Hello. And welcome to another episode of the data driven podcast,
where we peel back the layers of the tech world, 1 byte at a
time. Today, we're diving into the heart of
innovation, customer success, and the art of doing big things in
the tech realm. Our guest is none other than Luke
Dias, the visionary founder of d b t ventures and a maestro of
turning startups into success stories. Luc has a
Midas touch, transforming companies from their humble beginnings to
powerhouses with over $100,000,000 in annual recurring
revenue. LUKE is a veritable oracle of the tech
age. So, if you're as excited as a
processor executing a new algorithm to learn how to scale your
business, predict the future with data, or simply want to hear from one
of the leading minds in the industry, you're in the right place.
Let's boot up this conversation and see where the data takes us.
Without further ado, let's welcome Luke Diaz to the
show. Hello, and welcome back to Data Driven. The
podcast we explore the emergent fields of data science, artificial
intelligence, and data engineering.
And as luck would have it, our my world's
favorite my most favoritest data data engineer in the world has
rejoined this call. Today has been kind of an odd day. It's
February 13th where we're recording this. And while it's not a
Friday, it has that Friday 13th
kind of vibe. Right, Andy? Yes, sir. So, yes,
sir. Sorry about that. No. No worries. No worries. We had some kind of
brown out, but I am So and I'm excited
Yes. Because of our guest. Me too. So we
had a, all sorts of things happen
today, but I wanna get the show done before something else happens today.
With us today, we have Luke Diaz, founder of DBT,
Do Big Things Ventures, which has an amazing portfolio of angel
and venture, capital investments, and
advisory of tech, software, and other innovation,
focused companies. He himself is an expert in customer
success, tech support, software and SaaS trends.
And, he has helped 3 startups grow from single digit millions
to 100, 1,000,000 plus ARR.
And, he releases regular research
through thousands of subscribers, exploring focused
topics such as customer success, how to improve your business
writing, and building a churn prediction model with machine learning,
as well as how VCs or venture capitalists
establish track records of success. So thank you for joining us,
Luke. I know that you had some kind of, sore throat, then you got better,
and then Yeah. I I'm feeling
a lot better. Frank, Andy, big fan of the show, honored to be here. I
really appreciate you having me on the show. Thank you. We're we're very glad to
have you, and we're able to get through this. So,
the first question is, what is a Venture Capitalist?
Right? So, you know, there's a lot of people. We work in technology. That term
is thrown around a lot. I have a college buddy of mine who calls himself
a Venture Capitalist,
but he does real estate. So clearly, it's more than just tech, although,
tech is clearly kind of, when people say the word, that that's
the context. But tell me, what exactly is a venture capitalist?
Yeah. That's it's a great question. I'd say the definition has shifted over the years.
I I I just, I think we owe a debt of gratitude to
Sebastian Malaby, who wrote recently published, The
Power Law, which I think is basically the canonical,
book that has the best all encompassing research
on the space. So, if any of your listeners
want to go deeper, it's definitely been the most
recommended book to me this year, The Power Law by Sebastian
Mallody. But I think at the simplest level, it's a person
who's, giving money to start ups. You know? You you invest in
small companies and you hope they get big. And this trend started in the
sixties, and it really took a lot of different shapes and formats over the years,
with governments playing a different role and partnership structures
changing the face, activist versus passive. So there's been a lot
of dynamics, but the same the trend the the baseline has remained the
same. Giving giving money investing money into small
companies hoping they get big. So that's that's what I do,
that's that's one of the spaces I I love to learn and and play in.
Very cool. Clearly, it's not just software, like,
it could be anything, but so so thank you for that definition, because when he
when he suddenly declared himself one day a venture capitalist, I was
like, dude, dude, you're in real estate. And he's
like, you know, it's more than just .com. This is during a .com
kind of thing. Like, it's more than .com. So so,
yeah. What exactly to you what is customer success? Right? Because,
you know, I worked at Microsoft. I work now at Red Hat, and and
there's this whole thing about customer success. And I've
noticed that is also a term that I wouldn't say it gets
overused, but I think different companies have different terms. Like, what when
you what does customer success mean to you? Like, what how would you define
it? That's a great question. I've I've been
reflecting on that a lot because the space has changed so
much over the last 10, 15 years. If I had
to pick 1 word to kind of encapsulate the entire
function and why companies are willing to spend 10,
20% of their revenue on the function is is value.
They are the owners of value
being achieved and communicated to the customer.
The value is like the and and there's art and science to that.
Right? So they are the they are the team that is responsible for get
often getting teams, new customers implemented, making sure they
use it, overcome overcoming structural political
things to, like, get this software
integrated into a company that's never used usually, in most
cases, never used your software before. So, I think of value
as the north star, the guiding light of the function.
But that said, it's taken a lot of different shapes and sizes,
and and roles and responsibilities have shifted. But the
the thing a lot of your listeners probably remember is, like, when software as
a subscription became a thing, we needed a function or
a team. The problem was, like, you don't just buy the software once on prem
and forget about it and hope, you know, hope it renews. Like, these these teams
have to use the software to get value, and they have to
rebuy in the subscription model, which precipitated a need for
this ongoing account management, but also
usage and adoption component. So I think that was, like,
the the change in the landscape that really precipitated
the need for customer success. And, we could talk
more about how to you know, what that means on a more detailed level, but
that's how I think about it. Yeah. My my first exposure to the
term was when they
had this role. This is maybe, like, 8 years ago at Microsoft. They had cloud
solution architects, but then then one day, they said, no. No. No.
You're customer success architects now. And
a lot of us looked at each other, like, so we're gonna do anything different?
And they were, like, no. No. No. The jobs are the same.
Okay. Why the change? And they're, like, well, because we're a cloud company
now. Okay.
Like, couches my exposure to the term. Like, I get it. Right? I
understand the reasoning for it, but it was just kinda how I was introduced to
it, inter introduced to it would would fit in very well
with the theme of the day of just extreme weirdness.
But, yeah. So so,
like, what what are your thoughts? Like, how do you measure customer success? Right? You
know, the the way we were measured, was kind of, you know,
did they adopt the platform? Are they spending? Are there other
metrics, like, customer satisfaction? Like, what? It seems like it's more than
a one dimensional type of thing. And that
you you raise a great point, Frank, because it is multifaceted.
I think the role of a leader is is really clarity.
And so where customer success leaders, I think, really need to step up is
make sure that that scoreboard is super clear. Because if you're telling the
team 10 things are important, guess what? None of them are
that important, because we have this finite resource of
time. And so the way I think about it is I love
setting goals, performance, and comp based on lagging
indicators and then managing to the leading indicators
that are most correlated to that outcome. So, like, for teams I've
managed in the past, the vast majority of their bonus
was driven by gross, gross retention.
Keep the dollars that we know. We've seen some pretty high customer
acquisition costs over the last 10 years. You are companies
are spending a ton of money, 50, 100, 250 k to
acquire a customer. You have to keep that customer for
years to make the unit economics make sense. And so
if you have a leaky bucket, man, and you've seen a lot of companies
over the last few years get turned upside down because unit
economics weren't scalable, weren't sustainable.
So gross retention, dollars up for renewal is
the denominator and, like, how much of those dollars renewed? That is, in
my view, the clearest way to measure the
outcome of a high performance customer success team.
There's a lot of ways and strategies you could take to get
to that outcome. That's where I think management and leading indicators come
in. You talk about, are the customers happy? Are they using the
product? But customers vote with their dollars.
And so I want to make it super clear to any team I lead or
founders that I back, that retention is the name of the game.
Because if you don't get that right, you you you just have this
treadmill. You have this high cap, shitty,
poor unit economics, sorry, you could bleep that out,
yeah, you don't have a good business, so I try and anchor
on gross revenue retention, as
the the scoreboard. So a lot of our
I say not a lot. All of our interviews are super
cool, but not all of them are applicable to me in my
small boutique business. So when you see me take out Andy's
memory and a writing device,
that that's applicable. So this is helping this one. That's your EMM,
external memory module. That's me. So I am taking notes,
Luke. Those are 2 good things. 1st, the book, the recommendation of the book,
but I love the math. And, if you give me a numerator and
denominator and it resonates, I'm writing that down.
Yeah. World class retention is
typically, 95%.
Nice. So if you got a $1,000,000 business over the course
of that year, you're looking at
churn, the inverse of 50 k. That's a
lot of revenue to retain. Right? So you're gonna renew
950 $1,000 of that 1,000,000, you're
invest in class. And there's there's a 2nd tier that's kinda like 90 to
95, but if you get that right, man and then you you
start layering on products, the whole revenue curve just
goes stratospheric. It gets really really exciting when you have a
strong foundation and a and a non leaky bucket.
I like that. I like the leaky bucket analogy. Yeah. Yeah.
Jinx. I'll take a monster energy drink,
but, no. I'll change with my LaCroix. There you go. There
you go. They closed school here, so, like,
to deal with all the kids, I need the extra caffeine.
Fair enough. But, so I mean, I would imagine so so this
seems like, you know, this seem you've grown 3
startups from single digit rev 1,000,000 revenues to a 100,000,000
plus annual recurring,
clearly, this has to be a factor in that. Right? Like, you you have to
get this customer retention right, right, if you wanna scale. Is that
a is that a fair assessment? It
is. And it's a leading it's it's one of the criteria that
most, series a, series b
venture capitalists are looking for because they don't wanna
they don't wanna invest in a lot of them got burned in these
maybe they're high growth, but you got this leaky bucket where customers are just
flooding out the back door. And that's not good because those
customers talk to other people. It's like, oh, yeah. We churned that
we we terminated that product. So it it really
doesn't work unless you get those those numbers right,
retention in the in the 90 90 to 95
plus percentiles. Yeah. And it's become kind of
a core metric for anyone that's looking at unit economics and
the ability of this business to do something big.
Yeah. So I would say, yeah, huge plus 1 on that as an anchoring
metric. But then the more fun part of the job, in my like, it's really
easy to run numbers at the end of the quarter or the end of the
year. That's easy. But the the more interesting challenge is how do you
get there? Right. How do you how are you structuring your onboarding
process? How do you know if like, what is it how are you
defining a successful onboarding? A lot of these startups
I talked to, they they don't know. They're still figuring that out. How do
you communicate value? You know, you start up, you build a a
software or any business to solve a problem, give a strong
hypothesis, but then you need to validate, like, okay, here's how we think about the
return on investment. And by the way, most enterprises are looking
for a, a software investment that has an ROI of 5 to
7 x. So if you close this 100 k deal, they're looking for
500 to 700 k of value to
even rationalize renewing with you. So how do you that's a big
number. Like, you're invested like, we better be able to show some business impact,
and that that gets into the the products, capabilities,
the impact on the business, the user workflows, and, ultimately, the p and
l for how you're helping them either drive revenue or save
costs. Right? It's this is all simple stuff. It's really easy to get abstract
and hand wavy in software, but, like, it all goes back to the numbers.
Right? So that I try and stay grounded in that way.
Right. And as the cost of customer acquisition goes up, this becomes
even more important. Right? We're not talking about, you know,
somebody who's gonna drive by the the local convenience store and pick
up, you know, a cup of coffee and a donut. Right? I mean, this is,
you know, I'm sure they have numbers too, but the math is completely different in
terms of what the incentives are. Right. Mhmm. Mhmm. Makes sense.
Interesting. So what what what are the
things that that because I'm sure in our audience, we have a lot of people
who are either entrepreneurs, they run kind of boutique shops and shops themselves, and
maybe they're thinking about, you know, I was gonna call you out by name, Andy.
But but I I know I know for a fact we have a lot of
people who are independent contractors here, and some of them I think are pondering the
idea of, you know, hey, I'm selling my time for money. It'd be nice
if I can make a platform where I can take some of that
and kind of scale, like and I so I think this is an
interesting opportunity to figure out, like, well, you know, how do you
once you hit the single digit millions, obviously, you know,
what's really the secret? Like, how do you that's a 100 x scale. That's 2
orders of magnitude. Like, how do you if you had to pick the
top 3 important things, what would they be?
And I just wanna make sure I understand the question. You're talking along that path
from it's called $1,000,000, which is a milestone in and of itself. Right.
Like, getting to that 100 100, 1,000,000 revenue, what
are, like, the from the customer success perspective? Right. The difference
between generally. But the difference between comfortably buying a,
Mercedes or 2 to buying a Bugatti.
Right? Right? Like so it's like, what what
how you get there. Right? I'm just I'm, like,
curious. Like, what are the top 3 important things? Like, if you were
advising somebody, like, what what really matters? Because there's a lot of
noise in business, and I think the people that are successful
can filter out the signal from the noise.
What are your what are the kind of the 3 main levers to kind of
filter out signal from noise?
Let me let me ruminate on that, because as you
mentioned, I've seen that ride three times and have been fortunate
enough to play a small part in that in that outcome, in that growth.
I'm trying to now, kind of, parse for common denominators
that enabled that, I
think customer success as one of the fastest growing
functions in Silicon Valley in in the space.
I think we do take a little too much credit sometimes
because, at the end of the day, the product is
that is what's being bought, and the and the product
has to be there. So I would I would start with the
inherent capabilities of the product itself, put
away all the the post sales customer, kinda like my world that I
operate in. If the product is not solving
a valuable problem,
and people aren't willing to pay for it, and it's not a
lot better 7 x, you know, there's different data on how much
better it needs to be than the next alternative, kind of like Ubers
versus taxis, then you're not really
in the arena to even get to 100,000,000. It you
might just be building another high CAC inefficient
leaky bucket, you know. Like, you might be able to ram
software into these companies, but the the product's
value and the strength is is what creates that enduring
competitive advantage. So I I would look for
the the nature of the product, the user mechanics,
how frequently it's used, is it is it a
product that you can habituate the users, as they
adopt this new thing? Is it something you use once a month or is it
something you need to use every day? So, like, the
usage frequency and the perceived value
are key indicators of, like, that product
strength. The
second is a willingness to invest in customer success. A lot of
founders think the product can and should
kind of just you know, if you build it, they will come.
But the but the reality is is you start growing and you start getting some
traction, 1,000,000, 2,000,000, 5,000,000. Now you're starting
to think about moving upmarket where it's not selling
a small smaller ticket item to an SMB or a company that's pretty
nimble and can adopt your software, but you're talking to a collection of
humans that now need to now need to adopt something new.
So now you're talking about change management, process mapping.
Hey. How does this software fit into your existing workflows? And the
complexity gets higher. A lot of CEOs look at
their head you know, right now is a common annual planning time. A lot of
companies have their fiscal year end in January, and they're like,
man, customer success could cost 20% of our revenue.
And they're like, I don't want to make that investment. I've seen it
a 100 times because it's a it's a big investment to have these
humans try and figure out the complexity of working
with these new larger customers and getting them to
adopt a new habit, a new software, a new workflow.
And so, that would be, like, linchpin number 2 is founder willingness
to invest in the function,
like, best in class success, at
Salesforce, for example, is, like, 9 to 10% of revenue, so they're running
a really efficient machine. They also have a lot of revenue, so the
denominator is pretty big. But their their customer
for life program is typically 9 to 12% of revenue, and that's considered
hyperefficient. But when you're small and you're just trying to go
out there, bag some big deals, and help them out, it's not uncommon to
see customer success cost 20% of revenue. So
on a 5,000,000 ARR business, are you willing to invest $1,000,000
to hire, you know, 8 people and some
managers to, like, take on this challenge? Maybe not.
And then you're, kind of, setting the stage for those customers to not get the
help they receive. So that's, like, kinda linchpin number 2 after
product strength is is the willingness
to even invest. And then, you asked for a third one, I
might need there's so much variability that comes into
play with market dynamics, the macro, the competitive space. So
I'm not sure I have a clear third one that is
abstractable. But those 2, I think, are important right there,
because I think so the second one, I think, kinda well, the first one, if
you don't want the first one, the second one's irrelevant. Right? Like but, like,
the whole willingness to expand up to 20%, I mean, I that's
a tough pill to swallow for a field that most people, if you ask them
what customer success is, they'll probably give you a blank look,
or as they say in LLM world, hallucinate an answer.
Right? Like, because, like, even even I'm,
like, I I only know I only got deep into this because as we were
doing our planning for my day job, we were, like,
you know, customer success, and the guy basic the guy runs it kind of
explained his pitch. And I was, like, oh, well, that makes perfect sense. You know?
But prior to that conversation, I don't know. I would have been, like,
you want 20% you want, you know, like, if you were a $5,000,000 company,
I mean, that's, you know, may maybe not in the Bay area, but that's
still a lot of money. $1,000,000,000 will buy will
buy you a house around here. But,
sorry. I thought that was a not okay. I thought that was a really good
analogy, and bringing the numbers home,
being a person, you know, I'm, you know, being a person in business for
myself, I'll just say it that way. The, and from
that perspective, I'd I'd like to ask,
how do you deal with folks who may be reluctant
to engage with any form of venture capitalist
person simply out of fear of the unknown?
They don't understand it. They, you know, they've
maybe they've heard some horror stories of, you know, things
deals going south and bad outcomes. Or they've seen
Shark Tank, right? And they're like, you know. Well, I mean, you know, and I
mean, the risk aversion, I think everybody has
some bit of that. And certainly, you know,
the 100 X upside. Yeah. I'm all in,
you know, on that piece of it. But I'm wondering what's I don't understand
permit. I'm I'm just gonna confess. I don't understand all of the mechanics of
VC deals. I imagine there are many variations,
and there has to be a certain amount of trust with the actual
firm or the venture venture capitalist. So how would you address you
can you can talk to me. How would you address my fears of the unknown?
It I think it's a very valid point.
When numbers are involved and, like, you're a founder, you're talking about the equity of
your company. You know, someone's coming into
this room and and you're gonna you're gonna lock arms and be
financially entangled. It's it's not dissimilar to a marriage in
some regards because, like, you're going to be working together. You're not sleeping together,
but you're you're working really closely together on the financials and you have
a a very vested shared interest. But you kind of hit the nail
on the head. It is a relationship business. You guys have interviewed
some some great VCs and some in the space. So,
I would encourage your listeners to relisten to some of those episodes, as well, which
I found really valuable. The things that,
I think scare people are the like, you mentioned the horror
stories. So everything's great when the market's up, but
where it's kinda like when when someone passes away or
there's a divorce, that's where stuff hits the fan.
Right? So you start to hear stories of dirty term
sheets, which basically have these
prep stacks or these, like, liquidity preferences, which basically just means, like,
I get my money out before other people, and I actually might get more money
out than other people. They they kind of
they derisk the deal
by exerting leverage to minimize
their downside and and that screws other people. Right? Like, that's
less money for employees, the founders, and
subsequent investors. So dirty term sheets are are
something that are a tactic I've never employed. I'm
usually a little earlier, so there's some standardized agreements that, thankfully,
thanks to Paul Graham and the team at Y Combinator, they've put
out these simple agreements for future equities,
like a basic safe agreement, which I've used dozens of times,
where it's clean, it's founder friendly. There's a ton of
these being populated. Yeah. So I would caution you to
look at, like, the this I would encourage you to look at, like, the
numbers in the sense of, like, dirty term sheets and press stacks,
they're exceedingly rare. Like, I've only seen
them in less than 2 or 3%
of the companies or deals that I've worked, where there is really a
VC trying to to leverage, you know, and have kind of
an angle. My question is that VC would be,
like, why do you want if you believe in us so much, why do you
why are you trying to, like, change the nature of the dynamics?
Because because the best VCs just want you to be successful. They're not planning for
the divorce. They're not making you sign a prenup. So,
anyway, that's just, just one thing on the the term sheets
where I think it's it can be perceived as a little bit predatory.
And, yeah, I I don't think most founders need
venture capitalists. I think I encourage like, if you
don't need my money, please don't take it. More money for founders is
better for you. Do don't delete it. It's it's almost, like, glamorized a little
bit. Like, these are just people writing checks that and and they
have an amazing network. So, like, there's really smart people, but, like, they're just
writing checks and joining board meetings. So I would almost knock
them down a peg because the founders are the ones creating value and
changing the world. It's it's not the venture capitalist, so I would almost
I would challenge the premise of that. I don't think most
founders even need it. I'd much rather see them bootstrap.
Well, that's that's an interesting take, you know, as a as a founder.
That's that's an interesting, thought. And I've I've not
seen, you know, and I guess that's not what VCs lead with, you know, when
they're when they approach or angel investors. That's not what they they first lead
with. So it's refreshing, actually to hear
that. But the other side of it, I wouldn't discount, even though I
know less about the process than I
would need to know before, you know, I participate. But even
then, I know the value of a network and I know the value of
advice and having a broad experience
across many different businesses in the field. And being able
especially to look at something dumb that I'm
doing and go, you know, Andy, that's dumb. And, you know, let me tell you
this other horror story about this founder who did exactly what you're doing, and then
they lost everything. And, you know, that's that advice
I think would be valuable as well. I mean, I won't say invaluable, but
it's not nothing. And to have that described as you did
early in terms of a relationship and being arm in arm and and
working for the success of the venture because that
makes perfect sense because then everybody wins.
Mhmm. Well said. And the, I think back to
my days at Optimizely where, Benchmark led our
a round, and Peter Fenton, who's a fairly well known
investor, is on the board at Twitter and Yelp. He joined our board, and he
was very helpful and insightful. And you know what? He he didn't
offer advice, but he asked really good questions. And I had him come speak to
my team at an off-site, and, we're expecting this long,
eloquent talk. He just went up to the the whiteboard, you know, and he
wrote executive visibility equals
budget. And we talked about this concept that if, like, the
executives and your customers, if they don't know who you are, you don't have budget.
And so he has these to your point, Andy, he has these
insights that can lead to really interesting things, and he asks really good
questions. And so the value was less than the money and more about, like, the
insights and the questions. What are the unknown unknowns you're not thinking
about? That's where I think VCs can Yeah. Maybe maybe
impact the trajectory more. Yeah. Well said, I'd love to call out.
Yeah. I I love that because I I say this because it's true.
I I don't know what I don't know. And if I'm a solopreneur,
like I am, it's like I am stuck here unless I have
good friends. And I do. I have Frank and I have a number of really
close friends who are in positions all over in different companies.
1, one good friend who was an early guest on the
show, about almost 2 years ago, got
his MBA from, from the Sloan School at MIT.
And he's gone on to gain experience, and he's reached out, you know, a
number of times. In fact, I mentioned, I think in the green room with Frank
and I met at this, user group meeting in Richmond in late November
2005. I met we met Nick there as well, the 3 of
us. And so, you know, and so Nick's awesome.
And but he has these conversations with me as as
well. And knowing each other that amount of time,
first off, and then, you know, interacting, we partnered
a little bit and and done a little bit of work. Kinda know each other's
personalities. That's been it it's not a
board. But it's what I would imagine
a good board would be like. They're advisors. There's
there's more than just a fiduciary interest,
and this is actually love. You know, we're friends.
So, anyway Love it. For a mutual concern.
Yes. Yeah. Nice. Mutual concern. Did have
you have you heard of a founder named Jeremy Clark? Does that name ring a
bell? I haven't. I've seen the name on LinkedIn,
but I don't I'm thinking about the casino. You have a lot.
I'm sorry. Funny because he's a he really likes driving fast cars.
I don't know. Anyway, Jeremy Clark, I I bring it up because
a lot of your listeners are hustling to build something special and
use data driven insights. This guy started, a company
called Webmerge in 2011. Totally bootstrapped.
I don't think he took any outside capital, maybe some friends and family.
He built it up to 5,000,000 ARR, very
achievable number, and he didn't have a lot of
outside advice from boards, but what he was relentless about was
listening to the customer feedback. Hey. I wanna do this. So his whole
feedback, he didn't have a team of advisers or high paid PCs. He just
listened to the customer. Interesting. Fast forward so when once he got to
$5,000,000 right thereabouts, he sold to
Formstack for $100,000,000.
And he was able to achieve this in, I think, 7 years.
So he's kind of that canonical bootstrapped hustling.
If there was a third thing to ask to add to your first your
earlier question, Frank, it'd be that, like, that customer centricity of,
like, they guide you. Like, you don't need a VC to tell you what to
do. The customer will tell you what you you know, solve this problem, solve this
problem. They got loads of problems. So I'll mention Jeremy Clark and the
Formstack acquisition of WebMerge as one of my
favorite and most powerful examples Yep. Of
customer feedback and just the what an amazing founder can
do. Well, I'll just interject that that's very confirming to me
because that's that's how I roll right now on customer stuff. It's
just they they say what they want. I look at it. I
go, yeah. Yeah. And often when they do that, Luke,
I'll say I'll think of, oh my gosh. Yes. We can do that, and then
we can do this. Mhmm. So it is very much a
virtuous cycle. So Yeah. Yeah. Cool.
Very cool. So while we're on the subject of
kind of being data driven,
and, so talk to me about it, Frank. How does has
machine learning kind of, like, helped in the customer success space in terms
of figuring out churn, retention? Like, has that
has that helped? Is that or is it just kind of a, like,
a, more hype than than help?
I'd say it's more hype at this stage. For
my function, I I've definitely seen some interesting use cases,
but I'd say the hype far outseeds the business value at the
moment. There's 2 use cases that have really helped
me drive performance. 1 is figuring out
churn. So machine learning is really good at
taking lots of attributes,
analyzing them for what's most correlated with churn, but you need a big
enough sample size, so you might be at, you know, how many how many
things can you train the model on is is really valuable in
the instance of machine learning to reduce churn. That's a use
case I do like. We've used, I've used XGBoost,
which is a Kaggle grade model, and, also Random
Forest, which is another way it's just another fancy name
for a type of model that's trying to figure out something.
But, yeah, that helped us reduce churn by highlighting accounts that were at
risk that we had not known were at risk.
So talk about unknown unknowns, machine learning is really good
at raising flags for things that a human might look
over. No. I think this account's fine. Actually, the machine learning
model says you're they're actually very risky. Let's talk about
that. That's where I've seen value case number 1. Value case number
2 is applying large language models embedded in
call recording software, like Gong, Chorus. The notes that you can
get like, you record a call with a customer. The
built in large language models now that summarize the
notes are phenomenal. So you just saved your CSM
an hour post call because the notes are almost turnkey. They
pull out action items, they pull out key topics, they pull
out filler words like, yeah, So, there's even
coaching embedded in the the software. So Gong and
Chorus are the the best tools I've used that machine
learning, like, or in this case, large language models have really had an
impact on type time saving and quality.
No. I'll second that. I use I use Castmagic to do a
lot of the show notes and stuff like that, and it Oh, yeah. The
feed they've added, recording as an option and, for for do meetings,
and it it is science fiction level good at
that. Yeah. And if you have a customer that's
publicly traded and you have, like, a 10 q or one of these public filings
that big companies have to to file, you can upload that to
chat GPT 4. And, actually, they're getting it's
a good a good CSM should know their account. One way to
do that, hey. Upload the s one or sorry, the 10 q,
and I've been impressed with the output of chat
GPT 4 and reading an s one, so you can save, you
know, 98% of the reading time.
So that's another time savings, but I don't know, maybe there is value in having
them read the q the 10 q to to get deeper versus just
getting the topical superficial summary of it. But that's
been that's been interesting. Something I'm watching along with, like, the data
analytics tools built into these models. Very
cool. Yeah. Awesome.
So, Andy pasted the, the the the
preformed questions that we have.
And, so the first question is, how did you
find your way into into the space?
Did you find the space, or did the the the space find you?
In a past life, I was a hedge fund manager, so I've always been I've
always loved numbers. So I'd say I
found a love of numbers When I was, at
Cal Poly in San Luis Obispo and I was studying numbers, I was like, I
really like spreadsheets. So I'd say I'd say I found
numbers, and then in when I transitioned into software, I saw, like,
woah. This is much bigger than spreadsheets. This
is, like, big data at scale. So then I got interested.
Cool. That's my quick story. So we have second question is,
what's your favorite part of your current gig?
I love being on a Zoom call with a founder I'm meeting for the 1st
time and seeing their absolutely unbridled
ambition for they're gonna charge at the world and
they're gonna make a dent in it, and I just
it's something about the human spirit that is, I don't
know, it just gives me the goosebumps to this day, and I get
really excited when I have the honor of, like, meeting a founder that is
hell bent on making the world a little bit better in
their domain, so that gets me pretty that's definitely my favorite thing.
Cool. So we have 3 complete this
sentence, questions, and when I'm not working I
enjoy blank.
Man, I love flying airplanes, so I'm I love
flying up in the sky, and also training for
triathlons. I do a lot of, like, triathlon stuff, Ironman stuff,
so I'm usually I love flying, and I love swim,
bike, run, and, and obviously spending time with the kiddos
and my wife. Very nice. The second1 is I think the coolest thing
in technology today is blank.
Man, old school answer, I still think screenshots are one of the most
low like, screenshotting is one of the most
simple technologies that is so pervasively used, and I think
it's not talked about enough how amazing just a screenshot
tool is used anyway anyway. But a more concrete answer
is I think stable stable diffusion models are becoming next
level. I I've seen I asked my my 3 year old
daughter, hey, Davie, what are you thinking about? She's like,
a rainbow unicorn. And I type in, show me if you know, create
an image of a rainbow unicorn, and we have this, like, shared album on the
iPhone and on the TV. So she she has all her, like, stable diffusion
images on the TV rotating just a way to get your kids involved.
But, I've been so impressed in, like, video is the next frontier. I mean,
it's insane what visually these models can do
now. That's really exciting. It is very
impressive. My my middle child is
into anime now. And, you know, so we
will take, like, clips of him or him playing with the dogs, or just a
description and say, as an anime. Right.
He could kinda create his little little, like, anime thing.
It's just I might have to try that with my daughter. That sounds Yeah. Yeah.
I I I never got into anime, but, like, thanks
to him, I can kind of I only like the 1 movie Akira from,
like, the eighties nineties. But, like, thanks to him now, I I know about 1
piece, demon slayer, Naruto, and there's something
else he's watching because it's snow day. He's watching it upstairs. I can hear it
in the background. So you got us talking about kids now. So,
you know, stand back. My my baby girl is at,
Virginia Tech now, doing her her 2nd semester
there. And, I'll just I'll encourage you. Thank you. I'm
so so, so proud of her. And my other my other daughters
and my my 2 sons as well. They're all proud of them. They're they're
awesome. The, the advice I always
give dads, especially, of daughters, especially,
is drink this in, man. Drink because like in 2 weeks, she's
gonna be driving. It's gonna feel like that
when you when you get there. It's just it will.
And the other just tidbit I share
with dads is you're it's normal for you to look back
and say I didn't spend enough time. And it's a vicious trap, and
it's not true. Yeah. If you spent all of your time, you would
still look back and wish you would spend more time. Regret, wish
you would have spent more time. Yeah. So, don't fall for that. I appreciate that.
Absolutely. My oldest is going to high school in the fall, and
he's ready. I'm not ready. I know. Right? I'm not ready. I
said that to the end of the day. I'm not ready ready for him to
go to high school either. As I said to him, because they had, like, an
open house or whatever. I'm like, I I I can't believe it's high school already.
I'm like, wow. And I looked at him, like, you're ready. I'm already,
like, it's it's totally on me. A big step. Yeah.
Keep us posted. That's a big deal.
The next complete the sentence is, I look forward to the day when
I can use technology to blank.
The technology is not there yet, but when you can talk to someone in another
language and it real time translates in the AirPods.
Oh, nice. I feel like that's going to connect humanity at something we've
never seen before. That's that's that's one
that I'm personally just as someone who loves to travel and connect,
man, would that be a game changer or what? Yeah. For sure.
And it's almost there, Like, it's it's it's not you're right. It's not there yet,
but, you know, it's the closest. Yeah. We're close. I mean, it's almost like,
you know, I think we've hit another, you know, Star Trek is
often used, cited as example of, like, leading indicators of
technology, and it's just like, you know, the other day I was
using we had a previous guest on the previous show that talked
about how you can interact with ChatGpt through the Android or
Ios app, And, like, just
through voice, and, like, I this is very Star Trek. I could be, like, you
know, give me an image of this or give me an answer to this. It's
not clearly what I was looking for. Can you me? And it's just it. Yeah.
If you watch kind of like the next generation, how they interact with the computer
is very conversational. And I think we're seeing a lot of that evolve
today in ways that not that long
ago were impossible. And when you mentioned screenshots,
the first thing I had to learn when I switched from Android to to Android
from Ios was how to do a screenshot. Because I cannot function
Yeah. Without the ability to do a screenshot. Right?
Yeah. Cool. It's amazing. I'll just I'll just throw this
out because I was, Frank and I were communicating
when he had this leap to conversations
with Chad g p for the app. And he
was I I know when Frank's excited, and he was very excited about it. And
he was like, this is so phenomenal. And I'd heard about the
functionality, but I've just been like, I've been typing at it for,
you know, a year, and it's been typing back to me. And I thought that
was super cool. But hearing the enthusiasm in his voice, I was like,
okay. I gotta get this. I I it it
is it is game changing, and it was from a previous podcast guest who showed
me. And I'm like, he did, like, a live demo. I'm like, no way.
Like and it shouldn't have surprised me in the way that it did because, you
know, voice recognition technology is, you know, not a 100%, but it's
it's good. And then voice synthesis technology is,
you know, better than the recognition. That's for sure. Like, it
shouldn't surprise me combining these 3, but here I
was just the lady with the result. So our
last our next thing is we ask guests to share something different about
themselves, but we always throw out, remember, it's a family
podcast. We're trying to keep our family friendly rating and all of that.
Let's see. You know, I heard a quote. I was reading,
Marcus Aurelius and some of his writings,
and there's a quote that really stuck with me. He said something like, be
tolerant of others and strict with yourself. So one of the
things I'm a little strict with myself on is I track everything
I do on this, like, weird little table. Like, at the end of the day,
I write down, did I work out? Did I stretch? Did I do this? Did
I do that? Did and there's, like, 30 things, so I'm a little Wow. I
kinda micromanage myself just to know, like, do am
I capable of doing the things I say I'm gonna do?
And so I I have a lot of data on my own personal, so that's
a little weird. It's, like, a little neurotic, but also helpful. We're, like, oh, I
committed to that, but I didn't do it. That's interesting. Why?
Did I you know what I mean? So I've been trying to, like, use data
driven insights to, like, reflect on why I do
or don't do something I say I wanna do
in my quarterly goal setting. So You know, that that sounds like
spreadsheets. It it sounds like habit tracking, but
then using the habit tracker, that data. And that's something
that I haven't heard people speak of before. So I'm intrigued
and inspired. I like the idea myself. Like I have
the from for my blog and look at the the content I produce,
I have a spreadsheet and that has kept me very honest.
I need to do that for working out and stuff like that
too. Like, I like that idea. I mean, it's really helpful with the with the
physical stuff. It's really helpful. And, yeah, I'll send you
I'll send you the a visual of you guys and we could compare notes
because I feel like we're all trying to solve a lot of the same
challenges in mine, that is very help that is really helpful in that
regard. Sure. I'll share what I what I use, and, yeah, be neat neat to
swallow this. I I actually have my blog, spreadsheet
off there on that screen there, so reminding me that
I'm behind schedule. So
Audible is a sponsor of the show, and you can go to
thedigitsroombook.com, and you can get a free audiobook on us. Do
you do audiobooks on, either way, can you recommend a good
book that you like? Yeah. Two recent
ones. On the more, like, inspirational and
entertaining, I would recommend The $1,000,000,000,000 Coach about Bill Campbell,
written by 3 Google executives, Eric Schmidt among
them and, Mr. Rosenberg and, the
story of Bill Campbell is one of the most incredible stories of
Silicon Valley, so I would point listeners to that for education and
entertainment and just, like, learning about leadership.
Practical, Hamilton Helmer's
strategy book is off the charts. I forget it I
read the hard copy. I forget if it's on audiobook, but
it's called 7 Powers by Hamilton Helmer. I recommend it
to every CEO I work with or fund or just
meet, and a lot of them have started already have heard
of it, But it's basically how to build a business. Yeah. It's really
good. Excellent. So Yeah.
So, where can people learn more about you and your business?
You know, if they wanna I have some book summaries on my website. So if
they go to dbtventures.com and they go to library, I think I
got, like, a couple 100 books I've read and some nerdy notes I
take because I I don't trust my memory. I read a book and I'm
like, what was that book? So I did I try and distill it down in
the 5 page, you know, short summaries for mostly for CEOs, honestly,
and founders. Because they all tell me they wanna read more,
but they have not much time. So I'm like, here's a summary.
Maybe, you know, maybe it's valuable, maybe it's not. So, yeah,
DBT Ventures is one way and then LinkedIn. Okay.
Yeah. Whatever works. That that's what you spot. Okay. Well, I'll definitely be
connecting with you on LinkedIn. We had a little exchange earlier, and I
was I was so excited because, I love it. I love connecting
with guests, and I was like, now I've got the link to you, and we
can connect through that. Yeah. And me to you. I'm stoked.
Thank you guys so much for having me. Hey. Thanks for coming. I'm glad we
can make it work, with weather and health challenges and all
that. Kids snow days, you know, we persevered, and thank you very
much for your patience, and, we'll let Bailey finish the show.
And just like that, we're at the end of another enlightening episode of the
data driven podcast. A monumental thank you to
our guest, Luke Diaz, for sharing his invaluable insights
and experiences with us. Luke, your journey and
the wisdom you've imparted today are nothing short of inspiring, and
we're all the richer for it. To our listeners, we hope
you've found this episode as fascinating and illuminating as we did.
It's your curiosity and passion for knowledge that drive this show, and
we're endlessly grateful for your company on this journey through the Datascape.
Before we part ways, a small but significant request.
If you enjoyed today's episode, please take a moment to rate and review
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whether you're scaling the next unicorn, decoding the mysteries of machine
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welcome here, where data meets discernment.
Until next time, keep crunching those numbers and questioning the
status quo. I'm Bailey, signing off.
Stay data driven, my friends.