Sam Jacobs

So as we moved into this world that I'm describing,

from uh 2023 that was the environment that we were operating in and we had to make a really difficult decision about what the business was going to look like going forward so net revenue retention also decreasing right it was a lot easier to have high net revenue retention in a seat driven model if everybody was hiring more people and every sales team was expanding in a world where everybody's consolidating down to more rep efficiency seat driven model is going to be

questioned and there's a lot of people talking about usage-based consumption pricing, not seat-driven pricing because buyers want more flexibility in how they allocate costs.

At the same time, you've got a bunch of other disruptive forces right now for growth stage B2B businesses, largely automation, offshoring, and AI.

That means that a lot of services that were premium services,

the most prominent example of which would be call transcription and recording, that used to be a whole company worth $7 billion.

Now that's a feature of most revenue platforms and a commodity feature at that.

So we're in this really difficult environment where NRR is falling

customer acquisition cost is increasing, growth rates are decreasing.

Another data point that I would give you that was just verified is that it used to be growth at any cost, which means that growth really was worth almost, not infinitely more, but probably

maybe 15 to 20 times what free cash flow was worth.

Today, we're in a world where growth is still more valuable than free cash flow, but only three to one, right?

So growth is now compressed from being worth probably 15 to 20 to one, down to three to one.

We still want growth.

You still are not going to get a premium valuation without growing, but efficiency and cash flow is much better for the business.

This is the world.

Now, what builds durable businesses, what builds great businesses, it's really retention, right?

It's really retention.

And if you look at the companies that drive kind of logarithmic exponential growth, the companies that drive the best growth over time, those are the companies that are focused and obsessed about their customers.

And when we talk about customer-driven value, that's what we mean.