Episode 18: Highlights From the 2023 Season

Episode Transcript

Shiv: Yeah, because at the end of the day, if your approach is creating more jobs in the market, the companies can employ those individuals and grow with them. And those people can also grow in their careers and work for their clients. Like inevitably you are growing alpha. It is going to happen over time, but you need LPs who think along that time horizon or look at investments in that way. And that's your job is to find the right LPs that map to that type of a philosophy.

Daniel: Yeah, I mean, look, if you think about impact investing in general, it's one of the largest, fastest growing parts of the market, right? So we are increasingly, I think people in general, LPs driven by two things. One is just, ‘hey, we want to - if we're an asset holder, we want to invest in things that align with their values’, and there are a lot of people with values that align with job creation, right? But I also think that a growing number of people are realizing, ‘hey, by doing this thing, I'm going to make more money.’ And those are the people we want to talk to. We want to talk to people who believe that by creating this impact, we're going to make you more money. Because at the end of the day - there was  just this article today, and I talk about this a lot - there is a war for capital out there. How you use your capital, if you're an individual, what products you buy, if you're an LP, what funds you invest in, it is, you're making an impact. You're making an impact either to invest in traditional businesses that are likely harmful to the world economy or to the world in general, or you're making a conscious decision to invest in funds and companies and products that are contributing to better things in society. And that is something that people inherently want. to do, I believe. And I think what we do and what our impact managers do is really critical.

Shiv: Yeah, I think you said something interesting there, which is that there is a war for capital, like the global dry powder, I think it's like 2.5 trillion or something like that. And so you have all this capital chasing after limited assets. And I would think that when you're in a deal cycle and competing with other private equity firms and they hear this unique message from you versus just a standard private equity firm that's trying to just drive value in the traditional ways, your message likely resonates with a big section of the market and you likely win deals because of that.

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Shiv: What can founders do and what are the things that institutional investors, strategic investors, the lenders… all of these folks that are part of this ecosystem are looking at when they're evaluating a business to decide whether or not to invest in that business.

Zane: I love that question. And this is Captain Obvious. You know, your listeners are gonna say, ‘Thank you Captain Obvious for coming and telling us these things.’ But here's the deal. Most entrepreneurs know these things, but they still don't execute on it. They let the day-to-day grind and just, you know, reactionary, keep me from these things or they just don't know how to measure it. They don't understand the lens of institutional bias. 

So let me give you some of the top ones that really matter and that we can assess. There's even really strong assessments out there and you know we've built one that we're trying to give the entrepreneurs to learn this. But let me tell you some of the main ones. Number one, growth. Are you having healthy growth? The relationship between your profitability, your EBITDA growth, your EBITDA margin, and your revenue. Those are two different things. And of course, you know, and all your listeners that are in the SaaS world know the rule of 40 that's really kind of changed into the rule of 50 or the rule of 60. But it's the healthy relationship of growth, both revenue and EBITDA margin. Now, here's the deal, Shiv. It's growth against your cohort. It's not growth against another industry - if I'm a managed service provider, growth against a SaaS company. It's a growth against your cohort. That is huge. Because I've had companies that are not growing. I mean, year over year, their growth is going down, but compared to their competitors, they're doing a ton better. So growth is huge. A growing company - you must be it because investors are investing in the future and risk-adjusted future cashflow. That's a big one. And I know that's where you're focused. And when we see a company that's struggling with their lead volume, their conversion rate, that's a real indication you're not going to give me as an investor that predictable growth I want. So that is just huge. 

With that is the quality of your income streams. Have you got mainly recurring revenue or is it reoccurring revenue? What's the combination of any one-time revenue and your recurring revenue? It's the quality of your revenue centers and the gross margin tells a lot about that. If you've got certain areas of your business that are consulting - which are awesome now, we're seeing CAS, consulting as a service, trade in some of the ranges as software as a service or infrastructure as a service. But it's that blend of the right income streams that are super attractive to these investors and how they're growing and what the future is. 

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Shiv: I think that's really one of the key things that founders of companies need to look at more often is that you don't need to go on this VC hamster wheel where your valuations keep increasing. Then for you to actually have a meaningful outcome from that business, you now need to grow that business significantly more than if you bootstrapped it and you slowly grew it over time. I think those incentives are not fully aligned for for the founder versus what the VC investor wants to do because they want to deploy their capital and get rid of the dry powder and actually grow it as quickly as possible. And whereas the founder may not even be able to hit those numbers because they're unrealistic.

George: Yeah, the number of conversations I've had with entrepreneurs with exactly that topic - I can't even tell you how many - in that there are less sophisticated entrepreneurs that are just trying to hit a valuation number. And I want a 100 billion valuation. And I say to them, what are you talking about? It doesn't mean anything until the end. And by the way, having a step function to your valuation, there's value to that. You know, by hitting 100 just because you say 100, the next one's 50, you've lost your momentum and you've lost a whole set of investors that would otherwise be following you. Whereas if you build it to 60 to 80 to 100 to 120 over time in a modest manner, you're showing that track record and there's value in that track record of valuation growth over time and conservatism over time. And it doesn't mean anything to you. There's a bit of dilution here and there, but the real end result is when you sell it at the end. That's the only valuation that matters.

Shiv: That's when you actually get the opportunity.

George: The other, I mean, the other, the junk point to that is that, you know, don't raise too much, you know, don't say - and then entrepreneurs will say, I want a hundred million dollar value valuation, and I want to raise $50 million. Like, what are you going to do with the $50 million? How fast are you going to invest it? And so generally, if you get into the numbers and get into the details, they only need 10 or 20. That other 30 is going to sit on their balance sheet. They will have raised it at this kind of early valuation, it would sit there and then they could have raised it later in a much higher valuation and avoided the dilution. So I think entrepreneurs, you know, they need the right advisors and they need people around them that can help them if they haven't been through it. And you know, we try and, you know, have these conversations with them and whether they - you know, we invest five to 20 million, whether they take five or 20, we're indifferent. We want to do the right thing for them. And then we'll put 10 the next year or five the next year - the right valuation, whenever that is. We'd rather them stay in control of their companies longer, and far too often entrepreneurs make that early bad decision to take too much money or lock themselves in a valuation that doesn't matter and is way too high to ever beat. And they get into the spiral of negativity and it's hard to overcome.

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Shiv: And so those numbers that are being discussed at, let's say, a senior or executive leadership team level or board level, is that being shared with the internal team as well so that they clearly understand what they're working towards?

Mike: Yeah, 100%. And the way we get pretty geeky about it, I love it. I'm sure this is music to your ears too, knowing you. But we start out with these targets. And so I'll get a little mathy here for a moment.

Shiv: Yeah, let’s do it.

Mike: So we start with a target. Let's say that this product line has a $20 million target this year to go get $20 million of new logo. Great. So then we say, ‘OK, of the $20 million, how much has marketing historically contributed in terms of marketing sourced business?’ And we say, just for simple math, let's say, well, of the 20, history would indicate that marketing can go find 10. And my sales guys would be like, ‘yeah, you're not doing the 10, you're warming up the 10,’ whatever. But marketing can go with the... interacting with the market, we feel the market can go contribute 10 million to that. And then we just walk it back and we say, ‘okay, for 10 million, we know we win about one in three deals, so we're going to need enough deals to put 30 million in the pipeline.’ And if our average ASP is X, we know we sell about one in four. We go backwards. from the win to the SQL to the MQL to the lead. And then we say, okay, to go get this many leads in MQLs, we got to do this much in paid search, this much in organic. We're going to go to these events. We're going to run these webinars. We're going to do affiliates. We're going to do G2, you know, you name it. And this is our kind of program to go get those number of leads that would yield that amount. So -

Shiv: That will eventually help us hit that target.

Mike: Right. So. Long, long answer to a short question is everyone should have, everyone in marketing has the bookings target on their monitor. What are we trying to achieve?

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Shiv: So let's start with the foundational elements. What are some of the pieces that you try to ensure are in place with every single company you're investing in?

Vinny: I mean, one of the things we want to do right off the bat is really clearly identify the ICP, the ideal customer profile. Who are we selling to? Who's going to get the most utility out of the company's products? And what that could result in is doubling down in that market or those markets. So market segmentation is really, really important. And I'll give you an example. We invested in a business that was a product lifecycle management software company. What does that mean? Well, it's a place where you store and track the bill of materials for complex manufacturing businesses. And this company was selling to about 11 different industries. And it turns out when you're really digging into the data, two of those industry verticals were driving the bulk of the revenue. Those verticals retained better and they cost less to service. And they were big markets. They were big enough for us to build a really valuable company. So we got aligned with the senior management team and got the company focused on just those two industries and cascaded that throughout the business. So what that meant was sales team focused on those two verticals, splitting the sales team. All of our marketing efforts on those two verticals. We took hand raisers elsewhere, but all of the defined effort on those segments of the market. The company even took quotas up, between 20 and 40% over two years. Now that's pretty substantial. And more sales reps hit their number during our hold. And what does that mean? It means those sales reps also made more money, right? And they sold better business. So where do we end up? We got a lower customer acquisition cost. We had stickier customers who are - they got high NPS, they're gonna stick around, they're gonna buy more from us, it's also gonna drive net revenue retention. So you end up with a business that is gonna continue to grow, but also is gonna get profitable as well, walking its way to rule of 40. It was a really great outcome for the management team and for JMI.

Shiv: Yeah, that's the interesting thing about segmentation, right? Because a lot of companies, even horizontal ones or verticalized ones, they try to be everything to everyone and really understanding which customers are either your NPS promoters or stay with you the longest and have lower churn rates or end up expanding their accounts with you over time. Really digging into the data and understanding that is a key first step. 

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Shiv: Yeah, and doesn't product marketing or messaging and positioning and things like that play a big role? Because enabling a rep like that at the front lines, they may have the data in terms of who they're going after, but what is the right messaging that they're putting out in front of the target customer? And is that aligned with what we want to say to those folks? So how much work is being done there to make sure it's a uniform experience for the end customer?

Matt: Yeah, I mean, there's a lot of software companies - and I'm going to generalize here. You have a charismatic founder who can go out and can sell. A lot of times, selling themselves. They go out, they've got all this industry experience, they got this vision for the company. It's like the book Crossing the Chasm. And you can win those visionary customers that way, but it's really hard to scale, and the majority of customers are not going to buy that way. With the majority of customers, they, one, need to see how this is going to be connected to their business objectives. You know, it's not just going to be the person who's hands-on-keyboard with the - you know, we work in software, but you know, hands on whatever tool it is that you're selling. They're not there to connect to some kind of business need and business objective. They're going to want some proof that it works. You're going to need some kind of a demo. You're going to have objection handlers. You're going to have competitors. All of those things. Very few salespeople are going to be able to come in without being given that and figure that out on the fly, right? That's a very low hit rate. So companies that don't enable their sales team with messaging, with training, with tools, will tend to have a really high churn rate for salespeople and they'll be frustrated and whatnot. Usually, companies get to a certain scale and they say, you know what would be much more efficient than having one in 20 salespeople work is, let's capture this information, let's have the tools, let's have a sales process, let's have the right systems in place. And then now you just need somebody who can, you know, can learn those stories, use those tools, and just is more responsible and hustles and good on their feet, you're gonna have a much higher hit rate on salespeople. You're gonna have a lower sales churn. You're gonna see way more sellers get to 80%, get to 100% that way. So you are right. Some of that is, what's the story? And you need a 10-second version of it, a 30-second version, a two-minute version, a 10-minute version, like a 30-minute version of your story for the different sales interactions you're going to have. And you're going to need an early version, which is to get them excited about the problem, not really talk about the product. You can need a middle where you really talk about the product. You need an end where you mitigate any kind of risks or hesitations that they have.

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Shiv: And then the other side of it is, I've seen companies - and we audit businesses all the time that have tons in spend and a PE investor will ask us to figure out where the efficiencies are - and specifically on paid media, I've seen companies continue to spend on paid media when their LTV to CAC ratio is incredibly low, or their payback period can be two, three, even seven years I've seen in worst case scenarios. But they're just continuing to spend because either they're in a hyper-competitive market where let's say there's two or three behemoths in the room and the cost per click is $40 or $50 a click, or they're looking at it at just a blended level and haven't looked at the channel, like detailed campaign-level reporting to see what's working and what's not. It might turn out that there's two heroes and the rest are just being pulled up by the averages of those specific campaigns.

Cody: Absolutely. Yeah, I think going to that next level of analysis is so important. And also your targets probably need to change based on what you mentioned, right? Like if your close rates are deteriorating because of the market or if your sales cycle is getting longer or your conversion rates or your ASP is going down, like it changes the whole calculus at the top. And sometimes, you know, if marketing is not super connected into those other business metrics, they might have a status quo based on targets that, you know, a year ago were efficient, but those targets need to change, right? And we have to make a change. I think also you can get in this sense of, you know, it's almost the status quo. It's like, well, we've always done it this way and we're just going to keep doing it and try to get a little bit better. You know, in some cases, these shocks are actually really positive because it forces you to kind of go back to zero and rethink how are we approaching things and is there a better way? And a lot of times you find these unlocks by being forced to innovate. And that's been really exciting to see like, oh wow, I was forced to cut my PPC budget 50% and I actually didn't really see any impact in my inbound flow. Now I have, you know, maybe I can get back 10% of that to allocate to something else and create a new program that's so much more scalable.

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Shiv: What made me think of something as you were talking through that is just how much of a focus, given that M&A is a part of your value creation philosophy, how much effort is being put into the upsell, cross-sell side and then also on pricing because that ends up becoming a way to expand those accounts or generate more revenue from the accounts that we've already landed.

AJ: Yeah, no, those are really significant value-creation levers. So we do do a lot of M&A, and then cross-sell is something we put a lot of energy into. And I think we're getting more and more sophisticated at it. In fact, we just kind of wrote a playbook on how to do cross-sell and all the considerations. Just the reality is, what the data would suggest, if you look at decades of M&A, cross-sell success far lags the goals that were set when the deal was conceived. And it's because there's a lot of things that you have to get right in driving cross-sell. And so we put a lot of energy in. Just like you have a targeting model for a new logo, you need to have a targeting model for cross-sell, for example, to say, well, who are the account? And the benefit of cross-sell is, you know, a lot more about the target account because they're already a customer. So then you think about, well, what are all the attributes of someone who would be a good fit for this? And then, you know, where are we housed? And then you have to think about, you know, what's the selling skill required? And are you selling to the same buyer? So there's a whole framework of all these different elements that we look at to figure out, first of all, where to target, but then what's the right coverage model to go execute that? Because sometimes you just need like the rep to focus on it. You just say, ‘Hey, I'm going to give you some extra cost.’ But sometimes you need specialized resources. It could just be a BDR or maybe you need a sales engineer, or sometimes it actually is just different enough. You know, very different, uh, sales cycle, very different solution complexity, different buyers. So even though you're selling to the same account, you know, it really could be extremely different. And a good example of that, that I think most people know, it's like look at Oracle when they're selling, you know, what they call tech, which is like database and middleware versus apps. For example, financial management software or HR software. They're just super different. So that's why those sales organizations are completely different. So you have to - when they make those acquisitions - so you have to just think it through in a very, very structured way. And then what you also have to do is just measure it rigorously. So you should then be looking at, okay, we've done all this work to figure it out. And... We've educated the customer. There's so many things and so many elements to get right. But then you have to measure it to say, okay, well, let me look rep by rep, like month by month. Are you creating pipeline? Or are you having meetings? Are you creating pipeline? Are you progressing that pipeline? Are you winning deals? What's your win rate? And what you're invariably gonna see is there could be certain reps who are much better at it than others. So, and that's natural. So it's not like, hey, I came up with this great enablement program and everyone's perfect. No, there's a huge learning curve. And so I think that's where, if you're really serious about cross-sell, you have to be intensive about huddling on a continuous basis and the right frequencies weekly to say, how's it going? What's working? What's not? Who's doing it? Who's not? And then, you know, let's problem solve and strengthen it. So I think the companies that are just really rigorous and structured and committed to it are the ones that have more success, but there's a crazy amount of variance in cross-sell. So that’s a good one.

Shiv: Yeah, there's some phenomenal insight there. I think your point about the industry data that says cross-sells are often overestimated. I think that's a really great point because I think often when we're modeling, you look at a bolt-on or an add-on and you're like, obviously, our current customer set will be a good fit for this other product that we're buying. But that doesn't always work out because maybe needs are different or the products are different or, or the sales cycles are different. And I think the other point that you said that's I think worth highlighting is this internal segmentation work, because we talk a lot about the external - how big is our TAM and segmenting that - but within the existing customer base who are the customers that would be ideal fits for the cross-sell and upsell so that we truly understand the whitespace revenue potential there because I think that's often overestimated as well. And then the other piece that jumped out is that I think there's a lot of work that needs to be done on the product side and the packaging side to actually make it worthwhile that even if you have a good fit customer, you kind of have to approach them in the right way with the right kind of offer.

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Shiv: Let's say two companies are looking for CMOs, right? The needs feel like they would be fairly similar across those businesses, but obviously, that's not the case, right? So every business is different and the marketing needs are going to look a lot different. So how do you go about calibrating and identifying those differences and figuring out what is the right type of candidate and what should go in that scorecard?

Mariza: Absolutely. So you know far better than I the unique intricacies of each CMO and what they can bring in terms of value to each individual company. But you know, the way that we look at each role is not just by way of the competencies and experience sets and sort of functional focuses, but also by way of who this person is and how they operate and the types of environments in which they've gained them. So CMO, for example, are you looking for somebody to focus on product marketing? Are you looking for somebody to focus on demand generation? Is this a corporate marketing function focus, and certainly, the combination thereof? How are we thinking about what this business needs to accomplish and tying that to the skill set of the CMO that we're looking for? Of course, no one is sort of all in the same, because you can also then - once you identify the functional focuses, you're looking at the environment in which they've been able to gain these skill sets. Is this an organic versus inorganic growth play? Are we looking at net new market opportunity or penetration of the white space? Are we looking at global expansion? Are we focused in North America otherwise. Are we looking at direct or are we looking at indirect marketing experience? How important is the channel or the partnerships piece? How important is this motion? Are we looking at PLG? Are we looking at ABM? Are we looking at a combination thereof? And of course, the breakout beyond that on the PLG side are all things that we are covering upfront through the intake. And then we're pressure testing through that calibration exercise so as to ensure that we have a clear command of - yes, we need a product marketing focus leader. Yes, our motion tends to be velocity, but indirect is increasingly important for us. And yes, we're willing to trade off on global because we've got some global expertise elsewhere in the organization, or no, we are not. And if that's the case, here's where we're aligning on compensation so as to ensure that we can attract this type of background to drive success across the organization.

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Shiv: Just from subjective - just hearing you talk about it and thinking about what the reality of a PLG company would be. It would be improvements in conversion rates, improvements in net retention and things like that. But just wanna hear, like, what are some opportunity areas that you're seeing?

Justin: Yeah, it's a great question, Shiv. So, you know, we have this Gemini platform and what we tell founders, and they usually agree with, is that we have built basically this data layer and data infrastructure at the Camber fund level. So we have a data team and a tech team at Camber that's built internal software and processes. This software does a few things. It plugs into the systems of all of our portfolio companies and it helps them and us make better data-driven growth decisions. But it also - once fully deployed, it collects over 500 data points, starting with product usage and engagement. So it offers product analytics. And so what that tells us is we're usually easily able to define an ICP or a high-value customer, but we're also able to define what we call healthy MRR, healthy revenue. Because along the growth journey, a lot of the founders of these PLG companies may be technical in nature and they've built an incredible product that serves a use case, but they may be facing headwinds and trying to go upmarket and sell to larger customers. And in order to do that, you have to realize what those needs are. So finding those high-value customer segments within the base and then building products for them is part of our core thesis heading into investments.

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Shiv: So let's say we are talking about geographic expansion into APAC, how would you go about that with a particular business to help them expand into that type of a region?

Allen: Yeah. So, great question. So we start with - so the core is really understanding what their objectives are and their strategic imperatives. So really thinking through what is it about the market expansion that they're looking for. Do they want to actually leverage the technical and sales and business development talent in the other markets and regions? Are they trying to expand and adapt into different types of multinational conglomerates that are headquartered in other regions? How do you think about their long-term goals and where they want to be as an organization, and how do we make sure that those long-term objectives are solved and then develop out a plan and strategy? From there, we then have, through the experience of a lot of the partners and employees at B Capital, we actually do have a lot of relationships in-region. And so how do we make sure that they're connected through a mix of people that can help them hire the right team members in, develop the right set of channel partners, make sure we're thinking through the legal, accounting, finance, thresholds and requirements that they're going to need to take into consideration, so there - and who are some vendors that they can actually be working with in partnership as well. So we try to broaden out and make sure that it's a comprehensive recommendation with near-term tactical solutions.

Shiv: Yes, a lot of it seems like connecting the companies with the right people and the right resources across whatever function you're looking at or industry or vertical or market or geography that you're trying to expand the business into. Would you say that's a big chunk of where the effort’s going is getting the right people connected or people in the right seats?

Allen: You're absolutely right that that's a big part of it. What I'd say though is probably even more important than that is really asking them the questions that they might not have been thinking about. So we've got a playbook that really is quite thoughtful and comprehensive around making sure, hey, have you considered these elements of your international expansion and the implications? So even minor things of like, hey, when you've got a customer success team, and you've got customer support needs, will you have the coverage in regional time zones that these account managers need? And will they be able to address regional specific issues that come up? Are you prepared for that? Is it designed to be able to make sure that you're actually gonna be successful when you go into market?

Shiv: Right. And it's almost like a diagnostic at that point where you're trying to ask them the questions and then - and build the strategy against - based on whatever work that they've done internally. 

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Shiv: How big is your team right now?

Andrew: Three full-time engineers and then three partners. Only one of us is actually full-time. Danny is full-time.

Shiv: Got it. And how do you manage - and I get the model and how you're explaining that, but I guess the more of these entities that you acquire, it's like, you know, it's like a common saying, whether you're doing a small project or a big project, it takes the same amount of time in some ways, because you kind of got to give it all of you, right? So the more of these entities that you have, you kind of have constant competing priorities. And so how are you prioritizing between these entities, even with the shared services model?

Andrew: So we stack rank first for the most recent one. So the first three months of any new acquisition, we try not to do multiple at the same time. That's going to be the focus, the newest one. And then once that's sort of on some kind of incremental feature path, then we can sort of stack rank by size, right? What is most important to the portfolio? And then of course there's little things like, oh, here's a growth experiment that we've been wanting to try, et cetera. But generally speaking, yeah, it's whatever we've bought most recently and then whatever's the biggest. But I will say something, I get the reason why everybody goes bigger in this business. Why does everybody try and buy bigger? It's because being able to hire dedicated staff to an individual portfolio company is like a huge blessing, right? That's a miracle. That's amazing. We don't have that luxury. Not yet anyways. And so the more that we can buy these products that are in the single purpose realm, product led growth and nearly complete as a single promise to the customer, it is not true to say that each one of these is the same amount of work. Screenshot was not that much work after we rebuilt the platform, which took me, I don't know, like three weeks. Now, when we bought a sort of less, like, a not product-led growth, more of like a sales - a sales-led growth company - like we bought a YC company. They were doing enterprise - like it was, it was just pure enterprise sales. The details don't really matter other than operationally. It was like very enterprise sales, right? So a small number of customers, extremely high touch. Operationally, that was very, very difficult, because it took all of Danny's time to handhold these bigger customers, even though the revenue numbers weren't that big yet. And so at some point, we decided to let go of WorkCloud and just focus on product-led growth companies. So, now sort of our buy box - outside of the fund we just raised - is product-led growth, single purpose, and then, you know, kind of secondarily when appropriate, we'll look at like a distressed venture deal. Sometimes knowing full well that it might be a sales-led thing. And we might be okay with that, but we tend to default now to product-led growth.

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Shiv: I don't know if it's an education gap or like a cultural thing where we think about growing companies. We think about the cool stuff like strategy or product or marketing and sales, but the more like pedantic stuff like accounting and finance and cash flow and, and things like that kind of get overlooked. So like on our side, for example, so we're a management consulting firm, fully bootstrapped, profitable from day one. And one thing that we always try to do is we try to only hire when we have 12 months of runway. That's like one example of how we make decisions. And we were talking about this week because we're thinking about adding some more team members to our team. And I was doing some cash flow forecasting and just out loud, I kind of blurted out, it's like, in general, you're told it's like ‘strategy, people, cash’. That's like the scaling up model. It's like, what's the strategy? Who do you need? How much money do you need? But in this type of model, like your cash flow affects your strategy just as much as your strategy affects your cash. And I think that's one of the things that founders don't connect the dots on, right? Because that's not where their head is. But really keeping a track of like, how much cash is going in and out every month? Do we have that? Do we know how many invoices are due? When is our AR coming in? How much do we owe in terms of our APN payables and all the foreign exchange risk? Like little things like that can make such a big difference in your cashflow position. So if you're not really on top of that, that becomes a pretty easy way to come in and have a pretty good handle on the business.

Krista: (32:28.478) I think you're absolutely right. And we don't talk about it like that, although I think I might start, because I like the way you're - I might steal some of your management consulting speak. But that is in principle, what we're saying is, ‘Look, this is how much money we have coming in. This is what it's costing us to bring in that money. And so this is what we have left, and what leverage do we have?’ So, for example, we came in recently and we just said, ‘Look, we need to raise the price.’ And they're like, ‘Well, we have contracts with customers and we can't - customers will leave.’ And we're like, ‘Well, if we raise the price at 50% and we lose 20% of our customers, and we know this is a really sticky product and we go to our customers and we're like, look, it's just,’ I said, ‘right now this is a good business but the unit economics are fundamentally unprofitable. So what are we all doing here? If your customers won't pay what it actually costs to run this product, then this is not a real business.’ And founders just don't necessarily think about that. And so everything is about if we want to spend more, if we want, where can this cash come from? Can we reduce costs? Can we increase revenue? Can we bring on new customers? But in some ways, bringing on new customers is the last thing. First thing we're doing is saying, how do we make today's revenue more profitable? Because that we already have - growth is an unknown. And I think too many founders see growth as either given or there's like, oh yeah, I will sign this deal and like, maybe, but maybe not like, but you have the deals right now. So what could we do with this?