SaaS Scaling Secrets
The SaaS Scaling Secrets podcast reveals the strategies and insights behind scaling B2B SaaS companies to new heights. Dan Balcauski, founder of Product Tranquility, leads conversations with successful SaaS CEOs, exploring their challenges, triumphs, and the secrets that propelled their businesses to the next level.
SaaS Scaling Secrets
Balancing a Risk-Reward Model in Real Estate Tech with Alvaro Erize, CEO of CINC
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Dan Balcauski speaks with Alvaro Erize, CEO of CINC, an all-in-one platform for elite real estate teams. Alvaro shares insights on handling the transition after CINC's acquisition by Fidelity, including challenges faced with employees and customers. He discusses the importance of brutal transparency, maintaining company culture post-acquisition, and lessons learned from his tenure. Additionally, Alvaro dives into the evolution of CINC's business model toward a hybrid SaaS model with results-based pricing, emphasizing risk-sharing with clients. Alvaro leaves listeners with key lessons from both his mother and personal experiences in leadership and risk-taking.
01:29 Meet Alvaro Erize, CEO of CINC
02:42 CINC's Acquisition by Fidelity
03:29 Post-Acquisition Challenges and Strategies
09:59 Transparency and Communication
17:18 Navigating Leadership Challenges
19:12 CINC's Business Model Explained
20:20 Exploring a Hybrid Business Model
28:54 Customer Response to New Models
30:57 Rapid Fire Closeout Questions
Guest Links
Some competitors will use this against you. You just got sold. These guys have no soul anymore. You need to get out of there before they get corporatized. Dragging people along. In some of the few cases where I regret is where some people stayed more than they really wanted out of guilt or misunderstood loyalty or some things like that, and it doesn't go well. Money will not solve whether you're happy in a place or not, right? People leave people, they don't leave companies, I'm a libertarian and I think math, supports me. Central government is always less efficient, and I know that Zillow does its best, but it's still a worse service than when you have individual agents entering through the whole life of the client exposure, not just at the end. I think we learn by doing a lot and that it's great to get some input, but sometimes we spend more time looking for input than actually doing I go, we do, and if we fail, we do again. You work and you earn everything and sometimes life is unfair no one ever said life should be fair so just go at it.
dan-balcauski_1_12-03-2025_101659:Welcome to SaaS Scaling Secrets, the podcast that brings you the inside stories from the leaders of the best scale up. B2B SaaS companies. I'm your host, Dan Bakowski, founder of Product Tranquility. Today I'm excited to speak with Alvaro Erize. CEO of CINC. CINC is an all-in-one platform for elite real estate teams, combining websites CRM and lead generation with over 50,000 agents on the platform. has had an unusual path, the SaaS, CEO. He started his first company at 16, imported comic books in Argentina. Ran an auto parts company supplying Toyota, consulted at Bain, then fell in love with CINC a portfolio company while working at a private equity firm and joined A COO in 2016. He's been running CINC for nearly a decade. Let's dive in. Alvaro, welcome to the show.
alvaro-erize_1_12-03-2025_111658:Thank you. Very match. Great. Great job with my name. I know it's not an easy one.
dan-balcauski_1_12-03-2025_101659:I I try, well, people butcher mine all the time, so I try to pay it forward. To set the context for our listeners, can you just give us a 32nd elevator pitch on CINC? What do you do? Who do you serve?
alvaro-erize_1_12-03-2025_111658:So CINC is real estate tech. We sell to top real estate teams and we give them the full package, like, portal website, like your own Zillow that people can, your clients can search for properties there. Then a CRM that you can manage all your clients to with, and we do marketing, we get you leads, basically. So whole package to grow your business. If you're a top real estate team in the US or Canada.
dan-balcauski_1_12-03-2025_101659:Awesome. CINC was acquired by fidelity back in 2016. So you've been running the company as a subsidiary of a large public company for nearly a decade now. I'm curious about those first couple years after the acquisition closed. What. Are those pressures that you face in that type of situation as a leader of a company that's gone through that kind of transition?
alvaro-erize_1_12-03-2025_111658:And so to give just a quick background there. So we, I was part of the private equity certain capital that invested in CINC in 2015. And then. We were running it and we decided to do a process and eventually sold it to Fidelity in mid 2016. And you're right there's quite a bit of things that happen post that exit, right? And so we can go either way. We can talk about how's the relationship with the new owners and how's the relationship with the clients, or how is the relationship with your employees, because all of those sort of change on the other side. Which one do you want to go first?
dan-balcauski_1_12-03-2025_101659:I guess which one of those surprised you the most you were in it?
alvaro-erize_1_12-03-2025_111658:I think I think some you expect, right? So new ownership, in my case, it was really great. There's a reason 10 years later that I'm here. I think no one expected that. My wife refused to move for a year. Everyone thought I was gonna go back to private equity. So she was in San Francisco and didn't wanna move to Atlanta. 10 years later, I'm here. I found that if you find the right strategic your life. Actually becomes even better, right? Because the right strategic ownership will give you the support, financial support, long-term view that a private equity really can't have. Right? While at the same time, if it is the right strategic, giving you the freedom of running your business as a little bit. And so with Fidelity, that has been absolutely fantastic. We're able to run the business how we like it, added other parts, or we send m and a. But at the same time, under that umbrella and protection of fidelity, so that was as expected. There are some things that do change and we can go there. The part that maybe ambushed me a little bit or I had thought about the least, or I guess clients. Some competitors will use this against you. You just got sold. These guys have no soul anymore. You need to get out of there before they get corporatized. And all those kind of things. There's still people today that, some, I get a client saying, oh, you guys really changed. I'm like, I'm the same guy I was before the acquisition. Right. It's the same leadership team, but there's gonna be some rocks thrown at you of now you've gone corporate. So it's very important to take a very active. Outward looking persona where you show that we're still who we are and belly to belly. Working with clients that sort of dissolves the one that I found the hardest. Was really on the employee side. And there's some things that you haven't really thought through, right? As you're going in these processes in an, in a startup where like in the case of CINC with a very strong founder, the founder Dwayne Leggate who is very much that entrepreneur of like, Hey, everyone, follow me. There's no tomorrow. Everything is. To an exit, right? Everyone gets a little bit of equity, and so if you are answering the phone on the front line, you don't really care about your promotion, whether there's a promotion ahead or not, and maybe you care, maybe you don't. We're all pushing towards this event, right? We're hopefully we'll all get paid. And and it's the dream of the company itself making it successful. And it all feels very like it's two years, three years, four years stops, right? We're all in this race. Now you get to the event, everyone gets paid to different degrees but that's there. And there's a little bit of the now what, is there another event? Are we gonna get paid again in the future? Is the, is like, or is now just do we go into corporate America and just, uh, chill out? And so, how do you say no? No, wait. There's not another event, right? This is a marathon, not a race. And now we need to think of the long term for both our clients, our employees, but thinking with a 10 year horizon or 20 year horizon. But at the same time, we wanna keep the intensity the passion that we've had so far. And so you have to ask yourself, was that passion really just economically driven? Or do we really believe in this business and our clients and that we're changing lives to the degree that we can keep? That intensity. And so again, we can talk more and we can go anywhere, but that's the challenge, right? How do I get that? Double win?
dan-balcauski_1_12-03-2025_101659:Yeah, no, I can absolutely understand. You have the Brinks truck back up and dump bags of cash on your front lawn, and you're like, I don't need to work anymore. What am I doing? I definitely don't need to work here. If it's not what I want to do, I can go, maybe, my bills are now paid. I can go, maybe pursue that carpentry dream. I always had that woodworking shop whatever I wanna do. But I, I'm curious, given the. I could understand the general sense, how explicit was that? Did you have employees coming up to you being like, why am I here? Where is this, is there another exit? Or was this just the general felt sort of sense vibe in the building as it were.
alvaro-erize_1_12-03-2025_111658:B both, right? So for sure there was the general, so now what, so you have to do, I do a kickoff every year, right? Like in the kickoff, is Oliver gonna tell us what's next? Right. And anything you put there might feel a little like. Not enough compared to what just happened, right? Whether they made a ton of money or some money, there's just not an event in the future, right? But there's also like very real you're gonna lose some people day off and you need to be ready to lose those people because if you try to retain them, that's gonna be negative for the company, right? In fact, you may have to nudge a few, although I hate losing great talent. The, it is important for everyone to make some introspection. You, as a leader need to say what that vision is, but then everyone needs to say, do I really want to be in this? And if not, that's okay. But there's a different world and we all need to be ready and excited about it. Dragging people along. In my, some of the few cases where I regret is where some people stayed more than they really wanted out of sometimes guilt or misunderstood loyalty or some things like that, and it doesn't go well.
dan-balcauski_1_12-03-2025_101659:I'm curious because you mentioned sort of, there's the public aspect, the private aspect that you also outlined. Maybe some different segments of folks. Some folks should probably leave with the acquisition. Some folks maybe linger out of a sense of guilt. There's others who are kind of committed to the company. But going back
alvaro-erize_1_12-03-2025_111658:Yes.
dan-balcauski_1_12-03-2025_101659:kind of messaging, I am curious because, one thing, I've worked for venture backed companies. I've also worked for a company that was public, got taken private equity. There's. There's always a huge risk of A CEO saying anything about any kind of financing, whether it's a take private or a fund venture funding round, because they don't ultimately have control of that. And then it can really distract everyone, right? Anyone who's gone through a fundraising, you talk to 50 investors, maybe one of them invests, right? Maybe not. Right? And so saying everyone like, yeah, we're gonna raise a series C next month. You don't know that's gonna happen until the term sheet signed. So I guess, did you have a. I, where did you land in terms of, in those public forums talking about what's next? What did you find worked and I guess were there any lessons learned that you had during that experience?
alvaro-erize_1_12-03-2025_111658:Yeah, so I have a little bit, I'm not saying this is the right way. I do believe in brutal transparency, right? So in, in our company in general, we're very transparent, good, bad, and there's a lot of books written about, as a leader, you have to exude confidence and you cannot scare your people, but I believe a, I don't know much more than anyone else. This is what we're doing. This is why we're doing it. If you don't agree, come and talk to me. Um, so on the process, we were not different. It was very public. Internally. Almost everyone had equity, which was a very good choice of the original founder. And we said, look, we're undergoing a process. We cannot take our off eye of the ball. If our performance slips, that's gonna be bad for everyone. So. Don't get distracted. Could happen in six months, could happen in 12 months. But we are doing this, we're looking for investment. And knowing that that will generate fear and stuff, like you cannot protect everyone from that. And so we did it. We were, we had, it was a grueling process with many private equities, a lot of competing offers. And we had like 40 management meetings in three weeks. Right. And they all happened in the board meeting in CINC with everyone around looking out of the side of their eye. But but at the same time, everyone was super focused. We were very strong with the message of all of this. Depends, the value of your equity depends on our performance over the next two months. Anything that goes wrong could make your equity be worth 30% less. Right? That got people very focused, so I didn't feel that it was a problem at all.
dan-balcauski_1_12-03-2025_101659:And then post-acquisition, I guess on that side, again, within the internal sort of company, maybe annual kickoff, right? Because you had mentioned people are trying to figure out, okay, like, what's next? I guess what was your sort of message after that close in terms of addressing the, okay, what are we, are we looking to what are we looking to do here? Now that we're part of a larger corporate entity?
alvaro-erize_1_12-03-2025_111658:Yeah. And so again I stick to the brutal transparency, which includes sometimes saying, I don't know. Right? But I try to be careful with that because, uh, of course people expect leaders to, to know where they're going. But, i've now been on both sides, right? So I was part of CINC when we sold to Fidelity, and then we acquired a couple of companies, real geeks, tiger Leads agent Pronto with different objectives. In the case of Tiger Leads, we acquired it knowing that we were gonna shut down the brand and move the clients to CINC while at Real Geeks. We acquired it knowing that it was going to forever live as a separate brand because it's the Lexus Toyota sort of thing. And my answer in all those cases was still brutal transparency. In the case of tire leads, I took, I brought all the clients in day one after the acquisition of the new that just got acquired. Super scared. They got acquired by a competitor. I brought all the clients in and I said. People a year and a half from now, this platform will not exist. That shouldn't scare you. I have a year to convince you that CINC is a better platform. I'm gonna do improvements to your, so first you know that you have this year and a half, so don't worry about it. That rug is not coming from under your feet. Second, I have one year to convince you of how great CINC is for you to voluntarily move to CINC. And if I cannot convince you, you have one year to look for your replacement. 80% of those clients are still with me today. They were. That was their level of anxiety went down. And to the employees I said, look, people. This will not exist a year and a half from now. CINC is a growing company. If you wanna move to CINC that's great. If not, you have a year to look and find. No one is gonna, and it was awesome. People decided some left right away, some left six months later. They all worked well while they were here. Some moved to CINC. It worked right while when we when we. Did the Real Leagues acquisition. I was very clear too. No, no, no. This brand is here to stay. You're part of Real Leagues. This is how the future looks like. In the case of us of CINC the day after. I don't control the game because I'm new owner. So I have to say, look, it's part, we're learning to live with these new owners. The new owners didn't have a specific plan that they wanted, but what I knew is they bought this company to grow it. This was not a synergy play. I even if you had to cut, which hopefully I didn't in any of my cases. I think you just also say day one, this is the plan. If they're 30% now that's it. The companies that do it like in two or three ways and they change their mind along the way, that is a disaster and I've seen it in my industry. Some of my competitors did terrible acquisitions where you could see it melting under the fingers because of trying to hide intentions, which I think hold no value.
dan-balcauski_1_12-03-2025_101659:Yeah, no, I'm a big fan of the yeah, the pull, the rip, the bandaid off. Because ultimately the amount of, I think the net amount of suffering on all parties combined is minimized in that scenario. So going back to, you'd mentioned, okay, some people, so post acquisition, some people leave, right? Or maybe get nudged out, and then maybe some people's. Are sticking around out of a sense of guilt or maybe are just maybe feel a little bit lost, is that, was that just like a first six month thing? Like I, I focused here explicitly on, on the
alvaro-erize_1_12-03-2025_111658:Yeah.
dan-balcauski_1_12-03-2025_101659:CINC? When you guys got you acquired
alvaro-erize_1_12-03-2025_111658:Yeah.
dan-balcauski_1_12-03-2025_101659:six month thing? Did that extend like over a much longer timeframe than you expected?
alvaro-erize_1_12-03-2025_111658:It was longer probably because of my defects, or not failure but by my shortcomings, which is. I think it should have been shorter. It should have been, Hey, this is the new world. This is why you should be excited, right? This is a marathon I wanna work on, and we can talk about these things. Your professional development, you need to think what your next five years at CINC will do for you independently of what it will do for CINC. And if that is not exciting, now this is our vision. This is how we help our clients. This is how we change lives. If you're excited about this, great. If not, then okay, let's talk about that. You did well with this exit. Let's go our ways, right? I feel at CINC, it probably was more like a year going into two where it was still, oh, you have the, some of the old guard. Some of the old guard got. Totally on board. I'm very excited about the next stage. Some are still, oh, we used to do it this way. The new company, like the antivirus that this big corporate company tries to put on us, slows me down in my coding. I hate that. Yeah. Okay. Well, we are part of a Fortune 500 financial company that has much more I do think if you asked me for a learning I would, if I went back, that process would be a little more like explicit, more transparent, so that in six months, eight months, we all know where we are and okay, let's go and not let it drag a year or two.
dan-balcauski_1_12-03-2025_101659:Yeah. I just wanna double click'cause you, you mentioned it probably dragged on a little bit longer than from your own maybe learnings or lack of
alvaro-erize_1_12-03-2025_111658:Yeah.
dan-balcauski_1_12-03-2025_101659:dealing with that process. Is there are there things that you tried that maybe didn't work? Or like when you say about the, the transparency or decisiveness, what are there
alvaro-erize_1_12-03-2025_111658:Yeah.
dan-balcauski_1_12-03-2025_101659:that you have in mind?
alvaro-erize_1_12-03-2025_111658:The first one is trying to keep people right, And so I'll put an example, trying to, like, I had a great leader, great guy. People loved him. He had his own, he, it was one, it was an unwilling leader, which I usually think is a good thing. It was someone that never wanted to be a leader, but he had sort of been thrust into that. But on the other side of things, he really did not jive well with he was a hacker. Right? In the sense of like, let's just build it the way, the closest way to it. And that didn't go well with a big IT world. We're like, no, we need to world. Build it so that no nothing can slip through. And for example, on his request, at some point moved back into a con individual contributor position. Right. Which I was like, great. I don't wanna lose talent and nails. This is a friend and someone that I really appreciate. He loves the company. Let's just do it. In the end, it was not great for him or for us. He felt still frustrated with the bigger things. And it's hard once you've had a great leader, put him in a position, he's still a leader whether he has the title or not. And so that's a good example of. I think both him and I would agree that if we if we had parted ways six months earlier, it probably would've been best. That's one example. But it's those kind of things. You, I, as a leader, I don't like taking risk and I know the people I like working with and I like 95% of the people I'm working with. And so I try to keep things as they are. And sometimes that's not the right way.
dan-balcauski_1_12-03-2025_101659:I love that story. And I mean, it's not an exact parallel, but I think a lot of folks find that with, retention offers, right? Someone threatens to leave and you're like, oh, we really want to keep you we'll up your salary. And I've never seen that actually work. I mean, I'm sure there are cases because people still do it, so it must work sometimes, otherwise people wouldn't do it anymore. But the cases I've seen personally,
alvaro-erize_1_12-03-2025_111658:We usually don't,
dan-balcauski_1_12-03-2025_101659:It's like six
alvaro-erize_1_12-03-2025_111658:I, I.
dan-balcauski_1_12-03-2025_101659:later, the person's like, yeah, like that was a mistake. I shouldn't have taken more money to stay here. I was, I, my emotions were right. I should have left.
alvaro-erize_1_12-03-2025_111658:I very rarely do that. I only do that in the small cases where I think someone really wants to stay, but they just have a hard time passing on an offer that's much better. Those are very specific cases in general, like money will not solve whether you're happy in a place or not, right? People leave people, they don't leave companies, and
dan-balcauski_1_12-03-2025_101659:Well, speaking of money I wanna pivot because I
alvaro-erize_1_12-03-2025_111658:Yep.
dan-balcauski_1_12-03-2025_101659:From the sort of cultural aspects of being acquired, and motivation of employees and shift towards, uh, it discussion of your business model. Just to lay the groundwork for folks of like where you started and where it's heading, how has CINC traditionally made money? Is it more of, is it a traditional sort of SaaS per user model? Is it very common in the CRM world, Is that where it's been?
alvaro-erize_1_12-03-2025_111658:It's not really per user although it is a pure SaaS model. So the idea is you are a team. I give you the platform with everything on it, how many users you have on it. Yes, there are some levels, but in general, whether you have 30 or 50, this is not a. Per user because most of the value of CINC comes for you as a team leader. The marketing part that we do that gives you leads. So honestly, the more that you spend, the more money you're gonna get out of it. You could have three people, three agents rocking your CINC platform and be making a million dollars a year. Or you could have 50 people on the platform and not close a single deal because no one is doing the work, right? So it's more, we charge a SaaS fee for the platform. There are some levels, but it's pretty fixed and it's almost like you get it all because you need to use it all right. Now we are. Playing a little bit with a shift in business model. Now we can talk about that to more of a hybrid between SaaS and results, which I find exciting. But the traditional one, the one that CINC was born on and is still mainly at, is a traditional SaaS model.
dan-balcauski_1_12-03-2025_101659:Yeah well, I'd love to hear more about this evolution that you are with. I don't know where you are in that journey. I guess just could you outline just what that is and then maybe also what sort of prompted you to maybe look at the shift?
alvaro-erize_1_12-03-2025_111658:Yeah so the, I'll start by the end. So what the model is instead of you paying me.$2,000 a month, which includes$1,500 for the platform and$500 going to marketing. Right. And you having that big fix cost we're moving a little bit where you're, you can have the option to pay us like$1,400 a month or depending on where exactly you are. So two thirds or half of what you would be paying. And then, at the end when you transact on one of the leads that we provide, we share some part of the commission, like, uh, I don't know, 19% or some, something like that. Now, today in, in, in the real estate world, you have two very extreme models. You have the Zillow Flex model, where like you don't pay anything upfront, and then you pay 35 or 40% to, to Zillow on every transaction versus the traditional CINC model of. You cover all the costs, you run the risks, and then you reap the whole rewards. And now I'm trying a little bit of this hybrid model where, okay, look you, you still have a fixed cost. But it's lower than it would be. And in exchange for that, CINC participates in your success.
dan-balcauski_1_12-03-2025_101659:So just so folks are following along,'cause I think it's probably important details, I just wanna make sure I'm tracking the, calling it A-A-C-R-M is misleading because you're also doing lead generation or have a marketing spend part of your platform that's bringing leads into the CRM. So it's a
alvaro-erize_1_12-03-2025_111658:Yes.
dan-balcauski_1_12-03-2025_101659:go to market. System as it were. And that's important because then you know, hey, we generated this lead, it went through the CRM, went to closed one, and so transacted, so you have that sort of end-to-end path. Is that, am I understanding
alvaro-erize_1_12-03-2025_111658:A hundred percent.
dan-balcauski_1_12-03-2025_101659:Okay.
alvaro-erize_1_12-03-2025_111658:I don't think we could do this if we did not have the leads aspect. Salesforce trying to charge you for your results is not gonna work. But in our case, because we know the leads that came from us that's something we can we can track. The question is why, right? Why would I do this? And for me, this is my thought as business leader, is it's a question of who should be taking risk, right? And so. In the traditional CINC model, the client is taking all the risk. Closing transactions in real estate takes time. Online transactions takes time. So the first six months, you rarely are going to make a transaction right away. Many clients do, but not everyone will. So you are signing yourself up to pay quite a bit of money through the first six months until you start getting results all the way into the first year. And you are running a lot of risk. Now Zillow very logically says, well, I'm a big, I'm a big company. I have big shoulders. Why have them, uh, run the risk? I'll run the risk, I'll do all of the investment, and then you do it, and then you pay me on results. Now I'm gonna take as much money as I can on results because I'm taking all the risk, right? The issue with that is that in the case of real estate, my experience is that it depends dramatically on the performance of the agent, right? And so, in the case of Zillow, Zillow knows this. And so what ends up happening is. Because they run all the risk. They end up having to control your business completely. They need to be able to choose who, and they're gonna take out anyone that they don't think is the best, and then they're gonna tell you exactly how to do it to run your business Now. I'm a libertarian and I think math, uh, supports me. I believe central government is more inefficient. It's always less efficient, and I know that Zillow does its best, but it's still a worse service than when you have individual agents entering through the whole life of the client exposure, not just at the end. And so. That's why I do think that the clients have to be running a risk because if they don't have skin in the game, they're not going to do their best. This is a tough job but they don't need to run all the risks. So by having this hybrid model, I go like, well, you are running enough risk that I don't need to decide if I want to take you as a client. You're paying enough that you can, if you believe in it, I believe in you. I don't need to judge. Now I have to charge you enough that I don't lose money on you. But at the same time if you believe in you and I believe in you, let's go in this together and let me share some of that burden and some of that risk so that long term, many people are gonna come and they're not gonna succeed no matter how much I was finding. And this, if you want as a SaaS leader, forget real estate. I was finding in my. Industry in my particular, uh, place, I kept investing more and more and more inclined so that they won't churn because I knew that for them to stay, which is the only way that I can make money as a SaaS business, as a pure SA business, is if the clients don't churn. Right? And so I need to do more for them, more for them, because they need to be successful, which makes them almost a little lazier of like, well, this guy is, it's his. Problem. Right? Let let him and you invest more and more and your margins start to get thin because you're putting more client service, you're doing more stuff for them, and you're not getting anything. The only thing that they get in return is just not churn. Today with this intermediate model, what it will allow me is, well, I can invest in you. Some of you will not succeed on those clients. I probably will make neutral money, not lose money, make a little bit of money, and then the ones that do succeed. Then I'm gonna share on that success, and I'm gonna have less clients making more money long term, but without having to be the gatekeeper at the beginning of who comes in.
dan-balcauski_1_12-03-2025_101659:There's so many details in that arc that you just laid out that I love. So I subscribe to the same view you laid out, which is, this is a risk. Sharing model. There's, I probably, I didn't invent this, contracts in general are risk transferring devices, right? Who's gonna bear the
alvaro-erize_1_12-03-2025_111658:Yeah.
dan-balcauski_1_12-03-2025_101659:the transaction? And when you think about these pricing models, you're doing the exact same thing. And I think you aligned it. You told the story very well where you're looking at the risk of a agent or broker that is on the platform and their cash flows are coming six to 12 months out, but you're demanding cash today in a traditional pay as you go model or traditional subscription model versus, hey, if we can align our, the cash we take in to when they get paid that. Allows them to feel like even if they may end up paying more, like to them,
alvaro-erize_1_12-03-2025_111658:Yeah,
dan-balcauski_1_12-03-2025_101659:Yeah, it's more palatable because they do not want to
alvaro-erize_1_12-03-2025_111658:You'd be surprised how many veteran clients of mine that know that the equation ends, that they pay more money, go like, yeah, that's fine. That's fine. I want to reduce my fixed cost risk. Real estate markets go up and down, right? And so you want to share that risk with them too.
dan-balcauski_1_12-03-2025_101659:And then I think the other thing that you mentioned, and you were hinting at this a lot with the Zillow example, which is the, attribution. these models is also always very difficult.'cause the question is, I think there's a big meme out there that user based pricing is gonna die. I think it's probably overblown. It is overblown, let's put it that way. Oh, the Zillow model, they have to control the outcome, right? So a
alvaro-erize_1_12-03-2025_111658:yeah,
dan-balcauski_1_12-03-2025_101659:like
alvaro-erize_1_12-03-2025_111658:a hundred percent.
dan-balcauski_1_12-03-2025_101659:a per a person behind the CRM platform, they still have to do a bunch of work to get that deal through the pipeline and closed.
alvaro-erize_1_12-03-2025_111658:Yeah.
dan-balcauski_1_12-03-2025_101659:so you're like, okay, we'll pay you for the, you pay for the user, but not for the result the platform gives you because there's a bunch of work that your platform is not doing. We actually need humans to push that through. And
alvaro-erize_1_12-03-2025_111658:Yes.
dan-balcauski_1_12-03-2025_101659:that's. Really apparent in the story you told about the Zillow approach where they're like, Yeah. yeah. If we're gonna do this, we need to
alvaro-erize_1_12-03-2025_111658:Yeah.
dan-balcauski_1_12-03-2025_101659:there And start pushing the lovers directly.
alvaro-erize_1_12-03-2025_111658:And so this is the trade off, which is, yes, it makes sense for the company. Take all the risk because it has higher appetite for risk. Great. But if you take all the risk on yourself, the client doesn't have skin in the game to do the part that they need to do, that's not trade off, number one. And number two, you need to be the gatekeeper of who's the client or not, which is really difficult. If you ever interviewed someone, it's difficult to know who's gonna succeed. On the other side, if the client takes all the risk, all incentives are great. He's gonna work super hard, but you're putting all the risk on the person with the shoulders that are less big, right? And so I believe this risk sharing one puts enough skin of the game in the game, but takes away some of that initial burden and that problem of time, right?
dan-balcauski_1_12-03-2025_101659:So as you've started to roll this out, I'm just curious, like what is the response from customers been? Is there, are there certain customer segments where this type of model has landed better than others? I guess any pushback that you've received from folks
alvaro-erize_1_12-03-2025_111658:Less than I thought. And so we are Today show. We are today offering both models side by side. And today like 60% of clients are. Choosing some level of risk sharing. And so that was, again, when I said to my team the first time, uh, that we're gonna do this, there was a lot of fear and panic of changing a business model that we had for 10 years. It's actually been great in a couple of ways. One is there's like 60% of clients that are choosing the new the new model. And that those clients are more. Eager to jump into a contract. They are actually performing better from a turn point of view, but also ironically. I am having to give less incentives to the ones not choosing it in the sense of the bigger problem of price segmentation is always like, how do I charge to each what they really can pay, right? And so before, if I was gonna give some incentives on that first year. I had to give them to all because like, I don't really know. Everyone's gonna say, please give me whatever you can give me right now that there is a trade off. Oh, people self-select, right? And so people that really care about cashflow and are really worried about cashflow aren't gonna go like, you know what, yeah, I'd rather reduce my cashflow a little bit and then, and my cash output a little bit, and then I'll participate at the end. Versus people that go, well, yeah, I said I wanted it, but I don't want it that much. So give me the platform. Don't gimme a subsidy, that's fine. So in the end, I have cleaner sales on the ones that don't take the partnership. And the ones that do then are getting exactly what they want, which is less cash output with some trade off at the end.
dan-balcauski_1_12-03-2025_101659:Well, this is super fascinating and I know it's still early days, so I wish you continu your success. Maybe we'll have to get you back in a year or two to tell us how this grant
alvaro-erize_1_12-03-2025_111658:Agreed,
dan-balcauski_1_12-03-2025_101659:ended up. I could talk to you all day. Unfortunately, we are running outta time, so I wanna pivot to some rapid fire closeout questions. Is that okay with you?
alvaro-erize_1_12-03-2025_111658:a hundred percent.
dan-balcauski_1_12-03-2025_101659:Awesome.
alvaro-erize_1_12-03-2025_111658:Get brutal honesty.
dan-balcauski_1_12-03-2025_101659:All right. All right. There, yeah, there, there won't be, there won't be challenging. What is your current favorite either business book or podcast?
alvaro-erize_1_12-03-2025_111658:Cool. I don't do much of either. Uh, I love history and fantasy novels and, uh, I'm always reading some version of the Lord of the Rings, uh, that is more current. Not that I love Lord of the.
dan-balcauski_1_12-03-2025_101659:do you get into the deep catalog of Lord of the Rings?
alvaro-erize_1_12-03-2025_111658:Yeah. I'm a Silver Meridian fan. Yeah, yeah. I'm, I'm as nerd as you can be. Look, it's not that I don't respect I've had great leaders and teachers in in business school and all. I think we learn by doing a lot and that it's totally great to get some input, but sometimes we look, we spend more time looking for input than actually doing I, I'm just one. I go, we do, and if we fail, we do again.
dan-balcauski_1_12-03-2025_101659:Well, I'm a huge nerd too. I got the whole Jordan Wheel of Time series on my bottom bookshelf over there. So,
alvaro-erize_1_12-03-2025_111658:Oh nice.
dan-balcauski_1_12-03-2025_101659:along there with you.
alvaro-erize_1_12-03-2025_111658:Love it.
dan-balcauski_1_12-03-2025_101659:but are there any habits that you've cultivated that help you stay on the top of your game? I.
alvaro-erize_1_12-03-2025_111658:No I am an early riser, but I don't know that's necessarily better or worse. I think for me is I do believe in being in the office, uh, I, I like being there 2, 3, 4 days a week, usually four if I can. I love the people I work with and it's very hard for me to work without being. I also understand some people, individual contributors, they need, they're focus time, so I try to also do a hybrid model there. But like for me to be successful, uh, I, if you wanna have an argument with me, which I enjoy very much, it's always in person. Let's just go on it, let's put the board in and that's where we'll get the best work done.
dan-balcauski_1_12-03-2025_101659:Exactly. Well, look, when you think about all the spectacular people you've had a chance to work with, anyone who pops to mind has had a disproportionate effect on the way that you think about either leading or building companies now.
alvaro-erize_1_12-03-2025_111658:I'd say, uh, it's a little cheesy, but it's, I, my mother was, uh, was, uh. Longtime business woman and politician in Argentina. She was a little bit of like the Margaret Toucher style. Very harsh, uh, but very smart lady. And she, if she taught me nothing else, is never expect anything for life or from anyone. You work and you earn everything and sometimes life is unfair and no one ever said life should be fair so just go at it. And that's probably been the most valuable advice I've ever gotten. It certainly stops me from disappointment because I never expect, I try not to expect, let's just go at it and see what we find.
dan-balcauski_1_12-03-2025_101659:Way to go, mom. You've raised an amazing son, so she should be proud. If I give you a billboard, you can put any advice on there. For other B2B Sass CEOs trying to scale their companies, what would it say?
alvaro-erize_1_12-03-2025_111658:Don't give up. And I know it's been said a lot, but you just go at it again. At the same time, my biggest, uh, uh, thing I have to fight against is the doing things as I've been doing them and that aversion from risk that comes from that. I think other entrepreneurs are a little more like, just jump jumping into it and sometimes too much in my particular case. I usually try to force myself to, to, Hey, let's just try it. And if it didn't work, we usually try two or three times before we really give up on it. So maybe, I don't know if it's the most efficient but for me, it works.
dan-balcauski_1_12-03-2025_101659:Well, persistence don't give up. Love it. This has been great. For our listeners, want to connect with you, learn more about Sink, how can they do that?
alvaro-erize_1_12-03-2025_111658:Oh, I'll, we'll put a link afterwards into CINC. You're welcome to, uh, send us a message and also if you wanna talk directly with me, feel free to just, uh, uh, say it and, and we'll connect. Happy to talk more.
dan-balcauski_1_12-03-2025_101659:Awesome. I'll put those links in the show notes for listeners. Everyone that wraps up this episode of Sask Gayly Secrets. Thank you to Alvaro for sharing his journey and insights. For our listeners, you found Alvaro's insights valuable. Please leave, review and share this episode with the network. It really helps the podcast grow. I.
