In this episode, Lance Tyson sits down with serial entrepreneur Michael Papay to discuss the emotional and strategic journey of selling a company, navigating the transition, and embracing new ventures. Michael shares his experience leading Waggle through acquisition, the challenges of letting go, and the inspiration behind launching Sageful AI. They dive into the power of AI in driving behavior change, the importance of company culture, and why great entrepreneurs must balance innovation with deeply rooted values. If you’re an entrepreneur, business leader, or anyone passionate about scaling ideas and building lasting impact, this conversation is packed with insights you won’t want to miss.
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The Entrepreneur’s Journey: Selling, Letting Go, And Building Again With Michael Papay
I am so excited about this episode of Against The Sales Odds because this might be one of my oldest relationships in business. I first learned to become an instructor for sales training. That’s one of the first highs in my sales training. We go way back. I’m so excited to have Michael Papay on. He is the founder and CEO of Sageful AI. Michael. Welcome to the show.
I’m super excited to be here, Lance. Who would have thought we were doing it this way 25 years later? The great thing is we both look exactly the same. Neither of us age or anything like that. I can consider each one of these gray hairs to be a deal.
That’s a lot of deals done. For a lot of people listening to us, this is the Michael Papay. I was telling Michael on the pregame that anytime we’ve done sales training over the years that I’ve been involved in, we have to go build a B2B target. I’d always make Michael the target, him and the company he was with. Some people didn’t even think he was real. I’m like, “Michael Papay is real. He is a real person.”
You help me build my network.
You said one time you were wondering why you were getting all these hits from the Dallas Cowboys one day and it was because I was doing training there.
I thought they were looking me out for a trial or something and making me a quarterback.
There are East Coast guys. Michael, tell everybody how you got here.
I’m super excited. We’re building an AI conversational coach. I think something like $360 billion is spent on training and development in the US. Typically, only about 20% of people take action in a way that improves performance. We know coaching is effective to be able to improve that throughput, but it’s not always accessible. What we’ve built is a tool called Sagey. It’s a conversational AI engine that plugs into Slack, Team, and text messages, and helps provide the support, discipline, structure, and accountability to move that learner to get to performance improvement.
Ultimately, why the organizations are investing is to get performance gains. We’re able to both support the learner and do it in a way where we can document and show evidence of business value and creation. We formed the company about a year and a half ago with AI. We felt like this was an incredible culmination of technology and my background and co-founders’ background put a dent in this challenge. I’m excited to be partnered with the Tyson Group and with the amazing work that you all do.
When Michael came to us with the opportunity, we jumped at it and wanted to become a part of it because of the work. As Michael said, there are so many ways to leverage training, learning, and coaching. Supplementing it with something like Sagey is wonderful. As long as I’ve known, you’ve been entrepreneurial and your families are entrepreneurial. This isn’t even your first venture. This is your third or fourth successful venture that you’ve been involved with. Take us back early in your career. Where are you from?
A lot of this starts at home around the dinner table. My parents were entrepreneurial in spirit. I was an only child. You sit around dinner and you talk about margin and your brand.
What did your mom and dad do? I didn’t even know this about you.
My mom had an antique store and she also had an advertising business. She had a couple of different businesses growing up. My dad had a cardboard factory and a building supply company. That was my source of summer jobs.
My dad was an entrepreneur and I’m one of three boys. He owned his own businesses, and he still. My brothers are successful in their careers, but I was the one that followed his tracks. I have my own business. I didn’t know we even had that in common. It’s probably why we’ve gotten along so well over the years.
Later in life, I believe there needs to be more work to be done on equitable entrepreneurship. Not everybody has the opportunity to get that exposure.
Describe that. What do you mean by that?
To be an entrepreneur is a privilege, and not everybody has access to that dinner table conversation. Unfortunately, I went to Babson College. They’ve been number one in the country for entrepreneurship. If you look at business colleges and it’s for entrepreneurialism, it is Babson. That’s a privilege to be able to go to school like that and get that exposure. I’m also in the Bay Area. It’s a privilege to be able to have access to technology, pioneers, advisors, and board members. I look across the country and not everybody has that accessibility. At some point in life, maybe after this Sageful endeavor, that’s a place where I like to give back a little bit more, do a little bit more mentoring and advising, helping people with their own entrepreneurial journey because it takes a lot of grit, but it also takes some know-how.
Serial Entrepreneur: Being an entrepreneur is a privilege. Not everybody should be given access to that dinner
table conversation.
I usually say that to salespeople working on their clients. There’s a lot of synergy between how you have to sell sometimes, especially in a complex, and lonely B2B sale. There’s a lot of synergy there. The eEquitable piece with entrepreneurship is interesting too. I wouldn’t be as successful as I am unless my partner in life has supported me because there are a lot of trials and tribulations. Your whole family, even your wife now, is an entrepreneur also. I know this is about you but I’m sure she’s supporting you in your endeavors.
My wife has been almost fifteen years with a company called Freda Salvador. She started out from scratch with a business partner. It’s a high-end women’s apparel and shoe company.
You should invite me to the dinner table. I might learn more from talking about you. I can imagine that conversation supporting you, just like your mom and dad. At my dinner table in my house, my mom was very involved in my dad’s business to the point where she advised him at times.
That’s a good boil down to it’s not an individual sport. It’s a team sport, entrepreneurship. Fortunately, I got to play a lot of team sports growing up. I played lacrosse at Babson College and to be able to work and organize within a team is important. My wife is super creative, so she runs all the creative for Freda Salvador. I extract so much inspiration from that with a brand like Sagey or my previous company Waggl. There’s a great opportunity for a consumer-like brand in the enterprise space. That’s an example of something where she supported me on the creative side of it. I support her on the business side. I’m on the board of the company. I look at the financials and the P&L, and it’s all my Babson education on that side of things. It’s a team sport for sure.
Entrepreneurship is not an individual sport. It is a team sport.
I think you’re a perfect blend of understanding how you build an organization on the finance side. I talked about numbers but you’re good at the sales side which sometimes you don’t get. A lot of entrepreneurs come up with concepts, but sometimes they don’t realize the concept has to be sold. They’re usually product-heavy sales- poor.
Playing The Long And Infinite Game
Another thing you said that is interesting as it relates to a game with entrepreneurship, and I didn’t even know this was going to take this turn because it’s something I’m passionate about. I’ve worked with certain companies since I was 27 years old. I have been a partner in some firms and had some good partners. It’s an infinite game too. You have to almost have the mindset of money follows. It doesn’t lead if you’re doing this for that quick buck. There are success stories but for most businesses, it’s a long game.
Waggl was almost a ten-year build and I can talk about that business as well. I always joke that it’s another overnight success. People see these outcomes and then think that happened overnight. The reality was somebody was toiling with the idea before the business was even formulated, then it’s a year or two of grinding to get the product market fit, then you start hiring some people. Before you know it, a decade or two decades go by. Unfortunately, we hold up to the Zuckerberg’s stories like, “Check out this guy at Harvard. He dropped out and started Facebook.” That’s not the normal path.
I’m sure if you talked to him, he would say, “Look, you think this is lightning in a bottle and it wasn’t” We tend to look at what made it look easy. That’s when they start to put it out there. You didn’t see what got them to the point to put it out there. They didn’t slay a ten of the vault. Go back to something you said about foundational elements.
In college, I identified that to run a business, I needed to understand finance, so I majored in entrepreneurship and finance because I wanted to get that building block. About a year or two out of college, my best friend’s father called me up and he’d been doing management and leadership development for twenty-some years. He said, “People attend these leadership programs and nothing ever happens. There’s no change. Would you be interested in helping me start this company?” We started a company called Fort Hill. We’re talking 1999.
Were you a partner in that company?
Yeah. I was an early founding team member, employee number two. It blurs the line between founding team members and co-founders. He was the genesis behind the idea. I helped him with the business plan and built it from there. We built a web-based tool. It ultimately was used by close to a million people. Great partners like Ken Blanchard and the Center for Creative Leadership. It became clear, we had to go sell the product and I was like, “I don’t know anything about sales.” Sam Iorio showed up in my office.
That’s Sam Iorio who ran the leadership institute Dale Carnegie Training in Lehigh Valley in Philadelphia. Were you guys down in Delaware?
In Delaware. I didn’t have a prayer with him in the office. He closed me on the spot and so.
He may be the greatest salesperson in history. He sold me to stay with him. I was moving to Saint Louis and he convinced me. He asked me one question. He goes, “You’re going to be successful in Saint Louis. If you are going to be successful, you stay here.” I was going to go to work for another operator and he said, “Do you want to be more successful closer to your family or further away?” I’m like, “Are you serious?” It’s the greatest line ever. I’ll never forget that.
After work, I get in the car. I drove up to Conshohocken and lo and behold, Lance Tyson was my coach and facilitator. I remember the first session like yesterday. You threw the easel over and did a commando crawl and said, “You can’t spray and pray, guys. Every day and every way we get a little better.”
I spoke in front of a very large senior living home business from Boston down to Maryland. I said, “You couldn’t spray and pray. Some things never lose juice. It’s almost the same, but I didn’t throw the easel down.
These things stick. What’s nice about that learning is it was space. You had the opportunity to go back, transfer, apply it, and practice it. I remember I went in for a close. We’re talking maybe Union Pacific Railroad. I went in and said, “We’ve been talking a fair amount about this. Would you be up for trying to Pilot?” The guy said sure and I was like, “Really? What’s the next step? Is there an order form?” He was like, “Yeah, this stuff works.”
In my first book, I was there was no skill in closing. There’s no skill and asking for the order. It’s usually confidence.
You have to know where you are in the process. Have you understood their pain? Have you built a solution to marry to it? Do you understand their buying process, and where they are? Once you get that little bit of muscle memory and some confidence, now have the trust to be able to ask that question. I feel incredibly fortunate to get that sales muscle early on from people like yourself because there’s no way to build a company without it. Everything you do is sales. You’re selling somebody to come and join you on the team. You’re selling a board member to trade your time to come sit on my board. You’re selling investors, you’re selling customers. Everywhere is a sale and there are a lot of components to it but it’s building confidence.
Asking For Seed Money
Sales is facilitating a conversation and know the audience. That’s the first principle. The second principle is whether you can present and it is a presentation tailored to the audience. The third principle would be selling, and selling is soliciting people’s opinions and being able to respond to their opinions. When you have facilitation, presentation, and selling in line, it doesn’t matter if you’re asking for venture money or recruiting somebody, it’s the same move at the end of the day. Fort Hill, how did that company grow? How long were you there? What size?
Maybe a little over a decade and ultimately, that company spawned into a couple of other companies. The Six Disciplines of Breakthrough Learning was a book and Consulting Methodology was built. Now it’s still a freestanding consulting shop out there. I moved out to California to build out our West Coast presence for Fort Hill. Our technology was being coached on by Performance Management Systems LMSs and we’re talking 2010, something like that.
It was clear that we needed to build an innovation. We came up with the concept of a tool called Waggl and a product called Waggl. Organizations needed a more agile way to get feedback from their people. The survey from my perspective is the act of continuing to keep a secret. It’s asymmetric. People asking the questions can decide what they want to do with it and we wanted to flip that whole model on his head. We had the idea inside of Fort Hill. We worked it out with Fort Hill to maintain an ownership stake in Waggl, but it was clear that we needed to go out, build our board, and raise our course of financing. We were able to get a group of Bay Area technologists on board for advising.
What year was that? Give us context. You started Fort Hill in 1999.
It’s probably 2014 or something like that when we started in on Waggl. Maybe 10 or 15 years at Fort Hill, started in Waggl. We raised maybe about $1.5 million in a seed round and that got staked enough to be able to launch it as its own.
Talk about that seed round. What is that? I’ve been involved at some level with a couple of Investments. One at Waggl, in terms of exchange of services, and then this one. What does that look like? Who do you approach? How do you approach that sale a little bit when you’re asking for seed money and going out? You’re targeting people that you know.
It’s like a giant sales funnel. You need a lot of the top to be able to drop the right amount through the box.
It’s a gravity play. A good salesforce is a gravity play.
I was fortunate to have a gentleman by the name of Jeff Snipes. He had started a company called Ninth House and raised a lot of money. He is a successful entrepreneur. I had a loose connection with him and I reached out to him. I was like, “I have this idea and I know you’ve raised a lot of venture in the past. You have a lot of experience here.” He’s a YPO guy in the Bay Area. “Would you like to grab a coffee?” At 11:00 at night, I wrote him on LinkedIn. He pinged me back the next morning. He was like, “Sure, let’s get together.”
You’re telling me there’s some prospecting involved in this too. For all of you who want to be entrepreneurs out there and think you’re going to get away from prospecting, you don’t. It’s the same thing. I hope you’re all listening to that right now. It’s hard. What’s important is you have to care enough about it to run through any wall in front of you.
To win a business deal, you need to care about it enough to run through any wall in front of you.
You have to be committed, hell or high water, to make this thing work. If that means talking to 500 people, you’re going to talk to 500 people. I got Jeff excited. He opened up his YPO network with lots of successful tech entrepreneurs. We’re talking about a decade ago, he had one of those little speedsters, Tesla, two-seaters, and we’re ripping across the Golden Gate Bridge, and he took me through a circuit of pitches. He was like, “Pitch this guy.” He took me around to his buddies and I pitched him. About half of them were like, “I like the idea. I like the scale. I’ll throw in a little bit of money and time.” That was our nucleus to get things outside of Fort Hill to get to the initial stage. That was the nucleus.
When you’re targeting somebody, do you talk to them about their investment philosophy first, and then you pitch something like Waggl? What’s the order? I have always been curious.
They want to know initially a little bit about you, what’s your background. You have to sell yourself a little credibility and rapport, then what problem are you trying to solve? With Waggl, there was so much transformation and change. The old employee engagement survey is not getting it done. We think there’s a new way to do it. These analysts out there are agreeing with us.
The Josh persons of the world bring in some third-party credibility. Here’s how it works. A few minutes on the how. Here are some social proof points. We got Domino’s Pizza to use it and asked a question what’s one thing you’re doing to improve load time, which is how to get product in the oven in two minutes or less? They were crowdsourcing answers with Waggl. We got a quote and testimonial from them. They said it was fantastic.
They were able to compress load time across a lot of their franchises/ That was written up. Anything? I’m sharing here has been published. We got some proof points showing that we’re getting a little bit of traction. and then at the end, they’re like, “Send me over your slides. I’ll think about it” type of thing, then you got to follow it up like a dog being chased down.
Journey With Waggl
You mentioned it at first. Out of Fort Hill, you got this idea with Waggl. Explain that in an analogy from the big picture. Waggle is most that concept. 2014 is when you started to start to pitch Waggl. I got involved and we worked with you guys in 2015 and 2017. Explain Waggl one more time.
It was a web-based product and it’s still a part of a bigger platform. We had an exit, which I can talk about. It’s a web-based tool that allows for easy pulsing of questions to employees. Initially, we’re like, “I’m having a big town hall meeting and I want to ask the employees, “What do you want me to cover at the Town Hall?” You could ask that question. The employees would answer it.
Unlike a survey, they could vote on each other’s answers. Do you like answers A or B? We built this voting experience and then we made it immediately transparent. Here are the top ten things your people are saying. That was the initial route. We started to migrate it when we had some metric questions and pulsing. We effectively started replacing the employee engagement survey. That annual survey that happens once a year, let’s do it in a more agile actionable way.
Also, more real-time.
What I found in the B2B world is you have to find a recurring problem. That town hall, some of those other use cases like the Domino’s, it was like a spot use. It’s not something they were doing every quarter, every year. We ultimately had to track ourselves into a repeatable business process to get that higher-quality sticky revenue. That was the business. Fort Hill was about a ten-year journey. We got that initial seed round and started to get some early customers.
The key is you get those early proof points of customers, and then you get to hold them up. You got to be like, “Look at Lance. Lance is getting great results on Waggl. You can do it too. You start celebrating your success, promoting a little bit more. One begets the other. You slowly start building a whole business around it. We raise venture. We did an A round and that’s a whole sales process too. It’s a whole separate funnel. It’s a different animal. In the first run, you did the Angel round, and then the A round venture.
We did a couple of different slices of the A round over time. What you’re looking for is somebody to lead the round. We probably talked to 50 venture groups over time. When we are running more of a structured process, we dragged some lines for a couple of years and built some relationships like, “We had chatted a year ago.” I would keep them apprised of how we’re doing because you want to build some trust, credibility, and track record.
You benched around a long game. You’ve already planted seeds.
We planted the seed, then say this is where we’re going to go, and then show people that you’ve gotten there. That shows a lot of credibility along the way.
You get involved in Fort Hill as a founding member of the team. You build it out, a couple of companies offshoot from there, then you start taking some stuff you have there and say, “I think this becomes a business.” You see an opportunity, you see a gap. You start testing the product and service out. You get some money involved, and that starts to grow. You’re starting to show at this point in your career that not only can you innovate, but you can also sell.
Michael’s Entrepreneurship Story
You can sell the idea of the company because there are two sales. The first sales get the money to do it, then second sales you have to sell the sell the product or service. You start building that team at Waggl start with an entrepreneur. because you had a pretty formidable team there. I remember we got involved to help you at the top of the funnel. We had a company prospect at that time called PRSPX that we use to help you set up appointments and lead generation. Top of the funnel. That’s what we’re doing.
We were selling smaller deals like $2,000 and $5,000. A $10,000 deal was exciting and then we brought in a gentleman by the name of Tony Mitchell who I referred to as our evangelist. He sat and listened. He had helped Jeff Snipes build his business, the Ninth House. He joined for a couple of months as a consultant, listening to sales calls, and taking a lot of notes. He would join in some calls and not say that much.
We are on this one call. I won’t name the company, but it was the chief learning officer. She was talking about the culture like, “The only reason I took this conversation was because your advisor referred me to you and your advisor is amazing. We’ll take a conversation on his credibility, but our culture is so bad here. A product like Waggl is not going to work.” She was going on and on. Tony leads in for the first time and he’s like, “Can I say something?” She’s like, “Sure.” He’s like, “You’re the chief learning officer there and you got a tough culture. The way I see it is you should either do something about that or quit.”
He challenged her and she’s like, “I don’t think I’ve ever been spoken to like that by a salesperson.” He’s like, “It’s hard to argue with it. It’s the core of the job, and then they started to build a rapport. My other co-founder was on the call and I had a call coming up with a big hotel chain and I had a peel. I was like, “I’m going to leave Tony to this one. I think he’s got it under control.” My co-founder was like, “You’re going to leave him on the call?” I was like, “Yeah, I think he’s got it.” Long story short, that became our first almost six-figure deal a couple of months later. It was that confidence to step in and challenge the status quo. That’s an important part of the process too.
The other thing you’re saying is we could get deals done. If we were going to grow those deals, how to look different? The ideal prospect profile is probably going to have another look and sometimes people can make the leap over to do that. Sometimes it’s a process issue and more times, it’s a mix of both and you start to realize, “We might need some different types of players here to start getting some deals done.”
It is a combination of different players and a different motion, a little different sales motion, where you’re not just playing for that smaller deal but you’re playing for something that’s going to have a systemic impact on the organization and you’re thinking bigger.
Serial Entrepreneur: Entrepreneurship is a combination of different players with different motions.
You’re probably having more conversations about the outcome than you are about how something works. I think that becomes a big part of it. You’re going to run with Waggl and we sent at least one employee who was working for us over to you because it was time for him to go for a better role with you. How big did you get Waggl? Whatever you’re comfortable sharing, revenue, people size, what that looks like, and what was the exit there? What did that look like?
We grew the business. We raised a total of maybe about $15 million and all this is out there in the public domain. Something between $15 million and $17 million. We did some debt alongside that. Sometimes when you raise venture, you can get some venture debt to increase the resources that you have access to. We grew the team up over 50 employees.
We have people across the US, who probably had a couple of hundred customers at our peak. We were doing some bigger deals. A large segment of the VA was using Waggl to be able to listen to those VA systems and make operational improvements. That’s work that we are proud of. We moved the platform to become Fed ramp certified, like a federal instance of aversion in the cloud there.
That was quite an undertaking. We did some work with the Department of Defense. Those were some government larger-scale works. We did some work with a large-scale transformation at PepsiCo. This was featured in The Wall Street Journal. It’s pretty cool. They had a new CEO. They want to get people focused and make work simpler, so they can focus on the new vision, mission, and values. They asked one question on Waggl, what is one beer credit process that’s getting in the way of you doing great work here at PepsiCo?”
That went out to 270,000, people around the globe, different languages, different business units. In a matter of a week., they were able to parse that all down, boil it up at the executive level, and start taking action to the point where they were implementing new beverage categories. That was featured in The Wall Street Journal.
We’re proud of some great work that we did. Ultimately, at some point during the pandemic, we had a few people knocking on our doors over time. I felt like the timing was such that it made sense to Listen and talk about what a deeper partner or an acquisition might look like. There’s a group called Technology Crossover Ventures. They’ve been behind a lot of big platforms like Airbnb and Legal Zoom. One of their portfolio companies was Perceptyx, a big survey platform that a lot of large-scale companies use.
We started talking to their CEO. We talked once and then he came back to it about six months later. These seeds that you plant take time to germinate. He came back around. Think it’s time to start in earnest in these acquisition conversations. It was probably about a six-month undertaking. We were acquired three years ago by Technology Crossover Ventures on behalf of their portfolio company. Waggl became part of that.
Was that a sales pitch selling it or were you pitching them as much as they were?
That’s like your marriage partner there. It’s a mutual fit, but the initial conversation was with the private equity. They want to talk. What do you guys about this, and how are you differentiated? They’re out there thinking about their portfolio companies and have an initial chat, then you talk to the CEO, and then the CEO brings the CRO on board and the CTO. You got a lot of pitches. You probably got two dozen various meetings and pitches, which is less probably about a pitch. It’s more about whether this is a good fit. You’re trying to understand whether what you bring to the table is a good fit. At the end of the day, everything is sales, how you carry yourself, how you’re positioning your customer story and your momentum. It’s a lot of stories and, numbers, and positioning. It’s sales at the end of the day for sure.
How long does it take you to sell an organization like that? What does that process look like?
It was about a six-month process from the time it started. Maybe it took a couple of months to get a term sheet nailed down. Some of that is like now that you got VCs, we had VCs in our company, you got a lot of different stakeholders. You have to get stakeholders on your side on board like, “I think this is the right move. I think it’s the right time. This feels like a good partner.” The board’s continual pushes like this could be a distraction. We need to be focused on execution. You have to look for your windows and be pretty sure as to building that internal support. You get to stay for a while too after the deal.
I can speak to that too. Your turn sheet probably took a few months of intense diligence, when you have 5,200 customers who got to look at every customer agreement, we’ll get every employee agreement. You need some good hygiene in terms of your record keeping and all your data room. Every little thing is gone through with a fine-tooth comb. Your code interview with your team and your people. That diligence process takes a couple of months and then it takes a couple of months to paper it out. That’s where a lot of the little negotiation happened.
Some things are worth defining in the original term sheet. There are a lot of little things. We were fortunate that the whole team was able to come over. Everybody was able to keep their job and that’s something to discuss and negotiate the healthcare being at least equivalent to what they had. These are little details that are little compared to the overall deal but are huge to each employee who trusts you to make that leap across to the other side.
The whole thing was about six months, and then I was on board at Perceptyx for about two years. I headed up partnerships and alliance work, which is great for me. I was able to take a pause from being the guy in the seat as the operator and stay connected to what was happening at a macro level, which set up this next endeavor well. I was out talking about hundreds of different groups and forming some partnerships.
As the founder of something and co-founder, I had a couple of other founders in the mix as well. I went through a little bit of a depressed state like you sold your brand. Once that paperwork is signed, your board is disbanded. You don’t have a board of directors anymore. It vaporizes. You don’t have access to your legal counsel or your accounting team. Your executive team in the way this was rolled in or executive team moved into the organization into different roles. This world that you built from scratch overnight changes and a lot of your identity is wrapped up.
I never thought about it that way. You’re almost like barring something. What most people don’t realize from an entrepreneurial standpoint is it’s almost like a ship. Most ships are named. Most ships have a baptism. The ship has a soul. I think businesses have souls too. They house all these belly buttons. It’s an entity. It’s a thing. Good entrepreneurs know that.
There’s a little bit of grieving and change and letting go. Ultimately, they rebranded Waggl and rolled it into the platform. Initially, that was hard to take because the brand had a lot of energy and life for us. Those moves over time. Marshall Goldsmith, the executive coach, is an amazing guy out there. He works with the top CEOs. He did the front cover of my book. He’s got one thing like, “Take a deep breath. Let it go.” You got some stuff you have to let go. It’s easier said than done.
You have to know when to let go of things.
Starting Sageful AI
You decided to give birth to a new one. How did you come up with the idea for Sageful AI?
I love entrepreneurship. I know the HR tech space well. I love doing it with a group of people that I’ve had success with. I love the idea of creation and building. I’m probably not the best person suited to work inside a big machine. I’m not probably the best with authority. I like to generate new ideas and bring things to life. I had that in my belly in terms of drive and energy. When you see what was happening like with Open AI coming out with Chad GPT, you see this world of AI opening up.
It took me all the way back to when Cal called me at Fort Hill. He had an early prototype. I was working for a big healthcare company at the time, doing acquisitions. He was in Italy and he updated his goal like this is what I’ve done. This is the action. I’m in Kennett Square Pennsylvania. I logged in and I was able to see Cal’s progress on his goal from Italy.
I don’t know much about the world of leadership development training and performance management, but I know this is game-changing. I can be on a website and see what somebody else is doing. This light bulb went off and I was like, “I need to jump in here and be part of it.” I had that feeling with AI like this is transformative. I don’t think ever in our life, we’re going to see something that both changes the game and disrupts, but on the flip side of that coin, creates massive opportunity. I had this burned.
Serial Entrepreneur: AI changes and disrupts while creating massive opportunities.
Everybody has the opportunity to add to it.
Yeah. It’s open. That’s what I got excited about when you Cal called me. You can harness that and turn it into a tool that can augment how people are coached and trained and the accountability that goes along with it dialed in. It’s like a nitrous oxide at some level. It’s infinitely scalable. We can look at a cohort of 25 learners. We could also look at a company of 25,000 people trying to drive a specific change.
Let’s say a company is trying to change the way they’re having conversations with their patients. It’s a healthcare company. We want to have a very different conversation with our patients that looks like X, Y, and Z. In the old days, maybe you send a survey. You’ve got managers checking in on it and coaching how you get the analytics on whether or not that’s rooting. In this new world, you could deploy Sagey, follow that up with all those managers, make sure that they have the resources and support to change that conversation, and do it in a way where you can boil all the information up.
The Chief Operating Officer or the CEO can say, “We’re changing the game and I have visibility into that right now.” The scalability of it is wild. It was a process as well. I got together with my former co-founder Drew Batshaw on the technical side. He’s the builder of the tech. He’s the genius behind the code and the product.
We started having lunch and we said why don’t we talk about making another run at building a company. What we got down to is where our expertise. Where do we have passion and expertise? We netted it down into behavior change and organizational change. We’ve spent 25 years helping people change behavior, which is hard. We all know that. We set our New Year’s resolution. We’re now three months into the year. I don’t know how everybody’s doing here, but it’s hard to change behavior. It’s even harder for companies to change.
I feel like we had expertise there. Drew ran the machine learning and AI teams for Perceptyx for a couple of years. He had worked with 30 or 40-person teams, getting down into this new world. It’s a new age. Building software and tech these days is a fraction of what it took resource-wise. You need to know how and you need the ingenuity to put things together, and you have to know what problem you’re trying to solve.
There’s a lot of road to hell to be able to bring something to market. From a sheer technology perspective, it’s so much easier than it was 10 or 20 years ago to put parts together and you’re using AI to enable things. Let alone using AI to help assist in coding now too. As an entrepreneur, I think like nitrous. AI is like nitrous for today’s entrepreneurs.
It is and what it consists of with things like that. All three of the organizations that you’ve been involved with innovating, creating, and founding are at some level nitrous for each of those Industries Fort Hill was and so is with Waggl, in terms of speed of getting a pulse on something with this AI tool. I now see with the story the innovation and the speed of what you’ve done.
That is a through line. It’s the efficiency and speed to do a process better, then it’s also the effectiveness. It’s also the regard for the employee. At Waggl, we believed everybody deserved to be heard. That was our belief and we wanted to give employees that voice. That was our mission and drive. That’s why we’re working so hard. At Sageful AI, we believe amazing change can happen through conversation and dialogue with a little bit of nudging, support, and dialogue.
Focusing on how you make that employee experience better leads to some good things. It also teased up the fact of what I believe about building companies, which is it’s an inside-out experience. We’re in the HR tech space. We have to do this stuff well internally. Let’s build great cultures. Let’s live our values. Let’s have a mission worth driving towards and ultimately, some basic human dignity and tendencies of respect and flexibility. If you create a great employee experience, great things then can emanate from there. Your customers are treated great and you’re shareholders get returned. There has to be an inside-out experience. At least that’s my point of view of how you build these organizations.
Serial Entrepreneur: We are in the HR tech space. We have to build great cultures, live out our values, and have
some basic human dignity and tendencies of respect and flexibility.
A couple of years ago when we were bantering back and forth, you wrote a white paper or blog post on culture. I think you used an NBA team. It was a comparison between the Cavs and Golden State. Remember that paper?
Yeah.
That article felt like it was that inside-out philosophy that you’re talking about with leadership.
I remember when I came and visited, you’re all at Prospects. It was Thomas Adams. That was the guy that we were working with. I think he’s out here doing well, but we rolled up to a Cavaliers game and we got to see LeBron there. That was exciting for me because he came back to Cleveland. He had a real purpose and drive of wanting to bring a championship back. That was insurmountable. He was able to knock out the Golden State team, arguably with the greatest record in the team ever. It was that incredible purpose, care for your teammates, and care for the community that had him break through there.
When you bring this conversation, what you’re talking about is when you have to be entrepreneurial with the product or service, you have to believe in it. There has to be a belief there and enthusiasm. The last four letters in enthusiasm are “iasm.” You have to be sold yourself. That enthusiasm also has to carry how you tell the story. You ask for money to grow the business or how you hire people and then how you lead. You have to know those values and you have to understand that and be deeply committed to that. Going back to early in the conversation is the whole entrepreneurial conversation. It is an infinite game. If you don’t know your values, you’re not going to be able to play that long game. That’s what that comes down to.
Amazingly, values become sales tools. We would put that into people’s employment letters like these are the things we believe. Many former employees would be like, “I believe those things too. I want to fight for those things.” Even show them the sales cycle, “This is who we are as an organization. This is what we stand for and this is how we work and treat one another.” Sometimes when you lead with your purpose and values, it becomes a big magnet.
It does become like a magnet. It’s a full flush, not a push. As we bring this down for landing, you know that there’s a difference between true north and magnetic north. There is a 15-degree difference or something like that. I could be wrong. I have to go back and look. You have to know both. A magnetic. North is what it pulls to, but you have to know the direction you’re going also, and you have to be true to that. There’s no doubt, but if you don’t know either, you have a problem. You can’t just know one. You got to know that there’s a magnetic north and there’s a true north.
As we landed this, I was taking notes about the different realms and what that looks like. Not that I’m interested in selling my company, but I deal with a lot of private equity firms. I’m always talking about people coming to me and pitching a lot of things. It’s interesting your thought process there. I think the biggest thing that’s interesting is you got to jump in with both feet and sometimes you don’t know how deep the water is. You don’t know what the weather is but you have to navigate. Interestingly enough, this didn’t come up, but most people don’t know that you have a sailboat.
Yeah. I’ve been doing sailing since I was knee-high.
Michael’s Pump-Up Song And Book Recommendations
I asked this to all my guests. First question, you’ve done a lot of big deals. You’ve raised capital and sold big deals. If you had a play one song in your head before a big deal, like a pump-up song. You’re pulling up, you’re going for a big freaking ask. What song is playing in your head? What is your jam playing in the car? It’s always an interesting answer.
I haven’t given that a lot of thought. There was a little wrap song, Let’s Go. The lyrics might be a little elicit. When we closed deals, we all had our walk-up music. That was my music.
Do you remember the artist?
No, but I do remember right before I got on this call with you I played a little Aerosmith, Sweet Emotion.
There you go. Besides mine, what book would you gift?
It depends on the context and timing but some books that I’ve read for fun lately, going back to the navigation, The Old Man and the Sea is great. The Sea Wolf by Jack London was written right out here.
There’s a little Jack London Square down there in Oakland. I think the Oakland A’s office was right there. There are little bars right there too.
I’m a big fan of the Scaling Up methodology. For people who are in a little bit later stage, it’s nice to have an operating blueprint, so going up with Verne Harnish.
We go through Verne’s Program. That’s good.
It’s a sponsored program.
Michael’s Advice On Achieving Success
That’s more like a Christmas present. That’s like Santa bringing you something special. If you had to advise on success to a 7 or 8-year-old niece or nephew, what would you say?
That’s a hard one but You know. At the end of the day, you have to want it. You have to care about something. If you’re 7 or 8, I’d say to get out there and have a lot of experience. Go experience things. What I say to my daughter is to put yourself in a position of optionality. As you go through life, doors start to close and shut down for you. If you work your tail off, you do well in school or playing sports, you treat people well. You have more and more optionality in life. I approach business that way too. It feels empowering to have a business that has options. I would say a youngster. Have a lot of experience. Keep all your doors open and have optionality. When you find something, you have to want it. You have to go after it and don’t let anyone tell you can’t do it.
As you go through life, doors start to close and shut for you. But if you work hard, do good at school or in sports, and treat people well, you will have more optionality in life.
I love it. Michael, it’s been a fun hour. I definitely have some insight as long as I’ve known you. The thing I appreciate about you most is you have short-term priorities and execution but you’re always thinking about the long game which I love. I sometimes don’t think that way. I need to be around people like that.
That goes both ways. I feel like you bring out the best in me and and tens of thousands of people that you’ve supported. We’re appreciative of the partnership and the magic that is out there. Thank you for that.
I appreciate it. Thanks for coming.
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The Sea Wolf
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About Michael Papay
Michael is a visionary leader in HR technology with 25 years of experience building and scaling businesses that drive meaningful change in the workplace. As CEO & Co-Founder of Sageful AI, he is at the forefront of transforming how organizations leverage AI to enhance learning, leadership, and change management.
