Episode Transcript
[00:00:05] Speaker A: What's up, founders? And welcome to the In Demand podcast where we talk all about how to troubleshoot growth for your PLG SaaS. I'm your co host, Asia Arangio, the CEO and founder of DemandMaven.
[00:00:15] Speaker B: And I'm Kim Talarczyk, client services manager at Demand Maven, where we help SaaS companies reach their toughest growth milestones.
[00:00:22] Speaker A: All right, Kim, let's get into it.
Okay. Yeah. So the topic for me is why companies get stuck at this, like, 3 to 5 million ARR mark, which we've seen before, like a few times. And I'm starting to notice there are patterns about, like, why companies get stuck here.
[00:00:42] Speaker B: Yeah, it seems to be, it's a hump to get over.
[00:00:46] Speaker A: Like a million is the first milestone, but it's almost like if you want to get to 10, like, you have to get over this, like, midpoint. And the midpoint seems like it gets, like people get stuck at this midpoint and it's this like 3 to 5, 4 to 5 million.
And we've, I, we've worked with enough companies now. I won't name any names, but we've worked with enough companies now that there are patterns about why they get stuck here. And I just think it's really interesting and I kind of wanted to unpack, like, what that is and also too, how I'm thinking about helping some of these orgs, like, like, overcome this challenge.
[00:01:25] Speaker B: Yeah.
[00:01:26] Speaker A: So for context, and again, I won't name any names, but I, but I am working with a company and, you know, part of the process of troubleshooting growth. So. So growth has been flat for them for what, six, eight months, Almost a full year. Growth has been flat, which basically means they're adding new customers at the same rate that they're losing them. And also there's not much expansion revenue happening.
So already pricing is a little bit of a challenge. Now there was another company that we worked with where they had. Oh. If they had like completely redone their pricing, they, they worked with a really awesome pricing consultant pricing firm that we really admired and respect. And they had the opposite challenge where it was like, they like, their expansion revenue actually was doing pretty great, but they had this like, they have this like, long term sneaky churn. And also, again, like, they just weren't adding enough new customers on top and they were actually growing a little bit faster than this other company. But, but that was a little bit more imbalance. But going back to the company that I'm, that I'm thinking about now and that we're working with now. So yeah, like they, they've had flat growth and their team structure. However, there's, there's a pattern in these team structures where I'm noticing like companies that get stuck at this like 4 to 5 million mark, they usually have very flat organizations, meaning they might have a marketing team, they might have an engineering team, they might have a support team, they might have sales. But everyone reports to the CEO and already that creates very weird bottlenecks. And what's also interesting about this particular company is that they also have a lot of expertise.
The team is actually very experienced and we don't usually see that. Usually we see like underhiring is typically what a lot of like bootstrappers especially tend to do. They'll underhire for a role, meaning they have a lot of like big expectations for a role. But, but they won't necessarily hire a person who has like all of those skills or experiences that they really need and like that they really value.
In this case it's the opposite. But when I think about all of the other businesses that we've worked with that are like this, that actually seems to be the case. Like whether it' consultants or like just like really highly experienced individuals.
In this case like everyone who's experienced, they actually are like W2 employees is what we'd say. You know, in America there's another company that was kind of stuck at that like 4 to 5 million mark that we worked with, but they didn't really have any real full time employees. It was all consultants, contractors and agencies. And they were like there were like 20 or 30 agencies that this company worked with and like freelancers and contractors. So there weren't any real like true full time employees who had real ownership over anything.
And it was a very similar, very similar growth blockers.
And yeah, it's interesting because like what's making these companies stuck is in my opinion more about their operations and their processes than it is about their ability to deliver something meaningful in customer acquisition or activation or retention.
I don't know if that makes any sense, but I'll pause there.
[00:04:57] Speaker B: Yeah. So is it about like they're not set up to scale what's working 100%.
[00:05:05] Speaker A: 100%. And I think like for both of the companies that I'm thinking about at least, like it looks a little different for each of them, but it's the same general problem. And it's like the way that they're structured, they're actually not going to be able to scale. One company has A lot of analytics debt. Like the amount of analytics debt in this company is also like extremely high for how big they are. Analytics debt means.
Yeah, so analytics debt is essentially, you have grown so much without good analytics and good data and by the time that you actually need that data and like need that, those analytics or need that whatever, whatever. You can't because either the product can't like there's something there, like there's technical debt with a product. Like maybe you can't literally implement like an amplitude or mix panel because you're on like a really ancient framework or something that like, just like you'd have to like rebuild the product basically to be able to use product analytics.
Or it could also be, you know, you've just never paused everything for a minute and like took the time to actually implement something that a growth team can use. And so instead what you're doing is like, you're kind of cobbling together like behind the scenes data analytics and insight. But it's, it's never going to be as powerful as if it were, you know, real time, easily accessible and like there's actually like a process in an engine. Because basically what's happening is anytime the growth team has a question about something, engineering has to pull together that data. Engineering is also a bottleneck because they're trying to push features and they're trying to build stuff and the engineering team is relatively small and the growth team is relatively big compared to them. So even if that were efficient and effective, you'd still have the bottleneck of engineering basically having to stop and crunch numbers and crunch data of which that they're not necessarily going to always 100% understand.
It'd be much easier and much more straightforward if there were product analytics tool in between them where the growth team can query and build their own reports and build their own dashboards and also you know, head of product can kind of work with growth team as well in terms of you know, like, well what events can we build and like build into the product and you know, pipe that over into the product analytics platform and blah blah, blah.
And also like, you know, there's product analytics, but there's also just like other analytics platforms like BigQuery and Looker and et cetera. And today none of that exists for this company. But it's because the technical debt is so big that they would literally have to rebuild the product to be able to even implement anything like that. So everything that they're doing right now is like a hundred percent manual. And you know, engineering basically has to, literally has to stop work. So that way they can go and answer these questions. But they, but they aren't necessarily like in the best place or position to do that. So anyway, so you can see the inefficiency here. Like you've got this super experienced growth team and it makes it really challenging for them to be able to do their best work because there's such big technical debt and analytics debt that they just, they don't even have access to the right information.
And.
[00:08:16] Speaker B: Right.
[00:08:17] Speaker A: There's a flip side to this. So another company that we worked with that was in this like similar boat of like they're stuck at 5 million, it was the opposite. They had good product analytics, but there's no one person.
This company has a completely like, there are no full time employees. Like it's like 50 contractors and a bunch of agencies and there's, there's no like head of growth or there's no like real head of product that isn't the founder or what have you. So like there's no person like who owns, so to speak, that like the data that's in there or even is responsible for like looking or checking things or like trying to find opportunity or like making recommendations for what else they should be tracking, etc. Etc. So, so they have the opposite problem where like they actually have product analytics but there's no person who's designated to use it really. And you know, they, they bring in new contractors and, and consultants all the time and you know, people kind of poke around, but that doesn't necessarily mean that they have ownership over anything. It just means that like, okay, it's there if they need it, but for the most part like no one's really using it.
And that's also, I think, just as it's less painful because at least it's there, but it's, it can also be very painful because no one's really owning that thing.
[00:09:33] Speaker B: Right. So looking at it over a longer period of time.
[00:09:36] Speaker A: Exactly. And yeah, so it's interesting because like already there are very clear bottlenecks.
So like if you have a super flat organization, for example, you've got a bunch of direct reports, you're the CEO, the amount of context switching that you're going to have to do between each and every single one of those people, making sure their questions are answered, making sure they have what they need. But then also you're trying to thread together all of their activities into something that is cohesive.
But what I, what I find is when the CEO has too many Direct reports, that almost becomes impossible. Like it's impossible to create any kind of cohesive story.
And, and part of that is because all of these direct reports, whether they're contractors or full time or agencies or consultants, none of them, they're all siloed from each other. So like none of them talk to each other really.
And because there's no like internal leadership, all of that has to really come from the CEO. And the only time I find that this works is when the CEO is hyper clear about the strategy and knows exactly how to communicate that to all of the parties involved. But what I find is that that's actually never the case. Usually it's like, it's a lot of, you know, agencies, consultants, contractors coming to you, the CEO with ideas, and you're, you're basically trying to figure out how to land all of these planes at the same time and hope and pray that it's all at the same airport and like that, like you're even at the same place. Because you gotta translate all of these ideas and strategies into something that's gonna be cohesive. And my guess is if you don't know enough about the work, you won't be able to do that. It's just impossible to be excellent at everything like you, you're not gonna be able to do everything amazing. And also too like if you've never had everyone's job, then you don't, you're not gonna know how to tell other people how to do it.
So realistically speaking, like this is not the ideal scenario. What would be more ideal is that you have, especially at the 3 to 5 million mark, I would expect to see internal leadership like, I would expect to see like a senior marketing manager who has direct reports. I would expect to see a head of product who has direct reports or at least like, at least ahead of product with an engineering team that can support that. If you have product led sales assist or sales led as a go to market motion, I would expect to see, you know, an AE, SDRs, et cetera. There's some type of, there's a, there's enough hierarchy to create the structure that you need. So that way the CEO is really only directly. So CEOs really only directing strategy or collaborating with like a few key partners and not uh, I say, I say partners, a few executives or leaders internally and not you know, 50 people.
So you go from 50 or even 20 down to like four or five.
And also I find like this phase too is, is a weird one because you know, we've Talked about the transition of founder to CEO quite a bit on the pod, but I feel like it's most apparent here. This is the phase where it's really clear if the founder really understands the job of CEO and how they become and transition and transform into that.
And I think it's, it's really, it's just. Yeah, it's just really clear to me when that is misaligned. And so I actually talk about this with my business coach a lot. And this is something too. Like I'm speaking from experience of. I have had to make similar transitions for myself both from like not just thinking about it purely from a founder perspective, but also from like a CEO perspective and then similarly not just thinking about it from like a marketing contributor perspective, but from a CMO perspective that like I see to executive layer. Like that transition is very real and necessary if you're going to create something that's sustainable. And also too like, you don't get stuck because it is a tough transition to make. And I don't, I don't say it lightly, I say it so easily. But like it, it's important. It's really important.
[00:13:54] Speaker B: Yeah, it feels really hard too. And I think you, the risk too is adding too many layers too soon and you go from flat to, you know, too vertical. And that doesn't work either.
[00:14:08] Speaker A: Totally. Yeah. Yeah. I think they're. I think about it going from like, you know, there's two layers to three and I think that is enough. So if it's, if you're the first layer and then all of your direct reports is the second layer, that's a very flat organization. Right.
If you just added one layer in between you and everyone else that I think that would be enough at this stage and we wouldn't need to see super robust like internal structures until like you get to a certain level. And I guess tough for me to say like exactly when you would even think about, you know, when do you get like a chief? When, like when, like when do you get a cmo? Like a full time real, you know, cmo. Like not just fractional or advisory. Like when do you get a full time chief of sales or COO or whatever. And I, I feel like it is very circumstantial. But it's also because it does depend on like things like funding, for example. But typically I don't even think about those roles until like 10 plus, like sometimes even 20 plus because like there's also VP. Like you might do a VP before you do a chief, for example, but C suite. You know, traditionally speaking, you don't hire those for a while. They can be fractional. But full time. C suite. You. Yeah, you typically don't see that for a minute. I'm actually not sure when Moz hired their first chiefs, but if I had to guess, it was like the 20 plus range.
Yeah, like, I, I guess I'd be shocked if it were. I'd be surprised if it were less than that. I'm. I'm curious what Rand would say. But yeah, so we're not saying go crazy too vertical. And yeah, you're right, it creates problems.
But at least adding like an extra layer, if your hands have to be
[00:15:47] Speaker B: in absolutely everything all the time, it's impossible to pull your head up.
[00:15:51] Speaker A: Oh, absolutely impossible.
[00:15:53] Speaker B: Like you had mentioned senior marketing manager. So you have someone like that can be running the day to day.
You can then be working with that person on strategic direction. Right. There's not so many layers between you. Same thing on the product side.
Yeah, that makes sense.
[00:16:08] Speaker A: Totally. And then I think also too, you know, talking about that, like founder to CEO transition and like the process of making that of like, actually embodying those changes and like what it actually looks like and what I find it is, is the founder, really, the process that you go through is you start to learn that the value that you place on, like, the worth of the work that you do changes.
When you're a founder, you value yourself primarily by how much you're shipping, how much you're executing. Okay, well, how much did I execute?
And that's the funny thing about CEO is that while it's chief Executive officer, you actually don't execute anything.
And like, you don't actually, you're not actually executing, you're really directing others how to execute.
And if you have internal leadership, that's easy. But if you don't, what ends up happening is you're basically running around between like 20 to 50 people and you're trying to like, give them direction, tell them what to do, give them guidance, but also consolidate all of their feedback, all of their ideas, all of their, you know, expectations. Which if you hire good people, they will have good ideas.
But I will say, like, as a manager, especially as a high level manager, like, it's just, it's impossible to manage that many people. You probably, you certainly could, like, automate it.
You know, you can have people do like check ins every day and like, you could go through slack and be like, okay, boom, boom, boom, check in, check in, check in. And like, oh, yeah, like I see all the tasks everyone's working on. Great. Maybe you do scrums every day and like, you know, everyone kind of talks about what they're going to do and then you check in at the end like, like, there are ways to like, manage and then also micromanage this and that will feel productive.
But I'm here to tell you that, like, it probably like checks boxes in your brain, but my guess is it's not going to actually help you move the needle on anything because where's the strategic direction? Where's the guidance? Where's the performance management of all those people? Like how, like, how do you actually, like, there's leadership, but then there's also management. And you might feel like you're managing everything really well.
But what does leadership look like? Like, how are you actually leading these people towards a common shared goal and how is that actually translating into growth for the company? And my guess is when you have that many folks directly reporting to you, it's actually like kind of low key, impossible to do that super well, especially at this stage of the business.
But that's, that's my two cents.
Yeah.
[00:18:38] Speaker B: Because I think if, if you get the point where if you're worried about what each specific employee is doing that you, you, you can't.
Right. I see a true CEO is looking at numbers and patterns and data and how it's ebbing and flowing and then making, you know, pulling that into, okay, well now we need to shift here and this is how we can do it. And then relaying that down.
[00:19:06] Speaker A: Exactly. And then trusting your team to be able to do that, but also doing your best to communicate very clearly, like, what you think that direction is and to some degree letting your team kind of decide how they're going to go for it. But at the same exact time, like, I think a really good CEO kind of knows like when to put guardrails and like when not to based on the team that they have and. Yeah, 100%. 100%. And I just feel like, like, that's impossible to do if you're constantly running around between all the different direct reports. But so I think going back to founder, CEO transition, I think the biggest thing too is you have to have a really strong sense of what your team needs. And I think people think that the CEO job is just kind of like telling people what to do.
But what I actually think it is, is you're really more painting the picture of, okay, here's where we're trying to go now. You all tell me how we're going to get there.
And then the CEO can say, I like that, or that might be a challenge. And here's why, like, I think of CEO as like, like, your job is really to be the master of the market. Like, you are to, like, you're literally the captain of the ship. If, and we've used this metaphor before, but if you're the captain of a ship, you're on top deck, you're looking out into the ocean, you're trying to see, like, where the sun is, where the stars are, like, where are we going?
And if you're navigating, you, you've got to be able to tell everyone else to, like, for what? Like, what to prepare for. And, and certainly, like, you know, there's also, like, the idea space of, okay, like, well, how do we think we're going to get there? Or, you know, how fast? Or what do we got to do? If you got a. If you've got a great team, like, they're gonna make it pretty clear for you, like, here's what you gotta do to hit this goal. And then your job as CEO is to provide the resources to make sure that happens. And, and also put guy, you know, put guardrails down of, like, okay, I don't think that's gonna happen, but for these reasons. And then, you know, a good example to me would be, like, maybe marketing wants to relaunch the website.
And if, if you're doing your job, you'd be like, okay, let me number crunch that and let me see how that compares to all the other priorities.
Because not that they will be competing priorities, but just like you, that's one idea for marketing, but you might have gotten, like, 20 other ideas from marketing, product engineering, sales, et cetera. Now you've got to balance and kind of figure out, okay, based on all of these things, because we can't hold all of the limes. You know, I don't know if you've seen that meme of, like, the guy, like, why can't I hold all these limes? You can't hold all the limes, but, like, you can pick which limes you can hold, and then you can put other limes down and say, okay, here's why we're putting this down for now. And, but, like, that's, that's kind of the job of, like, being CEO. I'm just making sure that, like, all these priorities are aligned and, and also making it clear of, like, what. What can you afford to invest in? And the only person who can really, truly make that decision, if you have a CFO, great, but it's really the CEO. Like especially at this size at 3 to 5 million typically not a C CFO. Sometimes we see controllers. It's rare though. And this is actually one of the key hires I, I do think founders should consider.
CEO should absolutely consider hiring a controller at the 3 to 5 million mark. But just because chances are like you're not doing the finances in a way that's like as like efficient and optimized as like it could be.
And also too like you need visibility into like financial projections and budgeting and blah blah, blah. And I just find like a controller is probably a little bit better at that than maybe someone who doesn't have that background.
[00:22:39] Speaker B: But would that be a full time controller or a fractional?
[00:22:43] Speaker A: So I think it could be part time.
Yeah, there might not be enough work for it to be full time.
But I do think it just depends on how complex your revenue streams are. And if it's SaaS, I think that's relatively straightforward. But if you have like other things that you're doing, you know, like things like payments revenue or you know, some have like enterprise like service based revenue or things like that, like I think a controller would help a lot because they'd really help you see and understand like the profitability of certain things. But then also ideally to me like the CEO isn't always crunching those numbers by themselves. Like they should double check work obviously. But like I think having a second brain on that is very helpful.
Yeah, but yeah, that's, that's kind of, that's kind of how I see it. I think, I think you also like, you have to have a good sense for like what your team needs as well and having a really grounded understanding of where you provide the most value and where you don't. Because what I, what we tend to see at this stage too is the CEO also is still executing as if they were an ic, like an individual contributor. And there are going to be times where yeah like you have to roll up your sleeves like you're the CEO, like you, you got to do it all.
But once you, once you start hiring people and like they're really like taking over those roles for you, assuming you've hired like a solid team, you probably shouldn't necessarily always be executing and.
[00:24:14] Speaker B: Right. And if you are, it probably means like you didn't have the right onboarding with the new hires. This, the right systems and training isn't set up to get them, you know, working at their best or Doing what they need to do.
[00:24:28] Speaker A: Yeah. Or you're still holding on to parts of the role that maybe you either like or you don't know that that's actually their job now. I've seen that a lot too. I, I just talked to a founder and they're at that like 2 to 3 million mark just talked to a founder at an event and they were saying that they, they hired a marketer. They're not like, they're not senior, but they're, but they are experienced.
But they were talking about how they were still like producing certain reports and how they were still like writing copy and like writing emails.
And I just was like, well, do you, do you enjoy doing those things? And they were like, well, not really. And I'm like, do you have plans to delegate that and pass that on and make it more a real responsibility of this new person that you just hired? And they were just like, oh, I guess I didn't think that that person could do that. And I was like, did you hire the right person?
And they're like, well, I, I, I think I did, but I guess I just, it just hadn't occurred to me that that's something that I would pass on. And I'm like, that's totally that person's job. Like you, if you hired a marketing person, that is kind of like a marketing manager is really what the role was. But you're still like writing copy, pulling reports, and either either like you hired the wrong person or you didn't maybe clarify the role. And sometimes you can clarify the role and still hold on to stuff and not realize that you're holding on to stuff.
So I think the hiring component of this is so fascinating because I, I think, I think sometimes founders forget that's a whole person's job that you're still doing.
But if you just hired someone, like, should you still be doing that? Probably not.
And it, it also is confusing for the team too. Especially like, if you hire like a bunch of like super experienced people but you're still executing certain things that like, would be on their plate. That's extremely confusing to that person. Like, that basically tells them, like, it, it, it communicates like the weirdest messages I feel like.
[00:26:27] Speaker B: Right. Yeah. And it almost communicates too that if you are the ic, then, well, maybe this isn't right. Maybe I'm not doing this right. Maybe I should chat with the CEO.
[00:26:36] Speaker A: Right.
[00:26:37] Speaker B: Which then defeats the purpose of handing things down to hire.
[00:26:42] Speaker A: Exactly. Now you're still in the seat of marketer, which you might or, or engineer or product manager, which you might not necessarily need to be. And, and I think, you know, in my fractional CMO work, actually, I remember one, one of the co founders, I remember we were having a discussion about something, and I remember being like, I remember being. I remember feeling like I needed to get the co's approval on something because my perspective was that. That I didn't fully own the thing.
And it was fascinating because the co founder, I remember explaining it to the co founder and the co founder was like, that doesn't seem like a CEO decision to me.
And I've had that, that like, little sound bite has been in my head for, like, months.
And I agreed. And I was like, I totally agree. And, and that's kind of when I realized, like, you know, maybe I'm thinking that this is something that I need the CEO to pair with me on, but actually, I, I don't. And if I just talked about it with the CEO, he'd be like, oh, yeah, Asia, do whatever. I don't, I don't care. Like, it's, it's, it's. It's your choice.
And this co founder was right. Um, so that soundbite of like, that doesn't seem like a CEO decision to me. Like, that's not even like, worth the CEOs time to, like, put brain cells towards. And I just remember being thinking, like, damn, like, he was right. But that was really more, I think, one my confusion on my responsibility of, okay, do I actually own this, or did we just say I owned it, but I actually don't own it?
But once we clarified it, I was like, oh, okay, that makes sense. So I, I definitely was like, I had assumed I didn't own something, but actually I did, and, and the CEO was totally cool with it. So that was actually like a more positive scenario. But sometimes the opposite happens where it's like, like, imagine. Imagine if it wasn't that. And imagine if it was like, oh, no, Asia, actually, that marketing responsibility you don't actually own.
Like, you're not actually responsible for that, even though you're like, fractional CMO or whatever. Like, imagine if that were the scenario, how confusing as heck that would be to someone who's supposed to be, like, leading your department or, like, leading your function or running and managing your department of like, oh, no, like, the CEO still owns that. Like, they still own writing copy or like, they still own blah, blah. And it's just like, okay, how does that work? Because, like, at any moment you can veto something or at Any moment you can be like, even if it's bad, like, you know, and it's just, yeah. It creates a weird dynamic. So I have to say, clarifying the roles, clarifying responsibilities, but also like the CEO being aware enough to be like, okay, I'm done doing that, I can put that down and that person's going to pick it up and assuming that you've got like a good onboarding process and like a good handoff process, hopefully those things go well. But sometimes like you, you as CEO have to realize like your power that even as like founder CEO, like you kind of coming into things, you're in a. I kind of describe it as like you're like barreling into the room in a way and people just kind of have to deal with you and you have to be aware and cognizant of when you're doing that versus, versus like, you know, when you are taking more of like the leadership stance versus like the okay, well I'm founder, CEO, I'm just going to go in and do stuff and people are just gonna have to figure it out around me.
That's a weird scenario to work in. And I've seen that enough times.
Yeah, yeah.
[00:30:05] Speaker B: And because people are not gonna speak up.
[00:30:08] Speaker A: Oh no, when you do that.
[00:30:09] Speaker B: And I think too there's, I feel like we've talked about this before but like being a true CEO is kind of lonely.
[00:30:15] Speaker A: Oh, extremely, extremely.
[00:30:17] Speaker B: It's a lonely position. And I think if you're a founder turning CEO, that's where some of the struggle is. Well, I built this thing. It's hard to then go into that space of okay, now I'm truly. While that my team gets shit done.
[00:30:32] Speaker A: It's extremely lonely. Like I, I remember feeling like when we were at our biggest at Demand Maven, I remember feeling like, like I could talk to you but like, but there's still this like other layer of like, damn. Like, like man, like nobody gets it right. And it wasn't even full time employees that we had like, it was just like, I think we had like eight contractors, eight freelancers. That was our largest. And I remember feeling very like, gosh, like there's like, like there's my business coach, but there wasn't really anybody to confide in of like how I was feeling at a lot of the times.
But I, I imagine too, you know, like when you're even larger than that and you've got, you know, leadership under you and they've got their teams. Yeah. Like it's very lonely at the top I imagine it's a little less lonely when you have, when you have co founders, but if you're solo founder man, like I, I really emphasize community as much as possible for solo founders and CEOs because like, it's just like you really, it's, it's thankless. It's thankless, but it's also kind of like one of those like self fulfilling prophecies of like, well, like you don't become CEO to be thanked.
You know what I mean? It's like nobody becomes CEO to be like, oh, yes, Asia, I love you so much. Oh my God, you're the best. You're so good at what you do. Like, that's not what that job does.
You become CEO because you have a vision for the world and you want to see your business or whatever it is that you're building, like, help contribute to that vision or help people very specifically. Like, for me, Demand Maven was all about, and is about. I say was like, it's dead. It's not. Demand Maven has always been about helping founders over overcome slow growth.
And I've always had that like, very strong like, desire. And I've had ebbs and flows of like w. Like nobody loves me. They don't thank me after we help them like overcome growth challenges.
Some of them are very vocal and like, are like, oh my God, like you literally transformed our business. But a lot of the times it's thank. It's completely thankless. Especially from the consultant perspective. It's like, no, like you're not, you're not gonna have your cake and eat it too many. You just kind of have to like make, make do with it. But as CEO, like, it's, it's, I think it's the same. You know, no one's gonna be like, oh my God, you are doing such a great job.
Everyone wants you to say that to them.
[00:33:08] Speaker B: Because everyone else, as a CEO, you get the upside for the risk.
[00:33:12] Speaker A: Yeah, it's true. I agree. Yeah.
[00:33:14] Speaker B: So you gotta live with that and not get the praise.
[00:33:18] Speaker A: And that's where community comes in. It's like, find other CEOs and find other founders for sure. Because it is lonely as hell. I'm not gonna lie. Even when I was at the board level at Moz, I, I just remember, I, I remember like, it actually felt good being on the board because there are other board members and like, you're not like, alone. But I imagine like Sarah, the CEO probably had many moments where she was like, you know, I've got this board at the top, I've got everyone, you know, under and you know, she's really like, not the bottleneck, but like she's the linchpin, so to speak, of, of this entity that's Maz. And it like the board funnels down through her and then the rest of Moz funnels out on the other side. And like, when you're the linchpin like that, that can, that can feel very lonely.
Yeah. So anyway, that. I think it's a, it's an interesting dynamic, but it's something, it's something that has like, like I said, like we've worked with enough companies now, like at this stage, and the similarities, like, there are patterns that are emerging. I think it's interesting and I know it's not going to always be the case, but if there are any businesses out there that are in that like 3 to 5 million range, they're kind of stuck. I think like, the first thing I would, I would look at would be like, well, how are you structured? Who's on your. Who's on your team?
How are you structured and how do you work together and what work do you do specifically?
And what does everyone else do? Because adjusting and fixing those imbalances alone creates a more efficient process, more efficient workflow, more efficient way of achieving your goals in the first place.
And I know it's not, I know it seems like that's not the answer, but. But I, I think people would be surprised. Like even just adjusting, like how your meetings run might actually adjust. Like what ideas you prioritize and what, like what projects you take on and who's responsible for those projects. And like, are there deadlines, Are there consequences if they're, if we don't meet certain deadlines? And what's the process for analyzing the work that we did do and understanding and learning from that? I think it, I think ops and like internal structure and hiring, I think those things are just so under rated sometimes.
So instead what we do is we just hyperfocus on customer acquisition, marketing and under index and all the other things.
Yeah, yep.
I think one of the things though that comes to mind in terms of like other patterns I've noticed have been, like I mentioned the analytics and like the tech debt sometimes though, like the product analytics or just analytics in general, like will will be there, but no one's really using them. But that speaks more to like how you're structured.
I think, I think the others, I mean it's, it's the story that I've, I've always Told, which is there's pricing and there's also, there's something about product management.
And we've talked about product management before and I actually, I, I think we have it on deck to talk about it again, like more, more thoroughly again. But I have, I have this episode that I recorded like a while back that was like, what if we're bad at product management?
Worst title, by the way. Probably not the best title, I don't think. Who listened to that episode? Probably no one. But like, when I think about part of why some of these companies get slow is because they aren't actually being strategic with what they produce and like with what they push as feature and what adjustments or how they think about expansion in the product.
And I, I, I just heard a story from a marketer, like at the event that I went to and she was telling me about how she's, she's interesting because like she runs like a consulting practice and also she's like internal marketing as well. And she was telling me how there was a feature push and it took like a whole year for development to build. Like a whole year for engineering to like build this feature.
And they got really conflicting information from the CEO. So the engineering team is basically like, well, the CEO is pushing us to build this thing, but then the CEO is also pushing the marketing team to like go to market in like let's say like the UK and the us.
This feature that took a whole year to build all the things, apparently it's like free in the UK or something and like half of the customers are in the UK was, was the other thing too.
So like you maybe you can start to see where this is like breaking apart. But like, basically like the CEO really pushed for engineering to build this feature. Took forever. Took forever. Forever. Forever.
Because they had technical debt tracker. But like by the time that they actually did it, they're going to market and marketing is like, hey, half of our customers are in the uk. This thing that you're building, it's free in the uk. Like we, we couldn't charge for it because I can't remember, there was like some regulation, there was something that like made it that you couldn't charge for it.
And so basically the CEO was like, damn, like, I didn't realize that. And so basically marketing had to like completely overhaul, go to market so that way they could go to market with this feature. And basically they basically were just like, okay, well let's just not focus on the UK then. Like, let's just focus on the US and it Ended up like, not.
They don't have the data to know if it's ROI positive or not, because tech debt. So like, those are the types of like, oh, like, maybe we should have done a bit more discovery. Maybe we should have done a bit more like, idea validation. Maybe we should have done a bit more market research.
And also, like, maybe we should be able to measure or at least quantify the opportunity cost of like, what's it going to cost for us to build this? And what do we think the market potential actually is for this feature?
And like, how much money do we think we're actually going to make from it? And do we, do we think we can add it to our monetization strategy of like, okay, well, maybe it's expansion, revenue or whatever. Apparently none of that happened. And so that's the type of like, that's where products can kind of get in trouble a little bit. And this company doesn't have a head of product. It's all driven by the CEO.
But that's an example of like, where things can kind of fall apart sometimes. And if you don't have like a good strategy or like a good process for figuring out what you should build and like a good process for validating ideas, you might waste a lot of money, energy and time and not even be able to reap the benefit of it at the end. Like, that's the type of risk you're incurring. And if product is experiencing that as a challenge, the whole business will experience it as a challenge. Product is literally the center of the universe for a SaaS company. It's like, it's how you generate value and also how you make money. So if product is experiencing challenges like the whole company will.
So that's kind of where it's like, product management, I think, is so much more crucial at this like 3 to 5 million mark.
And it probably didn't feel that way at the million mark in the same way. And I know that seems like a small gap, but just based off of what I'm seeing, it's it to me, it really is like the saying of like, what got you here won't get you there.
And you probably kind of like lucked your way a little bit into the million, but after that, it really can't be luck. You have to have like a solid process.
And also, I think also too, like, chasing feature parody is not a strategy at the end of the day.
Like, at some point you do kind of have to like, put things down and say, like, okay, wait, like what who are we and where are we actually going? And like what are we really trying to accomplish?
Otherwise you end up just looking the same as everyone else and it's really hard to compete.
So like again like feature parody I think to a degree, but it's not, it's not a strategy to me like at all. Like long term future parody doesn't get you anywhere. It just makes you look just like everybody else. And if, and if you're competing with like an 800 pound gorilla in the market, like no one, like who will pick you? No one. So I think it's just like that type of strategic thinking but also optimization around like product process and strategic alignment between product and, and which is part of go to market.
All of those things have to be like buttoned up and if it's not, it's it. I think it creates the slow growth. I think that's what causes the like long term churn and like all the things that we talk about on the pod. But anyway, that's kind of, that's kind of what I've been observing and yeah, I, I, I, I think we solve it by really pausing, stopping and looking and really getting critical about who's doing what. How is our team structured, what are our processes for deciding what features we build, how do we validate those ideas and then do we have the information and data that we need to make good decisions? And I feel like if you can check those boxes then you're, you're probably, you're probably on your way and there might be really obvious levers to pull. Like I feel like this scenario is more for businesses that don't have obvious levers.
Like you can't just look at activation and be like, oh, it's activation or oh, it's pricing. Which you know, tends to be the case for us whenever we work with companies.
Sometimes it's not obvious and I think this is an example of where it's not obvious.
[00:43:05] Speaker B: Yeah, so this is a good checklist then, as opposed to just putting your head down and keep driving into or throwing money at whatever acquisition or whatever you have running.
[00:43:17] Speaker A: Right, Exactly. And then of course too, you know, if you're in that 3 to 5 million mark and you're like, damn, a lot of this resonates, please reach out because these are the exact types of problems that we solve. Not all growth is customer acquisition. It's actually customer acquisition. Marketing is easily the least efficient.
So if you're struggling with any of these things, please chat with us because chances are like it could be something obvious, but it also could be something not obvious at all.
And that's where we can help come in with our change management processes and services. And also like thinking about ops and like how you structure. And that's something that we've absolutely got experience with, like working with CEOs on and helping them transform their teams internally. But yeah, that's the episode. Thanks for listening. Thanks for joining me, Kim, as per usual.
