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💥 Ignite your company culture with the Build a Vibrant Culture podcast!
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[00:00:00] Announcer: This is the Build a Vibrant Culture podcast, your source for the strategies, systems, and insights you need to turn your dreams into your destiny. Every week we dive into dynamic conversations as our host, Nicole Greer, interviews leadership and business experts. They're here to shed light on practical solutions to the challenges of personal and professional development. Now here's your host, a professional speaker, coach, and consultant, Nicole Greer.
[00:00:29] Nicole: Welcome everybody to the Build a Vibrant Culture podcast. My name is Nicole Greer, and they call me the vibrant coach. And I'm here with yet again, another amazing guest and it is Heather Jerrehian, and I am so happy to have her. Let me tell you all about her. First of all, she is an entrepreneurial futurist. We should find out what that means! And an investor who has driven innovation and go-to market strategies for startups and fortune 500 companies for 25 years. But take a look at her. It's like it's been about five years. Her book, _Sail to Scale, Steer Your Startup Clear of Mistakes from Launch to Exit_. Look, she sent me one. It's here in my hot little hands. All right. And she co-authored this with a woman named Maria Fernandez and with Mona Sabet. Did I say Mona's name right?
[00:01:16] Heather Jerrehian: It's Sabay, but that's, you know...
[00:01:17] Nicole: Oh, it's French. All right. And she guides entrepreneurs and navigated the complexities of business scaling. Not only does she possess extraordinary ability to foresee market movements. Okay, so she's looking out, she's looking at the trend, she's figuring out what's going on. Heather has consistently led cutting edge enterprises towards significant success. As a serial entrepreneur and technology executive, Heather has built and scaled multi-million dollar ventures, leading turnarounds at unprecedented speed, achieving 10 times growth. Would you like 10 times growth? You better get a pen and paper! And engineering profitable exits, including the acquisition of Hitch by ServiceNow, which was on the New York stock exchange as N O W under her leadership as CEO. Welcome to the show, Heather. I'm so glad you're here.
[00:02:08] Heather Jerrehian: Oh, Nicole, thank you so much for having me. It's really great to be face to face today on Zoom and being able to have this conversation.
[00:02:15] Nicole: Oh, I'm excited because I think when I got this book, I started going through it. Y'all, in this book, that's how we talk in Concord, North Carolina. Y'all, hey y'all, um, _Sail to Scale._ This is the book that you need to help you avoid all the mistakes you could make. So I just want to say you need to go to the Amazon. And the link is right down below. All right, so first of all, Heather, who should read this book? Who should read this book?
[00:02:42] Heather Jerrehian: You know, so myself and my co-authors, we really wrote it for founders, entrepreneurs, intrapreneurs and even leaders who are really trying to navigate the four waves of startup growth, which is launch, pivot, scale and exit. And that startup could be a traditional startup, or it could be a new product launching in a large enterprise or a company even pivoting an existing business.
[00:03:06] So it's really for anyone who is curious about the mistakes that myself, my co-authors have seen over and over again, and really from three different viewpoints and perspectives, because I'm someone who sat in the CEO, COO, CFO seat, so go to market and business strategy. Maria is really a product expert, she's started her own company. She's been at large enterprises like Meta and Google; and Mona is this amazing corporate strategist and M&;A expert. So she has helped companies to be acquired and IPO. And so the three of us came together and we just honestly realized like, how is it that we've all seen these same mistakes? Why hasn't someone written a book to share this? And so before we knew it, we were on this journey.
[00:03:56] Nicole: Oh, that's so fantastic. Well, just out of curiosity, how did the three of you meet?
[00:04:00] Heather Jerrehian: That's actually a great question. So, I met Mona because she started this women's leadership organization called HiPower. And myself and Maria are both a part of HiPower and it was actually at our spring refresh which is where we all get together in the spring, whether it's virtual or in person. And I actually had mentioned to Mona, Hitch had been acquired by ServiceNow. And I said to her, you know, I think I may have a book in me.
[00:04:27] And just planting that seed, it's like, If you have one of those friends that's like really high execute, Mona is one of them. I planted that seed and before I knew it, we were off and running and writing this book. She got Maria on board and the three of us were starting to meet and writing a book. And you know what? I have to tell you the truth.
[00:04:45] Nicole: Yeah.
[00:04:46] Heather Jerrehian: For me, writing a book was more difficult than even starting a company. And that sounds crazy. If I had known how difficult this was going to be, it's like many things I jump into in my life. If you know how difficult they're going to be, you avoid them, but sometimes that ignorance is bliss. So we jumped in, both feet forward. It took us 18 months, and we still love each other even after this whole experience together. It was quite a journey and really a lot of fun and actually a lot of self awareness came out of it. I didn't realize how hard it is to explain to people, like, how do you do something and really be able to explain it so that someone else can learn, how do I do what you did?
[00:05:25] Nicole: Yeah. Because your book, it has a lot of technical pieces of advice and charts and diagrams and things like that. And if you love business and love strategy, you will nerd out on this book, because it is just chock full of stuff. And some of the things it's like, I know about a SWOT analysis, you know, the strengths, weaknesses, opportunities &; threats, but that's an oldie, but a goodie, pull that thing back out and let's use it again, right?
[00:05:49] Heather Jerrehian: That's right. That's right. Yeah. We tried to think of what are all those tools that we've used, old or new, and compiled them all together to kind of create this guidebook for people where you don't have to read it necessarily end to end. We put it into four different sections, like I said, launch, pivot, scale and exit. And what were the common mistakes in each of those different waves? And how could we talk about it, how could we show it through visual examples and through actual founder stories and people who actually live through them? And what did they do to successfully navigate it? There are some stories, ones where people weren't so successful and those we make anonymous because not everyone's prepared to tell their failure stories, but we wanted to be inclusive of sharing the good, the bad and all everything in between.
[00:06:39] Nicole: Yeah, that's so fantastic. Don't miss that, everybody who's listening. This book has like little case studies. So, you're sitting around the conference room table, you're part of something going on in the organization. And you're like, I read about that in Heather's book. And there's a little mini case study! You can get the book, photocopy and bring it to the meeting to share with everybody. "This could be a mistake we're making." And I love what you said. It says in the book, it says in the first, I always read the introduction. Not everybody reads the introduction, but I do. I love the introductions to books. Okay. So it says this book is an entrepreneurs and you said the word intrapreneur. Did you?
[00:07:15] Heather Jerrehian: Yes.
[00:07:16] Nicole: Wait, tell everybody what that is real quick.
[00:07:18] Heather Jerrehian: An intrapreneur is somebody who is maybe creating something, a new idea, a new product, launching something within a larger enterprise. So you're like an entrepreneur within an enterprise and actually the experience you go through and I'm living it right now at ServiceNow, we are launching a new product. What I'm going through is not much different than when you're a standalone company. The difference is, I do have a very large organization around me with a lot of people and infrastructure that startups don't always have, but some of the problems and challenges you face are very similar. And so, that's what we mean by an intrapreneur.
[00:07:55] Nicole: Yeah, because sometimes people hear the word entrepreneur and they want to tune out.
[00:07:59] Heather Jerrehian: Yes.
[00:07:59] Nicole: Wait, no, if you're one of these people that is responsible for growing the company, scaling the company, _Sail to Scale_, that's the name of the book. You need to be listening right now. So, here's my first big question for you. What inspired you to sit in the seat of actually writing the book? I heard you say with your friend that Maria was like, was going to get you to execute, but I think a lot of people that listen to this podcast think they have a book in them too. So what do you mean by, I had a book in me? Will you kind of just share your little author journey real quick and then we'll dive into the book.
[00:08:33] Heather Jerrehian: Yeah. Well, you know, it was one of those things where, I think you get mature in your career and you're like, wow, I have seen a lot just in my career and there's a lot of patterns, and if I could just give someone else the cliff notes and spare them from the mistakes I've seen. Now, I do know the human dynamic is, is that some people you can share these things with and they want to go and experience it on their own. The point was that like, there was this synergy and talking with Mona and Maria, where we were like, yes, I had that same thing. Maybe not the exact, but there was sort of a genre of what we were talking about of a mistake that was like, Oh my gosh, if we could spare someone, especially in that launch phase, when it's so important that you move through some of these mistakes. 'Cause all the best is yet to come, but don't run out of cash. There's a lot of things like make sure that you're bringing the people with the right DNA to succeed in the chaos of starting a company, like all these really important things that each of these really different inflection points of a company.
[00:09:35] So that's really what it was. Like, I think I have a story to tell. I've really seen a lot. And if I can spare someone else, that would bring me so much joy. And so that's really what was the inspiration when I said, I think I have a book in me. It was like, I'm ready to share a lot of knowledge I have.
[00:09:52] Nicole: Yeah. And I love what you said about, some people want to just go ahead and do it. That's what we call a lack of listening and discernment. We have to be good listeners and good discerners, everybody. Stop, take a minute. And for all the leaders that are listening, oftentimes, I don't know, Heather, I work with leaders, and they don't think that the people want to hear from them. Like "I've got good people, they're doing great." I'm like no, no. They want to hear how you got where you are, they want to hear the mistakes you made. They want to hear how you figured out how to get around the obstacles. So we're just really grateful, Heather, that you wrote this amazing book _Sail to Scale_ with your two girlfriends. Three peas in a pod. All right. So there's 18 mistakes in the book that you can avoid. Don't miss that, everybody, 18. All right. So will you please share your experience as a CEO of Hitch? Tell us what Hitch did/does and leading that company through a major pivot and then a successful exit.
[00:10:46] Heather Jerrehian: Yeah. Yeah. That was a really thrilling ride. So when I took on the role of CEO at Hitch, I was met with this challenge that we have limited market traction for our talent mobility solution. And what that is, is it's software that helps fill roles or staff projects and gigs internally, instead of people going to the outside world to hire. And it's really so that companies can more cost effectively retain and grow their talent. And so even though we had existing enterprise clients that said they really loved our product, we just weren't getting that traction we needed to really start growing.
[00:11:23] And so, I realized there was sort of this misalignment of what the market needed. So, I do what I usually do, which is, I embarked on this multi-month learning tour with my team and really hearing from that end user. What were their pain points? What were the challenges they were facing? ,And, really started asking some questions as it was related to talent mobility and wanting to know how were they planning to upskill, reskill, or redeploy their talent? Where were they as an organization on the skills maturity curve? Were they planning to move to a skills based talent model? How are they assessing the skills of their workforce and, looking at skills gaps. And what was interesting is, I mean, these very talented leaders would almost collapse in their seat, asking those questions and put their hands in their head and just were like, they were saying how frustrated they were with their existing solutions and managing all these disparate skill silos they had across multiple systems, spreadsheets, and in some cases, in people's heads.
[00:12:27] And so, that just really struck me. These really experienced leaders who just, were in this... It was a massive pain point, and I kept hearing it over and over. And so at that time, I really started looking at our team and realized, we had this really strong data science team. They were small but mighty, and we were building these proprietary algorithms using dynamic data sets of billions of global data points and connecting skills and roles and people. And I realized that our algorithms could really take all this disparate skills data across multiple systems and companies, and we could clean, normalize and deduplicate into one unified skills ontology, which is really like this skills language and use it across all the intelligence across an entire population to match people to career paths, learning courses, mentors, projects, and more.
[00:13:25] Really what I realized was our functionality was far more advanced than what we were saying we were as a talent mobility solution. And really what I connected was is that we were this like open dynamic AI driven skills intelligence engine that could power a broad range of solutions like talent mobility or skills based learning, coaching, mentoring, career pathing. So when I realized that, I was like, wow, okay, we need to recalibrate our strategy and repackage our product and reposition it. And what I realized is we had been talking to a lot of these very large enterprises that weren't as agile and able to move as quickly. So it was even looking at what industries -and so I looked at high growth tech- who were more willing to adopt new technology and were more agile, in being able to adopt something like this. And we tested like anything you do, with a startup company, we started, we pivoted our message, we shifted looking at, again, smaller enterprises and, really started sharing that message out with industry leaders and analysts, and we started getting some traction and we started closing customers more.
[00:14:43] And based on this sort of newfound interest as being a skills intelligence platform, I started raising a new round of funding. And so, in 2022, we started raising this new round of funding and based on all this excitement and long story short, ServiceNow actually approached us in this process and knocked on our door, very interested in speaking with us. And I thought they were interested in investing in our company. And as it turns out they had a very specific need for a new product that they were building that needed skills intelligence. So, they actually said they wanted to acquire us. And I have to tell you as a CEO of a company, I wasn't prepared for that because I had this big vision of, Hey, we're growing. Yeah, like we're going to grow this company. But what it turned out was when we met with them, the way they viewed the market, the way they looked at employees, managers, leaders, and the importance of skills, and how they were going to use it in this new product they were building. It was like a Goldilocks moment, as Amanda, who leads corporate strategy at ServiceNow, said, this is exactly, you're exactly the right size company with the right technology, with the right level of maturity that we need. And there was a culture and value match. And so we actually ended up... I said, "If you can move quickly, I'm willing to entertain the conversation." So I finished due diligence with the funding round on a Friday and started with ServiceNow on a Saturday and kept those investors warm while we explored this acquisition and ended up going that route of being acquired by ServiceNow because we realized, wow, this actually takes us from a smaller organization to being a part of this really amazing ServiceNow platform and really being able to help organizations at a much larger scale.
[00:16:35] So that was a very hair raising experience to go through of juggling all these different things. But we really landed in an amazing place.
[00:16:44] Nicole: Mm. That's fantastic. And the thing that she just slipped in there that I don't want y'all to miss is she said it was a culture and values match, did I get that right?
[00:16:51] Heather Jerrehian: Yes, absolutely.
[00:16:53] Nicole: Yeah. So just because we're on the Build a Vibrant Culture podcast, will you talk about a culture match and a values match and why that's so important?
[00:17:01] Heather Jerrehian: Yeah. What was so interesting is -and this is also a funny thing to mention- is in the book we talk about that we happen to be three women authors, but that is not the purpose of the book. Even though we met through a women's leadership organization, it's really about what have we learned as entrepreneurs and building businesses. But the only reason I mention that is a major irony. ServiceNow's corporate head of strategy was a woman, the people in the organization leading the business unit, which we became a part of, were women. And it just was an interesting thing. But when I talk about a culture and value match, ServiceNow is just really amazing. We are all about employee experience. We've created a product that has one place that employees can go to get all of their work done. Despite having hundreds of systems behind the scenes, an employee knows where to go to put in a service request, to plan travel, to do all kinds of things. And the core of what we cared about at Hitch was all about skills and matching people to the right work at the right time and giving them opportunities for understanding what are career paths they could take. How can they learn and grow? So there was this real synergy between the way ServiceNow was looking at the market and this new talent development product that they wanted to build and how they could help very large organizations, like I said, grow and develop their talent. But they did it starting from this employee perspective. And similar, right, we know that employees want to be seen, valued, and heard. But managers are also employees and we cared about that manager persona because it's hard managing a large team of people and really understanding the nuance of all the differences that your employees have, and how do you engage them? How do you get them interested? You really need that technology to help assist a manager.
[00:18:54] And then also understanding that, leaders and being able to grow a really healthy organization, you need technology to help these leaders to really get that visibility of the talent that they have in their organization. And how do you grow and develop it from a larger corporate strategy? And so, it was like a mirror talking to each other. And even when I ended up joining the company and our team did, if you looked at our deck, as Hitch's deck of what we were presenting to them, and then came into ServiceNow and we saw the deck of how they were talking about the industry. Literally, you would almost think they were the same company. So that's what I mean by a culture and value fit because this really wasn't necessarily, this wasn't the path we were planning to go, but it was so strong. That really matters. And I have to say, we have landed in this amazing organization called ServiceNow, who really is people first, we have a people pact. Everyone from our CEO to our chief people officer really lives and breathes, they walk the talk. We got very, very lucky but we were intentional and so were they in terms of who they were looking for.
[00:20:01] Nicole: Mm, that's fantastic. All right. And so don't miss, you put a little thing in there: "employees want to be seen valued and heard." That's a big part of what makes something vibrant is the employees are seen, valued and heard. They light up when you pay attention to them. That's what it means to be vibrant. Okay. All right. So we've got these four different waves.
[00:20:20] Heather Jerrehian: Yes.
[00:20:21] Nicole: So let's talk about the first wave, and you share in the book about how people make mistakes. Now, the first four mistakes are: the first one is being too focused on the short term; building the wrong minimum value team; number three, being in love with your solution, your product, your service; building the wrong minimum viable product. But the one that -we can't do all 18 y'all- but what we can do is we can talk about number one because it's really about vision, I think, right? Being too focused on the short term. Let's go deeper there, and then tell us about that.
[00:20:57] Heather Jerrehian: Yeah, so mistake one of being too focused on the short term, I would say that one of the biggest mistakes I see leaders make is, again, focusing too much on the short term. It's like in that rush to get the product off the ground, or you're so focused on solving immediate problems, it's easy to neglect that long term vision. Many leaders think that they've set a long term strategy when they've really only articulated a high level vision or some catchy message. So without a strategic roadmap guiding big decisions, leaders can find themselves sort of boxed in, facing challenges that could have been avoided, like running out of cash, struggling to secure funding, or lagging behind as a competitor is catching up, nipping at your heels. So, successful leaders really balance the urgent needs of today with a commitment to the future. This means adopting long term thinking, which, as we share in the book, is a skill that can be developed. By focusing on future trends, customer needs, changes in technologies, leaders can really position their companies to seize those emerging opportunities. They also need to think strategically, breaking down their goals into phases and iterating along the way so that they can adapt and learn more about the market.
[00:22:15] And I would also say that long term thinking isn't just about this lofty vision. It's about being, proactive and resilient, ready to make these bold, informed decisions that support growth over time. You know, it's about building a solid foundation that can weather the change, and anticipate challenges and, ultimately allow company to get to those next phases and scale and thrive.
[00:22:39] Nicole: That's fantastic. All right. I love that.
[00:22:40] Announcer: Are you ready to build your vibrant culture? Bring Nicole Greer to speak to your leadership team, conference, or organization to help them with their strategies, systems, and smarts to increase clarity, accountability, energy, and results. Your organization will get lit from within. Email her at Nicole at VibrantCulture. com And be sure to check out Nicole's TEDxTalk at VibrantCulture. com
[00:23:07] Nicole: All right, so the second wave in the book is navigating a pivot. And so I've got an idea of what a pivot is. I wrote this down when we first started talking. It's kind of like if I reposition, it's a pivot. If I switch my message up, it's a pivot. When I change my customer base, it's a pivot.
[00:23:23] Heather Jerrehian: Yes.
[00:23:23] Nicole: But can you define the pivot for us? So that's second phase everybody. Second wave, navigating a pivot. Tell us what it is, and we'll go from there.
[00:23:32] Heather Jerrehian: Yeah. So I shared a little bit about this when I shared the Hitch story in the pivot we went through, but it's all about changing direction when the path you're on isn't getting you where you need to go. So maybe you've launched a product, you've gained some customers and even brought in some revenue, but it feels like you're constantly pushing against the current. So instead of this steady growth, every step forward feels like this extraordinary effort. And then success always seems just out of reach.
[00:24:01] And so, what I think is important is the pivot doesn't always mean you need to change the product itself. It could mean shifting your focus to a new market, rethinking how you connect with customers, adjusting your service model, or even changing the way your business makes money. It's really what I like to call reevaluating your business market fit. Entrepreneurs talk a lot about product market fit. And as I just shared, it's not necessarily changing the product itself. It's looking at whether there's real demand for what you offer and if your approach and messaging is really hitting home with your audience. And to be honest, pivots are rarely straightforward. They certainly come with a lot of trial and error. Success really requires everyone on the team to get fully committed on the new direction. It's not about just a quick fix. It's like a shift in how the whole business operates. But when you do it right, it can really transform a business and, make it feel like you've got the wind at your back pushing you rather than fighting against it. That's, to me, a great definition of what a pivot is.
[00:25:05] Nicole: Mm. That's fantastic. And the thing about a pivot is going in a circle or a half a circle, you know, it's either 180 or 360... Right, it's a 90 degree. But if you notice you're just swirling around, that's a good sign that the wind is in your face, not at your back. Okay. I love that. All right. So in this section we have four mistakes and I'd love to talk about mistake number six in particular. So, we've got mistake number five, which is scaling too soon. Number six flailing in the water. What does that mean? And how can we avoid treading water? That's my favorite mistake in this.
[00:25:41] Heather Jerrehian: Yeah. So mistake six, flailing in the water, is kind of what you just said. It's this common reaction among leaders when a pivot is necessary but isn't fully understood. It's this feeling that they realize okay, their strategy isn't working as planned. Their instinct becomes to initiate numerous projects, like push the team in many different directions or add features in the hope that one's going to stick. This approach can feel like progress, right, because of a flurry of activity. But in fact, it's actually creating this confusion. It really dilutes focus and stalls real progress is what I would say. So instead of advancing, you and your team are really ending up treading water, putting in effort without making any meaningful headway. So, the concept of flailing also points to the risk of chasing what I like to call this mythical feature, which is if you add one more thing, it's going to be the magical thing that makes everything work, but what ends up happening, as I said, with this flurry of activity and trying all these different things, is that organizations end up trying to be all things to all people and it spreads their resources too thin and it creates this complexity, which really ends up impacting product quality and the team morale.
[00:26:52] So, to avoid this, leaders really need to recognize the value of narrowing focus rather than expanding it. A successful pivot isn't about multiple initiatives, but it's really about honing in on a clear direction. Sometimes creating a small pilot team that's testing a new approach quietly without disrupting the entire organization. It could be more about being data informed rather than data driven, right? Because, as a startup, right, you don't have all of the guidance that one would have a very mature business and it's more looking at what are the signals and insights you're getting from the market? So in this way, leaders can make decisions that are not only strategically sound, but are making sure that they're nimble enough to respond to what's happening in the market.
[00:27:35] Nicole: Yeah. Yeah. And I love what you said about doing a little pilot thing quietly without disrupting the whole team. And I got a little flashback to John Cotter's change model. Right? So just try the change right there. See if you're on the right track, you can always back up your train from there and pivot a different direction. Right?
[00:27:53] Heather Jerrehian: Yeah, exactly.
[00:27:54] Nicole: I love that. Okay. So let me tell you the rest of the mistakes in that section. Okay? So getting too attached to the pivot. I'm assuming that means if it's not working, pivot again. There might be six pivots!
[00:28:11] Heather Jerrehian: Sometimes you're too attached, but you can't see what you can't see. So you'll have to read and understand what that one means.
[00:28:17] Nicole: Right. Yeah, that's a good one. I think. All right. Number eight, ignoring false commitment. Are you curious? Number nine, going all in. And then we finally get to the third wave, which is scaling the rough seas. Okay. So, tell us a little bit about what this section is about. So we've gotten through two waves. We're in the third part and now we've got rough seas. Tell us what the CEO, the CFO, all the people need to be thinking about. What behaviors made you successful when you were going through this?
[00:28:46] Heather Jerrehian: Yeah. I think what's interesting about the scale wave is, the behaviors that made you really successful in that launch and pivot, that agility and "do whatever it takes" mentality, are invaluable during a launch and a pivot. But they actually can be a detriment when you get to that scaling phase. You know, as the organization scales, the same behaviors that you used in a launch and a pivot can actually lead to this fragmentation and chaos. When you're going to scale, you really need to create systems and process that can enable consistency and collaboration across teams, rather than relying on all these ad hoc solutions that you have the agility to do during the launch and the pivot.
[00:29:28] So it's really about the fact that this shift that you need to make when you get to scale, is that the very energy that propelled you to get there is actually the one that can create this internal friction and inefficiency. That's where we're really trying to help you understand, scaling is different, right? You're a more mature company and process becomes your friend, and collaboration and creating a more uniform way of operating becomes important.
[00:29:57] Nicole: Yeah. It's almost like you have to slow down now to go fast.
[00:30:01] Heather Jerrehian: Exactly. Exactly.
[00:30:03] Nicole: Yeah. And of course one of the greatest little coaching books I've ever read. I wonder if you've been exposed to Marshall Goldsmith? But he -yeah, she's shaking her head yes.
[00:30:12] Heather Jerrehian: I've heard him speak in person. So I, and he's fabulous.
[00:30:16] Nicole: Oh, he's so entertaining. After you listen to this, zip over to the YouTube and listen to just any video by Marshall Goldsmith. And if you go to his website, he gives tons of stuff away for free, all these tools. Just fantastic. But he wrote a book that was called _What Got You Here Won't Get You There_. That's what this mistake is all about. Am I dialed in correctly, Heather?
[00:30:37] Heather Jerrehian: Yes, absolutely. A hundred percent. That's such a good correlation. I love it.
[00:30:41] Nicole: Yeah. And it's almost like, you need to stop being visionary and be the person that creates the stability so that we build on top of a solid foundation.
[00:30:49] All right. Fantastic. So then we get to the next part, right? So this section, there are five mistakes. Staying in a constant state of firefighting. Right? Does that sound familiar? Managing like a startup founder instead of somebody who's trying to scale or build on a solid foundation. Staying with the four walls of your product. You treat your customers as nothing more than customers. That one caught my heart. That's the one we're going to talk about. And then partnering as a side hustle. Okay. So I want to know about all of them, but again, we can't do all 18, but mistake number 13 has my heart. 'Cause I've just been a customer service gal for so long. What do you mean by treat your customers as nothing more than customers?
[00:31:31] Heather Jerrehian: Yeah, so when we say treating your customers as nothing more than customers, we're pointing to this common misstep in scaling organizations where you're really just seeing your customers purely as a transactional relationship rather than as potential advocates. Scaling isn't just about acquiring new customers; it's about building that community of engaged, loyal users that will actively advocate for your brand. When you invest in creating real human connections with your customers, you move beyond that one way relationship. So by listening to their needs, empowering them to connect with one another, fostering this environment where they feel valued, you can start to transform them from mere customers and users to these passionate fans who help drive your growth. This shift is really critical to achieving sustainable scale. And as your community of advocates become more of this organic extension of your marketing and support efforts, right, it becomes a real superpower.
[00:32:31] Nicole: Yeah. Absolutely. And here's the thing. Heather, I bet you've been in the same seminars as me all these years. One of the things that they always say in the customer service seminar is the acquisition cost of a new customer versus keeping the ones you have happy, it's like radically different. We've got to keep the ones we have happy. So there's just that little reminder about customer service.
[00:32:51] Heather Jerrehian: Absolutely.
[00:32:52] Nicole: All right, so let's see, we have gotten through the third wave and now we're to the fourth wave and y'all are like, no, wait, we want to know about all the mistakes. You got to get the book. We're talking about the book, _Sail to Scale_. It's by Mona, Heather and Maria. It's right here, everybody. We'll put it in the show notes, go buy it immediately. All right. So I want to hear about the fourth wave, which is the rogue wave. This is getting very Johnny Depp exciting, okay. And we all love some Johnny Depp, don't we? Okay. All right. So will you explain about exiting? The book says, getting a public offering or acquisition, only 3% -I thought this statistic was really interesting in the book- only 3 percent of people who are building a company ever get a public offering. So tell us about this phase in general at first.
[00:33:39] Heather Jerrehian: Yeah. So, when we talk about exiting a business, we're really talking about how founders, investors, and other stakeholders can cash in on all the hard work that they've put into building the company. There's really two main paths, as you mentioned, it's like taking a company public through an IPO or getting acquired. For most companies, preparing for an exit means thinking about acquisitions as a real option, not just aiming for the rare IPO. In Silicon Valley, there's this belief that every founder should try to build a huge standalone company, when that's not great if it doesn't work out, right? It's not always practical. It's a bit like the field of dreams. If you build it, they will come. But in reality, exits don't really happen magically. You have to plan for them. So if you're open to the idea of acquisition from the start, you can actually build a company that attracts potential buyers, increasing your chances of a successful exit. And the way more startups can avoid private purgatory and actually deliver value, not just to founders and investors but to employees and the market as well. So, this final exit wave, though it's isn't easy to navigate - a rogue wave is, I would say, unpredictable, intense, tough to handle- founders often make a mistake waiting too long to pursue an exit, or sometimes they turn down a good acquisition offer because they're holding on for something bigger. But it's actually about knowing when the timing is right and not missing the signs when you're ready to exit.
[00:35:08] It's kind of like Hitch, we weren't planning for an exit, but this amazing opportunity came forward. And I have to tell you, in retrospect, it was an amazing decision because I had signed the letter of intent, which, you've already negotiated sort of the terms of the deal, signed the letter of intent, and then war broke out in the Ukraine, financial markets collapsed, and even ServiceNow had lost 30 billion in market cap from when we signed that to when we closed. But because we were so strategic to what they needed for this specific product, like I said, it was that goldilocks moment, we weathered through that whole due diligence process to actually closing. And I was so worried that it wasn't going to close because those are the kinds of market conditions that would have a deal fall apart. But again, because we were so strategic, I was very lucky and I was able to keep this funding round warm while going through this process, because I was like, I need a backup if this thing doesn't go through, but fortunately it did go through. But had I said no to ServiceNow, I would have been pretty sad to have been a standalone company trying to weather the financial downturn and all the challenges that I've seen with smaller companies over the last few years. And instead I got to be a part of a larger organization, building and replatforming our product and going to market in a much bigger scalable way that I don't think we would have been able to do.
[00:36:38] That's what we're talking about. Missing these opportunities. Sometimes people wait for something bigger and better, and we really try and guide people, you gotta know when the timing is right.
[00:36:49] Nicole: Yeah, I love that. And again, I think this all goes back to being good at discernment, right? And I think one of the things maybe back in the second section- is thinking, "I'll figure this out. If I go over there, I'll lose control." All your ego stuff could bubble up, right?
[00:37:04] Heather Jerrehian: Talk about the ego. The ego is very helpful in the beginning when you've got to sell a big idea and you've got to get people behind you. When you get to scale, this is where you need to set your ego aside and really listen, and be very strategic and not let your own ego and self interest get in the way of what's the best interest for the company, for your stakeholders, right? You have a fiduciary duty to your investors and board members. And so, I think that is an important thing that you just brought up.
[00:37:34] Nicole: Yeah, absolutely. Okay. So again, I want to know all the mistakes but we don't have time for that. But I want to read them off. We have mistake number 15, which is running out of runway; mistake 16, you're inside-out. And so that one, just my curiosity meter went to 10. Mistake 17 selling the future of your business instead of theirs. And number 18, rejecting the right acquisition offer. Okay. So, number 16, you're inside-out. What is that? And of course, I've read that, but will you share about your inside-out? We want to be outside-in. So I'd love for you to talk about the five common pain points inside.
[00:38:12] Heather Jerrehian: Okay. So yeah, you're inside-out. So this is really when companies focus so much on what they want to build or solve, that they really lose sight of what the market actually needs. So I like to use the analogy of imagine a chef who's so excited about a new dish that they've created, but they don't realize that their customers aren't actually interested in the ingredients they're using. You know, it's easy to get wrapped up in your own vision and miss what's truly relevant to others. So when companies fall into this inside-out mindset, they're building strategies and products in a vacuum. They're making it much harder to resonate with either customers or even potential acquirers.
[00:38:53] So when it comes to acquisitions, there are literally five big gaps that we see that they're trying to fill, which is a talent gap, a product gap, a revenue gap, or an opportunity gap or profitability gap. And so let me explain what each of those means.
[00:39:11] So a talent gap is where an acquiring company simply needs the expertise or specialized skills of another team. Think of it as bringing in top talent to fill skills gap that they can't address fast enough internally.
[00:39:25] A product gap is where the acquirer needs specific technology or a feature that will help them compete better or respond to their customer's demands. In the tech world, we like to call that a tech tuck-in, which is essentially the acquiring company getting a missing piece of the puzzle. So when we think about Hitch, right, we were a missing piece of the puzzle of what they were trying to build, which was that skills intelligence technology.
[00:39:51] A revenue gap, this is all about how an acquirer is looking to accelerate their growth. They may see an opportunity to increase their sales by adding a startup's product to their portfolio, which allows them to grow the revenue faster.
[00:40:05] If we think about an opportunity gap, it's where a company may see a new market opportunity, but doesn't have the resources to dive in. So in this case, they're looking to acquire a company that already has a foothold in that area and can help them expand really quickly and strategically.
[00:40:22] And then lastly if we look at a profitability gap, the goal is really to boost profitability and they'll look at integrating a company that maybe serves the same customer, but by combining forces, they can reduce costs and improve profit margins.
[00:40:37] So, these are the different pain points, often, that an acquirer is looking to solve. And when a startup can align itself to one or more of these pain points, they become more attractive to a potential acquirer. And that's really shifting to an outside-in mindset.
[00:40:54] So really understanding and responding, to what the other company needs. And that can help them really figure out what's that alignment and have a more disciplined approach, which creates more options and opportunities for this startup to grow and be acquired.
[00:41:11] Nicole: Yeah, that's fantastic. And the talent gap is real. I mean, it's still the work and talent out there trying to find the right people to do the right job where they're lit from within. They want to do it. They're vibrant. They're excited about the work they're doing. It's a big deal. And I know many of the folks that listen to the podcast are human resource professionals and they would like everybody to wake up and understand there's a big talent gap out there.
[00:41:35] Heather Jerrehian: Yes, absolutely. Yeah when we talk about the talent gap, this is where we're really talking about the primary asset is people, right? Specific skills, expertise, even the cultural mindset that the team brings to the table. This is often referred to as an "acqui-hire," where the acquisition is largely about bringing in skilled talent that the acquiring company either doesn't have in house or they can't develop quickly enough. So, for companies facing rapid innovation cycles, particularly as we're seeing now in tech and AI, talent gaps can become a serious constraint. For instance, imagine a large software company that's now venturing into AI, but they don't yet have the deep expertise in machine learning. So rather than taking years to build up that capability from scratch, they might look at acquiring a startup with a skilled team and proven track record in this field. This helps them integrate the knowledge and expertise that they need in months rather than years, which we don't have, right, at the pace of change.
[00:42:38] And the other way to look at this is, acquiring talent through an "acqui-hire" can also bring in a fresh perspective and bring a more agile entrepreneurial mindset into the acquiring company. Startups tend to operate differently than larger, more established companies, and so they bring that more adaptive, more risk-taking demeanor than typically a large organization might have. So, that's what a lot of larger organizations, it's kind of how I feel at ServiceNow is that myself and others who came from the acquisition are bringing a different mindset. We look at things differently, that sort of more agile way of operating, that collectively, help us move faster. So that's where, outside-in thinking can really matter in terms of not just to understand what is the talented team, but also why those team skills are important to solving a pain point within the acquiring company.
[00:43:36] Nicole: Hmm. That's fantastic. Oh my goodness, it has been an entire hour. We have hung out and learned so many good things and everybody, we've been talking about this book right here. There it is. _Sail to Scale_. Y'all got to go get it at the Amazon. And this has been Heather who has been hanging out with me and dropping all these nuggets. Don't miss that there are 18 mistakes in here that you can avoid. Let me repeat myself. There are 18 mistakes in this book that you can avoid. You don't have to go through the the learning curve like these three ladies did. This can help you no matter what point in the waves your company's at, you can sit down, you can use this as a resource guide. This is one of the books that you don't just read and you hand it off to the next guy. You're going to keep it on your shelf for a long, long time. All right. So everybody's like, no, no, don't let her leave one more nugget. So. What's one more nugget. It doesn't have to even be in the book. It could just be from your experience, your leadership, your heart. What would you share with the audience as they're trying to move along in their careers and be great leaders?
[00:44:38] Heather Jerrehian: Yeah. So I guess I would say the nugget would be that paving the road, rather than following the path can be scary because no one's done it before. But if you use good judgment, trust your instinct and dream big, anything is possible. That's my nugget.
[00:44:54] Nicole: That is X-able. Is that what we say these days? It's X-able?
[00:44:58] Heather Jerrehian: I love it.
[00:44:59] Nicole: So, so that is a great last nugget. All right. So Heather, everybody wants to know how do we get ahold of her? Can we follow her? Where can we find out about her? Give us all your contact information.
[00:45:08] Heather Jerrehian: Yeah. So I'm on LinkedIn, the normal LinkedIn URL, and then Heather Jerrehian. I'm on X, I'm @Jerrehian, although X sounds so funny. I'm on Twitter. Yeah, and I really do love to connect and meet others. And of course we have a website, sailtoscale.com, and you can also find the book on Amazon and other places that you buy books. So we're in all those places and just honored. Thank you, Nicole, so much for having me today and allowing me to share my experience and background and about _Sail to Scale_. Really appreciate the opportunity.
[00:45:43] Nicole: All right. Well, we're going to just sail on because you have this wonderful download. We're really grateful. So Heather, thank you so much for being on the Build a Vibrant Culture podcast. Maybe in the future we can have you back, maybe with one of your sidekicks here to talk a little more.
[00:45:58] Heather Jerrehian: That would be amazing.
[00:45:59] Nicole: Okay. All right. All us girlfriends will hang out. All right. Good to be with you.
[00:46:04] Heather Jerrehian: Okay. Thanks, Nicole. Bye bye.
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