Balancing Business Growth, Family, and Hockey Ownership with Kyle Braatz - Mark MacLeod

June 10, 2024 - Marina

Balancing Business Growth, Family, and Hockey Ownership with Kyle Braatz

Join me for an inspiring conversation with Kyle Braatz, founder and CEO of Fullscript, as we delve into his journey from competitive hockey to disrupting the healthcare industry.

Discover how Kyle’s background in sports fuels his entrepreneurial spirit and the lessons he’s learned about teamwork and competition along the way.

Explore the Transcripts for Key Insights from this Episode

Mark MacLeod:
This week I sit down with Kyle Braatz, founder of Fullscript. I first met Kyle back in 2012 when I was a venture capitalist. Kyle has quietly gone about building his company to 1 billion in revenue. Along the way, he became a part owner of an NHL team, but he is still the exact same grounded human that I met twelve years ago. Lots of great lessons in this chat.

Kyle, welcome to The Startup CEO Show. It’s a true pleasure to have you here today. How are you doing?

Kyle Braatz:
Hey, good, man. Thanks for having me. Looking forward to it.

Mark MacLeod:
Yeah, it’s good. The last time you and I saw each other in person was a long time ago. I feel like maybe 2018, 2017.

Kyle Braatz:
That’s it. It was right before we did one of our big acquisitions, or right after, I can’t remember, but I know I was speaking to you about it and getting some perspective.

Mark MacLeod:
Yeah, that’s right. Yeah. And I definitely want to talk about that. But maybe before we jump into questions and I guess maybe just further background, you and I first met when I was at Real Ventures in the super early days. I remember being in Notman House. I feel like it was 2012, so it’s been a real journey for you and I’m really excited to get into that and learn more. But maybe just before we get into questions, just tell folks what Fullscript does.

Kyle Braatz:
Fullscript services over 100,000 practitioners and about 6 million patients. And we’re the leading tech platform for practitioners to prescribe and manage treatment plans for optimal health outcomes. So we’re really focused on the world of whole-person medicine.

Mark MacLeod:
And does that include prescription drugs or is it’s everything else?

Kyle Braatz:
It’s basically everything else, yeah. When you think about going to see a practitioner and they’re looking at the root cause of what’s going on, and they’re saying you may need a pharmaceutical, but that pharmaceutical may deplete nutrients, and you need some supplementation to support that. You need to change your diet, you need to exercise differently, you need to change your lifestyle. All of those different components that are going to help someone get better, we take that component and make it really easy for the doctor and for the patient.

Mark MacLeod:
Amazing. That to me is the most important component. I’m actually not a giant fan of Western medicine and try and avoid it whenever humanly possible. So it’s great to see that there’s a platform there for a natural alternative.

Kyle Braatz:
Often it should be kind of the last resort, right? It’s like, figure out that root cause, and almost nine times out of ten, it’s something that we’re doing to ourselves rather than something being done else… So I think it’s the way to go.

Mark MacLeod:
So, as I mentioned, you and I first met very early in my days as a VC, and ironically, you actually skipped venture capital. I think lots of folks who are starting companies just assume by default, oh, I need to raise capital, I need to raise venture. I think venture takes up a disproportionate amount of oxygen in our headspace for us because we just think that’s the thing and you skipped it. So, yeah, talk to us about that.

Kyle Braatz:
That’s right. I think when I first started the company, kind of the allure of venture was there. You watch This Week in Startups, and you’re like, okay, that’s what you’ve got to do. And then I think when we identified the opportunity, so if I back up and describe the opportunity that we identified and the problem in the market, and then how we went about trying to solve it, I think it’ll frame up why VC didn’t work for us. So back in 2012, seeing the tailwinds behind whole-person medicine, what I described to myself as an entrepreneur, made logical sense. Like, this is the way health care should be delivered. Whole-person medicine should simply be medicine. That’s the future that we see.

In 2012, I don’t know if that future was seen by everyone else, but the problems that we identified was that whole-person medicine… There was literally no infrastructure to support it. So you think about the doctors that are out there, they’re taking 25, 30 minutes to just figure out what to recommend, right? Because they’re looking at all the research.

They’re trying to figure out what products, all these different components. Then instead of delivering an e-prescription like they have in traditional healthcare, they’re writing it on a piece of paper or they’re putting it in this PDF or this email, and it’s time-consuming there. Then they’re giving it to the patient. The patient has this treatment plan… I remember when we first started, I was speaking to someone battling cancer who was following an integrative care protocol, and they said, following this protocol is like a part-time job.

So again, you get this protocol as a patient and you have all the anxiety around, where do I go get this product? Am I following it appropriately? And then you lose the complete feedback loop with a doctor. So it’s just so fragmented and disconnected and there’s no infrastructure. So we said, okay, we can solve this problem. And we looked at solving that problem.

There’s kind of two paths we could have taken. One is to do everything so really be the Fullscript on day one, which I think might have been a little bit more enticing to VC, but for us it was like, no, there’s one core problem that is really a large problem for these practices. Let’s focus on solving that really well and gain market share and then have the right to basically go into these other adjacencies.

Mark MacLeod:
If I remember correctly, sorry to interrupt, were you at a dispensary on day one? Like I seem to remember that was the thing.

Kyle Braatz:
Yeah, I think on day one we just basically built Shopify with the backend distribution built-in, and realized that actually, practitioners don’t want an e-commerce store where they have their own brand, their own payment processor. We didn’t listen to our customers at all, and that was kind of the identification of them needing a clinical tool. And so we actually rebuilt the software from the ground up.

But I think being really kind of verticalized in this market of practitioners and within being a clinical tool for supplements and nutraceuticals and professional grade supplements, I think from a VC lens, the Tam story just was really hard to resonate. And every time I said it, it almost felt like, I know there’s going to be a lot of friction here. And so as I started to feel that friction, I’m like, this just isn’t going to work and I’m going to be wasting cycles.

And I think the other thing that we identified was the market we were entering was so niche and so unsophisticated when it came to technology. And building a great user experience that the unsexiness of it all was like, I feel like we can do this in an extremely capital-efficient way in order to get market leadership. This focus on really good product and really good customer support that no one else has in this market, because there’s really no leader. We can be the market maker with very little capital, especially with the co-founders I had.

We were the kind of trifecta of myself, a front-end developer and a back-end developer. We could get to the market really quick. We could be in revenue on day one. So that was the approach. And we just realized VC wasn’t right for us.

So, the other side is before I started Fullscript, I’d started an animated video company. So as we were starting Fullscript, we had the animated video company. We put a CEO in place and any of the dividends we’d get, we’d pour into Fullscript and all of our credit cards. So we self-funded with whatever we could to kind of get it off the ground.

Mark MacLeod:
You know, it’s funny, you thought the Tam was too small there. That’s actually the number one reason why people were rejecting Shopify back in series A is everyone thought that the Tam was too small, right? Well, that was wrong. (laughs)

Kyle Braatz:
Exactly. When there are over, like millions and millions of merchants now and powering commerce around the world. We do have a similar story. When you think about Shopify, they’re there to empower merchants to build great companies and sell products. That’s (the same) for us. We’re empowering the best practitioners in the world to deliver the best care in the world. It’s a very similar B to B to C model.

Mark MacLeod:
So, even though I’ve known you for a long time, I decided to throw you into Google last night and came up with an article written when you won CEO of the year in Ottawa, I think in 2022. And there was a quote in there that I’d love for you to expand on, where you said that this has been a transition from entrepreneur to entrepreneurial CEO, which is a very different role, and that completely resonated with me. But I’d love it if you could speak to that.

Kyle Braatz:
Yeah, I think when you’re in the early days and you’re an entrepreneur and you have no scar tissue, no experience, you’re chasing every shiny object. You really don’t have any operational rigor at all. It’s all gut feel and intuition. As things evolve and the business changes and leaders that you’ve had in certain positions, you start to grow out of them.

And you have to get to this place where you have to say bye to co-founders, or you have to realize at certain points in your business, an executive that got you from… or a leader that got you from 1 to 100 is not going to be the person that gets you from 100 to 500. And so it’s just a different type of mindset that you have to move from every day just blocking and tackling to really seeing how you’re going to scale.

But you never want to lose that kind of founder mentality, right? So I think that’s actually what makes the entrepreneurial CEO a little bit special, is because you stay connected to the front lines. You’re still in the details enough. You still use enough of that gut intuition and vision that most CEOs don’t come with. I also think you don’t have the ego. I’m still an entrepreneur before I’m a CEO. So I’ll always do what’s best for the business. Even if the best for the business was me leaving the company, I’d be all up for that, because it’s all about building something great at the end of the day, as a builder and a founder.

So, I think that the entrepreneurial CEO is a bit of a competitive advantage as you learn kind of the scale and then the ability to scale and operate compared to the early days where it was very erratic. There’s still erratic stuff going on and you want to keep a little bit of that, but not at the same level where every day you’re wondering if you’re going to make it or not.

Mark MacLeod:
Right. Well, it’s no shock that the biggest outcomes tend to be founder-led, start to finish, right? There is a special magic there and… I feel like it was on Twitter or something. Kind of recapping Fred Wilson from Union Square Ventures definition of the CEO role. This is like, from way, way back where he says like three things, basically communication, building the right team, and never running out of money. And I kind of talk to my CEO clients about that all the time, trying to get them to raise altitude. And Toby actually weighed in and he said, yes, but you still have to go deep into the weeds all the time, which completely reinforces what you’re saying, right? Which a professional CEO might not do.

Kyle Braatz:
And it’s trial and error. You kind of learn, right? At first, when I started scaling and bringing leaders in who’ve scaled before, kind of the right next person to bring in, a lot of my expectations were like, yeah, I should step back, I should get out of their way. And there’s this pendulum of moving back and forth until you get into the center and you know exactly when to do that and when not to, but it takes some trial and error, like anything.

Mark MacLeod:
I see that a lot. Right? You hire someone from the big company and a lot of CEOs, you know, have… You’re going to hire someone who’s better than you in that function, and then you have this natural tendency to defer to that person. But they’ve never operated in your company before. They don’t have your context. I don’t know. I’ve got a pretty spotty track record with people who come from big public companies because their definition of execution is different. It’s not. I’m going to put my arms in the pile of shit. I’m going to hire a bunch of people to put their arms in the pile of shit, and I’ll oversee them, but very different definitions.

Kyle Braatz:
I think it’s because we always think a lot of us will think way too big on the hire. So every time I’ve thought, I’ve got to get someone who the company will scale with forever, versus I need someone who’s like, ten yards ahead of me, who’s just done this, and I’m okay if in one year we grow out of them. That’s fine, because they’re going to get the job done now, they’re going to do their tour duty, and I see potential for them to scale. They never have, but they’ll be there.

When you start trying to get someone who’s 100 yards ahead of you, that’s when it just falls flat on its face. Because to your point, they come with a perspective of what they’ve done, and they’re not able to evolve to the scale and size and where you’re at today often, at least.

Mark MacLeod:
So have you gone through many iterations of your leadership team?

Kyle Braatz:
Yeah, I mean, I think along the road here, it’s almost like every… we’ve done a couple of big acquisitions, which naturally creates, and then they were like, almost every time we did them, they were ones where you’re transforming the company because you’re bringing two companies together that are almost the same size, and there’s two leadership teams.

And so when you go from, call it a 300 million dollar company to a 600 million dollar company, instantly you’ve outgrown some people and you’ve got to think about, okay, what’s that next type of leader you need? So, yeah, I think throughout that time, I would say that’s actually one of the things that has been the biggest driver of success is knowing… And the way we do it at Fullscript is it’s not like, “Hey, your time is done. See you later.” We celebrate those individuals.

And people know they’re coming in for that tour of duty and they know when they’ve got no point where I don’t scale. But they’re the owners of this business. They built it for the last two years to where it is. Couldn’t get here without them. And that message is really clear. And they participate in all the value we’re going to create in the future. So if you bring people in who don’t have egos and who know that what we’re trying to do is something great, and they realize that passing the torch is the right thing to do, it’s actually not as hard as you’d like. I mean, the early days were a lot harder because there was so much emotion.

When you’re in the trenches with your best people, literally tears are flowing at certain situations that you’ve had and then you have to say goodbye. That’s really hard. But as you start to scale and you set those expectations that that’s what Fullscript is all about and you do have to grow faster than the company. And if you don’t, but you’ve contributed, you’ll always be an owner here, you’ll always benefit from everything we’re creating here, and you’ll always be a Fullscripter. Is the mindset we have.

Mark MacLeod:
What have you done to grow faster than your business?

Kyle Braatz:
Yeah, I think the first deal we did was I was still kind of that really, I wouldn’t call it arrogance because I’ve never had, like, a big ego, but I still like this really scrappy startup entrepreneur. We do this merger, we’ve got two different executive teams. I get in the boardroom and I would be so abrasive and so, like, this is the right way and so direct to a point of, like, I was getting nowhere.

And I started working with a coach who was more focused on just the psychology of everything. And it was so basic and so common sense of things he would talk to me about and help me through that he really helped me go… He was probably one of the big kind of keys to going from that entrepreneur to entrepreneurial CEO is just saying, you don’t need to win that way. You can actually get everyone bought in by being a little bit calmer, understanding, having a little bit more empathy.

So, that coach, and then over time, I really felt like I understood the psychology side of things and I moved into a more tactical coach. So a CEO who’s been there, done that, still working as a CEO today so that I can really work through, “Hey, I’m facing this big problem. Help me work through this.” And that’s been super helpful when we got some private growth equity into the business, I do port code tours, so I have them connect me with all of their portfolio. CEOs go through, one, to get some feedback on being a portfolio company in growth equity and what to expect. Two, also understand how to deal with new investors and a new board. So that’s been super helpful.

I think also building a great board and looking at the board as a value add. I think often people look at boards and be like, this is annoying, this is frustrating, etc, etc. I look at it as like a forcing function to, one, make sure my shit’s together, and then, two, if I put the right people on the board, it’s actually a value add, and they’re there to support and help the company. And I talk to most of my board members just because I want to, because I need support and advice.

And if you build the right board, they’re there to help you. It’s a huge level-up. Probably the last thing I’d say is just, again, that founder mentality, like, you stay connected to the front lines. If you’re spending time with every teammate at every different level, if you’re doing skip levels, as far as you can imagine, you’re going to continue to evolve because you see the things in your business that most people don’t see when they lead from the ivory tower.

Mark MacLeod:
I love that. Especially your comments around the board, right? Because for most people, they dread their board meetings. It’s a thing they have to deal with. Whereas Jeff Lawson, unfortunately recently ousted from Twilio, he refers to his board as, like, his second team. I’ve got my management team, and then I’ve got my board. That’s my second team. And that’s what you want, right?

Kyle Braatz:
Yeah, 100%.

Mark MacLeod:
So there’s a few things that you’ve done that are not out of central casting, right? One is you skipped VC. Second, is you went more the private equity route, and then you’ve done what are ostensibly mergers, it sounds like, even though there was sort of one acquirer at the end of the day, which was you. And there’s lots that is written about VC, but I think private equity is a bit more opaque for folks. So maybe tell us about that journey and what it’s been like for you to have that relationship.

Kyle Braatz:
The background is we bootstrapped our company to a $50 million revenue company, and again, the principles were B to B to C, be really good at product, be really good at customer support. The business model is to get as many practitioners onto the platform as possible, build a tool or a clinical tool that they want to use with every single one of their patients, and keep their patients adherent. It’s a pretty simple model, and it kind of compounds on itself over time.

We were the software layer, the customer layer, and the user experience layer. But as part of our model, when a practitioner prescribes certain products, the patient gets them delivered to their door. And what we did is we partnered with professional-grade nutraceutical and supplement distributors to make sure that we could dropship these products to the door.

So the first kind of deal we did was very focused on really looking in at, okay, the economic model doesn’t make sense. Like, we can’t build a good economic model if we don’t own a little bit more of the experience. But most importantly for us, it was like when we were losing touch with that user experience, we wanted to own the customer experience from end to end, like we had to in order to create a really good business, especially in B to B to C, because you lose one patient, you run the risk of losing the entire practitioner if you create a bad patient experience.

So we ended up doing this transaction before we even did any kind of growth equity, and brought these two companies together, both the same size with completely different profiles. So we’re this high growth, 1000% year over year growth, and then there’s 100% year over year growth at that time. And another one that was more of a distributor running a very slow growth but good margins brought those two companies together, and then we ended up doing a series B with a growth equity company KING and I think for me, I think they operate much like a VC in some ways, but what they brought to the table was, look, we just want three times our money.

The expectation is not to shoot for the fences and potentially risk everything. You’ve worked your ass off for the last, what was it, eight years? I’ve been working my ass off for eight years. I had at some point $50,000 in credit card debt, mortgage payments missed to get this thing to where it was, you bring a VC in and potentially they want you to 10x, 15x, and make risks that I just wouldn’t have been prepared to make because everything was in this business. And quite frankly, I don’t think it would have been right.

So Kane came in, great partner, but I think they operated very similar to a VC, you know, they’re on the board. I can text Leon, you know, the partner over there whenever I want, and, you know, help me think through how we get to the next level. From there, what happened was we still had kind of the multipronged leadership from the two companies, and it just wasn’t really working effectively. And I think I had a different vision for the business than the other CEO.

Mark MacLeod:
Were you co-CEOs? Sorry to interrupt.

Kyle Braatz:
Yeah, basically he was a CEO. I was the president. I was running all the commercial product engineering, and he was running all the stuff that he’d run before and the operations and stuff that I didn’t love doing at the time. And it was definitely not the perfect situation. It got us to where we needed to get to. So we decided to run a process with an investment banker. And I think part of it is obviously, too, I shouldn’t leave this out, is we’ve been a profitable business for a long time. When we decided to build profit…

Mark MacLeod:
Sorry, profit? I don’t know, it’s a foreign language.

Kyle Braatz:
It’s funny because, yeah, part of it was like, you almost couldn’t help but be profitable. Again, like being such a capital-efficient business in a market that we could penetrate so quickly without spending a lot of dollars, it allowed us to just focus on that, and it was very natural. I think we invested a lot more than other people in our industry. Again, like that niche market and unsophisticated market in this type of user experience was really allowed us to do that. So being profitable, it’s sexy now. We were doing it before it was sexy, and private equity demands it.

And so we went with an investment banker who didn’t think we could get the multiple we ended up getting. But I was selling the vision of what we were going to be building. We went through a process which is super interesting. And there was one group that kind of positioned themselves as the nice guys of private equity. And at Fullscript, we always talk about kindness being a competitive advantage. And to me, kindness isn’t being nice to everyone. It’s like, you be direct, but that’s actually going to help. That’s actually a kind thing to do to a lot of people.

But anyways, I’m digressing. They position themselves that way. So throughout the process, they actually didn’t have the highest bid at the end of the day. But I really connected with them. They were the right partner and they were going to recap the business and allow us to kind of move with a new executive team and a new vision for the business. And they actually came exactly as advertised. They underwrote the thesis. They underwrote the management team and they truly are like our partners.

So I don’t think they’re traditional private equity. Like when you think of private equity and the stories you hear, and I’ve spoken to a lot of poor co-CEOs, it can be hell because they can control a lot of the decisions that you make. Ours are completely different. They’re as hands-on as we want them to be. They know the business inside and out. But they’re not the traditional private equity where they’re just tipping the scale of where you’ve got to go. They’re really a partner, which is great.

Mark MacLeod:
That’s amazing. First of all, congrats on the profitable growth. That’s awesome and rare.

Kyle Braatz:
Mark, before you. Sorry, one thing I should add on with private equity too, is they are very focused on, okay, how do you create enterprise value? Maybe more like not just from growth. Growth is important, right. We’re still growing 20% year on year, but how do you actually grow it through M and A and through different things that are not so natural for someone like myself?

And when they came in, that was actually the first thing we did, is we acquired our biggest competitor, which is also a very similar company to our first merger. But the thesis was completely different. It was like, let’s bring these two companies together, let’s get market leadership on day one, and let’s realize all of the synergies associated with those and accelerate our profitability, which allows us to now invest in the future.

And it’s kind of like the perfect timing because we’re cash flow generating, every single quarter profitable. And we’re able to invest in a time where with generative AI and what we’re doing today, it kind of gives us that license to now enter all those adjacencies that I spoke about at the start of the story. So now we’re at a point with this scale that we can actually realize the full vision of Fullscript.

Mark MacLeod:
Amazing. I did a bunch of private equity deals in my brief time in banking and I thought they were great. There are definitely horror stories. Like, I coach a couple of private equity CEOs now, and one of them has that traditional highly-levered model, and interest rates have skyrocketed and so their interest payments are crushing them. And so that’s putting a lot of tension on the relationship.

But otherwise, I just found there’s just so much more alignment, right? They’re trying to get a triple on everything versus a couple of home runs to pay for the failures, right? I remember speaking to a tier-one VC years ago who told me, quote, “I would rather my company go into a brick wall at 100 miles an hour trying to achieve escape velocity rather than play it safe.” That was great for the VC with a portfolio and multiple funds and billions under management, (but) it’s pretty horrible for the CEO.

Kyle Braatz:
No, there’s no founder alignment or CEO Alignment on those things, right? And you can sell the bill of goods and get everyone excited about it, but then when shit hits the wall and you’re sitting there with your life’s work about to crumble because of a decision that you could have played it safe and built a really great business that you would have been so proud of it’s kind of sad.

I often talk to… You know, when I’m talking to founders, back to your point, the allure of VC is there, and it could be the right thing for your business. But you have to realize there are lots of different paths you can take. Especially today when I think it’s easier to start a business in a capital-efficient way.

Mark MacLeod:
Yes. The other thing I loved about private equity is their whole pitch about two bytes of the apple, right? You’re going to sell a chunk of your business today through some combination of operational excellence and corporate development. We’re going to build a far bigger company than you would have been able to do on a standalone basis. And then when we sell that, you sold your company twice. I’ve seen that play out.

Kyle Braatz:
Yes, 100%. Yeah. If you deliver and there’s a path to keep going, you can continue to re-up and sell the company twice. Three times if you have kind of been yet.

Mark MacLeod:
I was catching up with Joel Lessam, who’s a friend who was the CEO and founder of Firmex, a data room company. This is public knowledge, but…

Kyle Braatz:
I think we used them for our series B…

Mark MacLeod:
Well, he sold that company three times. He just keeps getting a new sponsor and keeps growing and flipping and off we go. Now he’s finally done and retired, but he sold that company three times. Just pretty wild.

Kyle Braatz:
It’s actually like, to me, I didn’t even know this was possible, in all honesty. As a founder, it’s one of those things that’s just not clear that that’s an option out there that private equity offers you this. The other reality though is some founders just aren’t built for private equity either, right? Like some founders are built to get it to a certain stage and pass it on to a CEO to take it to the next level. So everyone’s a little bit different.

Mark MacLeod:
Yeah, that is 100% true. Back to… So, last night I was searching on Google and I also went on to Instagram and I noticed a really interesting thing, which is like maybe 25% of the photos on your profile have you in them. And I’m wondering if that is actually a metaphor for how you lead where it’s less about you, because Fullscript is pretty under the radar, right? And yet you’re a giant company. So I’m just wondering what your reaction is to that.

Kyle Braatz:
I mean, maybe not on purpose, but innately who I am is I lead by propping everyone else up, because that’s just how I feel naturally. When I thought about the success of Fullscript, what got me excited about building Fullscript was obviously helping a lot of people get better, making a difference and impact in the world where whole personality is simply medicine. But a lot of it was also like imagining the day when we sell the company or we go IPO and there’s 100 of my best friends becoming multimillionaires. That literally is what motivates me throughout the day.

This journey right now… I wouldn’t do this journey right now if I wasn’t doing it with people that I love being with every single day. I’m lucky to be in the place I am, where I can stand up and talk about how great the people are that work at Fullscript, how great the team is. But it just feels really unnatural to myself. I’ve always just been. Even when I played hockey, I was the grinder that worked my ass off as hard as I could to help the goalscorers score goals or whatever else. I’ve just never been the guy that wants the limelight, maybe not skilled enough to even have the limelight in a lot of ways. And I think a lot of it’s just no ego.

At full scope, we always talk about no ego and I always looked at things like, what benefit does it get me to be in the limelight? What benefit does it get the company? Literally, I could never see the value for myself or the business. Now, as the business grows and we’re at a place we’re talking to investment bankers again, just to say, hey, this is Fullscript, we’re out here. It’s different now because we’re a large business and no one knows about us. And so now it’s like, hey, when I want to hire the best people, I want to make sure people know who Fullscript is.

If I want to strike partnerships with the biggest companies in the world, they need to know who Fullscript is. So there’s a bit of a different goal in mind right now. And so there will be a little bit more of me getting out there, but I also hired someone. It’s funny, I am nowhere near Toby, but when you look at the relationship that Toby and Harley have at Shopify, it’s magic, right? And I think what drives me every day is like being in the trenches, building. Like, we’re launching a new product in a few months and we’re doing a sprint at office every single day. And I’m here every day. And that’s what gets me jazzed up and motivates me. And I think that’s where I’m at my best.

And quite frankly, the new CFO and head of strategy here, she’s incredible and she’s a perfect external face. She’s perfect at doing all of the stuff that I hate doing. So it’s a real complimentary relationship and we get along really well, so that’s helpful as well.

Mark MacLeod:
Amazing. So you have brought up a few themes that come up in my coaching conversations all the time. One is related to your value of no ego. When I think of the number one trait that I look for in CEOs to coach, it was also the number one thing that I looked for as an angel investor it’s self-awareness because that is the thing that enables you to actually grow faster than your business, right? If you believe in your own hype, if you have an ego, you’re not open to feedback, you’re not learning, you’re just not reading the tea leaves. And so I deeply believe that not having an ego is actually key to going all the way.

And I actually correlate self-awareness quite highly with introversion. I think you’re definitely introverted. You brought up Toby. Toby is definitely introverted. I think it really helps, right? If you’re that charismatic, broad-shouldered, swash-buckling rainmaker and you walk into the room like, here I am, it might just go to your head and then over time, you don’t go the right way.

Kyle Braatz:
Do you believe it? I always refer to myself as an introverted extrovert because if you’re one of my best friends and I know you well, I will open right up. But if I walk into a room full of people, I sit in the corner and hope to God I can see someone that I know so I can go latch on.

Mark MacLeod:
That hasn’t changed as the company has scaled.

Kyle Braatz:
Not really. It’s just like, yeah, for some reason, I shouldn’t say it hasn’t changed. You start to learn a little bit, get some self-confidence, and the ability to just strike up some conversation but it’s definitely an evolution. And I’m not going to be the person that walks into the room, to your point, has that charisma where everyone just gravitates towards you because you’re there.

Mark MacLeod:
And then the other theme that you brought up, you didn’t use this word, right. But when you talked about how complementary your new CFO is, it made me think about superpowers. And a big thing I like to do with my CEOs is, okay, what is your superpower? And then how do we design your role so that you’re spending the maximum amount of time just doing the thing that is your superpower and the thing that is your kryptonite? Let’s hire somebody for it. I love that you’ve done that. And I’m wondering, was that an explicit awareness on your part? Did you say, here’s what I love doing, let me design my job around that?

Kyle Braatz:
Yeah, I mean, it’s probably here’s what I love doing and what I’m good at. And then in order to be successful, literally I need people to do all those other things so this company doesn’t exist. And the things that I love doing, I actually love building right now at Fullscript, I love building startups within big companies.

And I actually think you can startup-size everything. Literally every initiative. We set up co-founders in place, and those co-founders hit certain inflection points. And there’s new co-founders, right? So you start to think about building a new product. Well, the co-founders that need to get it to the next stage are a product designer, a front-end developer, and a back-end engineer. Those are going to be your co-founders. They’re going to get it to a certain inflection point. And the reason you need to do that is because as you get really big as a company, you get this hamster wheel of decision death where it’s like, hey, I got this idea and then I got to run it by the VP, and then they run it by another VP and another VP and another director.

And then this bold idea turns into this very diluted, simple, safe path. So we started saying, well, what we need to do is look at where do we need to get to in the next three months? Put a team of people who you trust to go make those decisions and make bold decisions without the dilution. And then when you get there, who are the next co-founders? So maybe the next co-founders will be a product marketer and a salesperson. So you got to go find product-market fit with this so you can start to build a lot of this muscle memory into even large organizations, and that’s kind of where I just love being a part of that.

And then to your point, where are all the things that I suck at? Well, mostly everything else. (laughs)

And quite frankly, as a CEO, the most liberating thing that ever happens is when you hire that perfect exec, and all of a sudden you’re sleeping at night, and all the things that bothered you day in and day out are all of a sudden taken off your plate. It’s so freeing.

And once you’ve experienced it once, then you have the muscle memory to just keep doing it. And as soon as you feel something uncomfortable, obviously, you don’t want to add overdrive to the business, but you start to find ways around, how do I outsource this to the right person who’s going to take it to where it needs to go?

Mark MacLeod:
That’s your leverage, right? You go from in the beginning when there’s just the three of you, you do anything that needs to be done, but then over time, you succeed through others. And so, yeah, that leadership team is your leverage. You’re only as strong as your leadership team.

Let’s switch gears and go back to the acquisition again. Very often, the most natural buyer for a company is someone who might be competitive in some way. And so there’s, like, this trust barrier to get through. Like, how do I open the kimono? And you literally merged with direct competitors. So how did you get past that? How did you get through the mutual level of trust to actually consummate a deal?

Kyle Braatz:
I haven’t thought about that a whole lot. I think it comes down to authenticity and really, I’m transparent and authentic by nature. It just is I can’t help myself, and I think it helps people kind of unguard themselves when you can describe your flaws and your warts and all the things that you see as wrong, all the things that are great about them, all the things you think… You can just kind of create this connection by being authentic and open. And I think that’s who I am naturally. And I don’t try to pretend I’m something that I’m not.

So I think just that kind of relationship at the top was key, right? Both times we did this, the CEO, myself, and the other CEO, we were able to create that relationship where we trusted each other first. And then as soon as you do that and you can tell that there is authenticness on both sides and you’re happy breaking bread with them. And it even gets down to knowing who they are as a human, their family, all these different things that really matter to then break down into making sure the business was comfortable.

So thinking about it, I would say that’s probably the most important thing is just really creating that relationship at the top. And those are relationships I have nurtured for some time. They weren’t ones where just randomly, hey, we’re going to get together and do this, right? Because I don’t think it would have worked that way. They got to see me as a competitor and how I operated and the respect we had for each other. And no burnt bridges.

I think that’s another thing that entrepreneurs forget is you can get angry and you can do things because at the moment you feel slighted. But sometimes when you burn those bridges, it can come back to haunt you versus understanding that maybe a decision that was made that slighted you is actually just a business decision. And if you have empathy and you put yourself in that CEO’s position, I probably would have made that same call. So it hurts, but it was the right call for them and for their business. So don’t spite them, just respect them and then move on. So I think keeping those relationships strong regardless of how things go in a competitive situation is really important.

Mark MacLeod:
Feel like that goes back to your value of no ego. It’s really easy to get slighted when you have a big ego.

Kyle Braatz:
Yeah, exactly. It’s just like, put yourself in someone’s shoes and would you make that call? Yes. So why are you blaming them for making that call? It’s a pretty simple equation.

Mark MacLeod:
You talked about going for 300 to 600 million as like a historical statement. And when I was reading about the CEO of the year thing, that article referred to you as kind of approaching a billion. And so you may even have surpassed that now, and you don’t have to disclose it. That’s fine. But obviously it’s a very large company. What is the end state? Am I going to see you with a suit on, ringing the bell? What’s your dream for this?

Kyle Braatz:
So, it’s funny. I’m not motivated by going IPO. I always said, if that’s what’s best for the company, the company should do it. Do I see myself as a public company CEO sitting here right now? I don’t, but it’s funny. Like, one of my board members about a week ago said, you should really reconsider that kind of perspective. And he’s actually putting a one-pager together for me around how you could still be the CEO of a public company and not hate your life. That’s kind of like the message.

So, I mean, I think, yeah, I will always do what’s best for the company and for my team. And if it means going public and me being the CEO of that company, great. If it means someone else coming into the business and being the CEO, that’s great too. It really doesn’t matter to me. I’d say probably the most important thing for me at this stage in my life is being a good father and a good husband.

My wife and I both sacrificed so much to get to the stage. She’s not at the front of all of this, but when you look at the sacrifice that you make over a twelve-year or ten or eleven-year period, building something from the ground up, and she’s been there for that entire time. We celebrated our ten-year anniversary in December. I want to keep my eye on the ball there, right? And really not jeopardize that part of my life and enjoy it. We put so much into this that I just want to enjoy that part of the life alongside of it.

So I think as long as you can have that balance, which I think you can, then that’s what I want to prioritize while also making sure I always do what’s best for the company, right? So that’s probably the most important thing for me right now.

Mark MacLeod:
I really love that so much, and it’s actually really rare, right? The startup world is pretty male. Most of my CEO clients are male as a result, and I always ask them about their marriage and they always tell me it’s their most important thing. But when you look at how you allocate your time and especially your presence, that’s not true. And that was absolutely the case for me in my first marriage. And you’re just so grounded. Like when I reached out to reschedule last week, you were grateful because your kids were ill and that way you could just take care of your kids and you’re running a giant company, it’d be so easy for you to be like, you’re just so above that. That’s for your wife to deal with. So I really love how grounded you are.

So, yeah, you’re in your second decade of Fullscript, but your intention when you married your wife is that you’re going to be with her for the rest of your life. It’s actually far more important, right? So, yeah, I really love that.

Kyle Braatz:
We sacrificed… I mean, I’m going to be 40 this year and my first kid’s going to be five, and we’ve been married for ten years. We purposely sacrificed together not having kids because we knew in those early stages there was no way, right? I was not around it. She knew the sacrifice I was making there and she was the person I’d come home and complain to and be upset about whatever happened that day. She’d always listen. So all of those sacrifices along the way allowed us to get to the stage.

And I always admire the Mike Myers type where he was the best at his craft, but then at some point along the way he said, my next piece of work that I want to do is raising my children. And I think he was out of the business for 17/18 years—Still might be just doing that. There’s not a lot of people that do.

So I respect stuff like that more than… and I respect the people that want to go build and are motivated by that. But I always joke there are three people in the world. There are people motivated by power, there’s people motivated by money, and there’s people just motivated by impact. And that’s the best for me. The builders, the people that just like to create, they’re always motivated by the impact. And that impact can have a huge scale. Like what if we’re trying to do at Fullscript but it can also have a smaller scale but huge to me, like my daughter growing up straight is really a big impact for that matters more to me than anything, right?

Mark MacLeod:
I love it, honestly. Yeah. It’s a message I’m trying to bring to the CEOs that I work with because they do sacrifice everything. And when you’re in a company it can feel all-encompassing. But then back in my operating days, there are companies like, when I was at FreshBooks, I used to joke about having FreshMares, which are FreshBooks nightmares. Right, because you’re so all in, but now it’s like just a distant memory. So yeah, you’ve really got the right perspective there.

Maybe as we start to kind of wrap things up, I want to go to a passion. So you talked about being a hockey player earlier and now you’re part of the ownership group of the Ottawa Senators. That’s absolutely fascinating to me. I would love to learn more about this.

Kyle Braatz:
You know, it’s funny if you talked to all my childhood friends, none of them thought that I would make the NHL based on my skill and I would have agreed with them.

Mark MacLeod:
Were you trying, were you really a serious hockey player?

Kyle Braatz:
You know what? I played competitive and some junior hockey, but I was never even close to good enough and I never really had the perspective that I just loved the game and I love the camaraderie of it and I love a lot of different components of it just the competitiveness of it. There are a lot of similarities to building a business around building a great team, like the competitive nature of wanting to win on a day-by-day basis, etc, etc.

But ultimately, for me, the opportunity is once in a lifetime and when I heard the Ottawa Senators were for sale, I actually messaged my buddy there, Harley Finkelstein, and I said, you probably know there’s probably a local group trying to get involved, and if you have your ear to the ground or you hear anything, please connect me. And he instantly did. And I was lucky enough to kind of go on this ride where I was aligned with a small group here in Ottawa who got to see the whole process happen in real-time.

I remember going through this process just being blown away because I run a couple of processes now with Fullscript and this was like a whole new world. And it was just really interesting how my mindset of loving the game to, as we were going through this process when the draft was on or free agency came on, my passion level and my adrenaline around it all, all of a sudden went to a completely different place where I just loved it.

And so I knew the deal was right for me. We ended up consummating in September. And it’s funny, I almost dropped out a couple of times and my wife was the one who said, “You will regret this. You will regret this.” And I would say the best thing about being involved right now in that ownership group is what it’s done for my relationship with my wife. We lived out in Arm prior. We’re like 45 minutes, 25 to 45 minutes out of Ottawa, depending where you want to go. And so the idea of getting out with three kids under five.

So with the idea of getting out of doing things is really challenging. But this has been a forcing function to us having, call it, 45 different date nights every single year. And she’s gotten the same passion for the Ottawa Senators. There’s the concert…

Mark MacLeod
If she hated hockey that’d be really funny.

Kyle Braatz:
It’s funny, she’s the one slamming the table when they get scored on. It’s funny how she’s also gotten that same sort of passion now and we just love that part of it. And to me, this is an investment that will never be made for my children.

It’s not a ROI from a monetary perspective. For me, it’s a ROI from just a lifestyle perspective. And maybe the last thought I had as we were doing it was like, sure, I’m never going to monetize this, but it may parlay into a lot of other things because the network that I’m now involved in and the people that I get to see and interact with on a regular basis are just a completely different network than I would have ever been connected to if I hadn’t done it. So I’m just super grateful.

I actually changed from a Habs fan to a Sens fan, which I never thought was possible. I heard a podcast with Bill Simmons where he’s talking about how it’s so funny how it’s so easy for us to be, you know, it’s not working out. We should go get a divorce. And you divorce your partner. But with hockey, or a hockey team, or a professional sports team, it’s like it hasn’t worked out for 20 years but this is our year. You’re always committed, no matter what. So this is the only thing that could have got me to change.

Mark MacLeod:
Was that a difficult decision for you?

Kyle Braatz:
I thought it would be, but the first moment that they played, there was no kind of… It was like, I’m all in. And I think it’s because you start to feel a part of the community, right? I was a Habs fan because my dad was a Habs fan. And that’s just your team you got loyalty. But then, you know, with the Ottawa Senators. We are a part of a community. I love the culture.

Michael Ann Lauer, the owner of the team, who is the face of the organization from a leadership perspective, he is an entrepreneur. He is the person. I don’t see myself working for anyone, but when I met him and I understood his values and his perspectives, I’m like, this is one of the guys or the people in life that I would run into battle with and I would follow. And so I think just being a part of that, it just changes your perspective really quickly.

Mark MacLeod:
Amazing. That feels like the perfect place to end, because where do we go from here?

Kyle Braatz:
I don’t know. Maybe I invite you up to a hockey game. I don’t know if you’re into hockey, but…

Mark MacLeod:
For sure. You can’t be Canadian and not watch hockey. No, that’s really special. Well, Kyle, this has been a true pleasure. It’s amazing. From the guy I met in Notman House at Real Ventures a very long time ago, to see the scale of what you’d built. But you haven’t lost yourself along the way. You’re still Kyle. I don’t know, if I owned a hockey team, I might let it get to my head, and you have it, so it’s awesome.

Kyle Braatz:
Well, thank you. Well, I appreciate it. It’s funny, as I reflect back on the journey here. You were actually one of the only VCs who actually understood our market and believed in it, which is very different than the majority of individuals I spoke to. I think it’s because, as you said at the start of the program, it’s just kind of innately who you are and what you believe when it comes to healthcare and everything else.

Mark MacLeod:
Thank you. All right, Kyle, it’s been a real pleasure. Thank you so much.

Hey, thanks for listening to the Startup CEO Show. If you’d like to connect with me, be sure to visit my website at markmacLeod.me, or follow me on LinkedIn at The Mark MacLeod, or X account @markmacleod_, and if you want to tune in again next week, be sure to subscribe on YouTube, Spotify, Apple, or wherever you get your podcasts. We’ll see you next time.

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