“Hire smart people and get out of the way.” This is the leadership philosophy of today’s guest, Tyler Fair. Tyler is the co-founder and CEO of SourceScrub, the leading data service for dealmakers who want to find, research, and connect with founder-owned businesses. Though the company is just seven years old, it has grown into an 8-figure business that works with top private equity and investment banking firms. In this episode, Tyler joins us to share his entrepreneurial journey and explain how instead of getting venture capital backing, SourceScrub bootstrapped its way to success. Tuning in, you’ll hear how Tyler first identified the need for a product like SourceScrub and realized that he could create a tech-enabled solution to solve this pain point. You’ll also discover how he developed his leadership philosophy and how Tyler has grown his company to include hundreds of employees from around the globe. Finally, hear how Tyler has learned through this process, how he uses his time to the highest level, and what advice he would give his former self.
Key Points From This Episode:
- An introduction to Tyler Fair and how he first saw the need for a product like SourceScrub.
- The struggles of trying to hire interns to scrub through Google.
- How Tyler realized that he could figure out a tech-enabled solution to solve this pain point.
- Insight into the current size of SourceScrub and the number and location of its employees.
- What Tyler has learned through the process of growing this company.
- How SourceScrub is supporting employees in the Philippines and Ukraine.
- How Tyler learned the value of hiring smart people and getting out of the way.
- What Tyler has learned in this process and why he is trying to get as many things off his plate as possible
- How Tyler is prioritizing and using his time to the highest level and for the best use.
- The advice that Tyler would give his former self.
[0:00:04.5] AD: Welcome to Branch Out, a connection builder’s podcast. Helping middle-market professionals connect, grow, and excel in their careers. Through a series of conversations with leading professionals, we share stories and insights to take your career to the next level. A successful career begins with meaningful connections.
[0:00:20.9] AD: Hey everyone, welcome to the Branch Out Podcast. I’m your host, Alex Drost. Today, we welcome Tyler Fair, co-founder and CEO of SourceScrub, the leading data service for dealmakers who want to find, research and connect with founder-owned businesses. Tyler shares his entrepreneurial journey and how he has learned to lead by empowering smart people and getting out of their way. I hope you all enjoy.
Connect and grow your network. We are on LinkedIn, search for Connection Builders.
[0:00:53.9] AD: Tyler, welcome to the Branch Out Podcast, excited to have you here today.
[0:00:56.3] TF: Thanks, Alex. I know we’ve been talking about it for a while, so it’s nice to finally make this happen and we could just see all the traction that you received since starting Branch Out, a little bit into COVID.
[0:01:05.0] AD: Awesome, well thank you, it’s been a heck of a ride and you know, maybe a good place for us to start this conversation to have. I’d like to have you just share a little bit about yourself, your background, and what you do and we’ll take the dialog from there.
[0:01:15.4] TF: Yeah, I think I know the answers there. I partnered up with a buddy of mine from middle school back in 2014 to basically start building a business plan and the MVP of our product for SourceScrub but it wasn’t until after about seven years in the industry and building direct origination efforts, across a couple of different firms that I realized, direct origination certainly worked but the private company information that we needed, there’s no great way to get it. No efficient way to get it.
That ended up being a bottleneck to really scaling our direct origination effort. At the time, that was while I was at private equity firm in San Francisco called Serent and so went through about a six month transition at Serent where I let them know, “Hey, I’ve got this product and want to go build. By the way, I think it will be perfect for your firm and would love for you guys to be the initial customer” and they agreed.
It wasn’t right away, it was a little bit like “Hey, we’d love to keep you but understand if you got to go do this and if so, we’d love to support you.” and so they came on as customer number one and we didn’t raise any money to start the business, bootstrapped the company basically until our first deal with Main Sail in 2019, our first private equity firm that we recapped with.
We just added kind of a customer a month in that first year which was awesome. Every time we got a win, it just gave you a little bit more energy, a little bit more runway. It gets more dollars in the door, you figure out where to invest it, where’s the most important things to put money into.
That for us, back in the time was really data ops and building out a research team in the Philippines, it was a very cost-effective way to get high quality data and then layer our platform on top of that in both capacities, both for the client front end and the research team in the back end.
Yeah, I guess, geez, seven years later we’re about 20-million-dollar business and have beachheads and private equity investment banking. I’ve been working with the best private equity firms and investment banking firms in the world for the last six or seven years, developing a product that is basically tailored to their workflows and their pain points.
[0:03:30.8] AD: What I really love about your story and you alluded to this, so you were working in an industry, in private equity. You were doing research on kind of direct outreach, direct origination for finding opportunities and in the challenge you had was ultimately finding the data, right?
It’s getting enough of the data points and knowing who the companies are you’re trying to outreach and just frankly, having that knowledge and awareness and that was something that I assume was a very manual process, a lot of Google digging, a lot of finding tradeshows or something and digging that up and something that really creates a meaningful bottleneck and you said, “Hey, there’s got to be a better way to do this. There’s got to be a more effective and efficient way and if me and my private equity firm are having this problem, it’s probably the same problem that all private equity firms are struggling with in one way or another.” Is that a fair way of thinking about that kind of initial kickoff behind everything here?
[0:04:26.1] TF: Yeah, that’s right, just basically building a product that I myself wanted to use and realizing that the legacy databases that were in place weren’t going after this particular pain point for me and for us, we were hiring interns to basically do this research.
I mean, I started out doing that and quickly ran out of time and I was like, “How do I do this?” and so, went to the partners and this is like back in 2011 but when the partners at Serent and I was like, “Hey, I need help if we want to get this thing off the ground” we hired a bunch of interns, we kept that going for about three and a half years until I was like, “Enough is enough.”
This is just like – I mean, the interns hated the job because it was literally just scrubbing through Google the whole time, they were doing it basically, they put a logo on their resume and it was a total pain to recruit interns three times a year because you get in the fall and then you get them in the spring and then summer and then undoubtedly they end their internship early.
They’re like, “Hey, we’ve had three months and we’re out” or they just didn’t show up to work because they were out too late the night before or whatever, which happens when you’re a college kid. That didn’t work out well, didn’t get the origination effort to scale the way we wanted it to, didn’t allow me to hire seamlessly into the function and so, yeah, I approach the partners at Serent and they loved the idea and basically wanted to support us however they could.
[0:05:45.2] AD: Well, I like that I’m laughing a little, obviously our listeners can’t see me but I’m laughing as Tyler is saying this because the way Tyler and I very first met and this was, gosh, would have been maybe 2016-ish, I believe that you are probably still doing sales calls at that point in your life and you reached out to me.
I was at cascade partners, middle market investment bank and it was the conversation, the problem you’re describing was the exact problem. It was, “We need this data, we want to find this” and the way we did it was find exactly as you said, some angry white head college kind that said, “Hey, I’m willing to do this because it will look good in my resume” and they show up and realize that it’s pretty mindless, mind numbing googling type work and it is what it is. It was part of the process is what you had to do but you are so right on the pain point that existed there.
That’s what I really love about your story is as you saw a pain point and then said, “Okay, there’s got to be a better solution.” Now, my question is, how did you start about figuring out what that solution might be? Did you have a tech background, what gave you that kind of idea say, “Well, I can figure out a tech enabled solution that will solve this pain point.”
[0:06:54.3] TF: Well, I mean, our platform is so slick these days with a two-way Salesforce integration where you can leverage Salesforce data in your SourceScrub or SourceScrub data in your Salesforce and can basally build out list and list of companies and whatever theme that you’re looking for but the simplest form of value back then was just having a conference list scrubbed, right? Because if I looked at where we were allocating a ton of intern time, it was around conferences.
I covered – At one point, I covered four verticals for Serent. At the end, it was healthcare because we had successfully brought on a couple of other folks to the team but I had a hundred healthcare conferences that we were covering every year and with all those conferences came exhibitor list and sponsor list and speaker list.
Basically, I did the exercise myself and took it to a couple other buddies in the industries who thought was super interesting to have it just on demand and could basically predict the ones that were going to need it, right? Healthcare investors going to [Inaudible 07:54] obviously they’re going to need that. That was the simplest form of value and folks start paying for that.
And obviously, we’ve expanded the platform well beyond conference lists. You could build whatever list the companies that you want, it could be payment and healthcare, any intersection of that. It could be home healthcare and the intersection of technology or it could be taking old world economy business, making widgets, you could build this comprehensive list as you want because we cover all the – basically investible grade companies out there, that folks can filter through and find for their investment themes.
[0:08:26.8] AD: I’m laughing again, I can very clearly remember our first conversation was David Thomas, shout out to David Thomas At Cascade Partners if you’re listening, wanted to scrub a conference list, it was ophthalmology at the time. We were doing a bunch in ophthalmology practices and it was, “Well, how can we get good data?”
It was, it was exactly what it was and it was, “How do we get this list for these attendees?” and we were trying to Google, trying to figure out and remember, I remember you sending us a sample of the data and we’re like, here, we can do this and I just like, “Wow, this is a great solution, this really helps a lot and streamlines things.”
[0:09:00.6] TF: Yeah.
[0:09:01.8] ANNOUNCER: This is Branch Out, a connection builder’s podcast.
[0:09:08.8] AD: My question then, you clearly created a product that solved the need, that solved the challenge that was needed in the marketplace and now, fast-forward seven years into this, you bootstrapped the business and have built it into a sizeable organization. How many team members do you have today?
[0:09:23.6] TF: Domestically, we’re at about 65 headcount and most of those are based in San Francisco and New York but obviously during COVID, some people spread out. Then, internationally, about 750 with the bulk of that being data ops and all that we do around quality assurance for the data, making sure that attacker and having that human verified touch point with it.
Then sadly, current events obviously, we have a – I shouldn’t say sadly because it’s incredibly inspiring but we have a team in Ukraine and they’re on the western side of the country in Lviv, which is known to be a bit of safe haven at the moment but obviously they’re going through tough time, we’re doing whatever we can to support them but the resiliency of the team is just incredible, as Ukraine at large has been.
[0:10:10.2] AD: Absolutely and it’s timely. It is just heartbreaking in many ways. It’s also as you said, it’s inspiring. It’s cool that you have an opportunity to work with people around the country, you have a team of people around the globe doing this, right? What are some of the lessons that you’ve learned through that? I mean, that’s a lot of change, that’s a lot of growth from starting this, two of you starting this to where you are today?
[0:10:33.6] TF: Just invest in your people, I mean, just because folks in other part of the world were afforded the same opportunity as some of us folks that maybe grew up in the Bay Area or close to opportunity and yeah, in the United States, the opportunity is a lot less in some of these countries. A lot less large and so, providing folks with an opportunity and having trust and investing into them has been incredibly rewarding for the business and then also just on a personal level.
You know we have folks in the Philippines and Ukraine. The Philippines got hit with a typhoon in December and you know, you should see the response from our domestic team in terms of doing a fund raiser for those folks that were affected. I mean, we have a pretty awesome location in the Philippines that’s mostly protected from natural disaster but those folks are from other parts of the Philippines.
They make commute five hours a week to get into the office and those communities were – some of them were devastated and so just the response from our domestic team to support our colleagues in another part of the world that are going through a tough time and obviously doing the same right now in Lviv.
[0:11:39.3] AD: Yeah and for sure in the sending support, it sounds like and this is based on our conversation now but obviously we had chat a little bit before this recording, you had made a point around the importance of your people and investing in your people and finding the right people and recognizing that people, it’s less so about finding the perfect person and more so about finding someone that is hungry and wants to do a good job and then investing in them. Can you share a little bit more of maybe your leadership philosophy around that?
[0:12:05.6] TF: Yes, so we’re sort of the anti-VC backed company here at SourceScrub. I mean, we’re a bootstrap company technology business in San Francisco. That just doesn’t happen all that often and so as soon as folks come in the door interviewing and they’re like, “Hey, what are the benefits?” I just tune out because it’s like you are not coming to a company for the benefits. You are coming for the experience and for the possibility to at some point, sort of have a step function increase in your economics, right? You got to start somewhere and then you got to have enough experience to realize an opportunity when it hits you in the face to take it.
And so what we do around here is we’re like, “Hey, we’re building a business that is not a typical Silicon Valley backed startup that is just looking to get to its next stop on the VC train, their next round, right? We’re building a business that sustains itself and if you’d like to learn how to do that, come on board and work your ass of and you will and you’d be rewarded and you’ll have a great story on the other side of this. That is something that you can own for the rest of your career.
You know, nobody cares if you’re at a VC’s back startup for two years that went bust, right? Which happens north of 90% of the time. Folks like to see, “Hey, I was there when it got acquired by Francisco Partners and I live through the three or five year hold period where we did X, Y and Z to the business to create value and then achieved a successful exit.”
You know, those stories that our team, like that story that our team is building right now is going to be incredibly valuable to them longer term in their careers and so as long as we can continue to have a great reputation in the marketplace, continue to deliver to customers what we say we’re going to do, you know we’ll get to that, that awesome outcome whatever that might be. I am hoping at some point in the next few years we’re going to be able to go public and have a company that withstands the test of time, but who knows?
Whatever the outcome is, they’ll be able to own that, own a little piece of it going forward and hopefully have a lot of knowledge and experience from it to take it with them and help them build other successful outcomes.
[0:14:19.2] AD: I want to highlight something you said that I think is really impactful. People show up and they want to know the benefits and what you had pointed out that this isn’t about the benefits, this is about the experience and I think for especially speaking to professionals on the first half of their career tenure rate, that is the whole point. You go out and you find a job that is going to give you experience more than anything.
When you approach it with, “What’s in it for me? What are the benefits? What am I going to take from it?” and yes, you have to make sure you are compensated in a way that is economically fair and that you can sustain the life that you desired to have but at the end of the day, your point and I think a really important point for people to hear here is recognizing that if you approach that and I assume this is true in your company, if someone shows up and is like, “Listen Tyler, I am excited about this. I think this is a great opportunity.”
“I don’t necessarily know everything that I need to know here but what I am showing up to do is I want to be a part of this. I want to be a part of solving this challenge. I want to learn and I want to experience” that’s the type of people that you want, so if you are individual doing that, that’s how you make yourself desirable. That’s how you make yourself high-quality talent is by wanting to show up and gain that experience.
Then your point of at some point throughout your career as you continue to accumulate that experience and develop as a professional, you do get those step function opportunities where they will come and they’ll pop up, they will show up in front of you because you have put in the time and you’ve developed that and you’ve gained that experience where now you are more valuable. Now you are where all of a sudden that kind of benefit starts to just become a natural part of it.
Tyler, I want to hit on something you said when we were prepping for this. You had said, hire smart people, let them figure out and then they own a piece of the story. Let’s talk about that a little bit, what does that kind of leadership philosophy mean to you and how do you apply it?
[0:16:08.4] TF: It is not my own but it is one I learned very early on and adopted but no, just working with great people at Serent, right? They come from incredible backgrounds, be it consulting, investment banking, operational, they have seen a lot of plays and one of the things that just stuck with me as we were thinking about scaling out our research effort was look, you hire smart people and you get out of their way and you let them do their job.
So we look for those smart people that are hungry, that are again, not coming for the benefits but coming for the experience of learning how you go about building a business and creating value for folks and you try to find those people and then just get out of their way, right? Set the goal line and be their cheerleader and help them when they feel like they are not going to be able to hit it but get out of their way and let them go. It’s kind of what I have always been – it is actually an easy way to manage too.
[0:17:06.0] AD: Well, I agree with that and maybe this will be kind of our final topic we can wind down on here. It is easier said than done, right? I think you talk to people and this idea that empower your team, get out of the way, let people own part of it, it is going to create more buy in, I think those are relatively common leadership discussions and I think anyone that’s in a position of power will typically agree with that maybe not always but I think it is a general consensus but at the same time, that’s not easy all the time, right?
That is not always an easy thing to do. What have you learned in that process and even right before we jumped in recording here, you have mentioned you are trying to fire yourself from as many jobs as possible, right? What have you learned in that process?
[0:17:46.2] TF: There’s just better people out there to do things than myself. Just find something that works and then go and scale it and the answer is not going to be, “Hey, go commit more of your own time” because you don’t have any of that and so find someone that’s really good at building process, really smart, kind of figure it out mentality and let them do that. Step in, maybe don’t be part of the sausage making as much. Maybe kind of see what folks can come up with on their own and then bind and adjust and iterate with the team but yeah, I mean geez, if I did ever fire myself from jobs around here, we would have never gone anywhere.
[0:18:29.6] ANNOUNCER: This is Branch Out, bringing you candid conversations with leading middle-market professionals.
[0:18:37.2] AD: It’s challenging at times to empower and trust other people and think that they’re going to do as good of a job as you. I also think there’s this fallacy at times that we fall into where we think we’re the only ones that can do it a certain way and then as we step back, we kind of realize there is more ways to do it and sometimes what we thought was perfect maybe was more perfect than it needed to be and someone else’s approach may not be as absolutely perfect as we may want it but it’s totally fine.
It doesn’t degrade customer quality, it gets the job done and then that gives that person opportunity to learn and probably long-term, figure out how to do it better than us in the long run, right? If we never gave them that space to try something, to learn something, they’re never going to get there but your point that I think is really important there is you said time. If you did it all, you run out of time, right?
What you are trying to do is figure out how to get more things off your plate so you have less time doing and having to deal with other stuff, so you can continue to elevate where your focus is and spend your time, the one limited resource that everyone of us gets 24 hours in a day, you are figuring out how to prioritize and use your time for the highest and best use, right?
[0:19:45.1] TF: I love that phrase, highest and best use, absolutely.
[0:19:48.2] AD: I guess my final parting question to you then is looking back and you’ve been doing this a little over seven years now, if you could sit down and jump in a time machine, sit down and talk to the Tyler before he left and committed to doing this and say something, what’s the advice? What do you want to go back and give yourself?
[0:20:08.4] TF: It goes quick. It goes really fast and enjoy the journey. Don’t worry about the destination as much as you’re enjoying the journey.
[0:20:16.9] AD: Ah, good advice there. Good advice. The destination is always hard to figure it out and if I had to guess, when you started all of this, you didn’t think you’d be where you are today. This wasn’t all part of the plan, right?
[0:20:26.3] TF: No, absolutely not. You know, I thought we could maybe build a nice little five million dollar revenue business and you know, then sell it or something like that. Here we are approaching 20 million and a very young hungry motivated team won’t let anybody or anything get in their way.
[0:20:43.0] AD: I love it. Well, it’s an awesome story Tyler. I really appreciate you coming on here and sharing some of your story and your journey with our listeners here and for our listeners, how can they get in touch with you? What’s the best place to get in touch with you and learn more about SourceScrub?
[0:20:55.6] TF: Yeah, email, [email protected] or hit me up on LinkedIn, I would love to hear from some folks whether it’s a good feedback or actually my favorite is what’s not working. If there are any customers out there that like to reach out, I am always open to a conversation particularly around what’s not working so that we can go and fix it.
[0:21:16.8] AD: Well, that’s a key to feedback. Good feedback is great to hear I guess but at the end of the day.
[0:21:21.9] TF: We’ve had great feed, like we’ve had such supportive customers that have, you know, we got a customer advisory panel of made called 75 Logos, some of the best private equity firms and investment banks that have been using our source for five years and are like, “Hey, now you need to go and do this” and we’re going to go and do that and continue to create value at the behest of some of these world-class firms.
[0:21:44.8] AD: Well, like you said, getting that real feedback and learning that’s how you make success out of it. Well, thank you again. I appreciate you coming on here and looking forward to talking with you again soon.
[0:21:54.9] TF: Yes, let’s do it again soon. Thanks Alex.
[END OF INTERVIEW]
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