37: Jon Darbyshire sold Archer Technologies for $200 million, then launched SmartSuite that already has 600 customers. How does he find his first customers?

[Paris Vega]: Welcome to the first customer's podcast. Today we have John Darbyshire with us. He is a veteran to the business world. [Paris Vega]: He's been through the whole cycle multiple times. I started out running global security practice [Paris Vega]: for Ernst & Young. Then he built a successful company called Archer Technologies that sold for $200 million. [Paris Vega]: Then, not done yet. He founded and is the CEO of Smart Suite, a company he's [Paris Vega]: grown to 600 customers after two and a half years. John, welcome to the show. [Paris Vega]: Really excited to hear your story. [Jon]: It's a pleasure to be here. I'm looking forward to getting into all things first customers [Jon]: with you. [Paris Vega]: Yeah, so let's get right into it. How'd you get those first customers? [Jon]: Yeah, I'll tell you from two different perspectives, maybe going back to the days [Jon]: at Archer Technologies first, what was very different than today's model that I've [Jon]: been through. But at Archer Technologies, I started with an idea and worked for a couple [Jon]: of months just on the idea itself without writing any code. Did a lot of, at that time, [Jon]: HTML mockups, put those on a floppy disk, for those of you that remember what those are. [Jon]: And I got on a... got on a plane to Plano, Texas to meet with a company called EDS, which [Jon]: had about 110, I think 10, 20,000 employees that provided outsourcing services for IT outsourcing [Jon]: for some of the largest Fortune 500 companies that were there. And this is one of those stories [Jon]: that looking back, you didn't understand how big it was going to be until after it happened. [Jon]: But we met in their boardroom. I pitched them on an idea of how to manage governance [Jon]: risk and compliance, which was a new word at that time. Meaning, how do we secure [Jon]: all the systems at the companies that we outsource systems for? In their case, it [Jon]: was General Motors. They are outsourcing IT, and they needed a way to first understand [Jon]: all of the different assets that they needed to manage and what level of security [Jon]: to have these different assets on so they could ensure that people were not going [Jon]: to be breaking into General Motors to see confidential information. So I pulled out [Jon]: my floppy disk, put it in my computer, and said, here's... here's a new way that's [Jon]: not ever been invented before to manage governance risk and compliance as a process, [Jon]: like any other process you have in a business, like accounts payable, accounts receivable, [Jon]: payroll. Here's what that process looks like. And long story short, after about a 45 [Jon]: minute presentation, the lead person stood up and said, we're sold, we need it, [Jon]: we want it. How soon can you implement this? And I had to step back and say, we haven't [Jon]: written a line of code yet. [Paris Vega]: Wow. [Jon]: This is just a prototype, but we can deliver this in about three to four months, [Jon]: I think. We had that discussion. They asked me to come back in a couple of weeks [Jon]: to talk about the contract and the details. This is where the story got really interesting. [Jon]: I went into the gentleman's office to negotiate the contract. I don't remember the [Jon]: exact numbers, but I want to be close with what I share. We went in at like... five [Jon]: or $600,000 and said, hey, we want to sign a multi-year contract. We want to sell [Jon]: our product as a software as a service, which was one of the first companies to do [Jon]: that back at that time. Uh, so it'd be the same price every year, as opposed to selling [Jon]: it once and having maintenance and support of 15 or 20% per year. So I, I went through [Jon]: my spiel. The guy was very deadpan on his face. Like I was really hard to read him. [Jon]: And then he looked at me and he said, I counter with, uh, 850,000. I, I. For a minute, [Jon]: I stepped back in my chair and I'm like, what did I say that he just countered with [Jon]: that? And I'm like, did I mess this up, right? And he, after a while, after like 20 [Jon]: seconds of just silence, he just started laughing. And he just said, look, John, we [Jon]: need your product so bad. You just don't understand the need that we have. We need you [Jon]: to be successful. We're not gonna nickel and dime you. We want you to use that money [Jon]: to hire developers. It has to work for us. And that became our first customer. They [Jon]: signed a three-year contract that was. three million dollars. I took that back to [Jon]: the bank and said hey they're not paying me until I deliver for the first year so I've [Jon]: got about four months but I need to go hire a team. So I got a loan to actually fund [Jon]: the business. Didn't have to bring any outside capital in because I had the signed [Jon]: contract which was really key in that instance. And that started a company that went [Jon]: on today. It's the leader, the number one player in the GRC space globally. They [Jon]: do about 750 million a year in reoccurring revenue. It all started with that one simple [Jon]: conversation with the customer. You know, and what was unique about that story for us [Jon]: at the time is we didn't write any code before we approached the customer. It was just [Jon]: a prototype, basically HTML that was just linked together like a website to show [Jon]: the concept that got [Paris Vega]: Wow. [Jon]: them excited. [Paris Vega]: All right, let's back up a little bit into the weeds of that situation. So, and [Paris Vega]: I may, I just may have missed it because I was busy counting how much $200 [Paris Vega]: million was, but, uh, [Jon]: Hehehe [Paris Vega]: how did that relationship with that first customer, like how did that connection [Paris Vega]: happen? [Jon]: Yeah. So I, when I was at Ernst & Young, one of the employees that I had that was on my team, a consulting team at Ernst & Young had left prior and went to EDS. That was my connection in. [Jon]: And I contacted him early on and said, Hey, I have this idea. He said, you know, I can't be involved in this and it's kind of outside of my group, but here's the group you need to talk to. And at that [Jon]: time it was, you know, phone calls were the way that you made connections. And I, we just started calling, made a connection. They said, we're [Jon]: interested enough for you to come and present to us because it's very topical based [Jon]: on our recent contract with General Motors. We have to solve this problem. We either have [Jon]: to build it internally or work with somebody externally. What we found out later on was [Jon]: that they had tried to build it internally for a while and they just didn't have the team [Jon]: and the skill sets from a development standpoint to make that happen. So it was actually [Jon]: better for them to work with a development company to actually build that product. [Paris Vega]: Wow. And what year was this when that started? [Jon]: This was in, started in 2000. And what I did mention was that all at the same time, [Jon]: I was getting married, going on my honeymoon when they wanted the product actually delivered [Jon]: as well. And the co-founder of the company was my wife, Tara, who ran [Paris Vega]: Oh [Jon]: sales [Paris Vega]: wow. [Jon]: and marketing for us, so it was getting married, starting a new company and trying [Jon]: to deliver a product there in the first three to four months. So it was pretty hectic. [Jon]: And the way that we made it work is I basically went to. Plano to EDS, they put me [Jon]: in a really, an office like a closet almost. And I just sat in there and worked [Jon]: with our development team. And as they made updates, I loaded the updates on the server [Jon]: at EDS at real time each day. Then I went back out into the midst of the people. [Jon]: There were about 40 or 50 people on that core team. And I just started, you know, I [Jon]: got feedback all day, every day. How about this? How about that? Does this work? [Jon]: You know, tell me a little bit more about the process. I'd write requirements at night. [Jon]: The developers would. have a new batch for me in a day or two. We did that cycle for [Jon]: a couple of months. And that's what got really our MVP product to market was having [Jon]: the opportunity just to be inside of that company with the people that needed to [Jon]: do use that as part of their job. To understand how they would use it, what information [Jon]: they needed, what reports they needed. [Paris Vega]: so interesting that they chose not to build it internally. If you were basically [Paris Vega]: working there, like almost an employee, [Jon]: Well, [Paris Vega]: like while you were building it. [Jon]: our team and our company was in Kansas City when we got started. So I would just fly [Jon]: there during the week. The problem at that time was, you think about today, you have [Jon]: this large cloud infrastructure and it's easy to load product updates for people to [Jon]: see. EDS didn't have that and in their case, they were also very security conscious. [Jon]: So they let me have access to one server and one room via a modem back then. And that's [Jon]: where I would have the updates that would come in. do all that magic behind the scenes, [Jon]: and then work with them, and then I come home on Friday, go back on Monday, that type [Jon]: of thing. But it was the customer [Paris Vega]: Amazing. [Jon]: feedback that was so important. We didn't just build a product and then try to go find [Jon]: customers. We actually listened to what the customer needed and then built the product. [Jon]: What that allowed us to do over the next two and a half years was 29 of the top 30 financial [Jon]: institutions in the US became customers. And [Paris Vega]: Wow. [Jon]: the majority of those were because of that relationship that we had with EDS. [Paris Vega]: And so was this, just to get to the fine detail here, was this something that [Paris Vega]: you were already, like had an idea about offering to people or was it more [Paris Vega]: inspired by, you heard that they had a problem and you knew how to solve it? [Jon]: I had an idea, so I was partnered with Ernst & Young and one of their consulting groups. I had the chance to kind of travel the world [Jon]: and listen to customers. And we were providing at that time kind of cybersecurity services back to customers [Jon]: that were trying to go online for the first time. It was kind of when the internet was beginning to take off there. [Jon]: So we were helping them understand the systems and processes and applications that were related to that [Jon]: and how do we make sure that people have the right access and that the bad guys can't get it from the outside. [Jon]: And we offered that as a service. And we would go into all these Fortune 100 companies [Jon]: and we'd provide the same service. We would get done with that and they'd say, what's [Jon]: next? And we'd say, we'll be back in four months and we'll do it all over again. [Jon]: And that was the service. So the idea was instead of offering that as a service, [Jon]: let's build a process that can be managed inside of the company. Again, just like counts [Jon]: payable, counts receivable payable. It's just people that are involved in getting things [Jon]: done and making sure things are done. So. I stepped away for, it probably took me [Jon]: about six weeks, kind of just being heads down with just what I call my blue book. And [Jon]: I just tried to start figuring out how all these connections fit together. And I'll [Jon]: never forget just one day, I just looked up and I'm like, I figured it out. Like, I [Jon]: figured out this problem that nobody else has figured out yet. And that's what I [Jon]: put in the prototype and kind of showed the concepts and how they fit together. And [Jon]: then I presented it in a way that was just like any other process in a business. [Jon]: that people are associated with doing their job each day and how all the pieces start [Jon]: to fit together. [Paris Vega]: Wow. Did you have to get like a patent or anything like that to try and protect [Paris Vega]: your idea? [Jon]: We didn't. You know, a couple of times we looked into that. And we basically, Archer [Jon]: was a no-code platform that just allowed you to build and manage business processes. [Jon]: And we focused on business processes around governance, risk, and compliance. And [Jon]: the process itself was a starting point, but each customer modified that process to [Jon]: their unique way that they wanted to do business that was there. And that was the [Jon]: power of kind of the no-code platform approach that we took. So everybody had the [Jon]: same base process, but I could tell you that Goldman Sachs was very different than [Jon]: Credit Suisse, that was very different than EDS in the way that they managed that [Jon]: particular process. [Paris Vega]: Wow. So it sounds like it was custom per customer, what you had to do or [Paris Vega]: did your system that you set up and sounds like maybe eventually software that [Paris Vega]: you'd made, it was just something that they could customize just by using it. [Jon]: Yep, so we tried to stay away from the word customized because at the time that was [Jon]: a pretty bad thing, meaning that each person had something that was so custom that [Jon]: it was hard to maintain. So Archer was the software platform. It allowed you to use [Jon]: the software to tailor the process the way that you wanted, but it was exactly the [Jon]: same code base at every customer. So when we did a software update, it was just [Jon]: a general update to the platform to support whatever process flow that they had. And simple [Jon]: things when I talk about changes like... maybe you're looking at a form that has 20 [Jon]: fields of data on it. And instead of seeing a dropdown list, you want that to be [Jon]: a text area to type in data for that particular element. So it just allows you to [Jon]: basically say, here's the data that I want to collect. The way that I want to visualize [Jon]: that data. And then you set up charts and graphs and dashboards, you know, that kind [Jon]: of show the flow of the work that's happening. [Paris Vega]: Okay. And when you were kind of building your idea, were you also creating [Paris Vega]: like what your ideal target customer profile or your target audience was going to [Paris Vega]: be for this product? Was it just based on your Ernst and Young experience? Were [Paris Vega]: you already thinking of just those Fortune 100 companies or were you also considering [Paris Vega]: like smaller businesses or you talk about that targeting aspect of it? [Jon]: Sure, yeah, that's a great question. So we knew that this particular problem manifests [Jon]: itself inside of the Fortune 500 type companies that was there. And the price points [Jon]: that we were gonna sell it at were at a point that people underneath that probably [Jon]: couldn't afford it as well. So the base offering started at about $350,000 and kind [Jon]: of went up from there. [Paris Vega]: Is that [Jon]: And [Paris Vega]: a [Jon]: that [Paris Vega]: yearly [Jon]: was [Paris Vega]: fee or is it just a one time yearly? [Jon]: a yearly, yeah. So it [Paris Vega]: Okay. [Jon]: was sold as a software as a service. type of product. So we, we targeted mainly [Jon]: Fortune 1000 companies, or we totally Fortune 1000 companies. And then we broke it [Jon]: down by industry. And in the first two years we said, we're only going to sell into [Jon]: financial services. And my wife, Terry, who ran sales would come back in and say, we've [Jon]: got a hot deal in technology or somewhere. I'm like, we're only selling into, [Paris Vega]: Really? [Jon]: and [Paris Vega]: So you [Jon]: we took, [Paris Vega]: were turning down leads. [Jon]: we did, we did. [Paris Vega]: Wow. [Jon]: And I'll tell you the reason for that in just a second. But what we did was we took [Jon]: the top 30 financial services companies, broke them down into groups of 10. And we said, [Jon]: we're not going to sell into all 30. We're going to sell into these 10. Then we [Jon]: said, all right, how can we get access to those 10? Are there trade shows, industry [Jon]: groups? If we get a connection with one chief information security officer, which is [Jon]: who we sold to, do they have connections with other people that we could use their network? [Jon]: And that's how we started to get in was to go to those trade shows and things that [Jon]: we knew those 10 people, uh, we're going to be at each time. [Paris Vega]: That is a super specific target. [Jon]: Yeah. [Paris Vega]: 10 people. [Jon]: And the, you know, the reason for that was we felt that if we could sell into financial [Jon]: services, it's kind of the beachhead because that's, it's hard to get entry into [Jon]: those, that there would be a big me too mentality across the other industries. the [Jon]: other people outside of the top 30 in financial services. So what that allowed us [Jon]: to do was then we moved into insurance companies, technology companies, telecommunications, [Jon]: healthcare. And we could always go back and say, we have Goldman Sachs, we have city [Jon]: group, we have bank of America. Like we could really name drops and big companies. [Jon]: And it just took all those credentialing conversations off the table and became more [Jon]: of a, if they have it, why don't I have it? Right. Conversation that was there. And [Jon]: we can't, I think. can't take credit for understanding that was all going to happen [Jon]: because of the approach that we took, but we very quickly learned that me too mentality [Jon]: was just, it was amazing for the growth of the company over time by having those first [Jon]: 10 kind of really strong logos. [Paris Vega]: So you said your first one was GM? Is that who it was or [Jon]: It was [Paris Vega]: EDS? [Jon]: EDS who did [Paris Vega]: EDS. [Jon]: the house. So EDS, I think has been sold and is now part of Hewlett Packard. So HP. [Paris Vega]: Okay. So you got that one first. And then did you immediately like put that [Paris Vega]: logo on the website? [Jon]: We didn't, I don't know that we even had a website then. So we, the next thing that [Jon]: happened is we, we went after this group of first 10 and Credit Swiss First Boston was [Jon]: one that was in that initial group. And they just happened, they were the first one [Jon]: that would take a meeting for us in New York. And what was interesting about them was [Jon]: they were, they're more of a global bank. So they're not just US centric, they're very [Jon]: global. I did the very similar approach that we took at EDS there and that we met with [Jon]: them, they liked the product. They signed up, but they said, look, John, we need you [Jon]: and some of your team members on site full time for a few months to help us get this [Jon]: integrated into the organization. So I would travel to New York Monday through Friday. [Jon]: Basically, they put me in, this is a great story, they put me in what used to be [Jon]: a closet with two interns and I'm the CEO of this company. And I'll never forget [Jon]: the interns came in, they introduced themselves and they said, what do you do, John? [Jon]: Like, you know, what are you going to be focused on? thinking I was just another [Jon]: intern at the bank as well. So my ego got hurt just a little bit from that. But again, [Jon]: being there each day, all day, every day, working with the customer and their environment [Jon]: was just so beneficial to understand how we needed to build the product, continue [Jon]: to enhance it, to support those processes that they had. And we did that for the first [Jon]: three customers that we had in that before I could kind of step away and. I didn't need [Jon]: to spend that much time with them. But that gave me a lot of domain knowledge that [Jon]: I could then share when we were talking with new customers to really get into the details [Jon]: about how things would work. [Paris Vega]: So was the main strategy the conferences you talked about or were there other things [Paris Vega]: you did advertising or any other tactics that you? [Jon]: Yeah, no advertising, no marketing. There was a conference that we found for financial [Jon]: services called the FS-ISAC. It was a information analysis and sharing conference. [Jon]: Basically it was invite only for financial services companies to share threat information [Jon]: about what is happening, how people are trying to break into their online banking and [Jon]: how they're securing those vulnerabilities that they're seeing in different software products [Jon]: that they use. So we were one of the very first vendors that actually got into that [Jon]: group. And then that allowed us to, we didn't sell. That was pretty interesting. We [Jon]: didn't go into any of these trying to say, this is our product. We're so great. Here's [Jon]: how much it costs. We went into that building relationships and we had the chance [Jon]: to go to dinner with these people, have drinks after dinner with them, just get to [Jon]: know them. And then I would present at times that these conferences, they would ask [Jon]: me to present on various topics as the subject matter expert. And that's what began [Jon]: to build the relationship. So it wasn't a hard sell. It was more of a, let's credentialize [Jon]: ourselves, kind of become part of the community. And then that's when things really [Jon]: started being successful for us on the sales side. [Paris Vega]: Okay, so you'd already, when you started going to the conferences, you already [Paris Vega]: had at least one customer or maybe [Jon]: We had [Paris Vega]: a handful, [Jon]: two. [Paris Vega]: two? [Jon]: Yeah. [Paris Vega]: Okay. [Jon]: We had Credit Swiss and EDS. [Paris Vega]: Okay, was that enough, I guess it was, to be seen as an expert in the space [Paris Vega]: or? [Jon]: I don't know that I was considered an expert until maybe two or three meetings. They [Jon]: met quarterly, so I would go to these. But when I went, now I had people that I knew [Jon]: that I could kind of hang out with. And they introduced me to their friends and their [Jon]: networks. And eventually they realized what Archer was all about and how we were helping [Jon]: credit Swiss mainly at the time and ask us and then our next two customers were, uh, [Jon]: Wells Fargo and bank of America. And once that happened, that's. We were very credentialized [Jon]: in that little group because those were the guys that were running the FSI sec that [Jon]: were on the leadership team that was there. So then they would ask me to talk about [Jon]: or be in discussion panels with, you know, other people, the companies that were [Jon]: there. [Paris Vega]: So it's through the customers, not necessarily [Jon]: It was. [Paris Vega]: like blogging or, you know, putting any [Jon]: Yeah, [Paris Vega]: other [Jon]: you have [Paris Vega]: kind [Jon]: to [Paris Vega]: of [Jon]: think [Paris Vega]: content. [Jon]: back. This is back in early 2000s. You know, [Paris Vega]: Yeah. [Jon]: there's none of that was really there yet, or it was just starting to start. [Paris Vega]: Yeah, there's a little bit of blogging going on back there. Yeah, it's just [Paris Vega]: interesting to hear how you got into that aspect of kind of thought leadership [Paris Vega]: because you hear that kind of buzzword thrown around a lot these days, becoming [Paris Vega]: a thought leader and [Jon]: Right. [Paris Vega]: whatnot. And it seems like you just got there by just solving your customers' [Paris Vega]: problems and having more of a customer focus and it kind of naturally [Jon]: Yep. [Paris Vega]: happened based on those relationships. [Jon]: Yeah. The next big thing that happened to us was our core group of customers. We probably [Jon]: had six or seven at the time. We would put them in contact with each other to answer [Jon]: questions from time to time, just phone calls. And we were on a phone call with Wells [Jon]: Fargo credit Swiss and Bank of America. And the gentleman from Bill Linder was his [Jon]: name from Wells Fargo said, John, this is great, but we want to start a user group. [Jon]: And I want to meet with these other two companies and their teams. And we'll host it [Jon]: in Phoenix, which is where they were based. And he said, I just need you to set [Jon]: it up and organize it. So we organized a three day event, which is basically two and [Jon]: a half days, two days of courses, and then, uh, the night before it was kind of more [Jon]: like a reception just to get to know folks. And it was very rudimentary at the time. [Jon]: Maybe 25 people total showed up to that. Today, what would you fast forward? Like five [Jon]: or six years from that first event, we would have four and 500 people show up for [Jon]: three days at an event. And. The key to the events was that we did not present to [Jon]: the customers other than we would talk about our product roadmap and the features [Jon]: that they had requested and the timeline for those happening. We had customers do all [Jon]: of the breakout sessions, the panel sessions. I would moderate some of those, but it would [Jon]: be all the customers telling their perspective on how to manage risk or do certain things [Jon]: that were there. [Paris Vega]: interesting. [Jon]: And that, that became like the go-to conference that almost felt like family, meaning. [Jon]: go back now, there are people that have been there 18 years in a row. Like they go [Jon]: every year and they, they just know everybody. That's kind of their community that they have. [Jon]: And we would invite prospects to attend for free. Again, we, our goal was we don't [Jon]: sell during any of these. We just let our customers talk to each other. But what [Jon]: happened was customers were sold by other customers by just watching how they're solving [Jon]: these problems. And we did main sessions where everybody would be in the room together, [Jon]: but then. three quarters of the day were breakout sessions where we had five or six [Jon]: little sessions going with customers leading them doing demos of how they solved [Jon]: it. So it wasn't just a presentation. They were actually showing the product, answering [Jon]: questions. That's what became kind of the sales engine for Archer long term was [Paris Vega]: Wow. [Jon]: that particular event. [Paris Vega]: And that was an event that you guys were putting on yourselves, right? Even [Paris Vega]: though the customers had asked for it, but it sounds like it became your [Jon]: We, [Paris Vega]: event. [Jon]: yeah, it was our event, our yearly event, and it still goes on. We sold the company, [Jon]: but that event is still underway. I can't even guess how many people attend that today. [Jon]: And for us, what happened was that event was so successful and we nominated what we [Jon]: called a user group chairman that was a customer that presided over that event and [Jon]: helped organize the breakout sessions and what they wanted to talk about. So we funded [Jon]: it, hosted it, did everything, but it was meant for the customers. That group came [Jon]: back to us after maybe the third event and said, this is great, but we don't want [Jon]: to wait a year. We want to do regional events every quarter or every six months. So [Jon]: the people in Atlanta could get together or the people in LA could get together. Not [Jon]: as big of an event, really just a classroom for a day, just for us to meet and talk about [Jon]: things. So that then led to what we call regional breakouts. And again, those are still [Jon]: going on today in every major city and now around the world for auction. [Paris Vega]: Wow. [Jon]: So it's a... [Paris Vega]: And so did you ever start doing other types of advertising or anything? [Jon]: We never did. We didn't do any type of marketing outside of those events that I just [Jon]: talked to you. [Paris Vega]: Wow. And that was enough to exit for 200 million. That's awesome. That's [Jon]: Yeah, [Paris Vega]: really cool. [Jon]: I think, you know, I get the chance to talk with a lot of entrepreneurs and I, I love [Jon]: to kind of talk about that journey and the story and let them understand that, you [Jon]: know, the focus, if you can keep the focus on the customer and the problem that [Jon]: you're solving for the customer, that's your best salesperson. Right. And you know, [Jon]: you don't have to ask them to sell. You just, you just build that rapport where they, [Jon]: they're so excited about what they built. and what they're doing in their job, they become [Jon]: an expert, they're willing to share that with other people that are there. And in some [Jon]: cases, you need to compensate them for that in some way. And it's not always just [Jon]: money. Some customers can't take money, but different types of gifts or events or recognition [Jon]: in front of the group that really, that people enjoy. And I forgot one part of that. [Jon]: We also, during those events, implemented an award ceremony where we had... five or six [Jon]: different categories. We'd have the people at the conference vote on who should win those [Jon]: categories based on all the presentations that were done. And we had little trophies [Jon]: that were meant to be mementos that were set on somebody's desk that had our name on [Jon]: it, had their name on it, but it was right where they worked every day. So anybody [Jon]: that came in their office would see our branding inside of these large corporate accounts [Jon]: that were there. [Paris Vega]: Wow. Really cool. I think the main lessons there, like you were saying, focus on the customer, solve a big important problem [Paris Vega]: for big important companies. [Jon]: I should have read. [Paris Vega]: That's a pretty good strategy. And do you feel like your background at Ernst & Young, [Paris Vega]: seems like that would like personally validate like you as a founder, because that's a really well-known brand, right? [Paris Vega]: Known for like security, compliance, auditing, [Jon]: Yeah. [Paris Vega]: and all that kind of stuff. [Jon]: It is. Yeah. That was a big part of my kind of the growth in my own personal career [Jon]: where I'd learned so much in a short amount of time that really set the stage for [Jon]: me to be an entrepreneur and to know how to run a business by just seeing these [Jon]: partners that are all around the world and how they ran their little pieces of the [Jon]: business that was there and how process was so important to make all of that work and [Jon]: how you hire people. Like it just all kind of fit together. So when I left and started [Jon]: Archer, like I took. all the best things that I learned from there with me. But at the same time, I had the credentials [Jon]: when I was talking to customers to bring up my background at Ernst & Young. And that added some credibility when we were really young [Jon]: to, okay, we should at least listen to the pitch that's here to see if this might be for us. [Paris Vega]: Maybe you could speak to that for just a second, because I know, like a lot [Paris Vega]: of, especially younger entrepreneurs, they might hear, you know, the kind of really [Paris Vega]: lucky flash in the pan stories that get a lot of media attention about some [Paris Vega]: super young software founder, [Jon]: Right. [Paris Vega]: you know, the classic Mark Zuckerberg, you know, he dropped out of college, started [Paris Vega]: a thing and it took off. And so they feel maybe a internal pressure to hit [Paris Vega]: some huge level at a really young age when that's like the rare exception. Um, [Paris Vega]: because I think what the average age of a founder is actually something like [Paris Vega]: in the forties or late thirties or something like that, like actually companies [Paris Vega]: that stick around. Um, [Jon]: Right. [Paris Vega]: what do you think about that? Like the importance of having some experience [Paris Vega]: before launching into entrepreneurship. [Jon]: Yeah. If you take out of kind of those exceptions that you've talked about that are [Jon]: maybe like in the eight to 10% range, right? Just really young founders, great ideas [Jon]: that just hit the market at the right time. The other 90% is not like that. Um, I'm [Jon]: a big fan of the book outliers by Malcolm Gladwell. I don't know if you're familiar with [Jon]: that book at all, but Malcolm went through and tried to understand why all these different [Jon]: types of people were successful. Like. Bill Gates and Steve Jobs and HP and the Beatles [Jon]: and some lawyers. Like he just said, I understand the story. I want to get into [Jon]: the why, like what, what happened, what was there. And he found a couple of things [Jon]: that are very true in that I, that I'm a big believer in. The first was he came up [Jon]: with this concept of 10,000 hours. It takes 10,000 hours and a particular discipline [Jon]: to become an expert. When you reach that expert level, the doors really begin to open [Jon]: for you. You're going to get more opportunities to do more things because you are now considered [Jon]: to be an expert that's there. Most of the founders that you're mentioning that are [Jon]: in their thirties and forties that are, are backed by venture capital groups come with [Jon]: that background. They have that domain knowledge and a particular topic. They have [Jon]: 10,000 plus hours that are there. And now they have the opportunities to go build [Jon]: their own company because of all the work they've done for other people that are [Jon]: there. So with, with people that are kind of coming out of college, I usually spend [Jon]: a lot of time with them and counsel them that maybe you have a great idea. That's great. [Jon]: That's that eight to 10%. Right. That could hit, but [Paris Vega]: Mm-hmm. [Jon]: what's more important is how are you going to get your 10,000 hours? Pick the type [Jon]: of job, maybe not focused just on the money, but focused on the knowledge and the [Jon]: opportunity that you're going to have for the first two or three years, [Paris Vega]: Right. [Jon]: because what I found is the people that get that, and I was lucky enough to fall into [Jon]: that where I was trained really well. first three years kind of out of college. And [Jon]: I found that I started to trump all the other people that were kind of my age because [Jon]: I had experiences that they didn't have. So I started way behind them on the compensation [Jon]: side. They had better jobs, higher paying, but ultimately I trumped them in a big way. [Jon]: And in some cases became, you know, their managers and their bosses over a period of [Jon]: time, because of the experience that was there. [Paris Vega]: really good. Let's switch gears a little bit and get into the story of Smart [Paris Vega]: Suite. [Jon]: Yeah, I would love to. So the story of Smart Suite is this, in that I had the chance [Jon]: to leave and retire for a period of time after selling Archer Technologies. I invested [Jon]: in about 400 different startups. So I've had the chance to be involved with a lot of [Jon]: really interesting people. And as we were talking about how they run their business, [Jon]: there's a common theme that kept coming up. What products do I use to manage the processes [Jon]: in my business? And as I grow, Can I stay with those products or do I need to get [Jon]: another product? Like what do I use for a sales CRM? What are you for marketing? How [Jon]: do I manage my HR or my IT, my product teams that are there? So the idea behind smart [Jon]: suite was to say, I want to build a platform to manage any business process in a company, [Jon]: regardless of the size of the company, whether it's two people to thousands of people, [Jon]: tens of thousands of people on a single platform. And there were two. There are two [Jon]: main disciplines that kind of fall into that project management tools and process management [Jon]: tools. Our thought process was let's bring both of those together into one platform. [Jon]: So you have all those capabilities together, but let's add in what we used to call integrations [Jon]: now are called automations where I need to share information, not just inside my workflows, [Jon]: but with products outside of my workflow. So that's built in the core product, but then [Jon]: you need business analytics and dashboards to be able to report on things. So we built [Jon]: a core platform. We took very different story than, than Archer. We took a little over [Jon]: two years with about a hundred developers, no customer [Paris Vega]: Whoa. [Jon]: to build the core platform itself. So it, this is a big lift. It's not just a little [Jon]: MVP in three or four months that was there. Part of the reason that worked for me [Jon]: is because I had so much domain knowledge to know what the customers wanted that I. I [Jon]: didn't have to have that constant feedback like I needed to have an archer to figure the [Jon]: problem out. I understood the problem and I needed to let the software first catch [Jon]: up with what would solve the base of the problem. And then we would enter the market [Jon]: because we felt like if I went to a customer and said, I, I can only solve 20% of the problem [Jon]: that you have, they're going to say, you know, we're, we're going to put [Paris Vega]: Yeah. [Jon]: you at the bottom of the stack. So at, at smart suite, we're a product led growth [Jon]: company, which means, you know, you come to our website. You start a free 14 day trial [Jon]: at the end of that trial. You can either convert to a free plan that we have or convert [Jon]: to one of our three paid plans that we have. We're not pressuring you on the sales [Jon]: site. We're letting you experience the product and make a determination. If that product's [Jon]: for you. So a lot of, or many of the features that we had at Archer that were built [Jon]: into that product for only enterprise customers that were paying in a minimum of [Jon]: 350,000 a year. are built [Paris Vega]: Right. [Jon]: into Smart Suite for two users starting at $10 per month. Right. [Paris Vega]: Wow. [Jon]: So it's very different model. So our game, we have over 10,000 companies that are [Jon]: in our product today. 600 and some of those are on our higher level pay plans that [Jon]: you've kind of mentioned at the beginning, [Paris Vega]: Mm-hmm. [Jon]: but we have a whole host of people that are finding value in the product and that's [Jon]: what PLG is all about. Um, and [Paris Vega]: You [Jon]: what [Paris Vega]: said [Jon]: was [Paris Vega]: PLG, product [Jon]: PLG? [Paris Vega]: lead growth. [Jon]: Yeah. Product [Paris Vega]: Okay. [Jon]: lead growth. Yeah. And that's just a fancy word for, for meaning that, you know, [Jon]: you do your marketing to drive people to your website, to start a free trial of your [Jon]: product without having, you know, directly contacting customers from a sales perspective. [Jon]: It all happens [Paris Vega]: Gotcha. [Jon]: from that engine. [Paris Vega]: So you have upsells and different things within the software [Jon]: Exactly. [Paris Vega]: itself, the interface to [Jon]: Yep. [Paris Vega]: let [Jon]: So [Paris Vega]: them. [Jon]: it's all up to the customer. So when they reach certain usage limits and things, [Jon]: messages pop up, ask them, would you like to upgrade or not? And it just kind of [Jon]: handles it all inside of the process, or, you know, the product itself that's there. [Jon]: And the interesting part of a PLG company, and especially for smart suite is we had to [Jon]: find like, how do we drive those customers back to our website to start those trials and [Jon]: what we found was that the single best way to do that, there were two ways. Um, the [Jon]: first was we, this company, we, we had a partner first, uh, kind of approach, meaning, [Jon]: you know, at Archer, we went directly to the customer, had a customer first, this [Jon]: one was partner first, and that we wanted to attract partners that would, could provide [Jon]: services around our product and help our customers implement those, implement the [Jon]: product around all these different processes that they had. [Paris Vega]: So instead [Jon]: We. [Paris Vega]: of having like a fleshed out support team and that kind of thing, you were kind [Paris Vega]: of offloading that to kind of agency style partners. [Jon]: Little, little different. So we still have all the support and our onboarding teams [Jon]: and all of that. We wanted [Paris Vega]: Okay. [Jon]: our, we wanted those partners to take us into their accounts that they're already [Jon]: working with that's there. So we built the product in 15 languages so we could go [Jon]: international [Paris Vega]: Whoa. [Jon]: very quickly. And then we started signing up and educating partners. We have about 130 [Jon]: partners today. Those partners are where the majority of those leads are sourced. They [Jon]: are driving people to our website. And we pay them 50% of the first year revenue for [Jon]: any deal that they send us that converts. So they not only get the services, they get [Jon]: a piece of the revenue. And we go up to 40, 30 over two years for our, our platinum [Jon]: level. So we have partners that maybe bring us into Belgium. This happened this week, [Jon]: had a pretty good account and they'll get paid over two years as opposed to a single [Jon]: year based on the level of partner program. And then the second part of that is we found [Jon]: that video. YouTube videos and YouTube videos on LinkedIn had the biggest impact of [Jon]: driving people to the website to try, to try the product because we could tell the [Jon]: story. So we started signing up people that would create videos and affiliates. And [Jon]: today there's 350 or more videos about smart suite on every kind of topic. And that's [Jon]: what kind of keeps the funnel consistent for us with driving traffic back that starts [Jon]: tribes. [Paris Vega]: So how do you target partners? Since you said a lot of the customers come [Paris Vega]: through there, how do [Jon]: Yeah. [Paris Vega]: you define those and go after them? [Jon]: Yep. So, you know, it's pretty easy nowadays to get a list of companies by type. There's [Jon]: this all different places you can do. So, you know, we targeted three or four different [Jon]: segments of consulting companies from kind of the entrepreneurs, they're kind of [Jon]: themselves and maybe one other person to teams that are in the 10 to 25, kind of [Jon]: the agency realm that's there, all the way up to the, you know, we have 50,000 consultants, [Jon]: you know, in our company, like a Wipro or a... You know, just the large consulting [Jon]: houses that are there. And we just started, um, emailing them, sending them video content. [Jon]: We, we, we found that when we would send a video to somebody and introduce ourselves [Jon]: and show the product in about a minute and a half. Made it personal, like, you know, [Jon]: Hey John, right? This is, this is what we do. I'm reaching out to you for X that we [Jon]: got a much higher response rate than just an email that was there. So we're very [Jon]: big believers on. on video and that's what started building those relationships. [Jon]: And then we built a smart [Paris Vega]: And that [Jon]: suite. [Paris Vega]: was a cold, that was a cold email [Jon]: Those are, [Paris Vega]: with [Jon]: yeah, [Paris Vega]: the video. [Jon]: those are all cold calls to get started. Now our name is out there, so word of mouth [Jon]: is happening a little bit more, but that's how it all started. And the first thing that [Jon]: we needed for partners to know our product was for us to be able to train them. We didn't [Jon]: want to be able to have to do one-on-one training. So we built an academy that has about [Jon]: 120 or 30 courses in it. that allows them to go through, do the training at their [Jon]: own speed, take certification exams, become certified, now they can go back to our [Jon]: customers and say, you know, I'm a certified consultant in Smart Suite, and that means something [Jon]: to the customer, but it also means something for the person's personal career that's there. [Paris Vega]: Right, they got a little badge they can put on things. [Jon]: Right. [Paris Vega]: What do you use to make the videos for the emails? [Jon]: We use Loom, [Paris Vega]: Loom. [Jon]: which is low cost, [Paris Vega]: Yeah. [Jon]: super effective, super simple. I'll give you a couple of thoughts on that. So what's [Jon]: happening in the kind of that world right now is pretty fascinating with AI in that you [Jon]: can create a video. [Paris Vega]: All right. [Jon]: I could introduce myself for a minute and a half. I can go back into the text of [Jon]: the video that gets, you can use an AI product that shows, it says, okay, I'm going [Jon]: to now show you the transcript of what you just said. I could take out the word. Fred [Jon]: and I could put in your name that I just I'm pulling from my CRM and it actually, my [Jon]: mouth changes and I pronounce welcome Fred or John [Paris Vega]: Yeah. [Jon]: or whoever it is. Right. [Paris Vega]: I think Descript [Jon]: And you can. [Paris Vega]: is one of those products. [Jon]: Yep. Descript [Paris Vega]: Okay. [Jon]: is one I'm drawing a blank on one. I just saw this weekend that I was just shocked [Jon]: at how good it was. Um, it's, it's one of the plugins for chat and GPT four that's [Jon]: out there. [Paris Vega]: Oh, really? [Jon]: Someone's trying to find it. Super [Paris Vega]: OK. [Jon]: simple. It was free. Um, but you can insert stuff all the way through your video [Jon]: like that, where it feels like it's personal. And now you're seeing as, especially in customer [Jon]: success, as a new customer sign up for products, they'll get a welcome email that [Jon]: goes right back up from the sales rep. But the sales rep just recorded this two months [Jon]: ago and all the fill in the blank stuff are happening, but it feels personal back to [Jon]: the user. [Paris Vega]: And so you've got it automated to insert customer name and [Jon]: Exactly. [Paris Vega]: then produce a video [Jon]: And [Paris Vega]: and send [Jon]: in more than [Paris Vega]: it out. [Jon]: that. So you could talk about the industry, their company size, like different things that [Jon]: you've collected, maybe during onboarding, or you went to their LinkedIn profile and typed [Jon]: in and will help build all that and where that's heading. Is using AI to actually tailor [Jon]: that whole video you're still talking, but you didn't say any of those words. AI just [Jon]: generated that very custom message [Paris Vega]: Yeah. [Jon]: for you. [Paris Vega]: awesome. So you could almost, well, everybody's threatened by AI these days, [Paris Vega]: it seems like, if you think about it long enough. But I mean, [Jon]: Alright. [Paris Vega]: you could have, you could be the only salesperson at the company in a sense, [Paris Vega]: like you could be the one individually being that persona, that AI avatar talking [Paris Vega]: in [Jon]: Exactly. [Paris Vega]: all the videos or whatever. But I guess you'd want to have more of a direct [Paris Vega]: connection with whoever they're going to be physically speaking to at some [Paris Vega]: point, if they are going to be speaking to a human at some point. [Jon]: Yeah, for sure. So I think as far as the AI revolution that just started like six [Jon]: weeks ago, like it, [Paris Vega]: Right? [Jon]: it's, it just went from zero to a hundred in just a week. Um, content creation is the [Jon]: number one use case, whether that's, you know, content for your website or creating [Jon]: websites or content for videos or helping you write scripts for videos. Like it's pretty [Jon]: amazing at all those things I just mentioned. And in most cases, way better than what a human [Jon]: could do because you can tailor. I want to write it in this tone, right? To this audience [Jon]: with this directive and this goal that I have. And, you know, it just iterates and [Jon]: gives you options until you say like, that's the one I want, you know, and I could [Jon]: do what I just said myself in some cases in a minute and a half, two minutes versus [Jon]: me working on an hour, you know, to write a video script, uh, maybe. [Paris Vega]: Sure. Yeah, it's just about to the point where I don't even talk to my kids [Paris Vega]: anymore. I just, all right, GP, [Jon]: You're [Paris Vega]: please. [Jon]: right. [Paris Vega]: We could. Here's your bedtime story. Let's read what the AI said. [Jon]: Exactly. [Paris Vega]: Okay. So that's, that's really interesting to see that contrast between the [Paris Vega]: two companies and the two strategies and tactics that are basically opposite ends [Paris Vega]: of the spectrum. [Jon]: They are for sure. And I think you're going to see more. Well, for founders that [Jon]: have a great idea and don't have any capital to put in themselves, right, they're [Jon]: going to have to go to a venture capitalist and they're going to have to do an MVP and [Jon]: build something in a short amount of time. Because the venture group is going to [Jon]: say, I'm going to give you a little bit of money. If you get some customers, I'm going [Jon]: to give you, I'm going to continue to feed you more money, you know, develop things, [Jon]: but you have to prove it really fast. That's there. The other side of that spectrum [Jon]: is if you have entrepreneurs that are maybe had a successful exit and have their [Jon]: own capital, it gives them a little more luxury to actually listen to the market need, [Jon]: the customers build something that really fits in the space and then go to market that's [Jon]: there. So very different. Both of, both of these are super successful venture capital [Jon]: firms bring a lot to the table to help beyond entrepreneurs that have great ideas, [Jon]: make those successful, uh, that are there, but they iterate really, really fast. And if [Jon]: they see something's not working, they pivot, like they may change the direction, [Jon]: complete direction of the company over a weekend based on data that they've seen for [Jon]: three weeks. Right. Like it's [Paris Vega]: Yeah. [Jon]: very quick pivots that are there. Versus. [Paris Vega]: So the worst case would be venture capital backing a stealth startup that's going [Paris Vega]: to launch in a couple of years. [Jon]: Exactly. I, I do have a friend that I talked to that, that raised capital a year [Jon]: and a half ago, and he raised the capital by saying, I don't have any idea what the product [Jon]: or service is going to be that we're going to offer in the no code space, we're [Jon]: going to start with building a community of no code people. And we're going to get those [Jon]: people talking and out of that community is going to come a need and then we're going [Jon]: to focus on that need and they bought into that. and raise quite a bit of capital [Jon]: to go down that path. Um, you do see that from time to time, but it's, it's kind [Jon]: of rare. [Paris Vega]: Yeah. And that's kind of following some, a good process though, because if you [Paris Vega]: have a community, it's kind of like you have like pre-sales almost built in. [Paris Vega]: If you've got a community that you can sell to or, you know, [Jon]: Exactly. [Paris Vega]: a big following, just like all these influencers, they can come out with any [Paris Vega]: branded product related to them and they'll make some sales, you know, just [Jon]: Right? [Paris Vega]: because they have such huge distribution. [Jon]: Yeah. I think in today's market, especially with millennials and Gen Z ears, they appreciate [Jon]: being a part of a community that they find meaningful. So if you've got them in your [Jon]: community from a product perspective and they feel valued and feeling valued means [Jon]: they're providing product feedback and you're actually listening and changing your [Jon]: product roadmap, implementing those features, like those companies are just golden because [Jon]: of that community. That community is going to drive the value of that company long-term. [Jon]: that's there. We're building our community. We have a pretty robust community, but we want [Jon]: it to be much bigger at Smart Suite, just because we've seen that the companies [Jon]: in the last three years that have done that have gone on to do some pretty special [Jon]: things. [Paris Vega]: And I guess in a way that's kind of how your first company evolved was kind [Paris Vega]: of around a community of customers. You know, it was just a, I guess it kind of [Paris Vega]: grew as your company grew instead of, you know, building that community first. [Jon]: Yeah, communities in today's market, you know, basically mean, you know, I'm using [Jon]: software to let people come together and, and discuss things, ask questions, you [Jon]: know, do things together in the time of Archer, there was no software. So it was [Jon]: all physical community that was getting together. Or we had a lot of, um, calls that [Jon]: we would make where we get, you know, 20 or 30 people on a call to have those discussions, [Jon]: but in today's world with video and with actual community software sites that you can [Jon]: use, it makes it much easier. [Paris Vega]: This is really interesting. Let's pivot a little bit. We've talked about a lot [Paris Vega]: of the overall strategies and some of the tactics, but you mentioned, the [Paris Vega]: game now in your current company is, you gotta get traffic to the website to [Paris Vega]: get them into that kind of funnel of experiencing the product and getting up [Paris Vega]: sold [Jon]: Right. [Paris Vega]: eventually and everything. So you've to do the cold emails with the videos. [Paris Vega]: Are you doing any other tactics to get traffic? [Jon]: Yeah, the only tactics we're doing is really the feature videos that we do that are [Jon]: hosted on YouTube. And we, the first thing that we did there was we went to who [Jon]: we thought were our four largest competitors. We found that people that were producing the [Jon]: highest quality videos, talking about those products and, and had an audience in [Jon]: the 20 to 30,000 subscriber range, we approached them and said, look, we're a new [Jon]: player in the space. We're going to compete head to head with the product that you're kind [Jon]: of built your career around here. Um, we'd love for you to just, you know, try us [Jon]: out and do a video and compare us against the product that you're using. Right. We, we [Jon]: did it in a way where they thought that, okay, I'm going to talk about this newcomer, [Jon]: but I'm going to pound them really hard because the product we're using is better. [Jon]: What we wanted to happen and what happened to those, the four first people was they came [Jon]: back and said, wow, how long have you been building this? Like, this is really good. [Jon]: Can we create video content around your product? And two of them changed their business [Jon]: model to include smart suite in addition to the products that they were including. And [Jon]: those were the top two vendors in the space, air table and click up. Uh, influencers. [Jon]: So they still produce videos, some of them once a week, and we reach their audiences [Jon]: that are there and that, that continues to drive just a, a lot of volume. And then [Jon]: there's a lot of me too. Influencers, meaning they've seen how these influencers [Jon]: have built their, their career around video. And they're. kind of their brand. So [Jon]: they're trying to do the same thing, kind of emulating that. And they're starting [Jon]: to pick up smart suite that's there. So that's how we got so quickly to the, you [Jon]: know, 300, 350 video kind of milestone. [Paris Vega]: Okay. And how did you target those influencers? [Jon]: Welcome. We cold emails. [Paris Vega]: Really? [Jon]: We, yeah, [Paris Vega]: Okay. [Jon]: the first, the first one was exactly the story that I told you before in that these [Jon]: people produce video for a living, so we thought an email is not going to do it. [Jon]: Let's give them a couple of sentences in an email, but let's do a personal video [Jon]: loom video back to them, describing what we want. And the first one, his name was, was [Jon]: Gareth Provenos from Gap Consulting. And he was, he's all things air table, or he [Jon]: was until eight months ago. And he responded back with the video and he said, No one's ever [Jon]: reached out to me with the video before I'm responding because of this, like he said, [Jon]: this is very cool. Like you're talking my language. And that allowed us to begin to [Jon]: build that relationship with him because of that. If we would have done just an email, [Jon]: I don't know that we would have got his attention to start having the dialogue. [Paris Vega]: reaching our time limit here, but this has been packed with some really cool [Paris Vega]: insights. It's a, it's a really neat story having those two companies that [Paris Vega]: you've, you know, built each of them successfully. Uh, so I think people are [Paris Vega]: gonna get a lot of, a lot of value out of this episode. Um, where, where should [Paris Vega]: people look you up and, uh, maybe real quick speak to your target audience about [Paris Vega]: why they should sign up. [Jon]: Sure, yeah, feel free to reach out to me on LinkedIn at any time. It's just John [Jon]: Derbyshire, John is Joanne. Either DM me or hit me at this, uh, on the smart suite, [Jon]: uh, LinkedIn page. You can also come to our direct to our website and the bottom [Jon]: right-hand corner. There's an icon that you can click and have a live conversation [Jon]: with a member of our team. And if you want to talk with me, you just let them know. [Jon]: And I respond back that way as well. And if you're an organization that's managing, [Jon]: uh, needing to manage workflows in your business, whether you're. mom and pop business [Jon]: and SMB business, or all the way to enterprise, and you want to see how you could have a single [Jon]: platform to help manage the core processes around sales, marketing, IT, HR, product, those [Jon]: types of things, or a platform that you should take a look at. [Paris Vega]: Awesome. Thanks everybody for listening and we'll see you next episode. Thanks, [Paris Vega]: John. [Jon]: Thank you, it's a pleasure.