[00:00:00] Guillaume "G" Cabane: There is a good question, which I think has changed in the past year since we talked. It is likely we get to a point where for most people, the AI email will be indistinguishable from the human email. It is likely. Most people. Maybe not for you, maybe not for me, but for most buyers. When that happens, what's going to go on in people's mind? How will they react? And it is very possible that for some part of the population, they stop trusting email as a communication medium because they no longer know who is on the other side.

[00:00:47] Andrew Michael: This is Churn.FM, the podcast for subscription economy pros. Each week we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.

[00:00:59] VO: How do you build a habit forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely bootstrapped, profitable and growing.

[00:01:13] Andrew Michael: Strategies, tactics and ideas brought together to help your business thrive in the subscription economy. I'm your host, Andrew Michael, and here's today's episode.

[00:01:24] Andrew Michael: Hey, G, welcome to the show.

[00:01:25] Guillaume "G" Cabane: Hey, Andrew, how are you doing?

[00:01:27] Andrew Michael: I'm doing great. For the listeners, G is the co-founder and general partner at Hypergrowth Partners, an advisory fund that helps B2B companies grow faster in exchange for equity, and their portfolio includes companies like Ramp, Retool, Vercel, Reddit, Maize, and more. Prior to Hypergrowth Partners, G was an interim CMO of Ramp, actually during his tenure at Hypergrowth Partners, and prior to that, he was also the VP of Growth at Gorgias, Drift, and Segment.

[00:01:52] Andrew Michael: So my first question for you today is, you've always been sort of at the forefront of innovation when it comes to capitalizing on growth. And what I'm really interested in at the moment is what is the wildest thing that you've seen recently that you believe has big potential?

[00:02:06] Guillaume "G" Cabane: Yeah, I mean, obviously, like we're all looking into ways to like use LLMs and weave it into marketing. And what's going on right now, I think, is the speed and the cost at which we're doing experiments, you know, in growth teams, I will always think of growth teams, the speed is going up, the cost is going down. And as an example, I'm seeing more and more, for example, B2B companies, Facebook advertising, always difficult.

[00:02:30] Guillaume "G" Cabane: Always difficult to find the audience. Always difficult to like find the right message. Well, nowadays, we have the right platforms, the right tools, so we can do not just one really nice, interesting video ad per quarter. We do three a week, because the cost is so low. We just, like, AI generate the first 10 seconds, and we see if we have engagement, right? We couldn't really do that before, because it didn't make sense.

[00:02:56] Guillaume "G" Cabane: Now this is like $1,000 or less. Super cheap. We just create a ton and we can just go through all those creatives and sure, like it may, it might only attract a very small part of our audience each message, each creative. Doesn't matter. The cost is down. And the reason why that is important is in B2B, also true in B2C, but we've had the issue more in B2B, like marketing, it's all about CAC.

[00:03:24] Guillaume "G" Cabane: It's all about CAC, always. And so you're always thinking of like, given my audience, given my ACV, given the size of my TAM, you know, what CAC can I afford, thus which strategies can I afford, right? And what's interesting with what's going on with the platforms we have is that it's reshuffling the game, right? It was not profitable to do video ads on Facebook, it is now. It was not profitable to do like one-to-one outbound emails, it is now, right?

[00:03:53] Guillaume "G" Cabane: And so we've got to go through, got to go back through all of the entire marketing mix, all the channels and think, hey, have the economics of that channel completely change. And the answer more often than not is absolutely. Absolutely they've changed. And we can be the first ones to do it, right?

[00:04:16] Guillaume "G" Cabane: And so what's going on because of that is there's a shift from channels which are completely arbitraged. Example, AdWords. AdWords is the example of the channel where there's not a huge competitive advantage. You pay what you pay for and the rest is, that's what it is, right? And it's shifting from that going back towards more SEO, more content, more outbound, more video ads, which were kind of like left behind from 2015 to 2020, 2021.

[00:04:48] Andrew Michael: I think with Google ads, obviously it was like the high intent nature of it. It was one of the easiest ones to like put money behind and then sort of see results and the others have to take time and required resources. But like, as you say, like that's no longer true anymore. Like the time and resources is significantly diminished.

[00:05:04] Guillaume "G" Cabane: Yeah. For example, at Ramp, we just did a snail mail, like a direct mail, like putting physical ladders, right? And because we have really good data, because we can do custom one-to-one messaging, right? The cost of selling it is less than a dollar. The engagement is pretty good. We have the tools now to do some like mixed media modeling and understand the lift. And we realized that it is absolutely profitable for us, for the right audience.

[00:05:32] Guillaume "G" Cabane: When we have the right data on the target, we know there is intent. Thus we are wanting to spend more. We now have the technology to be able to send them a snail mail, a direct mail to that single person. API call, send letter, create engagement, less than a dollar. For Ramp where the ACV is high, totally worth it.

[00:05:55] Andrew Michael: Yeah. Very interesting. I'm keen to dive into all those details and how you set that up, but I can see like the, how the dots could be connected on that front. I think as well, like you said, so the economics changing, that's like almost changing daily now to some degree as well, where like , even just like last week, things weren't possible due to the economics of like the models of the Open AI and then DPC coming out now, this week, where it's just totally damaged the cost. Make it more accessible. [crosstalk]

[00:06:21] Guillaume "G" Cabane: I know what you want. I know what you want as an example. So I'm going to give you a real example that we did, all right? So people can understand like how it's changing. It's making something impossible possible. So I was helping Reddit push their advertising platform. By the way, hit me up if you want to advertise on Reddit. That's great. I'll connect you, all right?

[00:06:40] Guillaume "G" Cabane: And obviously, so who's the audience for that? Well, the audience for that are people who are advertising on Facebook. All right? People that are already advertising, they have budget and try to take some of that budget away from Facebook and into Reddit, right?  Now, how do you know who's advertising on Facebook? Well, that's not super easy, right? You can't, there's no like data vendor that tells you that. There's no Semrush on Facebook, right?

[00:07:00] Guillaume "G" Cabane: However, there is the Facebook ads library where you can see the ads of your competitors. By the way, if you have not checked it out, please do me a favor. Go ahead. Check out your competitors on the Facebook ads library and you'll see all of the ads that they are posting, right? But it doesn't tell you that much. You just see the ads and the copy and that's not. All right?

[00:07:20] Guillaume "G" Cabane: So what we've done is we've taken all of our target markets. We've scraped through an LLM all of their possible Facebook pages, put that into the Facebook library, found whether they're doing ads, count the number of ads over time to see are they doing creatives, which correlates really well with like are they investing on Facebook? And then mash that up all in an LLM, right? And say, hey, Andrew, I saw this great ad of yours on Facebook, here's how it would look like on Reddit. And this is the right subreddit for you, which has this many subscribers, this many members, right? And here's a $200 coupon to try it out, right?

[00:07:59] Guillaume "G" Cabane: And it's all packaged up. You can see your ad, it's very relevant. We tell you data, internal data on like the subreddit. We give you like an ad preview, we give you a coupon, all in one. Now, is that possible with a human? Yes. However, the cost of doing that would be what? 20 minutes? Maybe two minutes. The conversion rate and the value of rate makes it impossible with a human. And in our case, this is like two weeks of work to make it nice and packaged and workable. That's it, done.

[00:08:27] Guillaume "G" Cabane: So that's an example. That example that's very scalable, because once that's done, you can go after all e-commerce, and all of those huge industries and just like scrape, process, send.

[00:08:38] Andrew Michael: And then when you're targeting them via email, via Facebook ad, like how are you bringing them up? [crosstalk]

[00:08:42] Guillaume "G" Cabane: In this case via email. In this case via email, because Reddit has a great, you know, you're always busy with your strengths. Reddit has obviously a great domain name, right? So great authority and yeah, via email is worth- makes sense.

[00:08:53] Andrew Michael: It just works there.

[00:08:54] Guillaume "G" Cabane: Yeah, there's some LinkedIn, you know, DMs and LinkedIn ads also going on.

[00:08:57] Andrew Michael: Yeah. I think Reddit's always been an interesting channel as well from like an ad perspective. I think the audience there is like normally quite hesitant to it, so I'm keen to see as well like how you mentioned things are working very well there, like how you've managed to weave in that experience into the Reddit experience from a perspective where ads like actually deliver results as well.

[00:09:17] Guillaume "G" Cabane: Yeah, yeah, for sure. So we always do things like that. And these days you can, it's really about the relevance and making- there's two things that are working here. One is there's always some reciprocity. You create value, right? Your email is inherently valuable. And so people will tend to respond more. There's more insight, right? Also, it looks more, it feels more human and that humanist aspect will elicit a higher response rate.

[0:09:44] Andrew Michael: Yeah, very nice. So we're talking now a little bit, like we see like we need to rethink channels, the economics have changed completely. What is like one thing that you're advising companies to take a look at today that you work with that you probably shouldn't share on a podcast?

[00:10:00] Guillaume "G" Cabane: What am I gonna say that I should not be saying? That's an interesting one. I think that outbound sales by and large is embedded in growth now. Like the debate between whether outbound is a sales-owned channel or a marketing growth channel, I think that one is settled. I think the sales team are now focused on the closing and all of the [inaudible] is part of growth. Obviously, I'm biased. I'm happy for that. That's the outcome I wanted.

[00:10:35] Guillaume "G" Cabane: But still, there's a reason for that because all that part of sales is more and more technical. And the sales team have not become technical. The sales team, by and large, are not leveraging technology as much as marketing and growth teams. And so by nature, all those platforms, all of the UniFi, the Amplemarket, the Clay's, all of that, they are targeting growth and ops teams, right?

[00:11:06] Guillaume "G" Cabane: Right. And I think you're going to see more and more of that, of that shift. If they're thinking of like LLMs, AI taking over people's jobs, all right? You can see it being going from like away from sales and into growth and ops.

[00:11:20] Andrew Michael: Yep. And I still think there's probably a little bit of reluctancy on the sales front as well, because I recently worked with the company as well, discussing like, should we hire an SDR or should we like invest in sort of growth marketing? And there was obviously like pushback from sales, but the rest of the org was like, this makes a whole lot of sense. Like we don't need to scale head counts, but we can scale the outreach and the program.

[00:11:42] Andrew Michael: And what are some smart ways you've seen companies actually implement this today at the company? And maybe as well, like if you've seen this pushback between sales and growth marketing, how are the teams navigating this?

[00:11:52] Guillaume "G" Cabane: Yeah, for me, it's always a question of like, what's the ACV? Like what's the average customer value, right? Because if your customer value, you know, is extremely high, you know, call it like, you know, high six figures, seven figures, then the relative cost of those sales headcounts is minimal and you don't care. It doesn't matter, all right?

[00:12:12] Guillaume "G" Cabane: And the number of customers is so small generally, right, that you can't afford a mistake, all right? And AIs will produce mistakes, all right? Conversely, when you have a lower ACV and a high TAM, then you want to minimize costs, all right, the headcount costs, all right? And so that's how you think about it. And so I think the answer depends on your ACV.

[00:12:36] Guillaume "G" Cabane: So for example, like Amplemarket has this duo platform, which is a hybrid SDR, AI outbound model. That's very interesting, right? I really, it's, it's a good fit for anyone in the five figure range, right? Because it's like, does all of this AI magic. So like does all the intent, audience selection, prepares the message, prepares which channels, but there's a human who can go in and like change the messaging a bit, make it a bit more unique, a bit more human, all right? That's an interesting hybrid model.

[00:13:08] Guillaume "G" Cabane: And then there's the other platforms which are super high volume and lower quality. So you kind of got to pick, say, based on your business model, based on your target market. But yeah, I think going hybrid is what's working at Ramp. It's what's working at a lot of places because most of the companies I work with are more like, you know, the five figure ACV range.

[00:13:34] Andrew Michael: Yeah. And I, yeah, I liked it, the different distinctions as well of like how automated you can go based on the ACV range, because then it does make sense in terms of like the deal size, the opportunity, the costs as well of like, because there are chances that things don't go completely right all the time. [crosstalk]

[00:13:50] Guillaume "G" Cabane: Absolutely. And they will. No, they will. For sure.

[00:13:54] Andrew Michael: The risks are different [inaudible]. Because I- recently as well, like going to your point is all of like challenging like what was possible before and what's not was like this idea of like, we have this talk to sales button on websites and it's like, why do we need to get people to like, wait? Like we know that the, like the biggest indication of like closing a deal is the time it takes for sales to contact.

[00:14:13] Andrew Michael: And I think there's technologies to now that you can actually literally like just start talking to a salesperson and then like, if things get a little bit too tricky or technical, you could just say, hand it over to a real person or like, I want you to introduce to me to a colleague, like he'll jump on the call now for you and you have Slack and things. And I think there's a lot of these sort of things that can be done now. [crosstalk]

[00:14:29] Guillaume "G" Cabane: For sure. I mean, that was the thesis behind Drift back then, right? The technology was not ready for it, right? But if you think of all of what we've done in the past couple of years of like doing IP to domain and reverse IP detection, and then all of the dynamic scoring with like [inaudible], MadKudu and [inaudible] and all of that. Now there are LLMs for the language handling, it makes a lot more sense to revisit that and say, well, if we know we have people that are of high value on the website.

[00:14:58] Guillaume "G" Cabane: We've already made the effort to drive them to the website. What is the best experience we can give them, right? And the answer is, it's not an A-B test. And that's why you see none of the A-B test platforms going well these days. None of the personalization platforms going well, because they can't really like adjust themselves, you know? And so there's a lot more that's going through like text and pushing towards an engagement of the person.

[00:15:25] Andrew Michael: Yeah. No, I think like from an A-B test perspective as well, I think that's definitely rapidly changing, like for a number of different reasons. Like one of the reasons you mentioned earlier is like, you can just do so much more now, so much faster. So like there's almost no need in some cases as well now. And the other point of it as well is like you can create, and another thing I thought as well is like, you can always create a dynamic experience now for users to experiment on their own without having to personalize, without having to run A-B tests, do the dApps in real time.

[00:15:53] Andrew Michael: You mentioned reverse IP though. And I think there's something we chatted about probably in our last call. I'm interested like-

[00:15:57] Guillaume "G" Cabane: Two years ago.

[00:15:59] Andrew Michael: Yeah. What is like your go-to stack today? Because obviously there's a ton of different tools that have come up and how are you advising companies to take advantage of anonymous website visitors to their sites? Like, what is like the first two, three things you tell them they absolutely need to do?

[00:16:15] Guillaume "G" Cabane: Yeah. So if you take a step back, you know, the interest here is it is more efficient, cheaper to drive good volume, like significant volume, and then sift through that volume on your website, right, by detecting who's a good fit that showed engagement. So they are showing engagement by being on your website. They clicked on some content, on some ad, on something, all right? So that's engagement.

[00:16:43] Guillaume "G" Cabane: Great. And then you say, well, are they a good fit? Are they the right kind of company for me to like sell it to them? How much cap should I spend, right, you know, through that? And so you're trying to assess who they are. Like a couple of years ago, we used to like only have Clearbit Reveal, which is great. Obviously Clearbit has been acquired by HubSpot. So there's some question mark around like how long that's going to be available.

[00:17:04] Guillaume "G" Cabane: I don't even know if they still sell it directly. Maybe not, right? [crosstalk] And so we have like a number of different vendors these days. Obviously there are my friends over are B2B who are doing something even more aggressive where you can not know just the domain, but the person who's on the website. There is a lower match rate, but there's a higher conversion when you know who's the right person.

[00:17:27] Guillaume "G" Cabane: So we generally use a combination of platforms. I think we have like three or four platforms. I think we have like Clearbit Reveal, RB2B, KickFire, and Albacross. I think of those on the IP stack. And then once you know which person slash domain it is, you've got to find the contacts or the email address of the person. And in that case, we use a Waterfall. I find that waterfall.io. Because they advocate on their own.

[00:17:55] Andrew Michael: All of the different providers.

[00:17:56] Guillaume "G" Cabane: Yeah, I think they've got like 11 different data vendors and one stable API. So that's great. And just like hit that. They got great prices. And then put that into your outbound system, whether that is a UniFi, a Clay, or whatever, or some. When you have super high volume, you tend to do it like DIY with [inaudible] like Ramp does, for example.

[00:18:18] Andrew Michael: How are you like all these multiple different sources then feeding you in this information? Are you doing something on top of that data as well then to synthesize it and to clean it as well? Because like you're probably getting back maybe different variables depending on the service using or like a lot of repetitive stuff as well.

[00:18:35] Guillaume "G" Cabane: Yeah, so I mean, if you think about it, like the, this reverse IP stack is just one of the signals. As I said, it's an intent, right? It's a really good intent, but it's just one. If you look at a company like a Ramp or at Gorgias, there's like north of 15, maybe even more intent signals these days that are aggregated into a common, a single like intent table. These days, there's platforms for that. The Common Room does that for you.

[00:19:02] Guillaume "G" Cabane: Common Room is an intent CDP mashup, all right,which is pretty good. And then depending on your... And Amplemarket also does that. Amplemarket has, I think, in the order of like a dozen signals like job change, promotions, company employee growth, fundraising, new office opening, all of those. And all of those are potential good things.

[00:19:27] Guillaume "G" Cabane: For example, in most SaaS advisory engagements I've had, we're selling software and there's a super high correlation between a new executive hire and the willingness to buy new software. And so that's just a great signal we want to have all the time. And that just tells us which companies. And then from there, we just prospect in Waterfall the potential contacts.

[00:19:53] Guillaume "G" Cabane: And again, like it used to be only possible through like a custom built. These days, there are platforms for that. UniFi is such a platform. Common Room is such a platform, Amplemarket. And just depends on whether, how much say you want to have on the process, how much hands-on you want to be, and how much scale you have, right? The higher, the more scale you can have, the more it's going to be like a custom built. Yeah, in-house custom built.

[00:20:22] Andrew Michael: And I think from like this to the paths or like this two data points that you really want to understand, like one is like the qualifications, I think. So like, who are these people? Like maybe how many offices do they have? Like employee accounts, like the basic thermographic and demographic stuff. And you can obviously use like LLMs now to do a little bit more fancy thing.

[00:20:42] Andrew Michael: So for example, how many offices. You can go check the contact page, do accounts, bring that back into something like Clay. And then you have the intent signals as well. Are you bringing those all into a place like Common Room and you're using the combination, like is there sort of another downstream tool that you're using when it comes to like managing the outreach and like where is sales, like I'd say interacting in this stack then at what point and what are they seeing?

[00:21:05] Guillaume "G" Cabane: Yeah. So there's what I wish and then there's reality. What I wish is sales engage at the last possible moment once we know that there is an appetite for a sales conversation. The reality is that there are many cases where the salespeople have value in engaging in this hybrid model and doing some, you know, custom emails. I'll give you an example at Ramp. Okay.

[00:21:37] Guillaume "G" Cabane: More than half a million emails per month are outbound or sent, okay? That's a lot. It's like probably one of the largest in the B2B world. Okay. The sales team sends a fraction of that. Okay. A small fraction call it, you know, like 15%, 20%. But that 20% is more than half of the revenue of outbound, for sure. So those emails are more valuable. It's a combination of them targeting better audience or better time selection. Obviously, like it's helped by all the automation we have.

[00:22:06] Guillaume "G" Cabane: But it's because they can, to this day, humans are capable of taking a bit more risk, a bit more calculated risk on a per person, per email basis than an LLM with a prompt could. Because with a prompt, you're trying to avoid balance. And you're trying to avoid like the downsides of the output being terrible, right? Well, the human can take more risk, right? And so we've had people at Ramp take definitely more risk.

[00:22:33] Guillaume "G" Cabane: For example, there are people who are- there's a guy who's a Persian origin, right? And he just- every time he finds somebody that has a name that sounds Persian, like, hey, dude, like, are you Persian? Like, what's the last time you had this dish cooked by your mother, right? Like, there's no way I'm going to take the risk of ultimately doing that with an LLM. There's no way, right? Can you imagine?

[00:22:53] Guillaume "G" Cabane: But like the human can take the risk. Right? But just think about it. If it lands, right, obviously, he's gonna have a better conversion. Obviously, right? Because people also know that this risk is calculated and that calculation is human. And they're like, oh, this dude actually looked me up and like he looked, yes, yes he did. Right? And so right now we're not there. So that's what's going on.

[00:23:18] Guillaume "G" Cabane: There are people- another example that we can't do yet. And I think all of those things are gonna change. But in mid-market companies, there's generally a potential for like, you know, half a dozen potential buyers contacts, you know, with like in the same organization, a different like, you know, seniority levels. Who do you go to first?

[00:23:36] Guillaume "G" Cabane: If that person doesn't respond, you know, 9 times out of 10, they don't respond. How do you go to the next person? Do you send the same message or a different message? Do you reference the fact that, you know, there was the other person you're trying to reach out to? And so how do you navigate an organization? Right now, I know of no platform that does that for you. Right now, it's like a single user mode. Like one contact, one signal, boom, email, right? That's it.

[00:24:00] Guillaume "G" Cabane: There's no concept of navigating the org. There's no concept of being able to bridge multiple intents together. Most accounts that we see, they go on G2, they go to our website, there's a executive hiring, there's multiple things going on at the same time, all right? There's no platform today that can understand this buying path and like say, oh, yeah, sure, they put out the job to hire the exec, they hired the exec, now they exist to check on G2, yes, I can see that, and we can wrap that up in the nice little package. And also the willingness to buy goes up, so we should spend more. Let's send them like a $300 like Bose headphone gift, right?

[00:24:41] Guillaume "G" Cabane: No platform does that, but a human sees that third is like, it's going to click immediately. He's like, oh yeah, of course. Like good account. Boom, boom, boom. Three signals. Great. Let me call them up, send them a gift, invite them to a steak dinner, right? That's going to happen. There are people working on that. And when that happens, I can tell you one thing, Andrew, the SDR job function is dead. Absolutely dead. We're not there yet and I'm rooting for this. But this is like a 12-month timeline or less for people launching such a platform.

[00:25:13] Andrew Michael: Yeah. I think after the last time we spoke, we talked a little bit about a concept like this and I even considered like starting a company because I think we were talking about it back then when the concept of churn and retention. And like one of the biggest reasons for churn is when your customer champion leaves, but it's also one of the biggest opportunities because like as you put it, I think they're not going to just go and farm potatoes.

[00:25:32] Andrew Michael: They're going to go somewhere else and it's a big opportunity. But I think you're talking about like now an extension of that in multiple different scenarios and being able to sort of like create this really tailored outbound experience based on knowing their experience and chasing the signals. Like, yeah, I think it's definitely super interesting. I can see that as at point being sort of the end of the SDR.

[00:25:54] Andrew Michael: And my one concern then all of this, and I'm keen to get your perspective on it is that there's just so many companies going off to the same sort of problem at the moment. And there's so many, like every startup now is saying, hey, like we need to do this as well. Do you not see this then becoming a channel that becomes extremely saturated and almost dead? Obviously like the scenario you talked about now is like, I think that's what would make you stand out. But then like the inbox now, like for most people that have buying power to purchase software companies, I think is already like exhausted.

[00:26:25] Guillaume "G" Cabane: Yeah. I mean, there's always been some variation on improving email and people being saturated and you know, for example, I don't know how much spam you receive per day, but I receive less and less in my GMail box, right? Because GMail is getting better at filtering it, right?

[00:26:43] Guillaume "G" Cabane: There is a good question, which I think has changed in the past year since we talked. It is likely we get to a point where for most people, the AI email will be indistinguishable from the human email. It is likely, okay, for most people. Maybe not for you, maybe not for me, but for most buyers. When that happens, what's gonna go on in people's mind? How will they react? And it is very possible that for some part of the population, they stop trusting email as a communication medium, because they no longer know who's on the other side.

[00:27:24] Guillaume "G" Cabane: It's not just like people sending you emails, it's going to be people responding to emails automatically, right? And it's going to be like the LLM speaking for me.

[00:27:31] Andrew Michael: Everybody's talking. My LLM talking to your LLM.

[00:27:34] Guillaume "G" Cabane: Exactly. right? But in that, and so there's a risk for email as a channel itself, right? As is for the chat bots, all right? You almost never use a chat bot because it's almost never human on the other side. right? And so that does, the why is that? It's because most of the time the engagement sucks, Andrew. Because most of the time when you're on the chat, it's not valuable for you to speak to your chat bot. You just don't get what you want. Okay?

[00:28:01] Guillaume "G" Cabane: But that's also is going to change. It's getting better and better. All right? There are people that I know who are building a sales LLM where your engagement is not with the sales human, sales person, is with a LLM model. And you're going to tell me, gee, that is crazy. Who would want to buy from an LLM? And the guy has an answer, engineers.

[00:28:23] Guillaume "G" Cabane: Engineers don't want to talk to salespeople, they prefer talking to a model. And so the model does everything, right? From the pricing, the negotiation, the demo, everything. And I'm like, maybe he has a point. All right? Maybe he has a point. And so that's what's going on. So people are going to stop. There's a risk that some part of the population stops trusting email as a channel, as a communication channel, and they will revert to something which has trust. All right? More word of mouth. right? More proof of humaneness.

[00:28:57] Andrew Michael: I don't think it's only engineers though. They don't want to talk to sales. I think it's a large percentage of the population. They would probably prefer just to avoid them all together and feel more comfortable interacting with an LLM.

[00:29:08] Guillaume "G" Cabane: Oh, for sure.

[00:29:09] Andrew Michael: Yeah. Right. What's one thing about churn and retention that's changed for you since we last spoke. Something maybe new that you've learned.

[00:29:17] Guillaume "G" Cabane: To generate attention?

[00:29:19] Andrew Michael: For churn and retention.

[00:29:21] Guillaume "G" Cabane: For churn and retention. Well, there's obviously like, it's funny, two years ago, there's a lot of startups on all of the churn prevention. Remember all the folks that were doing stuff where like there's a churn path and would bring you through like six pop-ups models to prevent you from churning. It doesn't seem those lasted. All right? I don't know that they've done super well. There are actually the... It's interesting.

[00:29:50] Guillaume "G" Cabane: The former co-founder of Drift, Elias, has started a startup in the LLM CS space. And so he's automating the CS because CS does not scale well, all right? So he's really smart and there's a good chance that he does a good project there.

[00:30:13] Andrew Michael: Yeah, I know I had Elias recently.

[00:30:15] Guillaume "G" Cabane: Oh, you did?

[00:30:16] Andrew Michael: Yes, I had him on the show. Excited to see what he's going to come out with as well. Obviously it's early days, but it seems like they've got some good traction already and keen to like follow and see what they do there. Nice.

[00:30:29] Andrew Michael: Maybe before we wrap up today as well, like I'm keen to get a little bit of an update as well on Hypergrowth Partners. Like maybe like share with the audience a little bit about the model, how you work. You have an incredible portfolio already. [slight crosstalk]

[00:30:40] Guillaume "G" Cabane: No, it's been fascinating. It's been more than three years. We have, you know, over a dozen like active partners, the community of like over 50 people. We've done 30 advisory deals last year. And so we've learned quite a bit over that time. And anyway, I meet execs all the time who get exhausted after a few advisory deals or who don't believe in the equity model. And we found something that works, you know? We advise some of the best B2B companies on the planet in exchange for equity. And they are happy, our people are happy.

[00:31:15] Guillaume "G" Cabane: And so the model where we found is there's a couple of, I think, gotchas. One is only mid-stage companies that have PMF, right? If a company does not have PMF, it's not advisory they need, it's execution, right? What they need is an interim person, a freelance, like whatever you want to call it. It's not somebody that has good ideas, because they have ideas, what they need is to execute and do the basics, okay? You can't charge a lot of equity. All you're gonna do is give them ideas and let them do it. At the early stage, it doesn't work.

[00:31:44] Guillaume "G" Cabane: At the mid stage, they have small teams. They have small teams and they are capable of executing, but they probably don't have the right leadership that's been there, done it a couple of times. They want de-risk, that is perfect. So I'm thinking the company is like 5 to, you know, 10, 15 million in revenue with a small team. And then you can take equity. However, more often than not, startups fail, rightt? 8, 9 times of 10 startups fail and equity is worth nothing.

[00:32:12] Guillaume "G" Cabane: And so most of my friends who do advisory on their own, they get exhausted because they do three, four, five, equities worth nothing. They're like, hey, I'm out of here. Like, I'm just going to do like real startup thing, right? But investing in mid-stage works really well. So why is that? Well, because they don't have enough diversity. That's why we do like 30 or more deals per year, right? And with a hit rate in our case, we have pretty good like overview of all the markets. We have, you know, at least like 30%, 40% of the companies that do really well.

[00:32:42] Guillaume "G" Cabane: Which means we have like, you know, 10, a dozen companies that are almost breakout companies every year. And so we've already distributed millions of dollars to our partners. And we do one or two distribution a year from the equity because we can participate in second release. So we have a pool, all the partners pool the equity in a common vehicle. We distribute the money, we participate in equities, we know how to negotiate. And so this, this is working, Andrew. Like it's not YC yet for sure.

[00:33:10] Guillaume "G" Cabane: And I don't think it's ever going to be YC, but like there is a value in having multiple people do advisory under a single umbrella, have to be able to take equity, be able to like get the upside and minimize downsides as a group. That's what's going on. And most of our revenue comes from, most of our deals come from like word of mouth and VCs.

[00:33:32] Andrew Michael: Yeah. I mean, it's very interesting. I mean, you've literally just scaled your original plan as well. Like I remember the very first episode we had, you talked about like the advantage of advising and you realized at some point, like just working at one company, you like put all your eggs in one basket and you had big risk and you wanted to sort of minimize that and you've done that. And then now you scaling that model that worked for you.

[00:33:53] Andrew Michael: You're always really, really good at picking like really good outliers and ones that were already there. And I think the unique value prop that you have is, I don't think it's like those, I think it said like you and the team as well are incredibly good at growing companies as well. So like you have this sort of like two-sided marketplace, as you mentioned, where like startups, they're growing really fast, but they also want to systemize. They want to scale even faster. They need experts that know this. Like you are the experts.

[00:34:16] Andrew Michael: And in the same front, like you don't want to be working with just any startup, you want to be working with the startups that are growing the fastest, so it's sort of like a self-selecting process.

[00:34:24] Guillaume "G" Cabane: Absolutely. And that's why I have more and more of my friends who are coming to me and say, hey, G, like I want to think like one or two deals this year. I don't have the time to talk to all the founders. I don't know who's going to work out. Can you just like pick one for me, right? And that's what I do. All right? We're absolutely this dual-side marketplace where we're doing like the vetting on both sides. All right?

[00:34:43] Andrew Michael: Very nice. And [cut], what's the new plans are now for 2025? Anything interesting coming up then?

[00:34:49] Guillaume "G" Cabane: Yep. We are obviously opening, you know, an AI front that's led by Rajan, who was Head of Growth at Heroku before, right? And he was interim CMO at Together AI. So he's really good at all the AI stuff. So we're leading that effort there, closing more and more deals on the AI front because it's very limited knowledge of how to do demand gen for AI companies.

[00:35:12] Guillaume "G" Cabane: And the other side is more on the DevRel and all of the dev products with my partner, Gonto, who was at Auth0 and Okta before. And so we have a whole group of people doing that. So between Rajan, Gonto and myself, we have a pretty good coverage and that's kind of how we're going to grow and probably go up market even a bit more, you know? Take larger and larger deals in bigger and bigger positions.

[00:35:37] Andrew Michael: Amazing. Well, I see we almost up on time. So is there any sort of like final thoughts you want to leave the business with? Anything they should be aware of, like to keep up to speed with your work?

[00:35:46] Guillaume "G" Cabane: Yeah, absolutely. We're publishing more and more in-depth articles on our sub stack, just like check out Hypergrowth Partners. You know, let us know what you want to know. If you're curious about the advisory, do hit me up. Just like write to me at g, g@hypergrowthpartners.com. Always happy to talk to people. If you're a founder and you're curious, you know, about what could be done at your post PMF company also hit me up. Happy to do that. And yeah. That's pretty much it.

[00:36:15] Andrew Michael: Amazing. Well, thanks so much for joining in today, G. We'll make sure for the listeners to leave everything we discussed today in the show notes. And I wish you the best of luck now going into 2025.

[00:36:25] Guillaume "G" Cabane: Awesome. Thank you, Andrew.

[00:36:26] Andrew Michael: Cheers.

[00:36:33] Andrew Michael: And that's a wrap for the show today with me, Andrew Michael. I really hope you enjoyed it and you were able to pull out something valuable for your business. To keep up to date with Churn.FM and be notified about new episodes, blog posts and more, subscribe to our mailing list by visiting churn.fm.

[00:36:53] Andrew Michael: Also, don't forget to subscribe to our show on iTunes, Google Play, or wherever you listen to your podcasts. If you have any feedback, good or bad, I would love to hear from you. And you can provide your blunt, direct feedback by sending it to andrew@churn.fm. Lastly, but most importantly, if you enjoyed this episode, please share it and leave a review as it really helps get the word out and grow the community. Thanks again for listening. See you again next week.

‍