Topline

Michael Walrath, CEO of Yext, is back on Topline to explain how Yext went from breakeven to 31% EBITDA margins on an 80% gross margin business, after halving its headcount and using its balance sheet to buy back roughly 35% of every share it ever issued. He joins Sam Jacobs, AJ Bruno, and Asad Zaman to argue that the old rules of business still apply: why VC math and founder math are different games, why employees lose the most when an overvalued startup like Airtable lands far below its peak valuation, and why this market feels like 2004. Plus, why Yext stopped doing earnings calls and replaced most stock comp with cash, why cutting the bottom half of a sales team can raise bookings, and how Yext is blurring the lines between AEs, account managers, CSMs and sales engineers.
Key Takeaways:
- Real profitability turns any growth into fuel. As Michael put it, "when you're actually profitable, like really profitable, then any growth becomes hugely accretive." With 80% gross margins and 31% EBITDA margins, "Every incremental dollar, I can spend 45 cents of it and not affect my margins in any way," so a left-for-dead software company can fund its own growth whatever the market says it's worth.
- Chase growth only where it actually exists. "Nothing's more powerful than growth at creating value. Nothing is more destructive to value than chasing growth when the growth isn't there," said Michael. Airtable avoided the trap by leaving its cash on the balance sheet, while Yext once spent 74% of revenue on sales and marketing into a declining growth rate.
- Cutting your weakest sellers can grow bookings. When 20% of reps make quota and the bottom half brings in 20% of bookings, the spreadsheet says cutting them costs you that 20%. "It's not even close to true. It's the opposite," said Michael (his numbers were illustrative). Yext now has fewer, better sellers, and is "effectively eliminating all distinction between go-to-market roles" in favor of teams that own books of customers.
- Stock comp can turn your own employees into sellers of your stock. Most people sold their RSUs the day they vested, and every quarterly issuance meant the company sold shares to cover taxes too. "The last thing you need are more sellers of your stock every quarter," said Michael, so Yext now pays most employees more cash and points long-term believers to its employee stock purchase plan.
Connect with the Hosts & Guests:
Host: Sam Jacobs, CEO at Pavilion - https://www.linkedin.com/in/samfjacobs/
Host: AJ Bruno, CEO at QuotaPath - https://www.linkedin.com/in/ajbruno3/
Host: Asad Zaman, CEO at STA - https://www.linkedin.com/in/azaman1/
Guest: Michael Walrath, CEO at Yext - https://www.linkedin.com/in/michael-walrath-b63166/
Topline is more than a podcast:
Subscribe to Topline Newsletter: https://toplinemedia.substack.com/
Check us out on YouTube for the #1 video podcast for founders, operators, and investors in B2B tech: https://www.youtube.com/@TOPLINE-Media
Join the free Topline Slack channel to connect with 600+ revenue leaders to keep the conversation going beyond the podcast: https://www.joinpavilion.com/topline-slack
Chapters:
00:00 Introducing Mike Walrath
03:13 VC Math vs Founder Math
04:46 Why Employees Lose the Most
09:05 Why This Market Feels Like 2004
12:04 31% EBITDA Makes Growth Accretive
16:12 Why Mike Is a Jobs Bull
19:48 What Airtable Got Right
28:19 Hot Startup Equity Is a Lottery
41:37 Yes, You Can Attract Talent
44:16 The Road to 30% EBITDA Margins
47:45 No Earnings Calls, No IR Team
51:52 Replacing Stock Comp With Cash
54:41 Cut the Bottom 50% of Sellers
57:19 Collapsing Go-to-Market Roles
01:01:22 From PE Guy Back to Growth

When Rick Smolen stepped into the CRO role at ShipHero, he took on responsibility for the entire customer lifecycle, from marketing and partnerships to customer success and support. 
With a background primarily in sales, he had to learn how to lead functions outside his expertise without needing to have all the answers.
In this episode, Rick joins Sam Jacobs to discuss the leadership lessons that came with that transition, from asking better questions to building trust with his team. He also explains how to learn from failure, navigate setbacks, and focus on what you can control as a leader.
Rick talks about:
- Why curiosity makes you a stronger cross-functional leader
- How to challenge your team without micromanaging
- Why experimentation requires accepting failure
- What leaders should focus on when business results fall short
- How to prioritize important work that rarely feels urgent
Chapters
00:00 Introduction to Rick Smolen and ShipHero
01:10 What ShipHero Does
05:14 Rick's Career Journey
07:50 From Sales Leader to CRO: The Biggest Shift
10:49 Why Curiosity Makes You a Better Leader
16:23 Building a Leadership Team That Learns and Experiments
17:54 Evaluating Leadership Beyond Revenue
22:50 Rick's Book Recommendation: The 7 Habits of Highly Effective People
24:53 Where to Find Rick Smolen
Try ShipHero: shiphero.com

Amy Konary, Founder & Chair of The Subscribed Institute at Zuora, coined the term SaaS as an IDC analyst around 2000, when her first forecast sized the whole market at $40 million. She joins Sam Jacobs, AJ Bruno, and Asad Zaman for the first in-person Topline to ask whether AI company economics are a house of cards, and whether circular financing and double counting are real problems. Plus, why POCs have stopped being a pipeline signal, experimental revenue versus true ARR, a new leverage index for sticky revenue, tokens versus credits, and how close outcome pricing can really get.
Key Takeaways:
- Treat POCs as a weak pipeline signal. As Amy put it, "it used to be that hands-on product was a really good signal from a pipeline perspective, but everyone's doing POCs just to kick the tires, but actually has no mandate to buy." Many are free, production-ready builds, and very few convert.
- Usage alone won't tell you which revenue will last. Amy scores customers on scope and workflows, trust in the system's outputs, and how much of their own context they upload, because "you can have 2 customers with the exact same usage, but very different leverage." Low leverage means "That revenue is less durable."
- Pure usage pricing can leave you as exposed as seats did. "If you're just tracking usage, and usage is highly experimental, and usage decreases over time as people optimize the tools, you're in the same vulnerable position you were in with seats," said Amy, who expects hybrid models with a smaller, trackable outcome piece.
- Build for durability without rigidity. "So I think there's a difference between durability and rigidity," Amy said, and her metaphor is bamboo: one of the strongest construction materials, yet flexible, anchored by a clear focus on the customer's progress.
Connect with the Hosts & Guests:
Host: Sam Jacobs, CEO at Pavilion - https://www.linkedin.com/in/samfjacobs/
Host: AJ Bruno, CEO at QuotaPath - https://www.linkedin.com/in/ajbruno3/
Host: Asad Zaman, CEO at STA - https://www.linkedin.com/in/azaman1/
Guest: Amy Konary, Founder & Chair, The Subscribed Institute at Zuora - https://www.linkedin.com/in/amykonary/
Topline is more than a podcast:
Subscribe to Topline Newsletter: https://toplinemedia.substack.com/
Check us out on YouTube for the #1 video podcast for founders, operators, and investors in B2B tech: https://www.youtube.com/@TOPLINE-Media
Join the free Topline Slack channel to connect with 600+ revenue leaders to keep the conversation going beyond the podcast: https://www.joinpavilion.com/topline-slack
Chapters:
00:00 Introducing Amy Konary
01:43 From ERP Sales to Industry Analyst
03:33 How Amy Konary Named SaaS
08:03 How Salesforce Taught the Street SaaS
10:31 Building Durable Companies for AI
11:52 Does Gross Margin Still Matter?
15:10 Who Is Checking AI Company Math?
17:03 Circular Financing and Double Counting
18:30 Is AI a House of Cards?
21:49 Durability Versus Rigidity
29:19 Be Careful About Your POCs
33:40 The Leverage Index for Sticky Revenue
39:12 SaaS Companies Moving Into Services
41:59 Tokens, Credits and Outcome Pricing
48:32 P(doom) and Raising Kids With AI

When Sam Jacobs founded Pavilion, formerly Revenue Collective, he set out to build a private community for operators in a startup world that traditionally celebrated founders and overlooked the people running the business. But as Pavilion grew to 10,000+ members, the very thing that made the community valuable began to get diluted.

In this special Topline Spotlight episode, Sam joins co-hosts AJ Bruno and Asad Zaman to talk about what happened, why removing the qualification barrier was a mistake, and what it took to bring Pavilion back to its original vision.
Sam talks about:

- Why rapid growth can dilute what makes a community valuable
- How LinkedIn and Slack helped Pavilion scale faster than expected
- What happened when exclusivity gave way to openness
- Why reversing course became harder once the community had grown
- The importance of having a long-term vision instead of chasing immediate growth
- Why building something great requires patience and restraint

Chapters:

00:00 Introduction
00:42 Business Challenge of the Last 24 Months
01:29 What Is Pavilion?
02:43 Launching Pavilion Gold
04:01 Why the Community Scaled So Quickly
06:51 LinkedIn and Slack as Growth Drivers
07:02 Shifting Culture of Openness Among GTM Leaders
08:04 The Consequences of Losing Focus
10:54 The Biggest Mistake: Removing the Qualification Barrier
11:32 The Challenge of Reversing Course
13:46 Continued Opportunity for Operator Advocacy
15:00 Solving the Challenge: Long-Term Vision
15:54 Building a 3-Year Vision for Pavilion
16:08 Importance of Patience in Building Exclusive Communities
Try Pavilion: joinpavilion.com

Manny Medina, Co-Founder and CEO of Paid, the monetization platform for AI agents, and the founder who took Outreach from nothing, joins Sam Jacobs, AJ Bruno, and Asad Zaman in person on how to price AI agents once seats stop making sense. Topics include why every SaaS company needs its own agents before someone else's run on its MCP layer, why a token is the wrong unit of value, and the itemized phone bill every agent builder owes its buyers. Plus, why fixed-price deals win logos but stall expansion, the case for 40% to 60% gross margins in the agent era, and what Satya Nadella told Manny in a green room.

Key Takeaways:

- Price the work your agent does, not the seats it fills. In SaaS you sell 100 seats, procurement sees 20 in heavy use, and the renewal shrinks to 50. With agents, "if you've sold 100 seats and only 2 were hyper-users, you don't care because you're charging for all the uses and all the value those 2 seats were getting." For now that pricing lives between effort and output, because true outcome pricing needs attribution, and as Manny put it, "Attribution is really hard."

- Make the bill readable before you argue about ROI. Manny compares it to the old itemized phone bill, where you went straight to the biggest line and asked, "Did I really call Pakistan from New York?" Tokens can't play that role: "A token should not be a unit of value for charging because a token is really kind of like the inside secret." Show the buyer the research, deck, or analysis the agent produced, because "explainability is like the first rung in the ladder."

- Fixed pricing is easy money that boxes you in at renewal. Enterprises are buying one of each right now, so "new logo is not hard. Expansion is hard." Teams that land logos on fixed price hit the first renewal with nowhere to go, which is why Paid opens with a monetization consultant and takes a percentage of revenue: "You grow, I grow." - Plan for thinner margins and narrower markets. Manny learned Amazon's margins cold (books 20%, electronics 7%, jewelry 3%) and calls SaaS's 70 to 80% an anomaly of cheap money: "I feel like a normal, you know, software business will be running on 40% margins, 60% tops."


Connect with the Hosts & Guests:
 
Host: Sam Jacobs, CEO at Pavilion - https://www.linkedin.com/in/samfjacobs/
Host: AJ Bruno, CEO at QuotaPath - https://www.linkedin.com/in/ajbruno3/
Host: Asad Zaman, CEO at STA - https://www.linkedin.com/in/azaman1/
Guest: Manny Medina, Co-Founder & CEO at Paid - https://www.linkedin.com/in/medinism/
 
Topline is more than a podcast:
 
Subscribe to Topline Newsletter: https://toplinemedia.substack.com/
Check us out on YouTube for the #1 video podcast for founders, operators, and investors in B2B tech: https://www.youtube.com/@TOPLINE-Media
Join the free Topline Slack channel to connect with 600+ revenue leaders to keep the conversation going beyond the podcast: https://www.joinpavilion.com/topline-slack
 
Chapters:
00:00 Introducing Manny Medina
01:37 What Paid Is Building
04:38 Will All Software Go Agentic?
06:35 The 100-Seat Renewal Problem
10:02 An Itemized Phone Bill for Agents
13:33 Why Outcome Pricing Takes Time
19:04 Open Source vs. Frontier Models
26:41 Pricing Agents Is an NRR Problem
33:11 Why Manny Won't Build Workflows
35:39 Fundraising Lessons From Outreach
41:10 Life Is Path Dependent
45:46 Culture Is the Exhaust of Winning
47:50 Is AI Spend Still Experimental?
58:22 The End of 80% Software Margins