meaningful revenues at that time. And I would just assign hire somebody just on that one account, like 10 hours a week, whatever it was, working on their service, working with the admin, and it was just an absolute shit show. But yeah, it took losing the second team member before I realized probably not worth it.
Yeah, it’s tough because I forget who did the Ted Talk, and she has a great book called on being wrong and this idea of sort of that Wiley Coyote that we make the decision that we’ve made a mistake after we’re well off the cliff. And it’s really tough to do that, especially when we’re talking about employee. You’re affecting the core of your company by retaining a customer. And it’s a tough thing as a founder and CEO to have to weigh, but it’s huge respect because I have not had to face that myself. And I hear the stories all the time, and they go either way. But you still bear the burden of that decision.
Yeah, I hear you. It hasn’t happened that often, but the cost far outweighs the reward and the morale of one teammate. And then for them to have to carry that and dread their job. I don’t want anybody I tell my team I want them at 60% to 70% capacity. And if they don’t feel good, don’t force it. It’s not about the grind. It’s just going the right direction. We do our best. And yeah, you don’t want anybody dreading to go to work or dreading to talk to a customer.
And I think this is interesting, too. We talked about the ethos, and the company is a representative of its founders. Right. Like, it’s a mirror of them for a while. We talk about the first ten hires, the most important because they will hire the next hundred. You’ve got a very mindful approach to the way you want to deal with customers, which I would imagine then translates to who you hire. And you just said like 60-70%. The most common sort of founder thing is you’re like 2015 Gary Vee. You’re grinding or you’re dying. Sleep is for the weak. I’ve been in too many startup environments seeing that you’re like, oh, this is not good. I like that you’ve come with it like, hey, obviously you don’t need to be at zero, but you don’t need to be at 120.
Yeah, well, culture is interesting for us because we started remote, or I should say we started in an office for a year or two. And then we went remote. And we’ve been in business a little over seven years now. So the last five have been all remote. And we went from two people to 15-16 now. And now I’m finding all the things that I’m missing in our culture that aren’t there, where I want to be around my team. I want to get to know them. I want to hear what they’re thinking or what’s going on between the Zoom calls. Right. I had a friend. This is just a silly thing, but it’s just a very clear example. A friend and I are texting the other day and he’s like, oh, my Fire remote from my TV stopped working. So we got to take a trip to Walmart to go buy a new one. And I was like, dude, there’s an app for that. You can download the Fire app on your phone and just do that. It’s like, oh, my gosh, perfect. I never would have thought of that. How many of those situations are happening in my organization right now scared the shit out of me for somebody’s doing something and there’s like, someone else who there’s an app for that, or they found another solution or even just the fact that you get to know somebody on a personal level and then the conversation and the working experience is so much more pleasurable.
And I hate that we don’t have this. Actually, I’m opening a lounge, not an office. In two months, they’re renovating the space for us in downtown Philly. And it’s like my team to come a couple of days a week, once a quarter. However often they want to attract new employees, but like a place to actually hang out, work. Feel like I want to go there because it’s awesome, not because it’s cubicles and desks. By the way, if you want to get into office space, commercial real estate, now is a fantastic time.
Lots of deals. That’s not a good time to be an RET investor, but good golly. If you’re looking to get space, it’s opportune.
Yeah. That’s where my head was at. And I found a place that was a yoga studio for 20 years, and they were empty for a year and a half now. And they offered to renovate the whole thing for us and make it nice. But I’m doing it just because I just want even if it’s for a day, a quarter with half of my team. I just want to hang out and get to know them and have those conversations go for a walk. I’m missing that. I think that’s an important part of culture that you don’t get when you’re remote. Any team with any team.
Yeah. It’s funny. When I first became a remote staff, I worked for a company that got hired in Vancouver, BC. And I was living there, and so it was, like, totally normal. And then I had to move back to Toronto, Ontario. So I’m moving across the country, different time zone. But I’d been there for three years, and this is pretty remote work. Before, it was a thing, really. It was really tough to get it. And then when I said I got to move. So I guess we got to figure out what to do to back fill my position. And my manager was really great. He says, well, let’s just order business cards with your new address on it. That’s it. You’ll work remotely. The data center was in Vancouver. Everything that the team’s in Vancouver, different time zone, but your core to the ecosystem. So there was this sunk cost and sunk culture of me fitting in. But if I had gone to them that day and said, I want to do this job and I’m based in Toronto, I wouldn’t have got the second interview. Well, now, obviously, none of us have a choice. Like, we are predominantly remote, but it’s like that just like seeing the look on someone’s face when they’re working on a problem and knowing you’re like, I’ve walked by Joanne’s desk three times in the hour and she looks like she’s really struggling. You just can pop over and say, hey, what’s up? You’re cool? You want to grab a coffee? Pete’s looking like he’s falling asleep at his desk.
Like little things that you can high five once in a while.
Just some kind of like that real water cooler, as they’d call it, interaction. And yeah, I miss it.
That’s how I made it. Some of my best friends came through work and that’s an important source of socializing and meeting people and creating connections. I’m excited to get back to that for sure.
Yeah. Like the pre-planned, like, happy hour 5 o’clock on Friday. No, I don’t want to open a beer over Zoom while sitting in my bedroom because that’s my home office. That’s weird to me.
Yeah. As the day goes on and on, I start turning camera off, headphones on. Like I can’t be on the screen anymore and definitely not to socialize. I took my Zoom battery for the day. I’m done.
Yeah. And it’s funny, I’d actually enjoy seeing more studies on this stuff because it is cognitively tiring to be staring. Like if you’re in a meeting room and there’s twelve people, you’re consciously aware of how you’re sitting, but you can sort of swing around, it’s not a big deal. And you relax. And sometimes I goof around, I touch, I play with cards, you can check your phone here and there, but when you’re on camera, you see how you look and it’s hard to escape that. So you find yourself looking at yourself and like, oh, I need a haircut. And like, stuff you would never think about because you’re staring at your own bloody face as part of the experience.
Yeah. It’s way too immersive in the sense that even if I’m watching TV, I can go do something else, right. Like I can go have a snack, look the other direction, be disengaged. I’m stuck. We’re stuck. And then you do this 6 hours a day. 5 hours a day.
Yeah. Like, you feel guilty if I shut my camera off to reach around to grab something off my shelf. Because if somebody sees me looking away from the camera, it’s as if I’m not paying attention. Like, turning the camera off isn’t not paying attention, but it’s a weird experience for sure. Now, one thing I’d love to dig in on is the give back to the ecosystem because I know that you’re also an advisor. You’re working with other folks in sort of the startup community and what draws you towards doing that. And I’m curious if that helped you in the early days when you started up People Links and when you started up Nerdwise, if that was part of what got you going.
Yeah, it’s fun. It’s fun when you’ve learned how to do a thing and you can share with others, or it’s fun when you can save someone. You can show them the shortcut and save them the headache. So I enjoyed. Sometimes I do wish I could get paid to do it because you do here and there. But if I’m selling my time, it’s a misuse of my time when I’ve got a responsibility to my company and my team and everything. So I just don’t do a lot of paid engagements outside of work. But I love it. I would love to be able to work with entrepreneurs and startups all day. It’s fun. And yeah, it was big for me. One of the things that actually I thought about recently was how much of it. And I’m going to use just the expletive version just to paint a picture. But I want to say I was like a little shit in the sense that when I was starting up at People Links, I thought I was hot shit. I was like, man, we got this great company, all this we’re cooking, and I just had my ego was like I could barely walk through a door.
I felt like. But I was so happy and so proud and everything was going great. And there were so many talented entrepreneurs and investors and people that were around the company and that came to work with us. The most humbling thought the other day is like, they all knew I didn’t know what the fuck I was doing. And they were so nice. They were so nice people, any one of them. And they probably saw, yeah, the part is in the right place and potential and did good work and everything was fine. But I realized now in the last seven years, being going from that shotgun seat to the driver’s seat, all the things I really didn’t know and how much other people were carrying me and that I wasn’t successful at that point. Right. I was very fortunate and we had a great run and everything was fun. So I’m humbled in that sense that I go back and I still want to almost like, pull a bunch of those people aside and go, I just want to thank you for when I was like 25 to 30 that you were knowing that I really didn’t have my shit together in the sense that I hadn’t earned the real merit badges.
I hadn’t really hadn’t earned it. I got lucky and I took all the right chances, did the right things. Everything’s great. I don’t feel bad about any of it. So I think it’s important that’s just important to give back or help other people. But it’s fun. I think they had fun helping me. It’s fun to see people in their earlier stages. But if I had said to you seven or ten years ago that I was advising other entrepreneurs, I feel bad about the advice I might have been giving them because I was so lucky. I was like, everything’s great. But now I’m much more equipped. I’ve actually had to learn all the unsexy hard things about building a company on my own. And through that, you do learn a tremendous amount and you can help others much easier. And I think it’s one of the most important things to do in any practice business. Sports, dancing, making music, whatever it is that you want to do. Go talk to somebody who’s done it before. They can show you the way. They can tell you how they did it. They can tell you what’s important to know.
And that’s going to save you a whole lot of time. Heartache, headache. And so if I can help somebody, I’m always happy to do it.
The communities of practice is something that like as an entrepreneur, there’s not that many. Like, there’s EO. So the entrepreneur organization, which actually has come up a ton, I’ve had a ton of folks on the podcast and they’re members of EO. But I think the floor is like 1 million in revenue, and there was other employee counts, floor and ceilings. They’ve got they’re very targeted of like, this is the phase of the company where we can all be very helpful to each other.
Yeah.
And sometimes they’re second time founders and they stay in because they’re back at that phase again. So they love that range of growth and sharing. But like you said, it’s like asking a guy that’s in a train with no driver, like, hey, how do you drive a train? It’s easy. Just keep going. It works. You’re like, no, you don’t understand. You haven’t hit a bump yet.
And for me, it’s really almost like if you invited me to come and work on a Lego construction that you’re building or an Erector set or some cool project that you’re like, hey, want to give me a hand with this thing? I’m like, awesome, that sounds fun. Like, I want to build stuff. I want to fix things. I want to ideate and be creative and roll up my sleeves. I love that stuff. So it’s fun to work with people, especially when you can have sometimes you need an outside view, right. Because you see everything with kind of near term or with what’s in front of you. And somebody can come in from the outside and they can go, hey, you should consider pitching this way, or you should consider positioning yourself this way. Or you mean to tell me that you can identify things and you’re like.
Yeah, that outside in. Because I remember even in corporate, that was the advantage to going to outside contractors, not because they’re smarter or because they’re better. If they come in with no an empty whiteboard or I’m old enough, I can say it was an empty blackboard back then. So they are a clean slate. They come in. They’ve got no predispositions, no prejudices about the decision they’re about to advise you on. They listen to the evidence and they’re like Supreme Court judges for a business decision. They’re just like, based on the evidence presented to me, I would do this and quite often you’re like, I guess you’re like, what? I can’t believe they would say that. And then when you stop and you sort of take that in for a while, like the kid from the outside is right, we’ve been looking at this way too hard. We should just rip this piece out and refactor like, oh, right. And that is a good advantage to that outside view. If you were to give the advice to somebody saying, I think I got a problem that I can solve, and I’m thinking about putting a business together around it.
What’s the first thing you do when you take them aside to tell them what they’re about to face?
You could attack it from so many angles. But the best thing I would maybe think to say is just get started. And when you get started, pick a vessel brand, which is a term I learned where it could be anything. So if you’re going to build a new headlight, don’t call it like you think you’re going to build the greatest headlight for cars. Maybe don’t call it headlight because maybe eventually it’s tail lights, maybe it’s interior lights. Maybe you find out that it’s like some water resistant technology that applies to planes. And the lights are called something completely different. So don’t get too stuck on your product. And I think sometimes people tend to start with the name of their product or something very germane to it. I’d say start with a vessel brand where you’ve got flexibility to move about and then plan for those learnings like, hey, this is my number one hypothesis of what I’m going to do. And then if that doesn’t work, maybe then it will mean I can do this or start to have some of that mapped out. But I would say just start and start learning. And again, the barriers to getting started are lesser than ever before.
So you can get a cute vessel brand of some kind, go to brandbucket.com and play around and see some fun names and get some ideas and go buy some other, more generic version of it. Get it going and just start learning. Because ultimately time is like it’s your friend and your enemy when you’re in a startup. But it’s your friend in the sense that if you start today, it’s like the old Chinese proverb, when is the best time to plant a tree? It was 20 years ago. If you want to have your own company, start it now. In two or three years from now, you’ll know what it’s like to try and what you learned. And you’ll be much better equipped than you were if you just stay on that blackboard/whiteboard phase and keep working on it.
You think of the tools available today to start a company. The buried entry is so low now. It’s fantastic.
Yeah. I might have gone on microacquire seven years ago and just bought something for 100 grand versus..
Yeah, the build versus buy or build then or buy then build. Like, there’s a lot of ways. And the $100 startup, I think someone needs to do $1,000, $5,000 and a $20,000 version of that because there’s lots of things you can do and you could buy a mommy blog. And it sounds like a pejorative when I say it that way. But like a blog with an audience aimed at folks that are health conscious and they’re businesses, a YouTuber is a business. I’m really excited by what’s available to people today. I think that the job numbers, when we hear them from the government, it’s gone to me because I don’t think that means as much as it used to, because I talk more and more to founders and they’re not shown up in the numbers somewhere. And that’s it is good that it’s happening. But it’s also I’m worried about the lack of measurement of it to open people’s eyes to what’s potential.
Yeah, no, you’re right. I don’t think that the employment numbers include all the TikTok influencer, Instagram influencers. There’s a lot of people that’s their side hustle and now that’s their main source of income. I have two friends who make their living through Instagram. One does custom swimwear for women, and she posts it, gets bought immediately in ships. Another one does glass. You want any type of glass pieces, custom art. He’ll make something, post it, sell it. Another guy is actually free. Another one is it makes jewelry. Same thing.
It’s amazing.
And it’s just Instagram. They didn’t ever got a website. They’re not e-commerce companies, sophisticated. It’s just you make something great. Someone wears it, posts it, Tags it, shares it.
It’s amazing. It’s amazing. Well, and I tell you, this has been fantastic. And thanks for spending the time today, Patrick. For folks that do want to get in, and I tell you, they should. So nerdwise.com, of course, is the main spot to go your testimonials, tell the strong story. This is something that’s really, really good. And I love that feedback loop that you’re able to bring. Like, I see it all the time, the gap between leads coming in and lead generation and successful sales organizations executing on it. It’s a chasm that people don’t realize can be crossed. And so I hope to generate some business for you myself with a few of the folks that I advise and I highly recommend people do go check it out. And your videos are great as well. It’s really good. I saw a couple of your previous interviews as well, and I liked that you’re very open book on your previous experiences. You’ve made it through the phase. You didn’t cut your hair this time around. So this is always funny. I talk about the founder the hair story. It’s generally the first time found the employee clean cut gets the hoodie, then they leave there, then they found their own company so they got a new hoodie, slightly longer hair, maybe a little bit more dark around the eyes because it’s hard to live your life every day working hard.
Then they successfully exit hair grows. They are now angel investor, then the next founding they tend to cut the hair again. So I like that you’ve held on and stayed long hair all the way through.
Yeah, I appreciate it. I can still remember we used to work in legal and financial services. The first time I had the guts to wear jeans and boat shoes and tuck in a button down. That was edgy. You could just tell people like who’s this? But the world has changed so much and I appreciate the opportunity here. It’s been nice chatting with you.
Yeah, it’s been a lot of fun. Excellent. And also, if people want to connect another way, what’s the best way if they wanted to reach out and get in contact with you, Patrick?
LinkedIn is good. Add me on LinkedIn comment that it came through here. Otherwise I probably will ignore it because you get all the stuff. But if you say, hey, I enjoyed the show or you just want to shoot me an email, please have at it.
Awesome. Yeah, I want to actually create I want to go and get an explainer video done to send to people telling them why they shouldn’t ask me about selling explainer videos to me. Because it’s drive me nuts. I get about four of them a week. God bless them. I guess it’s a big ecosystem nowadays, but, yeah, the amount of overuse of LinkedIn as a new outreach mechanism. It’s natural, but, yeah, it’s hard to get the wheat from the chaff, so to speak. All right, great. Patrick, thank you very much. It’s been a real pleasure.
Thanks, Eric.
