Building a Business That Scales: In-Depth with Ken Gavronovic

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Summary of Episode

This week on the Startup Savant podcast, we dove deep with Ken Gavranovic into scaling businesses that stand the test of time. We uncovered the essence of product-led growth – shining light on the user experience as a catalyst for organic expansion. Ken shared the riveting journey of Interland; from equity hurdles to a triumphant IPO, emphasizing the monumental leap from $0 to $200 million. We rallied behind his advocacy for employee ownership and aligning your team’s heartbeat with the company’s core mission.

About the Guest 
“While still in his 20s, Ken Gavranovic started Interland, now, growing the company to $200M and leading its IPO. Since then, he has been responsible for hyper-growth at other unicorn businesses and today leads growth at the young tech company Blameless.”

Podcast Episode Notes

[00:00] Inspired at a young age, Ken is a self-taught coder that values efficiency.

[03:34] The speaker has experience in startups, large companies like Cox, and currently works at Blameless focused on enterprise software.

[07:41] Young founder raised $25 million venture capital, felt out of place among older professionals in New York.

[10:50] Believing in oneself and others led to success.

[15:31] Evaluate team, use data-driven decisions for leadership.

[17:29] Use a critical thinking framework, set objectives and key results for clarity and alignment in the organization.

[22:54] Book emphasizes practical advice for business success and marketing strategies.

[25:10] Some products sell themselves, others need education and trust-building.

[29:33] Understanding customer needs is key for sales-led growth. Matching sales structure and marketing is essential. Moderation of one-off requests is crucial for innovation.

[30:27] Discussing the versatility of software options and pricing structures for businesses.

[35:24] Free trial favored over freemium for fair business model.

[39:32] Leader should be humble, build structure and empower people for business to scale.例: scaled business from 0 to 200 people, but slowed down due to lacking infrastructure and processes.

[41:32] The speaker praises a practical book based on experience.

[46:22] The speaker appreciates entrepreneurship and encourages taking risks for success.

Ethan Peyton: Hey everybody and welcome to the Startups Avant podcast. I’m your host, Ethan, and this is a show about the stories, challenges, and triumphs of fast-scaling startups and the founders who run them. Our guest on the show today is Ken Givronovic. Ken’s history in business and tech is just out of this world. He’s led successful acquisitions, he’s founded a company, he’s taken it public, he’s founded multiple companies actually. He’s held so many roles at so many different companies and I’m just gonna give you a list in order.

Founder, CTO, CEO, CTO, VP, partner, VP, VP. There’s a little trend there. EVP, SVP, CPO, and he’s currently the COO of Blameless. And you’ll see why I had to take a big breath for that. Ken is joining us today to talk about his new book, Business Breakthrough .. And I’m going to track, here we go. And I’m going to try to pack as much into this conversation as I can. So let’s just get right into it. Ken, thanks for joining me today.

Ken Gavranovic: Ethan, so thank you for having me, I’m really excited.

Ethan Peyton: I am stoked, and let’s just jump right in. And let’s start even before the beginning. How did you originally get into software development? And then can you kind of wrap that into a brief synopsis of your background?

Ken Gavranovic: Sure, yeah, I’ll try to do a short version because a bunch of different titles that we talked about. I guess it probably started as a kid. I remember going to see this movie called War Games. And it wasn’t about the war part, but it was this idea that a kid could sit in his house and if he knew how to code, could literally do anything, change the world. And from that, I bought books to teach myself coding. And I think I was like  in my…

Ethan Peyton: Hahaha

Ken Gavranovic: My mom would come over and there’d be all of these like  year olds sitting with their  year old because I had kind of taught myself advanced programming. Later I remember at my first job, I was drinking my coffee, walking down the hall and I saw everybody standing in line. And one of the things I’ve always thought about is efficiency. I think a lot of people that start businesses like that, there’s got to be a better way. We’ve got to make it different, right? And I saw everybody standing in line. They were all waiting to use this thing that I don’t know if you heard of back in the day.

called the fax machine and they were all gonna go fax stuff. And I was like, that’s crazy. That’s an incredible waste of time. So I went to the boss and I said, hey, you know what? I can write something where everybody can sit at their desk and fax. I wrote it the next year, we sold $ million worth of that software. So that was my first big entrepreneurial thing. And also a good lesson, because I didn’t own any of it. So later I was like, hey, wait, you made millions and I didn’t get much. So that was an early lesson. And like when you’re being an entrepreneur to make sure that

Ethan Peyton: ooo

Ethan Peyton: Yeah.

Ken Gavranovic: you own a good piece of what you’re creating. If you want, I could share some of the other stories, just give you like that brief background of titles, if that’s helpful.

Ethan Peyton: I’m never gonna turn down a story, so have at it.

Ken Gavranovic: All right, cool. Just in the quick summary, did a bunch of startups, some first base, second base, but I became convinced that every business was gonna run their business on the internet. This is kind of before cloud computing, when it really started. So I started a company called Interland, which we’ll talk in more detail. I’ll do the short version right now, but it went from zero to  million in three years. As CEO, took it public. Everybody that worked, my executive team.

when we went public was probably twice my age. So it was a great experience and this was before the dot com crash. So I got to experience all the excitement up to and after the dot com crash. After that, I’ve done a lot of other startups that probably won’t talk about today, but I’ve driven transformation at large companies like Cox where you got to meet Andy Jassy and talk about like going to the cloud or.

investing in other startups or even, as you mentioned with companies, I was with a company called CourseDog, two amazing young founders in EdTech. So when you go into college and you go and register, it’s crazy that the system doesn’t know which courses you need to take to get your degree. So we fixed that, sold it to JMI Equity. So lots of great experiences for those people that are in the technical land. I was at a company called New Relic, which was a public unicorn, I ran product and engineering. And

And now I’m at a really exciting company that’s called Blameless that’s funded by some of the biggest VCs on the West Coast, really changing the way enterprises build better software and more reliable software. So really glad to be here and hope to share some stories that will help your readers on their journey in entrepreneurship.

Ethan Peyton: What’s the role that you’re currently playing at Blameless, and how did you get involved with this company?

Ken Gavranovic: Really good question. So I’m a from my experience in Cox at other places when software breaks behind the scene. So blameless has like Ticketmasters, a customer Home Depot. But when software breaks, you know, there’s people have to communicate what broke. They have to fix it. They have to then write up a report. They have to figure out how they not make that happen again. And then they have to make sure they actually fix that thing. That’s a very manual process in so many companies. And so blameless was built.

to do that in a way that’s blameless. Like, let’s fix these things, but not pointing fingers. And so I was really excited about the idea. And I’d worked with Jim Goschi, who’s the CEO of Blameless at New Relic. And so he invited me over and I joined around seven months ago. And I run the go-to-market, in this company I run the go-to-market organization, customer success. But to your point, I’ve run product, I’ve run engineering. I’ve kind of been a CEO. I’ve kind of seen all different roles in scaling a business.

Ethan Peyton: Yeah, it really seems like, and just from that long list of C stuff, you’ve really done a lot of everything. And I know that this current role that you’re playing, this is, your strategies there are something that we’re gonna get to talk about here in a little bit, and I’m stoked for that. But I wanna go deeper into this story of the company that you founded and took public of Interlend.

So can you kind of give us a little bit of detail on how that got started and what you made of it?

Ken Gavranovic: Yeah, absolutely. So I’d shared, I think in our interview earlier, when I was very young, I built a software and within a year we started selling $ million worth and I didn’t really have much ownership and the person that owned the company made a million. So that always made me feel like whatever I created, I wanted to try to make sure that everybody had equity, everybody had upside because it takes a team to build a really good business. It’s not about a person. Like I always say, you know.

Great people don’t need managers, they need leaders. And I was down in Florida at that time and I’d started a business doing what they call web hosting, now they call cloud computing. And we went from like zero to $, the first month in business. And I had some partners and I said, hey, listen, I wanna give a bunch of equity to our employees because I think this business is gonna be fantastic. And they weren’t into it. They said, hey, no, let’s just keep all the equity ourselves. And I said, I’m not good with that.

I’ll buy you out, you buy me out. They said, well, we’ll buy you out. And I got a list of the deepest, darkest fiber in the entire United States and the lowest cost of living, which was Atlanta. I took all of my savings, went to Atlanta, Georgia, literally moved here to start the business, rented half of one of the skyscraper, half a floor of skyscraper in downtown Atlanta, put my last $, in savings and built a company called Interland that we went from zero to  million and…

Ethan Peyton: Mm-hmm.

Ken Gavranovic: only a couple of years. It was a really exciting journey. And many stories in that I could share with you.

Ethan Peyton: Give us your favorite. Give us your favorite story.

Ken Gavranovic: Well, I would say probably my favorite story was when we got to the stage of venture capital raising. And for those of us, if you’re out there and you’re a young founder, and you’re a -something year old, and you’ve built a business that’s already doing $ million, you might feel a little confident. You’ve got to make sure not to feel too confident. And I was going to raise some money. So we’re going to raise $ million. We hadn’t raised any venture money.

prior to that, so we wanted to get some professional money. And I remember I was in New York City, and I walked into this building, and the people that worked with me were twice my age, so I’m this young kid, and I was sat down at this really fancy table. The table must have cost $,, and there’s million dollar pictures on the wall, and the main thing is the VC sat down, and they’re like, oh, give us your pitch, and you’ve got like five minutes to make a compelling pitch, or it’s not gonna work out.

And I did my whole explanation. He said, all right, I don’t know if I get it. Bottom line, what are you saying? And I said, well, the bottom line, simplest way is everybody’s gonna run their business on the internet. And that’s what we do. And we’ve already had a lot of revenue and growth. And I always remember to this day, he looked at me and he said, kid, do you believe you’re bullshit? I looked at him and I said, absolutely, but it’s not bullshit.

Ethan Peyton: Ha ha ha.

Ken Gavranovic: And it’s funny is that VC didn’t invest, but we had  different VCs that did, and gave us term sheets. So, it’s a big thing when you’re an entrepreneur and you’ve got a vision is to believe your vision, believe in yourself, believe in your team, and you’re gonna have naysayers, and you’re gonna have bad days, and they may be more professional because I’ve met like people at Benchmark Capital, I’ve met Andy Jassy, I’ve met a lot of different people, but you just believe.

in yourself, I’d say was one of the key things. But that story I always thought was a funny one because it was like, you know, kid, do you believe your bullshit? And absolutely.

Ethan Peyton: Hell yeah, the internet is, it has turned out to be total bullshit, so. And a little bit of everything else too, but hey, I wanna go a little deeper into that believing in yourself. I know we talked a couple of days ago and I asked you what your superpower was and you said, you know, believing in yourself and the ability that you can do it and with that betting on yourself, where did you get this superpower?

Ken Gavranovic: Hahaha!

Ken Gavranovic: That’s fair. And I would say, I’d probably add one more thing to it. I say, I believe in myself, but I also believe in people. And it’s an amazing thing that you can do when you believe in yourself, but when you believe in what somebody else is capable. And when people work for me, I always say, I’m gonna push you to the edge of your comfort zone, not to get more out of you, but so that you can live to your full potential. So to answer your specific question, I grew up very poor.

And you know, for those of us that have grown up poor, you know, one of your goals in life is to not be poor. And so my goal was like, do that. But one of the things my mother always said, you can be anything you wanna be. So I had that, I never had a limiting belief. I always believed if I worked really hard and tried really hard, I can go anywhere. And I also believed that in everybody else. And so if I saw somebody that was smart, but maybe they didn’t have the biggest degree, but they had work ethic.

I would believe in them and give them an opportunity. And, you know, like when I was in Atlanta, I was actually the largest minority employer, not because I tried to be the largest minority employer, it’s just because I have people come in that I believed in. And many of them now work at Microsoft, you know, had a whole career at Microsoft, at Google, they’re engineers, you know, because this was again very early on. But it’s really that belief that, you know, we all have potential and all we have to do is go and the rest will take care of itself.

Ethan Peyton: So this may be a misguided question if you’ve kind of been instilled this virtue from a very young age, but I’m sure that you’ve seen lots of people in life that didn’t quite have that confidence, they did have a limiting belief. Have you experienced a person who had a limiting belief like that, that was able to work through it and kind of remove that limit from themself? And if you have, how do they do it?

Ken Gavranovic: Well, I’ll tell you this, I always like stories. I think stories are always fun. So I was working at a Google funded startup that raised  million at a $ billion valuation. So pretty exciting times. And the engineering team reported to me, and I always did skip level meetings. Where I meet with people that are one or two levels below my direct reports. And I ran into this really nice young lady as an engineer, software developer

Ethan Peyton: Yeah.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: pretty smart. And so I was kind of impressed. And I happened to be in this meeting where people were discussing a very hard technical problem. And in my one on one, my skip level, she had said, Hey, I really want to grow more. I feel like I’m too shy. Don’t say something. So in this meeting, nobody could figure out the way to solve it. Everybody was debating it. And she made a suggestion that I thought was very good. And she was kind of talked down and she backed off. And so I slacked her. I said, speak up.

And I said to her, I said, I think, and I won’t mention her name so I don’t embarrass her, but I’ll say, I think, I’ll call it Sally. I think Sally has a great idea. Why don’t we listen to Sally’s idea? And so she spoke up and it was a great idea and it solved that problem. And later I said, okay, well, you wanna, what do you wanna do? She goes, I wanna feel even more comfortable. And so I said, great, I’m gonna have you lead the engineering meeting. What do you mean? You could host it, the all hands engineering meeting.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: I don’t know if I can do that. You can do it. I believe in you. And so she did it, and she did better and better and better. And she’s still at that company. I’m not at that company. And she is the head of engineering now. And that’s like a great example, because I’m a big believer also in a leadership, and we have this in the book, is really investing in your people, being authentic and helping them maximize their potential. Because we all have different levels of potential. I couldn’t be a basketball player even if I wanted to be.

Ethan Peyton: Nice.

Ken Gavranovic: You know, that’s, I don’t think that’s my potential, but there is a potential that I have and everybody has a different potential.

Ethan Peyton: All right, so Interlend was this company, you started it. You went from zero to  million in a very short amount of time. You went public with it. It’s obviously a big deal, and I think anybody with eyes can see that it’s a big deal. And you were young when you did it. So this was probably a very like, cut your teeth scenario with almost everything about running a business. What was the most…

valuable lesson that you got from your experience at Interlund.

Ken Gavranovic: Well, I would say one of the things that I learned is there were certain people that I think I started the business with, and as we grew in scale, I got a lot of feedback, oh, that person can’t scale, and so we need to get somebody more senior. And in some cases, I made that move. When I go back and think about it, is I probably would have let that person try more just to help them grow. Because some of those…

What I’ve learned in time, having actually done transformation, there’s a lot of senior executives that know how to run a business at scale. But there’s not as many people who know how to build a business up to scale. And it’s a different skill set. And so I would probably say is, you know, look at your team, really evaluate it, and make sure that you keep the right people in the right position. And then the other part, and this is, there’s a couple of things going back to the book.

You know, one of the things I say is measure and use data correctly. Is make sure you make data driven decisions because sometimes you might really like somebody or you really like an idea or you think you should market in this way or these different things. But if you really have a data driven approach where, you know, let’s say you have your sales manager. At the end of the day, the sales manager has a quota and they need to deliver on that quota.

and they could talk about a million different reasons, but if you have them just talk about the data of how they’re doing on their sales quota, same thing with your marketing person or your customer success person, they’re driving retention, data doesn’t lie and make your decisions as a leader on data. That would be the other part that I would say, is in the book and something I’d coach everybody at all levels to do, make data-driven decisions.

Ethan Peyton: Do you recommend that folks create for each position that they’re going to install in their company or that they’re going to hire for, creating some sort of like scorecard or something for that position so that they have data that they are kind of tracking towards? Because I think there’s a lot of companies out there and a lot of positions where it’s like, well, I’m not % for sure how to measure my quote unquote success at this position. But I think that if…

if the thought is put into it before the position even exists, then in creating, like I said, either a scorecard or whatever, whatever format you want to put that in, to ensure that you know how to measure that job. I guess let me turn that into a question. How do you ensure that all positions have data backing? Or goals that they can work towards?

Ken Gavranovic: Great, great, great questions. And I’ll say there’s two parts to that. Is one, you wanna use a framework that makes sense for you. They’re called critical thinking frameworks. I like objective key results. And we’ve got some things in the book because you can do these critical thinking frameworks right or you can do them wrong and you’ll get totally different results. If you do it right, what it really helps you and your leadership team or whoever’s working with you starting this business is what are the objectives that we’re trying to do?

Ethan Peyton: Mm-hmm.

Ken Gavranovic: And that’s usually people are pretty clear. And then the key results, so think about OK, our objective key result. How will we know that we’re there? How do we know that we accomplish that objective? And usually that’s a lot easier than going back to the dashboard. So I always say, first put a critical thinking framework in there. What are the objectives that we’re trying to do with this company? We want to close  new accounts. We want to get top performer reward and Gartner.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: whatever it is, and how will we know we do that? So key result might be easy on the Gartner one, it’s Gartner wrote about us, key result might be revenue. Maybe it might be something different, but when you put that framework in, that really, first of all, keeps everybody aligned in all of these different groups in your organization. So we’re all driving to those objective and key results. And then your question about how do we go to the specific data, I often like to flip it around to the team member if you want, even start with, say we’re building it from scratch.

Ethan Peyton: Mm-hmm.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: and I hired you for marketing. I might give you all the answers, but what I often try to do as a leader is challenge people to come up with the own answers because then they’ll scale more. I might say, great, it’s a month from now, how will you know you’re successful?

Ethan Peyton: Mm-hmm.

Ken Gavranovic: And you just asking a question like that, how will you know you’re successful? And someone say, well, I created some leads at the sales team. Great, so how many leads did you create? Well, I created , I created , okay, great. And how will you know that  or  is enough? Well, because the sales team has a quota of , and they convert. And so now you’ll get to that dashboard. So that’s, you’ve got that. That’s how you get to that point. And then,

Ethan Peyton: Mm-hmm.

Ken Gavranovic: The part I would suggest at your leadership meeting is do a round robin or even your IUDs do this all hands. I have all of my leadership teams at all hands, go through their metrics and very transparently share here’s how they’re tracking to their goals. It’s a big important, once you build that dashboard, you know, I gave you the framework to get there, make sure that you talk about it on a regular basis because if it’s just hidden in some report that you get, it won’t be effective. Hopefully I answered your question, Ethan.

Ethan Peyton: Yeah, I believe you did. I really believe you did. And I know that this also kind of drives towards another point that I’ve heard you make in other podcasts of being results-oriented as opposed to task-oriented. And I think that that’s an incredibly important thing for a company to have in their kind of ether. Is there anything else you would say on objectives or results versus tasks?

Ken Gavranovic: Yes.

Ken Gavranovic: Yeah, well, and here’s what I would say. I call it outcomes over activities or activities over outcome. And there’s so many times, and really it’s real simple if you know what to do, and if you listen and someone checks off a bunch of tasks that they completed and says success, then you’re driving your company activities over outcomes. If you’re driving outcomes over activities,

Ethan Peyton: Mm-hmm. Yeah, yours is better than mine. Ha ha ha.

Ken Gavranovic: then it’s very clear that those particular things they’re talking about matters. And it’s funny when you see it like you’ve seen, let’s call it a project, somebody, we’re gonna go rebuild this part of our software. If the objective is we’re gonna go rebuild this piece of our software, that’s activity over outcome. If it’s we’re gonna refactor this piece of our software to make it easier for users to engage, and we know they’re gonna engage by these key results.

If that’s success, that’s outcomes over activities and you have a night and day difference in results.

Ethan Peyton: All right, thanks for putting that in there. I think that that’s a really important kind of mindset to bring to your business. So let’s talk a little bit about the book. The book is called Business Breakthrough . and there are several topics in the book and I’ll give them a quick list because we’re just gonna go deep on one of those. The topics are mission, vision, and values, critical thinking frameworks, which we already touched on a little bit.

Measure What Matters, again, we already touched on a little bit. Write Business Structure, Product-Led Growth Strategy. And that is the one that we’re gonna go deep on. But for anybody who wants kind of a full overview in podcast form of this book, there was a really great episode of Lee Atchison’s podcast, Modern Digital Business, where you and he went over the book. And he is your co-writer, correct?

Ken Gavranovic: That’s right.

Ethan Peyton: Awesome. It was a good episode. I recommend if folks are interested in the book, definitely go listen to that, but don’t stop listening to this before you do that. All right, so let’s jump deep into product-led growth strategy. Can you give us the , foot view on this concept and then we can dive in wherever you want?

Ken Gavranovic: Yeah, I will. And what I’ll just say, first of all, in the book is a lot of the things that we did, like mission vision value, like everybody knows you should have a mission vision value.

what we really try to do in every part of the book is say how to do it. Like there’s clear patterns that we see that make you a $ million business or make you a $ million business. So when you read through it, that’s really what the goal is, is just having been there. Like Lee who coauthored it, like worked at AWS and built Beanstalk the beginning of cloud. So everything in the book is really designed that you can kind of open it to how to with actionable stories. But to answer your specific question of marketing,

capital. The first thing is you’re gonna sell a product, who’s gonna buy it, and what’s the best way to sell it. I’m gonna talk about

software, for example, because usually a lot of entrepreneurs are focused on building software businesses because it has a high ROI, nice gross margins, etc. Is there’s a term called product-led growth, which the idea, and there’s plenty of things you could read about it, it’s in the book, but the idea is that we can explain on a website or in some sort of marketing material, the value, or maybe it’s even like a podcast, the value so apparent.

that someone just reads it and they engage. They buy, they listen, they do that. And then there’s other things where it’s a little bit more foreign. They actually have to learn.

Ken Gavranovic: a lot more and so you have to nurture them. You can’t just kind of give them the thing. They’re going to have to you have to give them a little bit and feed them slowly and get them to know that you’re reputable and get them to know that they have a business problem. Maybe a knowledge gap they need to learn. And so those are the two big differences. And a lot of times what I see people is they have a complicated product and they think they’re going to throw up a website and it’s going to just go amazing. And they put it up. And

Nobody comes, right? They just, they can’t sell it. They can’t get traction. They haven’t figured out what it is. And it’s oftentimes because that product might be one that needs more nurturing. Maybe people don’t understand they have a business problem. Or like I was thinking about like a business, your podcast, I love cause it’s about entrepreneurship. So everybody wants to run their own business, but some people might not understand something more complicated like, uh, you know, architecting for, you know, um,

High availability, you know, they might not know that they need to do that. So that’s really what we hit on that book is that difference between product led growth. And it really is that the value is apparent and you can basically just show to the customers. New Relic was a great example where we could literally just say, here’s the product, it’s free, try it, you’ll like it, and you would buy it. And then you would naturally expand. They call the, the marketing term would be land and expand so that you would

you would get that free version or that low cost version, you would naturally just use more. There’s other products that you have to spend a lot more time educating customers that they actually have a problem, that you’re the right solution to that problem, that you’re reputable, that you have high integrity. There’s a lot of things in nurturing and knowing when you have to take which of those approaches are really, really key to your success.

Ethan Peyton: So I think you just brought up the question that I was going to ask is knowing which one of those products or situations that you, as your business, are in. How do you work to understand which type of go-to-market strategy you can use for your specific product?

Ken Gavranovic: Great. Well, great question. I always say test, but here’s what the questions you need to ask yourself. Is the problem apparent? And is your solution the apparent solution to that problem? If those are not true, then you’re going to have to have a more sophisticated nurturing program where you bring people through to understand those things. So it might be a sequence of emails and other webinars or other types of things that really get them to understand that.

And if you don’t know that just naturally, you can simply test it by putting an ad, good news, you can put an ad on the internet tomorrow, and you’ll see if people click, and then they’ll see, if they don’t click, then they don’t understand they have a problem that you’re identifying. If they do click and they come to your website, but they don’t convert into a free customer or paying customer, then they don’t understand that your solution is the solution to the problem.

that they identified with. And I think it’s just as simple as that. Now, if that turns out to be the case, then you have to be a little bit smarter in how you nurture a customer. Because what I often see, I do a lot of times even consulting with businesses, is that people think that they have an apparent problem, because it’s apparent to them, and they think that their solution is the apparent. It’s just clearly the data shows that’s not the case to any of their prospects.

Ethan Peyton: Mm-hmm.

Ethan Peyton: So one of the things that I have, I had known about product-led growth, but I figured that I would do some deeper research for this conversation so that I could actually sound smart for once. And what I read was that it kind of, in the earlier days of selling, especially BB software, it was like, you had, you know, big…

Wow, I’m gonna chew on this for just a second. Whoa. I’m gonna go back there. It seems like the kind of main difference of products that can be marketed as product-led versus that have to be kind of sales-led or sales team-led, something like that, is the automation of the sales process and the ability to

put the user in the driver’s seat without needing either a demo by your sales team or your marketing team or, yeah, I would have really thought that I would have had something here. Save me, Ken, save me.

Ken Gavranovic: No, I think you got it. Why don’t you say like, if you want to update, the question is like, so with product-led growth, it really is need less demos, you know, what are the different sales models like are so and I can get that. Yeah.

Ethan Peyton: OK, yeah, thank you. Thanks for saving me. All right, so we’re looking at product-led growth. What are the other kind of sales options that are on the table? Yes.

Ken Gavranovic: Yeah, sales and marketing models. What I would say, I think there’s really three core things. So one, there’s core product-led growth. And that’s really, you think about you have a website, someone’s gonna start using your software, they get the value, they love it, they’re gonna buy more of it. You might see companies like Zapier or Calendly, and usually,

Ethan Peyton: Mm-hmm.

Ken Gavranovic: That’s great for a period of time. You might get so big that you start to have, you know, some level of enterprise where they might, you might have to do a little bit more handholding. Then there’s what I call sales assist, which is be more like the calendar, like I think like a calendly model, which is you have a certain set of customers that need a little bit more help. You know, now maybe they’re spending a million dollars with you. So there’s, there’s security audits. There’s more things that the customer needs assistance in buying that product.

Ethan Peyton: Mm-hmm.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: from you. So that’s really, I call it the sales assist model. So it’s a product led growth, but for certain sets of customers, you have sales assist that help them do those couple of things that you need to do. And then there’s sales led and that’s traditionally, you know, you know, and I, by the way, I love sales teams, but that’s really relationship based where they build the deep understanding of the customer’s problem. You’re probably doing demos. You’re probably digging a lot more into that.

you know, you might have that typically, typically that’s more, you can’t afford it, that’s usually medium or enterprise sales. And that’s really that sales led growth where you’re probably taking customers out to dinner and so forth, because you’ve got to have a deep understanding of who the players are out there, who’s the advocate, who has the budget, who’s going to be your champion, those type of things. So those are, I’d say the three primary models. And then you have to have a marketing,

Ethan Peyton: Right.

Ken Gavranovic: you know, structure that matches that. And we hit in this book, we talked about it earlier, optimize your organizational structure. It’s also really important to optimize the rest of your company for that sales structure. So for example, if you have an enterprise sales motion, if you’re not careful, you’re dealing with enterprises, so they always want a new feature. And so if that comes in, you might actually slow down your innovation machine if you don’t have something to moderate those.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: one-off request to make sure you’re building the right product for everyone, not one company.

Ethan Peyton: right.

Ethan Peyton: not just one company, right. Yeah, that makes sense. It feels like the kind of sales led is for the big software that the gigantic company is going to use for all of their people. And it might even be more of like a semi-custom option, like a Salesforce where, you know, it’s a framework, but you’ve got to build everything kind of on top of it for the specific business that it’s working for. And in that middle ground,

Let me make sure that I have a full understanding. There are lots of software companies out there where you can go to their quote unquote pricing page or whatever and you can see like I can get the single person for X dollars a month or the team of however many for, you know,  times that or the enterprise and it’s like call for, you know, call for price or whatever. Is that kind of the middle ground there?

Ken Gavranovic: Well, kind of, let me give you a great example of a company that I think does a great job with Sales Assist, that middle of, or there’s Datadog. Think they have a, I don’t know, ,  billion dollar market cap at this point. But you can see the value, you can download it, it’s very easy to use so that it’s designed that, by Atlassian does a great job with this too. So you think about, they sell to enterprise, like everybody uses their product, but they’ve designed it where the A,

Ethan Peyton: Mm-hmm.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: People understand with the value that they’re getting out of the Atlassian product or the data, so it’s easy. It’s designed to easily start using. I don’t need to be trained or anything like that. And when I get over a certain level of spend, you wouldn’t know what that spend is, but they’ve got a business model. Well, behind the scenes, there’s somebody that’s effectively in a sales assist model that starts paying attention to you. So for example, having been, you know…

Ethan Peyton: Mm-hmm.

Ken Gavranovic: had huge budgets in prior lives too. So I bought software and sold software. You know, DataDog does a great job as if I start having an overage, then someone manually, proactively, a person sends me a note and said, hey, I see that you’re spending a lot more on this. Is that what you meant to do? Right, so that they’re making sure that I don’t get frustrated because then you come to me with some bill that’s a big overage bill, which a lot of enterprise software companies take that approach, I’m not a big fan of.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: where you feel like you got surprised and you have to go find budget, if that makes sense. So that’s where I would say is it’s that person that’s behind there that’s really looking out for that client, but not day to day, taking them to lunch, understanding all the details of it, which we have in a traditional enterprise sales model or sales led model.

Ethan Peyton: All right, so let’s bring it back to actionable. Let’s say that I am a founder of a BB SaaS product, and we’re in the beginning phases where we haven’t truly built out a system of sales. The sales that we have been from my being the founder and I am kind of working as the salesperson, but I want to install a product-led growth plan, marketing sales, whatever.

What are the steps that I should take to begin to install that?

Ken Gavranovic: Yeah, so first of all, I think if you can do product led growth as an entrepreneur, that’s what you want to do. And the reason is real simple.

you don’t have to raise as much capital. You’re gonna own more of your business. And if you’re right on, and I know some people that have built billion dollar businesses that raised no capital, it could be really good on return. And of course it just feels great. To answer your specific question is, first you need to make sure again that the problem’s obvious. And how do you know that? What we talked about is that people go and they click and then they engage. So assuming they do that, you just need to continue to make sure to invest in the product

Ethan Peyton: Mm-hmm.

Ken Gavranovic: start to use it, they don’t have to be trained by somebody else on how to get the value. The value has to be apparent. It needs to be silly, simple from when they download it or they log in to get the value that they’re expecting from the problem they’re trying to solve. That’s the part you have to invest. And so that’s a lot in the UI design. That’s not in the workflow of how you build the product. If it’s super complicated and you have to explain to people, well here’s

Ethan Peyton: Mm-hmm.

Ken Gavranovic: navigate there and do this, that’s gonna make it really tough to have a product like grow. So really emphasis on that UI experience and bringing that customer from that first moment to that first moment of value very quickly.

Ethan Peyton: All right, and then a real, maybe simple question. Do you have an opinion on which one you like better versus a premium, or excuse me, a freemium model or a free trial model? Do you like one or the other better?

Ken Gavranovic: Well, what I would say is the I probably from a business model, I like free trial because then it’s not open forever. I’ve seen people that have freemium models and you have customers, some customers that are running commercial services on your freemium product and you’re paying money but getting nothing from that. So I think a free trial is a is a much

Ethan Peyton: Okay.

Ken Gavranovic: fairer, it’s a better business model for you as the entrepreneur for sure. But I also think it’s reasonable with your customer. You’re saying, hey, listen, I’m going to give you my software for , ,  days. And if you get value, I’d like you to pay for it. And if you don’t, then I don’t want you to pay anything versus freemium is like, use it forever. And then eventually I hope that you are willing to pay for it. So as an entrepreneur, I’m more of a fan of the free trial.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: As a consumer, believe me, I like a lot of those freemiums because sometimes, you know, I’ll be that person using it forever and not paying, but I don’t know if that’s a great business model sometimes.

Ethan Peyton: Yeah, I think I tend to agree with you. It seems like the freemium model, the folks that are using the free version are probably going to be the ones creating most of your support tickets anyway. So yeah, getting folks in there with some skin in the game and some buy-in seems like a good move. All right, let’s jump to the book again. Earlier I gave the five topics that the book covers, but if a founder asked you specifically, what am I going to learn?

from this book, how would you answer that?

Ken Gavranovic: I would say you would learn the framework and how to implement the framework to build a business that scales.

So all of the key components, because a lot of people think there’s a lot of things, and by the way, this applies to even if you’re having a restaurant business, if you, any business whatsoever, I think there’s really just those five things. One, mission, vision, value is are people aligned with what you’re trying to do? Because then they, it’s not a job, they’re excited about that mission. You think about like, you know, listening to Apple and they said, hey, we’re trying to be, you know, eco-friendly and build amazing products.

The people and the employees are excited about it more than the job. And so you have to live it. That’s super important. The framework, a lot of people haven’t even heard of critical thinking frameworks. And so it’s really important to understand what those are. So we go into that and then how to execute it. Because I’ve seen people do OKRs totally wrong. And it just causes a lot of friction. The measure and use data. How do you implement it? Because a lot of people will build a report that goes to the CEO.

Well, that’s useless. That’s not going to work. It’s not gonna drive any behavioral changes. We talk about how you not only measure the data, but how you implement it. And the last two things, again, organizational structure. You know, if you, I always say you get what you organize for.

Ethan Peyton: Mm-hmm.

Ken Gavranovic: is if you have a lot of friction between your customer success and your sales team, it’s not because of the individuals, it’s because of the way you’ve organized your company. So we talk about those type of things and then finally it all has to be tied with your go-to-market. So we try to build the book having been entrepreneurs where it’s something that you could grab this and build a great business or even if you have a great business, scale that business to the next level.

Ethan Peyton: Let’s talk real quick about that, that I already have a business and I wanna scale it to the next level. What is, what’s the strategy for, I’m a leader, I’ve created this company, and whatever I have done in the past has not created the best ecosystem to work in? The folks, maybe they’re not % on board with the mission vision values. Maybe I haven’t.

completely been clear on what those are. How do I move from imperfect systems to better systems to proper systems without breaking everything along the way?

Ken Gavranovic: Well, I think it’s, as a leader, being first of all humble, like you’ve got great ideas.

But if you don’t put a structure and you don’t grow your people to make decisions, it’s going to scale as far as you can scale. And I’ll give you a real life example. Earlier in my career, when I, through just me having great ideas and pushing it, I scaled the business to zero to  people with some great people. But then I started slowing the business down because too many decisions were coming to me that really didn’t need to be made by me because I had built that.

Ethan Peyton: Right.

Ken Gavranovic: I hadn’t built the infrastructure, I hadn’t built the process. And that’s the big difference. If you go to VC land, there’s a magical thing from zero to five million. Once you’ve got to five million, you’ve got a business that people are interested in. Once you go over  million, that’s a whole nother measurement. And now the zero to five millions.

one level of difficulty, the hardest. Five to  million, a little bit more. Once you get past  million, now you’ve got a business that sales. So to answer your question a little bit more explicitly, is you really need to think about growing your people and having the structure so that your business runs without you having your fingers in every place. Otherwise, the business can scale only as far as your capabilities.

Ethan Peyton: Mm-hmm.

Ethan Peyton: I think that is probably the best answer that I’ve heard to a question like that. And it’s probably also easier said than done. So I’m gonna pick up that book and I’m gonna learn how to do it. Ha ha ha.

Ken Gavranovic: Yeah, great. And it’s we’ve got it on Amazon, Barnes and Noble, Amazon bestseller, which is exciting, Audible. So if you like walking, you can listen to it. We’re really excited about it. And it was really, you know, a work of love just to give back to fellow entrepreneurs, to people changing enterprises. We have a lot of people like trying to drive transformation at Fortune  company. So it really tried to apply to a lot of people that really want to grow, scale and transform their company. So it’s exciting times.

me on and to talk about it.

Ethan Peyton: Yeah, absolutely, we’re not quite to the finish point yet. I’m gonna get you there. Let me sneak a last question about the book in there and then I’m gonna ask a couple of wrap questions. You’re still good to go over three o’clock? Okay. Oh, no, you’re good, you’re good. No, yeah, we’ll make it work because I think it was all good. So let me sneak one last question about the book in here. There are thousands.

Ken Gavranovic: Oh, I’m fine on time. I thought I was trying to scope with that. So we’ll look, you can cut that out afterwards and put it later. Yeah.

Ethan Peyton: thousands of business books available. And lots of them are good, and some of them are truly not good. So why should people buy Business Breakthrough . instead of any of those other books out there?

Ken Gavranovic: Well, that’s a good question. I don’t know if I can say instead of, because if you can see, I have quite a few books behind me. I’m a big reader of books. And I’ve certainly been influenced by many of the books that I’ve read, as well as my experiences. So what I would say is what’s nice about this book is it’s practical, actionable, not theoretical ways that I know.

Ethan Peyton: Hahaha!

Ken Gavranovic: and I’ve seen will help you scale a business. And it’s written by somebody who was early on in Amazon and Hewlett-Packard, someone who’s scaled businesses from zero to  million, from  million to  million, who’s run $ billion systems and had quarter billion dollar budgets. And so I’m a big believer if experience speaks a lot. And so we’ve tried to put a lot of that experience in the book. I wouldn’t say I would buy this book over another book,

book for anybody that’s collecting, you will get some things that will be well worth the investment. I’ve got a lot of accolades. It’s fun when you get emails from somebody like, hey, I read that and that really helped me in the business. I think it’s really something that can move the difference. I think that’s probably why we got Amazon bestseller in the first couple of weeks in.

Ethan Peyton: Congratulations on that by the way, and Amazon should be, in fact it should be on my porch right now, so I think I’m gonna dive into this thing this weekend and see what I can take out of it. All right, let me jump to the question that I love to ask every person that we’ve got on this podcast, and that is, what is your number one piece of advice for early stage entrepreneurs?

Ken Gavranovic: Hmm. Can I do two? All right. So the first thing I would say is if you’re married, make sure that you and that significant other or girlfriend or boyfriend or whoever it is, they’re both in to take the risk because when you start your own business, it is risky.

Ethan Peyton: You can.

Ken Gavranovic: but it could be incredibly rewarding financially, emotionally, you’re not a cog in the wheel. So I’d say make sure you’re aligned because that’s one thing I’ve seen as a mistake is where one person’s not quite aligned to take that level of risk. So I think make sure you’re ready to both jump in full in. And then the next part is simply take action. You know, you’ve got the idea, go take action and just trust, I would say trust the universe.

The rest will happen, it’s out of your hands. All you can do is execute, and stay focused listening to what changes. So, I’ve pivoted, I’ve pivoted many times in entrepreneurship but I’ve got the North Star, you might pivot a little bit, listen, correct, but then just believe all you have to do is take action. Because when you get that big deal, you’re on top of the moon. When you lose that big deal, you’re like crushed. But either of those things don’t matter.

action and that’s what I always tell people like stay focused take action and the right thing will happen

Ethan Peyton: Well, I’m glad we let you go for both of them because they were both awesome. All right, where can people connect with you online and how can our listeners learn more about your work?

Ken Gavranovic: Great. So obviously.

day to day I’m blameless so if anybody needs incident management you can certainly go over there. I also am a big in just giving back so I have people that connect with me from all over the world you could do like a free zoom and I’m just glad to share some thoughts with you help you I have people do it I really love it you can go to K-E-N-G as in good I’m sure you could put that at the bottom too you can go right there you can get links to download the book and you can literally just click

Ethan Peyton: hehe

Ken Gavranovic: If I have some time available, put some time, I don’t charge anybody anything for it. I just like giving back and helping people succeed. So that’s the way you get in touch with me and I’ve got plenty of connections that can help you, whether it be VCs or other places. So look forward to hearing from you.

Ethan Peyton: Awesome. And don’t answer this question. All right, and then just let us know where we can get the book. And then we’re going to play that thing that you said earlier. I think that’ll be a good segue. Thank you for that. All right. Ken, this has been so much fun. Thank you so much for coming on to the show and hanging out with me and just giving us all this value. I want to give you the last word.

Ken Gavranovic: Well, Ethan, you know, I don’t know what got you started in this, but I just want to say thank you because I think entrepreneurship and having that dream to build something, you know, and again, I’ve worked at Fortune  companies and I’ve seen people sometimes that they have a job, but they lost their soul.

And being an entrepreneur allows you to care and get excited. And, you know, putting a podcast together, we bring people to give people ideas so that they can take action on their dreams. And I’ll just encourage this, everybody, you know, the risk reward gets a little bit different when you’ve got, you know, three kids and, you know, and you’ve got a mortgage. But, you know, if you’re in your s or s, take as much risk as possible.

So thanks for creating this. Thanks for having me. And I wish every, all of your listeners true and credible success.

Ethan Peyton: Awesome. Thanks, Ken. All right. Cool. And then we got that. Thank you. Thank you. Thank you for that.

Ken Gavranovic: Take care.

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