Ironclad Brand Strategy [logo] Ironclad Brand Strategy

North Star Leaders Podcast

Bill Richter

Season 2 Episode 11 2 Jul 2024

Transcript

Bill Richter:

The intense maniacal focus on the problem you're trying to solve. But the other half of that that doesn't get talked about is all the things that you're just not going to do, and you have to be as expressive about what you're not going to do as you are about what you're going to focus on.

Lindsay Pedersen:

The world needs what only your business can bring, and as a leader, it's your job to deliver. But where do you focus? Where do you direct your time, your team, your budget, and your emotional energy? We are learning this together on the North Star Leaders Podcast. I'll be talking to purpose-driven leaders about the choices they make to create audacious economic value while also realizing their distinctive purpose. I'm Lindsay Pedersen, brand strategist, author of Forging An Ironclad Brand, and host of the North Star Leaders podcast. Let's get to it. Today I am really happy to be joined by Bill Richter. Bill is CEO of Qumulo, which helps organizations store, manage and understand massive sums of unstructured data. Bill, welcome to the show.

Bill Richter:

Hey, Lindsay, thanks for having me. I'm thrilled to be here.

Lindsay Pedersen:

I'm really happy to have you here. Bill, to start us off, I want to ask you the question, what is your favorite thing about what you do?

Bill Richter:

It's the problems we solve for customers. Data is a pretty nerdy subject, especially at the technology level that we operate, but getting time with our customers and really understand the problems that they're solving is the kind of magical part of what we do.

Lindsay Pedersen:

I've heard you talk about your belief in long-term thinking and about creating enduring value for the customer and how at Qumulo you're building customer partnerships to extend for decades maybe, and I'm curious to hear your perspective on what's rewarding about that, and it's kind of a build on what you were just introducing.

Bill Richter:

I absolutely believe long-term thinking beats short-term thinking on in almost every scenario. I guess there's some exceptions. Part of that principle for us is what we do for customers. The data that problem that we're solving for customers is not ephemeral. It's not something that they're trying to solve for this week or this quarter. It's measured in years and sometimes decades. In many ways, data for an organization thinks about who manages their data the same way you and I might think about a bank. I mean, if I put money in a bank, I want them to be there, not just for this quarter or for this week. I need them to be in business for forever, effectively, and so we take that kind of customer mindset and then we integrate it into the way that we think about company building.

And the good news is that, I mean, that's not a sacrifice for us. That allows us to make decisions that we think will benefit the business, our team members and our customers in two years from now and five years from now and seven years from now, and we get a lot of positive reinforcement back from our customers that like, "Hey, you thinking that way and you operating that way allows us to put trust in you," and that creates something of a virtuous cycle and that's very powerful.

Lindsay Pedersen:

It sounds like friendship. It sounds like...

Bill Richter:

Maybe more like a marriage, so there's some tough moments.

Lindsay Pedersen:

Sure. And actually, this is what you were touching on earlier. Some of this is the nature of the problem that you're solving, that by its very nature it is ongoing and long-term. It's almost like the opposite of a single transaction. If there's a spectrum of this needs to work for a long time or this is just going to scratch my itch today, Qumulo lives on the long-term side of the spectrum just in terms of what the customer needs.

Bill Richter:

That's right. If you go on a vacation, you want a good hotel experience, but whether it's good or bad, it's going to last a few nights. When customers team up with us, it's like they're buying a home. They're thinking about, somebody in that marriage is pregnant and they're thinking about how that home's going to operate for their children and how it's going to be for their family members when they come and visit. What it's going to be like for family gatherings. This is a long-term way of thinking about the relationship. That causes us to think differently. If you're building a home for somebody, you think about the plumbing. You don't want them to have a problem in seven years with the plumbing. If you're trying to get someone to stay at your hotel, you're thinking about the curtains and the soap in the shower.

It's all important. It's just a different way of thinking, and our team really embraces those concepts. I mean, they obsess over details that would never be visible to a customer. One thing you have to get used to when you're operating that way is that obsession is sort of thankless in an overt way. So no customer comes to one of our engineers and says, "Oh my gosh. The fact that you built the plumbing in such a way is so amazing." The fact that they don't come to you, the fact that they don't have a problem is the reward. There's ways of measuring that and we do in terms of long-term customer satisfaction, but you do have to sort of shift your thinking in a way. Long-term thinking sometimes reduces the number of short-term positive feedback rewards you might get.

Lindsay Pedersen:

Yeah. I mean, I think as somebody who has had to replace plumbing in their house because it wasn't properly done the first time, a lot of that is removing a negative versus presenting a positive. I think the joyful things are putting in the new refrigerator that has a water dispenser and it looks really nice, and that's presence of positive. But the absence of negative is actually where it's really at from a value perspective, at least as a homeowner. The refrigerator doesn't get as much, but good plumbing does. So there's a psychology to being happy with the non-sexy, good plumbing.

Bill Richter:

Well, there is, and you're correct in that assessment in terms of the feedback that you might get. But for us, part of the company that we're building, part of what Qumulo means is a trusted brand and trust isn't built transactionally. It's built over series over a period of time. It's built in the tougher moments. On the other hand, with trust, the trusted brand allows us to go into some of the biggest companies on Earth and say, "Look, we can solve this problem," and say that with credibility, and customers are smart. They'll call their friends at other companies and say, "Hey, are these guys for real?" And it's the trusted brand that will allow customers to reference us positively and say, "Look, these are the people you want to go with."

And so those are the moments of the positive feedback. When I'm in the room, in the conference room with a big Fortune 100 customer and they're like, "Look." They say to me all the time, they're like, "Look, Bill, I know all of the other CIOs. I'm going to ask them." And I say, "Please." You know, "Ask them." And I say, "If there's any constructive feedback you hear from them, I want to know." And undoubtedly the feedback comes back and the customer says, "Hey, I called around and you guys are for real," and that's the real reward. Those are the payoff moments. But no, we don't sell a water filter.

Lindsay Pedersen:

What you're saying is really powerful, that for one thing, again, back to the friendship marriage analogy, trust is built. It takes long-term time horizon for trust to, A, be relevant, and B, be possible, and the best benefits come from deep friendships, wonderful marriage, so that trust, it's like the hardest thing and also the most life-giving thing in terms of the economic growth as well as the psychological charge that you get from being with your friend, being with your spouse, hearing from your customer that you deeply helped them and they are recommending you to their peers. That also feels like trust in a long-term setting is the only way that that can come forth.

Bill Richter:

Yeah. As we've built our company, I'll give you this interesting topic, and this might be a tangent, but I think it's relevant. We've bought a lot of SaaS applications over time, of course, like everybody, and you get the demo and it's really magical. It's like, "Wow, it automates this thing that was really hard before and your people are going to love it and save so much time." All this stuff that you typically hear. We buy the SaaS application and quickly it kind of becomes shelfware, and what I observe, and I always give this feedback... We're not a SaaS application company, we're an infrastructure software company. But the feedback I give to my SaaS CEO friends is like, "Hey, you guys should be obsessing over the first year experience of the customer and making sure that they've adopted your product and changed their business processes to leverage the full value of your product, because otherwise they're going to churn."

And the first response I get to that is like, "Oh, the product features do it all. You're just not using it, right. Your team has to really dig in." I go, "But if you think about that after the sale, you guys should be surging your training to get the organization to redefine the way that they work around your product for full adoption." And the reason why I mentioned that is back to these analogies, it's like, yeah, on the first day that I see that application, it's so cool, but if we're not really embracing it and changing the way that we work to get the full functionality of your product, everyone's going to look at it like a year later come renewal time and say like, "Oh, you know, we use it for this one little automation step, but that's about it," and we're going to churn. So I always tell them, "Hey, you guys should be investing more in training." And they're out trying to win logos and sell seats or whatever, and they get the sale and then oftentimes they'll move on to the next customer. I go, "Hey, gosh, you should think about that."

Lindsay Pedersen:

Churn is expensive. And it's interesting as a customer or in some cases as a consumer with this SaaS application, you can feel when the company is hoping you'll do all of the training. You can feel the, "Oh, it's your fault. You haven't figured out all the features yet." And you also feel when they take it upon themselves to ensure that you're getting the value that you can be. Like it really is a visceral sense of, "Oh, they see me as a wallet. They extracted cash and they moved on and said, 'See ya. Hope that you're smart enough to figure this out.'" And you can also feel it when they're like, "It's actually our job to make sure that you're unlocking all of the value of this." Just as a human being, and again, the friend or even acquaintance analogy, you can feel when somebody is just looking to extract something from you. You can also feel when they actually are acting as though they care.

Bill Richter:

Yeah, and I think, I mean more from just from a business perspective. I mean, gosh, you ought to be thinking about the renewal the day that you make the initial sale, and hey, what has to be true a year from now for that customer to happily renew? And that's hard. I don't want to trivialize it, but that's hard to think about. But if you do, you go, "Oh gosh." Like, "What's going to happen in 12 months from now? What are we working towards?" And if you thought that way, you might act a different way over that ensuing year, but I actually don't think enough SaaS organizations quite think that way. I think that's an opportunity area.

Lindsay Pedersen:

Do you think that that's an incentive problem? We're incentivized for the upfront sale. We're not as incentivized for the long-term. Or is it more of a philosophy, this is just what I learned to do?

Bill Richter:

Oh, I think it's definitely incentives. I mean, you're running a company, you're getting measured on net new logos, new business. You're trying to run an efficient go-to-market, so you segment your sales force and you have the net new logo people and very quickly you offload the customer because that seems more efficient on the spreadsheet. And look, I don't object to any. I think all that kind of makes sense. It's more of a notion of back to this theme that we were talking about, long-term thinking. It's like, "Hey, I'm asking this organization to adopt my tool but also adopt a new way of working and my value is intertwined with theirs and I want to think about how I can make them successful five years from now," And you have to overlay that with every quarter. You're trying to make progress and you've got the board meeting coming up and the metrics and all that kind of stuff, and so it's hard work. I feel proud about how our organization thinks that way, though, and we don't always get it right either, but we do obsess over kind of long-term customer experience.

Lindsay Pedersen:

Yeah. I've also heard you talk about focus and the power of focus. I think your phrase was focus is your friend. You've advised other entrepreneurs that. What's powerful about focus? Why is focus your friend?

Bill Richter:

When you're building a startup, and then even as a growth stage company, at the end of the day customers are going to pick you because you do something really special. And the trick of that is as an entrepreneur, you're also rewarded for having a big vision. So those things are somewhat opposing forces. Hey, I want to revolutionize this entire market and be the lead player in some giant category investors, and the marketplace gets excited about entrepreneurs like that. The starting point though with customers is solving one very specific problem 10 times better than anybody else. And so trying to balance those opposing forces is fundamentally hard. The one inherent challenge that any startup has over any big company is focused though a big company has 300 product lines and a lot of different big bureaucracy and so on and so forth. A startup gets to focus on one thing maniacally, and that's your advantage, and so we talk a lot about focus and being okay.

The other half of focus is the intense maniacal focus on the problem you're trying to solve. But the other half of that that doesn't get talked about is all the things that you're just not going to do, and you have to be as expressive about what you're not going to do as you are about what you're going to focus on. That's the part that often gets missed. And so we have another saying is at Qumulo when we're doing strategic planning, we often say, "Hey, strategy is what you're not going to do." And so when someone comes in and says, "Here's my 12 priorities or five priorities and I'm going to get really good at that and here's my metrics," we often ask each other, "Okay. What are you not doing?" And if the answer is, "Well, nothing. I'm doing everything," then we go, "Okay. Well, that's probably not a great answer. Let's talk some more about that."

Lindsay Pedersen:

Something that you said that just resonates so much with me is that permission and insistence that what we're not going to do is highlighted, and what I hear a lot of people who are not the CEO, so maybe executives or VP level people say is, "I'm told to focus on this, but the reality is they really want me to do all of these things," and the leaders who I see doing a really good job of this provide really explicit air cover, like safety to not do those things, like visible permission, actually using tools, whatever the tools are in that organization to say like, not only are these not on the strategic priority list, they're good ideas, but they're not great ideas, so they're going on the do not do list. I was just wondering, is there anything that you do to make it really explicit so that people are very sure that the focus is what they should be optimizing for, even if it feels like tempting to do some things around the edges?

Bill Richter:

Well, I think you have to elevate the conversation. You kind of led off there with an example of someone that's like, "Hey, I know I need to focus, but I also need to do a little bit of everything," and I think left unsaid, that's the general way folks will operate. I know you have a lot of CMOs as part of your audience. That's the function actually where I think this is hardest, right? Because if you think about a marketing function, it spans product, product marketing, creative, the whole tech stack, brand marketing, comms. I could keep going here. And look, a little bit of everything, even if that little bit is pretty good, isn't all that great. It doesn't really move the needle.

And so I think you're better off having the conversation saying, "Hey, look. At our stage, we're going to do really good product marketing because we have to connect with our customers and really show true credible value. Brand marketing is just going to be like tomorrow. That's going to be another day that's down the road. I'm not going to be doing that right now. And hey, Bill, if we come into some meeting and you ask me questions like, 'Well, what does our brand stand for ,and why does the color scheme look that way, and what is that emote, blah, blah, blah', I'm going to tell you we're just not having that conversation." And so that kind of dialogue I think is what sort of allows people to have the latitude to really focus and be as passionate about what they're not going to do as what they are doing.

And look, you get to adjust over time. Those things don't last forever, and at some point you're like, "Hey, we don't have five customers, we have 5,000, and we think our brand actually stands for something and we think that that's a powerful leverage point and we want to go invest in it." Okay, that's a great conversation to have. I think everyone's better off by not pretending that at a certain stage you could do a little bit of everything.

Lindsay Pedersen:

You just can't afford to. Like there's just not enough resources to do everything. Even huge companies are ruthless prioritizers, so if you have the advantage of being a small nimble company, you need to be focusing, too. You need to be serious about... One way I've heard you talk about focus, you made the decision early on with Qumulo to focus on enterprises and especially the tier one mission-critical applications. Not everyone, and not every use case. What's a mundane example or two of what that focus looks like day-to-day for you as the leader, how you apply that?

Bill Richter:

I'll give you an example. I'll try to keep it not too technical. Our technology, our product solves at-scale problems for customers. That's where we really shine. So the bigger the data set, the more differentiation we offer. That's what we built. That's the problem we are trying to solve. What happens, I mean, the way that this really plays out is we're also a customer driven organization. That's a core value at Qumulo. It literally is painted on the wall. Customers are our magnetic field. We want to get energy there. We want to learn how to define our roadmap through the voices of customers. We obsess over them. I could go on and on. So what happens when a customer says, "Hey, I love what you've built. I just want a small scale version of it. I know you're really great at these big scale data sets, but I could see using it in this small scale use case."

So now you have some opposing forces. You're customer obsessed, but you also want to be true to your mission and customer and focused on the problem you're trying to solve. That's like where the rubber meets the road, and you have to tell that sales team that brought forth the opportunity, or even the customer, like, "Hey, love that you're enthusiastic about Qumulo. We're not going to do that, though." And those are tough conversations to have. I mean, who wants to say no to revenue? But we know that if we start re-architecting and sort of wandering into a market that we're not really passionate about, we're just going to dilute everything. I share that example because, look, pithy statements like focus is your friend seem obvious and always resonate, but the hard work is in the trenches when these things really happen and you've told your sales force, "Hey, go. We're here to win. Go out there and sell," and they bring forth opportunity, and we say we're customer obsessed, so if a customer asks, we're going to try to find a way to say yes, and you find yourself in these moments where you sort of step back and you go, "Hey, our principal here is solving this problem for these sets of customers and we don't want to wander from that."

I think the best way to do that though is just to elevate the conversation. Be transparent, be direct. Have the conversation, don't avoid the conversation. So weak statements are like, "Well, yes, but not now," and, "Yes. Why don't you go and architect something and see if it works?" And the sort of weak yeses or the weak nos is where you get into a lot of trouble.

Lindsay Pedersen:

The explicitness and the overtness of the conversation is really helpful, as is something you didn't say but I'm hearing is the leader, you, the CEO, modeling that, thereby giving air cover to everybody who's not you to do the same because that is a difficult conversation to have and a difficult set of revenue to say no to, but if the CEO is doing it, I can do it, too.

Bill Richter:

That's right. Some of that's about how you think about outbound and the product and the sales motion, but I think it also stands internally as well. I mean, we were talking a few minutes ago about the tech stack that's appeared inside of the enterprise. When I say that us as a company, our operating model and how many tools we have, and very often our team here will hear me say like, "Look, I'd rather have half the tools used twice as much. Figure out how to max the leverage of the tools that we have. Let them break a little bit. That's okay. You can have some spillover into spreadsheets. You can have some manual process. But don't try to buy a tool for every little part of the workflow because you'll end up with menagerie of stuff that's underutilized and expensive and you'll find yourself more busy than you were if you just didn't have those things."

Lindsay Pedersen:

Yeah. I love that. I love how focus sort of operates on a really high level, like what are we driving toward as an organization? What are our values? Customer centricity is one of them, and it also operates on more minute stuff like how many windows I have open on my computer. What's the design of our office? Do we have kind of a spare design in our offices or is it kind of messy? I can sort of see it operating on a lot of different ways that influence the way that we show up and the way that we bring forth our best cognitive energy.

Bill Richter:

That's right. I had a board member. This isn't mine, but I like to use it a lot. They say clarity is jet fuel for the organization. You'll get so much. People just want it. They seek it. Yes, we want to hire people that are comfortable operating in ambiguity. That's just the nature of life. But clarity is what really charges them.

Lindsay Pedersen:

I just love that. It's so intuitive, and it's surprising. It's interesting how I hear a lot from executive teams how much they're craving let's choose a lane, like, "What is our lane?" And it feels true intuitively, and yet it's very common for there not to be that clarity, so to harness it as your super fuel can unlock so much, and it makes people feel so much more meaning in their work, too. It's like it's good for customers, it's good for business, it's good for employees. I love it. Okay. This has been amazing. I have a few rapid fire fun questions to end on.

Bill Richter:

Oh boy. Okay.

Lindsay Pedersen:

Okay.

Bill Richter:

Go for it.

Lindsay Pedersen:

Okay. These are like one word-ish answers to these. What's your favorite dessert?

Bill Richter:

Apple pie.

Lindsay Pedersen:

What is your preferred morning beverage?

Bill Richter:

Coffee, and afternoon beverage.

Lindsay Pedersen:

Oh. Black with?

Bill Richter:

Black. Black. I have no time for cream and sugar and all that.

Lindsay Pedersen:

Okay. So a cup of black coffee in the morning, cup of black coffee in the afternoon. What is your favorite trait in another person?

Bill Richter:

Openness.

Lindsay Pedersen:

What was your first job?

Bill Richter:

Washing cars in my neighborhood.

Lindsay Pedersen:

What is a song you have had in your head in the last week?

Bill Richter:

Bob Marley.

Lindsay Pedersen:

Bob Marley. What a way to end. I love that. Thank you so much, Bill. This has been great. If I want to send people to follow you or Qumulo, where should I send them?

Bill Richter:

Oh, I'm most active on LinkedIn, and of course our website.

Lindsay Pedersen:

Okay. Qumulo with a Q. Okay.

Bill Richter:

Yeah.

Lindsay Pedersen:

Very good. It was so good to have you. Thank you.

Bill Richter:

Likewise. It's been a great conversation, Lindsay. I appreciate what you do.

Lindsay Pedersen:

Thanks for listening to this episode of North Star Leaders. Make sure you don't miss an episode by subscribing on your favorite podcast app. For show notes, transcripts and newsletter signup, visit ironcladbrandstrategy.com. Please join us again for another episode of North Star Leaders.

Lindsay speaking

About Lindsay

Lindsay Pedersen is a bestselling author and brand strategist with a scientific, growth-oriented approach to brand building. She has advised companies from burgeoning startups to national corporations, including Zulily, Starbucks, T-Mobile, Coinstar, and IMDb.

Her background as a P&L owner at Clorox fostered in Lindsay a deep appreciation for the executive’s charge: increasing the company’s value. There, she led mature, billion-dollar businesses and newly-launched categories, from Clorox Bleach to Armor All to Brita. In each case, she was solely responsible for increasing the business’s value.

Thanks to this executive perspective, Lindsay demands that brands be hard-working, disciplined and rigorous in growing a business. Her brand strategies are tested in the crucible of her proprietary Ironclad Method. Lindsay arms leaders with an empowering understanding of brand, and an ironclad brand strategy to guide choices as they grow.