TSP025 | Nasir Ali – Transcription
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John Livesay:
Today’s guest on The Successful Pitch podcast is Nasir Ali who wears three different hats. One, he’s an angel investor in upstate New York at Seed Capital Fund. Two, he’s involved with StartFast Accelerator and finally he’s the co-founder and CEO of a non-profit in upstate New York where he allows all the people up there to re-connect and network. Remembering that Syracuse, New York is the home of the places like IBM and Kodak and they are now revitalizing that idea to become the next Silicon Valley. One of the things that Nasir said that is investors solve the unknown needs of founders.
In other words, founders who are new don’t even know what they don’t know and experienced investors like Nasir and his team help them solve those problems fast so they can stay focused to achieve their milestone. The other thing he said is, investors need to find founders who are coachable, but not impressionable. In other words, the founders need to be strong enough in their decisions to know what they believe in. Enjoy the episode.
Hi and welcome to The Successful Pitch podcast. Today’s guest is Nasir Ali who is the CEO and co-founder of a non-profit called Upstate Venture Connect. He also is involved with StartFast Venture Accelerator and as if that’s not enough, he’s also involved as an angel investor in New York with Seed Capital Fund. Nasir, welcome to the show.
Nasir Ali:
Thanks, John. Thanks for having me.
John:
I don’t even know where to begin, but I want to jump in if we can talking about how did you get so passionate about helping startups in upstate New York since that seems to be the core theme across all three of the things you’re doing.
Nasir:
Sure, so it started off with my own desire to be an entrepreneur and coming out of management consulting during the 90’s and trying to have a couple of my own startups in the Washington, DC area, unfortunately perfectly timed with the 1999-2000 crash, but I learned a lot of lessons and one of the lessons I absolutely learned was that I love startups and I love the people who think of starting a new company, because there’s something so amazingly optimistic about it and I ended up moving from Washington in 2004 to Syracuse, New York and Syracuse like much of the northern areas of the country has seen a tremendous amount of growth during much of the 20th century followed by, you know, a prolonged downturn, I would say, as many of the old industrial companies and, we were the home to IMB and GE and Kodak and Carrier and so on, so the question when I arrived here on everyone’s minds was, so where’s the next one? You know? How do we get back to the days when we were astride the world and the answer very clearly to the business community in Syracuse was that we have to grow new companies. So, it was a perfect opportunity for me to jump in and start something new.
John:
I love it. It’s such a fascinating history. I don’t think a lot of people realize IBM and Kodak come from such a specific place that there were really the, Syracuse was really the Silicon Valley of its day when you think about it in those terms and it’s so fascinating and wonderful that people like you are re-invigorating something and a place and people with such great roots to make that come back in almost in a way what Detroit’s done, right, in making that come back to life with new technology and all that good stuff.
So, how do you decide when you’re an angel investor? Let’s start there, because that’s really interesting I think to a lot of our listeners is the seed capital fund of CNY really has such a great website that goes into your investment process and it’s laid out so clearly that I think it’s worth taking a minute just to walk our listeners through that and, you know, first step obviously is asking people, you know, for an angel investment with a questionnaire that you really spell out exactly what you’re looking for and then the next step is this business plan review where the promising candidates are invited to present to the screening committee.
I’m really interested in talk about that with you, because the podcast is call The Successful Pitch and I’m guessing that’s where the pitch comes in after someone’s filled in the questionnaire that they meet with you guys and decide and pitch you in some way, so if you could speak to what makes a good pitch, that would be a great start.
Nasir:
Yes, let me talk a little bit about our process and why we instilled that, because the Seed Capital Fund and its investors had a dual objective, which was to both look for promising companies, but also to educate emerging entrepreneurs so that they know what to expect when they’re thinking of coming up with funding, so the reason for that website going into such detail is because we’re not just about saying yes we want to invest, no we don’t to invest. We also want everyone who is thinking about it to come away with a little more information and a little more insight around that.
That being said, you know, one of the advantages that we have as a group is that there are 42 investors and we’re all in at – in the same way to the same extent and there’s enormous diversity of experiences and knowledge and one thing that all of us, I think, have in common that being said is that all of us are looking to the person who is pitching to us, who is presenting the company as an investment opportunity to us, to ask the question, you know, yes, is this the person that we feel comfortable writing the check to.
So, everybody has unique technologies. Particularly for the Seed Capital Fund, we were looking at companies that were coming out of most of our region’s universities, so these were, you know, really brilliant insights and innovations and the question as to whether somebody makes it or not was really a function of is this person acting like a SEO that understands that it’s less about the product and more about the customer and the market.
John:
I love that. Let’s take a minute and really recap that for everybody, because it’s such an important distinction. Are you acting like someone who has a great product or when you’re pitching, are you acting like someone who is already a CEO and thinking about the customer and that is huge and the big thing that you said that really jumps out at me is across all 42 of the different investors that are part of this group.
I think of you guys almost like a mutual fund, right, I mean, if someone’s lucky enough to get money from your firm, they have so many great resources to tap into besides the money, but the whole concept comes down to everyone of all 42 of you want to “feel comfortable with the person” and that feeling is so difficult for someone who is technically oriented, because that’s very left-brain text speak where they are talking about how something works and to get them to realize that the number one criteria is not the technology, it’s do we feel comfortable with you. Do you have any insight into what someone, a founder, can do to make investors feel comfortable, besides acting like a CEO?
Nasir:
Certainty. I think that one of the mistakes that many early first-time founders make is that they try to put every single thing that they know into the pitch and they try to be as comprehensive as they can be and what I try to tell some of these entrepreneurs is, look, the opportunity to pitch to a group is essentially like sending your resume to somebody for looking for a job. The goal of the resume is not to get you the job.
The goal of the resume is to get someone to call you in for an interview and the equivalent for any investor is the pitch is meant to get you to the point where the investors say, you know, that looks really interesting and I’m intrigued enough and I would like to learn more, so why don’t we begin due diligence?
John:
Exactly. Get to the next round, basically. Yes.
Nasir:
Exactly. So, that is somehow something that I think, you know, many people who are trying this for the first time, they feel like, okay, I’m up there, I’m up there for 10 minutes and this is my chance to impress and so the way that I’m going to impress them is that I’m going to either tell them a lot about the technology or tons about the market, but somehow in there what we’re looking for is, does this person have the ability to succinctly present their business in a manner that would convince a customer and also an investor, right?
John:
Great, because if you can succinctly in few words, but very easily understood, present what problem you’re solving to an investor, then they assume you can do the same for customers and that getting new customers to understand this will be easy and fast and that what grows the company, but if it’s so complicated and so much information coming at you and the user experience let’s say in a mobile app is so complex, you don’t know what to click on next where as an investor the pitch deck isn’t flowing smoothly, it just creates a lot of confusion and overwhelm and then you just say, ugh, I’m going to pass, because this was too hard. There’s too many people who can do it right versus those who can’t, right?
Nasir:
Right.
John:
Do you have an example of someone who grave a great pitch that everybody said, that’s our person and let’s fund them and now you have given them some money? I know there’s some great companies listed on the site.
Nasir:
Sure, yep. So, we have, one of our companies is a fascinating company called Chequed and their website is Chequed.com and this company, the SEO of this company approached us about five years ago and Greg Moran is his name and Greg had already helped grow another successful company in the HR information services space and he came out to speak to us and it was fascinating, because what Chequed does is automated reference checking and the idea is, his idea was, look, there are so many employers out there who are hiring people left and right and it’s become a pipeline issue for them where they are basically either having to make decisions very quickly, but the labor market is tight or they’re overwhelmed by applications if the labor market is soft.
John:
Right.
Nasir:
In either case, if you are, whether you’re a Subway or Marriott or a Disney or whatever, you’re literally hiring thousands of people out of tens of thousands of applicants on an ongoing basis and there’s just no way that you’re going to get good references. If somebody has just spent a lot of time chasing people down on the phone, so they came up with a behavioral assessment that essentially automated the task of the person who is applying asking for a reference and, you know, from the references electronically and the intelligence of the system would give you a sense of whether there’s consistency in the responses and whether those responses are a good fit with the kids of behaviors that you would like a person to exhibit in the job that they’re being qualified for.
John:
Wow, so just the very way that they’re giving references is telling you something about whether they’re a fit for your culture or not, if I heard you right.
Nasir:
It’s not so much culture, it’s really what the job requirements are. So, this is not so much a personality test. What’s it really saying is, I have a position which acquires a person to be, you know, punctual, it requires them to be detail oriented. It requires them to, you know, send reports that are well-written, things like that. So, depending upon the job description, you can ask for certainty capabilities and it’s very, very difficult to get people to answer those questions when you’re trying to reach them on a phone, you know, but if you present the information – so, when Greg came to us, you know, his pitch was essentially built around two or three very simple elements. His pitch was built around the difficulty of doing reference checks, which everyone in the audience had to do at some point and they knew what a pain could be.
John:
They could relate to it easily, yep.
Nasir:
He then talked about what happens when you have to do that at scale and essentially if people are randomly hiring then they’re also losing a lot of money by hiring people who are not a good fit and then they’re having to re-hire for those positions. So, people could relate to that and then the third piece that was interesting was, you know, we were in the middle of a recession and so the trick question that he had to answer was so, what happens when everyone is looking for a job? He goes, well, the interesting thing about this solution is, it works regardless of whether you’re in a bull market or a bare market.
John:
I love that, because that was so fascinating to me when you were describing that. If it’s slow, you’re overwhelmed by applicants, but if it’s a fast, then you don’t have time to really make in depth decisions, so either way whether there’s a supply and demand issue, positive or negative for applicants, you still need this product and to think that through like that that it’s not seasonal, for another way of looking t it, is great. That’s so wonderful.
So, you guys invested with his company and now it’s up and running. That’s a great success story and a great example of a pitch that clearly identifies a problem in a way that’s easily understood and the investors can relate to and that makes it easy for them to say yes. I love that. Thank you, that’s a great, great example. So, let’s just quickly, you know, once someone has that pitch done, then the due diligence comes and then the funding and then what I think is really interesting is what you guys are offering, which is this post-investment oversight in assistance, that’s so key for startups to make sure that it’s not just the money that they’re getting from someone. Can you talk a little about what it is that you do that helps these founders not just with the money?
Nasir:
So, it’s important to us that we invest in companies that where we have some group of our members has an understand of the market and/or the technology, because once you make an early state investment as an angel or a seed stage VC in a company, it could be, you know, if the company is successful, it could be a ten-year or longer relationship and over that time frame, particularly in the beginning before the big venture capitalist or the private equity players or others have arrived, the first time entrepreneur has a lot of needs that they don’t even realize or recognize.
John:
The unknown needs. I love that.
Nasir:
Exactly, so the role that we play in that regard is to, you know, we might take a board position or we might become an observer on the board, but what we’re really looking for is do we have weekly or monthly communications setup where one or more of our members are in touch with the team and aware of what is happen and able to interject or respond to our request in a timely manner, because sometimes they need someone to open a door for them. Sometimes they need to know where they can go buy a certain type of expertise or a certain part. Sometimes they need to understand more about distribution channels.
Sometimes, you know? They need to hire interns from local colleges or universities, so all of those are day-to-day blocking and tackling things that for an experience CEO and an experienced team, they’re used to doing it, they’re expecting it, but for first time companies like many of the ones we are investing in, those are all things where we can add value and we can help them essentially keep them pointed towards the metrics that they need to hit in order to make the next progression for their – step in the progression for their company, you know?
John:
I really found two really valuable things there. We can actually tweet this out. Investors solve unknown needs of founders, that’s a great tweet to really capsulize what you said and this other issue is, what’s second nature for people like yourselves who have done this many times is you have resources and you know exactly what to do whereas if it’s your first time out, you’re going to get frustrated, you’re going to waste a lot of time and that wasted time is what’s going to keep you from staying focused to hit your milestone and that’s the number one issue that I see really bringing huge, huge value.
Nasir:
Yes, so one of the constant conversations that we’re having is if somebody puts a plan in front of us and says, “Here’s what we think we need to do.” We apply the question, okay, if you do this, how is this getting you to where you need to go, because there’s always this trade off between what’s important and urgent and the rest of this stuff, right?
John:
Right, that’s key. It’s productivity and it changes all the time, because something you didn’t anticipate, something that becomes an emergency and then your goals get all shifted in alignment, what’s the priority? Can you speak a little bit about two things: One, the need to be coachable, which is what you just described, so that people are open to the input and secondly, some of the investments you’ve made, I’m sure, had to change direction.
Nasir:
Oh yes, that’s always the case.
John:
Always.
Nasir:
So, coachability is in some ways a double-edged sword. It’s like entrepreneurs by definition are very driven people and you are always looking, you know, for people who are coachable, but not necessarily impressionable.
John:
Oh, I like that differentiation.
Nasir:
Because there are some people who will go out and do whatever they want to and not listen to anyone and there are some people who will listen to whatever it was the last person said and think that’s what I need to do.
John:
Yes, yes.
Nasir:
So, the coachability is a really critical piece because coachability has built into it the ability of the CEO to discern, you know? To not just be responsive to what somebody is asking them to do, but to understand, you know, how to make it not be action-based on opinion, but action-based on data.
John:
Exactly. There’s a great tweet right there, be coachable, but no impressionable. It’s great, I love it. Alright and the second part of that question is just really getting into the need to, you know, the famous word pivot and when do you decide and when do you know? Is it the data that tells or is it your gut?
Nasir:
So, in our view it’s almost always the data. You know, if you’re not gathering the data, it’s hard to figure out what you’re pivoting on or towards, because the data either points you away from something, but it also points you towards the next thing, right, and I’ll tell you one of my favorite companies, this one is in our StartFast Accelerator portfolio, they’re called SpinCar.com and this is a group of wonderful young entrepreneurs and they came to us in 2012 and we had just started our 2012 program and they had some challenges that they needed to overcome, they needed to bring on a full-time technical co-founder, there were also other issues, so we sort of mentored them for a whole year and then they came into our program in 2013 and between that 2012 period and today, they have gone through four very, very significant pivots.
John:
Wow, can you tell us what the four are? The recent two?
Nasir:
Yeah, so when they first came to us, they said our name is “Glifer” and what we’re about is transforming ecommerce by blending what you see on the printed page with what appears on your screen when you look at it through let’s say the camera on your iPad, so it was a 3D image rendering that would pop up based on the camera recognizing a page that were there might be a shoe or a watch or whatever that you see in the magazine and we said, well, that’s interesting, but you know, let’s look and see where things go.
They went from that into saying, okay, we really think that there is this whole sort of paper and tablet thing as a, you know, something that’s going to continue into the long term, but we think that there is marketable value in becoming a robot company where they are creating 3D imagery for all kinds of objects and artifacts that could then be put on, you know, different ecommerce sights and so on, so they wanted to be a robot company.
We said, well, you know, the cost versus the benefit, the data doesn’t seem to support that, so, then we went into – they said, okay, so we’re going to become swipe to spin, because now what we have is, we have an automated way of taking pictures taken from all around an object and creating a rotatable, you know, image that can be put into any website and we think this is how a lot of, you know, web platforms that people are using to publish magazines and so on are going to want to adopt this, because this is a new way for them to get ad dollars and, you know, they raise money on that and what ultimately they found that was not an early adopter market for them, because there was a lot of enthusiasm among the editorial side of the e-magazine world, but not so much on the ad side, which is where they really needed to get and, you know, again, everything is built around data, so they tried that.
They had some really good relationships, but the market wasn’t responding the way they wanted to and then one day they walked into a used car dealership with one of our mentors who had, you know, built many companies, software companies, and sold them in this space, and they walked out with a purchase order, because what turned out was that every used car is different.
So, if the dealer can actually just walk around the car and take a set of pictures and upload it to their site, they will create the 3D visualization of that actual car, which can then go on their website, the dealer’s website, and the engagement rates are through the roof and everything is measurable and now you know what is happening everywhere in the market.
You get that data and then you can tweak things, because now you can compare across regions, across brands, across dealerships, across sales, and so on, and they never look back and that’s why they’re now called SpinCar.
John:
What a great name too, because you literally get the concept of what it does and I love that it kept evolving, but it kept some consistencies like that expertise in 3D, ecommerce, and now the robot and then to go from advertising and then shifting back into sort of a version of ecommerce when people are buying used cars, you know, from what they see on websites, but nobody wants to be surprised and see a dent on the other side, now by seeing the car in 3D that eliminates and obviously the engagement goes way up. So, that’s a great, great example of pivoting, having the right team, and using their expertise and letting data guide you. Thank you so much for that great, great story.
So, just to talk a little bit about StartFast, it’s obviously the accelerator program for three months and I love your three Fs, Focus, Feedback, and Funded and obviously you have your on version of demo day, which is again, pitching. Can you speak to the – do you train people during the three months on how to pitch? What happens on demo day? Take us there.
Nasir:
So, the answer is we absolutely train and we train very, very hard. So, demo day is more of a celebration, but it’s an opportunity for these teams to essentially hone their pitch and to present it to about 300 people, many, most of whom are accredited investors, so that they can – and get the engagement and the interest for follow-on funding.
John: Nice.
Nasir:
So, you know, it takes several forms, obviously we coach them on the elements of what should be part of their pitch. The idea is it should be a 5-7 minute pitch and what we also do is we start to train them on how to pitch, everything from how do you stand, where do you look, how do you make eye contact, how do you present yourself, how do you modulate your voice, how do you articulate and emphasize certain points, how do you, you know? Pause to get an reaction.
All of those things, so we have people who are coming in who are not just experienced investors and entrepreneurs to guide them. We also have people who are coming in who can talk to them as a voice coach, who can talk to them as an acting coach who can work with them on how to make the look and feel of their slides consistent and represent their brand, so all of those things kind of come together on demo day.
John: It’s so valuable, the consistency of a brand, you know, when I coach clients, I’m always talking to them about, you know, when you listen to music, it’s not the same volume and the same speed, you have to vary your pace and the irony is that when we get nervous in front of a group of people and there’s a lot on the line, we tend to talk really fast and the slower you speak, the more authority you have, which is very counter-intuitive. We’re like, I only have this much time! But yes, you’re going to come across much more confident, so I’m thrilled to hear that you have that kind of training for your people and those accelerators and finally, congratulations on winning the 2015 Innovations award with the Upstate Venture Connect, which is this non-profit eco-system that you are a co-founder in. Tell us what inspired you to take on yet another way to give back to the community.
Nasir:
Well, I have to credit my partner Martin Babinec for that impetus. I had been helping put together the elements of the eco-system together in Syracuse for about five years when I met Martin. Martin is, among other things, the founder of TriNet, which is really sort of one of the iconic piece of the infrastructure of Silicon Valley in terms of helping companies scale very quickly and hire people without having to take on all the, you know, compliance and complexity of benefits, management, and so on around HR issues as they are getting money to bring new people on board.
So, Martin is also an upstate New York resident who lives about an hour east of Syracuse and we started talking about what he was obversing in all of these emerging eco-systems around the country where his company was very active and growing every – places like Austin and Boulder, not just the usual Boston/New York/Silicon Valley and so on and we started talking about what it would look like if we could, you know, essentially scale up some of the experiments that I had been running in Syracuse through the Seed Capital Fund creation, through the creation of Syracuse student sandbox to engage students who are in our community and who then, you know, stay within the campus walls, never experience contact with the local business community and leave and then they go start amazing companies like Android, for instance, to name just one.
So, the opportunity was there and he was fully committed and he convinced me at the end of the year to say, okay, we should start up Upstate Venture Connect and what we should do is essentially start recruiting other entrepreneurs around the region and see what we collectively can be doing to, you know, put more capital into the system, bring more mentors to the floor, start more sandbox type programs so that more of the half a million college students in our region have the opportunity to connect with someone who can help them launch the business that they’ve been dreaming of, so that was five years ago and we’ve just, you know, had a tremendous amount of success in starting new angel funds throughout the major cities of upstate New York and we’re also seeing more and more students getting connected to established entrepreneurs in these communities.
John:
That’s great. What a wonderful success story and across all three of these different things I think they all support each other the more the community grows, the more people there are to join the accelerator and then ideally some of those people who graduate the accelerator program are fortunate enough to be part of what you’re doing with Seed Capital for the bigger investments than they get from an accelerator, so it all works together so well and so smartly, it’s such a great eco-system you’ve created.
When you’re talking to anybody across any of these three companies or brands, is there one particular book that you recommend that they read to help them no matter where they are in their process as a person or as a business leader?
Nasir:
You know, I have, there usually is one book for everyone, but isn’t one book for everyone.
John:
Yes.
Nasir:
So, for people who want to learn more about how to build an entrepreneurial eco-system and community, I usually recommend Brad Feld’s book on Startup Communities and the other book that I always refer to is the Rain Forest by Victor Hwang and Greg Horowitt.
John:
Oh, I don’t know that one.
Nasir:
And Greg was very much responsible for a lot of the interesting things that were happening around San Diego in the beginning of their eco-system with San Diego Connect and Victor has worked all around the world and really has a different leads to which he views the building of communities and the idea of how you, in order to scale industrially, you need uniformity and you need control, but in order for creativity and new ideas to flourish, you really need a rainforest-like system where, you know, what looks like a weed will grow into a mighty oak or something.
John:
Oh my gosh, that’s such a great line. Creativity needs a rainforest that what looks like a weed could grow into something beautiful, beautiful. Great, great, great. We’ll be sure to put those links in the shows notes so people can get those books and speaking of the links in the show notes, how can people stay in touch with you and follow you and tell us all the different websites and ways to keep up with all three of these.
Nasir:
Sure, absolutely. So, you UVC, Upstate Venture Connect is UVC.org and we’re UVConnect on Twitter. StartFast.net is the StartFast website and our Twitter is Start_Fast and you can reach me at Nasir (at) UVC.org.
John:
Terrific. Thank you so much for this incredible insight into how to make a great pitch, how to pivot, and just chockablock full of really great insights from what you’re looking for in the person that you invest in and I think it’s really, really a great insight that people are going to listen to over and over again. Thanks again, Nasir.
Nasir:
Thank you so much. It’s my pleasure.