#2: Zvi Band, Contactually

Welcome to From Startup to Grownup, the podcast. My name is Alisa Cohn. I'm an executive coach, an angel investor, and the author of From Startup to Grownup. Each week I talk to founders, creators, advisors, investors, and builders of all kinds about their insights and experiences in going from startup to grownup. This is episode number 2, and I'm so excited to have Zvi Band on the podcast today. Zvi is the co-founder and CEO of Contactually, a customer relationship management tool which got acquired by Compass in 2019. As you'll hear, Zvi is a relationship guy. He wrote Success in Your Sphere, a book about nurturing relationships, and his new venture TalkSocial is focused on bringing humanity back together. Zvi and I had a really juicy conversation about how he got onto the path of entrepreneurship how he learned to see himself as the leader, and the limits of transparency. Zvi and I also get into a real talk discussion about co-founder dynamics, mental health, and his surprising advice to founders who are getting ready to sell their business. Please enjoy this conversation with Zvi Band. Welcome to the show, Zvi.

Thanks so much for having me and especially being one of your first guests on the show. I'm honored.

Thank you for saying that. I'm so excited about this and I've been so excited to have you here because I know how important relationships are. And actually, I'd like to maybe— I want to hear about your background for sure and take us through the journey and the story of that idea in Evernote. So maybe start off telling us about your background. Where were you born and were there early entrepreneurial kind of germs that we can sort of see?

Yeah, great question. The answer to that last part is no, and I'll share more. So yeah, I was born in Boston but bounced around the country. My father was an academic, so was in Berkeley, then San Diego, then 2 years in New Mexico before finally settling on the DC area where I still am now. You know, truth is, I was never the lemonade stand newspaper hustler, etc., like no real business acumen or interest at all until like post-graduation. However, I was raised in a house where both parents pursued their passions at all costs.

Oh, wow.

So I think it was innate in me. Like, my mother left a job in HMO management to become a full-time artist. My father was an astrophysicist and stayed in the academic academia. So it was definitely always like hardwired in me to very much like pursue what I was interested in. And I was, I'm the kid that like my parents brought home their first home computer when I was 10 years old. I'm like, yep, this is, this is me. But it really wasn't until my first day at my first job post-graduation where I was like, whoa, this is not what I was meant to do. And that to me was really the entrepreneurial spark that said, okay, I'm meant to build something.

That's, well, that's fascinating. Let's dig into that a little bit, cuz I think there are a lot of people who get that call, like, wait, wait, wait, this is not what I'm meant for. What did that actually feel like for you?

Yeah, I remember very clearly like sitting down at my desk, you know, being, or being sat down at my desk and said, hey, and this is the project you're working on up until that point. And this was for a government contractor, you know, which is great. It was a great place to work, but I, I was, I was told like, hey, this is the project you're working on. This is what you're gonna be doing for, the foreseeable future and something clicked. I'm like, nope, I'm not gonna do this. I'm not supposed to do this. I'm supposed to do something else. I have ideas that I wanna pursue. I have things I wanna build. I wanna make a difference. And I just didn't feel that was there. And that's really what set me out on my exploration of like, hey, what is this whole entrepreneur thing? What should I be doing? And there was another, I would say, catalyzing moment later on where I was already starting to read more about startups and what's going on. This is like, again, 2006, 2007, definitely not really— startups weren't really the rage. And I remember having a copy of an Inc. magazine, funny enough, and my supervisor happened to like flip through it and he was like, "Yep, nope, no interest. I'm very happy working a 9-to-5 job and going home and not worrying about work." And I'm so thankful for that moment because I was like, no, that's not me. Right. And so clearly I started to understand that some people are wired differently. Right. It's not like I just didn't like my job. So I wanted something different. It's that I wanted something that was more innately tied to my purpose on earth. Right. And I believe in work-life integration, not like working 9 to 5 and then not working from 5 to 9.

Mm, wow, that's a very powerful story. I love those catalyzing moments. So tell us about what happened. I'm so curious, like there was an idea in Evernote, apparently it came from your head, it went into Evernote, and then it built into Contaxually. Tell us that founding story.

Yeah, and so there's obviously, there are a few little hops in between.

Yeah.

I left to become CTO of enterprise software startup that was acquired in 2009. I started my own like little consulting firm And when I say started my own consulting firm, I basically was between jobs and I emailed everyone I know saying, "Hey, I'm on the market. I can do your software development jobs or whatever." And very quickly I was working with the likes of Ford and CBS and Volkswagen doing all these amazing projects. And despite being the kid who grew up, I would say like more introverted, not really well socially connected. I went to 3 different high schools, so clearly that had an impact on my social life. But I realized that, wow, all these amazing things were happening to me, not because what I did, not because what I knew, but from who I knew, and more importantly, who knew me. And that was that kind of real key moment that I said, wow, My relationships are this important asset of mine, but at the same time, you know, like most people, I sucked at it. I would meet someone for coffee and 2 weeks later completely forget about who they were.

Yeah.

Or I was so busy at the top of my inbox that a client project would end and I'd be so focused on what was next that I would never engage again.

Mm-hmm.

And so that's where I said, hey, I need to get better at this. I tried Salesforce and I tried Highrise, which was a CRM at the time, and nothing seemed to work. And so I had a practice of just capturing random ideas. I thought, you know, the shower thoughts in Evernote. And I remember, you know, May 15th, 2011, I wrote down the idea for like, wouldn't it be great if there was a proactive CRM that would help you with your relationships? Yeah. So that was that moment. Again, it was just like an idea that I just wrote down and kind of kept up going about my day, but it stuck with me. I kept coming back to it and, uh, we ended up building it in June and raising our first round of capital in October of that year. Hmm.

Wow. That's a great story. So I'm actually gonna skip to Tony, your co-founder. How did you meet him? And I actually met Tony before I met you. So that's gonna— I have this sort of sense of the two of you very, very, uh, individually, but how did you meet him and how was that partnership in building the company?

Yeah, it was great. So there, so between, while I was running my consulting firm before starting Contaxly, I based here in Washington, DC. And at the time, it's not that there was no startup community here, it's that people didn't realize there was a startup community here. And I was involved in a number of ventures. I founded a little, broschure site called Proudly Made in DC, showcasing startups in DC that ended up making it to the New York Times. Then I started the DC Tech Meetup, which ended up being regarded as one of the largest meetups in the country. We still have like 30,000 members. And through that, just, I didn't feel like it, but I became regarded as one of the people to meet in the DC area. Tony had worked for Microsoft previously and had followed a girl here to the DC area. And he just reached out to me cold saying, hey, I'm looking to meet people in the area. He and I had a few coffees and at one of those times I shared saying, hey, I'm playing around with this prototype of a relationship-oriented CRM. And he offered to help out in his free time. You know, thought like, oh, you got some spare cycles, this seems interesting, sure. So he started doing some customer development a couple days a week., and then myself and our other co-founder Jeff were working on the product. And finally, we actually received an offer from 500 Startups kind of out of the blue to focus full-time and build the company. And that was kind of a burn the boats moment for all of us. And I think at that time when especially Tony and I said, hey, are we going to go in on this? You know?

Yeah.

And we ended up deciding to pursue it full-time.

What made you take that leap? Why'd you think you could possibly get this right?

I'll be completely honest, I didn't. Hmm. Like, I, I, I wouldn't necessarily say, you know, the, the general, you think the startup story is, oh, I, you see a mountain summit somewhere and let's go pers— let's go pursue it. Let's go start climbing the mountain. Like always aiming at the peak. Um, It was actually not the case for us, or at least for me. I was like, I knew I wanted to start a startup. I knew I wanted to build a product and pursue something I was passionate about. I was running a really great consulting business previously, but, and this is what stuck with me even today, is that I, I didn't want to get paid to build other people's dreams. I wanted to build one of my own. Yeah. And so I knew, I'm like, hey, I, I want to build this dream. Yeah, right. Without having a clear vision of what the dream can manifest itself into. So to some extent, and this is, you know, there were cases of this as we went forward too, but we just said, hey, let's, let's build this. Let's, let's pull on this thread and see where it goes. And if not, hey, we'll just go do something else.

Right. Oh, I love that. So you're willing to take the risk because you kind of thought, well, I want to build my own dream one way or the other. So now's as good a time as any to see how it works.

Yeah, absolutely. And for what it's worth, you know, I just, in full transparency, like my, you know, the 500 Startups offer came with the string of saying, hey, for 4 months, we want you to move out to Mountain View to be with us and to work out of the 500 Startups offices and everything like that. And my 2 co-founders, they're like, yeah, let's go do it. Absolutely. Like, you know, 3 mattresses on the floor, empty apartment. Working 18 hours, sure. And I'm like, whoa, whoa, whoa, I just got engaged. Yeah, you know, like, I have a, you know, place and a dog and a fiancée in DC. This doesn't really seem for me. Let's kind of try and make it work in DC. And it was them, and I'm very thankful, that said like, no, let's go do this. And in hindsight, like, I'm thankful to have people who could throw me off the cliff when I wasn't fully ready.

I love the way you put that. So I'd love to keep talking about your relationship. I didn't realize you actually had two co-founders. I thought you just had the one with Tony. Can you tell us, how did you decide, how you guys decided to sort of, um, divide up roles and responsibilities? How did you end up being the CEO? Like, how did those relationships kind of play out?

Yeah, absolutely. So our third co-founder, Jeff, uh, who we're still friends with, he, uh, left the company in 2016 to, uh, you know, to pursue, um, to pursue other interests. But it's very clear that he, he was happy heads down in code, you know, so he became, he took the role of CTO. I would say I had a little bit more, and by more I mean like 15 minutes more, like business acumen and experience. And it was my idea after all that was the catalyst for us coming together. So we decided that, okay, I would be CEO and Tony would be COO. Um, but truly, and I think especially for Tony and I, like there was, uh, he and I co-led the company together. At times we were really like saying, hey, you know, left brain, right brain, partnering with each other very closely. At times we held each other back. Um, we definitely shifted roles amongst each other. Um, but it was very clear that at least for the initial phase, I'd be focused on building the product, and Tony would be focused on getting in front of users.

Okay, so it sort of felt like that naturally happened. So as the company grew, you two in particular had to probably navigate that relationship. Could you share some of the highlights of your relationship with Tony in particular, and maybe one or two lowlights that you had to overcome?

Yeah, absolutely. So I think the highlights were You know, I think throughout, and this is the ideal parts of a co-founder relationship where you could tell and I could tell Tony, hey, you have this particular, you have this particular responsibility because you have this particular responsibility. I'm not thinking about it. Right. Um, so for example, especially it was initially like sales and marketing. You are focused on it. I'm not. Tony could say, say the same thing about product for me. Um, or fundraising at times. And that was always really helpful, right? When we can very, very quickly divide it. Yeah. I would say like, and especially times where we were able to shuffle our roles, that was helpful.

Yeah.

And I think this is one of the things like I, I wish we had done even sooner, right? Because there, there was a period of time where I was focused more on product and Tony's focused more on sales. And then over time we realized that I was becoming more of the external face of the company.

Mm-hmm.

Yeah. And we actually shifted and this ended up being just a rocket ship for the company where we said, hey, Zvi's focused on everything outside of the business and Tone is focused on everything inside of the business.

Mm-hmm.

Yeah. And so it's, it's something I take with me now of saying constantly revisiting roles and responsibilities in a startup.

Yeah.

I'd probably say like the through line of where we had our lowest periods of time were when we weren't talking, frankly.

Oh, you weren't talking because just too busy?

Yeah, we were too busy or too in the moment or frankly, and this is one of the things I really realize now is that we were afraid of talking, right? We knew there was conflict between us.

Yeah.

We'd rather just, you know, just like, you know, our egos naturally try and do, our egos avoid the mess in the corner, right? We're like, yeah, we probably don't agree with that, but let's just kind of keep going there.

Yeah.

And oftentimes that resulted in us sometimes arguing in front of our, you know, of our team or, you know, a VP of sales would get one answer out of me and different answer out of Tony and it being like a a really big problem for the company. I remember one of the jokes that sometimes our executive team would laugh at, would half-jokingly say, "Why are mommy and daddy fighting?" And we're like, "Okay, this is something we need to work on." Totally.

As you know, I wrote a book called From Startup to Grownup. And in chapter 9, I address co-founders. And my point in that whole chapter is when you have a co-founder, you have a marriage. So, when they talk about mommy and daddy, they're experiencing your marriage.

Yeah, absolutely. And so for that reason, you, we've, uh, yeah, and I think it came in late as we became more mature and started realizing that it is just as important to work on our relationship as it is to be in the relationship.

Yeah.

Um, but we started implementing different tactics and now, you know, having started a new company, I, I'm able to take all those lessons learned and implement something again. Right.

That's amazing.

Yeah.

And for me, I was just going to ask, could you share what are some of the specific tools that you ended up using with Tony that you're now especially implementing now?

Yeah, I would say like one is importantly just very much time.

Yeah. Spending time together.

Time is really, really important to, to, to just spend more and more time together. I truly appreciate that. Like, and time, not just like sitting in meetings, but like social time. Making sure that like, and again, we realize like, and I think this is important to co-founders, co-founders don't have to be friends.

Yeah.

They have to respect each other. And Tony and I, you know, I, I wouldn't necessarily say on a normal, you know, if he and I were to ever meet at a bar, we'd be friends with each other, but we are very friendly and very respectful of each other even to this day. So establishing open communication and especially implementing tools for open communication.

Yeah, like what, what tools?

So nowadays there's one, Tapestry.so, that I've implemented with, with my new co-founder. I think we, we didn't take advantage of enough, but we had a few advisors and board members who were very good at not playing referee, but very clearly like stoking conflict, if that makes sense.

Oh, wow. So they would catalyze conflict so you couldn't ignore it.

Yeah, it's like, love that. I'm gonna bring you two together. You're saying this, you're saying this, go, right? Uh, I would say one of the tricks I've picked up recently, which I wish I, I wish I had back in 2011 because it would've been transformational, but I ask from time to time is the very simple question, what are you not telling me that you should? Yes. And that brings up all sorts of crazy answers, right? That most of the time, you know, hit you like a Mack truck. Yeah. I didn't know you thought that. Yeah.

Like, like what? Like what have you learned? What is an example of something you've learned when you ask that question?

I would say like, you know, one of the times, you know, with my co-founder is, you know, I'm afraid of you.

Oh wow.

And this is very early on.

Yeah, yeah, yeah.

I'm like, whoa, why are you afraid of me? Right?

Yeah.

Yeah. There was one time where I was— Tony, I made some kind of like off-the-cuff remark in a, in a meeting. Right. And he took it to heart very personally. And I was like, whoa, again, words come out all the time. I sometimes I don't even know, understand what I'm saying. Right. And to be able to hear that was really helpful. Yeah. So finding mechanisms to intentionally get out what you're not saying, I feel is like the root of most issues. And then of course, we've hired coaches and people who have worked with us, but just that can only amplify just the base level of communication between us. Right.

Wow. That's very powerful. Well, you know, on the topic of communication, What I find with founders is that when they address sort of difficult or delicate conversations, they kind of develop like go-to scripts. I guess I would ask you, if you think about difficult conversations you've had with your employees or executives or Tony, awkward conversations, delicate conversations, what kinds have been the most challenging and how have you approached them?

Yeah, absolutely. I would say like the, what kinds of issues have been most challenging are clearly when there's, you know, especially like among an executive team where there's very big disagreement with us. Right. And, or, you know, with the whole company when you have, let's say traumatic news to share.

Right.

Which can be, you know, for us related to, you know, selling the company, which I'm sure we'll talk— we'll get to at some point. Yeah, it can be talking about, you know, can be talking about letting go of a key employee or, you know, we had to do, you know, a couple layoffs, unfortunately, you know, throughout the course of the company. So addressing that, I've always found, and even if it's between Tony and I, it's always fine to like just— and he's brought up like he brought up the term like rip the Band-Aid off as quick as possible, just get the information out. Don't try and buriedly just say, here's what's happening, and then start to go into why or how we're gonna resolve it.

Yeah.

Even like amongst when handling like very severe conflict amongst my board, for example, or, or executive team, trying to very clearly delineate what the level of disagreement is, like, what are we disagreeing about?

Mm-hmm.

Mm-hmm. And then saying, okay, let's come up with a solution.

Mm-hmm.

Mm-hmm. Um, and so I think that was always really helpful for even on the board saying, hey, like oftentimes, you know, people aren't necessarily even sure what we're fighting about. Yeah. Are we fighting about cash? Are we fighting about sales strategy? Are we fighting about market opportunities? And oftentimes just getting everyone aligned around like, what are we misaligned about?

Yes.

Then you can say, okay, here are a few paths, or here's what I'm hearing. Um, so that's been one of the key tricks for me is just trying to align around what are we all disagreeing about?

Yeah. How do you do that? Are you the kind of person who's like, okay, I hear you saying this, you saying this, or do you sort of say, okay, everyone gets a minute to sort of say what they have on their mind? Like, how do you get it all on the table?

Yeah. Oftentimes I'm the one who lays out, you know, and saying, hey, I sometimes pretend to be the dumbest guy in the room, usually because I am the dumbest person in the room. Yeah, I just, I mean that like, because that gives you the license to say, okay, just wait a second.

Yeah.

Here's what I'm hearing over here and here's what I'm hearing over here. Am I right? Am I right? Did I, did I mishear you? Am I misunderstanding it? Quite often, like I am or other people are. So I get to be again, the, the dumb person in the room that, you know, people correct. And just to lay that out and saying, okay, so therefore this is the, this is the answer. How do we solve this? Right. And oftentimes that allows other people to come in and address that.

Mm-hmm.

But I, I find that's helpful. Oftentimes, you know, we, you know, especially when it regards to like what to do with a very challenging customer situation, you don't need to make the decision right then. And especially if like emotions are elevated, just separating out like, hey, here's the issue. Yeah. I'm gonna assign someone to propose a solution. Let's talk about it tomorrow. That alone just separates it. It out because now it's no longer an emotional, you know, like match between people, right? It's rather just a situation that we just have to problem solve our way out of, right?

Oh, that's so well said. I mean, sometimes a pause also could just be very helpful. Like, let's just stop and maybe kind of regroup a little bit.

Yeah, absolutely. And I learned this too late, but again, everyone is bringing in the meeting, the emotions from the meeting they had before, or the fight with their kids this morning, or awkward drop-off, or, you know, discussion with their spouse, or, you know, anything. They didn't like the outcome of the football game last night. And so just trying to be very clear and saying, hey, let's, let's try and divorce emotion from this and really just understand the evidence here and understand like, what is the What's the decision that needs to be made? And then very calmly work through a solution has been just immensely helpful to me.

Yeah. Oh, that's so great. Now, Zvi, I know that you are obviously a relationship guy, and I'm just wondering, are you also a culture guy? So, you know, Contactual.ly started out as a little bitty idea, and then if I've heard of startups, you know, incubated company, and then obviously into a company that got sold. How did you think about culture if you did think about it? And how did you think about sort of the culture changing as you got a little bit bigger?

Yeah, great question. So yes, we did think about culture and I remember like, yo, as a co-founding team very early on when we were talking about culture, our root belief is like, hey, we wanna build a company that we wanna work for.

Ah, yeah. Great.

And I think that really helped it. So we set values from the first company retreat. Wow. Yeah. Yeah, I remember sitting down and proposing them and we tweaked them and worked with them, et cetera. What were they?

What were the values? Do you remember?

I don't want to put you on the spot. And actually there are a couple ones that like really became challenging. So we can address those three.

Yeah.

One is, one of them that was always there in different manifestations throughout was to be transparent. Like, we really embrace transparency. The worst thing you could do at our company is withhold information. Um, and so we very much believe in radical transparency, which of course had its challenges later on, right? Um, we very, we very much believed in being user-centric, um, which is all— and we always noted every new hire, user-centric and customer-centric are very different things, especially when you're building enterprise software. And we always established that we were gonna be user-centric from very early on. We wanted to build a product that users wanted to use.

Yeah.

Because remember, we were building a CRM company, you know, most CRMs people don't want to use, they have to use, otherwise they get fired. We wanted to build a product that users want to use. That ended up being a big advantage for us. Um, two ones that were very contentious, which changed over time, um, was progress over process.

Mm-hmm.

We always wanted to make sure that we were moving the company forward and we weren't bringing on any, any hire that was just going to be following a process just because they were told to. We always said, hey, we want to make sure everyone here is thinking about moving our mission and our customers and our company forward.

Yeah.

And another one which you can imagine, you know, without me saying it or without me like explaining it, you know, how to change over time was This was like 2013, and Facebook had really popularized this term, but move fast and break things.

Oh yeah. Wow.

And we moved way too fast and we broke way too many things. And so you can imagine that was a value that shifted very quickly.

Yeah.

Wow.

That's awesome. First of all, I'm so impressed you can remember them, but then you're being really honest and saying, you know, we had to make some changes. So tell, tell us how you evolved those values? Tell us if you had like a moment of truth, like, okay, this is no longer good, this is not working for us, this is now counter-effective. Or like, how did it happen that you evolved them?

Yeah, it's a great question. As I've reflected back on it, one of the unwritten values of the company that we exhibited but never really documented was introspection.

Mm-hmm.

Like, we were not a company that was Moses coming down from the mountain with two tablets saying, "Hey, this is just what it is." It exhibited everywhere. I'm a servant leader and still believe in servant leadership. At our company retreats and regularly, we would ask our team, "What would you think? How could we help this company?" So one of our core values was ownership. And that meant ownership not over your particular area of responsibility, but ownership over the company. And so we would ask them, including every company retreat, which we did, you know, every April or so, um, up until acquisition, was, hey, how, how could we make, make this company better? What should we start, stop, or continue? Uh, how should our values change? And sure enough, every year at our retreat, we revisited, hey, what needs to change about our values? And we would rewrite them most years. Wow.

That's so— you talk about introspection. That's so— we always think of values as things which are kind of long-term, right? They're supposed to be durable, at least over a period of multiple years. But it sounds like you were just acknowledging we have to be flexible and iterate the values as we grow.

Yeah. And so the way I thought about the values, and I've since thought about values, is they were, they were lightning rods for what we believe in.

Yeah.

But they were always up for debate and discussion.

Yeah.

Right. So move fast and break things was something we intentionally talked about like a year or two later and very quickly, right? We were able to have that discussion like, that's a terrible value. Let's burn it down to the ground, right?

Worst value ever.

Yeah. Whereas progress over process became a very important thing, right? Progress over process when you have 6 salespeople starting or when you have 10 engineers, no, you, you need process in order to make progress. So it allowed us to have those intelligent level debates so we can very quickly discuss how do we interpret that? Whereas some we held near and dear. So ownership and transparency and being user-centric were throughlines that may have tweaked over time for sure, but they were throughlines throughout the course of the company.

Yeah.

And not set in stone saying, oh, this is just the way we operate, period.

Yeah, yeah. So then again, as you discuss them at your annual offsite, I'm sure that you kind of enrolled your newer employees into a deeper sense of what that means. And also, you began to even— probably you talked to all the employees and everybody came to terms with the new, maybe nuance of what these same values mean for us now at the company now, as opposed to 5 years ago.

Exactly. And I'm sure there are more things we could have done better. Like, when we were doing annual reviews or quarterly reviews, we didn't necessarily say, hey, how are you matching up versus the values? Ever really get that far.

Yeah.

But we were able to, as new people came on board or as we had other experienced people, we were able to start having those other conversations around, okay, what have you learned? What do you bring with from your other company? What's important here? And how do we, how do we shift it?

Yeah. Yeah. That's great. So Zvi, I wanna turn to kind of like the ups and downs of startups because startups are filled with ups and downs. I'm sure yours was no different.

I have no idea what you're talking about. No, this was a walk in the park for 7 and a half years, straight up into the right.

And I think one of the issues, you don't always know if you're winning. So how have you dealt with— how did you deal with the bad moments in your day-to-day?

Yeah, um, I think there are two ways to, to phrase that, right? Um, One, you know, let's talk about the company and then talk about like myself as well.

Yeah, yeah.

Company-wise, you know, for us, you know, being, you know, what we built was a B2B SaaS business, you know, ARR and growth in ARR and all the attributes of annual recurring revenue, like were, were, were the key. And so we're able to very quickly look at like, hey, how are we growing? What are our setbacks? And I do appreciate this about, you know, about my co-founder is we were always very clear at saying, here's what's working well and here's what's not.

Yeah, right.

We got in the habit of, with our board and with our executive team, having like red, yellow, green, and very clearly being able to delineate what is going green, what is yellow that we're concerned about, what is red, uh-oh, we need to talk about this right right now. And we were, so just being able to be transparent and being comfortable sharing with our team, here's the bad, here's the ugly, here's the great, let's celebrate the wins and let's talk about how we improve the things that aren't, uh, aren't going so well. And then we are, frankly, we are very focused on just once we had that out in the open, oftentimes we're able to problem solve with our team, but we are able to say, hey, Here's how we solve it, right? If a client is, you know, 2 months behind on, on not paying their invoice. Okay. It's not like the accounting team is going to hide that or the customer success team is going to say, oh no, don't worry, everything's fine. You know, the check's in the mail or anything like that. We're able to say, hey, this is a problem. Okay. How do we solve this? Right. And we're able to bring the full team on board to be able to, to address it. For me personally, yeah, I, uh, I would say I was not prepared for the startup journey.

Mm-hmm.

And to this day, I still think that the 7 and a half years of building Contaxly, I spent in survival mode and I strive not to spend that. Yeah. One of the key tactics I developed was being able to seperate the feelings of the moment or of the day from what I would actually do. Because oftentimes, and I learned this about myself, that if I got overwhelmed or stressed or nervous or afraid, I would freeze up and stop. And I had to start realizing and developing the skill of saying, no, Svee, you are feeling Afraid or stressed or angry right now. Do a quick, like, logical check. No, everything seems to be fine. Or here's what's going well. Here's what's not. Here's how much cash flow we have left in the bank. Here's the, here's the, in the Tim Ferriss, like, yo, you know, Tim Ferriss language. Here's, here's the worst that could happen and here's how we deal with it. Or here's how I deal with it. And then put together my to-do list and then just keep going at it.

So it sounds like you would be emotional, upset, overwhelmed, whatever, and you would kind of force yourself to look at the facts and then just deal with what had to be dealt with despite your feelings. Is that right?

Yeah, absolutely. And I think, you know, the, the, the, the what became a company value of progress or process really, I think, came from me, um, in that I've always tried to make sure that no matter what, I wake up in the morning, I put together my to-do list, and I do my to-do list. And if that meant sometimes I had to shut off my brain, right, shut off the emotional side of me and say, hey, I'm just going to execute this to-do list today and not think of it, then great, right? Um, and I, I've since learned on how to better handle emotions. Yeah. But that was the tool that I implemented at the time.

Right. Well, what did you learn about how better to handle emotions?

I feel, and this has been really in the few years since acquisition, you know, as I work to, for lack of a term, like do the work to prepare myself mentally, physically, emotionally for the next, for the next mountain to climb. It's to really embrace my emotions, right? Not put it in a box and just hide it or turn it off, like, you know, as we joke about, but rather to just fully embrace it, saying, hey, why am I feeling angry? Let's understand that. Like, why am I feeling emotional and how can I address it? And oftentimes I'm even just sitting in 10 minutes of meditation, I'm able to fully unpack those feelings and come up with a solution for them, right? Maybe I do need to have an honest conversation with my co-founder, right? Sve, you do— if you're afraid of your bank balance, Sve, just open your bank balance and understand it and figure out what to do about it.

Yeah. Wow. Now, you also said you were not prepared for what was going to happen in those 7 years. In what ways do you, do you see that you were not prepared? How— what would have prepared you?

But how did you see you were not prepared is really the first question. Yeah, great question. So I think, as I mentioned early on, I I didn't start with a summit and say, okay, I need to have my gear in place. This is the team I'm going to need. This is the funding I'm going to need. Instead, it was just a game of inches and just clawing our way forward month over month, quarter after quarter, year after year. One of the ones that I think sticks out with me the most is for the first few years of the company, I didn't feel like a leader. Hmm. Like, what do you mean? The, the company was running.

Mm-hmm.

We were hiring people, we were executing a plan. Um, but I, I both had like severe imposter syndrome, like being CEO of the company. I was the CEO that kind of wanted to like hide in the back of the room, right?

Mm-hmm.

Um, and just like support everyone else, like servant leadership I think is a double-edged sword because that also gives you the permission to stay out of the limelight. Um, and it wasn't until I remember we hired a coach for me, um, you know, halfway through the journey. And one, one of the most valuable things in my life was doing a 360, um, of all, you know, most of the people in the company. And it was very clear like, Sve, they see you as a leader. So intrinsically, I didn't feel like a leader. Extrinsically, they gave me the validation that said, Sve, you are the leader of the company. You are acting like the leader of the company, so start acting like it. And that was a shift. I was like, oh, they need me to— they need me to help light a torch. They need me to help light the way. They— the customers need to see who the leader of the company is, right? I can't just put the salespeople out there, right? But I need to be at conferences. I need to be— you know, I need to have much more of a presence with my team and without versus just hiring people and saying, hey, what, what do— what do you need from me? Yeah. To do your job here.

Yeah, that's so I just wanna unpack that for a minute. Like, I think that servant leadership, of course, is such a beautiful, noble aspiration, and modesty is a virtue. But I, I know that when I work with CEOs, the ones that I coach, they can be too modest. They'll say, it's not about me. And I'm like, actually it is about you. Cuz all those people around, your employees, need to see you in the front of the room sometimes. See, to see you at the conferences sometimes. And it sounds like that's what you got out of your coaching process.

Absolutely. Yeah. And this relates to other things too, like including about company values. To me, one of the biggest gifts, which we don't really talk about enough, is the, the acquisition process.

Mm-hmm.

Because what happened is we were able to take the same team, product, office space, mission, and airdrop it into a different company with a different culture.. And I was able to see how a different leader exhibited their leadership. I was able to see how small, subtle changes in values could have massive impacts on day to day. And so I was able to clearly see like, wow, it's not that I felt, you know, that, you know, someone was more or less of a leader than me. It's a question of what are, what are they actually doing to exhibit? Like, I'm still a software developer by trade, so I still go into my mind to like, what do I— give me the things I can do that will allow me to exhibit leadership and able to see that. So I started writing regularly to my team. I, at company retreats, it was no longer about, you know, culture workshops and team get-togetherness and strategy sessions, but I would stand up there and I would be honest about my passion for the company and the vision that we have and the challenges that we've seen and what we've achieved so far. Whenever there was a company celebration, I would always elevate it to like the highest company mission, not just, you know, say, oh cool, we shipped the product or we closed a customer, but like, always weaving in the larger story of Contaxian to it. And it's just picking up those that end up being transformational for me as a leader.

Yeah. Oh, that's amazing. So, I'd love to hear about the acquisition. So, tell us the before, during, and after. How did it come about and what was that like? And you said there was some, maybe some ups and downs even through the acquisition. So, let's hear about that.

Yeah, absolutely. And obviously, like, you know, when you talk to any entrepreneur about an acquisition, there's always like, you know, their mouth half zipped by what they can or can't talk about.

Sure, sure.

But like for us, like we, you know, we were, we were hitting a key milestone. We were passing $10 million in annual recurring revenue, which for us, SaaS business, you know, software as a startup is a very key milestone that many people regard. And so we knew we had something there. And for the board and myself, you know, my co-founders, you know, we were starting to look saying, hey, well, where do we go from here, right? Do we raise more money and keep investing in the business and move to other markets or keep moving upmarket and selling bigger customers? Do we, you know, keep going as is? Or do we, you know, or do we like look for, you know, look for an acquirer? And honestly, like, we, again, without having real, like, foresight of, like, this is what we want to achieve and let's go do this, we were really, we were really pursuing all of them. At the time, Compass was an acquisition— was not an acquisition target of ours, but rather they were an ideal customer of ours. We were selling at one time, I think we had 8 of the largest 20 brokerages in the country.

Mm-hmm.

And so we brought— we were able to bring on Compass as a customer. Um, they had approached us a couple times about saying, hey, could we explore deeper strategic partnership, etc. And the— I would say that the right doors open just as we, we and the board were starting to say, hey, this is it, right? We had started to explore options a year or two before, and we had always received acquisition interest, but at the time, it's not that we said no to it, but we just, we weren't even ready to have the conversation as a board, or even myself and, uh, Tony. We weren't having the conversation about us saying, hey, what do we want? But we've started to. So for example, and this was important for me, you know, I think Tony and I both realized that we were hitting the stage of the business where he and I had maxed out our learning, if that makes sense. And there would have to be some larger step change function happen.

Yeah.

And I developed this internal mindset over the years that could actually— that this was the best business education I could ever get that would happen to get paid for. And I felt like, hey, I've maxed out my learnings here. What is gonna be that next thing that will allow me to learn? And after exploring all the right avenues and having a number of, you know, interested parties, uh, we end up joining forces with Compass in 2019. Who initiated that?

Did they initiate that discussion? Did you, for the actual acquisition, did you also meet with Rob? Did you guys have some discussions and meeting of the minds, or like, what was that process like?

Yeah, so, um, you know, to no surprise, you know, given that we are a company around relationship building, it was a relationship. I had, I had met Robert a number of times over the previous years, um, and had worked with a number of Compass agents, um, even before they started talking to us, I think 20% of Compass agents at one time were customers of ours. So we developed a relationship and my sales team and I, you know, we're always trying to bring on Compass as a customer, but we were able to build up enough, a strong enough relationship where I remember, you know, 9:00 PM one Monday night, Robert, you know, called me out of the blue on my cell phone, right? I remember standing in my bedroom in DC and he said, hey, would you be interested in exploring a, uh, you know, potential acquisition? Um, and that started, I would say, a much deeper relationship. And to no surprise, there were fits and starts, and, um, but that was the beginning of the relationship that resulted in us being acquired. But it— I do truly credit the relationship that we had built with people in and around Compass over the years.

And so, you know, the acquisition went through. Was that easy or hard to talk about with your companies, with your employees?

So I— when we talked about the— this has ended up being one of the best lessons I've learned, for better or for worse. You know, as, as I mentioned, uh, when we talked about our values, um, I, I really value extreme transparency, right? We can't fix what we don't know about, so let's get, get everything out on the table. And we try to exhibit that as much as possible. And there were times where we, you know, we had to remain more tight-lipped about things, you know, cash situation or having to make larger, you know, exec or staff changes, etc. But unfortunately, when we weren't as transparent as we wanted to be around the acquisition, we weren't— we were too transparent.

Oh yeah.

And this is one of the things I've learned I learned too late that as good-intentioned as you want to be around transparency, radical transparency and total transparency are very different things. And especially when you're talking about, you know, a move that people would be concerned about would affect their livelihood without them fully understanding all the ins and outs of it. That it's a very scary thing. And now in hindsight, putting myself in their shoes, right? You know, telling a salesperson, hey, you know, I need you to go on the road, but who knows, this company may, you know, may not be around in, you know, in 3 months. Or, you know, telling someone who's, you know, just about to get married, hey, yeah, you probably will have a job still, like 95% sure, but still that 5%, maybe not, right?

Ouch. Yeah.

Yeah, so as much as we fought for our team and made sure that everyone ended up in a really good place, in hindsight, we— and I counsel this to other entrepreneurs too, founders— hey, there are things that you really just have to keep yourself and your board, and that's it. Not exec team, not advisors, not even all of your investors. And so it was It was up and down for sure. I would say having spoken, worked with other founders who've gone through this too, you have to pretend like everything is going normal outside of an exec meeting or outside of the conversation and then jump in and have a completely different mindset. So bouncing between those two mindsets was a real challenge, especially when you added in our team started to find out and started hearing things, so we'd get questions either way. But yeah, it was a very intense 6-month period.

I can imagine. I can imagine. So you join Compass, at least for— how long were you at Compass then? How long did you stay at Compass?

Just under 2 years.

Just under 2 years. When you first got there, you and the team, however many people you could bring with you, and I guess Tony also, Is that right? What was that like? What was the integration period? How— where was the match and the great fit? And what were the sort of points of like, oh, I didn't know this was going to happen? Like, what was surprising?

Yeah, no, I would say the, the, the great— the really great thing about it is they needed us, right? Like, that we— and we already had a bit of relationship, we already had them as customers, customer, there was absolutely no question in our mind that everything that we had built and learned about Contactually, about operating Contactually, customer success and training and design and UI/UX, etc., was, oh yes, the faster you can implement this for our customers, the better. Right. And so actually now, like, you know, if you speak to anyone at Compass, you just saw just over the 2 years post-acquisition, just a complete polarity shift in the technology they had built out. The biggest challenge, and I still am not sure how we could have built around this, but as an executive team and as a founding team and as a board, you know, we were so focused on both sprinting towards the moment of acquisition and also trying to be, trying to carry on as business as usual.

Yeah.

That the moment, you know, the acquisition closed and the team knew and our customers knew, everything ground, everything at Contaxia previously ground to a halt, right? Sales and customer success with like, wait, are we selling? No, we're not actively selling anymore. How do we support our customers? Um, on the product side, like, wait, like we're now, we're not building Contaxia anymore. We're building encompass CRM, like what is our roadmap? So, and we tried to spend time focusing on the, you know, focusing on the, you know, first 100 days post-acquisition. I remember we started having meetings. Yeah. But for various reasons, you know, as is actually quite obvious, we, we were so focused on the transaction itself. Yeah. And so I'm still not sure how we could have dealt around that, but it definitely took time to, restart our engines, um, you know, a couple weeks there before of getting our engineers on board into the new ecosystem, etc. Yeah. Um, one of the biggest lessons, uh, is that I, that I personally learned, and I think this in hindsight is obvious, is that, you know, we were a 70-person pirate ship, right?

Yeah.

And now when you're joining a larger company, you're joining the Navy, right? And the pirates versus Navy metaphor or something, and I learned, you know, too late. And in hindsight, I didn't prepare myself for operating like part of the Navy. Like, I was way too much of a pirate. I was like, hey, let's just go build this feature, or we don't need approval for this. We'll just send off an email and let them know.

Progress over process, right?

Yeah. And not prepared, not even prepared for the cultural shift, right? Of, hey, how do you, how do you, how do I do I, as a leader, operate now when there's multiple levels of management above me? And so it definitely took some time. But overall, I mean, again, I consider Contaxity to be business school. I learned a whole lot through those 2 years.

Yeah, that's amazing. You know, I spoke to Matt Blumberg, who's the CEO, the founder and former CEO of Returnpath. They also got acquired. But before they got acquired, They almost got acquired, as he told me. They got very close to being acquired and then it fell through. And to your point, their business had grown, had ground to a halt. Their business had to be restarted and they didn't have the acquisition on the other end. I think it's a very difficult thing when you're prepping for acquisition and you think it's gonna happen to then somehow keep with your left hand, keep the business moving. So it's like seamless. That's like a very, very, difficult problem.

Absolutely. And I think there's also— and I, I've spoken to other founders about this— there's also the, the thing we don't address enough, like the mental side of what's happening to you as a founder, right?

Yeah.

Um, you and I know many founders post-acquisition who, for various reasons, go into deep depression.

That's true.

Um, I didn't, but in part because I remember surrounding myself with other entrepreneurs who had sold their company, and I'd seen the seen the warning signs of what to look for. And so I started doing, even 6 months before, started doing the mental work to, and it sounds weird, but like to mentally let go of my baby.

Yes.

Right. That by the time the acquisition closed, as much as I love and bled for Contaxly, it was time for it to move on.

Right.

And, or move on from me.

Right, right. What was that mental work? How did you do that?

Yeah, I, to me, I think it's, uh, because the, the startup can be, you know, can be such a key part of identity. I, I had to do a lot of work to identify like, wait, who was I? Right? I, I wasn't just Zvi Band CEO of Contactually. I was Zvi Band entrepreneur, entrepreneur of multiple ventures over time. Yeah. Not just Contactually. Right. Um, that I'm, a father, that I'm a husband, that I'm an investor, that I care about these things, right? And that my identity is not wrapped up and my life is not wrapped up based on what I do for Contaxly and how Contaxly is going. Because sure enough, over the years, as Contaxly went to the, as you know, the worst screwed it's over moments, I felt that my life was spiraling down the drain. When in hindsight, it took, you know, my wife and others to pull me back and say, sweetie, everything's fine. You're just having some problems at work. Right.

Right. So just, I wanna just double-click a little bit more on that, the identity piece and the ways you did, did you journal? Did you talk to somebody? Did you meditate on it? Like what specific practices did you do to work on that identity piece?

Yeah. So prior to acquisition, um, I started journaling a lot more. Yeah, I started talking to other entrepreneurs.

Yeah.

Who had in the prior 9 months had sold their business. And that ended up being really helpful. Like, hey, what did you go through issues? So one of the things that I'm very thankful for was I started learning and reading so much about founder depression post-acquisition. Yeah. Which it sounds like such a first word. World problem. Like, oh, come on, you sold your business for millions of dollars, you know, all this money's in your account, you get this accolade, you level up in life, and sure, you're found— you're faced with depression. But really, like, it is— it is a legitimate mental issue that I've seen people go through. Yeah. And so that was really helpful to be able to be aware that this wave was coming for me. And therefore I could prepare myself by journaling, by talking to people, etc. And then frankly, like starting to very quickly dive into doing the work and picking up meditation and losing weight and everything like that right after the acquisition.

Yeah, yeah, that's great, Zvi. So just a few more questions here. What, what do you wish you had known earlier on your journey?

Yeah, great question. To me, communication with your team your co-founders, and also yourself is penultimate.

Yeah.

Now, like, and I, I do also the, the self-communication to be important. Uh, what do you mean by that?

When you say self-communication, what do you mean? Like self-talk?

Like, what am I really feeling? What's happening in my head? What is logically breaking it down around what I could be doing or I'm doing different? Uh, I think we've touched on this a couple times before, for, but transparency is not all or nothing. You know, as much as we push for radical transparency, we push too hard. And I look back at numerous situations over the period of time. And if I were to go back and do something again, it's that the speed and clarity of decision-making is, can be a true weapon for the business. Right. And also weapon against you when you're lacking it.

Mm-hmm. That's so great. And so, is there one or two pieces of advice you have for other founders as they embark on their journeys to grow into leaders?

Yeah, absolutely. So, get your mental health in order. Mm-hmm. Mm-hmm. Right? And I know we sacrifice so much for our company, for our companies, but I now see a therapist twice a week. I do so many other things to make sure I'm taking care of myself mentally, physically, spiritually, emotionally. And to be honest, seek help, right? People love entrepreneurs and entrepreneurs love entrepreneurs, right? And I find, again, going back to communication, there's something really powerful about, you know, getting on the phone with someone, another entrepreneur, an investor or something like that. And, you know, when the usual pleasantries come up of saying, hey, how you doing? Instead of saying, oh yeah, I'm doing fine, you can say, you know, honestly, I'm a 6 out of 10 right now and here's why, right? And that can just transform yourself and the conversation in a moment's notice, and you will walk out a better person for that.

Yeah. Oh, that's so great. I love that. What a great— that's great advice. And, you know, and I— whenever I ask founders, what's your advice for other founders, you know, for, for people just starting their journey, they always go to the self-care. They always go to like, take care of yourself. And I just really appreciate that. It's so, so important.

Because we're so good at ignoring other people's advice, including our own.

That's true. That's actually really true. So, Zvi, what are you working on now? Tell us all about it.

Yeah, absolutely. So, you know, as I dug deep down to understand why I'm here on Earth and looking at all the projects I've been passionate about and frankly asking myself like, What could I spend— what problem could I spend the next 10 years of my life working on? Empowering human connection is at the center, right? Mm-hmm. I think it's clear to all of us that we're in a valley of loneliness, right? And we're just seeing tectonic shifts in how we relate to each other as human beings. Like, the way my grandparents found their sense of belonging and community, each other, is gonna be completely different than how my two young kids will. Right? And we're stuck in the middle, like lonely and fragmented and burning down each other's houses, et cetera. And I truly believe like our mental health crisis is a social health crisis. And so what I'm focused on is that we humans build community through conversation. So that's why I'm focusing most of my time on, right? Helping people gather their communities for for deep, intentional conversation, the likes of which you can rarely experience without a trusted facilitator. And we're truly understanding that great conversation is like an art form. And we want to help people have the deep conversations that lead to a life well lived. So that's what we're building with TalkSocial. Mm-hmm.

Love it. I love it. So juicy. I can't wait to see the journey of you and TalkSocial. Is there anything else that you'd like to say?

Yeah, it's a great question. As I think about my personal mantra, and I maybe have guilty of this in kind of going back, talking about my journey and saying, "Oh, I wish I'd done this. I wish I'd done this." I think one of my fundamental operating principles, which I try and share with as many people as possible, is to live life with no regrets.. And so that's why I don't live in the past as much saying, I wish I did this, or I wish I did this. It's that, oh, I learned this in the past, and therefore this is what I want to exhibit going in the future. And that's a very big mental shift. And truly now, the reason why I'm pursuing TalkSocial versus another, let's say, more achievable venture idea, is because I want to make sure that I'm able to wake up every day pursuing something that I truly believe is my calling, and I will regret anything else otherwise.

Yeah, right.

I have to remind myself. And so to me, the thing I counsel, you know, entrepreneurs and even my kids now is saying, hey, what are— what is the decision that you will regret the least? And just make that decision.

Yeah, that's great, sweetie. Thank you. Thank you. What a joyous, joyous conversation. Thank you so much for your honesty and your genuineness, and it was just great to have you on the show.

Likewise, it's great to spend time with you. Um, you know, look forward— again, you and I still have yet to meet in person.

I know.

So hopefully sometime soon.

Hopefully someday.

But very thankful for your time and, and your questions today.

Good. Awesome. Okay, good. Thanks everybody for joining in.

Bye.

Thanks for listening to From Startup to Grownup. If you like what you heard, give it a review on Apple Podcasts so other people can find it. And if you know of a founder or someone else who is meant to be on this podcast, drop me a line through my website, alisacohn.com.