TSP035 | David Desharnais – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

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

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

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

David Desharnais:

Thanks a lot John, appreciate it.

John:

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

David:

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

John:

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

David:

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

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

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

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

John:

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

David:

Cadence Design.

John:

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

David:

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

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

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

David:

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

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

John:

Right, but at least initially, right?

David:

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

John:

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

David:

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

John:

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

David:

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

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

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

John:

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

David:

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

John:

Wow.

David:

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

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

John:

It’s great.

David:

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

John:

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

David:

It’s amazing.

John:

Is that the US only or is that global?

David:

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

John:

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

David:

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

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

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

John:

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

David:

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

John:

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

David:

Absolutely. Absolutely.

John:

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

David:

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

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

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

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

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

John:

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

David:

Absolutely.

John:

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

David:

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

John:

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

David:

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

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

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

John:

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

David:

Absolutely.

John:

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

David:

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

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

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

John:

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

David:

Right, absolutely.

John:

Well, congratulations.

David:

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

John:

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

David:

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

John:

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

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

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

David:

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

John:

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

David:

Absolutely.

John:

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

David:

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

John:

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

David:

You bet, thanks a lot.

TSP034 | David Howitt – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Welcome to The Successful Pitch podcast. Today’s guest is David Howitt, the founder and CEO of the Meriwether Group and the author of Heed Your Call. In his book, Heed Your Call, he talks about the journey that founders take that’s very similar to the journey of the Wizard of Oz or the Joseph Campbell journey of the ‘Hero’s Journey’ where you start your idea and you go from a black and white world and suddenly it’s color and everything is wonderful and then you meet a witch who gives you some obstacles and that could be many different forms of customers not buying or there’s more challenges than you thought, but you find some mentors along the way who go on the path with you, but you still have to walk your own path and then you realize when you get to Oz that you still have to find all the answers inside yourself.

His company, the Meriwether Group, has an accelerator program and people graduate from that and they invest capital and then they continue and help them with an exit and he has several examples of how he’s done that. The power of the word ‘and’ is his big philosophy, so profits with a F and prophets with a PH is the key to being successful; Left brain and right brain, thinker and dreamer, artist and scientists. I think you’re going to love this episode as much as I do.

Hi and welcome to the successful pitch podcast, today’s guest is author David Howitt of Heed Your Call. He’s also the founder and CEO of Meriwether. I’ve had the honor of reading his book and it has so much great information about how to be a successful founder and also a successful person. David, welcome to the show.

David Howitt:

Thanks so much. I really appreciate you having me, John.

John:

I want to start at the very beginning like most things do that give people a little context of texture. You obviously have quite an impressive background. You worked at Adidas, both in their legal division and then went to licensing and then you and your wife launched Oregon Chai and sold that successfully in 2004, but there’s a lot of journey that you talk about in your book, Heed Your Call about what made you, you know, where so many of us are told do this and you’ll be happy and then you’ll find that career path and you’re like, this isn’t making me happy and you’ve managed have multiple careers.

You now have Meriwether Group which helps founders through a variety of things that we’ll get into, but I want to just, if you would, give us a little context of what it was like when you were miserable as a lawyer and where did you find the courage to leave that and start your business with your wife.

David:

Yeah, so I appreciate that introduction. Thank you very much and I so appreciate what you do being on the show and having the opportunity to speak to your listeners, so thank you for that. In terms of the law firm and my journey, you know, I think like most of us, you know, I sort of stepped into what Joseph Campbell, we’ll speak more about him, refers to as the ‘known world’ and Joseph Campbell was the foremost authority on mythology; looked through a variety of cultures, spiritual belief systems, time, and geography and came away from saying there’s one central mythology, one central myth that’s been prevalent through all of those things which in of itself is, you know, powerful. In that myth, which he refers to as the ‘Hero’s Journey’, he built a road map and this road map was kind of the articulation of one person’s journey in life and what I found in reading that is it’s truly applicable to all of us and applicable to business.

So for me in answering your question directly, my known world was growing up in a middle class conservative town in Michigan and having parents and grandparents and neighbors and friends and teachers all of whom, you know, I listened to and respected and admired; all had kind of a central thesis which is you should go do this and for me that ‘this’ was you graduate from high school, you go to a four-year college and then you go on to some form of grad school, you graduate, you go get a great job somewhere that you may or may not like, likely you won’t like, but that has high level of earning potential, you meet someone, you get married, you have 1.2 kids. Buy a house and check all the boxes and so I subscribed to that and my known world all the way to the point that I found myself in a very large law firm.

One day, you know, sort of woke up and said, boy, I’m miserable. This is really not a happy place for me. I don’t feel like I’m in alignment with what is sort of my truest self and it’s starting to show itself physically, emotionally, and spiritually and I need to think about what to do. Now, of course, at that moment ego jumps in and starts screaming at you, well, there’s nothing you can do, you know, people will think you’re insane if you quit this job. You’ll go broke, you’ll be homeless; your wife will leave you, your neighbors will think you’re mad. So, I struggled with it for a while, probably close to a year, before I got to a place where I finally decided to surrender and let go, because it was just so painful.

John:

Well, you talk about that in Heed Your Call about, you know, we’re so concerned about worrying about what other people think about us and wanting other’s acceptance and that we live our life from a place of fear and trying to control things all the time and I think everyone listening can relate to that no matter where you are on the startup journey whether this is your first startup or your fifth startup, there’s a journey and overcoming fear is a part of it.

David:

A huge part of it and it’s interesting, John, you know, in our society in business and in our personal lives, we’re told that fear or that letting go or that surrender is the equivalent for failure that if you allow yourself to be sort of humbled and to say, you know, I actually need to let go of this or I’m afraid of this or this is no longer surging me, I give up. That that is sort of waving the white flag and admitting defeat and being a failure, but in Buddhism, it’s exactly the opposite.

You know, one of my mentors and guides, Deepak Chopra, who is very successful in business and in life, said, you know, when we surrender, when we finally let go, actually that’s when possibility is at its highest. That’s when creativity is at its highest and that’s where our ability to co-create a result in our business and in our lives is at its highest. It’s by surrendering, it’s by letting go that in fact we invite in the potential to actually align ourselves with our highest and best.

John:

That’s great. We’re going to tweet out that. That will be one of the first tweets from the show. When we let go, possibility and creativity are invited in. That’s a great line. I love it. Thank you.

David:

Awesome. What I want to say also, everything I try to put forward in Heed Your Call and that we’re talking about now is stuff that I’ve seen illustrated in the world in business. So, I felt like there were a ton of great spiritual books out there and a ton of great books out there on business, but maybe not one that had built a bridge between the two and I, you know, having grown up in a, you know, home where there wasn’t a lot of woo woo spiritually around and having gone to law school, really wanted this book to be grounded in actual business case so that maybe the ego for your listeners and for some of the readers could sort of let down a little and so that concept of surrendering and letting go and that allowing for creativity and for possibility is something I have seen demonstrated in many successful businesses including Oregon Chai.

John:

Yes, well one of the things that I really resonate with what you just said that’s in your book is, I’m going to quote, “When we dial up too much of our left brain tendency and ignore our more empathic and intuitive nature, our relationship with the collective consciousness diminishes.” I’m personally really fascinated with that, because what I do is I help the founders, tech founders in particular, which are very left brain about how something works, when they’re pitching, what they don’t realize is they have to move to the right side of the brain, which is the spiritually, the storytelling, the emotional engagement. That’s where all the selling occurs.

So, you’re able to left brain lawyer till the cows come home and shift that into a right brain story. So, speaking of stories, let’s jump right into one of my favorite stories in your book is about your grandfather and this great line about instead of why is this happening to me, why is this happening for me, and everyone has had that question that they ask themselves in their life, in their startup, so please tell us about that story in your grandfather. What an amazing influence.

David:

Thank you. Thank you for that. So, my grandfather was not a traditionally educated man in the sense of western culture. He didn’t have a big college degree or grad school degree, but he was a very successful entrepreneur and a very successful person and he credited that with what he referred to as using common sense and when I dug a little deeper on what he meant by that, effectively what he started to articulate and I later really came to understand is that comment that you mentioned about what you do, which is help people to toggle so seamlessly between the left brain and the right brain, what we refer to at the Meriwether Group as the power of ‘and’ that you need to have analytics, but you also have to have artistry. You need to have intuition in addition to intelligence. Prophet spelled with a PH and profit spelled with an F and it’s when we combine our whole brain, when we bring our truest and fullest self that the magic happens and with regard to my grandfather, I think he embodied that.

You know, he had enough of sort of that left brain chops. He understood how to build a profit and loss statement. How to look at an income statement, margins, supply chain, the consumer. You know, he probably wasn’t the best at it, but he was certainly capable, but he also had empathy and he had the ability to understand his consumer deeply and his audience and as you put forward so well, when you’re working with your clients to help them understand deeply – in the book Heed Your Call, I speak of deep empathy; our ability to be connected to the other is so present at any given moment. If we just allow ourselves for ego to quiet down, we truly can walk in another person’s shoes, sit in their seat, truly appreciate and understand what it is that they’re living with and/or looking for and then we can shape our message, we can shape our pitch, we can shape our business, our product, our service, in a way that’s going to be mostly likely to be embraced by our audience, our consumers.

So, my grandfather talked about these subtle shifts that were really pretty powerful and so the one in which you commented on, when you look at life and certainty in business, you’re going to have multiple times, I certainly still do, where you’re going to hit a wall, where you’re going to have someone in the organization you’re butting heads with, where we’re going to have some type of challenge or hardship that is really in your face and I think for most of us when that happens, we go into this victim mentality of why is this happening, woe is me, this is so hard, why do I have to deal with this every day, but if you can shift that as my grandfather taught me and ask yourself, why is this happening for me? What is the lesson here. What is the mirror that is being held up to me that’s going to allow myself to grow as a professional, as an individual, as a boss, as an employee, and I think when we look at life through that lens, suddenly the shift allows us to actually approach these challenges through a lens of possibility instead of a lens of, you know, being restricted.

Carlos Castaneda in his books refers to guides and mentors and I think for most of us we always think of a guide or a mentor as someone who is there to really help you, to is your friend, who is there to give you positive reinforcement and tools, but Carlos Castaneda talks about guides and mentors that are actually there to create impediments for us. They’re still your guides, they’re still your mentors. They don’t do it in a way that feels as good, maybe, but they’re there to help us overcome elements of our personality or of our journey, that are going to allow us to move further down the path. So, when you find that in your work, in your job, think of these people as a guide or a mentor and what it is that they’re there to teach you about yourself or the world.

John:

There’s so many things you said that I want to recap. First of all, I’ve never heard this phrase you said and I love it, we’re going to tweet that out. Prophets with a PH versus profits with an F. With this prophets and profits, that is absolutely brilliant, because it’s the whole ‘and’ philosophy, you know. Your book talks about you need to be the thinker and the dream. You need to be the artist and the scientist. You need to have prophets and profits with the two different spellings and your analogy in the book of even music has light and dark keys, so you need both sides to make that sing for the investors when you’re pitching. I mean, it all ties together in such a great metaphor that you said, so thank you for that. Your book is broken into three different categories, sections, initiation, mentors, and mastery.

So, I want to touch briefly on each one of those sections just to tease our audience to make sure they go out and buy and read it. The initiation, the thing that really stands out for me is, you not only have to hear the call, but you have to Heed the Call hence the title of the book and then the mentors that you just touched on is most people just assume that mentors are only going to be your cheerleader, if you will, right and help you and not give you any obsoletes and what you just said is so interesting that, you know, somebody might not have the label of guide or mentor, but if they’re giving you a challenge, if you shift your perception they can absolutely become a mentor and then, of course, the whole mastery. So, let’s dive into mastery a little bit, which is what you do at Meriwether, which I really want you, if you wouldn’t mind, walk the audience and the listeners through all the different options that you provide founders from the accelerator to giving capital.

David:

Yeah, thank you John. No, I appreciate it. So, our firm the Meriwether Group was really based on the power of ‘and’ and based on being with an entrepreneur and a business owner through all facets of their journey. So, we ground it on the left brain side with what historical was called a merchant bank, so merchant banks back in the day were very high touch consigliere partners to business owners and folks who were birthing businesses and they basically locked arms with you and said, we can help you understand how to grow your business and actually be there to assist you with the work. We can add capital if that’s necessarily as part of your growth and then when you’ve reached your defining moment, we can assist you through an exit that is high water mark economics.

Those groups were largely bought up by large multinational financial organizations because they were so successful and then has it often happens, the very things that made them special were lost in those acquisitions, so we felt, again, from the left brain side that this model of a more, I would say, connected and more holistic partnership in helping these business owners made more sense than forcing them to talk to one group about growth, a different group about capital and a totally separate group about preparing for and going through an exit that is very disjointed, it’s very disconnected.

It has apparent risk and for people like your listeners who were working 70 hours a week trying to start up those different relationships or juggle three different relationships is often very tiring, so that was the left brain concept, the right brain in addition to that, again, back to Joesph Campbell and the Hero’s Journey and I’ll use an illustration that hopefully your listeners will sort of identify with.

So, the Hero’s Journey has been a central sort of thesis for many of the biggest movies and books. Lucas cites Hero’s Journey as the basis for Star Wars and all of the storytelling, the Avatar movie, Lord Of The Rings, The Hobbit, the list goes on, but I’m going to use the Wizard of Oz as a way to kind of explain what we do at the Meriwether Group and how it ties back to this notion of the Hero’s Journey.

So, we define at the Meriwether group the entrepreneur as the modern day hero. It’s our belief that entrepreneurs, your listeners, people who are birthing new businesses, disrupting the status quo, looking at the world and asking themselves where has the consumer been deprived of innovation, of relevance, and of a really good choice, and then bringing that to the market. That those people are modern heroes, more so than politicians, more so than maybe even folks and NGOs. So, we want to be in service to that hero. We want to be a guide or a mentor to them.

So, you have this founder and they live in the known world. From me, it was growing up in Michigan. We talked about that, but for some of us that desire to listen, that quiet spot inside of us that tells us, hey, this isn’t what you should be doing or this path isn’t your highest and best. For some of us, we actually get to a place where we open ourselves up to listening to that voice and that voice is always there. It’s always present, but we do things to try to quiet that voice, because that voice is a voice of change and a voice of risk. Ego doesn’t like that so we employ tactics to try to keep that voice at bay and we say things to ourselves like, I could never follow my heart, I could never start this business, I could never do this because, fill in the blanks. I have a mortgage, I have kids going to college, I have car payments, and as a result, we live our lives in the known world and we don’t ever take that shot.

You know, as a side, in writing Heed Your Call, I spoke with a number of end-of-life caregivers and mostly through the hospice care and the single biggest regret people have as they’re reaching the end of their life is I mailed it in. I didn’t take my shot. I live my life in accordance with other people’s view of who I should be and I played it safe and I really wished I hadn’t.

So, back to Wizard of Oz. So you’ve got Dorothy and she’s living in Kansas, that’s her known world and Dorothy feels like there’s got to be something more than a dirt farm in Kansas and she finds herself leaving her known world and we all know she ends up in Oz, so this is the founder leaving their job, leaving their career, leaving the vestige to the known world and taking the leap and starting the company.

So, initially it’s pretty euphoric. Dorothy – there’s beautiful colors, there’s all this people singing and great for her, she’s excited, she’s left the bonds of the known world and we all know this as business owners, we know this moment and we celebrate it, but it’s pretty short lived is what mythology tell us and eventually you have, as Dorothy did, your “witch” shows up in a puff of green smoke and says, I’m going to get you my pretty.

Now, for the business owner that might be, well, this business idea is cool, but I didn’t think through the supply chain or how I was going to market or is there enough margin or can this product actually be made and so you fall into what Campbell refers to as the abyss and the abyss is that moment of despair where we have to actually surrender and let go.

We have to give up, kind of drop our arms and literally say, you know what, I give up. I don’t know that I can do this and interestingly, it’s that moment in time when the mentors and guides show up and the reason is, I think, that before that moment of humbling, you’re not going to be open to the advice or counsel of people around you, because you know it all, because you just started your business, you’re all that. The Buddhists say that when the student is ready the teacher appears.

John:

I love that.

David:

And so it’s this moment of surrender, yeah, it’s this moment of surrender where we are now truly open to possibility and that’s when people show up.

John:

Most investors are constantly telling me we need to work with people who are coachable and so when you’re telling this story, they must be humbled to surrender in this abyss that they’re coachable for the first time maybe.

David:

Coachable, open to advice, self-aware, they know what they know, but they’re also very aware enough to acknowledge what they don’t know and where they need help. We will not consider working with or investing in a company until the founder has been at that point and so at that point your Obi Wans, your Yodas, and in this case, the case of Dorothy, your lion and your scarecrow and your tin man show up and they’re there to walk the path with you.

They can’t take the journey for you, but they’re going to be on the yellow brick road, literally the path, alongside you on your journey and they’re going to help you to learn what Campbell refers to as the tools of transformation, so for Dorothy, if you recall the tin man, the lion, and the scarecrow were there for heart, brains, and courage. Those are the three things she was going to learn about herself on the journey.

For our clients and for your listeners, some of those tools of transformation are going to be finance, operations, sales, marketing, go to market strategy, licensing, business development. So, these are what we at the Meriwether group bring to our clients when they’re in that process of transforming the businesses truly becoming and where the founder and the owner is deeply on their path of growth. So, you’re walking down your path, you’re on your journey, you’re learning the tools of transformation and now you reach your defining moment.

So, for Dorothy her defining moment, so she thought it was, was going to see the great and all powerful wizard. She had this notion that the journey was going to be something outside of herself and of course, we know the story, she gets there and there is no great and all powerful wizard and initially she’s destroyed. What is this journey all been about? And one of her guides and mentors, Glenda, the good witch, says silly girl, all you have to do is click your heels together three times.

You’ve always had the power. You’re the hero of your own journey. You are capable of doing whatever it is you want to do when you’re in alignment with your truth and that is truth of all the businesses we’ve worked with. They feel like that defining moment be something outside of themselves, but ultimately it is about them getting to a place where they’re finally in flow and that may mean that it’s an exit, a sale of the company, it may be an IPO, it may be an ESOP or succession plan or it may be bringing some executives into the leadership team that allows that founder to start thinking about their next journey, but it’s true, because of the journey, the world is better and you are better for have taken it and so the Meriwether Group, for us, the three main places on the journey are we can help you build the strategy and help you actually execute on that strategy as a group of former founders, as a group of former business owners and entrepreneurs, we have walked the path, so now we’ll walk it with you. We can assist you with capital if that’s one of the tools that you need along the path of growth if you need capital we’ll make it available.

John:

Let me ask you about that in particular since for so many of the listeners that’s what we’re interested in is if someone is going to pitch you for Meriwether Group to invest in them whether they’ve gone through your accelerator, I mean, ideally, somebody would start in your accelerator, hits some milestones, and then you would know them and believe in them and then you would continue the relationship and invest them and then help them exit. I totally love that journey you just took us on with the Wizard of Oz, but if someone says, you know, I think I don’t need an accelerator, but I do need capital. I want to pitch David at the Meriwether Group, what do you look for in a pitch?

David:

Okay. I’ll speak to that, but I’ll say that’s not our sweet spot. As a person on my journey, I’m not entirely interested in just being an investor. For me, I derive a lot of personal satisfaction for being part of the journey and it’s just, okay, we need a check and thank you we’ll be on our way, you know, there are times we’ll do that, but it’s pretty rare. It’s usually that we’re working with you, we’re in the journey, we’re part of it and hey, we identified together you need x amount of dollars to really get to the defining moment and we can make that available.

Having said that, to answer your question, I think a few things are really important in a pitch and again I’m going to speak to this in terms of the left brain, right brain. We want to see that you clearly understand the business and you can speak to the financials, you can speak to a plan and articulate the critical components of how you’re going to reach the plan. We want to see that as a founder and/or your team, that you have enough self-awareness to know that they’re going to be probably areas where you’re going to need help and be aware of those areas, be humble and not pretend that you know everything.

We also want to see and these are really important that the business product or service is disruptive and we define that either as creating a new category or one has not existed or looking at categories that are tired and complacent and are in need of evolution or revolution and I’ll give you a couple of examples. So, Oregon Chai, there wasn’t a chai category. There was tea and tea was a mug of hot water and a bag of chamomile or Earl Grey.

John:

Not even like the British do it. The American version was very – yeah.

David:

And that’s all there was. No one had created a new way to consume tea that maybe gave the consumer an experience that was a bit more like a latte or a cappuccino, so you know, we had this dynamic prior to chai where you’d walk into a Starbucks or a cafe and your choices were have a really fun frilly sort of aspirational, experiential coffee drink or get a mug of hot water and a bag of the same stuff that my great grandmother used dipped into her hot water. We wanted to change that. We defined the site way of being disruptive as looking at categories that are tired and stale.

John:

Oh, can we pause one second? I just want to acknowledge your wife’s role with you in Oregon Chia, because in the book you talk about it so much and it was her passion and her tenacity that kept you believing even when you didn’t believe, she still believed and I think that’s really important for the listeners to know that when you’re pitching, you gotta have the passion and tenacity that you’re the people and to hold on that dream.

David:

It’s a great point. So, Heather was the right brain and I was the left and unknowingly we sort of came together and whether you have a partner or whether it’s just you, in any pitch, make sure you have equal parts passion and equal parts presentation and so, have the person whether it’s shifting your own role in the presentation or a partner or a key manager that can speak to sort of the boring stuff, but the important boring stuff, but you have to have that founder energy that is truly about authentically needing to birth this.

It’s truly like having a child and Heather was that incarnation and every one of the best pitches that we’ve seen that has been successful, every great brand and business has had an incredibly strong founder that is imprinted their DNA on a company. Phil Knight at Adidas, Jobs, you know, these different people who have birth these companies on – I’m looking at categories that are tired and stale, one of our favorite client Dave Dahl’s Killer Bread. This guy spent 15 years in prison and came out and decided he was going to launch a bread company and he looked the category bread and pun intended, it was stale and there was brown bread in the same wrapper, nothing differentiating them and he created a brand that cut through the noise and as a result, he went from Portland Farmer’s market to having sold his business three weeks ago for $275 million dollars.

John:

What a success story. Congratulations. I know I saw that he’s on your website as one of your clients, so that’s just being – you’re being a little humble there. So I just want to shout out that you guys helped make that story come true, it’s not him by himself. We’re going to tweet out equal parts passion and presentation, it’s great, really great.

David:

Yeah, I think you gotta have both. We want to see both in a pitch to us. You know, if you’re too left brain and you’re just super buttoned up on that stuff, it’s going to capture our attention because there is nothing about it that is aspirational, nothing about it that is sort of, there’s no passion in it and you’re going to be a company selling widgets. If you’re too right brain and you have all the beauty and all the meaning and purpose and all of the storytelling, you’re an art gallery or a non-profit and that’s wonderful, but we’re not going to be interested. It’s when you combine the two that’s where the magic happens.

I mean, interestingly, Google is hiring MFAs than they are MBAs right now. Nike, worked very closely with, their senior executive team tells us we’re not a company that sells shoes and apparel. We’re a company that shares experiences and, oh, by the way, we have this product that you can use and so I think those pitches, businesses, and business owners that know how to encapsulate that. How can you be beauty and art and also be profitable and scalable? You know, how can you have passion and also have P&L and when you can braid those together, you are going to create something that the consumer is going to yearn for.

John:

Yes. Beautify said. We’re coming toward the end of the podcast already. It goes so fast with all your great stories, thank you for giving us a whole another description of the Wizard of Oz and looking at it as the founder going through the yellow brick road and having all the obstacles to overcome and then really realizing what the defining moment is, it’s still inside, even if it’s an exit, you have to keep your path growing, you can’t just stop there, because it starts all over again. David, is there one book besides Heed Your Call obviously that you would recommend to founders to read about investment or not?

David:

So, yeah. Can I answer with two? Two books?

John:

Please. Yes.

David:

Okay, so, I reference a bunch of times in this conversation and in our discussion Joesph Campbell and it’s a think one, but I think there’s so much in there that can be helpful to a founder and learning about themselves, their business, and that’s the Hero with a Thousand Faces and it’s a wonderful book. The other book is Siddhartha by Hermann Hesse. It’s a quick read, but again, I think there are so many takeaways in terms of how you approach life and business that can be really powerful for a business owner and founder. So, those are two that I would recommend.

John:

Fantastic. We’ll definitely put your book, Heed Your Call as well as those two in the show notes for people to be able to click and you’re book is obviously available on Amazon and if anybody wants to reach out to you to be part of the accelerator or just follow you on social media, can you tell us what’s the best way to keep in touch with you or watch you?

David:

Thank you, yeah. So, our business the Meriwether Group, we have a website and it’s just MeriwetherGroup.com and there’s a way to reach out to us there. There’s a Heed Your Call Facebook community and we try to update that pretty regularly and that’s just Heed Your Call. We have an Instagram account as well at Heed Your Call and Twitter as well at Heed Your Call, so those things should be available to your listeners and I just really appreciate this opportunity to connect with you John and with your listeners and would love to hear from you guys and if there’s questions, follow up if you want to talk with us at the Meriwether Group about how we can work together, comments on the book, anything. I’m here.

John:

Fantastic. David, you’ve been a great guest. We’re so honored to learn your life lessons not only by what it takes to be successful, but this huge takeaway of prophets and profits, the thinker and the dreamer, the artist and the science. You are someone who walks your talk and it’s been an honor to have you on the show. Thank you.

David:

Thank you, thank you deeply. Have a great day.

John:

You too.

TSP033 | Todd Herman – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Welcome to The Successful Pitch podcast. Today’s guest is Todd Herman who literally has the Spanish royal family and billionaires as clients. He sold and exited successfully from two businesses and now has an incredible 90 Day Year program for entrepreneurs. He’s also a coach for professional and Olympic athletes and he compares being an Olympic athlete to being an entrepreneur.

He said, “You really have to have an alter ego so that you are at your heighten version of yourself and that what allows you to perform better.” He says, “Get rid of worry about your potential and focus on execution. That is the key to being a top performer.” He won the top salesperson of the world in 2010 at the International Ad Festival and tells us the pitches that he gave to win that award. It’s a fascinating story that you won’t want to miss.

Welcome to The Successful Pitch podcast. Today’s guest is Todd Herman who has so many credentials I don’t know where to story. He has a very successful 90 Day Year program. You’ve heard of the four hour week, now you’re going to hear about the 90 Day Year. Todd is also a performance coach for professional and Olympic athletes. He has clients like the Spanish royal family and billionaire clients. What impressed me also was he won greatest salesperson in 2010 for the International Ad Festival in France, so we’re certainty going to ask him to talk about that and more. Todd, welcome to the show.

Todd Herman:

John, it’s a pleasure to be here.

John:

Todd, I love that you are such an expert on what it takes to become an Olympian or professional athlete, because our listeners on The Successful Pitch podcast are all about learning how to pitch to get investors to say fast and there are so many similarities between being an entrepreneur and being professional athlete and I think when you frame pitching to investor as the Superbowl of meetings that you are the expert to talk about that.

Todd:

Yeah. There was a study that just came out a little while ago that my wife shared with me and it’s all about risk tolerance and they found that of groups of people that are out there, no two groups have a high threshold for risk tolerance than entrepreneurs and athletes. It’s two groups. It’s funny because I think the threshold tolerance was like 79-82%, something like that.

The only group that actually rate just slightly higher than them were general in the military, which fair enough, okay. We’ll all bow down to them, but for me, because I really dance between those two worlds of going back and forth between working with entrepreneurs on high performance and how you can actually get the maximum of value that stored up inside of you to show up on the field of play.

Everyone uses the world potential and in my world, in my business, that was word is not allowed to be used, because I don’t believe in potential. Potential I think is a crutch that a lot of people like to lean on to basically excuse away a lot of their bad habits or poor behaviors. What I look at and the other thing really an investor is going to look at as well when they’re taking a look at a successful pitch is, okay, even if you watch on Shark Tank, people like, okay, well, we like the grand idea that you have there. That would be considered potential, but what’s the real performance. Tell me the numbers.

So, even with athletes, I want to know, well, what are your numbers? Don’t tell me about what you think you can do. I want to know what’s showing up on the court, on the field of play, and so the great thing about dancing between these roles of athletes and entrepreneurs is they’re both manic people that are doing crazy. You’ve got crazy ideas to think that you could actually go out there and somehow be the number one sprinter in the world or that you could somehow go into a meeting and walk out with $5 million for this idea that started rattling around in your head months or years ago on your coach and now you’re asking for money. So, it’s crazy people, but I love working with them.

John:

Well, I really like what you said there about the idea that you have for your product is your potential that you have, but what really counts is your ability to execute that idea. IE, what are your numbers and investors are saying we’re not going to fund anybody who “doesn’t know their numbers” and we’re investing in people who know how to execute. Todd, you’ve had a two successful businesses with great exit. So, you clearly have been down this path, but I want to go back even further. When I was watching short video you did about a life lesson you learned from our dad. Can you share that with the audience?

Todd:

Yeah, sure. I mean I was young and we were – I grew up on a farming ranch in Western Canada. I live here in New York City now, but I’m still at my core a farm kid and we were walking out of a steak restaurant and on the way up just like most people I had some meat stuck between the teeth, so very natural for me to snag a tooth pick and when I walked out the door, I tore the tooth pick out of the cellophane and then I tossed the cellophane on the sidewalk as we continued to walk towards the car and my dad is a man of very few words.

Always sort of led by example more than anything else, very respected in the community and he stopped, walked back, grab the cellophane and he always, just like most good farmers, had a breast pocket with pens and a notebook that he used for the farm and he grab the cellophane and he stuffed it in his pocket and kept on walking and I thought to myself, wow, that is a perfect example of how you win at life is by taking care of all the little things.

Most people always focus on the big stuff, but in my experience in working with high preforming people is there are fanatical about making sure the details are well taken care of. A friend of mine and someone I’ve been able to do some work with, Brian Fetherstonhaugh who is the CEO of Ogilvyone, you know, one of the greatest advertising agencies on the planet.

We were going through and we were doing a presentation together and the gentlemen who put together the slide deck had come in and then Brian and myself and his assistant were sitting there and just watching someone at that level go through that presentation with such a fine tooth comb and just picking out just micro little punctuations errors or just the slightest little alignment issues and that’s the CEO.

Most people would think that they wouldn’t care about those things, but someone who is operating at a high level does care about that impression, because just like the people that are listening are going in to present a successful pitch, you know, glossing over all those things will be picked up on by people who have a tremendous eye for detail, which are typically people who are very successful.

John:

I love that you brought that up.

Todd:

So, the analogy is just take care of the cellophane in your life, because it matters.

John:

It does. I love that you brought that up about the details on the slide, because I’ve had investors tell me, if you have a typo on your pitch deck, that’s it. That’s a no right off the get go, but what I love so much about that story about your dad is A) you’re a master storyteller and I’m constantly working with my clients to teach them how to become a master storyteller.

So, you described how old you were. You described that your father is a man of few words and that he literally didn’t say anything and by not saying anything he said volumes and then that life lesson that you took and continue to take with your and teach other people. We’re going to tweet that out. If you want to win at life, take care of the little things.

That’s a great phrase and a great tweet for the first 30 minutes or whatever we’re going to be talking together, but I love that. It’s so many things of take care of the little things and be a storyteller and you encapsulated all of that in one quick story. Amazing. Fantastic.

Well, as I promised in the intro, I want to hear about how you won greatest salesperson in France, because, let’s face it, when you’re pitching, you’re selling yourself and your idea to investors, so you must – there must be a great story there.

Todd:
Well, that’s actually how I got involved with Ogilvyone, because Ogilvyone and YouTube are partnering up to do this search for the world’s greatest salesperson and that was back in 2010, beginning of 2010 and now have some successful businesses and the prize was going to be a fellowship at Ogilvyone.

Now, I wasn’t really doing it to get a fellowship at Ogilvyone, but how I found out about it was a good friend of mine actually on Twitter sent me a tweet and said hey Ogilvy who I know absolutely love, because David Ogilvy’s book Ogilvy on Advertising is one of the first books I give people when it comes to just learning how to communicate or sell or market yourself.

I think it’s just, it’s still a great bible today on that subject and she said, they’re doing this cool thing, I think you could win this and so I went and saw they’re very kind of tongue and cheek funny launch video for it and what they asked people to do was just submit a two minute video of how you would sell a red brick on YouTube and so as soon as I saw their pitch video, I was like, well, I know exactly how I’d sell that red brick and I was working on an important project at the time and I was like, you know what, I’ll get to this later, which I teach all my clients is famous last words, because you will never get to it later. If you’re inspired to do it and it’s something that’s really going to make an impact, do it now.

So, I kind of did some self-coaching there, got up quickly, through on a sport coat, kind of wrote a mini little script and one hour later I had the video done, in the can, and upload to basically YouTube and my whole shtick with the red brick was that the red brick was used to help build empires, because the Samaritans who invented the red brick used it to build pyramids. It was also used to build roads to help connect us all, because bricks were originally the thing that we used on roads and then ultimately it was helped to revolutionize homes.

So, there were no longer vulnerable to whims of nature, but at the end of the day, all of those innovations started in the mind of one person and just like them you probably have an idea, a dream, a goal or something that you have never taken action on, so if you buy this red brick, it will be a message not only you but the world around you that you’ve laid your first red brick. You’ve taken your first step to a life of commitment action.

So, it kind of went on from there and then I said, you know, if you buy this brick, we’ll donate, because it was right around the time that Haiti had the big hurricane to roll through and devastate the country and I said all the proceeds will go to the Red Cross at Haiti. So, anyways, it’ll help rebuild that country as well. So, metaphorically it helps to rebuild a nation. Anyway, so that submission video got me down to a final three, final three of us then were flown over to Cannes to the International Advertising Festival.

So, I got a free trip out of it already and there was a gentleman who was like a Hollywood producer, and then a lady from Japan and then we all had to do a two-minute pitch on stage of how we would sell the new Motorola Droid cellphone. Motorola was a client of Ogilvy and now we were in the biggest theater in all of Cannes and that’s where the Cannes Film Festival is at where they put the big movies and so we’re on stage, we’ve got two minutes and me going over there.

I had never been to an advertising festival. I had no idea what to expect, what the demographic of the audience was going to be there, so I actually prepared five different pitches based on different demographics and when I got there I found out and realized after meeting with much of the people that there was going to be a big chunk of the audience that didn’t have English as their first language or really didn’t even speak English at all.

So, I was like, all they’re going to hear is like wah wah wah wah wah, but I did know, so I thought to myself, okay, well, what is a character, a story, something, that when I say the word, it’s the same word across every single culture and so I was like playing with the idea of, okay, Motorola Droid, just the word Droid is a cool cellphone, it’s a technologically advanced thing, who would use that? Batman would use it.

So, I started off my pitch with, you know, if you had to, if you had the opportunity to design your own mobile device the Motorola Droid cellphone would be that device. In fact, it would be the device used by Batman and as soon as I said the word Batman there was this crowd of Greek advertisers that were in front and I saw this one lady nudge one of her counter parts and she said, this guy is good and that’s when I kind of knew I had the audience pretty well, but there was like, 1,300 people in the audience then at the end of it, everyone did live text message voting and then the result was I ended up winning this and it was a great experience. I ended up meeting Mark Zuckerberg at the Facebook party. He came up to me and said, hey, aren’t you the world’s greatest salesperson?

John:

What a great title.

Todd:

Yeah, it went on from there and that’s how I ended up doing a bunch of work with Ogilvy.

John:

I thought there was probably a good story there, but you gave us two good stories. I love it. You know what, it’s so interesting that I want to break it down for what you did so that the people listening can really understand just why you won and why it was so good is when you’re describing something and I tell people, you know, when you tell a story, give three points for people to take away and you said, if you have a dream, an idea, or a goal, right, and it just flows so effortlessly out of your mouth, but clearly you thought that out.

So, people are going to say I have one of those three things, so this is for me and that’s so important when you’re pitching and I constantly work with my clients and say you can not wing your pitch to investors and clearly you did not win this. You had five different pitches ready depending on who the demographics are and that’s of course the key to success is know your audience. Investors are not all the same.

You have to customize your pitch to what their speciality is and what their hot buttons are and what they like to invest in and you nailed that and on your feet no less of what’s the word that resonates across the world that you don’t have to speak English and in that cash was Batman and you became the Batman and won the award. What a great story. Thank you so much. So much great information there on how to pitch and how to connect with the audience.

Todd:

To your point, I mean, there’s a reason why rules of three, you know, are influence. It’s the whole see no evil, hear no evil, speak no evil. Everyone knows, as soon as you say, see no evil, everyone else can repeat the next two things. So, you’re right, organizing information into threes is exceptionally helpful to the audience.

John:

Now, the Batman thing leaves directly into one of your key areas of expertise which is creating an alter ego. Can you speak to that, Batman?

Todd:

Yeah, for sure. So, how I kind of, my first business that I started was doing mental game coaching with athletes, they weren’t pro athletes at the time, because I was just out. I was young, but it didn’t take long before I started working with professional and Olympic athletes and how I got my name was I built up a name as being the person to go to to build a secret identity or alter ego to boost performance and how that came about was I played college football.

I was a nationally ranked Badminton player and one of the devices that I used for my mental game was, you know, not going out on the field of play as myself, because Todd has had his insecurities and his worries and his concerns about other people judging him, but that’s not going to serve me on the field of play where I need to perform and what most athletes do, which is what they get wrong, is they go on to the field and they carry themselves with them as opposed to stepping into something else that’s going to perform for them. I mean it’s people naturally see actors do it. They go out on the stage and they act as a character in order to deliver the results or the emotional response to the audience that makes the story believable.

Well, if you want to make your performance believable, why not step into it as someone or something else, so I had this five-step process. I’m in the midsts of writing the book on it and I’ve been doing this for well over a decade with clients and as I started doing a lot more work with people in the corporate world or entrepreneurs.

I mean, there’s a field of play that everyone steps on. Like, when you go into a pitch, that right there is a certain rule and there’s a certain framework on how to be successful in that field or in that room. Going in there with trepidation and concern and a lot of belief in what you’ve done, maybe you didn’t prepare properly is not going to serve you by any stretch of the imagination.

People are investing at the end of the day. Yes, the idea is important and the numbers behind it important, but they’re still investing in the entrepreneur, because you and I both know the odds of the thing that’s being presented actually being 100% the thing that shows up in the marketplace is, I mean, I’ve never seen that happen personally and I invest in products and companies all the time and so we’re investing ultimately in, okay, do I believe that this person can actually steward this thing to completion. Can they execute or are they just an idea person who gets excited about something and then drops off, you know, three months later and now my money is gone.

So, building out this idea of stepping into a better heighten version of yourself on that field is the fastest way I’ve ever found to help people boost performance and the result that they’re looking for on the field and if you think about it, this is not about being fake, this is not about being unnatural, you are already doing, because who Todd is, I mean, I am, I’ve got two little girls under the age of 2.5. I am very different with them than I am as Todd the hard charging, you know, kind of a spanking in the ass coaching adviser that I typically have that avatar as being.

So, who I am in business is very different than who I am in the home with the family and then who I am with my friends when I’m out for a drink or a beer watching the game is still another version of my personality just magnified to kind of accommodate that experience and so it’s just that. When you get this you become far more intentional and deliberate about who it is that you’re creating so that you can perform at the level that would be considered the highest levels so that you get the result that you want.

John:

I’m so glad that you said that, because I was going to ask you and you answered the question before I could even ask which is how do you have an alter ego and still stay authentic and you said, and we’re going to tweet this, when you have a better heighten version of yourself, that boosts performance. That is magic. That is gold. That allows you to still be yourself. It’s a better…

Todd:

Even to challenge, because I mean, the word authenticity is a very big kind of buzz word that’s out there even nowadays and I challenge people all the time, I’m like, tell me what authentic actually means. Here’s my premise, I don’t think anyone on this planet is really authentic, because if people were authentic, the most authentic moment of your life was when you came out of the womb and you were bloody and you were shitting yourself and you were crying.

So, if you want to be truly authentic that’s how you should be behaving right now and I mean, not to be too explicit, but I mean, that’s the reality, that’s what true authenticity is and how do we all get our personality shaped, yes, after definitely being a dad of two little girls there are just things that are baked into their DNA, you know, my wife Valerie and I have had nothing to do with shaping them what so ever, it’s just in them and you can’t explain it, but there’s environment impacts, there’s social impacts, there’s the friends that we have that helped to shape that personality and so where does their authenticity begin and who they’re showing up in life as that personality begin as well, so my challenge to people is I just don’t believe in the word authenticity.

What I care about is performance. If you’re a good person to me, I don’t know care if you’re not being authentic in the moment. You’re just nice to me. What do I care if you’re being authentic? The result was my interaction with John was a good experience. So whether you were faking it or not, I don’t care.

John:

Great. The other thing that you’re really on that I find so fascinating and useful is this whole concept of positive thinking versus positive expectations and in Silicon Valley and the startup world, there’s this whole thing called the trough of despair that all startups go through and you talked about it in one of your blogs about high performers tend to battle depressive states more than other people. Can you talk about that and what causes that and how can we handle those depressive states?

Todd:

Yeah and to kind of use, maybe a metaphor to help explain it. I mean, there’s, I think of life as having two classes of fish in the sea. There’s a class of fish that lives at the very bottom. It’s cold down there, it’s dark, light doesn’t travel down at the bottom there and there’s an exceptional amount of pressure that’s down there.

Now, currents can come along and maybe the fish that’s living down there gets caught in the current and slowly that current starts to bring them to the surface and if that fish doesn’t escape the current and travel back down to where it’s natural environment is, they’ll get eaten by a predator at that level or eventually get to the surface and the sun will burn them or whatever the case is.

So, they’re built to be done there and then there’s another class of fish that’s at the surface of the ocean and they’re colorful and they’re bright and they jump and they dance at the very top and if they get caught in the current and get taken down to the very bottom, they would die because of the pressure that’s down there and so in my experience of working with thousands upon thousands of high performers at the Olympic level or entrepreneurs whether it’s billionaires or whatever, they’re the people who live at the bottom of the ocean. They can handle the pressure.

They can handle the intensity of what’s it’s like to be in these situations and so I think the real problem that people are experiencing is that there has been this one rule that’s set up in life that is life is about being happy and joyful and I disagree, because I don’t think that Elon Musk sole purpose in life is to be happy. He has said that he is here to solve really big problems for this planet.

You don’t give really big problems to someone whose lens on life is to have just a fantastic lifestyle, right, I think that people need to be careful about the rules that they’re setting up in their head and making themselves feel bad because they don’t feel like they’re happy all the time, because they’re in a stressed out state. No, you chose it and almost like and almost you didn’t even choose it, it choose you.

You’re meant to do this because you can handle it and I’ve said that to some entrepreneurs and friends that have struggled with it and one of them remarked back to me, I’ve been living in just a state of worry and self-judgement for 15 years. He sent me an email the day after. He’s like, I have never felt more free than that. You just lifted so much pain and anxiety and self-judgement off my shoulders, because I felt I was doing something wrong in life, because I wasn’t that typically very, very happy person and now it’s one thing to be able to handle depressive states.

Now, I’m not saying that depression isn’t an okay thing, but it is something that people who do big things deal with, because our roller coasters are a hell of a lot steeper, which means they’re steep on the climb and that means the very top can be incredible, but they’re steep as well and they can go a lot deeper than other people who just aren’t taking on challenges like we would be and so yeah, the trough of despair is something that is very common, but the idea that you’re a bad person for experiencing it isn’t true, it’s just the nature of the world that you’re living. You are sort of meant to handle it and it’s okay.

John:

Well, being a former swimmer, I love the analogy of the different levels of the water and I almost want to combine your two metaphors and say, if my alter ego is going to be a deep sea diver, I’m going to put on my deep sea equipment as my alter ego so that when I have that on, I know I can handle the pressure and the analogy of the water and I won’t always stay down there. I’ll come up for air when I need to, but when I need to get the job done, I’m going to be able to handle the pressure cooker. It’s really helpful.

Todd:

Yeah and so to kind of carry on of your analogy. If I’m going to give someone a tool then that they can put on and wear to help them manage those, that deep level of pressure that we go through is you’ve – people have got, it’s the first thing I try to get all my private clients to get into is meditation and it’s going to sound. I mean, here are the numbers, 10 of the top 13 private equity traders in Wall Street, here in New York City, the wealthiest people will all credit.

The reason that they outperform everyone else, they meditate every single day and that helps them avoid the emotional highs and lows that everyone else in the market is going through, because really what meditation does it flexes the frontal lobe. The frontal lobe of our brain is the part that allows us to stay focused, to concentrate and to mitigate the limbic emotionally part of our system.

So, whether it’s two minutes, studies have proven even if you do two minutes of meditation, that will, it’s proven to help manage emotional states even just two minutes and the misconception that people have with meditation is that, because people go, yeah, I’ve tried meditation and I can’t get my mind to shut off. Meditation has nothing to do with your thoughts going away. That’s the kind of misnomer or the myth that’s out there. Meditation is all about being okay with what’s passing through your mind and not getting attached to it.

So, if you think about it this way to use a metaphor, your mind is the sky, the thoughts passing through it are clouds, what most people do is they get some sort of self-judgement cloud passing through and they get entangled with the cloud thinking that’s who they are and I’m telling you, no, it’s not, and here’s the thing, we all think those thoughts. I’ve worked with the ultra high-performers on the planet and I can tell you they deal with those self-defeating thoughts too sometimes, they just don’t get entangled in it and they continue to execute and take action.

John:

That’s great. So, we’re going to tweet something out about mediation is like clouds going through your head, just say next, next, next, don’t get entangled in anyone that would bring you down, just go next. Keep the wind going, keep the clouds going, and I think that’s so helpful, because like you said, so many people are so afraid, I can’t stop my thoughts. Oh, I don’t have to, I just can’t – the goal is to just not get stuck on one and go over and over to keep reliving it. How many times have we’ve done that?

Todd:

Think about when you’re just looking at the sky anyway. Sometimes you’re just looking at clouds and you’re like, oh, that’s an interesting shape. So, the same thinking can go with your thoughts. You’re like, oh, that’s interesting that thought entered my head. Be more curious about it. Don’t get entangled into it as that’s me, that’s who I am. It’s more like, that’s an interesting thought. How about that? What about that one over there? Like, that’s kind of the more, be more observer of it rather than someone who is just identifying themselves with the thought.

John:

I love that so much, because I think that’s the key is not being attached to any one outcome especially when you go pitch an investor, you can not be attached to that outcome, because they’ll smell it and just like a date or anything else, you can’t be attached – is this the person that’s giving me the money? Is this the person that’s going to marry me? Is this, whatever, you just have to not be attached to anyone outcome and you’ll be at your top performance.

Todd:

Staying engaged in the process. That’s the key.

John:

That’s great. So, you’ve already given us a hint of your book that’s coming and you mentioned the Ogilvy book. Are there any other books that you want to recommend to the listeners before we go?

Todd:

I think a great book that’s out there, I don’t even know if it’s in publication anymore, but it’s Seeking Wisdom from Darwin to Munger. It is a fantastic book on just thinking in the context of models. Like, I’m a really big visual models person whether it’s v-diagrams, XY graphs, and pyramids and stuff like that and Warren Buffett has said that Charlie Munger is the fastest 30 second thinker on the planet and that’s because Charlie Munger has made it know that he has about, I think it’s 96 different mental models that he’s memorized from tons of different disciplines whether it’s mathematics or physics or literature or psychology so that he can think quickly. He doesn’t get entangled in the whole subject matter. He goes, okay, what’s that about? What is the idea of confirmation basis about so that when I’m listening to John give me a pitch and he’s telling me why this thing is going to be successful, is he coming at it from a point of data or is it confirmation basis, because he’s travelled down that road into this niche or this industry.

So, he’s able to think far more quickly and it’s based in real data and real science. It’s a fantastic book and it’s just a really great read. People think it may be really dry, but it’s such a great book and then I think another great book that’s out there that I actually would attribute a good chunk of maybe my messaging that I had which was successful for the red brick video, it’s called Metaphorically Selling.

Most people wouldn’t have heard of it. It’s not like it’s a best seller, but the lady does such a great job of giving examples of how one speech without a metaphor and one speech with a metaphor connects. I mean, you were talking before about stories. Metaphors are just a micro story. You know, a very short sound byte for people. So, Metaphorically Selling is, I mean, I recommend that book to, I should probably – she should probably send me a commission checks, because I send all those darn books and maybe she has – it’s a great book and she’s a lovely, smart lady that wrote it.

John:

Well, you’ve given us so much valuable insights into how to sell through metaphors, how to look at the numbers and not focus on your potential, not get stuck in your ideas, to get out of the trough of despair. Is there any one final piece of advice you want to leave the listeners with?

Todd:

Continuously take action. That’s it. That’s just the hallmark of how you get yourself out of the trough of despair, just keep moving, and not defining where you’re at with where you’re going to be for the rest of your life. I mean, that’s not, because I want to be careful that we’re treating everyone as if we’re in this trough of despair, but just keep taking action and you never know what’s going to be around the next corner, you just don’t.

John:

That’ll be the final tweet, keep taking action. It’s that simple. Thank you so much for being on today Todd.

Todd:

John, I appreciate it. Thank you.