Episode Summary
Executive Summary: Jeff Berman interviews Cass and Mike Lazaro live at SXSW about the messy, nonlinear path of building Buddy Media and other ventures. They recount near-failure after a stock sale collapsed, the importance of transparency, role clarity, board management, culture rituals, pivoting from bad ideas to product-market fit, and why they sold to Salesforce instead of going public or taking a richer Google offer.
Main Topics: Near-collapse after the golf.com sale: The Lazaros describe how an all-stock sale to ChipShot unraveled when the buyer went bankrupt before closing, leaving them without payroll money and forcing them to scramble to save the business. Transparency and resilience in crisis: Cass and Mike emphasize honest communication with employees, investors, and boards, arguing that radical transparency preserves trust during hard moments and that entrepreneurs must keep moving forward. Building Buddy Media from a pivot: Buddy Media began with a bad Facebook loyalty idea and evolved through multiple pivots after customers kept signaling a better use case: software to help brands distribute content and marketing on Facebook. Culture, rituals, and employee bonding: Cass explains how she intentionally built a strong company culture through rituals, humor, celebrations, and anti-clique management, believing people bond through shared experiences and fun. Board management and founder discipline: Mike argues boards work best when founders clearly write down strategy and focus, treating the board as partners; Cass adds that direct, specific reporting beats vague optimism. Exit choices and strategic timing: The pair explain why they sold Buddy Media to Salesforce, citing market timing, strategic fit, due diligence, and the changing Facebook platform landscape—even though Google offered more money. What they look for in founders and the future of building: As investors, they assess founder grit, self-awareness, team-building ability, and whether the business model, go-to-market, and finances pass a basic 'smell test.' Mike highlights AI and no-code as major opportunity areas.
Key Arguments: Entrepreneurs should not wait for HR or structural problems to appear; they should build systems early so scaling does not break the company. Transparent communication with employees and investors can prevent panic and preserve trust even in severe crises. A founder must know what they don't know and hire to fill gaps; humility and adaptability matter more than the initial idea. Customer feedback should drive pivots; when the market clearly points elsewhere, ego should not block change. Culture is created deliberately through rituals, humor, and shared experiences—not by accident. A board should be a working partner, not a ceremonial audience; written thinking forces clarity and better decisions. Selling Buddy Media made strategic sense because Facebook's platform changes threatened the business model and Salesforce was a values-aligned buyer. The best founders are relentless 'shovelers' who can survive repeated pivots and hardship while staying focused on the customer. AI, large platforms, and no-code tools have lowered the barrier to building software, creating a huge opportunity for new founders.
Data Points: ChipShot sale date: December 23, 1999 - The golf.com sale to ChipShot had closed before the company later collapsed. Collapse call date: March 3, 2000 - The Lazaros received the call that ChipShot was going out of business. Money raised after collapse: $1.2 million to $1.5 million - They raised new capital in one lunch to restart operations after the buyer failed. Employee nonpayment period: 3 months - Cass says transparent communication helped them keep employees even though they did not get paid for three months. Revenue milestone: $50 million in ARR - Buddy Media reached this scale before the strategic sale process intensified. Time to reach $50 million ARR: 3 years - They attribute rapid growth to riding the Facebook platform wave. Brands using Buddy Media: 9 out of the top 10 brands - Cass says nearly all major brands were using Buddy Media for social marketing. Facebook audience size: About 200 million people - Mike references the size of Facebook when the platform opened to developers. Acquisition premium gap: $100 million - They say Google’s term sheet was $100 million higher than Salesforce’s. Seed exit example: $5 billion in cash - Mike cites Scopely as an example of a strong investment outcome.
Pivotal Quotes: "Don't shine the turd." — Matt Sarovic: A blunt boardroom reprimand that taught them to report bad news plainly and avoid spin. "We're going to start this again. We're going to just start it again." — Mike Lazaro: His immediate response after learning ChipShot was going bankrupt and payroll was gone. "If it's not written down, it doesn't exist." — Mike Lazaro: His philosophy on board communication and founder clarity.
Implications: The episode underscores that durable companies are built through transparency, adaptability, and disciplined execution. For founders, the lesson is to pivot quickly, manage boards honestly, and invest in culture and systems before growth creates chaos.
About Masters of Scale
On Masters of Scale, iconic business leaders share lessons and strategies that have helped them grow the world's most fascinating companies. Founders, CEOs, and dynamic innovators join candid conversations about their triumphs and challenges with a set of luminary hosts, including founding host Reid Hoffman (LinkedIn co-founder and Greylock partner). From navigating early prototypes to expanding brands globally, Masters of Scale provides priceless insights to help anyone grow their dream ente...