Startup Resilience: How Notch Pivoted to Success with Jordan Huck - Mark MacLeod

June 20, 2024 - Marina

Startup Resilience: How Notch Pivoted to Success with Jordan Huck

Tune into my conversation with Notch’s CEO, Jordan Huck, where we dive into the critical decisions and pivots that shape a startup’s journey.

Listen to get a grip on the he dynamic world startup leaders navigate daily and the relevance of sales and venture capital savvy in the Canadian startup scene.

Delve into the Transcripts for Key Takeaways from this Episode

Mark MacLeod:
Jordan, welcome to The Startup CEO Show. It’s a true pleasure to have you here today.

Jordan Huck:
Thank you, Mark. It is my honor to be here with you!

Mark MacLeod:
Amazing. I’d love to just jump right into it, but before we do, maybe just tell people who are tuning in what Notch does.

Jordan Huck:
Sure! Yeah, so my name is Jordan Huck. I’m the CEO of Notch Financial. So here at Notch, we help businesses in the food service supply chain unlock profit in their businesses. And so we build accounts payable, accounts receivable, and automation software for payers and collectors.

Mark MacLeod:
I love it. So much to unpack there. And I’d love to just jump right into. All startups are roller coasters, but yours in particular was because your revenue actually went to zero during COVID, and I’m wondering if you could just talk about that. You’re still here. You have a smile on your face, your hair hasn’t turned white. Just walk us through all of that.

Jordan Huck:
Yeah! Thanks, Mark. Well, my wife would say it is graying. Yeah, I think originally I was really fortunate prior to this to have a scale-up. It wasn’t a startup in the sense that we raised outside capital and we were not profitable. It was a traditional scale-up business. It took us 13 years before we sold it.

And then I actually came into a previous iteration of this business as a sort of professional CEO. Like, come in and scale up a two-sided marketplace business. And for no one’s fault, that’s what startup businesses do, they go out and try to create something that doesn’t exist in the market.

You know, because obviously, we sold to restaurants and wholesale distributors, not only did Covid sort of decimate that revenue base, but that was also the period of time where we decided that we needed to pivot the business.

You know, Mark and I worked together on some of those challenges. It was a very difficult point for the business. Essentially what happened was we went to our base of Canadian investors and said, for lots of reasons that we all agreed upon at that point, this business is not viable as a B2B marketplace. But spending time around this customer base, we’ve clearly identified a problem. And so essentially we raised the seed round, right? We raised a new seed round led by some great Canadian investors.

And Mark, I know you’ve been on both sides. You’ve been an operator and an investor. I think if we didn’t have such great investors who believed in the team and believed in my vision, I wouldn’t be here today. You know, and really, really difficult time, but it’s always difficult. You know, different phases. And we believe that that adversity, and, Mark, you and I worked together, there isn’t much that phases me these days.

Mark MacLeod:
No, no. You’re a warrior now. Oh, you want me to choose some nails? Sure, great. Pass the ketchup.

Jordan Huck:
Yeah, but I don’t know. I talk about it. I’m very passionate about Canadian entrepreneurship and building companies, and that’s what it takes, right? Like, we, as the Canadian ecosystem, need to be up for that. It’s difficult. If it were easy, everybody would do it.

And so I’m not going to call the investors here. I don’t know what the protocol is on that, but I have some great investors who backed me and just said, hey, we believe in what you’re building and your ability to put together a team. And my mindset is like, don’t run out of money. Keep bringing good people to work on the problem, and you will get to a good place with the company, right? You will be able to find a repeatable motion and go to market. And there’s all the tactics underneath. That was my mindset. I mean, you and I worked together on the other side of that difficulty and those challenges, great things are achieved, and that’s my mindset.

Mark MacLeod:
Yeah, yeah, you just outlined two of the three jobs of a CEO at scale, right? One is to communicate, vision, mission, North Star values over and over again until you’re sick of hearing yourself speak. Two, build the strongest team that your scale and resources allow for. And three, never run out of money. So you just instinctually brought up two and three in that answer there, which I love.

Jordan Huck:
Yes, I consistently refer to my job set. Right? Like, make sure we’re working on the right things, make sure we have the right people to work on those things. Don’t run out of money.

Mark MacLeod:
Yeah, that’s it. So simple, right? It’s an easy job. (laughs)

Jordan Huck:
What I underestimated and gave ultimate and complete respect and adulation to is just how difficult it is from scratch to find the right things to work on.

Mark MacLeod:
Oh, yeah, for sure. A huge element of luck and timing. And often, I can tell you, having been a VC, often we look for folks who have true domain knowledge for whom this is like a very informed problem, like, they’ve lived the problem. But there are varying degrees of that, right? You and I are both sitting here in the frozen north of Canada. If we look at the most successful startup in Canada, it’s Shopify. Toby just wanted to sell snowboards. Yeah. He didn’t want to build an e-commerce platform. He just wanted to sell snowboards. And there was nowhere good to buy snowboards on the Internet. And he hated Yahoo stores, so he just built something.

FreshBooks, another company I was part of was just a web agency and they had built a billing tool and then their clients were like, oh, can we get access to the billing tool? Enough of them asked and they said, oh, I guess we have a business, right? So it’s not that everyone has this foresight and vision of a great venture fundable opportunity right from the outset, but it’s so important to get there, that’s for sure.

Jordan Huck:
Yeah, no, look, I saw a talk the other day, I just was watching it, the CEO of OpenAI, and he runs Y Combinator as well, and he was talking about the trait that they look most for in CEOs is just pure perseverance, there is just a direct correlation. So yes, the domain expertise, some work with it, some don’t.

If it’s built into the fabric of the company to constantly be learning and moving quickly, constantly be iterating and in everything, right, like in your channel mix, it’s not just product, right? Because after you find product market fit, then you’ve got to find a go-to-market fit, which is equally as do or die.

Mark, I know we talked about that…

Mark MacLeod:
If anything more, right over the lifecycle, the biggest slice of the value creation pie is distribution.

Jordan Huck:
100%, 100%. And I think that’s the phase that we’re in now in company building, right? It’s just iterating on that piece. And so even when it’s really hard, getting to product market fit is special. I give any entrepreneur in any business ultimate respect for those who do that, find a cohort of users who want to continue using something you’ve built.

Mark MacLeod:
Yeah. So clear, but so hard to pull off.

Jordan Huck:
Very hard.

Mark MacLeod:
Yeah, I know the answer to this because we worked together, but just for the benefit of everyone, how did you continue to believe and have faith during this period when you had to rebuild the product, rebuild the company, and have zero revenue? Like how did you cross the desert and get to the other side?

Jordan Huck:
Oh, nothing contrived. I’ll honestly tell you from my heart I always believe that I will figure it out. There were periods of time on this journey where there were lots of people from all corners who were like, this can’t work, it won’t work, it can’t work. But one, our origin story. So our origin story with the pivot is pretty straightforward and it’s probably similar to a lot of great startups, right? Like, find the customer before you have the product.

And so we went to one of the largest wholesale purveyors in all of Canada and built a relationship. And we had been talking, we built a relationship in the previous iteration, a little bit of the business, and we said, well, what problems could we solve for you? And, basically, they laid it out without being able to say what it was. But what they were laying out was a finance automation problem, right, an opportunity to help collect…

So whenever you’re in B2B commerce, you’re giving a lot of your customers terms, right? And so it’s not Shopify where a purchase order is an invoice and they’re just paying instantly. You’re giving 30, 45, 60-day terms. So what that means is that your ability to collect those funds, right? So convert your payers to online payment methods, appropriately give out net terms, properly manage disputes on invoices, properly post to your ERP, and properly reconcile bank feeds. These are all processes that Fortune 500 companies have automated and they’ve got AI teams and tools that are doing all this work.

But when you get down into the, I mean, this is honestly what drove me, my belief that I could do it and I can do anything. We’ve called that the reality distortion field. So I have one, and so I believe I can do anything. And then two, the size of this problem, right? They’re the market leader in AR automation. They have 800 customers. They’re the market leader. They have 800 total customers, right? So this mid-market, messy, fragmented, long tail is an enormous market. And so we went and we built this product for this very large initial customer, immediate product market fit. I got all the payments immediately. All of their online payment methods are flowing through the product right away. It was like turning it on.

And then I went and met with 500 others and ran into zero competitors. So at that point, I started to be like, okay, this is going to be very difficult. And we were hosting on a no-code solution. Yeah, Mark, the initial MVP of that product was on a no-code solution, right? So not exactly the most beautifully put together. Now…

Mark MacLeod:
You got duct tape, and scissors, right? (laughs)

Jordan Huck:
Whatever it was, 100% duct tape, right? And then we just listened to them every single day. We probably iterated on the payment report because reconciliation is everything for finance divisions. Mark, I mean, you were a CFO, right? As money comes in post to the ERP, reconcile against funds into the bank. And so the combination of those two things, just like, okay, there’s a really big market and there’s a problem here, unquestionably. Will somebody be solving that problem in ten years? The answer is yes. Or is it 15 or 20 or five? I don’t know. But somebody will solve that problem for these businesses. Why is it not me? Why is it not us?

Mark MacLeod:
Yeah, right. For sure.

Jordan Huck:
So I think those two things, and then you and I worked together. I hope that many entrepreneurs and CEOs try to make sure it’s not some cost fallacy, right? Where I’m…

Mark MacLeod:
It comes up a lot.

Jordan Huck:
Yeah, but I don’t think it is. And the company is growing really well now, and we’re feeling great about the future.

Mark MacLeod:
It’s amazing. I jumped right into Notch, and of course, as you alluded to, there was a history, and then, of course, you were not the founding CEO. And I think it might be useful to explore that because often we hear about founder CEOs, but it’s not uncommon for a company to have someone come in. And in your case, you actually didn’t come from the startup world. So maybe just talk to us about that. How did you make that transition? I know everyone deals with impostor syndrome. I know that was probably a thing for you. It is for everyone. Just tell us about that.

Jordan Huck:
So, I came from a technology services business, so we were doing technology staffing, and outsourced software development, but it was a very fierce operational environment. Like, essentially you drove value in the business by really understanding and measuring go-to-market. Like, how much gross profit do you drive per seller? That’s how you create value, right? That’s how you drive EBITDA. So I actually came from… We got it to 20 million a month in revenue by the time we sold the business in 2018, and took over as CEO in 2016.

So it operated at scale and certainly was very comfortable with a B2B, go-to-market motion, and building up that infrastructure for direct sales. I always was almost, like, intoxicated by the idea of, like, I know I can create great go-to-market teams and then I want to get the lock-in and the high gross margin profile that can come from technology businesses. Mark, to be frank, right, you want to create that.

Now I’m running an embedded payments company, and there’s even more lock-in, right? Because we get a workflow lock-in and payment type, right? As they’re processing on our, um, now. Easy to aspire to, Mark. Really hard to get to. So I knew I wanted to make that transition in my career.

And so I got to know some of the investors here in Toronto, and it’s no one’s fault, but the board and I thought that the business that I came into was ready to just go into scale-up mode, right? So looking back and definitely coming in, it’s like, all right, I got to really learn. And, Mark, I started working with you almost right away at that time. What was really dangerous, looking back, and these are the learnings that are only clear, is that if you come into a business that hasn’t found a repeatable set of users that are going to continue to use that product, right, with venture capital, because they’d raise some capital, you can do things that are unnatural.

They can mask the fundamentals of a business, right? And unnatural meaning maybe Uber famously would reduce prices and subsidize the transactions a little bit to try to get… Especially when you’re trying to solve a cold start problem in a marketplace, right, where you’re, well, just subsidizing. And so it was difficult to ascertain.

And so, Mark, looking back, I came in with the wrong mindset, like scale, in which the last thing that you want to do is go into scale-up mode when you haven’t really defined what your product is for a set of users that will use it over the long term. So, you know, that was painful for me, the management team, and definitely, I think, contributed to everybody feeling a little unsettled until we realized, whoa, okay, we need to unpeel this thing back to first principles. Will this set of customers want to use this service or product? Why or why not? And then, only then could we start to understand, okay, this is not… Mark, I don’t know the stats, but I bet you most startups just die because they solve a problem that doesn’t exist, right?

Mark MacLeod:
That’s for sure. The technical reason why startups die is because they run out of cash. But there are obviously underlying fundamental reasons and that is definitely one of them. So you came in as a CEO from a scale-up, a big exit with a mandate to grow, but the company wasn’t ready for you, right? I’ve often said that when a founder is running a company that’s a pre-product market fit, they’re not a CEO, they’re a product manager. All you need to be doing is spending time on the product, nothing else. Everything else is a distraction. How did you turn yourself into a product person? Because I know you were, you were the lead product guy on aspects of this.

Jordan Huck:
Yeah, when someone is put into… I mean, it depends on how you’re hardwired. Like, for me, when I look back, is it something I would have knowingly done, gone in and done a turnaround? Then we had to change the capital structure of the company. We basically got a brand new company, right we set up, and the only way to create a new company was to go out and talk to potential customers and figure out what to build for them. So, whether you want to define that as a product manager, I mean, yes, that in theory would be, but it was either that or die.

And so if you’ve been in the arena growing companies for long periods of time, I think what you end up like, we talk about context switching. I know what you’re going to ask, we’re going to talk about it in a bit. But we talked about the three responsibilities of the CEO, fine, but you got to go where the largest problem is, right? And at that point it was like, figure out that problem or die. Well, who’s going to do that? Whose job is that? No, you go and find out when you can’t be wrong again, you can’t be wrong. You must be right. I think that over 20 years of operating, I have developed an instinct through many, many reps of knowing what is the problem that needs me to go deep on. Clearly, that is the one. It was existential at that moment.

Mark MacLeod:
Right. Were you able to set aside the pressure to drive growth and be like, listen investors, we can’t even think about growth until we know what direction we’re growing in, or was there pressure to do both?

Jordan Huck:
Unbelievably, I’ve always had an amazing board. Like amazing, Mark, you know, that board, they’ve supported me the whole way. Like, there was, you know, I think one of my abilities is to be able to articulate the vision of how this work will unlock growth. And so we were able to put aside the short-term, like how quickly are we signing customers? We really had to unwind a bit, B2B. We didn’t have ahead-of-sales for a period of time. We went really lean. It was myself and we were just out talking to really large wholesalers about what we needed to build. So, yes, we were able to, but when you’ve already raised venture capital, that’s really hard.

We did this the wrong way. This is not the sequence that somebody listening who is starting a company would do. You know, Mark, you would advise them. You write about it like, go out and find customers, go get traction without money.

Go try to get some type of go-to-market engine. You’re the CEO, you should be selling the product. So you’re the product manager. Then you go out and sell the product, get people using the product, and pay you, then consider if you need to, because you think it can go faster. I mean, Mark, I know you very much could and would argue way till later, try to never only raise when your cohorts pay back sub twelve and you just make this sausage maker go faster.

Mark MacLeod:
Yeah. And I understand not everyone has access to angel money or their own money and not every business can go from being a service business to a product company. But I do think generally most startups raise too early before they know what they are.

It’s like a child taking steroids. It’s not going to grow up properly.

Jordan Huck:
And do you need to be figuring out it’s no one’s fault, it’s a young, great young management team that was like out there in the arena trying to build something and we didn’t have product market fit and they’re studying sequoia decks on how to prep for board meetings, do you know what I mean?

Mark MacLeod:
Yeah, totally. (laughs)

Jordan Huck:
So as soon as you raise that outside capital, yeah, there’s governance in the company, you are deploying capital on behalf of investors.

And definitely, the expectations are high and there is a need to grow and then there’s… You know, I think because I’ve been fortunate enough to be part of a great management team, that was all about fundamentals. Like, all about fundamentals. For 13 years of my life, my mentor, I ended up taking over as a CEO from him. I didn’t get caught up in the whiplash too much of like VCs want this. You go on a meeting, should you change the business because of what a VC says? I very much respect and appreciate the perspective, but VCs are wide and thin, they can’t tell you how to operate. And I think the great venture capitalists that I work with on my board, they don’t presume that they would know, that’s why they’re good at their job.

And so I was able to not really get too caught up in—at least I think—well we got to change this or we got to change that because I’ve gone through multiple cycles, Mark, in our time working together, growth at all costs. Well, now you’ve got to be very profitable at the unit level if you want to raise… Sorry, profitable at the unit level and a path to actual EBITDA profitability. So things have changed fairly dramatically in the last four years.

Mark MacLeod:
Yeah, let’s talk about that. Now you’ve been forced to become an expert in raising venture funding because you had to do it in very challenging circumstances. When you do your retro on that, what is your advice to founders who might also be raising and challenging circumstances, because there’s probably going to be lots of those this year.

Jordan Huck:
Yes, I’ve thought a lot about that, Mark. For context, to raise our series A, it’s public information that we raised from Portage took me 90 meetings.

Mark MacLeod:
90 meetings, wow!

Jordan Huck:
That’s not insane, by the way. You hear some people that have done 200, you should expect 30 to 50, I think, Mark, I think I’d say it’s not an insane number.

Mark MacLeod:
But a real commitment at the same time as you’re running a company.

Jordan Huck:
Well, yeah. Okay, so I’ll give mental state advice, even though you didn’t ask me that question, and then I’ll give you my fundamentals. So, mental state advice, you need to be really taking care of yourself during that period of time, right? Like, Mark, you’re the same as me. I work out, I take care of myself, and I think very hard about my mental state and how I’m feeling physically, especially in a period of time when I need to go and simultaneously understand every key metric or number in the business and exude the belief and confidence that I think is my strength, right? That I lead with passionate energy with my team, and I want that to get across. I don’t adapt my style, that’s who I am. So I want to make sure I’m in the right mental state.

But then fundraising, and even during a very frothy time, if you’re a B2B SaaS business, for me, there are two things that I care about, and that I will never go out again without being… Especially in today’s market conditions, Mark, and I know you’d say the same thing.

I think the most all-encompassing metric, like, if I was a VC, the first thing I’d want to know is like, show me the cohorts and show me the net dollar retention. How does revenue retain over time of your cohorts? I think that metric, Mark, gives me an all-encompassing view of their business, right? Like, how good are they at upselling? How good are they at retention? You can break into gross dollar, and split out gross dollar versus net dollar but that net dollar retention metric is going to tell me the incredible value creation machine from SaaS companies comes when net dollar retention is north of 100% because it comes to that layer cake of growth.

It’s like, I stack customers, they grow, I stack more customers… And so how do your cohorts perform, and I can tell you that I consider myself, I was part of the sale process of my last business to private equity and very large strategic buyers. There’s no faking net dollar retention. So you can have the nicest pitch deck in the world, and I had a beautiful pitch deck. But if the cohorts don’t perform in line with best-in-class SaaS organizations, you shouldn’t be out raising venture capital. That’s metric one. I think it’s the most, Mark that’ll be for you to write about, but it’s up there for the most important metric.

Mark MacLeod:
I’ll just reinforce, if you don’t mind, just that point when we raised series A for Shopify, that was actually the unlock. Bessemer asked to see our cohorts, and we were like, oh, man, do we show it? You know, that’s a high degree of trust. I think we ultimately concluded, well, Bessemer’s a legit shop, let’s just do it. And they just came back with a term sheet.

Jordan Huck:
(laughs) Of course! Of course, man, like, Shopify is either a product that people love to use, and they’re going to use it with increase. Do people use your product with increasing engagement or decreasing? Whoa, people use it more over time?

Mark MacLeod:
Yeah, yeah. How about that?

Jordan Huck:
What else do you need to know, right? Like, do you use Spotify more frequently or less? You know, Doordash, an incredibly well-written… That’s CEO, their cohorts were beautiful. That’s why people use doordash with increasing frequency. GMV retains at 110% stacks. I bring a user, it stacks year over year over year. So I wouldn’t go out without… Because you can prep all day long. You are going to dump your data into a data room.

Jordan Huck:
And venture capitalists are very smart. They know what they’re doing. You’re not there to. And so I wouldn’t go out until my cohort’s performance looked how it should, best-in-class. And it’s different, enterprise versus SMB versus maybe best-in-class enterprise, 130% SMB. Best-in-class could be 95 or 94. So your business, there’ll be benchmarks. And then the whole concept that got lost a little bit that I had to go to school on was like, well, what is the concept of raising venture capital? Well, there’s a large amount of R&D costs that you don’t worry about at the start if you can prove that you’re profitable at the unit level.

So the gross margin that I generate from a customer pays back, ideally as soon as possible against what it costs me to acquire that customer. That’s the concept, right, Mark? And if I’m profitable at the unit level, I can dump cash down the engine, and it will pay back into my business to reinvest in acquiring more customers. That gets lost a little bit, right, like where it’s just like, raise the money, raise the money. Well, it’s to fuel that engine.

And so for me, when I invest a dollar, do I have a go-to-market fit? Go-to-market fit for me is the mental model I have is like, have I found the channels, right? Lots of different channels that I can use to acquire customers. Have I found the channels necessary to acquire customers that will generate a gross margin that will pay back my cost of customer acquisition? Minimum sub twelve months. I would not go out without it paying back a minimum sub twelve months.

Mark MacLeod:
I love it. That’s super specific. And I think especially important in this environment, which is a bit more risk-averse, you don’t want to have, especially with lower middle market SMB customers, a really long payback period, because there’s a leap of faith as to whether that cohort will in fact pay back.

Jordan Huck:
Yeah, 100%. And I think you’re going to read documents and people are going to talk about this metric three times LTV, which you’ve got to make up, right? Mark, as you’re a startup, you’re creating the LTV. I estimate it’s three years, right?

Mark MacLeod:
Yeah. You have no clue. (laughs)

Jordan Huck:
Bullshit. Bullshit. Like do the cohorts pay back? How does revenue retain people on your product? And Mark Roberge wrote an incredible piece for anybody who’s listening, he’s at Harvard now, he was the head of revenue, the CRO at HubSpot. I think they probably built, I mean, they created inbound marketing and then used it to create a monster. But he was an engineer who took over sales.

There are ways you can segment. So if your net dollar retention is poor, find a cohort of users where it’s not poor, break that data out, and be prepared to articulate. And by the way, articulating that should also be the strategy, right? Go find more of those types of users.

Mark MacLeod:
Focus, focus, focus, find your segments.

Jordan Huck:
And I haven’t, yeah, I’m giving this advice prescriptively, like I’ve done everything wrong, been too wide, focused on too many sets of users doing custom development. But through these knocks, I understand that simplicity is what’s important, right? Like, is it a big market? Sorry, Mark, we should have led with that. Is it a big market?

Mark MacLeod:
Venture scale?

Jordan Huck:
Is it a big market? A venture scale market, right? This concept of power law, if you learn about power law, you’ll understand how a venture capitalist thinks, because only a few companies are going to return the portfolio. So is it a very large market? Okay, how do users perform? And the best metric is net dollar retention. To look at that, and then do you have a go-to-market fit? How quickly do your cohorts payback? For me, that’s it, and you know, but we get caught up spending time on team slides and I make sure that my Mark MacLeod advisor’s little logo looks good. That shit doesn’t matter.

Mark MacLeod:
Not at all.

Jordan Huck:
Even though I love having you on there, it doesn’t…

Mark MacLeod:
Yeah, I love it. I’m going to give you a little piece of useless trivia, and then I want to double-click into something you said that I think is important. So since you’re in the restaurant industry and since you brought up HubSpot, I’ll share that I had dinner with Dharmesh once, and I learned that he will never, ever let anyone pay the bill. Just, he cannot. He’s just like, it will cause him physical pain. Like, he’s a very timid guy. You’ll get into a fight if you try and pay the bill.

Jordan Huck:
Wow! He’s a great thinker.

Mark MacLeod:
Yeah. Great thinker, yeah. The thing I wanted to bring up, based on what you said is the importance of, like you said, we did everything wrong, and yet you’re still here, which illustrates that you’re going to make mistakes, and it’s fine. The key is to move rapidly. It doesn’t matter if you move rapidly left and then realize, oh, I should go right, and you zig and zag. Speed is the thing, and I feel like you had that, but it’s just great for people to remind themselves, like, yeah, it’s okay to screw up as long as I’m moving decisively and rapidly.

Jordan Huck:
CEO of Coinbase, Brian Armstrong, I think that is his name. In his Y Combinator talk he said, startups are like sharks. You’ve got to stay moving. And if you move in one direction, it’s the wrong direction. You go back, you go in this, that, that concept too, and that always came naturally to me, the ability to get the team moving at speed. And it’s one of the core virtues and values. And in some cases, I’ve really, as I’ve matured and gotten older—I just crossed 40—Try to slow down on those, Jeff Bezos calls them, I guess, the one-way versus two-way doors. Like big decisions like your payment provider or decisions that are not easily undone. You really should be much more deliberate and slow down. But on almost everything else, you want to move quickly. Hiring executives will be one of those things, Mark, to slow down.

Mark MacLeod:
So painful when you don’t get that right.

Jordan Huck:
They’re decisions that change the trajectory of your company, but almost everything else. Trying stuff, tactics. We don’t have the perfect metrics set up. Well, we’ll get the metric. Yeah, that’s why we’re here. It’s just we’ve had that ability to figure things out, it hasn’t been pretty. We’re able to look back fondly on what was very difficult.

And a lot of people, Mark, I know we’ve talked with this, a lot of people, and it’s okay that it wasn’t for them, but it’s not for everybody to be truly figuring something out. And like, companies shut down and there are incredible companies that get caught in just maybe a macro shift or whatever it might be in the startup ecosystem. It’s really hard for the people there, really hard.

Mark MacLeod:
Yes. I’ve invested in one with a really credible founder who I’ve known for a long time, who is just facing the reality that it’s kind of in an automation space, and he’s facing the reality that ChatGPT has probably made his company irrelevant. So difficult to face that.

Jordan Huck:
But we need to in Canada, it’s like deep to go on this topic. We need to embrace that it’s difficult and celebrate those who were in the arena, not demonize them.

Mark MacLeod:
That’s right.

Jordan Huck:
We take a lot of shit at our company when we tried something that wasn’t right and the employees, and we almost shut down. We go through these challenges and these, you know, we, like, we need this, the scale up and the operational chops to support, because we have great ideas and great technologists. And now we need the 10x thinking that a lot of the times can come from ecosystems and the hardened operators that come from other ecosystems. Not yet Toronto. I’m speaking about Toronto—It’s where I market, where we live, and we call home and I’m really passionate about that. That can happen here and is going to happen here. And I want to be one of those, to be frank.

Mark MacLeod:
Yeah, I love it. If I generalize about Canada, there’s lots of exceptions. We earnestly build great products and do a shitty job of selling the product. And that’s the gap, we need to learn to just crush selling, crush distribution.

Jordan Huck:
Yeah. It takes our operators learning how to do demand generation versus marketing. Demand generation is a technical role. I have one. It’s trained at 7shifts and he is technical first, and he generates demand, and the Americans, they really do well at that—Exceptionally well. Whereas they apply that engineering-based thinking to every function.

And so it’s coming, I want to be part of the growth of that and ignore that the venture capital market is down right now. There’ll be cycles in that. I’m more about like, okay, we’re in a big market with a product that solves a real problem with a very attractive ACV profile. It benefits our customer. It’s a great product for us to sell. Now we need to scale up aggressively. And I’m learning new muscles to think like, no scale 10x.

Mark MacLeod:
I love it. I think time will tell, but I actually think your timing is pretty bang on. You raised this capital in a downturn, which means hopefully you’re building up to growth capital and/or deciding on an exit in an upturn. We shall see.

Jordan Huck:
Yeah, we shall see. And I think what we’ve learned, I got caught up in 20… When I talk about imposter syndrome, I was like, how come I’m not raising the 100x round? 100x ARR round? How come I’m not getting that? What’s wrong with me? Everybody’s getting that. Why am I not getting that? But there’s no crystallization of actual enterprise value. I mean, maybe there’s secondaries that were happening.

Mark MacLeod:
I’m sure there were.

Jordan Huck:
Okay, well, all right, then. That’s beneficial for the management team, but for the most part, that’s just a paper valuation. And now companies have to slow because they’re not going to want to take a down round. So they have to grow into that to raise up over that. And some companies will and some won’t.

Mark MacLeod:
Yeah. Lots of venture capital funds don’t want to take the markdown—it’s a trap. When I was operating, I almost never took the highest price per share. The thing I actually solved for was the person, the partner at the fund. Do they have alignment? Do we see the same vision? Can they add value? Will I want to get on a plane to Tokyo with them or would I cringe that I’m about to spend 14 hours beside them? Those are the things I would solve for.

Jordan Huck:
I love that Mark. So, well said. My thermometer for venture capital professionals is, are they humble enough to understand that whether they like it or not, the CEO and the operator is in the best position to operate the company? And I’m passionate about the guys at Golden Venture Capital. I hope you don’t mind me. I’m not plugging them. They didn’t pay me…

Mark MacLeod:
Yeah, I love them.

Jordan Huck:
…They do an incredible job of networking you and introducing you to… They live and die by their value, which is to open up doors and help you with the network that you need to unlock the next round or the next great hire. That’s a true value add.

Mark MacLeod:
Money is money. A dollar is a dollar. That can’t be your value proposition as a VC. It’s got to be beyond that.

Jordan Huck:
Yeah, 100%.

Mark MacLeod:
Just to switch gears, you referenced this earlier, and it’s something I wanted to bring up, which is leading with passion. For better or worse, your heart’s on your sleeve. And my observation of that is the highs are going to be higher for you, the lows are going to be low. You’re going to get hurt. Just talk to us about that.

Jordan Huck:
Oh, Mark, we’re going deep. I’m really passionate about work. I think most CEOs like people who are built. You got to like the process, and you got to like building. I really like building. It’s so hard then when it works, it’s just incredibly fulfilling. Any builder, I think, would say that. I hope that I’ve been doing this long enough that I can honestly say that stylistically, it helps me sometimes and hurts me sometimes. Like, you know that I want to work with people that were unapologetic.

I think the guys at Float do an incredible job of that—I really respect the management team there. I think it’s just a really great, well-run company where it’s like, it’s not for everybody. Like, working at Notch is not for everybody. And things have changed a little bit with COVID and the workforce. And I’m not here to comment on whether that’s good or bad—That’s not for me. I’m stating a fact, right? That we’ve got 20% vacancy in office buildings in Toronto right now. Productivity per capita in this country is going down. Again, that’s just a fact. GDP goes up because we’ve had a net influx of immigration, but GDP per capita is going down.

You know, I lead with passion and heart, and some people, you know, it may not be for everybody, my style. And in my twenties, I thought because, you know, I’ve been leading teams since I was 24 years old… 22 years, like forever. I don’t remember ever not.

And I used to think employee net promoter score was the measure of whether I was doing a good job. Am I liked? Am I liked? Because when you’re young, you have major imposter syndrome, you’re like, “I want to be liked by the people”. Guess what? The people, whether they know it or not, I truly believe, like, the people that actually do want to come and work at early-stage companies that are building things want to be pushed to do their best work. And as they’re pushed outside of their comfort zone, there’s growth that occurs there. And that growth is what makes me say “I have grown so much in four years”.

Do I wish we were at 100 million in revenue? I do, and my investors, but we’re going to get there. And so I just have completely rethought what it is my job is to interact with.

Like, I want to build personal relationships, great. That is fifth on the list, and 9th on the list. I’m here to build something, I want to work with people that are passionate. Not saying for you to work 100 hours weeks, that’s not what I’m saying—I’m saying you come and you give everything you have and you develop, you orient towards getting shit done. So that style is helpful and hurtful to me sometimes, I completely get that and I’m aware of that. We’ve talked, Mark, is that a weakness or a strength? It’s a strength and a weakness, but it’s not a strength I’m going to consciously get rid of.

Mark MacLeod:
I think it’s a superpower, personally.

Jordan Huck:
That’s very kind of you to say that.

Mark MacLeod:
It’s a magnet. It means you’re going to be hurt. If a key person leaves, you’re going to take it personally. But I also think it’s the passion that attracts people. It’s a passion and an energy that attracts investors because they’re like, they feel like it’s inevitable.

Jordan Huck:
That’s how I feel. I’ve always felt it’s inevitable. If you’re like an early-stage person in Toronto and you’re listening to this right now and you want to get in, you want to get in and you want to… Because you got to get in and operate a little bit, and then maybe you get an opportunity to start. It’s like you should want to go somewhere where everything’s not working. I don’t get it when really brilliant people in Canada are like, well, it’s not working. You’re there to get it working! The value is created… Like, Mark, I know we’d agree on this, when I have this thing mechanized flawlessly, the product we’ve built, every feature we’ve built features for three years, I’m paying back cohorts in four months, I got 500 sales reps, I am easily replaceable.

Mark MacLeod:
Yeah, so true.

Jordan Huck:
I am easily replaceable. The value is created now. And if we can just embrace that mindset, I don’t go do things that work. In my mind, that’s not what I do. I don’t go and do things that are working. I take things from nothing and I make them something. Because that’s the hardest thing to do in business. So it surprised me… It’s not someone’s fault. I don’t know, I guess I’m just making a comment. I don’t begrudge anybody. I think it’s another muscle that we can build which is like, okay, it’s not working. How do I work to get it working? And there are… I look at my VP of engineering. He’s done an incredible job of taking something that wasn’t working to get it working. There are exceptions to that rule and those people will just be tremendously successful. I can’t say how highly they are regarded and valued by people like myself.

Mark MacLeod:
I love that. And it seems like counterintuitive advice, right? Go to a place where it’s not working but that is where you’re going to get the most growth.

Jordan Huck:
Yeah, there’s obviously some criteria there. You’ve got to believe in the CEO. Is it a good ethical person that you believe in? You’ll be treated fairly and you’ll learn and get better. But anybody can just lock into the multinational…

For people who want to get into that type of that want to be early-stage, your function shouldn’t be perfectly working when you get there if you’re taking it over. Or there isn’t an opportunity for you—you want to align yourself to the creation of enterprise value for the business.

And the creation of enterprise value for the business is mechanizing and making things repeatable. Sausage maker Mark, you gave me that term. And so you want to be a part of taking that. Is it a big market? You know, all those things. And I think the problem is we just haven’t had enough. We need Notch to go be and it will be a 100 million dollar revenue company. And the people that were here and participated in the creation of enterprise value get to benefit tremendously and then they go invest in other companies.

Mark MacLeod:
Yeah, I love it. You know I completely agree with everything you’ve said and I do think maybe some people gravitate. Let’s go just find the thing that’s working, but even that thing has issues. I think companies exist in one, startups exist in one of two states. They’re struggling to create growth or struggling to keep up with growth. Even the company that’s figured it out, it’s got product market fit, it’s got channels, it’s tripling or doubling—They’ve got issues. They’re high-quality problems. It’s like, how do I get enough people? How do I create alignment? How do I keep up with growth? There are still problems. So I think the challenge comes if you join the company thinking, oh, I’m just going to hitch my ride onto this wagon, it’s going to be easy. Well, you’re wrong, because there’s no such thing as easy.

Jordan Huck:
Yeah, I like doing the hardest things possible, and then you just transform into this new person and the growth that you can get. Entrepreneurship, anybody who steps into the ring… Early management teams should be celebrated. I salute and celebrate them.

Mark MacLeod:
Yeah, 100%.

Jordan Huck:
Win or lose. Especially… You lost? Great! Did we want to lose the capital? Of course not. They were giving their 150% best to try to build something great.

Mark MacLeod:
Well said. I love that. I know we’re running out of time here, and maybe you’ve answered this already when you talked about 100 million and creating enterprise value, but you’ve gone from almost running out of money, almost dying, literally zero revenue. Now you’re back on the growth path. What’s your dream for this business?

Jordan Huck:
So we at Notch think we have this incredible opportunity. So when you look at supply chain-specific wholesale food service, essentially the largest part of the market is this messy, fragmented, 2-4 million a month kind of revenue distribution business. And literally, 100% of those businesses are collecting offline and paying their vendors manually. And so we’ve built a product—The same integrations into accounting systems we use for AP and AR, I push and pull invoices from a system.

And so the opportunity for us starts with helping them. And we’ve churned out zero customers since the pivot two years ago on our collective.

Mark MacLeod:
Wow, zero customers in two years…

Jordan Huck:
I have churned zero customers from our and net doll retention is north of 100%. Our vision starts with payment processing, where we help collect. We help to get all these payers that are paying them in offline ways, to pay them online, and lots of different ways we’re doing that, and we keep seeing that penetration rate go up. But over time, there are just these incredible opportunities for these segments of these sorts of sleepy, offline… Dramatically underbanked, right? Like, there’s an opportunity for us to, ideally for some of these distributors, provide receivables factoring.

There’s an opportunity to provide that same lending on the payer side. We’ve built software associated with the distributors that are using our collector product. Our focus has been on increasing the breadth of offerings going out to that segment of the supply chain and that we’re going to be a $100 million revenue business without having to have 500,000 like SMB, SaaS, very small ACV, it can be done. FreshBooks has done it successfully. It’s a very difficult road.

We want to be a big part of our customers’ investment in software and there are all kinds of ancillary products that we’ll be able to distribute to them that will benefit them and help us create a large company.

Mark MacLeod:
I love it. Well, I can’t wait to see that happen. Even though it’s going to take a long time. And I know that if I ever… Only because great things (take time).

Jordan Huck:
No, of course it will.

Mark MacLeod:
And I know that if I ever need a hookup to a crazy Toronto restaurant, you’re the guy to call. Actually, not even just Toronto. Jordan, thank you so much for taking the time. I really appreciate it.

Jordan Huck:
Thank you, Mark. Really appreciate it.

Mark MacLeod:
Thank you. All right.

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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