TSP036 | Dorie Clark – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Welcome to The Successful Pitch podcast. Today’s guest is Dorie Clark. The author of Stand Out and Reinventing You. She’s consulted and been a speaker for both Google, Microsoft, and a contributor at Forbes and The Harvard Business Review. She’s also been a former presidential campaign spokesperson. She is a branding expert according to the AP and she gives us great insight as to what it takes to stand out and for all the listeners who are wanting to know how to make their pitch stand out to investors, she gives amazing insights about how to build your network, your audience, and your community, so that you will be successful if you do that and investors will be sharing your pitch, because you have gotten it so great from using Dorie’s tips that you will be successful. Enjoy the episode.

Welcome to The Successful Pitch podcast. Today’s guest is Dorie Clark who is a branding expert according to AP. She’s written not one, but two books. One is called Stand Out, the other one is called Reinventing You. She consults for companies like, oh, I don’t know, Google, Microsoft, Yale. She’s also a contributor for Forbes and Harvard Business Review. She teaches at Duke school and she’s a former presidential campaign spokesperson. My goodness, what an impressive background. Dorie, welcome to the show.

Dorie Clark:
Thank you so much. It’s really fun to be talking with you.

John:
You know, I always love to hear about the concept of branding and I was listening to one of your talks where you said that your personal brand is, “your career insurance.” Which I think is such a great way to think about that, but before we dive into that, I want you to take our readers and listeners, if you will, back a little bit; because sometimes people read the transcript and not listen to the podcast; how did you start out? What made you come interested in branding and how did you write your first book and all that good stuff?

Dorie:
Well, I got interested in branding essentially because I needed career insurance and I came on board too late and so I started to learn about it and to try to help other people figure out they could a little bit ahead of the curve as compared to where I was. I started my career as a political journalist and I was about a year out of grad school, I had been working as a reporter for a year and fortunately, I had entered the profession at a pretty bad time.

It was right around the tipping point where the internet started to erode the newspaper’s profits, which had been very fat for a long time. I mean, newspapers, we forget now, but there was a very, very lucrative business and all of a sudden Craigslist was just going nuts taking everybody’s business and so my newspaper laid me off and it was during a bad recession.

It proved almost impossible to get another journalism job, so I really had to reinvent myself and try to figure out a new thing that I could do and I realized that it would be a heck a lot easier for me or for anybody else if you have the kind of really strong brand that has developed so that people are seeking you out specifically and for me the true test – it’s not, you know, are you immune from vicissitudes or layoffs or whatever.

I mean, you can’t control stuff. You can’t control what’s happening at a macroeconomic level. You can control necessarily what’s happening at your company. I mean, the poor people at Enron or Arthur Andersen or whatever, there’s lots of really good people that had no clue and no way of doing anything about it, but the real thing that you can protect against is at an individual level, what is your reputation, what are you known for, and if you lose your job or if you fall off the horse, how quickly can you then recover?

John:
What motivated you to write Reinventing You. Was it this whole concept that you yourself had to reinvent yourself from a political journalist into a branding expert?

Dorie:
Yeah, pretty much it was. The genesis of reinventing you was I started out with a blog post that I wrote for the Harvard Business Review and I didn’t really think of it as, you know, big official statement per say, but it was one blog post that I did based on my experiences. It was called how to reinvent your personal brand and I thought oh, this will be interesting.

I’ll share a few insights about the process, but it turned out that it actually proved to be a very popular blog post. Popular enough they asked me to turn it into a magazine piece, so it went from about 700 words to about 2,500 words and it when it came out in The Harvard Business magazine, I got approached by several literary agents that said, hey, have you thought about turning this into a book? And so at that point I realize that it was an idea that had traction and so I decided to go ahead and turn it into a book proposal and make that work.

John:
Wow, what an amazing Cinderella story. I mean, so many people feel like they have a book inside them, but I don’t think I’ve ever heard anybody tell us the story of a blog, a magazine article, to a book that they are calling you to turn it into a book, which really shows if you put something out there whether you’re a startup with an app or in your case somebody putting out really great content and it clicks with people, it will be successful organically and that’s a great way of reinventing yourself, so I would guess if you’re going to get career insurance and being a branding expert that you would recommend people make sure they start putting out good content is a great way to enhance your reputation and brand, yes?

Dorie:
I’m a big fan of that. It absolutely worked for me. I mean, the asterisk on this, the proviso, is that what happens to me in terms of, you know, publishing something and then having agents come to me, it’s of course relatively rare, but what I did to team myself up for that possibility was, this was not, like you try once and then all, you got so lucky. I had actually written three book proposals prior to Reinventing You. None of them got picked up. No one was interested and so it was part of a continuing process where this one clicked, but I was trying to put myself into the path of opportunity beforehand.

John:
Thank you for clarifying that, because it is helpful to know that you’re not just an overnight success. That you learned so much just like entrepreneurs do while they have their startup. When they pivot, well, that proposal didn’t work, nobody bought that one, let me try something else and often times people really don’t get the successful exits until their third or fourth or fifth startup and in your case it was three and bam, after that, you got the book. I’m extremely curious to know how you got and what it was like to be a presidential campaign spokesperson? Talk about branding and every day dealing with poll numbers going up and down and one wrong word and your brand is damaged, that’s right?

Dorie:
Yeah, absolutely. So, the initial transition that I made, so I lost my job as a political reporter and I kept hoping that I could get another reporting job and it was just not happening and so finally after about six months of freelancing and trying to cobble together a living, I got a phone call from a guy that I knew. He was a political consultant and it turned out that Robert Reich, the former US labor secretary was running for governor of Massachusetts and he entered the race really late and he didn’t have any campaign infrastructure and so they needed to hire people very quickly and so my friend knew that I had been out of a job, he asked me if I was interested in it and I ended up taking the job so I serve as Reich’s press secretary.

So that was kind of my initial experience, you know, working as a high level press person on a campaign and then after that I figured that I might be able to leverage that into a role on the subsequent presidential cycle, because the New Hampshire primary, of course, is really central to the elections and most of New Hampshire’s medium market is the Boston medium market. There’s actually only one television station in New Hampshire. All the others are the local Boston channels, so I had relationships with all of those reports. I thought, you know what, that’s an asset I can leverage.

So, again, it took a long time. It took about six months for me to be able to make the connections that I needed, but Howard Dean was the candidate that I most want to work for and I had to really finagle my way in. I had a bunch of meetings that didn’t go anywhere, but eventually they did hire me.

John:
That’s a great story of networking. You knew enough people that when an opportunity arose somebody thought of you. You had brand awareness and you delivered on your brand when the opportunity arrived. So many of the founders are looking for how do I position my startup to investors in a way that comes across as a brand with a culture that attracts the right team, because that’s number one criteria for investor is not the idea, but the team, and the team is attracted to the leader, which creates a culture, which is what the brand is, so that’s why you’re such a great guest, because you’re a branding expert, so the listeners need to know how do I create a brand. So, when you’re talking to Microsoft and Google, what advice do you give big established brands like that?

Dorie:
Yeah, yeah. So, it is an interesting challenge when you have this sort of behemoth that people already had fixed thoughts about, so I think that the key thing there is you want to focus on segmentation, because you’re never going to be able to succeed in changing everybody’s mind at the same time. People have different levels of awareness.

You know, if you think about like a tech company as in your example, there’s going to be a different opinion in the general public of like, oh yeah, I’ve heard of them, versus tech super users who have really particular opinions about, oh, they’re amazing, or, oh, they suck, and so you really have to start with that and to figure out, alright, who are the distinct constituencies and what is the message we want to drive with each of them and what are the proof points that we need?

What do we actually have to do, because, you know, a crucial thing that people often times fail to understand when it comes to marketing and messaging is, you know, they think, oh, it’s just about spewing messages at people, but actually, you know, it can’t be, because no one will ever believe it, no one will ever take it seriously.

Marketing has to be integrated with product, with operations, etcetera, because if people think your product sucks, you actually need to change the product in such a way that it doesn’t suck and then you have the ability, you know, the flexibility, to change the messaging, because it becomes about hey, have you tried this? Have you looked at us lately? But I think that some people just think it’s like this generic spin doctor kind of thing, but actually it’s taking a holistic look at everything that the company is doing and then making sure that a light is shined properly on those initiatives.

John:
What I find fascinating is you use the word constituency, I’m mispronouncing that, but it’s a political word, right? And so, you have taken your political expertise of branding a politician and who their audience is, if you will, they can vote for them in their neighborhood or region or state and apply it to branding for startups and huge successful tech companies figuring out, alright, we’re going to break down which segment are we talking to, as you mentioned, the really techies, are they gonna be the first adapters to try something new from Google or Microsoft or if you’re working for Apple, the new apple watch, right, you have to segment out who’s going to be the first to try and who are the brand ambassadors. Can you share any differences between the brands of Google and Microsoft? I think everyone has their own person opinions, but I would just love to hear what Google and what Microsoft want to think of them as brands. What’s their idea goal and see if it matches, you know, what we each think.

Dorie:
Yeah, the first caveat with that is I wouldn’t want to say in any way that I speak for Google or Microsoft.

John:
No, no, of course.

Dorie:
And I’ll also say too, I have consulted for Google and worked for them as a consultant in the past. Lately, my most recent connection with both Microsoft and Google has been as a speaker. So, I’ve come in and spoken to their organization. My new book Stand Out came out in April and so, you know, for folks who are interested in watching online, I actually just in July was at Google’s offices in Cambridge, Massachusetts and I gave a talk about Stand Out to that, which is available on YouTube and then I also, when I was on book tour, I spoke at the Microsoft campus in Redmond as well about the book.

John:
Well, let’s talk about that then, because that’s even more interesting than my question was. So, instead of what is Google’s brand that they want people to think of, I’d love to hear what was it in your message from your book Stand Out that Google felt compelled to listen to? I mean, clearly, it’s like, how much more does Google need to stand out, right? Or how much do the employees, are their employees trying to get their idea to stand out? So, I’d love to hear, without having, give us a little trailer, teaser, to get us to go to YouTube and watch your whole talk, so what was it that made Google say this book and this topic is right on brand for us.

Dorie:
Yeah, yeah. Well, one thing that I have learned a bit about Google. I’ve actually spoken at Google, at different offices three times for Reinventing You, my first book, I spoke at their Mountain View headquarters. That’s actually available on YouTube as well and I spoke about Reinventing You at their London office and then the Stand Out one at Cambridge, but something that I’ve learned that I think is actually quite interesting is that Google, I wish more companies would do this.

They really seem to have a culture where their interested in retaining their employees and even if the employee gets bored or for some reason doesn’t want to do the job that he or she has been doing, you know, they don’t just say, alright, well fine, leave. They really are invested in these people, they want to keep them, so there’s a lot of culture, in fact, encouragement within a culture for people to switch jobs and functions within the company and so it’s constantly revitalizing yourself creatively by having the opportunity within the confines of Google to do a lot of different things. So, that’s kind of exciting.

So, I think that is relevant to the message of reinventing you that you’re constantly sort of proactively deciding, you know, well, what do I want to learn? What do I want to be doing and how do I go about doing it. For Stand Out, I think the message that seems to resonate there is that if you’re doing something within a company or outside a company, you want, if you want to have an impact, which I think most of the people at Google and probably many people elsewhere want to have, it needs to get recognized.

You don’t want it to be, you know, you’re doing this amazing thing and a tree falls in the forest and nobody hears about it. You want the word to be able to get out so that people can, you know, A) understand your contribution, but B) so that the idea can spread and so I talk a lot about in Stand Out I have a latter section of the book talking about how to build a following around your ideas. So, if you have something you’re doing that you’re really passionate about, I think that people are excited to spread the word.

John:
Yes and do you have to get them to believe in your vision in order for them to spread your word? I would think that there’s got to be something in it for other people to get them on your team. I keep using the analogy of a founder getting really great talent to come join his startup when they have other choices and some of the other choices might even pay them more, so it goes to this whole culture of, you know, if you get into Google and Google puts you through such a arduous process to get in, I can see why they don’t want to let you go, because obviously they feel like they’ve picked the best of the best, but this whole concept of, alright, so you’re a startup or you’re in a big company like Google, how do you get your idea to stand out or if you’re a startup, you know, working on your pitch, how do you make your pitch stand out? Do you have any tips that you could give our listeners about, if you’re pitching an idea or in this case, asking for money, what are your tips for standing out on a pitch?

Dorie:
Exactly. Well, I think your question John is really to the point, because I lay out a framework in Stand Out that is a three step process that, you know, I interview about 50 thought leaders and tried to reverse engineer what their process was for how they got known.

John:
My listeners are going to love the fact that you reversed engineered that by the way.

Dorie:
That’s right. When in doubt reverse engineer. That’s definitely how to do it. What I learned was that almost everybody followed this formula for spreading their ideas. It’s a three step process and I’ll lay it out briefly and then explain a little bit more, but the short version is step one is building your network, step two building your audience and then step three is building your community and so what I mean by this, step one building your networking, this is of course really important, because in the early days of any idea, there’s a few things that are happening.

Number one, the ideas are probably not refined. It’s probably not that polished. It may actually not be that good and so you need to have a group of people around you who are both smart and talented, but also people that you really respect and respect you. They have to have your best interest at heart so that you can receive honestly their feedback to make the idea better and they’re the people who are rooting for you. They want to help you. So, they’re going to open their Rolodex, they’re going to try to do what they can to advance you to the next level. That’s number one.

John:
That’s great. I just want to recap, because it’s so helpful because in this case it was an idea, but so many pitches are not refined and you can’t just pitch something without getting some feedback from your network is my big takeaway there, so thank you. So, step two is the audience, how does that help you stand out?

Dorie:
Yes, yes, exactly. So, step number two about building your audience, this becomes the place where you start to share your idea with the outside world, because, you know, clearly, your idea is not going to do a very good job spreading if you are only talking to the inside circle or the people that you know personally in your network, you gotta start sharing it, so this is the place where, it’s the public phase, you are speaking about it, your writing blog posts about it, you’re sharing on social media, writing books, basically what you’re doing is you are making yourself findable by other like-minded people who would be interested in an idea of this sort. So, you start to do this to get the idea out into the ecosystem.

John:
We’re going to tweet that out. Make yourself findable. I love it.

Dorie:
Yes, yes. Exactly.

John:
And while you’re on the topic, Dorie, if you don’t mind, I just want to take a little subset into this, because so many and, all of us experience it to one degree or another, have a little bit of fear of what other people are going to think and what if it gets rejected and all that stuff, so when you’re helping people stand out and say okay, now it’s time to put it out there, there’s decision, analysis paralysis, it’s not perfect yet, especially with a new app or something. It’s like, ugh! Do you have any advice for people of how to let go of fear or how to not worry about what other people think?

Dorie:
Yeah, yeah. It’s a real challenge obviously. We’re held back by the concern about what people might be thinking or saying or whatever. I mean, I would say this is yet another reason why it’s really important to have that internal network as your first step, because even if you don’t trust yourself and it’s easy, frankly, if you’re getting negative feedback to doubt yourself. If you have put around you a group of people whose opinion you really respect and they’ve said to you no, no. You have something here. This is good, I believe in this, then in the moments when you’re doubting yourself, you can look to the people around you to get that kind of extra boost of confidence you need.

John:
That’s fantastic. It’s almost like a force field from your network before you go out into your audience. Love it.

Dorie:
Yes.

John:
Alright and the final secret is how do we get a community around us so we can stand out.

Dorie:
Right, exactly. So, the final step here, so you’ve been building your audience, you’ve been sharing the idea, getting it out there, so what happens next? Ideally what happens is that your community, your audience members who have been listening to you start to form a community and basically what that means, what that looks like is instead of just you talking to the audience as kind of this one way megaphone, they start talking to each other and that is what enables virality to take whole.

They become ambassadors, they become messengers, they’re spreading so you’re able to achieve experiential growth for your idea, but the key and this is something that you were alluding to earlier is that this is never going to happen if your message is too self-centered or self-focused. They need to see themselves in the idea, they need to feel the idea is valuable to them and if they do, then they will be willing to spread it.

John:
Oh, got it. If you want virality, make sure people see themselves in the idea. Another great tweet. That’s fantastic. That’s a whole shift from push messaging to pulling people in. It’s all about the secret of virality. So, you know, it’s so great. First come up with an idea, make sure your internal network agrees with you, gives you feedback and adjust it, then put it out into the world and then, in other words, make yourself findable and then finally, if it’s really clicking your first blog did, you will find people that will want to share that because they see themselves in how to reinvent themselves or the need to stand out and that this is something they want to share with their friends because they think it’s got a lot of value and that they’re going to be perceived as someone who’s got good content and their friends might even thank them for sharing something and therefore you become someone who stands out. How did I do? Did I get that right?

Dorie:
Yes. Rock and roll, you got it.

John:
Alright, it’s just so great. I really want to do it justice and then just connect the dots for the listeners who are founders as it relates to how does it relate to my pitch. Well, it’s the same three steps. Practice your pitch with your network and then start talking to investors and then believe me, if the investors like the pitch, it will get a community, all the investors know each other and your pitch will become viral.

So, if you follow Dorie’s book Stand Out and these three steps, it will make your pitch hugely successful and you will get funded fast because of what Dorie had to say today. Can’t thank you enough. That’s absolutely amazing. Before I end the podcast because it goes so fast with somebody like you with such great content, can you talk to us about the Forbes inner critic article that you wrote that talks about taking a pause and having compassion and being curious?

Dorie:
Yeah, absolutely. So, I think this is a really important topic obviously because for so many of us, we’re not compassionate with ourselves. People are incredibly hard on themselves. They see someone else doing something and they say, oh, well, I get it, I understand, and then we just hold ourselves to such a high level of perfectionism and so for Forbes I actually co-authored a piece with a friend of mine named Susan Brady who is high-level staffer at the consulting firm Linkage and this is a topic that she’s written about pretty extensively about how to quiet and silence the inner critic and I think that part of why we wanted to address is that it’s almost impossible frankly to accomplish what you need to accomplish if you’re the one shutting yourself down.

You, you know, you can’t move forward if you’re expecting perfection, because no one is perfect out of the gate. That’s just sort of the definition. I mean, you know, it’s like somehow we’ve seen these stories about like a three-year-old that you sit him down at a piano and he can play Mozart then everyone thinks, oh, I should be like that, you know, about pianos and about everything else and it’s like, are you joking? Like, no one is like that. So, I think we need to give ourselves a break. I mean, of course, we need to do our best and try improve, but that’s a very different thing than saying, oh, if I’m not perfect then somehow I’m flawed.

John:
That’s great because there’ so many founders are going to struggle and do struggle with the need to perfect and they think the pitch has to be perfect to get an investor to say yes and I think the app needs to be perfect to get a lot of users and this line you said, we’re going to tweet out, you can’t move forward if you expect perfection.

So, I’m all about telling people to be progression-ist not perfectionists and just focus on your progress, but this whole concept of compassion as the way out of silencing the inner critic and if you’re criticizing yourself more than anybody else, you will not be successful, so thank you for that.

As we wrap up, besides the great book Stand Out and Reinventing You, are there other books that have inspired you that you would think would be helpful for a founder who is looking to pitch investors to read?

Dorie:
Yeah, yeah. There are so many really interesting, great books out there. I mean, someones that are favorites of mine to recommend I always like Never Eat Alone by Keith Ferrazzi, great networking classic. One that I feel like is talked about less, but I think is very valuable is called Power by Jeffery Pfeffer. The subtitle is sort of goes, Power: Why Some People Have It – And Others Don’t, which is always a very interesting thing to be aware of.

John:
Especially in the political world.

Dorie:
Yeah, right, and I’ll just wrap up with Robert Cialdini who wrote a classic book Influence: The Psychology of Persuasion. He is so impressive. I actually interviewed him for both of my books. I have sections about him and his insights in both Reinventing You and Stand Out.

John:
Oh, great.

Dorie:
He’s somebody with the book Influence was very influential to me and to lots of other folks.

John:
Well, we’ll be sure to put all three of those books plus yours, of course, in the show notes for people and Dorie, how can our listeners follow you and if someone wants to hire you as a speaker, obviously people should go and buy your book, you have a website, give us your Twitter handle or give us everything we can to know more about you and attract what you’re going to be doing.

Dorie:
Yeah, John, thank you so much. I appreciate it. One thing that I’ll actually mention to your listeners if they are interested in honing their skills for pitches and developing breakthrough ideas is that I have a free 42 page workbook that I developed that folks can download off my website. It’s available right at the home page at DorieClark.com and in addition to the free 42-page workbook, I have about 400 free articles that folks can access there and I’m on Twitter at Dorie Clark and I do a lot of speaking and consulting and information about that is all on the website as well.

John:
Great, well, clearly you walk your talk. You have put out amazing content and you’re generous with it and obviously people see the value in that and you are someone who definitely stands out and makes a difference in the world. I can’t thank you enough for being on The Successful Pitch podcast today.

Dorie:
Thank you very much.

TSP035 | David Desharnais – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Hi and welcome to The Successful Pitch podcast. Today’s guest is David Desharnais who is the Chief Marketing Officer and Senior VP at TraxPay. Dave also is a board member and advisor on a lot of different investment companies. He’s won an incredible number of awards including Venture Deal of the Year, which he goes into to tell us how they won that deal and what made the Venture Deal that they raised an incredible amount of money in their Series B of $15 million dollars and how they did it and what is different about raising $15 million dollars versus the smaller round that they did of $4 million dollars in 2012 and he talks about the importance of really making sure that your team is strong and that who you are talking to you know the research on them.

In other words, he’s all about practicing your pitch and doing the research on who you’re talking to to be successful. Dave literally won CMO of the year as well because he has a brilliant mind on how to co-brand and get his partners to do the marketing for him. So, he not only knows how to make deals, he knows how to market. You’re going to love hearing what Dave has to say.

Welcome to The Successful Pitch podcast. I’m thrilled to have today’s guest David Desharnais who is the Chief Marketing Officer and Senior VP product manager as well as a a board member and advisor to the investment community. David describes himself as a geek who can speak, so let’s hear him speak. David, welcome to the show.

David Desharnais:

Thanks a lot John, appreciate it.

John:

I’m so interested to hear, first of all, how did you come up with that phrase that you’re a geek that can speak, because usually people who are really into technology, the personality is more engineering orientated and not known for being right brain story tellers, so tell us a little bit about that journey.

David:

Yeah, you know, it’s funny, my academic background I found myself definitely plugged in to the sciences, definitely physics, mathematics and such like that and the association I had at the time was very much of that same kind, the geeks, really ultimately or the nerds of the school, the nerds of the college or whatever and it certainty served me well. I really love that area of technology and really plugging into that group, but at the same time when you start to engage in business and looking at how to grow companies. It takes a different skill set and it certainty served me well coming from that area, because I could talk to the technology, I could talk to the physics, I could talk to the mathematics behind the ideas, but be able to craft that into a story that would be sellable. Sellable internally at big companies and sellable ultimately to venture backs.

John:

Which goes to my whole philosophy that all of us have to sell and therefore all of us have to become storytellers, so let’s get into a little bit of what your story is. You have won so many awards starting with the 2015 CMO of the Year award for B2B Innovation and you have the most innovative fintech solution and the Innovation Award in 2014, but before we get into – and also the 2014 VC Deal Feed International Funding Deal of the Year, we definitely want to go in to hear about, but let’s take our listeners back to, you know, you were an engineer and then how did you go from being an engineer at Pixleworks into getting on the advisory board of all these different investors?

David:

Yeah, well, you know, it’s interesting. I started my career as a electrical engineer semiconductor design. I had worked for multiple companies, Pixelworks being one of them, but I found more and more, when you start looking at the success of a project internally, it was really meaningful to see why one product is better than another, why one chip performed better than another in the marketplace in terms of sales and having the hubris of an engineer, I thought, hey, I can do this better and it was a humbling experience, but starting to engage with the business side, the marketing guys, the businesses development guys, the sales team, try to understand what drives growth in the market. It wasn’t a technology answer, it was positioning. It was value propositions that you would associate to a product which is something, you know, frankly as an engineer, I’m in the bits and the bytes of technology, never really had to think of that per say. It was always speeds and fades and stuff like that.

So, it really enamored me. It’s something that caused me to rethink ultimately a career path, but I found it very attractive to be in that level of conversation to be able to tie end market success with something that was being built in the factory and as I started getting more around that group or that ideology, I just found myself being recruited internally at the company to work on different teams and found myself on the product management side instead of the product development side. I found myself on the marketing side, not on the development side and I thought that was really intriguing, because I could straddle.

I could straddle both. I can talk from the technology standpoint, I can talk to the business side and over time it lead me to change different companies ultimately as you do in a career, you look for upward mobility and it allowed me to move from really the hardware development, think of that as building a chip to the software development, which is, you know, largely, well, not largely, it’s code ultimately. There’s no manufacturing per say and being on the code side, it was a lot higher margin, a lot more, I would say, ability to cross borders.

A very seamless way to do business on a global scale and I found myself in global companies, I found myself being the go-to person for technology representing, you know, my company but really on a global scale and more and more on the business side and it really pulled me into board positions and thought leadership positions and it was a wild ride to be honest. It took awhile. It didn’t happen overnight, but there was a wild kind of getting to that seat and I’ve love it.

John:

Well, you were at Cadence Design, am I pronouncing that right?

David:

Cadence Design.

John:

Cadence Design, like marching in cadence, in Silicon Valley for over 15 years and one of the things that really intrigued me about that is, you were involved in the M&A and due diligence and were involved with Washington DC, can you speak a little about that? I think our listeners would find that fascinating too.

David:

Yeah, you bet. I would say that in the course of my career there, I mean, I went from designer to ultimately running product to running marketing and product and you get to a point in every company where you have to decide if you’re going to build partner or buy a company and so in the course of that from going to market and making sure you’re positioning a platform in the right way you need to have assets and key technology, which you know, you’re not in a position to build in the time frame needed so you gotta look outside and so as I started looking outside, it allowed me to identify key technologies, key companies that would be relevant and strategically important to our business both tactically now and also over the long term as we look at a position ourselves competitively over the long haul and so that allowed me to get into really the M&A selection.

Who is interesting, how do we look at this company? How do we evaluate the technology of this company? How do we, do we believe the numbers they’re putting up on the screen in terms of their growth or their current position because these are, I would say in my experience, they’re privately held companies and it’s not something you can necessarily go look through so there’s a lot of nuances there and so I found myself in those conversations more and more and so, that’s kind of lead me, I wasn’t part of the M&A group, but I was tasked with selecting key technologies that would be relevant to our portfolio and then moving forward on the due diligence on the technology side and the business side to bring them in house and ultimately make them successful and after 13-14 acquisitions, we kind of got a rhythm, because it’s not – it’s no simple thing to wire and certainty it’s so story that once you acquire a company or a technology that it goes to die ultimately, right, because if you lose that focus and attention, so really kind of locking on how to do that was really interesting.

John:
I can imagine and for someone who has an ultimate goal that that’s their exit strategy that someone is going to buy their company, what tips do you have for founders you know besides really making sure that when they due diligence that the numbers they’re talking about are in fact true, but is there anything you have from a standpoint of are you looking at the team just like an investor does to make sure these are the people that can continue to execute after you buy them?

David:

Yeah, absolutely. In fact, it’s funny because you would naturally, I mean, I would say I’ve evolved my thinking over time, but I would say at the beginning you’re thinking how successful is this company, right, how successful is their product in the market place and at the infancy of a technology, right, something new, it doesn’t necessarily have that market succession, you have to take a leap of faith, so initially I would come in looking at the results, show me your customers, let me talk to your customers, let me see benchmarks, let me see, and very technology and business at a high level you, but overtime as I became more acquainted with how it works how to bring companies in whether they’re successful or not, it was more about that team.

What you’re buying is the team, what you’re buying is the execution of that technology and the mindset that team has. Now, of course, that should have been validated and proven in the technology, there should be some level of practice, right, but it’s how do you keep that team in tact, how do you keep it engaged and motivated to continue to execute that and it’s not, it’s myopic to think that a team is going to join some corporation and stay intact for 20 years.

John:

Right, but at least initially, right?

David:

Initially that handover plus some growth and some targets and really got smart about incentive-ing properly, right, and making sure that they’re motivated to continue with and develop.

John:

And also I would imagine that there’s a lot of thought that goes into how can we adapt this culture into our big culture and make them feel welcomed, correct?

David:

Absolutely. It’s funny, it’s really important as a company that’s being acquired, certainty there’s a lot of emotional tie and separate-fy, if you will, towards your company. This is my baby, but when you get acquired, you need to take your team shirt and you need to put it on your shelf and you need to be part of the company and it’s a very hard transition and I totally get it. Being on both sides of it, I totally get it, but it’s very important because as a company comes into a larger enterprise, being acquired, it needs to integrate. As long as the company feels like they’re separators are now better or independent, it’s harder to really bring that fruition ultimately to the acquisition.

John:

Right, it’s interesting because a lot of investors will tell me, you know, we look for founders that are coachable and when you were looking for companies to buy in the M&A world, you’re probably to make sure those people are coachable in a way that they’re flexiable with their culture a little bit and not keep them going on. So, now you are running the marketing and product management at TraxPay, which is in the world of fin tech. So, I want to have you talk about this winning of many so impressive awards, this VC deal, International Funding Deal of the Year. Can you tell us what that was and how did you win?

David:

Yeah, I mean, I would say, well, fin tech right now is explosive and I’m sure your audience probably a good chunk of them are probably involved in the fin tech space or financial technology space in some way, shape, or form, but fin tech is exploding right now and in 2008 and there’s a buildup here. In 2008, of course, we saw the meltdown of the banks, right, which created for you and I as consumers in the world kind of to rethink our relationship with the banks as a consumer, you know, and where do we put our money and is it safe.

I mean, we saw crazy things like where a bond, you’d buy a bond and instead of getting a return, you’re actually paying money to bond, this happened in Germany, you pay money to put money in a bond for – because it was safe. You know, safe in this period of time.

Anyway, it really caused the consumer, but also by extension businesses to really rethink their banking relationships, how they deal with money, how they transact overall and so, you know, that really created an opportunity for technology players to come along and look at how they could not necessarily disrupt, but provide alternative means to what would normally be the preview or the demand of a bank and whether that was infrastructure or lending or remittance or foreign exchange or insurance or whatever it may be, these large, I would call it monopolistic banking and banks and institutions out there, really had the, really had the opportunity to really command that space for a long time and all of a sudden these little upstarts are coming on with technology solutions that are challenging what is currently traditional banking and so in that same vain, I mean, personally coming from a semiconductor and technology and software span in the enterprise space for many years, fin tech itself provided a really interesting opportunity at an interesting time. I mean, it would be considered in many ways the golden age of payments today. You know, but nonetheless..I’m sorry, go ahead John.

John:

No, I was just going to say so, I mean, talk about the ultimate problem to solve from a big picture standpoint, right?

David:

Yeah, so right now if you look at fin tech, the world of fin tech, well, right now I’m tracking about 2,000 companies.

John:

Wow.

David:

2,000 companies that are fin tech players on a global market. Investment wise, usually on average about $20 million dollars investment per entity, so you can see it’s quite, put a large number. In fact, in 2014 there was about four times the amount of investment that was actually done in 2013, so a market increase. Already today at 2015, it’s at 8 billion and 10 billion dollars in investing and we’re not even done yet. There’s probably another 200-300 deals to be done. So, we’re at a really interesting time in the payment space. What’s happening?

As I mentioned before, in 2008 it really opened up the eyes and ultimately the doors for alternatives, right, I mean, it gave people pause to re-think what am I doing to this bank and how do I do lending today and things like crowd sourcing or crowd funding I should say became really popular because it was an alternative, right, a way to rise capital, lending became an interesting way to do it. Peer to peer payments, multiple payments, Square came on the screen and really democratized – I mean as an individual at a garage scale, I’ve got a Square dongle. I mean, how on earth could you ever do that?

John:

It’s great.

David:

And so, it really opened up alternative thinking to how payments and financial transactions are done and so that was on the consumer side, but on the business side and here’s where a lot of people don’t understand or really maybe it’s not as well known. Every year, about 300 trillion dollars in US equivalent dollars is transacted between companies. It’s massive. The consumer market is much, much smaller than that.

John:

Yes, that’s a great tweet by the way. 300 trillion dollars is transacted between businesses every year.

David:

It’s amazing.

John:

Is that the US only or is that global?

David:

That’s global. If you do the math on that, in fact, BCG, Boston Consulting Group, will tell you 377 trillion and, you know, it could be 200, it could be 400, but it’s no matter how you shape it it’s giant, but it’s larger than the GDP of the world, so how is that even possible and the reason is, John, if I’m a business and you’re a business and I pay you $1 million dollars or one million euros, well, you’re not going to hold that yourself. You’re going to have to turn around and pay for your suppliers, you’re going to have to pay for your stuff too and so there’s double counting that goes in there.

John:

Sure, but it’s still a transaction, sure.

David:

But the banks see all those double, triple, quadruple counting and it amounts to an excessive 300 trillion a year. So, the problem is this, though, about 30% of the time, so roughly, you know, I don’t know, 100 trillion of that, right, is really, really inefficient. If you think, let me talk about what that means for a second. If you’re BMW and you want to buy something for your next line of cars call it maybe it’s metal for the car or something like that. You have strategic sourcing, right, that you have, you know the birth date, the kids, the home phone number, everything of your supplier, because there’s no way you’re going to let that go down.

You can’t let line down, so there’s this concept of strategic sourcing or bill the materials type of sourcing that you do, which honestly is about 65-70% of what a spend would be at a company. It’s directly billable kind of stuff. There’s an indirect spend. Indirect spend which is about 35% of a company’s business which it’s for the laptop, it’s for I need post-it notes. It’s running down to Staples. It’s whatever it may be. It’s new laptops. It’s a truck for a delivery, whatever it may be, and that’s all over the map in terms of how that is controlled.

So, the big problem that is to be solved in B2B or enterprise or business to business transaction is the visibility and control over that 100 trillion dollars approximate spend that’s happening, which CFOs are pulling their hair out trying to figure out how do I predict cash flow. The number one problem that is cited for procurement guys, guys that buy stuff is paying supplies. It’s number one and the number one thing for suppliers is kind I get paid. You know, where’s my money? You said it would be here two days ago and it’s a month late.

John:

And small businesses that’s the one, you know, lack of customers, lack of money, so you know, they don’t have money coming in from funding and they don’t have a huge savings, that cash flow can make or break a small business and decide whether they stay open or they can pay their employees and it just does a snowball effect, correct? If the cash flow..

David:

Absolutely. Well, even that, if you think of, you know, if I take that concept, which obviously you understand. If you think of how the world is now flat. If you think about doing business with China, it’s not a weird thing anymore as somebody from the US. I mean, I can source products from Ali Baba, just similar I can do it from Costa Mesa, California. So, that whole world is flat, I can source it really opened up something massive, which is cross border transactions, because you think me sending you money, John, is a challenge? If I go to my bank and you wait and you get it finally? Think about the guy in China who is waiting his money to come from Europe or the US. We’re talking about a month. One example, it takes 15 days to get money out of Japan at a good time. That’s two weeks at least once I pay.

John:

And gosh knows what the Yen is doing in 15 days on top of it, right? So, it’s even more complicated.

David:

Absolutely. Absolutely.

John:

So, is that part of how you got this funding deal of the year in 2014? Is that involved with this international exchange?

David:

Yeah, so we’re a startup company. So, we do fund raising from time to time as needed. We did our first round we did four million in 2012 and then we did a subsequent round in September 2014, which is the one that you’re talking about which won this award of 15 million. So, we went in for a series B and it was really interesting so I’m sure your listeners will appreciate and as yourself being in the market yourself, you know, series B is hard to raise. The first amount of funding you raise is on a hope and on a wish and here’s the market and here’s a minimum viable product and here’s the founding team and please believe us. We’ll talk to anybody that’s got money, but series B is a little different.

I mean, series B you’re talking about more money, you need to show traction and customers and in our case transactions across the platform and what would in the consumer world or apps world be considered eyeballs, you know, it’s really showing tangible business and on top of that, you gotta have employees that you’re hiring, you gotta have employees that you’re hiring, you actually have to be scaling, right, you have to start looking at globally and compliance issues that cost a ton of money, right, so you really at this inflection point of boy, if I hire the people I need to hire, I’m going to, my burn rate is going to sky rocket. My horizons will be tomorrow, but yet I have to have that in place for me to raise, you know, it’s kind of a chicken and egg scenario.

So, how it lead to this funding deal of the year ultimately we were very selective on who we talked to. We had traction. We had customers. We have a product in the market. We had – so we had all the good things that somebody on the other side of the table of funding arm would look to, so we had that kind of success. So, we were really selective on who we talk to and if we took a step back very thoughtfully and said, okay, who are competing with today in the market? Well, B2B, that’s 300 trillion dollars that’s being transacted annually. It’s a rhetorical question, but how is that being done today. Well, guess what, 99.99% of the time it’s by a bank. So, it’s a bank.

So banking is one element, second element if you’ve ever dealt in business before, you understand there’s this concept of procurement cards or credit cards. I mean, that’s another obvious, I mean, we mention square, it’s an obvious vehicle for payments, so you’ve got credit card companies that command about 2-3-4% of that entire B2B landscape then you’ve got banks doing the rest, okay, so when we start to looking who would we want to have as part of our team, right? Not dumb money, smart money.

How do we put smart money in here and we actually can get some leverage and benefit from it? So, we started talking to and in fact they started coming to us, banks started coming to us, card companies coming to us, because as we were going to market, John, they would say, well, who are your competitors? Well, frankly, it’s banks and cards, but look at this, we’re working with bank and cards. So, if you look at the people who are investors, it’s a perfect strategic fit for where we go.

John:

So, how you got your smart money was actually getting the competitors to be your customers and even your investors, if I heard you right.

David:

Absolutely.

John:

That’s great. That rarely happens. No wonder that’s the funding deal of the year. I’ve heard it where customers become investors, but I’ve never heard competitors becoming customers and investors. I love it.

David:

Exactly. So, there was a really nice way to wrap a bow around our recent funding round and it really brought a huge, huge amount of creditability to TraxPay, which was, albeit a startup in Frankfurt, Germany, you know, who is now on a global scale with global players and namely it was Commerce Bank, this is public information. Commerce Bank, MasterCard, Software AG. I mean, big players in the world of financial and big data and stuff like that.

John:

Well, thanks for sharing that. That was going to be one of my question hoping it was public knowledge. For 15 million dollars, that typically doesn’t come from one investor. There’s a lead and then other people, right, to make that all happen. That’s so valuable for the listeners, thank you David. What would you say, you’ve gone into the differences quite a bit between the pitches you give when you’re starting out versus a series B 15 million kind of pitch. Besides traction and transactions and scaling and global, is there anything else that you would say really hammers home of what makes a successful pitch at that level that carries over? The team obviously I would assume still continues to be a key criteria, is there anything else that jumps out?

David:

Yeah. I would say in the first round of funding we were anxious. We were anxious. We did a lot of work, a lot of reviews of course, pitching, practicing your pitch and all kinds of stuff and just being thankful to be in the room with frankly a large table with a lot of people with their arms crossed, you know, arms crossed, legs crossed, eyes crossed, you know; what have you got for me? That was really typical of the first round. We ended up with some fabulous partners on that.

On the second round, we were more selective, it was interesting is we did a lot of research because again, looking at who would be deliberately, if we could choose who would we want to choose as our investors and it took, I would say, the big difference is we did a lot of research. Did a lot of research on who we should be talking to, the individuals that would be sitting around that table.

We stopped, it sounds pretty, maybe terrible, but we stopped dealing with associates. We started dealing with general partners and managing partners. You know, the guys who are ultimately going to be on the Monday morning VC meeting. We want to hit them on a Wednesday, Thursday, Friday while things were fresh so that when they went into the Monday meeting, they went oh my gosh, I heard something really cool, we gotta take a look at this. If you found yourself with the associate in a venture capital firm, I mean, it’s going to be a month of Sundays ultimately before you get that viability, you know.

John:

What you just said is so valuable. I just want to recap. We’re going to tweet this out. Two key things to make your pitch successful, practice and research and then finally talk to decision makers.

David:

Absolutely.

John:

And the timing of it is also a really key criteria, thank you, that’s hugely important. Well, let me jump in if I may to you had this incredible success in 2014 and then you just followed that up with another success in 2015 with multiple awards including CMO of the year. Congratulations to that. The Prestigious Business Excellent award. Can you tell us what did you do to win that? My goodness.

David:

Yeah, you’re always kind of hopefully and certainty I have to say, it’s not just me, of course, there’s a team behind it, right, but when you go to market in the way that we did back in September when we made our announcement. I think the key is I shared with you the strategic thinking behind the raising the round and being very selective on who we wanted to work with. We didn’t go talk to everybody that had money, we were very selective, but as we went to market, leveraging the, it wasn’t about TraxPay. It was about the value in the market – this sounds so trite, but it doesn’t happen very often.

As a startup company, you would think you would be pounding your chest about TraxPay, TraxPay, and that was, it was really hard. You had to kind of keep reminding yourself it’s not about that. It’s about bringing value to the market place, but second of all, the companies that place money in TraxPay and faith in TraxPay.

From an investor standpoint, which are also fin tech player, which have massive audiences and footprints and that kind of stuff. It was about tapping into the expertise, the reach of these organizations to ensure that A) when we announced it it wasn’t some little startup company in Germany, it was a large fin tech player that was bringing in something that we coined as industry term; dynamic payments – a revolutionary path to payments; ultimately into the market place, but we did it in conjunction with MasterCard, which is obviously a global player, right. You got Commerce Bank, you got Software AG and Software AG is the kind of company that does Apply’s supply chain. So, very prominent large scale players and again, getting out of our own way and letting others tell our story and told a story about dynamic payments, but at the same time, we’re under pinning that, right.

John:

It’s really the ultimate classic case study brilliant co-branding with what you did in my opinion, because to have a MasterCard and then you’re co-branding with a brand that’s already global and respected and they’re touting why you’re so great. You don’t have to tout it yourself and then you have all this credibility much like a brand ambassador almost.

David:

Right, absolutely.

John:

Well, congratulations.

David:

Well, John, on the same day that we announced, Apply Pay had come out too and so we’re like oh, because you didn’t see that coming, how did you know? But, I was really pleased because I love Apple Pay and again, we’re not competing with Apple in that case in that consumer plan on the B2B, but it was fascinating. It was one of those, ugh, today, why today?

John:

Can I have a moment in the press just about me? Just one day? It’s like you’re a celebrity that passes away the same day somebody even more famous than you dies you get less coverage. It’s crazy. I totally understand.

David:

It was a heart dropper. So, what happened is we ended up being basically with Apple and Apple Pay and we got mentioned a ton of times, so what would be bad actually turned out to be fantastic.

John:

Now, that’s fascinating. Yeah. So, because the press is looking for anything news worthy and it’s more business to business it may not have gotten the play that you got, but because Apple was doing something in consumer world, they just piggy backed your story on to that so that you got more exposure than you would have. Brilliant. How fantastic.

So, this, you know, turning your, what you perceived to be a negative don’t always make that assumption when you get news, right, that it’s, oh that’s the worst thing that could happen, because it, in this particular case, it turned out to be one of the best things that could have happened. You couldn’t have predicted or planned that. How wonderful.

David, is there any one book as we’re wrapping up that you would recommend founders to read either about investing or getting funded or just in life in general that’s made you so incredibly a geek that can speak. If other people want to emulate your process and your success and your likability, what would you recommend?

David:

You know, there’s a couple, but I would say one that’s a really big standout for me and you probably read it, I’m guessing, but The Hard Thing About Hard Things by Ben Horowitz was absolutely fan-freaking-tastic. It was a no holds barred very, very authentic view from the inside of, you know, obviously Ben Horowitz and Mark Andreessen of Netsape fame have gone on and done other things, but Andreessen Horowitz, obviously, a famed venture capitalist company, but you know, Ben just did a masterful job of laying what he did to succeed and how to hire, how to fire, how to structure your organization, how to go to market, and things from a guy who has been in the trenches. He’s had tremendous failures and tremendous successes and being able to balance both of those in a very honest way. I have read that book probably four times now, because it reminds me and it just something came out last year, but it reminds me of, you know, it can go wrong, it can go wrong and how do you adjust from that? How do you go from a near death experience in your business to turning that around to tremendous success? I found that to be absolutely fantastic for me.

John:

I like that, we’re going – that will make a great tweet from the show, from near death to near success, right? How do you turn that around from near death to success, because that’s ultimately what it is. You can be flying a plane and it’s going well and something happens and you have to pull up and figure how to get back where you’re soaring again, it’s great.

David:

Absolutely.

John:

Now, how can someone keep track of what you’re doing, follow you on social media, if companies are listening and want to use TraxPay, what’s the best way to promote who you are and what you’re doing for our listeners?

David:

Yeah. So, I would say TraxPay.com is where you’d look us up and from there it’ll bring you a lot of information you might be looking for. For me personally, my Twitter handle is @DavidDesharnais and so that’s one way. LinkedIn certainty. I’m always happy with that, but yeah, I would love to be able to stay in touch with your audience, certainty I’m happy to answer questions, but it’s been a wild ride and happy to share my experiences with other guys that are in the trenches. It’s been a blast.

John:

Fantastic. Dave, it’s been a blast having you on the show, that’s for sure. Thank you so much.

David:

You bet, thanks a lot.