John Hill (00:00)

Welcome to an episode of Founders Growth. My name is John Hill. I’m the founder of Adapted Growth, which is a coaching and training company for people who work in and around revenue, specifically with founders. Today, we have a very old friend of mine who agreed to come on the show. We have Kevin Xu on the show today. Kevin is the CMO of Kepion, which is a business intelligence tool working at the enterprise level. He’s also done other entrepreneurial endeavors. Kevin and I have known each other since seventh grade.

Kevin Xu (00:28)

Yeah.

John Hill (00:28)

Yeah, so a very long time because we’re both old as hell now. So can you give a quick synopsis about Kepion and who you work with, and just the dime store tour? Then we’ll kind of dive into the topics that I’m excited to dive into with you.

Kevin Xu (00:41)

Yeah, no, absolutely. A little bit about Kepion: We started in 2009, Seattle-based. We focus a lot on helping companies get a better grasp of how they can plan for the future.

A lot of times that can be a little bit challenging when you have a lot of people who have their own perspective, and then as well as data everywhere. The tool of choice has always been Excel for that case. Just, Excel is great. I personally use Excel on the daily. But especially when you’re trying to coordinate a lot of that together, it’s a bit of the challenge of manual consolidation and bringing all that into one place, and building reports and insights out of it, too.

So that’s where we specialize. We help a lot of companies really bring it all together, having very unique ways to be able to drive automation in areas where they can have very complex rules about how their business functions, all in a more driver-based manner.

I will say one of the key things is that in today’s world, when you’re talking about how to get better insights using AI, I think it becomes even more relevant when you’re trying to bring data as a first step to the AI models so that they can help you more. So that’s also the next step that we’re working a lot on—to be able to bring what we’ve been doing into the next step, which is how we can bring more insights of AI automation, as well as the innovations around it, more to organizations out there.

John Hill (02:16)

Okay, I had not even—I know what you do obviously, but I have not even thought at all about how this AI revolution that everyone is going nuts about would impact your business as business intelligence and planning and stuff like that. Obviously, there is a lot of room.

Are people in your space kind of nervous about business intelligence and stuff like that? Or is everyone just leaning into AI and it’s going to be okay because we’re just going to be faster? What are you seeing at your levels of business networking?

Kevin Xu (02:48)

Yeah, it’s very interesting where we are today because there’s the part where AI applies to our organization internally on how we can be more efficient in helping serve our customers and support our partners as well. Partners, what we mean, is partners we work with to basically provide our software solution to them to service their customers as well.

So for us, we evaluate AI in our internal operations. But then also a lot of things with companies today—coming back to the planning realm—is that there’s quite a bit of data in your organization internally that they want to get a better understanding of how they can use that data in a way that they can plan better for the future.

Not only within data of their own, but in today’s world, everyone pays close attention to the news. Day in, day out, very interesting times we live in. There’s tariffs that come in—big impacts to the business, the bottom line, their demand as well that affects the top line, areas of geopolitical that affect supply chain and how you want to navigate the markets you serve as well.

All those are kind of a repeat manner of what happened during COVID time during the pandemic, where once that hit, everyone was like, “We can’t just make back-of-the-envelope plans or what-if scenarios anymore. We can’t even just have a static plan that we did earlier this year. We have to revisit.” We also have to exercise different, full-blown scenarios that cross our sales teams, our ops, our warehousing, our production, and see what we can realistically do in case demand does come down or vice versa.

Like, “Hey, we have a product that everyone needs,” just like a lot of PPE and such during the pandemic. Those companies skyrocketed, right? How do you get them in very quickly and have a backup plan for that? That’s where planning becomes ever more important in organizations. It went from a “nice to have” prior to the pandemic to a very critical need. It used to be just centered around finance, but finance becomes sort of like a hub. Then there’s all these spoke areas of departments that also need planning that feeds into what finance needs to hit target goals, be profitable, be cash-flow positive, and survive as a company organization. That’s where we’ve seen quite an uptick, especially during the pandemic, and now as we continue in times of uncertainty as well into today.

A lot of those topics are very top of mind with organizations. On top of that, AI becomes the picture of how this affects their workforce today. Essentially, it’s not a question about who replaces whom, but how a company overall can be more efficient. Part of that is really looking at still keeping a good culture of people that can work together, but in a thriving way as well. You have the tools and ways to be more efficient with things that aren’t always so redundant, and really elevate yourself to areas where you can be more like the thinkers—the analytical thoughts about what is going to be the next step for your organization.

We do see AI as that tool more—continuing as a tool. It’s a little bit above that tool because you’re kind of training it and getting it refined to what your business wants to be. Where it goes from here becomes the next step. A lot of talks about agentic tech and how that could become more automation for organizations—those are the interesting times we live in today.

Even for us as a SaaS company, a lot of companies we work with as customers are more the mid-size to enterprise-type level companies. A lot of them, we engage in conversations about what we can do not only with the processes, but really how we can bring that all together. That way we can layer in the next wave of technology around AI and leverage that more for the business as well.

John Hill (07:25)

That made—okay, so I like the thing that you said in there, because you said this thing and it kind of mirrors a dinner I was at recently. It was an AI dinner, so there’s all this business talk around it. This person brought up this thing, and I think you’re saying the same thing: Everyone has the choice, right? If you’re building a product or a SaaS thing, I think most people are trying to find some way to market AI in relation to their product, right?

It sounds like you’re taking the opposite approach of maybe not chasing that shiny thing, but just thinking about the operational improvements inside of your business. Are you seeing people trying to dive into it from that other way—well, here’s this new marketing thing of like “now with AI,” and they’re thinking that’s going to be enough to make an impact? Or do you see more people treating it like how you’re talking about it—like internal improvements?

Kevin Xu (08:04)

It’s a little bit of a wild west right now in a way that there’s that spectrum. There’s companies out there—in this world of AI today, there’s going to be the big hitters like Google, OpenAI, Grok with X, and with DeepSeek. These are kind of the big LLM sort of AI companies that are going to continue to have big movement shifts of AI.

Whenever you talk about that, there’s then the ecosystem that you leverage in order to provide services for their customers. At the end of the day, there’s going to be a lot of marketing-driven messaging around AI. You have to get in the mindset of a lot of company owners as well. Because we’re more B2B SaaS, we’re targeting companies regarding what they’re looking at top-of-mind for solutions that can help them.

The big thing about AI is there’s this kind of moving freight train. Direction-wise, we have a general sense, but we don’t know where pinpoint it will get to at certain points in time. I think some companies out there are starting to put a timeline and a frame of mind on where the progression of AI will be. What that does for a lot of company owners and leaders is they’re going to have a sense of urgency and wanting to get on that train and adopt as quickly as they can. At the same time, it’s moving at a pace where it takes time.

Besides technology, it takes time for adoption and proving out use cases to be developed fully a bit more, right? I feel like in the AI front, a lot of cool features and cool pieces are in play, but weaving them together into use cases—full-blown automation for companies where it’s truly taking out that whole talk about taking out workforce and such—it’s not fully there, but it is heading in that direction, if that makes sense.

That’s why it is definitely interesting where a lot of really bold claims are moving towards, like, “Hey, we’re going to start moving at this pace, workforce is going to come down this way.” But then we’re going to see—I think Anthropic mentioned about that single-person billion-dollar company that’s going to come out in the next few years. That’s going to come out as the next wave of entrepreneurs and company startups. So these are kind of bold claims, but it’s very interesting because you think about it and you’re like, “Wow, then maybe we should look into it” type of emotion. That’s the trigger point for a lot of companies at this point.

John Hill (11:04)

Yeah. So that brings up an interesting point, right? Because I think there’s a lot of initial room just for time savings of AI. But I think eventually all of that is going to be just table stakes, right? So then if you’re just trying to use AI in the commoditized version of just trying to get more done with less cost and everything else like that, I think we’re going to run out of that runway fairly quickly, which is interesting because I think that’s what most people are thinking about it as. It’s like, “Okay, how do I save time?”

Here’s my question: How can people or founders or company leaders do a better job of leaning into the innovative way of thinking about AI, not just like, “Okay, can I use this thing to save me an hour of time each week?” How can people start to think about the true “what-if”—what could this thing do? How can people do a better job of that?

Kevin Xu (12:03)

Yeah. I think right now it’s very interesting times because before the uptake of ChatGPT, OpenAI, and the availability of people being able to access it, we already knew the known bandwidth, time, and capabilities of what we can grow out to be. So it was very incremental in a way that if you’re a person, you equal out to this much output, with varying levels of capabilities.

Now it’s a bit of, “Okay, now you have this whole new toolkit. What do you want to do with it, and what can you make of it of your own?” The best way for founders—there’s definitely things you hear, things that you can piece together conceptually, but it’s only when you start getting your hands dirty on it. Meaning that you start playing with the tools, you start really prototyping out what this means for this case, and not just take it surface level. Actually dive one iteration deeper, double click into it, really get to a good MVP or v1 of what you’re trying to knock out—whether it’s an internal automation, internal process you’re trying to knock out, or including it as part of your product offering.

Founders need to start getting more hands-deep into this. It’s a necessity at this point in age. So I will say that that’s my best advice: to really start leaning into it. You may have matured to a certain point and you’re getting comfortable in your operations, but with this new toolkit that you’re going to start working with, go back to the early days. Start working on what this is.

John Hill (13:49)

Yeah. Interesting. So less of the “I know my lane, I know my core competencies, and I’m going to hire out for everything else outside of this thing.” It sounds like what you’re saying is those bridges should be less because the AI can take up some of that bridge, right? So even if you don’t come from marketing or sales or leadership or these performance areas that we’re talking about here, these AI tools can provide some coverage. So ideally, you can probably wait to be longer and more mature before you have to go get these more cost-prohibitive strategic partners for your team. That’s interesting.

Kevin Xu (14:34)

Yeah, I would say in the sense that right now… because the motion of adopting AI really takes—you need to start from the top. If the top is not doing it themselves, then how could they set the directive example for the rest of the company? That’s number one.

Number two is that sometimes, with how you break down the walls and barriers of how this can be applicable to your own company, it takes the founder initiative to get there. Meaning that sometimes, for instance, whether I’m working with my own programmatic way of getting a process going within one of the tools today—whether it’s with one of the coding tools or one of the LLMs today—that’s one part. Or you’re leveraging services out there and trying to piece it together with that as well.

In marketing right now, one thing I’m looking heavily into is n8n, which is very much an automation and AI platform for automating a lot of processes. The first step with any of those is really: How do you connect to all your different apps and data in one place, right? Zapier and n8n are kind of the starting points for a lot of that.

In the enterprise realm, that’s really great for tools that are smaller SMBs and startups. But if you’re talking about the enterprise world, they already have established areas. Microsoft is starting to bring everything together on one platform called Fabric. That’s where we thrive the most because we have a very strong presence in Microsoft ecosystem integration.

So when a lot of companies have their data on Fabric already, we can bring all of our latest forecast plans into that. With that, Microsoft makes huge investments. They’re one of the big juggernauts I mentioned about AI. So if they’re moving another notch forward, basically customers of ours get to take advantage of that at another level as well. That’s where our advantage as a company is versus other startups or companies in our realm who invest in their own proprietary stack. It moves a lot; they have to think about how they can make the right calls and investments to adopt that next wave of technology.

That’s where we’ve been able to make better inroads as of late, and also a little bit of hedging as well. Because two years ago when OpenAI just started, a lot of companies started wanting to get into AI, but they knew it was moving at a pace where if they put their product teams or R&D teams on it, something was going to change. They were going to need to scrap and pivot a different direction again.

So that’s where we’re enabling the conduit towards AI—towards a larger picture with Microsoft—and being able to tie it across to the offering that we’re providing to our customers as well. I think that’s the part that’s going to be very interesting. It requires big investments; it requires big training data to be able to really make meaningful results come through. That’s where we see technology coming into the next layer in the next three or five years as well.

John Hill (18:20)

Man, so I’m curious, right? And then I promise we’re going to dive into the history thing—this is just kind of an interesting topic.

You don’t seem—you seem measured and very thoughtful, and you can see the direction that it’s going, but I don’t hear anything from you that indicates you feel like you’re going to miss the boat or miss the opportunity, or feeling any kind of pressure to move in this direction. Did you and the team have to come together and ask, “Hey, are we really at risk? Are we really in danger?” Was there a period of time where you guys were nervous, scared, feeling like maybe you missed the window, and this is a final state? Or is this how you’ve been feeling about it this whole path to here from OpenAI’s announcement and being able to play with these tools? Have you always been this cool, calm, and collected about it?

Kevin Xu (19:02)

In technology, there’s always this lifetime of where things start—from early adoption to wrap-up stage to a level of maturity and saturation, and then the next wave comes in from there, right?

For us, two years ago was kind of that stage where it was early adoption, even though it was such a big scale of people getting exposure to it. But whenever you’re talking about bringing it into actual day-to-day work streams, it was still a little bit preliminary at that point. So as it gets more ingrained, we started seeing and using the tools on our own site internally.

In our standpoint, there are mentions of company adoption and a lot of use case adoption across the spectrum—not just B2B, but also B2C—and in creating content, creating products, and creating services for everyday users. There are use cases out there. So when you think about AI, there’s still quite a wide spectrum that we’re seeing adoption growth towards.

When you look at our little sliver that we serve out to B2B—even though it’s a big market—the sliver that we’re focusing on in our market, there are things that our competitors are doing and we’re doing on our product offering to provide that service. But in terms of how it gets into true, game-changing organizational shift of solution value, that has not hit that sweet spot yet. I’ll say it’s starting to. So for us, it’s not to say whether we’re scared or we’ve fully embraced it. That’s number one…

Kevin Xu (21:15)

If you haven’t embraced it by this point, I can just say on your podcast here, you’re kind of behind the curve. Then number two is that it’s not only embracing it, but also seeing how we navigate the waters from here. That’s the part where there is going to be a constant wavelength along the way.

One is that there’s a more extreme view that AI is going to start replacing the workforce and starting to automate all these processes. Then you get to Anthropic’s discussion—the single person where everything is automated and it’s going to be a billion-dollar company. But on the other level, at the end of the day, you’re still dealing with other humans. You’re dealing with other people; you’re establishing relationships. So there’s still an element of relationship building with other colleagues, with other businesses, and with other partners that is going to be very much valued.

Then on the other end of the spectrum, these are still going to be areas where the true encapsulation of human judgment and insight from a human is still necessitated in quite a bit of situations as well. So with that adoption of technology, there’s going to be technology that, if it’s just in the purest form, can go into a very exponential straight curve. But you always need to mix the human element into that, and that affects the trajectory as well. So for us, it’s going to be something we’ll closely look at along the way.

John Hill (22:51)

100%, man.

Kevin Xu (23:04)

We’re going to closely continue to build our relationships with customers and build our partners as well. That’s a very key focus with us—to really continue to grow and serve our partner network, because they become extensions of Kepion and how we can service more customers with the right intention in the right way as well. So we value that, but at the same time, what can we do to do things smarter? I would say that that’s a part where we’re looking to build out more in our offering and internally as well.

John Hill (23:37)

Interesting. Okay, so I’m backing up a little bit here because I want to dive into some things that hopefully help founders and co-founders get out there in the world. You left Texas—what year was that?

Kevin Xu (23:44)

Oh my gosh, let me recall my calendar. I graduated in ’04 out of UT Austin, and then I joined some startups locally in the Austin area. It was a different world. I would say Texas was still somewhat startup-oriented, but tech was coming in. There were big companies like Dell, TI was there, IBM was there.

John Hill (24:18)

Tech was different during that time. It’s not like SaaS-y tech the way tech is now. Tech was different then.

Kevin Xu (24:18)

Yeah, there was a tech presence in Austin at that time, but in today’s world, it’s like Silicon Valley 2.0 in Austin right now.

I was in Austin working with a couple of startups, and that gave me a really good feel for how startups worked at that time. There was a similar product in a way that they did application monitoring at the hardware infrastructure layer. There was a CEO there who was a founder of Tivoli, which was bought by IBM at that point, I believe. I have to go back to my notes on it, but it was just very interesting to be in a culture of a company that was venture-backed and going through different rounds of growth. But it was very much in one context.

At that point in time, I was right out of college. One of the things I put upon myself to do was—I always thought I’d want to get into building up my own company and being able to grow something from there and build products as well. But coming out of college, I felt like I wanted to be able to get out there and see more around. So at that time, working at the startup was a great experience, but at the same time, I felt like I didn’t get exposed enough to what was going on with companies in different industries.

That’s when I was fortunate to join PTC, with their focus as a company that delivers PLM software—product lifecycle management software. They work with a lot of companies that develop products. I started out in aerospace and defense with Boeing as my first client that I worked on. However, their product lifecycle is fairly long—decades long, sometimes. So I was looking for more dynamic movement in companies. That’s when I switched into more of a focus on retail and apparel.

That kind of blew my mind because they’re the total opposite extreme in terms of the pace when products are released. Thinking about clothing and apparel, they have multiple seasons within a year, within a quarter. So they need to move quickly from concept to the store floor whenever talking about their products. That was very interesting—traveling with different companies. Mostly it was in enterprise, like with Coach, Nike, and Adidas. It was good exposure to work with clients and understand how they make products as well as what they need from a much bigger enterprise level of operations.

From there, I was approached by a good friend. That’s one of the things that I always thought was a no-no—that you shouldn’t do business with friends. But at the same time, who would you trust to run a business with? Working and growing something, I feel like it’s a marriage right there, because you’re going through harsh times—ups and downs and harsh times as well—and you need to be able to navigate with people that you can work with and trust.

There was a good friend in college that I went with. He actually is very successful in terms of manufacturing and trade in the oil industry. But there was another concept that he wanted to do around yachts and shipbuilding as well. Thinking back to 2006 or 2007, that’s when all the news was about China, the growth of China, and what opportunities there were abroad in China as well.

What was really compelling to me was working with a lot of companies in the U.S., but there was this whole new area around how China companies work, as well as how trade between the worlds works as well. So that’s where I decided—personally, I put a mission on my life saying to block off a good amount of time in your life, especially in the beginning days where you can afford more risk, to gain more experience and exposure, understand how the world works, and get your hands dirty doing that.

Leaving PTC around roughly 2007 or 2008, I joined my friend overseas. We worked with naval architects, shipbuilding engineers, and production engineers to build up all the plans and production operations for building ships and yachts, specifically in the 40- to 60-footer luxury yacht category.

Think about the timing: It started wavering towards 2008 and 2009. We were ready to go to market, ready to get aligned with dealers in the U.S. that had clientele ready, and then we hit the financial crisis. That put a stall on everything. So about two years of work—it was definitely an experience.

At that time, it was a point where we had to make a decision: Do we continue to push during this very difficult and challenging market with a credit freeze on loans, where even the ultra-rich were on a holding pattern with next steps? We decided to put a pause on that. Not to say we closed it down, but we essentially paused and brought the labor and workforce down to where it was just administrative.

Then I came back to the U.S. at that point. I was in China for about two years and then came back to the U.S. In my mind, I was going to help where I could, but then probably go back to school. One of the things I had early on was continuing down that path of understanding where I could find my footing the most into where I wanted to dive deep. One option was going back to school and eventually getting into either management consulting or going to a tech company to work from there.

John Hill (31:00)

Interesting. Okay, so pausing for just a minute because I’m excited to get into the rest of this. How were you feeling when you were coming back from China, right? Because we were friends during this time and we were chatting, but you were on the other side of the world, and Skype was garbage back then. So it was really hard to maintain communication and stuff like that.

When you were coming back, were you depressed? Did you feel like you lost? Did you feel like the knowledge was enough and you were just—because it’s easy to get yourself wrapped up in these identities, right? Like, “My God, I’m not winning, therefore I must be losing.” Were you feeling anything like that in this transition from the yacht business to maybe going back to school?

Kevin Xu (31:52)

I think that’s the interesting thing about choosing the path of starting to go off on your own, which is different from working for someone else or in the corporate world. You start veering down a path where I found myself more driven and moving forward in a different way than others that I kept in touch with as friends and acquaintances along the way.

What I mean by that is the typical conversations like, “What are you up to? How’s work?” Those conversations become completely different because even if I explain what I’m going through, it’s non-relatable to those who are working in a different mindset for someone else and looking for lifestyle balance and such.

For me, my goal was very personal: to say that even though this didn’t work out, I’m going to continue to push forward until something hits, sticks well, and drives that forward. I think that’s a unique mindset for any founder to take on—to say that you just keep pushing to the point that you hit that mark, and then take that next step forward from there.

A lot of people talk about how when you start a company, you want to keep pushing until you get to that point of product-market fit, and then you figure out how you move from there. Besides that within a single concept and entity, as a founder in general, you’re always pushing for something to the point where you get to that next step. Then you push a little bit more to get to the next step.

That’s the mindset: Even though you go down, you’re still going to get back up and push a little bit more. Sometimes with that, you can delve deep into it or rabbit hole into it, but at the same time, it’s your life journey as well. That’s why I think the founder path—you think about this guitar in the back, and you and I always talked about guitar and such—I always relate startups to rock bands. You look at how rock bands are formed, and it’s always unique story paths: how this person met this person, reached a commonality, and played a couple of things together.

John Hill (34:20)

And it’s never an easy story either. It’s always rife with struggles, fires, and getting through it—because the story is where all the greatness is, right? If everything just went according to plan, no one would have anything to talk about.

Kevin Xu (34:27)

Yeah, that’s part of the piece for founders. Often I hear about founders wanting to find advice from other founders or read books about it. At the end of the day, those are great to reference, but just know that there’s always going to be a very unique path for what you’re going to go through in each of these.

John Hill (35:02)

Yes. Okay, so I want to talk about this thing here because I’ve had this idea in my head ever since we hit record, and I can’t wait to talk about Kepion and Jeff and everything.

Before that, you were a consultant, right? You were talking about going back to school for management consulting. You’ve also done the founder thing, and you work in planning and forecasting.

Can we talk a little bit about vanity metrics versus real metrics? For founders, especially if you don’t come from sales or marketing, you have no hope of picking metrics that actually matter, right? You’re going to pick bad metrics and vanity points that don’t matter. It’s very easy when you’re a founder to look at the wrong data points and create a reality for yourself that doesn’t matter.

My perspective of what you guys do at Kepion is helping people focus on the right points so everything runs as smoothly as possible. From that founder perspective, and as a guy who does a lot of business intelligence and data, can you talk a little bit about your perspective on data points? How do people know that they’re measuring data points that actually matter?

Kevin Xu (36:04)

Well, that’s always the holy grail—understanding what metrics matter to your company. What is going to be the thing not only for what matters most to a founder or company owner, but how do you rally everyone else toward that common goal as well?

That’s a challenge with any company today. You get to a point where you start building out and growing, and people start working a little bit more in silos, not talking to each other, and kind of in their own lane at that point. Then they get lost in what overall direction the company is headed towards: How do we measure success around that? How do we rally behind it? How do we help each other around it, too?

We’ve had those challenges within Kepion and with other organizations as well. Especially in fast-growth environments, companies are trying to keep things stable as demand picks up, or as target objectives from funding or external sources say, “We have to get to this.” Then we have to fill in the dots in terms of what we need to get there, while keeping the culture going and such.

For us, a lot of it really comes down to making sure—especially with Kepion, where we started off from a funding standpoint, but over the years we continued to self-fund our growth throughout the years as well—that number one, cash is king, right? How can we optimize cash, but at the same time grow towards the right direction there?

Headcount-wise, a lot of our expense is around headcount, but we also need to make sure we invest properly into our own people. We want to continue to make sure there’s enough to foster that as well. At the same time, we want to make sure we’re not only doing well on our own, but also aligning well with the industry, because we don’t want to deviate too far where we’re not measuring the right way on certain pieces.

It really is not trying to overcomplicate what it means, but a lot of these metrics, A, help you bring everyone together on the common goal, and B, allow you to make better decisions on how you want to be more focused on what you’re offering, who you’re offering to, what you’re offering, and how.

Those types of things get a lot more focused once you understand how your business offering is aligning to those metrics. Case in point: In our offering, Kepion is a flexible solution that can tackle quite a bit of departmental areas, but also very strategic areas as well. At the same time, it can move a little bit too wide across a spectrum of offerings out there.

So we had to use a lot of data points to understand which areas represent the biggest growth and the biggest growth potential beyond that. We really started making sure that we can do those things really well in the right way. That helps us get to that scaling factor of repeatability for our business.

We went from areas where we were very wide to more focused, and now we’re getting even more focused in terms of who is going to help give the best services and support to our customers. That really helps shape our business so we can get meaningful results, because at the end of the day, it’s about how much time you can focus toward that, and aligning the teams toward that as well. The KPIs move up because of that, because you’re doing a much better quality job in those areas and you can push more throughput through the scaling factor of repeatability.

John Hill (40:36)

Yeah, interesting. Okay, so man, there was a lot in there, dude. That was pretty dope. Thank you.

Do you have any examples of data points that you initially thought were important—data you tracked and were making decisions on—that you have moved away from or shifted your perspective on? Now you don’t track this, but you track that because it’s more meaningful. Do you have any examples of that on your path as a founder?

Kevin Xu (40:48)

I wouldn’t say that it’s so much one replacing the other. I would say it’s probably more how you—and this is a natural progression with any company as it grows—start out with more high-level numbers and metrics that you start with. So it’s top-line revenue, how it progressed quarter-over-quarter and month-over-month, number of customers, and number of partners. Very high-level metrics. Then profitability, of course. Those are just the basics there.

Once you start understanding, “Okay, we’re doing this much revenue, but why is everyone so busy? Why is this whole area of customer expansion—like ARR and such—not progressing as much? Why are we not moving the needle with more use cases for these?”

You start identifying areas where, even though the top line looks good quarter-over-quarter, you break down one layer and ask, “Okay, for this customer, how many solutions do they have? How many users do they have? Are they adding any more users quarter-over-quarter? Why are they stagnant?”

These are the kinds of things you start breaking down one layer further, and then you start seeing, “Okay, now how do we optimize at this point?”

I would say that is more the progression: being able to start going from those natural conversations. Before you even get to that point, you’re just having the “we’ll get there when we get there” type of conversation. When you get there, then you start breaking it down. Obviously, people will say, “Why didn’t we do this? Why didn’t we do that?” Well, it’s because in 20/20 hindsight, we’re here at this point, we’ve matured to this point, etc.

At the end of the day, that’s a natural progression. You start breaking down, segmenting out, and then seeing, “Okay, now we need more investment here. We need more people to start looking at this. Instead of just putting people on it, what can we do with technology to streamline this part a little bit more?” That’s the fun part. You start taking what was a very early concept into something that’s starting to hit the market well, and then you refine it a little bit more.

John Hill (43:28)

The thing that I’m hearing that I find so fascinating is that no one really cares about Kepion until we have an expectation that’s not being hit. Like, why is this not growing at the rate that we thought? Then, why did we even think these things were going to be happening?

We both have the curse of knowledge here, right? Because you’ve been in this space for a long time. I’ve not been in this space for as long as you have, but I got some good coaching. So even the concept of KPIs versus outputs, right? Founders who have not done the management consulting track or the consulting track often put all of their hope on these outcomes without thinking about KPIs, activities, behaviors, or initial efforts that lead to these things.

If someone is not familiar with this concept of KPIs and the actions that lead to the outputs—how it makes more sense to be focused on the leading indicators rather than the lagging ones—where do you tell someone to start diving into that stuff?

Kevin Xu (44:25)

In all honesty, if I’m not talking about KPIs and I’m just talking to other founders at different points of their journey, I would say there’s still a preconditioner or predecessor to talking about KPIs. The predecessor to that is that you need to really get your product to hit home. In order to do that, whether it’s defined as a KPI or not, at the end of the day, you just need to make sure you’re serving your customers in the most kick-ass way possible.

Meaning that you’re able to really listen to your customers and really vet it out where you say, “Hey, as you’re starting to use it, tell me everything—the down and dirty. What do you like about it? What can we do better about it?” Be very intentional with it. At those stages, it’s not going to be so rigid; it’s going to be very fluid. You’re going to want to react very quickly. You want to not only make a customer happy, but also realize that you’re the center point for a lot of feedback. You’re not going to take in every single piece of feedback, either—that’s the other part. But you want to use those as very valuable data points to help shape the product even more.

Once you have a really strong core of what that offering is, then the KPIs can come from there once you start plugging it into the right operations with folks who are going to focus on different areas of how to serve it out. Then, to me as a founder, the KPI is really to see how well that core product—that concept you developed—can continue to iterate and be executed going forward.

When you think about simple KPIs—like what your ARR bookings are, what the lifetime value is on it, or how you can get your acquisition costs lower while getting more LTV—those are the kinds of things where you just see continued progression. As long as you can see a high-level cockpit view of how progress is being made, if that makes sense. So I think KPIs do help focus, but at the end of the day, it’s something to focus on a bit more once you hit that product-market fit.

John Hill (46:50)

Okay, cool. Yeah, I mean, you were the first person to ever talk about KPIs with me. I don’t know if you remember this or not. For the people who are watching this, my first real attempt at technical sales was you and me talking together over Skype, and you were trying to explain extract, transform, and load processes to me.

Kevin Xu (47:13)

ETL processes.

John Hill (47:14)

I don’t know if you remember this or not, but we were trying to see if we could work together with me coming on as a salesperson at Kepion—which would have been disastrous at the time, by the way. That would have been a huge shitshow, right? I didn’t have the skillset or the knowledge, but you were trying to help me out with it. That’s where I first started to understand tech and the difficulties of tech.

Going back to the story: You’re back here, and it doesn’t sound like you’re remorseful or upset about the yacht business experience. You’re just trying to find yourself and your lane. So now you’re back, and you’re thinking about school. How far down that path did you go? Did you take the tests? Were you applying, or was it just an idea, and then serendipitously you had a catch-up with Jeff and it went from there? How do we go from Kevin thinking about a master’s degree to Kevin launching this business?

Kevin Xu (48:12)

It was a timing thing. Right when I came back from China, I was already talking with my current partner here at Kepion, Jeff, who is our co-founder. His story is that he was working for Microsoft during those years I mentioned when I was at PTC and in China. We both went to school at UT Austin before—we were both computer science majors at that point.

He worked with Microsoft on a product that was the predecessor to Kepion in the sense of planning, budgeting, forecasting, and providing analytics, but as a Microsoft product out in the market. He also went into consulting for various companies on their product as well. Then in 2009, they sunsetted that product. It was a little bit due to the financial crisis, but essentially the product was discontinued.

At that point, even for my partner Jeff, he was in a similar limbo state. He had put a lot of his time and career towards this product, and his plan was to continue to consult on this product going forward. If you’re one of those consultants on that product—especially being a product developer—you’re going to be a top-notch consultant in that field for quite some time.

So at that point, it was a unique junction. He was going to think about going back into tech or areas of consulting. But then one of his colleagues had an idea: “Well, Microsoft left the market. There’s this big void. I kind of know every part of the stack here. Maybe we build our own. If I build my own or work with a few others, maybe something can come out of it.”

One of his colleagues and friends said, “No, there’s no way you can do it.” That was a trigger point for him. Jeff basically built the prototype for Kepion—it was all ground-up technology on his side.

At that point, I was just coming back from China and talking with him. While I was in China, he was starting to think about what options he had and trying to get some ideas, asking, “Hey Kevin, how’s your founder path? How’s everything in the entrepreneurial world?”

I was like, “No, Jeff, it’s rough.” He told me about his situation, and I was like, “Well, these are the prime times to really start getting something going.”

Then he was like, “Well, I want you to come over and take a look. I’ve been building this, and I want to get some of your thoughts on it.”

At that time, I wasn’t thinking about joining. I was still in the mindset of going back to school. But then he showed me the product, and version 1.0 was interesting. A very interesting product, I will say. It had really strong potential, and understanding what enterprises need, I did see a very unique proposition for the market there. But it was a very early product at that point.

John Hill (51:37)

So he shows it to you once, and you’re like, “Hell yeah, I’m in, let’s go. I’m moving the air mattress in.”

Kevin Xu (51:50)

At that point, I was not intentionally trying to join something. It was more that I was trying to help out where I could. But eventually it got to a point where Jeff said, “Why don’t we just do something together on this?”

So I was like, “Okay, well, I’ll give it the next couple of months here and see where we can get it.”

Long story short, we started going from there. We started building out from a concept to something actually presentable to people. There were folks we worked with—that Jeff worked with in the past—who helped get us connected with companies out there. Our very first customer was huge because they were one of the customers at Microsoft before they got left hanging, and they needed a next-step solution.

John Hill (52:23)

It’s so crazy because we’ve known each other for a long time, right? We were talking about this before I hit record—that you’re one of my closer friends. But there are aspects of the story that aren’t even on my radar. In my recollection, Kevin comes back from China, he’s working on a SaaS project, and they have them as a client.

This is before I made my jump to B2B selling—I was still doing retail and financial stuff at this time. I had some conflict about the difficulty of landing them as a client. Now, as a sales consultant and nerd, I understand exactly how difficult landing a client that size as your first client could be. Can you talk about that?

Kevin Xu (53:25)

Yeah. The biggest thing with companies—especially big-name customers—is that while the solution and tool play a factor, the bigger factor is trust and credibility. When engaging with them, a lot of it was the trust and credibility of the folks we were connected with to present Kepion through at that point. But Jeff also had a previous working relationship with them as well.

It still was a big bet on Kepion to bring this up. Just to give you an idea of the size and scale, when we started with them, it was a global rollout to over 5,000 users across the globe.

John Hill (54:17)

On version 2.0 of the product? Or were you still on version 1.0?

Kevin Xu (54:21)

It went quickly from 2.0 to 5.0, I would say. A lot of that is a story that I’m sure many founders have around rapid improvements and feedback from customers. It was a blessing, for sure, to have the opportunity to work with them to deliver what they needed pretty much to the tee of their requirements at a global scale. That really became the strongest starting point for Kepion to iterate from there.

John Hill (54:57)

I would like to dive into that moment in time. You’ve been in consulting, and my understanding of most consulting is you’re there to expand relationships, but you’re not selling your business, right? You’re in discovery mode all the time, looking for billable hours.

But this is different. This is an enterprise motion, and it sounds like you had some relationships. Did you guys have an insider champion who was trying to get you in the door, or were you fighting to be heard to prove the use case so it made sense for them to take such a large bet on an unknown company?

Kevin Xu (55:35)

One of the things that Kepion thrives on, even to this day, is that we’re able to back up what we say we can do very quickly. Aside from the trust and credibility where you have the relationship, what we said we could do, we were quickly able to prove with very fast, contextual POCs for the customer. It provides risk aversion and risk assurance that there’s going to be a tangible thing on the other side of the equation. That was the starting point that really helped establish the quick adoption at that point.

It’s not only about winning that account. Usually with global rollouts, you need to start with one area, prove that out, get good accolades, and then that becomes an internal sell throughout the rest of the organization. Even a top-down decision needs that assurance of one area to sell to the others from there.

John Hill (56:45)

For sure, with all the politics and everything. I would love to talk about the sales motion for that, but I’m curious: You get this deal—is there a moment for you and Jeff of, “Oh my God, what did we just sell to these people? Can we do this?” Or did you feel good right away that you’d be able to provide value the minute the deal landed? How did you feel when the deal closed?

Kevin Xu (57:13)

First, it was tremendous, but second, there was definitely a lot of work ahead to continue building from there. Every critical moment of saying, “We can get to this milestone, we can deliver, users like it, and now we want to move on to the next group of people”—it’s an ever-ongoing motion.

The first two or three years of Kepion were spent going through that motion and making sure that, while there was a lot of attention toward one customer, as we started growing attention with other customers and partners, we figured out how to divide and conquer, and grew more people to help support that as well.

John Hill (57:45)

Yeah. Epic. Okay.

One of the things that I think is very interesting about the founder path is we have this idea and we have this vision, right? In reality, we can’t help as many people as we think we can with the solutions that we have. Maybe the way that we think we’re going to help people is not the actual ultimate benefit to them, right? It leads to this line that I really enjoy: When you’re the founder, your vision is big, but it’s probably a little murky as well, right?

I’m curious, from the idea of Kepion and planning and forecasting, with that first enterprise customer, how much did the product need to shift forward to be something that worked well for them and provided value? Was it a big “we’ve got to turn the whole thing over, turn it on its side, and now it works and now it’s great”? Or was it just like, “This was the plan, and they like it more or less how it goes according to plan”?

Kevin Xu (58:38)

It just depends on the different markets and the different use cases within those markets you’re trying to address out there. For this one in particular for Kepion, I would say there are some parts of it that are pretty well established in terms of how companies run financial forecasts and budgets.

Then there is a very dynamic piece to it, meaning that forecasting is about putting your hand in there and seeing which direction the wind is blowing and how accurate it’s going to be. There’s more sophistication with that as you start seeing patterns in your business and how you can leverage more data and analytics to get there, depending on the spectrum of companies you have—whether it’s midsize/SMBs that are more simplistic and straightforward, or enterprise that has more complex processes.

For us, when we saw the product fit, the core fit well, but there were quite a bit of other areas around it that needed refinement. That requires a lot of UX iteration, functionality iteration, and more use case definition of this scenario or that scenario being used for applicability. In those timeframes where we were working with customers directly, we got a lot of feedback to really shape that through.

For founders, a key thing is having that core piece and that trajectory understanding, while understanding there’s always going to be that variability of refinement that goes along with it. As long as you know what the big rocks are that you’re trying to go after, everything else will fill in in between.

John Hill (1:00:10)

Interesting. Okay, that’s huge. All right.

I have one more topic I’d like to talk about with you, and then we’re going to get into the rapid-fire stuff so I can let you go hang with your family and do fun, cool stuff.

You were working remote way before anybody was even thinking about it. You were working remote before it was even a thing that I thought I might want to push for myself, right? The COVID pandemic made a lot of people go remote, and now there’s a whole lot of return-to-office. There’s a whole lot of people who can’t figure out how to manage in a remote situation, so they’re making people come back to the office, especially sellers, right?

I’m curious: Do you have any tips for founders when they’re thinking about remote versus on-site? Have you learned any tips, tricks, or tactics about building remote culture in a way that you think founders need to be thinking about?

Kevin Xu (1:01:18)

Honestly, this is a challenge that a lot of companies have. There are pluses and minuses on both sides. I’ll be honest: We really enjoy when we’re in person. We will have a convening of folks local in Seattle, or I’ll fly up to Seattle. Some of the other folks who are remote will come into Seattle as well, and those are really great.

You have very simple things like being able to talk with each other and finding out about things that don’t come up when you’re on Teams meetings or Zoom. You’re essentially just going straight to business—maybe some small talk in the beginning—but you really don’t find out much about other people, or even how tall they are. That’s the deception of TV news or Zoom—you meet them for the first time and you’re like, “Whoa, I didn’t even know you were that tall!”

These are the kinds of things that are the fun part about having a company. You start building this small, tiny community that becomes—I don’t want to use the cliché word “family”—the colleagues you spend a majority of your time with. You want to be more connected with them, but in a remote world, it’s very difficult for that.

John Hill (1:02:40)

Interesting. So do y’all have a KPI on “we’re all getting together twice a year” or anything like that? Or is it more like, “Well, we have a problem,” or, “Hey, it’s convenient”? How do you guys do that?

Kevin Xu (1:03:01)

It’s a delicate balance. On one hand, it would be nice to be able to get together, and we do that. But at the same time, we don’t want to overdo it to where people are trying to push through certain projects, whether externally with customers or internally, and we don’t want to be disruptive.

For us, we try to gauge it more towards very meaningful times when we want to get alignment and get cross-transparency—not from the top down, but laterally across so people can work together more. We have ourselves based in downtown Seattle, but we don’t have that RTO requirement. People still come in and out whenever they can, usually when it makes sense for them personally or to collaborate with others.

For us, it’s definitely nice to have everyone in the office, but at the same time, we’re in a new working age. We realize that as well.

John Hill (1:04:13)

Every day on LinkedIn, I see sales leaders or people talking specifically about this, because everyone is fine with developers and engineers working from home. It’s just these salespeople—these crappy salespeople.

I think we just need to learn how to be better managers and leaders and build culture remotely, as opposed to just saying, “Well, this super short-run experiment didn’t work, let’s make everyone’s lives exponentially harder and make them drive into the office.” It doesn’t make any sense to me.

Kevin Xu (1:04:44)

Yeah, and that’s where we are continuing to invest in more people within our company who can focus on the folks involved inside our organization, as well as growing the organizational structure.

One key thing I will say for founders—especially with organizations that are sub-20 or sub-10 trying to grow—is be prepared to understand that if you have different levels of people coming in, especially entry-level, you need a proper environment for that person to be fostered and thrive. Time and time again, I see people brought into a very task-oriented world. They produce, but you have a different level of expectation, and they’re not able to grow as well without that attention.

For us, we’re trying to build more of that in place. Just realize as you’re growing as a company, you really have to start with what kind of people you need at this stage, and as you grow to the next level, what you need at that stage, and create the environment that is going to help that set of people the most.

John Hill (1:06:04)

I love that, man. That’s a great tip.

One of the things I try to talk about with people is knowing what actually needs strategy versus what needs consistency and discipline, because they’re very different. Sales is one of those things where you have to be able to do both parts of that. It’s the time away from the meetings and conversations—thinking about them and what else is in play—that unstructured time that leads to the insights, value, and clear understanding. But you also have to move. You’ve got to do activity, keep the pipeline full, and manage everything else. It’s this odd mix of needing to do both.

I’m about to let you go, so next-to-last question: What is the biggest lesson you have had to learn the hard way? Now you see it, and maybe people tried to tell you, or maybe you read books and thought, “Hey, I’m not going to make these mistakes.” But then you did, and now you would like to help other people not make the same mistake. What’s your biggest tip for founders?

Kevin Xu (1:06:59)

Try to make sure you—I know there’s the culture of founder hustle: push as hard as you can and grapple onto what you can. But realize that there is a marathon pace to it as well, meaning that you need to keep a good pace and be realistic throughout that pace.

Before committing—not only to yourself on what you want to push through, but to your colleagues, co-founders, and others—you have to be very transparent about what you can and can’t do. You can burn easily, not only to others, but to yourself when you’re not being realistic about what you can afford to do.

Sometimes that comes into play when you have external pressure coming toward you. Even in those cases, it’s one of those life questions: Is this something you want badly enough and are willing to compromise and sacrifice for, or are there other things you need to make sure you keep in balance and value as well? That’s very important throughout different points of time in your journey.

You’re going to reach different points where a challenge is brought up about what the next step involves, how much time you can give, and what’s realistic. Those are commitments you need to discuss and be upfront about. Otherwise, it’s going to be challenging and awkward. One life lesson is really being more upfront with those you work with, those you co-founded with, and even yourself, so you can be more capable for the company from there.

John Hill (1:09:00)

The big shift is whenever kids come into the picture, right? Then you’ve got other responsibilities, and now you’ve got something that you’re really working toward.

Is there an example of you not doing a good job of setting these upfront boundaries, or maybe trying to take on too much and having to come back and let the team know that you overcommitted yourself? Where does this come from for you?

Kevin Xu (1:09:32)

It comes from general experience where, yes, there’s the family dynamic that requires better time management. But the second part of it is that there are going to be different fluctuations of pressure points throughout the company where you need to put out more. At the same time, you don’t want to push back and say, “I can’t do these things,” because then you won’t do the full extent of a great job on them if you’re just covering for that point.

Really, those situations require you to be very realistic and upfront about what can and cannot be done. If that’s not brought to the table, others are basing their decisions and commitments on it as well.

Those things come up time and time again during different wavelengths. You’re going to have good times where things are moving on all cylinders, and you’re delivering great initiatives that see good results. But in other times, whenever you think you can take on that extra thing, all of a sudden you don’t have time for it and things slip through.

In general, as a founder, accountability comes back to you at the end of the day. Whether it’s something you manage or other people that you hired to manage, it comes back to you because you’re going to have to pick up the pieces and move them along to the next step. A key thing is making sure you have a clear idea of what’s most realistic—not only within yourself, but also with the people you bring on under you—so you can realistically deliver.

John Hill (1:11:17)

Accountability comes back to you—that’s a pretty big nugget. It’s easy to think, “I’m smart, I’ve launched this thing, and it’s growing.” I’ve done this: I tried to launch another business because I thought it was going to be easy, and then it wasn’t. I struggled and decided to backtrack to regain focus. I didn’t feel like I was overcommitting in my regular work lane, but I was going to launch this whole other thing without thinking about the time, effort, or pressure.

I think that’s one of the most dangerous things: You spread yourself too thin too early because you’re too smart for your own good. You’ve got something working over here, and you think, “I can fix everything. I can monetize anything, let me go.” Then you start doing it that way. But I love that line: Accountability does come back to you. No one else is going to want to push it as hard as you are pushing it.

Kevin Xu (1:12:12)

Yeah, I think that’s a separating factor between a founder and people who fit into certain job titles and roles. It’s very clear in those roles where you’re trying to hit accountability for it, but when you’re a founder, you’re moving in a very dynamic catch-all mechanism.

In the beginning days, that’s definitely the case. As you make that next stage up, you need to start making sure you bring on the right talent and people to help operate and execute on those goals. At the same time, you’re still floating along making sure things are running efficiently. Eventually, it gets to a point where you figure out who is going to help you with that piece, while the overarching focus remains strategic vision and how you want to guide the company toward the next step as a whole. It’s the same context of accountability, just moving into different levels as you move through the progression of the company.

John Hill (1:13:26)

I love that. All right, last question, my friend. I really appreciate you coming on the show and doing this.

What is a trend that you see founders doing that you think is going to lead to some struggle? What’s the biggest concern you see for new founders who are hitting the scene today?

Kevin Xu (1:13:46)

That’s a really challenging question, just because as a founder—and this is something I haven’t done a good job of until recently—I’m just starting to connect with other founders and operators more to learn from them. I’m starting to join different communities out there. For instance, I just joined as a member of Gold House, which is an Asian American community of entrepreneurs and leaders across different industries.

John Hill (1:14:01)

I saw that on your LinkedIn and I was going to ask you about it, but I wasn’t sure what it was. So it’s like a community for entrepreneurs and operators who…

Kevin Xu (1:14:18)

Entrepreneurs, but also various leaders across different industries of Asian American descent. It’s something I wanted to join because growing up Asian American, a lot of areas that I see now versus what was before are total night and day. Now you see movie stars, musicians, and leaders of Asian American descent. Before, it felt like a totally foreign thing that wouldn’t exist in that world. Where I grew up alongside you here, I was basically one of the only Asians.

John Hill (1:14:51)

We had a rodeo team! For anyone who is confused, I live in Fort Worth, Texas. Kevin Xu is from Fort Worth, Texas. We had a rodeo team in our high school—that is where we grew up.

If you’re in a small town and you think you’re not around areas or communities of innovation, you don’t need to be in the middle of those physical communities anymore. There are digital communities. You can go find them if you’re looking for them, which I think is a very cool thing.

Kevin Xu (1:15:16)

Yeah. Sorry, the question that you had—I kind of got lost in my story.

John Hill (1:15:30)

No, you’re good. Maybe this is it, right? I think the right community around you paves the way for growth. But as a founder, it’s very easy—and I run into this with founders that I coach—to drink their own “starving artist” Kool-Aid. They try to put themselves on an island, marooning themselves all by themselves because “no one else is building anything like me.” You get past that phase, and you realize it’s stupid and not helpful. Why weren’t you networking, connecting, and keeping in touch with people? It’s easy to over-isolate yourself, and maybe that’s the lesson.

Kevin Xu (1:16:06)

Yeah, I think that’s the key thing right there. I went off on a tangent where I didn’t find myself out with other founders early on. But one thing I see is similar back to the story of musicians and rock bands: Early on, when you’re trying to create music or create a product concept, if you’re always trying to perfect what you think it should be, that’s great, but at the same time, you really need to get out there as soon as you can to start getting feedback and iterating.

That’s the part I encourage the most: If you have an idea and thought that you want to build on, the biggest part of the process is getting it out there to refine it. Don’t consider it a complete product until you’ve vetted it out many times over, to the point where you’re very confident that you have a set of customers that enjoy it and you are strong in what you identify as that product making an impact on the market.

Once you hit those two big rocks, then you basically have a product. Before then, consider all of that “not a product yet.” Just keep getting it out there until you develop those two confidence levels of what you call KPIs that you’re firm with, and then you can move on to the next level. It’s like Super Mario Bros.—get to the next world, don’t warp into World 8. Go through each level and enjoy it, too.

John Hill (1:17:39)

Where’s my warp whistle, bro? I want to go to the top one, I don’t want to go to Level 2!

Kevin Xu (1:17:59)

You’re missing all the swimming parts! You’re missing all the building stuff.

John Hill (1:18:04)

Awesome. Kevin, this is so awesome, man. Thank you so much. I really think there’s a lot of information in here that will help people, whether they’re starting out something in tech or starting out something just to do because they’re not happy or fulfilled. I really appreciate this.

If people want to come learn more about you, Kepion, or your journey, where should they look you up or reach out to you?

Kevin Xu (1:18:25)

You can reach out to me directly. I’ll leave some contact info with you, John, that you can put in the notes. Kepion is where I’ve been focused, so if you want to reach out or find anything interesting about Kepion, definitely check out Kepion.com. On LinkedIn, feel free to reach out to me—I’d love to connect with you.

John Hill (1:18:46)

Awesome. We’ll put those links in the show notes so if anyone wants to reach out, they can. Thank you so much for doing this, I really appreciate it.

Kevin Xu (1:18:52)

No, it’s been fun. Thank you so much, John.

John Hill (1:18:55)

Cheers.