Ep. 182 - What Most SaaS Founders Get Wrong About Go-to-Market

Guest: Prasanth Chilukuri, Co-Founder & Managing Partner at Soul Street Ventures 

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The biggest threat to early-stage SaaS growth isn’t competition. It’s founder distraction, unfocused GTM motions, and chasing quick wins instead of building a real business.

In this episode, Prasanth Chilukuri, co-founder and managing partner of Soul Street Ventures, joins host Ken Lempit to reveal why most early-stage SaaS companies struggle long before product issues surface — and how disciplined strategy, a tight ICP, and hands-on founder coaching unlock meaningful, scalable traction.

Drawing on his experience both as a SaaS founder (Tekmetric) and investor, Prasanth explains why “scale with soul” isn’t just a mantra, but a framework for building durable companies that don’t rely on hype, vanity channels, or coast-driven valuation games.

Key takeaways from this episode:

• Why misaligned ICPs and GTM distractions quietly stall early-stage SaaS
• How to test, retest, and refine GTM motions using real customer behavior
• Why AI discoverability is reshaping marketing efficiency (and what to do about it)
• How venture style differs across regions — and why it matters for founders
• Why founder coachability, discipline, and mindset are the strongest predictors of growth
• How unique SaaS data assets create new value (and why most companies underuse them)

If you’re a B2B SaaS founder, CRO, or CMO navigating early-stage go-to-market, evaluating AI’s impact on your product, or preparing for institutional capital, this episode offers a practical, grounded playbook for building a company that truly lasts.

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Transcript

Ken: Welcome to SaaS backwards, a podcast that helps SaaS and AI CEOs and go-to-market leaders, accelerate growth and enhance profitability. Our guest today is Prasanth Chilukuri, co-founder and managing partner at Soul Street Ventures, a VC that has expanded into private equity and also some special situations.

Before we jump into the episode, please tell us a little bit about yourself and your company.

Prasanth: Well, I appreciate it, Ken. Thanks for having me on. My name is Prasanth Chilukuri, i'm the managing partner for Soul Street Ventures. We started Soul Street in 2023 with the notion to invest in early stage B2B startups, particularly SaaS and tech enabled software. Our big mantra is to scale with soul.

It's a big component that we'll talk through essentially. But, I always feel like, founders have these amazing ideas and really they, they deserve a partner who can understand what it takes to go through the battlefield of growing a business. And, it's their idea and it's their baby.

And, we're thankful to be along for the ride with these founders and. Part of our journey is to, to work with these founders invest capital besides them, give them, go to market advice and serve as just a, a good, solid partner for their journey of scaling their company.

Ken: I, I think that's a really wholesome approach, and I'm sure that attracts a certain kind of partner for you as well. There's some looking for more than just money, right? They're looking for that kind of go to market partnership and, I imagine that feels pretty good when it works out.

Prasanth: Yeah, it did. Before starting Soul I was previously a co-founder and co CEO of my own SaaS company, Tekmetric. We bootstrapped that company from day one all the way until we did our series A in late 2021. And upon taking the series A, it dawned on me just how the culture and dynamics shift within the company and even on the executive teams as you take outside institutional capital.

And, the thing I always think about is like, when doctors. Go to medical school to become a doctor. Lawyers go to law school to become lawyers. But business folks, you don't go to business school to become a businessman. And I think particularly founders who have really great ideas, they, they're solving a real problem.

But, running board meetings and managing KPIs and elevating your staff and making the right hires and really setting up that vision is not necessarily taught really anywhere. And I think that's where we sort of come in with that experience and be able to kind of align with founders and their vision of where they wanna go and help them craft that, that right plan to execute.

Ken: That's really true. Having gone to at least undergraduate business school they don't teach how to actually do it. They teach you the theory and a little bit of, little bit of practice. So let's, let's dig in a little bit. You do take a very hands-on approach with portfolio companies and, often, like you might find yourself working day to day with them.

Can you walk us through how you plug in to their go-to market motion and what does a great early stage GTM discipline look like?

Prasanth: Yeah. So I think maybe starting a little bit backwards when we evaluate deals in Soul we're not, we're not a gigantic fund. We're not Founders' fund, we're not Bessemer, we're not the giant West Coast, billion dollar fund, right. And so we have a unique positioning right here in Houston, Texas, and, we serve a lot of the mid-market, mid continental United States.

We do have port coasts on the coast, but we sort of serve the, the founders who are not on the coasts and working with them. We try to identify deals where founders are, are obviously coachable. We, we enjoy the product. We, they're, they're solving actual real business problems and, we deploy capital to, to invest and be part of their growth strategy.

After investing, we typically take a board seat in every investment that we make and my analogy that I often share, it's like raising children and, I've got two kids and part of my job as a father is to teach them good nutrition, exercise. Just hopefully that they become a good human being by the time they become a teenager.

And I think investing in a early stage company is very similar to where you are investing in an early company and you're trying to teach the right techniques and, just thought process for them to go have a successful follow on series A, two A, series B, kind of at that stage. So that's a lot of what we think about with regards to go to market.

We look at the whole holistic side of the business. We partner with the founders. We look at everything from their teams. We look at their strategies, we look at their people, process, systems, everything that's involved. And then we really truly think about their business and who they're targeting.

So we first identify, obviously the ICP that they are approaching, and does their strategy make sense? And I think you'd be surprised how many companies or how many founders get in a position to where they have created a solution. They've created a business to solve a real problem, but there's distractions along the way that generate some revenue for them.

And then when you're in this early stage business. That can make a impact on you to for generating, different types of revenue, but it may miss the full vision of where they're going with their company. And so with the go to market motion, we, we often kind of figure out like, why are we building this in the first place?

What is our why? Why are we doing this? Who are we targeting? What problem are we actually solving? And then how do we get in front of those customers? And I think that's the most important first step is to figure out like, who are we selling to and who needs this? And did we create this just for the sake of creating it, or did we actually solve a real problem?

And so that, that goes into a lot of our diligence process and a lot of our thought process and, and. We've been very fortunate to have a really great portfolio of companies that have good products that really are solving real problems. And then as we think about their go-to market we test, retest and then see what works.

And we, we take a lot of data driven approach in terms of what actually functions and allows them to begin scaling their business.

Ken: There's a new insight in there that I wanna kind of explore with you a little bit. So a friend of mine is a few times exited founder said that he is more comfortable with East Coast venture money than West Coast venture money. And his analogy for it, or his way of thinking about it was that on the West Coast they spend almost,

growth at any cost, right. They're just super aggressive and on the east coast, almost puritanical. Right? Very conservative. But it sounds like there might be something going on in the middle of the country that's a little different. Can you expand just a little bit on, your perception?

Do you, do you have a similar point of view about, your coastal, your coastal colleagues, if you will?

Prasanth: Yeah definitely. And then just for full obvious transparency, like I've never lived on the coasts. Never associated or, or built anything on the coast. So, I can speak from the I perspective being, a Texas guy, and, kind of starting a company here and continuing to build a community of, of tech investments here in, in Texas.

But with the West Coast, it's interesting. I, I came across a founder the other day who had a truly an amazing product. And he's left and right. He's creating new opportunities for the company. But you know, when we talk valuation and we talk about where he is, it's, it's, to me, it's a little bit, it's sky high, it's mind numbing a little bit.

I'm like, well, how did, how did you, like, where did that come from? And I think that's probably the number one thing I think, I think we, we talk about often like the West Coast valuations, and if you get a West Coast valuation, then run with it. Go with it. But I think a lot of these West Coast, investment opportunities.

Usually they, they try to invest in everything and hopefully something does land right? It's, it's the power law, right? So invest in everything you can, and hopefully two or three really hit, and I think that probably really resides well on the coastlines. I think for someone like us at, so a, we don't have that luxury 'cause again, we don't have billions of dollars to deploy.

And then b, we have to be very meaningful and thoughtful on behalf of our LPs to make sure that we're investing in the right things that really can generate. I think my philosophy truly is build a, build a resounding business. Build a good business again, that solves a real problem, a hard problem, and that generates a strong margin for that problem that people want to have and people will continue to buy.

At Tekmetric, one of our big mantras we had is that. We have to earn the business of customers every single month. We did not have contracts, we did not have annual contracts. We, we intentionally did it that way because that forced us to keep innovating on our product, and that forced us to keep earning the business of that customer month, over month, over month.

We had to continue to deliver value and continue to deliver delight in order for them to continue to using that product. And so I think that's probably a large differentiator in my opinion, between coastal investing where folks have an idea. I've come across companies where they don't even have a product, but they have a skyhigh valuation.

I mean, I think that seems to be fairly common on the coastlines. I don't think you see that as much here in the central United States. So I think those are probably big differences that, that I observe so far.

Ken: I mean, it's interesting. These are all like moonshots, right? And it doesn't allow for what I believe to be a healthy organic growth process. And so it's high risk also, risk of failure. And I think as a founder you need to be aware of. It's really exciting to have somebody

give you an enormous amount of money, but it also comes, I think, with greater risk and obligations, so it's interesting kind of dynamic. I wanna move on a little bit, I think, to the idea of efficiency in go to market. and we see it too, and we're held accountable for that in our business trying to be efficient in the way we help our clients spend their budget. But you've been pretty vocal about waste.

You still see and go to market spend. And you've pointed out in particular Google Ads building content for the Google Gods, I think we're quoting you. So where do you believe SaaS teams should be redirecting their investment? AI discoverability is definitely an area that is affecting people's plans, but how do you think our SaaS companies should be, placing their bets to improve their discoverability and go to market efficiency?

Prasanth: Yeah. I don't think there's a singular answer that everyone can use out of the box. It's very dependent, obviously, on their business and what, again, what problem that they're solving. So for example, I've got a couple of companies in my portfolio I have one that is enterprise in the oil and gas space.

And so should they be marketing on Instagram and in social places? Probably not. That's probably not the avenue in which their audiences live. And, oddly they've, they've actually had a great amount of success posting job openings on LinkedIn and that actually garnered a lot more business for them, a lot more looks and awareness of their business model because a lot of engineers in the Houston community saw the posting and says, that's exactly what I do.

And they wanna be part of a tech company that happens to be in Houston. And so that actually got a lot more business and conversations going for that particular portfolio company. So that's one avenue to go down. And then you have another one where I've got a portfolio company that does hunting and fishing Airbnb for hunting and fishing essentially.

And so they basically target outfitters and they build a management software tool for hunting operations to be able to get clients to come to their, their deer lease or their, their fishing outfit. And then they, they're able fishing charter and they're able to kind of garner customers that way. That probably is a little bit better in

hunting and fishing type editorials or things with Bass Pro Shop or Cabela's or, more of the outdoorsman space. And so I think the first way to answer your question is like, identifying again, your ideal customer profile and like, where do they live? Meet your audiences where they are.

That's the number one thing that I always insist founders really think about. Where do people that use your product live? Those that use your product or those that would potentially benefit from your product, what else do they do? What else do they read or research or, or, get in front of them that you could be a part of that conversation?

Ken: I wanna double back a little bit on the, being distracted. 'cause I think you're absolutely right about this. You have to have a lot of focus on who your customers should be and, and are and how they behave. And I've, I too have seen, especially early stage founders get very distracted by, you know what I call the spectacular, they try and

do something that's gonna change the game for them. And they put too much emphasis on this, like one-off exercise. I'm just wondering, how do you help founders learn like method and iteration and test and discipline? Or do they do a lot of your founder, GTM teams, do they already have that skill set?

Prasanth: I think many of them have a basic version and, with Soul Street, we are not necessarily the first seed check in. Part of our requirements, we invest sort of after they've developed an engineering team, they've actually got some sales underneath their belt. And, customer reviews are very positive.

And so generally after the 250k to 500k MRR mark. That's where we start to come in and, and really take a look at the business and start asking questions with the founders and the customers to kind of understand the product even more. But I think where to start, it always starts with a strategy.

The strategy is the number one thing that I think, the age old tail of like, if you wanna cut down a tree, you should spend three hours sharpening your, your axe, right? And I think that holds true even in this sense, like really thinking about the strategy before you go out and start spending on swag and spending on sweatshirts and spending on trade shows, and spending on, Google ads, et cetera.

Just to, just to a spray and pray. And hopefully somebody sees you approach, which can be very expensive and detrimental to a company. And I think it's really just taking a slow go, slow to go fast type approach to where, again, understanding where your customers are, understanding what needs are you solving.

Are you communicating the value proposition and are you communicating of how they benefit from your solution in a very easy format of where they live? And if you do that, you get eyes on your product and then you get to continue to have that conversations and you ask more questions. Where else do they look?

Where else do they research? What else do they read? What else do they watch? And getting in front of that. But you know, we, we live in a very interesting time right now to where. We're competing for eyeballs across the board in every spectrum, right? Between all the social media apps, between news articles, TV shows, YouTube, Trade shows.

It's, it's, from COVID to now. It's just been a whirlwind in the last five years of how much has changed. And then plus with, of course, the AI with, with Grok and ChatGPT and these things coming around now too like those are changing in which how we discover things. And so,

it's an ever evolving game. I don't think there's one solution, at any point in time. I think even when, running Tekmetric, it was a different point in time, and how it is today is a different point in time. So it, it really depends on how your business is structured, the product you're offering, and where your audiences live.

I think that's, it definitely goes to the strategy first.

Ken: Yeah, I mean, finding the right media for each of our clients is definitely an issue where for example, we're working with a manufacturing software company and the people in plant maintenance, they aren't on LinkedIn. so much of the reflex of action, in enterprise B2B advertising in that little space is let's start with LinkedIn and see where else we go.

And we almost have to turn that upside down and say, where else can we go? 'cause we can't find these people. You know, Our go-to media doesn't work for these guys. It's interesting.

Prasanth: The traditional ways of marketing are not dead. I think those actually are kind of, are interesting ways to grill a market, especially in this early stage. I'll share a story with you. I think with Tekmetric. We had an opportunity to, have a meeting with a very large client, a very large enterprise client, and I heard at the time, through the grapevine that they already selected another partner and we didn't even get a shot of the table.

I remember the story so vividly, like it, it boiled my blood so much so because I knew we were a better product, I knew we were a better fit for them. I knew that we were gonna offer better service and I knew that they would be happier with our product, but we just didn't get a chance because at the time we were a bit smaller and they didn't, they didn't hear of us yet.

So, I, I remember I was at Whole Foods with my wife and my kids and I, I just, after that I kind of dropped 'em off at the house and I went to Target and Toys R Us and I bought a bunch of those little yellow Tonka trucks. You like those metal Tonka trucks that, I used to have as a kid, like those heavy dude little ones that that kids play with,

right? And I bought 35 of them. I'm pretty sure 35 or four of them. And I went to LinkedIn and I found every executive and every single person in that building and I made a presentation and I put it in the back of the truck with a beer cozi. And I just said, look, let us do the heavy lifting for you.

Like are you sure you're making the right decision? And I just overnighted it to them the next morning to everybody and like. By the next day we got a phone call saying, okay, you got our attention. Like, can you come to our offices next week? And like, let's hear your pitch. And then we won we secured that deal from them.

So that was amazing. So I say that to where traditional marketing does work, if you know how to use it to your advantage.

Ken: Absolutely. One of the four P's is promotion. So, it's a, we, we still talk the four P's in our business 'cause we believe the foundations don't change. Just how we execute them can change. So that's a great story. You mentioned before and I wanna turn a little bit of attention to, sort of the impact of AI

on our business. And you've said that it represents a structural shift on par with the internet. I think, we would all agree with that, but you don't see it as anything short term. And I guess the question that's germane here is how should SaaS founders evaluate AI's impact on their product and business models?

Without hunting for valuation, like, is it copilot? Is it rebuild the business, rebuild the product? What steps do founders have to take here?

Prasanth: Yeah. It's still very early, I would say. I think, even when we launched Soul in 2023, AI was such a buzzword prior to ChatGPT's, big debut to the world. We, obviously AI was in the rumblings for a couple of years now, and, and, and a lot of people used it as a buzzword saying, yeah, we're AI enabled, we're AI this, and the number of pitch decks I've seen with AI driven approaches is, is almost mind numbing a little bit.

And every, every, I get it. I get why they do it. 'cause they're trying to get attention. And there's two schools of thought. Either you're in it and we're gonna invest in you or you're not in it and you're gonna miss the boat. And so I, I get why, founders feel compelled to kind of throw that in there, but.

I, I would encourage, what is the AI strategy? Is it, is it a widget that helps you do something a little bit faster? Or are you truly, do you have a unique data set that can be monetized or can be leveraged to really add value to a business using, machine learning and big data type, core projects, right? So I think it really depends. But you know, we're, we're very much still in the early innings of what is to come. I think, we've all I think, have accepted in the last 12 to 18 months that AI is here to stay. I think just the general population has now realized like, this is not going anywhere.

But I believe strongly that I think a lot of businesses and consumers also don't know how to fully utilize it to the n degree of ai. And I think part of that is because I think the capabilities are not there yet. And I'll give you an example. Like I, I'm, I actually have subscriptions to, all of them. I have subscriptions to Grok, I have subscriptions to, I'm an investor in Grok with XAI I've got ChatGPT, of course, and I've got Gemini. I've got all of 'em. And so I've tried, I've actually tried to use each of them for different business purposes and I know Gemini just released Gemini three this morning, so I haven't tried that out yet.

But for me, like. I personally hate email. Like I think email's an archaic type of communication. I don't know why people still use it today. Like it's such an archaic way of kind of still, still conducting business, but it is what it's, it's, it's a necessary evil. But I would love Gemini to filter out my inbox and save me time and say, Hey, look, just what are the messages I really need to respond and like, get to, and all my junk mail?

Delete it. Get rid of it, right? It can't do that yet. This in such a kind of a simple thought process, right? Or, Hey, I've got this big spreadsheet. And tell me, a financial spreadsheet, for example, tell me where the cost trends are going for the last, three quarters on the American Express card for something,

right? And it can't do that. It's not allowed to do that. The parameter's not right, or the answers are not right. So I think there's still, a gray area where people are having trust issues with it to make sure it's correct and rightfully so. So I think that that's, we're still very early in the innings of like where it's gonna take an approach for SaaS products and, and where it can go in, into businesses.

But, it's an exciting time though, and I think it's, it's, we're, we're gonna have the same conversation, Ken, a year from now, and it's gonna be completely different. Promise you that.

Ken: You know, it's interesting, you inspired me to kind of generalize on one aspect of your the last few moments, which is very early in my career, I was in the data business market data, this was 40 years ago. And what we soon realized is that proprietary data was the coin of the realm.

Any data that any of our competitors could put out. There was no value to that. No marginal value, right? We can only charge whatever the market would bear for the commodity data, but once we had proprietary data or proprietary ways of manipulating that data, then it became super valuable. And I think that's true today as well.

The, where proprietary data resides is kind of, it's very different than it was, a few decades ago. So now it's with the customers. Does your AI. Process their data in a way that's revealing, and I'm thinking of things like the sentiment and kind of extractive applications against applications like Gong, where you take every prospect and customer applic, you know, communication and

process it for insight, right? Stuff you couldn't do before. Like we used to actually listen to phone calls of salespeople like manually, but now we don't have to do that. So we get this kind of step change value of the data. Or if you're the vendor and you're managing whatever process it is for dozens or hundreds of clients.

That so-called God view of the data that's, coursing through your system has a huge amount of value that could never have been extracted in the same way as it can with some of the tools. So I think the most interesting things I've seen are not the copilots. I mean, they're cool, they help you a little bit, but it's these things that create new value where you couldn't have done it before or it would've been really hard to do.

So my, my encouragement for people with those applications, I'm thinking we had a, founders who have those kind of applications in market or under development. And I'm thinking particularly of a guy who was on the podcast a while ago Ellie Portnoy. He has a company called Back Engine and they do process all your customer communication, all your prospect communications and the insights are really fabulous.

So, it seems to me that's one of these great places that AI can make a big difference.

Prasanth: I think just to add to that, companies are becoming more and more aware of the unique data sets that their SaaS product is generating. And, and to add to that, I was reading an article, I think in Bloomberg or something this morning and it was talking about how like now they, AI itself is creating even more data.

That's not necessarily, coming from customers, but AI itself is generating data sets now. And so at what point, it's, it's an a mass amount of data, but I think where the change paradigm shift happens is once you realize what you can do with it. And I think that's the big question and I think at first is just organizing and being able to synthesize the data.

But I think. Companies still have a huge amount of upside and potential to figure out like how to use the data to solve problems that they haven't thought solvable before. I've always found it interesting be, we've been, my background kind of coming from the automotive space. We tend to get a lot of data regarding vehicle data customer data, et cetera. And to me, I, I think there's always trends that you could not capture before. And so if you've got a specific vehicle that maybe has more wear and tear in a southern state because it's dry aired and humid compared to a northern state, I think you can start identifying different trends based on what that data set can do.

And so I think these applications are gonna be very valuable across the board of everybody that's doing it. My portfolio company, smart chain the data that they're gathering at the wellhead for oil and gas companies is intrinsically unique. And it's something that even the big Fortune 500 companies would love to have.

And I think they're also trying to figure out like, okay, we know we've got something unique here. Let's test out a few things to see is this valuable? Is this valuable? If we, created this and use a trend and let the AI kind of make predictable outcomes for engineers, is that attractive? And I think you're now getting into an area that's, that's, I, I think truly just fascinating and it's, it's an exciting world to be in.

I think we're still in the early innings of anything.

Ken: Yeah, I always feel like we're always in the early innings, that's why the tech space is so exciting.

Prasanth: Yeah.

Ken: I wanna move on to something we touched on when we did our prep session that pricing is moving toward this consumption based model. But from what I've heard. It's not easy to pull off.

But I guess as AI is becoming the driver, seats aren't as important, right? You might have agentic solutions that, they do the work of 5 or 10 people managed by 2 or 3 people. So, what are you seeing out there in the market? How should these young companies be thinking about pricing.

Is consumption pricing a barrier to marketplace success right now? Do people understand it and accept it? It's kind of the thinking that I'm, I'm working with.

Prasanth: Yeah. Once again, it, depends on the industry that you serve and the product offering that you're working with. But, I think consumption based pricing, it's not a new concept of course. And I think you've had several companies that, that drive off of consumption based pricing. I remember a lot of these big BI tools, big BI dashboards back in the day, Domo, Tableau, et cetera, like they used to charge you based on consumption.

However many. Analysis that you type, you run in the platform would be a charge, right? So like, this is not a new concept, but I think the world and the markets are still trying to figure out how to price AI and how to price these agentic type prototypes. I think with the SaaS model.

Again, you have unlimited users and it's monthly fixed fee, or you charge per seat and it's pretty straightforward and you get kind of that unlimited use of that product. But there's a lot of human intervention in the, in those seats, in those capacities, right? There's a product that I came across where they started using kind of consumption based pricing, and I thought, okay, that's, that's interesting.

Like, I see how they're doing it, and I think that's, for every time the agent goes out and answers an email or does something for you, it, it reduces the credits. Like a, like a debit card basically and just kind of reduces it down and you buy more credits. And it's interesting because, I think for folks that heavily use it, obviously they're gonna pay for more of the compute power.

I think for folks that lightly use it, maybe they shouldn't be charged the same exorbitant rate to get the same value because they're gonna use it a lot less. And so I think that likely would become more and more popular especially with these agent forces that come on board.

Ken: kind of. Pull the meaning out of that. It's a sense of fairness. If we can communicate that it's a fair pricing mechanism, we might get people over the hump of moving from a seat based price, which they can budget for and are comfortable with to something different, right? So we have to get people comfortable with this new, new pricing model.

Prasanth: And the same happened with SaaS. I remember the QuickBooks. QuickBooks is, is a, is a great example. To every company at the one point in time was on QuickBooks Desktop, and then when QuickBooks wanted to go to the cloud and push people to a monthly subscription model for their accounting, of course people were arms up in the air and like, what is this?

It's my product, my data. Like why am I charging, paying for QuickBooks every single month. But now it's, it's the norm. It's standard. It's in the cloud, it's everywhere you need to be, and it's, it's become the norm of like you pay monthly for, for that. Subscription price.

Microsoft, we used to all get DVDs, and USB sticks back in the day to get the new office or Windows update. And then they went to Office 365 and all, you pay monthly in and out. It's the norm. Even children's games, I mean even video games like with Xbox and PlayStation five and, and the switch and like, they're all monthly pricing.

So it, it's become such a norm now that you don't remember the day where you bought software once and you pay $119 and you get it forever. Like now. It truly is a monthly subscription cost. And so I think as you transition to cost basis of consumption pricing, I think. It'll become the norm. And I think that's the way to, the way to democratize the use of AI between who uses it more and uses it less, but who's ultimately paying for the compute power.

Ken: Yeah, that's a good point. I think, you tend to live your experience in the now, hard to project yourself into the future, right? And two, three years from now, I don't think we'll be talking much about consumption based pricing. So I agree with you.

Prasanth: I mean, those that have the big data farms or, or the big data centers who control that, the magnificent seven, et cetera, that, that can probably get away with fixed pricing and people you paid if you paid. If you don't, you use it.

But I think the smaller startups who are still hosting their services on AWS et cetera, that don't, can't afford obviously the big infrastructure, they're gonna have to probably do a consumption based pricing because I think they're gonna be underwater on compute costs 

Speaker 2: cost of goods are variable for them, right?

Prasanth: yeah, because I think we still haven't figured out how much does it cost to even run a query.

And I, I think, I don't remember the exact numbers, but you know, I was reading one of the articles, like every time you use Chatt PT to research something, it costs X amount of. It's, it's expensive. It's expensive to run a query and the energy costs, et cetera. And so you got, you got a lot of people who are just consumers, especially like using it for like, Hey, show me movie times, at 7:00 PM for this new movie that's coming out.

And it shows, that's, we're, we're definitely using it in a more lazier way, in a more productive way. I dunno if lazy, but more productive way. But again, someone's gotta pay that bill.

Ken: Yeah. And I heard it cost them at ChatGPT for please and thank you also, right? They have to process the meaning of please and thank you

a billion times a day.

Prasanth: Yeah. At least people are still polite to AI.

Ken: Yeah. Well, you better be. I wanna land kind of where you started this business, kind of your, the ethos of the business the role of mentorship. You touched on it briefly about, you're, you feel like you're helping these entrepreneurs grow up, but what is founder coaching look like in practice for you, for Soul Street?

And what does that, what does it look like and what does accountability mean in a relationship where you're both investor and, and mentor to these entrepreneurs and companies?

Prasanth: I mean, again, it starts with coachability. I think if you can take the hat off, I, I think. Again, from the I perspective, I I, before, even before taking institutional capital for my startup at Tekmetric, I was also with an oil and gas company that private equity backed before that. And there's this notion where if an institution or a large investor base kind of comes in.

That culture changes. And again, I think that's the basis, that's the thesis of it. And why is that? And that's, that's the big question. I was like, why does it change? Because, I get it. There's welcome changes, but it doesn't need to change every single time. And I think working with these founders who are coachable, you're able to work with them and be able to kind of see their vision and you're able to see their blind spots.

And I think where we translate at Soul is I've been in their shoes before. I knew what it was like to take that check and, and look, you're throwing terminology between term sheets and, what is between the cap tables, between what is pref rights, non-pref rights. Like you you're throwing a lot of financial terminology or themes from institutional investors that can be very intimidating for founders.

I met one founder that we worked through for a while, and he was always just trying to give me the right answer. He was always just trying to make me happy. He always tried to answer in a way that I'd be pleased instead of the truth, instead of like, what actually was happening

right? And that was a hard conversation we had to have. And I was like, look man, like I, I'm here to support you. Like we win together. Like you trying to tell me what I want to hear doesn't allow us to win. That's, this is not how this works, right? In another analogy that I can use is it's, it's like having a personal trainer at the gym.

You can have those personal trainers who say, yep, I want you to run around the parking lot. I want you to go do 20 pushups, and I want you to eat chicken breast and sweet potatoes for the next week and call me when you're done, right? And there are trainers like that. There are investors like that who say, here, here's a hundred thousand dollars, here's a million dollars.

Like, call me if you need me. I'll see you at the board meeting, right? And they're a dime a dozen. There's a ton of those. But then there's others. There's others who actually care about your trajectory. There are those coaches. There are those trainers who will look at your age, your, your routine and help you kind of build a discipline to be able to work out and build strength.

And that really kind of help you kind of move forward with your health and fitness goals, right? And I think the same applies in business. I think the same thing, like I can understand and empathize with the founder, understand their mindset. It starts there, it starts with the mindset, starts with kind of what they, how they view the business, how they view themselves, understanding where their weaknesses are, understanding their strengths, understanding their teams.

The biggest challenge I think founders have is often, how to manage their teams. And when you're in a startup phase, you often hire your friends or family or folks that can kind of come and join you. And it's difficult to make those, hiring and firing decisions with those early folks that have joined you.

But I think working with them and teaching them and coaching them allows them to kind of really, really change their mindset and really kind of grow and scale the company.

Ken: Well, I think that's a great place to land our episode. I wanna thank you so much for joining us. If listeners wanna learn more about Soul Street, your portfolio companies, or reach out to you, how can they do that?

Prasanth: Yeah, you can visit us soulstreet.com. We're active on LinkedIn as well, so you can look up myself or my co-founder, Scott Adams. We're pretty involved in there. Reach out to some of our portfolio companies, talk to them and ask them kind of why they've decided to, choose us as their partner, their equity partner, and work with them.

And, we're always open for dialogue, always open for conversations, and regardless if we invest or not invest in your startup. We love to hear it and we love to kind of help, help the community 'cause we're all in this together.

Ken: That's great. Thank you. If people wanna reach me, I'm on LinkedIn/in/kenlempit. My demand Generation and advertising agency for software as a service is Austin Lawrence Group. We're at austinlawrence.com and if this episode didn't convince you to subscribe to the SaaS backwards podcast, I'm not sure what will.

Prasanth, thanks so much for joining us today on SaaS backwards.

Prasanth: All right, Ken. I appreciate it. Thanks for the time.