Alex Levin is a Harvard grad and the Founder/CEO of Regal.io, an Outbound Phone & SMS Sales Platform. Starting in 2020 with 0 customers, their service has now generated over $1 billion in revenue for their customers a few years later.
Alex has a clear and proven perspective on how startups are built. He delivers practical strategies and tactics for getting your first customers that will help any startup or established business. As always, I’m blown away by how much I learn during these short interviews. Listen and learn from one of the best.
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Thank you. And I’d like to thank our team and our product for driven a billion dollars of revenue for our customers. I can’t take credit for all of that as much as I’d like to. I heard a long time ago a quip that I’ve always liked, which is when something goes right, your team gets credit for it. It’s only when something goes wrong that the CEO takes responsibility for it.
Paris Vega (00:19.774)
Paris Vega (00:33.31)
That sounds wise. That’s a good leadership principle. All right, let’s get right into it, man. You’ve got a lot of customers, or at least some very valuable customers, it sounds like, given how much revenue you’ve helped generate, or your team has helped generate. Talk to us about how you got your first customers.
Sure, sure. If I go way back to the beginning, we’re a venture-backed company, and so I’ll even start there before even customers sort of the decision of do we raise money first, do we go get customers first, like kind of chicken or the egg, what do you want to start with? The advice that I give people always at the beginning is convince yourself first. It’s actually easy to convince venture investors at the beginning that they should take a bet on you.
When I meet sort of early stage founders, their experience, they’re excited, they have a big vision. I think they can convince investors. But I think the trick is make sure that you wanna be in this business for, call it 10 years. The advice I was given is make sure you wanna be talking about exactly the same thing, literally the same words for the next 10 years of your life. Because if you are, great, you’re excited enough about this opportunity, you’ll figure it out. But if you’re not.
If it’s just flavor of the month, the latest thing you’re interested in, you’re not going to go through the lows. You’re not going to go through what you need to do to get to the end. So be careful on that first.
I think depending on the business, sometimes it’s better to get customers first. Sometimes it’s better to get investment first. Largely, I think it has to do with people’s risk tolerance. So if you have a little bit of money put away and you can sort of fund yourself for a little bit, I do suggest going and doing customer development first, especially if it’s a shorter sales cycle, call it 30 to 90 day sales cycle where you can get through it and really understand how customers are going to see your product.
even if you’re just showing them decks and you don’t have a built product yet before you go and raise money, if it’s an enterprise sale, it’s gonna take years to sell it or you don’t have money aside and you need the money to pay yourself, of course, go get the money first. So that’s all prequel to say, in our case, we got to very high conviction that there was a business in our area where we could build software for B2C sales teams that were helping engage customers and help them.
buy more considered purchases online, things like healthcare, education, insurance. So we knew that this was a business. We knew that this was gonna be big and we convinced ourselves of that. We had a little bit of money put away and so we started talking with customers ourselves. At the beginning, there was no sales team, there was nothing, it’s just my co-founder and I. And the way I think about it is, your friends are terrible customers. Because if you go to your friends and you say, I’ve got this thing, they’re gonna say, oh, that’s great, Alex, we love you. Of course we’ll do it.
They’re not going to tell you the truth, that you have a silly idea or the pricing’s wrong or you’re pitching the wrong value proposition. So look, practice with your friends. I’m not saying it’s bad, but don’t rely on your friends for your first customers. Go rely on your friends’ friends, like one degree away, because there’s enough connection that they’re going to take the call and listen to you and kind of, but there’s enough skepticism that they’re going to tell you the truth. And you know, if they’re not reaching across the table and pulling you and saying, I need that.
Paris Vega (03:14.078)
You know, you haven’t even built it yet, but I need that thing. You know, you don’t have product market fit because, you know, eventually, you know, later, you know, it won’t be you selling it, you know, it’ll, it’ll be sort of somebody else. So if you can’t get them excited about this thing and have them, you know, pulling across the table for it, you don’t have it.
Paris Vega (03:44.333)
So very early on, you know, that’s what we did. Like I would go to friends of friends and, you know, talk to them. And we tried different industries and different size customers to get a feel for what they needed. And, you know, we ended up zeroing in on, you know, these certain industries, these considered industries like health care insurance, you know, mid market enterprise customers that already had phone sales teams. And, you know, we would do everything we could to go and see them. So we’d ask our.
you know, friends for introductions. I’d go randomly cold email people on LinkedIn. So one of our bigger customers today, SoFi, I went on LinkedIn and I messaged their VP of marketing and I said, look, we’re doing something that I think you’d find interesting based on what’s going on.
I know you don’t know anything about it, but like hear me out for a second. And I bet you this have a good impact on your business. And, you know, he was a, uh, willing to take that call and hear us out. And it turned out that they were a great fit. And, you know, they ended up being a humming, a very big customer of ours. I think the, the advice that I got that I didn’t take early that I should have taken is
Paris Vega (04:54.429)
Once I got a little bit of that flywheel moving, I should have hired like, I sometimes use the word BDR plus, should have hired somebody who was very smart, new sales, wasn’t a closer yet to help me with the sales process. Help me make sure every week I was reaching out to more people. Help me with follow up with meetings. Help me refine the decks we had. Because when it was just me as the CEO.
If there was a weak ride to do something else, there was no sales happening. And then guess what? Two weeks later, I had no qualified leads and two weeks after that, it wasn’t closing anybody. So I would have been much smarter to hire somebody to help me at the beginning.
Paris Vega (05:27.335)
and be more consistent and sort of make sure I’m talking with more customers on a regular basis. But you know when I look back, you know I’m very appreciative of the customers that started with us early and I think they understood the trade-off. The trade-off was there was a very early product, you know with a vision they believed in a very early product but they got direct access to the founder. So I hope very good level of support, very high input on our product roadmap.
a lot of insight from our experience in this industry directly to them, not through three layers of management. And so they understood the trade-offs and they were willing to take the early product in exchange for the benefits on the other pieces. Now obviously we’re two years in, two and a half years in, we’ve driven over a billion dollars for customers. It’s a very different exchange. We have a much more sophisticated product. We have people that are really deep in certain industries that can help those customers succeed.
customers taking a bet on, you know, two people in a room anymore, it’s changed.
Paris Vega (06:36.142)
So in those early days, you were reaching out cold on LinkedIn as one of your tactics. What are some of the other little tactics you were using in those very early first moments to get those first couple customers?
Yeah, I would just go on LinkedIn and look at everybody that my friends knew. And if there was anybody they knew on LinkedIn that I thought was an interesting prospect, I would send my friend an email saying, hey, so and so, thanks for offering to introduce me to this person. Here’s a blurb about us. Can you forward it to them? And I’d make it as easy as possible for them to go and make that introduction.
Paris Vega (07:08.262)
I’d say that was the majority of it though, is then, you know, if I had a conversation with somebody and they were into it and they understood what we were doing, I’d say, well, great, not only can we talk with you, but is there anybody you know that we should be talking with? And I try constantly getting, you know, referrals and conversations. I probably spoke with at least a hundred customers before we ever even started building a product. And you know, I had a deck that had mockups of the product so they could see what we were building and see what we were doing. But it wasn’t the final product for sure.
Paris Vega (07:12.923)
Paris Vega (07:21.79)
Okay, asking for referrals.
Paris Vega (07:33.095)
Paris Vega (07:40.93)
Okay, so how many potential customers did you talk to before you got a first sale? I guess you were talking to a lot because you didn’t have anything for them to pay for yet.
Yeah, a lot. Like I said, at the beginning, we wanted to make sure we understood which of the customers we wanted to go after. You know, I think the trick with, you know, these sort of these, these sort of sales early is, well, it feels like should go after everybody, you’re better off going after a very narrow segment.
Because what happens is if you go after everybody, they all have slightly different desires. Oh, this person wants one product. This person wants a different feature. This person wants more support. This person wants an API. Now all of a sudden you have to build 18 different things and you’re never gonna be good for anybody. But if you can find out of the universe of people, the segment where it goes, oh wow, actually they kind of all want the same thing. And it’s something that’s relatively easier for us to build and we know what it is and we can do it really quickly and really well, that’s where you wanna start. So at the beginning,
them all, trying to understand first, yeah, who was pulling across the table for selling, but then within that crew, where was the center of the problem where we could build one product that would serve them very well. And we focused a lot of the beginning on how do we help them drive incremental revenue.
And we in our product didn’t have a lot of traditional features that X-Team’s expected. We didn’t have voicemail, for instance. Like literally, if a customer called in and didn’t have voicemail or phone system, we would do other things to route it to an SMS conversation, whatever, but we didn’t have voicemail because it wasn’t driving revenue. And so we focused on other features like automated SMS that would drive revenue, and we knew that our customer segment would be okay with that trade-off.
So very early, of those 100, we signed up, I think in the first month that we went live officially, we signed up two or three of the customers and they’re still with us today.
Paris Vega (09:30.278)
Wow. So you used that initial period of talking to customers as part of deciding on what to build in the first place, kind of helping define your product market fit. And so it’s kind of serving that dual purpose.
Yeah, well, I guess being a founder is so hard because you both need the conviction of where you’re going to go eventually, and you need the flexibility to listen to when people are telling you you’re wrong, basically, and you need to know where to bend and where not to bend. So, you know, we had this conviction of what we wanted to build, and we weren’t sure which was the first set of features that were going to serve customers well and drive value for them. So we really, you know, thought through that a lot.
Paris Vega (09:53.01)
Paris Vega (10:03.069)
because we knew we didn’t have infinite resources at the beginning. We couldn’t compete with every feature, but we could pick a few that everybody really wanted and do those well.
Paris Vega (10:18.802)
So would you say part of that founder market fit kind of that you were talking about is the most important first step. Is it more about like deciding on just an industry that you’d like to serve and a general area that you’d like to serve? Because it seems like the product does kind of get defined as you go, even though you might have a general area that you think it’s going to, you know, like you’re saying it changes. You have to listen to the feedback.
Paris Vega (10:45.614)
So is it more important just to say, hey, I like this industry. I like this area of problems.
Yeah, I don’t want to like preclude people from the right solution. So I don’t want to say it should be industry per se, but I definitely would think about how do you break apart your customers into logical groups? So let’s say you’re building. I don’t know what’s the, you know, the new, you know, a new example these days. Um, you’re going to build an AI, a generative AI company, you know, for image or imagery, there’s a lot of different use cases in there and certainly it’s not.
Paris Vega (11:12.091)
the worst thing to do is do it for everyone. I’m not saying that’s the worst thing in the world, but from a go-to-market perspective, that’s not very helpful. You’d be better off saying, well, what the use case I really care about is when people are making decks and they need to put images in those decks, or when people are making websites even. Let’s start with the new one. People are making websites.
And those two examples, making decks, making websites. Well, one end user is a business end user. A different end user is a designer end user. One is working in PowerPoint and Google Slides, and others working in Figma and Adobe. One cares about how fast it makes it, and maybe doesn’t care about the quality of the image, and the designer cares a lot about the quality of it. So choosing, even with those two things that sound so close, the features that you would build would be quite different.
because of the difference in the need. So in that case, it’s not industry, it’s, you know, I don’t know, job type. So for your specific company, understand your customers, understand how they should be segmented and what features are important for each before you get too far. And I keep saying features because we’re a technology business, but you can be a service business, the same concept applies, right? What is the set of services that that customer group needs?
Paris Vega (12:03.461)
Paris Vega (12:07.876)
and how would you serve them? How easy is it for you to do it? And could you repeatably do that motion again and again for many customers, or is this a one-off thing? The worst thing you can do early days in a company is get dragged way into left field by one customer only to realize that, and you think they’re big and they’re giving you revenue and whatever, only to realize there’s nobody else that wants that. And now you’re way off in left field instead of like straight down the middle where there’s maybe a lot of customers that want the thing you have.
Paris Vega (12:52.126)
Okay. So that’s an interesting balance to what you were saying at first, because on the one hand, you do want to listen to customer feedback and really serve those first customers well with that hyper-focus like you were talking about. You were the support team, you were everything, and you were giving them, you know, white glove service. And I know on projects I’ve been on before, like there is that tendency to, hey, we’ll just build everything that, you know, that first big customer needs. And that’ll be our, you know, our first round of features. But like you’re saying, yeah.
It can work as long as everybody, as you have 20 other customers or however many other customers that want the same thing. So, you know, it’s one of the things that, you know, I warn with startup founders is even if you want to be enterprise, it’s not bad to start in mid-market where there’s sort of a faster velocity sale, lower expectations on features where they’re not going to expect to control your roadmap. Cause by the time you, if you go into enterprise, they’re going to expect that you do the thing that they want you to do. You build whatever features they want.
Paris Vega (13:24.082)
And that could take you far away from what everybody else needs. So when you get bigger, that’s OK. You can have some team members that are just focused on that big customer. But when you’re tiny, if all of your team members are focused on that, it may take you off of what you want to be doing.
Paris Vega (14:05.998)
Any of the regular first customer podcast listeners will start to recognize there’s a pattern emerging and it’s being echoed by you right now. Something that comes up a lot is the value of talking to lots of people in your target audience as early as possible, like you’re saying, even before you’ve built anything, figure out that target audience that you’re aiming for and talk to them about the problem you’re trying to solve, or if you’re trying to figure out what startup to even
Paris Vega (14:35.614)
go after, talk to them about their problems and see if there’s any of their problems that you could potentially solve with your skills or with your ideas or whatever. And there’s a potential to build a company around that. And it’s so interesting to see how closely like the best startups seem to have that same vibe that you’re talking about. Like talking early, not going the whole stealth route where you never talk to anybody about what you’re building and you just find out after the fact whether or not anybody needed it.
Yeah, there’s a very common paradigm in startups where people like have an idea and they go hire a tech team and build something for a year and then go show it to customers. Well, guess what? The second you show it to customers, you go, shoot, built it wrong and have to build it again. So save yourself a year.
Don’t build a product, like build a design and a deck and show them the design and the deck. They’re gonna have exactly the same reaction of the design and the deck that they are to a fully built product. Doesn’t matter to them, they’re gonna give you the feedback and you’ll get it faster. So I think the best companies fail faster.
Paris Vega (15:38.206)
It’s a weird way of thinking about it. But the best companies fail fast and they fail a lot. And then what they do is they recognize its failure, they identify a way to make it better and they move forward. The ones that succeed are the ones that are, the speed of iteration on failure is really, really quick. And so they find ways to accelerate getting that feedback, even if it’s negative feedback.
The companies that get stuck are the ones that spend a long, long time doing work without feedback, a long, long time before failing, because now that’s wasting time.
Paris Vega (16:07.438)
Yeah. Yep. And so the cheapest way to fail fast is a conversation where you’re just vetting the ideas that you’re having before you’ve even mocked anything up. And so that goes back to what you were saying, how you were just talking to hundreds of customers before you’d even gotten anything. And I know, like, I think it was episode four or something like that. I talked to this startup founder and they were just going to events in their target niche.
Paris Vega (16:37.19)
and talking to people about their problems. And they ended up getting a customer and it turned into this big billion dollar company. And it was just out of talking to people about their ideas, about the problems they were thinking about solving. And just from that open discussion, they were able to validate the idea and get a customer. So that’s really cool to see how much your path aligns with these principles that are starting to merge.
Paris Vega (17:04.014)
Okay, so the DM and making it really easy to referral on LinkedIn, kind of crafting that message, reducing friction as much as possible. We’ve kind of skipped over what Regal IO actually does. We’ve talked about the results, but give just, you know, I know we’ve got about 10 minutes or so left here because you got to go, but just give us a little idea of that core service, maybe that how it started that.
Paris Vega (17:33.03)
core set of features you chose to start with based on the feedback and then what it’s evolved into.
Sure. So my co-founder, Rebecca and I come from B2C industry. So bringing different consumer industries online. And the last one we were at was in the home improvement space. And actually a lot of the things that we’ve built today are learnings based on our experience in home improvements industry. What we found is consumers were first online used to shopping.
You show a price, you have a review, you make it easy to buy, God forbid, never talk to the customer, right? That was always the sort of like way of operating in retail.
What happened is everybody who shops online expects to do everything online today. Even the most complicated things like getting a mortgage, let’s say. And so, uh, in these industries, so the one we were in was in home improvements. You know, what did we do? We built a beautiful website with all these different features and you could like order a home complete renovation on the internet. Well, guess what? People came because they liked exploring online. People didn’t convert.
And so what we did is we found actually, if we had a conversation with that customer, the conversion went back up to the traditional offline rates. So when we did digital only, sure you had the advantage distribution, but you had very bad conversion rates. When we did digital and the sort of human sales motion together is where we got this magic piece where we have the distribution of the internet and the conversion of.
traditional sort of engagement. And we could actually use more and more of the customer’s information that they put in about their home and what’s going on to give them an even better experience online than we ever could offline. So.
we ended up building a team of thousands of people at this home services company that were engaging with customers to help them get what they wanted. And it was a huge part of the success. The challenge was that the software for phone and SMS has largely been built for the customer support case where the paradigm is, deflect the customer, don’t talk to them. And if you’re gonna call them, it’s kind of manual. You dial them or the other mode is what’s called
predictive dialer where you just put contacts in a list and it calls them as fast as possible. We’ve all experienced this. We’re also gonna get 18 calls from somebody within two seconds. And the manual way is no good because agents can’t figure out which of the millions of customers they should be calling and what they should be saying. That’s an unrealistic expectation. The dialers just spamming through people was.
Paris Vega (20:00.327)
bad because it treated every customer the same and alienated people. And so we ended up building all kinds of custom software around this. And so Regal was built to take that to the next level, to make it easy for mid-size and enterprise businesses to run these very complicated orchestration of calls and text, personalizing what was said, to whom, at what moment, for.
You know, all these sort of inbound needs, right? So we’re not cold calling. These are brands like AAA or SoFi or Roe and healthcare, right? That have customers coming in, who want the product, but are not able to do it just with self-serve online. And so these brands reach out using Regal at the right moment in the right channel with a branded call. And, you know, they have the right script to help convert that customer. And, you know, ultimately that’s our value proposition, right? Is how do we help them build the,
sales flow using Regal. And it’s not about a one-time thing, right? It’s constant iteration. So when we did this at our old company, of course we built some solution with some set of calls and texts, but then it was static, very hard to change. And it took us a long time to get there. So now we can go to companies and from day one, give them a platform that allows them to be the most sophisticated sales team and constantly be iterating to find exactly what orchestration, sort of what campaigns are right for them.
Paris Vega (21:09.918)
Paris Vega (21:38.55)
Okay. So you’re not doing like automated cold calls, that kind of thing. It’s specifically focused on the sales flow after that inbound lead comes in.
Yeah, inboundly comes in our software is helping their teams identify who to call when with what message it’s their teams using it. And we’ve built out all the telephony, all the SMS, all the unified customer profile, all of the analytics to empower their success.
Paris Vega (22:06.162)
So brands who have lots of incoming leads that they can’t feasibly fully service and give highly targeted messages, that’s where you come in and solve that problem. Right. Okay.
Yeah, yeah, look, if you have 10 customers a month, this doesn’t matter. You do it by yourself. You know, our brands have millions of new customers a month. And so they need technology to be able to, um, you know, treat one of those customers. So, you know, there’s millions of them, but they want to treat one, like they’re one in a million and that’s really, you know, where technology excels.
Paris Vega (22:23.186)
Paris Vega (22:34.214)
Paris Vega (22:37.818)
Wow. So just to recap the principles that I’ve gleaned so far, make sure you’ve got founder market fit for the startup you’re working on and the business you’re working in. Make it easy for people to refer your business. LinkedIn DMS still work cold DMS. Yeah.
Yeah, just be honest. The mistake I see people make is they blab about all kinds of stuff. Just be honest, say, Hey, you know, I can, I used to say, I come from this company. I see, you know, I think based on what I see, like, there’s going to be a real opportunity here on the founder of the company. Can I, can I talk to you a little bit and tell you how excited I am about what this is going to be for you guys? People listen at a very, very high rate. But if you send them a spammy email, blah, blah, blah, you know, same to everyone.
Paris Vega (23:31.014)
I get so many of those. Yeah, I think being the founder reaching out directly, that definitely has more weight than somebody with an email with five random number digits after it because you can tell they’re spamming everybody. Well, man, this has been really informative and it’s super jam packed, even though it’s one of the shorter episodes we’ve done. You packed a ton of value in here. You’ve got a super clear vision of like…
Paris Vega (23:57.73)
how the life cycle of a startup should go. Could you speak to that real quick? Is it like the, what you’ve trained in, like just, have you been through multiple startups or just personal study or like VC coaching or I’m just curious about that aspect of your mindset.
Yeah, so both my co-founder and I have similar backgrounds. We went to liberal arts undergrad, so we believe in studying things that are interesting to you, that we were not professionals in any way undergrad. She studied English, I studied philosophy and psychology. We then both transitioned into technology companies. We’ve worked for a lot of startups over time, as product managers first, and then eventually as executives. So we got to see what we liked and what we didn’t.
Paris Vega (24:37.988)
Paris Vega (24:40.787)
early in our career, both of us worked for banks and consulting companies. So we saw what, uh, you know, best in class big companies look like. So we had seen that as well. So we could easily compare what does that look like versus different startups? You know, I worked at a startup with five founders for instance, and learned that’s like herding cats. Like never have five founders at a startup. Like, you know, remats, like, you know, one is probably not good either, but you know, two or three is ideal. Um, so you learn these things over time.
Paris Vega (25:06.183)
I think I’ve been lucky to have people sort of mentor me through this stuff. And, you know, the, the role that they play is to show me how they think about it. The role I play is to learn from them. So I think, you know, a lot of folks in this generation want the mentorship, which is great, that’s half of it, but the other half of the battle is you have to then learn from the person. So I remember like working for bosses where they’d go in and do things a certain way and like, I listened to it and watch them and like the next day I could like
Paris Vega (25:29.032)
the way that they had done it. Now today I do it differently, but that mimicry enabled me very quickly to understand how they did things. And I think through like, why did they make decisions in that way? And I might not agree, but that was beside the point. My job as a junior person was not to disagree with them always, but was to mimic them and understand what they were thinking so that they knew they could put me into the situation and I could do it the same way they were doing it. Because then they could go to the next problem. And sure, over time did I improve things a little bit and disagree with them a little bit for sure.
But I think early in people’s careers, they think too much about the mentorship and not enough about the learning.
Paris Vega (26:12.307)
And then, you know, we, you know, my co-founder and I sure now have a lot of sort of advisors and investors who help us see around the corner. So, uh, we don’t know the, the sort of, you know, everything about, let’s say. Pick a topic, everything about anything, but pick any one topic, but we might go and send an email to a few advisors and say, how have you seen this happen? And we’re not asking them to tell us what to do. We’re asking them to give us their experience. And we use that to then come up with a way of thinking about it and make a decision of where we’re going to start.
And, you know, our sort of approach said it’s a journey. So just because we start somewhere doesn’t mean that that’s where we’re going to end. And so we iterate until we find something that works. I think the hardest part, you know, as you scale up is once you get good at that is actually then taking what works, institutionalizing it and making sure that it doesn’t break as you get to every scale. You know, we’ve been tripling you every year for a couple of years now, and it’s hard to not break things as you scale.
Paris Vega (27:06.629)
Paris Vega (27:09.757)
Paris Vega (27:12.274)
for sure. Last question, do you have any book recommendations related to what we talked about today?
Yeah, it’s actually funny. I have little kids and I was reading a book earlier this year that I’m thinking about buying for like everybody in the business world. It’s called, it’s for little kids, it’s called How to Listen So Kids Will Talk and How to Talk So Kids Will Listen. And I actually think it has a lot of very valuable insights about how to like interpersonal dynamics in general.
Paris Vega (27:34.81)
Paris Vega (27:41.617)
This is not meant to be a metaphor that like you’re working with children or anything. It’s nothing like that. It’s just it’s fascinating how they’ve done a very good job of shining a light on these very complicated interpersonal dynamics when there’s tension and you know
I think it’s a very valuable read actually, if you have little kids or if you’re running a company. Other than that, the one I always suggest if you’re going to raise money from venture capitalists is Venture Deals. It’s a book that’s about all the different terms of venture deals. I think the subtitle is like, know the terms better than your lawyer, something like that. If you’re going to go raise venture, you’re competing against somebody who’s a professional when you’re an amateur. The VCs are constantly raising money. They’re professionals.
Paris Vega (28:25.168)
I do it once every year and a half at most. So make sure you get as much information as you can going into it.
Paris Vega (28:34.25)
Awesome. Thank you so much, Alex, for your time and listeners. We’ll see you next episode.