In this episode, Kyle Racki, co-founder and CEO of Proposify, talks about how his upbringing helped his sales career, the journey from being a freelancer to a founder, and how to create and maintain a competitive advantage.
If you missed episode 163 check it out here: Objections? You’ve Already Lost the Deal with Neal Patel
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Show Agenda and Timestamps
- Entrepreneurship isn’t in your genes [5:59]
- Why it’s hard to push back against your group [7:15]
- The journey from freelancer to founder [10:43]
- How to create and maintain a competitive advantage [15:32]
- Solving the innovator’s dilemma [18:31]
- The framework for leading a startup to success [20:45]
- Sam’s Corner [26:56]
Show Introduction [00:10]
Sam Jacobs: In this episode of the Sales Hacker podcast, we welcome Kyle Racki, the co-founder and CEO of Proposify. This company gives sales leaders visibility and consistency in their closing. Proposify helps more than 10,000 sales teams around the world eliminate the frustration caused by the proposal process. They also recently sponsored the Sales Hacker Podcast.
Before we get there we want to thank our sponsors.
Our first is Outreach. Check out Outreach on Outreach. It’s the place to learn how Outreach uses their own software. Learn how the team follows up with every lead in record time and how they turn people that attend virtual events into prospects.
You can also see how they run account-based plays, manage reps, and so much more using their very own sales engagement platform. Head to Outreach.io/OnOutreach to see what they’ve got going on.
Also, we’ve got another great sponsor, LinkedIn. Today’s virtual selling environment demands a new kind of approach, one that prioritizes the buyer above all else. LinkedIn is the world’s largest professional network with 722 million members. It is the only place where buyers and sellers connect, share, and drive success for each other every day. Find new ways to connect with your buyers virtually with LinkedIn Sales Navigator. You can learn more or request a free demo business.linkedin.com/sales-solutions.
And without further ado, let’s listen to my conversation with Kyle Racki.
Entrepreneurship isn’t in your genes [5:59]
Sam Jacobs: You started your first company at the tender age of 24. What was your background? Did you always have entrepreneurship in your genes?
Kyle Racki: I really didn’t have entrepreneurship in the genes. I never wanted to be an entrepreneur although in hindsight, I did a lot of things as a kid that probably were a precursor to entrepreneurship.
I had my own paper route, so that taught me how to keep a ledger and track expenses, all that kind of stuff. Also, I was raised in a very tightly controlled religion, the Jehovah’s Witnesses. We had to go door to door and actively try to recruit people into our cult.
Every week we would have sales and public speaking training on how to overcome objections, find common ground, and build rapport with what they call the householder, or we would call the prospect. This training probably helped later on in life as I got into entrepreneurship.
Why it’s hard to push back against your group [7:15]
Sam Jacobs: How comfortable are you talking about your experience with the Jehovah’s Witnesses? That sounds powerful.
Kyle Racki: I’m an open book. I literally wrote a book on it called Free Trials and Tribulations.
Sam Jacobs: How did you break free from that?
Kyle Racki: I was actually running my first business, which was a web design agency. And I was becoming disillusioned with the religion. The Jehovah’s Witnesses are pretty well known, but I think a lot of people don’t realize the extent of the mind control and manipulation that happens within the religion. I would probably put it very similar to Scientology if people are familiar with that. There are even interchangeable terms; somebody who leaves Scientology and speaks against it, they call them suppressive persons. With Jehovah’s Witnesses, it’s apostates — similar concepts, different verbiage.
Anybody who’s ever left the religion and writes about it or speaks about it being wrong is considered an apostate. So you develop this paranoia of even Google searching your own religion’s name because you’re not allowed to read any literature that’s critical of it. But that’s what I did one day. Within an hour, I was like, “Holy shit. I was raised in a cult.”
The journey from freelancer to founder [10:43]
Sam Jacobs: What was the journey from having your own web design agency to now running a hundred-person company all over the world?
Kyle Racki: When I started the agency, there wasn’t really a grand plan, other than I had been freelancing a bit prior to that. I enjoyed the freedom that came with entrepreneurship, but I was sort of getting lonely and wanted a team. So I partnered with somebody I knew from an agency, Kevin, who’s still my business partner to this day. But I was really just winging it.
I was trying to learn what I could, but obviously, there’s so much to learn about entrepreneurship when you get into it. It’s kind of like surfing, right? You can’t just read a book on surfing and be good at it. You have to get out there and fail a whole bunch of times. It’s like that with anything.
I made a ton of mistakes running the agency, and it was never really that big. We never broke the 1 million mark in sales. We were about 10 people at our biggest, maybe 12. So it was a very small company and I made all these mistakes — not hiring correctly, not being able to build in recurring revenue, just always feast or famine, and trying to find the next project. We didn’t manage it very efficiently.
But one of the biggest mistakes I made was, we didn’t go all in on a vertical. We were just general purpose, web design marketing for anybody who could basically write us a check. As we were getting Proposify off the ground, the thing that I kept coming back to was, I don’t want to make that same mistake again. I want to be really specific about who we’re perfect for.
Picking a narrow beachhead to enter at the beginning was probably one of the keys to our success.
How to create and maintain a competitive advantage [15:32]
Sam Jacobs: What do startups do in order to sustain a competitive advantage?
Kyle Racki: If anybody is out there raising money, the first thing they should know when they talk to a VC is, they’re looking for any reason whatsoever to turn you down. VCs love to say, “What is your secret sauce?”
Nobody has a secret sauce. If you look at the companies that have succeeded and have gotten very big, it’s the ones that had a clear idea of what they wanted to do. And then they executed like hell.
Who couldn’t have created Slack or Uber, right? Anybody could have created a chat tool. Why was it that Slack grew the way it did? They executed really well. I think that’s the only defensible moat that startups have — banking on the fact that Google isn’t focused on this right now.
Solving the Innovator’s Dilemma [18:31]
Kyle Racki: The only way to innovate is to try things rapidly and fail quickly. Take Netflix for example. There was no reason on paper why Blockbuster shouldn’t be the website that we all log into and watch movies every night. Blockbuster had it all — the cash, the brand, the catalog, all of it. But the executives were too staid in the old ways. This was written about in the Innovator’s Dilemma.
Once you get to a certain size, everything becomes about protecting the way you make money, or being romantic about the way you once made money. Netflix was different because leadership saw that, if we don’t disrupt ourselves, somebody else will. So we need to be the first to be streaming. They built the right team. And that’s what I mean when I talk about execution.
The framework for leading a startup to success [20:45]
Sam Jacobs: What are your leadership principles? What’s the framework that you use to be a CEO of a fast-growing startup company?
Kyle Racki: A CEO’s job includes three things:
- Build the vision
- Set the vision for everybody around you
- Repeat it constantly
Then don’t run out of money.
If you nail those three jobs as a CEO, everything else works out. But those three jobs are actually really hard even though they sound simple.
Sam’s Corner [26:56]
Sam Jacobs: Hey everybody. Sam’s Corner. Great conversation with Kyle Racki. Pretty brave and courageous of him to sort of let us into a little bit of his upbringing as a Jehovah’s Witness. It’s hard to go against the group. The group often is so dominating and to have the courage to speak your own mind and to go your own way is a demonstration of courage.
One of the things that we hear a lot on the podcast is about staying focused, knowing your ICP (ideal customer profile), and who your buyer is. And if you don’t know exactly who your buyer is and you’re trying to be all things to all people, inevitably, it becomes that much harder to find resonance. What you want is a message that is so clear and clean and understood that it does isolate.
You need people to say, “That’s not for me.” You want a clear signal that can only be repeated if it’s clean and easily understood and replicated. That’s how you build a strong signal that broadcasts out to the universe.
So great conversation.
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We want to thank Proposify for the guest.
We also want to thank LinkedIn. Find new ways to connect with your buyers virtually with LinkedIn Sales Navigator. You can learn more or request a free demo at business.linkedin.com/sales-solutions.
Of course, we also want to thank Outreach.
Once again, thanks for listening. If you wouldn’t mind giving us a five-star review, I would really appreciate it. If you want to get in touch with me, you can email me sam@revenuecollective.com.
See you next time.
