Ryan Miller
My name is Ryan Miller and for the past 15 years have helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of making billions. Let's get into it.
Hey, founders, have you ever wondered how the best-in-class entrepreneurs approach growth that just makes venture capital investors lineup out the door just to work with you? Well, on this week's episode of making billions, I bring on my dear friend Travis Steffen. Join Travis and me as he discusses how he grew his eight startups from inception to exit granting him over $700 million in exit value. growing your business while working with professionals are all critical skills we need in our pursuit of making billions. Here we go. Hey, welcome to another episode of making billions. I'm your host, Ryan Miller. And today I have my dear friend Travis Steffen. Travis is an eighth-time entrepreneur that has formulated the playbook on starting and scaling businesses. He's packaged all of that massive knowledge into his latest startup called growth team. His successes have gotten him featured in Forbes, Inc, Fast Company Fortune Magazine and more, he's done over 700 million in exits. So what this means is that Travis has achieved full god mode on growing startups from inception, all the way to exit. So you're gonna want to listen all the way to the end, where Travis is going to reveal some of the most iconic wisdom he has gained from scaling and exiting over eight startups. So Travis, my man, welcome to the show, brother.
Travis Steffen
Thanks for having me on the show.
Ryan Miller
I've read a lot on you. And you and I've talked offline. So impressive, you've done so many wonderful things. But I'm sure I'm just curious. Where did it all begin for you?
Travis Steffen
Well, it wasn't the traditional path. I grew up in a really blue-collar environment in eastern Iowa, a lot of farmer factories there. And I did not have any idea that I wanted to be an entrepreneur in any way. In fact, I didn't know any entrepreneurs on my friend's parents were entrepreneurs at all, I didn't really know any business people. I knew people that worked on farms, people that worked in factories, people that were like dentists, and teachers, and so forth. But the thought of being an entrepreneur felt like it was reserved for like the upper crust, I was not that. And I also realized very quickly, over the course of time, both before and during college, I was pretty much unemployable and realized that I was just not destined to work for somebody else. I think the longest I held a job except for the furniture store that I worked at the high school here, and there was about a day and a half. And that was the amount of time it took to realize that I just didn't respect the person that I was working for. And I didn't want to learn from them. They were just normal regular jobs that people would have for money. So I did what anybody would do at that point in time. And I decided that I wanted to become a professional online poker player, right online poker player. Of course, of course, that's the rational path if you're unemployable. Honestly, before that, I went to college to play football went to the University, Northern Iowa, I can't say that I played I was on the team before I bought my Achilles tendon. Two years in, and that dream was out the window. So that's when I turned to online poker. And that gave me my first taste of what working for yourself was all about. It was up to me to decide how much I wanted to throw myself into it. It's not what you see in the movies. It's a lot of math. It's a lot of study. It's a lot of repetition. It's a lot about developing instincts around situations because an online pro in contrast to like the live pros that you might see on television, wearing their sunglasses at the table and online Pro, oftentimes, you're a massive multi table grinder. That means I had 24 tables across two widescreen monitors, I had a heads up display overlaying data that I was data mining on all my opponents. I was watching training videos all day long, I was reading every book I could find. I was organizing and participating in study groups. I was living on the forums on the online poker training sites. And eventually, after about a year, year and a half, got to the point where I was a winning player and actually starting to be an instructor. my graduate thesis for my first master's degree ended up being a hybrid of elite strength and conditioning sports psychology for online poker professionals. It was called Peak Performance poker it does still exist sells about five copies a year, because online poker is no longer legal in the US as of April 15 2011. That experience though, gave me a taste of what it would be like to have a situation where I was the boss had a limitless ceiling. It was all up to me on what I wanted to build. But I also needed some sort of physical outlet. So I started fighting MMA I was a boxer growing up as a kid, so I was a nerdy little kid, my dad put me in boxing to where to defend myself, ended up going the Junior Olympics, silver gloves, Golden Gloves route. And when MMA became a thing, I lived 30 minutes from at the time the top MMA gym in the world, which was the Military Training Center had like four World Champions there. So I would just make the commute up every day, get beat up and go home. And then when I went to college, I brought that love for that sport at the time with me and after I could no longer play football. I started fighting professionally and moved to Thailand. fought over there lived in the ferret Fairtex Muy Thai in Pattaya, Thailand. And while I was there, I kind of recognized I just had this weird experience with art where I realized what am I doing with my life? I'm you're getting punched in the face for a living or I'm trading money with a bunch of other Were nerds on the internet. And that were like me, and there was no purpose, there was no legacy. There's nothing I was doing for the world, there's no value I was providing to humanity in any way. And that was a big cognitive wake up call. For me. It was not born out of psychedelics or anything like that. It was just me sitting on a boat, in the middle of the Thai ocean, and realizing that this is not what I want to do with my life. So I had already started kind of my first company. It was a kind of a clone of tap out, which was the Nike of MMA at the time. And I've watched a number of their videos, and the founders, specifically one of them in particular, they called him tap out punk ass was his like, stage name, so to speak. These guys were I remember them. They were big characters, right? Yeah, they were characters. And I saw these guys. And I was like, these guys look like me. They have a whole bunch of tattoos, they curse a lot. They don't look like they went to Harvard, right. And I just realized that these guys are like, this company is doing like 500 million a year. I can do this like this. This makes sense. Like I could do what they're doing and didn't know anything about business. But that was what got me into startup land. So the first company I started with EECOM company, we were a clothing line, we were just selling, I was driving to all the local shows in the Midwest, and then they show selling T shirts and gear out of my trunk. And we bought booths ringside, and we were selling to the crowd. That was my first taste of what it was like to be a business owner, it was hard work, I was learning on the fly, I basically, you know, took my student loan check and online poker winnings. And that's what I used to build the company. And I knew for whatever reason that like that was an important experience, even though it would make me whole heck of a lot of money, we did end up selling it. But when we sold it, it was just a very mild amount of money above and beyond all the investment I put into it. And it gave me enough to start the next thing. Weird story though, years later, I ended up going into business with becoming friends with Dan Caldwell from Tapout. So that was a really cool experience, we still text here and there. And he's just a really great guy. And he's, he's still super inspirational to this day, even long after they sold tap out. And just a really, really brilliant dude, and such a hard worker. So I learned a lot of work ethic from from that experience. And then just one after the next realized, the first one taught me something to use. And the second one, the first and second one taught me something to use in the third one, and so on so forth. Right, so I started to create a playbook because every time you sell one of these, if you sell to someone smart, that's done it before, they're gonna noncompete you in that industry for a period of time. So you have to take those skills and reapply them to another industry. And over the course of time, I realized, okay, this is definitely what I'm going to do for the rest of my life. But I was definitely not one of those people that could sit in one spot and work on the same company for 25 years, which is if you want to make it and entrepreneurship is the the the easiest and fastest path to be able to focus on one thing for a very prolonged period of time.
Ryan Miller
And isn't that a funny thing about entrepreneurs is that we'll work 90 hours a week for ourselves. So we don't have to work 40 hours a week for someone else, like we crave freedom. But also the other thing you know, I've been doing the show for a little while now. And you know you you are amazing and magnificent in the things that you've done. But the thing that you have in common, which is most of us don't have a lot in common with traditional status quo society. So for those who are listening to Travis's story, he's traveling, he's doing poker, he's finding all these things. He's on this wild adventure, I just picture you in Thailand, and you know, all these these kick boxers with cigarettes in their mouths, and just like such a different world that they're doing. But the thing about entrepreneurs, especially in the personality, now that I have the the ability of hindsight, I can look back, and I'll say, yeah, like every entrepreneur that I've known, and myself, we're kind of wonderful weirdos. Like we have a very different approach on life. And I mean that with as much love like, I'm right there with you, brother. And so we're a bunch of beautiful weirdos that are just our minds are a little bit wired different is to just, we can't state we can't sit down, we fear being locked in sitting at a desk having a heart attack over a spreadsheet. And we're just like, no, like, we see things holistically. We're saying, our career is part of our life. And this is not how I want to spend my life. And so you create that freedom, you work 90 hours a week, so you don't have to work 40 hours for somebody else. And we're just a little bit different. And so I hope you feel the the connection that Travis has his approach, like, yes, he's had wonderful businesses, and we're about to get into that. But really, it was the wiring that made the difference. In my opinion, it was the wiring that Travis had to say, You know what, I'm gonna try different things in everything that you've done, you've assembled and you've built that into the ability to start a business back then and playing poker was just playing poker. But now looking back, you're like, there was so many skills that I rolled into entrepreneurship, you're fighting the poker, you're early startups, and you just continue to roll all these things forward. All from the typical experience. Would you agree?
Travis Steffen
I would. Yeah, I would say each of those experiences were instrumental, even just growing up in a blue collar environment, seeing my dad who never went to college, he was always just a manual break your back everyday labor. And he showed up every single day, six days a week, 14 hour days. I never saw him miss a single day of work. He never complained one time, and he or my mom were always at everything that I ever did as a kid. One of them was always there, and the consistency that I saw And the work ethic and the fact that he knew he was just, he was grateful to be able to do that for his family, that was a huge piece of that, that I would not have gotten had I grown up with money, right. So I would not like a lot of people think that it is a blessing to be able to grow up with money, and I disagree, I would have never wanted money at all growing up, because you grew up without the hunger, right? You grow up without a desire for something more and seeing what could be possible. Beyond that, that small fence. And then poker taught me how to desensitize myself from risk. And then they taught me how to be terrified and still be able to think, right, and then every one of those companies were the things that taught me tactical skills, strategy, ways to hire and build company culture and, you know, raise money, things along those lines, all of those things, when combined are all required. And even then it's not enough, right, even without all the experience in the world. If you're taking big swings, and you're trying to be innovative, you're still gonna fail. Yes, I have had eight exits, but not included in there are all the ones that actually crashed and burned. And no one really talks about. So all of those are just as useful.
Ryan Miller
Yeah, it's, it's almost like, if you've ever heard the term raccoon entrepreneurship, it's kind of a silly little view on just like bootstrapping, where you're able to like a raccoon, you take a piece of a pallet and an eggshell and a rusty nail and you're able to build a house and, and so you just find these little things around you that people overlook, and you see me garbage, but like, again, that that different viewpoint or or I would say that high intelligence that came that you're able to find these little pieces, whether it's information or people or resources, build a system and scale that system into a company all the way to exit. So it's absolutely brilliant. So you're on your latest thing, your latest startup, maybe you can walk us through a little bit about all the kinds of trouble you're getting into these days.
Travis Steffen
Sure. Yeah. So after my last exit, this past February 2022, took some time off, I was thoroughly burned out. And honestly, if anybody is out there, I think there's a company that I worked with in TechStars, trying to cure burnout for founders, but there aren't enough of them, right? Because it is a real thing. And there is really no cure, you don't just get there, right? It's something that you continue to have. And what I did, I just took like six months off and, and just kind of hung out and helped companies here and there. I'm a mentor for all the big Silicon Valley accelerator programs that you've heard of. And that's that was really fulfilling. So I continue to do that and realize how can I do something like this? How can I help founders that are trying to change the world, grow their businesses in a way that makes sense for them, because even though there's a lot of Guru led education out there, most of them are still just really struggling to understand what to do next. And a lot of them plateau and don't know why. But if you've been in the room, or you've been able to learn from some of the top growth minds in, you know, the 1% of 1% companies within the valley, and outside of it, there are things like systems that you're able to pick up and ways of thinking that you're able to pick up and frameworks and processes and just ways to make decisions that aren't really taught anywhere else, even in the highest of the high levels of business schools. So like I, I didn't have a business degree or MBA when I started. But I did get one when I was running. My last company while I was building this last company, I did finally get an MBA. And now I'm in a doctoral program for marketing. This stuff isn't even taught in any of those programs. So like, and the reason I went through that process was to verify what all there was to learn from all the sources that existed because I was seeing so many different perspective, people that worked for McKinsey, or people that worked for Bing, or people that worked for Google, or people that worked for, you know, their own thing, always all thought in different ways. And people that were in academia, and I wanted to collect all of that with the intention of creating some sort of unified theory of everything for business growth, because there's so many important companies trying to solve actual big worldwide problems, that because they don't know how to grow and architect their business to elicit that outcome, that solution they've created, which is what they're the expert in, will never see the light of day and help other people it's supposed to help. So being able to have done that, being able to have those unique experiences, you know, cause me to sit down and say, Alright, you know, I'm gonna sit down and actually try to create something that I can first walk founders through individually, then try to create some sort of system that can be used at scale by even the smallest companies that want to learn. So that's what we're trying to build the growth team right now. It's growth team.ai, there, it will redirect to a different growth team site right now, because we're still building our AI component. And I didn't want that to be false advertising. But inevitably, the intention is to replace or at the very least, heavily augments a full time VP of growth with like, 1% caliber Silicon Valley knowledge into any subscription based business. We have not cracked the code for any other business model yet. So subscription based is who we're focused on. But the intention is to replace either the head of growth or the entirety of the growth team, right, which is usually composed comprised of a designer and engineer, a strategist, an analyst, right? That's the traditional structure, that and that was born out of, whether it's Chamath from Facebook, who was the first ever real head of growth for any Silicon Valley company, or Sean Ellis or Brian Balfour, or any of the other like elite, you know, growth minds in the world. I tried to do Take as much from them as I can, I've tried to consume everything they come out with and have as many conversations with them as I can. And, you know, I have not been able to have conversations with with one or two of them, but I have with others. And then I've taken all of that to try to put it into one cohesive system that is then installed in these companies that they can use. And the intention is to show the efficacy by guaranteeing that we're doubling their growth rate within 90 days, or they get a full refund, plus, I'm going to send them some extra cash, right like that.
Ryan Miller
It just sounds like you'd be stupid not to work with you guys on that now. So you would be in especially you got to be a little bit scrappy, a little bit resourceful, right, like a raccoon, we kind of said, I'm sure there's more flattering animals, we get us better. When you're an entrepreneur, you're working your tail off, and everything is about squeezing as much value out of the limited resources that you have, especially if you're bootstrapping. But I can promise you take it for me. If you're if you want to be VC funded, or you are currently VC funded, you will know or come to know that your VPS will push you hard on growth aren't Oh, like, how was it growing? What's the revenue growth was multiple? How are we moving this forward? And so working with Travis and his company, a growth team really helps you to gain the confidence because it's better to have if you've got VCs and they're friendly, and they're contributing and most are, but until you're not growing, then it's gonna be a little bit more dense, we'll say. But working with you guys helps produce that growth keeps your VC or maybe you've just had an angel investors, hell, maybe it's even your mom, I don't care if someone who's investing wants to see growth. That's why we invest in startups. And so that can be an issue and obviously, no growth just like human beings. If you're not growing, you're not moving forward, you're gonna die. And so what Travis literally does, it's down to the game of choice between life and death. And Travis and his company, not only has he come to know that through all of his exits, but he's also put that whole playbook together and brings that to people as a as an augmented VP of growth. Yeah, I wouldn't.
Travis Steffen
And when people hear that, by the way, when people hear that guarantee, they're always wondering, like, what's the catch? And the catch? I already said you have to do you have to do exactly what we say, right? You have to make it a priority. Because a lot of times where the where I, where I see people fail is they're like, Oh, well, because part of the philosophy is like, we want to make sure that you've gotten like model market channel product message fit, you know, those are their 10 derivatives of that, we want to make sure all those hit first, before we actually start the process. So that's like, we're very selective on who we work with in that regard. Because those take a little bit longer. In some cases, if you've already built a product without the correct, you know, interview sequences, in all likelihood, you build something that doesn't fit with one of those required areas to elicit high growth. Once that's done, it's just math, science, behavioral psych, and speed, those four things, right. And if you don't buy into the system, if you don't allow the company to be about growing, and you say, Oh, well, we'll just put these, you know, 15 experiments that we need to run in our, like product backlog, six weeks from now. And then we'll like start to build them then because we need to do some, you know, administrative dev tool behind the scenes, you know, I know how important those are, but they will not elicit growth for you. They're just going to make your engineers lives easier. Right. So if you don't make it a priority, that is the catch. Right? That is the catch.
Ryan Miller
Shocking. Yeah. So not prioritizing your growth will lead you to not grow. Yeah. Thank you. That is absolutely incredible. And I hope as simple as that is that Travis is saying, it is so profound. So please don't overlook that, that you need to have both hands on the wheel when it comes to growth. But you know, most seasoned entrepreneurs such as you and I were able to understand that the people just starting out, we're hoping that we're delivering some value. Through Travis growth team through the show, there's many avenues that you're reaching out. And all of these are resources. And depending on how well you use those resources to promote your growth can have a large determination on where you end up on your exit. And let's, let's hope that your exit is a sale and not just we're closing our doors because we couldn't grow. So working with you certainly helps them to go from launch all the way to profitable exit. So as we round through base, and as we you know, we've talked about amazing stuff, I mean, your wild ride and Thailand and MMA and online poker and all these awesome things. You know, I wonder if you can summarize from all of your vast knowledge, eight startups all these exits 700 million and exits. I'm just wondering now that you have the benefit of hindsight, and you can look back, what advice can you provide? If there's like, you know, two or three different things that you could just summarize the saying look like, here, if I can leave you some value today? What would Travis say to the budding entrepreneurs?
Travis Steffen
Yeah, so I'll give a nugget for different cohorts of the audience, the first one people just starting out. And one of the things that I get a lot when I go and speak at a university or I speak to an accelerator program or something along those lines, or just a new entrepreneur that has questions, a lot of masks like what's the first thing you do when you have a new idea? And the answer I give usually surprises people because they're expecting something tactical or something along those lines. And my answer is always I tried to forget it. I tried to forget it because the idea came from me. And that's the wrong place for the idea to come from I've we've glorified a lot of entrepreneurs. For being these like big visionaries. I'm doing this in air quotes for people who are listening. But I think that is a much, much more risky path. And if you if your ego needs to be satiated by knowing that this was your idea, go Go ahead and gamble. That's totally fine. I'm a gambler too, as you know my history, but in entrepreneurship, the stakes are a little higher, you're gambling with years of your life now. So you're not just gambling with chips on the table in one night. So what I would say in this case is thank the idea for bringing you to the table of entrepreneurship, set it aside and forget about it, get incredibly interested in a specific type of prospective customer who has money to spend on solving a problem, that's super important thing. Because if you want to have a thriving business, you have to be able to have your customers have the willingness and ability to pay you money, right. That's, it sounds crazy to some people. But you know, because yes, there are a lot of other people who need to be helped. But as a business, part of the objective is to make money so that you can grow and solve more problems for more people. So finding the customer subset with money with readily available contact information. So you don't have to scratch and claw to find a way to contact these people who are willing to hop on the phone with you and tell you about their problems in doing so what I would recommend is being able to come to the table with a really rigorous structure for one to one prospective customer interviews in a way that doesn't bias the responses of the people you're talking to, because you're not looking for validation of your idea. Again, your ideas serve its purpose already, it's out the window, you're wanting to get into their minds and mined for gold. And you want to then look at a large sample size of those, those customer interviews and try to find patterns, right, don't look for patterns initially only look after you've done at least 20 of these interviews, because that's the minimum number that it will take to actually find the goal that you're looking for. And one of the resources I love for that there's a great very short book called Lean customer development by Cindy Alvarez. And she outlines a really, really great process to follow for structuring these one to one customer interviews. And, you know, just recommend following it to the letter and have as many of those as you possibly can, the customers will tell you things like this is the problem I'm experiencing, this is what it's costing me. So this is how much it's worth for me to solve it. This is where I'm looking for solutions. And the whole time they're describing the problem in a specific way. So in those interviews, what you're getting across 20 Plus, and the more you can do the better pattern, basically you're getting the knowledge of what problems to solve and what outcome they want. So you can build a product for that. They're telling you where they're looking for solutions. So it's going to give you clues on where to market, they're describing the problem. So it's giving you clues on how to write your copy. Like they're gonna give you all of the answers if you just get curious enough and set your ego aside to go search for them. So like if you can just do what most most people think is the boring stuff, which is go have conversations with no other objective in mind. But to just get curious and get that information. And don't stop after you do three of them. Don't stop after you do five or 10 of them. Because a lot of people will want to do at least 20 of these interviews, because you're gonna be surprised, don't try to generate any conclusions with a small sample, because inevitably you're going to fall for fall prey to human bias. And you're going to start to develop an opinion on what you're going to hear in the meetings that follow. So just forget about it, record the entire thing, take notes, set them aside, build up a stack of 20, then go back and analyze, ask questions from there. That's when you create some sort of hypothesis.
Ryan Miller
And that is absolutely brilliant. So I mean, I'm sure you got a lot of golden nuggets in the chamber. But I just want to recap because there was a ton of valuable liquid stuff just at that one point. So not only conducting customer interviews, but doing it the right way. And you said the book, Lean customer development is pretty much the manual on how to do in person interviews in person is better than maybe zoom if you can do it. If not, it's fine. But you know, it's preferable that way. But then you have your initial advocates who will start buying the product, because you listen to them, you iterate it, you created a product around what their feedback was. And now you can start getting early revenue. And that is a great way to start to bootstrap Oh, my goodness, like conducting revenue, using your feedback loops to also do your first client acquisition, which is that seed capital sort of from sales. I mean, there's so many elements that are absolutely brilliant on that. So thank you for that. What else you got?
Travis Steffen
Early founders who raise money too early, oftentimes will fall prey to throwing money at problems. If you bootstrap a little bit early, you start to build the muscle of getting scrappy and creative. So that's another benefit that that early like customer financing can get, you're gonna have limited runway, always you're gonna have to actually solve problems with your own brain rather than with agencies right or, or what have you. So the next cohort, we can kind of try to illuminate some, some future pathways to follow would be listeners who are trying to potentially raise money for the first time, maybe they don't have a wide network of VCs already. Maybe they haven't worked for a venture back startup and built a reputation with those investors. Maybe they don't have an alumni network because they went to Stanford or something like that, right? You know, maybe they're blue collar and went to a state school in the Midwest and have been kind of like heads down grinded out operator for their entire career and then suddenly realize, Oh, my God, I need to raise money for some. So what I would say to those people is like when you Google it, and you look at the regurgitated and recycled information online that says do not use cold outreach to raise money. I'm going to say that I've raised almost $100 million in my career, only using cold outreach. It does work. If you Think about the process. If you've never raised money before, it's no different than an enterprise sales process. In my opinion, if you think about the investor as the customer and your product as you're stuck, it's the frame that I think is most useful moving forward, because you can reuse a lot of the sales tools that exist. I mean, we've always used tools like HubSpot sales pipelines in the past for, you know, our active cap raises in at one point, I think we use Pipedrive, and others a really great tool, if visible, you know, that already has a lot of contact information baked into it, right. But if you don't have that contact information we've just identified, you know, seven or eight different companies that are venture backed that are either same sector, different products, or similar product, different sector. And I've checked those to a lead gen Freelancer on Upwork for $200. And I said, Find me the contact information for all the investors in all these companies. And I want to get at least you know, 150, or 200, validated forms of contact information for reputable investors that I know invest in at my stage. And then I'm just gonna treat it like an enterprise sales process. First things first, I'm gonna send a little nugget to pique some interest to try to turn a cold lead to warm, and I'm gonna like my call to action is going to be Can I send you more information, it's like a very brief email with a couple bullet points, maybe a short two or three sentence paragraph. That's it right? The next step is like, I'm actually going to send a deck and I'm gonna send some information with the intention to get them on the phone. At that stage, I've usually got an associate or an analyst. And then my next call to action is to get familiar enough with their funds to figure out what their thesis is what their process looks like. And the next call to action is to get me on the phone with a decision maker, so they can take me to Investment Committee, if I then I'm able to get to the next step in the process. And it's just a series of micro conversions throughout that process. I'm not trying to get an investment on the first or second email or third email or anything like that, right, I'm just trying to learn about them, allow them to learn about us. Because the way I see it, VCs are like T rexes with a very, very picky diet, when they see something in thesis, they're gonna gobble up as much of it as they possibly can. But 99% of the time, the VCs you connect with, you're not gonna be in thesis for them, and you cannot take it personally, you cannot get defensive, you cannot go that route where you start to see dollar signs in your eyes. And as soon as they pass, you say, well, we didn't want your money anyway, you're not the right investor for us. Forget the Oren Klaff. Crap, right. Ask for referrals at that point that makes that makes total sense. Thank you for your feedback, is there anybody in your network, you think that might be a better fit, where where might we have lost you in this process, so we can iterate on our pitch moving forward. Now, five out of six folks won't really give you much in terms of information, but the ones that take the time to do it's incredibly, incredibly valuable. And every single time just like any sales process, every pitch you get is another rep that you've gone through, and you've become better and better at that. I think with Grow Flow, even after seven prior exits, it took us 150 pitches to get the first Yes. But when we got that, yes, they took the entire round, you know, and because it was it took that much. And these, those of those guys eventually came from a referral from someone who passed. And it was just because we weren't a thesis fit, and they couldn't invest, not that they didn't want to, but they couldn't. So that's that's something to keep in mind if you're a founder. So hopefully that simplifies the process and demystifies it, it's not just get into a room with a bunch of, you know, big cheque writers or anything like that, I guess that does happen in life, I've never been a part of something like that. So it's just, you know, you do what you can to get in front of people you have to and do the best you can to make it feel like a win win.
Ryan Miller
I love that. And so when you have investors that are on the hook, they're on your board, or there's they're involved, somehow, obviously, you've received capital from them. They're gonna want investor updates. So you talked about sharing your thesis and different information on closing the deal. Now that they're there, and you're fundraising, even during fundraising, especially after as well. But you know, some businesses have a lot of good stuff going on, and a lot of scary things all at the same time, kind of like a poker game. And so, you know, how have you approached that when you have both good and bad? I mean, how do you what's, what's your philosophy, as far as working with investors, when maybe less than savory things are going on in your company,
Travis Steffen
most founders only share the good things. And I've always been very liberal about sharing what's not going well, because these people will see a lot more situations from the periphery and have portfolio companies that are going through and solving different problems. And if you don't share the problems you're experiencing, and every business has problems, every business is a series of solving problems. That's why they exist. So if you hide them, you're not going to get any help. These people want to help you, they have a stake in your company, and they want to see it grow. So unless you allow them to help you solve those problems, or at least to help you find people to solve those problems, they won't have the ability to do it. And you're just going to be alone. So like, for example, when we were standing at our last customer success team, I didn't have a ton of experience setting up Customer Success teams at the time. So I just called our lead investor, and I said, What are the three portfolio companies that you have that have the best customer success teams? And can you get us on the phone with who's leading it? So we can ask them a ton of questions and figure out a shortcut to like set something up that actually works. And that ended up becoming one of our strongest business units a year later because we had that advantage of actually asking for help when we needed it early on.
Ryan Miller
So I love that and let's go for let's go for a hat trick as we In Canada, three, what's the what's the third tasty tip that you would share with the budding entrepreneurs out there?
Travis Steffen
Let's say you're not venture backed for a second, or let's say maybe you are in your between cap raises, and you're just operating. And you're a founder who is frustrated, because every single time you solve a problem, you feel like you have another one pop up. And there's no reprieve, right? You feel like you're doing something wrong, and you're a bad founder of bad SEO or bad whatever your title is. And one thing that I love to continue to think about, in fact, I have a little like, weird plaque on my wall. As a reminder, I had a lot of those actually, with quotes around my place where the the things that I need to see at various points in time various like, quotes, I think I have like five levels of leadership somewhere and things like that, right. But this is one, it's called the Chinese rule three and 10. All systems break down every time you triple them every time you triple the throughput, right. And the reason why this is important for the founder, that feels like they're stuck in the constant game of Whack a Mole problem solving, is because if you're building your systems correctly, they're going to break down, they have to break down as soon as you triple the throughput, if you over engineered it, and you engineered it to to, to compensate for way more throughput than that before it breaks down, you've given yourself a lot of unnecessary bureaucracy and solve way too many edge cases that you should not have tried to solve at that stage, because it would just slow you down, if you did it correctly, you're going to find that there will be a point in time or one of your departments just lights on fire randomly, and they're super behind. And they're really stressed out. So you have to put your attention on that help them rebuild their systems, and then not all of your business units are going to scale at the same rate. So the next one is gonna break down if you solve that one. And then the next one is gonna break down after you solve that one, but the ones that you just solved are really strong for next year and change until you triple the throughput, right? So it's important to remember that that is business growth, it's not preventing you from growing like that's what it actually is, you're feeding more throughput through a machine that eventually can't handle it. So you have to re engineer the machine, right. But if you have re engineered it to handle way more too early, you're gonna handcuff yourself to a desk, basically, you know, and you're not going to be able to move you're not gonna be able to operate or adapt or, or actually bring in customers and your competitors who will overtake you because they're just a little bit more nimble. So build the solutions that you need, when you need them. And no earlier if possible, now you can preempt, when you'll have to build those systems. So they're not just up in a blazing fire. And they're just starting to smoke a little bit, right? by just putting a reminder in your calendar twice a year, let's reengineer the business unit a little bit and figure out where we're breaking down and what's suffering, and that sort of thing. And you can just use preventative medicine, rather than surgery to actually solve those problems.
Ryan Miller
Yeah, brilliant. So as we wrap things up any last minute comments, anything you'd like to say? How can people find you if they want to work with you if they feel inspired? Or just want to get to know you? What's the best way to connect offline?
Travis Steffen
Yeah, I mean, first and foremost, it was definitely a pleasure being on the show, you're a lot better organized. And I've probably done three or four dozen of these this year so far. And most of the time, we just hop on the line and wing it. But the the prep actually made the conversation a lot more cohesive. And just kind of the way that you architect the interview. So bravo, on that side of things. But in terms of how to contact me, you know, I'm on LinkedIn used to look me up Travis Steffen, two F's, two E's. I'm also finally active on social media for the first time in my career over the last couple of months, I thought and still do think that it's a massive distraction. And it's saBotage is the fragile psyche of the founder, because they hire people like me to engineer those products to be addictive. And they are, right. So you know, I am on there creating value, trying not to be a consumer sometimes failing, because I have engineered my feet, if you look at who I'm following, it's like a lot of cute dogs. And, you know, Lebron James. Yeah, of course, right. But, but yeah, you can find me there. You can also look at my latest book on Amazon. It's called viral hero. It's basically how to build a product with viral product architecture. So how to use your customers, as your most powerful marketers without them feeling like they're marketing for you, in a way that, you know, allows you to grow without spending money on marketing, in some cases, like there are some models that it's way better to pay for traffic than others. But, you know, we always recommend it growth team that, you know, you have one scalable growth model, you have one accelerant, and you have one converter, right? You're scalable growth engine is something like viral loops. It's something like user generated content, things like that things that regardless of how many users are coming through your system, like that breadth continues to grow, then you have one accelerates, that's when you get into things like paid traffic or direct sales, right? They don't scale nearly as easily. And they do inevitably top out by that time, they've fed your loop to the point where it's spinning on its own. And then you have one conversion path, right? That could be a direct sales rep. It could be, you know, an automated sales path, and things like that, whatever it takes to actually bring customers across the line. But, you know, one of the things that you'll find in viral hero is the ability to actually know you know, of the viral loops, which ones are which and then you know, at growth team, we've added all of the other potential methods as loop based growth models. Speaking of which, growth team feel free check it out growth team.ai it'll redirect you to my growth team.com When you go there, it will not look like The most sexy site in the history of humanity, it is very, very basic by design. And we do a lot of business through that very, very simple system, maybe we'll rebuild something that mimics its performance soon, that looks a little bit more sexy. But for now, like, that's what we're rolling with, because it works. And as soon as it doesn't, you know, that's where we get to the Chinese rule three and 10. Right, as soon as we triple the throughput, we will have to rebuild that system and we haven't had to quite yet.
Ryan Miller
Awesome, man. So in all of the growth team wizardry is, is used on your clients and helping them grow more than the website. Look, I'll take a company that knows how to work with a garbage website, not saying yours is but if they decided to cut costs, save on websites, so they could deliver a better product. I mean, yeah, like, the other day gonna get money because you delivering something of value. I'm not there for your website. So if we're
Travis Steffen
judging website quality based on aesthetic case, we're gonna lose performance, we're gonna win. So that's the bottom line.
Ryan Miller
I'm right there with you, man. So, you know, just to synthesize everything that Travis and I have talked about building a business from passion alone, that can lead you down some rough roads. The second thing that he said is just don't shy away from sharing sensitive data with your funding partners, whether it's current or future. And then finally, monitor all your systems to just further strengthen your operations. You do these things, and YouTube will be well on your way in your pursuit of making billions.
Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guest even better. And make sure to come back for our next episode where we dive even deeper into the people the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focused on your goals and keep grinding towards your dream of making billions
