Jeron Paul: From Spreadsheet Idea to $419M Exit, SaaS, Salesforce Acquisition, Founder Journey

00:00:00 - A
We have Jren Paul with us today on the podcast was acquired by Salesforce. It was a $400 million acquisition, 419 to be exact.
00:00:08 - B
Talking to a lot of VCs. A lot of them are like o, you know, I don't know. This is a, you know, a relatively small market, blah, blah. It's competitive. You know, I don't know.
00:00:17 - B
I look for that in business. I look for a quality of obviousness. It's like an effective surprise. It's like, wow, why didn't I think of that? Yeah.
00:00:51 - A
Welcome back to the Startup Ignition podcast. Thank you so much for tuning in. Where we go over everything in your startup journey from idea to exit. I'm Tyler Richards, this is John Richards over here. We are.
00:01:03 - C
Hellolo.
00:01:04 - A
We are in a new environment today because we actually booked a studio, our normal studio and kind of got kicked out and we had to pull an audible and we had to pull an audible on our guest last second. Who we have here today, who we are very excited to have. So thank you for rolling with the punches with us, Jared.
00:01:20 - B
Super happy to be here.
00:01:21 - A
But we have JN Paul with us today on the podcast which I am super excited about to dive into your background and understand more about you and where you're at today. Like, congrats on everything you've accomplished, by the way.
00:01:31 - B
Thank you so much. I really appreciate how but I have.
00:01:33 - A
A bio for JN and I'm going to read it before we get into a conversation because I know everybody's itching to get into the conversation, but we are honored to have you. Jarn, honestly, you are four time founder.
00:01:44 - C
I found out.
00:01:45 - A
And your last one obviously was Spiff.
00:01:48 - B
Yes.
00:01:48 - A
That was acquired by Salesforce just recently. What year was it? Was it last year?
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It was 2024. February was one that technically closed February.
00:01:57 - A
Of 2024 because I know that process takes a long time.
00:02:00 - C
Havingn gone through that. It does, yeah.
00:02:02 - A
And so dates can get a little bit messy.
00:02:04 - C
Can.
00:02:05 - A
So that was February of 2024.
00:02:07 - B
Correct.
00:02:07 - A
Salesforce is a public company. Everybody knows the details of the acquisition. It was a $400 million acquisition. 419 to be exactly. Who's counting?
00:02:14 - C
Right, Jere?
00:02:15 - B
Counting. Yeah.
00:02:15 - A
Who's counting? You have started four separate companies. Spiff was the most recent one acquired by Salesforce. You are now at Salesforce as an SVP of product over there. I on LinkedIn.
00:02:29 - B
That's right.
00:02:30 - A
But you are also an angel investor. I've seen a couple of times you've been mentioned in recent articles as Backing a few of the companies here locally in Utah. One of the ones we took a very hard look at and shout out to Mobley. Yes.
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Yah. Great team.
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We didn't end up investing through our fund, but we went through a very heavy due diligence process with them and they are great guys. So only good things to say there. You're a Harvard mba.
00:02:54 - B
Yes.
00:02:57 - A
I know that at least back in the day of Dev mountain and when we interacted a lot. You are very passionate about coding. Are you technical?
00:03:04 - B
I'm super technical.
00:03:05 - A
Okay, so is that your background?
00:03:07 - B
Not my background. I started coding. My mom actually enrolled me in classes when I was super tiny and Apple Basic classes. But I kind of got back into it after I sold my company scaler. Actually right around the time I was starting Scalr, I started to get back into it.
00:03:28 - C
Oh that's awesomeah.
00:03:29 - A
So anyways, thank you for coming on the pocast. That is our guest today. We're so excited to have Jren here and Jren Paul. If I didn't say the last name, I don't know if I mentioned your last name, did I did. Okay, good.
00:03:38 - A
All right. Jarn, I don't know if you've ever seen any of our podcasts before. We've had some awesome guests on here. So thank you for coming and being one of those awesome guestsled. But on every single one of them we do an icebreaker section o where we kick off the podcast where I just spring something on you and I.
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Have something for you today.
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It's not going to be too bad. It's not going to be too so nervous.
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Can we eat some hot hot wings or something while we doing.
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Would you rather do hot weekee?
00:04:00 - C
Ye Is it just for him or for me too?
00:04:03 - A
Well, I'm going to ask both of you guys. Okay. And I'm going to do just questions. It's not this or that or anything specific. It's just question and you just tell me what you think.
00:04:13 - B
Okay, got it.
00:04:13 - A
O Here we go. What's better in the early stage of a startup, a handful of paying customers or a ton of users that are signing up?
00:04:25 - B
Paying customers are a ton of users. Paying customers.
00:04:28 - A
Paying customers even though it's less paying customers. Let's get a number. 10 paying customers or 100,000 users?
00:04:35 - B
Yeah, definitely pay customers. Yeah.
00:04:37 - C
Paying customers all day.
00:04:38 - B
All day long.
00:04:39 - A
Wow.
00:04:39 - C
Yeah, for me it depends. B2B I want paying customers. If it's a B2C yeah, I want the users.
00:04:45 - A
Yeaheah.
00:04:46 - B
I guess it background is B2B.
00:04:48 - C
There you go. Yeah.
00:04:49 - A
Okay, next one. In the early stages, everybody knows that founders, we have to wear a ton of different hats, right? You're doing this or that or marketing or this or content or finances or whatever it may be. Sales. What is your favorite hat to wear in the beginning when you're going for to a million? What are you liking to do?
00:05:09 - B
Wow, that is a total toss up between marketing and product. So yeah, it's one of those two.
00:05:14 - A
Well, that's the two most important parts. Well, marketing and sales. Marketing leads to sales, but yeah, some sales. Marketing slash product.
00:05:23 - B
Okay, yeahah. And I would say marketing distinct from sales. I love sales but I enjoy the branding, I enjoy the positioning, I enjoy the strategy that goes into finding a wedge and how to position yourself up.
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Are you a pretty creative type?
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I think so. I don'know many flatter myself here.
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Buteah you can humble brag here all day. That's what this podcast is. I love it.
00:05:49 - C
Okay, how about you probably lean towards product in the very beginning because you got to have an awesome product. It's no fun marketing a non awesome product, but they're both important. The key to the early stages of the company is having an awesome product and a present market, a true market that will buy your product. You've got to do both product and market but just making the product where it changes lives and makes people's lives better is super fun. Love.
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Next question. What is the worst customer feedback you've ever gotten?
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Oh my gosh.
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I like this question.
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John, you go first. I'm going to come back to it.
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Customer feedback 2. I was trying to collect on an overdue bill from a customer and I was CEO and HEEs.
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How old are you?
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You're so young. What are you doing? You don't know what you're doing. Just ripping on me for being young and inexperienced and I'm trying to collect overdue payment and he's trying to bully me because he's older and just saying I have no clue of what I'm doing because I'm so young and naive and all I'm trying to do is get paid, man.
00:07:01 - B
I think for me I'll just share a quick story. In the early days of Spiff we were pretty head to head with a company called Captivate iq. They ended up raising from Sequoiael and Iconic.
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Don't you love seeing those when they come out? They just raised 50 million doars.
00:07:17 - B
Oh totally. I think they end up raising 160 million bucks or something. These are pretty good venture firms. It's Aquant, Excl or some folks even call them kingmakers. We had amazing venture backing and love them.
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But I remember in the early days we were head to head with them for G2 and we lost. So that's a tricky customer to lose because they create the grid. That grid where you're ranked in position.
00:07:47 - A
Like the actual software ranking review site. G2.
00:07:50 - B
Yes.
00:07:51 - A
Yes. That's not a good one to lose.
00:07:52 - B
Lost that deal to are probably our biggest competitor at the time. We subsequently want it back. Although we're right now working through some stuff with them. I'm sharing the real stuff here. I hope that that can be somewhat inspiring to entrepreneurs because the conversation never ends.
00:08:14 - B
It never ends. If you're a grade at sales, you'll be in a constant.
00:08:17 - C
Yeah, no, I love that.
00:08:18 - A
I love that. Okay, last one and then we'll get to the actual podcast. When was the moment you realized with Spif? And we're going to let our listeners and viewers learn what Spiff actually is and does. For those who aren't familiar but when did you realize Spiff was going to work and was going to have a finish? How it did, how you exited. Was there ever a moment where it's like oh, this is actually really good.
00:08:46 - B
Yeah. I would say can I divide those questions? So when I knew it was going to work, I honestly so entrepreneurs are notoriously overconfident and naively so. I think they have to be diluted. So I seriously think I knew it was going to work from the minute I started from the go ye I had so much confidence and actually talking to a lot of VCs, a lot of them are like, I don't know. This is a relatively small market.
00:09:16 - B
Thought it's competitive. I don't know. And I just knew I was like small market. That's what they said about Capture, which was my previous company. We ended up getting boat raised by this Bay Area company, you might have heard of it called Carta.
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We loved Capture, by the way.
00:09:32 - B
Oh, thank you so much. But Cararts is an 8 billion dollar company. It's like I don't think this is a small market on the exit side of it. I mean my gosh, I didn't believe that until we were pretty much through negotiations. Yeah.
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And negotiation were very.
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You knew that there was exit potential way longer before that.
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Yeah.
00:09:57 - A
Once you hit some that momentum in revenue and like building and hiring, it's like.
00:10:01 - B
Yeah. But do you ever know if you're going to get boug y Well, I.
00:10:04 - A
Know that the acquisition doesn't actually happen until dollars are in bank accounts. Yes. We're literally worried up until that second. But yeah, I mean, but Tyler, you've.
00:10:12 - C
Been through it too. The morning of the day the money is supposed to be wired. You just praying it goes refresh, refresh, refres. Or you go.
00:10:20 - A
That's all we talk about.
00:10:21 - C
Refresh, refresh, refres.
00:10:23 - A
Or you think it's literally going to fall apart. Second you'like is this actually happening?
00:10:28 - C
I told you we got up early on the day we went public back in 1998 and I was in Seattle. So the market opens at 6:30 and 6:00am I'm going. I hope in the next half hour they don't discover we're not as cool as they think we are.
00:10:40 - A
Yeah, I know.
00:10:43 - C
I don't think you're normal if you don't feel that way.
00:10:46 - B
Yeah, I agree.
00:10:48 - A
Okay, cool. Thanks for joining in. My icebreaker. Good way to get into the mood. Okay.
00:10:54 - A
All right. Now to you. I want to go all the way back here because I know that you even know jn's dad pretty well. Is that how yout twoe make?
00:11:04 - C
Because I know you. We met before that, I think. Did you get involved with Fesping early Princip when you just graduated from Harvard, I think I met you. And when you first went to Vsping.
00:11:14 - B
That'S where it first got you.
00:11:16 - C
But later I met his dad and invested in his.
00:11:20 - A
Vspring is now what?
00:11:23 - B
Vspring is now Run Ventures which was.
00:11:25 - C
Was Signal and now Run now run.
00:11:28 - B
So Vspring rebranded a signal peak now to run gotch you.
00:11:33 - C
Vspring was one of the first early kind VCs in Utah. Back with Greg Warnock, Paul Allstrom, Scott Petty, who still lasted through all. Is he still with Run?
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He'still with Ro I and Run is a recent thing. I think they just rebranded like a month or two.
00:11:49 - C
I Ed Eksrom was there.
00:11:50 - B
Yep. I worked very closely with all of those, but particularly with that actually.
00:11:54 - C
Yeahah.
00:11:54 - A
Okay. What did you do before NBA?
00:11:58 - B
So actually I joined Vsping and I don't think I knew John at this part of John's memory. It's incredible. Honestly, you remember better than I do, which is great. I actually joined vspring in between leaving Monitor, which was a management consulting firm based in Boston and joining Harvard. So I actually joined as a summer intern actually.
00:12:25 - B
So right before going to business school, I cashed out my 401k actually because we had no money, moved back to Utah which is where I'm from. Moved into my parents basement with myife my beautiful wife. It tried to start a career in Utah venture capital which at the time was just so wildly different than it is now.
00:12:45 - C
Yeah it also was interesting though there were about three kind more major VCs UV partners which is now Paleon, Vspring and then EPIC. Epic which was called what before though.
00:12:59 - B
They had a different tomorrow and then before tomorrow it was. I thought it was epic again it was epic tomorrow Epic.
00:13:06 - C
But I rem it was a nebor.
00:13:07 - B
Before was something before Epic.
00:13:08 - C
But to get to be an intern or a young, young kind of analyst or scout or whatever you want to call it, almost all of them had to be Harvard. I'd say half or more of the people working at those firms were Utahs that went to Harvard. Do you agree with that?
00:13:25 - B
No, I totally agree with I literally.
00:13:27 - A
Just came from a class that I teach at BYU and I always start the class off with five minutes of whatever business or startup question you want and today I got the question of how do I get into vc?
00:13:39 - B
Yes.
00:13:39 - A
So is that the advice you are giving to the.
00:13:42 - B
No, it's changed so much.
00:13:43 - A
So it's not just going to Harvard or get an mba?
00:13:46 - B
No. And in fact I I appreciate both of your perspectives on this but I definitely think MBA is very optional now. Consulting banking are still pretty good paths into VC but I actually really believe that business schools become much more optional then of course there's a couple different paths but the classic path is either some form of investment banking or consulting with a top tier firm or fund or some kind of top tier firm then going in or another option is of course to go work for a top tech firm in some kind of a meaningful role.
00:14:29 - C
One of my things too is though I tell a lot of the young people say it's great you want to go do that. What you should do is do your own startup. Yeah's all if you want do your own startup because there's so many of them that are so smart, so talented and they do get networks built if they go there like you got a network built up and all that but right now just the fastest way to get it and be a VC is to be a successful that's selling partners are going to be all exited mostly entrepreneurs mostly and also when you start as a junior analyst or something, you don't rise up and become a partner until you've gone off and done something else. And that's what I try to explain.
00:15:13 - B
To I think you're right, Yeah. I wasn't a partner. I was a level below partner called principal. And so very different path, like John was saying, to become a partner than it is to become a part.
00:15:23 - A
And so you left run Ventures or Signal Peak or what was the original thing you said? V spring. So you let V spring.
00:15:30 - C
Yes.
00:15:31 - A
And then what'd you do?
00:15:33 - B
So I had started two companies when I was business in business school. There's a thing at Harvard called the Baker Scholar, which is the top 2% of all folks at HARS. Very elite, very competitive. Wow. I knew pretty much within about six months that I had no chance of getting that ones on.
00:15:53 - A
I thought you were about to say I was in it.
00:15:56 - B
The opposite. And so I actually kind of ended up really using my Harvard experience to do a ton of case studies. Network like crazy. You have a wonderful experience while I was there. But start companies.
00:16:10 - B
I started two companies while I was there. One was called boardlinink. It was actually started with a professor named J. Losc and we started what I think is one of the early board portals is what we called it back then. It was basically a way to log in as a board member of a public company and get access to analyst reports and the board book and review the financials.
00:16:33 - B
And it was all in a very secure environment, even view the board calendar, even take votes. So we created that, spun that out and I'PUT in big quotes, sold it because we sold it for essentially dollars and a job. I was like an acquire to Thompson Reuters. That's where I went right after business school. And then I had also started in business school another venture that ultimately went on to become a company here locally called Scalar.
00:17:01 - B
So it wasaluation services.
00:17:04 - A
I remember Scalar.
00:17:05 - C
Yeah.
00:17:05 - A
So how did you transition from the Thompson Reuters position to Scalar?
00:17:12 - B
Yeah, actually I went to Thompson Reuters for only about a year and I had interned at vspring at the time before going to business school. And I got a call, so good. One of my best friends actually from BYU was Gavin Christensen, who is the founder and managing partner at Kickstart. Of course we were all college buddies. We were econ majors together, so super tight.
00:17:38 - B
So I got a job at a monitor and then I recruited him into Monitor. He came after me and then I went to Vspring. And then when I left VSping, I said, hey, you should really talk to this guy named Gavin. So he took over my job when I left and went to Harvard. Then when I came back out of Harvard, he helped me get a job as a Principal so I actually got a call from Vsping one year after I had left Harvard saying hey are you interested in packed up our bags and moved back to Utah W that's all.
00:18:16 - C
Yeah. Vspring'the one who backed Gavin and put him in a back corner and said do this small little seed talature easpring just let him have a piece of their office and did their back end stuff and it was hard. The first 8 million do that Gavin had to go raise was really hard. Very hard.
00:18:36 - A
So they didn't partition off their first.
00:18:38 - C
Fund was only 8 million do and it was really hard. They were trying to go to the universities and do stuff. Mean it's hard getting a fund off the grounds. Hard work, very hard, very successful though.
00:18:52 - B
Great.
00:18:52 - A
But at that time there was not a ton of early stage VC Utah.
00:18:57 - C
There was no precedd seed funds in Utah. They were all series A funds.
00:19:03 - A
Because I remember and I think I got involved with what you were doing with capture. That's when I kind of entered in the picture because I know you as the capture guy.
00:19:10 - B
Yes.
00:19:11 - A
At least being a huge supporter of what we were doing in our boot camp and the whole startup Ignition E.
00:19:16 - C
Thank you so much for that but before we get to capture because I do want to talk about that and it is so awesome. Scalar was before capture.
00:19:24 - B
SCALR was before capture and SCALR still.
00:19:26 - C
Went on after you left then.
00:19:28 - B
Yeah, SCALR went on. It's still a very large. It'still going right.
00:19:34 - C
The ones that did the S20 fund.
00:19:36 - B
They did the S20 fund.
00:19:37 - C
That's right. That. Who was your co founders at scalar?
00:19:41 - B
I started it and I brought on early on a couple of folks. So my first co founder was actually a guy named Eldar Fazulianov. Did you know Eldar? He was also a Vsping.
00:19:54 - A
Who's that?
00:19:55 - C
Okay.
00:19:55 - B
He's moved subsequently moved to California. He was kind of an OG in the Utah venture space for again sub partner level. He was like me. There's a couple of those OGs like JD Gardner, Jeff Kll. Everybody knows he was at VSPING with me.
00:20:12 - C
That's he got Star V sp Spoiler.
00:20:14 - A
Alert is coming on our podcast.
00:20:16 - B
He s awesome. Amazing. Yeah I worked with Jeff and jd they were actually the level kind just above me when I was interning. But Ildar and I actually it was really Eldar's idea when I was at Harvard it was this early days of Internet email marketing and so I had pulled together a list of 80,000 entrepreneurs and my idea actually at the time, which didn't really work out, was hey, let's email all these VCs or sory, all these entrepreneurs and let's reverse rate VCs. So I was like, hey, I want them to in a confidential way say how much value did this VC ad?
00:20:54 - B
Kind of like, rate my professor, rate my vc, rate my vc.
00:20:59 - A
I wonder what our score would be.
00:21:02 - B
Probably off the charts. Anyway, y so I was doing that and Illddar came to me one day and he said he didn't know about the email side of what I was doing but he said, hey, I've reversed engineers. This thing called a 409Amodel. At the time this was right when it was going through legislation that every startup had to get evaluation to issue stock. And I said, hmm, well I've got 80,000 entrepreneurs.
00:21:28 - B
What if we just just emailed them and see if they're interested? We emailed them. I think we did 8 do to $10,000 in our first month. Second month was like 25 30. After that it just took offe.
00:21:43 - C
Great timingow Perfect. Little lesson for our viewers and listeners though is just what 409A after the dot com era there was so much shenanigans tr with equity and pricing of equity that the government said no more funny business. If you're going to set a strike price on an employee stock option, you need to establish a value. If you don't have a recent equity transaction, you have to get a valuation and that's called a 409A valuation. That timing after that you were able to go in and start doing 409aaluations because they'now required.
00:22:18 - B
Yeah, that's it. The first person I actually brought in was a guy named Justin Jrry there. Then I brought in Matt Stapleton and Zach Nugent and ended up selling the company to Matt and Zach.
00:22:29 - A
Really?
00:22:29 - C
Ok, so that's how Matt got involved. Oay good. Now Justin, that's a name shout out to him. He's probably one of the top three most skilled Excel magicians I've ever seen. Remarkable.
00:22:40 - A
No, seriously?
00:22:40 - B
Yeah. You know him?
00:22:41 - C
Oh yeah. He did some financial projections for startups at the time and I referred business to him and stuff. But he's like a magician in Excel'totally. True.
00:22:53 - B
He's just a great human.
00:22:55 - A
Well, I think I can automatically guess the segue from Scholar to capture. It's kind of obvious.
00:23:03 - B
Obvious.
00:23:04 - A
Take me there. Walk me through.
00:23:05 - B
I had worked in venture and I now worked in fore hundred nineaaluations. Both are Very capsable centric businesses. I had done so many financial models at VSPing and I just kind of came to this realization that show me a really complex or even just a mission critical spreadsheet where there is no no single source of truth and I'll show you a startup idea. At the time it's crazy to think about now with Carta being as prevalent as is. But at the time the VCs had a copy of the cap table, the entrepreneurs had a copy of the cap table and the lawyers.
00:23:45 - B
The lawyers ultimately were the arbiters. I can almost view this as what do you call the superposition of a subatomic particle when you observe it? It goes from being a 0 and a 1 to just being like 0 or 1. That was kind of like a cap table is like no one really knew.
00:24:09 - C
What position we not only those three parts. It could be co founders. You could have three co founders and they all have a different spreadsheet with different numbers. It's so true.
00:24:18 - A
We were in the pre seed.
00:24:19 - C
We see some pretty crazy stuff.
00:24:21 - B
I bet you do.
00:24:25 - C
I'm just curious how because basically last 20 years it's been fantastic to make SaaS products out of what people used to do in Excel. That's what you did with Capture. That's what I did capture there.
00:24:40 - B
Besides Car.
00:24:41 - C
Car before Carda was called Eshares.
00:24:43 - B
Yes.
00:24:44 - C
So were you one of the first to do a SAS cap table? Were you the first or one of.
00:24:49 - B
The first we started. I think either it was literally days apart from Card. I can't remember which one was first. They might have beat us by two days. I actually were.
00:25:00 - B
I think we incorporated slightly before them.
00:25:02 - C
Really then loved your product and then when we started the boot camp startup peritionion boot camp we had. You guys were great partners with us. Matt would come and teach sometimes.
00:25:14 - B
It's amazing.
00:25:17 - C
Your co founder at bo. Both Capture and Spiff, right?
00:25:20 - B
Yes. And really probably the best partner I had at the time at SCALR as well.
00:25:28 - A
Really? He was at Scaler.
00:25:29 - C
Nice.
00:25:29 - B
All you guys have done three togetherow.
00:25:32 - C
What a great run. We just thank you for that. And also we just referred people to you. It was great. I was really actually kind sorry and sad when you sold the company because it kind of was hard to.
00:25:46 - C
What happened eventually with that?
00:25:48 - B
Yeah, well I was at a youth activity in Moab doing mountain viiking and no cell coverage and we drove into town and all of a sudden I had my cell phone with me and all of a sudden it bl up it started blowing up was like all the messages coming in and most of them were for Matt and I looked down and he basically said and hey we just got an acquisition offer from Carta at the time I was eares but do you want to engage? I was like what if you talk to me? If you talked to me a week before, two minutes before I would have never in a million years guessed that we would have had an acquisition offer from them but we did it was very cool of them in retrospected up kind parlaying that into a bit of a conversation with several different folks and ended up getting a couple of acquisition offers and we decided to sell Capture.
00:26:52 - C
At that time who did you sell to? Yeah who?
00:26:54 - B
We sold it to a company on the Toronto Stock Exchange called Soldium Y and then within a year of us selling just over one year they sold to Morgan Stanley their products called Share Works it's now part of what's called Morgan Stanley at work Morgan Stanley actually.
00:27:11 - C
Did Capsh shares as a product become theirs or did it go away?
00:27:15 - B
It basically went away Y that's what.
00:27:17 - C
I'm saying It was sades I wanted it to say I thought Capture was a great product and it was built for what we deal in early stage.
00:27:24 - A
Ventures OK I've seen the correlation here though it's like board link 409A Cap Table software where does Spiff come from?
00:27:35 - C
Spiff Was that the next one I have after Capture?
00:27:37 - B
Yes, after a matter of fact I.
00:27:39 - C
Don'T know if you remember you and Matt took me to Tsunami in Lehigh to talk about it when you launched.
00:27:44 - B
I don't barely remembering thateah John and.
00:27:48 - C
I probably could have invested why didn't I? I don't know Did I get offered?
00:27:51 - A
I'm not sure now my dad has a lot of those stories I could have invested but I didn't so of.
00:27:58 - B
Course he's also the one of the most active angels in the state so I forgive youah that's awesome no, I.
00:28:05 - C
Remember that though and you were telling me about and I don't know if you remember but I want to hear your story but I just remember that beginning I want to hear what happened and how it came out because I dealt a lot with commissions in my life and when you told me what you were doing I go you're attacking the next thing There you go yeah.
00:28:21 - B
Probably we come from a similar spot there John Again I love looking for spreadsheets that have a mission critical use case in the enterprise we did it to cap tables I Felt like the.
00:28:36 - A
Is that literally. I don't want to interrupt your story.
00:28:39 - B
Please do.
00:28:39 - A
Is that literally what you tell yourself? Like, my thesis in company building is replacing the spreadsheet in enterprise situations.
00:28:48 - B
Yes. I mean that's certainly been.
00:28:50 - A
Is that still relevant for today's listener and viewer though? Like how?
00:28:53 - B
Not as much.
00:28:54 - A
Because does spreadsheets still exist in that way to where you can still create?
00:28:59 - C
I think it's still relevant. But what do you think?
00:29:01 - B
Well, well, it's a very nuanced answer and probably I could hold forth on this for much longer than any of you would be interested in listening, but I would say, yeah, I think it's still relevant. AI is changing a lot right now. I just made a small angel investment in a company called Quadratic. You can look at them. It's basically an AI spreadsheet.
00:29:27 - B
I do think it's changing. I already have some ideas of some things I want to go build and it probably actually won't be directly in this vein. So I do think the immediacy of it. I think there's still some low hanging fruit, but I think it's a little less obvious. There aren't quite some.
00:29:46 - C
Here's one of our sweet spots. So I'm going to give a clearariing call out to our listeners and viewers. If any of you are working on a company with a legacy task that's being done by paper and pencil or Excel, and you want to make a SAS or an AI powered SAS solution, we want to talk to you. Yeah, because that's total. I think it's still a great place.
00:30:05 - C
There's so many vertical opportunities.
00:30:07 - A
Well, the whole reason I asked was because that exact thesis is kind of. Our thesis too is like SASS is not dead. Like a lot of people are saying over the last year OR2 With AI, Sass is dying. Sass is dead.
00:30:18 - B
Yes.
00:30:18 - A
No, there's still a lot of processes, a lot of strategies behind the SaaS model and why that's still a good thing. The average business owner or enterprise owner is not going to control, manage and build his own SaaS yet. We may get there with AI, but we're not there yet. So that's why I asked, is that literal, your thesis? Because we believe the exact same thing.
00:30:36 - B
Yeah.
00:30:37 - C
Let's get back to spipping. Ask him one fundamental question though. Ok. Because this is a great one everybody's talking about. Let's talk about this.
00:30:43 - C
Is AI killing sass. I have this feeling that there's a problem economically. Let's take one of our best investments ever was a golf software management called for up.
00:30:55 - A
Great.
00:30:56 - B
Great. Yes.
00:30:57 - C
Great CEO.
00:30:57 - B
That was you? Yeah, great CEO.
00:31:00 - C
So what happened was, you know Evan.
00:31:02 - A
You know Evan.
00:31:02 - B
Yeah. I believe they were an early spiff customer and they might capture customers.
00:31:07 - C
Well ye but the idea is this. So there'twenty five thousand golf courses, they have to have software to run their operations, their pro shop, their sales in the pro shop, their food and beverage. ###Ved it's almost our 25,000 golf courses going to have a completely custom software built by AI to run that one golf course. And are they going to have staff to interface with that AI? And then the whole industry nobody's running the same software because there's also great efficiencies in a vertical like golf courses to have employees that can move from golf course to golf course and be familiar with the software systems running. It just doesn't seem super efficient to have 25,000 separate custom applications that from one golf course to another nobody knows what's going on with them.
00:31:59 - A
What you're saying is even if we get to the point where AI can do it, can do that does it makes sense still.
00:32:05 - C
Yeah. Because 4up could handle all 25,000 golf courses and they had 60 to 80 employees. What's more efficient in society? That's my question. And they could specialize hyper specialize on features and make it work and be responsible for. Because the people the golf course want to run a golf course, not interface with an AI to build custom software.
00:32:29 - B
No, I gu.
00:32:29 - C
You see my opinion.
00:32:30 - B
I see your opinion.
00:32:31 - C
Ye I'd love somebody to counteract and say no, it's going to be more efficient where I just voice talk to an AI and it creates my custom application for me. Is that really going to be more efficient?
00:32:42 - A
I don't know.
00:32:43 - B
I think so. I'll push back on you respectfully. That's great.
00:32:47 - C
That's I want to hear.
00:32:48 - B
Yeah. Mean I think your voice point is a good one. No one really wants to build software. And my counterarument to your point is no one really wants to learn proprietary software either. They just have jobs to be done.
00:33:02 - B
They just have problems if they could speak to something. You're in Star Trek and it takes care of it. Yeah, it just does it. You didn't really have to learn an interface other than Englishatural lang.
00:33:12 - C
The whole paradigm is going to have to completely transform in order nice coded SAS software to not be needed. And my point is I think we're still long ways away from but as.
00:33:28 - A
AI Allows to build faster, more efficiently, better and quicker. The interfaces and the UI have to keep up with that. So to your point, if we can just interact by voice and press a button and say, hey, I need to schedule a se time for 3:30, just get it done. And so you can have 25,000 different.
00:33:47 - C
So let's articulate second. So in other words, what you're saying is employee A at company A moves to company B, becomes an employee at B and he'just given a voice command over here and a voice command over here and the task gets done. But the AI systems at each company could be radically different.
00:34:07 - A
Yeah, but it doesn't matter.
00:34:08 - C
It doesn't matter because the voice command gets the task done. And that's a huge paradigm shift. But I can see how that could happen. The question will be, is that going to happen in two years or 20 years?
00:34:20 - B
Yeah, question. I think that's the one. What is that? The 400 trillion?
00:34:26 - C
That'dollar question.
00:34:27 - B
About 400 trillion. But that's the $13 trillion question.
00:34:30 - C
Exactly. In my days of yellow pages, I launched the first ever Internet yellow pages in 95. There were people run around saying, print yellow page will be dead in two years. Well, we still have print yellow pages today. Now granted, by about the mid to late 2000s, they were kind of very dying.
00:34:47 - C
But it took 10, 15 years. And the question is, how long will it take? It's going to be fascinating, isn't it?
00:34:53 - B
Yeah, it's going to be super fascinating.
00:34:55 - C
Well, I'll be old by that.
00:34:57 - B
I already am.
00:34:59 - C
All right, back to your original question.
00:35:03 - A
Was how did you get from capture to Spiff?
00:35:07 - B
Okay, so how do I get to.
00:35:08 - A
He was talking about Tsunami. You took him out to Tsunami, told him about Spiff. So where did the idea of spf and maybe introduced to our audience real quick. For those who don't know, Spiff is what is and was and now still is Spiff, but now within Salesforce.
00:35:20 - B
Yeah, it's called Spiff. It'called Salesforce. Spiff, that. I like that name. Yeah, it's good.
00:35:27 - B
They kept the name, which is awesome. And they've kept the product, which is great. And investing very heavily in the product. So it's been wonderful to work with them on that. So the genesis of Spiff was really.
00:35:40 - B
It's a scratch your own itch. It's exactly like John said. We've all run commission spreadsheets, I've run a sales team. I know how much really it comes down to this really great sales rep ahead of sales. We had at capture.
00:35:54 - B
His name was Billy Rogers. I remember going into his room, we gave everybody two monitors on one monitor who had up Salesforce. This is a really funny story now in retrospect, because he had Salesforce up on one screen. Then he had a spreadsheet up on the other screen. And we said, what's the spreadsheet?
00:36:11 - B
He said, o come over here. This, this is the amount the boat that I want to go by. It's superauique or something. He's like, this is what I'm saving up for. And my family's all looking for.
00:36:21 - B
We want to boat. We're really into boating. Here's all the deals I'm working on every month. Here's the ones I think that will come in and the ones that are out. And he merged this spreadsheet that tallied up his commissions with a little bit of a workflow management tool because he'd be like, I really need to focus on that deal because it g give me a lot of commissions.
00:36:42 - B
That the aha moment where we said commissions is not just a small problem is the. We called it the second screen of sales. Yep. CRM and follow up software and some of these incredible tools like outreach and sales loft or now even some of the really incredible new tools are coming out like clay and others. These are your first screen of sales.
00:37:06 - B
The second screen of sales had been completely ignored, which is the human motivating factor which is so critical actually for sales. Sales. I still to this day, for a lot of us to have a background in the church, Jesus Christ, the latter day saints, we'serve missions. It's hard. Sales is hard.
00:37:27 - B
You know what I mean?
00:37:28 - A
Ut talk sells at it.
00:37:30 - B
We're really good at it. It's hard. And I think a lot of times having an ability to stay motivated is critical to being a successful sales rep. That was the idea. We loved the fact that there was a spreadsheet opportunity here because each rep, just like we saw on cap tables, every rep had their own commission spreadsheet.
00:37:52 - B
But the CFO or someone on the CFO staff had their commission spreadsheet. They never talked to each other and there was no validation between the two of them. There was an inevitable and ongoing stream of disputes. Oh, I think I was owed this. And what's this Clawback.
00:38:08 - B
I don't even agree with this. We saw that same dynamic that we saw in capture and then the other big thing we love is we love automating accounting software. And so really office of the CFO is probably my biggest focus. Area in my career with valuations and equity, equity accounting and now table management, cap table accounting. It checked all those boxes for us.
00:38:32 - B
We really spun it up. When we were at towards the tail end of capture, when I knew we were getting acquired was right when we started to spin that up and I actually negotiated with the acquirer. I said, look, I'll stick around for a year, but nights and weekends I get to work on Spiff. They said, yes, that's how it went down.
00:38:52 - A
That's great. So take us through the journey of Spiff. How do you get from where you started in that office looking at your sales reps, commission spreadshee? She getting the idea to selling to Salesforce for 400 mil. O man. How does that happen?
00:39:07 - A
Walk me through that.
00:39:09 - B
Yeah. Oh, my gosh. So many crazy bumps along that road. I'd be super remiss. Not to mention Matt Stapleton.
00:39:17 - C
Really quick shout out to Matt.
00:39:19 - B
Oh, my gosh.
00:39:20 - A
He sounds integral.
00:39:21 - C
We got to get mat on here to everything.
00:39:23 - B
He's incredible.
00:39:25 - C
He's just one of the nicest guys.
00:39:28 - A
Expect a text or email from me. You're coming on this podcast, buddy.
00:39:32 - B
He gets the best human award, in my opinion. And he and I have started now.
00:39:37 - C
I mean, he literally got up in front of Startup Ignition boot camp and taught little segments and he very.
00:39:45 - B
He has this professorial demeanor to him that he can assume.
00:39:48 - C
He likes to teach.
00:39:49 - B
He loves to teach, and he's very good at it. That's what he's kind of doing. Right? He's serving on boards now. He's semi retired. I'm constantly trying to get him out of retirement.
00:39:58 - A
I thought he. He didn't transition to Salesforce like you did.
00:40:01 - B
He did, but only there for. He was there for a shorter time than I was.
00:40:05 - C
The. Only there for how long? It's amazing you've stayed this long because most don't.
00:40:09 - B
Yes. Yeah. It's not always been easy. Not because of Salesforce. What an incredible culture.
00:40:18 - B
And I have learned so much from Mark Benioff and the team there. I just sometimes, very frequently, honestly, I feel like my skill set is adapted to create a lot more value in a different environment.
00:40:35 - C
Yes. 98 out of 100 entrepreneurs would last less than six months with their acquire. If they're the primary or secondary co founder like you and Matt are. It's very hard. We talk about this all the time.
00:40:51 - C
It's so many of this and. No, no, John, I'm committed. I'm going to stay a long time. In about three months in they go this is not what I thought it was so hard.
00:40:57 - A
Yeah, I mean, Salesforce has a little bit of that Google AORA where it's like, oh, it's widely recognized it as like the first sass of all times.
00:41:07 - C
Right.
00:41:07 - A
So it's kind of got like that, ooh, what's it like to work at Salesforce thing going for? So I'm sure it's kind of cool to there stay cool.
00:41:13 - C
How long did Matt stay?
00:41:14 - B
Matt stayed the full year. He did stay he the year. I mean, they gave us some financial incentives that made it very worthwhile for us to stick around of.
00:41:23 - C
That's awesome.
00:41:24 - A
Okay, that's great. Okay, so give me one thing that comes to mind because I know this path is crazy and you already mentioned the ups and downs. Give me one thing for our viewers and listeners. A lot of our listeners are budding entrepreneurs. Right.
00:41:39 - A
These are people who are kicking ideas around, getting going right now, figuring out their business model, figuring out their go to market strategy. Give me one thing that really attributed to the success of spit. And when you think back on it, if I had to put one thing in my mind like this is it, what would that be?
00:41:58 - B
I mean, I know that's hard. It is hard.
00:42:02 - C
You started basically telling the story and say, but I got to give credit to Matt Stapleton. Build off that. If you want your answer.
00:42:09 - B
No, it's great. I mean, Matt, if I could start every single thing that I ever do in my lifeill I die with Matt Stapleton, I would.
00:42:18 - C
You're good to go.
00:42:19 - B
Yeah. I mean, we really are very complimeentary to each other, very different, but we're also enough the same. And we can finish each other's sentences sometimes. So we're kind of work married. And it's honestly been super hard not working with them.
00:42:35 - B
To be honest. It's been super hard for me. Obviously, I think the answer that most people would give and the one I would give is team. But I got prepped for this by saying, hey, if there's any contrarian ideas that you have, sometimes get those out there. So I'll start by saying, saying I think I too would say it's the team, it's CEOs.
00:42:58 - B
I like to really focus CEOs on doing what only they can do. And when you think about the things that only a CEO can do, it's a very small list, actually. It's not complex. It can be very hard. But we don't really do that much.
00:43:16 - B
And one of the most important things we do is, is Set the vision and then get the team. Get that. And really just the team below you, that's really all you have to focus on. It will recursively flow down from there.
00:43:33 - A
What was the size of Spiff when you were acquired?
00:43:37 - B
We were right around 300 people.
00:43:39 - C
300 people.
00:43:39 - B
A little more.
00:43:41 - A
What about earlier though? I know teams still super crucial in the early days, but is it the same answer going to your first million in revenue? Because I don't know if team is as important as when you're a 300 person company. Right. What is the thing that. Okay, if I had to do this all over again and I'm going from 0 to 1 million. What are you doing?
00:44:05 - B
I look for something. This is my little bit country and answer because it flies in the face of so much that you hear around. Hey, if you're trading off the idea versus execution, execution is way more important. I really look for something that I'm borrowing a term by this really f as creativity researcher. A guy who researches creativity.
00:44:24 - B
His name is Jerome Bruner and you can look him up and he has a phrase that I've fallen in love with. It's called effective surprise. And I love that because effect lots of things can be surprising. A joke could be surprising. A piece of artwork could be very surprising.
00:44:43 - B
Wow, that's a very strange way of Starry Night by Van Gogh. Wow, that's a really interesting view of how to look at the sky at night. The effective part means that it has some very practical value. And so I look for effective surprise. I look for wow.
00:45:02 - B
And the effective surprises have a quality of obviousness about them in retrospect. There guy theres a famous scientist named Thomas Huxley and when someone explained to him Charles Darwin's theory of evolution, he said, wow, that seems so obvious. Why did I not think of that? And it's true. Even with Einstein's idea of space and time dilating, hard to get your mind around that. But there is kind of an obviousness to it.
00:45:34 - B
It's like, wow, that makes all this make sense. You know what I mean? So I look for that in business. I look for a quality of obviousness. It an effective surprise. It's like, wow, why didn't I think of that?
00:45:50 - B
When you have an idea where you're like, I'm glad I did think of that.
00:45:53 - A
So if I understand, are you attributing it to the actual product and problem solution that you were bringing to the market? Spth it was just like. That's what you say. The product was just that good? It was just that much of just.
00:46:06 - C
Reflecting back, I would say like this. Like take Capture, for example. A huge problem was you need a single source of truth to prevent litigation problems, fighting arguments, et cetera.
00:46:17 - B
It can be serious, right?
00:46:18 - C
Yes. Having a spreadsheet, especially a non collaborative spreadsheet like Excel and having eight different versions amongst VCs invested and the founders is going to lead to problems. You said, well, obviously it would be smarter if we had one person responsible and one piece of software responsible for doing that. And SAS can handle complex things more than in making all these formulas in Excel. That seems obvious in hindsight.
00:46:47 - B
Yes.
00:46:48 - C
It could have been done 10 years earlier. It could have, yes. Right. Yeah.
00:46:52 - B
The software exists.
00:46:53 - C
Salesforce and Amniture here in Utah, we're doing SaaS businesses.
00:46:56 - B
Totally.
00:46:57 - C
And 15 years before we figured out cap tables need to be satied. Then what you're saying is the same with commissions. You said the first screen is CRM and tracking contacts and where I'm at with customers. But what motivates me to be a top salesman is I want to get that boat. And building that to the process seems obvious in hindsight, but you recognize something.
00:47:20 - C
That's what you're saying that per.
00:47:21 - B
Is that what you're saying? That's what I'm saying. I would just maybe add one thing to what you said. I loved everything you said. The surprise element can be quite deep. What I mean by that is it may not seem very surprising that cap tables needed to be aggregated.
00:47:35 - B
But whenever I talked to VCs at the time, their answer was like, this is a $10 million market. Who care? No one wants to. So there was a surprising element to my belief that this is a much larger market than what you think. Similar. I saw it again with commissions, you're solving some small way down the value chain problem.
00:47:57 - B
And I was like, really? There's $8 billion in commissions that are flowing around.
00:48:02 - C
They're obvious to me. But in hindsight, now every company in the world has a cap table. Every company, whether they've put it into a spreadsheet or not, it's totally true. And every commission sales position in the world has to track commissions.
00:48:19 - B
That's right. That's right.
00:48:21 - C
And has to track customers and the motivations behind sales.
00:48:25 - B
It 80 million sellers.
00:48:27 - C
In saying it seems like a small thing, but when it's very broad. That's incredible insight. Tip my hat to you, Jon, for your ability to recognize it. Yeah, I've learned a lot from you just sharing that.
00:48:39 - B
Oh, thanks.
00:48:39 - C
We're going to build that into our venture fund scouting activity.
00:48:44 - A
I know. Really resonate. What did you say?
00:48:46 - B
It wasive surprise.
00:48:47 - A
It's effective surprise. Have you ever heard of the purple cow from Seth Godin?
00:48:50 - B
I have heard of the purple cow.
00:48:52 - A
Yeah. It's like the same principle.
00:48:53 - B
Principle.
00:48:54 - A
It's like you kind of just have to have this wow factor to the market with the product that you're bringing to the market. The market just has to be like wow, that is cool. Oh, I've never thought of it that.
00:49:02 - B
I never thought of a purple cow.
00:49:03 - C
Yeah.
00:49:03 - A
I never thought. I didn't know purple cows existed but by the way they purple and what.
00:49:07 - C
I like what Seth Gon says when everybody's a purple cow. Now it's something else.
00:49:11 - B
Yeah.
00:49:12 - A
You got to be a yellow cow or green cow or whatever.
00:49:15 - C
Sure.
00:49:15 - A
Okay. So I like your answer. When you're scaling, when you're hitting scale, getting to that 300 person startup, its team in the beginning it's that effective surprise. It's the wow factor and just having a good product that serves a good market. Y I like that.
00:49:37 - A
Okay.
00:49:38 - B
Having some deep insight that others. It's kind of like seeing $20 on sitting on the sidewalk that everyone else is overlooked. They're out there. They really are. But you have to see the world differently somehow to be able to see it.
00:49:52 - B
It's probably under some bushes over thereah.
00:49:55 - A
We talk about these must have products versus these nice to have products.
00:50:01 - B
Yes.
00:50:03 - A
A lot of people always ask how do you know when something's must have versus nice to have? Because almost everything starts out as nice to have.
00:50:09 - B
Right Tyler? I totally agree.
00:50:11 - A
When you're super innovative or like bringing a new product to market, it's like I don't think the customer even knows how much must have something is until the entrepreneur and the innovator actually makes it. Must have it establishes the market like that.
00:50:24 - B
That's brilliant. I'm going to quote you on that because I totally agreee.
00:50:28 - A
Establishing the market and creating the market. I have questions about Salesforce and the process that you went through with that behemoth of a company.
00:50:36 - B
Sure.
00:50:37 - A
I don't know how interested my dad is in this, but me going through this with a public company, being acquired by a public company is just such a crazy beasty. And I just remember getting the initial due diligence checklist that them and their lawyers and attorneys asked for. I was acquired by a large education company and it took us that's so long to get all of the things with our Attorneys and everything on our side buttoned up to actually get it to a presentable state to where they could actually thumb through it. And then that process of just through it took months of time. Months.
00:51:09 - A
How long was it from when you got the first ping that Salesforce was interested to when you actually got the money in the bank account? Done.
00:51:18 - B
Okay. So the first ping that they were interested actually came two years before the acquitionition.
00:51:22 - A
Wow.
00:51:22 - B
Yeah. But there was an interesting weirdness there.
00:51:25 - C
Yeah, I want to hear it.
00:51:26 - B
They tried to acquire us two years before the deal went down. Sorry. I guess it would be. Let me just make sure. No, it's a year.
00:51:36 - B
Sorry. So they tried to acquire us the year I. Sorry. I exaggerated on accident it a year before they acqu. They reached out to us around Dreamforce of 2023.
00:51:47 - B
2022. Dreamforce of 2022 and they said we'going to make an acquisition in this space. We like you, Salesforce ventures is a backer you but we're just going to level with you. If it videos and you we're going to go buy one of your competitors. You better come.
00:52:02 - B
You better come quickly.
00:52:03 - A
N they were trying to scare it.
00:52:05 - C
Yeah.
00:52:05 - B
It was a very strong arm tactic that ended up then. I don't know if folks are followers of Salesforce, but there was actually a shareholder activism like effort and they had to shut down their m and A committee. We were like, thank goodness. Because that meant for us that we could keep building in. We didn't want to get acquired at that time.
00:52:29 - B
We had probably less than half of the revenue that we were going to ultimately have a year later. Way less than half the multiples and the amount of money we would get if we had to sell at that time were not super attractive to us. So we were just like. When they laughed and said, hey, we can't do the deal now. We were like, oh, no problem.
00:52:51 - B
They were like, hey, but we'll stay in touch. We're like, great, let's stay in touch. Awesome. Perfect. They're still interested in us, but we don't have to sell.
00:52:57 - B
Well, a year went by the nextam right before the next dramforce, which would have been Streamforce in 2023. They said we want to spin up acquisition conversations again in dream for is usually in October. I don't remember the exact time I was but the deal started negotiations in earnest late September, early October. The deal was inked in December and the deal was finalized in February.
00:53:23 - C
That's where for that large.
00:53:27 - B
I will say Salesforce M and A machine is probably. I can't imagine a better large company M and A machine on so many levels. They are so professional, they are so fast. They're so good at what they do. It's really remarkable.
00:53:44 - C
You said something that I always like to teach to entrepreneurs too to understand because corporate venture is actually a big funder of startups. People don't realize it sounds to me like Salesforce Ventures invested in you.
00:53:57 - B
They did.
00:53:57 - C
I didn't. Just to make sure the listeners and viewers understand this is that a huge swath of vent venture capital in this country is actually not from venture funds and angel investors but from corporate venture. Arms's and almost every major big company has two things. A corporate venture arm which would make an equity investment in an early stage company. Like they did in Spiff in your case, right?
00:54:22 - B
Correct.
00:54:23 - C
But then they have another division totally separate from the ventures is their M and A department correct. Which is in charge of acquiring customers acquiring targets.
00:54:34 - B
Totally.
00:54:35 - C
Whether or not Salesforce Ventures was invested in you they still could have been interested in you. But did the fact that they made an investment in from their venture arm enhance the desire of M and A.
00:54:49 - A
To acquire yet did you get close to them?
00:54:51 - C
Certainly. This is what I try to teach in our boot camp to the entrepreneurs that they should understand that it might be a wise thing to check out the big behemoth players in their market for a venture investment. I don't know if you know but pure was the IoT device. They were in our first cohort of boot camp.
00:55:10 - B
Yeah.
00:55:12 - C
The interesting early in their history after they got 100,000 dol from an angel investor their next 500,000 dol was actually from a multi billion dollar fragrance company that just wanted to know what they were doing be inside the tent and they gave them 500,000 DOL grant. They said it's not going to be debt, we're not going to make an equity investment. Those are harder to get through. But we're just going to grant you money.
00:55:34 - B
Unbelievable.
00:55:35 - C
Yeah I know. And that's Pure now purea does like 200 million do a billion dollar company but the whole point is that I just wanted listeners to understand that this is a whole world that's also available to you as an entrepreneur.
00:55:46 - B
I love that.
00:55:47 - C
I love that. That's cool that you got the ventures to go into you and t I didn't know that. That's a great path.
00:55:54 - B
Thank youeah.
00:55:55 - A
So where did we cut you off there on that?
00:55:57 - B
You didn't cut me off at all. Any time, either of you. I'm learning more from you.
00:56:02 - C
I think a lot of people in Utah aren't fully aware of the size of your transaction and your exit and how well you guys did. And I hope that this is a small piece of just another great feather in Utah's cap. But what you've done, I tip my hat to you for what you've accomplished.
00:56:19 - B
It's pretty amazing's a lot coming from.
00:56:21 - A
Before we close, I want to dive a little bit, just briefly, just topically because we don't have enough time to go deep on your angel investing.
00:56:28 - C
Sure.
00:56:29 - A
So you're now obviously turning around and investing in the next generation of entrepreneur, which is super fun. Like when I sold when he sold. I think that's just the natural path of an successful entrepreneur as you turn around and invest in the next generation. It's true. What are you looking for in angel investments and how active are you?
00:56:49 - A
I feel like you've even on this podcast set a handful that I didn't know about. And then I went and researched you in preparation for this podcast and I found out a ton then too.
00:56:57 - B
You're pretty active right now. I'm really active actually. So. But I take a strategy that is maybe not the most popular or maybe not even the best for optimizing irr. But invest.
00:57:10 - B
I write a lot of small checks right now. Smart partially because I'm trying to get my name out there. And then on several of the ones that I have extreme conviction or that are showing a lot of progress, I will write for me a much larger check. And I generally look because I'm not trying to compete with venture capital firms. I really actually that's one of the things I most look for is I'd love to co invest alongside either of you.
00:57:39 - B
I'd love to co invest alongside a fund that for me is like hey, they're going to do some diligence that I won't have time to do. They're going to have deeper pockets than I will. So I know it's not just going.
00:57:50 - C
To.
00:57:53 - B
Not make it to the next level. Those are things then I try to look for areas where I have some unique insight into what they're building. I invested in an AI spreadsheet. I feel like I know that spaced reasonably well. Invest.
00:58:07 - B
I've invested in some sales stuff that would be highly related. That's cool to what I know. So yeah, that's kind of what that.
00:58:15 - A
Kind of matches the thesis of our fund too. We're super early pre seed fund and I think a lot of investors that are actually in our fund that they have that same logic, like, okay, you guys are going to be able to do more due diligence, dive deeper and understand what makes a good opportunity versus what doesn't make a good opportunity. So I think that is very similar. And I think you investing small and then going big on the ones you.
00:58:37 - C
Feel a lot of competitive, that's a try and two strategy. Yeah, that is ra one of the most prolific and successful angel investors in the history of Utah, Scott Frazier. Frazier. Scott Frazier. His whole thing was I put a little money in in a whole bunch of deals and then I double, triple and quadruple down on the winners and it's paid off big timeid off time I sat side by side.
00:58:59 - C
Now he has his sons doing this, I have my son doing it, but he's a legend. And that's a great philosophy got you're following there.
00:59:07 - B
Thanks.
00:59:07 - C
That'good.
00:59:07 - B
Means a lot come from you. Seriously, it does.
00:59:10 - C
It's.
00:59:10 - B
I love Scott too.
00:59:11 - C
You know that a lot of people that have new wealth from selling their company the first year of angel investing, they usually get burned and lose a lot of moneyes. So all of us have been through that and what happens is by you kind of saying things you've learned, I think you can avoid a lot of that. So that's really cool.
00:59:30 - B
Thank you.
00:59:30 - A
Oay, let's wrap it up.
00:59:32 - C
Yeah. So let me ask two questions.
00:59:34 - A
Two questions and then we're got to'one.
00:59:36 - C
Question with to answer. If you had two minutes with an entrepreneur. Our audience are budding entrepreneurs or in the throes of early stage. Two things, two quick tips like what are the two most important things you could tell a coo, founder of company with two or three founders and just getting off the ground, what would you tell?
00:59:56 - A
I'm actually interested to hear what you're saying here. Put you on the spot.
00:59:59 - C
Top one or two things that you really feel would be good for them to understand and know.
01:00:05 - B
Oh my gosh, John, I want to hear from. I want to learn from you more. And then it'spur some thoughts.
01:00:10 - C
They're pretty general. But if you were Talking to yourself 20 years ago, what would you say.
01:00:14 - B
To yourself to me right now? I feel like I'm talking to myself a lot. And because honestly I'm bringing. I learned this phrase at Salesforce called beginner's mind. Have you heard about this from Zen Buddhism? So cool.
01:00:29 - A
I haven't.
01:00:30 - B
Zen Buddhism, one of the concepts they teach there is this concept called Beginner's mind, which is Shoshiin. And it means even if you're an expert at something, it's often helpful to try and erase all your preconceptions and go in with a totally clean slate and try to reason up. Elon Musk will call this reason up from first principles, but try to eliminate your potential biases. And one of the things I'm really working on, because I am starting to think about new ideas right now and something I might want to go do, or maybe not, but as I'm doing that, it's really important for me to realize that actually sometimes your success can become your biggest impediment to. To knowing what you need to change.
01:01:17 - B
For me right now, I'm a little swimming. To be honest with you, John, I feel like AI has disrupted so many things. I was on the phone with Woody. Do you guys know Woody Clementson over at Ask Elephant? The CEO of Ask Elephant. Cool company, Cool guy.
01:01:32 - B
And he said something that's just been deeply resonating with me recently. He said. He said, jn, in the era of a, your software isn't special. So this does go back to our debate. Who knows who's right?
01:01:46 - B
I actually think you're largely right. It's not immediate, but there is this element of your SaaS, your software, it's not as special as it used to be. It's a lot easier, even if you're not all the way there.
01:01:57 - C
You've seen that where software engineering is changing.
01:02:02 - B
It is. Which isn't to say it's gone away, by the way. But yeah, I'm thinking a lot about what it means to start a company in the arra of AI. It's very different. I think that's what I'm actually trying to bring a beginner's mind to the problem.
01:02:18 - B
I like that.
01:02:18 - A
Yeah, that's great.
01:02:19 - C
Great advice is it's often our own expertise sometimes can get in the way because we start concluding that we know things that maybe in this environment we don't know.
01:02:31 - B
Yeah, it's so true.
01:02:32 - A
That's good.
01:02:33 - C
So true. Great.
01:02:35 - A
Okay, let's wrap it up because we've had.
01:02:38 - B
Don't you have any final thoughts?
01:02:39 - A
Oh, I have a ton of thoughts.
01:02:40 - B
Answer your own question. Could you mind if I ask that? Can we go two minutes over so.
01:02:44 - C
I can hear you?
01:02:45 - B
I want your answers.
01:02:47 - A
I don't know if they're here to listen to us. They're here to listen to you. Jereared. Come on. No, what you said kind of reminds me of the Behavioral change.
01:02:55 - A
The five steps of behavioral change where we're uninformed optimists. At the very be hunters at the very beginning, we're uninformed optimists. Until then we're informed pessimists because we start learning so much about the market that we start hating what we're doing. Like, did I make the right decision? Oh man, this is going to be so difficult. But it's about coming out of that.
01:03:14 - B
How of that informed pessimism back into an informed optimism.
01:03:17 - A
Yeah, informed optimism, right. Or there's two choices, right? You can go from that informed pessimism into the valley of despair or you can actually go climb out of it and become an informed optimist again.
01:03:29 - C
Right?
01:03:29 - A
And I think that's just like the whole entrepreneurial cycle. So that really resonates to me.
01:03:33 - B
I like yours better than mine.
01:03:35 - C
I really didn't.
01:03:37 - A
It's just something that we talk about in our boot camp because mindset'a huge thing too in entrepreneurship. And I think a lot of execution comes from the belief and the confidence of the entrepreneur themselves. Especially as I'm around a lot of students lately and just seeing the deer and headlights look in their faces and just telling them, hey, you guys can do this. Trust me, if anybody can do this, it's you in this state at this time in your life that you guys can go and make world changing products and be innovative and disrupt huge industries.
01:04:05 - C
Rightome mine o I'll say this, it's back to first principle. I say just remember your task as a new startup is actually to find product market fit in a business model, not the widget you want to build. You have to actually find a product product that will solve somebody's problem or meet their needs and they want to buy it before you start building it. So it's back to lean startup principles. And it's just again, the first phase of a startup is actually not a company.
01:04:37 - C
It's the search for a business model and product market fit. Then the second piece of that is all along the way you'got to check yourself. Am I acting on assumptions or am I acting on facts? So much of the pain, the loss, the failure comes from us assuming we know something when we really don't know it, we assume it and then we go build a product. We go invest a lot of marketing dollars. We do a lot of premature scaling because we are re assuming we know something that we actually are.
01:05:07 - C
I love just an assumption, not a piece of knowledge. So it's back to that. If I had say One thing, remember your product at the beginning is actually a validated business model. And you do that by acting on facts, not assumptions. And that's the thing all the time, say, well, how do you know that this target market will pay $499 for that?
01:05:30 - C
How do you know that? And they go, well, it just seems rightkay. What do you mean such a cool thing? Who have you talked to? What research have you done? That kind of thing. That's the thing that we keep seeing time and time again is just people acting on assumptions. And the most expensive thing to do as a startup entrepreneur is to act on assumptions.
01:05:48 - B
Yeah, that's a great point that I.
01:05:50 - A
Think we can conclude with. JN's journey is not acting on assumption. See's actually done the exact opposite. Probably obsessively looked at markets and products and taking your journey of finding these pains with these spreadsheets and converting them into amazing SaaS products is awesome.
01:06:07 - B
Thank you.
01:06:08 - A
And obviously a repeat founder. You obviously know what you're doing, right? Not a lot of people can say, hey, I've sold three, four companies. Right. And even though your first one you say was zero dollar for the time that you put into it, I think we can all claim that kind of startup like hey Spiff, congratulations again. Two of us in the pudding.
01:06:25 - A
Yeah, I mean you so okay, let's wrap it up and thank you, Jaren, for coming on for the podcast with us. It has been such an awesome conversation. Hopefully all you viewers and listeners loved it as well. I'm sure you could reach out to Jarn, find him on LinkedIn, find him on social media. I'm sure he's such a nice guy and he's angel investing.
01:06:42 - A
I don't want to throw too much your weight O that's great. But Jarn is a smart guy. Trust me, you want him on your cap table. That is 1000% true.
01:06:50 - B
Right?
01:06:50 - A
Okay. But thank you. This is another episode of the Startup Ignition podcast. Thank you so much for listening. Please subscribe, like share this with their entrepreneurial friends.
01:06:58 - A
We love any kind of comments that you throw away, any kind of questions. We're here to answer them. So thank you so much and until next time, thanks for tuning in. That's it.
01:07:15 - B
###C rock it back 2 roc bike.
01:07:19 - A
Rock rock it back rock.