Speaker 1Cassie Young is a partner at Primary Ventures, where they just raised a $625 million fund built on a contrarian playbook.
Speaker 2The $625 million is huge for seed, which we think is very unique. The conventional wisdom at seed is to stay small. We fundamentally disagree with that.
Speaker 1In today's episode, Cassie warns us how the current hyper growth around AI is masking a massive underlying problem that's coming for the market, the gross retention apocalypse.
Speaker 2I still very much live in fear of this. It might not be next month, it might not be next year, but it's ultimately going to come.
Speaker 1We also dive into why the classic competitive advantages are evaporating overnight and why relying on a highly networked founder is no longer a guarantee of survival.
Speaker 2The zero-cac CEO who's not supplemented by amazing technologists, it's just not enough. Like it may get you in the door, but it's not going to ensure that you keep the share that you get out of the gate.
Speaker 1So what is the formula for successful companies today? Cassie shares the one question her firm always asks before writing a check.
Speaker 2Has this great line where he talks about when we're at the finish line with a deal, that's a fundamental question that we're asking ourselves.
Speaker 1Welcome to Topline. Hey everybody, it's Sam Jacobs. I'm the CEO of Pavilion. You're listening to Topline. I'm joined by my good friends and co-hosts, AJ Bruno, the CEO of Quotapath, Asad Zaman, the CEO of Sales Talent Agency. We've got friend of the pod and friend of Topline. That would be F-O-T-T, friend of Topline. Just F-O-T, F-O-T. Our favorite FOT, Cassie Young, partner at Primary Ventures, who's here to talk about the $625 million raise for their new fund that they just announced. She's here to talk about gross retention. She's our favorite operator turned investor in the entire world. Cassie, welcome to Topline. We're excited that you're here.
Speaker 2Well, thank you for the very generous introduction, Sam. And yes, long time listener, first time caller, but appreciate you guys having me on today. And I think this is going to be a really fun conversation. So thanks again for including me.
Speaker 1This is the first time you've been on the show?
Speaker 3That's right. That's all Sam's fault, by the way.
Speaker 1That's crazy. And I like
Speaker 2to think I'm ubiquitous elsewhere in the Topline content and Pavilion broader community. You're in market,
Speaker 1that is for sure. Well, shame on us and shame on me, but welcome to the show. Asad and AJ, how are the both of you?
Speaker 3I spent the whole entire weekend clod coding, like literally, like every, I woke up at 6am on Saturday and turned on clod code. What is with clod code? I'm plugged into the matrix right now.
Speaker 4Like this was Lemkin was talking about this as well. Like it made him want to wake up earlier and just get on it.
Speaker 3It's like, so when I was a kid, I got Legend of Zelda Ocarina of Time for Christmas. And I spent like, the next week spending every waking moment. And I think clod code has the same like addictive gaming type of thing. Gaming, it's like a video game piece to it. And it's just, it's just anything you can dream up in your head, you can put to paper. And it's just, it's just a fun experience.
Speaker 2Well, it's funny you say that AJ, because my husband was away at a bachelor party this weekend. And he said to me, what are you going to do without me here? Now, my first answer is March Madness, because I'm a huge basketball fan. I'm like, clod. I was like, I was going to get deep in the clod this weekend. It's the same thing. It was like Friday night, I'm going to go to bed. Yeah. So you had, you had more free time.
Speaker 3I just was all, yeah. It was a beautiful day in Philadelphia. So I played basketball with my daughter. Her tournament was canceled. But yeah, I was, I was deep into it. But yes, March Madness was over the weekend too.
Speaker 2We did have some people at primary build their brackets with clod. Now they are not at the top of the leaderboard, but reading some of their prompts was entertainment in and of itself.
Speaker 1I had Virginia beating Duke in the national championship. And that sadly is not a thing that will happen in 2026.
Speaker 3So fun little fact about, so Pablo Dominguez puts together a big, big, big, big bracket. He has like 300 people in it and you can put four brackets into it. I only do one and I'm like in the middle of the pack, whatever. One of my colleagues, Graham Collins puts together, I think four. He's currently leading this bracket, which is a lot of money. There's a caveat though. There's a catch. If you finish last place, you forfeit all of your dollars in a different bracket. And so right now, Graham is in first place and second to last place right now.
Speaker 4How many people do you think listening know what brackets are? Cause I'm like, I wonder what they're talking about. I'm really curious. You guys are so like aligned. Is this a thing?
Speaker 2Everyone knows. We'll get, we'll get you involved next year.
Speaker 1All right, Austin, kick us off. Let's talk to Cassie.
Speaker 4Cassie, I think we should start with the fundraise. 625 million, which is a massive fund. Well, not the, like they're these billion, billion dollar funds, like multi-billion dollar funds as well, but 625 is massive. And in this, the thing that's really interesting is you have a go-to-market thesis and go-to-markets been an interesting place to build for the last couple of years, AJ will tell you. You know, we definitely SaaS, you can't think SaaS without thinking Salesforce, right? They kind of brought us into the SaaS era, but after Salesforce, the number of go-to-market tech companies that would be considered big winners, that list is fairly small from that previous era. What's, what, why are you excited about that category now?
Speaker 2What's different? The 625 million is huge for seed, right? Which we think is very unique. Like a lot of these big multi-billion dollar platforms are with the multi-state sort of aircraft carrier firms. And so the conventional wisdom at seed is to stay small. We can come back to that later, but let's, let's drill into the go-to-market stuff first. And if we want to talk more about the fundraise, we can come back to that.
Speaker 3When you say small, just so the audience has caught in, it's like 100, 200 million. Is that what you're referencing?
Speaker 2Yeah, in general. I mean, and the general reason why people like to see these funds stay smaller is academically speaking, the bigger the funds, the worse the returns, right? And that's what you'll hear from people who object against that. And if you actually fact check that against the data, for the most part, that is correct. But if you peel back the layers of the onion around why that actually happens, usually one of two things are at fault. You raise more capital, which means that every partner now has to deploy more capital, right? So they're doing more deals, right? Instead of doing two to three deals a year, maybe they're doing like six deals a year and things just get a little bit messy. The second thing that can go a little sideways is you start to get strategy creep as a firm, right? So we are classical seed investment in seed investors. We do seed and pre-seed. We follow on in our existing portfolio companies, but our entry point is seed and pre-seed. Oftentimes when funds raise really large vehicles, they'll say, well, now opportunistically maybe we're going to do some series A's, right? And they start to get scope creep on what that was. And so our pitch to our LPs was, we talk a lot about what we call the atomic unit of a check writer, right? And our belief is that we can scale our fund size by scaling the number of check writers we have at the firm such that any one person isn't doing more deals per fund. Now, the reality of today's market is that the quantum of capital required to win a seed deal now vis-a-vis where it was 18 months ago is 20 to 25% higher. And I'm not even talking about these crazy mega seed rounds, right? I'm just talking about sort of your down the lane competitive deals. So our point of conviction is whether that's through growing our own bench, like in fund five, my colleague Tobias was a principal at primary and now is a partner exclusively leading cybersecurity deals. We can grow talent that way. We can bring talent from the outside, which we did in fund four with Emily Mann. But the idea is that any one partner isn't being stretched in unconventional ways. And the belief is that we invest in our resources and platforming in a way that can make a check writer. More successful at primary than they would be somewhere else. And that's kind of the pitch, right, that we give to our LPs around how we continue to grow. And our ambitions are to keep doing that, right, to defy the logic that you can't have a scaled seed fund. That's the vision for what we want to build.
Speaker 1This feels like it's a it's almost an acid problem. If you want more check writers, then you need a framework for evaluating who can write good checks and who can be good. Do you feel like that's a trainable skill? Do you feel like that's something you you put them through the primary boot camp, or you have enough data points? And that's, and I guess related to that, do you feel like there's a are we seeing a proportional increase in the number of great companies? Or is it that your check writers need to be able to win deals from other more from a more competitive set? Because the number of great companies isn't increasing materially, perhaps like tell me, Fred Wilson always said the number of great companies is pretty much fixed. So all of the competition is fixed. So what's your take? So in no particular order response
Speaker 2to some of those questions. So on the talent side, I would say that our belief is there's something intrinsic, right in all of the check writers that are successful at the firm, like primaries, not the reason they're a great check writer. But what we enable them to do is to take what they're already super capable of and make them that much better, because we give them we call it unreasonable resourcing to help their portfolio. Right, we've got 55 people on staff, two thirds of them are not investors, right, they're there to help the existing portfolio companies. But the way I sort of describe what the fund looks like in terms of check writers is it almost looks like a mini fund of funds, because each check writer has a square specialization lane where they spend time. So I may spend time in the go to market category, but my colleague spends time in infrastructure, and another one spends time in healthcare. And we really provide a high degree of autonomy within each one of those lanes to say to the check writer, we trust you, you're here for a reason, like we want you to go and drive a multiple on your book. But there's a lot of different ways for how you can go and do that. You might do that by doing one deal that's a little more expensive than we would like, but you're crazy highly convicted in it. You might do that by doing a bunch of incubations, which is a huge part of our strategy and gives us a higher ownership clip. So we give people flexibility, but then our portfolio team, which we call Impact, really comes in and just helps supercharge what any of those portfolio companies can do on the other side. And what we always say is we back founders who are, they're visionaries, they're category creators, like they're going to go create the unicorn companies, but there's only so many hours in a day. So if we can help them accelerate that escape velocity, that serves everybody well. And so those resources help not only support portfolio companies, but going to your second question, Sam, they help us win deals, right? Because increasingly we're pulling those resources into companies before the term sheet is even signed to give them a taste of what they would get with working with primary on the other side. Now, to your point, yeah, I mean, we talk a lot about the seed. Unicorn creation ratio, right? So historically two and a half to 3% of all deals that have been institutionally back at seed will ultimately become unicorn companies. And so it's actually a little bit of a TAM assessment here, right around like how much room do you have to hunt? And then you have to go find those great deals. Now, to your point, there tends to be a lot of consensus, right? That happens around some of these great deals for us. That means how do we get to people earlier and earlier, right? So I said, we do seed increasingly. We care a lot about pre-seed incubation is really interesting to us, but our belief is some of the best founders out there are still sitting in their current operating roles and we have to get on their radar six months before they even think about quitting, right? So that you're in there and that you build this relationship that's going to give you some degree of edge when you're going and competing invariably against what will be a really compelling set of competitors.
Speaker 4You know how if you were to look back, you can find some Mac saying every year there's X amount of companies that are going to be competing against these companies that are born. And this translates in Y amount of winners of different sorts in a certain amount of time, right? Kind of the Fred Wilson thing. But in this moment in time, you have this new thing, which is like a form of intelligence, like software that is intelligence, right? And if you look at when cloud was just coming up, the cloud companies now, the hyperscalers do more revenue than the entire revenue of the technology ecosystem when those companies were born. Oh, great. So the markets change, right? And so how do you think about the future? Like, do you think it'll just incrementally keep becoming a larger and larger ecosystem and companies will become incrementally larger in terms of outcome sizes and success ratios and things like that? Or do you think some of this stuff might dramatically change? Like maybe the largest companies will be dramatically larger than the biggest companies we see today. Like, where do you think the big differences are going to be?
Speaker 2So first, I'll agree with a couple of things that you said. I mean, we actually just had our annual meeting for our LPs a few weeks ago. And one of the things we shared there was this perspective that flavors of this have happened before. So you mentioned cloud computing. We talked about open source. We talked about some of the high-level language changes with the Javas and Pythons of the world, right? And just creating more and more market opportunity. So I think we are very much bulls on that reality today. And everyone's talking about the labor pools, right? That you can now go after. You know, the white-collar labor pool is $6 trillion. That's 20 times what's been spent on enterprise software and IT. So even if the 20x isn't realized, the magnitude of what will be realized, even if it exists somewhere between those two ends of the spectrum, is pretty material. And that has us incredibly excited because we think about a world where, you know, legal tech tends to be a topic du jour. So let's pick on that one for a moment. You end up in a world where people who didn't have lawyers are going to have lawyers, right? So you just open up these use cases. And I know, Sam, in past Top Line posts, you've talked about like the Jevons Paradox idea here, et cetera. I think we are huge subscribers to that being the reality where it's just going to unlock really, really exciting new use cases. Now, of course, we are also wrestling with like the SaaS pocket lips top of the hour, right? And really who's going to be threatened and who's not. And we can certainly talk about that. But I think in general, our belief is this is going to be really, really big. And if you think about it, software is actually relatively small in the grand scheme of things. I mean, we had pulled some numbers for the annual meeting at that time a couple of weeks ago. It was eight and a half percent of the S&P, 1% of GDP, right? So you just have so much room to grow outside of that that I think people lose sight of when they're just in sort of the SaaS bubble week in and week out.
Speaker 4I imagine that in all of this with LPs, I mean, there's a lot of big LPs and there's a lot of like downside case development that they do, right? Like what's the worst thing that could happen? What's the bear case here? When there's so much money being raised across this ecosystem, there seems to be this like convergence of belief that this is going to be huge, there will be massive winners. This is going to be all the things that I think the four of us believe in as well. Like we're all bulls here. But it's a lot of alignment amongst the market that this is what's going to happen. There is a world in which it doesn't play out, right? And so is that, what is that scenario? Like what does that scenario look like to an LP? Like what risk have they decided? We think this is the risk side of this, the downside scenario, and we're willing to live with it. Is it that intelligence goes into the market? We all use it, it makes our lives better. It just doesn't have the ability to have economic benefit that we all think it's going to have. It's more like Excel than it is, you know, what we think it's going to be. Where Excel didn't make life much easier, but didn't get the pricing
Speaker 2power. So I'm going to take a step back on that. And I think there's actually like a first principles question that we're glossing over a little bit with LPs, where at the end of the day, the sort of value creation that is coming from the asset class comes back to the founders. But I think particularly in this environment, and we can drill further into this, is like you are making a bet on the people and that they are going to figure it out, right? Because there are businesses, right, that were born even 12 to 18 months ago that fundamentally look completely different today. Nevermind, I feel like intercoms, the talk of, you know, the month, right, in terms of them very deliberately cannibalizing the software revenue to go all in on through, which I think is an amazing story. I think intercoms probably going to be the exception, not the rule, but it's absolutely amazing to see what they've done.
Speaker 3And by the way, their story's not written yet. So like they're talking about it. There's a long journey. It'll be fine.
Speaker 4If you keep writing them nine figure checks, they'll be fine.
Speaker 3I would eat figure checks. I also, Cassidy, if you didn't hear it, I told, I told Asad and Sam that we were writing an eight figure check to intercom that they're. They bill it so much.
Speaker 4I just wrote an eight figure check. That's amazing. Excuse me.
Speaker 3And I had four people say their favorite all time top line moment that reached out to me because there was a pause.
Speaker 150% of intercom revenue today. It's from quarter path.
Speaker 2Amazing. Amazing. Amazing. But I think like at the end of the day, LPs, when they're picking managers, right, they're, they want to assume that they're getting access to the best deals, right? So I don't want to gloss over that point, right? Particularly like at Seed, we think a lot about that. It's like the alpha that you're going to have with finding the best founders and the best opportunity. At Seed, it's a 10 year journey, right? So you just don't know what you don't know as you go and embark on that. There's a lot of chatter right now about this like king making dynamic. That is happening in Silicon Valley, right? Where you have the upstarts that have early commercial traction. Everybody's preempting the subsequent rounds, right? And everyone's just kind of shoving more money in their direction. And it becomes this question of like, well, does that give them such a first mover advantage on the customer base and the reinforcement learning that it just boxes out other opportunities? I think, and this is a very category specific answer. I'm optimistic that because of your access to the labor pools and the total budget envelopes, et cetera, that you're going to be able to do a lot of things. And I think that's going to have markets where it's not winner takes all dynamics anymore. And I'll give you an example. We're in the process of closing an investment in an AI native CRM company, right? There are a handful of players that are kind of emerging in that set. It's a knife fight. Let's be honest, right? They're all going after like the Y Combinator, Seed to Series B companies, you know, with it. But our belief is if you really do AI native CRM correctly, which means it is full stack, everything that touches the customer total time, you're going to be able to do a lot of things. And I think that's going to be a big opportunity. And I think that's all the way through to CS and you're eating into the labor pools and the other software spend, like that's a big opportunity, right? It might not just need to be this world where it's only Salesforce and
Speaker 4HubSpot. Like tell us your investment theory, like, because it's such an interesting, like everybody hates the old school CRMs, but they kind of like get the job done and it's Salesforce is massive and it's got all these like built-in advantages around integrations and the ecosystem, all of this, we all know that. And then there's this idea of like in the world of AI, like what if somebody took a blank piece of paper and said, let's create a CRM using all of this new stuff that we've got, that's purpose built for the moment. Let's meet the moment with a blank piece of paper. And you can imagine this beautiful thing gets built. We still haven't seen that in market yet, right? Like we see like early signs of these new players, but they aren't, they aren't there yet. Obviously we're all early days. How do you pick in a market where there's two, three, four of these companies, they all kind of look similar. And then what's your thesis on this in the future, because obviously for one of them to win, you have to carve out more. market share from Salesforce? What does that look like?
Speaker 2I think for us at the end of the day, product wins, right? And so we've been talking about this concept of the JDCE, the jaw-dropping customer experience for a while, such that this is part of-
Speaker 3Cassie, by the way, because we saw each other in Mexico, we were talking about this at Hovering Gold. I use that in my memos all the time now. I love it. I love it. Yeah, the jaw-dropping customer experience.
Speaker 2I'm glad you guys used it. I think it is really powerful for operators, investors, and everywhere in between where it's the jaw-dropping customer experience. It's not even just the killer app. It's like the whole product experience that the customer has in terms of how they're treated, right, from onboarding to support. But the killer app is really important. And I would say in the CRM category, the product, the best product is going to win, right? Because people have such frustration, right, around what the historical bit looks like. So the challenge with AI-native CRM, I would say, is in general, we make- That's in go-to-market. There's one of like two strategies that the company is building against. They're doing like a classical wedge play where they've got a very, very big platform vision, but there's a clear wedge that they're taking down. And we have to believe that they're going to have the right to win in adjacent categories and win wallet share. And then there's like the compound startup approach. AI-native CRM, like you kind of have to go at it from the compound startup approach if you're really going to take share. Now, there are other companies that are doing like sales coaching, right? And then they're saying we're going to build an invisible CRM on the back of that. That may happen, right? We will see. I think that's just a harder path, is my personal conviction, to navigate to get there. And so for us, in any compound startup environment, irrespective of CRM or something else, there's a few things we're looking for. One is we actually lean in intensely at seed and do, what do your design and, you know, design partners look like, right? How are you managing those? How are you learning? What is your pace? And then what is just the velocity of the engineering roadmap, right? Because you have to be able to show that you're learning from the customers, moving quickly, and launching things that have quite a bit of breadth and the appropriate depth to do it. And so for this particular company, you know, the founders are technologists by background. It's a set of serial entrepreneurs. And we really got excited around their product vision. And we talked with customers. What we heard was, hey, like we gave these guys feedback of it's not enough that we have the top of funnel information. Like we need this information about our customers in there today. And they were able to build the boil the ocean approach to customer success. But they figured out the one or two use cases that are hair on fire. And how do you bring those into the product? And so those are some of the things that we're looking for. Again, a lot of it comes back to the founding team for us in the early days of building. And my partner, Ben, has this great line that I think about frequently, where he talks about, you know, would you bet against this person? And at the end of the day, like when we're at the finish line with a deal, that's a fundamental question that we're and the JDCE also, AJ, works into our memos and, you know, what that ultimately is going to look like. So let me pause there. I think that's like on the CRM side, you know, how we've thought about it. What I would tell you in terms of like the Salesforce replacements is, listen, it's hard, right, when you look at these scaled companies that have all of the interoperable workflows built on the back of their existing CRM, which is why I think you see a lot of these AI native CRMs going with really early stage startups. And the best part of that, right, is that they can grow up with them over time. And that's the go-to-market strategy. You have other companies, right, that I think could kind of wind up in the AI native CRM worlds who are taking different approaches, right? So we've got several portfolio companies who are customers of attention.com, right? I think they're doing a great job at a different part of the market, right, of saying, hey, we're going to replicate the CRM. We're going to help enable you guys to go and do that. And I'll be very curious to see where that play goes as well. But I think what's going to be mission critical for these businesses that are planting a flag and saying, hey, we're going to replicate the CRM, we're going to help enable you guys to go and do AI native CRM, is they have to figure out how to go upmarket quickly. And when I was doing diligence on this category, and I spent a lot of time debating, do I want to make a bet here, yes or no, what I heard was like, all of the upstarts are so native that they haven't nailed this mid-market to upmarket yet. And so the got to believe is that someone's going to figure out how to do it. And so I think that's where these companies are going to have to place their attention, right, is to go and do the unscalable things to make it happen.
Speaker 1I've got a great suggestion for how to move upmarket. They should use this company Delve. And with Delve, you can get instant.
Speaker 2Sam, too soon.
Speaker 4Too soon. AJ, you are the upmarket customer.
Speaker 3This is super interesting as I listen to Cassie, because there's two things, specifically with CRM, and I've been talking about this for a little while as we think about it. We talked about it with Kyle last week's episode. The CRM has two real big boats, data and distribution. And no upstart is going to be able to do that. Yeah, I think that's a great point. And I think that's a great point. Last year, we saw all the Matthew McConaughey commercials. That is what is actually going to be monetized in the future world. And the distribution aspect of it for these startups, that's also the challenge. That's the opportunity as I see it. And we're moving from the SMB to mid-market. Because it's taken us, honestly, three years to move from SMB, where 70% was of our revenue. Now today, 70% is in the mid-market. And I don't know how AI really accelerates that.
Speaker 4What would you need to see, AJ? Like, let's say I am founder of said AI CRM company, and I'm not on your dorm. Like, you're using, what do you use, HubSpot, Salesforce? Salesforce. My good grief, AJ, you want to be an AI-native company, you're on Salesforce, like, look at my stuff. It's cool. Trust me, let's do a demo. And you're like, great, I'm in. What do you need to see that for you to be like, oh, yeah, I'm going to move? This is the problem.
Speaker 3I don't use, I don't log into Salesforce at all. I get all of the data. I use MCP connectors. How do you know it's real?
Speaker 4Like, how do you know the data is good, then?
Speaker 3I trust, I have a trusty CRO.
Speaker 4That's my guy.
Speaker 3That's the thing that, and Cassie, I'm curious on it, is like, I don't need an AI-native CRM. I just need the database and everything else plugs into it. And I, as a CEO, get what I need. We have momentum. We have dust. We have all of these things that are plugging in and getting the data from it that way.
Speaker 2I think it comes back to, fundamentally, what do we mean when we say CRM? Because I think the definition of CRM is completely changing. Historically, I'd actually joke for a while, it's hilarious to me that they call it customer relationship management, because if you actually look at how most CEOs are using it, it's before they're a customer, right? So it's more like the PRM, right, of what happens up until that point, and then a little bit through onboarding. And then, yes, some people who are fully embedded in Salesforce and Service Cloud and all that stuff may be more fully embedded. To me, where the opportunity is, and this comes back to your question of why do you or don't you need it, is it becomes sort of this end-to-end map for everything that touches the customer in some compelling way. And I think there are certainly use cases where you can do the DIY bit. And I feel like the DIY bit has been a huge part of the SaaSpocalypse bit. Fundamentally, I tend to lean out from that a little bit at the platform level, because I do think at the end of the day, buyers like having a throat to choke, right? There's security, there's governance, particularly the more and more stuff that you put in it. But to your point, I think it's a good thing. To your point, I think where the exciting opportunity lives in AI-native CRM is half the companies you just rattled off, you don't need anymore, because you have this end-to-end platform that's doing the work that they may do. So I think where the opportunity is, and this has actually been a really challenging adjustment for me as an investor, is in these full platform plays versus things that even look like partial platform plays now feel more like features. And I'll give you this example. I met this company a couple of weeks ago where, candidly, eight months ago, I probably would have done this deal. I love these founders. I love the problem statement with where they were building. I always say one of my best signals is just the market feedback, where if I reach out to six to 10 great leaders, how quickly do they get back to me? And their willingness to take a demo sort of tells us the nature of the hair on fire level of the problem. I was like seven for seven on people taking demos. And as the feedback came back in, I'm like, this is an example where they're going to buy it for year one, and they will go build this because it's such a smaller part of an overall solution. AI native CRM won't be that exciting unless, do you know what I mean, it's able to go and do this complete end-to-end play. And that's just what we haven't, I think, seen materialized yet, but it has me very excited to see what that will ultimately look like.
Speaker 1It's really interesting because it was sort of where my question was going. You said eight months ago, I might've written the check. Today, I'm not going to. And you also wrote about the coming gross retention apocalypse. You're perhaps the most on go-to-market of the last 20 years written by you. Your bar is low. It's Jeff Bezos' shareholder's letters.
Speaker 2We got to get Sam some more hobbies.
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Speaker 4Do you know why? Because I like the name. I have eaten Granola in my life that I enjoy the fact that there's a company named that. I'll do whatever they ask.
Speaker 3Sam, what percentage of my management team do you think uses Granola? I think 100%. Well, it's actually 65%. And here's the thing, and this is true, we are having a Granola pitch by two of the executives that use it of why Granola needs to be our internal tool for the entire management team. That's on Friday. That's a true story.
Speaker 1If you're listening, and I'm going to be specific, Ryan Burke, Jackie Leahy, Charlie Moss. Is it Jackie Robinson? Jackie Robinson is active on. Yeah. Mary Asandre in Montreal, Jessica Asher in San Francisco, Kyle Norton, hopefully. Please go to granola.ai forward slash top line. It's free, but they need to see that top line has influence. Granola.ai forward slash top line and use the code top line for three months or Granola for free. If you're an active listener in our Slack community so that we can continue to bring your top line. Thank you, Granola. And thank you, top line. Hi, everybody. This episode of top line is brought to you by Pavilion. Pavilion. That is the company that I run. The leaders who rise fastest today aren't just great operators. They understand the business. They know how value is created and they negotiate like executives. At Pavilion, our education curriculum is built for exactly that kind of career. Learn the language of the P&L with our new P&L fluency course, which I taught today. So you can read a balance sheet, model unit economics, and challenge a forecast with confidence. Master the art and science of executive compensation and negotiation taught by leaders who have sat on both sides of the table and know how real offers get structured. And join a community where you don't just take courses. You apply what you learn with peers who are building companies, leading teams, and shaping the future of go-to-market. So listen, if you're listening right now, you're listening right now. You're in your car. You're doing something. You're like, why don't I skip past this? But something is making you hesitate. Maybe he'll say something interesting. Maybe he'll say something that will get him fired. Maybe he will say something that will get him canceled. But you're listening. That's the point. And what I would share with you is, listen, if you're in go-to-market, you need to invest in Pavilion. You really do. This world is changing too quickly for you to navigate this, to navigate on your own. And I appreciate that you might have, you know, your WhatsApp group chat with like your former boss, but like, that's not enough. That's not enough. You need to be in a community with other go-to-market leaders. You need to lean in. You're not going to work at wherever you're working forever. You need to invest in yourself. Do it. Stop being, just, you need to change your mind. It's not an expense. It's an investment. Invest in your future. Pavilion is where you grow next. Email me if you have any questions. Sam at jointpavilion.com. Thanks for listening. My question is, are you seeing that play out? Because I feel there are companies, and I think it's a really interesting time because there are companies that even a year ago might've been touted as the fastest growing companies. And these are companies maybe that we're also claiming massive revenue, trajectories and like super, and you know, they're going to go from one to 50 this year. And I just, but those companies, and I'm thinking of one in particular where, where I think that company, I'm like, that really feels actually like that is one that is like now very present in Gmail. It's very present in every email interface. It feels like it was a little early. And I'm just wondering, what are you seeing in the market? Maybe from the portfolio and come, are you seeing this evolution? Are you seeing the gross retention, apocalypse? Are you seeing, you know, the prints of Q1 and what they're saying about, about AI adoption?
Speaker 2Yeah. So I'll answer kind of like macro and then like micro with some specific examples. So macro, when I wrote that piece, I was hoping I would have hard data to back it up. So I was like, who can I call? That's going to have the hard data on this. So I called Kyle Poyer who told me I don't have hard data on it yet, but this is on my mind. And I'm, you know, with a few other folks, I'm going to come back with something. And he, he has since published a piece. I think it was closer to the end. He and I actually went on the Gainsight podcast together to talk a little bit about this and his data validated my hypothesis, which is that the AI native businesses had lower gross retention than the legacy SaaS counterparts. If you will, his data set focused on companies that were earlier in their journeys. And I mean, in terms of an ARR perspective, et cetera. So it was interesting to see that data. I think it'll be very interesting to see how it plays out over time, because if I were a betting woman, I suspect that for companies where it happens, it'll be a reckoning in year one or two. And then the good companies will, they'll wise up about it. Do you know what I mean? And they'll say, okay, we have to get better at this. We have to improve it. And so if you look at it on a cohorted basis, you'll probably see it improve if the companies are doing that correctly. I drive all of our portfolio company founders crazy with that story. So I'm on the soapbox all the time of like, is it ARR? Is it ERR? What's going on? And so I think they're, they're very eyes wide open to it. What we've tried to help them think about is knowing that it's going to take you a year to get a renewal in an enterprise environment. Like what are the other leading indicators that you can look to? And so one of the things that we talk about is just the time to expansion. So whether that's time to commercial expansion or time to use case expansion, you know, when I wrote that article, I talked about this like coming renaissance of the customer success function, which I still very much stand by. I do think people are thinking more and more about that reality. And actually Amanda from One Mind is a great example where she, she had this whole thing she wrote on LinkedIn a couple of months ago, where she said, when she started she was obsessed with revenue and she would talk about revenue over and over and over again. And with One Mind, she's obsessed with customer count, right? And like that customer, how do you make them happy, right? How do you grow them? And I think that's an important, you know, like a mentality shift as people are leaning into it. But I do worry about it, Sam, still. And I also think that buyers still don't know how to buy, right? So I've talked with a few enterprise buyers to say, I had this hypothesis that has not proven true, where I thought, you know, coming into 2026, everyone had just been experimenting, where the individual contributors, the managers could just budget or expense whatever they wanted to experiment. And my thought was, as we came into 2026, there was going to be a reckoning with the CIO who would come in and say, we're not going to have this tool sprawl. We're really going to consolidate under a handful of vendors. And that was going to be like a crazy clearinghouse for gross retention. I do still think that's going to happen. It hasn't happened as quickly as I would have thought, because a few of the larger enterprises that I've spoken with, they've said, listen, we're just so hungry for our employees. To be using AI, that that's like not on our minds yet. And that's not a blanket statement, but I've been surprised as I've had that conversation. So I still very much live in fear of this. I think it's maybe, you know, it may take a little bit longer to see it. And I think I even said in that article, like it might not be next month, it might not be next year, but it's ultimately going to come. What I could not have predicted when I wrote that in the fall was if you look at a lot of the logic behind the SaaSpocalypse proponents, right? Fundamentally, they're saying, you know, the reason they don't believe the SaaS valuations is because they don't know how to wrangle terminal value anymore. And I'm like, that actually is the gross retention problem in a slightly different, you know what I mean, interpretation of really, can we count on this stuff in perpetuity? So that I didn't see coming from a mile away. I was thinking about it more from, you know, these startups and what is it going to mean for the ecosystem? And now I think it's really interesting to think about at scale.
Speaker 3The other point around that, Cassie, is just that what Amanda said around customer count, I think is the other side of that, which is expansion. There are terminal value of expansion versus terminal value of like the GRR aspect and seeing that play out a little bit.
Speaker 4It is possible that with some of these startups, as they move through the first few years of existence, they might have really fast revenue acceleration. And then over time, you know, in year two, year three, they become a little bit sharper about their true ICP. And they're like, this is what we really need to be doing. And so they might, they might have a gross retention problem, but they might have an RR that's fine as a result. And so you might not see it the same way, which is people are going to report the good number and kind of hide the bad number, right? But there might be a good reason for it, which is we went wide. We did what OpenAI in a way is doing, right? We went wide, we ran about experiments, and we're now narrowing our focus right now. The other thing that I'm noticing, I had this really interesting conversation with a lot of people, and I think it's really interesting. And I think it's really interesting to see how the engineering product and design team has collapsed into one. And he's like, the way I envision my company right now is, and they had, I think, about 30 million in RR. He's like, I see this as I have the product team that is lean, you have people that are doing all of those three things, it's built into one unit. And this team has to work very closely with go to market, where they have to be hand in hand. And the reason the thesis is that, you know, we're not going to be able to There are no product advantages that are long lasting anymore. I'll build something cool, my competitor will build it tomorrow, right? So if everyone can catch up in minutes and days, to your new thing, then a lot of the game is building an organization that can stay one step ahead. And one step ahead is about understanding the market, which your go to market team is in market. So they're learning, they're listening, they're getting signals. And I need to make it so that this team is feeding my product team, my product team is leaner. And I need to make it so and Mina and can quickly build and ship. And that's how we stay one step ahead of the competition. It's a little bit of a different sort of mindset that I'm noticing now, which is like comfort with the idea that the whole game is just to be one step ahead.
Speaker 2So much gold in what you just said there, maybe to kind of break it into the ICP and then just kind of staying ahead in the product side. So I completely agree with you on the ICP side. I think it's not uncommon, but I think we were actually talking about this in Mexico a couple of months ago, where in series B plus board meetings, you see the numbers for both GRR and NRR broken out by current ICP customers versus legacy ICP customers. So I think it's, of course, when you're in the early days of building, you have to cast a wire net because you don't know, do you know what I mean, where you're really going to strike in terms of that great resonance of the solution that you've built. I think what you want to be mindful of is that you're not losing the customers that should be in that ICP. But I think some healthy churn early on is actually a very normal and solid thing. But it's being intellectually honest about the reporting of who's our ICP? And who are we losing that's in that or outside of that? To your point on staying ahead on the product? Yeah. I mean, I'll tell you like one tough learning I had, do you know what I mean, as an investor, which was, you know, we kick around this term at primary called the zero CAC CEO, right? And you can imagine what that means. But it basically is like, this is a CEO who's very well networked in the category. They've got like a clear right to win. They're going to use that to their advantage. And I think for a while, I may have over rotated in a few instances, you know what I mean, for saying, okay, like, I love these zero CAC CEOs, it's not enough on its own for all of the reasons that you just described, where the zero CAC CEO who's not supplemented by amazing technologists, who can do exactly the things that you just described, right of being, they have the vision, they're a step ahead of where they're going, etc. It doesn't matter. It's just not enough. Like it may get you in the door. But to your point, it's not going to ensure that you kind of keep you know, the share that you get out of the gate. So for us, when we're assessing founding teams, and I'm not even just talking about go to market, I'm talking about any category of primary, you know, if we say it's a zero CAC CEO, the next question is, well, who's the technical co founder? I mean, what are they going to do to help this business as well?
Speaker 1When I hear being one step ahead, that does not, I hate to bring it back to business school parlance. But you know, we're all talking about it, like that doesn't sound like a moat, you know, like, that doesn't sound like any kind of sustainable competitive advantage. And the thing that my mind goes as it typically does to like a bunch of weird places, but one of them is that, yeah, if there's no terminal value, you're not going to be able to do anything. Yeah, you're not going to be able to do anything. I mean, you're not going to be able to do anything. Everything is just like, I was one step ahead for a little while in the same way that like Barry Diller was one step ahead at Paramount, you know, or Michael Eisner was one step ahead at Disney. It's like, well, almost feels like maybe they shouldn't even be public companies. Because it because sort of the nature of public company for me is like the durability of the cash flow. It's like, yes, the thing's going to be around there's switching costs, there's brand, there's network effects, there's data that they can leverage. If everything's like, well, you know, my guy works really, really, or gal, my person works really, really hard. So okay, well, that person works really, really hard to they're gonna have a moment in the sun, and then the sun will set.
Speaker 4That's a lot of comfort with the past though, right? Because yes, the way that we did this in the past was different. But the games change every couple of decades, the games change. And this new game might be exactly that you see it in many domains where it's about staying a step ahead for a very long period of time. Like, I watch a lot of football, football is that like every season, you got to stay a step ahead and that every game, you got to be a step ahead of your competitors. And then you do it or not over enough games in the season, you win, and then you come back and you have to do it again and do it again and do it again. And if you stop doing it, your value as a football team goes down. And so Real Madrid is the most valuable team in the world, because they can stay one step ahead for a very, very long time. You see this in many other domains as well. And that might just be the new game in town. Now, it's a very uncomfortable game, right? Like, it's way more comforting.
Speaker 1I don't think you do. I don't think you do see it in a bunch of other domains. Well, Asit sees it in his business. You see it in his TA.
Speaker 4Pharma is all about, can you come up with the next thing? And like, you know, you get-
Speaker 1Pharma is about intellectual property. Pharma is about like, you're securing rights that sustain for an ongoing period of time. Like, if you're going through these development- If you don't have a paid investment site-
Speaker 410-year investment cycles. Like, 10-year investment cycles to come up with that thing to stay ahead for the next 10 years. So you get this period of time where you have IP-
Speaker 1Yeah, but I'm saying there's guardrails that protect the IP. Like, if there wasn't a patent on Lipitor, like, Pfizer would have a much lower incentive to invest in it. If the minute that you bring Lipitor to market, every single person can copy the molecule. And like, then yeah, then like, then Pfizer probably shouldn't be able to- Yeah, but you have to do it with FDA approval. Primary is not a public company. That's my point. Like, these are- this is why there are traditional businesses, because staying one step ahead isn't something you can really, like, count on for three decades.
Speaker 2You could stay one step ahead on product at all times and still have a losing business, right? So what's the difference between the people who do and don't? I would say it comes back to the customers, right? Because if we actually pick on, you know, some of the examples that you just rattled off around, like pharmaceutical and IP, the businesses that do this really well, they stay a couple steps ahead in a manner- Yeah, yeah, yeah, yeah, I think that's a great point. Like, I think that's a great point. that wants customers to expand the use cases faster and more deeply than they will anywhere else. And the more and more of that customer information that gets on their platform begets more and more reinforcement learning that that vendor then owns that makes the switching costs that much higher. And so I think that's actually the logic behind a lot of this king making, right? Is if we can help people get all these customers on there and really get in there, then that starts to look a little bit stickier around what that looks like. And there is sort of a degree of IP. So that tends to be how we think about it. But again, it has to be like the proof is in the pudding. It's not just that you had this perspective on where the market's going, it's that the customers are following you. And you see that very clearly and that you consistently earn this right for them to want to do more and more with you and spend more and more with you. And I think if you don't see that materializing, that's where like my spidey sense would be up about, you know, smoke in the house.
Speaker 4Databricks, Snowflake, and Amazon have built agents that are purpose-built to help a customer migrate over. And I found that really interesting because they've taken the cost of migration down and the timeline of migrating and the headaches of migrating down quite dramatically. And one of the friction points when you're moving from one vendor to another, if you're a large business, let's say you're moving from Snowflake to Databricks is like, it's going to cost me so much time. It's going to be the project of the year. But if it's the project of the month and it doesn't cost me that much, maybe I do move. Like, I like your new month feature. What are your thoughts around the future of switching costs? Like, what is it going to come down to? And what do we have to be prepared for? Like, is it going to be, yeah, we all just want to have agents that are going to help us move around. And so you can very easily move from one to the other. And only the firms that lock you up from a data perspective where you have to start from scratch on a data side, that's the switching cost. It's like an annoying one, but it's there.
Speaker 2My hope is that that is one day the world that we live in. I'll put out an aspirational thought for you guys. I said to someone at Primary recently, I'm like, I'm going to move from one to the other. I long to live in the world where no one ever files a support ticket ever again. Right? Because if that actually happened, if you think about it, like most support tickets outside of like reset your password or whatever come from like flawed implementation or your configuration is out of date or something around that. So I long to live in the world where someone has figured out how to make it easier just to get set up and get set up correctly. Like when I was running revenue teams, what I would always say to our team is like phase two never happens. Right? So if you let that go, without that, it will just never ultimately materialize. I think today there's work being done on that. And I would love to find a company to back, by the way, that is building in this category. So if anyone listening has ideas, please, please get in touch on that. But I do think you see this investment in forward deploy right now, right? As a stop gap to go and do that. The best organizations are saying, if we have that forward deployed motion, what are we learning from a product perspective that we're putting in practice immediately to productize the implementation? So one interesting organizational change I've noticed in portfolio companies is that implementation in many places is being moved out of the chief customer officer lane or the post-sale lane and into a product at edge, right? Because they're viewing it as a product opportunity in terms of how to get these customers up and running, which I think is pretty interesting. Should that change
Speaker 4how we calculate cash then?
Speaker 2Totally depends on like exactly how those resources are being used. But actually to piggyback on that question, I was chatting with the CFO of Invisible Technologies, Varsha, who said this story where like they've got very meaty, multi-year enterprise deals and they made a very deliberate choice in the office of the CFO to invest aggressively in FDEs because they already have the data in terms of how that is translating from an LTV perspective. And even if you want to say like LTV has to be taken with a grain of salt right now, they know it translates into enough revenue in the first couple of years and it more than pays for itself. So your question is the right one, right? But the reality is many people are saying throw the unit economics out right now because I just need to learn as quickly as possible. So I'm going to do some of the things that look unscalable and then I'm going to send it over to the product org to figure out how we engineer some of these things out. But aspirationally, I want to go to the world that you're describing, right? Where we have figured out, you know, how to use agents and to do that very effectively. I
Speaker 4think what you just said, by the way, is the distinction between FDEs done right and wrong. The whole FDE concept was it was going to help Palantir figure out what to build. And that feedback loop is what was so special about the whole model, like one of the defining features. And so you see a lot of AI companies that have FDEs, but there's there's no there's know, plumbing to be able to connect these two things and create a feedback loop. It's really just implementation. And so the ones that are doing it this way, that is the true FTE model.
Speaker 2We've spent a lot of time internally talking about the Palantir model, and they did exactly that, right? Everybody said, oh, it feels service-y. No, they built product off of it. You know, it was a long game, but that's precisely what they did.
Speaker 3It does feel like, I mean, 80% of the AI innovation is going into pre-sales. What we're talking about is a post-sales motion. So Cassie, when you say, you know, any companies out there that are doing this, like what, specifically to the FTE or specifically in terms of technology and what they're doing is what you're looking for?
Speaker 2Where businesses get stuck, I think, is where they end up in like one feature-specific lane or like a partial platform. And so when I think about what's going to be really exciting and the, I always like hesitate with post-sales because I tend to, you know, my friend Sankita always says like, ban post-sales as terminology, right? So the customer. The success side of it. It's something that can really touch the customer journey end to end. And so what I mean by that is that example I gave on implementation. Implementation is one part of a way bigger problem, which is that, you know, customers fall out of sync with configuration requirements all the time because they re-platform, someone re-platform, something breaks multiple times per year. Then you're doing these implementation health checks for people who've been customers for four years only to issue them an SOW for $20,000 to get out of it. And then you're doing these implementation health checks for people who've set up to speed. And so for me, where I have energy is it's what's the play that can actually eradicate all of that, right? So you're kind of living in the world where the way I describe it is, you know, customer success has promised to be proactive versus reactive since the dawn of software. It's not happening, right? And I think it only really happens when there is an agentic play that's in there that kind of spots these challenges with customers before they even come up. And I would say like, there's always the value equation and the, you know, ROI story, but a lot of it comes down to the technical configuration. So I would say my enthusiasm comes from how do you solve some of those technical configuration roadblocks in the customer experience that just makes the value selling and the ROI story that much of an easier tale to tell. And I'll say the same thing. I mean, the, the, the outcomes in the customer success category have not been fantastic historically, right? Like we talked about the onset around go-to-market more broadly, even specifically with an ad, but same deal. If you say, you know, you can go after these labor pools, you know what I mean? Because suddenly the shape of that organization looks completely differently, right? Because we've now moved it to agents who can do this, that again, you know, paves the way for larger potential.
Speaker 4And that's part of the bowtie or that part of the funnel looks closer to support than it does than the sales side does. You can see that side, like really benefiting from agents. Cassie, you're, you're looking at go-to-market founders and so many of the bets that you make at the seed round are less about the specific idea. It's from an evolve. So much of it is just down to the person, right? Yeah. What does a good go-to-market founder look like to you? Like, what are you, yeah. What type of people are you looking to bet on? What stands out to you? What are you looking for?
Speaker 2You know, at the end of the day for any founder we back, like we want them to take us to the mountaintop, right? So their ability to sell the vision for the company is hugely important because it's going to be indicative of their ability to sell customers, to sell employees on taking a risk to come to work there and then selling stock, right? To downstream investors to come on board. And so one of the things is like, I, I very frequently know within 10 minutes of a first meeting of like, is this a person where I'm like, man, I shouldn't be an investor anymore. I should quit and go and work for them. That's a pretty sort of easy read. And so, and, and every investor has like their personality flavor. But for me in particular, I think that's like particularly important in go-to-market where you and bring people along on that ride is hugely important. I do think in go-to-market specifically, like at the end of the day, obsession with the customer is like, I always say, if you do everything in your power to make your customer successful with your product, you have to catastrophically screw something up not to succeed as a business. That is true in every category. There is like no room for error with that within go-to-market because you are selling into people who know, you know, and they can smell the bullshit. So I think that's one where, you know, listening to how they pitch, listening to how they objection handle, like that's a huge, just kind of telltale sign for me. Do I mean around, is this a person that I want to be excited about? The third we talked about earlier, which is the technical counterpart, right? And sometimes the founder themselves will be technical, but if they're not, if they have more of a commercial bent, which you often see in the go-to-market world, that's starting to change. I think with younger founders coming up for sure is, you know, how are they going to be able to keep pace as we unheard of velocity? And in fact, if we go back to like some of those risks around the SaaS apocalypse, we talked about like the DIY risk, which we're not overly concerned about the enterprise. There's the horizontal model risk, which is like moderate. To me, the biggest risk is the new entrance and how quickly they can move, right? And so we just want to make sure that we're seeing that. But similarly, if you have a pure play technical founder, the question becomes what's their right? Because you guys get it. Like these are the go-to-market buyers. This is a viral, close-knit set. And so if you are the sort of lone wolf technologist who can ship product, like what else is going to be true? That's going to get you in the room with the likes of you guys, right? Around how are you going to get excited about the product and sort of get that viral coefficient built into it. We, of course, have other like frames at primary in terms of this, what we look for in founders around, like, are they learning machines, right? Like what have we seen from their past life, right? Where they've shown evidence of that. What have they been great at? And so I think that's going to be a big question for us. We always say, if someone has never been great at anything in their life, regardless of whether that was school or the rowing team, like, how are they going to be great at this? You know, so that's like, so these are like the types of questions, right, that we ask at a more general
Speaker 4level. And Vinod Khosla has this like, I don't know if it's a saying, but he likes to say that the biggest innovations in any industry come from founders from outside of those industries, because they look at something with a fresh perspective. So he's like, I want to bet on people that can make 100x impact from what, where we are today. And I believe that that happens when somebody is coming from the outside. Do you think that the next big winner in go-to-market is going to be somebody who came out of go-to-market and built for it, or came from outside of go-to-market and builds in it?
Speaker 2I honestly, I think it could be either. Like, I would not turn my back, do you know what I mean, on someone who I thought was compelling in other ways, who did not grow up classically in the go-to- market. I think the one thing that's particularly interesting about go-to-market is that it's the tip of the spear for every company on the planet. So even if you didn't come from the go-to-market world, you have an appreciation, I mean, for the importance of what that means for the overall business health. And so I might have a different lens on that in another category, but within go-to-market, I absolutely would talk with a person who was a brilliant product leader in a very different industry who maybe, you know, in the monthly all-hands kind of heard about just like these insane challenges. And I think that's going to be something that's going to happen in the And what was ultimately going on with Voice of the Customer or whatever it may be. So I'm not closed off to it, but there is a question of like, how do you get distribution and how do you get distribution quickly? So that's a place where we really want to test those commercial instincts around like, how are they, you know, going to get in market and get share quickly? And this is a place where like, we have a team that can help with that. But as I said earlier, that's not our job. Like our job isn't to find product market fit for the companies, it's to accelerate that. Like the founders we back are perfectly capable of doing that on their own.
Speaker 4Do you think that the next big winner in go-to-market tech is going to come from somebody who's coming out of go-to-market and building for it or somebody who's coming from the outside and building for it?
Speaker 2I think it's going to be someone who was a consumer of it in a major way, whether they were in go-to-market or outside. Meaning I've met a number of like great technologists who have been, they've been stakeholders and taking on annoying projects. To help go-to- market. And I think it's going to be someone
Speaker 1who's going to take on annoying projects. To help go-to-market. Like you go to an enterprise customer, they want you to build something custom. You don't do that. You have to stick to the roadmap. And now we know that you could possibly potentially build product that is, that contemplates a separate unique instance for every enterprise customer using, you know, software. And so then I think what I've noticed in people that have experienced the GTM problem, so to speak, the people that, is that they, to your point, Cassie, they narrowly define the problem space. They're like, well, this was a particular, you know, they, when they, when the, when the prospect called, when the salesperson called me, they didn't do a mutual action plan. So I've built software that's just about designing mutual action plans. It's got to be, right now, given the capability, your, your vision has to be world changing, or it's just, it's too small. You're going to get blown out of the water.
Speaker 3It reminds me of the company. It was probably 10 years ago that just did signatures, email signatures. Oh my God. And I was like, is this really, they were acquired successfully at one time. That's exclamer.
Speaker 1Are you thinking about exclamer?
Speaker 3No, it's like signaturely. It was one of those LY companies.
Speaker 2Of course it was an LY company.
Speaker 3Definitely an LY company. But also Cassie, this reminds me also 10 years ago when I was pitching Quotapath, I was at first rounds partner meeting and I'm sitting there and pitching it. And the last question was, "AJ, you're you're like a go-to market leader like tell me why i should believe that you can build the right product or vision and i don't remember my answer but i remember the call 30 minutes after the meeting with josh koppelman saying you didn't get that answer you definitely did not nail that answer i am not a first-round company today because of that but cassie my point that you made uh my question it worked
Speaker 2out just fine it worked out okay i think we
Speaker 3did okay but i i put a chip on my shoulder and i was like all right i'm gonna show you i'm gonna be a product-led growth company yeah it is just
Speaker 4collecting chips like in life like anytime i have
Speaker 3them all memorized but you said earlier i think this is a really great point around the product the best products win and then now we're talking about go-to-market and go-to-market leaders as you look for your portfolio and how many uh founders have you backed at primary personally
Speaker 2in total our well our total portfolio is about 100 companies right now for me i've got about eight in my bloodline
Speaker 3and i'm sure you've looked at like just the backgrounds and personas of all of them what like is could you give us some details on this percentage came from a go-to-market background versus product versus technical for for you you know as
Speaker 2i said before i'll look at any type of founder my style tends to do really well with um serial entrepreneurs and i just like know that about me and i think it's just i think that's less about primary i'm
Speaker 3updating my resume right now you can't see for the next time
Speaker 2around excellent i look forward to that but i do if you look at if you actually scan through the companies that i've backed there's a lot of repeat entrepreneurs in there and i don't the way i think about that is they have real unfinished business and i just love working with those people do you know i mean where they just come and they've got this where they have chips on their shoulders and they're a little frustrated about chips on shoulders but chips and pockets right so we we love that but i would tell you i've absolutely made bets on you know i backed a young founder in a company who was the type where you know he was getting cease and desist at 16 for the types of companies he was building and i'm like this guy's fascinating do you know what i mean where he's like a classical technologist he's got to learn to go to market side but like i probably wouldn't bet against him right like he he built software while he was a summer intern at a company and the cfo of this like pretty well-known large company said drop out of school and come work here and he's like i will drop out of school but i'm gonna go start this company right when i go and do it so i i very much have an open mind around it but i'm also sensitive like it's seed it's a marriage not a date and i mean aj you you know it it's like you know it's like you know it's like you know it's like there are highs lows sideways turns everything in between of like the best companies in the world have that and it has to be a partnership i think between the investor the board member and the founder and so a lot of it for me is just like the personal fit and as i said before it's the way it's kind of shook out is that i i tend to do well with the serial entrepreneurs but i will absolutely back the first timers as well too and i i you know i i lost the deal last year that i was kind of still very upset about i'm still tracking where it was a it was a pure play engineering co-founding team and i just fell in love with them because i i think they had like amazing customer centricity for two engineers and you know they had come come in my direction in a totally different way and i'm so i'm the the you know short version uh the short answer to the perry long winded version is i'm very open-minded i've done a little bit of everything cassie it's
Speaker 1been amazing to have you on top line i can't believe this is uh the first time but there will be many others
Speaker 2okay i'm glad i can get the return yeah we might even
Speaker 1want you to be like a a co-host for a period of time uh if you do
Speaker 2yeah yeah so we'll see well i feel like with you gentlemen i easily could just hang out here and and just shoot the shit for five hours so i'm proud of us we were meeting like for years before
Speaker 3like why don't we actually start recording these conversations and here we are we wanted our weeks to feel less miserable and we're like this is fun
Speaker 4let's just do this and this will be a nice little balance
Speaker 1cassie there's founders or operators listening they want to be incubated by primary they don't want to get that form template response from you what's the best way to to match the criteria so that they can be a primary company what do you
Speaker 2think yeah absolutely so um first off the best way to get in touch with me is just via email at cassie at primary.vc but what sam's alluding to is i was joking as the show was getting started here that at this point there's no excuses in the world for not doing homework and research before engaging somebody and so nothing drives me more bananas than when i get these inbound emails for businesses that have nothing to do with anything where primary is focused or a different stage so if you go to our website very clear what our specialization areas are i have a public thesis that i have written around what we want to do and b2b go to market i will not do a deal that is not in that thesis area because i only do one to two new deals a year and the gracious gentleman at top line also allowed me to write my most recent editorial which also reads uh focuses on that thesis so please read the thesis and if there is a fit get in touch and if you know something about it please let me know in the comments below and i'll see you in the next video bye bye someone building in any of the other categories please feel free to reach out to me as well too and i'm happy to get them in touch with the right partner
Speaker 1on our end do the work do the work at sea thanks so much for being our guest we'll talk to you
Speaker 2soon thanks again for having me okay and against all odds you're still
Speaker 5here look if you want more top line check out the top line newsletter at topline.beehive.com beehive is spelled weird it is b-e-e-h-i-i-v.com topline.beehive.com or if you're a video person because video is great check us out on youtube topline dash media is what you want have a delightful day everybody
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