Making your customers your secret weapon (with Highspot's Oliver Sharp)
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Hello acquired LPs and welcome to another very special episode of the LP show David and I are here today with Oliver sharp. Hello, Oliver. Hello. It's great to be here with you guys I've spent many many hours listening to you on your podcast. So it's great to be a guest as well

Well, Oliver is, for folks who've never met him, one of the most thoughtful people. Every time I get into a conversation with you, I leave feeling smarter. I explore topics I didn't expect to explore. And we could be talking about anything here on the podcast today. And I'm sure it would make for great content. And so I think actually you and I were first chatting at the Convoy live show when you came. And I was like, oh my gosh, there's so many episodes in here. What direction should we go with it?

I think we'll get a lot into Oliver's background, but just as a quick aside, they are Seattle's most recent unicorn. He is the co-founder of Highspot, a great local company here that we're going to talk all about today, and a lot of the different sort of strategies and tactics they use and lessons learned over the years. Congratulations, Oliver, on the big financing round announced earlier this week.

Yeah, we announced on Monday, and it's a really exciting moment for us because we have some really big strategic goals that we're trying to achieve. And this gives us a little more fuel to go after them. It's awesome. It's awesome. All right, well, I'm going to turn it over to you a little bit. You have a sort of storied background, big company life at Microsoft, startup life and back again. You were a TA for Bill Gates. Is that right? A technical advisor? Yeah.

So Bill has a technical staff, which traditionally was one person, the TA. And when I was on that staff, there were two of us. There was Eric Rutter, who was his TA, and then I worked with Eric. So the two of us kind of supported Bill in a variety of ways. And that ranged from investigating technical questions,

You know, we were kind of an independent voice that didn't have a stake. So if multiple teams were having challenges with each other, you could send us in and we didn't, you know, we could be sort of the ombudsman, if you will, and go dive in and pull together a way of thinking about it that didn't adhere to any one particular team's point of view. We also ran, for example, his Think Week twice a year.

And we also attended many or almost all of the Bill G reviews, which are kind of a famous institution at Microsoft at the time where every team in the company basically would come in and present to Bill often for many hours and go deep into their particular technology or their industry.

So we got a pretty amazing view of all the different things that the company was up to. So cool. And this is like a pretty storied function at Microsoft. Oliver, I feel like that's a good place to start over in sort of Microsoft land a little bit. How did you end up joining Bill's technical staff? And then, you know, what is the tour of duty on that look like in terms of number of years? And what'd you do afterwards? Yeah, so my history with Microsoft is actually kind of funny. I've worked there three times.

I was an intern in 1984 when the company was behind the Burger Master in Kirkland. Then they bought the first company that I was involved in getting started, which I also did with Robert, who's the CEO of Highspot.

And we were grad students together. And then we did a startup out of grad school and Microsoft acquired it. So that's how we ended up at Microsoft. Then I left and did another startup, a second startup. And then Robert got me to come back to Microsoft for a third time. So I kind of got to see the company at three different stages in its evolution. And I got to see how the culture evolved.

When I was there the second time, which was after the acquisition, I got to know Eric Rutter, who was our GM when we first joined the company, our general manager. For those who don't know, Microsoft traditionally divided their world up into product units, and then product units reported into a general manager. And so he was the general manager over a set of product units, one of which was the one that I was in. For listeners who are maybe a bit younger, I mean, these were the days when

Microsoft dominated everything in tech, right? This was pre-antitrust days. Everything that today you imagine being scared of a FANG company entering the space, that was all condensed into one company, which was Microsoft, basically, right? Yeah.

Yeah, absolutely. It was the second time I was there was kind of the, you know, the glory days, if you will. It was we joined in 96 and I was there from 96 to 99. So that was, you know, after Windows 95 shipped and really started to basically dominate the world. And it was the peak Microsoft, if you will. I was also there actually when the antitrust suit happened.

And that was a really, really, really tough time for the company and for Bill. And it was interesting watching how he compartmentalized the just brutal experiences that he had through that suit. And then he would come in for a review and he would be just on the review and able to focus on the minutia of some chip design problem or something literally minutes after having just gotten completely brutalized in public.

It was a really strange and hard time at the end for the company. And at the beginning, it was kind of the glory period, like you said. And that was a time when everybody was very, very nervous about the company. It was, as you say, almost the union of all of Fang at that period. And then that obviously changed pretty dramatically later on.

You joined Microsoft via acquisition. Just give us a sense of like the size of the company at the various times you were there. Because I know when I was there, I think this was 2012. It was an 80,000 person company has to be even bigger than that now. How many people were there in what 84? In 84, I think it was 600 people. We had a very small campus. We

You know, not coming back was a good life decision, but probably not a good financial decision, but that's okay. Then when we got acquired, I don't remember exactly, but it was certainly in the many thousands. I think several thousand feels about right. I'm not certain of that. And then when I left to start Highspot, it was about 100,000. So, you know, I got to see it small and scrappy when it was still, you know, massive.

selling Microsoft Basic and little green binders and that sort of era of the company. And then I saw it during the Windows 95 kind of period where it really kind of took over from an operating system point of view. And Office was a thing, certainly, but it wasn't the juggernaut that it became. And then I kind of got to see, let's call it mature Microsoft during the early part of the 2000s.

when it really lost its dominance of the industry.

And it missed a number of the most crucial trends in the industry, one of the most obvious being mobile, but also really was late on the cloud, although they caught up in not completely, but they made a huge move in cloud. And now, of course, they're very strong in cloud. They've done a terrific job kind of recovering from that. But they started late and they never really got social at all.

And so, you know, it was a time when the company shifted from, I call it almost an accidental consumer company. I'll leave out Xbox because that's a kind of its own little world. But if you kind of think of what I think of as core Microsoft, kind of Windows and Office and that world, that world, it won consumer by accident. It was almost like Zoom. Oh, yeah, that's true. Yeah, 100%. And what happened was that they won the business world, right?

And the consumers were kind of, you know, had no choice because they were so dominant and all the apps were on Windows that they won the consumer. But they didn't win because they were brilliant at consumer. They won because they were brilliant in business. And then they sort of accidentally won consumer. And then when the consumer world was transformed by mobile, they were just not equipped to navigate that transition very well.

Hmm, that's great perspective. To revisit my original question, listeners, I bring it up because a lot of the times, especially as a startup investor, there's people leaving Microsoft to start companies. And there's sort of two classes of that in this day and age. There's the, you know, young hungry person who's only ever experienced it as a big company. And then there's the senior executive who's leaving to start or join a startup, who probably also has only experienced it as a big company. And Oliver, you know, you've been talking about this for a long time.

This 600 number, I'm laughing because I think Highspot is actually more people than Microsoft when you first encountered it, which is a crazy thing to think about. Like Microsoft was effectively like a 2020 Series C or D company at that point. And that's the level of like entrepreneurialism I want to instill in people that sort of you and people at Microsoft had to have at that point in history. Yeah.

Even in the second time in the 90s when Microsoft was kind of riding high and it was much larger it still had this kind of ferocity

that I think people who don't know the company except in its more mature phase, they never saw that side of the company. But one of the things I really learned how to ship software at Microsoft in that period when product units, you know, product units that built products that changed industries were like 30 people.

Now, there are 3,000 people. And when you're shipping a product with thousands of engineers, it's a very, very different problem than when you're shipping with 30 or 40 or 50 people. A traditional product unit was actually smaller than 100. And actually, I've done a little research. And if you look at primate and pre-industrial human structures, they tend to all be about 50 to 100 individuals.

So chimpanzee troops are often about that size. Pre-industrial hunter-gatherer troops were about that size. Obviously, many of you know of the Dunbar's number research that you can keep social ties in your head to around 100, 150 people. And I really think there's something really meaningful there where at that size, you can have a unit cohesion and a singleness of purpose that is very difficult to maintain at scale.

And Microsoft in its heyday was very, very good at that. It was absolutely relentless. It was not a touchy-feely, warm and snuggly place at all. It was a very hyper-aggressive culture. And there are things about that I don't like, that we did not want to bring to Highspot. But there was some magic in that too. And one of the things that I really liked about the product unit was

is that a product unit of 100 people would have one admin and the product unit manager, and everyone else followed the Roman Legion model, which is everybody marches, everybody fights. There wasn't overhead in a product unit, traditionally. It was very lean and very tight and very focused on execution.

And that's something that I tried to learn from and apply as appropriate in other contexts. Yeah, that's so great. I love all this history and context because it's so not what Microsoft or frankly, you know, I think any of the FANG companies, except maybe Amazon are today, these massive teams.

Obviously, you can't argue with a lot of the innovation that the fan companies pump out, but the rate is not what Microsoft was in this. I mean, you guys were Internet Explorer, Windows Media Player, all the server and tool stuff, the .NET framework, like the company was shipping so many important products.

It's true. And your point about Amazon is really interesting. It's something I've never worked in Amazon. I have friends who have. So I've studied it a bit, but I don't claim to really know it the way I would if I actually experienced it personally. But one of the things about Amazon that I think is really magical is that they can create small things that grow to be big things.

And when I was at Microsoft the third time, one of the gigs that I did was I managed a small product for the company. It was a product that when I first took it over was about a $70 million a year run rate product. And in the course of a couple years, we turned it into $160 million a year run rate. What was the product? BizTalk server.

And as a startup, that would be an amazing, heroic, fantastic accomplishment. Exactly. IPO. Exactly right. At Microsoft, we were this irritating nuisance that everybody wished would just go away.

And we basically only had one competitor, which was the rest of the Microsoft product portfolio. If we could get anyone in the field to actually care about the product and sell it, we could have tripled, quadrupled, quintupled the revenue. But the problem is that we were in what I call the Microsoft death zone.

which is if you're a little product, a little initiative, you can be championed by an exec and you can be protected by the exec so that you can do your work. If you're a really big product at Microsoft, you can obviously benefit from the incredible scale and the execution engine that the machine has. But if you're in the middle, you're too big to be protected and you're too small to matter to the field,

The field being the sales organization, right? Yeah, exactly. If you put yourself in the position of a seller, you've got this portfolio, you're trying to hit your number, and you've got this product. It's complicated. It's weird. It's hard to think about. You have to go deep in it. Why on earth would you waste your time doing that when all you need to do is sell a few more licenses of office? And so if you just think about it from the seller's perspective, it makes complete sense. But that death zone is incredibly hard to navigate, and very, very few products make it through. Yeah.

Fascinating. You have to be really intentional as a company in order to sort of protect that and make sure that something can actually leap over that chasm. I mean, I remember when I was there, you can't even propose an idea without someone saying, can this be a multi-billion dollar business for us without cannibalizing any of our other stuff? And you're like, I don't know. I guess I'll just stop talking about it. Yeah.

And that's exactly right. That's exactly the challenge. And I give Amazon a tremendous amount of credit for being able to build and birth these small things, even within the context of an enormous company. It's very hard to do. And Microsoft is not especially, or at least when I was there, wasn't especially good at it. And so that's why big companies often have to acquire companies.

because they have to wait for someone else to get through the death zone and get big enough so that you're relevant, and then they can acquire you. And actually, sometimes people criticize the price that companies pay for acquisitions, but sometimes that's actually the only way that you can get new businesses to survive under the umbrella of the company is to wait until they're big enough to matter and have a certain amount of heft to them and then bring them in. And it's still, of course, incredibly hard to make acquisitions work.

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Well, this is an excellent transition. You've talked about, you know, the field caring about selling your product. You've talked a little bit about sort of customers here. Tell us about Highspot. What are you doing? You know, give us some some high level metrics on the company, the mission and how it got started.

Sure. So Highspot really emerged from a problem that we experienced ourselves. So Robert was asked by the president of the server and tools team to take over the marketing function, to basically own the business of server and tools, which honestly was a pretty strange thing to do because his background, my background is purely in engineering. We didn't have any business background at all.

And so, you know, here's the keys to a $12 billion business, you know, please don't screw it up. It was kind of a non obvious move, but that's what they did. And so when Robert went over to run that side of the house, I joined him as an IC doing kind of strategic work and just kind of helping out.

And it was a very interesting experience because neither of us, as I said, had basically any background in marketing. And so I learned a lot. I discovered when we went and did Highspot that I had learned less than I thought.

Turns out that supervising people doing a thing is not doing the thing. And it's not the Roman Legion approach. No, exactly. And so the fact that we had supervised people who did all kinds of interesting marketing work did not actually mean that we knew how to do it ourselves with our own 10 fingers. We had to learn that on the job. But we did learn a lot. And one of the things we learned is just how incredibly hard it is in at least at Microsoft at the time for sellers to find what they needed.

You know, this was a time when we started Highspot, it was a time when technology had really been reinvented. When the consumer experience of software had been transformed by mobile, by the web, to a place where you had this amazing set of tools available to you. If you wanted to find a pet video with your kid, you would use the best design technology that's ever been created by humanity and you would find what you want in 30 seconds.

If you were at an incredibly wealthy company and you wanted to close a $50 million deal and you needed a case study, you know, basically, God help you. No, Microsoft, I'm sure, would argue you would use the best in class, amazing product out there that was right across the hall from you guys, right? They tried that and it didn't work very well. And in fact, the dominant form of search at most enterprises that don't have a tool like Highspot is email.

You need a case study, so you send mail or use Slack or whatever tools you're using or Teams, and you ask the world if anybody has a great case study you can use, which is obviously absurd.

And so what we wanted to do was to bring the... Hey, are you on the case study DL or no? Yeah, no, exactly, exactly. And so what we ended up doing was we took these ideas that had become incredibly well honed in the consumer world of how to create immersive experiences, how to organize content, and we brought them to work.

One of the things we did, which I really believe is a best practice, I really think is incredibly powerful, is we said, has anyone ever anywhere in any domain solved this problem? In our case, one really powerful example was iTunes, what now would be called, you know, probably Spotify. But if you ask yourself, how many 15 year old kids do you know?

who have thousands of songs that they listen to, say to themselves, I just can't find that song I'm looking for. Like, never, right? That is not a problem in the world. But why isn't it a problem in the world? Why can a 15-year-old with no IT support and no training and no help manage thousands of items?

While a highly trained, supported, expensively technology equipped professional is absolutely fails at the same problem. What's up with that? And so those kinds of questions were what led us to the design of how Highspot works, which is quite different from the way that traditional repositories work.

We obviously believe that it's a far better approach and we've seen tremendous success by our customers both as the users of the product looking for content but also the organizers of the content having a good experience organizing it, which a lot of people forget about. A lot of people think, oh well, we'll make the consumption experience good but the organizers will just kind of have to suck it up and take whatever they get. And we think that's a tremendously flawed philosophy because

Because if the organizers don't organize the content, which they won't if it's a horrible experience, then the consumption experience is not going to be good. And so we invested a huge amount of effort in both sides of that, which I think was really important for the company.

Okay, so if I could hyper paraphrase here, Highspot is a piece of software that enables sales and marketing to collaborate to get content, collateral, whatever the right set of materials is to make it easily available to customers at the right moment in time for the right customer for the right use case. Does that sound in the ballpark? That's where we started. That's exactly right. And that was the initial vision of the company. And what we discovered in the process of

trying to solve that problem was that it's actually a piece of a broader problem.

And so one of the crucial transformations that's happened to the company over the last few years is that we took exactly what you just said, the challenge of connecting the customer facing teams with the collateral they need and then sharing it with customers and being able to see whether it's getting engaged with. And we've broadened that out to the mission of helping customer facing teams be ready to have the most effective conversations with their customers.

And it turns out content is, of course, a crucial component of that problem, but it's only a piece of it. And so one of the big real transformations of the company has been to expand our scope from that initial focus on content to this much broader mission of really helping companies grow by making sure that their customer-facing teams are ready. That's the core of what the mission is today. This is one of the main things we wanted to discuss with you.

That journey and understanding that, that only comes, I would assume, from deep engagement with your own customers, right?

who for the first part of that sounds like you weren't really solving their problem. How did you do that? How did you find those first customers? How did you convince them to adopt you? And then how did you get in there with them and see that this wasn't really solving the full problem for them and build with them? Yeah. So I would kind of divide things up into three phases.

The first phase was we didn't get the initial product quite right. And then the second phase was we pretty much nailed the first product. And then the third phase is going after this broader mission. So let's talk about each phase because they have very, very different dynamics.

So in the first phase, we were really trying to get the core product right. You know, look, I'm a compiler guy and I'm an operating system guy. So my initial instincts about everything is to be completely horizontal and fully general purpose and very platformy. Similarly, all of the founders were either engineers or ex-engineers. And all of us came from that kind of very heavy platform background, operating systems and communication infrastructure and stuff like that.

So we initially built a very general purpose tool to organize content. And then we knew that sales and marketing collateral was an important use case, but we thought of it as one of many use cases and was maybe the one we would start with, but it wasn't really the focus of the company.

And in fact, we're in this space called the sales enablement space, and we'd never heard of it. We didn't even know it existed when we started the company. Which I think is common, by the way, especially for someone who ends up winning a space. Like we were talking with Wade from Zapier. It's like, no, no code wasn't a thing when... And same with Vlad from Webflow. And when we started the company, even five years in, I think someone coined the term and suddenly, boom, there we were in the square of the center of it. Exactly. It's very interesting how...

software categories and where you fit work out. I have stories about that from my Microsoft days too, but let's stay focused. So there we are with our nice horizontal platform. And we would go to a marketing leader and we would say, we're here to help you. We are going to solve your search problem.

And the marketing leader would say, I don't have a search problem. I have a sell more stuff problem. And so but there's a fine individual down the hallway who works in IT who would be happy to talk to you about search, which I don't know anything about. And it's not my problem. Now, of course, it turned out that they actually absolutely had a search problem. But if you expressed it to them in that framework, they didn't resonate with them at all.

And so we had to figure out how to talk to business leaders. And then the second piece was that we had built a horizontal platform and they wanted a vertical solution. And so we were lucky that sort of the hard part of the vertical solution turned out to be the platform we'd already built. Thank heavens. Did they tell you that they wanted a vertical solution? Did they tell you that directly? Or did you have to kind of read the tea leaves on that?

No, you have to read the tea leaves. One of the things I like to say is that in the early days, we learned the most from customers who said no. Today, we learn the most from the customers that are actually on the platform and engaging for thousands and thousands of hours on the platform and telling us all kinds of detailed things about it. But in the early days, our biggest problem was that we hadn't built the right product. And the people who said no were helping us realize that.

And one of the things we were really adamant about, so Microsoft has a sort of a mixed track record of listening to customers. It's very good in some ways at listening to them and really bad in some ways. And one of the things that we wanted to really make a cultural norm in the company is we did not want to be religious and insist that we were right and the customers were wrong.

And so we tried to listen really, really hard to what they said. And customers will tell you what they need, but they won't tell you the thing that it is. They'll tell you the problem that they have.

And your job is to figure out how do you build a product that solves the problem that they have. Sometimes, occasionally, they'll tell you exactly what they want and they'll be right. But often, what they say they want isn't right, but the problem they have, the need they have, the unmet need, that is always right. And so you have to listen incredibly hard and then think incredibly hard about what would solve that problem. How do you know when they're dead on?

Is there something you can pattern match off of where you're like, oh, this is a good product manager I'm talking to so that they're actually describing the right solution to me? And if you're talking to someone who's maybe not a product manager or doesn't have those tendencies, you can say, okay, I should really only listen to the problem that you have and not your proposed solution. It's a great question. And I don't think there's a perfect answer to it. But let me tell you what worked for us. What worked for us was to be them.

When we first got customers, somebody had to go take care of them and nobody else was up for it. So it turned out to be me. And so I became the services team and I launched all of our initial customers and I was also our support team and I answered every ticket and I spent hundreds and hundreds and thousands and thousands of hours with the customer teams building their solutions with them.

One of our earliest enterprise customers that we had, I ended up looking after we launched. And it showed that we had a user that I worked as in their environment to help them out. And I had logged into that user 600 times as part of the process of launching them. Wow. Like in their system. Yep. And so there was not a lot of daylight between their experience and my experience. I knew...

What their experience was because it was my experience and when I walked into The triage meeting with the other folks on the company and I was elbow deep in axle grease there was not a lot of like abstraction in my complaints about the product and what I tried to do was whenever there was something that was incredibly tedious to do in the product I just did it myself so the customer didn't have to and

And so, you know, we didn't have a lot of tools in that very, very early time in the company to organize content. You were a horizontal platform and...

But when I went into that triage meeting and I said, damn it, we've got to build the following features. This was not an abstract argument. This was an argument that I was absolutely prepared to die on the hill for. I found that the best technique for me, and I won't say this is the universal answer, but the best technique for me to know when the customer was right was to be them.

And do you still do this? Like, do you still feel that sort of as a founder of the company, it makes sense for you to do this? When does it? When doesn't it? I absolutely still do it.

We now have a big team of folks on the services team. So obviously the vast majority of customer support is done by other folks, but I still engage in the toughest problems when people get stuck or when we're talking to some of our largest potential customers or actual customers and they want someone to come in and kind

kind of work through a design or give them guidance about best practices based on hard-won experience. I'm still very engaged with many of our customers on that front and that is what keeps me honest. That is what keeps me from floating off into the, you know, the ether and not understanding what's really going on, what's the real struggle that people are facing day to day.

And so one of the things that I think is a huge danger, and it's really hard to do as you scale, but a huge danger is to become detached from the work.

And it's why I feel so strongly like I still am writing queries against our object model and trying to distill insight from what our customers are doing based on the data. I know our schema very, very well because I write queries against it all the time. I still am involved in very detailed design reviews, like down to the pixel level of our design reviews, not on everything.

And, you know, it's a tricky balance because you obviously don't want to be some micromanaging pain in the neck. So everything has to funnel through this choke point and you slow everybody down.

But on the flip side, you're making crucial decisions and you better know what the heck you're talking about. And if you don't get down to the ground, if you don't get down all the way down to the ground, then you don't know what's really happening. Eric Rutter had this thing he used to do that was really funny. He would read a bunch of check-in mail. So he would go to the code base and he would look at the check-ins and he would read the check-in mail.

And then he would be talking to somebody and there would be some delay or whatever, some issue. And he's like, well, how's that going? And then they would say something. He's like, gee, that's interesting because I just read the check-in mail from the engineer who's working on it. And that's not the way it is at all.

Now, there's sort of a gotcha element to that, which I don't... And he's talking to like a PM there, whereas he's actually reviewing the code from the dev. Or a product unit manager, or a senior person. He knows what's happening on the ground. And I don't love that sort of gotcha element. That's something I'm not, you know, that's not really our style or our culture. But the notion of finding a way to stay connected to what's really happening in the trenches on the ground in real life is...

is just this incredibly challenging thing to do at scale. And it's super powerful.

And it's really what Bill G was trying to do with his reviews. Like those reviews were grueling. I mean, I was on the other side of the table for some of them. I helped organize a couple of them and they were like four hours long. These were not like meet and greets. These were very, very detailed, very granular deep dives into the product. And that was his approach to trying to keep track of what 100,000 people are doing, which is an incredibly hard problem.

Obviously, we have a much smaller problem than that. But it's, you know, finding those ways to stay connected, I think, is really magical and really hard. And do you feel there's certain things...

that only you as one of the founders of the business sort of has permission to do or has moral authority to do. I'm thinking of what if you go and you're talking with a customer and you realize, shoot, this is the third customer that said a thing that means we're super wrong about a big direction of the product and I now need to do something big and momentous about it.

I would imagine if I'm sort of like on the ground solutions architect working with a customer, I'd sort of just work around our problem as a product because, hey, that's the way it is. How do you think about that? It's a great question. It's something I actually think about all the time. And obviously, I've been a founder multiple times. And I also got to watch Bill operate as a founder at infinitely greater scale than the companies I've helped to start.

And I do think that founders can do things that are very, very difficult for other people to do. And the reason why, at least in my experience, is that there's some properties, some qualities that founders have that other people don't have. Specifically, they were there when the cultural norms were defined. They might even have defined them.

They can question things other people can't question. They have a level of moral suasion over the organization that other people don't have. Founders mostly don't get ignored. They might get managed. Bill got managed a lot, but they don't get ignored. And they also sometimes, depending on the dynamic, they often don't have any career ambitions.

There is no career move for me. I'm it. It is what it is. So I can be really annoying, and I don't have to worry about the cost of annoying people the way that other people worry about it. And Robert and I have worked together for most of the last 23 years, and we've been through a lot together. And he knows that when I come and I'm annoying about something, it's because I'm passionately believing that that thing is really important.

And there's no personal angle on it. It's this is important for the company and we have to do something about it. And so I do think that founders often are able to do things that are really, really, really hard for others to do. And I think it's why I think it's died down a little bit. But for a while, it was very fashionable to have a chief customer officer, a CCO.

And I never really bought off on that very much because what I found was that it's a role that often is this overlay role that has no power.

And often the worst thing you can do is, I think, is bring someone into the company and say, congratulations, you own the customer. And then they'd go off and they'd build these nice little user experience journey maps, which are actually really beautiful. I love the journey maps. They're very cool. But they can't do anything about them because every organization that needs to change has a billion good reasons why they can't do the thing you want them to do. And you have no power. And so I think those roles are very, very hard to make work.

But I think a founder can play that role in a way that is very hard for other people to do. And it's not because the founder is necessarily smarter or whatever. It's because they have those attributes that can't be granted. Those are not qualities that can be granted to anyone else.

And so that's why I think it can be an incredibly powerful and leveraged role if somebody is willing to step up and do it. And I think it's a really big missed opportunity in the startup culture in general that I haven't seen very many founders who are willing to step up and be that person. It's funny as you're describing that, it's making me think of...

Yeah.

That was her role. And, you know, famously, she was like super tough in the organization and the other management didn't know what to do with her. But I think she was doing exactly what you're describing. I think you're right. I listened to a podcast about her. I think it was How We Built This, I think, with Cisco that was really good. And

She definitely had the pain in the ass part down. She sounded like she was like really, really rough, but she was a ferocious advocate for the customer.

And I think that there's magic in that. I do think you want to also hopefully blend that with a little bit of diplomacy in terms of trying to achieve the goals, because otherwise it's very easy to get organ donor rejected by the organization and they just spit you out. But if you can combine that fierce commitment and that passion for the customer experience and that knowledge of what the customer needs,

with the ability to bring change to the organization in a hopefully graceful way, I think there's magic there. This is a great segue into a topic that I've been wanting to ask you about because we've had multiple previous conversations on this. The role of services in a technology company is

I want to explore it from two angles. One is business model, where I think a lot of people are afraid to have two services of a heavy component, because it's obviously a lower margin business. Now, it may actually solve the customer's problem better, especially in the short term, because you do have someone on the ground doing exactly the thing that sort of needs to be done with them. So there's the business model side. The other one is as a learning machine.

And I'm curious to get your thoughts on using services as a heavier touchpoint to build product. Yeah, it's a great question. I'm going to take it as kind of two questions. I think they're both really interesting to Nulon. I've thought really hard about both of them, and I have very strong opinions about both of them. I know that will shock you. But I'll start with a point of view that I think is really important, which is I think you have to correlate your customer touch model to your offering. So let's take one extreme.

Google search. Google famously doesn't really like talking to their customers. But they built this product, which was a box in the middle of the screen. And what you did was you typed anything you wanted into that box, and you got magic. And it worked.

It's an astonishing technical achievement. It's really one of the great technical achievements of the last 50 years, I believe, is what they were able to achieve. It's really quite magical. But it meant that they didn't have to talk to their customers at all. They didn't want to talk to their customers. Their customers didn't really want to talk to them. They had a box. You go to the box. You type in your words. You hit return. And magic happens. It's good founder market fit. Who needs a customer service team, right? And so...

That is an offering that needs no support. But our offering isn't like that at all. When you think about finding information, let's take the initial focus of the company of finding content. There's really three ways you find content in the world. There's three modalities of information retrieval, if you will. One of them is search. One of them is browsing. And one of them is discovery or recommendations. So either you navigate through a carefully curated experience or

or you search across all the content, or the content comes to you. And if you think about all the different content-like experiences that you interact with, they're usually mixtures. So if you think of Amazon, for example, in Amazon, if you want to find a TV, what do you do? Well, you probably go in, you type TV on the search box.

And that search, obviously. But there's a lot of TVs and Amazon doesn't know which one you want. And so what they do after you've given them an expression of intent is they take you to a browse experience where you can now start filtering on the left hand side and say, well, I want an OLED TV. I want a 65 inch OLED TV. I want it from Sony or, you know, whatever. And now you're browsing. And then when you look at an individual TV,

They say, oh, people who looked at this TV often are interested in these other TVs. And so what Amazon does is it uses all three of those modalities woven together. Now, we do all three of those modalities. And search can be a, as we talked about with Google, a zero customer touch experience because the product can do the work through ML and all sorts of techniques, which are super cool, but won't go into. But in our world, roughly half of the content is found through search.

The other half is found through browsing. And browsing is not a technology problem. Browsing is a human problem. And to create a rich and engaging and easily navigable customer experience, our customers don't know how to do that. They've never done it before. Most of them.

And this is like setting up the taxonomy, like figuring out even what the categories should be to enable them to browse through. Exactly. And we have many features. We can let you create custom pages and create rich customized experiences and role specific navigational paths and filtering and browsing and all of these other tools. And they don't know how to do it. And no piece of software is going to magically make them know. Right.

Yeah, just like you're trying to buy a TV. Most people are like, I don't know what OLED means. I don't know what, you know, these features are like, help me, Amazon. Exactly. And in Amazon's case, the organizers of the content work for Amazon.

So there's a set of people who think insanely hard about how do you organize TVs and they're experts in taxonomizing, you know, goods. They're experts in giving you good ways to create taxonomies that navigate through billions or millions and millions of products. But most companies don't have any experts like that. That's not their job. So how are they going to create this rich, wonderful, immersive experience for their people without any help?

So in our case, they need our help. They welcome our help. And we give them a lot of help. And so in our particular example, our offering requires high touch, my opinion. And sometimes

So we kind of stumbled into that knowledge by getting a customer and then you know We had to spin up an environment and they didn't know how to do it and well heck I didn't know how to do it either because we never done before so I had to sit there with them and say well gosh, how do you create a high spot environment and So we basically invented this whole methodology for how to do it which we've now run, you know a thousand times and we've had with customers that are

giant global corporations with many tens of thousands of employees down to, you know, little tiny companies with 20 or 30 sellers. And we've spanned that entire gamut so many times that we now have a very honed methodology. But we built that methodology by doing it with them. And we share that methodology and help them walk through that. And we care very passionately that they have a fantastic, amazing, wonderful experience with Highspot. And we invest fiercely in that.

Now that has a price, a heavy price. It has a financial price, meaning that our margins are worse than other companies that don't make that investment. And it has a scaling price, which means we have to go hire these fantastic, wonderful, terrific people at scale, which is super hard to do because they're kind of unusual people. You can't just go find them at other companies straightforwardly because other companies don't have our model.

And so we kind of have a very eclectic group of people that come from all sorts of different backgrounds, but have that right mentality, that right spirit, that passion, that commitment to the customer of having an amazing experience and going deep in the product and loving being the experts. You know, that's sort of the the personality of that team. You know, I like to think of it as the person who helped you with your math homework. Right. Like that's our persona.

And it's the person who wanted you to love math like they did. I love that. One area I want to double click on is I assume this isn't, when we're saying services here, this isn't like free customer service. This isn't like, sure, you are a SaaS subscribing monthly customer to our software. Therefore, call our people. You get the premium customer support tier. Yeah.

Right. How do you actually structure that as a company and think about it from a business model in terms of like, hey, there's consulting revenue that we receive for helping people with implementation versus their SaaS revenue that we receive for them just, you know, using the search box without any touch? Yeah, it's something we have thought very hard about. And it's something I'm very passionate about. One of the common ways you offer white glove service is you charge by the hour.

And I hate that model. It doesn't really set up the right incentives, right? Every time someone's on the phone with you, like, I don't know if you've worked with lawyers much. I work with lawyers a lot. And of course, we have in-house lawyers. It's different. But if you work with out-of-house lawyers, we have terrific law support. But every instant you're on the phone, you like watch the dial ticking and think about the amount of money that you're spending. You know, every minute it's like tick, tick, tick, tick, tick, tick. You watch the dollars go out the door. Yeah.

And even though they're lovely people and they've given us terrific support, and I think very highly of them and would recommend them to other people. I'm talking about Perkins Coie, by the way, who's our external counsel and obviously a supporter of the show. They've been terrific. But boy, that's the dynamic. It's inherent in the relationship. And I did not want that dynamic with our customers. And so what we do is when you buy Highspot, you buy services with the product and

And we don't punch a clock. We don't keep track. We hire people who don't want to be on the clock. And in fact, many of them come from the consulting world. That's a very common group of, you know, place where we find the kinds of people who have the mindset that we like. And one of the things that I think they really like about working in our team is that the clock's gone. Your job is to make the customer successful, period.

And so how do you scope the work, if not by hours, then when someone says that, you know, you successfully sell to them and they're like, great, let's sign a contract. I'm in. I assume there's some minimum amount of years of recurring revenue or months of recurring revenue that they sign up for. And it comes with the services package. How do you scope like, hey, you kind of you used up all the services, time and effort and resources that we expect? So we estimate that.

And we're pretty good now at estimating. But if we're wrong, we suck it up. And it turns out that most customers, not all customers, but most customers will respect the relationship. If you enter into that relationship with a sincere desire to make them successful, and you give them a scoping of what you do, most people will meet you there.

And sometimes you run into a tough spot where you have to basically over-deliver or you have to have a tough conversation. And we mostly over-deliver. And if your team's big enough...

Then you have some resiliency to be able to cover the cases where you have a really hyper demanding customer. But sometimes you have to escalate and you have to bring in, you know, a senior person to say, look, we are here to make you successful, but we're not an infinitely elastic resource and we have to draw the line here. We don't have to have those conversations too often, but we do have to have them sometimes. There's a nice dynamic that you guys probably have where, um,

At the end of the day, as you said, you are sales enablement software. So the more success your customers have, the more sales they're going to have, the more sales and sales adjacent hires they're going to make, the more high spot they're going to buy, right? 100%. And so up till now, we've spent some time talking about the price. But now let's talk about the benefits. The benefits of the kinds of relationships that we've been able to build with our customers are insane. Customers got us our funding.

Yeah, I saw that in the sort of topics that you sent over before the show to discuss. Is there a story here? Yeah. So let's take our D round as an example. So a D round is a growth round. And so basically what growth investors are looking for is a pattern. They have a particular kind of company they want to fund. They have a particular set of metrics they want to see.

And they want to know whether customers are being successful and whether you're going to get the retention and growth that you need in order to justify the investment. So the way that at least our growth investors went at it, and I've never been involved in raising a round like that before, so this was all new territory for me. What they did, which was kind of fascinating to me, is they didn't talk to us at all. They were sort of tracking high spot.

And they said, okay, we're just going to go and pick 25 companies that are customers of both Highspot and your competitor that we have relationships with. And we're going to go ask them. What do they think? Did they tell you guys that they were going to do this or they just did this on their own? Nope, they just did it. And they went and built this really detailed analysis because, you know, they're financial analysts. They're like super wicked smart about analysis. And so they just did an analysis job on us and many, many other companies, of course.

And they went talk to the customers and they said, well, what do you think of this high spot thing? And how's your relationship been? And are you going to renew? And like, and then they did the same thing with our competitors. And then they basically came to us and said, we are very interested. And then they wanted to see, you know, do we have horns sticking out of our head? And can we speak, you know, rationally and not be idiots. But fundamentally, the majority of the decision was based on talking to our customers, not to us.

Another thing to keep in mind is that especially early on, but actually forever, but especially early on, if you want to get an enterprise customer, what are they going to do? They're going to talk to other enterprise customers. And so having referenceable customers who will sing your praises and talk about how gloriously successful they've been and what a great experience they've had is magic, is gold. And then another factor to keep in mind is enablement is a new field, right?

And in new fields, most people aren't very experienced. And therefore, every company that's creating an enablement team wants to go hire someone who's experienced. So people move around a lot. And so if you're a solution owner who had a great experience working with Highspot and you go to another company, what are you going to say? We got to go get us a Highspot.

And so many, many of our customers came to us by having solution owners who moved and we had invested often hundreds of hours in our relationship with that person. And they said, well, of course, we're going to get high spot, obviously. So that's a key way we spread. And so, yes, there's a price. Oh, and also one more business outcome is we have incredibly high retention rates and growth rates.

partly, we hope, because we're helping companies grow, to your point earlier that you made, that they grow and then, of course, they buy more high spot. Also, they see that it works in the part of the business maybe that they started with and then they expand internationally or they expand to other roles or whatever it is. And so I believe to my toes, in my heart, in my soul that

that our relationship with our customers is one of the greatest assets we have and one of the most important kinds of fuel that fueled our growth. It sounds so obvious when you say it. Anybody who's being any more transactional than you is going to lose in the long term. It just feels like such a no-brainer. Like, well, if your churn is higher, then your LTVs are higher. And eventually you're going to... Like a market is finite. So you are going to churn through enough of customers that they and all their friends will have...

heard that you're a high churn product and they won't adopt. It seems tautological that this is the way to do it. And yet it's really hard and it comes with all these costs. Like it really does come with, you know, high both mental costs of needing to like spend so much time and energy hiring the right people to be these customer facing roles that aren't just selling, but then, you know, implementing, supporting, and we'll get to customer success. I want to talk about that too. But like the actual dollar costs, like,

It takes a much longer time to build a company to scale like this than it would if you were trying to have no customer touchpoints. Absolutely. If you decide you want to do this model...

And I am an absolutely ferocious advocate, fierce advocate of this model for products and services that merit this kind of relationship with your customer. So again, you've got to match your model to your offering. But for offerings like ours, the costs are very high.

The level of commitment you have to make as a company to this model as a board like it's a board level decision Whether or not you're gonna invest this much energy in your customers because it hits your margins hard. We are the cost of goods sold and We make our margins worse than other companies have as their margins but

you can, if you do it right, get such incredible benefits from it that I would advocate for this model all day long. And I will fight for it like a pit bull. It's like the Sam Hinckley quote, I always try to have the longest view in the room. I think that's an apt analogy here. If folks are listening and they're founders and they're trying to figure out when you're saying a product like ours, are there like rules of thumb around the lifetime value that a product...

generates where you can invest this much in implementation? Or perhaps when you're saying, and this is a second question, our gross margins are lower than others. What's the bucket that would be really high? And what's the bucket that this model can kind of create in ballpark terms? Sure. It's a great question. Let's take a couple different angles at it. So one angle is purely financial. Can you afford it?

And so from a financial point of view, you can think about LTV. And the problem is, if you're a startup, LTV is a very murky thing to really understand. As I think it was Maynard Keynes said, you know, in the long run, we're all dead. So, you know, you have to at least start with a fairly tactical focus as a startup. And so the way I like to think about it is in your first year of your deal with the customer, what's your margin? And it better be okay. Okay.

Now, of course, you're hoping that you can amortize that first year cost over a longer lifetime. But remember that it's not like the close relationship you have with your customer goes away. If you're an enterprise, you're always expanding, evolving, growing, you know, buying companies. You're, you know, so it's not like that relationship goes dramatically lower. So it better make sense kind of all the way through. I wouldn't focus on LTV. I would focus on, you know, your first year.

Now, in our case, we never sign a contract except in extremely odd situations for anything less than a year. Usually it's one to, let's say, three years is kind of typical for us. So we can forecast pretty well. You probably don't want this model if you don't have at least a one-year contract would be my guess, or at least it's a harder sell. Let me say it that way. If you're a bottoms-up credit card SaaS company, definitely.

You might want to think of something different. Exactly. Exactly right. So I think the first thing you want is there needs to be some predictability of the revenue because there's predictability of the spend, so there better be some predictability of the revenue.

What I would do is I would think about, okay, what's the cost and fully burden it, right? Burden it with the cost of the services person, all the support teams you have for them, their manager, you know, the whole shoot match. And then compute what is the cost of that against your ARR for that deal. And so we have a pretty elaborate, for example, capacity model that says,

How much do we forecast it's going to take per customer? It's always wrong for any one individual customer, but it's pretty good over a big enough size. And so it'll take you a little while to build your model. But a really crucial thing is building that capacity model because that capacity model will, A, tell you how to hire, which is crucial so you don't get into a crunch. We got into a brutal crunch before we had the capacity model. Crunch of not having enough capacity?

Exactly. And people were just pushed really, really, really hard because it turns out that our business is bursty. You might not expect it to be, but it turns out our burst is like February.

Because that's when all the companies have their scos. What's a sco? Their sales kickoff events. And so they want high spot in place for their sales kickoff often. You know, I used to be involved in a retail business where, you know, 50% of the business was like in one month or whatever. It's not like that. There's a big spike. So we didn't know that when we first were going through it. And so we ran into some really brutal capacity crunch in that period.

So you need to build your capacity model. That is huge because your capacity model tells you how to hire and it tells you what your numbers look like. And then you'll tune your model, you know, and keep kind of tweaking it. But if you get it in the ballpark, you can actually compute what the actual costs are and then you can eyeball it. And that will tell you, for example, what minimum deal size do you want to accept as a company?

Because it's a hard decision, right? Because the bigger the minimum deal size, that's the biggest lever you have for tweaking your margins when it comes to services, because the cost of launching a small customer versus a slightly bigger customer aren't that different. But the revenue is quite different. And so it informs your min deal size. And it also is something that lets you compute both, like I said, capacity planning. So finance can do forecasting, HR can know or recruiting can know what to recruit for. And recruiting has to happen.

happen way in advance, right? Because the moment you decide to hire someone, well, then you start looking for them. That takes a couple months. And you interview, then they start like a month later or whatever. And then you like to have to ramp them up, which in our case takes somewhere between two and three months typically for an experienced industry hire. So from the moment you flip the switch to say I'm hiring now to the moment you have a fully ramped, ready to go person in button seat is like six months, right?

And so your capacity model is what helps you get that right. So that's a really crucial piece of the puzzle from an operational point of view. Then the second component is, are you willing to make this commitment?

as a company? Like, do you have the intestinal fortitude to make this commitment? Because you don't want to make it and then unmake it. It's not like that. It's a multi-year commitment. And in our case, a lifetime commitment. And so you better decide, are you up for it? And then the third piece of the puzzle is what's your, what's your sales motion?

And what's your adoption motion, which is related? So to your point earlier, if you've got a bottom up, you know, dev product, right? Let's say you're Stripe in the early days. Well, Stripe in the early days had amazing margin because they built really cool APIs and then people, devs wrote code against them. And that was the company.

And now, of course, they're a much more complex business and they have sellers and they have all sorts of things. And one of the other things that's really interesting to me is that many companies that start bottom up, like Twilio is a customer and they're a great example because they started out with this very bottom up motion. But every bottom up company I've ever seen in the B2B enterprise space that is successful eventually turns into a bottom up and top down motion.

So many, many, many, many companies that started without all this fancy white glove stuff eventually find that they have to do it. Do you know the Twilio story with Uber? I know a little bit about it, but tell me more. I'm going to mess up the numbers, but I think I'm in the ballpark here. Uber was the largest customer for Twilio. And this was public. Jeff Lawson said this in an interview on Stratechery that...

They were spending something like $50 million a year on Twilio and IPO happens. They need to get profitable. One of the biggest things they do is say, that's the bullseye. That's one of the things we're going after, you know, cost coming across the board with this one.

Twilio had no customer relationship with Uber. There was no like, oh, shoot, call your guy over at Uber. It's like there was email support tickets of like, hey, help us with this API. But Uber, I think they even at some point had tried to assign a customer representative and Uber was like, oh, we don't really need it. It's just kind of engineers using this. And so suddenly then...

Twilio's there on their next two earnings calls having to tell the street, we didn't know our largest customer and they tried to whack $15, $20 million off the deal. And we had to capitulate with some of it. And they're explaining this publicly in their first few quarters as a public company. It's a crazy thing that happened. And so Jeff Lawson's lesson there is, I learned from the Atlassian founders that

never to hire salespeople. I called them up. Turns out they have hired salespeople. They just called them something different. We now also have the same thing. If not to push product, but actually more importantly, to have relationships with the companies that are using our product. That's a fantastic example of what you need to do in order to make sure that even a bottom-up motion doesn't

get crushed by decisions the customer's making. At some level of scale, you have to have that relationship with your customer. And you're putting yourself at fierce risk if you don't.

And so we see this over and over again. I won't list all the customers, but we have many customers that came from that bottom-up motion. But then as they achieved scale, to your point, they had to build this later. So I think that my point of view on it is it's not a question of whether you build a strong motion to connect with your customers. It's when.

But if you're a Twilio or a Stripe or a company like that, you could potentially push it off maybe until you're like a multi-billion dollar company potentially, but you're going to do it eventually. The question is, do you do it up front? And I think you do it up front if it's sustainable financially and if it's core to your motion. And then the third piece that I would also add to this is, does your customer need it to be successful?

Because no business is ever going to be successful if your customers aren't successful. Like that's not a thing. And so the question is, do they need your help at this level? And if they don't, then that's another reason that you might not do it. But if they do, then you better come up with some solution. And some companies, of course, try to outsource it through a partner network.

I'm a huge non-fan of starting that way because, and in general, I'm extremely anxious about anything that comes between me and my customer. Like the notion- And when people like to do that because they don't want the low margin services revenue, they're like, great, there's lots of consultancies that are raising their hand to do this on our behalf. They know our product well enough. We'll just shovel it off to them. That's the rationale, right? Exactly. And also scale.

Because if they can get a partner who's at, you know, global scale or whatever, they're able to do that. Accenture or, you know, the like. Yeah. Mm-hmm. Or another thing is that the premium model that consultancies have supports what we used to call at Microsoft darkening the skies with, you know, people with like people parachuting in to, you know, help out. And...

A product company can't sustain that kind of relationship typically, just financially. They don't have the scale. They don't have the people. Whereas consulting companies, that's what they do for a living. And so if it's necessary for a customer to do that, they can. So those are all the arguments for it. And I think over time, we will have more reliance on partners to share the relationship with the customer and do things that we can't do for them.

But I have an extreme level of anxiety of losing that direct relationship with our customers. So that's something I think about really hard when it comes to like the partner side of things. I like your point on the nature of the product and what the customer needs to be successful with the product to like think about AWS.

an amazing customer centric organization, a B2B enterprise product, yet a very, very different model, at least in terms of initial customer engagements than you guys with their largest customers. I'm sure they are very, very plugged into them. But, you know, famously started with, hey, startups, come use our product. You guys are devs. You know how to do this. You don't want to rack infrastructure. Just come do it.

I agree with you. I will observe that AWS is also a customer. So they too have built out a very extensive higher touch model as well. We started the company on AWS. We're huge customers of AWS.

And we didn't rely on virtually any support. So we're an example of a company that had the very low touch. And of course, we're still comparatively small for in AWS world, but their business, like these other businesses that started very bottom up and dev heavy have evolved to

to mix that model. It's not that that model goes away or anything, but that they now also have that higher touch model. And that's what we see over and over and over again from companies that start bottom up and evolve to this kind of more mixed model. All right. So you touched on something earlier that I put a pin in, which was, hey, don't assume that you're

service costs are going to go down over time. You know, you're going to continue to need to grow with your customer in some capacity. So far, we've talked a lot about like

implementation cost and of course implementation benefit. I think I'm indexing too hard on the financial side and the cost side and you're right to keep bringing it around to the benefit side. Can you talk a little bit about at Highspot about how you've built the post-sale customer engine and what the interactions are between your team and your customers over time and how you sort of break those functions down?

You know, it's an interesting challenge with our model because we have two relationships with the customer.

We have a services relationship that is very anchored in the solution and trying to make sure the solution is delivering as much value as possible. And we have a commercial relationship where we're doing things like cross-sell and expansion and all of those kinds of things. And traditionally, those two functions are combined into one, or not always, but in many companies, they're combined into one.

And sometimes that's what customer success means, although that term is used to mean a lot of different things. But that's at least one model where you blend them together. And I am a massive non-fan of blending them together. And the reason why is that I believe very firmly that if you want to get world-class performance out of a team,

that they have to have some cultural value that has primacy. There is one thing that they pride themselves on the most above all else. For example, an engineering team's primacy must be, in my opinion, obviously this is all just my opinion, an engineering team's primacy must be we deliver amazingly elegant solutions that solve a problem within a set of constraints.

That's what engineering ultimately is. You have to love the thing. Engineers don't, to quote Ben Horowitz or misquote him slightly, engineers, nobody, but engineers especially, do not sell enterprise software on the weekend as a hobby. What they do on the weekend as a hobby is they build cool stuff.

They love building things. And for them, that spirit of creation has primacy, I think, of any world-class engineering team I've ever seen anyway. Now, when you think about services, the cultural value that has primacy, for me anyway, is we want the customer to fall in love with Highspot. If you're a sales team, primacy in general has to be we, as I like to say, crush our numbers with integrity.

So it's not that you, you know, juice the numbers and, you know, crawl across the finish line and then the poor customer, you know, has to suck it up. It's that you sell with integrity. You sell the product you have. You sell from a point of truly believing that what you're selling is something that will make the customer better off. And you crush your numbers. That's what sellers have to do. And I'm not that guy. Like, that is not what fires my soul.

but it better fire somebody's soul. For me, the crucial thing to do is to have a team that has each of those values has primacy. And then as a company, you blend those together, but not as a function. You don't blend them as a function. You blend them as a company. Otherwise, you're in that chief customer officer situation you described earlier. And I think if you serve two cultural masters...

You probably are world-class at neither, but if you are, you're world-class at one to the expense of the other. And so I think you will have a very tough time finding... Now, again, I'm making broad generalizations here, but I still believe them deeply. And I think you will have a very tough time finding a team that is passionately, obsessively world-class at creating customer love,

and passionately world-class at driving their numbers. It's different personality types. It's different motivations. My team is not made up of athletes. My team is made up of people, of experts.

We pride ourselves on being coaches and experts and people who can help you be successful. Like I said, the kind of the math tutor mentality, the teacher mentality, that's the strain that runs through our team the strongest. And that's not to say that people in sales don't have those qualities. They often do, but it's not the primary one. It's not the thing that the team celebrates as what makes it great.

And I think it's really hard to celebrate conflicting things and be great at both of them. And so that's why, to me, it's so important to tease those two apart and then have ways to bring them together. And when you do that, there's challenges. It's like when you have a product team and a marketing team, right? Product and marketing bump up against each other.

And sales and marketing bump up against each other because they have different cultures and they have different values that are primary for them and they have different personas and they have different dreams. And so you have to work through that because there are going to be challenges. But if you are able to successfully blend those, I think you get a magical outcome.

That's so great. To tie that back to our earlier topic talking about founders, do you think those same dynamics apply to founders as well? Or do you think founders need to be different where all parts of the business need to light their soul on fire? I thought about this a bit.

And again, you know, obviously it's a little tricky to generalize to like all founders, but I'll just say my experience. So in my experience, the crucial thing amongst the founding team, and I should say this as someone who's never been and never will be a solo founder. I will never be a solo founder ever. It's not even on the list of possibilities. I will always be part of a team.

I think the founding team must have enough of the core passions and capabilities that are needed to birth the thing. And they have to be able to bring on people and celebrate people who are great at what they're not great at. So a good example for us is that no one on our founding team had seller DNA.

Which is incredible, given the product that you ended up being quite successful with. Yeah, it is kind of funny. I agree. And we were all engineers or ex-engineers, so we're pretty deep on engineering and product. I had been a professional dev for a little while, but then I quickly moved over to product management. And so my background was more in product management and product strategy, more than pure dev work. But then we had people who were really, really amazing devs.

And then we had a good amount of marketing knowledge. Although, as I said, it was, we were very good at strategic marketing, like big picture marketing. We didn't know how to edit the tags on our website to do SEO. And we had to go figure that out. So Robert actually had to go edit all the tags on our website to get our SEO because our SEO was horrible for a while. And he was like, oh, there's this SEO thing and we should probably learn about it. I'm like, okay, great. You know, he was like, who should do it? And I was like, I really don't want to do it. He was like, okay, I'll do it.

So he went off and figured it out. You can't get in the Forrester report unless you show up in Google first. Right. No, exactly. And so then now, of course, we have people who are infinitely deeper than any of the founders are in the thing. But initially, so the key thing is you got to have enough of everything that's essential. And the second part, which I think some founders really struggle with, is you have to value something that you aren't good at. Right.

Although we weren't especially good at sales, it turns out we were actually quite good at sales engineering. We're good demoers, but we're not good at sales closing. And so, but you have to think that that is vital and crucial and you have to love the people who love it. It seems like a pretty important part to me. It's huge. And we didn't have it.

And you also have to be as best you can. And, you know, human beings are wonderful rationalizers. And so it's very, very hard. But to the very limit of your capability as a human being, you have to achieve ruthless self-candor. You can't fool yourself into thinking you're good at something that you're not good at. If it's something that's vital to the company.

And so it turned out that we had a really good set of what we needed, but we were missing some key parts to it. And we were luckily able to find people who are terrific at the things we're not terrific at and that, you know, fast enough to allow the company to survive and grow.

It's a great answer. And it's a good segue into I have some sort of random questions that I want to throw your way that don't relate as much to everything we've talked about in this episode, but I think are really interesting. And I know some of the things you're doing, and I want you to share them with the audience. You are now leading a large org and a part of the leadership team of the whole multi-hundred person company, but six, seven hundred people, something like that? We're almost at six. We're about to be six. Okay.

Okay. And I know you're using content to share vision, updates, top of mind, and not just blog posts, but you've got a pretty rich setup there. I'm looking at a really fancy microphone. I know you've got a nice camera. Tell us about your evolution of thinking on talking to the organization as an internal influencer. Yeah, this is definitely a journey I'm on, and I'm early on this journey. So I'm going to caveat hard everything I say. But

One of the things that has really struck me recently is that I'm a huge podcast nerd. I love podcasts and you guys are prominently on my podcasting list and, you know, invest like the best and just other really terrific, super rich, super high quality podcasts.

And I also follow a number of YouTubers who I think have this really wonderful ability to connect with their audience and to educate their audience while at the same time not feeling like, you know, I'm taking a class.

And as I thought about the level of connection that I feel with the people whom I listen to and follow, I realized that it's quite powerful and I feel quite connected to them and their worldview and how they think about the world in a way that I think is often not true within a company.

I think that business leaders have really underinvested in using these incredibly powerful techniques from social media to connect.

One of the things I have done for quite a long time is I've sent out these long, very long emails that I call viewpoint mails that are essentially email blogs, basically. I'm sort of a natural blogger because I like to write. I've been an insatiable reader since I was, you know, four, and I love text. I'm a very text-oriented person. But what I realized is that that is far from being a universal quality.

There are most people, and I think especially people growing up now in this world of media-dense environments that come from being a digital native, as all basically young people are today,

You don't necessarily grow up bathing in long form text. That isn't your medium of choice necessarily. Obviously, for some people it is, but it's not for many. And there are things you can do through audio and video that you can't do through text in terms of conveying emotion, of connecting with people, of building a real sense of understanding and empathy with a group of people.

And so I've been trying to experiment with using audio and video as ways to build those connections. And I think it's a really powerful idea that is very under invested in. One of the things I've learned quickly about it is that it's just ferociously time consuming.

which, you know, I don't need to tell you that. Welcome to our world. Yeah, exactly. Duh. And we don't even do video. I mean, that's way more. Video's brutal. I recently did this little, you know, six minute video for the company. It took me like 15 hours to put together because there's just so many components to it and B-roll and, you know, just lighting and all this other stuff. And so,

You have to decide how to make that investment work. But I think there's real magic there. So it's something I'm just super curious about. And like I said, very early on the journey, but experimenting with. My next sort of random lightning round question. If you can start a new company today, and I know you can't because you got your hands full, what would it be? What do you think is interesting right now? Well, there was a company that we thought about starting instead of Highspot. We looked at a couple of different ideas when we started Highspot.

And I still have a real hankering for the space. And it comes out of work that I did as a grad student. So when I was doing my, you know, my PhD work, I worked on dense matrix physics simulations, basically computational fluid dynamics, finite element analysis, and climate simulation, a bunch of those kinds of big iron projects. And

What has happened since then is that we've moved a long way along this path that some people have dubbed from atoms to bits.

This notion of manufacturing, of design, leveraging simulation, physics simulations. And it's still very concentrated in the largest companies. So if you look at CFD, for example, computational fluid dynamics, it's used very, very heavily by Boeing, for example, for obvious reasons.

But it's not used nearly as much by the Boeing supply chain, which, if you're not familiar with it, is many, many, many thousands of companies building various components that go into a Boeing plane. And I believe that the democratization of simulation is something that will have a massive impact on what we're able to produce as human beings because it will radically reduce the friction of exploring design space.

And so that's something that we looked at. It wasn't quite ready yet when we, you know, did High Spot. It wasn't quite the right time. I don't necessarily need to, you know, own the space, but it's a thing that I feel a big desire to be part of and contribute to somehow in some way, because I think it represents a huge unlocking and unleashing of creative spirit amongst many, many people that could just yield tremendous benefits for humanity. And

And a great example of that, actually, I was recently listening to this cool podcast on A16Z with the CEO of Moderna. And the CEO basically talked about the fact that they designed the vaccine in like 24 hours from a file. That's insane. Like none of this mucking around in labs and squirting reagents on things and, you know, all that kind of stuff.

And people didn't think it was going to work, right? Like they were like, this new technique is actually not going to be effective in really creating a vaccine, just in simulation. Yeah, what was really interesting is they're using mRNA, and it's a very different way of designing a vaccine than is the traditional, you know, model that's been around since, you know, since Salk and the polio vaccine and all that.

And it's just a completely different approach. And it's been incredibly successful, amazingly successful. And it just has this massive promise for humanity. And a lot of it comes from this notion that you can reason about how to do immunology from files.

and not only by you know let's grind up amazon tree bark and spray it into the petri dish and see what happens you know it's just a much more intentional model and alpha fold was this huge breakthrough that recently happened where they were able to simulate effectively simulate protein folding

where you can basically take a protein, which you sequenced, and you can figure out how it curls up in 3D, which is the thing that determines whether a particular drug is going to, for example, deactivate a disease cell or something. And that was a problem I looked at when I was a grad student, and it was very early, and it sucked. I mean, you read the code, and you were like, wait, this is what they're doing? I mean, the code was like, it would have things like...

you know, okay, we're going to multiply it by 3.7. And you're like, why? And they were like, well, it worked. And, you know, we were at that stage. And, you know, since then we've gotten just so much better. And there's a wonderful little documentary on YouTube about the Alpha Fold experience.

And so this notion of applying simulation to some of the most important and hardest problems that humanity faces is just such an incredibly powerful idea. And it's something that I think is going to revolutionize the world in the next hundred years. And so contributing to that would be really inspiring to me. Well, I am...

certain that there is someone who's listening who heard that and thought, oh my gosh, I should totally reach out to Oliver. How should they reach out to you if that is the case? Yeah, I don't actually have a very prominent position on social media, but I'm on a few different ones. The easiest thing is to just basically send me mail at highspot. Just go on LinkedIn and just

you know, connect with me on LinkedIn is a fine way to do it. I'm a really sad disappointment when it comes to the public social media. I focus kind of all my social media efforts locally inside the company. So I would say probably LinkedIn is best.

That's great. Final question. If you have one thing that we didn't yet cover that you could leave acquired LPs with, you know, there's a group of founders, investors, aspiring founders, talented engineers, product managers, you know, the list goes on and on. But entrepreneurial folks, you know, what do you want to say to them? One thing we didn't talk about that I'm a really strong advocate for that I think is wildly under invested in by many companies.

is the triage process for making product decisions. In that meeting, where you prioritize that security initiative that the CSO is yammering on about, or you don't, where you build that scalability infrastructure that the engineers want you to build, or you don't, where you build that customer feature, or you don't, those decisions are important

your fate. So in Greek mythology, there were the moire, the fates, and they determined the fate of every human being. That triage meeting, that is where, as a technology company, you weave the tapestry that determines your fate as a company. And I think companies radically underinvest in bringing the right voices into that room.

So to use a kind of a nerdy computer science idea, there's this concept in computer science of what's called a spanning tree, which is where you have a graph of nodes and you come up with often the minimum set of links you need in order to cover the whole graph. And I think about that as a metaphor for what you need to do in that room.

And the spanning tree that you need in that room, making the big decisions, not necessarily every micro granular decision, but all of the important ones, you want to have pre-sale in that room. You want to have the buyer in that room. You want to have post-sale in that room. And that's the user and the buyer both who are quite different people and have quite different perspectives. And you want them both represented.

You want the business and product strategy represented in that room. And you want the engineering implementation experts represented. And I think very few companies achieve that spanning tree of knowledge in that room. And the way we do it, and again, that's just one example, is we have a four-hour block every week where all three founders...

And the core people from the product leadership team, like the head of product management, head of design, other folks like that, are in the room. And that room is where the big decisions get made. Not the little ones. You don't want to be this, like I said, you can't be this choke point. You can't be micromanaging. 100,000 decisions get made every day. And of those, a very tiny percentage of them can be made by that group. But you better make sure that those voices are heard when the important decisions are made.

And I think companies take their eye off that ball hard. And I think they pay a very heavy price for it. In that, like, when an important decision is getting made, it's kind of, it's the CEO, or maybe it's the board, or maybe it's, you know, the CEO and her, his confidants. And it's kind of how they feel that day versus this banning tree. Or it's the people way down in the engine room.

who don't have visibility into what's going on pre-sale post-sale and in terms of strategy it's the fact that the people senior people are willing to and a lot of them not just one because there is no one person who brings all those perspectives in our case i'm post sale basically the ceo is pre-sale basically

Business and product strategy is all the founders, basically, and head of product management. And then the implementation is the chief product officer and some of the key heads of engineering. And so people can play multiple roles. They can be different nodes in the spanning tree. But you need all of those perspectives in the room when you make really quite granular decisions. Like, are we going to build this feature for Acme?

Or are we going to implement this security initiative for the CSO? There is a zero-sum game when it comes to what you fund, because there's a limited bucket of engineering resources. And if they're building the CSO thing, they're not building the feature for Acme. And these are hard trade-offs. There is no right answer. And you need people in the room who can make those trade-offs and hopefully make them as best you can and hopefully get them mostly right.

And I think that most companies really underinvest in that room because if you're a technology company, that room determines your fate. Heavy stuff, Oliver. I like it as a closing place, but that is words to heed for anyone leading organizations out there. Oliver, we got to get you out on public social media more often. Like I said, I'm a dead loss on that front, but you know, there it is.

Awesome. Well, thank you so much for joining us today. Great to have you. We'll have to revisit it sometime in the future. Because again, like listeners, as I said at the top of the show, David, I know you feel the same way. Every time I get to talk with Oliver, I learn something new. And it's so fun to share it with you all.

Well, thanks. It was really wonderful to get a chance to chat with you guys. And I'm, as I said, a huge fan of the show and have listened to, I think, probably hundreds of hours of it at this point. So really fun to be able to participate with you for this session. Awesome. All right, LPs, we'll see you next time. We'll see you next time.