Founder Story: Building a $100M Software Company with AI

Here's the update. It's December 4th, and what happened today? We had a big day. The last 3 days have been big. We've been doing a ton of demos with Carrot. Which is our LinkedIn account-based marketing tool. And I've been talking to a lot of enterprises, and what's interesting to me is that a lot of our leads are coming through my podcast, Marketing School, through Instagram, through YouTube. And, you know, originally I thought our leads, a lot of them wouldn't be enterprise or mid-market level.

Actually, a lot of them are, a lot of people that listen to the podcast.

And so That's something I can be pretty grateful for to see that because I'm looking at a lot of these companies, it's like, man, these companies are doing, you know, they have thousands of employees, they've raised hundreds of millions of dollars or $20 million or $30, $40, $50 million or so. And it's exciting. And what this made me realize is that with all this account-based marketing stuff, when you go with people that have money to spend, it's way easier. And the way we're selling these right now, we're just getting on calls with people, 10, 15 minutes, asking them, you know, hey, what are the current challenges with account-based marketing? And, you know, what can we do to be more helpful? And what I mean by that is, how are they going about targeting right now? How are they spending? And it seems like most of them are spending inefficiently. And then we ask them, you know, After we showed them the demo, are they ready to go for a pilot? And then just right there, a pilot is basically, you know, 30 days or so. They'll pay us some money, put some skin in the game, and then we test for 30 days, and then we figure out if we can do something longer term. And that's a big lesson too, because those that pay pay attention. You know, whenever you give something away for free, it people don't people don't respect it that much, right? And I mean, whenever I give something away for free or I'm given something for free, I kind of just ignore it and I don't prioritize it, right? But if you put a little skin in the game, you make them put some skin in the game, you're gonna do a lot better that way. And the cool thing here is like people are saying, hey. you know, we'll pay thousands of dollars a month for this. And it makes a lot of sense because if you're targeting companies that are bigger, that can afford to spend more money, then you just ask them, you know, what are your annual contract values? And that's your ACVs, right? Basically asking how much does your, how much do your customers pay on average? And when they start saying, oh, a minimum's $500,000, some are a couple million dollars or so, you know that you can charge, you know, $10,000. 6 figures a year at least for your product, right? And so it's really exciting because we're getting a lot of demos. This product is pulling us forward. The problem is I have to balance this with operating Single Grain, which is the main company, right? It's the agency and Carrot sits under that. But, you know, it's time to hustle right now and I'm here for it, so I'll be back in a second. Alright, All right.

So continuation here. So I was just saying that we picked up the office again in LA. Even though we're a remote-first team, there's 3 of us working in the LA office. And we just— we're flying right now. And I'm enjoying it. But quickly, you realize that you can only do so much as one person. And we're shipping very quickly too. I think the other takeaway I can give you is that Today, we shipped a feature in Carrot ABM. And it was a simple— relatively simple to understand feature. But it took an entire day to do it. And my CTO was just saying that, look, this used to take maybe 7 days to ship. And what took a day using copilots, these AI copilots that help you code faster, it took him a day. So it basically cut his time down from 3 to 1 days. And I think we're going to see a lot more of this. I am excited about— people talk about AI agents, which can be also thought about as virtual workers. We're going to see a lot more of that, right? And I would say probably a key insight today too that maybe you can pick up is we paid a guy from Accenture. And Accenture, basically, I think they made $3 billion this year from generative AI. And he alone sold about, let's just say, like, you know, $50 million in AI contracts, right? And this year alone, which is a lot of money. And he's just saying, look, you know, it's the demand is kind of— there's demand for the AI stuff, but it's tempered, right? And what we learned from him is basically that a lot of these companies, the way they're selling things, are They're augmenting other companies, right? And what that means is, let's say Coca-Cola hires Accenture, and Accenture just says, okay, we'll augment your staff. You can take some of our engineers, you can take some of our strategists, and we'll then, you know, kind of inject them into your company, and then we'll figure out strategy from there, right? And that to me seems pretty inefficient. What I would rather do instead is, and this reinforced my thinking around this, is that How do we build? How do we build products and then customize them for every single client? Right. That to me seems a lot more scalable. Let's say you build a pretty strong base level chatbot, and then based on the data that each client has, each each client has unique data, right? Then you can come up with a unique chatbot solving unique problems there. Or he kind of talked about you know building a central nervous system, right? One example here is that. With AI, like with an e-commerce company, inventory management is a huge pain in the butt. If you can use AI to solve that, that would be great, right? Because a lot of people just use spreadsheets nowadays. Okay, so we got this guy from Accenture. So we found a bunch of people from Accenture, and I basically just said, look, I'll pay you $500 for an hour of your time, or it could be $250, however senior they are. And if they're willing to take the call, you take an hour of their time and you just ask them a bunch of questions. You pepper them, right? Because you're trying to understand how people do things. And that will help fast forward you because I also asked him during the call and I'll give you some of the questions. So, you know, what are the key things that you're selling right now? What are some objections that you're seeing? And, you know, he's selling things around generative AI, responsible AI. I didn't know that was a thing, right? And I mean, I knew that was a thing, but I didn't know that you can, you can sell that. And so you start to, you know, kind of peel the onion here. It's like, okay, well, you're selling these things. Okay, what objections are you facing? How are you pricing this? You know, what are your conversion rates, right? You know, what would you do if you were CEO of the company? Like, what are things that are being missed right now, right? And what would you do around generative AI if you were the CEO? And again, you get to learn perspectives. And one of my favorite questions here is that towards the end of this, I ask— I say, hey, who else should we be talking to about this stuff? And you said, you know, go ahead and email me and I'll tell you. But like, you know, You should be asking, if you're talking to someone you found like you, that you've got some value from this person, you should be asking, hey, who else should I be talking to, right? Or if you're recruiting someone, if you know someone that's talented, hey, who do you know that can do this, right? And usually they'll name their best person, 'cause they don't wanna look like a fool. And so, that's what I would say. We also had, we had Elizabeth from my team fly over, Brendan fly over from Washington, D.C., Elizabeth from Dallas, and then we had dinner. with the 5 of us tonight, and we're doing our annual planning tomorrow. And those are always good. We spend the entire day doing it. And Sean asked me a good question, Sean, my CTO, and he said, he said, so what are you trying to get out of it tomorrow? I was like, you know, it's the same thing I'm always trying to get from these. It's making sure that we all feel aligned and making sure that we feel good about what we're trying to hit in terms of next steps, in terms of really next year, but also we plan in terms of the next 3 years or so. And I'm excited for it. I think, you know, what I've been saying constantly to the team is that this is the strongest team that we've had, and it's only gonna get stronger over time. As long as we don't rest on our laurels when it comes to talent, as long as we hold each other accountable, as long as we stay patient, as long as we stay focused, as long as we stay engaged, it's gonna be very hard to stop us, right? As long as we just keep going. And I've got the energy for it. I'm excited to do it. And I'm excited to do it on my own terms too. That's what I would say. It's pretty— it's refreshing to know that there isn't a lot of weight. There's a lot of weight on my shoulders, I would say, maybe 3 years ago or so. I feel like a lot of that weight has been shedded, and the new weight that I'm carrying now feels like it's productive weight for the long term. So just keep in mind that if you're going to build anything, let's say you're starting a business right now, It might take you 3 years to get going. Not 1 year, not 2 years, but 3 years. But if you want to see something really good going, maybe it'll take you 10 years, like a decade to get there, right? But if you want to see yourself build something really generational, the thing I've seen time and time again, and I'll probably continue to repeat this throughout the series, is it takes not 20 years, but 30+ years to get there. I was listening to something about this railroad tycoon named James J. Hill, and this guy was a monster. He started in the railroad business at age 40, and he was already a monster before that, and monster in like a super entrepreneur. And he sold all his businesses, divested, and he didn't know anything about the railroad industry, but he bet all his chips on it. And he was maniacal about the details, the focus, he was very involved, and became one of the richest men in the world. And, you know, the late Charlie Munger and Warren Buffett, they would refer back to James J. Hill as one of the best operators, right? This guy would lay railroad tracks, in the Rocky Mountains when it was very treacherous and very hard to recruit people, right? And just goes to show you that, you know, you can hate people like this, or you can learn from people like this, right? And the canonical example today, I guess, would be Elon Musk, right? You can, you could hate him, or you can look at him and be like, okay, he works so hard, he builds so many things, he's able to do so many things. Like, how is he able to do those things, right? I want to learn how to do those things. Everyone has their, their good sides and their downsides, but You know, how can you learn from the good sides? And I think everyone has a downside, but I think you can also learn something from everyone, right? I don't care who it is, I think you can learn something from everyone. So, that's what I would say. And yeah, tomorrow we've got the entire day planning out things, and it's gonna be fun. And this week, I mean, it's been heavy, but it's been fun. Time flies really quickly when you're having fun. So, make sure that if you're gonna work on anything, make sure that you're having fun.

Thank you.

All right, so I wanted to take a second to tell you about my ad agency, Single Grain. We're a performance digital marketing agency, and we focus primarily on working with B2B companies and e-commerce. So performance marketing, that's SEO, that's paid media, that's CRO, that's ad creative. And there are a whole host of other things that we're doing with AI that's really cool. You can go to singlegrain.com to learn more. Again, that's singlegrain.com to learn more, and we'll see you on the other side.

All right, it is December 5th, Thursday. And we are about to do an all-hands, and I'm going to give you a brief overview of how all the all-hands stuff looks. And we have Maya joining us.

Hey.

Maya joining us. First and foremost, we have healthy snacks here. Why do we have healthy snacks? Because if you're fat, it's your fault 99% of the time. Except we have cake over here. We have matcha cake. And then we have healthy snacks over here. And then what else do we have? We are giving Brendan these value-based pricing books over here. This book costs $73, and then this book over here costs $300. Why? Because they priced it on value.

Whoa.

And last but not least, we have These notepads and Sharpies over here, which Maya, you're taking— you're the note-taker today. So we're gonna be taking a lot of notes with these.

And then aside from that, very important, there's an app here on my iPad called P-Clock, and this manages the time. So people like to talk, everybody likes to talk, everybody likes to hear themselves talk. The problem with it is nobody knows how to manage their time. So you can see here, I can set this for 5 minutes, and then you hit start, and then it starts going, and then it turns red when it's time to stop talking.

We would do this and then it just goes into the ether. A lot of things we do, it's one of those— this would be a half-built bridge.

Yeah.

So we do, oh yeah, that feels so good, here's a dopamine hit, and then we just go on with our day, right? I feel like someone needs to check and say, hey, oh, here's what we talked about. Like, do we want to go against it? Like, do we really? And so yeah, there needs to be like a process watcher.

That's to me the most actionable thing about this. All right, so to close out today, we did a quarterly planning with the leadership team at Single Grain, and there's a lot to talk through today. There's an exercise that we do that we do these annual plannings. It's a very helpful one. It's called Start, Stop, Keep. Basically, you look at the things that you want to stop doing at your organization. You look at the things you want to start doing. And you look at the things that you want to keep doing. And this is usually a helpful postmortem exercise. And I would encourage you to look at the things that you should stop first, because oftentimes we think about the things that we should start more of. But it's the things that you stop that get you more focused, and it's more powerful. Because it's also easier to stop something than it is to start something, right?

Yeah.

It keeps you more focused at the end of the day. And so what I would say is the mistakes that we made in the past when we're doing this, and I have this pulled up over here, our start, stop, keep, is that we often would have way more starts than stops. And that's a mistake, right? Because if you're constantly adding new things, how are you supposed to focus? How are you supposed to do the right thing for your company? And, um, I would say this is the first time maybe ever that we have more stops than starts. So we have 14 stops here. So we want to stop doing 14 things and we want to start doing about 11 things. Right. And we want to keep doing about 8 things. And so just to give you an example of how this, this works for us. So some of the things that we want to stop, we want to stop overspending, right? We want to stop half-built bridges. And what that means is we want to stop starting a bunch of projects and getting them half-built and not finishing them off, right? So that's really important because that's, that's more of a focus exercise as well. And we want to stop trusting but not verifying. So, you know, I like to think that we're a pretty trusting organization, but you also have to verify at the same time. If you're not verifying that the things that people are saying that are going to get done, that they're not getting done, then that's ultimately on you at the end of the day, right? And I would also say a couple of things over here. Not telling the truth about departures. That's another one that's interesting, right? So when we decide to let someone go, not saying, oh, it was a mutually decided upon thing. It's more so to say, hey, if we had to let this person go for cause, here's the reason for it, just to reinforce the fact that you're living your core values and your mission as a company. And you're not going to accept— you're not going to let the talent bar get lower, right? And that's something that— Is is really important. So on the keep side, just to give you a couple examples of of how this works, you know we we're going to keep talking to customers. That's really important because we're in a customer service business, right? Client services business. We are going to keep my my update video. So I send an update video to the team every Friday or so, about five minutes, kind of updating on how am I thinking about things, how are we trending towards the three-year target, things that are happening, my things that are happening from a macro standpoint. My team actually said they they want me to They want to hear me talk more about that, like, oh, if this president wins, what's going to happen over here? If Bitcoin goes up, what's going to happen to the crypto industry, right? We want to keep our culture of innovation and improvement. We want to keep our high talent threshold. We want to keep our strong people, right? And that's what I would say. Those are a couple of things. We also want to do things manually before automating them too, right? The mistake with a lot of people is— and we've made this mistake many times— do to me is trying to automate things before we've truly figured it out. So you got the start— or sorry, you got the stop, you got the keep, and then now we're moving to the start.

LinkedIn ads are great, but let me give you the bad news first.

The bad news is that you can't personalize the ads and you can't scale up the ads as quickly. The good news is if you're in a B2B space, you're doing account-based marketing, we have a solution for you called Karrot. That's K-A-R-R-O-T. And the good news is that you can create a lot of these campaigns with the click of a button. You can personalize the ads. And there's a whole host of new things that are coming.

If you want to get on the waitlist, just go to carrot.ai.

Again, it's carrot.ai. And we'll see you on the other side. And on the start-based side, I'll just give you one that's interesting, and then we can move on from this. But charging value-based fees, right? A lot of agencies like to charge kind of the cookie-cutter retainers. And for us, it's about pricing on value, right? I'll give you an example here. So for Carrot, our SaaS app, our LinkedIn account-based marketing tool, this week I've been having a lot of calls. And I've been asking people about, hey, what's your annual contract value? And a lot of people will say, You know, it's 6 figures to 7 figures or so. And so if that's the case, even if we help them get one customer, it pays for the value of the tool, right? And that's how we look at it. It's not about all the features in the world. It's about, hey, how much value are we adding? And you're paying based on that value, right? And, you know, we've learned to price more on that and go more upmarket, I would say, with the product, right? It's still very much, I would say, in kind of earlier stage form. But the feedback that we're getting, the speed in which we're iterating, It's been really exciting. And what's exciting to me is, you know, I look at today, I look at our lead list for today for the number of waitlist signups for Carrot. If you just go to carrot.ai, you'll learn more about it. But I have to, I think we probably got, this looks like, man, this has to be like 80 leads today or so, something like that. It's kind of insane. And there's a lot of agencies in here, but there's a lot of enterprise companies in here as well, right? Even publicly traded companies, there's a password security company that's publicly traded here. There are some companies I've seen that have a strong LinkedIn presence, I should say. And then there's one called Clay. Clay is like a sales enablement tool. And there's some big agencies in here as well with thousands of employees. And it's exciting. I think I mentioned this this week, but it's exciting when you have a product or a service that pulls, that pulls you in instead of you having to push, right? Whenever something's pushing you or something's pulling you and you feel like you're surfing a wave, that is— you have a signal. That's a signal for you to push and double down, right? And so I'm excited to see what will happen in 2025. You know, this is, again, it's a huge signal to us that the way we planned this meeting. Largely, a lot of people said it exceeded expectations, but there's still some work to be done in terms of talent that we need to hire. But I'm very optimistic about where things will go in 2025. We've been very patient. You know, we've taken a licking in the last few years leading up to this. And it's exciting. I mean, this is— it's kind of validating to me to know that I continue to bet in the company. I continue to bet in the people, continue to bet on myself. And largely, it's panned out. Sometimes what I would say is, you might bet on yourself, and it might take some time for it to manifest. And you just keep putting one foot in front of the other, and that's what matters ultimately. A lot of people give up too quickly. And I think if it's one thing that I have that I think is really necessary in all entrepreneurs is that you have—

Patience.

unreasonable resilience, and you just keep going, 'cause most reasonable people would give up, and you have to be unreasonable there. So, that's what I'd say for today. I had a great time with the team. We flew a couple people in, we had Asian food the last 2 days or so, and they're flying back out tomorrow, so we always like to do these towards the end of the year, so, just to get people together as well, and get that face time. So, that being said, hope you all have a good rest of your day, and catch you later. Alright, so, here's the deal. I hope you enjoyed this vlog episode. This is called Founder Story. And if you want me to continue to post these vlogs to this channel, type in a comment, say this channel, or if you want it to move over to the new channel, type in new channel, right? That way I can know whether we should just separate it or just continue to serve it here, right? That's all that needs to happen. And we'll see you later.

Bye.