Episode 423 - Todd Westra / Stijn Hendrikse

00:26 Hey, welcome back to the show. And I am so excited to turn the time over to Stijn because he is talking about all the stuff I love to talk about. Stein, will you tell us who you are and what problem do you solve with your business?

00:40 Todd, thanks for having me. I'm really cool to have this conversation with someone who's so like-minded

00:50 Yes, for sure.

00:51 about the problems that we've talked about a lot, right? How small companies have big problems and they don't always have the access to the resources people have done it before, or even the playbooks that they would then use to do things at the speed that you need to go after. And growing, for example, a B2B SaaS company, which is really where I focused. Yeah, a little background. I was at Microsoft the first half of my career, running a couple of global teams and then...

01:19 That's a pretty big SaaS company.

01:20 Yeah, my last job actually was the launch of Office 365 for the SMB market, which you could argue is the largest B2B SaaS product. I don't know exactly, depends on how you measure it, but it's pretty big. Yeah. And then, you know, started a couple of companies with the CEO at a couple and then found out that what you need to do to get from zero to 10 million, so that kind of stage was mostly, 90% was the same, right, the same playbook. So yeah, the last couple of years turned that into more of a scalable format to help other companies do that.

01:54 I love it. So zero to 10 million is your focus and you wanna get them to where? Like where's the capacity? Where can you take them with your framework?

02:05 Yeah, when I wrote T2D3, the book, it was basically clear for most founders and CEOs how to get to product market fit. Not easy, but relatively clear. You have to have a certain amount of customers that pay you, that stay, that seem to like your product and are willing to tell others about it. That's kind of the definition of product market fit. But when you go beyond that, you find a lot of companies that can get to two, three, four million maybe. by that part of the journey, but they've only usually succeeded in one demand gen channel. They are really good at organic search or they found one partnership that drives most of their funnel, right? But to get to 10, 20, 30 million, to do what's called T2D3 accelerated growth, now you have to kind of multitask. You have to diversify that demand gen channel. You have to get more channels. You have to keep your customers, right? You have to start paying attention to churn and monetizing those customers, growing your ACV. And of course, just optimizing things like conversion rate. So there's all these things that now have to happen in parallel. You have to start thinking about real product marketing, think about packaging and pricing. All these things that you may not have to have done to get the product market fit. But now you have to do that. And especially when you are most founders are either subject matter experts, the dentist who built a dental CRM software company or they're engineers who found a problem they're passionate about, they build a solution for it. But they're very seldomly go to market executives, right? So both marketing and sales and customers, those are all new disciplines, let alone things like product marketing.

03:43 Yeah, Right, you know, the way I always look at it is when you're sub four million, generally, your company is made up of a lot of generalists. You've got a lot of people who are like, hey man, I'm with you, we're gonna take this thing and we're gonna go huge with it, and they may be good at a little bit of marketing, they may be good at some sales, they may be good at some product even, but they're not really good at any of them, right? And one of the big differences is taking that business to a growth mode into that eight digit mark, you've got to be hiring specialists. How do you help people kind of see this problem of, that there is a different model in that zero to three or four into that four to 10, into that 10 to 30, what do you do to help them kind of see that?

04:29 Yeah, you're touching on the biggest Achilles heel, I guess, of an early stage company. These things are harder to do when you're small and they're more important to do well. You are at this stage, you're making or breaking your company or scale or fail. You're at these pivotal moments and then getting your go-to-market strategy wrong, getting your positioning wrong, picking the wrong ICP or an ICP that's too large, too ill-defined right out of the market that's too large. Well, just dilute your research, dilute your time, and in the end lead to less focused execution, leading to less good results. So yeah, I think most founders, when I meet them in their journey, they've already hit their head against one of these walls. So the convincing part, I don't think, the convincing, they're problem aware. I don't think there's a lot of awareness building that you have to do, but you have to come thought with a tangible kind of, come with a plan, like, like a trusted guide, I think is the term that we often use. You have to bring a plan. You have to bring empathy to where they came from, right? And understand that it's not easy to get to three, four million. They must have a product that's really good, right? They found some customers who really like it. So that's very valuable. So you cannot dismiss that, but you also have to be really real about, hey, these are all the challenges that you've probably run into already. You've hired someone, maybe a marketing leader that was too expensive, that you really couldn't afford, or someone who you hoped would figure it out, but they couldn't, they took it really for the first time. So you've hit your head against it. Well, and now. I think when you or I come in, thought we need to come with a plan. We need to kind of say, hey, we'll take you by the hand. We know you want to go up the mountain, right? This is where Basecamp one and two and three will be. These are the tools we need to bring. And instill some of that confidence that there is a path and the path is not that complicated. Right? We both have our playbooks, right? Because most of these companies, when they're not a hundred million ARR, they need kind of the same things.

06:22 Yeah, you're exactly right. And it's funny how casually you say that because for those of you listening, I want you to understand something here. Stein and I got a little bit nerdy here before our call and he was showing me his workflow of these simple things that we were just referring to that everyone has in common. There's like a thousand lines in his checklist of things that you need to have in place in order to do these simple things that we just talked about. So, Yes, it is simple and it is consistent. Actually, it's very consistent, but it's not easy to figure out without hitting your head a lot of times. So what do you do? What's your engagement look like and how do you actually help these founders with that solution?

07:06 Yeah, thanks for pointing to the thousand lines of things you could do. You don't need to do all of them, right? There are things on there like building your first presentation for a Gartner analyst call, right? Or figuring out what is the difference between software advising and captera. And these are the specific things that not every company will hit. Not all of them have to go figure out how to get into a magic quadrant, right? Not all of them do even paid search, right? So why would you even think about, or pay per click or pay per lead, whatever model you. So maybe you don't need to cut. 

07:37 They probably should.

07:41 Depends totally on where you are in your journey, what expertise you already have on the team. So the point is that out of those thousand lines, which can become extremely overwhelming, figuring out which tend to start with, right? And, and to not, and not like, for example, launch paid search ads, unless you actually are able to build decent landing pace, you have good tracking, that you're able to do AB testing. There's also these dependencies, I think, that are important. And once you kind of get a founder owner and maybe their first one or two marketing hires to open up and be vulnerable about, hey, we don't necessarily know all these things, then it is not that hard to kind of look at this list of all these things you could do and check the ones that are in good shape and see which other ones are really important and which ones can be puned for later It's also fun.

08:26 Totally. And some of them can be punted and it's okay to punt some things. But to your point, there are dependencies for a lot of those line items that need to be dependent on something that does have to happen. What would you say, you know, typically when you find someone in say a, a one to $3 million range, what are some typical problems you see in their structure or in their, what got them there? that they need to fix before they can jump into that, that six to seven.

08:58 I think the nuts and bolts are really understanding what your ideal customer profile is, right? And go from total addressable market to what part of the market can you service, right? The SAM that most of us know that you need to do that. But I really always make sure that they also go to the third level, the SOM, right? Not only what part of the market can you service, but what is obtainable, right? You have limited time, limited resources. So even if there's a large opportunity in a market that you can technically service with your customer, your product is able to do what these customers need. That doesn't mean you have enough time to go do all the marketing and cover all the different type of campaigns that you would need to do. So being extremely focused on your ICP, then answering the question, what's it for, right? The positioning, the value prop question in a way that makes you, I use a framework called best better only, which forces you to not only talk about the things you're good at, you're great at, the things you're maybe better at than your competition. But what are the things that really only you can do? Right. And unless you're able to answer that, maybe your niche is not small enough. Maybe you have to niche even further down to say, I'm the only one who has a CRM system that is blah, blah compliant, that is focused on the dental industry and that I can do in Chinese, right. Just making this up, right. But, but make your niche so small that you're, you're clearly going to be in the top one or two providers and then win that nation, then you can expand. Right. So those are the two first things that I would say. And the third is in that list of thousand things, there are some things that are non-negotiable, right? You need to register your trademarks and it's, it's five minutes to do it. Right. But if you, if you forget it, it can be costly to do that later down the line. Right. Just like it's important early on to have the right tracking on your website. So you can do something with the data later. Right. And. Yeah.

10:48 captainscouncil.com

12:27 Yeah. Oh, you know, that's probably the biggest mind blown thing for me, Syne, is the number of companies I've gone into and seen that they have literally no tracking. They don't know how many people come to their site. They don't know how many people click that button. They don't know who downloads their PDF. It blows my mind. And yet, they need to have those things in place so that they can make smart decisions about what to do. Database decisions, not just emotion. That right?

12:54 Yeah. And then they end up buying a list here and there because they get an email, right? Or they start buying Google clicks, but they don't know really if their landing page is able to convert them and if they don't convert where they go, right? It's a lot of waste that is not that hard to solve.

13:10 Totally. It's a lot of waste. All right, so now let's take a step back. We know who you help, why you help them, all that good stuff. Tell us about your business journey, because this business, I know you've got a couple of businesses, you've got a book, you've got training, you've got consulting, like walk us through your growth journey and how do those all work together to service the client type that you are trying to help?

13:35 Yeah, my passion was at Microsoft. I had the huge opportunity to help with a lot of MBA recruiting. And I loved when I saw relatively young people kind of make that huge sort of progress in their career early and in my case in the marketing and sort of a product field, and I thought by myself when I saw smaller SaaS companies not being able to have access to the right talent and they didn't need a 45 year old CMO with 10 year experience, they needed a 35 year old with the right playbook, with the right kind of, these are the 20 things we need to do and not necessarily a huge amount of additional baggage. And so I thought, hey, if I can combine my expertise with finding people that are a little earlier in their career who can learn the playbook and that's kind of, that was the first reason to write it up, right, and then to start turning it into educational content and masterclass and then at some point we founded Kulungi, an agency where you can go kind of outsource this problem. So you can either do it yourself, read the book, do some of the education and, or then let Columny do it. And what I really enjoy, Todd, is that in this stage of like 1 million to 10, 15 million ARR, all these companies we work with, you can tell whether we, we help them or not, right? They will scale or fail, right? It's the make or break part of their journey. Remember when I was at Microsoft for a large part of my career, I think the work that I did was relevant, but it probably would have happened without me. Right. So it's a little harder to really say, Hey, this was because of, you know.

15:07 I don't know, I think Microsoft 365 probably would not have worked without you.

15:09  There's so many people who helped, right? And now when you're doing this work that we do with the smaller companies, you're far more pivotal, right? In that success.

15:17 Yeah, that's so true, so true. I love it, and that's a great why, and that's a great thing that you've been able to do. Now, I love the fact that you have both kind of a DIY blueprint of these are things you've gotta do, and then you have the done for you service as well. Which one came first, and what kind of drove you to build the other one once you had the first one done?

15:42 I actually don't know. So one of the things also that I think I recommend to every founder is that they start early with really good content marketing that starts with you as the founder. You're the only one who can really answer the question what your audience is looking for and you're the only one who can put that in a good piece of content. So that's what I did. So when I started my first fractional executive and fractional CMO work, I wrote over 200 blog articles thoughts and some of them were really, really trash. And I kind of left it up to Google to figure out what was good and what was not. Right. And, um, but that was kind of the start of the book, although the book came later, I published it in 21. Um, it started in 2014 in that sense when I started to just, I, I forced myself for a year to write a blog almost every day. I kind of tried to force myself at the end of the day and say, Hey, what, was there a question that I answered today that if I type it into Google, I don't get a great answer, let me go write a blog article for that. But that's how it started. And then Columbia was kind of a natural evolution for me getting a couple of clients that I worked with, a couple of companies and just didn't have the bandwidth to, um, to handle all of them. I hired my first, uh, we call them associate CMOs because we were a little younger than we as fractional CMOs, uh, thought, uh, was Brian Graf, who's now the CEO at Columbia. He was the first, he came out of his MBA and he was the first, um, CMO that kind of, that I trained and then he was fine going me to see him offer a couple of other coins. He was in his late twenties then, and it worked out really well.

17:15 Awesome, that's awesome. Now, making that transition and plugging in another person as the CEO of one of your brands, this I think is a huge, huge thing that keeps a lot of people from growing and scaling. You mentioned earlier that that's really not your game but to do the growth and scaling part, but I think that someone like a Brian who is already in your organization knows what you're thinking and feeling and can actually have the energy, have the ideas, have the right mindset to take that into the next level, how hard was that for you to plug somebody else into that CEO role, or was that easy for you to do? And how do you coach other CEOs to do that sometimes? To kind of pull the reins back on maybe what isn't their best attribute, and plug somebody else in their place to take that, to wear that hat.

18:07 I think it was relatively easy for me and it's partly because one of my major flaws taught I get bored relatively quick. So after doing Columbia for a couple of years, I honestly was extremely excited to give someone else a lot of the work that for Ryan was the first time he would do this, right, which is super exciting. And for me, it was just less interesting, right? And I still help him. I'm available, but I definitely didn't have a lot of abandoning issues. And yeah, honestly, the team was awesome.

18:41 I love guys like you. I love it. And most people don't feel that way. Most people it's like they're baby I don't want anything bad to happen to it. I love that mindset

18:51 Well, I'm still the office reshare, so I sit literally next to the Columbia team. So it's not that I don't feel tied to it.

18:59 Right, right, right. No, no, I get it. No, that is a big problem though. I feel like there's a lot of founders who are ideal for the launch and systems and setup and structure of the vision that they had, but they're really not the best executors once it gets going and they do get bored. Yeah, operators, yeah. And I think that that's a big thing that everyone needs to look at. How do you help people see that may not be their thing Operators.

19:28 Yeah, I'm a builder, not an operator. And I think just knowing your strengths and being okay, comfortable with that, I think is great stuff. How do you help others? Um, asking questions like, Hey, when you get up in the morning, are you pressing the snooze button on your alarm or are you waking up before the alarm goes? Right? Those are good triggers for, are you doing the thing that really gets you going? And it will keep you going. Uh, and if not, you're either in the wrong operator role or the wrong building role. Right? If you're not, if you're not maybe, and there's other ways to describe what you are best at.

20:00 Now talk to me about the challenges because everyone's got challenges when they launch and they're and they go into growth mode Was there something that you wish had never happened or something that you're like? Oh my gosh that wasted six months of my life trying to figure out that problem What are the things that you hit in the growth of these businesses that they did that to you?

20:20 Yeah, let me not talk too much about myself, but what I also see other founders go through. Right. We talked about how when you go from product market fit to hitting T2D3 scale growth, that you have to do all these things in parallel, which is hard. But that's one, let's say that's the first thing. The second thing is when you, especially when you get foreign capital, right? When you're raising some form of a seed round or you get series A, the clock now starts ticking, you have people looking over your shoulder, right? There used to be the kind of the, I call this the 10 years of SaaS. Funding growth bonanza from let's say 2010, 2011 to 21, where every investor would tell you, go faster, grow, grow at any way, at any cost. Those days are over now. Yeah, but that was the pressure that was on a founder. And so to do that without creating too much waste was an extremely, I think, hard problem to balance for founders. And now, of course, the last two years. Tables have turned a little bit. Now everybody's talking about rule of 40 instead of rule of 50 even instead of D2D3. And that's tricky for founders. How do you balance that? Then the other one, once you've gotten that foreign capital, now you have a boss. You have to know you're reporting to a board. And I found always my advice is not only to a CEO now having a board, but also a CMO who has to present at a board. is to learn how to lead with the red, right? To be comfortable talking about the things that are not great and not try to do a good new show, right? And to be very comfortable that you're in that seat, not because you have to do a perfect job, but because you have to be the perfect person for the job. And those are very different things, right? And the perfect person for the job is the person who's not shy from talking about things that need improvement, right? That also, of course, come with solutions and that are proactive. They abandon ideas or choices they made that are not working. They get off the horse when it's death. And that's so different from a founder or a CEO or CMO who's trying to run some kind of a shadow boxing context in a board meeting where they try to pretend things are maybe going better than they are or not really sharing any learnings. Maybe some of the things aren't going well. But it doesn't mean there are not other things that can be done better. Right. So that would be the third one. So the old apparel execution, making sure you stay focused on profit in addition to growth, having a boss or a board and how you behave. And then the last one, the fourth one would be that you, because your team is still small, you're now becoming bigger and bigger and bigger, but you still cannot afford really to hire, for example, C players or B players. You need to get A players, right? It is just too time consuming and too risky to make hires that are not just a perfect fit because you'll just run into another friction points that you cannot afford yet. You can do that maybe when you have 100 or 200 people, not when you're like 20, 30, 40 people.

23:30 Totally agree, totally agree. Those are great bits of advice. For those of you listening, I hope you rewind the last five, honestly, really, so this whole thing, but those last five minutes of just tidbits that he just gave you are gold. These are golden nuggets. You've gotta really listen to what he's talking about. Honestly, buy his book, because it does outline all of these things. And we have links in the show notes below, so please take a minute to buy this book check it out, watch some of his content because Stein is no, he's no rookie here. He's got a lot of experience in doing what he's talking about and he talks about it all over the place, including this podcast, but elsewhere, believe it or not, there's people out there besides me listening to this guy and talking to this man about what he knows. So Stein, what do you recommend? Like, what is the first step that a lot of these founders who are in that, I want to get out of launch mode stage, how do you, what's that, what are those first few steps they need to take?

24:35 I would say there's, in addition to the getting A players part, there's three other things. Do things in sequence, not in parallel, although you have to execute on all these different things that we talked about to get to T2D2, you still don't want to try to do all those four at the same day, right? Do one thing on Monday, focus on the next thing on Tuesday, right? Sequential execution just will always outperform trying to be too thin spread about everything you need to deal with. Fill forward, fill fast, right? Cut your losses, get off the, the second cost fallacy, et cetera. Don't start things that you don't intend to finish. And that goes a little bit back to the doing things in sequence versus parallel. I think, yeah, it's so easy to start a podcast, right? Or to launch a website that's really not that great, you know, because you didn't really put any effort into the content, right? Don't do it. It's not gonna be worth it. Learn to lead and to manage, right? As a founder, I think you're, you may have gotten to product market fit by leading and getting people to get excited and to follow you, et cetera. As your company grows, you'll have to learn how to manage as well. Right? How do you implement certain level of process? Not too much, but you'll have to think about how do I manage a leadership team? Right? Things like traction or EOS or pick, pick OKRs, pick a methodology, but invest a little bit in kind of structure and process, don't overdo it, but some of that you need to start thinking about. Um, yeah, those, and get a mentor, get someone that has done this before. There are so many people like myself, like you thought, I think who are totally, who get a lot of energy from sharing their experiences. So ask for help.

26:11 Totally. Yeah, I love it, I love it. And I would say add to that list a peer group, whether it's Captain's Counsel or whatever, peer groups are amazing at bouncing those ideas off of getting a little bit vulnerable and having people who don't judge you for doing something stupid say, oh, you know what, I actually did that too. And being able to help you through the problem the way they did, couldn't help a lot. It helps a lot of, it defers a lot of pain. So, fantastic. Well, Stijn. I love asking people before they leave, you know, is there someone who has been in your group who has helped mentor you or kind of guide you through this process of building what you've just built?

26:53 You did ask me this question earlier, so I could prepare. The problem is I have like multiple. I worked for Chris Caposella, the CMO at Microsoft, who was extremely good at focusing, right? I think Brian is teaching me things every day as the new CEO of Columbia on how to kind of operate a company with a little more patience. So there's many. Seth Godin was not a good influencer. We stand on the shoulders of giants.

27:18 No doubt about it, no doubt about it. Well, I appreciate those shout outs. And listen, I really appreciate your time today. And I hope for those listening, do check out the book. Do check out the stuff that he's doing. Look at Kaluengi because I'm telling you right now, if you don't have a strategy, if you don't have a game plan for going to market, even stronger than you are now, you're probably gonna stay stuck where you're at. And so find those people that can help you execute it at a higher level and you will find yourself in a stronger growth strategy, growing faster than you would have otherwise. Stijn, thank you so much for being here today.

27:53 Thanks for having me, Todd.

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