Developing a Strong & Productive Team | With Brian Saunders

Do you have any other challenges you could say you can share, you know, over these last few years? You've been around for, you know, doing this for quite a while in terms of growing. You know, big-time software. That's not what I meant. I meant you're a young man. Did you have any, you know, big challenges you'd say, you know, in terms of staying afloat before you guys raised any round, or were you guys, you know, pretty, you know, consistent growth year over year since the beginning?

You know, I've always been more cash flow focused than kind of growth focused. I get that there's this kind of— now they talk about it derisively, but it's really not. I don't think it's fair. I think it's just a different philosophy, this kind of Valley mentality of growth at any cost, right? And sometimes that makes sense because they're basically saying, look, we're charging through the forest. We're not going to spot how to convert this to revenue until we get to the point where we have X or Y and we've got money to throw at it. Our constricted resource is traction, right? So let's go find it. But for me, my resource, my kind of limiting agent has been capital. And so we've always tried to grow the business capital efficient. And you have years where that's just not possible, and so you scale back a little bit in terms of growth. So we've always sacrificed kind of growth and market penetration to just making sure that we run things capital efficient. It's actually weird to have— I had a conversation with a British guy last year who was looking at the company for a bunch of different reasons, a private equity guy. He was really irritated that we have so much cash on the balance sheet. I don't understand, like, you're growing, you just got an investment, why are you growing cash on the balance sheet? I'm thinking, I don't think anybody's ever asked me that question before. But it makes sense. It's a different mentality. For us, it's always been, what can you accomplish with the resources you have in place? And so Look, if your growth rate is 10% or 15% and you manage to do that because you only have a certain amount of cash in place, I can sell that story all day long, right? To somebody who's now gonna pour fuel on the fire. The issue is you can't sell that story if you run out of cash. And so, you know, so you need to set goals for yourself that you can accomplish with the resources that you've got in place. That could literally be the 40 hours a week when you're starting out that you might have in addition to your regular job and the 10 grand you got from your father-in-law. Like, you know, resources Resources are different for everybody, but what you wanna do is find a goal that's realistic within those resources. And then it's all about traction. What traction can you get? What milestone can you hit with that resource? And even when you're starting out in SaaS, angel investors, they're goofy. Your goal is to get to what's the next milestone? And if you can really clearly define what the next milestone is, even if that milestone is pre-revenue or if the milestone is not quite the right kind of investment size, but you can paint a compelling picture for why you could use this resource to hit that milestone, it's Lets everybody focus, you know, the whole team can zero in on hitting that milestone. And then now pivots become, you know, gut-wrenching because, you know, you had a milestone, everybody agreed to it, people put money in it, it's not gonna work, we gotta pivot. But that's all right, that's, you know, that's why it's called work, right?

Yeah, yeah, I mean, having those constraints really just kind of forces you to make, you know, a lot better decisions. I mean, you just can't afford to make you know, just blow the cash and, you know, see what happens. You have to be kind of efficient with your money. How do you kind of change your—

The snotty way of saying that is that venture capital firms are really good at making really great small ideas into really terrible big ideas. And it's, you know, sometimes you need calendar time and you need stuff to bake. And if it doesn't have time to bake, it's going to come out all weird, right? So, you know, being capital constrained can sometimes be an advantage.

And so, I mean, from your perspective today, I mean, now you're saying I have a lot of cash in my account. How do you stay disciplined to not go out and say, okay, now that I don't have all these constraints, cash specifically being one of them, how do you stay disciplined to not go out and say, hey, we can go and acquire another company? Or, you know, because you're still growing 50%, 60% year over year, but you could also add fuel and double your team and decide, hey, let's do that.

And I've had plenty of, you know, at this point I've met most of the CEOs in my industry and adjacent industries, and there are plenty of those folks who have gone off the rails because of exactly that. Listen, you got to surround yourself with like-minded people. If you're like growth at all costs, we're gonna burn a bunch of cash and that's the direction we're gonna head and we're gonna grow something huge, you better find investors that agree with that. And the hardest thing to do when you're talking to people who are gonna put money into the company is to try and figure out, all right, we probably spent 8 months finding Wavecrest, just finding Wavecrest, like talking to a bunch of people, taking every phone call, getting a feel for like-minded investors who, even though they've got cash behind them, look, we wanna build this capital efficient. I think that growth rate makes sense. Here's 4 things haven't thought about, you know, maybe we could help you with those. Like finding somebody who's like-minded, who will stick to the same discipline is really important. True with your team too, you know, just because somebody is a rock star in a given field, whether it's product or, you know, CFO, we're just talking about, if you can't find senior executives who are like-minded in terms of, you know, keeping you disciplined, then, you know, you'll go off the rails. And the problem with that is It's not that it's bad to burn cash. If you've got cash in the bank, you're trying to grow a company that's— like I said, there's nothing wrong with that philosophy, but you're not used to running that track, right? You're not used to being in those woods. And so suddenly you're in a whole different set of— and I mean, the metrics are different, the people are different, the approach is different, the definition of a milestone is different. Like, it's different. And if you're not used to being in that space, you know, if you get out of your comfort zone in terms of what your discipline is, you know, it can lead to problems.

Expectations are a lot different too, right? And now you have a different, you know, terms, different level of pressure and how you operate, and maybe it's not for you. Not everybody, you know, wants to operate like that. Yeah, right. So you mentioned the team, that word I think is super important. You mentioned, you know, brilliant teams are built and not bought or borrowed. Can you elaborate on what that means, and, uh, what are you doing in terms of, you know, a culture or management to develop a brilliant team, uh, at Big Time Software now at over 100 employees?

Yeah, yeah, that's— it's a fair question. It's probably the chief responsibility and struggle, I would say, building a team, because you want to grow fast, so you're going to have to hire outside talent. But for us, the key is hiring outside talent that can help, you know, our existing talent grow. And, you know, the reality is some folks don't want to grow in the same way that you do, right? So of course you're going to outgrow people who were great team members when you were, you know, 5 million that are, that are not great team members when you're 25 million. That's fine. That's cool. That happens all the time. People are excited about being in a certain space. It's especially true in sales and marketing where people are just used to pitching companies at a certain size and then the company gets bigger and the responsibilities change and they have to focus on 7 different balls and people don't like that. They kind of self-select. So Godard Abel at G2 does this whole presentation on what it's like to grow a company and the cutoffs and stuff. He's an engineer at heart. So it's very, you know, tickle that engineering funny bone in my head. But, you know, I think you do outgrow people. You can't keep everybody. But truly great leaders within your organization are gonna have some history with the organization. They're gonna understand the nuance. The longer you keep them, the more they understand that nuance. And as long as, you know, you're all agile, meaning that you can learn the new rules of the game when the game changes, that understanding that nuance is hugely helpful in terms of pushing the company forward. So for us, it's all about when we hire, when we top people, people, hire people who can help our existing staff accelerate. Don't just top people because the position is open. We have to find people who are going to be rock stars in that space. So we're willing to wait for that in order to find rock stars for the space that we're trying to hire. And then what's the training program? What's the career path? What's the plan? You know, and a lot of that is literally sitting down with your people, the key employees and others every single quarter and trying to figure out, all right, well, we said you wanted to be here. You know, where are we? What can we do? How can we give you space to accomplish that? What kind of training can we make available? Where are you frustrated? And is that still the plan? Is that still something you're interested in? And, you know, a lot of that is just shoe leather and, you know, getting in touch with people and kind of connecting and making sure that you understand it. Periodically, it's, you know, we have a person who's a brilliant product manager here at the organization, and she's awesome. And she grew up in our support team. You know, she grew up years ago answering phone calls from customers and helping them understand the product. And so she just has this, you know, 2 years or so of experience of hearing the problems that people have and the frustrations and where the product doesn't make sense. So then when she got into kind of QA and product, we slowly kind of, hey, this is a great career path for you. Like, you haven't thought about product and it's not something that's on your radar, but you should go get certified in these 3 things. And so you kind of, over time, ideally can help spot where somebody just has an affinity for a given skill set and then, you know, encourage that with training and some outside resources.

Hmm.

So your worst case scenario is that you train somebody up and they go work somewhere, somewhere else. But that's awesome. Yeah, like at the end of the day, you know, look, we use Slack here, we use it a ton. You know, 15 years from now, I promise you, no one at this firm is going to remember what Slack is. But if you're lucky, they'll remember the person that was their manager who helped them move up. And so there's your opportunity to make a lasting impression on somebody 15 years later. That's why you're here. You know, you're not, you're not here to You know, to solve problems and get, you know, check-in points and, and, and, you know, close deals. I get it. That's what you do every day. You're here to help your, your, you know, fellow employees advance. You're, you're here to help the customers that we work with actually grow and hire more people and get bigger. Like, those are the things that people remember. They're not going to remember the day-to-day stuff, you know. Yeah, yeah, yeah.

It's always gut-wrenching, right, when your, you know, top employees, after you've groomed them, invested so much into them, and they leave. But then you have to also look at it like You know, this is like, you know, your child moving out. You know, they've grown up, they're adults now. You've nurtured them, you've taken them, and now they're ready to move on to the next.

And again, I'm an old man. The number of times somebody has done that and then come back to me, you know, 5, 10 years later and been really helpful in some way, or just sent a note when you're, you know, when you're like feeling like you can't manage your way out of a paper bag to say, hey, I'm using that thing that you taught me, I'm whiteboarding exactly the way that we did back in the day, you know, like, okay, all right, so I'm not doing this for nothing. So, you know, it does pay dividends. You just have to approach it the right way. And especially in this labor market, this is a crazy, weird little market. You know, it can be frustrating, but you have to remember that you're kind of— you're investing in people and that will eventually return. Whether it returns to you or to your community doesn't really matter. Your goal is to help kind of improve their capability and advance their career. Yeah, yeah.

When it comes to kind of, uh, you know, talking a little bit more about the productivity side, and, you know, once you have that team, um, do you have any recommendations for, say, SaaS founders? You know, you've been doing this, uh, you probably remember even from the initial stages when it comes to developing and, you know, building that strong productive team. Do you have any tips to maximize, you know, maximize team productivity but also being careful on activities that may, you know, do the opposite effect?

Yeah, that's the hard part, right? Like, uh, the number of people who, you know, People get frustrated by turns, and, you know, I get that you have to pivot periodically, but if you're pivoting every week, then that's problematic, right? And so, so, you know, you have to be cognizant enough of your team to let them get their work done, which, which ultimately means you have to have faith in them to get their work done, right? Like, you have to give them room in order to achieve. That doesn't mean that everybody gets to have, you know, a set of goals for the year and then go away, right? And so, Mm-hmm. So I think the The big leap, and this is true in our customers too. We preach this to our customers a lot. You got to get into a cadence, and it can't be an annual cadence. It's got to be, you know, quarterly is great, monthly is great. You know, having kind of weekly meetings where you're accomplishing small stuff, you really get productive when there is a cadence. And, you know, the agile kind of teaches you that, right? Like the developers are like, yeah, no kidding. And of course, you know, you need a 2-week cadence where you get stuff out. You can't have a project plan that lasts 2 years and then expect that you'll achieve anything. You need to narrow it down into things that bite-sized things that can be bitten off and accomplished within a week or 2. And so every firm is a little different with cadence. We tend to be a little dictatorial with our customers, right? Like we push them to be into a weekly or into a monthly quarterly cadence just because that tends to be how they review projects. But whatever yours is as a SaaS organization, get together every period, have goals that are reasonable, have an idea, you know, you're going to be terrible at figuring out what you can accomplish within that Whatever that finite period is. Let's say you decide we're going to every month, we're going to have a set of goals. You're going to be terrible at setting monthly goals. But after the 3rd or 4th month, you should actually be pretty good at it. Maybe you hit 80% of them, right? You're never going to hit 100% because some of them are no longer valid. But if you can get to that kind of 70-80%, now you figured out what size goals your team can accomplish. That type of velocity, that type of regular cadence is what separates truly great teams from just kind of mediocre teams. You can always hire talent, right? But to get everybody coordinated, everybody needs to play together. We all need to have goals that are coordinated in a timeframe and a cadence that everybody agrees to, and everybody can kind of operate at that rate.