Kyle Racki, the co-founder and CEO of Proposify, Kyle helps thousands of businesses remove the bottleneck of proposals and get more visibility into the close.
In episode 15, Kyle lays out the framework of the job of a CEO and some of the important pieces they’re faced with including: creating vision and auditing values, building out the executive team (title politics are real), hiring leadership contextually, having difficult conversations and holding people accountable.
I just wanna touch on before I get into that, what you just said was, founders are, are notoriously bad at listening to advice. People in general don't listen to advice, right? People will ask you, Hey, what do you think of this? And if you don't give them the answer they want, then they'll just, you know, do what they're gonna do anyway. Founders are 10 times worse because in order to be a founder, you have to naturally be somebody who doesn't listen to the status quo, who challenges the status quo, who wants to do it their way. It's a lot of these things you come back to later and you go, ah, I should've listened to that, but you're not going to.
Today’s guest is Kyle Racki, the co-founder and CEO of Proposify, Kyle helps thousands of businesses remove the bottleneck of proposals and get more visibility into the close.
In true serial entrepreneur form, Kyle co-host his own podcast, The Racki and Symes Podcast, where he discusses ideas and strategies to push through growth.
I’m super excited to share this episode with you as his experience and passion for business really shines through and he shares some of the tough lessons of entrepreneurship.
CEO of Proposify
Kyle Racki is the CEO and co-founder of Proposify, software that helps thousands of businesses remove the bottleneck of proposals and get more visibility into the close. Based in Halifax, Canada, Kyle and Proposify have won multiple awards over the years, including the EY Tech Entrepreneur of the Year for Atlantic Canada and Deloitte Fast 50. Kyle got his start in marketing and design, and ran a digital agency for over five years before selling it and starting Proposify. In addition to running Proposify, Kyle also works with other companies and startups as an investor and strategic coach, and sits on the board of Bright and MarsVR. He is a paid speaker having spoken at events like Traffic and Conversion and Digital Sales World, has appeared as a guest on popular podcasts like Mixergy, and has been featured in Time Magazine. Kyle co-hosts a weekly business podcast and self-published a book in 2019.
I just wanna touch on before I get into that, what you just said was, founders are, are notoriously bad at listening to advice. People in general don't listen to advice, right? People will ask you, Hey, what do you think of this? And if you don't give them the answer they want, then they'll just, you know, do what they're gonna do anyway. Founders are 10 times worse because in order to be a founder, you have to naturally be somebody who doesn't listen to the status quo, who challenges the status quo, who wants to do it their way. So, yeah. It's a lot of these things he come back to later and you go, ah, I should've listened to that, but I, but you're not going to.
Welcome to the Unicorn Leadership Podcast. My name is Fahd Alhattab and this is the podcast where we interview leaders on the advice that they don't listen to. We interview leaders on how they create high-performing teams, on how they become effective in building their business, the insights that they listen to, and the insights that they didn't listen to, the tools that they used, the mistakes that they made, then the things they had to learn the hard way. And hopefully, you and I can take a few tidbits away and share and maybe avoid some mistakes, but also inevitably make some of our own. Our, this podcast is brought to you by Unicorn Labs where we transform managers into leaders that create high-performing teams that scale. You can learn more about Unicorn Labs at unicornlabs.ca. Today's guest is Kyle Racki. He's the co-founder and CEO of Proposify.
And Kyle helps thousands of businesses remove the bottleneck of proposals to contracts and everything that happens to actually close the deal and more visibility into closing that deal. In true serial entrepreneur form, Kyle co-hosts his own podcast, the Racki and Symes podcast, where he discusses idea strategies to push through growth, and likes to discuss a lot of growth strategies. I'm super excited to share this episode with you as his experience and his passion for business. His wisdom really shines through and he shares some really tough lessons of entrepreneurship. And I believe we talk about the book The Hard Thing about hard things during this, this, this podcast. But it really reminded me of that book and all the challenging things that a CEO has to deal with. See, the first quote we dealt with that, that, that Kyle kind of we shared here in the episode, is about listening and whether, whether any of us will truly listen to the device, whether we actually take it.
We just want to hear what we want. but it is interesting cuz he juxtaposes it against the fact that as entrepreneurs and as leaders, we actually have to be really good at not listening to what's being said just as much as we do at listening. You know, I often, I often, you know, have said imagine, imagine our certain world leaders. Imagine our civil rights leaders. Imagine Martin Luther King Jr. Took a vote on whether people thought that there should be more civil rights. He would've lost the vote. And the majority of people at the time did that. He was rallying, didn't always agree with that, but he had to rally people who did and foster and mold consensus and mold the people into the way he was thinking. So it, it's this constant balance of, you know, listen to the customer of what the customer wants so that you can build that.
But also don't listen to the customer because Henry Ford said that if I asked the customer what they wanted, they say a faster horse. So listen to the customer, but also lead the customer to where they want to go. Listen to your investors who, who invest money and time and advice into what your business is taking, but also don't get so obsessed with their advice that you might get stuck in simply just 10xing and short run decision making for financial gains. Listen to your team and your employees of what they think needs to be improved, but also have the tenacity to build a vision to take them to where maybe they don't see themselves. Because you have the leadership and you have the vision. Listen to, to gurus online and experts that taught you stuff on podcasts or courses, but also contextualize that and don't take their word as the final word and has to actually make sense in the context of what you are doing.
It is through listening and then dismissing certain things that you've listened, that you start to hone in on the filtering skill that's necessary to actually lead in a world of information where you got everyone pulling you in a million different directions. And that is a challenge of a CEO and a leader where there are far too many priorities and far too many things that you could be doing. And you've gotta take a bet on what you should be doing and what difficult things that you are avoiding from doing. and instead trying to you know, do the easy stuff and walk the easier path because perhaps they're the things that are fastest to do and not perhaps the most important for our businesses. So think about who you're listening to that maybe you've got a filter. Think about what short run decisions that you're making versus long run decisions that you're making based on what you are listening. And let's hear another quote from Kyle.
I'll say that, like you said, the most founders, I hope all founders have a certain skill set of things that they're really good at. You might say they're T-shaped that term gets thrown around a lot in the marketing community of essentially, you have to be kind of good at everything and really good at one thing that tends to be the way most CEOs are made up is they're, you know, you look at like Brian Halligan from, he's not a product guy, he never was, but he's a sales and marketing guy. Most founders will come at it from some sort of either sales and marketing led way or sometimes product and design like the Airbnb co-founders were designers. the most common ones in tech are the technical co-founder, which, you know, they all have their strengths and weaknesses, but you'll usually, the business and the company will usually reflect the values of the founder. That's why we talk about core values and why if you're a, you know, if you're an asshole, then most people you hire will be, and that's the culture that will be developed.
Yeah, I absolutely love that. But if you've got too many assholes on your team, I need you to look in the mirror and maybe you reflect, because as Kyle said, if you're an asshole, maybe you're hiring assholes. Maybe the toxic part of your team that you're struggling with is, is something that we see in our own leadership. See, Kyle got his start in marketing and design, and he ran a digital agency for over five years before actually selling it to start Proposify. we discuss a framework that lays out the job of CEO and some of the most important pieces that they're faced with, including things like, you know, creating a vision with which we've talked about, but auditing values, building out the executive team, the title politics that are real, and making sure that we're not giving out statuses too early.
Hiring leadership contextually to the current situation. We're not hiring leadership for that perhaps is needed for a corporate level, but for the size of team that you're on and the challenge that you have. And really being able to understand how not to burn through your cash and not use all up investor money, but survive long enough to be able to see through the business. These are the topics we're gonna be talking about in this episode, and if you find it helpful and you enjoy it, send us a note on social media. Alright, my handle is Fahad al Hat tab. You can find us on all social media or leave us a review on the podcast, share it with a friend, give us a five star review. and let's get this episode going. Without further a ado, let's have this episode number 15 with Kyle Iraqi. Get started. Ha. Right. Kyle, welcome to our Unicorn Leadership podcast. I'm excited to have you on our podcast today. You've, you are a fellow Canadian founder, you know, so, so always, always love that you're out out in the east coast of Canada. Kyle, Kyle, where, where are you calling in from here today?
I'm calling from Dartmouth, Nova Scotia, which is so close to Halifax that we, we just call it Halifax,
So just call it Halifax. Halifax. So I've been, I've been to Halifax once and I'm sure as anyone who's only been there once, you know, we did the classic Peggy's Cove. Right. Like that I was there for a volleyball tournament in high school, like way back, you know, so, so, so that's what I associate Halifax with Dalhousie University and Volleyball tournament. That's, that was, that was the . That's what I associate. Yeah. Yeah. . Yeah. So
It's grown a lot in the last 10 years. It, it it, it's, well, I think one of the fastest growing cities in Canada right now.
Oh, really? What's, what's, where's the growth coming from?
Well, there's, I mean, there's a startup scene, but you know, a lot of it, well, I think the pandemic had had an acceleration effect. I think it was already growing a lot over the last, like, five, 10 years. But there's just population growth. There's you know, people aren't as tied to one place. I think historically we suffered because like our, our best people, our best talent would move out to, yeah, Toronto, Vancouver to get jobs. A lot of people move back here that are from here and wanna raise a family here, and they can work remotely. So I think that could have something to do with it. But there's just a lot of new developments and the housing market, like, you can't find anything.
Yeah. Yeah. That's such a good point. and what about you or, you know, born and raised in Halifax, did you ever leave, you come back? What was, what did you, do you have a story of
Leaving? Yeah. My, my I was born in Calgary actually. That was what my parents moved out west to have me. And and then they were Cape Brener. So that's for those who don't are Canadians, Cape Retina is an island as part of Nova Scotia. but yeah, we moved back to Dartmouth basically, and I've been here ever since.
Awesome. Awesome. I love that. Cool. Well, Kyle, we've got a fun episode lined up for us, cuz you know, you and I had a had a chat before this and you've had a chat with our team and you know, we've been excited to have you on because you are gonna help us unpack the job of a founder, the job of a CEO o founder, you know, especially, you know, founder CEOs have to balance quite a bit. And, you know, I often talk about the shift between being a manager to being a leader, right? From just managing kind of the operations and the budgets and the systems to really leading a company, leading people and really giving direction, giving, giving, you know, whether it's elements of vision or really taking bets, which is often what our founders are doing, right? They're taking bets on ideas and markets that they think can grow. But you had a really good framework for us to really understand the job of CEO and the job of a founder CEO. So tell us a little bit about that and let's dive right into that.
Yeah absolutely. Well, I mean, I got this from somebody who was my business coach for a very long time named Dan. Dan Martel said this, cause I was struggling as we started to grow our startup. I was, you know, in the early days of us, you, you, we were the label CEO. But really it's just, you know, you kind of need a CEO cuz somebody's gotta do it, but it doesn't mean you're a real CEO. so I always struggle with like, how should I be spending my time? What am I responsible for? Especially as you start to delegate the work and you're doing less and less of the actual execution. and Dan always said there's j the job of a CEO is number one, set the vision and direction for the company. Number two, build the executive leadership team. And number three is don't run outta money, financials, keep the finances in order.
Yeah, yeah. And,
And the lens, I viewed that through. Yeah. Now there's a lot of nuance there, but it's of course framework.
Of course. I like, I like how you put that. Like, you, you, you're founder, you're not really a CEO, you don't know what it, what, what, what's the, right now you're probably just a product manager. You're building out the first product, right? Like, you, you're wearing so many different hats and what, what are the parts of the CEO piece that you have to really think about? And so set the vision, build the exec and the team that can build the rest of the organization and don't run out of money. So, so Kyle, I'm a big Dan Martel fan. I mean, I see, see all his stuff on social media. He's, he is loud and proud and he's, he's had some phenomenal successes. So really happy to kind of see that, that connection there. so Kyle, you today are building a pretty cool company. Tell me about the company that you're currently building and that you're currently the founder and CEO of.
Yeah, the company's called Proposify, and we've been around now for about eight years. we, I think we're kind of one of the earlier sort of you know, B2B document proposal sort of software. So essentially what we do today is we help sales organizations who are scaling and they're starting to lack that control. The consistency of the important sales documents. We call them closing documents. Like what is the document that needs to get in front of a prospect for them to say yes and for you to close the deal. They might be called proposals or contracts or agreements, but that is a huge bottleneck in a lot of organizations. And as they start to scale up reps that go, wow, it's like chaos. Everyone's using a different thing, a different template, a word doc. There's errors, there's pricing, you know, terms are wrong. So what we do is essentially we help them get control over that so that it is consistent and it's, and they get visibility into how prospects are interacting with it.
Love that You've been building that for eight years. Yeah. That's that's a good time. That's a, that's, that is you've gone over many humps, I assume, you know, to get, to get to there. So that's, that's really cool.
Let's still in in them many humps
Many humps to come. Yeah, exactly. So eight years building this and you've had a lot of experience now, now as a CEO and so again, we're gonna get back to senate division, building the exec team and not running out of money is the three key things now to, to have learned some of this stuff. A lot of, I say a lot of our founders are the type of people, you know, myself included. I'm sure you included. Sometimes we just gotta, we, we can hear it on a podcast, we can read it in a book, but until we're slapped in the face with the issue ourselves, we don't sometimes learn it. So. So Kyle, take me through a little bit of your own life journey here. Let's kind of, you know, before we get into the brilliant insights, let's give our audience here a chance to learn a little bit more about who you are. Where is your background? What, what, what, what did you do in University of college? What was this your, what company is this? Is this company one or two? What did you do beforehand and how did you come to some of the brilliant insights that you, you're gonna be offering us here today?
Sure. Yeah. And I just wanna touch on before I get into that, what you just said was, founders are, are notoriously bad at listening to advice. People in general don't listen to advice, right. People will ask you, Hey, what do you think of this? And if you don't give them the answer they want, then they'll just, you know, do what they're gonna do anyway. Founders are 10 times worse because in order to be a founder, you have to naturally be somebody who doesn't listen to the status quo, who challenges the status quo, who wants to do it their way. So yeah. It's a lot of these things you come back to later and you go, ah, should listened to that, but I but you're not going to, it's okay.
Yeah, it's okay. Yeah, yeah. I love that cuz it's, it's our biggest strengths in the extreme that can be our disadvantages, right? So the perseverance and determination, the stubbornness of a founder to go against the flow is their biggest strength in the early stages, but then is their biggest weakness as they grow and as a scale, right? it's the , it's the two. I love that.
Yeah. And then as an advantage later when shit really hits the fan and they have to go against their board or their lead investor, what have you . , it's just interesting, interesting insight that you shared there. yeah, no, I mean my background had zero interest in business my entire life. I was always kind of a creative guy, I guess. Like I was into drawing and art and later got into digital art as a, in high school but wasn't academic enough to really go for, you know, never went to university. went to community college and studied graphic design, which was kind of, I think what my mother pushed me to cuz she was like, well, you like art and you gotta get paid somehow. So here's a
Nice, you can do design. Yeah. Yeah. , that's what love loving parents do, right?
Exactly. Yeah. and actually that ended up being a real blessing because I loved graphic design and then I later learned web design and then development and and that sort of leads you to building websites and building applications and whatnot. So it was a great stepping stone into that territory. But yeah, I mean, I kind of thought I'd work at agencies in my early twenties. I worked at a couple and we did ad campaigns and, you know, billboards . and stuff like that . . And then we did like websites. So that was like the foray into business. But really it was like, I stepped out on my own as a freelancer when I was about 24 partnered with a guy named Kevin Springer, who I met at an agency who was a BizDev guy 20 years older than me. And then fast forward 15 years, we're still business partners, so, huh. He helped me build, we, we basically built a web design agency for about five years together, and then we killed the agency and started a propose AFI together.
And what was the leading insight that gave you the aha moment for Proposify?
It was actually one of my first agency jobs. They, you know, a lot of times agencies have to put together these, these pitches that are very like, visually beautiful kind of you know, you're selling marketing and ad you know, advertising services. So there has to be a certain amount of presentation quality to it, but they also are a big cost center, right. Cuz there's no guarantee you're gonna win the work. So they put junior designers on this stuff, they can you pretty up this deck or this, this template or the proposal, right? So I got involved in the proposal and I was very fascinated. I had no training or, or experience in business at all. And this idea of like putting together a document to essentially win, you know, a hundred K or whatever contract was just yeah, fascinating to me. The stuff that goes in it, the pricing, the way you pitch, the scope of services, the, you know, all that stuff.
Just fascinating. But it was also very chaotic because I had like account managers emailing me word docs. This is back in 2006. So we were using CDs and to store our, you know, work that we'd have to pull off to use as case studies. And it just seemed like a real nightmare. and around that time 37 signals came out with base camp. Yes. So I, getting, getting on base camp, it was like this kind of slicker at the time, slicker, like easier way to do project management. So I just, one night my basement thought like, oh, it'd be cool if there was like a base camp for proposals and just designed that out in wire frame, like a little idea. And that was it. I sat on it for years, but I always kept coming back to like, yeah, there should be like a base camp for proposals or like proposal software. and then you started to see like bid sketch came out with one. Yeah. There's a lot of quoting tools, but there's nothing that really let you like, design something. It was always very, like te it looked like what I called like a mechanics quote.
Yeah. You know? Yes.
A big giant sheet of tiny text and numbers. It was nothing like creative. So that was, that was kind of the starting point.
Yeah. Yeah. I love that. I love that. That's really cool. That's a, that's a, that's a, you know, and what's awesome is that, you know, you even see it here, so your initial four A into being a founder and CEO was as a designer and a web developer. Okay. I built a wire, you know, wire frame of like, here's a problem that I saw when I was selling marketing services. And so I built a wire frame about it and you probably started developing the, you know, yourself right at the beginning. And so there's the transformation and the challenge of, you know, founder who's tactical, who's building it themselves, transforming into a manager and transforming into a leader and a CEO and what that journey really looks like. So how was that journey for you as, as you kind of started to build out a team? You know, what, what did building out the team at Purify look like? and what were some of the challenges? What were some of the wins? Let's start with some wins. What were some of like, Hey, I did this well and what were some of the like, oh my God, this is where I went wrong.
I don't know if the podcast is long enough to talk about what went wrong. We'd have to get really selective, but you know, I'll say that, like you said, the most founders, I hope all founders have a certain skill set of things that they're really good at. You might say they're T-shaped that, that . , that term gets thrown around a lot in the marketing community of essentially you have to be kind of good at everything and really good at one thing that, that tends to be the way most CEOs are made up is there're, you know, you look at like Brian Halligan from HubSpot, he's not a product guy, he never was, but he's a sales and marketing guy. . most founders will come at it from some sort of either sales and marketing led way or sometimes product and design like the Airbnb co-founders were designers. the most common ones in tech are the technical co-founder, which, you know, they all have their strengths and weaknesses, but you'll usually, the business and the company will usually reflect the values of the founder. Yeah. That's why we talk about core values and why if you're a, you know, if you're an asshole, then most people you hire will be, and that's the culture that will be developed. Yeah. but strength
Of a company, you're an asshole. You hire assholes. Right? Like, it's just cuz you reward, cuz you reward that behavior. Right. And you see it in yourself. I, yeah. Yeah, yeah. Yeah. Well,
And the flip opposite is true too. If you're, if you know, if people are familiar with the concept of radical candor . , if you . , if you lean on the ruinous empathy side and you won't have hard conversations, you're gonna hire other people like that. And suddenly you're gonna find yourself with a culture where nobody is willing to challenge, which is arguably worse for a company than one where people are challenging constantly.
Yeah. Yeah, definitely. You know, I do, I did this fun little exercise. You know, one of the things that we do in leadership development is, is that we'll often do a person personality profile test, just as like a way of getting to know each other, learning a little bit. What I found over the years is that it, that early on in teams you could split, you could probably guess the percentage of the personality profile in a team based on the personality profiles of founders is that we tend to hire people who are, cause they're like, oh, that person is just a good vibe and I just connected with them. And really what you're saying is that they're similar to you in the work in the same way style you do. So you went with that. Right. And so we see that so often and that's
And that, and that's how most founding teams get started. And that's usually what builds that initial culture that will last for a very long time in the company. And then there's a certain, at a certain period of time, you have to reflect as a founder and as an executive team and say, what are the aspects of our culture that aren't helping us get to the next level? And then how do we actually identify and introduce new values to the company that don't ac accurately reflect who we are today, but tell us where we need to go. So that's what we've had to do. at Proposify, we introduced new core values last year that we didn't even follow ourselves yet because we knew that our current were holding us back. Hmm. And I can share examples of what some of those
Yeah, yeah. Yeah. Yeah. So, so, so let's, let's get into the kind of the big three kind of, you know, framework that you, you gave us here as, as part of being a CEO and you know, that you that, that we borrowed from Den Martel. So the first one was you had to build the team, build the exec team. how was that journey in building the exec team? and actually sorry, the first one was set the vision. I got that. Yeah. First one was set the vision. So, so I find this interesting, well, look, we'll talk a little bit about vision. We often talk about vision in these podcasts cuz it comes down, you know, it is a big part of a startup. And, you know, how many times did the vision tweak and change and pivot in your eight years of building proposal fire?
I mean, it changes and evolves constantly. it's, it's one of those things where everybody knows, everybody thinks they know what a vision is and it's a simple concept to grasp, but a lot of times the simple things are the hard things. And it's, you know, in the case of us, and I assume a lot of startups begin just observing a problem that exists in the world that you wanna solve. Yeah. And it's, it can be a very simple problem like proposals, but as you grow, you, you, your ambitions have to grow too. And so suddenly you're like, okay, well we solved this problem pretty well, but let's, like, step up, let's zoom out a little bit and see like, what, what value are we actually creating in the world and what do we want to achieve? . . And that can be hard, you know, because not a lot of us, most of us are not Elon Musk and we're not saying, Hey, the vision is to get to Mars or colonized Mars. Like, but in our own way, as founders, we have to take some time and reflect and think about like, what is our own version of getting to Mars look like? It may not be as grandiose as that or as, you know, impactful, but what kind of impact do we wanna make? And then can we articulate it, you know, more than just a vision statement or remission statement that says we want to build the best quality products and, you know, make
Whatever a hundred million in revenue. Like how can you articulate that vision in a way that actually gets people outta bed and gets them motivated and keeps people around when they're getting thrown job offers, that's the real challenge. And it's simple to describe and very difficult to do.
Yeah. Yeah. You know, and you know, often it's a, it's a term that was shared by a podcast member earlier in, in our podcast is about the vision is about we, we gotta polish the turd is what he said. You know, initially you get this, this shitty little idea of a problem that you wanna solve with an, with a product that you can do. and you've gotta polish it over and over and over again until you get more crisp and clear and as you said, zoom out. And I think that was a really good piece that I wanna hone in on. It's like you start sometimes really, really narrow, or at least we want people to start narrow. Cuz you're like, you gotta pick your niche and you gotta pick a very, very specific problem that you can address for a very specific person. And then slowly you zoom out and it's during that zoom out phase that I think a lot of startups struggle with their identity of like, where are we going here? If we've only solved this small little problem, how do we capture more of the market without being everything to everyone, which won't help us survive?
Let, let me give two real quick examples cause I know you wanna move on to the the next piece. But, you know, these are very overused examples, but I think they serve really well to make the point is that Google and Facebook both have very clear missions and visions that have survived a very long time with the these companies that are, you know, now 20 years old or close to it. Facebook is about making the world more connected. It's not to have a, to create a social platform. The social platform is a way to make the world more connected. But now we can see what Zuckerberg's doing with VR and Metaverse. That's another way to make the world more connected. Google's mission is to organize the world's information. It's not to build a search engine. Yeah. Right. But, but being clear on our job is to organize the world's information. Enables things like Google Maps, Google Docs, and all the other yeah. The good products that they have.
Yeah. I like that. I like that. Right. So you can see, you start to see your products as only, you know, tools to achieve the larger vision, right? . So good. Okay. So we set the vision and where this podcast often, you know, where we get to is okay building the team. So, you know, unicorn Labs, we're, we're, we're a leadership development company. We work with a lot of leaders developing their capacity, developing their managers, but man oh man is at hard. Like I, you know, yeah, we do it, but, you know, it's imperfect. We're, we're constantly working and you know, yeah, we've productized parts of it, but when we coach, we're constantly iterating. At the end of the day, the CEO themselves need to be one of the best coaches for their own teams. They need to build a phenomenal organization, a team that can build teams, a team of teams. and you mentioned that. Tell me about that journey. How, how was building your exec team? What things did you think about and what were some, some mistakes that we can kind of talk about for people to maybe avoid?
Well, this, these are gonna be things that people are gonna hear and it may resonate with them, or it may not, but they're probably, like you said at the beginning of this, ha gonna have to make these mistakes themselves. cuz as much as you can hear it until you go through it, it's very difficult to really, nobody's gonna get this right. And where everybody's gonna make a ton of mistakes. What happens at the beginning of a company's life as, as you build that startup, like you've said, who do you like to go out for beers with? Like, who's smart and skilled and you go, Hey, I like hanging out with you. I want you to be on this journey with me. That's how most of these things start. And so naturally what you do is you hand out titles eventually. So, you know, you're a team of five people who kind of do a bunch of different stuff.
Maybe one person codes mainly, but they're also handling some support tickets and another person's designing the marketing site, but they're also designing the product. There's this, there's no, there's these blurry lines. Everybody's just doing a bunch of stuff. But eventually you kind of go, okay, we need somebody to own marketing. We need somebody to own customer support and somebody to own engineering. And the mistake that I've made that, that you see a lot of people make is they go, well, you should be the CTO and you should be the, you know, VP of product or the vp, whatever. And these are often people who are highly skilled real like startup people who know how to like hustle, who feel that train barreling behind them, you know. And they're just getting shit done. But those people are probably not in five years going to be a person building a hun a 100 person department under them.
Yeah. Because the skills that you need to be, that if your, if your goal is to scale to a billion, the person who's gonna build that is probably not the scrappy do it, you know, do it yourself, figure it out, startup person. And a lot of them think they want it. And then a certain point comes it comes to a certain point where they just realize that like what they need to be requires more growth than a human being is capable of in that timeframe. . the business is, once the business is growing faster than the people, you almost always need to layer in management . . And if you've, if you've handed out these big titles at the beginning, then it leaves no room for layering.
Yeah. Yeah. So
You have to, you have to be stingy when it comes to titles. And you have to say like, I know you're a great, you know, engineer, but you're not the cto. You're gonna be the head of engineering for now. And once you, once you get to a breaking point where you can't handle what's required anymore, then I'm gonna bring in a VP of engineering or a director of engineering
. . Yeah. Yeah. I think that's so important, right? Like yes, we hand out those titles, right? Because it's like, oh, whatever, you're a cto. Sure. You wanna, you know, oh yeah, yeah. You can be Chief Revenue Officer, you're doing sales and marketing for us. You can, and in the beginning it's, it's almost, you use it as a carrot, right? I'll give you, I'll give you a title, I'll give you, I'll give you the title, you stay cuz I can't pay you much. So I'm gonna keep you, you keep give you the title to keep you there. You know, it's funny because I recall reading the Everything Store, the, about Jeff Bezos and to the first one, he has another one now, Amazon Unbound I think is, is kind of the second biography. And he is the first one he talks about the exact same thing.
They talk about a certain CTO they had, who eventually they had to layer someone on top and that, and that person was so upset, right? But it just wasn't, and he slowly pushed him out of it. And Jeff's Bezos's mistake here was that, you know, he didn't ever have the very difficult conversation with his exec member. He simply brought other people in around them and slowly pushed them out. instead of, you know, properly having the difficult conversation of like, Hey, you are not at the capacity we need to build the a hundred billion dollar company, the trillion dollar company. You were phenomenal in the beginning stages of all of this started. and that's, that's really powerful cuz it is a different skillset, right? It is a different skillset from being the builder, the doer or the strategic leader you know, people manager and so what are some of those skill differences that you take out now? Like when you were hiring early execs to, when you're hiring execs now that you guys are I believe you shared with us as this public, it was over 10, you know, 10 million ARR is what you're at. You know, you've, you have over 65 employees or, or had maybe some, some changes going on, but you've, you've really grown. What are the different skill sets you looked for when you were a 10 person shop and now that you're, you're, you know, you've got layers of management.
Mm. Yeah. I mean, here's where it gets real fun because it's not you, you can't, you can't go too far in either direction. So it's about needing the leadership that's required for the business you are today. And so, if you're a very early stage startup, you may only need that cto, hopefully that you're not calling them that. But like you may, you just need that person who's just a skilled engineer. That's all they need to be. They need to build product really quickly and adapt to customer feedback really quickly. there's no sense hiring Slack CTO to come in and like build in all this kind of like automation and infrastructure that can scale to, to, you know, millions and millions of users. Cuz you don't need that right now. And so the opposite happens where, where when you raise money, sometimes come startups that raise, you know, series A or big rounds of investments will get all this cash in the door and they'll think, now I'm gonna bring in the big guns our time to scale. And, you know, the book Predictive predictable Revenue by Aaron Ross talks about That's a good one. Different levels of sales. Leaderships the highest level is Mr. Dashboards. Mr. Dashboards does not really do a whole lot of stuff other than looking at data and making decisions based on data. You bring a MR dashboards into your startup to try to build the first sales team, they're gonna crash and burn.
Yeah. So a lot of this is about being at the right level of leadership that's required for the business you are today and where, and the next level you want to go to, not 10 years from now, but like, where do you need to be next year? . , that's the, that's the art and the nuance and why it's so tricky to get the right person in for the business you are today. They can't be underqualified. They can't be overqualified.
Yeah. Yeah. That's a I love that. I think you hit the nail on the head here. We were just dealing this with one of our clients who brought in an executive, you know, someone from a bigger corp, kind of a traditional Adele and ibm, you know, like, and we're super excited to have them. And then the person's like, well, I need an additional five people on my team to do this and this and that. And they were like, well, no, we hired you to do that. Like, . And the person's like, oh, I haven't done that. You know, I usually have a team. And it was an immediate uhoh. This is, this is a bad fit. And I say like, you want leaders who can start fires, not just put out fires. And often when you're in big corporate, you're putting out fires. You're like, okay, there's this problem, there's that problem. You're trying to make the machine run. But at a startup level, right? You're, you want people who can drive the engine.
I always use the analogy of like, start the people who build ships aren't the ones who sailed them. Hmm. And so the kind of people who are gonna build a ship are probably not gonna sail it. And there's not a right or wrong there, it's just a different skill set. But too often we have, we're at a startup and we need builders and we hire sailors who are going like, Hey, where's the ship? Let me take it across the ocean. You're like, well, we're, we're making a ship. What do you mean?
Right? Yeah. Yeah. So, but then
Once you actually have to sail it, the people who built the ship don't know how to sail.
Yeah. So, so where, where has this showed up for you? A proposal? Five. So have you, you know, were you able to, to not give out titles too early? Did you give out titles too early? Did did you have to reel some titles back in? Of course you have to reel some titles back in. How do, how do CEOs have those conversations when, when it's time to kind of shuffle the deck?
Oh, I mean, they're so hard. They're, they're the outside of like, when you've gotta lay off a group or, or, you know, let go of a, a team or a department. I mean, they're the most difficult conversations you're ever gonna have as a founder. I mean if anyone's familiar with the book, the Hard Thing About Hard Things by Ben Horowitz he has a whole chapter on how to demote a loyal friend. And, you know, I always say to people, if you see the hard thing about hard things on my desk, shit's about to go down
because I'm reviewing that chapter.
Yeah. But you know, the, like we, the initial management team at Proposify is completely different . than it was, you know, now versus where we were. The entire team has turned over. There are some people, there's one person in particular who is still at the company and has been with us for eight years, but she has a different title and is, and does very different jobs. She's not at the executive team. Others have been demoted and, you know, you've had that conversation of like, I don't think you can do this. I don't think you're at the level we need, but you're really good at this thing and you know, the execution work, you should just keep doing that. Usually it's, they, they move into an individual contributor role, right. Has happened with our product leader and our engineering leader. And then other times you just straight up fire them. And that's, that's an equally hard conversation, which is like, I don't even think you're a right fit for the company anymore, or I don't think you can take a backseat.
I don't think you're able to. I think you need to just move on and find something else.
There's no, there's no art or formula to having those conversations other than to, you know, app appreciate them. Hey, even, and sometimes these happen as a founder, you're, you're a little bit mad at the person. Right. You can't help or be a little bit pissed off because you feel like they've hope. Hopefully you don't mind if I swear on this podcast.
No, no. Swear. We, we, we swear often ,
You know, like you, it's hard not to feel like you really fucked this up. Like we're, we missed our goals, our product shit, our revenue targets are off and it's your fault. And it, I mean, it's your fault, my fault as the CEO for putting them in place. But it's also their fault for not you know, like if you're marketing leader, your sales leader is not hitting their numbers, they can't blame people on their team. And that's the first sign of somebody who shouldn't be in that position. Yeah. Well, your team stocks will get a new team that's like, I'm, I'm relying on you to fix this. Yeah. A lot of times people aren't mature enough or they're just not developed enough to take that, that level of ownership. Yeah. But when you have this open discussion, you have to temper that anger and frustration and disappointment with appreciation. I appreciate that you helped get us here. I know you're trying your best, but it's not enough and I need somebody who can do it. And I need somebody who looks more like X, Y, and Z. You're not that person.
They're gonna be hurt. And there's gonna be hard feelings
Often you don't know what X, y, and Z are. You don't, you don't know what kind of player you need until you've had a player in that role who's taken a few shots and you're like, oh, those are the wrong shots. I see it now. Right. Yeah.
It's like dating you. You learn who, who's who you're a good fit for by dating people and then knowing who you're not a good fit for.
Yeah. Yeah. See you, you mentioned, you know, you mentioned something good and I want to get to that piece. He said, you know, if your team is shit, well I expect you to fix your team cuz I hired you, I'm responsible for you. Right. and then you are responsible for your team. And so this concept of team of teams is, is constant that we, we talk about in, in, in leadership and it's like, yeah, as a CEO, your team you've gotta really worry about is your exec team, that's your starting five and your starting five have to have to be able to hire their starting five and have to be able to create their starting five. What, what do you do to empower the creation of team of teams to really give them the ownership? Because you mentioned yes, at some, at some cases, people need to be able to take on that ownership themselves. So there's a little bit of individual skill, but at times CEOs also struggle with giving that ownership and that empowerment. And there's usually a little bit of that struggle. So what do you do to give that space, give that ownership so people can build their team of teams?
Yeah, great question. And you said something at the beginning of this that I think, I think lends itself towards this, which is you have to learn how to be a coach. And a coach is not an advisor or a consultant or they're not the person who has has the answers. there's two things here. So the first is you have to measure them by results. You're not measuring them by their own individual performance. If you, anybody who's read Andy Grove's, the high output management, he says that a manager's output equals the output of their team reports to them. So if you are a sales leader and you have a sales team, it doesn't matter how great you are, how many deals you close. If your team is responsible for a number and you're not hitting it, then you as a manager are not performing. Yeah.
I don't care how great your cultural values are or how happy your team is, you're not hitting the number. So when you start putting together a scorecard, and this is probably one of the most, I think, practical tips that people can, can do this if they don't already is like a a, an executive team needs to, on a quarterly basis, set the benchmarks for the, where they want to be based on the vision. . , you know, where are we going in the future? And then how do we get there? What are the steps we need to take and how we, how do we measure the success? And then on a weekly basis, you're reviewing that scorecard and being like, sales, here's the top three metrics we care about at the company level. How are we doing? Are we on track or off track? That's really, I mean a lot of this stuff is mundane, but that is what it looks like.
Yeah. It's just we on a weekly basis, how are we doing on the number? Now what will happen on one-on-ones is your exec, you know, somebody on your team you'll meet with. And if things are going really well, well that's, that's great. But if things aren't going well and they usually aren't and kind of company, you're almost always trying to, you know, you're projecting these big numbers and coming up short, then it's a why so why are we off? And this is where you as a CEO can learn and start to develop those coaching skills because you might feel, you know exactly why we're off. And in a wartime scenario, you probably should just step in and say, this is the answer. You, you're, you're missing it. This is what we're doing. but you have to, as much as possible, try not to give them the answer.
Because the only thing that can happen is either you are wrong, in which case they're gonna be mad at you. Right. Like, you told me to do X and it didn't fix the problem. Or you are Right. But you basically took you, you disempowered them, you took the wind outta their sails. . , you stepped on their toes, you told their team that, don't listen to this guy or this gal. Yeah. Both of those things aren't good. So you have to, as much as possible say, why are we off on the number? Okay, it's this problem, it's that problem. It's this other department, this other department isn't doing anything. Somebody else on the executive team isn't giving you what you need. Or
Isn't it, is it always sales blaming marketing, marketing, blaming sales engineering, blaming sales engineering, blaming sales for selling things that aren't yet built customer service, blaming sales for over promising. it's the exact same blames that we see across every organization. Right. ,
And this is an important point, is that the it assure sign that somebody is probably not in a good fit on the executive team or they're just not mature enough is when they default to blaming and and sort of pushing across the aisle to a different department.
, it's one of those things where it's just like with individual contributors become managers, they struggle cause they wanna still do all the work. They don't want to like lead the team and like hire the people and and give them the processes to do it. Yeah. Manager to a leader is is the similar type of gap. Yeah. Where you've gone from being like, my team matters, all that I care about is my team, my team to now you have to make decisions through the lens of what's the best for the business. Yeah. And this is where leaders really struggle because they still have that manager mindset, well I want budget for my team. What does the business need? Well, oh actually we need more engineers, not sales people here take my budget. That's what a real leader will do. Yeah. Most managers won't.
Yeah. Yeah. I love that. You know, the analogy I like to use too, cause I think it it's sometimes very clear is like in a sports team, you've got your team members, you've got your captain who's still on the floor shooting the ball, but he's a captain. And then you got your coach who doesn't step on the floor, you can't shoot for you. And so often you get team leads who become managers and they struggle between being captain or coach. And is that, am I captain? Am I shooting the ball? Am I, am I in the trench with my team? Am I telling 'em what to do? Am I, am I doing the sales call or am I coach and do I have to step away and let them do the sales call? And then I I watch game tape with them and it's, and that's, that's a tough transition. And so you see that same transition again from manager to leader, you could say coach to gm, are you just the coach of the team or are you managing the entire process of the franchise? Right? Like, yeah. And again, it, it takes that next level. So I like that there's
Separation and the higher the level, the the more future focused you are.
. . Hmm.
At every, at every one of these rungs and the ladder, your outlook becomes longer term. Not just what's happening next week or next month, but what's next quarter, what's next year. It's like, I like that said, like if anyone ever congratulated him on a having a good quarter, he'd say, well, it was decisions we made a year or two years or sometimes three years ago that led us to that quarter.
Yeah. Yeah. Yeah. I love that. I love that. Good. So then, so then this gets us to, to kind of the final piece here. We talked about vision, we talked about building the exec teams and things to think about. Think about really, you know, we talked about making sure you don't give out statuses too early. Right? Titles too early where we can, we can shuffle people around. making sure that we are hiring leadership that's very contextual to the situation that we're in and not, you know, get a, get a whole bunch of money and hire what we think are big shots, but they, they miss the mark. and really leaning into some difficult conversations when necessary and holding people accountable. Really high ownership with scorecards of do you own the results of your own department? And if you really own it, you can create those team of teams and really empower.
So that's, that's kind of really, really good thoughts here you've given us. So then the last part of this framework is we gotta make sure we don't run outta money. and this one I think is really timely. We're in an interesting place in our economy, right? We're in a recession or, or nah, whatever. All that debate that's happened in the, we're in a recession, I was an economic student back in university. You have all the signs of a recession, we have high interest rates, and you have consumer demand dropping. So let's just call it for what it is. It's been more than a decade since we've had a recession, since the great recession thousand eight. Pretty much every decade we have a recession that's based how our economy is to kind of really clean things up. So right now the conversations around the table around not losing money and not running outta money is some of the biggest conversations the founders are having more than they've had to in the last 10, 10 years in a bull market where you could just go and raise more money.
And what's interesting, Kyle, you know, I mentioned this earlier, is that, you know, as someone who who works with a lot of startups. I get to see a lot of different financials. I get to kind of, you know, be on the outside. I'm constantly looking at the markets. And what's interesting is I am really worried cuz I see a lot of really high headcounts without really high profits and it's this grow at all costs mentality. This the throw. I think you, you had a word for it, you know, throwing cash at growth or, or, or what did you say earlier? You had a, you had a word for it. When we, to grow, burning to grow, right? This is the mentality that we've had over this last 10 years. And it's that, you know, borrow money, raise money at all costs to try and capture market.
and sometimes we haven't earned it, you know, and we haven't earned the right to get the referrals. And you can't buy referrals if your product's not good enough to get referrals. You can't, your marketing spend can only do so well if it's not converting and it's unit economics cuz you didn't actually aren't solving a problem. You have all of these things where we think we can throw money to solve it. So I'm kind of just painting the picture there and I'm gonna throw it back to you. We're an interesting situation. A lot of founders are thinking about their cash flow situations. What do you do to make sure you're not running outta money, still hitting targets? And you kind of went through this a little bit too, cuz you guys raised a, a whole bunch of money and how did that affect the team? And there's this, you know, really kind of effect that happens when, when you raise money and everyone's looking at the valuation versus maybe the revenue.
Yeah. Oh yeah. I mean there's so, there's so much there. I mean, I think the whole startup culture around raising capital to grow is inherently flawed. you know, it's a, a lot of stuff people know. I mean, I talk to a lot of bootstrap founders through Dan Martel's network, where it's a lot of people who have these like very niche products, small teams profitable, and they grow, you know, reasonably fast, but not insanely fast. And they've probably got the best type of business you could, you could want. but a lot of times they kind of struggle with this like idea of should we raise, should we not raise . it, it almost always will have an impact, probably negatively on the culture. And that's even if you get great investors at the table, because like you said, it sort of creates a mindset, a culture around grow at all costs.
But also every problem can be solved by just hiring another person. Yeah. And that kind of mindset, once it gets in there, it's very insidious and it sort of starts to infect the whole team. And then later if you realize, you know what I like the VC train is a train that's very difficult to get off once you're on it for a reason. . , because number one, you've set the expectation that we're gonna double in size every year and we're gonna, we're gonna burn cash to do so. Which obviously you set yourself up with this, this ridiculous high, you know, ridiculously high valuation that you almost can certainly never fulfill. and then once you've done that, you kind of have to decide, okay, well if we've missed our targets, we can either raise again at another valuation or at a down round, which means we give up more equity and things that aren't great for founders and shareholders and even employees who own esop.
Or you can, you can downsize . and you can cut head count and you can cut your burn and you can be okay with a, with a lower kind of growth profile. And that's just hard. Like, yeah. It's easy to, to raise cash and start hiring cuz people get excited. Like employees don't look at the balance sheet or the in income state. No. But they don't care. Just look, oh, we're hiring. That's a good sign. The flip side is that if you ever, ever go like, oh, that person left, guess what? We're not gonna backfill them. We don't need somebody in that role. Every, every time you make those decisions, they get seen through this lens of like, oh, we must not be doing well. Hmm. Oh, are we in trouble? And so it's very hard to get off that train once you're on it for that reason. . , because you've set these expectations that hiring equals success.
Yeah. it looks like sh Sean, you jump back in here. Are you, is everything okay? We've still got a few more minutes, Kyle. Let's keep, we'll just keep going. I think it'll, it'll it'll, we're recording audio anyway, so it'll keep going and we'll just, we'll just cut this piece. yeah, I think that gravy train is is is there, right? Like as you are, right? As soon as you start sipping from it, you keep having to, to go back to it and you keep having to, to raise another round and you're looking at buying growth. Yeah. I think, I think you've said it so well and it's addictive. It's alluring, right? So all the founders that you're talking about who have a great business, but they think, well, I could solve this problem if I just had more money, I could solve my problems if I just had more money. That's, that's the, you know, I think the instinct that every human has, right? Even as individuals, you're like, if I make more money, I'll solve all my problems. Right? If If I get more money in my company, I'll solve all my problems. and we run in,
What you realize is that it's the constraint and the requirement for discipline that's actually making you perform better as a company. . , like if you just have carte blanche hire whoever you want tomorrow and you can just go and hire, you know, a hundred engineers, that doesn't actually make your product better. Especially when people are coming in, there's a lot of waste, a lot of time spent, you know, just sort of stuck in the mud and people aren't talking to customers. It's actually in a lot of cases, easier to do more with less. Yes. And so even though the tendency is to go, oh, if we had that one extra hire, we could do this much more. That one extra hire is probably gonna slow down the other people around them for a brief period of time, if not indefinitely. So the discipline, the muscle, like the, I use this analogy of like bulking and cutting, right?
So if people are used to this body building term, it's the idea that like, bodybuilders want to gain muscle and lose fat. And you can't do both of those at once. So you have to go through cycles. There's the bulking cycle where you're putting on muscle makes you a little bit fat, and then you go through a cutting cycle where you eat a little bit less and you, you burn more fat and you lose a little bit of muscle and you just keep going through that cycle. A business, I kind of look at it that way too. If you're a profitable business, you go through cycles where you go, Hey, we're we, we had a great couple of months, we've got a lot of cash in the bank. how, okay, cool, how are we going to, how do we like deploy that capital . . Oh cool. We're gonna hire this person and that person. Cool. And then you get a little less profitable and so you just kind of keep going through these cycles and it's a really healthy thing. Venture capital is steroids,
Yes it is. Yeah. I like this analogy. Keep going. Yeah. It's unnatural. Yeah, right.
You know, we're gonna inject ourselves with cash that are gonna artificially make us look more successful than we are. And then we're, we're gonna look at a gigantic burn on our income statement every month. And we hope that is leading to faster top line growth.
Yeah. Yeah. Yeah. See it's so interesting. So Rae who is the he's the, he's the CEO of Invert. And he was the president of Canopy Growth during, when they went public and he was, he became president afterwards. Bruce was obviously the CEO during Canopy Growth ride. But he said something very interesting when we, we were talking to him. He said, he said, when we went IPO o and we got 5 billion, the issue is that you no longer had to make any strategic decisions, no trade-offs. You could do it all. You no longer had to choose between path A or path B. Do both. And when you don't have to make those choices and you don't have to make those trade offs, you're no longer strategic. You're just, we're gonna do it all. And I think what makes startups successful is that they choose a little piece of the pie and they go all in on it and they build a better product than the big legacy software who's doing it all.
And that's why we have these, right? I'm sure there are proposal softwares that are embedded within larger sales softwares, right? That are probably shitty and not as good, but they're like, ah, it's a feature within a larger product. But you slice it out and you make it on its own and suddenly you've made such a more, you know, better product. But because you had to make strategic decisions and say, we're not gonna play in this area and we're not gonna play in this area, we're gonna play in this one area. But you get venture capital and you say, we can play in all the areas cuz we have all of it. And that, that he said, he said, our biggest mistakes was when we started to get the money and we made every single mistake along the way. He's like, before then we were doing so well. We had, we had a game plan, we had a clear vision for what we wanted to, and that vision became blurry as soon as we got capital.
Well that's why a lot of these bigger companies, the successful ones have like skunk worked type of divisions that they can go off in these little areas not and not impact the core business. Right? Yeah. Yeah. Look at the grave. You can Google the graveyard of Google products that Yeah. Killed because Google would've essentially done the same thing. Here's like a million things we can do. Cause we have the size and scale to do it. But all but 90% of it or more is, is trash. Yeah.
Right? Yeah. Yeah. You know, I think, I think one of one of the, you talked about score scorecards and I think one of the key metrics for us to really consider as we I'm hearing some background noise, is that Sean, even though he's muted, sorry it was No, we're good. We're good. No, it wasn't you, it was some weird I come back to, so one of the key scorecards to tie in kind of your team executive piece, scorecards and I think not burning cash. You know, one of the things I think that a lot of founders don't pay enough attention to but should start and it's difficult because it goes against some of the growth at all cost thinking that happens, but it's the idea of revenue per employee and that ratio, the reason Google does so well is Google has the best revenue per employee ratio and their, their ability to bring in so, so much dollars and their smaller headcount allows them to have all these skunk work projects.
And I think oftentimes in tech, because a revenue doesn't come in until you know's a really long tail kind of effect till you get your hockey stick potentially. Right? Y y you're not looking at revenue per employee cuz you are injecting cash and trying to find that product market fit. But I think if, if you're gonna claim that you have a product market fit, you should really start to look at revenue per employee as a ratio and see how that ratio does to be able to keep it as a scorecard to say, am I, am I burning too much? Right? What's my burn rate? What is what, you know, so, so what are key metrics that you look at when you're looking at this? Make sure I have enough cash. Obviously, you know, we're looking at cash at hand, you're looking at some cash flow metrics, but not every CEO is, is an accountant and knows all the, you know, all the pro you know, I understand the profit loss sheet may be a liability, you know statements and and so on and so forth. But what are key metrics do you look at for this piece of your CEO role?
Well, this, this is why it goes back to the, I think the broader theme around the job of the CEO, right? and because one of those jobs is don't run outta money. It doesn't mean you need to be a financial expert. You can have a you should have a great CFO who's kind of your defence, your offense, their defence. And they're kind of helping you in challenging you and doing all, you know, all the compliance stuff that you need to make sure is getting done. But at the end of the day, if the call is we need to raise or we need to grow or we need to shrink, the CEO can't outsource that decision. They, they have to be the one to, to make that call. And I think that's important and worth calling out now how you track this stuff.
I mean there's, there's a lot of metrics that we can use. Headcount per employee I think is a really good one cuz it, especially if your goal is to be profitable . . and in today's economic environment, even companies that have raised cash probably are moving towards profitability as an outcome that they're striving for. one that I learned recently is really good is burn multiple. So if people aren't familiar with that is, you know, a lot of times when you think about these sort of metrics that aren't real financial metrics, they're more of like business you know, operational metrics like L T V or CAC payback, like how many months does it take to, you know, pay back the acquisition cost? These are kind of imperfect metrics because they don't give you a real sense for how you're doing burn multiples really good because it talks, it basically looks at how much net new ARR did I bring in during this time period, let's just say quarter .
And how much did I burn to do that? Hmm. So if you're a company that's trying to grow fast and you're you're not trying to be profitable, you can still maintain a very healthy burn multiple because you are, you might be burning cash, but you're also bringing in net new ARR so it balances out, right? So if you're at a kind of a one x burn multiple, that means like you're, you know, for every, you, you spend a dollar, you make a dollar back. Yeah. What you see a lot of times though, are companies that have these very unhealthy burn multiples that are like three to four x. So there, for every dollar they spend during a quarter, let's say, or a month they're spending three or four times the amount that they actually get back. A new a r
Huh. Yeah. Yeah.
And so it's a, it's a number that really kind of keeps you in check and holds you accountable.
Yeah, I like that. I like that. I think that's a really good tool for our folks to use. Well, Kyle, this has been a lot of fun, a lot of learning. I'm learning a lot through this conversation and I think it's very timely for us to be able to, to talk about, you know, what it means to be a CEO and a co-founder during these difficult times for a lot of our, our startup founders and, you know, really taking their jobs and learning to be those coaches, to be those CEOs, right? Everything from setting vision to building the exact team to actually you know, auditing those teams and as you said, you know, really making sure you don't run outta money. So with that said, any, any last thoughts, Kyle, that you wanna share, share with us today?
I don't think so. It's been a, been a fun chat and I appreciate you having me on.
Thanks Kyle for for being here. This is, this is a pleasure for us. Thank you.
That's great. Thank you.
Thank you Kyle, so much for sharing your insights with us, for, for giving some of the cold hard facts. the raw truth, the difficult conversations of holding people accountable, the lessons and the amassed wealth of experience that, that, that you have in, in everything that you shared with us. Kyle is, is based outta Halifax in Canada and is won a number of awards, ey, tech entrepreneur of the year for Atlantic Canada, Deloitte, fast fifties. He's, he's gotten all of those and, you know, despite all the awards and all the accolades and he's done, he, he has got this really humble way where he's still very grounded in sharing the difficult lessons of a startup. and and I really appreciated that. So thank each and every one of you for joining us on this episode for listening all the way through.
If you've got any questions for me, you got any questions for Kyle, feel free to shoot me an email at firstname.lastname@example.org. That's where I'll always be. And that's it for today. Thanks for tuning into our episode. You'll find our show notes and transcript over at unicornlabs.ca.podcast. And if you like the content, make sure to rate it, make sure to share it, make sure to subscribe, check out our newsletter for more information. And I'll leave you with this one question. What difficult decisions have you been holding off on? What difficult decisions in your startup have you been sitting on avoiding, unable to move? We want you to really think about that. The hard thing about hard things is really confronting what is making us uncomfortable, but also confronting what will actually move the needle forward. And whether we can put some attention and time towards that. So what hard decisions have you been avoided? Thank you. And that's all for now.