Private Equity Spotlight: The Recipe for Accelerating Growth and Efficiency with Jonathan Metrick

[00:00:00] Sean Mooney: Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and real time trends. I'm Sean Mooney, BluWave's Founder and CEO. In this episode, we have an amazing conversation with Jonathan Metrick, partner and chief growth officer with Sagard. Enjoy.

[00:00:33] I am really excited to be here with Jonathan Metrick. Jonathan, great to be here with you.

[00:00:38] Jonathan Metrick: Thanks so much, Sean. Good to see you. Thanks for having me.

[00:00:40] Sean Mooney: So it's been a while, Jonathan and I were on a panel together at one of these big, huge private equity conferences. And I was really excited to, in particular, talk about this because Jonathan.

[00:00:50] It was probably one of the most quoted people in the entire conference based upon some of the things he shared. So this is going to be a fun one.

[00:00:57] Jonathan Metrick: Oh, this is a tough act to live up to, Sean. What do you team the audience up for?

[00:01:02] Sean Mooney: Setting the standards as high as they should be because I know you're going to crush it as you have done before and you will do again.

[00:01:09] Jonathan Metrick: Thanks for having me. I'm excited to dive in.

[00:01:11] Sean Mooney: Absolutely. One of the things I love to do before we kick things off is get a bit of the story of our guests here. And so Jonathan, I was wondering if you can kind of walk us through your background. How'd you come up? How did you get into this industry of private equity?

[00:01:27] Jonathan Metrick: Yeah, so the majority of my career has actually been as an operator. So I'm an operator by trade, by craft, by passion. The majority of my career has been leading commercial functions in consumer and tech businesses. So CMO, chief growth officer, working with the sales teams, basically generating revenue.

[00:01:46] And, uh, at the time I was a CMO of Policy Genius. It was an insurance marketplace based in New York operating within the kind of fintech vertical. And a friend of mine was working at Cigard, which is a alternative asset manager, private equity and venture capital that invests in fintech financial services firms.

[00:02:06] And they were looking to build out their value creation team. She kind of reached out and said, Hey, you're working in fintech. You know, you're a CMO. Do you know anybody who could kind of would be interested in this sort of role? Five years ago, the kind of operating partner was still kind of an emergent space.

[00:02:20] I knew a few folks doing it, but not many, and it seemed like a pretty interesting way for me to continue operating, but within a portfolio advising a lot of different companies on how to grow. And so it was a very kind of serendipitous, random friend of mine at the firm tapped. And here I am five years later working in private equity and venture capital.

[00:02:40] And

[00:02:40] Sean Mooney: It's interesting, how often I hear that story, because everyone thinks it's this, like, you got to go through this linear logical path into this industry. And the term that I latched on that you kind of shared was this serendipitous. There's almost like this journey that brings people there that they weren't looking to go on or didn't even intend to, but yet they arrived.

[00:03:00] Like when you were growing up, did you ever think, Oh, I'm going to be a private equity person?

[00:03:05] Jonathan Metrick: I would say probably quite the opposite. I did an undergrad in business. I did my MBA as well. And Often I was not gravitating toward kind of the finance kind of Wolf of Wall Street vibe. And I kind of had always assumed the investment space was mapped against that.

[00:03:21] When I started meeting some of the folks at Cigar, I really liked them. They were great people. They're former operators, builders, very hands on and not so much kind of the Wolf of Wall Street archetype of I'm trading businesses and Slash and burning them is very much around growth. And I really resonated with that.

[00:03:43] And it's been cool to actually join the investment side of defense. Cause I think as an operator. You get to understand the reason why the board was asking certain questions like that, or the CEO or the CFO were chasing down a certain path. Why? And so it's been a great transition into that side of the industry as an operator, kind of mostly in my career, it's been cool to kind of join a fund that invests in companies over the longterm and you're working to help them grow over time.

[00:04:12] Sean Mooney: I think so many people. And I think it's less and less with every day, but they kind of view the industry in general and finance maybe larger as this kind of like this 1980s movie with Michael Douglas and Charlie Sheen or Leo DiCaprio or something like that. And then you get in and you see it's people who like to build businesses.

[00:04:32] It's a collaborative industry. I grew up in Austin, Texas, which is one of the first places you could go away from Wall Street. I too was like, Oh, this is kind of this strange world. And then once you get into it, you're like, Hey, don't feel like a Titan. I'm not flying too many Gulf Streams when I was in, in fact, if the back row of Southwest Airlines count, then I guess, but B, the people who are in it, it's generally people who like to build stuff.

[00:05:00] Jonathan Metrick: Yeah. And I think also it's a multi year time horizon, right? I think as opposed to hedge funds or stock trading. You're buying an asset for the longer term. You know, there's a lot of importance around creating synergy with the founding team or the investment or the management team, and you're working together for a multi year time horizon, right?

[00:05:20] And that's a very different dynamic than being able to kind of trade a stock within an hour or two, if there's an arbitrage opportunity. So I think once I got a little bit more exposure to that, that became a much more interesting kind of career pathing versus what I think I'd assume similar to you as watching Wall Street or Wolf of Wall Street.

[00:05:38] Sean Mooney: Not too many pushing the buttons on the Bloomberg terminal in your job. One of the other things, Jonathan, I'd love to ask is, we'd know you better if we knew this about you. What's kind of a tidbit of trivia that you'd love to share about yourself?

[00:05:52] Jonathan Metrick: Yeah, I mean, for folks who do know me, I'm a pretty big sucker for efficiency and things like on demand ordering.

[00:05:59] So pre Sweetgreen, getting my salad, which I had today, Uber, Amazon, these sort of things. Really are kind of my nirvana, things that allow you to get something without any downtime, planning your schedule to optimize a pickup, those sort of random, I'm like totally all for that. Obviously, this is kind of more the startup economy venture backed businesses that created apps, but I'm all for the save me five minutes waiting in line to get my exact Starbucks drink so I can be in and out in 30 seconds.

[00:06:33] Sean Mooney: I lived in New York City for 7 or 8 years, and then the broader area for 20 years, and I moved out to the Burbs, and the one thing I missed, particularly in the Burbs, was that like instant gratification. But even like, you go to the way, way back machine, when I moved to New York in the 90s, there was A, no apps, but you could still get everything delivered, and essentially your app was, the 15 menus that were thrown under your door every night.

[00:07:01] You'd kind of like fan through your, your menus and say, what am I going to order tonight? But it sounds like you've progressed a lot from what I used to do.

[00:07:10] Jonathan Metrick: I live in New York and I've actually moved here four times throughout my life. I've tried to leave a variety of times and each time you're kind of circled back and a funny story in New York's origins.

[00:07:21] It was the first place I ever went to my first internship in, in business school. They had coffee delivered. And I was like, you could get coffee delivered? They're like, oh yeah, absolutely. You just call this bodega down the street. Someone comes and delivers it. I'm like, growing up in the suburbs of Toronto, I had never seen a coffee delivery just down the street.

[00:07:40] But nope, you got to save the time. And there was a demand for it. So. They had a service for it.

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[00:08:08] Sean Mooney: As we turn the page here in our conversation, one of the things I really appreciate the opportunity to do is to kind of peer into your yardstick of how you look at companies. And then very often I just copy paste them and borrow these ideas here, which, uh, which cause an element of freneticism within the BluWave halls at times.

[00:08:27] But I'm curious, You've been in PE for five years. You've also had this great experience where you've been an operator for your whole career. No doubt. When you look at businesses now, you've got this kind of lens into this is what you're looking for in a company. And by design and by extrapolation, it's also like other business builders should probably be thinking about these things too.

[00:08:49] I'm curious, what are some of the traits that you look for in a company when you think about this as an operationally excellent company, or probably more importantly, could or should, or someday will be operationally excellent.

[00:09:00] Jonathan Metrick: Yeah, I've spent a lot of my career in growth, right? So revenue acceleration, marketing sales.

[00:09:06] And I think one of the most interesting things around that I've seen now, especially working at a fund level, working across a portfolio is there's no one way to grow, right? And thank goodness for that, because if there was, it would be even more of a knife fight in Google, Facebook, or trying to hit folks at an event.

[00:09:25] And because there's no one way to grow, I think it's critical when I'm taking a look at a business as. You got to own something. What are you going to do better than all of your peers and your competition? And that can be a distribution advantage. It could be data. You could be winning on lowest price.

[00:09:44] You could win on your best brand. You've got to do something that disproportionately adds value to your customer that others can't. So owning something is the first and the second is then becoming obsessed with it. And disproportionately allocating resources, building a huge competent team around that, creating a flywheel.

[00:10:05] And typically the businesses that I see the superpower or the thing that they own is often. championed and obsessed by the owner or the founder or the exec team. They're really bought into, we are going to win this way. We're going to allocate resources to this and we're going to really kill it in this vector.

[00:10:25] And so that piece of identifying a superpower, owning it and then allocating resources to become the best at it is one of the key things I look at when evaluating businesses.

[00:10:36] Sean Mooney: For our listeners who haven't. Put the money to work for an MBA yet, save your money. Listen to what Jonathan said. That is it. You know, it's like there's so much you just very elegantly described there in terms of like being really good at something that creates moats and then constantly focus on that and get better and better and better.

[00:10:57] And so I think that is really, really well said. And I think for anyone in business, whether you're an investor, an operating partner, whether you're an operator, what Jonathan just said there is really, really well said.

[00:11:13] Jonathan Metrick: It's incredibly difficult to have the discipline to say no to things that are not your priority, your superpower, your spike.

[00:11:22] And that's really where the rubber hits the road. We're approaching 2025 and everyone's doing annual planning. And a lot of folks have lots of ideas, net new ideas to grow the business. But if you're going to allocate resources, It has to be in the area that's your superpower. Otherwise, you really quickly end up doing too many things.

[00:11:41] You're kind of peanut buttering your initiatives and your resources. So there's a discipline, even if you kind of have the strategy around it, are you actually following through with the discipline of choosing an area, doubling down on it and owning it? Or are you kind of watering it down as time goes on?

[00:11:58] Sean Mooney: It's another great point. And candidly, as I kind of look back on my career, I came up through the deal side of PE. So I was an investment banker, and then I deal side, but I never really operated. And so when I got into and founded BluWave, and I'm suddenly in the seat, you really, really tangibly feel the pressure, the constraint of allocation of resources in the, this kind of visceral feeling that you have these finite amount of chips.

[00:12:24] And you got to then kind of put them to your point as like, where are your strongest? And there's just a lot of things that you have to say no to. And I think somewhat naively in earlier parts of my career, you're working, you're collaborating with the management teams in your portfolio companies, you're like, yeah, let's just do one more thing.

[00:12:41] And then you could feel them like, no, like, like we can't do 15 things. We have to do three. And I think that's another great point in terms of not only say no, but then put your tips stacked in your areas of power versus. Maybe spending more time trying to address your weaknesses. Go where you're strong.

[00:12:59] Jonathan Metrick: Absolutely. People want to see you excelling at something. They want to look to you for something. I've spent a lot of time in my career in the marketing function. One of the pieces I would always say to my team is The hardest piece about marketing is choosing what not to say because you can't say it all.

[00:13:15] You could have 10 reasons why you're the best company in the world, but if people are giving you five seconds, well, you've got to choose one thing or two things to be known for. And that is difficult, right? Stripping out all the other extras and just being like, we're going to hang our hat on this.

[00:13:31] That's a difficult exercise, but the ones who do it, do it well and can scale.

[00:13:36] Sean Mooney: I really appreciate that. I've never really thought about that in terms of. Marketing or messaging or communications or sharing your value proposition. And as much as anything, like you're going to say one thing, you can't say everything.

[00:13:47] And when our head of marketing is listening to this, he'll probably chuckle because I'm regularly accused of saying, why use one word when two will suffice. And so

[00:13:59] Jonathan Metrick: conversation before this podcast, it was like, make sure you bring that up, Jonathan.

[00:14:05] Sean Mooney: So sometimes I get to turn the light back on myself, and I'm like, well, that one hurts. I feel it right here, but it's true. But maybe going to that, and we talk about, like, there's only so much any one person can do. One of the things that I've really appreciated about the evolution of this industry, of PE, maybe back from the late 90s, when it was more of, it was still really hard, but it was kind of a buy low, sell high game.

[00:14:29] I used to say like our value creation plan was upgrade the accounting system and add a salesperson. But now it's so much more multifaceted. There's transformation involved in PE firms are not only bringing capital and kind of strategic value, but a whole host of other kind of resources. It's we're pulling the oars together with the operating companies.

[00:14:50] And so I'm curious, what are some of the things that Cigar does that you do, your collective teams do to help support your portfolio companies as well?

[00:15:02] Jonathan Metrick: Yeah, I mean, one of the tenants that I kind of believe in, in this current state of funding, be it in PE, venture is capital is now a commodity, right? And it's how you commercialize the capital that really matters.

[00:15:15] And so as you're looking at Working with a portfolio company, you're providing them capital, but how are you helping them grow? And how is that different than any other source of capital that they could potentially find? So at Cigar, we've chosen a few areas as it relates to value creation to kind of really double down on.

[00:15:32] So I had up our go to market practice, and that is everything revenue acceleration, marketing, sales, growth, and assisting our companies who are Um, really in kind of a scale or growth stage of investment. We also have a tech and cyber security team. So we invest heavily in financial services, FinTech, and, you know, of course, information security is critical in that sector.

[00:15:56] And so we have a practice that supports our portfolio companies there. We have a commercial partnerships team. So many of our LPs at Cigar are actually incumbent insurance companies, banks, financial services firms that are often looking to the next wave of technology innovation to improve their businesses too.

[00:16:17] And so we actually have a team that helps create commercial partnerships and deals between our invested portfolio companies and our LPs, and that's been a great synergistic way of information transfer. But also, a new company getting a big logo can be a game changer for a new investment. So we have a commercial partnerships team.

[00:16:39] We have an M& A team, of course, so folks who are looking to grow via inorganic. We assist there. And we've recently built out and hired our first AI lead. So someone who will assist our portfolio companies on AI development and building out kind of that next wave of technology within our portfolio companies.

[00:16:56] Sean Mooney: I love all of those. And then once again, even at the PE firms, it's about a resource allocation initiative and effort and game. You only have so many chips. And I think where you're putting them is really smart because growth is the number one correlate to valuation, even in PE, right? And everyone thinks, I think in the legacy of PE that it was a cost game.

[00:17:16] It's a growth game. And so you've got to be really good at that. The one thing I haven't heard of yet that I think is really smart is this whole notion of commercial partnerships. You've got this amazing ecosystem of limited partners that are in your ecosystem that want your companies to be successful.

[00:17:34] They have trust knowing that you're only going to invest in really good companies. So why not make the world a smaller place between those two sets of constituencies and bring them together so that not only Can your companies be successful? But your companies are doing some pretty innovative things.

[00:17:48] So why wouldn't your LPs want to know about the products and services that they have?

[00:17:53] Jonathan Metrick: Yep. And actually there's a really interesting information flow. Like I was in Europe two weeks ago doing a go to market workshop with one of our LPs. They are a well established. insurance and pension provider. They're still looking for innovative ideas.

[00:18:09] And it's the ones that are smaller, more nimble companies that are testing new technologies. They're smaller, they're more of kind of the speedboat versus the steamship. And the larger companies are looking to smaller companies that are doing more nimble testing. To see what's coming up next should other ideas that we could replicate.

[00:18:29] So there is actually a really interesting knowledge transfer because our LPs are more financial services based, but we're investing in the next wave of innovation in that category and industry.

[00:18:38] Sean Mooney: I think that's spot on and spectacular. The other thing that you mentioned, I think, is a really good kind of evolution of the model is bringing in someone who's focused on AI, right?

[00:18:48] And probably sports with the data as well and those type of things. And that's something that you got to run towards. in this world because if you run away from it, the tide's going to win. This is something even that we've been very much focused on internally here for probably three years before as more data science and analytics.

[00:19:09] But if you don't realize this is where the world's coming, it's going to surprise you. I love that you're putting in a dedicated resource to help people within your portfolio companies. Not only embrace it, but thrive with it.

[00:19:21] Jonathan Metrick: Yeah, exactly. And I think it's back to the initial framing of you need to be growing to capture better valuation and multiples.

[00:19:31] The AI tools are now going to be an area that folks can leverage to grow more efficiently and faster, right? And That isn't necessarily seamless of how you do that. Not everybody is an expert on that. It's an emergent space. So our fundamental belief at Cigard is we grow with our companies. We're here to help you.

[00:19:50] We partner with you and let's grow together. And if we can help you provide guidance on scaling, which is usually the go to market team or AI or cybersecurity, these are areas that we work across a portfolio with. Let's help you get there faster. Cause it's just more efficient for both of us. And let's grow together.

[00:20:11] Sean Mooney: It's the ultimate team sport. If they do well, you do well. If you do well, your LPs do well. If your LPs do well. There's someone above them. I don't know who they are.

[00:20:21] Jonathan Metrick: That's well above our pay grade.

[00:20:25] Sean Mooney: Hey, as a quick interlude, this is Sean here. Wanted to address one quick question that we regularly get. We often get people who show up at our website, call our account executives and say, Hey, I'm not private equity.

[00:20:36] Can I still use BluWave to get connected with resources? And the short answer is yes. Even though we're mostly and largely used by hundreds of private equity firms, thousands of their portfolio company leaders, every day we get calls from every day top proactive business leaders at public companies, independent companies, family companies.

[00:20:55] So absolutely, you can use this as well. If you want to use the exact same resources that are trusted and being deployed and perfectly calibrated for your business needs. Give us a call. Visit our website at BluWave. net. Thanks. Back to the episode.

[00:21:14] Jonathan, what are some of the top value creation opportunities that you're really thematically thinking about right now? with your portfolio company that probably other business leaders should also be thinking about?

[00:21:25] Jonathan Metrick: My focus area is typically growth, right? And so it's been interesting to see the change in the market that's really happened from 2021, which has kind of brought us the end of a decade almost of growth at all costs, right?

[00:21:39] So very low interest rates, very cheap capital, and as long as you were growing, you're good. And 2022 and 2023 came around, inflation's up, the interest rates go up and cheap capital goes away. And the mandate shifts from growth at all costs to profitable growth. That's a very different dynamic. And so I think we've been working very closely with our portfolio companies to navigate that shift in the goalposts and the new success criteria of what do we deem as a successful company and successful growth.

[00:22:14] And by and large, one of the biggest fundamental pieces is the need for connected data, right? And so that might sound very rudimentary or foundational, but it is. And if we take a look at the companies that do very well, it's the folks that have connected all of their data systems. So HubSpot or Salesforce or Facebook or Google analytics all together so that they can have a unified view of a customer who's coming through the pipe, eventually converts, and then Hopefully it stays and doesn't churn.

[00:22:43] Maybe you upsell and cross sell them and the value of that customer and the cost it was to acquire them. Now, again, this may seem very rudimentary, but the vast majority of businesses struggle with that exact journey mapping and the best companies I see have connected their data sources to a single source of truth.

[00:23:04] That allows them to make more informed decisions on targeting, bidding, and retaining their best customers. So that would be the first, I think, connected data and back to that point of AI, like you are not using AI effectively if you don't have connected data. Like don't talk to me about chat GPT if you haven't connected your different data sources.

[00:23:24] Let's start with that first. The second I think would be that around ensuring that you've got the right growth metric, right? And so this is the big change we saw in 2021. It was much more new logo, top line growth, new customers, signups. And as long as you had more customers, you were good. Now it's much more around profit, right?

[00:23:43] And efficient growth. And so ensuring that your teams have the right profit centric growth metric in mind. And what that means is whatever number you're goaling your teams against, does it factor in things like cost of acquisition, the revenue that they're going to get, the churn that's going to happen, And maybe the, the item, the ability for cross sell or upsell, what is the lifetime value you're expecting from this sort of customer?

[00:24:11] And if you don't have that more robust profit lens view, and you're just going your teams against volume or cost, you can end up down the garden path and pretty quickly be like, Oh, wait a minute. We built a huge machine that is not profitable. And that's a lot of the work that I'm seeing. Across the industry now folks backing away from the growth at all costs world and reorienting their teams to a more profit centric growth metric, which is more healthy focus area for growth.

[00:24:41] Sean Mooney: All of those really things are spot on and one you're so right on the data. You gotta have it all. You have to have a single source of truth. It's gotta be connected. And I'm curious in some of those things, are you using like Snowflake or do you have any kind of particular systems that you think are good?

[00:24:58] And the great thing now is there's so many options that you can API all the data into, but I don't know if there's anything that you are using on that front that tends to stitch things together better than others.

[00:25:09] Jonathan Metrick: Yeah. I mean, you hit the nail on the head. I think it's creating a data warehouse, right?

[00:25:12] And so Snowflake is an example of that. And you know, what's been fascinating is. Our fund, I work across both venture businesses and private equity businesses. What is interesting about the venture businesses is they're smaller and they're more tech enabled, right? Because they've been created five years ago.

[00:25:27] So they're using more of the tech tools and the new emergent solutions. And so Snowflake, which was more pervasive in the venture community for the last kind of five, 10 years, is finally now making its way into the private equity world, right? And that's awesome, right? Because private equity, larger companies, bigger revenue.

[00:25:43] The challenge of connected data is the same regardless of what sort of business you so yeah, you basically need to create a data lake like a snowflake where you connect all these systems together and allows you to have a single point of view. There's a lot of different options out there too. That's not the only one you can use.

[00:26:00] The output needs to be the same as all the systems need to be connected. One area I see is sometimes a bit problematic when you're of M and A. Your systems might have been greatly connected, but then you bolted on a new company or two. How are you connecting those systems? How long is it taking you to connect those systems?

[00:26:17] All of those pieces have ripple effects on growth.

[00:26:20] Sean Mooney: The other thing on that topic, just to maybe double tap on, is the unglamorous part of your data assets. It's keeping it clean. I used to co lead our information data and analytics practice at the P. E. from outset. And that's the really hard part. And in my mind, I started off in industrial P.

[00:26:36] E. and I was like, your data is like a piece of machinery. You've got to maintain it. You've got to like curate it. You've got to invest in it. And it's the part that no one wants to do. The maintenance isn't fun, but it's so important. I'm interested to see, like, how do you all approach that? Because there's no easy way if someone can figure out a good data cleansing business, they're going to be bajillionaires.

[00:26:56] Jonathan Metrick: And this gets back to. The importance of having clean data if you want to ever use something like AI, right? Because again, if you want to riff off of a language model that's taking a look at your data, if the data isn't clean or isn't sorted or isn't accurate, how effective is this AI piece going to be?

[00:27:15] But no, I agree with that, right? I think there does need to be a focus on the data, data quality and accuracy. That's not just something that an intern does on Friday afternoon, right? There are data teams around that and there are companies and agencies that we work with that we can plug into portfolio companies that help them build out that infrastructure.

[00:27:34] And so I think, but it is important. And so if you're listening to this podcast and you're unsure if you have connected data, that would be probably one thing I would want to take away and just say, we need to connect our data. I've seen businesses transform by actually. Connecting these sources together and saying, Oh, wow, looking at our customers like this one customer is wildly profitable and amazing and they come in and they never churn.

[00:27:59] And there were three acts what our average customer might be. That's critical information for you and vice versa. This ICP and customer segment is wildly unprofitable. We thought they were amazing. They all sign up, but they all churn within a year. Well, I thought it's super sustainable business.

[00:28:15] Sean Mooney: It's so well said you can do the really fun stuff once you get the foundation and the foundation today It's much easier than it's ever been before But it's still kind of the unglamorous part of the growth story And so I think you make a really important point there and the other thing Jonathan that I think you really kind of hit the Head on was this whole like profit centric growth and we go through these cycles right where it's like just grow at all costs And be profitable and grow at all costs and be profitable.

[00:28:41] And this was kind of like what happened after the turn of 2000, right? And when it was like the internet was a new thing and it was grow, grow, grow, grow. And then you had all this discipline that came in and that kind of created these amazing businesses that came out of that. And I think we're seeing the same thing.

[00:28:55] And we so often see this in terms of the project flows, the project demand that we get is like when you change to that profit centric mindset, it just changes the way that everyone thinks about the entire business. Suddenly pricing is in play in ways that it wasn't before. Like, no, you can grow your gross profit multiple ways, not just from sheer volume, but you can play the pricing curves.

[00:29:17] You can think about even your cost curve. How do you take it out? There's so many more levers when you make the mind shift that you just talked about.

[00:29:24] Jonathan Metrick: Yeah. And I think that was what was so interesting. When it was growth at all costs and there was so much capital in the mix, you just kind of look to new customers for everything.

[00:29:33] Then the market turns and people have to get a bit more creative. You realize, Oh, there's other levers I can pull pricing, right? Retention, upsell, cross sell. How should we be thinking about tiering the value we have for different customers who are delivering different value to different customers? All those pieces, I think we kind of easily forgot just because you were so focused on new and growth.

[00:29:54] Sean Mooney: One of the things, Jonathan, I'd love to get your perspective on. This is something we talked about at the big PE conference we're at. It's like, the speed of business is incredibly fast. In some ways, to the fast go the spoils, you know, in terms of they're the victors. And so how are you all thinking about the speed of business?

[00:30:11] And have you seen any insights within your companies as you kind of, now you have the dating, you're able to glean things that weren't so obvious in the mix of ones and zeros as they float around?

[00:30:21] Jonathan Metrick: Yeah, I mean, I think one of the biggest needle movers that we've seen across every industry, every stage of business, be it PE, venture, B2B or B2C, is this notion of speed to lead, right?

[00:30:34] And so trying to convert a customer as soon as possible when they're ready to buy. And we've seen time and time again, shortening the conversion cycle, the customer journey in every single step of the buying journey. Yields dividends in terms of conversion, and so we've seen folks double their conversion double by ensuring that if a customer calls you, you don't get them.

[00:31:02] You call them back within 30 seconds, 5 seconds, 10 seconds and not minutes or hours that can seem intuitive again. Much of the foundational pieces that I view as growth is often foundational work. This isn't rocket science. It's not the next wave of AI. It's just when a customer is ready to buy, you've got to convert them right then.

[00:31:22] We saw an example of one of our portfolio companies who had a bit of a lag on their conversion email that was sent out, right? So, customer signs up, they get a conversion email, they schedule a follow up call, and there was a bit of a time lag on when that email was sent out because of the backend system connection, and it was five minutes.

[00:31:40] They went in and diagnosed that they're like, Oh, wait, why don't we just shorten this to instantaneously and their conversion to the sign up for a demo went up by 30 percent simply just by saying, send the email immediately. So the customer is sitting at their computer could then say, okay, got the email.

[00:31:54] Now I'm going to book that followup appointment.

[00:31:56] Sean Mooney: You send them an email, you've got the scheduling tool right there. It happens immediately. It's on their thought. You're keeping them on the journey. It's crazy. You think, Oh, five minutes. Just think about our day to day and five minutes. I've probably looked at three other emails.

[00:32:10] I've had someone come into my office. I've gone to get water.

[00:32:14] Jonathan Metrick: You started your

[00:32:15] Sean Mooney: podcast. And

[00:32:17] Jonathan Metrick: I often, it depends if it's a category that consumer loves, maybe they'll spend more time on it, but if it's something that's kind of an annoyance or it's a problem they're trying to solve, they want to get it done.

[00:32:26] They've allocated time to get it done. You have to convert them when their intent is there. Trying to replicate consumer intent is very difficult. You've got to convert, strike when the iron's hot.

[00:32:37] Sean Mooney: It's such a great and profound insight in that the speed of business is gets going faster and faster and faster.

[00:32:42] And if you think about the one kind of certainty that's happened since all of us were kids is Everything is moving at a more rapid pace and these tools, whether it was the internet or it was a personal computer or it was an iPhone in your hand or it's now these AI tools, it's just the speed goes more and more kind of rapid and it doesn't mean that the robots are displacing us.

[00:33:05] It just means we all do more and more in the same 25 hours a day.

[00:33:10] Jonathan Metrick: And the expectation too, right? I think the customer expectation of. Yeah, I can go on Amazon and one click order something and it's at my door the next day. I mean, what's the point of these on demand apps, right? Even like I'm ordering my coffee and want it instantaneously.

[00:33:23] If I have to call a business and wait for minutes, hours, the likelihood of conversion is just lower when every other category is instantaneous.

[00:33:32] Sean Mooney: I keep just thinking about when you see on that, your computer, that little circle, as it spins, as a computer system is processing, you're just like tapping your fingers.

[00:33:40] It also speaks to the customer experience. It's just that people have this expectation and if you serve it, you're going to prevail if you can do fast and really good.

[00:33:49] Jonathan Metrick: Yeah. Once you've fixed your connected data, go back to your business and see how fast you're converting your leads. How long does it take for a customer who expresses interest to get communicated to your business and actually sold?

[00:34:03] Shorten that time and you will improve your conversion by double or triple digits. And there's no new channel. There's no new customer segment you're going to find that will improve your conversion by a hundred percent and a speed to lead will.

[00:34:16] Sean Mooney: And that's a profound insight. Write this down and then do something about it.

[00:34:21] So maybe, Jonathan, as we kind of move on to the next chapter of our conversation here, one of the things that I love doing when I have folks like you on this and I have the opportunity to Frankenstein myself and borrow pearls of wisdom, I'm always very curious, and particularly here, And if you had an opportunity to go back to 22 year old Jonathan and impart some wisdom a 22 year old Jonathan may or may not have listened to, but you could still do it.

[00:34:49] What would be one of those pieces of advice or some of those pieces of advice that you would share that you wish you knew back then?

[00:34:55] Jonathan Metrick: Yeah, I mean, I think on my side. Coming from the operator world and then now joining the fun world or P. E. or V. C. I think one of the things have been so interesting to learn is the value of benchmarking and a friend of mine.

[00:35:12] I was speaking to recently who's, you know, former C. M. O. And kind of now entrepreneur. His quote around this is cheat on the test. And what we mean by that is kind of if you're doing a new challenge or a new project, you You're probably not the first person to have done that. In fact, there's probably a lot of people who have already done that and are really good at that.

[00:35:31] Why not save yourself a ton of time and headache and blood, sweat and tears, and just go talk to the people who are already really good at doing that. Get yourself 80 percent of the way there simply by benchmarking. So cheat on the test, look at the answers, sit beside the person who's the smartest at the test, and you are going to scale faster.

[00:35:50] In the earlier phases of my career. You have this kind of mantra of, well, I work really hard and if I put in the effort, I'll figure it out. And that may be actually true. It's wildly inefficient when you can actually tap someone else on the shoulder who might be really good at something and learn from their experience.

[00:36:09] So the value of benchmarking, if you're hitting your head against the wall against a very difficult challenge, do yourself a favor and talk to a few folks who are really good at that to amp up your learning curve.

[00:36:20] Sean Mooney: It's such a great piece of advice. And I think that's one of the reasons why PE's been successful is they'll bring in true experts to kind of accelerate the learning.

[00:36:30] And every PE person will regularly say, like, don't recreate the wheel. It's one of the things that gets seared into your head. But I think it's that idea where you can increase the expected value of the outcomes. And I was talking with a friend of mine actually this week in Deloitte, like Humblebrag Alert, they named us as one of like the fastest growing and most innovative tech companies.

[00:36:51] But we did it with almost no outside capital, and we're eight years in, and people are like, how did you do that? And one of the answers is, there's a variety of things, there's a lot of and, but one of it was, we use ourselves on ourselves every day. And so like, we have this ecosystem of all these really, really kind of amazing private equity grade expert advisors.

[00:37:13] Anytime we do something, we go to our own ecosystem to get the, I think you said it really well, like, we get 80 percent of the way there before we even start, and then we learn it, and then we bring it in, and so we've been able to kind of scale at this hyper rapid pace without having a lot of like, skinning our knees more than we would have, doing it faster, but also with less bands of outcome, and what you're sharing here is like, Cheat on the test, right?

[00:37:38] Go get your benchmarks. Why recreate the wheel? To your point, people have done this stuff before. And so, it's a great piece of advice. It's probably something I took way too long in life to figure out. And

[00:37:50] Jonathan Metrick: it's interesting because obviously in school you, you kind of can't do that, right? Like, I mean, if you do do that, you know, folks who are maybe in college, don't listen to that advice until you graduated.

[00:38:00] But I mean, once you're out, again, there is no prize for a unique answer. It's just, we want to have an efficient solution and faster back to that point. Like smart, hardworking, talented people can figure it out. It's just, do you want to spend a year doing it or do you want to spend a week doing it? That's the difference.

[00:38:17] Sean Mooney: One of the ways that business builders are really good at it, speaking of like, don't recreate the wheel, someone else is figuring it out. People like you, Jonathan, are prolific readers, because it's like, let's figure out what someone else listens to, or do podcasts, or ingesting information from a whole variety of ways.

[00:38:35] I'm interested, Jonathan, is there a business or a personal book that you've read or recently read or read over time that you think this is something that also kind of helped you figure out the game of life in a better way as well.

[00:38:48] Jonathan Metrick: Yeah, one I read this year was from Scott Galloway, The Algebra of Wealth, and I like his insights.

[00:38:55] They're usually rooted in data, and he swears a lot in case of kind of fun and interesting as opposed to a very kind of like boring academic piece, even though he is a professor at NYU. But one of the notions he kind of covered off was this idea of compounding. Compounding. Typically, we think about it as relates to investing, right?

[00:39:12] And so things grow slowly over time. But. In one or two years, not a huge impact. But if you've been compounding investing for many years, there's a huge outsize impact. But I think he tees up, what else are you compounding in your life, in your career? And money is one facet of it, but how are you spending your time and what are you compounding?

[00:39:32] And I think that's a very interesting notion as you think about, okay, I've spent my entire career on marketing and growth. And I know a lot about the space of generating revenue is because I've worked in this space for over 15 years. As you parlay that to your career, your personal life, your fitness, your relationships, how are you thinking about your time?

[00:39:56] And what do you want to choose to be compounding? Because over time it will grow. I'm reading right now the philosophy of money. And one stat I know is Warren Buffett and wildly successful investor. 85 percent of his net worth was actually generated after he turned 65. And he's been investing since he was 13.

[00:40:16] So the time horizon matters. And if you think about his value investing, if you've been doing that since you've been 13, and you're now in your eighties, that's compounding as an interesting kind of vector of kind of how do you think about time allocation, how long you're doing something and choosing selectively, strategically, what do you want to be compounding in your life?

[00:40:40] Sean Mooney: It's a great concept. I've never thought of it that way. It's an important one, and it makes me now think about a lot of the life choices I make. And so But you mentioned How many hours per day am

[00:40:51] Jonathan Metrick: I on Netflix? Yeah, I know. I

[00:40:53] Sean Mooney: was like, damn it, I spent eight years watching that TV show Lost. And

[00:40:58] Jonathan Metrick: I still don't get it.

[00:41:00] And I'm still mad about it.

[00:41:02] Sean Mooney: It's like, I could have had all that time back. But it's also your point, it's like a lot of the stuff comes later, so it's like there's A, never too late to start, but once you do, there's just like ripple effects and the flywheel gets going faster and faster. And then your point on even like the kind of the less value added things, like the amount of time I'll flip on Netflix versus turn on a podcast or read or dare I even be a human and spend time with my friends and family.

[00:41:30] It's a good lesson, particularly any time of year. But also as the holiday season as it's progressing, and it's a great way to kind of think about and think through that. It's a great time to invest in yourself.

[00:41:43] Jonathan Metrick: Yeah, for sure. And even dovetailing that back to our topic earlier in the discussion around choosing to own something as your business.

[00:41:50] What is your business compounding? Right. What are you spending time and energy on building a moat around and getting a flywheel going and disproportionately like that applies to the business strategy, but also to your life. So I think these kinds of principles are kind of growth principles are widely applicable to business, personal life, wealth, all of it.

[00:42:09] Sean Mooney: You've dropped a lot of pearls of wisdom here in a good way. And I've, I got tons of notes actually, as I'm talking about this and we talk together. And so I want to thank you. For spending the time and sharing not only wisdom and insights, but actionable items. And there's all sorts of things that we talked about today that I wish I knew before.

[00:42:29] And so that's a tremendous gift. And I appreciate your generosity, sharing your time and some of the hard earned lessons that you've kind of figured out.

[00:42:36] Jonathan Metrick: No, that's great. Thanks for having me on. Excited to chat with you, Sean. If you want to follow me on LinkedIn, I do a lot of posting there too. So, but yeah, great for having you.

[00:42:43] And I'm excited to see how this plays out.

[00:42:46] Sean Mooney: All right. Well, Jonathan, thanks so much again for joining and we'll talk again soon. Thanks

[00:42:49] Jonathan Metrick: so much for having me, Sean. All right.

[00:43:00] Sean Mooney: That's all we have for today. Special thanks to Jonathan for joining. If you'd like to learn more about Jonathan and Sagard, please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcasts. We truly appreciate your support.

[00:43:17] If you like what you hear, please follow 5 Star Rate, review, and or share. This is a free way to support the show and it really helps us when you do this, so thank you in advance. In the meantime, if you want to be connected with the world's best in class, private equity grade professional service providers, independent consultants, interim executives that are deployed and trusted every day by the best business builders in the world, and you can do the same, give us a call or visit our website at BluWave.

[00:43:44] net. That's B L U W A V E and we'll support your success. Onward.

Private equity insights for and with top business builders, including investors, operators, executives and industry thought leaders. The Karma School of Business Podcast goes behind the scenes of PE, talking about business best practices and real-time industry trends. You'll learn from leading professionals and visionary business executives who will help you take action and enhance your life, whether you’re at a PE firm, a portco or a private or public company.

BluWave Founder & CEO Sean Mooney hosts the Private Equity Karma School of Business Podcast. BluWave is the business builders’ network for private equity grade due diligence and value creation needs.