November 19, 2024 • 36 mins
Dan Balcauski interviews Robert Johnston, CEO and co-founder of Adlumin, a cybersecurity company. The discussion traces Robert's journey from his early cybersecurity interests at the Naval Academy to pivotal experiences in the Marine Corps and NSA. Robert details the challenges and sacrifices in launching Adlumin and highlights the company’s evolution, focusing on mid-market security operations. Key topics include achieving product-market fit and scaling through an optimized channel strategy. Additionally, Robert shares insights on effective leadership, decision-making under uncertainty, the crucial role of early investors, and strategies for maintaining personal and business well-being. This episode offers valuable lessons on the intersection of military discipline and tech entrepreneurship, emphasizing the significance of distribution in B2B SaaS.
01:04 Robert's Journey in Cybersecurity
02:07 Founding Adlumin: The Early Days
03:41 The Reality of Starting a SaaS Business
05:36 Military Experience and Leadership
08:50 Adlumin's Current Form and Strategy
10:53 Challenges in Scaling Adlumin
11:24 Nailing the Go-to-Market Strategy
14:37 Success in the Channel Market
18:56 Adlumin's Channel-Only Strategy
19:35 Transitioning to a 100% Channel Model
20:39 Evolving the Channel Program
21:32 Leadership and Military Background
22:13 Hands-On Leadership Approach
26:21 Delegation and Decision-Making
30:10 The Importance of Product Management
32:57 Defining Success and Key Influences
36:00 Advice for SaaS CEOs
36:20 Conclusion and Final Thoughts
Guest Links
Adlumin.com
Robert Johnston on LinkedIn
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dan Balcauski (00:20):
Welcome to SaaS Scaling Secrets, the podcast
that brings you the insidestories from the leaders of the
best scale up B2B SaaScompanies.
I'm your host, Dan Balcauski,founder of Product Tranquility.
Today, I'm excited to speak withRobert Johnston.
Robert is the CEO of Adlumin, acybersecurity company he co
founded in 2016.
With a background in militarycybersecurity and counter
espionage, Robert has leveragedhis unique expertise to build
(00:40):
Adlumin into a leading providerof security operations and
threat intelligence solutionsfor mid market organizations.
Before joining the privatesector, Robert served as an
officer in the United StatesMarine Corps.
Let's dive in.
Welcome Robert to SaaS ScalingSecrets.
Robert Johnston (00:53):
Thank you.
Thank you for the kindintroduction.
Dan Balcauski (00:56):
Well, I gave folks a little bit of a taste of
your background, but could youplease just briefly introduce
yourself?
Tell us a little about yourjourney in the SaaS world.
Robert Johnston (01:02):
Yeah, absolutely.
I I got started in cybersecurityin college.
So I went from Floridaoriginally.
I went to the Naval Academy formy undergrad, and that's when I
first got into the or wasexposed, I would say, to the,
to, to the sector.
It was a sector that I always, Icame to really love while I was
(01:23):
in college.
And then I went to the MarineCorps, I served eight years in
the Marine Corps and Based offof my experience in college, I
wanted to shape a career doingsomething similar in
intelligence or in cybersecuritywhile I was in, in the Marine
Corps.
And so I did, I had theopportunity to shape my kind of
career while I was in theMarines.
(01:46):
I worked at The Network SecurityCenter for the Marine Corps.
I worked at the NationalSecurity Agency.
I worked for, got to do somework for various intelligence
community, organizations.
And so that's where I reallykind of really cut my teeth.
And then I left the Marine Corpsafter eight years, I went to a
firm called CrowdStrike for alittle while.
It was a CrowdStrike.
(02:07):
For eight, nine months, and thenleft and founded Adlumin.
My Adlumin story begins at avery small incubator actually
here in the DC, Maryland andVirginia area called called Mach
37, where I left CrowdStrike andI went to incubator was a
promise of, come here for threemonths, we'll give you a little
(02:29):
bit of money, not a lot, 50K orwhatever.
And come here, we'll give you alittle bit of money and you get
your business up, up and off theground and see if we can't,
incubate it with the hopes thatback then it was funded by the
state of Virginia with the hopesthat you would bring jobs to,
to, to the area, right?
The DC, Maryland, Virginia area,which we did do.
(02:49):
We did, we brought a lot ofjobs.
So, that was my, SaaS startupjourney, right?
The company has taken many formsover the years.
It's changed, several times inthe startup world, they might
call this pivoting.
Right.
But really they're justmodifications to the business
that that you're doing to kindof better serve the market.
(03:10):
That's really all it is.
Dan Balcauski (03:12):
Well, I appreciate you giving us that
bit of an arc in your backgroundfascinating that, your love of
this space started all the wayback in university.
Maybe it's one of those moments,or maybe it's some other moment
in your life, but I think we allhave these transformational
moments, sometimes I refer to itas a superhero transformation
moment where one, one day you'rejust normal Peter Parker, high
school student you get bit by aradioactive spider, you wake up
(03:35):
and the next day you're SpiderMan.
You look back over your life.
What's been your superherotransformation moment?
Robert Johnston (03:41):
Yeah.
Starting a SaaS business.
It came at the right time, Ithink, in my life as well.
When I first started Adlumin, Iwasn't married, I didn't have
any kids.
Not that you can't do a startupwhen you have those things, but
your perspective definitelychanges.
Your ability to sacrifice alsochanges.
(04:02):
And in the beginning, in theearly years of Adlumin, we had
to sacrifice a lot, right?
We had to sacrifice a lot.
And so that was easier just withthat point in time in my life.
Also, I think I was youngenough.
I was in my maybe early thirtieswhen I started Adlumin.
was probably a little naive onhow hard it was actually going
(04:23):
to be.
From the outside looking in,it's all, glitz and glamour.
But when you're in there doingthe work, especially in the
early days, like things are muchdifferent.
The reality is much different.
Like it is a lot of hard workand no matter how much success
you find, that actually, thathard work never goes away.
(04:44):
It always remains.
And so that's another commonmisconception is, Oh, it gets
easier.
You're at some point you'reliving in an ivory tower.
This is not true.
Like the hard work andsacrifice.
Kind of never stop.
It does get a little easiercertainly that Than the first
year and a half.
But it just, things get morecomplex as things get larger.
(05:04):
So, that was that that's my takeon that.
Dan Balcauski (05:08):
I certainly resonate with that story.
I've told people more than onetime that regarding the naivete
of starting your own thing.
I tell people if I go back andtell myself five yerequired.
Maybe I would have turned aroundand done something else.
I'mired.
I'm glad you know that at thesame time, I'm glad I did it.
I wouldn't trade it, but youknow, the the expectations
(05:32):
versus reality could be quiteshocking and there are
differences.
You do have an interestingbackground, coming from the
military, like, has there beenanything that you've gathered
your skill or experience or sortof mindset from your military
experience you think has beenhelpful and proved valuable in
the, being a tech startupleader?
Robert Johnston (05:54):
So there's the tangibles in the intangibles,
in, in the industry that I'm in.
I did have direct, I did gain alot of direct domain experience
from, the military because I wasdoing the job of cyber security
while I was in, in the Marines,right?
So, that, that was fortunate.
Like I got a lot of training, alot of education.
(06:14):
I was doing it.
I was doing it.
No kidding for my job.
Right?
And so.
That was helpful.
Having that education andexperience.
So that's like the tangible,right?
The tangible side.
The intangibles did help a lotin the form of, confidence,
leadership, public speaking.
These things are incrediblyimportant being in CEO.
(06:37):
Leadership probably, Probably atthe top because when you're a
junior officer the Marines doesa good job of training its
officers at, to be leaders,right?
They actually, they have got atemplate for doing this and
they've been doing it for a verylong time.
So when you come out as a youngofficer, you're 21, 22 years
(06:59):
old.
And everyone that you're incharge of is older than you,
more experienced than you, andin large part better than you at
doing whatever function it isthat, that you serve.
This is especially true in sucha highly technical arena where
(07:19):
you are the man in charge, butyou're having to, you're forced
to lead people at a very youngage of 22.
Like I was a platoon commanderand there were 60 people in my
platoon that worked for me at 22years old, for which almost
every single one of them wasolder than me.
And every single one of them wasmore experienced than me,
(07:40):
especially when I first gotthere.
So, over, that, that kind ofexperience does carry into the,
I think into the business world.
Because.
When you come in as a young 30something year old startup CEO
and the business grows, like youget, CRO, CMO, everyone that's.
Usually older than you, moreexperienced than you but doesn't
(08:03):
necessarily know how to pieceeverything together, which is
part of your job.
But the leadership aspect Ithink was helpful.
And now our organization's likenearly 250 people.
So, it's gotten quite large.
But that, that I think from anintangible perspective was
helpful.
Yeah.
Dan Balcauski (08:20):
Yeah, that blend of the intangible and the
tangible, the hard skills andthe soft skills.
Yeah, I mean, it's a, that's aninteresting acceleration of
maturity in that that a lot ofpeople don't have the advantage
to, lead groups that big,especially in the private sector
for quite some time, B to C,chuckling, Dan Balcauski, CEO, B
to C, Richmond Connections, DanBalcauski, CEO, B to C, I do
(08:47):
want to pivot a little bit to,uh scaling and to start the, set
the context for everyone youmentioned Adlumin had gone
through a couple of pivots, Iguess, could you give folks
maybe sort of the 30 secondoverview of what Adlumin is in
its current form, just so wehave a sense of the ground we're
covering.
Robert Johnston (09:05):
Adlumin is a security operations as a service
platform built for the channel.
So we have a.
Channel go to market strategyand that security operations as
a service platform has multiplewidgets that live under that
umbrella.
But what's important is we buildthis Product and these products
and services for our maincustomer, which is the channel
(09:29):
that services their end customerbase.
And so that makes its way intoone, how we do business, but
two, how we build the product aswell.
Dan Balcauski (09:38):
Got it.
And so, and if I'm correct, soyou said it's product and
services.
So, am I understanding it's notsort of a pure play sort of
software.
There actually is a a human sortof component as well that the
folks hire Adlumin for, is thatcorrect?
Robert Johnston (09:52):
That's right.
There's a we run a productcalled Managed Detection and
Response out of our software.
So AdMob has a combination ofsoftware only.
We, Microsoft only solutionslike our, next gen SIEM solution
or XDR software solution.
And then we have managedsecurity products like, like
managed detection response.
Dan Balcauski (10:11):
Got it.
Got it.
Okay.
And so, so we've got, so we havethe pure play sort of, software
space.
And then if folks for example,wanted to extend their
capabilities of their ownoperations personnel, is that
sort of a way to think about it,right,
Robert Johnston (10:26):
That's exactly right.
That's exactly right.
So, essentially what you'reasking, if you buy our managed
detection response service isfor the Adlumin services team to
operate the software on yourbehalf.
The
Dan Balcauski (10:38):
Got it.
Well, so I appreciate thatcontext.
And, I've wanted to make thatdistinction because sometimes
we're talking to folks who haveboth and sometimes it's pure
play product.
And the IT operations world canbe muddled if you're sort of an
outsider looking in and we haveall sorts of folks in different
industries in the audience.
Look, every CEO faces challengessort of scaling their company.
Like, is there, as you've scaledthem?
(11:01):
Is there been a particularchallenge you faced during your
growth that you foundparticularly difficult to
overcome?
A crucible moment that kind ofhas made the company to what it
is today?
Robert Johnston (11:11):
first, the first thing you have to nail is
the product, right?
Product, get, product market fitfind a customer, right?
Hopefully that customer is alarge enough segment that wants
to buy your product.
Okay.
So that's step one, but step twois really.
Nailing Go to Market, and Ithink the crucible moment for
Adlumin was that, was nailing Goto Market.
And to really understand thatand have that is incredibly
(11:34):
important because you won'ttransition to the next level
unless you can nail Go to Marketand you have a viable and
repeatable route to market.
And this is where, manycompanies fail at product market
fit.
Okay that, that's commonknowledge, but the, there are
many companies even after thatnail product market fit, but are
(11:56):
not able to nail go to market.
And they're not able to get overthat hump.
We took a long time to getproduct market fit, to really
find a customer and segment thatwe resonated with.
And then the real cruciblemoment though, was finding a go
to market that they couldactually, that we could build
and that we could scale and thatmade sense for us.
(12:17):
And for us, it ended up being achannel strategy.
Because that's how we could bestserve our, that middle market
segment in a scalable andefficient way.
So that, that is, that was ourcrucible moment.
The minute we nailed, the minutewe nailed that, it was all, it's
all gravy.
Dan Balcauski (12:36):
So, that's fantastic.
I love that example.
If we could zoom in on that timeperiod where, it sounds like you
had a product or service thatpeople, had demonstrated.
Need for willingness to pay for.
But you're struggling sort ofwith this go to market, like
what's going on where you'resort of sitting there being
(12:59):
like.
This is just not it.
We've got to do something else.
Like what was the decisionprocess that led to, okay this
channel strategy for you in thego to market.
Robert Johnston (13:10):
It was.
It was growth and velocity,right?
And so at the time, we werelooking at our growth and
velocity and we were out gettingcustomers.
We were doing like two new dealsa month, five new deals a month.
Like we were getting it done,but we weren't, the velocity
wasn't such that we.
(13:33):
We were really gonna be acompany that could do, 100
million, 200, 500 billion.
Like it was just never gonna getthere because we had yet to nail
like a go to market that wasrepeatable.
That velocity, like we were outthere finding customers one by
one, one by one, right?
And that can work in anenterprise sales model.
But when you married that up tolike the market that we were
(13:54):
serving, which is the middlemarket, It's a very expensive
way to go capture customers on aone to one basis.
And so we kind of recognized asa management team that, look
we've, we have a customer, likewe have a set of customers that
want to buy our product andservices.
And now we need to kind of scalethat thing up into the right.
(14:16):
And get a go to market that,that is machine like that can
grow and get bigger and kind ofhave a compounding effect that
just gets bigger and bigger andbuilds on itself, right?
And that for us was a channelstrategy.
We got in there, startedrecruiting channel partners,
success.
Success created more success andit just kept building larger and
larger.
Dan Balcauski (14:37):
What do you think were your, what enabled that
success in your mind?
Because I asked this becauseI've seen a lot of SaaS
companies try to set up channel.
Go to market and just totallywhiff on it for one reason or
another.
(14:58):
What do you think it was aboutyour approach or was it the
market that like really enabledit, that allowed you guys to
succeed?
Robert Johnston (15:07):
And to succeed in the channel, you want your
business to be as transactionalas possible, right?
And by transactional, it meanseasy to sell for the channel
partner because the partnersthat are sitting in between you
and the customer, they don'twant to spend a lot of time like
educating the end customer.
They just don't have time forthat.
The margins are too thin fortheir business.
(15:28):
And so they needed to sell andmove quickly.
And so there are aspects to ourproduct that enable that
success.
One is we, when we took a lookat our product, we took a zero
configuration model, whichcreated a really fast time to
value, right?
So there were no rules to write.
There were no toggles to switch.
We just we made decisions thatwere in the best security
(15:51):
interests of the customer, andwe auto configured the product
to enforce those configurationstandards.
And then gave them anopportunity to, of course, maybe
roll that back or make slightcustomizations to it.
But what that created was like avery fast time to value for the
channels customer.
And then that created a veryfast convert high conversion
(16:12):
rate, but a fast turnaroundtime, right?
It made the business verytransactional where they kind
of.
Sold the product and then moveon to the next and now to the
next and so on and so forth,right?
And so that became You know keyto being successful in the
channel because It shows thechannel that this is a, selling
your product is something theycan make money doing and make
(16:33):
money quickly, which is all theycare about.
Companies that you know,companies that don't succeed
necessarily in the channel areones that probably have long
integration times.
The products are complicated.
If they don't have productmarket fit, there's not like a
significant amount of pull anddemand from their customers.
(16:54):
If, if they have to spend a lotof time educating the customer
on why they need why they needthe product, that stuff sucks up
time, right?
A channel partner is notinterested in going through
their cycles because they've gotplenty of other things they can
sell that they don't have toeducate the customer on, that
they don't have to sit there andconvince them that they need it.
And so to operate successfullyin the channel, I do think you
(17:17):
need a product that, that youknow, that the end customer
already has demand for, right?
They already know they want it.
It's already on the shoppinglist.
Right?
You just got to be, you just gotto put your product in the right
pricing packaging and show thechannel partner that you can win
and you can win selling yourproduct.
And there's no education thatthey have to do on the backend
(17:38):
to the customer.
Dan Balcauski (17:39):
Interesting.
So, so a couple of things therewas you're tapping into existing
demand.
You're not asking your channelpartner to go create demand on
your behalf.
And then also this quick time tovalue zero configuration where
they're not, the end person, notonly they have demand, but you
can, you could show them thatyou could satisfy that demand in
relatively short amount of timewithout needing any sort of
(18:01):
extended engineering or setuptime to, to actually make that
happen.
You did just mention as wellkind of the pricing and
packaging aspect, like, how doyou think that fits into a good
sort of channel go to market?
Robert Johnston (18:15):
You do.
So the last piece of it, otherthan convincing the channel
partner that by selling Adlumin,they can do it quickly and they
can sell a lot of it.
Right?
The last thing you have to showthem is it'll be profitable to
do so.
Right?
Like the channel has no interestin selling a widget that costs
5.
Their margin on five bucks is,it's a waste of their time,
(18:38):
right?
Even if they sold a lot of it.
And so you've got to, bedelivering it at average
contract values that aremeaningful.
You have to show the partnerthat it can be a profitable
endeavor for them.
And you've got to showcommitment to the channel too.
So Adlumin is a hundred percentchannel.
We don't take any paper direct,which means.
(19:00):
They're never, we're never goingto compete against each other in
the field, right?
So you'll never and channelpartners do hate that.
And it just ends up causingprice erosion, frankly, for
yourself, right?
Because you end up competingwith yourself or multiple people
that they're all selling thesame thing, but they're just
angling.
They end up angling for the bestprice.
Right?
And so we erase channelconflict.
(19:21):
We provide a deal protection fordeal registration.
We have a program that, thatensures the competitiveness and
profitability of the partner ina deal.
Dan Balcauski (19:32):
That's super interesting that you're, so
you're a hundred percentchannel.
So I guess kind of zooming inon, when you're going out this
time period where you're saying,we're doing a couple of deals a
month, maybe five, but thingsaren't really taking off.
We start looking at channel.
Was that.
Was there sort of a phasetransition where you're, I mean,
I imagine you didn't just flip aswitch overnight and go a
(19:55):
hundred percent channel.
How did you make that decisionto say, okay, this is, we're
going whole hog on, on, onchannel a hundred percent?
Robert Johnston (20:03):
Yeah, we started a channel strategy and
we knew we had to commit and todo it, you need people,
processes, and technology,right?
So you got, we got those thingsdown, right?
And then and then it took acouple of quarters And we
realized after a couple ofquarters that, look, this is the
go to market for us.
This is the go to market that'sgoing to be meaningful and it's
going to work for us.
And so, we, we just executed onthat, right?
(20:26):
It's, it took about twoquarters, probably two quarters
to, to realize like, this iswhere we need to place our bets.
And then from that pointforward, it was an easy decision
to just begin.
Placing an increased bet, alarger bet.
Dan Balcauski (20:38):
Interesting.
And no, yeah, cause that channelconflict is a huge problem as
you think about like the, goingback to that pricing and
packaging that you mentioned,were there any things that you
had to change or evolve overtime as you've sort of gotten
evolved this channel program onthat point?
Robert Johnston (20:53):
We've had to change our, partner program,
make, change different littleaspects of it.
We've added things to it that,that are more beneficial for the
partners.
We've added a more robust directacquisition business.
So it's not that we don'tacquire customers directly, we
do.
The difference is what we do iswe take those customers that we
acquire directly and we handthem back to our channel
(21:16):
partners.
We feed our channel deals,right?
We feed our channel leads sothat they can, so that they can
have net new opportunities.
And so we, we've made it morerobust and a better, more
rounded out go to market.
Dan Balcauski (21:31):
Interesting.
I want to pivot a little bit inthe conversation because going
back to something that you weretalking about in the intro when
you were talking about your sortof military background and
leadership was it sounded likeyou had some pretty early
military background?
Good experience in leading largegroups, but even more so leading
groups where there are manyindividuals who are maybe older
(21:55):
or even better at, whatever theywere doing than you were as the
leader, which, as you scale acompany, I imagine becomes a
pretty invaluable skill.
How has that, if at all,translated to how you think
about bringing in your seniorleadership team around you as
you scaled the company.
Robert Johnston (22:13):
Yeah I'm pretty hands on in that I do make it my
business to know all thedifferent little aspects that
are going on inside of thecompany, whether it's mainly you
can just divide it into fourbuckets and I'm pretty deep, as
deep, as I can be in all four ofthose buckets.
First is product.
Of course, I'm very deep intothat, reading the market making
(22:36):
suggestions on what we should donext to build and expand and
grow larger, right?
Finance.
Understanding the financialaspects of this, knowing my way
around, the P& L and the balancesheet and accounting has been
very important.
Sales, I'm very deep inunderstanding our sales and go
to market and all the differentdynamics of that and marketing,
(22:59):
right?
And so it's those.
It's those four buckets and I'min, and do keep myself very
knowledgeable on what's going onin all four of those buckets.
And what that allows me to do isbridge those buckets or other
people that are responsible forthose domains may not understand
how to bridge.
Like if you need to increasegross margins.
(23:22):
You got to reach into productand find out how, right?
If you want to increase salesefficiency, you have to reach
into sales and marketing andfind out how.
And so that's been important asyou really got to know your
business inside and out.
And I, I try my best, I try mybest to do so.
And you have to learn thingslike I went to business school.
I consider that another criticaltraining ground where, well,
(23:45):
it's not like I got an A plus inall the accounting and finance
courses that I took, but I didmy best.
I worked as hard as I could, andI had a fundamental
understanding and a foundation,a foundational understanding on
how to traverse those financialanalysis metrics, KPIs, and
financial docs.
That's been critical in my mindas well.
Dan Balcauski (24:06):
Got it.
So, so you're, it sounds likeyou're staying, or you're
getting pretty deep in, inkeeping abreast of all these,
functional areas as a leader.
I imagine as a founder, yourrole has had to evolve as you've
grown.
Brought in more and moreexperienced leaders.
I guess, how do you ensure that,you're adding value while also
(24:28):
allowing these experiencedleaders to, lead in their areas
of expertise?
Robert Johnston (24:34):
Yeah, you do bring new people in that are
experts in their functionalareas and you take their, you
lean on them for theirexperience.
Like you bring in a chiefmarketing officer on marketing
or a chief revenue officer onrevenue and run sales.
And so you do have to lean onthem.
And you're there to Continue topaint the vision and make sure
(24:54):
the whole band is marching inthe right direction, right?
The whole band is marchingforward and going the right way.
So that becomes your job andyour job is also to, to, sanity
check and pulse check becauseeach one of those individuals
may not be able to make thebridge into finance, into
product, into marketing intosales, right?
(25:15):
You've got to be deep into eachone of those.
So that you can fundamentallyunderstand how you need to make
changes in each one to achievethe outcome that you want to
achieve.
And I do think a founder isuniquely positioned to do that
because they know everythingfrom the beginning, right?
They're deep into product.
And then maybe as you switch toa more go to market focus
(25:39):
company, now you're becomingdeep in go to market.
Dan Balcauski (25:43):
I'm curious, like how do you decide when you're
thinking organizationally aboutwhat problems you want to solve
versus problems that aren'tactually problems, meaning like,
you have a lot of people and alot of those people, they want
to do different things or peopleare complaining about different
things this or that could bedone better and it takes a
(26:04):
certain amount of.
Resolve and clarity of thought,in what you're doing.
Like, no, there's a bunch ofunhappy people about this thing
but I don't care, like, how doyou sort of think about, really
what to focus on when you'redriving organizational change
across the business?
Robert Johnston (26:21):
Yeah.
You do need to delegate andthings begin to kind of happen
at a lower and lower level whichhelps you get good managers and
they take care of their businessand they run their side of the
business.
Being CEO can oftentimes be atough job in that you almost
never hear anything good, right?
Like, why would something, ifthings are going well they of
(26:44):
course reflect in certain ways,but you know, it's not like
anyone's beating down your doorbeing like, Oh, I did this great
today.
I did this great today.
Like it does come up.
What really bubbles up though,is the, is issues, right?
The issues that are too big tosolve at a lower level that
require your attention.
And that's what you end uphearing like all day, right, is
(27:04):
the issues that are coming upThat you need to resolve because
no one else is in a position toresolve them.
So, it happens less and less asthe as the organization gets
bigger.
But I think as the organizationgets bigger, the issues and
complexity also get larger.
And so it can be a tough jobsometimes, a lonely job that
you'll hear oftentimes peoplesay.
(27:26):
It can feel like that, likeyou're on a little island at
moments.
You
Dan Balcauski (27:32):
So yeah, so you've got this situation where
yeah, if a problem was small, itwould've got solved before it
got to your desk.
But you know, you're hearingabout, a bunch of different
challenges.
Do you have ways that you.
North stars or guiding lightsthat you use or decide like,
okay, this is actually a problemwe're solving, or is this is
just, yes, this is a problem,but like, we're not going to
(27:55):
dedicate our attention to it nowbecause we've got these other
priorities.
Like how do you sort of thinkabout making those
prioritizations and trade offs?
Robert Johnston (28:03):
You know a lot of things will come to your desk
or anyone's desk that you justlook at it.
You'd be like, this is outsideof my control.
There's a lot of things thatmaybe issues are created, but
it's not really in your control.
And you do need to learn to justlet those go.
Cause if it's not in yourcontrol, you're wasting time on
it.
For those things that are, thatyou are in control of, it's
(28:28):
often important to be decisive.
There's there, there's a timeand a place to like wait and see
and to get more information andto get more knowledgeable.
But usually it's best to justexecute an act quickly in in, in
my experience, we got a famoussaying in in the Marines that
(28:48):
like a 70 percent solution rightnow is better than a hundred
percent solution too late.
And oftentimes, a 70 percentsolution is something you can
just ram through as opposed totrying to wait around for
perfect.
Never let perfection be theenemy of progress.
Dan Balcauski (29:06):
I love that.
So, so being decisive and notwaiting for the 100 percent
solution, 70 percent solution isusually sufficient.
And I agree.
Right.
That you're constantly in thatposition where you're having to
make decision under certaintyand, you're never going to have
a hundred percent.
You're never going to have 100percent information or the
hundred percent solution isoften has a lot of waste
incorporated into it.
(29:28):
Have there been, as you thinkabout sort of, scaling in your
leadership team, has there been,roles that maybe you were sort
of unsure that you needed, butyou ended up bringing them
earlier that expected into theorganization and, had an
outsized impact?
Robert Johnston (29:48):
There are there are definitely roles.
On, the leadership team that Ican remember bringing in some, I
feel that I brought in too late.
Like we could have benefitedmore by bringing those roles in
actually earlier.
And so there's some places wewere late to the
Dan Balcauski (30:04):
Well, where?
Yeah.
Was there a specific example inthat comes to mind of like,
yeah, we should have broughtsomeone in this type of role in
earlier?
Robert Johnston (30:10):
Yeah.
Specifically product management,we should have brought product
management in earlier.
And in, in my opinion, and wetried, but product management is
a really tough job.
And I got a lot of respect forpeople that work in product
management just because it'slike a game of influence, right.
Where you've got, engineeringteams that are, they're building
(30:32):
stuff that don't report to aproduct manager, right.
But product managers are reallydriving the train.
And so, before things get toobig, it's good to bring in and
build.
Mature product managementorganization.
We eventually did that andthat's great, but I wish we
would have done that a littleearlier in hindsight.
Marketing is another one.
(30:53):
We ran marketing on our own fora really long time.
And I wish we had brought in andinvested.
In a more professional, maturemarketing organization or
earlier, I think that would also
Dan Balcauski (31:05):
What were, if Yeah.
If you look back at either ofthose situations, were there
kind of telltale like symptomsor red flags that you think
other, maybe there's other SaaSleaders would sort of be able to
sort of notice in anorganization that sort of, it
seems like clear in hindsightnow, but like what, what was
going on where you're like, Oh,Hey, yeah, like these were, I
(31:26):
should have noticed then that,that this sort of, this was
happening and that's why Ineeded to start bringing those
more professional organizationalstructures.
Robert Johnston (31:35):
yeah, when the organization was small, right,
we could you had a lot of peoplefocused on product, myself
included.
Right.
And then as the organization gotbigger those people that were
kind of covering that productmanagement hole.
We're pulled farther and fartheraway from the product.
And then that left for a periodof time, like a vacuum or a gap.
Right.
And then you go and build aproduct management organization,
(31:57):
but it's in its infancy.
Right.
And so it doesn't quite have thematurity and know how
everything's supposed to work.
Right.
And so there was a time when youknow when there was a vacuum
there.
But, and what happens is it'slike.
Engineering teams might becomelike, Lord of the Flies, right?
Like, they don't really havelike a direction or they
necessarily they're getting ahigh level vision, but they
(32:17):
don't have kind of the nextlevel of taking a high level
vision into tactical execution.
And then, making sure thatthey're driving outcomes.
And so that's think one aspect
Dan Balcauski (32:28):
As soon as you've seen the conch shell in the
engineering standups, it's timeto time to get involved with a
product manager.
Robert Johnston (32:34):
recognize pretty quickly, and it's not
just a product manager, it'slike building a product
management organization, right,a function, an actual function.
And that, then that becomes veryimportant.
Dan Balcauski (32:45):
Robert, I could speak to you all day and there's
a bunch of other questions thatwe didn't get to that I wanted
to ask.
I do want to close out with acouple of rapid fire questions
if that's okay with you.
Are you ready?
Robert Johnston (32:55):
Yeah.
Ready.
Dan Balcauski (32:56):
Awesome.
Well, Robert, how do you definesuccess?
Robert Johnston (33:01):
How do I define success?
It's supposed to be rapid fire,but that is a tough question.
The goalposts always moves.
I don't think you can everdefine success.
Like you reach one thing thatyou thought you would mark your
key to success.
And then once you get there, thegoalpost moves forward.
I think ultimately, success isnever achieved.
It's, the goalpost is alwaysmoving and you're always
(33:23):
redefining goals for yourself.
Dan Balcauski (33:24):
I really actually love that answer.
When you think about all thespectacular people that you've
had a chance to work with andlearn from over your career, is
there anyone who just pops tomind who's had a
disproportionate effect on theway you think about building
companies?
Robert Johnston (33:38):
Yeah.
I've leaned on a lot of theearly investors we had, like the
angels that That invested inAdlumin in the very early days.
A lot of those folks were reallyreally mature businessmen.
They had started multiplecompanies.
They had done this before.
They had seen this all before.
And still today, I'll call themon the phone with a problem.
(34:01):
And I'll just ask them, like,what should I do?
How should I handle it?
And to this day they'll still,they take my phone call, right.
And they answer my question.
And usually when they answer myquestion, what's nice to hear is
like, Oh at this company that,that we started back so and so
great business, we sold it towhoever.
And we had a similar problem andthis is what we did, right.
(34:22):
And so they've been experts thatI can just lean on over and
over.
Dan Balcauski (34:27):
so, so your early angels and have been a good
support network for you.
If you think about like one ofthose calls that you've made to
them, is there been, is thereone that stands out in your mind
in terms of a piece of advicethat sort of is crystallized in
your brain of how to look atsituations you faced as a CEO?
Robert Johnston (34:42):
The human component because there's a
human component to, to, to doingbusiness and working with people
and making sure that everyone'saligned and everyone's motivated
and excited about doing the joband being here.
And so there's a lot with thehuman component that's
important.
That is, is.
Is the hardest component, Ithink, actually, of running a
(35:03):
business is in fact the humancomponent.
Dan Balcauski (35:06):
well, look, being a founder, CEO can be incredibly
taxing emotionally, physically,spiritually.
Are there any habits that you'vecultivated to help you stay on
the top of your game?
Robert Johnston (35:19):
Yeah I I try and keep a good workout routine.
That's, something I've alwaysdone for my Marine Corps days
to, to even when I was incollege I played division one
sports in college.
And so that, that helps medecompress, like I like to go
for runs.
Spend time with my family.
It is hard to break awayoftentimes when you're the
founder of the CEO, like it's aseven day a week, 24 hour a day
(35:40):
job, it feels like, that youlearn to enjoy.
And so, it's to find momentsthat, that you can take a, that
you can take a break, I thinkare important and find a hobby
for me.
It's like working out and stufflike that.
Dan Balcauski (35:52):
Keep physically active.
Love it.
If I gave you a billboard andyou could put any advice on
there for other B2B SaaS CEOstrying to scale their companies,
what would it say?
First
Robert Johnston (36:01):
It's a it would say someone told me this as
well.
First time entrepreneurs talkproduct, second time
entrepreneurs talk distribution.
And there's a reason for that isbecause you could think about
product, but really think aboutdistribution.
First,
Dan Balcauski (36:16):
time entrepreneurs think product,
second time entrepreneurs thinkdistribution.
Fantastic.
Robert, this has been amazing.
If listeners want to connectwith you, learn more about
Adlumin, how can they do that?
Robert Johnston (36:27):
just go to Adlumin.
com, reach out.
We've got a fancy little chatbot on there.
And yeah, thanks for theopportunity.
Dan Balcauski (36:34):
I absolutely appreciate that.
And we'll put those links in thenotes for our listeners.
Everyone that wraps up thisepisode of SaaS Scaling Secrets.
Thank you for Robert to sharinghis journey insights and
valuable tips for our listeners.
If you found this conversationas enlightening as I did,
remember to subscribe so youdon't miss out on future
episodes.
Welcome to SaaS Scaling Secrets, the podcast
that brings you the insidestories from the leaders of the
best scale up B2B SaaScompanies.
I'm your host, Dan Balcauski,founder of Product Tranquility.
Today, I'm excited to speak withRobert Johnston.
Robert is the CEO of Adlumin, acybersecurity company he co
founded in 2016.
With a background in militarycybersecurity and counter
espionage, Robert has leveragedhis unique expertise to build
(00:40):
Adlumin into a leading providerof security operations and
threat intelligence solutionsfor mid market organizations.
Before joining the privatesector, Robert served as an
officer in the United StatesMarine Corps.
Let's dive in.
Welcome Robert to SaaS ScalingSecrets.
Robert Johnston (00:53):
Thank you.
Thank you for the kindintroduction.
Dan Balcauski (00:56):
Well, I gave folks a little bit of a taste of
your background, but could youplease just briefly introduce
yourself?
Tell us a little about yourjourney in the SaaS world.
Robert Johnston (01:02):
Yeah, absolutely.
I I got started in cybersecurityin college.
So I went from Floridaoriginally.
I went to the Naval Academy formy undergrad, and that's when I
first got into the or wasexposed, I would say, to the,
to, to the sector.
It was a sector that I always, Icame to really love while I was
(01:23):
in college.
And then I went to the MarineCorps, I served eight years in
the Marine Corps and Based offof my experience in college, I
wanted to shape a career doingsomething similar in
intelligence or in cybersecuritywhile I was in, in the Marine
Corps.
And so I did, I had theopportunity to shape my kind of
career while I was in theMarines.
(01:46):
I worked at The Network SecurityCenter for the Marine Corps.
I worked at the NationalSecurity Agency.
I worked for, got to do somework for various intelligence
community, organizations.
And so that's where I reallykind of really cut my teeth.
And then I left the Marine Corpsafter eight years, I went to a
firm called CrowdStrike for alittle while.
It was a CrowdStrike.
(02:07):
For eight, nine months, and thenleft and founded Adlumin.
My Adlumin story begins at avery small incubator actually
here in the DC, Maryland andVirginia area called called Mach
37, where I left CrowdStrike andI went to incubator was a
promise of, come here for threemonths, we'll give you a little
(02:29):
bit of money, not a lot, 50K orwhatever.
And come here, we'll give you alittle bit of money and you get
your business up, up and off theground and see if we can't,
incubate it with the hopes thatback then it was funded by the
state of Virginia with the hopesthat you would bring jobs to,
to, to the area, right?
The DC, Maryland, Virginia area,which we did do.
(02:49):
We did, we brought a lot ofjobs.
So, that was my, SaaS startupjourney, right?
The company has taken many formsover the years.
It's changed, several times inthe startup world, they might
call this pivoting.
Right.
But really they're justmodifications to the business
that that you're doing to kindof better serve the market.
(03:10):
That's really all it is.
Dan Balcauski (03:12):
Well, I appreciate you giving us that
bit of an arc in your backgroundfascinating that, your love of
this space started all the wayback in university.
Maybe it's one of those moments,or maybe it's some other moment
in your life, but I think we allhave these transformational
moments, sometimes I refer to itas a superhero transformation
moment where one, one day you'rejust normal Peter Parker, high
school student you get bit by aradioactive spider, you wake up
(03:35):
and the next day you're SpiderMan.
You look back over your life.
What's been your superherotransformation moment?
Robert Johnston (03:41):
Yeah.
Starting a SaaS business.
It came at the right time, Ithink, in my life as well.
When I first started Adlumin, Iwasn't married, I didn't have
any kids.
Not that you can't do a startupwhen you have those things, but
your perspective definitelychanges.
Your ability to sacrifice alsochanges.
(04:02):
And in the beginning, in theearly years of Adlumin, we had
to sacrifice a lot, right?
We had to sacrifice a lot.
And so that was easier just withthat point in time in my life.
Also, I think I was youngenough.
I was in my maybe early thirtieswhen I started Adlumin.
was probably a little naive onhow hard it was actually going
(04:23):
to be.
From the outside looking in,it's all, glitz and glamour.
But when you're in there doingthe work, especially in the
early days, like things are muchdifferent.
The reality is much different.
Like it is a lot of hard workand no matter how much success
you find, that actually, thathard work never goes away.
(04:44):
It always remains.
And so that's another commonmisconception is, Oh, it gets
easier.
You're at some point you'reliving in an ivory tower.
This is not true.
Like the hard work andsacrifice.
Kind of never stop.
It does get a little easiercertainly that Than the first
year and a half.
But it just, things get morecomplex as things get larger.
(05:04):
So, that was that that's my takeon that.
Dan Balcauski (05:08):
I certainly resonate with that story.
I've told people more than onetime that regarding the naivete
of starting your own thing.
I tell people if I go back andtell myself five yerequired.
Maybe I would have turned aroundand done something else.
I'mired.
I'm glad you know that at thesame time, I'm glad I did it.
I wouldn't trade it, but youknow, the the expectations
(05:32):
versus reality could be quiteshocking and there are
differences.
You do have an interestingbackground, coming from the
military, like, has there beenanything that you've gathered
your skill or experience or sortof mindset from your military
experience you think has beenhelpful and proved valuable in
the, being a tech startupleader?
Robert Johnston (05:54):
So there's the tangibles in the intangibles,
in, in the industry that I'm in.
I did have direct, I did gain alot of direct domain experience
from, the military because I wasdoing the job of cyber security
while I was in, in the Marines,right?
So, that, that was fortunate.
Like I got a lot of training, alot of education.
(06:14):
I was doing it.
I was doing it.
No kidding for my job.
Right?
And so.
That was helpful.
Having that education andexperience.
So that's like the tangible,right?
The tangible side.
The intangibles did help a lotin the form of, confidence,
leadership, public speaking.
These things are incrediblyimportant being in CEO.
(06:37):
Leadership probably, Probably atthe top because when you're a
junior officer the Marines doesa good job of training its
officers at, to be leaders,right?
They actually, they have got atemplate for doing this and
they've been doing it for a verylong time.
So when you come out as a youngofficer, you're 21, 22 years
(06:59):
old.
And everyone that you're incharge of is older than you,
more experienced than you, andin large part better than you at
doing whatever function it isthat, that you serve.
This is especially true in sucha highly technical arena where
(07:19):
you are the man in charge, butyou're having to, you're forced
to lead people at a very youngage of 22.
Like I was a platoon commanderand there were 60 people in my
platoon that worked for me at 22years old, for which almost
every single one of them wasolder than me.
And every single one of them wasmore experienced than me,
(07:40):
especially when I first gotthere.
So, over, that, that kind ofexperience does carry into the,
I think into the business world.
Because.
When you come in as a young 30something year old startup CEO
and the business grows, like youget, CRO, CMO, everyone that's.
Usually older than you, moreexperienced than you but doesn't
(08:03):
necessarily know how to pieceeverything together, which is
part of your job.
But the leadership aspect Ithink was helpful.
And now our organization's likenearly 250 people.
So, it's gotten quite large.
But that, that I think from anintangible perspective was
helpful.
Yeah.
Dan Balcauski (08:20):
Yeah, that blend of the intangible and the
tangible, the hard skills andthe soft skills.
Yeah, I mean, it's a, that's aninteresting acceleration of
maturity in that that a lot ofpeople don't have the advantage
to, lead groups that big,especially in the private sector
for quite some time, B to C,chuckling, Dan Balcauski, CEO, B
to C, Richmond Connections, DanBalcauski, CEO, B to C, I do
(08:47):
want to pivot a little bit to,uh scaling and to start the, set
the context for everyone youmentioned Adlumin had gone
through a couple of pivots, Iguess, could you give folks
maybe sort of the 30 secondoverview of what Adlumin is in
its current form, just so wehave a sense of the ground we're
covering.
Robert Johnston (09:05):
Adlumin is a security operations as a service
platform built for the channel.
So we have a.
Channel go to market strategyand that security operations as
a service platform has multiplewidgets that live under that
umbrella.
But what's important is we buildthis Product and these products
and services for our maincustomer, which is the channel
(09:29):
that services their end customerbase.
And so that makes its way intoone, how we do business, but
two, how we build the product aswell.
Dan Balcauski (09:38):
Got it.
And so, and if I'm correct, soyou said it's product and
services.
So, am I understanding it's notsort of a pure play sort of
software.
There actually is a a human sortof component as well that the
folks hire Adlumin for, is thatcorrect?
Robert Johnston (09:52):
That's right.
There's a we run a productcalled Managed Detection and
Response out of our software.
So AdMob has a combination ofsoftware only.
We, Microsoft only solutionslike our, next gen SIEM solution
or XDR software solution.
And then we have managedsecurity products like, like
managed detection response.
Dan Balcauski (10:11):
Got it.
Got it.
Okay.
And so, so we've got, so we havethe pure play sort of, software
space.
And then if folks for example,wanted to extend their
capabilities of their ownoperations personnel, is that
sort of a way to think about it,right,
Robert Johnston (10:26):
That's exactly right.
That's exactly right.
So, essentially what you'reasking, if you buy our managed
detection response service isfor the Adlumin services team to
operate the software on yourbehalf.
The
Dan Balcauski (10:38):
Got it.
Well, so I appreciate thatcontext.
And, I've wanted to make thatdistinction because sometimes
we're talking to folks who haveboth and sometimes it's pure
play product.
And the IT operations world canbe muddled if you're sort of an
outsider looking in and we haveall sorts of folks in different
industries in the audience.
Look, every CEO faces challengessort of scaling their company.
Like, is there, as you've scaledthem?
(11:01):
Is there been a particularchallenge you faced during your
growth that you foundparticularly difficult to
overcome?
A crucible moment that kind ofhas made the company to what it
is today?
Robert Johnston (11:11):
first, the first thing you have to nail is
the product, right?
Product, get, product market fitfind a customer, right?
Hopefully that customer is alarge enough segment that wants
to buy your product.
Okay.
So that's step one, but step twois really.
Nailing Go to Market, and Ithink the crucible moment for
Adlumin was that, was nailing Goto Market.
And to really understand thatand have that is incredibly
(11:34):
important because you won'ttransition to the next level
unless you can nail Go to Marketand you have a viable and
repeatable route to market.
And this is where, manycompanies fail at product market
fit.
Okay that, that's commonknowledge, but the, there are
many companies even after thatnail product market fit, but are
(11:56):
not able to nail go to market.
And they're not able to get overthat hump.
We took a long time to getproduct market fit, to really
find a customer and segment thatwe resonated with.
And then the real cruciblemoment though, was finding a go
to market that they couldactually, that we could build
and that we could scale and thatmade sense for us.
(12:17):
And for us, it ended up being achannel strategy.
Because that's how we could bestserve our, that middle market
segment in a scalable andefficient way.
So that, that is, that was ourcrucible moment.
The minute we nailed, the minutewe nailed that, it was all, it's
all gravy.
Dan Balcauski (12:36):
So, that's fantastic.
I love that example.
If we could zoom in on that timeperiod where, it sounds like you
had a product or service thatpeople, had demonstrated.
Need for willingness to pay for.
But you're struggling sort ofwith this go to market, like
what's going on where you'resort of sitting there being
(12:59):
like.
This is just not it.
We've got to do something else.
Like what was the decisionprocess that led to, okay this
channel strategy for you in thego to market.
Robert Johnston (13:10):
It was.
It was growth and velocity,right?
And so at the time, we werelooking at our growth and
velocity and we were out gettingcustomers.
We were doing like two new dealsa month, five new deals a month.
Like we were getting it done,but we weren't, the velocity
wasn't such that we.
(13:33):
We were really gonna be acompany that could do, 100
million, 200, 500 billion.
Like it was just never gonna getthere because we had yet to nail
like a go to market that wasrepeatable.
That velocity, like we were outthere finding customers one by
one, one by one, right?
And that can work in anenterprise sales model.
But when you married that up tolike the market that we were
(13:54):
serving, which is the middlemarket, It's a very expensive
way to go capture customers on aone to one basis.
And so we kind of recognized asa management team that, look
we've, we have a customer, likewe have a set of customers that
want to buy our product andservices.
And now we need to kind of scalethat thing up into the right.
(14:16):
And get a go to market that,that is machine like that can
grow and get bigger and kind ofhave a compounding effect that
just gets bigger and bigger andbuilds on itself, right?
And that for us was a channelstrategy.
We got in there, startedrecruiting channel partners,
success.
Success created more success andit just kept building larger and
larger.
Dan Balcauski (14:37):
What do you think were your, what enabled that
success in your mind?
Because I asked this becauseI've seen a lot of SaaS
companies try to set up channel.
Go to market and just totallywhiff on it for one reason or
another.
(14:58):
What do you think it was aboutyour approach or was it the
market that like really enabledit, that allowed you guys to
succeed?
Robert Johnston (15:07):
And to succeed in the channel, you want your
business to be as transactionalas possible, right?
And by transactional, it meanseasy to sell for the channel
partner because the partnersthat are sitting in between you
and the customer, they don'twant to spend a lot of time like
educating the end customer.
They just don't have time forthat.
The margins are too thin fortheir business.
(15:28):
And so they needed to sell andmove quickly.
And so there are aspects to ourproduct that enable that
success.
One is we, when we took a lookat our product, we took a zero
configuration model, whichcreated a really fast time to
value, right?
So there were no rules to write.
There were no toggles to switch.
We just we made decisions thatwere in the best security
(15:51):
interests of the customer, andwe auto configured the product
to enforce those configurationstandards.
And then gave them anopportunity to, of course, maybe
roll that back or make slightcustomizations to it.
But what that created was like avery fast time to value for the
channels customer.
And then that created a veryfast convert high conversion
(16:12):
rate, but a fast turnaroundtime, right?
It made the business verytransactional where they kind
of.
Sold the product and then moveon to the next and now to the
next and so on and so forth,right?
And so that became You know keyto being successful in the
channel because It shows thechannel that this is a, selling
your product is something theycan make money doing and make
(16:33):
money quickly, which is all theycare about.
Companies that you know,companies that don't succeed
necessarily in the channel areones that probably have long
integration times.
The products are complicated.
If they don't have productmarket fit, there's not like a
significant amount of pull anddemand from their customers.
(16:54):
If, if they have to spend a lotof time educating the customer
on why they need why they needthe product, that stuff sucks up
time, right?
A channel partner is notinterested in going through
their cycles because they've gotplenty of other things they can
sell that they don't have toeducate the customer on, that
they don't have to sit there andconvince them that they need it.
And so to operate successfullyin the channel, I do think you
(17:17):
need a product that, that youknow, that the end customer
already has demand for, right?
They already know they want it.
It's already on the shoppinglist.
Right?
You just got to be, you just gotto put your product in the right
pricing packaging and show thechannel partner that you can win
and you can win selling yourproduct.
And there's no education thatthey have to do on the backend
(17:38):
to the customer.
Dan Balcauski (17:39):
Interesting.
So, so a couple of things therewas you're tapping into existing
demand.
You're not asking your channelpartner to go create demand on
your behalf.
And then also this quick time tovalue zero configuration where
they're not, the end person, notonly they have demand, but you
can, you could show them thatyou could satisfy that demand in
relatively short amount of timewithout needing any sort of
(18:01):
extended engineering or setuptime to, to actually make that
happen.
You did just mention as wellkind of the pricing and
packaging aspect, like, how doyou think that fits into a good
sort of channel go to market?
Robert Johnston (18:15):
You do.
So the last piece of it, otherthan convincing the channel
partner that by selling Adlumin,they can do it quickly and they
can sell a lot of it.
Right?
The last thing you have to showthem is it'll be profitable to
do so.
Right?
Like the channel has no interestin selling a widget that costs
5.
Their margin on five bucks is,it's a waste of their time,
(18:38):
right?
Even if they sold a lot of it.
And so you've got to, bedelivering it at average
contract values that aremeaningful.
You have to show the partnerthat it can be a profitable
endeavor for them.
And you've got to showcommitment to the channel too.
So Adlumin is a hundred percentchannel.
We don't take any paper direct,which means.
(19:00):
They're never, we're never goingto compete against each other in
the field, right?
So you'll never and channelpartners do hate that.
And it just ends up causingprice erosion, frankly, for
yourself, right?
Because you end up competingwith yourself or multiple people
that they're all selling thesame thing, but they're just
angling.
They end up angling for the bestprice.
Right?
And so we erase channelconflict.
(19:21):
We provide a deal protection fordeal registration.
We have a program that, thatensures the competitiveness and
profitability of the partner ina deal.
Dan Balcauski (19:32):
That's super interesting that you're, so
you're a hundred percentchannel.
So I guess kind of zooming inon, when you're going out this
time period where you're saying,we're doing a couple of deals a
month, maybe five, but thingsaren't really taking off.
We start looking at channel.
Was that.
Was there sort of a phasetransition where you're, I mean,
I imagine you didn't just flip aswitch overnight and go a
(19:55):
hundred percent channel.
How did you make that decisionto say, okay, this is, we're
going whole hog on, on, onchannel a hundred percent?
Robert Johnston (20:03):
Yeah, we started a channel strategy and
we knew we had to commit and todo it, you need people,
processes, and technology,right?
So you got, we got those thingsdown, right?
And then and then it took acouple of quarters And we
realized after a couple ofquarters that, look, this is the
go to market for us.
This is the go to market that'sgoing to be meaningful and it's
going to work for us.
And so, we, we just executed onthat, right?
(20:26):
It's, it took about twoquarters, probably two quarters
to, to realize like, this iswhere we need to place our bets.
And then from that pointforward, it was an easy decision
to just begin.
Placing an increased bet, alarger bet.
Dan Balcauski (20:38):
Interesting.
And no, yeah, cause that channelconflict is a huge problem as
you think about like the, goingback to that pricing and
packaging that you mentioned,were there any things that you
had to change or evolve overtime as you've sort of gotten
evolved this channel program onthat point?
Robert Johnston (20:53):
We've had to change our, partner program,
make, change different littleaspects of it.
We've added things to it that,that are more beneficial for the
partners.
We've added a more robust directacquisition business.
So it's not that we don'tacquire customers directly, we
do.
The difference is what we do iswe take those customers that we
acquire directly and we handthem back to our channel
(21:16):
partners.
We feed our channel deals,right?
We feed our channel leads sothat they can, so that they can
have net new opportunities.
And so we, we've made it morerobust and a better, more
rounded out go to market.
Dan Balcauski (21:31):
Interesting.
I want to pivot a little bit inthe conversation because going
back to something that you weretalking about in the intro when
you were talking about your sortof military background and
leadership was it sounded likeyou had some pretty early
military background?
Good experience in leading largegroups, but even more so leading
groups where there are manyindividuals who are maybe older
(21:55):
or even better at, whatever theywere doing than you were as the
leader, which, as you scale acompany, I imagine becomes a
pretty invaluable skill.
How has that, if at all,translated to how you think
about bringing in your seniorleadership team around you as
you scaled the company.
Robert Johnston (22:13):
Yeah I'm pretty hands on in that I do make it my
business to know all thedifferent little aspects that
are going on inside of thecompany, whether it's mainly you
can just divide it into fourbuckets and I'm pretty deep, as
deep, as I can be in all four ofthose buckets.
First is product.
Of course, I'm very deep intothat, reading the market making
(22:36):
suggestions on what we should donext to build and expand and
grow larger, right?
Finance.
Understanding the financialaspects of this, knowing my way
around, the P& L and the balancesheet and accounting has been
very important.
Sales, I'm very deep inunderstanding our sales and go
to market and all the differentdynamics of that and marketing,
(22:59):
right?
And so it's those.
It's those four buckets and I'min, and do keep myself very
knowledgeable on what's going onin all four of those buckets.
And what that allows me to do isbridge those buckets or other
people that are responsible forthose domains may not understand
how to bridge.
Like if you need to increasegross margins.
(23:22):
You got to reach into productand find out how, right?
If you want to increase salesefficiency, you have to reach
into sales and marketing andfind out how.
And so that's been important asyou really got to know your
business inside and out.
And I, I try my best, I try mybest to do so.
And you have to learn thingslike I went to business school.
I consider that another criticaltraining ground where, well,
(23:45):
it's not like I got an A plus inall the accounting and finance
courses that I took, but I didmy best.
I worked as hard as I could, andI had a fundamental
understanding and a foundation,a foundational understanding on
how to traverse those financialanalysis metrics, KPIs, and
financial docs.
That's been critical in my mindas well.
Dan Balcauski (24:06):
Got it.
So, so you're, it sounds likeyou're staying, or you're
getting pretty deep in, inkeeping abreast of all these,
functional areas as a leader.
I imagine as a founder, yourrole has had to evolve as you've
grown.
Brought in more and moreexperienced leaders.
I guess, how do you ensure that,you're adding value while also
(24:28):
allowing these experiencedleaders to, lead in their areas
of expertise?
Robert Johnston (24:34):
Yeah, you do bring new people in that are
experts in their functionalareas and you take their, you
lean on them for theirexperience.
Like you bring in a chiefmarketing officer on marketing
or a chief revenue officer onrevenue and run sales.
And so you do have to lean onthem.
And you're there to Continue topaint the vision and make sure
(24:54):
the whole band is marching inthe right direction, right?
The whole band is marchingforward and going the right way.
So that becomes your job andyour job is also to, to, sanity
check and pulse check becauseeach one of those individuals
may not be able to make thebridge into finance, into
product, into marketing intosales, right?
(25:15):
You've got to be deep into eachone of those.
So that you can fundamentallyunderstand how you need to make
changes in each one to achievethe outcome that you want to
achieve.
And I do think a founder isuniquely positioned to do that
because they know everythingfrom the beginning, right?
They're deep into product.
And then maybe as you switch toa more go to market focus
(25:39):
company, now you're becomingdeep in go to market.
Dan Balcauski (25:43):
I'm curious, like how do you decide when you're
thinking organizationally aboutwhat problems you want to solve
versus problems that aren'tactually problems, meaning like,
you have a lot of people and alot of those people, they want
to do different things or peopleare complaining about different
things this or that could bedone better and it takes a
(26:04):
certain amount of.
Resolve and clarity of thought,in what you're doing.
Like, no, there's a bunch ofunhappy people about this thing
but I don't care, like, how doyou sort of think about, really
what to focus on when you'redriving organizational change
across the business?
Robert Johnston (26:21):
Yeah.
You do need to delegate andthings begin to kind of happen
at a lower and lower level whichhelps you get good managers and
they take care of their businessand they run their side of the
business.
Being CEO can oftentimes be atough job in that you almost
never hear anything good, right?
Like, why would something, ifthings are going well they of
(26:44):
course reflect in certain ways,but you know, it's not like
anyone's beating down your doorbeing like, Oh, I did this great
today.
I did this great today.
Like it does come up.
What really bubbles up though,is the, is issues, right?
The issues that are too big tosolve at a lower level that
require your attention.
And that's what you end uphearing like all day, right, is
(27:04):
the issues that are coming upThat you need to resolve because
no one else is in a position toresolve them.
So, it happens less and less asthe as the organization gets
bigger.
But I think as the organizationgets bigger, the issues and
complexity also get larger.
And so it can be a tough jobsometimes, a lonely job that
you'll hear oftentimes peoplesay.
(27:26):
It can feel like that, likeyou're on a little island at
moments.
You
Dan Balcauski (27:32):
So yeah, so you've got this situation where
yeah, if a problem was small, itwould've got solved before it
got to your desk.
But you know, you're hearingabout, a bunch of different
challenges.
Do you have ways that you.
North stars or guiding lightsthat you use or decide like,
okay, this is actually a problemwe're solving, or is this is
just, yes, this is a problem,but like, we're not going to
(27:55):
dedicate our attention to it nowbecause we've got these other
priorities.
Like how do you sort of thinkabout making those
prioritizations and trade offs?
Robert Johnston (28:03):
You know a lot of things will come to your desk
or anyone's desk that you justlook at it.
You'd be like, this is outsideof my control.
There's a lot of things thatmaybe issues are created, but
it's not really in your control.
And you do need to learn to justlet those go.
Cause if it's not in yourcontrol, you're wasting time on
it.
For those things that are, thatyou are in control of, it's
(28:28):
often important to be decisive.
There's there, there's a timeand a place to like wait and see
and to get more information andto get more knowledgeable.
But usually it's best to justexecute an act quickly in in, in
my experience, we got a famoussaying in in the Marines that
(28:48):
like a 70 percent solution rightnow is better than a hundred
percent solution too late.
And oftentimes, a 70 percentsolution is something you can
just ram through as opposed totrying to wait around for
perfect.
Never let perfection be theenemy of progress.
Dan Balcauski (29:06):
I love that.
So, so being decisive and notwaiting for the 100 percent
solution, 70 percent solution isusually sufficient.
And I agree.
Right.
That you're constantly in thatposition where you're having to
make decision under certaintyand, you're never going to have
a hundred percent.
You're never going to have 100percent information or the
hundred percent solution isoften has a lot of waste
incorporated into it.
(29:28):
Have there been, as you thinkabout sort of, scaling in your
leadership team, has there been,roles that maybe you were sort
of unsure that you needed, butyou ended up bringing them
earlier that expected into theorganization and, had an
outsized impact?
Robert Johnston (29:48):
There are there are definitely roles.
On, the leadership team that Ican remember bringing in some, I
feel that I brought in too late.
Like we could have benefitedmore by bringing those roles in
actually earlier.
And so there's some places wewere late to the
Dan Balcauski (30:04):
Well, where?
Yeah.
Was there a specific example inthat comes to mind of like,
yeah, we should have broughtsomeone in this type of role in
earlier?
Robert Johnston (30:10):
Yeah.
Specifically product management,we should have brought product
management in earlier.
And in, in my opinion, and wetried, but product management is
a really tough job.
And I got a lot of respect forpeople that work in product
management just because it'slike a game of influence, right.
Where you've got, engineeringteams that are, they're building
(30:32):
stuff that don't report to aproduct manager, right.
But product managers are reallydriving the train.
And so, before things get toobig, it's good to bring in and
build.
Mature product managementorganization.
We eventually did that andthat's great, but I wish we
would have done that a littleearlier in hindsight.
Marketing is another one.
(30:53):
We ran marketing on our own fora really long time.
And I wish we had brought in andinvested.
In a more professional, maturemarketing organization or
earlier, I think that would also
Dan Balcauski (31:05):
What were, if Yeah.
If you look back at either ofthose situations, were there
kind of telltale like symptomsor red flags that you think
other, maybe there's other SaaSleaders would sort of be able to
sort of notice in anorganization that sort of, it
seems like clear in hindsightnow, but like what, what was
going on where you're like, Oh,Hey, yeah, like these were, I
(31:26):
should have noticed then that,that this sort of, this was
happening and that's why Ineeded to start bringing those
more professional organizationalstructures.
Robert Johnston (31:35):
yeah, when the organization was small, right,
we could you had a lot of peoplefocused on product, myself
included.
Right.
And then as the organization gotbigger those people that were
kind of covering that productmanagement hole.
We're pulled farther and fartheraway from the product.
And then that left for a periodof time, like a vacuum or a gap.
Right.
And then you go and build aproduct management organization,
(31:57):
but it's in its infancy.
Right.
And so it doesn't quite have thematurity and know how
everything's supposed to work.
Right.
And so there was a time when youknow when there was a vacuum
there.
But, and what happens is it'slike.
Engineering teams might becomelike, Lord of the Flies, right?
Like, they don't really havelike a direction or they
necessarily they're getting ahigh level vision, but they
(32:17):
don't have kind of the nextlevel of taking a high level
vision into tactical execution.
And then, making sure thatthey're driving outcomes.
And so that's think one aspect
Dan Balcauski (32:28):
As soon as you've seen the conch shell in the
engineering standups, it's timeto time to get involved with a
product manager.
Robert Johnston (32:34):
recognize pretty quickly, and it's not
just a product manager, it'slike building a product
management organization, right,a function, an actual function.
And that, then that becomes veryimportant.
Dan Balcauski (32:45):
Robert, I could speak to you all day and there's
a bunch of other questions thatwe didn't get to that I wanted
to ask.
I do want to close out with acouple of rapid fire questions
if that's okay with you.
Are you ready?
Robert Johnston (32:55):
Yeah.
Ready.
Dan Balcauski (32:56):
Awesome.
Well, Robert, how do you definesuccess?
Robert Johnston (33:01):
How do I define success?
It's supposed to be rapid fire,but that is a tough question.
The goalposts always moves.
I don't think you can everdefine success.
Like you reach one thing thatyou thought you would mark your
key to success.
And then once you get there, thegoalpost moves forward.
I think ultimately, success isnever achieved.
It's, the goalpost is alwaysmoving and you're always
(33:23):
redefining goals for yourself.
Dan Balcauski (33:24):
I really actually love that answer.
When you think about all thespectacular people that you've
had a chance to work with andlearn from over your career, is
there anyone who just pops tomind who's had a
disproportionate effect on theway you think about building
companies?
Robert Johnston (33:38):
Yeah.
I've leaned on a lot of theearly investors we had, like the
angels that That invested inAdlumin in the very early days.
A lot of those folks were reallyreally mature businessmen.
They had started multiplecompanies.
They had done this before.
They had seen this all before.
And still today, I'll call themon the phone with a problem.
(34:01):
And I'll just ask them, like,what should I do?
How should I handle it?
And to this day they'll still,they take my phone call, right.
And they answer my question.
And usually when they answer myquestion, what's nice to hear is
like, Oh at this company that,that we started back so and so
great business, we sold it towhoever.
And we had a similar problem andthis is what we did, right.
(34:22):
And so they've been experts thatI can just lean on over and
over.
Dan Balcauski (34:27):
so, so your early angels and have been a good
support network for you.
If you think about like one ofthose calls that you've made to
them, is there been, is thereone that stands out in your mind
in terms of a piece of advicethat sort of is crystallized in
your brain of how to look atsituations you faced as a CEO?
Robert Johnston (34:42):
The human component because there's a
human component to, to, to doingbusiness and working with people
and making sure that everyone'saligned and everyone's motivated
and excited about doing the joband being here.
And so there's a lot with thehuman component that's
important.
That is, is.
Is the hardest component, Ithink, actually, of running a
(35:03):
business is in fact the humancomponent.
Dan Balcauski (35:06):
well, look, being a founder, CEO can be incredibly
taxing emotionally, physically,spiritually.
Are there any habits that you'vecultivated to help you stay on
the top of your game?
Robert Johnston (35:19):
Yeah I I try and keep a good workout routine.
That's, something I've alwaysdone for my Marine Corps days
to, to even when I was incollege I played division one
sports in college.
And so that, that helps medecompress, like I like to go
for runs.
Spend time with my family.
It is hard to break awayoftentimes when you're the
founder of the CEO, like it's aseven day a week, 24 hour a day
(35:40):
job, it feels like, that youlearn to enjoy.
And so, it's to find momentsthat, that you can take a, that
you can take a break, I thinkare important and find a hobby
for me.
It's like working out and stufflike that.
Dan Balcauski (35:52):
Keep physically active.
Love it.
If I gave you a billboard andyou could put any advice on
there for other B2B SaaS CEOstrying to scale their companies,
what would it say?
First
Robert Johnston (36:01):
It's a it would say someone told me this as
well.
First time entrepreneurs talkproduct, second time
entrepreneurs talk distribution.
And there's a reason for that isbecause you could think about
product, but really think aboutdistribution.
First,
Dan Balcauski (36:16):
time entrepreneurs think product,
second time entrepreneurs thinkdistribution.
Fantastic.
Robert, this has been amazing.
If listeners want to connectwith you, learn more about
Adlumin, how can they do that?
Robert Johnston (36:27):
just go to Adlumin.
com, reach out.
We've got a fancy little chatbot on there.
And yeah, thanks for theopportunity.
Dan Balcauski (36:34):
I absolutely appreciate that.
And we'll put those links in thenotes for our listeners.
Everyone that wraps up thisepisode of SaaS Scaling Secrets.
Thank you for Robert to sharinghis journey insights and
valuable tips for our listeners.
If you found this conversationas enlightening as I did,
remember to subscribe so youdon't miss out on future
episodes.
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