Game Changers Silicon Valley with Jim Connor
Posted by John Livesay in podcast | 0 comments
Episode Summary
Today’s guest on The Successful Pitch is Jim Connor who is the executive producer at Game Changers Silicon Valley television show. He’s also involved with a lot of Angel groups up there and on the board of many, and he had a successful exit himself. He said after you have one, everybody wants to be your friend and he says a big piece of advice when in the process of negotiating your exit is don’t take your eye off the ball, keep the revenues up otherwise the people who are buying you are gonna want to renegotiate the price because the projections aren’t being met. He said you need to connect to investors when you pitch, you need to be coachable, and more importantly you need to have really great credibility while you’re giving your pitch so that your integrity comes through if you want to get a yes. Jim has all these insights and more. Enjoy the episode.
Listen To The Episode Here
Game Changers Silicon Valley with Jim Connor
Hi, and welcome to The Successful Pitch. I’m honored today to have Jim Connor as my guest. Jim is the executive producer at Game Changers in Silicon Valley. He is a member of the Sand Hill Angels, he was the CEO of the First Focus Learning Systems, and he’s also on the board of the Angel Capital Association and Startup Learning in addition to being on the board of several other successful startups. Jim’s been involved as an investor and advisor to emerging technology companies since 2007, and he’s also the producer of, as I mentioned, this wonderful show on PBS up in Silicon Valley called Game Changers, which I’ve had the privilege of being on. It’s a weekly technology interview about innovation. Previously, Jim was the President of JP Morgan’s SymPro, providing treasury and portfolio management software solutions, so he has an in depth knowledge of what it takes to have a good pitch and what he looks for when he hears a pitch. Jim, welcome to the show.
Thanks John, delightful to be here and nice to have met you previously during the show at Game Changers Silicon Valley.
Yes. So I always like to ask my guests to tell us their own story of origin, and you can take us back as far as you want as to … When you were back in your youth and said someday I’m going to host a television show and start an Angel group. I doubt that was on your radar, but let’s just start from working at JP Morgan.
Well let me start a little bit before that because that’s essentially how I became able to become involved in angel investing. Many people have all types of different circumstances in which they start a company and today, most people go hey we have a great idea and they find 2 or 3 co-founders, and they collaborate and they think this through and they go oh we think we have a niche, we have a tech person, we have a revenue generator, a sales person, we have a management, a visionary if you will, then they can form a company. That’s only really occurred in the last 15, 16, maybe even 20 years at most, the mid ’90s. Before that, the idea of breaking off and starting your own company really wasn’t very common, but more importantly you’re taking tremendous risks, the industry was there but it was relatively nascent, it wasn’t nearly as developed, there was almost no Angel Association or Angel Investor Group.
Most people had an inflection point that they either lost their job, the company went out of business, or something happened like that and they had an opportunity to make a decision and either find another job or do a startup, or do a business, we didn’t really refer to it as startup in those days. That’s what happened to me. I was at Xerox Computer Services, great company, division of Xerox, and one day my group of 35 people was laid off for reduced or we used to say vaporized. It no longer had a future in the company, let’s put it that way. Most got job offers to come into other divisions and I had started doing a little bit of work and helping out PCs, I was fascinated by local area networks and all this, so long story short when the group was vaporized I decided not to take the new offer, but to take severance and it gave me nine months of time to decide if I could get a business up and running. The short story is in nine months I was too far in debt, I had already signed agreements, I had a couple of employees at an office, so I had no choice at that deadline I had set myself nine, ten months out, I just had to put my head down and go forward.
We went through many pivots during the ’90s and really had about three years of insolvency, which I barely was able to get by on. In the late 1990s, early 2000s, 2002, we emerged as a leading provider of what’s called portfolio investment software, or portfolio management software specific to the bond market.
So take us back to starting Sand Hill Angels in 2006 in Palo Alto.
I didn’t start … Sand Hill Angels started in 2001 approximately, right around there, it was a small group, and again that’s in the earliest days where individual angel investors decided to collaborate and come together and pool their monies. It wasn’t me, but it was a group of insightful and well-meaning and well-intentioned guys who had been through successful exits and run businesses. They started the group around 2001. It moved along, it was very careful in recruiting new members on a one-at-a-time basis, very diligently and carefully. Through the exit I had, which was in August 2003, I actually got requested to be an investor by a number of companies. I have a saying, after you have an exit you’re everyone’s best friend. Everyone you’ve ever met comes back and says do you remember me? You start to help them out because that’s what we all do. There’s a give-back philosophy here, and I soon realize I didn’t have the background experience or knowledge to become an angel investor but I was fascinated because I was a product of the environment. So that’s when I looked at a couple angel groups. Sand Hill for me was just chemistry right away, it just fit so well and so easy that it was almost a natural step, so that’s how I joined them in roughly … I believe it was late 2004 I joined.
Source: Pexels
[Tweet “After a successful exit, everyone is your friend.”]
And you had several offices there. So before we jump into that, since you brought up … We’re gonna tweet that out, after a successful exit you become everyone’s friend. That’s a great line. Tell us what that exit was and what you learned from that.
Well I actually had three exits, three exit opportunities. The first one … And the first two we had the due diligence, and after the due diligence the timing was really up in the air. I did not have what was called an advisor at that time, I had my council, legal counsel. It was a relatively small deal, it wasn’t one of these hundred million plus deals so … And most deals are not a hundred million plus, even today, but relatively small deal, and so we thought we could probably work through it. The size of the deal and the type of companies looking to acquire us are such that they really wanted to deal with the principles, the management team directly, they didn’t want to go through a third party, so that was fine. The downside of that was that we couldn’t put any fire under their feet, if you will, we couldn’t get them to really move forward and they kept, shall we say, peeking around a little bit here, a bit there, and at one point I realized that the deal had lost its energy.
This happens. There’s a shelf life to an M&A deal. It just loses energy and sometimes it’s my fault, the company’s fault, the target’s fault, and sometimes it’s the acquirers fault. I learned later on it was the acquirers lack of carry-through, follow-through, they had management turnover but at the time I didn’t know that so I was terribly, I won’t say depressed, but I was feeling rejected because I thought I had done something wrong and I didn’t have a clue what it was and of course no one would tell me why the yield didn’t go ahead, just that things have changed, we have a different set of priorities, blah blah blah. I was thinking oh, maybe I’m damaged goods, I didn’t know for sure.
The third one, having been through two of them that didn’t work out, I took the third one very cautiously. I don’t want to say I didn’t take it seriously, I did, but I realized it was such a large company going to acquire a relatively smaller company that anything could go wrong at any time or go off track. I took a very casual … I just kept our head down and said we gotta continue to execute, continue to focus our revenue, continue to deliver great products, and that was the right attitude. When an entrepreneur gets into any M&A deal, founding team, they take their eye off the ball and go oh, here’s our exit. Of course what happens is by taking their eye off the operational side, because they kind of have to because of all the distractions of requests for information, the business revenues or something starts to go down or level off and right away the acquirer says oh, things aren’t quite going as well as we thought they were gonna go, we projected, now we’re gonna have to readjust our terms.
Source: Unsplash
[Tweet “Don’t take your eye off the ball when you’re exiting.”]
Oh my gosh. Wow. Well you know you bring up a really interesting point, Jim, that I’ve never really thought about, it makes perfect sense, which is dealing with the delays and even personal rejections happen at the beginning when you’re trying to get funded, and then they happen at the end during your exit. It’s the same dance, if you will, right?
One of the keys in life is learning how to deal with rejection, I think, if you had to pick one thing. If you get rejected for some reason, you can get frustrated, you can get mad, or you can get analytical and you can start to iterate through the processes to improve on it, so rejection is gonna come no matter what. I have to say, the third opportunity did work out and go to a close because I’d had the two rejections along the way. I knew the process, I knew the ups and downs, and I just took them in stride.
So valuable. Can you take us a little behind the curtain? Because so many people are so fascinated with what does an angel group say when they’re not in front of the people pitching them? Any inside secrets or things that obviously aren’t confidential but, just the whole philosophy because I think I’m always telling people, the more empathy you have for the investor, the better your pitch will be. So if you can give us any insights as to what investors care about when they hear a pitch or what they wish people would know that would make their pitch better, that would be fantastic.
John, that’s a really great question. It’s a very long … It’s got potentially long-winded answers, I mean there are variations, but I’ll give you a couple thoughts that most entrepreneurs miss. That is how to connect with the investor or investor group. So before you go and try to make your pitch, start using all the wonderful tools we have in social network space, Facebook, LinkedIn, Twitter, whatever, to a) follow or connect to these people that you later on want to talk to, and second, contribute or make comments on their blogs, their shows, whatever they do. Get to know them through social networking, okay? You can really raise your visibility quite easily with a little bit of diligence without going to any meetings at all, but by just working the social network environment.
Source: Unsplash
[Tweet “Connect and follow investors on social media before you pitch them.”]
Great.
And then in that relationship the entrepreneur almost always should be, and almost always has to be, somewhat of an expert in some area. Find that area where you’re an expert and deliver value to the investors, deliver value through your expertise, get to know them that way. You can do a number of things where you are an expert in helping. In due diligence, or making comments, or writing a blog, or more importantly, being a commentator on their blog, that’s a tremendously powerful thing.
Love it.
You can really start to change … get your visibility up a little bit. Then, when you meet with the investor, take it from their point of view. You’ve got your point of view, they know your point of view too by the way, take it from their point of view, which is … They’re looking for successful companies they can build. If they ask you a question that you don’t have a great answer for … They’ll say I see you have this … You don’t have anybody in your team that knows marketing and your product and service is very dependent on a flawless execution of marketing, you want to say Bill, Mary, Jane, whatever it is or however you want to … You know, you’re right, we are aware of that problem. We would really welcome any insights, recommendations you have to people you’ve seen who are good at addressing that issue of marketing, because you have a much greater range of knowledge, visibility, and understanding of how difficult this is and so at this point, rather than us go through some iteration of trying to recruit somebody, any recommendations or contacts you can give us would be most appreciated.
Let me just restate, if I may, what Jim just said before he gives us more gold, because I don’t want you to lose this. You’re talking about the very definition of being coachable, which is versus argumentative and defensive. The fact that someone points out a flaw, or an error, or something missing, you don’t get defensive about it, you literally say you’re right. People love to hear it when they’re right. I just can’t emphasize that enough. You’re right! This is not a new thing that we’re not aware of, and you’re right. And then you took it one step further, with this whole concept of we’d love your advice, as opposed to we have all the answers. Man, if you tell … If you’re not defensive, and you’re open to advice, you come across as the all important coachable, and you just gave us specific examples of how to come across coachable and connected. So we have the two Cs from you already Jim, this is fantastic.
Good, thank you. Glad we’re making progress. Anyway, I’ll give you one more that is very high on everybody’s list. People will talk about the team and that’s a subjective area, but the other one is absolute integrity. Let’s look ahead a little bit when you don’t have integrity because you don’t always catch it upfront. Sometimes you do because you’re gonna ask questions and the person, you know they’re not quite telling you the absolute truth or they’re giving you half truths. Later on after you’ve made the investment, you realize that that values system where they’re okay telling you half truths or partial truths carries forward into the communications after you’ve funded the company.
Yes.
Therefore, you get a half baked update on the business plan and the progress they’re making, you get half baked updates on potential problems, and pretty soon you find your understanding of what the communications you’ve heard from the company and what’s going on with the company are completely misaligned or out of sync, put it that way. That’s one of the reasons that the integrity is so important. I have to say that I’ve seen investors in conversations where I’ve been a part of it say well Mary doesn’t know everything but she is high, she has high integrity, you ask her a question, she’s gonna give you a straight answer. If you say Mary, do you like the dress I’m wearing, or the jacket I’m wearing, she’ll say no that’s not my favorite color, I think you would look better in a different color. She’s not gonna lie to you and say oh yeah you look wonderful, you’re so handsome, you know? That’s what you really want to see. Now you can use integrity with a little bit of diplomacy and say things in a pleasant way but you don’t want to allow the main truth, the main fact, to get diminished or to be opaque in any way.
Well what I’m hearing you say is what integrity gives you is credibility.
Yeah.
Because that’s really what … If someone’s … It starts at the very beginning. From the pitch, through the due diligence, and if you’re not telling the truth and being completely credible, as you said the half baked ideas, then no one’s going to … That’s just gonna continue and you’re probably gonna get a no during due diligence because you’re doing that. If I was to sum up what you just gave us, in terms of the 3 Cs, it’s connect, coachable, and credibility. Those 3 Cs would make anybody much more likely to get a yes from you or any other investor.
I’ll give you one other one here, too.
Please.
Inevitably, you don’t get funded because … First thing you think is you’re not that good at it, you’re not ready, you’re iterating through the process, and every time you get a “We’re not quite ready, you’re not quite ready for us, you don’t quite fit our profile, we didn’t get enough investors to come together,” you want to say I appreciate that feedback, I just so value the relationship I have with your group, your team, you, whatever it is, say “Can you give me any areas that I can work on to make my presentation better?” 99% of the time they’re gonna say well since you asked, I’ll give you these areas. Nobody wants to be critical of another person, but it’s relatively straight-forward to be constructively, to offer constructive advice when a person admits that something didn’t go well and they’d like to know how to do it better.
Love it. Well let’s talk a little bit about what you do on the board of Angel Capital Association and Startup Learning.
The Angel Capital Association is a group of about 220 angel groups throughout the U.S., you know there are many now. There’s been an explosive growth of angel groups. It used to be just that you had essentially what were people who more or less had been in a startup and sold it, had an exit of one type or another, there are some people that were early employees at Google and various companies like that now, Yahoo and of course Microsoft, they’ve all become … Because they’ve got enough wealth, frankly, to theoretically invest 5-10% of it in this very, very risky environment and not have their long term financial independence affected. And they love doing it, that’s the other thing. So the Angel Capital Association is the organization that does policy, public policy, whether it’s affecting laws in Washington, comes up with best practices, has annual and regional meetings to do angel training on various new topics that are coming out, works with M&A, talks about due diligence … That’s what the Angel Capital Association does.
There are 16 people, I believe, on the board, and we serve for a period of three years per term. We have our officers elected. This year the summit for the Angel Capital Association will be in San Francisco April 26th-28th.
Wow.
28th … I’m sorry, 26th through the 28th, let me get it right, yeah. There are a lot of groups that come from outside the U.S., there are groups in Australia, New Zealand, all through Europe, and these are all good partners of ours also.
How important are warm introductions to you as an angel investor?
You mean for an entrepreneur?
If an entrepreneur wants to get in front of you, do most of the deals you fund end up coming through warm introductions?
Well, I’ll put it this way. Most of the deals, it’s a lot easier if it comes from a warm introduction, and there’s really two areas you can do it from. You can get a warm introduction and if it’s in my sweet spot … My sweet spot is educational and payment, so I like education applications for a variety of reasons and I like payments because I believe it’s still a great frontier out there, that the payments space still has plenty of room for innovation. If you’re in payments or if you’re in education, you can pretty well either get an introduction to me and I’m happy to meet you or talk to you, at least talk to you about it. You can probably contact me directly but you need to also give me a good reason to talk to you.
Right now we get so many emails and so many LinkedIn connections that are “Hey, I’m in life science and I’m doing something for restore vision or to prevent vision loss.” I haven’t a clue what that is, and I’m fascinated by the idea but I’m not a good lead investor. What you want to get is a lead investor or at least a lead sponsor. So you want somebody who’s got credibility in the group for that domain. You see, if I go to my group and start saying hey I just found this great vision, solution to vision care, everybody looks at me and says you’re not a life science guy, why are you bringing us … I have no credibility, if you will, in that area. But if I go and I say hey I just found this great payments, or I find something I think is a game changer in education, I will get people who will listen to me and they’re friends of mine, typically. Even if they aren’t friends they’ll listen because I’m kind of known for those two areas.
Sure. That’s really helpful. That’s fantastic. And then finally, your TV show, Game Changers, how did you come up with the name of that? I love it.
Well, yeah, I love this story myself. I have this other company called First Focus Learning Systems. We teach after school and summer camp environments for reading, writing, math, and learn to code. This is essentially K through 8th grade. We found there is such a demand. I stumbled into this, there was no magic, I stumbled into it, but I like the idea. We just thought that if you can’t read by 3rd grade, you’re in trouble. See if you can read, you can self-educate. If you can write, you can communicate your ideas for the world, and if you can code, the universe is yours. The world is yours, okay? So it’s really reading, writing, we tossed math in there, and then learn to code. But the reading and writing is so crucial to long term educational capacity, your ability to educate yourself and communicate that I did this.
This is gonna be a little bit of a long story. How do you advertise, or how do you promote your program? Well you do a video. So I went and got a couple teens, they did some video, and I really didn’t like the outcome. I’m pretty picky about it, so I said well it can’t be that hard, so I literally went and bought a camera, started shooting my own stuff, I go well this is a little bit more difficult than I thought it was. I’m not that bad. I eventually found that there was some courses, because I did a lot of YouTube self-training, some classes down at KMVT, the local community college’s station, on how to direct and how to produce shows. I went over there, took the classes, and at the end, the final, the class says well you gotta do a show now. Well I like to play tennis so I did a show on tennis for 20 minutes, and at the end of that they said you know, this wasn’t bad for a beginner. Why don’t you volunteer for a few more things, learn the equipment better, and then you might consider having your own show.
Wow.
So that’s part one of the story. Part two of the story was how do you pick a name. You’d love this one. So I wrote up a business plan, like anybody else would in any kind of startup, and I said okay heres the idea behind it, here’s this, here’s that, here’s the reason, here are the names, I get five names. My favorite name was Don’t Quit Your Day Job Yet. That was my favorite name. But the group I met with, which was essentially the executive director of the station said oh I don’t know, that’s name is not gonna work. Then I had Silicon Valley Game Changers, and she literally said “Why don’t you reverse that, make it Game Changers Silicon Valley.” Shelley Wolfe, the former KMVT executive director made that suggestion. I said “I like it.”
Nice. It’s great, it’s really memorable, specific, and everyone thinks of everything being so disruptive and lots of things being changed with all the startups there so it’s really … It tells you what the show’s about and makes you want to watch it.
Let me add this … I had to write up the business plan. I had to write up the idea. If I hadn’t been willing to do that, she could’ve never made that insightful suggestion.
Ah, yes, because you gave her enough information about it.
There’s my point. That’s my point. People say I just want to talk, I don’t want to have to write this out. Well, come on now, put pen on paper, there’s a reason. It’s not that we can’t talk, it’s that we want to look at this and get insights from the printed words.
Well it’s just what you said earlier, right? If you can’t read, you’re in trouble, if you can’t write, you really can’t express yourself, and then coding, of course, is the ultimate language. But it’s not enough just to be able to talk and read, you have to be able to write so, that’s great. Jim, is there a book that you’d want to recommend as you leave our listeners that either is inspiring or informative that you would recommend for personal or business reasons?
Well there are … There’s really two books, and I’ll give the first book to you … Some people I had on the show recently called … “Decoding Silicon Valley” is the name of the book, it’s by Michelle Messina and Jonathan Baer. It’s a book about when people either come to Silicon Valley, or frankly they go to any investor group, Silicon Valley being very large and very, wide variety, a lot of depth here … It talks about when people come here, how do you get started, what do you do, what are the important points, much like we talked earlier about credibility, and coachability and things like that.
Through a variety of stories they talk about when you first arrive what do you do? Then after a few months you go to these meetings, what do you do? They intend to decipher, if you will, the mixed messages that many people get. The message people see, and the mythology is, you come here, you go to a couple coffee meetings, and in four weeks you’ve got a couple of checks and a terms sheet sitting on your desk. The reality is, it might take up to a year to really get traction and demonstrate that you’ve got a viable product. People underestimate how competitive the startup market is here in Silicon Valley, and frankly startup marketplaces come out of everywhere, but here you have so many people coming from all over the world. So this is a great book, they were on the show, we did two interviews, the first one was on the book, and the second one was what does it take to write a book? There was a great oversight also.
The other one is “The Innovators Dilemma” by Clayton M. Christensen. I like that book, I’m still reading it because I kinda cherish, as I go through I like to think about it, the innovator’s dilemma … It’s about when you’re an innovator if you’ve really got something going, when do you really want to make it visible and public? Because if it’s a great idea, people are going to copy it who are bigger, who are larger, publicly funded, a lot of resources, and they may crush your idea before it even really hits that inflection point of taking off. It’s not like wow this is really blue skies stuff, but the reality is many ideas get compromised because they got out there a little too early. I heard a famous story that there were many competitors for Microsoft and that one of them almost got away and got into the market, and then of course through fear, uncertainty, and doubt, Microsoft was able to put out the word that product or that company was never gonna make it. Nonetheless, this book about innovation and how to manage it and how to get through it is also a highly recommended book.
So those are two books, I love to read books, I love to read spy novels, as a matter of fact, I’m not sure why, but I like mysteries.
Nice. Well we’ll definitely put those two in the show notes, that’s fantastic insider information because you definitely have your pulse on everything going on in Silicon Valley and hosting a show you are up to speed, so thank you for sharing that. Thank you for being a wonderful guest. I am honored to know you on a personal level because I’m your friend regardless of whether you had a successful exit or not and I just love what you’re doing in helping entrepreneurs, so thank you, Jim.
Well John, thank you, like I said, I was delighted with your … I wouldn’t call it a performance, but your personality on the show was so insightful. I’ve never had anybody do that, and we did it realtime, as we mentioned, and so … I really enjoyed meeting you, I want to keep the relationship up. I’ll be down in Los Angeles at some point and give you a ring a couple days ahead of time, see if we can’t get lunch or something.
Can’t wait to see you again. Thanks, Jim.
Appreciate it. All right, John. Thank you.
Links Mentioned
- YouTube: www.youtube.com/user/GameChangerSV
- Book: “Decoding Silicon Valley” by Michelle Messina and Jonathan Baer
- Book: “The Innovators Dilemma” by Clayton M. Christensen
- John Livesay Funding Strategist
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The Hockey Stick Principles with Bobby Martin
Posted by John Livesay in podcast | 0 comments
Episode Summary
Today’s guest on the Successful Pitch is Bobby Martin, the author of “The Hockey Stick Principles.” He talks about how to hit the ice running when you’re an entrepreneur with a startup. He said “create an execution plan, not a business plan.” He has a whole thing about what the blade years are, those years after your idea’s gotten a little bit of traction, but you don’t have growth yet, and he shows how to enjoy those blade years because they can take a little longer than you might want or hope. However, he also says that impatience is a virtue when it comes to showing investors traction. Enjoy the episode.
Listen To The Episode Here
The Hockey Stick Principles with Bobby Martin
Hello and welcome to The Successful Pitch. Today’s guest is Bobby Martin, who is the author of the bestselling book, “The Hockey Stick Principles: The Four Key Stages to Entrepreneurial Success,” and who doesn’t want to know about that? Bobby believes, however, that a lot of startups pivot too early, quit too early, and possibly even expect a rapid takeoff too early, and maybe even are going for funding too early, so we’re gonna ask him about that. He has started in selling First Research, which is a leader in sales intelligence for $26 million to a Fortune 500 firm. He learned firsthand the challenges and solutions about entrepreneur growth. His book has been named a bestseller by 800 CEO read bestseller, and his current adventure is the chairman and co-founder of Vertical IQ, which is a leading provider of sales research for banks. Since he spent time in banking, that makes sense, which answers the question, why is he uniquely qualified? Bobby’s also an angel investor, so we’re gonna be asking him to talk about that, and he serves on a lot of boards with some innovative startups so I can’t wait to hear more about that. Bobby, welcome to the show.
Great to be here. Thanks, John.
I am always interested in people’s story of origin, so your whole concept of, you were in banking, and then you said you know what? I’m gonna become an investor or I’m gonna start my own startup. How did you get from being in banking to where you are now?
What happened is, when I graduated from college, that was in 1993, from Appalachian State University, I had this goal of becoming CEO of a bank, but when I went and worked for a bank, I realized that I didn’t really fit that well into the culture of the bank as such because it takes a certain type of personality to rise through the ranks at an organization like that, and I found myself constantly at odds with policy. I remember my uncle, he told me, “Remember Bobby, your job is to implement policy, not create it,” and I’ll never forget that. I decided then, after about five years, I said I want to start my own company. There’s a really interesting researcher about entrepreneurs. His name’s Manfred Kets de Vries, he’s a psychologist who did a lot of fascinating work about entrepreneurs, but one of the things he noticed is that entrepreneurs oftentimes, not always, they don’t necessarily fit in to the normal mode, but they aren’t the retiring type either. So what they do is they tend to escape that particular scene and create their own world. That’s why I became an entrepreneur, my idea was First Research, which are the industry profiles for pre-call preparation. I was gonna start something, by golly. I was thinking about reselling soccer uniforms, and I had dozens of ideas.
I love it. How did you decide that you were gonna write “The Hockey Stick Principles”?
“The Hockey Stick Principles,” just like First Research, sort of morphed and evolved into the book. I had an absolute ball putting it together, but what happened is, I sold First Research in 2007 to Dun and Bradstreet, worked there for a year, and in 2008 I found myself going, okay, what’s next? I was thinking that the whole startup at First Research was a very unique experience, at least I thought it was incredibly unique, and so I documented the entire thing and wrote the story, and a lot of it at the time were concepts around bootstrapping and doing more with less, making up your own processes. It was sort of lean startup before lean startup was even known if you will, but I wrote this book and realized it was only one perspective. I decided to write other perspectives, and I went out and interviewed some fascinating successful founders. One was Doug Lebda, who started LendingTree, when banks compete you win?
Yeah.
So I picked his brain in depth about the first three years of starting LendingTree. Then I did Red Hat Software, with Bob Young. I did Ryan Allis, who started iContact. Jim Goodnight from SAS Software. So I just picked these people’s brains in depth about the first three to five years. I was like, what did you do with your idea? What did you do first? How much money did you raise? Why did you raise it? Was it wasted? And I just picked their brains like crazy, and it ended up being eight case studies of eight startups and then I had the idea to call it “The Hockey Stick Principles,” and then one thing sort of led to another and a publisher picked me up, or really an agent, and then we turned it into what “The Hockey Stick Principles” is today. It was a blast. I absolutely loved doing it.
One of the things I’m always telling everybody when you pitch is paint a picture, and your book really paints a picture. We all know what that hockey stick looks like. That’s the kind of growth that investors look for in their financial projections. Your book continues the analogy into Chapter One, Hitting the Ice. You talk about Tesla being an example of something that people predicted would be bad, but it turned out to be a success, obviously. One of the things I know you’re big on is not giving up or pivoting too early. Can you talk about Tesla in those terms?
Absolutely. There’s so many examples. “The Hockey Stick Principles,” one of the main premise of it is that the blade years, which there are four stages that you mentioned. The first is tinkering when you kinda mess around with your idea before you quit your day job or make it a significant investment. That second stage, you’re called the blade years, and the blade years, they last anywhere from three to five years. Revenues, growth, revenue is low and growth is low. Hence the blade, right? The last two stages just FYI are the growth inflection point, where you’re like wow, how did this happen? How are we all of a sudden successful, right? And then surging growth occurs after, that’s the fourth stage.
But the blade years, speaking of Tesla, are fascinating. There was a story in 60 Minutes that basically said, look, Tesla has no idea what they’re doing. They’re in way over their heads. The car manufacturing business is very complex and requires huge economies of scale. This story in 60 Minutes, that was at the time when Tesla was really struggling. What they failed to pick up on is the fact that Elon Musk and his management team weren’t trying to sell to the masses. They had carved out a niche, and that enabled them to survive and then eventually thrive. The blade years are the most important years, which is when the most important work is done. What I mean, by the way, about pivoting too early or quitting too early, is that 70 people quit. They quit after a year or two when it really takes three to four or five years of persistence. Does that make sense?
It totally makes sense. Can you share for us what you look for as an angel investor when you’re hearing a pitch?
Yeah, sure. As an angel investor, I’ve done eight different deals, I guess you could say. They’re all quite different, but most of the companies I invest in provide information to sales and marketing professionals, but some of the deals, in particular the ones I’ve done more recently, are the types of companies who aren’t necessarily in that realm. For example, I just invested in a company called Myxx, that provides technology to help grocery stores and major brands connect recipes to their customers. It’s an amazing technology by a very smart lady. To answer your question, the big thing I look for, number one, obviously, is how qualified or how excellent the founders are, and do they have the right diversity of skills to actually pull it off? That’s really major, and by the way, I should say most of the time I invest very early stage, which would be mostly pre-revenue. So Monica started Myxx, just as an example, and I noticed immediately that Monica’s smart. Monica can articulate her value proposition very well, even though she hasn’t defined clearly what that is, her visions are quite good. She also had an outstanding programmer she was working very closely with, who was very engaged, so you had sort of a complete management team, because Monica’s really good at marketing, and seemed to have a real knack for sales.
The other thing I look for when I’m listening to pitches is obviously traction, and you’ve heard about the book, Traction. But it’s all about real, concrete traction. And it doesn’t necessarily mean paying customers. It doesn’t necessarily have to mean revenue. It has to show significant advancement on the idea, where things are getting done. And one thing I noticed that really successful founders are, is they’re very impatient. One of my principles in The Hockey Stick Principles, there are 92 principles scattered throughout, and one of them is impatience is a virtue, and they’re very impatient people. They get a lot done. That’s one of the things I look for as well. I hope that helps.
Source: Pexels
[Tweet “Impatience is a virtue.”]
That’s great, yes. We’re gonna tweet that out as one of your principles. Impatience is a virtue. It’s very clever because people go what? Cause we’ve been taught the opposite. When it comes to a startup, you are impatient for proving the proof of concept, and getting some traction. One of your other areas of expertise, Bobby, is figuring out just how much money somebody should raise when they’re pre-revenue. Can you speak to that? Obviously that just leads to so many other questions, but when you’re asked for a certain amount of money, whether it’s 100,000, 200 or more pre-revenue stage, it’s expensive money, so how do you decide how much to give up and how much should you ask for? I think those are sort of tied together, aren’t they?
They really are. The other principle I have in my book, I don’t have the book in front of me, but it basically says that the value of your equity is “incalculatable,” and what I’m really saying here is that when you give away too much equity too early, you’ve kinda blown a major asset that would be very much needed, every bit of it, in the future when you’re scaling growth and when you’re really succeeding and therefore, raise as little money as possible. In other words, I believe, now every business is different. Certain businesses just have to have cash in order to survive, in particular ones that are making a real product, a tangible product if you will and have to manufacture it, carry the cost of goods sold, ship it, wait to get paid after about 90 days. You just have to have a lot of cash, and maybe you don’t have a lot of cash. But nonetheless, one of the things I think that founders should do is raise as little money as possible. I often tell people in speeches, and I make it up, but I say 90 percent of you are raising money and you probably shouldn’t be. You should be bootstrapping like I did, because I didn’t have cost structure when I started. If you can avoid spending money on things, on experiments, you absolutely should. Too many people spend money on experiments, big money on experiments when they really shouldn’t be.
Right. Let’s talk about your brother-in-law, Brad, which was in Chapter Two of how he didn’t pay himself and how much he raised.
Yeah, that’s actually a great example. Brad McCorkle, he’s a really smart guy, he’s my brother-in-law. He’s married to my sister, and he had the idea, it’s been incredibly successful, to provide a job board specifically for the eye care industry, because he realized as a salesperson, he was selling to the eye care industry, kinda pharmaceuticals, is that everybody, all the eye care clinics, were coming to him and saying hey, could you help us find qualified candidates? We need all these candidates, we can’t find them. Brad created some really nifty technology to basically start a company called Local Eye Site. But the big thing about it is, is that it was gonna cost a fair amount of money to create the technology, and he didn’t necessarily have the money sitting around, so he raised the money from investors, and I was one of them, and then he just took no salary for the longest time. For a couple of years, there was no way he could pay himself, but he scraped by. He figured it out, and now he’s thriving like crazy and scaling the hockey stick.
What are some of the mistakes that you see people make when they pitch investors, especially when it comes to the financial projections?
I think that spending too much time and energy on the financial projections is oftentimes a mistake, because quite frankly, we don’t really know what kind of revenue we’re going to get when we’re starting a new company, particularly one with a new idea, of course. There’s too much emphasis on predicting the unpredictable, and so I encourage people, what they should do is create an execution plan instead of a per se business plan. An execution plan, it’s kinda like, what do we need to get done? How are we gonna get that done? Now we do need to try as best we can to predict time and cost estimates, but one of my principles is they’re impossible to predict as well. In fact, I just filmed a video about this I’ll send to you, you can send it out to your listeners. It’s a one minute rant.
I love it, we’ll put it in the show notes.
It’s Doug Lebda from LendingTree. LendingTree’s now worth $1.5 billion. It’s a phenomenal company. You probably hear them advertised all the time, and the idea in the late to mid ’90s was a really good one, which is, why do I have to fill out multiple loan applications to apply for a mortgage? I should just fill out one and shop it around. It’s a great idea. But Doug’s a smart guy. He wrote a business plan that said it would cost $30,000 and 16 weeks to build the technology. It ended up costing hundreds of thousands of dollars, nearly a million dollars in several months. That’s not because he doesn’t know what he’s doing, Doug absolutely knows what he’s doing. It’s because it’s impossible to predict how much projects that have never been done are going to actually cost to get done correctly. I tell people to underemphasize projections and overemphasize execution. Does that make sense?
It does, in fact, we’re gonna tweet that out. Create an execution plan versus a business plan, which totally ties into what you were saying earlier about that’s a great way to show traction, isn’t it, is hitting some milestones.
Source: Pexels
[Tweet “Create an Execution plan not a Business plan.”]
Absolutely.
Yes. Now how long do you think it takes? Is it three years for a startup’s revenue to take off and grow faster, or is there anything that an investor or a startup founder should be looking for to get to that next level?
That’s a really good question, because it’s where the rubber meets the road, which is how long does it take to reach takeoff? That’s the crux of your question. Now, in my study, I studied 176 successful startups, and I tracked their revenue growth curves, and what I found is that it took on average three years for companies to reach takeoff, which is that obvious inflection, however, some only took 18 months and some took seven to eight years, many, many more years. But I didn’t see many that took off really fast, like six to 12 months. Very few did that. But I say to people, plan on at least three years of paying yourself a chump salary. You’re just not gonna make that much money for the first four years. You just gotta plan for that, and takeoff’s gonna take at least that long. That’s how people should plan.
Which industries do grow the fastest?
One of the things I did do in my research study, and by the way, you can get a copy of my research study at hockeystickprinciples.com for free, and it tracks and breaks down the revenue growth curves by industry, so it’s quite useful. I found that some of the really hot industries like email marketing software, once that idea was created, that concept, everybody rushed to market and the companies who could execute and had good management could really get it done. That industry, that sub-industry, did really well. I found that the energy companies did really well, meaning that alternative energy is getting really hot. People are starting solar panel type companies and technology for solar panel and different alternative energies. Those companies took off really fast, so it kinda just depends.
What’s your philosophy on equity crowdfunding platforms? Would you ever be open to doing some kind of round with an equity crowdfunding platform?
I haven’t done a round, per se, but I’m a big fan of crowdfunding. In fact, I actually invested, it was a year ago, in a company. I crowdfunded a company who had such a great idea, and that’s what I love about crowdfunding, is when people have a great idea and you just believe in what they’re doing, then pre-buying the product is well-deserved. You want to be an early adopter, and that’s why I love that traditional crowdfunding. The one I did, I met these Stanford students who had created a device that reminds you of flossing everyday, and you stick it on your mirror, it’s so nifty. It was a really clever tool, but you stick it on your mirror and then when you pull the floss out, it’ll stop blinking. After 24 hours or whatever your setting is, if you haven’t flossed, it’ll start blinking at you until you pull the next one down.
That’s great.
And they’re really good engineers. I was like, that’s just so good. I ended up buying like a half dozen of them. They were shipped from China recently and I think they have them and they’re being mailed out right now, but that was a year ago. I’m a big fan of that, but I haven’t actually crowdfunded when I put significant cash into a deal. I just tend to get to know the founders over a longer period of time.
And did the founders need to live near you in order for you to invest in them?
No, not necessarily, but actually all the eight deals that I’ve done, everybody is in Raleigh. Is that true? Everybody’s in the area.
That’s what research shows. Some people are geographically agnostic, but it helps to have that relationship. One of your other wonderful blogs is a startup is 10,000 little details all smooshed into one. I love that title. Let’s talk about the five tips for crushing the details. Starting with your find your Miss Carolyn ASAP.
I love that. Miss Carolyn, I started First Research, pretty early on, I met Miss Carolyn. This was a college student, and her name is Carolyn. I nickname everybody. Everybody seems to get some goofy nickname, and I started calling her Miss Carolyn for some reason, but she is a stickler for details. That’s how she’s wired. She’s really, really good at it. By adding Carolyn to our team, and to have her all over the details, we became a much more efficient company, and she did wonders for our company and kept getting promoted because of her ability to manage more and more details, and I see so many founders who, quite frankly, don’t ever mitigate that, and let’s face it, most of us don’t have the time to be leaders, salespeople, marketers, programmers, and great operation to details people. So you need that person, and it’s important to hire, not to overlook.
I love it. The other one, which I’ve seen firsthand so many times, is confusing unimportant details with “real work.” Like I’m too important and busy to be doing this, and you have a whole insight into that story of somebody complaining about being on the phone with the CRM provider as a waste of time, when you said, maybe not.
You’re absolutely right. Some founders, sometimes, they think that minutiae and details can’t be important, and they’re focused on the wrong things, when really, they could be focused on exactly what they should and I have found that successful founders are knee deep in minutiae. A lot of it is a grind, and a lot of it is not super sexy, a lot of it is who can grind the hardest, who can grind it out. Those sexy moments come later, quite frankly, and you’ve gotta manage details.
I’m a big list maker, and I know you’re a big proponent of that. I don’t know how people do it without it, whether it’s on your phone or what you’re gonna accomplish that day, any insights on what you do to stay productive and get the details handled?
One of the things I love to do is I’ve got one of those little pads, and they’re no bigger than your hand, and up at the top they kinda have the little wire, you know? The thing’s no bigger than your hand, and everything, I’m constantly writing things that I have to do there, and then when I fill up a piece of paper, of course I’ve marked stuff out when it’s done, I just rip it out and throw it away. It’s not nostalgic, it’s not sexy, it’s not anything. It’s not kept. It’s not maintained anywhere, I just use them and go down every day, I use a couple of pages. I just rip it out when it’s done and throw it away, I just keep writing things down that I gotta do. That’s how I do it. Other people have their own, they can use Franklin Covey or whatever, but you gotta manage it somehow. You can’t let things slip.
The things I’ve found is color coding in Gmail, they have colors you could, five to seven categories, like sales and marketing, product, HR, etc., and then I can find emails really quickly, and of course I’ll put them in folders when they appear to be done.
I know that you’re on the board of some of the companies that you’ve invested in. Are you also on advisory boards?
On my LinkedIn, I just put advisory board on all of them. I’m on the board of directors for some of the companies, about have of them, and then the other half I’m not. I prefer not to be on the board of directors, in fact, I was just invited to be on the board at one of the companies I’ve invested in, and I was like, oh, I don’t know if it’s necessary. I try to avoid being a director. I like for the founders to be directors, quite frankly. I’m a pretty loose investor, to tell you the truth. I’m not real formal.
Can you share your opinion on the importance of having good people on the advisory board as it relates to your valuation when you’re raising money?
I think too many founders don’t have board of advisors that should. I mention that great company that I’m so excited about, Myxx. Monica, she’s done a fabulous job of surrounding herself with really smart people who have agreed to be on her board of advisors, and what she does is she taps into their knowledge. They’re industry insiders and they love what she’s doing and they believe in her, whether or not they’re investors, totally separate. Many of them aren’t investors. I think it’s absolutely critical, cause then the investors know that you could go pick their brains about specialty areas and that’s really what you want. If you’re raising money, I think you should have a board of advisors, unless you’re one of those founders who is just really independent and hey, nothing wrong with that sometimes. For some people they want to be really independent, and it’s cool. It works for them.
I’m on some advisory boards, and just so the listeners all understand, if you’re not investing in the company, you still give people on your advisory board equity that vests over time in exchange for their connections and expertise.
Yes, yeah. Oftentimes they get stock options to them, or just issued warrants or shares or whatever. That’s true.
Well, Bobby, this has been so interesting and insightful. Thank you so much. Is there any last bit of advice you want to share from “The Hockey Stick Principles”?
You know, the last piece of advice I think is to really enjoy the blade years.
Source: Unslpash
[Tweet “Enjoy the Blade years.”]
Okay.
Too many founders enjoy it for three to six months and then it turns into a real grind. Seth Godin, the popular writer, Seth Godin, I think it was his book “The Tribe,” he basically says that every project gets to the point that it’s not fun anymore. I think that too many founders basically put themselves in a position where it’s not fun anymore, and I think they should put themselves in a position to make it fun by expecting it to be a really long ride and planning around that long ride. When I say long ride, I mean at least three years. I say enjoy the blade years, do phenomenal work and it’ll come around for you.
Great advice. Thanks again, Bobby for being on that show.
Absolutely. Thank you, John.
Links Mentioned
- Website: hockeystickprinciples.com
- Twitter: @bobbyhsp
- John Livesay Funding Strategist
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Thriving vs. Striving with JP Morgan
Posted by John Livesay in podcast | 0 comments
Episode Summary
Today’s guest on The Successful Pitch is JP Morgan and he has a whole insight into the different types of commitment we need to make to ourselves and to others to really make something happen. He really takes a deep dive into whether a commitment is a trap or a choice. Some of the other topics he talks about that I really love is creating a container of trust within your team, and finally he said, “When you pitch, don’t pitch to impress. Pitch to impact.” It’s the difference between pitching to be of service versus pitching to sell. Enjoy the episode. The interview begins in 45 seconds right after this information on how hosting a podcast can grow your business. Enjoy the episode.
Listen To The Episode Here
Thriving vs. Striving with JP Morgan
Hi, and welcome to The Successful Pitch. Today’s guest is JP Morgan. JP is a very unusual man and has a whole vision of creating a new world, one leader at a time, and he does this in a way where he challenges leaders and entrepreneurs to discover a whole new way of looking at something, and it all starts with this deep personal integrity, which I’m all about. No matter what you’re pitching, you need to have integrity in order to get people to buy from you, invest in you, what have you. He’s got a really interesting background with formal studies in physics and math. He built a property investing business from a backpack, built a media web company that serve local and global non-profits. He’s literally traveled the world and lived nomadically for three years so he has a lot of fascinating stories including one about paragliding the Swiss Alps and cycling in Scilla for thousands of miles. JP, welcome to the show.
Thank you so much, John.
I’m always interested to hear people’s story of origin. Obviously, you started in real estate and there must have been a moment when you said, “I am good at this. I like this, but I don’t want to keep doing this.” Can you take us back to when that was when you said, “I’m going to figure out a way to do something besides just real estate.”
Yeah. I think it goes back further than that like, one of the things that I’ve kind of taken on is that changes can be easy and miraculous and since, when I was graduating university, the President University was speaking and he said that the only thing constant is change. That really stuck with me and so I’ve changed industry numerous times and so that time, yeah, that was a moment and when I was in my mid 20s, I made good money. The real estate market was just flying up. I was in the northeast that time, so I’m flipping houses, doing some builds, doing some condo conversions and again, mid 20s, had a bunch of cash.
Most of my friends can hardly go out, afford to go out to dinner, so I said, “I wanted to go on to travels,” so I’m just going to take off. I packed everything up from my basement, from my car in the garage and I left. I thought I’d be gone six months, but I ended up being three years until I settled down again. During that time, I started another business, when I spent a number of years in that industry too, but then I turned the tap off on that and started something new once again and just what I do now.
Tell us about what you’re doing as the “Alchemist” which I of course read that wonderful book. This whole concept of, if we work at to finding who we are, how that affects culture is so important because I’m always telling people, when you pitch to get a customer, to get funded, to pitch anything, you’re pitching yourself, and you obviously have to define your own brand and your own culture even if it’s just you with your own company, so what do you do as an alchemist that helps people define that?
Well, working backwards from the end result, which is creating a business or getting buy in for your team or getting money for your pitch or whatever, it’s the same selling as to anything. I’m a big fan of Gandhi’s message be the change you wish to see in the world, and I’m an extreme pragmatist, so I don’t just like it as a nice phrase that makes you feel good. I’m thinking, well, how do we actually, pragmatically turn it into a doing and how can we actually do being, and so my way of thinking about is that the sum total of our both conscious and unconscious doings, what the things were intended, that is who we’d be, and if that’s the case, then how do we change all of the doings that happen intentionally and unconsciously. For me, that really comes down to how people see the world and how people see themselves. On the door to my studio in Santa Monica, I have Aramaic letters, which if you read them out, they say the words, abra cadabra, two words.
Etymologically, that means I create as I speak and so I’m a big believer that it’s through our language both internal dialogue and what we speak that actually creates our way of seeing the world and creates our way of seeing ourself and so when I sit with people, I call it alchemy because I create the container of a really strong trusting relationship and inside that strong bond of trust, I can really turn the heat up. I can challenge them. It can be uncomfortable because we have that trust and container. In alchemy, there’s three components. There’s the ingredients, the heat and the container, and if you have all three, those transformation from lead into gold so it’s kind of a metaphor for the idea, for the work, really transforming the way of seeing the world, seeing themselves through that relationship and that intensity.
Can you repeat that, JP? There’s three things with.
For alchemy yeah. Alchemy, the story of Alchemy from the Alchemist, it goes back thousands of years and there’s always been philosophers talking about Alchemy turning lead into gold but Carl Young had the insight that this is actually a psychological process and this is a metaphor. When you have a container and you put the right ingredients in the container — tincture, some lead — and then you turn up the heat, that lead will turn into gold mythologically but actually what that’s saying that if you create a container of relationship or if you’re leading an organization you create the container of trust where you’ve got 10 people and everybody trusts each other but no matter, what happens in here stays in here. No matter what you share here you won’t be judged et cetera, et cetera.
You have that strength of containment then that container can hold more energy and intensity, somebody can shout and it’s okay, somebody can cry and it’s okay. There can be emotional intensity and it’s when you have the emotional intensity and the containment so that it doesn’t leak out. You don’t start to shame for it, somebody doesn’t ran off and say something about somebody else, you don’t have to fear that. When those things happen then people transform. You’re willing to touch that, go to that place to see that thing. When I talk about the way we see our world, it’s not the surface level seeing, it’s the way we see the world unconsciously, automatically that started when we were a little kid. I’m not a Freudian psychologist where I’m going back and looking at life but at least referencing the idea of, this patterns began at some point.
There was a point where I thought that in order to be powerful I had to have a lot of money. When my dad used to take his money out and his cash when I was a little kid he’d say, “You put the hundreds on the outside so that when you have a bunch of ones, it looks like you’re rich,” and I was like, “Ooh!” That became my freaking operating system from age six or like how many feet is that boat? How many feet is that boat? We’re always comparing who’s got the bigger boat? As a little kid that was my orientation and in some ways that served me growing up but now I’m also seeing how it hasn’t served me because I’m not okay unless my boat is X feet or I’m not okay unless I have this much money so I’ve done work to undo that. That’s what I’m talking about.
Source: Unsplash
[Tweet “Create a Container of Trust.”]
I love that. We’re going to Tweet that line out, “Create a container of trust,” because especially if you’ve a small business, and you can get the people who work with you on your team to feel like they can … It’s a container of trust and they can be themselves and not be judged or tired than you’re going to have really committed loyal productive team. Then of course if you can get clients to join that same culture container of trust you really have something. One of the things I love about what you do on your website jpmorganjunior.com is very clear what you do and who it’s for and who it’s not for.
The more specific we are the … I always say that the riches are in the niches and so I’m fascinated by your niche. You’ve given a TEDx talk on your experience traveling the world and how to see that so tell us … Since we’re talking about the container of trust, let’s start with group partnerships. What does that look like and can you tell a story without having to give confidential names of what that looks like? A group partnership where there’s a container of trust?
Yeah, sure. I didn’t do groups for a long time, but I had a number of people that really wanted to work with me that couldn’t afford the investment at the time and so I decided I’ll do one and I’ll put a group together to see how it works and I capped it at six. I had also been a member of a coaching group with my own coach and I actually appreciated having a group of people that were on a similar mission and similar stage of their journey because of the energy that was created in the group. With mine, it was like I really do the same thing as I do in the one to one coaching but I do it in the group setting.
We take turns and our people turns, I’ll coach one person and I go onto the next and I go on to the next and over the course of two hours and I’m coaching one person and there’s a group of six entrepreneurs including them, they’re being served but also the five that are also on an entrepreneurial journey are being served too because that person is willing us to go deep and touch something that is probably going on for the other five people, helps them to go there too. You end up going places where you might not have had the courage to go or you might not have had the awareness to go. That’s the first piece.
Then the secondary gain is, because of the trust, which you just mentioned in the organization, you mapped that out. The people start to trust each other and then they start to serve each other and so we can set up a base camp, an online portal where everybody is supporting each other. They have calls between themselves and so it’s not just bunch of people helping each other out with business tips, the thing with my groups is just like … the leaders and entrepreneurs are from completely different industries and often at different stages, I’ve got some people that have been in business for years, some just starting off, some running a company with a team, some just a sole proprietor but it doesn’t matter because the work that I’m doing is so much more at the personal level that all of them are facing the same stuff on the inside. When we sort that out, when we straighten that out, the work they’re doing in their industry, in their business, it changes.
Let’s talk about the ingredients that are part of our business and personal life, I think a lot of people try to compartmentalize, “This is who I am at work and then my personal life is a completely different persona.” From what I have read and heard you talk about here, it sounds likes you’re about integrating the personal and business life. I’m I on the right track?
Yeah. You could integrating or you could say just not falling for the illusion, which you’ve already said that they are separate in the first place and just being myself as much as I possibly can in all arenas and letting that all shine through. And there is value in creating distinction too, like I’ve got an office where I do my work and a home where I do my home life. It wasn’t always like that. I had a virtual business for years but now just separating … Creating ways of separating them out is powerful too, creating distinction around my time. Yeah, I can meet you for coffee or you could come to my studio and we can have an in depth conversation. I think it’s important to be distinct about what you’re doing and when you’re doing it and at the same time, who I actually am, as the same person all around. Who I’m being as the same person all around. It’s just what are we doing right now?
One of the things you have here is that your job is to serve your clients not please them. Can you give us a story of someone that you had to serve and not please.
Yeah, everybody. Everybody, because my general tendency … A lot of the stuff on my website, it’s not necessarily marketing speak, it’s declarations to myself so that I remember that they’re true and so this would be one of them. It’s something that I live is true but I’ve created that and it’s because it was a edge for me. I spent my previous two businesses in industries like web media and real estate and just my life in general was being a very likable friendly person, really good at making friends, doing the thing that’s going to essentially please people and have them feel good to be around me, which worked great in real estate. You feel good to be around me, you trust me then, “Hey, then let’s go and do this business,” which is a separate thing, “I’ll sell your house for you.”
Then in web media it was like, “Oh, he’s friendly, lets work with him, right?” But in my work now what I do is that my relationship and the conversation, the dialogue is the actual service and so sometimes it becomes, you liking me in a moment or you feeling comfortable, or you feeling pleased by me in this moment is actually contradictory to what’s most going to serve you. There may be something I need to say to you, there may be a way I need to challenge you that’s not going to feel very good, that’s going to piss you off. People curse my name often, when they’re my clients. It’s understood that it’s coming in a package of love and we have that trusting relationship in the container that supports that but it doesn’t always feel good. That would be the serving side.
Now one of the things that everybody’s always looking at is, “How can I scale my business?” You did a whole video blog about that. Can you describe what you talk about there? The ax versus ads.
Yeah, I’ve seen that a number of times in my own businesses for sure also my clients have bigger businesses that I’ve had. I think for everybody, they start off sole proprietor or small business and you are just doing more stuff to make more money and doing more stuff to make more stuff happen. Then your life gets busier and busier and you try to be more productive, you’re like, “Let me more efficient with this, let me set up this thing,” but you’re really trying to do it all and you’re just going to run out of time, you fear and then it becomes a point where like, you could only grow your business if you completely radically change what you’re doing. It’s really hard to inch your way, it’s like almost a glass ceiling.
It’s hard to inch your way into scale, there comes a point where you have to just take an axe to certain things and maybe it’s you just stop doing these things completely or maybe you’re delegating certain things and hiring or may be you are just creating systems or hiring systems for it … Like you and I have talked about me potentially doing a podcast, in order for me to step into that I know it has be a step change in my business. I don’t want to just start taking on more work, I’ve been through it all before so I know the value in what you’re offering because it’s an end to end solution, otherwise it would be to me take on a podcast would just be me adding loads more time which isn’t going to be effective.
It’s not the smart way of scaling. And it happens over and over again, it’s not just people going from sole proprietorship into having team. I’ve worked with leaders that have 100 people on their organization and if you want to grow, you can’t just do more, it’s true for everybody, you have to remove stuff completely or you have create whole systems that in the beginning feel like an over-the-top cost or it feels like overdone but then it filled, it’s filled with responsibility and action. I think the important answer to this is that growth happens in step changes not in the smooth transition. If you’re feeling at your edge and you’re feeling like you’re strapped then it’s time for a step … Strapped for time then it’s time for us to have change.
Well, just to use that analogy you’re talking about, whether you’re going to host your own podcast or not, it all becomes about what you vision is, “Do I want to help more people than I’m currently helping and do I want to scale my business? Is there a huge return on my investment for hosting a podcast?” You’re creating blogs now as a way of getting your content out there to attract your right customer but if you could enhance that with a podcast once a week, targeting the right people then that might be something that works for you especially if you see other people who been able to do it in a way that scales their business then you think, “Ah, that’s for me.”
That goes back to what I said earlier, you’re so clear on who this is for and who this is not for and the same thing is true before you start a podcast or any other tool you might use to create, enhance your brand, get perceived as a journalist, as a host of a podcast. The things that have happened for me from hosting a podcast to turning that into a book, to getting on television have been revolutionary, so that’s why I’m so passionate about helping as many people who are thought leaders like yourself, take a look at that journey because it’s rocket ship ride and if you love talking to people and getting to talk to people that you would never get to talk to, then it’s a fascinating and wonderfully rewarding way to connect.
Yeah, cool.
Because this is called The Successful Pitch, one of your blogs is How to Pitch, and we’re going to Tweet this out, “Pitch to impress versus pitch to impact.” Please JP explain the difference.
Source: Unsplash
[Tweet “Don’t pitch to impress, pitch to have impact.”]
Yeah, it’s subtle and it’s about where we come from. When we think about going to pitch, embedded in that word is much meaning, so much, we could say cultural meaning expectation but I’m going out there to throw this thing with the hope that they catch it and if they catch it then I get would I want. I’m pitching this thing out there and if they catch it then I get what I want. When we say the word pitch we’re thinking, I hope. It’s almost like I hope I get what I want.
Yes, somebody might catch it, somebody might not catch it.
Yeah, and if they catch it I’m okay and if they do not catch it I’m not okay.
Mm-hmm, yes.
Yes, so you want to transform the whole concept of pitching into something that is not about pitching so that hopefully they catch it and then you’re okay. It’s pitching as a service, like servicing the ball and they help it back and if you really give them a really good pitch then they get a great hit, then they’re happy and they’re in a good place. Them hitting a home run is them being able to hit this ball, meaning they’re able to invest in you. That’s the service, that’s an offering.
It is this very subtle thing but so powerfully different because when we walk out on stage or in a room to pitch and you’re pitching as an active service then you’re thinking, how can everything I say right now add value to these people’s lives? How can everything I say right now show them that the opportunity to be involved in this organization is a gift to them. How can I show them that this is one of the greatest chances they have not so that they’ll like and give me money, so for them, for their sake. This is really just a shift from for me for them. Pitching to impress is for me, pitching to impact is for them and we come from a different place, different ideas will come off right off the bat.
Also, your confidence goes up because you’re not so worried about whether they like you or not, right?
Absolutely.
Then, they’re not going, “Oh, I’m I good enough?” All that stress goes way down and then your confidence goes up when your serving versus selling as you say, which is just fantastic. Now, another topic that’s of huge interest to everybody is this level of commitment. Whether you’re pitching again to get someone to join your team, pitching someone to become a client or invest in you, everybody wants to know, what’s your own personal commitment and do you keep your commitments? You have a really wonderful fresh take on the three types of commitment. Please tell us what those are.
Yeah, just kind of hit me because when I worked for for my clients and asked them to make commitments and call a commitment out of them, I’ve just categorized different types of commitments. Making the first category of commitment is the commitment to self, like I might say to myself while sitting in the studio, “I’m going to go to the gym tomorrow.” I’ve committed that to myself and I made a commitment and I may be my word, I may be my commitment and go to the gym tomorrow.
A step up from that is what I call the witness to commitment, so from self-commitment to witness commitment. That is where I’m at home sitting at the table and my wife is there and I say, in the presence of my wife, “Hey babe, I’m going to go to the gym in the morning.” Now, not only have I made a commitment to myself but I’ve made it in the view of somebody who has heard it and witnessed it and not only do I want to do what I said but I also want my wife to see me doing what I said to myself. That’s a witness commitment. It’s a bit more powerful because I’m not only accountable to myself, I’m accountable to what somebody sees of me.
Then the third level, which is even more powerful is what I call an entangled commitment. An entangled commitment is when my commitment, if I don’t do it, it will actually impact another person. Not just their perspective of me but the flow of their life in what’s happening, what they’re planning on. An entangled commitment would be, “Hey John, I’m going to meet you at the gym at 7:00 am tomorrow morning and we’re going to work out together.” Then not only have you witnessed me making a commitment to myself to be there but you’re entangled in my commitment such that if I’m not there you will be impacted by that directly.
There’re so many opportunities in life for us to use entangled commitment but we’re often stop at a witnessed commitment or even if we’re even brave enough to go there from a self commitment. This was really born from a video series I did some years ago which is called the DIY Lie. One of the ideas in that is that we beat ourselves up for like, “Oh, I’m really good at doing something when I’ll say I’ll do it for somebody else but I’m not as good as saying, doing something that say I’ll do for myself.” We beat ourselves up for that, when I look at it, what if that’s actually beautiful and perfect? What if it’s such that it is through our engagement and our entanglement with other human beings the we’re able to access our highest capacity to be an action and to be our word?
If that’s the case, let’s not beat ourselves up, let’s use it. Where can I make entangled commitments? With the client the other day it was like, “I want to achieve this amount of money, well what’s going to entangle you in that? How about committing to your wife that you’ll take her on holiday to Mexico or something by this date. It’s not just you making or not making it, it’s suddenly you’re entangled into somebody else’s world and they’re counting on you and then it pulls you into action and into integrity in a more powerful way.
Yeah, I love this whole thing, I’m going to Tweet this line out too, that you have which is, “Commitment is either a trap or a choice.” Of course committing to get married or committing to have a client’s back or committing to the investor you’re going to be a good steward of their money. People feel like, “Aah, I don’t want to be trapped into this,” but if you shift that distinction to, “This is my choice,” then I think it’s a huge shift in everything.
Source: Unsplash
[Tweet “Commitment is either a trap or a choice.”]
Let’s talk about some of the outcomes that you’ve been able to have by creating these creative partners in the world. I think the one that really jumps out for me is that Brick and mortar school for start-ups and entrepreneurs. Can you talk about that one?
Yeah, Escape The City is a beautiful company in London and a client and I spent a day in a canoe on a river in London just envisioning what he wanted to create there and we worked together for a number of months. It’s one of these things where you just put your possibility out and you make these bold asks and people say yes, miraculous things occur and so from nothing … Oh, actually no, he had a company going already, it was a recruitment company for many years and through our work together and him just being willing to put himself and ask for it, he was able to secure an entire floor of a huge building right near Bank Station which is totally in the center of the belly of the beast of the city of London and this whole floor was dedicated to what he called The Escape School.
In that school he has thousands of people who come through there that are bankers, lawyers, insurance people that are just looking for another way of being in another life. He had a lot of his philosophy going already and this company going already and our work was really around, how could he, can take who is and what his philosophy is and how can he bring it into these people’s lives in a way that has them be more liberated too. This often happens, in his situation it was very … Along the same lines of my work it looked like it but all the leaders that I work with, the coaching that we do often becomes part of their way of their leading in their organization.
I’m thinking of a client right now who’s running a tech company and we have conversations about who he’s being and his willingness to show up and to be self expressed and to be vulnerable and to hear people out. He has meetings with his team and he’s coaching them, he’s leading them but he’s coaching them. He’s helping them to draw this stuff up themselves so coaching for me is very much leadership as well so bringing with the work I do into an organization, people often ask me “Would you come in and work with my team?” I say, “How about I work you, then your break it with your team?”
Mm-hmm. Because once you have coached and healed yourself and are comfortable in your own skin and know what your business is then you can lead other people because you’re living it as opposed to just having somebody from the outside come in, would that be accurate?
Yeah, exactly. I tell my clients like, wear the robes of your religion and your religion is like, whatever your vision is and your culture for your organization, just be that completely. Like you said I have a niche, it’s a niche that’s submerged and my niche is I work with people at the top of whatever it is they’re doing, whether you’re a sole proprietor or they’re running a small-medium sized company. That’s who I work with so I’m not going to come work with your team because that’s your job. You’re going to grow and create your company through who you be. Also it’s a challenge back to people to see that there’s so much more impact that they can have through their being and they realize. One will ask me to come in and fix their team for them, I’m going to really challenge them to push back that there’s something that they need to change.
You’ve also worked with another client that did something in nondeveloped countries in the start up world. Am I getting that right?
Yeah, I’ve worked with a number I don’t know which you’re referring to or thinking of but years and years ago … What happened, my web media company prior to this business, it was working strictly as non-profit, pure social enterprise, most are non-profit. I found myself immersed in the world of a lot of these organizations and doing the web media noticing that they didn’t really have their language, having a bit of background in business helping them kind of put together how they speak or what they do, then I started more working in just how they’re doing what they do.
I’ve worked with a bunch of leaders of these organizations the one that’s close to my heart is Ravi Kumar — he’s just an incredible beautiful man in India who’s worked tirelessly, 13 days out of every two weeks away from his family, sleeping on a cot and just helping this village that was disseminated through industry coming in and changing their whole way of life. Then industry being pulled out because of the environmental damage it did, then there’s a quarter of a million people around this lake that have nothing and he’s helping them to rebuild and fighting for their rights and communicating with the government. I just spent two weeks with him and talked to him about communicating and got to see the work that he’s doing.
Yeah, I coached him and helped him with a few things but the truth is, me spending time with him was more impactful on me that I imagine was on him. Just to be around somebody who lives and breathes service like that, night and day was such a gift and it’s true for all the people that I work with as well. There’s always a gift that I receive from everybody, I just sat in the back of my studio before this call being photos of my clients at my desk just looking at them because this is week off with what I call social alliance week so they don’t have a coach this week. One week a month they go back to being on their own but I was just sitting and looking at them all and looking at their faces and just realizing how deep the relationship is and how much I love them and how much each of them are a gift to me. I learned something from every single one of them.
Sounds like a great two-way street that … One of my favorite lines is when we’re healed we’re not healed alone and I think that’s very true with the work that you’re doing.
I love that.
JP is there any book that you would recommend that inspired you in hustle or business development?
Yeah, there’s loads but the first one that comes to mind is one that I’m immersed right now in a year long course which is “The Way of The Superior Man.” I get it’s mostly a book for men but “The Way of The Superior Man” by David Deida, it’s a spiritual book, it’s about being an enlightened masculine we can say. I love that book. Then there’s “Self Reliance” by Emerson, it’s an essay which I’ve read, I don’t know, loads of times which I love. It’s a short essay, it’s a bit dated to some gender and race stuff, that doesn’t really apply nowadays but the essence of it is really powerful and “Tao Te Ching,” man it’s just sitting right net to me and it’s just a go to for me.
Well that’s great. Well, people can follow you on Twitter, your Twitter handle is @jpmorganjr. I’m a big follower, I love your posts, obviously your website you’ve been generous enough on your website to allow people to get some of your stories and things that you don’t share on your blog which is a great incentive to get people to engage with you over and above what they can read on your LinkedIn profile.
Yeah. It’s really just for me, the email list, like I don’t really market, I don’t have anything to sell anyway, so when people sign off my email list, I really take really personally. You’ll get a personal thank you from me and I look to really personally connect to everybody on there and just be on conversation with you as much as I can. Everyone is welcome.
Well, I can’t thank you enough for sharing your calm, you obviously did a lot of work on yourself because you have a very relaxing presence to you but it’s not attached to an outcome if that makes any sense.
It makes perfect sense. I’m really grateful for that and your graciousness and also just to say here in the podcast, not afterwards, John, I’m really grateful for your acknowledgement and the time you’ve taken to look at my work and what I do and how you’ve a point to really help people know where they can reach me and what I’m up to. I really appreciate that.
My pleasure. I love to help spread the word of people like you and yet another reason why I love hosting a podcast is I get to be a little bit of a channel to help other people get their great message out. Thanks again JP for coming on the show.
Thank you, John.
Links Mentioned
- Website: jpmorganjr.com
- Twitter: @jpmorganjr
- John Livesay Funding Strategist
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