SPOTLIGHT: What It Takes to Step into the CEO Role | with Eric Anderson, CEO @ Walnut

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0:51Join Zoom Info live in Boston on June 3rd, San Francisco on June 12th, London on June 19th, or attend virtually from anywhere. Register now using the link in the show notes. Hey, everyone. Welcome to Topline Spotlight. You know Topline Spotlight. It's where we talk to founders, CEOs, executives of their companies about challenges and problems that they're facing and we learn a little bit. I am your host AJ Bruno. I am joined by Eric Anderson. Eric is the CEO of Walnut. Eric, welcome to the show. Thank you AJ. Good to be here. Yeah, so before we begin, we were talking, we're 15 minutes into this because I was just so fascinated by your background and I was like, we should actually be recording this.

1:40But before we begin, if you want to give everyone just a kind of a quick blurb about you and some interesting things. And then what I'm really interested in is in December of last year, you took over as CEO of a company. And I have experience with this, not from the CEO side, but from being a founder side and all of the fun that comes with that. So really excited to dive into that. But before we begin, just would love to hear in your own words, your background. Yeah, 20, I'll do this without trying to age myself, but 28 years of helping to lead and scale tech companies, very focused in the go-to-market disciplines.

2:23So I've been running go-to-market teams as either president or CRO for several decades now. um and uh i got a call i'd been looking for a ceo post for quite some time and i got a call from a good friend of mine who's an executive recruit he said that he had the perfect first time ceo gig for me if if ever anything existed that was a perfect first time ceo gig uh which by the way i the perfect that you know now eric right that doesn't exist that's not a thing That's exactly right. It was the hook that got me to talk to him and attack the company. I'm extremely happy. So glad I made the move. But if you only knew then what you know now, it's a company that has a really, really solid product.

3:21And that's, I think, the strength of Walnut is the product engineering side and what's still in Tel Aviv and most being run out of Israel is really, really solid. And that's important for me because that's the lease side of my background. Right. It's really a kind of a go to market executive. And that's where I think the fun has begun. It, you know, looking at the, at the cultural differences, not only between Israel and the U.S., the geographic separation where you have part of the team over there, the growing part of the new executive leadership team here in the States. Well, because you're in San Jose.

4:00So I don't, I'm not even, I'm really bad with figuring out time differences between, I'm guessing it's eight hours. If I had to guess. Ten hours. Ten hours? Ten hours. What time do you start your day? 5 a.m. Oh my goodness. But I living in California, there's some level and being an operator for over 20 years, there's some level of you. You're used to that. Is that fair to say? Always up early to catch Europe's day and then up late to catch Asia's day as well. So you get pulled from both sides. But yeah, this and I think as you and I were talking before, taking over from a founder is just very unique.

4:37It's not replacing just another CEO. You're stepping into something that he created. It's his baby. And all the culture and the vision and the mission and the sweat and blood and equity that he poured into it, you're now stepping into for both good and challenges that need to be fixed. Yeah. Well, Eric, real quick. First off, I mentioned earlier that the founder uh i had co-founder matt allison at uh trend kite and the ceo that took over there his name was eric as well um eric huddles then and i remember your to your point i remember matt and i sitting down as we were raising our series b and matt was the ceo at the time we knew we wanted to go find an experienced operator it was a fundability opportunity for us and uh we sat down with eric and we're like eric why do you want to be the ceo of trend kite and he looked straight at us dead seriously he said because you guys have already put in the sweat blood and equity into this business so that hard part's done and i was like what that's not though i should have given me an indication of what's to come what i i actually know eric well uh still today we're still friendly but there was definitely like a cooling off period as you can imagine it was a great outcome for the business at the end of the day but i look back at that now knowing eric's personality i know what he meant, which is what you're talking to is like, this thing exists.

5:59It's now up to me as a steward of it to figure out how do we make sure we highlight and embrace the parts that are working, but we change the parts that are clearly broken. There's a reason I am here in this seat today. Right. That's right. And it's a very delicate balance because some people are very tied to believing that what got them there is going to get them to the next stage, whether it's the 20 million or 30 million in ARR and beyond. Founders delusional about where they are in there. No, that's not a thing, Eric. And being able to point out areas of the business that just aren't optimized and aren't enhanced the way that they need to be is a delicate dance.

6:47because you've got to do that in a cultural environment that you want to be sensitive to pulling teams together and driving alignment and not separating, right? And not outcasting organizations, but truly uniting them. So it's been a great experience and a very big learning experience over the last year. I think the learning experience. So the things that I tend to think about for a first-time CEO is if I said, AJ, what would you tell a first-time CEO? So, and I mean, expect the unexpected for startups is the obvious. I think the thing that you mentioned it, having a great product and making sure you go to an organization that's a great product to do that.

7:25I would tend to talk to customers. I'm guessing you talked to a few customers before you took the gig, right? Prior to coming here, I was the president of go-to-market for MindTickle in the sales enablement and training space. We were a customer of Walnuts. So we use the interactive demo platform for all of our trade shows and our events. And so I had firsthand knowledge of, you know, having deployed this in my SE teams and my product marketing organization. I knew what it did for us at MindTingle. So that was a great starting point. They've got big enterprise customers and I've known several of them for years and sold to them.

8:06So I blindly called into these companies and said, hey, what do you think? And, you know, how's the tech and how's the support and how's the experience been? And as I suspected, it's solid, rock solid from that standpoint. And so a lot of the opportunity or the challenges to become opportunities really existed in the strength of the go-to-market teams. The marketing engine, the sales organization, the success teams, and how we present ourselves to the market. So lots of opportunity there. I think so product would be one thing in the customer value and delivering customer value. So you had that.

8:46I think the thing that I don't think a lot of first time CEOs deal with, because most companies I know, the CEO themselves deal with this is is board and board dynamics. And that's something you you get to learn. I've, I, uh, you know, personally I've had 70 plus, uh, board meetings over the years. Um, I try to keep them quarterly and sometimes when things aren't going as well, they, they become monthly. I've never had them go weekly, but, uh, there's, there's definitely CEOs that I know that have. Um, and I would, Eric, I'd just be curious to like your experience from a board level of, of managing that.

9:27And when I talk about this, first off, boards can be phenomenal. And a lot of times they want to help. They want you to win, right? So they're there to support. But they can get sometimes a little overeager, not fully understand context of things. And that's just the nature of the beast of the board. But going into it, had you had experience, board management and venture funded startup in terms of just like having those conversations with investors? Yeah, a lot of experience. I've raised institutional funding before years ago for several different companies. And even as my role as CEO or president, I've been heavily involved in board discussions and board meetings.

10:11It's a very different thing when you're now responsible for it. And you're not just a participant in the process. not only the weekly check-ins like to your point of you know how often are you checking in how often are you keeping them up to speed how often you giving them updates as to how you're progressing but all the decisions that we're taking and we're taking some bold decisions and driving some big change within the company there's there's a certain level of oversight that they like a certain level of oversight that and visibility that you want to provide them but yet not completely open and transparent where you feel like you have to educate them as if they were another founder.

10:55And so there's a balance between that. You've got to strike. And, you know, they say the CEO rolls the loneliest job in the world. You start to realize why. It's because there's no other person you turn to that's going to help you with, how do we position this board meeting? And how do we build the messaging? And how do we create the narrative? That's all on you now. There's no one else. Well, especially as you're coming in as the new CEO, you don't know your team. You have to build that first team mentality of trust and relationship with them. So you're not really sure who you can rely on or not rely on.

11:28And that's just the nature of the beast. The third thing that I was going to say for CEOs, literally you just said, which is don't be afraid to make bold decisions and make unpopular decisions. It's especially when you have founders still involved. I think that that was something that I saw really firsthand where there was some level of indecisiveness when we had a CEO switch, just like not rocking the boat. And I understand that there's a ramping period. You have to get rampers for it. But like we had some indecisiveness about brand choices that we were making in terms of positioning. It seems like you all have had some level of those choices when you first came in.

12:07And I'd be curious as to one culturally, how did the business handle decisions? Was that something you have to you had to change? change and are there areas where you look at look at like okay I need to come in and make some bolder decisions here yeah I spent 30 days after joining just doing a listening tour and just getting to know every single person in the company and doing one-on-ones and trying to get everyone's perspective on where they thought the bones are buried and some of the challenges were then in January I took everyone to Tel Aviv the executive leadership team to Tel Aviv when we did an executive offsite And part of that was for me to kind of let them get to know me and understand my tone and my pace at which I wanted to run, but also to pull people together and unify them.

12:51Because this had been very siloed from a leadership team standpoint. So we set an operating plan. We set OKRs, four big objectives for the year, and really used that to align the entire executive leadership team. So that was like challenge, big challenge number one handled. But your point about decision making is really important because I think that's where this company struggled the most. Various points of views. I like to say strong opinions loosely held across the organization. and they would vacillate and either get sucked into data paralysis for too long or have really strong opinions in some areas and couldn't make progress.

13:39Pricing had needed to be updated for several years and they couldn't get past it. Markets that they knew were unprofitable that they were continuing to chase after, cut, they would just continue to keep doing it because the decision to not do that was scary and was hard. And that kind of change, I think oftentimes people, uh, people tend to focus, get really focused on the negative side of it and the impact it's going to create as opposed to the positive outcomes and the, and the positive impact it's going to have on a company. Well, no one likes to deliver bad news to someone. So like if I, we had this in our, business a couple of years ago where we were, we started pretty SMB, but have moved to upmarket to mid-market.

14:23And we had a segment was like micro SMB. We were like, we just have to cut this part of the business, but we've got to rip the bandaid off and deliver the bad news. And of course, the CEO has to just kind of own that piece of it, but it makes it feel like it's a slight against them that they failed in their decision-making and therefore they're not able to like move up. So I understand that paralysis. And then as you said, it's just a lonely road. So like they're thinking that, but they don't have anyone to be a sounding board sometimes to do that. And it's a hard thing to say no to revenue, right?

14:54It's hard. Yeah, very hard. Especially when the pressure's on you for growth and for performance, walking away from a segment of the market that may not be a fit for you. And I think it causes other things. Like when you dig deeper into that problem, it's really hard to build a product that suits everybody's needs. And if you really want to attack the enterprise, you should really question whether you're trying to sell the SMB at the same time, because those are two different product strategies and two different ways to go to market entirely, different companies. And so trying to do everything that serves everyone well is just an impossible.

15:36Fool's errand. Impossible. Yeah, it's not going to work. we know we know this as operators for uh myself it's been 15 plus years actually until turn 40 so it's 20 years at this point say that uh um but it's but we know this we learn those lessons but sometimes it's really difficult when you're in the position and you're relearning the lesson to just make the counterintuitive uh decision as you said revenue um the uh eric today So six months in and you've learned quite a bit around, like, what are you looking forward to for the rest of the year at Walnut? I think it's exciting when you start to tackle some of these big initiatives.

16:20You know, I mentioned pricing and overhaul and pricing strategy and market segmentation and who we really want to focus on. You start to rebuild certain aspects of the team. We brought in a new head of marketing in January, hired a new head of success recently. So re-fortifying some of these organizations with experienced executives with fresh eyes has really helped breathe new life into the company. I think the other founding members and the other team members start to see the progress and start to see the success that we're creating in market. And it becomes a buzz. And that's what you want.

16:57You want everyone excited and pulling in the same direction and aligned and feeling really good. So we're really bullish about what the year provides. We're on a pretty good growth streak right now. And we're excited about the expansion of a new product line that's going to come out next month. Awesome. The second new product line that we get to introduce to the market and create even more buzz. But, yeah, we're going to have a good run at it. And we're pretty excited about what the future holds for us. Well, Eric, I noticed in you talking about some of these ideas of trust and getting alignment, your favorite book is also my favorite book, which is The Five Dysfunctions of a Team.

17:43Absolutely love Patrick Lencioni's book there. We actually have a management offsite next week, and we all read The Advantage. So I don't know if you've read The Advantage by Patrick Lencioni. Great follow-up. Yeah. Yeah. And so we've all, there's like six questions there. So we did like a pre-read six questions and I'm excited to see how aligned or misaligned we are headed into next week. Eric, do you have any other like podcasts or content that you're listening to or doesn't have to do, might not have to do with business at all, but things that like the, you know, the audience might appreciate?

18:15Great. There's another book I'd recommend outside of just the five dysfunctions of a team, and it's good to great. Super easy read. Case studies on several different companies that have kind of made that transition from good companies to great companies.

18:34That's a classic. I think that's the very first business book I ever read in my entire career. It's an easy read, and I keep going back to it, and I find that every time I read it, I pick out different things. Yeah. Yeah. Same thing with Five Dysfunctions. I read it every other year and like that story, it's a quick read, but it pulled things out. And the data in Good to Great is just the thing. So that was quote unquote revolutionary in 99 or 2000 when it was written, but it still holds. And I agree, timeless. Well, Eric, thanks for joining us today. If people want to find you, reach out or learn more about Walnut, what's their best approach?

19:15uh can always email eric at walnut.io um come to our website uh or uh uh track us down we're uh we're happy to happy to talk to you and happy to share with you uh what we think we can do for you from a value standpoint great perfect well eric thank you so much and this has been another great episode of top line spotlight thanks eric awesome thanks aj

19:45Thanks for listening to Topline. New episodes come out every Sunday. If you like what you heard today, subscribe so you never miss an episode, leave a five-star review, and share it with your friends. Don't forget to join our Topline Slack channel to connect with us and discuss the topics we cover with other listeners. Click the link in the show notes. Lastly, if you're interested in joining Pavilion, you can learn more about membership at joinpavilion.com forward slash membership. Thanks again for listening.

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