TSP041 | Alicia Robb – Transcription
Posted by John Livesay in Uncategorized | 0 comments
John:
Hi, today’s guest on The Successful Pitch podcast is Alicia Robb, who is a Senior Fellow at the Kaufman Foundation. She has her PhD in Economics, and she worked for the Federal Reserve Board. She talks to us today about what it’s like to work with the Co-founder of Portfolia, where they have created a rising tide fund, based on Alicia’s book, Rising Tide, where they have 99 women in this organization. Nine of those women are expert angel investors, helping the other 90 women learn how to become Angel investors, and then they work on finding Founders who are either female, or have a diverse founding team, get funded through their angel Investment firm. She talks about how important it is to know your numbers, especially when you’re talking to somebody who has a PhD in economics. Also, passion is extremely valuable, because they want to fund someone who has passion for what they’re doing, and knows what they’re doing. Enjoy the episode.
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Hi, and welcome to The Successful Pitch podcast. Today’s guest is Alicia Robb, who has her PhD as an economic professor, and she is a Senior Fellow at the Kauffman Foundation. She’s also worked at the Federal Reserve Board. The Kauffman Foundation has $2 billion in assets, and has a focus in education and entrepreneurship, so we’re really excited to have Alicia on the show today. Alicia, welcome.
Alicia:
Thank you. Great to be here.
John:
I always like to ask people about how did they get started? Did you know as a young child that you wanted to get your PhD in economics?
Alicia:
I didn’t. I did go into college, well it’s funny, quick story, went into college with a major in Multinational Organizational studies, which is International Business and Development, with a language focus. I went home at Christmas one year, my dad said, “Gosh I don’t know what that is. What’s your minor going to be?” I said, “Peace and Justice studies.” He’s like, “No, absolutely not. Go do something practical.” I ended up minoring in economics, which then I ended up majoring in economics, when I saw that everything we do is related to economics, From then on, I went to get a Masters, and a PhD.
John:
Wow. You make it sound so natural and effortless. Was there any stops in between the masters and the PhD program, or …
Alicia:
No, I went straight through.
John:
Wow.
Alicia:
I started grad school a little too early, so I quit and worked for an economic consulting firm for a couple years, and then I ended up starting again at University of North Carolina in Chapel Hill and went through the whole Masters, PhD at the same time.
John:
What was your thesis on for your PhD?
Alicia:
I actually looked at the impact of race, gender, and discrimination, on business performance in the United States, looking at how to measure and see what was driving the under-performance of women and minority owned firms.
John:
What conclusions did you find?
Alicia:
That was a long time ago.
John:
Oh, sorry. I don’t mean to test you, but …
Alicia:
I’ve done similar research, that’s been my research stream over the last 20 years. A lot of it is around financing, financial capital, and others are just not having the same levels of startup experience, industry experience, management experience, that can help you as an entrepreneur later in life.
John:
Those early experiences in education continue to be a key criteria whether you’re going to have a shot at this, yes?
Alicia:
Mm-hmm (affirmative). Yeah.
John:
What made you want to go work for the Federal Reserve Board, and what was that like?
Alicia:
I was finishing my PhD, and I had decided not to go on the market. They contacted me because of my dissertation, using census data, and looking at women and minorities, and financing. They actually wanted to interview me for a specific position there, working with the survey of small business finances. They actually recruited me, and so that wasn’t a difficult decision.
John:
I’ll say.
Alicia:
It was a great job, and great opportunity, and so I managed to finish and go right to the Fed in a pretty quick turnaround.
John:
What’s the one thing that people would be surprised to learn about working for the Federal Reserve?
Alicia:
I was at the Fed during the Greenspan days. I don’t know.
John:
Is it bureaucratic? Is it a bunch of PhD’s?
Alicia:
Is it bureaucratic? It is bureaucratic, and that’s one of the reasons I left. Yeah. They have a lot of issues there, and it was not the right fit for me. One of the great things about working for the Fed was working with 200 amazingly smart economists, and being able to just go to any door on your floor, and ask somebody a question, and someone would know the answer, because there’s just a whole bunch of really smart people working there. I’m hoping with Janet Yellen’s leadership, They will do bigger and better things, because it was quite a disappointment from … What’s the previous two chairmen?
John:
Is it a constant conversation about interest rates, and inflation?
Alicia:
It is with the macro people. I was actually in the micro group, so don’t ask me anything about interest rates, or …
John:
Okay. Fair enough.
Alicia:
I’d be guessing.
John:
I do want to ask you your opinion as someone who is a specialist in economics, separate from the Federal Reserve Board is, “Do you think we are in a tech bubble?” That’s all on the news, whether it’s on Vanity Fair, or all kinds of articles everyone’s reading about. What are your thoughts on that?
Alicia:
It depends on what you mean by tech bubble. I worry about some of the valuations that we’re seeing with some of these companies that are not profitable, let alone even having revenues, and I’m just not seeing the core value, that these valuations seem to be reflecting. I worry a little bit about that. No, I have hopes for the country and the world, because we are incredibly innovative, and I do think technology is driving a lot of positive, good changes, going forward. Just worried a little bit about the over-hyped valuations on some of these companies.
John:
Tell us, if you will, about what it’s like to be a Senior Fellow at the Kauffman Foundation, especially with your specialty in Entrepreneurship?
Alicia:
I ended up going to Kauffman because of my work with the Survey of Small Business Finances, and Small Business Finances translated into Entrepreneurial Finance, and they hired me to be the principal investigator on the Kauffman Firm Survey, which is “Longitudinal Study of Startups,” that we tracked over 8 years to try and better understand firm dynamics, financing, innovation. It was right smack in the middle of the economic crisis, so looking at how that crisis impacted small and growing young firms. I’ve been with them for about 10 years now, and it’s just been the most amazing experience. Ewing Marion Kauffman was a rags to riches, successful entrepreneur, that started Marion Labs, and ended up selling it later in life, and set up this Foundation to promote a more entrepreneurial economy, and create an enabling environment in ecosystem, where entrepreneurs could thrive and everyone could achieve the dreams that they wanted to. His focus was really always on education and entrepreneurship, because he saw those as the two channels that would allow for anyone to achieve their dreams.
John:
I love it. What are some of the success stories that you’ve worked on over the last 10 years?
Alicia:
I think we better understand early firm dynamics, and we understand the need to have timely, useful data, on firms and their owners to better understand challenges that they might face. I’ve since wrapped up the Kauffman Firm Survey. That ended in 2012, but we’ve gone on to now partner with the Census Bureau to annualize their survey of business owners. Now it’s going to be called the Annual Survey of Entrepreneurs. It’s going to be the first time that we have annual statistics on firms and their owners, but it goes into very detailed information from these owners on their financing, adherence or credit market, experiences, the challenges that they’re facing. We’re going to have a much better picture of entrepreneurship in our country, and what we can do to enable them to overcome barriers and challenges, so that we can help them grow.
John:
I loved it. Have you explain a little bit about one of the challenges around getting funded, because we’re all about trying to help people with their pitch, and finding the right investor. Has the research shown that it’s easier to get funded now that it was 10 years ago? How important is it for entrepreneurs to realize that they need warm introductions to investors, anything along those lines?
Alicia:
It’s definitely easier than 2008, when we had the crash. It’s important to note that very few firms actually get equity financing through venture capitalists, or angel investors. What we hear all the time is, venture capital backed firms,” but it’s 4,000 or 5,000 deals a year. That’s a tiny, tiny, fraction of firms. There was about $50 billion in 2014 that went to companies that raise venture capital, which was a huge increase over the previous year, which was more like $25 billion. The reality is that was still only 5,000 deals, whereas, angel financing is about $25 billion in funding last year, and that went to about 75,000 firms.
When firms, especially young firms, and startups, are thinking about accessing financing, the reality is only a small fraction actually get any equity financing, and it is really the friends, the family, your owner equity, that you put in, that are driving it. To a large extent, banks are providing debt financing. Now with crowdfunding, we’re seeing more opportunities for alternative financing. There’s a whole host of platforms that are providing debt equity. A lot of entrepreneurs are using crowdfunding platforms like Kickstarter, or Indiegogo to get non-dilutive capital to show market fit and product traction, that’s going to be attractive to banks and angel investors, and venture capitalists, down the road. We’re seeing a whole host of new opportunities for young companies to get financing.
John:
That leads right into what you’re doing with Portfolia, which I’ve read has been described as a better design angel list. Would you talk about that?
Alicia:
Portfolia is a equity based platform, where companies can raise equity from an investor community. I’m actually working with Portfolia to launch a angel fund and training program to drive more diversity in angel investing. This first project, The Rising Tide Fund, an angel trading program, I’m doing in partnership with Trish Costello, the Founder and CEO or Portfolia, where we’re going to bring together 99 women investors to have a fund where we pool our money together, and make 6 to 8 investments of $100K to $200K, in young companies. Of the 99 women, 9 are experienced successful angels with great track records, and 90 new and emerging angels that want to learn about angel investing, and how to do it, how to do it well, how to add value to the companies, and learn while investing, so they can hopefully go on and become really successful angel investors down the road.
Portfolia is focused on women led companies, and building a community of investors, women and men, that want to see more capital going to women led companies. Our program, The Rising Tide Fund, is not specifically targeting women led companies, but obviously, we know the research and know the diverse teams do better. We’re going to be very cognizant of that fact, and look for diversity in the founding teams of the companies that we fund.
John:
There’s so many great bits of information you just gave there. Let me start with the first thing, which I really am fascinated by, which, if I understood you properly, the 99 women that are in The Rising Tide Fund, 9 of them are experienced, and they’re going to be training the other 90, on what it takes to be a good angel investor. Is that accurate?
Alicia:
Correct, exactly. Although I will say some of the 90 that we have are pretty experienced in their own right, but the idea is a lot of them are new and emerging angels, who don’t have a lot of experience, that are looking for advising and mentoring by people who have done it successfully in the past.
John:
It’s a startup that’s helping people become investors, so that they can help other startups. It’s just so full circle. I love it.
Alicia:
It is a virtuous circle, because the more women angels we have, the more that ultimately women entrepreneurs are going to get funding, and become successful entrepreneurs, and then become angel investors, investing back into companies, themselves, after their exits. We need more women on both sides. We need more women investing, and we need more high growth women entrepreneurs, so this is a way that helps build that ecosystem.
John:
When women or other people who are part of a diverse founding team, come to pitch The Rising Tide Fund, and they’re looking for $200,000 is there a framework that’s a reasonable equity to give up for that dollar amount? Is there a ballpark figure, or a range that you give people?
Alicia:
No, because it really is case-by-case, and depending on where they are in their stage of growth. There are several firms that are very early stage pre-revenue, and that’s going to look different than companies that already have shown some product traction, that have revenues, that have a growing client base. Depending on where they’re at, that determines what the term sheet ends up looking like.
John:
Let’s say somebody who’s pre-revenue, but they have a good team, and they have a working product, is it typically, for $200,000, you tell them, “This obviously isn’t going to last you a year and a half, or anything, so you’re going to need to find other people to add to this round.” Is that the kind of thing that you like to work with them on?
Alicia:
For this fund, in particular, we probably will be syndicating with other angel groups. All of the 9 women are part of 1, or 2, or even 3, angel groups in the cities and states where they live. A lot of these deals are going to be in the $500,000 to $1 million range, so late seed, early A, and so we will be syndicating with other groups. Yeah, it is important for companies to realize that they have to think backwards from their end goal, because if you raise too much, and need to go on and raise more, then even a higher valuation, it really limits your exit options. Really thinking through what the next 5 to 10 years looks like, and working backwards to your first round of financing, is very important.
John:
I so agree. I’d love to have you talk a little bit about that, that whole concept of reverse engineering, if you will, and think backwards, which is, “How are you going to get these investors 3 to 5 time return on their investment in 3 to 5 years?” You need to have some concept of what your exit strategy is, even when you’re pitching for $200,000 to an angel? Is that right?
Alicia:
To realize that it doesn’t necessarily need to mean giving up equity. There are definitely firms, if you look and the Inc. 500, the vast majority of them never raised equity financing, and so it’s not necessary that you have to give up equity, in return for funding. If you can build a consumer base, if you can generate enough revenues to use your retained earnings, to feel your growth, or you can use debt financing, either through bank loans, or from crowdfunding, or you can use Kickstarter, or Indiegogo to launch your product base, and then use the funding from that revenue stream to fund your growth, you could get to a really, really, big company and sell it for a huge amount. That gives you a far better return than you ever could have gotten if you took the equity financing. Realizing that there are lots of ways to grow a big company, is really important for startups. It doesn’t mean you have to raise angel or VC financing.
John:
In the case of Rising Tide Fund, for that investment, and from Rising Tide, there would be some equity that investors would give, correct?
Alicia:
Of course. There’s this huge controversy, do you do convertible note, or do you do equity. In terms of the funding that we’re going to be giving, yes, we’re going to be looking for equity in return for that investment. We may be doing an initial term sheet that’s a convertible note, so that we don’t have to do that valuation right off the bat, and we can do it at a later stage, or we may ask for a certain amount of equity at a given valuation, at that time, but certainly yes. The kinds of investments that we’ll be making are high risk, and we want an equity stake in return for that investment.
John:
Of course.
Alicia:
The other great thing about The Rising Tide Fund is we don’t just offer a financial capital, we have 99 amazing women with diverse industry, and sector expertise, and entrepreneurial experience, and so forth. We have a lot of potential to add value in terms of the human capital that comes behind that money, as well.
John:
That’s everything, the connections, the experience, the possible people on your advisory board, all of that really is so incredibly … The key to a startup being successful is surrounding yourself with people who know what they’re doing, and fill some skill sets that you don’t have.
Alicia:
Exactly. It can’t just be your co-founders, it also has to be a broader network of investors, and advisors.
John:
Is there any advice you have for people pitching a rising tide fund? What do you think makes a good pitch, or are the kinds of things that you are looking for in a founder from a characteristic standpoint?
Alicia:
We’re looking for, obviously, the scalability that going to be necessary to offer us returns that are going to be attractive for our investment. Having a very good sound understanding of the market and the financials is going to be key. We’re sector agnostic. We have lots of different sector expertise among our 9 and our 90, so we are focusing on leading deals is a few sectors, but we’re pretty much geographically and sector agnostic, with just a few exceptions.
In terms of looking for a pitch, the way to get into finding out if you’re a fit for the fund is looking at the 9 lead angels on nextwave.ventures’ web site, that’s just nextwave.ventures is the web site URL. Looking at the 9 and figuring out who they are, which angel groups they’re associated with, and getting in through them, because they’re going to be the ones bringing the investment opportunities to the Fund. They’re the ones going to be leading due diligence, and ultimately making the investment decisions. In order to get in to see them, you need to find your way into one of the 9, and then register on Portfolia’s web site.
John:
That warm intro, and doing your homework, and really knowing what those 9 core women are like, what they like to invest in, possibly even talking so some of the other companies that they’ve invested in, to get some insights and advice, all that really sets you apart, don’t you think?
Alicia:
Exactly. Definitely.
John:
You said you’re geographic agnostic, which I love … I’ve read that angels tend to like to invest in people who live within 150 mile radius of them. Is that the case for Rising Tide, or not so much?
Alicia:
When we designed the program, we designed it just specifically so that we’d be geographically disperse. We have women in our 9 and our 90 across the country, everywhere from Texas, to Kansas City, to Boston, and New York to DC, to Florida, to California, and I’m in Boulder, Colorado. We’ve got the states pretty much covered. Angel investing does tend to be local, and that’s one of the things we’re trying to change, in building a community, and a network, where we can collaborate with people on the ground that are closer to our portfolio of companies. There’s a lot of great opportunities that are outside Silicon Valley, that are not necessarily getting funded, and we want to change that.
John:
That’s great. I know you’re the numbers expert, but I want to ask you a non-numbers question about what you think is important in a founder from a standpoint of being coachable, an agile learner, obviously confident. Is there anything else along those lines that you would give advice to the listeners about, when they’re pitching, in particular?
Alicia:
Passion is over used, but it does get at that idea of, “It’s hard to be an entrepreneur.” That’s the reason 9 out of 10 companies end up closing. It’s not easy. It’s not always sexy. It’s rarely sexy. It’s not always fun, and it’s really hard. It’s especially hard on the capital side, because you’re going to hear “No,” 99 times out of 100. That rejection’s tough. That whole idea of really passionately believing in your heart that this is something that has to get to market, that has to grow, that has to be successful, and you’re just willing to do whatever it takes to get it there.
That said, we want to see it being backed up with solid knowledge of your market, solid knowledge of the financials, and a plan of how you’re going to get from point A to point B, over the next 5 years. The passion’s not enough. You also have to have all the other tools to get you through.
John:
With everything being equal, people tend to invest in the person with the passion, because it’s all about the jockey, and not necessarily just the horse, right?
Alicia:
Exactly.
John:
When you talk about the plan …
Alicia:
You need products, you need some products.
John:
Do you also look for things that determine whether this is the team that can execute the plan, and look at their track record as a key criteria?
Alicia:
Definitely, and that’s where non-serial entrepreneurs can be at a disadvantage, because you don’t have a track record. Being able to understand what your strengths are, where your weaknesses are, and building that team that compliments your skill set, and having those things covered, shows a level of understanding and maturity that is a great signal. I don’t want non-serial entrepreneurs to be too discouraged, because it is … If you have a great idea, and you’re very passionate, and maybe you don’t have the whole team yet, but you know what you need and you can reach out to your investors and advisors to help you fill the gaps, is definitely a road to success.
John:
I also feel that having a story of showing your skill set from a different experience, working for another company, whatever, even if you don’t have a serial entrepreneur background, but you have skills, that show you can execute something, that those skills are transferable to your new startup. If you can craft a story that shows potential investors that you have the skills to execute something, even if it’s not from another startup, that, that is also really important to bring up.
Alicia:
Definitely.
John:
Terrific. Alicia, are there any books that you recommend people who are getting into the startup world, read either about, of course, the numbers and the market, or just about life in general?
Alicia:
There’s so much information out there, it’s information overload, I love … The Kauffman Foundation has its Founder School, and there’s just tons of videos, and so forth of insights from successful entrepreneurs. Startup grind has their library of videos, and so forth. There’s so many books out there, I don’t even know where to start. Things around the lean startup, and the startup communities, and so forth, are all good starting points. Just getting involved with your startup community, whether it’s a startup grind chapter, or One Million Cups, which is a Kauffman initiative, there’s meetups and so forth, all around the country, and it’s so easy to just become part of that community, and learn from your peers …
John:
That’s great.
Alicia:
… and those that are successful entrepreneurs, the recommendations that they give you will be just as good, if not better.
John:
We’ll put the links to the Kauffman School videos on the transcript, on the show notes. Tell us a little bit about One Million Cups. I think I know what that is, it’s such a great title, I’d love to have you explain it real quickly, if you would?
Alicia:
Yeah, the idea was that, “Great startups are built over a million cups of coffee because you never sleep.” It’s a Kauffman initiative, and there’s now 40 or 50 chapters across the country. It’s every Wednesday, at 9am, local time, and it’s usually 1 or 2 entrepreneurs come and present their current, or latest challenge and get feedback and thoughts from the startup community. It’s a great way to meet other people that are involved in the startup process, find employees, find investors, find advisors, and help companies get over some of their pain points.
John:
And generate some revenue for Starbucks.
Alicia:
Exactly,
John:
Alicia, how can people follow you in social media, and what other recommendations do you have for people reading your blogs, or anything else that you want to promote?
Alicia:
Yeah, I’m just AliciaRobb on Twitter, and then most of my blogging I do on Forbes, so if you just type in my name at Forbes, all of my blogs will come up, and you can just follow Kauffman’s account there. That’s who I blog through. You can find me on Twitter, or LinkedIn, so happy to help and chat with anyone who’s starting a Company, and looking on how to grow.
John:
Thanks for sharing your incredibly interesting background, and your insights, and I just think what you’re doing with Portfolia, and The Rising Tide Fund is exciting to get all kinds of people in all kinds of cities, the access and the knowledge to make a startup happen in more than just a few places.
Alicia:
Keep a lookout. We’re just getting started.
John:
I love it. Thanks for being on the show.
Alicia:
Thanks for having me.
John:
Thanks for listening to The Successful Pitch podcast. If you like the show, please go to iTunes and write a review, and encourage your friends to write reviews too. It really helps get the word out. People say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest, but when it comes time to write the check, they don’t do it, so how do you get people to say yes, and then follow through. Visualize yourself on the left side of a river bank and you have to cross the river, and on the other side of the river is where the funding happens.
First you make up your idea, then you make it real, then you make it reoccur. Once you start dipping your toe into the water to get to funding, that’s where I can help. I get you across that river faster than you would on your own, with a lot less frustration than you will get when you hear a bunch of “Nos,” and you don’t know why. If you want some help getting funded faster, with less frustration, go to my free funding webinar, SellingSecretsforFunding.com/webinar, sign up, and get in-depth information on how you can get funded fast. Thanks.
TSP040 | Brandon Esposito – Transcription
Posted by John Livesay in Uncategorized | 0 comments
John:
Today’s guest on The Successful Pitch podcast is Brandon Esposito. Brandon started his own startup and now he is a VC at PMA Venture Capital group specializing in health, mind and body. His insights on how to pitch what VCs are looking for is quite in depth and very specific to help all the listeners realize that what they’re looking for when you pitch is the way you think. Is it logical? Does what you’re presenting make sense and is it easy to understand? Give him a frame of reference right at the beginning so he knows what you’re talking about and can put everything else into context.
He said you should be poised at all times but also have passion. Finally, the more adaptable you are to their feedback, the more successful you’re going to be. Given that it’s so competitive to get funding, you have to have a great pitch and great numbers and a great idea, but then who you are really comes into play because they want to work with people they like.
Enjoy the episode.
Welcome to The Successful Pitch podcast. Today’s guest is Brandon Esposito who’s the associate at PMA Venture Capital out of Miami, Ft. Lauderdale. He’s got an incredible background, from being the executive chairman at Urban Darling, which we’ll ask him about. Basically he knows everything of every stage that goes into getting funded. We’re extremely excited to have him on the show. Brandon, welcome.
Brandon:
Thank you. It’s great to be here. I’m looking forward to imparting whatever wisdom it is you’d like me to impart.
John:
One of the things I find that listeners really love, because so many people have a job that a lot of people think, “God, that’s a great job. How does someone get that kind of job? How does someone get into that kind of career?” Would you mind taking our listeners back to your passion for VCs and how did you get into this world?
Brandon:
My story is actually somewhat interesting, if not a bit circuitous in terms of how it is that I got into VC. I went to undergrad and I did poly sci and business. Then I went to law school. I had some focus in transactional law, mergers and acquisitions, corporate tax, but the other half of my work was mostly family law. I didn’t really necessarily have a whole bunch of educational background where I was thinking I’m absolutely going to go into VC, in fact. Which is not something that really ever crossed my mind initially, although I did always have a passion for finance and economics
After I graduated I worked in law for a little while and then the opportunity to get involved with Urban Darling, to acquire the company, presented itself. The company was more or less about to close its doors and I was able to acquire it at a value. It needed to be completely revamped so I went ahead and, with a shoestring budget, from the ground up I completely rebuilt the company. I researched how to build a website. Prior to that I had no real knowledge of how to build websites but I gained it in a couple weeks and I built a website.
John:
You’re a fast learner. In two weeks, that’s impressive.
Brandon:
A lot of entrepreneurs out there, and probably a lot of people listening to this podcast, or are going to be listening to it, are no slower learners than I am. When you’re starting something up you’ve got to really do everything by yourself. You either learn quickly or you perish, basically. Yeah, you’ve got to pick things up quickly and if you’re going to be successful you have to not only pick them up quickly but you have to accomplish whatever your objectives are effectively in a very short period of time.
I did that and then I worked on SEO because I figured we’ve got to be top listed on Google for a lot of different search terms if we want people to find us. Now if you Google, I think, virtual styling from it doesn’t matter where you are in the country we should be the first result.
John:
Wow.
Brandon:
Wardrobe styling, we’re probably one of the top three results. Terms like that, we’re way up there, we’re way up at the top. We index very well because I spent a couple months right after building the website focusing entirely on learning how it is that Google indexes pages for search and moves them up the ladder, basically. I don’t know if you’ve seen that movie A Beautiful Mind where Nash is the psycho with all the newspapers on the wall.
John:
Yes, right.
Brandon:
That was me for two months.
John:
SEO is not a simple thing to learn. Creating website, maybe I could grasp somebody getting the basics of that in a couple weeks but I’m sure it was a little more intense to learn how to get Urban Darling at the top of any searches. Your mind has to think like a computer.
Brandon:
Yeah, well Google lays out a pretty comprehensive roadmap. Yeah, there’s a lot of comprehension that goes into creating an effective SEO strategy. Even then, SEO strategy can be relatively simple in terms of knowing what you have to do but then the execution becomes very difficult.
John:
Ah, well there it is, that’s it right there. You’ve already said something really important for the listeners. The same thing is true from investors. When they look at a team, they look at an idea, it’s like, “Okay, this is all good but can you execute it?” That’s everything. Wouldn’t you agree?
Brandon:
Oh, absolutely. The confidence of the team to actually execute the idea is one of the most important things. You can have people who have a great idea, as many people often do, no shortage of great ideas out there, but what makes a person with a great idea different from an actually successful entrepreneur is the ability to make that idea real.
John:
Yes. Great, we’re going to Tweet that out. Execution and confidence are the keys to success.
Brandon:
Yeah, it’s very true.
John:
That’s great. All right, I love the fact that you were in the trenches as an entrepreneur before you became and investor because you really understand what’s required.
Brandon:
Yeah. Actually, I apologize if it was a bit of a long-winded explanation.
John:
No, it’s full of great information.
Brandon:
Yeah, the bottom line is, though, I did all the SEO, built the website. I drafted all of our legal documents because of my legal background. I did all of our PR. We got written up in the Wall Street Journal. I drafted all of our service contracts. It was about eight or nine months, I want to say, into my helming of the company that PMA reached out to me. My initial thought was that they had noticed that Urban Darling had made a fairly substantial turnaround in a very short period of time.
I restored us to profitability within the first 30 days. At that time it was marginal but there was consistent growth. Considering the size of the organization it was enough that I imagine people who were paying attention might notice, and they did notice. My thought was, when they had called me in to talk to me, that they might want to invest.
John:
Right.
Brandon:
I had prepared to deliver all the information about the company. What it actually was was they wanted to assimilate me into their apparatus so that I could do for their portfolio companies what I did for my own company.
John:
Mmm, what a great story.
Brandon:
That’s kind of how it happened. I really didn’t even envision it being something that was going to come to pass. As it so happened, that’s how it panned out.
John:
Did they end up investing in Urban Darling as well as getting you onboard?
Brandon:
No, because it’s not within PMA’s core mission. We only invest in companies that promote health and wellness of mind, body and soul.
John:
Got it.
Brandon:
It could be something like raw organic juice or fast casual healthful food, or something as abstruse as a peptide fragment that has a specific delivery mechanism in the body that causes you to not be hungry, to tamp down your appetite. We might fund the 1 and 2a trials for something like that in order to eventually parcel it out to a pharmaceutical company that has relevant IP. It spans the whole spectrum.
John:
Have you been able to transfer, I’m sure you have but I just want to confirm, the skills that you learned at Urban Darling into helping these health and mind, body clients grow faster than they would have without your help?
Brandon:
Oh, absolutely because the thing is what do I know about wardrobe styling? To be honest, not much, it’s not my area. It was just to sort of take that idea portion and bring it as close to reality as possible. Everything that stood between idea and reality, all that stuff in the middle, it was my job to sort of take care of it. Whether you’re talking about a wardrobe styling company or a health and wellness company, anything that is consumer focused is going to have a lot of the same steps, in terms of building a website, indexing it for search, focusing on marketing, helping with PR, organizing the internal structure of the company, the whole nine yards.
John:
Right. What I really want to dive into is this wonderful blog you wrote called Paring Your Pitch: What a VC Wants to See. First of all, I love the fact that you have an image of Picasso’s bull as an example of how to distill something down to its essence. That’s so eye grabbing right there and is a great example of saying what you mean in very few words with just a simple image. Would you mind walking us through what you think VCs are looking for? You opened up with, “Hit me with one sentence that really says it all.” Do you have any examples of pitches that you’ve heard that you said, “Man, that was memorable and well done”?
Brandon:
It’s not even so much that it needs to be memorable and well done in one sentence. The point of that sentence is not to dazzle me with how much information you can condense into a single sentence. It’s merely just to provide a point of reference so that I can gauge everything else that you’re telling me against it. If you start off with something that is not the entire picture, or if it’s just a piece of the puzzle, or if it’s circuitous or vague, then I don’t quite know what I’m listening to when you start speaking. I want to understand this is an Uber for groceries. Something that simple. Then you can go ahead and flesh it out and I’ll understand what you’re trying to say. The subtleties, obviously, will come out the more we speak.
John:
Right. That’s so important. Tell you right away what it is you’re doing so that I don’t have to be confused. I hear investors tell me sometimes they’ll listen to somebody speak for 10 minutes or more and still don’t know what problem they’re solving or what they’re doing and what this is all about. It’s really important to do that. I love how you talk about what’s the problem. Not only that but who’s problem is it. I love that connection there. It’s so important because a lot of people go, “Well, if I just say what the problem is, that should be obvious who’s problem it is.” Not necessarily, right?
Brandon:
Yeah, no, it isn’t necessarily. Especially if you have, I mention this because we work in the health sphere, especially if you have a situation where there’s a third party that’s paying for something and the third party that’s paying is not the person who’s actually receiving the service. Such as in the case of a health insurance company. You can have a problem that if you step in and you solve it and it makes things so much better for the consumer, in order to implement your fix who’s going to be paying for it? Not the consumer, it’s the insurance company that’s going to pay for it. You don’t have to convince the consumer that it’s a great idea. The consumer’s not connected with the cost of your idea anyway. You have to convince the insurance company.
In a lot of cases people will say this is a great solution to a pressing problem but it’s also very relevant who it is that actually has that problem. Because the problem that you’re trying to solve for the consumer may not actually solve that same problem for the insurance company, which is part of why that’s sort of snaked into what problem are you solving, who’s problem is it and who’s paying you. All those things have to coalesce.
Also, in a more general sense, you can identify a problem but you also want to make sure that this problem has a sufficient demographic where they have enough purchasing power, they have enough influence, they have enough of a voice that they can actually pay you to solve this problem for you. Or that the market is large enough that you can capture enough of a segment of this market where you’re going to be generating some kind of significant revenue when your idea has been fully implemented. If you’ve got a problem where only 9 or 10 people are suffering as a result of it then it’s the problem of these 10 people. That’s great. How much can we possibly hope to return on our investment by just serving these 10 people?
John:
There’s two things I want to ask you about that. One, you talk about what’s the problem? Tell me why your target audience’s life is worse without your product. Do you like to hear people describe what people are currently doing to solve their problem, and why this product is a better solution to it, as a frame of reference?
Brandon:
Where they insert that information, whether it’s immediately preceding or immediately following the first bit, it depends. It depends on the presentation. It depends on what the entrepreneur is trying to get across and how they want to structure their message and whatever makes the most sense for them. Yeah, it is important to explain why the person’s life is worse for not having this amazing solution that you’ve devised. Part of that is to say, using Uber as an example, this person’s life is worse because he’s got to run out into the street, he’s got to hail a cab, he’s got to maybe step through a bunch of puddles to get someone’s attention, he’s got to fight 5 or 10 other people in order to get the cab’s attention.
John:
Right.
Brandon:
Or maybe he’s just the kind of person who’s not very aggressive when it comes to hailing a cab and so he’s not usually successful. All of these things that you’re talking about are simultaneously, with explaining the problem, explaining what the current fix is, or what the current system is for getting people from point A to point B. That’s if you’re someone where there are cabs.
John:
Right.
Brandon:
Often the one will occur simultaneously with the other or someone will mention it before, they’ll mention it after. It’s also good to gauge the entrepreneur’s ability to convey information by determining where did the entrepreneur want to include this information in the course of their presentation. If it makes more sense to include it before and then they say it after, then you recognize that maybe the communication skills of the entrepreneur are not 100%.
Which isn’t always a terrible thing. Often a lot of entrepreneurs, especially very intelligent ones, have trouble communicating. God knows I’m one of the worst. I’m terrible when it comes to going around in circles when I’m communicating. It’s just something to be mindful of.
John:
I like that. How you pitch shows how you think, is really what you’re saying there, which is another Tweetable we can use. That’s great. The other thing you brought up about capturing the size of a market, I’m really curious to hear your insights and thoughts about should people avoid this top down, if we only get 1% of the market? Which is what I hear a lot of investors say, “Oh god, please don’t talk about that.”
Brandon:
Yeah.
John:
Talk about from the bottom up, right?
Brandon:
Yeah, if we only get 1% of the market we’ll be making so much. In a lot of cases, like if you’re talking about these cellular telephone market, or the market for a wireless carrier, it’s a huge market but what are the odds, realistically, that you’re going to even be able to capture 1% of that market? Or overcome the regulatory barriers between you and actually establishing yourself as a wireless? It depends on the market you’re looking at. If you have people saying things like, “Oh, it’s a 10 billion dollar market and all we need to do is capture 1% of it and we’re making hundreds of millions of dollars,” that, in many cases, or at least as far as I’m concerned, demonstrates, maybe, a lack of connection with reality. In terms of either the number of people that your product or service actually appeals to or the nature of the competition in that market.
If you have a market that’s that big usually you’ve got something else at play that’s going to prevent you from just stepping in and soaking up a whole percentage point of that size of market. Either there are a zillion competitors, like in the case of a cosmetics item, or you’re talking the pharmaceutical industry where the amount of money that you have to spend in order to actually get the approval for whatever pharmaceutical compound it is you’re trying to get passed is inordinate. Or, again, in the case of wireless, there are a whole bunch of other regulatory barriers that are in the way. Or maybe the competition that you have is so entrenched and so powerful that it’s unrealistic to assume that you’re going to be able to chisel them out of the position that they’re in.
There are any number of things that are usually involved beyond just saying, “Well, all we have to do is waltz in and capture just 1 in 100 people in this market and we’re going to do well.” If you’re going to say something like that you need to have a very strong foundation to support why you think you’re going to be getting 1% of that market, and it’s got to be good.
John:
The preferred way is to say, “Here’s our marketing strategy of how we’re going to reach this target audience who has this problem. When we get the funding we can spend this to get them to …” Or, “We’ve already done it. We have a few users who are already paying us this and we just need some money to scale it.” Right? That’s the more bottom up philosophy.
Brandon:
Yeah, it’s always better to work on your product and to create a great product and get feedback about the product. Then determine what the users like, what they dislike, to determine how many people you’re converting out of what demographic you’re targeting. How much of that demographic you’ve reached. All of those metrics are important and they can be useful in determining how much of the market you’re going to reach.
If you’re talking to an investor, like a sophisticated investor like someone from VC, they’re going to look at the market size, they’re going to look at who, realistically, your product or service is going to be appealing to. They’re going to, more or less, probably know by the time you sit down and talk to them if they’re going to talk to you at length in that particular sitting. They’re going to have a good idea of all that information.
Realistically, what you were just talking about, in terms of laying out marketing strategy, laying out the fact that you have paying users, that you’ve got a product that you’ve gotten feedback on, that you’ve built up, that’s going to be much more persuasive in convincing this investor that you can grab a share of the market than just saying it’s a huge market, all we need is this much of it. That’s not really valuable information other than to know that it’s a large market and there’s enough of it to grab that we could generate a large multiple, maybe.
John:
Mm-hmm (affirmative). I also really like what you wrote about who’s tried to solve this problem and why have they failed. What a great way to frame the competition. Can you give us an example of any of the clients that PMA handles in the health, mind, body arena?
Brandon:
Okay. I was wondering when you were going to ask that question. Normally it comes up a lot sooner then 20 some odd minutes into the conversation. There are a number of different VC funds out there, obviously. You have most of them operate on the model of limited partners. Where let’s say you have your garden variety venture capital fund, they’ve got 200 million in capital management and that comes from 50 people who all put in 4 million, say. In the case of that structure it makes a lot of sense for the VC to talk about everything that they’ve invested in. To beat their chest about their successes and to talk about how much return they’re generating.
It allows them to, one, gain greater commitments from their existing investors and, two, draw in investors that do not currently have their money with the fund so that the people who are managing the fund can increase the amount of money that they get in terms of having a larger amount of capital under management. That’s why you hear a lot of VCs talking very loudly about their successes.
In our particular case we’re an internally financed fund. We don’t get any money from outside. It does not behoove us to tip our hand and discuss anything in specific terms that we are invested in. That would only draw unwanted attention from competitors.
John:
Got it.
Brandon:
We are very tight lipped about a lot of our activities. Unless there’s an advantage for us to talk about it, we don’t.
John:
Sure. When someone’s pitching you they should definitely know what separates them from their competitors so that you can understand what makes the difference. I love your question in your blog here about not only who is your competition and why aren’t they succeeding but why will you succeed where they haven’t? Then you’re back to selling the team again, right?
Brandon:
Yeah, you’re back to selling the team and you may also be back to selling some aspect of your process that makes it superior. I hate to go back to Uber again but you can go back to Uber and say, “Well there are people who already have cabs and cabs are successful in areas where there’s enough of a demand for your service for people who even care about it.” Then you get back into all of that, the weather, in inclement weather you’re competing with other people for cabs.
You have a problem and you have a partial solution. You’re demonstrating why your solution is more than a partial solution, why it’s a more comprehensive solution, why people are going to be willing to use your service instead of the service that exists to solve their problem. If you are able to very clearly articulate what it is that you’re going to do better than whoever it is that you’re going to be competing against it’s very compelling.
John:
Yes. One of your questions in your blog is what’s your end game. Do you also want to know what someone’s exit strategy is in addition to what the future is?
Brandon:
Yeah, I would like to know that they’ve contemplated exit strategies and that they have an idea of what they believe is going to be the best exit strategy. That doesn’t necessarily mean that they have to be experts on exits. The company can evolve in many different ways. Throughout history, notwithstanding human beings, even before human civilization, the organisms that were the most successful, the ones that thrived, were the ones that were able to adapt to changes in circumstances.
We don’t expect people to go in knowing exactly that they’re going to have an exit that looks exactly like this. We’re going to sell to a prospective competitor, we’re going to have an IPO. It’s good to have an objective like that in mind and to have basically run the numbers on it or to have made some projections about it and to speak to why you think that’s the best strategy. You don’t have to be married to that and you don’t have to be right. It can end up being something different. You don’t have to be 100% right about that. I’m sorry, did I skirt around your question? Ask the original question again. I lost myself.
John:
No, it was all about the end game, how much of an exit strategy should someone have in addition to having a vision for what their future should be. Would you like them to say, “Our goal is in 3 to 5 years to get someone to buy us,” or, “We think we’re going to go IPO”? Those kinds of things.
Brandon:
Yes, I would like to know that they have put some thought into it. Yeah, as I was indicating, they don’t have to be right. They can put some thought into it. I’m more concerned, in that initial phase before we’ve even put a dime into it, that they are capable of sound reasoning and that they have good rationale supporting the decisions that they make. Not like, “Oh, IPO because I saw that on TV and I want the big IPO and I want to be there when they ring the bell.” If they’re talking about that kind of stuff then we’re probably not going to be talking for very long. If they have a well reasoned strategy then I want to hear it.
John:
Got it. A sound reasoning strategy is one of the keys to coming across intelligently. I love that you just said that. One of the things I really think is great is you have this line here, “Make it easy for the VCs to work with you.” Given everything else is even between you and another founder who’s come in with a great idea and pitch and traction and all that other good stuff, then the likability factor comes into play because you’re going to be working with them for a long time. Right? Are they coachable? What other things are you’re looking for in whether you decided whether someone’s easy to work with?
Brandon:
Absolutely, it is a huge factor because if you have people who are trying to work with you then, number one, it shows that they’re respectful of your concerns. It also demonstrates that they’re capable of adapting to other people’s needs. Adaptation, again, is a very powerful ability. The more adaptable they are the better they’re going to be at overcoming obstacles and changing things. Tweaking things along the way in order to respond to things that might otherwise slow other people down or hit them with a wall.
Then, again, yeah, if you have someone else who’s intransigent or who doesn’t want to explain themselves when you ask them a question, or seems, for some reason, personally offended when you have a particularly direct line of inquiry. The person who is more cold about it and more analytical, or more Vulcan, for the Star Trek people out there, is the one that is going to inspire more confidence. They don’t allow things that are irrational to cloud their judgment. They basically are just a lot easier to communicate with and communication is very important.
John:
It’s such an interesting challenge that you have to be left-brain Vulcan, logical but you also have to have right-brain emotional story telling skills and, obviously, passion for what you’re doing at the same time. It’s a mix of both but not an overly emotional person, or someone who can only talk about numbers. It’s this happy medium, I would say.
Brandon:
Yeah, it is important to have passion. It’s also important to be able to convey passion to others even if you’re not necessarily feeling quite that passion at a given point in time. What you’re saying is absolutely true but it’s definitely a very dynamic mix that’s required. Everyone has bad days, everybody.
John:
Right.
Brandon:
The person who is able to comport themselves in a very composed way but also exhibit passion for something when they’re not necessarily having that great day, or they’re having that day when they’re not doing so hot. That’s a person that’s going to be a much more stable visionary, a good person to carry the torch forward. It’s not just about being logical and being passionate and having the balance between those two, it’s also about being stable. It’s about, like you said, having that balance and being able to maintain that balance. Yeah.
John:
You gave us a great Tweet. Passion with poise. I like that. Can you just, finally, walk us through from the time you get a warm introduction to a potential founder and you say, “Okay, send me the pitch deck or come in. I want to have you pitch me and the team,” to actually writing the check? What’s a typical time frame and how many meetings and how many hours of due diligence go into all that?
Brandon:
Oh jeez. Well, a lot of people, they think of VC and they think of shark tank and they think it’s like that whole quick interaction where it’s 1,2,3. The vast majority of it is very not glamorous paperwork and research and looking at everything pertaining to the idea. What could possibly go wrong, whether or not there’s a prospectively competing product in the marketplace or some kind of trademark or service mark or intellectual property that conflicts. Then doing research into the founders themselves.
There’s a lot that goes into it. In some cases there are a lot of things that you can do to try to shorten up the timeline. Oh god. Also it depends, it depends on a lot of things. It depends on the track record of the people that you’re working with. If they have a long history of successes behind them and they are respected and trustworthy then you have to do less due diligence into their background than if you’ve got a random person who is still thirsty, they still haven’t gotten their first success yet.
John:
Right.
Brandon:
It varies. It varies substantially.
John:
What’s an average?
Brandon:
I’m trying to give you a range.
John:
Yeah, like the shortest time and the longest time.
Brandon:
We’ve had documents ready inside a month.
John:
Oh wow. Okay. That’s actually what I thought, yeah.
Brandon:
Then there was another where it was going on for like 6 months and the person managed to snatch a defeat from the jaws of victory at the last possible second.
John:
Okay, that’s very helpful.
Brandon:
It’s variable. Again, it depends on how easy you are to work with.
John:
Yep.
Brandon:
How much you push back against this request or that request. It’s, in a lot of cases, how much is on our plate.
John:
Oh, right, of course.
Brandon:
While we do do VC, obviously, that’s our main focus, VC’s extremely volatile. We, being internally financed, we have a lot more flexibility than people who are just opening a specific fund with a certain lifespan and a certain expected return. We also hedge a lot of our VC investments with real estate private equity. There can be a period of time where there’s a lot of movement in the real estate side of what we do, which is a lot more stable than the extremely volatile VC side of what we do. Occasionally it’ll detract some of our attention from examining new ventures so people will just have to be patient.
The thing is, a lot of entrepreneurs have, I think, in many cases, an unrealistic expectation of how quickly these deals can be hashed out. They’re often dying to get in there and get their funding and get moving with their idea. We absolutely respect that but it’s also part of our job to, one, be very attentive to our existing obligations, our existing portfolio companies, our existing investments that allow us to make these extremely volatile VC investments. Also to allow us to take the time that we need to research everything.
I very much like the entrepreneurs who give us the space that we need to make the decisions. Maybe they’ll occasionally call. If we’re working with someone I’ll give them my cell phone. They can call me whenever it is that they need to call me. It happens very rarely but occasionally I’ll get a call 1:00 in the morning, 2:00 in the morning. I’ll answer it because it’s my job.
John:
Right. I really appreciate you managing those expectations. Fastest case is a month, sometimes up to 6 months. It really helps to hear it right from people like you who can say, “Look, you’re not going to walk out of here with a check after one good meeting.” It’s great.
Brandon:
Yeah.
John:
Is there any book that you recommend founders read? Either about business or life in general.
Brandon:
These days, in terms of my reading, I spend a lot of time reading primary research from the National Institutes of Health. In fact, one of the things I never actually mentioned, part of the reason that this VC also wanted to hire me originally was I’m coauthoring a health science book with a research scientist at Pomona College. When I do reading these days it’s usually, if I’m not reading someone’s pitch deck or some documents relating to a real estate transaction, I’m usually reading research in connection with the book that we’re coauthoring.
When I was with Urban Darling … What did I read? I read a book by, I think it was the CEO of Tom’s the shoes. Start Something That Matters. I like that book.
John:
Great.
Brandon:
It’s a good way to be passionate about what you do and to also be connected with the idea that people respond to a genuine message. People don’t want the antiseptic marketing that they get from a lot of people today. They want something that’s warm and fuzzy that they can be a part of. If they’re participating in whatever it is that you’re offering, whether they’re buying a product or using a service, that they feel like not only are they getting their money’s worth, they’re doing something that they can identify with and that makes the world a better place in a way that is tangible to them.
The ability for startup founders to understand that concept and to implement it in a way that allows them to conduct business such that their consumers are going to feel that way, it’s a very valuable thing to be able to accomplish. I liked that book. It was motivating for me.
John:
I love it. We’re certainly going to put that in our show notes for our listeners to check out and read. If it’s motivating for you I’m sure it’ll be motivating for them. I can’t thank you enough, Brandon, for all your insights and for bringing this wonderful blog to life for us about what are VCs looking for and what they want to see in a pitch. It’s been great having you on the show.
Brandon:
It’s my pleasure and thank you for having me.
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TSP039 | Mark Asquith – Transcription
Posted by John Livesay in Uncategorized | 0 comments
John:
Today’s guest on the Successful Pitch podcast is Mark Asquith. He has the number one podcast in the U.K. with a podcast called “Excellence Expected.” He’s also a speaker, an entrepreneur, an author of a wonderful book about productivity that’s free to download from his website. He also has some great insight on the five Twitter mistakes to avoid. He says, if you have a start-up there are three things you need to do to be successful. Number one, you need to really be focused, and that taps into your productivity.
Number two, you need to really be prepared to shift or pivot. He gives a great analogy of, you’re a captain of a ship and you’re just off by one degree, it doesn’t matter at the beginning, but by the time you get a year into your business, you could be miles away from the destination you need to be at. Finally, you need to have a profit mindset. That really is the key to being a successful start-up. I think you’re really going to enjoy listening to Mark. He’s going to talk about Blab and Periscope and all things new and exciting for start-ups.
Hi, and welcome to the Successful Pitch podcast. Today we’re honored to have Mark Asquith, who is an entrepreneur, a speaker, has the number one podcast in the U.K. called “Excellence Expected,” and a self-described geek. Obviously, I want to know him. Mark, welcome to the show.
Mark:
Thank you, sir, pleasure to be here.
John:
Mark, you have such an amazing story of how in 2005, you decided you weren’t going to work for anybody anymore, you were slightly burnt out, and you said, there’s got to be a better way. You started your own design and digital agency, with a bunch of great initials, DMSQD, 2010, which is still operating, and then you really have become an expert on productivity, starting in 2012. Would you mind taking us a little bit on that journey, because it’s so interesting?
Mark:
Yeah, of course, I kind of got to about 2005 and realized that I just got really bored working for other people. It was just quite a dull time really, and I was working in the corporate world, as many people do. It’s just a story that’s familiar to many entrepreneurs and business people, and kind of realized I was spending a lot of time with people that, being completely honest, I didn’t really have too much in common with. I decided just not to do it any more, so I stopped doing it, just stopped doing it.
I was kind of lucky, because I was still young. I didn’t really have too many commitments, especially financial commitments, so I was able to do that relatively easily. Just kind of started freelancing, doing contract work, and moving through into training and digital training and digital enablement for big public bodies and private sector clients in the U.K.
As you said, in about 2008, I think it was, I started the web agency, which has gone through various different versions, and when I say that, I mean, it started out, it was me, just being me, then we morphed into being me with a couple of co-founders, and then we morphed into what we have today, which as you say, is actually DMSQD. Believe it or not, as we record this, we have just actually rebranded. Yeah, we’re changing from DMSQD to Hacksaw, which is quite an interesting one. I always feel that, there’s always different, I guess, progression points in the life of a business. Being in the creative sector, we find that so much. Every few years, we redefine how we serve people and help people.
This particular time, when we did that, we realized that actually DMSQD didn’t fit anymore. We’re just going through a bit of a fun rebrand, which is kind of nice. Throughout the process of developing that business, like you said, John, I’d sort of got to about 2012, and just got the balance wrong. Even if there is such a thing, I actually don’t think there is, balance to be had between work and life. I kind of got that wrong, I was working on the wrong things at the wrong time, spending too much time on these wrong things. Just have to do something about it.
That’s when I started really taking productivity seriously. Which sounds odd, I mean, had a business for such a long time before that. I realized the power of focused and conscious productivity as opposed to just getting through the day. Big, big turning point, and that led to the podcast, “Excellence Expected,” led to what we’re doing at the studio, rebranding to Hacksaw, and the success that we’ve had there. Yeah, it’s an interesting journey. It’s certainly been a fun one, and it continues on, which is always the main thing, really.
John:
Well, I’m always fascinated, because my background is in branding and advertising, and I think all the founders listening, when you’re pitching for investors, you really have to have a good story behind your brand, and even the name of your brand. Oftentimes there’s a great story on how you came up with the name. I’m sure you considered a lot of different names before you landed on “Excellence Expected” for your podcast. How did you come to that?
Mark:
You know, I didn’t consider many, as odd as that might sound. Normally, I completely agree. I’ve renamed several businesses, I completely agree, you go through such a process with it. But I kind of knew what I wanted to say with it. I knew that it was for business people, they always want more from themselves, they always expect themselves to be excellent. I knew what the sentiment was for the show, I knew that it was helping small business people, I knew that it was trying to enable people to pick out certain issues that were stopping them excelling, and really try and solve some of those problems, using the show.
I stumbled upon, well, I didn’t stumble upon it, I was consciously reading Steve Jobs’s autobiography by Walt Isaacson, and did the famous quote that Steve Jobs states that people aren’t used to working in an environment where excellence is expected. I just thought, you know, that kind of just summed everything up.
John:
Mm-hmm (affirmative).
Mark:
People like you and I expect ourselves to be excellent, and if we’re not, we don’t let it out the door, or we beat ourselves up. That was the real light bulb moment. Of course, you know, we expect ourselves to be this good. That’s where it came from, really.
John:
I like it.
Mark:
The sentiment was there for a long, long time, and then Mr. Jobs managed to articulate it for me in the pages of his autobiography.
John:
Well, Steve Jobs was also known for being a perfectionist, but for me, excellence is not the same as perfectionist, perfectionism. Do you agree that there is a difference?
Mark:
Oh, absolutely, you can be a perfectionist and completely fail at everything, because you focus on the things that don’t matter.
John:
Right, got it. Well, let’s take a deep dive, so the listeners are going to get some great takeaways. Because you’re such an expert in productivity, you actually are kind enough on your website to allow people to download a free book on this topic, which I’ve spent some time reading, and I have to tell all my listeners, you’ve got to download this book on productivity, it’s fantastic. One of the things that really resonated with me was, you know, the element of personal scheduling. One of my favorite quotes is, “If it’s not scheduled, it doesn’t happen.” How do you personally, and what kind of advice do you give people who are saying, “You know, I have my schedule and then the day gets out of control, and all I’m doing is putting out fires, and I don’t get any of my things accomplished.”
Mark:
I think it’s a challenge that faces all, and I think so many of the most successful people would just completely live by the sentiment that you’ve just stated, “If it doesn’t get scheduled, it doesn’t get done.” That was something that recently I’ve tried to even tighten upon myself. I think we all dip in and out with habit, and we sometimes catch ourselves falling back on things we’re comfortable doing. I think we constantly have to be assessing that and you know, the idea that “if it’s not scheduled, it doesn’t get done,” is really important.
The way that I determine what gets done is, kind of using a couple of different methods. I’m a big advocate of the Gary Keller book, The1Thing, which I think is a fantastic book. I wholeheartedly believe that set some time aside and focus on something that’s the one thing that you need to get done. The issue is, defining that one thing that needs to get done can be really, really difficult. The way that I do it, and it’s in the book actually, is I just use something called the “triple one principle.” Someone told me the “double one” principle when I was younger, and I added the third one myself.
John:
I love it.
Mark:
The first two things are, you’ve got to basically sort out what’s important and what’s interesting. So the task that you undertake, which of these is important, which of these are interesting. The trouble is, that doesn’t really take into account the things that you can’t get away from, so that’s the third one, which is, what’s integral. Just measure your time out, figure out what you do on a daily basis. I mentioned in the book, measured it for two solid days, and then all the tasks that you do, split them into one of three categories. Important, interesting, and integral.
John:
Fantastic. We’re going to tweet that out. That’s great. “Is what you’re doing important, interesting, and integral?” That’s great.
Mark:
Exactly.
John:
I love it.
Mark:
It’s huge, and it will change the way you think about things. I talk through in the book as well, various ways of deciding what to do. So many productivity books will just cut out what’s interesting. But you can’t do that, that’s impossible, because it’s interesting to you for a reason. I think it’s about finding a harmony between all those tasks, and making sure, just as so many other productivity books state, making sure you get the important stuff done when it should be done, and making sure that your mind is completely active when you’re doing those things.
You can’t ignore the integral. You can’t, it’s not as easy as turning off your e-mail, it’s not as easy as not taking any phone calls all day. It’s just sadly not that easy. Yeah, I think that’s the big thing people need to understand. I think we all need to keep reassessing that, break everything that we do down into this “triple one” principle.
John:
Right, and especially the interesting aspect of that. Because you talk about one of the key ways to prevent burn-out is to stay happy. It seem so basic, but if you’re interested in what you’re doing, then you’re engaged and then that prevents burn-out, if I understood your book correctly. Would that be accurate?
Mark:
Well, I think so, and I would sort of add to that piece. It’s the, I feel the happiness comes from the fulfillment and the satisfaction that you don’t have anything hanging over you, so you’re not, when we think about the burn-out stage or we think about the path that takes us to that stage, it’s because we’re constantly, as you said earlier, John, we’re constantly fighting fires, and we’re constantly shifting gears and shifting directions, just to try and get these little things done. I think when you start to focus on what’s important, and you achieve that, you actually concede to yourself that it’s all right to do something interesting for twenty minutes or for half an hour.
John:
Nice.
Mark:
Because you’ve achieved what you wanted to achieve for the day.
John:
Yes.
Mark:
I think we can’t be too hard on ourselves in that respect. We’ve got to understand that we set out in business to enjoy it. No one ever says to their parents, “I’m going to start a business and two years in, I’m going to absolutely hate it. I’m going to be doing work that I don’t enjoy.” No one says that. So you’ve got to keep it interesting. No question.
John:
Fantastic. One of the guests that you had on “Excellence Expected” was none other than Guy Kawasaki, and one of the things that he said in that interview that I wanted to ask you about, that I thought was so great, is “most CEOs suck at social media.” Since one of the other things that you offer on your website, is something again that you can download for free, everybody, “Five Twitter Sins,” I’d love to have you talk about Guy’s quote and the whole concept of social media and all that. Good stuff.
Mark:
Yeah, it was a fun one with Guy, such a fantastic character and such a nice, gracious chap. The sentiment there, the context of that was really that, he’s very much, and this is massively advocated by so many entrepreneurs, but he’s very much about people-to-people, human-to-human, and that’s why most CEOs generally suck at social media, because they don’t understand that it’s not the traditional one-way, linear, shout-out-loud marketing that they perhaps are used to.
That kind of puts that into some context, and I think especially in small business, I find that most people still don’t get how social media works, because they feel like they should go on there. It’s like an e-mail newsletter, they think their e-mail newsletter is still the way to go about marketing, using e-mail marketing. The minute that you realize no one really cares what’s in your newsletter, the minute you start to get creative and actually start to give value. I think that’s where so many people in small business really, really struggle. They’ll jump on, they’ll pop a tweet out once every three days because “it’s the right thing to do,” they feel somehow vindicated by doing so.
All they’ll do is, they’ll say, we’ve got a new product, we’ve got a new service, or we’ve won an award, or we’ve got new premises, or new team member. No one cares. When you start to dig underneath that and really dig into it, most people in small business, they only worry about that, because they assume it will take all of their time to create this massive overarching social strategy, when actually they can start, they can really start very easily by just being their self and having a bit of personality, and having something to say that will connect with people. You know, the whole “know-like-trust” linear path through
That starts with personality, and I think that’s what Guy was getting at, that most CEOs don’t get that. I do believe a lot of small business people still don’t understand that it’s all right to just be yourself and actually be you.
John:
Yes, because especially when I’m coaching people on how to pitch themselves to investors, I explain to them time and again that you’re pitching yourself. They’re investing in you and then your idea, not the other way around. Social media is a great way to develop relationships as you mention in your “five Twitter sins to avoid.” Judy Robinett who wrote that great book, “How to be a Power Connector,” and how we actually met, which is a great example of connecting, is all about connecting through people and who can you acknowledge on Twitter that’s said something nice about you and having that personal relationship and your personality come through in social media, which then translates to your brand, which then translates to what you’re doing, really is such great insights that you’re offering people.
Mark:
Well, I think it really is about that, I think it is about just connecting and being there and adding the value.
John:
Mm-hmm (affirmative). One of the things that I really enjoyed recently is your new Periscope videos that you’re doing, and you had such great tips on start-ups. There’s three of them, focus, pivot, and profit. I wanted to have you, if you wouldn’t mind, go into each one a little bit, but in particular, I love this concept of how being, the analogy you used of the captain and this ship and one degree.
Mark:
It’s a massive one that is, and really understanding that, that’s in the pivot, and it kind of overlaps into focus as well, but definitely the ability to be able to pivot and just decide that you’ve gone ever so slightly in the wrong direction, and when you start looking back over your shoulder, you’re miles away from where you wanted to be. I think, as you said, the captain of the ship analogy is a really useful one, because if you set out in small business, I don’t know any business, really, that one year later is exactly the same as it was the year before, you know, when they first started. People change.
The businesses that go under, in my opinion, a lot of the problems that they have is they don’t realize soon enough that they have got it wrong. They’re focused so much on being busy, getting through the day today, going in and doing what they need to do just to get through that day. They’ve not stepped away from it, looked to the big picture and course corrected where they need to. You know, if you do set off one degree out for six months, you’re still only, you’re within touching distance of where you thought you might probably want to be. But a year down the line, eighteen months down the line, you’ve got such a massive chasm to cross to get back on course, that people really do then start to lose a bit of faith.
I think having the mindset of being able to pivot and allowing yourself to actually understand that that’s all right. It’s not failure, you’re just changing. If you go to a restaurant, you order a steak, and then the minute the guy walks off, you say, “Excuse me, actually, sir, I changed my mind, I didn’t want a steak, I wanted a lasagna.” He doesn’t care, he’s not, oh, look at this guy, he’s changed his mind. It’s just that steak wasn’t going to work for you at that time. I think that’s, allowing yourself to have that confidence that it’s not failure, you don’t have to impress anyone, you don’t have to pretend to anyone that you’ve got everything sussed, it’s all right to have that pivot.
I think that’s where the focus comes in. You’ve got to, I believe you’ve got to have the focus on the day-to-day, and you’ve got to schedule a time, as we mentioned earlier, to be able to get through the important tasks. But then, you’ve got to allow yourself to focus on the course. If you look Eric Reeves’s book, the job of a founder is to steer the business, it’s to knock it back in line. It’s like a puck on an ice rink, you’ve just got to knock it in the right direction. That’s the same thing with focus, you’ve got to take some time out to not only focus on the minutiae and get the day-to-day done, but focus on this course, and if it’s not right, be able to pivot through.
When you put that together with a third tip that I discussed in that Periscope, which is to have the profit-first mentality, and this is something that people like Chris talks about a heck of a lot. You’ve got to understand that it’s not about being in a pub and saying how much you turn over. No one cares. It’s about actually making the cash, you’ve done the thing that makes your business a success. Really, when we break it right down, is you’ve got to have cash in the bank. If you don’t have that, you won’t be there doing business.
John:
That’s so valuable to our listeners, because when you’re pitching an investor, you have to not just say how you’re going to make money, but how you’re going to be profitable so that they can actually get the return on investment that they’re seeking. If you’re just talking about how many users you have on an app and you haven’t figured out how to monetize it, it’s meaningless.
Mark:
Well, the best example of that is Twitter, you know, they still struggle. They still really, really struggle. We’ll tweet that.
John:
We’ll get kicked off Twitter.
Mark:
Yeah, we’ll get kicked off Twitter, see you all on Facebook. It is difficult, and in the first year, you just, you get through the first year by getting through the day to day. You go to work, you’re busy, you come home, and then the next day you do the exact same thing, and before you know it, you’re eighteen months in, you’ve not made a penny. It’s difficult because you need to step out and look at the profit. We’ve all fallen prey to that before.
The sad thing is, it’s because we enjoy what we’re doing so much that we just want to go and do it, especially new start-ups or new business people. Never had the freedom, we’ve never had that freedom to be able to do what we want, so for a year or eighteen months or whatever it is, we’re just going and loving it. We’re like a dog in a field, we’re running around, it’s amazing. But without it actually being profitable, not turning something over that’s impressive but without actually making profit, the second eighteen months is not going to be as much fun.
John:
No, and I think one of the key things that you talk about is this importance of focus. One of the focal points is how many months until we break even, and once we hit that milestone, then we can start talking about being profitable, but if you don’t even have that first milestone of breaking even in mind, then you’re never going to be profitable.
Mark:
Exactly. Completely, sorry, just to interject there, I think one of the, the other thing I would say to people, I would even skip over break even. If your goal is just to recoup the cash that you’ve invested, that really feels like such a safe goal. I always really, really try and tell people, look, just make the profit as quick as you can. Because you can make it, with the right focus in the right place. You can focus on it, because if you didn’t think you could profit from it, you wouldn’t have started the business.
John:
You wouldn’t have started it, exactly. Great. Well, the other thing that’s really in your wheelhouse of expertise is Periscope and Blab and getting leads from all that. Can you speak to that a little bit?
Mark:
Yeah, absolutely, this is still quite a new thing for me, actually. Well, it’s a new thing for everyone at this point, and there’s certainly some massive social media influences that are doing a really, really good job with this. But I’ve been using Periscope very specifically to build the relationship, put my face there, because I do an audio podcast, I write the blogs, I run the Facebook groups, I do everything else, I do, I run the agency. People in the agency know me completely differently to the people that listen to the podcast.
It’s all right for me to go on Periscope and give my tips out, but I also want you to see me walking through my house, past my Batman and Robin picture and my set of comics. You know, I’ve got, I’ve just literally picked up a Superman hat , and I want people to see that it’s me that’s doing this. It’s all these things that I say, I’m actually practicing. It’s not just wannabe, this sounds like a really good idea. That’s what I’m using Periscope for, so it’s about generating leads in a very passive, nurturing manner, just allowing you to contextualize a lot of the content that you put out there.
Because if you send an e-mail newsletter to your clients, they don’t know, they don’t care. If you’ve won an award and you tell them on the, the only newsletter that you’ve sent out in the last six months is you telling your clients how well you’ve done at awards ceremony, they don’t care, but if they know you, if they feel like they know you, then they care. Then they reply, and say, “Well done.” Then you’ve got a dialogue, you can start talking, you can start to help them, you can start selling things with them. For me, that’s where Periscope really comes into it.
Of course, it has so many applications, but I think for the small business owner, for the entrepreneur, it’s about taking your face and making it something that people are used to seeing and enjoying what you’re doing. I think it’s just add the personal element, and it will add to the arsenal that you’ve got when it comes to saying, “Listen, guys, I’ve got a new product, let me give you this behind the scenes look at it. I’m going to turn my phone around. Here is my product that I am working on right now, so when you buy this, you can see, it’s blood, sweat, and tears gone into it.” I think that’s really powerful.
John:
We’re going to tweet that out. “Use Periscope to make your face something people are used to seeing.” That’s a great line. Love it. Then can you chat briefly about Blab?
Mark:
Yeah, Blab again, I mean, this is really new as we’re recording this one. But I’m seeing, especially in podcasting space, I’m seeing so many people, so many people start to use Blab for recording, which is mindblowing, you know, really just recording the entire conversation. Which I love, I love the idea, I wish I’d kind of done it sooner. I think Blab is really really useful, I think that’s going to really find its place for small business in particular, when it comes to Q&A sessions or when it comes to engaging your customers.
Like for example with podcast websites, I can see us using Blab to have a conversation, “Listen, guys, what do you want? What else can we do to make your life better?” Allow people to jump in on that conversation. I think small business people, the barrier, I wrote a blogpost on it earlier, actually. It’s called “Periscope: The Marketing’s Game Changer.” Something like that, it’s over on the website. It talks about how the barrier to creating an engaging video content has never been lower. We’ve all got amazing cameras in our pockets, we’ve all got access to high speed internet. We complain if we’ve got 3G, like that’s the slowest we can tolerate. Think about, that’s amazing.
The tools that we’ve got at our disposal, the things that we’ve been doing business with for so long. We’ve got our personality, we’ve got our faces, we’ve got our expertise, we’ve got our smile, we’ve got the way we articulate things, and these are the tools that we’ve been doing business with for the last whatever, five hundred, six hundred years. Commerce has been going on with these tools only. People using Periscope and Blab, that’s all they’re doing, they’re using the tools that they’ve always had.
I think that’s where small business needs to just perhaps catch up a little bit, insofar as don’t be shy of it, don’t be afraid, don’t worry about, well, what do I need to say? What do I say? Just go on, and people, when you’ve done two or three of them, people will tell you what they want you to talk about. Because they will ask you the questions. I think that’s where Blab is really going to take off. It’s about small businesses, it’s about talking directly to the people that you want to work for, that you want to serve. I don’t think there’s ever been a medium like it. I think it’s stunning.
John:
It’s great. It reminds me of an old TV show called “The Brady Bunch” here in America, where they had all these squares of the family members popping up and pointing and looking at each other. It’s quite funny to see all that now become a reality, of a whole new way to communicate and connect. In addition to the book that you have on your site of “The Fourteen-day Guide to Being More Productive,” and you mentioned The1Thing, is there another book that you want to leave our listeners with as far as a recommendation about life, productivity, anything.
Mark:
One of the biggest influences on my life has been such a short book, but it’s so powerful. It’s “The Strangest Secret” by Earl Nightingale. I mean, it’s such a powerful book. It talks about success, it talks about what we as a society, what we desire and how we pursue what we desire in life. The sentiment of that book being, we become what we think about, and it’s really that simple, the strangest secret to life is we become what we think about. It’s so simple, yet so profound. I think that is always my barometer. If I’m in a bad mood, if I’m having a bad day, I always go back to, we become what we think about. Do you want to become this pain in the ass, negative person? If not, get over that bad mood. Just get back to normal.
John:
Right.
Mark:
Yeah, the Strangest Secret, Earl Nightingale, is amazing.
John:
Oh, that’s terrific. I love that. We’ll be sure to put that in the transcript and the show notes for people to click on that. Because you know, if you’re an entrepreneur and you’re afraid that this isn’t going to work out or you got some bad news from a customer or what have you, you can either continue to think about that, and make catastrophe in your head and play worst case scenario out, or you can stop yourself and focus on something you do want to have happen. That’s great insight, there, Mark.
Mark, it’s been a pleasure. How can our listeners follow you on Twitter and your website? Give us all that good information if you would.
Mark:
Of course, well, thank you, John. Honestly, it’s been a real pleasure chatting with you. I’ve enjoyed every second of it. The easiest places to connect with me are, as you said, on Twitter @Mr. Asquith, and over at excellence-expected.com. Or if you do a Google search for Excellence Expected, the site will come up, and you can find everything there.
John:
Terrific. Well, it’s just full of so much valuable information, and your podcast is fantastic, you have amazing guests and we’re honored to have had you on The Successful Pitch today. Have a great one.
Mark:
Thank you, John, all the best.
John:
All the best. Thanks for listening to The Successful Pitch podcast. If you like the show, please go to iTunes and write a review, and encourage your friends to write reviews, too. It really helps get the word out. You know, people say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest, but when it comes time to write the check, they don’t do it. So how do you get people to say yes and then follow through?
Visualize yourself on the left side of a river bank, and you have to cross the river, and on the other side of the river is where the funding happens. So first you make up your idea, then you make it real, then you make it reoccur. Once you start dipping you toe into the water to get to funding, that’s where I can help. I get you across that river faster than you would on your own, with a lot less frustration than you will get when you hear a bunch of noes and you don’t know why. So if you want some help getting funded faster with less frustration, go to my free funding webinar, sellingsecretsforfunding.com/webinar. Sign up and get in-depth information on how you can get funded fast. Thanks.