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Episode 2: What Kind of Company Do You Want To Be? Ft. Clay Sifford

by | Aug 1, 2022

Clay Sifford, CEO and Founder, shares the story behind how LASSO came to be on this week's episode hosted by Angela Alea. Listen in as they unpack why the event industry so misunderstood, why there isn't enough innovation in our industry and the most challenging part about building a simple product for a complicated industry.
episode-2-what-kind-of-company-do-you-want-to-be-ft-clay-sifford

Clay Sifford: There was somebody that week that was sitting in Atlanta that could have done that job just like he could have. Right. And the problem was. We didn’t know…

Angela Alea: Welcome to corralling the chaos podcast, where we talk publicly about the things you’re worried about privately. My name is Angela Alea, and I’m your host.

This is the event industry podcast for companies and crew, where we’re going to dive deep into things like what does our industry need? That it just doesn’t have? What are the things you want to know? But you’re just too afraid to ask. And what are the biggest opportunities ahead for our industry? We’re going to go deep and nothing is off limits.

Welcome back to another episode of Corralling the Chaos. We have a special guest with us as we talk about all the chaos that exists in the industry. I wanna welcome Clay Sifford who has spent 25 years in the industry. Not only observing a lot of the chaos that happens, but has really lived it personally as well.

So welcome Clay Sifford founder and CEO of LASSO.

Clay Sifford: Thanks for having me glad to be here.

Angela Alea: We really just wanted to pick your brain today about some of the observations that you’ve seen in your time in the industry, as well as what you kind of hope for us moving forward. So I would love to start with, how did you get involved in events?

Clay Sifford: I did a takeover of a company close to 25 years ago and I didn’t really think much of it. At the time the company did just local AV for hotels and some light corporate events. There were no conferences or anything like that. It was just more like meetings.

And so the more I got to know about the business and the more I spent time with it, the more I liked the people I liked doing what they did. And I thought there was a good opportunity and that’s kind of how I got going.

Angela Alea: As you think about when you started LASSO, most companies, when they start, they set out to do one thing and then they learn something through the process and they end up on a different path.

Did you have that same experience or is this the exact path you thought you would be on at this point?

Clay Sifford: It’s the right path, but there’s more than one way to, to top of the mountain. [00:02:20]Right? I think one of the critical things that we did not know, and this is just me personally, just with my blinders on, I thought that we were solving a scheduling problem.

We wanted to know who was available, when they were available, what could they do, and how can I get them on an event? Well, the problem that I didn’t realize when we first started was that it’s really an HR issue [00:02:49]. Because at the end of the day, we’re dealing with people and you know, one of the biggest challenges that we had is really understanding what all of our costs were.

Part of the company that I ran at the time and founded had independent third party audits, at the end of every year. We had people working in over 43 states that were not considered employees at the time.

The auditor mentioned that we had a lot of people working and asked if we were controlling the work. And I’m like, well, what do you mean by that? And they went through this 20 question list [00:03:35] about if they should be employees or should they be independent contractors.

At the time we were independent contracting everyone and I thought it was too difficult to keep up with and I didn’t understand the risk associated with it. So they asked me the following:

  • Do you give them the tools?
  • Do you set their schedule?
  • Do track when they work?
  • Do you give them scripts?
  • Do you reimburse them for receipts or expenses?

Angela Alea: Congratulations! You have employees!

Clay Sifford: Right! So guess what? We found out that there’s something called the source control, and that is really important. You know, I guess maybe I gotta add these people.  Well, because you’re gonna say that you’re gonna add them doesn’t mean anything, but what it does do is it fundamentally changes your business model.

Because you’ve got all these unintended costs now that are part of an employment relationship that you’ve gotta deal with. It’s not just like, Hey, you’re gonna go work for 10 hours and a hundred dollars an hour. And you’ll send me an invoice whenever you get it and I’ll pay it in 30 days.  That’s different. The problem is, [00:05:00]that you have all these different states that we’re all working in and doing things in, but have different rules and different thresholds.

And we had no idea. Ultimately, what we’re trying to find is the right person at the right place at the right time, at the right skill, at the right price. Well, if you don’t take all that other stuff into consideration in each of these different states, you’ll never have that.

And that data is not static, It’s dynamic and it’s always changing, which is another thing I had no clue about. How do I solve that? Fortunately for me, I met you and you did have that experience. And so I really think that we set out for solving the issue and I still think we solved the issue.

I think it’s just all the ingredients that were used to come up with that solution were things that we just hadn’t or me personally just had never really thought about. You know, when you look back and say is with our, you know, [00:06:00] third party audit that we had, it was really simple decision. They said, okay, well, look, you know, you’re gonna have, you need to run the risk of about paying eight, about 8 million in penalty and interest in the event that you get audited and lose.

And so I didn’t sleep, you know, there’s, you know, I didn’t sleep that night and I thought, well, gosh, you know, that’s awful

Angela Alea: Eight million’s a big price tag. I don’t care who you are.

Clay Sifford: Well, right. Well, I mean 8 million, but think about it this way. There was no, there’s no value in that. I got nothing. You know, you as an owner, Gets nothing out of that.

All you’re doing is taking on massive amounts of liability for nothing. Yep. Right. And so to me, fortunately, you know, they said, well, you know, you can pay a fraction of the amount and just do a safe Harbor. And I mean, I couldn’t do that fast enough because I wanted to make sure that from a liability standpoint, we were.

So I think that kind of in thinking through like the unintended consequences and it was [00:07:00] really difficult because getting, you know, we thought we were gonna lose the majority of our employees because that was not how they worked. They were not used to that. And back then, well, not back then.

You’re right. Yeah. Nobody did it. Right. And so we were trying to kind of change something that no one had ever changed. We felt like we didn’t even have the tools. But at least we had some things and we had the spine to make sure that like this, we are gonna do this one way or the other come hell, our high water.

And we did it. And then, which was, you know, good. But then, you know, I think that’s kind of where the tools that lasso provided really came in because it gave us the ability to do it efficiently in a way that we would’ve never been able to do. And that was really the catalyst for change. And if you look today across the entire industry, it’s completely changed.

Now, there are more people that are employing people as opposed to 10 99, em, and nobody wants that risk. Yeah. And [00:08:00] these states become a lot more aggressive. I think they’re gonna come even more aggressive because they’re gonna need more revenue. So they’re just gonna come after the ones that don’t wow.

And the other place that you’ve seen it, which is also just for what it’s worth, you know, with the PPP, the right, the what is it called? The payroll protection plan or whatever that the Trump administration rolled out mm-hmm so when COVID hit, I mean, you know, if you had 10 90 nines in your payroll, well, you, you couldn’t count that you couldn’t get money for that.

You couldn’t get. So all the companies that were doing it the right way were rewarded for doing it the right way. Yeah. And all the companies that were independent contracting everybody paid the price for doing it didn’t mean that they were better. You do better.

Angela Alea: Right. Hard lesson learned and a really expensive lesson to correct.

Clay Sifford:  Well, and some, and some didn’t have the chance to even correct it.

Angela Alea: That’s [00:09:00] right. They didn’t, same with the freelancers out there. You know, there’s, there’s misconceptions around, you know, the advantages of being a 1099 versus a W2. We’re also gonna talk about more about that in future episodes.

There are some serious misconceptions that actually cost people more to be a 1099 than it does at W2. And it costs companies more to W2 than it does to 1099. We’ll kind of debunk some of those things because I think that’s another area to get rid of some of the noise and the chaos and kind of doing things in multitude of ways.

I’m agnostic. I know you’re agnostic. We could, you know, whatever our customers do. We doesn’t matter to us, no skin off our back, our, our platform accommodates either. But I think it’s, again, an opportunity for the industry. Now that they know better to actually do better. I know when we first started the company, one of the biggest surprises for me, one of the unintended consequences, I guess, [00:10:00] you know, I knew your experience.

And when you said. Hey, I’ve got this idea, our industry, like they have no tools. Its underserved, everything’s chaotic. That was the exact word you used. I’ll never forget that. And I remember observing that you being my client, right. And just kind of advising you and your team on how to get through that process.

But if I’m being honest in the back of my mind, I thought there’s no way the whole industry operates this way off Excel spreadsheets. And this chaotic, it’s such a massive industry. Surely the whole industry doesn’t operate that way. And when you said, Hey, I want you to come join me to solve this. I did my own research.

And sure enough, as all of us know, the whole industry has operated that way, but was also surprising to me is before we wrote even our first line of code, we did, we went out and we did 350 interview. With different people in the industry owners of these companies, operators of the [00:11:00] company, people who ran finance, the labor coordinators, the techs in the industry, we talked to so many different people.

And the number one thing I heard, well, there were a couple themes, but it was, we don’t know why we’re losing money on some of our events. labor’s, you know, biggest cost to good sold and. A lot of it had to do with that. They just didn’t have the information they needed. So it wasn’t to your point, just a scheduling problem to solve.

It’s a people problem, right? Because every, as we always say, every event experience is only as good as the people who make it happen. So we’re trying to solve a people problem. Not just with the process and tools they’re given. The, the fulfillment they get from being in this industry and the work life balance and all those other types of things that are important for all the good people in the industry.

And so it’s gonna be exciting to see how [00:12:00] our industry evolves as we know better to do better and continue to innovate to make it better for everyone in the industry.

Clay Sifford: Well, the only thing I would comment on that is that even before it became a people problem, it was really a knowledge problem.

Mm. Right. And I think our industry has a huge issue here because there are not a lot of places where people that are running these businesses can go to learn. Yep. Everyone is well intended. I mean, this is a great thing about our industry. It consists of some phenomenal people. Mm-hmm I mean, amazing people top to bottom one into the other.

Fantastic. Everyone wants to do. I really believe people really well, intention. The problem is, is that when you don’t have the right data and the right knowledge set to be able, you know, like, Hey, best practices, what is that? Or like in this case? Well, gosh, you know that could’ve taken my company under and you know, it would’ve just [00:13:00] completely killed it.

I didn’t know that well, I do now. Right. And so part of what I think the other goal that we hope to solve is to really, to be the place of truth, to help people learn and grow, because we all have something that we can learn every day. You just have to be receptive to hearing it. And you need to be in a place where you, where you can go and do that.

And I think that that’s kind of part of what I hope that we can do. I don’t know

Angela Alea: about you, but when people ask me, what do I do, or what does lasso do? Information about the event industry. It’s really kind of hard to be concise with what exactly we do and what we’re about, especially to, you know, the people who consume these events.

They don’t understand what happens behind the curtain and what happens backstage and all that has to go into producing these things. Because quite honestly, there’s not a lot of great data out there about our industry. So why do you think our industry is so misunderstood?

Clay Sifford: I think part of it is no one [00:14:00] knows what it is.

I think that, I mean, it is entertainment. There’s definitely some hospitality side to it.  There’s sporting events. It’s an amalgamation of a lot of different things. I think that people don’t see what’s behind the curtain, they just show up for whatever it is and they consume whatever it is that that is kind of being given to them.

But there’s really not a ton of thought into what goes into it. I think that’s a challenge and an opportunity at the same time, but I think when people don’t see something. And when they’re just the recipient of it, I think they just view it differently. They don’t give it any meaningful thought.

Angela Alea: So how do we educate people on what we do, how we do it, how do we familiarize them with, with what all’s been going on in, in the event space?

Clay Sifford: I think a lot of it has to do at the end of the day with investment, right? Because if you think of the companies. Coming outta COVID. It doesn’t matter if you’re in [00:15:00] hospitality. It doesn’t matter if your live event, production, sports, everything, festivals, concerts, everything took a hit. Right. And so investment drives every industry.

Huge challenge to everyone at the same time and how you kind of get through that. And I think that everyone knew that this was happening because no one could go to concerts. No one could go to festivals. There were no more user group meetings. And so the good news is in a weird, really kind of backhanded way people saw what was going on maybe for the first time.

Oh, there aren’t any, I can’t go to this user group meeting anymore. I can’t pitch, you know, what I’m selling at, you know, InfoComm as an example and all of a sudden like that that’s different. And so I think that they did kind of cast a light on the industry in a way that probably has never really happened before.

So now they’re in tune with it. And I think part of it is like, they [00:16:00] need to understand, and maybe we need to do a better job of explaining what those opportunities are for the industry in general.

Angela Alea: Yeah. You bring up a great point. Investment. Right. We always talk, you know, we feel like our industry is underserved.

It’s hard to have outsiders come in and provide good solutions for people within the industry. So as you think about, there’s not a lot of new companies emerging in our industry, what do you, why do you think that is? What are the barriers for people continuing to invest in our industry and doing good things for it to further it.

Clay Sifford: I think that there’s two different types of barriers, right? So if you think of it, the barriers probably never been lower in some ways, because you’ve got tools you. That are out there. If somebody wants to start a business, you know, they can cross run equipment from somewhere. You can get people from somewhere collaboration, opportunities that are out there that weren’t in the past.

So I think if you’re an [00:17:00] individual trying to start something or a couple people trying to start something small, I think it’s really easy or easier than it’s ever been. I think you’re trying to start something big. I think it’s difficult, right? This is not an industry unless you’re building software, you know, you’re not gonna see VC’s here.

You might see some private equity on much bigger opportunities. Those would be your probably top 10 largest, you know, Companies in, in the space, you might have some of that there, but I think what’s happened is even with all the money that’s sitting on the sidelines or that’s available, that has to be put to work at a certain time, it’s still difficult because I think that those folks are leery, you know, and saying, Hey, well, you know, what’s gonna happen or are, are things gonna shut down again?

Has the industry learned, you know, how they learned not to do that. Right. I think that that. Kind of cast a little bit of a shadow. [00:18:00] And I think as time goes on and, you know, post COVID people just, you know, are doing what they’re sorting to do now, get on with it. Then I think, I think eventually it will drive that investment, but I think that’s just gonna take a minute for that to come back.

Angela Alea: So Clay, when we talk about, you know, there’s not a lot of innovation in our industry, is it because they don’t know how, because they’re not from it. You kind of have to be from the industry to know how to solve the problems within the industry. So do you think it’s because they’re not from the industry and they don’t understand it or do you think it’s because they understand it.

It’s just complicated. I mean, that’s the whole point of this podcast is to talk about corralling the chaos and the complexities within this industry. So, which do you think it. It’s just too complicated or I just, and it’s too hard or I just understand it.

Clay Sifford: It’s difficult by nature, you know, because you’re [00:19:00] working.

I mean, you, you have a logistical challenge, right? You work in all these different states, you’ve got all these different people that you’ve gotta get in one place at any given time. We don’t have a ton of softwares that are out there that kind of help us do that. So that’s a constraint. At the same time, the people that are working in the industry, Have just have a five, you know, alarm fire going on in their own space.

And they’ve got more important things to do in, in, in terms. Getting stuff out the door, taking care of their customers, taking care of their people. And I think that that has distracted us in a way. I think it’s gonna take a minute to kind of get through that too, but I think that eventually the biggest hindrance is if you look at the way that these companies are run, generally they are, are started by people that.

Worked in a technical position at somewhere along the way, have a following of people. All of a [00:20:00] sudden they leave where they are and they go start a new company and then they take a lot of what they learned, where they were, and then they kind of put their own spin on it. And then they all of a sudden have a company and it grows.

And then, you know, there you are. And that happens often throughout the industry. What doesn’t happen is that you don’t have a lot of outside influence coming into the industry at the senior. Management levels who are seeing some best practices in other areas and other industries that are incredibly valuable to any industry in general.

I think what’s happened is, is that we’re so incestuous, if you will, that most people don’t come from the outside. And so we. Continue to do the things that we’ve always done, the way that we’ve done it. And I’m not sure that we’ve had the time, even though over the past couple years to be more introspective about how we’re doing it. And I think that’s a huge challenge. It’s also an opportunity.

Angela Alea: What are some lessons we can learn from [00:21:00] other complicated industries? I mean, are there anything that, is there anything that you see in other industries or other verticals that you think would be applicable that our industry could begin.

Clay Sifford: We’re a pretty mature industry in general. There are a lot of mature industries out there. I think that using data, number one, very few companies use it. And the reason why that is, I think in general is because it’s hard to get and we’ve lacked the systems to be able to get the true data out of it.

So once you get the data, it’s tough to do anything with it because it’s in the. And so everyone’s more reactionary as opposed to proactive. And so what that really boils down to, in, in, you know, just my own personal view is that it’s a software companies that are driving this because if the software companies invest in the data to give people the data before they make the decision, but, you know, given the insights to understand what’s going on [00:22:00] ahead of time, then they actually can do something with.

But because there’s been a lack of software because there’s been a lack of innovation, there there’s been a lack of good actionable data, which ultimately gets us to a point where nobody wins, right? You just kind of end up getting there by happenstance, you know, not necessarily that there was really a good strategy behind it.

Angela Alea: So obviously before. Starting LASSO you found and ran a mid-size production company. So when you think about those days of operating there and thinking about data, what was some of the data that you wish you had that would’ve made a difference that you think our industry, you know, still struggles to get.

Clay Sifford: Yeah, I mean, the straw that broke the camels back, which is the whole reason why we started lasso was because there was an event in Atlanta and we had a guy from Spokane Washington that was going down there to B a two for a six day event. And I was just flying into town. I was [00:23:00] going over to London.

I stopped over in Atlanta during that day. And I saw a guy that you know, was from Washington. And I knew that that customer wasn’t paying for travel. Or they might have paid a little bit, but they weren’t paying enough of what it, you know, cost to get from Spokane to Atlanta. You have, you know, front end back end of paying their labor.

This guy was expensive anyway. And then they had to put him up for, you know, probably five or six nights per die, all that stuff. Well there’s, there was somebody that week that was sitting in Atlanta that could have done that job just like he could have. Right. And. The problem was we didn’t know. And, you know, or at least running a company, people that are in the C-suite are completely disconnected from the people that are actually making those decisions on the ground.

And the people on the ground were trying to do their job. They’re trying to fill the best people, right. As fast as they can, they can do the job. [00:24:00] So sometimes cost was taken out of that. But if you think about that, you know, at a very minimum level, you know, say if that’s $3,000 Delta compared to getting that guy there for the week versus finding somebody else that could have done it.

Well, you know, if you had, I don’t know, 30 spots, times, 3000 a piece its $90,000. I mean, it, it just is a huge multiplier. . And so to me, it was like, I thought it was crazy that we couldn’t connect dots between somebody who was really good at that position that was sitting in that market that was available without all of that extra cost.

We didn’t know where they were, but they’re there. And I think that was part of the missions. Like, well, we gotta stop this because if you do that, you know, for every. For the hundreds of events, these companies are doing the industry, that enterprise value that these companies are losing, you know, as a [00:25:00] result.

I mean, it’s just, it’s just lost value. The way I felt like is that that just kind of had to stop. You know, I went out and talked to, you know, people, my contemporaries that were running other companies with similar size. And what were you doing? What, you know, how did you guys do this? And, you know, they were doing it just like, I.

Which is also part of the problem. Right? that we needed to solve that. And so that was kind of when I left my old company and, uh, went out and raised private money and, and started Las. Yeah.

Angela Alea: I’m sure that that story resonates with everyone in the industry, right? Everyone’s been in that predicament where you just gotta go fast and not always smart or cost conscious because you gotta execute on a show and, you know, having the time and data do you do that sometimes is a luxury.

So I’m sure that story certainly resonated with a number of our listeners. What do you think’s been the hardest part of building a simple product. For a complicated industry.

Clay Sifford: I think there are a couple of challenges with that. [00:26:00] When you’re typically wanting to build software, you’re really trying to kind of cater to 80 to 90% of the use cases that are out there.

Then you’ve got those say 10%, the, you know, if it’s 90 on the, on the fringe, either way that you just really probably will never do and you shouldn’t do it. Right. And so if you think about that, um, When you’re in an industry where everyone does something a little differently, and there’s a bunch of, um, I would say inherent, um, institutional thinking or, uh, workflows that make no sense, but in many cases, it’s just what people have done because that’s what they were taught.

And they don’t really question that. It keeps people from adopting. New ways of doing things. And because there are not a whole lot of people from outside the industry coming in, kind of getting back to what we were talking about earlier. I think it creates a lot of problems because there, then what [00:27:00] happens is that there’s always an excuse not to do something well, I can’t adopt it because it can’t do this or I would do it, but it can’t do this.

And the reason why somebody buddy down in payroll needs a file to look a certain way. Well, as you know, I mean, so often we we’ve heard this. There’s no real good reason to it. You know, when you kind of peel back the onion, a lot of these time rules, I think is one of the biggest. Issues with the industry.

Like nobody knows where the rules came from. They’re incredibly complicated, but that drives a lot of how you script time systems and how you pay people. And none of it makes sense and you’re doing it differently for different positions in different markets, even different venues within the same market.

And I think it’s a huge problem. And, and I think that this is an opportunity that we have and you know, to kind of push forward. To kind of standardize and to simplify a lot of the complexity that’s out there, but [00:28:00] historically our industry’s just not helped ourselves to kind of do that. And then part of the problem is is that when you make it difficult to create software and software’s very expensive to build.

And so, you know, naturally, that’s why you don’t have a ton of softwares in and which ultimately hurts all the companies. And so we’re all hurting ourselves. I put myself in that bucket before I started LASSO, I was doing the exact same stuff and no, I don’t think anyone’s doing it.

There’s no malicious intent by it. There’s, you know, everyone’s trying to do the best they can, but I think in some ways everyone’s working incredibly hard. I’m not sure that we always work smart. And I think this is an opportunity to do.

Angela Alea: Yeah, I could not agree more that’s one of, kind of the bizarre things.

When I talk to techs, we’re gonna do a whole episode on complicated time rules and payrolls bill rules [00:29:00] because you are so right. It is all self inflicted. If you ask the tech, they don’t know how they get paid. They really don’t, which is a shame. If you’re gonna show up and do work for somebody and do great work, like the talented people in the industry.

They should understand how they’re getting paid and what’s even more confusing is you ask the companies. To explain how they’re paying and they don’t know, they have to pull out, you know, a 10 page document to figure it out. And then they’re spending all this time and money to try and process rules that way.

And it’s complete insanity. And to your point, it is all self inflicted. So we’re gonna dive into that on a different episode. Um, but one final question for you, obviously throughout your career. You’ve seen a lot. Um, you’ve created a lot, you’ve solved a lot. Um, but you’ve just experienced so much of the chaos that we’re talking about.

So as you look ahead, what do you hope for our industry?

Clay Sifford: My hope is is that this [00:30:00] terrible black smart event, right. Um, would actually, and I, I actually think it’s happening. I think that the industry’s changing. for the first time in a long time. Mm-hmm because people can’t do what they used to do.

Right. I mean, there is something different about, you know, we were a mobile workforce, everybody, and I even would include the C-suite in all of that. We were a mobile workforce before, but now everyone is. And so I think that developing the tools that enables people to do the work where they are at that moment in time.

Is incredibly valuable. And I think that the ways that people used to do things, spreadsheets, you know, like God forbid something happened with Excel. You know, it would, it would’ve just completely sent the industry in a tailspin. Right. And, and I do think that that’s changing, but when we first started out [00:31:00] everyone wanted server on site.

Oh, I want my own data. I mean, there’s multi 10 software out there that, you know, like you don’t have to have your own server room and your own it, people to do that for you, you know, it’s put in the cloud and, but you know, like that was a big thing, right? Mm-hmm because you can’t get efficient until you can actually build software.

It’s multi-tenant and now I think some of these things are coming to kind of pass. And I think the, the, I really think COVID actually is speeding up the adoption and speeding up the change in the workflow because these companies don’t have people that are sitting in the back offices, like they used to because they just simply can’t afford it and it’s not valuable.

And I think, I think the light has come on. With a lot of companies, especially the ones that we’re dealing with. I mean, you think of forward thinking companies who are trying to create value for their customers, trying to, you know, and, and they don’t wanna waste that money because that’s that’s investment for them.

That you can pay your people [00:32:00] more, you know, or you can just lose it and squander it. And so the question is, well, what kind of company do you wanna be? You want, you wanna take care of your people. You wanna make good investments and deliver great value for your customers? Well, there’s a good way to do that.

Mm-hmm and then there’s the other. And I do think that my hope for the future is, is that at least for our industry, that people are learning, they’re adapting and adopting new technology. It’s gonna help them create more value at the end of the day. It’s about value creation and helping their customers and their people  deliver better events.

Angela Alea: Very well said. I appreciate you joining us and kind of sharing some of your observations and insight, not only into what you’ve seen in the past, but what you hope for the future. And I think you hit the nail on the head, right? COVID has taught us a lot. And so I think as an industry, I would just challenge us all.

As we learn. And as we know better, it’s time to do better, especially when you’re given the [00:33:00] relationships, the insights, the tools, the relationships, the friendships, all the things, you know, we, we just were given a Doover. And so our hope is that as we all learn more and know more, we can do better. So thank you all for joining us for corralling the chaos.

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