November 16, 2023 • 34 mins
In this episode, Vance and Zoe discuss how to discern which ideas to pursue and when to pivot, both in church leadership and startup ventures. It also touches on understanding church engagement metrics and the intricacies of building a venture-backed startup, including why churches should be mindful of software companies' ultimate goals.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Unknown (00:00):
In the early days, we realize really quickly that
(00:03):
specifically five church is notgoing to be for everyone that
gave us permission to be thebest church, we could be for who
we are and for who were calledto specifically, even when you
talk about, okay, do what's bestfor the user, you actually have
to understand what your targetuser, we're used specifically
called.
(00:23):
A pastor turn tech leader and amillennial churchgoer, exploring
the intersection of technology,culture and faith, equipping you
with innovative strategies tosupport you as you live out your
calling leader churches withconfidence to step into the
future together. This is thegive it up podcast. But it's one
of the gifts that we have beingpart of overflow is that it is
(00:44):
quite literally a Silicon Valleystartup company. That's where
we're sitting right now. Andbecause we're a startup, we've
had to learn some veryapplicable things such as
pivoting. Yes, knowing when toquit or abandon something had
ended a different direction, andso many other nuances and
caveats. And I feel like theSilicon Valley has become one
(01:07):
known for the tech spaceinnovation. But it's also known
for being the best at pivotingand changing directions in order
to succeed. And so I know thatyou have a lot of experience
dealing with this. So I kind ofwant to get into your head in
this episode. Because there arechurch planners that could be
listening. There are bigchurches that could be
(01:29):
listening, everyone in the sameboat of we always have ideas.
And I want to know, the lens inwhich you use when we're
thinking about ideas here itoverflow, as to, should we
pursue this, or should we not?
Let's start with that one. Yeah,good. I mean, whatever your
perspective, or perception ofthe Silicon Valley, here's the
(01:50):
facts. This is the home ofApple. This is the home of
Google madda. Twitter now x.comTesla, so many incredible
companies, and Vidya. They'reexploding because of the whole
AI wave right now. And all theGPUs that are required, even
(02:12):
before that crop of companies,which I didn't even include Uber
and Airbnb as some of the newerwave companies. But even before
that crop, you had the OGS,right? You had hp, you had, you
know, these Titan companies intoit Intel, that are birth that
(02:34):
call Silicon Valley home. Yeah.
And really, there are a lot ofreasons for that. And we can
dive into that this episode, ormaybe another episode. But the
fact of the matter is, we canlearn, we can learn if there's
that much concentration ofinnovative technology, software,
(02:55):
internet companies in one space,maybe they've figured out
something right. And so it'ssuch a privilege and an honor to
be able to live here to talk tothe people that have created
these companies been executiveat these companies that have
funded these companies, whetherthey're venture capitalists,
angel investors, you know, theSilicon Valley, you guys have
come here, multiple times. Now,every time you guys come
(03:18):
arranged, by the way, which youknow, stop coming. But even when
it's nice out, there's not muchto do. There's not much to do,
the Silicon Valley actually isquite boring. And so the only
thing to do is really invest incompanies start companies start
a new app. And that's what itis. We can learn a lot from the
(03:39):
builders, the makers, creators,innovators here in the Silicon
Valley. And so I wrote a wholebook called high growth
fundraising, the Silicon ValleyWay. And that's not to over
elevate or over glorify theSilicon Valley. But that's just
to leverage the things of thisworld leverage, maybe things
that are in secular culture, forthe kingdom. Yeah. For the local
(04:03):
church for church growth. Yeah,we can take a page from their
book the same way that maybemany pastors, senior church
leaders, creative directors, atchurches, maybe take a page out
of Hollywood's book, maybe takea page out of high production,
high quality production studiosin Hollywood, in LA, the same
way that our merch teamsprobably take a page out of the
(04:28):
book from Milan or Paris, ordifferent brands that are
prominent is the same way thatwe can think about scaling and
innovation. And we can learnthat from the best place on the
planet that does it, which isthe Silicon Valley, you named a
couple of terms, we can kind ofgo in whatever direction you
want. So but you named onepivot. Right? Yeah. So your
(04:50):
question around there was, whathave we learned being a Silicon
Valley company in the area ofpivoting and how can that apply
to the church? Yeah. Yeah, soThere is this underlying theme
in the Silicon Valley that isbuild things that your customers
want, build things that peoplewant, but more specifically
(05:11):
build things that your customerswant to have this customer
obsession to have this useroriented perspective. Literally,
there's a whole function thatreally was made famous because
of the Silicon Valley called youi UX, right user interface and
user experience designers, theseare designers specifically,
(05:34):
designing from a userperspective, how can I reduce
clicks? How can I format thingsto increase conversion to
increase ease of use? How can Ido these things for the sake of
the user, so that the user has adelightful experience that they
want to come back that they wantto share it with their friends,
(05:55):
that they get quicker to wherethey want to go? Yeah, and
Silicon Valley is, is reallymade known for that. And so when
you think about that concept ofbuilding things that people want
having a user oriented approach,one of the ways that you measure
that is through engagementmetrics, okay? Not just how many
users that I have, that can be avanity metric. But how many
(06:18):
times are those people engagingon a daily, weekly, you know,
Max monthly basis, right? Mauses what they call it monthly
active users. And so if thatnumber is going down, or even
stagnating, and not growinganymore? Yeah, maybe it's time
to pivot. Yeah, right. And sothat kind of user oriented
(06:40):
nature lends Silicon Valleycompanies to pivot quickly,
because they don't want to fallinto the definition of insanity,
keep doing the same things keepoffering the same platform, our
product not changing andexpecting different results,
right. Yeah, that's insane. Andso in the same way, churches, we
kind of battle with this, wekind of battle with this,
because on one spectrum, thechurch is all about
(07:01):
traditionalism. And in a way,it's kind of like the meetings
are all round, how can we dothings the same? Like we've done
it for 1000s of years, right?
How can we, you know, keeptradition. And for the message
that we're trying to preach? Ithink that's important, but for
the method in which to propagatethat message. I think that's
actually really dangerous. Yeah.
(07:23):
I think more churches shouldadopt this term. Maybe Silicon
Valley made famous pivot, forthe sake of your user, which is
the disciple. Yeah. Or theseeker believer? Yeah.
I think this is reallyimportant, because it would be
almost obvious for people tosay, well, building things
people want people want Jesus.
But it's not it's notautomatically going to be
(07:47):
successful, just because youassume we're going to open a
building because people wantJesus. Yeah. And you're not
saying social media engagement,right, in the way that people
hear engagement, you're talkinga much deeper disciple making
type of that. So can you kind ofelaborate good on that?
(08:07):
Yeah, you know, there's a coupledirections. My mind goes in this
because in the early days, werealized really quickly that
specifically vive church is notgoing to be for everyone. Five
churches not going to even befor every believer. Yeah, to be
honest. And that's the beauty ofthe Body of Christ, right? We're
not actually, vive churchspecifically is not meant to
(08:31):
literally reach every singlebeliever on this planet. That's
what the other hundreds of 1000sif not millions of churches are
meant to do collectively as onebody. Sure. Paul instructs
churches in the body of Christto get along all the time to
move in unity, because that'show people will see Jesus is for
our love for one another. Yeah.
And what we realized early on,was that gave us permission to
(08:54):
be the best church, we could befor who we are and for who were
called to specifically. And soeven when you talk about, okay,
do what's best for the user, youactually have to understand what
your target user, who are youspecifically called to? Are you
a church in the Silicon Valley,then probably your call to
(09:15):
people in tech? Rob? Yeah,right. If you're not, maybe you
shouldn't be located in MountainView, California, across the
street from Google, if you don'tfeel called to software
engineers. Yeah. Right. SoftwareEngineers and Google skew
towards a different demographicage wise, right? It's typically
20 to 40. If you're 20 to 40,maybe you're more in the young
(09:36):
kids category. So you can startbreaking it down and so
defining, okay, who am Ispecifically called to? Yeah,
and how can I be the best forthem? I'm not going to be the
best for all, but how can I bethe best for them? And to your
point around, yeah, ultimately,we believe people want Jesus but
here's the truth. That Every onewill be saved. Right? Yeah. And
(10:00):
so there is this tension whereit's almost as if sometimes we
try to cater our product toomuch to what we think people
want. And start negotiating onthe perfection of the Bible and
its gospel, wow. And in itsunadulterated form, is what
(10:24):
people actually need, eventhough they may reject it. Sure.
And so there's a little bit ofnuance in in what we do. But
what I would say is that if youunderstand your target, and you
are focused on presenting thegospel in a way that can be
understandable to that target,then you really leave it to God.
(10:47):
Yeah, right. At that point, you,you leave it to God in the Holy
Spirit to do what only God inthe Holy Spirit can do. I think
there's a deeper level here,though, in terms of
discipleship, if they are afollower of Jesus, and they do
go to your church, theirengagement level is probably a
better gauge for how you cantweak maybe your quote unquote,
(11:09):
product or service, your worshipexperience, to get them into a
deeper connection to communitywith one another. And with
Jesus. At that point, it's notabout just letting kind of God
do it. If they're already aJesus follower, it's like, no,
no, he wants to partner with younow, to deepen them in their
discipleship.
(11:32):
Yeah. what it sounds like you'resaying is that when Silicon
Valley's approach would be buildproducts that people want? The
church's framing is actuallybuild something that people
need? Yeah, it's need versusone. Good. And that's how you
can tell the difference. Sowe're talking about creating
things and engagement, etc. Andyou mentioned it briefly, when
(11:54):
it comes to pivoting. Let's saysomething isn't working. And in
a previous episode, you actuallyshared your experience at church
where you guys started a givenkiosk situation. Yeah. After
reading Robert Morris's book.
Yeah. And then after four weeks,you abandon that idea
completely? How could someoneknow and create a framework per
se, that aligns with the conceptof, okay, if this does or does
(12:20):
not happen? That's when I knowwe need to pivot and change
direction from here.
That one was a pretty clear onebecause giving took a nosedive?
Yeah, so we needed to resurrectit. Good thing, we believe in
resurrection and the church.
Because our finances were almostdead based on the graph. It
flatlined. So that was a littlebit more obvious one, I do think
(12:45):
this is a good topic, becauseespecially in the early days,
you kind of need to preempt itwith your team. We're gonna
pivot a lot. We're gonna changea lot. Yeah, just be ready for
change. Okay, yeah. Like justbrace yourself, put on your seat
belts. If you want to go on thisride with us, if you want to go
on this journey, if you want togo this adventure, just just
make it cool. If you want to goon this adventure, then just be
(13:06):
ready for change. Because wemight be rolling out the Next
Steps program today. But in twomonths, don't ask me like we're
probably going to change it ifit's not working. Yeah, do
things that work, right. There'sa balance, though, where
sometimes you need to let thingsmature long enough to know if it
can work or not. It's allsituational. It's all
(13:28):
contextual. Yeah. I would saythis, here's a good decision
framework that you can makequicker decisions and make
quicker pivots on things thatare quote unquote, reversible.
Right? Okay. So you can bereally fast and make decisions
and kind of experiment withthings and test things for
(13:48):
things that are easy to undo,unwind, pivot, explain. But
don't be so hasty with makingthe decisions changes in pivots
for things that are irreversibleor hard to reverse. Does that
make sense? So, for example,pivot all you want in terms of
the language for your next stepsprogram, go ham, right,
(14:11):
especially in the early days,and people really didn't like
the whole, like, grow, discover,learn, I don't know even what
the language is anymore, butthey didn't like that. And you
needed more hipster language. Doit to your heart's content.
Yeah, no harm, no foul,especially if you only have like
a couple dozen people. What doyou got to lose? I mean, you
don't have a lot of people thatare fixed to language anyway. So
(14:35):
you can pivot all you want inthat. But you know, an extreme
example, on the other side ispurchasing a building and taking
out a loan for that building.
And taking out a 30 yearmortgage on that building that's
a little bit more of anirreversible decision, or maybe
not irreversible, very hard tounwind. And so you want to be
very thoughtful about that. One.
You want to invite counsel, youwant to make sure it goes to the
(14:56):
board. You want to make sure youtalk to Key givers, you want to
make sure that you weigh that inprayer. And you know, you're not
pivoting too quickly with thosetype of heavy decisions. Yeah.
And that's also super important.
And being in the Silicon Valley,we know just how few startups
actually survive. The majorityof them do not, right.
(15:22):
Yeah. Yeah. Eight out of 10 die.
Yeah, in the firstfew years. And that's
staggering. And, you know, let'sjust use church planning as an
example, because that's an easy,parallel. But let's say you've
attempted to plant a church.
It's not going well, likenumbers are not up into the
right. If anything, you'vepeaked, you flatlined? How do
(15:44):
you know when to abandon or letsomething die? With
the church is a little bittrickier. Yeah. Because,
especially in a category likethat, it is oftentimes a
calling. Right? And, and if youfeel convicted, that it's your
calling, you cannot abandon yourcalling. Right. Right. Yeah.
(16:07):
And, and there's a lot of waysthat you can contextualize the
hardship of what you might befacing, whether it's being stuck
or, you know, in stagnation, youknow, there's very practical
things that you can do to try todissect, okay, what is not
working? Why is it not working?
Yeah. So it's a little bittrickier. If we're specifically
talking about a pastor's callinga church planter is calling. Let
(16:27):
me zoom out a bit and just talkabout, in general, whether you
should abandon a project, aproduct, a platform, a feature,
you know, even a startup, right?
Because, again, in the SiliconValley, eight out of 10 startups
completely fail. Yeah. Part ofthe reason that is true, though,
(16:48):
is because most of those 10 aremoonshots what we call
moonshots. These are change theworld or bust type ideas. These
are really ambitious goals that,you know, two of them when they
pan out, they pan out real big.
Yeah. And the eight that fail,it kind of makes sense, because
it was already kind ofimpossible anyways. And so I
(17:09):
would say that part of churchplanting should be not. Am I
going to abandon my church planor not? But do I have 10
initiatives that I put out, wereenough failed to indicate that
I'm ambitious enough? Yeah.
(17:30):
Yeah. If everything that you dojust succeeds, maybe you're not
risking enough, maybe you're notstepping out on faith enough?
Maybe it's actually all in yourown strengths. So that I don't
know. That's kind of like adifferent thought to that. Yeah.
I would say in the realm oflist, keep it to company
building really quick. There's acouple things that will make it
very clear to abandon ship.
Number one, you run out ofmoney. Companies don't run out
(17:54):
volunteers like church can runoff volunteers. Yeah. And so
there's a there's a strictergrading card on your worthiness
have to continue to stay inbusiness. Because, again,
nobody's going to step into acareer where they have to work
for free because they have topay their bills, they got to
feed their family. Yeah. Right.
So running out of money is one.
Another one is if too manycustomers just sign up and don't
(18:17):
want to continue using you.
Right? If the attrition rate, ifthe churn rate is too high, and
it's higher than the amount ofcustomers that want to come on,
then you either got to figureout how to plug that up. Or
you're kind of just wastingresources, because it's kind of
(18:37):
in one door out the other. Yeah,right. Yep. Applying that to
churches, same thing, right?
Maybe you shouldn't, youshouldn't invest into that
billboard yet until you figureout your next steps program
until you figure out your smallgroups until you figure out your
ministry team and figure outyour faith and foundations or
alpha course or whatever youwant to call it. Yeah. Right.
And so. So I would say, if youcan't keep customers, that's
(18:58):
another indication. And if youcan't recruit a team, if you
can't keep team, right, if,again, team is in one door out
the other, you can't recruit toptalent, things like that. It's
gonna be a hard road. And sothose would be some symptoms of
okay, maybe this is not theright company, either for this
season or for you personally.
(19:22):
And specifically in business.
It's actually better toacknowledge that quickly and go
through, you know, the pain ofthat early rather than allowing
something to go on too long. Andthat breakup later being even
more difficult.
Yeah. And you talked about somuch of this in your book, high
(19:44):
growth fundraising, the SiliconValley Way, which by the way, if
you sign up for overflowinsider, which is free, we have
four books left. So the next forpeople that sign up, get a copy
of Vance's book, feel free whenyou sign up for overflow insider
for free. You overflowed Dotcoslash insider of it. And this is
really your in your lane whenyou're talking about tech
(20:06):
innovation in the church andblending it all together. And I
think this is a really helpfulconversation and insight for
church leaders to know to comealongside entrepreneurs. Because
if you truly are in a startup,this is what you're facing. So I
would love to kind of have youexplain to people, what a
startup actually looks like,what the goals are, what you do
(20:29):
when you achieve set goals.
Yeah. And kind of the downwardeffect of that.
Yeah. So let's specifically talkabout venture backed startups.
Because there are other startupcompanies that people Bootstrap
and they become lifestylebusinesses, even if it's a
software business, just be kindof a lifestyle business that
pays for your, you know, yourpersonal salary and your
lifestyle and all that type ofstuff. But primarily, what
(20:52):
Silicon Valley is known for isfor venture capital based
businesses. Why should apotential company or
specifically software companyraise venture capital, if they
want to own a market dominatedmarket scale really quickly grow
really fast, right, because youcan grow faster with upfront
capital to invest into yourgrowth. And so the way that it's
(21:17):
constructed in the SiliconValley is, especially in these
times where people have seen theplaybook multiple times work,
yeah, you can have a visionoriented around a problem or a
pain point that you want tosolve, you can recruit a couple
of co founders. And you cancreate a deck and a prototype on
(21:42):
that you can have enough in justthat, assuming that there is
credibility pedigree experiencewith the founders, assuming that
the problem and the pain pointare deep problems and pain
points, assuming that peoplehave conviction that you're the
team to be able to solve thatproblem. And assuming that
(22:02):
people agree that enough peoplehave that problem for it to
represent a big market. If thosethings are true, what you can
probably do in the SiliconValley specifically is email
that out to high net worthindividuals, what we call angel
investors, that maybe have mademoney in tech, before understand
(22:23):
the software business, and dowhat's called a pre seed round,
or friends and family round, youcan typically raise, you know,
anywhere from 250,500 $1,000, topay for the co founder salaries
to pay for the initial softwareservices that you need to
resource to get the product upand running. Yep, etc, etc, if
(22:45):
you get to certain milestones.
So for example, you get to, youknow, maybe six figures in
revenue, let's say, you havesome testimonials, case studies,
you have a proof of concept thatthere's some traction with this
business, it's not just an ideaon a slide anymore, but there's
real traction, then you can goout and pitch professional
(23:07):
investors called venturecapitalist, in what's called a
formal seed round, that seedround might look like anywhere
from $2 million to $5 million.
Okay, this is where you canreally build out a more
professional team, you can hiremore engineers, you can scale
the product further, you can buymore infrastructure, so that
(23:28):
their scalability, security, allthat type of stuff to get suit
more serious customers and toscale the current customers that
you have invest into marketingmaybe a little bit and things
like that, you get to the nextmilestone that might look like a
million dollars in annualrecurring revenue. Once you hit
that marker, you would be readyfor what they call a series a
next round of financing thisfinancing round is maybe
(23:51):
anywhere from 10 to $20 million.
Wow. Right? Big jump. Yeah, and,you know, so forth. And so on
the next round of funding, maybeyou need to get to like five to
$10 million plus in annualrecurring revenue, and then you
would be worthy of a series B,which is could be anywhere from
20 million to 50 million. I havea friend that just raised a
series B for 63 million. Wow,right, a FinTech company. And so
(24:12):
the progression goes on. Sure.
So what's happening in thebackground? Well, each set of
investors are investing at acertain valuation. They're
buying a portion of your companyat a certain price at any given
time. Right. Sometimes they doit based on what they call the
market price. It's what peopleare willing to pay for based on
(24:35):
your idea, your pedigree, theirbelievability that you're going
to make this happen. Andsometimes they based evaluation
on real economics, so a multipleof your revenue. So for example,
for software as a servicebusinesses, what they might
value you at is 10 to 20x yourARR your annual recurring
(25:00):
revenue, if you're a high growthsoftware business, and that's
the price you're gonna pay. Sofor example, let's say that the
pre seed round, they purchased apart of your company by
investing in your company at a,let's say, $2 million valuation.
seed round, purchased it at a$10 million valuation, and then
(25:21):
Series B round, purchased thatat a $50 million valuation that
precede round that precede a $2million ratio a $2 million
valuation, when you raise aSeries A at 50 million just got
to 25x their money on paper. Gotit? Okay. Yeah. So you keep
(25:41):
progressing, you're servingcustomers, you have more buying
into your product, you're makingmore money, you know, all that
type of stuff. What are thequote, unquote, exit
opportunities for a startup?
Because ultimately, investorsare not investing, there's not
charity, right? out of thegoodness of their heart, they're
investing to get a return ontheir investment. So how do
people get a return on theirinvestment? Well, there's two
(26:01):
main paths you either sell,right, you can either sell to
what they call private equity,which is banks to get liquidity,
or you can sell to a biggercompany. So you can sell to like
a Google or a meta or aSalesforce or stripe or
something like that. So that'sone way where you can pay out
all of your employees pay outall of your investors, when
(26:23):
there is what they call aliquidity event. The other way
to extract money from thecompany is to do a public
fundraise. So that's the NASDAQ.
That's the New York StockExchange, Let's ring the bell
moment, okay, that's the whole,we're going to issue shares to
the public and the public isgoing to buy shares in the
company, which creates a liquidstock. Now employees or
(26:45):
investors that are invested, oremployees of a company that have
stock or stock options can nowsell their shares. Like it's
regular money. Got it? Okay.
Right. And so those are the waysso, you know, all that to say,
especially like in the churchspace is kind of funny. You
might want to understand thechurch software that you're
using, what their incentives aresure. Are there incentives? Are
(27:08):
they venture backed? And arethere incentives to go public?
Are there incentives to sell outto a bank? Are there incentives
to sell out to, you know, alarger company and what is going
to happen to the level ofservice if we're when that
happens? So it's kind of anuanced thing, but it's good to
consider. And this is kind ofthe inside baseball of how it
(27:32):
all works. Yeah.
So perfect. Because I can justimagine someone saying, Why do I
care what their incentives are,because if their product works
for us, that's all that's all wecare about. But you're not
taking into account thatdepending on what the incentive
is for them, that changes howyou ultimately are going to be
(27:52):
interacting with the platformand how said platform is
interacting with its customersas well.
Yeah, show me the incentive,I'll show you the outcome. And
so if you look at maybe aplatform that you're using that
just, let's say, sells to ahedge fund or a private equity
firm, what's the goal of thatprivate equity? Well, the goal
(28:13):
of private private equity is tobuy companies at a certain
price, optimize the company andthen sell it in three to five
years at a profit to anotherbank. Who then will try to do it
again. Yeah, these privateequity firms. These are
professional managers, these areMBAs from Harvard, Stanford,
these are executives fromconsulting firms like McKinsey
(28:34):
and Bain. They are spreadsheetpeople. What do spreadsheet
people do? Spreadsheet, peopleare going to look at the costs
to run a business. Yeah. Andthey're going to guess which
cost they can cut. So maybe theysay, You know what, this
Customer Success and SupportTeams very expensive. They're
not selling new business. Yeah.
They're not the engineersbuilding the product. We don't
(28:58):
need them. So what privateequity might do is cut the whole
customer success team. Andthat's why, you know,
everybody's had this before,where you've used a product that
you used to like, and then allof a sudden you don't like it
anymore. Yeah. Right. Like,yeah, the service deteriorate.
Or it's not what it used to be,you know, those brands that
(29:19):
you've interacted with, maybeit's like a hotel brand, or
maybe it's a luxury brand, orwhatever it might be Yeah, you
start realizing, Oh, this is notthe same quality that I used to
love. It's because a spreadsheetperson got involved. And they
started cutting costs.
Yeah. And that's so frustratingbecause you fall in love with a
(29:40):
brand because you feel tied toit in some way. Yeah, like the
brand's you truly love you havean identity with and aligned
with. And so when you startfeeling like a number, something
has clearly gone awry, andthat's really important to
understand that the softwareyou're using has A deeper
(30:01):
insight behind it insights onthe right word, but it has a
deeper, what's the word we'relooking for? Well, there's
a game being played in thebackend, right? There's
literally people in thebackground that have specific
milestones, targets, incentivesthat they need to hit because
they have constituents, theyhave stakeholders, they have
shareholders, and that's notwrong. But if you're choosing to
(30:25):
partner, if you're choosing todo especially a long term
partnership with something asimportant as who is facilitating
you're giving your resources,your money, yeah, your finances,
right, maybe you shouldunderstand the motivations
behind said company. Becausethere are certain things I would
look for. Who are the foundersof the company? are the founders
(30:46):
still there? Yeah. What is themission of the company? What is
the ideal outcome for thecompany? Are they trying to
position themselves to sell?
Have they already sold? Are theyin the process of cost cutting?
Is that maybe affecting, youknow, the support and the
success team and the customerservice and the brand? Do they
have other incentives to go intodifferent categories? That's not
(31:08):
your category that won't serveyou anymore? And so it's
actually kind of good tounderstand inside baseball of
business. Yeah. Because you canhave more context about so you
know, it's with anything, right?
It's, it's the same way thatconservatives cancel target and
(31:28):
do these things. Because theystart, they start finding out
the inside baseball, they startfinding out the motive, they
start finding out the incentive.
Yeah. And it's it's not even memaking a stance, but it's me
pointing out that as people findout that motive and incentive
and it doesn't align withtheirs, right. They don't need
to shop there anymore. Sure. Soit's the same thing that if
(31:50):
you're a church operator, apastor and executive pastor,
anything like that, yeah. Andyou're shopping, quote, unquote,
you can do the same level ofdiligence. Yeah. And your your
congregation is doing the sameto how many people do you have
made? Yeah, good point. Wow.
That's a really good point.
So you have that same power? As,as everyone else in your church
(32:11):
does, too. Yeah. Well, I thinkthis is really helpful because
it gives more of an insight asto what's actually going on
behind the scenes. Yeah. Becauseit's one thing to just be like,
Yeah, we use the software, it'sanother thing to feel like the
software is using you for abottom line. And again, right.
And so when there's movement,and a shifting that happens in a
company, not crazy growth, butthings like founders changing,
(32:35):
etc. Pay attention to that. Someof the best companies that I
love that I'm personallyinvested into in the publicly
traded stock market are stillfounder led, right? One of you
know, the companies I reallylove is Airbnb. Still founder
let Brian Chesky. Yeah, was thefounder of the company, still
the CEO of the company, stillrunning the company. Some of the
(32:55):
rises of brands, over the courseof time has been because of the
founder, you think of Apple, youimmediately think of Steve Jobs,
Tim Cook has done a fantasticjob. But Steve Jobs is really
the heart and soul of thatcompany, even though he's passed
away. And so you got to get tounderstand who's behind this was
their motivations. Yeah, whatwas their mission? You know,
(33:17):
even people like Walt Disney,right? Still the heart and soul
of that company because of howmuch of a visionary he was and
how much of his soul andheartbeat he instilled in the
company, even though he's notaround anymore. And so you just
got to understand those originstories. You got to understand
the motives, you got tounderstand the different
incentive pieces that are inplay now. And that could
potentially give you a clue asto where it's headed.
(33:41):
Yeah, no, I love this. I thinkthis is just a fun episode to
give people something new tothink about. Yeah, because we
want to empower the listeners.
Yes. All right. That's it. Seeyou next time. Thanks so much
for listening to the give it uppodcast if you want to receive
even more insights on churchinnovation, culture, and giving.
Now you can sign up for free tobe an overflow insider, where
(34:04):
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please subscribe and leave areview for the show? This tells
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more church leaders. Thanks somuch. We'll see you next time.
In the early days, we realize really quickly that
(00:03):
specifically five church is notgoing to be for everyone that
gave us permission to be thebest church, we could be for who
we are and for who were calledto specifically, even when you
talk about, okay, do what's bestfor the user, you actually have
to understand what your targetuser, we're used specifically
called.
(00:23):
A pastor turn tech leader and amillennial churchgoer, exploring
the intersection of technology,culture and faith, equipping you
with innovative strategies tosupport you as you live out your
calling leader churches withconfidence to step into the
future together. This is thegive it up podcast. But it's one
of the gifts that we have beingpart of overflow is that it is
(00:44):
quite literally a Silicon Valleystartup company. That's where
we're sitting right now. Andbecause we're a startup, we've
had to learn some veryapplicable things such as
pivoting. Yes, knowing when toquit or abandon something had
ended a different direction, andso many other nuances and
caveats. And I feel like theSilicon Valley has become one
(01:07):
known for the tech spaceinnovation. But it's also known
for being the best at pivotingand changing directions in order
to succeed. And so I know thatyou have a lot of experience
dealing with this. So I kind ofwant to get into your head in
this episode. Because there arechurch planners that could be
listening. There are bigchurches that could be
(01:29):
listening, everyone in the sameboat of we always have ideas.
And I want to know, the lens inwhich you use when we're
thinking about ideas here itoverflow, as to, should we
pursue this, or should we not?
Let's start with that one. Yeah,good. I mean, whatever your
perspective, or perception ofthe Silicon Valley, here's the
(01:50):
facts. This is the home ofApple. This is the home of
Google madda. Twitter now x.comTesla, so many incredible
companies, and Vidya. They'reexploding because of the whole
AI wave right now. And all theGPUs that are required, even
(02:12):
before that crop of companies,which I didn't even include Uber
and Airbnb as some of the newerwave companies. But even before
that crop, you had the OGS,right? You had hp, you had, you
know, these Titan companies intoit Intel, that are birth that
(02:34):
call Silicon Valley home. Yeah.
And really, there are a lot ofreasons for that. And we can
dive into that this episode, ormaybe another episode. But the
fact of the matter is, we canlearn, we can learn if there's
that much concentration ofinnovative technology, software,
(02:55):
internet companies in one space,maybe they've figured out
something right. And so it'ssuch a privilege and an honor to
be able to live here to talk tothe people that have created
these companies been executiveat these companies that have
funded these companies, whetherthey're venture capitalists,
angel investors, you know, theSilicon Valley, you guys have
come here, multiple times. Now,every time you guys come
(03:18):
arranged, by the way, which youknow, stop coming. But even when
it's nice out, there's not muchto do. There's not much to do,
the Silicon Valley actually isquite boring. And so the only
thing to do is really invest incompanies start companies start
a new app. And that's what itis. We can learn a lot from the
(03:39):
builders, the makers, creators,innovators here in the Silicon
Valley. And so I wrote a wholebook called high growth
fundraising, the Silicon ValleyWay. And that's not to over
elevate or over glorify theSilicon Valley. But that's just
to leverage the things of thisworld leverage, maybe things
that are in secular culture, forthe kingdom. Yeah. For the local
(04:03):
church for church growth. Yeah,we can take a page from their
book the same way that maybemany pastors, senior church
leaders, creative directors, atchurches, maybe take a page out
of Hollywood's book, maybe takea page out of high production,
high quality production studiosin Hollywood, in LA, the same
way that our merch teamsprobably take a page out of the
(04:28):
book from Milan or Paris, ordifferent brands that are
prominent is the same way thatwe can think about scaling and
innovation. And we can learnthat from the best place on the
planet that does it, which isthe Silicon Valley, you named a
couple of terms, we can kind ofgo in whatever direction you
want. So but you named onepivot. Right? Yeah. So your
(04:50):
question around there was, whathave we learned being a Silicon
Valley company in the area ofpivoting and how can that apply
to the church? Yeah. Yeah, soThere is this underlying theme
in the Silicon Valley that isbuild things that your customers
want, build things that peoplewant, but more specifically
(05:11):
build things that your customerswant to have this customer
obsession to have this useroriented perspective. Literally,
there's a whole function thatreally was made famous because
of the Silicon Valley called youi UX, right user interface and
user experience designers, theseare designers specifically,
(05:34):
designing from a userperspective, how can I reduce
clicks? How can I format thingsto increase conversion to
increase ease of use? How can Ido these things for the sake of
the user, so that the user has adelightful experience that they
want to come back that they wantto share it with their friends,
(05:55):
that they get quicker to wherethey want to go? Yeah, and
Silicon Valley is, is reallymade known for that. And so when
you think about that concept ofbuilding things that people want
having a user oriented approach,one of the ways that you measure
that is through engagementmetrics, okay? Not just how many
users that I have, that can be avanity metric. But how many
(06:18):
times are those people engagingon a daily, weekly, you know,
Max monthly basis, right? Mauses what they call it monthly
active users. And so if thatnumber is going down, or even
stagnating, and not growinganymore? Yeah, maybe it's time
to pivot. Yeah, right. And sothat kind of user oriented
(06:40):
nature lends Silicon Valleycompanies to pivot quickly,
because they don't want to fallinto the definition of insanity,
keep doing the same things keepoffering the same platform, our
product not changing andexpecting different results,
right. Yeah, that's insane. Andso in the same way, churches, we
kind of battle with this, wekind of battle with this,
because on one spectrum, thechurch is all about
(07:01):
traditionalism. And in a way,it's kind of like the meetings
are all round, how can we dothings the same? Like we've done
it for 1000s of years, right?
How can we, you know, keeptradition. And for the message
that we're trying to preach? Ithink that's important, but for
the method in which to propagatethat message. I think that's
actually really dangerous. Yeah.
(07:23):
I think more churches shouldadopt this term. Maybe Silicon
Valley made famous pivot, forthe sake of your user, which is
the disciple. Yeah. Or theseeker believer? Yeah.
I think this is reallyimportant, because it would be
almost obvious for people tosay, well, building things
people want people want Jesus.
But it's not it's notautomatically going to be
(07:47):
successful, just because youassume we're going to open a
building because people wantJesus. Yeah. And you're not
saying social media engagement,right, in the way that people
hear engagement, you're talkinga much deeper disciple making
type of that. So can you kind ofelaborate good on that?
(08:07):
Yeah, you know, there's a coupledirections. My mind goes in this
because in the early days, werealized really quickly that
specifically vive church is notgoing to be for everyone. Five
churches not going to even befor every believer. Yeah, to be
honest. And that's the beauty ofthe Body of Christ, right? We're
not actually, vive churchspecifically is not meant to
(08:31):
literally reach every singlebeliever on this planet. That's
what the other hundreds of 1000sif not millions of churches are
meant to do collectively as onebody. Sure. Paul instructs
churches in the body of Christto get along all the time to
move in unity, because that'show people will see Jesus is for
our love for one another. Yeah.
And what we realized early on,was that gave us permission to
(08:54):
be the best church, we could befor who we are and for who were
called to specifically. And soeven when you talk about, okay,
do what's best for the user, youactually have to understand what
your target user, who are youspecifically called to? Are you
a church in the Silicon Valley,then probably your call to
(09:15):
people in tech? Rob? Yeah,right. If you're not, maybe you
shouldn't be located in MountainView, California, across the
street from Google, if you don'tfeel called to software
engineers. Yeah. Right. SoftwareEngineers and Google skew
towards a different demographicage wise, right? It's typically
20 to 40. If you're 20 to 40,maybe you're more in the young
(09:36):
kids category. So you can startbreaking it down and so
defining, okay, who am Ispecifically called to? Yeah,
and how can I be the best forthem? I'm not going to be the
best for all, but how can I bethe best for them? And to your
point around, yeah, ultimately,we believe people want Jesus but
here's the truth. That Every onewill be saved. Right? Yeah. And
(10:00):
so there is this tension whereit's almost as if sometimes we
try to cater our product toomuch to what we think people
want. And start negotiating onthe perfection of the Bible and
its gospel, wow. And in itsunadulterated form, is what
(10:24):
people actually need, eventhough they may reject it. Sure.
And so there's a little bit ofnuance in in what we do. But
what I would say is that if youunderstand your target, and you
are focused on presenting thegospel in a way that can be
understandable to that target,then you really leave it to God.
(10:47):
Yeah, right. At that point, you,you leave it to God in the Holy
Spirit to do what only God inthe Holy Spirit can do. I think
there's a deeper level here,though, in terms of
discipleship, if they are afollower of Jesus, and they do
go to your church, theirengagement level is probably a
better gauge for how you cantweak maybe your quote unquote,
(11:09):
product or service, your worshipexperience, to get them into a
deeper connection to communitywith one another. And with
Jesus. At that point, it's notabout just letting kind of God
do it. If they're already aJesus follower, it's like, no,
no, he wants to partner with younow, to deepen them in their
discipleship.
(11:32):
Yeah. what it sounds like you'resaying is that when Silicon
Valley's approach would be buildproducts that people want? The
church's framing is actuallybuild something that people
need? Yeah, it's need versusone. Good. And that's how you
can tell the difference. Sowe're talking about creating
things and engagement, etc. Andyou mentioned it briefly, when
(11:54):
it comes to pivoting. Let's saysomething isn't working. And in
a previous episode, you actuallyshared your experience at church
where you guys started a givenkiosk situation. Yeah. After
reading Robert Morris's book.
Yeah. And then after four weeks,you abandon that idea
completely? How could someoneknow and create a framework per
se, that aligns with the conceptof, okay, if this does or does
(12:20):
not happen? That's when I knowwe need to pivot and change
direction from here.
That one was a pretty clear onebecause giving took a nosedive?
Yeah, so we needed to resurrectit. Good thing, we believe in
resurrection and the church.
Because our finances were almostdead based on the graph. It
flatlined. So that was a littlebit more obvious one, I do think
(12:45):
this is a good topic, becauseespecially in the early days,
you kind of need to preempt itwith your team. We're gonna
pivot a lot. We're gonna changea lot. Yeah, just be ready for
change. Okay, yeah. Like justbrace yourself, put on your seat
belts. If you want to go on thisride with us, if you want to go
on this journey, if you want togo this adventure, just just
make it cool. If you want to goon this adventure, then just be
(13:06):
ready for change. Because wemight be rolling out the Next
Steps program today. But in twomonths, don't ask me like we're
probably going to change it ifit's not working. Yeah, do
things that work, right. There'sa balance, though, where
sometimes you need to let thingsmature long enough to know if it
can work or not. It's allsituational. It's all
(13:28):
contextual. Yeah. I would saythis, here's a good decision
framework that you can makequicker decisions and make
quicker pivots on things thatare quote unquote, reversible.
Right? Okay. So you can bereally fast and make decisions
and kind of experiment withthings and test things for
(13:48):
things that are easy to undo,unwind, pivot, explain. But
don't be so hasty with makingthe decisions changes in pivots
for things that are irreversibleor hard to reverse. Does that
make sense? So, for example,pivot all you want in terms of
the language for your next stepsprogram, go ham, right,
(14:11):
especially in the early days,and people really didn't like
the whole, like, grow, discover,learn, I don't know even what
the language is anymore, butthey didn't like that. And you
needed more hipster language. Doit to your heart's content.
Yeah, no harm, no foul,especially if you only have like
a couple dozen people. What doyou got to lose? I mean, you
don't have a lot of people thatare fixed to language anyway. So
(14:35):
you can pivot all you want inthat. But you know, an extreme
example, on the other side ispurchasing a building and taking
out a loan for that building.
And taking out a 30 yearmortgage on that building that's
a little bit more of anirreversible decision, or maybe
not irreversible, very hard tounwind. And so you want to be
very thoughtful about that. One.
You want to invite counsel, youwant to make sure it goes to the
(14:56):
board. You want to make sure youtalk to Key givers, you want to
make sure that you weigh that inprayer. And you know, you're not
pivoting too quickly with thosetype of heavy decisions. Yeah.
And that's also super important.
And being in the Silicon Valley,we know just how few startups
actually survive. The majorityof them do not, right.
(15:22):
Yeah. Yeah. Eight out of 10 die.
Yeah, in the firstfew years. And that's
staggering. And, you know, let'sjust use church planning as an
example, because that's an easy,parallel. But let's say you've
attempted to plant a church.
It's not going well, likenumbers are not up into the
right. If anything, you'vepeaked, you flatlined? How do
(15:44):
you know when to abandon or letsomething die? With
the church is a little bittrickier. Yeah. Because,
especially in a category likethat, it is oftentimes a
calling. Right? And, and if youfeel convicted, that it's your
calling, you cannot abandon yourcalling. Right. Right. Yeah.
(16:07):
And, and there's a lot of waysthat you can contextualize the
hardship of what you might befacing, whether it's being stuck
or, you know, in stagnation, youknow, there's very practical
things that you can do to try todissect, okay, what is not
working? Why is it not working?
Yeah. So it's a little bittrickier. If we're specifically
talking about a pastor's callinga church planter is calling. Let
(16:27):
me zoom out a bit and just talkabout, in general, whether you
should abandon a project, aproduct, a platform, a feature,
you know, even a startup, right?
Because, again, in the SiliconValley, eight out of 10 startups
completely fail. Yeah. Part ofthe reason that is true, though,
(16:48):
is because most of those 10 aremoonshots what we call
moonshots. These are change theworld or bust type ideas. These
are really ambitious goals that,you know, two of them when they
pan out, they pan out real big.
Yeah. And the eight that fail,it kind of makes sense, because
it was already kind ofimpossible anyways. And so I
(17:09):
would say that part of churchplanting should be not. Am I
going to abandon my church planor not? But do I have 10
initiatives that I put out, wereenough failed to indicate that
I'm ambitious enough? Yeah.
(17:30):
Yeah. If everything that you dojust succeeds, maybe you're not
risking enough, maybe you're notstepping out on faith enough?
Maybe it's actually all in yourown strengths. So that I don't
know. That's kind of like adifferent thought to that. Yeah.
I would say in the realm oflist, keep it to company
building really quick. There's acouple things that will make it
very clear to abandon ship.
Number one, you run out ofmoney. Companies don't run out
(17:54):
volunteers like church can runoff volunteers. Yeah. And so
there's a there's a strictergrading card on your worthiness
have to continue to stay inbusiness. Because, again,
nobody's going to step into acareer where they have to work
for free because they have topay their bills, they got to
feed their family. Yeah. Right.
So running out of money is one.
Another one is if too manycustomers just sign up and don't
(18:17):
want to continue using you.
Right? If the attrition rate, ifthe churn rate is too high, and
it's higher than the amount ofcustomers that want to come on,
then you either got to figureout how to plug that up. Or
you're kind of just wastingresources, because it's kind of
(18:37):
in one door out the other. Yeah,right. Yep. Applying that to
churches, same thing, right?
Maybe you shouldn't, youshouldn't invest into that
billboard yet until you figureout your next steps program
until you figure out your smallgroups until you figure out your
ministry team and figure outyour faith and foundations or
alpha course or whatever youwant to call it. Yeah. Right.
And so. So I would say, if youcan't keep customers, that's
(18:58):
another indication. And if youcan't recruit a team, if you
can't keep team, right, if,again, team is in one door out
the other, you can't recruit toptalent, things like that. It's
gonna be a hard road. And sothose would be some symptoms of
okay, maybe this is not theright company, either for this
season or for you personally.
(19:22):
And specifically in business.
It's actually better toacknowledge that quickly and go
through, you know, the pain ofthat early rather than allowing
something to go on too long. Andthat breakup later being even
more difficult.
Yeah. And you talked about somuch of this in your book, high
(19:44):
growth fundraising, the SiliconValley Way, which by the way, if
you sign up for overflowinsider, which is free, we have
four books left. So the next forpeople that sign up, get a copy
of Vance's book, feel free whenyou sign up for overflow insider
for free. You overflowed Dotcoslash insider of it. And this is
really your in your lane whenyou're talking about tech
(20:06):
innovation in the church andblending it all together. And I
think this is a really helpfulconversation and insight for
church leaders to know to comealongside entrepreneurs. Because
if you truly are in a startup,this is what you're facing. So I
would love to kind of have youexplain to people, what a
startup actually looks like,what the goals are, what you do
(20:29):
when you achieve set goals.
Yeah. And kind of the downwardeffect of that.
Yeah. So let's specifically talkabout venture backed startups.
Because there are other startupcompanies that people Bootstrap
and they become lifestylebusinesses, even if it's a
software business, just be kindof a lifestyle business that
pays for your, you know, yourpersonal salary and your
lifestyle and all that type ofstuff. But primarily, what
(20:52):
Silicon Valley is known for isfor venture capital based
businesses. Why should apotential company or
specifically software companyraise venture capital, if they
want to own a market dominatedmarket scale really quickly grow
really fast, right, because youcan grow faster with upfront
capital to invest into yourgrowth. And so the way that it's
(21:17):
constructed in the SiliconValley is, especially in these
times where people have seen theplaybook multiple times work,
yeah, you can have a visionoriented around a problem or a
pain point that you want tosolve, you can recruit a couple
of co founders. And you cancreate a deck and a prototype on
(21:42):
that you can have enough in justthat, assuming that there is
credibility pedigree experiencewith the founders, assuming that
the problem and the pain pointare deep problems and pain
points, assuming that peoplehave conviction that you're the
team to be able to solve thatproblem. And assuming that
(22:02):
people agree that enough peoplehave that problem for it to
represent a big market. If thosethings are true, what you can
probably do in the SiliconValley specifically is email
that out to high net worthindividuals, what we call angel
investors, that maybe have mademoney in tech, before understand
(22:23):
the software business, and dowhat's called a pre seed round,
or friends and family round, youcan typically raise, you know,
anywhere from 250,500 $1,000, topay for the co founder salaries
to pay for the initial softwareservices that you need to
resource to get the product upand running. Yep, etc, etc, if
(22:45):
you get to certain milestones.
So for example, you get to, youknow, maybe six figures in
revenue, let's say, you havesome testimonials, case studies,
you have a proof of concept thatthere's some traction with this
business, it's not just an ideaon a slide anymore, but there's
real traction, then you can goout and pitch professional
(23:07):
investors called venturecapitalist, in what's called a
formal seed round, that seedround might look like anywhere
from $2 million to $5 million.
Okay, this is where you canreally build out a more
professional team, you can hiremore engineers, you can scale
the product further, you can buymore infrastructure, so that
(23:28):
their scalability, security, allthat type of stuff to get suit
more serious customers and toscale the current customers that
you have invest into marketingmaybe a little bit and things
like that, you get to the nextmilestone that might look like a
million dollars in annualrecurring revenue. Once you hit
that marker, you would be readyfor what they call a series a
next round of financing thisfinancing round is maybe
(23:51):
anywhere from 10 to $20 million.
Wow. Right? Big jump. Yeah, and,you know, so forth. And so on
the next round of funding, maybeyou need to get to like five to
$10 million plus in annualrecurring revenue, and then you
would be worthy of a series B,which is could be anywhere from
20 million to 50 million. I havea friend that just raised a
series B for 63 million. Wow,right, a FinTech company. And so
(24:12):
the progression goes on. Sure.
So what's happening in thebackground? Well, each set of
investors are investing at acertain valuation. They're
buying a portion of your companyat a certain price at any given
time. Right. Sometimes they doit based on what they call the
market price. It's what peopleare willing to pay for based on
(24:35):
your idea, your pedigree, theirbelievability that you're going
to make this happen. Andsometimes they based evaluation
on real economics, so a multipleof your revenue. So for example,
for software as a servicebusinesses, what they might
value you at is 10 to 20x yourARR your annual recurring
(25:00):
revenue, if you're a high growthsoftware business, and that's
the price you're gonna pay. Sofor example, let's say that the
pre seed round, they purchased apart of your company by
investing in your company at a,let's say, $2 million valuation.
seed round, purchased it at a$10 million valuation, and then
(25:21):
Series B round, purchased thatat a $50 million valuation that
precede round that precede a $2million ratio a $2 million
valuation, when you raise aSeries A at 50 million just got
to 25x their money on paper. Gotit? Okay. Yeah. So you keep
(25:41):
progressing, you're servingcustomers, you have more buying
into your product, you're makingmore money, you know, all that
type of stuff. What are thequote, unquote, exit
opportunities for a startup?
Because ultimately, investorsare not investing, there's not
charity, right? out of thegoodness of their heart, they're
investing to get a return ontheir investment. So how do
people get a return on theirinvestment? Well, there's two
(26:01):
main paths you either sell,right, you can either sell to
what they call private equity,which is banks to get liquidity,
or you can sell to a biggercompany. So you can sell to like
a Google or a meta or aSalesforce or stripe or
something like that. So that'sone way where you can pay out
all of your employees pay outall of your investors, when
(26:23):
there is what they call aliquidity event. The other way
to extract money from thecompany is to do a public
fundraise. So that's the NASDAQ.
That's the New York StockExchange, Let's ring the bell
moment, okay, that's the whole,we're going to issue shares to
the public and the public isgoing to buy shares in the
company, which creates a liquidstock. Now employees or
(26:45):
investors that are invested, oremployees of a company that have
stock or stock options can nowsell their shares. Like it's
regular money. Got it? Okay.
Right. And so those are the waysso, you know, all that to say,
especially like in the churchspace is kind of funny. You
might want to understand thechurch software that you're
using, what their incentives aresure. Are there incentives? Are
(27:08):
they venture backed? And arethere incentives to go public?
Are there incentives to sell outto a bank? Are there incentives
to sell out to, you know, alarger company and what is going
to happen to the level ofservice if we're when that
happens? So it's kind of anuanced thing, but it's good to
consider. And this is kind ofthe inside baseball of how it
(27:32):
all works. Yeah.
So perfect. Because I can justimagine someone saying, Why do I
care what their incentives are,because if their product works
for us, that's all that's all wecare about. But you're not
taking into account thatdepending on what the incentive
is for them, that changes howyou ultimately are going to be
(27:52):
interacting with the platformand how said platform is
interacting with its customersas well.
Yeah, show me the incentive,I'll show you the outcome. And
so if you look at maybe aplatform that you're using that
just, let's say, sells to ahedge fund or a private equity
firm, what's the goal of thatprivate equity? Well, the goal
(28:13):
of private private equity is tobuy companies at a certain
price, optimize the company andthen sell it in three to five
years at a profit to anotherbank. Who then will try to do it
again. Yeah, these privateequity firms. These are
professional managers, these areMBAs from Harvard, Stanford,
these are executives fromconsulting firms like McKinsey
(28:34):
and Bain. They are spreadsheetpeople. What do spreadsheet
people do? Spreadsheet, peopleare going to look at the costs
to run a business. Yeah. Andthey're going to guess which
cost they can cut. So maybe theysay, You know what, this
Customer Success and SupportTeams very expensive. They're
not selling new business. Yeah.
They're not the engineersbuilding the product. We don't
(28:58):
need them. So what privateequity might do is cut the whole
customer success team. Andthat's why, you know,
everybody's had this before,where you've used a product that
you used to like, and then allof a sudden you don't like it
anymore. Yeah. Right. Like,yeah, the service deteriorate.
Or it's not what it used to be,you know, those brands that
(29:19):
you've interacted with, maybeit's like a hotel brand, or
maybe it's a luxury brand, orwhatever it might be Yeah, you
start realizing, Oh, this is notthe same quality that I used to
love. It's because a spreadsheetperson got involved. And they
started cutting costs.
Yeah. And that's so frustratingbecause you fall in love with a
(29:40):
brand because you feel tied toit in some way. Yeah, like the
brand's you truly love you havean identity with and aligned
with. And so when you startfeeling like a number, something
has clearly gone awry, andthat's really important to
understand that the softwareyou're using has A deeper
(30:01):
insight behind it insights onthe right word, but it has a
deeper, what's the word we'relooking for? Well, there's
a game being played in thebackend, right? There's
literally people in thebackground that have specific
milestones, targets, incentivesthat they need to hit because
they have constituents, theyhave stakeholders, they have
shareholders, and that's notwrong. But if you're choosing to
(30:25):
partner, if you're choosing todo especially a long term
partnership with something asimportant as who is facilitating
you're giving your resources,your money, yeah, your finances,
right, maybe you shouldunderstand the motivations
behind said company. Becausethere are certain things I would
look for. Who are the foundersof the company? are the founders
(30:46):
still there? Yeah. What is themission of the company? What is
the ideal outcome for thecompany? Are they trying to
position themselves to sell?
Have they already sold? Are theyin the process of cost cutting?
Is that maybe affecting, youknow, the support and the
success team and the customerservice and the brand? Do they
have other incentives to go intodifferent categories? That's not
(31:08):
your category that won't serveyou anymore? And so it's
actually kind of good tounderstand inside baseball of
business. Yeah. Because you canhave more context about so you
know, it's with anything, right?
It's, it's the same way thatconservatives cancel target and
(31:28):
do these things. Because theystart, they start finding out
the inside baseball, they startfinding out the motive, they
start finding out the incentive.
Yeah. And it's it's not even memaking a stance, but it's me
pointing out that as people findout that motive and incentive
and it doesn't align withtheirs, right. They don't need
to shop there anymore. Sure. Soit's the same thing that if
(31:50):
you're a church operator, apastor and executive pastor,
anything like that, yeah. Andyou're shopping, quote, unquote,
you can do the same level ofdiligence. Yeah. And your your
congregation is doing the sameto how many people do you have
made? Yeah, good point. Wow.
That's a really good point.
So you have that same power? As,as everyone else in your church
(32:11):
does, too. Yeah. Well, I thinkthis is really helpful because
it gives more of an insight asto what's actually going on
behind the scenes. Yeah. Becauseit's one thing to just be like,
Yeah, we use the software, it'sanother thing to feel like the
software is using you for abottom line. And again, right.
And so when there's movement,and a shifting that happens in a
company, not crazy growth, butthings like founders changing,
(32:35):
etc. Pay attention to that. Someof the best companies that I
love that I'm personallyinvested into in the publicly
traded stock market are stillfounder led, right? One of you
know, the companies I reallylove is Airbnb. Still founder
let Brian Chesky. Yeah, was thefounder of the company, still
the CEO of the company, stillrunning the company. Some of the
(32:55):
rises of brands, over the courseof time has been because of the
founder, you think of Apple, youimmediately think of Steve Jobs,
Tim Cook has done a fantasticjob. But Steve Jobs is really
the heart and soul of thatcompany, even though he's passed
away. And so you got to get tounderstand who's behind this was
their motivations. Yeah, whatwas their mission? You know,
(33:17):
even people like Walt Disney,right? Still the heart and soul
of that company because of howmuch of a visionary he was and
how much of his soul andheartbeat he instilled in the
company, even though he's notaround anymore. And so you just
got to understand those originstories. You got to understand
the motives, you got tounderstand the different
incentive pieces that are inplay now. And that could
potentially give you a clue asto where it's headed.
(33:41):
Yeah, no, I love this. I thinkthis is just a fun episode to
give people something new tothink about. Yeah, because we
want to empower the listeners.
Yes. All right. That's it. Seeyou next time. Thanks so much
for listening to the give it uppodcast if you want to receive
even more insights on churchinnovation, culture, and giving.
Now you can sign up for free tobe an overflow insider, where
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