[MUSIC] >> Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders or in the front lines building it. In each episode, we'll speak with a visionary founder who's building a new category or reimagining an existing one. We'll learn about the problem they solve, how their technology works, and unpack their vision for the future. I'm your host, Brett Stapper, CEO of Frontlines Media. Now, let's dive right into today's episode. [MUSIC] >> Hey everyone, and welcome back to Category Visionaries. Today, we're speaking with David DeWolf, CEO and President of Known Well, a commercial intelligence platform that's raised two million in funding. David, how are you? >> I'm great. Thanks for having me, Brett. >> Yeah, no problem. So let's go ahead and talk about your journey building companies. I know you founded your first company in 2006. You sold it twice. Let's talk about that. Take us back to 2006 in the founding of your first company. >> Yeah, I actually started my career as a software engineer, and this is kind of a fun story. Unlike with Known Well, I actually accidentally tripped into building a company with three-pillar. I decided to leave employment and become an independent consultant, and I thought that I was going to be an independent consultant the rest of my career, kind of just choose the teams I was going to work with, build software. I was doing a little bit of public speaking, actually had a book deal, and none of that ever came true. Two years later, I woke up and I had six people working for me, and it was an, "Oh my goodness, moment. I better figure out how to run a business or shut this thing down." But what I realized was I was actually never the best computer scientist in the world. What my love is, is I actually love understanding problems, applying technology to it, but most importantly rallying people together and building high-performing teams that can build and create together. And what I realized in that moment was I could do that in spades by building a company rather than just building the software itself. And so that's what I ended up doing. I built and grew three-pillar for over 16 years, consecutive growth every single year. We grew it to about 2,500 employees. And like you said, sold with private equity, and very specifically, we were in the business of outsourced product development and digital engineering. And so we were helping technology companies, information companies, media companies build their digital products as they became digital companies. And so I've kind of been in the software space first as an engineer, and then advising and helping companies build them through the team we built at three-pillar. And did you raise outside funding for that? We originally didn't. So I started by bootstrapping that company. As we grew, we started to acquire and to facilitate the acquisitions. We ended up bringing in some capital first. We actually brought in family office capital first to affect our very, well, not our first, our second acquisition. We ended up then skipping over the VC and going to growth equity. So we had a minority growth equity investor, probably about six years in that came in, and then ultimately sold to private equity to capitalize for the next spur to growth. And then a final exit with private equity before I stepped down in 23. What do you have against the venture? It sounds like you just skip over the venture and you sold the PE twice. What's it about venture? I actually love venture as I'm getting to know it. The reality is because I was an accidental entrepreneur, I just never had it on my mind early on. The other thing is if you think about the business model, that was an outsourced product development company. That's really a services firm while we were building software products. And that's really not aligned to the venture capital model, right? And so we really took on capital to grow very deliberately and make investments in scale, not to experiment and find a market and those types of things. And so because of that, it just wasn't a fit for the right business. But we're definitely going down the venture capital path now. This time around as we're building a platform business, venture can be great for those that's businesses. How many companies did you acquire? Through pillar, I want to say it was six. It could have been seven. Those ranged in size. So the very first acquisition we did was very early on. I think it was about two and a half years in and I think it was a three person shop. So don't take that account. I would say of those three of them were sizable scalable organizations with at least 10 million plus of revenue. So we did our fair share, but I learned a lot about it along the way. And we definitely got good at it. Yeah, I was going to say 16 years and a very long time to be working on one company. But it makes sense. If you acquire six companies, sell it twice. I could see how you kept busy and probably didn't get too bored there. Well, the thing about the entrepreneurial journey, Brett, that I love is it requires an entrepreneur to continually reinvent themselves, right? I found that three pillar every 18 months. I was learning how to do a new job, right? And you have to go from very early phases. I was everything. I was the producer of the work. Then you go to manager of work, then you go to seller of work, then you figure out how do you become an executive? What does leadership look like? And like over and over and over again, you're reinventing yourself and exercising new skills. And then how do you become a leader of leaders of leaders, right? And the abstraction gets more complex. And you're picking up these new skill sets like M&A and learning different things that you didn't have exposure to. And so that is what the thrill was for me. I actually love scaling businesses. I think this startup phase, I'm having a blast being back at the startup phase, but scaling is a lot of fun to me. And I really enjoy that and everything you learn as you do scale. That's so interesting. I feel like most of the founders I speak to, it's the opposite. They say that the zero to one phase or empire building is fun for them, but empire managing, that's not so fun stuff. But you're different. You like the empire managing part, it sounds like. Yeah, and I don't know if it's as much empire to me as it is, the complex problems that you get with scale, right? What you have to do at these inflection points is tear down what you've built and redesign it for a new level of scale. And I find that fascinating interesting. I really also love the people part of that. How do you manage an organization through that and maintain and scale the culture? I'm a real believer. It's so cliche, you know, culture, each strategy, if you launch all that kind of thing. But honestly, the cohesion of a leadership team and how they're able to out execute their peers because of that cohesion to me is the number one thing that drives the success of an organization. And I just love navigating through that and continually kind of tending to that leadership team and building that leadership team for that point in time and making sure that it's always growing and expanding and going to the next level. And then scaling that even to not just your team, but the team below it and how do you foster that and then build that. And by doing that well, you create a culture where individuals can thrive not only in their professional life, but if you do it really well in their personal lives as well. And it gives opportunity that they otherwise wouldn't have had. And growth is an amazing thing in terms of what it does, not only for the organization, for the people involved. And it was just very satisfying to me and aligned very much with kind of my mission to be able to help people through that path and to build something where others were able to really make a career. And multiple folks that work for me that are now CEOs of scaled organizations, right? That's really exciting and gratifying to go through. How would you summarize your approach to leadership? Or actually a more fun way to maybe ask this. How would those direct reports if they had one podcast? How would they say David DeWolf approaches leadership? Yeah. So I would start with, I think every single one of them would say that I genuinely care. So I think one of the things that set me apart and I've had people since I left three pillars come back to me and say this was what allowed you to be successful is I found the intersection of I genuinely care about the people, but I am willing to make a hard decision. It is not the hard decision that makes you a good or bad person or your action good or bad. It's how you execute that decision, right? And so I've had people that I've had to fire that have come back 24 hours later and thanked me, right? And I have people that I had to encourage to move on that consider me a mentor and a friend still, right? Those types of things and I think that is probably what sets my leadership apart more than anything. Is that intersection of, yeah, I'm going to run a business and I'm going to do whatever it takes to make the business successful, even if it hurts and it's hard to do, but I'm going to be compassionate and I'm going to act in a way where it really respects the individual and allows them to hold on to their dignity and hold their head high. And I think that is probably the first thing that they would say. Let's talk a little bit about the exits there. Or is that price that it was acquired for? Is that public or is that private? It is not, it's private. Okay, well, you have a family office, so I think that implies a little bit for us. Fair enough, fair enough. What was that like? I don't know if that really kicked in after that first sale or the second sale or kind of a combination of those two, but at some point you reached the level of success that a lot of founders I think aspire to get to. What did it feel like when you made it there? I'll be honest with you, it was very anticlimactic for me. I never did this for the money and so that wasn't a goal of mine. It wasn't an objective. If anything, I think it actually gave me an increased sense of responsibility. I really think it had me double down and say, you know what, even more so now, the way I invest in others, the way I help that new entrepreneur coming up, the way I think about how I run my business, all of those things. Now it's not doing it for me and my family. Now it's doing it because I have a responsibility to give back. And I think that was the biggest thing. I mean, listen, everybody aspires to some sort of worldly success. The reality is money doesn't make you happy. It is your relationships. It's having a purpose. It's doing something bigger than yourself. And I'm just fortunate. My faith is a really big part of my life. And that was something I always prayed about. That I always wanted to have was to make sure that I stayed grounded. And hopefully I'm doing that, all right? I pray every single day that I've been able to do that, especially as I go about a second run. I don't want it to be about myself. I don't want it to be about the money. I want it to be about doing good things in the world and impacting other people. This show is brought to you by Frontlines Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io/podcast. Now back to today's episode. That is a perfect segue to talk about that second run. So let's talk about that. So let's talk about the decision. So I think you've probably gone down a path running your family office, doing some investments, not being pulled into the day-to-day grind of building a startup. But you're a dark, twisted person. It sounds like you like the pain of startup building. So talk to us about that decision. And what were those conversations like with your family when you said, I'm going to go and do this again. So funny. Oh my gosh. So many thoughts you brought to my mind there. I'll say first and foremost. So I didn't know what I was going to do when I stepped down from through Beller. I took the first quarter and I just traveled the world with my family and friends. So Teresa and I went to Israel and spent two weeks there. The first two weeks I was off. And I took my sons to the final four. I did that kind of thing. So you asked about my family's reaction. At the end of that first quarter, my wife and I decided that we were going to sit down and talk about. How's the first three months going? And we sat down at dinner. Now, context, you need to know I have eight children. My oldest is 23. My youngest is three, right? And so my wife is a very busy woman that works harder than I do. And she sits down at dinner and she said, "David, what I've realized in the last three months is that you're retired and I'm not. And it's no fun being married to somebody who's retired." So that's how it all started off. But honestly, she knew I was starting to get antsy at that point in time. I started by ramping up some board seats and some consulting. And I'll tell you the experience that told me I'm an operator and I get to get back to it. I facilitated a strategic offsite and strategic planning for a company, a technology company and had a blast. The two days at the offset was so much fun. I was like, "Oh, I haven't done this in a few months. This is great." The saddest moment was watching them walk away and go to the airport. And I thought, "Oh my goodness. This was a blast, but I don't get to see any of it in terms of follow through and execution and rallying the team." And that's when I realized I'm an operator. I got to get back to it. So I started to go out in the market. I looked at companies to buy. I looked at, I had a couple offers to come run companies. I really got fascinated with artificial intelligence and what was happening in our society. I stepped down six weeks after chat GPT. So I was able to, without any blinders on of running a company, watch this wave hit and just observe what am I seeing. And here's what I saw. I see three different conversations. One was about the LLMs and the technology. It's interesting, but it's an invention conversation, not an innovation conversation. A second was about personal productivity, like what I call tooling around. How do we use this to do our actual work in a more productive, efficient, effective way? Interesting, but wasn't really compelling to me. It wasn't something I could get passionate about. The third conversation just intrigued me, which is the conversation of, how is this going to impact our businesses? How is this going to change jobs? How is this going to change the way we lead our organizations? And what I found there was a dearth of answers. Nobody was answering that question. They were just asking questions about it and they were concerned about it. And so I decided to dive into that and look at it. And what I ultimately realized is, in the application of AI, there is absolutely work that will be done execution wise. But if you actually look at the research, 85% of knowledge work is about the orchestration of business. It's about the operations. It's collaborative in nature. It's how do you tie these work streams together and actually drive performance of a system that produces a result? And that became the fascinating question in my mind that really got me saying, "Oh my gosh, I want to help figure out how is AI going to impact the organizations?" And here's the really deep reason why is remember what I said about caring about the people? I want to make sure that AI is adopted in a way that gives us, yes, the full economic impact that we think it can drive. And let's realize all that value, but let's do it in a way that upholds the dignity of the human person and allows us to thrive as human beings and not just tear that down. And so that became my personal mission. And I started looking for very real pain points through customer conversations that would lead us to a product and a platform that ultimately we could build to be that intelligent operating system of tomorrow's enterprise. Talk to us about that mental model that you were running to break it up into three conversations like that, ask questions and then dive deep. Is that just how your brain works or where does that come from? How does that work? Take us behind the scenes of your brain and your mental models. Yeah, maybe the word that a friend of mine uses, sometimes you can be unconsciously competent, right? My brain does. My brain works in the abstract and everything that I observe, I end up translating into a mental model of a framework of how I see the world. And that abstract framework is something that I am continually pondering and just mulling over in my head. And so what really fires me up where I get excited is actually being in market, having these conversations and collecting more and more input that can update that mental model, right? And so I'm always looking for that model of how do I make sense of the world? And I think you just saw it, right? This is where the engineer in me comes back out is how you interpret the world and how do you create these frameworks that allow you to understand it? To me, that is the basis of every successful company. I think it's where entrepreneurs sometimes go wrong is they run toward a single pain and use case without a framework of where they're going and why it's important. And you learn a lot by having to abstract multiple data points into their commonality. And so that's really what my last summer was about was getting out in market and collecting enough data points, right? I've literally at this point done hundreds of customer conversations sitting with boards, sitting with lightweight personnel, like just really diving into how are you thinking about AI and how it impacts your enterprise? How are you thinking that we're building this commercial intelligence program, right? So what we saw, one of the data points we saw over and over again was specifically professional services firms were always surprised by the churn of their client base. And I heard in boardrooms this anxiety and this angst, not just about churn, but the surprise of it. And what we were able to do is extract that back and connect it with other drugs and realize that organizations have a commercial intelligence problem. These services organizations do not have the transactional data that a SaaS business or a retail business have that allows them to do normal analytics and figure out, Oh, here is the value that my customer is driving. Or here is the usage and here is the sentiment of my customer. What they have is they have relationships and those relationships, the exhaust of that is not transactional data. The exhaust of that is conversation, right? And so it was really abstracting those data points and pulling back and pulling back and then going back to validate them over and over again, that led us to finding the idea that ultimately has become, you know, we've got we are nine months old, we just released a product about a month and a half ago, and we've got three paying customers, right? How do you do that? You do that by being everybody talks about being client centric and driven by the customer. Most people build a product, release it and then go look for customers. We did the exact opposite. We said, we're not building anything until we have a paying customer. And it's that process of abstraction and collecting those data points that allowed us to do that in a way that is repeatable that now we're able to productize that solution. This show is brought to you by the Global Talent Co, a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find higher, vet and manage amazing marketing talent for 50 to 70% less than their US and European counterparts. To book a free consultation, visit global talent.co. All over startup land, I think people say that get out there, talk to customers. I have another podcast called Unicorn Builders. We interview founders who've built billion dollar companies. I ask them how, what was successor, you know, why were you successful? They all tend to say the same thing. They got out there and they just talk to customers and they still do it. Everyone knows that, but I think it's hard to get those conversations right. So let's imagine you get someone on a call and you're a perfect customer, you want to talk with them. How do you ask them good questions so that you walk away with something that's actually valuable? And not just them saying, yeah, that sounds interesting or yeah, that sounds good. Like, how do you make it actually usable? Because I think it's hard. Yeah. Okay. So I'm going to answer your question, but I want to go to a pet peeve of mine first that you just bought up. Okay. So I agree with you. Everybody talks about it. It's very hard to do. But more importantly, I'll tell you what I've learned. You asked me about my perception of venture capital and why I didn't think of the first time. I'll tell you something I've learned about venture capital that I don't love, actually. And that is while they preach it, the funding cycle is not set up and promoted, right? If you go look, anybody will tell you that a seed round is about technology risk and taking it off the table. And it's not until later that you address your commercial risk. That is so broken and upside down, right? We are actually promoting the exact opposite of what we pontificate, right? And so I think we need to disrupt the way venture thinks about how they fund in order to really propagate that thick egg. So Hangent, sorry, had to go there. But I'll come back to your question. I had a mentor in the early days of three pillar. That said to me, David, here's the secret to asking good questions and really learning your customer. Be genuinely curious. Stop doing it for the sale. Stop doing it because you want to find a product idea. Go be genuinely curious. Ask questions about what the other person cares about. Ask questions and the follow-ups around what they said the pain point is. Too many people are afraid to pull the thread when they hear pain, right? Because pain can be uncomfortable. A pain is what we're looking for. And if you're genuinely curious and you genuinely want feedback, I think it can lead to much more rich conversation. I've always said, I think successful entrepreneurs live this paradox, these two, like a dichotomy of mindsets. They, on one hand, have to be incredibly stubborn and confident in their vision. The same time, they have to be incredibly humble and flexible in the way they achieve that vision. And it's really hard to live both of those to remain confident yet to learn how to navigate and change your path along the way. What you're doing when you're having those customer conversations is you're trying to gather as much intelligence as much information as you can from somebody else to see the world the way they see the world. And if you get genuinely curious and dig into their pain, their motivations, their emotions, their joys, you start to find those things. And so, find your authentic curiosity. That would be my big thing. Do you have a go-to question or is that counter to going into that conversation with the goal of being authentic? Well, I'll tell you what, here's a hidden secret. I hope nobody listens to this because they'll start watching out for it. I actually try to control the beginning of a conversation with questions, right? And so, I will always go in asking for the other person's story first. I want to hear how they describe themselves, how they describe their job, how they describe in their own words, whatever they think the context of this conversation is, right? And so, I really go in, I want to get to know the person, I want to get to know the business, and I ask them to tell their story. And it's interesting. Some people start with business all the time. They won't go personal. Some people start personal. But those open doors for you and give you more fodder to ask better questions later on. And so, I actually believe in go first in asking questions because then, at the point in time you start introducing yourself, you can actually reflect that back and start to build credibility and trust that allows you to open up new doors because now you're able to speak to the things you learned in the moment that open up the conversation further. Let's talk about the difference in the two companies that you started. So, one in 2006, one in 2023, what's the biggest difference there from the time periods we compare it? Well, from the time periods, I mean, I would say that I would break down the difference in terms of number one, just the time, right? So, in 2006, right, we're talking about the launch of the iPhone, right? We're talking about the very earliest days. I think Facebook was found in '06, wasn't it? Right? Like, that's the point in time we're talking about, right? So, digital is a thing now, right? We ended up in the digital engineering and product development business. That wasn't even a category when we started the business, right? And so, now, it's the way everybody thinks about business, right? And so, back then, we talked about software eating the world. Software has eaten the world in every single business model, right now. And so, people have a more native digital mindset right now. So, I think that would be the first thing. I think the second thing is the period of a cycle that we're in, both from an economic cycle perspective. You know, it wasn't until '08 that we had a dip. So, I was in a decent economy when I started and then had to navigate through the '08 recession. Right now, I actually think you want to start a business at the down in the dip and the guy. We timed that perfect. So, we're a little bit later in the cycle. We also have this innovation wave of really the advent of the cloud and the internet, the core technologies of the digital era had already been in operation for a handful of years and was starting to mature at that point in time. Whereas, right now, we're in the earliest innings of the intelligence era. And AI and people are still grappling with just the basics of how to use this technology, right? And so, I think that's different as well. And then, the final difference is, I'm just an incredibly different human being, right? I've led a business before, not just written code before. And so, the mindset I have is benefited by the experience that I've had in approaching it as well. Let's talk a little bit about market categories. So, I'd introduced you as a commercial intelligence platform. The category, is that the line item that people are buying or is that a totally new one that you need to create and pioneer and then eventually lead and dominate? Yeah. It is a new market. And I think it's a market that has many adjacent markets next to it, right? So, there are many customer experience platforms, customer data platforms. Those are categories that exist. We are purposefully labeling this slightly different, because this is not about just intelligence into your customer. It's about the commercial relationship. So, when we say that, what we're talking about is the economic relationship that exists between a service provider and a client. What is the intelligence there? What is the data there? And how do you understand that in terms of the economics, in terms of the ability to sustain that over time and grow it over time, right? Which is ultimately what the client cares about. So, we're being pretty deliberate about that. I will say this too. We also have an even bigger vision, which is that we believe every single business, ultimately, will be driven by an intelligent operating system that orchestrates the full business. And ultimately, what will sit at the core of that intelligent operating system is the commercial health of your organization and the relationships you have with customers, because every business should be in business for the purpose of delivering the whole value stream is about delivering to that customer and sustaining that commercial relationship. So, ultimately, that commercial intelligence platform becomes the brain that ours, the operating system of the entire business, that ultimately drives performance. And I think every business is going to be there in five to seven years. That's another category that hasn't even started to emerge yet, but that we see, we're starting with the commercial intelligence platform, because it is the DNA of that iOS. What are those conversations like with customers when you paint that big picture? Because that's a big vision, and I could imagine it sounds a little bit scary. Even just listening to it myself as founder of an agency, I think, wow, sounds like a lot of change, change is scary. Do you go that big or do you ground it a little bit more and talk about like smaller examples, smaller use cases, get them bought and then hit them with that big vision? Brett, I love that question, because it goes back to your last question, which is, this is why I start with questions, and I learn the person before I go. There are some visionaries that want to see that big picture before you paint the picture of the immediate now years out can have an impact. There are others that don't even want to know that vision, and they need something tangible that they can imagine, right? Now, here's where I bring the two worlds together. If you want to make that vision real, I want you to think about Amazon supply chain. How does Amazon run their business? Well, they are so close to the market. They have so much customer data. They are able to, in real time, orchestrate all of the operations of their business. Where are things warehouse? What does the supply chain look like? What is the demand and how do I source product? How do I deliver it? To optimize for the customer experience, the revenue and the profit, and they are intelligently, automatically, managing that supply chain, right? That's real. That's not scary. We know that's how they operate, right? But that will be applied to your business, right? And so that's the jump we have to take. What people need to get there, you're paralyzed if you just think about that vision. What people need is, what's the first step? The first step is, let me help you understand your customers, and what they think about your commercial relationships with them, and let me serve up to you, the intelligence around what do you need to do? What execution do you need to drive in your firm to strengthen that relationship, to grow that relationship? And that's why we're starting there is because it's a pragmatic reality that is a very real pain that people absolutely want to solve. And oh, by the way, it's not so scary to solve. Let's talk a little bit about marketing here before we wrap. I know we're almost up on time. When it comes to marketing, how would you summarize the approach and philosophy that you're currently taking? Yeah. So we launched the company and the first week we launched our podcast. And here's why. We saw a blue ocean. We don't think there are other firms that are focused on enterprise AI adoption specifically at the operational and orchestration level. Most firms that are building products today are focused on the execution of work, not the orchestration of work. And we saw that as a white space and wanted to claim that spot. And so we launched our podcast Thought Leadership from day one. Really fun anecdote. Our very first paid customer came as an inbound lead that found us through our podcast, right? And so we were speaking into a void in the market. And we very deliberately said we want to have the first mover advantage. And so we're going to go hard and fast towards that. That I think is the mindset. I think what you have to be careful in that is you have to make sure it drives real feedback and real product. And you have to make sure that you are able to back that up, right? Luckily with some of the background that I've had in my network, we were able to pull together a team to execute on what we learned very, very quickly to allow us to do that. But it has worked really, really well for us, for sure. I mean, as a podcast production studio that sells to tech companies, this makes me very happy to hear. Declarify for the audience. We don't do your podcast. That's done independently. That's very interesting to hear. And obviously that's something that we preach to a lot of our clients. And we see clients doing that. They are starting with the podcast. They're seeing it, move the needle. I know you touched on it there a little bit, but let's talk about ROI. How are you going to think about ROI 24 months from now with the podcast? Is it X number of deals? Like, how do you quantify the value that's going to come from that versus the time investment that you're going to have to make? Yeah, you know, as you know, podcast metrics are very, very difficult. It's not as measurable as I'd like it to be. So we look at our thought leadership as a whole as the top of the funnel. And we're looking at our holistic pipeline, right? So we have, I can tell you, as of this week, we have 86 actively engaged leads in our lead funnel that have met with us at least once, if not multiple times, that we're working to our qualified deal, right? For a nine month old company, that's pretty darn good. So to me, that's the metric. I think people over kind of report and try to do the math on exactly tying it back to the podcast. I can't do that, but I'm looking at the holistic marketing effort. And what is it bringing in what conversations is it allowing you to have? Amazing. I love it. All right, David, we are up on time. Unfortunately, I could keep you here for another two or three hours and ask you more questions, but maybe we can save that for around two Sunday. Before we wrap up here, if there's any founders that are listening in, they want to follow along with your journey, where should they go? Yeah, check us out at knownwell.com. You can also do a search for the AI know-how podcast that we were just talking about AI know-how by known well. And you can find me personally at DavidDowulf.com. Amazing. David, thank you so much for taking the time. Hey, Brett, this was a ton of fun. Thanks so much. This episode of Category Visionaries is brought to you by Frontlines Media, Silicon Valley's leading podcast production studio. If you're a B2B founder looking for help launching and growing your own podcast, visit frontlines.io/podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening and we'll catch you on the next episode.
