Episode 9: Dan O’Connell and Keith Messick

In our ninth episode, Gil Allouche talks startup building and category creation with two experienced B2B operators who made huge impacts on the cloud communication and product/feature management categories.

Panelists for this episode include:

  • Dan O’Connell, CRO of Dialpad and influencer of the Conversational Intelligence category
  • Keith Messick, SVP of Marketing at LaunchDarkly and influential in the Feature Management Platform category

 

You’ll walk away from this episode with great insights around:

  • Why it’s a bigger risk to not swing for the fences than it is to even work at a startup, which is risky to begin with
  • When, why, and how to ignore advice from your VC
  • How even the most mundane estimates in a forecasting model can throw you completely off

 

BONUS!

Dan recounts one of his biggest missed opportunities when it came to owning a movement before everyone started working from home: #workfromanywhere.

TRANSCRIPT

Gil Allouche:

Thank you Dan and Keith for joining, this is the Category Creator podcast. This is the 10th episode, my name is Gil Allouche. I’m the founder and CEO of Metadata. I have these two gentlemen with me, Dialpad and LaunchDarkly. Dan, maybe you can get us started and introduce yourself to the [crosstalk]

Dan O’Connell:

Yeah. Gil, it’s great to be here. Thanks for having me. And then, I’m a Chief Revenue Officer here at Dialpad, and then, also a member of the board. Dialpad acquired the business that I was managing and building coming up on three years. So it’s a startup called TalkIQ. It’s a speech recognition and LP startup.

Dan O’Connell:

And then, prior to being the CEO of that business, I had spent about a decade at Google building out sales organizations and teams. I joined Google and it was, now, a couple of hundred people, left when it was 60,000 people later. So, I had a little bit of a crazy experience to go through and then went with my boss to build another adtech company called AdRoll, which is now known as Astro. So it’s great to be here.

Gil Allouche:

Very cool. Very familiar with AdRoll. Great company. Keith.

Keith Messick:

Yeah. Hi, I’m Keith Messick. I run marketing here at LaunchDarkly, been here a little over a year. For the past decade plus, I’ve run marketing at many different companies of all stages. One of which was Dialpad, where I worked with Dan, and it was such a terrible experience that I had to leave, because working with Dan is absolute hell.

Dan O’Connell:

Very difficult.

Keith Messick:

Very difficult. So, he’s going to ruin this podcast any moment now.

Gil Allouche:

I cannot wait. Looks like this is going to be interesting, so, this great. I know Meredith by the way. She was a few cohorts before me in Alchemist Accelerator. So, I got the chance to know her, and then, she’s fucking awesome. She’s ruthless. So, that’s cool for you to work for that kind of CEO.

Gil Allouche:

Awesome. Well, let’s get started. Usually we talk about category creators and category creation, but also about just general other topics that are interesting. Let’s start there. Both LaunchDarkly and Dialpad are very unique companies, Keith, maybe we can start with you. What do you think about category creation? Many founders are being pulled to do category creation because VCs tell them that that’s the best way to get to a billion dollar.

Gil Allouche:

And some think it’s a good idea, some think it’s a shitty idea, but any way they do it, or at least try to do it. What’s your opinion about it?

Keith Messick:

Well, if VC say it, it must be right, right? It must be right like 10% of the time. Whatever the average is. But when it’s right, it’s really right. Maybe 40%. So, I think that category creation is great when you have a category to create. I think it is really distracting when you don’t, and I’ve seen it both ways. I think B2B category creation is actually its own animal. A lot of times when people talk about category creation, they talk about Uber and I’m like, “I mean, okay. Well, there’s one of those, but that may or may not apply to your insert MarTech business communications, DevOps company, whatever it is,” right?

Keith Messick:

But, when you have the opportunity, the genuine opportunity, it’s really valuable. I think where most people do it wrong, and I’ve participated in this once, is where you just try and create a category for category’s sake, but, the people aren’t really asking for it. You’re just trying to sell the same product that someone else is and you’re just trying to call it a different thing. And that’s when I think it’s just a huge distraction.

Keith Messick:

But, when you have an opportunity to focus on the people in your audience and give them something unique, I will stand with the VCs on that one.

Gil Allouche:

Okay. One out of 10, the VC is right, and when they are right, you should create a category. I’ll ask you more about what signals that tell you that you should or should not. Dan, what’s your opinion about category creation?

Dan O’Connell:

Yeah. Keith and I usually don’t agree a lot, but I agree with him on this. What’s interesting on category creation is a lot of it gets into marketing speak, is per… And I think, especially when you see businesses that see there are opportunities to create a category, you then, suddenly, see, I would say, startup’s battle over the branding of that category. I think conversational intelligence, whether you call that coaching, however you want to frame that voice intell… Whatever it might be, you see all of these startups suddenly vet into, how do they brand it and see it?

Dan O’Connell:

I actually think that becomes distracting and difficult for the market to actually understand what is the problem that people are solving. Everyone gets so caught up in owning the marketing term and marketing speak behind it, that, similar to what Keith said, I think it becomes distracting, but I also think it gets really hard for the market to actually understand.

Dan O’Connell:

And so, it’s a little bit of my take on that piece, but, I do agree that there are moments in time where there are new technologies that allow you to truly create new products that people haven’t seen before. And I think if you can be the dominant player, because, much like many of these markets, a few markets are winner-take-all, you typically see two to three companies float to the top on it. If you can be one of those companies, I think there’s extreme value created for everybody, whether it’s the people building the startup, to the investors, to whoever it might be.

Gil Allouche:

First of all, cheers for both of you agreeing on one subject. That’s great. That’s a good start, right? So cheers. Thank you, happy Friday. This is only my second, so actually I’m good. I usually [crosstalk] the fourth by the time I record my second episode. You both agree that sometimes it’s a good idea, sometimes it’s a terrible one. Very distracting, it’s confusing for customers for the market.

Gil Allouche:

George [Turner] told me, two, three weeks ago, “Look, if you are…” I have a binary question, George Turner from Pendo. He was like, “Look,” I ask myself this question, it’s a binary question, “Am I taking a new line item in the budget, or is it an existing one?” And that helps me answer many of the questions and take many of the decisions I need to make.

Gil Allouche:

What, for you, are the questions, or the ways that you know… What are you going to tell to your CMO or CEO or yourself, “Yeah. I’m going to go and fight these battles because we are completely unique and innovative and define a new category or not. We’re just the better version of something that is already in existence.”

Dan O’Connell:

Yeah. Well, I think some of it comes down to features, to talk a little bit about… Just to give an example of Dialpad. So, we’re a communications and collaboration platform, is our core. Now, our approach and narrative is very much leading into, “How do we help people understand what’s happening in these conversations?” So to us, when we think about category creation, it’s very much like, “Look, we plan this massive TAM, and we know that that TAM has a lot of legacy businesses, and so, the narrative and the differentiation in a problem that we’re solving, becomes really important. Meaning, instead of me going to Gail and saying, “Hey, we can provide you with a better way to make phone calls or have video meetings across any device.” Once if I can help you understand what’s happening within those conversations, you can make better business decisions.

Dan O’Connell:

So, if I fall less, that’s a different category. There are different problems that we solve, and then it gets into the marketing in the speak, and the differentiation that you want to lean into in terms of how you sell this to your customers. I agree, I think it’s a really thoughtful… What you just mentioned around, “Do you have to go and get a new line item created for this or a new budget created for this?” And the challenge with that is nobody ever knows.

Dan O’Connell:

And this gets into the category creation, there’s a bunch of educated… Creating a category sounds great until you literally have to then go convince somebody that they should spend money on it, and then also spend time educating them on what it is.

Dan O’Connell:

And what I learned managing a startup was, “Hey, if I can go play in an industry that has a massive TAM, and then differentiate and tell a different story and truly have something that’s different, I would much rather fight that battle than necessarily get into the, “I want to create a whole new realm. And I got to think about how to go to market on it. I got to think about educating it. I got to go convince people that there’s a new budget.”” I think that can also be fairly challenging.

Gil Allouche:

Keith.

Keith Messick:

Yeah. Dan and I are going to agree twice. I mean, a couple of things, I’ll talk about Dialpad for a second I’ll crossover. Dialpad has the best product in a legacy market with a huge TAM. Dialpad doesn’t need a category. I mean, that category is worth $50 billion and they have the best product and the product gets better every release. I mean, that’s a really winning position.

Keith Messick:

When I think about categories, the first thing is always motivation, because I understand, if the motivation is, “I want to just make money,” I mean, the motivation has to align with the customer or the audience’s motivation. It’s why HubSpot worked. Because HubSpot’s motivation aligned with marketers and the whole shift to inbound marketing. I think it’s why Mark [Caddo] had a lot of success.

Keith Messick:

Same thing, marketers were trying to get a seat at the table as Mark Caddo was building something that’s right and get them a seat at the table. So it lined up. I think, that’s really the question. When I was at SuccessFactors years ago, SuccessFactors, just after the IPO pre-exit, we sold software to HR software. Performance management to start calls, recruiting, et cetera, et cetera.

Keith Messick:

And we had decided, not we, but, it was decided that we were going change to Business Execution Software. We called it BizEx. It was a horrible name, but it was going to be the new category. And here’s the deal, no one in HR wanted that. They didn’t want it to be Business Execution Software, and no one, CEO, COO, cared, because when you just went to them, there’s like, “Cool. This seems like HR software, why are you not talking to my chief people officer?” right?

Keith Messick:

And so, there was completely two ships passing in a night. Company wants to create a category, audience doesn’t care. So, the motivations have to line up in order for it to work. With LaunchDarkly, with the feature management space, we created that category and it’s because we have a unique product that Software Teams want and no one knew where to stick it, right?

Keith Messick:

It just didn’t really fall under pure DevOps, it didn’t really fall under CI/CD, it felt like something else in between, and our motivations aligned with our audience’s motivations and that’s how we got here. But I think that’s the biggest question because whenever your CEO comes to you and says, “we need to create a category.” You should be really, really skeptical and work your way backwards.

Gil Allouche:

Very interesting. It’s fascinating because I was just talking to Kris, from Sendoso, and he was mentioning, well, two things. First, he was mentioning how they were going after critical creation from day one, which I thought was fascinating, because I had no fucking clue how to create a startup in Silicon Valley, and I, definitely, did not want category creation. I didn’t want to do that at all. I’m all more of a product person. I was a marketer, I’m an engineer, that’s where it came from.

Gil Allouche:

But my VP of marketing, he thought, “This is completely new. I’ve done this for like 15 years, this is completely new category. We have to do this.” And I was like, “No. This sounds like a really tough thing to do.” And he was like, “I think we’re going to do it anyway. I think it’s a really good idea.”

Gil Allouche:

And he was right and we’re trying to do it, which is why I’m trying to learn from you how to execute it. But the customers, both of you agreed, customers telling you to do it and customers agreeing and being aligned with you, you were calling it motivation, but essentially being aligned, I think Nick [Meta] was talking about creating a place on the table for customer success. They were a third class citizen before and Gainsight made it legit like customer success [inaudible].

Gil Allouche:

So, you’re saying this is, for you, the biggest factor. For both of you. There is a customer who thinking about a problem in a different way and you’re aligned and you created that unique value proposition that was not there before.

Keith Messick:

Yeah. I think you have to ask yourself, “Could we create raving fans? Do people care that…? I mean, I think Gainsight’s a good example. I think Zendesk, way back in the day, is a great example. Customer support software sucked, every party hated it. If you were in customer support, you thought, “I’ve made terrible choices and I’m using terrible software.” And if you’re having to deal with customer support, something’s going wrong, and so, it’s just a transaction where every single person is miserable, right?

Keith Messick:

And Zendesk came in and said they built something that was a beautiful experience, and they celebrated people in customer support, and suddenly in the 2009/2010 space being in support was actually pretty cool. And it was because they had motivation, right? Both parties had motivation. I want to make customer support cool and I’m in customer’s support. It would be really great if it didn’t suck so bad and you line those things up and I think good things happen. And I think Gainsight had a very similar experience.

Gil Allouche:

Dan, are you in agreement?

Dan O’Connell:

Yes, I am. Sorry. I’m going silent on this stuff, because I think we’re in agreement on it.

Keith Messick:

Shocked.

Dan O’Connell:

I am, flabbergasted.

Gil Allouche:

All right. I’m going to change gears for a second because I feel, you worked together before so I want to talk about something else for a moment there. Where did you work together? And I want to hear, usually I ask my guests to talk about their #failmoment for themselves. But since you both worked with each other and you love each other so much, would you be able or willing to tell about the other person’s #failmoment when you were working together and loving it so much?

Dan O’Connell:

Oh, man. That’s a good question. I know this is on the spot too. I literally…

Keith Messick:

Dan and I are both perfect. So it’s really hard.

Dan O’Connell:

No. I’m honestly trying to think of a failed moment. I’ll do a failed moment that there’s probably the two of us. Because I think it gets into a little bit of category creation, but, I was overseeing revenue and Keith was overseeing marketing and hopefully people pick up the rapport between me and Keith. I think Keith’s awesome. I would love to work with him again. So, we had a #workfromanywhere, and that hashtag we had prior to both me and Keith, joining Dialpad. We did not lean in hard enough.

Dan O’Connell:

So, this is a failed moment of owning, I would say, owning a category, or owning some marketing around this. Fast forward, a year and a half later, we now have been, obviously, challenged going through a pandemic. And now, everyone talks about work from anywhere. And I’m like, I think it was a massive missed opportunity for all of us to see, “Kill the desk phone, we had us a hashtag.”

Dan O’Connell:

And then this work from anywhere we were the first ones to brand it and now I just see it everywhere, and it irks me to be like, “Oh, we could have been the brand that really could have captured that moment.” And that’s not on the marketing people, and as I said it, it’s not one person’s mistake or failure on that stuff. And I really think there are failures in life, there’s just things that you learn from, and that’s one of like, “Hey, if you had this good idea, sometimes you got to stick with it a little bit longer. Sometimes you got to scream it from the rooftops and lean into it.” And I think that was just a moment that we missed.

Dan O’Connell:

But as I said, with a crisis moment that we failed on, or Keith suffered through it, honestly, and there’s not one that comes to mind.

Keith Messick:

I should have predicted the pandemic. If I would’ve, I missed that one.

Dan O’Connell:

Where were you on that?

Keith Messick:

I know. No. I think my answer would be, probably, it’s actually related to what Dan said, is just inconsistent. I think we had a habit of a little bit of a shiny object problems at times and when we would find something and we were like, “Oh, this is the thing.” Half the team was already looking for the next thing, you know what I’m saying? And then by the time half the team caught up with that half of the team, the other half of the team had already started looking at the next thing.

Keith Messick:

And so, it was never enough, I think, just holding on tight to something. And it takes a lot of discipline.

Dan O’Connell:

Yeah. And going back to Gil, to where you were, the initial part of the conversation around category creation, I do think, if you have that moment in time and you can solve that problem, what I think the best companies do is they’re solving not one, they understand, specifically, the problem and the opportunity that’s there. And I think what becomes a little bit challenging for other businesses, especially as they scale, is they start to get distracted on what actually is their cate… They get almost pulled out of their category.

Dan O’Connell:

And so, you suddenly see these startups because they have pressure of scale, perhaps the initial category that they’re building in is going to tap out on the TAM, the Total Addressable Market. And so they have to figure out how to innovate and drive differentiation. So they start actually leaking in to other places. And I think, at times, that has been much any business that gets to scale, that’s been a little, at times, one of those challenges for us. It’s like, “Hey, what’s the core problem, the core category that is true to our DNA.

Gil Allouche:

Distraction, shiny objects. Very important. I think, you started mentioning it in the beginning, Dan, when you were talking about conversation…

Dan O’Connell:

Conversational intelligence.

Keith Messick:

Conversational intelligence. Thank you. So, I think I have an idea what you’re referring to. Can you tell me a little bit about competition? Category creation and competition? How do you deal with that? So, maybe you’re doing something great, it is very unique and suddenly there are others using similar words and talking about other things, maybe they have the same exact features or less. What do you do with that? How do you handle competition in the path to category creation?

Dan O’Connell:

So, I think, and I can talk to… Again, running a company for the first time, you learn a lot of things. There’s definitely things I would’ve done differently for context. So, I had joined TalkIQ, I was the second CEO, I took us through our series A round and we were very much pre-revenue. Now, at that moment in time, there was a massive opportunity to own the conversational intelligence space. And I would say, Gong and Chorus, where two of our direct competitors, we had all raised similar series A’s all of us were pretty much pre-revenue very early on and where we were so it’s was a three-horse race at the time. Where I think we went wrong was actually not leaning into building a strong advisor network.

Dan O’Connell:

And I think both Chorus and Gong, I think Gong does this exceptionally well, of, “How do we go and partner with other sales leaders as a way to go and drive product adoption within the organizations that you aspire to have as customers?” And I also think they went really, really big in terms of their branding and marketing.

Dan O’Connell:

And I think they are the loudest voice in the room on some of that stuff. And when you become the loudest voice in the room and all of us, especially early stage, they almost suck the oxygen out of places, which I think can be really helpful, right? You tend to be able to raise large rounds that gives you more ability to go own the markets, right? You suddenly can go and you can buy a market, right?

Dan O’Connell:

You’re able to afford discounting and those things, but you can go and look bigger than, perhaps, you are. You can show up at Dreamforce with the biggest booth. And I always tell people as the startups is, “Don’t show up at Dreamforce with the smallest house next to your competitor that’s got a bigger house, it’s not a good look and if you don’t show up, nobody will notice that you’re not there. They will notice you if you show up and have the smallest house.”

Keith Messick:

A hundred percent.

Dan O’Connell:

And so, I look back to those moments of category creation, and I think there are some tremendous things that people can do around leveraging networks and advisors and leaning into that and creating ways to drive organic adoption within aspirational customers. And then, also, just leaning-in hard to marketing. And I think it’s a balance when you deal with your board, because your board at that moment in time is, “Hey, you’re early on revenue.” They want you to be really mindful of burn, especially if you don’t have a lot of revenue coming in, but, you also need to find ways to generate and build momentum and to take shots at the competitors that are there.

Gil Allouche:

You said so much right there. I wrote a few things.

Keith Messick:

He’s long-winded.

Gil Allouche:

No. It’s bad-ass. You said a few things that I was hoping you’ll get into, so thank you. That was very, very insightful. Keith, what do you have to add to that? If at all?

Keith Messick:

I mean, he said so much.

Gil Allouche:

No pressure, Keith.

Dan O’Connell:

Keith, the answer is just to say you agree.

Keith Messick:

I agree. I don’t think I remember the question because Dan talked for so long.

Dan O’Connell:

I was asking about competition. Competition in category creation.

Keith Messick:

Yeah. Though, I think, I want to just get back to, Dan’s, his trade show thing. That is, I could not agree more of, you can lie in the digital world, you can not lie in the physical world. So, the person with the biggest account, checking account, shows up at Dreamforce, and if you’re in one of those little spaces, that looks pretty sad. I mean, you can Photoshop your Tinder photo, but eventually you’re going to have to show up on the date.

Keith Messick:

So, totally agree with that. I mean, I think competition, honestly, I mean everyone says this, but, no competition, no market. I think your goal, in the perfect scenario is to lead a category, clearly lead the category, and they get a bunch of competitors who are willing to spend marketing dollars, which, basically, triple and quadruple your awareness, because for every dollar you’re spending, they’re spending dollars as well. And you just plan on winning on every shortlist still, anyway.

Keith Messick:

I mean, that’s the dream. Competition can actually increase your efficiency because they’re driving awareness to your category and if they don’t, then it’s all on you. But your preference is to be way out in front, not starts, so that you’re not really in a huge fight.

Keith Messick:

And I actually think Gong’s a really good example of that. I think Gong did great things, I thought they invested in brand early. They just use data as and asset and they used it with an audience that cares. Sales is a great audience for this. And it was all like, “We analyze the million calls and here’s the five words that will help you close more deals.” Stuff like that. And I thought the product marketing there was excellent. And who didn’t want that?

Keith Messick:

And people would start sharing it. And then, salespeople were using Gong as a little bit of a badge of honor, I think. So they did a really good job. And then I actually think that competition, they just made them bigger.

Gil Allouche:

That is interesting. So competition, actually, can keep you honest, keep you effective. They do the marketing for you, but actually you bought a grade at… If you can be the loudest speaker and set up the narrative early on, and invest in it, then you get more funding, then you can do more of it. It really is interesting because, again, it reminds me of Kris, he just said, “I invested in branding awareness and got a great creation from day one.”

Gil Allouche:

He didn’t necessarily knew what it’s going to look like, but he did a trial and error and invested the money in it. And both of you, from a marketing and sales point of view, agree. Making those bets and investing-in versus doing a more of a-

Dan O’Connell:

Sorry to interject, we’re also the go-to-market people, though. And I think that’s also a balance and a challenge, and when you have technical founders at times, that believe truly and in product-driven growth, which is, “Hey, if we just built the best product, people should naturally want to use it.”

Dan O’Connell:

And I think that can be a challenge early on. I see you’re laughing and smiling Gil, so hopefully that resonates to some extent. But I think that could be a challenge, right?

Gil Allouche:

Yeah. It does.

Dan O’Connell:

Which is, as you go into an early stage startup and you’re like, “Hey, we need help to get there, but we have to invest in go-to-market motions,” which is getting sales people and investing in marketing and brand, and that can be its own debates and argument, depending on, as I said, the makeup of that early stage team of just where they come from in terms of their perspectives. And those are real dynamics that show up in the startup world and in seed-stage businesses.

Gil Allouche:

It resonates on million levels, right? I am exactly that technical founder and product driven. It’s never the case that the best product wins. I mean, not never the case, but it’s not the reason. Maybe, in consumer world, maybe in some other places, but I definitely recognize that. And so, it’s very interesting to hear the go-to-market lead with what makes the go-to-market, right?

Gil Allouche:

That’s what makes you era triple and the NRR and people putting a synonymous with the category name you’re trying to do in the customer’s mind, whatever it is. So, it’s fascinating to hear it. I’m trying to, first of all, I should get myself another glass of this, but really, I’m trying to learn what is that stage? At what point do you go all-in?

Gil Allouche:

Once you have product/market fit, let’s assume you have product/market fit, you know that you created something that is superior, better product, it’s different than the others, there is some proxy, right? Todd, from Workspot, he said, “There is a proxy to your category, it’s better because otherwise the analysts are just thinking you’re a weird animal, is going to take you a while”

Gil Allouche:

[Ideanna] from Hootsuite and a Yammer, there was nothing similar. So she had to get her an army of customers, telling the analysts, “This is completely different, but you should still cover it.” But many times it’s not completely different, even in our case, there’s a competitive marketing, which is adjacent, but there’s demand and ratio, and other aspects of demand gen.

Gil Allouche:

At what stage do you say, “I’ve proven enough bullets from a product perspective, customer attraction, product/market fit in general, I even have some go-to-market fit, repeatable process that I am comfortable with.” At what stage do you say, “Let’s move away from the technical founder, I need to survive.” To the, “I’m going to go all-in and make bets that might be dangerous, but if we’re not mistaken, then we’re going to be the number one leader in that category.” Teach me, what is that moment? So I can recognize it and then make that bet.

Dan O’Connell:

Ooh, good question.

Keith Messick:

I feel that moment’s just as soon as humanly possible. It’s really hard to set that… I mean, I think product/market fit is probably a pretty good indication because, I think, if you’re trying to brand-build and build a category pre-product/market fit, it’s going to be really difficult because you’re constantly going to be trying to iterate your way to something that people will actually want, and the next dollar’s easier than the previous one.

Keith Messick:

But, I think it’s close to that as possible. And I know there’s no fairy that flies into the room and says, “You’ve achie…” Like there’s a sound, and you’ve hit product/market fit. So, I know it’s not that. You don’t just know it right away, but it’s close as possible, I think is when you start investing in brand, and/or category. I think that, especially in B2B, it’s gotten much better, but it wasn’t that long ago when people just didn’t think brand mattered in B2B. And it’s absurd now, I think most people acknowledge that.

Keith Messick:

But I think the earlier you do it, the more you build a company around it, which I think is helpful.

Dan O’Connell:

Yeah. To add on to Keith, I don’t think there’s a moment in time. I mean, you can look at benchmarks and you can look at expectations around growth to say, “When should we re…” If you’re in the top core tile of businesses at similar stages, all of that is pretty open to go and see. My general take is, look, building a startup, working in startups is all a risk. I think one of the biggest risks is actually not swinging the bat.

Dan O’Connell:

And I think people can get nervous around that. And again, it’s taken me 20 years in a career to suddenly realize I’m in this because I want to take swings. I don’t want to get called out on strikes. And so, that means that you got to have enough capital to go up against Goliaths… Some of our biggest competitors are Google and Microsoft and RingCentral and Zoom. So, if we’re like, “Hey, we’re trying to be really practical on spend.” I can tell you how this would… You’re shaking your head. I can tell you how the end game of that works out. It’s not rocket science.

Dan O’Connell:

And then you’ve got to care about the narrative and you’ve got to have enough funds to go and fight differently and do things and take a swing at it. Because, I can tell you what it’s going to be like if we don’t lean into the momentum we have and spend and try to raise capital and all of those things. The Goliath will bleed you out.

Dan O’Connell:

And I think the same happens in category creation that, there’s no moment in time, generally, I think you’ll feel it and see it. And I know that sounds fairly generic, but when you start seeing consistent wins and brands and people like to pay attention to the size of brands, potentially, those are the moments where I’m like, “Hey, if you can go raise as much money, that makes sense. And then you got to think about dilution and all of that stuff, and valuation and valuation is a blessing and curse, depending on what you want to go and achieve.” Then I’m very much, “Hey, you’re in this trying to make swings, go and take a swing. Because I can tell you, you’ll probably look back at the end of your life and say, “Oh, did I take that swing, or did I play it conservative?””

Dan O’Connell:

It’s taken a bunch of years to go through things that we didn’t go and do and wish, “Oh, darn it. I wish we had done that,” and so forth and you regret it. And so, then it becomes… And I say this to Craig, our CEO now, all the time, which is, “Let’s go take swings. We’re here to go take swings because we think we got a great story and a great product. Let’s go for it.”

Gil Allouche:

I think Craig is very lucky to have that conversation with you, because I think that is exactly… Look, there’s reality and there is the future, right? And a founder has to constantly live in both. And if you’re not living in the founders, there is nothing to work on. There is no revenue, there is no funding, there’s no product, you might as well go home. There is no future.

Gil Allouche:

But if you also only live in the present, then what are you living for? The biggest promise is what you’re going to do in two years. And so, I can really resonate with that. And it’s amazing because it really is that… I was just having this all-hands with my team and I was telling them, and I was the first one to be all about survival, “Look, we have to survive, we have to figure out our unit economics, we have to do the product/market fit, the NRR, the growth has to be there,” and then we achieved it.

Gil Allouche:

It’s like, “Awesome. We’re surviving, we’re good. Now is about thriving.” And now it’s above thriving. And now, it’s about being the first. And I think that step is tough, especially if you are accustomed to adversity and scarcity and you have to really remove yourself from that mindset and jump into the next, which is, “I’m going to start making bets.”

Gil Allouche:

So, let’s say your founders, they’re game, you convince them like, “All right. I’m ready. I’m ready to take bets.” I know very little about baseball, I almost said football, I know very little about baseball, but I understand the analogy there. What does it look like in terms of execution? So, you’re having this conversation, you raised enough to take the first bet. It’s not the 30/40 million on a 40X, but you have enough to whatever it is. What does it look like to take the first bet? What kind of a risk would you take? The first one, in your priority?

Dan O’Connell:

I mean, our biggest risks, then get into you’re betting on your go-to-market motions, which gets into, just, even added sales capacity. We added for just, it could be some number. We added at 147 people in my org last year alone. And we did that through a pandemic on onboarding, and trust me, we had raised a $100,000,000 round, but, that’s where I take a deep breath now because I’m like, “We’re going to go do that again this year.” But, those are the moments where you’re like, “Okay. I’m now betting on myself. I’m betting on our execution. I’m betting on our operational cadence, and most importantly, I’m betting on really the frontline managers.”

Dan O’Connell:

And I say this a lot to different people that I think that the frontline managers in an organization are really the lifeblood in an organization. I don’t think they’re given nearly as much credit for everything that they do because all of the onboarding and training typically falls to them. It’s not falling to… I’m far enough to removed, I’m giving the orders and the strategy, but the day-to-day is there.

Dan O’Connell:

But those bets, at least for me, really come down to, “Do we have the right talent? Do we have the right motions to go and fill those butts and seats to help hit the capacity model?” Because I can tell you if we don’t get the hiring model and we don’t hit the ramp model, it all goes sideways. And I can tell you what happens when it goes sideways, we miss numbers, and then we lose people, and then that creates its own slippery moment in terms of… The culture goes sideways and you deal with attrition and all of that.

Dan O’Connell:

So, the bet starts with, what do we think is the opportunity then get into, we’ve got to build a model that makes sense, and then, gut checking the model to make sure that we’re not being too, we want to be aggressive, but we’re not in ludicrous mode because I’ve seen some people of ludicrous mode.

Dan O’Connell:

And then, it comes down to, “Hey, do we have the right pieces in place to actually do this at scale and do it effectively?” So, I think, there’s a number of moving pieces that get into that. And I see people that, sorry, go for it.

Gil Allouche:

No, no, no. You please, finish.

Dan O’Connell:

I was going to say, and I think there can be pressure on models, right? To begin with. Which is, if you are trying to raise a lot of money, there’s always this growth expectation you’re getting to, but at the end of the day, you’ve got to hit those numbers. And the best company is, obviously, in public markets, are the ones that are setting reasonable expectations and then consistently beating them.

Dan O’Connell:

And I think at times founders can feel that they need to come up with a model just to hit a number in order to raise a certain amount of money, and then, they get into trying and actually execute on that number and it’s not reasonable. There’s no way that they can get to it. So I think you got to have some sanity of leadership in there that can go and gut check that stuff.

Gil Allouche:

Totally. And you were talking about evaluation and being a double edged sword, I think that, I don’t know if that’s the word you used, but, you get the 40X, or, especially these days, right? You can have 30/40X, 50 sometimes, or even more, and then you have to graduate to the evaluation. Good luck, wherever it comes to your head in a particular period of time, please.

Dan O’Connell:

Sorry to interject, Keith, I’ll let you talk at some point. Don’t worry.

Keith Messick:

Yes. I’m going to take a nap. It’s fine.

Dan O’Connell:

Evaluation is a blessing and a curse. It’s great for marketing, right? It’s great to go and say, “Hey, here’s our evaluation.” But you also have to make sure that you’re in a TAM, that’s big enough to support it. And what I mean by that is, sometimes you can be… You’ve raised such a high evaluation that your only path to surviving is going public, and then being a good public company.

Dan O’Connell:

And so I think, at times, there are great businesses that can get to a hundred million or can get to 50 million, then the TAM is simply not big enough to support the growth expectation and then their evaluation is so high you’re like, “Okay. Where do you go?” You’re too expensive to necessarily get acquired, perhaps you go the PE route, and those are real things that come into it too. So when I’m speaking about evaluation, it’s good to understand your game plan of what your exit strategy? And then, is your TAM big enough to go and get you where you want to be?

Gil Allouche:

It’s fascinating. In real time, I’m thinking about my company, I can’t avoid it. And I think I got it wrong, because, when I think about evaluation and the 30/40X multiples, I’m thinking, the moment you do that, let’s say you got a 40X multiples on your NRR, or what have you, now you have to graduate there using… That’s not the problem, you’ll get there. That’s the bet you have to make.

Gil Allouche:

That is exactly taking the bet, but it is, ahead of time, you should calculate the TAM, the immediate, or soon, Total Addressable Market, ARR, you could make, if it’s 50 or a hundred, there is a limit there. But if it’s a billion ARR you can make, don’t think about it twice. If you think you have the best product, if you think the market is big enough to be served, then go and try that. And there is no limit.

Gil Allouche:

If you do your job, of course, don’t be ridiculous that the ludicrous situation we’re talking about, let’s assume that’s not the problem with the technical founder, because they’re very connected to the ground. The other problem is even more dangerous, which is not taking that to begin with. And there is no reason not to do it if the target market is big enough.

Dan O’Connell:

Yeah.

Gil Allouche:

Inspirational, Keith, what do you have to say about it?

Keith Messick:

I’m motivated.

Dan O’Connell:

I can tell it Keith.

Keith Messick:

So motivated. The question was about bets, is that right? When you make them, I think the bet is on inefficiency. Are you willing to bet? Are you willing to increase your inefficiency or decrease your efficiency? However you want to look at it. Because, to me, that’s the ultimate bet, right? This gets put into all sorts of… It could be CAC, payback could be whatever you want, right?

Keith Messick:

Are you willing to invest those things, knowing that you’re going to drag that number up when you want it to go down or down when you want it to go up or whatever it is. You’re making a bet that goes against what, logically, you would say, “Well, we’re at 18, we’re going to take it to 30, but our goal is 19,” but you’re making the bet that it works itself out, right? That’s the bet.

Keith Messick:

It’s always a bet, especially at this stage, because the reality is that as the numbers get bigger, oftentimes the mechanics that got you there don’t work. So, you’re having to both set bigger goals and try and fill the gap of how you’re going to hit those goals with things that are unproven.

Keith Messick:

But I’m with Dan, I just feel, if that’s not the bet that you’re willing to make, within reason, I mean, I think the balance is, you want to be aggressive, but not reckless. Then why not go get a job at Google? Seriously, it pays really well. You push a pixel around every now and then, take a few days off. Do you know what I’m saying? That’s not a bet.

Keith Messick:

So, I think it’s always a bet, but I think the key is just trying to find the line between aggressive and reckless and trying to really lean in to being inefficient and that being okay.

Dan O’Connell:

Yeah. I agree. You bring up a good point on that, on the inefficiency thing, because all of that invest, right? Your cash burn suddenly spikes, and then you’ve got to get… And people can be impatient on results and usually things take a little bit longer, right? So then, it’s a case of not getting spooked immediately, right? If your cash burn suddenly, doubles, I think it’s well said, Keith.

Keith Messick:

I think, the other thing is that, I think this town gets really focused on hiring as a success metric. You know what I mean? They’re hiring 300 people last year, and everybody was like, “Oh my God, they must be killing it,” right? It’s great. And then they lay off 150 people and everyone says, “Well, maybe not.” So, I think you try to make the investments… In the marketing side, you make investments in programs spend long before you make investments and tripling the size of your team or whatever.

Keith Messick:

You try and start making the bets that you can, eh, maybe that’s not going too well, I can turn it down a little bit. Whereas if I take the team from 10 to 50, well now I’ve got 40 new people, and we’re sitting around trying to figure what to do. So, I think that, sales capacity, Dan talked about this, you can make anything work in a model. That’s the beauty of it. But, I think once you start really leaning into head count, you have some indication that this is working.

Gil Allouche:

You said a bunch of things that I want to go back to. So efficiencies. Dan you said you hired, I think 140 people, you said?

Dan O’Connell:

Yeah. 147.

Gil Allouche:

Holy shit. That is ridiculous. You hired so many people, and you said it Keith, there is no chance of not making mistakes. I think, I don’t know, I’ve been in that story with a smaller number, much smaller number, like 15 people and it’s tough, necessary, but tough to keep the bar high and make the decisions that are unpopular about the mistakes you’ve made. You hired too many people, not all of them were good, and now you have to fire a bunch of people, it hurts the morale, but everyone is asking what took you so long? How do you do this… What is the level of inefficiency that is not ludicrous, but it is opportunistic? That’s the first one, let’s start with that one.

Dan O’Connell:

So I can give it from my perspective, I definitely am, and I hate to say, “the voice of reason”, because that’s not the right… I’m the sales guy. So, at the end of the day, the way I think about my job is, “If something goes wrong, nobody blames product. I’m going to be the first person walked out the door.” And this will take me on a tangent of why I wanted to run a business first being the sales guy, and blah, blah, blah, blah, blah.”

Dan O’Connell:

So, I do know at this point, I think it’s important, if there’s any sales leaders listening to this, I do think it’s important that you do not expect somebody else to be the voice of reason, you have to be the voice of reason, of, “Are you comfortable with the numbers?”

Dan O’Connell:

And if you are not comfortable with the numbers, at times, you should fire your boss, which means you should not sign that… Because I can tell you what will happen if you miss the number, you will get fired, you will get walked out the door. And I think it’s really important for people to understand, you’ve got to be, as the person responsible for the training, onboarding, hiring, hitting the model, exceeding goals, you got to be comfortable with the numbers. You got to meticulous know the details of your team and the performance of that team to feel comfortable to go do this at scale.

Dan O’Connell:

There’s always things, I don’t necessarily know how to answer if, what’s the reasonable bound of… I dunno if there was a metric that I looked at, some of the growth rates and stuff like, “Oh, that’s going to be a…” I know when it’s a stretch and where I feel comfortable.” But I don’t know if there was a band that took me out of things to a little bit of a non-answer and a rant-

Gil Allouche:

You answered it. First of all, let’s drink. I even added a little bit of ice.

Dan O’Connell:

You’ve already spilled some.

Gil Allouche:

No. I didn’t spill, it’s just the ice. I’m not there yet. It takes me at least [crosstalk] spilling and be ridiculous. Not there yet, but please do get a drink. You did mention, Keith, I think growth efficiencies, right? You mentioned like CAC, LTV, I think some other, be okay with being less efficient, be patient with having metrics that don’t necessarily match the patterns of the VC, who wants to give it the next round.

Gil Allouche:

Do you have any, I don’t know, how’d you call it? Borders or strict lines of what makes… Does LTV to CAC of one is bad or is it two or three or… Three is good from what I hear from CFOs, but, what is the level, what is the number that you look at it and say, “Don’t freak out, technical CEO, it’s going to be okay and let’s give it another year or another nine months. And if we see the trajectory doesn’t improve in nine months, then let’s have this conversation, but we have enough runway, let’s make this bet and wait patiently to see if the market catches up.” What does it look like?

Keith Messick:

Yes. I mean, I’m going to give you a non-answer to that question, but then backdoor into another answer. I mean, I think so much of that depends on the individual business, it depends on your net retention, depends on all of those things. So, if you can be really efficient upfront, if you’re expanding one and a half in the next 12 months, even better, if it’s the next six months or whatever it is. So I think there’s so many factors that play into that versus just any one number. And I think this comes down to, your average skill size, time to second dollar, all of these things that would give you more [crosstalk]

Gil Allouche:

Let me pause you there, because I think I can… I let’s just throw some theoretical complete out of bound numbers. Let’s just say 60K ACV, 81 days to close your deal. Let’s say three months into the annual contract it doubles in size. Let’s just use some of those completely hypothetical numbers.

Keith Messick:

Let me give you a… I’m going to take Dan’s answer and your question and mash them together and see what we get out of this, right? It’s going to be a casserole. I don’t think I have specific science on this, but I think when you look at your inve… You take a model, you’ve just modeled, I’m sure, for the new year, right? And you’re trying to decide on efficiency and this, that and the other, I think it’s like, when you look at the model, how many assumptions have to come right for you to hit the model?

Keith Messick:

And then I think if it’s five, you’re totally screwed. If you’re like, “Okay. In order to hit the model, we were going to hire a hundred people. We’re going to get ramped down 30%. We’re going to increase deal size by 20%, we’re going to reduce churn by 8%. We’re going to decrease our average time to first dollar and we’re going to decrease…”

Keith Messick:

You start piling up all of those assumptions that need to go right. And I think once you cross about three, you should start getting really really nervous about the investments there. Because at some point you put so many assumptions into a model and what you’ve done is you’ve just modeled for a business you don’t even have. It’s a stark contrast from your actual business.

Keith Messick:

Now, that doesn’t mean that you’re like, “We’re going to work on reducing ramp, or we’re going increasing our spend a pipe, or we’re going to work in our win rates. But if your model doesn’t have anything that’s static from the year before, then I think you’re totally toast. And I think I’ve seen that in the past, when, this is why I said you can make anything in the model work where you… And I’ve gotten models where I’ll look and I’ll be like, “Hey, not just throwing this out there, but it seems like the average deal size is supposed to double between Q1 and Q4, what’s the thinking there?”

Keith Messick:

And then, someone says, “It’s what we put in to make the model work.” I’m like, “Whose job is that?” Because what you find is that, in sell X13 of some model is that it’s something that isn’t anyone’s job, right? It’s this thing that has to happen that no one’s working on. “Well, cool. We’re hiring sales enablement. Got it. Deal size? Well, we’re moving up stream or we’re adding skews that allow us to sell more product.”

Keith Messick:

But you have to find those things in the model that no one owns. That someone is just put in there for shits and giggles, and those are the things that should cause you pause and I think you have to be really careful about investing in things that don’t have an owner.

Keith Messick:

And meaning that, “If I am dependent on these things to happen, then who’s going to make it happen? And quadrupling the deal size from the beginning of the year to the end of the year.” I’d be really suspect of how that made it into the model.

Gil Allouche:

I wrote down how many guesses versus actuals in your model. Greater than five you’re fucked. Is that accurate?

Keith Messick:

I’m going to call that the five, I’ll go and I’ll workshop for you, but five seems where you should start to get a little suspicious.

Gil Allouche:

And by that, you mean, things that didn’t happen in the past that you’re expecting to magically happen in the future.

Keith Messick:

Yes.

Gil Allouche:

So, if your ACV is growing steadily and it’s your model, that’s cool. If your sales cycle is going, because your ACV is growing in a particular trajectory and you can predict it, it’s okay. If velocity, is cool. There is one thing that is new, let’s say, the ramp up time, you’re expecting the next 50 to ramp up faster than the first five. That’s okay. That’s the risk you’re willing to put in the model.

Keith Messick:

Yeah. I mean, in a perfect world you end the year and you say, Oh, just in the simplest way, “Hey, we put a dollar in, we get five out. And so, now I’m going to put 10X the dollars in, nothing else has to change. We just need to hire sales capacity, we need to do whatever, and we’re just growing, the investment is linear, it makes perfect sense.” It rarely happens that way. That is the dream, right?

Keith Messick:

But instead you start saying, “Okay. Well, we’ve got to deviate somewhat from the business that we just clo… That company that just ended the year and we’ve got to start making some changes,” right? And I mean, that’s very natural. There are things that you’re like, “That’s not good enough, needs to be better, et cetera, et cetera.”

Keith Messick:

All I’m saying is just, once you get too many of those, and you start running your business and suddenly you’re just running a different business than the one you just ran, and that is where I think things fall apart. Craig at Dialpad used to always talk about the triple, triple, double, which is the classic VC thing.

Keith Messick:

First triple, in the grand scheme of things seems impossible, probably not that hard. Second triple, we were like, “All right. This got pretty challenging.” The double, once you’re trying to double from 30 to 60 or whatever it is, well, suddenly, you need to do as much revenue in one year than you’ve done in the history of the company, that’s when it gets really challenging. And that’s when, if you’re not careful, you’re the victim of model pawn, which is when someone’s just hidden a bunch of assumptions that, and you’ve now got a business that needs to create $30 million and it’s not a business you’ve run previously.

Gil Allouche:

I’m going to call this episode, I think, the hidden gems, or hidden truth for a technical founder, because I learned, I think, more in this one than in many others, because you represent the complimentary person next to me driving the business. It’s the conservative founder or the technical founder, I think usually those are the same, because it’s an engineering in the backend, they know how to fix for those, they know how to make sure the triple, triple, double happens.

Gil Allouche:

In fact, they’ll reverse engineer the shit out of the numbers to make sure it happens. But the other part that not even… When do you take the moment to actually go all-in is the Achilles heel. It becomes the Achilles heel. Usually that company gets acquired because of that exact reason, because they have the best technology and superior product, but they raised like 5% of what the other market competitors did.

Gil Allouche:

And so, I think it’s fascinating and there’s a lot of lessons learned for the technical founders. I want to ask you about a hundred more questions, but I’ll stop here because the hour ended. I want to ask you each, one advice because you gave so many already very, very important insights for technical founders and for technical CEOs. One piece of advice for a founder who finished their series A, achieved product/market fit, and is thinking, “How do I move from five to 15, and then to 30, and to 60?” Granted that they think they can, who do they hire? Or what’s the next thing that they should do? One piece of advice that is the most important for that person.

Dan O’Connell:

Ooh, Keith, you want to go first? I’ll do the de facto [crosstalk]

Keith Messick:

I’ll go first.

Dan O’Connell:

You can go.

Keith Messick:

That’s good. I’ll I won’t take as long as Dan normally does. So you’re going to have to hurry, Dan, with your answer. I mean, I think I have a lot of advice, but one thing I would say that really just stuck out my head is that you have to invest in formal strategy early. It’s something that I think that people don’t do. Someone has to own the strategy. The strategy has to live somewhere so that people can see it. Like our go-to-market strategy. How we think about the world.

Keith Messick:

What happens is that you don’t hire, necessarily, a head of strategy at a series A, but the reality is that, it’s just happening and you just grow. And then, at some point in the future, you’re like, “Oh, people say, what’s our strategy?” And you’re like, “Well, I mean, it’s the thing we’re doing,” which isn’t really an answer.

Keith Messick:

And so, I just think that the sooner that you can formalize strategy in the business, it actually helps scale, it helps you gut check a lot of decisions that are getting made on whiteboards and then suddenly they’re off into the world versus, “Does this really match with how we think about the world? How we think about the market?” Really formalize that because what happens is that, I just seen it many times, where you wake up series C, series D things have been really well and then things taper, you’re like, “We’re killing it.” And then it’s, “Oh, so that next dollar was just a tiny bit harder than we were expecting.” And there’s a lot of SaaS companies that died in the graveyard at 90 million that were racing to 90 and just fell and tumbled over a hundred, right?

Keith Messick:

Their growth rate just completely went in the tank. And I think a lot of times it’s because, it was too late. They didn’t have really a sense of what their strategy was for growing that. They just had a lot of details. They were too focused on executing and not focused enough on the point yet.

Gil Allouche:

Can you give me one small example of a strategy that correlates to that advice. A small example, a small checkup to do, something that I can, I don’t know, something tangible that they can say. “Okay. We’re working on those things. We’re solving those-

Keith Messick:

Yeah. No. I mean at Dialpad, I remember one time we just did a really simple 9-box exercise, just to see where the products fit in the world, really pressure testing that concept because everyone has an opinion, you know what I mean? That’s the thing about startups, everyone’s got an opinion, and because the company small enough, everyone’s opinion matters.

Keith Messick:

You got IBM, there’s like four people whose opinions matter. You know what I mean? Everyone else just does the work, but you take a hundred-person company, 200-person company, those opinions really matter, and the people doing the work that work is impactful. And so, we hit pause. Dan ran strategy at Dialpad before he became CRO.

Keith Messick:

I think he’s still CRO and tragic because he’s a diva, but, we went through and actually tried to operationalize some of this. So just go through and say, “All right. Well, let’s look at the market and where does our product actually sit? And let’s pressure test that. And where is the demand? And is it priced properly? And is that just us being, are we just believers, because you need to be believers, or are we completely kidding ourselves,” right?

Keith Messick:

And I think doing that early on helps you gut check decisions. And I just think that big companies are really, really good at strategy, right? They’re typically not always great on the execution side takes forever, too much bureaucracy, this, that, and the other, and small companies, aren’t typically that greatest strategy, but they’re really good at execution. They’re nimble, they move fast, they get in and out of mistakes quickly and I’m like, “You marry those two things, good things happen.”

Gil Allouche:

Thank you. Dan.

Dan O’Connell:

I’ll take us on a little ramble to close this out. So, Marc Andreessen sits on our board and it’s super interesting to meet with him.

Keith Messick:

[crosstalk] name drop in my headphones, sorry, [crosstalk] my ears.

Dan O’Connell:

What is interesting is there was a moment in time and he said, “Look, the truth is in the growth rate of the business.” And it was incredibly profound. And, as I said, sometimes the advice that you get it’s not rocket science. And I would say, for this it’s understanding, where are you distracted and how do you limit the distractions and really focus and lean into where you see acceleration?

Dan O’Connell:

So, that was something that I think is general advice, which is, “Don’t try to do too much, and then also pay attention to your growth rates. And you always want to have one product or a product line, whatever it might be, that is breaking out and demonstrating accelerated growth.”

Dan O’Connell:

And I think that might mean that you have to make hard decisions to drive focus, might means that you’re in a back out of an area that’s slower growing to go and lean into something that’s faster growing, and again, that means that you have to be willing to take risk and be willing to step into it and bet it all. And to Keith’s point, I would reiterate really having a plan for the future and having somebody spending their time thinking about what the next version of your product is, or if you were to start your business today, would your business and product actually look the way that you have built it?

Dan O’Connell:

Because I think what happens is, it takes on average what 10 years for a startup to get to an exit, now, you pick up 10 years of Frankenstein Code and things piece together. And I can tell you people constantly just add things on top of it, where you would probably, if you were to start your business today, you would probably do it very differently and it would look different. And I think it’s important to actually force the leadership team or the executive team to actually talk about those things, to say, “Do we need to continue on this path that we’re at? Or do we need to think about potentially shifting gears and doing things slightly differently?”

Dan O’Connell:

And again, it just comes back to reiterating Keith’s point, which is, you got to really think about… Strategy’s a word and it can just float out there, but I think you actually have to have a meaningful vision of the future and the competitive landscape.

Keith Messick:

Yeah. I view it as, it’s the skeptic in a room full of believers. I think you need it. You need that one thing that’s really asking the hard question of, “I know we all believe, but have we thought about that?” And a lot of times you don’t want the skeptic in the room, right? Because it’s like, you got to believe, but I think it’s really helpful to think about… That’s why I say, the earlier you can really formalize that, “Who is our audience? What do they look like? What is unique about them? How does our product align to that? Where can we grow? Can we raise our prices? Do we have any idea? Would they stay with us if we raise prices? Where’s the adjacent market? Is there an adjacent market? How do we grow this thing? Is it through expansion? Is it through adding more skews? Or is it just like, we have a big enough market of first-time buyers?”

Keith Messick:

I think those things just happen and then they disappear. They’re in people’s heads. And I actually think it just helps you hire people better as well. I can’t tell you how many times people will be like, “So, walk me through…” I hate the word strategy because it has… I’m like Dan, “Just, walk me through the plan.” And then what happens is, the plan is the goal. “Our plan is a hundred million dollars,” and they’re like, “That’s a goal, that’s not a plan,” right?

Keith Messick:

And that’s what happens is, I think the earlier you can have a plan, because you’ll have goals the whole way, right? We’re going to have, “Here’s our goal. Here’s our goals for product. Here’s our goal for sales. Here’s our goal.” But a goal and a plan are two separate things. And I think like a lot of times you’re just hauling ass and everyone’s focused on the goal no one’s focused on the plan.

Gil Allouche:

I listened to both of you, a lot in the hour because I have personally, so many listens in this in these podcasts. And I think the interesting part is that both of you speak the same language from different point of view, marketing and sale, but you still have similar point of view in different gems, but they resonate extremely well with me because many things that you say about your risks, you talk about your own risks, like you have the pessimist or the inquisitor in the room.

Gil Allouche:

Do you have someone who is thinking about where exactly is the customer? Do you have someone who thinking about the product strategy? And this whole conversation is reminding me how having a complimentary person to you. If you answer those requirements, if you have someone else who answers to the exact opposite requirements of, “Let’s take the bet now, let’s make a big bet. Let’s hire a hundred people.”

Gil Allouche:

And, if you have someone who takes care of the risk and make sure there is a reality check to everything, and it’s just that, it’s not enough because then you’re not going to make it big. You’re going to be surviving and it’s sustainable, but not going to make it big, which is not interesting.

Gil Allouche:

And then, if you’re going to do the other way round, you’re going to be successful like 5% of the time, because you’re going to fail so many times because the circumstances are going to remind you that you’re making a lot of mistakes and not thinking it through.

Gil Allouche:

So, it’s my lessons from the here that having someone like you in the room and reminding, and pushing to get that thought process and taking that risk, and of course, making sure to mitigate that risk, but taking the risk and making the tough decisions of going big is a huge piece of the puzzle. And I think that’s going to resonate with a lot of, again, technical founders, or just practical founders, which is, again, good, but also dangerous.

Gil Allouche:

So, I personally learned really a shit ton from this podcast episode. I want to thank you both. I’m going to start thinking if there a pattern here, the fact that both of you worked together before, the fact that the both of you go-to-market leaders who are more on the commercial side versus on the technical side. And I think it’s very interesting because there’s so much wisdom there, such a cliche, but it’s true. There’s so much wisdom there on the go-to-market side that is missed by founders that are trying to build the best product that is a half, at least 50% of the formula.

Gil Allouche:

So, that’s a long way of saying thank you, we’re twelve [crosstalk]

Dan O’Connell:

Yeah. Thank you. Just remember, we can’t build anything. So we need the technical [crosstalk]

Keith Messick:

That’s right. But just know that there’s more wisdom in marketing than sales. I mean, that’s really important.

Gil Allouche:

Good final sentence for the end. Look, we’re 12 minutes above and beyond. This was extremely insightful for me. I can’t stress this enough. So thank you both for being very candid, hilarious, and fun to learn from. So, big thanks. I really appreciate it. And I will send you a recording of this and, shit, a lot to learn, and I’m really excited to implement some of the things that I already learned. So, big thank you, again, and have a wonderful rest of the week and good weekend.

Keith Messick:

Yep. Good to see you all.

Dan O’Connell:

Yap. You too.

Gil Allouche:

Thank you Dan, thank you Keith.

Keith Messick:

Good to see you, buddy.

Dan O’Connell:

Yeah. You too.

Gil Allouche:

Love you, guys.

 

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