What's Working NOW At Private Equity Owned Companies

You and I, we talk every day. We were trading some notes on just the, I don't know, like, the different vibes that we're on right now and the different things that we seem to be pushing across all of our portfolio companies. And we said, I think this should be a podcast. So now it is. I think you made that face. You even did the Humphrey. Yeah. Yeah, you did. What is that the, you know, the Clint Eastwood, you know, because it looks too damn good. That's. Go ahead, hit record. I prefer the Mr. T. Prediction for this episode. Paul Pain. It's not venture capital. It's private equity. It's the private equity. Fun. Cast, pour yourself a drink and have a seat. What's working right now? Like, and I don't know this. Maybe it's not quarterly. Maybe it's whatever. When things are kind of going on, you and I figure, hey, what did we figure? What did we. What did we figure out? I think we should probably follow this with a, hey, what did we drop? You know, that we. Yeah, what do we do? What do we do a little less of these days? That interesting. But this is. This is intentionally unscientific. So this is not necessarily, you know, the most important thing of everything that we do is, is not stack rank order. This is just what we seem to be doing at every single portfolio company. And more importantly, what seems to work, which was our working title for this before we just shortened it to what's Working. Yeah. Because I think we're confident more than seeming to work. So let's get right to it. Yeah. And this is just a quick punch list of. If you look at Jim and I's calendar, what's the stuff that we look forward to because we know it moves the needle? What's the stuff that we do consistently across the portfolio because everybody needs it? And what's the stuff that we have belief in because we really do think this is going to help. Yeah, no surprise. Like, shocker, AI is my first one. But there's a lot of talk about there coming from multiple angles on, like, hey, AI is a thing, but what does that mean? And like, where should you start if you're a smaller technology business trying to take advantage of this big, confusing, slightly intimidating wave that everybody is talking about. Here's my take. I think you should be teaching your people how to use consumer grade AI tools and starting there and putting all of your effort into that before you think about anything else. Because one, people want it. Like, people are not getting the most out of tools like Claude and chatgpt and Perplexity and Gemini or whatever, the tool doesn't matter. My take is this is more of a skill than a technology for a lot of people out there. And it's a skill that needs to be built through practice, through experimentation, through education, and like, sharing what's working out there. So just this last week, I spent time with several of our companies. One of them just sitting there and saying, what do you want to try? And we spent an hour just building skills in Claude for something that one of our salespeople was excited to go experiment with. And I didn't have any expectations about where that would go. The good news is what they did do is they took those skills, they installed them into their instance, they experimented with them, and. And then I found a couple days later in a board meeting that the rest of the team was already using these on actual deals, and hopefully that's going to help them win a little bit more business. But, yeah, if I had to point to one thing that I think is making a big difference right now, it's literally just teaching individual people how to get more out of AI using the tools they already have. Does this make you like Johnny AI Seed or something like that? Or would it be Johnny Apple AI? We got to work on the naming convention there, but maybe, I don't know. Well, here's my surprise. That's not coming. That's basically coming right off yours. There's some heavy AI here, but in the right way, I think, because some of these are more strategy than just a tool. To your point, one of the things that's a big unlock right now is a lot of these Design tools like Vercel, Dev0figma, they're all having great output into workable demos, workable code, which is really, if we're getting that in the hands of our product manager managers, it's getting them in front of customers to be able to show, well, if it looked like this and did this, would you buy it? Right. Which is much better for bringing things back in engineering. So the more we can push sort of the product validation into the product manager's hands without having them wait on engineering, the better it is. So we're having a lot of success with that right now. Yeah. And it's fun. Totally fun. Yeah. Mine's the next one. This goes hand in hand with the AI stuff because I think there's a ton of applications for individual quota carrying salespeople for. But over the last year, we've really doubled down on making sure that every portfolio Company in the first year has some sort of sales training or certification project or initiative. And the reason, I think, let me point out, that's internal, Right. Like they're doing their own sales training. Not we're not going out and get like Miller Hyman or, you know, so we're not getting some crusty old, you know, guy in a suit is telling war stories about when he closed that big deal. Right. This is the company using their own resources to train their own people. Yeah. And some help from us. And a lot of times the approach that we take is we say, okay, who's your best seller? Who's the seller that you wish you could clone? If you could, what do they do a little bit differently? And then how, usually for the first time, how do we just write down what they do and then show that to the rest of the team? As elementary as that sounds, most emerging technology businesses out there have never done it because it's hard work and it takes extra set of hands. But we can provide that extra set of hands when we do this. I think about this as the moments of truth in the sales process. I think there's three. I think it's all about the discovery call, the demo, and the proposal. And if you are building a process and building discipline and building excellence around those three moments in the sales process, you're probably going to be okay. But the hard part about this is you actually have to write down what you expect. A lot of companies never even get there. You have to teach people what you expect, which is a whole nother set of work. And then you have to make them prove to you that they can do it and coach em up along the way. So each of those steps is hard for a different reason. But this is an area where I think both you and I can lend a big hand for companies. And when we do it, and more importantly, the leadership team commits to always moves the needle every single time. Yep, I totally agree with that. But this is. What is it? What is the Kellogg quote? A Disney parking attendant gets more than your average enterprise sales. And it's true. It's true. And that's, that's terrifying. Like most, most sales jobs in, in small technology companies, you know, the product works, but they kind of, they hand you a phone and a machete and say, go get me some pipeline. And they don't, they don't prepare you for those customer meetings that you're going to have that are going to determine your success. So again, this is if all we did was just teach our people how to use AI and teach our people what the best sellers at their company are already doing. We'd probably make a big difference. But we're not starting there so we won't stop the list at number three. I think this is AI is a tool that unlocks data that's already there. But we're finding a lot of success both in knocking down long time bugs or things that overwhelm customer support on a routine basis. By just throwing the customer support data into an AI engine and analyzing that data and looking for are we spending 30% of our time with reset password? Maybe reset password should be function in the system. The reason I threw this up there because I think it's pretty amazing is that you know Nori literally took the, the support data from one of our portfolio companies and ran it through herself like she, she just got an export from the, from the customer support department and we got a lot of good insights back in just exact it's. It affected short term project product plan. So I'm, I'm hitting this bullet multiple times. So I'm gonna, I'm gonna probably not be as pure as you are in that bullets but being able to take the customer support data in JIRA ticket format like not doing a whole bunch of data conversion and cleaning it up like we found most of your AI engines, your elements are pretty good at just chugging through even if it's crap in there. And this stuff doesn't have to be perfect. We're not trying to measure from the distance from here to the moon to micrometers here. We're looking for trends in the customer support data and big ticket items. And I think we're finding that and especially early on you notice a couple obvious things that you can just, you can just fix and I think a lot of teams one again this is, this is a time constraint things. It's nobody thinks this is a bad idea. It's just the classic example where if you do have an investor with ops team this is where lending a hand it allows you to get to the thing that everybody agrees is a good idea but you just don't have time otherwise to get to. And now with AI there's no excuse not to do it. Yeah. And so similar vein my friend. I mean back to annoying basic stuff that really does make a difference. I mean anybody who's listened to us for a while knows that we have a philosophy on go to market reporting. It's called less data. More often I really think this starts with getting an amazingly simple but amazingly Clear weekly reporting package in place. And if you do this right, it answers the same questions that the team is already asking themselves every single week. Questions like, are we going to hit the quarter? Questions like, no, seriously, are we really going to hit the quarter? Are we creating enough pipeline? How is the sales team performing? What are the deals that we should have on our radar that we should ask you about every single time that we talk? Most of that is getting answered every day in every business out there. The problem is it's being answered with stories and narrative and deal anecdotes and having four or five tabs in a spreadsheet that you send out every week. It does a lot of good. This is the first thing that I do with most of our businesses drafting off this, moving engineering teams to the CLAUDE code cursor style of development. I've got an episode coming up to talk about this that initially it wasn't good enough to really do much coding on your behalf, but it started to be really good as code assistant, if you were working in a classic software development environment using Visual Studio code or something, it would help you complete things. Started to build bigger stuff. At this point, what I would say is the minimum phase for engineering is using the CLAUDE or cursor style of development for the most part. Which means you're literally putting instructions in to this interface. It's generating code. You can go look at the code editor if you need to, but mostly not. People would think that's the most advanced part, Paul, but it's not. The most advanced is people are running this thing literally without an interface. Right. Like they're literally using sort of the check in, checkout process to drive all this stuff. So at the extreme end, we have seen cases not in our portfolio yet, but I've seen cases where it's being done successfully that a customer's, you know, support ticket becomes an engineering JIRA ticket automatically. The bug gets fixed, they run set of tests on it and it gets released to production without a human ever being in the loop. That's the circle, right? We're not there yet as an industry in general, but the minimum should really be extracting yourself away from the day to day coding. And we see that's working like most of the teams have dropped into cursor now. You know, the SpaceX cursor announcement. I will save for another. We'll come back to. We'll come back to that one in a few months. Yeah, I hate the phrase vibe coding because it's not vibe coding. Right. But it's it's literally a level of abstraction. I'm going to make the argument in a, in a future episode that this might be the new 4Gl. Right, 4Gl, that actually works for, for those of you who are real industry insiders. But right now it's like, look, guys, it's good enough to really build stuff, including the stuff I'm building, right? Nobody's let me put anything in the wild in a number of years, but I think that's really working for us. Yeah, 100%. I mean, shocker to me, Paul. I had a little bit of a cardiac arrhythmia when you, when you, when you told me this is one of your bullets. Well, this is meta because we're talking about the importance of video on a video podcast, which we're finally investing in production quality for the first time after doing it one take, you know, low fidelity for, for a decade. So hopefully, hopefully the people out there appreciate what we're doing because there's a lot of AV setup and, and WR in the background. But yeah, my perspective on good marketing has always been if you just answer the questions your customers already have about your product, about your market, about their options, about how to navigate those options, you just answer those questions. A book they ask, you answer. I've got my copy. Yeah. Shout out to. Shout out to Mr. Marcus Sheridan. He's been a guest on the pod. He's been a keynote speaker for us at the Revenue Summit. And his philosophy, one, I think it just cuts through the black magic crap of complicators and marketing. But two, now we're in an era where the cost of creating an 800 word blog post, even if it answers the question a customer has, is basically zero. Like, written content does not have the heft and does not require the workload that it once did. And I think our consumption patterns have changed. I think we have a lot more people listening to this on YouTube than we did in the past. And think about how much video you consume versus how many hardcover novels you read. We both know the answer to that. Video is what you have to be doing. And if you're focused on the quality of your marketing content, which, by the way, drives lead creation, this is the easiest way to do it. Take something that you would have written and find a way to put it into a visual format. And we are pushing all of our companies to do that. The ones who have embraced it are really, really seeing a difference. Yeah, we're big believers in video. Look, in my household, YouTube is the main Channel we watch, believe it or not, across every level of the family. Yeah, what's the stat that just came out? Like YouTube just did last year's box office in revenue in the first quarter of this year. So it's just crazy and there's no, there's no excuse not to embrace it. Yeah, shout out to my, you know, I watch a bunch of history channels as you, as you well know and shout out to the folks at history hit, you know, solidarity. So drafting on my last trend here. And again, this is somewhat detailed, but we will talk about it. This, this idea of plugging, you know, this MCP protocol which is, I mean I think of it, this is still too technical, but the ODBC for AI, right. It's, it's probably the easiest way to say it. It lets you connect AI to a lot of different systems and stuff in a, in a. And still let the AI process it. This is the new business intelligence that if you can get your data accessible, your private data accessible to a private MCP server that gets surfaced to your language models, it's a huge unlock. And just like we were saying, drop the ticket information into the AI engine. This is 100%. Now, I'm not saying it's easy. It's way easier than almost implementing anything else. You still have to think carefully about how you get your data into a system in a secure way. And we've done done episodes on rag, which is how you get your data into the MCP system in the first place that goes to your AI engine. It can be complicated, but it's nowhere near as complicated as you think. And it's a huge unlock. If you can get your internal systems accessible, anybody in the organization can get the answer that they need. And a little bit of organization on the front end goes a long way both in terms of what you make accessible and how you make it findable for whatever you're going to expose it to. Yeah, another broken windows, loose screws thing. What I'm seeing digging into a couple of our go to market machines at a very, very deep level is most of our businesses are actually getting a fair number of people to raise their hands and say, I want to talk to you, or give some kind of leading indicator that they might be ready for a phone call, ready for a meeting, or just ready to engage in some way. And if you get under the covers in any software company, there is always improvement to be had in terms of speed to lead, just how long you're making somebody wait who just raised their hand to Talk to you in terms of the quality of your lead pursuit. So what are you following up with? What's the messaging? What is that person getting when you finally hear from them and like how tenacious you are in following up on those leads. So I think the sales pipeline gets all the attention. Right? It's what you think you can close this quarter? Sure, rightfully so. But if you're not looking at the very, very top of your funnel and all these maybes that your marketing machine is creating and how good you are at running those things down, you are leaving money on the table. I'm spending a ton of time in this with, with several of our businesses right now. But this is a hard one, Paul, because if you're a software guy, you try everything if you can. We used to not be able to, right. They had to ship you stuff, so it was much more complicated. Now you download and try it. And the thing I hate the most, of course, is the chatbot that pops right up even before. Hey, I'm Fred, can I help you make a buying decision? That done poorly doing aggressive lead pursuit and conversion is bad because a lot of times I'll look at something that's like, eh, we're not quite ready for that yet. But I rather just play with it for a minute to say, is this even in the ballpark? Yeah, it's sort of the ballpark, but maybe not there. Again, I like hearing from the company from a product standpoint. Every so often they get new updates that I might be interested. I don't want the aggressive. This is my last time following up Jim, like just tell me no and I'll never contact you again. If they have a good strategy for lead pursuit, then I agree this is something to focus on. But most of them don't. No, not at all. And I like to channel a lesser known Sean Connery movie, Finding Forrester, when he says a key to a woman's heart is an unexpected gift at an unexpected time. The key to a woman's heart is an unexpected gift at an unexpected time. And we're not talking about a woman's heart here, we're talking about lead conversion. But I still think it's true. I think it's. What do you not expect in terms of lead conversion from a software company? You don't expect a relevant message and you don't expect manners. You expect that person to be on you for forever until you say take me off your list. But I think you have to get really, really good at getting back to people who are Very high intent and not leaving them alone. But you have to be also really good at figuring out who the maybes are. Like the people that might be sniffing around and dangling a little something out there and saying, hey, I'm not going to totally ruin your day and be totally invasive, but is this an opportunity for a conversation? You have to be good at both of those. Most companies aren't good at either. Yeah, they're not. And. And they rely on old strategies here too. Like the assumptive close is Tuesday at 2 next week. Good, Jim. Yeah, yeah. Like dude, buy yourself back by the way. Really good Connery. I'm not even going to try and I'm not even going to try topic. Thank you. We'll keep that one in, I think. Yeah, I wanted to have you, I wanted to throw you in where. Where I'm going you cannot follow. You know, a little unfran October, but I get it, you know, so let's, let's bring us home here because I think this will bring us home. We're now in a phase where if AI is really helping you generate code coverage so the software's more reliable getting out there and you can add features faster getting DevOps. And I know it's somewhat. But the processes that you go through from getting a piece of software that's written and tested into the hands of your customers, the better that process is humming, the better your overall customer satisfaction is gonna be and the better your flow of product into the hands of the customers are gonna be. Because if the get releases and it breaks something every time they don't want your releases, the customer doesn't want to come in the next day and say this whole system's changed. I mean that's the thing I hate about a, you know, SaaS only system in a browser. It's like what the happened to my yesterday's interface. I'm not, you know, you shouldn't do that thing. But the point is if you're really good at releasing stuff without breaking and you can roll back easily and if there's an outage, you recover quickly. That used to be something we needed to strive for in our portfolios, was hard to do given our size, but now it's just, you know, the tooling is there and there's no excuse not to do it. And yeah, that's going to lead to us getting the stuff that you need new products out the door faster and more reliably. So for us, I think that's been a, that's been a big unlock. I Don't have the solutions there. We're, we're working aggressively in this area, but we think it's one area to focus on. It's totally worth it. Yeah, just putting your attention there. And if you can increase release velocity so you're actually getting stuff out in the wild while safeguarding against outages or just stubbing your toe. Customers notice that even if you're not building brand new features or AI functionality, it's like, hey, yeah, I can tell that the product is faster or better or smoother or this thing doesn't hang anymore. And you know, you might not get credit for that right away, but it makes a difference, especially for people who are scrutinizing their software budget, which a lot of people are right now. 100%. And around the water cooler, you like to hear the XYZ system. So it's so slow today. You know, it's always slow on Tuesdays versus, you know, hey, it seems pretty bad. We don't see any of that. You know, it's pretty snappy. Like, yeah, we can go for coffee now. Like that's a good thing. Yeah, 100%. So bring us home, Paul. That's what's working for us right now. April of 2026, right? Yeah. I mean, we'll do a couple of these as we go. But look, we've, we've talked about this before. We're from the it depends school of value creation. So we don't do the same thing with every company in the same order. We're opportunistic. We have beliefs and religion about what seems to work in companies of our size. But the sequencing is always different and we're always discovering new things. So we're going to try to pull up and use a little pattern recognition and say, what are we doing everywhere? What do our companies want help with? And what's seeming to move the needle more than anything else. So that's our list for this month. I'm sure It'll be different six to 12 months from now. We'll keep you updated. See you in the next episode, my friends. All right, see ya. From the heart of Chicago to all over the globe. Couple private equity geniuses. They share what they know. They love to mess with technology. Where the future is sink or swim. It's a private equity fund cast with Devin and Jim. Technology issues, middle market, PE backed companies. They bicker with each other and they don't take themselves too seriously. 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