A Decade in One CRO Seat: Make More Money Than You Spend

0:00 A brand, we could probably argue for an hour, like, what does brand even mean, and how do we

0:05 conceptualize that? Like, brand for me is always like, what do people say about your company when

0:10 you're not in the room? My guest today is David Cady, Chief Revenue Officer at Virtuous, the

0:16 fundraising CRM that more than 10,000 nonprofits run on, from Habitat for Humanity to Ronald

0:23 McDonald House. Before software, he taught high school English and he left the classroom for a

0:28 sales job that paid $8,000 less than the teaching day did, spending his first year in the industry

0:35 on food stamps while the housing market collapsed around him. It was a burn the ships, like, I had

0:40 no other option than having to go home and not make the mortgage, right? The average tenure of a CRO,

0:45 you're pretty lucky if you make it 18 months, but you've been here over a decade. There is and has

0:51 been a lot of noise generated over the last 10 years. You were able to do crappy email outbounds

0:59 and get replies. I've always said the best decision I ever made with LeanScale is not raising

1:06 any outside capital because I know exactly what I wanted to do if I had capital and it would have

1:14 driven the business right into a brick wall. My CEO was great because he just says, we want to make

1:19 more money than we spent. We want to treat this like a business. That's a real business. I've

1:24 always thought change is inevitable. Bring it on. David, we spent the first 10 minutes of our call

1:39 realizing we grew up in the same neighborhood, went to the same high school. And then you said

1:43 something that really raised check out to me that Phoenix is a very weird place to be an operator,

1:48 especially in tech, but you built a 200 person company here anyway without leaving. What has

1:54 staying in the desert actually cost you and what has it been worth? It's great to be here, Anthony,

2:02 excited to spend some time and dig through these things. Phoenix is a fun place to grow a company.

2:09 The one thing I think that's special about here is everyone is actually here fairly intentionally.

2:17 I do think that a lot of this community decides to put roots down here, whether it's for family,

2:23 location, weather, opportunity. The hard part about a lot of this is just the fact that

2:29 the community itself is really dispersed. And so you have a ton of people who are really

2:35 intentional about what they want to do with their lives and their jobs. But there's not a lot of

2:41 central education, tech environment, and investment that sort of brings everyone

2:48 together. So you kind of have to find everyone. And honestly, like you and I, we stumbled across

2:55 each other doing a lot of the same work for a long time together, growing up, going to the same

3:01 neighborhood, same high school, and just hadn't crossed paths before. And so I think that's

3:07 something that just requires a ton of intentionality. So from a hiring standpoint, it's not like I can

3:13 go to this one career fair, go to this one website, or just we have a line of people out the door. You

3:19 have to be intentional. The thing, though, like I said, that has been super impactful is everyone

3:26 is pretty focused on what they want to do, why they want to be here, and does have this sort of

3:32 passion to build something that's long lasting. There's a lot of Phoenix is a community where a

3:37 lot of people have moved here over time, and are looking to plant roots and do come here with the

3:42 specific reason. So that's been a cool part about building here. The other thing is just the nature

3:48 of being a flyover state. There's a ton of pressure on the coasts when you build to sort of do it

3:57 unnaturally. And you have a lot of pressure to do it really, really quickly. So sometimes you make

4:03 bad decisions, quick decisions that you could regret. And he's sort of like the urgency,

4:09 the tyranny of now takes over where for us, it was always about like, how do we build a durable

4:15 business that's here for the long run, which I think is something that Phoenix is priding itself

4:22 in. And again, just being a flyover state, like we wanted to build something that was here for

4:27 the long run. Yeah, I've noticed two of those things too. I've always said the best decision

4:34 I ever made with LeanScale is not raising any outside capital because I know exactly what I

4:42 wanted to do if I had capital and it would have driven the business right into a brick wall.

4:47 So the best thing for me would have been to have to build things the hard way,

4:52 slow things down and then find out what works before trying to grow a little bit quicker. And

4:57 also on the talent front, there's not a lot of competition if you're the business for some of

5:03 the best talent and so much incredible talent comes from California comes from New York comes

5:10 from Chicago to plant roots here because they're saying, Hey, it's more important maybe for me to

5:16 have a good place for my family. But you still have exceptional talent. You just have to go find them.

5:22 Yeah, you got to find them. And I think that's why creating a good brand and creating a company

5:26 that is attractive to people is so important. I mean, you mentioned raising money definitely

5:32 comes with its own set of strings that you have to work across. And, you know, we've been really

5:38 fortunate to have a set of investors who have a long term mentality. And every time I talk to my

5:43 CEO, you know, there's every 18 months, generally in the venture world, what's valuable or what's

5:52 meaningful and important and business valuation tends to change. And so I'm always every 18 months,

5:57 okay, okay, is it rule of 40 this time? Is it magic number this time? Like, what do what are

6:00 we trying to hit to make sure that we're on the right track? And my CEO was great because he just

6:07 says we want to make more money than we spend. We want to treat this like a business that's a real

6:12 business. And in reality, if we do those basic principles, right, whatever the tide is at this

6:19 time, whatever the market is saying, like, it will always come back around to those things. And so

6:25 in some ways, it freed us up to just say, let's try to imagine that the money is not there. And

6:30 always creates a lot of unnatural pressure. When you have that extra money, and it's just let's

6:34 just make more money than we spend, let's treat this like a regular business. Is it really that

6:38 easy? Because I feel like I feel like you have to go back and dust off the calculus books sometimes

6:44 to understand how investors are valuing companies. But I think you're right, the companies that,

6:50 hey, if you're growing, and you're profitable, you own your own destiny.

6:55 Yeah, it's it's tough. Like, I know, I equate it to, you know, you've got to be a surgeon and have

7:02 a scalpel every time you make a decision. At the same time, like you don't have that much time to

7:08 measure twice, you get to maybe measure once. And then you can cut once, but you do have to

7:13 have a bias for action. I think, you know, it does create just boundaries that you have to

7:19 live within and be okay with. But yeah, it's it's the pressure is important to keep you moving.

7:28 And sort of like removing that, that safety net is important to continually take enough

7:35 calculated risk to get past the inertia that obviously happens. I mean, it's so tough to build

7:41 a company anyway, when you've got black swan events that seem to happen every year. At this point,

7:47 like you have to keep moving enough. So calculated risk is still important. But it does keep you

7:53 smart. You can't do dumb things. No, you definitely have to make the bets that have the best outcomes

8:01 in the long run. And I am very curious to go a little bit deeper on one of the biggest bets

8:09 that you made on yourself on your career. I would love if you could take us back to that moment

8:15 when you were teaching, and then decided to make a monumental change. During one of those black swan

8:24 events where the entire economy felt like it was just collapsing around everybody.

8:29 Yeah, a lot of my early journey was kind of born out of necessity and had to learn a lot along the

8:37 way. You know, when I graduated college, I thought I was going to change the world by teaching was

8:43 going to work with students. A lot of what I love to do was more around the humanities and philosophy,

8:50 like, although I taught English, I was always fascinated with like the why did we make the

8:54 decisions that we do? You know, how do people think? So I love that part of my job. But life

9:00 always has a way of sort of throwing a wrench in things. It's been a while since I was teaching,

9:05 I always know how long it's been because it's the same age as my oldest son, who's going to be 19

9:10 soon. And so my wife and I got pregnant and we both looked at each other. This was after I walked

9:15 into the HR office at the high school I worked at, told them we were having a kid and they let me

9:22 know that it was going to be $1,200 to add him on to our insurance. And I looked at my paycheck and

9:27 I went, that's half of what I make. Like, there was just an impossibility that I could keep doing

9:33 this. And so yeah, I had to go home and have the conversation like, I don't think I can do this

9:38 anymore. And at that point, kind of just took stock of like, well, what am I good at? What do I like?

9:44 I've always been kind of a nerd and a geek. I grew up around my dad's computer and 85 IBM and,

9:49 you know, tinkering and MS-DOS grew up changing graphics cards and CPUs and memory in the computer

9:54 to keep up with the latest, you know, PC game. So I love that. And, you know, took that and sort

10:00 of blended it with, well, I like people, like understanding what makes them tick. And just pure

10:05 happenstance that like a company was coming into town at the time that was hiring like 30 account

10:10 managers company with CDW. And it's very much a cold calling, 100 dials a day kind of company.

10:16 I started then right at the end of 2007, six months in, right, housing market collapsed,

10:28 all of that craziness started to happen. And then IT budgets froze across the board. No one was

10:33 spending a dime on anything. So we've got a new baby in the world, new job. And I actually ended

10:40 up making less that first year of sales than I did teaching. And, you know, you mentioned the

10:46 story, like our family was living on food stamps for a couple of years, just trying to make do.

10:51 The thing that honestly was a big part of that journey, like there, I, it was a burn the ships.

10:57 Like I had no other option. There was nothing I could do besides just keep moving forward.

11:04 And so 100 cold calls a day seemed a whole lot better than having to go home and not make the

11:10 mortgage. Right. And I looked at like my peers and what people were doing. And especially in sales,

11:15 there was so much like 90% of this is controllable. It's my activity. It's my attitudes, my output.

11:22 And I liked that sense of control, especially during a time when everything just felt

11:27 so wildly out of control. And so kept my head down for two, three years. And eventually, right,

11:34 the economy starts to correct, start to make more money, start to come out the other side.

11:41 And then from there, like my career shifted more into software and spent the better part of a

11:48 decade after that. And software and enterprise software and larger companies doing sort of

11:53 enterprise transformational software. And that, that's sort of where my love of like,

11:58 like selling change, working with software, because it was so transformational to businesses,

12:04 like understanding what made people tick and like why they would do things. I loved that part.

12:10 And then yeah, a lot of that time was sort of the heyday of Silicon Valley and SAS software and

12:15 vertical SAS was coming about. And so I worked for a few companies where I had a chance to

12:20 just do a lot of different things with cool startups. And I started to get the startup bug

12:24 from there. That was sort of pre virtuous. But yeah, sales was a, it was a forcing function,

12:30 like I had no other choice. And you do a lot when you have nowhere else to go.

12:35 I think some of the times those are the biggest motivators and probably the only environment

12:40 where you may even find success because when you don't have any other option, you get full focus,

12:46 completely narrow the aperture. It's really the only time you can, you can make certain things

12:51 like that happen. And I, I've always loved sales because, Hey, it doesn't necessarily matter who

12:58 you know, who you are. There's a number on a scoreboard. And if you're at the top, then you're

13:03 always going to be doing well. Yeah. A hundred percent. It definitely beat, uh, being homeless

13:10 and not being able to buy groceries. Like it just the perspective shift that you, that I had, I mean,

13:17 it wasn't easy. I always say, you know, sales and just this world, like it's simple,

13:22 but it's not easy. And I think that is why this profession is often a hard thing for most

13:29 people. There's a lot of things you have to like give up, overcome, be okay. That you're challenged

13:34 with to be successful long-term. Yeah. If anybody's ever asked, I've compared it to diet and exercise,

13:39 like everybody knows what to do, eat less, more fruit, vegetables, and go to the gym. But it's

13:46 very, very hard to consistently do it every single day for years and years and years and be a

13:52 professional at it. Yep. So going through that career, you start to gain lots of experience

13:59 in the sales industry, in the role. How did you find the virtuous team and what made you

14:10 make that next leap? So I have always just loved entrepreneurship. I think just even that early

14:18 sales bug was like, I love the fact that I could, whatever I put in, which is what I got out. And

14:24 then really got enamored with the startup world. Again, in the Bay Area, I worked for a lot of Bay

14:29 Area companies, pre-virtuous. So I had actually wanted to start something of my own. And I knew

14:36 our founder, been a longtime friend of mine, our founder, Gabe Cooper. And so I took him out to

14:41 lunch really with this idea of, hey, I'm thinking of doing something myself. Am I crazy? Should I

14:49 be doing this? What should I be thinking about? And that lunch really turned into, well, I'm

14:55 doing this thing called virtuous. Gabe is an engineer product guy by trade. So he's sort of

14:59 like the opposite of what I am in many respects. And that really turned into this idea of like,

15:05 hey, virtuous is an idea. It's really getting off the ground coming out of beta. And he need to go

15:13 to market help. And for me, I'm like, well, my wife will be happy because I don't have to mortgage

15:18 our house and take this massive risk. And then I get to come into a company that has a lot of the

15:24 things where, you know, are the things that I'm not necessarily gifted or good at, which at that

15:29 point, like hadn't written a line of code in my life, but loved product, loved tech. And so it was

15:34 able to step in early days of virtuous really with just the only idea of like, I got to sell this

15:41 thing. Like, that's it. Like, there was no real title or job description that was like, keep the

15:48 lights on, sell the thing, and let's make payroll. Early on, we had angel investing in friends and

15:55 family. And so we had enough runway to keep going. But really, we were always very lean in terms of

16:00 how we thought how much we raised. And again, back to the make more money than you spend. The whole

16:05 thing was like, hey, let's make sure we can hit payroll with what we sell. Had a couple fun stories

16:11 with that and Christmas time and making payroll and all that. But yeah, it was it was a lot more

16:16 of an entrepreneurial journey to jump in and just say, hey, I want to grow something. I want to build

16:20 something. I really just care about solving interesting problems with people I like. And

16:27 that was the early days of virtuous, about six or seven of us at the time when I started.

16:33 I have to ask, what was the idea that you were bringing to that lunch? And what were you thinking

16:38 at the time? Yeah, I mean, I'll be honest, like, I kind of went into that lunch, potentially hoping

16:43 I could like inception gave enough and plant this idea enough, like maybe there was something there.

16:50 Right. Like, I respect the guy a ton. He's done well. This is not his first company. And so

16:55 in many ways, you know, working with him was something that that was ultimately a goal of

17:01 mine. I think I had zero clue, though, like my experience had been like large scale sales

17:07 organizations, big tech companies, even right, the Silicon Valley startups that I had worked for,

17:13 you know, startups in like the, you know, I joined with a couple hundred people. And at that point,

17:20 like they were burning money, like there was no tomorrow. So I don't think I had the even the

17:23 frame of mind for like what this would actually mean to build something durable and with limited,

17:30 like with a limited resource pool. You know, I'm just like, I'm just gonna start cold calling,

17:35 I bet this will work. So I had zero clue. Honestly, going in, I think the thing that

17:43 has saved me and sort of given me the longevity is just adaptability. Like I had no preconceived

17:50 notions, no, no desire to like be a specific title role. I'm like, I just want to see if we

17:58 can build something. And whatever was on the table, like however that looked like I was,

18:04 we're open to do whatever it took. One of the things that I love about your story is

18:13 the dedication to this mission that you've had and the tenure that you've had along it.

18:18 I mean, the average tenure of a CRO, you're pretty lucky if you make it 18 months.

18:22 That's a pretty good run as a CRO and most Silicon Valley, BC back SaaS companies,

18:29 but you've been here over a decade. And one of the things I'd love to know,

18:35 because I think it's, I think it's hard to tell when someone's only done a few stints,

18:41 but they haven't really like dug their heels in. How has go to market changed over this decade?

18:48 Because your same product, same solution, same market. There are so many constants in your story,

18:56 but I know there must have been so many times where you had to adapt and iterate.

19:00 How has go to market changed over the last 10 years?

19:04 Yeah, it's a, it's a great question. There's a few things I think are probably not going to say

19:09 anything that everyone doesn't already know. One, there, there is and has been a lot of noise

19:15 generated over the last 10 years. Early days of virtuous, like you were able to do crappy

19:22 email outbounds and get replies, right? You could do crappy outbound and you could get replies and

19:30 love Mark Roberge, love the sales acceleration formula, but a lot of the whole kind of early

19:35 Salesforce HubSpot days where you just like pick an ICP, write a script, do an outbound sequence

19:40 and go very cost ineffective today. And so many people, especially in the world that I sell into

19:47 are like highly, highly trust driven. They want to know that they can believe you. They have to

19:54 believe it from like your brand, which takes a whole long time to build. Like that's not an

20:00 overnight thing. It's a multi-year progress process. They can, they want to hear from their peers.

20:06 They want to know other people who look like them in their world, like that they are doing,

20:13 you know, the thing you're asking. And then partnerships is another big thing to create

20:17 trust. So for us, I think we sort of tried a lot of different things, casted a really wide net early

20:25 on. And part of that was out of necessity. Cause it's like, we just got to keep the lights on.

20:28 If someone will write us a check, that's great. And so, you know, we were getting customers big

20:34 and small all over the place. And that was just sort of a ad hoc spray and pray approach just to

20:39 get like names in the door. What we learned over time, especially in, and this is true when we're

20:45 trying to be really cost-effective, right? That was a thing for us is like, if I have a dollar to

20:51 spend, I kind of need to know that I can earn it back at least within 12 months. Like our CAC ratio,

20:58 like we were maybe spending a dollar 50 to a dollar 80 per dollar of ARR CAC payback periods,

21:05 usually 15 to 18 months. Like, but we tried to drive that down more and more. So knowing that

21:10 those are the limitations, we really had to make sure like every shot counted. So partnerships

21:16 community, uh, was a huge part of our success in the first, um, several years, honestly, still till

21:25 today. I still think that's actually a really underlooked portion of go to market. Um, just

21:32 in general is partnerships and networking and community. I think there's a lot of talk today

21:37 about, yes, we have to do that because there's so much noise with AI. There's so much going out.

21:40 There's so much stuff online, but doing that just takes time and it takes being in market with

21:47 customers. And I just don't know if there's still quite an appetite to do that really well. I am

21:53 very fortunate to have an amazing product. Uh, there's a lot of great, great go to market ideas.

22:02 Like I'm, I'm a firm believer in two things. Like you have to be fundamentally about the numbers,

22:08 right? Sales go to market funnel math, whatever you call it. Like it's fundamentally just a math

22:13 equation you have to solve. Know your inputs and outputs. It's like physics. Like you can't break

22:19 the law of physics as hard as you try. Just do that first. So you have to know like, Hey,

22:25 have all these strategies, what are our conversions? What do we expect to find? Did we do it? Yes or

22:30 no. At the end of the day, if you get on a phone with someone and you get those meetings and your

22:34 product sucks and your messaging sucks and you're like value prop sucks. Like nobody will care. And

22:41 I think that is something I actually am a firm believer in. Like sales marketing needs to know

22:48 the product and the product has to be really good. Um, I can't out go to market. There's no

22:55 trick I can do to win a bunch of customers if the product is bad. And even if you do,

23:02 ultimately they'll churn. And as a CRO, my job is not just new revenue. It's

23:07 retained revenue and long-term revenue. And so you have to hold those intention.

23:13 I think a lot of people overlooked that and overlooked the magnitude of it. And one example

23:18 I give, sometimes I use this if somebody's considering going into sales, but they're not

23:23 really sure about the profession. And I think sometimes for people early in their career,

23:28 it might get a bad rap. And I say, you know, what I think would be probably the coolest job in the

23:33 entire world is if there was a sure, like full proof cure to cancer and you were the sales rep,

23:44 repping that product, how incredible would it be to go find all the people that need help and get

23:50 them connected with a product that can save their lives? Now, I know we're not usually saving lives

23:54 with software, um, but we are, we are solving problems and we're, we're helping people's

23:59 careers. We're helping people provide for their families, all kinds of things that actually

24:04 unlock when you do this well. And I think it's a very, very cool thing when you have an excellent

24:10 product. If you're selling a product that isn't competitive, doesn't work, doesn't do a lot of

24:14 things, isn't solving a real pain, that can be one of the worst jobs in the world. Yeah.

24:20 Yeah. It's actually like part of our, my recruiting strategy. And when I think about

24:24 good salespeople, if you can sell a product at a second or third tier product company,

24:30 you're probably exceptional at sales. Um, you know what, it's really easy to sell sales force.

24:36 It's really easy to sell these products that have like all the market share in the world

24:41 and basically just have enough demand that you're getting pulled into market. Anyway,

24:45 you know, go to market at open AP open AI and, and, and anthropic right now, like you're kind

24:50 of just drafting off of the existing pipeline and signing orders. Now I'm not taking away from

24:56 those teams, but it's hard when you don't have a class leading product. So, you know, if I'm

25:02 thinking about companies, I want to be at like, that is the number one thing that I need to

25:07 understand before I go somewhere. And then, then you, then you have great go to market plans that

25:12 you can work with. I'd like to go back to one of the things that you mentioned, another area,

25:18 I think that's overlooked as well. And I think your, your tenure gives a really unique insight

25:24 into how to do this building a brand. You mentioned it's not something you can do overnight. It's

25:30 often not something you can force. What are the major components in your mind of brand building

25:36 and operationally tactically? I know it might look a little different depending on the company,

25:40 but what are some principles that you can follow to help build an incredible brand?

25:45 Yeah, you know, brand is, you could, we could probably argue for an hour, like what does brand

25:49 even mean? And how do we conceptualize that? Like brand for me is always like, what do people say

25:55 about your company when you're not in the room? I like to think about brands that I personally

26:01 love myself. Like I'm a, I'm a big car guy. I've recently over the last few years got into Rivian's

26:07 and a big part of that was like, I believed that when I bought that car, I would be in the places

26:15 that the ads showed me. Like I would be in the mountains camping. I would be with my kids. I

26:18 would sort of like live this amazing adventure. And I'm like, I have to have this thing because

26:24 I believe that's what I will be. So I do think that there's something about brand that is

26:30 very like much less about the product. And it's what you believe you will be where your company

26:36 will be, or you'll sort of like the tribe or community you'll be a part of once you're,

26:41 once you've bought that. In tech, I think there's several ways to do that. Like one,

26:46 it does take time. Like you have to show up consistently and do what you say over time.

26:51 Like it's not a slogan or a gimmick or a tagline. It really does have to be something your team

26:56 shows up and sort of like delivers time and time again. The thing for us, like we actually spent

27:01 some time doing category creation. I know category creation, especially today, there's sort of pros

27:08 and cons. Can you do it? Is it a real thing? But I still think it sort of dovetails into this idea

27:14 of brand. So with virtuous, we kind of coined this term responsive fundraising, very similar

27:19 to what HubSpot did with sort of inbound marketing in the early days. And the whole idea here is we

27:23 were talking to nonprofits all about like marketing automation and reporting and big data and analytics

27:29 and all of these technical terms. Describing like this world or like, Hey, if you use these things,

27:35 this will happen. They got so caught up in like the what the tools we were talking about that we

27:41 sort of like an obfuscated this like end reality. And so for us, this was a CEO thing. He wrote the

27:48 book, responsive fundraising hero to follow up book called the responsive nonprofit. And just

27:53 in a week we'll release end of one fundraising, which is basically the AI version of those things.

28:00 But the whole idea of that is we're creating a world that has nothing to do with virtuous.

28:07 And we're talking about how the best of the best nonprofits create a world where every single donor

28:13 is treated like an individual major donor, a one of one, which ultimately so many nonprofits say,

28:20 Hey, this is the world we want to create in our fundraising practice. So we wrote this book,

28:26 we've sort of all of our wording, all of our product marketing, all of our pitch decks,

28:34 we're oriented around, we will help you become a responsive nonprofit. Here's what that world looks

28:40 like. Here's why you should care about it. And here's this urgency of why the world is changing

28:45 so fast. You need to do it now. So it sort of creates this existential crisis moment backed up

28:51 by like real data, real customers, real problems, like world changing events. And then from a

28:56 sales rep perspective, you go last, I was like, Oh, by the way, virtuous is the only tool on the

29:02 market that can help you do that. And now it's not about a do I believe you? Is this a problem?

29:10 Like they're latched onto the, I need to become this thing. Virtuous is just a conduit then to

29:15 get there. Just to CRM is just your tool to get there. But it's less about what is the product

29:22 going to do? And it's more, Hey, I'm bought into this end reality. There's all the technical stuff,

29:27 like you have to be really good at community, you have to get your team bought in, you have to get

29:30 partnerships bought in, you actually have to like commit to this thing. It's kind of like building a

29:36 weird, separate little company like lifestyle brand, to some extent, because you need people to like

29:42 believe there's enough energy there that it's a real thing and not a slogan. For us, it worked

29:48 only because so highly trust driven in our buying, like the buyer's world, that this was a way for

29:55 us to create that trust when like there's a, there was a ton of distrust for software providers in

30:02 our space. So I think it works. I am not that guy. I'm lucky to have a CEO and visionary CMOs in past

30:12 who have really known how to do that well. But man, I can take that excitement and turn it into

30:17 demand and turn it into closed revenue, like so much easier than without it.

30:23 I'm already feeling the emotional pull into everything you're talking about. And I think

30:27 it's fantastic. Something that I think is missing from quite a few, quite a few brands.

30:33 Yeah, you have to generally care about your customer. Like we have a lot of our teams comes

30:40 from nonprofit and our CEO gave it, he has sold out to this idea. This is the last company he wants

30:45 to ever create. This is the swan song for him. There is selling out to this idea that it's,

30:51 it's meaningful. And I think there has to be a genuineness to that for it to be real. Like, yes,

30:57 at the end of the day, we're software experts. My job is to sell the thing. That is the KPI.

31:03 But you don't have to like not be human at the same time. And you can't have mission and purpose

31:10 that is greater than those things. I don't think they have to be mutually exclusive.

31:15 I would argue, I think it's very difficult to accomplish the mission. If you don't have that,

31:20 so hitting, hitting extraordinary KPIs, hitting incredible numbers, very,

31:25 very difficult to do if you don't have that mission behind you.

31:27 Yes, it is a hard trade off, right? You sort of have the short term and long term thinking

31:31 and brand building and category building and sort of that trust building exercise is a long term

31:36 build. And there's always that push and pull of short term, long term. And I think it's why it's

31:40 important to have different people within the organization who sort of hold those things in

31:44 tension, but appreciate and value why both matter. Another thing you mentioned or a couple of other

31:52 things were networking, community building partnerships. What are some things that you

31:58 have done that have worked really well? Are you doing things in person? Are you dialing in your

32:03 partner program? Or do you have certain incentives? I know some of these might sound tactical and

32:10 maybe a little detailed in the weeds, but I think a lot of people need just a picture of what good

32:16 looks like in those areas. Yeah, that's a great question. So partnerships is near and dear to my

32:22 heart. It's been something I've had either run personally or had oversight over the last 10 years.

32:28 It's kind of similar to brand building in some sense. And I'll be honest, there have been years

32:35 where I don't think we have always gotten this right. And the pendulum has sort of swung both

32:41 ways. So initially, right, partnerships has always been like, let's just find people who are like

32:47 minded in our space. And let's be friends with them. And that worked like in a lot of our early

32:53 strategy at Virtuos was like, let's find the micro verticals within our larger nonprofit vertical,

32:59 where you have a lot of the same people, they all go to the same events, they all work with the same

33:04 like consultants, they all work with the same tech companies. And let's really surround say 200 logos.

33:11 So for us, like rescue missions is a great example, there's about three, 400 rescue missions in the

33:14 United States, they all go to the same conference, they all have a presence in their in each city,

33:20 they all work with a lot of the same partners. And so for us, partnerships was finding all of

33:26 those people, supporting all the events that they were throwing, showing up in the community that

33:31 they were at, and honestly, just doing what we said we were going to do, building the product,

33:37 almost specifically for some of these use cases, and then just fulfilling that over and over.

33:42 I think what happened is we got bigger, the pendulum swung to like traditional SaaS partnerships,

33:47 which was let's create a program, let's do you know, your gold, silver, bronze level partnerships,

33:53 let's create registration and lead incentives, and let's try to drive predictability by building

33:58 this sort of like rigid system. Because that was what she did, right? Like in so many times,

34:04 when we're building this business, you just kind of look at the SaaS playbook, and you go, all

34:08 right, let's try that this year and see how that works. That was a swing and a miss for us. One,

34:13 what happened was our community is not coin operated, and especially people who are tech

34:23 companies. So there's a lot of tech companies and nonprofit, they look and function a lot like us,

34:28 like all the salespeople want leads, the marketers want audience building, like everyone sort of has

34:33 similar motivations, but consultants and agencies that were supported the nonprofit, like oftentimes,

34:40 they're like, I just don't want to let our customer down. I'm really bought into this mission. Right,

34:46 I just want to make sure I can get home by five o'clock at night. There's not this sort of like

34:50 endless growth mindset. And so when we tried to like square peg round hole, it's like, no, no,

34:56 but we'll give you like 5% extra rev share. If you guys send us 10 or more leads, they're like,

35:02 I only have 15 customers and like, I have zero growth goals this year. So we brought in operators

35:09 and teams that just it was a hard that was a hard thing for them to get any sort of brought the SaaS

35:13 playbook to a vertical market that wasn't living that. So we've really swung back, I think the

35:20 thing that is true for me is every partner has a motivation, it just might not fit your programmatic

35:28 approach. And so for us, it's always been the 80/20 rule of life, how do we find the 20% of partners

35:34 who will give us 80% of the output. And we should do things like map their motivations, understand

35:41 what makes them tick, what is a win for each of our organizations, and then actually deliver those

35:46 things. But it was hard to build something that was called it like infinite scale. Now, I think

35:53 that's true for partners that have businesses they want around. And that's been true for us.

35:59 On the community side, I treat that a little bit differently. Most people just want a brand and a

36:05 platform that makes them look great. So how can we get their voice into the market, their book

36:13 release into the market and then platform them in a way that helps with career growth, visibility

36:18 growth. But again, not everyone has that. So I think it's just it's really important to understand

36:24 motivations. That's been tough. As we've hired as we've had folks in the in the partner space is

36:30 like knowing what is most important to partners and not just building it because the rest of the

36:36 market does it a certain way. I think that's that's really, really good advice. And I can share two

36:44 stories, just as anecdotes to support it too. So one, lean scale being a rev ops, as a service

36:51 company, we have lots of go to market tools that want to partner with us. They promise us I've

36:57 been offered up to 80% of the revenue that is sold. And I think every single time we're like,

37:05 that's nice. I just want the best solution for my customers. So if your tool is an incredible fit,

37:11 I might pay you to come implement it and like get involved. So that's always been a big part of our

37:17 motivation. And I think that resonates well, but I see the same playbook kind of being applied to

37:21 us. I was like, guys, I don't think you I don't think you get it. And the other thing, I'm curious

37:28 your opinion on this, too. I haven't personally been in a company where there's been hundreds and

37:35 hundreds of partners, and there's a super scaled out approach. But I have been in plenty, where

37:41 there's four or five, maybe max 10 partners. Each one of them basically has their own partner

37:48 program partner plan. And it's driven 50% of the revenue in the business. Yes. That's 100%. And I

37:57 think we underestimate the time and energy it takes to build something great. And I also think

38:02 the other thing that we we did wrong is be more new and we're growing the partnership community

38:08 often is looked at as hey, this is a way for new leads, new revenue growth acquisition. But at some

38:14 point, your partners have referred enough business over that it actually switches to retention and

38:20 expansion. And we have partners that we've saturated their customer base for the most part,

38:26 our team should be providing an amazing support experience product enablement experience. So those

38:32 customers retain with virtuous and that that is something I think that sometimes gets lost as we

38:39 worry so much about acquisition, but like the retention and expansion growth that comes through

38:44 partner managed customers is so huge. And I just don't think we often think about it that way.

38:51 We break up the customer journey functionally often where you've got right acquisition and

38:57 demand creation and like closing that and servicing that and partners, it's like you get

39:01 this one person and they just mostly 90% care about leads. And so we'll just you know, and then

39:08 everyone's like, we'll do another webinar, we'll do another field event. And you just get this

39:13 lackluster results. So I'm I agree, like going deep is important and then also understanding like

39:19 the value that they provide to existing customers is sometimes overlooked.

39:25 100%. Hi, I have a big question for you across your tenure at virtuous. And I also I might

39:35 compare this to parenting, I think. So I have young kids at six, four, one and a half of another one

39:41 on the way in about a month here. And I think there's always this when you're early, it feels

39:47 like, oh, this has to be the hardest part. And then they turn into toddlers and you're like,

39:52 oh, no, no, no, this has to be the hardest part. And then they start getting bigger kid problems.

39:56 And then I know parents that have teenagers or adult children and they're like, no, no, no,

40:01 it's hard here, here and here. I'm curious your perspective from from a business.

40:06 What has been the most challenging season at virtuous?

40:12 Yeah, it's funny that you relate it to raising children. Most of my time at virtuous I when I

40:20 started my kids were like eight, six and four. And now they're 1916 and 14. And so I've actually at

40:29 the same time as we grew a business raised a family. And there's so many things that I

40:33 like overlap to those processes. One thing I actually think is really important for everyone

40:39 to know is sometimes we treat business in the decisions we make, as if every business is the

40:45 same, same age, same problems. I'm like, the tactics I had when I raised my kids when they were

40:51 eight, six and four, versus when they're 18, 16 and 14 are very, very different.

40:58 And you're not still putting them in timeout, you mean? Is that still part of the.

41:02 And so I think like, that's when I say that it feels very much like common sense. And I was like,

41:07 yeah, duh. But then I feel like when we look at businesses, we don't think about like the

41:11 maturity of the company and the maturity of the team, the maturity of where they're at, where it's

41:15 at and its size. And honestly asking ourselves, like, am I changing? Because my parents had the

41:22 same way as I did 10 years ago versus today. Like that would be idiotic. And I wouldn't be a good dad.

41:27 And so I think that like, one, you have to be willing to shift your approach and be adaptable

41:32 yourself. Like growth mindset is so, so important. Like, because the leader of the business needs is

41:39 very different every couple of years. So to your question, honestly, I feel like we had every black

41:46 swan event in the books, you know, when virtuous through the years. I mean, we thought 2020 was

41:52 going to crush us. I mean, so much of fundraising shrunk and people, but actually that was one of

41:57 our biggest growth years. The SBB collapsed. That was fun when it's Saturday and you think,

42:02 oh gosh, are we going to have money in the bank on Monday? Luckily we've got a CFO who moves really

42:08 fast. Like that was a fun one. Honestly, and I don't know how everyone will take this. I want

42:14 to say 21 and 22 were probably our hardest years. And honestly, when I look at the type of people

42:21 that we were trying to hire, there was so many misaligned expectations in the job market for

42:27 what it took to be successful. And then what everyone thought was normal and reasonable to

42:33 work at a SAS company. Now it's tough. Cause I'm like, I know I'm CRO work for company, but like

42:39 I've been and sort of like grown through this to see what's worked and what hasn't. You just have

42:46 to be willing to do what it takes to win. And I think that at that point we were hiring people

42:52 that were like working two jobs and remote culture was killing it cause killing us. Cause it was like

43:00 half the time. I don't even know if they were at their desk. And the thing that frustrated me,

43:06 right? It's like, it wasn't necessarily their fault, employee's fault, that time of the market,

43:14 CEOs and CROs, they were burning four, five, six dollars just to acquire one dollar of revenue.

43:21 And so when you do that and you don't know how the sausage is made, if you're just like,

43:26 Hey, I've just got a job at this tech company, you think that's normal and money was free and it was

43:32 easy and it was flowing. And I think that created misaligned expectations for a few years. I'm like,

43:38 what is normal in the job market and what you can expect from a company? So I say that cause I still

43:44 think the most important part for us today and always has been, has been talent. Like a good hire

43:53 does amazing things. If you get it right, a bad hire does 10 X of the opposite. And I think that

44:00 was probably our most challenging time where we were sort of growing a ton, trying to find people

44:05 who were like mission aligned, we're willing to do, right? Go the extra mile bought in like

44:11 team mindset. I think that season, and that was true across a lot of organizations,

44:17 a lot of companies at the time was very much the hardest. And again, I say it's tough cause I'm like,

44:23 I might have a, I might have a skewed viewpoint. I know miss hero, but like at the end of the day,

44:28 like this, this is also the thing that I feel like has allowed me to be successful is like just

44:34 going for the mission. You work hard and you stay a little bit longer than it's comfortable and like

44:40 good things will always happen with the right people in the right teams. Like find a good team.

44:47 I have a deep appreciation for that. I think talent from my perspective has been one of the

44:52 biggest challenges as well, getting the right people that are bought in and there is, oh my

44:58 goodness, such a difference between an A player and a B player. It's not one level. It's like

45:05 exponentially different. And I used to, I knew that in theory and then being responsible for

45:13 the entire business and seeing it in action, seeing it play out, seeing it in reality was

45:19 just eyeopening. And I think like doing everything you can to get those A players and even if,

45:27 I've, I've gone as far as like, Hey, I don't, we don't even have a role,

45:30 but you're incredible. I need to figure that out. We'll make, we'll make something. Yes. And then

45:36 if anybody is, and I don't want to be too like ruthless about it, but the B players don't change.

45:43 I always had this hope that like, Oh, they get a little bit more experience, enablement, whatever.

45:47 It's going to turn around and change. No, A players come in day one and they're productive

45:51 and they're phenomenal. And you never, ever question if you're going to let them go.

45:55 Like that thought never crosses your mind. If it does cross your mind,

45:59 it's probably not going to change. Yeah. There's a lot of self accountability, right? You never

46:03 necessarily have to tell them where things going wrong. They, they, they will seek guidance,

46:07 feedback or inquisitive, but often are never surprised when you give them feedback or never

46:14 surprised when you say something's not working. Cause they're like, Oh yeah, know that seen it have,

46:19 have a plan have already tried these three things. What do you think? And yeah, I'm with you. We've

46:24 hired a lot of people where I'm like, Hey, I don't even know if I have a role, but I just need you on

46:29 the team. And I will tell you like the people that have gone the farthest at virtuous and have done

46:34 well are just high agency problem solvers. I always say like, there's not really a clear ladder,

46:39 especially when you're small, especially when you're growing, like you're just trying to deal

46:43 with this next set of problems. But often the people who actually do get promoted, they're

46:49 just tackling the next set of large problems and then they get to be in charge of it. So it's like,

46:55 Hey, our outbound sucks. And someone goes, Hey, I have a really good plan. I'm thoughtful about

47:00 this. Can I just, can I just try something? I'm like, yeah. And then it works. I'm like, Hey,

47:04 guess what? You're an hour ahead of biz dev. Congrats. Like I love doing that stuff because

47:09 then it's the sense of ownership is already built in when they step into the role. They're

47:14 clearly, I trust them that they'll understand like the next set of problems. And honestly,

47:19 we've had people at virtuous that have gone five, six different roles and it's always like

47:23 problem related. It's like, where is their bottleneck? And I trust those people to just

47:28 be like, Hey, next bottleneck. Like I need those people there. That is the biggest thing because

47:34 the problems are going to change. So do you have someone who can figure that out when that happens?

47:39 Not like, okay, I trained them up enough to be able to solve this particular problem on their own.

47:44 And then, uh, oh, by the way, a new period, like 2122 comes around and things operate a little

47:50 differently. You got to fix it. You need to make sure they're prepared to do it. Yeah. Yeah. And

47:55 I think, uh, those people look at problems as opportunities versus problems as problems. Um,

48:01 I always say like, if we run out of problems to solve a virtuous, we're, we've started to die as

48:05 a company. Like that's the worst place that we can be on. So I love long lists of problems that we

48:09 have that we know we need to solve. Cause that just means there's more opportunity for growth and

48:13 improvement and like unlock. And people who look at that and go like, that's exciting. Can I solve

48:18 them? I just need, no, I don't, I'm not an expert on finding them hiring. I'm like, I still don't

48:23 have, that was going to be my next question. Like I really don't, I just know him when I see him and

48:29 I, and I, I like to find high agency people just like give them problems to solve. I mean,

48:38 is there even a way to interview for it or test for it? I feel like I haven't been able to correct

48:44 that code either, or what experience you look for or getting referrals and references. It's like,

48:50 I, I've had plenty of people that like do a phenomenal job during interviews. We even have

48:56 case studies and tests we have do, and then they get in the real job and just crash and burn. I'm

49:03 like, how, I'm like, I don't even know what I could have done to vet this better. So I was hoping

49:09 maybe you had something. I wish. I don't know. And I still don't know how to test for it well.

49:17 And we started to do more like cognitive tests. We started to do things like understand people's

49:22 aptitude, but at the end of the day, like it comes down to having a bit of a chip on your shoulder,

49:28 enough grit to like move through problems. And this is the other thing. Like this is very hard

49:35 to do on an interview because in the interview, like that person is trying to put their best

49:41 face forward to get a job and sort of like showing weakness or showing vulnerability is

49:48 almost, I feel like impossible to do those scenarios. But when in the real life, it looks

49:54 like people who are like very open and honest about the problems they're running into

50:00 and not hiding them. And I think that's the thing. It feels like it's the opposite

50:06 that you would do is like, let me bring all of my problems. Now I do think like having solutions,

50:11 all of those things are important. But the last thing I want is like one-on-ones with people that

50:16 everyone's like, everything's going great. I'm like, no, no, no, that can't be right. Like what's

50:20 broken? And I want people to be like, this is broken and this is why. And this is broken. And

50:25 I don't think we need to worry about it. And this is broken. And I'm going to need your help with it.

50:28 Like then we actually have something to work on because the point is not just to like

50:32 come in and check boxes and like do work. The point is to solve problems.

50:40 Well, when you figure it out, just let me know. I'd love to steal your playbook on it.

50:44 Yeah, I'll listen. We find your next podcast hosts and they'll, they'll do it again. I think

50:50 you know it when you see it. And when you find those people on your team, giving them more money

50:56 and promoting them as fast as humanly possible. Like I want to create environments where they

51:01 feel like this is the place I want to be for a long period of time. And that's something I feel

51:05 like we do well is create longevity for employees who may not know it all, but are like are able to

51:11 figure it out. And like, that's the most important thing to them. You've already had an incredible

51:21 run with Virtuous. Virtuous is doing very, very well. I would love to hear from, from your

51:27 perspective, what's the future for Virtuous and what's the future for you and go to market?

51:33 Yeah, that's a great question. So for Virtuous, like I think for us, we're continually wanting

51:40 to fulfill this promise of how do we create a world where every individual donor has individualized

51:47 experiences. And that's why our book, like Inn of One fundraising, the whole idea is it's a medical

51:52 term and comes from like the research world where every patient is an Inn of One is a sample of one.

51:58 And you build medicine and design around an individual. So our whole idea is how people

52:06 who have individual passions, individual desires, motives, and especially when you give somewhere

52:13 your time or your money, it's a highly personal thing. People do without a very deep conviction,

52:18 right? And usually when you think about all the places that you've given personally,

52:22 it usually comes tied with like a deep, meaningful reason. And so the more that non-profits can

52:28 connect with those donors in a way that honors that intention, like we believe generosity will

52:32 skyrocket. Like that is the most important thing is we want to create more generosity in the world

52:37 by giving tools to nonprofits to help unlock that at the donor level. So like we want to be

52:42 the biggest nonprofit software company in the world. We've got dreams to do it while also

52:48 being a top decile SaaS company and having the best KPIs in the world. We don't think again,

52:53 those things are mutually exclusive that we can't be an amazing company and do things in a way that

53:00 we feel like are very special in changing the world. Leaning into AI, I know everyone

53:06 is saying that and it's hard to know like, well, what does that actually mean? The biggest thing

53:11 for me is like, I'm kind of geeked out and excited. Like I'm a kid again. Like it's the first time I

53:16 got to the library and the internet was there. And I am like just the exploration, the excitement of

53:22 like, what could be with that? The number one thing I'm telling my team is like, I can't really

53:28 predict the future. There's good things. There's scary stories that are coming out. But like the

53:33 thing I want to do as I want to know as much, I want to be exposed to as many of the tools.

53:40 I want to be as smart as I can be. So when real decisions start needing to be made, when the

53:46 actual culture of things start to shift, when work starts to look very, very different,

53:51 I'm just ready to adapt and ready to go because I want to be adaptable. And I think this is just

53:55 such a fun environment. Now I'll let the frontier models and politicians figure out where this all

54:02 goes. But I do think that for me, I want to come in with a sense of positivity and just say like,

54:08 this could be so exciting. And I truly believe like for some of our largest problems in the world,

54:15 AI is a way to fundamentally shift like how we can cure diseases, how we can solve

54:21 some of our biggest problems. Like, that's exciting. And so to me, I'm just like, you know,

54:27 I've always thought change is inevitable. Bring it on. This is a fun way. Like,

54:31 I get to feel like a kid again, some some respect. So, you know, it's a little bit of both what's

54:37 next for virtuous and me in that sense. Like, I, it sounds simple. I love working on big problems

54:44 with people I really, really enjoy. I just happen to be really good at go to market. And that's the

54:48 thing that I like to do. But I really do feel like the next 10 years is on the precipice of like so

54:54 many fun, cool things to be able to do that again, and having tools in ways that like we've never

55:00 imagined. And again, I love people. And so I don't think that that removes humans out of the equation.

55:07 If anything, I think it just empowers them to do what we do best, which is have a spirit have heart

55:13 have souls and like, do good in the world. Well, I love the optimistic approach to I think

55:22 realism baked in there too, of course, there's going to be challenges. And

55:28 but I think a lot of the benefits, one, it's inevitable, we're just moving that direction

55:32 anyway. So you might as well do your best to navigate it. But I do think once we get through

55:38 whatever the major societal hurdles will end up being, I think on the other side, we have an

55:43 opportunity to build a much better world. 100%. Yeah, I'm with you. David, this has been

55:51 phenomenal. Thank you so much for being here sharing everything you have. I am shocked that

55:58 two boys from Awetuki and Mountain Point High School have ended up in tech and have built

56:03 real careers in it. And I think there's something that's really, really grounding about your

56:08 approach, and building something real building something of immense value, and really sticking

56:16 to it having roots in the company. I don't know, maybe it's a maybe it's a Phoenician thing,

56:20 something that we do. But I think everything you shared on how to build partnerships, how to build

56:26 a brand, what it takes to really make it through be in the long haul, be adaptable reinvent yourself

56:32 as the world around you is changing every single day. I know you and I will be challenged with

56:37 that over and over again. So I appreciate you sharing that. So David, thank you for being on

56:41 the show. And I can't wait to see what you and Virtuous do next. Thanks, Anthony. Yeah,

56:47 this has been a joy. It's so much fun to talk through this. And I just I love go to market,

56:52 I love software, I love doing this and keeping the human part the most important thing. It's

56:55 it's a joy to do the work I do. Thank you. Thank you.