65. A COO’s journey to a Google exit

Hello and welcome to another episode of The Operations Room, a podcast for CEOs. I am Brandon Mensing and joined by my amazing co-host, Bethany Ayres. How are things going, Bethany? Not very well. Look, I feel like this has been a year of highs and lows. So I was pick pocketed on Thursday in London. I was coming back from Manchester to meet some friends for dinner in Soho, and there was a mini landslide on the train tracks between Manchester and London.

I don't know what a mini landslide is, but it means that the trains are moving very slowly. So I was getting in 45 minutes late. I had already cut it fine for dinner, so I was in a real rush and I was clearly a target. Like in retrospect, I have my backpack on. I have a big coat. You have my wheelie bag. I'm pushing through people trying to get to the restaurant as quickly as possible. And because London has had so many sun thefts right now, you know, it's talking about it's in the news.

I just felt like it was inevitable that I felt was going to get stolen. I bought my iWatch so that I would not have to take my phone out and be less of a target. And to do navigation on my watch. But I haven't figured out how to do navigation well on my watch. And it was 100% the navigation that got me. So I knew where I supposed to turn down. I turned down and it was just taking a really long time to get to the restaurant. And so I picked up my phone to make sure I was still where I was going.

And I kept further down, put my phone back in my pocket and zipped my pocket. And then going down the road, I'm kind of passing people, everybody. You know, it's Soho. People are slow, there's tourists, I'm annoyed, and somebody jostles me. And maybe it took a little longer of a jostle than normal or I just somehow noticed this one, but I didn't think, they're just stolen my phone. I was just kind of like, Why is this person so close to

me? Carried over great Marlborough Street and I was like, God, is this restaurant really that much further away? Stuck my hand in my pocket. I want to stick my hand in my pocket and my zip was undone and my stomach just fell. And I was like, fuck. And I put my hand in my pocket, phone gone. And then, of course, I look in, there's the restaurant. So Russian get to my friends and borrow one of their phones. And luckily I have my husband's phone number memorized.

The only number that is not a childhood phone number that I have memorized in my whole world, and the only reason why I have it memorized is because he hasn't changed his number since we started dating, and I used to have to call him from America and had figured out how to memorize it. Never thought that I would need it for not having a phone so horrific disaster. Losing a phone like so huge amount of admin and hassle

with the phone. I won't go into all of it, but all I have to say are the staff at the Apple Store are just so amazing. They must get paid really well because compared to all the other retail people you deal with, like the Apple staff is just another level. I'd like to thank all of them. When I was like nearly in tears trying to sort out my fucking phone. So I now have a phone but I don't have a sim so I still can't do any to f.a.

I'm still waiting for O2 to deliver me my sim and then I had to fill in the police report. One of the things that did not require two factor authentication and filling, and it was great to be able to fill it in like online and not have to call the police and do everything. And if you did your name and where it happened and describe what happened and then there's like a bunch of check boxes of things you have to fill in. And one of the questions is, what is your relationship to the crime?

Something like that. And so it was I am the victim. I am a bystander. And the top one is I'm a victim. And I was just like, no. And so I read the list for it. Has to be something. Else. Yeah. And I was like, my God. And it was so hard for me to click, I am a victim of it. It's a it's fine. It's not really either. But, you know, technically, as I found that really hard to click the victim button filled in everything.

And also because of my find my iPhone, I could put in an exact address where it disappeared and you know the address of where it happened, the whole thing. And then the next day I got a here's your case number and then a couple of hours later and now your case is closed. We've looked at the CCTV footage. Nothing obvious, no where to pursue this. Done. So we have got a great topic for today, which is a CEO's journey to the Google exit. We have a wonderful guest for this, which is Shane Harris.

He's the former CEO of Cameo, which was acquired by Google in 2024, and he is now working at Google in operations and go to market strategy. So one little caveat to Shane. Unfortunately, we had some technical difficulties in the conversation whereby we didn't quite get to the the Google exit part of it as much as we had hopes for the conversation. But that aside, just wanted to, as usual, start with you, Bethany, in terms of our back and forth.

And the first thought I want to drop on to you is, Shane, you talked about bootstrapping a culture of getting stuff done, a cameo and a bit of this no frills, more with less attitude. Do you think the finance SEO person and finance voice perhaps more broadly, is undervalued and now it is being valued with our current circumstances that we have? Once you raise a bit of money, you need somebody who's a grown up to control that money and make sure you don't do stupid things.

So there's obviously the basics of getting your accounting right and your cash collection right and making sure people pay you. I'm actually surprised the number of companies that don't have their accounts payable set up and don't really know who is and isn't paying them and don't have conversations with their customers about if you're not paying us, you don't have source anymore. Like I think a lot of startups, every customer is so hard.

One that even a customer that's not paying somehow counts as a customer and you don't want to take it out of your numbers. I'm working with the company, not Peak, a different company where that exact scenario has just happened and they're like, We just want to clean up some churn. And then there are churn cleanup for customers that have just never paid. Like, I don't think this is churn. Well, this is stuff that just should not have been counted in your numbers full stop.

And they don't have a finance person. I guess for me, that's a perfect example of you need those checks and balances. You can't just rely on the glory of growing your M.r or your RR without making sure that it's actually translating into cash. And if it's not translating into cash, what are you going to do about it? And that's just like a fundamental that's not even advanced

finance, but that's kind of the first thing you need, that you need somebody who is creating a budget, managing a budget, explaining to people why they can and cannot have things and make sure that the money is being used appropriately and also something that finance, at least in my experience, finance should do rather than the CFO or Ops is the reporting.

I actually prefer reporting to be with finance rather than with ops because it's like for me, the more trustworthy, you know, because even Ops has skin in the game around how things are going to look and maybe cutting metrics in a slightly more flattering way. Whereas I just trust the finance people are like, This is the definition. I have run it through the definition and this is the metric. It's good or it's bad financial metrics or pipeline metrics or

whatever. Plus, finance tend to be really good at visualizing data and making stuff understandable. He also spoke about from day one at the outset, kind of like Mark Farnell making sure that you take your data hose and make sure that it's clean and wrap your process around it and carve your metrics out according to whatever that process is in a way that's meaningful and helpful to the business.

And I'm just wondering what you make of that in terms of his view that it should happen from the very beginning and culturally set that because oftentimes in companies, they don't spend the time and effort to do this upfront. We just need to get customers on board and sell effectively to get the RR rolling and we'll deal with this afterwards. So I'm curious the balance between upfront versus later.

We see this all the time and I get it because most founders and founder CEOs don't care about metrics. They live five, ten years in the future. They have a vision that they're trying to get to. The boring metrics along the way just are slowing them down as an archetype.

And so you do end up not looking at numbers are on the whole companies don't look at numbers till really late until they have to pre a post a depending on how they gather their a round where they realize they need to somehow prove that they have traction and they other than they are, they have no proof of traction or proof over traction.

And so if you're at the point where you want to move from founder led sales to sales leadership, you need to be able to put those numbers in place because otherwise, how are you going to tell whether or not you've hired a good leader? Is your pipeline growing or your cost of acquisition acceptable? And at that point, you should hire in rev ops or biz ops or whatever kind of ops you want to call it, depending on how broad people are looking.

The ops systems thinking person is like, you should do it from day one and build it into the culture. But then both the realist and also there's a lot of things you have to fix in the beginning. Like, does it actually just slow you down? Particularly if you're doing enterprise sales. If you're doing high volume sales, you need to do it from the start. Or if you're doing product led sales, you need to do it from the start, a product that grows PLG.

Because then it's all about metrics and you have enough numbers to make a difference. If you're selling 500,000 pound ACV or dollar ACV deals and you're selling for a year, your metrics really don't matter because there is nothing repeatable there for a very long time. It's almost like a descending scale, isn't it? Enterprise Mid-Market, SMB, PLG. As you go down that pathway, the earlier you have to start in terms of tracking the stuff in a way that actually makes sense for the business.

But I think at the end of the day, what I've seen over and over again is that the Series A, when the company grows to a certain size and as you're getting toward the series, B and the founder are starting to not lose control, but they don't know what's going on in the business. They don't know what everyone is doing as they used to, and they start freaking out a little bit and they're like, Brandon, I just want to see a dashboard, one dashboard that tells me what's happening.

So that's where that flipped. The switch I think really happens in a substantial way where the CEO that maybe would not have been behind it earlier gets behind it because they're feeling like they're losing control. They need to see a dashboard. And that's the point by which you can actually step in to make something happen.

And that's when you can get the data to be accurate, because up until that point, no matter how accurate you'd like the data to be, everything's on a spreadsheet somewhere hidden and HubSpot is empty or randomly half used and there's no information in there. And so you have to go and actually start to enforce data quality. I cannot tell you the number of times I've seen HubSpot being licensed and just kind of sitting there.

And then you also have nobody in the business who knows how to use it exactly. You have somebody who's kind of like a little bit systems has maybe watched one demo, has done things and customized a little bit of it. In a strange way, it's not working and then they just revert to the spreadsheet. I always find the attitude funny because on the one side of it they're always like, Well, we know we need to have HubSpot. So they license it and I, okay, well we got it now.

And then they just kind of ignore it. And then at some point when things start to like really go haywire at some stage in terms of just not knowing what's happening in the business, like, okay, we should actually do something. And then that revolves higher happens, then the cleanup happens, then the tracking happens and the metrics happen and the culture piece of sales reps actually doing stuff properly happens.

Or doesn't, where they hire the rev ops person and the rest of the culture, change doesn't happen. And you have this revolves person is just banging their head against a wall trying to change the culture and nobody else goes with it. I mean, this is where the operator comes in, doesn't it? Because oftentimes his rev ops people are fabulous, but they're not great communicators. And I greater change transformation in the business.

If you're sitting there with 25 reps or 30 reps, nobody's going to do Jack unless they're in a, I don't know, a well thought out transformation program to get them in a place where they understand why it's useful. They're being held to account. And it's not for me, the Red Bob's person that does that, it has to be somebody else. And also, sometimes they're perfectly fine communicators. They're just not senior enough. When the CEO's like, I don't care about it, I never look at it, Here's

my spreadsheet. Nobody is going to listen to the rev ops person who's trying to get them to use HubSpot. So here's another question for you, because I've also seen this repeatedly where the CEO, the company recognizes it needs to happen. He or she wants to do it. It starts happening in some form, but it's still kind of half baked. And the message that I get back from the CEO is that I want reporting to happen, but I do not want to look at it.

And HubSpot, I hate those charts and I'm not going to bother to log in. I have also seen that one. You kind of get one or the other of either I don't want to log in. I hate the way it looks, can't be bothered or gets really excited by it and drills in but doesn't quite understand it and goes into like these weird like rabbit holes and misunderstandings. So I think there's two things.

Either you work at getting them to like it and keep working at it or accept that HubSpot is your database and you're going to export the information into pretty charts for that person on a regular basis, either weekly or monthly, and then like refer back to the finance people who can make pretty charts. It's a bit of a waste of time, but at least you have a good database at that point, even if the consumption of the information is not in the tool.

I think in the SEO case that I've experienced taking that data, that hopefully is good data that actually is clean to your point and track properly, you can export it and either visualize it in Excel, which people understand, or Google sheets or possibly start thinking about like things like Power BI and visualizing there. But I always find that's like just a whole other world of pain, to be

honest. If we don't need to do it, then I think kind of in that AB world, visualizing it outside of HubSpot and just Google sheets or something like that is perfectly acceptable. I think I would not spend my budget on power by any spare budget I have. I'd be spending on I. Tools for the company to just experiment with in this new world of cash is not free and constrained. And where am I going to spend my IT budget? It would not be for a company that's.

Series A series B, maybe even series C. I wouldn't be spending my money on buy tools anymore. Yeah, there's a good point. And there's so many of those buy tools and they're so expensive. Typically, like if think about these things like Snowflake and Tableau, they are super, super expensive, like crazy expensive and a list of a certain size and transactional scale. It's hard to argue that it makes any real financial sense, especially when people either.

Don't use it, can't use it, or whatever does show up on those dashboards is not correct for all sorts of reasons. When it comes to metrics. What do you love? What do you hate? What gets Bethany excited when it comes to the world of metrics and what kind of metrics? I like to strip it back to the ones that really matter. The gross margin. Are you making money or not? Payback, period. Are you making money or not? Those are probably my big

ones. And then net revenue retention because are you growing? Are you standing still? Are you going backwards because you can't retain customers? Everything after that is interesting to see how well the system is functioning. And is the SAS flywheel rolling? How about you, Brandon? So I love the standard stuff. Obviously I slice and dice it to death in terms of RR year on year, quarter on quarter, a month on month growth rates that are attached to that.

Looking at the forecast and figure out where our burn rate is, how it's tracking, and if you increase budget here a little bit or increase revenue there, how that affects the cash burn itself. So I like the cash burn as an actual. Thing to to focus on and obviously gross margin or whatnot. Operating income are always quite interesting in this respect as well. Other ones of interest for sure. We call that net dollar retention out trend, my last company.

But effectively, you know, if you combine expansion, churn all those other factors, are we incrementally growing our customer asset from a revenue perspective or are we starting to lose steam? And also looking at the cohorts of the some segments within that is quite fascinating because oftentimes you see very clear trend lines of like segment A is tanking it for some reason.

Segment B is kicking ass and just understanding what that difference looks like, what kind of customer assets are maybe not entirely suitable. And you can kind of see it where they're not growing at the other rates of the other customers. And there's a reason for that.

And digging into what that reason is, recognizing it's not the best customer set for you to be targeting or that perhaps you need to be doubling down in that segment to actually bring forward more functionality or experiences to to get them more excited by what's happening, perhaps.

So I've worked with one company that has a very traditional small, medium, large processor in the smaller micro, and so it was all credit cards and it was low touch, but in the beginning it was not low touch, but they were the ones that were turning on and off all the time. So it wasn't necessarily churn, but because it was a monthly subscription, they would turn it on when they needed it, turn it off. And so in the numbers it looked like

churn. So one of the first things I did was really delve into what's going on because they were going out for a fundraiser. I was like, my God, you have all this churn and by doing Get into the Cohorts, you could see that Enterprise actually had a really strong expansion. Mid-Market was fairly okay, and the churn, as we called it, was all in the small markets. And although they were small companies, they actually made up a large chunk of the revenue.

And so it looked like it was all bad churn when you rolled it all up together. But by segmenting it into in those cohorts, we could see what was actually going on. And then we focused on there wasn't anything with the product that you could change. It was a structural issue, like these customers just were not going to ever commit to a year. And so we focused instead on massively lowering the cost of acquisition and making it completely no touch, only credit cards.

If somebody's credit cards expired immediately turn them off from the product. And therefore we still had this really bitty revenue. But the profitability of the customers massively increased that. My former company, we had exactly this, which is you had freelancers that would turn the software on and off depending on their workload and what was happening from a contract perspective.

And you could very clearly see them as we find at the time, churning out and that we could clearly see them reactivating at a later point. So we actually call that bucket reactivation. So it became very clear a bucket of trend was in the forecast that we had a certain expectations around reactivation, what that look like and just making sure that it was cleanly segmented from the churn number to ensure that investors understood. And then you got some profitability

out of it as well. Like if you make it no touch low touch, you're not actually paying for it, then that's nice. Extra money. What do you think of the rule of 40 combining profitability with growth as a thing? It seemed like it was really, really trendy Right after the tech crash. It was articles about it every. But he's talking about it. And I think it's because it's coming from private equity and it's a way of PE firms being able to value companies. Are you still hearing it? Not as much.

What I do think about is the RR Peretti. So the amount of revenue that you're making divided by the number of employees that you have, it's a direct correlation of the efficiency of like to be 30 people to get to this revenue level or is it 60 or 90, 120? And how does that benchmark versus other companies in a similar category? It's quite a useful benchmarking tool. And also it'll be interesting with all of the AI being rolled out in companies, what the new benchmark will become.

I read an article about a AI and tech professional services, a professional services like lawyers and accountants and consulting firms, the vertical professional services. And they were saying that because I can do a lot of what juniors do, basically, like a junior lawyer does just all of the shit work and now a machine can do it, that a lot of these organizations are not planning on hiring nearly as many graduates

now. But that's like kind of an existential issue of like, where do all these kids go and having children. I am a bit worried about this. You know what? Where are their jobs in the future? But also, experienced people are not worried about losing their jobs because they can see what is good and not good in AI and like where the hallucinations are.

But what you end up having is because we're not having the next generation trained on it, when the experts retire, you don't have people who are going to be able to tell what's good and what's not good. I also just thinking about like what's going to happen to tech companies in the future. Would you hire graduates? Like I think if you have a company with a good culture that's growing steadily, companies might just kind of age together. And not hire juniors. You mean and not hire juniors?

And not just the P.W. seasoned eccentrics of the world, but across the board? It's going to be interesting to see what happens to the workforce in the coming years. What are we going to do with all of our kids if we don't hire them? We have to do something with them. Yeah, but you're right. Especially for scale ups when you're being very efficient with your cash and only spending where you have to.

If you don't need juniors to be in the business because you have A.I. doing a bunch of that stuff for you, then you're not going to, period. It does matter what your values are of your organization. It's taken a slightly away from metrics, but we'll be able to do is measure the metrics. But as interesting as it came from the R per head, this whole little bit of conversation. So reason why the metrics matter and the philosophically, what does it show us?

And is part of your your number one goal usually is growth, right? Andrew and our original founders, they read the market well in that they forecasted in the future they could see that there was going to be a major impact from cloud on virtualization. So from day one, we actually knew that acquisition was a likely exit path for us. We didn't box or sell sent where that was the only exit path, but we knew that that was a very likely exit path.

And then another piece of it was we looked at scaling and every company has culture and core values and something that we as an executive team really focused on. I know that sounds silly, but we got things done and no frills, no hype, just all results focused in what we were doing. And do more with less was something that we were used to

doing. And so part of our culture was being gritty, being scrappy, finding ways to get results and make things happen without getting involved in the hype and the waste. And it's really interesting because at the time, money was so cheap. So there was this temptation to raise a series, a round, and we actually had an opportunity to do that at a pretty meaningful valuation.

But when we took a step back, we just looked at the things that we're being asked to do, the expectation of growth at all costs and, you know, hire a bunch of people if things go wrong, you fire them all later, you know, like it just was it was a little bit counter to our culture. And what was crazy was like six months later, after we made that decision, the wheels fell off, like the interest rates started going sky high, adventure firms coming back and say, hey, you know what?

You got to be profitable. Your growth, you got to be cash flow positive. You got to show results for all this money you're sending, which that was something we cared about from day one and was part of our culture. So the founders probably made as much by not taking funding as they would have had they grown a bigger company.

You know, when you do the math, it's crazy just speaking in general terms like bootstrapping and being cash flow positive does is it preserves your autonomy so that you're never stuck in a situation where you have to raise money at a valuation you don't like or, you know, the market takes a turn. You end up in a scenario where upside down, I mean, the scenario described is like absolute tragedy to me and it happens a lot where you have a very hyped up firm.

We're going to hire a ton of people, We're going to get these crazy evaluations or pay wild salaries to the executive, and then the market shifts or something happens and three years down the road, they end up selling at still a very meaningful valuation. But in doing that, nobody made any money because of the way they financed their growth leading into it. It's hard to make that call. And I think this is where it comes a bit to Brandon's question of do you know what kind of exit you want?

Because sometimes if you have that idea that you believe in that is that unicorn idea and you're going to create a category and you're going to take over the world and that's your ambition, then it's really hard to not want to take the money and to feel the urge that if you don't move fast enough, somebody is going to come and steal your idea. And like the glory of being the next Salesforce.

Not that Salesforce is like exciting for anyone anymore versus actually what I want is a nice amount of money for my children and my family and keep the autonomy and grow a business that I like. And all those things are considerations. There's no one size fits all, but I think there's something beautiful about being I don't want to use the word

realistic. That sounds wrong, but being pragmatic about what you're doing because there are a lot of visionaries out there and the road is there's carcasses all along the path to becoming a unicorn. You know, there's a lot of people that they go too hard when they should have just taken a more sustainable path. And it aligns to culture. I really think it aligns. The person highlights the culture. So when you think about the secret sauce, Shane Harris is the CEO in Cameo specifically.

What is it about Shane that really helped make this happen? The role of operations is to enable the strategic business objectives of the company. It's everything that is happening. You're helping the company get from A to B in the most efficient, effective way. A great CEO is to have a way to combine everything the company is doing from There's so much data flowing through your company is so much information to be harnessed by just your day to day processes and operations and

you need to establish performance metrics across the organization. It tells you how the company is doing. And then also you have to put systems in place that fuel those metrics, right? So you're collecting the data that you need to collect to make the right decisions. As a company to be able to take risks in Belfast, to be able to optimize, to be able to determine what should we change to reach our strategic plan. What things do we need to adjust? We need to get out ahead of those things.

You're talking about systems as in more of the like supply chain as a system or a customer journey as a system rather than literally technology that you're putting in place. It's actually both. That's what I mean. Whereas I think people think systems like you're talking about whether you're using HubSpot or not, but we were actually talking about is the system of the customer journey or the interconnectedness system that is the entire company.

So when I'm saying system, what I mean, you have a business process, right? We have the work that needs to get done and you put in place a process. Here's how that work is

done. The system is what facilitates that process. It could be the technology that you're using. I mean, maybe it's a spreadsheet, but you have to have some framework, some structure around how you're doing your work or else it's just chaos and nothing can be measured and you don't know why you're getting whatever results you're doing and everyone's scattered. You can't scale that way.

So a system is probably the combination of the technology, but also the process that you're following to get work done. And if you think through whether the metrics that I need to have, when you're putting those systems in place, you're going to do it right and you're going to have clean data. If you have the expectation that we

collect this data as an organization, we have metrics that we follow and measure to when you bring a sales rep on. You train them in the process for collecting the data. They're inputting the data. And it could be HubSpot, it can be whatever. And that's part of your culture because they see, you're making decisions off of this, and that's how we're growing. That's how we're scaling. You make that available, you make metrics visible to everybody in the company.

They understand from day one how important those things that people typically hate to do. I've had the luxury of working for CEOs that get it and understand how strategic it is to a company to have that data on hand. I promise you, if you're having issues with the CEO, the second that you show them a real time live just simple dashboard that shows them the metrics they care about, the answers and question every CEO.

When you get past like 1020 people in a company, the CEO can't be involved in everything. They just can't. What drives them nuts is wanting to know how are we doing and why are we doing how we're doing, good or bad? You know, that's the question that every CEO has. And in operations, you're answering that question. If you build the system, the metrics, the flow.

With that in mind, where you can give them real time answers to that question, they're going to love you and then you won't have to fight them and they're going to be begging you for more because that's what you need as an executive to lead your business. Does that help put you in a good place for the acquisition? So we're able to build business case as well. What was the integration

like? Because I think some CEOs go, yeah, okay, I can have some metrics, but a story about how having good metrics means a better evvie that is probably more compelling for most CEOs. I know if you're considering

buying a business, right, you want to know why is this business worth buying? And at the end of the day, whether you're raising venture funds around, whether you sell yourself to your cut, I mean, this goes back to your question, how can operations be strategic to a company? Everything you do boils down to a mini business case. Why should we do this?

What's the evidence that tells us that this is a good thing to do, whether it's internal external data, but like, why are we making this decision and how do we measure if this was a good decision or a bad decision and pivot? So coming into an acquisition and coming into raising funds, yeah, they want your data. They want to know all of your your top performance metrics. Why are things going well? Why are they going poorly? They need an answer for you need to know the metrics they're

going to be looking at. You need to have a flow of data that honestly answers those metrics, but you also need to be out in front of it. You don't want to wait until you're trying to raise around put all this in place because what's going to happen is it's going to boil up. Hey, wow, we had this weird blip over here. Why did we have that blip over there? And if your answer is, I don't know, we just found it, you know, you're going to look like an

idiot. But if you can say, yeah, you know, we actually recognize this dip in conversion rates, our leads in Q1. And we knew that that was never going to hurt sales in Q4. And so what we did was instead of doing this campaign, we shifted those funds into another campaign with higher conversion rates. And what happened is as a result, sales in Q4, we nailed our forecast because we were three months ahead following the leading indicators.

You showed them that and that just gives them. Confidence to give them trust. And that's your job as a CEO, is to to have all that information on hand and to have the story. But the story comes out naturally if you're following it in real time. It gets awkward and clunky and people can smell the B.S. if it's something that you not addressed until you're pulling the data last minute for somebody who's asking for it.

So if you think about what you just said and you had to break it down in terms of stages of development with Cameo, in terms of what you did, just to give it a level of granularity as to what that looks like. Coming back to strategic objectives, Right? Like the first thing I did when I came on is is towards the tail end of a year. So we had the luxury of kind of measuring how we performed.

And then it was putting in place a forecast model that made use of our historical data drew on external information, on market sizing and all this and, you know, industry metrics. And let's create a forecast model of what we're going to achieve as a business over the next three years and what are the metrics that are going to tell us, like what assumptions are driving this forecast model? And you can piece all of those assumptions out into metrics.

And okay, so here are the assumptions we're making that's going to drive this forecast model. How do we measure those so that we know that we're on track for this forecast or do we need to shift things? Where do we need to shift things? And the forecast was dynamic in that not just was it applying to, hey, this is the goal we want to reach, but what are

the pressure release valves and the ways to, you know, we have X amount of funds right now. We've decided we're not going to raise money. So how do we use those funds to get us from A to B, which is this strategic objective, this goal that we're setting, that that's attainable? You know, but it's a stretch. How do we deploy those funds in a way to get us there?

Let's put in place metrics so that we know we're marching to that plan and we're using our resources to grow at the most sustainable possible rate. Right? And we have like something that we did that that was just really, really impactful is we had this dynamic budgeting process. You know, you can't live in a world when you're bootstrapped and you're working to scale. You can't live in a world where you have a static budget. Never you just spend money when they're not showing results, right?

So we put in place a plan that was like our document, right? That we're working off of is spreadsheets. It's systems, it's metrics that built that plan out. Define the metrics that would tell us how we're performing against it, and then modified our system so that we could collect that data in real time and constantly see where we're marching. We mean as an executive team, we would meet weekly to review where are we on this path to our strategic objectives and how are we doing?

So we've talked a lot around building the operations for building the company. We haven't talked a huge amount about the exit. Looking back on what you've done, is there anything you would do differently or looked at everything that you have done? Is there anything you would do differently at your time at Mayo to put

yourself in an even better position? The time to prepare for an exit is two years before you actually are going to need to exit. The main thing that I would focus on just sharply, like make sure you have your data and your metrics there and ask questions about your performance. You need to be able to answer that and you need to have clean financials.

It's so much better if you are internally auditing your data, auditing your financials, answering the hard questions as an executive team, as a CEO, and then the rest of the organization so that you can be more than prepared and show you're prepared when you start having those conversations, those negotiations, the stuff we've been talking about, systems, metrics, forecasts, that applies directly to having a successful exit.

The next thing I would say is, you know, especially a startup, you don't want to spend a lot of money on legal. But the reality is that is such an important piece, especially when you start looking at getting acquired by a large organization. So I would strongly recommend spend that time to make sure your employee contracts are exactly where they need to be in industry standards. Spend the time to make sure all your customer contracts are where they need to be.

Another one that's really big and this is probably one of the hardest ones that I've learned is not every customer is actually a good customer. You're so desperate for money as a startup is so desperate for customers to show growth that you're inclined to do things to just land an account that sometimes could come back to bite you. There's two things that could

happen. One is you could find out that this customer segment that was easy to win early, right, is actually a higher churn customer segment that's not going to be as attractive to people you're raising funds from or. Or to a potential acquirer. We have to take a step back and say what customers do we really want? And a lot of times the early stage customers that you win to help you get your business off the ground are not the right customers to increase enterprise value long term.

And you want to shift into those customers that give you the best growth and the lowest churn and the highest customer lifetime value to customer acquisition costs ratio. That's a metric I love.

And then another thing I would just say is on the culture piece, if something deviates from your culture, whether it's a hire or whether it's a strategic decision in an investment, if it just doesn't feel right, revisit that over and over again and be sure that that's something you really want to do before you do it. It's quite interesting that you're talking about like so much of what you just talked about today is the metrics, follow the metrics, follow the data, and yet follow

your gut. Your instinct, your culture is actually just as important, if not more. And so it's a little bit of where's the art, where's the science? So I would just say this culture should guide your starting point decisions, right? Data will inform you how to pivot after you make those decisions rarely where you make the perfect decision or execute perfectly. Right? So it's like your culture sets your goals, that your vision sets how you're going to operate

as a business. Those are gut decisions, right? You're making and then your judgment calls where there isn't data to tell you this is the right answer, or sometime maybe the data does say something and it just doesn't feel right because there's something else there that you haven't considered.

But when it comes to this, like planning, measuring, optimizing, making sure everyone's accountable, every meaningful decision should be treated like a mini business case, like you should be able to justify why you made that decision. And then a month down the road, why are you continuing on that path based off of how you're performing? Before we end, like to ask you the final question, which is if our listeners can only take one thing away from our conversation today, what is it?

Make sure you have in place the systems and metrics that tell you your progress towards your strategic goals. Right? It's worth the time to get that right because you need to know how you're doing

against where you want to go, and you need to know that in real time so that you can steer yourself there. That's the role of operations. And in my opinion, the best thing operations can do is create that so that an organization can reach their strategic objectives. Lovely. So thank you, Shane Harris, for joining us on the operations room. If you like what you hear, please leave a comment or subscribe and we will see you next week.