Full Episode Transcript
Mike: Welcome to the Startup Competitors Podcast. Today we're sitting down with Max Yoder with Lessonly. Max, welcome.
Max: It's great to be here. Thanks for having me.
Mike: All right, man. Tell us about Lessonly. What do you guys do?
Max: Yeah, we make training software, and we make training software for two specific teams, sales teams and customer service teams, in general. We focus on those teams. We call them customer-facing teams, so frontline teams. They have this constant challenge of maintaining this high bar of quality while the processes and the tools around them are constantly in flux. Training and retraining becomes this need, week over week, month over month.
We sell into those specific teams. We try to find the people who need us the most in the business, and that's them. That's different, because a lot of training software sells to HR. It's not that we don't ever work with HR, it's that that's not who we sell to, that's not who we target. We're not trying to do the horizontal compliance focused or manager training focused learning management system.
We call ourselves team training software, specifically focused on teams, and we believe those two things, and we've seen those two things can coexist in a business. You can have that horizontal learning management system that HR owns, but the sales team needs a specific training software that's purpose-built for them. Same with customer service teams. We're basically opening that up to, evolving the space to say one software doesn't fit all.
Mike: Make that tangible for me in terms of how I actually interact with your product. If I'm a manager of a sales team, and I bring Lessonly to help train my team, or help us share tips and things that we're learning from the market realtime, what does it actually look like? What do I do?
Max: I appreciate you asking that. Lessonly, in practicality, would work like this. Let's say you're moving from one lead distribution model to a different one. Account executives used to get leads a certain way, and now they get leads in a new way. You would write a quick lesson around how leads are going to be distributed. You'd make sure you put prompts in that question to seek people's understanding. Not necessarily a quick question, but it's like, do you get this? Throughout the entire lesson we have an ask button that's going to give the account executives the ability to ask questions as they go. This isn't meant to be, like, I'm not quizzing you. I'm telling you, I'm trying to educate you and I'm hoping that you understand. If you don't, I'm hoping that you tell me.
When they're done with that lesson, they're going to understand the new lead distribution mechanism. If there's any process they need to do, like, maybe they need to click a few, do a new workflow on a piece of software, you can teach them the new workflow and then you can ask them to show you how they do it. That's the practice portion of Lessonly. First you learn, then you practice, and then ideally that drives improved performance.
The learning happens with, I'm going to make sure you know a new thing. Then, I'm going to help you practice that new thing. You might pop on your webcam, practice your new pitch. You might turn on the screen recording software and record yourself doing an interaction. You might practice how you respond to an email. We've emulated email environments. We've emulated chat environments. We can put you in a specific situation and say, "How would you do this?" and you can give it a shot. Across different criteria we can say, "Good job, not a good job," and you know that criteria before you go in.
When we say not a good job, it's meant to say, "Here's a place you can improve. Here's why we think you can improve." The really cool thing about learning plus practicing is the practice content gives you new learning content. When somebody does a great job practicing, you might go through and do an excellent job pitching Lessonly on our sales team. We can then put that back in the learning and say, "Here's a great example of a great pitch by somebody who works here and does it well."
When somebody can see what good looks like, and they know that it's attainable because one of their colleagues did it, you know, this is not a wizard who did this. This is somebody who's sitting right next to them. They know they can do it too. By learning and practicing you build confidence, you build competence, and your performance improves.
Mike: Solid. Give me current status of Lessonly. Where are you guys at in the journey? You talk about key stats, [inaudible] metrics, whatever makes sense to help somebody's who's listening to understand where you guys are in this process.
Max: Yeah, I'll take you through the things that I think people generally ask when they want to understand where the business is at. They usually ask, how big is the team? So we have 100 people on the team today, the majority of which are in Indianapolis. 94 or so are in Indianapolis. A lot of people asked, have you ever raised money? We have raised money. We've raised about $14 million. I don't consider that interesting. I think you can raise a bunch of money and have it mean nothing. You can raise a little bit of money and have it mean nothing. You can raise no money and have it mean everything.
Mike: 14 million is a pretty good number for Indianapolis, so that is impressive.
Max: Yeah, that, to us, is basically, that is the spot where we want to be in so far as not raising more than anybody else. We want to raise the right amount, and I think everybody wants to raise the right amount, but it's easy to actually raise more than you need and to raise less than you need, and so far we've been really happy being capital efficient and remaining with growth. So we still have a lot of that 14 million. That was always part of the plan, and we intend to always have some of that 14 million.
Then, so we've got 100 people, $14 million in funding, 550 customers across the globe. Big, big, big companies that you wear on your clothes every day. Big, big, big companies that power the engines that take you from place to place in airplanes, down to small companies like us who you may or may not have heard of but that matter quite a lot. Every one of them matters, but they just vary in all sizes. The cool thing about our business is we can sell to a 50 person sales team or a 5,000 person sales team, and the fundamentals of what they need are the same.
The 5,000 person sales team might need different security documents. They might need us to make things scale at different sizes. Our application needs to be able to support 100,000 people at a time, that sort of thing that a 50 person company would never need. They might need user management stuff, but on the whole, all of those things provide value not just for the 500,000 person company but also a 50 person company. When we make a security update for the 500,000 person company, it benefits 50 person company. We make user management easier, it benefits the 50 person company. So that's kind of cool. They're different sizes but they have the same needs, and we can work on both of them without having to feel like we're building two different products.
Mike: I'm gonna go off script here a little bit because I don't think I've ever asked you this before. So I know what Lessonly today is, and you just described that. Has that always been what it is?
Max: Great question.
Mike: How close is what the company you're running today to the original vision when you first started out?
Max: Yeah, so as soon as it was decided that business to business is gonna be the approach, we were gonna sell training software to companies, two of the three things that we do today. We said we were gonna do three things. Now we do two, but it's a big difference when you drop that one. The first was basically just HR onboarding. So it's not that we don't do that with customers. They just have to really like our philosophy if they're gonna come on the HR side. It's like some HR philosophies don't fit us and some do.
We used to say we were gonna do onboarding, customer service training, and sales enablement. What we realized over time is if you want to build another cornerstone on demand, which is like the big gorilla in the learning management system space, you have to go wide and do a whole suite of HR focused tools. We want to build training software really, really well, so we want to stay focused on training software. We think a lot of people underserve. They kind of do it okay, and then they start doing other things, and it always just stays okay. We want to keep our focus on training software, so what we found out is by selling to those three different constituencies, two of them have a lot of common threads. Like I said, they're frontline teams. They're customer facing. Those common threads create a space for us to really go deep and provide a ton of value and you can't do both if you want to do any one of them well.
You can't serve the human resources needs that are much broader and serve the frontline team's needs. So we had to pick, and what we saw was there's 400 people who have already done the HR one, and there's very few people who have done what we're doing now. We love being able to evangelize that I know that you've learned over time and inertia has taught us that there's one training software company, but think about HRIS systems and CRMs. They're fundamentally the exact same thing. They're just built for two different constituencies in the company. One's built for HR to manage people data. One's built for sales to manage sales person data. They do the same dang thing, but you would never go and buy an HRS to use for your CRM, and you'd never go buy a CRM to use for HRS.
That's what we're doing here is we're differentiating similar fundamentals, but when it comes to the actual value, that's when the sprawl starts to happen. Then you can't try to do both at the same time.
Mike: So in the space that you're in, which is sales and customer service enablement and training, who do you think of, classically, as competitors in that space? You can name specific companies, you can talk about alternatives that maybe aren't software that teams are using today that you're trying to sell against, or whatever makes sense for you. But when you think of competitors to Lessonly, what comes to mind?
Max: Yeah, so our number one competitor, it's funny. What I'm seeing here, it's six years in. That's another thing I probably should mention. We're six years in now. That's kind of the thing that shows you where we're at. It took a real long time to get here, but it's been real fun. Six years ago, we were competing with the same biggest thing that we're still competing with today, which is Inertia. People just status quo. What we have to do is lower the effort that is required to create great training programs and put a real spotlight on the value if we want people to adopt it.
We've continuously, every time we release new software, every time we add a new component to our solution, whether that's services or that's templates for lessons, we're reducing effort to increase value. We have to keep doing that for a very long time so we can get the people who are, they want training to work without putting in much work. Today, training has an up front investment for it to start moving. I don't blame those people who want to do less and get more, and it's a good mission for us to serve them too. Right now we're serving people who are willing to put in that elbow grease to get the value and they start seeing that value very quickly once they do, but I want to make the hurdle so small you didn't even know you walked over it. That's how we're gonna be able to get all the companies that need training to be using Lessonly.
We have a mission that says, we want to help people do better work, so we should try to help the most people do better work. If we keep the effort high, and we keep the value where it is today, we're not gonna be able to do that at the rate we want to, so we have to reduce effort and increase value. That's how we're gonna beat Inertia.
But then when a competitor comes in the door, traditionally, we would have competed against document creation software, like Google docs, Word docs, PowerPoint and Google presentation software. Anything that traditionally has been document management or word documents, that kinda stuff. We can beat against that because that's where people tend to put their travel mileage if they're putting it anywhere, and we get them over the hurdle to say, hey. You need to be able to assign this stuff. You need to make sure it's consistently delivered. You need to make sure you can see who's seen it and who hasn't. You need to make it guided, because a Dropbox folder is not guided, and a bunch of Google docs are not guided. You need to make it interactive, not from an animation standpoint, but if somebody's not getting what they need, how do they tell you, and how do you manage that at scale?
There's a lot of things that those softwares can do that overlap with what we do, but there's some nuance that makes the difference. They don't have any intention of being training, but that's where people generally are starting. They're either starting with nothing or they have some Google docs and some presentations. Then there's other softwares now that are in the sales enablement training space or the customer service training space, and that's the cool thing. Six years ago, we didn't even really know we were gonna be there.
You start to see people, they stop asking, well, how is this different than Google? Why shouldn't I just do this in Google docs or why should I do this at all? They start asking, oh, so you're like that other person that I've seen before, or that other company that I've seen before, and that's good for us. Everybody's evangelizing the same thing. That makes me increasingly confident that we're in a space that matters, and now our job is just to make sure that our effort is less and our value is more consistent, and that we have a bunch of [profestomers] out there who sing the praises of us, so we bring more in.
Mike: Right. When you think about product roadmap, so fast forward in your head to Lessonly two years from now, which hopefully you don't have something to find that far out already. If you do, that's awesome. But when you think two years out into the future, how much of that is gonna be driven from maybe what the market is doing, what your competitors are doing versus what you see from your customer's needs and what they're asking for? How do you guys manage that balance, and do you have a formal process for how you look at that?
Max: Yeah, I think ultimately anything anything in the market is doing is a reflection of customer needs. Sometimes they're hypothetical and they're guessing. Sometimes they're validated, but if I see something happening in the market whether it's an analogous product that doesn't compete with us, but maybe has some overlapping fundamental ideas, that's a great place for me to go look and say, "That's really smart." Those people are focusing on a completely different area.
I can learn a lot from them. I can learn a lot from our direct competitors. I can learn a lot from a book about how people used to use looms in the past and the things that they did that were really smart that we can apply now. There's a lot of good ideas, and they're everywhere, and they're across time and space. I'm always just looking for analogies, and I want the team to always be looking for analogies. That's where we build the roadmap, but fundamentally, we focus on that decreasing effort, increasing value, which is so dang simple, but that's kind of the core of everything, right?
From that, we build things like the Better Work Method. That is the most tangible way that you can see our future. Better Work Method is a six step process for building a great training program. Starts with assessing what the needs are of the team, planning how you're gonna deliver on those needs once you decide what part of that assessment do you want to pick out and say, we're gonna tackle that issues. We're gonna tackle that need. Then you plan it. You say, "Hey, is this gonna be Mike and I doing this together and how many things are we gonna need to build? How many practicing hours are gonna be involved? Are we gonna do anything in a classroom, or are we gonna do it all on demand?"
You build that content, and then you learn, you practice and perform, and you repeat it again. Then you assess, how did we do? And you start over again. Assess, plan, build, learn, practice your form. That six step method influences all of our future project decisions. How do we make assessing, how do we reduce and compress the time to value for assessing? How do we reduce, compress the time to value for planning, building, you get the idea. Let's compress time in each one of those quadrants by adding new features and adding new services that make that possible.
Mike: Have you guys ever removed features from Lessonly?
Max: Oh yeah. Oh yeah.
Mike: Talk about that a little bit. When do you guys make that call?
Max: Yeah, we have a really, there's a lot of people who deserve credit any time we make that call. When I say, and I come out the posture that deserves credit, because it's always easier not to do something than to do it. I think it requires a bit of guts and fortitude to say, we're not doing that anymore. Sometimes we remove features because we frankly didn't build them well enough in the first place, and we weren't convicted later on that we should invest more time. That just means you pick up the phone and you call anybody who was counting on it, and ideally, not many people were, because that's why we put the minimal effort in.
You tell them why, and if you go and do that, and they hit you up and say, "Hey, why didn't we get any notice or anything?" You apologize and you tell them why. That's gonna happen. It's not something we've done a ton of, but when it does happen it's usually a reflection of we thought we wanted to go here. We decided we didn't want to go here, or maybe we integrated with something that at the time made a lot of sense. We used to integrate with a gif search engine, and that was really cool. I think it'd probably still provide value, but what we also found out is people find gifs kind of to be distracting in training, so we use them more minimally. We were kind of encouraging people to use them maximally. They kind of lost their luster every time people kind of got it. The novelty wore off.
When that API broke, we had other things to do, and didn't ever reprioritize building it, so we pulled it out. And there were still people who were like, hey, I thought that was really cool, and I totally get it. But there's other things that are also really cool that reduce effort and increase value in different ways, and we're gonna focus on those.
Mike: That's fantastic. When you look at the landscape of companies that you could potentially partner with. So I know a little bit about sales than I know about customer support, so I'm gonna focus on that. So I think of Lessonly integrated into the CRM potentially that I'm working on, except for I'm thinking just in time training needs or things like that, whether it's with the tool or with how you manage an account or an issue that might kick up. How do you guys think of just the landscape that you're in maybe not from a competition perspective, but a cooperation perspective where, us and them together can more aggressively go after this market or have a distinguishing value prop that allows us to compete against the big boys in the space or whatever the case may be. How much do you guys talk about that as a company?
Max: Yeah, quite a bit, especially with the advent of the Better Work Method. We call it the Better Work Method because our mission is to help people do better work. We believe when people do better work, they live better lives. I don't necessarily mean that somebody walks out of work having a good day and that has an impact that carries on for the next 10 years, but it certainly has an impact that carries on that day. They might take it in with them the next day, and they bring it to their families and their friends and there's that extra levity and extra confidence that walks with you outside of work.
So we think it's really cool. Helping people do better work would be good enough, but we know that when you do better work, you also have a better life experience. We've all known what it feels like to not be good at our jobs and to not love that going home. You don't just turn that off. You don't turn it off, your life off at work, and you don't turn your work off when you're living outside of work. So that's our mission. We call it the better work method because of that, and when we figured out those six steps, which is important, I think, for me to mention, we didn't come out of the gate with those. It's been in the past year that we've really dialed those in.
Mike: So one, I'm just gonna backtrack a little bit. That is hugely aspirational. As you were talking about the Better Work Method, how it impacts people's lives, it's a, for me, as a leader, it's one of the things that I suck at is the why.
Max: The why, yeah, sure.
Mike: Like why are you doing this? How does the work you're doing as an employee in this firm impact people's lives in a great way? I am totally not good at that, in a kind of old-
Max: I know how that feels.
Mike: A couple of podcasts ago, I can't remember which number it is, we had Dora Lutz on the podcast. She's got a new book coming out about aspirational businesses and she talks a lot about aspirational leaders and leadership. Dude, you are just spot on with what she talked about in that podcast in terms of defining the why and making it matter and stuff like that. So one, I just want to say, dude, you're on it. Keep doing that. That's amazing. I'm sure you've had some reps, but you did that perfectly.
Max: Thank you.
Mike: So where did that come from? Talk a little bit about, go back in time, like when you guys were developing that. Was that something that you clearly knew as a team that you guys needed to develop that and get more crisp about it and get tangible? Was it more of, how do we position ourselves on the market and you backed into it? How did you guys get there?
Max: Yeah, I really appreciate you asking that, because I think it's so important for if anybody heard that and felt similar to you of like, hey, that was crisp and clear to understand how long it took to get there. The many years that I was completely unsure of what the why was, like Mitch Causey, the third person who joined the team as our Director of Marketing, still the Director of Marketing today. His first day on the job, he's like, all right. So what's our why? Because I'm gonna build all the marketing around that.
I didn't know. I hadn't seen the Simon Sinek video, and when I saw the Simon Sinek video, I didn't feel any closer. I got it, but I felt I was at a different stage in my life than I think, probably I'm always gonna be insecure, but I was much different kind of insecure then. Really around not wanting to be a phony, and I'm still really conscious of never wanting to be a phony. Like don't do something that is not genuine to you, and if you do something that's not genuine to you, just be like, that wasn't genuine to me and I wish I wouldn't have done it.
Coming up with a why and kind of saying, hey, we matter straight out of the gate, I didn't have the confidence to do that or I didn't believe that I knew why we mattered. So Mitch was comfortable enough rolling with the punches for a year and a half, two years while we danced around it, while we guessed. I was like, "Mitch, I don't want to come to this disingenuously, because I think our customers will tell us. I think our experiences will tell us, and once we get there, we'll know it." He was comfortable with that and so encouraging with that.
We ultimately figured out that the better work side of things by just listening why would people come to us and be elated? What were they saying when they were elated? What were the learners who were taking our software saying about why they were glad they did it? It ultimately boiled down to, I'm better at my job now, and we know what it feels like to be better at our jobs. Or hey, I just don't have to guess anymore, and it's nice to not have to guess. It's cognitive load to guess all day. We only have so much willpower, right? Don't make people guess if they don't have to guess.
So it took time, and it feels crisp now, but it'd be a false indication that it always, don't get me, that it always did. I hope that helps. It was really slow, steady, and I wouldn't rush it. Going back, I'm glad we didn't rush it, and it worked just fine. But once we figured it out, it was like, oh, that's pretty dang clear. How we translate it into the Better Work Method, again, took another couple of years. That was a cross functional committee that I wasn't on. Their job was to figure out how do we take what we know today, which is really learn, practice, and perform, and encapsulate the other parts that aren't part of learn, practice, and perform, which we ended up realizing were assess, plan, and build.
They went into a room. They did sprints. They did two hours meetings, day over day, and I think when you do that, you kind of want those meetings to end, so you're really focused on what they're doing this time. But they came out of there, and when I got the first presentation on it with my colleagues, I was like, oh yes. I was just so appreciative. I had just loved that they did it, and now we're building the whole company value prop around it. When we think about acquisitions, when we think about partnerships, it all can be seen through the lens of, where are we strongest in the Better Work Method? What takes the most manual effort, and what is the most automated and beautiful, and how do we make more of it automated and beautiful and less of it take effort? Who can we partner with who does maybe the assess part really well right now, or who does the plan part really well right now?
Trello is really great for planning. People use it for planning all the dang time. I'm not saying that's the place we're gonna partner, but that's the lens we can now view it through because we have the clarity of the Better Work Method.
Mike: How successful do you think you've been taking, so I feel like you said about a year ago, right? That became really crisp.
Max: In the past year, yep.
Mike: Yeah. How, if at all, has that permeated from a product perspective how you guys think about what features you need to build, how you prioritize them outside of maybe the leadership team? Sure, if I'm sitting in a script planning session here at Lessonly, what does that actually look like? Is it gonna come up?
Max: Yeah, there's teams for each one of them. So Andrew Robinson-
Mike: Oh, right on.
Max: Yeah, Andrew, and some people on the assess team are also on the learn team. So it's not like they have to be mutually exclusive people. Andrew Robinson is leading our product efforts. He does an excellent job coming in and stopping the waterfall of nature of our work that had kind of come before that, where we didn't do small sprints and find value and experiment. We kind of just guessed and then we marched towards guess, and that can be debilitating and not very exciting.
He did an excellent job breaking the teams up, and we have a team for every one of those, and then we have a really an ops team that is the fundamental scale. Scale, security, that team, or that it doesn't fit perfectly in the Better Work Method, but it matters. So we have seven distinct teams, and so they come up all the time. When the learn team has something they're working on, we know why they're working on it because it's part of the learn step in the Better Work Method.
Mike: Interesting. If you know the details behind this, what's the process for managing those priorities across teams so that all seven of them are aligned on a specific feature or set of features that might be going out that might touch a handful of different-
Max: Yeah, no, that's a great question. Yeah, cross-collaboration and those teams don't have to, if you were on the learn team this quarter, you don't have to be on the learn team next quarter. Maybe there's a big tie between assess and learn discord or maybe we want to have similar people on those teams tackling those two different projects. By no means is it like, hey, we've dialed it in. There's a lot of communication. Andrew does a nice job of doing show and tell on a weekly basis and biweekly basis, so people stay aligned on here's what we're doing. Here's what we're thinking.
We're a small, big team. 30 people on the product team, give or take. There's good communication right now. We need to keep it that way. But yeah, you're right, that ops team is constantly communicating with every one of those parts because they need to make some structural changes to the API that are gonna be required.
But then there's, it's also important to remember that in order to know that in a certain quarter, we're not doing equal amounts of effort in all of those parts. We might do a lot in assess this quarter, because that's really how we think about it, is quarterly, every 90 days. We might do a lot in assess this quarter, and less in assess next quarter in order to have more resources in practice. Those are just two different parts of the Better Work Method. We don't need to give them all equal weight every quarter, because some of them need more attention than others, and some of them we have more ambition at certain times, in a certain part of the Better Work Method than in another. Does that make sense?
Mike: It does. Yeah.
Max: So that can help as well.
Mike: All right, I'm gonna switch gears. We've only got a couple more minutes. I wanna be respectful of your time. I wanna switch gears-
Max: I'm loving this. You go as long as you want.
Mike: To [crosstalk]. Yeah?
Max: I am. I like it.
Mike: All right, so I want you to think of your top five competitors, the people you think of as direct competitors to Lessonly.
Mike: You don't have to say who they are.
Mike: Do you have any formal structure to how you stay current on what those folks are doing? Like Google alerts, like anything you do on a regular basis to keep a diet of what the competition's doing?
Max: I personally don't have any formal structure, don't have Google alerts, don't go to their websites. I think everybody's different, so enough people on the team who are interested in that, do go to the websites, do share if there's a big move in the company. I'm not gonna be shy about saying that was a good idea that that company just, that was a good move that company just made, or hey, I'm intimidated by that too. I run on the thesis that your competitors should be good, and if they're not good, you're playing in the wrong league.
NBA players don't go play rec league so they can win all the time. They go play with other NBA players because they want to compete, and you know, the rec league doesn't pay as well, but you get the idea. You get the idea. It's not very fun to just trounce everybody. You want your competitors to be good. They keep you sharp. They'll teach you thing. It implies that you're in the league that you want to be. If your competitors aren't good, I'd be nervous.
So I don't want people to have a reality distortion. Glasses on, it says our competitors can never do a smart thing, because that's very silly. What'll end up happening is that will inhibit communication in the organization. If somebody sees a competitor do a good thing and they don't feel like they can say that was a good thing because our posture is the competitors never do good things. I don't know if you've ever seen that before, but I've seen companies take that posture of the competition always sucks. I find that to be a great way to make people feel really bad when they lose a deal to the competition, when that's gonna happen. So do we really want people walking around there feeling even worse for losing that deal when, I hear our competitors are good. We're gonna lose some deals.
Also, we don't want to, I don't want to do anything that restricts communication, and that if I put up the posture the competitors think we're gonna restrict communication, people aren't gonna tell us something we should know.
Mike: It's interesting. Your answer took me down a path mentally that one, got me thinking about The Hard Thing About Hard Things. Have you ever read that book?
Max: I have, actually. Just talked about it this week with a friend. It's been a couple years, but I really enjoyed it.
Mike: Yeah, so while you were talking about competition and how we react to our competition, it made me think about where Horowitz was talking about peacetime CEO, wartime CEO, some of the differences between them.
Max: Yeah, I remember him talking about that, the wartime though.
Mike: The wartime CEO is very much, like you're at war, right? So you're thinking that, and I think there were some very similar things in there. You can't assume, you're not at war if all your competition sucks, right? You have to have good competition to be considered to be at war. If all your competition was crappy, you'd be a peacetime CEO, right? So it's kind of interesting, while you're talking about that, it was taking me back to that book. I haven't read it in years. I probably need to dust it off. But that-
Max: Good memory, though.
Mike: Led me down the path of thinking, are you a crazy competitive market? When you think of going out and selling, are you walking into the room and like, you're part of a, when Lessonly shows up, you're selling against five other competitors who are all there at the same time, all trying to get in the door at this customer or prospect? Or when you show up, is it like nobody else is there, and we're not, the market is big enough and there's so few customers who are paying companies like us today that we can just sell. If we encounter somebody where the competition got there before us, not a big deal. It's still a wide open market. We can keep going. Where are you at from a market perspective?
Max: So there's a ton of green field in our space, and when I say green field, I mean first time buyers. Sales teams, customer service teams, traditionally have not had what we do and they want it. Especially once we come to them and say, "Hey, look what we can do." They're like, "Oh, I didn't know that existed. That's great." As they start to spend more, so let's say somebody comes through and spends 15 grand with us and we're the first one to meet them. They probably won't go do a lot of shopping. They probably won't go and do a lot of checks. It kind of depends on their culture in their organization about how that 15 grand is gonna feel.
As you start to make that 15 grand 150 grand, which that's what we do a lot more of now, you don't have people go, "Yeah, we'll just take you on your word that you're the best for our needs." They go shop. So as the dollar value goes up, the competition goes up. We have plenty of competition. We have good competition, but there's a lot of opportunity out there. So as we win one deal or lose the next, the world is very, very big. We're not all chomping at the exact same things.
So you can win one, I can win one. We all make real big business ese, and I'm not sure if that'll always be the case, because there's not always gonna be green field, I would imagine. I would imagine this is gonna be commoditized like any other healthy market becomes. It becomes commoditized, but I don't think we're anywhere near there right now.
Mike: Awesome. That's a great place to me. We experienced that on [inaudible] which is our commercial real estate product, and in a lot of cases, we're the first solution in the space outside of an Excel spreadsheet that a customer is looking at. When we look at when we do show up somewhere and there's, they're competitively shopping the product or something like that, it happens so rarely that there's somebody else that they're looking at that we're pretty confident we can win.
So it is nice when you have that versus a space where every deal that you look at, there's actively somebody else selling against you in the environment.
Max: You bet, yeah. We get a little bit of both, and I'll just add one thing. There is pros and cons to both. I think that's at least the case with anything. I think that our salespeople are probably go, it'd be nice if we were always evangelizing. There's a lot of evangelizing in a sale where you're a party of one, because there's a reason you're a party of one. You were there before everybody else in that case.
Mike: So you get to educate the customer.
Max: Yeah, yeah. To not be a party of one means there's probably more price pressure. The people know what they want, so they're shopping around. They know who they can get it from. There's pros and cons to both. I would always prefer to evangelize, but that's just my style.
Mike: Right on. That resonates with me as well. I don't know if you know we have a PEO.
Max: I did not know that.
Mike: That we run and I've been learning a lot about PEOs over the last year, and it's interesting. I went to, there's a national organization for PEOs where they talk about, at the last conference, they were talking about a study that they did. I'm gonna butcher these numbers a little bit, but in general, this is true that something like two thirds of the companies that are dead on target for a PEO, where a PEO makes tons of sense, right? They should, maybe they shouldn't necessarily be using a PEO, but they should be looking at it as an option.
Max: And for our first time listeners, what's PEO?
Mike: Professional Employment Organization. Think HR consulting company. They're gonna come in and help you with payroll, benefits, 401K, everything you need.
Max: I'll back off.
Mike: Everything you need to take care of your people.
Max: Great, thank you.
Mike: No, thank you. That's probably good. Good distinction. Basically, their studies showed that two thirds of companies in the market that could use a PEO and where it's a slam dunk, it's something they should consider are not using a PEO. So only one third of the available market is using a PEO.
Max: Good spot to be.
Mike: And then they went and looked at who PEOs are selling to, and almost every marketing strategy and sales strategy for the PEOs that they surveyed was, we go because we don't want to evangelize. We go poach the customers of the other PEOs in our markets. So when we go and look to who we're gonna sell to, we say, who's using a PEO today? If they're not using us, we're gonna go undercut our competitor by 10%, right? And just take them on price.
I look at that, and I'm like, that's insanity. It's insanity for a number of reasons, right? How you get them is how you're gonna have them, so if they'll leave one PEO for a 5% difference, guess how long you're gonna have. So that's number one. Number two, I look at the two thirds of the market that's wide open, and it's like, put me in. Get to your point. I'll gladly evangelize. I'd be happy to educate them on why we're better and the distinctions and the things that we've tried to specialize in and set ourselves apart in, why they matter, and why it's gonna be a different experience.
The ability to do that, you basically get to set the stage, so when the next person shows up to try to poach them, they're drinking your Kool-Aid, right? They-
Max: And you believe in that Kool-Aid.
Mike: I believe in it, yeah. Exactly. Yeah. It's not a script. It's something that we actually believe in, and that's why we're making those investments. True point. That's why we're making those investments. Anyway, that resonates with me a lot, and I think that that is uncommon. I think most people would prefer not to do the education based sale, to not do the evangelism, and would much rather go where somebody understands the product, they understand the the pain, and they can just walk in and get a deal done.
Max: Yeah, and I think that probably has a lot to do with having, you can more naturally see, I can more naturally picture ... Let's say I've never had any experience evangelizing. I can picture how it's gonna work in one of those worlds and not in the other. I can picture how it's gonna work going to sell to somebody who's already bought the thing. It's a lot harder to visualize and see through the challenges to the finish line of how much better it is once you do that hard work when you convince somebody that the new thing really matters and they go, you're so right. The new thing really matters.
That's a story that I don't think if you haven't experienced it, it's tough to imagine. You're probably gonna stop at the point of, it's gonna be more effort up front. Maybe it isn't gonna be more effort up front, but I don't know if that makes sense. I just think people, that's a harder story to tell, and it's also what's insanity to you to somebody else looks like smart lack of risk taking, low risk.
Mike: I'm sure it is.
Max: They look at you like, that guy's insane. That's the cool thing about the world is people are wired differently, and one man's insanity is another person's joy.
Mike: How do you do, if you're willing to talk about this, how do you guys do evangelization with your customers? What's the process you walk through when you're trying to educate a customer on what you guys do?
Max: Yeah, our Chief Sales Officer, Justin Fite, has a really neat ... He had made a really good observation early on that has really stuck, which is people don't buy training. They buy a solution to their problems. So you don't sell them training. You find their problems and you say, well, if we wrap training around that problem, it's gonna get resolved a lot quicker. You find their opportunities. We wrap training around that opportunity, it's gonna get there faster, and you don't sell training.
So it starts out with what are you working on? What keeps you up at night? What excites you about the future, and what is the limiting factor to you getting there? Training's probably gonna help, because what you want probably depends on a bunch of people being coordinated in their efforts, and training's all about coordination. So that's how you start the evangelization is, just like anything, you tie to the thing the person already knows. That's where the journey has to start, right? What is the story they're already telling themselves and how do we insert ourselves into that story to make them see that it'll be better, a better story if they'd come with us, or if they let us along for the ride.
Max: Is that what you were looking for?
Mike: Yeah, solid, man. I'm parsing your interest. Okay, so I suck at interviewing. Let's go back to the rapid fire questions, work through them.
Max: Oh, because we stopped doing that?
Mike: Yeah, I was following the thread.
Max: That's okay. [crosstalk] awesome.
Mike: Sorry. I need to get better at this whole podcasting thing. So do you guys leverage any third party tools or data sources for market analysis and what the industry is doing? Is Justin subscribed to any data feeds or anything like that where he gets regular updates or whoever in the organization that you know of? Do you guys do any of that?
Max: I'm aware that that happens. I am not informed enough to speak to it with any degree of authority, and I would be nervous about saying somebody was doing something that they weren't doing.
Mike: No worries. Do you do any, I think I know the answer to this, but do you do any general market evangelization outside of the sales cycle? Are you speaking at conferences and you, more in the Lessonly, less about [inaudible], but how active are you guys in the broader industry in terms of, this is the pain that we're solving. These are our strong opinions in the space. How much of that do you guys do?
Max: That's a big part of the business. I think that's our moral obligation to all of our teammates is to do that well from a marketing standpoint, and just from an education standpoint. While I would love everybody to be using Lessonly, I do really get excited when we convince somebody to do better training for their people, just to take it seriously. Training has such baggage. You think about a basketball player or just an athlete, training is what they do. That's how they perform. It is seen as a means to high performance and great personal improvement.
In the working world, training has been about compliance and protecting the company from the people. So we have to change the narrative, and that requires a lot of conversation. If we change the narrative, it's gonna ultimately benefit us, but if ever piece of it doesn't benefit us, people are gonna do better work anyway. I want people to do better work. It's fun when people feel fulfilled. It's fun when people are competent, and it's not fun when people are stressed. That's fewer people you have to go to dinner with who are complaining about their jobs. That's fewer people who I have around me who are not being served in the way that they should be served.
Companies hire people, and they want them to do good work. People join companies wanting to do good work, so what's broken about the equation? Well, the company doesn't do its part to teach people what good work looks like, and why would they assume that those people are just gonna magically come up with the formula for good work when they just walked in the door? But a lot of it is assumed. Well, you should just be able to figure it out. Yes, Mr. and Mrs. Employer, it'd be really helpful though if you told me a little bit. I'm not telling companies they have to have the playbook for every permutation. I'm telling them to start 1% at a time, being more explicit about what good work looks like, and a lot of good things will happen.
Mike: Yeah. How do you guys decide where you're gonna spend that time, whether it's conferences or places that you can tell the story and do evangelization?
Max: It really goes back to those client profiles of the sales teams, the customers, where are they?
Mike: So where are the customers?
Max: Yeah, where are they, and where is the noise around those customers? Where is it the noisiest, and let's not go there. I like to think about it, if somebody's playing a game, if there's a lot of people playing the same game, that's not the game I wanna play. So if we look at a roster of every competitor at a specific conference, I think the natural instinct is, well, we should be there too. I could probably argue that there's a lot of wisdom in that, but I could also argue that that's the last place we want to be, because not every one of our customers is there.
Where's the place where we can really stand out, where we can really shine, where we don't have to compete for 3% of somebody's attention? Where we could have the whole thing, where we could set up a dinner across the street from the conference where we invite those people who are getting a percentage of their time taken by everybody during the day and at night. We get to sit down with them and laugh and eat and have some great drinks and have a blast and get their full attention. That's what I want to do. I don't wanna be at a booth. I want to be at a dinner, yeah.
Mike: Was it Ericsson who was one of the guys who coauthored a human behavior thing, came up with the concept of 10,000 hours and all that? Is that, am I getting that right?
Max: I'm not sure who came up with that.
Mike: I know Gladwell popularized it, but I think it's like Anders Ericsson or something like that.
Max: That's a cool name.
Mike: I'll have to re-research that. So he talked about in those original papers, in that original research, he talked about the concept of purposeful practice, right? So you can't, go back to your sports analogy, if you're playing basketball, it's less effective. So if all you can do is go to the basketball court every day and play a game, that'd be great. You would probably get better over time, but you would hit a point of diminishing returns where just playing games, you'll stop seeing this determinant shift in performance.
Versus if you were doing purposeful practice where you're examining your performance and where it's at right now today and you look at where you're deficient, and then you spent two hours a day for three weeks just practicing free throws or just running so you're not as winded. Whatever it is, right? Wherever you're most deficient at that time, and then you specifically design exercises to get better at that thing, and then you're also playing some pick up games and stuff like that every now and then. That's where athletes just, you see them make huge leaps and jumps.
All of that, so taking this back to training, when I think of putting in reps and getting really good at something, is there anything that you guys either bake into Lessonly or is part of your customer onboarding for when a new trainer or you said, if users join Lessonly, that help them understand how to design lessons better? So that this idea of purposeful practice versus just putting content out there and just hoping that if people watch that content 15 times they're gonna get better. They're probably not.
How do you guys either bake that into the product or bake that into your onboarding experience so that you can ensure that the experience of Lessonly is as good as you want it to be?
Max: Yeah, great question. So first and foremost, we zero in on where do most training programs fall on their faces? Where do they get their shoes tied together and then fall down? That's usually at the build stage. So they identify the need that needs to be addressed with training, and then they stay in a vacuum building the content that's supposed to address that training need for weeks or months at a time. By the time it's done, it has been only sanity checked by the administrators, not by the people who ultimately need it. It probably wasn't co-created with those individuals, and it's probably six months too late or six weeks too late. If it's not too late, it's definitely been too long.
So what we do is we call it share before you're ready. It's actually a Lessonly value, and it transcends training, which is this idea of don't wait until you feel it's perfect. Don't wait until it's cast in bronze to find out that the arm placement isn't where it needs to be, because the bronze casting is far too late. So what we recommend is create an outline, create a rough draft, take an hour on that first rough draft of your lesson. Identify five people on the team who are gonna ultimately need to take that training. Let them know that you're sharing before you're ready. Find two or three of them who are newbies to the team. Find two or three of them who are veterans, and say, "What am I missing here?" I'm gonna go whole hog on this if you tell me I'm missing something. I need to know what I'm missing, and then repeat once you get that feedback. Go back again. Go back again.
Maybe tap different people each time, but find people who don't just tell you it looks great. Maybe it does look great, but if you're constantly getting "It looks great" from the same person, find somebody else, because what you need to know is where it doesn't look great and where it does look great so you can do more of it. So what we like to think about is, what are the problems that I can solve, but also what's working and understanding what's working is the only way you understand what to do more of. So you have to ask both things. What's working? What isn't?
That iteration cycle, it's just agile. It's just really just an agile approach, which is just rapid iteration. That is something that people are genuinely uncomfortable with because they want to do really good work, and the fear of looking silly or looking like you don't know is a great, great fear. Shame is a very, very powerful motivator, and to feel shame that I'm supposed to be creating the training on this and I don't know exactly how it's supposed to look is something that robs a lot of value from the learner if we don't get past it. Because you shouldn't feel ashamed that you don't know exactly how it's supposed to look. You should feel, this is a co-creation.
You might be the owner of it, but you need to know what the team needs in order to truly deliver on that. So don't stay in a vacuum. Get out of the vacuum and keep getting out of the vacuum. In a vacuum, you have one person's brain to do the job, and we don't see ourselves very well. We don't see reality very well. We need other people to reality test, so get out of the vacuum. Then the practice part is the other one, so share before you're ready. The really important part of building better training programs, but also just the practice on top of the learning. A lot of what traditional training software does is it does learning and then it expects performance to come.
What we've learned over time is that practice component in the middle, learning and then practicing, it's how you start locking stuff in. You learn something and then you apply it, and you get feedback and you get to apply it again, and you get to apply it again. You time delay the learning and the practicing. You learn something today, three days later, you're asked, in your own words, what's important about this thing? That's a practice. That's mentally bringing the information back to the forefront of your brain and retrieving it.
Or three days later or two days later, you say, "Tell me how you'd respond to x, y, or z question?" And you learned it two or three days ago, and it's like, oh, I had to retrieve that. I got to perform. I'm on a stage. But what we find is people don't love being on a stage in the practice session, but they do love the results. Once they see the results, later, they're doing it live in front of a customer and they're very happy they practiced. They made themselves a little uncomfortable in their practice session because they got to nail it in front of the customer.
So we actually, with a really cool survey, two different customers did this on their own. Did you enjoy the process of practicing? No. Well, did you enjoy the results? Oh yeah. Because it's not fun to practice. It's like, nobody likes to go to the gym, but we all like to look good. We like to be physically fit, and I'm not saying you have to be physically fit to look good. But I am saying a lot of people like to feel physically fit and look physically fit. But very few people are like, I wanna go for a walk or I wanna go for a run or I wanna lift some weights. That I don't think is any different when it comes to practicing, but you really do like the results and the results of the contagious part.
Mike: All right. I'm gonna move towards wrapping things up. So this next question has nothing to do with Lessonly. This is just about you. What are you jazzed about right now? What are you learning that has you excited that you can't wait to learn more of?
Max: I really like that question, because I just love talking about stuff that I'm learning. I do, I think it's so cool. So Steven Pinker recently wrote a book called Enlightenment Now, and the whole idea of Enlightenment Now is really rooted in this idea of we have a negativity bias. So we not only have a, so there's two things that this book is rooted in. Basically, I'll get to what the book's about and then I'll tell you kind of where it comes from. The book is that over the past 200 years since the age of the Enlightenment. Enlightenment's all about science. It's all about striving to be more rational because we're naturally irrational, so making more of an effort to be more thoughtful and more empirical, and then humanism, putting the human at the center of value.
Groups don't feel pain. Humans do, so we should protect humans. It's what we're rooted in in America, liberty and individuality. It doesn't mean we shouldn't be more cooperative, but it does mean we should protect humans. In the absence of humanism, you have religion, and religion has classically sacrificed individuals for the greater good of some deity. We'd never met that deity, and it seems like we should protect the people that we know, not something that we've never seen. So humanism's all about protect the things that we know and that we see have beating hearts and feelings.
This book's all about since the start of the Enlightenment era, we've made a ton of progress, but people don't seem to know about it. There's a couple reasons they don't know about it. When I say progress, I mean we're living longer. We're dramatically safer. We're dramatically less violent. We're actually more ecological, even if we have this big climate change. He argues that we need to take care of that. There's two things he argues that could really set us back from all this progress, and that's nuclear war, climate change. We have to do something about them, but we will only be inspired to do something about them if we understand how much progress we've made. If we think that progress has only doomed us, why would we want to keep progressing?
He talks about progress phobia, where we have this phobia that we only see the negative parts of progress and he says there's two reasons this happens. The availability heuristic, which is the idea if I have ten examples of one thing and two examples of another, I think that the thing I have ten examples of happens more often. The reality is I've just experienced that ten more times, five more times than I have the other thing. That doesn't mean it happens more often. It just means that I might have seen it more often. It doesn't actually have any reality. It's just what I've seen, but our brains don't think like that. They think, we have ten examples of one thing, two examples of another. The ten things must happen more than the two things.
An example of that is if I have a lot of news articles that talk about how violence across the world, and I only have a couple of news articles that talk about peace across the world, I think the world's really violent. The reality is, data doesn't prove that out. The world is increasingly less violent, even if we have these blips of terrorism that, they're tragic, but a lot more people are living than used to die. That's per capita. So I love that, because I have a tough time getting excited about the future if I think it's bleak and grim. I think I have thought it was bleak and grim, and this guy has helped me see that that's my availability. I have a lot of bleak and grim examples. The news doesn't stay the news by showing us good stuff. We don't come back to it if we don't think we have something to worry about. Fear is a powerful motivator.
I don't think anybody's doing this on purpose and I don't think anybody is necessarily doing anything wrong. I think we have to take the responsibility of ourselves to seek out different perspectives and to not be so influenced by anecdotal evidence. Then the second thing is negativity bias. Have you ever heard of the sandwich of, I'm gonna give you one compliment and then I'm gonna give you something to work on?
Mike: It has a specific descriptor to it. Yes, I've heard of that sandwich.
Max: Yeah, that sandwich. So what do they call that? Is it a curse word or something?
Mike: Yeah, yeah.
Max: So the reason that people, I think, it turns out that doesn't really feel good still is we weight negative sentiment three times more heavily than we weight positive sentiment. So if I give you three things of equal urgency or I guess implication, you're gonna feel the negative thing three times more than you're gonna feel the positive thing. That's just our, I think we want to stay alive. I think we're wired to stay alive and we're wired to seek out, to identify threats and things that don't feel good, we tend to fester on. The things that feel good, we tend to lose fast. I give you a compliment, and you're like, you forget it in an instant. I give you a criticism, you might carry that with you for seven days or seven years. It's just the way we're wired.
So with those two things, availability and our negativity bias, we have this warped perception of how well things are going. Does not mean we should not seek to understand what isn't going well so we can make it better, but Pinker argues we should seek to understand what is going well so we can do more of it. That approach is called appreciative inquiry. You can improve the world by finding problems and solving them, but you can also improve the world by pointing out what's working so we can do more of it. If people know what's working, then they have a model for what to do themselves, just like I told you earlier. You gotta tell people what good looks like if you want them to do it.
If we're only talking about what isn't working, we tend to thing nothing's working, so we need a good balance of what is working so we can have that cognitive load be lessened. It's really what you focus on becomes your reality. If you're only focusing on what isn't working, then it looks like everything isn't working, even if only 20% of thing's not working. You miss the whole 80% of things that are working. I am so enamored by this because you talk about what's working, people get clarity. When you talk about what isn't working, they get clarity on what isn't working, but what do you want them to have clarity on? What to do, not what not to do, right? Tell people what to do, don't tell them what not to do.
I want people that just live less stressed lives, and I think that perspective of let's focus more on what's working is not a Pollyanna. It's not irrational. It's really just about showing people what good looks like and showing people that things are worth fighting for, because we are, on the whole, doing a lot of things way better. You and I get to live a lot longer. We get to eat better, richer food, more plentiful food. We get to feed more people. A lot of good things are happening. So that's been on my mind.
Mike: Dude, that's awesome. All right, if people would like to learn more about Lessonly or connect with you online, where can they do those things?
Max: Thanks for asking. So Lessonly.com, L-E-S-S-O-N-L-Y.com, and then Lessonly on Twitter as well, and Lesson.ly on Instagram. We used to have a .ly, but then we bought the dot com. And then I'm Max Yoder, so it's M-A-X Y-O-D-E-R and that's on Twitter, and they can email me at Max@Lessonly.com as well. Thanks for asking.
Mike: Awesome, man. Thank you so much for coming on my podcast.
Max: This was great. I'm pumped that you asked me, and thanks for letting me do it.