Podcast appearances and mentions of steve which

In this episode of Building Texas Business, I sit down with serial entrepreneur Steve Reynolds for his perspectives on innovation in corporate travel tech. As CSO of Embers Inc., Steve shares his journey developing TripBam, an early pioneer utilizing algorithms and robotics to optimize hotel rates. He explains TripBam's strategic transformation from consumer to enterprise software, strengthening the company and positioning it for seamless integration under Embers. Steve offers valuable lessons on championing passion within high-performing teams. The importance of actively engaging customers and development staff to creativity solve problems is emphasized. We discuss the challenges of maintaining innovation at scale versus smaller startups. Steve's experiences navigating acquisitions and a turbulent industry offer cautionary advice. A theme emerges—embracing flexibility positions leaders to overcome challenges and achieve lasting impact. SHOW HIGHLIGHTS In this episode, I spoke with Steve Reynolds, Chief Strategy Officer at Emburse Inc., about his journey in corporate travel technology and entrepreneurship. Steve discussed the origins and evolution of TripBam, a platform he founded that uses algorithms and robotics for hotel rate monitoring, which eventually pivoted from a consumer-focused to a B2B model. Steve shared insights on navigating the challenges posed by the COVID-19 pandemic, emphasizing the strategic decisions that helped TripBam emerge stronger, including cost optimizations and product enhancements. We explored the importance of fostering a passionate and innovative team, highlighting the value of listening to customers and involving development teams directly in problem-solving. Steve explained the critical difference between passionate programmers and those who are merely formally trained, and how assembling a team that shares the company's vision and offering equity can drive success. The episode delved into strategies for managing company growth and financial stability, such as quick decision-making in right-sizing staff and optimizing operational costs through cloud environments. We discussed the benefits of subscription-based pricing models over transaction-based ones, particularly during economic downturns, and how this approach helped maintain cash flow during the pandemic. Steve reflected on the evolution of workplace environments and leadership styles, noting the shift from rigid, traditional settings to more flexible, results-oriented cultures. We talked about the challenges of maintaining innovation in large companies, contrasting startup environments with big company mindsets, and the importance of hiring the right people for each setting. Finally, Steve shared his thoughts on the future of the travel industry and the innovative approaches that have set new standards in modern practices. LINKSShow Notes Previous Episodes About BoyarMiller About Emburse GUESTS Steve ReynoldsAbout Steve TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Chris: In this episode you will meet Steve Reynolds, chief Strategy Officer for Emburse Inc. Steve has built his career in corporate travel technology and in starting various companies over the four-decade career. Steve looks for opportunities to be disruptive. Steve, thanks for coming on the podcast. It's a pleasure to meet you and appreciate you taking the time. Steve: You bet Chris Glad to be here. Chris: So you know there's a lot that I'd love to get into with you. I know that you know currently you're with a company called M-Burst Travel, but that you started a company before that called TripBam. Tell us a little bit about, I guess, those companies and what they do. What is the business they're known for? Steve: Okay, and just to back up a little bit further, I guess what you could call a serial entrepreneur. Tripbam was my third or fourth venture kind of lost count, but I've been in the corporate travel tech space for 40 some odd years. And TripBam when we started 10 years ago, we recognized that hotel rates change a lot more often than people actually realize. If you were to create some robotics that went out and grabbed the rate at a particular hotel for a certain date in the future, you'd see that rate changes just about every hour and what we found is if you just keep watching it, eventually it's going to drop, especially as you get closer to check-in. So we created some algorithms, robotics, whatever you want to call it that said okay, I've got a rate of $2.99 at the Grand Hyatt in New York. I'm arriving on the first and departing on the third. I want you to just let me know when it drops and if it does, I want you to rebook it for me If everything is the same room, same bed, same cancel policy, blah, blah, blah. So that's what we did. We originally invented it for the consumer market. We put out a website and we got mentions in the Wall Street Journal and USA Today and so on. But sort of my corporate travel buddies called up and said, hey, Steve, we really need you to apply this to corporate travel. And they started writing some pretty significant checks. We followed the money, we pivoted and went all B2B at that point. And so the company grew 40% year over year for the first six years, cashflow positive within just a couple of months. I mean it was great. It was great. And then COVID came along and kind of took our knees out from under us for a bit. Chris: COVID kind of wiped out the fundamental business model for at least a little bit. Steve: At least for a little bit. But fortunately a lot of our customers were paying us subscription fees rather than transaction fees, so we were to stay afloat. We got through COVID and we actually came out on the backside of COVID in a much stronger position, both financially and you name it, because we were able to do a lot of just cost improvements, right-sizing the organization. We kind of got a little bit ahead of our skis, I think, in some areas and created some new products, just all kinds of things, pushed everything out to the cloud and such that dramatically reduced our costs and just were firing all cylinders. Chris: And then we worked out a deal with Emburse in July last year to buy the company. Okay, how does I guess what TripBand does fit within the Emburse excuse me, overall, maybe suite of products or company strategy. Steve: Yeah. So Emburse provides travel and expense to the largest of companies, to the smallest of companies, and what I mean by that? Everybody. When you go, you have kind of a booking tool to start with. Most folks are familiar with Concur. We have our own. The reservation gets created. It then needs to be watched, monitored, audited, improved upon. That's kind of where we fit in. So before the money is spent we actually see if we can actually do better than what the traveler did on their own. Travelers are not going to check the hotel rate every day. They're not going to check their airfare every hour. They're not potentially going to book the preferred property within a particular city. We fix all that before the money's actually spent. We then push all that to mobile. So you've got a companion app in your pocket where the traveler gets a ton of destination content specific to that company. So I'm going to New York, I'm staying at headquarters, what hotel should I stay in? I need to go take a client to dinner, what restaurants do you recommend? All kinds of other stuff, including safety and security perspective and so on. Then the data is all captured and fed into an expense report so that your expense report if the traveler is compliant. It's kind of pre-created and pre-approved, so the traveler in a lot of cases doesn't have to do anything and if they're compliant all the way throughout, they could actually kind of be paid as soon as their plane hits the ground. Then it all feeds into reporting and analytics so that we can improve your travel program, identify additional savings opportunities, find some fraud issues, detect all kinds of other stuff that might be a problem. We also offer a card product if you don't have one, and that's kind of the travel plus expense ecosystem that we provide. Chris: That's fascinating. I obviously wasn't aware that something like that existed, but I can see how large companies with a lot of employees traveling could see the benefit and realize a lot of savings from those services. Steve: Yeah, when you combine travel with expense, some kind of magic happens in that we have enough data and insight to be able to start pre-filling out that expense report. Otherwise, all we're counting on is card transactions and receipts, and that's really not going to do the trick. But if we can get that card information augmented with the receipt scanning and everything else that we do now, we can really do a nice job of pre-filling out that expense report. So really all you have to do is add mileage, hit, click and you're submitted. Chris: So you mentioned that you've been in this industry for 40 plus years. I'm curious how did you first get started in the corporate travel tech space 40 years ago? Steve: It was just by happenstance, I guess you could say. I was originally started as a programmer for Texas Instruments, got accepted into their executive program, which meant I could go off and get an MBA and then come back to TI, but quickly realized that the consulting firms were paying a lot more. So I ended up with Ernst Winnie, at the time with Ernst Young and my first assignment was with a travel agency in Houston, Texas, called LifeGo Travel, which doesn't exist anymore. The owner of that company hired us to come in and build some technology. It really put him on the map and he got tired of paying the bills and seeing the hourly checks that we were charging. And so he approached and said, hey, you know, do you want to come work for us? And I'm like, well, that never thought about working for a travel agency. That doesn't sound all that exciting. But he said look what if we created a company, We'll spin it off and we'll give you some equity. And I'm like, okay, now you're talking. So we left, we started up a company called Competitive Technologies and all of it was bought by American Express Travel two years later. Chris: Oh, wow. So unquestionably you had a little bit of an entrepreneurial spirit going way back then to see an opportunity. Put you in it. Steve: And a lot of it is just kind of, I guess, my personal. I don't do well at big companies. I really struggle because I get so frustrated at just the lack of progress or the lack of innovation or the speed at which things happen, so I tend to sort of find an excuse to hit the exit button, usually within a year or two. Chris: Right. So you said something in that response that I want to talk to you about, and that's innovation. I think that's there's such a common theme, I think, with entrepreneurs about. You know, and innovation can mean so many things. What do you think that you've done, as you've built several companies, as you mentioned, to create or foster and nurture a spirit and environment of innovation? Steve: You know a lot of it is just becoming a really good listener to the buyer, to whoever the customer is. And then when they say things, there are certain kernels that are aspects of what they say that you just go oh, wait a minute, okay, can we go back to that? That sounds important. You know this level of frustration. Why does that frustrate you? And if you have engineering and development in the room when those things are said, oftentimes some real magic starts to happen and we just the creativity, the innovation just comes out naturally as wow, we can solve that problem. That's not that hard, you know, let's go do that. So that's on the B2B side. That's kind of the formula, that conversation. Something falls out as far as a new feature, product, something like that, that we can start working on the B2C side. Chris: Go ahead. Well, it sounds like there's a function there of asking the right questions and really listening. Steve: Well, and just most big companies or companies they try to protect the dev engineering. They're like oh, we're not going to let you talk to customers. You guys sit over here in the back room and we'll come to you with sort of a priority or roadmap of what we think is needed. And I feel like that's just the wrong way to do it. You've got to get the dev and the engineers and the programmers in the room to hear the story, otherwise you get this telephone tag of what actually gets built isn't quite what the customer wants or was even asking for. And for most companies that's really hard. I don't know why, but they just. It's like we can't allow that to happen, but that's just not the way I operate. Chris: Well, I mean, it makes sense that people you're asking to solve the problem probably need to hear what the problem is firsthand, right? Steve: Exactly. And then it's oftentimes the dev guys are like they're coming up with much more creative solutions. If you just hand them a requirement sheet or spec sheet, they're like, oh okay, this is going to take a month. But when they're involved with the client and they actually hear what the true problem is, oftentimes they're like, oh, I can knock this out overnight, I'll have a solution to you by tomorrow. It's just a night and day sort of sense of urgency or sort of the emotion around creating the solution. They're bought in. At that point, when they hear it directly from the client, they can be the hero. Chris: Well, when you think about kind of that and getting the right developers and the right kind of team together, what have you found to be successful as far as what to look for in building the right team and then keeping the team together? Steve: Yeah. So fortunately for me I mean through all of these different companies that I've started I've been able to kind of get the band back together multiple times. A because I, you know, I'm a big believer in sharing the equity. You know, let's get everybody, if not equity, at least options, so that when there is an exit, everybody benefits, and they've all seen that so far today, knock on wood, I haven't had an unsuccessful exit where we've had to, you know, turn out the lights or whatever. My shareholders have all made money, you know, typically around 5x to 10x on their investment, which has been great. So it's easy to get the bad back together. But what I also have found out is there are certain programmers that are passionate about programming and others that are just taught programming, and there's a night and day difference on the result. If they're passionate about it, the results come out quick. I get creative solutions that nobody would think of. They're usually extremely low cost and it's just so much better than if I have someone that's college taught. I'm doing this because it's a paycheck and I took this degree because that's what somebody told me to and I was good enough to get a B in college on all my programming courses, but at the end of the day, if their heart's not in it and they're spending their time, you know, just on the side weekends and nights learning new stuff, they're not going to be very good. So give me one or two of those that are passionate and I'll put them against 10 to 20 of those that are school taught and will kick their ass every time. Chris: So yeah, well again, I think that transcends all industries and disciplines, the key being passion. Right, I think you, as the leader, are the one that has to start with the passion and then find people that share that passion to get to where you're talking about, where there's that flow within the organization. Steve: Yeah, I think development's a little bit different. I mean, you're not going to find anybody super excited about accounting or I don't know the other aspects of it, but with development there's guys that just get so into it. You know they're programming on the side. They get into hackathons, they want to prove that you know they're smarter than the guy next to them and just constantly looking for the next challenge and just coming up with those creative solutions. I don't know of any other discipline that really has that level of it, but there might be. I mean, I could be wrong. Chris: So, just going back and maybe not the first venture where you and the travel agency in Houston started, but maybe I'm just curious to know as you began some of these startups, maybe sharing some of the lessons learned through some of the challenges you found in starting that venture, whether it be raising capital as an example, or any other challenges that may come about, but I think that capital raise can be one in the startup that some entrepreneurs find daunting and maybe can't solve and never get anything off the ground. Steve: Yeah Well, I think, first off, just wait as long as possible to raise capital. You know most of them kind of build an MVP which just kind of barely works and then go out and try to raise money on it. And whenever you go down that path you just end up way undervaluing what you have. And I know people get in certain situations where they just need to have a check, you know, or it's you know, lights out. But if you can wait until you actually have a client actually generating revenue, actually having positive cash flow, whatever, and then you can show someone, look, we just need to add fuel to the fire here. This is not about keeping the lights on, this is about generating growth You're going to have a dramatically better outcome. The other thing I found out is when you take the big check too early, you start making really stupid decisions. You start hiring attorneys that are expensive, you hire a CFO before you need it, you have a head of HR, all kinds of stuff and overhead that's just not necessary and over time it makes you less and less nimble because you're so worried about payroll, you know, and less focused on just delivering a product that has a you know, a bunch of value. Keep your day job, keep working nights and weekends, wait as long as possible. I mean, I always said, look, cash is like oxygen. If you run out you're going to die. So hang on to it with both hands first. I mean beg, borrow and steal from friends and family and whatever to just get stuff. If you need a contract, go out on the web and search for a capolar plate contract. It'll be good enough to get you started. Or find someone that's a buddy, that's a lawyer, that's willing to do some pro bono work in return, maybe for a little bit of equity stuff like that. Just hang on to that cash as much as you can, for as long as you can. Chris: Well, I think there's a lot there that someone can learn from. Obviously, speaking as a chairman of a law firm, I can't endorse legal Zoom for the startup, but I understand your point. We talk to clients a lot about especially know, especially in the startup phase. Maybe you know helping them get going, but you know and being smart about how they spend their money. But make it an investment in getting at least a sound structure and they may not need right the full-blown set of legal documents, but I can promise you I've seen people start on legal Zoom and wish they hadn't, you know, a couple of years later when things were getting a little tight. But I understand your point there. But conserving cash is important to get off the ground. Steve: Yeah, I mean you don't need to come right out of the gate being in an Inc. You know and incorporated in Delaware and pay all the fees, whatever to make that happen. I mean, just start out as a low-cost LLC and then, when you're ready to sort of raise capital and become a real company, you know you use part of that capital to convert at that time. Chris: So you had mentioned earlier, you know just, I guess, going back to kind of trip BAM COVID having, at least initially, a pretty profound impact but then turning it into a positive, and I'm kind of want to take you back to that time and you maybe dig in a little bit deeper. I think it's a beautiful lesson of something where you know a lot of people just throwing up their hands because travel stopped, et cetera, which decimates your business specifically to you. But then you said we actually learned from that and became a better, stronger company because of it. And you've mentioned right-sizing, the organization stuff. But could you share a little more detail and some stories from that our listeners can learn from if and when their business faces something similar? Steve: Yeah, I think, first off, being fairly quick. You know you can always hire people back, you know. But if you keep them on the payroll and you start burning up cash just way too fast or you're starting to trend towards in the red, you just got to pull the trigger. Nobody wants to, nobody likes to do it, but it's really nobody's fault. It's just something as an executive or CEO you have to do, or a founder. So that's one. Second is, as companies grow, you kind of make stupid mistakes along the way. You get kind of inefficient. You don't anticipate the level of growth that might have been reality. So going back and saying, all right, take a step back, let's catch our breath. You know, what should we have done to kind of handle the scale better? And so, for example, just moving everything to a cloud environment, you know, putting it out to bid, switching from one cloud provider to another, whatever it is, you know you can just generate or reduce your costs dramatically. You know, rather quickly, if you just focus the time on it. Everybody gets so white hot, focused on growth and the next client and the revenue they forget to look at the rear view mirror about. You know there was a lot of costs we could have taken out, you know, which could generate even more cash going forward. Advert: Hello friends. This is Chris Hanslick, your Building Texas business host. Did you know that Boyer Miller, the producer of this podcast, is a business law firm that works with entrepreneurs, corporations, and business leaders. Our team of attorneys serve as strategic partners to businesses by providing legal guidance to organizations of all sizes. Get to know the firm at BoyerMiller. com and thanks for listening to the show. So we pulled the trigger pretty quick. We right-sized the staff. We had a pretty good and, fortunately for us, this is the other. We kind of lucked into this. Our customers, for whatever reason, decided they wanted to pay a subscription fee rather than maybe a percentage of the savings or a transaction fee, to where what they were going to spend would fluctuate month over month. By paying a subscription fee, they could budget it and they were going to get a better return on investment. So we did most of our deals that way and thank God we did, because when COVID and everything went into toilet in April of 2020, we still had cash coming in the door. So we were actually stayed cashflow positive because we kind of right-sized the staff fairly quickly. And then, coming out of COVID, as the revenue started to ramp back up and our sales started to continue, we were just on a much better platform that would scale after it because it was just all right-sized and efficient and whatever, and at the same time we added new products. So we had a two-year kind of all right, just keep the lights on, market will come back around. We added an air reshopping solution. We added a bunch of analytics to audit contracts and to benchmark performance, so that we had a whole bunch more to sell coming out of COVID than going in, and so that caused another year of kind of explosive growth as a result. Chris: That's great. So, yeah, obviously part of that is give some deep thought to how you price what your product right. So that subscription-based versus transaction for you sounds like a very. Maybe it didn't seem as meaningful at the time you made it, but it turned out to be. Steve: You know that's a tough one If the ROI of your product is pretty clear, like reshopping. If you've got a rate of $2.99, I drop it to $ to $250. I've got $49 per night in savings If you pay me a couple of bucks. Okay, here's the ROI. And we could run some pilots and all kinds of stuff to prove that out. So that makes it really simple and we try to hit look, I need a ROI that when they take it to their boss the guy that's doing the budgets, you know, won't cause all kinds of frustration and concern. So four to one is usually the minimum. A lot of our customers, the larger ones, are getting eight to one, 10 to one, you know. So you could say like you've probably underpriced it. But that's okay, you know we'll claw back some of that. You know, over time when it's a product that's the ROI is a bit fuzzier. You just got to somehow convince the client that this is the potential savings. They're going to guesstimate and then from there work backwards to a price which kind of gets you back to that four to one ROI. So if I think I'm going to save you five bucks a transaction, I'm probably going to charge you a dollar to $1.50 is what I'm going to aim for. Again, to get to that four to one kind of savings estimate for Relagate. Again to get to that four to one kind of savings estimate. Chris: So part of that goes, I think, in building that customer base, really focusing on strong relationships. Talk a little bit about that and what you've done, because it sounds like over the course of the various businesses, you've done a good job of creating some very good partnerships and alliances. What are some of the things you think that have helped you foster that and keep those for so many years? Steve: I think one is you know you got to under promise and over deliver. So if they're going to sign up, you know, don't make them look bad or stupid to their boss. The other one is identifying the influencers in the market. So I'm sure every industry has some individuals that are kind of on the bleeding edge, willing to try new things. And if they do and it works, they've got the microphone or the megaphone to tell a whole bunch of others. So fortunately for me, I've been able to identify who those influencers are. I've got a reputation for just delivering as promised. So when they sign up they have confidence and then they tell their peers and a lot of our sales in the large enterprise market are peer-to-peer networking. It's not from email campaigns or other stuff that we do. Chris: The kind of part of that, the old adage of just do what you say you committed to do when you said you committed to do it right. Steve: It's just delivering as promised. Don't sell me a can of goods and all this great wonderful thing. And then when the reality is just not there, you know, don't make them look stupid. You know that's the key one. I mean, these are after 40 years they become. We have some pretty tight relationships with these folks and I want them to keep their job and we want them all promoted and moving on to the next big role, because when that happens they just take us with them and we just keep getting bigger and bigger. Chris: So you mentioned that about kind of keeping this, your words, the band back together. You've been able to do that, hiring some of the right people and incentivizing the right way. Any insights into. You know what people could think about when they're looking at their team one, trying to, I guess, evaluate whether they have the right people and then finding the right ways to incentivize them to kind of keep that core group together. Steve: To me it's if they feel like they're a part of a team and they understand the value they're providing to the customer and they see that customer's appreciation. You know they're in the conversation with the client, you know, and that's easy to do at a small company, because who else are they going to talk to? Right, you got to bring the dev and engineering. But when you start layering and bifurcating and have people you know in engineering back there in the back room, kind of stuff that don't talk to clients, that's when it gets a lot harder. But when you get them into the conversation and that sense of this is my company, this is my reputation. I'm a part of something here, you know, that's growing and doing well and whatever. It's not that hard, it's really not that difficult at all. It's just everybody wants to be appreciated and feel like they're, you know, part of a team. So that's the formula, right, I mean I could throw money at them. But I ask my employees I mean I am not the guy that's writing big checks to hire people right? I'm like look, we're going to pay a reasonable salary. You know this is not, you're not going to be broke, but you know we're in it for the long term game, and so we want to keep the cash in the company so that we don't have to go do another capital raise which is going to dilute all of us, and so your equity just keeps getting smaller, you know, over time, and the guys that actually make the money, or the investors this needs to be a collaborative team effort so they get that. Chris: I think that transparent communications is key right. So they again they understand their role on the team, they understand what the goal of the organization is and how they can help further that. Steve: You know it's always been kind of fire slow, fire quick as well. You know the people, everybody makes hiring mistakes. It happens all the time. And you know when you hire someone within like a couple of days you're like this is not feeling right. You know, don't let it just sit, don't let it be two years later when you actually kind of work them out. You have to kind of pull the trigger fairly quick because it messes up the whole culture of the company. Oftentimes, especially at a small company, it can create some real problems. Chris: Yeah, I mean that may be the most sage advice and, I think, maybe the most consistent that I hear from entrepreneurs and business owners. It's been my own experience too, that that kind of fire, you know, don't be slow to fire when you know you made a mistake and it's the hardest, maybe one of the hardest ones to do because you're dealing with people. I spoke to someone yesterday and they were like hired, someone had some uncertainty and literally what I learned was to trust my gut because on day one that they started in a conversation went oh my God, this is a huge mistake. Tried to play it out, tried to make it work and guess what? It didn't. Steve: Yeah, the thing is I don't believe resumes anymore and I don't believe LinkedIn pages at all, especially when it comes to higher dev and engineering. It's just anybody can put whatever language they want and say they've got a ton of experience. You've got to figure out a way to validate Most of our hires. There's kind of referrals and peer-to-peer sort of networking. If I find someone, I can usually find someone they know, especially in the Dallas market where we are, that's worked with them at a prior company. That sort of thing and do some back-channel checking is what really pays off for us. And we know the rock stars. We know the rock stars. We know the rock stars, but they're not that hard to kind of pick out. It's the ones that are kind of questionable. That you know. You just got to do your homework and don't count on the resume. Chris: That's a really good point. It's a hard thing to do, though, and it may be easier in programmers. But, to you know, I totally agree with resumes, and profiles can be, you know, massaged, but it's sifting through and kind of through the smoke to really get to what's behind the curtain. Steve: Yeah, yeah, yeah, I mean. And Zoom calls, I mean people hire on Zoom calls or whatever. Like dude, you got to get them in the office face to face, go to lunch, have a couple of face to face interactions before you actually bring this person on board. You know, make them pass a coding test or something. You know something tangible. Don't just look, they're very nice people. You know they all have a. You know look great on a phone call or Zoom call, whatever, but that doesn't cut it. Chris: Yeah, I mean no substitute for personal interaction and seeing how people show up. Right. Steve: Yeah, the other thing is, since we're, you know, on a startup mode where everybody's looking at kind of the potential for equity, I'm like, look, if you're as great as you are, why don't you come on board for a month on a contract basis? Let's see how it works out, you know, and we'll go from there All right, and you really get a feel for someone and how well they're going to. We try it, we like to try it, before we buy. Let's put it that way. That's one way to do it. Chris: just talk about you know specific kind of leadership styles and and how you would describe your leadership style, and maybe how you would describe it today versus maybe 20 years ago as you you were emerging as a leader, and how you think it's changed oh, my god, it's night and day. Steve: so first company way back when. Maybe it comes as a surprise or not, but it was a coat and tie environment. Okay, guys, we've got to put on the ties and whatever. That was just so stupid. Checking office hours and all that crap and tracking vacation time just seems so silly. Now, if you can get the job done, I don't care what you wear, I don't care what you look like, I don't care what you wear, I don't care what you look like, I don't care where you do the work, I don't care if you have to take vacation on a pretty regular basis for whatever reason. I don't care if you're going off and disappearing to watch your kid play soccer, I do not care anymore. Just here's the job. Here's kind of an expectation. You know, as long as I understand, you're trying hard to get it done as quick as possible. We are good. You know, it's kind of a thing. So all that other stuff was just noise. That was just stupid, anyway it's. I mean back when I started in this, I mean programming and development and all that and the whole tech world was fairly new, so nobody knew what they were doing or how to manage these folks and it evolved over time, but fairly quickly. I mean, by company two, ties were gone. By company three, office was gone. I mean I've been virtual for 25 years. Unfortunately, we had offices but we just I think they were a waste of money but we did it for optics more than anything. Chris: Yeah, so it sounds like more kind of a traditional and somewhat of a command and control, starting out to now a little more, much more flexible and providing autonomy as long as people deliver on the expectations that they're communicated with. Steve: Which comes down to you just hire the right people, right, if you can get kind of get that sense for what the kind of folks that are going to do well. So, for example, if I see, if you can get kind of get that sense for what are the kind of folks that are going to do well. So, for example, if I see that you've got you spent 20 years at a really big company, you are not going to do well at a startup. I could guarantee you You're used to other people doing work for you. You know you're just kind of the sit back in your office and sort of you know, tell folks what to do. That ain't going to happen. You need to get your hands dirty. You might have to write code. You got to do PowerPoints, you got to do Word docs all that stuff yourself. Big company folks just tend to lose that ability, let's say, or it's beneath them and that's not going to work. Chris: Yeah, I mean it's almost. Yeah, that's not in my role. Mentality versus everything is in everyone's role. Mentality, right, it's almost. Yeah, that's not in my role. Mentality versus everything is in everyone's role. Mentality right, it's about getting a job done, no matter what it takes. Steve: And I think that drives me crazy at a big company because, you know, unfortunately for others, I tend to poke my nose into others' lanes and I get told a lot Steve, stay in your lane. Nothing bugs me more, you know, than to hear that. But that's the big company way. Chris: So you've gone through a few companies and you're now, I guess, inside of a larger company. Now Are you finding it easy to kind of have that mentality of flexible leadership and innovative environment? Steve: In the new company? Yes, I would have to say no, it's kind of as I expected. You know, with other acquisitions you start. You know, this kind of here's how it happens. However, embers, I believe, is trying hard to carve out a role where I can exist, let's put it that way. So my title right now is Chief Strategy Officer, and it's a bit nebulous, kind of by design. I can sort of make it what I want and as a result of being chief strategy officer, I can get outside of my lane and people can question it. I'm like everybody needs strategy. That's my title, I'm going to get in your lane, kind of stuff you know. So I tend to kind of bounce around to lots of different projects, objectives so on. I kind of help make sure that it's cohesive, you know, across this travel and expense story, you know. But at the same time I don't have a lot of direct reports, which is great. That usually doesn't go too well either. So so far, so good. Chris: Fingers crossed, that's great, yeah, we we kind of covered kind of the challenges of COVID If you think back prior to that, any other challenges along the way with the first two or three companies, everybody, yeah, yeah, I think people some of those are the best lessons we learned or some of the challenges we go through. I'm just curious to know any kind of lessons from a challenge that you could share with the listeners that might help them when they face something similar. Steve: Oh my God. I mean everybody's made mistakes and if they got lucky along the way and if they don't admit that they're lying, I mean some of the bigger ones. 9-11, we had a solution that was processing about 80% of all corporate travel reservations made in the US. 9-11 hit and we went to zero within about 24 hours, so that was kind of a gut check. Fortunately, travel bounced back fairly quickly, but it made us take a step back and realize how nimble we were If something like that were going to happen again. So that's one, and you know, and there's all the kind of day-to-day stuff. I mean there's fraud, there's employee HR issues that happen. You know there's. I'm not going to get into details on that, but you know you just kind of all right, let's deal with this. You know, don't just look the other way and take care of it. I think the latest I mean the big one right now is just, you know, the whole third party hacking and getting into your network and holding you hostage, stuff like that. You know that's made everybody just super anxious and nervous and to the point where companies are kind of shutting down their network so much that individuals can't do the job. You know, which is causing concern and it's what else are you going to do? I mean, if some employee can click on a link and bring down your network, do? Chris: you just turn off email. You're right, it's creating such a challenge. Everybody, all companies, are being attacked every day from all kinds of angles, and it just takes one and but you also? You can't operate out of fear and you can't let it stop you from doing your business. Steve: Well, they say there's two kinds of companies out there. There's those that have been hacked and those that don't know they've been hacked. So just kind of keep that in mind and I think it's fairly true. I think, you know, it's just almost too easy to get into someone's network and poke around and kind of see what's going on these days. Chris: It's so scary, but I thought you were going to say those who have been hacked and those that will be hacked, but I guess already have you, just don't know it. Well, see, I really loved hearing your story. It's a fascinating industry, and one that you don't really hear much about, but you definitely. It sounds like for 40 years you've been crushing it at it, so congratulations to that. Well, thanks for that. Steve: But also the one thing people don't know about corporate travel is that it sits on a backbone of legacy technology that's probably 40 years old. That has not changed. The GDSs are antiquated, the travel agency systems are antiquated. It's not that hard to come up with something innovative and new in this environment. So I just got lucky to where I got into it and I'm like this thing is so bad. I mean anything you do is going to be innovative. And so we just started coming up with new stuff solving clients' problems and it just kept evolving from there. Like this thing is so bad. I mean anything you do is going to be innovative. And so we just started coming up with new stuff solving clients' problems, and it just kept evolving from there. Chris: Yeah, that's really. You know so many entrepreneurs I've talked to. It's what you just said solving the customer or client's problem. Because what I said earlier, it goes back to asking the questions and listening and then trying to solve that problem. Steve: So many great ideas that come from that across so many industries. Yeah, and just to set up a little process to where you talk with your customers on a regular basis or a group of clients or people you trust and it just happens naturally, it's really not that difficult. Chris: Well, let's turn to a little bit on the lighter side before we wrap this up. I always like to ask people like yourself what was your first job? Steve: oh, my first job, let's see. Uh, I worked at a pet store at junior high. Well, actually first job was mowing yards, right? So everybody every kid did that just to get my allowance money. Then I worked at a pet store in junior high for a short period but fairly quickly realized waiting tables made a lot more money. So I told a guy I was 18, when actually I was 16, and they never really checked. They hired me as a waiter. I was actually kind of a part-time bartender, so I was serving liquor in Houston the strawberry patch I'll probably get them in trouble back when I was 16 years old and just made a ton of money as a, you know, a high schooler. So that was kind of the first. And then, you know, got into computers and writing code at a very early age. I was part of a program at Shell where they gave us mainframe time to go in and kind of play around and then went off to Baylor for computer science and then went to TI and then went to A&M for grad school. Very good, very good. Chris: So okay. So, being a native Texan, do you prefer Tex-Mex or barbecue? Steve: That is not a fair question, because both are pretty dang awesome, but, being in Texas, I think we've got some of the best barbecue on the planet. So Pecan Lodge here in Dallas is, I think, kind of the best, and there's a lot of Tex-Mex, though that's really good as well, yeah, I agree on all points. Chris: I haven't heard of Pecan Lodge before, so I'll have to check that one out. Steve: Yeah, it's in Deep Ellum, so next time you fly in, go in out of Love Field, and it's not too far, it's a 10-minute drive from there. Chris: Deal Noted. And then last thing is you know you've made early in the career, probably never did this and maybe have done since. But if you could take a 30 day sabbatical, where would you go and what would you do? Steve: I actually got a 30 day sabbatical. So a guy hired me or not hired me, but when he brought me on board to run a company he said hey, you know, I threw in there. Just, I read it in a magazine that it was the hot thing for techies to ask for, so I threw it in there and they accepted it. I guess they thought I'd never make it to my five-year anniversary. Anyway, I did and I took the kids and family, went all the way throughout through Europe. So we went to Italy, paris, france, austria, switzerland, whatever you know, just really unplugged for that 30 days. Actually it was a 90 day sabbatical. That's what I took. Wow, so I got a little bit more time. Yeah, it was great, it was great. So if that were to happen today, I'd probably look to do something similar, but nowadays if I want to take 90 days, I probably could just got to ask for it. Chris: Very good, very good. Well, steve, thanks again for taking the time to come on and love hearing your story and all the innovation you brought to the travel industry. Steve: All right. Well, thanks for having me, chris, I really enjoyed it. Good conversation. Chris: Thanks, well, we'll talk soon. Steve: Okay, you bet. Special Guest: Steve Reynolds.

We are running an end of year survey for our listeners. Let us know any feedback you have for us, what episodes resonated with you the most, and guest requests for 2024! RAG has emerged as one of the key pieces of the AI Engineer stack. Jerry from LlamaIndex called it a “hack”, Bryan from Hex compared it to “a recommendation system from LLMs”, and even LangChain started with it. RAG is crucial in any AI coding workflow. We talked about context quality for code in our Phind episode. Today's guests, Beyang Liu and Steve Yegge from SourceGraph, have been focused on code indexing and retrieval for over 15 years. We locked them in our new studio to record a 1.5 hours masterclass on the history of code search, retrieval interfaces for code, and how they get SOTA 30% completion acceptance rate in their Cody product by being better at the “bin packing problem” of LLM context generation. Google Grok → SourceGraph → CodyWhile at Google in 2008, Steve built Grok, which lives on today as Google Kythe. It allowed engineers to do code parsing and searching across different codebases and programming languages. (You might remember this blog post from Steve's time at Google) Beyang was an intern at Google at the same time, and Grok became the inspiration to start SourceGraph in 2013. The two didn't know eachother personally until Beyang brought Steve out of retirement 9 years later to join him as VP Engineering. Fast forward 10 years, SourceGraph has become to best code search tool out there and raised $223M along the way. Nine months ago, they open sourced SourceGraph Cody, their AI coding assistant. All their code indexing and search infrastructure allows them to get SOTA results by having better RAG than competitors:* Code completions as you type that achieve an industry-best Completion Acceptance Rate (CAR) as high as 30% using a context-enhanced open-source LLM (StarCoder)* Context-aware chat that provides the option of using GPT-4 Turbo, Claude 2, GPT-3.5 Turbo, Mistral 7x8B, or Claude Instant, with more model integrations planned* Doc and unit test generation, along with AI quick fixes for common coding errors* AI-enhanced natural language code search, powered by a hybrid dense/sparse vector search engine There are a few pieces of infrastructure that helped Cody achieve these results:Dense-sparse vector retrieval system For many people, RAG = vector similarity search, but there's a lot more that you can do to get the best possible results. From their release:"Sparse vector search" is a fancy name for keyword search that potentially incorporates LLMs for things like ranking and term expansion (e.g., "k8s" expands to "Kubernetes container orchestration", possibly weighted as in SPLADE): * Dense vector retrieval makes use of embeddings, the internal representation that LLMs use to represent text. Dense vector retrieval provides recall over a broader set of results that may have no exact keyword matches but are still semantically similar. * Sparse vector retrieval is very fast, human-understandable, and yields high recall of results that closely match the user query. * We've found the approaches to be complementary.There's a very good blog post by Pinecone on SPLADE for sparse vector search if you're interested in diving in. If you're building RAG applications in areas that have a lot of industry-specific nomenclature, acronyms, etc, this is a good approach to getting better results.SCIPIn 2016, Microsoft announced the Language Server Protocol (LSP) and the Language Server Index Format (LSIF). This protocol makes it easy for IDEs to get all the context they need from a codebase to get things like file search, references, “go to definition”, etc. SourceGraph developed SCIP, “a better code indexing format than LSIF”:* Simpler and More Efficient Format: SCIP utilizes Protobuf instead of JSON, which is used by LSIF. Protobuf is more space-efficient, simpler, and more suitable for systems programming. * Better Performance and Smaller Index Sizes: SCIP indexers, such as scip-clang, show enhanced performance and reduced index file sizes compared to LSIF indexers (10%-20% smaller)* Easier to Develop and Debug: SCIP's design, centered around human-readable string IDs for symbols, makes it faster and more straightforward to develop new language indexers. Having more efficient indexing is key to more performant RAG on code. Show Notes* Sourcegraph* Cody* Copilot vs Cody* Steve's Stanford seminar on Grok* Steve's blog* Grab* Fireworks* Peter Norvig* Noam Chomsky* Code search* Kelly Norton* Zoekt* v0.devSee also our past episodes on Cursor, Phind, Codeium and Codium as well as the GitHub Copilot keynote at AI Engineer Summit.Timestamps* [00:00:00] Intros & Backgrounds* [00:05:20] How Steve's work on Grok inspired SourceGraph for Beyang* [00:08:10] What's Cody?* [00:11:22] Comparison of coding assistants and the capabilities of Cody* [00:16:00] The importance of context (RAG) in AI coding tools* [00:21:33] The debate between Chomsky and Norvig approaches in AI* [00:30:06] Normsky: the Norvig + Chomsky models collision* [00:36:00] The death of the DSL?* [00:40:00] LSP, Skip, Kythe, BFG, and all that fun stuff* [00:53:00] The SourceGraph internal stack* [00:58:46] Building on open source models* [01:02:00] SourceGraph for engineering managers?* [01:12:00] Lightning RoundTranscriptAlessio: Hey everyone, welcome to the Latent Space podcast. This is Alessio, partner and CTO-in-Residence at Decibel Partners, and I'm joined by my co-host Swyx, founder of Smol AI. [00:00:16]Swyx: Hey, and today we're christening our new podcast studio in the Newton, and we have Beyang and Steve from Sourcegraph. Welcome. [00:00:25]Beyang: Hey, thanks for having us. [00:00:26]Swyx: So this has been a long time coming. I'm very excited to have you. We also are just celebrating the one year anniversary of ChatGPT yesterday, but also we'll be talking about the GA of Cody later on today. We'll just do a quick intros of both of you. Obviously, people can research you and check the show notes for more. Beyang, you worked in computer vision at Stanford and then you worked at Palantir. I did, yeah. You also interned at Google. [00:00:48]Beyang: I did back in the day where I get to use Steve's system, DevTool. [00:00:53]Swyx: Right. What was it called? [00:00:55]Beyang: It was called Grok. Well, the end user thing was Google Code Search. That's what everyone called it, or just like CS. But the brains of it were really the kind of like Trigram index and then Grok, which provided the reference graph. [00:01:07]Steve: Today it's called Kythe, the open source Google one. It's sort of like Grok v3. [00:01:11]Swyx: On your podcast, which you've had me on, you've interviewed a bunch of other code search developers, including the current developer of Kythe, right? [00:01:19]Beyang: No, we didn't have any Kythe people on, although we would love to if they're up for it. We had Kelly Norton, who built a similar system at Etsy, it's an open source project called Hound. We also had Han-Wen Nienhuys, who created Zoekt, which is, I think, heavily inspired by the Trigram index that powered Google's original code search and that we also now use at Sourcegraph. Yeah. [00:01:45]Swyx: So you teamed up with Quinn over 10 years ago to start Sourcegraph and you were indexing all code on the internet. And now you're in a perfect spot to create a code intelligence startup. Yeah, yeah. [00:01:56]Beyang: I guess the backstory was, I used Google Code Search while I was an intern. And then after I left that internship and worked elsewhere, it was the single dev tool that I missed the most. I felt like my job was just a lot more tedious and much more of a hassle without it. And so when Quinn and I started working together at Palantir, he had also used various code search engines in open source over the years. And it was just a pain point that we both felt, both working on code at Palantir and also working within Palantir's clients, which were a lot of Fortune 500 companies, large financial institutions, folks like that. And if anything, the pains they felt in dealing with large complex code bases made our pain points feel small by comparison. So that was really the impetus for starting Sourcegraph. [00:02:42]Swyx: Yeah, excellent. Steve, you famously worked at Amazon. And you've told many, many stories. I want every single listener of Latent Space to check out Steve's YouTube because he effectively had a podcast that you didn't tell anyone about or something. You just hit record and just went on a few rants. I'm always here for your Stevie rants. And then you moved to Google, where you also had some interesting thoughts on just the overall Google culture versus Amazon. You joined Grab as head of eng for a couple of years. I'm from Singapore, so I have actually personally used a lot of Grab's features. And it was very interesting to see you talk so highly of Grab's engineering and sort of overall prospects. [00:03:21]Steve: Because as a customer, it sucked? [00:03:22]Swyx: Yeah, no, it's just like, being from a smaller country, you never see anyone from our home country being on a global stage or talked about as a startup that people admire or look up to, like on the league that you, with all your legendary experience, would consider equivalent. Yeah. [00:03:41]Steve: Yeah, no, absolutely. They actually, they didn't even know that they were as good as they were, in a sense. They started hiring a bunch of people from Silicon Valley to come in and sort of like fix it. And we came in and we were like, Oh, we could have been a little better operational excellence and stuff. But by and large, they're really sharp. The only thing about Grab is that they get criticized a lot for being too westernized. Oh, by who? By Singaporeans who don't want to work there. [00:04:06]Swyx: Okay. I guess I'm biased because I'm here, but I don't see that as a problem. If anything, they've had their success because they were more westernized than the Sanders Singaporean tech company. [00:04:15]Steve: I mean, they had their success because they are laser focused. They copy to Amazon. I mean, they're executing really, really, really well for a giant. I was on a slack with 2,500 engineers. It was like this giant waterfall that you could dip your toe into. You'd never catch up. Actually, the AI summarizers would have been really helpful there. But yeah, no, I think Grab is successful because they're just out there with their sleeves rolled up, just making it happen. [00:04:43]Swyx: And for those who don't know, it's not just like Uber of Southeast Asia, it's also a super app. PayPal Plus. [00:04:48]Steve: Yeah. [00:04:49]Swyx: In the way that super apps don't exist in the West. It's one of the enduring mysteries of B2C that super apps work in the East and don't work in the West. We just don't understand it. [00:04:57]Beyang: Yeah. [00:04:58]Steve: It's just kind of curious. They didn't work in India either. And it was primarily because of bandwidth reasons and smaller phones. [00:05:03]Swyx: That should change now. It should. [00:05:05]Steve: And maybe we'll see a super app here. [00:05:08]Swyx: You retired-ish? I did. You retired-ish on your own video game? Mm-hmm. Any fun stories about that? And that's also where you discovered some need for code search, right? Mm-hmm. [00:05:16]Steve: Sure. A need for a lot of stuff. Better programming languages, better databases. Better everything. I mean, I started in like 95, right? Where there was kind of nothing. Yeah. Yeah. [00:05:24]Beyang: I just want to say, I remember when you first went to Grab because you wrote that blog post talking about why you were excited about it, about like the expanding Asian market. And our reaction was like, oh, man, how did we miss stealing it with you? [00:05:36]Swyx: Hiring you. [00:05:37]Beyang: Yeah. [00:05:38]Steve: I was like, miss that. [00:05:39]Swyx: Tell that story. So how did this happen? Right? So you were inspired by Grok. [00:05:44]Beyang: I guess the backstory from my point of view is I had used code search and Grok while at Google, but I didn't actually know that it was connected to you, Steve. I knew you from your blog posts, which were always excellent, kind of like inside, very thoughtful takes from an engineer's perspective on some of the challenges facing tech companies and tech culture and that sort of thing. But my first introduction to you within the context of code intelligence, code understanding was I watched a talk that you gave, I think at Stanford, about Grok when you're first building it. And that was very eye opening. I was like, oh, like that guy, like the guy who, you know, writes the extremely thoughtful ranty like blog posts also built that system. And so that's how I knew, you know, you were involved in that. And then, you know, we always wanted to hire you, but never knew quite how to approach you or, you know, get that conversation started. [00:06:34]Steve: Well, we got introduced by Max, right? Yeah. It was temporal. Yeah. Yeah. I mean, it was a no brainer. They called me up and I had noticed when Sourcegraph had come out. Of course, when they first came out, I had this dagger of jealousy stabbed through me piercingly, which I remember because I am not a jealous person by any means, ever. But boy, I was like, but I was kind of busy, right? And just one thing led to another. I got sucked back into the ads vortex and whatever. So thank God Sourcegraph actually kind of rescued me. [00:07:05]Swyx: Here's a chance to build DevTools. Yeah. [00:07:08]Steve: That's the best. DevTools are the best. [00:07:10]Swyx: Cool. Well, so that's the overall intro. I guess we can get into Cody. Is there anything else that like people should know about you before we get started? [00:07:18]Steve: I mean, everybody knows I'm a musician. I can juggle five balls. [00:07:24]Swyx: Five is good. Five is good. I've only ever managed three. [00:07:27]Steve: Five is hard. Yeah. And six, a little bit. [00:07:30]Swyx: Wow. [00:07:31]Beyang: That's impressive. [00:07:32]Alessio: So yeah, to jump into Sourcegraph, this has been a company 10 years in the making. And as Sean said, now you're at the right place. Phase two. Now, exactly. You spent 10 years collecting all this code, indexing, making it easy to surface it. Yeah. [00:07:47]Swyx: And also learning how to work with enterprises and having them trust you with their code bases. Yeah. [00:07:52]Alessio: Because initially you were only doing on-prem, right? Like a lot of like VPC deployments. [00:07:55]Beyang: So in the very early days, we're cloud only. But the first major customers we landed were all on-prem, self-hosted. And that was, I think, related to the nature of the problem that we're solving, which becomes just like a critical, unignorable pain point once you're above like 100 devs or so. [00:08:11]Alessio: Yeah. And now Cody is going to be GA by the time this releases. So congrats to your future self for launching this in two weeks. Can you give a quick overview of just what Cody is? I think everybody understands that it's a AI coding agent, but a lot of companies say they have a AI coding agent. So yeah, what does Cody do? How do people interface with it? [00:08:32]Beyang: Yeah. So how is it different from the like several dozen other AI coding agents that exist in the market now? When we thought about building a coding assistant that would do things like code generation and question answering about your code base, I think we came at it from the perspective of, you know, we've spent the past decade building the world's best code understanding engine for human developers, right? So like it's kind of your guide as a human dev if you want to go and dive into a large complex code base. And so our intuition was that a lot of the context that we're providing to human developers would also be useful context for AI developers to consume. And so in terms of the feature set, Cody is very similar to a lot of other assistants. It does inline autocompletion. It does code base aware chat. It does specific commands that automate, you know, tasks that you might rather not want to do like generating unit tests or adding detailed documentation. But we think the core differentiator is really the quality of the context, which is hard to kind of describe succinctly. It's a bit like saying, you know, what's the difference between Google and Alta Vista? There's not like a quick checkbox list of features that you can rattle off, but it really just comes down to all the attention and detail that we've paid to making that context work well and be high quality and fast for human devs. We're now kind of plugging into the AI coding assistant as well. Yeah. [00:09:53]Steve: I mean, just to add my own perspective on to what Beyang just described, RAG is kind of like a consultant that the LLM has available, right, that knows about your code. RAG provides basically a bridge to a lookup system for the LLM, right? Whereas fine tuning would be more like on the job training for somebody. If the LLM is a person, you know, and you send them to a new job and you do on the job training, that's what fine tuning is like, right? So tuned to our specific task. You're always going to need that expert, even if you get the on the job training, because the expert knows your particular code base, your task, right? That expert has to know your code. And there's a chicken and egg problem because, right, you know, we're like, well, I'm going to ask the LLM about my code, but first I have to explain it, right? It's this chicken and egg problem. That's where RAG comes in. And we have the best consultants, right? The best assistant who knows your code. And so when you sit down with Cody, right, what Beyang said earlier about going to Google and using code search and then starting to feel like without it, his job was super tedious. Once you start using these, do you guys use coding assistants? [00:10:53]Swyx: Yeah, right. [00:10:54]Steve: I mean, like we're getting to the point very quickly, right? Where you feel like almost like you're programming without the internet, right? Or something, you know, it's like you're programming back in the nineties without the coding assistant. Yeah. Hopefully that helps for people who have like no idea about coding systems, what they are. [00:11:09]Swyx: Yeah. [00:11:10]Alessio: I mean, going back to using them, we had a lot of them on the podcast already. We had Cursor, we have Codium and Codium, very similar names. [00:11:18]Swyx: Yeah. Find, and then of course there's Copilot. [00:11:22]Alessio: You had a Copilot versus Cody blog post, and I think it really shows the context improvement. So you had two examples that stuck with me. One was, what does this application do? And the Copilot answer was like, oh, it uses JavaScript and NPM and this. And it's like, but that's not what it does. You know, that's what it's built with. Versus Cody was like, oh, these are like the major functions. And like, these are the functionalities and things like that. And then the other one was, how do I start this up? And Copilot just said NPM start, even though there was like no start command in the package JSON, but you know, most collapse, right? Most projects use NPM start. So maybe this does too. How do you think about open source models? Because Copilot has their own private thing. And I think you guys use Starcoder, if I remember right. Yeah, that's correct. [00:12:09]Beyang: I think Copilot uses some variant of Codex. They're kind of cagey about it. I don't think they've like officially announced what model they use. [00:12:16]Swyx: And I think they use a range of models based on what you're doing. Yeah. [00:12:19]Beyang: So everyone uses a range of model. Like no one uses the same model for like inline completion versus like chat because the latency requirements for. Oh, okay. Well, there's fill in the middle. There's also like what the model's trained on. So like we actually had completions powered by Claude Instant for a while. And but you had to kind of like prompt hack your way to get it to output just the code and not like, hey, you know, here's the code you asked for, like that sort of text. So like everyone uses a range of models. We've kind of designed Cody to be like especially model, not agnostic, but like pluggable. So one of our kind of design considerations was like as the ecosystem evolves, we want to be able to integrate the best in class models, whether they're proprietary or open source into Cody because the pace of innovation in the space is just so quick. And I think that's been to our advantage. Like today, Cody uses Starcoder for inline completions. And with the benefit of the context that we provide, we actually show comparable completion acceptance rate metrics. It's kind of like the standard metric that folks use to evaluate inline completion quality. It's like if I show you a completion, what's the chance that you actually accept the completion versus you reject it? And so we're at par with Copilot, which is at the head of that industry right now. And we've been able to do that with the Starcoder model, which is open source and the benefit of the context fetching stuff that we provide. And of course, a lot of like prompt engineering and other stuff along the way. [00:13:40]Alessio: And Steve, you wrote a post called cheating is all you need about what you're building. And one of the points you made is that everybody's fighting on the same axis, which is better UI and the IDE, maybe like a better chat response. But data modes are kind of the most important thing. And you guys have like a 10 year old mode with all the data you've been collecting. How do you kind of think about what other companies are doing wrong, right? Like, why is nobody doing this in terms of like really focusing on RAG? I feel like you see so many people. Oh, we just got a new model. It's like a bit human eval. And it's like, well, but maybe like that's not what we should really be doing, you know? Like, do you think most people underestimate the importance of like the actual RAG in code? [00:14:21]Steve: I think that people weren't doing it much. It wasn't. It's kind of at the edges of AI. It's not in the center. I know that when ChatGPT launched, so within the last year, I've heard a lot of rumblings from inside of Google, right? Because they're undergoing a huge transformation to try to, you know, of course, get into the new world. And I heard that they told, you know, a bunch of teams to go and train their own models or fine tune their own models, right? [00:14:43]Swyx: Both. [00:14:43]Steve: And, you know, it was a s**t show. Nobody knew how to do it. They launched two coding assistants. One was called Code D with an EY. And then there was, I don't know what happened in that one. And then there's Duet, right? Google loves to compete with themselves, right? They do this all the time. And they had a paper on Duet like from a year ago. And they were doing exactly what Copilot was doing, which was just pulling in the local context, right? But fundamentally, I thought of this because we were talking about the splitting of the [00:15:10]Swyx: models. [00:15:10]Steve: In the early days, it was the LLM did everything. And then we realized that for certain use cases, like completions, that a different, smaller, faster model would be better. And that fragmentation of models, actually, we expected to continue and proliferate, right? Because we are fundamentally, we're a recommender engine right now. Yeah, we're recommending code to the LLM. We're saying, may I interest you in this code right here so that you can answer my question? [00:15:34]Swyx: Yeah? [00:15:34]Steve: And being good at recommender engine, I mean, who are the best recommenders, right? There's YouTube and Spotify and, you know, Amazon or whatever, right? Yeah. [00:15:41]Swyx: Yeah. [00:15:41]Steve: And they all have many, many, many, many, many models, right? For all fine-tuned for very specific, you know. And that's where we're heading in code, too. Absolutely. [00:15:50]Swyx: Yeah. [00:15:50]Alessio: We just did an episode we released on Wednesday, which we said RAG is like Rexis or like LLMs. You're basically just suggesting good content. [00:15:58]Swyx: It's like what? Recommendations. [00:15:59]Beyang: Recommendations. [00:16:00]Alessio: Oh, got it. [00:16:01]Steve: Yeah, yeah, yeah. [00:16:02]Swyx: So like the naive implementation of RAG is you embed everything, throw it in a vector database, you embed your query, and then you find the nearest neighbors, and that's your RAG. But actually, you need to rank it. And actually, you need to make sure there's sample diversity and that kind of stuff. And then you're like slowly gradient dissenting yourself towards rediscovering proper Rexis, which has been traditional ML for a long time. But like approaching it from an LLM perspective. Yeah. [00:16:24]Beyang: I almost think of it as like a generalized search problem because it's a lot of the same things. Like you want your layer one to have high recall and get all the potential things that could be relevant. And then there's typically like a layer two re-ranking mechanism that bumps up the precision and tries to get the relevant stuff to the top of the results list. [00:16:43]Swyx: Have you discovered that ranking matters a lot? Oh, yeah. So the context is that I think a lot of research shows that like one, context utilization matters based on model. Like GPT uses the top of the context window, and then apparently Claude uses the bottom better. And it's lossy in the middle. Yeah. So ranking matters. No, it really does. [00:17:01]Beyang: The skill with which models are able to take advantage of context is always going to be dependent on how that factors into the impact on the training loss. [00:17:10]Swyx: Right? [00:17:10]Beyang: So like if you want long context window models to work well, then you have to have a ton of data where it's like, here's like a billion lines of text. And I'm going to ask a question about like something that's like, you know, embedded deeply into it and like, give me the right answer. And unless you have that training set, then of course, you're going to have variability in terms of like where it attends to. And in most kind of like naturally occurring data, the thing that you're talking about right now, the thing I'm asking you about is going to be something that we talked about recently. [00:17:36]Swyx: Yeah. [00:17:36]Steve: Did you really just say gradient dissenting yourself? Actually, I love that it's entered the casual lexicon. Yeah, yeah, yeah. [00:17:44]Swyx: My favorite version of that is, you know, how we have to p-hack papers. So, you know, when you throw humans at the problem, that's called graduate student dissent. That's great. It's really awesome. [00:17:54]Alessio: I think the other interesting thing that you have is this inline assist UX that I wouldn't say async, but like it works while you can also do work. So you can ask Cody to make changes on a code block and you can still edit the same file at the same time. [00:18:07]Swyx: Yeah. [00:18:07]Alessio: How do you see that in the future? Like, do you see a lot of Cody's running together at the same time? Like, how do you validate also that they're not messing each other up as they make changes in the code? And maybe what are the limitations today? And what do you think about where the attack is going? [00:18:21]Steve: I want to start with a little history and then I'm going to turn it over to Bian, all right? So we actually had this feature in the very first launch back in June. Dominic wrote it. It was called nonstop Cody. And you could have multiple, basically, LLM requests in parallel modifying your source [00:18:37]Swyx: file. [00:18:37]Steve: And he wrote a bunch of code to handle all of the diffing logic. And you could see the regions of code that the LLM was going to change, right? And he was showing me demos of it. And it just felt like it was just a little before its time, you know? But a bunch of that stuff, that scaffolding was able to be reused for where we're inline [00:18:56]Swyx: sitting today. [00:18:56]Steve: How would you characterize it today? [00:18:58]Beyang: Yeah, so that interface has really evolved from a, like, hey, general purpose, like, request anything inline in the code and have the code update to really, like, targeted features, like, you know, fix the bug that exists at this line or request a very specific [00:19:13]Swyx: change. [00:19:13]Beyang: And the reason for that is, I think, the challenge that we ran into with inline fixes, and we do want to get to the point where you could just fire and forget and have, you know, half a dozen of these running in parallel. But I think we ran into the challenge early on that a lot of people are running into now when they're trying to construct agents, which is the reliability of, you know, working code generation is just not quite there yet in today's language models. And so that kind of constrains you to an interaction where the human is always, like, in the inner loop, like, checking the output of each response. And if you want that to work in a way where you can be asynchronous, you kind of have to constrain it to a domain where today's language models can generate reliable code well enough. So, you know, generating unit tests, that's, like, a well-constrained problem. Or fixing a bug that shows up as, like, a compiler error or a test error, that's a well-constrained problem. But the more general, like, hey, write me this class that does X, Y, and Z using the libraries that I have, that is not quite there yet, even with the benefit of really good context. Like, it definitely moves the needle a lot, but we're not quite there yet to the point where you can just fire and forget. And I actually think that this is something that people don't broadly appreciate yet, because I think that, like, everyone's chasing this dream of agentic execution. And if we're to really define that down, I think it implies a couple things. You have, like, a multi-step process where each step is fully automated. We don't have to have a human in the loop every time. And there's also kind of like an LM call at each stage or nearly every stage in that [00:20:45]Swyx: chain. [00:20:45]Beyang: Based on all the work that we've done, you know, with the inline interactions, with kind of like general Codyfeatures for implementing longer chains of thought, we're actually a little bit more bearish than the average, you know, AI hypefluencer out there on the feasibility of agents with purely kind of like transformer-based models. To your original question, like, the inline interactions with CODI, we actually constrained it to be more targeted, like, you know, fix the current error or make this quick fix. I think that that does differentiate us from a lot of the other tools on the market, because a lot of people are going after this, like, shnazzy, like, inline edit interaction, whereas I think where we've moved, and this is based on the user feedback that we've gotten, it's like that sort of thing, it demos well, but when you're actually coding day to day, you don't want to have, like, a long chat conversation inline with the code base. That's a waste of time. You'd rather just have it write the right thing and then move on with your life or not have to think about it. And that's what we're trying to work towards. [00:21:37]Steve: I mean, yeah, we're not going in the agent direction, right? I mean, I'll believe in agents when somebody shows me one that works. Yeah. Instead, we're working on, you know, sort of solidifying our strength, which is bringing the right context in. So new context sources, ways for you to plug in your own context, ways for you to control or influence the context, you know, the mixing that happens before the request goes out, etc. And there's just so much low-hanging fruit left in that space that, you know, agents seems like a little bit of a boondoggle. [00:22:03]Beyang: Just to dive into that a little bit further, like, I think, you know, at a very high level, what do people mean when they say agents? They really mean, like, greater automation, fully automated, like, the dream is, like, here's an issue, go implement that. And I don't have to think about it as a human. And I think we are working towards that. Like, that is the eventual goal. I think it's specifically the approach of, like, hey, can we have a transformer-based LM alone be the kind of, like, backbone or the orchestrator of these agentic flows? Where we're a little bit more bearish today. [00:22:31]Swyx: You want the human in the loop. [00:22:32]Beyang: I mean, you kind of have to. It's just a reality of the behavior of language models that are purely, like, transformer-based. And I think that's just like a reflection of reality. And I don't think people realize that yet. Because if you look at the way that a lot of other AI tools have implemented context fetching, for instance, like, you see this in the Copilot approach, where if you use, like, the at-workspace thing that supposedly provides, like, code-based level context, it has, like, an agentic approach where you kind of look at how it's behaving. And it feels like they're making multiple requests to the LM being like, what would you do in this case? Would you search for stuff? What sort of files would you gather? Go and read those files. And it's like a multi-hop step, so it takes a long while. It's also non-deterministic. Because any sort of, like, LM invocation, it's like a dice roll. And then at the end of the day, the context it fetches is not that good. Whereas our approach is just like, OK, let's do some code searches that make sense. And then maybe, like, crawl through the reference graph a little bit. That is fast. That doesn't require any sort of LM invocation at all. And we can pull in much better context, you know, very quickly. So it's faster. [00:23:37]Swyx: It's more reliable. [00:23:37]Beyang: It's deterministic. And it yields better context quality. And so that's what we think. We just don't think you should cargo cult or naively go like, you know, agents are the [00:23:46]Swyx: future. [00:23:46]Beyang: Let's just try to, like, implement agents on top of the LM that exists today. I think there are a couple of other technologies or approaches that need to be refined first before we can get into these kind of, like, multi-stage, fully automated workflows. [00:24:00]Swyx: It makes sense. You know, we're very much focused on developer inner loop right now. But you do see things eventually moving towards developer outer loop. Yeah. So would you basically say that they're tackling the agent's problem that you don't want to tackle? [00:24:11]Beyang: No, I would say at a high level, we are after maybe, like, the same high level problem, which is like, hey, I want some code written. I want to develop some software and can automate a system. Go build that software for me. I think the approaches might be different. So I think the analogy in my mind is, I think about, like, the AI chess players. Coding, in some senses, I mean, it's similar and dissimilar to chess. I think one question I ask is, like, do you think producing code is more difficult than playing chess or less difficult than playing chess? More. [00:24:41]Swyx: I think more. [00:24:41]Beyang: Right. And if you look at the best AI chess players, like, yes, you can use an LLM to play chess. Like, people have showed demos where it's like, oh, like, yeah, GPT-4 is actually a pretty decent, like, chess move suggester. Right. But you would never build, like, a best in class chess player off of GPT-4 alone. [00:24:57]Swyx: Right. [00:24:57]Beyang: Like, the way that people design chess players is that you have kind of like a search space and then you have a way to explore that search space efficiently. There's a bunch of search algorithms, essentially. We were doing tree search in various ways. And you can have heuristic functions, which might be powered by an LLM. [00:25:12]Swyx: Right. [00:25:12]Beyang: Like, you might use an LLM to generate proposals in that space that you can efficiently explore. But the backbone is still this kind of more formalized tree search based approach rather than the LLM itself. And so I think my high level intuition is that, like, the way that we get to more reliable multi-step workflows that do things beyond, you know, generate unit test, it's really going to be like a search based approach where you use an LLM as kind of like an advisor or a proposal function, sort of your heuristic function, like the ASTAR search algorithm. But it's probably not going to be the thing that is the backbone, because I guess it's not the right tool for that. Yeah. [00:25:50]Swyx: I can see yourself kind of thinking through this, but not saying the words, the sort of philosophical Peter Norvig type discussion. Maybe you want to sort of introduce that in software. Yeah, definitely. [00:25:59]Beyang: So your listeners are savvy. They're probably familiar with the classic like Chomsky versus Norvig debate. [00:26:04]Swyx: No, actually, I wanted, I was prompting you to introduce that. Oh, got it. [00:26:08]Beyang: So, I mean, if you look at the history of artificial intelligence, right, you know, it goes way back to, I don't know, it's probably as old as modern computers, like 50s, 60s, 70s. People are debating on like, what is the path to producing a sort of like general human level of intelligence? And kind of two schools of thought that emerged. One is the Norvig school of thought, which roughly speaking includes large language models, you know, regression, SVN, basically any model that you kind of like learn from data. And it's like data driven. Most of machine learning would fall under this umbrella. And that school of thought says like, you know, just learn from the data. That's the approach to reaching intelligence. And then the Chomsky approach is more things like compilers and parsers and formal systems. So basically like, let's think very carefully about how to construct a formal, precise system. And that will be the approach to how we build a truly intelligent system. I think Lisp was invented so that you could create like rules-based systems that you would call AI. As a language. Yeah. And for a long time, there was like this debate, like there's certain like AI research labs that were more like, you know, in the Chomsky camp and others that were more in the Norvig camp. It's a debate that rages on today. And I feel like the consensus right now is that, you know, Norvig definitely has the upper hand right now with the advent of LMs and diffusion models and all the other recent progress in machine learning. But the Chomsky-based stuff is still really useful in my view. I mean, it's like parsers, compilers, basically a lot of the stuff that provides really good context. It provides kind of like the knowledge graph backbone that you want to explore with your AI dev tool. Like that will come from kind of like Chomsky-based tools like compilers and parsers. It's a lot of what we've invested in in the past decade at Sourcegraph and what you build with Grok. Basically like these formal systems that construct these very precise knowledge graphs that are great context providers and great kind of guard rails enforcers and kind of like safety checkers for the output of a more kind of like data-driven, fuzzier system that uses like the Norvig-based models. [00:28:03]Steve: Jang was talking about this stuff like it happened in the middle ages. Like, okay, so when I was in college, I was in college learning Lisp and prologue and planning and all the deterministic Chomsky approaches to AI. And I was there when Norvig basically declared it dead. I was there 3,000 years ago when Norvig and Chomsky fought on the volcano. When did he declare it dead? [00:28:26]Swyx: What do you mean he declared it dead? [00:28:27]Steve: It was like late 90s. [00:28:29]Swyx: Yeah. [00:28:29]Steve: When I went to Google, Peter Norvig was already there. He had basically like, I forget exactly where. It was some, he's got so many famous short posts, you know, amazing. [00:28:38]Swyx: He had a famous talk, the unreasonable effectiveness of data. Yeah. [00:28:41]Steve: Maybe that was it. But at some point, basically, he basically convinced everybody that deterministic approaches had failed and that heuristic-based, you know, data-driven statistical approaches, stochastic were better. [00:28:52]Swyx: Yeah. [00:28:52]Steve: The primary reason I can tell you this, because I was there, was that, was that, well, the steam-powered engine, no. The reason was that the deterministic stuff didn't scale. [00:29:06]Swyx: Yeah. Right. [00:29:06]Steve: They're using prologue, man, constraint systems and stuff like that. Well, that was a long time ago, right? Today, actually, these Chomsky-style systems do scale. And that's, in fact, exactly what Sourcegraph has built. Yeah. And so we have a very unique, I love the framing that Bjong's made, that the marriage of the Chomsky and the Norvig, you know, sort of models, you know, conceptual models, because we, you know, we have both of them and they're both really important. And in fact, there, there's this really interesting, like, kind of overlap between them, right? Where like the AI or our graph or our search engine could potentially provide the right context for any given query, which is, of course, why ranking is important. But what we've really signed ourselves up for is an extraordinary amount of testing. [00:29:45]Swyx: Yeah. [00:29:45]Steve: Because in SWIGs, you were saying that, you know, GPT-4 tends to the front of the context window and maybe other LLMs to the back and maybe, maybe the LLM in the middle. [00:29:53]Swyx: Yeah. [00:29:53]Steve: And so that means that, you know, if we're actually like, you know, verifying whether we, you know, some change we've made has improved things, we're going to have to test putting it at the beginning of the window and at the end of the window, you know, and maybe make the right decision based on the LLM that you've chosen. Which some of our competitors, that's a problem that they don't have, but we meet you, you know, where you are. Yeah. And we're, just to finish, we're writing tens of thousands. We're generating tests, you know, fill in the middle type tests and things. And then using our graph to basically sort of fine tune Cody's behavior there. [00:30:20]Swyx: Yeah. [00:30:21]Beyang: I also want to add, like, I have like an internal pet name for this, like kind of hybrid architecture that I'm trying to make catch on. Maybe I'll just say it here. Just saying it publicly kind of makes it more real. But like, I call the architecture that we've developed the Normsky architecture. [00:30:36]Swyx: Yeah. [00:30:36]Beyang: I mean, it's obviously a portmanteau of Norvig and Chomsky, but the acronym, it stands for non-agentic, rapid, multi-source code intelligence. So non-agentic because... Rolls right off the tongue. And Normsky. But it's non-agentic in the sense that like, we're not trying to like pitch you on kind of like agent hype, right? Like it's the things it does are really just developer tools developers have been using for decades now, like parsers and really good search indexes and things like that. Rapid because we place an emphasis on speed. We don't want to sit there waiting for kind of like multiple LLM requests to return to complete a simple user request. Multi-source because we're thinking broadly about what pieces of information and knowledge are useful context. So obviously starting with things that you can search in your code base, and then you add in the reference graph, which kind of like allows you to crawl outward from those initial results. But then even beyond that, you know, sources of information, like there's a lot of knowledge that's embedded in docs, in PRDs or product specs, in your production logging system, in your chat, in your Slack channel, right? Like there's so much context is embedded there. And when you're a human developer, and you're trying to like be productive in your code base, you're going to go to all these different systems to collect the context that you need to figure out what code you need to write. And I don't think the AI developer will be any different. It will need to pull context from all these different sources. So we're thinking broadly about how to integrate these into Codi. We hope through kind of like an open protocol that like others can extend and implement. And this is something else that should be accessible by December 14th in kind of like a preview stage. But that's really about like broadening this notion of the code graph beyond your Git repository to all the other sources where technical knowledge and valuable context can live. [00:32:21]Steve: Yeah, it becomes an artifact graph, right? It can link into your logs and your wikis and any data source, right? [00:32:27]Alessio: How do you guys think about the importance of, it's almost like data pre-processing in a way, which is bring it all together, tie it together, make it ready. Any thoughts on how to actually make that good? Some of the innovation you guys have made. [00:32:40]Steve: We talk a lot about the context fetching, right? I mean, there's a lot of ways you could answer this question. But, you know, we've spent a lot of time just in this podcast here talking about context fetching. But stuffing the context into the window is, you know, the bin packing problem, right? Because the window is not big enough, and you've got more context than you can fit. You've got a ranker maybe. But what is that context? Is it a function that was returned by an embedding or a graph call or something? Do you need the whole function? Or do you just need, you know, the top part of the function, this expression here, right? You know, so that art, the golf game of trying to, you know, get each piece of context down into its smallest state, possibly even summarized by another model, right, before it even goes to the LLM, becomes this is the game that we're in, yeah? And so, you know, recursive summarization and all the other techniques that you got to use to like stuff stuff into that context window become, you know, critically important. And you have to test them across every configuration of models that you could possibly need. [00:33:32]Beyang: I think data preprocessing is probably the like unsexy, way underappreciated secret to a lot of the cool stuff that people are shipping today. Whether you're doing like RAG or fine tuning or pre-training, like the preprocessing step matters so much because it's basically garbage in, garbage out, right? Like if you're feeding in garbage to the model, then it's going to output garbage. Concretely, you know, for code RAG, if you're not doing some sort of like preprocessing that takes advantage of a parser and is able to like extract the key components of a particular file of code, you know, separate the function signature from the body, from the doc string, what are you even doing? Like that's like table stakes. It opens up so much more possibilities with which you can kind of like tune your system to take advantage of the signals that come from those different parts of the code. Like we've had a tool, you know, since computers were invented that understands the structure of source code to a hundred percent precision. The compiler knows everything there is to know about the code in terms of like structure. Like why would you not want to use that in a system that's trying to generate code, answer questions about code? You shouldn't throw that out the window just because now we have really good, you know, data-driven models that can do other things. [00:34:44]Steve: Yeah. When I called it a data moat, you know, in my cheating post, a lot of people were confused, you know, because data moat sort of sounds like data lake because there's data and water and stuff. I don't know. And so they thought that we were sitting on this giant mountain of data that we had collected, but that's not what our data moat is. It's really a data pre-processing engine that can very quickly and scalably, like basically dissect your entire code base in a very small, fine-grained, you know, semantic unit and then serve it up. Yeah. And so it's really, it's not a data moat. It's a data pre-processing moat, I guess. [00:35:15]Beyang: Yeah. If anything, we're like hypersensitive to customer data privacy requirements. So it's not like we've taken a bunch of private data and like, you know, trained a generally available model. In fact, exactly the opposite. A lot of our customers are choosing Cody over Copilot and other competitors because we have an explicit guarantee that we don't do any of that. And that we've done that from day one. Yeah. I think that's a very real concern in today's day and age, because like if your proprietary IP finds its way into the training set of any model, it's very easy both to like extract that knowledge from the model and also use it to, you know, build systems that kind of work on top of the institutional knowledge that you've built up. [00:35:52]Alessio: About a year ago, I wrote a post on LLMs for developers. And one of the points I had was maybe the depth of like the DSL. I spent most of my career writing Ruby and I love Ruby. It's so nice to use, but you know, it's not as performant, but it's really easy to read, right? And then you look at other languages, maybe they're faster, but like they're more verbose, you know? And when you think about efficiency of the context window, that actually matters. [00:36:15]Swyx: Yeah. [00:36:15]Alessio: But I haven't really seen a DSL for models, you know? I haven't seen like code being optimized to like be easier to put in a model context. And it seems like your pre-processing is kind of doing that. Do you see in the future, like the way we think about the DSL and APIs and kind of like service interfaces be more focused on being context friendly, where it's like maybe it's harder to read for the human, but like the human is never going to write it anyway. We were talking on the Hacks podcast. There are like some data science things like spin up the spandex, like humans are never going to write again because the models can just do very easily. Yeah, curious to hear your thoughts. [00:36:51]Steve: Well, so DSLs, they involve, you know, writing a grammar and a parser and they're like little languages, right? We do them that way because, you know, we need them to compile and humans need to be able to read them and so on. The LLMs don't need that level of structure. You can throw any pile of crap at them, you know, more or less unstructured and they'll deal with it. So I think that's why a DSL hasn't emerged for sort of like communicating with the LLM or packaging up the context or anything. Maybe it will at some point, right? We've got, you know, tagging of context and things like that that are sort of peeking into DSL territory, right? But your point on do users, you know, do people have to learn DSLs like regular expressions or, you know, pick your favorite, right? XPath. I think you're absolutely right that the LLMs are really, really good at that. And I think you're going to see a lot less of people having to slave away learning these things. They just have to know the broad capabilities and the LLM will take care of the rest. [00:37:42]Swyx: Yeah, I'd agree with that. [00:37:43]Beyang: I think basically like the value profit of DSL is that it makes it easier to work with a lower level language, but at the expense of introducing an abstraction layer. And in many cases today, you know, without the benefit of AI cogeneration, like that totally worth it, right? With the benefit of AI cogeneration, I mean, I don't think all DSLs will go away. I think there's still, you know, places where that trade-off is going to be worthwhile. But it's kind of like how much of source code do you think is going to be generated through natural language prompting in the future? Because in a way, like any programming language is just a DSL on top of assembly, right? And so if people can do that, then yeah, like maybe for a large portion of the code [00:38:21]Swyx: that's written, [00:38:21]Beyang: people don't actually have to understand the DSL that is Ruby or Python or basically any other programming language that exists. [00:38:28]Steve: I mean, seriously, do you guys ever write SQL queries now without using a model of some sort? At least a draft. [00:38:34]Swyx: Yeah, right. [00:38:36]Steve: And so we have kind of like, you know, past that bridge, right? [00:38:39]Alessio: Yeah, I think like to me, the long-term thing is like, is there ever going to be, you don't actually see the code, you know? It's like, hey, the basic thing is like, hey, I need a function to some two numbers and that's it. I don't need you to generate the code. [00:38:53]Steve: And the following question, do you need the engineer or the paycheck? [00:38:56]Swyx: I mean, right? [00:38:58]Alessio: That's kind of the agent's discussion in a way where like you cannot automate the agents, but like slowly you're getting more of the atomic units of the work kind of like done. I kind of think of it as like, you know, [00:39:09]Beyang: do you need a punch card operator to answer that for you? And so like, I think we're still going to have people in the role of a software engineer, but the portion of time they spend on these kinds of like low-level, tedious tasks versus the higher level, more creative tasks is going to shift. [00:39:23]Steve: No, I haven't used punch cards. [00:39:25]Swyx: Yeah, I've been talking about like, so we kind of made this podcast about the sort of rise of the AI engineer. And like the first step is the AI enhanced engineer. That is that software developer that is no longer doing these routine, boilerplate-y type tasks, because they're just enhanced by tools like yours. So you mentioned OpenCodeGraph. I mean, that is a kind of DSL maybe, and because we're releasing this as you go GA, you hope for other people to take advantage of that? [00:39:52]Beyang: Oh yeah, I would say so OpenCodeGraph is not a DSL. It's more of a protocol. It's basically like, hey, if you want to make your system, whether it's, you know, chat or logging or whatever accessible to an AI developer tool like Cody, here's kind of like the schema by which you can provide that context and offer hints. So I would, you know, comparisons like LSP obviously did this for kind of like standard code intelligence. It's kind of like a lingua franca for providing fine references and codefinition. There's kind of like analogs to that. There might be also analogs to kind of the original OpenAI, kind of like plugins, API. There's all this like context out there that might be useful for an LM-based system to consume. And so at a high level, what we're trying to do is define a common language for context providers to provide context to other tools in the software development lifecycle. Yeah. Do you have any critiques of LSP, by the way, [00:40:42]Swyx: since like this is very much, very close to home? [00:40:45]Steve: One of the authors wrote a really good critique recently. Yeah. I don't think I saw that. Yeah, yeah. LSP could have been better. It just came out a couple of weeks ago. It was a good article. [00:40:54]Beyang: Yeah. I think LSP is great. Like for what it did for the developer ecosystem, it was absolutely fantastic. Like nowadays, like it's much easier now to get code navigation up and running in a bunch of editors by speaking this protocol. I think maybe the interesting question is like looking at the different design decisions comparing LSP basically with Kythe. Because Kythe has more of a... How would you describe it? [00:41:18]Steve: A storage format. [00:41:20]Beyang: I think the critique of LSP from a Kythe point of view would be like with LSP, you don't actually have an actual symbolic model of the code. It's not like LSP models like, hey, this function calls this other function. LSP is all like range-based. Like, hey, your cursor's at line 32, column 1. [00:41:35]Swyx: Yeah. [00:41:35]Beyang: And that's the thing you feed into the language server. And then it's like, okay, here's the range that you should jump to if you click on that range. So it kind of is intentionally ignorant of the fact that there's a thing called a reference underneath your cursor, and that's linked to a symbol definition. [00:41:49]Steve: Well, actually, that's the worst example you could have used. You're right. But that's the one thing that it actually did bake in is following references. [00:41:56]Swyx: Sure. [00:41:56]Steve: But it's sort of hardwired. [00:41:58]Swyx: Yeah. [00:41:58]Steve: Whereas Kythe attempts to model [00:42:00]Beyang: like all these things explicitly. [00:42:02]Swyx: And so... [00:42:02]Steve: Well, so LSP is a protocol, right? And so Google's internal protocol is gRPC-based. And it's a different approach than LSP. It's basically you make a heavy query to the back end, and you get a lot of data back, and then you render the whole page, you know? So we've looked at LSP, and we think that it's a little long in the tooth, right? I mean, it's a great protocol, lots and lots of support for it. But we need to push into the domain of exposing the intelligence through the protocol. Yeah. [00:42:29]Beyang: And so I would say we've developed a protocol of our own called Skip, which is at a very high level trying to take some of the good ideas from LSP and from Kythe and merge that into a system that in the near term is useful for Sourcegraph, but I think in the long term, we hope will be useful for the ecosystem. Okay, so here's what LSP did well. LSP, by virtue of being like intentionally dumb, dumb in air quotes, because I'm not like ragging on it, allowed language servers developers to kind of like bypass the hard problem of like modeling language semantics precisely. So like if all you want to do is jump to definition, you don't have to come up with like a universally unique naming scheme for each symbol, which is actually quite challenging because you have to think about like, okay, what's the top scope of this name? Is it the source code repository? Is it the package? Does it depend on like what package server you're fetching this from? Like whether it's the public one or the one inside your... Anyways, like naming is hard, right? And by just going from kind of like a location to location based approach, you basically just like throw that out the window. All I care about is jumping definition, just make that work. And you can make that work without having to deal with like all the complex global naming things. The limitation of that approach is that it's harder to build on top of that to build like a true knowledge graph. Like if you actually want a system that says like, okay, here's the web of functions and here's how they reference each other. And I want to incorporate that like semantic model of how the code operates or how the code relates to each other at like a static level. You can't do that with LSP because you have to deal with line ranges. And like concretely the pain point that we found in using LSP for source graph is like in order to do like a find references [00:44:04]Swyx: and then jump definitions, [00:44:04]Beyang: it's like a multi-hop process because like you have to jump to the range and then you have to find the symbol at that range. And it just adds a lot of latency and complexity of these operations where as a human, you're like, well, this thing clearly references this other thing. Why can't you just jump me to that? And I think that's the thing that Kaith does well. But then I think the issue that Kaith has had with adoption is because it is more sophisticated schema, I think. And so there's basically more things that you have to implement to get like a Kaith implementation up and running. I hope I'm not like, correct me if I'm wrong about any of this. [00:44:35]Steve: 100%, 100%. Kaith also has a problem, all these systems have the problem, even skip, or at least the way that we implemented the indexers, that they have to integrate with your build system in order to build that knowledge graph, right? Because you have to basically compile the code in a special mode to generate artifacts instead of binaries. And I would say, by the way, earlier I was saying that XREFs were in LSP, but it's actually, I was thinking of LSP plus LSIF. [00:44:58]Swyx: Yeah. That's another. [00:45:01]Steve: Which is actually bad. We can say that it's bad, right? [00:45:04]Steve: It's like skip or Kaith, it's supposed to be sort of a model serialization, you know, for the code graph, but it basically just does what LSP needs, the bare minimum. LSIF is basically if you took LSP [00:45:16]Beyang: and turned that into a serialization format. So like you build an index for language servers to kind of like quickly bootstrap from cold start. But it's a graph model [00:45:23]Steve: with all of the inconvenience of the API without an actual graph. And so, yeah. [00:45:29]Beyang: So like one of the things that we try to do with skip is try to capture the best of both worlds. So like make it easy to write an indexer, make the schema simple, but also model some of the more symbolic characteristics of the code that would allow us to essentially construct this knowledge graph that we can then make useful for both the human developer through SourceGraph and through the AI developer through Cody. [00:45:49]Steve: So anyway, just to finish off the graph comment, we've got a new graph, yeah, that's skip based. We call it BFG internally, right? It's a beautiful something graph. A big friendly graph. [00:46:00]Swyx: A big friendly graph. [00:46:01]Beyang: It's a blazing fast. [00:46:02]Steve: Blazing fast. [00:46:03]Swyx: Blazing fast graph. [00:46:04]Steve: And it is blazing fast, actually. It's really, really interesting. I should probably have to do a blog post about it to walk you through exactly how they're doing it. Oh, please. But it's a very AI-like iterative, you know, experimentation sort of approach. We're building a code graph based on all of our 10 years of knowledge about building code graphs, yeah? But we're building it quickly with zero configuration, and it doesn't have to integrate with your build. And through some magic tricks that we have. And so what just happens when you install the plugin, that it'll be there and indexing your code and providing that knowledge graph in the background without all that build system integration. This is a bit of secret sauce that we haven't really like advertised it very much lately. But I am super excited about it because what they do is they say, all right, you know, let's tackle function parameters today. Cody's not doing a very good job of completing function call arguments or function parameters in the definition, right? Yeah, we generate those thousands of tests, and then we can actually reuse those tests for the AI context as well. So fortunately, things are kind of converging on, we have, you know, half a dozen really, really good context sources, and we mix them all together. So anyway, BFG, you're going to hear more about it probably in the holidays? [00:47:12]Beyang: I think it'll be online for December 14th. We'll probably mention it. BFG is probably not the public name we're going to go with. I think we might call it like Graph Context or something like that. [00:47:20]Steve: We're officially calling it BFG. [00:47:22]Swyx: You heard it here first. [00:47:24]Beyang: BFG is just kind of like the working name. And so the impetus for BFG was like, if you look at like current AI inline code completion tools and the errors that they make, a lot of the errors that they make, even in kind of like the easy, like single line case, are essentially like type errors, right? Like you're trying to complete a function call and it suggests a variable that you defined earlier, but that variable is the wrong type. [00:47:47]Swyx: And that's the sort of thing [00:47:47]Beyang: where it's like a first year, like freshman CS student would not make that error, right? So like, why does the AI make that error? And the reason is, I mean, the AI is just suggesting things that are plausible without the context of the types or any other like broader files in the code. And so the kind of intuition here is like, why don't we just do the basic thing that like any baseline intelligent human developer would do, which is like click jump to definition, click some fine references and pull in that like Graph Context into the context window and then have it generate the completion. So like that's sort of like the MVP of what BFG was. And turns out that works really well. Like you can eliminate a lot of type errors that AI coding tools make just by pulling in that context. Yeah, but the graph is definitely [00:48:32]Steve: our Chomsky side. [00:48:33]Swyx: Yeah, exactly. [00:48:34]Beyang: So like this like Chomsky-Norvig thing, I think pops up in a bunch of differ

Rose Plate Special: Charity, Week 9 Here's what we'll say about the finale: Kudos to the producers for faking out Sammi fairly effectively, but is it even a fakeout when she was operating on little sleep and lots of pinball on the brain? Hard to say. See you all for a bonus episode of Jilly Box opening before Season 16 of our podcast launches at the end of September! Transcription Please forgive minor typos! Sammi: And you're listening to Rose Plate Special, the most dramatic googly eyeingist I have nothing for this because everything we said. Steve: Was going to happen, happened. Sammi: Paradise promoing us recap podcast of The Bachelorette ever. Sammi: Yeah, it was so bad. Steve: Ever. Steve: Sammi. Steve: Are you the bachelorette? Steve: Nostradamus perhaps. Sammi: Maybe. Sammi: But here's the thing that's interesting. Sammi: So first of all, sorry this is late everyone. Sammi: I was on vacation and I actually took a break, which I never do, and so you should all be proud of me. Sammi: But here we are also. Sammi: Okay, so a couple of pieces of news. Sammi: So yes, I was on vacation and that was fun. Sammi: That's not really news. Sammi: Second piece of news that is news. Sammi: The jilly box is coming probably in the next day or two. Sammi: So if you are interested, we can do another special we'll do between now and like The Golden Bachelor. Sammi: We can do a special jilly unboxing for. Sammi: Oh, and then yeah, here's what's interesting about this. Sammi: Also, my notes are a little spotty, so I may need you to fill in because I watched this. Sammi: So I was just telling Steve that one of the things that we did on vacation is we went to this retrocade and we played all you can play Pinball until like, I don't know, almost two in the morning. Sammi: And we got home and we started talking about the top 100 pinball games and we were talking about what we would want in our basement and blah, blah, blah, blah, blah. Sammi: And then I was like, oh s***, I got to start watching The Bachelorete in case we decide we want to record. Sammi: So I went to bed at four in the morning. Sammi: This is not like me. Steve: And we're recording late anyways. Sammi: Yeah, I was up until four in the morning watching it and then I woke up the next day and finished it. Sammi: So I might have missed some key things because I was all jacked up about pinball. Sammi: Like I literally had maybe two drinks the whole night. Sammi: It wasn't like, oh, it's partying hard. Sammi: I was like really trying to crack the game. Sammi: Barbed wire. Sammi: Could not get it. Sammi: Oh wow, not get it. Sammi: But medieval madness. Sammi: I had a really good round. Sammi: Yeah, it's one of my favorites. Sammi: Anyway, so that's what I was doing when I was taking notes. Sammi: But yeah, so what's interesting though is despite knowing everything that happened, they tricked me. Sammi: I got tricked because I was like, oh my God, maybe it is going to be Joey. Sammi: And I was like, wow, everything I thought was wrong. Sammi: And I was like so shocked. Sammi: And I was like, no way. Sammi: So they fooled me hard. Sammi: I really just was like, oh, this is how everyone's leaning and this is what's going to happen. Sammi: And last week I was like, datten is a sure thing, he is a sure thing. Sammi: And then I was like, I'm just not so sure. Steve: So we've been in this game long enough. Steve: Sammi, this is the trickery. Steve: Because they knew that we knew that to was going to run away with this thing, so they had to throw us some swerves. Sammi: I got so fooled. Steve: Well, one thing's for sure, because this episode starts off on Aaron, nobody in the entire universe thought that Aaron was going to be sticking don. Steve: I don't think they do Vegas odds for the Bachelor or the Bachelorete. Steve: But if they did, you wouldn't even be allowed to bet on Aaron because that's how bad of a shot he. Sammi: So yeah, it was just so basically and also they do this thing at the very beginning and, like, dawn gets claps and Joey gets claps and Aaron got nothing. Steve: No, and it's not because he's a bad guy. Steve: He's the most uninteresting man in the world. Sammi: They were just did something. Sammi: Did you just say Aaron? Sammi: Oh, I missed it. Sammi: I was thinking about something. Sammi: So and then when they're like, we're going to do a thing that's never happened. Sammi: Okay, this was my guess, which I think is funny. Sammi: Like Charity's brother is going to come on and propose to a long term partner on the show. Sammi: But that didn't happen. Sammi: But that's what I thought because I was like, bring nehemiah back. Sammi: But that's not what happened. Sammi: So this is the best part, too, is Aaron. Sammi: So she's like, obviously this is what was going through Charity's mind. Sammi: I'm thinking is she was probably like, he came all the way to Fiji. Sammi: What am I going to do, say go home? Sammi: She's like, I have to make it feel like he has somewhat of a shot or like something could happen. Sammi: But I love that she was like, this is giving me acid reflux. Steve: Yeah, it's like, bro, you flew probably like 14 hours just to get dumped, which is real sad. Steve: And if someone in production had half a heart, they would have told you to stay at home, but they didn't. Steve: And then it's also sad because it's like, I mean, we all knew you had to know deep down that she didn't have a shot. Steve: And then when she's finally and you know, she walks about and everything, he's just like, well, it's okay. Steve: I'm still in your corner. Steve: It's like, dude, she doesn't need you and you don't need to be here. Steve: What are you doing here? Steve: What's going on, Aaron? Sammi: Come on. Steve: Come on. Steve: I don't know. Steve: And then he's such a dork and not in the fun way. Steve: It's just uninteresting. Steve: And then he's going to be on paradise and I could not find a shred of anything inside of myself that got excited for Aaron on. Sammi: Feel like I feel like you just like Aaron a lot more than I do. Sammi: But I just felt really bad for like I was just I mean, maybe this was something that raised his stock enough to make it worth it for him to be on paradise. Sammi: It gave him more of a story that's something that some of the women on the beach might be like, wow, that's so romantic. Sammi: You flew all the way to Fiji. Sammi: It could work in his favor, for sure. Sammi: But yeah, I was mean, I don't know. Sammi: And then he was like, the emotions I've always felt it's good to feel again. Sammi: And I was like, it's been like two days, Aaron. Sammi: I mean, it's not like it's been so long. Sammi: It's like maybe been a couple days. Sammi: But the best part about this whole thing was they get to the rose ceremony and Joey's like, am I on drugs? Sammi: He's like, blinking. Sammi: I don't have glasses to clean. Sammi: What's happening? Sammi: Wait, Aaron's here and Xavier isn't? Sammi: It was so sweet that he was like, what? Sammi: I don't even know. Sammi: And then as soon as she gave Joey a rose, I was like, well, Erin is going home because obviously Dotton's getting the other one. Sammi: That was really obvious. Sammi: And then she's like, Erin, can you come with me? Sammi: And he knew. Sammi: Then he's like, okay, yeah, Aaron is. Steve: In the top three because technically you have to have a top three. Steve: So what are you going to do? Sammi: I don't know. Sammi: I guess at the end I feel like at the end that we've had it before, where it's just like two of them, where one of them goes home early and then it's just the two of them at the rose ceremony. Sammi: It's like, well, you both get the roses. Sammi: No drama there. Sammi: Goodbye. Sammi: Yeah, but yeah, so that was inevitable. Sammi: It was just inevitable. Sammi: All my notes about Erin talking with Jesse afterwards were just that it was a generic talk and he's going to be in paradise. Sammi: And when they announced he was in paradise, I was like, that means he's not the bachelor. Sammi: And that's good. Sammi: Yeah, because that wouldn't be interesting unless they gave him his own camera. Sammi: Because I do think his insecurities would be interesting to watch. Sammi: His internal monologue would be interesting to watch. Sammi: But now we get the time with Charity's family and Joey is first. Sammi: And Joey had a terrible hometown date. Sammi: I mean, it wasn't like the worst hometown date, but it was just like awkward and lacking and he had the worst out of the four. Steve: I shouldn't say it was a B minus. Steve: It was not like a colossal faceplant like in the past. Steve: And many a man has gotten farther or as far as Joey with a worse hometown, but it was not yeah, yeah. Sammi: It just was like, oh, wow. Sammi: And so of course, then, so what's interesting is what I'm trying to say is Joey's hometown date was not very good. Sammi: But with Charity's family, it was like, he's the one and he's the best one, and don't let him slip away. Sammi: He's perfect. Sammi: And then, you know, Dalton's hometown, it was like, you are our family now. Sammi: You are stuck with us. Sammi: You two are soulmates. Sammi: This is happening. Sammi: And then yeah, it's like I can't really talk about this without comparing these right away. Sammi: But then Dalton's time with Charity's family was just kind of like I don't know, I mean like he's fine or whatever. Sammi: He's just familiar and he's just kind of like who she always goes for. Steve: And that's interesting too. Sammi: We want to see her shake it up a little bit. Sammi: And I was like, is this really the time to be like rolling the dice? Sammi: I don't know, it was just kind of a weird yeah, anyway just try. Steve: To commit to marriage. Steve: Yeah right. Steve: But like I don't like I like Joey. Steve: I don't think he's particularly interesting but he's a very nice young man. Sammi: I think he's very sweet. Steve: Yeah, but the thing that really stuck out to me, Dotton also very sweet guy. Sammi: Oh yeah. Steve: But when Charity was know, both these guys meet with her parents and they like both of them but they like Joey Moore. Steve: And her mom made the comment that Dotton was kind of like the guy she had dated in the past. Steve: Which is weird because she said that about Xavier. Steve: And I feel like in my head, aside from them being like African American men in their mid to late twenty s, I don't see a lot of similarities between Xavier. Sammi: They're very different I will say. Sammi: I mean they both have interest in the health fields. Sammi: I guess that would be a commonality but Dotton's coming at it from more of a coachee integrative health personal trainer. Steve: And that kind of an interest. Steve: It doesn't really inform their vibes or their personality. Sammi: Personalities are very different. Sammi: But that's the only other thing that at least what I could see. Sammi: They have that in common. Sammi: But Xavier's in a lab and datten's more like with so that's very mean. Sammi: Like their families were pretty mean. Sammi: I just don't get the think and maybe I could be wrong. Sammi: I don't feel like dunn's one of those go out with the boys kind of guys like oh well, if I'm out with my boys and something like I just would be surprised if he but I was surprised when Xavier said it, so who the h*** knows. Sammi: But I just don't get that feeling from him that that's something that's super important to him to be out with a bunch of toxic dudes. Sammi: I don't that's but it could just be know a first impression thing where it's like oh, this seems similar or whatever because Joey is so different that it's just like that's the only way she could compare it. Sammi: I have no like it's like who knows? Sammi: But I think they're both really good dudes. Sammi: But it was interesting and even though it's like I know what happens with production and editing and how they choose the stuff and whatever but still even though I know all that and I've been watching this show for 20 plus years, I was still like, oh, no, this is not good. Sammi: And I was like, maybe Danton's not as good as I thought he was. Sammi: Because also last week we were thrown for a loop. Sammi: So I was like, oh, maybe all the things that I was feeling about how good they were together are wrong. Sammi: And then they, of course, did stuff where it's like she's saying I love you to Joey, and then Dotton says I love you to her and she doesn't say it back, and you're like, oh, God. Sammi: Oh, no, what's happening? Sammi: This is so bad. Steve: I like a season designed around just, like, emotionally messing with basically well, that's how I felt. Sammi: I was like, what is going on? Sammi: And it's like, late at night and I'm tired and I'm watching this episode and I'm like, what is happening? Sammi: And then, yeah, gosh. Sammi: I don't mean I will say because I feel like the other thing that Charity's mom seemed to focus on was just like, how Joey is just googly eyed all the time. Sammi: But I feel like his I don't think he would ever be like, he is affectionate and whatever, but he's more like, I don't know, kind of secure and solid and whatever. Sammi: So I think the way they just look at someone they're interested in is different. Sammi: But anyway, it was an interesting juxtaposition, and I wrote wow a lot on my notes, apparently. Sammi: I'm like, wow, family thinks he's the one. Steve: Wow. Sammi: Okay. Sammi: And then this whole thing is, like, interspersed with this whole oh, well, one of you is going to date the bachelor, but you don't know which one of you it is. Sammi: But we invited you all here, so it's one of the people we invited here. Sammi: It's obviously not going to be some random person from the audience. Steve: Yeah. Sammi: And I was like, everybody stand up if you would like to date the Bachelor, like, what the h***? Sammi: This is not how this works. Sammi: And he interviews all these people. Sammi: This was one thing that I thought was weird, and I was trying to find some conversation about it online, and I could not because they had someone from Oahu get interviewed. Sammi: Right. Sammi: And Joey lives in Hawaii and everything and everything that happened in Lahaina. Sammi: Which happened in my family's neighborhood. Sammi: And luckily their house is still okay, but I don't know if they even know if some of their friends are alive. Sammi: It was very strange that they didn't did I miss it? Sammi: Because I'm like, I was tired and I did not watch this live. Sammi: They didn't say anything about what happened in Lahaina. Sammi: Did they? Sammi: I mean, I know it's a different island, but a lot of people got moved to, um, for safety and because of capacity and all that stuff. Sammi: And I was like, this is strange. Sammi: This is live. Sammi: So this already happened. Steve: Yeah. Steve: That you'd think that they would make some mention of it. Steve: Now, it was really entirely possible that I got up to get another slice of pizza or grab a drink or go to the bathroom or whatever. Steve: I have zero recollection of them saying anything. Steve: So if they said it, it wasn't a prominent point in the episode. Sammi: It was just weird that they focused so much on Oahu and where Joey's living, right? Sammi: Like, it's just so strange. Sammi: And I'm confused that they didn't mention anything. Sammi: And I feel like they've gotten better about stuff like that, where it's like, oh, this is something, even if the conversation is a little put on, where they're like, we're going to have a serious talk, and then they kind of talk about something, then they're like, we're glad we had this serious talk. Sammi: But I was like, this is weird that you're focusing extra on it, that you're bringing in somebody to be on the show who lives on Oahu, and then you don't bring it. Sammi: I don't know. Sammi: Anyway, if anybody else feels the same way, let me know. Sammi: But I thought that was OD. Sammi: That's all. Sammi: Totally. Sammi: Not that I think The Bachelor is great for that stuff in general, but it's like if you want to start changing your image and gearing towards a younger audience, you might want to, I don't know, be in touch with reality anyway, especially something like that, where it's. Steve: Like the thing dominating the news cycle. Steve: It's like, hey, you want an easy layup? Steve: Guys just say anything? Steve: Apparently not. Sammi: Oh, well, yeah, it's just really strange. Sammi: Anyway, I'll let you know if I find any conversations about it. Sammi: But I was, like, trying to Google it. Sammi: I was like, is anybody else frustrated about this? Sammi: But I didn't see anything. Sammi: But I also wasn't looking super duper hard. Sammi: I was looking half. Sammi: So charity's, mom. Sammi: Okay, so with datten yes. Sammi: She's like, he checks the boxes, right? Sammi: He's familiar. Sammi: Familiar is easy. Sammi: She wants Charity to have a hard time, I guess I don't. Sammi: And I wrote, well, maybe Joey Winston dotten's the obvious Bachelor, but that wouldn't necessarily make sense. Sammi: Dot, dot, dot. Sammi: I'm like, this is where I start to question myself. Sammi: Yeah, and Charity is having a hard time, too, because she's like, I just want to push. Sammi: I just want a little just a little nudge and like, a direct just tell me how you're feeling. Sammi: And, okay, this is the part where I felt like I was getting tired and I was getting confused, but I know at the very least, she asked her mom, tell me what you think. Sammi: And her mom's like, I'm not going to do that. Sammi: And she's like, why? Sammi: And she's like, I don't know. Sammi: I'm direct. Sammi: And she's like, but you're not being direct right now. Sammi: That's what I gathered out of it. Sammi: It was like her mom was like, well, you know, I'm direct, but I'm not going to do that for you at this moment. Steve: Yeah. Sammi: And she's like, don't you know what you want? Sammi: And Charity is like, no, that's why I am asking you. Sammi: And she's like, come on, you know. Sammi: Right. Sammi: You know, you know, she's like and then yeah. Sammi: So she goes so she's confused, whatever. Sammi: She has a date with Joey and he brought a very cute gift for Charity. Sammi: They both did a good job with the gifts. Sammi: And he gives her the poem that they got in New Orleans and that's very oh, she mentioned how the poem made the hairs on her arms stand up and they made the hairs on my arm stand up too. Sammi: So whoever's putting this season together, good job. Sammi: I was like, wow. Sammi: And then I was fully sold on at this point. Sammi: I was like, well, if Joey ends up with Charity, I'm okay with that. Sammi: That's good, I'm happy, that's fine. Steve: This is totally mission accomplished, right? Steve: What is the purpose of this episode? Steve: The purpose of this episode is twofold. Steve: One, to make us question what we know to be absolute reality, which is down, it's going to win. Steve: And two, to make us like Joey as much as humanly possible and potentially make him slightly more interesting than he is. Steve: So that when he is announced as the bachelor, we go, okay, I'm fine with that. Steve: I think they pretty much did it. Steve: And honestly, I don't know when Charity was announced. Steve: I'm sure you can go back to an old episode. Steve: I'll just be like, I don't know, no personality, didn't see anything, whatever. Steve: And she's amazing. Steve: She's like the greatest Bachelorete of all time, practically. Steve: Maybe, maybe this will work out. Steve: Maybe I've been selling Joey short. Sammi: Yeah, I mean that's what always I mean outside of like I feel like I always liked Katie before it was Katie's season, you know what mean? Sammi: Like that was kind of an obvious, like Ashley long time. Sammi: Like there's a few people that and I liked, you know, there's like a few people that I was always like, oh yeah, they're going to be good. Sammi: But there's some people we didn't see until the very end. Sammi: Their know, you get like little glimpses of, um, yeah, I think Joey could definitely be a good mean out of what happened. Sammi: Like everything that happened at the end, I was like, well, he's the only obvious choice. Sammi: Like if you don't choose him, you're going into a different season. Sammi: There's no way. Sammi: And anyway, I'm just like looking through the vulture recap to see if there's anything yeah, if there's any notes in there because I just saw something. Sammi: Sorry. Sammi: We're waiting to see if she's going to pick Joey or Don. Sammi: Right. Sammi: We obviously know what uh, and then we get into the then. Sammi: So Brooklyn and Kat are going to be in paradise and Braden's in the audience and they do this paradise promo and they're like four former bachelorettes are crashing the party. Sammi: There's a medical emergency I'm actually really excited about the nine days of no pooping. Steve: Yeah. Steve: I'm also excited about that because we got to hear the word poop baby. Sammi: On national television and a truth box. Sammi: I'm like, all right, okay, cool. Sammi: This sounds great. Sammi: And then there's someone getting married in paradise, and it's probably like an already engaged couple that comes down, like, has happened before, I would assume. Sammi: And then they're like, oh, are Rachel and Brayden going to get together? Sammi: And I got very upset. Sammi: Oh, my God, you better not. Sammi: That sucks. Sammi: And I was looking through this Vulture recap. Sammi: It says, Brayden is here sitting right next to Rachel rechia. Sammi: Get a job. Sammi: Stay away from her et. Sammi: Wait, hold on. Sammi: Wait, what? Sammi: Hold on 1 second. Sammi: Oh, my gosh. Sammi: How did I not know who Gabby was dating? Steve: Oh, yeah, so oh, my is this is something that I was hoping to bring up? Steve: Because I guess I'm dense and I didn't really understand or process or notice it, but it's like, oh, Gabby's dating a woman. Steve: I didn't know that. Sammi: H***. Sammi: Yeah. Sammi: Gabby. Steve: Good job, Gabby. Sammi: Yes. Steve: We love I had I had no idea. Steve: And then I was just like, who's that? Steve: I was, oh, that's so cute. Sammi: And she even posted, told you I'm a girls girl. Sammi: Yes. Sammi: Gabby ayo so that's awesome. Sammi: And now I want to rewatch the finale because I was tired and I did not even oh, apparently. Sammi: Okay, so she was on The View, and in an Instagram post yeah. Sammi: She wrote, told you I'm a girls girl. Sammi: And yeah. Sammi: So it's Robbie Hoffman. Steve: He's a comedian, right? Sammi: Yes. Sammi: Comedians. Sammi: You should know, apparently. Sammi: And yeah, this was announced on August 2, but I didn't see it because I don't pay attention to this stuff. Sammi: But that's super great. Sammi: And yeah, I'm so happy. Sammi: So one of the things that this Vulture article talks about is, uh, they wanted to see, like, a Robbie cam the whole time, mic her up and then let's the whole the whole gimmick of, like, who's the bachelor and who's going to date him. Sammi: And also, maybe Rachel likes Braden. Sammi: I was like, I can't handle all this stuff right now, okay? Sammi: I'm tired, and I want to know what's in that truth box, and I want to talk more about that poop baby. Sammi: Those are the things I want to talk about. Steve: Yeah. Steve: Very interested in a poop baby. Sammi: Yeah. Sammi: And then we find out. Sammi: September 20. Sammi: Eigth. Sammi: We're going to be playing double duty, so I don't know what we're going to do. Sammi: We'll have to see if we want to do extra long episodes or two separate Bachelor in paradise and Golden Bachelor episodes. Steve: We're going to figure it out. Sammi: We'll have to figure it out. Sammi: Stay tuned. Sammi: I'm thinking we'll do each one because some people might be interested in one and not the other. Sammi: Otherwise, we'll do, like, a little time stampy in the description. Sammi: So stay tuned for that, obviously. Sammi: Let's see. Sammi: Okay, so we have the last date with Don, and he's so sweet, and it was so cute, and he was like, I'm going to win over your mom. Sammi: Just don't even worry about it. Sammi: And it's like, he's a great guy. Sammi: He can definitely win over moms, so I totally believe that. Sammi: And his gift was very cute. Sammi: He was like, I made a treasure hunt, so how about that? Sammi: And I was like, that's pretty cute. Sammi: And he was like, here's my card, my resident alien card, like the s'mores and little memories of events that they did on their dates. Sammi: And then at the end, it was a locket with their baby faces. Sammi: And he's like, you are my treasure. Sammi: And that was very then. Sammi: But the thing that's weird is we see her. Sammi: Yeah, they really freaking tricked me because she's, like, bringing up Joey on this date, and he says, I love you, and she doesn't say it back. Sammi: And I was like, okay. Sammi: Then we get the Neil Lane scene, which wasn't like, that excessive this time. Sammi: Sometimes it's like, really long Neil Lane stuff. Steve: It's always weird to me because I feel like sometimes we get a lot of Neil Lane the man, and not just Neil Lane, the know, and other times you don't see Neil at. Steve: And this this was a Neil appearance season. Sammi: Yeah, it was a Neil appearance, but it was not as major. Sammi: I mean, usually I would say with The Bachelor, Neil is around more, but he was in the audience. Steve: It's just so funny to me because I'm sure in the jewelry world, he's a big deal, but if you're like, who's Neil Lane? Steve: I'm like, oh, that's the guy who gives the rings on The Bachelor. Sammi: I actually think that is the biggest deal. Sammi: Well, I think but I don't know. Sammi: Let's see if we can figure this out. Sammi: Hold on. Sammi: I feel like I looked this up before, and it was kind of like I thought that that was kind of the biggest thing. Sammi: I thought his name recognition did get bigger because of The Bachelor, and that propelled some of his career. Sammi: Oh, here we go. Sammi: Here we go. Sammi: Okay. Sammi: Reddit is all over. Steve: Always. Sammi: Yeah. Sammi: But yeah, okay. Sammi: Apparently oh, interesting. Sammi: He turned them down for a while, and he doesn't watch The Bachelor, which I think we found out recently that he didn't watch The Bachelor, which I think is very funny. Sammi: So it's like his only frame of reference is getting flown in for these moments and these live appearances, and that's it. Sammi: And he doesn't watch the show. Sammi: That's kind of awesome. Sammi: Yeah. Sammi: So someone said, okay, yeah, I think it's kind of like a Vera Wang type of thing at this point, you. Steve: Know what I mean? Sammi: Where it's like there is a prestige brand and then you can also go to Kohl's. Steve: Exactly. Sammi: You know what I mean? Sammi: I think it was kind of like and yeah, someone said, I went into Kate and his rings are ugly. Sammi: Lol. Sammi: I'm sorry. Sammi: Yeah, it's like, if you're going to get Neil Lane from K, I would assume that that's not the same as the other stuff he yeah, yeah. Steve: I would imagine he's got his higher tier stuff. Steve: I like the Vera Wang comparison. Sammi: That's the way I kind of always thought about Neil Lane. Sammi: And from these comments on Reddit, that's the impression I'm getting. Sammi: As I say about Kay, every kiss begins at the mall. Sammi: Yeah. Sammi: And apparently oh, gosh, I didn't even realize that. Sammi: So this was like 2009. Sammi: Neil Lane feels so omnipresent that I did not realize it's only been Neil Lane for like, 14 years. Steve: Wow. Sammi: Yeah. Steve: Before that he was day one guy. Sammi: I know. Sammi: Before that it was Harry Winston. Sammi: Sorry. Sammi: There's a comment on Reddit that says, in the industry, neil Lane is considered to be a little goblin character. Sammi: And someone said, how so? Sammi: And then there's like some deleted stuff, so I don't know about that. Sammi: Anyway, yeah, someone said, okay, yeah. Sammi: Neil Lane for Celebs is high end. Sammi: Neil Lane at K is mediocre. Sammi: Yeah, same as Verawing. Sammi: I would yeah. Sammi: Very interesting. Sammi: He used to design customs for A list celebrities like Barbara Streisand, Elizabeth Taylor, and Angelina Jolie. Sammi: Interesting. Sammi: He's like mid tier, they say. Steve: Oh, man. Steve: You hear that? Steve: Neil Lane. Steve: You're just mid, baby. Sammi: You're mid. Sammi: You're mid, Neil. Sammi: Well, he's never going to listen to this. Sammi: He doesn't watch the show. Sammi: He's not going to listen to a random sorry, Neil, but yeah. Sammi: So very interesting. Sammi: Yeah. Sammi: So we had a Neil Lane scene, and then Charity comes out in her dress and I started tearing up. Sammi: So again, I was tired, but I don't know, this finale really did a number on me. Sammi: And then she started to cry or almost cried. Sammi: And I was like, don't cry. Sammi: Your makeup's so pretty. Sammi: And then as soon as Joey gets out of the car, my stomach dropped and so do the audiences. Sammi: And I was like, you tricked me. Sammi: You tricked me, you tricked me. Sammi: And I was like, well, he's going to be a great bachelor. Sammi: And I cried so much during this whole interaction. Sammi: It was awful. Sammi: I was like, not okay. Steve: So emotion. Sammi: Yeah. Sammi: The dogs came over. Sammi: They were like, do you need some support? Sammi: And I was like, I am not. Sammi: And like, Tuck was sleeping, obviously. Sammi: Well, this was like yeah, because this was in the morning by the time I watched this. Sammi: But he was like, in the other room with the dogs, and I'm like, crying. Sammi: And they come over and they're like, what do you need, mom? Sammi: And I was like, I am just not okay. Sammi: But what was really sweet was she did not cut him off, which was nice because I feel like a lot of the times the bacheloretes cut the men off. Sammi: Don't propose yet, but he kind of waited for a second anyway, like, should I keep going? Sammi: And then she did a little I thought it was nice that she had a speech for him because I don't feel like they always do that or it doesn't feel prepared or whatever. Sammi: And he was just like, It's okay. Sammi: He knew it was hard, and she's trying to get all this out, and she's upset. Sammi: And he was like, It's okay. Sammi: And she's like, Well, I got to do this. Sammi: I want to do the whole thing. Sammi: I want you to hear this whole thing. Sammi: It's important to me. Sammi: And then she's like, I found love that's deeper with someone else, and I'm crying. Sammi: I think she wins for the best goodbye speech ever to yeah, I was just, like, a f** mess. Sammi: And then Joey's in the audience, and then he gives the best bachelor audition in the car, and the audience is silent, and I'm just is really this is really great. Sammi: I don't know. Sammi: That whole moment was really awesome. Sammi: And then Zach's in the right, so, like, they go through this whole thing. Sammi: Like, Joey leaves, he's in the car, whatever, and at some point they pan to Zach, and I'm like, God, both of these guys are so much better than Zach. Sammi: And so really, there wasn't a bad direction for her to go, I don't think. Sammi: It's like she's just got to decide how she feels, and she's got to make that choice, which is always nice. Steve: Too, because sometimes I'm like, no, not him, and this time you're good. Steve: Anybody's fine. Steve: Well, not Aaron. Steve: And even Aaron. Steve: There's nothing wrong with him. Sammi: With Aaron. Sammi: If she liked Aaron the most, I'd be like, that's fine. Steve: That's okay. Steve: Some people have no taste, but that's all you. Steve: You do. Steve: You it's not harmful. Sammi: That just reminded me of I don't know why. Sammi: I'm, like, thinking about classic York. Sammi: Like, even Louis Vuitton makes so Joey is going to see Charity now. Sammi: He gives his little spiel with Jessie. Sammi: It's like all kind of the normal the. Sammi: I've done a lot of thinking and healing, and I'm on the other side, and I understand, and I just love and support her, and I just want her to be happy and blah, blah, blah, blah, blah. Sammi: And this is, like one of the most amicable reuniting moments, too, that I remember on the show, where it's just like, she looks sparkly and beautiful, and he's, like, giving her the biggest hug, and it was really sweet. Sammi: And he's still kind of, you can tell, emotional about it. Sammi: He's getting all twisty faced about it. Sammi: He's like, AW, shucks OD golly g whiz whatever. Sammi: They made him very likable. Sammi: They did a really good job because I was, like, a mess, and it was good, and then it's like, okay, now it's time for Dotton. Sammi: And I was so emotional about the Joey thing. Sammi: I was just kind of like, well, I knew this was going to happen, they tricked me, now I feel indignant and this all turned out just fine. Sammi: I think what it is, is they are both very comfortable with each other and that's like what you need for a normal relationship. Sammi: You should feel very comfortable with each other. Sammi: And so I think the familiarity is good here. Sammi: And it didn't feel like this with her and Joey. Sammi: I feel like it's a little more I don't know, there was more chemistry and an explosive exciting way. Sammi: But with her and Datten, it just feels very safe and comfortable in a very good way. Sammi: That's important. Steve: Yeah, she made the right call and it's the difference between maybe a sprint and a marathon here. Steve: And it's not to say that both these men would have provided her with plenty of happiness, but I think Datten is probably the better choice for something that you see as a long term relationship. Steve: And Charity was super smart about it and she dumped Joey in the best way possible. Steve: I don't know how she does it. Steve: It exceeds even the abilities of the editing on The Bachelor and the just she's got it down. Sammi: She handled everything perfectly the whole season. Sammi: I feel like we've watched so many seasons of Bachelors and Bacheloretes kind of like step in it and yeah, not a single flub. Sammi: Perfect season. Steve: It's kind of mind boggling, too, because it can be so stressful and emotional and god, breakups are f** messy. Steve: They're so messy. Steve: And the fact that she was able to not only every single guy leading up to Joey and those are probably easier because some of those guys were you get you get down to Joey who is a man that you could probably marry and probably be pretty happy with and to just let him down like that, it was like a master class. Steve: It was incredible. Steve: Never seen anything like ten out of ten. Sammi: Charity, yeah, she's extremely emotionally mature. Sammi: This is obvious, we know this. Sammi: And yeah, she did awesome. Sammi: Chef's kiss. Sammi: What a great season. Sammi: Very happy about it. Sammi: I thought it was really cute at the end that they showed that she was standing on a box. Sammi: I thought that was adorable. Sammi: I love little behind the scenes things like that. Sammi: And she's like, yeah, love just makes you so happy. Sammi: You get taller and then they just show the box. Sammi: I was like, that's adorable. Sammi: They're just very cute together. Sammi: And yeah, he can keep her safe from lizards or whatever. Sammi: It's good. Sammi: And his family is like, that's like winning the Jackpot. Sammi: They're a really cool family. Sammi: That's one of the best families I've ever seen be on the show. Sammi: And his mom being someone who's really hard to win over and going, yeah, you're my family now. Sammi: And Grandma being like, these two are joined at the soul, or whatever the h*** she said. Sammi: I'm like, yeah, I mean, I just feel like you can't get better than that. Sammi: As long as you like the family and you like him, you're in. Sammi: That's very easy. Sammi: Then some life coach started talking, and I was like, oh, god, I need food. Sammi: I need breakfast, because it was late in the day, and I just did not want to hear this. Sammi: Life coach chuck. Sammi: And then this was like one of the people. Sammi: I was like, are you going to date the bears? Sammi: And then mom we get to see charity's mom, and they're like, okay, how are you feeling? Sammi: She's like, I'm happy now. Sammi: Yeah, he's good. Sammi: I like him. Sammi: He's pretty good. Sammi: Or was. Sammi: She wasn't like, oh, my god, he's the like, yeah, I really like him. Sammi: I think at some point and again, I was tired. Sammi: Didn't we see Danton's family and his mom in the audience getting emotional over everything? Steve: I thought this audience was they were put through the wringer. Steve: I'm pretty sure they were there, too, but yeah, everyone was super emotion, including datten's people. Sammi: I was so emotional, I just stopped paying attention. Sammi: Yeah, it was so then and then she shows off her find that, personally, this is just personal. Sammi: I find the rings kind of boring. Sammi: They're just like one big rock. Sammi: Okay. Sammi: But I'm glad she likes it. Sammi: Okay. Sammi: This was interesting. Sammi: Do you think they're going to shoot the golden bachelor different the whole time? Sammi: Do you think the style of shooting is going to be different? Sammi: Because did you notice how soft they made it and the camera work was all different. Sammi: Is it just for the promo, you think, or what do you think? Steve: I think that is just for the promo, but it definitely has a softer, different look to it. Steve: It's almost like soap opera esque in its presentation, which I guess is appropriate. Steve: It is somewhat reminiscent of very early seasons of the bachelor. Steve: So if you go back to the first three seasons yeah. Sammi: Where it's like a little more like romanticy. Steve: Yeah. Steve: And I don't know if that is intentional or if I'm just like my brain has been permanently poisoned by watching the show for so many years. Steve: But I think based on the previews alone, it looks like it's going to have a slightly different aesthetic, and I am perfectly fine and open with that. Steve: Because if there's one thing that you can criticize about the Bachelor and honestly don't make it one thing, make it a million things, because there's plenty. Steve: But if there's one thing you can consistently criticize, is that they recycle the same ideas and visual cues and everything over and over and over and over again, so anything that can push them out of their comfort zone. Steve: And I do think that old people are going to help with this because, oh, my god, the kinds of problems and emotional issues and things that they're going to have to deal with are going to be totally different from the normal crap that comes up on the bachelor to bachelorette. Steve: And when it's not different, when it's like, oh, and so and so has an 80 year old husband back home, that's going to be even funnier and crazier, so bring it on. Steve: I'm here for it, whatever it is. Sammi: So and so has an 80 year old husband back home. Sammi: I like that idea. Sammi: Yeah. Sammi: I'm kind of wondering if it's going to be messy in any way or if it is just going to be kind of like sweet and sentimental the whole time. Steve: I hope not. Sammi: I know you hope not, but I'm just kind of like not totally sure anymore. Sammi: Yeah. Sammi: I'm interested to see what happens. Sammi: We don't have to wait super long. Sammi: We've got about a month and you'll hear from us at least one time in between then. Sammi: Do you think they're going to let the dog stay with him? Sammi: Because that dog is obsessed. Sammi: That was the cutest dog. Sammi: Oh, my god, don't tell me. Steve: In my heart, yes, but in reality, I think they're probably going to have. Sammi: To say no because who had their dog? Sammi: One of the bachelorettes, right. Sammi: Had their dog with them or bachelors. Steve: It just seems like a nightmare, like all the traveling they do and it's just stressful for the dog, too. Sammi: I think it was just domestic. Sammi: Do you remember wait, hold on. Sammi: Okay, let's see. Sammi: Golly, I don't remember. Sammi: There was one now. Sammi: I just found the rambo thing, but yeah, there was one where it was like, oh, my dog came with me. Sammi: Do you remember talking about anyway, whatever. Steve: Well, rachel lindsay's dog cooper appeared alongside her on the Bachelorete season 13. Sammi: I just tried to that's what it was. Sammi: Okay. Sammi: God, I mean, so much happened on rachel's season. Sammi: I forgot it was yeah. Sammi: Oh, my gosh. Steve: I had tried to forget rambo dog guy, but unfortunately rambo dog guy has now been brought back into my memory bank. Steve: So thank you, Sammi. Sammi: Yeah, I think it was just local, right? Sammi: It was just like when they were in the states, the dog was there, so I was just like, maybe that would be a thing that would happen again. Sammi: Because that was very cute and I really liked that. Sammi: That's all. Sammi: And then, okay, so there's no set date. Sammi: So we see charity and Dotton and of mean, I don't think there's ever at least I don't remember in the history of the show them being like, oh, and it's probably, are joe and serena married yet? Sammi: Because otherwise they'll be the ones I. Steve: Don'T know if they're married, but they did a commercial for concealer or something together. Sammi: They've been doing that a lot. Sammi: Yeah. Sammi: Mark my words, they're going to be the couple in paradise that gets married. Steve: It seems. Steve: So their star is rising. Steve: Grocery store joe is the international commercial superstar. Steve: Honestly, grocery store joe, you're acting in these commercials. Steve: You got speaking lines. Steve: Are you SAG brother? Steve: Like, should you be on the picket line? Steve: Maybe, I don't know. Sammi: Oh, interesting. Sammi: Didn't think about that. Sammi: Anyway, so yeah, I think they're going to get married in paradise. Sammi: That's my I don't I can't remember any time where they're like, oh, yeah, we have a set know. Sammi: But they're like, we're enjoying the season of our she's going they're going to Greece. Sammi: She's always wanted to go to Greece. Sammi: And so she's going to get to go to Greece, which is sweet. Sammi: And then she's also going to be on Dancing with the Stars, which is like not shocking but cool. Sammi: And then Joey gets announced as the new bachelor and we kind of knew that. Sammi: And the first woman that we meet who lives on Oahu or well, she moved to La. Sammi: But she's from Oahu. Sammi: She's joining Joey. Sammi: And then yeah, so they're excited. Sammi: But then she gets an envelope. Sammi: It's not a date card, but we don't know what it is until night one. Sammi: And that's as much surprise as they can know because Jesse is like, well, you've never seen anything like this. Sammi: And I'm like, this is like a pretty normal season. Sammi: But you were like, we're going to give you a trip so we can say it was a surprise. Sammi: We're not going to tell you about Dancing with the Stars until here. Sammi: So it's a surprise. Sammi: Charity has got to be getting tired of surprises at this point because they also surprise her with a Bachelorete. Steve: Remember that's the theme for her series. Sammi: She's like, okay, here it goes. Steve: Boys under pressure. Steve: The charity story. Sammi: Yeah. Sammi: I mean, for real. Sammi: She's like always handles surprises well but I don't know if she actually likes them. Sammi: We'll see. Sammi: Okay, let's see. Sammi: I'm looking through to see if there's anything else I missed. Sammi: That was kind of the big stuff. Sammi: I don't feel like there was just not a lot to say. Sammi: Somehow we filled 45 minutes, but there wasn't a lot to say about this episode except I cried a lot and it was good. Sammi: And I'm excited for the Golden Bachelor. Sammi: I'm excited for Bachelor in paradise and I'm excited for Joey being the bachelor. Sammi: And that's fun because when's the last time I got excited about a bachelor? Sammi: I don't know. Sammi: It's been a really long time. Steve: Yeah, it's been a while. Steve: But yeah. Steve: Kudos to production for, again, taking a foregone conclusion, making it dramatic and selling me on someone that I thought was fine but boring. Steve: So just high marks all around. Steve: Charity's great. Steve: Everything's great. Steve: Sammi stayed up too late, got super emotional. Steve: It's okay. Steve: Nothing wrong with that. Steve: There's nothing wrong with it. Sammi: I'm excited all of you. Sammi: I did it for all of you. Sammi: And then we got home last night at like 10:00 and I mentioned this off recording. Sammi: We played pinball until I don't know. Sammi: This is a problem. Sammi: We played pinball until bar closed and so, yeah, my mind's kind of fresh, but I'm just coming off vacation, so if I repeated myself a lot, you knew what you were getting into. Sammi: Okay. Sammi: You knew what this was also. Sammi: You're welcome. Sammi: I hope you got your dishes done or got to your workplace or cleaned your office or whatever it is you're doing right now. Sammi: And I'm so excited. Sammi: Yeah. Sammi: The jilly box has made it through customs. Sammi: It should be here in a day or two. Sammi: And the grand reveal is coming soon, so you'll get to enjoy that shortly. Sammi: And it'll be a nice break. Sammi: Hopefully we can get it done before school starts. Sammi: And then once I'm in the swing of things for school, we'll have the golden bachelor and bachelor in paradise to record. Steve: Love. Sammi: It's going to be great. Sammi: It's going to be great. Sammi: If you want to see my slow decline into madness, come back on or before the last week of September, and I'm sure that's what you're going to get to see. Steve: That's right. Steve: We're making q four. Steve: Every month of Q four is mental health awareness month on our podcast. Sammi: It's going to be like, why did I decide to do biostatistics and biochemistry in the same semester? Sammi: Why? Sammi: Anyway, so take care of yourselves, friends. Sammi: Take care of each other if you haven't had a chance. Sammi: I mean, we are in the last moments of summer. Sammi: I know a lot of us had a heat wave recently. Sammi: At least here it's broken. Sammi: Make sure you're getting outside. Sammi: Enjoy that weather. Sammi: Go for a nice long walk. Sammi: That's what I'm about to do when I get off of here and make jam as well. Sammi: And, yeah, just enjoy those last moments that you have before it gets cold and dark, if you're in a part of the world where that happens. Steve: Yeah. Steve: And you know what? Steve: I'm going down to the lake as soon as this call is done. Steve: I'm going to walk around. Steve: I'm going to probably eat a snack. Steve: I'm going to watch the sunset. Steve: It's going to be beautiful. Steve: You know what I'm not going to do? Steve: I'm not going to do needle drugs, because you shouldn't do needle drugs. Steve: Don't do needle drugs. Steve: You got to hit them with the triple because they going to hear from us for a little while. Sammi: We'll be back with a jilly box. Steve: And a double bachelor experience. Steve: Oh, lordy.

I have had my head down working on some big things, and it has been a while since you heard from me. Well, I'm getting back to it with a follow-up chat with Toby Bowers, the Leader of the Microsoft Bizapps ISV Program. I managed to catch him in his car, and got a great update on some new things happening in the ISV arena. Enjoy! Transcript Below: Toby: Hi, this is Toby. Steve: Hey Toby, Steve Mordue, how's it going? Toby: Hey, Steve. I'm doing well. Thanks. How are you? Steve: Not too bad. I catch you at a decent time? Toby: You've caught me at a fine time. I'm actually in the car at the moment. I'm just taking my team out for a little celebratory launch after our big Inspire event and also our Ready event earlier this week. So it's actually a good time. Let me just pull over so we can have a chat. Steve: It's Been a pretty frantic couple of weeks for you guys. Toby: Frantic, but good. Yeah. Yeah. We had a great showing at Inspire. We made some exciting announcements across the business applications business, but especially around our ISV program, ISV Connect, as you and I have chatted about before. So, it's been good. Steve: Well that's [crosstalk 00:00:50]- Toby: How about you [crosstalk 00:00:51]. Steve: [crosstalk 00:00:51] the reason for my call is to try and catch up on ISV Connect. We talked some time ago about some things that you kind of had just inherited this role from Googs who moved on and were kind of getting your feet wet. Now you've had a close to a year in this position, right? Toby: Yeah, that's right. That's right. I remember our initial chat and I think in fact I'm guilty, Steve, because we agreed to speak a little bit more often, but it's been an interesting year this past year, as we all know, but yeah, it's been almost a full year of execution since we last spoke and I even remember Steve, the nice article you wrote with some suggestions for me as I sort of took over. Toby: Yeah, I'd love to actually go back to that. We can talk about a little bit about some of the enhancements and announcements that we made last week. Steve: Yeah. I mean last week, I think for a lot of the ISV's that they weren't thrilled with some things as the program got launched, they were starting to kind of get their arms around it. But some of these announcements that I was hearing and hopefully we can talk about today, anything of course isn't NDA, I think should make the ISV community pretty happy. It's making me pretty happy. And really kind of throw some gas on that fire. Toby: Yeah. Well, absolutely. I'd love to reinforce it. I know, I know you get a lot of people listening to your impromptu calls here. So why don't I do this? Let me maybe just set a little bit of context, just kind of where we left off Steve, and then I can hit on the high notes of what we announced and then we can dive into any particular areas. That sound all right? Steve: Yeah. You are pulled over, right? Toby: I am pulled over now, yes. Steve: Okay. Toby: You got my full attention. Steve: All right sure, kind of hit some of the highlights. Toby: Yeah. Yeah, for sure. Well, for those who don't know, we originally set out with the ISV Connect program a couple of years ago to attract ISV's to our platform, building and extending upon it. That platform being both Dynamics 365 and the power platform with a specific focus on partners who had great industry or vertical IP to enhance the portfolio and delivering better value to our joint customers. So through the program itself, it's a revenue share program and we reinvest back in the ecosystem in the form of platform benefits, go to market benefits, co-selling with our field. Toby: So when I sort of took over Steve, I wanted to sort of get a full year of execution in place. And in that first year we were pretty happy with the numbers. We have over 700 ISV's enrolled in the program. Now we use AppSource as sort of the cornerstone of the program. We have, we have 1400 apps or more certified in AppSource. But after that first year, I really with the team wanted to understand how things were landing, and I think your feedback was good Steve. We did a bunch of research. We do partner satisfaction surveys. I of course talked to a lot of partners in my travels. Steve: [crosstalk 00:03:59] in a year's time, you can kind of get a pretty good gauge on what was working well? What could work better? What wasn't working well? What do we need to just abandon? What do we need to step on? And I kind of got the feeling that was this readjustment that we just saw was kind of bringing some of those things to light. Toby: That's exactly right Steve. I mean, it's such a diverse ecosystem of emerging partners to large mature partners across a pretty vast portfolio. So, it was a diverse set of feedback, but you're spot on. We wanted to give it a little bit of time, but then check in and listen and make some adjustments. So that's what we did, based on a lot of the feedback we got. Toby: I'd sort of summarize what we changed in three big areas Steve, the first is that the business model itself, the fee structure, and we talked about this last time, but not only having an investible model where you can reinvest, but actually investing in the ecosystem, especially as it's growing like this business is growing. Toby: The second thing was a lot of feedback around the go to market, whether it was the marketing benefits, the co-selling with our field, really just getting that value proposition right Steve, and really delivering on the promise we made. We needed to balance that equation a little bit and equalize the effort. Toby: And then the third piece is really around the platform itself. And again, we've talked about this in the past, but just the platform, the tooling, dev test environments, app sources, and marketplace itself. Toby: So those were the three key areas that we sort of listened and got a lot of good feedback around. So with that in mind, what we actually announced at the event is that first of all, back on the business model we're significantly reducing the rev share fees down from 10 and 20%, which you might recall, we had a standard tier and a premium tier. So we were bringing those fees down from 10 and 20% to 3%, just a flat 3% going forward. Steve: That's across the board? Toby: That's across the board. And in fact, it was part of a broader announcement we made as Microsoft, Steve, where we're also bringing our commercial marketplace fees, so that's both Azure Marketplace and app sources. We get transact capabilities down to that same flat 3%. Steve: So what's the motivation behind that? I mean, what is it that they're hoping that will accomplish for Microsoft? Toby: Yeah, it's interesting. If you catch any of the sessions, even starting with Satya, he really talks about Microsoft wanting to be the platform for platform creators. And then if you parlay that into what Nick Parker said and Charlotte Marconi around being the best platform for partners to do business on, it really just came down to helping the partners keep more of their margin to invest in their growth. Toby: So it's not a P&L, a profit center for Microsoft. It's a way to deliver benefits. We think it's pretty differentiated in the market compared to some of our peers. And it was sort of interesting to see, because we were planning on bringing the fees down for ISV Connect specifically, and then we started to align across the organization and just thought, gosh, we should just do this in a very consistent way across the entire Microsoft Cloud with that one flat 3%. Steve: So the math equation had to work out something like, if we dropped this to 3%, that's going to grow that side of the business significantly, which is going to increase platform sales, right? There has to be an up for the down. And I guess maybe... I mean, not that the platform wasn't already growing by leaps and bounds, but somebody must've been thinking this thing can grow a lot faster if we get rid of some of these hurdles. Toby: You're exactly right. I mean, it's kind of what we've talked about in the past. Just the value that an ISV ecosystem brings to Microsoft with that, whether it's the industry relevance, industry specific IP, or just a growing ecosystem in general. I don't know if you'd caught what we just did, our earnings earlier this week, but Dynamics 365 is growing 43% year over year, we doubled our power apps customer base. And so to your point, the business is growing, the platform is growing, and we want the ecosystem to grow and we want to attract as many partners to do that as possible. Steve: So, I mean, you can't reduce fees and increase the benefit, you have to have taken some things away or maybe gotten rid of some things that weren't being utilized, or how did that kind of offset? Toby: Yeah. Great question. Yeah, so we are investing deliberately to build this out and kind of putting our money where our mouth is, but we did, you're spot on. We learned a lot around the benefits, the go to market benefits in particular, the second key thing we announced is that we are reducing just down to one tier at that flat 3%. So no more 10% and 20% or a standard and a premium tier. And we're reducing the thresholds within that one tier for partners to unlock those go to market benefits and those marketing benefits. And then what I heard, especially from partners, again, to my point around, you've got some mature partners and some emerging partners, it's not a one size fits all. And so we've got an option sort of an, a lA carte, option for partners to choose marketing benefits that make the most sense for their business. So we just tried to simplify things and streamline things a little bit. Steve: You know, I talked to a lot of partners. We're, kind of unique in that our application is free. So, the revenue shared didn't really come into play for what we were doing because there wasn't a fee for our app or any recurring services with it. But you know, a lot of these ISV's their business is significantly different. They've got revenue generating applications that run on top of your platform. Many of them that kind of told me in confidence that they just weren't paying the fees. They were getting the notice from Microsoft saying, "Hey, please do us a favor and tell us how much money you've made and what you owe us." And many of them were just kind of ignoring that. Steve: I guess if we're getting down into a 3% range, it'd probably make it a little easier for some people to be more honest about things too you think? Toby: Yeah. Well, yeah we hope so. Again, that was kind of my point around balancing the equation and making sure that we're delivering on the promise that we set out with the program itself. And I talked to a lot of partners as well, and there's definitely benefit being realized, whether it's from a marketing perspective or co-selling with our field, again, based on what's important to their business, but you're right, we do think by reducing it to this level and also just getting better at delivering the benefits in a consistent way, we'll have more partners participating in the program. Toby: The one thing I would say, Steve, that I was just going to close off on with this sort of consistency across Microsoft is we also realized that's our value proposition. If we can not only have a similar model with the 3% marketplace fee and ISV Connect fees across Microsoft, but a similar model to the way we deliver those benefits, to the way we engage with technical resources or engage from a co-selling perspective across Azure Teams and 365 Dynamics Power Platform, that's kind of how we differentiate ourselves versus, the rest of the players out in the market. Toby: So we made a bunch of enhancements and announcements across the business Azure teams, ISV Connect obviously, and you'll see us continue to sort of work towards a much more consistent approach from a Microsoft Cloud perspective, because obviously we'd love it if partners were integrating with Teams. We have over 250 million monthly active users with Teams now driving dynamics integrations all the way through to CDM and Dataverse and integration into Azure Synapse. Those are the partners we want to work with and the type of partners we want to support and go to market with. Steve: Well, I'll tell you, I think the 3% has probably eliminated a hurdle for a partner, certainly I remember at the time a lot of partners complaining about the 10 and 20 saying things like, "If it was like three." Okay, well it's three now, so shut up and move forward. Toby: Yeah. We've had a lot of- Steve: And it's interesting, because it's kind of the way we sell is I guess for an industry ISV who built something specifically for Dynamics 365, maybe they approach things a little different. Our approach is more, we really try and sell the potential of the platform because we've got a simple CRM. So we're up against a lot of competing simple CRMs. And when you open one of their CRMs and open, rapid start, for example, they look very similar and do very similar things. So for us, we really have to sell the value proposition of, hey, behind that little CRM that you're using from Acme Cloud CRM company is really nothing. You've got the extent of what you can do with that right there in front of you and there's nothing more that can be done, and we really lean in hard on the potential for things like integration with Teams, with things like integration with Azure. Steve: Obviously the integration with Microsoft 365, all of the pieces that are available in the power platform that we haven't enabled in our app that are there to be enabled, you like the forums and some of the AI stuff, it definitely seems to be a huge differentiator in that sales conversation. Toby: Yeah. Well, that's great to hear that's really what we're trying to get right and stitch together the teams if they exist across Microsoft and iron those out. I think your company is a great example of that Steve, and I know you talked to a bunch of our partners and sort of as an independent third party, we had a few partners join us at inspire. Icertis has been a longstanding partner of ours. They're a similar story from, from Azure Dynamics Teams really across the board, and getting more and more focused on industry solutions with their particular IP. Toby: And then we had more emerging partners like Karma, Frank at Karma talked to us about some of the benefits we're building into the platform, specifically license management, and now he's taken advantage of that. And we have big partners like Sycor, that's been working with us for a long time on the Azure side of the business and is doing some really interesting things now on the dynamic side and sees value in that co-sell motion. Toby: So I think that value prop is what we're trying to land, and then we're seeing lots of different types of partners take advantage of it in different ways, which is great to see. Steve: Yeah, it's not often that you see both a cost of participation come down and the value of the benefits go up. And when we talk about benefits, and before, you and I have talked about some of these go to market benefits, there's a segment of ISV's that could make use of those probably mostly new ISV's that don't really understand that system. Steve: But for a lot of the ISV's, they really didn't see value there, but in the meantime they're maintaining their own licensing systems and their own transaction systems and things like that, which as an ISV, that's just like a tax. You're building your solution to solve a particular problem, but you can't just stop after you built this wonderful solution, you got to protect it, you got to monetize it. So those things ended up being just kind of attacks. Steve: And, every ISV out there has had to kind of build their own system for licensing and transacting. And you guys coming through now recently here would be with the licensing capability we were in that pilot, and that thing's got some great potential, a couple of things left for them to do on that to get that really where it's going to solve a lot of problems that ISV's have had, even with their own licensing. Steve: Because with your own external licensing system, you can only do so much, but working with one that's on the platform, that's essentially the same one you guys are utilizing, is going to be huge for ISV's, and then we'll get to transactability, that's just going to close another piece that ISV's have had to deal with, especially when you talk about those startup ISV's, they know an industry and they can build an app, but when it comes to licensing and transacting, and if they can just tick a button and plug right into a couple of those things, that's going to lower the bar to entry and make it a lot easier for some of those folks to get in I think. Toby: Yeah, I hope that you're right Steve, in fact, I didn't know you were working with Julian Payor and the team on piloting the license management stuff. It's great to hear your feedback. That was kind of the whole intent with the journey. If I rewind a bit with AppSource itself, you'll recall we had to do quite a bit of work on the overall user experience for AppSource. We worked hard with the engineering team to improve that, improve discoverability and search capabilities and just sort of the plumbing underneath. And then the next step was, was licensed management, which we've just GA'd working again with the engineering team, and then from there, to your point, the value proposition, a lot of ISV's put all this together and then you add transactability and the ability to actually sell your stuff on our marketplace to what's now more than 4 million monthly shoppers, going to that destination is it is definitely a point of value that I've heard positive feedback from ISV's on. Toby: So that's why we really invested there. I know it's taking us a little bit of time to get there, but that was another key announcement. We announced license management later in the fiscal year. We'll have translatability and AppSource for our customer engagement apps, for power apps, and then we'll continue to roll out a roadmap from there. Toby: And then the other piece I forgot to mention Steve, we made some noise about as well, was these new sandbox environments. And I know you've given me this feedback before, but you know, sort of in the broader internal use rights world, the value in having sandbox environments for our partners to do dev tests and do customer demos around, I heard loud and clear from you and from other partners. And so that's the other thing we announced. We have these new discounted skews, which are basically just at cost skews across the business for those dev test environments. And then for partners who are participating in ISV Connect and hitting those new lower reduced rev share thresholds, we'll provide those licenses for free. Toby: So we think that's going to be a great new benefit for partners as well, more on that technical and platform side of things. Steve: Yeah. Particularly for the ISV's, because ISV's don't necessarily see a lot of value or need to get Microsoft competencies. Competencies are definitely, as a program that was designed for resellers to demonstrate their competence. But a lot of ISV's don't want to have a need for that. And that's where [inaudible 00:19:22] had historically kind of been tied was to those competencies. Steve: So is there any talk about any sort of... I mean, they did do that kind of short-lived ISV competency, which was primarily around, hey, if you've got an app in AppSource you qualify. Here's some IUR. Steve: So this new program will replace that, but are they going to be revisiting any sort ISV competencies or need? Toby: Yeah, well I won't say too much as far as future plans are concerned, but what I can say Steve is that we did this for biz apps, we did it for ISV Connect because that's our program and we got feedback and we think there's value in that. Toby: I did mention that going forward we'll have a more consistent approach across Microsoft Cloud. There's lots of different benefits out there. Azure Credits, we announced some new things around Teams. And so we just need to, as one Microsoft, provide that to our partners in a consistent delivery through these benefits so that we can support that kind of value proposition we talked about earlier. So look for more from us in that area. You're spot on, on the competency side. And I wouldn't even say resellers, I'd say more SI, system integrators services partners. Steve: Yeah. Toby: The key difference there is, we want those guys to be able to differentiate their organization. As a company, you can say, "I've got 15 certified individuals in this role-based certification. And I've got this many credits to my business that make me a gold partner at an organization level"- Steve: Which is something a customer looking at SI would be looking for. Toby: Right. Steve: But when you're looking at an ISV solution, they're really just looking at the functionality. Toby: It's the app, right? You would want to badge in app versus badge and organization. And so that's the key difference there. And I think we've kind of figured that out and again, you'll see us do more in that space going forward. Steve: Yeah. I just want to mention, just go back for a second to make sure everybody is aware that the transactability and the licensing are optional. These are things that you can take advantage of if you spend a ton of money on your own systems, nobody's going to expect you to rip and replace. These are really designed for... I mean when I think of a partner like myself, if I can get out of the license management and have transactability just be automatic, where all I really have to do is focus on building my IP, getting it in AppSource, hopefully promoting it properly, but then the licensing becomes automatic and the transactability becomes automatic, and I'm just getting money coming into my account. Of course, you guys are scraping your 3%, which I don't begrudge because your given me those tools. That just makes things a lot easier. Toby: That's right. And you're right, it's not mandatory. It's again what makes sense for the partner. And so, you can do business with us and ISV Connect outside of the marketplace and work with us on the new 3%, get those benefits, or you can transact in the marketplace, it's that same 3%. And it's a different benefit. You get that whole commerce system, you get that whole billing engine. You don't have to worry about that. And there's a lot of ISV's out there that see value in that. So yeah, you're spot on. Steve: Yeah. I remember Goose had kind of recharacterized the revenue share after the kind of flap up from some of the ISV's about the benefits and stuff and he recharacterized it as a cost for the use of the platform that you're building on top of a platform that Microsoft has built, Microsoft maintains, Microsoft advances. So look at that as a cost for that. And I think you still kind of need to look at that as a cost for that. It's not 3% for licensing and transactability, it's a cost for maintaining the platform, there's these pieces you can take advantage of or not. But if you're not taking advantage of license management, transactability, it doesn't mean you don't have to pay the fee. You're paying the fee for something else. Toby: Yeah. Steve: I'm trying to head off some things I know I may hear from some folks [inaudible 00:23:24] licensing. No, no, no. Toby: Yeah, yeah, yeah. You're right. You're right, Steve, and again, to zoom back out again, I mean, it's not about the 3%, it's about attracting partners to build on the broader Microsoft Cloud and supporting their business in a way that works for them. And you're right, there is a cost of doing that, but we want to invest, and I think we just sent a message hopefully to the market that we want to be aggressive in this space, we think we're well positioned, we've got a great value proposition with this broader Microsoft Cloud thing that we're just seeing incredible growth across the business. Toby: And I guess most importantly, we're listening back to that, after a full year, really sort of staying in tune to feedback from partners like yourself, that [inaudible 00:24:07] at large to make sure that we're doing the right thing and delivering, that's kind of what was most important to me. Steve: So those discounted skews for ISV's, in order to qualify for that, what do they need to do? They need to join ISV Connect? Toby: Yeah. So the discounted licenses, which are again, just basically at cost for us, are available to anyone who's enrolled in ISV Connect. All you need to do is enroll in the program, but then if you hit the new reduced rev share threshold that sort of unlocks additional benefits, then we'll give those licenses to you for free. And I can't here in the car, remember all the details of the numbers and stuff like that, I think, and you probably have it. I think aka.ms.bizapp.ISV connect, I think that's a link to our website that has all the benefit details and stuff, but that's basically the way it works. Steve: Are those available today? Toby: They are. There's a whole bunch of them available today and there's more coming. I know that the sales service, field service, marketing, I think the customer insights products, maybe commerce, I might be forgetting a few others and then there's more coming down the pike shortly. Steve: All right. So a good reason for people to go back to revisit ISV Connect site if they haven't in a while. Toby: I would love that. Yeah, I think so. If we can get people to go back and like you said, revisit, just get educated, hopefully get re-engaged and then keep the feedback coming. That's a great outcome. Steve: So I've had a few ISV's asking me about what's the future of ISV Embed, and maybe you can speak to that because that one's kind of a little vague, I think, for a lot of folks right now. Toby: Yeah. It's a great question Steve, that's kind of next, next on our list. And again, today I can't share a lot of specifics, but this is a good topic for us to come back to probably in our regular chats. Toby: As you know, Cloud Embed is a model that supports kind of like an OEM like model where a partner's just packaging their IP directly on the underlying license and selling it together through our ISV Cloud Embed program, which leverages our CSP vehicle as a way to transact. And so we've had it out there for a couple of years. And I may have mentioned before that we're sort of modernizing a whole bunch of our commerce capabilities and new business models and so we're working on a few different options still to support that embed scenario where things like co-selling with our field or certain other marketing benefits aren't the most important thing for a particular ISV in a particular scenario, they don't want to have to mess with reselling the underlying dynamics license. They're not resellers. They just want to sell their IP. Steve: Yeah. Toby: So we're working on some stuff there, especially, on both the core dynamics business and the power platform business. So we can stay in touch and I can come back to you for some feedback once we have more to share. Steve: Yeah. That, I mean, that program worked for a particular kind of an ISV. Toby: Yeah. Steve: A lot of the ISV's that have add on solutions that are not SI's, there's a partner already involved with a customer and they just want to sell their add on solution. Steve: Yeah. Licenses have probably already been sold by that partner. They don't want or need to get involved in that management of that sort of stuff. They just want to sell their IP. And then there's some ISV's that the customer is actually buying, which I think we're starting to see now. And I think I told you this before, one of the things that Salesforce had going for them with their ISV's was there were a lot of very robust ISV's that did a lot of direct marketing to customers about their solution and less so about the fact that it ran on Salesforce. Steve: Salesforce is this platform in the background, but this is what we're selling is this ISV solution, and in that scenario they own the customer because the customer wasn't buying Salesforce, they really were buying the solution to their problem for this ISV, and we hadn't seen as much of that on the dynamic side for a long time. It was definitely, you start with dynamics and then you add on ISV features and capabilities. But I think we're starting to see more of that, that holistic ISV solution that a customer is buying the solution that happens to run on the power platform or on dynamics. Toby: Totally. That's the scenario we see mutual opportunity in. That example, you said where the ISV owns the partner or the customer, the relationship with the customer, frankly that helps us reach more customers as Microsoft. And then if we provide that ISV still the underlying technology and the right business model to support their business, then that's goodness on both sides. So, that's exactly [crosstalk 00:29:10]. Steve: So that's the one where ISV Embed probably makes the most sense, , that type of partner. So we're starting to see more of them. Toby: That's great. That's great. Well, I always appreciate the feedback if you have any. So I'd love you to go through these new things in a bit more detail, and then send me your feedback and we can continue to keep the lines of communication open as always. Steve: I'm not letting you off just yet. I'm keeping you for a couple more. Toby: Oh man, I've got my team waiting, I'm hungry Steve. Steve: I just want to ask, "What is the most exciting thing you're seeing in the space coming soon that people should really be paying attention to?" I know we've got some things happening that aren't so much related to ISV, like the power platform pricing coming down, but what are some of the things that you're seeing in your group, or maybe some things that are already out there that you're feeling like ISV's are not understanding what this is obviously or they'd be all over it? Toby: Hmm. That's a great question. I'd say probably two things. One is, again, one of the big announcements we made at Inspire that wasn't necessarily related to ISV's or ISV Connect specifically, but what we announced with Teams where Teams users will now be able to sort of view and collaborate on Dynamics 365 records from directly within Teams. Toby: So this concept of collaborative apps you'll see, and that's at no additional cost. Obviously that concept you'll see us continue to do more around to bring that again, pretty large install base of Teams users that are out there, 250-million now, together with Dynamics, we think is sort of unique to our value proposition. So there was [crosstalk 00:30:58]- Steve: So this is somebody you think ISV's out there should definitely go do a little bit of investigating into the Team story? Toby: Yes, yes. Teams on the front end, it's such a large install base that we can take advantage of as partners. And then on the backend, I mentioned that again, power platform, Dataverse, leveraging our data services like Azure Synapse Analytics, again, stitching that all the way from the front end of the backend. We as Microsoft, we're really focused on that combined Microsoft Cloud story. And I think the partners that are recognizing that and investing in that with their own IP are the ones we're going to engage with and hopefully generate some good opportunity around. Toby: The second one, in that vein Steve, the second one I was going to say is just what we continue to do with our industry clouds. So we have cloud for healthcare out there at the moment, we've got financial services, manufacturing, retail, we announced the cloud for sustainability, we've got not-for-profit. So, these things continue to roll off the conveyor belt, but it's such a great opportunity. I was sort of surprised with how much interest we had from the ISV ecosystem around these industry clouds. Obviously as we build more industry IP, we need to sort of adjust our relationship with our partners who serve those industries, but there's still so much space to add, specific IP to that industry and work with some of those very credible industry partners that we were sort of talking about just a moment ago is a big place that we're going to invest going forward. So, that's an area I'd encourage people to keep a close eye on. Steve: Are you satisfied with the level of ISV engagement with the accelerators? Are they still kind of too many of them on the sidelines kicking or poking it with a stick or have we got enough of them actually coming in now that you're happy with that velocity? Or are you feeling like there's a bunch more that need to get in there? Toby: I think, first of all, we've evolved a bit from that original industry accelerator approach to now just real industry IP that we're building first party in these verticals that I mentioned. Obviously there's great partners out there that can work with us with those solutions to, like I said, have their IP built on that broader Microsoft Cloud. Industry clouds are just a great example of a Microsoft Cloud solution, frankly. And so to your question of, do we have enough partners there? You want to obviously get it right when you launch an offering like that with the right, frankly, small number of partners to complete the solution and have it be good and relevant and useful for customers, but the more the merrier around that investment. Toby: And so it's early days, Steve, we only have one industry cloud in market GA'd at the moment, but as I said, there's a lot more coming. So we want to make sure we're building the ecosystem around it pretty aggressively. Steve: Yeah. I mean, we've got partners of all sizes, so we got some big healthcare ISV's I'm sure engaged in some of the heavy lifting, but healthcare is an awfully big market, awfully big field, and there is spot, point solutions kind of across the healthcare organization that need to be filled by probably a smaller ISV's. So it seems like there's stuff across that whole thing. Toby: Yeah. Totally. There's plenty of opportunity and plenty of space around that. And even from a geographic perspective, I mean, different parts of the world have different regulatory requirements and are different, and so there's yeah, to your point, and that's what I was trying to articulate earlier. I think there's still just a massive opportunity for partners to work with us around those new offerings. Steve: Well, I know you've got to get to your thing. You've told me twice in the call, I appreciate you pulling the car over to chat with me to catch up. I just wanted to get some of this stuff out to the listeners about some of these changes that just occurred. Steve: And I'm definitely going to go through, like you said, and study it a little more closely and I'll reach out to you directly with some feedback and some thoughts and see if we keep this thing moving. Toby: Awesome. Well, Hey, I'm so glad you caught me, Steve. It's always a pleasure to catch up and have a chat, and yeah, please do go through it in some detail. Again, your feedback is important. Whole ecosystems feedback is super important to me, so I appreciate it. And yeah, it was great to catch up. Steve: All right man, talk to you soon. Toby: All right. Take care, Steve.

How Land Academy Deal Funding Works (LA 1380) Transcript: Steve: Steve and Jill here. Jill: Hallo. Steve: Welcome to the Land Academy Show, entertaining land investment talk. Jill: And I'm Jill. And I am broadcasting from Sunny Southern California. Steve: I'm actually in Sunny Central Scottsdale, Arizona. Today Jill and I talk about how Land Academy Deal Funding works. We get these show topics from our customer service, Volume. And so these are many. Many people were asking about this last week, so we decided to do yet another show on how Deal Funding works. But before we get into it, let's take a question posted by one of our members on the landinvestors.com online community. It's free. Jill: Thomas wrote, I've got a couple of thousand mailers out and looking for my first deal. An investor friend of mine who flips houses recommended Blueprint Title. They are an online title company. I called them and they said the only thing they cannot do with land transactions is the new deed and its recording. Isn't that the only thing we really kinda need, but we won't go there. Steve: I put this in here for you. Jill: This is hilarious. Steve: Just when you think it can't get any worse, they say, "Oh no, we can't do the deed." Why would they do that? Jill: I'm gonna start a company like this, it's hilarious. [inaudible 00:01:23] can handle is you give me a check and I'll make sure it gets to them. And then everything else you got to do. Steve: Which is Escrow, that's the definition of Escrow. It's not- Jill: What the heck? Steve: It's classic. I would run away from this. Go ahead. Jill: This is so funny. This made me ask the question. If I close a deal through a conventional title company, like First American, do they take care of the new deed and then the recording? Thanks. Oh yes, heck they do. Oh my goodness. Okay, let's back up right now, everyone. First of all, every real title slash Escrow, it's the same thing, Escrow company out there is online. I'm gonna just say it right now. Everything you can do with a phone call and submitting documents with DocuSign, except for the majority of the states that wanna wet signature on a deed, okay. We got that. So how do you get around that? No big deal, it's called a mobile notary. And they come to your house, they come to your office. If you're the person who's buying it, they'll come to your house, [inaudible 00:02:38] office, whatever they prefer, know that's very, very easy and that's it. So nobody has to walk into a title company and do all that anymore, it'd be right there. This whole notion of not doing, I can't believe they even call themselves a title company when they say, "I'll take care of the money, but am not gonna put the deed in the recording." For a renter, that's why you're paying them to do the deed. I mean, maybe they're just saying... maybe they're doing money and title policy, but man, that's only getting me 50% of the way there. I need the other 50%. So I don't know who that is, but I would pick up the phone and call somebody else. And then, don't even have to go with a biggie, Thomas. Don't think that you have to, that it's only a first American or something like that can do a big close like that. There's a lot of great mom and pop title companies. I would argue they're even better, 'cause I would argue they care more. That can do the whole thing for you. And what I do is an attorney too by the way. There's a lot of attorneys out there that can do every title, that can do it cheaper and faster. So call around. I have two questions for title people, and this is what I do. How fast can we do it? How much do you cost? And I'm looking for an investor rate, because if this works out between the two of us, as you talking to them, Thomas, you're gonna do ten more maybe this month or this year, 'cause you just blasted that area to try and find someone with a good relationship. And you wanna tell them that. Steve: This is like taking your [inaudible 00:04:24] o...

Alex Charfen is one of the very select few coaches I continually plug into...    I have wanted to get this individual on here for quite some time, and Alex Charfen has been one of the reasons why my stuff is blowing up so much.    I have learned that I need to listen to less people, and I'm very, very picky on those that I choose to dive deeply with…   So for marketing and sales, I've really dove deep with Russell, (obviously) and you all know that.    For systems and business systems, I've dove very deeply with Alex Charfen... he's the other coach that I pay a lot to and listen to as well.    ...and I have other various ones that are very carefully selected... and I don't listen to ANYBODY else!    I'm extremely careful about the content that I consume - so that I can spend most of my time just moving, rather than gathering MORE information…   ... which I don't think many of us need more of.    So anyway, I'm excited for you guys to understand more of why Alex Charfen, for me, has been so key…   So I asked him to come on the show and to teach a little bit more about the systems that all businesses need, regardless of whatever you're in.    A lot of these are the systems that a brand new entrepreneur needs when they finally get that revenue coming in.    ...and then there are systems that he creates for those who have an existing business and are ready to scale.    Alex answers the questions…     How do you know if you should be scaling or not?        What are the five reasons why most companies fail to scale?     If you guys like this interview, please reach out to him, (he did not need to do this) and say “Thank You!”    At the very end, we have a special little thing for you, and so we're excited!    Boom, what's going on everyone? This is Steve Larsen, welcome back to Sales Funnel Radio - we're really excited to have you guys here.    I'm with one of my good friends, who's become an amazing friend and definitely a mentor... I would call and consider him a brother as well.    I want to introduce everybody to Alex Charfen.   Before I really bring Alex on, I just want you all to understand, Alex Charfen was one of the guys that helped me understand why I am who I am... and that, it’s okay… and helped me lean into that.    I talk to you a lot about leaning into your obstacles, leaning into those things that have been crappy in your life…    … because they end up becoming your superpower.    You all know my story of going to the first Funnel Hacking Live, Alex Charfen was one of the first speakers, and I took so many notes…    I ran back home, I showed my wife and she goes "That's why you act the way you do?" And I was like "YES, it's because of this guy!”    He had a crazy deep gravelly voice and I loved it. He was the man!" ...and I'm so excited to bring him on the show here:   Guys, please welcome Alex Charfen, “How you doing, man?”   ALEX: Steve, it is so good to be here with you, man. Thank you, and I echo your sentiments completely, and I consider you a brother as well, man.   STEVE: Oh thank you so much, thank you so much.    You know it was like two weeks ago;  me and my wife were chatting about your material and going on through it, and she goes "Oh yeah, I have to remember this is how your brain kind of works."    I was like, "Really naturally, yeah! You should really know that" so we'll go back through your stuff.   You know, I've got that Capitalist Pig shirt that I wear all the time, but I really want one that just says, "Charfen will explain," or something like that, you know what I mean?    That should be the next shirt…   So much of what I do in this world just is NOT explainable without you.   ALEX: Yeah, it's unique, you know, Stephen…    I think when you characterize it that way, so much of what you do is different than what anybody in the world would ever expect... and that's what I've found from the day I met you.    I think I walked up to you and said something like:    "Hey man, I think we should talk. You're a really unique entrepreneur and I don't think you understand just how unique."   STEVE: I remember you said that.   ALEX: Or something like that.   STEVE: Yeah I remember, and I felt like, you know in the Matrix when he's talking to that lady with the spoon bend... I felt like I was talking to her, and I was like:    "What does he see in me? What are you looking at?" You know, and "Please dissect me!"    So anyway, I really am pumped for you to be here and just massive incredible love.    You have to understand, your name; it's NOT just a noun, it’s a verb in my vocabulary.    People are like "How did you do that?” "I just Charfenized it, baby!"    I say ‘Charfenation’ all the time.    I was hanging out with the other ‘Charfenites.’    I'm going over the ‘Charfenation.’    "How did you do that?" “Oh, I ‘Charfenized’ it, baby!”   Anyways, you're very much a verb in my vocabulary, and with my family... so it's really quite an honor to have you on, it really is.   ALEX: Thank you Stephen, it's an honor to be here man, this is awesome.   STEVE: This is really cool. Well hey, I wanna just start right out and just, I wanted to ask…    My audience has heard a lot about you. I've talked about you a lot because there’s so much that ‘veI learned.   Just recently, I was going through some of my old notes, from two years ago, from one of your events, and I was like "Gosh, you're so right, this is so cool!"    It really has created additional leverage for what I'm trying to do.   It works, it's real, and I want everyone to listen to this and listen to what Alex has to say here.   Understand that *this* is how I've been doing what I’m doing.   I learned marketing and a lot of sales from Russell... but how to have a life, systemize, and make my business an asset from Alex Charfen.    So, anyway, could you just tell us how you got into this? 'Cause I know you weren't always…   I mean I call  it entrepreneurial optimization, I mean it's really what you do - it's not just the systems, but like:    I'm wearing glasses now   I'm drinking more water than I ever have in my life    I'm doing all sorts of stuff I never would do, because of you    How did you get into this?   ALEX: - You know Stephen, I think if the question is, "How did I become an entrepreneur?”    I didn't find entrepreneurship, it found me.    This was really the only thing I ever felt comfortable doing in my life.    Ever since I was a little kid, I was always the kid that was different than everybody else, crazy socially awkward, like what you see today…    I don't try to be socially awkward, it's just natural.    I was always different than the other kids   I didn't really get along   I had trouble in school   All the systems in the world told me I was broken.    … and then, when I was eight years old, my family went through kind of a financial downturn; my father lost a company.    He didn't go bankrupt, but he went really close, and to make money for the family we were selling stuff in a swap meet on the weekends.    I remember going to the swap meet for the first time and standing behind a folding card table, and a woman walked up, and I sold her a pen that had an LCD clock in it…    (Like that was big time for 1981 or whatever or '78 or '79, or whatever it was).   Stephen I can remember thinking at that moment, "Holy crap, I'm good at this. This is something I'm NOT terrible at."    … because up until that point, I really hadn't found anything where it was like, "Hey, that was good."  It was always’ "Almost got it, kid. You don't suck as bad as you did yesterday."    I was the kid who consistently got *MOST IMPROVED* all the time, 'cause it's the award you give to ‘the kid who sucked the worst!’   And when that woman walked up, it was like "Hey, this is something I can do over and over again."    And the more that I worked with my Dad, and the more that I experienced business, I loved it.   The world is so random, but when you get into the world of business there are rules.   …. there's an outcome.    People are in it together, and you actually have to work together to accomplish and achieve.   …  if everybody cares about the outcome, it'll happen.    And so *this* is where I feel comfortable.    You know, it's funny, when I was a kid I used to create businesses, create business plans,  write out time cards and all this other stuff, and as an adult, I thought that was like ‘the weirdest thing.’    I would reflect back and think like, "Man, I was such a weird kid."    Now, that's exactly what my daughters do.    My daughter this morning was at the kitchen table for three hours writing out a schematic for a water park she wants to build one day.   STEVE: Wow!   ALEX: And you are who you are, and I think, from the very beginning, this is who I've been.   STEVE: That's amazing, and when did you decide to make a business around this and go actually help other entrepreneurs, like myself, who need these systems?   ALEX: Well, the business that I have today, we started…    So let me give you a little brief history.   So in my twenties, I was a consultant, and you know, a lot of people ask about that.    I did some consulting at a very high level at the Fortune 500 level...    I built a very large business that almost killed me.    And so I can tell the story really good...    I can give you all the highlights and make it sound great:   $250,000,000 company   I've worked with Fuji and TDK and Memorex and Logitech, and all international business.    Or I can tell you the other side of that coin…    I had a $250,000,000 company   I made less than $2,000,000 a year    my margins were razor thin   I had a bleeding ulcer   I was probably over 300 pounds    STEVE: Wow.   ALEX: And so when I got out of that business, I wanted to do something completely different.    So in my early thirties, I got into real estate, and we were taken out by the real estate market in 2007.    Cadey and I introduced our first information product, and that's how we got into this world.   We created a product called the Certified Distressed Property Expert Designation.    In 2007 we were bankrupt, we introduced our product at the end of the year:  In 2008 we did $500,000 in sales   The next year we did $7,000,000   The next year we did $10,000,000   Over the course of the life of that product, we did about $70,000,000    We went from bankruptcy to liquid millionaires in a year.    In 2013, the US Treasury came to our office and did a broadcast with us, where they said that, according to their research…    Our company had pulled forward the foreclosure crisis five to seven years   ….so it was intense.   STEVE: Oh, yeah...   ALEX: Really intense!   And what happened was, right around 2011…    A lot of our clients who were buying our product wanted help growing their business; so I took all of the stuff that I used to use as a consultant; the systems and structure Cadey and I used to run our business, and we started training it.    And so since 2011, we've been training it in classes/ courses.   In 2017, we started the products that we have today. So now we have :   An entry-level coaching program called Billionaire Code Accelerator - for people who are doing over 300k a year   A high-level coaching program called The Billionaire Code Grow and Scale - for people doing over 3,000,000 a year.    STEVE: That's awesome! That's so cool.   ALEX: Yeah it is the most fun I've ever had, Stephen…   It's like every day, I wake up and here's what I get to do:    I get to play in this playground with game-changing entrepreneurs that are starting businesses that are doing things that are just unreal.    ...and our systems, our structures are kind of the backbone for how they're doing things.    So on a daily basis, me and everyone on my team, wake up knowing that we are helping the game-changers change the world, and we recruit people who want to do that…    We recruit for people who are passionate about our mission…   Everyone on my team feels like their life's mission is being fulfilled through being in this business right now.    It's the greatest thing I've ever done.   STEVE: That's incredible, and I can tell everyone else who's listening and watching this now, it's exactly as he says it.    I think I've been to three of your events now, and they have just been life-changing.    I go through and it gives structure to the idea, but then, also, how I behave against the idea. So I can actually go in and breathe; I can live.    I watched my Dad create this awesome company when I was a young boy, but it took him too.   But everyone does that, it's super natural - so you to go in and…    Remove the entrepreneur   Create systems    Create processes and procedures, and people that actually push forward their vision even further.   ... it's incredible.    I know it's not magical, but it feels magical, to me! I'm like "Oh my gosh!"    I've actually had a tab open with your course open for like the last month and I'll just dive into another video, and I'm like "Oh my gosh! Back to the drawing board, that was so good!"    And I go back to it again and again and again... it's just always up, everybody who's listening to me, it's always up.    That's really what's teaching me how to run a company, rather than ‘me’ being the company, and I've loved that.    *Just so powerful*    I wanted to ask you kind of a key question here, and it's a question that I get asked a lot...    People come through my programs, I'll help them make money. They go and make a lot of cash, and it's awesome... but then after that, like what do you do?   What are the first systems that you find that new entrepreneurs with a sizeable amount of cash should actually go create first?    What are those first few moves?   ALEX: You know I think I definitely want to share a couple of systems Stephen, but first, I want to just share a thought process. ..and this is a tough thought process for most entrepreneurs to take on, and it's interesting 'cause I've watched you go through this shift too, right? '   Cause at the beginning, (and I just want everyone to know)...    When I met Stephen Larsen, he was ready to take on the entire world solo!   STEVE: Yeah.   ALEX: Like all alone, right?    And here's the thought process…    After you start making money, the next thing to ask yourself is:    How do I sustain this?    How do I make it real?    How do I make it last a long time?   How do I make it so that I'm not the only driver here?   when you get to the point where the momentum you're creating on your own isn't enough, and believe me, we all get there...    Like I know that if you're watching me, watching Stephen, you're one of those entrepreneurs... and in the back of your mind, you have this crazy voice that has always told you:    You're meant for more   You're gonna do more   You're gonna change the world   You're gonna make a massive impact   ... and if you've always felt that, then there's a shift you have to make in your thinking.    Because here's the issue for people like us; I call it the Entrepreneurs Dilemma.    For people like us…    We need far more help than the average person to reach our full destination, but any request for help or support that we have to make, leaves us feeling vulnerable and exposed.    Stephen, you with me?   STEVE: Yes, yes, yes, yes, 100%!   ALEX: And so here's the shift…   We have to realize that if we're gonna change the world, that is a group activity, and leadership's a contact sport.    So we have to wake up to the fact that when we start to:    Build a team   Create a structure   Pour into the people around us    Invest in those people   Make them important   Build relationships with them   …. we will build the company that we have always wanted.    That's the only way it's ever been done.  The myth of the solopreneur who's changed the world is a myth - it's a joke.   STEVE: So true   ALEX: It's one of the most damaging things out there in the entrepreneurial world today.    Because the fact is…    Show me anyone that looks like they changed the world on their own, and I will show you a massive team behind them.   STEVE: So true!    There's this idea that gets pushed around now, and it's like, “I'm gonna go and be this person that does all this stuff. I'm the gift to the world...”   ...and it's like “Okay….” but you can't do that on your own.    In the last six months, I have begun to experience and feel burn-out.   ALEX: Yeah.   STEVE: I have never in my life experienced that, and it's been hard.  The only way I've been able to create leverage is by listening to what you say and create those teams.   ALEX: Yeah. Well then, Stephen, that's the thing…    Here's the deal I want everybody to understand this:   If you're an entrepreneur, you have a job, and that job is to…    Stay out of burn-out   Lower pressure and noise in your life   Increase the protection and support that you have around you.    Because if you don't work with that equation to constantly lower the noise and increase the support, lower the noise, increase the support…    Here's what ends up happening…     You are in an equation that doesn't work.    … and it's not like anyone can come and argue against me here because this is like gravity.    This is like you know the facts of life, this is like taxes. We're all gonna pay 'em. There's no way to argue against this, you're going to lose.    And so in that situation, as an entrepreneur, you have to be really cautious about doing too much yourself, and about loading yourself up, because here's our instinct…    (You know you have this, I have this, we all have it.)    If there's something to be done, the first thought we have is, “How do I just get it done without telling anyone else,” right? Oh yeah!   STEVE: Yeah   ALEX: And it's like "I'm gonna conquer!"   STEVE: Freedom baby!   ALEX: We forget that humans are tribal animals, man.    We are all terrible at most things. Let's get real…    If you're good at a lot of things then you have a liability because you're not gonna be able to choose what you shouldn't do.    I'm very fortunate, I suck at most everything, and that's like an honest reality.    Anyone on my team will tell you like "Oh man, don't let Alex fill out a form, use the calendar, "send emails. We keep him out of all of our systems."    Seriously my team actually knows when I have a password for a system and they monitor me using it, 'cause I'm so bad at that stuff.    But on that same token, I know what I'm good at.    I'm good at vision    I'm good at where we're gonna go   I'm good at putting the frameworks together    I'm good at assembling a team   … and by doing those things, we can grow a massive organization and have a massive impact.   So for every entrepreneur, the key is to figure out what you're good at and do that to the exception of everything else   ... and it's the hardest thing you'll ever do as an entrepreneur.    Here's why…   The second you start doing that you feel like you're being egotistical. You feel like you're being self-serving.    But here's the fact:    When you drive your business to get easier for you it will grow like crazy.   But driving your business to get easier for you will feel like you're doing the wrong thing.    It happens all the time.   There's a discussion right now on our Facebook group, one of the CEOs in our group made a post, and I'm paraphrasing, but she said something like :   "As I offload and reduce discomfort and get a team around me, I'm feeling less and less significant, am I doing this right?"   And my answer was "Yes! You're absolutely doing this right. That's exactly how it's gonna feel!"    Because we need to attach significance to the total contribution, NOT to your day-to-day activities.   STEVE: Mmmm, that's powerful.    You know it's funny I was It reminds me of …   You know when I first got to ClickFunnels, it was just he and I. There wasn't like a copywriter, a videographer... it was just he and I!    So we did every single role in getting these funnels out, occasionally there was an exception where he'd go "Oh someone's really good at X, Y, and Z,"  but then, by the time I left...   ALEX: - Probably design or something… but everything else was you guys?   STEVE: Yeah, yeah, yeah, right! I knew enough Indesign and Photoshop, I was the one doing it most of the time... and doing first copy rounds, and it like, it was nuts!    But by the time I left, it was funny because he had started implementing these types of things.    I remember watching him during these funnel launches just laying on the floor, bored out of his mind.    I've never seen him like that in my life, and he was almost going to a state of depression. He was like "I'm not needed in my own thing now. Ah no-one needs me anymore."    It's a funny thing to realize, we're just the orchestrators. We don't play all the instruments.   ALEX: We shouldn't, we shouldn't.    And so, you know, back to your question about what systems should an entrepreneur start looking at?   Now, I'm gonna talk high level, and I wanna share...    You and I are really close friends, and I wanna share the most critical content we have for entrepreneurs with your group.   STEVE: I appreciate that.   ALEX: This is what we normally share internally once somebody joins our program…    We share the five things that keep companies from scaling.    The reality is, there are really five things that keep companies that should scale, from scaling.    And here's what I mean ‘companies that should scale…’    You know, if you go talk to most consultants, venture capitalists, investment bankers, accountants, lawyers, whatever, they'll give you this laundry list of why companies don't scale:    They didn't have enough money   They didn't have the right people   They didn't do all of these things   The reality is, if you look at most companies that should scale, there are five clear reasons why they don't…    So let me share them with you, but let me give you this caveat…    Here's what I mean by "should scale..."    If you've got a market    If you're capable of selling   If you could do more    If you know you're leaving money on the table   …. you should be scaling.   If those things aren't there for you right now, go resolve that and then start scaling.  Far too many people try and scale before they actually have all the steps in place.    Then you just build infrastructure that does nothing.   So let me tell you what the five things are...    #1: So number one, first and foremost, absolutely most crucial, is…      Most businesses don't have any type of strategic plan.     So as a result, there's no go-forward strategy, and here's what happens in a business when you don't have a go-forward strategy.    If you don't know where you're going, neither does your team   ... neither does anybody around you   And so you will, by virtue of math, become the biggest bottleneck in the company.    Here's why…    If there's no forward plan where all of us can point at and go get it and help you chase it down, every time we want to know what to do we have to ask you, and we have to go to you... and it's a death of a thousand paper cuts.    You're literally in a place where you're:    Telling people what to do   Checking that it got done   Telling them what to do again.    And if you've ever been in that situation as an entrepreneur, you know that somebody only has to ask you twice before you're ready to flip out and lose it.    Am I right Stephen?   STEVE: Yeah, yeah, usually once.   ALEX: Once, right, right, but by the second time you're like "Are you kidding me?"    And so the way we get past that is we create a clear strategic plan, we share it with our entire team…   ... and if the team knows where they're going, here's what happens.    I want you to understand something about the people coming to work for you.  If you're in a small business, you're hiring entrepreneurs.   I know that there's this saying in the market, "You're either an entrepreneur or you work for one."    I call complete and total BS - don't even bring that crap around me.   STEVE: Yeah!   ALEX:    Every person on my team is an incredibly talented, hyper-motivated, world-changing entrepreneur, they just choose to be part of a team.   And so you're gonna hire entrepreneurs, and the way you keep entrepreneurs absolutely and totally focused and excited, is you show them what they're hunting, you give them the kill.    You say:    Here's our plan   This is what we're doing   This is how you win.    And if you hire the right people, they will walk over hot glass to get to that destination for you.   STEVE: Yeah.   ALEX: But if they don't know where it is, you're gonna demotivate them and completely de-leverage them.    So number one, you have to have a strategic plan.    In my experience, less than 1% of businesses do. Also, less than 1% of businesses ever hit $100,000,000. In fact only 3% ever hit 1,000,000.   STEVE: Jesus. ALEX: So when you look at that, it's not 1% of businesses that hit 100,000,000, 0.01% of businesses ever hit 100,000,000,  and the reason is...    Most businesses don't know where they're going.    And Stephen, by you having the tools to build a strategic plan in your business, hasn't it changed how you approach things?   STEVE: Oh gosh, you guys remember when I tell you those stories of I left my job...    I created 200 grand of revenue really quick but there were no systems   I was the…    Support guy    Fulfillment guy   Sales guy.    I did every role, and I voluntarily, very painfully, had to turn down revenue to go build these structures.    And I want you all to know, it was Alex Charfen's stuff that helped me go in and actually set those systems in place... and so, please understand my affinity for this man and what he does.   About halfway through the year, I was only at like 300 - 400 grand, which is pretty good, but that last huge sprint came in because of the things that Alex Charfen and his team were teaching me.    All those planning things that I use, and all the things that I've just lightly mentioned, they've all come from Alex Charfen, and it helped scale me.   ALEX: That's awesome Stephen... Man, that makes me so proud.   This is so cool! Like there's only one Stephen Larsen in the world, and I told you that the first day I met you…    I'm like, "Dude you are completely and totally unique and I think I can help you build the company you really want."   STEVE: Yeah, you said   ALEX: And for us to be sitting here, and for you to say that, I got chills Stephen, that's so awesome. Thank you, man!   STEVE: Oh man, I'm so jazzed about what we do, but it's because of what you teach I'm like "I can do it... "    The first time I ever saw Stephen at an event, I did not leave the event until I'd cornered him and told him what I needed to tell him... because I knew you were gonna be exactly that type of person.    ...and here's why it's so important to me, Stephen.    I could tell the first time I saw you,  that you were gonna have a massive effect on the world.    But here's what I know about entrepreneurs; you're gonna have the biggest effect on the people closest to you - the people who are most proximal, your team.   And when I see an entrepreneur like you Stephen, I'm like:    "Man, if that guy builds a team he's gonna change hundreds of lives internally in his company. They're gonna change millions of lives externally, and I know those hundreds of people will build your legacy."    And when I see somebody like you, I'm like, “Man! That is the path, let me show you how to do this.”    The fact that it's working, is like, “Ah, it makes me so excited every day.”    This is why I get up out of bed every morning and do what I do.     STEVE: Ah, it's so fun man, feeling's mutual. You walked up, it was from that FHAT event that you were at.   ALEX: Ah ha.   STEVE: And you walked up and said, "There's a huge company in you and I don't think you know it, and I'm gonna help you pull it out of you."    I remember when you said that, I was so scared. I was like, "There's no way that this is real! I know who you are, are you kidding me?"    It freaked me out, and I had to own my own vision for a while. It actually took me a while to practice that.    Anyway, so much has gone on in mental clarity and development from what you've taught, not just these systems and things around, it's really cool.   ALEX: - So let's give the second one, Stephen   STEVE: Yeah, sorry, sorry.    ALEX: oh don't apologize, shit I love this part.    So first you have a strategic plan…    #2: Second, the thing that you need to have is      A system to communicate that plan.        Let me tell you something about us as entrepreneurs…    We think we're good communicators, but we're lying to ourselves.    The fact is, we are haphazard and emotional, and we're pumped one second and we're not the next, and we're all over the place…    Here's what happens…    When we have a team that has to deal with a personality like ours, and there's NOT a system for communication, it's random and haphazard and overwhelming... and it comes from all angles, and they're waiting for word from on high. Here's the fact, if you're the entrepreneur in charge, you're the MOST important person in the building all the time.    You're the most important person on the team, in the tribe, in the group, and they're all waiting to see what you say.    And if they're waiting for days and nothing's happened, they start thinking:    Is something wrong?    Did something go bad?    Did we do something wrong?    So you need a system.   As an example:    My team knows every Monday at 4:00, we're all gonna be on a weekly meeting together.  They also know every day at 9:27 a.m. we're gonna be on a daily huddle, and I'll be there.    They know that once a month we're gonna have a meeting where we show our strategic plan.    They know once a month we're gonna have a meeting where they all get the results.    So they all know when they're gonna communicate with me and how.    From the first day you're on our team there's a system that  controls how you hear from me.    Not just me pumping stuff out there haphazardly.    As a result, my team knows they're gonna hear from me, they trust it and here's what happens.    I set the expectations, I meet the expectations, we create trust. I create trust with my team every time I do that.    And here's the fact:   If your team trusts you, you get way more out of them.   If your team trusts you, they will do more for you.    If your team trusts you, you'll get discretionary effort   ... which means when they're driving, when they're showering, when they're doing something else, they're gonna be thinking about your business.  Why?    ...because it gives them momentum.    So if you have a strategic plan and a system to communicate it, you're ahead of 99% of companies out there.   And Stephen, same thing for you with the system, the structure?    Like…    We all fight structure, but once you put it in place, isn't it incredible?   STEVE: Oh, it's amazing! Stuff's getting done right now, that we set in place once. and then, I'll be like "Oh, podcast episode just launched,!Oh, what day is it? Oh, that's sweet! Everyone just put it out, all right, cool!"   ALEX: Right, I remember when I started getting messages like, "Hey, I love the new podcast!" And I'm like "Oh, we put a podcast out? Nice!"       STEVE: I didn't do that, what are you talking about?   ALEX: So you have  #1: a strategic plan, then #2: a system to communicate.    #3: Here's the third one, now this is BIG, really big, and most business owners just, they don't look at this ever and it's the biggest struggle is, or one of the biggest struggles is;      You have to have a system to consistently document the right processes in your business.     And by documentation, I mean having:    A flowchart   A process document   A checklist   Something that shows you how the important things in your business are done over and over again.    For example:    If you walk into a McDonald's, and you look above the fry cooker, there is a process to cook fries above that fry cooker.    Anything that happens in that McDonald's, there's a process for literally every single thing, including:    Unlocking the door   Turning off the alarm   Sweeping the floor   That's why there's a consistent experience at McDonald's; I'm not saying it's a good experience, I'm saying it's consistent.   In most businesses, in most entrepreneurial businesses, there's no process.    In fact, it's even scarier than that...    The process lives either in the owner's head or in an individual's head - so you lose a person, you lose the company.    You lose a person, you lose a big chunk of what you're doing.   STEVE: Hmm.   ALEX: So you have to have a system in a business to consistently evaluate what processes are in the company, and then on a monthly and weekly basis document the right ones.    The way that I would suggest you start, is you look at your customer experience:    What is the customer experience in your company?   What process documentation do you have to back it up to make sure that is completely consistent?    If you do that, you're gonna beat most people out there...   99% of entrepreneurial companies have little to nothing documented in any type of process.   STEVE: They're just shooting in random spots 24/7.   ALEX: Or they're doing stuff like, "Here's how we do our customer on-boarding…”    I trained Suzy   Suzy trained Annie   Annie trained Bob     John does it now   ...and you're like "Oh, cool! Let's go and see what John's doing?"    Well, John's doing nothing close to what Suzy and Bob and everybody else was originally doing, and so you have these degrading processes in your business.    And here's what happens…    When you look at entrepreneurial businesses, they tend to…    Go up in revenue   Come back down in revenue   Go up in revenue   Come back down.    If you're inside those companies, hundreds of times like I have been, here's what I can tell you…    Revenue goes up as the process is working, and then when it breaks, it comes back down.    *PERIOD*    That's why businesses don't continue to go forward - there are processes breaking in the business.    Whether it's marketing, sales, delivery, whatever it is there's a process breaking.    When you document your proceses, you make them bulletproof.    So in our business, we actually use:    Lucidchart Flowcharts   Sheets in Google Sheets    A new product called Process Street  -  a distributed, automated process document system, which is incredible.    So we have all of our processes in Process Street, and we have a distributed team around the world.   We have somebody in Ireland who can do their part of the process, as soon as they hit the last button it transfers to somebody here in the US who can do their part of the process.   STEVE: That's awesome.   ALEX:    Documenting your processes + Putting them in place = Game-changing   STEVE: Holy cow, okay I wrote that down.    I'm taking tons of notes so everyone knows, I hope they are as well…. And I'm not sharing! ;-) Process.st is the company, and we are so happy with it because... Stephen, here's what I want everyone to know,...   Cadey and I have had five businesses get over $10,000,000 a year, and all five of them ran them with paper checklists.   This is the first time we have automated checklists in Process Street.    The last information products business that we had, we literally had three-ring binders that we would carry around the office and check stuff off.    Having a three-ring binder with a process was so much better than having somebody trying to do it from memory.    Now with Process Street, we can distribute that three-ring binder, and I can get reporting on who's doing what.   STEVE: That's amazing.    Yeah, I've actually seen the three-ring binder and I've thought, "Holy crap, that really is how he's doing it.”    You would teach it and then I watched you actually do it.. 'cause you would record your stand up meeting calls in the morning   ALEX: Yeah.   STEVE: And I was, "Oh my gosh, that's so cool! I'm NOT doing that, interesting."    Then I’d go back and take notes and start it.   ALEX: And then implement.    Well, and you know, there's this phrase in the entrepreneurial world. Ah... I kind of get a little triggered, right!   STEVE: Let it out, baby!   ALEX: You know the thing that people say from stage:   "Here's what I want all of you to know. All you have to do is stop working in your business and start working on your business."    And I'm always like:    "Oh, good, thanks. Thanks for solving it all for us dude, that was awesome. You just solved all my problems with that really cliched BS thing that everybody tells entrepreneurs."     When I was in my twenties, my instant thought was like, "How do I get on stage to punch that guy in the face?"    And my then my second thought was like, "What a load of crap!  If I don't work in the business nobody's answering the phones, sucker."    Like, what's going on here? I don't know how to make that change.    And so the way you make that change is…    Working on the business means documenting processes.    By making it:    Clear   Repeatable   Real   And so you have…    A strategic plan that everyone understands   A communication system everyone knows is gonna happen    A system for documenting processes so everyone can repeat what's going on with your clients   #4: The next step,(and this is BIG), is..    A consistent system for identifying, documenting, and then prioritizing the right project in the business.   STEVE: Ah, this changed my life. *HARDCORE*   ALEX: Whoa, Stephen, you know how game-changing this is because, here's the problem in most businesses…    Projects are selected emotionally.    Period, I can't tell you that they're done any other way - they're emotional.    You go to an event and somebody says "I'm doing this thing," and then, the next day, you're doing that thing.    You listen to a podcast or you hear a webinar, and the person says "Hey, I added this thing to my business," and the next day, you're trying to do that thing.    In our business, if I have a really great idea that I want to implement today…    If I'm like, "Man, this is a really high sense of urgency, we should get this implemented."    It'll probably be somewhere around 45 days, and I'm totally okay with that.    That's the timing it should be in my business.    Now if there's an emergency we're gonna fix it that day, but if I'm like, "Hey, I see an opportunity here with something," it's probably a 45-day event…    Why?    I have a team and a structure, and a plan, and we have a system that's moving forward. We're already hitting our numbers, why would I mess with anything?    I actually protect what's going on in the business   I add things gently   I add things carefully   I make sure my team's into it too    I make sure we have consensus    In just in the last 60 days, we've gone from two million recurring to two point three million recurring,   STEVE: That's awesome!   ALEX: So why would I mess with what we're doing?   STEVE: Yeah.   ALEX: Yeah, so when somebody's like "Hey Alex, I got this "great idea for your business." I'm like "Awesome, get in line."    And we'll put it into our system to see if we want to actually do this…   Because the fact is…    If you're getting sold as an entrepreneur on what your next project should be, you're probably in the wrong place.    STEVE: Yeah, that's fascinating. I really agree with that.    It was your planning system for figuring out which projects, I still do it.    Top of every three months and it has guided everything we do.    And while I do follow a few rabbits and I'm practicing bringing it back in, we still largely follow the plan as to what the business needs, and that's ‘grow and scale’ rather than this impulse of like:    "Yeah, oh shiny object, shiny object, "that looks good, that looks good!"    And it's been that discipline, that's the other thing that's always up is my waterfall...   ALEX: Yeah, yeah, always! I mean mine's up right now. I mean I could share it right now.   And the reason is I always have my strategic plan pulled up in front of me, I'm looking at it every single day.    I'm asking myself:   Is the team doing what we need to do here?   How do I support people more?    How do I help them do this more?   Because when you look at our strategic plan, here's what it's made up of.    Our one-year outcomes   Our client-centric mission - which is our Superbowl, our hall of fame, the long term   The 90-day projects we're focusing on right now    What we're doing this month to hit those targets . So that waterfall of long term, to one year, to 90 days, to 30 days, I can see it all on one document and it tells me EXACTLY where I should be supporting the team and what we're getting done.    And so here's what happens…   I went to an event a couple of weeks ago, and I had an idea that was like "Oh man, we have to do this."    Then I come back to the office, I look at the waterfall and I'm like "What do I want to kill in order to do this thing over here?"    And you know what the evaluation was? *NOTHING* I'm not going to take anything off this, that would be crazy.   There's no way I'm gonna go to my team and say, "Hey guys, in addition to all the other stuff you're committed to, here's a hot potato."    I just backed down and I waited till the next time we had a planning meeting and I said, "Hey, there's this thing I think we should do."    We evaluated it   It went into the system   It went into the plan    There is very little knee-jerk reaction in our company because we are going so fast in a forward direction, that for me to challenge that in any way it has to be game-changing at a different level - so it rarely even happens.   STEVE: Yeah, black-ops right? Call them black-ops?   ALEX: Black-ops.   STEVE: No black-ops!   ALEX: No black-ops, baby!  If it's NOT on the plan, you don't do it... or it's black-ops.    And usually, the biggest creators of black-ops are guys like Stephen and I.    So my team has an open license to tell me if I'm doing black-ops.    They will actually call me out in a huddle, in a meeting, they'll be like "Ah, this sounds like black-ops," and then we'll make a note, we'll put it in a parking lot and do it later.    STEVE: Oh, that's so cool, okay.   ALEX: Yeah,  that's one of the most important things you can do when you have a team Stephen…    You train your team to criticize you and then you congratulate them when they do.   STEVE: That's really cool, then they have a license to actually flex their brain instead of feeling like they're in a box.   ALEX: Absolutely. You know I heard a story once about Larry Page, who runs Google,   He was in a meeting and he really strongly stated a point. and one of the team members got emotional about it and started yelling at him.    She was like, "I think you're wrong and this is why you're wrong," and Page was smiling…   Afterward, she asked somebody "Hey why was he smiling?"    ‘Cause she backed him down, and he actually said "You know what, I think this deserves more investigation. Let's do this."    She walked out and she was shaking and all adrenalized up, she had just yelled at the CEO of Google, like, “What the heck's gonna happen to me?”   She turned to somebody next to her, and was like "He was smiling, is that because he's gonna come down hard on me?"    And the person was like, "No, he was smiling because you confronted him, he loves it, he wants it.”    He knows that if people aren't confronting him, he's in a bad place.   So I look at it in my team and I'm like, "Hey, if my team's not challenging me a little bit, then we're all just marching behind a duck."    You know, I don't wanna have ducklings behind me. I want people who are saying:    Hey, this might work   This might not work   We might have a better idea   So you give your team license to criticize and license to call you on stuff.   STEVE:  Gosh, I love that.   #5: So here's the fifth one...    So we have:    Strategic plan   Communication system   Selecting and documenting the right processes   Selecting and achieving the right projects,   ….and then, this is *BIG*   Finding the right people     It's NOT just finding the right people, its…    Evaluating the company   Understanding what the company needs right now    What can you offload that is going to create the most momentum, not just for you, but for the team, for everything that you're doing together?    What is the position that you need to put in place next - so that the company moves forward the fastest?    And unfortunately, just like everything else I've named, planning, projects, process, all of those... people also become emotional.    An entrepreneur wakes up one morning and says, "I'm doing too much, I'm gonna hire an assistant."    Then they have the assistant sit next to them for three weeks, and they wonder why this doesn't work out?    It's because you had the thought to get help, (which by the way I congratulate you on), but there was no process there to actually make it work.    And so here's the process you need…   Evaluate what's going on in the company   Understand what the company needs   Turn it into a job description    Then you use it to recruit   You do tons of interviewing   You drive it until you have three people that you can select from    You hire one of them and then you do at least a 90-day onboarding, high-intensity onboarding.    When I'm onboarding an executive team member, I meet with them every day for the first month, three times a week for the second month, and two times a week for the third month.    People tell me, "Hey man, doesn't that "feel like overkill?"    I'm like:    You don't understand what it means to have an executive team. Your job is to build relationships with those people.    You want to know how you build relationships?    There's one commodity that builds relationships. One!    *TIME* - that's it.    And so when I'm onboarding, when I'm bringing somebody on, (whether it's on my executive team or anywhere in the business), somebody is doing that high-intensity onboarding with them…    Up close and personal every single day for the first 30 days making sure we have no drift.    And so, when you have a system to select the right people, bring them on and then onboard them the right way…    Here's what you avoid, (and Stephen this is like, Ah, this statistic drives me crazy)...    In corporate America, I know because I used to be a consultant there.    In corporate America, they would say things like, "Well we just hired so-and-so in that position so they'll probably be productive in four to six months."   The first time I heard that I was like "Did he just say four to six months? Does he mean four to six days, or does he really mean four to six months?"    Because in my business, even way back then), if I had to wait four months for somebody to be productive I would have been, “They're gone”!   STEVE: Yeah, yeah, they're gone!   ALEX: And so in our business, we actually have this experience right now.    We recently brought on somebody else, a new person to help us in marketing, and with our onboarding process, he was actually achieving products within the first five days of his first week.   STEVE: That's so cool!   ALEX: And that's how it should be.    You want somebody to come in, be effective and start contributing and creating momentum.    Because here's what will happen…    As an entrepreneur, if you're wired anything like I am, (and I know Stephen is), if you have somebody on your team that starts to feel like they're not carrying their own weight, you won't sleep.    You won't sleep, it will rip you apart, Stephen am I right?   STEVE: Yeah! ALEX: It will destroy you…    And so here's the question though…   Are they not carrying their own weight because:   They're lazy? They don't want to?   They aren't the right person?    Or is it because it's not clear what they’re doing?   STEVE: They have no idea what they're doing. They don't have confidence...I didn't help them!    ALEX: Right, 'cause here's the thing.    Your team needs three things in order to ultimately be effective and to be the type of team you want.    And here's what I mean by that…    As an entrepreneur here's what you want, you want a team that just does stuff and asks permission later.    You want a team that achieves and lets you know how things worked out.    That's it!  I just know this is how entrepreneurs work.    You want people who make really good decisions.    You want people who move things forward.    You want people who don't stand around waiting for stuff.    And if you want to have a team that actually moves things forward as an entrepreneur…    You gotta spend the time with them and let 'em know what your ethos is, and let 'em know how you make decisions…   That's how you duplicate decision making.   STEVE: Hm, gosh I love that. Okay, so…   Strategic plan   System to communicate   System to document processes that can be shared inside the whole biz    Documenting projects and the ones you're gonna work on   Finding the right people   ...and I actually personally just went through your onboarding training and it's so awesome!    'Cause it goes through and it's like this, you basically create a runway for 'em, right?   And if they don't land, don't worry you've got parachutes and there are jumpy cords all over the place...   - you're doing everything you can to help 'em win fast and lots of small tiny wins that build that confidence, and I was like:    "That is brilliant. 'Cause that is not the way you're taught anywhere else.”   ALEX: So Stephen, check this out, man.    We recently fell out of the lucky tree on recruiting and we hired this guy named Greg Duby and he is, ah, amazing.    He's like, he's just one of the most exciting guys I've ever worked with because he's so solid and so centered, and just so good at what he does.    Greg is a former nuclear propulsion tech in the Navy, so you know what that is, that's the guy who rides the bomb around in the submarine, okay?   STEVE: Yeah, that's amazing!   ALEX: Yeah, you have to have advanced degrees in Physics, advanced degrees in Math.   He's literally a rocket scientist.    So he worked in the Navy, then he worked at NASA, then he worked for some of the larger consulting firms out there…    I mean, he's done incredible stuff in his career.    He's just one of the most solid people I've ever worked with, and within about two or three weeks into our company, in one of our daily huddles, we said, "Who got caught being awesome?"    It's where we call each other out, and he said:    You know, I just wanna call this company out for being awesome.   “ I've been here for three weeks, I've never had an experience like this getting on-boarded anywhere...    I'm up and running, I'm excited. I feel like I'm really part of the team. I feel like I've worked here forever and I'm three weeks in."    And this is somebody who worked at some of the best consulting firms in the world, NASA and the Navy!    And our little tiny company has impressed him so much because we did onboarding because he knew what he was supposed to do.    And as a result, Greg, I think we're about three months in with him, and dude, there are projects that I thought were gonna take a year or two that are getting done this week.   STEVE: That's so cool!   ALEX: It's crazy.   STEVE: It's just a completely different way to do it. One thing I hated in the military, I love the military, but you know, some things that are rough and that is that there are no clear guidelines on how to win ahead of time.   The way you're instructed is by hitting barriers and then you get punished for it, and you're like:    "Just tell me ahead of time and I wouldn't do it! But all right, let's do more push-ups."    Anyway...   ALEX: Something tells me you did a lot of push-ups, Steve!   STEVE: I just want to say thank you so much for being on here.    I asked for 30 minutes and you just completely over-delivered, and I just really want to say thank you to you.    My audience already knows very well of you.    Where can people go to learn more about you but specifically also get your help inside the business?   ALEX: So the best place to learn more about us is to go to our podcast.    I publish a podcast four days a week, which is essentially a one-on-one conversation with an entrepreneur growing a business.    And the way that I create each one of those episodes is when a question or issue comes up in our coaching groups, I create an episode around it, we distribute it to the group.    But then also we distribute it to anybody who's listening, so you can get the same coaching that I'm giving my high-level clients right on our podcast…    It's called Momentum for the Entrepreneurial Personality Type, and you can check it out at momentumpodcast.com.    And then, if you want to understand more about our products, about our coaching groups you can go to our website charfen.com, but better is to just reach out to me or to one of my team members through Facebook.    The easiest thing, is just reach out to me, and I'll connect you with the right person in our company, and we'll go through a process with you to help you understand if we can help you.    You know Stephen, we're pretty neat, we don't sell everybody. We actually get on the phone with a lot of people who we sell later, but we won't sell you unless it's time.    We know exactly what solutions we provide, and if you have those issues and they link up, then we'll work together... but we go through a personal inventory in order to help you do that.    So if anybody's interested in getting on a call with a member of my team, you can also shortcut the entire process by going to billionairecode.com…    Answer a few questions and you can just set up a call link and you'll be on a call with one of my team members and they'll help you qualify and understand where you are.    And just so you know, we don't do sales calls, they are all consulting calls.    When you get on a call with my team, you won't ever feel like you're being sold, you'll feel like you're being helped.   STEVE: Which is exactly what I have felt when I started doing that as well.    Just so you all know he's very serious about that - that's very real.    I always feel like I'm being helped by anyone on his team.    ...and come to find out later, "Oh that was the sales guy!"    ...You know what I mean?    They dare to go in and actually they want to change the world and they're very serious about it.    So thank you so much, appreciate it.    Check out Billionaire Code.    The Momentum podcast is a goldmine, it is one of those gems on the internet that is actually worth all of your time and attention.    Thanks so much for being on here, Alex, I really appreciate you and love you, and thank you for being on here.   ALEX: Stephen, dude, this has been an honor.    I hope to be able to get invited back again, and as a Sales Funnel Radio listener, this is really cool. I appreciate you, man!   STEVE: Thanks, I appreciate it!    Hey, awesome episode right?    Hey, once I figured out the simple patterns and formulas that make this game work, I had a new problem…    Back when I eventually left my job and launched my personal business, I sold about $200,000 of product in around three months-ish…    And while I thought I was King Kong, a new problem started.    I was the business, there weren't any systems...   I was support   I was fulfillment    I was the one in charge of getting the ads around   I was the sales department    I was the marketing department    And I knew I wouldn't survive it alone…    Better yet, I knew I'd never seen a rich solopreneur.    This game takes a team.    Contrast that to now, and my company does tons of stuff that I don't know how to do...    What changed?    His name is Alex Charfen, check him out at charfenrocks.com.     So I usually don't bring tons of people on Sales Funnel Radio, but you should know that his programs, combined with my marketing skills, are why my business is killing it in revenue today, and NOT killing me personally.    Alex Charfen's programs and training have been life-changing for me and my family... and taught me who I really am and what I'm meant to be.    So when you're ready to build an actual business, an actual asset and NOT just make this another job…    When you're ready to keep the role of entrepreneur but learn the role of CEO, go get started with Alex Charfen at charfenrocks.com. That's C-H-A-R-F-E-N rocks.com.

*increase team volume, secret mlm hacks, teach your downlines, the power of the internet   Listen to a recent Secret MLM Hacks course member, Nick Bradshaw, as he tells us how is team volume nearly 20X'd after using these modern MLM recruiting principles...   INSIDE SECRET MLM HACKS   This is an interview that I've done with one of my good, Nick Bradshaw. He's got his own show but he wouldn't tell me what it is. You should track him down and ask him.   We have about 500 people in the Secret MLM Hacks program. For the next few episodes, I'm actually going to share with you guys some of the interviews I've been doing with people who are in the program and share what's been happening.   Nick  has almost 20X-ed his team volume since using the Secret MLM Hacks methods, which is crazy. I didn't know it was that much! I thought it was just doubling, not 20X!   He's going to walk through and talk about how he's been using this stuff and teaching the same strategies to his downline, which is ultimately what's been my goal in creating this stuff.   It's not so that everybody has to join Steve Larsen. It's so that you can learn how to do this stuff on your own and then teach your downlines and explode stuff.   A lot of MLMs are refusing to be influenced from the top down on the strategies that I'm teaching. I'm just telling you… This is the landscape of the atmosphere that we're in around here.   A lot of big MLMs are not wanting to take on some of the strategies like the internet, which is ridiculous. It's because they don't know it themselves. They don't know how to train or teach on it.   The strategy I've been teaching is actually to go from the bottom up. It's for the little guy.   HOW TO TEACH YOUR DOWNLINES   Secret MLM Hacks has been focused on training from the ground up. I don't care what MLM in you're in. That's why I'm not here pitching you guys all the time. I'll drop every once in a while what I'm in if you guys are interested, but that's not the purpose of it.   The purpose of it is for me to go and influence MLM from the bottom up. To hand tools to people inside of MLMs from the bottom up who can go reteach it to their people and explode past their uplines.   That's been the point and it's been working. We've had a lot more MLMs reaching out, asking things like, "Would you come build funnels for us?" I'm like, "Where were you when I was talking about it earlier?" It's flipped the whole table on its head.   I have a very special guest today. Somebody I have been watching and seeing everything that has been going on... And I've been impressed.   There’s not many people in MLM who use the power of the internet. I've got a very special guest for you today. It's very easy to see who is in MLM online because there aren't that many. When I first saw other people doing it I was like, “Oh my gosh I'm not alone!” I was so excited about it.   I want to introduce you to and welcome Nick Bradshaw.   SECRET MLM HACKS INTERVIEW WITH NICK BRADSHAW   Steve: Hey man. Thank you so much for being on here.   Nick: Dude it's been absolutely my pleasure. It really really is.   Steve: It's gonna be awesome I'm pumped for it. Just so people understand more about what you do, tell me when you first got into MLM?   Nick: I've been in the MLM game myself about two and a half years. Funny enough, my wife is actually the one who started all of this and I jumped in halfway through. It's really skyrocketed and taken off from there.   My wife's been doing this for about five years. And during that time I was actually a car salesman. I was working 60 - 80 hour workweeks, every single week.   When I started in car sales I had one kid and then next thing I know, I had two kids. I blinked three times and next thing you know I'm sitting next to a six and four year old kid. I'm like, “Where did all the time go?”   I was burnt out on it. I had set all these goals and I had reached the goals. I had worked my way up the corporate ladder so I could provide for my family and let my wife be a stay at home wife.   I got to that roadblock that said, “Where do I draw the line of how much time I'm spending at work versus how much time I'm spending at home?”   From there it was like, “Alright, well what do I do? How do I remedy this, how do I fix it?”   Steve: Something's gotta change, right? We've gotta shake it up a bit.   WHAT IS INSIDE SECRET MLM HACKS?   Nick: How do I be a better father to my kids? How do I be the father that I want to be rather than just the provider and someone that my kids don't even know? I was literally leaving for work before they woke up and I was coming home two hours after they'd already been in bed.   That's where my journey started with MLM. My answer to all of that was, “I'm gonna jump on board and help my wife build this business”.   And so that's what I started doing. I've got all these sales skills. I've been doing this hardcore sales stuff for five years now. My wife was relatively well. She was a silver rank in her company which equated to $2,500 a month.   So I said, “Okay, if I'm gonna quit my job and I'm gonna do all of this, I’m gonna quit cold turkey”.   Steve: You just up and left?   Nick: Yeah, just up and left. I said, “I'm done”.   Here's the crazy part… We moved from Indianapolis to Austin, Texas two months afterwards. We completely restarted. Hit the reset button.     I've got all these sales skills and one of the things that I see really lacking inside of the MLM world was people knowing how to sell. So that was the problem that I said I can fix.   I jumped into our team trainings and I started doing all of these things. I started teaching them menu selling (which is a car world term) but it's just narrowing down the options.   Instead of giving them this huge, 16 page spreadsheet of all of these things that they can buy, you're gonna narrow it down and say, “Okay you have this option, this option or this option.”   HOW TO INCREASE TEAM VOLUME WITH SECRET MLM HACKS   I started doing that and in four months, our team volume jumped from $30,000 a month to $80,000 a month.   Steve: Wow, big jump.   Nick: Yeah big jump. Just within a couple of months of just getting people to understand how the sales process actually works and implementing those skills.   But then we really came to a plateau. You can only do so much to the customer base that you already have.   Steve: Right. You need some more people eventually.   Nick: Eventually you need more people. That was the brick wall that I ran into at that point. I was like “Okay, so how do I do this?”   Marketing, duh.   If sales pushes and marketing pulls, I need to pull more people into this business.   But I had no idea how to do it because I'm not a marketer. I've been doing sales my entire life. And honestly, that's when I found Steve Larsen. I started listening to Secret MLM Hacks and I signed up to ClickFunnels.   From there… I failed. Miserably. On my face.   Steve: Sure. We pretty much all do the first few rounds.   Nick: I jumped in and I'm like, “Oh this is gonna be awesome! I'm listening to you but I'm not really hearing you”, you know what I mean?   Steve: I always laugh when people are like, “I've heard this training before”, and I'm like, “No it takes a few rounds, go again.”   Nick: I jumped in and started building these funnels and I'm like, “This is going to be awesome” and then I hit launch...   And I launch that first funnel and nothing. It was just crickets and I'm like, “Alright, back to the drawing board”.   INCREASE TEAM VOLUME WITH CLICKFUNNELS   I paused my ClickFunnels account because I realized that I didn’t have the skills that I need to be successful doing what I'm doing.   Steve: Right.   Nick: That's when I really jumped into it and I remember the time specifically. I was at a leadership retreat which is an invite only retreat for a company. I had just gotten Expert Secrets and Dot Com Secrets. I bought the black book with the funnel hacker's cookbook and all of that. And I brought it with me.   I'm sitting in our hotel room and I started reading Expert Secrets and I didn't put it down. I went all through the night and the next morning. When it was time to get up and go to the retreat I was still sitting there with my book on page 240 or something like that.   All of these things just started hitting me and it was like the fire was lit. I started really consuming and I even started hacking Secret MLM Hacks.   Steve:  I noticed that's what you were doing. I watch a lot of people do that which is great and I think they should model it.   Nick: When I was hacking Secret MLM Hacks somehow, someway I ended up in the membership site and I hadn't paid for it. I messaged you and I'm like, “Dude, I have no idea how this happened but I'm here.”   Steve: We were in the middle of tweaking some stuff. Yeah, I remember that. It's not that way anymore.   Nick: It's not that way anymore. A whole new revamped course and everything. I got there and I started watching your videos, consuming and I implemented.   For my relaunch basically modeled exactly what you were doing. This was probably seven months ago, eight months ago?   HOW LONG DOES IT TAKE TO INCREASE TEAM VOLUME?   Steve: A while ago now, yeah.   Nick: Since then we went from$80,000 a month in volume to averaging about $150,000 a month in volume.   Steve: WHAT? I didn't know it was that big dude… Are you serious?   Nick: Yeah. In the past 12 months, we've done a little over $1.5 Million.   Steve: So you're saying it works?   Nick: I'm saying it works dude. That's probably about the time that you really started noticing me singing your praises. I'm sitting here inside of my own business and I'm watching these things grow and accumulate exponentially.   And I'm trying to teach this stuff to my team and get it through their heads… There's no other way!   Steve: I don't know another way either. I'm not making fun of you who are like, “I love talking to friends and family. I love going to home and hotel meetings”. Good on you. But you can only do that for so long.   It's so much better to have something automated.   Nick: Yeah, absolutely. I start learning more about marketing and it's a constant learning curve obviously.   But you know that? It’s so true that MLM is a personal growth opportunity with an income opportunity attached to it.   Steve: Right.   Nick: That's what it is. It's a great way to start for the traditional person who doesn't know anything about marketing or sales. You can start talking to family members and friends and doing all of that.   But the reason that 99% of us out there are failing is because we don't ever move past that portion of it.   The growth never happens and where we get into real marketing or real sales.   PERSONAL GROWTH WITH SECRET MLM HACKS   Steve: Reaching out to your network only gets you so far. After a while you have to learn how to attract more people, market to them, change beliefs, sell and close.   It's funny when people are like, “I'm just gonna treat this like a hobby.” You're not going anywhere then, sorry.   It's a business not a hobby.   Nick: That’s the way that I see this. We talked about this the other day. The way that I see MLM moving, the way that I see this momentum going... It's having a rebirth, almost.   If you've lived in our world, it's changing the way that it's happening. We're slowly moving out of those 1960's origins and moving to 2020.   You're seeing a lot more sales and marketing professionals get into the game. I'm trying to teach everybody that, I'm trying to show everybody that.   If you're not moving in the direction that things are going, you're going to become extinct.   You're going to have real professionals in this game, doing things, exploding and leaving everybody else in the dust.   Steve: There are social media platforms that were never around until 10 years ago. The distribution channels that exist now are massive and you can tap into them for near nothing.   Most MLMs are mad when you go do that kind of stuff. What is wrong with you? You could be selling so much more if you just use them! It doesn't mean you have to be on Facebook saying “MLM”.   What are you guys are doing right now that's working best for you? I'm just interested in that, because the course is big. Secret MLM Hacks is not a small course.   What is it in there that has been most helpful so far?   TEACH YOUR DOWNLINES WITH SECRET MLM HACKS STRATEGIES     Nick: The thing that I think that's been most helpful… It's just gotta be the confidence to go out and PUBLISH.   Steve: Oh yes.   Nick: The confidence to go out and publish and talk about what you're doing. It's one thing to sit there and learn it for yourself. It's another to go out and actually teach people what you're doing.   Steve: Sure.   Nick: Not only because, in my personal opinion, I think that you learn it better and but you learn how to communicate it better. The more that we've been publishing, the more that we've been putting it out there, the more that it attracts people.   Steve: Sure.   What's being published right now? Is it a podcast right now?   Nick: I've started a small little podcast at the moment.   Steve: What is it called? Feel free to shout it out.   Nick: I don't know if I want to at this point...   Steve: That's okay then, never mind.   Nick: I'm still trying to find my voice. My wife's Instagram account has been blowing up. She's got 42,000 followers right now.   Steve: That's big.   Nick: We do a lot of not direct marketing there. More like back page marketing.   Steve: Sure, that's one of my favorite kinds. Especially in MLM.   Nick: I modeled you and I set up my own little course. I started targeting people who want to make money online. The people who actually want to own a business. Not people who want to do a hobby.   Sending people through that mini-course has yielded great results.   THE POWER OF THE INTERNET AND MLM   Steve: That's awesome.   What does your funnel look like right now? I talk so much about funnels, and most of the MLM world is still very new to the funnel term and concept. But what is it that you guys are doing right now?   Nick: The big thing we're doing right now is the little mini course which basically teaches marketing for MLM.   Steve: Sure, that's awesome.   Nick: The big idea behind that is, if you want to recruit more people into MLM and you don't want to talk to your friends and family, then:     You have to target people who actually want to own a business but people who aren't necessarily getting the results that they want out of the current business that they're in.   Setting up this little mini course that teaches people how to market. People who actually want to learn how to market their MLM. Then we invite them to join the downline.   At the end of this course I affiliate for you and I say, “Hey, there's two ways that you can learn this…”   Steve: Which I see by the way, thank you.   Nick: “... You can either go join Steve's Secret MLM Hacks and learn it from the master. Or you can join my downline and I'm gonna teach you exactly what I'm doing to grow my downline to do $1.5 Million per year.”   You can say in your current business and learn from Steve or you can join me and learn from me.   Catching that low hanging fruit, I suppose. Taking advantage of the way that the current MLM system is.   You have so many people that are unsatisfied with the business that they have because they're not learning the things they need to run their business.   TAKE THE OPPORTUNITY TO INCREASE TEAM VOLUME   Steve: Which reeks of opportunity for the rest of us who actually know what the heck's up.   Nick: Exactly. That's exactly what it is. It's kind of like a smorgasbord of low hanging fruit.   Steve: It is, yeah.   Nick: As far as extra recruiting goes and getting new people, it's great when people actually want to use the product, they believe in the product, they love the product and all of those things.   That's an amplifier but it's not a requirement.   Steve: So you guys have a course, you're selling, you're driving traffic to the course and then on the back you’re saying, “Hey, if you want to come join, this is what we've got”.   Nick: Exactly.   Steve: That's awesome. I was filming some training for my own team three weeks ago now. And I just wrote RECRUITING.   That is what most MLMs teach you and the method for it is just walk around. Think about the power of what we're doing with this stuff.   We're taking the recruiting model and replacing something in front of it so that we're not actually promoting the MLM.   How long did it take you to create your course?   Nick: I created the course in about seven days.   Steve: RIGHT? It's not crazy, man. You create this course so then you're no longer promoting an MLM. So Facebook is okay with you suddenly.   You drive traffic to that and take the money to dump it right back into ads. It's amazing and it changes the whole model.   It's literally INFO PRODUCT + MLM. Mashing together two different industries.   Are you doing phones sales as well? Closing them on the phone?   TEACH YOUR DOWNLINES THE POWER OF THE INTERNET   Nick: To a degree yes. I will offer that to people and I have an application process (modeled after you).   Nine times out of 10 when someone goes through the application process, I set up my auto-responder. My email service will kickback a set of emails that walk them through the process of setting up their account.   Then I've done an automated overview. A business overview that teaches them about the company.   During this entire time, I never even mention my company's name.   Steve: This is the craziest part! Same thing!   Nick: I've literally modeled what you've done.   Steve: I LOVE IT!   Nick: For months my entire office was covered with print out after print out of exactly what you did.   Once I finally mapped it out in my head, it was more about the concepts at hand.   Another thing that I think a lot of people struggle with inside of the funnel world is that they think it's about pages.   Steve: Right yeah, it's not.   Nick: It about the framework. What is the state of mind that he's putting every single person in?   Once I finally understood the framework behind it, I knew that's why I failed the very first time that I tried ClickFunnels. Because I thought that it was just all about pages.   But once I understood the core framework and moving somebody through the funnel and how that's done, then all of a sudden it made sense.   Steve: Right.   INCREASE TEAM VOLUME WITH SELF-LIQUIDATING OFFERS   Nick: One of the coolest things that happened out of all of this and how I feed this recruiting machine is by putting self-liquidating offers throughout the course.   The course is dripped out over five days and on each day there's a small self-liquidating offer.   Whatever I talk about that day, I then give them an offer to say, “Hey, if you want to learn this more in depth right now, click this”. Then it goes to a new page with a little sales video for an offer for $7.   Right now it's $1.50 per opt in on the front end and on the back end it's churning out $38.   Steve: You're speaking louder than whole MLMs even know how to!   Nick: Exactly and it pays for itself 17 times over. I'm paying myself to recruit people.   Steve: Last week on Secret MLM Hacks we put $1400 in and we got $20,000 back out (not including how many people got recruited and then they get handed the same recruiting systems). I don't know how it fails.   The biggest issue is the education. Most MLMs don't know how to do this which is understandable. It's a newish thing.   What would you tell to somebody who is on the fence about trying this?   ON THE FENCE ABOUT SECRET MLM HACKS?   Nick: The biggest thing that I would tell people is fail and fail fast. Just do it.   When we over think it, nothing ever gets done. I'm a perfectionist myself which is why I listened to Secret MLM Hacks 18 months ago and I just started doing this six to eight months ago. It wasn't really until the last three months that it really took off.   I’m still constantly tweaking and doing things to it but the fact is that I just did it.   I finally put down the pen, I finally put down the book and I went out there and I did it. Then I hit publish and I wasn't scared to feed the machine up front and put a little bit of money into it.   Nothing is ever gonna get done if I just sit here and read books. The knowledge is great...   Steve: But nothing happens.   Nick: You just gotta do it. Be active in your pursuit of what you want.   Steve: Be clear about the fact that this is not a hobby.   We've treated this like an actual business. We've got phone closers, we're talking to people and training.   I hate when someone joins because they're trying to do you a favor. Then they're wondering why they don't go build.   You recruited the wrong who! We gotta change your who altogether!   Nick: Every bum on the side of the street needs an opportunity.   Steve: Right!   Nick: I live in Austin and if you walk down downtown Austin you're guaranteed to see about 10 every 100 yards.   They might NEED an opportunity, but they don't' want it. You gotta find those people that actually WANT to succeed in whatever it is that you're doing.   DO YOU WANT THE SECRET MLM HACKS OPPORTUNITY?   Steve: Dude I am so thankful that you got on here. Thank you so much for sharing. I did want to ask one last question.   How many people have you been recruiting since you turned it on six months ago?   Nick: I would say we're probably getting five to seven a month.   Steve: That's awesome! On autopilot?   Nick: Yeah, on autopilot.   Steve: And the quality of person is really high which is awesome.   Nick: Five to seven a month is what we're recruiting into our organization and we get paid for a lot of people that say no to us as well.   Steve: Yeah, they bought the thing up front which is the beauty of it.   Nick: And I say five to seven, that's five to seven that we ACCEPT.   Steve: We get three to four applicants a day but I immediately cut out at least half off them because I can just tell…   Nick: Once you get to a certain point, you have to be able to say no. You have to self-select and be able to weed out people because otherwise it just becomes too overwhelming.   Steve: Then you turn into a life coach rather than a “Here’s what we're doing in our company this week” coach.   Nick: Exactly.   Steve: With love, I'll say that as tenderly as I can.   Nick, thank you so much for being on here, I really appreciate it. This was awesome, man. Really means a lot that you jumped on.   HEAD OVER TO SECRET MLM HACKS NOW   I know it's tough to find people to pitch after your warm market dries up, right? That moment when you finally run out of family and friends to pitch. I don't see many up lines teaching legitimate lead strategies today.   After years of being a lead funnel builder online I got sick of the garbage strategies most MLMs have been teaching their recruits for decades. Whether you simply want more leads to pitch or an automated MLM funnel, head over to secretmlmhacks.com and join the next free training.   There you're gonna learn the hidden revenue model that only the top MLMers have been using to get paid regardless if you join them. Learn the 3-step system I use to auto recruit my downline of big producers without friends or family even knowing that I'm in MLM.   If you want to do the same for yourself, head over to secretmlmhacks.com. Again that’s secretmlmhacks.com.

In this latest episode, our heroes take a look at Serena's Rundown of "Steve Stops By". What does Serena think of Steve? Which one of John & Kevin's friends did Serena go to summer school with? How did Kevin ruin Rent for Serena? Tune in and find out! --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app Support this podcast: https://anchor.fm/kevin918/support

Steve: Hey, everyone. This is Steve Larsen and welcome to Sales Funnel Radio.   Speaker 4: (music starts) Welcome to Sales Funnel Radio, where you'll learn marketing strategies to grow your online business, using today's best internet sales funnels. And now, here's your host, Steve Larsen. (music ends)   Steve: All right you guys. Hey, I am super excited. Today I've got two very special, kind of unique guests on the podcast. As you guys know, a lot of times, I record my own thoughts on things that Russell and I are doing to make marketing awesome, but I like to go and interview other people as well. Today I've got on the show with me, it's Dallin Greenberg and Kristian Cotta. These guys have a pretty awesome unique way for building funnels. Anyways, I want to welcome you. Thanks for joining me.   Dallin: Appreciate it.   Kristian: What up.   Steve: Hey. I actually was thinking about it and Dallin, I don't even remember how we actually met. It wasn't that long ago, was it?   Dallin: Ah, no, not very. Just a couple weeks.   Steve: Just a couple weeks ago.   Kristian: I think Dallin met you the way that him and I kind of joke about he's the black box back alley hacker. He does all the ...   Dallin: If there's someone I want to meet, I find a way.   Kristian: He's the unconventional guy. You won't find his practices in a book or a manual.   Steve: Crap, that makes me a little nervous.   Dallin: Yeah, don't mess ... I told Kristian the other day ...   Kristian: Not black hat, black box.   Steve: Yeah. We can call it whatever we want, right? No, just kidding.   Kristian: Yeah.   Steve: Well, hey thanks for-   Dallin: I told Kristian, the other ... Oh, I'm sorry.   Steve: No, no, you get a say. Thanks for letting me wake you up at the butt crack of dawn and still being willing to share some cool stuff.   Dallin: Yeah.   Steve: How did you guys start meeting or working with each other?   Kristian: I'll let Dallin take that one.   Dallin: Yeah. I was working on a kind of unique project. We had a guy up in Scottsdale that owns a software. He's the developer. It's a software that does algorithmic stock trading and he was stuck with his marketing. He's a big guy. He's got a lot of stuff going, but anyway, we were trying to help him get some plans going.     I had actually watched Kristian on Periscope. I'd met a lot of guys on Periscope and one day I noticed Kristian was actually in Chandler, which is only a few miles away from me. Like I said, if I see someone, I'm going to find a way to meet him, so I'll comment in his Periscope a few times and little by little, end up getting his contact info. Day later we're in a Starbucks together talking about a plan that we can do, well I was more impressed with Kristian, what he was doing. My partner that I was working on with this marketing plan for this software developer, we were on kind of different pages. I have a background in sales and Kristian's dynamic was a little more my still, so my partner ended up leaving and I ended up asking Kristian, "Hey, is there anything on the side that you're working on or that I think we can do together?"   Steve: Mmm.   Dallin: Badda bing badda boom. We've ... I feel like it's the perfect love story. We've been hanging out pretty much ever since.   Steve: As long as he says the same thing, I guess that is true, right?   Dallin: Yeah. Yeah.   Kristian: Yeah, no. The funny thing, Steve, about Dallin is I'd been with ClickFunnels, I was one of the first 50 people that signed up for the beta version of ClickFunnels.   Steve: Wow. You're from the dark ages, Man, that's awesome.   Kristian: Dude. Yeah. We were just talking yesterday because we literally I mean the crazy part ... I'd been so resistant to start using Actionetics.   Steve: Yeah.   Kristian: Until I had to transfer from Infusionsoft to AWeber, AWeber to ActiveCampaign and we're trying to do something and it's like, "Dude, why don't we just use Actionetics?" It's all in here." I'm like, "Fine." We're switching everything over and I needed ... I'd been doing funnels and learning about ... like when I first signed up for ClickFunnels, I didn't know what a funnel was. I wasn't even sure what Russell had explained to me. It just sounded so cool and I was like, "Dude, I'm going to figure this thing out because what he's talking about and the numbers, I'm like, "That's what I need to be doing. That's it." I been doing this for two and a half years, which is kind of a long time in funnel years.   Steve: Yeah. Yeah, it is.   Kristian: It's not really that long of a time in regular terms, but I got on Periscope and started kind of talking about my business. At the time, I was trying to grow this fitness, be an online fitness guy.   Steve: Yeah.   Kristian: I'd used funnels to grow an email list of 3,500 people and I got on to Periscope and nobody cared about the fitness. They wanted to know how I was growing my email list and how I was doing my, how was I doing this business.   Steve: Interesting.   Kristian: Then I kind of became one of the funnel guys on Periscope and was a speaker at the Periscope Summit. I got this notoriety on Periscope for, they call me the King of Funnels. I'm like, "No, guys. I know some really big funnel guys on Periscope." They're like, "No, King of Funnels."   Steve: Wow.   Kristian: It's been like two and a half years of this little journey of learning funnels where it's been ... I'll tell you the three guys I credit everything to are Russell, Todd Brown and [Lo Silva 00:06:09].   Steve: Mmm.   Kristian: I actually had just finished the PCP coaching program with Todd Brown and those guys. Dallin, when he came to me was like, "Dude, this stuff you're talking about is awesome." I said, "Well, let's, I need a guy that gets it. That is driven and ... " that was Dallin. Now we've got this little, little agency we're trying to scale.   Steve: That's awesome, because good partners are hard to find. I remember I started doing this back in college. My buddy and I were driving traffic for Paul Mitchell and we were doing all this stuff. I ended up firing, going through nine different partners. It's cool that you guys found each other, you know what I mean? That's pretty rare just right there.   Kristian: Yeah. If you go back and talk about Dallin's ... there's a couple of key things that I was looking for, because I have an entire course. You love Periscope. I saw some of your Periscopes on YouTube and ...   Steve: Dang it. Man, those were the new days for me.   Kristian: Yeah. I was a speaker at the Periscope Summit in January.   Steve: Cool. Wow.   Kristian: Dallin's helped me develop this program and it's something that we've rolled out in beta and we're going to roll out as a digital product. It's called the Live Video Funnel. I've been working with Todd Brown and the guys at MFA on the entire sequence and the packaging and all that kind of stuff. They're calling Kurt [Malley 00:08:00] speaking at Marketing Funnel Automation Live in October and one of the things they're saying is that the biggest opportunity of 2017 is, they call it the Facebook Live Funnel, but I'm going to let you guys in on a little note. Facebook Live and Periscope don't work the same way. Even though they're both live video, they're different, so Dallin ... I needed somebody to help me with that aspect. I couldn't ... to be honest, you know this Steven,   Steve: Yeah.   Kristian: I couldn't do all that, every single thing, every single aspect of a funnel.   Steve: No.   Kristian: The script writing, the copy writing, the editing, the videos for the VSL's, the strategy, the email marketing sequences, all the social media.   Steve: Yeah.   Kristian: What I'm really good, compliments what Dallin's really good at, like I said, his ability to get in on Facebook and recruit people. He has this really strong sense about building a team, which is one of those things that ... we both get along with people, but Dallin's good at that recruitment process. When you want to build and scale something and you need the right people, you need somebody like that.   Steve: That's awesome. That's awesome. Yeah, it's hard to find that stuff. Dallin, you and I, we were talking a little bit about some of the trials you guys went through. Obviously individually you do, but you guys met each other, what have you guys been working on and I guess what was the ... What are some of the issues you guys have run on, I guess, getting to where you are. You know what I mean?     Unspoken stories, you know that where none of us put in our marketing hardly ever unless it's part of our sales letter. "I was in the dumps, but now I'm flying high." These are like, really what kind of issues did you guys run into what you're doing now? What are you doing now, first of all?   Dallin: Well, the majority of our issues actually are from more individual sides. We're actually doing really good with our projects together.   Steve: Mmm.   Dallin: Your typical issues you run in together are testing. That's what funnels are, right, it's testing, testing, testing, testing. There's always that down side until you ... it's just a numbers game, right, until you find something that works. As far as the personal side, because I believe that this kind of runs, this is the fire that's on the inside, the Y factor from what I call it, right. My background's in sales, so I did door-to-door for years. I think, Steven, you've mentioned that you flirted with that a little bit but, I was really good at it.   Steve: Yeah. Yeah. That's like, I'm sorry to interrupt, but that's one of the best educations I've ever had.   Dallin: Yeah. Yeah.   Steve: I've got a marketing degree and I don't know what I learned from it. You know?   Dallin: Well, that's actually just what I was going to say. I was going to school for business and marketing and be honest, my classes were super redundant. I hated them. I was like, "Man, this is for years I've been planning on doing this and ... " Anyway I got into sales and I did pretty good at it. I just kept going. I ended up doing more recruiting and for six, seven years going out on the summers and taking a team out and helping manage and recruit and sell.   Steve: Yeah.   Dallin: You learn so much from just talking to people, the sale cycle, funnels, a different type of funnel, right?   Steve: Yeah.   Dallin: Learning how to build value to the point where it doesn't matter what you ask for money, because they love it so much that they're going to buy. It taught me a lot. Well, long story short, I made my transition. I was doing alarms and home automation. I made my transition with this solar boom.   Steve: Mmm.   Dallin: Solar's on fire and fortunately for us, we live in Arizona, one of the sunniest places in the world. Solar was hot, but a lot of stuff was happening politically. A lot of the utilities are trying to shut down solar here just because of different costs. It's a mess. They succeeded and actually the utility ... There's two main utilities in Arizona. They succeeded shutting down solar where I live.     In order for me to get work, I'd have to go an hour a day just to prospect clients, let alone keep my pipelines, my relationships, my contracts, everything going, because they're longer projects. It was really funny because I was really bummed because I was really excited about this transition. It was a huge jump for me because we were so comfortable with what we were doing, making awesome money and it was kind of just this really big leap of faith. Well, last April, fast forward a little bit, last April, our little girl, our daughter, she was four years old. She got diagnosed with leukemia.   Steve: Oh man.   Dallin: When that happened, we literally were going to leave for another summer, two days after she was diagnosed. It was crazy. Everything was just happening and days and days and days sitting in the hospital. I had always wanted to do something online my whole life, but I didn't want to ... I didn't know exactly what was happening. I didn't know where I wanted to put my foot in. I didn't want to mess with inventory and selling one off things. I wanted to do something on a big level. I just didn't know how to do it.     In the hospital you got a lot of time to yourself and so I'd study these things. I'd start looking at different processes. I'd find patterns. I would sign up for everyone's email list, not because I cared about their product. I wanted to see their system. I wanted to study the funnel. I wanted to study the email sequences and I started seeing the patterns.     That's when I kind of got into a lot of this other stuff with Periscope and live stream. I was like, "Man, this is the future. I get it." I think every guy that's doing any sort of digital marketing has a day where they, it kind of clicks and they say, "Holy smokes. I can really ... This is powerful. This is how you can reach a lot of people." What everyone wants to do is have a voice and do something.     I ended up switching my major, going to school for persuasion and negotiations were my sayings. I was a business communication major and I had that emphasis in persuasion and negotiation. Looking back on everything now, it was just perfect. Everything kind of worked out really, really good. I was kind of like, my little side, so we really hit this kind of rock bottom where it was like ... financially we took a massive hit because I wasn't able to go out, drive an hour and do all this kind of stuff. This last year-   Steve: Yeah. You needed to be home. Yeah.   Dallin: This last year has really been an investment of my time and I just kind of feel like I went back to school. I feel like I'm getting way more out of this school than four years of collegiate, right?   Steve: Easily. Man, how's your daughter now? If you don't mind me asking.   Dallin: She's awesome. She's in a maintenance phase right now, got another year left of treatments, but she's ... hair's back and muscles coming back and went back to school. She's in a really, really good spot right now. Appreciate it.   Kristian: She's strong too. You should see her.   Steve: Really?   Dallin: Yeah.   Steve: That's amazing.   Dallin: It's from everything that she went through. She got down to, had to relearn to walk, lost all her muscles. She was a little skin and bones and now she's this little muscle ball.   Kristian: Now she's a beast.   Dallin: She's awesome.   Steve: I appreciate you guys sharing that kind of stuff. I mean it's ... because most of the ... I've never interviewed anyone on this who hasn't gone through something crazy, you know. It's not like the path is always clear, either. Usually it isn't.   Dallin: Yeah.   Steve: There's a lot of times I wake up and come here, I'm like, "I don't even know. I know I got to work on something, but I don't know what." It's like going through this hazy fog, so I appreciate that. Then there's all the personal side and all the things going on. Yeah, I first started getting into this stuff, little bit similar with door-to-door sales. I started looking around going, "What the heck?" We're driving out and there's all these billboards everywhere. I was like, "People call these things ready to buy." I'm knocking on people's doors all day long and they're not wanting to buy it when they wake up. I've got to go convince people who weren't planning on spend money. Like, "How do I do this?" I start putting ads everywhere and that's how I started getting phone sales and stuff. I was like, "There's something to this." Anyways, I-   Dallin: See, that's funny because I was kind of the same person. All the other managers are, "Dallin, stop trying to reinvent the wheel. It works."   Steve: DS, yeah.   Dallin: DS, this. I'm like, "No, guys. There is a better way." My motto in everything in life is there is always a better way. I don't care what you say and what's working. Something can be tweaked and something can be done to scale.   Steve: Yeah. Yeah, definitely.   Kristian: Which is funny, because Russell always says, "You can tell the pioneers because they're lying face down with arrows in their back."   Steve: Yeah.   Kristian: I guess in this case, it wasn't really pioneering. You were trying to find the people laying face down.   Steve: Yeah. Yeah.   Dallin: Yeah.   Steve: Side stepping all the other people who were already face down because they knocked 400 doors that day, right?   Dallin: Yeah, seriously.   Steve: What are you guys working on right now though? You guys mentioned that there's some awesome things going on. What's your current funnel, if you don't mind talking about that? [inaudible 00:18:19] sounds like, maybe ...   Kristian: Dallin said like perfect timing. I feel like it has been. We joke about being a startup because ultimately we are, to the point that we're even in the process of creating our business plans and our SOP's and all that kind of stuff, so that we can talk to some investors. We have some investors that we're talking to in order to really have the capital that we think we need to be able to scale this thing quickly, instead of Facebook ads tested at $10 a day for 50 weeks.   Steve: Yeah. Yeah.   Kristian: Yeah. The whole reason I got into learning funnels was, you guys talked about door-to-door sales and I have 15 years of commercial real estate experience. I worked with clients like L.A. Fitness and McDonald's. I represented McDonald's for the state of Arizona and Burger King and Taco Bell, so pretty big name companies.     There's a lot of guys that would be happy with that, but the problem I had was that I kept looking at the deal size of what I was doing. It was constantly kind of like this feast or famine situation where you either had a huge check or you had nothing. Literally, nothing. It kind of got to the point where I was like, "Man, there's a better way to do this." Very similar. You guys hear the consistent theme here? There's a better way.     That was kind of the first step of me saying, "I'm going to figure out how to streamline this" so that it wasn't even so much ... I just kept seeing all the guys that were buying the properties doing all these big deals. They weren't even in real estate. They had these other businesses that were generating cash flow and here I am putting these deals together that are making, Dallin and I had this exact conversation, making these guys over a million dollars and they're like, "Oh hey, thanks. Here's 40 grand."   Steve: Yeah. Yeah.   Kristian: What's wrong with this equation? I'm the one that did the whole thing, the financials and all that. I just didn't have the money. That was the start of it.   Steve: Yeah.   Kristian: Then you add on top of it that we got into a network marketing company and did really well, but we got stuck right under about 10 grand a month for like 18 months. It turned into another full time job where I was 40, 50 hours a week at every Starbucks from east to west meeting people. I'm like, "This is not working."   Steve: Yeah.   Kristian: Those two combined, I was like, "If I get online, I can figure out how to do both of these. I don't have to pick because I can leverage myself."   Steve: That is kind of the funny thing I learned about ... because I got into an MOM. I went and did exactly what my upline was saying. Got 13 people my first move.   Kristian: Oh, wait, your [inaudible 00:21:42] not duplicatable.   Steve: No. Not at all.   Kristian: I don't care. If I find enough of the right people, it won't have to be.   Steve: Yeah. Yeah. My first month, I recruited 13 leeches. Man, they wouldn't do a dang thing unless I was like pushing them in the back with a cattle prod. I was like, "Ah. There's got to be a better way to do this." That's why I took it online and did a lot better. I definitely relate with that.   Kristian: Yeah. The crazy part about this is, like Dallin was saying, he's, shoot, some of the advanced strategies ... Dallin's has this like ... he understands and can see what the outcome is that we're trying to do. He gets it. He gets the whole flow and process of this, of how funnels work. He's been studying them. I just think for a big part, he just needed to connect certain pieces and be able to see what's going on behind the scenes that you can't see online.   Steve: Yeah.   Kristian: We talk about ... the hardest part about knowing how to do funnels is focusing because when you understand it and it clicks and you realize what you can do, it's like .... Someone starts talking you're like, "Oh my God. I know how to make money with that. Oh my God."   Steve: Yeah.   Kristian: It's like entrepreneurial ADD exacerbated.   Steve: Yeah.   Kristian: Forget entrepreneurial ADD. This is like an entrepreneurial ADD addiction.   Steve: Yeah.   Kristian: That's the issue, so we've had to get very focused on okay what's the quickest and most pressing thing at the moment that we can make money with, so that we can reach our long term goals. Like I said, Lo Silva is one of the guys that I credit a lot of what I learned from. There's three little things that I take from them and that's think big, start small, scale fast.   Steve: Interesting. Think big, start small, scale fast.   Kristian: Yeah, that's kind of our little mantra.   Dallin: Yeah. That leads into basically what we're doing now. Our whole plan without getting too much into detail is we have a very, very big picture. Just like a funnel, we have our personal value ladder. Our big picture is more in investments, real estate, things like that. Those are our high tickets. Right.   Steve: Yeah.   Dallin: For the time being, we need to make sure that we couple that with clients, so we have our lead gen system, our agency that's doing multiple things, SCO work and funnels, and social media strategies and management and that way it can help us scale. Our agency essentially fronts the bills and I guess the best way to put it is we want everything that we do to be self-sufficient. If we build something, the entire goal-   Steve: Keep it in hands.   Dallin: Well, yes and no. The entire thing is for that project to sustain itself, so you understand once you get going with your Facebook marketing and such, it gets to the point where you reinvest X amount back into it. Then it lives, it breaths on it's own kind of. It just needs to be monitored, right.   Steve: Yeah.   Dallin: If we have this solid balance between us of we have clients coming to us for done-for-you services, that's awesome. That's cash. That keeps us busy. That keeps workers of ours busy. Then in the meantime, if we can couple that with 40, 50% of our other time for in-house projects, because Kristian and I already have entrepreneurial ADD, we're always thinking of ideas. We always have something going on or a lot of times a client that comes in has something that sparks an idea.   Steve: Yeah.   Dallin: We'll, like you said, we'll keep them in-house and then we funnel them. We get them to the point where they self-sustain and all of a sudden, we have our house projects, our client projects and it's just a very healthy business model. You don't see a lot of very sustainable and scalable models. You know what I mean?   Steve: Yeah.   Dallin: Especially, because I've been with very, very, very big companies with these companies I've sold for and you find ... one of the things I like to do is study patterns and development. I'm really into the business development side of things. You look at the ones that have made it, that have succeeded and that are scaled to the massive, massive billion dollar companies and that's kind of what they do. They make sure they have kind of that happy medium, that solid balance in all these different areas and factors and that's kind of what we're trying to do.     One of the projects we're working on right now is a political campaign funnel. This is just one that's easy to scale and we're just pretty much hacking it and taking advantage events which one of the things coupling social media with funnels is current events, man. That's, they kill. If you can find something trending and good and that has ... that you can milk for a long time, you better believe we're going to find a way to make, pinch money out of it, right.   Steve: Yeah. Isn't it the-   Dallin: I'll let Kristian talk about that.   Steve: The political campaign funnel, is that the one you downloaded I think from Sales Funnel Broker?   Kristian: Ah, no.   Steve: Maybe that was you, maybe it wasn't. I don't know. There's some guy, he downloaded it and came back and he's like, "This is the coolest thing ever." I was like, "Just the share [funnel 00:27:53] free one I got from someone else. Glad you like it."   Kristian: Yeah, no. I got the idea from actually from Funnel ... I got part of the idea from Funnel U. To be honest, as much as we know about funnels, something clicked when I watched Russell's video inside the membership site for the political bridge funnel, where it was like, "I see it." It was that coupled with the, the funnel stacking I got that whole idea of moving them from a front end funnel to a webinar funnel to a high ticket and how you stack those.   Steve: Sure.   Kristian: Bridging and when all the sudden the bridging made sense to me, I said, "Oh my God." Just like what Dallin was talking about here. Ultimately our goal is to, take the same amount of time to do all this work to go and work with somebody and do a commercial real estate transaction, where we're an investor or we're buying the property and people are investing with us, as it does to sell a t-shirt. Just time is time, it's just the size of the value and how you frame your mind around it. We are in the process of growing our agency. The whole point of it is to, if you think of construction companies, really good construction companies constantly have work that's in place to keep their employees working, so that they have the best team, right.   Steve: Mmm. Yeah.   Kristian: That's what they're always talking about is we just have to keep work so we can keep these guys busy. It's not about keeping them busy, but we also want to have the team in place because ultimately when we have our ideas, we can get them shipped quicker.   Steve: Yeah. I've been approached by a few people lately and they're like, "I got these awesome guys. I absolutely love them." He's like, "What work do you have? I just don't want them to go anywhere else." He's like, "I don't care what it is. I just got to bill."   Dallin: That's exactly what it is.   Steve: Yeah, interesting.   Kristian: Yeah. That's the idea, but to get back to what we're doing right now is I got the idea of how Russell explained the political bridge and my dad had ordered 100 t-shirts from my best friend. My best friend did all the screen printing for the Super Bowl in Santa Clara.   Steve: Jeez.   Kristian: He's got one of the largest screen printing companies on the west coast, based here in Phoenix. He has a company very similar to what Trey Lewellen started with Teespring.   Steve: Interesting.   Kristian: He's set in and he came to us and said, "Hey, why don't you partner with me and just handle the marketing on this." He's talked to me about doing some marketing for them for different aspects of their company. Now we're working together and the whole idea came up I said, "Well, you know what? I think I can do it." Before I was hesitant because I was like, "Well, I'm in the digital media space. I'm selling digital products." That was big hangup was I've got to sell to these entrepreneurs.     Then when this political bridge funnel that Russell talked about when he talked about how you move people from this list to this list, I went, "Oh my God. I can build a list in anything. I can just bridge them." It was a combination of that video inside of Funnel U and my participation in Todd Brown's PCP, Partnership Coaching Program, where they were really working on educational based marketing, and script and copy writing. The confidence level in my own ability to write copy had shifted to where now MFA is outsourcing some of their done-for-you client work to Dallin and I and having me write copy and script for their video sales letters.   Steve: What?   Kristian: Yeah.   Dallin: That's real, man.   Kristian: That tells you the ...   Dallin: We scale fast. Remember that third principle. We scale fast.   Steve: Yeah. Yeah. I wrote all those down. That's amazing. What's funny is that people don't realize that it literally is the exact same amount of work to do a small company as a big one.     My buddy, I mean as far as building a funnel and things like that, my buddy and I were building an [inaudible 00:32:11]. It was the first funnel I ever built with ClickFunnels and it was a smartphone insurance company and we were ... we got out of that for a lot of reasons, but it was interesting though because I was building it. We put it all out. That's actually when I got into ClickFunnels and it was right after ClickFunnels left beta. I was like, "Hey, I'm going to build this whole thing out before my ClickFunnels trial runs out." I'd never built one and I just killed myself for the next little while. We got it out.     Then this guy approaches me in Florida. He's like, "I need a funnel for some of my ..." He was selling water ionizers or something. I was like, "Oh man. This is a big company. They're already making a couple million a year." I was blown away. I was like, wait, this is the same exact amount of work as it was for the small little startup. Anyways, I thought that was interesting you said that.   Kristian: Yeah. That's what we talk about is that it's easier to work with those bigger companies. They get it.   Steve: Yeah.   Kristian: You work with the smaller companies and they're worried about how much money it's going to cost them. The reality is that the more we put ourselves in a position to work with guys like you and Russell and guys like Todd and Lou Coselino and David Perriera and all them at MFA, they're saying, "Man, why are you, how come you're not charging double and triple?"   Steve: Yeah.   Kristian: Dallin and I are sitting here like seriously if they're willing to pay us to write scripts for, to outsource their ad copy to us for some of their client work, what's that say? I mean, we're literally working with, doing work for the guys that are considered the best in the industry.   Steve: That's ... Yeah. Yeah.   Kristian: It's just a mindset shift is what it is. That has made it a little easier to have a conversation with someone and say, "You know what? We can take on this project. Here's how much it is."   Steve: Yeah.   Kristian: They're like, sticker shock. Well, sticker shock. You can go and just have someone build the pages for you, but it's not going to convert. I know that for a fact because copy os what converts, right.   Steve: You know Tyler Jorgensen?   Kristian: You know what, it sounds familiar. I think I-   Steve: He said the same thing to me. He's like, "You charge 10 grand to build a custom funnel?" I was like, "Yeah." He's like, "Why not 15?" I was like, "I don't know. I'd never thought about that before." I thought 10 was kind of the mark. He's like, "No, no, no, no. I'd do 15, 20, 25." I was like, "You've got to be kidding." That is is just a mindset shift. You'll get better people to build for anyways, whatever it is.   Kristian: The big thing for us-   Dallin: True and at the same time ...   Kristian: Yeah, I don't know.   Dallin: You there?   Kristian: Yeah, you cut-   Steve: Kind of lost you there.   Kristian: The big thing for us is really to build a team, Steve, and to have that team in place and be able to have people that focus on all the different areas of the funnels, so that they get really, really good at that. They don't have to know the whole process because that's what I've spent the last two and a half years doing, right.   Steve: Wow.   Kristian: They can be part of this and be part of building something and helping these clients and really enjoy what they're doing. Then, like I said, when we have these ideas we can ship them. I know you want to know and your audience probably wants to know what it is that we're doing, which is what got you in. I mentioned my friend, Bryant. He's got this company like Teespring. He's got everything in place to roll this out. We had this idea for how to start doing that. We took advantage of knowing that the campaigns going on right now. I mentioned to you I think my dad bought like 100 Trump t-shirts from him. I was like, "Those are really cool shirts." My dad's like, "Yeah, man You should do this funnel stuff and figure out how to sell these to everyone. Look how crazy everyone is about Trump. Trump's going to kill it." At the time, it was still in the Republican Primaries. I'm like, "Well, I don't want to go build a funnel."   Steve: Yeah.   Kristian: "Then trump doesn't win the primaries." But as he started pulling away I'm like, "Oh, let's start testing some stuff." We tested one funnel and surprisingly the Facebook campaign got a lot of clicks, but there wasn't a lot of opt-ins and conversions on the funnel. What it did and I think this is one of the biggest skill sets that people who are elite develop versus people that are frustrated and saying this isn't working for me is understanding the information that they're getting and what to do with it. You might not have a winning campaign or a funnel that's making money, but to understand what kind of info you're getting and how to use that to do the next thing is that whole testing process is what separates those that are killing it from those that are getting killed. That first funnel that we did, didn't make money. Not at all.   Steve: Yeah.   Kristian: I mean it lost $1,200. I went to Dallin and I said, "Dude, this is awesome." He's like, "Huh?" I said, "Look at the retargeting list that we got." Then we went and we tweaked this and I said, "What if we change the front end," and at that time Mike Pence had just been named Trump's VP. I'm like, "Who the hell is Mike Pence? I never heard of this guy before." I started asking people, they're like, "No." Unless you're from Indiana, you don't know who Mike Pence is. I go, "Should Trump have picked Mike Pence? Isn't there someone else." I'm like, "Boom. Is there a vice presidential debate in the Republican Party?"   Steve: Yeah.   Kristian: We created a little mini survey around is Mike Pence the right one. First of all, you've got all these people that love Trump and they're hardcore republicans and now you're creating an internal debate. Everyone wants to voice their opinion, but they don't want to be judged.   Steve: Yeah. People get pretty intense about that for sure.   Kristian: Yeah. We created a mini survey.   Dallin: Oh yeah.   Kristian: We created a mini survey and we had this retargeting list from the first time and we started running ads. I didn't expect and I don't think Dallin either, that it was going to do as well as it did, but I mean, we had in less than 12 hours, we had 500 email opt-ins.   Steve: What? Oh my gosh.   Kristian: I was like, "Oh my God." I'm like, "Holy crap." I'm like, "What the hell's going on?" Of course the first goal is to try and get the funnel to break even. What we had to do was we were getting so much information so quickly that we really had to be on our toes and make adjustments and modifications. What we figured out through the first week of testing this is there's so much activity on this funnel. Just to give you the stats, after what was Dallin, really 6 days of running the ads, we got 2,600 email subscribers?   Dallin: Five and a half, yeah.   Kristian: Yeah. Five and a half days, we got 2,600 email subscribers.   Steve: Wow.   Kristian: K, the funnels not at break even, but here's what I want whoever's listening and whoever wants to take this information understand is the testing process. We figured out between two front end offers-   Steve: Which one was the winner.   Kristian: Which one's working better.   Steve: Yeah. Which one's the awesome one. Yeah.   Kristian: It's still not winning. Our free plus shipping is not, it's not helping us break even. The reason for that is because we're getting so many opt-ins. On a normal free plus shipping, you're not getting as many people clicking on the ads, right.   Steve: Right.   Kristian: Well, we're getting 5, 6 times the amount of people subscribing to the email-   Steve: Would you, in that scenario, would you ever try and get even less people. It'd be counter-intuitive maybe, but I would just start tweaking the free plus shipping, I guess.   Kristian: No. No. Well, no. We can't-   Dallin: The strategy-   Kristian: Yeah. We can't really tweak it because it's not like we're going to offer anything cheaper than free plus shipping. When you start looking at all the different things we can offer, there's not a lot of options, but here's what Dallin and I have figured out is that we think we've created a new funnel. It's not really new in the sense of what you and I and Russell and all these other guys think of.   Steve: True.   Kristian: In terms of Russel and [Daygin Smith 00:41:29] coming up with the black box funnel, right.   Steve: Yeah.   Kristian: It's just soft offer funnel, a front end soft offer. We think that we've come up with what we call a backdoor funnel.   Steve: Interesting.   Kristian: You get so many people on your email list. You get as many people to take the first offer and you get as many people to take your upsell as possible to figure out how close to break even you can get. If you look at 2,600 people, we go back and look at the numbers, only about 115 of those 2,600 ever saw the offer.   Steve: Huh.   Kristian: Now we have an opportunity to present those people with the offer again. Well, how do you do that in a way that's going to get a lot of people to open the e-     All right. Want me to ...We cut off here at the point of high dramas. As I was mentioning, we got so many email subscribers and such a lower number based on the email subscribers because we didn't expect to have that many, that we still weren't at break even, but we have a ton of people that we can show an offer to. It's a little different obviously because our price points ... We're doing apparel and things like that.   Steve: It's like delaying the offer almost on purpose, right. I mean this is ... awesome.   Kristian: Yeah. Remember, we started this whole thing with a survey, right, something that people were very passionate about, so a lot of polarity in there. They want their opinion-     They also want to know what everyone else thinks, where they fall in line here. We thought, "Oh my God. Somebody that votes, that voices their opinion, takes the time to put a vote in wants to know what the results are." We created a results page that shows them the results and has a special offer that all those people haven't seen. When we send it in the email and we tell them here's the results of the survey, the open rates are and the click through rates are sky high.   Steve: How long are you waiting to actually send them this results page?   Kristian: A couple of days, so-   Steve: Oh really. Wow.   Kristian: Yeah. I mentioned Actionetics. The whole reason that we started doing this is because we wanted to ... since we're having people take a survey and we're offering them this gift, we want to make sure we get as many people that take us up on that gift for taking the time to vote. We have a few of those triggers built in there, "Hey, don't forget to grab your free gift. We noticed you took the time, maybe something happened. Go back here and grab your gift." Then we make sure that everybody sees the results page a couple of days later.   Steve: A couple of days. That definitely is a different style for sure. You don't think that hurts conversions at all?   Kristian: No, I mean. It's a survey, right?   Steve: Sure.   Kristian: The point of high drama and the suspense and all that. We're still testing it, again, like I mentioned earlier that the biggest thing I think that separates those that are successful and those that aren't is to understand the type of information that you get.   Steve: Yeah.   Kristian: We may found out that we need to send the results sooner, but we don't know. We've got to test.   Steve: It's interesting positioning too of you saying, "Hey. It look's like. Thanks for taking it. Here's your results. I don't know if missed this, but just jump back and get that." That's interesting. Like they missed it. They missed the gift.   Kristian: Yeah. Yeah. "You forgot to grab your gift." That's our first step and then in the email that comes after they've taken the survey, "Hey, we're in the process of tallying up the results. We'll send them to you as they're updated."   Steve: Interesting. It keeps the loop open, basically.   Kristian: Hmm-hmm(affirmative). Exactly. Exactly.   Steve: Man, that's awesome. Well, hey is there a URL that we can go check that out on? I don't want to pollute or dilute any of your stats, so if not that's fine, but ...   Kristian: Yeah. We're just running ads to this right now.   Steve: Good.   Kristian: We're in the process of, like I said, this was just an idea that my dad came up with. I've got to give him credit for the initial idea, but now it's turned into kind of a new business entity, right.   Steve: Yeah.   Kristian: We're growing this email list and the concepts that Russell talks about the how to bridge funnels and lists and things like that. We're starting to build a list now in that republican, conservative, survivalist category. We're going to take it a step further and build out a home page and start doing some different stuff with it.   Steve: That's interesting. You're going to go through and who's going to keep opening all the emails over and over again, looking at all the stats of all the people around. These are the hyper active political caring people. You know what I mean? That's awesome. That's a really clever way to segment out those people. That's fantastic.   Kristian: Yeah. Yeah. You never know where your next business entity is going to come from.   Steve: Interesting. Gosh, well, hey, I know we've been on quite a while. Thanks for dropping all the bombs of gold you guys did. I don't know what happened to Dallin, but ...   Kristian: Yeah. He just texted, said thank you. He's trying to get back on, but I know we've got to take the kids to school and stuff, so-   Steve: Awesome. Well, hey man, I appreciate it. Thank you so much and this was awesome.   Kristian: Well, thank you so much. I appreciate it, Steve. Love meeting new people that are doing the same thing as us and glad that we can reach more people that are trying to learn how this works and kind of help them understand the process and that if they just stick at it and keep testing. That's really the big thing I think is testing and learning is how you get better at it.   Steve: You're kind of a scientist going through this, for sure. Going in an industry you know will make money obviously, but whatever you're doing specifically, you might almost always be the first. The think big, start small and scale fast. That's huge.   Kristian: Yeah. If anyone wants to connect with us, Dallin and I are both on Facebook. We mentioned Periscope. I do a lot of broadcasting on there with what I call the Live Stream Marketing Funnel Show. We're rolling, if people are interested in learning how to use live video, we've got that coming out. Yeah. Connect with us on social media. Kristian Cotta and Dallin Greenberg.   Steve: Okay, yeah. Then you've got the Health Success Podcast. Guys, go check him out at Health Success Podcast as well as he said Live Stream Marketing?   Kristian: Well. Yeah. Just go to KristianCotta.com. It'll take you right there.   Steve: Cool. Awesome.   Kristian: Kristian with a K.   Steve: Kristian with a K. Cotta, right?   Dallin: I'm in.   Kristian: Kristian with a K. Cotta. Dallin's in here. He just got back in.   Dallin: Dude, I don't know what happened. I was getting all excited what Kristian was saying and then just cut off.   Kristian: It's the point of high drama, that's what we were talking about.   Dallin: I know. It was. That's what I told Amy. Is it over?   Steve: It is now.   Kristian: Yeah. We're just wrapping it up.   Steve: Awesome.   Dallin: Sorry.   Steve: It's good. Hey, thanks guys so much.   Kristian: All right. Take care, Steve.   Dallin: See you man.   Steve: All right. Bye-bye.   Speaker 4: (music starts) Thank for listening to Sales Funnel Radio. Please remember to subscribe and leave feedback. Have a question you want answered on the show? Get your free t-shirt when your question gets answered on the live Hey Steve Show. Visit salesfunnelbroker.com now to submit your question. (music ends)