Amazing Teams Podcast
We started this podcast because we love teams, especially amazing ones. Michael Jordan said it best, "Talent wins games, but teamwork and intelligence win championships." This is what we're all about!
Our mission is to help others build amazing teams by having authentic conversations with remarkable people who are building amazing teams. We will explore the tactics, strategies, and frameworks that have helped them succeed.
Amazing Teams Podcast
You Can’t Clap with One Hand: Lessons from 55 Startups with Sanket Merchant
In this episode of the Amazing Teams podcast, we sat down with Sanket Merchant, a partner at PeakSpan Capital, who shares insights from his career journey in the software investment space. He discusses the importance of culture, clarity, and support in building high-performing teams and organizations. Sanket emphasizes the value of trust, agility, and gratitude in leadership and how these elements drive the success of entrepreneurial ventures. He also highlights the importance of evaluating entrepreneurial teams based on shared values and mutual respect, and the role gratitude plays in cultivating a positive work environment.
We dive into:
- How high-performing teams demonstrate accountability, commitment, and coachability
- Why trust is essential for building strong business partnerships
- The importance of agility and responsiveness in fast-paced environments
Resources:
- Connect with Sanket on LinkedIn
- Learn more about PeakSpan Capital
- Don’t miss the Master Class featuring John Hamm of PeakSpan Capital
Sanket Merchant (00:02.286)
This is a story that I love and I can't remember who the author of the story was, but it was like a boy in a forest that were like stuck out in the forest and was like terrible conditions, a foggy. And the gentleman talks, looks at his horse, and he's like, I don't know where to go. I'm lost. Like, what do I do? And he's like, can you see your first step? He said, yes, take it. Then the next one, then the next one.
Doug Dosberg
This podcast is brought to you by Hey Taco, the only peer-to-peer recognition platform that uses tacos to help teams around the world share gratitude. I'm Doug.
Una Japundza
I'm Una.
Doug Dosberg/Una Japundza
This is our podcast, Amazing Teams.
Doug Dosberg (00:37.838)
Hey everyone, welcome to season three of the Amazing Teams podcast, where we explore all things that make work better. Today, we are excited to be joined by Sanket Merchant, partner at PeakSpan Capital. Sanket, welcome to the Amazing Teams podcast.
Sanket Merchant
Well, thank you so much for having me. It's a complete honor, and I appreciate the opportunity.
Doug Dosberg
Of course.
Una Japundza
Can you tell us more about yourself and what you do at PeakSpan?
Sanket Merchant
A hundred percent. I'm happy to.
So, I'll kind of break it down into two, two brief and hopefully succinct introductions. One of myself, one of our firm. So my name is Sanket Merchant, I'm a partner here at PeakSpan Capital. And, I now have had the privilege of working with gross state software and software entrepreneurs for about 15 years, which I'm dating myself. I was hoping not to do that on this conversation, but anybody can check LinkedIn and see that. But it's been amazing. It's been amazing. I felt like, you know, folks would always say like, love your job. And I feel incredibly fortunate to have found the career path that I did and to truly have fallen in love and to really enjoy what I do and to be, hopefully, knock out what, cause that's like good and getting better at it, which is amazing. But 15 years, I went to the University of Colorado Boulder, studied accounting, economics, and finance, came out to the Bay, got bitten by a technology bug, ended up starting my career in software working on the, on the operating side of the financial software company. Got to manage $10 million book of accounts effectively as an account manager.
And got to work with private equity, venture capital, and growth equity firms, investment banks. Through that experience, this is actually kind of interesting. When I came to the Bay, there was no such thing as ride sharing, which is kind of crazy. So you go to a client meeting, and I'm sure Doug, and Una, you might remember this as well, but you would go to a client meeting and you would leave and you would awkwardly stand outside because you had to call dispatch to get a yellow taxi cab to come pick you up. And that could have been 30 minutes. And so you'd awkwardly sitting outside of an office or like checking in on your...
Sanket Merchant (02:25.006)
…how are you doing? You go, okay. But it's been amazing. And so I've been out here for the last 15 years. So spent the early part of my career during software M&A, which effectively is your glorified real estate broker. And instead of selling a house, you're helping a software company, typically between 10 to 50 million revenue, anywhere between a hundred and a half billion of enterprise value decide what do we do next? Right? What do we aspire to be when we grow up? Do we want to sell the business? Do we want to raise more capital? Do we want to do a little bit of both? And in 2016, I found my way to PeakSpan.
And there's an actually interesting story about one of the co-founders of Managing Partners here that goes to the crux of the topic of conversation that won me over, because investment banking is not notoriously known for having world-class cultures. And there's probably some stories over drinks that we can share there, but ended up joining PeakSpan 2016. I was one of the first non-founding hires at the time. We were two investments out of our first fund, which is $150 million fund, and fast forward the clock. Nine years, we're on the precipice of PeakSpan's 10th anniversary.
We've now grown the portfolio from 2 to 55, the team from 4 to just shy of 30, just under two billion of assets under management over the last decade. And I think we're on our way of, hopefully, knock on 1, building a generational firm in emerging growth state B2B software investing, which is really, really exciting. So, that's my background. work with over a dozen of our portfolio partners. I lead our education technology and cybersecurity, and digital infrastructure practice. And then just by way of background, really quickly on PeakSpan, we're a US-based emerging growth stage investment firm. We're partnered with entrepreneurs in that journey from 3 to 10 million in revenue to 50 million plus. We've now had the privilege of working with 55 growth-stage software companies. And one of the things that I'm incredibly proud of, beyond the returns, because that gives us the opportunity to continue doing what we're doing.
Because we generate, you know, if we generate great outcomes for our stakeholders, entrepreneurs, as well as limited partners, then we get the opportunity to play the game. Right. But most importantly, what I'm proud of is that a lot of folks talk about being founder-friendly, and there are a lot of different flavors of ice cream out there when it comes to investors. We pride ourselves on being really, really good at helping our entrepreneurs drive the best risk-adjusted outcome. What that means is that one is our commitments to our entrepreneurs is that if you go with PeakSpan, the outcome will be better.
Sanket Merchant (04:40.974)
And number two is we think about each portfolio partner as if we had a portfolio of one. And so I'm one of the stats I'm most proud of is that in 55 portfolio partnerships to date, we've only had one company fail. And so this team doesn't take losing lightly. We work our tails off to protect value for our businesses and then, importantly, try to be the best partner to helping them get to the best goal, whether that's 30, 50, a hundred plus million in revenue. So yeah, that's us.
Doug Dosberg
That's, that's an incredible stat there. One failure out of how many you said 55?
Sanket Merchant
55.
Doug Dosberg
That's that's quite a hit right there.
Sanket Merchant
Knocking on wood. I'm hoping we can keep it there. So.
Una Japundza
Sandket, besides the interesting work, what has helped you at PeakSpan for 10 years across all these investments, growing the team? It must be something you guys are doing right on the culture front that you're still there.
Sanket Merchant
Yeah. mean, I think, I think ultimately, you know, it, I think at the core, like I could, I could share about it. Sure. Talk a little bit about it from my work and I think what we've done from a people perspective, and then also organizationally, think, I think the biggest thing you realize is that, you know, just like any organization, I think what makes Heytaco so successful or businesses so successful is clarity across different dimensions from your strategy to your mission, to your customer, to the product strategy. Right. And so for us, we've been obsessed about.
One is having clarity about our identity. Our aspiration is to be the best emerging growth-stage B2B software investor out there. And like the thing that we wake up really inspired by every single day is can we be the best single sport athletes in B2B software in the vertical markets that we cover at this specific stage of growth? And one of the early observations I had in my career was observing this disproportionate value placed on specialization, right?
Sanket Merchant (06:23.872)
Even for Heytaco, you could say, rewards and recognition, and appreciation are a broad category. We want to do everything for everyone, or we can be really amazing at what we do, which is being able to provide really organic, authentic recognition in the flow of work, in the way that people organically want to do it. And we're going to be monsters at that, right? And so for us, we build amazing clarity in our mission to be the partner stories for growth state entrepreneurs and teams. Number two is our customer. Who do we serve? Right? Oftentimes, it's first or second-time entrepreneurs, folks that had took on huge opportunity costs, not taking that lucrative job at a fan company with the big generous RSU packages and the big cash comp and said, I'm going to do this audacious thing, which is really explore this infatuation with a problem statement, right? Oftentimes, making huge sacrifices with young families or with partners, where they said, Hey, listen, I'm not going to be making a lot of money. I'm not going to be taking that a payroll paycheck, but I believe this thing is going to work out. Right?
And there was a, there was a, an analogy my partner had shared with me, which is when you go to like Vegas, there might be two perspectives that you have. Right? And I think this was inspired by a son who was a much younger kid at the time, who's now like a sophomore or junior in college. But he asked him like, dad, you know, what if we took all of our net worth and went to the blackjack table or went to the roulette table and put it on black? There are two perspectives. One is there's a, there's a, there's a school of thought that says, my oh my god, in a matter of minutes, I could double my net worth. That's incredible. That's exciting. There's the other portion that's like, terrifying that I can lose everything in a matter of seconds.
And so for our entrepreneurs, for folks who own 30 to 70 % of their business and their entire life's worth is their life's work and their team's hard effort is, is, is captured in that business. The appetite for failure is low. And so we are studying at supporting that entrepreneur. And, you know, I think for us, it's taken a step back and understanding for that entrepreneur, for that customer, what is the product that we want to deliver?
And we can talk about blog posts and we can talk about advisors and all these things, but ultimately it comes down to what this customer cares deeply about. Just like your customers at Heytaco, for any business is an outcome. That outcome is how do I optimize the best risk reduction outcome? How do you help me protect value in my business and help me execute to the best view of success? And we got really, really good at executing across those key dimensions. So I would say organizationally, that has been like, we have been very clear in our identity, very clear in our North Star.
Sanket Merchant (08:46.242)
And I would say organizationally, like, I think, at the core of it, talk about this after we make an investment, I, you know, we built this, this kind of muscle around sharing back with the teams that we back, right? Sharing back for the leadership teams, the good, the bad, the uccles, the full 360. Like, what are we doing? Well, we want to do more of what are the things that we don't do so well when you get better at? One of the things that could like, really be an achilles like tear, right? And, sadly, you know, shout out to Jason Tatum. I hope he gets better.
But it is like the stuff you don't want happening, right? And as a part of that, we also leverage those opportunities to inspire our team because at the end of the day, for a software company where you don't have a lot of balance sheet dependencies in a world in which we are seeing the democratization of software, we're seeing whether it's in terms of like how vibe coding and how software gets developed to how software gets hosted and delivered, right? The barriers to entry have gotten lower and lower and lower. I think differentiation becomes more, you know, it becomes less material, I think. And it comes down to execution. Why is Workday? Why are these iconic software franchises as successful as they are? Did anybody know that Workday on a quarterly basis generates a billion of net, no, maybe it's annual, a billion of net new ARR every year. Just think about that sheer volume. And it comes down to, do they have an amazing product? I think so, right? If you talk to their customers, I don't know. Maybe they have a different opinion, but core product, great product.
But importantly, flawless execution. They're monsters. All these companies are monsters in execution. And so, at the core of it is people. And so I think for software companies, what I've noticed is their IP, their biggest competitive advantage, other human beings is that workforce. And for us at the core of it, I could go and take a laptop and operate anywhere in the world at PeakSpan. And so for us, our competitive advantage is human beings mobilized around a clear purpose, a clear mission, a clear sense of identity, and core values that allow us to bring the best out of each other, but importantly, put us in the best position to execute our mission, right? For our entrepreneurs and for our stakeholders. So I hope that was helpful.
Una Japundza (10:51.406)
That was helpful. And I loved your, how you described your organization around this unique identity, unique purpose, and serving your customers. Cause I think a misconception is that you're sitting in your palatial office waiting, like people are coming to you and you're just kind of like writing checks, right? And I remember getting an email from you in our exchange, and you had a little banner for a webinar. And I'm like, webinar? Like, why has PeakSpan been doing webinars about optimizing landing page conversion, right? Or something that's so, I like, that's interesting by the way. I should probably go to that.
But it highlights your, you're really there to support the entrepreneurs. The ones you back and the ones that you might back in the future, right? I presume that's also how you find people that are interested in partnering with you guys.
Sanket Merchant
100 %. What I, Una, that's, it's a fantastic point. And, I also, for those that don't know, but some who may listen in and know, I one of the cool things about working for a younger company, Una, you know about this, you and I talked a lot about this in our in our prep call. The cool part is you get to wear a lot of hats, right? And, you know, I think when I joined PeakSpan, it was very entrepreneurial. I remember sitting in the office, I think it was my first day, and, you know, try not to open my mouth up too much, to, to let everybody know it was my first day or it might've been my first week, at that point in time, but I was sitting down with, I think the fourth wealthiest human being in China, where we have like six translators in the office and it was an amazing experience. Like, at that point in my career, I would have never had that experience. And I know a lot of my peers who went out to different firms doing the same thing would never have had that experience, right? And so I think, you know, one of the things I, making that comment to you, is I get to wear a marketing hat and that's a cool thing. Like I get to think about, you know, what are the paying points for entrepreneurs?
And, how can we help solve them? I think that's taken a step back philosophically. What you'll hear us talk about is portfolio partnerships, not portfolio companies, right? We think about it, the triangle for PeakSpan has three points, and you actually look under our triangle, there are three dots. The three dots symbolize our three constituent groups and stakeholders that we serve. Our team, our entrepreneurs, our limited partners. We do not forget.
Sanket Merchant (12:54.616)
The reason why we have the option to do what we do every single day is because of these three constituent groups, right? And so we remind ourselves at the end of the day, you earn your seat every single day. How you show it for your entrepreneurs, you know, that's that that is in good and bad situations, where I was talking to another portfolio partner who has gone through a bit of a, you know, a moment of turbulence. I'll describe this that and, and I've said, you know, character and partnership are defined in these, these challenging moments and how you show up your availability, the agility, the support, the selflessness, the grit, like, you know, that's where you build your reputation, not on, you know, the $30 billion acquisitions that, you know, result in a tombstone on your wall. And from my perspective, right. So.
Una Japundza
Doug, that must resonate with you. You've definitely been through a lot of crazy things in almost 10 years.
Doug Dosberg
Yeah. I mean, a little bit of a roller coaster. Sanket, I'm curious. So you've had the opportunity to meet hundreds of leadership teams. What do you feel distinguishes the truly amazing ones from the rest?
Sanket Merchant
It's a great question. And I think it's no different from, I think it's a broader question around high-performing teams. Like, what do we, what do we know about high-performing teams? And yeah, what's interesting is, we're going to be putting on a blog post on, on culture and people, come out soon, which is kind of timely, but I'll share that with you all when that goes live.
And we also had one of our off-sites in November last year focused on culture, righ? And the scalability of our business, right? And I would say like, it comes down to, from my perspective, is when I reflect on our team and what we're trying to build. And then, importantly, what I've seen across the entrepreneurial teams that we back, um, I actually wrote this down. I was like kind of thinking about this. And so I would come back to first and foremost as an intense culture on accountability. Right? And, you know, a huge sports fan, love my Denver Nuggets, sad how we, our season ended.
Sanket Merchant (14:41.71)
Not the way I hoped for, but, you know, I think it applies to sports teams, F1 applies to organizations. So think, I think an intense cultural art accountability, you know, it is, I'm an independent, I operate in an accountability world. Our entrepreneurial teams do. And so I think, I think folks who don't make excuses, but kind of own up to things and understand, like whether it's at an individual level, at an IC level in terms of what you contribute to the broader goal and objective. I certainly have responsibilities here as a partner at our firm in terms of how we grow and develop our talent, how we think about strategy development, how do I think about my individual contributions to our overall portfolio, how we're going to like help create value.
So I think one is accountability. Second is a commitment to team. And I think these are, these are all going to seem very generic, but I, you know, I'll use this in the context, and I'm kind of giving myself giving a little bit of sway because I, it was going to go to the tacos piece of this.
Una Japundza
You can reuse it, you can reuse it, don't worry about it.
Sanket Merchant
But you know, I think about it in the context of like even my home, right? And I tell my wife all the time, like, we're a team. And, you know, my father-in-law just went through a pretty onerous cardiac bypass surgery. And that's, know, that's like, it is, you know, it's unfortunate that many people have to go through that. But it certainly does diminish the gravity of that procedure and the fact that your heart's stopping for X minutes or hours. And, you know, it's a crazy thing. And, you know, it is, I've got a young family with…
Sanket Merchant (16:12.664)
…twin boys that are turning six this summer and you just show up, right? And I think in that moment, I have to acknowledge that my wife wears a lot of different hats and all those hats are equally important. That hat is being a wife, being a beautiful young woman, being an amazing professional, being a daughter, being a sibling. And in that moment, what was most important is the role she plays as a daughter and a great teammate has the back of their colleague, their team members, right?
And so I think teams that have an orientation around commitment to one another I think is one built on empathy, care, and compassion. And I think that, you know, I don't know of any organizations or sports franchises or relationships that have thrived on a philosophy of selfishness personally. Maybe there are some out there, but I just, I don't know that I can think of.
Una Japundza
They may not have thrived for too long, or maybe that's not a definition of thrive, right, you can kind of win a championship, but not build a program on self-defense probably.
Sanket
Exactly. It's not an individual sport, right? And even in that, if you look at it, and like, was, you know, one of the things that we talked about our culture offsite is, can we study teams that like the highest performing teams, and what do we know about those teams? I mean, think about this for the longest period of time, Mercedes-Benz was the most successful F1 franchise. They had, you know, six, like six, Constructor Cup champions or eight, you know, Lewis Hamilton was arguably the most historic, a prolific…
Sanket Merchant (17:40.084)
…F Formula One driver in the history of the sport. But what people don't acknowledge is in order to have a three second pit stop, the amount of human, the volume of human beings that have to perfectly execute their role to allow him to have a one second advantage or half a second advantage or the 1800 people at HQ that work on aerodynamics or the engine or blah, blah, blah, blah, blah. That I clearly am out of my depth. The fact that I got this far is actually quite impressive. That to me, I think is really powerful.
I think third, I think this is under understated, and no one is perfect. Right. When I think about including building an amazing software company, it's really hard, as you both know. Um, and you go through economic periods of, of, of existential crisis, whether it's inflation or whether it's it's economic slowdown, it's tariffs. It's a lot of things that are outside of your control and, or it's things that are just not working internally. And what I found is, is coachability is paramount, right? I think about some of our, our team members, and I'm so inspired by the team that we've assembled here at PeakSpan, but I also think about the team of portfolio partners or the executive, the leadership teams that we've built. And I, um, these are maybe two intertwined points, but you know, humility and coachability. And acknowledging that I'm not perfect. I'm far from perfect, right? And I, after every diligence process, I asked my founders, like my leadership teams, like, what could I have done better? What PeakSpan could have done better, right? If I show up to a board meeting, what could I have done to make that session more productive, right? I'm here to challenge you. I'm here to make you better. I'm here to roll up my sleeves, and I operate in this extension of your team. And I'm going to bring hopefully, certain experiences and skillsets that are complementary to the franchise that we're building, but we want to build a winning franchise, that doesn't mean that I'm excused of any development areas. Right?
And so I think for folks who come up, show up, you know, with, think the resolve understanding or like, Hey, because Sanket has a critique or a perspective that I disagree with, doesn't mean that that is aimed at me personally. He's not here to like hurt my feelings or to break me down or tear me down, but identifying a development area. I think about, you know, that for our team in terms of like us wanting to get better or, you know …,
Sanket Merchant (19:55.598)
…to your personal relationships, right? So I think coachability to me is amazing. And I think it allows you to take what would otherwise be difficult situations and make them friction-ful and make them have them focus on the outcome.
There's nothing that I gain criticizing a team member or I know that my colleagues or entrepreneurs gain in criticizing me. So I already go into that conversation assuming good intent and knowing that, you know, with a bit of gratitude that someone who doesn't have really much to gain, maybe, from, from giving me some feedback that they're willing to take the time, maybe approach what would feel like an uncomfortable conversation and share something with me.
That shows me true care and compassion, right? Like, Hey, I'm invested to make you better. Right? So I would say that's the, the, the third thing here and I'll tune up just like wrap it up, but, transparency. I think it, I'm sure, as you imagine your teams, right. It's just like, you know, share bad information fast. You know, or good information, fast, bad information, even faster. And, just know that like, so I think for me it's, it's, it's just, you know, I think, being open, honest, transparent, I think is always just key.
And I think, you know, I think trust is, it's hard to earn. It's easy to lose. And, I, I, one thing I've, I'm sure like, you know, there was a point in my career where I felt like I had, it's, like the arena changed, right? It's like you went from playing indoor, you know, a rate like,you're, playing in Dallas, right? Under like a dome and perfect, you know, perfect conditions to going out to Green Bay in the middle of winter and playing on like snow. I'm just like, Holy crap, this is different. And, I think the point being there is that like it, how I, things that were integral to me early in my career might not have been the same skillset. needed to be successful long term, if that made sense. But one of the things I always coached junior team members is to invest forward to build trust and to establish yourself as being somebody that is accountable, that's trustworthy, that's reliable.
And you can ride the coattails of that hard work for a long time. That's how you build agency. Like if you think about your team and you know, like, when somebody says, I'm gonna do something by X, Y, Z time, there are certain people who you know, they're gonna get it done. Like, I just know they're gonna crush it. They're gonna do an amazing job at it. And I'm gonna say, whoever it is, guy, gal, go do what you need to do. I trust you and you're gonna get it done.
Sanket Merchant (22:20.858)
And other folks that you may say, Hey, don't have a great experience here and I need a micromanage a little bit. And I think for entrepreneurial teams, think it's just like, know, and for our team internally, like it is, it's just an important quality, I think trust in anything that you do.
And the last thing I would just call out is, agility. And I think about this, you know, one of our operating advisors, gentleman by the name of Dr. Andre Martin, an exceptional human being. If there's someone I could speak like and have swagger like and be like him, he's just, he's amazing.
Shout out, Andre, if you're listening to this or do listen to this, but the exception human being, but he was the senior, people, HR leader at Mars, Nike, Young Brands, Target, Google. Like you just name it. Like just iconic human being. Started his career as like a performance consultant or coach to sports teams. And, know, I think, you know, one of the things that I, I've come to appreciate is, or, you know, for me is, moving quickly, being hyper responsive. Well, like, so actually I forgot the thought. The reason I mentioned what he said or mentioned him is because he has this perspective around, there's no such thing as like work-life balance. Like that's a fallacy that people are trying to pursue. And yeah, whether you agree with that or not, think it's a fair intellectual perspective to have. And I think what I have been committed to is work-life integration, if that makes sense.
And anything that I do approach it with agility and responsiveness, whether that is responding to an entrepreneur that is in a crisis situation and noting that I'm available 24 by seven. I generally mean that like you're not sending my entrepreneurs. I, you know, you may not know where I'm at in the world at the time, but like being available to someone, showing someone that like, whatever is their issue or they send you an email, whatever it is that you respond quickly to it. That's like one, but I think more importantly, is that like, when there's a priority set or we talk about an initiative or we talk about something that's important that we're mobilizing quickly to get stuff done. Right. And I think, I think to me, you know, we talk about this like time kills all deals, shelf life on certain things isn't really rich. Right? And I think the teams that are incredibly successful, I feel like just approach things with a level of intensity that is just insane. Right? And it's not…
Sanket Merchant (24:40.75)
…this pursuit of perfection that can be, you know, that can be, I think, immobilizing at times. But it's, it is a humility to know, like, you know, there's a, there's a story and I realized I'm kind of using a lot of analogies that I probably shouldn't, but there's a story that I love and I can't remember who the author of the story was, but it was like a boy in a forest that were like stuck out in the forest and was like terrible conditions, a foggy, and the gentleman talks, looks at his horse and he's like, I don't know where to go. I'm lost. Like, what do I do? And he's like, can you see your first step? He said, yes, take it. Then the next one, then the next one.
And so I love this idea of, and there's another quote I sent my team, which is, fear is nothing, nothing, but it's not an indictment on capability or capacity. It's an acknowledgement of inexperience, and you just got to do it. Right? And I think that's like one thing I want to impart to my kids, I think about is being fearless. It doesn't mean being an ego testicle, but it's understanding that, like, you know, in that moment, fear is just a reaction to something that is unknown.
But if you approach things with agility in an operational kind of framework, okay, I don't know how to solve this problem. I've never seen this before, but I do know what I kind of need to solve for, which of these five things. And then how do I build an operational plan here? And how do I create like create a timeline to make sure that like I'm iterating and that I know how to go to Una when I have this question or I have to go to Doug with this like question, or at least I can come with the framework and then get feedback so we could iterate to get things out. think that's pretty, pretty amazing.
And so I will just say for me at PeakSpan, you know, whether it's thesis development, whether it's cool marketing initiatives, you know, it is like, you know, it's, you gotta try it. You gotta move. So I hope that was helpful.
Una Japundza
That was very helpful. No, analogy, we love analogies, we love stories, we all remember them.
Doug Dosberg (26:29.812)
I just can't, I can't stop thinking, wondering if you have your six-year-olds playing basketball yet?
Sanket Merchant
I, I, I do. I do. They've got sick jumpers. And it's the only sport that I feel like I've got any, any, qualification to coach a mom for the next couple of years. But it's amazing. will tell you it is. They are absolute sponges. They've been watching every playoff series with me, and you know, the Nuggets lost. My wife was like, You've made them into die-hard fans of the sport and the Warriors and the Nuggets and she's like, you when they lost she's like, this is also a good opportunity to take them out of lose with grace to.
Doug Dosberg
Absolutely.
Sanket Merchant
But it's crazy how they like come in and from like, Louie, two-week series go and say like -that's double dribble, that's a turnover. Come on, zone, zone. And I'm like, whoa. But they're picking up so much from the commentary, and they're sponges. It's amazing.
Una Japundza
It must make watching games extra fun with them.
Sanket Merchant (27:26.158)
Yeah, it is, it is, it was it was the moment that I I realized moment seeing them share my frustration with the Denver loss was the moment was like I, I didn't, I didn't prepare for that piece of it and so that was kind of I so we're like hey buddy like let's sit down It yeah, it was unfortunate, but blah blah blah blah blah, so but they're they're really into it. They're enjoying it.
Una Japundza
Follow-up question for you about all these qualities of amazing teams. How important are those to you when you're doing your investment thesis and reviewing potential new investments? Like when you're looking at the entrepreneurial team, do you run them through the gamut of like, do they need these certain things?
Sanket Merchant
That's a great question. would say it's not as structured in the sense of like, have a checklist, and are we seeing these things? I find that companies that we back that are nately successful have these common strands of DNA. They are forced together by these shared attributes. Some are stronger than others in different areas. I also feel like teams grow, right? And I think the identity of an organization will change over time, particularly as you build out the leadership team as the company scales and you focus less on building the business, you're building the company, which is, you know, if you go back to our masterclass series, there's a couple of like, we've got amazing advisors talk about how do you scale culture, how do you scale performance culture? How do you graduate from viable to valuable, which is actually an interesting delineation in the scale-up journey. Like the number of companies that get to 10 versus 30 to 50, like that's a, that's a, there's a pretty big gap there. Right? In terms of companies that have been successful kind of navigating that, that trough, right. And so I would say, like, it's not so hard and fast. I would say that you indirectly see those common, those commonalities. I will say when it comes to founder CEOs, there is, you know, I, I think that's more important in terms of just like, here's going to be, you know, you know, the most significant and important collaborator day to day in terms of shepherding this business together to an amazing outcome.
Sanket Merchant (29:27.662)
Do I feel like there is trust? Do I feel like there's the ability to constructively debate and discuss things? Mutual respect. Do we operate with high integrity and all those things, right? Like, we seeing those things? And so I, I, I think probably at that level, it's if you don't have conviction in those things and conversely, if you, as a founder, don't have conviction in your investor, but Hey, this is someone, this is like, there's a post from one of our founders. And he said, you know, not to be too self-complimentary, but like, you know, Hey, like it's pretty amazing when you can find an investor that is your four AM buddy, kind of like a founder where you feel like is an extension of your founding team. Like that's where you feel like you're in a good spot.
I also think that, you know, for it, for founders, for entrepreneurs, like you should also be thinking about, like, Hey, we have a core set of values. Capital is a commodity to a certain extent, right? I think for great companies, access to capital is not a constraint, to be honest, I mean, there's two and a half trillion dollars of dry powder and private equity right now. So I think that's a great indication of that. And so, you know, being, I think, judicious about who do we raise from and do we feel like we're bringing on the right stakeholders in our business, I think is really, really important.
Una Japundza
It sounds like it goes both ways, just like….
Sanket Merchant
It goes both ways.
Una Japundza
… when you're finding a new job, you're interviewing the company as much as they're interviewing you, or you should be at least.
Sanket Merchant (30:42.498)
Well, and by the way, you see this on executive teams as well. Right? I mean, I think, I think that's like one of the things I was actually talking to one of my advisors about, James Isaac's exceptional human being. And we can link to some of the, like culture-related like webinars and our masterclasses, that's helpful for your audience and community. But, you know, he had scaled. Sierra, which is a fun one portfolio partner from, you know, low eight figures in revenue to, you know, like eight X scale, right? Over a six year period.
And, was the first key executive we brought into the business outside of the founders, and was running probably at the peak of a 200-person go-to-market org, it's massive. And, you know, one of the things he had, he's one of our kind of revenue advisors, CRO advisors. And one of the things he shared with one of our entrepreneurs of was powerful. Cause we were making our first key executive hire that wasn't a founder. And it wasn't like a VP, someone who kind of grew up in the ranks, but it was like an external kind of C-suite person.
And he made this comment that you need to hire not looking in your rear view mirror, but looking through your windshield, like looking forward, not looking backwards. And that was an interesting kind of data point, right? And I think this goes back to like, you know, maybe a provocative perspective that, you know, that identity, your values will not change, but maybe your culture does evolve. And I think there's a distinction there between values and culture, right?
And so I think that'll be interesting too, for a lot of folks is that as you grow your leadership team, you're going to find amazing human beings that may not fit the identity, may not align with your values and certainly may not fit into your culture looking forward as to what you aspire to build. They may fit historically looking back, but maybe not forward. And importantly, I think as you build out your leadership team, I think those folks are going to bring in something amazing and you should go through a culture's and value, like not probably not a values audit, but like a cultural audit. And you know, are the things that we thought 12 or 18 months ago still true to our business today? So.
Una Japundza (32:36.098)
Doug, should we move into gratitude?
Doug Dosberg
Yeah, I feel like I can listen to Sanket all day long.
Una Japundza
You're teaching us the master class. And we would definitely share those master classes with our audience as well. So I'll send you a follow-up.
Sanket Merchant
I will, I will tell you, think one of the best, the best jobs I have is, is working with some of the smartest minds in our space. And I felt like it's always a masterclass for me. Every time I jump on the phone with a Linda Chen or James Isaac or her coonants or John Ham, I'm like, I'm just blown away that you've taken now 30, 40, 50 years of hands-on experience doing iconic things. And I have the opportunity in like a 10-minute conversation to take away the TLDR, the synopsis. And so, I really appreciate you calling that out, but yeah.
So in terms of gratitude, I, these are, it's, like, I'm going to take the approach of everyone eats, and, and, I think you said, when I said five tacos, is that right?
Una Japundza (33:31.054)
That’s right. Five tacos.
Sanket Merchant
Awesome. So I would say the, the first one I give out to is, my wife. I think she is, going back to what I kind of talked about earlier, like TLDR, she's an amazing human being, amazing, beautiful woman.
Sanket Merchant (33:48.174)
I tell her like, you know, um, she's the best teammate, and I always feel like when you're counting or like whenever there's a tally of some kind, like you're always in a dangerous place in a relationship. If somebody's counting, like, do I do? I did this many diaper changes. I did that. I did this. I did that. You know, you got to work out 30 minutes, blah, blah, blah, blah, blah. You know, and I think accessorism, I love language with her, and, and, you know, I know that she loves to like sleep in. And I also know that she gives me the space to do what I want to do, like do what I need to do.
And so I feel like we, we understand the roles that we can pay and those roles are dynamic at times. And sometimes it's a, you know, she needs to be a daughter and be there to support her family through a challenging health situation. And we've got each other's back and nobody's keeping score. And so I think that's a piece of it. We're awesome team members, which is amazing. And I would also say that like, she's an amazing, like, you know, I feel like an amazing kind of coach in that, you know, there is a, it's really, really good at helping me stay grounded in equilibrium.
And there's a famous kind of quote from Novak Djokovic, a huge tennis fan. And one of the things that he had talked about is he said, if he looked at pure skillset amongst the top ATP players, right? 10 to 100, like skillset wise, negligible, like there's everybody's so freaking good, but he's like the difference of what makes, you know, what I think has contributed to 24 grand slams or championships that he's won, which is at the top of the list of ever, in terms of success is he's like my ability to get back after a bad shot to get back to the equilibrium. I never get too high and never get too low.
And so I credit my wife to be an amazing coach in terms of health, and me state grounded. And having challenged me to be over the last decade, we've been together, which is kind of crazy. It's 10 years this March, to be in the best version of myself as a man, as a person, as a father, as a husband, as a son-in-law, et cetera. So that's my first taco.
My second taco is to my kids. I love my kids.
Una Japundza (35:52.78)
Do they get to share one, or do they each get one of the five?
Sanket Merchant
They, they get to share it. get to share. I'm going to be, like I said, everybody's going to eat today. But I think, I think the, as I'm sure that anybody's got kids understands, like the biggest, learning inflection point for me in my career was in understanding the importance of the gravity of different spheres in my life that were important to me. And that is like health,...
Sanket Merchant (36:23.374)
… and that is your family, that is your kids, that's your professional ambitions and commitments, and things like. And at times, like different spheres get health a little bit higher, but they all need to be cared for with the same level of love, attention, and time, and things like that. So, um, I try to, I try to exercise like one is they've given me amazing purpose, right? They just like remind me, you know, why do we do anything that we do? Right? It's, you know, it's the most rewarding thing you could ever do. And from my perspective is being a parent. They also, you realize you're exhausted as all hell, like it's crazy. But at the same time, they are also your source of energy, right? They remind you like how to be present. They keep you grounded in the fundamentals, which is so amazing in life, right? Cause you can't, you can't get too upset, you know, like you realize that like, you know, it's it's not life or death and they've got short attention spans and you know, like they might have a tough moment and they just move on and you kind of realize like, wow, like they get back really quickly.
So I say my kids, like they're just source of purpose, but I feel like I'm constantly learning the fundamentals of life from them. Right? And they just kind of give you a great perspective in terms of of what matters and what doesn't. Right?
And the last three I'll give out to our, our, you know, one is to our team. Like I think I work with an amazing team. And they're exceptional human beings. I love that. I love the way that they, you know, I'm grateful for the impact support they, they provide me with, how they help enable the achievement of our mission. And I find like, I remember my wife telling me she was like Gap for almost like a decade and a half, which is kind of crazy. Cause if you think about the number of people that are in a job for 10, 15 years these days, it's not, it's not a large number. So you're like the unicorn of the corporate world.
And, one of the things that she talked about is, know, my job as a manager is, and Gap does an amazing job. They have manager trainings like every week, every two weeks, maybe excessive, but they do a lot of investment in leadership. And one of things she had told me about was, you know, one of the measures of my success is how are my team members, how are my direct reports progressing? Are they getting promoted? Are they continuing to grow? Right? And if they get promoted, I've done my job.
Sanket Merchant
Right? There's like a business measurement of success. There's that piece of it. And so I think, I think for my team, it's like, if there's any perception that you can do things on your own, you are incredibly naive.
Our success is that I have a role to play. try to be the best version of myself in that role, but that, that my success has enabled, or our achievement is enabled by everybody showing up prepared to do their jobs. And our team is exceptional. And I think that they continue to be amazing stewards of our mission of the culture. And, um, you know, so they're awesome. The team is awesome.
The last one I'll give out too is for our founders and our LPs. And I know it's probably intended to be individuals, but it's just hard to like call it specific people. But I would say like, without these constituent groups, like we don't have a business, like PeakSpan doesn't exist. If you don't have, you know, capital for which you're responsible, a great steward of, um, and you don't have an exceptional founders that you can back, you know, I, I just have a, there's not much I'm doing. So. I'm incredibly grateful for that. get to work with exceptional founders. We have the privilege of doing what we're doing because, you know, LPs trust us to deliver great outcomes for them. And I think about like, this is one of the things that oftentimes gets overlooked. Like these are endowments, these are pension funds, these are family offices that have amazing missions, whether they're creating affordability, accessibility to higher education or education in general, whether they're serving underserved communities, whether they are going after cancer research or something else like.
It is the investments we're making, the success that we drive powers a lot of philanthropic, nonprofit, really noble causes. And I think, you know, one, to have the trust of those stakeholders is amazing. And two is to be able to see the impact going back to purpose and identity and impact and things like that, to know that the success we have, the reason we fight in the trenches, we put in the effort has that derivative benefit, I think to me is really inspiring.
And I'm really grateful for our LPs who share some of that impact of what we are powering. And I share that with our entrepreneurs to know that like, it's not just about generating returns to, you know, for economic success, like the, are different communities that benefit from that as well.
Una Japundza (41:01.006)
Sanket, those are very meaty tacos. And I don't know about you, Doug, but I'm like ready to like get my day started and start working.Your energy is awesome. So I just want to thank you for…
Sanket Merchant
Of course, my pleasure.
Una Japundza
… bringing it here, but I have a feeling you bring it to everything you do every day.
Sanket Merchant (41:19.054)
I like to say you can't clap with one hand. I appreciate the platform. I appreciate
being able to feed your energy and enthusiasm. And I appreciate you creating an amazing space to have these conversations and to surface these perspectives. It's really inspiring. I love what you guys are doing, and I appreciate the opportunity just to be a part of it.
Doug Dosberg
Thank you, Sanket.
Una Japundza (41:44.558)
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