Intro: [00:00:07] Coming to you live from Atlanta, Georgia. It’s time for another episode of Tech Talk with your host, Joey Kline.

Joey Kline: [00:00:18] First Tech Talk of 2024. Very momentous. Thank you everyone for joining. As always, we have two amazing executives from amazing Atlanta based companies. First, we are going to chat with Sandeep Ahuja, the CEO and co-founder of cove.tool. Hello, Sandeep.

Sandeep Ahuja: [00:00:36] Hey, so good to be here.

Joey Kline: [00:00:37] And we are going to finish off with Joshua Silver, the CEO and founder of Rainforest.

Joshua Silver: [00:00:43] Great to be here.

Joey Kline: [00:00:44] Okay, let’s jump in. Hi Sandeep. How are you doing.

Sandeep Ahuja: [00:00:47] I’m doing great. How are you?

Joey Kline: [00:00:49] Good. So let’s just get it out of the way. What is Cove tool?

Sandeep Ahuja: [00:00:55] Cove tool is an AI powered sustainability consulting company. We are the software. We are the consultant. And we are revolutionizing the entire AEC, which is the architecture, engineering, construction space. And we’re making it accessible.

Joey Kline: [00:01:13] Okay, so and we most people who listen to this know that we don’t really get too much into my day gig, which is real estate, but we’re going to chat about it a little bit because of course your business overlaps quite a lot with it. Oh yeah. So I think anyone who’s paying attention has seen that, whether it is ESG initiatives by fortune 1000 companies, whether it’s sustainability departments in large corporate real estate groups like the one that I work for, or whether it is A and E firms adding professionals in this field. There is a lot of buzz and talk about this. I think what what I’m curious about is I find that when typically when there’s a lot of buzz and something is relatively new, let’s say within the past decade or so, you know, really started to kind of get attention. There tends to be a lot of window dressing and fluff on with some of those organizations, and then there tends to be folks that are actually know what they’re doing, actually dedicated to it. And, you know, is making a difference beyond simply just putting something in a financial report. So I am curious about your journey to this issue and how you view the landscape that I just described right now.

Sandeep Ahuja: [00:02:27] I really appreciate some of the things that you said, and there most definitely is an overlap. I don’t know if you actually knew, but JLL is a proud user of Cove tool. I did okay, I guess you knew that then. Um, because I didn’t know what office it was, but I heard that from our team the other day and I was like, oh, that’s fantastic.

Joey Kline: [00:02:46] It’s I don’t know what office it is either. I just know that someone, somewhere uses it.

Sandeep Ahuja: [00:02:50] That’s exactly what I’ve heard. So for for me, it most definitely started with just the understanding that buildings are 40% of all carbon emissions. I was a practicing licensed architect, and I, I have buildings that I designed with no knowledge of how impactful buildings were. And when I learned that buildings were so impactful, I just knew that I had to change my life, my career, and do something about that. So that’s really what got me to first becoming an expert in building science and building performance, and then being able to make it accessible. Because even after I became the expert in building performance and was able to understand on a very granular level, the impact of each decision, like what type of window, what type of roof, how it’s oriented not just on these big commercial buildings, but I mean every like your house. Mhm. Um, that’s really when I learned that not everyone could do that. And that really got me going in the path of making sure that everyone can do that.

Joey Kline: [00:03:56] And so is the product. Let’s take I’m just going to name a design company or construction company. Let’s take Skanska for example. Okay. I assume that that type of company could be a part of your user base. How would that company use your product versus how a jail would use your product?

Sandeep Ahuja: [00:04:18] Most definitely. So to kind of put that into a comparison, both of those companies have in, in my understanding, an actual design team that works with them, whether it’s architects, whether it’s engineers whose job it is to figure out how buildings perform, what is the carbon use intensity, how much carbon is the building utilizing, how to if it’s a renovation, how to make those changes? What is the most cost effective way to make those changes that is best for the environment? Or if it’s a new construction, what the design should actually be to make sure that yes, it’s cost efficient. Yes, it’s esthetically appealing, yes, it’s the right size, but also how to make it the lowest carbon. That’s a lot of different variables for a human to do. Like when I was a consultant, that was still very hard for me to do. And that’s why I charge people 30, 40, $50,000 a project when I ran my consulting practice. But that’s the kind of insight that need to be democratized to make sure that we can do it for every single project. And that’s how both of those companies would utilize it. Okay.

Joey Kline: [00:05:25] So the goal here is obviously this typically this sort of a service and focus, um, is left for companies that have the wherewithal to care about it and pay for it. And the software provides a way for organizations that might not have thought that they could access these services, but care about it to do so.

Sandeep Ahuja: [00:05:49] Both and there’s very many users that we have, like I’ll describe to you, even ends of the spectrum. There’s a five person architecture firm. So it’s very tiny. Most definitely does not have the resources to even teach someone a new software, because they’re so busy with the work that they’re doing. They do five house projects in a given year. That’s the smaller end of the spectrum, right? They don’t have the bandwidth to teach an architect a new software. So what they do is they access our low cost, tech enabled sustainability consulting model and say, hey, we just want energy and daylight models for all of these five houses that we do in a given year, and we do it in a fraction of the cost that a consultant would cost. And we do it really, really fast. Now, on the bigger end of the spectrum, where we are working with companies like JLL or other key architecture firms, they will have the resources to teach it internally. So we’ll be like, great, we’ll teach the software to you so you can go fish for yourself. But they’re also like, well, we have a few project managers that are just not down to learning new technology. And we’re like, great. We’re the easy button for that. Push that easy button and we’ll do it for you. So it’s kind of both ends of the spectrum, because we really have to catch all.

Joey Kline: [00:07:06] Totally customizable based on where that particular user is in their journey and their size.

Sandeep Ahuja: [00:07:13] That’s exactly right.

Joey Kline: [00:07:14] Yeah. So I want to go back a little bit. I find that, um, like, not everyone fits in these two buckets, but I find that it’s somewhat of a helpful framing. I feel like I see entrepreneurs by choice and entrepreneurs by force, by choice. The ones that, uh, love the hunt, love the thrill, love the stress, and just cannot work for someone else by force. A professional that’s in the way you described it finds out something, and it kind of changes their trajectory. Am I on to something?

Sandeep Ahuja: [00:07:50] You maybe you are. I’ll tell you how I started and you can tell me which category you think I’m in. Okay. Um, for me, I was working at a large architecture firm. Um, this is now about 12 years ago. This was the first company I started that was prior to Cove Tool, and I was driving over to the dentist, and it was a Thursday. And I just knew on that one Thursday morning that I wanted to start my own company. And then my thought was that if I still felt that way on Monday, I was going to put in my two weeks and I still felt that way on Monday. So I put in my two weeks and well, started my own company.

Joey Kline: [00:08:31] Okay, so then that, uh, if, if the first instance was, you know, you learning this about buildings and doing cove, I might say by force, but that sounds to me more by choice.

Sandeep Ahuja: [00:08:43] I think so, because by, by force, I was most definitely in the field. Like, that’s why I stopped being an architect and started being a sustainability consultant. And I think by choice was to become an entrepreneur.

Joey Kline: [00:08:57] Are you? And this is a loaded question, right? But I just feel like the the picture that gets painted, um, of entrepreneurship is, you know, we sort of. We, um, we deify, um, you know, the executive and our culture and, and that’s I think that’s better than maybe in a past, you know, life where we might have heard someone that said we’re starting a new company, like. Oh, so that means you’re unemployed, basically, right? Like it’s this is better than the alternative. But I also feel like, um, the sausage behind the scenes, the stress, the family issues, just all the stuff that goes on with shepherding something, having everything on your back is not really seen. So my question was going to be, are you generally having fun? And how do you think that this stage compares with when you first started? What are your your emotional state, if you will?

Sandeep Ahuja: [00:09:53] That’s an awesome question, by the way. Um, I will I’ll put it kind of on a spectrum. Yeah. Uh, because I really do believe that my emotional state and my fun is most definitely on a spectrum. So short answer is yes. I love every part of it. I’m so glad that I did it. And I’m glad every day. Not every minute, every day, but most definitely every day. Um, but for me, it was it’s most definitely the spectrum of, oh my gosh, we raised $30 million and oh my gosh, we closed our biggest deal ever. Oh my gosh. We signed a. Com and Arab companies that I admire all the way to. Oh, crap, I have to. I have to do this. Uh, I have to do this, uh, client proposal, and I haven’t done it before, and I have to figure it out on the fly or. Oh, my gosh, I have, uh, you know, lost a key member of my team that I admired. I’m happy for them, but I’m so sad to see them go. And it’s it’s that roller coaster of a ride where you’re consistently doing things, at least for me, that I hadn’t done before. I’m consistently doing things that I didn’t think I would do, and I’m also consistently celebrating things that I never thought I’d be able to celebrate. When I started this journey, I didn’t think how far I would go. I knew I had a belief in my heart that I was going to touch every building that ever gets built or renovated, and I haven’t fulfilled that dream yet, but I didn’t know how far I was going to go, and I’m still very much going. In my view. We’re early. We’ve just started.

Joey Kline: [00:11:32] I think that, um, I think as humans, we, we, we often underestimate what we can actually do. And I think that from a physical, emotional and mental standpoint as well. Um, as you’re talking about this, really, I mean, I think there’s so many parallels to parenthood. Of course, we were talking about parenthood, uh, prior to, uh, you know, the show starting it is the highs of parenthood are the highest of highs, and the lows are the lowest of lows. It is it is very tough to exist in the emotional middle.

Sandeep Ahuja: [00:12:05] I think that’s exactly right. Um, I don’t know if you have, um, read this book, but I think it makes so much sense. It’s called, um. Oh, gosh. I was gonna refer, and now it’s escaping my mind. I’m sure it’ll come back. Yeah. Um, just the messy middle. There we go. Yeah. Okay. I feel like it’s all the freaking messy middle. That’s exactly what it feels like. And I do think that being a mom, because I’ve now been a mom for a year, so I’m still new to that absolutely helps me also be more empathetic as a leader. It helps me just be. It helps me be more calm and more empathetic and helps me have more perspective.

Joey Kline: [00:12:42] I could see that. I think that when. Uh, when influenced correctly, you would think that most people that have the experience of raising a child no matter what, you know, after a year or 18 years, you know, patience and empathy hopefully, are two things that kind of come through in the process.

Sandeep Ahuja: [00:13:00] Most definitely. I mean, that’s what I’m feeling already, like there is no way on Earth that I thought I could be a CEO of a company of our size, like we have 70 people. We’ve been growing, we’ve been scaling and being a mom and a month in still be solving the problems that I was solving and celebrating the wins that we were celebrating and balance that. And I think that balance is such a crazy word, because going back to what you said, I couldn’t agree more. I think we’re capable of more than what we give ourselves credit for.

Joey Kline: [00:13:38] Okay. So let’s talk about that growth okay. So 70 people. And what year did you start the company.

Sandeep Ahuja: [00:13:44] We started about five years ago okay.

Joey Kline: [00:13:46] And so where what is your focus for 24 and 25. Is it a new product. Is it penetrating a certain market. How are you growing the business from here.

Sandeep Ahuja: [00:13:59] So I think that what we have really learned in the last year, um, which I have been reading all of the tech news, I know it’s been a tough year for most tech companies, but I think we’ve been one of the fortunate ones and have really been able to continue our acceleration within the market. We’re leaning very, very heavily into finding that ability to morph what we offer based on the customer segment. And I know AI is a buzzword, but we really have been integrating it within our systems to be able to customize what we offer. Based on what you need. So for example, a particular client may describe to us a project that, hey, I’m working on 100,000 square foot classroom building, hypothetically. And typically right now they would need an actual human sustainability consultant to listen to that project description and be like, I think based on what you’ve just described to me, you need a few energy studies all through your schematic design, development and construction drawing phase. And you need a few daylight analysis and carbon studies. All of that intuition is coming from an actual human consultant based on their years of experience. We’re training our AI systems to act as that, to basically be able to prescribe to you the type of analysis or the type of studies that are meaningful for you. And if then the prospect comes back and is like these, all studies are great. I likely do need them. However, I’m constrained on budget. It can then come back and be like, well, you must do these two. If you’re if you’re trying to get this output, okay, and customize the the offering and then go ahead and do it and then give you the output. Or if it’s like if the customer is like I think I can do it, just tell me what I should do. It can tell you how to do it too. So really meeting each particular user exactly where they are.

Joey Kline: [00:15:55] That is very cool. So is that something currently in development or is that functional right now.

Sandeep Ahuja: [00:16:01] So we have an MVP that’s working internally and we’re testing heavily with it. So it’s it’s coming out soon.

Joey Kline: [00:16:09] That’s very cool.

Sandeep Ahuja: [00:16:10] I’m very excited about it.

Joey Kline: [00:16:12] I’m curious about your your people and your hiring because when I. I would imagine that the folks that you’re looking for, there’s a lot of overlapping circles and a very, very small, um, uh, visible area of the Venn diagram. Right. You have to have people. Well, you tell me. Right. Because I imagine that some of the people that you need absolutely have to have as much expertise in this discipline as you do. But if that was everyone, it almost feels like it would be too limiting at a certain point. Right? I’m sure there are roles where they just have to be good practitioners. They do not have to have the specific domain background that you do from an educational standpoint. How do you balance that? How do you find people?

Sandeep Ahuja: [00:17:01] I think that the way that we have really thought about it is pockets of subject matter expertise, because I want my research team, which is really where the subject matter expertise of our company sits and where we develop a good bit of our IP, not only to be as good as me and the subject matter, but better than me if I’m hiring correctly. Um, and to excel, uh, the research forward in each of the different areas. For example, we launched our embodied carbon simulation module, uh, middle of last year. While I’m an expert in building performance, embodied carbon was something new for me in particular. But again, the research team that we built was wonderful at it. So from a research team standpoint, they have to know their stuff and they have to know it significantly better than I know it. Um, as it relates to some of the other segments, I mean, the software packages and the libraries that we use are most definitely on the cutting edge, but very much standard. So if you’re great at Python, then you’re great at Python. You don’t have to be great at Python. And um, building performance. And then same goes for customer success, sales and marketing. I feel like we’ve built a really solid onboarding and enablement plan so that when you come as a Non-industry member, um, into our team, we assimilate you to what is architecture? Who is our customer, how do they think? What are their problems? And I think we’ve built a really good program around that.

Joey Kline: [00:18:35] Okay, okay. That’s that that that is interesting. Um, I’d love to get a view, a holistic view from you, because I think that look, if you’re looking for negativity on the topic of sustainability, you can find it. And if you’re looking for positivity on the topic of sustainability, you can absolutely find it. And I truly believe we can hold two thoughts in our head at the same time. But I am very curious from someone who touches this on a day to day basis, whether it is a landlord building a building or a fortune 1000 company working on an internal initiative, or that is going to occupy a building, you have a front row seat into what these companies care about. Do you feel, you know, we have a we live in a world of dire predictions on this front. How do you feel about what our progress is like? Are you generally an optimistic person? Are we kind of getting there or are we realizing what we need to do?

Sandeep Ahuja: [00:19:36] Oh boy. Now, you said it was a loaded question on the last one, but I’ll say this one is really the the loaded question. I’m I’m actually writing a book about it for Wiley, and they’re publishing it in the middle of this year. Yeah. On um, on that, that is, that is the question of the book. How are we doing? Well, don’t.

Joey Kline: [00:19:55] Give away too much.

Sandeep Ahuja: [00:19:56] Yeah. Ask um, ask me tomorrow. I may change my mind, but in general I think I’m optimistic. And that’s most definitely what wakes me up every day to work as hard as I do. And I know that that is true of my team, too. I think the thing that gets me excited is that, you know, like three of our key customers are able to impact 5% of global carbon emissions. And that to me is really cool. And they’re utilizing tech, um, in a way to reduce the overall carbon emissions of the world. I do think that if we wait too long for regulations, there is not going to be a world to save. And I do think that with climate change, we’re getting to a point where it’s not an altruistic thing, it’s a financial investment thing. And if we don’t, people are going to lose their investments and their money because buildings will fail, because they’ll be in locations that have natural disasters, and that will continue to happen more and more. It is unfortunately a bad spiral. So I think sooner or later most everyone will wake up. But because it impacts the dollars and not because we’re doing it for the right reasons, that is my unfortunate belief in this world.

Joey Kline: [00:21:14] Look, that’s that’s right. I think that at the end of the day, this is going to be more about cynical motives than altruistic.

Sandeep Ahuja: [00:21:20] Motives, I think so.

Joey Kline: [00:21:21] Candidly, as long as it happens, I don’t really care what the motivation. Um, I tend to agree with you. I think that we I’m not saying that there is not cause for alarm and negativity, but I think it ignores a lot of the just incredible work that entrepreneurs like you are doing, in addition to the fact that, I mean, you have the SEC putting out ESG guidelines for companies to follow. I mean, this is and whether whether said company X is, you know, cynical about it or altruistic about it, the fact that this is a guideline put out, whether they want it or not, that’s that’s pretty groundbreaking.

Sandeep Ahuja: [00:21:59] Frankly, I couldn’t agree more. Like, I don’t care why someone does it so long as it’s done, and so long as I have a world that I can enjoy and future generations can continue to enjoy, that’s that’s plenty. Yeah.

Joey Kline: [00:22:13] All right. Well, I’m with you on that one. So if people want to learn more about your company and all the great things that you’re doing, how can they best get in touch?

Sandeep Ahuja: [00:22:21] Well, reach reach out to us via via our website. We have Cove Tools, so check it out. We’re very active on social. So if you’re on Instagram, LinkedIn, whatever it is you use, we’re Cove tool, Cove dot tool. You’ll find us reach out. We’d love to hear from folks whether it’s to just learn more, whether it’s to see how we might be a fit for you no matter what it is. If you’re looking for a job, no matter what it is, just reach out. We love hearing, even if it is just to say, hey, appreciate what you’re doing. Have nothing else to say. Just wanted to say that that’s perfectly fine too.

Joey Kline: [00:22:55] Actually, one one thing I realized that we didn’t talk about that I’d like to touch on, I think I think I got your a handle on leadership style, especially as we kind of discussed what, you know, raising a child does to kind of how you operate in the workplace. I am curious about how you build culture. Um, as a, as a founder, as someone that has seen an organization go from single digit employees to double digit employees, culture needs are very different at those different phases. So I’d love your take on that.

Sandeep Ahuja: [00:23:24] I’ll say that one thing I didn’t know was that culture was easy at ten, and culture was insane to keep and build at 50. I don’t know why it’s those milestones, but it was most definitely those size milestones, like 20 to 50 was kind of a squishy mush. Sometimes we were getting it right, other times we weren’t. But at 50, boy, we needed a structure to keep our culture alive. Um, and I think that the way that we’ve done that is by being very explicit and clear about who we are and who our what our core values are and what we believe in. And for us, we keep it simple, because if you can’t say it in five seconds, then no one’s going to remember it. We’re honest, we’re data driven, and we’re, um, we’re transparent and we just we just do that over and over and over again. And everyone that we hire, we check for that. You can’t be, um, a genius, but not a kind person, because that wouldn’t be a fit for us. Yep. Um, nor can you be dishonest and extremely data driven. That would also not be a good fit for us. So it’s it’s three things. It’s simple things. And we we lean on everyone on the team and I, I meet with everyone on their first week of hiring. We do this thing called Climate Camp where they come into my office and we just talk for 30 minutes and get to know each other, and I tell everyone on the team that I’m going to lean on them to keep the culture, because I alone can’t build it because we’re not a five person team anymore. Um, and I think people take that seriously because it’s it’s on all of us.

Joey Kline: [00:25:04] I think my armchair diagnosis of why it changes around those numbers is and I’d be curious to get Joshua’s point of view, which I want to touch on when we transition, is, um, it’s kind of not your company anymore at that, you know, like there’s only so much that you can control and it gets to as it gets to that point and you have more lieutenants, you kind of lose your grip on truly being able to influence everything.

Sandeep Ahuja: [00:25:33] I think that’s I think that’s true. On on some on some plane. I’ll tell you this, at least for me, when we first became 50 was about a year and a half ago. We had just raised our series B round. There was this influx of cash and we were just hiring, hiring, hiring like that was because we were going from 25 to 50 and basically a year. And that was a crazy transition. But now having been at that 50 to 70 size for a year and a half, I think that while initially I lost the grip because I felt like I had to, there’s ways to really be open, honest and create a really cool culture even within the LTE. Like, I think that we’ve created a great cohort where we can just be open about pretty much everything. You don’t have to draw that many lines because they’re all here, because they’re choosing to be here. They believe in me. That’s why they chose to come work for a startup. And I think just remembering that and being excited about it and paying them the respect that I think, um, they have earned, rightfully so, just creates a stronger bond and allows us to actually continue that culture farther and wider without me doing it myself.

Joey Kline: [00:26:47] I hear you, you know, they have to at this point, they’re working for you, not just for a paycheck. Right? They are evangelists. You should use them as such, right? Totally. Okay. Love that answer. Looking forward to bringing it up with Joshua Cove tool, everyone. Sundeep, thank you very much. Thank you.

Sandeep Ahuja: [00:27:07] So much.

Joey Kline: [00:27:08] Okay. How you doing?

Joshua Silver: [00:27:10] Good. How are.

Joey Kline: [00:27:10] You? Got a lot of, uh, a lot of fodder to discuss.

Joshua Silver: [00:27:14] Yeah, it’s a tough act to follow.

Joey Kline: [00:27:16] Okay. So. So let’s. Because I saw you nodding along in terms of kind of the, the culture question. As organizations grow, let’s, let’s, let’s capitalize. While we’re on that topic. I’d love to get your thoughts on that.

Joshua Silver: [00:27:29] Yeah. For sure. Well, I think, you know, I have a somewhat unique perspective. I’m a repeat founder. And so my first company that I co-founded was called Patient Co, which was in the healthcare payment space. And you know, I vividly remember growing from, you know, 0 to 10 and 10 to 50 and 50 to 100 and post 100. And I couldn’t agree more that, you know, that 50 mark is is kind of magical. You know, we actually gave out plaques to people that were kind of the first 25 and first 50 on the bus at Patient Co. So I do think there’s there’s kind of something magical about that here at rainforest. We are right at around 20 people today. And so we’ve we’ve kind of gotten to into well into double digits but still have a ways before we get to the 50 person mark. And, you know, I think, you know, the second time around, I’ve paid a lot of attention to making sure that the first group of people that we have on board really fits that cultural mold well, because they are going to be the bedrock that you’re building the rest of the team on. And so that that first ten, that first 20 makes a huge difference to what the next 8000 will look like.

Joey Kline: [00:28:33] Yeah, that’s right. The foundation of the house has got to be strong so it doesn’t collapse on the second level. Um, was there anything that you learned that was unexpected as you grew at patient Co and reached those headcount milestones that have changed the way you’re treating growth at rainforest?

Joshua Silver: [00:28:52] You know, I think a couple of things I think, you know, first and foremost, the early employees who are joining a startup are are very much joining it because they believe in the founders, because they believe in the mission. And while you still try to find people who are excited about that mission and want to go on that journey with you as you grow, you know, by the time you get to 50, 100, 150 people, it gets more and more challenging to find people who are really, uh, you know, mission and vision driven in quite the same way. Yeah. You tend to find some people that, you know, are excited about the company, but are also are excited about a paycheck. And so I think it’s really important that you, you know, form those strong roots early on. And, you know, I love the fact that you talked earlier about that onboarding program. I think that’s something that, you know, maybe we didn’t do quite as well with early on at patient Co, which was a, you know, highly nuanced field of both payments and health care. So I think we’ve really emphasized here at rainforest diving deeply into payments and making sure that everybody, regardless of their role, really has a good understanding of what the ecosystem looks like. I think the second thing also is just, you know, as you scale, um, you know, it’s more and more important to make sure that everybody understands what you’re trying to do. You know, when you have ten people, you’re all in a room. Everybody kind of intrinsically knows when you get to 50 people, 100 people, you know, sometimes you walk into a room and you’re like, what are we doing here? Right? You know, how did we get this far, far away? And ultimately, you know, I always kind of take that on the on the chin and say, look, ultimately that kind of comes down to me as a leader and failing to communicate to everybody not only what are we doing, but why are we doing it? If you can tell people why you’re you’re doing something, odds are they’re going to make the.

Joey Kline: [00:30:33] Right decision. Yeah, I could see, you know, it’s sometimes because it’s in your head and it’s ever present, you might not necessarily realize that. Well, it’s not not in everyone else’s head. Right? They are not having the same access to the information as I am. You almost have to stop yourself sometimes.

Joshua Silver: [00:30:50] Yeah, it’s really important, you know, understanding context. And I think that kind of goes into why you make decisions, but also making sure that people have the context of, you know, what went into that decision and why you’re doing it. And again, I find that that builds such consensus. You know, I used to say, you know, two very smart people with different information may come to different answers. Two very smart people with the same information or same set of context often will find a way to align.

Joey Kline: [00:31:16] Yeah. Okay. So let’s let’s back up because we kind of dove in. Tell us about rainforest. Tell us about the particular portion of the payment space that it focuses on. And then I’d love to, you know, kind of go backwards and go from patient code to rainforest.

Joshua Silver: [00:31:33] Absolutely. So rainforest is payments as a service for software companies. And what does that practically mean? It means that we are the underlying payments infrastructure for many different types of software out there. And so you as a consumer, when you go online and you make a donation to your favorite charity or you check out and go to the cash register at a mom and pop local shop, or you’re trying to pay a health care bill online. Any of these types of use cases, those software companies need a payments provider behind the scenes, and that is what rainforest focuses on, is helping them process payments in a very safe, efficient and effective way. And we also are helping those software companies generate new revenue and create stickier customers. So it’s kind of a win for the consumer or the person who’s paying by providing better payments experiences. And it’s a win for the software providers because they get stickier clients and they have a really valuable new source of revenue.

Joey Kline: [00:32:30] Okay. So I get the this whole process being easier from a customer’s perspective. What’s the mechanism by which you are creating a customer that is more likely to use that service in the future?

Joshua Silver: [00:32:43] Yeah. So study after study shows that when you have a customer or a merchant, as we would like to call it, that is using a software platform, if they start processing payments, they are much more likely to have higher engagement with that software platform and much less likely to churn. And when you think about it, it kind of makes sense, because when you’re a business and you’re using a software day in and day out, it’s one thing just to use it or have your employees use it, it’s another when your revenue stream is coming from that software company and you wake up every single morning and in your bank account, there’s money that’s being deposited that you’ve earned from that software company.

Joey Kline: [00:33:20] Yeah, yeah, that’s the association is much more impactful. And in your face.

Joshua Silver: [00:33:26] Absolutely. And I think that’s, you know, one, one, uh, you know, concept I’ve had as a repeat entrepreneur is always focusing on revenue generating businesses. Yes, I think there’s a lot of businesses out there that are efficiency focused or are different workflow tools. You know, every business I’ve ever started has really been in the revenue generation space. I think if you can help companies make more money, you’re going to be a much more valuable tool and company.

Joey Kline: [00:33:53] I mean, this is this is sort of my philosophy on, um, uh, job security as well. And obviously this is biased coming from someone who, you know, is a commissioned sales person. But my my idea of the best job security possible is, you know, if you can make money for a company, usually you’re in a pretty good position.

Joshua Silver: [00:34:12] Absolutely.

Joey Kline: [00:34:13] This was the when I first graduated college. I was an inside sales rep, and this was in, um, uh, the middle of oh eight. Okay. And so, you know, all of us fresh out of college experience something that we never experienced before. And all of a sudden executives started to really not want to have conversations or take meetings to learn about a new product because, well, you know what? There are plenty of more important things at that point in time. And everyone is a bit dejected. And so, you know, we’re kind of having an all hands, um, and, you know, the leadership was saying that, you know, and these were, you know, it was a startup. These two guys were barely older than I was. And they said, you know, I get that everyone’s scared out there, right? You know, this impacts us just as much as it impacts you. And just know that, you know, if if you can sell, you are never going to have a hard time finding a job.

Joshua Silver: [00:35:00] Yeah, I think those are, uh.

Joey Kline: [00:35:03] Wise words. Well, I think that probably that goes that seems to be somewhat of the, um, uh, you know, part of the mantra that you’ve taken into building companies is that especially in a universe in the past several years when, uh, belts have tightened and software services are getting canceled, if you can make a company money, a pretty good way to stick around.

Joshua Silver: [00:35:24] Yeah. And, you know, it’s an interesting point. We’ve actually seen a huge uptick in demand over, you know, the last year or two, a number of quarters in particular, because we are helping software companies generate more with less. They can take an existing client. And once you turn on payments, that’s a new revenue stream. And for many top performing companies, payments can actually represent 50% of their overall revenue. And so if you’re a $10 million revenue company today and you effectively add payments by using someone like rainforest, you may be able to actually double your your business without doubling your client count.

Joey Kline: [00:36:03] That is very interesting. So and this it what’s interesting also about your product is that there is a, there’s a B2B aspect and a B2C aspect to it. Obviously the you are getting paid by the merchant or at least a portion of the transaction I assume. Yep, that’s right. But it ultimately has to be user friendly for two different sets of people. The business that is your media customer and the end consumer that if it doesn’t work for that business will not be your customer. I’m curious how you design with two parties in mind like that.

Joshua Silver: [00:36:38] It’s a really important distinction. Historically, the way payments has been distributed has been through a referral model. A software company would partner with a bank or a sales arm of a bank that was called an ISO, an independent sales organization to distribute payments. And it was very much a throw a lead over the wall. If it closes, we will give you some commission on the back end. Call the residual. It was very disjointed. And, you know, in the late 90s and early 2000, they kind of came up with this firm called Integrated Payments, which basically meant you had some integration into the software. You weren’t, you know, ringing something up in a computer and then walking across the hall to punch it into a terminal. Right. It was integrated. You hit the checkout button and you can pay. Well, we’ve now taken that to the next level, which is embedded payments, which means that the payment experience is natively embedded within that software. And think about it as a consumer, think about something like Uber or Lyft. You don’t think about making a payment. It’s so intrinsic to the actual experience. You know, is Uber a payments company or are they a transportation company? Well, I think they’re actually a little bit of both.

Joey Kline: [00:37:43] That is true. And to your point about the increasing of revenue, when I get out of the airport and I see a line of cabs that is right in front of me, and frankly, probably comes a couple of minutes quicker than the Uber, I’d still rather wait. Because really, at the end of the day, it is the payment process of I mean, it’s the first time I’ve ever thought about this having this conversation. It is the payment process that is so much more enjoyable that convinces me to wait just a little bit longer for that transportation.

Joshua Silver: [00:38:17] That’s the perfect analogy. If you think about a taxi, that’s really a disjointed experience, right? They use a taxi meter and it says at the end of your journey, you know, your journey is, you know, your fare is $34. And then you either have to take out cash and pay them, or you have to use a separate credit card terminal and fiddle with it and punch in the numbers. Whereas in Uber it’s just fully embedded, right? It just happens as part of the experience. And we see that companies that have fully embedded payments experience actually drive increased adoption, and they actually can increase their basket size, meaning they’ll earn more on each and every person that comes through the door. So I think it’s, you know, both the consumer angle and making sure that we are nicely embedded into the overall flow is a big part of what we do.

Joey Kline: [00:39:01] Okay. Let’s get to the psychoanalysis portion of the show. Similar topic and question that I brought up with Sandeep. I am curious about your entrepreneurial journey. Obviously, as we already covered, you are a second time founder. Clearly you had a decent experience the first time around such that you chose to put yourself through this again. So tell me. Tell me about your background. Tell me about your drive to start. Uh, patient Co, where you think you kind of fall along that spectrum that we discussed.

Joshua Silver: [00:39:35] With patient co. You know, we really started that business in search of a of a problem that was you know, if you look at a lot of entrepreneurial articles and books, we found a problem that a lot of people had. It was a big market and we really engineered the company around it. You know, going into that, I wasn’t, you know, well versed in health care at all. You know, I paid very few health care bills. I was just graduating college at that point. So I didn’t have a lot of experience. So that that was really one where we searched very methodically for a problem and found a market that we thought we could build a good solution in. And, you know, fast forward a decade later, and clearly we have, you know, that scaled to to billions of dollars in processing and tens of millions of patients. But that was really kind of a, you know, an engineered, um, company in between patient co and starting rainforest. I took a bit of time off and started a consulting firm and worked primarily with software companies, helping them with payment strategy, using everything I had learned. Building a company myself figured, let me help other entrepreneurs make their their jobs a little bit easier. And I think that’s where my my view changed quite a bit, because after a few years of doing it, I realized that on the one hand, we had huge opportunity as an industry to move to embedded payments, to add better consumer experiences to generate all this revenue. But on the other hand, the vendors in the space, other payment processors and our competitors of rainforest today, we’re not doing a good job.

Joshua Silver: [00:41:01] They had terrible customer service. They had generally really high pricing, and almost all of them had very little good technology. And so when you kind of looked across those three dimensions, the technology and the product, the customer service and the commercials, you really couldn’t get good optimization there. And, you know, I remember time after time banging my head against the wall saying, why can’t I just find a vendor to work with? My my wife is a consultant is so painful, you know, getting to the end of a project and saying, we’re going to pick the least worst vendor. You know, it’s not who do we like? It’s it’s who’s who’s not the worst. And that’s just a really tough place to be. And so, you know, I really felt at that point I had no other option besides to start this. And I think I was very fortunate because I had experience of over a decade in payments, you know, I had personally grown and built, um, you know, a very successful software platform. And I had a great team that came with me, both from, uh, patient co and the engineering and product side, but also from the consulting world. And we kind of merge the two cohorts of, you know, engineering talent and then the payment operators from my consulting network. And that’s how we got the company started. And so, you know, by choice or force, I don’t know, but it certainly was something I was compelled to do because I think the industry really needed it.

Joey Kline: [00:42:18] I was it’s an unintended consequence story, which typically tends to be the best ones that kind of just develop organically like that.

Joshua Silver: [00:42:26] Yeah, it definitely was organic. And you know, I think a lot of times people ask, you know, was it skill or luck, you know, to entrepreneurs and how they were successful? You know, I think it’s very much a combination of both. It’s, you know, you got to be in the right place at the right time. So much of life is timing. But then you also couple that with the skill and the background to be able to build these complex businesses and to operate them very effectively.

Joey Kline: [00:42:52] Yeah. Look, that’s the a much deeper philosophical question that we can touch on on another show about free will and whether we have it and how that affects what we’re doing. But, you know, okay, yes, you cannot control the circumstances in which you were born or where you were born. But, you know, especially in business, I think a lot of it is you make your own luck, right? You put yourself in enough rooms with enough people, with enough circumstances that, yes, the situation finds you, but you have widened the pool of people or circumstances such that you have more available to you.

Joshua Silver: [00:43:28] It’s also, I think, based on your history and what you’ve seen in the data points you have. And, you know, it was very interesting. We we announced late last year that we had closed a large seed round that was led by Excel and Tech Square Ventures here in town, and Infinity Ventures and other, you know, fintech focused investors. And one of the most interesting questions I always asked me is, you know, where’s all your customer research? You know, where’s your early customers? And I kind of told them, look, I’ve been paid the last three years very well as a consultant to do customer discovery. There’s nobody else that’s going to come before you doing a pitch that has done more customer research because I’ve sat with, you know, over 50 different software companies helping them think through their strategy. So I’ve seen how buyers think about it. I’ve seen what their challenges are, and I’ve seen how all the vendors are responding or failing to respond. And so there really wasn’t anyone else, I think at that point in time who had more data points to be able to really craft this company in the way that we have.

Joey Kline: [00:44:26] That’s a very good answer to that question for a VC.

Joshua Silver: [00:44:30] Well, we had we successfully closed the closed the round and was oversubscribed. And that’s great competing tum sheets. So I love the answer worked.

Joey Kline: [00:44:38] Yeah. What I, what I’m very interested in is of course you you mentioned your, um, your cap table and of course you have both local and national funding in there. Was this purposeful was this by accident? I you know, I think Atlanta has gone leagues beyond where it was from a VC standpoint. But I’m curious if that just happened or if it was targeted.

Joshua Silver: [00:45:01] Yeah. You know, it was actually really, um, you know, targeted. I wanted to fill three gaps when I thought about fundraising for our seed round. The first was to make sure that we had fintech experts around the table. I wanted people who really understood payments and fintech, who had the networks, who understood the journey we were going to go on and the challenges we would face and the time it would take, you know, for us to build this type of business. The next thing that I wanted was to make sure that we had folks that had deep pockets, you know, really your kind of blue chip firms. And that’s where folks like Excel and the box group out of New York come in. They’ve just seen it all. They’ve been around a very long time. You know, they’re able to be a multi-stage fund and, you know, work with you for a long time. And in such a competitive space, you know, we knew we were going to raise multiple rounds of capital and we were, you know, focused on building a big business. So that was kind of the second group. And then the third group that’s always been important to me is we are an Atlanta forward company. Our headquarters are here. You know, a lot of our core team is here. We do have some remote folks. But, you know, the the vast majority are in Atlanta. And so, you know, wanted to support that that Atlanta ecosystem and also acknowledge the value that they bring. And so we’ve got some Atlanta representation as well.

Joey Kline: [00:46:14] Okay. Let’s talk about that. Because Atlanta kind of is the um, let’s call it the Greek chorus in the background here on this show. And um, I don’t think that we have really an industry that defines Atlanta such that, you know, film is in, um, Los Angeles or energy is in Houston. But within our tech industry, I think the clear winner, or at least in terms of share, is fintech, right? That is really what, you know, in, in technology, uh, at least software what Atlanta is known for. Why I always wonder why these things develop. Is it organic? Is there some reason, some reason based on past entrepreneurs and acquisitions? Like why is this the Mecca for this particular type of technology?

Joshua Silver: [00:47:06] Yeah, so they say that somewhere between 70 and 80% of all credit card payments still get routed through Georgia today. That’s crazy. And, you know, I think it’s because historically, we’ve had a lot of payment companies that innovated here and grew. And so if you look at the top processors and again, a lot of these have now been acquired. But you know, you had first data here. You had Texas down in Columbus, you had Elavon, you had worldpay and the list goes on and on of payments companies. And so you just had a huge number of payments professionals, um, around the, the Atlanta and greater Georgia area. And, you know, I think based on what I talked about before, in terms of having the experience and longevity, it’s really that talent that that makes a big difference.

Joey Kline: [00:47:49] Well, I imagine that your talent pool from which to pull is quite wide.

Joshua Silver: [00:47:55] It really is. You know, Atlanta is, I think, a great place to start a company. Um, you know, I’ve always found that, you know, Atlanta has a great quality of life. You know, you have, uh, really, really top talent coming from the great universities we have, whether it’s Georgia Tech or Emory or Georgia State. You know, the list goes on. And there aren’t as many companies you’re competing with here. You know, if we were based in Silicon Valley, especially a couple of years ago, it would cost us at least 4 or 5, six times as much to create the same companies. Out on the West Coast that it does here, and a lot of it’s due to cost of living and talent of of or competition among talent.

Joey Kline: [00:48:35] Yeah that’s right. And when you although I am very curious what happens on that front because one interesting stat that I found out the other day was the the United States population grew by 1.6 million last year, 1.4 million of those people moved to the south, basically Florida, Georgia, South Carolina, North Carolina, Tennessee and Texas, right? So yes, people are voting with their feet now. Companies vote with their feet, too, at a certain point. And I think all of this is fantastic for Atlanta. I do wonder when you get to a point where you might be sitting there and saying, oh, this maybe this is much more of a competitive environment than I am used to.

Joshua Silver: [00:49:18] I think Atlanta has has come so far in the last two decades. But, you know, I think we still have a long way to go. You know, when you compare us to New York or Boston or Silicon Valley and, you know, I’ve been a huge proponent of Atlanta, you know, started, you know, three companies here in Atlanta and will continue to, to do so. Um, but I don’t you know, I don’t I don’t think that the competition is something that really scares us. If anything, I think the caliber of talent will continue to increase. And the thing I’m actually most excited about in the Atlanta market is, as we’re getting to multiple generations of startup founders and repeat founders, they’re able to give back. And, you know, whether that’s someone like David Cummings who’s, you know, doing so from a real estate and culture perspective, whether it’s, you know, repeat founders like myself that spend a lot of time mentoring other first time founders, you know, there’s so many different ways to give back. And that’s really something that has made the epicenters of entrepreneurship in the US. What they are is that collection of successful entrepreneurs giving back. And we’re now, I think, just getting to that point where you’ve got that critical mass in Atlanta, I.

Joey Kline: [00:50:22] Couldn’t agree more. Right? You keep it in the family. You have enough people with successful exits who reinvest back into the community, whether that is with, uh, talent time or dollars. Obviously, I could go on and on about what David Cummings just did for South Town Town, but I really think that we’re going to look back in a decade. And, um, I this is not an exaggeration. I think he has he has single handedly saved downtown. Um, it it is as someone who is extremely invested in that, not just from a professional, but a personal standpoint. Atlanta is too good of a city to have the downtown that we have. Um, I, I feel pretty good.

Joshua Silver: [00:51:02] Yeah. It’s remarkable. Um, you know, I’d be really curious to watch the growth that that happens in that area. And, you know, just looking at the success of Atlanta Tech Village, which is is where we’re based now, um, there’s just such great energy there. And people really enjoy coming to work every day.

Joey Kline: [00:51:18] Well, yes. And you have the type of, look, institutional real estate investors. There is a time and place for them, but they are not known to be patient capital. Um, hence what happened to the first owner. Yeah. So it’s I think that he is a he and his organization and his ilk are a great ownership group because they care and they do not have the typical, um, issues that other real estate investors have where there’s too many cooks in the kitchen, too many opinions, uh, and too much additional capital.

Joshua Silver: [00:51:56] Yeah. It’s it’s, you know, it’s, I think a great investment for Atlanta. And I’m also excited about all the other things happening in Atlanta, you know, even out of Georgia Tech, Chris, Klaus and critics. And there’s just so many initiatives. When I look back a decade ago, two decades ago, three decades ago, it’s remarkable how much we’ve we’ve improved each and every one.

Joey Kline: [00:52:16] It really is. Um, when in terms of your buyer profile and we’re totally doing 180, but when I hear what your product does, you know, I go, well, you know, this could be is this it is it product? I mean, who is typically your audience and your buyer?

Joshua Silver: [00:52:36] That’s one thing that we’ve focused a lot on at rainforest, is making sure that our product works well across all of your different buyer groups. One of our main competitors is stripe, which is a payments processor that’s particularly developer focused. They really catered to the developer experience and said, we will figure out how to let developers adopt our product quickly and easily, and they did a phenomenal job with that. It turns out, though, as software companies scale the development and the technology is just one part of the puzzle. You also have the commercials and the accounting and finance. You also have the operations. You also have the sales and go to market. And one of the big challenges that we see as companies look to add payments as this revenue stream is around adoption, they may have 1000 customers of their software, but maybe only 100 of them are using payments or subscribe for payments, meaning a 10% attach rate if we can help them get from 10% attach rate up to 20, 30, 40, 50, 80%, that’s literally millions of dollars of additional revenue that they’re driving. And that’s why rainforest is focused on that consultative aspect of both sales and implementation and service in a way that many of our competitors who are focused on self-service are not.

Joey Kline: [00:53:50] I got it. Okay, that makes a lot of sense. Um, well, I really appreciate you coming here sharing your story. Uh, Rainforest Comm, or so.

Joshua Silver: [00:54:00] You can learn more about us at Rainforest Paycom. Okay, that’s rainforest pay com. You can also check us out on LinkedIn. I also am a pretty frequent poster on LinkedIn myself, Joshua Silver, and really appreciate you having me on the show.

Joey Kline: [00:54:15] Absolutely, Joshua. Thank you, Sandeep, thank you for sharing your story.

Sandeep Ahuja: [00:54:19] Yeah, this has been a pleasure.

Joey Kline: [00:54:21] Okay, everyone, thank you for listening to Tech Talk. Have a great one.