Todd Merrill:

Hi, welcome to Tales from the SkyLounge. It’s a podcast about business, consulting, and venture investing. We get out there in the world, we talk to people who are making it happen, and we get their stories. And if you could like and subscribe, it makes our producer very happy.

Today in the SkyLounge, Joe Gruca. Hey Joe, welcome to SkyLounge.

Joe Gruca:

Good to be here. Good to see you again.

Todd Merrill:

Yeah, it’s fun catching up with an old friend. So Joe, who are you and what are you working on?

Joe Gruca:

Who am I? So my name is Joe Gruca, as Todd said. Actually, I just recently made a bit of a career change. I’ll give you a little bit of my background here in a couple of seconds. But I’m super excited about joining TechCXO. I recently joined them as a partner in their revenue growth organization. I have a passion for helping technology CEOs accelerate their growth. I’ve done that for the last 10 years with private equity-backed companies and just finally decided I was going to kind of sort of hang up my own shingle. And I really enjoy the opportunity to do that with a variety of different companies and things. So fairly new to the practice, fairly new to the firm, but super excited about that opportunity for me. So yeah.

Todd Merrill:

Yeah. And then it’s always fun to see how people get to TechCXO. It’s this background mafia of CFOs that are around Atlanta. I have my own personal story about how I found them. I was much the same as you, founder of a startup, got some investment. Hey, you need a CFO. Do you want to tell that story about how you found your CFO?

Joe Gruca:

Yeah, I’d love to. So I decided after kind of doing 10 years worth of grinding as a CRO with a variety of private equity-backed companies, I was going to go do this fractional thing, again, as I described. And I kind of hearkened back to my experience when I was a technology CEO. And we were in the process of trying to raise our first round of capital. We were going to try to go out and raise our A round. And I didn’t have a CFO at the time. It was me and a couple of other co-founders and some developers and whatnot. So I didn’t even know what the heck the process was of trying to raise capital. And I was introduced to this company, TechCXO. TechCFO, I think it was at the time. And we actually hired a gentleman by the name of Neal Miller. And a lot of people in the Atlanta market know Neal exceptionally well. Just a great human being, just a great human being. But Neal was absolutely instrumental in kind of helping us raise our capital, first round, raise our next round of capital.

I’m sure that’s another part of the story. But we ultimately successfully exited that business. Neal saw us all the way through the exit of that. So, you know, it was through that experience that I got to see firsthand how a company like TechCXO could help technology founders and things. And so again, when I decided to do it, Neal was one of the first people I reached out to when he was gracious enough to help sponsor me through the firm. And first, whatever, six weeks or so has been amazing.

Todd Merrill:

And, you know, we’ll talk about HireIQ through the ages. Yeah, it’s a really cool nexus of a lot of really interesting people. And it’s a nice little company that did okay. Not a unicorn, but, you know, successful in a lot of interesting ways.

Well, let’s go for that. So, HireIQ, you started that in, what, 2010, somewhere in there?

Joe Gruca:

God, time becomes a blur, but yeah, that’s exactly right.

Todd Merrill:

Yeah. And then what were you doing? You know, we talk about economic cycles, you know, 2008, it was a global financial meltdown. A lot of people, it’s kind of similar to now, you know, everybody’s kind of stressing out about, you know, you’re working in a very large company at that point in time. I can’t remember which one, but you’re a VP of sales or?

Joe Gruca:

Yeah

Todd Merrill:

Okay. And then, I don’t know if you want to name names, but you got laid off like a lot of us, right? And then just the same thing is happening today. Lots of big companies are laying off 5%, 10%, 20%, you know, it’s just this crumbling kind of wave of layoffs. You want to kind of talk about that time in history and what that was like, and then kind of what made you want to go off and do a startup? Maybe talk about that time in your life.

Joe Gruca:

Sure, 100%. You’ve started the story exactly correctly, really well. I’d love to tell the story that I came out of the womb dying to be an entrepreneur. That wasn’t me. I was a corporate American guy, kind of rising up through the ranks, had a pretty successful career going with a company, Computer Associates, at the time. Got a phone call on April 1st and said, “Hey, we’re going to eliminate your entire department, your job is eliminated. And if you’d like to move to Islandia on Long Island, we’ve got an opportunity for you.” And I was like, okay, what’s behind door number two? And door number two happened to be a pretty decent severance package. And I said I’ll opt for door number two. And I’ll never forget, like I literally that day, I was helping coach my kid’s baseball team, etc. And talked to one of the assistant coaches, “Hey, how was your day?” I said, “Kind of crappy. Lost my job today.” And he was like, “Hey, I know these two guys that are kind of sort of starting the software company. Your job was in software, right?” “Yeah. I was in enterprise software.” “Do you mind if I introduce you? I think they could use some help. I think their idea is pretty cool.” So I was introduced to these two founders and man, I don’t know how deep you want to go on this story, but…

Joe Gruca:

… sure, yeah. It’s a great story. I love these stories.

Joe Gruca:

Yeah, it’s a great story. Again, I never planned to do this, but so I got introduced to these two guys and the concept was I was going to help them do consulting services and they didn’t have any money to give me. So they were going to give me a little bit of equity in the company. And Todd, it was one of those deals that I would have never seen this thing coming, but I spent the first week with them and it was kind of cool. And I spent the second week with them and it was really cool. And by the fourth week, I’m going like, I’m bitten. Something just bit me and it was the entrepreneurial bug. Subsequently, I invested some of my own capital, some of my own money into the business. They asked me to be the CEO of the company. And it was just, I will tell you, if you were to ask my wife, it was probably the absolute worst thing I could have done. We had four young children. And I knew that I had a little bit of a severance package that could help get me through. But all of a sudden, now I’m all in on this startup thing, right? And to the point where we were going to have to raise some capital and we went through the whole friends and family angel round, etc. I don’t know how much time we have, but I’d love to tell the story of the company…

Todd Merrill:

…yeah

Joe Gruca:

… because I think in some ways it was a little bit before its time. I’ll try to give you the elevator pitch as to what the company was. So when I joined these two guys, the concept was if you’re familiar with what an applicant tracking system is. I know you are Todd. I haven’t spent some time here, but an applicant tracking system essentially allows applicants to now go apply to a website for a job. And that keeps all that information and the HR department can use that to figure out who they’re going to talk to and eventually hire.

Well, these two guys had built the company before I got there to become an applicant tracking system specifically for kind of the mid-market SMB space. It was a really good user interface, with some deep graphics, etc. And I was going to try to help them go sell that product as they were building it. And over and over again, we tried to sell the product. When I was trying to go out and sell the product, we kept hearing the same thing over and over again. I don’t know that I need an applicant tracking system. I don’t know that I want to buy what you’re selling, but man, this little cool piece of technology that sat within this applicant tracking system kept capturing my attention. I’m not the best sales guy in the world, but when the customer says, hey, but can I buy that? We had to pivot in the business. We went from this notion of being an applicant tracking system company to this really efficient, really unique automated interview process.

So think of high volume, high turnover interview environments, call centers, quick-serve restaurants, convenience stores, etc., where the challenge for the recruiter is I have to try to find an applicant. I have to schedule a phone interview. And it was super inefficient. We could essentially customize that interview process. The recruiter could send a link to 50 applicants overnight. 12 applicants could respond and they could customize and voice record their responses to these interview questions. So just the initial concept was we were going to create efficiency in the high volume interview process.

The thesis of the company was two things. We were going to continue to add on video interviewing, assessments, things like that so that we could start to help the interview process get more effective. But the real play, this is where we, I think we’re in some ways way ahead of our time, as we were going to build AI sophistication. Before AI was even a word, it was more machine learning. Think of all the data that we were collecting. It was literally thousands and thousands and thousands of interviews. We were going to then, we had these really cool voice engineers that were going to start to measure things like voice attribution, energy, enthusiasm, empathy, etc. And between the phone interview, the assessments, the video interview if we chose to do it, and then this AI sophistication, we could predict the probability of success in different high volume environments, outbound sales, customer success, etc., etc. So it was super cool at the time. Again, it was just in some ways way ahead of its time.

Todd Merrill:

Oh yeah, for sure. Yeah. And that was machine learning back when you had to Ph.D. or at least a master’s to begin to talk about math. And then really hit gold and had a lot of success there. Interviewed hundreds of thousands of people worldwide in multiple, dozens of languages. Very successful.

Joe Gruca:

Yeah. Sorry, to your point, the other thing we really did, one of our first big customers was Delta Airlines.

Todd Merrill:

Oh wow!

Joe Gruca:

And we have just had a brilliant, can I name names? Can I tell them?

Todd Merrill:

Yeah, yeah, sure.

Joe Gruca:

So a name that’s probably familiar to a lot of folks here in the Atlanta startup community, Rob Forman was one of our first technical engineers and Rob went on to become the COO. That’s another story about how people have flourished in their careers. But Rob went on to SalesLoft and the rest is history, two and a half million-dollar exit, right?

Todd Merrill:

Killed it, killed it.

Joe Gruca:

But Rob built this technology. The problem Delta was trying to solve was that they were hiring all of these flight attendants who could speak multiple languages. So think as international travel started to take off, they wanted German-speaking flight attendants or Spanish-speaking flight attendants or French-speaking flight attendants, etc. But they were struggling with every time the candidate would say, sure, I speak fluent French, they’d get grok on the line and I couldn’t speak… French fraud, right? That was…

Todd Merrill:

… bonjour.

Joe Gruca:

He was able to build this application such that we could really make sure that they could speak the native language. And oftentimes they invert verbs and nouns and things depending on them and it was brilliant. Delta Airlines did tens of thousands of interviews to figure out who were the flight attendants that could speak that native language.

Todd Merrill:

Really cursory. Like, can you at least kind of, sort of speak, you know, at a native level?

Joe Gruca:

Yeah. That’s it.

Todd Merrill:

Yeah. Quick assessment. Didn’t take very long and then you got in and out and then you got an idea real quick who’s probably a speaker, who’s not. And do it cheaply and do it online.

Joe Gruca:

Sure

Todd Merrill:

So, you know, one of the cool stories, right? And then I had a little brush with HireIQ for a couple of years too, but how cool is it? You know, this little company, you know, touched a lot of people that went on to do really amazing things. You know, HireIQ itself was a great little story, but you know, we all have our stories coming into this little startup. Be nice to everybody cause you never know where they’re going to land. You know, the investors were interesting. The board members were interesting. The founders are certainly very interesting.

Joe Gruca:

Yeah

Todd Merrill:

You know, the teams that came and went and handed off all went on to do super interesting things and are now at different other things, different venture companies. I know Dan Drechsel handed it off when you left. He’s over at Buckhead Investments, doing great things over there. It’s an interesting case study in how companies come and get, you know, companies get formed, have some success, change people. But then, you know, it’s composed of lots of different intersecting story arcs, and then, you now have a bunch of very interesting friends when you exit that for whatever reason, and then go on to do other things. And then here we are again, we’re kind of in the same company again. So how cool is that with Neal, Neal Miller? He was the longest, I think, he had the most exposure to that company of anybody, the longest run.

Joe Gruca:

Yes

Todd Merrill:

So how fun is that?

Joe Gruca:

I think you’re exact, you know, look, I’m telling you, like at the time, one of my most vivid memories is I was into this thing. Like, I was going to do it and get everything I got. And my wife was just an amazing advocate and all of this thing. But I remember her being so committed to it saying, should we really think about selling the house? And like, do we need to like, and you know. Not to get too, whatever, I don’t know, personal or melodramatic or whatever on the thing. But I just think about the life lessons that happened.

Todd Merrill:

Yeah

Joe Gruca:

Personally, it was the worst thing I could have ever done to me and my family. But my children are different because of that. I’ve got two young boys who are trying to become entrepreneurs, who are doing some cool things. They’ve learned to live with a lot less than, you know, maybe we were accustomed to at one point time running big global sales organization with Computer Associates and things. So I just think beyond the impact that had professionally, personally, just the ripple effect has been amazing. And I think honestly, like, I think for what I’m choosing to do right now, professionally with TechCXO, it sounds cliche, but it’s the truth. I walked a mile in their shoes. Many of the clients and prospects and things that I talked to are younger, early-stage technology CEOs, right? They’re building a great product. I’ve walked a mile in their shoes. I know what it’s like to, you know, try to start from zero and build it up to the first million dollars. I know what it’s like to try to go. You know, people have asked what was your typical day like? I’d stop at Costco. I’d buy a case of Red Bull.

Todd Merrill:

Yeah

Joe Gruca:

I’d make the coffee, and take out the garbage. Then I would make every cold call, a bunch of them, 50 of them a day. I would do every demo. I would try to make every sales call, do every contract, and create all my own sales collateral. Then I’d put on the classic uniform of the time, a pair of jeans, a nice shirt, and a blazer. And I try to go raise a million bucks. Right? So I walked a mile in their shoes. So I hope that makes me a more, I don’t know, believable, you know, believable consultant for them and their business. 

Todd Merrill:

It changes a man going through that experience, but it does.

Joe Gruca:

Right

Todd Merrill:

So, yeah. So, okay. So you were a corporate America VP of sales, you know, life is awesome. You know how to sell stuff, you know how to run sales organizations, you know what scale looks like, then you’re thrust into this. Everything is on you. You’re not just selling stuff, but yes, you’re selling everything, but you’re also the CEO, and the founder and the controller and the chief marketer and everything and just figure it out. So now you’re on the other side of that experience and now you’re having those same discussions in corporate America with, you know, certainly at TechCXO, you get to talk to the earlier stage people, but you’re also addressing the upper end too. How do those discussions change now that you’ve got that insight and that experience, even at a corporate America level, you find that you have insight, you know, in corporate America, you’re siloed, right? And then now you understand kind of your counterparts in that executive round table.

Joe Gruca:

Yeah. You know, I don’t know if I’m going to answer your question exactly the way you intended there, Todd, but you know, it’s like, the biggest thing that I needed at the time I was a CEO or whatever is I needed to know where the landmines were. I blew myself up an awful lot, right? Ask, ask Rob Forman. I was always in Rob’s office trying to change the product because Customer A said to go change the product and they would buy it. Well, it was baloney. That was just like FUD in the sales product. So I stepped on an awful lot of landmines. I think what I can do just through some of these experiences, I can kind of sort of help them see where those landmines might be in advance. So maybe they blow themselves up a little bit less frequently than I certainly did.

The other thing that I’m kind of coming to understand is because I don’t mean to sound like I’ve got all the answers or like I’ve know the answer to every question, but I’ve got enough gray hair and I’ve been around enough experiences and I’ve sold enough different stuff in different kinds of companies that I can kind of build a predictability model around if you do these kinds of things, you increase your likelihood of success, regardless of whether you’re selling, I don’t know, products, services, anything else. I don’t know if that’s exactly your question, but …

Todd Merrill:

… yeah. Well, you know where the middle of the fairway is, not that you’re going to be able to hit it there, but you can say aim that way.

Joe Gruca:

Yeah. Yeah.

Todd Merrill:

If you’re going to do another startup today, how has sales changed? What would you do differently today? Knowing what you know, and then we know that, you know, part of sales is, it’s always people, right? And that doesn’t change. And then part of it is there’s a new way, there’s always new technology for finding people, addressing people, getting your message out there. What’s different today than when you started a decade ago?

Joe Gruca:

Yeah. Again, it sounds so cliche, like it’s the whatever Mad Men, where there were two martinis and a cigarette and you’d close a deal kind of a thing. That certainly isn’t today, right? Like, who even goes into an office anymore? Who, you know, you’re selling big… back in the day when I was selling enterprise software for Computer Associates, we literally had this phrase, like the CA bus would pull up. We would fly six people into a customer location. We would plan ourselves there for a day. We would take them out for the three-martini dinner and, you know, rinse, lather, repeat over and over again. Who does that any more? Right?

Todd Merrill:

Yeah

Joe Gruca:

Nobody buys that way. They buy over Zoom or they buy over whatever. But I also think that that makes you… you have to sharpen your sales game a little bit, right? Like, I didn’t have a, you no longer have a bus that can go in and sell that. I have to be technically savvy. I’ve got to have good relationship skills. I’ve got to know my product myself. I’ve got to kind of know the market that we’re in. So, it’s definitely a much different sales process. You and I were chatting a little bit, I think, you know, recently we had lunch or something. I used to take a lot of customers to golf. And for me, some of that was just, I wanted to know who I was dealing with outside of, and even people I work with, I have this philosophy that I wouldn’t hire people unless we’d go play a round of golf sometimes. Cause you learn so much about honesty, integrity. Did they get a six on that hole or did they really get a 12 on that hole? Did they move the ball? You know, it sounds stupid and cliche, but I learned about the makeup of the person. Were they hotheaded and they lost their temper? Did they take themselves too seriously, etc. 

So, you know, I think a lot has changed in the last, whatever, 10, 15, 20 years in terms of how you hire, how you sell, how you interact with customers, etc.

Todd Merrill:

And it’s the mechanics that are different, but the people part of it is still the same, right? You still have to convince somebody of the value proposition and why they need to buy and how this product or service is going to change their lives positively, you know, so they part with money.

Joe Gruca:

Yep. Yep. Entirely. Entirely.

Todd Merrill:

So, at TechCXO, what’s your favorite playbook for those early-stage entrepreneurs? How do you set up an early-stage sales motion? What would you coach people to set things up? I know AI is kind of a thing. You know, do you hire too early, too fast? Can you really automate everything? Or what can or can’t you look to automate? And then how do you interact with like marketing as an example?

Joe Gruca:

Yeah. I’m probably going to give you a two long-winded answer. So feel free to give me the _____ if I’m rambling too much, but here’s the situation I see over and over again, Todd, as I’ve started to engage with a lot of clients and prospects and things, they’re early-stage technology-led companies. The guy or gal that started the company is really, really smart and has built a really cool product. You know, maybe they’re a Georgia Tech grad or a Georgia grad or whatever, Emory grad. And so they’ve built this amazing product. And then they become the best salesperson. A, because they know the product well. They built it. Nobody is more passionate about what they’ve built than that startup CEO, etc. And all of a sudden now they’ve got something, right? They’ve got something. They’ve achieved a couple of million dollars or whatever happens to be in sales. Now they’ve got to make a decision how do they go from 2 to $10 million? And they don’t know how to do that, right? They know how to build a great product. They know how to sell them and probably some of the deals they closed because I identify myself as the CEO. I’m just really, really good. And I know that thing, but now how do I get to replicate that for Sally or Johnny, whoever I’m going to hire next. So a couple of mistakes. Sometimes I see them hire too many people too fast. I raised a little bit of capital. I’m going to hire five salespeople. I would say that’s mistake number one.

Todd Merrill:

…right

Joe Gruca:

….to do that. Don’t over-hire. Like, go hire the first one and let’s get them successful. And let’s figure out what the process needs to look like. And once we get Sally, our first hire successful now, how do we hire the second Sally or Johnny or Bobby or except, but let’s have a, and I think not to sound braggadocious, but I think what I’m pretty good at is identifying that very repeatable selling motion.

Todd Merrill:

Sure

Joe Gruca:

Let’s get the first one successful. Let’s learn as we go. Let’s continue to tweak that model. And then let’s hire the second one and the third one, etc. So that’s kind of lesson number one. I think you touched on AI. It’s interesting because very cliche again, but AI is absolutely changing the way we sell and service customers and things, like, in a totally different switching gears here. I see my last organization, we dramatically changed our customer success organization. AI now, like I used to, in the old days, I’d have to literally listen to hours and hours of calls and then listen for buying signals and figure out what the messaging needs to be. AI does all that stuff for you now, right? You record the call, you do the transcription, you look for common concepts, you make recommendations. AI will make the recommendation to you. So it’s different, not only in terms of like those early, but just the way you can use AI to drive some of that self-sophistication and accelerate that growth is crazy versus where it was even just a few years ago.

Todd Merrill:

So yeah, like a gong and that kind of thing that, you know, initially it was like, “Hey, you still got to listen.” And then you mark like certain things, go back, listen to this. And now you’re saying you could just get an agent to go through these transcriptions and figure it out.

Joe Gruca:

Yes, yes, exactly. But I’m sorry, I’m changing gears a little bit, but then now back to the technology founder that I just talked about.

Todd Merrill:

Yeah

Joe Gruca:

Even if AI said, here’s what you need to do, do these four things. They’ve probably never done it, right? They’ve never been a salesperson or a sales leader to try to coach.

Todd Merrill:

Right

Joe Gruca:

The difference between the what and execution is the how. Like, how are we going to do some of those things? And that’s where I think, you know, whether it’s Joe at TechCXO or any other fractional leader, somebody that’s got those experiences, you can take that what and help them to apply the how to build that repeatable success model.

Todd Merrill:

You know, at our company, everybody is, you know, yes, you’ve been a C whatever, but you’ve probably also been a COO or CEO, you know, there’s a lot of entrepreneurial spirit. And I think that there’s something that when you go through that crucible and you’ve got responsibility for cross-functional responsibilities, you begin to see things differently, right? I always like to coach founders. You’re probably going to sell the first 10, regardless of whether you’re a salesperson or not. You have to make enough phone calls, talk to a lot of people, beg, borrow, steal, and get people to sign up for something. You’re going to probably be embarrassed by the first three deals and that’s okay. Right?

Joe Gruca:

Sure

Todd Merrill:

But you’re not going to figure it out until, and it’s kind of like exactly what you said. You’re not going to figure it out until you have a bunch of conversations with a bunch of prospects, you know, and then you’re going to figure out, okay, it’s probably not exactly what you’re selling. It’s a little bit off and then you hear the same thing over and over again. And then that’s the skill of an experienced veteran of, that’s what we need to sell. And then I think, you know, going back to what you’re saying, there’s kind of an anti-pattern with just make whatever the customer wants right now and if you’ve got an over-eager engineering staff founders, you’ll do it, right? And they end up with a bunch of spaghetti in no direction and no commonality. And then how the heck are you going to market to that with an ideal customer profile? You just not, right?

Joe Gruca:

Yeah

Todd Merrill:

And then that’s where the experience comes in. It’s like, okay, here’s why. You know, I got asked the other day, what’s AI not going to be able to do in the future? And I always answer the why, why are we doing this? And then what’s it good for and then why does it matter? And I think once you figure out, you have a bunch of conversations, you listen for the commonality and then what’s missing in the market and you go, okay, these are a couple things that we need to hit on. How do you pivot that feeds into marketing, your messaging in the market, and what your next phone call is going to be about? And hey, let me ask you a question that came up the other day. And then asking good questions, I think is another. You know, throw up and show up as another anti-pattern. You just kind of, you dial for dollars. Somebody says hello, and then you start pitching.

Joe Gruca:

Sure

Todd Merrill:

It’s like, you know, that’s another anti-pattern. Yeah. You got to get out of that. A seasoned vet can help you.

Joe Gruca:

I think you’re spot on Todd. I think about what I used to have to go through in pre-call preparation before I’d engage with a prospect. Right? I would have to spend hours looking at their 10-K or looking at their annual report or looking on LinkedIn and identifying and going searching the internet for… I’m going to check ChatGPT now and say, I’m going to go talk to this client in this space. Here’s their.com. Tell me all their competitors. Tell me the pain they might be experiencing. How would you, and my pre-call prep go from three hours to literally three minutes kind of a thing so I can be a … I think it’s one of your earlier questions and points. It’s totally changing the way we sell today.

Todd Merrill:

And you can have a much more meaningful focused conversation that you’re well prepared for.

Joe Gruca:

Yeah

Todd Merrill:

That’s not going to waste people’s time, right? I know you have this problem. I know we have the solution. I just need to understand a few things and then let’s see if we have a love connection here.

Joe Gruca:

Yep. Yep.

Todd Merrill:

So you mentioned Forman, you know, he went off and did SalesLoft, right? And then there’s that whole SDR thing that those guys really pioneered. You know, do a bunch of, it turns it into a math, a gearing ratio of, you know, how many outreaches can you make, and people call it spam or cold calls or whatever. Is that still the game? Have we polluted that pool or that vector of reaching out and touching the people or how has that game changed with some of these automation tools?

Joe Gruca:

Yeah. You’ve opened up a can of worms there, Todd, because if you kind of, I don’t know, peruse LinkedIn, there’s all kinds of arguing perspectives on this thing. There are those who will say the cold call is dead. You know, nobody does any more cold calling. And if you do, every time you get a cold call, it says spam and you know, it’s not effective. And then there are those that say, you must still find a way to reach out to them and try to have some conversation. And those that can figure out the art of navigating the whatever, spam block or whatever, there are those that will say, you know, send a hundred emails. I’m a firm believer that there is no right or wrong answer to this. This is a stupid overused analogy that I use all the time, regardless.

Todd Merrill:

Yeah

Joe Gruca:

My mother is an amazing cook. Like, I live for a meal my mother cooked and I try to replicate those. I said, “Mom, can you give me the recipe?” And she’ll say, no. I choose not to. I don’t know. I put a little bit of this, and that’s what I think is analogous to selling today. Don’t try to follow the exact playbook to figure out how to make it your own. Use a little bit of AI, use a little bit of practice, trial and effort, make a few cold calls. But if you’re looking for the holy grail of do it this way all the time, it just doesn’t exist. 

Todd Merrill:

I think it’s a meet your customer where they are, and then you kind of to back into that, okay. Who are our customers? Right? Let’s segment them and figure out who’s going to buy and why. It might be a C-level exec. It might be a director or manager, or it might be a line software engineer, depending on what you’re selling. Right? And those are very different people, depending on who you’re selling to. If you’re selling a sales application, call the salespeople. They always answer the phone and they want to talk to you. I want to hear your pitch. Let’s go, you know. If you’re selling to an introvert, like a software engineer or a controller, you know, financial controller, that’s the last thing they want is another phone call and their phone ringing. And a matter of fact, the phone is in the other room. Don’t call me ever, you know. But they’re on forums, you know. Maybe you’re something like that. And just have to figure out where your customer is and where they’re hanging out.

Joe Gruca:

Sure

Todd Merrill:

And then being there when they’re ready to buy, I think is a lot of the problem.

Joe Gruca:

I couldn’t agree with you more, Todd. And sometimes you’re not even talking to the right customer. Like, I will tell you, just go back to my HireIQ days. We had a thesis going into this thing as to who we were going to go after. And it changed dramatically. And then it changed again. Like, we didn’t land on this high volume, high turnover. That’s our ICP until three iterations of who were we going to talk to, and what was the messaging and things. And who was the right contact within there? So even when you think you’ve got your pitch down, you might be pitching to the wrong person. You might be pitching the wrong thing. So we had to iterate several times to meet the right person at the right point to try to begin selling the right application. 

Todd Merrill:

So go back to HireIQ for a second. You mentioned it’s a little too early, right? People weren’t, ML is a little hard to do. Telecom was difficult and then at some point, we figured out how to do so many things in the browser versus on a phone.

Joe Gruca:

Mm-hmm

Todd Merrill:

You know, do you feel like that whole deal would have done different, you know, been more or less successful at a different point in time? You know, if it was, you know, is timing kind of a big deal in it? How do you know? Yeah, how do you know and then what do you do about it?

Joe Gruca:

I don’t know if I can tell you how do you know, but to your opening question about like, why do I think it was too soon, I guess, part of our pitch was, we’re going to begin to predict the likelihood of success in whatever role you’re going. And we’ve got all of these data attributes that will help the voice, the assessment, whatever. And we would do these predictability models. That was a foreign language. I might as well have been speaking in German. Like what’s predictable, what’s a machine like that? Those didn’t even exist. If I said that today, they’d say, “Oh, you mean like AI?” We’d instantly, like, I just think there’d be, first, HR is tough because there’s all legalese and, you know, you don’t want to be biased towards any, whatever, individual or class. But to be able to have that notion of we can use AI to predict the likelihood of success, that we are way, way, way ahead of our time. And I know we did some technology things that you and I were chatting about. Like it would, probably, the product itself would function much differently today than it did back then. Right?

Todd Merrill:

Sure. Well, and then you wonder if there’s such a thing as too late as well. Right? So in today’s world, like right now, today, you wonder, you know, is it too saturated? Could you even go to the market with a tool? And then how do you differentiate, even though it might be completely superior technology, you know, ChatGPT, he’s got all the answers, and well, maybe they do, maybe they don’t, we don’t know. Right? But it’s ubiquitous and I don’t know. It’s one of those things, you know, timing is a little bit of luck, a lot of bit of skill to recognize. I think it all kind of goes back to asking a lot of questions, seeing a lot of people, and talking to a lot of prospects.

Joe Gruca:

Yep

Todd Merrill:

And then figure it out quickly. You know, I think going through my startup journey, I think it’s the same for you, you know, violence of execution, and strong culture are two things that I’d be huge advocates for in an early startup.

Joe Gruca:

Yeah, you’re exactly right. And, you know, I referenced Rob earlier in the thing. Rob and I never disagreed like violently or anything, but you know, we’d have these classes where I was just the dumb sales guy and he was the really smart product guy, and he’d have to sometimes go sell, like sell what you got. You know, I’ve worked for a great sales leader who used to use this phrase, sell what’s on the truck, right?

Todd Merrill:

Ha ha ha, yeah.

Joe Gruca:

Rob was a sell-what’s-on-the-truck kind of guy. The mistake I made as an early CEO, is I chased every client interaction. And Rob was magnificent at this, that I’m using different languages, but sell what’s on the truck, Joe, let’s sell what we got first. You asked a question earlier, which I didn’t answer probably previously. I was distracted. I was doing some of that stuff. I would do that differently now. I would do a much better job, I think, of selling what’s on the truck. And part of the rationale that Rob could turn, we can’t keep spinning cycles, right?  Like, I go have developers write code all day. Like, at some point, it’s costly and it’s whatever. So yeah, you’re exactly right.

Todd Merrill:

Well, and then in a big company, it’s kind of different, right? You got to, you have to sell what they developed three years ago or two years ago. It’s not going to change. You have no shot at impacting the strategic roadmap, you know, probably not a little, maybe a little bit, but…

Joe Gruca:

…yeah

Todd Merrill:

But you’ve also figured out product market fit. So it’s a little different, right?

Joe Gruca:

Sure

Todd Merrill:

And you know what to say to people and then you know what the qualifying questions are. And it’s just rinse, repeat, and then make a quota and off you go.

Joe Gruca:

Yeah. And I don’t want to make it sound like you can never alter the product like Delta Airline. We had Delta Airlines saying, can you build? Of course, we’re going to, you know, then we’re going to go buy a different truck. We’re going to go get a different truck. It’s Delta Airlines that we’re going to spend a lot of money on it. You know, all of a sudden that funds a lot of growth within the company. You got to be flexible enough to pivot and do that. Rob was again, brilliant at that.

Todd Merrill:

Yeah, find what works and it might be not what you’re working on and that’s okay. But pivot, pivot. I always tell sales guys, I say, “You have six silver bullets in a year. Don’t fire them all at once.” And yes, that’s a silver bullet ask, right? We’re going to totally wreck what we’re doing and change everything and get it done for you. So you have six in a year, fire them when you want, you know, but you can’t, it’s not a machine gun, right? And you can’t constantly be silver bulleting this thing. But yeah, we’ll do that. You know, you get six favors a year. Usually, you know, we have that discussion. It’s like, “Oh, okay, I get it.” You know, I’ll ask you for a couple three, you know, every once in a while, but it better be a million dollar, $5 million deal, meaningful impact deal. 10% deal. Yeah.

Joe Gruca:

And me, was the dumb sales guy firing my Tommy gun, right? And I would have been out of bullets with you really fast, Todd.

Todd Merrill:

You get a feature, you get a feature, you get a feature. Yeah. Well, where are we in the economic cycle? When you started HireIQ. It was 2008. You know, it was very similar to now. Everybody’s, you know, corporate, I mean, there’s a lot of uncertainty in the market. Banks weren’t doing great. There’s a lot of ripples where people are reorganizing, trying to figure out what to work on. A lot of uncertainty in the market. Great time to start a startup as it turns out, but boy, it sure can be a little scary when there’s a lot of uncertainty. It’s probably very difficult time to raise. You know, personal wealth effect directly impacts how much, you know, people have a lot of money sloshing around in their bank account. They’re more likely to invest in a risky asset class. You know, when it’s kind of pucker factor time.

Joe Gruca:

Yep

Todd Merrill:

It’s a lot harder to get those checks in. But that’s exactly when it feels like right now is a great time to start a little company. Is that true? Are we in kind of the same economic cycle point as 2008, 2009? Or do you think, you know, when are we going to, when is everything going to turn around? Or what’s your kind of economic outlook right now?

Joe Gruca:

Yeah, boy, that’s an interesting question, Todd. Wish I knew the answer to that.

Todd Merrill:

Ha ha ha

Joe Gruca:

No, but it is a super interesting question. I think I could argue maybe both points. Like, it’s the worst time or it’s the best time.

Todd Merrill:

Sure

Joe Gruca:

The worst time is when there is so much uncertainty, and everybody’s holding their money close to the vest, and you don’t really know. And heck, what if you were a product company and dependent on overseas products? So that’s the like, there’s lots of reasons why I could argue no. The reason I can argue yes is if you talk to a lot of PE firms, they’re sitting on cash, right? They haven’t put cash to work in a while. Well, now to be fair, they haven’t had a lot of liquidity. There hasn’t been a lot of activity in the market and things. So they’re very, I don’t know, cautious around how they, but there’s money out there. If you have a great idea, I don’t think you’d have a problem finding the money and getting them to open the metaphorical purse to make that investment. You know, that’s different. So I don’t know. It’s a really good question. I don’t know what the right answer would be there.

Todd Merrill:

You know, we’ve heard a lot of people talking, you know, particularly 2021, ‘22, 2’3 companies that were started in that vintage, that was still, you know, zero-interest environment. So go, go, go throw the money on the bonfire. Let’s go.

Joe Gruca:

Yep

Todd Merrill:

And then I think valuations kind of got out of hand. We got ahead of ourselves a little bit with multiples. And I think part of it is, you know, private equity and venture, you can’t really make those follow-on investments at an attractive enough valuation without doing some kind of down round and damage to the whole ecosystem. So everybody’s kind of going, you know, we can hang on for just a little bit.

Joe Gruca:

Yep

Todd Merrill:

You know, I think either. And then I think, you know, you can make 5%, you know, on a T-bill or a bond with very little risk, why the heck would you, you know, do something that was a little bit riskier for, for 7, 8, 9, 10%, 12%.

Joe Gruca:

Right

Todd Merrill:

You know, so it’s just the math gets a little harder. But I think if you’re a young company, getting started, you don’t have those burdens. That’s where a lot of people are looking to invest. You know, it’s easy. You got a clean sheet of paper. It’s no down, there’s no round to be down from, and the multiples, the multiple, and then off you go. And I think I’ve seen a lot of, I’ve seen a lot of debt come in, right? So people are financing with debt versus an equity raise.

Joe Gruca:

Yep

Todd Merrill:

Which is kind of fun to think about, you know? Private capital markets are coming in, you know, you just, hey, we’ll loan you the money. So kind of goes back to what you’re saying, you know, focus on building a nice little company that’s profitable, grow at whatever rate you feel like you can grow without sticking your neck out. And then maybe it takes a little longer, but that’s okay. Right? And then there’s capital for good stories. It might just be in a different form than you’re used to. You know, I don’t know. I think a lot of the, there’s going to be a great washout in the venture world on the lower tier venture funds.

Joe Gruca:

Yes

Todd Merrill:

Or people are going to have a tough time raising those follow-on venture funds three, four, and five. You know, I don’t know. It’s an interesting time. I don’t know how we get out of it.

Joe Gruca:

Yeah. I think you’re right. And I think it wasn’t exactly your question, but like, I think back to us raising capital. I sometimes wonder, did we raise capital too soon? Like, we thought we had something weird. And I remember vividly again, not to name drop, like, I had breakfast with David Cummings. He was a very gracious mentor to me. And he was like, “Look, if you really believe in it, don’t rush to raise capital. It’s going to be painful, but maybe you mortgage the house. Maybe you do max out every credit card because as soon as you do raise that capital, it’s not your company anymore, Joe. It’s not you and Rob and Jay. It’s not, it’s their company as much as it is.” And I don’t, you know, in hindsight, I don’t know whether it was the right decision or not, but I do question it to your point, like, is raising capital always the right solution? I don’t know.

Todd Merrill:

Right. Well, and then, so you raised capital from, and you took an institutional round from a prominent VC here in town. So did that accelerate things and change things for you? It always does, right? Things change and then there’s good and bad.

Joe Gruca:

Yeah

Todd Merrill:

So, you want to talk about that in generality? You know, what changes when you take a venture round, you know, going from you’re the chief bottle washer and cook and mortgaging your house or your credit card, you got to pick to, hey, you’ve got capital, but now you’ve got roles and now you’ve got partners that are a little bit more professional.

Joe Gruca:

Yes. Yes. And, you know, does it help, did it help to fuel our growth a hundred percent? We advanced the product because we had our first, whatever, million-dollar check and we could go hire great developers and we could get this voice attribution model correctly in this Georgia tech engine. We couldn’t have done that without their help. But it definitely, you know, some of the things we wanted to do and the path we had as co-founders changed it. And it’s going to change when you take it. Now, look, were they more right than we were more right? Did it lead to a difference of opinion? Absolutely. But it accelerated growth. But if I had to do it all over again, would I? I don’t know. I don’t know. And would I do the same kind of investor? I don’t know. So, you know?

Todd Merrill:

Right. It’s in the past and you can’t change it, but, you know, it’s always interesting decisions.

Joe Gruca:

Yes

Todd Merrill:

Some people, you know, Dave Cummins is famous for bootstrapping his, you know, 120, a hundred-something million exit. No equity partners. I think it took a little capital along the way, but from friends and family type stuff, you know. So an obvious success story there. I know you know, like ISS, I think play on sports. There’s a couple of them around town, you know, that scrappy founders, credit card, max or credit cards.

Joe Gruca:

Yep. You know, oh my God, I didn’t know if we we’re going to make it or not. I think every entrepreneur has that story of almost missing payroll or wondering where the money’s going to come from. And then you find an investor and then you can relax a little bit. So, you know, do you keep it all on, keep going, or do you leverage up, get a pause in the anxiety, and then pour that energy back into, you know, build a good business, you know, there’s no wrong way to do it. And then certainly, with the responsibility of having a formal board and a formal financial reporting cycle and all that, that’s a tax on your energy, but it does make you execute in a more disciplined fashion.

Joe Gruca:

Yep

Todd Merrill:

So I don’t know, you know? There’s no wrong way to do it.

Joe Gruca:

Right

Todd Merrill:

Yeah. So it’s always interesting to see how people craft their company and then figure out how to make it work.

Joe Gruca:

Yep

Todd Merrill:

And certainly, having really smart people across the table is always valuable, right?

Joe Gruca:

Sure

Todd Merrill:

And then you double your Rolodex for more when you get very, very good investors on your side. So that’s always worth something. They can open up a lot of doors for you.

Joe Gruca:

Yep, completely agree.

Todd Merrill:

Well, what trends are you looking at now is kind of, you know, something you got to get up to speed on? What are you going to school on at this point?

Joe Gruca:

You know, it is interesting, Todd, that while I’m having a ball in my first, whatever, few weeks at TechCXO, I kind of have a niche that I’ve carved out for myself. It’s, it’s B2B SaaS. Like, if you ask me what am I best at, what I’m most knowledgeable in, it’s B2B SaaS. And if I’ve got six current client opportunities I’m chasing, only two of them are B2B SaaS.

Todd Merrill:

Okay

Joe Gruca:

What I’m learning is there’s some cool technology working with a design firm here that’s super, like an amazing, I don’t know, I don’t know how to spell design, right? So I’m having to really expand my, I don’t know, my comfort zone and learn about all of these other really cool technology companies that are out there that are not B2B SaaS so that I can, and frankly, I’m loving it. I am loving it because it’s causing me to really continue to invest in my education and learn about some of these other industries and things. So there are some just … the biggest takeaway from my first, there are unbelievably great companies out there that I would have never even imagined you could build a business with. It’s so cool. It’s so cool.

Todd Merrill:

Yeah. Yeah. You know, I try to go to a lot of events, you know, meet the entrepreneur community. And I think, I know everybody, this is going to be like going home, you know, and then you go in a room full of 400 people and you go, I know three people here.

Joe Gruca:

Right, right.

Todd Merrill:

And they’re all doing really, really cool things, you know?

Joe Gruca:

Right, right. Well, I will say my claim to fame, not that there’s much claim or fame here, but I will never forget when Kyle first pitched the SalesLoft idea. Cause when we won the George TAG, Georgia’s TAG Startup of the Year. I was then able to participate in the next year’s contest. Right?

Todd Merrill:

Oh yeah. Yeah.

Joe Gruca:

And one of the people who pitched was Kyle with SalesLoft. And I remember somebody else who had invested in our company going, “That’s never going to work.” And I’m like, I think he’s got something here. Well, two and a half billion dollars later, I was right and this other guy was wrong. So every chance I get, I let them know that I may not bet a thousand, but I had that one, I think at least philosophically. Right?

Todd Merrill:

Well, and then, you know, Dave Cummings had a little bit to do with that, right? He had an exit success with Marketo and then, you know, following companies in that same space, you know, so that doesn’t hurt, to see that.

Joe Gruca:

Good point.

Todd Merrill:

Yeah, and then…

Joe Gruca:

… back to your point about the right investors. David was absolutely the right investor for SalesLoft at the time. I’m like, look what the outcome was. So yeah.

Todd Merrill:

Yeah. Well, that was sure to go fast.

Joe Gruca:

Mm-hmm

Todd Merrill:

Talking about B2B SaaS. You know, people are talking about AI is going to destroy everything, you know, SaaS, isn’t going to be SaaS. It’s all going to be agents talking to agents at some point. Do you see SaaS going away? There sure is a lot of momentum behind B2B SaaS. I think you’re not worried about it.

Joe Gruca:

No

Todd Merrill:

No. Okay.

Joe Gruca:

I’m not. I think there are certain professions that will be impacted by AI and agents. Like, I think the accounting space and I’ve sold accounting software for whatever last few, I think that the accounting industry is going to change dramatically. Certainly, the way software is developed is changing dramatically but do I think SaaS, you know, whatever five years from now won’t exist? There may be some new version of whatever SaaS is, you know, Benioff will create the next, whatever version of a software company, but no, SaaS, I don’t think SaaS, hope not. I don’t know what the hell else.

Todd Merrill:

I don’t think so. You know, I think it’s going to be a lot easier to get out of the starting blocks and to get a proof of concept, you know, something that you can put in front of people, customers, investors, whatever. I think there’s always going to be value in capturing complex business logic in a system that you monetize in a variety of ways. You know, agentic AI is going to be yet another UI, rest API, you know, whatever it is, lots of different ways to make money. But you’re going to have that core knowledge and in-depth business expertise in that core system. You know, I think that’s always going to be important. Yeah.

Joe Gruca:

You’re a lot smarter than I am in that regard, Todd, but I completely agree with you. Yeah.

Todd Merrill:

I don’t know. I don’t have a crystal ball. Yeah. Yeah. Well, Joe, it’s been great having you. Do you have any great travel stories that you want to share with us about getting out there in the world?

Joe Gruca:

Oh God, let me see. Well, since the, you know, we are on the sky lounge, I’ll tell you two quick sky lounge stories. My second favorite SkyLounge story is I’m sitting in a sky lounge, Delta Lounge in Detroit. Some guy sits next to me. His arm is all tatted up. I go, who’s this guy? I look up sitting next to me is Flea from Red Hot Chili Peppers.

Todd Merrill:

Oh, wow!

Joe Gruca:

Both of our flights got delayed. One of my claims to fame, I got to party with Flea for a couple of hours in Detroit Sky Lounge. So that’s my second. My favorite story is again, the SkyLounge story. About two years ago, my wife had a big birthday and I decided I was going to surprise her and take her to Italy for her birthday. One of those, you know, I’m not going to tell you where you go, just pack your passport, pack your suitcases. Here’s how to dress, etc. We get to the sky lounge. We’re having our glass of champagne and it’s packed. It’s one of those classic sky lounges. You couldn’t find a seat in the place, which sucked in itself, but what really made it shitty was that my wife didn’t know that I had invited all of my kids, their significant others. There were six other people about to join us, and I’m like trying to save seats in the sky lounge and stuff.

Well, the first two come in, two kids come in, my wife fall, break down, sobbing, like, Holy cow, what’s going on? People around us are now starting to do this, bringing out their cellphone, more kids. So anyway, we created quite a ruckus in the sky lounge, and I think we were going to end up on a, I don’t know, some woman threatened to put us on one of those Today Show, Hoda Boost, kind of the things, but that’s my favorite sky lounge story, Todd. I don’t know if that’s your question, but that’s my favorite SkyLounge story.

Todd Merrill:

Yeah. SkyLounge for the win. You never know who you’re going to see in there. That’s awesome.

Joe Gruca:

Yeah. I like it.

Todd Merrill:

Well, Joe, how can people follow up with you after this if they want to get in touch after on the internet somewhere?

Joe Gruca:

Yeah, thanks for asking. I’d say probably one of two or three ways. I’m obviously on LinkedIn. Just go to my bio on LinkedIn. Second, hit up the TechCXO website. If you’re looking for sales help, we got plenty of great partners that can do that. If you’re looking for technology help, we got that, but my bio is on there. And then third, I’m just at joe.gruca@ TechCXO.com. Feel free to reach out to me directly. And I’d love to try to help you out having, again, walk a mile in your shoes. So thanks. Thanks for having me on today, Todd.

Todd Merrill:

Thanks, Joe. Bye for now.

Joe Gruca:

Cheers!