TSP007 | Ben Larson – Transcription

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TSP009 | Paul Grossinger – Transcription
TSP006 | Jim Beach – Transcription

John Livesay:

Today’s guest on The Successful Pitch is Ben Larson who is the director of the Founder Institute from Silicon Valley. Ben has an amazing background where he just got back from Europe and he works with startups across 70 cities in a four month program. He has an incredible smart story telling acronym to share with us on today’s show. Let’s start with welcoming you to the show and tell us how you went from a professional photographer and even before that a civil engineering into being an expert in the start up world.

Ben Larson:

Thanks John. Yeah, so my background is quite varied, not very often do you hear the combination of civil engineer and photographer.

John:

Right.

Ben:

But what it paints in a, I think what makes it most unique is the fact that it’s a combination of and desire to kind of really express myself per both my left brain and right brain. If people still divide it like that.

John:

Yes, they do. I talk about that all the time about trying to translate left brain into right brain emotional story telling, because, I’d love your opinion on this, but my take is that’s where all the selling happens. People buy emotionally and then back it up with the left brain logic.

Ben:

Exactly, exactly. Yeah, you know, it’s interesting, another, well, it’s not the best acronym, but one I kind of developed over the last few months was one included the words passion and intelligent and grit and so it’s an unfortunate acronym, so that spells PIG, but passion is something that really comes out of your right brain, I feel like, and it’s that ability to be so enthusiastic about something and it’s kind of brings out the artist in you, you wanna be creative and do all of that, but the intelligence side and being able to structure your thoughts and really think intelligently about everything is the other half of the brain and, you know, being more analytical and putting together all the pieces and painting the right picture.

You know, it’s really a combination of everything. So, that diverse background that I have has really lend me into this kind of generalist position, which is very important kind of when you are first launching the company, because you are wearing so many different hats.

John:

Tell us about the grit part of the PIG acronym.

Ben:

Right, right. So, the grit part is essentially what I look for when I’m [cuts out] founders. It’s just the ability to keep going. It’s really easy to get excited about a new idea, put together a lot of stuff in a short amount of time, but once that honey moon phase is over, you know, what’s going to keep you going. What’s going to keep you going through all the noes and the naysayers and it’s grit. I think it was the, one of my favorite stories in the tech industry around here is, you know, the founder and CEO of Pandora. Right now it’s a household name. It’s like, oh, internet radio, of course. It seems obvious, what most people don’t know is that he went through 300 investor interviews before someone said yes.

John:

Wow.

Ben:

That’s an incredible level of grit, right?

John:

Yes, reminds me of the Howard Schultz story. He had a lot of noes before Starbucks got a yes.

Ben:

Exactly. To the layman it’s a no brainer. That’s just because they didn’t see it at the very beginning.

John:

What kind of advice do you give startups to make sure they do have the grit to keep going? Is it figuring out why they want to do it in the first place, is that one of the key things that helps you get over them?

Ben:

Yeah, the why, the why you’re doing it is so important. I mean, I can’t talk about that enough. At the Founder Institute, we work with a lot of early stage entrepreneurs and aspiring entrepreneurs. Some people call them wantrepreneurs and our program, like you said, is four months long and as one would suspect, we provide a lot of structure, a curriculum, mentorship, all that kind of stuff, but one of the greatest takeaways from the program is the behavioral change mechanism that it is. It’s, you know, we are turning people into those entrepreneurs that can show grit and speed and action and all of that and that’s, you know, it’s just what it takes to compete these days.

John:

Right. I mean, the statistics are only 1% of pitches ever get funded and so you really have to be at the top of your game to do that and certainty going through the founder institute. Tell us how that all came about and how you got involved with it.

Ben:

Right, right. So, it started about six years ago by Adeo Ressi. He’s a serial entrepreneur here in the valley. He’s been here for about 20 years, just grinding it out and he’s been through the highs and the lows and have seen it all, seen pretty much every angle of the startup world and his mission when he first started the Founder Institute was to make the process of becoming a startup entrepreneur easier. To make, you know, the leap a little bit less drastic, because we’ve been there before and that’s kind of what lead me to the Founder Institute. I made that leap about five years ago now and it was drastic. It was like jumping off a cliff and I didn’t have the program and I wished I had.

So, I learned those lessons that many of us entrepreneur learn in the first year that, you know, no amount of YouTube watching or article reading will really get your there. It’s just you kind of learning. So, what we try to do is accelerate that process. Allow a little bit of a safety net to allow people to keep their jobs while they’re going through it and give them a little bit of traction and comfort before they make that complete leap.

John:

Do you have a favorite success story of someone you worked with that you want to share?

Ben:

Oh, god. Yeah, I actually do. It’s one of my most recent grads out of the program that I was personally running here in Silicon Valley. It’s just an amazing story. In fact, I’m trying to loop her in to be part of our recruiting effort for the next class, but her name is Purva Gupta as the name might indicate, she’s from India, so she’s an immigrant in the tech world. She’s a she. No tech background. First time entrepreneur. She was on a visa. I think it’s an F2 visa, which means that her husband was here as a student.

So, needless to say, I could go on, but needless to say, the deck was a little bit stacked against her. She came in with an idea in the fashion industry, again, no experience in the industry, and it was a pretty bad idea, just to be blunt, but she has the hustle and the willingness to learn and listen and she works her butt off and frankly throughout the four month program, she made more progress than any of our other founders in the program and by the end, she was building her team, raising money, building traction, and four months from the time we met her, she had raised her first round of funding and built a team of four people. Now, she’s hiring people away from Netflix, Facebook, and all that. It’s just amazing. Like, it’s an amazing story. Now she’s sponsoring her own visa and doing just amazing. I love it. It’s why we do this.

John:

Sure. One of my big takeaways from what you just said is, she’s coachable and I think investors look for that as well and if you start off with someone, as you said, who was willing to both listen and learn and keep that mindset no matter how successful you get, especially when you’re asking for large amounts of money, that’s really attractive to investors, don’t you think?

Ben:

Oh, definitely. It’s invaluable and it goes back to that intelligence part, what I was talking about before. To be intelligent, yes, there’s the IQ side, but that’s only half the battle. The other half is learning how to think intelligently and to know when people are giving you advice and they know more than you and to know what you don’t know, you know, you can’t put a price on that.

John:

Know what you don’t know. I love that, because that’s really all the stages we go through when we’re trying anything whether it’s learning how to ride a bike or drive a stick shift car, we don’t even know what we don’t know and you have to be willing to be in that uncomfortable zone and a lot of startups as you described, you know, when you make that leap, it feels, I don’t even know what I don’t know yet about running a business, but you’re willingness to stay in that uncomfortableness and know that it will eventually pass is what I think really distinguishes someone who just gets excited about a new idea versus someone who has the grit, as you say, to stay with it.

Ben:

Exactly.

John:

I love that. Would you talk to our listeners about your wonderful post on LinkedIn about smart story telling and what that SMART acronym stands for?

Ben:

Sure, sure. So, smart story telling is more about the approach to pitching versus the structure, like there’s plenty of very smart people. Guy Kawasaki being one of them with the Art of the Start and the Art of the Start 2 now, that can tell you how to structure your pitch, so that you have all the right pieces. What I try to get at with the smart story telling frame work is how to go through that pitch, how to make it sellable and how to make it convincing and how to not lose your audience while you’re going to the sides. What a lot of our new founders fail to realize is that, you know, when you’re telling the story, it needs to make sense.

I don’t know how else to put it, so the smart story telling frame work is based on an acronym, so the word SMART. So, the S is set the stage, the M is managing expectations, the A is answering all the questions, R stands for repeat, and the T is the take it away. Now, when you’re setting the stage, you’re getting the audience into the right mood, right? You can’t just jump into it. We have this joke amongst the directors and myself and it’s, you know, have you ever been pitched assaulted?

John:

Yes!

Ben:

Sometimes you turn around and, you know, especially if you’re an investor. This is has happened to you a million times. You turn around and someone is in your face and all of a sudden there’s spewing out ideas at you and it’s like, say, you don’t even know where to begin, you don’t even know what to think, and where you’re standing. So, by setting the stage, you’re putting in the perspective and allowing them to anticipate what you’re going to go with next. That anticipation is what kind of leads to the next part of the acronym is managing the expectations.

You should literally be leading your audience from once slide to the next. They should be able to guess what your next slide should be.

John:

Oh, I like that, they should be able to guess. Any suggestions on how to make your slides have a logical transition. Is there any tips that you can share with us on how to do that?

Ben:

Well, there’s the, well, okay, the very simplest way to do it and this is like, you know, I guess, SMART 101 so to speak, but it’s simply ask the question at the end of your slides. So, you pose a problem. It’s like okay, how do we solve this? Well, obviously the next slide is going to be the solution, right?

John:

Yes.

Ben:

It’s such an easy, you know, an easy way to make that transition that I’m surprised more people don’t do it.

John:

You know, all the pitches that I see from the clients I work with, I would say more than half don’t have that in there and they don’t have the structure in there and that’s such an important part of making somebody A) understand what you are talking about and B) stay interested, because you have to keep people, as you said, anticipating and involved. You can’t just be speaking even in an elevator pitch or a presentation pitch in a way that is information. We want to get the concept of transformation across, right?

Ben:

Right, right.

John:

Great stuff. Alright, so now we go on to answer the question that you posed while you were managing the expectation, right?

Ben:

Yeah, exactly and like I said just said, if you literally asked the question, then you answer it, but let’s dig a little bit deeper into this, because so many times on slides, people will present, you know, erroneous information that they never really get around to addressing. I’m like, why did you put that information in there if you’re not going to talk about it in the next slide?

John:

Can you give us an example? Are you talking about evaluation, are you talking about traction?

Ben:

The place that I see this the most is in the addressable market slide, kind of a novice entrepreneur, a lot of times they’ll want to make their markets seem as big as possible and so for instance, I was working with a founder the other day and they were working on a, let’s call it Uber for your personal stylist.

John:

Great, okay.

Ben:

It’s a great idea if they can get it to work, obviously, but when they got to their addressable market slide, they put up two market statistics and one of them, which made sense, was the personal stylist market is a, I don’t know, 300 million dollar a year market. I’m like, okay, that’s a little small, and they were like, but the ecommerce fashion industry is a 117 billion dollar a year industry. I’m like, oh, okay, so you’re going to combine these two, right? The next slide, he just goes on to talk about his personal stylist, you know, application.

And then we got to the end of the slide and I’m like wait, you never talked about how you were going to incorporate ecommerce and not saying that he even should at this point, because, again, he’s just starting with an idea and I’m all about keeping it simple, but if you’re going to present that information, you should as hell answer it.

John:

Ben, you bring up such a good point that is such a valuable takeaway for all of our listeners today, which is the minute you don’t explain something clearly and you have a lingering question in the investor’s, or whoever you’re pitching, mind and you continue you talk, they really stop listening or they’re listening for the answer to the question they want and they’re not listening to what you’re talking about. So, it’s really imperative to bring them along and don’t, the confused mind always says no is what I tell my clients and..

Ben:

Yes.

John:

And we wonder why they get noes and it’s because you lost them on slide about the market size and the minute you lose them there, nothing else you say even goes in, because they’re still waiting that answer and until they’ve got that answer, they’ve lost all the traction with them. So, thank you for that detailed example, because it’s so helpful for people to understand the nuance of keeping people through this whole smart story telling process. So then we go to the repeat. Obviously, it’s like washing your hair, right?

Ben:

Exactly, rinse and repeat.

John:

So, keep that whole structure, question, answer; question, answer. Is that the jist of the repeat part of it?

Ben:

Yeah, pretty much. It’s, you know, when you’re going through it and you’re structuring everything and we do this a lot over and over again when we are reviewing people’s pitch decks. It’s like, you need to repeat this process to get to that end game. Like, you have the ability to lead the conversation. You know what the beginning point is and you know where you want to go, now you gotta take people there and if you’re not doing that, you’re failing.

John:

Yes. I talked to people about it being a flight plan and that you have to be a co-pilot with your audience and you’re responsible for putting the flight plan, like you said, and the take off kind of stuff is your last acronym there with the T, which I love that.

Ben:

Yeah, and then, you know, not only taking there, but also taking advantage of the situation and being able to takeaway what you want from the pitch. If you successfully told a story and you’ve answered all the question, now you’re in a power position to be able to ask for whatever it is that you want.

John:

Right and sometimes that’s the next meeting and sometimes that’s money, right?

Ben:

Exactly, exactly. You might as well to default to the next meeting, but yes, asking for money sometimes leads to the next meeting, because they are going to want to know more information.

John:

Right, let me ask you this, Ben, because a lot of clients I work with say, when I ask them how much money are you looking for investors to invest with you, they’ll say between a million and three million or 500,000 and 750,000. I’m like, we gotta get that to a one number, not a range like that, right?

Ben:

Exactly. Yeah, it just looks like you don’t have it well thought out and it sounds like you’re asking for an arbitrary amount of money, just because it’s, you know, what’s hip and what’s standard, but if you are actually intelligent about it and go do some rough calculations, you know exactly how much money it should take for you to live for the next 18 months.

John:

Talk to us about traveling Europe, because you must have gotten such an interesting perspective in addition to all your expertise in Silicon Valley. How does Europe and start ups differ versus what’s going on in Silicon Valley.

Ben:

You know, I learned a great lesson through my travels and what I’ve learned is that it’s best to assume there are no unique ideas.

John:

Love it.

Ben:

Only unique ways to approach those ides. So, there’s two things that there are no unique ideas, because whether you’re here or in Lisbon or you’re in Athens or Berlin, everyone is thinking about the same type of ideas. The thing about these different areas around the world is that the ecosystems are different, so there’s different challenges that are faced by the different founders and those challenges are what are going to lead it to be, you know, a unique offering, but you know, unfortunately in some regions, those challenges also slow the rate of progress and the ability to grow that idea.

John:

Got is, so no unique ideas, only unique way to execute them, which really goes to the whole concept of what you were telling us either about one your favorites of success stories is it’s about the person and not necessarily the idea. The ability to pivot is really key, but really it’s about does that person have, you know, the passion, intelligence, and grit to – is why you want to invest. So many people get so in love with their idea and they think that’s what they have to talk about and how something works as oppose to getting people to sell themselves first.

Ben:

The reason I focus so much on smart story telling and all this is because you want to enchant people and you want people not to think about the details that you aren’t talking about. You want them to see you for you. They want, you want them to think about you as the entrepreneur and not get lost in all the details that you’re not talking about or that you’re not stringing together beautifully.

The other assumption I always talk about and this gets back to kind of, answering the questions, it’s – I tell people to assume that everyone they’re talking to has ADD, because I kind of do. If you lose me on slide two, I don’t hear a damn thing you’re saying anywhere after that. So, I know most of these seeds and most successful entrepreneurs that you’re going to be talking do have, at least at some level, some ADD.

John:

It’s true! We all have, you know, everyone’s attention span, that’s why there’s seven second videos and all that.

Ben:

Exactly.

John:

I want to have you expand, because I really, really, we’re going to tweet this out about see you for you, that’s the way to get an investor, enchant the investor. It’s such a great word. I’ve never heard anybody used that before. I’ve talked about making yourself a resistible to investors, but I love the concept of enchanting them. So, that’s almost like putting them under a spell, because the story is so engrossing whether the story is about your own personal story of how you got this idea or how you see this change in the world, right?

Ben:

Yeah, I mean, enchanting. I mean, God, it could be used in so many ways. The way I like to think about enchanting is, you know, you can look at it under the microscopic level and as you tell your story, you’re trying to lead them on from one slide to the next, but you also have to think about it on the bigger picture. You know, think of your 30 second elevator pitch as the first slide to your next pitch, which might be a three minute pitch, that’s your next slide, and then your three minute pitch leads to a 15 minute interview. Who knows.

The whole time you’re always trying to lead to that next step and if you’re doing that and you’re doing it successfully, you’re enchanting your audience and that’s what makes it a successful product. So, this kind of flows over into the other thing, what are you pitching? If you’re thinking about the customer journey while you’re developing your product, you can lead that customer along, so they’re getting more and more engrossed in your product.

John:

Which leads to your other great blog post that you have up on LinkedIn is about knowing your customers. Such great details. So, you’re not only enchanting the investor with your pitch, you want to be able to show them examples of how the customer’s are enchanted with your product or service, right?

Ben:

Exactly, exactly.

John:

Can you give us a story of a pitch you heard where you hear somebody talking about their customer being enchanted with it and, you know, coming back and wanting to use over and over again and make it part of their daily life whether it’s the person you were just telling us the story of how she had a bad idea and it turned into a good one or anybody else that you can think of?

Ben:

So, I don’t know if I can point to any particular example, but I would say is the people that have the most enchanting products are the people that know their customer the best and to really understand that, you need to know what a customer is. A customer is not a school. A customer is not a small to medium size business. You know, a customer is not an inanimate object. A customer is a person and so if you know that person, if you know that person’s pains. You know what that person eats for breakfast on a normal morning. If you know what that person’s major struggles are throughout the day, you’re going to create a product that is more enchanting. So, it’s just thinking about that, being very customer centric.

John:

Do you recommend start ups mini focus groups or do you have any suggestions on how to get that kind of customer knowledge?

Ben:

Sure, sure. I mean, there’s tons of ways to do it. Yes, focus groups is one tool, but what most founders fail to do in the early stages is to get out of the office and actually go talk to people.

John:

There we go. Imagine!

Ben:

There’s really no secret to it. It’s just getting out of your comfort zone and going and talking to people.

John:

And asking them some question and having some questions prepared in advance so that you can have a consistency, almost like a science experiment, right? The people who like this, oh, what other things do they like, right? What kind of cars do they drive? Where do they shop online or do they go to brick and mortar and try to paint a picture and get a sense of what your avatar is, basically from your ideal customer so that you can describe that to your investor, right?

Ben:

Yeah and the other pitfall that founders always fall into is that they’re trying to sell their product when in actuality they should be trying to kill their product and should be learning how their customer thinks.

John:

Oh, that’s brilliant. Right there. You should be trying to kill your product, not force it down somebody’s throat. So, you need not only pivot with the idea with investors, but pivot with listen to what your customers are saying and if they don’t like something, change it, don’t be so in love with it, if I heard you correctly.

Ben:

Exactly, yeah. I mean, one of the biggest ways to get an investor excited is to show that you have this innate ability to target your assumptions and prove those assumptions wrong or right

John:

Love it.

Ben:

And if you’re doing that, you’re reducing risk and that’s what investors want to do. Investors want to reduce risk when they invest, right.

John:

Right, great, great. So, one of the key takeaways everybody that Ben just gave us is investors look to reduce their risk by finding someone who has an innate ability to target whether their assumptions they’ve made about the market or the customer is right or not. That is huge. I love that. So, that’s a great place for us to finish up. A great tip about showing that you can figure out whether your assumptions are right or wrong so that the investor’s risk is minimized. Do you have any other books that you could recommend to our listeners besides the one that you already referenced earlier? It could be around investing or it could be about anything.

Ben:

Oh man. Essentialism is a great book. I can’t remember the author off the top of my head.

John:

That’s okay, we’ll put it in the show notes. Yeah, Essentialism. What’s it about?

Ben:

One of my favorite quotes and this kind of leads to the book is, you know, Einstein’s famous quote, “If you can’t explain it simply, you don’t understand it well enough.” In this book really gets to that. You know, what can you pull away and make that product as simple as possible to make it wonderful to use.

John:

What’s the essence. Got it.

Ben:

Exactly.

John:

And then tell is, you know, if somebody wanted to be applying to the Founder Institute, how would they go about that and what any insider tips on, you know, what you guys look for before you accept someone into that?

Ben:

So, yeah, to apply for the Founder Institute and this is actually great timing. We’re launching our new semester in San Francisco in the beginning of June and to apply, all you have to do is go to FI.co, so FounderInstitute.com or Fi.co/Join and it’s a really simple application process. There’s a few question and then we have a psychometric and IQ test. It’s called our predictive analysis test and essentially, we use this to really focus on the entrepreneur themselves, because it’s so early stage and, again, we don’t really assume any ideas are brilliant or unique, so we really focus on the entrepreneur and their potential to become a strong startup founder.

John:

Which goes back to the passion, intelligence, and grit, I’m guessing, right?

Ben:

Exactly.

John:

Yes, got it. That’s so helpful and Ben, is there anything else that you want to have people follow you on Twitter, what’s the best way for people to, you know, what your posts on LinkedIn, etc, anything else for our listeners to stay in touch with you and keep aware of your insights?

Ben:

So, yeah. You can find me at blarson.com and I’m on Twitter @Blars0n

John:

That’s a little tricky. I love it. Okay. Ben, it’s been a pleasure having you on the show. You’ve given us such great takeaways. I can’t wait for the show notes to be able to give everybody all these insights, but my favorite one is figure out a way to be enchanting to both your investors and your customers.

Ben:

Thank you so much John. It’s really a pleasure and I just love what you’re doing with the podcast.

John:

I appreciate that, Ben. Thanks again.

TSP009 | Paul Grossinger – Transcription
TSP006 | Jim Beach – Transcription