Non-Dilutive Funding w Traction Conference Cofounder Lloyed Lobo – Ep. 10


Lloyed and his team help companies access capital through non-dilutive government tax programs – mainly R&D and SRED programs. For startups and established companies alike, this is like getting free gold for being well organized. The catch is you need to be proactive to ensure your getting the best bang for your buck when it comes to recovering money from the government.

In this episode we talk about the tax programs available to Canadian and US companies. We go further to understand some of the best ways to access this capital. As well, we hear about his work with Traction Conference and some of the things he’s learned working with some of the biggest names in technology. 

Both tax credit programs and conferences are important parts of your financing strategy. What Lloyed shares here could open your doors to thousands of dollars or more. Enjoy!

Lloyed Lobo on:

Boast.AI – Website
Traction Conference – Website
Inventures Conference – Website

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* This is a software-transcribed article.

Cory Cleveland [00:00:57] On the line I have Lloyd Lobo of Boast.AI as well as the Traction Conference. Lloyd thanks a lot for taking the time especially being on vacation in Hawaii. This is great.

Lloyed Lobo [00:01:06] Yeah. Thank you. Thank you for reaching out and I’m so excited to get into it.

Cory Cleveland [00:01:11] So it’s it’s an interesting. Well it’s interesting work you guys are doing with Boast. As well as Traction Conference, but what I’d like to do is start off with a bit of a an elevator pitch on yourself. What’s what’s your background and what brings you into the work you’re doing now?

Lloyed Lobo [00:01:27] Yeah definitely. I’m a software engineer by education. Allthough I live in San Francisco, I grew up in the Greater Toronto Area. And I’ve studied software engineering in Ontario which is where I met my co-founder Alex Popa and in 2005 or so I moved to the US worked in product and and growth at a number of venture backed companies and around the 2011 timeframe, my co-founder Alex had worked in engineering and Johnson and Johnson did a startup and then ended up studying accounting and was working at KPMG on their SRED team.

Lloyed Lobo [00:02:05] And around 2011 late 2011 he said Hey man the processes in the accounting firms and how SRED is handled today is very manual. And it is very labor intensive and it’s usually accountants talking to a company’s CTO to ask them “Tell me what you did last year”. And these people usually come in at the end of the year and spend a lot of time, to spend a lot of time with the company’s CTO taking up their resources and he’s like “there has to be a better way to streamline the processes” and that’s how Boast was born.

Lloyed Lobo [00:02:43] And you know, me and Alex have been best friends for a very very long time we’ve known each other for almost 20 years now. And so it was the perfect thing I guess. Soon as he told me I pulled around in the US to see if there was a similar program in the US which there were similar challenges and we started the company.

Lloyed Lobo [00:03:01] Alex was in Calgary at the time. His wife was in at a law firm and I was in San Francisco so it’s funny… I spent the first year first full year of the company shuttling back and forth between San Francisco and Calgary and almost everyone in the Calgary ecosystem thinks I am from Calgary in fact during that time.

Lloyed Lobo [00:03:23] I also ended up writing a column for the Calgary Herald called…

Cory Cleveland [00:03:27] Just just for the record I am one of those… I thought you were from Calgary.

Lloyed Lobo [00:03:32] Right right right right. So so I was writing a column for the Calgary Herald.

Lloyed Lobo [00:03:36] We were on the board of this startup Calgary organization that helped increase (inaudible) that and then it was acquired by the Calgary Economic Development but a lot of the Calgary did in the early years like Startup Weekend, Startup Grind were initiatives that we had started. The key thing there was you know we were two co-founders in a small nascent startup community… How do we how do we sort of learn from each other and how do we bring learnings as to bootstrap or self-funded founders. And we found the best way to learn and learn is to create an environment where other founders can connect with each other. And that’s that’s why we started doing what we’re doing. Obviously that that whole model is super successful with a thriving ecosystem in San Francisco. So you know as a part of our community give back. We said hey if we help enough people in the community get to where they want to go as entrepreneurs and be a part of their journey the business will come right.

Lloyed Lobo [00:04:37] And so that we took that give first approach and over the years we’ve been doubling our growth and customers just come to us. That’s a good thing.

Lloyed Lobo [00:04:48] I’ll get into the elevator pitch of Boast but the key thing here was like, You know when you start a company you’re lonely you’re alone on this journey. There are hundreds of entrepreneurs like us and I think the best way to learn is from each other.

Lloyed Lobo [00:05:04] And and so we’ve continued to build that community and now it’s thriving community of 20,000 plus entrepreneurs around North America under the Traction banner. And so we do Traction Conference in Vancouver and and all the profits from Traction Conference get donated to a non-profit and our partner Launch Academy and then we do regular CEO Summits in different cities. So we do two in Vancouver, two in Toronto, two in San Francisco, one in Seattle and it’s almost like well one or two a quarter where founders come together in a roundtable format over dinner drinks idea and and and and discuss their pains and their troubles, their business goals. And it could be related to getting sales getting customers and getting scaling the team, hiring all aspects of scaling a business.

Lloyed Lobo [00:06:02] I think that founder the founder of learning has helped us grow significantly over the years as as self-funded founders without taking VC money. So that was that’s been a huge part. I think of our growth and in fact I’m going to Toronto next week we’re running the Growth Conference in Toronto and a CEO dinner and then was partnered with Inventures in Calgary to do a track and Inventures as well as do a CEO dinner at and Inventures in a similar format CEOs and CXOs learning from each other. So anyone listening to this podcast we have a ton of conference tickets to Inventures on June 5th the 7th and Calgary at the teller’s convention center and I can make that available after.

Cory Cleveland [00:06:44] Absolutely. We’ll put that in a show notes.

Lloyed Lobo [00:06:46] Yeah definitely getting into the pitch of Boast, why us.

Cory Cleveland [00:06:54] Well let’s let’s talk about… I mean as I mentioned before I think both has got an outstanding brand and to your point you’ve built it around community and giving back. I’ve always seen the work you do around tax credits as it’s outstanding compared to the other service providers. But what are these tax credits how were they part of a larger financing strategy? What do CEOs and management teams need to know about them?

Lloyed Lobo [00:07:23] Yeah definitely. You know it’s perfect for me to contrast on both sides. Like the US and Canada as well because we do help companies with R&D tax credits on both sides of the border.

Lloyed Lobo [00:07:34] But you know as your company and you wanting to grow capital is a key resource and the best way to get capital of course is from your customers but not always you have that opportunity in the earlier stages where you can be entirely customer funded or self-funded. And so you need capital. And as you go to look out for capital there’s various sources you can go to angel investors you can go to venture capitalists and that’s going to dilute yourself a little bit and it could value yourself maybe north of 50 percent depending on how much you take over the years. And not everyone can be a venture backable about company because as a venture backed company there are some metrics that you need to display some aggressive growth goals right. So that whole process is very time consuming and imagine you’re a young company and you’re like OK I need to just focus on growing my business but I need capital and how do I do the Angel VC  run do I do like the bank run in the bank may not may or may not lend you money because you’re still earlier stage and you don’t have historical financials and then there’s this beautiful thing in Canada called government grants where you can literally fund about 60 percent of your R&D. And so in Canada the landscape is a few programs. There’s the R&D tax credit program SR&ED Scientific Research and Experimental Development it’s been around since the 80s and it’s to encourage innovation in Canada and the government to my understanding gives over four million dollars to twenty five thousand plus companies every year for developing new or improving existing technologies products or processes. It doesn’t have to be groundbreaking it doesn’t have to change the world. What matters is you’re advancing your company’s knowledge base and you’re overcoming technological challenges that you couldn’t resolve with solutions in the public domain.

Cory Cleveland [00:09:36] So like what’s that’s somewhere where I think a lot of us get tripped up on. What is what defines and what’s the parameters of that technological challenge that the government recognizes as or is willing to pay for or give you credit for?

Lloyed Lobo [00:09:52] Yeah. So the way I view it is say you’re you’re building software right. And this software needs to integrate with a third party system.

Lloyed Lobo [00:10:03] And let’s say this third party system has no documentation no API is this is your integrating with the manufacturing system that’s gone bankrupt. There’s no documentation there. Now you need to make the two systems talk but there is no documentation there’s no protocol and you need to write that communication protocol from scratch. Now you need that communicate you need your system to communicate with that manufacturing system at 100 percent. Because if you don’t it’s going to screw up the production line they’re going to lose productivity.

Lloyed Lobo [00:10:33] So anywhere where we see a technological uncertainty where there is no publicly available answer or solution like no open API no documentation no open code and you need to come up with their own solution and work through an iterative process to get through the end outcome.

Lloyed Lobo [00:10:51] That’s where there is SRED eligible committees on the high end you could be working with you could be you could be a company developing A.I. solutions. For let’s say a banking agent and this banking agent. Now if you if you’ve looked at banks or like call any customer support line they’ll usually root you 100 times… 100 is an exaggeration but several times each person will ask the same questions over and over again.

Lloyed Lobo [00:11:19] Well let’s see you now building technology to change that whereby your system is passing through voice video text and different data sources and providing real time insight to the end user. So when you call as a as as a customer of a bank or any service they immediately they recognize who it is what they want and what value to provide. Now it may seem easy from the description but on the back end there is a lot of technological challenges because any time you’re trying to apply machine learning to a voice video and text and parse those the types of data there’s all kinds of uncertainties and you don’t want to pull out the wrong inferences.

Lloyed Lobo [00:12:05] So really on the high end it can be complex robotics and could be complex pharmaceutical formulations. It could be a deep learning on the low end it could be integrations with third party systems or there’s no way for the two to talk.

Lloyed Lobo [00:12:18] But essentially if you’re building technology and you’re facing challenges which stops you dead in your tracks and you need to figure out how can I make this move forward that’s when you have some nugget of SRED eligibility to investigate.

Cory Cleveland [00:12:34]  What I heard from that is that it says in what I’m understanding from you. Is it safe when you run into trial and error and you are able to document that that that helps your claim. And I am I on on base there or in my off?

Lloyed Lobo [00:12:52] You’re not you’re on base but not entirely right. I wouldn’t use the word. Trial and error because trial and error almost is like not systematic and anything to this. I like to spaghetti in the wall when the real term there is systematic investigation or an experimental process where you’re saying OK I faced this challenge I need to get to Y now what I’m going to do is think through a few hypotheses and how to get there from like X or Y and I’m going to try them all.

Lloyed Lobo [00:13:26] And then if they work great if not then my hypothesis of failed and so worked through an innovative process that’s more or less the same thing. But to me a trial and error is like throwing spaghetti on the wall and make a systematic experimental approach is your thinking through each experiment.

Cory Cleveland [00:13:45] OK. And with that that systematic approach, What is the tax credits applied to? Is it the the time that went into the failed approach or is that the time that’s gone into the entire project that’s been scoped out in a systematic way?

Lloyed Lobo [00:14:05] So it’s mostly time that spent on the entire project that qualifies for the answer. Right.

Lloyed Lobo [00:14:11] So essentially what goes into it is that let’s dive into what you can think you can claim salaries, you can claim subcontractors and if you’re a hardware company or a non software company that’s using materials you can claim materials that were consume or transformed usually like things useful prototyping or if you’re manufacturing that test runs of scrap and so on.

Lloyed Lobo [00:14:32] So you can claim those now what are you looking at is one is direct development and then the other is supporting activities like Q A, Testing, technical requirements gathering, technical analysis and so on. Once you have this issue anything that’s sort of impacting that from your labor standpoint can be claimed.

Lloyed Lobo [00:14:52] So if that is you need project managers time to scope it out from a technical analysis perspective, you need a Q A person to test it. Those all can be claimed. In addition to direct engineering and development.

Cory Cleveland [00:15:06] OK. Do you have any examples of what kind of money is available and when I say that I mean it’s it’s how much. What percentage could be available to companies as they grow?

Lloyed Lobo [00:15:20] Yeah definitely. I’ll speak on Canada and then if needed we can we can dive into the US but there’s two categories here for the Canadian R&D tax credit or the scientific research and experimental development trend. One is a Canadian Controlled Private Corporation and this is where your a Canadian controlled entity meaning a Canadian resident or residents control or have a majority control of the entity and it’s private it’s not public it’s not foreign owned. It Is a non CPC this could be a foreign owned or a owned corporation so there is a distinction there.

Lloyed Lobo [00:15:57] So let’s call the Canadian controlled private corporation a CPC and the other a non CPC so CCP CS can get about 64 percent of the Army spend as a cash back about thirty two percent of contractors and then about forty two percent of materials and materials meaning not materials used in commercial production when materials either discarded scrapped or transformed or used in prototyping.

Lloyed Lobo [00:16:25] I’ll break these numbers down a little bit but what’s behind these numbers is for each dollar you spend on art and be eligible SRED eligible salaries you get fifty five cents as proxy overhead to account for overhead.

Lloyed Lobo [00:16:39] So once you factor all of that in putting the federal percentages at provincial percentages more or less works out doing the sixty four percent range on R&D salaries these are T4  salaries and works out to about 32 percent in contractors and about 40 percent on materials for CCPC.

Lloyed Lobo [00:16:58] The beauty of this for a Canadian controlled private corporation as you get this as a refund check from the CRA. Now if you’re a non-refundable if you’re a non CPC meaning a foreign owned entity or a foreign owned entity or sort of a public corporation then what you get back is 36 percent on salaries 18 percent on contractors and 24 percent on materials. This is not a cashback from federal. It’s mostly a tax credit to offset income taxes and you can carry it back three years or carry it forward indefinitely.

Lloyed Lobo [00:17:39] Now some provinces have a provincial amount that might be refundable and so that’s that’s for a public company. That’s that’s for non CCP easier. OK. The the provincial amount is refundable in Ontario and Alberta and a few others but yeah. But those amounts are very small. Right in that 8 percent or so range but 8 to 10 percent range depending on the province. And so largely the non CCPC rates are non-refundable large. And then the CPC ones are refundable.

 [00:18:16] But if your a profitable Non CCPCs, then of course you can offset income taxes if you’re not. Then you can carry it forward if you plan to do run revenues and grow in Canada. A lot of the sort of non CCPCs seats are many of the non CCPCs seats who are sort of foreign owned entities just doing an R&D centre in Canada for then the unfortunate thing is if they’re not running their revenues through Canada then the chances of them being immensely profitable are very low. I’d be having huge tax liability in Canada are low so chances of them using the bulk of those credits are also lower. Versus say a public company or a Canadian entity that’s a non CCPC via a public vehicle then they’re going to post profits and that’s probably going to grow. That’s the goal and so they could offset income taxes down the road.

Cory Cleveland [00:19:11] I understand what you’re saying there and I mean we’re talking percentages of it. I think there’s no doubt that it can add up and it can add up quick on both sides of the equation from being a CCPC to to a nonCPCC. So I mean those numbers can be big but when you when you say systematic approach one of the things that we’ve run into the past was we didn’t approach our tax credit program within our companies on a systematic way and ultimately it was just a big waste of time. There’s a couple of things one understanding you have to be systematic in how you do it is is crucially important but that can take a lot of time and as a whole as a pitch for Boast you are taking a more software driven A.I. driven approach now. Can you talk about that and how how if I was a CEO how could I maximize the benefit of working with you?

Lloyed Lobo [00:20:10] Definitely so the one thing I would share based on based on data that I have right. One of the biggest reasons why claims get denied in the CRA audits and CRA audits at different levels. They could do a first time claim advisory service where they just give you advice on how to do things better for the future. They could do a financial audit. They could do a technical audit. They could do a full audit. They could do a desktop review where they just review it and then approve or ask for more information.

Lloyed Lobo [00:20:42] And the number one reason why claims getting denied or reduced in audits is because there is no documentation. There is no proof showing there was systematic process in play and the technological uncertainties couldn’t be solved by information in the public domain. And the only way to get around that is to be proactive with their schedule. I mean this is this is where where we help is when we started the company. Our first approach was hey the typical consulting firms they hire accountants to do this. What if we hire engineers. Engineers can easily analyze a company’s project management data and then speak with their CTO is and quickly flesh out what qualifies and what doesn’t. And we’ve seen huge success in our audit rates being significantly lower than industry and huge successes there. Then the next step was well what do these our technical PMS or our shredded leads do on a day to day basis. And they’re analyzing data. They’re talking to a company’s CTO and so on proactively through the year.

Lloyed Lobo [00:21:49] How do we make this better? And so a few years ago we started building technology and so are big pitch is Boast can automate and increase your SRED claims by combining proprietary software with smart engineers and CPAs. So getting more money and more refunds for less time invested on your team.  And less fees right. The biggest challenge most companies have is they want this money but they don’t want to spend all their time. If you’re spending all your time as a company CTO and your dev team then that’s taking away from your company’s priorities.

Cory Cleveland [00:22:24] It’s a rabbit hole. I mean you can go down there and find out that there’s nothing there for you.

Lloyed Lobo [00:22:30] Exactly right. And then and then the other piece of it is if you’re a venture backed company your board meetings don’t center around SRED. They center on growth and product features rolled out and customer retention as it should be. And and so on and revenue growth. So if you go and say hey my dev team spent like last quarter pilot compiling together the SRED claim it’s just going to be a weird conversation. And I. Have been on the other side and so by combining this software approach and smart engineers who can easily understand the tech companies building we’re able to streamline that SRED process so the software we build connects with various technical project management systems and financial systems and pulls that data in real time and then we’re building technology to automate the what we’re qualifies and what doesn’t extrapolate time tracking from it and so on.

Lloyed Lobo [00:23:26] So this data comes in proactively real time through the year are our technical PMs and shredded leads analyze it. So we’re not sitting at year end and looking back and seeing what work qualified let’s try to find it and let’s go through this wild goose chase exercise. And on the on the other beauty the other beauty of this is say we got a client that comes at year end we have the opportunity now to integrate with them and suck all their data and for the past year. And so now like there’s there’s two situations where you start on Jan 1 and let’s say a fiscal year end is December. So you need to filed by June which is your set filing deadline. If you’re proactive. Yes. Our software is collecting the data proactively we’re reviewing it proactively. Let’s say you’re working with another firm that comes at the end of the year or you sign them just at the end of the year then they’re going to have this long gooses of an exercise and imagine all that work and you should have been over a year is condensed into a couple of weeks makes it very very difficult. Now we have this opportunity to come in suck the past year’s data segregated and make life easy. So we’re getting these claims done in significantly lower burden our clients resources and getting them more money. And that is that is the mission here is how can you use technology to streamline a process that was traditionally manual and then and use those learnings and apply machine learning to it to make it smarter and smarter and year to year three or four year five. And that’s that’s the goal.

Cory Cleveland [00:25:00] For four companies looking to go down this path and to access these tax credits and understanding that there’s a lot of work there. Are there providers other than yourselves who have like best niches they’ve really carved out good niches where they know an industry better than anybody else. I mean I understand Boast… I mean you’ve got a great footprint in the early stage startup technology space but are there other areas where maybe you’re not as strong or how does the how does the competitive field look and what should a CEO look for when looking to engage a tax credit firm?

Lloyed Lobo [00:25:39] Yeah definitely and I’ll I’ll give you sort of a maybe a longish answer but we don’t normally work in the early stage tech. We have clients ranging from the seed stage to all the way to IPO. Right. And because we also do R&D credits in the US and the US on any credit is significantly smaller the Canadian it forces us to work with very large venture backed companies. And we’ve got clients and pharmaceutical and biotech and agriculture and software and hardware and so all over the gamut. I think the key thing is when you’re looking for a provider you need to understand their process. You know as a founder you need this money right and you need also to do an analysis of how much time it’s going to cost you. Right. So there’s a few things we see over and over. You have the option to do it yourself. You have the option to do it with a consulting firm or you have the option to do it with someone like us with a software driven approach.

Cory Cleveland [00:26:34] Now as a founder you need to analyze one what is somebodies process involved if the process is I’m going to come in at the end of the year and like go through this exercise and ask you all these questions then that’s one flag. The other flag is if they say do all the write ups you identified for me what qualifies. Well then why do you need a consulting firm. Why do you need someone else to help you out with it. May as we’ll do it yourself. So I think the key thing here is who’s going to do the who’s going to identify what qualifies and what doesn’t. Who’s going to write up the reports and carry through all the burden. And who’s going to help defend that in audits and back it up with putting together the whole package. And the last piece is how proactive are they. Because it’s my fundamental belief that if I’m coming back at the end of the year end of the year it is very hard for people to remember especially a company. Technology companies CTO or work with pharma companies they’re more there better documented. But in general if you’re a company’s head of innovation in technology it’s hard for you to remember. All right.

Lloyed Lobo [00:27:43] And so we’ve seen these three buckets where one you’re working with somebody who doesn’t understand the program say they understand the program but they don’t understand the technology or buildings. And then they got to do all this manual work. And that coupled with coming at urine it’s a huge exercise. The first one is what the other bucket is companies doing it themselves. What I find is when people are doing them do it themselves usually burden someone on the tech team to do this and that person if it’s a fast growing company that person’s priorities pushing out features and product to grow the business as it should. So what we find is people who do it internally typically don’t claim everything they should. They claim the most obvious stuff they and they leave a lot of money on the table.

Lloyed Lobo [00:28:28] So those are the two buckets is like do it yourself do it with an accounting consulting firm or do it with someone like us. And know if you’re really great at it you have a great documentation system in place where you’re tracking everything proactively through the year and your year end approach is just as much as hey let’s just compile everything and put it together and do the write ups.

Lloyed Lobo [00:28:49] If you’re on top of it great fantastic. Save yourself the hassle do it yourself but if you’re not then leveraging someone to support in a proactive way throughout the year would be helpful. The key thing is how much money can I get. How much time and it’s going to take from me and what is the risk of an audit because it’s not compiled proactively versus scrambled together. I think those are the key things because if you’re going to get a lot of money what is going to take you all your time and you have the chance of losing it all in an audit. Then why even do it?

Cory Cleveland [00:29:22] I gotcha. Now one final question to wrap this up because I really want to get into your work with traction but when when engaging a firm what kind of fees what are the ballparks or what’s that spectrum of fee that should be charged for their work?

Lloyed Lobo [00:29:40] So I think the key is value for money right. And what we typically find is we work on a sliding scale and we take a percentage of the claim. Typically can be as low as 5 percent and we get into fixed fees and can be upwards of like 15 percent.

Cory Cleveland [00:29:57] And that’s that’s what we see. Right. And the key thing is not so much on a tier by tier or dollar by dollar but like what is your effective rate how much are you paying. Is it fair. And what would I be able to get that same amount if I did it myself. And if I did it myself how much more time on my spending from my internal dollars. It was costing you one whole man hour and they’re conservative because that’s not there have not been hundreds of claims before. So they’re going to claim less and you’re costing one person so if you look at it from that perspective then you can come up with a with a fee structure with your provider that makes sense for you.

Cory Cleveland [00:30:38] Excellent, well thanks for that. I mean it’s. Yeah I definitely think that it’s a world that’s perhaps underutilized or misunderstood.

Lloyed Lobo [00:30:48] Definitely definitely. Yeah. And yes it’s complicated and there’s a lot of people doing it. And the key thing is how do you innovate to constantly improve the process streamline it so people are spending less and less time and focusing on their business. And that is our number one approach and goal and in fact every client of ours has raised venture dollars whether it’s in software or pharma or any tech company that’s growing really fast. Their number one directive is please do not chew up my team’s time because if they have to spend weeks of their time on this then the money is not meaningful to us because we have millions and tens of millions in the bank. Yeah absolutely. Our priorities are against the milestone for which I raise money not shred or U.S. R&D tax.

Cory Cleveland [00:31:41] Absolutely I hear you are not. There is a balance there. I know what I was open to do now is switch gears and talk about Traction Conference.

Cory Cleveland [00:31:54] The reason why I want to do that is because Traction as I understand is is a bringing together of some some outstanding minds discussing cutting edge tactics strategies and go to markets you know anything in and around sales and marketing and building outstanding product to and scaling companies quick. I mean all of these things in my opinion are very applicable to the world of finance as well it just happens when you’re doing sales and marketing for a product. It’s very similar to what you need to do to engage investors.

Cory Cleveland [00:32:30] So I’d love to hear about traction conference how companies are using it. Some of the successes there and then maybe we can drive into some of the cutting edge strategies you’re seeing companies deploy these days and what you’re learning from having co-founded that.

Lloyed Lobo [00:32:45] Yeah definitely so traction is a conference hosted by Boast and in partnership with our friends at Launch Academy which is an incubator non-profit incubator out of Vancouver and we started in 2014. Prior to that we were doing a lot of activity in the startup community. And the reason for that was as two founders self-funded and don’t have advisors from large venture backed large venture capital firms and so on. Okay let’s build our own community. The only way to do that and learn is to help other people. And so we started doing meet ups and smaller events around Calgary like things like Startup Weekend and Startup Grind and other meet ups through the year and eventually that transformed into traction which we the first edition of it was in Banff and we had Red Hat and VM where SEO is Twilio CEOs and the Red Hat was one of the largest software acquisitions and we were two people at the time and we didn’t realize that putting off that conference presented by Boast was a huge brand builder for us.

Lloyed Lobo [00:33:49] But we continue to do that and then stemming from that we started doing it every other month. CEO Summits in different cities wherever we do business with the same idea that bring together smart people and this could be smart founders from a company that’s IPO or smart founder that’s just starting up what if they’re selling to similar markets we team them up to have roundtable discussions where there’s no press there’s nobody its founder the founder and they can share the ideas. I could you know I’ve learned a ton myself from building this community.

Lloyed Lobo [00:34:22] Things like building out our inside sales team or building out or go to market process or our strategy is to scale beyond just our tags new markets. So on. So much you can learn just by talking to other people who’ve done it. And we’re like how do we scale this and bring value to the community where we do business and that’s been our number one goal is if you look at the values core values of both cities treat your colleagues right because if you treat them well they will treat your customers well and they will behave well in the community and support the community. So now that was number one. Number two is do right by your customers because they are your business. And third thing is supporting the community wherever you do business.

Lloyed Lobo [00:35:08] So those three C’s are key and that’s stayed with us from two people to now we’re almost 30 people and if we literally more than doubled our team since last year. But those values stay and so we do traction in Vancouver we’re helping out with Inventures in June and then we’re going to go to conference in Toronto and then Sastr in San Francisco we help out with the key there is literally there’s different areas of business you need to finance, you need to build a team you need to maintain culture as you grow fast, you need to build a sales team you need to be a marketing team… There’s so many facets of growth in Traction that you know it you can read but you can also interact with other people who’ve done it and I feel the best way to learn for me is interact with other people sort of unofficial advisers and that’s why we started out traction and it’s done really well.

Lloyed Lobo [00:36:00] It’s a seven time running it and it’s the top rated conference and it’s a two day event. The main stage which is second day is rapid fire keynotes fireside chats with the top CEOs have either gone public or build billion dollar companies.

Cory Cleveland [00:36:18] There’s no doubt you’ve got a mega lineup. Some of the biggest names go in.

Lloyed Lobo [00:36:22] Yeah. And every year it’s been. It’s been like that. We don’t pay any of the speakers and the key belief here is all the speakers truly want to give back and support community.

Lloyed Lobo [00:36:30] So that’s the main stage and sort of rapid fire 20 30 minutes tell me like how you got from x y like last year Sendgrid SEO talked about how you maintain your culture while taking public and then shortly thereafter was acquired by Twilio for a few billion Twilio CEO speak about his frustrations as a founder previous to starting Twilio and how having conviction for your customer will help you build a long term company and think and many many areas things like that like how to raise and how to raise capital and what’s the right stage for the right type of funding and where you need to be at. And so on.  Then day one of the conference there’s multiple tracks which are more deep down. There’s a CEO summit which we do on the mountain we was known from where people are interacting with each other.

Lloyed Lobo [00:37:18] First half is roundtable discussions over lunch and then people break into groups and hike by axe throw and different activities and then really get to know each other.

Cory Cleveland [00:37:31] What have you learned most from putting this together? I mean it’s an interesting seat to be in bringing all these leading minds together but what have you learned most from doing this?

Lloyed Lobo [00:37:42] I think the thing I’ve learned the most and I think it’s been most valuable for me is there is there is nothing that can replace human one to one in person connections right. Well we may. Most of our clients we deliver service online and hope our phones I call that online. But there is nothing that replaces human one to one connection and just looking at people that they have learned something that made a connection to something because of this community we built is probably the most satisfying thing for me as an entrepreneur and I’m glad we’re able to do it because of Boast. Otherwise it wouldn’t be a reality. Just the other day I had one of the conference speakers from 2015 reach out to me thanking me saying you attended the conference and he was able to meet a large venture capital firm and he’s now a partner there. Those kinds of things. Well that’s that’s a nice e-mail to receive. Yeah. And then he invited me over to their office. Giant office in San Francisco for lunch and it’s one of the largest funds out there. So things like that make me really happy when they say you know what I was able to walk away with one piece of value because of something you did. And I think I think that is the key thing of all of this right of building a company building a business essentially. It takes a community takes a village it takes a nation to build a company. And if we can be a part of people’s success I think the karma comes back to us and we all grow. And also just learning from people’s successes and failures helps us go on a good path or avoid that.

Cory Cleveland [00:39:29] I think you make a really good point there that we I don’t think enough management team and CEOs put… They don’t put enough weight on the fact that it’s a village who helps build these companies. And Brady Fletcher when I interviewed him he said the exact same thing for public companies… You need partners you need support you need advisors whether they be formal or informal. It takes a village to build a company. And so the work you’re doing here I can see how that plays such a vital part and the one on one and how important that can be.

Lloyed Lobo [00:40:04] I wouldn’t you know the one thing I want to add here is one of the best ways I’ve found for my personal growth and business growth and us as a company is growing and helping people uninitiated in the business community.

Lloyed Lobo [00:40:17] So you know I’ve met some of the best friends I know and best advisors I know but just saying hey is there anything I can help you with. Not just asking but being very proactive about it and saying hey I see you’re doing this. I have skill sets that can help you accelerate a portion of that. Can I help you. And they’re like great run with it and then you provide that value and now they’re your advisor for life. And I’ve done that.

Lloyed Lobo [00:40:42] We’ve done that multiple times over in different cities without any financial outcome. But what it pays back is like in hen multiples in karma.

Cory Cleveland [00:40:54] I feel like that’s becoming a the new age rule. It’s it’s you know do unto others how you want it done yourself. But now it’s it’s going give and then give more and it’s going to come back to you in multiples. I find that that is. I mean it’s huge it’s really great advice and it seems to be coming the way to do things.

Lloyed Lobo [00:41:18] But don’t be like contrived about it.

Lloyed Lobo [00:41:19] And so we’ve been doing it since like I’ve been doing it all my career from from from university times in Europe. If you’re deliberate about it and it’s a business strategy that’s when it goes stale. Just do it and don’t expect a return because that’s how you are culturally or that’s how you get joy. And if you followed that then you know things just come around. I feel like things that we’ve done three four years ago are paying off right now that I never thought that I’ve just written them off.

Cory Cleveland [00:41:51] And probably didn’t have an expectation for it to pay off. Just going out there and helping.

Lloyed Lobo [00:41:57] Exactly.

Cory Cleveland [00:41:59] With that I mean there’s you could even draw a comparison to how how software companies grow now. There is a freemium model. You go out there and you provide a ton of value upfront a ton of knowledge, education before solicitation is something I often say to CEOs who are looking to engage investors in the public markets. With some of that and with the work you’re doing with these cutting edge companies in and around the conference we can talk about customer acquisition, onboarding, retention,  vitality and network effects all of these things fit into building a product, building an audience and ultimately selling selling that product or service winning delivering value and increasing value.

Cory Cleveland [00:42:46] Is there any learnings there that you could attach to how to engage investors because there’s a very close simulation or relationship between the two they’re selling a product or selling your shares?

Lloyed Lobo [00:43:00] Yes so I mean in terms of. You know I the my key advice is don’t view anything as transactional.

Lloyed Lobo [00:43:09] Everything is a long term journey especially your investor relationship it’s a marriage. If you think you’re like in a marriage with your co-founder. Think again once you start raising money. It’s a long term relationship. Don’t your board meetings. If you have a can and some monthly board meetings then you’ve got to tolerate that every month. If it’s a quarterly you got to tolerate these long community meetings. Everything is a long game. Don’t view anything as a transaction. Yeah you may want the money and you’re desperate for it and any money. People often say oh you know what any money is money. Well if they’re if they’re just giving you money and have zero expectations and you can do whatever you want take it. But if it’s going to be a relationship then you’ve got to view it as that.

Lloyed Lobo [00:43:55] Don’t view anything as as transactional that’s about the worst thing you can do and so go and meet people talk to them See if you culturally align you have the same values. What a good outcome for them might be and if it aligns with what a good outcome for us. And you know ask them questions like if X Y Z had to happen. How would you view it? In that in the sense of what if I had to make X Y Z decisions and walk through the negative walk through the through the positive and then walk through that mediocre and you know the best way I guess to assess investors is talk to people who they have invested in. Sort of like a back channel reference check.

Lloyed Lobo [00:44:39] But you don’t have to do any of that if you just know the investor over years. Right. And so spend time building relationships like you like you’re doing the community right and then you don’t just do your if you want to just work nine to five and you know not build not focus on sort of a long term play then just do that. But like if your priority is you want to build a big business and you want to build a community then get to know people. Right. Because people will connect to you. And as you know more and more founders and you help out they’re going to connect you with the people they love. And that’s going to be way more meaningful than running a transactional process.

Cory Cleveland [00:45:23] I hear you are not and I mean that’s that’s advice that comes very compounds in the sense of start early and build relationships. Don’t just look for a check. Exactly. Exactly. Excellent.

Cory Cleveland [00:45:36] Lloyed, I’m looking at time here and want to be respectful of yours especially on vacation between boast and the companies you work with there and the potential companies there or the traction conference and things people could learn from that. Do you have any final thoughts that you’d want to share with investors whether they be public companies or private companies? Excuse me not investors are CEOs public or private CEOs? Any final final takeaways you’d like to share with them?

Lloyed Lobo [00:46:04] I think the key the key thing I’d like to share is you know your why. Right. Like you know be have conviction to echo Jeff Lawson from twelve CEOs that keynote from a few years ago is I have conviction but the customer you’re serving in the product you’re building. And then let that be your guide and build a business because they know your why to what you’re doing and don’t do it to look cool or because startups are cool or to raise money and be a hot shot CEO you do it because you really empathize with your customer and you have conviction about that about that customer on that journey because it is it is a journey right. And if you do that then you will build genuine relationships. And so for us that is the three c’s like colleagues, customers and the community. So you don’t find your three C’s or your values there and build your company to align with those values and everything else will follow like focus on building a great business and then solving a pain point then then genuinely empathizes with the customers you’re going after and have conviction about them and the money and funds and everything else just follows. I think.

Lloyed Lobo [00:47:21] Awesome. I hear you on that. Thank you very much for well for sharing both the tactical and some of the most philosophical ways you’re approaching business and what you’re learning from all the companies you’ve been working with. So I really appreciate your time.

Lloyed Lobo [00:47:35] Thank you very much for doing this and I look forward to seeing how it turns out. Have a wonderful rest of the day and if I can help with anything please don’t hesitate to reach out.

 [00:47:45] I think that’s it all. I’ll put your contact information in the show notes and where people can follow your work. Really appreciate it. Thank you very much. Thanks. Have a good one. Bye.


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