Latest / 1 to 100 / E49: How To Build An App That’s Worth Buying with Varun Kundra

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E49: How To Build An App That’s Worth Buying with Varun Kundra · 1 to 100

0:00
Can you start by giving us some background?
0:01
I mean, I think we're all pretty familiar, but just for, for
0:03
anybody listening, be helpful to, yeah, get, get a sense of
0:07
like how you got to where you are today.
0:09
And then I think there's a lot of specifics about that that I'd
0:11
love to ask questions about too. For sure.
0:13
Yeah, before. We jump in Boran.
0:15
I got to tell you I recently installed after sell on my store
0:20
and it's it goes. So we're in the Shopify Plus
0:23
free trial thing, the 60 day thing.
0:26
And we haven't seen like enough of an uptick, I think to like
0:30
upgrade, but I'm going to do it anyway because like we need to
0:34
customize checkout, we need all these things.
0:36
But the post purchase upsells have made me like 6th.
0:39
So thank you. I really appreciate.
0:41
It of course, man, happy to hear that.
0:44
And yeah, that's really, really our bread and butter after sale
0:47
because it's post purchased after after the sale.
0:51
And yeah, how we got started. So yeah, for everyone who
0:54
doesn't know, I'm I'm brilliant. I'm one of the Co founders of
0:56
after cell. We started the business about
0:59
five years ago and the goal really was just to to drive
1:05
Ansler revenue in in, in, in any way we could.
1:09
But you know, our focus initially was the thank you page
1:12
because that's what was possible with the Shopify AP is and then
1:15
later there's the one flag post purchase API that came out for
1:19
everyone, which has really been our core, like our core like
1:24
revenue driver for for clients. Wait, not the customized
1:27
checkout. The customized checkout is
1:30
actually even newer than our one click up sell feature That was
1:34
like, maybe I recall correctly like 2 1/2 three years ago, but
1:40
that that definitely helps. But the main thing is that post
1:43
purchase, you have a full page, right, that occurs right after
1:46
checkout, but before the order confirmation page.
1:50
So there's this like dopamine hit that a lot of people have
1:52
when they're checking out that then if you offer a relevant
1:56
product with, you know, some nice discount, great copy,
1:59
things like that, you can really convert well and you can convert
2:01
like higher AOV then you might with the placement like in the
2:05
cart or in the product page or other places.
2:07
So that's really where we see the most revenue per visit.
2:11
That's how we measure it do. You have any stats by the way on
2:14
like global take rate on that kind of stuff like across your
2:19
whole ecosystem, what, what percentage of people actually do
2:21
it and at what price? I'm so sorry.
2:25
Do you mean like what's the take rate on the offers for like
2:28
customers, like shoppers on these offers?
2:30
Yeah, I like supposed in, in that like interstitial between
2:33
the the checkout and the order confirmation page, like how many
2:38
million of those offers, how many people are actually taking
2:40
that and what's the what's like the the typical AOVA increase on
2:43
that? So we get this question all the
2:46
time and to be honest, it's like a difficult question to answer.
2:52
Or you can do an average of everything, but then you have to
2:54
account for like all the stores that like basically didn't set
2:57
it up at all or like did a very basic set up.
3:01
And then, you know, you have to account for like what what what
3:05
the what products they're selling as well, like what
3:07
categories, what verticals like it ranges dramatically.
3:10
You can imagine if like you know the upsell is like between 10
3:14
and 20 bucks versus like 50 to 100 bucks, you're going to have
3:18
dramatically different conversion rates, average AO BS
3:21
listed, things like that. What we tend to say is that a
3:25
well set up offer can convert usually between like 5 to 15%.
3:31
We off we've seen offers that convert like 30%.
3:34
Those are probably the best offers.
3:38
But yeah, I would say like if it's store is doing like, you
3:41
know, 8 to 12%, that's like really good.
3:44
And usually like it takes some time to get there.
3:46
Usually you have to iterate, you have to test, you know, you have
3:50
to you have to test like all the combination of factors there are
3:53
because you can you can manipulate a lot of things.
3:55
You can manipulate copy, of course, which is, you know,
3:58
unlimited variations. But there's also like discount
4:01
if you want to have like a timer, if you want to have a
4:03
progress bar or not, you know, is there free shipping or not?
4:09
How does the way outlook? There's lots of options.
4:13
Is there a typical AOV increase that you're suggesting that
4:17
people target like 10 percent, 20% like that?
4:20
Yeah, we say something like that, but yeah, again, like it
4:23
really depends how they're doing it.
4:24
You. Know what's funny for my store
4:26
Right now in our dashboards, our AOV is higher than our LTV.
4:30
Right now our AOV is like $500, our LTV is like 350 because our
4:36
AOV has sharply gone up and our LTV.
4:38
Hasn't. That's awesome.
4:40
That's cool. I'd love to hear that dude.
4:41
Jack, what do you think that's telling you about your product,
4:43
man? It's telling me that we should
4:47
have set up post purchase upsell a while ago because we didn't
4:49
even need Shopify plus trial to set up post purchase upsell,
4:53
right? Like when we signed up for the
4:55
Shopify plus trial, I think it's like 60 days or something.
4:58
The Rep told us, hey, you can go with after sell or you can go
5:00
with rebuy. And I signed up to both and I
5:02
was like rebuy. Oh, this doesn't feel good.
5:05
But like after sell is really nice.
5:07
Like the UI looks just like Shopify.
5:10
It's easy. I got everything done in like an
5:12
hour, right The way I I wanted to be.
5:15
Some people customize their check out and they go really
5:17
helpful leather and make the checkout really strange.
5:20
And I think that like part of the benefit of being on Shopify
5:23
is the recognizability of the checkout.
5:25
That familiarity let's people feel comfortable with making
5:29
that purchase. So I didn't want to remix it too
5:31
much, but like we're not seeing anything, dude.
5:33
We're not seeing any change on the checkout.
5:36
We've only seen performance increase in post purchase on
5:39
checkout version rates down because we have more traffic.
5:43
Our total revenue is slightly down.
5:46
Our. Discount code utilization.
5:48
So I'm using one of your widgets, right?
5:50
The text one that's like nice bright green to remind people
5:54
what the discount code is so they don't back out to go and
5:57
like find the discount code again, right?
6:00
So I thought maybe discount code utilization is up 80% versus 81%
6:05
basically hasn't changed. So I can't find like something
6:09
in that regard that is, you know, move the needle for us.
6:12
But I'm not executing while I set up in an hour and I let let
6:14
it go. But post purchase we made like
6:17
6K. I'll take a look afterwards,
6:19
like seriously, I love the sounding like the story or all
6:22
like I'll take a look and see what we can do.
6:25
Yeah. Wait for another question for
6:27
you, the Jack. I want to I want to do something
6:30
that I think could be fun for anybody who happens to listen to
6:33
this on a recurring basis before.
6:36
My question for you is what what led you to this?
6:39
And this is always my question when I talked to a founder in
6:42
like the ECOM SAS space. But why did you decide to build
6:46
an ECOM SAS like on all of the categories that you could have
6:50
built in? So my Co founder, he had a
6:53
couple of drop shipping stores and he got to like some decent
6:57
success. And so he had exposure to
7:01
e-commerce software and I went to Waterloo along with one of my
7:06
other Co founders. And so there was kind of this,
7:09
this overlap of of software and and e-commerce.
7:13
And so that's that was the primary reason from like just
7:16
how did it happen? I would say the other kind of
7:19
like more rational reason was that just that it felt like a, a
7:23
very good, like very good first business or first SAS business
7:28
to, to start in the sense of like there's lots of like
7:31
helpful infrastructure. Like if you think about it like
7:33
Shopify's built so much for developers, right?
7:35
There's really pretty good API docs.
7:39
There's like lots of billing, billing stuff that's already
7:42
been built out. And you can get distribution in
7:45
the beginning pretty quickly with the Shopify App Store.
7:47
So I think in that way it's, it's a very helpful, very
7:51
helpful support to have for your your first software business.
7:56
Did you think about that as you thought about like the, the
8:01
engagement with rocked like like how did, how did the engagement
8:05
with rocked come about? And as you thought about like,
8:10
hey, I want to my first business seems like I want to start it
8:14
here. Seems like it's a great place to
8:16
set up the business. And then rocked comes along.
8:19
You can tell us how the story actually happened, but like
8:21
something to the effect of Rocked comes along and you're
8:24
like, hey, given what I wanted to accomplish with this
8:28
business, this seems like the right outcome.
8:31
Help us understand how you thought about the outcome sets
8:35
and then, yeah, how you thought about the Rocked engagement and
8:39
then the acquisition? Yeah, yeah, yeah.
8:44
It's a pretty interesting story in a couple different ways.
8:48
So, yeah, maybe like if we go all the way back to how we first
8:51
heard about Rocked, we actually had, so we were in college and
8:56
we're building after. So like I mentioned and we we
9:00
had this like start up incubator accelerator type program.
9:04
It's called the year 0 labs like Waterloo offered.
9:08
And you know, we weren't like particularly looking to join one
9:11
or, or anything like that, but it seemed fine and it seemed
9:16
interesting. And they also like had like a
9:19
stipend as part of, as part of joining that they offered.
9:23
So we're like, why not, you know, like, let's let's do it.
9:27
And there is one guy who was kind of like a mentor to us in
9:32
that program who was like, Hey, have you guys heard of rocked?
9:35
And at the time we're like, no, that we've never have rocked.
9:39
He was like, this is like a way bigger version of you guys.
9:42
And we're like, wait, how have we not heard of this company?
9:45
And then and then yeah, like we got a sense that the idea that
9:53
we had grasped upon for for upsells post purchase first
9:59
party was great and it does really well.
10:03
But there's this whole like more enterprise world that was, was
10:07
really starting to do third party offers on the post
10:10
purchase page, which is what is Rock score business.
10:15
And so that was the first introduction and they kind of
10:19
like opened our eyes to it was possible.
10:22
And actually like we tried to build like our own version of
10:26
Rock that first. I wouldn't even call it that,
10:29
but it was like, it was like a test of like, can we also show
10:33
third party offers post purchase?
10:35
And so we only had one advertiser at the time, which
10:39
we, we got through the relationship with our, with our
10:43
mentor. So we were showing offers from
10:46
Capital One Shopping and as you might imagine, like if there's
10:51
only one advertiser when you're trying to go and get your
10:54
clients to adopt this, it was pretty difficult.
10:58
And so didn't really go anywhere.
11:01
That kind of the kind of thing we called it.
11:03
We called it the after sell network.
11:07
It didn't really go anywhere, but it was like a cool test.
11:11
And it was also like what a part of what we used to the kind of
11:18
to kind of join rocked in the sense of like we showed them
11:21
that we we actually tried this and showed promise.
11:24
And they actually had their own like Shopify business at the
11:27
time as well. So they they understood the
11:29
promise of it. But yeah, that was kind of like
11:32
the the initial kind of inkling that this could be a great
11:36
company to join or work with in the future.
11:39
And then, yeah, if we Fast forward a couple years, like I
11:44
think we we had some really great growth and we had lots of
11:48
inbound interest from potential acquirers.
11:52
And so we started like really thinking like, you know, from
11:55
like a personal and professional level, like where do we want to
11:57
take the business? And we started looking around
12:00
for like who could be the right home for after selling the long
12:04
term. And Rock really was like the
12:08
best fit. I mean, definitely in
12:11
retrospect, I don't think there would have been any better
12:13
option. And I think the core thing was
12:15
just like the products energy are just so clear, right?
12:18
Like it's it's literally post purchase third party offers
12:23
instead of first party offers. When you said personal and
12:26
professional, like how I guess what I'm most curious about is
12:31
how do you think about that question?
12:33
Like how do you think about what is the right outcome for you in
12:37
that context? So like ignore after cell for a
12:39
second. It could be like, you know,
12:42
Zigbee business or whatever, whatever it is, you know what I
12:44
mean? Like any anything like how did
12:45
you think about that for for yourself?
12:48
Yeah. So at the time, I mean, we were
12:51
like pretty much right out of college and you know, we, we
12:56
wanted to get some initial chips off the table and have like a
13:00
sense of financial security, if you will.
13:04
So that was definitely a big part of it personally and I
13:08
think. Can I Can I ask a question?
13:11
Sure. Which may be like a pretty
13:13
personal question, but why were you worried about financial
13:15
security at 22? Jeremiah?
13:18
Man, come on, isn't it a reasonable question?
13:22
No, it's totally a reasonable question.
13:24
I'm just thinking about myself at 22 versus, yeah, I'm 35,
13:29
myself at 35. Very different way of thinking
13:31
about things, Yeah. Yeah, yeah, yeah.
13:34
I mean, to be honest, like I think we all had like slightly
13:38
different mindsets. I think for me it was like it,
13:42
it did feel like after sell wasn't going to be a business
13:45
that I would build for like a decade, right?
13:47
It just didn't seem like it had that kind of potential by
13:50
itself. And so I knew that at some point
13:54
there would be some sort of exit, you know, as probably most
14:01
finders in that kind of situation think like there's a
14:03
couple options. You could obviously sell the
14:05
business, you could try to hire CEO or like hire, hire like
14:10
operators to run it. And it seemed like probably best
14:14
to to exit. I think financial security was
14:18
less of a worry, but more of just like this would be cool.
14:21
Like this would allow freedom and optionality.
14:25
I think that's what I think that's, I think that's actually
14:27
the very useful insight because we, we like talk to a bunch of
14:31
people on this podcast and I, I think like a useful thing to a
14:36
potential future founder or current founder is just be clear
14:40
minded about what you're trying to do.
14:42
Yeah. And it's like 1,000,000 bucks is
14:43
cool. Then just get 1,000,000 bucks.
14:46
You know what I mean? Like just do the thing and don't
14:50
like, go out and raise $40 million.
14:53
Like just build a business and sell it for 1,000,000 bucks.
14:56
I agree. Right.
14:57
And that's awesome. Like, there's nothing wrong with
15:00
like, like we live in a capitalistic society.
15:03
No problem. Like do that and then do the
15:07
next thing, you know what I mean?
15:08
Like and then go do the next thing and then go do the next
15:11
thing. And then, you know, life is long
15:13
and getting longer. You know what I mean?
15:15
If you bank 1,000,000 bucks at 22, that's your retirement.
15:20
As long as you don't touch it right like that, you're good.
15:22
But you don't you don't really need to.
15:24
I guess it depends on what kind of level you want to live at,
15:26
but that's worth 10s of millions when you're 75 if you if you
15:32
play that right. So there's like, yeah, I think I
15:34
think it's really interesting. And I think one thing you said
15:38
to talk about like building this for 10 years, I've got some
15:41
ideas around why I would maybe feel similar to you.
15:45
But I'm curious, like, what if you can get into some specifics
15:48
about why this wasn't something you thought you were going to
15:52
build for the next 10 years? Jeremiah, sorry, I want Vernon,
15:56
I want you to answer that question.
15:57
But Jeremiah, I'm going to do some math because I think it's
16:01
super underappreciated what 1,000,000 bucks at 22 means,
16:04
given how long life is, 1,000,000 bucks at 22 at 92 is a
16:11
billion bucks, OK? You're talking about, OK, what
16:15
10% annual or what's the number on that?
16:18
1312 to 13 double S every seven years. 710 you do 10 you do 10
16:25
double S, Yeah. Component was real. 1,000,000
16:28
bucks at 22 is you're in Miami having a great time and
16:35
1,000,000 bucks is 200 two 100,000 by 23, right?
16:40
Yeah, you know, they get me wrong.
16:41
Like, yeah, for sure. Yeah, or, or, or you just don't
16:45
be stupid. Put it in the S&P and wait till
16:48
you're 92 and now your family is a billionaire family.
16:52
Like I, I think I think like this is like the, I, I think
16:55
like these things are not to be underappreciated.
16:58
Now if you want to go buy a Maserati and like lose 70% of
17:03
the value, driving off the lot to do what you got to do, you
17:08
know what I mean? But a lot of us are going to be
17:10
healthy at 92. Yeah, when we sold, no, like
17:14
part of what I was thinking about because I like frankly, I
17:16
didn't, it was a very, it was very new, not that big of a
17:19
deal. And the total dollars, I didn't
17:22
actually get that much, but I got enough that it was life
17:27
changing. Like just frankly speaking, like
17:29
I, I got all my debts paid off, all my walks on my house, but
17:32
and some things I didn't want to pay off at the time.
17:34
But anyway, I get it cleared. I, I went from a, a net worth
17:38
that was in the red to one that was not in the red because I'd
17:41
spent so many years as a founder not making any money.
17:44
And that was actually life changing.
17:46
Like it completely changed the options that I had in front of
17:49
me at that point in time. And it didn't take that much
17:51
money. And I, I remember listening to a
17:53
podcaster on that time and I, I forget what it's called.
17:56
It's actually really. It was the less cool version of
17:58
SAS operators. Correct.
18:01
Less real, less fun, Not as many strong podcast voices.
18:07
Yes, we was talking about how 250K is life changing money for
18:10
the vast majority of people. I mean, unless you like, yeah,
18:12
there's a couple of cities where that's not the case.
18:15
But for most of us, if you just get a check for $250,000, that
18:18
changes the options that you have in front of you.
18:21
So I do, yeah. I agree with this idea that you
18:23
know getting $1,000,000 in your 20s is completely and totally
18:27
life changing. I'm not sure if I told you guys
18:29
much about after I sold my first brand, but I was like super
18:33
broke when I first started my first brand.
18:35
I was like -2000 in my overdraft in UK, there's like 0% overdraft
18:39
for university students and then the brand very.
18:42
Quick yeah, socialism has some benefits, yeah.
18:46
But yeah, and then the brand grew very quickly and I had more
18:50
money than I knew what to do with.
18:51
And then eventually when we sold, I invested a lot of it and
18:56
it went very poorly, very, very poorly for like 2 years.
19:01
It was like something I was trying to forget about, you
19:03
know, I was just having fun. I'm like, I wasn't poor.
19:05
I was still very rich. But like, I was like, oh, like,
19:08
forget that. I did this.
19:09
And then my mom texted me. I remember I was I was in Hoyan,
19:14
Vietnam, which is like this very cute little town in the center
19:16
of Vietnam. She said, don't you have some of
19:18
this? I was like, oh, yeah, I do.
19:21
And then I checked it and I was like, oh wow, this was a very
19:24
good decision. Yeah, that's that's a story that
19:26
everyone wants. The question is effectively why?
19:29
Why was it that you didn't think that after sell was the thing
19:32
you're going to build for the next 10 years?
19:34
When we started the business, a lot of the thinking was that
19:39
this was like startup university almost.
19:42
I think I, I and my Co founders had aspirations of building like
19:46
a very large business one day. And I think the I think there's
19:53
like several aspects of it. I think I mean just from like a
19:57
straight up business mechanics aspect, like I think the Tam,
20:00
the competitive landscape like what was possible in the, you
20:03
know, if you really like went down to it, what was possible
20:06
didn't feel like it would be. You know, a billion dollar
20:09
company it's, it has exceeded my expectations for sure.
20:13
Like I think a couple of times in the business I, I didn't, I
20:16
didn't really expect that it would get this far.
20:19
But yeah, you know, I, I still don't think that by itself it
20:22
ever could have really reached like a Unicorn scale or anything
20:26
like that. I mean, this is the conversation
20:28
we have like every couple weeks we have this conversation about
20:32
the shop fight ecosystem and the Tam.
20:35
Yeah, like I. Think.
20:37
I think in in in ecommerce or ecommerce adjacent like for for
20:41
an example, definitely in ads like there is massive Tam.
20:46
But yeah, like you know, as, as we all know, like in in
20:48
specifically in the Shopify ecosystem, there are very few
20:52
large companies there's like you can you.
20:54
Name them. I think so.
20:57
Clavio Yapo Attentive. You think Attentive is in
21:03
Shopify? Yeah, maybe not, but it's
21:07
probably like within the ecosystem, the kind of company
21:09
that you might you might see at Commerce Roundtable or
21:12
something. So recharge, recharge.
21:17
That's a good one. Yes, of course.
21:18
But yeah, beyond that there isn't, didn't feel like it was
21:22
like a ton of opportunity so. What are you going to build next
21:28
once you have the inkling to do so?
21:33
Yeah, I mean, I think will be there will come a day when I,
21:37
when I do have that inkling and I'm not, I'm not 100% sure.
21:43
I think the world is has changed very quickly over the last few
21:47
months, especially the world of B2B software.
21:52
And so I think there's like right now I'm like, I mean, I
21:57
don't think, I don't think I'm, I'm really like thinking about
22:00
the details of anything that I might build one day right now.
22:03
But I think whenever I do think about whatever I might do next,
22:06
it's it's, it's usually like more of like a personal
22:10
philosophical question about like, what do I want?
22:13
And then I think that'll lead to like, what kind?
22:15
Of do that it's been a deep philosophical chat.
22:20
Do you have any ideas about like philosophically what what you
22:22
want from life? I think I'm still kind of
22:26
figuring it out like like I think everyone is.
22:29
I think I know I want to keep building businesses.
22:34
I think that's like probably the only thing I could do that I
22:38
would really enjoy. You know, you can't ever
22:42
disprove that, but I'm pretty sure like this is my thing.
22:45
So I think. I mean, there's nothing wrong
22:48
with wanting to vest. Honestly, like I think the other
22:55
thing that I wanted to say that I realized later for for like
23:00
why selling was, was really good for us was that we were like
23:05
operating at a very like like we were, we were 24 year old kids
23:09
or actually 23 year old kids when they sold.
23:13
And so we didn't really like we got at a certain point, but
23:16
there was a lot of learning that we were missing out on and
23:20
joining rocks. You get to see how a much larger
23:23
company operates, a much larger company that has, you know,
23:27
growing really, really well over the last, you know, 12-13 years.
23:32
And I think there there was so many insights about like
23:36
business models, like management culture, things like that, that
23:40
you know, hopefully are worth way more than the actual exit
23:44
amount on paper. Can I provoke you?
23:48
Is that OK? Sure.
23:49
On that point, how much of that do you think is still useful in
23:54
the AI era? And then, and then my second
23:59
provocation related to this, because I think it's like the
24:02
hardest question. I like I missed the, I mean, I'm
24:07
like similar to Jeremiah's age, right?
24:09
And so like we missed the Internet boom.
24:12
Like we were not working individuals during the Internet.
24:16
And so the Internet was like not a thing that we could like
24:19
capture into our careers, right? It's like it happened and we
24:24
were in like school basically when it happened.
24:27
And so like the thing that we had to catch was like SAS, OK.
24:31
So like we we were like working when SAS and cloud happened.
24:35
Yeah. And you know what I mean?
24:37
And hence SAS operators, AI is currently happening.
24:41
And this magnitude of shift happens every call at 25 to 30
24:46
years. OK.
24:47
So like in the 20s, you had the industrial revolution with cars
24:50
and things like that. In the 50s, you had a
24:54
semiconductor revolution, atomic bomb, everything related to
24:58
quantum mechanics basically in that era.
25:01
Then you had the Internet and now you have AI.
25:03
OK, those are like roughly the actual big things, right?
25:08
And everything else is kind of cute on a relative basis.
25:12
And so attached to, to, to the other question, what I'm, what
25:17
I'm really wondering is like, while this is happening, like
25:21
there are all these stories like Elon left grad school, like this
25:25
person left this thing, this, what do you think for you is the
25:29
right way to be in the mix given that this is happening right
25:32
now? I can tell you, for me, if I
25:35
were not building a company right now, I feel like I would
25:38
feel like mad. I'm going to be 75 or 80 the
25:42
next time this happens. And that's too risky for me.
25:47
Like I, I think I'll be healthy, but what if I'm not?
25:52
And then I can't take advantage of that next like massive wave.
25:56
Like, yeah, how do you interact with that?
25:59
Yeah. So that's a lot.
26:00
Let me let me try to go through it.
26:03
Maybe it's your last point. For what's worth, it feels like
26:06
things are accelerating. So, I mean, if you think about
26:09
like the last couple, you know, information technology waves,
26:13
like you said, AI, but also before that cloud, mobile
26:18
Internet, that was all like still in the last 25 years.
26:20
So I think, you know, hopefully I, I, I'm definitely hoping that
26:24
there's, there's more ways to ride before, before we get all,
26:30
you know, unable to ride them. But so that that's one thing to
26:35
ask you a question about, like, or to answer your question about
26:39
like what to build in this AI era.
26:42
Like, I don't think anyone has the answer.
26:45
But if I were to try to answer, I think like you have to just
26:49
look at like what modes are still there.
26:53
Like, for example, I think a network mode is something that's
26:57
still valuable, that that seems like it's something that will
27:01
not evaporate that easily. I think like potentially
27:05
regulatory or like deep trust modes are also still a thing.
27:12
Yeah. I also think like one of the
27:14
things that's interesting you talked about getting into a
27:16
bigger company. I do think there's a difference
27:20
in the way a startup startup operates versus a business
27:24
that's been established for a while.
27:25
And I do think that regardless of the wave of technology, yeah,
27:29
one skill that is really important is understanding how
27:32
to run a business. And it's like that change it
27:36
like the the inputs of that change.
27:38
But over time, that's the thing that's always said constant, is
27:42
that the value your customer receive receives has to be
27:46
greater than what they pay for it.
27:49
And the and what they pay for it has to be greater than your cost
27:53
to deliver it. And it's that's actually far
27:55
harder to do than most people realize like that that very
27:59
simple equation is actually a really difficult thing.
28:01
But I think takes a lot of practice to do well.
28:04
And the better that, the better you can actually take advantage
28:07
of any given wave. So I think that's one thing this
28:09
is yeah, operators that's also really like learning how to be
28:13
an operator is a different skill set from starting something from
28:16
scratch. So I do think that's something
28:18
that's transferable for, you know, thousands of years that's
28:21
been the case. I agree.
28:22
And yeah, I guess that was the the other part of the question
28:24
that I was thinking about answering here is like like,
28:27
yeah, just to paint the picture, before the acquisition, I was
28:31
never like a multi level manager, like I just managed ICS
28:35
before the acquisition. We had no like values or like
28:38
culture as a team. We had no like performance
28:41
review processes. These are just the people side,
28:44
right? Let alone like the the
28:46
commercial side that I learned so far and like so many other
28:50
facets of running a business. So from that perspective, it was
28:53
like a huge step up and very valuable.
28:56
OK. I'm going to ask another
28:57
question on this, on this particular perspective.
29:04
I am unlearning those things for what it's worth.
29:06
So, so I started this company after being a leader of like
29:10
hundreds of people at a previous company called Live Ram.
29:13
OK, so like before I started this I was an executive.
29:16
At a company called Live Ram, we work with them as well.
29:19
Yeah, exactly. Yeah.
29:22
So and like I did all the stuff, you know, I like was I like
29:26
learned what is like good management and good leadership.
29:29
And I'm not sure any of those things are true anymore.
29:33
And I spent a lot of time learning how to be a good
29:34
manager and in like the traditional way of thinking
29:37
about what a good manager is like, you have very high
29:39
retention and people like are very happy and fulfilled and
29:44
like all of this stuff. And, and this might sound very
29:47
provocative, but I think that those systems were designed for
29:51
an era where you, the speed that the outside world changed was
29:57
slow enough that you could afford information inside of
30:01
your organization to flow at a certain rate.
30:05
OK, so let me give you a very simple example of a management
30:08
principle that I think is highly provocative to interact with.
30:14
It has been said for decades that you should give criticism
30:17
in private and praise in public. OK, very simple management
30:22
principle, true for decades. What have we all heard Jensen
30:26
does? Yes, he criticizes in public.
30:29
What have you heard Ilan does that he criticizes in public?
30:32
OK, let's take this very simple principle, right?
30:36
I'm like, this is like not nothing sophisticated, very
30:39
simple And ask why this principle was useful potentially
30:44
for 60 years. It was useful because you could
30:47
afford to wait until you had time to discuss in private with
30:50
someone what the error was or what the information they were
30:57
not considering was and then give them that feedback in
30:59
private. So that way they understood it.
31:02
And then they didn't suffer from embarrassment or shame or some
31:06
all of the negative consequences of receiving that that feedback
31:09
in public. And so there's an information
31:12
transfer assumption, information transfer rate assumption that is
31:15
being made in that management principle being the correct one,
31:19
which can only hold true if the outside world is changing at a
31:22
certain rate. So like I can hold my goals
31:24
true, which we've talked about this in previous podcasts.
31:27
We I got like hold my goals true for a long period of time.
31:30
And therefore I can give you feedback on our way to like
31:33
hitting that goal over that long period of time.
31:35
So the setup is now all of those things are moving way faster,
31:39
including the information transfer rate.
31:41
Because with something as simple as I can connect claw to slack
31:46
and just get context and what everybody is up to, including my
31:49
peers. So like I'm an IC on the
31:50
engineering team. I can just ask Claude, like,
31:52
Hey, what has Varnum been up to? And it's like he hasn't been
31:56
doing shit and I can just know that.
32:00
How do you manage in that context?
32:02
And do all of those principles still apply?
32:04
Yeah. So my perspective on this is
32:05
like separating, like like if you just looks like another
32:09
example, like what you learn at school, a lot of what you learn
32:12
at school are like facts and like just like historical things
32:15
are like, I don't know, like laws or rules in math and things
32:18
like that, right? That's one thing that you learn,
32:21
but you also learn like how to learn.
32:24
You also learn like, you know, how to think.
32:27
And I think in business it's similar.
32:29
Like there's, there's like he's like heuristics that you learn
32:33
like the one that you, you mentioned about criticizing in
32:35
private and you know, celebrating in public.
32:39
But then like on the meta level, you also learn like, you know,
32:42
judgement of like when to apply those heuristics and when when
32:45
not to. Like, for example, in my
32:49
personal experience, I still like to apply it for people who
32:52
are like new to the business or potentially more junior and, you
32:54
know, maybe have like less thick skin versus like, yeah, like
32:58
someone more senior or someone more like something more.
33:01
Like, it feels like, you know, there's a sense of psychological
33:03
safety and like a real, real like urgency.
33:07
Then like it's, it's more OK to criticize in public is like,
33:11
that's kind of like, that's kind of like, I think the difference
33:15
where like at at rocks, I've learned like how to do business
33:20
better as opposed to like, you know, there's specific things as
33:24
well, like specific heuristics and rules of thumb.
33:27
But like the meta is still like how to do business better.
33:31
And I think like Jeremiah said, like that is still applicable
33:35
for whatever's next. Yet even if it were, it would to
33:37
be in an entirely different vertical or industry.
33:41
I think a lot of the core will be the same, like the meta will
33:45
be the same. I question shop for you.
33:50
Hey, are you doing that criticizing in public?
33:53
That's the one question I have. Like I mean like criticizing is
33:56
like maybe strong, but like, you know, I will like in like a
33:59
group text be like, hey, like can we change this?
34:02
Can we change that, right? Like things like that as opposed
34:05
to like let me separately DM this person.
34:08
I'm not joking. I just shut down all of our
34:10
personal channels right now with my team.
34:13
Mike Not big, it's just a bunch of VAS and stuff and a couple of
34:17
US people. But I just shut down all our
34:19
personal channels, so all comms happen in public channels.
34:21
I don't know how to turn off DMS though.
34:23
But I think that's such a good idea, right?
34:25
Kill that silo of information just in one error.
34:28
Just don't respond to them. That yeah, that's I'm already
34:32
doing that. I just that's that's literally
34:34
what I do. Interesting.
34:35
Yeah. So, Jeremiah, to answer your
34:37
question, I don't respond to DMS. I feel like a lot of us as
34:40
well as like like after sell is a is a part of a larger company.
34:48
So a lot of these things I would actually love to maybe try one
34:51
day, but I can't really do that without without disrupting how
34:57
things work in a larger, larger business.
35:01
You know, that reminds me of the, do you remember way back
35:04
when, Rashad, you did the daily stand ups to change everyone's
35:09
rhythm in the day and then suddenly you put them into this.
35:12
I'm not sure if this is the case or this was the intention.
35:14
I think I remember you saying it was.
35:16
You put them into this adaptive state where they're not doing
35:19
what they were doing yesterday and last week, but they're now
35:22
doing the new thing, right? I love this idea of having all
35:26
comms and public channels because then other people learn
35:29
from the criticisms that you give and you're not just siloing
35:32
that for the purpose of, I don't know, people's feelings.
35:34
There's no emotion in constructive feedback, right?
35:37
It's just let's do this right, Right.
35:40
Probably like you're, you're, you're investing in like
35:43
potentially a little bit of short term friction and like her
35:45
feelings potentially for the long term benefit of like a more
35:49
transparent and like honest and like faster culture.
35:53
Right. And I think my friction.
35:54
Is weird, like can I tell you what the outcome has been?
35:57
I can, I can just tell you guys what the outcome has been of
36:00
doing this. The outcome has been the highest
36:05
performers raise their hand and say let me do it.
36:09
That's the outcome. How do you think about this in
36:12
terms of thinking like your leadership team and stuff like
36:14
that, where you may be having conversations that are not
36:17
something that you want to have broadly available for your your
36:20
team? Or does that not exist?
36:22
If you have to talk about, I don't know, funding around that
36:27
you're raising or if you needed to do layoffs or something like
36:29
that, Are you going to have that conversation in public channels
36:31
or are you going to separate those kinds of conversations
36:34
out? OK, I understand.
36:36
Got it. So there are two things that are
36:39
still true, like I will never do anything unethical.
36:44
So if I am talking Jeremiah about you and it affects you
36:48
personally, it is unethical for me to tell Varun that.
36:52
If I don't tell you that, unless Varun needs to know because he
36:55
is involved with HR for some reason.
36:57
So like I mean, you still have to.
37:00
I think this goes to Varun's point around like there are and
37:03
your point around there are baseline things that need to be
37:06
true that you have to like you know, you don't want to breach
37:09
ethics, you don't want to breach legality, you don't there's a
37:11
bunch of things you don't want to breach.
37:13
But past that, you want to question everything and and
37:18
shift everything to candidly optimize for speed given how
37:24
fast the market is moving. And one of our observations has
37:28
been that speed is actually the thing that the market is asking
37:32
for right now because the market is moving so fast.
37:35
So our customers, the only the reason they trust us is they see
37:39
our product velocity and they're just like, Oh my God.
37:43
Like I don't know what you guys are doing, but you guys are
37:47
producing product at this insane rate.
37:49
Like we need to learn from you and we need to work with you.
37:53
And and you don't get that if you create layers basically.
37:59
Yeah. And yeah.
38:01
So that's like roughly how it plays out.
38:04
And by the way, when I say everything is in a channel, like
38:06
it does not mean like, you know, in the Slack thing, like
38:08
selection of public and private. There are private channels.
38:13
I just don't respond to DMS. So, like, if Jeremiah, you message
38:16
me, I will not reply because actually it's like breeding gown
38:21
for politics inside of an organization.
38:25
When you have DMS and especially to the CEO, which I am sure you
38:32
have to like deal with this where it's like people will
38:34
message you on odd things about other people.
38:38
I'm I can't, I can't, I can't allow for that, basically.
38:42
Yeah, that's. Actually interesting.
38:43
I don't I actually don't get that.
38:45
I get a leader of something asking for I'm dealing with this
38:50
person issue. Like what?
38:52
Do you have any input you want to weigh in on this thing, that
38:55
kind of stuff. But actually, I can't think of a
38:58
time when I had somebody complain to me about somebody
39:00
else that makes sense. I think the other aspects of
39:03
this that are interesting are like, like, do you guys have in
39:07
person cultures? Because I think in an in person
39:11
culture you'll have people just like come up to people.
39:14
So then it's kind of hard to like stop that.
39:17
And then also, like, you know, I have a lot of my team members on
39:22
like text on iMessage or other things like that, and I'm sure
39:27
other people do too. So like, it's hard to prevent
39:29
that piece. Don't take the meeting in a
39:32
room, take the meeting outside. Like literally, Like literally
39:36
we have an in person culture. I mean, I'm recording right now,
39:39
so I'm sitting in a conference room.
39:41
I literally, if someone wants to talk to me, I say I don't go to
39:43
conference rooms. Yeah, interesting.
39:46
It's the same thing. That's right.
39:48
So clarify you're, you're talking to them in a place where
39:52
other people can hear. That's that, yeah.
39:55
I guess it makes sense for you, but like, are you trying to
39:58
disseminate this across like your leadership team as well and
40:01
like the whole company and like, how's that going?
40:03
I'm curious. Mixed like I I I I I am more
40:11
comfortable with confrontation and uncomfortable situations
40:16
than the average person, right? Would have never guessed that.
40:23
I think if you're able to separate the emotion, it gets so
40:26
easy. It gets so easy.
40:27
We're talking about work here, you know?
40:29
This isn't about anything personal.
40:30
You know, no one's raising their voice.
40:32
If you're like civilized person, right?
40:35
It becomes very easy to have friction for conversations
40:37
because both people are aware, hopefully, that the goal is to
40:42
do the work properly, is to make things better, not to hurt each
40:46
other emotionally or whatever it is.
40:47
Right. Correct.
40:49
It's so it's so interesting though, because like, because I
40:52
completely agree. This is something I've been
40:53
working on a lot over the last couple of years in particular is
40:56
just trying to have like really honest conversations with
40:59
people. But that's not my default.
41:00
That's not the way I was raised probably is what it comes down
41:03
to. Like you, don't you?
41:06
And so you have to fight against that, that default nature.
41:08
And I think a lot of people, and in fact, I would say most people
41:13
start from this place of like, I don't want to offend anybody.
41:15
And so then by that's if that's the nature or nature may not be
41:20
the right word, but like that's the, the, the default kind of
41:23
training you have, then you have to like really work to get
41:26
outside that. And I, I think that's a a hard
41:28
ask for most people. I think there's like a Frank
41:32
Slootman quote about like one of the main things we have to do
41:36
as, as ACEO or, or executive is just like confront people, you
41:42
know, hopefully like in, in, in the ways that are effective.
41:46
But you just have to tell them sometimes that like, no, this is
41:48
like not OK. This is not how we want to do
41:51
things. And yeah, it's part of the job.
41:54
Can I give you guys one useful anecdote or one useful
41:59
observation is I've I've done this for a long time and it's
42:02
led to like me having to fire friends and things like that.
42:05
In almost every case, even when I've had to fire someone or let
42:08
someone go or whatever it is or, or like 70% of cases, it's like
42:14
they still keep in touch with me as an advisor to them in their
42:19
careers. And of those who do, they do
42:23
actually end up getting a lot of value out of that frankness of
42:29
that conversation that happened at a certain point of time that
42:32
was like not comfortable in that point in time, but LED to
42:35
massive success afterward. Some of whom you could, I mean,
42:39
if you did a lot of work, you could figure it out.
42:41
But they now have their own businesses.
42:43
And I've like helped them get there first, whatever X number
42:46
of customers, and they're now founders on their own, right?
42:49
And it just happened to be the case that it was not a fit for
42:52
us, right? And, and, and I think it's like,
42:56
what people perceive as like this is like bad.
42:59
Those are some of my best relationships.
43:02
Yeah, I think we've had similar experiences where someone in, in
43:08
their, you know, in role X is not doing great, but then you
43:11
just move them to role Y and like, holy shit, you're like,
43:13
wow, this person's day. Phenomenal.
43:16
And it's, it's interesting where yeah, there's a lot of like, I
43:20
think there's a lot of like manager employee fit things we
43:22
have to consider is a lot of like obviously what their actual
43:25
job is, so many aspects. Run.
43:29
I've been dying to ask you since we started this core and
43:33
actually since we first start chatting and asked if you wanted
43:36
to come up. One of the things that I tried
43:38
to ask people, not everyone has it like I guess up their sleeve
43:41
just ready to go. But like, what are you thinking
43:44
a lot about right now? What do you think is
43:46
significant? What is like taking up a lot of
43:49
your your time and you think is probably worth other people
43:52
thinking about maybe a little bit too, right, Because it's
43:55
somewhat transferable. Well, to be honest, I think I
43:58
think a lot of people are thinking about AI and myself
44:02
included. So that's, that's like the most
44:05
kind of that's that's the answer that comes to my mind first.
44:10
Happy to go into that. But maybe like something a bit
44:13
different than I'm thinking about is more like, how do we
44:17
want to like keep innovating as a business?
44:21
I think we're in a unique situation where like we've kind
44:24
of, we've become like arguably the market leader in this space
44:29
and we, we, we are like becoming the the incumbents.
44:33
And I think a lot of like the actual innovation that we have
44:37
to do now is like very much like pure creativity.
44:41
There's no one else to look to. So like, yeah, how do we get
44:45
better conversion rates on our upsells when we already have
44:48
like most of we, we already have everything you can do at JABBA
44:52
file allows. We already have most of like the
44:55
rings, the the bells and whistles that you know, that
44:59
that takes some time to add. So that's, it's pretty specific
45:02
to our, our business. The other thing is like, I think
45:07
I saw this podcast with Elon and Dwar Cashman and John Carlson
45:13
the other day and Elon kept asking, like he kept saying that
45:17
he asks, He asked himself like what is the limiting factor of
45:21
our business for each part of the business and for each of the
45:25
businesses that he he runs? And I was asking myself that
45:28
question too. And I think for us it's, it's
45:31
probably it's probably a go to market talent.
45:36
I think, you know, it's a lot of the rocked.
45:40
A lot of the rocked work is really like sales and BD LED.
45:43
So I'm thinking, how do we get get more great people that to
45:47
join us? I was talking to a skin care
45:49
brand not too long ago. They're like not huge, 6,000,000
45:52
a month ish, which is not tiny, but not huge.
45:55
And this was their question as well.
45:58
It was like what should we do? Go to market wise?
46:01
Here's the PNL, here's all the data.
46:04
What do you think? Right?
46:06
And I looked at it and I went, OK, you guys don't have
46:09
self-serve wholesale, right? And I, I thought I was like very
46:12
smart for saying that. I was like, OK, you're not doing
46:14
any like self self wholesale. This is a whole channel that's
46:17
not activated. And maybe we could do that.
46:20
And obviously there's 1000 reasons why to do it and 1000
46:23
reasons why not to do it. But like while you were saying
46:26
that about the go to marketpiece, has like Salesforce
46:30
ever entered your mind like being somewhere else apart from
46:33
Shopify? Yeah.
46:35
So going off platform, that's it.
46:37
Yeah, it's an interesting question.
46:39
I think for us it's pretty clear what the answer is.
46:43
So for for the after sell core SAS business, so first party
46:49
upsells, it's pretty pretty much built on top of Shopify's post
46:54
purchase API. So take it to take it to another
46:57
platform means we have to work directly with that platform and
47:01
like do a lot of like core infrastructure product building
47:05
to make it actually happen. We've explored this before with
47:09
with some partners and it seems like it's not worth it generally
47:14
or like, yeah, maybe for Salesforce Commerce Cloud, the
47:17
potential could be there, but we we haven't really found it like
47:24
of all the things we could do, you know the thing that we
47:26
should do and I think the other thing there doing.
47:28
Something right, Hey. Yeah, Shopify doing something
47:31
right. And like that's also just like,
47:33
you know, the tide has already shifted towards Shopify
47:37
investing in, in shrinking channels or shrinking
47:41
alternatives seems like maybe maybe not the best thing to do
47:44
from from that perspective. The other part of the business
47:48
are Rock. Thanks aspect of the business.
47:52
We actually, so now we actually run a couple accounts that were
47:57
previously run by by other parts of the rock business.
48:01
We kind of have like the, the full SMB business under under
48:06
our leadership. And so those, those accounts are
48:09
like off Shopify. We have a bunch that are like on
48:12
Magento custom cards. Like we, we even have accounts
48:17
that we manage that are like not retail, they're like movie
48:20
theaters or like some, some other things.
48:22
So from that perspective, we're already off Shopify.
48:25
Adobe's looking for a new CEO man.
48:28
What's that? I said Adobe's looking for a new
48:30
CEO. Maybe it's time.
48:34
I'm just kidding. I'm just kidding.
48:35
That was a. That was too soon.
48:37
That was, too. Soon does not does not sound
48:39
like a business I want to run. It's tough right now for them,
48:43
I'm sure. Do you, do you think that, do
48:46
you, do you think the next business you would build would
48:49
be serving SMB or given that you've now seen across SMB and
48:54
enterprise, let me take a, let's just pretend the world is like
48:58
consumer prosumer, SMB and enterprise.
49:01
Given what you've observed in the next business that you
49:04
build, where do you think you are currently leaning?
49:08
Which is like, who knows what ends up happening in reality,
49:10
but where would you currently lean?
49:13
Yeah, currently I would lean similar to what we did for
49:17
after. So probably more enterprise
49:19
though like a bit more enterprise.
49:22
But like I think the really enterprise deals are just like
49:28
slogs with like super long sales cycles and.
49:31
Who said that? That's that's that's the
49:36
craziest thing I've heard. That's that's the experience so
49:40
far in our business, but I mean like Explosion 500.
49:48
Maybe we should define what truly enterprises in that
49:51
context, because. I mean those are the kinds of
49:53
clients that Rocked has and those are like many months,
49:57
multi year deals sometimes. Yeah, but do Sierra's been
50:00
around for two years and they sell to the Fortune 500 and
50:04
their sales cycles are under two quarters.
50:07
This is a rocked problem. This is not an enterprise
50:09
problem. I'll give you the number of our
50:12
good market leadership you can, you can text them and let them
50:15
know. I'm sorry, I'm observing.
50:18
I'm not COM, I'm not criticizing.
50:19
I'm just observing, yeah. Yeah, like.
50:22
I'm talking about sales cycles in quarters.
50:24
Sounds miserable to me. Like the fact that quarters is
50:27
the the the unit of measurements I want.
50:31
Yeah. So I think like that, that that
50:33
extreme end, you know, if there's a way to like make it
50:36
shorter, like like you're saying a shot like that's great.
50:38
And that would definitely make me more interested.
50:41
But you know, right now it's. Dude, life is simple.
50:44
Hire the ex CTO of Facebook, ex CEO of Salesforce to be your
50:47
salesperson. Which is why I'm saying it's not
50:53
a criticism. I'm just saying like it's, it's,
50:56
it's, it's, it's helpful to like.
50:58
Well, it's helpful than. Possible assumptions.
51:00
Yeah, I know. Totally.
51:01
Like I I will look into that after this call.
51:04
That is interesting. But yeah, like something I think
51:07
a bit more enterprise than aftersall will be the sweet
51:10
spot. I think something like hopefully
51:12
like, yeah, and this is like if I choose like the, you know, the
51:16
practical, like let me build again a business that is
51:19
probably, you know, decent odds of success given my past
51:23
experience, you know, that kind of thing.
51:27
I think, yeah, I would go a bit more like enterprise, but but
51:31
still like not stray too far from the kinds of the kinds of
51:35
relationships and network and core business I've built.
51:39
I think there's a whole other world of like doing something
51:41
completely different, but I, I still, I don't know.
51:45
And honestly, this is still something that like, I, I don't
51:48
have the time to think about right now.
51:49
I'm still pretty heads down operational.
51:52
Dude, this has been amazing. Yeah, yeah, really fun, really
51:59
fun to to learn. Yeah.
52:02
I will share your way more introspective than the average
52:08
executive because separating the the like, yeah.
52:12
The this like thing of like, what do you learn?
52:14
What do you unlearn? How do you learn?
52:16
It is I don't think everyone is there yet on unlike what is just
52:22
a heuristic that you can take for granted and what is a
52:25
heuristic that you should not take for granted.
52:28
And I say that on first hand observations of myself, like I
52:32
catch myself saying stupid things all the time, like
52:35
friends. It's not easy right now because
52:39
things are changing very fast. Yeah.
52:42
I was just going to say thank you for giving me the
52:43
opportunity to introspect because like, I actually don't
52:46
think I'm that introspective. I feel like day-to-day I'm just
52:48
like doing shit. But hopping, hopping on this
52:50
call with you guys. You guys are asking me some some
52:52
great questions that are really, really making me think.
52:56
So yeah, I appreciate the time guys all.
52:58
Right. Cool.
52:59
Well, thank you. It's a it was a good shot.
53:01
Awesome guys. Bye.
53:03
Take care.