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Exit-Ed: Stories from Grind to Sale
Join us on Exit-Ed, the podcast where successful founders share the untold stories behind building, scaling, and selling their companies. In each dynamic episode, we go beyond the headlines to explore the challenges, strategies, and pivotal moments that shaped the journeys of entrepreneurs from each corner of the globe.
From the long nights spent grinding to the high-stakes negotiations that led to rewarding exits, our guests provide practical insights, hard-won lessons, and inspiration for anyone on the path to success. Whether you're an entrepreneur preparing for a sale, an investor looking to understand founder dynamics, or a business leader seeking new growth strategies, this podcast is for you.
Learn from those who've been there. Get Exit-Ed.
Gabriella (00:02)
Welcome to Exit-Ed, stories from grind to sale. This is the podcast where we dive into the journeys of founders who have navigated the path from building their companies to successful exits. We interview entrepreneurs from around the US and around the globe, exploring their experiences, scaling processes, and the lessons they've learned. We'll talk about the good, the bad, and the ugly. We're excited to have you with us. Let's get started and let's get exit-ed.
Hey guys, good, day to everybody. I am here with Johanna. Joe is based in Florida, currently in North Carolina, heading for the winter. Joe.
Joseph (00:45)
That absolutely it's a kind of best time of the year to be up here fall before winter likely. But my birthday is coming up in two and a half weeks and we're going to be in the ⁓ mountains in Asheville enjoying some fall colors with my with my kids. So looking forward to
Gabriella (01:02)
Amazing.
Well, happy, happy birthday to you. Thank you. Amazing. So Joe, as I said, it's usually the case with people that we talk to here at Exeter. I know very little about you. So the purpose of these, these, obviously these podcasts is to highlight your career, but also learn and discover who you are, where you're from, what did you build? What did you sell? So, so Joe, let's go back to the beginning. Where are you from? Where, what's your background?
Joseph (01:32)
If we're to start back there, then we're going to need a lot more than an hour. I grew up in Alexandria, Egypt. So that's my heritage and had the good fortune of getting into software engineering and robotics and automatic control early in the early 90s. So was right around the time where the industry was forming in or norming.
say, not forming, it'd been forming for a while, but was the modern computer science industry was forming around that time. And I had the good fortune to work for Fortune 500 companies the first 10 years of my career. So I spent time with Oracle, with CSE, with ADS, all over the world, with the US mostly. And after that, I
I left and started working with private equity backed companies, much smaller companies, sub 50 million in revenue. I grew a couple of those, just did a couple of those as part of management teams. ⁓ Then did operating partner consulting type work for a few years, again, helping various companies with due diligence, fundraising, strategy, growth, expanding a new market, figuring out new products.
And then in the mid 2000s, I kind of took all of that. So that would have been, you know, almost 20 years of my career at that point. I took all of that and decided to, uh, to start from, from scratch. So built, uh, what became Engage, uh, was a beautiful ride. It was started in 2014. It was that company in 2019. And it was, um, the early innings of using AI predictive analytics, quote unquote AI, right?
with today. That's 10 years ago. We our own models back then, right? And we built predictive models specific to the HR tech and talent acquisition industry. So that was the area that we focused on. We raised funds on three different rounds. Again, it was fortunate enough that all of them were oversubscribed, got some institutional VC money from
Outside of the region, we were in the Southeast, got backed by great VCs, we raised 12 million dollar in all in all. And in 2019, we exited unexpectedly, but also three months before COVID hit to strategic acquisition that was managed by Carlisle. And since then, I got to work with some of those large VE firms as well as
Gabriella (04:10)
Yeah.
Joseph (04:22)
working on starting something else again. once you try it, it's very hard to quit.
Gabriella (04:29)
It's addictive, right? You want more more, more, more action and more action. Well, that's an amazing description of a fantastic career in a nutshell. How old were you when you came to the U S?
Joseph (04:43)
Full time I was 26. So Oracle had moved me. So that was in the mid 90s. And I'm not going to date you, but for those who've been around since then in the industry, that's where the time where there was a great influx of software engineers globally to the US because there wasn't talent here. And Oracle moved me from Europe at the time to the US to be part of that. that's when I came here.
Gabriella (05:10)
That's amazing. mean, Oracle is obviously one of those. There's a few of the big ones, highly respected and so amazing. I know a few people that have come from other countries with companies. They're renowned tech companies. So, wow, so many questions to ask you. I don't want to skip that amazing career, because it sounds like you had a corporate career.
before you started your own entrepreneurial life. Why? why? Because corporate is a completely different lifestyle than literally starting something from scratch. So why did you do it? Or was it life or was it, was it your, was your time and how, how, did that happen?
Joseph (06:02)
Yeah, it's a good question. coming out of college, one of the things that any aspiring software engineer at the time want to work with a big name, want to know, want to be closer to where the big technology is being built. So if you talk to any software engineer today, they would want to work close to people who creating the latest and greatest in AI. And at the time, there was more opportunities to work for, to do that with large corporations.
And I always use air quotes to say, learn how to do it the right way. ⁓
Gabriella (06:38)
Right.
We have the equivalent in the law. I started my career at a larger law firm, you know, before I started my own. And so you see, have that big vision of a big case or how to, you know, deal with a big clients or things like that. I totally get it. It's the same. Same for us.
Joseph (06:59)
But I would say that ⁓ in parallel to working with those Fortune 500 companies, ⁓ I always had ⁓ what we call today, side house at right, which is a lot more normal today than it used to be. with fellow classmates, for example, that we graduated together, we started a company that builds software in the shipping industry.
Um, and we started another one that was, uh, training for, uh, for different IT and network engineering, have you, that we did in the evenings. So there was always something interesting on the side of, but what I learned from in these 10 years that I spent a fortune 500, um, you know, served me really well. That down the road. And I know a lot of entrepreneurs or a lot of people want to start.
or their entrepreneurship journey right away, which is great. So some people are ready for it. ⁓ I was not. And I can tell you that starting a company in my 40s, ⁓ I feel that I was a lot more prepared for that journey than 10 years prior to that, than 20 years prior to that.
Gabriella (08:12)
So Engage is the one you started in your 40s. And that's the one you feel like I was so much better prepared. know? Yeah, I love it. I mean, I'm in the process of expand, branch it out ⁓ and have started a few in my 40s this year, doing it all a little bit in parallel, step by step. But there's always like, my God, am I too old? You know, like you see all the famous
Joseph (08:15)
That's correct.
Gabriella (08:41)
You know, now that I want to, I don't, you know, not, that aspiration, but you see the, the, big celebrity tech people today, you know, they got, did out of college. And then there's always that judge, you know, in your head, my God, did I go too late? Did I start too late? You know, I did this legal career and now launching companies.
Joseph (09:00)
Yeah, Gabriella, I actually and I know a lot of people will be listening to this. I encourage you to look at the research around that because that changed over the past few years. ⁓ VCs now are looking for more experienced entrepreneurs to back. They are looking for people who've been there, done that, have the network, have the creds, have the customers.
can pick up the phone and call their support, you know, network of supporters and get answers very quickly. There is, I'm not gonna quote it because I'm ⁓ maybe off in the numbers, but there is a research that was done by Crunch based on the average age of an entrepreneur who raised seed fund from a VC. And that now used to be,
20s, 30s, ⁓ that average age has increased quite a bit. That's That's not just you or me 10 years ago. ⁓ I think the whole industry is going in that direction.
Gabriella (10:10)
I love it. love it. The other thing is, guess when you're a little older too, you can sell fund. You already have your money. can sell fund your dreams or your not a dream, the challenge you want to solve. think it's not necessarily a dream.
Joseph (10:23)
So that's actually a good discussion to have as well because different stages in life, right? You have different experiences, different resources, but also different responsibilities. So as you get older, you're likely or potentially responsible for a family. Right. You cannot take as much risk as you were able to do when you did not have those responsibilities. You get even a little bit more older and you're responsible likely for
for elderly parents or taking care of people in network. So there is a balance between how much risk you can take, how much you can work for $0, how much you can spend those 80, 90 hour weeks. And you just have to be prepared for that. we collect, each one of us individually reaches that point in different stage of their life.
I guess if there is a lesson learned, there is no right or wrong time to start or age to start. ⁓ But that number is different for each individual.
Gabriella (11:32)
I think it does, does differ. mean, in my case, I did the law firm for about 11 years before that I had the traditional job. And then last year we pivoted probably earlier this year, we pivoted big, big time where among other things, besides launching a podcast, we are funding a couple of startups and buying, you know, different, like totally buying companies.
But I couldn't buy them if I didn't have my friends and partners who can go at it together. So I don't go, I don't like to go at it alone because it's not even about whether you have the resources. It's about going with the ecosystem where each of the different partners has their own ecosystem. And between all of us, we can make something greater than just a lot. I'm a big believer in that ecosystem.
So in fact, so leveraging those, you know, 11 years at these law firm, which I guess is my first entrepreneurial baby, right? Cause I said, nobody's going to be my boss. I'm going to run my own and here we are. ⁓ But along the farm, it's like, that's true, but it's hard to, ⁓
Joseph (12:41)
of a bus.
Gabriella (12:47)
So many things to say. With the legal, now it's easier with AI to pivot and innovate. It's so much faster to innovate in 2025 than in 2023 for a firm, at least in my view. But long story short, it allowed me to have a beautiful ecosystem of friends and clients and people I've met. Then now we can pivot into different things together, which is a lot of what we're doing these days.
Joseph (13:12)
So it's funny, I didn't know if you're intentionally saying pivot and pivoting and what have you, but it is a quick plug, right? that's my book and the title is pivoting.
Gabriella (13:21)
Is this your book?
I need, I want, I want a copy. Is it where, where can we get it?
Joseph (13:30)
⁓ It's on Amazon. you go to LinkedIn profile, there is a QR code there and you can get it. ⁓ I think it has been getting good reviews that it reached the Amazon bestseller in its category. ⁓ It's interesting. ⁓ Let's double click on a statement you said that it's much easier to pivot and innovate in 2025 than it was 10 years ago. Could not agree more. ⁓
our ability, so technology, right? Your legal, maybe that's a little bit different, but in the technology side, that our ability to prototype and put something in front of a customer that is working, not just PowerPoint slides, not just clickable demos, but actual working prototype, ⁓ we can do that on a weekend that used to take months to put together. So I still remember when we built Engage just 10 years ago, right? Not that.
11 years ago. It's not like ancient history, but ⁓ it took us three months to get to the point where we have a working pilot. We had ⁓ screens and concepts to share early on, but a working pilot took us three months. ⁓ One of the projects I'm working on right now, it took us three weeks to put something pretty good. ⁓
weekend to actually have something, three weeks to put something that's integrated with AI that has intelligence that has. So one of the ⁓ people that I'm associated with and I follow closely is Andrew Ng with the AI fund. that's who's backing ⁓ the main project I'm working on right now. And Andrew, for those who've been in the tech industry for a while, he's one of the
Godfathers of AI. of history behind him. But he recently started talking about how engineering is no longer the bottleneck. It used to be. It used to be. So if you and I had an idea, we needed engineers and that was the bottleneck to make it happen. What's becoming more and more of a bottleneck is your ability to get
the user's feedback and insights on what you're building. So in simple terms, product management is back to becoming the bottleneck, not engineering, where it used to be the other way around. it's great. if you ⁓ listen, Sam Altman over the weekend had an interview where he said, software engineering is going to disappear in five years. Believe it or not, we'll see. ⁓
but we're actually getting there. It's changing, right?
Gabriella (16:25)
I have a real life example, Joe, that I can share with you. Please. I actually have built apps. I have built a couple of apps myself. ⁓ This website, I built my website. I'll tell you, I'll tell you the story. You know, we have a website vendor, the previous vendor, and we said we want to rework it. And they sent us a yearly contract. And I'm like, I don't need a contract. I need you to sit with me and let's refresh the website a little bit.
We couldn't fit in whatever they wanted. we went to, okay, let me see if I can find a couple of freelancers to help us. We went to Upwork. We found three different freelancers. The first one took the project, you know, people that knew what I wanted. We sent them a video and explanation. They took the project, no show. Second person took the project, no show. Third person took the project, worked on the project, and I wanted to cry because it just didn't, it just wasn't, like it was bad.
So at the same time, I learned about this company, Lovable. I I guess I'll give them a little bit of free marketing here, but I mean, I do use it. ⁓ you know, we've changed the model, how we are doing the legal side of the business. ⁓ We are a media company. That's what we are. We produce content for our clients to use and learn about what they need. So our market is the small business to lower middle market, some of the numbers you were throwing in.
that are small, that's our, that's some of the people going to legal zoom, some, some, a little bit of that. And then some larger exits up to a hundred, you know, those are great clients for us. Basically a client that doesn't have an attorney, that's a client we want. and they're very spread and blah, blah. Our, our strategies to just give them good content where they're going to scroll. And if you look and we even have a little, where it describes our client, shows that it's like a feed.
So you can like scroll and read about our clients and some of the things we've done with them. But anyway, I built this thing in a couple of weekends and it has super like, it's super like, go check it out. It's just like, I showed it to a couple of website people. Like this is pretty good. And the challenge is that I don't know enough about websites, but I've built this one. We'll see how the SEO goes. I'm still learning about it, but I'm an attorney. I'm a business owner. ⁓
entrepreneur now, but I'm building websites because even though I'm 44, I have no problem aging myself. I think that tech is a tool, ⁓ a skill I have to have. If I, ⁓ if I don't know how to use and do these things, this thing would have taken three months. I mean, it's a complex website. have eBooks, we have videos, we have tons of blogs, we have
Tons of information. It's a media, it's a content company, more than a law firm because it really highlights the tools that our clients need instead of describing who we are. So, but then we built two other apps ⁓ with Lovable. Now, Lovable took, let me tell you the skill, I agree with Sam Altman, I love the guy. And I agree with him with what you said, because I follow him daily. However, people like me, we still need the developers because
So lovable was doing a great thing, but there are terms I don't know, even if GPT is here and lovable is here and I try to have, you know, GPT translate, there are so many things that I get stuck. And one of the big mistakes I did when I was building my apps is what I would call an illegal, the proofread, type the paragraph, proofread it, time it up, then go to the next. We didn't do that. So lovable would just go and go and go. And then there's little holes that are created in the, the, and then
I guess hardening the app, all these new terminologies I've learned, hardening in it, and some other word that I can't remember what it is. That, those steps weren't done. So we kind of created a little bit of a looks pretty, but the backend wasn't great. So we ended up getting the actual human developers to look at it. But what people like me need is we need coaches.
I need a coach and I have actually, I I found a person where I tell them, this is what I want. Tell me if the architecture should be this one or this one guide me through and then build together, build together. Um, you know what I mean? So I think you're going to need the developers because people like me are going to take pro we have a product that's in the market today. It's one of my other companies, but we are having a software developer.
⁓ agency do the AI portion of it, which lovable wasn't able to handle well, because it's pretty complex. And then the security portion, which lovable was just kind of weak on. But same what you're saying. I mean, we were getting told it would take five months to build our app. we did it in like, you know, first time lawyers, it's me and my partner are lawyers testing it out. We did it in like a month.
Joseph (21:37)
I love it. No, it's so I don't I so software engineering is not going to disappear. It's going to change developers. It's not going to disappear. It's to change. And there is an 80-20 rule here that's very, ⁓ very obvious, which is ⁓ you can use lovable cursor bolts, plot code, right? There's a lot of those tools out there and that will continue to the number of tools will continue to increase.
And they will continue to mature. You can use them to get to the 80%. You always gonna need, as of now, you are going to need a, an expert, human expert to go in and finish the 20%. So they are great in quick MVPs, quick attrations, quick analysis, quick analysis, show the, show the customer something that actually works, not just a concept, not just PowerPoint slides. In some cases, they can take you to the 90%, maybe the 95%.
But to get that lost 10, 20%, as of now, we still need to go in and put it all together. I agree. Yep.
Gabriella (22:46)
Isn't that crazy? mean, isn't that crazy? When we came up with the idea, we didn't know Lovable existed. This is in, what is it? September, 2025. This is at the beginning of the summer. We didn't know Lovable existed. Somebody told us, we were talking to some of our friends who have software agencies and we were getting quotes between like 250K and a hundred K to help us build this thing.
And then, you know, we, we, we have the funds, right? We have the network and the funds to, do the thing, but you know, we're, we were, we're treating, you know, we're really trying to do it as real entrepreneurs. We're not just going to give money away. We want to sweat. We want this sweat and tears feeling and save every single penny that we can. And somebody said, lovable. And we did it. And it took us probably two, I would say, I think the guy said we are 90 % there, 90 % there.
now you frustrations in the middle, but we did it. Now the next time I build an app, it's going to be even better because now I know, I know the things I didn't know, but that's a skill that we all should have.
Joseph (23:59)
Coding is another thing that Android did in the AI fund. Everyone in the AI fund is a coder, Vibe coder. Everyone from talent to finance to product to obviously the engineers, ⁓ the fund management, everyone is coding and creating something. You're right, it's the new Microsoft Office skills.
Gabriella (24:26)
It is.
Joseph (24:29)
there was some point where Excel was ⁓ something that some people had, some people did not, and then it became mainstream and we all just by default use Excel PowerPoint Award. The same thing coding at that level ⁓ is going to be as mainstream. We're all going to be doing it without even thinking.
Gabriella (24:49)
Yeah.
You know, with us, me and my husband running, you know, our, our little conglomerate of businesses and all the things that we do. You, I started learning. I'm, a little bit scattered in my organization and skills. ⁓ and my profile is urgency, urgency, urgency, go, go, go, go, go. And so I started learning the art of delegation, right? I use my brain for what, you know, for its highest skill set.
And everything else delegates. And so I actually had to think and strategize, do I really build a website or do I delegate the website? But I said, it's an AI website. I need to build this website. I need to get this skill because if not, I'm to get behind. I need to know how to put things in the market. I don't know. So for me, I delegate it a lot, except the things that I think are the future in AI. mean, if you don't have it.
You're behind.
Joseph (25:48)
Yep. And it's interesting with the delegation. I believe that you need to know at least a little bit of how it works and then you can delegate the rest. ⁓ It helps us as leaders of our business or ⁓ as people responsible for investments from others, what have you. It just helps us understand where we're being ⁓ BSed versus not. It helps us manage people better.
When we know a little bit about what they do and how they do it, it helps us to have better expectations on how long a task is going to take or how much ⁓ something is going to cost. So knowing a little bit make us better bosses, make us better entrepreneurs, and make the relationship with people who are actually delegating to better across the board.
as long as you know that you did not know.
Gabriella (26:49)
Yeah. And at least I know what AI can do. And it's insane. It is just insane. Insane. Insane. I've always been big on how I want the website. It's the whole, you know, digital image is important. Insane what it can do. It's just crazy. And again, I didn't start this year. I keep saying this. I didn't start 2025 thinking that I would do the things that I'm doing.
because AI is just moving faster and faster and changing entire industries, including the knowledge industry, which is what I was trained on, which is why I'm now launching more startups because I try to keep up, even though sometimes I feel like I'm raising a race that nobody knows is there. think it is there. But just trying to keep up and you know, plant the seeds, you know, just throw as many seeds into the future.
Joseph (27:41)
You I mean, to your your your head it right on and how quickly it's changing and how much easier it is to ⁓ to start something, as you said, put the seeds and see where it goes. ⁓ I also have a story with Engage, which we built our own models and and train the models and collected the data all that from scratch. ⁓ We had when it was all said and done, I think we had 35 models or so that we're very proud of.
It was about two and a half years to develop and we still needed another couple, three years to fine tune them and perfect them. What took us two and a half years to build, we can likely build in a couple of months today. And we talk about sophisticated models that do things like predict if someone is going to quit their job or not. mean, we're or predict that.
what unemployment rate is going to be or analyze supply and demand of certain jobs and skills and things of that nature. So those are not the easiest of models to build, but we can build them now in a couple months instead of a couple years. For us as a humanity, it's a great thing.
Gabriella (28:58)
It's a great thing. The question though, we all ask is where is it going to lead us? and, you know, with, with the, cause people will be displaced. mean, I know lawyers are getting displaced as we speak. I've heard of so many, you know, in my case, I'm building companies. Others are switching. Others are saying, I might be a lawyer anymore. I'm going to, you know, do a business or do some other thing. ⁓ But it'd be interesting how it shakes up.
Hey guys, I want to take a minute here and talk to you about for a second about the company X-Ray. Bottom line, if you want to sell your business in the next few years, there are two things that you're going to need to know. You're going to need to know the financials and you're also going to need to know the legal side. Why? When you go to sell a company, there will be a lawyer on the other side and there will be financial people on the other side.
And usually once you're on the table, the financial stuff has been figured out. They give you a purchase price. They just need to verify. But the lawyers for the buyers are going to scrutinize your company in a process called due diligence. And we've seen so many people not be ready for the due diligence and turn these &A situations into horrible ⁓ stress and emotional roller coaster stories. And for that, we have created the solution.
which is called the company X-ray. Check it out at the company X-ray.com. We basically do a legal audit. It's just one click for us. That's all it takes. You give us your data. We analyze it and then we give you a report and we tell you how exit ready your company is from a legal perspective. Because if you're not, not only is your &A gonna turn into a roller coaster, but your purchase price might be cut and your purchase sale agreement might look really, really, really against you because
The buyer found things and the abilities they don't like. So be ahead of the game. Check out the company x-ray.com and reach out. We'll be happy to help you. So let's go back to, let's go back to engage. Cause I want to go back to that. Cause I think we were talking a little bit about you have a corporate career and then you say, okay, I'm going to start a business. Did you go, did you do it alone? Did you do it with others and how did you sell funded? Let's talk a little bit about the beginning of engage.
Joseph (31:17)
So in the beginning, it was me and few people who are hired to help working out of my living room. And that was a good part of about nine months or so. Self-funded, ⁓ tested a few concepts. And I'd say that the concept that we started with, Gabriella, within about 18 months or so, ⁓ so we started with a concept and ⁓ built something reasonable, had a little bit of traction.
raised early family and friends and angel investment type individual people, know, some great people trusted in what we're doing, trusted in the market that we're going after. But within 18 months or so became clear to us that we're not going anywhere. The signals that we're getting back
is that we are trying to solve a problem that's too big to be solved by one company, one startup, ⁓ that people are not ready for it. One of the things I always talk about is make sure that when someone agrees with you, whether that's a customer or a partner or advisor, are they agreeing with your problem statement?
Or are they agreeing with your solution? And we learned that the hard way. we got a lot of false positives where we go talk to large companies, very smart people, and we tell them, here's the problem and here's our solution. And we come out of that meeting with the entrepreneur happy ears, we got a yes. But when we go back and dissect that, the yes was on our problem statement that yes, there is a
Yes, there is a pinpoint. I'm agreeing with this. I'm agreeing with this. I'm agreeing with this. But it was not decisive. Yes, your solution is something I would use. It was, hmm, okay, let's see how you do it. So ⁓ I also started putting this even in our CRM ⁓ when ⁓ salespeople or product managers come back from discussion with a customer and the question becomes,
All right, did they agree with that or the feedback? And I specifically asked, did they agree with our problem statement? That's yes or no. And a different question, did they agree with our approach to the solution? That's yes or no. And you learn that the hard way. at about 18, 20 months, we had raised between self-funding and angel investors about a million and a half, grew the team to about 15 people.
scaled too soon. And we concluded that it's not working. We were exactly 62 days away from shutting it down completely. to resize the team, moved back from the fancy co-working space to my living room, went back from 15 down to four people. And those four people ⁓
in early 2016 at that point, executed maybe one of the best pivots that you can think of. We put our heads together, learned from everything that we got from the customers the two years we've been collecting their feedback, came up with a different concept that handles an adjacent problem, not the exact problem, adjacent problem.
We changed the brand, we changed the models, we changed the tech. Everything, everything changed except the target market and whom our ICP was. So our ICP was the same one. So it was almost a restart. it was pretty interesting in three months from putting something that's very crude out on the market, we got more traction than we did in the 18 months we had something prior to that. So it's one of these things.
Gabriella (35:07)
So let's restart.
Joseph (35:34)
No, people, people call it product market fit. argue against that.
Gabriella (35:38)
What do you call it? Because I actually wrote market fit and I was like, is it market fit or is it something else?
Joseph (35:45)
It's, so I, what I argue for is ⁓ market fit is a journey, not a destination. It's not something that you reach and that you're done. And that's one of the problems I believe in the startup world today is that we created this fictitious creature that's called product market fit that is not measurable.
that is ⁓ not quantifiable, not much of a quantifiable, that you, by the time you recognize that you reached that, it would likely happen six months ago or nine months ago and you're due for another pivot. We created this models that here's how you should operate before product market fit and here's how we should operate post product market fit. We created these models where people think that, okay, we have reached product market fit, everyone gets a t-shirt.
Now we're switching from innovation to scaling. We're switching from ⁓ being a product marketing organization to a brand marketing organization. ⁓ We're switching from founders who are very focused on the innovation and engineering and very close to their customers to founders who are focused on ⁓ scaling and...
using money and have you, they forget how they got here and what got them here. ⁓ Not that all of that is bad. It's just what ⁓ I argue for is it's a journey, not a destination. You should be innovating. You should be continuing the cycle, continuing what got you here. How about that? When you ask people to define product market fit, they will usually say something like this. It's when your product
is meeting customer needs at a price that they like. That's usually the three things, right? Product, customer need, and price. Those are the three things. In reality, all of those three are changing nonstop. Every day, technology is changing. Correct. Base pressures are different. What worked yesterday is not going to work today. Competitors are missing with you.
customer needs are changing a lot faster than they ever did. They are changing by the day. So to imagine that we are, that there's that state of equilibrium between these three things that's going to last more than just a moment is obnoxious. doesn't exist. ⁓ Yes.
Gabriella (38:27)
Right. assumes
a constant, but the world is just moving faster than ever.
Joseph (38:35)
Exactly. So you have to be chasing that. The analogy I use and that usually, you know, get it through to people is it's very, very similar to the John Adams, ⁓ invisible hand equilibrium. If you remember that correct. Each one of us is doing what's right for us. There is an invisible hand that there will be equilibrium, right?
Gabriella (38:57)
makes it all.
Joseph (39:01)
That's, it's a great concept. Product market fit is a great concept, but in reality, economists don't think that way. You don't hear an economist say, well, the economy in 2023 had reached the invisible hand equilibrium. Right.
Gabriella (39:20)
I don't think there's a book that's like, we found the hand. Yeah, right. ⁓
Joseph (39:26)
It's visible that equilibrium and product market fit in my mind, it's the same. there is a lot, there is a movement right now from a lot of entrepreneurs, product managers and leaders who are attempting to, to relay the same thing to entrepreneurs, to not be thinking that. I, you know, when I talk to VCs and investors, the first question, right, is have you achieved product market fit?
Like, okay, you're asking the wrong-
Gabriella (39:56)
It's too theoretical. And I think in that sense, people like me who don't have that business training and we've kind of learned it on the go as well, this sticks, this doesn't stick. I think that's what it is. You know, one thing I am following, the best advice I've heard from the big famous, know, billionaires is the one from Jeff Bezos, you gotta be in love with the customer.
You have to know he says obsessed this customer obsession, which I guess the downside, you know, to your point, you know, of, launching a business in your early later years, once maybe you do have some financial comfort and like being obsessed for somebody, ⁓ being happy with your product. I need to train myself. I, and I've already told myself, we're launching one of our platforms, which is, we're going to help C CPA firms connect with freelance CPAs.
And then we have one for lawyers, small law firms that need, you they say, if I get a hundred million ⁓ &A, I probably need to staff my team a little more overnight. And these kind of platform, I can do it. I can staff it with literally really good lawyers and I can have 10 more lawyers on my team just for five months for that deal. When that deal is gone, they keep doing what they do. So these platforms are, you know, the market economy, you know, being able to up-size.
but I have a train my mind. I'm to do customer support, Joe. I'm not customer support. am going to do co I want to do customer support because I know. I know what a professional needs. Right. And so now these businesses, this firm runs runs without me. And then I got and gone to the point where these firm brands without me. but when we're launching something new, I want to be, ⁓ I'm going to have, I'm going to be with the first few customers. Tell me how good now.
You have a problem. I'm going to personally fix it. I want to be obsessed because it's true. It's true. The companies that have been good to me, they make me feel like I was important to them and I always went back to them. Right. So for us is that customer obsession. But I mean, I digressed a little bit, but because the other thing I wanted to mention that came to mind is the sense that, you know, people falling in love too much with their product.
but not really understanding what the customer needs. And again, sometimes I scroll on Instagram and I follow, you know, all these guys and you pick up some really, really good smart information once in a while, but that is one that I feel maybe it's similar to what happened to you guys. have a great product and the clients are like, yeah, that's great, but that's not exactly what we need. But that happened when you switched. Now, my question is, I mean, what a bummer. I mean, if I'm been working for 18 months,
And I've taken all these people's monies and my sweat and tears and been using my couch for months. And, you know, my family knows that this is the workspace. It's not your TV room. And then you're I mean, how mental could was that to you guys? I feel like so many people would have quit then and said, you know, we've had it, guys. Like, this is enough.
Joseph (43:11)
Yeah. No. So a couple of things there, it's never easy. and it usually, you know, at that point I, ⁓ I had to disengage with my main co-founder at the time, which was not pretty, ⁓ not something that I, I wish for anybody to go through. ⁓ had to rethink what I'm going to do about, you know, going back into a different job. You go through your mind and.
And I'm going to tie that a little bit to our discussion about product market fit, because one of the lessons I learned from that and other stories, right, we're not the only people who almost failed and then pivoted and found something that works. I tell when an investor asks,
have you achieved product market fit or not, or go do due diligence in this company, let's see if they achieve that or not. All right, I'm assessing a company myself or a product myself. I say that it's a lot more important to assess the team's ability to innovate and pivot and how quickly they can do that versus assessing whether they have something successful today. what they have successful today,
Gabriella (44:26)
B
Joseph (44:30)
May not be tomorrow, we just talked about that, right? The market, everything is changing all the time. The equilibrium that we think they have today is gonna change. If not tomorrow in six months, it will change multiple times during your hold period, Mr. Investor. So the fact that they have an equilibrium today is secondary to their ability to read the customer, to get the feedback.
to continue to innovate and produce something and pivot continuously without seeing that as a burden by seeing that as a competitive advantage. that's back to that. You you learn that the hard way, right? learn that pivoting used to be a negative thing, right? It used to be four little words. Not anymore. A lot of people are starting to see that when you say pivot, it's the same thing as you say innovate and it's continuous innovation. you learn a lot.
And you hope that you don't make the same mistakes again, ⁓ but it's for everyone to think about. It's a lot more important for you to build an innovation machine than to build ⁓ and learn to measure that too, right? That's one of the harder things to measure. How are you measuring your innovation speed? have a framework I call Idea to Cache, which is basically
from the time you get an idea, all everything that you have to do until you get cash, whether that's an actual cash on me, that's secondary and the customer insight back from that. But how quickly do you go around that, around that cycle? Right. There is a lot that you have to do. And, and once you get feedback on that, how quickly are you able to bring that feedback and, and innovate around, around the, around the ⁓ wheel, if you would. So lots, lots of things to, ⁓
to think about when it comes to pivoting.
Gabriella (46:21)
For sure. And I think that other element you just mentioned is the speed, the speed. I'm obsessed with speed. It's actually my personality is the speed and it can be a good thing. It can be a really bad thing. It's very hard to work with a person that's always anchored in the future. When you're anchored in the future, ⁓ today is late. That's like, I don't know. I've met a few people that are like that, but it feels like today is too late. That constant catching up feeling.
There's something to say about that, but that's really amazing. So I want to touch, you before we close on the, you know, you, okay, so you guys go back to your living room and you're now literally thinking, do I go back or do we just go back all in? They were rebrand, rename, blah, blah. What was the turning point? that, that be between you going back to corporate and staying in that lane of the entrepreneurship life.
Joseph (47:17)
It was the feedback from the customers. We are two years into it. We have a great network. We failed with the first product. It failed. is no other way to describe it. People were trying it, but no one really... It was not going to scale. about that? We had enough revenue, but it was not a scalable product at that point and started to be a lot more of a me-too to what else is in the market, not differentiated or anything. But we had enough network that we could...
something quick together and take it to that network of users and advisors and say, what do think of this? And very quickly, you know, the answers that we were getting, was that again, differentiating between the yes for the problem versus the yes for the solution. We were getting the yes for the solution and we recognize that like, okay, now we have something, now we really have something. ⁓ And then we went back, we, you know, our investors trusted us enough and we're able to
help us bridge that migration from the old product to the new product. We had investors who said no, no, no multiple times when we were working the first product and we came back with the second one, said yes, I'll fund that. The first one we had the product, we had a few customers, we had a few revenue and they said no to it. The second one with PowerPoint and few validations, they said yes. So that tells you that when the market starts to, you
instead of you trying to push, things changed quite a bit. So we able to pivot and raised institutional money after that, a couple of VC rounds. And then 2019 was our exit.
Gabriella (48:59)
Exit amazing and so post exit what have you been up to? ⁓ I mean you're still building what what's what's your? ⁓
Joseph (49:06)
Yeah,
so I joined the company that acquired us and stayed for about four years. built some, learned a lot during that time, again, working with very smart, large PE backers, as well as very complex problems. Instead of building from scratch, now you're talking about integration and bringing multiple companies that were acquired together. You're talking about much larger budgets than I had then.
than I had before. So there was almost back to my Fortune 500 days for about four years. I can learn a lot through that process. And then the past couple years, you know, spent time putting a lot of that in the book, was a dream and finally published last year, and then doing consulting and now also working on potentially starting something else and now using our new AI.
Gabriella (50:03)
Amazing. Joe, mean, like I said before we started recording, I said I have maybe my first celebrity. I don't know about that. Amazing, amazing trajectory. mean, I know I could talk to you for another two hours, but I know we have limited time, but.
Joseph (50:21)
So can I, I, can I ask for some, can I just give you, and I talk about this a lot, but I will give you the top five things I learned from my exit. Can, can, you know, do whatever they want to do with that. ⁓ the first thing is what I call is you never know when the phone is going to ring. So when we got the call about someone interested in acquisition, we were not going through a process. We had just raised money. We were not, we were not even thinking about that at all. Right.
Gabriella (50:31)
Please do.
Joseph (50:51)
But the call came and it was the right call. And literally within 75 days, we had closed in an acquisition. when it's with a large PE backer on the other side. ⁓ So what that means is always be prepared as if you're exiting tomorrow. And that's tough, right? When you're operating and when you're building, but you think, but that helps you build better. ⁓ It helps you think about the relationships that
Gabriella (50:58)
that's fast.
Joseph (51:21)
the co-founders who you may have or have not settled things with properly. It will help you think about all those cavities and issues that you have in your company that you know that once you go through a real due diligence process, they will come up.
Gabriella (51:37)
We preach that. That's our preaching part.
Joseph (51:41)
You're
a lawyer, right? know how that's going to work. ⁓ The third thing is ⁓ that know your company, know your metrics, cold. ⁓ always ⁓ flash when I talk about that, I flash that ⁓ popular picture of Mark Zuckerberg in front of Congress and he is sitting and there is 50 people with cameras right around the table that he's sitting and they all look at him. ⁓
And whether you like the guy or not, you gotta admire his ability to know everything. And he gets briefed great, with smart people around him and all that. But he knows his company cold. He knows the issue's cold. You're not gonna have too many opportunities to phone a friend to get an answer when you're being asked about specific metric or specific customer, specification in your product. So know your company really, really well. The other two are,
softer but regardless of how big or small you are, your team will break. Your team will be stressed out during a process, an exit process, regardless of how well it is to or how good it's gonna be for you, for them, for the customers. ⁓ It's your team is gonna suffer. Your team is gonna do it. I always, for that, I always play the brave heart. ⁓
clip with, if you remember, you know, he's standing with a much larger army against his little behind him. And there is the famous ⁓ piece where he just says, hold, hold, right? And almost what you need to do because you, if you're getting acquired, you're likely dealing with much bigger, much more sophisticated buyer in the other side and the way they look and digging and uncovering things, your team is going to need you.
The last thing I say, again, and that doesn't matter how experienced you are, how many times you went through it, if it's your baby, if it's something that you built and you're going through the process, there will be points where you will break and you just need to be prepared for that. And I was fortunate enough to have an amazing advisors and backers that helped me go through that process where I was close to breaking.
letting it go. ⁓ lots of other stuff here to talk about, but I appreciate you. Thank you for the time and keep doing what you're doing.
Gabriella (54:15)
No, thanks, Joe. You just hit it. those are the amazing, that's amazing feedback. I agree with it all. An exit is a job in and of itself. And it is a process of opening all the different layers and it's of your business, a hundred percent of it out in the open, the good, the bad and the ugly.
And emotional because you've built it, your people love it, you love it, your clients love you, and then you have somebody barking at you, why don't you have this paper? Why did you do this that way? And asking you about, know, do you have that yellow paper that's mentioned in this? It's insane. So what we tell our clients is be ready. And I just want to put in a quick word because you literally said all the things we tell. We actually created a program. It's called the Company X-Ray. It's our own software.
where we tell our clients to do your own due diligence before the buyer at least three to five years. So we want to do, we run your entire data room and then we give you a report because we've seen too many times amazing CEOs literally break because they didn't, you and that's because if you don't have an in-house lawyer, you just, and you know, the &A is a legal process.
And if you came to the table without ever having an actual in-house person helping you, there are going to be points that break and that turns into earned outs and escrow and nights, know, all nighters and stress and lots of legal fees. And that actually can be simplified. That that's, I'll tell you about it a little bit more offline, but we do have that because we think that every sale can be smooth. We, we really think, and the X-ray puts you through, through the mental break point because, so we had a client tell us.
I just realized that all my employment agreements are on like ink signatures. So he's literally scanning papers. I'm like, imagine if that happened with an offer on the table. And instead of worrying about the offer, you're scanning papers at midnight. You don't want to be there, right? So love your advice, Joe. Love what you're doing. I want to stay close and up, maybe following with everything you do. Congratulations on everything. And wow, what an amazing episode.
Joseph (56:32)
I appreciate it. Thanks, Gabriella.
Gabriella (56:34)
Thank you.
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