The Exchanges

Q a lot, my friend, but I, I think we're shaped often a lot by our childhoods, and you know, I remember when my mother told me that she had MS, it was, it was a very impactful moment for me in terms of who I am. When you think back to your childhood, what was the most impactful moment to you in shaping who you are, do you think, Aaron?

A First of all, I'm very sorry to hear about, uh, your mom and her struggle. I do think a lot of people are often shaped by Adversity. And so for me, you know, for some context, so, uh, I'm Armenian American, uh, but I was actually born in Iran and I was born during the Iran-Iraq war. And so, you know, to this day, my mom still shares the stories of how, you know, while she was in the delivery room with me, you know, the sirens would go off in the city as the city was about to be bombed. And so they'd have to rush her down into the bunker, into the, you know, bomb shelter, uh, at the hospital. And then when the sirens were off and everything was clear, you know, they'd bring her back up. And I was actually born, uh, in that kind of environment. And of course, like, you know, many people at the time, we, we ultimately shortly thereafter, uh, immigrated to the United States to get to chase and live the, the American dream. And like, Most immigrants at the time. Yeah. You came here with no knowledge of the language, no jobs lined up. You really couldn't take any of your personal wealth. And so, yeah, I think about what my parents went through bringing three very young kids, uh, over to a new country and then having to learn a new language, find the job, make ends meet, uh, put food on the table and ultimately do everything they can to give their kids the opportunity of Pursuing and …

AI assessment note: “that weighs extremely heavily on me. I, uh, that's a incredible responsibility”

Q Dita and like, you know, SAS napkins on their wall. Uh, I told you not normal. Uh, uh, but I have to ask, you know, when we look at a business like service type, it looks all up and to the right. Did you have immediate product market fit? I'd just love to understand from those early conversations, from those early customers, was it always just up to the right?

A No. Every success story looks like an overnight success story. I mean, look, everybody's talking about Nvidia today, but Nvidia was founded 30 years ago, right? Probably in, I don't know, 93 or something like that. And for us, it was similar. The, the overnight success story, that overnight piece was like over a decade long. So I still remember our very first customer, what I mentioned about kind of the, the first yes, uh, this individual, John Akoyan. Today has one of the most successful plumbing companies in the country called Rooter Hero. You know, very large business. They do exceptional work for the community. And, but at the time, you know, he was a much smaller business than he is today, but he was still one of the most, you know, well-known Plumbing companies. And, uh, we earned the opportunity to meet with him, and we shared with him What we had built, but this was very early on. So it was nowhere near ready. And we very transparently shared with John, here is our vision. This is the solution we intend to build. This is the ROI that we think the solution will deliver for you. This is the small piece we've already built. The rest we have to build. Will you go on this journey with us? And, uh, you know, we were shocked that he was like, heck yeah, this is exactly what I need in this business. I believe in you too. Amen. And so he partnered with us and that began, you kno…

AI assessment note: “No. Every success story looks like an overnight success story.”

Q Versus a story. Cause what we're told is that people buy a story. They buy resonance. And like actually everyone sells data and everyone sells ROI. And it's just not that exciting when every lead generator says, we'll generate three times more leads. We'll do X. So what? Sell me a story.

A In our pitch, we lead with our founding story. There's a lot more credibility that it establishes I think behind anything we say following that, but the rest of the quote unquote pitch, the product demonstration is all ROI. It literally starts with something like, for example, Harry, how many technicians do you have grade 10? Okay. What is their close rate on their visits? What is their average ticket? Okay. You have a 50% close rate. Your average ticket, I'm going to make this up. Your average ticket is a thousand dollars. Our other customers have a 60% close rate. And a 1400 dollar average ticket. And so, if you are making, for example, four million dollars a year in revenue, if we could help you get from 50, 60%, and from a thousand to 1400, you know, we'll help you turn that three million in revenue to four and a half million in revenue. And that means you're going to take on an incremental, you know, for example, 200,000 at the end of the year in profit. How does that sound to you? Right. And then the customer of course says, wow, that's life changing. Now our ROI is often even higher than that, or at least, you know, what we propose to customers. And so then they want the product and now they want to understand how the product works.

AI assessment note: “In our pitch, we lead with our founding story.”

Q Help me here, because like, I'm very, very demanding. We just joked about like my intensity. I'm very demanding. And do you know what it's led to? Honestly, ARA has created a culture of fear. People are like genuinely scared, which I don't want. That makes me feel shit. How do I create that high intensity inspiration environment without having fear?

A So I'll give you an example from literally yesterday. I was on a Meeting with one of my product teams working on a new product that we're launching and things are going really well. It's just amazing product. And we're going to launch it at our upcoming user conference Pantheon. And so at the end of the great meeting, I asked the team, I'm like, so like, we are ready to launch this at Pantheon, right? And they're like, yup, absolutely. And I'm like, it's going to be stellar quality, right? Like I want Apple level quality. And they're like, the quality is going to be great. Um, But of course the quality will get better over time. You, you know, then they said like, all right, you asked us to get this launched by Pantheon. And the prior version of me would have probably said something on the order of, Hey, that's not good enough. We can't just launch on time. The quality has to be a plus. We're not going to sacrifice quality just to get something launched on time and you must do better, et cetera, et cetera. And organically, what I found myself saying is like, team, I understand we want to launch on time and with great quality. If I just wanted to launch anything on time without regard for quality, I would have brought in the B team, the C team, maybe even the D team. Anybody can launch anything on time without any regard to quality. But I brought in the A-Team, right? This is th…

AI assessment note: “I brought in the A-team, right? This is the A-team, right?”

Q No, no. I love a good story. How did that happen?

A We were part of an accelerator in LA called Mucker Labs, which is also a phenomenal program. And the guys at Mucker have been so instrumental in our journey. And, uh, Byron's team was present at our demo day. And at the time we were not necessarily convinced that we would ultimately take institutional money. We, we didn't understand the venture capital world. Yeah. We had some of the typical stereotypes in our minds that You know, these guys might be sharks and they're after our business. And I mean, it was all completely unfounded. That was the illusion we were under. And so we participate in demo day just to be able to show off, you know, what we were working on. And Byron's team was in the audience and Byron's team connected with us. And, you know, ultimately they saw potential in what we were building. And so they offered to connect us with Byron. And even though we didn't want institutional money at the time, We knew Byron was like the best early stage investor in B to B SaaS. Yeah. He had invested in Procore. Bessemer was also an investor in Toast, in Shopify, all these great companies that we were trying to mimic their journey. And so of course we jumped at the opportunity to get to talk to Byron Dieter. I remember his team set up a call and I hop on the call with Byron, with my co-founder Vahe. And, uh, Byron was probably in between meetings and he's like, all right, it…

AI assessment note: “Byron's team was present at our demo day”

Q Dita and like, you know, SAS napkins on their wall. Uh, I told you not normal. Uh, uh, but I have to ask, you know, when we look at a business like service type, it looks all up and to the right. Did you have immediate product market fit? I'd just love to understand from those early conversations, from those early customers, was it always just up to the right?

A No. Every success story looks like an overnight success story. I mean, look, everybody's talking about Nvidia today, but Nvidia was founded 30 years ago, right? Probably in, I don't know, 93 or something like that. And for us, it was similar. The, the overnight success story, that overnight piece was like over a decade long. So I still remember our very first customer, what I mentioned about kind of the, the first yes, uh, this individual, John Akoyan. Today has one of the most successful plumbing companies in the country called Rooter Hero. You know, very large business. They do exceptional work for the community. And, but at the time, you know, he was a much smaller business than he is today, but he was still one of the most, you know, well-known Plumbing companies. And, uh, we earned the opportunity to meet with him, and we shared with him What we had built, but this was very early on. So it was nowhere near ready. And we very transparently shared with John, here is our vision. This is the solution we intend to build. This is the ROI that we think the solution will deliver for you. This is the small piece we've already built. The rest we have to build. Will you go on this journey with us? And, uh, you know, we were shocked that he was like, heck yeah, this is exactly what I need in this business. I believe in you too. Amen. And so he partnered with us and that began, you kno…

AI assessment note: “No. Every success story looks like an overnight success story.”

Q Versus a story. Cause what we're told is that people buy a story. They buy resonance. And like actually everyone sells data and everyone sells ROI. And it's just not that exciting when every lead generator says, we'll generate three times more leads. We'll do X. So what? Sell me a story.

A In our pitch, we lead with our founding story. There's a lot more credibility that it establishes I think behind anything we say following that, but the rest of the quote unquote pitch, the product demonstration is all ROI. It literally starts with something like, for example, Harry, how many technicians do you have grade 10? Okay. What is their close rate on their visits? What is their average ticket? Okay. You have a 50% close rate. Your average ticket, I'm going to make this up. Your average ticket is a thousand dollars. Our other customers have a 60% close rate. And a 1400 dollar average ticket. And so, if you are making, for example, four million dollars a year in revenue, if we could help you get from 50, 60%, and from a thousand to 1400, you know, we'll help you turn that three million in revenue to four and a half million in revenue. And that means you're going to take on an incremental, you know, for example, 200,000 at the end of the year in profit. How does that sound to you? Right. And then the customer of course says, wow, that's life changing. Now our ROI is often even higher than that, or at least, you know, what we propose to customers. And so then they want the product and now they want to understand how the product works.

AI assessment note: “In our pitch, we lead with our founding story... but the rest... is all ROI.”

Q Help me here, because like, I'm very, very demanding. We just joked about like my intensity. I'm very demanding. And do you know what it's led to? Honestly, ARA has created a culture of fear. People are like genuinely scared, which I don't want. That makes me feel shit. How do I create that high intensity inspiration environment without having fear?

A So I'll give you an example from literally yesterday. I was on a Meeting with one of my product teams working on a new product that we're launching and things are going really well. It's just amazing product. And we're going to launch it at our upcoming user conference Pantheon. And so at the end of the great meeting, I asked the team, I'm like, so like, we are ready to launch this at Pantheon, right? And they're like, yup, absolutely. And I'm like, it's going to be stellar quality, right? Like I want Apple level quality. And they're like, the quality is going to be great. Um, But of course the quality will get better over time. You, you know, then they said like, all right, you asked us to get this launched by Pantheon. And the prior version of me would have probably said something on the order of, Hey, that's not good enough. We can't just launch on time. The quality has to be a plus. We're not going to sacrifice quality just to get something launched on time and you must do better, et cetera, et cetera. And organically, what I found myself saying is like, team, I understand we want to launch on time and with great quality. If I just wanted to launch anything on time without regard for quality, I would have brought in the B team, the C team, maybe even the D team. Anybody can launch anything on time without any regard to quality. But I brought in the A-Team, right? This is th…

AI assessment note: “I understand we want to launch on time... But I brought in the A-Team”

Q Do you think that would be the same?

A I highly doubt it. Anytime you're doing something new, going up market, going down market, building a new product, going into a new customer segment, you know, you're going from, you know, residential to commercial, or you're going from, I don't know, plumbing to roofing. I think the person leading the charge needs to be a maniac on a mission. Most businesses, uh, that have successfully done that kind of entry, it is typically been founder led. Now in some businesses, you know, they have extraordinary talent and there's some extraordinary star that has helped make that entry. But in most businesses that I've heard of, it's It's been founder led and yeah, the, the feedback loops are much faster. The agility is much faster. And when, you know, the CEO or the founder themselves build that kind of conviction, uh, in a market, in a product, of course, the organization is able to invest much more aggressively, um, in getting it done.

AI assessment note: “I highly doubt it. Anytime you're doing something new”

Q You sound like a bit of a micromanager. Pause, pause, pause. Jensen Huang is also, you know, Jensen Huang has 61 direct reports or 62 or whatever it is. Is micromanagement bad? And do you think that's a fair summarization?

A It depends on the definition of micromanagement. It depends on what qualifies as micromanagement. For example, if micromanagement is I, as the CEO make all the decisions. Yeah, it's terrible. That means either I have an incredible team around me and I'm a complete idiot and have no idea how to give them the autonomy to make a whole bunch of great decisions. Cause I can only make a finite number of decisions in any time period. Um, or it means the team around me is not good. Uh, in which case I'm a terrible leader for hiring, building and coaching a poor team. My job is to make sure I have a great team around me. So in both cases, I would have failed. Um, but if by micromanager, we mean I hire people who are much better experts than myself in their domains. Yet I am engaged and I talk to them to understand what their priorities are, to make sure their priorities are linked to the company priorities. And I understand how, what their plan is for executing these priorities. And from time to time, I can offer them, you know, an opinion that turns out to be a really good insight for how to get better outcomes. Like that to me is at least my idea of what good leaders do. I do not believe in micromanagement where the leaders make all the decisions, but I also don't believe in pass through leadership.

AI assessment note: “It depends on the definition of micromanagement. It depends on what qualifies as micromanagement.”

Q No, no. I love a good story. How did that happen?

A We were part of an accelerator in LA called Mucker Labs, which is also a phenomenal program. And the guys at Mucker have been so instrumental in our journey. And, uh, Byron's team was present at our demo day. And at the time we were not necessarily convinced that we would ultimately take institutional money. We, we didn't understand the venture capital world. Yeah. We had some of the typical stereotypes in our minds that You know, these guys might be sharks and they're after our business. And I mean, it was all completely unfounded. That was the illusion we were under. And so we participate in demo day just to be able to show off, you know, what we were working on. And Byron's team was in the audience and Byron's team connected with us. And, you know, ultimately they saw potential in what we were building. And so they offered to connect us with Byron. And even though we didn't want institutional money at the time, We knew Byron was like the best early stage investor in B to B SaaS. Yeah. He had invested in Procore. Bessemer was also an investor in Toast, in Shopify, all these great companies that we were trying to mimic their journey. And so of course we jumped at the opportunity to get to talk to Byron Dieter. I remember his team set up a call and I hop on the call with Byron, with my co-founder Vahe. And, uh, Byron was probably in between meetings and he's like, all right, it…

AI assessment note: “Byron's team was in the audience and Byron's team connected with us.”

Q Do you think that would be the same?

A I highly doubt it. Anytime you're doing something new, going up market, going down market, building a new product, going into a new customer segment, you know, you're going from, you know, residential to commercial, or you're going from, I don't know, plumbing to roofing. I think the person leading the charge needs to be a maniac on a mission. Most businesses, uh, that have successfully done that kind of entry, it is typically been founder led. Now in some businesses, you know, they have extraordinary talent and there's some extraordinary star that has helped make that entry. But in most businesses that I've heard of, it's It's been founder led and yeah, the, the feedback loops are much faster. The agility is much faster. And when, you know, the CEO or the founder themselves build that kind of conviction, uh, in a market, in a product, of course, the organization is able to invest much more aggressively, um, in getting it done.

AI assessment note: “I highly doubt it. Anytime you're doing something new”

Q What did you do to have that product velocity?

A What really helps is that Vaha and I are both engineers. That really helps in a business because then as founders, you know, roughly how long anything should take to get built. And so when you are contemplating what to build. Okay. Cause there could be, you know, 10 different ways of solving any problem. And there could be 10 different problems you want to prioritize. You can quickly do the math on this problem will be, for example, High value, but incredibly hard to build. This other problem will be roughly the same amount of value, but much faster to solve. And then exploring the options for solving the problem, you can quickly figure out which one, I guess, relatively quick to build, um, but also is good enough as a long-term solution or which one is like the perfect long-term solution. And so you can do this math really quickly and decide, these are the problems we're going to solve versus the others. And here's how we're going to solve them. Now, of course, when you're small and you're making all the decisions, that works really well as you get bigger. And then of course you have a leader under you and you have great teams. Um, they make the decisions, but you are able to add value in that conversation. And you know, when you know a particular domain, you are able to hire much better leaders. So, you know, we're incredibly thrilled with our CTO today. And I, I think, you k…

AI assessment note: “What really helps is that Vaha and I are both engineers.”

Q Does that mean you have a higher budget for CS than other teams?

A Yes, but it doesn't cost all that much. It's not like we're profligate in our spending or our investment in customer success. Maybe we invest a little bit more. But yeah, the customer success, by the way, doesn't happen just from customer success teams. There's only so much a customer success manager can do. If the product isn't good enough, like how many workarounds is a CSM going to advise each customer on if the product doesn't solve the workflow needs, or even if the product solves all the workflows, but those workflows are just workflows that don't have ROI associated with them. There's nothing that CSM could do to generate ROI. This idea of customer success, of course, is very significantly influenced by CSMs, but it is equally, if not frankly, Much more significantly impacted by the product itself. You have to be in an industry where there's an opportunity to generate like incredible levels of ROI and the product has to be built in a way. To make that happen. If those two things aren't there, CSMs can't do anything about it.

AI assessment note: “Yes, but it doesn't cost all that much. It's not like we're profligate”

Q You sound like a bit of a micromanager. Pause, pause, pause. Jensen Huang is also, you know, Jensen Huang has 61 direct reports or 62 or whatever it is. Is micromanagement bad? And do you think that's a fair summarization?

A It depends on the definition of micromanagement. It depends on what qualifies as micromanagement. For example, if micromanagement is I, as the CEO make all the decisions. Yeah, it's terrible. That means either I have an incredible team around me and I'm a complete idiot and have no idea how to give them the autonomy to make a whole bunch of great decisions. Cause I can only make a finite number of decisions in any time period. Um, or it means the team around me is not good. Uh, in which case I'm a terrible leader for hiring, building and coaching a poor team. My job is to make sure I have a great team around me. So in both cases, I would have failed. Um, but if by micromanager, we mean I hire people who are much better experts than myself in their domains. Yet I am engaged and I talk to them to understand what their priorities are, to make sure their priorities are linked to the company priorities. And I understand how, what their plan is for executing these priorities. And from time to time, I can offer them, you know, an opinion that turns out to be a really good insight for how to get better outcomes. Like that to me is at least my idea of what good leaders do. I do not believe in micromanagement where the leaders make all the decisions, but I also don't believe in pass through leadership.

AI assessment note: “if micromanagement is I, as the CEO make all the decisions. Yeah, it's terrible.”

Q I mean, that's called marriage, but sure. Um, uh, okay. You can cool yourself up the night before your first child and say, ah, you should know this. What would you tell yourself?

A This to parenthood is also incredibly hard, but I had no idea it would be this rewarding. Yeah, I'm very family oriented and I always wanted to have kids and many kids and, but even I couldn't imagine how rewarding it is to be able to cuddle with your kids and share the love, but also teach them. Teach them about principles in life, teach them about friendship, teach them about, I don't know, math or science, teach them about football and to see them learn. And you get to do this every day and you get that feedback loop every day, like them developing and growing. Uh, and also you make an impact in their lives is the most rewarding thing I've ever done.

AI assessment note: “I had no idea it would be this rewarding.”

Q Easy. How important is it to be viewed as the premium option? And what is your biggest lesson to founders who are the most expensive in a similar way?

A You can't just choose to be premium. You can become the premium product by delivering something that is incredibly valuable. We didn't choose to be premium. What we chose is we want to make this buying decision of buying Service Titan such a no brainer. And the way to do that is to make sure it imparts unconscionable amounts of ROI and value. When you build that much ROI into a product where it can make this like life changing difference in a contracting business. You then automatically earn the label of premium, but it has to be commensurate with the value. You know, we're not a clothing brand that just by putting, you know, by sourcing cheap materials, but putting a shiny logo on it, we can pretend we're premium. There has to be real quality in ROI behind everything we built to, to earn the premium tax.

AI assessment note: “You can become the premium product by delivering something that is incredibly valuable.”

Q hard. Like, fuck, when you have product market fit, just double down, make sure that the train runs fast, fast, fast. If I say, hey, Ara, let's do a second product, you're like, well, we need to do, like, go to market super well for this product that's selling super well, and the CSMs are inundated because we have, you know, a lot of people now buying a second product?

A None of these moments are like, Binary. It's you start with some level of investment in the second product. And then as you get traction, the investment level increases and the same with your first product. So would I wait until I have product market fit on the first product? Go to market is like perfect. Implementation is perfect. Everything is perfect before starting to Build the second product. I would risk being really late by doing that. Once we have product market fit and for me, product market fit, like means you are really, the only way you can have real product market fit is if you are really good at understanding the purchasing process. And the ROI case, and you have built the right product to support that ROI case. And if you have that, it means your pitch is good, which means you should have good close rates in ARPU. So it won't be perfect, but it's hard for me to imagine how your product market fit, like without. Doing a good job marketing and selling the product. Those two things are so correlated.

AI assessment note: “None of these moments are like, Binary. It's you start with some level of investment”

Q Does that mean you have a higher budget for CS than other teams?

A Yes, but it doesn't cost all that much. It's not like we're profligate in our spending or our investment in customer success. Maybe we invest a little bit more. But yeah, the customer success, by the way, doesn't happen just from customer success teams. There's only so much a customer success manager can do. If the product isn't good enough, like how many workarounds is a CSM going to advise each customer on if the product doesn't solve the workflow needs, or even if the product solves all the workflows, but those workflows are just workflows that don't have ROI associated with them. There's nothing that CSM could do to generate ROI. This idea of customer success, of course, is very significantly influenced by CSMs, but it is equally, if not frankly, Much more significantly impacted by the product itself. You have to be in an industry where there's an opportunity to generate like incredible levels of ROI and the product has to be built in a way. To make that happen. If those two things aren't there, CSMs can't do anything about it.

AI assessment note: “Yes, but it doesn't cost all that much.”

Q Easy. How important is it to be viewed as the premium option? And what is your biggest lesson to founders who are the most expensive in a similar way?

A You can't just choose to be premium. You can become the premium product by delivering something that is incredibly valuable. We didn't choose to be premium. What we chose is we want to make this buying decision of buying Service Titan such a no brainer. And the way to do that is to make sure it imparts unconscionable amounts of ROI and value. When you build that much ROI into a product where it can make this like life changing difference in a contracting business. You then automatically earn the label of premium, but it has to be commensurate with the value. You know, we're not a clothing brand that just by putting, you know, by sourcing cheap materials, but putting a shiny logo on it, we can pretend we're premium. There has to be real quality in ROI behind everything we built to, to earn the premium tax.

AI assessment note: “You can't just choose to be premium. You can become the premium product”

Q hard. Like, fuck, when you have product market fit, just double down, make sure that the train runs fast, fast, fast. If I say, hey, Ara, let's do a second product, you're like, well, we need to do, like, go to market super well for this product that's selling super well, and the CSMs are inundated because we have, you know, a lot of people now buying a second product?

A None of these moments are like, Binary. It's you start with some level of investment in the second product. And then as you get traction, the investment level increases and the same with your first product. So would I wait until I have product market fit on the first product? Go to market is like perfect. Implementation is perfect. Everything is perfect before starting to Build the second product. I would risk being really late by doing that. Once we have product market fit and for me, product market fit, like means you are really, the only way you can have real product market fit is if you are really good at understanding the purchasing process. And the ROI case, and you have built the right product to support that ROI case. And if you have that, it means your pitch is good, which means you should have good close rates in ARPU. So it won't be perfect, but it's hard for me to imagine how your product market fit, like without. Doing a good job marketing and selling the product. Those two things are so correlated.

AI assessment note: “None of these moments are like, Binary. It's you start with some level of investment”

Q What did you do to have that product velocity?

A What really helps is that Vaha and I are both engineers. That really helps in a business because then as founders, you know, roughly how long anything should take to get built. And so when you are contemplating what to build. Okay. Cause there could be, you know, 10 different ways of solving any problem. And there could be 10 different problems you want to prioritize. You can quickly do the math on this problem will be, for example, High value, but incredibly hard to build. This other problem will be roughly the same amount of value, but much faster to solve. And then exploring the options for solving the problem, you can quickly figure out which one, I guess, relatively quick to build, um, but also is good enough as a long-term solution or which one is like the perfect long-term solution. And so you can do this math really quickly and decide, these are the problems we're going to solve versus the others. And here's how we're going to solve them. Now, of course, when you're small and you're making all the decisions, that works really well as you get bigger. And then of course you have a leader under you and you have great teams. Um, they make the decisions, but you are able to add value in that conversation. And you know, when you know a particular domain, you are able to hire much better leaders. So, you know, we're incredibly thrilled with our CTO today. And I, I think, you k…

AI assessment note: “What really helps is that Vaha and I are both engineers.”

Q I mean, that's called marriage, but sure. Um, uh, okay. You can cool yourself up the night before your first child and say, ah, you should know this. What would you tell yourself?

A This to parenthood is also incredibly hard, but I had no idea it would be this rewarding. Yeah, I'm very family oriented and I always wanted to have kids and many kids and, but even I couldn't imagine how rewarding it is to be able to cuddle with your kids and share the love, but also teach them. Teach them about principles in life, teach them about friendship, teach them about, I don't know, math or science, teach them about football and to see them learn. And you get to do this every day and you get that feedback loop every day, like them developing and growing. Uh, and also you make an impact in their lives is the most rewarding thing I've ever done.

AI assessment note: “I had no idea it would be this rewarding”

Q How did you think about pricing? Because when you can move the needle for a business by a million dollars, two million dollars, like a take on that would be optimal. How do you think about take versus per seat pricing and customers willingness to have a take model?

A In any product that we are building, we always envision the ROI case of roughly How much ROI do we think this can generate for the customer? And then depending on confidence rate in that ROI, we will then determine what percentage of that ROI we think, you know, should be our fair share. And we're very transparent with customers about this. You know, this is the ROI case behind the product we are pitching you and what you are signing up for. By the way, we are signing up for that ROI case because our only job is to make sure you see that ROI. And we tell them, if we make sure you see that ROI, you will renew, you will never cancel. You will refer customers to us and it will give you conviction to buy all of our other pro products. And so this is all we're fixate on. We're going to help you get that ROI because then we're going to get all these financial benefits in return. And then we work with them to make sure they see that ROI.

AI assessment note: “we will then determine what percentage of that ROI we think should be our fair share”

Q How did you think about pricing? Because when you can move the needle for a business by a million dollars, two million dollars, like a take on that would be optimal. How do you think about take versus per seat pricing and customers willingness to have a take model?

A In any product that we are building, we always envision the ROI case of roughly How much ROI do we think this can generate for the customer? And then depending on confidence rate in that ROI, we will then determine what percentage of that ROI we think, you know, should be our fair share. And we're very transparent with customers about this. You know, this is the ROI case behind the product we are pitching you and what you are signing up for. By the way, we are signing up for that ROI case because our only job is to make sure you see that ROI. And we tell them, if we make sure you see that ROI, you will renew, you will never cancel. You will refer customers to us and it will give you conviction to buy all of our other pro products. And so this is all we're fixate on. We're going to help you get that ROI because then we're going to get all these financial benefits in return. And then we work with them to make sure they see that ROI.

AI assessment note: “we will then determine what percentage of that ROI we think... should be our fair share”

Q When you get back to the element on brand, did you see that have an impact on customer acquisition cost? Because there's the idea, as you said, everyone knows everyone. They all talk. Did you see, huh? We don't need to spend on marketing because everyone just talks.

A Absolutely. There's a very significant impact on customer acquisition costs and the efficiency of Google market motion, both in surfacing pipeline, you know, getting a lot of inbound inquiries as a result. Both through like direct referrals and just so much word of mouth that ultimately when a contractor is thinking about software, they decide to take a look at Service Titan. But then of course, in things like close rates, you know, when there's high conviction in a product, because you've heard so many good things, your close rates go up, but then also the willingness to pay the ARPU goes up and then the willingness to buy pro products goes up. People often ask me, you know, why is customer success so important? For me, there are two reasons. The first has nothing to do with like financials. This business is very personal to me. Um, I like to think like I'm a man of my word. And if I give my commitment to someone, you know, I will move the world to honor it. And so when these hardworking salt of the earth contractors who've built, yeah, great companies and it's their livelihood and their name is on the door, their legacy is on the line, their families are on the line. Man, I will do anything to make sure I deliver on my word and my commitment and make them successful. There's always, um, a small, but still meaningful chance that something can go wrong. Like even in those cases…

AI assessment note: “There's a very significant impact on customer acquisition costs”

Q When you get back to the element on brand, did you see that have an impact on customer acquisition cost? Because there's the idea, as you said, everyone knows everyone. They all talk. Did you see, huh? We don't need to spend on marketing because everyone just talks.

A Absolutely. There's a very significant impact on customer acquisition costs and the efficiency of Google market motion, both in surfacing pipeline, you know, getting a lot of inbound inquiries as a result. Both through like direct referrals and just so much word of mouth that ultimately when a contractor is thinking about software, they decide to take a look at Service Titan. But then of course, in things like close rates, you know, when there's high conviction in a product, because you've heard so many good things, your close rates go up, but then also the willingness to pay the ARPU goes up and then the willingness to buy pro products goes up. People often ask me, you know, why is customer success so important? For me, there are two reasons. The first has nothing to do with like financials. This business is very personal to me. Um, I like to think like I'm a man of my word. And if I give my commitment to someone, you know, I will move the world to honor it. And so when these hardworking salt of the earth contractors who've built, yeah, great companies and it's their livelihood and their name is on the door, their legacy is on the line, their families are on the line. Man, I will do anything to make sure I deliver on my word and my commitment and make them successful. There's always, um, a small, but still meaningful chance that something can go wrong. Like even in those cases…

AI assessment note: “There's a very significant impact on customer acquisition costs”