Journey to Entrepreneurship – Interview with Kurt Theobald
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Episode Summary
Kurt Theobald is the CEO of Classy Llama, a full-service ecommerce agency. He has failed countless times, but has always gotten back up to try again. Failure doesn’t define you and the journey to entrepreneurship is often a journey of self-discovery as well. Kurt discusses company culture, the importance of people, and so much more on this episode!
Journey to Entrepreneurship – Interview with Kurt Theobald
Hi. Welcome to The Successful Pitch podcast. Today’s guest is Kurt Theobald. Kurt is the CEO and co-founder of Classy Llama, an Inc 5000 eCommerce agency that has already done $5 million in revenue. I found out about him from a wonderful blog he did on the three points of wisdom. He said, “Entrepreneurs should create shiny new things. The edgier the better.” Reality disagrees. Kurt is going to tell us all about that. Kurt, welcome to the show.
Thanks a lot, John. I’m glad to be here.
Tell me about what you’ve learned about valuable work often lies hidden, that you have to dig deeper. You said you’ve cut your teeth on ten previous business, all of which died. You said you went too far. What do you mean by that? What happened that you’ve learned from ten things not working that’s made, now you are so successful?
Journey to entrepreneurship: I’m just going to do something that’s not as cool, I’m going to do it really, really well.
I think there is a culture in the entrepreneurship circles, there’s this culture that drives towards you’ve got to do the next big thing. I tried to do the next big thing so many times. I realized that sometimes, doing something that’s not cool but it’s in a niche where there’s a real need, sometimes that can work a lot better and a lot faster than pursuing the next big thing.
That’s where I got my traction, is I’m just going to do something that’s not as cool, I’m going to do it really, really well. That works out pretty well because a lot of people that don’t do things really, really well in those uncool niches. That’s worked really well for us.
Talk about what’s considered a cool thing versus an uncool thing.
The cool things are the things that will publicly change the way that people do things. A lot of times it’s going to be consumer facing. There’s this whole market where you’re serving businesses that people don’t really see. That’s just not cool because nobody hears or knows about it. When you’re doing something that’s going to change the behavior of the consumer, it’s going to reshape the world in some way, these are the big things that people want to do.
They want to change the nature of energy or the way that people buy things or a big new way to play video games. Virtual reality, how to apply that? There’s all these big things that are being developed that honestly, it probably has lots to do with how much they hit the news, honestly. The more they hit the news, the cooler they are.
Your willingness to do “the uncool things” sometimes require some sacrifices. Tell us about what you and your partner, Erik, had to do as far as just the office space? You have to be almost like MacGyver sometimes.
That is true. It’s probably true of both cool and uncool things. It may just be a common part of successful entrepreneurship. It’s the willingness to go through difficult circumstances. Things like you hear a lot of entrepreneurs started in a garage. We started in a garage. It’s a common thing.
Journey to entrepreneurship: It’s the willingness to go through difficult circumstances. You hear a lot of entrepreneurs started in a garage. We started in a garage.
I remember in the early days with our business, we had a two-car garage in my house that we were using as an office. In the winters, we have this thin 6 mil plastic hanging up by the garage door to try to create some barrier for heat. I had a wood fire stove in the adjacent room and that was all we have for heat. It got really cold in the winter. The guys are trying to code and their hands are shaking because it’s so cold.
In the summers, we took a panel out of the two-car garage door and put three quarters of that panel, we put in this particle board and then put an AC unit in there to try to keep it cool enough, which also didn’t worked very well. We we’re too hot in summers, too cold in the winters. I guess it’s part of being an entrepreneur and cutting your costs to the quick. You just bear through it because you believe in what you’re doing.
You really have to have tenacity and grit and passion to survive those kinds of things, otherwise you’re like, “It’s not worth it.” You have to believe in what you’re doing and that you really want to work for yourself and have a big why of why you’re doing this. Even if it’s “uncool”. I just think that’s so valuable. Congratulations on exceeding $5 million. So few startups ever get to $1 million, let alone 5. What is it that you could share as the motivation factor beyond just making money that makes you so successful, that makes your clients at Classy Llama want to keep working with you?
I think that from the very beginning, you mentioned that very important why, I actually started a professional journal back in 2004 towards the end of the year. That’s now about twelve years ago or eleven and a half years ago. At the very beginning of that journal, I expressed that who I am as an entrepreneur, it’s part of my DNA.
[Tweet “To do anything other than be an entrepreneur is to betray who I am.”]
To do anything other than be an entrepreneur or to, when I fail, when I fall down, to not get back up and keep going is to betray who I am, and that I will not do. That powerful why and that foundation, it really makes it to where you’ve made, as a friend of mine says, a diffision. A diffision means, like incision is to cut, like an incision as to cut into. Diffision is to cut away. You’re cutting away all other options and you have one path, and you have to stay in that path.
I love that.
Journey to entrepreneurship: You have to cut away all the other options so that you really only do have one path to keep going.
I made a diffision according to who I am and I have to stay on that path because I’ve cut away all other options. It’s like scuttling the ship from the, I think it was Cortez or whatever, that scuttled the boats. Now, they only have one way to go. They can’t go back, they had to go forward. That’s so important because there’s so much pain involved with entrepreneurship that you have to cut away all the other options so that you really only do have one path to keep going. Because you never would have done this if you knew how difficult it was going to be. It’s just important to have that frame of mind. This is the only way to go.
It’s so valuable. What you said there, if you don’t come back from failure, you’re betraying who you really are. Failure might be something that happens but it doesn’t define you and it certainly doesn’t stop you from trying again.
I think it’s very important to clarify that who I am isn’t necessarily who’s someone else is. My walking in that was appropriate, where someone else who, they’re more of a supporter or they come alongside, they’re more consultative, whatever it is. Different people have different strengths. If you put someone who’s not an entrepreneur and they go, “I want to be the American entrepreneur because of what other people have said about me, rather than who I really am,” it can really get them in a mess.
[Tweet “Journey to entrepreneurship: Different people have different strengths.”]
This whole thing you talked about is, the journey of entrepreneurship is really a journey of self-discovery, which I think is so important because whether you’re pitching yourself to a client or an investor, they’re buying you much more so than the idea or your skills, don’t you think?
Especially in an early stage of a business, they’re investing in you, not this idea. The difficult thing about business is not getting a good idea. There’s lots of people that have good ideas. The difficult thing is executing that idea and bring it to fruition and making the smart choices and being able to receive good feedback and not be too proud to receive the wisdom from others and have the fortitude to endure through the pain that is going to be required to get to the finish line.
Journey to entrepreneurship: Have the fortitude to endure because it almost always takes longer than you expect it will for it to be successful.
Because it almost always takes longer than you expect it will for it to be successful. You hear about these huge successes that happened overnight. Usually, there’s a long story before those successes. Secondly, those are super rare even if they do happen. You got to invest in people that are going to be able to endure, going to have humility to receive quality feedback and have the wisdom themselves to be able to guide an idea to quality fruition.
The willingness to be coachable and not think you have all the answers and not even ask for help is so important to realize that you don’t have to know everything and you can use your resources and your network to get insights and give you a different perspective. Because we can become so myopic on thinking, we only see one way out of this. We always have other moves. Let’s talk about your big point about be careful who you accept wisdom from and how you choose your mentors and advisers. Not just by how successful they’ve been, but are they a cultural fit with your philosophies. Can you speak to that?
Something that I’ve learned by just interacted with different people, and there’s a lot of successful people out there, according to the world standards of what success is. A lot of people with a lot of money out there. But, that doesn’t necessarily mean you want to learn from them how to become wealthy. A lot of people say that’s the objective of entrepreneurship, is I want a lot of money.
The challenge is the way you get that money in the end will determine the quality of your life in all other aspects. If you’re learning from someone who has a bunch of money, has been divorced three times, works 80 hours a week and has for the past 30 years, is that the way you want your life to look? Is that what kind of money you want to have?
[Tweet “Journey to entrepreneurship: Be careful who you take wisdom and money from.”]
Because money can own you or you can own money. If you take wisdom from those who have learned how to become the slave to money and they have a lot of it but they’re still a slave to it, that’s no life to live. Just look to the advisers that have a life that looks like the life that you actually want to have. Not just in the sum of money that they have or the make and model of their car. Look at his family, look at their relationships, look for the deeper things in their life because those are the things that really has staying power.
I love that. That’s so important, because otherwise you’ll burn out. If you don’t have a balance going on and a reason to have some other life outside of what your business is, people think, “I’ll just put that all in the back burner and they’ll still be there when I finally become rich and successful and then I’ll be happy.” You have to figure out a way to be happy during this whole process.
I think what ends up happening is they say, “Once I’m rich, then I can take …” I think what happens is that other parts of them atrophy. By the time they actually get rich, that’s the slavery, that’s all they have. Suddenly their lives are about building and growing. As Dr. Seuss says, the biggering and biggering and biggering. That’s what it’s all about at that point and they’ve lost the context, they’ve lost the sensitivity to the other things that are so much richer in life.
As you get more and more successful in this success that you now have, how do you find the right people to join your team that have this mindset?
[Tweet “Journey to entrepreneurship: Right experience, soft skills, and cultural alignment.”]
It adds a third variable in any interaction when I’m evaluating people for the team. They have to have the right experience, they have to have the right soft skills. The third thing they have to have is the right cultural alignment. That’s really difficult to find all three things.
Let’s take a little deep dive into each one. Obviously, the experience is pretty obvious. You need somebody to be a creative director or know technical stuff about eCommerce since that’s what you do for people and you want them to prove that they know how to do that. Tell us what you mean by soft skills, is that emotional intelligence?
Journey to entrepreneurship: There’s things that you learn through osmosis and through relationship and culture, you learn those soft skills.
By soft skills, I mean things like their ability to communicate effectively, to write things down in a way that’s coherent. Maybe this extends somewhat from a culture, but just to be able to like be generally responsible for showing up on time and showing up in meetings when they say they’re going to and scheduling their time. Just some fundamentals life skills, time management, communication, those kinds of things that you don’t go to necessarily a class to learn them. There’s things that you learn through osmosis and through relationship and whatever the culture that’s around you, you learn those soft skills.
Let’s talk a little side note, side road there because I think what you said is so interesting. Just about the basics of being on time. I had another guest who wrote a book about managing millennials. That’s anywhere between 16 and 36 at the moment. Some of the baby boomers are having so much trouble managing millennials because they have a different mindset of what they think about work.
If you don’t tell someone what your expectations are that they show up on time, then they’re going to think it’s loosy goosy. Then you can’t get mad at them if you haven’t been very clear at the beginning, “This is what we need from you.” Do you have any insights as to how important it is to set the tone and expectations right from the get-go or even before you hire someone to make sure that’s a fit?
That’s actually really important. I feel like when you’re in the interview process, you’re not just evaluating whether they are right for the team. You’re actually setting context. You’re setting the table for what and that the foundation for what it will be like, provided they actually do get selected and join the team.
Setting those early expectations around, “We expect you to be personally responsible.” That’s like tying your shoes in our organization. It’s a fundamental. You got to tie your shoes before you run the race. Just being able to manage your own time, to communicate effectively, these are the tying the shoe things in our organization.
[Tweet “Journey to entrepreneurship: Tie your shoes before you run the race.”]
I love that. You have to tie your own shoes before you run the race. We’re going to tweet that out. That’s great. Now, let’s talk about your culture alignment. How much time did you spend defining what the culture was so that you could decide what you wanted to have and what makes your culture unique?
The culture, my understanding of the culture and what I want to design and create into the culture, has been an evolution over a number of years. Early on, I really felt like I have this vision for what I want the culture to look like. I’ve had a lot of jobs and I’ve experienced a lot of different cultures. I didn’t like any of them that I experienced, there’s a lot of things I didn’t like. I had this thing I wanted to create. I built out a presentation and I built out a vision for it. There’s a lot of good to that.
I was able to articulate it and express it. It attracted people. However, what I learned through experience is that you can’t just write down the culture you want to have but if the people in your organization that make the culture what it actually is. You can write it down and that’s what it theoretically is.
Journey to entrepreneurship: Your culture actually is the sum of the interweaving of the thread of all the people in your organization and what they make it.
What your culture actually is, is a product of the sum of the interweaving of the thread of all the people in your organization and what they make it. You can still design a culture. “This is the culture I want,” but then what you have to do is you have to go out and you got to find people that don’t just look at the cultural state and go, “I like that. That’s great.” But rather, you find out, are these the kinds of people that are going to contribute into this culture? Do they bring this culture to the organization?
Because that is the only way to really make it happen. You can guide a little bit here and there, but ultimately, the people you bring together have to make the culture what it is. It’s really all about that culture alignment, making sure you don’t just like the culture but you align with it. You’re going to be a contributor to the culture. I tell people, I may be in a position where I’m the last line of defense for the culture. But all of us, all of us need to be culture bastions. We are the propagators of the culture, every one of us.
[Tweet “Journey to entrepreneurship: We are the propagators of the culture.”]
Wow. That’s really walking your talk, isn’t it? Giving a people a sense that the tapestry needs all of the threads to make it work. When you make people feel like they’re part of something, acknowledged and needed, then you get their passion to work in all kinds of situations. Because they love that. That’s what people are looking for much more than just a paycheck, is a sense of acknowledgement, appreciation and contributing and making a difference.
I think, if you can create a culture where that is the thing that people want to come to work for, it gives them a reason to get up in the morning, gives them a personal sense of pursuance, you’ve really done something well. My suspicion is that’s the reason you’ve been so successful now, been able to achieve the revenue you have.
[Tweet “Journey to entrepreneurship: Revenue is a by-product of what really matters.”]
I agree. Revenue and all, these are reflections. They’re by-products of what really matters. To speak to what you’re saying, all that I have done is I really try to be careful to honor each person that I’ve interviewed. To evaluate, is this going to be good for them to come into this environment? Are they going to be able to contribute to this environment and how are they going to thrive in this environment?
I want each person that comes into the organization to be able to be fully themselves, to not have to check part of themselves out of the door when they come in. Speaking of millennials, I think this is so important to capturing the hearts of millennials. I look at the millennial generation and there are things I really appreciate and things that I think are things that they struggle with. That’s true with any generation.
Journey to entrepreneurship: Millennials really thrive on and demand authenticity and they thrive on being independent.
One of the things I love about millennials is that they really thrive on and demand authenticity and they thrive on being independent in their thinking and really valuing, “I want to be able to express myself and be who I am.” I love that.
I want to make sure to protect that, because when you do that and you make sure that you got the right people in your organization that they can just be themselves and it’s going to work, suddenly you no longer have to draw passion out of them. You don’t have to draw it out of them. It will naturally organically come from them because they’re just being who they are. You don’t want to force it anymore, you don’t have to draw it anymore. It comes from their core. It makes everything a lot simpler.
I’ve never heard anybody express it quite like that. If you have somebody who’s just “phoning it in” and doesn’t get to express themselves and has to feel like they’re a robot and has to tone down their personality and their vision and their comments because they’re not appreciated or wanted, then there’s no way there you’re going to be passionate about your vision.
If you encourage them to be authentic so you don’t have to be one person at work and one person off work and just looking at the clock until you can get off work to be yourself, then they’re passionate about their whole life and passionate about their day. They’re probably not going to leave at the next offer that’s just slightly more money because they’re motivated by more than money.
I can speak from experience, watching this happen. First of all, the retention level at Classy Llama, and now Nucleus Commerce, it’s the second company I started, is just phenomenal. People stay. I really believe it’s because they are able to be fully themselves here. The second thing is, we haven’t compromised on our team growth.
Journey to entrepreneurship: When there’s an opportunity to grow, we don’t get loose on our standards in order to take advantage of the growth opportunity.
When there’s an opportunity to grow, we don’t get loose on our standards in order to take advantage of the growth opportunity. Rather we limit our growth to how quickly we can find quality people. This is wisdom you can find from Jim Collins and others.
I’ve seen the benefits of it in than people want to stay because they know that they’re being honored in who else is coming into the environment. They get to work with great people and they get to be fully themselves in the space that they’re in. That makes a space that they want to stay in.
One of the big costs that’s hidden and really doesn’t get itemized is the cost of attrition and turnover. It’s hard to put a dollar amount on it. When you have to start from scratch and retrain somebody and get them to start developing relationships with the clients from the get-go, that’s a big hit on your productivity, which affects your bottom line. If you can attract and retain good people, that is gold right there. That’s a big, big part of being successful, financially, emotionally, every way.
I think that a lot of times, there’s too limited a view on the compounding effect where you can look at money and you say, “If I got a 5% return on money every year, after 20 years, it’s way bigger than 100%,” which is 5×20. It’s true of time. A lot of people don’t realize that time is a resource that compounds. How you invest your time now and the return you get now is something that can compound.
The other thing is people. The investment you make in people and in building that team. If they stay with you and the team stays together, it’s like a sports team. The longer a sports team stays together and stays united, the more effective they’re going to get because they just start learning each other.
[Tweet “Journey to entrepreneurship: Invest in people and in building your team.”]
They learn the game better, yes. But they also learn each other better and that’s strength of the fabric, as we’re calling it, grows and you become more effective together in what you’re doing as well as more effective as a team. I can’t underscore how powerful that is.
I watched these private equity companies come in and they buy up other companies, or even public companies, whatever. They come in and they buy in, they buy these companies and they insert, they’re impose their culture on them. I see all of the good people scatter. People are falling off left and right, they’re quitting. I’m going, that company that bought that organization doesn’t understand that the most valuable thing in that company is leaving, and it’s the people.
Let’s talk about also the importance of saying no to the wrong client as well. You can’t just take any client even if you need the money because that can be a nightmare as well. A drain on your time, your employees’ morale and end up maybe even costing you money. Have you had that experience?
Journey to entrepreneurship: You have to draw a line and say, “These are the ones we’ll take and these are the ones that we won’t.”
Yeah, many times. Honestly, that flows from that same thing of we have standards and we stick to our standards. Our culture standards and who we work with as a client early. Especially early, it’s just so painful because you’ve got only so many opportunities and you need the revenue. You have to draw a line somewhere though and say, “These are the ones we’ll take and these are the ones that we won’t.” I think I can say confidently that in my business, I’ve never turned away a client and regretted it. I have many times accepted a client and regretted it.
There we go. There’s the line, everybody. You never regret saying no but you’ve often … We can say yes and regret it. It’s very much like dating too. I think people respect you if you’re not desperate and say, “Look, this is who we work with. This is who we’re for, this is who we’re not for and we’re not so desperate that we’re just going to take anybody’s money.” It’s not a dictatorship. When you work with us, it’s a collaborative situation. We may not be a good fit for you. It’s not just a one way street of you deciding whether you’re going to hire us or not.
I think a lot of it has to do with the willingness, where people want success before it’s time. When they’re engage with these different clients, they’re saying, “I can accept these fewer clients and I can live on a really lean budget and rough it for a little bit longer in order to be principled in who I am expecting as clients.” Or, “I can say yes to more and try to grab that success before it’s time.” It’s just that lure of impatience. Let success happen when it’s time. You focus on living by the right principles and the right standards and doing things the right way and success will come when it’s time. You just do the hard work, success will come when it’s time.
[Tweet “Journey to entrepreneurship: Do the hard work. Success comes when it’s time.”]
Nice. Let’s talk about who your ideal clients are, both for Classy Llama and Nucleus.
Classy Llama typically works with companies that are generating, let’s just say $1 to $50 million in online sales. They’re looking for a partner relationship and they’re focused on or they’re needing help or wanting to build on the Magento platforms. We’re focused on that piece of technology, that’s a key niche for us. We’ve been building on the Magento platform since it came out in early 2008. We have focused on it, we pushed everything else off our plate and focused exclusively on it since being gold partners with Magento, which is the highest level of partnership you can have.
Anyway, we’re deeply invested in Magento, we know it very well. We look to help. It’s established eCommerce companies or well-funded, sometimes well-funded startups as well, get going in their eCommerce businesses on the Magento platform. The Nucleus Commerce actually serves the same market. It just does it in a different way. We sell software extensions that help people specifically that are getting on Magento 2.0, which just came out recently. We’re one of the early providers of additional software that enhances the functionality and offering of the Magento 2.0 platform.
Fantastic. I love how much symbiotic relationship there is there, that the extension of the second company totally fits the knowledge you learn from the first. Is there any book that you recommend for our listeners to read about life or business that you found specifically inspirational or helpful?
Good to Great: Why Some Companies Make the Leap And Others Don’t
Two books. One is Good to Great by Jim Collins. It’s got some really great fundamentals there. What I love about it is it’s all data driven. There’s a lot of things that are data driven. Like, “That’s data driven but it doesn’t really smack of true because you can make any data look like anything.” I read what he found and I feel like this was a true blue, data driven exploration because it’s found a lot of unexpected, surprising truth that isn’t popular.
When I see something that’s not popular, and I see the data behind of them like, “Okay, that’s not popular and I know it’s true, and so I trust it.” I really believe they did good work with the Good to Great book.
I would actually offer up for young entrepreneurs that are just getting started, I’d offer up a book that I wrote called Finding Truth at the Bottom. It really outlines three keys to being effective, to being productive. It also really tries to combat certain common paradigms that I think are really confused about what the expectations are, around what it looks like to be an entrepreneur, to run a business.
Finding Truth At the Bottom (Leadership In the Round, Vol. 1)
I just think there’s some common held lies about what that means. This book really tries to combat that. It’s a simple read. It’s relatively short. I know a lot of people have really gotten a lot a value out of it.
Fantastic. How can people follow you on social media? What’s your Twitter handle, all that good stuff?
My Twitter handle is easy. It’s just @KurtTheobald. I’m on LinkedIn, /in/KTheobald. Those are the two key interface points on the business front that I use.
Fantastic. Kurt, it’s been a pleasure having you share your wisdom of how you’ve been so successful. Not just in revenue, but creating a culture that attracts and retains the people who not only share your vision, but contribute to it.
I appreciate the opportunity, John. I hope I helps a lot of people.
Fantastic. Thanks again.
Thank you. Bye.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
Classy Llama Website
Nucleus Commerce Website
@kurttheobaldon on Twitter
Kurt Theobald on Linkedin
Finding Truth At the Bottom by Kurt Theobald
Good to Great by Jim Collins
Crack The Funding Code!
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John Livesay:
Welcome to The Successful Pitch podcast. Today’s guest is Mark Bidwell. Mark is an innovation expert. He just recently closed a series B round of $15 million, and shares his secrets on how he does it. He said, “The key to getting an investor to say yes to you is to not be intimidated by them, and to ask them how you can help them.” It’s a complete mindset reversal that I think you’ll find very interesting. He said, “Investing is a human business. You need to ask what difference can I make? Is this the right investor for me?” And remember that trust has to be mutual and the “why” of what you’re doing is equally important, if not more so, than the “what” of what you’re doing.
The interview begins in 45 seconds right after this information on how you can get funded fast.
Are you a founder struggling with your investor pitch? Do you need warm introductions to the right investors to get your startup funded? Do you need a funding road map to get you there fast? All of this and more can be found in Crack the Funding Code. Join host, John Livesay, and Judy Robinett, bestselling author of How to Be a Power Connector and board member of Illuminate Ventures, on their free Crack the Funding Code webinar. Simply go to judyrobinett.com – that’s J-U-D-Y-R-O-B-I-N-E-T-T dot com – and click on the webinar tab to see how to tap into their network of investors from around the world. There’s a link in the show notes as well. You’re only one click away from getting funded fast.
Hi, and welcome to The Successful Pitch podcast. I’m thrilled to have today’s guest, Mark Bidwell, on with us because Mark has so much to tell us about innovation, fund raising, pitching. He actually has his own podcast called The Innovation Ecosystem podcast. He spent much of his 20 year career seeking out people and resources to help them innovate and grow businesses. He’s worked at BP, The Hay Group which is part of Korn Ferry, and most recently, Syngenta, where he led the creation and development of a $2 billion specialty crop business unit. He learns from other people’s experience, and with his Innovation Ecosystem podcast, he brings fresh insights and perspectives and tools that you can use to get yourself funded fast. Mark, welcome to the show.
Mark:
Thank you very much, John. It’s a great pleasure to be here.
John:
You are calling in from?
Mark:
From Switzerland.
John:
Switzerland. I love it how global the world has become. Mark, I always ask my guest to take us back to what made you decide to pursue your career. Did you know in college that you wanted to get into business and investing and raising money for startups?
Mark:
Well no. I didn’t actually. I’m an anthropologist by training, and the reason I studied that was because I just love reading books about different cultures and explorers and travelers, and I found once I graduated that it didn’t really qualify me to do anything. So, I followed my father into business. He was in the food business, and I worked for his home delivery supermarket startup in London. This was in 1990, and from there I got approached by British petroleum and I thought startup is good but actually, to get a decent graduate trainee program under my belt with a large corporation, which BP was and still is, would have made a little bit more sense to me. So I joined them, was there for three years, and then I found myself in consulting because consulting, I think is a great way of learning, getting a lot of exposure to a lot of industries and lot of disciplines very very quickly, and I really enjoyed that. That’s where I started getting interested in innovation, business model innovation, because the consulting industry as a business or as an industry isn’t particularly an exciting business model, because to make more money, you either have to work harder or charge more, and you reach a ceiling on both of those.
So I got involved in thinking about what other assets did this company, The Hay Group have that they could make available to their clients, and I’ve found myself launching internet business in the mid 90s in Europe which was quite hard work back then. It’s hard to think of it but it was — 20 years ago the world was very different, and that got me into thinking more about business models, more about technology. I ended up going to work for the CEO in Philadelphia to help drive this program and finally, then, family came along and we relocated from the US back to Europe to Switzerland, and I joined Syngenta to open up their biofuels business. That one thing led to another. I was in the right place, the right time, and continued to help innovate in a number of different roles. So I guess, I’m an accidental executive, to be honest with you John. It was never really my plan but I was continually being offered really interesting opportunities, and that kind of took me to a place where at the end of last year, the end of 2014, I decided there weren’t the kind of opportunities available in that company any longer. So I thought now is the time to go out on my own, that’s when I left set up as an entrepreneur. I became chairman of one company and on the board of another company, and I’m building a business related to, but not specifically around Innovation Ecosystem. But really, helping companies and individuals become more entrepreneurial essentially.
John:
Wow. Well, let’s take a deep dive a little bit, if you don’t mind, because it’s such a fascinating story. This $2 billion Syngenta. Tell us about what that was like because it’s being an intrapreneur, it sounds like to me you’re within this big corporate structure, but you’re being very entrepreneurial within it. Is that accurate?
Mark:
Yeah, absolutely. Absolutely. Syngenta is the largest agri business in the world, and I was fortunate enough to — in the previous role to that, to leading the specialty crops unit, I was looking after a portfolio of products which were coming off patent. I was lucky enough to have a great team and a couple of quite good ideas that we were able to implement which resulted in some really significant value creation for shareholders. Because what normally happens when a product comes off patent is that the price collapses overnight, or in agriculture, it might take a couple of years, but in certain pharmaceuticals it collapses overnight, literally, as the trucks leave the Israeli manufacturing facilities at one minute past 12 full of your product. It’s an extraordinary industry. Now, in our business we are able to change that dynamic completely with a completely different strategy, related to the characteristics of the product we were looking after. As a result, we are able to raise prices for two subsequent years, pack and fill, which was unheard of in the industry. As a result of that, I was lucky enough to be offered an opportunity to form a new business unit and grow that out to a — well, it ended up as about $2.3 billion dollar business unit. So this was servicing or looking after, probably 40 different crops around the world, growing in every part of the planet, essential. It was a hugely exciting challenging scary role for four years. It was a roller coaster, but I learned. What I was able to do John was to take all the previous experiences of creating the conditions for innovation, and apply them across a team of many hundreds of people around the world. We are fortunate enough to generate some quite exciting results as well.
John:
It’s amazing. So, were you solving a particular problem of world hunger with all these crops? Or what was it that caused that kind of incredible growth?
Mark:
Well, I guess what we did was we thought far more about the grower, and what their issues where, and what their problems were, and a lot of these growers were based in subtropical or in tropical environments where they were — In agriculture, I think it’s the largest employer in the world, agriculture. I think it’s something at 17% of the world’s population are directly or indirectly employed by agriculture, or supported by agriculture. A lot of growers — you come from the US, there is some fantastically wealthy industrialized professionalized growers, and they reckon there’s about 100 million professionalized growers around the world. But this something like 500 or 600 million smallholders who are living — not quite hand to mouth, but whose family is in their — extended families rely on crops. So, what we did was we look and try to understand, what are there issues? Their issues really are not often how do they grow their crop, but it’s how do they market their crop. How do they fund the investment in their crop, how do they actually ensure that long-term, they have a business so they can hand over to their children. We took a very holistic view and we are able to then look at what’s available in the market and pull together a number of different solutions, which could be financial solutions. It could be traceability solutions, it could be new business models, and bundle them around our core products, and that enabled us to grow our market share, as well as create more value for the overall value chain.
John:
That’s such a huge takeaway, is you look at something and figure out a way to see it in a different angle, sort of an innovative way to look at something to solve a big problem, it seems like to me. Now, you’ve taken that skillset and that experience and have applied it to other things. Since this is all about how to make a successful pitch and one of the things investors look for is obviously, rapid growth, can you talk to us about your — and congratulations on this 15 — was it billion series B that you’ve just closed? Or 15 million I’m guessing?
Mark:
15 million, yeah. This is in agriculture. It’s an architect company based in Canada, and what we looked at, there are number of different ways that you can look at this industry, and I looked at it with the management team, and we figured out that this is what — the most compelling where I think about this is that as a platform play. So this company and the technology that we have enables other organizations or other products become far more efficacious and successful and perform far better in the field, with an ingredient if you like, which is the technology. So it’s almost like in Intel Inside, and if you look at it that way, you’re able to tell a story to investors which is around — this isn’t about how much product we can actually sell to farmers, but it’s about — actually we can enable a whole new category of products to become far more mainstream in the world of agriculture, literally around the world but starting in North America and moving very quickly to Europe.
So it’s using a different lens, and I think what we did was we look at the pharmaceutical industry and said, “Look, this is really where the biosimilars were ten years ago, which are now a huge business for a lot of big pharmaceutical companies. But ten years ago, they were just a very very small subsegments. So we used another analogy that investors could understand and say, “Look, here we are at the beginning of this curve in this industry.” By the way, this is the $70 or $80 billion industry and there are many companies like ours out there at this stage with this technology, with this potential in front of us.
John:
Well, you did a couple of things there that I want to really summarize for the listeners, which is when you’re pitching, no matter whether it’s a seed round, a series A round, or in this case a series B round for 15 million, you need to paint a picture and not talk about just numbers and how something works, but instead use analogies, see things through a different lens and then talk about how big the market is. What you’re doing is describing something that’s very disruptive, it sounds like to me, but when you talk about it almost being like Intel, right?
Mark:
Yeah absolutely. It does. When you got a huge market opportunity in front of you like we have, it is important to get people of a glimmer of how they can actually take advantage of that in a leveraged way. Because to build out a really significant organization by — with the direct salesforce, with all the standard marketing, it’s going to take an enormous amount of resource. So this is about finding a way to accelerate that growth in scale, like growth leveraging some of the other dynamics in the industry that potentially, some of these investors weren’t necessarily aware of. Because most investors in this space had been looking at drones, they’re looking at precision agriculture, looking at water, and very few of them are actually looking at this space. So they have to bring this space into mainstream and get them a glimpse of how it could grow into something significant, was really what we — and I say, we, that the management team in particular, the CEO did very well to close this funding, and it was probably 40% oversubscribed. So we were very happy with how it developed.
John:
Wow. So you really became irresistible and you had a multiple fear of missing out thing happening, so you were able to select which investors you wanted to work with, right?
Mark:
Absolutely. Now, you and your listeners will know, it’s not easy. It’s getting the first — the lead investor which takes a lot longer than one hopes, but once that group is in place, then a number of others do fall in partly because of the fear of missing out, partly because they don’t want to do a lot of the work associated with being a lead investor, and partly because you get developing more confidence and you are able to communicate with more confidence one you got the first anchor tenant on the term sheet essentially.
John:
Now, were you involved with the previous rounds before you got to the series B?
Mark:
No, I wasn’t.
John:
Got it. Okay.
Mark:
So this is the first institutional round essentially.
John:
Oh okay. Got it. So do you have any tips for the listeners on how to get that first lead investor, with a pitch that makes them feel willing to be the first one? Are there incentives to being a lead investor that you give?
Mark:
Well, I think it does come back to two tips I’ve given. Firstly, be prepared for a lot of knockbacks. So, it’s rather like interviewing for a job I guess. I haven’t done this for a long long time, but I do remember when I did it, that the first few interviews are an opportunity for you to polish your message and to get comfortable and confident, and to hit your stride. I think it’s the same with raising money, you’re going to get a lot of pushbacks and people, for whatever reason, are not interested in you either because of timing, either because of that sectoral focus, either, or because they’re looking at different bite sizes or different stages. So, be prepared, be resilient, be prepared to expand a lot of shoe leather and dialing for these leads.
Then I think the second things is, understand what they’re looking for. So it’s not about you, it’s about them and their issues and how can you actually meet their needs, and give them something that they genuinely want. Because I think, often it’s going in and selling too hard without actually listening, and there’s a reason we’ve got two ears and one mouth, right? It’s important to remember that.
John:
Yes, so it’s all about putting yourself in the investor’s shoes, having empathy for them as opposed to just saying what you need all the time. Is that accurate?
Mark:
Absolutely.
John:
Some of that has to do with your own due diligence, and doing a deep dive on that person’s LinkedIn profile, what are the investments they’ve made, any potential people you might have in common, things like that I think really help get the rapport going, get the trust going which is all needed to get someone to take a leap of faith with you, right?
Mark:
Yeah, absolutely. It’s a human business at the end of the day, and it’s them feeling comfortable with you, but also thinking something very subtle happens here unless you ask them at the beginning. Not necessarily using his words, but unless you are demonstrating an interest in what their needs are, then you can come up with the most compelling pitch, but there’s always going to be something in the back of their minds saying, they’re not really interested in me, they’re just telling a good story. So, I think it’s really important to somehow rather, demonstrate a level of empathy and interest in how can you help them, even though obviously, the dynamic is exactly the other way around. These are — particularly they’re saying, across from that a well funded prestigious venture capitalist, there’s a lot of intimidation going on on the relationship because they feel they hold all the cards. But I think, as you go in looking for money, have the energy that says, “I want to actually help this person.” If helping them means that they’re not going to invest in me, then that’s okay, and it’s very very subtle, but my personal belief is this is a hugely important distinction because it changes how you approach the meeting, how you hold yourself in the meeting, how you actually engage with them, both of them at a physical level, but also the sublinear level as well. Do I make sense?
John:
Oh my gosh, Mark. I love what you just said. No one’s ever said it quite like that. What I hear you saying is you need to think of yourself as a brand and they’re a brand, and you’re equals, that you each have something of value. You may not have the same amount of money in your bank account, but as far as intelligence and integrity and character and vision, you have something to offer to them. I’m guessing that what investors are looking for, in other words, how you can help them is by giving them an incredible opportunity and a return on their investment, in a way that they hadn’t thought of. Will that be something they would want?
Mark:
Absolutely. Let’s be honest, any investor in a fast-growth company is a difficult journey between the management team and the investors. It’s not going to be easy. So, you want people who are locked in for the journey and who have that level of mutual trust. A bad outcome is that you — for whatever reason you raise money, but there isn’t that level of trust because the first opportunity is going to blow up and that’s bad for everyone. So again, a lot of this is how you approach the meeting and it’s got to feel right. It’s not a marriage, but it’s a think about it as a long-term relationship and I think it’s going to make life a lot easier.
John:
Oh that’s fantastic. Now, you also have some insights about pitching for money from large corporations. Is that right?
Mark:
Well, yes. So in my last role with Syngenta, I was looking after a lot of new products and new research and development compounds that cost anything up to a quarter of a billion dollars to get to market. Often they require significant investment in infrastructure and assets. So I kind of got, quite a lot of experience taking big projects with many hundreds and millions of dollars of capital in front of the executives, the leaders, and the boards. So even though you know the individuals and you got a better sense of the politics and the relationships, it is, in many respects the same process. It’s being totally clear in what you want out of the conversation and what their needs are in the extent of which you can match the two. I think the other piece here is that it — I think the “why” is really important as well as just the “whats.” So I think it’s kind of trying to connect with how to paint a picture of what’s possible here or longer term beyond the financials is quite a useful way of thinking about it. Because it makes the conversation a little bit less dry and a little bit more sort of engaging emotionally, because at the end of the day, these decisions for public companies are big decisions and people need to feel they can trust you as an individual.
John:
I love that you said — we’re going to tweet that out. “The why’s is equally important to the what.” Right? So it’s important to have your numbers but you have to paint a picture and get people a sense of why this is important to you and why you’re passionate about it, right?
Mark:
Yeah, absolutely. The Simon Sinek TED talk, which is all about the importance of the why, and it’s easy to forget this because we’re all business people who go and then we talk about numbers and stuff, but in actual fact, comes back to what I said early on, if you can engage people of this sort of, emotional level and get them to understand why you’re doing this, I think is far more powerful than the what. It’s a precursor of this even for the what, but it is actually far more powerful. It moves people John.
John:
Yes. So that begs the question which was, what is your why to start The Innovation Ecosystem podcast?
Mark:
Well, it’s a really good question. So, I’ve been doing this kind of work in large organizations for almost, well probably over 20 years actually John. I’ve made lots and lots of mistakes, learn a huge amount, I got a few scars on my back, but I began to figure out how to do this and I figured it all out for myself in the sense of I didn’t know an overall resources, no go-to people, no places where you can educate yourself in this stuff. Because it’s not easy and it depends on the organization you’re in. So coming out of the corporate world, one of the things that I was very keen to do is to make available these kinds of resources, these kinds of insights, these kinds of experiences to people who are doing these kinds of jobs in organizations as I was. So entrepreneurs in large mature industries with long product life cycles, how can you actually help them move the needle, have an impact beyond what they’re expected to do in their day-to-day jobs because there’s a lot people, particularly as you got millennials coming into the workforce, who have been wanting to leave their mark on organizations. So they’re looking for purposeful work.
So I really wanted to resource these kinds of individuals because there’s a lot of people out there with insights and distinctions and materials. So that’s my why, and so I teamed up with a friend of mine who’s got a business, providing information to corporations and lots of links with business schools. What we’re doing is we’re interviewing a number of thought leaders in the area of innovation, change, leadership, which one of your previous guest, Guy Spier, is an interviewee. Now he runs a hedge fund, but we’re also interviewing a number of high performers, so a hedge fund manager, a concert pianist, we’ve got an explorer on, and then we’ve also got some CEOs and some executives and entrepreneurs, all talking John, about innovation, change and leadership. Then what we’re doing, Europe is not quite as advanced as North America in the podcasting world, so we’re working to create a number of digital assets, so that people can consume this not just verbally of the podcast, but they can download and read transcripts and that they’ve got nice designs. We’re also creating videos of the podcast as well, so people can consume them in multiple ways, such that, if they’ve got a need for this, there’s not a technological barrier, if you like.
John:
Well, it doesn’t surprise me that you’re being innovate in the podcasting world and bringing things to Switzerland and Europe that haven’t been done before by incorporating not just the audio, but the transcript and the video. Good for you. Let me ask you what about your speaking, because I know you’re an incredible speaker. I’ve watched some of your talks online on your website. What are your favorite topics and who’s your ideal audience to speak to?
Mark:
Well, and thanks John. It’s not something that comes easy to me, but I’m getting a bit more practice. What I like doing is, I’ve done a number of talks to organizations and industries that are mature, slow moving regulated. They could be banking, and it could be a banking company of a bank, it could be a glass manufacturer, companies that have similar characteristics to the agricultural business that I came from before. Just helping them understand the journey that we went on over the four years, building out this $2 billion business. One of the relevant topics that they can take away, what are their take aways, and then we’d worked with the leadership teams and start thinking about other certain things that they, as leaders are doing that they’re getting in the way of innovation for instance. So that’s one area.
Then the other one is entrepreneurship. I’m doing a number of talks and I’ve well have given a number, by the time this goes out to your audience on what is a mindset of the entrepreneur? How do you need to think? How do you need to articulate your purpose? How do you need to make decisions? Then secondly, as an entrepreneur or as a leader of entrepreneurs, how do you actually want to create the space for your team to come up with innovative ideas, to explore new concepts in a reasonably safe environment without the fear of failure, which characterizes a lot of innovation in large organizations. So those are two topics, if you like, that I’ve got a lot of energy around.
John:
That’s fantastic. This whole concept of helping people get over the fear of failure whether you’re an intrapreneur or entrepreneur is desperately needed. I’m sure it’s a topic that has everyone riveted to listen to. Mark, what inspires you? What kind of books do you like to recommend to listeners?
Mark:
I do read quite a lot actually John. Let me think. I’m just looking around my office at the moment. I guess, biographies, first of all. The first business book that I ever read was Sam Walton’s Biography, Made in America, which actually oddly enough, I took that book and reread it before I developed the post patent defense for this product I was talking about. Because the way he thinks and the way he executes and the way he identifies his core, a source of differentiation was fundamental for how we transformed this product. So biographies, I read a lot of books on, I suppose, personal development and professional development books. One of the great ones that I’ve read the other day was this book by Cal Newport called Deep Work, which I found really interesting particularly in this always on, overscheduled world that we live in. This is about how do you actually start focusing and do really good work in a way that enables you to really differentiate yourself from the vast majority of people who have multitasking, thinking they can get stuff done. The signs is very clear now. We are not wired for multitasking and you do need to create space and focus to actually dig into stuff, to deliver deep work in a way that is value adding. So those are some examples, but yeah, I’ve got probably more books piled up that I need to read, surrounding me, then I have in any point of my career.
John:
Well, I think that Deep Work is a great suggestion. We’re going to put all your recommendations in the show notes for people to be able to click and buy the book, or look at it. This whole concept of multitasking being a myth is another great message to put out to people. If you want to be productive and focused, pick one thing to get done before you go on to try to complete a bunch of other things. Mark, there’s many ways that people can follow you on social media, and you have multiple websites. Tell us all the ways that people can follow what you’re doing, subscribe to your podcast, et cetera.
Mark:
Well, I’ve just put up a new website which is markbidwell.com, and then the podcast is innovationecosystem.net. By the time this goes out, I think a book project that I’m working on will be pretty mature as well, so hopefully, there’ll be a number of resources that beyond the podcast interviews, that people will be able to get access to and take advantage of, and I guess most importantly, come back with some feedback to us. But I’m also on LinkedIn and I’m on Twitter as well.
John:
What’s your Twitter handle?
Mark:
My handle is @markehb and the other one is @innovecosys. I’ll give those both to you so you could put them in the show notes, so that people can spell them correctly.
John:
Okay, fantastic. Well Mark, it’s been a pleasure. I can’t thank you enough for giving us your insights on how important it is to position yourself from the standpoint of what can you do for the investors instead of being someone who’s just asking for something, and really focusing in on building trust and painting a picture. Thanks again.
Mark:
Not at all John. It’s has been a great pleasure and I love your podcast, and I’m very pleased that we’ve managed to meet, and let me know how I can help in any way.
Thanks for listening to The Successful Pitch Podcast. If you liked the show, please go to iTunes and write a review, and encourage your friends to write reviews too. It really helps get the word out.
You know, people say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest but when it comes time to write the check, they don’t do it. So, how do you get people to say yes and then follow through? Visualize yourself on the left side of a riverbank and you have to cross the river and on the other side of the river is where the funding happens.
So, first, you make up your idea and then you make it real and then you make it reoccur. Once you start dipping your toe into the water to get to funding, that’s where I can help. I get you across that river faster than you would on your own with a lot less frustration than you will get when you hear a bunch of no’s and you don’t know why. So, if you want some help getting funded faster with less frustration, go to my free funding webinar, sellingsecretsforfunding.com/webinar and sign up and get in depth information on how you can get funded fast. Thanks.