John Pestana

Reality Engagement —— I started PHX Ventures because I want to help founders in Arizona build high-growth software companies that achieve venture scale. I can handle the good, bad, and ugly of company building. I’ve lived it. I can handle losing money. I don’t like it, but I can handle it. I can handle bad news and disappointment. Company building is a roller coaster. I can handle a changing market and new competitors. Market opportunity and market dynamism go hand in hand. I can handle co-founder breakups and key team member departures. It’s not great but it’s fairly normal. I can handle bad quarters and product problems. Stuff happens in startups. What I can’t handle is a lack of engagement with reality. Willful ignorance or disregard for data won’t make your business better. If the math of your business is telling you something is broken then it means something is broken. Let’s just fix it. And let’s fix it right now. Let's at least try. I love optimism. But I love realism even more. Broken things tend not to fix themselves. In my experience, the best founders have the highest engagement with reality. Just tell me what about your current reality is giving you angst. Tell me the problems in the business. Just tell me. Don’t sell me. Tell me. I can handle it. And maybe I can help. #founders #startups #b2b #saas

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A birthday ode to my partner Scott Paul, Utah startup scene's court jester. Scott's been one of my closest friends for over a decade. Scott is simply the most unique person we have in our ecosystem. My favorite way that I've had him explained is "you can't describe Scott, you have to experience him". Scott's a weird human and that's my highest compliment. People who aren't outliers are dull to me. That's why I've chosen to spend my career around crazy founders and big dreamers. Scott centers his life around the next novelty and experience. His favorite kind of novelty is learning about the humans of this earth, how they tick, and what makes them who they are. This is his endless and tireless search, and when he finds ones whose energy and ambition are inspiring to him, he backs them. Prior to us starting Convoi, he did that with his own money as an angel investor 70 times. He did it as an advisor, formally and informally probably thousands of times. I was on a call with a founder of a series A Utah startup and he told me that he and his co-founder connected because of a Scott Paul LinkedIn post. Scott, of course, was the first angel check. Scott is one of the greatest sources for good in our ecosystem. He's countless people's First Believer. He was my first angel check on my first business and in many times of my life, my first believer. One of the biggest mistakes I see people make is to write off Scott as just a wig wearing, inappropriate email sending, get kicked off LinkedIn-ing dude. He's truly one of the most selfless people that gets his greatest pleasure from helping others succeed. I'm sure there are many that will see this that can say they owe a large part of their career to Scott. Scott's one of the best we have in Utah. In a outlier business, there's no greater advantage than having the ultimate outlier as your partner. Love ya, Scotty P. Love building with you.

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One realization we've made at Convoi is if we hear something 50+ times we need to build it for the Utah Startup Community. We've built three things so far, and just about to launch number 4 in a couple of weeks. First, we started Convoi Ventures to bring more capital to the earliest stage of startups. ~2.5 years in, we've backed 40 companies, 2/3 that are pre-revenue and 50% are first-time founders. Second, we started Utah Tech Week to create a grassroots event that will be forever focused on Utah and it's early stage startup community. The first year there was 114 events, and this past January, there were 197 events and 15k attendees. Third, we started a program for early stage founders that we think is going to be the flagship program for early stage founders in Utah. Our alpha program was a big success, and beta this summer will be even better. We'll announce after we're out of beta. :) Fourth, we constantly hear of folks at the largest companies we have in Utah that want to support our early stage startups. We're going to be pretty quiet about this one #IYKYK, but if you're a VP or above at a tech company (public, or Utah based series A/B) company, please DM if you'd like more details. Thank you for letting me interrupt my social media fast for this post. Back in my cave for a couple of months.

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We recently had an opportunity to gather with finance leaders based in Utah, all the way from public company CFOs to finance leaders of fast growing Series A-stage startups. It was a great discussion with a great group. A couple things stood out for me from the discussion: 🤖 A handful of these leaders mentioned that they are starting to see some tangible productivity gains from the AI in their organizations, mainly around developer productivity and getting more done with less. It still felt early, but interesting to hear anecdotes of the promise of AI being realized. ✂️ On behalf of our portfolio companies, we asked what it takes takes to sell software into their organizations given the current economic environment. Their feedback confirmed a lot of what we were hearing from our B2B portfolio companies: ▪️They are looking to consolidate vendors, it's very unlikely (if not impossible) they would approve a net new vendor unless it is replacing another tool/service they can cut from the budget ▪️ROI is extremely important. They are looking for tangible evidence that the tool will drive revenue and/or reduce costs. ▪️The mentality of "everyone gets a seat" is over. They are looking for justification for why certain teams and individuals should get a license. ▪️ They are approving every purchase. Just assume the CFO is a part of the buying committee even if it isn't obvious. Bring the CFO in early to the buying process and arm the internal champion with the ROI case along the way. Really grateful for this group for gathering and sharing their insights!

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"The key to effective partnerships is thinking, 'What's in it for them?'" I loved this quote from Ira Goldfarb, who joined us for our Founders N' Funders Founders Dinner last night at the Alta Club in Salt Lake City. Ira has 40+ years of experience in helping create effective go-to-market strategies for startups. Some of the biggest names in tech bring him in to help solve their go-to-market challenges. We are fortunate to now have Ira as part of the Utah tech / startup ecosystem -- he is a wealth of knowledge, and we all benefited from his wisdom last night, along with the shared insights among a fantastic group of startup founders. 👏 Special shoutout to Timothy Lipton at Momentum Finance for organizing this event and helping us bring together such a powerful group of entrepreneurs. 🍽️Zack Oates🍕 - I am more and more impressed with you as a founder the more I get to know you! Congrats on closing your recent funding round for Ovation that affords you the additional resources to make massive improvements in efficiency for the entire restaurant industry! Marcus D'Ambrosio, founder of Adaract, is on the cutting edge of tech creating robotic innovations that add humanistic elements to robotic machines. Really impressive technical founder with excellent business acumen, who has entrepreneurship in his genes. Matthew Roberts -- It was so good to catch up with you!!! Everywhere I go, I hear people talking about Savvi Legal and PaperOS these days! As an early investor and advisor, I'm a HUGE fan of what Matt and Dan Roberts are building! Love seeing so many investors and funds using them for SPVs and fund admin. But it's even more exciting hearing about what is in the works!!!! 🚀 Nathan Davenport -- Founder of Nebu. I can't wait to get a couple pairs of the outdoor pants. I'll be placing my order this week! I'm always jealous when I see Tim wearing his. 🏔️ Check out https://nebuclothing.com! Eric Lo -- Founder of Krado Inc. is another exceptional founder! Congrats on winning a HUGE contract in the space! I know Tim is a direct investor and I'm an indirect investor in Krado. I love the enormous market potential of what you are doing to disrupt what has been an impenetrable market in the ag space! 🌱 Travis Shreeve, CPA -- Great to finally meet in person! I'm excited to intro you to Dan Tolbert who was involved in The Chosen and worked directly with Angel Studios. The Fablehaven movie series project you are heading up is super intriguing and impressive! 🐉 Jeff Handy -- Congrats again on the somewhat recent funding round for Qualiti. You got a great personal endorsement from Matthew Roberts and several others around the table. I can't wait for the whitewater founder adventures you and Matt were talking about!!! 🛶 Scott Cummings --- So great to see you there! I loved the discussion about your success in relying on fractional resources and experts! Thanks for sharing your insights! #FoundersNFunders

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Calling all VC / PE / Angel Groups... 👀 I'm working on some game-changing win-win-win offerings for the VC, PE, and Angel groups around Utah and beyond From bootstrap basics to pre-seed and Series A acceleration, companies at different stages have unique branding and online presence needs Whether it's building brand assets, refining pitch decks, or rolling out custom solutions, the goal is to elevate startups (and their investors) to better positioning and longer-term success Collaboration and innovation are at the core of these initiatives, and I can't wait to see the impact! Who do you know that should hear about this? #VentureCapital #PrivateEquity #AngelInvestors #StartupGrowth #Innovation #BusinessStrategy #Entrepreneurship #Branding #Webdesign

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A recent chat with a portco founder reminded me that #B2Bsales 101 says you can’t sell your product to anyone - the customer has to buy it. Which means, the product you think you are selling is not necessarily what they are buying. A classic example would be a kitchen knife. Who buys a kitchen knife just to put it in a drawer? No one. People buy a way to chop vegetables. If it’s a knife, a sword or a lightsaber - doesn’t matter. They want their vegetables chopped. What are you really selling? A way to chop vegetables. That means your first task in a B2B sale is to find out: what does the customer think they are buying? What do they actually need? If it’s chopped vegetables, show them how neatly you can cut them; don’t spend time showing how amazingly long the knife is or how well the sun reflects off the blade. Or in the B2B context: hey Mr. Customer, what is the problem you’re trying to solve? Great, let me show you how my product solves it for you. Extra points: give your customer credit that they’ve tried other products. It’s perfectly valid to ask: “what have you tried so far? What is it you did not like about the other solutions? (=this is the unmet need. Focus on that and you increase the changes to close the deal)

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What a week this has been for innovative companies in Seattle (first Smartsheet and now OctoAI). Today NVIDIA made public the news that they have acquired Madrona portfolio company OctoAI. Partnering with the founders since Day 1 (ok Day -1) has been one of the greatest experiences of my life. Luis Ceze, Jared Roesch, Tianqi Chen, Jason Knight, Thierry Moreau and Carlos Guestrin were all involved in the research and insights that helped create the TVM open source technology at the University of Washington computer science school and then the creation of OctoAI back in 2019 to drive commercial impact with this technology. From sorting out the terms of the original "pre-seed" round over a bottle of Caymus Vineyards wine to helping Amazon Web Services (AWS) understand the dynamics around the open source movement in Applied AI to learning our way in to product-market fit with the BEST inference optimization service available (OctoAI can help customers find their optimal fit of performance, customization, and cost), OctoAI has been the best! The company has helped set the table for AI-driven innovation for the years ahead and they will be a perfect compliment to the many capabilities at Nvidia. Luis, his leadership team, the board (including Carlos Guestrin Lip-Bu Tan and Mike Dauber) and so many "friends of OctoAI" know what a motivated, talented and authentic group of people are associated with this company. It is inspiring to see an acquisition at a total deal value of over $250 million in this highly dynamic and fast-moving phase of AI disruption. It is even more exciting to anticipate what will be possible with innovations powered by AI models and related technologies in the years ahead. Madrona has been investing in Applied AI for over a decade and we truly believe that we are just getting started! One of the hardest judgement calls as an investor and board member is to assess the benefits and risks of selling a company at a key inflection point in the journey. Nvidia made a compelling case that the impact for the OctoAI team and technology would be maximized within the market leader for AI infrastructure. I will be rooting every day that they all maximize this impact in the months and years ahead!

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How to pitch: The company has zero traction —> “We’re early” You only have 2 customers —> “We’re working with design partners” You currently have no revenue but hoping some pipeline finally closes —> “we’re on track to exit this year at $3M ARR” You’re in the natural kill zone of a FAANG —> “We view them as partners rather than competitors” There’s no way the tech can actually work —>“We’re manifesting the future” And of course: One of your developers uses Co-Pilot to write some front end code —> “We’re an AI company”

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🚀 Venture debt covenants might sound like a small part of the deal, but they carry huge implications for your startup’s future. 📈 You need to be strategic in your negotiations to avoid any pitfalls down the road. It’s all about setting yourself up for success, not stress. Dive into more details in the original Kruze Consulting post. The link is in the 1st comment. 👇

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I believe two of the big winners over the next 10 years in the SMB category will be PE who are rolling up the businesses and GenAI powered software that makes running these businesses significantly more turnkey and/or profitable. Thanks for having me on Jay Kapoor. If you want spicy takes fast forward to 25 min mark. If you want to get deep in market analysis buckle in for the whole thing. https://lnkd.in/d8M7Jyrx

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There's gold in these hills: 👉 Investments in retention can double as acquisition vehicles 👉 Customers do all of the selling to the prospects who join the events 👉 You can do no wrong by doing right by your customers Timeless lessons, Drew Neisser.

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🚀 Big news: ServiceTitan, a SaaS leader in field service management, has officially filed its S-1 to go public! With $685M in LTM revenue and 24% YoY growth, it’s clear the company has carved out a significant niche in the market. However, their -$183M net loss and growth rate bring challenges. By SaaS standards, ServiceTitan falls short of the Rule of 40—a key metric combining revenue growth and profit margin to evaluate efficiency and scalability. Their score is -2.7, well below the ideal 40%. Excited to see how the market responds—your thoughts? Let's discuss! #IPO #SaaS #Growth #Startups #Tech

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Orb (#uncorrelated) raised $25M to continue building their pricing and billing platform that lets companies automate a range of different billing modes e.g., usage-based, subscriptions, or a mix, marry analytics and billing, collect and meter product usage data, invoice customers, generate revenue reports, draw on product usage insights to find revenue opportunities, model out alternative pricing plans (thus enabling experimentation), orchestrate changes in real time, schedule future price changes for certain customer cohorts or contract renewals, directly embed draft invoices into product billing portals, surface past-due invoices, and recover failed payments automatically. "Orb gives companies a single source of truth that can connect every unit of product usage to revenue. We’ve found a particularly strong fit in AI, cloud infrastructure, fintech, and dev tools, and have seen most of our growth come from those verticals.” Orb’s revenue grew 5x in the past year, and the customer base tripled to include brands such as Vercel, Replit, Pinecone, and Perplexity. https://lnkd.in/gYh4y2tg

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I’ve had some thought provoking discussions with #founders, investors and fellow advisors recently on #marketing efficiency, channel mix, measurement and incrementality. As someone who’s recently transitioned from leading in enterprise environments (Google) to advising scrappier setups, I know it’s not easy. Be that as it may, here are a few observations & rules of thumb worth considering: 1️⃣𝗔𝗽𝗽𝗿𝗼𝗮𝗰𝗵 & 𝗠𝗶𝗻𝗱𝘀𝗲𝘁: ✔️Spend more time on decisions where implications cascade down vs. silo-ed ones that have less surface area impact. ✔️Therefore, when it comes to high-level channel strategy (or that eternal brand vs performance question), it's better to be directionally on track vs. obsessing with precision at a narrower level. ✔️There is no silver bullet that will solve everything overnight. Yes, some channels could give you clear signs of success early on, others give you a proxy or lagging indicator. That has no bearing on effectiveness. 2️⃣𝗖𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗖𝗼𝘀𝘁 (𝗖𝗔𝗖): ✔️I’m not sure how many founders or investors truly understand 'demand creation’ vs. 'demand capture’ or how to evaluate certain channels over a longer time frame. ✔️The oft quoted #CAC metric is, more often than not, a garbage in - garbage out situation. It’s the easiest metric to game in the short term. 3️⃣𝗠𝗲𝗮𝘀𝘂𝗿𝗲𝗺𝗲𝗻𝘁 (+ 𝗜𝗻𝗰𝗿𝗲𝗺𝗲𝗻𝘁𝗮𝗹𝗶𝘁𝘆) 𝗳𝗼𝗿 #𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀: ✔️You could argue that at an early stage, any marketing is likely to be more 'incremental’ than not. I agree that the benefit of better measurement (better channel allocation & forecasting) should be > the cost to implement it (analytics resources, dashboards). ✔️However, when you expand to 3+ channels, it is worth knowing what channel is in the driving seat [causing your car to move] vs. tagging along [pun intended] for the ride. ✔️It’s interesting that MMMs, the stalwarts of econometric measurement, are witnessing a comeback as marketers look for a future-proof solution in light of cookie deprecation and cross-channel tracking issues. There’s likely to be more innovation here courtesy LLMs, particularly solutions that are open source, lightweight or more actionable. ✔️ While modelling & experiments are the collective holy grail, there are tactics that can improve the chances of your marketing being more incremental as you scale. a) If you’re running acquisition campaigns, exclude your existing customers from being targeted with paid ads. Sounds basic, but this often gets overlooked. b) Avoid over-indexing on brand SEM or retargeting campaigns. The last click ROI may look great, but you’re just using paid ads for use cases that your owned touch points should address efficiently.

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At most networking events… Business owners shake hands, exchange business cards, and go home. HumanX has a different approach. You’ll be paired together in 1:1 conversations with investors & AI startups. You’re not just adding people to your rolodex. Deals will be made.

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Rolling into another day of the Primary Summit. Hit me up if we should connect onsite. Kudos to the Primary Ventures team so far, as yesterday’s Pre-Seed Summit was on point. Mar Hershenson, Benjamin Sun, Chris Douvos, Zach Weinberg, and Graham Pingree all dropping helpful nuggets for fund managers. Some paraphrased highlights: - Chris Douvos (AHOY Capital) - Most fund decks are terrible. Start with your people (not your strategy) and know you have about 6 slides of his attention. - Zach Weinberg (Curie.Bio ) - beleives SF’s AI talent is a significant advantage over NY, wouldn’t build AI in NY. Also questions if VC exits can keep up with VC expansion (generally hilarious and smart Twitter follow) - Mar Hershenson (Pear VC) - VC is so much more competitive now. It’s not enough to be an ex-founder with a great network and domain expertise. Have a better “why you are different” or do something else! - Benjamin Sun (Primary Venture Partners)- still sees arbitrage in going long NY venture (vs. SF). Do the work to keep various influential networking nodes aware of what you’re doing and how you think.

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One awesome thing about our work at Groops is that the organizations who seek us out are the ones who care deeply about their people. Summer Friday is one of those companies. Culture is built into their core values and shapes everything they do. Every decision they make is grounded in how it impacts the human doing the work. I know because they have Groops for their entire company and I also lead their executive Groop. We have been with them for over a year now. We bring experts in organizational psychology to meet with their teams on a regular basis, teach core content in high cohesion / high performing teams, and help them have regular, honest conversations about what is working and what they want to improve. We provide ongoing insight reports with recommendations so everyone stays in communication. So, we end up knowing our partners well. They invited us to lead a full day (virtual) retreat last week where everyone took a personality assessment and we spent the day discussing how team makeup impacts their performance, how engaged they feel, and the direction of the organization. This is particularly important for them as they are a virtual company and clear communication and exploration and articulation of team functioning are mission critical. Having these types of conversations is also how cohesion is built. Bravo Summer Friday. We are proud to be your partner. Awesome work Rob Simone, Sarah Roberts, CPA, Michael Cruz, and Alicia Wiedemann. You are great leaders. And thanks Charlotte Bingaman MArch EdM , Sydney Davis, and Allison L. Barnes, MA, PCC. I am proud to have you on our team. #peoplematter #workplacewellness #peakperformance #IOPsychology #IOPsych #industrialorganizationalpsychology #cohesiveteams #connection

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Big shoutout to Geoff Woods for his new book “The AI Driven Leader”. I got an advance copy and can’t wait to read it. For all of my business and executive friends, this book is different than just how to write a better sales email. But using Ai as an executive thought partner. #strategiccoach

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