Building Startups: Culture, Retention, and Personal Balance

I think about this as a magic triangle. I think people can picture a magic triangle in their head where each ends is really mission people and culture. Those are the only three things that I believe you can really, truly, if you want to say, control, which is honestly heavy word is are those three things. Do you have a mission that people believe in that you want to believe in no matter what happens, even if it's pandemic, do you truly now believe in it or you just said it? [00:04:30]

And I realized that there's no other or better culture than a winning culture. And what I mean by that is people got to feel like they're winning. It doesn't mean that you're closing more deals faster. It's like they are winning personally and professionally. So I think those are the three things that you can do every single day is like, are people, do we know? Are we repeating where we are going? Our mission is clear. Are we hiring the right people? Because if that's not true, then nothing else is true. [00:05:13]

We have to define the win, what a win is, but otherwise everybody defines it for themselves, come to work with their previous employer in mind or wherever they came from in mind. So defining the win and creating culture around the win, that's what you're talking about. Yeah. Absolutely. For example, a win for a salesperson could be like, Hey, I'm actually making these appointments, not closing the deal. At the same time, for a customer success person, a win might be I'm saving a customer for a marketing, maybe like, Hey, I'll just launch this thing and it's actually making people think about our brand. [00:05:47]

And what we realized was especially last year, Randy, we came up with this new phrase called retention is the new acquisition. Retention is the new acquisition. We realize that if we focus on growth at all costs and not focus on retention, we're actually going to lose faster. And we are going to be always going to hire, get more customers, get more customers, get more customers. But if you really look at the financial statement of your company, it is way cheaper to keep a customer than to acquire a net new customer. [00:08:49]

So we literally pivoted and say, you know what? Let's just focus now more on retention. And what that did was our net margins, everything just went better. Our valuation became much better as a business because we didn't really care about way more customers. We said, it's okay to grow at maybe 20%, but it's important to be at a hundred percent retention rate. So we changed the mechanics around it. Now every company is at a different stage in their organization. [00:09:15]

The first year of every startup is actually a problem market fit, which means does your market care about the problem? A lot of startups, the reason they fail is because they assume that the market needs your product. The reality is your product could change. Our product has changed four times in the last six years. We've acquired four different companies to continue to grow our business because we are not tied to the product, we're tied to the problem we want to solve. [00:13:30]

And this goes back to the triangle, the mission, because the mission isn't to convince the world that your product is needed to create a product that answers a question, solves a problem, resolves attention. That's such a huge topic because we all fall in love with the things we create. One of my favorite, in fact, the quote is sitting right there behind you where you're sitting right now, many, many years ago, Andy Groves talked about sitting in his office and they make computer chips, the Intel computer chips, and they couldn't keep up. [00:14:50]

So the part in the first year is typically your problem market fit, and that doesn't require a lot of capital. It requires a lot of focus on the right problem. But then in the second and the third year, if you're doing everything, you get to a point where you figure out what the real product is, and now you're going after the product market fit. And a lot of times people mix it, people swap, they fall in love with the product so much that they forget that they're solving a problem and it's all about them now. [00:14:00]

I think every startup person needs to hear and recognize that you need a great partner. At the end of the day, she said, here's what I'm going to do. I can see in your eyes that you want to do this, and if you don't do, you're going to regret. I'm like, yeah, that's true. And she said, well, here's what we're going to do. I'm going to go find a job so you can do this thing, but the biggest thing is this. You're going to have one ear and in one ear show me this thing has legs, otherwise you're going to go find a real job. [00:18:04]

The biggest reason was it put fire into it gave me a timeline, It gave me a timeline. It gave me a recognition that she's putting everything on the line for me. I need to do deliver. This is no longer a dream that people think about on a kitchen table thinking, I wish I started a company. This has to work to me. This is my chance. And if I don't give my a hundred percent right now, and if I was having a hundred percent, I need to give 200% now because she's doing what she needs to do even more than, I don't know if I could have done that for her. [00:18:48]

So when I talk to business leader or just leaders are oftentimes it's men who are in a situation that we were where you've asked your wife to follow along with something that may or may not pan out. And I liken it to handing, and let's just talk in terms of traditional family to make it simple, handing our wives a big rock, and we say to them, I need you to hold this. Now here's the thing, because even in a somewhat healthy marriage, certainly a healthy marriage, a partner, and this can be the woman handing it to the husband, it can go either way. [00:21:41]

When somebody hands me a rock and says, this is heavy, I need you to hold this. If you'll tell me how long you expect me to hold it, I can get there. If. You hand it to me and leave me there indefinitely. And three months later it's like, just three more months, just three more months. Well, eventually, no matter how mentally committed we are or even emotionally committed, we wear out there is a limit. So the smart thing about the story you just told that I hope our listeners will take away is by putting a date out there, you said to her, I'm asking you to carry extra weight. [00:22:24]