Cyberstarts: Inverting the idea stage

Well, Rob, welcome back, man. How you doing?

Doing well. Doing well. New background, new me.

That's right. You, uh, you either took a liking to redwoods or you are, uh, traveling at the moment. What's going on?

I am in Utah, uh, out here for a couple events and stuff. So I'm in a hotel. They just like let me use this random office in the hotel. I apparently just walk up and say, do you have an office space? I need to do an interview. I'm like, oh yes, sir. But the downside is that the room is like 85 degrees. It's just blasting heat in here. I might, I might pass out during this conversation.

And afterwards you can just go straight into your hot yoga routine that you, you always do following our recordings. Exactly. I, it was a, it was a smart move getting out of New Hampshire at the, at the moment. You know, did a little family traveling last week to get away from apparently just a terrible winter storm. So congrats to you.

Yeah. Yeah. It was like we were, we were in Florida to, to, to visit some family and, you know, it was like 50 degrees in Florida and everyone down there was like, oh, this is the worst thing ever. And we look, we look at New Hanford and it's like negative 4 degrees.

I'm like, I think I'll take it. We're gonna, we're gonna be okay. Well, hey, I'm pumped about today. Today's Uh, I, I, today's, uh, uh, Substack words are, it's a good, it's gonna be a good episode for anybody that's curious. Uh, uh, today's Substack is called Inverting the Idea Stage, uh, Cyberstarts and, uh, Building Demand First. Cyberstarts is a, uh, is a VC firm that we'll talk about here in a little bit. Um, it, this is based on a, uh, is, is this primarily based on the Invest Like the Best, uh, conversation that you heard or was this, where did this, where did this one come from?

Yeah, so I have some connections into CyberStarts. So I've known about them for a while. I've kind of had their model in the back of my mind. And then I was just talking to some entrepreneurs who are in the cybersecurity space who are building this way. And I was like, oh, this is, this is super interesting. Like you're building the way that I kind of like talk and think and, and like, where, where does that come from? It's like, well, it's partly your work and it's also partly like, have you heard of CyberStarts? Their model is like very, very similar to yours and unlike you just some random idiot online. They have, right? Like they're behind Wiz, which exited to Google for $32 billion and is like the fastest, one of the fastest growing companies in history. And they're behind a bunch of other super successful companies. And so I was like, oh cool, well maybe it's time to like dig deeper into their model. And I'd listened to the podcast a while ago about Invest Like the Best. 'Cause our good friend is a huge, he just sends every podcast to of Patrick O'Shaughnessy to us. Like, but, but yeah, so I just like dug back into it and I was like, okay, cool. Like now that kind of the demand and pull framework has evolved and kind of gotten, I think, more, more structured. It was kind of, it was kind of, you know, before I was just talking about demand kind of generally pull made it very specific. It now seems to fit quite well, uh, like, and like in very specific ways to what I've been talking about. And it's kind of nice to, to see that somebody has been wildly successful with a ridiculous hit rate, uh, building this way.

Yeah. And let's, um, let's set the stage there a little bit. Like when you say wildly successful, it's actually an understatement of what, um, so the, the founder, um, and one of the, I think he said he has 4 partners. Um, his name is Gili Ranan. Um, so basically the background on CyberStarts is that they exclu— they invest exclusively in cybersecurity, uh, startups. Their first fund, uh, in 3 years, they started with $50 million, uh, went to $2 billion with their— with 9 companies. And I think all 9 hit, or it's like something insane like that. Um, including Wiz, which was acquired by Google for more than $30 billion. Um, I think Fireblocks was in their first one, or maybe in their second fund. That one was like $8 billion. Uh, a bunch of others that sell like casual $250 million exits and valuations and stuff like that. They're just, it's insane. Like there's something really incredible here. And basically what we're going to do today is look at the interview that the founder, Gilly, gave and then also compare it, like, compare it, like what is going on here? What are the connections? Where are there, there's some differences in his methodologies and your methodologies, and we're going to get into those as well. Um, but maybe before we get into this, um, who is, who is this one helpful, most helpful for? Who, what, you know, what, what listener?

Yeah. So I think last week we talked about generational companies and how generational companies were built. And that's a, that's a, this is a kind of recurring theme that I'm coming back to, which is that, um, uh, like, how do you build an awesome company? Like just a massive fast-growing company. And, um, I just like exploring this, like, why do startups really take off? It's not about just kind of like getting to $10K MRR. It's about like, how do we build something? How do we get from zero to like something that is really, really big and fast-growing? Because I don't think any, like, I think some people in their minds are like, yeah, I'd rather build a lifestyle company because it's Right. Like for a variety of reasons, I actually think it's probably easier. We'll get into this to build a really fast-growing company than it is to build kind of this, a small lifestyle business. And so, yeah, I don't know. It's just an interesting topic. So I think most founders are in the mindset. I, this is basically for, for any kind of founder. It's whether you have committed, like, I want to build a massive company, which is a lot of the startups that I talk to, or it's like, for the founder who's, you know, worried about, oh, am I going to build something small? I don't know if I want to raise a bunch of venture. I don't know how, right? Like, it's, it's kind of for, for anyone in that, in, in that space.

That's, that's very interesting. We're going to get into— you write some very interesting things that I've, I've highlighted for us to get to around, uh, velocity begetting velocity, um, and about that point you just made. Um, but why don't we, why don't we start with, um, how CyberStarts approaches, uh, kind of like incubating their, their investment portfolio. Um, there's, I'm gonna, I'm gonna run through this real quick, Rob. What I want you to do is give us your interpretation on it. Um, and so the, they call it the Sunrise Program. Um, the first, first step is invest in founders who have overcome adversities, specifically frequently pre-idea founders. Like they're, they are not, uh, they're not looking at what is the market, they're not looking at a proprietary technology, they're literally just like looking for founders who they think are gonna like stick with it when it gets tough and who they think have talent. The second one is they identify the problem that they want to go after using a network of chief information technology, excuse me, CISOs, chief information security officers. Then they validate the idea by selling to some subset of those CISOs. And then they build and launch. They start building at that point. They're not bringing a product to them. So Rob, why don't you just like jump in? When you were, you know, first exposed to this or like now thinking about the way that they run the Sunrise program, like what resonates? Like what are your reactions to it?

Yeah, I mean, I think it's like basically exactly what we've been talking about. It's sell, then build, find demand, sell, then build. That's exactly what they are doing. And they've just come up with a basic— in my mind, it's a way to speedrun the physics of startups, the case, like building the case study, building the factory. And so the thing that is most important here is that they find very intense demand that buyers have, and they have a way to do that. They have a network of CISOs. That will talk to their founders and basically tell them, here's what I'm trying to accomplish, but I'm blocked because my existing options aren't good enough. The founders take that, and it's a little bit more nuanced than that, but founders basically take that, that's pull. Here's the pull that I have, that I am from a buyer who can make a decision saying, this is my top thing that I am blocked trying to accomplish. Take that. Form it into a, like, hey, here's a sketch of what supply would look like, what our product would look like. Do you wanna buy this? Essentially. And, and the, and like, that's how all of these businesses have come together.

Yeah. And you know, one thing that I really enjoyed from this interview was him talking about why he does it this way now. Um, and he talks, he talks about his startup. So he's, uh, you know, I think he's a two-time founder before he went to Sequoia and then, uh, you know, started his own fund. But, uh, I don't know if it's literally CAPTCHA. I couldn't tell that, but they, uh, his first startup created CAPTCHA, like the validation, like how do we know that it's a human being and not a bot that's on the, uh, on the other side of the webpage or the form or whatever is being filled out. Um, and this is how, this is how he describes it in the, uh, in the interview. So we built the first CAPTCHA and we tried as hard as we could, but we couldn't find a business for the technology. And this is, this is really cool. Starting with the technology and then searching for who has a problem that the technology solves is the wrong order. The process should be completely reversed. We should, we should first look at what the important pain points in a market are, identify the customers who are willing to spend money on solving that problem, and then build a solution for them. It's like that if, if I, if we just like flip the offers like you could, those could have been like your— where y'all, y'all have developed these like converging ideas. At this point.

Yeah, it's cool. It's really, really cool to see someone who has had so much success talking about that. I mean, I'm curious, I'm curious about your perspective. You are listening to this. You texted me last night like, this podcast is awesome. This business is awesome. What are your impressions of this after, you know, being forced to sit here on podcast with me for a year now? Like, What was going through your mind? What was your takeaway?

Um, my takeaway here was like, okay, this is a person that's willing to think differently about the, the system that he's operating in. Um, and, uh, among the first things that jumped out was the frustration that, uh, uh, he discussed with how VC operates in general. Um, he talks about it being performative, um, about like requiring a, you know, founders to jump through hoops basically to like predict a direction of a market that they don't actually know to justify things based on size that is actually like in 2 weeks, they're go— it's going to have totally changed where they're going. And he was basically like, yeah, that is nonsense. And it's not, it's, it's not worth the founder's time. And importantly, from his perspective as an investor, it's not predictive of how these companies are going to to perform, which, you know, if anybody that's like gone through, I don't know, like the business school class on VCs or has worked in VCs and has like seen the model of like nothing works and then you, you hit it big, it just kind of seems lucky and it's like, okay, why, why is that the case? He took that one step farther, which is not just like, I have to assume that this industry works that way, but there's got to be a better way of doing this, which is, you know, probably a lesson from his CAPTCHA thing, like It doesn't work doing it the current way, flip it and let's see if, if that approach works.

Yeah. And clearly it has. That's actually really, that reminds me, I've, uh, in the, in the book, I talk about having conversations with two VCs about like, how do, like, how do you know if a startup is going to be big? Right. And the first VC, uh, just say a Boston-based VC walked me through in detail. How he assessed the potential market size for a company, an idea at the pre-seed or seed stage. Right. And it was just, you know, it was like MBA logic, right? It's kind of, you know, spreadsheets. How does it get to a million, $100 million ARR, like in, in 5 to 10 years. Right. And that's, that's the math he's doing in his head. Um, I talked to another VC who's, uh, you know, this like old crotchety computer nerd who has a bunch of, billion to $10 billion companies under his belt. And he was like, dude, I don't know. I have no idea. If they're smart, they figure it out. I just bet on them being smart on the founding team. And, and that was shocking to me. I also, um, one of the VCs who invested in me, I was asking him like, what, what do you need to demonstrate to get to Series A? And he's like, I don't know. You just have to show that you've figured something out. Right. And there's this like, there's this kind of, I think there's like this evolutionary track that, that VCs can go along or investors or just people in general can go along who are in this specific game where it's like, you know, stage 1 is, it is like MBA logic, right? Which just sounds right, seems bulletproof and is totally wrong. Then you get into the like nihilist stage where, where it's just, You know, I don't know, maybe it's magic. And then if like some people get to the stage where it's like, oh, wait a second, the prop— what companies figure out when they go from not working to working actually looks like this. So what if we just like designed around that? And that seems like what Cyberstarts has done. And that's why I think it's just so freaking awesome. And I wish Right? Like I, I wish I was actually considering based on this, like, oh, could I build a fund and do something similar like that? Like that's how compelling this was to me. I'm not going to do that because that, that's just not, that's not what I'm here for. But, but it's, it's really like, okay, they have, they have developed a something that's really unique, like IP about how to, to find demand and build a fast-growing company out of it. The way to do that at the early stage. Yeah. And they've developed this network of buyers. Combine those two and you've just, you've got a, a something that at least for a while seems to be a hit machine.

Yeah. And the, um, I wanna get into that, like the elements that were jumping out to you as like, I think these are the, the critical ones, but you know, thinking about the difference between not just the NBA,, and the kind of nihilist, um, uh, investor that you said, but between the nihilist investor and what they've built here is like they're, they're both investing in founding teams. However, the, what they've done at Cyberstarts is say like, okay, we, we're gonna invest in the founder. However, we know how to put 'em on a rocket ship basically. Like we can build that rocket ship. I think there's some really cool lessons here, um, uh, about VCs that I'd, I'd be interested in your take on in a little bit. But let's, let's focus, uh, continue focusing a little bit more on demand. One thing that I— that was jumping out to me was the patience early on. And I've, you know, I've never— transparently, Rob, you have experience fundraising with VCs, so maybe you can, you can talk more about this. I can't. But basically the way that he talks about it is if you think about the typical startup, when they get money from VCs, they start to get pressure to build software, push forward, hire people. And my, my approach is almost the opposite. Sit, sit tight, don't get too excited. This, this is the part that really jumped out to me. This is your last chance to pick the right problem to go after. So let's make sure that we pick right. And then talking about after that, like he says, after, after you've picked the right problem, it's a standard software building exercise, but perfectly done because you start from the end and you work backward. It starts with the end in terms of value. What value the customer would like to produce and what, uh, and with what piece of software. Um, Rob, when you, when you hear this, like, uh, again, like reactions, things that are jumping out to you.

Yeah, man, we're just, we're just going to keep, keep in love on this. Like, so, so my, my sense here is that this is exactly how we should be building companies. It does not make sense to build companies the other way because the bottleneck to a business is demand. He, he taps around this in a different— what's the value we're trying to provide? We're, we're focused on the value we're trying to provide. He also talks about problems and pain points. He's— they're all the wrong words and he doesn't have the right words. And I just wanna give him the pull framework to be like, here's the right words. But what he's saying is you build demand or pull first. You figure out what these people are trying to accomplish and are blocked at accomplishing and don't even think about products. At that stage. But once you know what they are trying to accomplish but are blocked by, it makes everything standard. It generates everything downstream of it. It makes building the product pretty— it's like still hard, but it's standard. It is, it is not— there's not questions about who might want this and all. And when you have the question of who might want this, then your, your software building, your product building experience has like a bunch of infinite loops in it and it, it, and it just winds up being impossible. Once you know, hey, we're building for CISOs who are trying to see vulnerabilities across their different cloud computing providers, right? In one place and da da da da da, right? That's what they're trying to do. And their existing solutions do not work for that because they are these separate disparate systems, each one for each different cloud provider. Okay, cool. If you know that and you know that these CISOs, this is their top one, one of their top priorities, that, but it's the one that is top and blocked by their existing options, then it's just like, okay, cool. We're going to build the best possible way to get security insights from across multiple cloud providers in one place. And we're going to make Like the, the, the demand there makes the sales process obvious and you can make it aerodynamic based on that. It makes the product shape obvious. If you do it in the other direction where you start with the product idea, it does not make the customer obvious or the demand obvious. It actually makes it in— it gives you infinite potential directions to go in.

Yeah, let's, let's make that even more explicit. So you, you write more about this in the, in the post, which we'll link to. But we've here, we've seen that kind of Cyberstarts approach, which is it's patient, it's, you know, sometimes actively selling, sometimes understanding at least very, very close to the CISOs, to the, to the customer that they're going to be selling to. What is it like Uh, like, can you just, you write about this, why is it hard doing it in the other direction of starting with a product idea?

Yeah. So when you start with a product idea, you then have the question of who might want this product and that question, or like who might want something in the realm of this product, that question has infinite potential answers, all of which sound right, make logical sense. And so what you're doing here, I think of it as like you're fixing the product and the market, the customer is a variable. Mm-hmm. But there are infinite logical permutations of potential customers, what they could want, what messaging you could use. There in the, and, and all of them sound right, but very few of them will actually be someone's number one priority right now. So you're faced with infinite things that could possibly work, but finite that actually will work. And it's actually very unlikely that if you start with your product idea, that Any will be your buyer's number one priority right now to which they are blocked. Hmm. And so you're playing a losing game, a default losing game. And what Cyberstarts does, their approach does, what Sell Then Build generally does, is it, it eliminates that losing game. Because you don't start from a product and the infinite possibilities of which few, if any, will actually have pull. And you just start from pull and build from there.

Okay, Rob, let's, um, let's say that our listeners slash your co-host did that the wrong way to start and built, uh, you know, built a product first. What do you, uh, like, what do you do with that situation? Is it abandon the product, go back? Is it, you know, how do you, how do you handle that?

Yeah. So I've, so actually I've been working on a post for a while now. It's kind of getting to Divine Lever level of just consuming my entire existence about the logic of action in the early stage. How, like, what do you actually do given the fact that there are infinite possible things that could work, but actually very few, if any, will, will work in that stage. So I, I'll give you an example of this. Just, I'll, I'll anonymize it, talking to a startup and they spent years wandering around the wilderness trying to sell to a specific kind of medical provider. And they were selling the wrong thing. And they, at some point there, it just like wasn't really growing very fast, but they were involved. They could see the different parts of the business. And so they had, they knew that something that, that they just knew how this business worked. And in that they said, all right, let's just forget about our product for now, given what we know. About how this business works. What do we actually think? Where do we think there is actually demand or pull in this market? And they, they realized that, okay, it wasn't for, it wasn't for whatever they were building, some, some clinician workflow tool. It was for some admission tool into the clinic. And so once they, once they realized, okay, cool, let's just kind of scrap everything else. This seems to be the thing. They tested that out by pre-selling just with an idea, and then they went $0 to $3, $4 million ARR in a year off of that. And so it does often wind up being scrap. Stop holding so tightly to your product idea. What you're doing there is you're constraining the opportunity space on the pull side in a weird way, right? Where there are infinite possibilities, but within the possibility set, there might not actually be real pull. Yeah. And instead you're just kind of like letting that go and saying, instead of getting, just having an infinite possibility space, just making it even bigger, you're saying, no, no, no, let me, let me instead hold on pretty tightly to what do we know about customers right now? What do we, what do we see on the demand side right now? And given that, what should we test?

I like that. I like that a lot. Actually makes me think about how I can change some of my upcoming conversations with customers to be even less oriented to like current product as a founder who's had, you know, like some success. Like I've got, I have sales, like, you know, but it's not clear that there's this like rip the product out of your hands kind of like demand that is repeatable here. And so it's, I like the way that you frame that on loosen, loosen the grip on your product. Like let, you know, become more open to within your customer set that you're actually understanding pretty well right now. Like be open to what demand actually looks like, looks like for them. I'd like to talk a little bit about how, or see if you will have anything to add on how Cyberstarts facilitates discovery essentially, like, or early sales, you know, and they do it in two steps, which is like one is focused on, you know, problems like that basically their conversations with, uh, with CISOs. Um, and then the second one is after spending some number of months with, in a bunch of conversation with, um, who will eventually be the buyer, coming back to them and, and selling what you write as like a sketch, essentially. Like, if I, if we delivered this, would you, would you pay us for it? Um, what do you think about this as a discovery approach? What would you do differently? What would you do the same?

Yeah, I think, I think it's totally, I like the discovery approach. Essentially what they're doing is they're separating demand and supply. In the discovery process. So they'll do one meeting with CISOs, literally just focus on the demand side where it's, they talk about problems and pain points. I'll talk about demand and pull, but they, they ask a variety of questions to try to figure out what is there actually intense pull here? Let's forget about the product. Let's not even think about the product yet. And so they ask questions, I think like, Uh, they have some pretty creative ones, like which vendor do you hate the most right now? Right? Like, and which tells you there's, there's their existing option is not good enough. Right? LNL in the pull framework.

That's one. Oh, interesting.

Um, that's a way to get to that. Another one they say is like, if we have, if we're, if we, we will spend $100 million to solve something for you. What do you want that to be? What is worth us investing $100 million of R&D to solve for you, right? Which is basically a way of saying that's, that's P and U. What, what are you trying to accomplish on the demand side that is worth us spending $100 million on? Right. And these are all ways to just figure out, okay. Right. Like, and I assume as well, they're in these conversations, they're like very blunt.

I don't know if you've met Israelis, but, uh, I've, I've had my feelings hurt by a few Israelis in the course of my life.

So yeah. Yeah. They're wonderful to sell to. It's just, you just get very good feedback. Them and Germans are just amazing. Um, uh, and so what, but what they're doing in a very blunt conversation is they're not coming in saying you should want this. You should want to solve this. They're not pushing at all. They're actually probably leaning back and skeptical and like, prove to me that you actually have pull here. Why aren't your existing options good enough? Why can't you just do this with da da da? I'm gonna spend $100 million on this. You better prove to me that you, that this is what pull is. And they probably get a bunch of different, different things. Like I just, in my mind, I don't know, I imagine a spreadsheet with a bunch of different conversations and which they're trying to, to find the thing that is repeatable across these. Say, okay, actually here's what it is. Here's what pull actually is. If this is what pull actually is for these people, what should supply be? And then that's the second conversation where to, to know if, if pull is real, you can't just do interviews. You actually have to try to sell something. You have to put something in front of them and see if, if your pull hypothesis is right and you've designed supply right, they should rip it out of your hands. Mm. And that can happen even in cybersecurity before you have written a single line of code.

Yeah. Um, what is that, uh, with startups that you've worked with, what does it, uh, look like? What, what is it that you are bringing them? Can you, can you help us, you know, wrap our, our brains around that? And then what does it look and feel like when they're ripping it out of your hands? Like, Tactical.

Yeah. So this, this is actually, I've, I, and so one thing that I have been playing around with is I've been looking at all the startups that I've kind of worked with and there are many that have made it to a million ARR. But what I'm doing is I'm comparing and contrasting the ones that made it to a million ARR and the ones that just blew past that, like grew super fast. And the, like, what's the difference between these? Some, some are still kind of, slogging it out. They have to be very good at execution. It just still feels like a slog. Others have grown insanely fast. And what it seems to come down to is how strong the pull is for individual customers. And so what you do in conversations like this and what you're, uh, what you do and then what you're looking for, what you do is you say, hey, here's the pull that we talked about last time. You mentioned that you were trying to see vulnerabilities across your different cloud computing providers, but your existing options only gave you snapshots into each and they weren't the whole view of what you wanted to see. Is that right? And the person on the other line should say, yeah, that's exactly what I've been trying to do. I still haven't figured it out. What do you have? For me. Then you just have a slide usually, or maybe now nowadays you could maybe do a vibe-coded UI. I actually don't recommend that quite as much. What you want is to show a slide that gives the contours of the solution, the contours on the supply side. And what this slide would say is it kind of starts top-down saying, we are a, we offer a, or we're building a tool that enables you to see any security vulnerability across any cloud provider, right? And, and what that's doing is that is a, you know, here is your pull, we offer something that perfectly fits pull, unlike your other options. And it was a, you know, it's, it's 10 minutes to set up, it's da da da, like here are the components of it. And then you just kind of pause and say, Is that what you are looking for? And what you— and so what you do is you describe the supply at a relatively high level, a level that fits the demand, right? Like if demand was, I need to see security vulnerabilities in multiple clouds, is that we have the— we're building the only way to see security vulnerabilities in multiple clouds. You don't say something like, we're an agentic workflow platform for security professionals that does Da da da da da da da da, right? Like that doesn't, that doesn't fit the level that of, of pull that you got from that.

And that, and that, that language, this is something we've talked about in the past. Uh, the way that you phrased it was it's only accessible from a deep understanding of what the actual demand is. Like those, uh, words, uh, ex post, like seem obvious and pre are compl— like you, you just have no idea what they are, but there's certain words that will resonate like very deeply, very fast.

Yeah. Totally inaccessible to you until you understand demand. And then once you understand demand, they are obvious and intuitive. It's the craziest thing.

Um, and it's, and it's like, it actually kind of makes you feel insecure because it's like, now everybody knows this, but it, it's actually like everybody else is kind of on the other side of that. Uh, like they, they haven't found it yet frequently.

Some might have. Yeah, totally. And so, and so, okay, what are you looking for at this point? At this point, you are st— you were looking for, not them leaning back and saying, yeah, that sounds pretty good. What you're looking for is them say, them leaning forward and being like, yeah, this is my number one thing right now. How do we get started? The difference, basically the difference in their lean is the difference, is the, is the difference in why some startups grow super fast and others don't. That is the thing I've been able to find. I, I'm desperately looking for a different way to describe this, but that's essentially it. It's, it's a, you know, it's about the intensity of their pull and the like fit on the supply side that causes them to lean in and try to buy it right now.

Let, let, let, I'm going to read on that note from something that you write in your blog. You say, And this is talking about their particular approach. One, you talk about two things actually. I want your response, your engagement on one is the choice of the customer. That's— and as a result, the choice of the network that they built. And then the second one is building more deeply on the demand or the strength of that demand, the intensity of it. You say large deals get closed in weeks if it's a CXO's top thing. Deal velocity obeys a power law. The number one priority gets closed in weeks. Anything else takes 12 to 18 months. Uh, give us color on where, where you've seen this or like where that idea came from.

Yeah. Oh, I just, I've just, I've actually seen it in practice a bunch of times. So, um, what you'll typically hear is like an enterprise, oh, an enterprise deal takes 12 to 18 months to come together. And that is both true and false. It is true in that if you look at the average enterprise deal cycle in a CRM, it's 12 to 18 months. It is false because it is, uh, uh, there are, it obeys a weird, uh, distribution curve. So in the instances where something is a C-level person's number one priority, a deal gets done in weeks or maybe like a month and a half. Everything else, you know, if you're, if you're focused on a director's number one priority, but they have to go through a purchasing cycle, right? They just can't make something happen extremely fast in most cases. And so it's going to take 12 to 18 months. Or if it's a C-level person's number 2 or 3 priority, right? It's not their top thing right now. It's going to get prioritized when it's able to get prioritized. They're not going to put their entire force of being behind getting it done right now. And so would have, again, another startup I know, they went zero to, uh, this is the one we talked about a couple of weeks ago. They went zero to $6 million ARR in like 8 weeks because they found, they got, uh, they basically did the exact same playbook as Cyberstars did. They got an advisor to introduce them to CXOs in the medical space, figured out what those people's pull was, what was their number one priority. And their deals happen insanely fast as a result of that, where anybody else, if you come in just pitching your product versus pitching to the top priority that is blocked and it's shared across all these different, like, clinics, One of those gets, grows insanely fast because it is the person's number one priority. The other, you have to convince a bunch of people. You, and, and it's basically all your effort in convincing and educating is an elegant way of just staying top of mind until this is actually prioritized.

Oh, that's an interesting, that's a super interesting way of putting it, Ron. Uh, just staying, staying top of mind.

Yeah.

So that, that leads me to the question, like not not everybody sells to a CXO. I like— there's, there's other buyers in an organization. Does this just mean like everybody should aspire to sell to CXOs? Does it mean that there's different products or like a different approach that you should be taking if you're selling to a CXO versus not? Is it about the deal size or the product cost? Like, how should we think about the choice of customer here?

Yeah. So I think let's look at CyberStarts as one specific playbook. For kind of like enterprise software sold to CXOs. There are other playbooks and you can take elements of the CyberStarts playbook and apply them in other domains. If you're selling to a director, if you're selling to a small midsize business, right? Like in all of these cases, you can take elements, the elements to take are Demand first and basically sell to a top priority, start with demand and let supply be variable. And if it is a strong enough priority, that's going to cause, that's what's going to cause you to grow super fast. Nothing else, right? Like other things do are a rounding error there.

Hmm. Yeah. Would be interesting to explore the what's the what is the equivalent playbook for selling to SMBs or something like that. One thing you write toward the end of this, end of this post is that you've seen advisory networks similar to the one that they've talked about work similar to the one that you, you know, that an equivalent of an advisory network is what you talked about with the medtech, you know, startup. I think it was medtech. Anyways, that was getting introductions from somebody that was well-connected in the industry. When does that as a tactic for discovery and early sales work? And when is that like not necessarily the right, uh, advisory network, like the right fit?

Yeah. So here's, here's when I've seen it not work. I've not, I've seen it not work when it's into corporate for like mid-level directors of HR. And so, and like, I don't, again, I don't know exactly why it doesn't work in that case, but my hunch is that those are people who aren't, they don't actually have much pull ever.

Yeah.

And if they do, they don't, they're not really empowered to buy things.

Sorry, I was laughing because I was thinking about that exact thing. Like, there's a certain type of person that I don't, that I have to work with for our media, but that I don't even try to sell to anymore because I don't actually think they're held accountable to anything or they're, they're, and as a result of that, they can, they can exist indefinitely without experiencing very strong demand. And I suspect it's, it's almost like in the org chart, it's like they're at the same level in their organization as this like other, other level that I end up interacting with. Um, but that, yeah, so it's when, when your, uh, when your customer is, or like, what would you do? Is, is it that nobody is selling into that level or what do you do if that's, you know?

No, it's like you can, you can sell into that level, but that level doesn't— so again, I'm not entirely sure. Let's, let's talk about the inverse here. What you're looking for is somebody who has intense pull. Who has, who often, or, you know, who has pull, who makes decisions and who can make things happen in the organization. Right. And so, and like one of the good reasons cybersecurity CISOs, it works super well is because they're also very well networked among each other. So once you get one signed up, they'll text their 3 CISO friends who should also sign up. Right. And there are, there, those are reasons why that. Sorry. Why, why? So those are reasons why that model works specifically well there. But if you think about the exact opposite case, it's people who don't really have much to do in their day job. Again, I'm not saying this is like directors of HR, but I'm just making the opposite case. They don't have a bunch to do. They don't have, they don't have to make anything happen. They're kind of set in their ways and if they want to make something happen, they probably can't anyway.

Yeah, that's super interesting. And so like even with SMBs, the owner or the, you know, they have equivalents. They don't have to go, they don't, there's not the same stigma around the bureaucracy that you go through with enterprise sales, but their ability to pull, their ability to make things happen is greater even like that in an enterprise environment that's operating in like, you know, legal frameworks and stuff. Rob, we're going to, we're going to run up against time here. One other thing I want your quick reaction to before we talk about takeaway, you know, additionally set the size for takeaways. You talk about velocity. Velocity begets velocity because deals move fast, the product gets implemented fast, the team gets feedback fast, and the product gets better fast. I think this is what you're referring to early in this conversation when you said it's easier in some ways to build like a super fast growing, uh, company than a lifestyle, like growing kind of like moderately fast, uh, company. Could you, could you talk more, or maybe it's that the problems are different. I don't know. Tell us more about what you, what you mean there.

Yeah. So, okay. When, remember like the physics of, of sales, the physics of startups. If you find very intense pull, what happens is customers rip the product out of your hands. They do most of the lifting to get the deal done because it's important to them, right? When they do a lot of the lifting and that repeats, it's less effort for you to grow. It is less effort for you to grow. Customers are doing more of the work and you are getting feedback because this is important to them. Right. And that is a, that's like a virtuous cycle that is all generated from the fact that customers have intense pull. These businesses often grow despite themselves. This is why Twitter was described as a clown car that ran into a goldmine. It's because they found such intense demands. That it didn't matter that they didn't ship a feature in 10 years or, you know, whatever, whatever the case is, right? They found such intense demand that they were, they're often able to grow despite themselves. On the other hand, when you're building something that is not a response to intense pull, you often might think it's safer. Oh, it's more niche. Oh, it's more this, but it's actually harder in a lot of very grinding ways because you have to push every step of the way. You have to convince people to meet with you. You're not this fast-growing hot company. You have to convince every person to meet with you. You have to then kind of try to convince them that they should prioritize this thing when it's like 3 or 4 on a director's stack. Right. And just think of how diff— and because of that, you often can like, If you're very good at sales, you can convince people to buy and then, but you still have to convince them to implement, convince them to get value out of it. It's just lifting all the way. Everything is on your back all the time and it's just constant pushing. And so that's my sense of why it's actually, yes, there are a ton of stresses in building a fast-growing company, especially one that needs to, that winds up raising a lot of VC. But there is nothing like the load of pushing a third priority at a mid— for a mid-level director who doesn't actually have to accomplish something. There's no kind of, right? Like you just, you look in the mirror and you're like, what am I doing with my life? I'm at 5K MRR and I've like broken my arms to get here.

Yeah, yeah, yeah, yeah. If, if Dante were writing the Inferno again, like, that would be like level 4 or something. Something like that is you have to go and you have to sell a product that, that people don't, don't really want or don't care about. Rob, we're, we're going to wrap here. Any immediate takeaways quickly to, to hit real fast for the listener?

I think it's just like, look, like listen to the podcast. I think the podcast that's linked in this is like a good listen. It's worth listening to and just replace pain points and problems and value with demand. And it will basically perfectly fit into what we've been talking about here. And you'll see then, okay, here's why Wiz took off. Here's why all of these companies, like here's a, here's a causal model. For why startups take off. And it looks very similar to what we've been talking to. And then, right, if you're in the stage, like, like one of the co-hosts, maybe two of the co-hosts here, uh, are in where you've kind of built something and you're like, I'm, I feel like I'm pushing. It's not, it's kind of working, but it's not quite. Often requires you to, to, to loosen your grip on the product a little bit. And say, let's just kind of forget about the product for a while. What actually is demand and where is it intense?

Yeah, that's— I, I actually feel my body like, uh, de-tensing at the moment thinking about, um, like that type of conversation. Um, anyways, I know you've got to jump for, uh, office hours with the founders that are, uh, uh, getting ready for PMF Camp, which, yeah, if somebody's listening to this on Friday or Saturday and they want to join, it's Uh, February 9th. Otherwise, we'll, we'll also have the link if you want to work with Rob. Um, and with that, uh, hopefully this was helpful for somebody, uh, and we'll catch everybody next week.

Later.