3 - From Zero to Millions: The Rilla Story with Sebastian Jimenez

Speaker 5 0:23

Hello, everyone, and welcome back to Selling in the Dwelling. This is actually podcast number three today, and I am your host, Allan Langer. And I gotta tell you, I've kind of been setting the bar pretty high for these first two podcasts, and now the bar is even going an inch higher for today's guest because you're gonna be pretty excited who I've got lined up. But before I get to my awesome guest today, just two quick things. One, the website is sellinginthedwelling.com. So visit that for the website for the podcast. And also my title sponsor, can't forget my good friends at Paradigm Vendo, which is an amazing digital platform that takes you from the appointment to the contract all in one place. It's myparadigm.com. Visit them. You won't be sorry. So I talked about raising the bar. Well, we had our first two guests were pretty high-end CEOs, and now I've got another one, Sebastian Jimenez from Rilla. Sebastian, thank you for joining me, my friend. How are you?

Speaker 1 1:20

What's going on, man? It was great seeing you at the Masters a couple of weeks ago. Everybody was raving about your uh speech, your talk. And uh yeah, man, it was great to see you there and great to be here.

Speaker 5 1:31

I tell you, I tell you what, it it's my favorite event. It's become my favorite event. I've been to two of them now, and I can't wait to keep going. But you guys put on quite a show. It's really, really something. And for those of us in the audience, or for those of you in the audience who have not been, go to the Rilla Masters next year. I'm telling you, if you're gonna go to one event, go to that one.

Speaker 1 1:51

It's like Disneyland for sales. That's what people kept saying. We did it.

Speaker 1:54

I mean, Alan, you saw it this year. We brought Bruce Buffer. We had like all this, like you know Coach K, Pat Riley. We really went all out. We spent a whole lot of money on it. So, you know, quite a bit.

Speaker 5 2:04

Yeah, I'm sure it wasn't it wasn't expensive. Well, God forbid Sebastian has just a normal guy introducing people. No, he gets Bruce Buffer in there to do the introduction. So pretty crazy stuff. Anyway, Sebastian, let's get into it. I'm fascinated by your journey because, you know, I'm a lot older than you are. I love to see young entrepreneur entrepreneurs do what you've done. You're an NYU grad and you graduated in 2018, right? Yes, sir. 2018.

Speaker 1 2:30

I'm 29 years old. Thank you for reminding me of my my age, Alan. No, that's terrific.

Speaker 5 2:35

I wish I was 29 years old, trust me.

Speaker 1 2:38

29 is like uh it I'm like one of the oldest people at Rilla. They clown me for this because we have like a bunch of 23, 24 year olds. And it's like it's like Peter Pan and the lost boys in Neverland. It's just like a bunch of kids running around building stuff here at Rilla.

Speaker 5 2:51

So running around and building some amazing stuff for sure. So tell me a little bit about I read and I heard that you actually wanted to be a stand-up comic before you switched gears and did this.

Speaker 1 3:03

I went to NYU. When you go to NYU, you're just trying to piss off your parents in whatever way you can. So I was like, how can I piss off my parents? I'm like, let me be an unemployed stand-up comic. Because my mom was like, You're just a clown. You're just an unemployed clown. And then at some point I decided, listen, my parents understand what a comedian is, but they have no idea what a tech founder does. So I'm gonna go from unemployed clown to unemployed tech founder because they're gonna get more pissed off because they don't know what that means.

Speaker 2 3:29

Because they don't even know what it is.

Speaker 1 3:32

And so uh, so I went to NYU from 2014, 2018. I'm from the Dominican Republic. I grew up in the Dominican Republic when I was until I was 17 years old. I finished my high school in Miami. That's where I met two of my co-founders in this Jesuit school in Miami. My parents were like, You're such an annoying child. We're gonna send you to this Catholic school, all boy Jesuit school, uh, because the priests are gonna do something with your demons and it's gonna fix it. And it didn't fix it. It didn't fix it. After that, I went to NYU. And at NYU, it's a very weird college because you go there, there's no campus. I remember the first time I took a tour at NYU. It's like one of these kids giving you the tour and be like, and here we have Washington Square Park, and you're just in the park. And then a homeless guy walks in, he starts yelling all sorts of crazy stuff. And I'm like, bro, is this part of the you know, like, oh no, he goes to Tish, he's just doing performance art. Tish is the art school. And I was like, okay, got it. When you go to this college, it's like one of these colleges that forces you to kind of like find your own way in life because it's either you do that or you get depressed and you're sad, you're like, oh my God, I have no friends. So you have to find your own way and figure out what you're gonna do because you're basically an 18-year-old living in New York City. And the way I did that was I started, I was always kind of like my family. We always loved making making people laugh. And I was like, let me try stand-up comedy. Stand up is an amazing art form to practice. And I did stand-up comedy throughout all four years of college. I never went to class. Once I got hooked on it, I was like, I'm never going back. I'm just gonna be a professional stand-up comedian. I never went to class. It says in my degree, I studied academatrics or some other crap. I have no idea. I graduated college not knowing how to read a balance sheet. I went to the business school. I have no idea how to read a balance sheet when I graduated. And what I did know is I did know how to make great jokes. I did know how to make great stand-up because I was doing stand-up seven days a week, six times a day. New York City is one of the best cities in the world to do stand-up because you have a stand-up opportunity literally in every bar in the in the West Village, Lower East Side. So I was just doing stand-up every day. That was such a great thing that happened to me because everything I learned about business that I practice today, I learned it from stand-up comedy. Like people think that starting a business is a lot like managing a business. So they go, like, oh, let me get an MDA, a master's business administration, too, to learn how to manage a business. Well, starting a business is not like managing a business. Managing a business, you have to get PLs, you have to structure your things, you have to operationalize. Starting a business is a lot like creating something out of nothing. And it's more like an art. And so you have to learn how to create things. And stand-up is a really great art form to learn this because it's one of the few art forms where you have to practice in front of a crowd. So in painting, writing, poetry, music, you can actually bullshit yourself and you can stay in your room alone most of the time until the thing's ready. In stand up, you don't have that luxury. As soon as you have an idea, you write it down, you have to go and tell people the joke because you don't know if the joke's gonna be funny until you tell people the joke. And you can't practice alone in your room. You can't be like, how's it going, guys? Like talking to yourself in the mirror. It doesn't work. So you have to go to a show, you have to do your stand-up. The best comedians bomb, they fail over 50% of the time because they're constantly trying out new jokes and they don't know what's gonna work or not. It's like, you know, you don't know. And so what it forces you to do is it forces you to not be afraid of failure. Failure is actually your teacher. It's a teacher that you have to learn from, not your enemy. You learn that in stand-up, you learn not to be afraid, you learn not to be embarrassed, you lose all shade. And when you lose that and failure becomes your teacher, then that's when the real creative process starts. Because you have an idea, that's just the beginning, and you launch the idea very quickly, and then you fail. And then you say, okay, that joke was funny somewhere, but I couldn't land it. Was it the setup? Was it the punchline? Was it the way that I held the silence at the end? Was it my tone of my voice? Was it the way I held the mic? Was it the way I leaned in or leaned back? And then you start trying the same joke over and over and over and over again until you find that perfect combination and people start laughing. And and so go to stand up because it's binary. You know, it's not like these modern artists that you could just put a toilet in the MoMA and say it's a subject, it's modern art, it's a statement. No, it's not a statement, it's a urinal, and it smells, it smells like taste, and you just put it right there in the middle of the room. That's not a stand-up is very simple. Did they laugh or did they not laugh? And if they laugh, you it worked. And if they didn't laugh, they didn't work. And so it's such a great art form because it really, there's no escape, it's just you up there, and you have to figure it out by failing over and over again. And starting a business and especially a tech company is exactly like that. There is no bullshitting. It either works and people want to use it and it brings them value or it doesn't, and it's binary. And it's not bullshit. It's just like, oh, it's subjective. It's not subjective. Are people gonna keep coming back and use your product every day? Did you find product marketing or not? A lot of people think that the biggest problems in the world could be solved if you just sat the smartest people in a room and they just started pontificating about how to solve the problems in the world. Like, they think you're like, oh, the United Nations, you're gonna get people together and we're gonna solve the problems. That's not how it works. True intelligence is not in your head, it's in the world. You have to, the scientific method is you have to go and try something. You experiment, you fail, and then you learn from the failure, and you do it again slightly differently. So, starting a business, you can't just think. You have to go and launch something, put it in the teams of people. And when I was a junior in college, I took an internship with this Forbes writer who wanted to interview a bunch of tech founders for his tech founder series. And I didn't know anything about tech. Again, I grew up in the DR. I didn't know. I thought that the richest guy in the world was Donald Trump because he beat Vince McMahon in WrestleMania 23 for Battle of the Billionaires. I didn't know who Steve Jobs was. I didn't know who Bill Gates was. I didn't know tech was an industry. But when I started interviewing these tech founders for this internship, and I took the job to practice my writing, the the way they described building their companies was so similar to what I was doing in stand-up. It's like you have an idea, you launch it, you fail, and then you from the failure, you start learning until you find product market fit. And that's the process. So I thought, well, maybe I could do that too, even though I don't know anything about business. I don't know, I don't know how to code. I'm not a technical person, I'm not an engineer. In my head, Alan, to be truthful with you, because it was 2018 when I started my first company out of college. It was two choices for me. Do I do tech or do I do stand-up? And in my head, Alan, I was like, well, I'm kind of confident that if I do stand-up, I'm just gonna keep doing stand-up forever. Because I love stand-up. I was already uh good at it. I was like confident that I could have made it as a comedian. And with tech, I was like, I don't know anything about tech. I don't know how to code, and I don't know even about business. So what's probably gonna happen is I'm gonna do this, I'm gonna fail in six months, and then I'll have a great story to tell when I come back to be a stand-up comedian. And very unfortunately for me, Alan, we ended up being wildly successful, and here we are, you know, eight years later. I'm still I'm still here.

Speaker 5 10:30

Let me let me stop you there, because that that's a actually a fascinating story, and I've never actually heard anyone in business sake put the correlation of business to stand-up comedy, but but the way you described it is is brilliant. But here here's the thing I always look at when when I see companies is where did the idea come from? Like Elizabeth Gilbert wrote the very famous book, uh Eat Prey Love, but a book that not too many people know about is called Big Magic. And one of the things in Big Magic, you should read it actually, very, very good book. She talks about the concept of ideas, and her concept is ideas are floating around and they land in people's heads. They just land. And the idea gives that person like 24 hours to do something with the idea. And if they don't do anything with it, it goes off back into the ether and lands on someone else's head. So I think I joked with you the very first time I met you that you stole my idea because when smartphones first came out and I saw the record option, I would go into homes when I was selling, hit record, and put it in my pocket. And that was it. And I got better at sales because I listened to my conversation. And then you took that very same idea. So that idea, like, well, he's not doing anything with it, flew off and landed on your head. How did you get the idea of Rilla?

Speaker 1 11:36

Yeah, and for folks who don't know Rilla, Rilla, we are the leading AI coaching software for in-person sales. So think of like people who sell windows and baths and kitchens and home services and homes and anybody who's selling in person. They record their conversations, we use AI to transcribe analyze, give them feedback to help them prove kind of like what Alan was doing in 2009 with the iPhone with a little bit of AI sprinkled in there. It's like stand-up. Every great joke starts as a bad joke. Okay. And uh in my first company was a bad joke. It was like two poles and a Dominican walk into a startup accelerator and come up with an idea to fix democracy with an app. That was my first idea. It was a really stupid idea. But our idea was, Alan, again, all of us were immigrants, none of us could vote. But we were like, damn, man, when people are making lines to vote, that's kind of annoying that they have to go there in a line and they got to vote. What if we had an app for voting where people could just vote on an app? Like, oh, that's wouldn't that be great? We like got into an incubator at my college and we got we didn't get that much for it, you got like $10,000. And in two weeks, we realized, um, that idea for the voting app? That idea for the voting.

Speaker 12:44

In two weeks, we were just like out there talking, they were waiting for an update from us, this accelerator. And I had to do the update. I was like, guys, we just realized that this whole enterprise doesn't work out on account that this idea is illegal.

Speaker 2 12:57

Exactly. That's hilarious. But we'll keep your $10,000.

Speaker 13:07

Be like, yeah, I'm sorry, and you should have checked this, but you know, I I don't know, but it's illegal, guys. You can't do it, you can't really vote on a nap, it's not possible. So that was the bad idea.

Speaker 1 13:18

And so we were like, okay, what do we do? In 2018, tech for politics was hot because of Bernie and Trump and like grassroots movements. We started with a political canvassing tool to help people go door knocking to do political canvassing, right? And that was a really bad idea. I learned this thing, Alan, that I have a different take, a slightly different take on what makes great companies. The idea is not the most valuable thing. It's like every great joke, it starts as a bad joke. So it's it's the process by which you refine the idea over time. And in companies, there's this thing in startups that we call product market fit. And that's the miracle. And in fact, there's like there's a series of miracles that you have to achieve in order to find product market fit. And product market fit is you know, 99% of new startups, new companies fail. Product market fit is when you can actually create a product that has actual demand that people need, and they just they just pull it out of your hands. And in tech, that usually looks like hypergrowth, right? Which is what Rilla eventually got to. But remember, Rilla started selling in 2022, but we started a company in 2019. So the first three years, we made no money. It was like complete zero. Oh, wow. The thing that I learned from the previous company is that the most important thing in finding product market fit is actually not the product, it's actually finding or creating a great market. And that's the story of every great business ever. And then the market, if you have an amazing market with a crappy product and a crappy team, it doesn't matter because the market's gonna win. The market's gonna pull that crappy product up and it's gonna become a great product. If you have a horrible market, a really crappy market that doesn't have a lot of demand, that's not a great market, but you have a great product and a great team, the market's gonna win and it's gonna pull this great product and this great team down, and the company's gonna fail. For instance, Alan, do you know of this company called Webban? WetBan. Webband.com. No. But you know about this company called Amazon. I take it. Correct. You know about Amazon, but you don't know about webband because of markets. Webband was doing the exact same thing that Amazon was doing in the 1990s. They were a dot com website where people could buy things online. It looked very similar to Amazon. You would click a thing, search it, somebody would deliver it to your house or to the local kind of like whatever delivery stations that you had. The only difference is Amazon was selling books in the 1990s, and Webband was selling food. Selling food online in the 1990s was a horrible market. Why? Because the internet was a very slow technology. It took like two to three weeks to get something delivered. It was really expensive because we had none of the fulfillment centers, none of the supply chain, none of the efficiencies that we created in the last 30 years. Yeah. So it was very expensive to order something online, more expensive than going to the retail store. It was inconvenient because it couldn't get delivered to your house and your doorstep. You had to go, like, we didn't have the infrastructure for last mile delivery because the mailman couldn't carry pack because they were carrying mail to like throw it in the you literally had to go like out of your house to pick up your pack. So it wasn't convenient. So then you think of the market of food. Food is the most price-sensitive, time-sensitive. You can't wait two weeks to get your food you need to eat. No, you're hungry. Price, like, dude, you think about like when the prices of eggs go up, people start talking about the Biden inflation economy, the Donald Trump inflation. That's the right 50 cents. Like, and people go crazy when the price of food goes up. And then it's convenience. Like, you want convenience. You want like the convenience store is a concept that exists because people want convenience. That's why it failed. There was nothing that wet band could do to fix that market problem. Amazon and Jeff Bezos, you hear his interviews early on, he didn't pick books randomly. He was an insanely shrewd, brilliant businessman. And he said, What is a market that actually works for the technology of the internet? He's like, the internet has all these things that are really crappy about it, but it has one thing better than any other channel, and that is selection. When you go to an Amazon or any website, you can order anything because you're not limited by inventory. And Jeff Bezos realized there is no other category in the world that has more items in that category than books. At the time, there was like four million books in circulation. There's not four million different types of potatoes or four million different types of apples. There's four million different books. And he's like, I'm gonna go after the category where people are willing to wait a little bit of time to get it, they're willing to pay a premium, they're willing to be inconvenienced by it because they want the right one. They want that book that's not in the Barnes and Noble store. So they started selling books to the top 1% of book readers. From that early market, Amazon was able to garner traction, garner money, garner marketing, brand, investment, and actually grow. And then over time, they started selling CDs and DVDs and software, which is very similar to books. Then they started selling toys against selection. People care about selection with toys because it varies all the time. Then they started selling clothing, and now they're selling food 30 years later. But it was a slow process to get there. It was like you had to start with the right market. So for Rilla, when I learned that, when I started selling technology to political campaigns, I realized this is a really crappy market. It doesn't matter what software I create. It doesn't matter if it's the best design software. If Steve Jobs and Steve Wazia got together and created the same app that I did, Alan, it didn't matter because it was gonna the political campaign market happens once every four years. They have no money, it's all volunteer work most of the time. Right, exactly. There's not that many of them. There's not that many political campaigns going on. It's just like a crappy market. And me, and I just learned that I was like, oh, the market matters. Because then what I did, Alan, is that company, we started selling the same canvassing technology that we had created. We started selling it to companies that were doing in-person field marketing. So you think of Red Bull, Coca-Cola, Heineken. They send out brand ambassadors to colleges and events and they do field marketing. They were starting to use our software to actually do those events and run those events. And my company went from, we literally made like, I think it was like $300 when we were selling the things to political campaigns. We went from $300 in like five months when we started selling to businesses that were doing field marketing. We went from zero to $100,000 in sales. It was the same crappy product, it was the same thing. But we just like the market matters more than anything when you're trying to create a new business. And so the idea for Rilla came when I was doing this company. They were you, these companies were using my software to do their events, to do their field marketing. And we were making money, we were growing. But one thing I learned about myself, Alan, is that I really didn't get into this because of the money. I got into it because I got hooked by this bug of creativity and like trying to make things out of nothing and like do things that nobody has done before. Because that's what I used to do in standup. But with this company, I was like, this company's making money, but I don't think it's a revolutionary product. I don't think we're gonna change the world with this. So I was looking for the next idea. And one day I was talking to the field marketing manager at Heineken, and essentially we did some math and we figured out that Heineken was talking to like four million people every single month, face to face, through these field marketing activations all across the country. It was like, you know, people go out, they go to the booth, they talk to somebody who has some seltzer that Heineken's trying to market. They try the seltzer, they say what they think. It's like a minute conversation, they leave. And I was like, wow, four million conversations, that's a big number. I figured out that Heineken was spending like $100 million in social media analytics, surveys, focus groups, market research from people like Nielsen, Tantar, IRI, Qualtrics, Medallia. And they were only getting like 500,000 interactions for consumers from online sources. So I thought, how is it possible that Heineken has eight times the amount of interactions with consumers offline face-to-face that they do online? Well, it makes sense because everything they sell is in person. They sell in person. Most of commerce in America happens in person. 85% of commerce happens in person, a human being talking to another, trying to make a transaction. So I thought, if Heineken has four million conversations, how many conversations does Coca-Cola have? How many conversations does uh Molson tours have? Red Bull. What if we get out of field marketing? They have salespeople that go into the restaurants and the bars and the stores to sell. What if we got out of food and beverage and we go into people that sell windows, siding, flooring, doors, HIV, clumbing, electrical, roofing, solar? What about people who sell uh medical devices, pharmaceuticals? And then I realized, oh wow, the largest segment of employment in the private sector in the United States and across the developed world is sales, in person salespeople. And there's 12 million of them in the United States, and they have 10 billion conversations with consumers every single month. Nobody's capturing them. You were capturing some of them with your iPhone, but most nobody was capturing these conversations and doing anything with it. So I'd Thought, what if we could capture these billions of conversations and we could make offline commerce, in-person commerce as searchable and easy to understand as Google once did for the web? Because that's what we wanted to do is index the offline conversations and index offline commerce so every business in the world could understand their customers as well as Google and Amazon uh did and do. That was the vision for Rilla. And that was 2019. And like I said, it took us three years, Alan, three years of trial and error trying different markets. We tried like 27 different market verticals before we landed in our first market, which is home remodeling, which is how we met. And when we landed in home remodeling, everything that's when, again, you have to find the best market. And when we found that best early market that that needed our product or the concept that we were selling, my God, people started pulling it out of our hands. And that's when, you know, in 2022, we went from like zero to tens of millions of dollars. We're about to cross like hundreds of millions of dollars in annual recurring revenue in a matter of like three, four years.

Speaker 5 23:02

I did my research here and you went from zero to fourteen million in your first two years, which was literally one of the fastest startups of all time. And to put it in context, Apple went from zero to eight million in the same timeframe, Salesforce zero to five, and Amazon zero to fifteen. So you beat those three big boys as far as what you predict.

Speaker 23:21

I didn't beat Amazon. I didn't beat Amazon. Amazon was Amazon was a little Amazon was 15, I was 14. So Amazon was right ahead.

Speaker 5 23:27

Oh, you didn't beat. Okay, that's right. You're right. Okay. So I'll give you a break on not beating Amazon by one million. But this is this is so fascinating to me because you, you know, you take this idea, you run with it, and you're right. You had to to do three years of trial and error and get it correct. You talk very fast. I'm gonna actually go back up because you tried to explain what Rilla is for the people who never heard of you, which not that many, but Rilla is this amazing software that records real life sales conversations. You in the home with uh your window salesman, you're recording the conversation, and then it analyzes with AI. That's the basic, like, there's the definition. Hey, dwellers, quick break. Hey, did you know that the closing percentages for in-home sales has been dropping consistently over the last 10 years? It's really crazy, and there's a lot of reasons for it. But one of them is reps have so much to do in the house because there's so many different platforms that you're jumping back and forth all the time. Well, my title sponsor, Paradigm Vendo, takes care of that. In one digital platform, you can go from initial appointment right to final sale and signatures by visiting just their platform. It's amazing. You gotta check them out. It's paradigmvendo.com forward slash dwelling, par-a-r-a-d-i-gm vendo.com forward slash dwelling, because your reps need to give the homeowners a great experience in the house, and jumping around doesn't do that. Visit paradigmvendo.com forward slash dwelling and take care of the experience your reps are giving in the house. Let's fast forward now. Now you got the company started. You got it, you got a couple of co-founders. I remember you a guy named Mikey that came up in my research, is you is your partner there. But talk about as a CEO, the hiring process. And you mentioned you got a lot of young people. You seem to have like gravitated toward young, hungry, brilliant people rather than degrees. What do you look for when you uh when you hire someone, especially on the on the side where they're developing the software?

Speaker 1 25:26

Some of the kids that we hire like come from the best universities like Stanford and MIT and Penn. We get a lot of the New York universities like Columbia and Cordell, but we also have kids that didn't go to college, like uh Daniel Ramsgart, who built the roleplay product that you saw at the Masters where you can now roleplay. He was in amazing. I think he was in UNC and he dropped out and came to work at Rilla. He's like, you know, the world's moving very fast and college is moving very slow. I'm just gonna go in and go into it. And uh and Aton, who's one of our salespeople, he's 19. He just got he literally joined Rilla, and the in the week he joined, he was like dressed up in a suit and like, where are you going? He's like, I'm going to prompt. And so we don't have anything against degrees, but we don't care that much of it, like, we just don't care about degrees. There's two things that you need to have to get hired at Rilla. Really, that's it. Two things. You have to have complete alignment, complete alignment with our cultural principles. And number two, especially because you hire a lot of young people, but even this applies to more experienced people that are there in their career, you have to have shown some evidence that you have exceptional ability at something. We only want to hire exceptional people. Exceptional people do exceptional things. That's why they're exceptional. So if we're talking to you and we haven't seen something that you've done in your life that is exceptional, can be considered exceptional, we don't hire you. And that's that's the bar. The engineers that we hire, right? Like Daniel, they're usually working on their own startups, their own side projects, and they have not insane success because again, they're very early in their careers. Mark Zuckerberg did not have the insane success when he was, you know, 16, you know, 17. He started getting successful when he was 20, 21, right? So so if you're interviewing people that are like early, they might not have had that big break, but they have some evidence that they're exceptional people. Like Daniel, we were just talking about, he was working on his own startup. In fact, they had worked on two startups that have failed. And when you talk to him about his startups, it was the same thing that it's like talking to me. Like you talk you're like, I made this decision and I failed, and and I went over here and I got a little bit of traction over here. And I was like, oh my God, this person's on this flow that we want. This person's gonna be exceptional for sure, because they have the evidence for it. In sales, it's either you were we hire a lot of exceptional people that they're D1 athletes. That's evidence of exceptional ability that you're doing something most people, like 99% of people in the world are not doing. You're so excellent at your craft that you became a D1 athlete, which is really hard. People, like some of the best athletes that we've hired are literally like if you had an Olympian, like somebody who was going to the Olympics, like qualifying for the Olympics. We had national champions for their team and like rowing and stuff like that. So we have a lot of like really amazing athletes. Or in sales, it's somebody who had either exceptional ability in sales, like even early in their career, like somebody in college who took a summer job and worked in a solar company and was the top performer in that team, you know what I mean? In the summer, like we love that. And the other thing is are you in complete alignment with our cultural principles? Which we have 10 and we ask interview questions that are geared towards understanding if this person's aligned with our cultural principles.

Speaker 5 28:30

So you actually just segued into my next question. My question was, what are your core values? But tell me about, so I know you have 10, and you're not going to go through all 10, but give me some of your top two or three cultural principles that you're looking for.

Speaker 1 28:43

I'll tell you top four. So it's a top four is the overarching value is that we are trying to build a human reinforcement learner. That's what we're trying to do at Rilla. A reinforcement learning algorithm is what you see with AI products out there. That's how they learn. They learn through this mechanism called reinforcement learning. And in layman's terms, what the algorithm's doing is very simple. It's actually, I described what it's doing because that's what I did in stand-up. It doesn't know much about anything, it's not very intelligent. Like when people talk about these AI systems are very intelligent, if you were to measure them in IQ, they're not very intelligent in the traditional sense of like having IQ. But the reason they're able to do these amazing things is because what the algorithm does, it starts out very stupid. Like you see it playing a video game, it'll start making random choices. It'll like imagine playing Mario and it starts playing Mario and it kills itself. Like it just dies immediately because it doesn't know what it's doing. But every time the algorithm's programmed to say, hey, every time you fail, let's just not do that again. Do something different. Just don't do that thing that you did that led you to die or led you to failure. And it just, and it just does it again. And at first you see it, it's like, oh, this thing's an idiot. Like it doesn't know what it's doing. But then once it plays the game a million times over, holy crap, it starts beating the best human players ever. It starts beating the crap out of them. Not because it's smarter, but because it's literally seen. It's like Doctor Strange, it's seen every possible way to play this game. And it's impossible for you to beat it. It's just not possible. And that's what ChatGPT uses. And ChatGPT is trying to optimize from the user says this with the thumbs up or like this. So it doesn't want this. So it's like, oh, if I did this, let me not do that again. And let me try something else next time. That's AI. It's AI, it's a you can summarize it by reinforcing learning. It's in and it's just doing that principle. What I figured out, Alan, is that the way that AI is learning is also the best way for human beings to learn and the way that the best learners in history have learned. I read the biographies of Thomas Edison, Nikola Tesla, Elon Musk, Steve Jobs, Walt Disney, uh, Leonardo da Vinci, like a bunch. I love reading biographies of founders. I was trying to figure out what made these people so special. Was it that they were the most intelligent? No, they were really smart, but there were smarter people around them and smarter people uh competing against them, like that had higher IQ. Were they the most creative? Yes, they were the most creative, but they were not the most creative. Again, they had more creative people around them. Were they the most hardworking? They were hardworking, but they literally couldn't outwork everything. Like they there's limited hours in the day. So there were people in their companies that were working just as hard, people that were journalists and i bankers and lawyers that worked just as hard. So it's not, they were working hard, but they were not, that's not the thing that differentiated them. So the one thing that differentiated all these people is that they became these human reinforcement learners. They were not afraid of failure, they thought of failure as their teacher, and they would just try a lot of things. Edison, you know, 9,999 times to get the libel to work to it to find the one that did. And again, it's just like trying things for 10 years while dissing. You see the early animations of Mickey Mouse. It started as a rabbit, I think. It was a cat and it turned to a rabbit and it was a mouse. And then it's just like trial and error and trial and error. And these people are just the best experimenters, the best learners of all time, the best students of failure. And so we want to create that at Rilla. We want to create an organization that the individuals are leaning towards failure. They're leaning towards failing really fast and experimenting really fast, not ashamed of it, but excited about it. It's like, well, what am I gonna learn from this? And so the entire set of cultural principles that we have is geared towards creating that. So creating an organization that's an organization, we move really fast to fail and kind of learn from it. The first principle is customer obsession. The reinforcement learner algorithm needs to know what it's optimizing for. Because it's a really stupid algorithm, you can only give it one goal. You have to be like, hey, beat the game or get the user to say thumbs up. So I really say, like, you have to say, what is your unique goal? And then everything falls from there. What are we trying to optimize? We are not trying to optimize to be like the most famous tech company that's featured on all the tech magazines and on Forbes and all that stuff. We don't care about that. That's not the algorithm. We don't care about our valuation. That's not the algorithm. I mean, are we do we care about revenue? Yes, we care about revenue, but that's not the main goal. That's a subset of the main goal, revenue. Is it profits? No, it's not profits. Profits is not. Uh, I remember Milton Friedman, Professor Friedman from the University of Chicago, said the only goal of every company, enterprise in America is to maximize shareholder value.

Speaker 33:24

That is the only goal of any company in America. I don't know about you, Alan, but I've never in my life woke up to be like, I am so excited today to maximize shareholder value. That's not the goal.

Speaker 1 33:36

And yes, we're gonna maximize shareholder value, but but that's not the main goal. We're not life is too short to be living to maximize shareholder value. That's not the that is not the goal of the company. We are trying to solve customer pains. That's it. If we are better at solving our customers' pains than everybody else, we are gonna win. And if we can solve more pains, we can solve those betters, then everything, everything, everything is gonna solve itself. It's you're gonna get revenue, you're gonna get growth, you're gonna get profits, shareholders. So, what it means, Alan, is because we're not a revenue-obsessed company or a profit-obsessed company, we're a customer-obsessed company. What it means is our sales team doesn't just say yes to every customer. When we started the company, we were very clear that the market we were going after was home remodeling, not every sales market, just home remodeling, because we we knew that this was the market and we were gonna do everything in our power as a tiny company to put all our resources to making these. It's a tiny market compared to all the 12 million outside salespeople. But we're gonna give it our all to make sure that the people who give us their money, that they're so happy because we're solving their problems. We're not gonna solve too many problems, we're gonna solve one problem, the virtual ride-along, we're gonna help managers do ride-alongs virtually instead of physically. That's it. And still today, we focus really just on a few set of markets. So when a when a customer could come in and it was not a home remodeling customer, our sales team was, they were literally saying no. And our sales team, when they started here, I remember Matt Folito, our first sales hire. He started, and there was a bunch of people that came into the pipeline that were not home remodelers. And Matt Felito was like, hey, man, this guy wants to do it. I'm about to get my first sale. And I was like, Oh, no, no, you can't sell that. It was like a and it was like a it was like a pharma company, like a medical company, which we now, you know, probably might actually sell. But at the time we were not selling that. And he was like, and he and he looks at me like, like, what do you what do you mean, man? Like, what do you mean I can't sell? You want to buy it? And I'm like, oh no, no, you can't sell that because it's not in the it's not in the market that we're going after. And he goes, Well, what's my job then? And I was like, Oh, you're in sales. And he was like, What?

Speaker 35:40

You've never heard that. Like, how am I in sales and I I can't sell it?

Speaker 1 35:44

And I can't sell. I was like, no, no, you know what I'm saying. The goal is not to get money, the goal is to solve your pains. And at the time, we we I knew that we weren't gonna do a good job at solving your pains. I do a good job at solving your pains, you were a home remandler. That's the main principle is customer obsession, that's the algorithm. And then everything falls from there. So, yes, can we get revenue as long as it's aligned with solving the customer's pains? And the second principle is moving insanely fast. The customer's our goal, our tool is our weapon is speed. And the third principle is if you want to move really fast, you have to work insanely hard and you have to be really focused. So, our third principle is maximize your product, your productive time. On average, people at Rilla are working anywhere from 65 to 80 hours a week. So, minimum at Rilla is like people are working 12 hours a day. We work six days a week at Rilla, like all of our meetings, our sales meetings happen on Sundays. We work from Sundays to Fridays. We work a lot because we understand that true learning is not in our head. So we don't believe in this mantra, oh, work smart, not hard. We believe the harder you work, the smarter you will become at your work because you're gonna have more trial and error, more experimentation. And we've seen that work really well at Rilla. And so there was a great saying by this founder, Edwin Land, who was a founder of Polaroid. He said, there's no problem in the world that cannot be solved with without using long periods of intense concentration. And we believe that really if you concentrate on a problem for a long period of time, you're just gonna solve a problem. It's inevitable. And so we we work insanely hard, we work for a lot of hours, and we are really focused within those hours. So we try to maximize flow and productivity of our people. And uh, those are the three principles, and I can keep going.

Speaker 5 37:21

But I absolutely love you. Might be the first CEO I've ever heard that said, you want your people to fail. You actually, your you quote, you say, we move really fast to failure because you want them to keep trying things and fail at them so they can get better. That concept right there is worth the waiting goal. That's brilliant.

Speaker 1 37:38

I mean, in sales, uh Alan, we we follow that principle. Like, like Conrad and Amir are um and and and some others, but I'm gonna talk about them. They started Rilla was their first job out of college. They were 22 and 23 when they started Rilla. Uh Amir uh worked on a fake startup for a while before like for like six months before starting a real. He was like, he was selling toilets with his buddy. It's such it's such a great story. It's such a great story. I'm not gonna tell the story now, but it's such a great story. And Conrad was playing lacrosse. He would be played lacrosse at Holy Cross. We put them, I mean, we have an insane training. I mean, we're we have a sales coaching training product, so we really care about sales training and coaching, I really. And and so, and we use our own product, by the way, on our all of our salespeople. Conor and Amir started at really 2023. So it's been about two and a half years since they've been here. Not even. When they started, we just literally we trained them and we threw them in demos immediately. We threw them to take customer calls immediately. By the end of year one, Twin and Amir each had taken over 1,000 sales calls with customers. In every single one of those sales calls, they had gotten feedback from me and they had gotten feedback from Matt Valito, their sales manager, who was our first sales hire. Every single call that they did, they had they had like literally two pieces of feedback. So it was like 2,000 pieces of feedback that they have got and multiple feedback per call sometimes. And it was using real life, reviewing their calls every day. Conrad and Amir, their first year, their first half year, they closed like a couple hundred grand. Second year, Conrad and Amir, they closed like four or five million dollars. And last year they closed almost $10 million, which was their between the two of them. No, no, no, each, each, each, each. Oh, each. Oh, really? So so and in software, that's just that's just like a bananas thing. Like the average enterprise rep, they're closing more revenue than people that have 10, 20 years of experience. And again, they've only been here for two and a half years, like out of college, they're they're 24 and 25 now. And the only way you're able to produce that where you're able it is because we have this insane culture, the reinforcement learner that says you're gonna learn so fast because you're gonna fail. And we're gonna tell you when you fail. And we love it when you get because we're gonna tell you why. And and you're gonna learn and then you're gonna get better and just like a little bit better every day. And it and it never stops. And there's another principle we had, it's called infinite learning. The only thing that's infinite, like that human beings have figured out that's that infinite marginal returns that doesn't diminish over time is learning. The more you learn, the more likely you are to learn new things. That's why technology is so so fascinating to me because you know, other things they suffer from diminishing marginal returns, right? Like, but technology, when Steve Jobs came out with the iPhone, it was like exponential. It was like, oh, the iPhone comes out and ergo, you have Instacart, you have Instagram, you have Snapchat, you have Uber, you have Rilla, you have all these startups that exist because the iPhone, ChatGPG comes out and you see like an insane wave of startups. So technology is just human beings learning how to do things better. And the same thing in companies, we don't believe that there's a cap on learning. So with Conor and Amir, the goals keep getting higher and higher because it's like, hey, you did almost 10 million last year, now you need to do 20, now you need to do 30. Now you need to do and so that that's the only way we're able to do that.

Speaker 5 40:44

You literally just threw the sales industry on its ear because you just said, see, in sales, most salespeople are afraid to fail because their managers make them afraid to fail. Their leaders make them afraid to fail. They put them on pip plans and all these things, and they're afraid of failure. And you're like, no, let's embrace it. Go and fail and fail again because you're just gonna get better. That's a concept that needs to be really instilled in the whole sales industry overall, in my opinion.

Speaker 1 41:09

I mean, especially when people are getting started, right? The problem is, the problem is, Alan, is that I understand why people do this. I think I know why people do this, is because they have, they don't feel like they have any control on people's progression and people's learning. Why? You get a new, a new kid out of college, goes and starts selling windows, and what and what do people do? They just throw them out there and then they see who's gonna make it, right? Rilla, we're like a really high performance sports team. One of the things I've learned from all these coaches I've interviewed over the years, I've interviewed Nick Saban and Pat Riley and Coach Kay and all these amazing people. One thing that strikes me is that all they all focus on inputs. Like, what are the inputs? What are the things that you need to do every day so that you can get the results that you want? They don't focus on the outputs, they focus on the inputs. You gotta show up on taunt, you have to make the drills in practice, you have to stand in the in the right spot at the right time. You have to focus on doing the inputs right. And then the score takes care of itself. I really believe that, but the problem is that people don't track inputs. Because what happens is, you know, you get a class of 10, the turn rate is insane. It's like you you turn 80% of the people because 80% of the people don't make it, and people are like, oh, they were just not good enough. No, no, they weren't not good enough. There was no ability for them to learn anything because nobody was giving them feedback after every single call. Compare that to Rilla, we are very confident that we can make because the reason they don't take that chance is because they don't see that there's gonna be a return in the future. There's not gonna be a return in the future if you're not actually teaching your people what they're doing because you have no idea what they're doing. We at Rilla, we never had a situation where we didn't have Rilla. So we literally, every single time they had a call, we knew why it failed. We were like, it failed because of this, this, and this. You're still learning this part. So we're gonna focus on this part. You didn't do discovery properly. So next time, let's try to get discovery right a little bit better. It's not just like, oh, fail and keep failing and keep failing and keep failing and keep failing and keeping it.

Speaker 5 43:00

Oh, I understand that, right?

Speaker 1 43:01

It's fail forward and learn a little bit each time. And then if you can actually see the momentum, that's awesome. And most people can't see the momentum because they're not, they can't even see anything of what's happening. Matt Felito, when he started, and he's that we train everybody at Rilla, he started April 2023. First week, I put him on calls. I was like, Matt, I can show you the demo, I show him how to do it, and I put him on calls. I put him on some of the smaller customers, right, to lower the risk of him like doing it wrong. And you know, like it wasn't that big of a risk for the company. And and that's what I encourage people like think of your leads that are not as highly valuable as a company that you would maybe throw out anyways. Send those to the new people, you know what I mean? And put them out there. And and then Matt Felito first week, like first day, he did a horrible job in in everything, right? But I was like, let me focus on discovery. Because he didn't know anything, you don't know how to sell this product. And I go, okay, Matt Felito, you did a really bad job in discovery. Here's why you need to do this. And I gave him feedback. He did that part better the next day, and I was like, Oh my god, this guy. This guy's learning fast. This guy's amazing. This guy gets it. And the next day, because he solved that thing, I thought Matt Felito, you opened the call well, but you didn't do the setting the agenda. You need to fix that. Like that was wrong. And he's like, okay. And then he fixed it. And the next day he was doing something else wrong. And so every day, I'm I'm in my head, every day this kept happening. Matt Felito would do something wrong. I would tell him, This is what you did wrong. He would fix it. And I would move on to some other thing, like inputs, right? In my head, I'm like so excited. I'm like, this guy's so good. This guy's getting it. He's like learning. He's gonna get there like in no time. He's gonna be in his head. He's like, I'm gonna get fired. Because this guy keeps saying that I'm doing this.

Speaker 3 44:40

Exactly right. That's a sales people think. Yeah.

Speaker 1 44:42

And then I remember Friday the first week. He's like, and I'm like excited, I'm coaching, I'm like, Matt Felito, you're doing this wrong. This is like, you need to do it like this, this, this. He's like, he's like, listen, man, you can you can tell me if like you can fire me, dude. Like, I won't get mad. Like, if you need to fire me, just fire me. And I was like, hey, what? He's like, What?

Speaker 45:02

You said I was doing it wrong. I'm like, yeah, you're doing it wrong, but you're doing great. And he's like, what? I'm like, no, not playing. Great stuff. You're getting you'll get it. And at the end of the month, he closed like $100,000.

Speaker 1 45:16

Next month he closed $200,000, net $500,000 in a month. And so, you know?

Speaker 5 45:20

And now he's your director of sales, right? That's amazing. I'm going to get to the Ask Allen segment of the podcast. And the Ask Allen segment, the listeners send me a question. And if the questions are appropriate for my upcoming guests, I will ask that question to the guest. And that person who wrote the question gets a free copy of my book signed by me. And today we have a question that came in from Ben in Toledo, Ohio. This came in uh via email. And it said, Dear Alan, for your next CEO guest, that is you, Sebastian. I would like to know any books, podcasts, or any other resources that you would recommend to sharpen my leadership skills. So that was what Ben is asking Sebastian. How would you answer that?

Speaker 1 46:05

In terms of like actual skills and leadership, I would say extreme ownership from Jocko Willink with a great book on leadership skills, like very tactical book where you can actually learn leadership skills. There's a one that's uh it's a really boring book, but it's a really good book. It's written by Andy Reid, who was one of the CEOs of Intel, one of the best CEOs of Intel, one of the best CEOs ever. And he wrote this book, High Output Management. He was one of Steve Jobs' mentors. And it's like this seminal book on how do you actually manage people at a growing or at a larger scale organization. And what is the job of a manager? Like, how do you actually do the job of a manager? It's like a classic book that was recommended to all startup founders in the 1990s and to 2000s. Beyond that, if you just want to learn leadership, what I found to be the most helpful is just reading the best biographies of the best founders or the best leaders. That's not just skills. That's just like, when you read these biographies, it's so cool because you get to learn from people that are not even alive anymore. And you get to spend a lot of time with them and see how they were thinking. Like I found so much inspiration and perspective from reading like that biography. I I go back to like the biography of Walt Disney and Steve Jobs, and you just you learn about the problems they were facing. It makes your problems seem not that hard to solve. Right. You know, you read you read about Elon, and he's like, this guy's 2009, literally trying to save post Tesla and SpaceX sleeping on the factory floor, trying to send a rocket to space. And you're like, oh, okay, this lead problem that I have doesn't seem that, you know, doesn't seem that bad. And I found that to be super, super, super helpful, more helpful than any kind of like leadership book per se.

Speaker 5 47:59

Oh, that's great advice.

Speaker 1 48:00

And there's a great podcast that I think uh was it Ben?

Speaker 5 48:06

Uh yeah, Ben from Toledo. Yep.

Speaker 1 48:08

Uh Ben Ben, I think Ben should listen to this podcast. It's called the Founders Podcast by David Senra. He reads all the biographies of all the great founders and all the great leaders, and then he kind of gives everybody his summary. And I listen to that podcast in the mornings. And what I do is I listen to that podcast, and whoever biography I find interesting based on what I can hear from David, then I go and buy the biography and read it myself. If it's like a really interesting biography for me. And so uh, yeah, I found that to be super helpful.

Speaker 5 48:39

Well, before we sign off, I do also have to say congratulations. You are a new dad, uh a few weeks old, right? What what's what's uh what's the name? What what's uh tell us a little bit about the little girl, Zen. Oh my goodness. You're done for the rest of your finished. Uh I I am the father of two girls and uh girl dad.

Speaker 48:59

Oh, it's awesome.

Speaker 5 49:00

I am I uh I but my son is the oldest, and I have two girls, so yes, uh congratulations.

Speaker 1 49:06

I'm very excited, it's the best thing ever. It's so cool. I I love I love that baby. It's it's such she's like she was born like two and a half weeks ago, so yeah, I know, right right after Rilla, right?

Speaker 5 49:15

You like left you left the last day you got on a plane.

Speaker 1 49:18

My wife was due literally during the Rilla Master. So I she could have been born while I was on stage. I'm like, guys, I'm gonna be doing a rattle on from the delivery room. And so here's a good time.

Speaker 5 49:30

Well, Sebastian, I can't thank you enough for joining me today. This has been really a lot of fun. I wish we had two more hours to talk, but for everyone uh in the audience, it is rilla.com. Please check it out. It is the best software you're ever gonna see to help your company grow, to help your sales teams grow, even your event teams, all that kind of stuff. You even have uh, I think pendants now that you can kind of record things in. And we didn't even get to all the products that you guys have, but just check it out because we just don't have that time. But trust me, it's worth typing in rilla.com because it will make your company more money. Period. It's an end of story. So, Sebastian, thank you again. And I want to thank the audience and also thank my sponsor, Paradigm Vendo, for their sponsorship. As the title sponsor here, they are at myparadigm.com. Sebastian, thank you, sir, and thank you for listening. And we'll see you next time on Selling in the Dwelling. Take care, everybody.

Speaker 6 50:22

Selling in the Dwelling.