The Origins of Pavilion and Why Good CROs Get Fired with Sam Jacobs

Hi, I'm Warren Zenna, founder and CEO of the CRO Collective, and welcome to the CRO Spotlight Podcast. This show is focused exclusively on the success of Chief Revenue Officers. Each week we have an open, frank, and freeform conversation with top experts in the revenue space about the CRO role and its critical impact on B2B businesses. This podcast is the place to be for CROs, sales and marketing leaders who aspire to become CROs, and founders who are looking to appoint a CRO or want to support their CRO to succeed. Thanks for listening. Now let's go mix it up. Hey everybody, Warren Zenna. I'm the founder of The CRO Collective, and I'm excited to have a great guest today. Sam Jacobs is here, the founder of Pavilion. Sam has a great career being a CRO for like 15 years and started Pavilion in 2016. He built it to a 10,000-person membership organization. Everyone knows, you know, Sam's business and his role in the go-to-market community, and we're excited to have him here today. So it's a great conversation we had, so look forward to it. Why and how did you start Pavilion?

Oh, sure. I'm Sam Jacobs. I'm the CEO of Pavilion. We're the largest go-to-market community for B2B technology, I guess, in the world. I've been doing it for 10 years. And the origin story for Pavilion is, you know, not only, not only am I the HairClub president, but I'm also, you know, a member. And I was a CRO at early-stage companies from 2003 through 2018 for 15 years. And I noticed a couple of things which I'm sure, you know, are near and dear to your heart, Warren, which is as I became more senior, what I expected to happen was I would achieve some level of stability, some higher probability of financial success and job security and, you know, lasting impact and fulfillment. And instead what happened was that after I left this really good run at this company, GLG in New York, after 7 and a half years, every stint that I had after that got shorter and shorter and shorter. And so, I worked 4 and a half years at one place and 18 months at the next, and then the next two stints were 9 months and 10 months. And I became a victim of this, you know, 17-month average tenure, 18-month average tenure that we talk about. And there wasn't really, at that time, an organization, for me and my peers to come together and to support each other. And so, uh, I started, I mean, there was a lot of meetups. There was Enterprise Sales Meetup and Mark Birch was running that. And my friends, uh, Dave Greenberger and a few others were running this thing called Building the Sales Machine. There was a lot of sort of event businesses, but there wasn't a persistent ongoing community just for executives and, and not for CEOs and founders and not for investors. So, uh, I started doing this and working on it really 10 years ago in 2016. And, uh, and then it became a thing. It became a business. And, um, of course I kept getting fired from my day job, so I was left with few other alternatives. And, um, I started working on this in December of 2018. And, you know, since then, I wouldn't say the rest is, is history. It hasn't been always up and to the right. But yeah, but it's certainly been a journey and we've got chapters all over the world. And, you know, we've built out this learning, this, this learning curriculum that we have through Prevoying University. And yeah, and now we're, you know, now we're here, we are at about 10,000 members and I'm in our Barcelona chapter now, 'cause that's where I live. But we have New York and London and San Francisco and Toronto and Boston as sort of our main hubs. And, Yeah. You know, and, and really it's just been a journey of trying to be, and I think again, we, we work on similar problems and challenges in the world, which is some kind of advocacy organization on behalf of operators, you know, on behalf of not necessarily the CEOs and not necessarily the founders, but the people that are doing the work reporting to those people.

Yeah. Very cool. Yeah, we have a, a great deal in common, your story and mine. I came in, well, I was in the media space, you know, I mean, it sort of happened by accident. I didn't choose it. What happened actually was I was, I was bartending in New York City in the '90s, you know, and, uh, I had done a lot of sales. I'd done a lot of sales. I sold newspaper advertising and stuff as a kid and I was really good at it. Anyway, very close friend of mine who I just spoke to today, 30, what is it like 35 years ago? This is crazy. He did this. Literally dragged me out from behind of a bar and gave me a job selling for him, uh, selling media. And, uh, it's a better story, which I'll get into some other time, but he sort of saved my life in a way. And, uh, I started selling media. I think I say he did. It was a trajectory change, you know, it was like one of those, like, it didn't, it wasn't a slow curve. It was like literally like you can see a bend, you know, like this in my life. And, uh, I took this job and I did really well. Yeah, I was a really, really, really good salesperson. And, uh, he was amazing. He was a very good teacher. He was really Really good person. So it just shot me off into this career in, in media. So I got into the ad tech space. So I was selling, so you understand that this is '95, right? I'm probably, could be close to 20 years older than you. Kind of weird.

I don't think you're 20 years older. You might be 10 years older.

Okay. I'll take it. I'll take it.

You're, you're, I, but I, we're, we're, I would say we're roughly the same generation.

That's what it is. Yeah, probably. You know, put it this way, my parents didn't like wonder where I was at all when I was a kid. You know, that sort of thing. You know?

Mine neither. They said, go outside and play.

Exactly. And they whistled and I come home. You know, it's an interesting thing that we're talking about this. So I was just picking a package up, like a FedEx truck pulled up in front of my house and, uh, I come out there and this kid's like unloading the packages and, uh, Freebird is blaring out of the truck, you know? And of course, you know, I can't help but— like, you got the guitar, I'm doing the thing. So I say to him, like, come here for a second, how old are you? He says, I'm 21. I said, do you like— did you pick this or did you just come on the radio? He goes, no, I picked this, I love this song. I said, so you're 21 years old, you're playing Lynyrd Skynyrd, why? And he said, you know, I think it's because of my dad. It was a great answer. Bless, you know, because I have a son, he says the same thing to me. Anyway, so, you know, I grew up with this.

Last part is is, uh, do you ever think about— so sometimes I'm on social media and I see kids doing Radiohead covers, and the distance between today and, you know, when Radiohead's OK Computer came out in 1999 is roughly the same distance between when we were growing up and like the '60s and the Beatles. Exactly. Yeah. And that makes me feel old.

I was born the year that the Beatles went to, uh, Ed Sullivan. So that was the year I was born, the year after Kennedy got killed. So I, you know, I'm, I'm, I'm a fossil, you know? So, you know, when I got this job in '95, the internet was just invented. So I got, I was really fun. I was like really on the wave of all this stuff and I still seem to be like, I'm almost like on a surfboard and underneath me is this cutting edge of everything that's going on. And it was really fun. So first it was the internet and we were selling website, web development. Remember they quoted $1 million to build a website? Remember those days? And, um, it was crazy. We were doing all this stuff and then, What happened was, I don't wanna get into a whole big thing here, but the, the iPhone came out and I sort of knew that this was gonna change everything. And I think everyone did. I'm not so smart, but it was like, this is cool and I wanna do this. So I saw this guy, another person who changed my life named Alexander Mars. He was the founder of an agency in France and the agency was acquired by Publicis Groupe. So they wanted, you know, brilliantly, they wanted to be, have the first mobile marketing agency in the US even before there really was such thing. So they bought this agency and I saw him speak and he's very eloquent. He's very smart. And I found him on LinkedIn through a friend that I said, I want to work for you. He said, come here. He hired me. I was a second hire there. And so I got hired at Publicis Groupe for this company and I was selling mobile marketing, whatever you want to call it. But this is where the jumping off point, why this makes sense here for us is that what happened was I was selling, uh, building mobile apps for companies, which was at the time a huge undertaking. It was a million dollars to build a mobile app back then.

Yeah.

But what we, what I was finding was two things, and you probably know about this. One is, you know, building software sucks. You know, you're dealing with engineering teams. It's, it's really a slog to build software. Once it's built, it's nice, but you know, building it is really really difficult. But what I found was, I'm talking to these clients, we had really good clients, we had like Citibank and L'Oréal, like monstrous companies. And what I found was they didn't want an app. What they wanted was they wanted to understand how they could get their company to become mobile. That's what they really wanted, right? So I was like, okay, that's a, that's a cool problem. We could probably help you with that. So we built a consulting company out of this and we actually helped big corporations move to a mobile-first thinking, you know, and we got paid a lot of money to do more thinking work and strategic work as opposed to building shit. And it became a huge business. So it was very, very cool. Just sort of like unlocked a part of my brain, which was I can help people figure out how to solve bigger problems than just build stuff for them. That, that's what I like to do. So what happened was I, I did very well there, but like you, it's weird. The jobs I had lasted longer when I was younger. As I got older, they didn't last long at all. You know, I became completely— two Jews that can't be employed, you and I, you know. And, and basically it's like, you know, I'm, I'm like trying my best here to like understand like what's going on. And similarly, I was a CRO at a company based in London. It was a really bad experience. Most of it my fault. I mean, I'm not victim. I made a lot of stupid mistakes. But yeah, importantly was I realized I wouldn't have succeeded anyway. This situation was not designed for me to succeed in anyway. A competent person would've had the same outcome. And I started asking myself, like, what's the point here? And more importantly is this problem between the go-to-market engine, which wasn't really one at the time, it was really just a bunch of functions fighting with each other to try and drive revenue, right? And You know, the SaaS business was full swing at this point. You and I both know what went on then. The exuberance that went nuts and people just wanted to drive acquisition as a means to get valuations and it worked. And so what ended up happening was I got caught up in all that stuff and I thought, you know, what happened to marketing? What happened to customer success? What happened to retention? This stuff's not even anyone's mind. Why is there nobody constructing this sort of engine? And the CRO should, So I thought, you know, why is there no CRO organization? Yeah. Like no one even knew what the word meant. Chief Revenue Officer, you know, it was a sales leader. And so that's what got me started on this. And similarly, it was like you, I got backed into a corner, which is, you know, no one's going to hire me and I'm not going to keep a job. So I may as well do this. So that's why I started doing it. That's how I got into this.

Very similar, you know, almost nearly identical, I would say.

Yeah. I mean, I'd say sure. And I think it's really cool. I think the, distinction, if I may, is we're focusing, you know, on the role and there's a specific reason for it. And the other part of it too is, and this is, we could talk about this a lot, which I really wanna get into, is this sort of distinction between the power of community and the power of the architecture. Right? It's, it's not one or the other, you know, it's in my view, it's, it's both. And I, I, I, I think opinion, the architecture has been sorely ignored. And I think too, if you look at the way organizations look at a chief revenue officer and like you and I both know, like they look at you and I both and they wonder, boy, how do we hire that schmuck? You know, that kind of thing. But they never ask themselves, what did we do wrong? What, how are we not operating properly here? So I'm curious to know your point of view on, okay, you had these experiences, you were fired and let go like me. What do you, what would you say was consistent on removing you from the equation if you could, about the situations that you feel might show some sort of pattern?

Well, uh, I probably, my perspective on the pattern is that I didn't work for companies with very good products and that I had one good, and I guess Generally speaking, I, you know, I just, uh, I was talking to the CRO of Replit just now and they're going to go from $100 million to a billion, uh, this year. And there's 350 people that work there and they don't have a system at all. And I don't even, I think he has one or two marketing hires and nobody, maybe has a few people in customer success. When I was at GLG, we went from $25 million to $300 million in the years that I was there. And I was in my late 20s, early 30s. I didn't know what I was doing. So I say that to say that I feel like product-market fit is pretty much 80, you know, Pareto law. It's 80%. I do agree with you that like there, I think revenue generation is a team sport. It's one of the reasons that, you know, we had this Bill of Rights concept when I started Pavilion and one of the rights was the right to align compensation. And what I mean by that is that most CROs are paid 50/50 base versus variable. And that doesn't make sense to me because it first treats the CRO like an individual contributor and it incentivizes them to close deals that may not be in the best interest long-term of the organization. But I also just don't think that's how real money is made from the interlocking pieces to your point about architecture. Between— and it's not just sales, marketing, customer success, it's product. It is, you know, have we built something that people really want and can we deliver it at a price that we make money on? And if you can do all of those things and people really, really want it, then you see these pretty immature organizations right now, like Anthropic or OpenAI or Lovable or Replit, that are skyrocketing. So, so what do I attribute my failure to at places like Livestream or any of the other companies that I worked at? I, I feel like, listen, there was a lot that I could have done better because, you know, to the point of my unemployability, I, I'm actually not a great systems architect. You know, I am one of those classic entrepreneurial people that and I'm also quite, you know, a loner in many instances. I'm not a great team player, not because I'm a misanthrope, but because I just, you know, I'm more of an artistic sensibility. I just like making things and creating things, and I don't really like compromising on them. So my point is, I don't, I wasn't a great CRO. I think I have interesting ideas about business generally, but do I have the discipline to do the same thing every single day and build the system so that the system repeats? And train and enable people in the right way so that they need it. I don't know that I'm as good as— I've met many people that are better at that. But all of that is to say that, you know, most of the time I don't think it matters. I think that you catch lightning in a bottle sometimes. And if you're lucky enough to be at Slack in the heyday, or if you're lucky enough to be at Salesforce in the heyday, I'm sure we both met lots of people that used to work at Salesforce that couldn't sell their way out of a paper bag. And that's okay. You know, they got used to having Salesforce on their business card, just like in the music industry. You know, if you were in A&R and you worked at Sony or Columbia Records, it was very, very different than if, you know, my record label Annex Records. So, um, all of that is to say, like, the main thing I attribute success to is sort of the physics and gravity of the market evolution and whether or not the company can be in the right place at the right time. And then I do, you know, and then the rest of it is architecture and designing the system in the right way. But I think we'd both rather be in a situation where we bring our architecture and our playbooks and our system into a thing that's already working and we're just working with the clay to, you know, to extract even more from this great opportunity than bring a beautiful architecture to a company that's a piece of shit that nobody really wants to buy anything from.

Everybody. So I just thought it'd be interesting to check in with you. I haven't spoken in a while to one-on-one, but got a lot of really interesting things going on. We have a series of events going on this year. You've probably seen me post a lot on, on LinkedIn. We have a series of CRO roundtables coming up. Two are right upon us. One is happening next week in D.C. and then right after that in Chicago. July 8th in DC and July 9th in Chicago. Be great events. If you're a CRO or an aspiring CRO or a founder, definitely come. These are really just super, super events. We've constructed a format that's unique and everyone walks out feeling like a lot smarter and having specific tools and perspectives. Plus the dialogue we create, we have a very specific way we do it. It results in incredible amount of really cool debates and insights and sharing and collaboration. So, I really encourage you to come. And then we're gonna be partnering with our great friends over at the Fullcast, Amy Cook and her company, great people. We're doing a roadshow with them starting in September. We'll be in San Francisco, we'll be in Austin, be a number of different places, we'll be announcing it, but real excited about that. So, stay tuned to learn more about those events and find out, we'll be putting them in LUMO so you can click on, link on. Secondarily, we also have completely revamped and updated our entire CRO Accelerator course. It's incredible. You know, you know, we put an incredible amount of time into this course. We've been running it now for over 5 years, 5 and a half years. And we, after all that time, we were able to determine like, what is it that we know, know works, what doesn't. What is it that we really need? And we put just an incredible amount of work into what I, I'm very confident is the best course for aspiring and existing CROs right now in the marketplace. There isn't another organization that focuses on this role like we do, and we've amassed an incredible amount of insight about the role because of that. And it's all reflected in the way that we kind of carry our participants through a journey that's really unique. And very detailed and in-depth and brings a fresh perspective to the role. And it's $6,800 per person. And we're in the process right now of accepting applications for the role, for the course. So if you go to the website, thecrocollective.com, that's thecrocollective.com, you'll see on there courses, you can just apply right there. Those emails come right to me and my partner, and we'll evaluate them and follow up quickly. But I can't, I can't emphasize enough how valuable this course is. And the feedback we've been getting has just been really, really remarkable. So in any event, thanks again for all your support and look forward to speaking to you soon. Bye. Like it. So, and I tend to agree and I think you and I are crazy alike. I mean, I'm an artist also, by the way. Yeah. I went to school for art.

Oh, cool. What kind of art?

I was a painter and I was a singer and all kinds of shit. Long story. I don't want to bore you, but I'm an artist really. I mean, I'm not a business person by nature. I happen to have really good business ideas and I'm good at, very good at creating stuff, you know, but I'm not like you. I'm not going to sit here and plot away at something. I'm amazed at people that can do that. It's like, wow, God bless you for that. You know, I got those kinds of people working with me, you know, but, you know, we're both probably got good ideas, probably quite persuasive. We can tell a good story. We can create a frame that people can sit inside of. We have good idea that makes sense, right? That kind of thing.

And I consider myself a storyteller more than anything. That's what I do. That's what I tell my wife. She says I'm a bullshitter and I say, no, I'm a storyteller.

And there's a difference, by the way. And they're both good things, by the way. Bullshitting is actually a good thing. But when done in the right way. So that's great. I like that. So I ask you something. It's an interesting philosophical postulation there. I'd say If I were to take your thesis to extent, you're saying it sort of doesn't matter and as long as you have a good product at the right time, you're fine? Or is there still a need for— because there's a fat middle, you know? I mean, not all companies are Slack and Salesforce, right? There's plenty of companies out there who are probably at an edge of something, right? Or in a space where they can compete. And I do, I do think that there's some organizational, like, architecture that needs to be put in place that can make it win, right, in that sector. And there's a lot more of those companies than there are the Slacks of the world, right? And so I think if you're in an organization and you're a CRO, and again, let's, let's, you and I agree on the, on the definition here. It's an important one. If I think that's a problem, probably part of the problem. So is, is that the CRO traditionally was someone who ran a sales organization and then it evolved. I think it should have always been this way, but it evolved into what I think it should be always. It's like a more of a like a go-to-market sort of architect, right? That creates a system for customer journey, right? Where's the customer at and how do we build an organization that fortifies where that customer is successfully enough that there's a handoff and it feels sort of like a wheel, you know, as opposed to like, more like a thing. And, um, that's a skill that's different than a sales leader. It's not the same. And like you said, you know, if I'm compensated wrong, I'm gonna probably find somebody who's used to being compensated that way and I'm gonna put the wrong person in this job and they're gonna be forced to do things that are counter to what the job's supposed to be. And I think that's a big miss. And then the other part of it too is that when it does work, and I've seen this a lot because we help people do it, it does make a huge difference. Are you going to become Slack? Maybe not, but you can go from $50 million to $100 million, which is a pretty good thing, right? Um, yeah. So I would say like, and in that, in the equation there where you got those companies, let's say that aren't, they don't suck, like their products don't suck, but they're in a space that can be competitive. What is the difference in your view of the pixie dust that makes one company able to put things together better than other ones do?

Well, again, a somewhat controversial opinion for a guy that has had multiple CRO jobs, but the pixie dust for me tends to be marketing, to be honest. Now, I do think that there's great— listen, to your point, right? There's an architected customer journey that begins before their customers from the moment they engage with you or encounter you in any way. And then there's this, you know, funnel presumably that you move down and from, you know, awareness and interest to decision and action, and then you become a customer. And then hopefully, you know, you got the bowtie in there and your problems are being solved and all of that good stuff. But for me, I think that the meeting You know, is the atomic unit of growth. And if we know how to get meetings with our prospects and with our market, we can make money. And so for me, the way I describe it and when I teach it at Pavilion, it's, I think this doesn't mean hire a marketer before you hire a salesperson, but I find that the act of getting a meeting is the most difficult thing, particularly in our attention-starved world. It's also the most expensive thing in many ways. And that's a mixture of science and art because marketers are portfolio managers, you know, allocating budget across all different channels and campaigns. And so the pixie dust for me tends to be the people that can really articulate the value proposition in an interesting way and tell a story in an interesting way that gets a meeting. And again, that doesn't have to come from the marketing department, but that's That's where it tends to live these days in demand generation. And then if they can do that, all of the structure around it, and maybe I'm thinking more specifically of like SMB or commercial companies, but in those worlds, marketing I think is the primary discipline, the act of getting a meeting. And I tend to say, if you, a salesperson with a perfect process that runs MedPic or Medic and was trained by John McMahon and does all the things, with no meetings will get fired. And a salesperson that doesn't know what the hell they're doing or still using BANT 30 years later, but has a bunch of meetings will close some of those meetings and make the company money. So for me, the pixie dust tends to be an understand— and underlying that is, which again, to the point of like, what are the things that we teach collectively, you and me, and what I teach, I try to teach the discipline of finance most of the time to revenue leaders and sales leaders, because what I'm trying to get them to understand, particularly in tight markets, that fat middle that you're talking about, is when capital is constrained, your job isn't just to hit the number, it's to hit the number at the right cost. And we have to understand how to evaluate the business from a mathematical, financially literate perspective so that we can allocate the money accordingly. And most of the time, marketing is a cheaper way to get meetings. Than sales, but it all depends on, you know, a bunch of other factors. So the, for me, the, the pixie dust tends to be great marketing departments, but of course, to your point, it's also the interlocking system of sales, marketing, customer success, all working together. Yeah.

I don't know if you know, probably don't, but I have a marketing agency. I've had it for 20 years.

I think you told me that the last time we chatted. So there you go.

So we're on the same page. Yeah, it does very well. So I'm a big believer, obviously. I came out of marketing. That's why Got my, cut my teeth. I sold marketing services my whole career. So I agree with you. I think marketing is an art, right? It's a science, all that stuff. And I think it's got subsumed by sales. Unfortunately, the SaaS business destroyed it in my opinion. It tends to be the purview more of consumer businesses, apparel, et cetera, where it lives and breathes. But, you know, trying to translate it into B2B, you can do it. I just don't think people do it well. And I agree with you. That at the nexus of an organization is a story, like you and I already said, and that story needs to be really compelling, needs to make sense, needs to communicate something really clearly in a very pointed way to the right person in the right way at the right time. And if you can engineer that, then you can scale that and you can get more traction, you know, and I don't think it's done very well. I mean, I see it all over the place. It's actually insane to me how companies do business without knowing how to do that. Um, so I agree.

Yes. And I think, uh, they, when I, the first time I ran marketing, um, I hired a, you know, I thought, well, marketing is demand generation. Marketing is getting leads. So I hired a demand generation person and, uh, I said, go find us some leads. They said, okay, we'll run some campaigns and we'll buy some ads. And I said, okay, great. And they said, what do you want the ads to say? And I said, I said, what do you mean? Buy, buy the product. That's what the ad should say. And my point is that I think we're probably also in agreement that people in B2B in this modern world define marketing as exclusively get me more leads without understanding that there's a story that needs to be told. There's a brand that needs to be invested in that if you don't invest in brand, which is a way of saying if you're not so damn transactional with your prospects, and if you just take a longer-term view, you'll make the short-term quarters a lot easier to hit. But if all you do is try to grab people at the bottom of the funnel, you're going to run out of funnel very quickly. And so I also see a big trend of marketing moving under CROs, and I think that can be okay if, if the CRO has something to teach the marketer or has some ability to hire a great marketer. But I think it's a challenge when CROs that came up through the sales function that don't really have a full comprehension or perspective on, like you said, the entire customer journey.

Yeah.

Rot marketing, all they're going to do is solve for this quarter and they're going to, you know, starve the future to feed the present.

Yeah, it's a good point. And I am an advocate for the CRO to sort of like, let's say, you know, own like all these functions. I'll make a distinction here because I think there's a way in which sometimes this is talked about that doesn't, it's not accurate in terms of what's happening. It's not that a CRO should be the head of marketing because they own it. No, it's more that they are responsible for it. No different than, I hate to see these sort of cheesy analogies, but it's a good one. If I'm a conductor of an orchestra, I don't own the horn section. You know, I just conduct its play amongst the other instruments. You know, I wanna make sure that they work together. I have to understand how they work together, you know, but the guy playing the trumpet can play better than me and he should cuz he's playing the damn thing. You know, I just wanna hire someone that understands the music and I can say, you know, we can communicate with each other and I know that person will do a great job. It's so different if I'm a director and I'm directing a movie, I get the best possible actor I can that'll convey the behavior of the, of the part. That'll convey the message to the audience to draw the audience in. And I, that's what they do. I don't do that, you know? And so I think that's a, that's a skill. And I think it's underutilized. I think it's sort of like saying, well, you know, you don't do that, so we'll do it. No, it's a look, there, there is someone who coordinates things. There is. And I think it's an important thing. And, and I do think you need this. You need someone who sort of looks at pieces together and knows how they fit together. And there is an orchestration. And you and I know if you're a good salesperson, which I'm, proud to say I was, I probably still am. There is a component of sales that is marketing. I mean, if I'm selling to somebody, I've engineered a language that I know that if I speak to a prospect about it, it's gonna make them persuade, persuade them to wanna listen to me more. And there is marketing in that. It's not sales. It's, you know, I'm, I'm emphasizing a need and I'm pointing out a pain point. And I'm doing it in a way that if marketing listened to that, they may grab things that would be useful for them in the marketplace. And similarly, a marketing person might look at it a bit differently, that a good salesperson would say, ooh, that's, I'm gonna steal that.

That's good.

There tends to be this division there. And it's, I think, if I would say, driven by the way organizations are set up to drive that division. So to your point, right? If I've got, I don't think, by the way, marketing's job is to get leads. That's an outcome, but it's not their job. And if I deploy them that way, they're gonna do the things you just said. That's what they're gonna do. They're gonna get me leads. It should be really the marketing's job should be to educate, inform, and persuade your prospects and the audience out in the world as to why this matters to them.

Yeah.

Enough so that they, they're like, oh, oh shit. I, I, I didn't think about that before. And now I can associate that message with this company that now later on when I hear from them, I'm more inclined to trust them because they've taught me something. And I would rather deploy a marketing department to do that than get me leads. Now, the problem, and this I wanna talk to you about, what you're talking about right now is incentives. So, you know, if, if I tell my marketing organization to get me leads, well then they're, that's what they're gonna do. 'Cause that's what they're being paid to do. And we're paying them to do the wrong thing. But someone has to say, well, what are we paying 'em for then? I mean, how do I measure what they're doing? We should know what leads they're getting. I would say no, you should talk about how well people understand the problem we're solving. Have we gotten people smarter about this to the point where they realize that now it's something we need to do something about, or we've made them aware of the fact that there's a solution that they can do something with, right? That, that's a better measure of things. 'Cause now you gimme a whole audience of people that my amazing sales organization can go talk to those people and they're very ripe for that conversation. And I want to talk to you about the greater architecture inertia that maybe comes from boards or comes from investment organizations that say, look, We have a quarter run here. Okay. I hired you as this guy. You're going to come in, you're going to run this machine. And I need you to close deals this quarter because we have to hit this quarter. So now you've given the CRO this false sort of like prisoner's choice between building for the future, which they, some don't know how to do, some do, and building for next quarter, right? How do we manage that one? What has to happen? For organizations to understand, which by the way, you and I talk to a lot of people that are in these organizations and none of them argue with me. They're like, ah, you're a full of shit. You're an asshole. They're like, yeah, you're right. But they're not operating that way. So there is an, like you said, physics or gravity that's going on that despite everyone's understanding, common sense, they still run things in a way that I understand. I'm not naive. I understand we gotta close business quickly. But without that slowing down, we don't have the opportunity to actually create that sort of like opportunity to plant those seeds in the marketplace with enough. And I, you're talking to, I don't know how many operators. What's your thought on like what the, is that still gonna happen? Is it changing? Do you see a crack in that or is that never gonna stop? What do you think?

Well, I think that generally speaking, the, you know, my old boss used to say the capital strategy is the strategy. And what I mean by that is the owners of the business have incentives, like you said, and those incentives will tend to dictate the operating cadence and rhythm of the business. And so if you raise venture capital at a very high valuation and to justify that valuation, you need to apply a tremendous amount of pressure to the organization and grow at, at, you know, astronomical rates. You— again, there's sort of 3 possibilities. One of them is that you are going to grow at that rate no matter what. And as a good architect, you are just ensuring predictability or you're accelerating that growth in some way. The other possibility is that you're not and you're just going to wildly miss the target and that again, there's not a lot of agency there. And then maybe the third is you can inflect the curve a little bit to get to the target, but it all depends on what is the target and how was it constructed and is it used to justify a preexisting valuation or is it the exhaust of a well-designed system that has a point of view on how it interacts with the market and the customers over time. And, um, so Are there businesses that are operating on a longer-term perspective? A million percent there are. And that has to do with who owns them and how they run them. And I think if, you know, if you're a private equity firm and, you know, I know many private equity firms that raised funds in 2021 and 2022, and that those were particularly bad vintages for investing in software companies. And you paid top dollar at the height of the market and you're at the end of your hold period and you want to get out and you want to get out and you're willing to, you know, put lipstick on a pig and make the business look a certain way, even if fundamentally it's not that way so that you can trade the asset and get out of the business. And there's going to be in that world tremendous pressure on the CRO or their leadership team to drive, you know, all of the metrics that people care about, like EBITDA and profitability and revenue growth as well. So all of that is a long-winded way of saying, yeah, I think there's lots of people that are running different kinds of businesses and it's going to tend to depend on the ownership structure and the personality of the CEO and founder of the board. You know, how do they want to run the business? There's a lot of— I also just think people in general, are short-termist, you know? I mean, our world is a short-term world and people are paying less and less attention. I've done a lot of writing and research on this and they're holding stocks shorter, you know, for shorter periods of time than they used to. Our attention spans are shorter. So I think being long-term focused can actually be a pretty unique competitive advantage if you can really do it. Um, but it's not natural for people, particularly in the modern world. So I don't have a ton of optimism that things are going to improve, uh, systematically, but I definitely think there are people that, you know, if they own their business, you own your marketing agency and you're going to manage it the way that you want to manage it for the long term. But if you sold that business or you sold a third of that business or, you know, a meaningful chunk of it to some private equity investor, you probably run it differently, you know, over the next couple of years than if you hadn't.

Yeah. So you did that, right? You took— you took funding, correct?

Yeah, I did.

And what impact did that have similarly on you and the way you ran things? And what were the implications of that today?

Well, it largely had a negative impact, to be candid. But it wasn't anything that the investors did. You know, they've actually been very, very supportive.

Okay.

And I didn't sell the majority of the business. I just sold a minority interest in it. And they're not venture capital. They're sort of more growth equity. But the real impact it had was on my, you know, there's like this hedonic adaptation. It had a perspective on my appetites for what I wanted to do with the company. And I lecture and write all these LinkedIn posts and on social media and on podcasts and stuff and talk about unit economics and efficient growth. And, you know, the impact on me was that I lost a little bit of focus on our ICP. I lost a little bit of focus on exactly why we existed and what we needed to be. I did pursue some avenues of growth that later became difficult to reconcile. And, you know, it's, I mean, I still run a great business. It's global, you know, it's doing great things. We help We've helped tens of thousands of people in different ways, you know, get jobs, negotiate better comp, be more successful in their roles. So I'm really proud of what we built. But there was a period, you know, really through last year, I would say, when we weren't as focused as we could have been and when we didn't have the tight ICP that, you know, we'd grown up with. And now we're trying to get back to that. You know, now we're trying to— now we're trying to in some ways, see if we can have the best of both worlds and have a great local brand, but also be singular in our focus and try to execute really well.

Yeah, I understand. I do. That's probably why I'll never take money, but that could be a dumb decision on my part.

Well, I mean, it's— no, there's no absolutes in this world.

It's absolutely— but, you know, like you said, how much money, you know? Yeah, in the beginning. Exactly. In the beginning of this conversation, you said something that resonated with me and we're alike this way, and that is that I, as an artist, as like a sort of a creative person, I don't like to compromise on things. I do them a certain way and that's why I like stubbornly sometimes, like, you know, I get people I work with who are like, come on, man, we should do this. No, it's just not what we do. And no, I'm not doing that. I don't want to say it that way. We're not saying it that way. Very, very difficult with this, but it's because I have to protect this thing because it's really specific. And if it's not specific anymore, it becomes a blob. And if it's a blob, then What am I doing this for? But it comes with compromises. There's probably a lot of ways I could have done a lot more things. People came to us and say, you know, why don't we let salespeople in? And just not what we do. It's not what we do. And, you know, it's a pretty big market, the salesperson market, right? I just—

Biggest in the world, probably.

It is. And we just don't do it. You know, we could do a great job. I mean, I could probably start a sales training organization. Quite good. I just don't want to. You know, just other ones doing that already. You know, they're probably doing a really good job of it.

Well, that's, I mean, I, I do think that, that, uh, this, you have to have a right to win, you know, even in small market, even if you're a small business or, you know, whatever you're, any, any size organization, there needs to be a justification for why do you deserve to provide that solution to the market. And you also have to understand that every time every new vector of growth, you are entering someone else's entire universe. You know, we do all these courses and, you know, as I'm sure, as you know, you sell courses and a training program and so does Booth and so does Wharton and so does HBS and they all have chief revenue officer school and some of them pay, charge $25,000, some of them charge $5,000. But there's a lot of people out there that are, that are trying to provide this solution and this service. And you know, what we did is we got so distracted with all these other directions that like every time you do something new, you're inviting competitors. So that, that can be okay. You know, but, but just understand that that's what you're doing. The surface area of people that you have to compete with, defend. I realize it's just a lot easier to partner with people than to compete with them all the time. But to partner, you have to, you have to be willing to say no. You know, people show up on your doorstep, like you said, with money. I will pay you to do this. And you have to be— strategy is saying no. It's not saying yes.

100% yes. And I absolutely made a mistake younger saying yes to a lot of stuff, and I'm just not as tantalized anymore. But that's good, you know, but I agree with you that, um, the— I have to continually fight for the right to say this, right? And the only, not only, but one of the main ways in which I feel we can get that permission is the fact that we're very focused on this thing. By the way, I don't know if you're familiar with, probably are, a gentleman by the name of Blair Enns. You ever read Blair Enns? His books?

No.

Okay, shit. There's a great book you should read. It's called The Win Without Pitching Manifesto. It's the best business book I ever read in my life. And he's just great. He's an amazingly smart guy. And he wrote this book and basically it changed my brain. You ever read a book or see a movie and like your molecules change? Like you don't feel like you're the same person afterwards? I know why, like your brain's like, yeah, all the time. Yeah. And this was like, wow. And basically what it was was, um, and it's just spot on. You have to specialize, I think, you know, like if you get really specific about things, then that specificity gives you the permission because, you know, if you do it long enough and you're really good at that one thing, it's easier for you to manage that being like the expert in that area as opposed to doing a lot of things. And, you know, in the agency business, right? So this is a really good example. So I worked for so many agencies. I worked at these big, huge holding companies, like Publicis Groupe, and I worked for Havas and all these, and they didn't specialize at all. I mean, they were just like the, you know, agency of record. You know, they had like the SEO department and the sales department and they had the communications department and the writing department. Creative Department. Yeah, they were like the sort of, you know, um, all-purpose marketing organizations, which, you know, not really great at any one of those things, but they just did them all. So there was an efficiency play that they got. They did it, you know, these big brands just give these guys all of our money and let them run everything. It's easier. Um, and what happened over the years in the marketing space is brands were realizing, you know, this doesn't work. I don't want to hire these agencies that do everything. I want to hire the You're good at this thing. You know, marketing became much more specialized. That's became more finite, much more pronounced in terms of what it did. And I wanted this. So what we do on our agency, this isn't a sales pitch, it's a decision we made for this reason, is that we only do organic marketing. We don't do any paid, no performance, nothing. Just one thing. We help you make sure that your brand attracts the people whom have intent to look for the problem you solve. That's it, organically. That's it. I don't want to do anything else. Okay. And we're fucking good at it, you know? And so what ends up happening is we don't do any marketing. We don't do any selling. We just get inbound all day. But it took us a long time because that's just the thing that we're known for, right? Similarly, this thing is we want to be the you know, the CRO guys, right? And so to that end, again, going back to the same thing we're talking about, that specialization slash permission is— sure, you can't beat an organization like Wharton or Chicago Booth. It's an amazing logo, you know, you have it on my LinkedIn profile, people all of a sudden think you're really smart, they want to have coffee with you, you know, but, um, doesn't mean it's true. Plus they also have courses for every executive thing. I mean, they've got, you know, CFO course and they've got, right? It's just, there's a lot. So if, uh, we're just doing one thing over time, and I think it's happening, it's like, okay, you know what? I like the fact that they're not distracted. They probably know a lot about this because it's all they think about. So I want to talk to them about it. And then if you can deliver on that promise, that magic between specialization and expertise becomes a winning formula. And I think that that's what's happening. In the market right now is there's a lot more specialization, especially with AI. I kind of want to switch gears here, but it's important to note, I think that all these sort of point solutions, they're going to do well. And I think that as people get gobbled up, I want to get your point of view on this, is like, where does that expertise and, you know, agglomeration end? I don't know the answer, but this seems to be like the way, again, I'm just sort of sharing a business philosophy, which I think you're correct to say that you have to be good at what you do and you have to have a good product. Want. But I do think that focus is important, and it's not easy. If I took money, I might end up thinking, ah, you know, you're right, we could probably bring in this group too, because I could see it happening. I could. I just don't want it to, you know. So anyway, I don't want to go off on that tangent. I think it's an interesting topic because I wrestle with it, to be frank with you. It's not a thing I'm clear about it, but sometimes I wonder, am I schmuck? You know, so I don't know, sometimes, you know.

Depends how you define schmuck.

I guess you're right. Yeah. I can ask my dad that question, I suppose, you know.

I don't think— you don't seem like a schmuck. I mean, I agree with you that fundamentally, we're on the same page. I mean, I think focus is very important. I also think that that doesn't mean there are still adjacencies that make, uh, you know, organic sense that provide the right, that provide coherence. And, uh, and I think it's the reason that, you know, you could say, well, Steve Jobs wasn't focused when he made the iPhone and iTunes and this whole interconnected system and MacBook, but there's a coherence there that because they all work together and it's an integrated system. Which is very different than, you know, Sony buying Columbia Pictures and, you know, Gulp 'N Western and these '70s and '80s conglomerates buying restaurants and movie theaters and travel agencies and all these other businesses that don't seem connected to each other.

Disney. I mean, my God, you know. Yeah.

Although I think Disney probably does a, did a better job of any because, because again, they have the coherence of They buy the intellectual property and then they have a pipe that they can distribute it through. Yeah, absolutely. That's what the trademarks are and, you know, that's their movie studio. So, but that, you know, I, so I agree with you. I think right now that conversation is happening in AI because a lot of people are saying that Anthropic and OpenAI and maybe Google and that a few of these companies will replace all of our existing software platforms because you can, Vibe, what do you need to buy, you know, a CRM for or, or Gainsight customer success platform? You can vibe code it using Cloud Code or Replit or Lovable or something like that. And, you know, I would imagine your answer is the same as mine, which is that I don't think that's going to happen. I think specialization, to your point, I like what you said, gives you permission. And I also think that brands you need to occupy a specific place in somebody's head and you can't be all things to all people because that's not what people are really looking for. And it's the reason that you could probably, I don't know, I think, you know, if you ask Harvey and Lagora about the moats that they have, you know, their sustainable competitive advantage, they might, they're probably gonna overstate it, but nevertheless, it's true that Lawyers as a category of people want to trust that they're buying from somebody that understands lawyers. And they don't probably want to buy from something that's one of 50 buttons on the left side of the, you know, of the interface when you log in. It's like, hey, they're on LegalNow. Okay, great. So all of that relates. And I think that, again, where I come out on it is that the real limiting factor is the is the limits of human cognition, which is that we can keep certain stories and certain categories in our head and we're just not good at saying, oh, that does everything and that does everything, because we need heuristics to tell us what things are good for and what things are bad for.

Yep. So I'm curious, you know, when you think about the role, the CRO role from the customer, from the, let's call it like the buyer, the person who's hiring one. Okay, so I need one. I just want to be sure, see if we and I are aligned on this, what your thoughts are. You've been— you deal with this so often. You talk to a lot of operators and PE. First question is, in your view, how would you say the overall population of operators defines the role? That's one question. I'd be curious what you think. And the second one is, what, if any, process or sort of, you know, diagnostic does a company use when they're hiring a CRO? And is it consistent? And do they think about it? And what's the way that they manage one and the way they deploy one? Like, is there any sort of way that you guys think about this part of the world, the other side of the equation as opposed to just the CRO themselves?

Well, I certainly don't think, you know, that there's any consistent process for when, when people think they need a CRO or when they hire a CRO. I remember working at a company that at the time, now they're doing great and I'm very happy about that because I'm a shareholder, but back then I was just a little employee. I was their CRO and they were doing $2 million in revenue and had 2 salespeople.

It's very common, I see, unfortunately, yes.

I said, I don't think you need a CRO. Why don't you hire a sales manager? You know, why don't you even have a marketing department? So, uh, and the guy said, no, we need you. I've seen some of your videos and I want it to be you. And it didn't work out as probably could be expected. So I don't think that companies do go through a process of figuring out what, although I think they're probably better now. And I think what people need to understand about hiring a CRO, to your point, is they're investing in a system and a process. They're not investing in a very talented senior closer. And I think that that's what sometimes they think they are. Now, I will say, you know, everything that you and I have been saying over the last, you know, 10 years, 15 years, I think we, you and me have to be careful too, because span of controls are changing, how companies are run is changing because of AI. And so I do think I don't think you hire a CRO because you want somebody to close, you know, to be the only closer. But I do think that there is more of an expectation these days that every person at the company is more hands-on than they were expected to be 10 years ago or 5 years ago. Because, so, all of that is to say, what is the, if I'm buying a CRO, have I gone through a rigorous process to figure out if I need one? No, of course not, usually. Maybe they've hired you.. And so they have, but most of the time they haven't. Yeah. And what should their expectation be? Their expectation should be, I have an investment in revenue that needs to be optimized and systematized as opposed to I'm hiring somebody to save my company.

Yeah. Well, the hero thing is the problem. Yeah. Honestly.

Yeah.

That's really it. It's the hero thing. And you get two weird things. You get a weird, like very codependent situation here. You've got companies that want a hero and guys that want to be heroes. I mean, it's a horrible relationship, you know what I mean? And so they both meet together and it doesn't work. There's no such thing. It's not Hollywood. And, you know, unfortunately, I think that you're correct. I agree with you completely. And I do think that the competency profile of a CRO is changing a lot because of what you're saying. And it's interesting because I don't, we're seeing this, right? This is all we do all day is like talk to companies about this. And, you know, we get these sort of, you know, the pattern recognition at this point is pretty immediate because we do it so often, but we see like, you know, 3 or 4 answers. Most of the time it's like you said, I just need someone to come in here, you know, clean things up, you know, very vague, you know, that kind of thing. We need a hitter, you know, then you get some sophisticated organizations like, yeah, you know, we need systems, we need more process. You know, we're experiencing operational complexity. We need somebody to come in and wrangle things and, you know, make it better. And even those which are music to my ears, what's missing is, well, how are you going to do that? How are you going to manage this person? But what's their scope? What's their authority? What's the resource allocation they're going to get? Who unders— who over there? I don't know. I don't know. We'll figure it out. Well, you probably won't actually know. And you should, right? Because what'll happen is that person will leave in 17 months and you'll blame them. You'll say, as opposed to, you know, we sucked and we didn't know what we were doing. And, you know, this sort of like introspective board and introspective CEO, they're not— unfortunately, we don't see as many of them as we'd like, but we see some who say, look, you know, we, we may— we really dropped the ball on this. This probably was a good person. The person was given the right sort of directive and mandate and et cetera, probably would've been successful. We just didn't do it. We don't know how. But while I'm talking to you, Warren Zenna, and this is a really great conversation, and I've got, you know, Hydro Constrogo looking for my next one right now, and we're talking to 4 of them and it's gonna be great. It's like, okay, look, dude, you know, that doesn't make any sense. So it's kind of hard to turn the machine off enough, long enough to get them to think differently. But I think there is, there is an increased awareness. People recognize this needs to happen. And, you know, I think that's an interesting part of the conversation is the operating side. If you're hiring an executive like this, that's going to be responsible for, like you say, maybe retain this person, if you compensate them properly, I agree with you, to 10x your business or triple your business, there should be a lot more thought should go into how you diagnose the hire and the role. And I don't see it matches sometimes with the amount of onerousness that they're going to put on this person and the amount of diagnosis they put into it. It's kind of crazy.

No argument here. It is crazy, but it's also like, I, it's what you said. It's both sides, you know, it's, it's, uh, it's the CRO saying, I need to be the highest paid person at the company and I need to make $800 grand a year and my base needs to be $450,000. And, and it's the company saying, okay, well, you know, if you're going to be such a pain in the ass in the negotiation and bend me over for all this cash, then I'm going to give you a huge target. And I think the rational, the rational way to think about it is probably heavy equity. And then most execs, I think most executives should be paid the same way. I think everybody should be on the same comp plan, meaning head of product, head of sales, you know, CRO, CMO, CPO, because I think we all need to be aligned into what we're trying to do, which is to, you know, build long-term value and deliver long-term value to customers. But that's, You know, for somebody that's, that has a W-2 from 3 years ago that has $750,000 on it or $1.2 million on it, that's a hard pill to swallow for that person.

It is. So tell me a bit more. Like, you, I know you're making some moves. We talked about them. So I know you want to talk about them. And I'm interested in knowing how you've changed the way you're going to market with Pavilion and what you're offering now and the way that you're recalibrating the offer to maybe make your product more relevant or more profitable or better or whatever?

Well, the main thing we're doing is I think the future is, you know, I think we all— you may agree— peer-led learning and coaching is transformational when done right. And so we— I started building Pavilion Gold a year ago. It's for CROs and CMOs at $100 million and above. Um, you know, presidents, general managers, a lot of private equity-backed businesses in there. And it was not just to, you know, to put these groups together, but it was also to test a more traditional mastermind format, which YPO calls forum and which, you know, a bunch of people have, which is a group, the same group of people meeting regularly, sometimes led by a moderator, sometimes not. We believe that there needs to be a moderator there and, um, We call those small councils, and it was really a test to see if, you know, Pavilion was this big amorphous thing. You join the New York City chapter and there's lots of people in it, and you go to dinners and it's great, and there's learning and education, but people really want to sit next to their peers and ensure that they can ask the person to the right and to the left, how are you solving this problem and what are you doing about it? So we started about a year ago. I wasn't sure how it was going to go, and it's gone very, very well. And we are rolling that concept out to organizations at smaller scale. So in the next couple of weeks, we're going to be launching this thing called Pavilion Scale, built around these small groups that we call small councils. It'll be for the companies that don't qualify for Gold on the journey from $1 to $100 million. And, you know, our primary focus is going to be exceptional and unique experiences built around a group of 8 to 10 peers that meet regularly. And then occasionally bringing in people for, you know, larger 30, 40, 50-person retreats, workshops, masterminds, seminars, things like that. But it's really trying to make sure that the rooms that we create are the perfect room for those people to learn what they need to learn, you know, as they navigate and manage their careers. So that's what we're working on. Pavilion Scale is what it's called. Pavilion Gold is the, is the top tier. And, you know, that's a lot of our focus.

That's great. I love it. Yeah. We're, as you might know, you know, we do roundtables.

Yeah.

We're doing about 8 this year. Similarly, people in a room talking about smart stuff. We have a sort of a focus on solving a problem. What we really want to do, and is what we're similarly trying to do, is we want people to leave our organizational events feeling like they have a better strategy for solving the problems that they sometimes feel like they have no control over it. You know, I don't know what to do here. What do I do? I inherited a system that I have no control over. They want me to control it, but then I can't control this messed up thing. And so is this changing the membership of your organization? Are you shrinking your TAM? Are you increasing your TAM? Like, what's the way that you modified your audience targeting?

That's interesting. If you did or not. I, well, the full strategy, no, is a much bigger TAM, honestly. I think actually. But, but the, that the big TAM is, is going to be through courses and learning. And, and then this is, yeah, a smaller community that is, you know, more premium. So, you know, frankly, more expensive that is more focused on exceptional experiences in these small rooms. So an example would be this retreat that we just went on to Jackson Hole 2 weeks ago, where we're trying to bring together. And in those experiences, I mean, you know, we can talk about this at great length, but that part, I don't think it, you know, I would say $100 million and above is probably a smaller TAM than the one that we're currently going after. But the nice thing about, you know, The way we're structuring it from a pricing and packaging perspective is it doesn't need to be a million people. You know, we can have an exceptionally great community and we don't need 10,000 people like we currently have. We can build bigger, more interesting, more curated, more intimate experience with 2,000, 3,000 people. So that's the journey. You know, the journey is— as probably a smaller, more exclusive community, but a much bigger learning platform for anybody that wants to develop these skills.

Great. Um, well, I look, this is great. We could probably talk for another hour, but, uh, probably we'll have, you know, lives. So we're going to get back to them.

Um, sadly. Yeah. Yeah.

Uh, I'm curious about something, you know, if you weren't doing this, and you could do anything else, what would you do instead of this?

I would have gone— well, it might have been two things, but mainly I probably would have gone out to LA when I was a kid and stayed there and, uh, you know, directed, acted, wrote, produced, but been in the movie industry. That would have been— that was my other calling.

Yep. So I'm with you.

I'm sure we're similar that way.

Yep. Yep. I think I probably would have either worked in the, uh, theatrical, or I would have been a singer. Anyway, so, um, it was really meeting you here.

Well, nice to spend time with you. Thanks for having me.

Yeah, thanks. Um, I'm sure we'll be seeing each other around, and, uh, yeah, we appreciate you, uh, sharing with us today. Thank you for listening to the CRO Spotlight podcast. The CRO Collective's mission is to help CROs succeed and help founders and CEOs build CRO-ready organizations. You can find out more information about our services at thecrocollective.com. That's thecrocollective.com. And we look forward to having you join us next time.