In the early days, we realize really quickly that specifically five church is not going to be for everyone that gave us permission to be the best church, we could be for who we are and for who were called to specifically, even when you talk about, okay, do what's best for the user, you actually have to understand what your target user, we're used specifically called. A pastor turn tech leader and a millennial churchgoer, exploring the intersection of technology, culture and faith, equipping you with innovative strategies to support you as you live out your calling leader churches with confidence to step into the future together. This is the give it up podcast. But it's one of the gifts that we have being part of overflow is that it is quite literally a Silicon Valley startup company. That's where we're sitting right now. And because we're a startup, we've had to learn some very applicable things such as pivoting. Yes, knowing when to quit or abandon something had ended a different direction, and so many other nuances and caveats. And I feel like the Silicon Valley has become one known for the tech space innovation. But it's also known for being the best at pivoting and changing directions in order to succeed. And so I know that you have a lot of experience dealing with this. So I kind of want to get into your head in this episode. Because there are church planners that could be listening. There are big churches that could be listening, everyone in the same boat of we always have ideas. And I want to know, the lens in which you use when we're thinking about ideas here it overflow, as to, should we pursue this, or should we not? Let's start with that one. Yeah, good. I mean, whatever your perspective, or perception of the Silicon Valley, here's the facts. This is the home of Apple. This is the home of Google madda. Twitter now x.com Tesla, so many incredible companies, and Vidya. They're exploding because of the whole AI wave right now. And all the GPUs that are required, even before that crop of companies, which I didn't even include Uber and Airbnb as some of the newer wave companies. But even before that crop, you had the OGS, right? You had hp, you had, you know, these Titan companies into it Intel, that are birth that call Silicon Valley home. Yeah. And really, there are a lot of reasons for that. And we can dive into that this episode, or maybe another episode. But the fact of the matter is, we can learn, we can learn if there's that much concentration of innovative technology, software, internet companies in one space, maybe they've figured out something right. And so it's such a privilege and an honor to be able to live here to talk to the people that have created these companies been executive at these companies that have funded these companies, whether they're venture capitalists, angel investors, you know, the Silicon Valley, you guys have come here, multiple times. Now, every time you guys come arranged, by the way, which you know, stop coming. But even when it's nice out, there's not much to do. There's not much to do, the Silicon Valley actually is quite boring. And so the only thing to do is really invest in companies start companies start a new app. And that's what it is. We can learn a lot from the builders, the makers, creators, innovators here in the Silicon Valley. And so I wrote a whole book called high growth fundraising, the Silicon Valley Way. And that's not to over elevate or over glorify the Silicon Valley. But that's just to leverage the things of this world leverage, maybe things that are in secular culture, for the kingdom. Yeah. For the local church for church growth. Yeah, we can take a page from their book the same way that maybe many pastors, senior church leaders, creative directors, at churches, maybe take a page out of Hollywood's book, maybe take a page out of high production, high quality production studios in Hollywood, in LA, the same way that our merch teams probably take a page out of the book from Milan or Paris, or different brands that are prominent is the same way that we can think about scaling and innovation. And we can learn that from the best place on the planet that does it, which is the Silicon Valley, you named a couple of terms, we can kind of go in whatever direction you want. So but you named one pivot. Right? Yeah. So your question around there was, what have we learned being a Silicon Valley company in the area of pivoting and how can that apply to the church? Yeah. Yeah, so There is this underlying theme in the Silicon Valley that is build things that your customers want, build things that people want, but more specifically build things that your customers want to have this customer obsession to have this user oriented perspective. Literally, there's a whole function that really was made famous because of the Silicon Valley called you i UX, right user interface and user experience designers, these are designers specifically, designing from a user perspective, how can I reduce clicks? How can I format things to increase conversion to increase ease of use? How can I do these things for the sake of the user, so that the user has a delightful experience that they want to come back that they want to share it with their friends, that they get quicker to where they want to go? Yeah, and Silicon Valley is, is really made known for that. And so when you think about that concept of building things that people want having a user oriented approach, one of the ways that you measure that is through engagement metrics, okay? Not just how many users that I have, that can be a vanity metric. But how many times are those people engaging on a daily, weekly, you know, Max monthly basis, right? Ma uses what they call it monthly active users. And so if that number is going down, or even stagnating, and not growing anymore? Yeah, maybe it's time to pivot. Yeah, right. And so that kind of user oriented nature lends Silicon Valley companies to pivot quickly, because they don't want to fall into the definition of insanity, keep doing the same things keep offering the same platform, our product not changing and expecting different results, right. Yeah, that's insane. And so in the same way, churches, we kind of battle with this, we kind of battle with this, because on one spectrum, the church is all about traditionalism. And in a way, it's kind of like the meetings are all round, how can we do things the same? Like we've done it for 1000s of years, right? How can we, you know, keep tradition. And for the message that we're trying to preach? I think that's important, but for the method in which to propagate that message. I think that's actually really dangerous. Yeah. I think more churches should adopt this term. Maybe Silicon Valley made famous pivot, for the sake of your user, which is the disciple. Yeah. Or the seeker believer? Yeah. I think this is really important, because it would be almost obvious for people to say, well, building things people want people want Jesus. But it's not it's not automatically going to be successful, just because you assume we're going to open a building because people want Jesus. Yeah. And you're not saying social media engagement, right, in the way that people hear engagement, you're talking a much deeper disciple making type of that. So can you kind of elaborate good on that? Yeah, you know, there's a couple directions. My mind goes in this because in the early days, we realized really quickly that specifically vive church is not going to be for everyone. Five churches not going to even be for every believer. Yeah, to be honest. And that's the beauty of the Body of Christ, right? We're not actually, vive church specifically is not meant to literally reach every single believer on this planet. That's what the other hundreds of 1000s if not millions of churches are meant to do collectively as one body. Sure. Paul instructs churches in the body of Christ to get along all the time to move in unity, because that's how people will see Jesus is for our love for one another. Yeah. And what we realized early on, was that gave us permission to be the best church, we could be for who we are and for who were called to specifically. And so even when you talk about, okay, do what's best for the user, you actually have to understand what your target user, who are you specifically called to? Are you a church in the Silicon Valley, then probably your call to people in tech? Rob? Yeah, right. If you're not, maybe you shouldn't be located in Mountain View, California, across the street from Google, if you don't feel called to software engineers. Yeah. Right. Software Engineers and Google skew towards a different demographic age wise, right? It's typically 20 to 40. If you're 20 to 40, maybe you're more in the young kids category. So you can start breaking it down and so defining, okay, who am I specifically called to? Yeah, and how can I be the best for them? I'm not going to be the best for all, but how can I be the best for them? And to your point around, yeah, ultimately, we believe people want Jesus but here's the truth. That Every one will be saved. Right? Yeah. And so there is this tension where it's almost as if sometimes we try to cater our product too much to what we think people want. And start negotiating on the perfection of the Bible and its gospel, wow. And in its unadulterated form, is what people actually need, even though they may reject it. Sure. And so there's a little bit of nuance in in what we do. But what I would say is that if you understand your target, and you are focused on presenting the gospel in a way that can be understandable to that target, then you really leave it to God. Yeah, right. At that point, you, you leave it to God in the Holy Spirit to do what only God in the Holy Spirit can do. I think there's a deeper level here, though, in terms of discipleship, if they are a follower of Jesus, and they do go to your church, their engagement level is probably a better gauge for how you can tweak maybe your quote unquote, product or service, your worship experience, to get them into a deeper connection to community with one another. And with Jesus. At that point, it's not about just letting kind of God do it. If they're already a Jesus follower, it's like, no, no, he wants to partner with you now, to deepen them in their discipleship. Yeah. what it sounds like you're saying is that when Silicon Valley's approach would be build products that people want? The church's framing is actually build something that people need? Yeah, it's need versus one. Good. And that's how you can tell the difference. So we're talking about creating things and engagement, etc. And you mentioned it briefly, when it comes to pivoting. Let's say something isn't working. And in a previous episode, you actually shared your experience at church where you guys started a given kiosk situation. Yeah. After reading Robert Morris's book. Yeah. And then after four weeks, you abandon that idea completely? How could someone know and create a framework per se, that aligns with the concept of, okay, if this does or does not happen? That's when I know we need to pivot and change direction from here. That one was a pretty clear one because giving took a nosedive? Yeah, so we needed to resurrect it. Good thing, we believe in resurrection and the church. Because our finances were almost dead based on the graph. It flatlined. So that was a little bit more obvious one, I do think this is a good topic, because especially in the early days, you kind of need to preempt it with your team. We're gonna pivot a lot. We're gonna change a lot. Yeah, just be ready for change. Okay, yeah. Like just brace yourself, put on your seat belts. If you want to go on this ride with us, if you want to go on this journey, if you want to go this adventure, just just make it cool. If you want to go on this adventure, then just be ready for change. Because we might be rolling out the Next Steps program today. But in two months, don't ask me like we're probably going to change it if it's not working. Yeah, do things that work, right. There's a balance, though, where sometimes you need to let things mature long enough to know if it can work or not. It's all situational. It's all contextual. Yeah. I would say this, here's a good decision framework that you can make quicker decisions and make quicker pivots on things that are quote unquote, reversible. Right? Okay. So you can be really fast and make decisions and kind of experiment with things and test things for things that are easy to undo, unwind, pivot, explain. But don't be so hasty with making the decisions changes in pivots for things that are irreversible or hard to reverse. Does that make sense? So, for example, pivot all you want in terms of the language for your next steps program, go ham, right, especially in the early days, and people really didn't like the whole, like, grow, discover, learn, I don't know even what the language is anymore, but they didn't like that. And you needed more hipster language. Do it to your heart's content. Yeah, no harm, no foul, especially if you only have like a couple dozen people. What do you got to lose? I mean, you don't have a lot of people that are fixed to language anyway. So you can pivot all you want in that. But you know, an extreme example, on the other side is purchasing a building and taking out a loan for that building. And taking out a 30 year mortgage on that building that's a little bit more of an irreversible decision, or maybe not irreversible, very hard to unwind. And so you want to be very thoughtful about that. One. You want to invite counsel, you want to make sure it goes to the board. You want to make sure you talk to Key givers, you want to make sure that you weigh that in prayer. And you know, you're not pivoting too quickly with those type of heavy decisions. Yeah. And that's also super important. And being in the Silicon Valley, we know just how few startups actually survive. The majority of them do not, right. Yeah. Yeah. Eight out of 10 die. Yeah, in the first few years. And that's staggering. And, you know, let's just use church planning as an example, because that's an easy, parallel. But let's say you've attempted to plant a church. It's not going well, like numbers are not up into the right. If anything, you've peaked, you flatlined? How do you know when to abandon or let something die? With the church is a little bit trickier. Yeah. Because, especially in a category like that, it is oftentimes a calling. Right? And, and if you feel convicted, that it's your calling, you cannot abandon your calling. Right. Right. Yeah. And, and there's a lot of ways that you can contextualize the hardship of what you might be facing, whether it's being stuck or, you know, in stagnation, you know, there's very practical things that you can do to try to dissect, okay, what is not working? Why is it not working? Yeah. So it's a little bit trickier. If we're specifically talking about a pastor's calling a church planter is calling. Let me zoom out a bit and just talk about, in general, whether you should abandon a project, a product, a platform, a feature, you know, even a startup, right? Because, again, in the Silicon Valley, eight out of 10 startups completely fail. Yeah. Part of the reason that is true, though, is because most of those 10 are moonshots what we call moonshots. These are change the world or bust type ideas. These are really ambitious goals that, you know, two of them when they pan out, they pan out real big. Yeah. And the eight that fail, it kind of makes sense, because it was already kind of impossible anyways. And so I would say that part of church planting should be not. Am I going to abandon my church plan or not? But do I have 10 initiatives that I put out, were enough failed to indicate that I'm ambitious enough? Yeah. Yeah. If everything that you do just succeeds, maybe you're not risking enough, maybe you're not stepping out on faith enough? Maybe it's actually all in your own strengths. So that I don't know. That's kind of like a different thought to that. Yeah. I would say in the realm of list, keep it to company building really quick. There's a couple things that will make it very clear to abandon ship. Number one, you run out of money. Companies don't run out volunteers like church can run off volunteers. Yeah. And so there's a there's a stricter grading card on your worthiness have to continue to stay in business. Because, again, nobody's going to step into a career where they have to work for free because they have to pay their bills, they got to feed their family. Yeah. Right. So running out of money is one. Another one is if too many customers just sign up and don't want to continue using you. Right? If the attrition rate, if the churn rate is too high, and it's higher than the amount of customers that want to come on, then you either got to figure out how to plug that up. Or you're kind of just wasting resources, because it's kind of in one door out the other. Yeah, right. Yep. Applying that to churches, same thing, right? Maybe you shouldn't, you shouldn't invest into that billboard yet until you figure out your next steps program until you figure out your small groups until you figure out your ministry team and figure out your faith and foundations or alpha course or whatever you want to call it. Yeah. Right. And so. So I would say, if you can't keep customers, that's another indication. And if you can't recruit a team, if you can't keep team, right, if, again, team is in one door out the other, you can't recruit top talent, things like that. It's gonna be a hard road. And so those would be some symptoms of okay, maybe this is not the right company, either for this season or for you personally. And specifically in business. It's actually better to acknowledge that quickly and go through, you know, the pain of that early rather than allowing something to go on too long. And that breakup later being even more difficult. Yeah. And you talked about so much of this in your book, high growth fundraising, the Silicon Valley Way, which by the way, if you sign up for overflow insider, which is free, we have four books left. So the next for people that sign up, get a copy of Vance's book, feel free when you sign up for overflow insider for free. You overflowed Dotco slash insider of it. And this is really your in your lane when you're talking about tech innovation in the church and blending it all together. And I think this is a really helpful conversation and insight for church leaders to know to come alongside entrepreneurs. Because if you truly are in a startup, this is what you're facing. So I would love to kind of have you explain to people, what a startup actually looks like, what the goals are, what you do when you achieve set goals. Yeah. And kind of the downward effect of that. Yeah. So let's specifically talk about venture backed startups. Because there are other startup companies that people Bootstrap and they become lifestyle businesses, even if it's a software business, just be kind of a lifestyle business that pays for your, you know, your personal salary and your lifestyle and all that type of stuff. But primarily, what Silicon Valley is known for is for venture capital based businesses. Why should a potential company or specifically software company raise venture capital, if they want to own a market dominated market scale really quickly grow really fast, right, because you can grow faster with upfront capital to invest into your growth. And so the way that it's constructed in the Silicon Valley is, especially in these times where people have seen the playbook multiple times work, yeah, you can have a vision oriented around a problem or a pain point that you want to solve, you can recruit a couple of co founders. And you can create a deck and a prototype on that you can have enough in just that, assuming that there is credibility pedigree experience with the founders, assuming that the problem and the pain point are deep problems and pain points, assuming that people have conviction that you're the team to be able to solve that problem. And assuming that people agree that enough people have that problem for it to represent a big market. If those things are true, what you can probably do in the Silicon Valley specifically is email that out to high net worth individuals, what we call angel investors, that maybe have made money in tech, before understand the software business, and do what's called a pre seed round, or friends and family round, you can typically raise, you know, anywhere from 250,500 $1,000, to pay for the co founder salaries to pay for the initial software services that you need to resource to get the product up and running. Yep, etc, etc, if you get to certain milestones. So for example, you get to, you know, maybe six figures in revenue, let's say, you have some testimonials, case studies, you have a proof of concept that there's some traction with this business, it's not just an idea on a slide anymore, but there's real traction, then you can go out and pitch professional investors called venture capitalist, in what's called a formal seed round, that seed round might look like anywhere from $2 million to $5 million. Okay, this is where you can really build out a more professional team, you can hire more engineers, you can scale the product further, you can buy more infrastructure, so that their scalability, security, all that type of stuff to get suit more serious customers and to scale the current customers that you have invest into marketing maybe a little bit and things like that, you get to the next milestone that might look like a million dollars in annual recurring revenue. Once you hit that marker, you would be ready for what they call a series a next round of financing this financing round is maybe anywhere from 10 to $20 million. Wow. Right? Big jump. Yeah, and, you know, so forth. And so on the next round of funding, maybe you need to get to like five to$10 million plus in annual recurring revenue, and then you would be worthy of a series B, which is could be anywhere from 20 million to 50 million. I have a friend that just raised a series B for 63 million. Wow, right, a FinTech company. And so the progression goes on. Sure. So what's happening in the background? Well, each set of investors are investing at a certain valuation. They're buying a portion of your company at a certain price at any given time. Right. Sometimes they do it based on what they call the market price. It's what people are willing to pay for based on your idea, your pedigree, their believability that you're going to make this happen. And sometimes they based evaluation on real economics, so a multiple of your revenue. So for example, for software as a service businesses, what they might value you at is 10 to 20x your ARR your annual recurring revenue, if you're a high growth software business, and that's the price you're gonna pay. So for example, let's say that the pre seed round, they purchased a part of your company by investing in your company at a, let's say, $2 million valuation. seed round, purchased it at a$10 million valuation, and then Series B round, purchased that at a $50 million valuation that precede round that precede a $2 million ratio a $2 million valuation, when you raise a Series A at 50 million just got to 25x their money on paper. Got it? Okay. Yeah. So you keep progressing, you're serving customers, you have more buying into your product, you're making more money, you know, all that type of stuff. What are the quote, unquote, exit opportunities for a startup? Because ultimately, investors are not investing, there's not charity, right? out of the goodness of their heart, they're investing to get a return on their investment. So how do people get a return on their investment? Well, there's two main paths you either sell, right, you can either sell to what they call private equity, which is banks to get liquidity, or you can sell to a bigger company. So you can sell to like a Google or a meta or a Salesforce or stripe or something like that. So that's one way where you can pay out all of your employees pay out all of your investors, when there is what they call a liquidity event. The other way to extract money from the company is to do a public fundraise. So that's the NASDAQ. That's the New York Stock Exchange, Let's ring the bell moment, okay, that's the whole, we're going to issue shares to the public and the public is going to buy shares in the company, which creates a liquid stock. Now employees or investors that are invested, or employees of a company that have stock or stock options can now sell their shares. Like it's regular money. Got it? Okay. Right. And so those are the ways so, you know, all that to say, especially like in the church space is kind of funny. You might want to understand the church software that you're using, what their incentives are sure. Are there incentives? Are they venture backed? And are there incentives to go public? Are there incentives to sell out to a bank? Are there incentives to sell out to, you know, a larger company and what is going to happen to the level of service if we're when that happens? So it's kind of a nuanced thing, but it's good to consider. And this is kind of the inside baseball of how it all works. Yeah. So perfect. Because I can just imagine someone saying, Why do I care what their incentives are, because if their product works for us, that's all that's all we care about. But you're not taking into account that depending on what the incentive is for them, that changes how you ultimately are going to be interacting with the platform and how said platform is interacting with its customers as well. Yeah, show me the incentive, I'll show you the outcome. And so if you look at maybe a platform that you're using that just, let's say, sells to a hedge fund or a private equity firm, what's the goal of that private equity? Well, the goal of private private equity is to buy companies at a certain price, optimize the company and then sell it in three to five years at a profit to another bank. Who then will try to do it again. Yeah, these private equity firms. These are professional managers, these are MBAs from Harvard, Stanford, these are executives from consulting firms like McKinsey and Bain. They are spreadsheet people. What do spreadsheet people do? Spreadsheet, people are going to look at the costs to run a business. Yeah. And they're going to guess which cost they can cut. So maybe they say, You know what, this Customer Success and Support Teams very expensive. They're not selling new business. Yeah. They're not the engineers building the product. We don't need them. So what private equity might do is cut the whole customer success team. And that's why, you know, everybody's had this before, where you've used a product that you used to like, and then all of a sudden you don't like it anymore. Yeah. Right. Like, yeah, the service deteriorate. Or it's not what it used to be, you know, those brands that you've interacted with, maybe it's like a hotel brand, or maybe it's a luxury brand, or whatever it might be Yeah, you start realizing, Oh, this is not the same quality that I used to love. It's because a spreadsheet person got involved. And they started cutting costs. Yeah. And that's so frustrating because you fall in love with a brand because you feel tied to it in some way. Yeah, like the brand's you truly love you have an identity with and aligned with. And so when you start feeling like a number, something has clearly gone awry, and that's really important to understand that the software you're using has A deeper insight behind it insights on the right word, but it has a deeper, what's the word we're looking for? Well, there's a game being played in the backend, right? There's literally people in the background that have specific milestones, targets, incentives that they need to hit because they have constituents, they have stakeholders, they have shareholders, and that's not wrong. But if you're choosing to partner, if you're choosing to do especially a long term partnership with something as important as who is facilitating you're giving your resources, your money, yeah, your finances, right, maybe you should understand the motivations behind said company. Because there are certain things I would look for. Who are the founders of the company? are the founders still there? Yeah. What is the mission of the company? What is the ideal outcome for the company? Are they trying to position themselves to sell? Have they already sold? Are they in the process of cost cutting? Is that maybe affecting, you know, the support and the success team and the customer service and the brand? Do they have other incentives to go into different categories? That's not your category that won't serve you anymore? And so it's actually kind of good to understand inside baseball of business. Yeah. Because you can have more context about so you know, it's with anything, right? It's, it's the same way that conservatives cancel target and do these things. Because they start, they start finding out the inside baseball, they start finding out the motive, they start finding out the incentive. Yeah. And it's it's not even me making a stance, but it's me pointing out that as people find out that motive and incentive and it doesn't align with theirs, right. They don't need to shop there anymore. Sure. So it's the same thing that if you're a church operator, a pastor and executive pastor, anything like that, yeah. And you're shopping, quote, unquote, you can do the same level of diligence. Yeah. And your your congregation is doing the same to how many people do you have made? Yeah, good point. Wow. That's a really good point. So you have that same power? As, as everyone else in your church does, too. Yeah. Well, I think this is really helpful because it gives more of an insight as to what's actually going on behind the scenes. Yeah. Because it's one thing to just be like, Yeah, we use the software, it's another thing to feel like the software is using you for a bottom line. And again, right. And so when there's movement, and a shifting that happens in a company, not crazy growth, but things like founders changing, etc. Pay attention to that. Some of the best companies that I love that I'm personally invested into in the publicly traded stock market are still founder led, right? One of you know, the companies I really love is Airbnb. Still founder let Brian Chesky. Yeah, was the founder of the company, still the CEO of the company, still running the company. Some of the rises of brands, over the course of time has been because of the founder, you think of Apple, you immediately think of Steve Jobs, Tim Cook has done a fantastic job. But Steve Jobs is really the heart and soul of that company, even though he's passed away. And so you got to get to understand who's behind this was their motivations. Yeah, what was their mission? You know, even people like Walt Disney, right? Still the heart and soul of that company because of how much of a visionary he was and how much of his soul and heartbeat he instilled in the company, even though he's not around anymore. And so you just got to understand those origin stories. You got to understand the motives, you got to understand the different incentive pieces that are in play now. And that could potentially give you a clue as to where it's headed. Yeah, no, I love this. I think this is just a fun episode to give people something new to think about. Yeah, because we want to empower the listeners. Yes. All right. That's it. See you next time. Thanks so much for listening to the give it up podcast if you want to receive even more insights on church innovation, culture, and giving. Now you can sign up for free to be an overflow insider, where you'll receive exclusive content discounts, direct access to Vance Roush to get your questions answered. And also invite only access to our monthly fundraising leadership forums, head to overflow.co backslash insider, or just click the link in our bio to sign up for free today. In order to get this podcast in the ears of even more church leaders. Could you please subscribe and leave a review for the show? This tells the podcast players what people are enjoying and want to hear more of and we are adamant about providing maximum value to even more church leaders. Thanks so much. We'll see you next time.