Lloyed LoboCofounder of Boast.ai and Traction
Jon PenlandCOO at Kinsta
If you want to make a change in your career and start something on your own, go for it. But of course, that’s easier said than done as you must take many things into account and know how to prioritize.
The good news is that all successful entrepreneurs were once where you are today. They had to embrace failure and learn from their mistakes. But, they all had something in common: faith in their skills and devotion.
In this episode of Reverse Engineered, our host Jon Penland, welcomes Lloyed Lobo, the co-founder of Boast.ai and Traction. They discuss the stories behind these two companies and what made Lloyed interested in becoming an entrepreneur. They also talk about the importance of community and building connections and what it takes for a startup to succeed.
- Success doesn’t come overnight. It may sound like a phrase, but it’s a truth every business founder can relate to. Lloyed worked for a CEO who was caught up in the hustle machine and expected everyone from the team to work non-stop, without thinking about the employees’ well-being. After this experience, Lloyed wanted to create a mission-driven and people-first company. After his best friend shared an idea about a startup, Lloyed was all in. However, they knew there was a long road ahead for them. ”Startups are built in phases. Phase one is validation. You validate something; you get a small subset of people to try it out. The next phase is product-market fit. You expand that footprint to maybe 50, and the key metric there is retention. People who try it don’t leave; they love it. […] When people don’t leave, you have a product-market fit. The next phase is that you figure out product-channel fit. You figure out a scalable, repeatable channel to get treatment for customers. Then it comes to the point of scale where, ‘Hey, I’m going to spend 75% of my resources on putting fuel on the fire and 25% on trying new things.’ I love making that journey from validation to product-market fit to product-channel fit, and then, scale.”
- Building a startup is a team sport. Most business owners think they must cover all aspects of the business to ensure everything goes according to a plan. Even though that might be true at an early stage, there comes a time when you need to expand your team and bring in experts from various fields. As a business owner, you should be ”a Swiss army knife,” as Lloyed describes, but not in every situation and certainly not forever. ”Building a startup, a company, or a product is a team sport. […] It’s about learning how to work with each other and fill each other’s gaps. That is the most important thing because together you grow. If I want to be the best at everything, I want to be the best at one thing and maybe learn a little bit of everything else so that I can get by. But as soon as I find somebody better than me at that thing, I’m going to bring that person in to fill in.”
- Build a career around what you’re passionate about. Social media has spotlighted so-called “follow your dreams” influencers. We may argue on whether their approach is empowering or toxic, but the truth is that when you decide to move from the status quo and try something you believe can bring many benefits, you reshape your life. For those who want to make a shift in their career but don’t know how, Lloyed has valuable advice. ”If you want to know what you love doing, go and analyze the things that you repeatedly procrastinate on and hit snooze on. And then go and analyze the things that you do gracefully for hours, and you’ll ignore your family and everyone else for it. And for me, it’s been building Traction, building community, and helping people. And that’s always been the case.”
Today’s Guest: Lloyed Lobo, Cofounder of Boast.ai and Traction
Lloyed believes his life’s mission is to enable entrepreneurs to build world-changing companies through capital, content, connections, and community.
Who Is the Target Market of Boast.ai?
”It’s for anyone who’s innovating, building technology, new products, new materials, new services, and overcoming challenges. If you’ve got engineers on staff — whether developers or mechanical engineers — or tradespeople who are innovating — meaning developing new products, materials, processes, and technologies, or improving them — you can claim these credits. […]
It applies to all products and services. It could be vaccines. It could be robots. It could be drinking water. It could be a software as a service business. Our customers are in the software space, but we got customers in every sort of landscape from manufacturing to chemicals, pharma, biotech, agriculture, and hardware, but the bulk of our customers end up being software startups.”
The Story Behind Traction
”Traction is a community of entrepreneurs and innovators that we built as a nonprofit community to help these innovators and entrepreneurs access resources like content, advice, and connections to become successful because money isn’t everything. Your journey as a founder involves hiring, scaling, and getting to product-market fit, getting advisors, hiring people, and all kinds of challenges.
And so we built that community to bring people together so they can share ideas, exchange resources, and propel one another to success because ultimately, without innovation, the world doesn’t progress.”
Success Comes When Passion Meets Profession
”Everything I’ve done successfully is because I elevated the things I’m good at. I love to play the piano. That’s my passion. If I go and try to learn the guitar, I may be mediocre or good at it, but not the best at it because that’s not my passion. But if I focus on playing the piano because I’m passionate about it, I’ll be great at it.
So if you want a shot at being great at something, especially in a startup, do things you are genuinely skilled at, good at, or great at, that you’re passionate about, and everything else you can learn to fill the gaps.”
A Startup Founder Is Like a Swiss Army Knife
”So it’s very important as an early-stage founder to dip your toes in many things and be that Swiss army knife. Otherwise, you’re trying to hire experts, and it never works out. Every time you add more people, speed gets reduced. Decision-making gets reduced. So it’s important to be a Swiss army knife.
And then, as you traverse the phases from validation to product-market fit to product-channel fit and scale, you start bringing people in. So then you go from being a Swiss army knife to a specialist. You just need to know when to make that journey. And if you go from being a Swiss army knife to a specialist too soon, you’ll slow down decision-making and speed in your company.”
[00:00:00] Intro: This is Reverse Engineered.
[00:00:04] Jon Penland: Hey everyone. My name is Jon Penland, and Reverse Engineered is brought to you by Kinsta, a premium managed hosting provider. In today’s episode, I’m speaking with Lloyed Lobo, Co-founder of Boast.ai and Traction. Lloyed, welcome to Reverse Engineered.
[00:00:17] Lloyed Lobo: Hey, thanks for having me, Jon. I am super pumped.
[00:00:20] I love the guitars on the back of your wall there. I love the background. I, for a second, thought it was a fake background, but yeah.
[00:00:27] Jon Penland: Yeah. That’s awesome. Yeah. No, I appreciate that because, yeah, the guitars again are personal touch that’s I used to play guitar back in high school and college and the shelves I built myself.
[00:00:36] So the fact that you thought it was a fake background is a real pat on the back for me. I appreciate that.
[00:00:41] Lloyed Lobo: It looks very pro.
[00:00:42] Jon Penland: Yeah.
[00:00:43] Well, I really appreciate you taking some time out of your schedule to hang out with me here on Reverse Engineered. And to get us started, can you introduce yourself to our listeners?
[00:00:52] Lloyed Lobo: Definitely. So my name is Lloyed Lobo. I’m the co-founder of a company called Boast.ai and Traction, which is a nonprofit community. So what Boast.ai does is, we automate access to government funding for innovators and innovative businesses. Each year globally, hundreds of billions of dollars are given by governments to fund innovation and R&D.
[00:01:14] But the application process is cumbersome, it’s prone to frustrating audits by the tax authorities, and receiving the money takes a long time because you’ve got to incur your R&D expenses, then file it with the government, with your taxes, then potentially get audited, and then you get the money.
[00:01:31] And Boast.ai, we set out to help them get money faster for less time and risk. More money faster for less time and risk. Our bigger vision and mission is enabling innovators to change the world and become successful. Every dollar invested in innovation returns 20 to the universe. From vaccines to robots to clean drinking water is a function of innovation.
[00:01:53] And so the way we serve that is by enabling innovators to become successful by giving them access to non-dilutive capital, which is money from the government by getting them more money faster for less time and audit risk in their day. So we can prepare these claims. We can finance them and defend them in audits.
[00:02:15] So as they’re doing their R&D through the year, we collect their data from the technical and financial systems. We figure out what qualifies. We not only apply for it, but we say, “You don’t have to wait for it to get it from the government. We can finance them.” And then Traction is a community of entrepreneurs and innovators that we built as a nonprofit community to help these innovators and entrepreneurs get access to resources like content and advice, and connections to become successful because money isn’t everything.
[00:02:47] Non-dilutive money isn’t everything. Your journey as a founder as an innovator involves hiring, scaling, getting to product-market fit, getting advisors, hiring people, all kinds of challenges. And so we built that community to bring people together so they can share ideas, exchange resources, and propel one another to success because ultimately without innovation, the world doesn’t progress.
[00:03:13] Jon Penland: Yeah.
[00:03:14] So what I hear you saying is that you are co-founder of two different businesses that tackle issues that founders and entrepreneurs face but in two different spaces. There’s the capital piece over on the Boast.ai side. There’s the community piece over on the Traction side. Is that a reasonable encapsulation of what’s going on there?
[00:03:36] Lloyed Lobo: That’s exactly it.
[00:03:37] Jon Penland: Yeah. So thinking about Boast.ai because I was checking out Boast.ai in preparation for this conversation, I was looking at your website and trying to understand what it is that you’re doing there. And who would you say is the target market of Boast.ai? I mean, I know it’s entrepreneurs, but is it also a product for small and medium businesses, or is it purely focused on folks who are in kind of that startup mindset?
[00:04:01] Lloyed Lobo: It’s for anyone that’s innovating building technology, new products, new materials, new services, and overcoming challenges. If you’ve got engineers on staff, whether it’s developers or mechanical engineers, or tradespeople who are innovating, meaning developing new products, materials, processes, technologies, or improving them, then you can claim for these credits.
[00:04:26] Jon Penland: Yeah. So are these credits..? The fields you specifically mentioned all immediately screamed physical product to me. Is this primarily physical product-focused, or is it also about digital services and products?
[00:04:38]Lloyed Lobo: It applies to all products and services. It could be vaccines. It could be robots, it could be drinking water.
[00:04:45] It could be software as a service businesses. Now the bulk of our customers are in the software space, but we got customers in every sort of landscape from manufacturing to chemicals, to pharma, to biotech, to agriculture, to hardware, but the bulk of our customers end up being software startups.
[00:05:05] Jon Penland: Yeah. So, so let me ask you a little bit of a perhaps controversial question here.
[00:05:10] Is, is there anybody that is not in the target market for Boast.ai in terms of thinking about companies or the companies that are just not going to be a good fit for what you’re doing their Boast.ai?
[00:05:21] Lloyed Lobo: If a company that is not innovating or not developing new products or technologies or processes or improving on them with their own labor in the US or in Canada, in the countries where these incentives are available, then they don’t qualify.
[00:05:35] So, perfect example would be you’re a startup that has all offshore developers. You can claim that money, or you’re a startup that just buy software off the shelf, and you’re installing it. Or you’re making minor settings adjustments to it. If you buy a piece of software and you’re saying, “Hey, there I need to extend the software, and there’s no instructional manual on how to do it.
[00:06:01] So now I got to write custom code to help it do, enable it to do X, Y, Z for me, capabilities.” Then you can claim it.
[00:06:08] Jon Penland: Yeah.
[00:06:09] Lloyed Lobo: So on the high end, let’s say you’re doing an integration with a third-party software. And that software doesn’t have an open API or connector to you. And you know, maybe it’s Walmart, for example. They have a manufacturing line.
[00:06:23] You need to build software that automates the manufacturing line, and ships like the best shipping rates on packages once they’re packed. But the system, the ERP system that they have, that controls that line does not have an API. And it’s all software. Now you got to write a custom integration. Now people would be like,” Integrations are straightforward.”
[00:06:46] No, but in that situation, it’s very custom. And now, if you come across that piece of technology anywhere else, you can integrate it without issues because you’ve done the learning here. So they’re paying you to learn new things for doing R&D and innovation, right? On the high end, you could be building AI software that parses through voice, video, text and provides real-time insights.
[00:07:09] So, for example, have you ever been called into a bank and you get bounced around so much? And you’re like, “Why I can’t this figure it out?” Right? And so, let’s say the system recognizes your voice, and even if you’re disconnected, finds the person who’s available and gives them the context to reconnect you, leveraging AI.
[00:07:27] So that is complex. And on the low end, it’s building an integration. So, you know, R&D is a bad word for these incentives because R&D implies you’re making something groundbreaking. What this money is for is experimentation, research, and experimentation. Experimental development meaning developing something new or improving something existing.
[00:07:46] I came upon a challenge that I couldn’t find the answer to in the public domain. I couldn’t Google search the answer. There was no open API. There was no playbook. So I had to rinse lather, and repeat and iterate and apply a bunch of things and keep failing and iterating and failing and trying and iterating to get to the end outcome.
[00:08:05] And for that time wasted, they’re giving you that money. And now the learnings from the time-waster you can apply to 10 other things.
[00:08:13] Jon Penland: Yeah, it’s funny. You said the example about the bank, and immediately, my mind went to a recent situation I had where I was trying desperately to talk to a physical human at a specific credit card company.
[00:08:23] And yeah, that technology would have been fantastic because I was extremely frustrated with that process. But the thing that occurs to me as I hear you talking about these credits for creating new solutions. And there was some specific pieces there, the United States, the Canada, some locational pieces.
[00:08:40] But the question that comes to mind, do you think a lot of businesses are leaving money on the table? Are there a lot of businesses that are operating that just don’t know about these possibilities? So the question is Boast.ai solving an educational problem or is it solving a logistical problem where businesses know about it, but it’s really hard to do, or is there also this educational piece where businesses just don’t know that this money is out there, that they could potentially qualify for?
[00:09:06] Lloyed Lobo: It serves both. Right? So in the US, I would say like 50% of the companies don’t know this exists. For the companies that know that it exists and that are claiming, it’s a cumbersome process because you work with some accountant who comes in at the end of the year and says, “Tell me what you did in R&D that meets this scenario criteria.”
[00:09:24] Then you got to go and dig through all of it. Then you got to write documentation. You got to do time-tracking, and then you’ve got to fill out all these forms and provide it. And then you file it. And if the government decides to audit you, then you got to sit and explain to the IRS why this work qualifies.
[00:09:40] And through all that process from the first dollar you spend till you got it back, it’s a long time. And what we’re saying is we’ll plug into your technical systems. Jira, whatever project management systems use, your financial and payroll systems will stitch the two systems together.
[00:09:57] And we’ll see, based on payroll information and whatnot, what are the titles, what projects they’re working on, and automate that process. And because of that automated underwriting, we know how much they qualify for, and we can give them the money now and take it just later.
[00:10:12] Jon Penland: Yeah.
[00:10:12] That’s awesome. Yeah, no, I’ve been, not part of, but adjacent to some of those conversations happening internally. You know, how many folks do we have working on this? And what are they working on?
[00:10:21] Does that qualify? So I can speak to some of the challenges there, and yeah, solving that with some smart integration, with the tools we’re already using, Jira and job titles and whatnot. I could see that really cutting down on the labor involved in and increase the likelihood that it’s something that a business is going to pursue.
[00:10:38] Now, I am curious about your role at these companies today. So you, you know, you founded Boast.ai and Traction, but what’s your position within those companies today? What are you doing their day-to-day?
[00:10:49] Lloyed Lobo: Definitely. So when we started Boast, we bootstrapped the company to narrate figures in revenue, and I was doing everything from marketing to a product, to launching us. I did our first sales.
[00:10:58] I launched us in key markets like Silicon Valley or Vancouver or Toronto. We started selling through partnerships. I brought our first partner, a channel partner. And we wanted to do telesales and build a sales development team. I ended up being our first sales development person.
[00:11:20] I’m zero to one person, right? Startups are built in phases. Phase one is, what? Validation. You validate something. You get a small subset of people to try it out. Next phase is product-market fit. You expand that footprint to maybe 50, and the key metric there is retention. People who try it, don’t leave. They love it.
[00:11:38] They don’t just say, “I’m going to try it out.” To say, “I’ll try it out,” means your messaging resonates. You got message market fit. When people don’t leave, it means you have product-market fit. The next phase is you figure out product channel fit. You figure out our scalable, repeatable channel to get treatment for our customers, then comes to a point of scale where like, “Hey, I’m going to spend 75% of my resources on putting fuel on the fire and 25% on trying new things.”
[00:12:05] I love making that journey from validation to product-market fit to product channel fit and then scale. I’m not the guy who will optimize things, and I’ll say, “Okay, you know what? We figured this out. Let’s put fuel on fire and keep optimizing.” I’m not that guy.
[00:12:19] And so at Boast, I have done every little thing, taken it to product channel fit and hand it off when it’s at scale, whether it’s channel partner, whether it’s new product when there was new market. And so, I pride myself in doing that. At Traction, I had up the organization, and I run it. It’s a nonprofit community.
[00:12:37] We’ve got a hundred plus thousand subscribers. And we host two podcasts a week, two live webinars a week, dinners in different cities, and a big annual conference, entirely volunteer-run. And so I head up that. I do all the content and the programming from getting speakers. And, if you go to tractionconf.io, you’ll see every major CEO or C-suite from every major multi-billion dollar company from Uber to Shopify has been there.
[00:13:03] And so I do that outreach and content and building relationships, ultimately, what’s fun for me-and I say this often when passion meets profession, you become Michael Jackson because truly doing something you love, right, and you can be really good at it. My superpower is building community and connecting people.
[00:13:21] Right? And so I really love that. And so, I generally gravitate towards community. I have recently stepped on the board at Boast.ai. We brought in a new CEO, who comes up huge background with exits IPOs working at large companies, small seeing that journey from like 10, 15 million to a 100 million. And he has been a product and engineering leader.
[00:13:44] His name is Alok. He was top 25 software and product leader in 2021. And so my transition is full-time now focused on this Traction, nonprofit community.
[00:13:55] Jon Penland: I’m curious about the backstory of how you got where you are today. I was looking back at your LinkedIn profile, and it looked to me if reading between the lines, it looked to me like Boast actually started as some sort of like a capital generation type company and then eventually grew into what seems today to be more of a SaaS company.
[00:14:13] And then Traction seemed to be a bit of a bolt-on to that, which is now kind of morphed into its own thing. Can you talk about how all those pieces came together? What was that evolution like?
[00:14:21] Lloyed Lobo: Yeah. So my co-founder and I, Alex and I, are best friends. He’s my daughter’s godfather. I’m his daughter’s godfather. We went to university together.
[00:14:28] We’ve known each other since we were like 19 or 20 or 20, maybe. Right. We went to university together. We were partners in every project, and after engineering, he got into Johnson & Johnson’s engineering leadership program. There was software there. Then he did a startup and failed. And he felt like he failed because he didn’t have a hand handle on accounting and finance.
[00:14:47] And so he went back to school and learned accounting and finance, and so his unique combination of engineering and accounting got him into the accounting world. And when he worked at these Big Four accounting firms, they’re like, “Hey, you have a unique skill set. You’re an engineer, but you’re also an accountant. You can help us prepare these R&D Tax Credit claims because you got to write these long reports.”
[00:15:12] After engineering, I went into product at a startup. I only worked at startups. I’m not working at a smart, a bigger company. And then, I did growth at another startup. And then Alex called me. And he’s like, “Man, this whole R&D Tax Credit space is a multi-billion dollar industry. We should build something for it to automate and streamline it.”
[00:15:31] And I was having a bad experience in the startup I was working at or as leading growth. The CEO was not a very people person. He believed in this concept of what I call hustle work. Work, everyone. Work, work, work. And first-time CEOs often are like that. They don’t think through work-life balance, everything is go, go, go.
[00:15:50] And he would say things like, “I see everyone as 11, I want to squeeze as much as possible.” There was an incident where I used to stay at work till like 9, 10 o’clock. And one day, I started going home at 6, and he emailed me saying, “Hey, I used to love it when you’re in the office till late. What’s causing you to go home early?”
[00:16:08] My wife was a medical ER resident, “So your wife is in residency. So she’s working a hundred hours a week. Why are you going home?” And my parents were visiting in town. And so that’s where I was going. And so Alex, when he called me that day, I just literally cried, and I’m like, “I don’t care what we build, man, as long as we build a company that we want to work for, I’m in.”
[00:16:25] And so we did, we started Boast as a consulting firm doing R&D Tax Credits manually. At the same time, we worked on other products, too. We worked on a product called Automatically, which was a chatbot built on top of Zendesk, which failed. Money was tight. So I joined the founding team of a company called Speakeasy, which was AI for sales incubated by Bessemer Ventures.
[00:16:46] That didn’t work out. When that failed, I went back to Alex, and I’m like, “Hey man, you got Boast running as a consulting firm. And rather than doing other startups, why don’t we just turn this into a product company? At least you got like few dozen customers that are happy and paying for the service manually.
[00:17:02] So we know what the outcome is that the customer is looking for. Now let’s just streamline the delivery of that outcome, like building software.” And so that was the journey. So Boast.ai was incorporated in 2017, and before that, it was a consulting firm, and we pivoted and incorporated to this Boast.ai. And we had seen incredible growth.
[00:17:23] We bootstrapped it till eight-figures. And then we raised a $23-million series in December 2020. And in parallel, because we had failed founders, we started hosting Pizza Nights. You know, just like a given, pay it forward into the community. And every time we’d host this Pizza Nights, warm people, more people would show up. And one day, this coworking space had like 200 people. And they’re like, “Guys, you can’t have 200 people in this coworking space for an event.”
[00:17:47] So we morphed it into a conference. And it’s funny, the first conference was not called Traction, but we had another partner helping with us who ran off with all the money from it. And, “Oh my God. What a misery.”. Then we partnered with a nonprofit and spun it into a nonprofit community and called it Traction. And yeah, that’s been the journey.
[00:18:07] And if we evolved from doing small events and conferences to now, two podcasts a week, two webinars a week, 2-million views on YouTube, meetups in different cities, which has halted because of COVID. And then now we have the big IRL conference. So it’s grown immensely, right, from like tens of people showing up to hundreds to now like a hundred thousand community members.
[00:18:30] And that’s fun for me. I genuinely enjoy helping other people, and the joy you get from seeing other succeed and connecting them is second to none. And I feel like that’s my life’s mission is enabling entrepreneurs to build world-changing companies through capital content connections and community.
[00:18:52] Jon Penland: Yeah.
[00:18:53] That combination of yourself, as startup person, somebody who’d been in the startup space with your best friend here, who is working for a Big Four accounting firm.
[00:19:02] And as an engineer, as an engineering background, that’s a really unique combination that I think outside of the startup you’ve built specifically would be kind of a strange combination. Like, we got a startup guy, then we got a guy coming from a Big Four accounting firm. What a straight, you know, what a strange combination of partners here.
[00:19:19] I think the best friend element tweaks that a bit that makes it make a little bit more sense, but then you see what you’ve done, which is you’ve provided a service that a lot of people may have outsourced in the past to a Big Four and said, “Well, let’s specialize in, and kind of niche down on this and then let’s automate it, right?
[00:19:34] Let’s find a way to build software around it so that a process that used to be cumbersome and manual and require a great deal of expertise can be done much more easily, be accessible to companies that probably couldn’t have accessed that level of product in the past.” So it’s just a really unique combination of skills the two of you brought to the table.
[00:19:53] Lloyed Lobo: Exactly. Right? Like you got to fill each other’s gaps. You know, everyone needs to understand their zone of genius and what they’re missing. Unconventional advice growing up, you often hear is that “learn these things because you’re not skilled at it.” And everything I’ve done successfully is because I elevated the things I’m really good at.
[00:20:19] If I try to learn, like, let’s say, I love to play the piano. That’s my passion. If I go and try to learn the guitar, I may be mediocre or maybe good at it, but not the best at it because that’s not my passion. But if I focus on like playing the piano, because I passionate about it, then I’ll be great at it. Right?
[00:20:41] So if you want a shot at being great at something, especially in a startup, do things you are genuinely skilled at, good at, great at, that you’re passionate about, and everything else, learn to fill your gaps. Right? Bill people, bring people on who are not so great at it.
[00:21:03] Jon Penland: Yeah. And I think there’s an age element in that answer, as well. As I think about my own career trajectory, there was a time and I’m in my late thirties. I’m rapidly approaching that 40 corner. But there was a time in my early thirties where I thought seriously about going back to school to become a developer or not to school, but to go into like a boot camp or something like that.
[00:21:25] And I ended up not doing it. And I’m glad I didn’t, because I knew that with the application of effort, I could become a developer. Yes. But was I ever going to become truly an exceptional developer? Probably not. And I don’t want to discourage anybody who’s making that career change because you can make a good living doing that.
[00:21:45] And if that’s the choice somebody makes, that’s great. I think that’s great for them. But what I chose to do instead are actually the opportunities that life presented to me, or to double down on things that I was already good at, which are things like understanding complex relationships and building workflows and policies, and communicating between a group of people around those sorts of complex issues.
[00:22:10] And so that’s really what I’m good at. And that’s where I’ve been able to then apply my expertise, and the reward has been much greater. But I think had I had that idea of becoming a developer when I was 17, 18 years old, it may have made sense to do it then. Right? Because there was enough of a ramp still in front of me to where it could have made sense to make that transition.
[00:22:30] But I think there comes a point, especially if you have an established skill set where, “Hey, you know what? Maybe you should really just niche down on what you’re doing. Maybe you should just focus on the things you’re already good at rather than abandoning that and moving to something where you’re going to have to start over from scratch.”
[00:22:47] Lloyed Lobo: Exactly. Right? Because building a startup or a company or a product is a team sport. Like for every phase of a company, that’s the evangelist or the rock star. There’s a hundred other people in that company or a thousand or ten. And in the early days, it’s a handful of people. It’s about learning how to work with each other and fill each other’s gaps.
[00:23:10] That is the most important thing because together you grow there. It doesn’t make sense if I want to be the best at everything. I want to be the best at one thing and maybe learn a little bit of everything else so I can get by. But as soon as I find somebody who’s better than me in that thing, I’m going to bring that person in to fill it in.
[00:23:27] Right? I may be great at something. Let’s say you’re great at writing content and copy. Now, as a founder, you’ve got to bridge the good journey to eventually, yes, you’re doing everything yourself to eventually being an executive focusing on strategy. So if you’re really, really good at content and you can do it so well to drive infinite amount of traffic, then it’s in your best interest that, “Hey, I know this really well, so I know what good looks like.
[00:23:49] Let me find somebody who can take this on and train them or coach them to take this load off me so I can focus on the next thing and the next thing and the next thing.” And to stay excited, sometimes you got to keep reinventing your job in the job versus going and finding a new job. Right?
[00:24:06] Jon Penland: Yeah. And it’s actually a lot of fun when there’s a part of your job that you’re okay at, and you go out, and you bring in somebody who’s really good at it.
[00:24:16] And within, you know, a month, two months, you’re like, “Man, this person is doing such a better job.” And all of a sudden, the problems in this area, that where bottlenecks are resolved, and we’re operating at a whole other level in this space, because I was able to sort of let go of that, where we’re going through that right now, internally, where we brought in our first truly qualified, experienced IT person. And problems that were problems, you know, two or three months ago, aren’t problems anymore, because you know, this, this person has genuine expertise in this area and has resolved issues that were challenges in the past.”
[00:24:54] And it’s just so fun to be able to hand that off and to watch somebody who really knows what they’re doing, take that thing that I was struggling with and push it so much further than I was able to.
[00:25:07] Lloyed Lobo: You know, one other thing that it’s really important to be as an early-stage founder, or when you’re taking something to zero to one, is to be a Swiss Army Knife.
[00:25:16] It’s very, very important. You can’t be perfect at everything. And perfect is the enemy of done. In the early days, you’re saying, “Okay, let’s build this in phases, right? Let’s validate what is important.” You need to get 8, 10 people to see I’m going to try it out, then product-market fit. You need to have an MVP, expand that a little bit, and you want to make sure people don’t leave.
[00:25:34] So you’re constantly getting feedback. And so it’s very important. And as an early-stage founder to dip your toes in many things and be that Swiss Army Knife. Otherwise, you’re trying to hire expertise, and it never works out like you, every time you add more people, speed gets reduced decision-making, gets reduced.
[00:25:50] So it’s important to be the Swiss Army Knife. And then, as you traverse the phases from like validation to product-market fit to product channel fit and scale, you start filling in and bringing people in. So then you go from being the Swiss Army Knife to a specialist. You just need to know when to make that journey.
[00:26:06] And if you go from being a Swiss Army Knife to a specialist to soon, you’ll slow down decision-making and speed in your company.
[00:26:14] Jon Penland: Yeah. No, that’s a great point. You’re absolutely right. Every time you add folks, it does add process and management and conversation and approval process and right, all these other elements that, that definitely do slow down things a little bit.
[00:26:26] So, you know, as long as you’re doing them effectively, you do speed up things by continuing to be that Swiss Army Knife. That makes a lot of sense. So I want to transition a little bit from talking about Boast.ai and Traction into thinking more about what motivates you personally as an entrepreneur.
[00:26:42] And you’ve spoken to that a little bit with this transition into Traction, but as you think back, you know, you’ve been, based on what I could tell from LinkedIn, you’ve been an entrepreneur for at least a decade or so. What is it that keeps you going as an entrepreneur, or in other words, what are you trying to accomplish at this point in your career?
[00:27:00] Lloyed Lobo: I have this fundamental belief in life: If you focus on control, you destroy relationships. If you focus on money, you make short-term decisions. If you want to be happy in life and build something everlasting, you gotta focus on impact. And so whatever I’m focused on needs to have big impact.
[00:27:20] That’s why Boast’s enabling innovators to change the world. Traction, enabling and empowering innovators to build multi-billion-dollar companies and change the world.
[00:27:29] So that impact drives me. Ultimately, if you look at the leading indicators of the impact, it’s connected to people. People create impact, not the other way around. People build companies, not the other way around. And so, I’m deeply passionate about relationships. I think I’m proud to say that anyone I’ve worked within the past would come and work with me again.
[00:27:47] And so for me, I’m greatly driven by people and relationships and community. And that’s something that just comes naturally to me. You know, I started with when passion meets profession, you become Michael Jackson. I want to be the Michael Jackson of community.
[00:28:06] Jon Penland: Has that always been the case? As you think back to the beginning of your journey as an entrepreneur, was that always your motivation, or has your, have your goals or motivations?
[00:28:16] Lloyed Lobo: That’s always been my case. So I often tend to tell people, “If you want to know what you really love doing, go on analyze the things that you repeatedly procrastinate on and hit snooze on. And then go and analyze the things that you just do gracefully for hours, and you’ll ignore your family and everyone else for it.”
[00:28:38] And for me, it’s been like building Traction and building community and helping people. And that’s always been the case. And it’s probably part of that is nurture because my mom grew up in the slums of India, and anytime I’d go there, she had 10 siblings, and anytime I’d go there, I’d see like more and more people were staying there.
[00:28:56] Right? And I’d ask them like, “Hey, you barely have place for your family to stay here. Why do you have these people in…?” Mumbai is like the New York of India, so people would come over, and they’d give them shelter. And they’d say like, “Hey, this person may not help you back, but the karma they get because you’ve been a part of their journey and helping them, giving them shelter, will come back to you in a big way.”
[00:29:15] And obviously, none of my mom’s siblings, nine siblings, live in the slums anymore. Everyone’s done really well. And so, I’ve experienced some childhood that joy of giving is second to none. So it’s been weaved into, I guess, my bloodline, it’s just second nature. And so, I draw immense joy from it.
[00:29:34] It’s no fun being at the top of the world and making all the money alone if you have nobody to share it with, right? Ultimately it’s not the money in your bank but the people around your tombstone that matter. And my second experience around this was, you know, I was a refugee of the Gulf War in Kuwait.
[00:29:50] My parents were working in Kuwait, not from their Gulf warheads, I’m like nine or so. And everyone splits from the country. Like the military, everyone, there’s like nobody there. And the community came together to evacuate the people, to help evacuate the people, like pulling together resources. And what, how does community start?
[00:30:09] One person raises their hand and says, “I have a problem.” Looks around, five other people raise their hand, they gravitated towards it, and they say, “Let’s do something about it.” And every apartment building became like a micro-community. People would come down. There were not cell phones back then, right? There were no cell phones, and the phone lines got jammed and no email and none of that.
[00:30:28] So people would come down and be like, “Oh, what’s going on? We don’t know. There’s uncertainty here. We heard this and that.” And they would come together to organize resources and what they can text each other. So then we’re like, “Okay, you know what? We need security for the building. So let’s make a plan that you come down at this time, and then I’ll go up and relieve you.
[00:30:46] And I’m going to organize supplies, and I’ll organize food and all of this stuff.” So the community came together to rescue the people of that country and evacuate them. And I went as a refugee from Kuwait through Baghdad to Jordan, and then got out of there on a plane and stayed in no man’s land in the refugee camp, et cetera.
[00:31:03] And as we were going on this rickety bus through this highway of death, which is documented heavily, everyone was being bombed, and I’m looking around the bus to the adults, right? I’m sure they’re stressed to the gills, lost all their possessions, currencies, and valid on a road to uncertainty with a bunch of kids.
[00:31:22] Jon Penland: Yeah.
[00:31:22] Lloyed Lobo: But, you know, as I looked around the bus, all I could see where people laughing and singing along the way, to pump everyone’s spirit. And I realized that it’s neither the destination nor is the journey but the companions that matter the most. And that’s why community is something that I draw immense joy from because it’s been part of my bloodline and my upbringing and nurture.
[00:31:46] And that’s just something I automatically gravitate towards. And community has helped me, from funding the company to making key hires, to getting early customers, to making lifelong friends in any city I go to. And so, uh, that’s what I draw immense joy from.
[00:32:04] Jon Penland: Yeah. Yeah. I love that, that line. You said it’s not the destination. It’s not the journey. It’s actually the companions.
[00:32:08] I love that. I’ve never heard that before. I think that’s kind of a great observation. So you’re now in Traction, and you’re building community there, and that community is a community of entrepreneurs and builders and creators. And I’m sure you hear a lot of stories, right?
[00:32:24] A lot of stories about folks’ entrepreneurial journey. And I’m curious if there are like classic pitfalls or stereotypes that you observe of this community. That if there was somebody else, you know, about to launch on their entrepreneurial journey, you would say, “Look, I’ve seen a lot of entrepreneurs through this community. Here are some things you really need to avoid or watch out for as you embark on this journey?”
[00:32:45] Lloyed Lobo: Definitely. The first thing is, you know, there’s this trope with all the TechCrunch and the Shark’s Tank and all these shows that entrepreneurship has hyped up, and everyone thinks they can go and raise venture capital to build the idea.
[00:33:03] Focus on solving a problem for a customer because you’re passionate about it and you have conviction about it, have conviction about the customer you’re serving and the problem you’re solving. And let that be our guide. Right? Focus on that. First principles of business are more important. Focus on delivering value to the customer, validate it. Get it to product-market fit, then go and raise money.
[00:33:25] Right? But don’t say, “I will do this idea if I could raise money.” Take the risk, leave your job. Right? Figure out how much money you have in the bank and for how many months because pain is the precondition for growth. There’s the saying that tough people create good times. Good times create weak people. Weak people create tough times and tough times create strong people.
[00:33:51] Right? So that’s the cycle there. And so, pain is a precondition for growth. It’s like bodybuilding. You want to go and get grow, you keep increasing the weight. Right? And so when you have this cushy job, and you’re like, “Oh, I’m going to raise millions, and I’m going to hire all these people.”
[00:34:05] And I’ve been through that journey. It almost very difficult to work out. Right? You got to get out there and struggle a little bit, “I have this idea. Is this something that people want? I’m going to figure out. Who is the ideal customer profile? Where do they eat, bread, drink, sleep? Let me leverage my network and cold call and cold email. And let me find these people.”
[00:34:24] And try to understand a day in their life. Have they ever experienced this problem? How are they solving it today? What is working? What is not? If they had a magic wand, how would they solve it? And how much would they pay for it? Like understand that. Get them to sign LOI or agree to try it out.
[00:34:41] I’d go through that journey a little bit, then scrap together some cash, or there’s a whole bunch of low-code, no-code tools to string together an MVP and present it to them. And keep them updated like a Kickstarter campaign and see they’ll use it. When you get like 10, 20, 30, 40, $50,000, a $100,000, $200,000, then you’re like, “You know what? I understand the fruits of my labor.”
[00:35:02] Right? And then others will respect you more. And if you don’t value other people’s money, they won’t value you. Right? And so I think it’s very important to develop this intrinsic value for the customer and money. Right? If you’re raising lots and lots of money, it tends to enable you to blow up more money, and you lose sight of this reality that ultimately here to build a business, right?
[00:35:31] Customer value, employee value growing that over time. Right? And another thing is a lot of people ask me, “Lloyed, tell me, what’s the next growth hack? What growth hack can I do to grow my business?” It’s not about growth hack. It’s about first principles. You’re not ready to grow if you don’t have two things. An ideal customer profile, meaning, “I’m going to try out.” What kind of person comes and tells you, “I want to try this out?”
[00:35:55] And the second thing is you have now retention. Every time they have this problem, they keep coming back. ID, ICP with a problem that wants to try you out, and any time they experienced that problem, they keep trying you out. You can build a pretty big business, maybe 10, 15, 20 million revenue, by selling one kind of product to one kind of customer coming through one kind of channel.
[00:36:18] And I see a lot of entrepreneurs. What they do is, “What’s the next growth hack? What’s the next shiny object? Let’s chase these three different channels. Somebody tells me I’m not on HubSpot. So, you know, when I should launch a marketing automation system?” Or somebody says, “I need to be on Twitter and TikTok, and this thing called Clubhouse. What is that?”
[00:36:36] But what you tell people is, “Where all your customers coming from?” Like figure out your ideal customer profile. Who do they fund? Meaning what tools they pay for, who do they follow? Who are the influencers, and who do they frequent? What events they go to, what magazines, blogs they read, and try to dominate the sphere around there.
[00:36:55] Right? Just add value there. And if a channel is working, squeeze the most out of it. Don’t try to add new things until you’ve figured it out. Right? So nail it and then scale it. And I think lack of focus is what destroys a lot of early-stage founders. Somebody may come and tell you, “You’re not on TikTok, or you’re not on Instagram.”
[00:37:18] And you’re like, “I don’t care because we have an SDR team that cold calls customers, and for every a hundred calls they make, we get 10 demos, and we close two clients, and we’re just, higher, we just going to ramp that up for now. Because in this phase, what matters is I get to product channel fit, and then I can put fuel on the fire and take some money.”
[00:37:42] Right? If you can’t prove the ROI something, and you go and try the next thing and the next thing, and next thing, you’re distracting. Right? And then the last framework I say is like, you have infinite number of ideas as a founder, infinite number of ideas, “Oh, I’m going to try this tactic or that product feature.” Prioritization is key.
[00:37:58] And how do you prioritize? What is the way to prioritize? And the way I look at it is, there’s this well-known framework called RICE, right? Reach impact, confidence, and ease or effort. What it’s saying is how many people is this going to get to? What is that total addressable market? What is the impact it’s going to have on the business and the customer?
[00:38:19] What is my confidence that is going to do that? And what is the effort? So you want to ultimately go for high-impact, low-effort. Right? Not just something that’s low-effort. ‘Cause you could do a lot of low-effort stuff, like put a button on there. But what’s gonna be the highest impact and lowest effort? So that’s how you prioritize.
[00:38:36] And so the three frameworks that I’ve developed for myself from learning is, obviously I didn’t invent these frameworks, from observing and learning from smart leaders is three valuable frameworks. One is that, that whole phase of startups built in phases, validation, product-market fit, product channel fit, scale this RICE framework of prioritization.
[00:38:59] Jon Penland: It’s interesting to hear that answer though because I have two thoughts. One, I feel like you have the outline of a book right there, but then the second is that as you’re giving those answers, I’m sitting here nodding along because I can see the things that you’re saying, tracking to the growth I’ve seen at Kinsta over time.
[00:39:15] Right? You talk about finding that single focus, know how you’re going to market. Right? And like for years, Kinsta was content marketing because when they started, they didn’t have any money. And it was like, “Well, we can publish content. That we can do, and we can do SEO.” And that’s what they did.
[00:39:33] For the first five or six years it was like content, SEO. That was their go-to-market strategy, have a contact form on the website, people can sign up. Right? And it worked. And then they really did focus in on, you know, “We know who our customer is. All right? It’s very specific. It has to do with WordPress. It has to do with performance.
[00:39:49] It has to do with service. These are sort of the pillars of what we’re offering and what our customers are looking for.” That’s all that Kinsta did. Right? Is very, very highly focused. So, yeah. It’s interesting to hear as you talk about those different elements because I feel like every one of them, I’ve seen those validated in my own personal, professional experience and I do feel like you have the outline of a future book right there.
[00:40:11] Lloyed Lobo: Yeah. I am working on a book on community-led growth, coming out in October or November. So it’ll be on the Traction Conf website. So just to repeat like three valuable frameworks that have been super helpful to me as a founder. One is startups are built in phases, validation. Get 5, 10 people to try it out, and there the metric is, will they try it out.
[00:40:32] Two is product-market fit, where you expand that to maybe 40, 50 people. And the key metric there is retention. They keep coming back. Three is product channel fit. You figure out a repeatable, scalable channel to get, keep customers. Get, keep and grow customers or acquire customers, so that could be sales.
[00:40:50] That could be events, that could be content. And the fourth one is a scale where you spend 75% of your energy putting fuel on the fire and 25% trying new things, but still going through that cycle of validate product-market fit, product channel, fit and scale. So that is one framework. The second framework is 1-1-1 focus. One kind of customer coming through one kind of channel, getting one kind of value. And to do that, you need to look at your ICP and put it in the center and say, “Who do they fund? Who do they follow? Who do they frequent?” And this is what we used for Boast when we’re building Traction. We got the founder. They pay for tools like Stripe and MongoDB and Intercom, and whatnot.
[00:41:30] And who do they frequent? They go to events, right, community events and they read blogs like TechCrunch and whatnot. And who do they follow? All these VCs and entrepreneurs who are 10 X more valued than them. Like the good multi-billion dollar companies. So when we started doing events, we, and we started inviting CEOs and founders of these multi-billion dollar companies and VCs.
[00:41:51] And we started in writing TechCrunch reporters and whatnot because they read that. And then we did invite all these vendors who they buy tools from as sponsors. So when you go in the room, they’re like, “Aw, these are all my people.” Right? “I’m surrounded the people I know. I pay for these tools, and I use this MongoDB and Stripe, and wow.
[00:42:10] Like, you know, I love this founder, like Twilio. I’m a big fan. And these VCs, wow, we’re chasing them. I wish they were checking me,” to like, “Whoa, this is a reporter from TechCrunch. Like I would love to be featured in TechCrunch.” So to that framework, do it for your market because when you then target those people and they start coming to your events and get involved with you when we’re doing outreach, it makes it very easy because then they feel like they’re doing business with people they know.
[00:42:35] Jon Penland: Yeah.
[00:42:36] Lloyed Lobo: Right? And so that fund follow frequent 1-1-1 is important. And then, in terms of channel prioritization, the, how many people is going to reach, what is the impact is going to have, what is my confidence, and what is the ease is very important. I’ve, you don’t ever do a tactic if you don’t know how many people it’s going to reach and then how is, how it’s going to reach them, and that’ll help you prioritize. And those three frameworks are like goal.
[00:43:00] Jon Penland: Yeah. Yeah. Fantastic. I really do think you have the outline there for a book or at least a really solid blog poster or something like that. That could be really useful to folks knowing those three different frameworks to kind of bring to bear on their entrepreneurial ventures.
[00:43:14] I mean, I really think business is, just really in any kind of a growth phase, there’s some really good principles there to take away. So as we come to a close, most of our listeners are small business owners or contributing in some fashion to entrepreneurial companies. Is there a resource? It could be a book, a newsletter, or blog, really anything that you would recommend to our listeners that you think would be particularly useful to them?
[00:43:36] Lloyed Lobo: Yeah, definitely. So one, I would read this book, How to Win Friends and Influence People by Dale Carnegie. My favorite book. I don’t read books, otherwise very rare, far and few in between. I’m going to open my Kindle to see what’s at the top because I don’t read very well. That’s the issue. And so that’s why I interview three to four smart people every week at Traction because I’m not a good reader. Read, Masters of Scale by Reid Hoffman.
[00:44:05] Jon Penland: Okay.
[00:44:05] Lloyed Lobo: Because that will help you really understand how to build from stories from other people. Right? I think that is really, really important.
[00:44:15] There’s this book called High Growth Handbook by Elad Gil. Read that. I think those are three fundamental great books. So Masters of Scale, High Growth Handbook, and How to Win Friends and Influence People. There’s a new book by Frank Slootman, who is the founder of Snowflake. It’s called Amp It Up. So read that.
[00:44:35] So those are four things. And the rest is I just read blogs, man. Just search the topic that you’re looking for and search for it on YouTube and Google and read the top-viewed ranked ones. Watch the top-viewed ranked ones. I’m a big believer in just-in-time information, you know? Sometimes you read a book, and you can’t apply it.
[00:44:55] It’s good knowledge. And especially if that material is dry, like a text, then it’s not even fun. Right? Like Masters of Scale, I loved because it’s like stories. Right? And so, if you’re looking for information, just search for via blog posts. Don’t feel like this need that all, you know, “I’m such a loser. Everyone, like all the top CEOs, they read like hundreds of books a year.” Like, who cares?
[00:45:20] You consume information how you consume it. And if that’s watching YouTube or listening to an audiobook, or reading a blog post, that’s fine. Or that’s finding two people a week and interviewing them on your podcast by asking this matter questions, smart questions, do that. So there is no compensation for execution.
[00:45:38] Everything else is theory, right? Theory doesn’t compensate the learnings you’d get from execution. And so, if it’s business-related, research situations that you’re in and read all about them. Step further, find out people who have gone through those situations successfully and call, email them and ask them if they would be willing to share some advice.
[00:46:00] Those two pieces of things like just-in-time advice via researching and reading and talking to others who would mentor you through that, is immense learning. And also, now you’ve overcome your fear of outreach, and you can outreach to anyone.
[00:46:15] Jon Penland: I love it. So yeah, I love it. So a couple of book recommendations, but the real recommendation, they’re being focused on just-in-time consumption of information. Find the information you need right now, go read it.
[00:46:26] It’ll be more applicable. You’ll actually bring it to bear and then talk to people who’ve been there. I love that. Last question for you, Lloyed, where can people connect with you or learn more about Boast.ai and Traction?
[00:46:38] Lloyed Lobo: For the last five weeks, I haven’t been active on LinkedIn because I took time off to spend time with my family.
[00:46:42] And that disconnection is really important. It makes you more connected at home. Otherwise, you have this like social FOMO. I’m on LinkedIn, double L O Y E D. Last name L O B O. Or go to tractionconf.io, T R A C T I O N C O N F.io or Boast.ai.
[00:46:59] Jon Penland: Okay. Awesome.
[00:47:00] Well, Lloyed, has been fantastic to have you on Reverse Engineered.
[00:47:03] Thank you for hanging out with me for an hour today.
[00:47:05] Lloyed Lobo: Sounds great. Thank you for having me, Jon. It was fantastic. I enjoyed the conversation. It was like, I wasn’t sure how I should keep my energy, like super pumped, like sometimes I am. Like, it’s a show or like conversation. So this was a conversation, and I quite enjoyed it. Thank you so much.
[00:47:20] Jon Penland: All right. Awesome.
[00:47:21] Well, Lloyed, again, thank you. I appreciate all your time here. Thank you to our listeners. That’s all for today’s podcast. You can access the episode show notes at kinsta.com/podcast. If you enjoyed this episode, don’t forget to subscribe to Reverse Engineered and leave us a review on Apple Podcasts or the platform you’re listening on right now.
[00:47:38] See you next time.
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