TSP021 | Alan Jones – Transcription

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John Livesay:
Hi and welcome to The Successful Pitch podcast. Today’s guest is Alan Jones who lives in Sydney, Australia. He is the Chief Growth Hacker at Blue Chilli Tech, which is an incubator and an investor. He tell us all the secrets to making your pitch powerful. He said, “You should grab people by the heart strings and pull hard.”

And one of the best ways to do that is to figure out what kind of genre is your story in. Are you telling a horror film? Are you telling a romance? Or are you telling a story that has all kinds of risks and payoffs that make people want to pay attention, that’s the way to stand out when you give a pitch. He also talks about the importance of silence when you’re pitching, even if you only have two minutes, take advantage of silence to make people sit up and listen to what you’re saying. Enjoy the interview.

Hi and welcome to The Successful Pitch podcast. Today’s guest is calling in all the way from Sydney, Australia, Alan Jones. Alan has a great title as Chief Growth Hacker at Blue Chilli Technology. He has all kinds of knowledge and insights on everything from how to create a brand, an elevator pitch, advising people on lean startup methodologies, picking you up when you’re feeling down and the thing that impressed me the most, reaching things on the top shelf. We’ll find out if he means that literally or figuratively. Alan, welcome to the show.

Alan Jones:
Hi John, thank you very much for having me on.

John:
So, of course, the first question I have to ask you is, what does that mean, helping you reach things on the top shelf? Are you extremely tall or is that a metaphor for what you do for startups?

Alan:
Yeah, I’m about 6’5” and I was lucky enough to be an early employee of Yahoo back in the day and my ID for most hings online these days is BigYahu, because when there were 200 employees at Yahoo, I was the tallest Yahoo.

John:
That’s something to stand out, right? That’s what it is all about, isn’t it, Alan? It’s coming up with some hook that makes you memorable or as they said in the musical Gypsy, you gotta have a gimmick of some sort, right? What is it that makes you memorable?

Alan:
Yeah, yeah. You know, that can be a real asset in a crowded room where people are networking say in the social setting after you’re seeing 5 or 10 startups pitch. Everybody can see the big guy at the back of the room, but also people can see people wearing a brightly colored t-shirt with their startup’s brand on it, for instance. So, that would be advice I’ve given again and again. People should wear their brand and make sure that it’s clear and memorable.

John:
I love that. I mean, that makes for the first tweet in the first five minutes. I think that’s a record. Wear your brand. I heard it said, walk your talk, but I love coming from the fashion background that I have, wear your brand. Literally be so passionate about it that you want to wear it, right?

Alan:
Right, right. So, I think it’s really important for potential employees, potential investors, potential partners to be clear on what your – something about what your company culture is and the best way to start conveying that subtly and cleverly is to dress consistently and to include your brand in your dress. So, are you a jeans and t-shirt company? Are you an open-neck business shirt and Chinos company? Be pretty clear about that up front and be consistent with that.

So, Blue Chilli where I work now, we’re very much a jeans and t-shirt company and we work at all levels of state and federal government in Australia. We spend a lot of time with big venture capital funds and large corporate institutions. Often times, we’ll be a boardroom table with nine/ten other people and I’ll be the only guy with jeans and t-shirt, but they know who the guy is from Blue Chilli, right?

John:
Right. Well, it’s authentic to your culture and so that’s what makes it consistent and so as long as you’re authentic to your culture, people are fine with that. It can even be a certain hairstyle. I know certain people here are known for their certain haircuts and that’s what makes them memorable in the Hollywood industry. So, whatever that is, own it and be proud of it and its what makes you stand out. I love that. So, can you take us back to how did you go from being the tallest guy at Yahoo, to being the Chief Growth Hacker at Blue Chilli?

Alan:
Yeah, so my background, part of working at Yahoo was in communications, was in journalism and PR and advertising, copy writing, and I drifted into online roles just because producing marketing online was quicker and faster and more fun than doing it in print or TV or radio at the time. I wanted to be known for doing something well and nobody else knew how to do that stuff well. Working at Yahoo in the early days gave me tremendous opportunity.

A whole bunch of people fairly early in the company were very well compensated in stock options and a few of us worked away were able to get – exercise some of those stock options prior to the first big internet crash. The dot com crash. So, that gave me the opportunity to exercise my entrepreneurial dreams once again and I did everything, I did everything wrong for a good 5-10 years.

I started a record label, I bought and sold an advertising agency, I started selling physical products that I’ve designed myself online and a lot of it was me fleshing out my skills as an entrepreneur and learning how different industries worked, right. I thought I understood advertising. I thought I understood online retailing, obviously search engines, you know, but I had no idea how the music industry worked and I wanted to learn how that worked and I started a record label.

So, I chewed through a fair amount of capital in that period, but the other thing I started doing at that time was starting to explore how to invest in startups. In Australia at that time, we had a very small community and we had an even smaller pool of people who were interested in investing in startups at a pretty institutional level.

So, I got started. I guess, one of the things we didn’t have in Australia at that time was an accelerated program. We had nothing like a Y Combinator or a Techstars or 500 Startups and a few of us would complain about that lack about how you can only go so far on your credit card and most of the time that wasn’t going to get you to series A.

So, we would complain about, you know, Aussies have a, you know, something of a drinking culture and we’d get together at the pub, kids go to the pub and that would be a frequent topic of complaint and everybody was waiting for somebody to put their hand up and say, I’ll take the lead on this, because nobody wanted to be the first person to say, okay, I’ll start Australia’s Y Combinator, because we knew there would be a lot of work involved and it would be largely uncompensated. We all wanted it to happen and a great guy, Nicky (?), an Australian entrepreneur who had build a pretty successful online real estate business in the US and then almost completed his exited from that, put his hand up and said, okay, I will be that guy.

So, that program was called Start Late and that going in 2010 and for me, that was really the beginning of viable style of community in Australia. Since then we’ve seen the growth of a variety of different accelerator programs in Australia, early stage venture funds, proper VC funds, and the organization I know work at, Blue Chilli, which has a very interesting hybrid model where we actually build the technology as well as help startups with working through their business strategy and marketing strategy. They got a marketing strategy and we help them raise capital and so now in Australia there are at least ten accelerator programs that I know of that are affiliated with universities or large corporate institutions or traditional venture capital.

John:
So, let me ask you about what you mentioned about Blue Chilli. What I can see from the website, your company acts as an accelerator and then if somebody graduates through that program, you then could possible be a venture capitalist for them and sort of one stop shopping, because you already know them. Is that accurate?

Alan:
Yeah, that’s right. So, if you’re fortunate enough to be in a Y Combinator intake, for instance, you’re pretty certain you’d get along to demo day at the end of that accelerator program and there will be a room full of hundreds of angel investors with checkbooks and you need to kind of bootstrap that experience for other startup accelerator programs, because they don’t automatically draw a crowd of investors like Y Combinator does.

So, at Blue Chilli, we figured, so we teach a very detailed, meticulous curriculum to our accelerator intake. It’s not so much about inviting experiencing people in to talk to our startups and then hoping some of them form advisory relationships. We teach a curriculum, it takes about six months to go through and we call that curriculum the 1-5-6. We sat down and we decided, if we’re going to create investment-able startups, what are all the things we need to make sure they remember to do.

We came up with a list of about 156 things and we sorted them in order, right, so this is the day that you need to make sure you have your business registration in and this is the day you need to make sure you got your company share structure organization. So, everything from rent stream to domain names, choosing a brand name, right away through the company structure.

So, we have a team of full time advisers that work day by day with each of our startup founders and every week, you’ve got work to do. Every week you’ve got home work and then every Monday morning, we look back on what you achieved and didn’t achieve last week and we give you a further nudge. So, we have a pretty big – are you familiar with the carrot and the stick?

John;
Yes.

Alan:
So, we have a pretty big stick, you know, you have a “teacher” and an advisor in that program, so we needed a carrot as well. We needed you to feel like all of this hard work is going to be worth while and so we decided to create our own venture fund as well. So, in Australia, we have a mouthful of a government support program called The Early Stage Venture Capital Lifetime Partnership or ESVCLP and there are only eight or ten of these ESVCLP funds in Australia, but we’re one of the first ones out of the door.

John:
Congrats.

Alan:
It allows us to give very attractive tax incentives to our investors in return for allowing us to invest some of the money in very early stage startups, so pre-series A.

John:
Can you give you an example of some of the numbers. So, how many people apply to get into the six month program and out of that, how many get in? And after the people who actually graduate, how many people typically get the VC money? And how much is it?

Alan:
Yeah, so Blue Chilli is three years old and so our growth rate has been pretty dramatic. Currently we see about 200 applications per month and our goal is to on board two new startups each month, so we set ourselves an ambitious goal of doing 100 startups by 2016 and we’re on track actually. Smashed that goal.

We have 54 startups in the portfolio now. We’re in commission negotiations with another four or five, so your odds about one in a hundred of getting us interested in entering commission negotiations with you to walk you in as one of our startups and then coming out of the program. We’re doing much better than market average.

So, in Australia at the moment, the average rule of thumb is that most startups have about a 1 and 20 chance of getting to break even to portability or to their next funding round and we think at the moment fairly early on in our portfolio and this is not something that we brag about yet, because we want to see a few more years under our belt before we really saw that this is how we’re tracking, but we think at the moment we’re about one and three, one and four of our startups are succeeding, getting to the next level.

John:
Do you think that’s because you have such in-depth accelerator program? I mean, six months is much longer than Y Combinator from what I understand, correct?

Alan:
Yeah, that’s right. So, it is a self-pace program, so we don’t go, we don’t have a calender-based intake like other accelerator programs too. So, we take startups every month. If you are in a city where we have one of our incubator spaces, then you come and work on a residential basis with our advisers, so we have a co-working space for you to work and so some of our founders are still exiting from what they were doing before, so maybe they can’t work full time on their new startup vision just yet, so that will slow their progress. They’re going to complete it more like six month time, but other people get advance credit, because they are entering our program with a startup where a lot of the thinking is already done and they might be able to complete it in perhaps three months.

John:
Oh, I see. Can you tell us one story of a startup that you were involved with? I saw that you did something called ScriptRock or Bugcrowd. I love the name Bugcrowd. I had to look that up. It’s a security flaw thing, right? So, tell us a story about one of those two or any startup that you’ve been involved with. How did you get involved with that? What’s the story of that little venture and what did you learn from that? I’m sure there’s tons of things to tell us.

Alan:
Well ScriptRock and Bugcrowd are startups I got to know through another accelerator program, that Start Late program that I mentioned before and I spend some of my time each year, so Start Late is a program that runs from beginning of January to about mid year and we have a three month program in Sydney in an incubator space and then we take our startups over to the US and they’re there for at least two weeks, they are welcome to stay for a couple of months and many of our startups don’t go back except to take care of visa paper work, so the Start Late program is very much about taking the best Australian ideas, but have a global mission and have a big potential customer base in the United States and taking them across to the US.

So, we set them up from the beginning with an Australian company structure and a (#15:35?) as well, so that we can make sure, you know, most of our companies hiring Australians are a lot cheaper than hiring people in Silicon Valley, so a lot of them will start with the majority of their development team, say, in Australia and setup sales and marketing and capital writing in Silicon Valley where each of those things is easier to do.

So, both Bugcrowd and ScriptRock followed that path and both companies are in the process, well, actually for ScriptRock, they’ve completed it there and the whole team have marketed across to the US now. Most interesting thing I guess about both of those companies that attracted me, so I got to work with them in the three month program in Australia and I went over with them to Silicon Valley.

For Australians and I think for most international startups, you know, you’ve read a lot about Silicon Valley, you’ve listened to podcasts, you’ve heard stories about people who have been over there to work, but it’s not until you really land on the ground that you full appreciate just how much Silicon Valley lives startups 24 by 7.

You sit down in a cafe, every other conversation you can hear is about a startup in some aspect, the person serving you has got a startup. All of the conversations on public transport, your Uber driver, they all want to tell you about their startup idea and that’s just not the case in other markets. Even in the East Coast of the US, that’s not the case.

At Blue Chilli, we have a couple of startups now in New York and the reason why they work with us, with Blue Chilli, with an accelerator program based on the other side of the world, is that they really wanted to be based in New York and it’s challenging to be based outside of Silicon Valley, because it just has this kind of black hole, critical mass, that just sucks in people and capital. So, for ScriptRock and Bugcrowd, it’s always an interesting experience to see these Aussies startups land in Silicon Valley for the first time and see how they react to that challenge.

So, a bunch of people particularly when they’re from a product background, if they’re developers, their instinctive reaction is going to be, I’m going to hide in my room and work on my product, because this is all very intimidating to me and I hope that if I can build a biggest possible product, then people are going to love it and I’m not going to have to really compete at pitch competitions, you know, in pitching to VCs who have seen 19 other companies before me that day. I’m just going to build a super awesome product and it will grow by itself. The reality is that happens maybe one in a thousand times. You just can’t, you can’t afford to do that.

So, for me, it’s interesting to see startup founders from a technical background who aren’t naturally gregarious, outgoing, pitching people, land in an environment like that and think, right, I really got to learn how to do this super well. I need to be the kind of startup CEO that everybody’s going to love and be inspired by and want to get in on that mission.

So, for me, Alan Sharp-Paul and Mike Baukes, the two co-founders of ScriptRock were fascinating, because they both came from that dev background that were entering into that enterprise software market and they are very true to who they really were, so these are guys that like to play in rock bands. They’re pretty causal guys and so they weren’t tempted to do the enterprise sales thing and start wearing a suit and tie and have a very conservative corporate presence like the other enterprise software vendors. They just went in and said bleep that, we are ScriptRock.

John:
Got it. Now, what does ScriptRock? What is their 30 second elevator pitch?

Alan:
Yeah, so you know when sometimes on a Sunday night, your bank will try and install some new software on their corporate network and it doesn’t go well and Saturday morning, the automatic teller machines don’t work across the country, that’s the kind of thing that gets CIOs sacked or at least they lose their bonus for the year.

So, it’s a very valuable problem to solve and the simplest way to explain ScriptRock it is monitoring software that sits on top of thousands upon thousands of servers in a corporate network and understands what’s running on those machines and can tell the people apply things like patches to servers that when you take one of those machines offline, apply a patch to it, it’s technology that makes sure that service running properly before you take it back in to production. You think that would be a pretty simple thing, but it’s something that people not running ScriptRock, they run into that all the time, so when your airline booking system goes down, when your insurance online system goes down, that’s what it is.

John:
Lost money, lost everything. What I loved about what you said is, imagine how difficult it is for someone who tends to be an introvert to not hide themselves and just work on their product and in order to get investors to know who you are, be inspired by who you are, you have to get out of your comfort zone, but it’s even more so when you’re from a foreign country and you’ve moved from Australia to Silicon Valley.

You have two things to counter to get yourself out of that comfort zone, because people invest in people no matter how great your idea is and that’s really the huge takeaway I think for today from what I’m hearing you say is, you know, no matter where you’re coming from, no matter what country, what personality type, is you have got to figure out some things. So, if you’re into someone who is into rock bands, I wondered if the rock in ScriptRock was connected to that love of rock bands.

Alan:
That’s exactly it.

John:
Yeah, make that memorable and figure out a way to channel your inner rock star and be somebody you’re not normally when you get in front of those pitches.

Alan:
I encourage them to celebrate that, like when the ScriptRock guys closed their C-round, I sent them as a gift some customize day glow guitar picks as business cards. So, it had their names and email addresses and phone numbers. Everybody is going to remember that when you give them your business card.

John:
Be memorable. One of the things that you are such an expert in and since this is The Successful Pitch podcast, I want to get your big takeaways on what is it that you look for when someone pitches you as an investor and how do you train the people in the incubator to give good pitches?

Alan:
So, John, you talk about this all the time on our podcast. I’m a big believer about your essential messages.

John:
Thanks.

Alan:
When people go into pitch, they think, okay, I’m going to Google how to do this and they’ll find a template, right, so a seven or eight slide template that says this is the problem and this is how that problem is solved today and this is how we solve that problem and here is our rockstar team and we’re raising this much and this is how much traction we have so far, you know, the end result of that is that your optimizing your pitch for VCs to compare you against hundreds of startup opportunity investments every week, right, and the problem with that is when you’re optimizing for the VC, you’re allowing them to build a big spreadsheet that lets them be dispassionate and cold and rational or logical about the startup investments that they make. What you wanna do is you want to do the reverse, you gotta grab people by the heart strings and pull hard, you know.

John:
Oh, can we tweet that please? Grab people by the heart strings and pull hard! That’s brilliant, the pull hard part at the end is my favorite.

Alan:
Cool, thank you. So, talk about this all the time. It’s about the narrative. It’s about the narrative arch, the story that you tell someone and encourage founders to spend some time thinking about, you know, if the story that they’re going to tell was a movie or a book, what genre would it sit in, you know?

So, is this a genre where there is an evil empire that you’re taking on, you know. Are you trying to knock down IBM or American Express, right. So, that could be a horror film where you think, you know, you’ve succeeded, then the monster gets back up again and attacks again, right?

Or it could be, you know, maybe your genre is a romance where you’re connecting two different kinds of customers in an online market place and they’ve always had trouble match making in the past and your technologies are going to make them find each other and fall in love, right. So, any kind of two-sided marketplace pitch is a romance, if you think about it.

So, thinking about your genres is a good way to get yourself into a habit of telling a story that has a beginning, a middle, and an end, has an advisory, has a hero or a heroine, has two lovers to meet, has risks and obviously pay offs, big rewards if it all goes well. Another thing I try and get my startup founders to work on is obviously their presentation style. Great story tellers, if you watch a great TED talk, you’ll see those presenters who, for the most part, weren’t great presenters when they were invited to do a TED talk, they have been rehearsed on where to put the variations and tone and pitch in their story telling and most importantly how to use silence.

So, we see people, you know, you give a startup founder, okay, you’ve got two minutes, okay, you’ve got five minutes or the bell is going to ring at five minutes and then you’ve got another minute, you know. The clock is ticking and they race. So, some of the success, I just need to get to the finish line. I work with them to rehearse into their pitch. You know, where is another way you want people to stop and think about what you’ve just told them. 15-20 seconds of silence and everybody is leaning forward. Everybody is waiting. If people are checking their smartphones or emails, because there’s just like a constant drone of pitching going on, then they’ve decided to start checking their emails. When you pause for effect, everybody puts down their phone and goes, oh, why did he stop talking?

John:
Exactly, the power of silence even when you only have a short time frame to communicate your message is really the big takeaway for me with what you just said. For example, if one of the genres is comedy, everybody knows comedy is based on timing and the timing of when do you deliver that punchline if you say it too fast or too slow or not enough of a pause, people don’t get a joke, it’s the same thing when you’re pitching. So, I love that you brought up that power of silence during a pitch. It’s such an important thing and very few people talk about it or think about it, so thank you for that. That’s fantastic.

Alan:
And then the final thing we work on with our startups at Blue Chilli is we cause them to remember that, okay, there’s two legs are going to hold you up while you’re on stage, but there are two other major limbs in story telling that for most of us are engaged only in holding the clicker or grasping the lectern and (#27:00?).

So, I like to work with our startups at Blue Chilli on their gestures. The hands and the arms, and the body posture can be such a powerful part of story telling and you’ve got the opportunity to pitch to people in person, you should absolutely be using that opportunity, so there are some gestures that great speakers use instinctively at important points in their story and they don’t overuse them and they use the right ones to convey particular messages and so if you watch a Clinton, if you watch a major, if you watch any really polished TED talks, you’ll see people using their hands to do things like pick out an atom from the air of them.

A little pitching gesture or maybe to cut with the chopping board, their two hands, okay. This is the point where everything changes and here we go forwards, you know, making a slicing gesture from here. You can weigh up things, you can balance, on the one hand and whenever you want to go down this path on the other hand, maybe you want to go this way. So, there’s maybe eight or ten gestures that can really leave them and open up and again, discourage people from looking down at their notes or from their smartphone and look up and engage with you as a speaker.

John:
What I hear you saying there is, gestures help you paint a visual picture for someone so whether it’s pulling an atom in the air or chopping something or giving something more weight than something else, that really creates not only a tension, but you’re painting a picture almost like a pantomime, even though you’re not pantomiming, but you’re using your gestures effectively and judiciously, not overdoing it.

Alan:
Yeah. Well, initially you are pantomiming, because it doesn’t come naturally to most of us, so what we’ll do is we’ll script a pitch and I’ll insert the places where I want you to mechanically introduce a gesture that I’m teaching you and with repetition overtime, some of those gestures become second nature for you and I’ll notice, I’ll observe, you’re using in meetings with your team members, say. In situations where you aren’t pitch, they become part of your vocabulary. When I ask founders, you know, if there was one thing that you could change about pitching, what would it be?

John:
Yes.

Alan:
Almost all of them will say, I want to appear less nervous. So, the biggest visual cue that we have that we’re nervous is I’m grabbing the lectern with a death grip or I’m nervously stuffing my hands in my pockets or, you know, I’ve got my hands behind me and I’m rocking up and down on the balls of my feet. When we get people to use their hands for bigger gestures than that, it just naturally makes them seem less nervous, more in control of what they’re doing. A person who has their arms right out is controlling this space is saying I’m a confident speaking and the message I’m giving is something you can believe.

John:
I love that. We’re going to tweet, use gestures to reduce your nervousness and increase your confidence, because the opposite of nervousness is confidence and that’s what you just shared with us as a key way to do that, especially if that’s the number one thing that people want to do.

What, I have to just ask you before I let you go. The half hour goes so fast with someone like you. This great blog you wrote about the single most important trick to being a successful angel investor. I think that’s very important to hear from your words as oppose to what you wrote, just reading what you wrote in the blog, which is a great blog, but because if I know the single most important thing to being a good angel investor, then I know what to do when I’m pitching you, because I’m going to customize what I’m saying to make what you see as the most important thing.

So, would you mind just taking us through, you know, I don’t want to quote you on this, because there’s so much good stuff in here, but the jist of what your message is in this blog and of course, we’re going to refer people an link it up in the show notes where they can actually read it.

Alan:
Sure. So, John, yeah, I touched on a few things on that post, but I think the big takeaway for a founder is that, I invest my own money and Blue Chilli pre-series A and sometimes a series A, right, so we’re always involved in the first funding round that a startup makes and for many startup founders, they see that, they hope that maybe that’s the last funding round they ever need to take or at least, they’re looking at it, I’m not quite sure what’s going to happen when I make that, when I got that seed round closed, but life is going to get a whole lot easier, you know, that’s the only peak I can see in the distance and once I make it over that, you know, it’s going to be awesome, and of course, that’s not the case at all.

When somebody invests in your business, they are lending you money and they need to see a return on that money and the clock starts ticking the moment you walk away with that check, right, the moment that time share is signed, the clock is ticking. So, you need to return to your investors a pretty healthy return on that investment, you need to lose all the money or trying your best to do that or you need to get a next round at a higher evaluation from the next series of investors.

And so, for founders, it’s important to recognize that the game doesn’t necessarily get easier, it actually gets faster and harder past that round and then as an angel investor, it’s really important to understand that the single most important thing an angel investor needs to be doing when they join a seed round is to be helping that founder close that next round. So, reality is most startups aren’t going to make it to portability on that seed round, they’re really going to need a series A and probably a follow on after that. If there are embarking upon building a billion dollar business. So, the work of an angel investor, a good angel investor really begins once your money has hit that start of the bank account.

John:
I love that, because what you’re saying is, don’t think that just because you get an angel investor, your problems are over, this is the beginning of multiple rounds and multiple challenges and that’s just the first hurdle and just being aware of that, makes you so much more savvy when you’re pitching as oppose to coming across so native. You think, well, once I get this, it’s happy days, but if you have a much more bigger picture perspective of the road ahead, I would assume, it would make you feel more confident in that particular startup.

Alan:
Totally. You know one really easy way to tell if somebody’s a startup founder for the first time or second time is the startup founder will have in their pitch, you know, we’re raising this much now and then in 8 months time, we’ll think we’ll be raising this much as a series A.

John:
Right. Got it.

Alan:
Where as the first time founder will go, oh, we’re raising this much and you ask them the question in time, you know, what’s your plans after that and they say, oh, we’ll expect we’ll hit cash flow profitability. You just know, one in a thousand will get there.

John:
Yes, unrealistic. Great.

Alan:
The other thing is raising capital is like raising money for charity. Everybody has charities that they think are very worthy causes that deserve to be supported, every year I do adventure and obstacle course races and most of them have a charity fund raising component and I probably raise a few thousand dollars every year doing that.

When I reach out to my friends, you know, I say, can I get $25 dollars from you or $50 dollars. I know it’s something they can afford and they will say to me initially, oh, you know, that would be a really good thing, I’d be happy to do that, but it really takes five, six, seven, eight, nine nagging reminders from me to get them to spare that $50. It’s not because they are a bad person, it’s not because they don’t believe in the cause, it’s just that when you’ve got 20 things to do that day, you know, it’s easy to let that one slip.

The same thing is true with investing, right, so if you’re an angel investor trying to help a startup get ready for a series A, you need to nag a little bit harder than you probably expect you’re going to have to do, you know, trying to get a meeting with a VC fund is harder than it really should be. Trying to get them whether or not they’re going to be in on this round is generally harder than it should be.

You need to work much, much harder. It’s not that they don’t think this is an exciting opportunity. It’s not that they don’t think the founders are great or that this is a billion dollar market opportunity. It’s just that there have got a lot of billion dollar market opportunities to review and once you commit to these things, you can’t uncommit.

John:
Uncommit, right. I read your blog about that and all the charity work you do and the running and the number one thing that you said is fund raising is like charity fund raising, so fund raising whether it’s fund raising for your startup or fund raising for a charity, the number one thing you tell people is, in both situations you have to ask and be persistent because people have a lot of distractions in both. It’s the big takeaway.

Alan:
Absolutely. In Australian business culture, we’re a little shy compared to Americans, so when we don’t hear back, we tend to assume, ah well, that’s it. That pitch didn’t work and that person isn’t interested. So, it’s a challenge for us culturally to go back and say, hey, I didn’t hear back from you, what happened there?

John:
Yes. Well, because of that fear of rejection is so huge, if we can help people overcome that in this podcast, I’d be thrilled, because if you let go of that fear of rejection and taking things personally then you can continue to move forward because you’re so passionate about what you’re doing.

Alan:
Right, right. Be polite, but be persistent.

John:
Persistent without being a pest, as I like to say. If you had a book that you like to have your startups read either while they’re in the incubator or afterwards or just about life in general, what’s one of your favorite books to tell people that they could read to make them a better person, a better startup?

Alan:
I think it’s really important to try to achieve a work/life balance as a startup founder. The startup industry is geared towards encouraging founders to abandon work life balance for a period of time in order to maximize return to investors in the shortest possible time and I don’t think that’s a healthy practice in the long term.

So, I like to practice work/life balance and I’m fortunate enough to be in a position to be able to do that, but I think every startup founder – I see startup founders and starts blow up all the time, because they buy into that culture. I’m going to work seven days, 12 hours a day, and for most of us that’s just not possible.

For most of us, that’s a really unhealthy thing to do. So, I don’t know if there’s a particular book or movie or a school that you should go to to try to achieve a work/life balance, so what I’d do instead is I’d say, go somewhere where you have no choice but to be unplugged.

So, every couple of years I go to the Himalayas where there is no internet access, there’s no access to magazine and newspaper. The first time I did that was right on the cusp of the big global financial crisis that took down some of the big banks in the United States and Europe and I was going into the mountains of the Himalayas and I had no idea what was going to happen to my net worth while I was walking, so it was a scary thing, but it was a very good practice for me.

The other thing I’d recommend people do is that they start reading up on the field of behavioral economics, so classic economics is the way we say, okay, you know, rationally people should go into the casino with a $1,000 and gamble this percentage of it and then go home, because they need the rest of that money to pay the rent and buy groceries. Behavioral economics is the field of study, studying how people actually behave when you send them into a casino with $1,000 and that has a lot to do with what we do as startups founders.

John:
Oh right.

Alan:
So, a lot of people coming to my landing page and signing with their email address, but they never converting from their free trial into their pay plan. Why are people not clicking on the right buttons on the pricing page? So, a lot of that online behavior can be understood better through the field of payroll economics and a good primer, a good starting point is an author Dan Ariely. If you got to DanAriely.com, you’ll find all of his texts, but the best place to start is a book called Predictably Irrational.

John:
Predictably Irrational, I love the title. Okay, I’m definitely going to get that. Thank you, that’s hugely helpful. Obviously, behavioral economics is, like you said, so important, because if you confuse people, they don’t take action and you have to figure out how to uncofuse them. What is the best way for someone to follow your blogs, learn about applying to Blue Chilli, your websites, your Twitter, all that good stuff, if you’d share that with us.

Alan:
So, I love anybody who thinks they might have an idea for a startup and they have trouble finding a technical co-founder, because Blue Chili is an awesome technical co-founder for startup founders, so on BlueChilli.com you’ll fund, if you hover there for more than five seconds, you’ll see a button pop up and invite you to pitch to us.

So, we receive about 200 applications online every month. It’s maybe ten question form and we have startups all around the world now. As I mentioned, we have a few in Silicon Valley now and a few in New York working with us. The simplest way to follow me is to start with my Twitter ID, which is BigYahu. It’s not spelled Yah double o though, because the technical team at Yahoo wisely wouldn’t allow anybody to infringe the trademark and their user ID, so my user ID for everything, if you just Google BigYahu and if you want to follow me there on Twitter, that’s the way to go, but if you just Google, you’ll see every single service I’ve signed up for on the internet in the past, you know, since 2001.

John:
Great. Well, BigYahu, it’s been a pleasure having you on the show. I loved all your incredible takeaways about pull on the heart strings and pull hard and figure out a genre that you’re going to pitch people to. Those are such valuable takeaways. Thanks again.

Alan:
Thanks for having me, John.