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Duncan Wardle Unboxing | How To Unleash Your Creativity

The Story Box

CHAPTER

The Best Modern Cowboy Film

i love how mentioned like the cowboys. i'm only 24, but i grew up with all the classicsa a specialwawwewesowe was a classic for me. The best modern cowboy film, although i say modern for ye, made t bat 20 years ago. Tombstone, great film. Who else is in out? Colini, good filmer. There's a lot of black great cowboy films that were made back in a yoan time herewbut wild wild west days. If i were to do a survey to day of five thousand people and ask them why they go disny on holiday, the number one answer i'll get in my ter as we go

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Speaker 3
Well, let's talk about Pluralsight for a second. So for everyone out there that doesn't know what Pluralsight does, they do online courses. They're online courses, they're a content machine. They acquired a company called a Cloud Guru a couple of years ago that I knew lots of people that there. Cloud Guru was for how do you do online courses for the cloud, for developers, and Pluralsight does that at the IT level. If you just heard a ding on this, it was actually because I went to their site and the intercom like dings really loudly. And I looked at Hacker News because I was wondering, I was really curious, it's like, what was the, like, what was happening in the forums? And the really big theme in that was around the content and what they have offered has become stale in the last several years. And PE, if you think about what private equity does, it's not innovating. It's taking the shell, it's taking the husk of the thing and just doing it. If you need something to completely continue to innovate, I mean, Sam knows this better than anyone in the community, in terms of what he is providing for coursework, you have to stay at the edge. PE -backed business by nature is not going to be doing anything innovative so it is not super shocking that i will say itself is being written down and written off by vista. And buy all accounts vista is a p that has figured it out and lots of different ways you mark edo turn around in twelve months for like for x. They've bought SalesLoft, they've bought lots of different organizations out there and they're making good money off of it. To see them come out and write it down is a harbinger of the debt pieces of it that is weighing down some of these companies and
Speaker 2
are going to have to restructure. Do you see more of those happening because of the fact that a lot of those purchases happen in 2021 with low interest rate debt that has to that now has to be set up again at a higher interest rate and the fact that the PSE doesn't invest in product and now is a market in which if your product is not. to par, people will churn. So there's gonna be business pressure, and then this financial pressure on these organizations. Do you foresee
Speaker 3
more of these types of shutdowns happening? I'm not an expert in PE, so I can't speak to the PE part of it. Well, here's where my prediction, I am, I have gone pretty good adventure. After 10 rounds of fundraising in 10 years, here's what I said last year, and here's what holds true. I still very much believe that the growth equity funds that still have lots of capital in their funds need to deploy it are going to work on the companies that are executing really well, deploy capital, and therefore those soft landings are going to happen. will start to see the M &A pick up very early stage at the end of this year. Now it's not going to be the wins that all of these operators and founders want, but they can start to have a bet and a smaller piece of a much bigger pie of a company that's executing and finding home for their people. That's what I think will ultimately happen. But if you are this bigger organization that is strapped with debt, I think it's going to be really challenging to find a win when you're just holding on in the next two years to try to figure out a way where the interest rates come down and you can restructure that. But you're saddled with it and you're ultimately going to hit a breaking point. So we're racing against the clock, I think for some of these bigger organizations, Aasid. Again, I'm
Speaker 2
not a skin bow. So that's interesting. Sam, what are your thoughts on all of this? I don't... Were you surprised by the MNA numbers? I thought it would be there
Speaker 1
i don't know i find. My initial reaction is i wonder if there's. Look at the data and the data set and figure out what's actually being cross referenced. And also i need to compare your rear compare your two years i still think. sense that I get from the emails that I get, and I get emails from investment bankers, and I get emails from private equity firms, and I get emails from those are two people I get emails from. Basically, people are saying, there's a market for what you're doing, there's capital to deploy. I get the sense that there's soft landing money. Oh, yeah. And what do I mean by soft landing money? I mean that lots and lots of PE firms are looking for the platform that they can anchor a bunch of rollups around and they're looking for the rollups themselves, the add -ons, as they would say. And I know, even when I'm texting a friend of mine that just started a private equity fund, and he's like, we're doing lots and lots of closings. And he's bought like three or four add -ons, which would be the equivalent of the soft landing concept. Now, they're not always, sometimes in lower middle market private equity, an add -on is I bought a big HVAC maintenance company. And I bought a smaller one in Omaha, because I bought the first one in Lincoln and whatever. So it's not necessarily B2B tech. But I tend to agree with AJ that I still think there's lots of capital out there. Now, in Carta's data, you know, what's included in that, maybe lots and lots of one and two person companies or five person companies, I don't know if Carta has a PLGg. motion but you know lots of people use car that are don't have any meaningful momentum at all. And they're included in that data when i see this the same way that we can say that you know three percent of people have the psyche where three percent of people are five percent or ten percent of people earn this much money and when the three us hear those statistics, we say, yeah, sure, but, you know, we are already at the exception to a lot of those ideas and we will continue to be. So I'm not what I see. Again, what I see is private equity, growth equity, investors that would want to invest in Pavilion or make Pavilion part of a broader roll -up strategy or investment bankers that are representing the buyer of the sell side in those transactions. I'm getting as many, if not more emails from those people as usual. And I'm getting emails specifically from private equity firms that had checked in with me six to nine to 12 months ago wanting to get a pulse check on the business because maybe there's an opportunity to do something. So I'm still bullish about, you know, M &A. Not evaluations or multiples that people are super excited about, but still an option soft landing, right? There's an option to find some home for the asset that isn't zero.
Speaker 2
really senior partner at a tier one VCE firm yesterday. And he basically said what you were saying right now, Sam, he's like, the most interesting thing they've noticed is founder expectations around multiples have right sized is that we have no complaints anymore, we are able to structure good deals with them is like to last year, there was a mismatch. still wanted multiples that we couldn't offer right now. Everybody is standing on the same page. They
Speaker 1
all say something to that. I said, it's just fascinating. I'd love both of your take on it because it's just really, you know, Kyle calls it a hedonic adaptation, you know, but there was times in 2021. When, you know, people that all of us know we were, me and AJ were in the Hamptons on that, on our CEO pavilion trip. And one of the CEOs that has since sold this company said, you know, I'm going to be the first billionaire of this, of this type. Yeah. And the implication, everybody was like, well, I can't, you know, I, I, how, how on earth could I live on less than a hundred million dollars? You know, am I a popper? And I you know if you're out there listening you might you know get nauseous if you hear that or think what a bunch of jerks But my point isn't that my point is that to the point of founder expectations resetting and then and then there's a moment when you just You change the inputs in your spreadsheet and the first time you do it You know because I don't know about you guys. I have a spreadsheet. I have a spreadsheet that calculates different outcomes for different private securities, of which of course, Pavilion is one and spreadsheet for if I sell my house for this versus that. And there's a moment, you know, you lock in on those numbers and then one day you change the numbers and they're much slower, much lower. And then there's a party that's like, I don't know, so what? So what? You know, what's the difference between having? There's a difference between, you know, as they said in succession, right? 5 million bucks, 3 million bucks. You know, you can be un poco loco, as they say, you know, but still, if you keep your desires and your appetites, uh, modest, that can be just enough. You know, yeah, there's a difference between 5 million and a hundred million, but there's not really a difference between 5 million and 7 million, 5 million, 3 million. Uh, and I'm not being insensitive. I hope I'm not talking about, I'm not immune to the plights of, you know, Pete, the working class. I'm just saying that there's a moment at which you realize like, yeah, changing the number in the spreadsheet unless I was planning on buying like a mansion, and I'm living in a studio apartment, yeah, and maybe like really impacts your quality of living. But if you're basically going to live whatever life you're living anyway, and it was just whatever number was going to inflate your ego the most, then there's it's not that hard to say, you know what, couple million bucks is still pretty good. Yeah, so Sam is cousin Greg what he just said right now.
Speaker 2
I'm succession. Yeah i. I hate you speak to this a little bit right cuz i had the time when you raised you must have been thinking billions as well. I don't have a spreadsheet.
Speaker 3
I actually don't. I don't I mean I have an advisor and I think I do agree with Sam you're gonna live your life, how you're gonna live it. I kind of tend to think that it's like I know what this could look like or I know what I could be doing if I wasn't doing Ecbodopath, but I just haven't had a spreadsheet for a few years. I had one at the at Trendkite and ultimately realized that like, then you get an outcome and you're like, I'm good now. Now I'm gonna photoshop. I think it was the opposite. I think I got jaded from it, Aasit a little bit. Yeah, like you, a lot of people think founders they just like you see a $225 million exit and everyone's like, oh, AJ, you have $225 million. Now, what are you going to do with all that money? But the reality of the situation when there's a lot of like when you've raised a series D, and you're a founder, you don't own 50% of the company, you don't own 25% of the company, you'll be lucky to own 10% of that company. That's the reality of the situation. And so that outcome, Sam's right, that billion dollar outcome is only going to be reserved for like a very, very small few. This is my second company, it won't be my last company because I am enjoying it. And that's, that's, that's a part of it but at the same time. Like right now if it's like if i have to walk away from it because something help happens my health or family god forbid it is what it is and i'll start over and do it all the spreadsheet acid. I have
Speaker 2
a spreadsheet that i made for the first time like a few months ago, but it's not an enterprise. It has nothing about enterprise value in it. Because I don't ever want to think about selling this thing. I think I'm quite, I, there's no one. I just need
Speaker 1
to delete my spreadsheet.
Speaker 2
I mean, you delete, you actually, let's
Speaker 3
say I'm let's talk about that for a second. At the beginning of the year, you were talking about the 500 KPI, the spreadsheet with the 500 KPIs or every morning. That's
Speaker 1
for the company. I meant that my personal spreadsheet. Right.
Speaker 3
But do you still have,
Speaker 1
I'm saying, do you still have that 500 KPIs that you look at? We've distilled it. I mean, that's a whole separate topic. That's a topic about inputs versus outputs, lagging indicators versus leading indicators. I've distilled what I care about. I care about NPS cancellation requests, basically, ARR. Those are like the three and it's probably...
Speaker 3
My point being is we've, I found if I get fixated on a number, it drives me like it's the only thing I can ever think about. I go to sleep, I get just crazy and I get stir crazy about it and ultimately leaves to like potentially a worse outcome. That's for me personally, I get obsessed. I'm an all or nothing person. I have a spectrum of like, if I'm going all in, then I'm going to lose 25 pounds in two months and like that's because I just made that up off the top of my head. Have you
Speaker 2
seen him today? How thin does he look? That's great. Actually, he's got some nice socks on.
Speaker 3
Oh, there you go. I like that. I am wearing these. They're one of my customer socks,
Speaker 2
by the way. It's Optibus.
Speaker 1
It's one of my customers. I love their work. They do the bus, but they also do the Optus. So then it's Optibus together. They must have raised
Speaker 2
money in Zoop as well if they're making socks
Speaker 3
for people. They're an inside back company. So I guess so. I
Speaker 2
think spreadsheets can be either really helpful or really hurtful. I think they rarely fall in the middle. I think for me, I've chosen not to put enterprise value in it because I'm not at all thinking or want to think about what happens if this sells. I just want to keep building. But it is very common for me to sometimes take a look at, okay, does this all make sense? Am I going to be appropriately comfortable? Can I take care of my family? My extended family, those things are calming to me. And so I looked, I made one, I was like, okay, this is fine. Like, let's focus on work out now. But I very thoughtfully didn't put enterprise value in it because I think if I was looking at enterprise value in that it will put me in a short term mind frame of like, what do I need to do to drive this up in the near term and hold me back from thinking about things from a much longer perspective, I think we need to build businesses thinking in decades, not in one, two, three years. Yeah.
Speaker 3
One last thought on the Carta point, by the way, is that you were talking about what data Carta has. Sam said that. I actually talked to Peter yesterday from Carta. What is it missing? It's missing valuations at these bigger companies. So they actually are, they don't, they can't actually see past that, that, that chart that you shared with us, Asad. They don't have the valuations of a plural site. They don't have the valuations of some of these private companies that are bigger, that are acquiring these smaller companies. So they don't actually see the endpoint for some of these outcomes overall. They should just get
Speaker 2
a pitch board license and we'll see it then. Sorry.
Speaker 1
I will just say, in closing this out, Asa, to your point, you know, as you both know, and I'm sure people can read between the lines that listen, I've been going through some personal stuff over the course of the last year. And in that world, the spreadsheet has, my spreadsheet has given me a lot of comfort. Yeah. And the reason it's given me comfort is because it's saying in the worst case situation, you're still perfectly fine. And that has helped me not have too much anxiety about like, what if this happens? What if that happens? I agree with you. So for me, I felt really calm, but the numbers on the spreadsheet are lower numbers than they were a couple of years ago. And, and that's my point. And I'm still like, yeah, it's fine. It's fine. You know, like it's fine. What's the difference? The difference is, you know, I'm here in Boston, I got to go to Santa Cruz, I got to go for a run and listen to the seals. And, you know, then I get to go to London and we're going to do an event on July 4 in Paris. You know, life's pretty good. So as long as I can keep building and fixing,
Speaker 2
you know, continuing to improve the building, I should be in okay shape. that's kind of what the PE person was telling me. He's like, people have just relaxed a bit. They understand what's reasonable. They understand what's rational. We're putting together some good deals. There are many founders who are coming to us and saying, let's do a roll up and here's my game plan. There are many founders and in roll ups, there are many situations where some founders get to leave and some get to stay in and help build it out. There's really exciting potentials over there. And so when I was discussing the plural site thing with him, he's like, it doesn't scare me. He's like, this thing is, it's unique to certain P's that did certain types of deals. He's like, we've never seen more deals. We never done more deals and we never more excited about the reasonable nature the deals that we're doing, and the potential for us to create real enterprise value through some really smart roll -ups in real America, like real businesses that are selling to real businesses, that type of a thing.
Speaker 3
How many founders came up to us during, when we started this last year during the SVP crisis, when so many things are unknown, and like said to us like, hey, top line was my solstice. That was my savior. We listening to you all of like trying to figure out, trying to understand what was going on at that time because of this unpredictability, how many founders came up to us a lot today. That's not, I don't think that that's the case. And that is great. Because we are giving this very clear broken record type messaging in terms of what this is going to look like. We actually have clarity. The Fed has told us we're going to have clarity. We know we have a presidential election that's going to throw some things into this, of course, the end of the year. But we know what this is going to look like. And just like your friend and he said, this doesn't scare me either, Austin. I
Speaker 1
think it'll be really interesting to track what happens with our respective businesses over the next five years. Oh yeah. Because part of my instinct, because there's like two ways to read our comments, right? One of the comments is like, listen to these guys. If I were putting my shoes in the shoes of Jason Steppings or Harry Lemkin or some cross, you know, some uber Silicon Valley type, right? Listen to these guys running their lifestyle businesses. They're not world changers. They're not Aaron Levy. They're not gonna change the world. But on the other hand, I'm losing it. I'm like, we all sound pretty healthy, actually. We all sound pretty reasonable. You know, pretty focused. The top two metrics I mentioned were not revenue based. The first first, you know, NPS is my North star and like delivering member value. I'm sure it's true for both of you. Yep. Payouts. Also just saying he wanted to run his business forever. AJ's like, I don't know. I'd start another one. I really liked this. I'm having fun. And so if I had to say for the three of us, I would guess that there are going to be outcomes should we wish to pursue them for the three of us precisely because we have the right mindset. And I think it's, on the one hand, you can say like, we sound like private equity owners, like we sound like private equity back CEOs in some way, I guess, maybe we're a little bit more empathetic, but we don't sound like we're trying to like if we don't build the next rocket ship to Jupiter, then we will consider ourselves a failure. And on the other hand, it feels like maybe that's the only way that you can succeed is if you just buckle up, you're like, I'm going to enjoy it. I'm going to try and live within my means and I'm going to build something that helps people. I think
Speaker 2
that's the interesting thing where like you listen to some podcasts and you think the only path to success is this binary outcome of you try to build something that becomes a billion dollar business and you become uber wealthy along the way. Sure. Like there's that, but there's, there are many other ways to live a really fulfilling life and make a lot of money. Like, listen, we make a lot of money. And we live very happy lives. We do things that we enjoy. And I think this is also a more common journey is to build businesses of this sort. And so I think it makes it a little bit approachable for people. And it's interesting for people that are running businesses of that sort. Question, though, go ahead, AJ been trying to say this. No,
Speaker 3
I was gonna make my joke about top line outliving all of our companies. That's actually funny.
Speaker 1
I was like, he's been trying to say this for like three minutes. But actually, that's pretty funny. But I said, and now this is a joke I was gonna make before where the timing would have been perfect but now it's not Perfect. I still love but what percent of your flights are scheduled flights Yeah, when you fly what percent are scheduled? Meaning like and you look at
Speaker 2
and see it's not that funny Like how much is private versus not basically the
Speaker 1
joke would be that like if you're not flying private mostly how can you be happy that would be the joke but I just.
Speaker 3
Sam what if you'll see what if you own your own airplane what about. None
Speaker 1
of my flights are scheduled. But yeah but they're fine in a beachcraft, not enough. A weird golf
Speaker 3
stream. Oh
Speaker 1
yeah. All right.
Speaker 3
Is that it? Are we done? Shout out to the hours. Shout outs. We didn't get to meetings. I did a whole preview on LinkedIn. I'm talking about the last week.
Speaker 1
Isn't that what we talked about? Oh,
Speaker 2
that was a long time ago. So it's good. This way we always have things to talk about. That's how we'll get there. This was an important discussion though. I think like it was so meaningful. What happened? It's crazy not to have broken it down. Um, but shout out who's going first. Yeah, I'll
Speaker 1
go first. I never go first. So I'll go first. I want to shout out the team from winning by design and I want to shout out shout out yako vander koi. Uh, yako welcomed me into his home on Sunday. I flew to San Fran, took a Uber to his house, and then we drove to Santa Cruz together and then we went on a run into, uh, the enchanted forest. He called it, which I think is wilder state park. And it was one mile straight up at the beginning and then all through these trails and down into this old forest back. It's truly beautiful. But really the cool thing was the first two days of the summit when we went through revenue architecture and really understanding the mechanics of a SaaS business and of a go -to -market engine. And I learned a lot. I learned a lot. And one of the best pieces of learning was about, you know, the difference between open loop and closed loop systems and how we small changes once you're past 10 million small changes that you can say your win rate is 30% your win rates 25% but your win rate is comprised of four or five different actions that each have their own independent conversion rate. And so the idea is, can you change small conversion rates throughout the system that can create massive improvement? And I love the example that he gave, which was the first five minutes, not five minutes even, the first 120 seconds of a discovery call. And whether there's a professional that joins the call, meaning somebody that says, Hey, I said, how are you today? It's great to see you. Or somebody that has, you know, a laundry hamper. This is not classist. I'm just saying somebody that's disorganized, that doesn't have a good zoom background, and that comes in with less training, less poise, less presence. And what, do we agree that those two people have different win rates? And if so, and is the win rate possibly influenced by that first three minutes of the call? And if so, can you make a massive change in your go to market machine simply by focusing on how people show up for the first three minutes of the call? And that can flow through your entire go to market machine flow through your win rate, not just like train better, but focusing on small incremental improvements throughout the entire life cycle that can actually dramatically transform the performance of the engine. I thought that was a really cool idea. So shout out to Yaco and the team at Winning by Design. That was great.

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