The Ryan Hanley Show - Former HubSpot CRO on the Math Nobody Uses to Scale | Mark Roberge

Episode Date: March 25, 2026

Subscribe to Finding Peak for frameworks that actually work: https://ryanhanley.com/subscribeWatch the show on YouTube: https://youtu.be/9gToRCbu1TUYour retention problem isn't product. It's not customer success. It's sales.Mark Roberge was the 4th employee at HubSpot and took them from $0 to IPO as their founding CRO. Now he's a Harvard Business School professor, co-founder of Stage 2 Capital, and author of The Science of Scaling.In this conversation, Mark and I break down why most founders get the scaling question wrong, how to build compensation plans that kill coasting, the one interview technique that reveals a salesperson's ceiling, and the brutal math behind knowing when you're actually ready to scale.I also share the story of selling my own company to the wrong buyer and the single question I wish I'd asked before signing.📕 Get Mark's book — The Science of Scaling: https://amzn.to/4uS6Z0s🔗 Mark on LinkedIn: https://www.linkedin.com/in/markroberge/🔗 Stage 2 Capital: https://www.stage2.capitalSubscribe to Finding Peak for frameworks that actually work: https://ryanhanley.com/subscribe---This show is part of the Unplugged Studios Network — the infrastructure layer for serious creators. 👉 Learn more at https://unpluggedstudios.fm.Advertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

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Hello, everyone and welcome back to the show. Today's guest is a true unicorn in the world of building companies. Mark R. Burge is the founding CRO of HubSpot, where he took the company from zero to a billion dollar plus IPO by treating sales not as an art, but as a science. After teaching the next generation of leaders at Harvard Business School, he's now the managing partner at Stage 2 Capital, and the author of the book The Science of Scaling.

here today to challenge the growth at all cost mantra and give us a data-driven playbook for earning the right to scale. This, if you're a nerdy salesperson, if you're like into nerdy sales stuff, scripting, philosophy, compensation, you are going to absolutely love this episode. This is a sales nerd episode at its core. Let's get on to Mark Robers. Why is the narrative about scaling that you see like on X or Instagram so much different than the reality the founders actually face on a day-to-day basis?

Like why are we sold this like scale at all costs, 20 hours a day, lose your friggin' mind, burn every bridge, spend every dollar, like what you see, you know, in the memes. But we both know that's not, to be successful, that's not how it really works. So why? Yeah, yeah. Yeah, that's a really good question why it happens. I mean, I would think like, it might, we have to do a minor history lesson here where it's like,

if we go back decades in entrepreneurship, it was absurd to lose money on a business for years. Like, the venture capital was such a small, like, you know, piece of, and it still is. People will get confused. It makes all the hell. headlines, but people are still shocked to hear that more wealth is generated in entrepreneurship in non-venture capital-backed startups. That's like shocking to people. Like, especially in the

US, I think it's the only way to like do a startup is to do VB. I can't even tell you, Ryan, how many founders show up to me looking for money. And I'm like, don't raise venture capital. And that's what I'm selling. You know what I mean? Like you get the whole. So I think maybe it's a history there where it's like you had this, you know, startups. Isn't the whole. whole point of a business make money. And then like all of a sudden maybe maybe we'll call it like 2000 where you had the dot com craze, which was like up and down. But like VC like catapulted and that kind of entrepreneurship catapulted.

Like it crashed. But then it stayed high and went bananas. And you know, work like the blitzscaling came out where it's like, dude, you got to go fast, break things, burn money, get into orbit. it and it just went too far. Right? Because I think we could all sit around into like too far in certain contexts.

So let's like kind of frame that for a sec. Because like I think first off, we all could agree that if you're a founder, unless you're like Elon Musk, which is an extreme era and you're doing SpaceX, which is a very different context, for most startups, you're not going to burn a billion dollars a year.

Okay. And then for like a VLONMUSK, see back startup burning 100,000 a year is just not being aggressive enough. We can agree on those parameters. But where is optimal in between there? And like that, what came out of that was this obsession with top line revenue growth as the only way to measure success because that largely drives your valuation and to burn at all costs to do it.

And there's just not enough scaffolding. And like, Ryan, I'm not saying you should go slower or go faster. I find that half the entrepreneurs I meet are going too slow. Half the entrepreneurs I meet are going too fast. It's just go at the right pacing. And the answer to that can be approached with the rigor that we have in economics and finance and strategy and marketing today and it's kindergarten level today. When I first got into business was right after the dot-com bubble crash,

2002. And I remember back then, it's almost flipped from the way it is today. Like, if you were an entrepreneur back then, it was because you couldn't hack it in the big businesses. Exactly. And now it's the flip. Now the badge of honor is, I'm an entrepreneur, you know, like, you can't hack it as an entrepreneur to work in corporate. And it's such a different reality. I agree with you, Ryan, because I could jokingly, I was in business school around that time. it just crashed. And there was a joke that B to B and B to C meant back to banking and back to consulting, to your point, right?

It was like that. And I was like, I was at MIT at business school. There was like 500 kids in my class. I think three of us were doing startups and everyone was like, what a bunch of morons? You know, like, what are you doing? That was so 1998. Yeah. If you like look at depictions of entrepreneurs, it's like greasy kids in a, you know,

in a college form room that like, You can't make it in the social world, the antisocial kids. Those were the entrepreneurs back then, you know? It's funny. It's so funny how that is flipped. And now they're like the rock stars. And that's probably where some of the mythology comes from. You know what I mean?

You get these people that just don't know how to pass this down and sell it. I guess when it comes to this idea and what I love about your book is how you've taken this idea that for so long has almost been sold as like an art form like you're an entrepreneur you're a yeah you have this magic wand and you can see and it's really just math i mean there's a little bit of you got to make the call for sure gut instinct these things are important but like do you think is it intellectual laziness is it just that there's 10 million things they have to think about and and this idea of scaling smart is just a brain cycle too far uh there's i think the couple layers on why it occurs i would say when you're faced with the decision,

the people around the table don't have a ton of at bats at that moment. In a lot of cases, the founder, it's the first time. Like, literally, we're at this moment, Ryan, it's like you're a group of six engineers, you got dozens of customers, it started to fly, you're at a million in revenue, and someone hands you $8 million bucks. That's fucking, like, as a first time founder,

that's like intimidating. Holy shit. I've never seen this much money in a bank account and now I'm in charge of it. And the person that gave it. So they don't, they've never done it. They do that I don't know what to do. It feels like I should go fast because I,

I read about the top three stories in the history of the world on how fast, like how fast open AI went, how fast Databricks went. It seems like that's what I should do. And, um, and then the VC that gives it to you, a lot of times they hadn't operated. What their career has been is they've sat on 10 boards and one hit it. And the one that hit it did that. They hired 10 reps the next month and it took off.

So they're like, oh, that's how you do it. But what happened in that case was like that company, whether it was Databricks or Open AI or Google back in the day it happened, their strength of product market fit was so outrageous that they could have hired chimpanzees and they would have hit their quota. Like, it was like, it was order taking. And there's no assessment for the current company around the strength of the product market fit, which is not that if you look at Wikipedia, it's like people talk about it like it's a feeling and it can be totally quantified, which is a precursor to that massive scale. And then the premise of go to market fit, which is like,

product market fit is just like, does your product deliver the value you promised? And we can measure that. And then the go to market fit is like, now that I know that, can I sell it profitably? Like quotas, commissions, territory, blah, blah. And then we can go into the scale mode. Right. So, but like, I think that's probably one of the root causes is the people are on the table have very little experience around many, many at-bats of the different contexts in which you can be faced with this, okay, we're going to, are we ready to scale fast and how fast can we go? You have this concept that when I, that coming out of the insurance industry, so I share with you before we went live, yes. My home industry was the property cash of the insurance industry.

Yes. I've worked in there for 20 years, mostly on the retail side, and had started my own digital commercial insurance agency, found in my own agency, seven days before the zombie apocalypse hit up in New York. not a great time to have just sunk about 50K into selling your own insurance agency. It was commercial. So there's another great part. Right.

It was commercially every customer in the world. My tam was literally zero for about three months. Holy cow. That was an interesting experience. And we were able to grow out of it and all this kind of stuff. But you have this concept of a leading indicator of retention. And that one, I hadn't, I had never thought about. a leading indicator of retention, and as someone coming out of the...

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level and pace. I-Excel makes it easy to stay on track with instant feedback and clear explanations, skills organized by grade level, and simple progress tracking. It fits into even the busiest spring schedules. It's also trusted nationwide. In fact, I-XL is used in 96 of the top 100 school districts in the U.S. Make an impact on your child's learning. Get I-Exel now. Listeners can get an exclusive 20% off I-XL membership when they sign up today at Iexel.com forward slash today. Visit Ixl.com forward slash today to get the most effective learning program out there at the best price. Insurance industry where retention is our entire business. The reason that the property casualty insurance world can operate like it's 1992 technology-wise

is because the business model is so good. Don't tell anybody. But it's a C-player. I know. Great crush it. Right. Talk to me a little bit about like, And what I liked about this was in the product market fit section because I'm framing this question poorly, but the idea here is I like, I really like the idea and I would love for you to expand on in the product market fit stage thinking about who's going to retain and what we're looking to retain out of it. I had never thought about thinking into it that early in the process. That's where I'm trying to go with that question. Oh, it's beautiful. I know exactly what you're asking about.

And it's like, I remember I'll kind of root this. and a funny story. And it's about our series D investment at HubSpot we got from Sequoia and the partner there who's like, by the way, like a billionaire. Like I'm just, I'm going to kind of like poke at them for a second, even though like I sat down with Pat Grady in January, brought my students to him, like best friends, like high respect, bow down, whatever. Let's just cut.

But like they did our series D investment. I remember. And it was a while ago, right? It was like 2008. So like we were still in this exactly your question is Ryan. where we hadn't quite gotten how important retention was in the cloud journey and how important sales was to retention, which is kind of what you're getting at and is shocking to people.

And I remember I was being peppered by the Sequoia partner as he was deciding whether to make the investment. And he's like, I need to talk to the sales leader. And I was talking a lot about this of like selling into high value accounts, qualifying against their willingness to use the product. and he was like, dude, just go close business. Like, sales's job is to drive revenue. Like, customer success and product is in job of making it work.

And it's fine. Like, again, bow down and we're all in that. But that is like not a correct statement in a lot of situations. And when I go in and having to help these companies that are flatlined, which in a lot of case, the root causes is retention. and surprisingly, the root cause of that is sales. People think that the root cause of a retention issue is product or the account manager post-sale

or the person that onboarded it, no, it's sales. It's who you chose to sell to and the expectations you set along the way. Like in my world, it's like, if you don't get IT involved, if there's setup work needed on your product and you don't get IT involved pre-sale, that customer's cooked. And by the way, I can get a contract and a wire without talking to IT.

You want me to sell? Fine, I can do it. I'll sell ice to Eskimos. But, like, that's not a good business. And so, so, yeah, like, to your point, you know, the underlying theme there is, retention starts with sales. And the objective of sales is not to get a wire on a contract is to generate a lifetime value customer, which is what you experience in the insurance world. And that's why one of the

key work, you know, one of the works in the book is around defining your leading indicator retention. Because like when you're trying to like, you're kind of pulling away from that, like, okay, sweet. Like I need to incentivize my salespeople to sell lifetime value customers. And their comp plan is not set for that. Their complaint is like, go close 500,000 this quarter and I'll pay you. which has nothing to do with LTV. So the immediate instinct is like, okay, why don't I just start paying them an annuity? Like every time I get paid every month, they get paid. I don't know if that's how it works in insurance, Ryan,

but that wouldn't work in a lot of businesses because then you'll have reps who, first off, they come in, they have to build their book of business. So that means you're like probably attracting a bunch of junior reps because it takes a while to make money. And then once they've hit it two years later where they have the book of the business, there's on the beach all day. They're not motivated to work. Right? you got to like when they have a good quarter they got to get paid when they have a bad quarter they get a feel on their paycheck and that's where the lead indicator attention comes in which is like what is it that you can see in the first month of a customer's engagement with you that if that occurs they'll be with you forever and if it doesn't they'll leave and some classic examples that were like slack if the customer sent 2000 team messages in a month

HubSpot, if they use five or more features and the 25 feature platform. These were the lead indicator of attention that you could see in the first month that if they happen, they're with you forever. If they don't, they leave. And you can over time statistically correlate that to long-term attention to be sure. And once you have that, you can do a whole bunch of things with it, including pay your reps. So now the comp plan is like, yeah, you get paid half when you get the signature and wire and half when they hit the lead indicator retention.

And it's like, I'm not screwing you over. Most people hit the lead indicator attention in the first month. And some people, if you have a free trial, hit it before they even sign the wire. So just do both jobs. Get the wire, get the money and get them. And you're not like turning your, a lot of people think,

oh, I'm turning my rep into a technical consultant. No, it's just like you still have the technical on border. You still have the customer success measure. You still have the economy. The rep is just saying the things necessary. that they should be to tee up the expectation of the account to work. But how does that translate insurance, Ryan? Directly.

So one of the things that I have always thought about with SaaS and SDR compensation is this is a conversation that has probably been had more than any other space in the property casualty insurance industry. Wow. Because the reason that property casualty insurance or I'll just say insurance, because I want to separate out life, it's a completely different monster and health. So we're talking, guys, we're talking home and autos, commercial insurance, that kind of stuff, is that the upfront commissions are very small. So it's called building a book of business. Yes. And essentially, you get a front end new business split and a renewal split.

And one of the things that when I'm working with founders of agencies, you know, because I work in that space a lot, is that those levers are really important to what you want your business to do. So if you want, you know, incentives drive action, right? Yes. So if you want top line growth, if that's what matters, to your point, then you ramp up your new business commission. You ramp down your renewal commission and guess what they're incentivized to do. Right. fogs the mirror, put it on the books. Now, the interesting part about that is business owners, agency owners, in this case,

founders if it's a SaaS company, they love to thump their chest about that new business revenue. Dude, you should see the year I had, man. And then it's rolling off the back, just like you said, you're pushing 60, 70% retention rates and you can't grow an insurance business that way. A year later. Yeah. Which is too bad.

Now you've, like, buried this. dug this hole for a year. Holy cow. So here's my question for you because I have I have I have a whole bunch of thoughts on this in this area and I think it's very goals what you're trying to do with your company, what season you're in specific. But you said you said something and I just I'm very interested in this question from sales leaders. Let's say that SDR has a retention piece to their business, right? So some form of hey, you bring it in, you get half you, they hit their, uh, leading indicator retention, you get another half. And then we give you a 3% ongoing spiff for the lifetime of the account for, you know,

if you need to come in and touch them or, you know, be that kind of second set of hands or whatever. And they get to 500,000 in personal income, right? And they, just like you said, downshift into second. umbrella goes in the drink, feet go up on the stool. But they're maintaining a half a million dollar book of business. every year. Yes.

Why is that bad? Because you're wasting. An army of people managing a half a million dollar book. If the retention can, let's assume for this thought experiment, the retention is higher if they're continuing to touch it. Yeah, this is like, this is cool, Ryan, because we could, we could like maybe try to push the frontier on insurance commission plans and strategy, which would be great. Because I can learn from you and more of my tech world and we can do some things in the tech. So I have an answer to that, which the asteris is going to be like ability to attract talent. But the problem with that strategy, and I get it, it's like you busted your hump for two years, five years, whatever it took.

And now you got your big, big of business. This happens in wealth management to some degree. You know, like it happens in other industries. The problem is you're wasting a skill set. That person has the capability to not. not only maintain that book of business at the, you know, the 98% that you want, but also go find another $2 million every year. They're just not motivated to do so.

And you could devise a, you know, I'm going to take like talent competition aside for a sec. You can devise, if the whole industry moved in this way, you would get way more of those folks. And you could do what they call a gated commission plan, which is like, all right, congrats Ryan you've got what's the book what when do you relax is it five million when when do you start to put the what's the book of business that the industry standard is when you hit uh about 10 grand in monthly renewal commission so about a buck 20 is when you see the first down shift and at 250 is when they start to coast usually okay so good for you you've got your huge book of business you're you've got 250k coming in every year just to maintain that and

So basically I'm going to pay you What do you get paid? Like is it 3% on the renewal? What's the, So we can talk to it. Maybe 40% new, 20% renewal. Okay.

So I'm going to give you 20. You're making $250K. So you've got $5 million book of business. I'm paying you 20%. I'm paying you 20% and you're just coasting. So here's how you, the problem is you're wasting that hunter skill. Because that's a gifted person that could be just,

doing more business for you and them. And so you could use a gated commission plan, which is this. I'm going to pay you, if your new sales in 2026 is under 200,000, I'm going to pay you 15% on renewals. If your new sales in 2026 is between 200,000 and 500,000, I'm going to pay you 20% on renewals. If your new sales is between 500 and 750,

I'm going to pay you 25. percent of renewals. And if your new sales is between $750 and over $7.50, I'm going to pay you 30% of renewals. I like that. I mean, pushback, though. I mean, my first pushback would be, dude, what senior person is going to come there? It's like, I have to work forever now. I can't just do.

The whole reason I got into insurance was to work my ass off for five years and then go buy a beach house. But this Ryan's comp plan is shit. I have to work every year. So that's definitely a problem. because, you know, burnout for, I mean, burnout for sales professionals is a real thing. Yeah, of course.

There's no doubt. Yeah. But I will say there is a particularly, a particular acuteness to burn out in insurance. If you are nose to the ground grinding for five, seven years. Like, there's, insurance is a odd business, dude. Yeah. I can work on it with you, though. I want to get a chance of working on that.

But keep going on your, keep going. Yeah. So what my, it's an odd business in that, and I fought this for a decade, a decade. I fought this idea that like there was actually something unique about the ecosystem, the fact that there's 50 states, every state is regulated independently. There's also federal regulation. There's all this. The data, like, I don't know if you've ever dug into the data issue in the insurance industry,

but it is like it will make smoke come out of your ears. It's really bad. There's like this, there's like this frictional grind to the process as well. There's, there's no straight through processing. Like, none of that exists. So my, my, so what I've seen a lot of founders turn to and I'm really interested in your take. I love this gated idea. Yep.

Where does, like a phantom equity play as well. Because I've seen, I've seen guys and gals try to use something like a phantom equity or, um, some sort of ownership plan as a way to incentivize long-term growth. as well. Love it. Yeah, there's multiple different ways to do this. So there's that play. And then, yeah, there's, you can, you're just trying to, like, give them a reason to, you know, continue to grind and get out there. Okay. Now, my only counter to my personal devil's advocate, which was, like, competition for talent, where it's like, I can go to one firm work my ass off for five years and say on a beach. I can go to Ryan's firm, work my ass for five years. And I still have to work to get

the true pay. My counter to that, though, is remember that I, yes, I did say that if your sales sock, your renewal commission drops from 20 to 15. But I also said that if your sales are good, your renewal commission goes from 20 to 30. So I believe that word will get around and there are, you tell me if I'm wrong, but like every sales industry has those friggin' grind. they just are addicted to the quota. They love to do this. It's their art. They want to wake up every morning

from the age of 22 to 65 and frigging go find new people. They're coming to your firm because they're getting paid. So like that would be my slight counter is like, I think this plan will suss out the mediocre, I want to do, you know,

and really attract the bigger performers. I would say like the other thing that was like wound up in your comment was burnout. And that's in everything, dude. Like, tech is a grind to. Like, these were all grinds. And I had this innovation at HubSpot that while in the midst of a,

a tech sales climate where the average tenure was 2.2 years, I was able to pull off 6.5. And the key to it was this. Because I would get these interviews from, I would interview like these top reps coming from from other places. I'm like, why are you leaving? They were like, well, I'm just kind of like burnt out there. I like, I have the same OT, the same quota, the same territory. And yeah, guess what? We just did our annual planning. They cut my territory in half. They doubled my

quota. I'm like, why are they doing this to their top talent? Like, these people just leaving for these like absurd scaling strategies like cut quarter and half, double quote, like, that's the formula? And so I was like, okay, we're not doing that. I'm like, these, and the other thing that was happening was I kept having top reps come to me and be like, I want to be a manager. And I'm like, why? They're like, oh, that's the only way you can grow in sales. And I'm like, dude, there's so many studies that show that the top reps make the worst managers. And like everybody, all the top reps become, like, if they try it, they're like, dude, I hate this.

It's like adult daycare. I've lost all my personal independence. I'm making less money because I used to just crush it on my own. Now I'm trying to crush it through eight people. So like I'm putting these things together. I'm like, dude, there's got to be a way to grow without becoming manager. So I created this promotion path, which is kind of what you're getting at Ryan with this pride, this equity share where the way I did it was like you come in as a level one rep

and you get like your 50K base, 50K commission and you know, like you got to hit your, your quote is whatever, like 800,000. and then the way that you get to level two, if you get to level two, I'm going to increase your commission to 60K, so you get a 10K OTE bump. And I'm going to give you a thousand stock options. That's how it worked. Like, it was very common correctly.

And they're like, oh, sick, that's awesome. How do I get to level two? It's like once you hit an $800,000 install base, and then you can put other stuff in there like, oh, your leading indicator attention needs to be this, right? So that's another way to like have them as an LTV hunt. you know and this is where you could let's do the insurance example let's do with that so you come in at level one you get your payment and if you get to level two i'm going to bump you to now 25% renewals

instead of 20 um and the way you get to level two is you need an install base of you know a million bucks and your new sales average per trailing six months has to be like whatever 10,000 so that gets some hunting all the time once you hit the that. Some people do it in four months. Some people, it takes two years. You go to level two. You get the bump. Now you got to go for level three. Level three is to get to three million install base. And your new, your average monthly sales has to be 50,000. I apologize if my numbers and insurance are off, right? But you guys get the point. And when you get to level three, we bump you another, your renewal rate goes up a little more. And we give you a little equity. You get what I'm saying.

And what happens, Ryan, is there's this game that they're playing that motivates them. Like this, this six year journey seven year journey insurance is no longer just it's like oh shit I'm level four I'm trying to get to level five this year and you could correlate with like skill certification certain trainings mentor you know like it could become this whole like college experience and maybe you've seen it like I apologize if I'm like talking about stuff that was done 20 years ago no I love this I would say there are a few more sophisticated organizations that do have and run sales departments with, I'm not going to say anything like that,

but certainly more sophisticated and well-thought-out versions. But they're rare. I think the online... Do they work? I give leadership in general in the insurance industry a C minor. So it's hard for me to say. You know, and there's a common joke that, you know, if you're even a B-plus player

and you come to the insurance industry, you feel like an A plus player. Like it just... Well, I want to work on that together too, but like, okay, I got you. Yeah. There's a whole conversation there. Yes, yes.

It's a very odd space. But what I think, an unlock that you have given my mind in this call is I love the idea of attaching variable stages of compensation to this leading indicator of retention. Yeah. Because especially, you know,

it's not a one-off business. It's not, we're not selling a t-shirt, even though you can have a t-shirt, renewal, I guess, but, you know, this is a very retention-heavy business. And, you know, things, now, there are absolutely indicators, particularly if you own a niche, you have a, you know, a specific industry you're going after or a specific product you sell. It's not hard to figure out what the leading retention indicator is going to be on these fairly quickly.

What was an example? Like a simple one would be the number of policies you have. Great. Industry average, if you have one policy, 36%. 6% retention, two policies, 72, 3% 903. Perfect. That's like very classic like platform sale when you get multiple modules, it sticks. It's great.

Yep. So that would be an easy one. And, you know, it's funny though. And so here's what I'll put in front of you. My agency, the reason that we, so for one year, we were the fastest growing small commercial agency outside of the top 200 in the entire industry. So think of top 200 agencies as like Marsha, McClend and Brown and Brown. some of them are publicly trade, et cetera.

Then you have everyone underneath that. That's essentially the way the industry works. There's like top 200 mega agencies and then there's everyone else. And we were the fastest growing small commercial agency in the country for 2021 because I built, we were wholly inbound. So everything we did was based on YouTube and SEO.

We were driving north of 35 inbound leads a day for a 10. Amazing. About 14. And I built this like sales process that was all psychology basis. Basically, Chris Voss has never split the difference, but rigged to insurance, right?

So at the end, the person had been, you know, sciop to the point where they couldn't say no. Now, and so this is where my question comes from. Our philosophy, because on inbound, my personal philosophy is sell the problem, close the account later, right? So you round out later, sell the problem at the point of sale. So because with inbound, right,

I mean, you know this as well as anybody. you worked at HubSpot, right? When they have, inbound is more like, I have a problem, and I have decided that you are the person that I want to solve my problem. So what I taught my reps was, sell that problem for them, take that concern off their brain,

which is often one policy. But the numbers don't lie. You need multiple policies if you want to retain. So we then would go back around, and we had a process for going back around and trying to close out and round out the rest of the account. same meeting or later? Yeah, so in general, what are your thoughts on that?

And we did flail quite a bit with compensating because of that model. Getting the reps to go back around and close out. Do you have account managers do it? There was a lot. Oh, yeah, that's a great question. Yeah, let me unpack that. By the way, when you went back around, was that like in a separate meeting or you tried to do it in the meeting, same meeting to get the second policy and the third one?

Unless they just said, here, take all my stuff, it was a separate meeting. we would come back to. Yeah, that's fine. That's cool. Okay. I like it in general. And then you're, you're asking an abstract question.

So first out, let me just frame. You're asking an abstract question of like, do you specialize or not? And the quick answer in that context is I don't think you do. I think they're their full cycle. But I have actually, I'm faced with the strategic decision all the time in very different contexts, from pharmaceuticals to tractors to software to whatever. And there's a two-partisan. part question to help you determine it.

The first question is, what percent of the lifetime value of that account is captured in the first sale, like the LTV potential? If, like, it's 90 percent, then you're going to specialize because this is around, um, the, the toughest skill in all the whole go-to-market journal journey from marketing to customers to conservators is just that hunting closing skill. I don't want to waste that on retention if I'm going to capture 95% of the potential on the first sale. But in this case, it's not. One policy, we can get four. We're talking like, on average, maybe 25 to 40% of the potential is in the first sale. So that's like, second question is,

that's leaning toward full cycle. But the second question is, what's the skill set necessary to capture the other 70%? Because there's some places like, like Open AI, like they just trip compute wires and like they just have to click buy more. Like, I'm not going to waste a hunter on that. But, like, in this case, no, it's a skill. Like, you got to get back in front of that, you know, a husband or wife. You got to, like, probably even more difficult because their pressing need was life insurance because they're about to have a baby.

But now you've got to get their home and auto too. You know what I mean? So it's like, that's tough because they're already, like, with someone else. So I think the answer is definitely full cycle, is keep people there. because the reasons are like there's always pros and cons to specialization. I think we've batted away the pro is you're you're taking that very hard to find hunting skill and making them hunt and close all day as opposed to waste them with minute skills. But the cons are I just spent like, you know, a month with Ryan talking about his family,

his kids, his wife. That's like a relationship and knowledge that is going to be super useful for me to go get the auto and home. There's something about spring that just feels like a reset, longer days, fresh energy, and the motivation to try something new. This spring, that's something new, could be learning a new language. That's where Rosetta Stone comes in. They've been a leader in language learning for over 30 years, with an immersive method that helps you learn naturally, connecting words, visuals, and meaning and context instead of memorizing or translating. With over 25 languages to choose from, like Spanish, French, German, even Japanese, Rosetta Stone is a go-to tool for

real language learning. It's designed to help you think in your new language so what you learn actually sticks. Plus, true accent gives real-time feedback on your pronunciation so you sound more natural, like having a personal coach. And you can learn anytime, anywhere, whether you've got five minutes or a full hour. Ready to start learning a new language this spring? Visit rosettastone.com slash today to explore Rosettastone and choose the language that's right for you. Go to rosettastone.com slash today now and begin your language learning journey. Insurance. And if I hand that off, that's headwinds. Right. So, so, yeah. Yeah. And so, but yeah, to your point, like I like the, we call it the

land and expand in software. And I think it's the way to go. I think it's a way to go. And it just takes deep discovery on like what, you know, when you look at it from their lens, why would they want to, after they bought life insurance with you. Is there a common path, like what they started with and then what you had up some to? Or was it all over the place? In our business, because we sold commercial insurance exclusively, it was most people started with us for workers' compensation.

And then we would expand from there. So we would get the workers' comp. We'd get it on the books because it was also very often time sensitive. And then from there, we would dig into all the other stuff that they had. Yeah. Right. And, you know, what I was trying to get, rep. So for me, because 90 plus percent of the leads in our business were inbound, you know, I didn't want them doing anything other than talk. Yeah, just close it. Right.

We used, we used like this, we called it the one call closed process and, uh, and video proposals to sell. So we, we sold on video proposals. And amazing. Sick. Never wanted my reps to talk to a prospect more than once. It happened. But the goal was, And we actually got it. The highest mark we had was 63% of 102 accounts were sold with the rep only talking to the prospect one time. That's insane. That's amazing. I mean, you crushed that first experience.

Let's double-click into the bundle. Because this is classic bundling. And I think when you look at it in a buyer-centric, which I write a lot about it in the book and stuff, it's like, how do you be buyer-centric versus sales-centric, which will help you build a better business and more durable business? when you look at this decision from a buyer-centric way, it's like you just take the extreme options here, which is like, can I bundle everything with you guys, have all three policies,

or why not have the best policy and here, here, with three different agencies? And what is, what's the bundling advantage? And obviously there's, you know, I'm curious what you say to that, and I have a follow on to that, but like, I imagine there's just like, you know, administrative shit,

you know, three different relationships. I imagine there's some discounting around bundling, like, talk me through what you guys were doing. That's essentially. I mean, the good news was because people were coming to us, and it wasn't based on ads. So we weren't, we weren't, there's trust. Wedging in with an ad.

Yeah. It was all content marketing. So I had people that had watched, and this is insane, 30 videos on YouTube before they'd call us. So, like, they were already closed, right? So, like, what I would tell my team is like, guys, we're not selling them anything. We're validating their decision to buy from us

and taking order. Totally. That's what we're doing. But what I found, so based on this process, I was able to get a new rep who would come in at a 30 to 40% close ratio, and when we taught them the one called closed process,

we would get them north of 80%. So they were closing north of 80% of a qualified leads. And I wanted to, bundle. So I wanted to owe me, because I know the numbers. It's easier. It's less calls. It's less time. It's more money. It's higher retention. I know all the math. But what I found, and I was never able to get my head around this, was if someone called me for a workers comp policy because they had a problem with their workers' comp, if I injected, hey, send me your liability and your property and your auto two, close ratio will go down approximately 10 points. I'd

totally agree with you. I think if we could run a scientific experiment, running those two sales motions side by side, what you landed on with the land and only focus on workers' comp is absolutely the right decision of the first call. And my follow-up question that I wanted to dissect with you was thinking through now the intention, now that you've got them closed and you want to go to the bundle. What was the biggest block? What was the biggest reason for lack of success in no more acute pain. Would you be able to get them back on the meeting? Yeah, so it would be, you know, it would just be ghosting.

Because, you know, remember, a lot of these are guys in a truck with three workers with them doing landscaping. Right, cool. So I think, like, that's what I figured, and that's when you have to, like, this gets down to, like, this really cool stuff about, like, sales process design is you have to, like, really isolate it down to this step and this psychological moment and strategize. around that. So it's like we got him on the land, signed contract payment. We got to get him to the bundle and the blocker is getting back on the phone. And so like what can we do there? So now what I'm trying to think is in that moment of the land, what's the offer that is like they have to get back on the phone with me after this is done? It's kind of I don't know what it is. It's like, hey, I, there's got to be something in there. I wonder if this could be into like moral hazard manipulative slimy stuff but like did you ever try hey Ryan hope you're doing well I know it's been six weeks there's a little issue on the policy could you mind email me back with a good time to talk um I did I didn't ever try that but I would say we tried a lot stuff around it.

You know, we would, so the best success was table setting the roundout without asking for the business. Sure, I like that. I like that. That's classic. You know what's in there. Yeah.

Understand what the portfolio actually looks like. Yeah. And then you just kind of say, hey, and if everything goes smoothly, you know, I know you got liability and property. I'll come back to you in about a month. Yes. And we can get that all squared away too. Because I was a big assumptive seller.

I just think it's the easiest psychological habit from a sales perspective. And so we would just kind of assume the sale a month later. And that worked. But it was definitely a challenge. We had to use, you know, we used all the kind of drip campaigns. Yeah, yeah, good. I wanted to abstract because I know some people in insurance and I'd be like, oh, this is cool. I want to play with this.

And I want to abstract this out for everyone else into some principles here. There's two things that happen there. And this has to do with platform sales and bundle sales where I have a company right now that's crushing that's completely messing this up. They have a platform with five features. And the reps are just like getting these customers on the call and being like rushing to tell them about all the features. And I know the close rate is one third of what it could be. And it's like there's tons of data that shows that what you've done is correct in a in a bundle platform. offering that that's your unique advantage,

you have to do deep discovery to understand the module or two modules that are most applicable and spend 80% of the call on that. And then it's like a before they leave, oh, by the way, just want to make sure you're aware of this, this and this. We're not going to talk about that now. Don't focus on that route.

Just want to make sure you're aware of it. And then to your point, you're kind of qualifying some of the other stuff. So it's just this like, don't try to get through it all. Lean toward the, that's an abstract point. The other one that's coming out here, to Ryan is aligning the sales. The point of a sales process is not to get your product out there and pitch your product

is to help the buyer buy. And one of the fundamentals of any strong, I talk about this in the science of scaling book, one of the key foundations of every good sales process designing a buyer journey. People have their pitch deck, objection handling, discovery guide, qualifying matrix. No one has a buyer journey. And that's the framework. And like it's coming to life here on what Ryan's saying where if you did a buyer insurity of a policy buyer in the beginning, they're just like trying to figure out what workers comp to get. And Ryan's crush that was his content marketing.

Now they bought his working comp. Guess what's next? They need to understand the advantages of bundling and why like the cost savings. So his marketing is totally different when I was doing drip campaigns. Right. So just like some abstract principles on this mini case we're teaching right now that like applies to no matter. if you're selling software, pharmaceuticals, or tractors. Yes, and I completely agree.

So I tested, I built a sales script for them, literally tested every word in a script and every word. And I'd have different reps working different versions and all this kind of stuff. You know what the ultimate, the biggest jump in close ratio was the very first question that we asked, which was quite simply, hey Mark, thank you for choosing Rogue Risk. my name's Ryan Hanley what's going on how can I help beautiful and then you shut yes up yes

like teaching silence to salespeople it's like a superpower and it's the hardest thing in the world to do and I would literally say to them shut the like in a nice way like but but like you're no one cares that we have 50 carriers no one cares that you've been in the business for 17 years right like nobody cares exactly guys standing outside of a job sales and he needs a workers' comp policy to get fucking paid. Like, just shut up and listen to him. He'll literally tell you. And this is my question.

For having run so many sales teams and work with so many founders, right, I get a lot of questions, you know, because of my past about, like, what do you do when you have a process that works and you have a talented salesperson who seemingly wants to make the process their own and you know they're not maximizing because of it, right? I get that tension between do I just go hardcore, like, you're not doing it, you're out? Or is it, do I coach them? Like, how do we coach up that talented but underperforming salesperson? Like, what's the best way to maximize their performance?

That was a beautiful question. In my first book, I elaborated on a statistical study I did where after hiring 200 salespeople had quantified all the interview assessments and scored everyone on a one to ten on eight different attributes and then over time was able to correlate that to success. It took me two years to figure this one out, but it became the number one attribute that I interviewed for and it's rare for me to find a sales context where it isn't a top three, if not number one. Coachability.

So the answer to your question, dude, is like, there is, like, there is, you know, some hiring attributes that you have to be super precise on because if you hire them and they have the negative of it, it takes a psychology degree to unwind it. And you just got to like suss those out. A classic one is like people that are new to sales. Like some people have call reluctance. You know, they get anxiety. And that does take kind of it. It's something in your wiring of a childhood. You have to go to a psychologist to like fix it versus like product knowledge. knowledge learning, like, okay, we can get there. You know what I mean?

But Coach of Billy, the biggest answer to your question, Ryan, is make sure that's a huge part of your interview. And like, I just, I just say, hey, listen, hey, Ryan, love your resume, love the 15-minute screen. I'm going to have you come in the office. I think you're great. Part of the interview that we're going to do is I'm going to send you our training manual.

And we're going to do a role play. I'm going to send you a LinkedIn profile as well for a prospect. And we're going to do a role play and just be prepared for that. And so we'll do the role play in the interview. And then there's a bunch of things I'm testing in there. But after the role plan, like, okay, Ryan, great job. Like, how do you think you did? I'm letting him self-assess because their ability to self-assess is a attribute of their

coachability. Like low-coachability people think they did great. High coachability people are very analytical about their self-assessment. And then I coach them and I say, hey, here's, in every interview, I give one piece of positive feedback on the role play and one piece of next. Because I don't want them to think that they're bombing and they have an anxiety attack. So the positive thing was great rapport. The negative thing was you could have had deeper discovery on the problem set.

And I coach them and I watch how they pay attention. And then I either repeat it in the moment or I'll say, listen, I'm putting you through to round two. We're going to do another role play as part of that interview. And I'm getting a real good view on coachability. Now that's the biggest thing because it's really hard to take an uncoachable person and make them coachable. Um, the, if I do, if someone sneaks through and like, you know, there's, God, there's so much to this dude. But like, first off, like, there's instilling a coaching culture in your organization. So many people on the hamster wheel and they're reactive and they're on calls and they never get to it.

First day of every month is coaching setup day. As manager, as director of all my managers, I'm like, all right, we're going through each rep's diagnosis, coaching. and how we're going to measure how we did with that coaching involvement. And we're looking at data, everyone to get. And the manager is with the rep working on that. Like, hey, Ryan, like, let's look at your data after all this and like your reflections. What do you want to work on this month? Like urgency development?

Great. How should we do it? Great. I'm going to jump into three calls. Let's book those three calls right now for the month. So my whole coaching booked in the month. So that's like proactively driving a coaching culture. And the final wrinkle to your question, Ryan, is like, God forbid,

someone's like, dude, thanks for the coaching, but I'm good. I have my process. Then you just need a culture where it's like performance plans are factual. First day of the job, welcome to the company. Here's the CEO. Here's the commission plan. Here's the way you get fired. Is if you are missed your quota, two quarters in a row, if you're below 80%, you're on a performance

plan. And if in that next quarter, you're not above 90% you're fired. No hard feelings is how it works. So then the system's there to catch it. And if I got a non-coacher, then it's like, okay, dude, you do your thing. And that person watches me sitting with Julie, sitting with Bob, sitting with whatever. 90% of the time, they come back crawling on me a week later with their tail between their legs. So there's a couple nuggets for you.

Yeah, no, I love establishing how we break up at the beginning. That was a big unlock for me in my hiring process because you'd have people, when you out, Because when you outlined, okay, here's all the best case scenarios, blah, blah, and everyone loves that, right? You triggers on how much you do and you got your scaled retention numbers that we talked about. And that's all great. Oh, there's an equity plan. If you hit stage three, what when I implemented the, and here's what happens if you don't

hit your numbers. Right. You'd get people who self-select out at that point because they know they can't coast, right? Like just having that in there will get people to self-select out. I mean, I completely agree with that part. That's a, I know a lot of people don't do that, and it was a huge unlock because the coasters will go, oh, wait, they're actually going to track my progress. And, like, I'm going to have, like, real hurdles if I don't hit my numbers. Like, I don't want to work here.

I want to go. Keep that at the competition. What a great way to build your culture. Yeah. The other thing we did, which I think I've talked about very briefly on the show. But I'm interested in how you would do this in tech as well. I created monthly profitability scorecards for every sales rep. So one of the things I realized was that I felt a disconnect between our reps and their

contribution to the overall growth of the company. And on both sides, right? If they're not doing their job, the negative impact. And on the top side, their positive impact. Perfect. We created these little PDFs. And every month, we'd send one out to every. And it would be basically their salary, their benefits, their commission split on new and renewal.

So the total cost to the company versus how much actual top line revenue they were bringing in. And we gave them like this net profitability score and then pulled it out month over month. And I'll tell you, our high performers saw that. And it was like we put, you know, Elon Musk level rocket fuel up their ass. So good. They just took off because they were like, wait, I'm contributing. five grand, 10 grand, like they saw their profitability number go up. And like those accumulators, those people that are driven just by progress,

they want to see that up into the right, they like couldn't freaking handle it. Because now they, they had like, it was almost like there was like this sense of pride of like, look how much profit. I put back to the company. It was really cool. So good, man. Yeah, that came from a mentor of mine. But that was a huge unlock for us as well.

I think it's brilliant. And I'll abstract it for everyone on here, which is like, it's totally incorrect in the way we all measure our sales people, which is just like you put it up on the board. How many new sales did you generate this quarter? That's a part of the story. What you're saying, Ryan, is like the end picture in your business profitability, which is pretty much everyone, but like they're like for a high blitz scaling business. Like it's it really like the way we talk about is in unit economics contribution, right?

And like, which is a big part of it, like the LTV, getting back to that. you're how much you sold in a quarter gives zero visibility into the lifetime value of what your customers and that needs to be more of the end game which is what you're getting at so like where where I see translate into other business like yeah fine measure measure the quarterly revenue new revenue from these reps but also measure their LIR of their install base measure the LTV the retention of their install base right like so so I think that That's the key point there is like the microscope we put on and measure classically measuring sales teams is like incomplete.

I want to pivot away from this sales thought experiment as we kind of come into the close of our conversation. You went from private to public to academic to investor and have seen this incredibly broad swath and an incredible number of companies. What are some of the big. biggest differences in mindset and they can either be positive or negative between those different places, right? Because I know most people tend to sit in one of those buckets, right? They just live in private or they get into public. They just live in public. And what can they be learning from each other?

You know, very free form. Wow, man. Yeah, there's a lot in there. Thank you. That's a cool question because, like, you're right. There's not a lot of people that sit deeply in all those places. I guess I'll try to give like the general, and I hope I don't offend people through this, but I'm just going to try to generalize the average of those that are sitting in each of those. Private, it's a hustle, you work your ass off, there's really amazing people. It's a little more athletes than specialists. You don't see as much of like I did this one little job for 25 years and I'm the expert. It's a little bit of like my job could change next month and I love that.

big upside. Can I just clarify something? You called that athletes versus specialists. I've never heard that type of person referred to as an athlete before. Is there something there? Yeah, for sure.

We talk about that a lot in broad spectrums. It's like, think of your first salesperson at a startup with five engineers, what they have to do, and compare that to the 100th salesperson hire into a 10,000 person company.

Like their job is like, they have the Midwest territory for the SMBs with a coach and the pitch, you know, pitch tag. Like the first rep at the, they have nothing. I mean, it's like, that's an athlete. I mean, they're doing everything from like setting meetings, building scripts, like setting up the CRM, like doing the first demo, like talking to the engineers on what to build. That's an athlete versus the 100th hire who's like, dude, you're going to run the San

Francisco healthcare territory for us in mid-market. That's a specialist, right? And you could translate that in R&D, finance, whatever. So yeah, that's what you have in there. I like that stuff. Personally, that's where I'm most attracted to. Once you approach public and go public, very, very polished, very buttoned up, um, the politics comes in quite a bit, um, a little less risky.

People who want to hit doubles consistently through their career rather than like massive of home runs, which is fine. I mean, I'm not offending anyone. It's just like this is what you start to see. A little more 9 to 5. Just a lot of like more about like, it's a lot about setting up systems and people movement stuff as opposed to like writing code and selling deals.

You know, because you're just so far from it. You're setting up the strategy. And also like in the beginning, I would say 10% strategy, 90% execution. Once you get to public, it's 90% strategy, 10% execution. Because these like,

when you're like six people, you're like, I have an idea. Good, let's try it. Two days later, we've tried it and we know the answer. When you're in like running a 7,000 person company, you're like, I have an idea.

Let's try it. It takes you 18 months to try it. Because you're like mobile, you know what I mean? So that's where, and that's why McKinsey and BCG make a lot of money because the strategy is so important. Okay, so you get into academia.

I mean, again, like, it's just a lot slower-paced. I mean, and rightly so. Like, the people who are like tenure-tracked, dude, like, you're going to take any question that we asked today, like, the optimal way to, like, specialize your reps. That's a five-year research study for a professor to make tenure. you're spending five years researching every single angle of that to come up with new law, which is like, you know, for me, I'm like, I just can't. I don't, I have ADHD, like career ADHD. I can't do that.

There are some people, but it's important because that's where breakthroughs in medicine and economics and all this stuff came from was that rigor. So that, I mean, this is really important today where it's like, you know, like we didn't talk much about this. but like I think there's a ton of energy being put into building and driving the new AI technology and next to zero energy and understanding the implications. And I think academia can play a massive role in that because of just the way they're set up, right? So so like that that's what it's like there.

It's all about truth. It's very abstract. It helps you a lot of operators think they know the truth, but it's only the truth in their context, whether it's tech or insurance or US versus Asia, you know, North America versus Asia, in academia, you know truth abstract.

Because you have to look at it from every, you get what I'm saying. Like, when I talk about like, this is how sales works. Here's a first principle of sales. I have pressure tested that in North America, Africa,

and Asia. I have pressure tested that in a 10 billion dollar business and a $10 business. And I have pressure tested that in health care and tech. Right? And that's where academia, like shines.

And then the last part is, before you ask the following, is like VC pattern recognition. You know, dude, like, we look at 500 companies for every investment we make. So it's about founder picking. It's about validating. That's a big enough market. And I would say one of the big surprises is,

there's two things. just because we have money to invest and you're looking for money, that's not a fit. You have to remember that, like, the MIT endowment's my main anchor. They look at 1,000 VCs they pick 30 to do business with. They pick those 30 to fill a hole. Like they need consumer B2B life sciences, they need growth, they need pre-seed. So when I walk in and say, I'm a B2B software investor at the seed stage, and you come to me with a life sciences business at the growth phase,

you might have a sick business. I can't do that deal. Right? So it's like, so just you have to, there's a qualification there. And I think the other thing, yeah, and there's like fun math associated with it. And I would also say there's like a little bit of a capitalization fit.

Like I said at the beginning, like there's a lot of people that show up with a great idea, but I'm like, don't raise venture capital. Yeah. Because there's certain ideas that should be bootstrapped. There's certain ideas that should be private equity. And that's kind of a surprise, too. That was one of the biggest things that I had to learn the hard way in my career.

So I was telling you, I scaled my business. And I ended up selling it. Coming out of COVID, a whole bunch of stuff happening. Just over 24 months, we spend the business and sell it, which is great. Except I sold it to the wrong people. and I didn't, if you've never been through selling a business like that before, and I didn't have anyone, I didn't have anyone in my corner who had enough experience to kind of tell me, look, like, these guys are saying the right things,

but structurally what they're going to want out of your company just doesn't align with, you know, going back to incentives, what they were trying to do. and it was friction, you know, three months, from three months in until I hit my first exit trigger, it was just friction, friction, friction. How, you know, when, this was a huge eye-opener to me because in my mind, like, I was selling my business to these people who were going to inject it

with all this capital and I was rolling equity into the, into this, you know, P-back company and, you know, we're going to the moon. And then come to find the reality hits of, you know, P. Economics and their obligations to their LPs and all this kind of stuff. And it becomes this major issue. How, what are just some reverse vetting metrics? I'm a founder. I'm an entrepreneur. I'm going out. I either need money or I've,

I've built this business for seven years and now I'm looking to actually, you know, maybe be acquired or merge with someone. Like, I know, I know this is a very deep question. I get it. I probably do hours and hours. Yeah. But what are just some of those, the things commonly missed that lead to friction post sale? What are some of those little pieces that people commonly miss?

Yeah, I mean, we can talk about the exit path for a moment. And like, obviously, if, like, this is just a transaction with nothing after, you don't have to think too much about it. If, like, you're selling this thing for 500 mil and you're getting it cash on the day it closes, then you don't have to think too much about it other than like, yeah, you want to take care of employees, you want to take care of your customers. So like you want to know a little bit there, but personally it's not as much. But people get burned a lot here because they just think that like, okay, I've been growing this business 20% for the last 10 years. Like as long as they keep growing it

for 20% for the next three, I'm going to hit each of my exit triggers. But they don't realize that like they're no longer solely in charge. Like this gets embedded into the system. So like, you got to first off just appreciate that and then like dig into those questions like what are we doing here like once this deal closes are you leaving us alone here in albany and let us do our thing like what is the integration path can we just run or do i now have a boss am i is my sales team gone and my i'm selling through this team how do these products work together what's the like so many of those questions need to be walk through if you're being dependent on exit. it triggers to diligence your personal situation.

And like this, that same narrative can carry to through like a fundraise. Like, dude, like, okay, cool. Like, okay, I want to invest. 30 million at a 500 million in evaluation. Okay, great. Like, like, is there, is there any like, is there any preference stack on that?

Like, is it clean, blah, blah, blah. Is you taking a board seat, blah? Dude, that's like not the whole conversation. Like, once the deal's done, what is the plan for next year, revenue-wise, how many salespeople do we need to hire? Like, I want to make sure we have that discussion to make sure philosophically we're on sync so that we don't have that boardroom eruption.

Because I would say, like, boardroom eruption is a top five killer in these, like, growth journeys. Yeah. The experience for me was, and I think part of it is I'm probably a little too trusting as a human in general. and what I found very interesting was they bought me because we were lean mean selling machine. We just sold. We were fucking good at it.

And I thought when they bought us that why wouldn't you just want to keep pulling that lever? We had a cash machine, right? It's the insurance industry. We'd figured out how to sell with a cack that was like near zero. It was literally like just my time. So like we're talking like near zero cack. I mean, we were crushing. And what I found very interesting is all of a sudden I started getting calls about the professional nature of my tech stack.

And the human resources guidebook and hasn't been properly delivered to the employees. And, you know, all of a sudden I got a $8,000 enterprise IT costs associated to my budget line. because if I wanted to call tech support to help them with my with my Mac you know what I mean like it was I started looking at that going I wow like I'm 42 years old and I feel like a like a baby I feel like I'm 18 again learning these lessons like right on the nose and I just couldn't wrap my head around a 17 person board meeting in which I was told my CRM wasn't professional enough I was like I don't even understand what that means. I'm also hardcore ADHD, Irish Catholic, a sailor. Like, you know, so I'm struggling just to deal with these people who I don't think have the brain capacity to keep up what I'm doing to begin with. And now they're telling me that I need to go from, from, you know, $15 a month user seat, CRM to Salesforce, which is $275 a user seat. And I got to eat that cost on my balance sheet. I don't know. Can I just go back?

You bought me to make money. Can I just go back to doing that thing? Like, that's all. I had no idea what founder life would look like post sale. Right. And it is my, one of the biggest mistakes I have ever made in business is not spending more time on like, what is my day to day look like when this, when I put my signature on that piece of paper.

And I say that only because we've hit this point and it's just a cautionary tale of founders. Like, that is such, like having some. someone else who's buying you describe what they think your world looks like. That is like question number one now. I'm helping a couple other businesses raise money. And I'm like, guys, what is your, what do they think? Not what do you think your life is going to look like? What do they think your life is going to look like?

I didn't ask that question. And I, you know, it was brutal. I think that's the abstract takeaway for everyone here on that point is like, during an investment or an acquisition, 90% of that, work is done to like transact that thing. And you have to do way more work like 50-50 on post-transaction, post-transaction, post-transaction life. That needs to be dealt. And it's key because like most people go through these things one, two or three times in their life. This isn't like a sales call that you just like skim your knees for the first 10 and then you eventually get it. So yeah, that's a great

takeaway. All right. I mean, I want to ask you about AI, but we don't have a lot of time left, and it's such a big question. Yeah. I almost just want a table. Yeah, yeah, I have to. I think you do.

It's a huge bubble. It's a huge bubble. Lean as an in. Oh, a huge bubble right now. Yeah. Like, just like, it's going to define the whole world. You have to start playing with it. It's going to slow you down at first.

You have to be patient. become an AI enabled leader, seller, whatever. I think, like, a lot of what you read about right now is, like, more Pets.com and web van than it is Google. Like, just do the, just go in a chat, CheapD and ask, do first movers usually win or do fast followers? Just ask them that and read all the studies. And then you'll find out.

With that little treasure hunt in mind, Mark, this has been an incredible conversation. I appreciate the hell out of you, man. I mean, I could pepper you with questions and have this back and forth for hours, dude. I love the way you think about the business. The book is the science of scaling. You know, I'm just going to advocate that we can't go off gut anymore. There are gut decisions we have to make, but to do this, right, based, you know, you need math. You need to work in the numbers and have a real plan.

I love the way that you've outlined this. Besides going to Amazon, picking up the book, where is the best place to go deeper into your world? Yeah, LinkedIn, I'm very active. And thank you for the plug, Ryan. And just want to remind everyone that I'm donating 100% of the proceeds to mental health. So if this, I hope that the reason you buy it is for the scaling curiosity, but just know you're doing good as well. I appreciate you, man. Wish you nothing but the best. Thanks for coming on the show. We're out of here. Peace. This time of year, the school calendar really starts to fill up, spring activities, testing season, and that final push toward the end of the year. It's a great moment for kids to stay focused and build confidence in what they're learning. That's where Iexel comes in. I Excel is an award-winning online learning platform that helps kids truly understand their schoolwork, from math and reading to writing and science. It's designed for pre-K through 12th grade, with personalized interactive content that adapts to each child's level and pace. I-XL makes it easy to stay on track with instant feedback and clear explanations, skills organized by grade level, and simple progress tracking.

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