Rule of 40 vs Grow At All Costs w/ Mark Wayland (CRO, Box)
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Hey folks, quick plug before we get into today's episode. I'll be at the HubSpot AI Summit 2025 in San Francisco on June 11th. This is an invite-only event that's bringing together some of the top founders, enterprise leaders, and investors in the AI ecosystem.

I'm joining some colleagues from Replit and LiveX AI for a session on how autonomous agents are starting to disrupt the SaaS ecosystem and what it means for go-to-market, product strategy, and how we build software in the next decade. I've got 10 invites to share with listeners of The Science of Scaling. If you're building in this space or investing in early-stage AI and think you should be in the room,

Request a spot with the link I'll put in the description and make sure to put Science of Scaling in the referred by field. I'll review and handpick the 10 folks who will get approved. Hope I see you there. That's the challenge of Rule of Fouriers. That's very constraining. You have like half a point to move on one side or the other. You don't have 10 points to throw around like maybe you had in the old days. We strive for the unicorn, the triple, triple, double, double, the venture capital outcome.

But it doesn't always happen that way. In fact, it rarely happens that way. We need to pivot. We need to pivot the business model.

And we can pivot to a rule of 40, a private equity orientation that can still lead to great success for the founders, the executives, and the investors. We're going to unpack that today with Mark Whelan, the CRO of Box, the Stage 2 Capital LP. As he pivoted, he thought he was going to hyperscale, but then the macro economy fell apart and he needed to pivot to a different style. I'm Mark Roberge, and this is The Science of Scale. ♪

All right, so Mark, hey, good to see you. Welcome to the show. Great seeing you. Thanks for having me. You've had a number of amazing runs at some of the best tech companies out there, more recently Box. Maybe we just start at the beginning, you know, paint the scene on like how Box came up with you, how y'all got introduced and what made you jump in. It was right about six years ago this month that a recruiter reached out to me and I was at a stage in my career where I decided that

Culture was, I think, the most important thing to me in my next role. And after talking to Steph, who hired me, who was the COO for kind of my first five plus years here, I just thought, you know, these are people I can work with. And that ended up being, you know, arguably the best career decision I've made in the last 32 years. Is that sort of authentic to you and your preferences? Or is that is there sort of like a stereotype you're looking for, I suppose? In order for me to be my best.

I have to work with people that are passionate and committed and aren't coasting or vesting in peace or all these things that we talk about that you see in some companies. I want to work with people that are smart and hardworking and passionate about what we're doing. And when you have people that are in that mindset, you can do amazing things.

Love it. So a little bit of like what you see is greatness, but also what's right for you. Yeah. All right. Let's move over to some of the execution side. Obviously, for you to make a bet like this, you must have been quite optimistic about the role and the potential, perhaps even some of the impact you could make. We made a run at this market at Salesforce when I started there in the 07-08 period.

And we kind of made a run at it with a product called Salesforce Content that we later abandoned in favor of some brilliant moves and Service Cloud and Marketing Cloud and everything else. So I was familiar with the market. So I arrived in 2019 with grand plans to accelerate growth. And then three months after I arrived, we got an activist investor.

And I think it is applicable to startups because our experience in working with the activists were a great lesson for the Rule of 40 world that came upon the whole market a couple of years later. Generally, when an activist shows up, they have a working thesis, which is this is a company that's probably not growing as fast as we think it should be. And they're spending too much money, to put it really simply. And so, you know, they come in and through moves that I wasn't directly involved with.

They basically say, you know, you need to grow faster and you need to cut costs.

And if you don't, you're not going to like the way it goes. That is, I think, the simple version of it. So we were not growing as fast as we should have at that time. And we felt that way as well. And we were definitely spending too much money. And the music stopped on that for us. And then it did for the whole market. We were for the 40. But for us, the music stopped a couple of years before it did for the rest of the world. Hey, folks, just Mark here. This sounds like a big company thing. Activist investors switch to rule of 40.

But there's so much important learning in here for the startup ecosystem. Okay, so first off, let me just like have some deeper definitions here. Rule of 40. So rule of 40 means you add your growth rate plus your profit margin. And when it's 40 or above, you're good. And if it's less, you're suboptimal. It's highly used in the private equity world. And in some cases...

They even apply if you're negative margin, right? So you could be growing 60%, but have a negative 20% margin and still be rule of 40. Some, depending on who you're dealing with as an investor. We also have this activist investor coming in who's forcing a contextual change on Box and Mark from grow at all costs to operating within a rule of 40 mentality, the startup ecosystem.

We do a startup. We raise venture capital. And if you raise venture capital, you better have a blitz scale plan. You better have a grow at all costs plan. That's the expectation. However, two, three, four years in, 10% of the time it works out, 90% of the time it doesn't. The problem is we don't change the playbook. We don't change the system.

Even though it's very clear that we're not a blitz scale, that we're not a grow all cost, that we're not going to be a $10 billion company, we still apply the same go-to-market system design and approach. Wrong. We got to shift. We got to shift. Just like what's happening here to Mark with the activist investor, we have to shift to a rule of 40. We have to change our go-to-market system to salvage this business, to be default alive,

And it gives us a shot, a real shot. I'm talking like more than 50% of the time to return hundreds of millions of dollars to the founders, the employees, and the investors. Or get it back on the unicorn approach. That's happened. We've had other folks like Henry at Zoom Info where that has occurred. But we're default alive. We have to contextually shift.

so that's what we're going to unpack with mark on what are the details on making that happen let's get back to him we had to take a lot of cost out of the business and we did so fairly quickly and with less pain than any of us expected because we did have a little too much fat in the business

And in a pre-Rule of 40 world, companies like ours, if you saw an opportunity, whether with a product or with a market or an initiative, you could just throw five or 10 people at it and give it a go and see if it worked or not. And a lot of them would work and a lot of them wouldn't. And it was sort of okay.

But what happens when you have to focus on profitable growth, like driving growth while making money, which is what we all have to do now, is you just have to be much more measured in the decisions you make. You can't just throw stuff at the wall. And what we found, I think, was the big lesson is actually being profitable, making money is a good thing.

But the real waste when you are doing all these experiments is that every one of those experiments, every one of those initiatives requires all sorts of interlock meetings with your executive teams.

And so when you're an executive in a company, you spend a lot of your time going from meeting to meeting to meeting, getting updates on all these projects, and many of them aren't going to work. So not only do you get the savings, but you actually free up so much of the time of your executive team to focus on the core business, which is what is really going to drive growth for the company. Biggest question I get every day. How do you build the next unicorn?

How do you build predictable, scalable revenue growth? Luckily, the folks at HubSpot have put together the Science of Scaling Database, real playbooks from companies that have gotten to the scale of like $40 billion in market cap. The playbooks cover key decisions like hiring

hiring, compensation, go-to-market strategy, ICP development, even stuff on AI in sales. All from the folks behind the fastest growing companies in tech. It's not fluffy. It's super tactical. You know my content. You know my brand. It's stuff that you're going to pick up, download, and put to use within an hour. So head to the description, click on the link, and download your free copy to start scaling your business today.

Coming out of what maybe we call it a blitzscaling mentality or a grow-at-all-cost mentality, and now you've completely shifted and you're reflecting on some of the advantages of the shift, the silver linings that come with the shift. At some point, we might swing back to a grow-at-all-cost. And in fact, a lot of that's happening in AI right now. And if you went and joined one of these AI companies...

Can you justify that? I think this is a healthier way to run a business. You know, when cost doesn't matter, then your teams roll up to you lots of growth initiatives and you can green light all of them or eight out of 10 of them and they don't get the level of scrutiny that they should. But when you have cost constraints, then a lot of really great ideas come up. And the hard part about the job is which things you can afford to say no to, not what can I say yes to.

You know, we also have to just appreciate why the blitz scale and the grower on a cost exists and why it is advantageous if the context is suited for it. I've never really like, I got to more deeply frame this and like get this into the book. But like, let's just kind of riff within the context that Mark is giving us. So the typical counter to the rule of 40 is the,

You got to get out there first. You got to be the first one to raise all the money and the first one to have the tech crunch in the Wall Street Journal article. And that's going to allow you to get all the best engineers and to attract the best salespeople and to have customers recognize you as the category leader. There's huge value to that if you can go. And oftentimes that works out and it creates big, big businesses. But the counter to that is sometimes we go too far.

I think we'd all agree if you raise a seed round of capital and you're at a million in revenue, burning a billion dollars in the next year is too much. We'd also agree that burning $100 is too little. But where are we in between? And I just think that we take on too much for what our business is telling us in terms of our capability. And you know,

Let's say we get pulled off that track and we continue to burn and that flywheel shuts down and we never grow into that valuation, then we're going to regret it. Unfortunately, Mark is here catching that sooner with the activist investor and recognizing that there's a different way. But I just want to make sure that we understand both sides.

Shouldn't always do rule of 40. Shouldn't always do grow at all costs. We should listen to the signals in the business and the market opportunity and do what's right for our context and opportunity. All right, let's get back to Mark. I know that we make data-driven decisions on everything. Literally everything that we do is a data-driven decision. How much is this going to cost? And what's the return going to be on it and when? And not these five-year horizons like

You just have to be much more measured in where you invest your time, where you invest your resources. What did you have to change to adapt from this like grow at all costs to rule 40? In Salesforce, it was very much in those early days. I don't know what it's like now. We were big believers in distribution capacity. Like,

Just like using simple math and you know this stuff so well, like if each head is worth a million dollars a year just to make the math easy and you want to get to a hundred million dollars and you need a hundred heads. It's just like- Right. And you kind of added the, you sort of added them in Q1 as soon as possible. Yeah, you hire them as early as you can. And then just went after it. And then if things are going well, you hire more and it's this linear thing. In the go-go years, we paused hiring for a couple of quarters.

And then I think after the mortgage crisis, we paused hiring for a little bit. And then a few quarters later, we didn't have enough capacity. And we're like, we're going to never pause hiring again. But like, that's over. Because if you don't make the reps successful, then you're in trouble. The world that you and I were in when you were at HubSpot in those early days that I was at Salesforce, when I started there, people were buying their first SaaS app or their fifth or their 10th or their 50th.

And now the Okta report says the average enterprise has 187 SaaS applications. So it's just the buying motion is different. And so this idea that you can just like never stop hiring, you have to have really good onboarding programs, really good sales enablement capabilities. You have to have robust lead gen capabilities, like the whole go-to-market system that you referenced earlier, I think needs to be built with much more scrutiny than before. And then of course, now we're in the age of AI.

A lot of my friends from Salesforce are now qualified and there's all these companies that are doing AI SDRs. That world's changed, right?

I don't have to have the same SDR capacity that I did before because I can use AI tools. So then if I can have a different ratio between SDRs and AEs, do I take that as savings or do I take that to fund other initiatives that maybe I couldn't afford before? The grow at all costs, it's like, okay, you said the easy numbers, 100 mil, we need 100 revs producing a million each. Let's get them as early as possible.

And we'll weed out the folks that don't ramp. And then if it's going well, we'll add even more. But in a rule of 40, what happens in the planning process that's different? On the AE front, that part of it has not changed a whole lot, right? You still do need distribution capacity. The pacing of the hiring can change based on if we're running hot, if we're running cold, how the numbers are going. Right.

It's not just a green light to hire, hire, hire like it's been in the past. And then it's all of the supporting teams that are a little tougher these days when budgets aren't wide open. So whether it's SE ratios, we sell with partners as well. So we have resellers, we have ISV partners, we have SI partners. You need people to manage those relationships.

Those are not unlimited headcount as not that they were unlimited before, but it was more generous. And, you know, basically when you go through annual planning, you fund the AEs and then, and then all the other roles, you know, I, I, I want 10, I get seven. You get that sort of a conversation across every one of the supporting roles that you need in order to make those AEs successful. And so it's just, it's just constrained, which

Which I think is healthy to my earlier point. That just means that everything has to have a business case. Everything has to have an ROI. If you hold on to this belief that we are in a challenging environment, you know, this quarter, this fiscal year, and it's going to be different next year, you're going to be sorely disappointed. Yeah. Mark's story and box right here, this whole like,

Uh, rule of 40 versus grow at all costs, the pacing, this is really coming to life for us right out of the science of scaling methodology in terms of like, how fast can we scale? I mean, we always kind of joke like the typical answer is like, we got a triple, we need a hundred million, our reps do a million each. So we need a hundred reps. Let's hire them in the, in the beginning of the year, according to plan and just cross our fingers and see what happens.

And if it goes well, we'll add more. And if it doesn't, we'll lay people off and miss our target. Like, it just seems weird. You know, so what Mark's doing here is he's looking at this each quarter, right? And we have an opportunity here as opposed to like sitting down and saying, okay, we're supposed to triple, triple, double, double because that's what Databricks did in their fourth year. So let's do the capacity math, hire that many reps up front and go. No.

Let's analyze using our speedometer, a product market fit and go-to market fit to figure out how fast we're able to scale. And we'll tweet, we'll get a little aggressive on the close rates, get a little aggressive on the higher-end pacing, like 10% or 20% aggressive, and we'll get to that 150% target. But more importantly is once we set the annual plan, that's not it for the year. That's just our best projection as we're sitting here in November of Q4 on what we can do.

And we're going to reevaluate that in March or early April when the first quarter is over. And we'll predefine what would we have seen after that quarter that would cause us to go faster? What would we see that would cause us to go the same pace? And what would I see that would cause us to go slower?

And we reevaluate that each quarter as opposed to this haphazard, like living and dying by the knowledge we had in the business back in November, even though now it's August and we know a lot more. So just think about that annual planning and that speedometer more. It's not like this constant thrash, hire 50 reps this quarter, hire no reps this quarter, lay people off, hire 50 reps again. That just creates a lot of inefficiency in the business.

But instead we look at this as a red, yellow, green on a quarterly basis and throttle accordingly.

All right, let's get back to Mark. You know, we're not going to go from 27% operating margin down to 22 so we can put tens or 20 or 50 or 100 million in to go to market. It's going to be this measured growth. And that's the challenge of rule of four is that's very constraining. Like it's you, you know, you have like half a point to move on one side or the other. You don't have 10 points to throw around like maybe you had in the old days.

I do believe that we blitz scale too much in the ecosystem. I do believe that we grow at all costs too often. And, but at the same time, I appreciate the, um, why we do that.

But I'm kind of with you. I think we need to retract to rule of 40 more often than we do. But that said, the arguments for the blitz scale, the grow at all cost is you're going to attract the best people. Like you're going to like get the TechCrunch article, the Wall Street Journal article. You're going to raise the big dollars. You're going to be known as the category creator. How do you defend against that or compete with that?

32 years I've been in tech sales roles as an IC and as a leader, you can have this sort of romanticized version of what your career can look like, where maybe you get in early with a company that is white hot and you blitz scale it and you make generational wealth and you're category creator and everything else. It's just not the way my career played out. Who has done that? I mean, literally like, no, no, no, not, no, not. I haven't in the sense that like,

While you go through, yes, on the surface. Yeah.

But as you're going through it, it feels like there's no pain. No, it always looks great from the outside. There's no doubts. Exactly. I've never met anyone where that was like a champagne party all the way through. Yeah, no, it's never easy. And so I went to Salesforce post-IPO. I went to Box post-IPO. I've gone to companies in this build and scale phase. I never went through the zero to 100 phase. I've been at...

operational scale, building repeatable motions. I joined Salesforce at 400 million, I joined Box at 600 million. So I've been at periods of scale and I never did that hyper growth, one to 25, 25 to 100 kind of a thing. So I have an appreciation for it, but I've worked in these kinds of environments.

So here's the reality is that most startups fail. So I can't tell you how many hundreds and hundreds and hundreds of reps and managers I have hired that worked at big companies. And then they went to three startups that wiped out and then they want to come back to a company like ours.

And I have found that working in a company like ours can build really, really strong operational skills. When you work in a company that's at scale, that has financial constraints, which all, you know, at scale software companies have now,

you build really, really good skills. And then if you're in a less constrained environment where you've got the market coming to you because you have really good product market fit and you're a category creator and everything else, I think the skills you build working in a company like ours or an at-scale company will serve you very, very well. That's well said. And now let's get back to the go-to-market system design and explore whether changes occur at the tactical level as we make this shift. So talk about the rep hiring program.

profile. When you thought about what you did at Salesforce or what you were doing right when you joined the company.

Did it change at all when you had to take on this new operating mentality? No, my hiring profile is the same as the one that we kind of built when I was at Salesforce. We had this really fun opportunity to go work with sales leaders from around the world in all geographies and all segments and figure out like who are the top sellers and why are they successful and then figure out what the rubric is.

And we found out that the number one skill of successful Salesforce sellers, and this must have been, I don't know, 2010, 2011, 2012,

across segments, the very best sellers were really strong on business acumen. And this should come as no surprise, right? Because if you're selling business applications, and it's a use case driven sale where you're selling to IT and to lines of business, you have to have high levels of business acumen. You have to understand how to get to root cause of what the problem is customers are trying to solve. It's not just a feature benefit sale. And

And the people that had high business acumen were very successful. And that's the same here at Box. And then the second thing, and these are the most two important traits for me, is grit. The problem is you'd hire these people that looked right on paper, and then they would fall apart when things got hard. So around that period, I really shifted my interviewing style to talk about losses.

Like, I want to talk about the most pain and suffering you've had in your personal and your professional life. And what did you do? Because when you come work for us, it's going to be hard. There is a dramatic shift in the hiring profile for sellers in the grow at all cost versus the rule of 40. And it's like, it's, it's trying to think how to explain this. It's so

subtle. But essentially what it means is if you are successfully pulling off grow at all cost, sometimes, oftentimes, it means that you are just crushing it on the product side, on the marketing side, on the demand side, such that below average sellers are succeeding. What he's saying here with his study about the business acumen, he's saying that they understood the

Business drivers, the problems, they weren't showing up and throwing up. They weren't feature dumping. This is the contrast between very good selling and below average selling. Very good selling being consultative. When you analyze the first meeting between the seller and the buyer, we've seen endless statistical studies that the best sellers out there speak less than half the time. They're asking questions. They're probing for this pain, understanding the business challenges.

We've seen endless studies that show that below average sellers feature dump. This is what we do. This is how we do it. Either get on board or don't. That's fine when you're successfully blitz scaling and you've created this huge market demand, but

In almost all cases, it comes to an end. He's even talking here with Salesforce where they're still doing great. Their brand is growing like crazy. There's tons of marketing happening, but because they're growing so fast, the territories have shrunk to like 100 accounts in San Francisco to two.

And guess what? The show up and throw up person who can cherry pick and can get 50 leads and close four and make their quota no longer works. At some point, you have to pivot to a great seller, to as Mark says, someone with great business acumen. As he goes on to say, someone can execute consultative selling. As he discussed, someone that can probe on pain and tailor the solution to that pain.

So that's going to happen for sure when we shift the rule of 40 is we're going to have to up-level our seller, get rid of the folks that haven't learned the skill yet and bring in a world-class team.

Let's get back to Mort. And people that didn't have a lot of grit, which she defines as the passion and perseverance for long-term goals, they would fall apart. They would emotionally fold up their tent and they would do 50% of their number. And then you would have to manage people out that looked right on paper. I have found that in enterprise software, if you find people that are high in business acumen and they are high on grit, they will always be successful in any environment, in any company, in any economic condition.

I love that. And I love the reflection back to the Salesforce analysis. And it's so applicable, I think, to this Rule 40 journey that you had to do. Let's also cover the demand gen side of the system. So does that, as you think about, okay, the systems you've ran grow at all cost.

How did demand gen work? And then you had to shift to the rule of 40. Did it change anything with demand gen strategy? It did. When you're doing your planning for the next fiscal year, there are some resources that generally don't get hit. AEs don't get hit and engineers don't get hit and everything else gets constrained.

And unfortunately, marketing budgets get constrained way more than AE headcount budgets do. So that is hard. And I think it's really critical that the CRO or your VP of sales and the CMO or your VP of marketing, whether they have the title or not, but the functional heads of marketing and the functional heads of sales have to be very, very aligned.

I love this. I love this like go-to-market system, holistic sales plus marketing culture. And it starts at the top. The CMO and CRO or the CMO and head of sales cannot be politically at odds with each other. They need to be partners driving toward the same goal. They need to sit in a room and agree how each of them is going to measure their departments.

And there's no room for cheating. There's no room for, oh, we miss because the leads suck. Marketing miss or marketing saying, oh, we miss because the sales team sucks. We feed them great leads and they don't close them. No, we have to like clearly define what is pipeline, whether it's created from an SDR or created from an event or created from a content campaign.

And we have to agree what is a reasonable conversion from pipeline to customers to hit those ARR targets. We're operating together. And when things are breaking, we're both taking ownership. Kudos to Mark and their CMO on creating that culture.

That is clearly an important ingredient leading to Box's growth and success. Let's get back to him. If you have people that, you know, say the leads are weak, and if they don't use those words, but if they have those thoughts, you have a problem. Or if you have marketers that are saying, you know, our salespeople can't sell value, that you have to have a revenue team.

Not a sales team and a marketing team, but you have to have a revenue team. And that's sales- And that's what I wanted you to come at it from Mark too, is not necessarily closely associate the demand gen with marketing. Yeah. But appreciating the demand gen can come from AEs. Yeah. It can come from SDRs that can roll up to sales. Yes. So I'm kind of like, as you look at that holistically, how are they different? It's really critical that we're all looking at the same numbers. Yeah.

and the whole market has evolved around this. Like our CMO, Tricia and I, we are partners in, in helping to drive the business as well as John, who's our chief customer officer. And like the metrics that she runs her business on, uh,

I know what they are and I agree with them and she knows what my metrics are. And there's no one that's using like funny math. Rather than taking the budget that, you know, you get the budget from the board goes to finance and you split it to go to market and then you split it to market and you split it to sales. We're having one integrated conversation about like, here's what the whole budget is for go to market and where should we place our bets?

And you can't have any game plan on that. It's got to be one unified leadership team that's making those decisions on where the dollars go. And you mentioned sort of like she knows how you're measured, what you're responsible for, you know what she's measured, what you both agree to it. Can you elaborate on that? We manage those numbers together, but she knows that the pipeline needs the ARR and I know that the ARR needs the pipeline. I think that just having real clear alignment on what those metrics are. In fact, like right now, I'm

I'm talking to you during a pipeline meeting that I'm going to go to right at the end of this meeting. And that's a call that she and I host together. And we don't think of pipeline as being a marketing thing. We think of pipeline as being a whole company thing. You have to manage what the different sources are pipeline. You want to monitor those things.

but you can't overdo it there because then people start playing games. And so I think that having alignment with the functional leadership on, you know, we have to go build X hundreds of millions of pipeline. Where do we go invest our dollars so we can deliver that result?

And then let's monitor it week by week, you know, throughout the year to see how we're doing. Do we have to make some changes with people? Do we have to move some money around? But making those decisions in an aligned fashion is, I think, the best practice. What are these folks doing? How are you... What are you training them to do? What are you holding them accountable to do? Did that change at all? Like, as you thought about, like, what your vision for that was in 2019 and then how it might have changed after the activist investor action, did it change at all? For us, the really hard thing was...

we kind of got through the activist period really quickly. And then night, so the activist showed up three months after I got here, we did all the cost cutting. And then six months after that, the pandemic hit. But when the pandemic hit, we all had massive cost savings, right? We all had no more T&E, no more field marketing expenses.

And that was huge, huge savings. And then it was just a hiring frenzy at that time. Lots of other companies were hiring our people like crazy. And then magically, or maybe not so magically during that period, we saw a pretty meaningful growth acceleration, which was pretty awesome. Like we were like crazy margin expansion relatively quickly while we're accelerating revenue growth.

And then right when we were about to step on the gas and refill the demand gen budgets, I was in annual planning and I was like, all right, there's tens of millions coming our way. We're going to go. Then rule of 40 hit.

And so the challenge at that period when Rule of 40 hit, and at that moment, it was January of 22, I think, when it hit, all the SaaS valuations got cut in half and ours kind of held. Not because we were better than anyone, but we had already done all the cost optimization work and we weren't overvalued ever. So everyone else took a haircut that we didn't have to take.

If you have 18 points of operating margin, then they want 19 the next year and 20 the year after that. It doesn't go the other way. You got to give more and more margin as a public company. And that's flowed down to the private markets. So they snapped the chalk line on us of our operating margin when we were at our leanest. I mean, very, very lean. And then we had to expand margin from that point. So at a point where we had proven the growth thesis and it was time to invest, we were constrained in our ability to do so.

So we had a couple of year period where marketing budgets, demand gen budgets were almost flat as we were trying to drive growth. And that was very, very challenging. The big change that we had to make is that every dollar that marketing creates costs money, right? Because you have to spend money on SEO, on events, and everything costs money. But every dollar of pipeline that an AE creates, in a sense, is free.

Because those heads are already built into your financial model. So we really had to pivot the culture of the sales team to understand that you are demand creators. Your job is ARR. Your job is to close deals and retain customers and everything else. But you have another part of your job, and that's building pipeline. Because think about it this way. In our company, we have 300-ish sellers. We have like 80 CSMs. They have to be pipeline generators as well.

And the marketing team is smaller than both of those teams. So if we have a mindset that like marketing is responsible for pipeline, we're going to be in real trouble. One of the arguments, I suppose, that folks that want to blitz scale or grow at all cost is like, you need a lot of this periphery experimentation to expand TAM, to explore with new products, to explore with new demand channels. When you started talking at the beginning of our discussion, that was some of the stuff that got caught.

Does it all get cut or are you just more disciplined around that experiment? Is that experimentation still needed? Can you talk through how that flowed through the Rule 40 culture? Yeah. I mean, to be clear, it doesn't all get cut. In the years that I've been here, we've grown from 600 million to 1.1 billion and we've introduced a ton of new products to the market. Crazy.

And we've expanded from collaboration into electronic signatures and workflow. And now the AI boom is the most exciting growth period that we've been in. And all those things require money. You got to hire the engineers to do it, the product managers to do it. You have to have PMMs. You have to do messaging and positioning. You have to enable the sales team. And we funded all those initiatives. We just fund them in a very measured way. You're stepping into the investments.

as you show results rather than writing an open check and, you know, check it in later.

I just want to thank you for dropping that knowledge and helping us compare and contrast it in a very real and successful practical example. And I think I need to get you back to a pipeline review as well. I got to go talk about pipeline right now. Thanks for having me. And yeah, profitable growth is a good thing. Thanks so much, Mark. All right. That does it for today, folks. Our episode was written and produced by my favorite producer, Matthew Brown. Editing comes from Patrick Edwards.

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