The following interview is a conversation we had with Sarah Lehman, CEO of Zartico, on our podcast Category Visionaries. You can view the full episode here: $24.5 Million Raised to Power the Future of The Visitor Economy.
Sarah Lehman
Thank you. So excited to be here, Brett.
Brett
Yeah, I’m really looking forward to this conversation. Let’s go ahead and kick off with a little bit more about who you are and a bit about your background.
Sarah Lehman
Well, let’s start. I’m a mother of three. I’ve got a 20 year old, 18 year old, and a 16 year old. I’m a wife of 23 years. I’m a CEO, I’m a board chair outdoor enthusiast, and I’m an avid packers fan.
Brett
A locked unpack there.
Sarah Lehman
Yeah. I’d say my biggest pet peeve are slow walkers. And I love any party that requires a costume.
Brett
What’s the craziest costume that you’ve worn?
Sarah Lehman
Oh, I dressed up as Barbie recently to go to the Barbie movie because my husband said he would only take me if I wore a blonde wig and a pink dress. And, well, I won. I went to the movies.
Brett
That’s awesome. And you mentioned outdoor enthusiasts there. What are some of those outdoor activities that you like to do?
Sarah Lehman
Oh, I do it all. I love to trail run and mountain bike, road ride, hike, anything that involves the outdoors.
Brett
I recently got into ultra running in the last few years and I’m very jealous that you live in Utah. I’m guessing there’s some amazing trails to go run out there.
Sarah Lehman
Yeah, literally right in my backyard. That’s my zen. That’s where I go to think. It’s where I go to. I call it active meditation, reconnect and just. That’s the place where I find most of my solutions, or at least insights as I’m running along the trails.
Brett
That’s so awesome. Do you do ultra runs or ultra distances?
Sarah Lehman
No, I do the most efficient thing possible, which is the shortest, fastest running I can do in the small time frame that I have given that I’m still running a day to day company. But I would one day like to do an ultramarathon, but that’s going to have to be in the future.
Brett
Yeah. I’m getting ready to have my first child, and I was looking at my Strava the other day, and it said I had run 175 hours this year, and I was thinking, there’s no chance that’s going to be able to continue. When I have kids, I think they’re just not going to have the time to run 175 hours in a year. So I feel like that’s going to shift at some point.
Sarah Lehman
Yeah, you make some choices, for sure.
Brett
Makes a lot of sense. Now, when it comes to your inspirations, is there a specific founder that’s really inspired you along in the journey?
Sarah Lehman
Well, I actually have the benefit of having two founders that have really influenced me. The first is a woman named Cynthia Fisher, and she founded a company called Viacord. And Viacord is a biomedical services company that banks umbilical cord blood to be used as an alternative to bone marrow in transportation. And I was a sophomore at Boston University, and she was starting her company, and she was looking to hire some administrative help. And I came on as the second employee hired as her administrative assistant. Literally got to sit on her couch while she brainstormed the name of the company while she founded it, helped create business cards. And I continued to work for her through college, and then after college, stayed working with her. And she is a remarkable entrepreneur. She also introduced me to the concept of going to business school.
Sarah Lehman
She was a grad of Harvard business school, and so she married her passion of medicine and the altruistic mission around medicine and what technology can do with her business acumen. And she exposed me to that whole world, and ultimately is the reason and inspiration why I went to business school. So she’s been a huge influence in my life. She was also this huge, big thinker, but really stayed focused on the details and taught me that the details matter. Right. The details matter. A period of comma, the way you talk in your communications. She was an extraordinary writer, and I just got to soak up all of her goodness while I worked for her for those couple of years. And then my second founder is my husband. I met him also while were at business school and out of college.
Sarah Lehman
He decided to start his own business, and he loved chocolate. So he researched a hot chocolate recipe and came up with this proprietary hot chocolate company called Steamer and really went door to the best candy stores, chocolate shops in the city of Manhattan. And ultimately, his product was featured on Good Morning America by Julia Child, drinking his hot chocolate. And he is a brand builder. And what I love about being exposed to how he thinks is helps create products and brands that people want to be a part of. And I think that’s really helpful. Even today, as I sell a B2B product, people want to do business with products that they believe in and that they love. And I don’t think that’s strictly just for B2C products. And so I benefited from his wisdom throughout these years.
Brett
That’s something I preach a lot with the b. Two b companies that I work with is, if you want to get inspiration, look at what these d to c brands are doing or these consumer brands are doing. That’s the future. Like, the type of engagement and authenticity they have, we need to bring that to this kind of boring, stale world of enterprise software. And I feel like that’s starting to catch on now a little bit more.
Sarah Lehman
I couldn’t agree with you more. When I was just getting started with Zartico, I obviously did a lot of research. I’m not from the tech industry. I’ve never sold a b, two b product before. So I thought, okay, let me get myself educated on the big movers and shakers. And I have to say, I’m like, wow, where is the soul? Where is the soul? People still want to do business with companies that they believe in. And so with Zardico, I feel we’ve done an extraordinary job. And I attribute this completely to the team. I think we’ve created a brand and a culture that our partners want to be part of. Now, granted, we sell into smaller, nichey markets that are ripe for digital disruption.
Sarah Lehman
So having a community that our user base and our partners can be part of is also really key for them. But I do agree that B2C, they’re a treasure trove of how to think about branding and how to think about community.
Brett
One other question I want to ask about. So you have two founders in the family. How do you approach raising kids? Like, do you encourage them to be entrepreneurs? Do you try to steer them away from it and say, no, that’s a very stressful life. Do anything else besides entrepreneurship? What’s your approach there?
Sarah Lehman
Well, we encourage our kids to pursue what they are passionate about, but we always teach our kids right now that they’re CEO of their own life. Right. They are the entrepreneurs of their own life, and so have that sort of scrappy mindset of, if you want to pursue something, it’s up to you to go after it and string along the pennies until you get that big break. Talk to a million people, network the way entrepreneurs do. So I think our kids, regardless of where they net out, are instilled with a true entrepreneurial spirit around how they think about their careers and hopefully their lives. And by golly, they have seen struggle, right?
Sarah Lehman
My husband and I have owned, co owned, still owned multiple businesses, some of them that were just literally at the brink of bankruptcy during 2010, where if the business went, so did everything else. And our kids saw us working hard together, side by side, slaying dragons to some of the more fortuitous times when we’ve actually had a liquidity event with the sale of one of our businesses. So I think they’ve definitely been exposed to the highs are highs and the lows are low as an entrepreneur and a founder. So you’ve got to figure out how to maintain some level of stability and calmness throughout all those ups and downs.
Brett
That makes a lot of sense. And that’s good to have exposure to both sides because that is the reality of the entrepreneurial journey is it’s painful sometimes and it’s awesome other times, but definitely has the highs and lows there.
Sarah Lehman
Yes.
Brett
What about books? The way we like to frame this, we got this from an author named Ryan Holiday. He calls them quake books. So a quickbook is a book that rocks you to your core, really influences how you think about the world and how you approach life. Do any quake books come to mind?
Sarah Lehman
Yeah, well, there’s two books I read every year, and then I refer back to them multiple times and I recommend them to everyone. And obviously one is the one thing, because by doing that one thing, it makes everything else either unnecessary or simpler. And I just love that concept of getting really crystal clear around what is that one thing? And that shifts over time. And I think the reminder of, okay, today that one thing might be completely to invest in loving my husband or my spouse because they need some TLC in order to ensure that they can man the things that are happening at home so I can stay focused on my business.
Sarah Lehman
In other instances, that one thing could be around winning this one deal because this is the domino that gets the traction that you need in your so I love, love that book. And then the other book I read every year is essentialism. And of course, I listen to Greg’s podcast because I do believe if the answer is not hell yeah, it should be no. And I try to, as someone who wants to say yes to everything, I keep reminding myself that has to be the mantra you have to be able to say, you know, for those that don’t mind a little bit of swearing, internally, we talk about how do you get crystal fucking clear of what you’re trying to accomplish and edit out anything that doesn’t fit into that CFC.
Brett
I feel like you hacked my bookshelf or hacked my Kindle. Those are two of my favorite books. But I talked to a lot of founders, and they also, especially Greg’s book, they talk about that. And his other book, effortless, I’ve been hearing that one more and more, so seems like we’re definitely aligned there on favorite books.
Sarah Lehman
Yes, effortless is on my list as well.
Brett
Nice. Let’s switch gears now and let’s dive a bit deeper into the company and how we like to start. This part of the interview is really focusing on the problem. So what problem do you solve?
Sarah Lehman
So did you know, let me ask you a question. Did you know that the visitor economy represents 10% of the global GDP?
Brett
I did not.
Sarah Lehman
And did you know that one in eight employees around the world are employed in the travel and hospitality industry?
Brett
I did not know that, but that one makes sense to me. The first one seems crazy, right?
Sarah Lehman
Crazy. 10% of the global gdp is dedicated to the visitor economy. And yet the stewards that manage these destinations literally are doing it with once annual surveys and spreadsheets. And so the problem that we are trying to solve is to help our beloved places and the stewards that manage those places to have the best technology and understanding in order to ensure that not only the visitors have a nice experience, but the residents have quality of life and benefit from this massive economic engine. And so what we bring to the table are high frequency, big data sets that help our destination stewards understand trends related to movement and spend and hotel occupancy, short term occupancy related to their destination to make better decisions. So right now, the customers that we work with are government tourism bodies.
Sarah Lehman
So every state, city, county typically has a convention bureau or tourism bureau. And then we have just launched our airport products. So now we work with airports. So destination marketing organizations or destination management organizations, as well as airports, our two customer bases.
Brett
What’s it like selling to both of those groups? And the reason I ask is we’ve never had anyone on the podcast that’s sold to anyone like that. Most of the time, it’s enterprise software they’re selling to the security leader or the marketing leader. So these are two very different groups that our audience probably knows zero about. So what is it like selling to them?
Sarah Lehman
Okay, so I am blown away at the passion and the commitment of the leaders of destination marketing management organizations. I am just blown away at how much commitment they have to ensuring the visitor economy is thriving, as well as to ensuring that their residents have a wonderful quality of life. And quite honestly, tourism in many instances is an underappreciated economic engine of our world. And every day these folks stand up and defend their investment in their budgets as well as the massive amounts of stakeholders that they have to manage, from the state legislators all the way down to their local commissioners and business owners. And they do it with the most commitment and passion I have ever seen. I never expected it out of the govtech industry, to be honest with you. I was like, oh, okay, nine to five.
Sarah Lehman
Oh, gosh, not at all the case. And I think it’s because they’re defending a public good, right, which is our most amazing and relished destinations that we all covet and love.
Brett
This show is brought to you by Front Lines Media, a podcast production studio that helps B2B founders launch, manage and grow their own podcast. Now, if you’re a founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we’ve built our service to do. You show up and host, and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io slash podcast. Now back today’s episode. Can you maybe provide a bit of context about how these associations and organizations operate and how they’re founded? So, for example, on the website I see right there in the middle, the Alaska travel industry association, is that like a quasi government association? Is it privately owned and it’s contracted by the government? How does this all work?
Sarah Lehman
The majority of our partners are in fact government entities. So the state office of the Tourism, sometimes it’s run as a separate office of the governor. Sometimes it’s under economic development. So they are most often government entities. And the same goes for airports, right? Most of our current customers and target customers right now are run and managed by the government.
Brett
Were vcs initially excited about this idea? Because when I think about government, I think very long sales cycles and I think that there’s budgets that probably aren’t very big. But again, I’m not from this space, so I could be completely wrong there. But what was that like in those early conversations with vcs when you were saying, hey, this is the market that we want to go after and serve?
Sarah Lehman
Painful. My advice to anyone is resilience and persistence pays. So a couple of things. First and foremost, some vcs and investors absolutely understand the Govtech space. And so it just took us a little while to find those folks, the others that it was new to. We had to ensure, speaking a little bit around our pitch, we had to ensure that the pitch was really clear about the problem were going to solve and how were going to solve it. But then, more importantly, how the team that we had amassed was actually the perfect team to solve it. So while you think that Govtech, while that must be a twelve month process, we amassed a sales organization that had relationships in this industry.
Sarah Lehman
And so our average turn of a deal is between three to six months, which once we shared that, it was like, oh, okay, this is a different type of experience, even when it was an enterprise sale, because we have enterprise all the way down to basic level packages.
Brett
Are you seeing this change now with govtech and investors? Are investors more open to backing these types of companies?
Sarah Lehman
Yes, because I think what we are highlighting as a category leader is that Govtech deserves the right tools. There is so much opportunity for digital transformation within this sector, and I think it went straight to the forefront during COVID Right. Because we could not hide behind the fact that were delayed or were slow to the punch. Covid really accelerated that even for our own company. We launched under the premise of bring us all your data and we’ll put it nicely into a business intelligence tool to realizing during COVID what entities really needed was situational awareness, and they needed to know what was happening now, not what happened this past year from a reporting standpoint. So that really accelerated our own transformation to deliver more timely and necessary tools to our customer base.
Sarah Lehman
But I think the whole industry was awakened to the possibility of replicating or at least looking to what was happening in the private sector and trying to bring those technologies. So we’ve seen a lot more influx of technological advancements in the Govtech space just in the last four years that we’ve been involved.
Brett
I want to ask a bit as well about timing here. So I know the company was founded and it looks like mid 2019, and then you took over as CEO very early on in the journey, which looks like January 2020. So are those accurate dates? Did you start January 2020? Because that’s a pretty interesting time to start at a travel tech company.
Sarah Lehman
Oh, you better believe it. My timing was impeccable. January 2020 came on board with my two co founders, Darren Dunn and Jay Kinghorn. We came together, we met, we agreed that this was a nice combination of skill sets. I really wanted to be an owner, operator, and CEO. So we put a little money in and then literally launched our MVP. This is a fun story. Launched our MVP March of 2020. And so the world shuts down. And mind you, this is a travel tech B2B company that sold primarily at trade shows. So April comes along, and we get on a Zoom call, and I ask my team, hey, guys, we’ve got some money in the bank, but we need some customers. So how do you guys think we’re going to get some customers if the trade shows don’t come back?
Sarah Lehman
Oh, Sarah, the trade shows will come back. This is a non event. This is a travel industry. Of course we’re going to have trade shows. A couple of weeks later, we get on a Zoom call, hey, guys, August is when we’re going to run out of cash. What do you think we’re going to do here about getting some customers? So a couple of weeks later, get on the phone, and they’re like, okay, we got an idea. I was like, okay, tell me what your idea is, because we definitely need some customers. Okay, we’re going to rent an rV, and we’re going to drive it cross country, and we’re going to bring the trade show to the people. So while everybody in the world was home life, selling your groceries, because that was what were doing.
Sarah Lehman
The summer of 2020, my sales team got together with a couple of folks, rented an rv, literally drove it to the parking lots of our customers, set up a small little trade show booth with a makeshift demo and some plants, socially distanced. And that’s how we pitched our company and signed up our first several dozen customers in the summer of 2020.
Brett
What did you do to get the team and yourself through that period? Because I’m sure that was a very stressful time.
Sarah Lehman
Oh, my goodness. It was an amazingly stressful time. And I remember being curled up under my desk, which, oh, by the way, was the laundry room, because my children were home and I had to give out my office to my kids. So I was relegated to the laundry room curled up under my desk and thought, what the heck are we doing here? How are we going to get through this? And mind you, my prior CEO role, I was this walk around CEO. I ran a manufacturing facility that was open from four to midnight and sometimes four to a.m. So literally I walked around, I talked to everybody every day. I built office culture, had lunch with people, and now suddenly I’m running a startup during COVID and we’re a work from anywhere organization.
Sarah Lehman
And oh, by the way, we started to grow, so we had to hire people and we couldn’t have them fly in for an interview, let alone relocate. So what did we do? I think we grasped and looked for any examples of how to create culture and community remotely. And we did everything. We had costume parties via Zoom. We have an amazing slack community. We have still a weekly all hands call that the entire company comes on and we introduce something called this is me. This is my favorite cultural aspect of Zartico is every couple of weeks, someone from my company just gives a brief 15 minutes overview of what’s important to them in their life, their family, how they got to Zartico. And it’s one of the most astonishing connection points that we’ve created virtually among our people.
Sarah Lehman
And then thankfully, two years later, were able to bring everybody together for the first time. And were over 30 people by then, and we hadn’t ever seen each other in person. So we’ve done something well because we’re now close to 100 employees.
Brett
I remember how weird it was to finally meet people in person after you’d been working remote for so long. It was so strange to have those first in person interactions.
Sarah Lehman
Yeah, it was remarkable. And so now every year, because we are a work from anywhere organization, we bring our team together every January for something called base camp, and everyone flies into Salt Lake City. So we’re actively planning that right now.
Brett
Nice. That’s so awesome. Something else you mentioned there that I want to dive into is categories. So one of my favorite words is the category a destination operating system.
Sarah Lehman
Well, our destination operating system is really our tool, and it is for the visitor economy category. You might also describe it as the place based category in that we define the world through the lens of a place, whether that your favorite place is a trailhead, your favorite place might be the sports arena down the street, or your favorite place might be that destination that you go to every year with your family. And so our destination operating system is a tool by which the stewards can help manage and better manage those places.
Brett
Now, dumb question for you. What’s the difference between tourism and the visitor economy?
Sarah Lehman
Well, that’s a good question. I don’t even know if I know the answer to that. I think tourism, in my mind, is the act of going to another place, whereas the visitor economy is the value of that marketplace, if that makes any sense.
Brett
Yeah, it does. I have to process it for a second, but I think it makes sense.
Sarah Lehman
Yeah.
Brett
Now what about growth? Are there any numbers that you can share that just highlight the traction you’re seeing?
Sarah Lehman
Yeah. So we have really benefited from extreme growth, growing more than doubling each year, given the fact that were bringing a product to market that our customers had never seen before. So were really thrilled to see this more than doubling every year up until this year. And we have intentionally slowed down this year so that we can right size some of our processes. Because as you can imagine, as a startup, you grow quite fast. Your processes, your people and systems don’t necessarily keep up with you. So we decided this year were going to like, okay, let’s slow it down a little bit so that we can ensure that our foundation is strong and we fully expect to accelerate into 2024 now that we have simplified our implementation process. The biggest Achilles heel, I think, for most startups is getting that implementation process right.
Sarah Lehman
And so we had an implementation process maybe two years ago that might have taken 120 days. I mean, that’s horrific. And now we have some customers that go live within 24 hours and our biggest enterprise customers are between 30 and 45 days. So we feel like we’ve done a lot of right sizing in terms of our processes.
Brett
You talked me through making that decision to slow down growth. Was that a difficult decision to make?
Sarah Lehman
Yes and yes. Because when the customers are there waiting and the opportunity is right ahead of you to intentionally say, you know what, we’re going to edit down our ambition to ensure that we have the infrastructure in place, our tech stack is right and the experience is what we expect. Yeah, that’s hard to do, but it’s also the right thing to do. We are building a company that is going to be, and we believe, a sustainable, everlasting legacy. And we’re dependent on word of mouth as our primary marketing tool. And so we need to ensure that our customers are happy and delighted. And so it was the right move for us. But certainly turning down opportunity as an entrepreneur, I mean, come on, that’s like one of the hardest things ever.
Brett
Yeah, I can imagine. Now, as I mentioned there in the intro, you’ve raised 24.5 million to date. What have you learned about fundraising throughout this journey?
Sarah Lehman
Oh my goodness. So I’m new to fundraising. This is the first time where we’ve gone out, at least in my career as a CEO, gone out to find external investors. I have learned that, well, first and foremost, I believe your cap table is your soul. And so I knew right away that I wanted to ensure that anyone we brought in as an investor, was aligned with who we are and where we wanted to go. And so I have probably met with 150 to 200 investors over the course of my almost four years of being involved. Our earliest seed investors were business friends and family. They knew me from my former role as a CEO. They knew my track record, and so I felt really good about bringing them into the fold.
Sarah Lehman
And then when went out for our series A, I just interviewed everybody because I wanted to ensure that their time frame was aligned with our time frame, that they thought about the business the same way we thought about it. There’s lots of investors out there with different paradigms, and so a word of wisdom is stay resolute and finding the right partner to ensure that they are aligned with where you want to go.
Brett
Let’s imagine that you were starting the company again today from scratch, based on everything you’ve learned so far. What would be the number one piece of advice you’d give yourself?
Sarah Lehman
I would tell myself to trust my intuition more, and what I mean by that is I should probably step back and give you a little background on how I got here. So, prior to Zartico, I was a CEO for a company called Envy Composites. We manufactured carbon fiber bicycle wheels components, and now frames. When I joined that company, it was on the brink of bankruptcy, and I was brought in to turn it around, of which I did, fell in love with that company, stayed on, grew the company, ultimately sold it to one of the most world renowned sporting goods organizations, stayed on for another couple of years to integrate it into that organization, and then finally stepped back after eight and a half years. I took a slight sabbatical because I promised my family I would take a break.
Sarah Lehman
I traveled extensively for that last role, and through that process did a lot of soul searching around what I was looking for in my next gig. I realized then I wanted to prove I had kids that were teens. I wanted them to see mom do hard things and see mom tackle something that was totally new. And so I was like, okay, I’m going to go into tech, and I want to go into tech, and I want to use other people’s investment to help grow a company the way I think that we could grow it if we had the right investors at the table. That being said, I joined the industry that I’ve joined, which I’ve fallen in love with immediately, but I didn’t know it right out of the gate.
Sarah Lehman
And so I was a little deferential in moments that I had strong intuition around, like, oh, maybe we should think about this differently related to the tech stack. Or maybe we should think about this differently related to how we speak to our customers. And what I would tell myself if I were to go back to the beginning is lean into trusting my intuition faster versus waiting to have so many years of experience to say, oh, yeah, okay, I’ve been around the block a little bit more, let’s trust that intuition. But I just think that’s fundamentally a hard thing to do as a leader, is to know when it’s intuition and when it’s just like a hunch that you need to go validate.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision that you’re building here?
Sarah Lehman
Well, the big picture vision is that to be the destination operating system, we have to actually work multi vertical. And what I mean by that is we work now with destination marketing organizations. We work tomorrow with airports. You can imagine a world where we work with these small businesses that also benefit from the visitor economy. You can imagine a world where we work with the sporting events and stadiums within that destination. So you’re standing at the 10,000 foot level as a destination operating system, ensuring that the whole destination is operating at its fullest capacity, but also with the mindset of that quality of life for our residents.
Sarah Lehman
And so multi vertical expansion is obviously key to that and ensuring that we’re building this network ecosystem such that the data from each of those stakeholders feeds into a better understanding of how to manage that destination. So that’s the big, lofty vision that we have for ourselves. And by golly, I have confidence that we’re going to do it.
Brett
Amazing. I love the vision and I’ve really loved this conversation. We’re up on time, so we’re going to have to wrap here before we do, if there’s any founders that are listening in that want to follow along with your journey, where should they go?
Sarah Lehman
Oh, well, please come to zartico.com. Also, you can follow us on LinkedIn, and we have a user group and a community that you can find us on LinkedIn.
Brett
Awesome. Sarah, thank you so much for chatting.
Sarah Lehman
Thank you.
Brett
Keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B founder looking for help launching and growing your own podcast, visit Frontlines.io podcast. And for the latest episode, search for category visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode, our channel.