Scaling Responsibly w/ Founder Robert McLaws
Welcome to Episode 2 of SyncUp with SwagUp!
In this latest episode, SwagUp Head of Help Wade Lowe and BurnRate.io Founder and CEO Robert McLaws talk about the challenge of scaling responsibly.
If you’ve ever gotten frustrated trying to get answers from a spreadsheet, this episode’s for you! Join Wade and Robert as they dig into the trouble with relying on spreadsheets, the process of building a sales engine for your business, pitfalls of the traditional VC approach, and more.
💡 The Big Ideas
- Why 50 years of VC has not dramatically changed the success rate of companies
- How sales is an engine for the business that can be taught and scaled efficiently
- The invisible danger of the Ikea effect in spreadsheets
- How ‘minor’ spreadsheet mistakes become a $20,000/day problem
- Why you should always find (and solve) the problem underneath the problem
Robert McLaws is the co-founder and CEO of BurnRate.io, a company with a mission to level the playing field for under-represented founders and make it easier for companies to succeed. Robert is a 20 year software veteran, serial founder, and 5-time Microsoft MVP who's shipped code for Microsoft, Google, and HP. Learn more about the team behind BurnRate.
🎁 Extras
- Listen to this episode on SyncUp with SwagUp
- Connect with Robert on LinkedIn
- Connect with Wade on LinkedIn
- Explore BurnRate for your company
- See the case study on How BurnRate Uses Swag Packs to Take Care of Their Top Supporters
🚀 Get Started With SwagUp
Keep reading for a sneak preview of everything discussed in this podcast episode!
From the Apple IIc to Commercial Real Estate Tech
“I have been inventive, creative, entrepreneurial, pretty much my whole life,” says Robert McLaws, co-founder and CEO of BurnRate. Robert took to computers in first or second grade working on an Apple IIc. Later on he taught himself to program. At the time, Robert had a plan. He would do 20 years with the military, get a government retirement, and work on a startup.
But the plan, as best-laid plans tend to do, went awry. And Robert found himself wondering about his path forward. He realized he didn’t want to wait six years for a piece of paper just to get a job. “I hated that whole concept,” Robert says, “Shouldn't need a piece of paper to say I can go do something in the world. And so I said, I don't need to have that to be a programmer. So that's what I'm gonna go do.”
“Shouldn't need a piece of paper to say I can go do something in the world. And so I said, I don't need to have that to be a programmer. So that's what I'm gonna go do.”
— ROBERT MCLAWS, FOUNDER AND CEO AT BURNRATE.IO
After high school, Robert experimented with several entrepreneurial pursuits with his friends, including a marketplace for Thomas Kinkade art galleries, a residential real estate startup, and some consulting work. Along the way, Robert built one of PC magazine's top 100 websites for 2004: Longhorn Blogs. “It was the first blogging community for Windows,” Robert says, “I got to meet Bill Gates because of that. So that was me. Just done a bunch of crazy, weird interesting things along the way of trying to be an entrepreneur.”
And then Robert became a consultant to a commercial real estate tech startup called AdvancedREI. Little did he know this would be the prologue to BurnRate’s story.
The AdvancedREI Journey
At the time, commercial real estate tech was a relatively hot area. Robert’s co-founder financed the whole thing and originally only brought Robert on as a consultant. His job was to evaluate the software — built by someone else — to see if it worked.
It didn’t. So Robert went back to the drawing board. He worked to analyze what the software needed to do, what it couldn’t do, and then stripped it down to something that could work. “I was happy and content to be the tech guy,” Robert says, “My co-founder was in commercial real estate. And he sold commercial real estate before so I’m like, Alright, let him sell it. I can build the thing. I don’t need to worry about it. He’ll take care of it. I’ll build it.”
For the founders in the audience, this isn’t starting to sound too good. “Yep, didn’t work out,” Robert says. Assumptions are dangerous in the startup game and Robert quickly realized that there was a critical difference between building the product that his co-founder wanted and the product that customers wanted. And they were not the same product. But as they say, hindsight is 20/20.
“My co-founder was in commercial real estate. And he sold commercial real estate before so I’m like, Alright, let him sell it. I can build the thing. I don’t need to worry about it. He’ll take care of it. I’ll build it. Yep, didn’t work out. [...] My co-founder is not my customer. These people are my customers. Now I need to understand what they want.”
— ROBERT MCLAWS, FOUNDER AND CEO AT BURNRATE.IO
Robert worked on AdvancedREI for five years before it was clear that it wasn’t taking off. But while the startup may not have gained enough traction to keep going, Robert came away from the experience with more than a few insights.
One involved the importance of understanding the customer and what they needed. “As a tech person, I was building the software for my co-founder, assuming that my co-founder understood and did his research and did all the work,” Robert says.
“But that didn't really match up with what customers wanted. So when I rebuilt it, that was based on discussions and feedback and trying to get in their heads and understand, okay, my co-founder is not my customer. These people are my customers. Now I need to understand what they want.”
Another was a critical transition in how Robert understood sales. When it was clear that they weren't dealing with the right customer and that it was not going to work, the team knew they needed to do something different.
“We were two people. And I didn’t understand the sales side,” Robert says, “And if you're two people and something's not working out, then you gotta roll up your sleeves and figure it out. So that's what I did.”
“We were two people. And I didn’t understand the sales side. And if you're two people and something's not working out, then you gotta roll up your sleeves and figure it out. So that's what I did.”
— ROBERT MCLAWS, FOUNDER AND CEO AT BURNRATE.IO
They hired a sales team to help put the plans together.
“I’ve spent, at that point, 15 years of my adult life building apps that replace spreadsheets and the sales guys are like, Okay, we’re gonna build a spreadsheet for this. And we’re gonna build your funnel plan and your hiring plan.”
A light bulb went off. “It was like, wait a second, you mean to tell me we're 15 years into SaaS and there's not a tool to help with this? They're like, no, we'll just do it real quick,” Robert says. But Robert felt he was onto something. “I just kept stewing on that idea for a long time.”
The Creation of BurnRate
After AdvancedREI failed, the idea came back to Robert. His first thought was to create a due diligence platform for fundraising. In a similar vein to the AdvancedREI model that showed the investment potential in a commercial real estate building, the platform would show the investment potential in a company.
But Robert soon tossed that idea out. It was a nice-to-have, not a need-to-have, and Robert had learned from AdvancedREI the importance of building for the right customer.
Then in 2018, he went to the SalesLoft Rainmaker conference. As he sat in sessions on sales operations and listened to the problems people were having, he discovered everyone was using spreadsheets for their plans, while all the execution was in different tools.
“So if you want to know what the hell happened, and why you didn’t hit quota last month, it’s a two week project. You’re gonna dig into all these different systems and then see what you thought was gonna happen,” Robert says, “It’s ridiculous.”
“So if you want to know what the hell happened, and why you didn’t hit quota last month, it’s a two week project. You’re gonna dig into all these different systems and then see what you thought was gonna happen. It’s ridiculous.”
— ROBERT MCLAWS, FOUNDER AND CEO AT BURNRATE.IO
That was their way in. Robert knew he could solve the problem at a deeper level and not, as current existing models did, merely focus on the symptoms.
“A company is people. And when you understand every employee and their ability to generate revenue, and the cost associated with that on a person-to-person basis, then you understand more accurately how to be able to project what a company is going to do and how much it's going to cost,” Robert says.
But what’s so bad about using spreadsheets? Turns out it can get pretty bad. As in minor-mistakes-becoming-a-$20,000-per-day-problem kind of bad.
“81% of companies use Excel for this kind of planning, or some sort of spreadsheet, right?” Robert says, “[But] Google Sheets has no context of what the hell you're trying to do.” And that is the problem with spreadsheets, or what Robert calls the “Ikea effect”:
Ikea does not sell furniture disassembled to make it easier to ship. That's a common misconception. Ikea sells furniture taken apart because they want you to build a relationship with that piece as you're building it. So when you've constructed it yourself, and you sit in it, there's a sense of accomplishment. And Excel does exactly the same thing to people. It spits out numbers, it makes you feel like a god. And you can be totally wrong.
BurnRate is about removing the need for Excel mastery from the process of getting answers about your business.
“Excel and spreadsheets are a validation of ego,” Robert says, “And as a programming language, [t]here's no debugger, there's no tool that will tell you you're wrong.”
“So our whole concept is about taking that need to understand that programming language away from a sales leader whose job is to: A) know how to sell the product, and B) lead other people to be able to sell it and C) hire on time in order to make sure the team is scaling appropriately so that mishires don't screw the business.”
Want more BurnRate? Get the full story of how BurnRate is helping companies scale responsibly at the SyncUp with SwagUp podcast.
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