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How a Security Audit can save your Business (Episode 118)

Justin Beals is the Co-Founder & CEO of Strike Graph, a compliance SaaS solution that helps companies move deals faster through simplifying security certifications. Within Strike Graph he has also established a foundational culture of employee growth and team diversity.

Before founding Strike Graph in 2020, Justin was dedicated to developing companies, products, and technologies in the human capital realm for over 2 decades.

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What you will learn

  • Why security compliance is crucial for businesses
  • Discover why compliance is a revenue issue (not just a legal one)
  • How companies are leveraging advanced technology such as AI to perform audits
  • An overview of the different cybersecurity frameworks and standards
  • How Strike Graph could save your company’s deals

Transcript

Jeff Bullas

00:00:04 - 00:01:06

Hi everyone and welcome to the Jeff Bullas show. Today, I have with me Justin Beals. Now, Justin is the CTO and Co-Founder of Strike Graph. He lives in a beautiful little town just north of Seattle. He’s a sailor and we've had a quick chat about that and Strike Graph looks after compliance and security for companies to help them earn revenue, move deals faster through simplifying security certifications. Before founding Strike Graph last 2020, he has dedicated himself to developing companies, products and technologies in the human capital realm for the past two decades. He's also established a foundational culture of employee growth and team diversity. And Justin is also going to tell us about why he cares about security and compliance because most of us realize that it makes their eyes bleed because it sounds boring but it's necessary. Justin, welcome to the show.

Justin Beals

00:01:06 - 00:01:17

Yeah, thanks so much for having me, Jeff. I'm really glad to join and if you'll permit me one correction, I'm actually an ex-Chief Technology Officer. I’m currently the CEO of Strike Graph.

Jeff Bullas

00:01:17 - 00:01:27

Okay, he was a CTO. He's handed that pain over to someone else by the sounds of it.

Justin Beals

00:01:27 - 00:01:30

I have a great CTO. She's amazing.

Jeff Bullas

00:01:30 - 00:01:42

Yeah, okay. You saw the light, moved on and became a founder. That's great. Thanks for the correction, Justin, I'm always happy to be corrected and my partner or what she's always correcting me so I'm quite used to it.

Justin Beals

00:01:43 - 00:02:33

Not at all. You know, you're right though, compliance is not a very exciting place to play. However, what it is, is a massive problem and I don't think you would have ever convinced me of that, but what we are seeing what the real challenges is trust. And the reason compliance is cropping up is that buyers of technologies, just like the one that we offer, I want to be able to trust that that technology, that company is secure. And so they're, they're requiring before doing a deal, some level of assurity and trust independently verified that they can share information, share their future, you know, share essentially the opportunity with you.

Jeff Bullas

00:02:34 - 00:03:12

So let's go back a little bit in terms of why you didn't think it was important, how you discovered that security and compliance was really important. And can you tell us a bit about how this enlightenment happened? So, because as we see here with Joseph Campbell, you know, with Star Wars, there's a call. So where did this call happen? And it happens at church quite often too. There's the call. This is maybe not a religious experience, but it was the call. How did that happen?

Justin Beals

00:03:13 - 00:06:27

Yeah. Oftentimes it's a visceral pain. That's certainly how it came to me. So I , you know, as you described, I've worked in tech startups for many years as a Chief Technology Officer leading product development, trying to develop innovative solutions and bring it to the marketplace. And all of the products I've built over the last 20 years or worked with teams in building, they've required some transfer of data, you know, to make that product operate. And so about six years ago I was invited by a very close friend to move from my home in Atlanta, Georgia to Seattle, Washington and be the Chief Technology Officer for a startup that they were working on. And the point of this startup was, we developed an AI product that would predict the likelihood that a job applicant would be a high performer. And it was a really great product. We had great efficacy and accuracy in our predictions and it was really a valuable solution to companies that were hiring between 1000 and 5000 junior staff members every year because I had a really hard time telling who was going to be a high performer or not. And when we got into the selling motion of our product, you know, our customers were people like Deutsche Bank, Morgan Stanley, large law firms, like national law firms and what I realized is the first time it had ever been asked of me and they would, the salesperson would get a champion inside the business. They would say, yeah, I really want to adopt this. And then we would get put into procurement and the first thing that would happen is, procurement would start asking, hey, have you ever done a SOC 2 audit before? Are you ISO 27001 certified? You know, what is the security around your solution? And honestly, no one in 20 years of working at enterprise product had ever asked me these types of questions before and what it led to because we had not accomplished those particular things was that our sales process was drawing out from 12 to 18 months. We were adding six months from the time we got a verbal to assign contract, just trying to get through a procurement review of our security practices. Now we had good security, right? We had implemented good security and we inevitably would pass through the review and get to sign contracts. But I was struck by the impact of the problem of not being able to get that trust quickly. Having that trust quickly meant that we were hitting our revenue targets on a quarter by quarter basis and not having it meant that we were missing them. And so we had a great, you know, that company was really great company. We had a great buyer for it and so we sold the company but I will continue to think about this real problem area and wanted to go see if not only I could solve it for my future companies, but my colleagues who were also starting companies and experiencing the same exact pain. And so that's really how I came across compliance as a revenue issue, not just legal compliance or liability compliance.

Jeff Bullas

00:06:27 - 00:06:38

Yeah, it's interesting. So number one, it became a block to actually your sales funnel or a high friction point to your sales funnel?

Justin Beals

00:06:38 - 00:06:39

Exactly.

Jeff Bullas

00:06:40 - 00:06:43

And six months delay in revenue can affect the bottom line pretty quickly.

Justin Beals

00:06:44 - 00:06:56

In a huge way. Especially if you're talking about enterprise deals that can range between $50,000 and $500,000 and you're trying to reach two million in ARR. It can break a company.

Jeff Bullas

00:06:56 - 00:07:02

Yeah, exactly. And the other problem which you mentioned was just doing it.

Justin Beals

00:07:03 - 00:07:42

Yeah, it was complicated and really, as we looked for solutions to the problem, what we found were a lot of consultants and I have this comment. I say it all the time. You know, you don't really want to practice the art of compliance. That's not really enjoyable at all.

You're trying to meet a bar, you know, like let's meet the bar. We want to be effective but we don't, you know, we don't want to buy $80,000, worth of consulting an auditor time to get through a nine month process. That wasn't a solution either.

Jeff Bullas

00:07:42 - 00:07:53

Yeah. So the challenge you had was trying to make the process and tech as simple as possible to reduce friction to get security and compliance in place. Is that correct?

Justin Beals

00:07:53 - 00:09:05

That's correct. Yeah. And I stumbled on a skill that I had gleaned earlier in my career that really helped me unlock the problem as I started to really research it. So I have a history in human capital and parts of that is an education technology. And then in the United States, every hour of education time is allocated against a standard. You know, in grade school you're looking for students to be able to do double digit division by a certain grade. And the questions on the tests are aligned to it. The chapters in the textbooks are aligned to it and I built a lot of ontological data systems in the past that essentially mapped a universe of information against a standard. And what I realized is that if I could help a company define a security practice that made sense for them. And I had already mapped out all the standards, I could tell them instantly how far they were away from achieving a standard at the same time giving them the freedom to innovate the security practice that made the most sense for their business. And that is a core proposition of our solution.

Jeff Bullas

00:09:06 - 00:09:12

In other words, you are performing an audit that basically using technology?

Justin Beals

00:09:13 - 00:10:10

Yeah. And we start with a risk assessment. We found it's the best kind of lens. It sounds very droll, of course, but it's the best lens actually for like a founder or an executive at an organization to say, hey, what should we be securing at the end of the day. So as our customers come onto the Strike Graph platform, they answer through a risk assessment that is already aligned to common security practices and at the end of the risk assessment, they're identifying the risks that matter to their business and they're identifying the security that makes sense for their business. And when they get done, they have, you know, maybe 60 to 100 different security habits. We call them controls that they say, oh yeah, that's something we want to do. And for every one of those little controls, like we want to encrypt our data at rest, then we know what parts of every standard that particular activity solves for.

Jeff Bullas

00:10:11 - 00:10:18

So are you using AI or other modern, more advanced tech to help do that?

Justin Beals

00:10:18 - 00:11:30

Yes. We have layered in AI from a modeling perspective, one of the most powerful ways we're using AI on our platform today is one of the common things when you're in a sales motion. So you're trying to get a deal over the line. You know, especially, usually this happens when you have the biggest deal your company has ever had and that customer is a really big customer there, a whale. You've wanted them really badly and they come back and they're like, oh, answer this security questionnaire for us and they'll give you this questionnaire, we've seen some there as long as 600 questions. Yeah, absolutely. And you have to go through each one and be like, do you encrypt the data at rest, yes or no and how, you know it's really pedantic and so we layered in an AI tool that essentially ingests that questionnaire and breaks down the questions and will look through your security habits and pull out the answers for you. So that type of AI tooling or machine learning and data science, it's gonna be really critical and of course we use a lot of natural language processing and the ontology, the relationships of the different pieces of data that we store to help us answer those questions. It's really neat, neat piece of tooling.

Jeff Bullas

00:11:31 - 00:11:37

Yeah. So what you're doing is you're accelerating the process and also reducing the cost of that process, is that correct?

Justin Beals

00:11:37 - 00:12:40

That's correct. And I think to highlight a couple of other things, the platform allows you to distribute those security habits. So one of the things that I didn't understand until I researched this is that, but this, I think all your technologists will understand. Sometimes there's an initiative and a little bit of it is technology and they're like, oh you gotta give it to the CTO because no one else understands it, compliance is a similar challenge. If you read the standard, really only about 40% of like a SOC 2 audit, which is the common one that people get these days in North America is cybersecurity. The rest, the 60% of it is general business activity. So some of it needs to go to your HR manager, some of it needs to go to the CFO, some of it needs to go to the CEO and so there's a lot of operation that happens outside of the CTO and so an important part of the Strike Graph platform is, hey, let's distribute the responsibility of this security work across our organization.

Jeff Bullas

00:12:40 - 00:12:43

Right? So you mentioned an acronym there, SOC 2?

Justin Beals

00:12:44 - 00:12:44

Yes.

Jeff Bullas

00:12:44 - 00:12:47

Okay. It doesn't mean you need to socks?

Justin Beals

00:12:47 - 00:14:28

We have a great bit of marketing kit, you know, with two socks that's says SOC 2 on them. Yeah, we hand them out like crazy at the conferences. So there are many different standards in the world that our security focused and for your North American listeners they probably will have heard of SOC 2 before. And it stems from the certified public accountant. The AI CPA essentially wrote this standard as a way of assessing independently, control activity inside of an organization, that security practice. And the standard is, is quite literally, kind of a tree structure of expectations that you will have some security solution in place for things like keeping data private or reducing the opportunity for fraud or transparency with the board about the risks that the organization may be facing and that's what the standard is now. There's many more, the most international one is the ISO standard and they have even worse acronyms, they just do it by number and so it's ISO 27001. And so SOC 2 and ISO 27001 are interchangeable. And my best description of them is they are a general security, generally defined for almost any business. And so they're very just very applicable broadly.

Jeff Bullas

00:14:29 - 00:14:41

So the other one which is in Europe, which we mentioned prior to hitting the record button here, GDPR, how important is that in terms of what you're doing as well?

Justin Beals

00:14:42 - 00:16:01

Yeah. So GDPR is important. We categorize GDPR a little differently than SOC 2 or ISO 27001. So every one of these standards has an assessment methodology or lack thereof. Some come with no assessment methodology. GDPR is actually one of those. And the way to think about GDPR is more like a liability issue and not necessarily a revenue issue. And when you're selling to a customer they might say, hey, are you GDPR compliant and you could not know or know that you're not and say yes and probably get the contract. There's not necessarily an independent verification, you know, an assessment methodology to make sure that your GDPR compliant. So the reason we call it a liability standard is that if you get caught then you can be sued. And so most of the time, the companies that are really concerned about having an assessment and you can perform an assessment, you could say, go in and check us and make sure we're GDPR compliant. They're really worried about the liability problem. We certainly solved for that. But the real reason our customers come to us and want to work with Strike Graph is we're focused on the types of security that unlocks revenue.

Jeff Bullas

00:16:02 - 00:16:39

Right. That's what you talked about is essentially accelerating compliance through making audit easier. Yeah, cost effective. So that you can actually tap into revenue faster. So do you have any, so have you got any case studies without mentioning names potentially that you could share with us in terms of the big problem and what you did, you know, thumbnail sketch. That would be really good because that gives us some context and in terms of what you really guys really do and the magic you have under the bonnet. So yeah.

Justin Beals

00:16:39 - 00:18:44

Yeah. So I would say just in the last six months, a really typical story is that we'll get a call from a customer, let's say they have a new startup and they'll say, hey, we know this is going to be a future issue for us, but we're not quite ready to get certified just yet. And so we have a tier of our product, we're like, hey, let's get you in the door. Let's get you designing the security posture and let's get you operating it and at least you'll have something going on documented so that when you're, when it does become a problem, we can get you through the audit and then maybe less than 30 days later they call us back and they say, hey, Strike Graph, I just got off a sales call and this customer said they won't, they want to buy but they can't sign until we get a SOC 2 on it. What can you do to help us? And so what immediately happens is that we look at the gap from the security posture their operating to the standard and we say, hey, you've got three controls that you need to implement to have the coverage to be prepared for the audit and then our customer will, they'll sit down and be like, okay, well implement those quickly and we'll pull this evidence that is an example that we're actually following that. And then the Strike Graph platform and our customer success representatives work with them to make sure that they get full coverage that they need. And within just a couple of weeks, we essentially export from the Strike Graph platform, a data package that winds up in one of our auditor partners desks and they are able to start the audit process. And within 2-3 weeks they turn around a report. Now our customer then goes back to their customer and says, hey, we got our SOC 2 audit and the deal is signed and moves forward and I would have to say that I have at least a dozen, if not more stories or Strike Graph saved the deal that was on the line.

Jeff Bullas

00:18:45 - 00:18:51

Yep. They can be 50, 100, half a million dollar type deals.

Justin Beals

00:18:51 - 00:19:25

That's right. And we have hundreds of customers at this point. That is how pervasive a problem it has been and how immediate a solution we can be. You know, if you look back to when I looked at this problem, customers used to spend, you know, we were looking at spending with consultants a $100,000 and nine months to get through the process. We take our customers through the process on average 45 days. And for on average I would say 25k.

Jeff Bullas

00:19:25 - 00:19:36

Right, Okay. So you're reducing your costs by 75% and you're accelerating the process of the audit and getting it done by almost 10x.

Justin Beals

00:19:37 - 00:19:50

Yeah. And just think about the multiples on the revenue, right? Like if you can start not waiting a year to close the deal, but getting it through in three months. That is just massive to company growth.

Jeff Bullas

00:19:51 - 00:20:02

Yeah, absolutely. So how many are involved in the startup space as opposed to established space? That would be interesting to know about,

Justin Beals

00:20:03 - 00:21:59

Yeah. You know, the bulk of our customers are medium sized, high growth tech companies, I would say, however, you know, just to give you an idea of the boundaries, we have companies that start off on our basic tier that are five people, three people, just getting an idea going. But we do recommend it's much easier to peanut butter out the rollout of this security culture than it is to try and, you know, eat the whole thing at once. And so if you can spread it out a little bit, it's just, you will save yourself some heartache honestly. So we'll take a very small 3-5 person team. They'll adopt some basic security practices and get in the habit of that. And as their product comes online, as they're adding new features as they're growing as a team, we can add more security controls that are ready and that spans all the way up to our largest customer that has more than 5000 employees with essentially multiple divisions on different compliance path. So they're working against different solutions utilizing Strike Graph and the real reason is when I looked out at the marketplace at some of the solutions, what I saw was a lot of checklists and I was like, man, this checklist doesn't apply to us, you know, one third of these are not technologies we're using or not processes. That is the way we've designed our business because every company wants to be innovative and differentiated. You're trying to do something unique every single time. And so Strike Graph is designed for that flexibility and that's why we have such a span on the marketplace because it's their security practice. They design it. If they're a big company, they might have a lot more controls and rigor to their operation than a very small company. And that's normal. That's what we would expect.

Jeff Bullas

00:22:00 - 00:22:45

Right. So a little bit more on the business side and a business model. And I want to also, one question put to the side for the moment is some of the challenges found the way as a co-founder of a tech startup and I know there's challenges, I've been involved with one of the last 10 years. And so what's your business model and how do you engage the customer initially? And so tell us a bit about what the engagement looks like and the business model from revenue because it doesn't sound, are you a software as a service company that provides ongoing subscription monthly on top of the initial engagement?

Justin Beals

00:22:45 - 00:25:13

Yeah. So we're an annual subscription and it really does depend on whether you would just like to utilize the baseline of the technology with customer success support all the way through to, hey, we need support getting through the actual audit. So one of the things that we tell our customers is that we won't abandon you to our software. I just don't think that's right. And so we have staffed our customer success team, not just with people that can help you understand how to maximize the use of our software but also who have been in many audits in the past or themselves have been auditors because it's important to get advice and support as you need to go engage an auditor and understand how to work with them. That's really critical to us. So we have a very talented customer success staff that go far beyond the expertise to justice software into really understanding how to deal with some of these challenges and kind of cut through. So you don't have to be an expert yourself. Our customers come to us through a variety of different methods. Everything. We attend a fair number of conferences and that's gone really well for us to meet people in person and and now that especially in the United States, I think that the Covid restrictions are a little lower and were able to go meet in person. We're seeing the conference attendance go up quite a bit. And so that's been great. We also work hard on search engine optimization, although that's a little bit of a long tail work and also having some really vibrant media. I do every other week video cast with a colleague of mine on our Director of Sales Engineering, Sam Oberholtzer, and she is an ex auditor from A-LIGN. She managed about 40 auditors. And so she has deep expertise in some of the challenges on these different standards. And then we have some paid ads running, I go back and forth about how valuable they are but, you know, I think that the problem is so pervasive that we've done a great job of hitting our growth expectations for our budget and what the board at Strike Graph has kind of set for a trajectory for the company, but we are an annual SAS subscription.

Jeff Bullas

00:25:13 - 00:25:17

Right. A bit of a hybrid model using humans as well as software.

Justin Beals

00:25:18 - 00:25:36

I I think it's just, we just want our customers to be successful and they need someone to reach out to from time to time. We're a little rabbit about that and you know to that point zero of our customers have had a deficiency on any audit so far.

Jeff Bullas

00:25:37 - 00:26:03

That's excellent. Yeah, that's great. So your biggest challenge, would that be awareness and education? Would that be one of the biggest ones which you can do in person you can do it remotely. So for example, content marketing can be a way of educating before you show up in person or on that call or meet them in real life. So how important is content and education for you guys?

Justin Beals

00:26:05 - 00:28:01

Yeah, it's a tough one. Our marketplace is flooded with people marketing to the problem because I think awareness that there is a problem is pretty high, much different than two years ago when I started, I think it was beginning to dawn on folks and we see different industries in different places within, for instance, like FinTech is very aware of compliance challenges and not being able to get into the marketplace unless you've like met PCI DSS, for example, which is the credit card processing standard. But education technology we found is has a nascent understanding and they're kind of just getting hit with these requirements as government buyers of education technology are starting to require compliance from their vendors. So it is a little bit of a mix, but the real challenge is that there are many, many, many solutions across the board that help with compliance. So for example, you could buy a security product that helps you secure your email, let's say that's what they do and they are probably solving for some of the requirements of anti phishing in security practices and compliance, but not all of them. And so what's been a little tough is that we've had to kind of cut through the chatter on some level and be like, hey, let's try and provide some clarity about solving the whole problem to your specific business need with a partner that is getting you revenue. Like we're focused on the revenue problem and I think that's required some ingenuity in our marketing team and a multi pronged approach to to provide a solution.

Jeff Bullas

00:28:01 - 00:28:43

Yeah. So it almost sounds like you're not marketing the service. You're well, you are marketing by going to conferences. But I had a discussion with a guest a couple of weeks ago and it sounds like you're trying to make your product so attractive and so over delivers and solves a big problem. A whole range of problems, both from revenue generation to speed of bringing your service online, it was mentioned to me it's more holistic above the line marketing. Whereas a lot of time we sell through fear, do this or we're gonna get sued.

Justin Beals

00:28:43 - 00:29:00

I promised our team when I started the company. I was like, no way do I want to do the thing better by Strike Graph or you're gonna get hacked like that is like not. I just don't enjoy that selling motion.

Jeff Bullas

00:29:01 - 00:30:01

Yeah. So it's very interesting. I chatted to a great agency that started believing the whole market industry was approaching it from the wrong end. Which is basically fear marketing. Instead of that. The term was if you make your products so good and the service so good that it will be, when the customer discovers you. They're going, where have you been all my life? So it's more like a love affair than a divorce. So once more about attraction rather than one about rejection and fear. So, and I went, wow, that's really cool. So in other words, making your product just be so good that you are approaching it from a positive aspect. And I mentioned a book called Map of Consciousness, which is Dawkins, which is very much about mapping everything that motivates us as humans from above the line, which is courage and above do everything fear below that. So, it's really interesting to hear about your marketing approach actually.

Justin Beals

00:30:02 - 00:30:31

Yeah, and I'll give you an example of one of the ways that we took that theory and made it practice. A lot of security companies use red and yellow, you know, and their brand colors and we chose to use cooling colors, blues and greens and whites to be like, this is an inviting solution. This is not to be terrified with about because we are helping you solve the problem.

Jeff Bullas

00:30:32 - 00:31:09

Cool. I really like that. It's just the approach is quite different to a traditional marketing which is quite often fear-based rather than attraction-based. And I think to develop a product that when people just say, where have you been all my life and it sounds up with your product in terms of speed, removing friction points and also increasing revenue is awesome. So as a co-founder, what has been some of your biggest challenges?

Justin Beals

00:31:11 - 00:33:38

Yeah, I think it's always a challenge starting a new business, you know, I've failed more than I have succeeded and, but I'm and in a way I've, the failures have led to the successes of course, and I don't think, you know, I think that if you want to get into this practice of work of founding organizations, then you need to be prepared to fail. And also very humble and like lesson learned like what did not go well. One example of those failures leading to success is that I built a lot of products over the years that I felt were very aspirational in the way that we sold it. It was like we would build an education product and education technology product and our aspiration would be that students would learn better, but it's really hard to find a true value exchange in those aspirational sales, you know, but they can be very exciting to certain types of buyers and so you can get an early signal, you know, to a small group of people that they want to buy, but there's just, you're just not really solving a big pain point at the end of the day, that's when I started Strike Graph, I promised myself, I said Strike Graph is going to solve a problem that people have that they know they have and that they're willing to pay money to solve for two reasons. One is that the business will do better because people will pay us money. But the second is that I find that some more ethical business because the people that are paying Strike Graph money, what we are trying to do is solve their problem directly. So I have a direct exchange, there's no one in the middle. You know, we want to solve it directly for that customer and that allows us to build a product to your point that really meets their needs and like focus on that. And so I do think there were some philosophical decisions that we made and as you said, like compliance is not the sexiest thing in the world. Had to swallow my pride a little bit right. Like I have, I feel like I've built some really cool tech in the past and I was like, you know what people need to buy this and therefore there should be a business around it that can solve the problem. And I realize it's not the coolest thing in the world, but it will make it for a great company and if we build a good culture, we can take care of our employees too.

Jeff Bullas

00:33:38 - 00:34:20

Yeah, yeah, I think of solving the problems, one of the, one of the major drivers in terms of a successful business for sure. And I think, you know, you mentioned diversity and culture and team and I think what I've learned too is if you look after the team, the team will look after the customers. So you as a founder is not looking after the customer, you have the vision and you gotta look after the team and they will surprise you. But what they come up with and what they do, because you're willing to let them to be free to have their creativity without you imposing and then being fearful of you as a founder and paying the wages.

Justin Beals

00:34:20 - 00:35:36

Yeah, I have, when we started the company, I have worked at a lot of tech startups that had a big vision for how we were going to impact the universe around us. And I said, you know, that's another I think lesson learned. I don't want to set those kinds of expectations. So I tell our team that we have, we have a two pronged mission. It's very simple. The first one is that our customers get real value out of engaging with us every time we can deliver it. So we're constantly focused in it in a sales call, in a customer success call, in a feature on the system, what is the value that we're providing and the second thing that we have to do is take care of our employees.

That is our mission right there. And you could say, hey, these things combat because I want my engineers to spend extra time delivering an extra value and how do I balance it? But you're exactly right, Jeff. In truth, they support each other. If you do not balance both sides of these things and the employees will not be engaged enough to deliver the value to the customers. And, and so I just think that it's, it's better to make it simple and crystal clear as best we can in a way that our entire culture can engage around.

Jeff Bullas

00:35:36 - 00:36:20

And I think for me is you don't necessarily have to have a huge vision to change the world. You can put a small dent in the universe, it doesn't have to be a big dent. But I think you've got to bring your employees with your team and if you've got to be a good storyteller as a founder that inspires them to be the best version of they can be in terms and then if you've got them on mission then they're going to give the best, they're gonna do the best thing for the customer and then for the business. So it's that, it's a beautiful tension and it's really as a human, you're just trying to tap into being more human so that the team can be superhuman.

Justin Beals

00:36:20 - 00:36:23

That's right. I like that one. That's very good, Jeff.

Jeff Bullas

00:36:23 - 00:36:32

I think I'll write that down actually.

Justin Beals

00:36:32 - 00:36:54

You know, after you get past 10, 15 employees, you're really just trying to help people optimize the best contribution they can make and it's not a sprint, it's a marathon. You know, we need to all be here mentally whole, physically whole, emotionally whole to celebrate our wins and grow in the lessons that are available to learn.

Jeff Bullas

00:36:55 - 00:38:19

Exactly. And I think the other thing and as humans we've got to think beyond failure as being failure. We're going to see failure as an opportunity to learn. Same with mistakes which sit within failure. But it's an opportunity to learn a life is about learning. And the other thing that I don't know how you feel about this, but basically as entrepreneurs, we quite often fall in love with our product and service. In other words what we do. Well the object, the shiny object that we're doing and but I think we've got to fall in love with the process. I remember an interview being done with George Lucas in mid-nineties, he said you're not only gonna love what you do, you're gonna love the process of what you do. And I went wow! So and that comes down the biggest challenges I know how you found it interesting. Your thoughts on this is one of the biggest challenges of businesses and entrepreneurs. Entrepreneurs typically hate attention to detail because they are big picture people. So processes and systems and again like poked me in the eye with a sharp stick, it's much more fun than creating processes and systems but I've been sitting[a][b] on your take on the importance of process and systems to entrepreneurs.

Justin Beals

00:38:20 - 00:40:34

Yeah. You know I'm not a highly detailed person even when I was a CTO, you know, it wasn't my favorite thing to do. My favorite thing to do was to prototype something or work with some new tech or try and make an interesting solution. But I quickly learned that without process that it is, it's gonna be really hard to stay organized and deliver on something. And so I have a, but I also want my process design to allow for a lot of variability, like the same exact process needs to fit in a lot of solutioning no matter what that solutioning is. And so for example I've taken from our engineering teams in the way that I think about process management, which is quality habits and it has to happen on a regular time increments. So for me like daily stand ups are a critical check in with the team and I still do them and as a matter of fact my poor team, I will go visit their daily stand ups because sometimes I need to be grounded as the CEO and be like okay this is the habit again, Justin, this is your process to what'd you do yesterday, what are you doing today? Are there any blockers? Okay, good. And then every one week to two weeks we have an incremental planning session for that one week to two weeks. What are we going to do? Now that can happen in our finance team. That can happen in our engineering team. That can happen in our marketing team, but that's about the time span that people can actually be predictable about what they can accomplish. And then every quarter or month we're doing a little more strategic view like what would we like to accomplish? Let's start to put a story around that and spend a little more time planning. And if we stick to that three pronged schedule with those basic understandings of meetings, I can pretty much fit that process into any ongoing learning cycle and outcome that we want to work towards. And that's helped a lot. Beyond that, we kind of invent product process or tooling that helps us understand where we're at and going and achieving,

Jeff Bullas

00:40:35 - 00:40:38

So could you restate what that three pronged schedule looks like?

Justin Beals

00:40:38 - 00:40:43

Daily stand up, daily stand up every day to check in with the team

Jeff Bullas

00:40:44 - 00:40:45

And stand up means?

Justin Beals

00:40:46 - 00:42:00

What did you do yesterday? What are you doing today? Are there any blockers?

And then a weekly or every other week planning meeting for that amount of time. What are we going to do in the next two weeks? I want to deliver this feature, I want to get these Google paid ads out the door. I need to finish a financial audit. But think in that two week increments max because that is, that's literally the detailed planning session and that's really just about as far ahead as you can plan without significant error in the amount of time it will take you or the scope of what you're trying to do. That's number two.

And then the third one is monthly or quarterly strategic discussion about what we would like to broadly do next. So next quarter we are shooting for this amount of revenue from our sales team. And that means on those two week increments, we should probably be looking for this amount of leads. Okay. We're starting to break down strategically and if we do that, then we're actually making progress on a regular cycle. So that's been really helpful for me.

Jeff Bullas

00:42:00 - 00:42:31

I love that. I love the rule of three and I think that's gold in terms of what you covered there. And I think this is going to be a video snippet. So the other thing that you mentioned, which I believe is core to is you said, what's blocking you? What are the blockers? And I think as CEO/Founder, your job is to remove friction and blocks from your team delivering. How do you feel about that?

Justin Beals

00:42:31 - 00:43:55

Yeah, absolutely. I'm constantly listening for someone that can't get something done or it's taking too long to get done. Sometimes they're their own blocker. You know, sometimes I'm my own blocker and I need, you know, a board member or a colleague on our leadership team to say, hey Justin, you're making too much out of something that doesn't really matter. Like you should take a quick decision and just go for it. And that's super helpful for me. Sometimes can be a blocker in that I'm reliant on another teammate. Like I can't move forward until this is delivered. And that's important for the whole team to hear because even if the, let's say I'm the blocker and another teammate is stating what I need to do, I may be too busy and someone else on the team might be able to help me get over what, what I am, how I am a blocker for them. But blockers are critical because you see it on the engineering all the time where somebody's like, hey, I can't write this piece of code because I'm waiting for this thing to happen. And if that goes on for more than two days, you've lost 48 hours, 20% of a sprint. You're behind already like catching up is almost impossible at that point. And so making those a team problem and not just a, hey, someone, you know, a two person, we can't interact effectively. Problem is critical to getting unblocked and moving forward.

Jeff Bullas

00:43:55 - 00:44:59

Yeah. It's interesting talking about that and also talking about sprints, which is basically very much a software development term and I'd be interested in your feedback on this observation that I've had over the last few years, is that quite often modern tech startups, they've got two challenges. There's two wars or battles going on. Number one, you are in a battle for market share because someone's gonna be copying you and chasing you behind or you're chasing someone else. So there's that battle for market share then there's a battle for technology. So basically you've got to be sprinting on both if you really want to get this baby rocking and rolling. So how do you feel about those two aspects, one that market share challenge? Because quite often at the end of the day you end up with just two or three major players in the game. So how's that for you in terms of technology development as well as market share?

Justin Beals

00:45:00 - 00:46:59

Yeah, I think the market share thing is a little bit hard to solve in some ways. It really, and let me say that, , I've seen a lot of like strange tortoise and hare scenarios and we could easily list a whole bunch of Silicon Valley companies that thought that they had market share and wound up just blowing a whole lot of money to pay to get people to kind of buy in and then evaporating all of a sudden and I think that's actually what's impacting our current market, you know, macroeconomic situation today right now is that,, there's a lot of companies that claim to be billion dollar valued companies and they're doing less than 50 million in ARR, less than 20 million in ARR. It's just shocking to me and really questionable and I have a good military friend that used to tell me, hey, Justin, just remember first to market is first target downrange. Okay, Thomas, I really appreciate that. That's really helpful. So I think that my philosophy and maybe I'm a little pollyannaish about it, but we need to build a great company. Okay. And a great company doesn't mean going and chasing the tail of all your competitors. It means having a real solid vision on how you're going to solve the problem. You should know who they are, you should understand how to differentiate yourself and you should go execute that and check in, you know, as we say in sailing, get your head out of the boat a little bit, look around, but then get back and driving the thing exactly like you need to. And so I tend to really focus on what our goals are and go after them more than trying to say, hey, I'm going to elbow out all the other players in the market place.

Jeff Bullas

00:46:59 - 00:47:06

Yeah, I think that's great insight because if you keep looking at other players all the time, you're going to take your eye off the ball and off the tiller.

Justin Beals

00:47:06 - 00:47:21

Yeah. It can be an emotional challenge too, right? It's just really hard to constantly watch someone else and not think about what you need to do better and take pride in that. Celebrate your wins.

Jeff Bullas

00:47:22 - 00:47:34

Yeah. And that means that you're keeping true to your vision without getting distracted by the competition, which sure you're gonna be aware of as you said, pop your head out of the cabin.

Justin Beals

00:47:35 - 00:49:35

That's right. Now, technology execution is really intriguing problem and something that I probably do feel like I have a deep expertise in. I think that one of the mistakes that founders make a lot of times on the engineering side is they see the engineering practice as number of developers equals amount of features delivered. And there's a great book. It’s A Little Legacy. So I'll modify the title. It was originally called The Mythical Man-Month, but I think we could call it The Mythical Person-Month these days because I'm very proud of the vibrant diversity of developers that we have on our team. But essentially, you know, a great way to caveat is that nine engineers can't make a baby in a month.

And so what you'd have to optimize for is a high functioning team. Strike Graph has half a third of the engineers of some of our competitors and a vastly better product that can serve us a vastly larger marketplace because they are great engineers that have been given the time and space to be thoughtful about what they're building. Now, in truth, we didn't have some features early on that our competitors may have had, but in the interim, we were building mobile towers, cell phone towers, where our competitors were laying copper wire in the old way. And, and now on the backside of that, we're starting to roll out features at a scale and efficacy that our competitors won't be able to keep up with. And so for me, it's hard. It's really hard because you're like, hey, we're losing the race. We're not going fast enough. But what you're actually doing is preparing to get to the finish line before anyone else. And that takes, it takes some patience. And that's hard to do when you're trying to close deals. Yeah.

Jeff Bullas

00:49:35 - 00:49:42

So what you're talking about is building solid foundations that then allow you to accelerate later.

Justin Beals

00:49:43 - 00:50:07

And part of that foundation is the team. How well do they work together? You know, instead of just lumping in a bunch of people and saying work well together, allow them to build that dynamic and that capability, add a couple more people and then say, hey, are we as sufficient as we used to be different if we had 30 engineers and we added five more. Are we getting that percent more efficiency out of the five added engineers to the team?

Jeff Bullas

00:50:07 - 00:50:10

Yeah. And typically the answer is no.

Justin Beals

00:50:10 - 00:50:15

Right. Yeah, yeah. Like I said, I love our CTO. She is amazing.

Jeff Bullas

00:50:15 - 00:50:48

Okay, alright, so that's so, just as we wrap up here, what are some top tips that should leave to other founders that are starting a company? What are some of the things you need to keep in mind that help you stay the course and be successful? What have you learned along the way with, as you've learned a lot from many failures? Just like we all have, what are some of the top tips that you would say to founders and entrepreneurs and ones that I want to start a startup?

Justin Beals

00:50:49 - 00:52:30

I think, you know, one thing I might say just to help folks that would like to be a founder, maybe create a safe emotional space or keep on your mental health a little bit. What we do in creating companies is kind of like jello in a mold. You know, I think there's this concept that, you know, I am going to push this business into this success factor and if I don't, it's on me, I think that we operate in a context when we build these organizations and there is macro frictions that are against us and tail winds that are for us. And the truth is that you're just trying to fill into the maximum that you can and it's not actually about you at all. You know, you are an individual with agency. You have an impact on it, but sometimes we make a choice of the context that were operating in and that's just what we're dealing with and it won't be your favorite entrepreneur, you know, champion story.

And that's okay, right? Like that's absolutely all right. And especially in economic downturns, like the pandemic, I had friends whose businesses had to be sold quickly or shutter, that was not the outcome that they wanted, but they can't control the fact that there's a global pandemic going on and I I just want them to get to your point. Like take whatever you could learn about building a more resilient business next time and just apply that next time around.

Jeff Bullas

00:52:31 - 00:52:34

In other words, be kind on yourself, have compassion for yourself.

Justin Beals

00:52:35 - 00:52:47

Yes, because this is also a marathon that I'm running and I need to be around and whole and happy for, you know, the outcomes that we're shooting for.

Jeff Bullas

00:52:48 - 00:53:26

Because you're building this business not just for your customer, you're doing it because you want the freedom of being the Co-founder along with all the responsibilities that come with that, and I think you've got to make sure that, sure you're gonna have to work hard for the issue is that you still need to live, you still need to be healthy. You don't have your health, what do you have? Yeah. It's not going to be a, we all know this, we know it's not going to be a happy ending because we were all heading, but in the meantime let's have some fun along the way. Yeah,

Justin Beals

00:53:26 - 00:54:44

It is the journey for me. I had a call with the M&A Advisory team today about, you know, exit strategies for a company. And look, my philosophy is, we're gonna build a great business, we're gonna pay attention to our fundamentals, we're gonna take care of our employees, we're gonna take care of our customers and then whatever opportunities will be available will have maximized what those are. If I am in my head it's IPO or bust, then I just, it's just not fair to me, it's not fair to my team. It's not fair to my board members who are also my team or our investors that have believed in what we can go out and accomplish and the greatest joy that I get out of it is when one of our existing staff gets a promotion like that to me, like I, you know, I can lose a couple of deals that day and have somebody have grown inside our organization that they're ready for promotion and I'm beside myself because if our organization does what I really love, it's a vehicle for people to create a better life for themselves, learn along the way and and have an enjoyable community to do it with.

Jeff Bullas

00:54:44 - 00:54:59

I love that. In other words. Being an entrepreneur is really and being in the business is really just a vehicle to provide happiness for you and the team and the customer.

Yeah, it's been an absolute pleasure to talk to you.

Justin Beals

00:55:00 - 00:55:10

It's a joy, Jeff. Yeah. You let me talk about all my favorite philosophical things.

Jeff Bullas

00:55:10 - 00:56:10

I love talking about life and life. Being a founder is just being, is just wrapped within your life and you're right. You've got to enjoy the journey and it's exciting. It's terrifying sometimes and sometimes you lose a key chick chief team member and you're going, my God, what am I going to do? But then there's a learning from that. There's an opportunity from that and you, you kiss them, hug them and let them go out into the wild because they've got to pursue their dreams and yeah, thank you very much for sharing your stories, Justin. It's been just an absolute joy to do that. And hope sometime bump into you in Locanda and actually have a fun time. Maybe get on a boat with you and drink Kool Aid or beer whatever you drink. Maybe just water.

Justin Beals

00:56:13 - 00:56:21

Thanks, Jeff. It's been a real pleasure. And yeah, someday I would love to be in Sydney and say hello.

Jeff Bullas

00:56:21 - 00:56:39

Well come over here and we'll show you some beautiful nooks and crannies in the harbor here. And I would love to show you the city when you managed to cross the big ditch called the Pacific Ocean. The good thing for you is out of Seattle. It's just one flight.

Justin Beals

00:56:39 - 00:56:42

That's right, yeah. Pretty direct.

Jeff Bullas

00:56:42 - 00:56:49

Alright, thank you for sharing your wisdom. It's been a pleasure. Thank you, Justin.