TSP006 | Jim Beach – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Today’s guest on The Successful Pitch is Jim Beach who is the host of the radio show School for Startups Radio as well as the author of Hack Google Maps. Jim has quite a background including being invited to pitch at the White House and being invited to go back to the White House holiday party. That was a ringing endorsement. Jim really talks about the keys to being successful is having an enticing opening to your pitch that begs people to want to know more and he gives us a specific example that will blow your mind. Jim has something called rock stars in an elevator.

So, your elevator pitch set to music. Everything from Johnny Cash telling a story with a song A Boy Named Sue to Lady Gaga. Why is that so appealing that the song she sings and the things that she does, is because it’s shocking and our brains like new information. You’re going to like this new information that Jim has to share in today’s interview.

Hi everybody, welcome to The Successful Pitch podcast. Today’s guest is Jim Beach, who is known around the world as one of the top keynote speakers. He’s got a great book called Hack Google Maps. We’re going to ask him about that, but mostly we’re excited to hear about his rock stars in an elevator concept that he has. He has talked about this on his School for Startups Radio, which has incredible guests and airs on over 11 FM stations as well as the internet, so please welcome to the show with me. Jim, welcome.

Jim Beach:

Thank you so much for having me. It’s my honor.

John:

Jim, you started your career at such a young age. I was reading you started at 25 with an incredible startup that grew. Would you take us on that little bit of a journey, because people are always fascinated about how somebody gets to be as successful as you are.

Jim:

Well, thank you for that. I was working at Coca Cola and they decide they didn’t want me to work there anymore, so I got shown the door and I was distraught, I thought my entire career would spent at Coca Cola and I had a mid life crisis at the age of 23 or 24, decided what I really wanted to do was become architect and so I applied for architecture school to go and get a masters of architecture and started that and needed to pay for it. I also wanted to get married. I thought I would start a summer time business that would allow me to work three months a year and go to school nine months a year and support myself.

So, I started a summer computer camp company. It doesn’t sound so cool now, but back in the early 90s it was pretty innovative and exciting and it was a huge success. We eventually grew to 89 locations in the United States at placed like Stanford, MIT, Georgetown, UCLA, every big name school in a big city. We were also at Sorbonne, Oxford, Cambridge, internationally, and we did a lot of other projects as well. We write K through 12, math, science, technology curriculum for entire school systems. Things like that that eventually grew to 700 employees before I sold it about six years in.

John:

What a great story. You know what’s interesting is while you had plans to be an architect, you basically became the architect of your own life and your own business from this idea of doing a computer camp.

Jim:

That is true and unfortunately I had to stop architecture school just short of graduation because, you know, I think at that point the business had something like a 100 employees and it’s hard to do an 18 hour day masters program when you have 100 employees sitting around waiting for you.

John:

Depending on you. Well, what I find also really fascinating about that story you told is no matter how young or old we are, when we have an unexpected bump in the road whether it’s being laid off by a major corporation, that’s a big time to analyze what do I want to do with my life and sometimes it’s something that can be so devastating or shocking and not what we expected. If we can reinvent ourselves like you did, it’s so inspiring for everybody at any age, because even as an entrepreneur there’s many times where you have to pivot in your own life as well as your own business.

Jim:

That’s very true. I never planned on being an entrepreneur. It was the last thing in my mind and I’m not even sure what the word was when one of my friends asked me what does it feel like to be an entrepreneur and I never thought about it. To me, it was not what I wanted to do, but it turned out to be the perfect lifestyle for me. Interestingly when I found out from Coco Cola why I was invited to leave, they said, you don’t play well with others, maybe you should start our own business. It was very interesting that the astute people at Coca Cola had figured me out before I had figured me out.

John:

Ah. Well, I find that really fascinating feedback because, as a radio show host for School for Startups, you clearly have to play well with all of the different guests and all of the different next works. So, play well with others, running your own show is I guess different than playing well with others in a corporate environment.

Jim:

Yes, very true. It’s even more amazing. In the short time I was with Coca Cola, I saved them about a billion dollars over ten years and saving a company a 100 million dollars a year is apparently still not enough for them to keep you around.

John:

Isn’t that fascinating? Yeah, business today is not about taking any rejection or seemed rejection or, as you said, invitation to move on, you can’t take any of that stuff personally or you’ll drive yourself crazy.

Jim:

Especially as an entrepreneur where you’re going to get a rejection nine out of ten times, perhaps.

John:

That’s right. Well, I’m really excited to hear you talk about this whole concept of rock stars in an elevator, because we’re all talking abut pitching for funding a lot on this podcast and the whole concept of taking the word pitch and interpreting it not just pitching your idea, but also pitch in terms of music and being on key, so tell us how you came up with the whole concept of taking music into an elevator pitch?

Jim:

Well, it was not my idea, I must say. My co-author from my first book, which is called School for Startups, the McGraw-Hill book. The co-author was Chris Hanks and he’s the head of the entrepreneurship program at the university of Georgia and he and I have been friends for a long time. So, we’ve heard each other’s lectures. We know everything that each other does and he had two of these rock star songs that he was using. I will tell you at the end which two they were because I don’t want to give them away quite yet.

When the first book came out and did very well, we were sitting around drinking around one night and I was like, well, we need to write another book, we need to have a follow up, which still hasn’t happened yet and we sat down and created a whole paradigm of 14 of these rock star pitches and so Chris started it and I kind of took the ball after it and together we’ve come up with all of these, but I have, I’m more active with it than he is right now. He is pretty busy running his entrepreneurship program and one of the pitches that we will use to date, today, is one of the pitches that he actually won and, you probably didn’t see this, ESPN didn’t cover it very well, but he won the collegiate elevator pitch competition using one of the models that we will go over. So, this is the work of both of us, let’s say it was 50/50, I’m just the one talking about it today.

John:

Everybody requires a marketing voice and you certainly have the voice of America and the voice of startups, listening to you on your amazing radio show and it sounds like a great partnership and I want to talk about that too with you. Obviously, for you to decide to go into business with somebody, the relationship of having a right partner is a key to being successful in any startup.

Jim:

That’s very true.

John:

But, you know, that’s a key factor. So, sharing the credit, respecting everybody’s talent. Would you say that finding the right person to either be on your team or be a co-CEO or co-partner in something like you just did with rock stars in elevator is probably you want to look for somebody who has other skills that you don’t have that compliments you so that the two of your are stronger. If you were both really great at hosting a radio show, for example, or being the voice of something, then you may not need each other, right? So I think it’s always good to look for somebody who has something that brings to the table that you don’t really like doing, maybe.

Jim:

You know, there’s a fascinating book about this written by one of my friends named Joe Abraham from the Chicago area called Entrepreneurial DNA and he has the belief that there’s four times of entrepreneurs. There’s builders, opportunists, specialists, and innovators, and look for example Bill Gates versus Richard Branson. Incredibly different models of entrepreneurship. Branson has done 400 different business and is really not involved in any of them and Bill Gates spent 30 years at one business compared to Tomas Edison who’s really not even an entrepreneur. He comes up with new businesses like GE, but he rather be involved in the lab and just giving stuff away.

And so, I believe after reading this book by Joe Abraham that it’s more important to find someone who has a different entrepreneurial DNA than to find someone who has a different skill set. Two marketers, a marketer and a finance guy, if they’re both opportunists will run the business into the ditch. So, I would wholeheartedly recommend this entrepreneurial DNA philosophy and you can go and take a test at BosiDNA.org, I believe. It’s either .org or .com and it will tell you what type of entrepreneur you are in terms of builder, opportunist, specialist, innovator. It’s a fascinating way to look at your own personality and learn about yourself. I would use that metric before I would put a marketer with a finance. I don’t have a problem having two marketers together if one is a builder and one is a specialist or something like that.

John:

That’s a wonderful, unique perspective. I love that. I’m definitely going to get the book as well as going to put that link where people can take the test in the transcripts. So that obviously begs the question, Jim, which of these four entrepreneurs are you? A builder, opportunist, innovator, or specialist?

Jim:

I’m a builder. I like to build it and soon as it’s up and running, I lose interest in it pretty quickly. I’m the five year in and out type guy. I would rather build it, get it running, and then turn it over to a professional management team. I’m not a great manager, I’m a better builder along the way, I believe.

John:

It’s so important to know what you like to do and how to best to suit that. One of the things that really stands out for me in your fascinating bio is the fact that you’ve been to the white house more than once. Can you tell our listeners how did that happen and what’s that like to be there?

Jim:

I’ve been there several times, most interestingly to pitch. I was actually pitching a business there, so that’s very relevant to tonight’s discussion, but also I was invited to the White House Christmas party this same year and that was an amazing experience as well. They have several Christmas parties every year, they just don’t have one, but it was still an amazing experience just to see the beauty of the White House at Christmas. You go through and look at every different tree. There’s a different tree in every room and to experience it at a social level. The times I had been before,

I was there to pitch different White House officials for business that I was raising money for and so it relates exactly to what we were talking about and this business, I believe, it’s one of the coolest, sexiest businesses I ever run across. It had a pre-revenue valuation in the 15 million dollar range, which is one of the highest pre-revenue valuations I ever heard of.

So, I was hired to go and help raise money for this business at what I think we would all agree was an asinine pre-revenue valuation and the White House is one of the places that we pitched. It’s a health care business and so it relates directly to health and human services and the Obamacare law and so we were there to pitch to the White House officials I think the thing that was absolutely the most shocking and a little bit discouraging was that the room that we were invited into had absolutely no technology in it and…

John:

Oh, you’re kidding.

Jim:

So, we were literally, you know, here they have, what 1.9 trillion dollars of tax revenue of money to spend and myself, the founder of the company, three or four White House officials were literally crowded around a laptop computer in the White House, because there was no way to, you know, present normal, you know, no screen, no projector, nothing like that.

John:

I’d love to have a picture of that to show people. Pitching for most people is very nerve wreaking and I work with a lot of clients on confidence building and making sure that they’re prepared so I say don’t get rid of the butterflies in your stomach, get them to fly in formation, but I can’t imagine upping the anti so much that not only do you have to pitch, but you have to pitch at the White House and in a situation where you don’t even have technology, so you really have to prepare. Can you take us back to that day of, did you have butterflies in your stomach, more so because you were at the White House? The whole intimating, yet beautiful place. Did that make it more difficult or were you just excited?

Jim:

It was more of the excited type response. You know, just walking through the hallways and you would see the plaques on the office doors where it would say, White House Chief of Staff you would go past and the next office would be White House Counsel and you would know that used to be Hilary Clinton’s office and, you know, just the pure aura of the history, the excitement, it was not that nerve wreaking. It was not. I have presented in other situations where, for example, if I didn’t get the money, I was going to lose my house and end up taking up my two young children and living in a car or something like that. That was much more nerve wreaking.

I have been in that experience where the outcome of the fund raising would determine bankruptcy or not and I have gotten to the point where one day I got a letter from the bank saying you have 28 days to move out of the house, because we are repossessing it. That was much more nerve wreaking because there was a wife at home who was trying to find out of – you know, needed to start packing her clothes and personal items and stuff.

So, pitching can be both exhilarating and frightening. I think that once you’ve done it a bunch of times and I’ve done it a bunch of times at this point that hopefully it should be fun for you. I get to the point where I enjoy it because it’s an opportunity for you not only to shine, but it’s an opportunity for you to learn what other people think about your business. When you’re pitching, you think, you know, I’m here to get money, I’m here to get money. That’s a really bad attitude. I think you should go into it with the attitude, I’m here to learn more about my business from other really smart people and who may happen to decide that they think it’s sexy enough to want to invest in.

John:

Well, I want to go back to what you said a minute ago, because you know, pitching for money versus pitching to learn is such an important distinction for people. It’s all about the energy you put out and the mindset. If you have any insights, because much like, dating for example. No body wants to date someone who is desperate and if you, even when you have that financial thing hanging over your head, right, foreclosure or if I don’t get this money this business goes out of business, all that work and effort.

 

How did you take a breathe, compartmentalize that maybe and say, even though I’m under pressure, I don’t want to come across as desperate just like I don’t want to come across as desperate on a first day. Do you have any tips and suggestions for the listeners on even if, no matter how much pressure you’re under, how to deal with that and not come across desperate.

Jim:

Well, it’s so easy to come across desperate and you also have to be very honest with them. If you hide the fact that you’re desperate and they learn about that later, so they start the due diligence and they wake up and go, wow, this is really ten million dollars in debt. You’re going to seem dishonest and very deceptive. You told me how great the business is, but you’re hiding the biggest fact of all of the business. So, what we ended up doing and what I ended up learning was let’s take the dirty laundry out absolutely in sentence one and start off like this. I would like to tell you about the only business that’s ten million dollars in debt, 27 days away from bankruptcy that you’re still want to invest in!

John:

Wow, that’s a powerful opener.

Jim:

It really is. It totally – they’re like, okay, I got to hear more about that thing, because there’s a never business I’m going to invest in that’s ten million in debt, the venture capitalist or the angel would think, but if you can then give them one or two sentences that sort of their, you know, well, you’re right, maybe I do want to invest in this. We have 95% market share. We are 60% profit margins. We’re still growing at 300% a year and we’ve only got about 2% market share.

Well, okay, maybe I do want to hear about that. How are you stupid enough to get ten million dollars in debt would be the follow up question that you would expect to hear, but what you’ve done then is you’ve done all the pitch stuff that you want to do which is get them enticed to make them want to hear more, make them beg to have a follow up question, but also you’ve proven how incredibly honest you are and you’ve established a wonderful foundation for just an honest relationship.

I believe very sincerely in pitching and dating, you know, I was divorced and had to go out into the dating world with two kids and an ex-wife. That’s the first thing you tell someone. You meet a good looking girl, the first thing you should say is, you know, I know you never wanted to date a divorce guy with two tiny kids, but I’m the one you’re going to want to date, you know.

So, I think that whenever you have a bad thing to share or you are incredibly nervous. I think that’s probably where you should start. This is the first time I ever given a pitch in front of a real VC and so I just want you to know that and so I may come across as a little bit nervous because I am. However, I still believe in this business very, very much. I always lead with, you know, your weakest thing. I am here to sell you a $400,000 car. If you can’t afford a $400,000 car, you want to stop the negotiation really fast and not waste your time. So, if you walk into a Rolls Royce dealership, the first thing they’re going to say is, here’s a beautiful $400,000 car. Are you still interested and you know, if you go, well, that doesn’t scare me. What color is this come in? They know they have a hot customer or a hot lead.

John:

I love what you said so much because people are judging us whether they want to invest in particular on so much more than just the idea. It’s all about character. Do you have integrity? Are you someone I like? Do you, are you going to be honest with me? And what you just shared Jim is so incredibly helpful because you showed how to give a statement in three different examples where it’s enticing, but incredibly open and airing the dirty laundry up front so that there’s no secrets and yet people are still intrigued when they would think they would not be because you’ve got that element of surprise in there. So that’s really great structure and so amazing. Well, I really want to get back to the rock stars and elevator, because it’s just a great concept. If there’s anything more you can talk about or share with us, an example of a song or how you’ve tied that in.

Jim:

Sure. Well, there are actually 14 songs that we’ve selected. Each one leading to a unique and sexy value proposition and so let’s start off with Lady Gaga. You could also replace it with Madonna or that girl who keeps taking naked pictures of herself, Miley Cyrus, right. Why did these actresses, rock stars, try to shock and provoke us? It’s because shocking and provoking things attract our attention. Anything that’s new. The concept of just newness is going to attract our attention.

For example with Lady Gaga, I don’t think I had ever heard any of her songs, but I already knew she appeared at the Oscars wearing a meat uniform. Remember she showed up with a meat costume and then like a week later she went to the Emmys inside of a big egg and had four guys carrying the egg and why does Madonna like to go on stage and kiss other girls on stage? It’s to shock us. To make us think, wow, that’s a new idea and when you hear something new, you intrinsically want to find out more about it.

So, the elevator pitch for the very first year of our summer camp business was we run computer summer camps and people would go, computer summer camps? I’ve never heard of that. That’s more interesting. Tell me more about, because instead of saying we run outdoors rock climbing, horse back riding summer camps, you throw in that new word, it’s the unexpected, exactly. So, any time you can shock people with the newness of what you’re doing, that’s a pretty good elevator pitch. I’m not going to say it’s the best. I think this is one of the weakest, but it’s still something that allows the listener to go, oh really? That’s interesting. I want to hear more about it because people love hearing new things that they’ve never been exposed to.

John:

So, 14 songs or examples, is there one that you think is one of your favorites besides the Lady Gaga example?

Jim:

Sure, we could go with another really important one would be Johnny Cash and the song for Johnny Cash would be A Boy Named Sue. You know, Johnny Cash is a story teller. If you listen to his songs, there’s almost always a story there. Why did this dad name a boy named Sue, so that the boy would be toughed up and so, we need to learn from that that when we make a pitch, we should try wrap it in a story so that people remember it.

People remember stories better than they remember anything else. So, in year four, the elevator pitch for our summer camp was, I take kids that have never been happy before and make them happy. Last week I had a letter from a girl named Alison and she said to me that she’s now smiling for the first time in two years. So, I’ll remember that. You’ll remember that because it’s got details. Two years. A girl named Alison. Smiling.

Now, instead of saying, we had a camper who had a really great experience. You don’t remember that! Instead I tell you a true tangible story that reenforces the general theme that we’re talking about and the reason the business was so successful was because we really did take unhappy kids and make them happy. We thought we were teaching them computers.

In year two or three what we found out was we’re taking unhappy kids and making them happy and a parent will pay anything for that, you know, pay anything for that. So, the Johnny Cash theme or the point from Johnny Cash is, always try to tell a story, because people remember stories better than anything else.

John:

We’re going to tweet that out, for sure. People remember stories better than anything else and what I really like about what you said is, the way to make your story incredibly memorable is to give specific details. Not just any story of any child, but how did this one particular person because happy through this experience and then everybody can broaden it out to well, I want my kid to be like that, so I want that and if someone is pitching something. If you can tell a story of one customer whose problem you solved and how much that changed their life then suddenly that’s a memorable story. It’s the detail. It’s so great. Well, Jim, in the last few minutes, you know, people obviously should buy your book, Hack Google Maps. Do you want to tell us real quickly what the big takeaways is, I mean, the title along is intriguing. You’ve got my lizard brain curious about how do I hack a Google map.

Jim:

Well, we’re going to give you screen shot by screen shot for hacking anything on Google maps. The story started, my co-author Bryan Seely was at a McDonald’s play land and was bored and from a McDonald’s play land was able to go on Google Maps and reprogram the CIA and the FBI contact information so that if you called the CIA, you actually his cellphone instead.

The end of the story is that it’s a 200 billion dollar a year problem in the United States affecting mostly consumers and small businesses and there have been entire industry devastating, destroyed, because Google has let this flaw in Google maps persist for the last ten years. They’ve done nothing to solve it.

They know that the problem is there and now the chances are if you call a lock smith in the United States, the chances are about 95% that you’re actually communicating with the Russia rob and it’s a really sad story and it’s start off with just changing the FBI and the CIA contact information, which you can do under 30 minutes from a Mcdonald’s play land wifi. So, the book tells that entire story, but most importantly it tells you as a small business owner how to prepare your business so that you’re not a victim of this.

John:

That’s so important. Well, how to prepare yourself so you’re not a victim of that. Hack Google Maps is a book that you’re definitely going to want to get as well as the one you recommended, Entrepreneurial DNA. We want to definitely subscribe to or listen to School for Startups Radio and how else could someone reach you Jim? How else could people find out more about your rock stars in an elevator or book you for a talk?

Jim:

I’m at @EntrepreneurJim on Twitter and SchoolforStartupsRadio.com is the radio show and if you wanna see about the different speeches that I give, you can go JimBeach.com and all of the presentations that I give are there including a really great presentations on how to hack LinkedIn. We’ve done that as well. So, you can get anyone’s email address off of LinkedIn. Rock stars in an elevator is also one of the presentations there as well.

John:

How to hack LinkedIn or the CIA. You might be getting another invitation from the White House for a whole other reason, right?

Jim:

Or jail somewhere. Yes. I’m always looking out for five black SUVs to show up and mysteriously make me disappear. So, we’re looking for that as well.

John:

You have way too much value and insights to offer the world. You’re not going anywhere. I know we’re so grateful for you being on The Successful Pitch. Look forward to hearing you interview other people who can tell us about how to be successful and you certainty model that for everybody, Jim. Thank you again.

Jim:

Thank you so much for having me.

TSP005 | Andrew Ackerman – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Hi, welcome to the Successful Pitch. Today’s guest is Andrew Ackerman who works at DreamIt Ventures. They have one of their companies that you might have heard of called Meerkat, which has taken incredibly with Twitter. He said that Meerkat is an overnight sensation two years in the making. So, be sure to listen to this episode to find out about Meerkat. Andrew himself has an incredible background as an entrepreneur where he was part of a team that started a website for parents who wanted to keep track of their children in summer camp. Back in the late 90’s they literally were getting customers through trade shows and having a five second pitch as somebody walked by a booth.

Today he has many more detail insights as to how to pitch him as well as any other investors, which includes tell me the one thing that makes you special, whether it’s you have the youngest employee ever on your team from Apple or you have 70,000 users already, so you have a lot of traction that no body else has. Don’t make him dig around your pitch deck to find that one thing to make you special to get him engaged. He also gives incredible insights on virality. There’s such a thing as negative virality or weak virality or something that’s inherently viral or, ideally, something that’s necessarily viral such as Evite. He talks about the differences between LinkedIn and Facebook and so much more. You’re going to have a great time listening to Andrew Ackerman, thanks.

Welcome back to the Successful Pitch. Today’s guest is Andrew Ackerman who is the managing director of DreamIt in New York. He has an incredible background. They describe him as a recovering consultant turned serial entrepreneur. He has a fascinating story about how he lend Bunk1.com from scratch to the lending provider to web services and DreamIt Ventures has an incredible array of startups. They have helped over 178 companies that now have over $500 million dollars in value, so we’re are very happy and excited to hear Andrew’s insights on what it takes to be a successful startup and how to get funded. Andrew, welcome to the show.

Andrew Ackerman:

I’m happy to be here.

John:

Andrew, I would love to have you tell our listeners a little bit about your background before we hear what you’re doing now starting with Bunk1.com. How did you come up with that great idea and tell us a little bit about what that was and that journey if you will.

Andrew:

So, I love to take full credit for it, but I can’t.

John:

That’s okay.

Andrew:

I could probably get away with it, I’ll tell you why. The founding team were three people. One of them, his name was Ari Ackerman, we’re not related. So, everyone would come up to us and say, oh it’s really great two brothers starting a company together and the irony is we haven’t even met until – we met through the third founder, David Gomberg, who I went to business school with his brother and had known him for many years. So, ironically the other guy with the same last name as me, I hadn’t met until we got together.

So, I was chief operating offices and the head of product. I was the third person that Dave and Ari had the idea. Eric was actually, Eric is David’s brother, Eric and I used to go out to dinner every couple of weeks and we would talk about all the really, really dumb dot com ideas that were coming across our plate. You have to understand that this was 1999 and selling ice on the internet seemed vaguely reasonable for people back then. We would play games and he would tell me about one ideas and I would turn around and bust him for him and vice verse. So, he started telling me about the idea SAAS, software as a service, startup for the summer camp industry. It’s a suite of services aimed at the camp director, everything from photo gallery, which think back in 1999, this was revolutionary one-way window into the summer camp experience. That was our marketing verb-age.

John:

Right, I love that. It’s like pre-Instagram.

Andrew:

We’re talking pre-smartphone here. There were these things that we called camera that people used. So, there was that and we had communication tools that would let you communicate with your camper while they were at camp without them being anywhere near a computer. It’s printed out and handed to them and we even had a fax back service with bar codes on the top of the stationary. Pretty revolutionary stuff for the time.

John:

How did you find out there was a problem that parents needed to have that window into their children. I find that – because parents obviously miss their kids and the kids miss their parents and get homesick. Was that the driving problem you were trying to solve or was it more a spy..

Andrew:

It’s actually very interesting. It was – no, no it wasn’t spy. This was a time where everything was being re-imagined. I mean, now we think everything is being re-imagined. Now we already have a little bit of a guideline, somethings work, somethings don’t, back then it was totally like selling ice on the internet might have been reasonable back then, right, so everything was being tried. The things that attracted us to the summer camp market were, it was one of those kind of sleepy little niches that are much bigger than you think. They are relatively easy to get in touch of the decision makers. This is what I call B to B to C play.

John:

B to B to C. I love that.

Andrew:

So, we pitched to the camp directors by enlarge, we explained the value of the idea, which pain points it met for them, and then if we solved these problems for them, they were thrilled and we could then, you know, help service their parents and market to them relevant services only.

So, for instance, the biggest thing the camp directors were getting in the 1999-2000 eras was, “Why can’t I see what’s going on at camp?” Parents actually missed their kids, until then, it was just something they sucked up and lived with because that’s the way it was, but both the a-trends people were expecting to be able to see these things, because the internet was showing them they could and on the flip side, you know, parents were just more nervous than they used to be. They want to be reassured that their kids having fun all the time. So, yeah, it’s a little sick.

So, what we did at – sorry the other pain point was for the directors, they were painfully afraid of anything bad that might happen if they put a photo up. Some pervert somewhere would get a hand off and I don’t know, do something with it. So, the security element was something that was very important to them, they knew they couldn’t do on their own and they were just extremely concerned about the overall load, because back then even uploading a photo, anywhere, was a little technically challenging. So that was the initial pain point.

In fact, it took us a while to get the pitch right on that to the customers. We would go to trade shows, which were a fairly effective way to get customers in a B to B to C environment and we would start talking about, you know, does your company have a website, and they’ll go, “We got that already.” You can imagine what it looked like in 1999. It’s like three pages with a telephone number at the bottom. That was about it. They would keep walking.

So, we needed to come up with literally a five second sentence that would get them to stop in their tracks and turnaround. That’s, you know, as an entrepreneur when you’re pitching customers in this kind of time starved environment, being able to hook them with something quickly is critical. So, ultimately what we ended up coming up with is, you know, they’d say, “But do you have a password-protected photo gallery?” and immediately that stopped them in their tracks, because none of them had photo galleries to begin with. They certainty didn’t have password-protection. So, that immediately cut through with both a need and address their chief objection to it.

John:

Got it. That’s so helpful for the listeners. Let me just recap that for everybody. That five second pitch to people walking by your booth at a trade show is such a great example of the kind of urgency that you have to have when you’re pitching someone like you know that’s an investor, wouldn’t you agree?

Andrew;

Yeah, so the flip side when you’re talking to an investor, you need your elevator pitch obviously for that phrase before, you want to give them something, you have maybe a little more than five seconds. You got 30 seconds or so, but the key and it’s brutally hard for some people is come across in those 30 seconds giving some idea what you do and enough of a reason for them to say, damn, I want to spend another two minutes and learn more. I want to ask a question.

The mistake people make is they think they need to say everything. You don’t need to say everything. You need to say just enough so the guy you’re talking to leans forward and goes, “Oh, that’s interesting, but how do you X?” And the moment they ask how you do something or are you worried about something, are you in competition with so and so, you’ve bought yourself another minute.

John:

I think that could be a really tweetable moment right there. Don’t pitch everything, just enough to get them to lean forward.

Andrew:

Works for me.

John:

And want to know more. Yeah, great. Thank you. Really helpful. Alright so back to your story where you’re at the trade show, you’ve got some people who understand the pain points, you addressed both the need and the objection they had to not using and you start to get some traction with consumers, actual parents in the camps, how do you then raise money for that?

Andrew:

So, quite interesting, we actually didn’t. We were bootstrap. We gotten some interest. It’s a little bit of a tragic story, so no, no, not just for us, tragedy was not on our end. We had some, you know, good angel money to come in, friends and family money, and then we went to the rounds. We took it in front of (#10:06?) prior fund, he passed on us. Nice guy but he passed on us. We had talked to a couple of different VCs and we actually had a term sheet from one of them. A VC called Great Auk, which was actually the venture arm of Cantor Fitzgerald and we had that in our hand in the summer of 2001, so you probably know where this story is going. Cantor Fitzgerald’s offices were on one of the high floors in the twin towers.

John:

Wow.

Andrew:

So, we had decided that we wanted to wait until the end of the summer, because at the end of the summer we had metrics. It’s a very seasonal business obviously. So, we wanted to wait until the end of the summer and maybe revisit the terms and then obviously tragedy strikes, right. No other way to put it. The people we were talking to were still around, but clearly they had more important things to do than to talk about investing in a startup at that point.

So, we ultimately didn’t raise and a bunch of us went without money for a long time, without salary for the better part of the year plus and then we turned it around and we were crash flow positive within year two. Very, very narrow cash flow positive, but we were in the black and then by year three we were able to start taking a little bit of salary and we kept growing from there. So, that was great in terms of our own shares in the company.

The downside that only became obvious in retrospect is that having a professional investor there I think would have focused us a little better, would have pushed us a little harder. They were some things that we did that we didn’t do fast enough. They were other things that we did that maybe we shouldn’t have wasted time on and having somebody on the outside who has kind of seen people make these mistakes before could have sat us down and say, why are you doing this, right? What really does this do for you?

John:

Well, clearly this experience was invaluable to you getting to where you are today at DreamIt Ventures where you really know what it takes and the dedication and the willingness to overcome tragedies on a large scale, persevere through no salary, breaking even and then making profitable. So, how did you, what was your big next step from that startup to getting into the other side of the table as it were?

Andrew:

So, that was, just to give you kind of the timeline there, so we started DreamIt in 2000, 1999-2000, it’s still going strong. I had gotten bought out in 2008, so pretty much the very end of 2008, I got my last payment, shake hands with Ari, he’s still in charge of the company. It’s still alive and kicking.

At that point, an opportunity fell in my lap to manage a family office. So, for the, you know your viewers who are not quite familiar with that term, a family office is basically the in-house investment arm for a high net worth individual. We’re a family of high net worth individuals. In my case, it was just one man, an older European gentlemen.

So, it was kind of a mixed bag. I did everything from really boring hedge funds and private equity funds all the way to really interesting direct angel investments. We were one of the first investors in Artsy, for instance, which is a great art tech startup. They just raised,I think the b around this past month. We also bought shares in the secondary market. So, we bought shares of Facebook in early 2009, which was before all these trading platforms like SharesPost were doing anything like that and did a number of investments like that and that was far more interesting to me. I had been approached for that position, because the idea was I got to do all that stuff and incubate a couple of startups that he wanted to build on his own. Unfortunately that second piece, so first of all, what else happened in 2008-2009? The financial world basically collapsed.

John:

Well, there’s that, yes.

Andrew:

That little thing. So, I spent the better part of the first year and a half fixing up the portfolio, you know, we were gated a lot of redemptions when it comes to hedge funds, which basically means they freeze your money, you can’t have it, that was fun. The private equity funds we were like, great, everything is selling for 0.37 cents on the dollar, so that mean they were calling money, which meant we had to write checks we couldn’t free up other money. So, it was a little bit, there was a good reason we weren’t doing a lot of incubation for the first year or two, but ultimately though we started turning towards it, but that part of job never really turned out to be what it was going to be.

So, while it was very, very interesting on the investment side, what really attracted to me was the other half, the ability to be a mini incubator or a mini accelerator. So, when that didn’t pan out, I took another shot of the startup world. A company called LayerCake, which I was bought out of as well, but that one isn’t around anymore. So, I can’t put in a good world for them the same way I can for Bunk1 and then I was ready to start a third startup. There was a third startup I almost did and I decided not to pull the trigger on for a variety of reasons and it was probably one of the harder decisions I ever made, because I gotten very emotionally invested in it, but when I took a cold hard look at it, the odds were stacked against it.

John:

Let’s take a moment and talk about that, because that’s so important for the listeners to really understand that you can emotionally fall in love with an idea and a potential startup, but you need to be that passionate, obviously, to make it work, but you also you need to step back from what I call the right-brain world, the emotional is to the left brain and most tech people tend to be more left brain oriented and I’m trying to get them to right brain story telling, but in this particular case, it’s all about you are passionate and committed to something and emotionally invested, as you described it, but you also have to make some rational business decisions, so it’s a constant back and forth between the left brain/right brain, analytical story telling, emotional engagement, it’s so important for people to realize that just because you’re in love with something doesn’t necessarily mean it’s the right thing to pursue.

Andrew:

So, I had an advantage, right. I made a boat load of mistakes at Bunk1. None of them were fatal, but we did make a lot of mistakes. It helps a lot to help done it wrong, once, and survived, so when I started looking at other companies, you know, I had a little bit of distance from them and I was able to step back and also my potential co-founder on that one also, you know, he had been in a couple of startups also so we’re able to dispassionately. So, the key thing is to be able to see it through the eyes of a potential customer and a potential investors. If there’s one skill that’s absolutely critical for an entrepreneur, believe it or not, it’s empathy.

John:

I love that. One skill critical for an entrepreneur it’s empathy. Being able to put yourself in the investor’s shoes and the customer’s shoes, right?

Andrew:

Exactly. So, sympathy is like I feel bad for you, empathy is I feel what you feel. So, your ability to put on the persona of your customer or customers and see what you’re building through their eyes and ditto for an investors, that’s critical. It’s tough because you have to forget a lot of things that you know. So, for instance and I’ll make this concrete, the startup that we were looking at was in the book discovery space, which a couple of years ago was quite hot. We were looking at still a novel idea that I don’t think anyone has ever done, but it had three issues with it.

So, number one, the space was getting crowded. So, difficult to stand out. Number two, it was a little complicated to explain, which is not horrible if it’s not a crowded space, but it’s a lot harder in a crowded space. There was no five second, stop, turn around, come back to your booth type pitch for it, and the last piece of it is it didn’t have an inherent virality to it.

So, there’s certain businesses where, I kind of think of a scale of virality. On the one extreme there’s negatively viral companies. I mean, they could be good companies, like take Ashley Madison, right, there are some very happy customers there, but they’re not going to tweet about it because they just cheated on their wife or husband. So, you get no virality out of that, you have to find a different way to make that a good business. You’ve got stuff like Microsoft Word, which is, you know, no one tweets about Word, it’s not like that.

John:

I got it. It’s really helpful. So, negative virality, I love that. That’s a great definition.

Andrew:

Word is neutrally viral and then you’ve got stuff that are weekly viral, which could be like a game. Oh, it’s a really great game, I’m going to tell my friends, but okay, maybe I won’t, maybe I forget. If I’m the only person on earth playing this game, it’s good to me. Where it starts to get interesting is when you start to get into companies that are inherently viral or necessarily viral. So, inherently viral are the ones where my experience gets better if you use it, like Facebook, network effects. If I’m the only one on Facebook, it’s pretty bloody useless, but if a couple of my friend’s are on it, it starts getting interesting and if lots of people are on it, it gets more interesting. LinkedIn especially, it gets more interesting the more people I don’t know who end up using it.

John:

That’s great. It gets more interesting the more people I don’t know. That’s fascinating.

Andrew:

Because it’s discovery. If everyone I know is using it, you know, okay, on LinkedIn there’s no value, because I already know them. Facebook is the other way around, they are actually people I want to keep track, but too bloody lazy or busy to actually call them.

John:

That’s a fascinating distinction between Facebook and LinkedIn and I think it’s worth taking a second to use that, because it’s such a valuable example of what you just described as something inherently viral, but different. So, Facebook is inherently viral because you’re keeping in touch with people you know and want to stay in touch with or have lost touch with where as LinkedIn, it’s inherently viral, but for the people you don’t know as oppose to Facebook for the people you do know. I really like that. That’s so valuable, Andrew, thank you for that incredible insight.

Andrew:

My pleasure. Now, there are other examples as well and there are ones where it’s not so immediately obvious, but let’s take Netflix for instance, right, so Netflix we don’t think of as social network, but the value of Netflix increases and Amazon as well, because the more people use it because the recommendations get better. So, there’s kind of a data scope issue that makes it better, but there’s even a better, more viral element, which is when it’s necessarily viral. So, if you remember the original evite or the more modern incarnations like Paperless Post.

John:

Yes.

Andrew:

I can’t use that service without telling someone. I can use it to like invite people in my party, but if I don’t put their email addresses in and hit send, it’s useless. I haven’t used it. So, there are certain tools which by their very nature you have to tell people.

John:

Would you say that’s one of they key areas that you’re looking at now at DreamIt and the other people on your team there is looking for things to invest in that are either inherently or necessarily viral?

Andrew:

So, yes, but not exclusively. So, you know, I’m going to broaden it a little bit. This is a typical consultant answer. I’m going to answer the question I want to answer, not the one you asked. So, what we’re looking for actually are companies that have the potential to be big scalable businesses and we can help them gt there. So, that includes B to B and B to C companies. B to B companies very rarely have the same kind of viral loops.

So, the kind of more general thing we look for there is with companies that kind of cracked the sale cycle or close to cracking the sale cycle. They understand how their user is, not just, oh, we’re going to sell to more mid-size businesses, not just we’re going to sell to, you know, accounting firms, but the purchasing manager in an accounting firm has the budgetary authority to buy our product and can make a decision within two weeks.

John:

Really specific, really narrow.

Andrew:

Really understand exactly who’s going to write them a check and understand, you know, what’s the lean forward phrase that gets their attention, it keeps them on the phone, and how they’re going to reach them.

John:

That lean forward phrase goes all the way back to that five second pitch when you’re at the trade show. I love it. The lean forward phrase of who is going to write the check and we know how long it takes them to make the decision to write the check at the purchase order level. That’s brilliant. Let’s talk a little about, since we’re getting close, this has gone by so fast, your experience at DreamIt. Can you expand upon, you know, one of the big companies now that are on your company’s website is Meerkat that everyone is so excited about. Can you tell us about, you gave me a phrase earlier that I’d love you to use about overnight hit. Tell us a little bit about Meerkat.

Andrew:

Sure. So, I think the phrase you’re referring to is they were an overnight sensation, it was two years in the making.

John:

Yes, exactly. We’re going to tweet that out for sure.

Andrew:

So, first thing, they went through DreamIt Austin, so let me just roll it back. We have accelerator cycles in multiple cities. We started in Philly in 2008, which makes officially now the second oldest accelerator in the world. We used to be mumber three, but now Y Combinator is not an accelerator anymore. They’ve actually just admitted it. So, Techstars is now the oldest followed by DreamIt. So, since 2008, we’ve run programs in Philadelphia, in New York, in Austin, we also have programs in Baltimore, which is specifically for DreamIt Health, health tech focused companies.

Net we’ve done 178 companies so far and Meerkat has been very much in the news, so the background on Meerkat, which I promised you, they went through DreamIt Austin in 2013, they’re an Israeli company, the core part of the team came over, they spent three months in Austin and at the time they were working on a company that was Yevvo and it was a social network for sharing videos. Still live video, but it was a closed social network. They re-branded as Live On Air and they were doing reasonably well, ironically with the Latin American teen set.

That was where they got some initial traction, they raised an a round and they were doing okay to very good. Somewhere in that range and then the founder as a side project decides to work on, you know, I wonder if I open it up and I integrate it with Twitter, that’ll be kind of cool, and then it just takes off. So, okay, Air is on hold, everything is Meerkat now.

John:

Wow.

Andrew:

There’s even a funnier story. So, because it’s our job to be on top of these things, we were familiar with Meerkat, but at first we didn’t know that back story, so there was a period of time where Meerkat was starting to trend and we didn’t know it was one of ours.

John:

Oh funny.

Andrew:

Until a VC named Charlie O’Donnell in the New York area, he tweeted out, very nice tweet, he said, hey startups, you know, Y Combinator is not the only game in town, Meerkat is an DreamIt alumni. So then it took us like a couple of hours to figure out the back story and confirm that they actually were. That’s good, right.

John:

What I love about that story is the ability to have the right team in place who has the savvy to try something and possibly pivot and that’s really where you get the scalability. So, you gave us some great insights as to what you and your team are looking for at DreamIt. It’s the big idea that can scale, really cracking the sales cycle, digging deep as to who the customer is on such a grandeur level..

Andrew:

Or if you’re B to C, say, if you’re a B to C the equivalent to cracking the sales cycle is really understanding the viral loops.

John:

The viral loops, yes, got it.

Andrew:

Either way, we want to know that you’ll have customer/user acquisition, you got a good plan for that. Sorry, I didn’t mean to cut you off.

John:

No, I’m glad. So, that’s just summarizing some key takeaways for the listeners. If someone wants to be considered for DreamIt, those are some key areas they need to have. A couple of quick questions for you towards the end. If you had one bit of advance for a startup pitching DreamIt, what would it be?

Andrew:

It’s hard to pick just one. I’m going to back to, if I had to pick the number one, it goes back to the comment I made about empathy, understand where we’re coming from. So, number one, we love working with early stages startups. We love meeting with you even if you’re too early, we love meeting with you. We probably spend too much time doing that from a purely, you know, blood and numbers perspective, but we enjoy it, that’s why we’re in the business. We’re all exit entrepreneurs. On the flip side, we see a lot of companies, so you need to really help us by getting very quickly to what makes you special.

So, we don’t need to know every feature or what the UX is for your company. We want to understand what’s that one thing that you do that other people can’t do and it can be different. There’s one company that came to me with a, it was a fashion text article, it was a shop-the-look site, I’ve seen literally dozen of shop-the-look sites.

I was looking at their deck as a favor, I was really like, I’ll be honest, half checked out by page one and then I get to page eight and they’re like, oh, we have 70,000 active users. I was like there’s something I haven’t seen everyday for a company like this. I said, well, how many of these are monthly active and they go, we don’t know, we know that 30,000 come in every two weeks. So, probably about 40,000 a month and I said, that has to be page one.

John:

Yes, don’t bury the lead as they say in journalism, right.

Andrew:

Exactly. For a company like that where they were trying something that a lot of people have tried and not yet succeeded at the thing that made me lean forward and say, oh, that’s special, is like they’re the first company to have any real traction at it.

John:

Got it, that’s really key.

Andrew:

A different company it might be the team. Like one of them, one of the youngest employees ever hired by Apple, right, and worked on their maps program and now he’s working on, at the time, he was working on a location based startup. So, it all kind of really made a lot of sense. So, you might lead with the team if that’s what makes sense. You might lead with what the product is that no one else does and why they haven’t been able to do it, but do me the favor and they don’t bury the lead.

John:

Great, thank you. So valuable whether it’s your team or your traction, figure out what that one thing is that makes you special and don’t make Andrew have to hunt through a deck to find it.

Andrew:

Don’t make me think, bad things happen when you make an investor think.

John:

If you had a book to suggest or a book that you really found useful, would you have anything off the top of your head that you could suggest to people?

Andrew:

Yeah, there’s one, this is for people who want to understand the mind of a VC.

John:

Oh my god, especially since empathy is key, that’s a key title, yep.

Andrew:

So, these guys are by enlarge they’re one or two stages ahead, further down the path, than DreamIt is, so it’s not exactly the same thing that we think of, but understanding the VC game is critical. So, it’s actually called Mastering the VC Game, it’s written by Jeff Bussgang. It’s really great because it tells you the right way to reach out to a VC, what they’re thinking, it tells you good questions for you to ask, I mean, you’re suppose to be diligencing them as much as they’re diligencing you. Things like, you know, pay attention to when they raise their last fund, because they raise their last fund over five years ago, they might not have any dry powder to invest in your company, so don’t, I mean, be nice about it, but don’t waste too much on them because they’re not writing a check. Things like that were extremely insightful and unlike so many business books, which are basically a 20 page power point, I have no patience for those. The signal to noise ratio on Jeff’s book is really high. It’s a good read and the quantity of information there is well worth the read.

John:

That’s great. The signal to noise ratio, I love that phrase. You really get a lot out of it, basically, and that’s what your pitch deck should do is have a really good signal to noise ratio. Well, thank you so much, Andrew. If our listeners want to connect with you, reach out to you, what’s the best way for people to follow you, your tweets, whatever, if somebody really wants to know more about you.

Andrew:

Very simple. Best way to reach out to me is just email me at [email protected]. Short emails are better than long emails. Long emails kind of go to, I will get to you later, which is unfortunately. Clear subject lines, I really like clear subject lines. Hello is not a clear subject line. Something like heard you on the Successful Pitch, want to talk to you about my company, right, or something like that. Don’t reach out to me blindly on LinkedIn, because I only, I don’t want to sound like a snob here, I only link people who I know well enough to either recommend or be recommended by, like how I use LinkedIn. So, if I have people I don’t know, it’s just not effective for me.

John:

Fair enough. Well, you were certainty generous to give us a great tip on how to email you with a great subject line, I heard you on the Successful Pitch. Any kind of warm introduction like that where just showing you’ve done some homework about who you are. That’s so valuable.

Andrew:

Absolutely. Warm intros are the best. I should have said that first.

John:

Yes, got it. Andrew, it’s been a pleasure having you on the show. Thank you so much.

Andrew:

Entirely my pleasure, thank you for having me.

TSP004 | Andrew Medal – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Hi and welcome back to The Successful Pitch. Today’s guest is Andrew Medal. What a story he has. From being in prison ten years ago to becoming a writer for Entrepreneur magazine and working for an angel investment company. You’re going to be riveted to hear how he did it and what lessons he’s learned and what he shares with us today on the show. He talks about how being in prison there is a hunger to survive and that same kind of hunger is what you need when you’re a startup entrepreneur.

He shares 5 secrets that he used to become a writer for Entrepreneur magazine that you can use to reach out to the right investors. He also has a great story about how he picked the wrong business partner and how to avoid making those same mistakes for you as well as avoid making the same mistakes with an investor. Just because you’ve made a mistake, doesn’t mean you should stop dreaming, he said. You need to paint a picture for an investor to understand your pitch. We came up with a concept of being the Picasso of pitches, so you’re going to enjoy the show. He’s got incredible insights and value, I can’t wait for you to hear it.

Hi everybody and welcome back to The Successful Pitch podcast. We’re thrilled to have today’s guest, Andrew Medal who has not only worked for an angel investment company, is pitching currently right now and can give us tips on that, but is also an incredible writer for Entrepreneur magazine that gives really valuable tips and insights on what it takes to be a successful startup and get funded. Welcome to the show, Andrew.

Andrew Medal:

Thank you so much, John. I’m excited to be here and excited to have a discussion.

John:

Great. What I’d love to do is, because you have been one of the few guests that have been on both sides of the table, as it were, I think people would love to hear how you got your job working for an angel investment firm.

Andrew:

Sure. So, I actually, that was, basically the beginning of my career, what I actually was doing, I was working at a hedge fund. During college I thought I wanted to be a stock broker, so I, we had something called the Bloomberg Terminals, which is the Bloomberg is, you know, is a one of the biggest and most known instruments in the financial world, so we had access to those terminals.

So, what I would do is spend my entire time on those terminals actually networking with different fund managers and people on the space, which eventually landed me an internship at a hedge fund, so I started off at a hedge fund actually trading and learning the market, eventually worked my way up to an analyst.

For a very brief time I was a trader, but that all happened around 2008 and our fund went upside down. So, my last paycheck actually bounced and I was stuck trying to figure out what I was going to do next. During that time, I had been, you know, just looking around and trying to figure out my next move and so I was talking to a lot of different entrepreneurs and a lot of different people that I knew that had started companies and these people all needed funding and so, what I did was I started looking for potential investors just out there that people that I have found that were making investments, so what I did was I brought pre-qualified potential investments with these different startup companies and people that I was meeting through this actual different angel investor groups and that actually helped me to get a position with a team, so that was my way into the angel investment world.

John:

You were doing two things that are really important for our listeners to learn from. One, you were networking, which is how you got your job as an intern and two, you were then able to start acting as if you’re already working for an investment firm. You take your broker experience and started brokering deals together and when you started doing that people said, well, we should have you as someone that’s working on a team at an angel investment, right?

Andrew:

Right, right, yeah.

John:

So that power of acting as if, so what was it like being on the hearing pitches. How many pitches would you hear on a week as an angel investor.

Andrew:

I was probably hearing – okay so, we were a unique team. We had different tools that we’re providing entrepreneurs, so they were paid tools that entrepreneurs can use and then we are also looking to place capital, so our business model was somewhat unique. So, based on that fact, I was interacting with a lot of entrepreneurs just in terms of talking to them about our different tools, you know, just interacting with them, I’ll get pitched all day. More formal pitches I would say probably, you know, 10-20 per week.

John:

Wow. Is there any one thing, Andrew, that stood out when you would hear 10-20 pitches a week of that’s a really great pitch or that’s a really bad pitch? One extreme or the other that would be helpful for the listeners to know if I wanna be memorable, here’s what I should do and if I really don’t wanna be at the bottom of barrel, here’s what I should not do.

Andrew:

Right, right. Great question, John. You know, I think for our team what we really focused on, I mean, this is like a match for everybody, you know, and says all the time and I’ve heard, you know, your other interviewees says this, but we would bet on the jockey, not the horse, right.

John:

Yep. You can never hear that enough.

Andrew:

So I think a lot of the times when we would find that jockey, that for us, that experience, that proven track record, you know, for us at least that role, that was what we’d look for. So, that always, you know, you know made our ears perk when we heard someone talking about proven track record or success or, you know, that’s not to say that they have to have experience, you know, because there’s a lot of first time entrepreneurs that don’t have experience, but if you don’t have that experience, explain to us or explain to your investors why you’re the right team, why it’s the right time or why are you the right team to actually execute the vision that you have.

John:

I love that. We’re going to make that a tweetable moment from you, it’ll be why you and why now.

Andrew:

Right. I love that.

John:

Make sure you have answers to those two questions, correct?

Andrew:

Right, right.

John:

Andrew, you have so much insight, what would you say is the importance of being able to tell a good story?

Andrew:

That’s extremely valuable. You know, I think that actually, really, when it comes down to it at a fundamental level, I think the difference between someone who will get the funding that they’re looking for and someone who will not, comes down to their ability to paint the right picture, you know, funding and raising capital and pitching, you know, same with projections and putting together the pro forma. I mean, it’s an art, not a skill. You really have to be able to know how to paint that picture, because there’s so much that goes into, you know, what you’re opportunity is, but then you have such a small window to really captivate whatever audience it is that you’re looking to captivate.

John:

Andrew, you’re just full of incredible soundbites for the listeners today. Your ability to paint the picture determines whether you get funded or not, so I’m going to say that Andrew Medal says, if you wanna be the Picasso of pitches, paint a picture.

Andrew:

I love that.

John:

You like that?

Andrew:

Yeah, that’s awesome.

John:

Great. So that’s it, listeners. Become the Picasso of pitches by painting a picture that investors can easily understand and remember, if you need to learn how to tell a story, that’s when you need to reach out to people who an teach you that skill, because it is a skill and an art and it’s not something you can just go in and wing it, right? Not if you wanna get funded. There’s too much competition.

Andrew:

Absolutely.

John:

Would you agree?

Andrew:

Totally agree.

John:

Now, let me ask you, if I may, about the recent story in the charity you’re involved with called Last Mile. Can you tell our listeners your experience of what you learned from talking with inmates and how that relates to being a startup entrepreneur?

Andrew:

Absolutely. I’m involved with a charity called Last Mile Project and early on what we were doing as a charity, we were going in to different institutions and actually teaching a course on entrepreneurship. The charity has pivoted a little bit as of recently to where they’re actually teaching inmates how to code now up in San Quentin prison, but I’ve learned a great deal going back into the prison system and teaching entrepreneurs about being entrepreneurs, I’m sorry, teaching inmates about being entrepreneurs.

You know, there are a lot of parallels in the prison system as they are in the startup world, as you mentioned, I’ve written about this on Entrepreneur, you know, for one, there’s this hunger in the prison system that is reminiscent of the startup world, except, you know, I’d say the hunger goes in a little deeper and further in the prison system.

I feel like you’re not, you know, until you realize the things that you take for granted on a daily basis and the things that we all, you know, the things that we take for granted on a daily basis until those things are taken from you, you don’t truly understand what you have. So, when you’re in prison, you have no internet connection, you have no access to, you know, a free phone, you have ability to watch the things you want on TV, you have, you know, very limited resources, your most technologically advanced instrument is your number two golf pencil.

If you want to go – you just have ample time to just sit and reflect and, you know, a lot of people have big dreams and they may have made mistakes, but that doesn’t mean that they don’t dream big and have big visions for their life. It just means that some of the decisions they made in the past don’t reflect, you know, those decisions that they’ve made that caused them to be there.

John:

I love that. Just because you’ve made a mistake, doesn’t mean you should stop dreaming.

Andrew:

Right.

John:

That is such a great takeaway for the audience and to not give up, right, and to, it’s almost like being in prison and being an entrepreneur, I would say, is almost like survivor in the business world where you have limited resources and you’re literally hungry, you have to be hungry for the deal and you have to be persistent and not give up when all the odds are against you and still hold on to your dream. That’s such great work. I would love to know how did you get your job at Entrepreneur magazine, because again, that’s an extremely competitive place to land, to establish yourself as an authority. Obviously for investors that you’re pitching now for your own startup, tell us how did you come to decide, oh, I wanna write for entrepreneur and how did that all happen.

Andrew:

Sure, so ever since I was younger I knew I wanted to be a business man and I knew I wanted to have a bunch of startups and multiple companies and within that same vein, I knew I enjoyed writing and I knew that I wanted to, you know, be able to write for, you know, publications of that caliber, you know, we spoke offline and I spoken a little bit about my past, you know, I made a mistake ten years ago and it ended up causing me to eventually do two years in prison. So, actually while I was in prison, I used to hand write articles to entrepreneur and mail them via USPS.

John:

Wow. Talk about an old school..

Andrew:

Because I wanted to get my stuff published and I thought, well, this might be a unique strategy and creative way to get my name out there at least with Entrepreneur. Entrepreneur for me was kind of, you know, it was a magazine I felt would be my first stepping stone, so I didn’t give up on that dream when I got out, so what I continued to do was reach out to people.

So, here’s some good tips for entrepreneurs and your listeners that may want to explore writing for a publication. Number one, go LinkedIn and search for people who work at the publication that they’re hoping to write for. Number two, you connect with those people and start building a relationship. Number three, find out who the person that you need to speak to to be able to pitch as a contributor.

Number four, do your research. Go somewhere like Buzzsumo. Go to Buzzsumo and learn what the most shared articles are, so you have a good understanding of what their audience likes. Number five, create a list of pitches that you think align with their brand and with what people have shared. So you have data backing your reasons why these pitches that you think would be good that you could write on and with that formula, I was able to get into Entrepreneur as a contributor.

John:

Wow. Andrew, that is such a – you could write your own book just on that. What I love about these five steps, you know, the five steps to getting published, the five steps to breaking through, I think that you also could do a book on the five steps to getting funded the way – it’s the same thing to getting to the right investors, would you agree? You have to research, have data to back it up. I mean, what you just gave our listeners is absolute gold.

These five steps that are proven, because that’s what got you from prison to being a writer on Entrepreneur to know, you know, to making your life a huge success working for an angel investment company, having multiple companies that you are starting up and getting funding for, so that is, I can’t thank you enough for that generous, generous strategy that you’ve just shared because it’s the same kind of strategy that startups need to use to get to the right investor, wouldn’t you think?

Andrew:

Absolutely.

John:

Let me ask you about another one of your wonderful articles in Entrepreneur when you talk about jumping in too soon in a story you had about Craigslist. So many times people talk about, oh, I don’t want to jump in too soon with the right investor, but you even back it up a little bit further and say don’t jump in too soon with a business partner. Can you tell us the importance of both of those?

Andrew:

Sure. Yeah, so I recently had an experience where I met this guy, he was kind of hard pressed on his luck, kind of down, and we decided to go into business together because he brought value, complimentary value to the things I had been doing. We’ve been building additional marketing company and I was doing web design and development back then and front-end design stuff and he brought internet marketing, resources and knowledge and experience.

I wrote an article that said and explained three lessons I learned about that failure because we ended up, you know, not being able to succeed together in business. I think the big takeaway for me though was although, you know, I jumped in, the takeaway was not to, you know, give up on taking chances and risks, because even though the business did not succeed and did not, you know, grow into the vision that we had, you know, I don’t regret the experience, because it made me smarter as an entrepreneur and I think that no matter what we’re doing as entrepreneurs if we’re learning in the process, we’re growing and we should never stop learning and growing.

John:

That’s such a tweetable moment again. Never stop learning and growing. We’re going to tweet that out, because you know what it ties full circle back into what you were talking about being in prison, just because you make a mistake, doesn’t mean you stop dreaming and just because you make a mistake with who you choose to go into business with, doesn’t mean you give up, right, you learn, listen, and makes you a better entrepreneur.

Andrew:

Right.

John:

The continuity and the life lessons that you keep building upon is such a great inspiration and huge life lesson for everybody.

Andrew:

So with that said, I would say that the two takeaways that I have from failing with that business are one, I need to learn how to mitigate my risk better. I was too exposed, it was my primary source of income, so when things went sideways, I was in a position where I could not, you know, I had to scramble hard and hustle out of that dark place that I was in, you know. So I had to get out of that through sheer determination, perseverance, and hustle.

John:

No, I love that. Sheer determination and hustle. Man, if you could have that come across when you’re pitching an investor, that’s what you want to see. Those are the unspoken things that people are judging you on when you’re speaking. They’re not asking you are you perseverance and determined. The more you have stories like you do of examples of that, the more real it becomes.

Andrew:

Right, agreed. Yeah, so number one point was mitigating my risk. Number two point is to figure out how to protect yourself, which is complimentary to mitigating your risk, but there are other ways I could have protected myself even better even just with a little bit stronger agreements we had in place from a legal standpoint to a financial standpoint to more control over certain areas of the business. You know, that is another really valuable lesson I learned and I’m glad I learned now because, because now I’m wiser from it and I’ll be able to apply that knowledge in future endeavors.

John:

Right before we started this interview, you were telling me you were in the middle of a capital raise. I’m sure our listeners would love to hear from you about taking all these lessons you’ve learned from being in prison, working with prisoners, helping them become startups, being an angel investors, writing for Entrepreneur, how do you pull all of that together and when you pitch, what are your secrets when you’re in the middle of doing a capital raise.

Andrew:

Sure. So, great question. I am currently in a capital raise. We’re raising a seed stage round. We’re looking at a convertible note of about $650,000 and so, you know, there’s so many different ways to approach a capital raise. First of all, there are three places that you can typically find funding. One is friends, family, and fools. Number two is angel investors, which play a more of a professional role than just the three Fs that I mentioned and then the third is obviously, you know, venture capital.

A lot of first time entrepreneurs think that if they have this idea, they just need to go out and raise money right away and, you know, I talk about being able to raise money without a product in place, which is possible, it doesn’t make it easy, but it’s definitely possible and I’ve done it on multiple occasions, but I think..

John:

Let me ask you, to expand on that, because that is such a key question that everybody asks me. How do I get money if I don’t have a prototype and you’ve written about it in Entrepreneur from having screenshots of slides and things like that, but it’s so valuable your skill set and very few people know how to do it. If you could tell the listeners, if you don’t have a working prototype yet, you can still raise money and here’s how I did it with A, B, and C.

Andrew:

Absolutely. So, I do talk about, I just wrote an article and it was actually on Quora, can I – I don’t remember specifically the question, but how do I raise funding without a product. Pretty much the bulk of everyone on Quora said, oh, you can’t do it, it’s not possible and I countered that point because of my experience and I know it’s possible because I’ve done it on multiple occasions. You know, when I helped raise – I had a 2.2 million dollar raise I was apart of, we didn’t have a product in place. You know, I’ve done it for multiple six figure investments where I had an idea and more than just the idea and I’ll explain the three things that I think that are instrumental in raising without an actual product.

So, three items in my opinion, in my experience, are team, validation, and some sort of demo. So, team is obviously referring to who are you, who’s your team, what’s your experience, why, again, are you the right people for this vision and how are you going to accomplish this. In terms of validation, validation can be anything from a letter of intent from a big customer. You know, if you’re developing a mobile app, go out and create a landing page and get interested users to sign up for this, you know, for your, let’s call it a beta or whatever it is that they’re signing up for, but validate your idea through actual people that have interest, so there are a number of validation techniques you can use.

You can go on Google and search them and find a list and then third is demo. If you don’t have a product, you must have some sort of demo whether it’s Photoshop designs, whether it’s, you know, I mean, even a drawing on a napkin is better than nothing at all, you know. I would recommend against a drawing on a napkin, but you know, have some sort of demo.

John:

Right. A little more sophisticated.

Andrew:

Right. Oh yeah, for our current capital raise, we don’t have a product in place yet, but what we’ve done is we’ve designed the front end, so we have all the Photoshop design files that we’re going to use to convert and actually create your website, but what we’ve done is we’ve used an application called InVision that allows those Photoshop designs to become real and clickable, so I can walk people through what our actual website is going to look like and what the platform is going to be and they get, you know, investors get a real sense of the platform in its entirety.

John:

That’s fantastic. We’re going to be sure to put that in the transcript notes and a link to that InVision that allows your drawings or your Photoshop designs to become real and click-able. That’s an incredible resource you just shared with everybody that I don’t think a lot of people know about. Thank you again for your incredible generosity of sharing your incredible secrets that obviously work. You know, what’s so important for me is working with my clients who have explained to them the importance of branding from the get-go.

So, even if it’s a Photoshop design, it should represent your brand. You need to spend some time thinking about what is my brand stand for, what is the logo going to look like, what colors are we going to pick, what’s the font, what’s the professionalism, is it fun, is it hip, is it sophisticated, that you just aren’t showing something that’s so off-brand. The more thought you put into something, even if it’s not an actual demo, the more people are going to understand it quickly and be willing to say, yes, I get that. Don’t you agree?

Andrew:

Yeah. I think yes and no. How about that?

John:

Okay. Please, I’ll take the no. Let’s hear the no. I love when people say. What’s the no on branding?

Andrew:

My only hesitation there is that sometimes people get stuck in this, we call it an analysis process or whatever you want to call it, but what happens is they think too much, they over think, and then the over thinking hinders them from acting, you know, so what I would say if the over thinking and the over analyzing is hindering them from being able to move forward in some capacity and make progress, I would say hold off on that and figure it out what it is that’s going to move you forward. On the converse side of that, I do think that, you know, branding is specially important, especially in today’s digital age, you know, I work on my personal brand, so I have a business brand, I have a personal brand, and so building my personal brand actually helps compliment and help grow and build my business brand, you know, so if I can show my expertise as a personal brand and show the things I’ve done and show the value I provide and have a compelling story that people can latch on to and be engaged with, you know, building up my personal brand will actually in turn build up my business brand.

John:

Everything is in sync. They’re not operating at completely separate worlds, so what I hear you saying is, it’s important to do more than just a napkin drawing and just put some thought and effort into actually doing a Photoshop design that starts your branding process, but don’t get stuck. I tell my clients all the time, it’s about being a progressionist, not a perfectionist.

Andrew:

Love that.

John:

So, put enough effort into it to make it look professional, but don’t get so caught up on figuring out the color of the logo that it prevents you from getting it done.

Andrew:

Right.

John:

Because it can evolve, everything is a pivot even with the branding and the logo, but don’t do nothing where it’s on a napkin and don’t have anything to show, but don’t stop yourself from having something to show, because it’s not perfect. So, there’s happy medium which is all about being a progressionist. I’m glad you like that.

Andrew:

Yeah. I love that and I totally agree. You know, because a lot of people will just over think everything and they’ll get stuck in this rut where they’re actually not even accomplishing anything and then, you know, what’s the point of going back and figuring out your entire branding strategy if you’re not even going to get through point one.

John:

Andrew, we’re approaching the end of the podcast and it’s gone so fast and you’ve been so generous with so many great tips, I can’t wait to have it all put together for you and our listeners, of course, so thank you for that. I want to ask you if there’s one or two books or one or two quotes that you really got a lot out of it that you’d like to recommend.

Andrew:

I have so many different books that I love. When I was away I read 197 books within a two year span.

John:

Wow.

Andrew:

You know, so I love The Art of War. You know, during that time actually, so The Art of War is a great book and I use all the time. There are a lot of specific books related to, you know, startups and entrepreneurship. During that time The Lean Startup was really big. If people haven’t read that, I really think that’s an important book to at least read, whether they apply it today or not or that’s kind of outdated is irrelevant. I think it’s still a great book to really understand some of the ways that you can go through the process that we’ve been talking about. There’s this quote that I really love, I can not remember who said it, maybe we can look it up, but it’s, I wanna say it’s like the CEO of HP, but the quote is something like, “If we have data, let’s use the data. If all we have is an opinion, let’s use mine.”

John:

Great. If we have the data, let’s use it, but if all we have is opinions, let’s use mine. That’s a great example of confidence, which is what I think an entrepreneur needs to have and express without being ignorant and that’s what you certainty come across as. I mean, you’ve obviously are perseverance and strong and you’ve shown our listeners how to have confidence and believe in themselves and believe in their own opinion. What a great ending. Andrew, how can our listeners follow you, support your articles, whatever else you might want them to – how to stay in touch with you, follow you on Twitter, give us all that detail.

Andrew:

Sure, sure. First off, thanks John, I’ve really enjoyed our time and appreciate what you’re doing. You can follow me, my website is AndrewMedal.com. I love getting connection requests on LinkedIn and always communicate there. Twitter @AndrewMedal is my handle. I’m Quora all the time. Andrew Medal. There’s only one Andrew Medal out there.

John:

Fantastic and then obviously anybody who follows Entrepreneur is going to see your articles and they can like them and comment and share it.

Andrew:

Correct. If you sign up for my newsletter on my website, you’ll get access to those.

John:

Ah, terrific. I highly encourage everybody to sign up for that newsletter. If you had one newsletter to sign up to for this month, that’s the one, people. I’ve gotten so much out of everything he’s ever written and it’s been a thrill and an honor to have you on the show. Thank you so much, Andrew.

Andrew:

Thank you so much, John. I really appreciate it.