Track Zach Marshall #4: The Services Trap, Firing Customers, Chicken-and-Egg Problems
We are back for the fourth installment of the Track Zach series. Zach Marshall is a badass. He’s a former Navy Seal who founded Conterra, a marketplace for private security.
He’s been kind enough to invite us along on his journey of building a startup in the extremely fragmented and inefficient private security market. He shares his triumphs and tribulations, open and honest.
Zach is 14 months into his startup. He talks about the pivots he’s made, lessons learned, and hopes for the future.
Here’s what I learned from the episode:
Zach has spent a lot of time doing things that didn’t work. It’s hard to know when to push through and when to pivot.
One key fundraising lesson: be sure to raise enough money (~18 months’ worth). Raising 2-4 months at a time is dangerous.
He may have raised capital too soon, before he had a small model working.
He’s seeing how tight resources focus efforts.
The due diligence when raising from a fund is a big difference in comparison to working with angel investors.
Supply side (security professionals) often make commitments, then find reasons to back out late in the process, wasting time and killing deals.
Fear mongering advertising is a big problem in the private security space. Zach wants to stay away from that.
After being in business for a year, he has built trust with clients and pros. This has led to referrals. And Zach has also gotten better at pitching to vendors and larger companies.
Zach had to fire a customer, because the service they were offering to the customer wasn’t profitable enough to justify the effort.
Zach’s goals for the next 2-3 months are to get a live, usable job board going on the side. Conterra wants users signing up and looking at job listings.
Startups are hard.
This episode is sponsored by Athena.
Athena is a company completely dedicated to providing top-caliber executive assistants from the Philippines. I had a conversation with Athena’s CEO and CCO in episode 38 of this podcast.
If you’re interested in joining Athena:
Click here: AthenaGo.Com and complete the survey to sign up.
There’s often a waitlist to get matched with EAs, so plan ahead and sign up now, today – no commitment required.
Learn more about Zach Marshall
Additional episodes if you enjoyed:
Episode Transcript:
Zach Marshall: So, I think the startup method that is talked about is to hurry up; just you're always going as fast as you can for growth. And I think what I would tell people who don't have product market fit is don't hurry up. Whether you're bootstrapping or raising money, whatever you're doing has enough of a runway to be able to take it slow, but that doesn't mean you're not working hard all the time. It's you've got a full bias for action where you're taking as much action every day to get there, but it's going to take a long time, and you need to know that and believe that. You're not going to find it. It's not going to just pop up day one. And if it was, you already have it.
Eric Jorgenson: Hello again, my friends, and welcome. This show explores technology, investing, entrepreneurship, and personal growth to help you create a brighter, more abundant future for yourself, your family, and hopefully the rest of us get something out of it too. This podcast is one of a few projects I work on. To read my books, blog, newsletter, or invest alongside us in early stage tech companies, please visit ejorgenson.com. Today's episode continues the incredible series Track Zach where we follow Zach Marshall’s startup journey. He's a buddy I met at Capital Camp. He is a former Navy Seal who founded Conterra 14 months ago to build a marketplace in the extremely fragmented and inefficient private security market. This is our fourth episode, and we started right at the very beginning of his company and have sort of done maybe a quarterly episode so far. He always shows up with straightforward stories about the challenges of building startups, what he's learned, how the journey is going. I learn a ton from him. I love his honest look at the challenges, the struggles, and the rollercoaster of building a startup. So please enjoy this conversation arriving at your ears after this fun little interview from today's sponsor, Athena.
If you have ever listened to this podcast before, you have definitely heard me mentioned Athena, which is the service I used to find and work with a wonderful, full time assistant who helps with all parts of personal and professional life for me, and I thought it'd be exciting to bring him in for a few minutes and introduce you to the man who's been behind the scenes of this podcast since the very first episode and very much makes it happen because I do not know how to publish my own podcast. Only Ivan does. Ivan, welcome to the podcast that you helped create.
Ivan: Thanks, Eric. Glad to be here.
Eric Jorgenson: I wondered if you would share sort of what attracted you to Athena in the first place?
Ivan: Well, everyone's gone through the pandemic. And because of it, I wanted to look for a remote a job where I don't have to commute every day to work. I found Athena. And like me, there are plenty of other professionals from the Philippines from different careers who are looking for a new, secure, and a permanent work from home job, and we found Athena. And through Athena, we've had extensive training that focuses on several key aspects of what it is to be an executive assistant such as inbox management, calendar management, and doing research in a wide variety of subjects. And what I love about Athena is, aside from this training, we have continuous learning courses. And I guess the best thing of all is we have excellent community support. There's plenty of mentoring between EAs, and you can always turn to fellow EAs and your manager if you’re stuck in a difficult task or if this is something that you don't know what to do about.
Eric Jorgenson: It kind of sounds funny to say, but it's also one of my favorite things about Athena, knowing that you've got that sort of resources or backstop and all of those people to kind of help because I sometimes ask you to do stuff that you have never done before and even I have never done before, whether that's learning a new tool. I remember when we first started working together, it was like, I don't know how to use Zapier, but I know that I need it, and I know that we need a bunch of automations. So do you mind if you could go learn that tool and get caught up and start implementing some of those. And you sort of turned to the resources in Athena and learned a new skill and started applying it in our business, which was amazing to see and a huge, huge help. I know you've done that a lot. And we've even taken some of the, I'm going to call it a playbook I guess, like taken systems from other Athena clients and EAs that you know. Do you want to talk through some of those examples?
Zach Marshall: We have plenty of playbooks for travel management and plenty of courses for booking flights, pre drafting emails, how to manage calendars. And of course, you can always do what we call shadow sessions with other EAs who have mastered tools and processes with their clients. So, when you're hiring an Athena EA, you're not just hiring one resourceful EA, but you're tapping into a community of hundreds of EAs with plenty of experiences with different tools, processes, and in different industries.
Eric Jorgenson: Yeah, it's given me a lot of confidence to delegate things that I don't know for sure that you can already do or things that I don't even know exactly if it's delegatable. It makes me more confident to just kind of be like, well, let's give it a shot and see if it works. And if anybody at Athena has figured it out or done it before, I think there's now almost a thousand Athena EAs and clients. So it is a big community and kind of a robust set of playbooks that you can tap into and pull from and it’s growing all the time.
Zach Marshall: And so, if you're wondering why I never say no when you're asking me to do something new, it's because I know if I can't figure it out, there's always help nearby.
Eric Jorgenson: For those of you interested in learning more, or for the potential of meeting and working with your own Ivan, please check out athena.go.com. It is a beautiful product. It is a great set of people. I encourage you to just go learn more, check it out, and see if it's for you, see if you should dive into building the corporation of you and if you're ready to sort of take this next leap into delegation. I found it to be an amazing forcing function for getting better at all of this to just sort of take the leap and make the investment, and I got better at it as I went. So I think if you're 60% ready, that may be ready enough to go learn more and take the leap. Thanks for listening.
I think almost six months, it was like May last time we talked, right? For four or five months.
Zach Marshall: I have no idea. It's been a while.
Eric Jorgenson: It's been a minute. I'm excited to hear everything that's been going on. And I think we caught up offline a little after that, too. So, I'll probably merge all those things together. But I'm excited to hear how it all goes. You prepped me with a ton of stuff of everything that's been going on, and I can't wait to hear about it. What's the right place to start, you think?
Zach Marshall: Oh, man, everything, like startups are crazy. Everybody knows that already, but they are. They're hard. They're crazy. They're fun. It's always encouraging that I have a lot of friends that are going through the same thing. So, I talked to another friend today who is at his startup that's not anything what they expected it to be, but it's also doing really well. It's like we're all shifting left and right to stay in business and to keep raising money and keeping our employees happy and also trying to actually get product market fit. Yeah, maybe that's a good place to start. We don't have product market fit. I know that. But we have learned a ton. We've made money. We have real customers. We fired our first customer, which was a big, meaningful moment because it meant that we are trying to focus. So maybe focus is probably the- That's the big loop that we're on. The company started, if anybody listened to the old episodes, you already know this, but we started with this idea for a labor marketplace for private security. That's physical security and risk management here in the states, in the United States, domestic security like executive protection, risk assessments, IRS 132 assessments, really anything that a corporate security buyer is going to purchase and trying to staff that gig style like Uber or Airbnb. We learned that those folks wanted to be able to spend credit cards. Anything under $100,000, they have to go through a large procurement process, anything over that, in some companies those numbers are different. And the first six months, we build software, and that software was really expensive. I had never hired a technical person before. He did everything he said he would do. I also had no idea what we were doing. And we built a lot of software from scratch. Come January timeframe, we weren't hitting metrics I needed to hit, we weren't releasing the speed I needed to hit. And that meant that I had to let our tech guy go and shift focus toward services where we were actually doing consulting, kind of like the Art of the Start book. I forgot the quote, but I think it was like, look, if you got to be a consultant to stay in business, you got to be a consultant and keep building your project. And so, we did that. We hit 110k, maybe a little more than that now in revenue. We served private, wealthy families who needed security assessments. We've helped staff some things, some really cool things. We got to work with some really cool people, under NDAs and so on. That's one of the funny things about security – almost everything is under NDAs, especially famous people. We've had a lot of misses where we tried to hire people, like people called us and asked us to match a gig or a role with a professional. We had the professionals, but there was always- a lot of times, it became a lot more complicated, which we learned. And honestly, it creates a bigger value prop for a platform. But it also meant that we spent a lot of time doing things that didn't work. And it was for services. So it wasn't doing things that didn't work in the startup platform side, it was almost like instead of doing customer discovery calls, we were doing full on customer discovery failures, where we were trying to try to solve their problem and finding out- and maybe I can talk a little bit about some of the things we learned about how the actual transactions happen, how procurement happens, and some of that. It creates a bigger value prop. It also means that we have a tougher problem to solve.
Eric Jorgenson: Yeah, I'd love to hear about some of those complexities when we come back there. I know you're in the middle of the summary, but the surprise complications are always good.
Zach Marshall: Yeah, I'll get into the details because it's really interesting. But the focus of the company, we realized, Kurt and I, a few weeks ago, we were like, man, this has been cool. We've sent invoices, and every invoice- an invoice comes back for 20 grand or something, it's like, man, that's sweet. Like, this is so cool. We're making money or whatever. But part of that's because we've never done it before. And so, go talk to a third time founder, they’ll be like, cool, your 20 grand, who cares, man. You're doing venture. You're doing startups. What you need to do is figure out how many customers you can sign up every month or whatever. And so, we've realized that. We've refocused on getting the platform out. And for a while, I had really been afraid for that moment because it was like, man, we spent so much money and time trying to get a platform out the first time. And it was wrong, the audience didn't like it, it didn't really work. But then enough of my peers were like just build it yourself. And so, I learned how to build it myself. And using no code, like literally watching YouTube videos because everything we're doing is really simple. It's like a job board with some protected content that we're trying to use to help people get motivated to give us more personal information, so we can actually vet them, and then connect them to jobs and put their phone number in so we can text them and tell them, hey, this job is for you, it's in your location, that kind of thing. And I can do all of that MVP style, and it looks pretty, but I've been using Webflow, Zapier, Airtable, Jet Boost, the whole hustle stack. And it's exciting to have that. So, I won't put a timeline on this because I've been wrong by leaps and bounds for every timeline. But I expect to have that live soon and actually working. And our focus at the company has shifted back to getting people signed up into a labor marketplace, or at least into a labor job board with the ability to ask for introductions, which creates kind of a speck in the middleman seat and just drive user growth, see how many people we can sign up. And there's competitors that are in each of these little niches that have a lot of people using those sites. And actually, I think already the version I've built that we haven't launched yet does what some of those other sites do better and our model will make it less expensive for the user – it'll be free for the labor side. So, I think we'll get that going.
Eric Jorgenson: So, I mean, I guess talk about that decision, like what drove that kind of swing back from the services focus to shit, we got to do this platform. That's something I see people kind of oscillate on a lot. What was your situation for that?
Zach Marshall: It's a couple of different points. The first, it was very clear that the services is really- it takes up all your time. Like, all of your time, if not, more time than you have, and you're hustling just to make that cash. I mean, I think we all know that. Consulting literally is a mechanism of time. Like how much time you have, that's how much you get paid. I mean, we bill for some things, we literally bill on time. Instead of billing the project, we bill 450 bucks an hour, like straight up consulting. And other parts, we built it more like a marketplace brokerage transaction where we took percentage off the top but we build the whole thing, and we have one customer that's recurring every quarter, so that's kind of cool. But it was all these little experiments, but each one of them just took so much time. It was clear that we were learning a lot from each one, but if we wanted to grow, it wasn't going to work that way, or it was going to take 20 years, building a consulting firm. The second piece to that is we want to raise money and grow. And we can't hit startup metrics doing consulting. Startup metrics, some are vanity, but a lot of them are true. It's like, look, are you focused on the right things? And I don't know that I thought about it that way before, but I am thinking about that now. And then I would add one last piece, which is my piece of advice to myself, if I could go back, would be don't start this until you have a bootstrapped MVP that's focused on what you're pitching, on the actual pitch, this labor marketplace, still skateboard, the whole skateboard scooter thing, like what's the skateboard? Get to the first skateboard before you go full time, do it on your own, do it on the weekends, whatever. And I learned that through the massive amount of capital resource constraints. I have those right now. We're always about four weeks from going out of business, just about, and that forced me to teach myself how to do it. And it forced us to get more focused and it forced all those things. And it turns out, I actually could have done that while I was still working somewhere. Because I would have been okay, well, I only get four hours a day, I can work on this. Okay, in four hours a day, I can get it to the skateboard, but it's just going to take me six months, and then I'm at the skateboard. If I brought in the same amount of money I've raised so far, we'd be a different company, completely different.
Eric Jorgenson: So is it fair to say or rephrase that in the way that like when you relaxed the resource constraint too soon, it enabled a wider focus than would have actually been like max productivity too soon, like let you run too many experiments too soon.
Zach Marshall: Yeah. Or it allows you to just not be as tight on the experiments themselves. So, maybe we flip flop between different customer segments too often for a period of time, or we- it's almost like we have conviction that there's this problem, we hear all these people telling us there is this problem. But if you're spending four hours a night or whatever building out this little thing, you can take that and be like, now we have conviction and we have a starting point. Let's put those two things together, take that same cash, and it's not like it's a cheat code. It's just it would have made who I hired very specific day one. Day one, I would have known what I actually needed to hire as opposed to hiring well, I need somebody. I can't build this thing on my own. There's not enough time in the day. Well, I need a tech person, so I'll just get a tech person that has experience building other startups. So I'll just get that person. Well, maybe I actually wanted a tech person who had experience building- who may have built an AI thing once, but his side project he built on a bunch of no code, I'd be like, oh, that guy's perfect because now I know that he can help us keep MVPing this thing on the no codes we've already done. But when it comes down to swapping us to actual architecture, he's going to be able to build that. So yeah, I think, I mean, yeah. I opened up the resources too soon, and then had to tighten them down. And then it's been a long period of really tight resources. I don't know. Anybody who's raising money right now, raise enough. Like everybody already said it, I heard it, my advisers said, raise 18 months, raise a year, raise 18 months. I wouldn't ever raise less than that again. I wouldn't start- I wouldn't go full time until I could raise the cash to be in business with whatever team I think is actually needed to hit a goal for like 18 months.
Eric Jorgenson: Because you for a long time raised sort of more little chunks at a time. You were kind of like always fundraising giving yourself like two, I don't know what the max was at any point, like six months maybe of runway?
Zach Marshall: Yeah, probably. Probably the most runway we ever bought at once was, equity for cash, was six months. Six months is a pretty good amount of time. But it's actually not six months. It's only like three and a half because the next two and a half, you're just raising the next month for the two months after. Then when you have employees, yeah, I mean, they care. They want to know that you're raising that money, that they're going to still have health insurance or whatever in two months. So, I went lukewarm. I guess that's what it’d be. I didn't bootstrap. But I didn't raise enough to go full on. So, it was lukewarm, which is a big mistake. And now we're paying for it. Good news is we just got our first check from a bonafide venture capital firm. And I think that really comes down to the fact that we've been able to get through all of this, learn a ton, we can get into those details we mentioned, and then go okay, well, now we're actually building procurement software for corporations so that they can get gig works out, like gig and labor out. And the labor side, literally, it's an integrity thing. It's how can we just make sure these people are vetted, pretty basically vetted, and they're all in one place so that when you go to find them, you can just send out a message and they'll find you.
Eric Jorgenson: Was the fundraising process, working with the fund, how different was that from sort of the angel money that you had raised previously?
Zach Marshall: Yeah, it was the first due diligence, for sure. That was a huge difference. And I think probably that was part of the process that made me feel I should have done that a long time ago. I should have been ready to raise 5 million bucks because my package is all perfect and ready to go right in the beginning, even if it took a week to get it all ready. And then, once every two weeks, I was like, okay, well, I got to update these 10 things with all the stuff so that it's always kind of ready. It's almost like having a boss. My boss is my due diligence package. Like I need to be answering to that and making sure that it looks right, makes you look at the financials better. We have an awesome finance or accounting firm, Ativa Partners out of San Francisco, and work with just startups, venture backed companies. I mean, they're awesome. I've worked with them at other companies before and they do a really great job for us. But that doesn't mean that I spend the time each month to really figure out where I'm wasting money or what I have to do to stay in business or what my tax liability will be at the end of the year. Those are all things that even the youngest startup should still think about.
Eric Jorgenson: Yeah, I guess, what were the fund’s expectations of you from a collateral- You talked about like the package. Is that sort of accounting statements? Is that just like a deck and memo that's constantly updated? Is it a dashboard that you make available to them? What does that look like?
Zach Marshall: Yeah, this is just documents. And then I think I wrote- I definitely shared some memos that I wrote about different things. But really what it was, this is the actual financials across the board. This is what our projections are, like realistic real projections, versus-
Eric Jorgenson: Just the exponential, clipart exponential graph.
Zach Marshall: Yeah, and how much I'd raised, like I had to have the conversation too of, look, this is how far we get with this, and what we're doing and how much- like what we have to do in order to make this work the next time and where we need to be by March to raise a series seed round. And it's all stuff I talk about and think about, but when you have to hand it in, like hand it into the teacher, you got to make sure it's right, check your work, you have all these other people helping you, making it sure that it works.
Eric Jorgenson: And it always feels different to write it down than to tell yourself in your head when you're on a run or whatever.
Zach Marshall: Yeah, exactly. Or write it down in a document that other people read, as opposed to on your whiteboard or something. I was going to say, it was one of the things that made me go, man, I don't need this office right now. And so, I canceled my office, saved myself a bit of cash and moved into this beautiful porch that I'm sitting on now. And I'm doing a hack where we're going to put a piece of plywood behind me that has like those little soft little octagons to make it look like I'm in an office and save myself- it bought me two things. It bought me time because I walked to and from work, so it's a half hour each way. So, it bought me an hour a day, and maybe I'll go for a walk, but it'll just be chillin’ and me thinking, as opposed to me having to walk. And then it bought me 900 bucks a month. And it is not like I'm employing anybody in Rochester anytime soon, so I don't need an office if it's two people. So here I am.
Eric Jorgenson: Cool. And it is, for the record, a beautiful porch. It is very nice. A little more family time, probably. I'm sure they're excited to have you back home.
Zach Marshall: Yeah, the kids get home from school, and I can take 15 minutes and just walk downstairs, help them get snacks, smile, and that's cool. And they know that they're not supposed to come running in here. And I stay focused. I play a lot of music that keeps me in flow mode when I'm listening to music. And obviously, when I'm on a call, I know I pace around. My office is big enough to pace back and forth. It's actually like three offices next to each other so it's skinny and long. Because it's the whole back of my house. Yeah, got to pace. I’ve got a pace spot.
Eric Jorgenson: Let's go back to the service transition. So I know I was recapping from last time, and we talked a little bit about, I think last episode was a lot about sort of the focus on providing services, finding repeatable transactions, and enabling them with tech. So, I think that's actually a really interesting sort of place to dig in about the kind of jobs that you landed here because you got to- I mean, 110k is a lot of revenue. And like not far off, I think your goal was 200 or something in 2022. And there’s plenty of clock left from May. So I'm curious sort of where- Did you find those were just not repeatable? Were they super different from each other? How was that different maybe from what you expected going in?
Zach Marshall: Yeah. So we had no go to market plan for that. I didn't plan an advertising budget. It was word of mouth and cold outreach. Well, not cold outreach, network outreach. The whole like who do your advisors know?
Eric Jorgenson: Yes, you had a lot of relationships already. These are customers you were talking to you about the platform already.
Zach Marshall: Right, exactly. It was a bunch of customer discovery people pretty much that I called back or they called me and it was like, hey, I do need that thing. I also had a lot of success with gifting wine. Somebody who introduced me to somebody, I'd send them a bottle of wine, and then all of a sudden, they called me back – “Hey, how'd that go? Here's this other person.” And then, that's been a really inexpensive marketing tool. Yeah, I don't know what the rules are on that. It's my company, I don't know. I think you're allowed to send wine to people. -to do anything like that. You what? You sent a gift that was worth more than $2.50?
Eric Jorgenson: I think that's the only way some of these things function. I feel like there's sales SDRs out there who are like, I have been given a budget, if you get literally get on a 10 minute call with me, I will send you an iPad. Here's like swag box. Please just make it look like I'm doing my job as an SDR and that you are a warm lead. I will pay you handsomely for your time.
Zach Marshall: I need one positive quote that says you will maybe schedule a follow up call. And then I'll give you an iPhone.
Eric Jorgenson: It's the end of the quarter. What do you need? What do you need?
Zach Marshall: The end of the quarter emails are the best, absolute best. Hi, I really want to serve you, but I need to make money right now. What was the question?
Eric Jorgenson: It was about the services, the variety of them. What was it about them that made them sort of less repeatable or scalable or non-?
Zach Marshall: Yeah, so we just got into doing the work instead of doing the connecting. So, the labor side is very much still something where it's just matching once we get it right. You need something, we find you that thing. We still were always matching like vendors to clients and so on. We worked on a financial fraud case. We worked on a security build out in a home. We worked on a bugout thing for people who want to be ready in case of Armageddon. We helped staff some events, helped staff some private security, like full time W2s. And across all of that stuff, because of how we went to market with it, which is kind of this word of mouth who you know thing, I didn't find out until very recently that I shouldn't have put myself in the I'm the consultant seat. I should have said, “Oh, I'm so glad you reached out to us, we know exactly who you should talk to you.” Because it turns out, I could have charged the exact same amount that I ended up charging, except I wouldn't have had to put in 23 hours on a single project or whatever. I could have just been like, oh, and for doing that, we're going to charge you- just so you know, we're going to add 10%, blah, blah, blah, this is how our business works. And we're glad that we can find you a great vendor. Let us know if it doesn't work, we'll find a new vendor. And we could have done the same thing the marketplace would do just with a little bit of white glove help and maybe we check in with some customer success. And on the other side, I could have gone to those vendors and ben like, hey, we're going to charge you 10% as well. Just so you know, we're charging both sides. But we're charging you 10% because we like you, but we like five other companies too, and we want to drive business to you. And we probably could have made 20%. And I think if you look across our profit margins, we made about 20% when we added consulting hours plus the referral fees we charged. And so, maybe we just did it wrong. And at this point, I spent so much time doing that, it just kind of came full circle where it wouldn’t be easier if really we were either a catalog for vendors for people, or a catalog of labor that can be used. And labor is the one we want to go after. That was our main goal. It's still a huge- I mean, it's a massive, massive challenge. But I think I mentioned earlier, I'll tell you about some details. The details are even the best companies, they want to pay a higher rate than they've paid in the past but not a rate high enough to make somebody move or relocate, not- or maybe a gig just isn't paying quite enough. Like there's a big pay expectation misalignment because every- in our side, where everybody we talk to is quality, even I guess you can say the simpler jobs, we have the quality version of the simpler job, they have already kind of figured out ways to negotiate right now and figure out how to get paid a little bit more. And the vendors have figured out how to maybe staff something bandaid for a little while. And that's almost good enough that we've had a lot of misfires where we connect people that literally are exactly what we think is right. This person's vetted, perfect for it, they interview well, this person says we'll pay for it. But then when it really gets down to brass tax, it's like, well, we said we pay 50 bucks an hour, but we're only going to pay 40 bucks an hour at first. And then the other person is like, well, I said I would come out there, but actually, I can only come out there for 30 days at a time because I don't want to relocate for this job. And the fact that we're so early in the aggregation, meaning we don't have labor everywhere, means that a lot of these transactions just don't happen. The amount of times that I had to text somebody back and be like, “Hey, thanks so much, but it looks like it's not going to work. We'll tell you about the next job.” And that sucks.
Eric Jorgenson: Super sucks, after you invested in both of those, acquiring both sides of that market and doing all the legwork in the middle, for free. And so that's now a loss. And as a young marketplace, we kind of take for granted that we fear the marketplace- the marketplace has leverage over individual- a mature marketplace has leverage over individual actors. Like if you totally suck as an Uber driver, or crash your car, drop somebody off in the wrong way, or whatever, your career as an Uber driver is over and that is punitive. But when you are a brand new marketplace, you can’t really threaten somebody with like, you'll never get work from us again. And they're like, this is the first job I've ever done with you. I don't care.
Zach Marshall: And I haven't even done it yet.
Eric Jorgenson: Yeah. And it won't work. So yeah, it's a lot of community and relationships and selling the vision at first because people aren't sort of willing to give you a little goodwill, probably on both sides. It's hard to even start that flywheel.
Zach Marshall: Yeah, the term goodwill is really interesting there. I think I've found that the goodwill has been there all the way until the end. And then right at the end is when it usually is like, oh, you know what, I can't just make this decision on goodwill. I have to get paid more. I should have said that. Or I have to- that one thing I said was optional, that credential, like no, I'm not going to staff the guy until he has that. And so no, that doesn't fit. There's these different things. It does remind me though, a bit of a tangent, I spent some time on the phone with one of the guys that built out I think the West region of the company Compass, which is the largest real estate brokerage in the world now. And he was an executive there. And he talked to me about how they went to market in specific regions. And they would find like five or ten influencers that would be like the region plank owners, like these are the guys and women who are like starting launching that space, and they'd have to get enough people to launch it, and then they would launch it, and then people would copy them. And I've looked at that as well. It's like, if we get to the point where we can get the community going, we get enough signups, I think when we put a marketing budget on it, we will be focused on specific regions where the employment law is in our favor for gig-based security work and where the population and market is in our favor, and honestly, where the security risks are high. So like, Illinois just passed a law that allows a lot- I think I read like 50% of their jails are going to be emptied out because a lot of things that were detainable crimes aren't anymore. And so that scares a lot of people. And I think I read, man, like second degree murder was one of the ones. Like second degree murder is no longer detainable in Illinois. If I'm wrong there, I don't know, yeah, sorry Chicago, I don't know. But I think that's true. And if that's true, that would be a great example of a market where if we use marketing dollars at the right time, we may find that a whole lot of clients show up and are like, hey, can I get some security? We're going to do this thing or we're going to have this event, or maybe I'm going through a divorce and I'm worried my spouse is going to kill me, and now that person won’t get in trouble, so I want security. I don't know. But I think the regional influencer base, like we find a couple of guys who everybody knows in the region, we kind of help them kick off their independent business through us, and then drive clients to them would lead to some growth in a region. And if we were regional, we might find that the marketplace- we can push back a little and not be punitive, per se, but say, look, if you cancel last day, and you've known for 72 hours, you get penalized for three weeks or something.
Eric Jorgenson: You're on the shortlist. I google that real quick. When a new Illinois law takes effect next year, it will do away with the cash bail system in the state meaning suspects charged with felonies including secondary murder, aggravated battery and arson will be released without bail.
Zach Marshall: Okay, so that's not as bad as I was thinking. It's not referring to people who are convicted. This is talking about bail during the trial process.
Eric Jorgenson: I'm not going to read the whole article right now, so I don't know that you are wrong. All I know is that the first paragraph says that there may also be some early releases or whatever, maybe.
Zach Marshall: Yeah, I'm not going to get into politics, but that makes a lot more sense than what I had heard. Somebody told me something. I was like, really? That sounds crazy. We're going to lay out all the criminals?
Eric Jorgenson: Better repeat that on a podcast without fact checking it.
Zach Marshall: I'm not worried. Anybody can go check all my social media. There's 0.0000 politics on there because I'm focused on this, not that.
Eric Jorgenson: No, this is very dramatic news. The headline is The End of Days.
Zach Marshall: Wow, that is dramatic. The country's over, everybody, hire your private security company. Call Zach.
Eric Jorgenson: This is literally Armageddon.
Zach Marshall: Okay, what's funny is that's an actual problem in the private security space is fear mongering. There's like the top private security company, Gavin de Becker, in New York City doing executive protection, they just sold, I forgot what the announcement said, I think Crisis 24, one of the big- one of the huge companies bought them. And I'm not going to say good, bad, or ugly, whatever. But the fact is, the founder, Gavin de Becker, writes books about how dangerous the world is for your kids. You go read one of those books, and by the end of it, you're like, oh no, they can't even go to school without a security guard. We're going to get kidnapped on the way to school. And that's just never anything that we want to be a part of. Which b2b is a lot cleaner in that regard. You're not trying to scare a corporate security manager. A corporate security manager already knows what their risks are. You can do a risk assessment and have a professional come in and give you, hey, here's where your risk surfaces are. This one's a little scarier than that one. Tell me what you want to do. We just want to connect the people who solve the problems you have.
Eric Jorgenson: Yeah, you never want to be incentivized to create fear unnecessarily in innocent people. I think that marketplace, regional or city focused marketplace, that's a classic. Like how small can you start, build liquidity, build leverage, build a community, get some transactions done, and scale up from there. And I would hope, maybe there's more details there, but that would- sounds like there's plenty of other variables. But if everybody's local, maybe you close a few more connections.
Zach Marshall: It's funny you said that, it reminded me why I didn't do it before. And this is another big mistake in how I did fundraising. It's too bad capital raising has to be such a core piece of the early startup if you don't bootstrap because it can really screw you up. But one of the reasons that we didn't go regional first is because we wanted to have more opportunities to charge people money because that would help our runway. And so that's why it's a little lukewarm to be like, well, we're going to be national, solve everybody's problems, so that when the right customer comes in the door, we can actually charge the money. And we did. But if we had gone regional, the risk would be maybe that client that calls us in a different state or goes to the website in a different state and goes, oh, this is only in Chicago, so I'm not going to call Zach. So, we left our options too much open, and that meant we probably with the amount of effort we've put in to some of the stuff, if we just picked a city we probably would be like 10 times further.
Eric Jorgenson: Yeah, you'd be a little more maybe locked into a model, you will maybe not have learned as much or have the connections to some of the corporate stuff, which is interesting. But I think we made the opposite, I don't know if it's a mistake, but we did the opposite playbook with Zaarly 2.0. We went really one city at a time and tried to go really small and focused and build liquidity and I think maybe erred on the side of too few cities and too slow of growth to try to bring that along. Startups are hard. Startups are hard.
Zach Marshall: They really are. And corporate side, the motivation has been an interesting roller coaster through all this as well. Because when the direction is less obvious, there are days where kind of you have a couple experiments going – Kurt's doing customer discovery with these types of customers, I'm flying between different states to build relationships with enterprise customers that that I know take all this extra time. And so, you don't get that affirmation. And sometimes you don't get any feedback at all, or any useful feedback. The whole idea that you can never have a bad meeting, like welcome to sales. You'll never have a bad meeting if you know how to set a good meeting and keep a good tone. So, sometimes there's just no feedback, which is hard.
Eric Jorgenson: Yeah, I think when we talked offline, maybe at Capital Camp last, there's a really exciting new sort of pipeline around enterprise, like big corporate enterprise stuff. Where does that sort of fit into- Is that part of the sort of services piece? Is that in parallel? Where does that fit into the big picture?
Zach Marshall: It's in parallel. So I've kept that going. It's actually grown. Some of those relationships are more mature, some are about the same, but we've added a few more logos. I try to put a certain amount of hours every day on the- well, some days, it's only like an hour, but I try to hit those relationships every single day on my little CRM to make sure that I'm moving them forward, adding them. Some of the companies that I went for directly were really, really hard to work my way up. And we have done that. So, that's an exciting piece, but I just know that it doesn't matter on the day to day. It matters if I close one, a ton. It can completely change how we can go to market. If we can get any of the logos that I've put in real time on and know the executives of now and have been introduced to C suites, and some of these are like 100 billion dollar companies, if we close the deal, provide them a ton of value, and can shift a good portion of the work onto a platform or software based, like a shift based model or gig based model, which I think is really possible, it would certainly speed us up and at least I think give us the resources to hire our seed team, which I have about eight people scoped out and what we would be doing and our goals, what that would be for 18 months, how much money we'd have to raise, and so on. If we got that through either raising or just through a top contract, that would shift the game. But I kind of look at them like they're unicorns; they're hard to catch.
Eric Jorgenson: Is that enough, one of those, to kind of flip the switch from like to default alive? You'd be like a cashflow positive company if any of those sort of come through?
Zach Marshall: Yeah, they're pretty much all big enough, other than one is almost such a peer marketplace opportunity that if we got it, it might just be that we've got- we actually have to kind of speed up, maybe go out to investors and be like, look, I need this right now because this customer wants to use us like 10 times a day, and we need to be ready for it. But any of the other ones would be big enough of contracts that a lot of it would be services, but a lot of it is services where, for example, if you have an executive protection detail for a few top executives, maybe top executives in America, and home base, wherever they are based, is going to have a couple of W2s that kind of are their main guards, and then there's a bunch of other stuff involved. Every time they travel, they need a new vendor, a new driver, a new whatever, because of licensing in all those different places. And so, these people travel all the time. And so now we've got a customer that, one, we're getting paid, let's say, a couple million bucks a year to run their whole program, and we're also using our own software to staff out everything that happens that's temporary. So, we would be cashflow positive for that period of time and probably be able to prove out, like eat our own dog food, to the point where we could then raise the cash to be like okay, now we're going to take this and we're going to go sell it to 40 other companies like this one.
Eric Jorgenson: Yeah, and at the same time building up your supply side, especially if you've got a variety of jobs that come in there. I remember I think the biggest lesson from our second episode, which still kind of stuck with me as really interesting, is that on the supply side, the workers, the vendors don't want to join an empty marketplace. They don't sign up in the absence of- unless there's an immediate job to do that they're signing up in order to fulfill. So I think that's- I mean, that's why some of these contracts are so valuable. But as you sort of look at, I think earlier on, you said a focus for the next couple of months is going to be to sort of rebuild that community and use the new website that you have built to sort of staff or start bringing those people on and filling that again. Are you going to have a different approach? Do you feel like the services are giving you enough to be the bait on that hook? Has anything changed there?
Zach Marshall: Yeah, so a couple things changed. One is we've just been in business for a year, which really has had a lot of impact on the folks that I talked to. Their trust in me has gone up a lot because I've been around, and they talked to their friends or whatever. A bunch of people call me, hey, help me, I'd love to go get an executive protection, what do I got to do? That kind of thing. So that's helpful. The second is I've gotten better and better at pitching myself to these vendors and some of the larger companies as well. And then when they trust me, they'll send me people. They’ll be like, hey, here's a bunch of guys that could use this or want to use that. The next is, I think, with this new launch, we're going to not ask for as much information. That was a big- we were asking for so much information the first time that we could like almost staff you. We could almost literally be like, look, we've got everything we need. Thanks. We'll call you when the job’s ready.
Eric Jorgenson: Fill out your whole LinkedIn resume, everything.
Zach Marshall: Yeah, just government background and certs and stuff like, oh, we're going to make you do a lot of work for no reason. And then maybe we'll call you. So that was wrong, obviously, I learned that. The other way to do it that we're looking at now is we've got this whole job board that is better than any of the other- has more jobs on it for more sources than the other job boards in the space. And then what we're doing is going to say, okay cool, you could be johndoe@gmail.com or whatever. I'm sure we’ll have it verified but maybe not at first. I don’t know. Currently it's not. So, there you go. Everybody knows that secret. You'll sign up and it's like, okay, well, now we have an email that we can send some things to, or they can opt out of the job updates that we will send once a week or whatever. But they have to use that to login. So, then we can track who the user is, what they're doing. And they can save jobs to their favorites and all that kind of stuff. But then we'll say, okay cool, if you want to get discounts on all this cool guy stuff and tactical stuff and things that go along with it, because I've got a bunch of folks and friends in affiliate marketing, so I've been learning a little bit about that, we'll say you can get access to that, but you have to get vetted first. We need to know that you are- whether or not your law enforcement or former SpecOps, or you’re civilian or what your thing is, and based on that, you're going to get access to all these different tiers of discounts and different things. And we'll do deals of the week and the whole nine. And so, I'm kind of hoping that that helps people get across the data entry. And we're still not going to ask for too much because I'm realizing that when the connection happens, either they're already directly having to prove this stuff to the hiring manager, or if they're asking me to make the intro, because we want to have a little button for that, we'll get on the call and we'll verify it all, or we'll verify it all once they pass the- once we are asked to do it. If it gets to scale, we'll use something like HireVue or whatever it's called to do the first five questions or we'll do something that hey, once there's a match, then we'll ask you for more and then we'll figure out if people churn off of that, at what stage. But we were just way ahead of ourselves the first round. Now it's like just the skateboard. Here's the job board, cool. Now it's a better job board than any other job board in this niche. Cool. Now we're going to give you discounts because we know you like these types of jobs, we know you like this kind of stuff, sign up for it. And then we'll- I’d have to look at my roadmap. That was another thing that I did for the first time. I've done it before a little bit whiteboard, but I did some actual customer story work and following that, and so we have a whole lot of features that we could add one at a time that make it more useful for this side of the market. And then eventually, we can let vendors probably at first- or I think the first thing for vendors is just letting them post jobs and then having an approval process for that, so they can have a job but I or Kurt or somebody has to approve it so that it doesn’t just go live, people aren't posting pictures of their cats on our job board. Only fans situation. Don't want that.
Eric Jorgenson: You're going to sign up to vet all those photos. I wasn't super worried about the professionalism of the security contractor.
Zach Marshall: I don't know a lot about security, but other folks do, and they tell me like you really want to prevent people from being able to put things on your website.
Eric Jorgenson: That's fair. I mean, we had some of those. I mean, home services marketplace, and we had some things that had to be removed.
Zach Marshall: That one right there. Let's pull that down.
Eric Jorgenson: That's not a hammer. What do the discounts have to do- Like, how does that fit in? The affiliate marketing discount thing feels like it's a little bit of a branching path.
Zach Marshall: It's one example- It'll be an experiment, we'll see. But it's not to make money. So the only reason they're affiliates is because a lot of these folks already have programs so that we can go in and talk to them and say, hey, we want to do this, but we want to give our people discount, they're vetted. How's that sound? Because they already have programs, I don't have to go do one at a time sales. If it works, maybe we'll go and actually build relationships with the folks. But what we're trying to do is just create an incentive that you give us more information and to come back to the job board. And some of that isn't- because you might say, well, why do you want them to come back to the job board if they already have a job? And well, we want them to come back to the job board to know that we're alive. We want them to know that this website is actually getting updated every day. And the deals are changing and things. And so, it's just a way to drive people to us to say, look, you can see jobs. Once you're vetted, we're trying to give you benefits. So, here's some discounts. Maybe we will link you to training. Like just whatever we can to have a reason to do the second level of signup.
Eric Jorgenson: Yeah, maybe I guess it depends what you're envisioning going on there. But you've talked before about sort of helping these security pros sort of level up in you can get this certification, and now you can earn 25 bucks an hour, or you can train on this equipment, or go through this experience or gain this credential. Those are all sort of interesting things that are more on theme, but you probably have a much clearer picture of what is behind that wall.
Zach Marshall: Well, and the industry, especially when you step away a little bit from the top tier, the industry is full of folks who are really interested in guns and in second amendment stuff and in a bunch of those little items. And we hope that they keep coming back and want it. But then the other side is even a Navy Seal gets out of the Navy and wants to go do exec protection, he still has to get certified. So maybe you sign up and we say like, cool, get vetted, and we'll connect you to the CPR program that works in California and the BCIS program that'll help you get your eight hour course online here. And these are the table stakes, and you can go do it somewhere else. But here's a way that you can save five bucks doing it through getting vetted.
Eric Jorgenson: You're all in one place.
Zach Marshall: Yeah. And this stuff is pretty simple. But it's not simple if you don't know it, I guess, if you don't know where to find it.
Eric Jorgenson: You need somebody to sort of introduce you to the world and show you the one, two, three.
Zach Marshall: Because it could just be a blog post, but I don't know, guys like to save a lot of money. Like everybody in my entire Seal team signed up for Promotive when it existed.
Eric Jorgenson: What was Promotive?
Zach Marshall: Promotive, and it's been bought by one of the other ones, it's like you get vetted into some type of professional and then you get discounts based on that. So, if you're in construction, you would get like toolboxes. It’s funny, the stuff we got was like Black Diamond skis. I don't know. It's hilarious stuff. It was all like outdoor gear. I was like, man, I'm really glad that this fits in. I think they just want cool guys to wear their brand. -by giving us 5% off.
Eric Jorgenson: All the guys, fit guys with great beards using my skis. I mean, that probably works.
Zach Marshall: Yeah. If I was selling skis, I'd be doing it.
Eric Jorgenson: Yeah, absolutely. You mentioned in the beginning, under sort of the focus piece, firing a customer. And I want to sort of revisit that story and that decision and how that went.
Zach Marshall: Yeah, so firing customer is definitely- it's a term that I've heard other people use, and I use it to make it a bigger moment for me. It wasn't like a full on event. We're just like, hey, we're just not going to provide that service anymore. Like, sorry, let us know. We'll still try to help you and maybe point you in the right direction. But we're not going to do that. And what it came down to is just b2c. And we wanted to have more of a b2b focus. And part of that is because the b2b stuff we did, even though it was a lot of work, paid us a lot. The b2c stuff, a lot of folks don't, even super wealthy folks don't really have budgets for it. So you have to sell and convince. And honestly, even if they really want to buy, which is the case with almost- I mean, everybody we've talked to, we've definitely been early adopter style, these are folks who really want to buy stuff from us, they want to get consulting from us, it just would take a lot of time to figure out what they actually wanted to pay for and what they actually wanted to do. And not their fault. They had to figure it out themselves, like, oh yeah, I want that, but really, I want this other thing, and well, maybe we'll do that, and the timing shifts. And that's worth it if you can get a $50,000 deal. But for $5,000 deal that you only get 10% of, well- And so, the firing of the customer was more of a big deal to be like we don't do any customers like that anymore. We don't do that and we won't do that sort of thing because we on a whiteboard can write down the value, and it's just not worth it. We're not learning enough from that.
Eric Jorgenson: We don't like losing money, so we're going to stop doing that.
Zach Marshall: I don't like losing money. And if we are going to lose money, we're going to learn from people who someday will pay us a lot of money. And the consumer just- I had another friend call me up recently with an idea that was selling into the same space. And I was just like, man, tell me how you're going to find those people. And once you have a list of a hundred, then maybe go consider it. Until then, take that same idea and sell it to a business as a budget.
Eric Jorgenson: And it's not to say, it's hard to say no to revenue when you're a startup and you don't have any. And it takes the math and the insight to say like, man, this is honestly how much effort went into closing this deal and very honestly how much profit came out of it. And on the other hand, I put 2x the hours into this, but got 10x the profit out of the deal. And we can't afford to keep doing that.
Zach Marshall: And for one of those customers, so in this case, it would be like- one of the things that I've realized is, and actually, this happened across both the services back to software choice and the firing the customer choice, what it came down to was I saw a better business to solve that problem. The better business to do some of the services we were doing at the point where we weren't learning versus the amount of time was to go start that business. Oh, I'm going to go start a security company. And then I thought, well, I wouldn't do that. No way. It's way too hard. It would take me 20 years. It's super fragmented. It's hard to differentiate. All this sort of stuff. Oh, I'll just go by a security company. I could buy a security company, if I went to raise a search fund for security companies. I mean, there's definitely a thesis. Security, I think, is going to explode over the next 10 years, 20 years. But I don't want to do that right now. That's not what I signed up for. It's not what I told my investors I'm doing. We're connecting, we're helping labor, our goal is to help a million workers live better lives in the security industry by reducing complexity and cost. That meant back to software, we got to get back to the platform that connects people. And then for the customer firing, it was the same thing. It was like, look, if I wanted to serve this type of customer, I would start an authority site on all this kind of stuff. And I would refer this customer to a bunch of really cool shit that solves these problems for them, and I would get affiliates on it.
Eric Jorgenson: That'd be a much lighter weight model. And both of those are closer to bootstrap. Not what you raise money for, not the big marketplace vision.
Zach Marshall: I don't think you raise money for either. I mean, again, if you're going to go buy something that already has a million in revenue or something, then maybe you have to raise money for that or take a loan, but certainly the authority side, it's hard to see how that turns into a billion dollar business.
Eric Jorgenson: Okay, so let's sort of wrap up with some of the, I don't know, maybe the more broad lessons learned or patterns observed. So, we talked a lot about sort of what you've maybe changed your mind on or how the tactics have changed. But what’s some of the stuff that you wrote here, you might have others, but in one of your notes you sent me, a bias for action, mixed with patience. What's the right cocktail there?
Zach Marshall: Yeah, so I think the startup method that is talked about is to hurry up. Just you're always going as fast as you can for growth. And I think what I would tell people who don't have product market fit is don't hurry up. Whether you're bootstrapping or raising money, whatever you're doing has enough of a runway to be able to take it slow. But that doesn't mean you're not working hard all the time. It's you've got a full bias for action where you're taking as much action every day to get there. But it's going to take a long time, and you need to know that, believe that. You're not going to find it. It's not going to just pop up day one. And if it was, you already have it. That's the whole product market fit challenge. And then you have a different business. It's like, okay, I have product market fit. Now it's how do we grow it? etc. Like with Zaarly, I haven't studied the business well, but it seems to be that there's some level of product market fit with marketplaces that connect plumbers and so on. Like, people want that, plumbers want that. So instead, it's a thousand other things you have to figure out on how to make sure that you can connect those people fast enough, liquidity is there, quality is there, and you've got all these other things. But when you don't have product market fit yet, you’ve got to slow down. It's not a rush, you got to figure it out.
Eric Jorgenson: I’d agree with that. I think I was just reading something that I think rhymes with this idea. And I haven't heard it said this way before, but I think it's a helpful way to think about it. It is a little bit counterintuitive or maybe counter to what people think the startup world is like, so Clayton Christensen wrote it and I think it was smart capital wise capital is impatient for profits first. And then once there are profits, you're impatient for growth. And you’re choosing where your emphasis is. So, I'm patient for growth in the very beginning and impatient for profits. And that is I think the not startup-y way, but to say find product market fit, execute transactions that are net positive. And a lot of times I think in a startup or SaaS company, the business models are such that they're not profitable at the company level, but they're either deals with good gross margin, or they are sort of unit economic profitable, or they're getting a bunch of eyeballs. But there's very few businesses that are truly like loss, loss, loss, grow, grow, grow, grow, grow, grow, grow, like Facebook, become profitable in year 10. Like, that's extremely rare.
Zach Marshall: Facebook, it's that way because it was ads. It was pretty obvious, you get enough eyeballs, then you can turn on revenue.
Eric Jorgenson: And that there's network effects in there. So don't turn on- don't scare away new users until you have the lock in of the network effect. Marketplaces have some of that. It's an interesting mix of like there is the network effect at scale. So you really need to keep growing. And so, growth is important from that perspective. But also, you got to know that you can execute individual profitable deals in order to sort of get there and that both sides are excited to keep coming back and you can acquire those customers profitably. And that's hard as shit. It's really hard. It's hard to even know, to be honest.
Zach Marshall: It is cool because the closest thing to that that I've had, when it really just- for me, it's unit economics. And that's why a bunch of the services turned out to be like we're not going to do this, the unit economics is not there. The best ones are like a public company called us and needed- they were threatened by somebody, and they needed for a board meeting- the bad guy knew where the board was, when the meeting was going to happen. This is a pretty direct threat. And so, they're like, look, we need armed guards. That's what they wanted, some armed guards. And they needed a little bit of education on what was allowed and not allowed in that geolocation. They also needed some education on how it works. Nobody's, if there's a real threat, no vendor on the planet is going to send you one person. They won't do it. They'll send you at least two because they have to be able to protect each other. And we're not hiring Jason Bourne here. These are folks that are out in the open, you got to be able to do it right. So there's a little education there, took no time. And I ended up paying like four middlemen or something by the time this is over, but within three hours, we had two armed pros at that boardroom. And the unit economics were there. We charged a lot. I mean, we charged a really good profit margin on that. Maybe it was more than 50%. And it took obviously less than three hours. And so on. The quality was there and we got good feedback from everybody involved. And I was like, man, this is it. But then, how do I drive that deal flow right now when if the next person calls, I might not be able to fill that? That one works, but I don't have- I think that and then every time that somebody takes a job, I'm really happy. So, I think with this new refocus, if we can get the job board going and then have a reason that people give us more info, which maybe just having the job board will be enough and people will be like cool, I'll vet so you send me jobs that actually fit my filters. If we get to the point where we then add the gig board, which is separate than the job board, and then when the gig board happened, it notifies people in that location or something, and we start seeing that work, where those folks are calling up the hiring manager and being like, hey, I can do it, then we might have something.
Eric Jorgenson: The rate of learning in a startup is quite something, which is what this series is all about. Man, it's so crazy to see how many things change and how much new information arises. And just Taylor Pearson, who I’ve done an episode with, always says reality has a surprising amount of detail. And even, you've spent your career in this industry, there's so many- And every time you get closer and closer to a deal or a new market or a new customer, new surprises emerge, new, I don't know, complexities sort of arise. You're like shit. Which is why the focus is so important. Like, find a narrow thing, find your niche, and keep getting better at it and know more of those details than anybody else.
Zach Marshall: Yeah. And if there's one thing that I'm more bullish on than ever, it's this industry, how messed up it is, and how much some of these solutions would help. And I think, I don't know, I don't know if I would give myself an A+ or a C- as far as like a founder over the last 14 months. Like, it's hard to understand that, how to grade yourself in this period. But I'm hoping and I feel pretty confident that I've learned enough now, and we've learned enough now, that we can just grind out the pieces that we really think work, the value that we really think is right, and other than if we close a multimillion dollar deal, not get distracted again.
Eric Jorgenson: Yeah, it's a huge pleasure to be along for the journey with you. Do you feel like you can- What is your optimistic or sort of ideal scenario for four to six months, maybe for our next conversation, like what do you hope to be reporting?
Zach Marshall: I would really like to have a cadence going where we have a live, usable product, usable web app, because we're still on web flow, that is getting feed new features released on a schedule. That alone would make me really happy because that means that we have users that are doing something, the sales, in air quotes, is like I’m going out and getting users, people are signing up and looking at jobs. And we've created some level of tech movement that either me or a 1099 or somebody is moving it forward one step at a time. I think that'll show the maturity that we need, and hopefully have the user base to raise capital to hire a bigger team and go, or it will be learning enough to be like, well, we got to keep doing it this way for another six months. We'll see.
Eric Jorgenson: I'll be keep my fingers crossed for you for landing one of those big contracts for the, that enterprise pipeline to come through. I know those are unicorns. Tease me.
Zach Marshall: I'll tease you on two of them. So two newer ones, one would bring us back to the original dream before the original pitch of the original company, which is some international stuff. If we get that, it would be epic. It would be a wonderful way to build a ton of credibility with a lot of folks. And it's really straightforward. It's like we know exactly what the credentials are that need to be met. And it’s staffing. So that would be cool because we would use the platform to do it. And you couldn't get an interview without signing up and doing it the right way and going through our program. And then the other one is interesting because it would pay really well. It's for a $50 billion company. It'd be at their headquarters. But it'd be the mid to lower paid folks. Which it's interesting because the deal would be big enough that it would be fully worth it and the profit margin would be there. Which would be a great reason to test because I want to test but I haven't shifted to it. I want to test if the most churn in the industry happens at the bottom, like 300%. People are swapping jobs or finding a new job or leaving every four months. So that seems like a place that even the W2s are mostly gig workers. And so if we could figure out that, it'd be really interesting because that's tough problem. But I also know, for me to do that without having cash, like without having a real reason to do it, it would be like literally starting a staffing company for six months.
Eric Jorgenson: Those are interesting. That one, that last opportunity is interesting because that's kind of a built in regional focus that gets you some liquidity, it gives you some staff in one place. You can go after other contracts there, sort of build that density. So that's cool. I'm so grateful for your willingness to kind of bring us along and show up and be transparent and honest, and I'm just glad you're tackling this problem.
Zach Marshall: It's fun to get on here.
Eric Jorgenson: Yeah, that's good. Anything else you want to give us, or should we sign off and see you in a few months? And you could give us homework too. Let us know, should we be like texting, proactive reference checking for you with some chief security officers or anything? Should we like write a congressman? Like what's our-?
Zach Marshall: Yeah, if anybody knows any decision making security managers, corporate security leaders at any company in America, happy to talk to them. But honestly, right now, this is a product focused grind. We need to grind out this piece of- this base piece of software. We've already, in our network, we have enough people that we can get it in front of that we should get the early signups and then figure out how we're going to do that and grow it. So right now, it is just kind of I play music every day, and I try to get into flow because I'm a 2022-
Eric Jorgenson: A web flow blackbelt.
Zach Marshall: And hey, if all goes to complete shit, I'll just start a YouTube channel where I teach people how to use web flow.
Eric Jorgenson: Oh, I'm signed up. I don't know shit about how to use web flow. But I need to learn. So you're an inspiration on that front, too.
Zach Marshall: Yeah. It really is easy. It's funny, on the worst days, you're like, man, I could just start a consulting company and do web flow for three months.
Eric Jorgenson: It does feel like one of those crazy arbitrages. Man, there's so much value to be unlocked in some of those no code tools in like the businesses that are just sort of slightly tech laggards.
Zach Marshall: Yeah. And you still go to like book a vacation with a certain company or buy something and you can't even use their website and you're like, oh, my goodness, I should call these people and tell them I'll do it for like a grand.
Eric Jorgenson: So much opportunity out there, man. So much.
Zach Marshall: So much opportunity to- no, it's really not. You can spend your whole life doing that.
Eric Jorgenson: Nope. We need to stay focused. Focus, focus, focus. Alright, man, thanks so much for taking the time. Talk to you again soon.
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