How Cognism Reached $71M ARR and Avoided Scaling Crises from Zero to 70 Million (Interview with Founder and CEO James Isilay)

Event context and introduction

Nathan Latka

00:00Quick context. This was recorded March twenty eighth and twenty ninth. So a couple weeks ago at my live event, saasopen.com. We had a thousand software CEOs there. If you missed it, we hope to see at the next one, September fifth and sixth in New York City, saasopen.com. But for now, let's jump into the recording.

Guest teaser: zero to $71M ARR

James Isilay

00:19>> The first two hires I ever made were terrible. Like, seventy two percent of founders report that the entrepreneurial journey affected their mental health. Yeah. We've gone from, yeah, zero, and now we're at 71, million AAR.

Nathan Latka

00:32Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software

00:58founders. So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview.

James Isilay introduces Cognism and the talk topic

James Isilay

01:18>> Hi, everybody. Yes. I I'm James Islay, founder and CEO of Cognism. So this talk is about how Cognism avoided scaling crisis from going 0 to 70,000,000 AER. When I was thinking about how to tackle that topic, there's many stages of the journey from zero to 70,000,000, and the one theme that came back to me again and again was about mentorship and my support network. And it really reflected on how did that support network grow from when

01:46>> we were zero AER to 70,000,000 AER. And I think that's the biggest difference and that's the biggest thing that's made our journey smooth. So that was what I was going focus on. How many people here have a mentor? Could you just put your hand up if you have a mentor? Oh wow, not that many. How many people have a mentor of a company that's several stages ahead of them? So this is a really important talk.

ARR growth chart: zero to $71M

James Isilay

02:09>> So this is our AAR and as you can see it's been a fairly smooth journey. So yeah, we've gone from zero and now we're at 71,000,000 AAR.

What Cognism does: B2B sales intelligence

James Isilay

02:22>> Just so you know, Cognizant, we're in the B2B sales intelligence. So we help companies with contact data, filling the sales pipeline, enriching opportunities to help increase win rate. So we're really helping to build and help execute on pipeline.

James's background: trader turned founder

James Isilay

02:41>> One of the great things about me going into this industry is I knew nothing about this industry. Before Cognism, I was a trader, so I traded oil, German power, and carbon. I was in the finance industry. I started Cognizant to build the fintech, and then we pivoted into sales intelligence. And so one of the great things about this journey is I really didn't know anything about sales intelligence. So corny quote from Socrates, true knowledge exists in

03:03>> knowing that you know nothing. And I really knew nothing about this industry, and that was very beneficial for the for the journey. And because I approached it from the perspective that I knew nothing, and I needed to keep finding mentors to help me to build my knowledge in the industry and know what to do in terms of building a company. So I really went out and seek knowledge and I really went out and tried to find

03:25>> the mentors to help me get to the next stage.

Founder mental health statistics

James Isilay

03:30>> This is really important. These are some really key stats. Seventy two percent of founders report that the entrepreneurial journey affected their mental health. Thirty seven report suffering from anxiety and thirty six percent from burnout. The average level of loneliness amongst CEO founders is reported to be seven point six out of ten. The entrepreneurial journey is really, really hard. I've seen founders burnout. I've seen people go through crises. Having a mentor and having a really good support

03:56>> network is really key for those moments to get through to the other side. And for me, it's been really key to help with the continuous scaling.

Four pillars of a founder support network

James Isilay

04:04>> Yeah. So the the and and again, like, to go back to these four pillars that you need to think about for yourselves when you're on this entrepreneurial journey. You know, family health, career, wealth, that, you know, they're they're all pillars of that you need in terms of your support network, and I'll show you where my support network's at right now. And, you know, if you don't have one of these pillars in the right place, then what

04:26>> I've seen time and again with other founders is it just the chair breaks and it falls down because one of the legs falls down. So it's really important that you build a support network around all of these areas.

Support network in 2016 vs today

James Isilay

04:37>> This was my support network in 2016. So two types of investors. I had a conservative investor, Declan Farley. Both of these two were friends at the time. Declan was like the conservative investor that would call me, WhatsApp me every single day, chasing me about every single penny that was spent. Like, he was a it was a bit miserable, like, again, he he kept me on my game. And and Usman was the optimistic investor. He said he'd

05:02>> always be there for me, provided the first check-in, and then I never heard from him ever again. So combined, were the perfect investor, but that was like my support network in 2016 when I started on this journey. It gave me the confidence to move forward and it gave me the confidence to get going. This is my support network now. It's actually bigger than this and there's many legs to it. It's missing my fitness coach which I've

05:26>> just added. Harold is my wellness coach, he makes sure that I'm in my good happy place in my mind. Dario Arnold is my wealth advisor. I got secondaries to stop me going crazy, spending tons of money and creating loads of stress from that. Katie Trust is my CEO coach. So she helped build our company values. She helps me whenever there's a crisis in my management team. She's the best adviser on how to resolve that crisis in

05:52>> terms of personal relationships between c suite executives. She helps us with OKRs. And Peter Deafrin is my CEO mentor, and he's he's been at NetSuite when, you know, taking it to billions in revenue, Crystal Decisions in terms of, like, taking that to a formidable expert. He's been there many times before, he's been on the journey many times before. Any crisis I've ever seen, he's seen it before, and, you know, either he has the solution on how

06:17>> to resolve it or he knows how not to resolve it. And then I have these investors, PeakSpan, Bolderton, they have dozens of experts in residence, dozens of operating partners. Like Bolden for instance has David Cullog, really famous CMO.

06:33>> David Wiesman, the CPO of bookings.com. And they they're really those those networks really help me in terms of, in particular, who to hire, which of the c suite people that I need to hire next to keep the the scaling journey going. This was a really good guide that I found from I have to shout out to Santiago Morale, which really, I think really gives a good guide on the stages that you hit and what you need

07:04>> to develop in terms of your own understanding and knowledge as a CEO. I hadn't touched many of these topics when I started my company and now these are the kind of it was a really good guide of what I've educated myself on as I've gone through my journey. So, like, the founder stage, digital value, infrastructure applications, team, product management, work management operations, team of teams, coordination and process, investments and projects, organization and culture. That one's been

07:33>> super key for our scaling. And then enterprise, governance risk, security compliance, information management and architecture. That's what I'm really building knowledge around right now and where I'm really seeking out mentors to kind of help me with the scaling there.

07:48>> This was another great guide. I felt that we had a talk earlier this morning about hitting these scaling crises. And this really resonated to me. And I think it resonated from talks I had this morning. So these these are kind of the typical, like, revenue points you get where you hit those scaling crisis, and that way you really need to make sure that you've got the mentors that are at the next stage. And some mentors, for

08:15>> instance, when when Peter Dufferin became my mentor originally, I probably I I knew I knew I know now that I really took him to earlier stage because the advice that he gave me wasn't really resonating and didn't really have impact because I'd taken him a bit early. But right now, he's the perfect mentor. And and whenever a crisis comes up, because he's really played at this stage, like the 50,000,000 AER plus, his advice has been invaluable.

Sub $1M stage: key mentors and focus on UK market

James Isilay

08:43>> So yes. Oh, we lost some pictures there. So I wanted to go down to a particular stage and then just talk through these different stages and what mentors I had there and where they helped us. So if we go back to the sub 1,000,000 when we just started, I had three key mentors. One was Tom James and he was an angel investor who'd had an exit. The key bit of advice that he gave me at that

09:08>> stage was to focus on my home market. So to not go into The US market. It was one of his big pieces of advice. One of our rivals raised a seed round, went into The US market, and blew the entire money and died. Whereas we stayed focused on The UK market, and his advice was stay focused on The UK market until you get to 10,000,000 and then and then and then look at The US market. And

09:31>> that real that was invaluable advice and starts with blowing through our money too quickly. Mark Taylor, because I knew nothing about the the b to b

09:42>> sales intelligence market, Mark Taylor had run a b to b outreach agency. So he really helped me to understand the market, understand what customers wanted. Helped both him and Tom James provided initial customers to kind of like test our services in. And and he also helped me to really build out a sales plan in in in terms of like how to grow the business. Nick Keating, what the first two hires I ever made were terrible, like

10:08>> the the SDRs. They didn't work out at all. And I I really realized at that stage because I came from a software engineering background. I'm a software engineer by background. I knew how to hire software engineers, but I didn't know how to hire salespeople. I didn't know how to hire marketers, I didn't know how to hire customer success. You've got so many, like, departments and areas to to learn. You can't. It's not possible. So he really

10:32>> came in and helped us to really us how to hire good salespeople and good customer success people. Like, one of the key lessons at this stage was that I needed to find people that knew how to hire those juniors. And and I needed them involved in the in the in the hiring process and I needed them to do the sign off for those employees. That was really critical for our success. Another key thing here that really

10:57>> made a big difference was creating a board. I invest in a lot of startups now. And one of the key mistakes I see again and again is that founders want to fear creating a board. But it's not really a control thing. It's really a headspace thing. It's really about creating time with those mentors to kind of review where the business is now, review your metrics, review your financials, and get feedback, like a very well constructed feedback

11:26>> that you can actually action and then and then put back into the company. That meeting, like regular board meetings and regular revenue operation meetings from our first year, were really key in our scaling. It really provided, when we did those on a monthly basis, like now the cadence for those moved to a quarterly basis because we have so much more data and we need to be so much more deliberate. But at that time, it really made

11:47>> a big difference from zero to 50,000,000 AR for us to do that monthly and then to have that feedback from from those mentors to kind of ensure that we were adjusting the the boat in the right direction all the time. So,

$1M stage: investing in infrastructure and PeakSpan

James Isilay

12:02>> yes. Next one is when we got to 1,000,000. Oh, we're missing a lot of pictures. But here here are the two pictures that were up here. We're Salesforce, and that was really about us investing in our infrastructure and investing in our technology. One of the other key mistakes I've seen across my investments and other founders that I've mentored is that people are cheap and they don't invest in their people, they don't invest in their technology. And

12:33>> and I see that as one of the major issues of scaling. So I've always invested in the best tools, the best equipment for our sales teams. And that makes a has made a big difference.

12:45>> So so yes. Scaling the the the infrastructure is is really key. And so the other one here was Salesforce and PeakSpan. So the other one at this stage, our first kind of VC vet investor came in, and they brought with them their support network. So they have an expert network. They have operating advisers, education resources, and just general support. So PeakSpan coming in as a VC with this infrastructure that they had. And and quite a lot

13:16>> of their VCs don't have this type of infrastructure. So if you are gonna take VC investment and you are a first time founder, would really advise you to look at a VC like PeakSpan or Boulderton that has that kind of support infrastructure, has operating partners. So Peter Dufrin was one of their operating partners and he became my mentor and now he's our chairman. And so and and then PeakSpan also run regular sessions with key experts in

13:41>> in the field on a on a monthly basis. They also provide all of my c suite with mentors and they pay for it. So that has been really good for my c suite to scale as well. So that was really important for us scaling. We got the picture here.

$10M stage: Katie Trust, company values, and culture

James Isilay

14:00>> Katie Trust came in at over 10,000,000 AR. And Katie really helped us with building out company values. Culture is just so key for keeping a company together, for keeping and retaining talent in the later stages. So around about the 10,000,000 mark, we really got to we had an initial set of values, they weren't very good. Katie came in. We ran like a two day off-site. We built out the company values with all of the c suite

14:27>> at the time. And and and it had huge it still it has it one of the largest impacts on across the org. And then she also helps us with okay OKR setting. As I said, she's she's a meant she's she's one of those people I bounce almost every kind of personal personnel issue off and and then get really good advice. So having somebody like that that can pick up the phone to or just WhatsApp is is

14:50>> fantastic. So I would really recommend a CEO coach if you don't already have one. These are our company values. I I'm not gonna go through all of them. I go the the number one one is we are nice. Like, you go look at our Glassdoor reviews, that permeates across the company. And particularly, I I create the sales culture around that value of we are nice and fairness, and it really creates a different type of sales culture

15:15>> to the to to the you'll see other companies. And it has really helped us with employee retention. So I think it's really helped the the and it's helped with attracting employees to the company as well. I get people on a regular basis emailing me saying that they heard about the company culture and they'd like to work for the company.

15:35>> So from this as well, and one of the things that Katie really helps us with is the cadence of our communications. So we do town halls regularly. So we do a monthly town hall where we communicate our values. We celebrate three things together. We go through every single department and what the department's achieved so that the whole company feels included. And then she also ensures that we've got the right kind of communication cadences for the stage

16:02>> of the company that we're at. So right now, of the things that's been important is just to slow down the communication. So that now we're moving to quarterly cadences on our town halls and quarterly cadences in our RevOps meetings because we just have too much data and doing it monthly is just overwhelming our C Suite executives. So it's been very important to kind of like time the communication for the right stage of the business.

$50M plus stage: Bolderton, governance, and enterprise scaling

James Isilay

16:29>> So on the enterprise one, this is where Peter Bolderton came in. This is the recent one. So we've now scaled past 50,000,000 AR. Balderson has

16:41>> an expert network and operating partners that are good for the 50,000,000 plus AR mark. Peak spam was really good from that kind of like 5,000,000 AR up to 50,000,000 in terms of the operating partners that they had. Boulderton has those operating partners that have scaled to the 300,000,000 billion AER plus and have all that experience. And and the the key thing that I'm learning at this stage is is really about making sure that you really hire

17:11>> correctly in terms of the the title level and experience level. It's a very expensive mistake to hire the wrong people. It's also just having access to the right people or knowing which executive search firms to use to kind of find that right talent. So this is kind of really key now. So it's also about governance. It's about how board governance works. So that becomes a lot more complex. You have to get a lot more, you start

17:39>> to see a lot more formal issues like legal issues and just as you approach, move towards that IPO level, your investors are expecting more from you in terms of formality. And so having to learn that from the right experts is really key. And this is their platform. I'm not going to go through all of this but they have a very big platform. So again, it's about picking the right investor at the right stage that can give

18:06>> you that knowledge as a first time founder to scale.

C-suite overhaul in the last 12 months

James Isilay

18:11>> This is my c suite team. Again, apologies for all the pictures missing. But over the last year in the last twelve months, my whole focus has been on hiring new c suites. So I hired a new CTO, a new CFO, a new CHRO, a new CLO, and a new CPO. And yeah, I think I've said them all. So I pretty much turned over about the majority of my c suite team and spent all of my time

18:38>> focusing in on hiring those executives that have already done the journey before and have scaled from the you know, scaled to the hundreds of millions in in AR. And they've come in, and they've completely rebuilt their departments. And what I've seen works the execs that are really good have come in, found the really good key talent, but then brought in talent that they've worked with before to fill the gaps. And that's been a sign of a

19:02>> really good executive.

19:06>> So the key takeaways from this.

Key takeaways and Q&A on C-suite transitions

James Isilay

19:09>> Know what you don't know is really key one. And seek out best in class mentors that have done the journey before. Nurture your support network. So again, like don't just focus in on the the mentorship just from from the company perspective. Also, mentorship. I would urge you in terms of like wellness coaches is just somebody you can speak to about the problems at the company aside from the kind of the strategic element, like the personal element

19:41>> as well. Like the relationship between the relationships between you and your executives is super key. Like a wellness coach, like for mental space has been absolutely fantastic for me, game changing for me. And then also, yeah, of course, fitness. Because because, know, if I look at those CEOs that are top of their game, they also they they really do also give dedicate time to their personal fitness to make sure that they're they're they're they're that's good.

20:06>> And again, drive cultural alignment. So it's the the company values piece, I can't stress enough how important it is throughout the whole of the journey for smoothness to to create like a really great culture. You you want your employees to come in and just and and want to work and and to be excited to work. And you know you've got culture right when people are coming to you for jobs. When they've heard that your culture is

20:31>> so great that they're knocking on your door and they want to work for you. And I've seen that happen and it really lowers the customer employee acquisition cost. So it really lowers your hiring cost. So it it does pay back in spades.

20:47>> Just to give a shout out, so if there are any, there was a new organization, when I was researching this, there was a new organization that was launched last year called the Founder Mental Health Pledge. So I think it's based out of Atlanta. And they are getting VCs and funds to sign up to make sure that they are providing their CEOs and founders that they invest in with all the right resources for their mental health to

21:11>> help them with their, and their well-being. To help them ensure that they are fit, healthy, and looking after themselves. Which we often don't, right? As founders, we're usually all workaholics and we usually don't give ourselves any sort of head space for ourselves. But it's so important. Like Boulderton have a whole fitness program and they have

21:32>> coaches across the board. So they and it's been fantastic to have that as part of their program. So twenty seconds left. I'm I'm amazed that I made it in time. But, yeah, thank you. Thank you, everybody. If anybody's got any questions, I'll be dancing.

21:49>> Oh. When you fired your c suite, how did you convey that to your team to maintain morale? When when I

21:58>> think that if you're gonna let one of the c suite go, it's kind of obvious to the rest of the c suite why the c suite person is gonna go. I think again, it's like if you can manage, I'm very good at managing relationships. So I haven't really had a bad, like it's always been done mutually and it's always been done in, I think you have to get good at managing that out because also it just

22:26>> takes stress away from the organization. So so it's always been it's always been on good terms so far. And so so yeah. I think like that again, somebody like Casey has been very good at giving me the advice about how to make that nice and how to make that exit, like, kind of peaceful instead instead of, like, warlike. Outside of the c suite, though, like, your ICs, how was that, like, message and interpreting? Again, it's like

22:51>> it's ideally, you're you're like, this person's leaving and here's the new better person that's gonna take over. Which is what I just did with the c p o. And then everybody got very, very excited about the change. Because also the organization felt like, okay, on the c p o, we needed to make an adjustment. We need to make an improvement. So again, it's it's about like, if you could convey some good news immediately after the bad

23:11>> news, it softens the blow. And it and it makes it kind of a a lot more and it also can pump up the organization. So you can use it as a good thing to pump up the energy of the organization. K. K. Great. Alright. Thank you.