EP 131: Andy Price (Artisanal): Executive Hiring Advice from the Founder of Tech’s Top Recruiting Firm

24:14Person A, person B. And so when you're doing that, I guess, ultimately, people grow over time, people change. And the reason you got maybe didn't work out the last business, you could be successful in the next one, or the situation is going to be a little different versus the existing business that you're going into. And so what are you trying to tease out when you're doing the back channel or references? I guess, how do you actually go about it? You call me up and you say, hey, Logan, I saw you were on the board of this company. What do you think of? Do you ask me? do you give a name or do you say, hey, I'm interested in a search?

24:45Do you know anyone that comes up that might fit this bill? Yeah, it's going to be a noncommittal answer. It's totally situational. A lot of times the VCs get filtered information through the founders, as you know. So they don't really know what the execs are living with every day, as you know. They might be smart enough at board meetings to be like, all right, we're going to have the execs come in there and the founder is going to step outside for a few minutes and we're going to hear directly what they say. But this is such a pro-founder world and has been for so long that VCs are afraid of pissing off the founder by bank.

25:11We want to hear directly from the horse's mouths, what's going on on this ranch. And that's just not happening. And so you have to actually get to the operators. You have to get to the operators. And so what are the things that are important to tease out? If you're trying to think through if the situation's actually going to match, you find someone that's actually worked with them or under them, or I guess, who are the people that you're looking for? And what are the things that you're trying to tease out in a back channel? You got to have one or two people that work for them and a couple of peers.

25:43So unless you're talking about a CEO, which is a different kettle of fish, and let's be honest, that community, there's not a lot of Slootmans running around and Slootmans done. How many Slootmans are there? David Acharya, I can list a few world-class executives and CEOs that were brought into high-growth companies. And so most often you're talking to execs that are going to report to a CEO. You have to understand what the peers have to do, have to say, because sales can take over a company. And honestly, it's the biggest population center after engineering. And most often, sometimes at scale, they get bigger.

26:13So there's a lot of risk in those transitions and in those hires. And so if you don't understand how they operate with other execs, like they beat up on the product people every single day because they kept throwing stuff over the wall to sell whatever they could sell, that's a big theme, right? They just come back from the field going, if you can't build me X, Y, and Z, I can't make the sale. And then it's on you. You failed the customer. That's a dynamic you have to suss out. You have to understand, like, are people professional about how they go about that, like I said, that linkage between the field and then the product, you know, organization, product and technical organization.

26:44And if they're not professional with that, being, having good judgment on, like, what is this, can this customer buy into our roadmap or do they have to have this thing right now? Because then you get pulled in 50 million directions and then you don't have any linearity and your engineering team's suffering and they start to quit. So you really have to understand, like, how do people conduct themselves with peers? It's extremely important. How do they show up in meetings? How do they show up with customers? Do they convert? Do they hit their numbers? And then in the early stages, you're really looking for these personal conversions.

27:15Are you in the field? How much time do you spend in the field? Actually, I have to ask a detailed question. Tell me, in the last year, how many miles did you log? How many flights did you take? How many customers did you personally touch? And then in the later stages, you're like, okay, tell me about when you missed a forecast, missed a number. How did you build pipeline quickly when you knew your recorder was going to be soft? how do you do planning how do you interact with finance to get the to get an annual plan together and then how do you do instrumentation when you think about instrumentation as a priority right and so you start thinking about when do you start doing ipo reps like we're going to beat and raise even as a private company those are the conversations start having when you start becoming later stage if you're lucky enough to get to later stage those are the high class questions and issues that you're going to sort through because you want to be a public company You don't want to just have lumpiness where you can never show the street that you're actually a well-run company.

28:07That's where things start to really change and get interesting. How long – when someone's making a hire, how long do you encourage them to think about like can this be the person for – is it two years? Is it five years? Is it situational? I tell you, man, anytime I hear a person be like, oh, they're just going to get us through next year, I'm like, how naive could you be? Because think about this for a second. You hire a VP of sales. They turn around and they hire 20 people. When they get fired, guess what those 20 people do? They follow them out the door. Then what? Then you're going to be flat.

28:38You're going to have nobody talking to customers. You really have to look at people and go, okay, I know they can de-risk me from zero to 20 million. Can they presumptively go to 100? Can they be Steve Raj? Can they be Chris Degnan? There are a bunch of people. Cabrisco. Again, you go back to this. There's not a lot of people. There's this guy, Todd from Confluent. Blanky knows his last name. He took the company from basically zero to 100 million. And then they brought in Erica. we have a hand in that um who's been there for a thousand years now and grown it to a billion dollars and her her wisdom and the same with cofoid at databricks the wisdom of those two people was they figured out how to keep their claws in those first vps of sales that built the company who are the gems in their organization what are they doing right you can't just be like coming in and throwing people out of the company because they weren't your people that you find gems in there and you want to you want minimal disruption and i really think that like uh abnormal the same thing brought in president and their cro this guy kevin stayed he's going to stay through the ipo and everybody wants their hooks into him because he grew the company from almost zero to whatever you know very big very big and so the point is is that you know you talk to kevin he's like oh i'm here and and deceiver made my life easier for me and so that's those are where you see people grow out of this whole like resume obsession into obsession around building a company And that's what everybody should be thinking about.

29:57How do I make this company gigantic? If I can do that with all my heart and soul and conduct myself in a professional way along the way, then I'm going to be a big winner no matter what. If I just jump around trying to find the next hot thing, I'm going to end up with a weird resume and probably no wins. how can founders um stand out it sounds like we talked a little bit earlier about storytelling and that being a big like anything else i mean at the end of the day you're trying to get people to buy into the vision are there other ways that that you've seen founders successfully stand out to differentiate themselves in a ever-evolving kind of competitive market it comes down to soak time if the founder's really smart and they go you know i really like this lad logan or i really don't like this guy, Andy, I'm not going to spend any time with Andy.

30:41I'm going to spend all my time with Logan. All right. How much of that person's mindshare do I occupy? And what are they asking me that I need to spend a lot of time answering and D, you know, demystifying for them? And what are the key things this person's in their head? It does. Nobody cares that you remember what their daughter's name was. I'm sorry. That's a myth. They just don't care. They want to know, like, did you really hear me when I said, I think your margins are going to be a little crazier. I think Like your assumptions around, you know, your competitors are a little questionable.

31:11Like you really didn't drill into them. And then the founder goes back and does more homework because, okay, I'm competing against X, Y, and Z. Here's our architecture. Here's our architecture. Here's why the thing wins. And I'll give you a couple of customers that will validate that. So they really run down the concerns that the executive will have. They listen intently and they spend a lot of time with them. I mean, I tell you, I have one of my best founders. This guy's going to take a company public. His company public, guarantee it within five quarters. and it's going to be a monster. He spent 35 hours with this president that he hired, 35 hours, singularly focused on that one person.

31:46Looked at the market, said, I don't want to talk to these people for these reasons. I do want to talk to this one person, hired him. And then that person has made the company IPO ready in less than two years. Was the 35 hours, how much of that was selling versus diligence? Honestly, man, it was a discussion about the business. Most of it, like first probably four or five hours was like, do we want to work together? It turns out they drove the same kind of car and they lived in the same kind of neighborhood and had a lot of things in common. But that didn't, that was not going to carry the day.

32:13What they did, it was, and I actually advised both of them. I was like, why don't you guys just dig into the P &L? Just dig into the, who's, what reps are making, you know, who's making attainment? Who's attaining quota? Who's overperforming? Who's underperforming? Why? Let's like drill in to this thing. And really, so you both have extreme conviction on each other. It was a painless process in the end and a home run hire. And so that's something a lot of people don't do. Like you'll see these founders do these fly by 30 minute interviews with people. You go, what are you talking about? You can't even barely remember a person's name in 30 minutes.

32:43You're not going to get any quality material out in 30 minutes. You got to soak with people. Everybody's got a story and everybody's got a plan. And you know what? You can build that plan. There's actually a few executives. I mentioned Slootman earlier. And he used to tell me that he never really wanted to hire anybody that had 100 % of the resume he was looking for. It was like 70 % or 60%. And like, I'm going to make this 40, this role is going to be the next 40%. and really cared a lot about tugging the line and people that like synthesize the things that he would say and then comes back to him, not just plays it back to them, iterates on it.

33:14And then it's had more interesting ideas than maybe he did. And then he'd be like, that's my candidate. When these things don't work out, not over time, but like in the short term, are there things that stick out as the most common failure modes that you sort of see when you make the wrong hire? Biggest one is expectations. so a lot of times you'll have like these early stage companies will go over hire because they'll be like oh i want some heavy hitter like de-risk me to 100 million bucks or like that person's not going to go out and get on a plane and do that you know scrappy hustler stuff and then the founder gets really annoyed because they don't they know they're on a short time horizon right they got to work on this next financing and they got to execute and they get to the five millionaire to get the growth round or whatever you call you know whatever their metric is or their their deliverable their milestone and then the executive is focusing on the wrong thing so it's It's lack of alignment between founder and executive on exactly what the critical work is on a literally week by week basis.

34:09You've got to stay so close. When the two diverge and there's not a – this is the other thing that happens. Nobody's training the founders to be CEOs and sit down with somebody and have a professional conversation and be like, hey, this is not going well. This is what we need to do to correct. This is what later stage companies do or public companies do routinely. The HR component is just missing. They don't even have an HR person. It might be the office manager. It might be the front desk person is playing the HR role. And so you really need to teach these founders to actually like operate with a new executive where the expectations might not be lined up with reality.

34:42Or you went in the market thinking that your better mousetrap was in fact a better mousetrap, which is only iteratively better. And it wasn't actually going to convert a lot of customers. So what do you do? Do you pivot on product? You just fire the sales exec and blame that person. You see what I'm saying? So it's like a constant alignment, constant communication. And I think these founders are just not very well trained in actually being CEOs and understanding the big picture and saying, do I fire for this person? Am I set back six months, a year, three months, six days? In the case of one founder, I saw him shoot the, I hate the words shoot, fire the senior sales exec, elevate the number two.

35:21And the number two is a home run. So, you know, you got to give people freedom to hire around them and build a team so that you have some continuity there. But I don't see enough people doing that. How do you make sure that you don't let perfect be the enemy of good? Or at what point do you say, hey, this is the candidate pool and I realize you think there's a snowflake out there. And maybe there is, but we haven't found that snowflake yet. Like, how do you advise founders? And you got to get someone in that seat and time is money at the end of the day versus holding out and trying to find maybe their ideal candidate that checks all the boxes.

36:01Yeah, I talked to one of the smartest founders I've met in years recently. I mean, just a brilliant, brilliant woman in the AI world. The company's gone from zero to 100 million in two years. I know you're going to ask me what company. I think I know. You can knock later. I think I know. You probably do. Yeah, yeah. And so she just said, you know, I want this. I want that. I want the other thing. I don't like these companies. and you're like, well, you just walled off the talent population in like 80 % of the places where you want to find AI engineering talent. You're saying you hate those companies.

36:26So where exactly do you want to look? And so you really have to coach them into opening their aperture. And early on being like, perfect is indeed the enemy of the good. How do you define perfect? And is that realistic? There's always a delta between theory and reality. The question is, how do you close that gap and get people to just see the market for what it is? It has to be a discussion almost like you're looking at a bunch of numbers although that sounds impersonal or even cruel in some ways to compare humans with numbers but that's kind of how you have to look at it empirically like here's the market here's what the market will bear here's what the market will not bear here's why and if that's a conversation that's data centric like data oriented as opposed to just your conjecture or just you know you're off the cuff stuff founders will usually smart founders will adapt their thinking early enough to correct and then go after the right people because you're right.

37:18If search takes longer than six months, in the end, most often people capitulate and hire the person that just is like, okay, I'm sick of the search. I'm sick looking at Andy Price's team or whoever, my car competitors. I'm sick of this whole dynamic. I'm just going to hire so-and-so and hope that it works out. You really need to get these hires done inside of six months to optimize the outcome. 90 days, people are like, oh, I want it done two weeks. I mean, that's undisciplined, but somewhere between two or three months and six months is I'm smiling because we just had a founder do eight days.

37:49So I know that guy was unbelievable. I think it'll work out. That's a rarity though. That was a rarity. I hope it works out. That founder was unbelievable. Yeah, he's a - The fact that you knew the candidate didn't hurt you. Yes, yes, yes, yes. That definitely helped. I'm curious, as you move from the founder-led of all this, we talk about founder-led sales, but let's say like pure founder recruiting to at some point you need to build an engine that at least has an infrastructure that your other executives can hire as well. And maybe they need to hire. Maybe it's a CRO. They need to hire a VP of sales.

38:23Maybe CTO need to hire a VP of engineering, whatever it is. sort of mechanizing the organization to have the infrastructure to hire well. Are there important things that stand out as it sort of transitions from the founder being very much involved in every single key hire to maybe it's a VP level and ultimately you're going to delegate a little bit more to the executive that it rolls into? Are there things that sort of stand out in that transition? Oh man, so much. Yeah, so much material. I'll go right to the highlight and just highlight a company. I won't name the company, but it's these young, brilliant college dropouts.

39:01They built a really interesting business model, but all the best VCs, the company's growing at an absurd clip. I don't know that the only two companies I've ever seen grow faster than this one named OpenAI and Anthropic. This one's a very close third. And when I told these founders, I said, what are your hiring choke points? And they were like, well, we need to hire 40 engineers in the next quarter and we want them all from Databricks. I was like, well, yeah they said how you can do that i'm like you're not and so you know what's happening is in the last three years because this economy's been a little weird for tech as we know i won't go into why here i don't have to um you know you've had this like de-emphasis on you've had talent has been de-emphasized in terms of the acquisitions internally like you have to build that muscle early you have to actually have a recruiter on your team and actually treat them well and treat them like they're an inside player, tell them what you want, be talking to them as much as your sales leader or your marketing leader, your engineering leader, product leader, because those people are the people that are going to inhale the talent for you and run this process and make sure that your job isn't full-time recruiter.

40:02Founders have a lot of masters to serve, as you know. They need to be out selling and, you know, raising money and whatever. And so if people don't build that talent muscle early and often and invest in it, they're going to get choked. I mean, I can't tell you. When's the last time I talked to a founder that wasn't sitting there freaking out about 2025 and their hiring plan was just not, they were not going to even come close to making their hiring plans. And that is their choke point to growth. So I think it's fascinating, right? The shift from, you know, the view that, oh, there's a person on every street corner last three years.

40:35And now like after the election, the talent wars kicked into world war five and it's become insane. Every single offer for every single candidate has four or five competing offers, it's really absurd. If you have any kind of good bio, good resume, good track record coming from good companies, everybody wants you and they've all figured it out very quickly. And people have gone from kind of playing defense, playing offense, and nobody's really thinking about, well, not nobody, but very few companies are thinking about, hey, the first thing to do is just, what's the choke point? Well, I don't have the mechanism to inhale talent.

41:07And some of the backend engineers you need are just as important as the best salespeople you need, as you know, or the AI research person or whatever, you, the founder, are not going to be sitting there on LinkedIn for 24 hours a day trying to scrape around and look for these people. And hiring recruiters, half of them don't even know what they're looking for at those levels. And those are yet critical, technical people you have to acquire. And so I do believe that investing in a strong internal talent mechanism is way more efficient. Not just cost effectively, forget the cost. A lot of these companies just have money that burn on stuff like this.

41:38it's just really about how do people allocate time and if there is a specialist group that's talented that can do that internally i'd say use those people more than recruiters externally and so when are you bringing in uh maybe ic recruiter type and when are you bringing in vp of people as early as humanly possible but is it is it first 10 is it first 50 is it uh employees what do you think say at about 20 employees is when the founders start going well it's getting a little harder. I'm starting to scrape around and the talent bar is kind of getting lowered and lowered. And I really don't like that.

42:10And I'm spending all my time recruiting and selling people. And I'm actually leaving all these other things to smolder. That's not a good scenario. Do you encourage people to start with a VP of people type or start with an individual recruiter? It's ICs. And then you pick the best one and you make that person, quote unquote, head of talent. Then it's a VP of talent. I'll say that it was just open information. Anthropic did a really smart thing. They hired the top VP of talent from Databricks. Like at a really important moment, that was a big hire. The smart for them to do that, for them to aim high.

42:41Now they went from zero to huge, really fast. So that's kind of an anomaly. But I would say that people sort of not aiming too high, but really investing in that function, I think, and having a high bar, making sure those people come from A plus companies is important too. Because they in turn, even the talent people of the networks, It's all about how fast you can tap a quality network. Those are the muscles that you build. If you can build those muscles in any functional area or in a centralized talent function, you can blow through hiring choke points really fast. People ignore that idea or that critical function.

43:17You don't need an ER. You don't need an employee relations person, compensation. You can outsource that stuff to someone like a Nancy Connery was the first VP of HR at Salesforce. Of course, those people are around and you can find them later. But that talent acquisition muscle is something that too few founders are thinking about building early. And I assume bringing in maybe one to focus on technical, one to focus on go-to-market. Ideally, yeah. Yeah, exactly. You dual-thread it. Your two biggest, like I said, employee centers are engineering and sales. Yeah. So just those two, and you can try to figure out the marketing stuff.

43:49I'm not saying marketing is not important, but those are ancillary. We generally operate in B2B and marketing is generally a smaller percentage of overall sales and marketing expense than something like CPG. I guess how important is it as you sort of set up this internal talent infrastructure and all that, how important is it to run very consistent processes and go through in a structured manner as you're sort of bringing people on to the team and going through the funnel versus allowing people to draw between the lines or paint and be a little bit more exception oriented given talent can be an exception business?

44:24I mean, the best run companies have, it's very interesting to ask that question, because if you look at the best companies out there, what they do in common, what they all do in common, they actually do have a filtration system. It's like if people don't fit this criteria, they're not going to work here. And we're not going to have, because, you know, having riffraff around, it's just, it's distracting. They take up a lot of time, they're disruptive, and you got to fire, and then you look like a high turnover kind of company. Now, turnover is inevitable in tech and any other industry. But at the same time, you really want to keep it at 10 % or below.

44:53if you can. And a lot of that just has to do with like, look, these are the five or six things these people have to have in order to work here. I can't stand the word culture. It's so outdated. It's ridiculous because you have all these subcultures in these companies, engineering subculture, finance subculture, engineering product sales. It's a value system now. Like, how am I going to conduct myself? What's important here? I think to sit the water cooler and talk about how pissed off they are that the election switched and they didn't get their way and whatever, that's a waste of time. You're here to work.

45:22So what are you focused on? Like, how do you conduct yourself? That's important. And so I see these really great companies focusing on that. Like, what are the attributes of the human being? The resume, it's important, but not the only thing. It's what they think of their duty to their employer. I know it sounds old school. You are employed by an employer, not just a founder. It's not just a club. This is a company. This is a going concern that's got a lot of money at risk for a lot of people. So let's get it right. And I think that the gene pool engineering, as Vinod Coastley used to say, is important.

45:58Inevitably, there's going to be trade-offs in any higher. Maybe you get your exact candidate that meets every requisite that you had coming in. But I'm curious, do you encourage companies to make sure, use the skillset as a table stakes of like, must be this tall to ride the ride and then solve for the culture and maybe allow that to be a little bit more developmental on the skillset side? Absolutely. Great question. Or do you use the opposite where, you know, culture is within a zone and then skillsets are the requisite that you need to have? You don't even talk to people that have some reasonably applicable background that they should be in your field of view.

46:39Yeah. You know, you shouldn't be talking to people that are like application layer, JavaScript engineers, if you're going to do something really interesting and foundations or training or any of these other more advanced things of today. Yeah. And so in that case, then you're solving for culture, assuming that the resume will tell you roughly the skill set and then spend more time orienting on the culture. There has to be a reason someone's in front of you and then you can get to the soft stuff. Absolutely. Yeah. Yeah. I guess one of the things that we've sort of talked about or alluded to earlier is when it feels like you might be outgrowing someone on the team.

47:18And obviously, it's something that no one hopes to have happen. But I'm sure a lot of times you get a call from a founder to sort of give an example of this. And it's, hey, my VP of sales is doing a great job. It seems like he got us, she got us from zero to 50, 75 million in recurring revenue. I'm starting to ask myself, are they going to be the person that's going to take us from 50, 75 to 500, a billion? And you don't know. How do you – are there questions that you encourage them to ask of, hey, is this person going to be the person to take you through the next stage of the journey? Oh, yeah.

47:55100%. I mean the first thing founders have to ask themselves is why am I asking this question? Am I the – like a lot of founders will say, oh, okay. well, this person in their resume never got past 75 million ARR. Well, that doesn't mean they can't do it in the next one. Degna didn't do a$3 billion thing prior. Neither did Briscoe. I mean, like these people, sorry for bringing up the same people, but a lot of times founders just get, they get happy feet in some ways, or they get trigger happy, whatever your metaphor is. And they start saying, well, this person hasn't done this, so I feel like we need to top them just because they haven't done it.

48:27And you're like, okay, well, what are the symptoms? And then when they don't come up with any symptoms to give you, Like there's nothing, there's no coughing and sneezing and vibrating coming into that unit. So like, why are you thinking about this? Are they hiring? So this is the question you ask. Are they hiring at the right clip? What's the turnover rate in that organization? What's the attainment rate? What's happening operationally speaking? Are we hitting our number, beating our number? Are we wildly swinging, blowing it out one quarter, not blowing it out? What are the issues that you feel insecure about this person's ability to scale with you?

48:56And a lot of times founders can't answer that question. So I'm like, hey, keep the person you have as long as you can. But the biggest issue, like I said earlier, is about founders just don't have this training to actually sit down and have a quality conversation with a human being. I know that sounds soft, but it's where the rubber meets the road. Hey, you're not getting these things done. I know I told you to focus on growth last year. We can't triple, triple, triple, double, double, double. That's not realistic. So what we're going to do is we're going to come up with a plan. And the biggest area where I see sales execs, this is the first thing I ask the founders.

49:28Okay, once you've done this internal checklist of why you're really convinced you need to upgrade this person, and again, I hate the words. Let's just change this. We need somebody with different skills, is how do they do forecasting? How do they roll up a bunch of data and actually pin a number and then orient towards that number and beat it or raise it or whatever? But they can't miss it wildly and then not know why. And why is that an important, the most important thing? Because the best companies start practicing their IPO reps at like 50 million, 100 million. If you're not practicing IPO reps past 100 million, you're going to get to 200 million with a lot of bad habits and really not even understand.

50:05Like you'll blow a quarter right into an important finance manager. You get ready to go do your roadshow. If you don't know why, that's the most important thing. The revenue leader and even the marketing leader, you know, somebody asked me the other day, it really is a very high profile marketing thing. And again, I just advise because I mostly manage our fund. And so I just advise all these situations. But it's really common. And you said, okay, well, what are the symptoms of the marketing leader's issues? It was just a lack of being able to budget, plan, serve the different masters inside the company.

50:36Who are the constituents? Who are the internal customers? So you ask questions like that. Where are the weaknesses? Because a lot of people just say, okay, I just want you to do this one thing this year, focus on U.S. enterprise. And then they wonder why the commercial business falls apart or they can't do anything internationally, things like that. So I think that the skills that are needed often are actually already in the person you have. You just have to tell them you want them to flex these other muscles and less so about these other things. Delegate something, maybe hire a sales ops person.

51:06Maybe you're upgrading your head of North America so you can focus on international. There are a lot of things you can actually do to upgrade the talent of your own person, the skills of your own person. like bring on a mentor on the board, like McMahon mentored Degnan. And there's a lot of examples of that, you know, around where you had like an advisor, CyberSharts has a guy named Adam Ahrens, who was this legend from Okta. And he's there mentoring their young founders on how to think about this. They're first timers out of the 8 ,200, and they need to know, how do I think about hiring that first sales leader?

51:36And then how do I know when I've hired the right person or the wrong person? And then when do I need to up-level their skill sets? But I'm actually a big believer and continuity. I just think that anything a founder can do to say, I really want to hang onto this team as long as I can without sacrificing operational excellence. That's the ultimate knife edge for me. Yeah. Forecasting is an interesting one because there's the element of, hey, at the end of the day, that's what, especially on the sales side, but maybe we'll call it planning or resource management or whatever it is, if you're talking about marketing or product or whatever, different functional area.

52:07But then it's also a, it's a rollup of a bunch of other inputs that sort of show the pulse of the business that you have. And so not only is it going to be how your stock's going to trade after a quarter or you give guidance over the course of the year, but it goes to how your pulse on the individual deals, your pulse on the team and the rep performance, your pulse on the product market fit, on the relationship with marketing, on the relationship with the product and the deliverables. It sort of is this thing that's a discrete component, but it really spideys out across the organization and shows really, does that CRO leader have the sense of all the different little component parts that go along with the job?

52:50Yeah. I mean, the biggest thing is that the CRO is coming to you saying, I need these resources to get to this mountaintop. This founder shouldn't be going, hey, I was surprised I look like a clown in my board meeting and it's really your fault because I was surprised. What you want to do is demystify companies. you want to actually take complexity out of them as much as you can. Mike Bolpe taught me that term. It's like take complexity out of a company whenever you can. Just dumb it down. And so that means people have got to be on their own functional thing. A lot of marketing people get fired constantly.

53:28Biggest reason is people are like, oh, the demand gen thing wasn't working. Well, there was one thing that wasn't working that wasn't operationally amazing so that the thing has to come across multiple functions. Same with sales, same with products, same with engineering. So people just, they don't realize that they're really optimizing around one skillset. And then, you know, the great leaders are the ones who go, you know what, I've got a blind spot in areas X, Y, and Z, and I'm going to go out and I'm going to work on those where I actually suck, where their skillset, they take 1 % of their brain to do what they do great, right?

53:59It's the areas where they're kind of not great, where they have to hire really great people to flank themselves. to go all the way and power through. So I think the best executives are the ones that go to the CEO and say, hey, I'm CEO, founder, and say, look, this is what I need. This is where we're weak. This is where we're strong. I don't want you to be surprised. I think we're going to get here. This is my plan. And then they hit the plan, whether it's a revenue plan or hiring plan or an operational plan, instrumentation, forecast, and whatever it is, the muscle that they need to get ready.

54:28But I think that's the issue. Nobody likes to be surprised. VCs don't like to be surprised. CEOs don't like to be surprised. Execs don't be surprised. Public markets certainly don't like to be surprised. The market is hated. And once you surprise them to the downside, they take a long time to forgive you. Yeah. You get put in the penalty box for a while for that one. So we talked about the example of like, hey, you got to ask yourself what the actual inputs are, why you're asking the question of if this person should be up leveled. And we gave the examples of, hey, you know, it might be be careful what you wish for.

54:57It might actually be a really good situation and you're just sort of being existential. But let's say you identify there's a problem and maybe it's forecasting. Let's use that as an example. At that point in time, do you counsel CEOs, founders to to just go to the individual and say, hey, I'm starting to think that this might not be you're getting a little out in front of what you managed before. Here's the examples why we're going to start thinking about maybe bringing someone on over you. Or how do you how do you counsel people to have those first symptoms of the person's lack of planning orientation?

55:36is when that CEO should be talking to the executive. The first signs, hey, there's a speed wobble or is the axle gonna come off on the freeway? Like what's gonna happen here? You know that you have a tire that's running a low PSI on the right passenger side, like what's going on over here? And if the person doesn't have a coherent answer to that going, okay, you know what? I'm on this and I've been fixing and here's my plan to address the issue. I'm glad you flagged it. Again, it's better if the executive goes to the founder and goes, hey, look, here's our meeting. Here are the issues I've got.

56:06this is what i'm gonna do about it and then actually do it that's what you want to do but i don't i was council founders do not ready fire aimer at people don't blow people out like quickly don't make knee-jerk decisions on people you want continuity you want the rest of the organization to see people treated fairly and treated in an organized way you know just like whether it wasn't just a uh hey this didn't go right okay we're you know blowing somebody out i mean i had this founder, I just decided not to talk to the person because I did some diligence on that individual. And they just have this knee jerk way of firing people.

56:40It's like, it's a sport. I was like, I'm not going to spend any time with this person. They're unhinged. No, thank you. My time is more valuable than that. I'd rather go for a bike ride or talk to whoever. But there are certain founders. And once you get an employment brand, that's about ready, fire, aim, and you're not on your, you know what, operationally, and founders aren't adapting and figuring this stuff out on their own and them growing themselves. I mean, that's not one of the biggest founder mistakes is they don't grow them, like I said earlier, their own skill sets in being executives, being CEOs, understanding that no human's perfect.

57:11And how do I figure out whether the speed wall was just a temporary thing or the pothole in the road, or if it's more systemic, like the car's going to break down because the person just doesn't have their, you know, what together. And where I always ask them to drill in is, what did they tell you they were going to do? And did they do it? Did you do it better than you thought they were going to do it or worse? And what, you know, Then you give them like a quarter or two to keep going. I was at a conference recently where some pretty big execs that are more accomplished, smarter than I'll be in 10 lifetimes were all like saying this, quote unquote, when you know, you know.

57:43And I disagree with that. When you know, it's really that you think you know. If you look at Ali Goetze, he's a world-class CEO. He's a professor at Cal. He's never had an opportunity. To my knowledge, he's never operated in his life. And he's one of the best CEOs in the world. and you know he had to evolve his own skill set and look what the look at the people he's kept around him then he kept those people even through critical transitions like bringing a cfo and then bringing in a president and bringing on you know these different cast of characters that that upleveled the organization without having a lot of roughness around turnover.

58:18And he's like, look, the turnover I do have, I want it to be there because it means people can't hang and run at the pace that we want to run to build a$100 billion company. There's a certain sort of ruthlessness, but it starts with the founder evolving their own CEO behavior. And it didn't hurt that he had Horowitz on his board. Obviously, he's been a veteran and company builder. Yeah. But he's his own man. So that's an example of somebody that up-level design skills. Sure. Sure. When you're on the – we've been talking a lot about the hiring side, but I'm sure you've counseled quite a bit on the firing side as well with founders having to go through this or people that have been on the other side of it.

59:00Are there anything – the people that do that well – it's never an easy conversation, but the people that do it well, anything that people should internalize or try to take away from those? Absolutely. Give people a good narrative. unless they're doing something that needs to be fired for cause and we say that's a cancer cell cut it out and um you're just going to have to explain to people hey you know i'm not going to go into details you can't do that really legally you just have to say like this just wasn't working don't really want to go into why but we have to make a change and we made the change so if it's character related or you're going to fire from somebody from cause do it do it quickly get the person out of the organization thinking that they're a metastasizing cancer cell that's an urgent need but if somebody's just like not performing the best thing to do is just tell them listen let's build a good narrative for you that keeps your dignity intact and then you're going to do me a favor by elegantly helping me recruit your replacement that's the perfect nirvana scenario where you're enlisting the executive so they look any smart executive is going to call the person they're replacing like what's up with this situation and if they say well the founder handled me roughly or they didn't fire me for fair reasons or whatever and That's going to harm the recruiter's ability to recruit somebody new into that role.

1:00:10Because people back channel you too all the time. And everybody knows each other in tech. It's very incestuous, as you know, in the B2B cloud world. You're always one. You're like, everyone's Kevin Bacon. You're one degree, you know, six degrees, whatever. So you got to be careful to treat people in a humane way. And, you know, that's your employment brand we're talking about. And it gets around pretty fast. So give them a lead time. Tell them exactly what's going on. Give them a little time to correct. But if you've made your decision, you need to get rid of them, then you have to do it in an elegant enough way that there's a glide out and a glide in.

1:00:42If you can coordinate that where the new person is starting very quickly after the old person leaves, even if you have to keep an okay person around for an extra quarter while you look for the new person, it's probably worth it to minimize disruption unless they're totally incompetent. In which case, again, they're metastasizing cancer cell, not for personality reasons or whatever, but because they're just tanking the company. Yeah, there's an old Bill Campbell quote about firing, and I think he said something to the effect of you have to take their job. You don't have to take their dignity. And it's an important one walking away because I think you can – in an hour, you can burn years of goodwill, right?

1:01:20And just the way out, that's how people remember how it went down and the good memories kind of get blocked by whatever that last memory is. It harms your soul. It will harm your soul. Even if you're so heads down, you're the Terminator and you're going to go out and you're going to win the war. Even if you kill it, there's going to be a moment of reckoning in your own heart where you're like, I just treated this person badly. Most people that aren't sociopaths feel that at some point. They're human beings. They have families at home, mortgages to pay, kids to put through college. Treat people humanely is a very important thing.

1:01:57Negotiating with candidates. So now you've made a decision. Generally, you're trying to spec if it's within zone. Maybe the recruiter's back-channeled, hey, here's what they're making in their last job. Now you're a founder going in and negotiating with the candidate and trying to get the job done. Any tips or tricks around that? Yeah. I mean, look, the recruiter, if they're doing their job, or the founder, if they're doing it through the network, or the VC talent person came up with the idea, we'd love that too, by the way. It should come from all sources. People should come from all sources.

1:02:23you know i think the most important thing to do um in negotiation is actually set the stage but the founder and the executive really need to get into the details together because it's a test for how they're going to solve conflict together because there's always this thing where the executive goes to the founder goes hey i need x y and z i need x number of dollars this year to go hit my plan founders like are you sure why can't you just get more productivity and that's the exact correct question are you sure because people are always going to ask for more money than they probably need right because we've been a capacity driven industry because of the uplift until the last three years which now we're at least hopefully maybe that taught us some discipline but as an industry but the um i really believe in detailed discussions you know in aided and abetted by the recruiter or some external party right to make sure that both sides aren't off track.

1:03:14But I just saw a founder over the last few days, close an executive that's had probably 30 offers and has turned them all down. And this founder was like, just so determined. And he wanted to do the deal himself. Now, when he ran into trouble, he called us and said, okay, what about this? What about that? And we said, you know, you guy wanted a single trigger. We're like, no, walk out to walk away red line, do not. And there are certain things where you just want to tell the founders, hey, here are the guidelines, the guardrails, if you will. And then the executive, sometimes you just need to have the quote-unquote intestinal fortitude put politely to go to the executive and say you know what you're unhinged this is crazy this is not market and we're fine walking away peace out love you but this is not going to work you got to resolve that pretty quickly i've seen people spend a month in redlining and the lawyers love to redline stupid things that are just so you really have to have people that are reasonable and set that stage before they even get to that that's that phase of their discussion you know just set the stage Are you, this is what our parameters are.

1:04:14These are what, what are you thinking about? And if you don't get that alignment in the first couple of meetings, then you really shouldn't go to a third meeting. It really should happen after the, in theory, after the first meeting, but you really want to know. Founders will stretch for an A plus person. That's a stretch candidate that actually makes sense. It's not an overhire and that's wise. And executives will take a lesser offer from a better company if they're smart and that's wise. So it's like trying to find the, the wiseness axis, right? The wisdom access, if you will, where you're like, okay, both sides didn't feel like the other one took something from the other person.

1:04:49It was a fair landing spot. Fair is important. The fairness is the key piece. Cause, cause it's the start of a journey. That's the thing that I think people don't appreciate. It's true of VCs as well, but the people that are the deal junkies that just, just get off to negotiating just everything. And at the end of the day, sometimes you'll have salespeople that are successful because they've been successful deal junkies and trying to get these things done. But they're high maintenance. But they're high maintenance. And when you find that when they're negotiating their own employment contract, it's just generally a bad stuff.

1:05:20If you push it too far, then the founder, even if you get what you want, be careful what you asked for because now the founder, I love this metaphor. They're going to be like, well, you told me you had a blue suit with an S on the chest, a red cape, and you can shoot laser beams out of your eyeballs and fly around. And you can only do one of those things and you're not Superman. And I paid you Superman dollars. I'm really pissed. And so that's like a dynamic you don't want to see if you're an executive. You want to feel like, all right, I'm paid fair market value. And maybe not when people say we want to do 50th percentile, it's like it's a walk away founder.

1:05:53It's like, OK, you want average talent? Fine. 75th percentile and above there. There's a comp framework at all stages for the 75th percentile. And I believe that staying within that zone is where you want to be. Any trends on the compensation side that you're seeing right now in the market, as we said here, mid-February 2025? I'd say that candidates are getting a lot more sophisticated around equity structure. Okay, what are the RSUs? Okay, now I'm a$300 million company. I can't do options because the company's worth$8 billion and the 409A is crazy. So there's a lot of discussion around, okay, should I take RSU and options?

1:06:34what's the combination there now when people fixate too much on the details of every nickel they're going to take out of the company you kind of that's a bit of a red flag but at the end of the day you know the um the comp believe it or not has stayed within some ranges of sanity when you have a desperate company will pay stupid amount of money and i'm sorry but if you're a stupid executive you take stupid money you should never take stupid money that just means the company needs you more than you need them why would you do that you should go to a company where you want them as much as they want you.

1:07:01It's kind of equilibrium there. So I actually have not seen a ton of discussions that are different. People are optimizing around RSUs in later stage, but there's some issues with that, some taxation issues with that, some liquidity issues with that. There's some, how do you, when you leave the company, do you get to take the RSU? So it gets a little legally tricky. And the smart companies are late stage that they've gotten really good about driving their 49As as far down as they can in the last couple of years. And so I think that you're back to that ultimate question of, is this an appropriate situation for RSU?

1:07:34Is it an appropriate situation for options or both? But on the cash comp side of things, it's exactly the same. Has the pendulum stayed roughly equal? Is just more sophistication on the equity side or is it switched a little bit more? It's the same. Yeah. I mean, some people can be, oh, yeah, candidates want this, want that. But that's only the undisciplined people that let people hijack the company. I wouldn't listen to them. We talked a little bit about different pitfalls and mistakes that founders make. Is there anything else that stands out or anything that if someone's listening right now and they could take away one, two, three points beyond whatever we've talked about for an hour plus here?

1:08:09Are there other things that kind of jump out that you would love to see founders never make this mistake again? When you don't understand what you're getting, that's number one mistake. You really need to understand, yes, this person does not shoot laser beam out of their eyes, but they can do this. And it's not just a short term, they can do this. It's they can do this for me now and this for me later. And they're thinking about it in a longer term way. Short term hiring is a huge mistake. Huge mistake. Because rotating out your VPs every day, you'll dilute the company at a higher pace, as you know, by keep giving everybody 1 % of the company, 2 % of whatever the number is.

1:08:44They take much of that vesting and then they're gone. Then you got to give another grant for the next person. Everyone's taking dilute. So think, it's like when you look at founders, great founders, they think big and start small. Same thing with executives. Like think, can this person go all the way? And, you know, really understanding what you're buying is important. And then the biggest mistake is not really understanding what this person's capability is. And then the third one is just like being unrealistic about what any human can do within the constraints of your company. There are certain gravitational constraints.

1:09:18There might be market related, financing related, board risk tolerance related. It could be all kinds of things. It could be competitive dynamics. And so understanding like what's realistic. And then at all times, this is the last one. I know you said three, but I'll give you five. I think we're in five or six now. Being pragmatic is number, probably it should be number one. Pragmatic. I don't see tech having a lot of pragmatism in general. You know, is this like a reasonable ask? Am I being reasonable? Am I looking at this person in a fair, through a fair lens? That's a big one. A fair lens of what the expectations are with them coming in?

1:09:54Yeah, and what they're doing and do they have handcuffs? did you say, well, look, you need to go out and get in a knife fight, but I'm going to put one hand tied behind your back, but still go out and win the knife fight. I mean, that's not going to happen. And so you're sending somebody out to fail, just knowing what your own constraints are. You know, a lot of times I've seen founders actually throw executives under the bus as an alibi for the company missing his target when it was really the CEO's bad decision-making. I've seen that too many times to count. And these people end up being sacrificial lambs.

1:10:21So you could actually, you know, you asked about references earlier. You got to reference references. Understand the context of what somebody's saying about somebody else. Because a lot of times it'll be like, well, they fired you. Okay, that's an easy one. But you could also reference with a founder who's like, oh, yeah, they didn't do this, this, and this. And then you talk to somebody else and they're like, yeah, but they didn't have a competitive product. So they got smoked by X, Y, and Z because they had a better architecture. And so this person was selling a subpar product. It wasn't their fault.

1:10:47So understanding that stuff is, I think, important. The contextual story around everybody. Everybody's got a story. You have to understand that story as holistically as you possibly can to de-risk or mitigate risk and the blowouts. That's, like I said, a major theme I'm on right now. I'm curious as we look forward, we're seeing some businesses grow at exceptional rates. You've referenced a few of them that have gone zero to 100 billion in two years or maybe even less in some cases. As you think about the way that these businesses can actually scale operationally, clearly the demand on the market side is super strong.

1:11:28But as you're kind of seeing this, are there – if you're in the hyperscale mode and you're just getting the suction from the market, to actually make sure that your foundation is intact and that the growth isn't actually going to break the business, are there things that you've encouraged companies to think about? I mean, abnormal – I wouldn't name abnormal security here because I think the company is just going to be a monster. It's great business. It looks like an email security. It's a way bigger thing than that. And their performance is - Yeah, it's been incredible. Proven that, but wait till you see what they're going to do.

1:12:04And the founder was obsessed with building internal processes from day one. He knew he had a monster product that was gonna smoke all the incumbents and they already are and blah, blah, blah, blah, blah. But he thought about processes that would take complexity out of the business early and often and enable them to be a high margin business from day one. And they just hired a world-class CFO a couple of weeks ago. And so they thought about it very early and very often. So I do believe that building some thoughts around internal processes early is important because too many companies hit the wall because they're just, they're scattershot operations are just under this kind of a goat rodeo.

1:12:42You look at these things, you're like, how do these people even get anything done? They're totally dysfunctional. And that doesn't really manifest till later. You're just so focused on converting customers early. Can you get your product into production? Okay, fine. You got a product in production. Can you sell it? And then you start getting some, you know, ramping some sales. A lot of these companies that I could, if you look at the leadership teams of extremely high profile companies out there and you say, what is the evidence that these people have ever done anything interesting? Now, of course, the CEO might be world-class at training them up.

1:13:10They might have a board that's training them. There may be things going on externally that we can't see. But I do think that a lot of these companies are held together by bubblegum and duct cape. And that's a little alarming given how many venture dollars are flowing into these companies and the velocity and the price points. You're like, there is no investor thesis there. There's nothing there. What are these people thinking? They're just playing an AUM game, the VCs are. And it's pathetic. The LPs will pay a very dear price for that insanity, that recklessness. And so the founders that you want to back are people.

1:13:42We have this one founder, this company called, we'll name it, Plenful. Really interesting company, automating pharmacy-backed operations and really clunky healthcare operations. Very interesting workflow products. And the founder thought about unit economics from before she started the company. And then they barely touched their A. Went into a B. This is a very well-run company. It's a vertical SaaS company. And so you go, okay, well, is that a real business? Yes, it is. Another one, Acuity, that we love. Mike, I mean, he's a real business person. And he thought about process early on, built a leadership in the series A, that leadership's still there.

1:14:17That could be a team that goes all the way through the IPO. And some of these people, so to your point, I do believe that if founders aren't thinking about internal processes from first principles from day one, they're going to end up cleaning up a lot of messes later. And that's a big distraction. And the bigger you get, the bigger distractions. We're talking about the ecosystem in general. I guess we sort of have this – I mean, almost everything is getting stratified in some way, shape, or form. And we have – you mentioned the people that are AUM seeking potentially versus the people that are a little bit more boutique-y in nature in terms of how they're going to market.

1:14:51We also have the AI companies that some of them are growing at an exceptionally high rate. And we have more of the traditional kind of enterprise software businesses. I'm curious, I guess, as we sort of zoom out a little bit in your role of looking at both the talent side as well as the VC side. I'm curious, like, what your more meta observations of the ecosystem are right now. I mean, honestly, I think the best words are the industry switched from fear to greed after the election. And you could hate the results of the election. I'm not going to comment on how I feel about it. But it's like the industry, as you know, switched on really hard.

1:15:28It switched on last year, too. Remember that? for a little bit and then it kind of went back dormant but now it's total insanity i just heard about a company this morning with no revenue got marked up to 400 million pre no revenue and this is a business is not an ai company doesn't have imminent customer traction is going into a tough vertical tough category and and we're seeing and i don't know the specific example we're seeing people lose term sheets and then come in and mark it up right after the fact uh and so hey we your A got done, we lost. Discipline has disappeared. And so with that lack of discipline, there's more money flowing in the system than I've seen since 2021.

1:16:08I don't know if that's the same as you, but I see the same, we are back to that. It's like I said the other day, so somebody that history does in fact repeat itself. And so we're in a, we're in a, we're in another new brand new bubble. And I don't think that founders have figured out how bad the talent war is going to to be in 2025 as a result of that. Now, the smart executives will say, you know what, I'm not going to play that game. I'm not going to go into a company that has this vanity valuation, this like sexy this and sexy that, and it's 3 billion this, 4 billion that on minimal revenues.

1:16:39Like that's insane. And so the smart ones are going to pick the companies that are well built, built to last and built to power. That's why I love these, you know, even things like vertical SaaS on the side, you know, data companies, whatever, security, the boring stuff. There's a lot of real businesses that are emerging out of there. And as opposed to the shiny new object that just sounds awesome and I'm gonna leap in, the smart executives will actually choose more wisely now than they would have even a couple of years ago because now it counts. You've got 50 million software companies. I believe that there are way more software companies than the world can ever absorb in our lifetimes and in our children's lifetimes.

1:17:17And so picking the winners and losers, okay, the M &A will come back, IPO market will come back, But the queuing of 50 million software companies at scale with pretty good economics, gross margins, 60 % to 80%, sort of good businesses. And they kind of own their space, number one or number two. How many companies will the market accept as public companies? That's why I said getting your reps down early and make you more interesting. You can be subscale and be blowing your numbers out of the – beating or raising all the time and grow into some real valuation later. But right now, I do see that the market has switched from fear to greed, overly so.

1:17:54And market always has, as you know, a violent swing of the pendulum one direction or the other. And the last few years were interesting because you thought you could get some value. Market didn't correct as much as we hoped it would. And now you have this swing back effect where you're like, oh, my God, you can't. There's a lot of interesting stuff around. Quality companies, a lot of them. And there are a lot of companies that don't deserve their valuations and everything in between. If you're an executive or founder or whatever is the case and we're looking out and you're saying, hey, the talent wars are going to be crazy in 2025, combination of venture dollars kind of sloshing around, some of this hyper growth stuff we're seeing in AI.

1:18:31What are the implications or the considerations you would have if you're an executive or a founder in the seat and you're mapping out your plans for this year, maybe next year as well? What does that mean for you? That's a great question. Everybody's like, oh, my God, the market's great. I need to aim so high and I need this celebrity. And you're like, well, most of the celebrities just made a hundred million bucks over the last thing that went public or got bought for billions of dollars. Okay. So what does that person want to do in the next thing? Are they going to want to go grind through your thing?

1:19:00No. So you've got to be like, okay, who's that person? Who's Erica Schultz before Confluent? You know, like think about that. Think about the rising star that's coming into their full bloom. Think of them as a beautiful flower, right? And they're starting to really bloom. And you want the person that's just, the flower petals are just popping open. And that's the most important thing. They're well-trained and hungry. If you can find that person very well-trained and hungry, and if you add curiosity and the will to achieve or overachieve and you start looking into, okay, well, Erica was like a competitive swimmer at Princeton or something like that.

1:19:38You just kind of look at these people, like who they are. That's where you start getting into. I'm embarrassed that I think it was Dartmouth. I'm embarrassed to actually know that. Something like that, yeah. But you know, you started looking like, hey, that person's like really special in every way. They're innately competitive, elegant, well-trained, came into that role, scaled the business to a billion dollar. You don't have to be really exceptional to get her to do your company. So do you need to get out in front? I assume that's probably the counsel to all the companies right now. And if we're going to be even more in competitive talent markets, does it just mean you got to get there even sooner on these candidates?

1:20:14to maybe lean in even a little bit more to the risk. And to use your analogy, like the flower is beginning to bloom. Maybe you need to do it right before the flower starts to bloom in that case. Yeah, I mean, it's good to be thinking about people cultivating them early, but being realistic that in certain situation, I mean, it's interesting. Some founders look at executives and say, I'm gonna build a relationship with you and that relationship is gonna be very authentic and very deep. It's gonna take a while. like this situation at, I'll name abnormal again, the way that the founder and his president got together dozens and dozens of hours.

1:20:51I mean, he was originally approached as a board candidate. And then just, there was this relationship that they built and it took a bit to soak, right? And so executives should be cultivating short lists of people that they would love to have, and then having a contingency plan because those people are like, listen, I love you, but I'm just not going to come down and do this. You got to be 150 million and somewhat close to some IPO before even my skills are applicable. And I'm not going to go out and be the person logging 400 ,000 miles on United Airlines every year. I'm just not interested. I'm going to orchestrate the construction of a great machine, but I'm not going to go driving around the track.

1:21:26And there's a certain reality to that, that people get to a certain stage. It doesn't make them lazy. It's just where they want to apply their skills. And so founders have to realize like, okay, what does this person actually want to do? And is it the work that I need to get done? you can look like a celebrity or look like a hero for going and telling your board you just bag some tom brady but you're like well the guy's 43 years old he really doesn't want to play football anymore but he's here we can win football games what's aaron rogers going to do next year would you want aaron rogers on your team it's a high risk thing and so great football player does he still want to play football can he play i don't know even watch football but point is is that that That metaphor is perfectly appropriate for these founders that are aiming too high at somebody that's already past their prime or doesn't really want to work on the stuff you need to nail down in the next couple of years to be a world-class company.

1:22:15I want to give you a little bit of an opportunity to plug you guys in what you do. And I guess the question I would ask to that end is, one, what do you see as the key – we've talked about a bunch of them here – but the key components that working with a search firm provides? Because sometimes I fight this battle where it's like, can't we just do that ourselves? And sometimes yes, sometimes no. But I have my articulation of what a search firm value is. But I'm curious that one. And two, then the second one is a premium search firm and not just, OK, I'll do the search and I'll get the person that's the cheapest or bottom 25 percent or I'll pick the wine that's the middle price.

1:23:03I don't want the premium price wine and I don't want the super cheap wine. So maybe go on that a little bit and like how founders should think about these things. I mean, there are search firms for everybody. We have really high quality competitors. And so what I would say the best search firms do is that they don't take on just any client. And here's why. You have to think about your value proposition. It's not just about facing VCs as more like a channel to get you in front of interesting founders. That's what a lot of recruiters think of as VCs. They build a relationship with the VC, hoping the VC will introduce them to a bunch of founders, and then they'll get business out of them.

1:23:34The most important thing to think about is why does that search firm have a brand with the candidate population? Is there a pull? Because anybody can be a recruiter. is not that hard to just jump in the recruiting industry, make a bunch of calls, hustle some candidates, throw some stuff at the wall, see if anything sticks. What matters is when that search firm can actually get that candidate to take your offer over the other four or five that they have in hand because that candidate actually believes in you. And that's where specialists have crushed everybody else. If you're a generalist still, you're on your way out of, you're just not relevant.

1:24:08And I think, you know, it doesn't matter whether you're working for public companies, private company, you have to be like, if you're doing go-to-market, you do marketing, sales, maybe customer success, but you should really be focusing on two, not three. And if you're doing engineering, it might be engineering product or just engineering or product, whatever. But you've got to really natively know these executives and have pull with them. And how do you have pull with them? By showing them good companies. So Artisanal, the way we thought about it was like, we just went to the major VCs and said, look, you give us your best companies.

1:24:35We'll make sure we'll kill ourselves to make sure they're great. And we'll only work on a handful of searches at a time because we don't have bloated office space, but millions of HR people running around wasting money and time and VPs of strategy and all kinds of nonsense. You think about where do you spend money? The money needs to flow to the people running the project so that they don't have an incentive to do 30 projects for 40. It's crazy. Some of our competitors will do 20 to 30 searches at a time and give clients about six, 7 % of their mind share on a good week. You want people being like, I'm going to be an extension of you.

1:25:09And I'm going to take your company as if it's my employer feeding my family, and I'm on an existential mission to make your company gigantic. So whenever I see people mailing that in looking for contracts, it's kind of stupid. You can pay more for a search firm that's premium that has poll the candidates and know that you're going to get more of their time and the influence because you're really paying for the influence. And founders don't know, they don't understand that. They think, oh, okay, well, this search firm did 85 searches, just like the one I want to do, okay, I'm going to hire them.

1:25:39What they don't feel is the search firm asking them really hard questions early and often to know whether they even want to take the search. Because it's low integrity move just to take a search to get a contract. You want to be like, I'm taking this contract because it's opportunity cost for me to do this work for you, Mr. or Mrs. Client. You know, I could be working for some other company. I might be able to put my capital into it or just not take a fee and just take the stock, it's a huge opportunity cost to work with riffraff companies and your candidate brand sucks. So if you have no pull with that market, what is your actual value?

1:26:15LinkedIn has democratized access to executives, what is it, 15 years ago? Google kind of did, but then LinkedIn really did. And now there's a bunch of AI that can get the answer to the best 17 logical candidates in the market. So you can get to that answer in about three seconds. It's really about the rubber meets the road, when you influence that candidate, you know everything about that person. The only way you can do it is a specialization. Does that mean there's actually a point of not just diminishing returns, but also like maybe negative returns of someone that's done too many of those searches because it starts to be maybe a little formulaic or uncertain?

1:26:54Yeah, absolutely. I saw a CFO search done recently up close and personal. I won't name the situation because I don't want to trash the competitor. I really like the competitor as a human being but that person has hired millions and millions and millions of cfos so the person couldn't go after anybody because they'd already hired everybody so this other group i will say that is my partner uh christine's her name very interesting person she does a cfo search very high profile situation lands a superstar in about two months the other search firm took nine months and landed a person that was fired in 45 days because it was just there's no access to market So you're absolutely right.

1:27:30The girth and size in any space can be a liability. That's why we're trying to stay small, trying really hard to stay small. It's kind of hard, but you've got to, you have to try. So when we were prepping for this, you mentioned one of the things you've been thinking about is the need for founders to have different mindset shifts. And they've been probably – some founders have been steady as they go over the course of the last whatever, five, ten years. And now we have this whole new growth expectations, new companies being started, an increased rate, new capital that's going into the market. I'm curious what your thoughts are on that.

1:28:03Well, I mean, for the last few years, it's been pretty reasonably easy to get people to talk to you and get people to take meetings or whatever because everyone was grinding. No one was having any fun. And now this market is not just – forget the greed aspect. The market is going to be much more lubricated. It's going to be more easy to sell things because people are in this, okay, deregulation is coming. Market is going to come back. Forget the stock market. It's just like the buyer environments are going to be a lot more accommodating. And as they become accommodating, it's going to be more fun.

1:28:37And so all of a sudden, all these companies have been financed or refinanced or new capital, whatever. And that means usually hiring spree is followed by financing, as you know. And what's happened is that founders haven't really, a lot of founders haven't really adapted to the reality that, hey, in my situation, there might be only five people that make total sense for me. I need to go find those people and obsess about them for the next few months as opposed to shopping. And like I'm at Walmart and just trying to find the best product at Walmart. Like I need to go to Dean and DeLuca and cherry pick the best organic raspberries that they have.

1:29:09And I'm going to pick through those raspberries to get the best five. And I'm going to eat one of them. And they have to be thinking along those lines and urgently. Like you've got to build that talent mechanism early, but you've also got to be thinking like, I always love this metaphor too, spearfisher person, as opposed to throwing the net in the water and just picking through the rubble that you get, the flat tire, the shark, the whatever. You didn't want to catch. You have to get in the water with a spear and aim it at a certain target that you know presumptively going into it that you want and go after those people and focus hard.

1:29:43You can't think like a shopper. You got to think like a buyer with very discriminating tastes. And not enough founders are making that mental switch to understand that they're all of a sudden, like I said, in World War V talent-wise. It's crazy. Our search firm is getting 40 inquests a day. I mean, it's insane. We can't even respond to all the demand. It's great. And I know our competitors are doing fine too. So the demand pull is extremely strong. And that's obviously an indicator of the macro meta situation that we're in. And I think founders have to adapt to that really quickly. It's not going to be easy to get people and you got to focus like crazy on the best people for your situation.

1:30:23Anything else? No, man. I'm just really enjoying being here. Yeah. Thanks for doing all this. Yeah. Always a pleasure. Thank you.