How HighLevel Won 70,000 Marketing Agencies Without a Sales Team - with Robin Alex

Welcome to Ventures from the Valley, a podcast by R136 Ventures. This is the show where we highlight the biggest topics in business and investment with some of the biggest experts in the space to help you learn how to grow your portfolio in venture capital. I'm Rutan. I'm Tom.

I'm Viktor Arlovski. Dear friends, colleagues, partners, I'm Victor Arlovski and this podcast brought to you by R136 Ventures. So in this, this episode we have Robin Alex, who is a co founder at High Level, the AI powered business operating system that serves over 70,000 marketing agencies and powers more than 1 million businesses worldwide. Robin's path to entrepreneurship began when he witnessed firsthand the chaos of fragmented marketing tools.

Watching small businesses struggling with like 20 plus disconnected software tools and watching leads dying. He partnered with Sean Clark and Veravan to build high level in 2018. So Robin, welcome. Thank you for having me, Victor.

Absolutely. Yeah. So let me start with questions. So first, when we recently published, and that's how we came across, High Level recently published our AI B2B scaling stars leadboard for now.

So High Level came out number one with astonishing score of 17.7, well ahead of other companies like builder IO Quota and others. So my first question is, what do you think of High Level doing differently that the rest of the list is doing and maybe what is like similarity to others? So how would you distinguish yourself in a very unique way?

Yeah, yeah. So you know, when you think about High Level, you know, while we are an all in one platform, I think our biggest differentiators that we do work with the, the implementers that, you know, position the software for small businesses. And I think if you take a step back and look at how the economy and industry is built in every generation of technology shift, there are small businesses out there who can't afford resources, can't afford people to help them at a full time basis in implementing and paying attention to the trends and things like that.

But if you look back to when you know, the Internet was taking off, every business needed to get a website online. Well, these small businesses don't have the resources, don't have the funding to have a dedicated IT person or technical person or you know, at that time a web developer ready to go to build. So they're always calling somebody to help implement tools and technology for them. So you know, the, when the Internet was taken off, they were looking for someone to build a website.

So they call and find someone who could do that. Then social media was taking off very similarly. They don't have someone on standby, so they're just reaching out, calling person and sometimes they're calling back to that person who helped build the website to help with their social media. Then came with the automations and workflow building CRMs.

They don't have anyone on staff so they're looking to hire out. And now with AI, I think they are very open and you know, I think this is the first time in a long time that you know, small businesses are actually at the bleeding edge of taking on the opportunity and implementing change because they don't have the staff, they don't have the resources and they see the opportunity to, to provide that cost savings within their business. If you look at the counter side of it, you have enterprise businesses, companies that use some of these heavy antiquated software.

They have to hire dedicated resources to manage and monitor and maintain it. But when individual users want to leverage AI, there's a lot of bureaucracy within those organizations. There's a lot of job justification, fear factor. You know, hey, we don't have the agreements with these large LLM providers so you can't use it yet.

We have to go through security and audits and things like that. So I think large businesses are actually slow to implement AI. But for us and for our use case, you know, we work with that small layer of individuals who small businesses contact to provide implementation of these tools. And because of that businesses are so eager, small businesses are very eager to implement AI.

So they're calling on to this, this community of individuals to help implement it. And for us we don't have to predict the future, we just need to build the tools that our customers, in many cases this agency layer, this consultant layer is needing to help implement. So as long as we're matching up with what they need and help them deliver it, we win. And so that's the tools and what we've been thinking about and why we've been able to accelerate so fast with our AI usage.

Well, you mentioned AI so many times, but company was founded back in 2018 so probably when you founded the company this term hasn't been used at least so much. Right. So your first revenue was. First year revenue at least from public sources we scrapped was like around 40 grand.

And you were selling direct to SMB. Right. And to our knowledge there was like a high churn and model really didn't stick. And then like one agency conversion really reframed the entire business and well, my question is why actually exactly.

Matching the needs of SMB didn't work out why they still needed agencies rather than just building a direct relationship. So what was like the secret sauce and why and how like, I mean first of all how this decision came on board, I mean did you have like much of discussion? Pivot? Not pivot, sell to agencies, can continue finding the way to SMBs.

And how fast did you make this decision? Yeah, so you know, prior to me joining High Level, Sean and Varun were, you know, my other two co founders. They were actually the original co founders helping to really go out and build tools for small businesses. Now through that, you know, they were making, you know, not a lot of revenue in the grand scheme of things.

And your point? High churn. So when you go to small businesses, I think they see the promise and the vision. However, what they really lack is they don't have that support, they don't have that team to help do that implementation because it's also not just the implementation and then set it and forget it.

You know, it requires some modifications, some iteration to really fine tune it to make sure that operationalizes with the business. That was the biggest issue that they dealt with. Now when I joined really it was through an interesting, you know, world where they were prospecting, trying to figure out how to launch their software. And where they started was in the reputation management side of things.

They had actually reached out to a customer that I had as I was running a marketing agency, we were that outside consulting partner for these small businesses in helping them implement, iterate and make sure that success is happening. And so that customer actually did a magnificent job and saying, hey, I don't know how to help. You should connect at Robin and their team to help bridge the gap because I want this tool for my business. And so not only did I help them get implemented and get what they needed to help with that business, we started talking about kind of this greater issue with small businesses in general, what agencies were actually doing.

So you know, to that point the secret sauce was actually slightly pivoting in the perspective of we need to be able to talk to the SMB but also make it easy knowing that there's always third party implementer who is doing the work here. So how do we make sure that it's valuable for them to get the outcome that the small businesses are looking for. So in many ways that was our secret sauce. And that's what we found early on when you know, sh started building software, kind of going direct to SMBs.

And once they met me, you know, I was able to to join and kind of, you know, help you know, clarify or demystify, you know, how implementations actually occur. And that's what we've actually wrote on from here to where we are today. Well, and speaking generally about pivoting, how would you recommend to pivot? Because, I mean, many startups at a start, not only to start, but through their lifetime are pivoting.

So should it be one shot? Should it be more gradual? So, I mean, what kind of, what would you like, advocate? Like faster and more aggressive or still watching your back?

And I have few startups I'm helping to grow, so it's a constant debate. So I'm sure they will listen to your advice. I think the best time to be aggressive, well, let me caveat it in saying that there's definitely seasons and the right time to make these decisions, but when you're early and you don't have a lot of consistent revenue or, you know, you don't have a lot of things locking you down into a decision, you should be as aggressive as possible in trying to test out many different variations, many different opportunities, and trying to pivot as fast as you can.

And a lot of it is just listening to the customer, listening to prospects. What do they want? Where are you missing the, you know, the goalpin? Um, I, I think that is very easy.

And the best time that you can do it is when you're early on in the business, as you become more late stage or you start getting more consistent revenue, and, you know, you have to take it very methodical because, you know, the question that you always ask is, are you willing to risk the existing revenue? And for many people, they're not willing to risk it or they have a. Their tolerance risk is very, very low. So, you know, that's where you want to be a little bit more methodical or, you know, give it more time to speed up.

But for us, you know, when I met Shanburn, they were early stage, you know, didn't even have a lot of the, the core foundational things. So it was very easy to pivot. And, you know, we never looked at it as pivoting. It was just trying to figure out market fit.

So, you know, I think when you're early, pivoting doesn't even matter because you're just, yeah, you're just trying to answer questions for small businesses or, you know, just any business at that time. Eventually that, that how I see it. I mean, usually like founders, like split, some think that it should be faster and some like, trying to, like, to tolerate and do it like in a more soft way. But Anyway, so after pivoting, you went from like 900 or finding your product market fit.

In a way, you were at 900 agencies to almost users, right? Almost 250,000 users in just less than two years. So obviously, this tremendous growth breaks certain things. So what broke first and what surprised you about how agencies adopted the platform?

Are there, like, any insights you can share? Yeah, you know, even that term product market fit, I think early on, we never really looked at it as product market fit. It was just we found an audience and we wanted to build whatever that audience wanted. And the biggest thing there wasn't necessarily just building tools.

It was making sure that we built tools that they could actually use, and we wanted to see them actually when using it. Right. So it wasn't like we're sitting in a black room, you know, like in our cave and just building it and then trying to figure out how to template it. We're building it alongside our customers.

And at that time, you know, it was that audience of that implementation layer, agencies, in many ways, working with them, trying to figure out how to make the tools work for their needs. And once we saw one, we are very passionate in trying to say, okay, we see that smile on your face, we got what you needed. And you, you know, do you know other people who are dealing with the same problem? And.

And if you're close to that community, everyone knows each other. So if you can win for one, you win for many. And they're very quick to bring in more people to, you know, into our funnel to help accelerate. You know, like, you guys found a magic sauce for me, so I want to tell more people.

So that's what we did there. And then we were also very verbose and saying, like, we got this win. Let's show other people kind of in that same lens of how they won. So I think that's the biggest thing where I see a lot of SaaS companies, where they go wrong is they try to get, quote, unquote, case studies.

But what they're really trying to do is just trying to say, hey, Victor, do you mind recording a video or writing up, you know, that we did a good job for you? That doesn't actually. That isn't what future customers are looking for. What they want to know is, Victor, how did you win?

What exactly did you do to win? And that meat and potatoes is really the better case study. And once you're able to cast that out. So we would do webinars, we would actually celebritize.

You know, let's Say you, Victor, we would do a joint webinar with you as our customer. We would interview you and let people ask you questions. So you created, you created a pride. A pride.

Kind of a pride. Exactly right. And we're just in the background just waving like. No, it's, it's Victor.

Victor's the magic sauce. Look at how he did it now. He just used our hammer, he just used our screwdriver and our tools, but it's his magic sauce. And so through that people would come to buy the same tools through us there.

And anything, what you would not expect from your crowd to do, usually people are very creative in using tools. Right. So I mean the most creative way I really witnessed people using like chatgpt is my 17 years old daughter who came to like CVS and I was looking for like medicine and she simply took a picture of the shelves and asked ChatGPT, where is this stuff? And then ChatGPT pointed out.

Exactly right. So I spent like 15 minutes going through like this stuff and then she did it in like a few seconds. So anything like that, like when you really were surprised. Oh my gosh, that's the thing.

No. Yeah. So, you know, one of the biggest aha moments was early on, you know, we were building these tools, we really thought it's teaching people how to use it in a very singular way. You have to do these things.

And what we realized was that people wanted to know where the lines were, but no one wants to be put into a box. It's like, okay, I see the general use case, but can I do more functionality because I have better ideas. And for us, we were very conscious in saying, let people be creative on the platform. Like, you know, we want to drive them through a general lane, but if they have opportunity to connect with other software or build on top of it and do these other creative things, we actually open that up.

And so that's where we decided to become, you know, very much API driven. API first and so, and then make it API open so that other customers in many cases have the extensibility that they're looking for. And then on top of that we let you to inject through JavaScript or CSS and things like that. Those little things went a long way for us because it's no longer about us building tools, it's us creating a platform that other people can build on top of.

And so that's just something that we always listen to our customers throughout the journey. And we never said no. It was always, well, let's figure out how to make it happen? Because we never wanted to be prescriptive.

We wanted to just. You're the expert, so let's help you continue to be the expert there. Yeah, that makes sense. Well, let's switch gears a little bit.

So you are also very unique in a way. You actually bootstrapped the company. So you turned down, to my knowledge, many VC term sheets and attempts to invest into you. And obviously you were seen as a hard company growing with such an astonishing speed.

So why you decided to pass on venture capital for so long and why did you decide to bootstrap? What was the reason why not take more money and grow faster? Well, I think, you know, we, you know, the first 12, actually, the first 18 months, Shawn, Vern and I never took a penny out of the company personally. We took every single dollar back in, you know, and we were very fortunate.

You know, I, you know, had some income coming in because I was still running the agency for a while. And then, you know, Sean and Varun, they were able to. Their spouses were working, so they were able to just, you know, you know, work to just help build the company. So we took every single penny back in.

And then the way that we built the model, we never had a sales team. We never had, you know, if you look at our biggest expense item was actually our hosting. And, you know, we. It took us about six months to hire our first employee.

So for the first six months, there was really a lot of expenses, very minimal. Right. So we just took every single penny, put that back into the company, and, you know, we always looked at it as, let's continue to build award chest. And then through that, we were profitable since, you know, since the beginning of the company, which was, you know, why, what is more dollars going to actually do to help grow?

Like that was always the question that we would always ask. But at the same time, we never had a sales team, we never wanted it. We never saw the need of having a sales team because you try to build it, you try to do it, and most companies fail the first go around with having a sales team because they're trying to run paid ads, you try to run sales and all that. We didn't have the expertise, and so we just kind of kept doing what we're doing.

So for the first 36 months, we were profitable and just really taking all the dollars and reinvest into the company. That's what allowed us to hire. And so when the opportunity came up in 2021, we did have a lot of VCs that came in and what we knew was that we were doing something special and unique. And oh, by the way, we were extremely profitable.

Every time we're Talking to a VC1, they kind of looked at us as being this very odd company in our go to market way because we didn't have the sales team, we didn't have all this. And we kept challenging them. Why should we change? Like, what do you see?

And no one could give us a clear answer. What they told us though, the consistent message was what did they want to change? Like specifically they wanted to start. They told us that the model that we were building would not last.

They told us that we needed to take every single penny that we had in the company and now hire a sales team. Now hire paid ads or go get paid ads and build and grow that way. And probably not doing a white labeling. Right.

They said the white labeling was a bad idea. They told us our price model. They don't like it. They don't like it.

Yeah, yeah. They don't like our pricing model. They don't like the unlimited function that we had. You know, we're a flat rate company.

Right. So we give you all the tools just for a small subscription fee. They wanted to change basically the whole business from A to Z. And then the question that we would ask is, can you guarantee an outcome on the back end?

Because if you look at every single company that's out in the world, even publicly traded companies, most of them are not profitable. And their biggest line item is building the sales team, paid ads, advertising, marketing, and what we, you know, kind of the model for every VC is like, yeah, you'll invest into all these things. We're going to take every single dollar that's in the company as well as we're going to throw in more dollars to help grow it to then get you to the next stage.

And don't worry about being profitable or not, that's not important. We're going to flip it and sell it to the next, you know, PE firm or whatever. Yep. And we just thought that was a broken model and broken system.

So we never went down that venture route and we would just shut people down like they were crazy. You want to invest into our business that we were able to build and do in a very unique way and say that's not right. Like that makes no sense to us. Like why would we want this?

And we, to this day we're still having fun and doing the same exact thing. So. But in 2021, we, you know, kind of looked at it as this, you know, as the height of the market and we got to get free consulting. And so, you know, while we had many venture firms and things like that tell us how we did a bad job, they gave us some ideas on things that we can improve and fix on.

So it was amazing there. And then through that journey, we had a private equity firm that said, guys, you guys are doing something so unique. We don't want to touch any of them. What we want to do is we don't, you know, you don't need any dollars to put into the company to keep the lights on.

You guys have that figured out. What we want to do is one, you know, give us an opportunity to give. We had a lot of employees that joined us early on. At that time, I think we had about 200 employees.

They could have gotten better jobs and bigger jobs in other places, but they really loved the mission that we were on. So it's, you know, they wanted to become a minority investor with us. They wanted, they don't want to change any of the businesses. They wanted to support us on the back, back office areas, you know, getting a better finance team, hr, you know, make sure that we're operating legal.

And then through that, you know, we did a secondary round, so not primary capital. It's, it's all secondary. And it allowed us to give, you know, really right. Size our team and give them bonuses and things.

And that's part of the journey in being in sort of culture. Right. You know, you, you want to be a part of building something and then monetizing along the way. So that's what we were able to do in 2021.

And to this day, you know, that PE firm is still on the cap table, but you know, just as much as a minority thing. You know, Shawn Vernon and I, as well as our employees, you know, operate and manage the company and we make the controlling decisions. I think that that's an important piece. But for us it was just making sure that our team gets to participate along the way.

Yeah, it's very unique for current state of venture backed businesses in that. And what you tell is like probably the story that many founders would appreciate to have for themselves. So you were like, not mostly, but almost like every day. You were kind of a profitable business from like bootstrap all the way along till now.

So did you have like, do you still have like maintain any explicit rules like burn rates, ceilings, like reinvestment ratios, margin floors, anything what you would refuse to breach? I mean you should be very disciplined in a way Right. Or it's very natural. So that's.

The business goes itself that way. So anything, I mean, when you grow, you might have crazy ideas, why not to do this, why not to do that. Right. Why won't we hire now 10 software developers?

If not even you do any, like sales and marketing, you still may reimagine what you can invest in. Right. I mean, there are so many ways to spend and burn money. Right.

Anything like that and how you, like, push yourself out of this, you know, trap. Yeah. So it's funny, all those fancy terms that you said of like, you know, burn rate, risk and, you know, percentages and all that, like, we don't operate that way. For us, it's just very much running it in a sense of as you would want to run your personal finances without having any credit cards or debt or anything like that.

And so, you know, like I said, for the first 18 months, we didn't take a single penny out of the company. And when we did take money out of the company, it was the least amount that we just needed to sustain, you know, our current expenses. It was never taking out large amounts of money or anything like that. We wanted to reinvest into R and D and growing the business.

And so that was really important to us. And whenever we had those opportunities of spending more, one, do we have a strong conviction of this investment that we can at least get our money back? Right. Like, how close can we get to, to break even?

That's really the thesis that we always ran into. If the company is profitable, any investment that we make moving forward, if we cannot, if you don't have a conviction on, you know, you're getting your money back within X amount of time and you just estimate it, then it's probably not the right decision. And that's where we were, you know, in some cases, maybe slow to, to doing some investments. But, you know, at the end of the day, you know, in hindsight, I think it was the right call because we were able to be very, you know, strong in, in making sure that the decision that we have, like, we want to make sure that we're passionate about it and not just throwing money and hoping someone else will solve it for us.

It's no, we want to feel strong. We want to make sure that who we partner with or how we do it, like we feel confident that's going to come back to us. And look, it's not going to happen 100% of the time, but at least, you know, that partnership or like you having that feeling behind it adds that additional feel to the fire to make sure that you know, worst case just get our money back out of the deal. Yeah, yeah, totally agree.

So your 40% lifetime affiliate commission is remarkable, remarkably generous. Most SaaS companies cap it at 20 maximum 30% or switch to time limited payouts. So you built a model where you have like 70,000 or more agencies, astonishing number which is simultaneously customers, distributors, evangelists if you will. How did you arrive like 40% lifetime and what does the unit economic math look like to continually sustainably grow, grow at this scale if you may just open a little bit of secrets on that side.

Yeah, so I mean we touched on it a little earlier. Right. Like so as we would work with agencies or these consultants and things like that, we would get on calls with them and just try to figure out what is the tool that they need to get to their next outcome. And not only are we building the tool, we're sitting down with them from a very much customer care, customer success perspective to make sure that they're implementing it right to getting that what they, what they wanted to build.

And then we were very quick to saying hey, do you know anyone else that would want this software? And what we were so amazed by is without giving them any additional money, they were just so happy that we helped them make money. Of course I'm going to tell my friends, I'm going to tell Bob, I'm going to tell Sally, I'm going to tell them. And they would get us on a call with them, help book a meeting with these other individuals.

They wanted to make sure that any dollar that's coming our way, we were very transparent. Any dollar that we make we're putting back into the company. We're hiring more, we're doing more R and D, we're trying to build more. And so people love that from a mission side and over time we just got really good at asking and created a little bit of a virality effect here.

And remember we were cash flow positive since the beginning. We were profitable since the beginning. So we never really spent money on sales, we never had a sales team, we never did paid ads or things of that nature at a significant level level. And so we, when we started researching other competitors that that's out there, even the publicly traded ones, they spend close to 60 to 70% in sales and marketing in some cases and they're burning cash, they're not profitable.

And we looked at as like wow, we don't want to spend any of that money. You know, like let's Just hire more. So when we were talking to customers, they would always say, yeah, we're always willing to bring someone to you. But you know, if you look at other companies that offer these affiliate programs, not only will I refer one or two people, but you know, I'm associated to a community here.

I'm associated to, you know, an association or I have a group myself of 500 people or a thousand people. If we're able to put together a deal, I'll refer people there. And so, you know, at that time we looked at, you know, what was the highest paying affiliate program and someone told us, you know, it's 40% and it was for life. And so from the unit economics, we just kind of looked at it as, okay, Victor, if you are able to go out to your community and you bring people on, we'll pay you 40% for life.

And so we just did that, not realizing, you know, that they would actually do it. And we only had to pay out for a small percentage of the noise that they were able to bring. Because, you know, if you, if you think about it being in a room, you're going to talk about, you know, high level as a product. If there's 100 people in there, everybody hears it.

Now a percentage of people will take action today. But you know, the, the bigger volume point for us was that echo chamber. More people are talking about it, more people, you know, it just becomes top of mind and all that. And so for us, that 40% for life was well worth paying out and something that we still hold today.

And it's our most important driver of our business that that's, you know, how we drive in most of our, our customers is through these evangelists, through these individuals, through these associations, through these partners. And we want them to participate. And that allows us to not need a sales team in so many ways. Well, and just maybe like out of curiosity, like, do you have like any salespeople or you just simply have no, like sales sales.

We don't have a traditional sales model, you know, the outbound sdr, bdr. We don't have paid ads in the same sense of like trying to make sure that, that we're constantly feeding the SDRs and BDRs and so if you look at that from a sales and marketing perspective, that usually covers about 25 to 30% to someone's budget. Just that team alone. You know, for us, we don't have the traditional sales team.

When people come in, we have a demo team. Their whole thing is not necessarily the direct sales component. It's the, we just want to make sure that you get a good experience. Now if we give you such a great experience, we do monitor, you know, the effectiveness of those demos to get conversion there, but look at it as more the value add, not the sales ad.

And then you know, we have another team, you know, from an account management perspective and they, you know, really work with customers to, to make sure that they're getting the right value out of the product. And then from there, you know, if there's rights opportunities to get other product and services, they're able to pinpoint and help navigate customers in that direction. But generally speaking, you know, we don't have the sales team to SDRs, the BDRs, the account execs and things like that that's really trying to you know, solve at the top of the funnel.

And well, you are now pretty global, right? So you do business not, not only in the US but like in so many different places. I mean do you support the community somehow else rather than just only with like 40% take rate? I mean anything you do for community, I don't know, professional development, education, motivation in any other way, non, non financial incentives, anything you may share as you actually created a kind of a network.

Right. Like a very strong network. So a business, business that doesn't have a network effect by definition started like to look like a network effect business, which is kind of an amazing stuff. Yeah, yeah.

You know, if you think about our business, remember there's like this small layer. Businesses always pick up the phone and call somebody to help them. And it's this underserved community of individuals. And so you know, through their journey we realized that there, there is this large community that people are always willing to help and, and for that.

So we wanted to figure out ways to bring everyone together. So we do a lot of live events, we do a lot of online events as well. One of our biggest one is every year in October we do what we call our summit. It's called the Level up summit.

And that's where we bring in, I think this year we're close to estimating around 2,000 people that'll be there. We will have some of the best speakers. You know, they all use or leverage high level, they understand technology in many cases they're all leveraging AI today so telling their stories, telling their ways to impact the business. So we put that together and that's a great way to create a great community.

And people come to Dallas for that now, you know, to the point of worldwide now we're starting to do smaller events, you know, throughout the world. So, you know, just a couple weeks ago, I was in India with one of my other founders, Varun, and we were there really supporting that community. I think we had close to 500 people that showed up there. We partner with other events and other associations around the world that are doing events as well.

We want, you know, I think in many ways we want to help prop up the ecosystem. People talking about high level, but also the ways to help improve businesses. I think that's super important to us. We also have a community of people who are certified admins and we want to give them opportunities.

So we actually pass leads on to this community of, you know, business opportunities that we get every single day. We also do online webinars. Every single week, we do webinars so that people virtually can see impactful ways that other business owners are winning. You know, I mentioned that example earlier, Victor.

You know, when you are able to find a win, we want to put you on a pedestal. We want people to see how you want and show the meat and potatoes behind it. So we host those events, you know, once a week. And so people are able to come in there.

And then, you know, most important part is we have a very thriving Facebook community. Over 150,000 people who are in that Facebook group, you know, talking about different ways to use the product, you know, the challenges, the struggles of operating a business or, you know, maybe they're running into challenges with the software. And so for us, it's important to have that community. But I think the other X factor is that I am a part of the community.

I am in there talking to customers, messaging them, being a part of it. Sean, both of us, all three of us are in the community communicating with our customers. We're jumping on calls with them because it's not so much of curating the community, it's being a part of the community. And I think that's important to us as well.

Well, I think I would quote yourself, I just saw it somewhere that what brings you to here, not necessarily will bring you to there. Yeah. So you scaled up successfully through this model to 80 million ARR. Would you be able to double down and get to a billion dollars ARR.

With the same stuff or you think you will have to change at some point. Do you see like the 1 billion, oh, 100%. And I think it's something that we'll, you know, we're pretty confident in doing. You know, the quote that we always say, you know, there's always this bigger quote that everyone knows is, you know, what got you here, you're gonna have to change it, and it won't get you to the next thing.

And we're on the other side of that coin. It's what got us here will get us there. We just need to take it as a flywheel, compound it, and just keep doing it, and you just build that muscle and get stronger and stronger and stronger and stronger. Right.

Like, just, like working out every. It becomes very boring. It becomes very monotonous. But, you know, the more reps you do, just the easier it becomes.

And so we definitely believe in that, and we think that we're going to move incredibly fast. And, you know, I want to be, you know, one of the biggest companies out there, you know, my partners. And it's not so much of, you know, us just building tools. It's because we're able to work with our community, work with our customers, and providing the best value out there.

And as long as we stay strong to our mission, we're going to. We're going to do some amazing things. Well, you also championed multiply what works, doubling down on core practices rather than replacing them with, like, consultant playbooks. I just, I'm wondering what did work?

So is there something. What you tried and what really didn't work, despite your, like, high expectations that it will. It will, but it didn't. And can you just give, like, a few examples what didn't work out?

I mean, I think, you know, some areas that we, you know, from a core business perspective, it was always trying to figure out, where do we spend money and how do we effectively do it. We were always, you know, I would always say we would wait to get punched in the face a few times before we make the final decision. And good or bad, that allowed us to really think through, making sure that we're going on the right path. But along the way, we needed to be comfortable to pivot.

You know, like, what we were talking about earlier is like, you know, being able to shift quickly if things are not going the right, right way. We need to feel comfortable with that. And, you know, Sean always likes to. To quote Charlie Munger and I think.

Or Warren Buffett, I can't remember, but it's, you know, when the. I can't remember it, but basically it's like, you know, when the tide runs away, you'll see who's swimming naked. And we never wanted to be in that position. Right.

So it's, how do you make smart decisions? How do you always think of like what the backup plan is ahead of time and be comfortable that, you know, the decision that you make today may not be the right decision, but at least it pushes us forward so then we can be agile and shift and make modifications as needed. You know, one that I remember was early on we were trying to move into a help desk system and it was a very costly investments. We had a change, a lot of change management, a lot of things there.

And it was something that I was personally pushing. And I remember it was a big check. You know, it was like, wow, we are turning into a real company. We are, you know, doing this and we implemented it.

And then it was the launch day and every one of our customers had problems and it was just challenge after challenge after challenge. After three days of it, it was that important decision. I'm like, okay, do we like the decision that we made and do we wait? Do we keep going?

We basically said, look, we have, you know, the rest of the week to figure this out and if not, we are reverting back. We do not want our customer to deal with it. And we reverted back seven days later and said we're getting out of this. And so we had to get attorneys involved and things like that to get out of the contract.

But we didn't care. We focused on what makes our customers happy and it is what it is. Like that's our leading voice and if we have to lose money on it, that that's fine. But our customers is what makes us value.

And you know, we kind of play the other side of like just keep trying, just keep pushing, don't worry, the noise will go away. We just decided that's not worth our time and effort. Makes sense, makes sense. Well, coming to like a little bit to the numbers again and values.

So what is like your like Kyle Heller high level, High level, high, high level North Star metric for you guys, what you will want to achieve, like a single number or a single thing, anything in your mind, what you like constantly monitor and care about. Yeah, I mean the metric isn't so much about our revenue. I mean of course we track all those sort of things. But our North Star is not our direct revenue.

Our North Star is our customers revenue. So you know what we like to say is we want to be a $10 billion company as fast as possible where we are generating $9 billion of revenue into our customers pockets. And if we're able to do that consistently every single year, $9 billion, you know, on the back end because we're supporting them, we'll Be a billion dollar year, you know, revenue company. And so for us it's, it's more about how much dollars are we bringing into our customers pockets more so than ours.

And we just believe if we do a good job on that, money will come our way. Do you calculate like for example a blended cost of acquisition and what does LTV to cost of acquisition look like? Although you don't have like a direct sales still, do you like manage to like monitor LTV to cac? Yeah, well, you know, the fun thing about our business is, you know, we, we work with these, these associations, these partners, you know, these affiliates in many ways we don't pay them anything ahead of time.

So our, you know, I like to think that we're a zero CAC company, that there is no cost to it. That's, that's the reason I'm asking. I mean it's like a very weird formula for you, right? Because you do not have like a head cost of acquisition.

Yeah, yeah, but there's an, if you can convert that into like LTV to gac, what the number will look like? You know, I don't know the number off the top of my head but like I said, you know, we don't pay anything to invest in individuals to promote and send customers. So there's no cost of that position. And then you know, when we talk about the LTV side, we are, you know, there's aligned incentives and aligned motivation that you know, here at high level we want to keep the customer long term.

The person that's referring people also want to make sure that customer is successful. And so we're both aligned to make sure because if that person who refers that customer is able to keep that customer for Life, they get 40% on the back end of the subscription. And so, you know, that's really the best way that we look at it is not so much from a CAC to LTV perspective. It's just are we making sure that customer is successful and if they were, if they, they will be successful and as long as they are successful, we're going to pay you 40% for life.

Makes sense. Well, let's switch gears. There are two basically topics I wanted to cover. First, your kind of cultural code, if you will.

So how would you describe the company? What's the culture you maintain? How do you manage to grow? I mean you have what, 700 employees right now or even more so different countries, different cultures.

Anything you develop for yourself, anything in writing like put in stone or it's like all embedded without Being spoken. I don't know, I mean anything you may think of like your cultural code. Yeah. These days we're closer to 2,000 employees around the world.

Yeah. I think we're in 13 countries. The biggest thing, we're not really big on writing down what culture is. You know, I'm a big believer in culture is more about a feeling and an experience that you're able to create.

It does start, you know, from a top down perspective and it's something that, you know, Shover and I are very big on it from the sense of we're a remote first company, everyone works from home and we, you know, we're always on camera, we're always in live Zoom calls. We want. Was it like from 20, 2018? I mean from day one, from the very beginning we were so Sean is in Eugene, Oregon, I'm in Dallas, Texas and ver in Qatar in Doha.

Doha, Qatar. And so, you know, even us three, we just met online. So, you know, we wanted to make sure that we had a culture that, that braided that. And we always looked at it as we wanted to hire the best talent in the world, not the best talent in a geospecific region.

Right. Which allows us to have better opportunities. And so, you know, from a culture, I do believe that it's top down. And so, you know, we use just the standard communication.

We live off of slack, we live off Zoom. We want to have meetings, be present and we want to have that culture. You know, cameras go a long way and it's okay if you're not, you know, properly dressed in primary, you know, that's okay as well. It's about getting the job done.

We created a culture for our teams. As soon as you sign on, you're logging into Zoom and we create breakout rooms. And so it's almost like having your office, you know, that you have and people can float in and out, connect with people, but you're always available. Right.

So we kind of created that as a dynamic, you know, from the other piece of the culture is we, you know, with Slack we try to do annual events. And so we'll do a leadership retreat where we'll fly in a lot of our leaders. And then historically every year we would do two retreats where we'd fly in majority of our team on the east and west side and take them to a fun vacation, you know, a fun trip that we are able to not only connect with team members, allow them to connect with their teams as well as cross collaborate with other teams as well.

And then do some unique experiences. What I'm excited about this year is we're no longer splitting it east and west. We're actually trying it where we're trying to bring the whole world. I think we'll have close to 1500 people.

That's all going to fly in almost every. Yeah, so we're really excited about that. But at the end of the day that's what we do from an employee side. But our culture also is really representative of our customers and so we do many events with our customers and then we host our event that we'll fly in a lot of our team to be a part of as well.

So how close can we stay connected? Because I think the human experience, even in the new agentic AI world, the human experience is always going to win. And so we want to make sure that we formulate and create that tight bond there. Yeah, totally true.

So I deliberately wanted to speak about AI at the end of our session. So I've seen like a lot of companies raising now money for what is called roll up strategies and many of them are trying to basically convert agencies, marketing agencies into like roll up strategies. Do you see any threat of losing your customers because your customers will be gone? I mean your customers are primarily agencies.

So obviously this might be a kind of path going forward because. Well, obviously I'm sure you share the view that all middlemen will go, right? I mean there will be no need for a middleman in many cases and agencies are at risk. So do you see any kind of threat to business through that or anything else?

You would imagine that what AI can bring in terms of disruption into your market in particular when people will start using. You said very complex tools, right? Very complex tools. I'm a software engineer so I'm wipe coding through my life but I never seen doing it so easy.

Now I just wipe coded CRM platform in two weeks time. Not like really spending much time on doing this. And now we are using kind of like CRM which is self developed. I mean to say that something, what you build now might be also at risk by being replaced through like a simple command line where you just say what you need and that's done.

Anything you think of like that, obviously I'm sure you're discussing it a lot. So anything how you see the future for that? Yeah, I think as a world and as an economy, this is just the next generation of the same conversations that we've seen historically. Back when, you know, probably 20 years ago, 30 years ago, when you wanted to buy a computer you had to buy something off the shelf.

You'd have to go to a Radio Shack or Circuit City or Best Buy to buy a computer. And then immediately the world got flooded because now you can just buy a computer case. You can buy, you know, graphics card, you can buy a processor, all a cart and custom. You can custom build your whole solution.

Right. Did we see all the big, you know, hp, Dell and all those, you know, they're, they're all thriving today. They've all figured out that, you know, while have some. Not all, not all, not all.

Some, some figures out, some not right. I mean we know those who figured out right. I mean others we don't remember exactly. The best players will always figure out how to, to do it right.

And as consumers, there's always this idea that, yes, you can do things yourself, which is why they call it the DIY world. You know, I was giving this an analogy the other day during COVID the DI world exploded because, you know, instead of, you know, I'm at home all day, right? Now's the time for me to renovate my bathroom. I can go to the hardware store and buy all the tools myself.

But we also saw an explosion of people paying outside contractors to doing the work because you would start and then to realize you don't have the expertise and more importantly, you don't have the time to keep pushing this on because you don't have the passion. So in that lens for us, the way that we think about it is do we really believe that a plumber is going to vibe code their way into a new CRM? At some point they got to go back to becoming a plumber. And so Victor, you said that you built a CRM.

Well, you're going to build it and out of the box it's going to be fine. That's kind of the first case. But when you need that next step or you run into a bug, or you run into a system challenge, who's going to do that work? Right.

It's now you who now has to go back into a human agent. Yeah. Or whatever it might be. You have to now sit down with that agent to now rebuild the system to making the patches and things like that.

So are you now essentially becoming an engineer and sure, now you're using AI and coding and things like that to help build it and move it on. But are you willing to leave your post and what you do today, Victor, to now becoming leading agents to build this? Right now effectively you're becoming a CTO in many cases. And all the while, what are you building?

How are you even going to operate the CRM if you're building the CRM to then grow your business? And so I think that is something that people are. I think the opportunities are so much better and making it easier. However, does human capacity, does the human relationship change?

You know, is a dentist going to stop becoming a dentist to learn AI, to then vibe code their. Their solution and basically give up helping their patients? Right. Like that to me is kind of where I don't think that the world is going to 100%.

I think what's really interesting and happening, though, is the people that have the bandwidth that, you know, have the technical capability, how now have access to a wide array of tools that they didn't have before to build and create new innovation. So we are up for a disruption, but I don't think the disruption that is happening today and what we'll see in the future is, you know, drastic effect that people are expecting. You know, the plumber, the electrician is always going to be the electrician, you know, until.

Until it will be replaced by kind of a humanoid robot or whatever, right? Most, probably. Most. Most probably not coming soon.

Yeah, yeah, exactly, right. Like, you know, when Uber came out, there was a lot of fight with a lot of, you know, the cab mafia, the taxi cab mafia in all these cities. Right. And they still exist.

If you go to New York, there's still a line for taxi cabs. Even though Uber is readily accessible, there's always going to be protection into it. And so maybe at some point in the future it's all going to go away. But, you know, I think.

I think. I think with autonomous. Autonomous. Full autonomous vehicles, it will.

Right? I mean, at some point, there will be so much. At some point in the future. Yes.

But here's also the other thing. Are you worried about the future or are you worried about today? You know, and I think most small businesses are worried about the challenges that's right in front of them today. Absolutely.

Versus what's happening in the future. And as things progress in the future, they're going to be apt to trying it and testing it out. But, you know, this is back to that. You know, I love this, you know, how we're talking about pivoting and when is the right time.

Your tolerance of risk continues to get minimized when you have existing revenue today. So, you know, even the electrician or even the homeowner, when you have a home that you spent a lot of money and time on, are you going to trust the human to come fix it or this new robot. And it's going to take some new robot, you know, some new autonomous, an agent, you know, to grow to a significant scale before a homeowner's going to feel comfortable saying, I don't need a human anymore, I need an electrician.

So it's playing this balance of where the future goes, which no one really knows. Everyone's trying to predict where it's going to go. But, you know, I look at it as, what are the technological advances that we can have today and in the short term that's going to provide businesses success and growth today? So that's kind of the caveat.

And I think, you know, for us, this implementation layer I think now has access to so many cool tools that they can create innovation to help businesses forward. Yeah, I totally agree. I mean, for sure. I mean, people will find out what to do next.

Right? I mean, any innovation cycle brings more jobs than eliminates. Exactly. This cycle is going to do the same.

I mean, and I believe that every cycle had its own fears and projections that a lot of jobs will go. And it really happened. But so many were created. Right.

So I totally got it. Yeah, I'm with you on this for sure. Yeah. So maybe my last question, Robin, and that was exciting conversation.

Thanks for all these insights. If you send a message and give a piece of advice to yourself back to 2018, when you founded the company, what that would be? That's a good question. Looking back in 2018, I think the only advice that I'd give myself is, don't worry, you'll figure it out.

Uh, you know, as that sounds, it's, you know, I had great partners that I met, you know, and it was all by luck and all by chance. And a lot of it was just always saying yes, like, just keep trying something. You know, in many ways, my risk tolerance was very high to being able to be agile, even when I had a, you know, decent sized agency with 30 employees. And I was always willing to try new things and get to that.

And then, you know, looking back, I'm just so fortunate that I still kept that same mindset of like, just say yes, you'll figure it out. You'll, you know, just always try to figure it out and never let a no stop you. It's just a no in many ways is just a hurdle. You know, how do you convert that to a yes?

And it may not be the original idea that you had, but that new version and making it a yes, you know, could be so much more beneficial. And so I would just be telling myself, don't change, just keep with that same mindset and keep going. Thank you Robin. Thanks for this amazing conversation.

So this was Robin Alex, co founder of High Level and Victor Adlowsky, R136 Ventures and our episode of podcast Ventures from the Valley. Please watch us in YouTube, Spotify and many other channels. Thanks Robin. It was really great to speak.

Yeah, no it was a great conversation. Thanks so much Victor. Thank you. Ventures from the Valley is brought to you by R136 Ventures.

To find out more about R136 Ventures and how we scale mid to late stage startups by unlocking their true potential through investment, visit R136VC. We'll be be back soon. In the meantime, make sure to click and subscribe so you don't miss any further episodes. On behalf of our team here at R136 Vengeance, thanks for listening.