---
title: "He Fired a $500K Client Right After a Layoff — Then Went $8M to $42M"
episode: 134
podcast: "The LeanScale Podcast"
publisher: "LeanScale"
guest: "Kevin Rice"
guest_title: "Co-Founder and former President & CMO, Hathway"
date_published: 2026-10-07
date_modified: 2026-10-21
duration: 01:03:51
word_count: 10644
topics: ["gtm-strategy", "brand-positioning", "mergers-acquisitions", "forecasting", "sales-leadership"]
canonical_url: https://www.leanscale.team/knowledge/podcast/kevin-rice-hathway-fired-a-500k-client-after-a-layoff/
source: "LeanScale Knowledge Hub — https://www.leanscale.team/knowledge"
license: "Free to quote and cite with attribution to The LeanScale Podcast."
---

# He Fired a $500K Client Right After a Layoff — Then Went $8M to $42M

_Kevin Rice on the four bets that turned Hathway around after a 2016 layoff: one industry, only revenue that can stack, IP that sells speed, and partners that put you in every room, plus utilization, a deal that died the night before signing, and what the climb cost at home_

**Episode 134 · The LeanScale Podcast**  
Kevin Rice, Co-Founder and former President & CMO, Hathway · Hosted by Anthony Enrico  
Published October 7, 2026 · Updated October 21, 2026 · 01:03:51  
Canonical: https://www.leanscale.team/knowledge/podcast/kevin-rice-hathway-fired-a-500k-client-after-a-layoff/

**Topics:** GTM Strategy · Brand & Positioning · Mergers & Acquisitions · Forecasting · Sales Leadership


## Executive summary

Kevin Rice co-founded Hathway in a garage with his college best friend, Jesse Dundon, straight out of Cal Poly, and spent thirteen years as its President and CMO. Hathway began as a web and app shop that took any work in any industry. By the end of 2015 it had about 50 people and roughly $8 million in revenue, its best year, all from projects that ended after eight to twelve months. In Q4 a batch of them wrapped at once, revenue was set to drop about 40% within six weeks, and the bootstrapped company had no reserves. Early in 2016 Kevin laid off part of his team, the only layoff in the company's history.

The episode is about what came next: four deliberate bets. Hathway narrowed the whole firm to restaurants on the strength of one client, Jamba Juice, and within a year handed its first Fortune 500 client, Applied Materials, to another agency, giving up about $500,000 a year just after the layoff. It took only work that could be a going concern, such as online ordering, loyalty and CRM programs clients keep funding while they see a return, and turned down corporate websites. It pulled two developers off billable work to build a reference architecture, Nom Nom. And it stopped selling the agency and sold speed: six months to market against 12 to 18 from Deloitte, Accenture and the large agencies.

Anthony Enrico, LeanScale's co-founder, presses on the questions services founders get stuck on. Kevin's test for a narrow enough niche is where buyers gather: if a segment would send you to different trade shows, it splits a limited budget, and adjacencies can come later. On partners, Hathway went to market with Olo, the restaurant e-commerce backend, through joint stages, white papers and events like Ferrari track days and yacht cruises, while running neutral backend RFPs for clients, taking no referral fees and sorting partners into three tiers.

On delivery, Kevin calls utilization the one number that matters in a services business. One industry and one code base made staff fungible across roughly 12-person client teams, and five years of disciplined Salesforce data let Hathway forecast supply against demand under 80% and 50% close scenarios. Revenue went from $8 million down to $6 million and back, then on to $42 million, with headcount growing from 30 to 250, all without outside funding.

The exit was not linear. A roll-up with a fundless sponsor paused when COVID closed dining rooms, then COVID became a tailwind as online ordering turned into clients' only revenue. A deal collapsed the night before signing in December 2020; Canaccord Genuity then ran a 12-month process with about 50 companies and Hathway sold to Bounteous in 2021 for three to four times the earlier price. The last part covers the personal cost: becoming a solo father of a toddler and a newborn in early 2020, running in what he calls robot mode, and why he would not work an hour less but would be more intentional and present at home. The episode is for services founders and executives, anyone weighing a vertical focus or a partner-led motion, and leaders trying to build something big without losing their families.


## Key takeaways

1. **Project revenue is a cliff you can't see until you're on it** — Hathway closed 2015 at about $8 million, its best year, but every dollar came from projects with a fixed end. When a group of eight-to-twelve-month projects finished together, revenue was set to fall about 40% within six weeks. With net-45 and net-90 payment terms and payroll due immediately, the bootstrapped firm had no reserves to keep people on the bench.
   _Why it matters:_ A record year built entirely on finite projects can hide the next cliff. Kevin says that if leadership had looked up from the weeds three months earlier, they might have acted in time. Track how much revenue will still exist two quarters out, not just this year's total.
   _For:_ Founders, Revenue Executives

2. **Take accountability, cut deep enough, and stay visible** — Leaders told affected people one-on-one, then held an all-hands by mid-morning. They took responsibility, said they had cut as deep as they thought necessary, and made no promise that there would be no further rounds. Their VP of finance had told them to double whatever cut they thought they needed; they ended up between her number and theirs. Afterward, the executives stayed visible and talked with the team more, instead of solving things behind closed doors.
   _Why it matters:_ Survivors start looking for jobs because they expect another round. Honesty about what you can't promise, and confidence in how you carry yourself, is what keeps them. Kevin also says he no longer recommends a family culture for a business.
   _For:_ Founders, Revenue Executives, Sales Leaders

3. **Bet #1: narrow the whole firm to one industry, even with one client in it** — Hathway had worked in financial services, B2B tech, healthcare and retail, and was relearning industries, consumers and technologies on every project. After launching Jamba Juice's first online ordering and loyalty app, Kevin saw that only Starbucks and Domino's had invested seriously in digital. Restaurants had to catch up, as travel and retail had before them. Hathway moved all marketing and sales to restaurants and, within a year, handed its first Fortune 500 client, Applied Materials, worth about $500,000 a year, to another agency.
   _Why it matters:_ The niche was a bet on an industry that had to invest, made while the firm had one client in it and had just cut staff. Not everyone inside agreed. Focus is only real when you give up revenue to keep it.
   _For:_ Founders, Marketing Leaders, Revenue Executives

4. **Bet #2: only take revenue that can be a going concern** — Hathway limited itself to online ordering, CRM, loyalty and other revenue-driving programs. Because those programs produce measurable revenue, Hathway could financially model them for clients: if $1 million a year produces $30 million in incremental revenue, spending $2 million or $5 million is easy to justify, and clients keep investing as long as the return is there. Requests for corporate websites were turned down immediately.
   _Why it matters:_ Kevin's test is whether revenue can be stacked and scaled over time without leading to another cliff. He needed revenue, but he needed the right kind more, and he turned down the wrong kind even right after a layoff.
   _For:_ Founders, Revenue Executives, Sales Leaders

5. **Bet #3: build IP your clients pay to expand** — With little capital, Hathway took two full-time developers off billable work to write a reference architecture code library, Nom Nom, that every new client engagement started from. Co-founder Jesse Dundon structured contracts so clients got a one-time perpetual license to the core code (they could take it in-house but not sell it) while Hathway kept the rights to customizations clients paid for on time and materials. Each new integration flowed back into the core repository.
   _Why it matters:_ Nom Nom was only 5–10% of revenue, but it shortened delivery from the 12–18 months of firms starting from scratch to about six months, and client-funded work kept growing it. Its main value was what it did for sales.
   _For:_ Founders, Revenue Executives

6. **Bet #4: stop selling the agency, start selling speed** — Kevin found code hard to sell to a marketer, and every agency already claims the best people, culture, awards and an 80-page methodology. Nom Nom gave Hathway the one differentiator nobody else had: six months to market instead of 12 or 18, at roughly the same price as the big firms. The pitch moved from Hathway's credentials to the buyer's industry: what competitors were spending, where they sat on a digital maturity model, and why waiting two years to launch meant being dead in the water.
   _Why it matters:_ Hathway changed the buyer's selection criteria from best creative, lowest price or most case studies to who can get them to market fastest, and it knew it would win on that criterion. Anthony adds that people underestimate how much buyers will pay for speed.
   _For:_ Sales Leaders, Marketing Leaders, Founders

7. **Niche by where your buyers gather** — Asked how narrow is narrow enough, Kevin says you can't really be too niche because you can always expand later. Hathway added convenience stores in 2020 as an adjacency; doing restaurants and convenience stores in 2016 would have spread it too thin. His practical test is go-to-market: with a limited budget, would the second segment send you to different trade shows and events? If so, it's too wide for now.
   _Why it matters:_ Anthony calls this a usable heuristic: line the niche up with the events your budget can cover. Splitting conferences also splits the partner flywheel that brings you more deals.
   _For:_ Founders, Marketing Leaders

8. **Partner with the platform you complete, and go to market as one team** — Olo was the backend; Hathway built the headless front end, which could not take a transaction on its own. Each needed the other to win large chains. Together they spoke on stage with clients, printed joint white papers, made Hathway-plus-Olo swag, and hosted events such as Ferrari and Lamborghini track days and yacht cruises instead of another steak dinner. Hathway's reps texted Olo and Salesforce reps daily about which chains were moving and made introductions both ways.
   _Why it matters:_ A complementary partner whose product is incomplete without yours gives both sides a reason to bring the other in. The distinctive events also built the brand persona Hathway wanted: edgy, the cool kids of restaurant tech.
   _For:_ Marketing Leaders, Sales Leaders, Revenue Executives

9. **Avoid channel conflict by refusing referral fees and running real RFPs** — As clients began asking Hathway to help choose CRM, loyalty and CDP backends, it ran formal RFPs across partners. It never took commissions or referral fees, and told partners its responsibility was to the client, with no back channel. That put Hathway in a position of power with vendors who wanted brands like Panda Express and Burger King, but it also had to play Switzerland.
   _Why it matters:_ Partners were tiered: tier one meant going to market together and investing in conferences; tier two meant quarterly business reviews and account planning with close sales teams but little investment; tier three covered useful utility tools. Eventually Hathway hired a strategic alliances director to run it.
   _For:_ Revenue Executives, Sales Leaders, RevOps Leaders

10. **In a services business, utilization is the number everything flows from** — Kevin watched one metric above all: whether utilization was at or above target. High utilization usually means healthy profit and EBITDA downstream. Hitting it means matching demand and supply so nobody sits on the bench and there are never too few people to deliver. One industry, one core code base and consistent partners made staff fungible: on roughly 12-person client teams, people on a slow account could move to another and stay billable.
   _Why it matters:_ Specialization and IP help sell, and they also make capacity planning workable. Every $25,000 a month in new revenue meant a new hire, so staffing was tied directly to the pipeline.
   _For:_ RevOps Leaders, Revenue Executives, Founders

11. **Forecast supply against demand with scenario close rates** — Hathway was strict about its Salesforce instance. It did not help much for the first couple of years, but after about five years of data the team could forecast well. They modelled what would happen if they closed everything at 80% or only 50%, how long hiring and onboarding took, when a new hire was ready to bill, and how quickly they could spin up teams. By 2021 the close rate was around 80%.
   _Why it matters:_ Anthony, who ran forecasting at three companies before LeanScale, calls this the most demanding kind of forecasting, because a miss on either side takes the wheels off. Strong client retention helped: Hathway was adding staff, not backfilling for clients who left.
   _For:_ RevOps Leaders, Revenue Executives

12. **COVID turned the specialization into the lifeline** — When restaurants were ordered to close in March 2020, Kevin didn't know whether clients like Burger King would have to drop Hathway. Instead, online ordering became their only revenue, and they needed features almost nobody had, such as curbside pickup and cashless payments. One brand on a templated solution it couldn't modify signed a multimillion-dollar deal in five business days, work that would normally have taken six months.
   _Why it matters:_ As brands cut vendors, Hathway was the one left because it was bringing sales through their virtual doors. A firm that had narrowed to revenue-driving work in one industry was positioned for the moment that industry's revenue moved online.
   _For:_ Founders, Revenue Executives

13. **Selling the company is a second full-time job, and a banker earns the fee** — Hathway first entertained an acquisition in 2019 through a fundless sponsor assembling a roll-up with private equity backers. COVID paused it; the buyer came back, and the price went up a few times. A new managing partner then chipped away at terms, including keeping $2 million of cash reserves, and the deal collapsed on December 22, 2020, the night before signing and the day before the virtual holiday party where it was to be announced. Jesse then insisted on a banker. Canaccord Genuity ran a 12-month process, prepared the CIM, met about 50 companies and sold Hathway to Bounteous for three to four times the earlier price.
   _Why it matters:_ Expect to work two full-time jobs during a sale. A formal, banker-run process with many buyers can be worth far more than a single negotiated deal.
   _For:_ Founders, Revenue Executives

14. **Bootstrapping and broad ownership made the exit life-changing for the team** — Hathway never took outside funding. Kevin and Jesse owned the company and set aside part of their ownership as options for employees, so engineers who were not managers but had stayed a long time made enough to buy a house. Kevin contrasts this with venture-backed founders who reach large valuations but walk away with little after liquidation preferences and dilution.
   _Why it matters:_ Anthony says a life-changing exit as an employee gave him the confidence to start LeanScale and that LeanScale shares ownership the same way. Founder outcome depends on what you own, not the headline valuation.
   _For:_ Founders

15. **Not balance: intentionality, presence and systems instead of discipline** — In early 2020 Kevin became a solo father of a three-and-a-half-year-old and a three-week-old, weeks before COVID. He coped by shutting off emotionally, which he calls robot mode: top performance at work, disconnected at home, with a growing gap between him and his kids. He says he would not have worked less than his 12–14 hour days. He would have planned his time with his kids and been mentally present in it. Today he relies on forcing functions: changing clothes before leaving the office, a secret handshake with his oldest son as a reconnection ritual, and putting the phone away.
   _Why it matters:_ Ambitious people won't get eight hours for work and eight for family. Kevin's answer is to apply work's leadership tools, such as planning, themes and systems, to the few hours at home, without treating kids as employees. He now hosts CEOs & ABCs on the subject.
   _For:_ Founders, Revenue Executives, Sales Leaders


## Frameworks

### The Four Bets Behind Hathway's Turnaround (09:17)

**Definition:** Four deliberate changes after the 2016 layoff: narrow to one industry, take only revenue that can be a going concern, invest in proprietary IP, and rebuild the sales narrative around speed to market.

Each bet supports the others. The restaurant focus gave the firm one market to learn and one set of events to attend. Going-concern work (ordering, loyalty, CRM) let Hathway model ROI and keep clients investing. Nom Nom, built by two developers taken off billable work, cut delivery to about six months. That speed became the differentiator the sales narrative was built on. Together they took the firm from $8M with a cliff to $42M and an exit.

### The Going-Concern Revenue Test (14:48)

**Definition:** Before taking an engagement, ask whether it can become an ongoing investment for the client, ideally one that generates measurable revenue, so the work can stack and scale instead of ending in a cliff.

Revenue-driving programs such as online ordering, loyalty and CRM can be financially modelled: if a client spends $1M a year and sees $30M in incremental revenue, it can justify $2M or $5M and keeps investing while the return holds. One-off capital projects like a corporate website fail the test, and Hathway declined them immediately even when it needed revenue.

### Reference Architecture With Perpetual Licenses and Retained Customizations (16:07)

**Definition:** Build a core code library every engagement starts from, license it to each client perpetually without transferring ownership, and keep the rights to client-funded customizations so the IP grows with every engagement.

Hathway's Nom Nom let it deploy working code on day one and spend six months customizing, against the 12–18 months of firms building from scratch. Clients could take the code in-house but not sell it. When a client paid for, say, a Salesforce Marketing Cloud integration, that code went back into the core repository. Nom Nom was only 5–10% of revenue, but it underpinned the speed claim and made staff fungible.

### Sell Speed, Not the Agency (19:45)

**Definition:** Replace a credentials pitch with a narrative about the buyer's market that makes time to market the deciding criterion, then win on that criterion.

Hathway's proposals opened with industry investment data, the prospect's competitors and where each sat on a digital maturity model, then argued that the only thing that mattered was getting something to market and iterating. A two-year launch meant being dead in the water. That moved the buyer's criteria away from best creative, lowest price or most case studies toward who could get them to market fastest, which Hathway knew it would win because of Nom Nom.

### Niche by Where Your Buyers Gather (25:11)

**Definition:** A niche is narrow enough when your whole marketing budget can reach it through the same events and partners. If a second segment would need different trade shows, wait and expand into it later as an adjacency.

Kevin says you can't really be too niche because you can always expand. Hathway stayed on restaurants in 2016 and added convenience stores only in 2020. Beverage or retail would have been easy to claim but would have split a limited event budget. Anthony adds that you can keep in scope the segments already present at your core events and in your partners' pipelines.

### Three-Tier Partner Model (33:30)

**Definition:** Tier one partners go to market with you and get major conference investment; tier two get quarterly business reviews, account planning and close sales relationships with little investment; tier three are utility tools worth including but not strategic.

Hathway paired the tiers with a strict neutrality rule: no commissions or referral fees from any partner, and formal RFPs when clients needed a backend. That made Hathway important to vendors who wanted large chains, while it played Switzerland. A strategic alliances director eventually ran the program.

### Utilization-First Capacity Planning (37:11)

**Definition:** In a services business, manage to utilization as the master metric and plan capacity from pipeline scenarios, hiring lead time and ramp time so supply matches demand.

Kevin modelled what would happen if Hathway closed everything at 80% or only 50%, how long hiring and onboarding took, and when a new hire could bill. Five years of disciplined Salesforce data made the forecast reliable. Specialization made staff fungible across roughly 12-person client teams, so a slow review cycle on one account didn't mean idle people. Every $25K a month in new revenue meant one new hire.

### Intentionality, Presence and Forcing Functions (57:02)

**Definition:** Instead of chasing work-life balance, plan the limited time you have at home as deliberately as your work week, be mentally present in it, and use systems and rituals so you don't have to rely on discipline.

Kevin worked 12–14 hour days and says he wouldn't change that. What he would change is coming home as a default dad, drained by decision fatigue. Now he plans the week with his kids around themes such as brotherly connection or resilience and grit, changes clothes before leaving the office to switch from president mode to parent mode, uses a secret handshake as a reconnection ritual, and puts his phone away.


## Quotes

_Speakers inferred from an undiarized transcript — verify before attributing._

> "We didn't have the financial reserves to keep people on staff. It just wasn't, we didn't have that option. We didn't have that luxury."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (04:16)

> "I don't think we went as deep as she wanted to and we went deeper than we wanted to as an executive team."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (07:35)

> "That was half a million dollars of revenue annually that was going to be off of our books. And this was just after we had done a layoff."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (14:09)

> "We needed revenue, but more importantly, we needed the right kind of revenue, the kind of revenue that could be stacked and scaled sustainably over time without leading us towards another cliff."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (15:47)

> "Then something that felt very hard to sell and very ethereal became very tangible."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (19:22)

> "So now instead of selling Hathway, instead of selling Nom Nom, we were selling speed to market."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (21:04)

> "No longer was it about who had the best creative. No longer was it about who's the cheapest or who has the best reputation or who has the most case studies. Now all of a sudden, all they were thinking was who can get me to market fast enough."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (22:43)

> "I think a lot of people underestimate the value of speed and the magnitude at which people will pay for speed."
>
> — Anthony Enrico, The LeanScale Podcast Ep. 134 (23:06)

> "I don't know if you can ever be too niched because you can always expand later, right?"
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (25:11)

> "We never took any sort of commissions or referral fees from any of our partners."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (31:48)

> "It's one thing to bring in the revenue. It's another to deliver on it."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (37:11)

> "The number one metric in this kind of business is utilization. Are your teams utilizing? Everything flows from there."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (38:18)

> "Every 25 grand a month in new revenue was a new head count."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (42:34)

> "Running a process to sell your company is a second job. So expect to be working two full-time jobs during that time."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (45:35)

> "When these brands were shedding vendors left and right, we were the one vendor that was left because we were the only one that was actually bringing sales in their virtual doors."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (48:38)

> "I also love how some things on the surface that look like they're going to be negative or challenges end up being massive opportunities."
>
> — Anthony Enrico, The LeanScale Podcast Ep. 134 (51:18)

> "I was performing at the highest level, crushing it productivity wise, but then I was completely disconnected from all of the emotions that make this experience of life worth living."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (54:19)

> "As I was getting closer to the finish line in my career, the gap between me and my kids was growing."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (54:48)

> "No, I wouldn't have worked any less hard. I was working 12, 14 hour days."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (57:20)

> "It's having systems, rituals, routines, just little like tools that force you to not have to rely on discipline."
>
> — Kevin Rice, The LeanScale Podcast Ep. 134 (01:02:05)


## Practical advice by role

### Founders

- Measure how much of next quarter's revenue already exists. A record year built on finite projects can still end in a cliff.
- When you have to cut, take accountability in an all-hands the same day, cut deep enough to avoid a second round, and don't promise there won't be one.
- Pick an industry that has to invest and commit marketing, sales and events to it, even if that means handing off a large legacy client.
- Invest a little capacity in reusable IP early, and structure contracts so clients license it perpetually while you keep the rights to customizations they fund.
- Before selling the company, hire a banker and run a formal process with many buyers. Expect it to be a second full-time job.
- Set aside ownership for long-tenured employees. A bootstrapped exit can change their lives.

### Revenue Executives

- Use a going-concern test on new business: prefer engagements that can be financially modelled against client revenue and will keep being funded.
- Turn down work that can't stack, even when you need revenue.
- Tier partners explicitly and match investment to tier: joint conferences for tier one, QBRs and account planning for tier two.
- Stay neutral in partner selection for clients: no referral fees, formal RFPs, published criteria.
- Plan for adjacent markets, but enter them only after you've built a reputation in the core niche.

### Sales Leaders

- Lead with the buyer's market, not your credentials: competitor investment, a maturity model, and what waiting costs.
- Find the one thing only you can offer, such as speed, and shift the buyer's selection criteria toward it.
- Keep reps in daily contact with partner reps, sharing account intelligence and making introductions both ways.
- Make an intangible asset concrete in the proposal: Nom Nom became six months instead of twelve to eighteen.

### Marketing Leaders

- Size the niche to the events your budget can cover. If a segment needs different trade shows, it's out of scope for now.
- Co-market with a complementary platform partner: joint stage time with a client, co-branded white papers and swag.
- Stand out at trade shows with experiences others don't offer, and use them to build the brand persona you want.

### RevOps Leaders

- In services, make utilization the headline metric and tie hiring plans to pipeline scenarios such as 80% and 50% close rates.
- Include hiring lead time, onboarding time and time to first billable work in the capacity model.
- Enforce CRM discipline early. Kevin's forecast only became reliable after about five years of clean Salesforce data.
- Standardize industry, platform and partners so staff are fungible across client teams and slow weeks don't create idle people.


## AI takeaways

**Thesis:** This episode is not about AI. Its relevance to AI-era go-to-market is indirect: Hathway's advantage came from proprietary, reusable IP that sold speed to market, and Kevin now invests in AI-native startups through Theorem One Capital.

- **** — 
- **** — 
- **** — 

**Agent & automation ideas**

- A capacity-planning agent that projects utilization from weighted pipeline under several close-rate scenarios and flags hiring needs given hiring and ramp lead times.
- A competitive-maturity agent that assembles a prospect's position against competitors' digital investments for the opening of a proposal.


## Operations takeaways

### Revenue operations

- **.** 
- **.** 
- **.** 
- **.** 
- **.** 

### Pipeline & marketing ops

- **.** 
- **.** 
- **.** 
- **.** 
- **.** 


## Metrics mentioned

| Value | Metric | Context |
| --- | --- | --- |
| About $8M | Revenue at the end of 2015 | Hathway's best year to that point, with about 50 employees, all from project work. |
| About 40% within six weeks | Revenue drop facing the company | In Q4 2015, as many projects ended together. Kevin says he doesn't remember the exact figure. |
| About $500K a year | Applied Materials revenue handed off | Given to another agency within a year of narrowing to restaurants, just after the layoff. |
| About 6 months vs. 12–18 months | Time to market with Nom Nom | Hathway's delivery time starting from its reference architecture, against competitors that started from scratch. |
| 5–10% | Nom Nom share of revenue | License revenue was a one-time fee, so the IP's value was in speed and the sales narrative rather than direct revenue. |
| $1M a year → $30M incremental revenue | Illustrative client ROI model | Kevin's example of how revenue-driving work justified budgets of $2M to $5M a year. |
| $25K a month | Revenue per new hire | In a time-and-materials agency, each $25K of new monthly revenue meant one new hire. |
| About 80% | Close rate by 2021 | Kevin calls it unusually high for the industry; it rested on strict Salesforce discipline. |
| $8M → $6M → back to $8M → $10M+ → $15M → $22M → $42M | Revenue growth after the layoff | The path from 2015 to the 2021 acquisition, as Kevin recounts it (one intermediate figure in the transcript is unclear). |
| About 30 to 250 in five years | Headcount growth | Bootstrapped, with no outside funding. |
| About 12 people | Client team size | Typical core team per client, staffed from a fungible pool. |
| Multimillion-dollar deal in 5 business days | Fast COVID deal | Signed in April 2020; Kevin says it would normally have taken six months. |
| 12 months, about 50 companies | Sale process | Run by Canaccord Genuity after the first deal collapsed on December 22, 2020. |
| 3–4x | Exit price vs. failed deal | The final sale price against the deal Hathway nearly signed less than 12 months earlier. |
| 13 years | Company tenure | Kevin's time at Hathway, with only one layoff in that period. |


## Entities mentioned

- **Hathway** (company) — The digital agency Kevin co-founded in a garage with Jesse Dundon after Cal Poly. It reached about $8M and 50 people by 2015 on project work, laid off staff in early 2016, then narrowed to restaurants, built the Nom Nom IP and grew to $42M and 250 people, bootstrapped, before being acquired in 2021. · https://www.leanscale.team/knowledge/company/hathway/
- **Bounteous** (company) — The acquirer of Hathway in 2021, per the show notes; Kevin describes the banker-run process that led to the sale at three to four times an earlier offer. · https://www.leanscale.team/knowledge/company/bounteous/
- **Jamba Juice** (company) — Hathway built Jamba Juice's first online ordering and loyalty app in 2015 after Kevin met its CMO at a conference. The project led to the restaurant focus and to the Olo partnership. · https://www.leanscale.team/knowledge/company/jamba-juice/
- **Applied Materials** (company) — Hathway's first Fortune 500 client, whose Drupal website it managed. Kevin says it was once a million-dollar-a-year client; Hathway handed the roughly $500K-a-year account to another agency within a year of narrowing to restaurants. · https://www.leanscale.team/knowledge/company/applied-materials/
- **Olo** (company) — The restaurant e-commerce backend that Hathway's headless front end plugged into. Kevin calls it the 1,200-pound gorilla of the space. The two went to market together with joint stages, white papers, swag and events, and their reps traded account intelligence daily. · https://www.leanscale.team/knowledge/company/olo/
- **Deloitte** (company) — Named with Accenture and the large agencies as competitors in RFPs that started from scratch and quoted 12–18 months for work Hathway could deliver in about six. · https://www.leanscale.team/knowledge/company/deloitte/
- **Burger King** (company) — One of the large chains in Hathway's market. Kevin mentions reps trading news about Burger King's plans and, in March 2020, wondering whether clients like Burger King would have to drop Hathway. · https://www.leanscale.team/knowledge/company/burger-king/
- **Canaccord Genuity** (company) — The investment bank Hathway hired after a deal fell through in December 2020. It ran a 12-month process with about 50 companies and got Hathway acquired for three to four times the earlier price. · https://www.leanscale.team/knowledge/company/canaccord-genuity/
- **LeanScale** (company) — Anthony's company. He compares its services model, B2B SaaS and AI focus and niche questions to Hathway's, and says LeanScale shares ownership with employees as Hathway did. · https://www.leanscale.team/knowledge/company/leanscale/
- **Kevin Rice** (person, guest) — Co-founder and former President & CMO of Hathway, the restaurant-tech agency he grew to $42M and sold to Bounteous; host of CEOs & ABCs. · https://www.leanscale.team/knowledge/guest/kevin-rice/
- **Anthony Enrico** (person, host) — Co-founder of LeanScale and host of The LeanScale Podcast. · https://www.leanscale.team/knowledge/guest/anthony-enrico/
- **Salesforce** (tool, CRM) — Hathway was strict about its Salesforce instance; after about five years of data it could forecast demand against capacity. Its reps also worked closely with Salesforce reps, and a client request to integrate with Salesforce Marketing Cloud is Kevin's example of a customization that flowed back into Nom Nom.
- **Drupal** (tool, CMS / Web) — The platform behind Applied Materials' website, which Hathway managed as its first Fortune 500 client.


## FAQ

**Q: Why is project-based revenue risky for an agency or services firm?**

A: Project revenue ends when the project ends. Kevin Rice's agency, Hathway, closed 2015 at about $8 million, its best year, but all of it came from eight-to-twelve-month projects funded as one-time capital expenditures. When several finished at once, revenue was set to fall about 40% within six weeks. With clients paying on net-45 or net-90 terms and payroll due immediately, the bootstrapped firm had no reserves and had to lay people off. Afterward Hathway took only work that could be a going concern, such as online ordering, loyalty and CRM programs that clients keep funding as long as they see a return.

**Q: How do you know when a niche is narrow enough?**

A: Kevin Rice's test is where your buyers gather. If adding a segment would require going to different trade shows and events, it would split a limited marketing budget and weaken partner momentum, so it is too wide for now. He says you can hardly be too niche, because you can always expand into adjacencies later. Hathway focused purely on restaurants from 2016 and added the closely related convenience store industry only in 2020, which would have spread it too thin earlier.

**Q: How did Hathway use proprietary IP to win against larger agencies?**

A: Hathway took two full-time developers off billable work to build Nom Nom, a reference architecture code library that every new client engagement started from. That cut delivery to about six months, compared with 12–18 months for firms like Deloitte, Accenture and large agencies that started from scratch. Clients received a perpetual license to the core code, while Hathway kept the rights to customizations clients paid for and folded them back into the library. Nom Nom was only 5–10% of revenue, but it let Hathway stop selling the agency and sell speed to market instead.

**Q: How can a services firm avoid channel conflict with technology partners?**

A: Hathway's approach was strict neutrality. It never took commissions or referral fees from any partner. When clients hired it to choose a CRM, loyalty or CDP backend, it drafted requirements, ran a formal RFP across partners, reviewed responses and made a recommendation, and told partners its responsibility was to the client. It tiered partners: tier one for joint go-to-market and conference investment, tier two for quarterly business reviews and account planning, and tier three for useful utility tools. A strategic alliances director eventually ran the program.

**Q: What is the most important metric in a services business?**

A: According to Hathway co-founder Kevin Rice, it is utilization: whether your teams are billable at or above target. High utilization usually means healthy profit and EBITDA downstream. Managing it means matching demand and supply by forecasting the pipeline under scenarios such as closing 80% or 50% of deals, and accounting for how long it takes to hire, onboard and get a new person billable. Specializing in one industry and one code base made Hathway's staff fungible across client teams, which made the utilization targets achievable.

**Q: Should a founder use an investment banker to sell a company?**

A: Kevin Rice's experience suggests it can be worth it. Hathway's first acquisition, with a fundless sponsor assembling a roll-up, collapsed on December 22, 2020, the night before signing, after a new managing partner chipped away at terms. Hathway then hired Canaccord Genuity, which ran a 12-month process, prepared the confidential information memorandum, met about 50 companies and sold the firm to Bounteous for three to four times the earlier price. Kevin also warns that running a sale process is a second full-time job.

**Q: Can an ambitious founder have work-life balance?**

A: Kevin Rice says no, if balance means eight hours for work and eight with your kids, because big goals take long hours. He worked 12–14 hour days building Hathway and would not work less. What he would change is how he spent the two or three hours at home: planning that time as deliberately as a work week, being mentally present rather than thinking about the next pitch, and using systems instead of discipline, such as changing clothes before leaving the office, a reconnection ritual with his son and putting the phone away.


## Timeline

- **00:00** — Cold open + intro
- **01:39** — 2016: the layoff nobody saw coming
- **04:13** — Why $8M of revenue was the problem, not the win
- **11:03** — Bet #1: narrow the whole firm to one industry
- **14:48** — Bet #2: only take revenue that can be a going concern
- **16:07** — Bet #3: two developers, a code library, and Nom Nom
- **19:45** — Bet #4: stop selling the agency, start selling speed
- **26:00** — The Olo partnership, Ferraris, and yacht cruises
- **37:11** — Utilization, fungible teams, and five years of forecast data
- **45:13** — The run-up to the exit and the fundless sponsor
- **47:20** — COVID shuts the restaurants and becomes a tailwind
- **50:30** — Canaccord, 50 companies, and 3–4x the price
- **52:03** — Robot mode
- **56:48** — Would you have worked less? No.
- **01:02:22** — Wrap


## Related episodes

- **Ep. 90: Why Your Niche Isn't Niche Enough** (Gary Frazier) — The general case for narrowing further than feels comfortable, which Hathway did when it put the whole firm into restaurants with one client. · https://www.leanscale.team/knowledge/podcast/gary-frazier-niche-brand-positioning/
- **Ep. 12: Are Partnerships a Complete Waste of Time?** (Tim White (Wealth.com)) — Another view of partner-led growth, to set against Hathway's joint go-to-market with Olo and its three-tier partner model. · https://www.leanscale.team/knowledge/podcast/tim-white-partnerships-waste-of-time/
- **Ep. 131: You Didn't Build a Business. You Built a Job.** (Nitin Khanna (N3 Business Advisors)) — What has to be ready before a business sells, the companion to Hathway's failed first deal and banker-run exit at three to four times the price.
- **Ep. 35: Operate Like You're Already Public** (Stephanie Ucko) — Olo from the inside: its first RevOps hire on the IPO journey of the platform Hathway partnered with. · https://www.leanscale.team/knowledge/podcast/stephanie-ucko-revops-through-ipo/
- **Ep. 87: Most Acquisitions Fail Like This: What Nobody Tells You About M&A** (Chris Heller) — M&A from the operator's side, relevant to Hathway's roll-up attempt, the collapsed deal and the eventual sale. · https://www.leanscale.team/knowledge/podcast/chris-heller-why-most-acquisitions-fail/
- **Ep. 128: The Art of the Turnaround: Outrun the Slowest Camper** (Chris Adamkowski (Beanfield)) — Another turnaround story, from a CRO brought in by private equity, to compare with Hathway's founder-led recovery after its layoff.
- **Ep. 116: Balance Is the Wrong Goal: Fixing Burnout in RevOps** (Joe Mosely) — Makes the same argument as Kevin's closing section: balance is the wrong target, and how you spend the hours matters more.
- **Ep. 54: The Hidden Cost of Hustle Culture** (Jack Jackson) — The cost of relentless work, to set against Kevin's robot mode and his view that he would not have worked less. · https://www.leanscale.team/knowledge/podcast/jack-jackson-hidden-cost-hustle-culture/


## Full transcript

_Machine-transcribed and not diarized; speaker attribution is inferred._  
_Transcript only, as a separate file: https://www.leanscale.team/knowledge/podcast/kevin-rice-hathway-fired-a-500k-client-after-a-layoff/transcript.md_

### 00:00 — Cold open + intro

**[0:00]** We're not going to have work-life balance if you are somebody that's ambitious and wants

**[0:04]** to build a company or wants to be in the C-suite at a Fortune 500 company.

**[0:09]** You don't get eight hours for work and eight hours with your kids.

**[0:13]** You're not going to achieve what you want to achieve if you have big goals.

**[0:17]** My guest today is Kevin Rice, the co-founder and former president and CMO of Halfway,

**[0:22]** the digital agency he and a partner started in a garage out of Cal Poly and scaled to 250 people

**[0:29]** and over $40 million in revenue before selling for nine figures in 2021.

**[0:36]** Were you thinking you would be able to make it through or were you concerned that

**[0:39]** maybe it would potentially go to zero after that point?

**[0:43]** Yeah, I didn't know. Absolutely worst case scenario was we had to scale all the way down.

**[0:50]** She was like, whatever you think you need to cut, you need to double that cut.

**[0:55]** I think a lot of people see this as a zero sums game or were there ways you could have balanced both?

**[1:01]** No, I wouldn't have worked any less hard. I was working 12, 14 hour days. I was working my ass off.

**[1:10]** What I would have done differently is in the time I had with my kids,

**[1:14]** I would have been more intentional about it.

**[1:16]** Those are some of the details. I also love how some things on the surface that look like they're

**[1:22]** going to be negative or challenges end up being massive opportunities.

### 01:39 — 2016: the layoff nobody saw coming

**[1:39]** Kevin, take me back to the start of 2016. You just had laid people off because a bunch of projects

**[1:46]** all wrapped up at the same time. What was actually going through your head in that moment before any

**[1:51]** of it became the turning point that we know it is now?

**[1:54]** Well, first of all, thanks for having me on. I really appreciate it. That was a wonderful

**[1:58]** introduction. Thank you for all the kind words. 2016 was a very tough year for me. It was a tough

**[2:04]** year for our company. If I were to take a few steps back, just to kind of say how we got there

**[2:10]** was I started this company with my co-founder, best friend in college, straight after graduation

**[2:18]** and in a garage. And then like a lot of startup stories, we went from a garage into a small office,

**[2:23]** hired a few employees, and then just kind of started growing organically from there.

**[2:29]** Originally, we were just kind of like a web design app development firm. And we kind of did anything

**[2:36]** and everything for any industry like we would take on any kind of work we could get. And that's really

**[2:43]** difficult to manage and really difficult to scale for a lot of reasons. You're constantly learning

**[2:49]** new industries, new consumers or customers. You're learning new technologies. And so there's

**[2:55]** always all this overhead and ramp up time. And it just really wasn't something that we could grow,

**[3:02]** like scale consistently. And so we ended up getting these like really big enterprise tech projects.

**[3:09]** Like our first Fortune 500 client was Applied Materials, a huge semiconductor company, right?

**[3:16]** We started managing their Drupal website. And that was like a million dollar a year client.

**[3:21]** And then we had a couple others like that. And so in 2015, we had been doing this for about six years.

**[3:28]** We were probably at like 50 employees, something like that, doing about, I think we closed out

**[3:34]** 2015 at like 8 million in revenue. Now, the problem was is all of that 8 million in revenue

**[3:41]** came from projects. So it wasn't a going concern for our clients. They would sign off on a capital

**[3:48]** expenditure of $2 million. We'd launch a new website or a new app, but at the end of like

**[3:53]** eight to 12 months, that project was done. And so we had to figure out where did these staff

**[3:58]** roll onto? What's the next project? And unfortunately, at the end of 2015, after our best year ever,

**[4:05]** right? Like we did 8 million in revenue. That was pretty amazing. We were in Q4 staring down

**[4:10]** the barrel of just a massive cliff. Our revenue was, I forget the exact numbers, but probably

### 04:13 — Why $8M of revenue was the problem, not the win

**[4:16]** dropping 40% within six weeks. And we didn't have the financial reserves to keep people on staff.

**[4:24]** It just wasn't, we didn't have that option. We didn't have that luxury. We weren't being like,

**[4:28]** you know, greedy like you see in some of the headlines of corporations today where they're

**[4:32]** doing cost cutting, but their profit is skyrocketing. This was an essential,

**[4:38]** very tough decision that we had to make to reduce our staff. And so what you asked,

**[4:44]** what was going through my mind? It was terrible. We had a very strong family culture, which actually,

**[4:51]** I don't really recommend for business. I don't think family cultures make the most sense. And

**[4:55]** maybe I'll get to that later, but that's the way we were, right? Like it was a family. I knew

**[5:00]** everybody. I knew all their, their spouses, even some of their kids and having to walk in the door

**[5:08]** that morning and go tell a handful of people on my team directly, while the other leadership had to

**[5:13]** do the same for their team and sit them down and say, like, you know, I appreciate all of the hard

**[5:20]** work because everybody was grinding really hard. Um, but after today, you no longer have a job.

**[5:28]** That was a really painful moment for me. Um, one of the most difficult in my professional career.

**[5:35]** So unfortunately, what like the results of that was like, we had to figure out how do we climb out

**[5:42]** of this? Like, how do we like, this isn't the end of our story. We just need to figure out how do we

**[5:49]** change direction? How do we make the right moves? How do we make the right shifts to get us back on

**[5:54]** track so that, you know, we could rebound from this really like difficult, painful, uh, disastrous

**[6:04]** situation that I couldn't blame anybody for, but myself, right? Like my heads were so far in the

**[6:10]** weeds that had I just kind of seen the forest through the trees three months before, maybe we

**[6:18]** could have done something sooner, you know? And so at the end of the day, I had to take full

**[6:22]** accountability. Same with the rest of our executive team. There was nobody to blame but ourselves and

**[6:27]** that sucked. I have a lot of questions, but was this before we fully unpack, was this the first

**[6:36]** time you had to do something like that? Did you have many riffs before or was everything pretty

**[6:41]** much going well up until that point? I had learned how to manage out under performers and there were

**[6:46]** certainly times where I had to let team members go, but this was the one and only

**[6:52]** layoff that we had to do in the company's tenure over the course of 13 years.

**[6:59]** Were you thinking you would be able to make it through or were you concerned that

**[7:03]** maybe it would potentially go to zero after that point?

**[7:06]** Yeah, I didn't know. I absolutely, worst case scenario was we had to scale all the way down

**[7:14]** and when you have advice from financial team members, like we had a VP of finance at the time,

**[7:21]** she was like, "Whatever you think you need to cut, you need to double that cut."

**[7:26]** And that's really painful because you're like, "No, no, no, we can do it with this. We'll be

**[7:30]** all right." And she's like, "No, you need to cut deeper." I think we kind of split the difference.

**[7:35]** I don't think we went as deep as she wanted to and we went deeper than we wanted to

**[7:42]** as an executive team. But yeah, it was just a necessary... We had to make the decision or

**[7:50]** yeah, for sure, we could have gone out of business. I mean, in this kind of enterprise

**[7:57]** tech consulting landscape, you've got payment terms, right? Net 45, net 90 in some cases,

**[8:05]** and you got to pay employees right away. So it was a really tricky kind of six-month period

**[8:11]** where we had to manage things very tightly because one miss and a payment that wasn't

**[8:17]** going to come for six months could have plummeted the company.

**[8:22]** Yes, I can definitely empathize with that and it makes growth a little bit riskier and trickier.

**[8:30]** A big question I have is after this, one, what were the moves you started to make?

**[8:37]** But what I'm most curious about, how did you keep the team that stayed motivated? Because I've seen

**[8:43]** this part handled so poorly, so many times. I've been in a company where there had been

**[8:49]** a company they laid off half the team I was still left on, but immediately after that,

**[8:55]** I was looking and I left probably in the next three months.

**[8:58]** Yeah, and you had to deal with the survivor's guilt of being one of the few who did survive.

**[9:06]** That's a difficult place to be in too, but of course you started looking because if there's

**[9:10]** one round, chances are there's going to be another round. Okay, so two parts to that answer. One is

**[9:17]** we made about four very strategic moves that changed the direction of the company. And at

**[9:24]** the same time, we had to be very transparent with the team. So the day of, we brought all

**[9:31]** people in individually, sat them down one-on-one, the layoff happened, and people left the office.

**[9:39]** And then once we were done around mid-morning, we brought everybody in for an all-hands meeting.

**[9:47]** And we took accountability. We said this is our responsibility. We didn't meet it,

**[9:55]** and we're making these cuts because we have to. And we told them we cut as deep as we thought

**[10:02]** we needed to in order to keep the company going and give us a chance to rebound and didn't make

**[10:10]** any false promises because we couldn't guarantee that there weren't going to be future rounds of

**[10:14]** layoffs. We told them we were going to do everything we possibly could. It started with how we carried

**[10:19]** ourselves. There's some level of accountability and confidence of how are we going to get through

**[10:26]** this. And then there's also just showing up and being visible around the team, being not going off

**[10:35]** in a closed door, trying to solve it on your own, but interacting with team members more consistently.

**[10:43]** And yeah, so it was kind of like all of that change management and the way that we had to

**[10:51]** carry ourselves to help the team be inspired and feel at least some level of confidence

**[10:58]** that we're going to get through this. And the way we did get through it was I mentioned there was

### 11:03 — Bet #1: narrow the whole firm to one industry

**[11:03]** about four or so very deliberate changes we made to the company. The first was leading up to this,

**[11:11]** we worked in every industry, financial services, B2B tech, healthcare, consumer retail, like all

**[11:19]** over the place. And it's really hard to become proficient or it was really hard to become like

**[11:26]** a master of something, let alone proficient if you're doing something new every project.

**[11:33]** So we had just finished a project with Jamba Juice and we launched their first online ordering

**[11:40]** and loyalty application. That was one of those just sheer luck type of bluebirds. I met their

**[11:47]** CMO at a conference, we hit it off. She said, "Hey, we're going to do this new app project."

**[11:53]** And nobody had really made the name for themselves in the restaurant industry. So we were invited

**[11:58]** along with all the other usual suspects of agencies that do that kind of work. And thankfully I built

**[12:03]** enough relationship and credibility that I think that kind of won us over. And we won that even

**[12:08]** though we had no experience. And sometimes that's what it takes, right? Like getting lucky and then

**[12:15]** taking a step back and realizing like there might be something more to this, meaning this is one

**[12:20]** client that's investing in digital in an industry that is very legacy, very far behind. At that

**[12:28]** point in 2015, when we did that project for Jamba Juice before the layoff, we were looking around

**[12:36]** the restaurant industry and it was like Starbucks and Domino's were the only companies that had

**[12:40]** invested in digital. Every other restaurant did not have online ordering. They had like

**[12:47]** no real version of a digital loyalty program, no real CRM capabilities. Marketing was very limited

**[12:54]** to just batch and blast. As we looked at it, we were like, "This industry has to catch up.

**[13:01]** They don't have an option." We saw it in like travel and hospitality back in the mid to late

**[13:08]** 2000s, like everybody digitalized. And then we saw it in retail around like 2010, 2012. Everybody

**[13:14]** started shifting to these more elaborate e-commerce experiences. So we just, we looked at it and we

**[13:20]** said, "Okay, they have to make this investment." And we're going to be getting in early. Thankfully,

**[13:26]** we just got some experience on this project and it was a beautiful like application that went to

**[13:31]** market. So it's something we were very proud of, but we made the decision to focus purely on one

**[13:38]** industry. And that wasn't necessarily something that like was an immediate cutoff, but it did

**[13:44]** happen pretty quickly because we shifted all of our marketing efforts towards the restaurant industry.

**[13:50]** We started talking to some of our legacy, like our clients that had been around for a while,

**[13:55]** like within a year, we had kind of passed the torch of our client applied materials to another

**[14:03]** agency. We kind of told them like, "We're not doing this work anymore. We're going to need to

**[14:09]** help you find another agency." And they were fine with that, but that was half a million dollars of

**[14:13]** revenue annually that was going to be off of our books. And this was just after we had done a layoff.

**[14:21]** So not everybody agreed with that decision. We felt like enough confidence and certainty that like

**[14:30]** just this industry has to make investments in digital. Like we've seen it from other industries

**[14:35]** before. And so that was the first move. And that was a pretty big move, especially when

**[14:42]** we put all of our marketing and sales efforts into a new industry that we had one client in.

### 14:48 — Bet #2: only take revenue that can be a going concern

**[14:48]** The second thing we did kind of tied to that was we shifted from working on project-based engagements

**[14:55]** to only engagements that could be a going concern. So with the restaurant industry,

**[15:02]** our new types of work, we're going to be online ordering, CRM, loyalty, revenue driving digital

**[15:08]** experiences and programs, because we figured if it's generating revenue and they can look at their

**[15:15]** costs and the revenue, well, we can help them financially model that this investment with us,

**[15:20]** if they spend a million dollars a year, it's going to generate 30 million in incremental revenue.

**[15:27]** Then we can justify spending 2 million. We can justify spending 5 million a year.

**[15:32]** And they're going to keep investing as long as they see the return on that investment.

**[15:37]** If a brand came to us and said, "Hey, we need you to build this corporate website,"

**[15:42]** we would just not entertain it. We'd pass it immediately. Didn't waste any time despite

**[15:47]** knowing that we needed revenue, but more importantly, we needed the right kind of revenue,

**[15:52]** the kind of revenue that could be stacked and scaled sustainably over time without leading us

**[15:59]** towards another cliff. So that was the second move, was focusing on revenue generating solutions for

### 16:07 — Bet #3: two developers, a code library, and Nom Nom

**[16:07]** our clients. The third thing was, despite not having much capital, we did invest a little bit

**[16:15]** in creating IP. We took two of our full-time developers and we wrote a reference architecture

**[16:25]** code library that was essentially our baseline code that every time a new client came to us,

**[16:32]** we could start with that code, we could deploy it, and then we could spend all of our effort

**[16:38]** for the next six months customizing it for that specific brand. So where is there other alternatives,

**[16:45]** like if we were in an RFP against Deloitte or Accenture, some of the big publicist agencies,

**[16:52]** they would have to start from scratch every time. So their timelines were 12 months, 18 months,

**[16:58]** sometimes longer to do the same kind of work that after we had built this IP, we could do in six

**[17:02]** months consistently. So now we have IP that we invested in, and to my business partner,

**[17:12]** Jesse's credit, who was just like brilliant with this sort of stuff, he structured our contracts

**[17:19]** in a way that when we did time and material services for clients, we would license them,

**[17:27]** our reference architecture, for a one-time perpetual license. So we still owned the core code. They got

**[17:34]** a lifetime license to it. They could do anything they wanted with it, bring it in-house, they just

**[17:38]** couldn't sell it. And then when they paid us time and materials to customize it, to create a more

**[17:45]** bespoke, unique experience for their brand, we actually retained the rights to those customizations.

**[17:52]** So one brand might say, "We need you to integrate with our Salesforce Marketing Cloud." And we'd say,

**[17:58]** "Oh, well, we haven't done that before. That's going to cost X." Or this is where, like we typically

**[18:04]** were more like roadmap modeled. So it wasn't like, "Oh, we'll do that for X amount of dollars." It

**[18:09]** was more of like, "Okay, that'll be our focus for this sprint or this quarter." And once we built it,

**[18:15]** we would take that code and bring it back into our core repository. And so now our IP was expanding

**[18:20]** based on our clients investing in it. So that IP, we called it Nom Nom, which was just for an

**[18:30]** agency. So I think Jesse or somebody came up with the idea. The original logo was like a cookie

**[18:36]** monster kind of character. It was fun. But for me, like running sales marketing at the time,

**[18:48]** I had to figure out how do I sell this? Because it's literally code. It's files of code. Like how

**[18:53]** do I sell this to a marketer? And the way that actually like eventually the rubber met the road

**[19:01]** was in our proposals, right? We would be pitching the same kind of work as other vendors, but we'd

**[19:09]** be pitching it in six months. And we could very clearly rationalize that because we were starting

**[19:15]** with a volume of code that would have taken us six months to write if we started from zero.

**[19:22]** And so then something that felt very hard to sell and very ethereal became very tangible. And

**[19:31]** although Nom Nom's revenue was maybe five, 10% of our revenue at any given time or year,

**[19:38]** because it was a one-time fee, wasn't that substantial, but what Nom Nom did was it allowed

### 19:45 — Bet #4: stop selling the agency, start selling speed

**[19:45]** us to change our sales narrative. And that was kind of like the fourth thing that's kind of

**[19:52]** tied into like go to market. By creating IP, this tied into our new go to market strategy.

**[20:01]** Go to market really started with what is our differentiator? Because in the consulting

**[20:07]** agency space, everybody says the same things. We have the best people. We have great culture.

**[20:14]** We win these awards, best places to work. Look at our processes, our methodologies. I'll show you

**[20:22]** 80 pages of a keynote deck describing our unique methodology when in reality, every agency has the

**[20:31]** same thing and they say the same things. So now we had something that was truly differentiated.

**[20:39]** We had something that nobody else had in the market and it made us faster. So we didn't always

**[20:45]** come in as the cheapest provider. Oftentimes we were about the same price, maybe slightly cheaper,

**[20:51]** but not much, like more cost effective, but like in the same range as like the bigger players.

**[20:57]** But what it did was our one competitive advantage was we had this IP that could help us get you to

**[21:04]** market in six months instead of 12 months or 18 months. So now instead of selling Hathaway,

**[21:11]** instead of selling Nom Nom, we were selling speed to market. So our entire sales narrative changed

**[21:19]** because now instead of saying like, here's our features, here's like what this is going to look

**[21:24]** like. Here's our credentials and our case studies and our processes. Look at us. Now all of a sudden

**[21:32]** our sales narrative completely changed to be fully about the brand and what's happening

**[21:38]** in their industry. So now it would start something like everybody in the restaurant industry has now

**[21:44]** started to invest. Here's all the stats showing the tens of fifties of millions of dollars that

**[21:50]** all the big restaurant chains are investing in digital and technology. Here's your competitors.

**[21:56]** Here's what they're doing. And we kind of had a behind the scenes view. So we knew like,

**[21:59]** okay, this brand is working with this agency and they're investing this and they're going to launch

**[22:04]** here. And so we kind of show them like a maturity model of here's where you are. Here's where your

**[22:11]** next competitors are in their digital maturity kind of path. And so we would create this narrative of

**[22:17]** saying the only thing that matters for your brand right now is that you get something to market

**[22:24]** and then you iterate on it over time. Because if you wait two years to get something live,

**[22:30]** like I'm sure other proposals are coming in at, you're dead in the water. Everything's already

**[22:35]** going to be changed in two years. And so we changed the buyer's criteria around what they

**[22:43]** were looking for in a vendor partner. Like no longer was it about who had the best creative.

**[22:49]** No longer was it about who's the cheapest or who has the best reputation or who has the most case

**[22:55]** studies. Now all of a sudden, all they were thinking was who can get me to market fast enough.

**[23:00]** And we knew by the time we sent them a proposal, we were going to be that person or that company

**[23:06]** because we had nom nom. I think a lot of people underestimate the value of speed and the magnitude

**[23:14]** at which people will pay for speed. And if anybody's thinking about it, you know, how much more do you

**[23:20]** have to spend for DoorDash than going at yourself and getting it, but the speed and convenience

**[23:26]** people will pay a premium for. And even if you price it similar, it's unbelievably more competitive.

**[23:31]** And I think even same exact offer, but if you can focus on that access of value,

**[23:39]** you can be extremely competitive.

**[23:41]** I totally agree. And I appreciate the DoorDash reference since I just spent like 20 minutes

**[23:45]** talking about the restaurant industry. And personally is on food now. So exactly.

**[23:51]** I just had an Instacart delivery for a bottle of shampoo because my cat got into something and I

**[23:56]** have no idea what it is and he's covered and there was no way I was going to be able to get

**[24:00]** to PetSmart today. So like I bought a $15 bottle of shampoo, probably paid $12 in delivery fees,

**[24:08]** but it needed to happen and I wasn't going to be able to do it.

**[24:12]** Yeah. And I think if you find those opportunities where in almost anything times of the essence,

**[24:17]** so I think for most services, products, anything that you're bringing to market

**[24:23]** speed is going to be a big factor. I want to go back. If you don't mind to when you made the

**[24:30]** decision to go into restaurants, one thing I always struggle with. I know a lot of companies

**[24:36]** struggle with is how niche is niche enough? How did you know that it wasn't, oh, just anybody who

**[24:46]** needed to create an online experience for their consumers. And how did you know, oh no, it needs

**[24:53]** to be food service industry that does mainly drinks or has a drive-through or is like quick serve.

**[25:04]** When do you know you're niche enough to be focused, but not too niche to where you're

**[25:09]** cutting out market that you should be going after?

**[25:11]** I don't know if you can ever be too niched because you can always expand later, right?

**[25:15]** Like in 2020, we expanded into the convenience store industry because it was very,

**[25:21]** there's very like, it was very adjacent. A lot of similar use cases, consumer tendencies, right?

**[25:27]** But had we gone into C store and restaurants back in 2016, we would have been spread too thin.

**[25:36]** It's about understanding where you can reach your addressable audience.

**[25:40]** And for us, like we, this is probably the other part of that go-to-market topic. Our go-to-market

**[25:47]** got built around restaurant industry trade shows and conferences and strategic partners.

**[25:54]** So when we started working with Jamba Juice, we had the opportunity to work with this up and coming

### 26:00 — The Olo partnership, Ferraris, and yacht cruises

**[26:00]** tech platform that would later really run the entire restaurant industry. And that company's

**[26:06]** called Olo. Olo is the e-commerce platform and kind of backend for pretty much every like major

**[26:14]** restaurant chain. And at the time they were, you know, kind of early in market and we had helped

**[26:20]** them launch a custom like app experience for Jamba Juice. And, you know, we integrated our

**[26:27]** front end into their backend. And it was one of those things where there was this really

**[26:32]** beautiful natural kind of partnership dynamic that emerged out of it because they were a

**[26:38]** backend provider. We were a front end provider in order for them to win big chains and go up market.

**[26:47]** They needed a great front end provider. And in order for us to win big chains, our front end

**[26:54]** did nothing on its own. It couldn't take a transaction, right? It was just a, you know,

**[27:00]** headless front end and we needed them. And so we could go to market together. And what that would

**[27:08]** look like is we would go to conferences together. We would speak on stage with a client together.

**[27:15]** We would host really unique, like we call them activations, but we'd go to a trade show

**[27:23]** and all the other vendors would be like inviting perspective clients or clients out to like a

**[27:29]** steak dinner or like wine tasting. And it'd be like 30 of these in one night that you could

**[27:35]** potentially go to. So what we did is we started doing some really unique stuff. Like we'd take

**[27:40]** clients and prospects out to a racetrack and go drive Ferraris and Lamborghinis.

**[27:46]** Or we'd put them on a yacht and we'd do like an even a yacht cruise with photographers. And it

**[27:51]** feel like they were at this like really fancy like Hollywood style party. And so we always did these

**[27:58]** things with our partners that like kind of created the brand persona in the industry for us that we

**[28:05]** wanted, right? Like we were edgy. We were kind of, you know, the cool kids in the space. And then

**[28:14]** we would also produce content together. So if we were speaking on stage together, we would have a

**[28:20]** white paper that people could download or we'd print them out and put them on the chairs. We do

**[28:25]** branded swag together. So it was Hathaway plus Olo. And what this allowed us to do was really

**[28:32]** tighten our companies. Our sales reps were tied to the hip with Olo and Salesforce reps. They were

**[28:40]** daily texting about, Hey, did you hear that Burger King's going to do this? Or did you hear that

**[28:46]** Dairy Queen's going to do that? And we were always like communicating to understand the landscape and

**[28:52]** what was happening and making introductions for each other. So it'd be like, okay, Hey, we just

**[28:57]** signed Arby's to do this. Let us introduce you to do that. And it just really brought our teams

**[29:04]** together. And obviously a few like good early wins helped out a lot too. But back to your

**[29:10]** original question of like, how do we know we were niching enough? We got very narrowly focused.

**[29:16]** And then part of the answer to that is, is where do we want to go to get in front of our clients?

**[29:21]** And I had a limited budget. So it was like, I had to make sure it was pointed at the right places.

**[29:27]** And I knew that we would have spread ourselves too thin if we would have been like,

**[29:31]** it would have been easy to say, Oh, we also work in the beverage industry because that's

**[29:35]** kind of related or like I said, convenience or like retail, right? Retail is fairly similar to

**[29:40]** like us are like different backend workflows and stuff, but there's similarities. But then

**[29:46]** I would have had to go to very different events to get in front of my audiences. And I really wanted

**[29:51]** to like double down and make the most impact in one industry, build a reputation, and then we

**[29:58]** could grow into adjacencies from there. I like that as a heuristic of where are the events,

**[30:04]** where are the people going? Okay. Maybe if all of those events, there were some beverage companies

**[30:09]** there and although partnered with them as well, then maybe you keep that in the Venn diagram of

**[30:13]** your universe of what your niche is. But I think lining it up with that marketing budget,

**[30:18]** I think makes a ton of sense because yeah, you're splitting conferences,

**[30:22]** you're not getting the virtuous cycles of your partners, bringing you more deals and doubling

**[30:26]** down. I have a question on the partnerships though, because I've worked in a few companies

**[30:32]** where we've had a tremendous partner motion. One of them, almost half the revenue came through

**[30:38]** partnerships. I also noticed there were quite a bit of challenges managing that, especially with

**[30:46]** channel conflict. If there's deals coming direct, I don't know what the relationship you had with

**[30:50]** Olo was, but were there competitors to Olo where you had to manage who you're going to market within

**[30:56]** a particular deal or how you priced or how you navigated direct deals? Did you have any of those

**[31:02]** channel column conflicts going on? For sure. It's complicated for a lot of reasons. And it gets very

**[31:10]** nuanced with Olo. No, they were like the 1200 pound gorilla in the room. We just aligned with them

**[31:17]** and there wasn't really a lot of competition. There was a little bit, but nobody that was really

**[31:23]** stacking up. But in other like CRM or loyalty platforms, there were, there were two or three

**[31:30]** like big players. Because we were the consultant, after a few years of working in the industry,

**[31:37]** our clients started relying on us, not to just build the tech, but even help them select their

**[31:41]** backend. So we would run RFPs and we would run an RFP and give it to three companies that we had

**[31:48]** partnerships with. Now we never took any sort of commissions or referral fees from any of our

**[31:56]** partners, because in that case, if we were hired by a client, we would go tell all of those partners,

**[32:01]** say, look, our responsibility is to the client, right? We're not playing any games. There's no

**[32:09]** back channel. Like we're running a formal RFP. And if you guys can't handle that, and if you're

**[32:13]** going to like get pissy about it, then you're not going to be part of this. And so we'd get

**[32:18]** hired by a client, we would draft their requirements, we would formalize an RFP, we would put it out,

**[32:26]** we'd review responses, and we'd make a formal recommendation on the back ends that are going

**[32:32]** to sit behind the consumer experience that we were creating. So we had to manage that.

**[32:39]** And there was definitely some people that were kind of pissy about it. But what we found was

**[32:44]** every brand was unique. And with the exception of like Olo and e-commerce, like, you know,

**[32:50]** there are three or four CDPs. And sometimes one of them would be a really good fit for one brand.

**[32:56]** But not a good fit for another. And so we just tried to get very clear on

**[33:00]** what our criteria was and, and help them get the right partner. On one hand, we became really

**[33:06]** important to the vendors to the other partners, because they knew we had a hand in picking who

**[33:12]** was going to get these big brands, because we're talking about huge companies, right? This is like

**[33:16]** Panda Express and Burger King and, you know, like large chain restaurants, these are clients that

**[33:23]** they all wanted. And so it kind of like put us in that position of power. But we also had to like

**[33:30]** play Switzerland and, and kind of appease everybody. For partnership strategy, we would kind of tier

**[33:37]** them, we would say tier one, tier two, tier three, tier one, we go to market together, we make big

**[33:45]** investments and conferences. Tier two, we do like quarterly business reviews, we do account planning,

**[33:51]** our sales teams are close, but we don't make a lot of investments. And then tier three was just kind

**[33:56]** of like utility tools that like, it'd be nice to throw that in. This would be a helpful tool,

**[34:01]** but it's not really a strategic enough platform to be considered for tier one or tier two. And so we

**[34:08]** always thought about it like that too. And we do quarterly business reviews with tier one and tier

**[34:13]** two. Yeah, you know, we were very closely tied together. We had, we eventually hired a strategic

**[34:19]** like alliances director to help oversee all of this. Well, and I think it tees up so many things

**[34:27]** when you can run a partner channel really well. I am curious because this is similar business I'm

**[34:34]** building over here at LeanScale. What I'm hearing too is a lot of complexity on building the team

**[34:43]** and the promises that you're making in delivery. I mean, I'm assuming you recruited certain people

**[34:48]** that have certain skillsets, then you're graduating into things like running strategic RFPs for your

**[34:53]** clients and doing different things, working through partners. I would love to hear what was

**[34:59]** the talent management strategy, the recruitment strategy. How did you, cause this isn't really

**[35:06]** that long of a timeframe. And I'm hearing a lot of change on the delivery side that had to take place

**[35:14]** in a pretty short period of time. How did you manage that? And I want to clarify,

**[35:20]** this whole run was bootstrapped, correct? Correct. Yeah, we never took any funding.

**[35:24]** So you didn't really have much room for error to say, okay, well, let's raise a little bit. Let's

**[35:28]** throw a bunch of enablement people in here and spend over there and let's recruit ahead of the

**[35:33]** curve of demand and just make sure we have people ready to do all this real time. We had to figure

**[35:38]** it out, right? Jesse and I started right out of college. We didn't go off and work at an agency

**[35:44]** or consulting firm for a handful of years and then go decide to do this. We had no idea what

**[35:49]** we were doing when we started like nothing. Uh, and we had certainly had a lot of misses early on

**[35:56]** that were just like our first big agency pitch was with Taylor made golf. It was a freaking disaster.

**[36:03]** Like I don't even know how we got into it. They're like director of marketing found us online. The

**[36:09]** nicest guy ever. I had a phone call with him. I had no idea what he was talking about, but we

**[36:15]** got us into the room. We showed up. They're expecting us to do like a traditional capabilities

**[36:20]** presentation. We don't have that. We didn't even know that was a thing. Um, they asked us if we,

**[36:25]** if we have any questions for them, didn't come prepared. It was like the worst experience ever.

**[36:33]** So, you know, we, we had to like figure it out and we hired consultants and we hired executive

**[36:38]** coaches. And eventually when we could afford it, we would hire from other agencies and other

**[36:43]** consultancies and then like learn as much as we possibly could from people who have actually

**[36:48]** done it in a like proper place. Um, but yeah, like it's a really complicated business.

**[36:56]** And there were so many times that Jesse and I were like, why did we choose this? Why? Like

**[37:02]** what masochistic tendencies were like, what were you thinking? Cause it's one thing to

### 37:11 — Utilization, fungible teams, and five years of forecast data

**[37:11]** bring in the revenue. It's another to deliver on it. And then it's another to line up your like

**[37:19]** demand and your supply so perfectly that you don't have people sitting on the bench or you don't have

**[37:25]** two little people that you can't deliver on the work. It's a constant, like looking at how does

**[37:33]** our pipeline play out? If we close everything that's in 80%, if we close everything that's in 50%,

**[37:39]** by the end of 2021, when we were acquired our sales, like conversion rates were like 80%,

**[37:48]** like crazy for this industry. And so we were very strict about managing our salesforce instance.

**[37:57]** And for the first couple of years, that didn't really help us. But after like five years of data,

**[38:03]** we got really good at forecasting and we could look at our pipeline and know pretty well how much

**[38:11]** demand we had and then how much supply of resources, but it was constantly a juggling exercise of

**[38:18]** like, how do we hit? Cause the number one metric in this kind of business is utilization. Are your

**[38:24]** teams utilizing? Everything flows from there. Like if, if you have high utilization, you probably got

**[38:31]** good like profit EBITDA downstream. That was the one thing that I was always looking at was,

**[38:38]** is our utilization like at the target or above? And it was a constant effort.

**[38:44]** And yeah, it was just, it was like very tricky. One of the things that helped with that was

**[38:51]** building our own IP. When we had a reference architecture and code libraries that we would

**[38:57]** literally start with every project or every engagement. And we'd start with that. And then

**[39:03]** we'd custom customize it for each brand. Now, all of a sudden our teams were only working in one

**[39:09]** industry. They were working on one core code base and writing custom code constantly, like from

**[39:15]** there, new integrations all the time. There was tons of complicated stuff we were doing,

**[39:21]** but at least there was a foundation. So now all of a sudden our team members became much more

**[39:25]** fungible and we would staff core teams per client. So there'd probably be 12 people working on a

**[39:33]** client team. Well, if they had a slow week, because a client was slow on a review cycle,

**[39:40]** we could transition people off, get them billable on another account. And so that fungibility of

**[39:47]** having consistent industries, consistent platforms, consistent, you know, like strategic partners.

**[39:55]** Now all of a sudden everything was a lot more fungible and we could really push on hitting

**[39:59]** utilization targets. It makes a ton of sense. I'm over here taking notes. I think LeanScale

**[40:07]** or Focus, B2B, SaaS and AI, all VC backed or growth equity backed. So very similar things,

**[40:14]** similar tech stack at Salesforce HubSpot, Clay, Gong. And I have noticed that, but there are some,

**[40:22]** I have a lot of questions sometimes. I'm like, are we niche enough? Should it be like B2B SaaS,

**[40:26]** maybe a particular industry? Should we stay with a certain firm a graphic where like, wait till

**[40:31]** they're scaled out to a certain point? We're taking on two people too early, too late. And I think

**[40:35]** all of it comes down to that, that calculus is extremely hard. And I had the benefit before

**[40:43]** starting Lean Scale. I ran RevOps for three companies. So I did forecasting. I ran the

**[40:48]** sales forecast. I knew in theory how to do it. This is like the most advanced forecasting needed

**[40:55]** because if you miss it, then all the wheels fall off. So you have to be tight on both sides.

**[41:02]** Absolutely. Right. And that's where like dialed pipeline forecasting, tying into your operations

**[41:11]** and all the levels of detail that you go down to like, how long does it take to hire a new employee?

**[41:16]** How long does it take to onboard them? At what point are they actually up to speed enough to

**[41:20]** put them on a billable client engagement? So we're constantly looking at the forecast of

**[41:26]** what happens if we close 80% of our deals? What happens if we only close 50% of our deals? How

**[41:31]** quickly can we spend teams up? And thankfully we had really strong client retention, again,

**[41:37]** because we had IP and we did good work, but that meant we could always be kind of looking at adding

**[41:44]** instead of backfilling because clients weren't going away and I didn't have to like backfill new

**[41:49]** clients to do that work, to like to staff that team on. So for like 2018 to end of 2021,

**[41:59]** it was just constant growth. We went from in that year where we did 8 million in 2015,

**[42:07]** dropped down to 6 million, then we got it back up to like 8 million and then we finally broke 10

**[42:15]** and then it was like 15, 22, 20, and 42. And so it was just like, you know, that's like going from

**[42:23]** 30 people at the bottom to 250 in five years. And you know, there's like big tech companies

**[42:30]** that go grow a lot faster than that. But as you mentioned earlier, we were bootstrapped

**[42:34]** and this was a, you know, time and materials style agency. So any, you know, every 25 grand a month

**[42:41]** and new revenue was a new head count. Well, and also yes, those tech companies run up, but they

**[42:49]** also, when they bring on that level of investment, like the founder equity, you can see these

**[42:55]** companies like, Oh, we're valued at a billion dollars as same as like, Oh, we did like a

**[42:59]** $50 million exit. Like the founder equivalent can be really similar. Oh, absolutely. I mean,

**[43:05]** you see stories where founders end up getting nothing, right? Like I saw the founders of

**[43:10]** Fandool, right? Like billion dollar valuation exit founders walk away with nothing because

**[43:17]** of where they're at in the waterfall and preference treatments and how much they fundraise. And like,

**[43:21]** you know, you have to be wary of taking these massive valuations because then you got to get

**[43:26]** a bigger valuation next time. And sometimes that doesn't always happen. And as a founder,

**[43:30]** if you're diluted too much, like you get very little. And so thankfully, like we never took

**[43:37]** any funding. We just bootstrapped it and grinded it out. And so when we sold, you know, our team

**[43:43]** was able to participate in that payout because, you know, we set aside a portion of our ownership

**[43:50]** that Jesse and I had, because it was just the two of us who own the company, but we put aside a

**[43:55]** portion and everybody has, you know, a type of stock options. And so when we sold, we had

**[44:03]** engineers who weren't even like managers, but they had been with us for so long that, you know,

**[44:10]** they had enough money to buy a house and it was like a life changing thing, right? Like

**[44:14]** these are people who, you know, they're not directors or executives, but they, you know,

**[44:19]** worked really hard and they've been with us for a long time. And overnight, like their entire life

**[44:24]** changed. Well, I had a life changing exit. I was one of those employees in a company. I still have

**[44:31]** the deal trophy right here from it too. And it was, yeah, in that realm of like enough to buy a house,

**[44:38]** enough to like not have stress, take some bigger bets on your career, take some bigger bets. I

**[44:43]** don't know if I would have had the confidence to go start something on my own without having that,

**[44:51]** especially like having my family and everything going on at the same time. So it's huge. And we

**[44:56]** absolutely did the same thing here at Lean Scale because I was like, that was so important to me.

**[44:59]** I also feel like I put in more effort knowing like, Hey, I'm yeah, I'm an owner too. Like I,

**[45:05]** if, if this pays off, um, I'm going to benefit as well. I, I would love, I would love to kind of

### 45:13 — The run-up to the exit and the fundless sponsor

**[45:13]** hear the run up to the exit. I think a lot of people have that as the end goal. A lot of people

**[45:21]** have that on their mind. I know it's not super linear, like ABC get here, but are there certain

**[45:27]** things that you did or certain dynamics that were at play that made that possible? And what advice

**[45:35]** would you give to anybody kind of going through a similar run? Yeah. Uh, running a process to sell

**[45:41]** your company is a second job. So expect to be working two full-time jobs during that time.

**[45:48]** It's a lot, it's a lot of work. Um, we actually started in 20, 2019, entertaining a acquisition

**[45:59]** and it was something that we got connected with somebody. He was putting together like a rollup

**[46:05]** strategy. Um, he was what's called a fundless sponsor, meaning that he was putting together

**[46:10]** the deal and then he had some private equity firms that were going to essentially invest in the

**[46:15]** deal of multiple companies that got complicated. It got further complicated because COVID happened.

**[46:24]** And as we were close to selling the company, we were in New York, we were doing meetings.

**[46:30]** We were in New York like three days before meeting with private equity firms before the entire,

**[46:37]** like the country just shut down. It was like, you know, the first week of March in 2020,

**[46:43]** I was flying back from New York and like noticing people were kind of sick and hearing about this

**[46:48]** thing called COVID and then like three days later, New York is shut down. So COVID happened

**[46:56]** and they were like, Oh, we don't know what's going to happen with this COVID thing. Like,

**[47:01]** let's just like tap the brakes here. I didn't know what was going to happen with this COVID thing

**[47:06]** because all of our restaurants were mandated to shut their doors. I didn't know, like, does that

**[47:14]** mean Burger King goes out of business and they have to fire us? Thankfully, that's not the way

### 47:20 — COVID shuts the restaurants and becomes a tailwind

**[47:20]** it turned out. And, um, what actually happened was is we became the lifeblood of all of our clients.

**[47:29]** They had to shut their doors, but the only way that they could keep getting sales and revenue

**[47:34]** was through online ordering. And they had to do it in new ways. Nobody was doing curbside pickup.

**[47:41]** Nobody was doing cashless payments. Nobody was doing all the things that you needed to have done,

**[47:47]** let alone did they have the foundation to actually add those features. So most, there was a run

**[47:53]** on the kind of work that we did both from our current clients and new clients. And like

**[48:00]** in April, after like in the very beginning of COVID, like we had one brand come in

**[48:06]** and we signed a multimillion dollar deal in five business days that normally would have taken six

**[48:12]** months because of COVID. They were like, we were behind. We want to do all these things to support

**[48:20]** our guests during COVID. We can't because we're on this like templated out of the box solution

**[48:27]** that we literally don't know the code to. We can't do anything with it. So like we need you

**[48:31]** to get us to market as quickly as possible. So COVID actually like was a boon for us.

**[48:38]** And when these brands were shedding vendors left and right, we were the one vendor that was left

**[48:45]** because we were the only one that was actually bringing sales in their virtual doors. This

**[48:51]** company that was going to acquire us, tap the brakes, and they eventually circled back around

**[48:54]** when they saw like, Oh, this is actually going really well for you. We're like, yeah, it is like

**[48:58]** you're going to need to increase that price. That's right. And so they did a few times.

**[49:04]** And at the end of 2020, we almost consummated an acquisition, but in the

**[49:14]** like, I mean, it's hard to even say 12th hour because it was like literally the night before

**[49:19]** it was like December 22nd. And we were supposed to sign the definitive paperwork on December 23rd.

**[49:25]** The deal fell through. And what had happened was is midway through the deal, they brought in a new

**[49:31]** like managing partner who took over the deal. And he was really just like cutting like, you know,

**[49:39]** terms of the contract that would cut a hundred grand here, half a million here. Oh, they're

**[49:45]** going to get to keep cash reserves of 2 million. We're like, Oh, like that's not how this works.

**[49:50]** Like we had to keep the cash reserves. So then we had to go back to the company because we had

**[49:55]** been pretty transparent that we're like entertaining offers and we're exploring different

**[49:58]** possibilities. And we were expecting to announce it at our holiday party, which was supposed to be

**[50:06]** in the beginning of December and then kept getting pushed and pushed and pushed. And so then like,

**[50:12]** this was virtual, right? Our holiday party was virtual during COVID. So our holiday party's like,

**[50:17]** you know, the 23rd, we're supposed to announce this deal fell through the night before.

**[50:23]** And we're like, well, what do we do now? Like, so again, we had to kind of regroup. And thankfully,

### 50:30 — Canaccord, 50 companies, and 3–4x the price

**[50:34]** Jesse was smart enough to say, okay, we're going to do it again, but we're going to do it with a

**[50:37]** banking partner. And we went out and hired Canikor Genuity and they're the best in the business. And

**[50:44]** they took us through a 12 month process. And in that 12 months, we met with 50 different company.

**[50:49]** We put together our SIM. We met with 50 different companies. We narrowed the pool. They helped us

**[50:54]** find the right partner for us. And eventually they got us acquired for three to four times more than

**[51:04]** what we were about to sign a deal for less than 12 months earlier. Wow. That's incredible. That's

**[51:13]** incredible. That's a lot more than your initial question. Oh, I assumed it was a story. I didn't

**[51:18]** think it just happened overnight. And no, those are some of the details. I also love how some

**[51:25]** things on the surface that look like they're going to be negative or challenges end up being massive

**[51:30]** opportunities. Like that deal, not getting signed COVID happening and like, Oh, looks bad on the

**[51:36]** surface, but it ends up being a massive tailwind. Well, you had such an amazing run and it's very

**[51:47]** impressive to be doing this right out of school. Like, like you said, Hey, you didn't even work at

**[51:52]** any other business or agency or anything before. And to be able to bring it all the way over the

**[51:57]** finish line like that. I know at the same time, these are very challenging things to do as you're

### 52:03 — Robot mode

**[52:03]** building a family. And how do you juxtapose the career with what was happening at home?

**[52:13]** And is there anything you think you could have done different to where you could have

**[52:18]** saved both? Yeah, it's a great question. Somebody actually asked me recently and before I answer

**[52:24]** that, I'll kind of share what was happening with me personally, because as you can surmise with all

**[52:29]** of the changes in growth in the company, like there was a lot of pressure. It was a lot of stress.

**[52:33]** Like one day I'd be dealing with a client who's maybe threatening to, you know, terminate a

**[52:38]** contract, or I'd be dealing with a client who, um, you know, wants to increase their velocity

**[52:44]** and we don't have the staff for it or like, you know, there's always the day to day stuff,

**[52:49]** but it was always very stressful. Well, at the same time, personally, at the beginning of 2020,

**[52:55]** before COVID happened, I had to make the difficult decision in my personal life to file for divorce

**[53:02]** because my ex wife was struggling with alcoholism. And she had just given birth to my second son,

**[53:09]** a few weeks prior. And then unfortunately, she kind of fell back into her alcoholism. And so

**[53:18]** for safety reasons, I had to take my kids and I had to, uh, basically leave the house and move

**[53:24]** in with my parents for a little while. And, you know, I overnight became a single solo full-time

**[53:32]** father of a three and a half year old and a three week old. So I've got work stress. I've got the

**[53:39]** responsibility of now solely taking care of these kids. Um, and then yeah, like two months later,

**[53:45]** COVID happens. So it's like the pressure of the world. I felt like the pressure of the world was

**[53:49]** on me and there certainly was a lot of pressure and the way that I dealt with that personally,

**[53:56]** I don't recommend this, but the way that I dealt with that personally was I just disconnected

**[54:02]** from everything emotionally, just completely shoved everything down, disconnected from myself

**[54:09]** emotionally, which in turn has consequences. Like if you're disconnected from yourself,

**[54:15]** it's kind of hard to be connected with your kids or your friends or your colleagues. So I was very

**[54:19]** like robotic. And that's what I refer to as robot mode, where I was performing at the highest level,

**[54:27]** crushing it productivity wise, but then I was completely disconnected from all of the emotions

**[54:33]** that, you know, make this experience of life worth living. Um, so I was in robot mode for a while

**[54:41]** until I started to realize that like, I could see behavioral stuff with my kids. I could see

**[54:48]** the gap growing. Like as I was getting closer to the finish line in my career,

**[54:54]** the gap between me and my kids was growing. And I just, a number of things happened that I knew

**[55:00]** like I had to make a big change, um, because I was effectively sacrificing my kids for my career

**[55:08]** success. Um, and you know, a lot of things needed to happen for that to change. And that's kind of

**[55:16]** what I'm much more intentional about today. And that's, you know, where I've started my own

**[55:20]** podcast, CEOs and ABCs to talk about that, like very specific topic of like, how do we grow in

**[55:26]** our careers and still show up at home and still have energy, like still have gas in the tank to,

**[55:32]** you know, be there for our kids, be present, be intentional. Um, you know, like family is

**[55:40]** another organization, probably the most important organization in your life. And, um,

**[55:46]** so I had to figure out like, how can I take all these leadership skills that I've been building

**[55:50]** for 15 years? How can I apply them to being a better parent? Because parenting didn't really

**[55:55]** come naturally for me. And, um, once I started doing that and I started looking at like,

**[56:01]** all right, how do I do performance reviews with an employee? Now, how can I translate that in a

**[56:06]** very caring, loving and nuanced way to, you know, working with my kids? How do I build systems at

**[56:14]** work? And how can I apply that at home? Not making my kids, my employees, because that wasn't the

**[56:21]** intention. The intention was to just use what I knew, the language, the frameworks, and apply it

**[56:26]** in an area that just didn't come naturally, naturally to me. And that's where I started

**[56:32]** to show up better. And that's where I started to become, I believe, a better father and leader at

**[56:38]** work. Do you think going back, there would have been ways to have it all, or do you think you

### 56:48 — Would you have worked less? No.

**[56:48]** would have had to give up some career opportunities in order to make that investment? I think a lot

**[56:55]** of people see this as a zero sums game or were there ways you could have balanced both? Yeah.

**[57:02]** So I should have answered your question earlier, right? Would I have done anything differently?

**[57:06]** I was at a conference, uh, maybe eight months ago and somebody who was, uh, you know, building a

**[57:11]** company had young kids asked me the same question. And after thinking about it, no, I wouldn't have

**[57:20]** worked any less hard. I was working 12, 14 hour days. I was working my ass off. Um, what I would

**[57:29]** have done differently is in the time I had with my kids, I would have been more intentional about it,

**[57:35]** meaning I would have thought through how am I going to spend my time with my kids? You know,

**[57:39]** what are we going to do today that builds connection that teaches them values feels meaningful,

**[57:46]** right? Instead of just kind of coming home and just being default dad. Um, and the second

**[57:52]** thing is I would have been more present. I was still reading the bedtime stories every

**[57:56]** night. I was cooking and breakfast. I was making dinner, right? Like I was physically there,

**[58:01]** but I was not emotionally or mentally present. So that's the second thing is, you know, if I

**[58:07]** could have gone back or if I could, I would, I would have been more present in the moment.

**[58:11]** Like I would have actually been there reading those bedtime stories instead of thinking about

**[58:16]** my next sales pitch or leadership meeting. Um, and I think those two things, like more

**[58:22]** intentionality and more presence, that's really the answer. It's not work-life balance. We're

**[58:30]** not going to have work-life balance. If you are somebody that's ambitious and wants to build a

**[58:34]** company or wants to be in the C-suite at a fortune 500 company, you don't get eight hours

**[58:40]** for work in eight hours with your kids. You're, you're not going to be, you're not going to

**[58:44]** achieve what you want to achieve if you have big goals. Um, but what you can do is if you're

**[58:50]** working 12 hours and then you've got, you know, two or three hours with your kids,

**[58:56]** make sure you think about how you're going to spend that time.

**[59:00]** Right? Like you wouldn't go into a work week without having everything planned down to 30

**[59:05]** minutes color-coded calendars, right? But I came home every day drained from work in decision

**[59:12]** fatigue, not wanting to make another damn decision. Cause I was just totally drained from making too

**[59:18]** many in one day. And then I wouldn't, I just, you know, just kind of be, I just exist and just kind

**[59:25]** of like go around the house with the kids interact, but no real intention, no real plan. And so,

**[59:32]** you know, now like when I'm with my kids, like I've got a pretty good plan going into the week

**[59:37]** of like how we're going to spend our time together. I've got certain themes that I'm working on,

**[59:42]** whether it's like there was a period where I was working on just like

**[59:49]** brotherly connection between my two oldest boys, cause they were fighting a lot. And,

**[59:54]** and right now I'm kind of more focused on like resilience and grit. Um, and so just thinking

**[1:00:00]** about how to like, you know, disciple my kids and teach them and help them inherit values that

**[1:00:09]** I think are important. So there's just a lot of forethought that goes into it. And then obviously

**[1:00:14]** when you are in those moments, being fully present. Do you think it was simply just a

**[1:00:21]** choice to be present or were there things that you needed to do for yourself that gave you the

**[1:00:27]** capacity and energy to be present? It starts with a choice and then it's finding ways to not have to

**[1:00:34]** rely on discipline. I'll give you an example, right? It's like putting systems in place that

**[1:00:41]** become a forcing function so that you don't have to like always remember or be disciplined about it.

**[1:00:48]** Right. So in order to transition from business mode or over to family mode, like I would purposely

**[1:00:58]** bring a change of clothes change at the office. And then I was changing from like, you know,

**[1:01:04]** semi-formal business attire, my, you know, president mode, and then putting on casual

**[1:01:10]** clothes and going home to be in parent mode. And then as I walked in the door, like, you know,

**[1:01:17]** my oldest son and I have a secret handshake that we do. And that's our reconnection ritual. And

**[1:01:23]** after a long day at school and for me a long day at work, it's like, this is how we reconnect.

**[1:01:28]** And then, you know, there's certain things like put the phone away. You're never going to be

**[1:01:33]** present if your phone is in your pocket and you're getting Slack messages and emails and

**[1:01:37]** text messages. So you just got to put that thing away. It's just full stop. And so yeah,

**[1:01:44]** it's building in like systems just like you would in your career. You know, if you hate cold calling,

**[1:01:49]** you got to figure out a way to make sure you cold call. And that might be, you know, doing it with

**[1:01:54]** a buddy or it might be bookending it with things that you do want to do, or it might be like

**[1:02:00]** having somebody hold you accountable and making sure that you're doing it. It's the same thing

**[1:02:05]** at home. It's like having systems, rituals, routines, just little like tools that force you

**[1:02:12]** to not have to rely on discipline. Well, personally, as a father of three,

### 01:02:22 — Wrap

**[1:02:22]** of two girls, a boy, I have another boy on the way in a couple of months, also building a business

**[1:02:30]** and scaling and dealing with everything that comes with running this type of company as well.

**[1:02:35]** There's just pressure on all sides. I really, really appreciate you going deep on that topic.

**[1:02:41]** And also I'm happy I have someone to bounce ideas off of and empathize with what we're

**[1:02:47]** going through because it's a very, very challenging combination of things all happening at once.

**[1:02:52]** And I just really appreciate everything you shared going through how you built the business,

**[1:02:59]** the authenticity through the struggles that you had, the decisions and bets you made during that

**[1:03:05]** pivot, I think required a lot of bravery. And I love that it worked out and you had a successful

**[1:03:15]** exit through it all and then created the time to be intentional for your family. So Kevin, I just

**[1:03:21]** big fan of what you've done and what you're doing. And I appreciate so much

**[1:03:26]** that you're on our podcast. Thank you so much for having me. I really enjoyed it.

**[1:03:32]** At this point, I just hope that the message resonated with somebody and helps them grow

**[1:03:41]** in their careers, grow their business and still show up at home for their families. I'm sure it will.


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