S8E17: Scaling back to scale up, with Elizabeth Cholawsky (CEO, HG Insights)

Richard Medcalf
Elizabeth, Hi, It's great to meet you.

Elizabeth Cholawsky
Nice, nice to meet you also.

Richard Medcalf
So I am looking forward to this conversation. I know you've since you've joined HG insights, a couple of years back, you've really made great steps in transforming the organization and you just completed an acquisition five days ago. So you're kind of right on that. On the cusp of a new chapter, I guess in the business, I'm looking forward to kind of getting in and finding out a bit about this, about your learning curve as as chief executive in this business. So before we do that, why don't you give us a quick summary, the elevator pitch, you know, what safety insights? And what's it all about?

Elizabeth Cholawsky
Yeah, yeah. So so he insights are were big, big data company and at the core, what we do is tell companies, and it for any company in the world, we can tell you the technology intelligence for that company, what are technologies they're using when they started using them when they stopped using them but the really interesting thing about HG Insights is that we get that information by mining literally billions of freeform documents every single month and we extract that information through machine learning for natural language processing and rule based algorithms to come up with the, with the insights that we deliver out to our clients.

Richard Medcalf
These are then used for by companies who want to kind of potentially market to, based on technology usage in a company, for example, is that right?

Elizabeth Cholawsky
Exactly and it's actually used in that kind of variation fairly broadly, for decision making in a technology company, you can imagine that if a company is trying to decide what next market to go into, or whether sales territories are equitable, or whether they just want to market, you know, do campaign that's obviously something that's applicable, but it's very, very blunt, broadly applied it at companies like Cisco, Microsoft, and SAP, all the big enterprise companies really understand how to make use of our our insights at this point.

Richard Medcalf
So what what attracted you to the company? Why did you move into you know, why did you go for this one for the next for the next journey?

Elizabeth Cholawsky
Yeah, yeah, that's a good question. If you look at my background, I've never been the guy to come in and start from scratch, the kind of really creative seeing something from nothing I have such respect for and he had a founder, Craig Harris, who really did that from the very beginning. In fact, the the company, HG stands for Holy Grail, because at the beginning, there was nothing but an idea that he could help people market better and you would go out and ask what's your holy grail of marketing data, and hence, it stuck with company. So when I was right before this, I was up in Silicon Valley running support.com, a public company and that was interesting and had its whole nother set of different dynamics but I got a call from one of the board members I do at HG who said, look, the company Craig's got it so that they're deep assets in this company but really, what we need is somebody who's passionate about getting them in the hands of customers, and creating products around them, and building a sales and marketing machine and that's, that's kind of right, right up my alley and what I like to do so I met Craig, I helped him a little bit with on a consulting basis to put together some stuff at the company, and then a quarter. So later, when he really wanted to step aside and hand the reins over I was I selected to be CEO and very, very glad that it all transpired like that.

Richard Medcalf
Yeah, that's, it's fantastic. Yeah, so often that happens, right? It is like a technical lead company that creates incredible assets, but they're not always scaled out right to the people multiplied out, in fact, and so and so. So that was your role. So So what was the biggest surprises that you discovered on this journey? You know, you came in, and things aren't always as you expect, perhaps, you know, what, what was what was that like for you that transition?

Elizabeth Cholawsky
So with, with HG insights in particular, I think the biggest surprise is that the revenue has been growing. Nice, nicely, not, not really. Not really hugely, but nicely and steadily, but it was always from something else and it was always a new idea, a new product. A new customer vertical and that makes sense in retrospect, you know, you've got a very creative set of engineers, and they're trying out all different ideas, that's what you end up with but I think that was a bigger surprise than I thought, because it really meant that the first first year of the company, I had to really focus it down into specific things that we could do going forward. It's an asset, because we just have an expansive opportunity of other types of insights that can be drawn out of our massive database and take them to market but that that was a surprise having and really refocus the whole company.

Richard Medcalf
Okay, so you thought it had some machinery in place, but it didn't really have a machine? It was more of a product factory, it was more of a project factory.

Elizabeth Cholawsky
Project factory, you'relooking at it? Yes. Yeah.

Richard Medcalf
Okay. Yeah. So that was a lot of kind of system. It took systematization, or process to put in by the sound.

Elizabeth Cholawsky
Yeah, yeah and that's continued and I think it continues for anybody that's building a company that scaling really rapidly, is system nation of everything in the end is, is really, really important and as you mentioned, we just did an acquisition. So we're about 145 people now, our company we acquired intricately was close to 50. So we're very quickly going to be over 200 people, and to really run a company well like that, and have everybody understanding what their role is, in growing the company and having impact on the company. It takes a lot in terms of putting the systems in place. In fact, I was just talking to, to our new colleagues yesterday, and telling them that. And I said to them, don't take don't don't hold this against me, but I'm a big fan of process. And the reason I'm a big fan of process is it takes the politics out of running the company, if you've got a process for hiring a process for promoting people, they're transparent. Everybody knows what to do. Everybody's judged by the same rulebook. It really, really makes accelerating in a time like we're at much, much easier and much, much happier for everybody that's working in the environment.

Richard Medcalf
How do you create process without losing agility?

Elizabeth Cholawsky
Yes, yeah. And that is absolutely the key. I think process without losing agility is creating the processes that people are going to use rather than the ones that you look up every seven months, because you're going to, you want to acquire a piece of software, that's going to end up $75,000 a year rather than $50,000 a year. And there's there's a different process for that. I mean, those, those kind of things are, to me are indicative of big companies when you get that detail on it. But when you think about the various things that you need to do to recruit and retain and to build products, just to take, how does new idea get into your product pipeline? A process around that opens up to the company so that everybody can contribute, as opposed to something that that is way too detailed and way too overblown? I think that's the the judgment I make on when processes and slowing down.

Richard Medcalf
Interesting. And so where was the company where you started? And where is it now? You know, what's the what's been the change in?

Elizabeth Cholawsky
Yeah, just in terms of terms of revenue, so just give it give you the highlights there, it was just we were just under 10 million, everything we do is Software as a Service. So it's we're just under 10 million annual recurring revenue. And last year, we topped out at 43 Point 3 million annual recurring revenue. So really nice growth in in four years. We were as smooth about 4045 people when I joined and now we're close to 115, intricately 200. So kind of magnitude, two orders of magnitude change in terms of the top line and the finances we were we were burning cash we we've came even profitable in 2019. So all the key metrics came along. But what was driving that underneath it is a change that one change that we made in our go to market. So when I got here we were driven 50% by channel partners and 50% by direct sales, and we're now about a little over 90% direct sales and less than 10% on channel partners. And a little bit we We still do some digital advertising products with our data.

Richard Medcalf
So tell me that tell me about that. I'm curious, because I know a lot of companies go, we need to scale, we need to just like, get the channel partners in. And that's how we're going to scale big time. But actually, you've kind of taken a different approach and kind of brought it in house. So what was the thinking there? Why was that the secret to growth?

Elizabeth Cholawsky
Yeah, that's really interesting that you pointed out like that, because you're right, that most of the time when people want to scale, they look at leveraging other other channels, the market and OEMs. And bars often fit into that, for what we were doing what what is really interesting, because we quickly realized that the insights that we have can be applied to really complex problems in technology companies, and working with our customers to show them how they can have such ROI from what we sell to them was very much. I won't call it custom, because we don't have custom products. But it was very much consultative process with the customers. And so we, we started building a release to sales teams and customer success managers, and realize the stickiness of what we were doing. And the depth of impact we could make on a customer was so much greater, we knew we could work with them and show them how to apply what we had to their problems. And then currently, we're looking at our channel partners who, you know, they skim the top of the surface of what we could do with data. And people are getting very confused out there. Oh, what's, what's lead space got that HG limit I should get from HG. And it would go into a long conversation. So in my my first year, I probably cancel them out 75% of our channel partners start starting with with one of the big ones in the art tech sales tech space right now, which was kind of fun, because you get this call, like you can't cancel us. And it's like, oh, yeah, we can. We don't need this because I see that we saw how much we could grow, and how much more value we could give to customers by going directly working with it directly.

Richard Medcalf
Yeah, so you bring expertise. I mean, it's one of the direct passion because this is your thing. Right. Robert is one of one on one of many on the on the truck. But it's like that sense of expertise and being able to kind of go deep with the customer. Yeah. Which which is great, because I love it. Because that's often often people forget that, I think and they they they're always looking for the next next client, but actually, sometimes slowing down and seeing how much value can we add to this one right in front of us right now can actually be the secret to growth, right? You don't need to run around, always to find.

Elizabeth Cholawsky
Yeah. Another interesting thing, sorry, I didn't mean to separate this, but I get really, really great thing about how we approach that is it allowed us to take that, that consultative problem, and then build it back into our platform. So that then the automation can actually help to show the customers how to use our underlying insights and data. So it's, it's been just this great flywheel effect onto a direct sales team.

Richard Medcalf
Yeah. Okay. So by by going through the process with the customer, you can see how you can actually made that available is more of a systematic approach. Yes, exactly. Yeah. No, it's It's fantastic. So what was some of the surprises or challenges along the way? Right? Because I guess it's not all been smooth sailing. So what what was difficult for you as a CEO, you know, what, what did you find hard in that journey?

Elizabeth Cholawsky
One, having the patience to get there. So I I've always wanted in my career to solve bigger and bigger problems. So So I I aspired to, at Citrix running one of their lines of business before before that at ValueClick really looking at a whole media area for them. So I was always drawn to, to, to the bigger problems and the CEO role was kind of the end all be all of that because it's the CIA CEO is you know, it's up to you. You've got you've got problems and you've got to either solve them or if you don't, it's it all comes back to you. So I knew I wanted to grow into that role. But it I didn't know it was going to take take As long as it did, and not that I, I regret anything that I did in the various parts of my career, far from it, I know, I wouldn't change any of the choices that I made. But I don't know whether this is true for other other CEOs, I ended up going through, I call it Training of a lot of different areas in business just by working in different roles. So, you know, I've been CEO, cmo and VP of Marketing, I've been VP of product I've been been, you know, EVP of, of Client Services, I think the I run development teams, so So really, last time I got to the CEO role, I really felt pretty, pretty well equipped for it. But it was really, really going broad that that helped me to do that. And I give that advice to to others that want to get into a CEO role. It's don't worry too much about your career taking different paths. It's very, very good thing at the end of the day.

Richard Medcalf
Yeah, sorry. It's a direct line is not always the way. Yeah, yeah. What about the other tip for a CEO? So you mentioned there about being okay to, to go on the journey and to explore different parts and build the skill set. Once somebody's in the role as a CEO, what would be your top tip for them?

Elizabeth Cholawsky
So, couple a couple of things. Particularly if your first time and the role of the CEO, I would, I would get get help. Right. So you, there's a, you yourself, do this with CEOs to go out and really work with them as a as a coach. It's a cliche, but it is lonely at the top. I mean, you can't, you can't on almost any big decision, you can't sit down with your board, you're presenting to the board, they expect to have the answer.

Richard Medcalf
The involved parties right there.

Elizabeth Cholawsky
Yeah, they're not independent, you can't really do it with your team, because you're expecting them now solve the problem, but you can't put the burden of the decision on the team and so I found tremendously helpful executive coaches, when I first went to support.com, I had a really long guy and when I first got there, there was a choice of, I had to make a decision about the CTO who had been there for a long time and he was still contributing, but and I certainly didn't want to destroy the morale of the company and it was my executive coach that actually helped me work through an organizational structure of the company that would allow the CTO to can still contribute yet move him out of the role where he was causing, causing some issues and I don't think, you know, could I have gotten to that kind of perspective all by myself? Maybe, but it would have taken a lot longer than then working with somebody else in it, and particularly with a subject like that, you're not going to do that with your executive team, for instance?

Richard Medcalf
Yeah, it's funny, actually, I mean, sometimes coaching can be seen is a remedial thing. And, you know, like, ah, you've had somebody say, oh, you know, why would I? why would why would they need coaching? They're fine, you know, and the point is, No, it's my clients on top of their game, that they need coaching, you know, it's that they want an accelerator, or they want us anywhere, they want to raise the game of whatever they're doing just like any performer, so I'll slip you the check later.

Elizabeth Cholawsky
About that, you know, way, way before you and I, I think the other thing I'd say to see, whether it's a new CEO, or somebody that's into a new new CEO position, is to move quickly. I mean, that might sound sound cliche, like also, but make an impact quickly. Hire fire, acquire, whatever is right for the company that time, don't second guess your own instincts, just just do it. And if you make a mistake early on, you've got a lot of leeway at that point. At HG before I really even know the business. It was actually a week before I got on board, one of our partners approached us to be acquired and it was it was a big decision for me because I was going on on the opinions of a couple of people on the company, we ended up acquiring this partner pivotal IQ. So that was our first acquisition in 2018. We complete that in September. So and it was it was great, but I gotta tell you, you know, working with the board, they're like, Oh, this is interesting. This really out A pretty aggressive Moon for somebody has been in the seat for a couple of weeks. You know, from what I, when I look at it really, really looks right. And that's where, you know, trust, trust your gut you've put in the work to, and the time to get into the seat. And luckily for us, you know, the acquisition of pivotal IQ was another real accelerator with with hg. So, you know, hire fire acquire.

Richard Medcalf
That's nice. Yeah, yeah, move quickly out of it. So a couple of quickfire questions for you, as we kind of start to wrap up a little bit here. What's your favorite quote? What's the thing that's really shaped your leadership?

Elizabeth Cholawsky
Shaped by leadership? Or an output of my leadership? And this actually, my, my lesson philosophy is Ukrainian, actually and my grandparents were from the from give and so I've always drawn to this quote from Ocean's 11 and it's from skinny Pete and he says, if there's one thing I know, is never to mess with Mother Nature, Mother Love or mother freaking Ukrainians. And, and I use it sometimes as you know, when I when I make a decision don't mess with motherfreakin Ukrainians and all my my old ties to Ukraine, and I just hope everything turns out better than smoking right now.

Richard Medcalf
Yeah, yeah, absolutely. Absolutely. Yeah. Thank you for that. Yeah. What's Is there a is there an app or anything on your phone that you kind of find is surprisingly helpful, useful, addictive? Whatever.

Elizabeth Cholawsky
Yeah. Well, one thing we haven't talked about, and this is kind of what I do outside of work, and one of my hobbies is triathlons. So so I'm constantly and I've been doing doing triathlon since I moved to California and 96. So a lot long times. I'm always either training or recovering or doing something like that and there's a Garmin, watch it, you know, I live and die by it and so the Garmin application that's on the phone, and that's, that's the one I'm always checking you know.

Richard Medcalf
Always checking, metrics driven. I know you described yourself as metrics driven. Yeah, I've got a book that's really influenced you.

Elizabeth Cholawsky
Yeah, I've got one that's always at the top of my bookshelf and that's the hard thing about hard things from Ben Horowitz on people know that, but But you should read pages 111 to 113 because it tells you everything you need to know about product management, and it's one of the hardest jobs in the company and it's the most important, and he just nails it in terms of what you need to do.

Richard Medcalf
Perfect. Even the page references, I'm impressed.

Elizabeth Cholawsky
I actually quote those two product managers when they're stressed out off the reservation on like, three pages go recentes.

Richard Medcalf
Can you beautiful, beautiful. So what advice would you give to your 20 year old self?

Elizabeth Cholawsky
That I, I would probably say, you know, Don't drive yourself to perfection. Don't try to you know, get everything right all the time but I think about that, and that's the same thing I'm telling myself today. Come on. Give yourself a little more leeway.

Richard Medcalf
Yeah, yeah, it's funny. Yeah, we will go that high, perfectionist streak. It can be it's inspiring people, it can also be inhibiting sometimes as well and it can also just be that burden on ourselves. Always, always facing it. Yeah, the way I like to hack people when they're kind of stressing about things like over perfection, I always say, Stop trying to be the high performing janitor and that's like, because you'd like you got business to run here. You don't need to keep polishing this particular floor tile.

Elizabeth Cholawsky
Like that. I might steal that if you don't mind.

Richard Medcalf
Yeah, okay. Yeah, you can use it. Last night, yeah but many of our best guests on the show come from referral. So I'm always curious. Yeah, to ask people like, you know, who's somebody who's an impactful CEO, who you know, who you've encountered in your career, who you might really recommend as a great guest for future episode.

Elizabeth Cholawsky
Yeah, yeah. I've been fortunate and have been helped by by so many people along the way but there's one CEO that I still go to for advice, and that's Michael Crandall. He's he's running a company right now called bit ordinates in the password management space, and it's, he's taken that from nothing to now dominant enterprise company, but he's done, done that at other companies, and he's just just the kind of guy that he can. If he has to fire somebody, he fires them and that person comes back and talks about how wonderful that guy is, and it was the right thing to do. He just has a way of running come Companies that make them great for the individuals and still still manages to accelerate. So he's got a lot of small base.

Richard Medcalf
Yeah, no, I love that is that yeah, that whole thing about the business as the people with the impact you're making in the world and trying to get people there things and balance is important and if you can do it all, it's great. So here's my favorite question. The one I always love, it's no matter how much we've achieved, there's always the next level to get to. So where does HG insights go from here as a business? You've just made this acquisition but what's next?

Elizabeth Cholawsky
Yeah, yeah, well, we're just getting started. So. So last, just about a year and a quarter ago, we got a very big investment from Riverwood capital. So a private equity company, and, you know, their help help. With their help. We did the acquisition, they have big, big goals for us, Jeff parks, the partner there keeps using the IPO word but we really believe that we can be the dominant comp company to solve complex business problems with data driven insights. So I don't think there's there's anything to stop us.

Richard Medcalf
Okay. So that's, there's plenty more the more fields to move into right with that as your mandate. Yeah. Yeah and what are you going to need to perhaps do differently yourself, Elizabeth, to multiply your own impact? You know, clearly, you know, you've achieved a lot in this company, and previously, but I think that we, the way that we work is, is our strength and it's also the what's holding us back. So I'm always curious, you know, what, what might you need to kind of work on do differently in the future to multiply your impact?

Elizabeth Cholawsky
Yeah, certainly, with with where the company is going, we're looking to scale past the 100 million dollar mark very quickly. One thing that I've thought about is, I really need to spend a lot more of my time and develop a lot more of my skills for external contact and that means means both changing the way I work and where I put my time, but it also means training the executive staff so that they're thinking like individual general managers, as opposed to, to just a functional area leader. So I've got to change kind of what's going on internally and then I've got to, I think, believe, learn new skills, or learn them again, to be more externally focused, work and working on both those things, both with my team and in getting out there more likely the pandemic is coming, coming to an end.

Richard Medcalf
More flexibility, at least Yeah, yeah, I went to the US a couple of weeks ago, and there were two great things that happen. One was I managed to get there, and one was the most to get back versus even then since then, you know, restrictions are lifted a bit more than it's a bit easier. So that's fantastic. So last thing is, hey, if people want to get in touch, we'll find out more about HG Insights or about you know, get in touch with you. How should they do that?

Elizabeth Cholawsky
Yeah, it's easy that I just go to our website, hginsights.com and my contact information is there. The emails are very easy. It's just first on last and the company name so happy to get any inquiries. I always love hearing other people's stories.

Richard Medcalf
Yeah, perfect. Well, hey, Elizabeth, I've enjoyed this, you know, this discussion. I think it's fascinating in the UK men, Father, you know, this business that had all this creative energy and you've been able to kind of apply process and structure it and you've seen that that energy has been now taking direction and as and as as, as you multiplied your revenues right already, and you're gonna go way beyond that and then I think this this point around, you know, actually make, you know, you actually you cut back, right, you know, you cut back from all the channel partners, the ones that were bringing in, off your revenue, right, in order to double down on the place it was going to create intimacy and customer insight for you to better deliver the business. So I think really interesting stories there. So thank you for sharing those with us and it's been pleasure to talk with you and so. Many thanks.

Elizabeth Cholawsky
Thank you for the invitation.

Richard Medcalf
You're welcome and I look forward to hearing as the journey progresses.